Categories
Economics Environment

[1056] Of Exxon surrenders!

After being attacked from all sides by the greens and allies, one of the great global warming deniers surrenders (via via via):

Jan. 12, 2007 — Oil major Exxon Mobil Corp. is engaging in industry talks on possible U.S. greenhouse gas emissions regulations, a move experts said could indicate a change in stance from the long-time foe of limits on greenhouse emissions.

Why does Petronas plan to act on global warming?

I wonder, where does Petronas sit in the climate debate?

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reservedp/s — from Making Waves of Greenpeace:

A couple years back, our intrepid Greenpeace US research team — through their work on the ExxonSecrets website — exposed the role that Exxon-funded Competitive Enterprise Institute (CEI) was playing in trying to ensure Global Warming didn’t impact US energy policy — absurdly in one case being asked to play political assassin by folks in the Bush Administration’s Council for Environmental Quality who thought the Bush Administration EPA chief wasn’t skeptical enough about climate change. (They uncovered a nice little smoking gun memo exposing the collusion.)

Two years ago, I blogged about ExxonSecrets.

Categories
Books, essays and others Conflict & disaster Economics Liberty

[1054] Of Immanuel Kant, free trade and peace

By virtue of their mutual interest does nature unite people against violence and war… the spirit of trade cannot coexist with war, and sooner or later this spirit dominates every people. For among all those powers… that belong to a nation, financial power may be the most reliable in forcing nations to pursue the noble cause of peace… and wherever in the world war threatens to break out, they will try to head it off through mediation, just as if they were permanently leagued for this purpose

— Immanuel Kant, Perpetual Peace, 1795.

Categories
Economics

[1041] Of Malaysian government spending and private investment in 2007

I was reading the Business Times and I saw this:

In 2007, Malaysia’s GDP is estimated to grow at more than 5.0 per cent. The two key drivers of demand will be higher government spending and an increase in private investments, particularly with the implementation of the 9th Malaysia Plan.

Quiz for students of macroeconomics: with ceteris paribus, what will happen to private investment when the government increases its spending?

Answer: See crowding out at Wikipedia.

Nearly four months ago, the Malaysian Domestic Trade and Consumer Affairs Minister announced that his ministry planned to combat shortage with — drum roll please — price ceiling!

Categories
Books, essays and others Economics History & heritage Liberty

[1032] Of dismal science: it mocks liberalism, not economics

I managed to finish up a book on new year’s eve. It might be an odd way to celebrate the eve to you yappies but I am not to blame for that. Eid fell on Sunday and so, though I had the free will not to, I decided to tag along with my family to visit my grandma in Malacca.

Finishing up a book on new year’s eve allowed me to start reading a new one on January 1 itself. I bought three new titles into my collection earlier; of the three, I decided to start with Beinhocker’s The Origin of Wealth. Initially, I thought it would be dry but the first chapter truly attracts me. It starts with a history of economics.

This is what I learn from the first chapter: economics is called a dismal science by Peter Carlyle not because the discipline is all about doom and gloom. Specifically, as it is commonly thought, the term was a reaction to Malthusian theory which suggests that with exponential population growth vis-à-vis geometric food production growth, population would collapse sooner or later.

As mentioned in the notes of The Origin of Wealth, the term “dismal science” was coined by Carlyle in his work, Occasional Discourse on the Negro Question, to mock the “alliance of economists and abolitionists”. Carlyle was a proponent of slavery while liberal economists were standing on the other side of the river, fighting for abolition of slavery. It really has nothing to do about economics having a pessimistic worldview.

On Wikipedia:

Developing a deliberately paradoxical position, Carlyle argued that slavery was actually morally superior to the market forces of supply and demand promoted by economists, since, in his view, the freeing up of the labor market by the liberation of slaves had actually led to a moral and economic decline in the lives of the former slaves themselves.

So, next time, be careful on how you use the term “dismal science”. It might not mean what you meant within the original context it was used.

Categories
Economics Society

[1026] Of internet disruption and Adam Smith’s little finger

What lesson could we derive from the recent Taiwanese earthquake?

Adam Smith is right.

The earthquake caused massive communication disruption across East Asia. The local blogosphere blogs incessantly about the disruption and the frustration and inconvenience that it brings along.

I have yet to see a blog that talks about the victims of the earthquake though. Even the mass media, local and international, are concentrating on the repair effort of the damaged transmission cable, not on the direct victims, the ones that have lost relatives and friends.

In 1759, in The Theory of Moral Sentiments, Adam Smith writes:

Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connexion with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment.

…And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquility, as if no such accident had happened. The most frivolous disaster which could befall himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night ; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own.

Or, paraphrased by Mel Brooks:

Tragedy is when I cut my finger. Comedy is when you walk into an open sewer and die.

While the first part is true, Smith continues:

Human nature startles with horror at the thought, and the world, in its greatest depravity and corruption, never produced such a villain as could be capable of entertaining it. But what makes this difference? When our passive feelings are almost always so sordid and so selfish, how comes it that our active principles should often be so generous and so noble? When we are always so much more deeply affected by whatever concerns ourselves, than by whatever concerns other men; what is it which prompts the generous, upon all occasions, and the mean upon many, to sacrifice their own interests to the greater interests of others? It is not the soft power of humanity, it is not that feeble spark of benevolence which Nature has lighted up in the human heart, that is thus capable of counteracting the strongest impulses of self-love. It is a stronger power, a more forcible motive, which exerts itself upon such occasions. It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct. It is he who, whenever we are about to act so as to affect the happiness of others, calls to us, with a voice capable of astonishing the most presumptuous of our passions, that we are but one of the multitude, in no respect better than any other in it; and that when we prefer ourselves so shamefully and so blindly to others, we become the proper objects of resentment, abhorrence, and execration. It is from him only that we learn the real littleness of ourselves, and of whatever relates to ourselves, and the natural misrepresentations of self-love can be corrected only by the eye of this impartial spectator. It is he who shows us the propriety of generosity and the deformity of injustice; the propriety of resigning the greatest interests of our own, for the yet greater interests of others, and the deformity of doing the smallest injury to another, in order to obtain the greatest benefit to ourselves. It is not the love of our neighbour, it is not the love of mankind, which upon many occasions prompts us to the practice of those divine virtues. It is a stronger love, a more powerful affection, which generally takes place upon such occasions; the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters.

Whether the second part of the “finger and earthquake scenario” would occur, that is yet to be seen. But we certainly will not see it coming from Prime Minister Abdullah Ahmad Badawi. After taking a short leave from holidaying abroad, he has gone back on vacation. This is amid warnings of a second wave of floods.