Why We Can’t Have Nice Things

The world has many problems and some of them are global. That is, some problems like war, global warming, and promoting innovation can benefit substantially from large scale coordination to address them. To judge from my Facebook feed, many think the main thing we need to solve such problems is more preaching – if only more folks would rail against the immorality of those who opposed their favored solutions. Another widely held view, expressed in a great many inspirational TED talks, is that we need more smart emphatic activists and inventors. But the following take is a more expert and believable:

Addressing Global Environmental Externalities: Transaction Costs Considerations. Is there a way to understand why some global environmental externalities are addressed effectively whereas others are not? … Property rights are supplied by international agreements that specify resource access and use, assign costs and benefits including outlining the size and duration of compensating transfer payments and determining who will pay and who will receive them. Four factors raise the transaction costs [and hence the difficulty] of assigning property rights: (i) scientific uncertainty regarding mitigation benefits and costs; (ii) varying preferences and perceptions across heterogeneous populations; (iii) asymmetric information; and (iv) the extent of compliance and new entry. (more)

While this paper doesn’t discuss it, another big issue is the strength and capacity of our institutions of global governance. For example, a lot of these problems would get solved a lot better with a high capacity world government. Such a government could better reduce uncertainty and secrets, enforce compliance, and promote compromises between conflicting interests.

If just you want to show off your moral outrage that problems aren’t being solved, by all means continue to preach that we must do better. But if you actually want to solve these problems, you should focus on identifying and dealing with their fundamental causes. Especially including the development of better mechanisms of global governance, and working to better understand what limits their deployment.

Btw, I tend to think that we hear the most preaching not about the problems that cause the most damage, but about those that best fit our schemas for moral outrage. For example, I tend to agree with Matt Ridley that global warming is a relatively minor problem, compared with for example overfishing and innovation promotion.

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  • anon

    If we had a world government that would be obeyed, we wouldn’t be in a circumstance where these problems existed. Creating a world government that actually governs the world requires that property rights and rule of law already be established in anarchical areas. You’re assuming away the entire problem when you say “world government” without going into detail on how one gets created.

    Are you trying to say that global war should be waged on countries ruled by bad elites? If not, I have no idea what you’re proposing.

    • It’s not merely a matter of elites being “bad”. The tragedy of the commons occurs even when you assume all the agents are homogenous in any relevant trait.

      • IMASBA

        Indeed, the countries that have the worst societal problems are not that numerous and contribute relatively little to things like pollution, climate change and overfishing. No, there are no such practical reasons for the Western world + South Korea and Japan to not become a single superstate, or for the Arab League or for Latin America, while India and China are already superstates. People are distrustful of governmental enlargement and there are cultural divides that slow down the formation of regional superblocs, but those are developing slowly but steadily. For a true world government PPP/capita differences between countries have to become a lot smaller, when they do a de facto world government (say the West + China, other East Asian nations and Latin America) could form quite rapidly and the rest of the world would eventually join them.

      • Doug

        Governments in any modern form are largely giant risk-sharing pools. When one sub-region does poorly any well-functioning democracy virtually always transfers on net to that region, smoothing the disparity between regions.

        For this to happen the citizens of said democracy have to genuinely feel not overly separate to those in other regions. This problem is apparent in the EU as proto-state. When Mississippi gets subsidized by California no one loudly complains (at least about the regional aspect), on the other hands German citizens genuinely do not want to pay taxes to support Greeks.

      • IMASBA

        Yes, that’s why I said PPP/capita differences have to become smaller. Of course as an EU-citizen myself I know the EU is a bit of a special case: it does try to pool risk but it cannot yet force Greece to have the same retirement age as Germany, where a uniform retirement age is enforced across the US (such uniformity is probably also much of the reason Germans complain louder than Californians because not only do the Germans have to sustain Greece, they can’t even force the Greeks to play by the same rules as the Germans, of course there’s also the language barrier.).

