Alex Douglas

December 5, 2009

Mining and Economic Development

Filed under: Research — afdoug @ 6:23 pm  Tagged , ,

Is extracting natural resources inherently harmful for a country’s economic development? Bolivia, home of the once-largest-in-the-world silver mine of Potosi, is now the second poorest country in the Western Hemisphere (after Haiti). Nonetheless, when we take a careful look at the dynamics of colonial silver mining, particularly mining’s labor institutions, there are a lot of parallels between 17th-century Bolivia and England during the industrial revolution. Tens of thousands of laborers migrated to proto-industrial jobs in cities where they worked freely for wages. Government policies subsidized capital investment at the expense of agriculture, although agricultural production was maintained by gathering land holdings into large estates managed for profit. Don’t believe me? Take a look for yourself:

Mining and Development in 17th Century Bolivia

October 19, 2009

PBK Induction Speech – Liberal Arts

Filed under: Thoughts — afdoug @ 2:35 pm

Professor Greenia and Professor Abelt told me that the student response is traditionally a defense of the liberal arts. Simple enough, only one catch. What are the “liberal arts?”

About 1600 years ago, Martianus Capella wrote an allegory about the seven liberal arts: rhetoric, logic, and grammar, or the trivium, and geometry, arithmetic, astronomy, and music, the quadrivium. The problem with ancient texts, though, is that sometimes we don’t have accurate copies. I know that Economics and Hispanic studies were included in the original. So, I moved on to a more reliable source: Wikipedia, which quotes the Encyclopedia Britannica:

In classical antiquity, “liberal arts” designated the education proper to a freeman (from Latin liber, “free”) as opposed to a slave.

“The education proper to a freeman as opposed to a slave.” This is problematic, because slavery itself is never proper, and nothing but freedom can be proper to a slave. So, I will offer my own definition: a liberal arts education is an education in freedom.

An education in freedom must go beyond skills. In any enterprise, there is a ladder of responsibilities, beginning with basic skilled tasks but ending with questions about our values and ideals. For example, take Miller Hall, the new Business School under construction down the road. We lay bricks from the first rung of our ladder, we organize bricklayers from the second. On the third we draw the blueprints, on the fourth we imagine the building, and only on the fifth level do we talk about spending priorities at a public university. A little higher up, about the idea of public universities, and higher yet we question the hierarchical assumptions of any academic institution. Eventually we must get to talking about our life goals, and about life itself. If we stop at the third rung, or the fourth rung, or even the fifth rung, someone will stand above us on the sixth and he or she will be our master in ways we may not realize. If we will be free, we must take responsibility for every sort of question, and so an education in freedom makes no assumptions.

Sometimes we equate “liberal arts” with “citizenship education.” This is true, but let us be careful about what we mean by citizenship education. It is more than training students to vote, to lobby and to build a more just world. These are excellent first steps, but we must include all the rungs of the ladder. We discuss not just how to build a better world, but how to imagine one. A liberal arts citizenship education allows students to choose their own role in the body politic, as traditional citizens or, if they choose, as visionaries who propose a new role for citizens. Either way, the result is a deeper citizenship which flows not simply from training but from an internal richness.

How do we develop this inner richness? How do we climb this ladder? A liberal arts education begins as a ship departing for the open ocean, abandoning all masters and taking sole responsibility for its own navigation. To quote Melville, “all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.” But the shore need not be slavish. Striding along the deep we plant our feet; we grow a solid independence that does not shake when we sight another ship. Our sovereign meditation joins with other voices and forms a conversation. The sojourning sails return to port, and our independence becomes the foundation of our re-incorporation into society.

Our strongest supporters now surround us–parents, professors, peers, and others who do not fit in this room. We engage together, bearing the prizes of our pondering, sharing new questions and competing answers. Together we have lost a university president and gained another. Together we watch and work as the same happens nationally. Globally, we are drifting into a financial crisis. Locally, nationally, and globally, we serve, called not only by tradition but more importantly by our own reflection, and because we boast a liberal arts education we question the foundation, we imagine a different structure, and we renovate our world.

In 163 days, we will wear these robes again and listen to a better speech. We will graduate, we will leave William and Mary, but we will not stop pursuing our education in freedom. We will continue our sovereign meditative searches, leaving no question unasked. We will learn together, offering new questions and competing answers. We will labor together–on all the rungs of the ladder–to advance humanity’s cause. We will continue our liberal arts education. Go Tribe and Hark upon the gale.

