A Moral Obligation of Assistance from Hardin and Deaton

Paul Fischer

2/21/2017

Professor Mark Budolfson

A Moral Obligation of Assistance from Harden and Deaton

This paper will analyze the moral obligations which exist to provide for social communication and governance factors in primitive models of economic and environmental exchange. There are multiple ways of accomplishing this goal, ad to do so logical premises will be expounded while confounding arguments are presented and summarized. Finally, the use of the Franciscan paradox and the recently revealed resolution to that paradox which had been lost for over 700 years will be used to resolve any remaining reservations in relation to the expansion of correct and dismissed outcome scenarios.

Monetary Grounds for Providing Assistance: Economy and Indifference

Deaton identifies a monetary grounds for assistance to developing nations on the basis that the cost of saving a life there runs an average of a thousand times less than a similar operation in the developed world (Deaton, 268). He then proceeds to identify four possible reason for the discrepancy in efficacy of aid provided which include moral indifference, misunderstanding, misdirection, or inefficiency or harm of the aid which is being provided (270).

This last reason is featured in Harden as primary grounds for attacking the argument. Allowing Indian populations to swell by allocating sufficient aid resources would ultimately result in the destruction of the entire population, accordingly, as the environment is degraded it is argued. The critical piece of data which is missed in this critique is the expansion of the economy with the allocation of aid, which empirically is greater than the value of the aid itself (Deaton, 273).

In order to properly analyze this topic, it is necessary to deconstruct the argument, which will draw from lecture (Budolfson, lecture). For a first example, it can be viewed as an example in which a man is walking by a drowning child. Then no effort produces a very great impact and there are virtually no qualifications, assuming bene faccii, that the aid would not be provided. This is not always the case however, so some complexity must be introduced.

Goats and the Exclusion of Monopoly

The question of competition is addressed in Harden implicitly with the discussion of illegal immigrants. To address this question, one can imagine 5 families which are competing for equal share of a pasture while maintaining maximum efficiency. The pasture, however, can only support 17 goats before the entirety of the system collapses, making the 18th goat a negative decision no matter what. It should be seen as obvious that each family would take 3 goats and raise them on the pasture.

Due to the primitive nature of this construct there can be no sharing the property; that is more realistic for real-world economic scenarios in which two industries are not compatible on the same river: the factors of production must belong to one family or the other. There are two or three fair weather solutions which maximize the solution which compromise giving the bonus goats to one or two of the families or of creating a 6th smaller family which has only two goats.

At this point, the importance of a monopoly as a factor arises. Either way, a war between the families creates a family with the extra goats as the smallest family is consumed or the largest family begins to pick off the others. Maximum efficiency is offered at the cost of enslavement of 80% of the population, assuming actions in the greatest self-interest.

The only effective way to resolve this proposal is to publicly raise the two extra goats and sacrifice them, and this effectively prevents any of the families from cheating while offering the least cost to efficiency as security against enslavement. In terms of aid this constitutes an extension of Deaton’s argument in which the economic proceeds from the previous generation using aid is used to guarantee the larger amounts of aid required by a following generation. That is an effective and airtight solution to the premises which have been offered using the logical sequences which are assumed in analysis.

Fishermen and Temporal Constraints to the Catch

Sara Ostrum offers a slight shift in the analysis by pointing to fishermen who are able to share the proceeds, which applies to microeconomic competition. In this case, monopoly is assumed as no one can effectively monitor or determine the efficacy of any group of fishermen, and the solution is found in temporal boundaries whereby the fishermen divide the amount of time spent in the the fishing zone rather than the catch or product. This introduces two new concepts in form, that of positive incentivization and of natural regulation.

Rather than affording fines or punishments to the fishermen, a coffeehouse which is the favorite place for all of the fishermen to visit serves as an incentive for them to stay out of the water when they are not permitted to fish (Ostrum, 20). This effectively prevents monopoly while standardizing the catch of individual fishermen. It would not work for the families of shepherds because a family could not raise all those goats without enslaving other families. That is an example of a slight shift in premises resulting in quite radically different optimal solutions.

