Tag Archives: economics

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The new face of globalisation: outsourced childbearing and international water shipments

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Globalisation is a highly politicised word, but I’m increasingly thinking of it as a phenomenon rather than a project (the same way I think about postmodernism, as it happens). In a nutshell, globalisation is the trend toward global movement of things: people, ideas, jobs, money, resources. It’s an economic phenomenon, sure, but it’s increasingly social as well – not social as in “social media” (though thet’s a part of it), but as in the ongoing corrosion of geography erasing a lot of old ideas about who we do business with, what we consider to be business, and why we do it.

Take outsourcing. It’s an established idea to take a job like coding PHP and giving it to someone in a poorer country so you (theoretically, at least) get the same results for less expenditure, but what about a “job” like carrying your baby to term [via MetaFilter]?

“In the U.S. a childless couple would have to spend anything up to $50,000,” Gautam Allahbadia, a fertility specialist who helped a Singaporean couple obtain a child through an Indian surrogate last year, told Reuters.

“In India, it’s done for $10,000-$12,000.”

Fertility clinics usually charge $2,000-$3,000 for the procedure while a surrogate is paid anything between $3,000 and $6,000, a fortune in a country with an annual per capita income of around $500.

But the practice is not without its critics in India with some calling it the “commoditisation of motherhood” and an exploitation of the poor by the rich.

“It’s true I’m doing this for money, but is it also not true that a childless couple is benefiting?” said Rituja, a surrogate mother in Mumbai, who declined to give her full name.

For the surrogates — usually lower middleclass housewives — money is the primary motivator.

For their clients it’s infertility or — some claim — educated working women turning to hired wombs to avoid a pregnancy affecting careers.

And how about natural resources? We’re used to the idea of scarce commodities being shipped around at scary prices, but as populations (and their footprints) increase, some resources that we think of as givens become valuable enough to justify the overheads of stuffing them in a tanker and floating them across the globe. Water, for instance [also via MetaFilter]:

Sitka, a small town located on Baranof Island off Alaska’s southeast coast, will sell the water to Alaska Resource Management for one penny per gallon. S2C and True Alaska Bottling, which has a contract for the rights to export 2.9 billion gallons (10.9 billion liters) per year from Sitka’s Blue Lake Reservoir, formed Alaska Resource Management LLC to facilitate bulk exportation.

The city will earn $US26 million per year if ARM exports its entire allocation, and more than $US90 million annually if the city can export its maximum water right of 9 billion gallons. That amount of water is enough to meet the annual domestic needs of a city of 500,000 using 50 gallons per person per day.

Nice idea, at least on paper… but it makes the erroneous assumption that one can just keep taking [x] amount of water from an area, swap it for money and not experience any problems. A friend of mine who works in water treatment and reclamation here in the UK is at pains to point out to anyone who’ll listen that water is shaping up to be the new oil: essential to everyone’s survival, increasingly scarce and expensive, and the sort of thing that people will go to war over…. not only in developing nations, but right here in the privileged West, too.

When I’m having an optimistic day, I find myself thinking that increasing awareness of the finite limits of resources (human labour and skills and time very much included) will gradually push us toward a closer form of global unity: a recognition that we’re all in the same boat, and that the boat only has so much in the way of provisions, and that between us we can sail it pretty much anywhere. Of course, that won’t happen unless we work together to overcome geopolitical and economic barriers… which is why on my less optimistic days the boat metaphor tends to end with a hull full of corpses.

Small-g globalisation isn’t a bad thing; as borders become permeable, it’s an inevitability, like a thermodynamics of things. But the project of Big-G Globalisation is a different thing entirely: it’s a crude, rough-handed and successful attempt to profiteer from restricting and manipulating that ineluctable movement of things, performed by those who already have sufficiently rarified levels of power to influence the flow. The phenomenon of globalisation should be encouraged, supported and monitored; I believe it’s essential to the long-term survival of humans as a species. The project of globalisation needs to be exposed, deconstructed and shut down; it’s an ethical black hole baited with conspicuous consumption and confirmation bias, and it’s killing millions for the benefit of hundreds.

*steps off of soapbox*

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Fractal market movements predict deep economic depression just ahead

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It’s a great time to be a prophet of economic doom, because everyone’s still smarting badly enough from the last suckerpunch to take the threat of a groin-kick very seriously. And if you want a really bleak prediction, Robert Prechter’s ananlysis of fractal patterns in the market movements of the 1930s and 40s implies that the groin-kick will be delivered by an elephant wearing concrete boots [via TechnOccult]:

Originating in the writings of Ralph Nelson Elliott, an obscure accountant who found repetitive patterns, or “fractals,” in the stock market of the 1930s and ’40s, the theory suggests that an epic downswing is under way, Mr. Prechter said. But he argued that even skeptical investors should take his advice seriously.

