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Afterword to the softbound edition.
The Octopus and the Orangutan
The Future In Plain Sight
The Parrot's Lament
Affluence and Discontent
The Alms Race
Apes, Men, & Language
IS OUR BRAND OF CAPITALISM MAKING US STUPID
Tuesday August 30, 2011
How can a society that contains so much individual brilliance act so collectively dumb? Does it matter that we know that there is a cliff ahead if we still go racing off the edge? The Wikileaks publication of State Department emails demonstrated that there is tremendous expertise at the ground level in foreign policy. That didn’t stop us from charging into what has been called the “most feckless” war in American history. The key to our success as a species has been the development of communication and cognitive skills that enable us to leverage our collective intelligence so that a group is vastly smarter than an individual. In recent years, that seems to have gone into reverse. While individual brilliance abounds, collective stupidity prevails.
Consider a few recent examples:
The Ongoing Financial Crisis:
The most devastating financial crisis since the Great Depression followed the dismantling of reforms put in place during and after the 1930s to prevent institutions from bringing about the very financial collapse we just experienced. While there were many tributaries to the meltdown, a common element was a system of incentives that was optimized to reward those who made the biggest bets. Penalties for failure were gradually stripped away, and the costs dumped on taxpayers. Does anyone think that the Dodd-Frank package of financial regulation package signed into law by President Obama has eliminated these incentives, or that if it turns out that new regulations actually impede financial institution profits that they will stay in place?
Given that the crisis wiped out $13 trillion in national wealth and has brought much of the middle class to the brink of insolvency, one would think that voters, who vastly outnumber the rich, would insist on enacting a robust regulatory framework. One would be wrong.
And now, carrying forward its proud tradition of doing the wrong thing at precisely the wrong time, Congress just forced through, and the President signed into law, a series of spending cuts in return for allowing the US government to pay bills it had already incurred. This will shrink government spending even as the economy slows, removing any doubt that we will slip back into recession and unemployment will worsen. Congress and the president have thus exactly repeated the mistake of FDR, who agreed to cuts in 1937 that plunged the US back into the Great Depression.
The Deepwater Horizon oil spill:
The Gulf of Mexico oil spill of 2010, the most catastrophic environmental event in American history, directly followed from the neutering of regulations, safety mechanisms, and procedures put in place after earlier spills such as the Ixtoc Spill of 1979, and the Exxon Valdez spill in Alaska in 1989. Does anyone seriously believe that new regulations that arise from this disaster won’t also be neutered? We need oil, and the easy-to-find oil is gone so we need to drill in the most inaccessible, politically hostile, and/or environmentally vulnerable places on the planet.
Now here’s a problem perfectly designed for a species with an abilitiy to anticipate and avoid disaster! The science of the greenhouse effect that underlies concerns that emissions of C02 are changing climate is uncontroversial. There is overwhelming agreement among climate scientists that human-sourced emissions, largely traced to the use of fossil fuels, are already warming the planet; climate historians have vividly documented how civilizations are vulnerable to climate change, and since the 1980s, policy-makers have been discussing ways to reduce emissions.
So what has the U.S. done to avert the threat? Nothing! Despite 30 years of verbiage and negotiations, the recession has done more to limit U.S. emissions than anything we have done legislatively. The pattern for species ranging from fruit flies to elephants, and, yes, humans, has been for numbers to explode when the climate is favorable and plummet when it turns hostile. Our numbers have exploded in the climatically benign years since the end of the last Ice Age. Will it be different this time if climate turns hostile?
A Global Pandemic of Willful Blindness
America has no monopoly on collective dumbness – after all Japan, perhaps the most rational nation on the planet, saw fit to site nuclear power plants in areas vulnerable to both earthquakes and tsunamis, and Europe continues to pile blunder upon blunder as it tries and fails to contain its own financial crisis. Time and again the best and brightest have alerted society to looming problems, but a persistent pattern has been to ignore the warnings, ridicule the experts, and suffer the consequences.