The Franciscan Paradox Revisited

The lost manuscript of St. Francis of Assisi was recently discovered and presented at the University of Vermont. He was a Saint famous for becoming naked as he gave his belongings away to people in the middle of the street. While coming from a wealthy family, he had an intense conversion in 1205 and, by the time he was Stigmatized, gathered a following which included Bishops and Popes. It was well known at the time that Francisco alto Christo and that his life would touch millions for generations. Franciscan friars remain a dominant force in the Catholic Church and his teachings are holy for Christians of all denominations.

His paradox occurs after the decision to provide aid has been made. As he became more famous, he realized that the value of his power was greater than it had been even as the son of a wealthy merchant. Justifying the incentive to give as a selfless act with the reality that power can be obtained by giving gifts has become known as the Franciscan Paradox and remains the final consideration in determination of whether to donate or provide aid. The official answer was largely lost for 700 years, but the new documents provide context to the quote “we cannot fit a square into a circle every day” as part of a Franciscan prayer. Of course the temporal nature of the argument plays a critical role in interpretation of this as well: the natural solution which presents is that there will not always be times of need. Goodness of intent can be assumed, as long as the provider does not then try to expand their power by creating problems once their aid has been received.

References:

Mark Budolfson, “Environmental Ethics: Philosophy and Logic”, Spring 2017

Angus Deaton, "How to help those left behind", in The Great Escape

Garrett Hardin, "The Tragedy of the Commons", Science

Elinor Ostrom et al., "Revisiting the Commons", Science

Indian Protected Area Evictions: Contemporary Shortages in Housing and Water Supplies

Paul Fischer

2/13/2017

Kaitlyn Morris

Indian Protected Area Evictions: Contemporary Shortages in Housing and Water Supplies

        From the first years in which Indian Protected Areas were established chronic problems with overcrowding and resource scarcity have created tangible difficulties for residents and authorities in such regions as have been allocated to be set aside. A veritable consequence of these obstacles to peaceable development has been one of the most tragic of the common issues facing populations. Protected areas have become inhabited by not millions but tens and hundreds of millions of people periodically, degrading both the population forced to take shelter in such wilderness as well as producing a domestication of the those lands, comprising the incidental benefits and direct objectives of the land. This is not an issue limited to India, but one which extends across Southeast Asia. Various solutions have been proposed and carried out, notably wide scale Protected Area Evictions (PAEs), and recent attempts have been made in an academic fashion to describe and quantify the scale of the degradation as a human rights and environmental catastrophe.

It will be helpful to use water shortages in order to examine PAEs as an extended function of the rights to water with many of the same trade-offs as well as potential solutions. Causes for rising water prices can range from government eviction programs in India to water privatization in Bolivia (Letnar Cernic, 317). Profit is not always a motive, and a non-governmental organization, FIAN, contaminated a river in Peru (316). In such cases the role of blame-bearer becomes of a greater focus, as many corporate or non-governmental interests wish to see governments take sole responsibility for the actions of corporations on their sovereign territory (332-3).

PAEs focus primarily on governmental involvement in the shortage of resources, in India that means land. Frequently, however, there are other acute necessities which are being met ranging from food in the rainforests to water in the desert. The involvement of corporations can occur in two ways, as a result of pollution which denies those around them water or when the price of water rises as a result of their activities, which also denies the inhabitants access to clean water. It can then be said that there are two ways that people have a right to enjoy access to water. These include entitlements and freedom (Cernik, 315). The UN has determined that freedom from micro-organisms and sufficient water for survival may be an entitlement, but in order to have freedom in access, humans must also have enough water to pursue irrigational, or other means of power consequent to the access.

It will be helpful then to return to the PAEs as an extended function of the rights to water with many of the same trade-offs as well as potential solutions. Causes for rising water prices can range from government eviction programs in India to water privatization in Bolivia (Cernic, 317). Unlike the example of the Indian PAEs, where national and international law match, the national laws on access to water in many areas has no resemblance to the freedoms and entitlements which are outlined and enforced by the UN. One solution successful amongst British corporations which can be played out on an international scale as well, is to play the dynamics of the balance of power by recognizing the external obligations of a business and ensuring that the obligations of the corporation to human rights are also met by the competing rivals of businesses responsible for the action (341).

