Copenhagen Interpretation

Technically, the fact that we spend more on advertising than climate mitigation in no way implies that actually IMPLEMENTING kyoto would be cheaper than advertising. Essentially all we’ve done is TALK about climate mitigation, and that’s darned cheap.

And why would we even consider implementing a treaty the Senate rejected 95-0?

Anyway, I’d have thought that the real obstacle to reducing advertising wasn’t the market economy, but this little thing called freedom of the press. I know the courts have (illegitimately) given advertising 2nd class status, but that’s a long ways from no status at all.

“Why would we even consider implementing a treaty the Senate rejected 95-0?”

You might, err, decide that the Senate was wrong? It’s been a few years since I studied the Constitution in any depth, but I don’t think Senators have ex cathedra infallibility.

On the costs and benefits of Kyoto and surrounding issues, Brad DeLong made “a great post”:http://www.j-bradford-delong.net/movable_type/archives/000778.html just under two years ago. There’s no use wittering on about costs and benefits without considering who bears the costs and who gets the benefits. The core point:

bq. … those who will suffer from global warming are largely in the global south. If global warming does (say) increase the magnitude of major typhoons and does raise the sea level a bit, by the latter part of this century more than 100 million people in the Ganges delta will be at risk of drowning if a high tide accompanies the storm surge of a major typhoon in the Bay of Bengal. The managers and shareholders of companies like Halliburton that will gain from inaction on global warming are a different and distinct group from the tropical peasants who stand to lose their health and their lives. Any claim that “instead of Kyoto we should be doing X” has to be accompanied by a plan to actually do X. Otherwise, the claim that inaction on global warming enhances world welfare is likely to be very false indeed, as it is hard to believe that on the scale of human happiness higher incomes in the global north will outweigh nastier, more brutish, and shorter lives in the global south. It is one thing to say that the resources the Kyoto Protocol wants to use to fight global warming could be used to provide first-class public health and economic infrastructure to the global south. It is another to say that these resources, instead, will be used to get every American household a second DVD player and every tenth American household a power boat.

rea wrote: Less money spent on advertising means fewer consumer goods sold.

Really? Do you have any evidence to back that up? I strongly suspect that most advertising simply works to redirect consumer spending from one item to another, and not to increase the total level of consumer spending — which is mostly determined by income and propensity to save.

And even if a reduction in advertising did cause consumers to save more and spend less, would this necessarily be bad for the economy, considering both the low savings rate in the US, and the not easily quantifiable but definitely real gains in quality of life from a reduced level of advertising.

Alex, your argument is flawed, look at the last 3 years of the US economy. The economy tanked, people got worried, started spending less. Corporations lost profits, got worried, started cutting jobs, people got more worried, started spending even less. Its an economic death spiral. Yes some of this can be explained by the events of 9/11/01. But economies go into recession occasionally and sometimes without cause, this was a little worse than some, but not as bad as say Black Tuesday.

Not that it in any way relates to the purpose of the post, but I take issue with your first claim. It is not clear to me that mitigating species extinction is not more justifiable than improvements in health. Qualifiers about how large-scale these extinctions will be or how major improvements in health will be make all the difference, but ethically speaking, I’d likely disagree.

While we’re being hypothetical how about a consensus to stop the developed world’s expolitation of the developing world’s natural resources? Fair exchange might mitigate conditions that cause both health problems and species extinction.

Egads!

Why the focus on advertising? For me it confuses the issue and reduces the effectiveness of the post.

I immediately start thinking about and weighing the benefits of advertising vs x.

Those benefits don’t seem so trivial. So easily and airly dismissed.

alex r posts –

‘? Do you have any evidence to back that up? I strongly suspect that most advertising simply works to redirect consumer spending from one item to another,’

Or put another way advertising helps make our marketplace is efficient.

And the cost of an inefficient marketplace is?

I start thinking thoughts like is the cost of all new advertising for old products that conveys no ‘meaningful’ new information 1% of GDP or is the cost of all advertising 1% of GDP.

Anyone shopped for a house lately? Did advertising help you get the information you needed for a low mortgage? Did it help anyone?

I liked the post because I enjoy thinking such thoughts.

But I don’t think that was the intention of the post.

That we spend too much on advertising is something that stands out, when juxtaposed to how much we — Americans — devote to, say, foreign aid.
But what isn’t said about advertising is that, the less we spend, the less media there is. The last four years have been a huge advertising depression. And notice — where is Feed now? Lingua Franca? Where is Red Herring? I could name a dozen magazines. And if you look at the newspapers, you will see a lot more sheer filler, which is there in a desperate attempt to connect some jerky film with an audience, and much less of the good cultural roughage that used to be standard in newspapers. Look at the book sections of any major metro.
Advertising might be bad, but one should really consider where we are going to have our elevated discussions about climate change without advertising. I’d suggest that it would be in more and more rarified venues, among more and more ‘experts’ — in other words, it will be another triumph for the oligarchy of experts.