September 29, 2009

Listen Before You Preach! A Lesson from Silver Refining

Filed under: 1,Thoughts — afdoug @ 1:55 pm

Near the end of the 18th century, Spain watched the silver production of their mines in Mexico falter, and assumed the cause must be foolish criollo miners. They decided to send a mining mission to teach the Mexican miners. After all, enlightened Europeans were busy developing better mining and refining practices, so surely they would be able to help out their backwards brethren. Clement Motten documents the results in Mexican Silver and the Enlightenment:

“The Born process represented the very latest European scientific research on the problem of refining silver ores. It was introduced to the New World by men who were experts in its use, and although they at first experienced technical difficulties, were able eventually to get the results they wanted. Why then did it fail? … the Born profess performed as well as it was supposed to, but it was not as good for New Spain as the patio process. In Europe, where speed was important and labor was expensive, the much faster, actually more wasteful Born process was preferable. In Mexico, where time was not important and labor was cheap, it was more profitable to use the slower, less wasteful patio process.”

Another example of the importance of listening before you try to solve someone else’s problems.

December 19, 2008

Imagined Communities: Immigrants, Transnationalism, and the Spanish-Language Media

Filed under: Research — afdoug @ 11:10 pm  Tagged , ,

Some Hispanic Studies majors instinctively gag when they hear the term “imagined community.” There’s a reason for drilling it into our heads, though: nations are social constructs and a good deal of politics, especially politics of migration, come down to how we imagine our nation. I’ve taken a look here at how two Spanish-language newspapers in the US and Mexico imagine a transnational migrant community. Oddly, the US paper appears to avoid discussing transnationalism and US civic rights at the same time. 

Imagining Transnationalism in the Spanish-Language Media

Roberto Bolaño and the Bastard Canon

Filed under: Research — afdoug @ 10:54 pm  Tagged

Roberto Bolaño is an dead Latin American novelist recently proclaimed the most influential of his generation. He wrote The Savage Detectives and 2666. Strangely, he is both canonical and vanguard; he publicly insulted most of his famous predecessors but has inherited their mantle. The attached essay (in Spanish) examines what Bolaño’s canonization tells us about canon formation.  

Bolaño y el canon bastardo: Los detectives salvajes como novela vanguardista y canónica 

July 9, 2008

Colonial Science in “One Hundred Years of Solitude”

Filed under: Research — afdoug @ 10:00 pm  Tagged

In this essay from last year (in Spanish) I outlined the course of scientific discovery presented in One Hundred Years of Solitude by Gabriel García Márquez and argued that Márquez blames colonial intervention for the lack of progress but expects the problem to disappear given time.

The essay in Spanish: Ciencia Colonial en “Cien Años de Soledad”

Why Economics Bothers Some People

Filed under: Thoughts — afdoug @ 9:50 pm  Tagged

Economists have illuminated a number of interesting issues by using numbers–often dollars–to quantify things we don’t normally think of numerically. Some people, however, find this offensive. What’s the rub?

Tyler Cowen uses a parable to explain the significance of money in Discover Your Inner Economist. According to Cowen, it’s a bad idea to pay kids to do the dishes because money signals that other motivations–such as familial obligation and kindness–should not be taken into accout. Robin Hanson and Russ Roberts discuss in an episode of Econ Talk why money makes people uncomfortable–bringing a $100 bill to a friend’s dinner party instead of a bottle of wine might mark you as uncaring (you didn’t invest time) or might simply signal that you see the relationship as commercial.

In my opinion, the key problem with money is that it reminds us of a zero-sum game. In the short term, money is essentially a limited commodity which moves in opposite directions for each party involved. If I give you money, you gain and I loose. We don’t identify with one another’s interest (i.e. “love” one another) but instead are suspicous. When we think according to the “money” schema, we think about zero-sum relationships.

If money is replaced with time, attention, and other “social commodities”, we switch to a “synergistic” schema, meaning that additional value is created when people work together. The game is no longer zero-sum and, instead of welfare moving in opposite directions, we identify with one anothers’ interests and our welfare increases when the other’s welfare increases. If I spend time with you, you don’t “steal” my time and thereby have more. Rather, you spend time as well; both parties invest the same resource and both receive the same benefit (presumably, they enjoy socializing). The shared wine and the appreciation for doing the dishes cannot be quantified and are therefore easier to associate with synergistic cooperation, making them less threatening. They may even make us feel that others are identified with our interests- that they “love” us–and increase our sense of self-worth. Understandably, non-economists are offended by well-intentioned attempts to quantify–and especially dollarize–fields outside of business and finance.

