The Make Work Society

Recently, I’ve been thinking a lot about economics, the dismal science. In particular, I’ve been thinking about the creation and distribution of wealth. Of course this question has been analyzed countless times before, most notably by Marx, but I’ll add my take anyway. Let’s define the wealth of our society as the sum of everything we create. More precisely, we create wealth at a given rate and it dissipates at another rate. Some things like a restaurant meal or a pop tune, dissipate rather quickly, and others like a gold figurine can last a long time. For the most part, we only get a share of this wealth if we work.

As time goes by, we get more efficient and increase the wealth creation rate (or decrease the dissipation rate). While that seems to be a good thing it does generate some problems. One of them is quite simple. If you get more efficient at making something and you work the same amount of time, then you’ll make more of that thing. However, unless someone wants to buy more of your thing, the extra stuff you’ve created will just sit around and not be of much use. They way around this problem is to either convince people they need more of the same stuff (i.e. marketing) or to produce other stuff. That is why thirty years ago you had a pair of dress shoes and a pair of athletic shoes but now you must have running shoes, basketball shoes, tennis shoes, squash shoes, mountain biking shoes, climbing shoes, light hiking boots, heavy hiking boots, and so forth.

However, even the best ad agency can only convince us to consume so much of one thing. So, once a market is saturated, increased efficiency means fewer people are required to make that product. These people must then find new ways to work to get a share of the wealth. Some can either make new stuff for you to buy like iPods, digital cameras, gourmet food, and storage crates to put all this stuff in or create new services like personal chefs, dog walkers, and fitness instructors. Most likely, they’ll work at a low paying jobs like fast food server.

More efficiency means we will be inundated by more stuff and services we don’t really need or want. Many of the new jobs will not be well compensated so the gap between the rich and poor will grow. In some sense, our solution to distributing wealth is to create a “make work” state where most of the people support themselves with artificial or menial jobs. I don’t really see this as being much better than a welfare state.

One solution is that we could choose to keep wealth creation per capita fixed so as our efficiency increased we would simply work less for the same pay. So if a factory can make the same shoe in half the time then people could just work half as long. Cutting the work week even just a little bit could solve our unemployment problem. The US has twice the wealth of most western European countries. As I wrote before, we are already more than rich enough. What we now need is the time to enjoy some of this wealth.

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Your Ecological Footprint

The ecological footprint gives an estimate of how much productive land and water is necessary to support what you use and discard. This includes all the land you need for the food you eat, the fossil fuels you burn to sustain your lifestyle, the amount of forest required to absorb the green house gases you produce, and the waste you create. There are many websites estimating the ecological footprint. I recently tried www.myfootprint.org. You fill out a questionnaire and then it gives you the result. According to this website (and I didn’t check their algorithm) the average American has a footprint of 24 acres. Worldwide there only exists 4.5 biologically productive acres per person. I answered the quiz twice. The first time I gave what I thought was the upper bound for my current lifestyle and I got a result of 24 acres – the American average. I then tried it again using the lowest bound, ignoring my now long commute and it still came up with 8 acres. It is almost impossible to live in the US and get below this value. Our whole infrastructure is based on an inexhaustible supply of natural resources. I am simply not paying for the true cost of having a New Zealand grown apple in February, working in a climate controlled office year round, and being able to jet over to Europe when I need to. If this is true then we’re going run into serious trouble when the rest of the world starts to consume like we do.

Stem Cell Loopholes

When gas mileage regulations were tightened after the energy crisis in the late seventies, the American car companies hired lawyers to challenge the regulations while the Japanese companies hired engineers to find ways to comply. Given that Toyota is on the verge of surpassing GM as the world’s largest car company, it seems pretty clear which was the better strategy.

Now, a similar situation exists for stem cell research. In an earlier post, I wrote about some of the ethical questions surrounding the issue. Current US regulations only allow federal funding for human stem cell research on embryonic stem (ES) cells derived from a fixed set of cell lines established prior to August 2001. However, many of these lines have been contaminated and researches would like to create more lines. So while some people are striving for a political solution to obtaining more stem cell lines, another group is looking for a technological fix to ease the ethical and religious concerns.

