Frank’s Case Book

Notwithstanding Mark Twain’s solemn advice to, “Get your facts first, and then you can distort them as much as you please. (Facts are stubborn, but statistics are more pliable.)” allow me to dangle an illuminating graph for your consideration. The variables on the graph shown in Figure 1 require a modest amount of explanation, but the concept behind them is powerful. The graph is borrowed from The Skeptical Environmentalist by Bjorn Lomborg (Page 33). The source for the data in the graph is the World Economic Forum of the Yale Center for Environmental Law and Policy and the World Bank.

Figure 1: Environmental Stability versus GDP. (From The Skeptical Environmentalist by Bjorn Lomborg, Page 33.)

The horizontal axis represents per capita Gross Domestic Product (GDP) in units of Purchasing Power Parity (PPP) dollars for different countries. This is a mouthful of alliteration describing a normalized measure of per capita productive wealth production. It is a complex matter to compare wealth in different countries. The PPP dollar is an attempt to reduce this complexity to a single value. In short, regardless of what a particular product or service — a gallon of milk, a loaf of bread, a train ride, or a Big Mac — costs in local currency, it should cost the same in PPP dollars. PPP dollars are a best effort at measuring relative wealth in different economies using different currencies. Just think of the horizontal axis as the rate of per capita wealth generation.

The vertical axis is an environmental sustainability index. It is a combination of various measures of the environmental status including pollution of the air and water. The larger the value, the better off the country is environmentally.

There is certainly wide variability from country to country, but the implication of Figure 1 is not only clear, but also runs counter to the conventional wisdom of the age. The greater the per capita wealth of a country, the greater is the sustainability of its environment. Not only is productive capacity not inimical to a clean environment, it is positively correlated to it. Of course, correlation is not the same as causality. Nonetheless, it is clear that the large and complex web of economic, political, and social factors that contribute to high levels of economic growth are also associated with clean environments.

Figure 1 should remind those on the Right that there might be money to be made from environmental friendliness. But the Right has long recognized that all resources, including wealth are finite, and that priorities in environment must be weighed against costs.

The Left by contrast has more to learn. It has raised environmentalism to a religious sentiment in the hopes that the issue could be used as leverage to increase public supervision of the economy. Except for those of a Left-wing anti-globalization temperament whose minds have long ago been constipated by the lack of intellectual fiber, Figure 1 demonstrates that an automatic Luddite opposition to economic growth is irrational and counterproductive. Having a clean environment is an important value and it seems that one way to achieve it is to maintain a robust growing economy.

Pondering the infinite is an activity usually relegated to undergraduate philosophy students, particularly in their sophomore year. Physicists often spend their time reducing physical phenomena that are for all practical purposes, like the size of the universe, infinite to comprehensible descriptions. Mathematicians are perhaps the most facile in dealing with and manipulating concepts of infinity. For a mathematician, it is a simple matter to specify a mathematical surface that is infinite in area, but encloses a finite volume. In other words, mathematicians can conceive of a shape that one could fill with paint, but not paint. It is not until recently, that people in computer sciences have considered quantities and qualities, which if formally finite, may prove to be practically infinite.

In 1965, Gordon Moore, one of the founders of Intel, extrapolated from the fact that the number of transistors on a integrated circuit grew from one in 1959, to 32 in 1964, to 64 in 1965 that transistor density was doubling every 18 to 24 months. This is the narrow statement of Moore’s Law. The more general statement of Moore’s Law is that computer computing power doubles every 18 to 24 months.

The latter formulation of Moore’s law has been given more depth by MIT-educated computer scientist, entrepreneur and writer Ray Kurzweil. He has tracked back the growth of computer power from electromagnetic punch card calculators used in the 1890 census to Pentium 4 processors that have 42 million transistors. Kurzweil foresees accelerating increases in computer power past physical limits of silicon-based devices as manufactures employ more exotic bio-chemical technologies.

Much thought has been given to whether Moore’s Law can really exceed limits posed by silicon-based technology and the ever-increasing capital costs required to construct chip-manufacturing plants. Additional consideration has been given as to what this increased computer power can be used for. Kurzweil is not shy about predicting a future with machines that are more intelligent than humans and computer implants interfaced to human minds. While increases in computer capacity has proven to be more persistent in time that anyone has a right to expect, predictions about the future abilities of artificial intelligence have a notorious record of over optimism.

What has not received much thought is the rapid increase in data storage. Writing in American Scientist, Brian Hayes explains how recent changes in technology are actually increasing rate of growth is disk storage. A large disk on a personal computer is about 120 GBytes. Technologies in the laboratory presently achieve storage densities equivalent to disks with 400 GBytes of storage.