      • it cannot yet force Greece to have the same retirement age as Germany

        Greece has a retirement age of 58, Germany is thinking of raising it to 69.

        Shouldn’t we be getting more leisure as we become richer?

      • IMASBA

        Life expectancy has gone up (so a higher retirement age does not cut post-retirement leisure time by 100%), solving ecological issues costs resources, there’s more downward pressure on wages because of globalization, and added wealth has largely gone to health care and expansion of tertiary education (college and trade schools). So sure, after global economical equilibrium has been reached, the global economy has become green, aging of the population has halted and tertiary education is saturated we may see more leisure time, but only if societies choose not to spend all the added productivity on more health care or other goods and services.

      • Jake Stevens

        Actually 58 is the early retirement age in Greece, comparable to for example 57 in Italy, 60 in Belgium and the Netherlands, 62 in the US and France, etc. So a bit below average, but not absurd.

        Greece’s normal retirement age is 67, which is the same as in Germany and the US, which makes it actually a bit above average.

        It’s strange how people act like the retirement age is a big issue in Greece. Remember, their problem is that unemployment is way too high. How would pushing more people into the workforce help that?

      • IMASBA

        The devil is in the details. Greece has a lower retirement age for women and civil servants and it is generally easier to claim full benefits before the official retirement age than it is in a country like Germany. But the retirement issue was just an example: the main thing is that in the EU the richer countries feel they have to pay for people who do not have to play by the same rules, while the United States has federal laws.regarding social security and many other issues. Also in the US poorer states can contribute things like food, natural resources and soldiers to the whole which is much less the case in the EU.

      • Jake Stevens

        You’re absolutely right that people in the richer EU countries feel that way, but it’s crucial to remember that they are wrong. The current situation in the EU is almost exactly the reverse, with Germany prospering at the expense of Southern Europeans, since southern Europe holds down the value of the Euro, providing a huge boost to German exports, while the Germans raise the value of the Euro for the southerners, screwing up their foreign trade. And that’s not even going into the imposition of austerity.

      • Jake Stevens

        That’s a good point. The main obstacle to any increase in global integration is global inequality, since the rich countries don’t want to subsidize the poor ones. As the poor countries catch up this should be less of an issue.

      • What makes you so sure the poor countries will catch up? (In the medium-term.)

        China alone has made great strides (but I expect social disruption), and the BRICs have benefitted from the unusual circumstances of not having been subject to the same degree to the Great Recession; but the gains have been modest.

    • charlie

      Agree. The reasons why we don’t have a strong global government are the same that prevent a binding and effective climate change treaty. World government is a global public good, just like a stable climate is; there are very high transaction costs associated with achieving both.

    • He’s proposing that more intellectual effort be directed toward understanding the impediments to world government. (Without giving much of a reason to think these efforts would be fruitful given his maxim “coordination is hard” and his not taking centralism seriously as preventative for em dystopia.)

  • CarlShulman

    “I tend to agree with Matt Ridley that global warming is a relatively minor problem, compared with for example overfishing and innovation promotion.”

    What? World fishery revenues are under $100 billion. Annual CO2 emissions 30 billion tons, and the U.S. federal government estimated the social cost of carbon at $37 per ton, for a total impact well over 10x the current value of fishery revenues. Fishery revenues could be bigger if they were better managed (although the unsustainable extraction is boosting short-run revenues), but not that much bigger.

    Innovation promotion is just a much broader category, which includes the innovation in energy technology to more cheaply resolve climate, and is more important. You could say “overfishing and innovation are more important than climate, because innovation is more important, and so the sum of the two is,” referring to the conjunction rather than the disjunction, but that would be a pretty misleading way of putting it.

  • I’m also skeptical of fishing. Worst case scenario where all fish are extinct, I think we’ll just get over it.

    I’m not convinced by Ridley’s argument. Fertility has been going down, but you yourself expect a Darwinian process of selection to eventually result in the re-emergence of high fertility. I’m pro-nuke (even as I agree with Noah Smith that it fits poorly with any sort of decentralist ideology), but Ridley’s claim that it’s “experiencing a revival” flies in the face of everything I’ve heard.

