Thursday, November 26, 2009

Gender differences

There is an interesting gender difference in street hawking here (Juliet pointed this out). You see men street selling random objects they seem to have happened upon, aimlessly wandering amidst gridlocked cars with a a set of power strips and tape measures in one hand, and a lint brush and foam block in other other (an actual example...another today: "tummy trimmer" exercise machine, laptop screen cleaner, and barber kit). In contrast, women tend to be focused on the key junctions and bus stations, where they operate small businesses selling goods like "pure water" bags, fried plantains, or baked goods...things you might actually want to impulse buy.

I don't have a clear explanation for why women don't sell random crap, but maybe it has something to do with social expectations / lack of prestige associated with running a street business. Maybe by hawking random stuff men can pretend it's not their job, it's just something they happen to be doing.

That explanation seems like too much a projection of western values / reasons for job choice, but I don't have a better idea.

Friday, November 13, 2009

Sodom & Gomorrah

Life got a bit busy recently, but unfortunately writing about writing applications is neither enjoyable for me nor entertaining for any readers, so I’m not going to do much more about that. Commentary on life and work in Ghana will take more thought that I want to bother with at the moment. Instead, a post mostly written a few weeks ago about visiting Accra’s most notorious slum, “Sodom and Gomorrah." The second part will come later.

Going to Benin for the weekend tomorrow.


Sodom and Gomorrah

After a shower and good night’s sleep, I set off for an exploration of Sodom and Gomorrah, Accra’s most notorious slum. I have the vague ambition of publishing an article about the slum, but, mainly, I wanted to see the place. The government had recently announced plans to clear the 50,000+ area, destroying the buildings and evicting the residents without paying any compensation or providing alternative housing. Ostensibly, the reason is the slum (which sprung up after an ethnic clash in a yam market in 1980) was supposed to be temporary, and that the residents keep dumping their waste into the nearby lagoon, preventing the completion of a restoration project. Of course, the government (or, rather, individuals in the government) would also benefit handsomely from selling the land on which the slum is built.

It turned out to be the most moving experience I’ve had here. I met up with Isaac, a technoserve driver whom I had asked to accompany me as a translator, and we shared a taxi to the slum. At first I didn’t know what to make of it, or how to start. We simply explored the area, which was a warren of wooden structures, small square boxes made of weathered 2x4-type planks and corrugated metal roofs. Here and there a concrete structure stood out, typically a mosque. Drab and washed out brown/grey in places; elsewhere a riot of colors (clothesline bending heavily under the weight of orange and green skirts, the geometric patterns fluttering against the bright blue shack).

Although I imagine that it would be wretched in the rainy season, right now it was dense-but-livable. Almost all of the narrow streets were clear of feces and rancid odors; businesses seemed lively. Street food stewed in giant vats, a hot mélange; bars played live premiership matches; barbershop window displays featured crudely-drawn smiling black models; and everywhere market stalls. In general the place hummed with activity.

Eventually I walked up to a shopkeeper and started the interview. It proved to be a bit of a struggle, because the issues that I wanted to ask about were either sensitive (how is crime and justice handled in the area, etc.) or rather abstract (property rights and land ownership). Getting poorly educated (or, more accurately, uneducated) people to speak about abstract things, or even to make generalizations, proved to be surprisingly difficult. They issue went beyond language barrier; it was at least partially a conceptual barrier to translation.

At one point he mentioned that most justice issues are handled by local chiefs, who were determined based on “who was there first.” I asked if I could meet one of the chiefs and he said yes, but very surprised. So he quickly ushered me toward through a series of twisting passageways, eventually coming up to a bit of a clearing with a relatively large, open-air tented shade structure. On the concrete floor a dozen young, heavily-muscled men sat around in various plastic chairs and a long wooden bench while a tall heavy-set figure, garbed in white linens and looking like a louche imam, held court.

The slouching disorganized crowd stiffened as I walked in, a mixture of curiosity and baleful stares. Before this ripped-shirt, muscular crowd my interpreter almost looked more out of place than I did, with his glasses, knockoff casual polo shirt and effete university demeanor. The shopkeeper launched into a quick description of what I was there to do, and my interpreter tried to follow-up with a bit more explanation, but he was immediately cut off by one of the young men.