        In particular there are unsuccessful solutions which have been examined as component to the issues within that proposed by proponents of PAEs. To understand the problem within Indian forest reserves, it is first necessary to look at the housing crisis as a function of modern human rights extant and protected in the Constitution of India in a way not completed in other countries until much more recently. This can be seen in urban areas such as Mumbai in which crowded masses produce a one billion dollar market for landowners at a massive cost to the individual rights internationally guaranteed which include “resources, capability, security, and power” each of which are explicitly stated as part of the full range of human rights from adequate housing to access to information by Amnesty International (Hohmann, 153). In India a Supreme Court Justice re-emphasized this basic human right as integral to the expansion of minimum living spaces from 225 feet per person to 400 (Hohmann, 162). Modern legislation in other countries, while less fundamental to an understanding of social and legal structures in those countries, also has created a basis by which inhabitants have a right to both rehabilitation and compensation in the event landlords in these slum areas are found to be guilty of property negligence.

        The fact that these questions are coming to the forefront of a critical effort by citizens is indicative of a scale in tragic outcomes which has not been faced in modern history that is encapsulated in the city of Mumbai. There is a natural clash between the well-heeled citizenry who hope to bring Mumbai towards becoming a world-class city and the nearly 75% who live in slums (Hohmann, 136). That is a fact which is demonstrated by firstly, the population density statistic of the 400 sq. kilometer city that holds 18 million people, of whom one third live in an area of slums approximately the size of Manhattan, or 20 sq. kilometers. Urban solutions which hold promise for use in National Forests are the rehabilitation and compensation of inhabitants rather than treating these inhabitants as illegal anyway. Another is the possibility is the enforcement of international legal standards which consider the forced relocation of the poor to be a prima facie violation of their rights of habitation (Hohmann, 172).

       

References:

Letnar Cernic, Jernej. "Corporate obligations under the human right to water." (2011).

Hohmann, Jessie M. "Visions of Social Transformation and the Invocation of Human Rights in Mumbai: The Struggle for the Right to Housing." Yale Human Rights and Development (2010).

Recognizing Growth Potential in the Aftermath of the Global Economic Recession

Paul Andreas Fischer

2/2/2017

Recognizing Growth Potential in the Aftermath of the Global Economic Recession

Glass-Steagall legislation was historically a prohibition of American investment in German Concentration camps and underestimated global antagonistic foreign threats; when viewed appropriately such an outcome was a certainty without this restriction in place. The prohibition on speculative loans using banking finances was also demonstrative of a long-standing disagreement between the billionaire families Rockefeller and Morgan, each of which had different views for the futures of their respectively massive fortunes built on industry in the former and upon military conquest in the latter and exorbitant returns on speculative investments. The Act worked brilliantly and allowed a basis of non-competition for domestic firms and industrial concerns for decades, though efforts to repeal it began as early as just two years after passage in 1932.

The United States is currently playing a dangerous game of recovering from a similar financial crisis while relying on foreign investments without this critical piece of legislation or an equivalency in place. Consequent to this has been stunted growth, exorbitant relative prices for large firms and relative impoverishment of the average worker. In order to evaluate the potential for growth by enforcing an optimal level of foreign investment through direct political means, a proof will be offered which demonstrates the hypothetical optimum investments in the recent past and the way those decisions can be replicated and watched play out for the long-term.

Foreign Direct Investment as a Result of Limitations on Banking Investment Capital

Each year an optimal level of foreign direct investment (FDI) can be seen as a function of the expected return on local investments and the return on foreign investments against the available stock. Financial securities play a role here as an economic function of the annual return on labor, or profit to the economic system from a domestic perspective. Contradiction is currently extant in the way that variance in the various forms of investment interacts with the cost of finances to produce a viable quantity of resources which are demanded.

There is no way to endorse the historical efforts which were made to open up American investment in foreign nations beginning with low levels of funding allocations to banking overwriting which were permitted as early as 1935. One fundamental problem with early attempts to repeal the effort which have been exacerbated in recent history, including the successful repeal of the Act, is constituted in the nature of the difference of the coefficient of inward investment to GDP and the outward investment to GDP.