The pathetic refrain of recent years -- “nobody saw this coming” –is always a self-serving lie. Something is making us stupid. My candidate is the way we practice capitalism, specifically the skewed incentives that promote hyper-focus on short-term gains, while leaving us effectively blind to long-term threats.
In each case cited above, actions to head off a threat were perceived to impinge on present profits, and, in modern market economies, we consistently make the decision that we’d rather head off a cliff in the future than limit the gains of those with access to the levers of power. In all these cases, economic interests ultimately control the lawmakers. We’ve created a system that leaves us constantly surprised by the obvious.
I’m certainly not arguing for central planning – the failed communist states constitute a monument to collective stupidity. But there is a middle ground. Consider Canada, the friendly giant to the north, which seems to be able to regulate without suffocating innovation. Can this be fixed in the U.S.? Sure! Will it be fixed? Probably not, at least, not without shock therapy far worse than what we have recently endured, and that’s exactly what we are rocketing towards right now.
An oped involves extreme compression, and so I thought I’d expand on why I think the initial IPCC reports so underestimated the threat. Make no mistake, the consensus in the summaries for policy makers in the first two assessments did underestimate the threat. The consensus was that permafrost would be stable for the next 100 years and also that the ice sheets would remain stable (there was even a strong sentiment at that time that the East Antarctic sheet would gain mass). Moreover, in 1990, the concept of rapid climate change was at the periphery of mainstream scientific opinion. All these things turned out to be wrong
Of course, there were scientists at that time who raised alarms about the possibility of rapid climate change, collapse of the ice sheets, and nightmare scenarios of melting permafrost, but, fairly or not, the IPCC summary for policy makers was and is taken to represent the consensus of scientific thinking.
In my opinion such documents will always take a more conservative (less dramatic) position than what scientists feel is justified. For one thing the IPCC included policy makers, most of whom were more incentivized to downplay the threats. For another, many of the national governments that were the customers for these assessments barely tolerated the exercise and gave strong signals that they didn’t want to see anything that called for dramatic action, and this being the UN, there was a strong push to present a document that as many governments as possible would accept.
And then there is the nature of science and the state of climate science at that point. There is an inherent structural lag built in to the nature of science. For instance, the 1980’s were marked by the rapid development of proxies to see past climate changes with ever more precision. By the mid-late 80’s the proxies and siting had been refined sufficiently that the GISP and GRIP projects could confidently get ice cores from Greenland that they felt represented a true climate record and by then they also had the proxies with the resolution to see the rapid changes that had taken place in the past. Given the nature of data collection, interpretation, peer-review and publishing, it wasn’t until 1993 that these results were published.
It took nearly another decade for this new, alarming, paradigm about how rapidly global climate can change to percolate through the scientific community, and, even today, much of the public is unaware that climate can change on a dime.
As for the ice sheets, when I was on the West Antarctic Ice Sheet in 1996, there was talk about the acceleratio of ice streams feeding the Thwaites and Pine Island glaciers, but the notion that there might be a significant increase in runoff from the ice sheet over the next hundred years was still very much a fringe idea.
With permafrost, the problem was a sparsity of data in the 80s and early 90s and it is understandable that scientists didn’t want to venture beyond the data.
The problem for society as a whole was that the muted consensus on the scale of the threat diminished any sense of urgency about dealing with the problem. Perhaps the best example of this was the early work of William Nordhaus. Working from the IPCC best estimates in the early 1990s Nordhaus published one paper in which he predicted the hit to the US GDP from climate change in 2100 would be about ½ of 1%. Nobody is going to jump out of their chair and demand action if the hit to the economy was going to be 0.5% of GPD a hundred years laterLibertarians such as William Niskanen seized on this and testified before Congress that there was plenty of time to deal with global warming if it was a threat at all.
And then there was the disinformation campaign of industry, particularly fossil fuel lobbyists, as well as pressure from unions (the UAW in particular) and the financial community. These highly motivated, deep-pocketed interests seized on scientific caution to suggest deep divisions among scientists and that the threat was overplayed. Little wonder then that the public failed to appreciate that this was a looming crisis that demanded immediate, concerted action.