Two papers appearing in today’s Nature advanced online publications, demonstrate possible methods in mice to obtain stem cells without technically destroying an embryo. The first by a group from Advanced Cell Technology, extracts a single cell from a developing blastocyst when it is comprised of 8 cells. They then show that they can create an ES line from this single blastomere that remains viable even after 50 divisions. The second paper from MIT, uses a method called altered nuclear transfer (ANT). This is a means of doing therapeutic cloning without destroying an embryo. Instead of implanting adult cells directly into a donated egg that can become a viable embryo to harvest stem cells, certain developmental genes are first deactivated in the adult cell so that the ensuing blastocyst can never implant in a uterus and hence fully develop.

Both approaches have been embraced and criticized and the New York Times has a synopsis of the reactions. I find both approaches to be rather unsatisfactory and expose the hypocrisy of the whole issue. Evidently, fertility clinics already do single-cell embryo biopsy for genetic screening prior to implantation. Supposedly, it is safe and there have been many successful births from embryos that have had a cell extracted. But I wonder who were the first parents to have had this procedure done on their baby? It sounds like rolling the dice on a life to me. The child may seem normal now but we don’t know if there are any long term consequences. ANT seems completely contrived. The altered blastocyst is completely identical to a normal one when the stem cell is extracted. The only difference is that if both happen to be in a uterus, then one can implant and the other can’t. However, unless you actually implant it you’ll never know. So, if we were to say that we fully intend to alter a nucleus prior to implantation for therapeutic cloning, would that be good enough?

If one wants to have a fully consistent position on stem cells then one can either be for them or against them. There is no middle ground. There are no semantic loopholes. Each cell contains the entire genome so it has all the information to create life. Destroying a cell is thus equivalent to destroying an embryo. If one is against stem cell research then one must be against all genetic and cellular manipulations in humans (and perhaps all animals). That means no in vitro fertilization, no gene therapy, no ultrasound imaging of the fetus and certainly no amniocentesis. One could possibly take it further and say that any biological research that destroys cells should not be performed. People must start accepting that it’s the software and not the hardware that defines a human life.

Forbes 400

Every Fall, the Nobel Prizes are awarded and Forbes Magazine publishes a list of the 400 richest Americans. The bottom line is that the rich are definitely getting richer. Bill Gates again tops the list with 51 billion dollars although the five members of the Walton family (numbers 6 through 10) if combined would exceed his fortune with close to 80 billion. Rounding out the top 11 are Warren Buffet at number 2, Paul Allen at 3, Michael Dell at 4, Larry Ellison at 5, and Steve Balmer at 11.

The combined wealth of the Forbes 400 is 1.13 trillion dollars. To put this in perspective, according the CIA world factbook, the US GDP in 2004 was 11.8 trillion dollars and the world GDP was 55.5 trillion. If we assume an income of 10% per year, the Forbes 400 makes up 1% of the US GDP and 0.2% of the world GDP.

The US per capita GDP works out to be about $40,000 a year. Thus, if income were distributed evenly, every family of four would take home $160,000 per year. You wouldn’t know it after seeing the effects of Katrina but the US is wealthy enough such that every family could be upper middle class. The US is by far the richest nation on the planet. In comparison, the other group of 7 nations all have per capita incomes below $30,000.

So what is the solution to poverty? I think the argument that it can be eliminated with economic growth seems to be proven wrong. We already are more than rich enough to ensure that every person could have a comfortable life. Obviously, some form of reallocation is necessary although I’m sure there are those who would argue that any attempt to redistribute wealth would only decrease US productivity. However, this imbalance cannot be sustained forever. It took a great depression and two world wars to lessen the income disparity from the robber baron era of a century ago. Do we need to go through something catastrophic again to repair our current inequities?