At the present rate of increase, personal computer disks will reach 120 Terabytes (120,000 GBytes) in size in ten years. Even if the growth rate decreases by 60 percent, the 120 TByte level will be reached in 15 years. What are we to do with this storage capability? Is natural American acquisitiveness sufficiently great to use of this space.

Recently MP3 digtial music files have been filling disks, especially in college dorms. However, as Hayes points out, if you put enough music to listen to different songs 24 hours a day for an 80 year lifetime you barely fill a third of a 120 TByte disk disk. Even this assumes that storage technology would remain fixed over the 80-year lifetime.

Digital photographs are a new source of data filling up disks. Assuming each such photograph require 1 MByte of storage and assuming a itchy shutter finger producing 100 photographs a day — certainly a well-documented life — less than 3% of the 120 TBytes would be filled.

Fundamentally, storage of video is the only data source likely to fill 120 Tbyte disks. Even so, with growth beyond 120 TBytes over our lifetimes, we likely face the prospect of being able to store more data than we have. It is roughly comparable to having an attic that is growing so fast that we cannot fill it fast enough.

It seems that if we are having problems filling up new disks over a lifetime, the only solution is to increase lifetimes.

• Fixmer, Rob, “Internet Insight, Moore’s Law and Order,” Eweek, April 15, 2002.
• Hayes, Brian, “Terabyte Territory,” American Scientist, 90, 212-216, May-June, 2002.

It often seems that one should look over one’s shoulder in Washington, DC and search for Tinkerbell. Politicians seem to exist in Never Never Land, where little boys always play games and never grow up. At this moment, the economy is limping along at low growth levels while Democrats and Republicans argue about how to keep federal surpluses at historic highs. The total debt is rapidly decreasing, deflating the economy so much that successive cuts in the Federal Reserve rate have not yet restored robust economic growth.What few people realize is that even if the annual federal deficit is nominally zero and the total federal debt does not increase in a particular year, inflation and growth conspire to reduce real debt load. A zero deficit is deflationary and a modest deficit can be neutral.

During the late 1970s, inflation was so high that real debt was rapidly decreasing the debt load even while the country ran a nominally high yearly deficit. That explains how during the Carter-years we experienced a large nominal deficit with a sluggish economy suffering high unemployment. The lowest federal debt load in the post World War II era occurred in 1979, at a time when inflation was over 11 percent. Presently, total federal debt load is rapidly decreasing and we should take care in imposing substantially more deflationary pressure on the economy. Even we if had no growth, inflation would convert a surplus into a two to three percent decrease in the real debt load.

A Conservative wit once remarked that America has two parties the “stupid” party (Republicans) and the “evil’ party (Democrats). Apparently when both Republicans and Democrats agree on something, the policy is likely to be both stupid and evil. Thus in February of this year, Congress passed the Social Security and Medicare Lock-Box Act of 2001 by a bi-partisan vote of 407-2.

Of course the lock box is a fiction. Excess funds received from Social Security can do three possible things. They can fund more current spending, allow for tax reductions, or reduce the total federal debt. Republicans, for their part, hope that the budget discipline imposed by keeping the federal total surplus greater than or equal to the Social Security and Medicare surplus will prevent Democrats from increasing spending. Democrats, by contrast, expect to use the tool of the lock box to restrain Republicans from their congenital urges to return money back to taxpayers.

Unfortunately, the argument between Republicans and Democrats about the size of the surplus will mask the real issue: How do we restore the economy to economic growth? We should return from our trip to Never Never Land. Democrats should make their best case for more spending increases even if the lock box idea is jettisoned. Republicans should urge even larger tax reductions, perhaps even reductions in the Social Security and Medicare taxes, despite decreasing nominal surpluses.

Many arguments in politics revolve around more than the merits of the issue at hand. Some issues serve as symbols or metaphors for other, broader themes. When an issue grows into a metaphor, it often means that clear and dispassionate thought about it will forever be impossible, lost in ardent rhetoric. The question of oil and gas exploration and drilling in the Artic National Wildlife Reserve (ANWR) may be one such issue.The entire reserve extends over 20 million acres, roughly the land area of South Carolina. The area that is required for oil and gas development is about 2000 acres, roughly the size of Dulles Airport in the suburbs of Washington DC. This is far smaller than a ranch owned by left-wing billionaire Ted Turner.

The well-respected, left-of-center magazine, the New Republic has briefly come over from the Dark Side and recognized the disingenuousness of the fight against drilling in ANWR. In the words of the New Republic editors:

“From the wailing and rending of garments that has followed the House of Representatives vote last week to allow ANWR exploration, you’d think environmentalists had good evidence that drilling for oil and gas would ecologically devastate the…Arctic tundra. They don’t.”