“Yes, go ahead, ask your questions.” So I awkwardly took an empty place on the long bench, with the ringleader (who had yet to say a word) on my right and the crowd on my left. As I commenced, I looked back and forth between the two sides, unsure of where to direct my gaze. My questions were relayed by the self-appointed translator – tall, very dark and lean – to the leader, who then replied in a mixture of English and Twi, which required re-translation.

Again, I struggled with the abstract / sensitive question topics, but things went a bit more smoothly this time. As we continued, I realize that the crowd was swelling around us, and halfway through the interview I was surrounded by a dense crowd of forty or so people.

The crowd was remarkably young, all 16-25. Yahaya Mahamman, the leader, had chosen an apt title for himself: Chief of the “Zaachi” (youth). With great bravado, Yahaya explained the situation to me: “They have cut off water and electricity; when they come here we will resist and that will bring big troubles.”

And so the interview progressed in fits and starts, first I’d get a set of curt, unsatisfactory one-sentence answers and then, as Yahava grasped what I was asking about, I’d get a long bombastic tirade that gradually veered off-topic, and then I’d ask another series of questions and the cycle would repeat.

On common refrain, heard here and elsewhere, the bitter complaint that, “the Liberians [refugees] have been provided better facilities than we have. The government provides them with running water, food, security; we are Ghanaians and we get nothing.”

His answer on the topic of slum justice was disappointingly political; I asked him what he’d do if someone came to him with a case of robbery, or if it happened to him, and he said: “Oh, that would never happen here” with a half-smile. Pushed, he said that he “organize a group of opinion leaders to assess the situation” and made it clear that that was it.

Eventually I had enough material, and Isaac and I left (now pushing through a crowd) to look for the private clinic operating in Sodom and Gomorrah. We found it, long concrete blocks with corrugated metal roof, like an overgrown slum shack, but unfortunately it was closed for Sunday. Outside the clinic I met Ahlidzah Samuel, a well-fed, rounded man with a generous smile and bald, egg-shaped head.

...

Sunday, November 8, 2009

Investment

So, I've decided to invest a portion of my meager savings / worldy possessions. There's really no excuse to be keeping my money in cash, especially with inflation potentially on the horizon. So the question is where.

Intellectually, I know index funds are the best bet, and that confirmation bias in an over-determined world means that you can construct logic for many plausible but incorrect investments. But I spend too much time reading about economic trends (for no particular reason, just find it interesting) to not want to put that to use. And by avoiding the especially dumb investment approaches (buy-sell rapidly, follow hot money, etc.) hopefully I can not lose money. So all of these are "buy and hold" plans.

None of this is particularly new / remarkably insightful, and any comments would be appreciated...

Economic hypothesis:
1. USD faces a long term decline roughly in line with the decline of the US's relative importance in the world. There is also a decent chance that the US will not get a handle on its serious structural deficits (the healthcare bill doesn't help here).

Therefore reserve bank holdings will diversify away from the dollar, etc. etc. However, this will take a long time, and certainly does not preclude the dollar from strengthening in the short/medium term. The US still has deeper capital markets than anyone else; the mooted alternatives to USD do not have a history of unified democratic rule of law; it's not in anyone's interest to have a rapid dollar depreciation.

2. In the near future, US is better placed than EU coming out of the recession. Rationale: Virtues of the anglo-saxon system (fire fast, hire fast); more favorable demographics (stronger population growth / younger worker base); greater transparency on bank losses (european banks have made proportionally much lower markdowns on subprime losses); more liberal reserve bank policies (risks inflation, but should goose growth)

3. Inflation is a real risk in the US (if economy picks up) and the fed will have a hard time putting the brakes on unless we have an unusually strong V-shaped recovery. We'd need to put interest rates up in the midst of an uneven recovery and high unemployment...the Krugman's of the world would be screaming bloody murder and 1933 all over again.
--This contributes to the risk of dollar decline, and doesn't lead to a specific investment, but is one of the reasons I am investing in assets rather than leaving my money in cash.