“I’m saying: ‘Winter is coming. Buy a coat,’ ” he said. “Other people are advising people to stay naked. If I’m wrong, you’re not hurt. If they’re wrong, you’re dead. It’s pretty benign advice to opt for safety for a while.”

[…]

For a rough parallel, he said, go all the way back to England and the collapse of the South Sea Bubble in 1720, a crash that deterred people “from buying stocks for 100 years,” he said. This time, he said, “If I’m right, it will be such a shock that people will be telling their grandkids many years from now, ‘Don’t touch stocks.’ ”

The Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end, he said. That unraveling, combined with a depression and deflation, will make anyone holding cash “extremely grateful for their prudence.”

Prechter’s analysis isn’t very popular, naturally.

The “mathematics don’t work,” Mr. Acampora said, because such a big decline would imply that individual stocks would need to trade at unrealistically low levels. Furthermore, he said, “I don’t want to agree with him, because if he’s right, we’ve basically got to go to the mountains with a gun and some soup cans, because it’s all over.”

Still, on a “near-term” basis, he said, “We’re probably saying the same thing.”

There’s a deep emotional component to Acampora’s response, there – the same one that keeps most of us from considering the real worst case scenarios. Caesar hears only what is pleasing unto Caesar, perhaps… but note that Acampora has shifted his own personal holdings to cash in the short term, so grim times are likely to be on the cards one way or the other.

But Doug Rushkoff, typically enough, sees an opportunity to build a better system on the ruins of the old:

Yes, this is really it. The beginning of a true end-of-cycle economically.

If you own “stocks,” use these bounces to get out completely. If you have to park your money somewhere, consider yourself lucky you have money to park.

The object of the game for those who actually have capital is not how to grow it, but how to keep it. Capital has driven our economy since 1300, and the recent bull market was the end of a cycle that began in the mid-1700′s.

The fact that it is ending is not the end of the world at all. It just means that there’s a whole lot of money out there with no place to go. People can’t find a place to park their money because there’s more money looking for investment than there is stuff to invest in.

And that’s because we’re finally in a technological era where great innovations are more about reducing the need to spend time, resources, and energy than they are about increasing it. iPads aside, of course.

Given the choice, I’ll take Rushkoff’s vision of the future, please. Will we make that choice for ourselves, and carry it through? I guess that’s down to us.

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Attention economics: sub-prime celebrities

There’s sometimes deep truth in flippant analogies. Well, there is in my world, anyway… and here’s an example, as The Guardian‘s Aditya Chakrabortty compares celebrity to shonky mortgages: if you sell too many of the latter masquerading as the real thing, the whole system ends up collapsing in the wake of the (admittedly huge) short-term gains you make from it.

As for the assertion that fame is sought only by a desperate few wannabes, think again. Extrapolating from surveys, the developmental psychologist Orville Gilbert Brim estimates that 4 million American adults (out of a total of 200 million) describe fame as their most important life goal. The proportions are only slightly lower in Germany and urban China.

[…]

If you define fame as being known by strangers, then newspapers, cinema and especially TV have always driven the spread of celebrity. Yet, until very recently, that attention has customarily been at a gradient: the public used to look up to their stars; now they are minded to look down.

[…]

Think back to Wall Street’s sub-prime crisis. That was a story of lenders so desperate for market share and quick profit that they were chucking big sums at people who didn’t warrant it. The tale is very similar in the celebrity-media industry.

Your TV used to be the equivalent of a rating-agency, exposing you only to AAA-rated talent. Now however, it asks you to keep up with the Kardashians; watch a Hilton or an Osborne muddle through the real world, and, yes, be a guest at Katie Price’s latest wedding. The fundamentals of all these celebs are, frankly, ropey, and yet viewers are invited to invest time and emotional equity in them.

Resonances there with our ongoing discussion about gatekeepers and experts in the world of publishing; gatekeeper failure really can collapse a thriving market.

More pertinently, I think I’ve always viewed social currencies like fame (or its more localised little brother, popularity) in economic terms, even long before I knew what economics actually was*. Chakrabortty’s model would need to factor in some of fame’s more curious properties, though: the way it can in circumstances be gifted to another without any loss of personal worth, for instance, or the way one can collapse one’s own federal reserve completely without any help or interference from others, or any intended expense on your part.

Shorter version: anyone who wants to code a detailed version of Whuffie has a whole lot of work ahead of them. But the human brain, jacked into the cyborg extension of ourselves we call the media, can run those insanely complex calculations without knowing consciously how they work… score one up for the meat. 😉

[ * This is a not-too-subtly coded way of saying that I wasn’t hugely popular at school, and spent a lot of time trying to rationalise why that was. I’d have doubtless been better served by not thinking about it, hence appearing to have been less of a massive nerd, and hence becoming more popular. Ah, hindsight… 🙂 ]

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Doom du jour: world without oil

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Just in case the Monday blues weren’t quite enough for you, Wired UK‘s Andy Hamilton has provided his latest “What Would Happen If…?” column on a topical subject: what if the world’s oil workers went on strike forever?