    • Doug

      Well fish are most people’s primary source of omega 3. And the vast majority of Westerners are already chronically under-nourished for omega 3, because of the super-high abidance of its metabolic competitor omega 6.

      There’s strong evidence that low levels of omega 3 may take off as many years as smoking. So the extinction of fish stocks represents a serious public health consequence. There are supplements, but most people don’t take them the ones that have enough omega 3, because they think the oil tastes gross.

      • Just can’t get worked up by the threat of the necessity of gross supplements. Global warming at least has the unknown tail risk of ruining all kinds of stuff (and aside from the warming, carbon acidifies the ocean).

      • Handle

        I highly recommend the exercise of going through the Chemistry motions about ocean acidification. Remember, the scale is logarithmic, and tiny changes in concentration near neutrality have a disproportionate impact on our ion metric (still estimated at only about 0.1), but without having a commensurable impact on chemical processes or kinetics.

        Bottom Line: yes, the slightly basic pH of seawater will become slightly less basic. ‘Bleaching Corals’ is alarmist exaggeration. Don’t take my word for it, do the math and see for yourself whether it is hype. If you like, we can discuss the matter in further depth at either at our blogs.

        pH, like salinity, is not constant everywhere in the Ocean and has a pretty vast range, 7.5 to 8.4, and neither has it been stable over time. For example, salinity in the Mediterranean is about as high today as it was for the overall ocean during the ice ages, and yet there are species of marine life which have adapted to thrive almost everywhere, and of course survived the ice age without much trouble.

        But a range of 7.5 to 8.4 declining to 7.4 to 8.3 over a long period of time is just not something to lose our cool about.

        Finally, it’s worth noting that whatever the estimate of the magnitude of ocean acidification may be, that number is at opposition with the new estimate of the “Social Cost of Carbon”, because of the extreme change (down 90%) in the latter’s model of transport of carbon into the deep ocean.

        The ocean remains a giant sink for positive ions even if some people (i.e. Nordhaus) claim they no longer think it’s a giant sink for carbon. That means you either get a higher probability of a discontinuity, or a higher estimate of ocean acidification, but not both. But the funny thing is that the people who generate the high estimates for acidification (which still, again, aren’t alarming) aren’t using Nordhaus’ latest numbers on carbon transport. (Yes, yes, I know it’s about net transport, but over meaningful time scales it comes to the same thing).

      • Got any links for further reading on the subject?

      • Handle

        Here’s a good place to start since he provides a lot of references, the underlying graphs and links to published papers.

        One thing to note is the large swings in pH every ten years (as measure via the proxy of very old corals) that are caused by the Pacific Decadal Oscillation.

        Another thing is that the calcification rate seems to be going up, not down, which is the opposite of what the alarmists are forecasting – that the ocean will somehow become corrosive to carbonate-shelled organisms. Well, if it were some other acid, perhaps, though the kinetics of the calcification equation tell us that the pH would have to drop a lot more.

        But it’s not just any acid, it’s carbonate itself, which is an input in the calcification process. Remember the law of mass action for reaction rates? All else being equal (or close), you expect more of an input to yield a faster rate of producing an output. And so the data seem to be showing us, which contradicts the alarmists. This is not a matter of disputing far-future simulations, this is data we have now. And anyone can do an experiment and see the difference in growth rates between carbonate-fixing organisms in a lab environment with 500ppm CO2 air and pH 8.0 vs. 400ppm CO2 and pH 8.1 (which itself ignores the ability of species to adapt to ). And we have done those experiments, and they show us that there is no need for concern. And like I said, a lot of this is the kind of basic biochemistry that most AP Chemistry High Schoolers can do, which people can do for themselves and see the results aren’t catastrophic.

        So why do these bogus claims persist and get repeated over and over?