Research conducted on nations up from the 1970s until the 1980s indicates that one dollar invested locally is equivalent in terms of GDP, funds lost to inefficiency that report to bank’s bottom line but which are lost to the general economy, is in fact worth 3.5 dollars abroad (Desai, 7). This means that under current market conditions, assuming normal statistical variations in investment, there are investment opportunities which should be directed outside of the domestic economy. An example of that is one of America’s major trading partners, China, which is among the ⅔ of the world which has not fully completed the transition towards democratic procedures. Current tax rates in China retain and reallocate ½ of income as taxes and in turn regional FDI, though this is low compared to many nations which claim higher rates of national income.

Repeal of Glass-Steagall as a Function of the Propagation of Democracy

American investments were not appropriately regulated during the 1930s, and the nature of the investmetns which were made played some role in the development of the Second World War. While the Rockefeller oil and industrial concerns did invest in Japan, the investments were targeted to prevent the boycott of specific regions which were beings starved out by the dictatorship (Moran, 262-4). Speculative investments which had been permitted by repeal efforts and compromise in the legislation in question allowed major investments to the dictatorship in Germany itself, which required direct negotiation with the leadership there. A leading financier for the Morgan family sat upon a German bank until 1940, shortly before the outbreak of war and well into the period of atrocities.

Incentivization to repeal Glass-Steagall and to condemn its fabricators is deterred by the reality of the economic situation with one of America’s primary trading partners at the time of passage, Germany, which was actively liquidating the investments through the Holocaust and had a government structure which could not support the reception of such funds. This means that, while these economic theories represent financial instruments which were not publically available at the time, had they existed it is likely that the coefficient for the bulk of such investments at the time was zero. Virtually none of the returns on American FDI in that scenario were being appropriately returned to the American economy, which demanded a complete prohibition of the leakage, something that was achieved for a short time period through passage of critical legislation, and restricted slightly with the American Banking Act of 1935.

For perspective, a similar situation has been reached in present day Bolivia, a nation whose capital is entangled with a large percentage of American foreign trade. The threat posed by the planned termination of American trade deals in 2022 for American firms downgrades the credibility of long-term claims which are made by the World Bank and other financial institutions which use the dollar as a standard of prosperity. The regional instability which has seen similar deals cancelled with Argentina as well as international nature of the cancelled deals with Germany and other NATO allies make this an act of warfare which is as terrifying for diplomats as for economists. Most importantly, it demonstrates a long-term consumption demand of financial capital which has historically and will currently not be sufficient to meet the basic demands of the population contained within the geographical boundaries of Bolivia as well as other nations.

Glass-Steagall and the Victory of the Cold War

Many trade deals are reciprocal in nature, so they require an influx of goods or services in return for goods or services. An exception is foreign aid, which is usually, though not always in the case of complementary goods such as military equipment that requires training, excluded from FDI estimates. Controlling this phenomenon through the Glass-Steagall Act, while not responsible for the fall of the former Soviet Union, was certainly a necessary component for the survival of the American economic system. Prior to the Doha and Monterrey Declarations, capacity building was not part of prioritizations efforts in foreign investments, so this change in global financial policy may significantly alter or change those decisions (OECD, 32).

It is only possible to view this as a matter of terms in contrast to the historical cliometric analysis of American investments at the time intrinsic to economic developments. The same is true of the current economic situation. The economic analyses revealed that the return to GDP from inward FDI during this period was indistinguishable from zero (Desai, 6). That means that FDI to the United States had been targeted in such a way that complementary products had to be bought in foreign trade at a loss or which would have no overall economic impact, ie reserve or surplus items.

Meanwhile, American investments abroad lost over two dollars in opportunity costs for investments which were made at home (Desai, 8). This does not yet prove that Glass-Steagall provided a necessary barrier to bad investments and saved America from falling to an economic crisis during the Cold War, because the barrier has already been demonstrated above to have saturated the domestic financial market with adequate funding as to prohibit effective addition to GDP. The question which emerges is whether thirty to forty cents on the dollar is still good trade, when the alternative of domestic investment will siphon funds away from other investment efforts.