Advertising has nothing to do with it. It’s the military spending that needs to be discussed in this context, IMO: one government activity vs. another.

A second problem with this post is that it implicitly assumes that aid is beneficial. In fact as many, such Bill Easterly, have argued, there is no conclusive evidence that aggregate aid actually improves the incomes of the poorer countries. And there is evidence that some types of aid may actually lower GDP in developing countries.

So the only thing that we can say for certain is that aid may be beneficial to the emotional wellbeing of rich countries, but its effects on the poorer countries are a questionable. So the last thing we need to be doing is be “making more noise, more of the time, about the need to increase development aid”. The first thing we need to do is evaluate objectively what works and what doesn’t work in terms of aid, trade and development and then we can start thinking about allocating aid, liberalizing trade etc. This is what the Copenhagen consensus attempted to do

Surely a more appropriate response to the theft issue is to call for more effective oversight and greater transparency, rather than to question the value of development aid?

Well, yes and no. Your post mentions public-health successes; I’m glad to hear of them. But that’s a little different from “development” aid, which I at least would have catagorized more as infrastructure boondoggles, money for “modernization,” etc. It would take a lot to convince me that, for instance, the aid provided to the Palistinian Authority was doing any real good.

Also, theft isn’t the only issue; the introduction of lots of foreign money and goods distorts the local economy in ways that can prevent long-term self-sufficiency.

But, taking your reflective suggestion seriously, I should ask John: Surely a more appropriate response [to one particular prioritization of issues] would be to make your own examination of the issues and identify successful programs to be expanded (and failures to be disbanded), rather than reflexivly calling for more, more, more spending?

While I’ll agree with m. gordon that advertising does raise the overall level of consumer demand, I nonetheless get the impression that most advertiser dollars are spent in an “arms race” — the selling companies feel that they have to buy ads because their competitors do — and if it were possible (and legal) to negotiate decreased ad spending with their competitors, they would be happy to do so.

As for the effects of a decline in consumption spending (an increase in savings rate), well that depends on whether or not there is enough capital to finance enough production to meet consumer demand. If not, a decline in consumption/increase in savings might very well *improve* the economy by financing more (and more efficient) production, increasing supply, and lowering prices so that more goods can be consumed with fewer dollars. I can’t say whether or not this holds true in, say, the U.S., but seems quite possible in principle, especially considering that the “personal savings rate” is near historic lows.

Giles has a good point. Here’s my take on it: In many instances our use of the term “development aid” is really just a euphemism for “charity”. This is not a condemnation of the act by any means. It is to recognize, however, that most aid is directed to alleviating human suffering but not in any way to “develop” a people, i.e. close the gap between their standard of living and that of the Global North. We call it “development aid” to mystify it, to tell them and ourselves that through this money and technology and skill we are going to fundamentally transform their society and our world into one more bountiful, more equal, more peaceful, more free.

If we call it “charity,” however, we admit that there is no intention of changing their society or our world, only that we aim to alleviate their suffering here and now. That is a good thing in and of itself — but it is far from “development”. Very far, indeed.

On the issue of Charity it is also worth asking – who always benefits from development Aid? If the World Bank or DFID or or US ASID or AusAid had their budgets slashed by half who’s jobs prospects would suffer most? Economists?

To the extent that the Iraq war is justified in humanitarian terms, it can fairly be compared to alternative humanitarian expenditures such as the Commission on Macroeconomics and Health Proposals. Obviously, it fails.

Short term, of course. War is more expensive than just about anything else (which is why fabled “wars over fresh water” will never happen–building desalination plans is ever so much cheaper than even a day or two of war).

But long term? Jury’s out. A stable market economy and moderately liberal government–not that we have either yet–in the Arab Middle East could yeild pretty enormous dividends in terms of alleviating human suffering. Which, if the left is right about poverty and terrorism, would also reduce suffering in rich Western countries.

And for a smart guy with a 100-year worry about global warming, you seem oddly dedicated to a remarkably short-term evaluation of Iraq. If I were using the same standards you apply to Iraq to judge the climate change debate, I’d be bitching that it’s colder in Washington DC today than last August, so who’s worried about warming?

Returning to the point, on the example of Arafat’s PA (and the Oil-for-Fraud scandal), I don’t think there’s any sort of large-scale “development aid” that could have done meaningful good in Iraq.

In fact, developmental aid is actively harmful. It empowers the parasitic state apparatus of the country getting the aid at the expense of the wealth producing private sector.