Friday, May 16, 2014

Capacity focus, 86a: Basic economics in a nutshell (with a view to resource allocation and sustainability issues in light of hazards as illustrated by the Piper's Pond, Montserrat case -- thus also, ethics . . . )

Overnight, in looking back at the Capacity focus, 86 post on managing natural resources, I thought it helpful to update by providing a short note on economics in light of the challenge of allocating scarce resources across competing potential uses:
>>Economics, 101, lesson 1 . . . let's pause:
Economics is the study of allocation of scarce resources across competing possible uses, in light of the desire to better and better meet our needs (usually as translated into wants, backed up by ability to pay for products that target those wants -- often expressed in money).  Thus also, the real economic cost of a given use u1 of x1 units of resource R, is the sacrificed opportunity to have produced x2 units of u2 instead, the "next best" alternative. This is, of course, the principle of opportunity costs. A common case is saving and investment in capital . . . productive . . .  goods rather than direct consumption in the short run, leading to higher productive capacity in the longer run that can then sustain a higher level of production and consumption, i.e. a better standard of living. Such requires also that systematic exploration of desirable possibilities in our world that we term research and development. But . . .
a --> to rationally take the risks involved in research, development, saving and investment on the relevant scale, there has to be
b -->such  a reasonable expectation of a high enough return to the saver-investor [the Capitalist] and to the Entrepreneur with the valuable productive idea behind the prospective capital investment (which must be implemented through sound management and skilled labour with an eye kept on all times to monitor and control money flows -- accounting), that
c --> across time the relatively few successes pay for failures to succeed in markets and to cover the given up opportunity of working in less risky jobs. Indeed,
d --> profits are in effect returns to the risk of enterprise and
e --> interest is the "rent" on the use of savings as adjusted for the degree of riskiness of that use.
Where also, in a world based on "dust" and energy flows, the basis for all production and consumption of goods, services, ideas, information, entertainments etc, will be "animal, vegetable or mineral" [or microbes etc.], or all of these. [Cf. KF blog pamphlet on economics, here.] >>
A bit of an oddity in that is the underlying nature of a cost: what MIGHT have been, but is not, once the allocation to u1 rather than u2 is made. We can infer it logically, but in so doing, we imply that costs have an inherently volitional, subjective and invisible mental dimension -- thus also an inevitable ethical aspect. 

Namely, what might have been, but is not, and is not because of a choice we made about which option is more desirable or valuable. 

The opportunity foregone.

Foregone, because of choices we made.

Based, in turn, on our thinking, values, desires, ideals and vision or dreams.

And yes, economics implicitly pivots on there being a world in which people genuinely make free choices, and in which people therefore face the question of moral government, the matter of basic rights to be respected, and thus duties to people as inherently valuable creatures with a dignity that is due such respect, thus the force of OUGHT. Yes, that is incompatible with an evolutionary materialist picture that -- as Dawkins admitted -- cannot bear the weight of ought (or for that matter the weight of reason). Let's refresh our minds further from Capacity focus post 85a:
. . . the sustainability principle is in the end an ethical one, it addresses values and ought-ness:
  •  as valuable creatures in ourselves with an inherent dignity that gives us rights, we ought to be able to meet our needs adequately, so
  • in cases where there is conflict over scarce resources and competing demands or desires, we ought to meet our needs fairly, with a particular focus on helping the poor and marginalised to meet their needs, then also
  • we ought to reflect on and leave room for . . . and even speak up for  . . . the needs of others of God's creatures, and -- as well --
  • we ought to be concerned for posterity and the state of the world it will inherit from us in the course of time. Which entails that
  • we ought to have a posterity*, i.e. we should multiply and fill the world, within reason.
(*Plainly, too, being fruitful and so having descendants is not reasonably to be equated to "assault[ing] " our home world. That phrasing used by Sierra Club is troubling, as it strongly points to a hostility and contempt to people that should give us pause.)
This surfaces deep challenges to the evolutionary materialist worldview.
First, let us observe noted spokesman Richard Dawkins:
Nature is not cruel, only pitilessly indifferent. This lesson is one of the hardest for humans to learn. We cannot accept that things might be neither good nor evil, neither cruel nor kind, but simply callous: indifferent to all suffering, lacking all purpose . . . . In a universe of electrons and selfish genes, blind physical forces and genetic replication, some people are going to get hurt, other people are going to get lucky, and you won’t find any rhyme or reason in it, nor any justice. The universe that we observe has precisely the properties we should expect if there is, at bottom, no design, no purpose, no evil and no good, nothing but pitiless indifference . . . . DNA neither cares nor knows. DNA just is. And we dance to its music. [ “God’s Utility Function,” Sci. Am. Aug 1995, pp. 80 - 85. Emphases added.]
Similarly, on "you won't find any rhyme or reason," we can note a point long since emphasised by noted evolutionary thinker J B S Haldane:
"It seems to me immensely unlikely that mind is a mere by-product of matter. For if my mental processes are determined wholly by the motions of atoms in my brain I have no reason to suppose that my beliefs are true. They may be sound chemically, but that does not make them sound logically. And hence I have no reason for supposing my brain to be composed of atoms. In order to escape from this necessity of sawing away the branch on which I am sitting, so to speak, I am compelled to believe that mind is not wholly conditioned by matter.” ["When I am dead," in Possible Worlds: And Other Essays [1927], Chatto and Windus: London, 1932, reprint, p.209. (Highlight and emphases added.)]
In short, there is a serious question as to whether evolutionary materialism can adequately ground the knowing, reasoning mind, and morals. This last reflects the IS-OUGHT gap issue that Hume and others have highlighted, such that only if there is a grounding IS in the basis of a given worldview, can that view support OUGHT as more than in the end, wishes, feelings and desires -- perhaps backed up by might and/or manipulation: might and manipulation make 'right' in effect. 
Where, in a worldview founded on matter and energy interacting through blind chance and mechanical necessity across space and time, there plainly will be no such IS . . .
So, even though the material nature of many things that are the focus of economics may distract us, economics inevitably brings to bear major ethical issues and so also the foundational reality in our world that grounds OUGHT, the IS of the inherently good Creator God. (And no, as Capacity focus 85a outlines, there is simply no other serious candidate to be an IS that grounds OUGHT.)