Contrary to visions of dead caribou, decades of experience with oil development on the North Slope of Alaska shows only minor instances of environmental damage. The caribou population has actually increased since oil and gas development began.What the editors of the New Republic did not see was that the vision of the decimation of caribou herds now galloping across the tundra was an image that Democrats in Congress wanted to firmly attach to George Bush. Democrats want George Bush to be depicted at as a callous oil-and-gas-man who would be happy to cover Yellowstone Park in a forest of oil derricks if it would make money for his oil friends. Any correspondence of their charges about ANWR to the truth would only be a happy coincidence. Imagery and symbolism were paramount, careful analysis irrelevant.

The editors of the New Republic instead encouraged Democrats to concentrate on what they consider a far more important issue, the Corporate Average Fuel Economy (CAFE) standards, standard to increase the fuel efficiency of cars. Forget about a tiny area in Alaska, the editors argue. It is more important to apply much stricter fuel economy standards to the dreaded Sport Utility Vehicle (SUV). Presently, SUVs are considered trucks and are not subject to the fuel economy standards applicable to cars.

Now CAFE standards are one of those minor issues that make people feel virtuous about supporting. The feeling of virtuousness is a commodity that is in shorter supply than oil. The standards may on balance be salutary, but they do not reduce fuel consumption and pollution as much as people might wish to believe. As stricter CAFE standards are implemented, new cars become more expensive. This increased cost encourages people to hang onto to their older, more fuel-inefficient and polluting automobiles, with precisely the opposite effect that was intended. In addition, when people do eventually buy fuel-efficient cars, their costs of operation drop and people become more likely to drive farther. They choose, for example, to drive for a family vacation rather than fly. This again circumvents the original intention of the legislation.

Moreover, increased fuel economy is often achieved by reducing vehicle weight. A recent report by the National Academy of Sciences concludes that this weight reduction probably increases the number of injuries to and deaths of drivers and passengers. This puts supporters of increased CAFE standards in the same camp as manufacturers of Firestone tires. Listening to some environmentalists arguing that reducing car size does not impact safety, one gets the eerie, deja vu feeling that environmentalists employ the same spokes-people as tobacco companies.

If reducing fuel consumption and associated pollution is really the goal, then increase the price of gasoline through taxes. The pricing mechanism is the most efficient way to reduce consumption. Of course, this policy would not be popular. A substantial increase in taxes would make explicit the cost of doing with less oil. Taxpayers would be constantly reminded of this cost every time they fill up. Instead, Democrats would rather hide the costs (even at the expense of more fuel consumption) in the price of new cars.

But then again it is the symbolism that is important. CAFE standards can fail to meet their lofty objectives, but the real point is for Democrats to pat themselves on the back in moral self-congratulations about our concern for Mother Earth. God knows that Democrats have recently had far too little to feel morally superior about.

The ascent of the doctrine of political correctness on college campuses has been well documented by Dinesh D’Souza in Illiberal Education: Political Correctness and the College Experience, Roger Kimball in Tenured Radicals: How Politics Has Corrupted Higher Education, and others. In a seminal work, The Closing of the American Mind, philosopher Allan Bloom provided the intellectual underpinning for the proposition that too often “higher education has failed democracy and impoverished the souls of today students.”

Their charter and nature ought to make universities intellectual free-fire zones where no idea is so repugnant, so inane, so unconventional or so brilliant that it cannot find a forum for expression. Freedom of inquiry and freedom of expression are necessary prerequisites of academic freedom.

Unfortunately, many universities, fearful that protected groups might have their exquisitely delicate sensitivities offended, have instituted speech codes. The courts have been fairly consistent in striking down these codes as violations of the First Amendment, so they are often disguised as anti-harassment policies.

Rather than championing free speech, much intellectual energy on campuses has been devoted to devising subtle ways of enabling the thought police, without overtly violating the First Amendment. The Left have turned the ethos on campuses upside down. Free inquiry has too often been replaced by a Liberal orthodoxy no less repressive in its own way, than the Catholic Church’s silencing of Galileo for his suggestion that the Earth revolved around the Sun. It is not realistic to hide behind the notion that feelings need to be protected. Civil debate about fundamental and important issues will often and ought to evoke profound discomfort. Protecting people from intellectual and emotional distress hinders intellectual and emotional growth.

However, there are certain groups that appear to deserve no respectful deference, and are so retrograde that offending and insulting their beliefs is not only tolerated but considered evidence of open-mindedness. One such group is Conservative Christians.

The Indiana University-Purdue University Fort Wayne is allowing performances of Terrence McNally’s play Corpus Christi on campus. The play is set in Corpus Christi, Texas, but is not a very subtle retelling of the story of Jesus Christ. One of the main themes is the baseless assertion that Christ and his disciples were practicing homosexuals. Although the play’s defenders suggest that the play is a respectful and sympathetic account of one man’s theology and not meant to offend, the play is deliberately provocative. One cannot use the dialogue “F*** God” and honestly contend that people will not be offended. The play represents bad history and morally corrupt theology that is deliberately offensive to many Christians. If you believe the reviews, it does not even represent good drama.