If I’ve properly described the mechanism of dollar distastefulness, it may apply to reducing stress. Quantifying time, monitoring it closely and considering the spending of time to be an economic exchange is appropriate for work and can increase productivity. However, applying the same “time accounting” to our personal and social lives causes us to think of liesure as a zero-sum game. Instead of enjoying the moment, we are suspicious that our time is being taken from us unfairly. We perceive a zero-sum world in which we can only trade a limited amount of time for limited liesure. We’re frustrated by our lack of control.

So, although us economists call time an asset in short supply, it might be better to think of it in terms of experiences.

June 21, 2008

Resource Curse

Filed under: Thoughts — afdoug @ 7:07 pm

A friend mentioned to me yesterday that foreign direct investment in developing countries is correlated to corruption. We mused that the causation may run in either direction: perhaps corruption gives rich foreign investors an upper hand, or perhaps foreign investment creates opportunities for corruption. Of course, they could have a common third cause: an abundance of natural resources may lead, as the Wikipedia article mentions, to corruption while simultaneously offering an attractive industry for foreign direct investment.

This got me thinking about the idea of a resource curse. One of the potential problems associated with natural resource abundance is that of the “spigot economy” – government income is derived from selling extraction rights and “opening the spigot” rather than taxing individuals and business who profit through entrepreneurship and investments in capital, human and otherwise. As a result, the government has less incentive to encourage business–and less need to remain on good terms with its citizens. I wonder if military power might yield a similar pattern. Countries which can project military force into other countries can derive their diplomatic capital by turning on the threat of force “spigot” rather than developing productive relationships. They are not dependent on their own economic growth (except inasmuch as it is necessary to sustain their military) to maintain their dominant roles in world affairs. After all, isn’t pillaging cheaper than investing?

Now, to cite some examples… I originally had the US in mind, although it doesn’t seem fully relevant as we don’t do much in the way of plundering. It’s still an interesting thought exercise, though: how would political economy in the US shift if our military was reduced to the size of Germany’s?

Medieval Islamic civilization was well adapted to the conquer-and-plunder model, and managed to expand rapidly as a result, but probably lost political stability in the process. Of course, the medieval Islamic world may have experienced more economic growth than other areas of the world at the same time; Islam certainly lead to greater trade.

A military supremacy version of the resource curse could help explain the collapse of empires. Then again, this may be limited to situations where plunder is common, or restricted to non-financial elements such as diplomatic capital: military supremacy can be expensive!

May 30, 2008

The Hispanic Studies Perspective on Economics

Filed under: Thoughts — afdoug @ 1:20 pm  Tagged , ,

As I mentioned in the previous post, Hispanic Studies usually analyzes cultural products (often narratives) to understand how they construct a system of meaning. In William and Mary’s HS lingo, this is the “struggle for interpretive power”– competing with other sources to have one’s cultural products tell the definitive version of shared narratives and thus influence society’s structures of meaning, often with an eye to distributional politics. For example, Benedict Anderson’s “Imagined Communities” (the number one buzzword from my year in HISP 281) talks about how these narratives define who is included in the “nation” which can have serious (including financial) consequences for those individuals when policy is based on these cultural ideas.

Typically, we think of the Hispanic Studies perspective on Economics as characterized by references to economic questions in cultural products. For example, “The House of the Spirits” by Isabelle Allende describes as heroic the price controls and other socialist policies put into practice by Salvador Allende in Chile and blames foreign intervention for the controlled economy’s failure to provide. Most economists today believe that price controls are usually a bad idea and would prefer to blame Salvador Allende for poor management. Some Hispanic Studies majors may simply consider the conclusions of modern economics to be another narrative and may even view the liberal, literary narrative as more valid. (Most of the works we focus on in Hispanic Studies at William and Mary are, similarly, to the left of the political mainstream in economics. Perhaps these works are simply superior to right-wing works in literary terms).

However, I don’t think this is a proper characterization of the Hispanic Studies perspective on Economics. I’d prefer to think of these sorts of references as low-quality economics work done by Hispanic cultural producers (authors). Other cultural producers may do higher-quality economics work. Hispanic Studies majors are a separate group and approach these works critically. Their chief goal is not to make political and economic commentaries, although many do so; it’s to understand the dynamics of the cultural elements of others’ cultural products. In this sense, Hispanic Studies should let economics answer the economics questions and focus on the cultural issues which, if economics addresses at all, it does so with little or no authority.