We are utterly dependant on oil. Back in 2000 [in the UK] we had petrol blockades that showed us a brief glimpse of what would happen if oil workers revolted — people started panic buying, shops emptied of food and had to ration, bike sales rose by 400 percent, buses limited themselves to a bank holiday timetable or stopped running completely, schools closed and road use began to decline. This all happened in just over one week. So what would happen if oil workers just walked out and never returned?

The same, but this time the government would enlist the help of the army to ration food. A trip to the supermarket would be a whole different experience with armed guards following you on the way in, and strip searching you on the way out. Despite rationing, food would still not last for long and within a month grass seed, dock leaves and even dog and cat would all be on the menu. Desperate city dwellers would be swapping houses, cars, gold teeth, sex and anything they could bargain with for food. The whole of the western world would decline into a savage, uncivilised mess.

Of course, a strike by the entire oil industry is incredibly unlikely to happen, even in the wake of current events… and there’d always be people willing to break the strike. (Imagining the oil companies hiring unskilled workers isn’t exactly a stretch; operational safety doesn’t appear to be a major concern in those outfits, at least not when compared to profits and shareholder dividends.)

But the underlying point is that we’re hideously dependent on that foul black gunk, and it’s a situation we need to remedy for any number of reasons. Even if environmentalism means nothing to you, and you think anthropogenic global warming is a conspiracy*, the scenario above indicates we’ve got a real addiction problem. Oil is one of the adhesives that holds the world we know together. If you can look at the news coming out of the former Soviet Union, the Middle East and the Gulf of Mexico over the last few years and tell me that’s not a cause for concern, I’d like to get the contact details for your therapist.

And we are all complicit, even smug non-drivers like myself – sat surrounded as we are by the petroleum industry’s less-considered products, plastics. As with energy and fuel, though, there are ways we could make plastic without needing oil [via BoingBoing]; the way things stand at the moment, I hope someone finds a way to build a good profit margin on that real soon.

In the meantime, with the notable exceptions of Paolo Bacigalupi and Bruce Sterling, where’s all the post-oil near-future science fiction? Are people not writing it because they can’t make a good story from it, or is it just too grim to contemplate such a plausible future, even in the framework of fiction?

[ * As regards “the AGW conspiracy”, you’re welcome to believe whatever you like. But if you fancy leaving a response, do read the Futurismic comments policy first, please. ]

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From punk rock to politics: new Icelandic career arcs

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This story’s all over the place, for obvious reasons: not only has Iceland put same-sex marriages on equal footing with the more old-fashioned kind (and seen its prime minister marry her partner under said law) and signed in a raft of free speech protections to its legislature, but the capital city Reykjavik has elected a former anarcho-punk musician and stand-up comic and his lighthearted Best Party to the mayorship…

While his career may have given him visibility, few here doubt what actually propelled him into office. “It’s a protest vote,” said Gunnar Helgi Kristinsson, a political science professor at the University of Iceland.

[…]

“People know Jon Gnarr is a good comedian, but they don’t know anything about his politics,” he said. “And even as a comedian, you never know if he’s serious or if he’s joking.”

But as Mr. Gnarr settles into the mayor’s office, he does not seem to be kidding at all.

[…]

“Just because something is funny doesn’t mean it isn’t serious,” said Mr. Gnarr, whose foreign relations experience includes a radio show in which he regularly crank-called the White House, the C.I.A., the F.B.I. and police stations in the Bronx to see if they had found his lost wallet.

A vote based in protest and dissatisfaction it may be, but I find myself wondering if the Best Party will turn out to be any worse than the more traditional alternatives. There seems to be a growing discontent with party politics all over the world at the moment, and certainly here in the UK… personally, I’d be happy to trade comedians for the jokers we’ve got in Westminster right now.

More seriously, and as I suggested before, Iceland will be worth watching in the years to come because it’s a test case for mass rejection of traditional politics. To say that it’s a kneejerk reaction to the recent troubles the country has experienced is to miss seeing the wood for the trees: perhaps it’ll turn out that a polity needs to be screwed really badly by its corrupt political processes before they’ll wake up enough to start changing the system. Catastrophe has always given radicalism a boost, but now we have the tools to mobilise nationally (and globally) outside of the mechanics of electoral processes, radical change might pick up a little more momentum than it ever has before.

That cuts two ways, of course; it’d be just as easy for a fascist or fundamentalist party to take advantage of a power vacuum as it has been for Iceland’s cuddly comedian lefties. Perhaps the real lesson to take away is that it’s time we all started thinking for ourselves while we still can, instead of outsourcing our opinions to men in suits with false smiles and hidden agendas.

For now, though, I wish to restate my interest in purchasing a share in the Icelandic national identity; it sure reads like there’s more chance of change over there than here at home.