Further research proved that savings encouraged an increase of spending of 26 cents for each additional dollar of domestic savings. This means that with Glass-Steagall, the proportion of FDI was bordering as inefficient already. Had Glass-Steagall been repealed during the period of research, then it can be safely estimated that the national reserves of cash liquidity would have been under threat as the shock of additional fund for foreign investment created an inefficient market. It is not a question of whether, but how, a critical limit of minimal reserves would be reached, prohibiting local and foreign investment and representing the financial insolvency of America.

Current Economic Forecast and the Return of the Glass-Steagall Era

There is no way for private industries to fail to take up the responsibility to save the United States, something which has occurred in the past. It can be implied that the lack of such a patriotic effort during the 1930s demonstrated foreign subversion in the economic system outside of that authorized by international treaties and obligations. There are a number of potential crisis regions which require both immediate and long-term attention for reasons which go beyond the financial, such as humanitarian or military, which have been addressed.

Impermeability of financial institutions to such an economic meltdown and foreign subversion is a state which is not attainable. In the short-run re-interpretation of fundamental American legislation will be necessitated in order to achieve and maintain a state of adequate financial security. This cannot be the long-term solution to a fundamental flaw in negotiating with despotic or even only partially democratic allies and trading partners, or former trading partners.

By adding a fail-safe which catches speculative investment, whether foreign or domestic, before it begins to lose compared to savings investments, the American economy can return to the natural rate of growth for the leading industrial nation in the world. Had the rates of growth observed during the time period in which loans inspired by the Glass-Steagall Act were in place, the decade after 1932, the standard of living in the USA experienced today would have been experienced by the early 1960s, the average American worker would be earning one million dollars a year by 1990, and today upwards of 4 million dollars annually. More importantly, the top 1% would not be able to collectively buy dictatorships and despotic governments to open them to democracy and trade, but individually buy them, opening the world to such a democratic expansion in social justice, welfare, and economic well-being as has not been rivaled in the history of humankind. It has been demonstrated that the returns during that period were not fabricated, but only the consequence of sound financial theory applied prudentially to national investment trends through noninvasive and logical expansion of the rewards and consequences of modern financial instruments

References:

Desai, Mihir C., C. Fritz Foley, and James R. Hines Jr. Foreign direct investment and the domestic capital stock. No. w11075. National Bureau of Economic Research, 2005.

Graham, Edward M., and Paul R. Krugman. "Foreign direct investment in the United States." Washington, DC (1995).

Organization for Economic Co-operation and Development. Foreign direct investment for development: maximising benefits, minimising costs. Paris: OECD, 2002.

Lake Vermont to Lake Champlain: A Truncated History

Paul Fischer

2/1/2017

Professor Alicia Daniels

Lake Vermont to Lake Champlain: A Truncated History

Lake Champlain is surrounded by the Lake Champlain Basin. This extends into Canada and New York as well as Vermont. While it today contributes to a vibrant ecology and superior forest cover in the region, it’s origins are a bit more frosty in nature. A massive glacier filled the modern Champlain Valley and for a short time pools surrounding it are now known as Lake Vermont, a temporally constrictive point (Wright, 5). The Laurentide Ice Sheet carved the depression in topology which lends the region a gradually changing elevation. This occurred nearly 23,000 years ago (2). The modern waterways and lake formed closer to 14,000 or 15,000 years ago (6).

The opposite event to global warming occurred, which is a fascinating geological phenomenon known as isostatic depression (8). In this process, rather than the seas rising, they were in fact much lower than we are experiencing currently, the land actually drops. Consequently, the modern Champlain Valley was actually the Champlain Sea! The history of the Sea is almost half as long, though undoubtedly much more biologically exciting, than that of lake Vermont, or about two thousand years.

Reference:

Wright, Stephen F. "Glacial Geology of the Burlington and Colchester 7.5’Quadrangles, Northern Vermont." University of Vermont, Department of Geology. Burlington, Vermont 5405 (2003).