This means that if our values and desires are warped or ill-informed or manipulated (especially if inconvenient truths and concerns are conveniently silenced, dismissed and forgotten), we have opened the door to folly, injustice and the unsustainable.

Which -- with all due respect to those who may differ or wish to "move on" to the next issue on their agenda -- brings me back to the Piper's Pond flooding  case, noting again the photos shot only a few days ago, after rains again underscored why there was a mangrove wetland there until the bulldozers came along:

Where, we may now also see that after the flood waters have been drained away by cutting a drainage and the like, all is back to business as usual as of day before yesterday . . . as though nothing significant happened by way of a warning on an environmental factor and trend that plainly has been given short shrift:

 Unfortunately, this reminds one uncomfortably of how, in the 1930's, there was a major series of earthquakes etc that led to a Royal Society investigation that concluded in the major McGregor report of 1939, that Montserrat was dealing with an active volcano. 

Then, in the 1960's, it again rumbled. 

Further investigations confirmed the problem. 

By 1986 - 88 . . . let us remind ourselves, a pioneering Volcano Hazard Study was done, with a major report including a two-page executive summary that warned on what needed to be done; with an obvious projection (made in a Royal Geological Society journal article) that given that there had been crises in 1896 - 7, 1933 - 7 and 1966 - 7, the 1990's were a likely time for a further possible eruption. 

Then, in 1989, a hurricane, Hugo, struck. 

Hundreds of millions had to be spent on rebuilding, but the power brokers and influential voices  insisted that effectively all of the relief money be spent in and around Plymouth, which was in the zone at risk from the volcano, effectively putting all eggs in one basket. Indeed, reconstruction was nearing completion when the volcanic eruptions began in 1995 - 97. 

During that period . . . let us remind ourselves, consistently, officials and powerful interests insisted that the public should not be unduly "panicked," and there was foot dragging on providing evacuation facilities in the north of the Island. The clear agenda was, the hazard is of low risk to Plymouth so let us not become obsessed with neurotics and their visions of destruction. (I am here paraphrasing a statement by a Minister of Government on radio in November 1995.)

Business, as usual . . .

At the turn of December 1995, while preparations were in hand for the annual Christmas festival, officials were literally called away, hammer in hand, to deal with bad news from the Observatory, and so there was a Christmas evacuation. (I personally saw a specific official . . . who shall be nameless . . . receive a message -- hammer in hand -- then walk away from the festival village under construction, to go deal with the crisis.) 

In announcing that evacuation on . . . IIRC . . . the first Friday in December 1995, the relevant Minister spoke of plans for "subversives," a clear hint that those who were warning about the signs, the hazards and risks being unduly run, were implicitly being viewed as enemies of the state. Not to mention, how some of us were named by security forces leadership as "misleaders of the public" in the state of emergency. Others, were initmidated and threatened with prosecution on flimsy excuses.

And yes, all of this happened, I here speak . . . as one of the obviously targetted "subversives" . . . as an eyewitness and a reporter of reliable eyewitnesses.