        And all of this just brings up the terribly difficult problem of how can we independently assess the credibility of any claim when made by credentialed authorities, or decide whether to repeat it absent personal verification and scrutiny as if it were gospel, short of a presumptions of validity so strong it borders on faith. There is the question of whether a field of inquiry can be ‘sick’, with a persistently faulty community consensus, and all kinds of inadvertent but perverse social pressures which keeps it producing answers in a biased direction.

        Personally, I tend to be open-minded with respect to certain claims of anthropogenic harm and give PhD’s an initial benefit of the doubt, but if something smells fishy to me when I start looking into it, I figure that they are in the best position to remedy those concerns, and if they haven’t done so to my satisfaction, I switch my presumption and then shift the burden of proof.

        This is like the legal interpretive doctrine of contra proferentem in which ambiguities are resolved in the direction unfavorable to the drafter of the instrument, who, after all, was holding all the cards and was in the best position to resolve the ambiguity in his own favor when he drew up the contract. Research scientists making alarmists claims and who have free or subsidized access to all the data and papers are the best position to recognize and address these concerns at the start, and when they don’t, I feel entitled to think I smell a rat until I come across better proof.

      • Thanks. I had always wondered why the issue got so little attention when proposed warming solutions like geo-engineering or adaptation via moving inland failed to respond to it.

      • Handle

        It does get attention, but every sub-topic related to the whole climate discussion is like a nested fractal. You don’t just go down the rabbit hole, you have to navigate the infinitely branching termite colony. All but the most persistent and determined people are going to throw up their hands at some point and find resolution of the whole matter hopeless. But of course, that also generates a certain space for biased mischief.

        Yorum Bauman tries to use that as a claim against geo-engineering in his discussion with Bryan Caplan about his cartoon climate book over at Econlog.

        Here is what he says:

        In my cartoon book, I write
        that injecting sulfur particles into the atmosphere “won’t stop ocean acidification.” In post #2
        of the current back-and-forth that Bryan and I are having, I again bring up ocean acidification and link to a RealClimate
        article in which scientists discuss some of their concerns about sulfur
        injections, including that it won’t stop ocean
        acidification. Here’s Bryan’s response, in post #3:
        “One of the reasons I read Yoram’s book, by the way, was to search out
        additional analysis of geoengineering. By my count, he’s now missed two
        opportunities – his book and his response to my review – to expand my knowledge
        of the topic.” I’m flattered that you have such high standards for my cartoon
        books, Bryan, but let me try again:
        What do you think about ocean acidification?

        Ok, now go to the realclimate link and try to pick up that acidification discussion and tell me what you see. Does it say what he gives you the impression that it said? It’s just a couple of short, random comments to the actual post, that don’t address any of the issues I’ve mentioned here, and which also, I should note, talk about the possibility of affordable acidification mitigation as part of a suite of geo-engineering solutions which include, for example, iron fertilization and sulfur aerosols.

        More to the point, why is Bauman being so obnoxious with Caplan? The point of geo-engineering, mitigation, adaptation, stockpile solutions, and so on is that we shouldn’t see costly emissions rate reduction as the only possible policy to lead to the ‘optimal’ outcome (however defined). But Bauman becomes irascible whenever these alternatives are mentioned.

    • Jake Stevens

      Overfishing has the potential to cause an environmental disaster, but the growth of fish farms means it’s unlikely to reduce fish consumption all that much.

      • Though it should be noted only a subset of species are amenable to aquaculture.

      • Jake Stevens

        True, but on the other hand I think different varieties of fish are generally pretty close substitutes, so we’ll just see a shift in consumption towards more easily farmable fish as they get cheaper compared to wild catches. Hopefully this will reduce the demand for wild fish a bit and let populations start to recover, but that could take quite a while.

  • In the previous essay, you lauded localism over globalism; now you call for globalism and ridicule localists. Have you not made up your mind?

    [On your previous analysis, there should be overinvestment in broad-scope solutions, such as world government, and underinvestment in narrow problems, such as carbon.]