For example, consider the economic issues of immigration. Economists can approach immigration as a question of maximizing welfare. The current flow of disproportionately low-skilled immigrants into the US greatly increases the welfare of these immigrants. It also increases the welfare of those who buy goods and services produced by these immigrants at lower prices. Those who compete with these immigrants for low-skilled jobs (mostly native high-school dropouts), though, receive lower wages (probably about 3-5% lower). An economist can estimate and sum these consequences and determine if, on the whole, this inflow of immigrants increases the welfare of…

of who? Whose welfare counts and whose doesn’t? US economists sometimes ignore the welfare gain to the immigrants themselves on the presumption that US policy should be directed solely towards increasing the welfare of US citizens (even so, immigration is probably beneficial). Whether increasing the welfare of non-citizens is worth anything is a question economics cannot address (ok, sure, they can tell us whether a higher GDP in Mexico is good for the US, but they can’t tell us whether we should care about a higher GDP per capita in Mexico for its own sake, and if so, how much). Economics seeks to answer questions within pre-established cultural frameworks of meaning which it is powerless to comment on. The very same dynamics described by Benedict Anderson prop up our economic understanding. The results of our economic analysis may depend on whether we tell stories about an “invading army” of immigrants or a tide of economic refugees, or whether we say “illegal immigrants” or “irregular immigrants”. Hispanic Studies can and should critique the cultural elements of economic work.

A few caveats: first of all, Hispanic Studies is often at a loss for addressing these frameworks of meaning normatively. That is, Hispanic Studies might tell us why we do or don’t care about the welfare of immigrants but may not be able to tell us whether or not we should (this would be more appropriate for ethics). Economics, conversely, may actually have a hidden answer: economics could work backwards, assume”rational choice”, and simply watch how individuals weight others’ welfare in their decisions. Similarly, economic methodologies could be applied to measuring happiness (or some other goal) and its correlation with others’ welfare. Even Economics could answer these sorts of questions on its own, though, we would still need Hispanic Studies to fully understand the political (culture-dependent) choices people make. Hispanic Studies would also be necessary from a practical viewpoint if we sought to influence the prevalent frameworks of meaning.

May 27, 2008

The Economics of Hispanic Studies

Filed under: Thoughts — afdoug @ 11:18 pm  Tagged , ,

The other day I was trying to further map out the intersection of my two majors, and I approached the problem like this: Economics is, at heart, the study of choices; Hispanic Studies is, ignoring the context of the Spanish-Speaking world, about cultural products, which are essentially about establishing meaning. So, what do we get if we look at choices of meaning?

One possibility is to create a producer-consumer model. Authors, publishing houses, the media and government spokespeople are producers, selling entertainment, information, or stimulation in exchange for the adoption of structures of meaning which play into their hands. Consumers passively sell their beliefs in exchange for entertainment.

This model doesn’t give consumers the credit they deserve. Those who “consume” culture clearly play an active role in creating meaning, and clearly have their own ideas about how to develop their structures of meaning. Perhaps they are the protagonists, seeking to express (through “consumption”, production, and re-production of culture) certain structures of meaning which fit their needs. What drives these selections is not clear–I might naively posit a search for the truth, but structures of meaning are not that clear-cut. Maybe narratives and cultural frameworks are adjusted for the sake of conscience–to justify actions one is already taking, to condemn adversaries, to herald a world in which one’s goals are not merely personal ambitions but also transcendent expressions of “justice”.

Justice? Liberal Hispanic Studies majors seem to like these sorts of terms. We should keep in mind that their political opponents never advocated injustice. Rather, they debate one another and affirm distinct notions of justice. In America, Conservatives wish for a system which “justly” offers each the opportunity to succeed or fail on their own; liberals hope for a system which “justly” provides for all. Would it be too Nietzscheian of me claim that these moral affirmations are simply reflections of one’s own position in life?

These suggestions aren’t entirely fair. Cultural narratives, while often political in implications, are not arbitrary. Basque separatists who argue that Spain was created in the “so-called Reconquista” or with the signing of the country’s first constitution during the war for independence from France are making a political point, but empirically it makes more sense than claiming that Spain was its own nation since Roman times. Of course, this is debatable.

I fear I’m unfairly pushing Hispanic Studies towards the fields of Marketing and Public Relations. Far be it from me! Before you get mad, share your thoughts and criticisms.

 

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