It is more than time to remember and face the unwelcome but needed truth; if, we are to build a sound and sustainable future.

In such a climate of mismanagement and polarisation, it is unsurprising that key infrastructure was not evacuated from the capital in good time, or that there was not an adequate provision for evacuees in the relatively safe north of the island beyond the Nantes river valley; which is the first radial valley from the volcano that had in it no significant deposits from the last prehistoric major eruption series commonly dated 16,000 - 25,000 years ago. That then materially contributed to unacceptable shelter conditions when, by March-April 1996, the capital had to be effectively permanently evacuated. (No wonder, so many refused to be evacuated from zones at manifest but unacknowledged significant risk, preferring the comforts of home to the awful and chaotic conditions in the shelters.)  

Then, according to reliable reports, the Emergency Department actually routinely bought provisions from people farming in zones at risk. And, I have seen the videotapes of people in fields next to pyroclastic flows . . . in some cases, people who subsequently died when the destructive events of June 25, 1997 happened.

I hardly need to mention that regional media houses that were approached with photos, reports and documents, held back on publication when it could have done some good by bringing pressure to bear on relevant authorities before the disaster. But after the people died on that horrible afternoon, we saw wall to wall media coverage, some of it including pictures previously communicated but held back. 

Again, I will not name names at this time.

But, I think it my Ezekiel 33 duty to outline facts that we need to face.

Yet again.

Thus was set up the circumstances of June 9 - 25, 1997, where on the 9th the scientists issued a warning on the hazards being run in a letter to officials that was kept secret, then when the devastating hot ash and gas flows of June 25th happened, over a dozen people died unnecessarily. A commission of inquiry held by HM Coroner Rhys-Burris, found that the local and UK Governments had contributory responsibility for the deaths of fourteen persons, due to negligence. 

A matter that has never been adequately faced and resolved.

It is also in this context of disaster and mismanagement that Montserrat suffered its major depopulation, as 2/3 of the people left even as 2/3 of the island became uninhabitable.

This is what set up the situation we now face, with 4 - 5,000 people (1,500 being immigrants who do not hold citizenship and many of the resident citizens being Caribbean immigrants typically viewed and termed as "foreigners" -- a potential social flashpoint) compressed into about 10 sq miles, with temporary and inadequate sea and air access provisions, a temporary Gov't HQ, inadequate electricity generation plant (with much more adequate plant left to rot in the evacuated zone because of delays in decisions to evacuate it) and more.

Thus, we see a clear and long-standing entrenched pattern of business as usual insensitive to environmental factors, trends, hazards, risks and risk management.

So, it is sad but unsurprising to see the last mangrove wetland in Montserrat put under the bulldozers in the name of building the centre for the new town . . . even, as many alternatives that would have preserved an adequately functional coastal zone mangrove wetland were brushed aside and have been largely forgotten.

The basic fact that well-functioning mangrove wetlands provide some of the most biologically productive ecosystems vital to a thriving coastal zone, is also ignored, forgotten or even impatiently  dismissed. 

After twenty years of neglect and illegal dumping, the silted up condition made it convenient to suggest that bulldozing the last remaining such wetland in Montserrat and planting a few token mangrove bushes along a drainage ditch to the sea, is an ecologically acceptable or reasonable solution.


Now, of course, this is not specific to this case or this island, the business as usual pattern is widespread all across our region. 

And beyond.

And yet, ironically, the very tourism industry that we hope to build our future on, depends on thriving ecosystems, from ridge to reef. 

Divers on a reef (HT: Guardian, in a report on how reefs
may be lost by 2050, if trends continue)
Upland forests are willy-nilly chopped down to make charcoal or timber and hillside farming leading to runoff and siltation, pesticide pollution, and more. Birds and animals lose their habitat and food sources. Then, normally functioning mangroves and wetlands would allow a reasonable load of silt to settle out, and provide coastal buffers against hurricane storm surges, and of course fish and invertebrate nurseries and shelters as well as feeding zones for birds. But excessive silting chokes the wetlands, then the offshore deposits harm or even kill reefs, and pesticides, fertiliser, oil residues and other pollutants gradually poison the life forms from ridge to reef. So, without the food web base provided by well-functioning coastal wetlands, the overall coastal ecosystem is increasingly stressed and disrupted (and likely over-fished), in a time when we need that very same ecosystem as a tourism attraction.

FYI, tourists can shop anywhere [starting with Amazon and e-Bay these days], why they come here to our region is because we have a conveniently located tropical paradise with exotic and beautiful landscapes and life forms that are photogenic and aesthetically deeply attractive, so quite refreshing and relaxing.

No exotically beautiful tropical paradise from ridge to reef, no tourism, period.