Chancellor Michael Wartell defends allowing the play’s performance as part of the university’s charter of academic freedom on campus. Blind squirrels sometimes happen upon a nut and in this case Wartell is correct. Foolish ideas have a necessary place on campus. However, would Wartell mount the same difficult barricades if the play were offensive to the gay community? Would Wartell allow the performance of a play on campus that portrayed Matthew Shepard, the gay man brutally murdered in Wyoming, in a negative light? I would not bet on it.

This incident makes clear the double standard with regard to free speech and academic freedom on college campuses. Some ideas are protected with admirable vigilance, while others are suppressed or even prohibited. If you are Conservative or Christian your ideas can be lampooned and ridiculed with impunity. If you are a member of a protected group and adhere to the conventional orthodoxy you are not even asked to feel uncomfortable. Ironically, in the long run, such treatment will toughen Conservatives; hone their arguments and ideology, while the intellectual muscles of the Left will atrophy from disuse. Ideas that require suppression to survive will in the long run be recognized for their vacuousness.

“…There are times when the sacrifice of [the benefits of free trade] is in the broader national interest, or in the interests of preserving some of the values that Americans see as their obligation to export to other, less fortunate nations.” — Irwin M. Stelzer, “The Limits of Free Trade,” The Weekly Standard, April 30, 2001.

The economic case for free and unfettered trade is already well made. Both economic evidence and theory strongly support the conclusion that free trade increases the economic well being of all participants. Much of the increase in wealth in the post WWII era and the post-Cold War period, in particular, were strongly tied to the protocols of free trade. There will certainly be people and industries that are dislocated by the discipline of economic competition. In aggregate, however, wealth is increased and resources are more efficiently utilized. However, economic efficiency and welfare are not the only values against which public policies ought to be weighed. Free trade is more an expedient than an ultimate value.

Domestic labor organizations argue against free trade citing the lack of worker protection in foreign countries, but many times such arguments are motivated less by a concern for foreign workers and more by a fear of competition from poorer people willing to work for less. The AFL-CIO does not spend much political effort fighting for workers’ rights in the Sudan. Sudanese workers are not a competitive threat to American workers.

There are legitimate concerns that different countries might have environmental restrictions that are less stringent than those in the US. Some argue that trade should be used as a lever to compel compliance with US standards. While there is merit in this concern, it must be balanced by the consideration that different countries in different stages of development might reasonably strike a different balance between economic growth and environmental concerns.

In an ironic way, trade restrictions can reasonably be used as leverage to persuade countries to open up their markets. Imposing trade restrictions on countries that erect walls around their markets will mean that in the short run both the US and the other countries will be less well off. However, if such a policy opens up trade, short-term trade restrictions might prove salutary in the long run. However, sometimes even this argument degrades into an excuse for old-fashioned protectionism.

Free trade true believers argue that such trade encourages different countries to become more like us under the implicit assumption that being like us is a good thing. As free trade helps countries become wealthier, they will generally increase both worker and environmental protections. From a political standpoint, the economic discipline of free trade encourages a stable and open legal regime to mediate contractual disputes. The competition caused by free trade forces countries and companies to become more transparent and to loosen up the flow of information, which undermines repressive regimes.

However, the converse is also true. As we trade with other countries we may become, for better or worse, like them. Edwin Black recently published a book entitled, IBM and the Holocaust: The Strategic Alliance Between Nazi Germany and America’s Most Powerful Corporation. The book charges that IBM tabulating machines sold the IBM subsidiary Dehomag were used in the 1933 to 1939 censuses to create a cross-referenced data base of names, addresses, and family histories the Nazis used in implementing their Final Solution. The information from the censuses made the Nazi extermination of Jews more thorough in Germany than in occupied countries. (See Beatty, Jack, “Hitler’s Willing Business Partners,” Atlantic Monthly, April 4, 2001.)

In the 1930s there were already reports of anti-Semitic repression in Nazi Germany, evidence that was overlooked by IBM (and other US companies). The promise of profits made it easier to deliberately overlook inconvenient information. Hitler awarded Thomas J. Watson, the chairman of IBM, the Merit Cross of the Germany Eagle for his efforts.

Even if companies who are involved in trade are not active participants in repression, the promise of profits can cause these companies to avert their gaze from activities as varied as the anti-Semitism of the Nazi to the present day religious repression in the People’s Republic of China. Willingness to engage in trade with repressive regimes may in the long run compel repressive regimes to become less repressive, at least we can hope so. However, the long run can be a very long time and in the mean time our collective souls can be at risk.