    • Jess Riedel

      The point of this post isn’t global government, it’s about comparing the effectiveness preaching to other methods of accomplishing people’s purported goals. Robin doesn’t advocate global government here.

      • No, this is a meta-contrarian piece where RH implicitly takes issue with rightist/libertarian opposition to world government:

        Especially including the development of better mechanisms of global governance, and working to better understand what limits their deployment.

        The essay is unclearly written, as though RH was unsure which was his theme or maybe didn’t even want to be clear; he confounds issues of methods (preaching versus research) with those of substance (world government versus carbon controls–as someone asked, what about preaching world government).

        This discussion has concerned his substantive positions because preaching that we shouldn’t preach isn’t even coherent.

  • Anonymous

    If something like the world government could be enacted, the scope of it’s authority and it’s purpose would have to be defined very clearly and precisely. Namely, it should only be used to solve prisoner’s dilemma type of problems such as overfishing and global warming, not anything else. All problems that can be addressed by more local institutions, should be addressed by them. Otherwise, we are in danger of ending with the most bloated and corrupted governing body of all times and eventually all areas of our lives would be governed by a shadowy organization which no-one can control. Just imagine how much lobbying power would be directed towards the world government if such a thing existed.

    • George

      That’s what the federal government was supposed to do. We can all see how that turned out…

      • IMASBA

        That’s what the UNITED STATES (95% of the world lies outside the US) federal government was designed to do in the 1800s and then later generations changed their minds somewhat. Probably because issues that required coordination became more important so the costs of not solving those issues started to outweigh the costs of having political power concentrated (of course real power is and always has been concentrated in the hands of the rich).

        Having at least a moderate level of centralization is necessary in these times to combat global issues and stay competitive with other countries, just as having a military is (and the two aren’t entirely unconnected).

      • George

        I’m not sure what your point is. How does any of this change the fact that the US government has morphed into a grotesque, over powerful monster that is completely captured by private interests? You think a world government wouldn’t be susceptible to more of the same with even more power and no hope for escape?

        I cannot support that. I lean in the opposite direction, with power devolved toward local government and the use of markets for wider issues. Markets aren’t perfect, but they’ve proven to be a much better purveyor of information and happiness than mass-scale socialism.

      • IMASBA

        Are you seriously equating government with “socialism” (or rather some twisted American view of it that agrees 0.0% with the reality of social democracy in such communist hell holes as Germany, the Netherlands and Switzerland)?

        My point was that the American federal government is only grotesque and over powerful if your standard for it is that of the 18th century Americans (well, really the land owning white male Americans of the time). Popular opinion in the US today no longer uses that standard and it is that popular opinion that will decide about a world government. It could very well be that when the time comes the United States will fall apart with more and more states choosing to join a (no doubt federated, because a global parliament doesn’t have time to concern itself with local issues) world government.

      • George

        So you don’t believe that the current us government is grotesque and over powerful? So by extension, you support drone bombings, Monsanto patent abuse, patent trolls, the central bank, inflation, the war on drugs, the massive transfer of wealth enabled by this powerful central government, legalized insider trading by politicians, graft, corruption, and the persecution of all those whom have blown various whistles? God forbid they stand against the mighty collective.

        You can continue inventing straw men, I can do the same, or you can address my position head on. It’s up to you.

  • Philon

    Yes, global warming is bad, and so is overfishing (though perhaps it is not *worse*). But innovation promotion–that’s truly *horrible*!

  • Robert Koslover

    The best form of government is almost always the smallest and most-local government. Big government organizations, even those with the very best of intentions and very best of missions (and not to mention those that don’t even start out that way!), ultimately fail to do their jobs and become cesspools of corruption and oppression. (e.g., see, among history’s many other thousands of examples: http://www.usatoday.com/story/opinion/2014/06/23/va-collective-action-veterans-healthcare-government-scandal-column/11235623/). For the sake of all humanity, please do not be suckered into supporting any kind of “Global Government.”