4. World demand for commodities will continue to grow as the RotW develops, although prices may not go up. The commodity bulls tend to have a stupidly static view of the world, whereby extrapolating present demand shows that it will exceed current supply trends, therefore prices must rise. This misses two key points: For almost all commodities (oil being somewhat an exception), increased prices reduce demand; likewise, they increase supply. And for most products there is plenty of room for increased supply -- this is especially true of agricultural products, where increased production in Russia (where farm land is something like 25% of what it was in the Soviet peak) and Africa (where yields languish at 1/4 or less of first-world norms) can easily meet future demand.

5. Private sector in emerging markets is key source of growth in future; there is an explosion of middle-class demand happening everywhere from China to Ghana to Brazil. In the US and Europe diminishing returns to wealth have set in; we don't buy much more as we increase our GDP per capita, but that's not true in the developing world.

Therefore, I plan to:
1. Invest in US companies with strong potential for sales to the middle/upper classes of developing countries. The US is very good at branding / selling to the bourgeois. E.g., Starbucks, Disney, Coca-Cola, McDonalds.

I'm not investing directly in emerging markets because a) stock market prices have been increasing scarily quickly in the developing world (although it's exaggerated by the dollar's slide); b) any given country could tank due to political instability; c) weak US dollar makes foreign buys expensive at the moment (while part of this will be recaptured over time by the dollar's continued gradual decline, I can get the same benefit by buying US companies with good sales abroad.

2. Short-sell the Euro. It has over-strengthened because of the US's loose monetary policy and because Asian countries are holding the currencies up, forcing any slide to occur against the EUR. This bet could go sour if the US is engulfed in the maelstrom of inflation, but, assuming that that doesn't happen, the USD should recover against the EUR somewhat as the US comes out of recession faster (enabling it to raise interest rates while the EUR stays put or decreases rates) and over time Asian countries let their currency appreciate against the dollar to combat domestic asset price bubbles.

3. Bet on increased volume demand for commodities by investing a) in transport (shipping companies look relatively cheap; I'm sure there are many other options); b) in commodity sellers like Alcoa.

4. Potentially bet on cocao prices. Sales are concentrated in Ghana, Cote d'Ivoire and Indonesia. Ghana's currency will strengthen over the next few years as they start pumping oil. It's neighbor is a basketcase, and Indonesia is a potential basketcase (sorry Matt). Demand will grow over time (see emerging markets middle class point). Supply also takes a long time to respond to increased demand because trees take several years to start bearing significant numbers of beans (5-6 at min), and most of the trees in Ghana are already at the tail end of their useful lifespans but farmers are reluctant to replant while they are still getting some yields. My main concerns: Have the high current prices (not at 07/08 peak, but not far below that) already priced in these risks? And this goes against my long-run view that commodity prices won't appreciate dramatically.


As a side note, and this doesn't feed into any of my investments, I suspect that when I'm older we'll have to learn how to live in a deflationary world. Demographics have turned around much faster than expected and world population will start falling ~2050. Therefore the only source of incremental demand will be more extravagant consumption (eating meat vs. grains, etc.) rather than simply having more people to buy things. In other words, the world will look a lot more like Japan and commodity prices will fall dramatically.

Saturday, November 7, 2009

Is restricted suffrage such a bad idea?

Thailand, Venezuala, Russia...All countries that would probably be better off if only people who owned property, say, or had a higher education degree could vote.

Obviously I'm cherry-picking examples to bolster a controversial point, but it's not clear to me that we should just assume that universal sufferage is the right approach for any new democracy.

Beyond the obvious benefit of having more educated/intelligent voters make better decisions -- the link between education and sound social-economic policies may be tenuous* but probably applies in the extreme cases, e.g. illiterate farmers' votes -- limited democracy can reduce the risk of ethnic tensions/splintering society. When amassing mass support is necessary, demagogues have a strong incentive to carve out ethnically-based voting blocks. This doesn't disappear in limited democracy, but seems like it would be more limited. In most cases, limited democracy would also be less of an exogenous shock on the traditional social systems, which (making a wild generalization here) tend to have a leaders checked by a limited network of other powerful figures in society (e.g., king/nobles, multiparty clans, etc.) rather than directly from the base of society. And, as long as suffrage were wide enough to avoid oligarchic rule or apartheid-like rule (a real risk if all of your educated landowners are a different ethnicity, as in some South American states), limited democracy should provide a more powerful check on corruption -- it's harder to bribe wealthier / more world-aware citizens.