And yes, I am fully aware that the key step that moved us from a collection of disease-riddled death-traps to become tropical vacation paradises is generations of sustained public health measures and education that brought the notorious "tropical" diseases, their vectors and reservoirs under control. Yes, we are a garden-paradise maintained by the sweat of the brows of many competent and diligent managers. Nothing is wrong with judicious environmental management, including environmental health management, forestry management, watershed management, coastal zone management, careful management of physical planning and development initiatives (preferably in light of proper, technically sound environmental impact assessments --EIAs -- that must be carried out by competent and independent persons, and must be participative and transparent if they are to avoid the deleterious consequences of agenda-driven special interests and the notorious "decisions made behind closed doors" . . . ), and more.

In short, for development to be sustainable, it has to respect our environment across all three domains -- bio-physical, socio-cultural and economic --  and the relevant factors and complex interactions that are at work, such as:

(And yes, I am fully aware that the 30 x 30 matrix of sectors implied by this table points to 900 potentially significant direct interactions; with onward compounding "multiplier" effects in the thousands. That astonishing degree of complex interactions and potential sensitivity to stresses beyond natural coping capacity is why it is so important not to inadvertently over-stress key environmental factors in any of the three domains. Just think for a few minutes, carefully, on how short-sighted dismissal of volcanic hazards led to social, economic, and cultural vulnerabilities, and to implications for the bio-physical environment that came out when the eruptions began in earnest between 1995 - 97 here in Montserrat. It is also why a sound Environmental Impact Assessment -- EIA for short -- is a requisite for any significant development initiative in a sensitive zone, one carried out by genuine experts acting in consultation with all relevant stakeholders and one that is transparent before the public, who in any community are the counterweight to powerful special interests.)

The context of all of this is a question of choices between ill-considered business as usual and more sustainable alternatives, in light of reasonably predictable future outcomes, the pivot of sustainable development:

Now, let us refresh our focus:
Sustainable development seeks to better and more fairly meet our needs today, while so husbanding resources and so respecting our bio-physical, socio-cultural and economic environment factors and trends that our children can adequately meet their needs tomorrow.
That means, we have to make development policy and action choices among competing possible uses of scarce natural resources, but that if we squander resources, or build up settlements in the path of predictable natural hazards, or ignore or brush aside the interactions among the environmental sectors in all three domains, we will not better meet needs on a sustainable basis.

With what happened to Montserrat between 1940 and 1995 in the teeth of the warnings from the various teams of scientists, leading to a lost generation of development and a disrupted society with two thirds of its people in involuntary exile, as exhibit no 1 from our time, on unsustainable development in our region.

Let us never forget, HT Ivan Browne:

Yes, that was Plymouth, after the mud and ash buried it; it has been even more deeply buried since. And I used to look up to that steeple in the foreground, perhaps 40 feet up in the air.



Even as Port Royal c. 1692 stands as a warning on what earthquakes can do in our region (with Haiti, 2010 as a refresher lesson as we plainly forgot) . . . and BTW, zones of explosive island arc volcanism are prone to both earthquakes and tsunamis (tidal waves), with low lying flood-prone coastal developments lying dead in the path of hurricane storm surges also.

Port Royal, map of what happened, HT Wikipedia:

Yes, the proverbially richest, wickedest city in the world . . . a notorious pirates' lair . . . sank into the sea leaving a little island behind that has across time rebuilt itself into the current peninsula (on which the Norman Manley International Airport and the village of Port Royal now are). No wonder it was regarded far and wide as the hand of God in judgement.

Remember, what it likely looked like, before disaster struck:

And the testimony of a penitent, Lewis Galdy, whose life was spared:

And, from the same source, the report of a Quaker gentleman, John Pike:
 Ah brother! If thou didst see those great persons that are now dead upon the water thou couldst never forget it. Great men who were so swallowed up with pride, that a man could not be admitted to speak with them, and women whose top-knots seemed to reach the clouds, now lie stinking upon the water, and are made meat for fish and fowls of the air.
 (Let us not forget that, "dust to dust, ashes to ashes . . . "; that which we so treasure and pamper now, will have a similar fate -- though probably not so dramatic -- as, it is appointed unto men once to die then to face Judgement.)

So, let us remember, that those who refuse to learn from history but instead forget or deride and dismiss it, are doomed to repeat or at least echo its worst chapters.

Let us summarise:

economics, ethics, environmental issues and sustainable development, cannot be successfully cut apart and treated as though they are not inextricably entangled and interacting.
When will we learn this and consistently act on it?

Let's put it this way: if not now, then, when -- and why? If not here, then where? If not us, then who? END