    • Doug

      The solution is decentralized mechanisms that allow cooperative global coordination without requiring the concentration of authority at a single source. One example would be dominant assurance contracts.


    • IMASBA

      That’s a very American point of view. Germany has 1/3 of the American population, is federalized but less so than the US and its federal government is not seen as an organization that fails to do its job and is a cesspool of corruption and oppression. With 80 million people they may already have all the significant effects of upscaling so a government that rules over a large number of people does not seem to be intrinsically a bad thing. Besides, if we’re talking about tackling global problems all we really care about is if those problems can be solved: if climate change can be stopped by a world government that costs the world $1 trillion per year through corruption it’s still worth it.

      • Jess Riedel

        Note that Germany is much closer to 1/4 of the US population than 1/3. That’s only two Californias, the government of which would *not* impress most of the people you are arguing against. Germany is also significantly more culturally and ethnically homogeneous than the US.

      • IMASBA

        The point is that 80 million people may very well be enough to have all the significant effects of upscaling. Just like corporations stop noticing economies of scale beyond a certain point. Like corporations the issue of lack of competition could be an issue (no need to be perceived as more just than a rival government, no common enemy to keep minor domestic disagreements from exploding into conflict), but that’s an issue that’s independent of the population size.

        “Germany is also significantly more culturally and ethnically homogeneous than the US.”

        It may be more homogeneous than the US but it certainly isn’t a lily-white year-round October Fest and there are still strong divides between East and West. In any case it’s only a matter of time before whole regions of the world and ultimately the world itself achieves the same level of cultural homogeneity (at least as far as ethics are concerned) as Germany, by which point ethnic diversity becomes moot. But hey, if Americans don’t want to be part of the world government because of some 18th century mistrust of all things government I’m sure they could serve as a satellite state for as long as it takes them to accept the new situation.

      • Hasamo

        “if climate change can be stopped by a world government that costs the world $1 trillion per year through corruption it’s still worth it.”

        Why? Please show your work.

      • IMASBA

        The World Bank estimates that the results of climate change will cost the world $1 trillion per year in 2050 and since a world government can solve other problems besides climate change, a loss of $1 trillion through corruption would be worth it.

      • Hasamo

        So all you have is an unsourced substantiation from one source and you want us to just accept that at face value? Have you even bothered to research your position and compare against dissenting viewpoints? Or is it all about faith?

    • Jake Stevens

      It’s a good thing that the world is so simple that you can judge how effective an organization is purely based on it’s size.

  • “For example, I tend to agree with Matt Ridley that global warming is a relatively minor problem, compared with for example overfishing and innovation promotion.”

    So if there were an innovation that sharply increased fish stocks while at the same time sequestered atmospheric carbon, that would be a good one to promote, no? See this:


  • Ronfar

    The worst case scenario for global warming is that it causes significant disruption in ocean currents, which leads to low oxygen levels in the oceans, which leads to growth of large amounts of sulfur-producing anerobic bacteria, which leads to the release of large amounts of poisonous hydrogen sulfide gas into the atmosphere, which leads to people not being able to breathe without gas masks.


    • IMASBA

      That probably won’t happen, sea-level rises and desertification will/are and those greatly disrupt ecosystems and sedentary human civilizations.

  • mugasofer

    How about preaching about the need for a global government? Will that help?

    Seriously, I’m curious.

  • Jake Stevens

    Matt Ridley, really? He is pretty well known for being a not particularly sophisticated hack. Here’s a decent take-down of the article of his linked to above: http://www.carbonbrief.org/blog/2014/06/factchecking-claims-that-the-ipcc-says-there-will-be-no-dangerous-global-warming-this-century/

  • George

    A global government? So, the oppression, death, and destruction of the us government, but on a worldwide scale, with no escape? No thanks.

    • Charlene Cobleigh Soreff

      I prefer to think of it as Gettysburg – with nukes….

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  • John Harper

    Does anyone have a non-paywalled link to the full text of the paper?