That said, if the local populace were clamoring for voting rights, denying them would cause significant civil tension. But is the average Afghan goat-herder desperate to vote? I doubt it. Here in Ghana, the typical cocoa farmer answer has been "not very" when asked how important living in a democratic multiparty state is to him. Poor people have different priorities than Western constitution-drafting state department / international development bourgeoisie.

This raises the question of where/when should suffrage be restricted. No one-size-fits-all rule could work (after all, with a blanket rule we'd probably have missed out on the great Indian democratic success). But even if making judgments a-priori is difficult, it seems plausible that, in poor states without a history of democratic systems, we should explore more limited forms of democracy rather than blindly applying our messianic template.

*This argument assumes that there are certain policies that are "sound" (e.g., laws that limit human rights abuse, avoiding sliding into dictatorship, and adhere to some broad outlines of free market capitalism) and some that are not.

Thursday, November 5, 2009

Amazing

"Kelly [a dolphin] has taken this task one step further. When people drop paper into the water she hides it under a rock at the bottom of the pool. The next time a trainer passes, she goes down to the rock and tears off a piece of paper to give to the trainer. After a fish reward, she goes back down, tears off another piece of paper, gets another fish, and so on. This behaviour is interesting because it shows that Kelly has a sense of the future and delays gratification. She has realised that a big piece of paper gets the same reward as a small piece and so delivers only small pieces to keep the extra food coming. She has, in effect, trained the humans.

Her cunning has not stopped there. One day, when a gull flew into her pool, she grabbed it, waited for the trainers and then gave it to them. It was a large bird and so the trainers gave her lots of fish. This seemed to give Kelly a new idea. The next time she was fed, instead of eating the last fish, she took it to the bottom of the pool and hid it under the rock where she had been hiding the paper. When no trainers were present, she brought the fish to the surface and used it to lure the gulls, which she would catch to get even more fish. After mastering this lucrative strategy, she taught her calf, who taught other calves, and so gull-baiting has become a hot game among the dolphins."

Damn. I'm usually skeptical about kind of anthropomorphizing, but how cool.

Tuesday, November 3, 2009

Behold, I show you the last European

So, Klaus just signed the Lisbon treaty, and the EU juggernaut rolls on. European press commentary is interesting. Why isn’t there more outrage about how undemocratic the process has been? Major nation states have just given away huge swaths of sovereignty to an institution with effectively no democratic accountability, and have done so against the will of their people. Only three nations were brave enough to vote on it, and two of those voted no until they were told that that’s the wrong answer and they have to vote again. Why is it that the new federalist right wing party gets lambasted for having somewhat unsavory characters, while the centralist parties that have far more loony characters get a free pass?

I was recently asked why I am oppose the Lisbon Treaty, and I have a set of rational reasons (detailed below), but ultimately I think that it is also a visceral distaste for what the EU represents. At the core of the EU project is an insipid void; it is the heartless, passionless end-game of bureaucratic, Weberian rationalization.

The EU represents an element of Europe, and European-ness that I deeply dislike. It’s the desire to swaddle life in rules and restrictions, the Precautionary Principle, as if by measuring and adhering to the right rules and procedures we eliminate any chance of error (and as if that that’s the most important thing). This is what produces such loose and baggy monsters like the Lisbon Treaty (384 pages "reader friendly" version vs. the Constitution's elegant 4 pages) and self-parodies like the ICC court. Without God they’ve turned to constitutional proceduralism as the source of meaning. How horrible. And, of course, this is combined with a haughty, tone of moral superiority that disdains the (for lack of a better word) American approach.

This is reflected in everything from Europe's self-righteous yet passive and gutless foreign policy – proclaiming the importance of human rights and UN rules but not even taking a serious stand against genocide in their own backyard – to enforced equality and mediocrity (cf: tax codes; education system). The risk-averse regulatory policy is a reflection of a spiritual malaise; Burning Man (for all its flaws) could never take place in Europe.

In Nietzsche's words:
“The earth has become small, and on it hops the last man, who makes everything small. His race is as ineradicable as the flea; the last man lives longest.
'We have invented happiness,'say the last men, and they blink. They have left the regions where it was hard to live, for one needs warmth. One still loves one's neighbor and rubs against him, for one needs warmth...
One still works, for work is a form of entertainment. But one is careful lest the entertainment be too harrowing. One no longer becomes poor or rich: both require too much exertion. Who still wants to rule? Who obey? Both require too much exertion.
No shepherd and one herd! Everybody wants the same, everybody is the same: whoever feels different goes voluntarily into a madhouse.
'Formerly, all the world was mad,' say the most refined, and they blink...
One has one's little pleasure for the day and one's little pleasure for the night: but one has a regard for health.
'We have invented happiness,' say the last men, and they blink."

Of course, this is an exaggeration and generalization. And the "American Cowboy" approach has serious problems -- as its Bush-era connotations reflect -- but at least it is not life-denying. The US is far more dangerous on the world stage than senescent Europe, but those are the same qualities that make the US capable of greatness/inspiration.

As for my rational reasons:
A) EU is deeply undemocratic; no one votes for EU Parliamentary elections, and therefore concentrating power in EU hands is generally a bad unless there is a clear, strong benefit (e.g., maybe with trade policy).

The democracy problem goes beyond apathy: Even if people did vote, there are structural issues with the EU Parliament that dilute democratic accountability.
1) it's unclear what any European-wide coalition stands for (all amalgamations off diffuse parties) therefore you can't really express meaningful democratic voice;
2) the EU is so damned complicated it's unclear clear "who is to blame" if you want to change something;
3) Many important powers are still reserved to heads of state, creating a weirdly antidemocratic space (because voters election heads of state on national issues, and don't tend to scrutinize their EU dealings as much)

This anti-democracy is inherently bad (democracy being probably a good thing), but also has bad policymaking effects:
-Enables grubby backroom dealings and corrupt lobbying (no sunlight disinfectant); MEPs have gotten away with shocking corruption and obscene salaries/expenses. People out of sight given a big pot of money and not held accountable for any outcome are unlikely to behave properly
-Reduces accountability for bad policies; democracy doesn't punish bad policies very effectively (because its hard to see cause / effect on complex systems over time) but it's better than nothing

B) Even apart from the democracy issue, I think that the EU tends to pass regulation-oriented, statist laws. It's not that they are pursing left-wing goals; it is that they are pursing them typically through the most pedantic, bureaucratic approachs. Can't help but see the end result as an ossified super-state.

Part of this is its "pro-bureaucracy" institutional mentality. EU self-selects for more intervention-minded, pro-regulation and anti-liberty (personal and economic) people simply because that is its dominant culture and outsiders tend to either get sucked in or frustrated. I mean, every document is translated into 26 languages and there are two fucking parliaments. Only a bureaucrat can flourish in that kind of environment.

C) In general, I like the idea of Europe as having a great deal of diversity, and the EU reduces this over time. The federalist / laboratories of democracy argument is very strong when people have such strongly different cultural histories and yet can move around with relative ease.

There are also reasons to dislike Lisbon specifically
D) Lisbon is explicitly setup to enable a "slippery slope" toward EU statehood, by creating a head of state, allowing it to annex addt'l powers without requiring a new treaty, etc. See anti-democracy issues above.
E) Distaste for the way it has been forced through; only two referendums across 26 states -- none in the UK despite Labour's manifesto promise -- and a "stupid Irish, you voted the wrong way, try again" attitude. From the start, the EU has been an elite project imposed upon the people, and it shows.

Note (in response to a comment): As I was writing it, I realized that "insipid void" was Friedman-esq as a nonsensical description, but decided that both words convey part of what my meaning, so damn logic.

Wednesday, October 28, 2009

Important discovery

Fluid dynamicists have worked out how to stop teapots from dribbling

"The problem with teapots is their annoying habit of dribbling, particularly at low rates of flow. The phenomenon has achieved such notoriety that it has been imaginatively dubbed the 'teapot effect'."

I'll try to write something about life in Ghana soon.

Monday, October 26, 2009

quick note of the day

On Italy: "After a century in which its ancient civilization has been hollowed out, Italy is nothing but a republic without virtue, living under the heel of a clapped-out Casanova."