Panamanian Economics – Corruption Versus Capitalism

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I went to Panama last March on a fact-finding mission. A buddy and I had been hearing for months that there were real estate opportunities aplenty in cool areas like Bocas del Toro, Panama’s Caribbean archipelago. So we flew into Panama City (not the one with Spinnaker’s and wet t-shirt contests) and then made our way to the islands the next day.

One of the things I pay close attention to when I travel is the gap between the rich and poor. I look to see if there’s a significant middle class because I think it says a lot about the economy and the rule of law. I can say that it appeared to me that Panama City was mostly middle class, although I’ll concede that I did not see all of it. There were certainly some nice homes (well guarded, I might add), but the majority of what I saw was what you’d think of as everyday housing – not too big or nice, but not dilapidated. More importantly, the city was bustling with people tending to their “para hacer” lists. Things changed dramatically as we made our way to the coast.

Bocas del Toro is a collection of islands just south of the Costa Rican border, on the Carribean side of Panama. It is an interesting place because the main town, Bocas Town, is sheltered from the ocean by the backside of two sizable islands – it’s own and one other. There are some smaller islands in the mix, as well. The result is a place where much of the transportation is by boat, on water that is as smooth as glass. Houses and hotels are built on stilts. It’s actually one of the neatest places I’ve ever been. Alas, economically, the place is a train-wreck.

As I said, my friend and I were investigating rumors that property was dirt cheap, but on the rise as international tourism was taking off. We concluded that it was probably true. We also concluded that we’d be idiots to try and find out for sure. This is where the rule of law comes into play. You see, Panama is very friendly to foreign investment, mainly because the US is the biggest user (and therefore customer) of the Panama Canal. As a foreigner investing in Panama, you can set things up so that you don’t have to pay any taxes – not on property, not on income – for a period of ten years. If you invest in some sort of re-forestation project, ten years can become twenty. The Panamanian government has latched onto the idea, which has been well proven, that foreign capital creates local jobs. It’s the rising tide lifts all boats principle. However, the adherence to the rule of law is really the arbiter of long-term success.

In Panama City, you can see the wonders of a free market with an influx of capital – Panama City is the financial center of Central and some of South America. Though I am quite certain that corruption is present there, I am also certain that enough of the folks in power have realized that gains from malfeasance are easily dwarfed by gains from saying what you mean and meaning what you say. Essentially, the leaders in Panama City have officially become westernized. Not so in Bocas del Toro.

One of the big draws to Bocas is teak wood. Just run a google search on “bocas del toro teak wood” and see how much comes up. The offers vary, but the general theme is the same – you can pay a ludicrously low price for 10-20 acre increments of waterfront land with beaches that transition into teak forests . The teak is meant to be your nest egg – they (a crew of workers comes with the deal) harvest them every ten years or so – yielding a reportedly whopping return on investment. On top of that, these visionary developers have dedicated some of the land to harvesting the Noni plant, which, as near as I can tell, is something like Aloe but with a “it’ll cure what ails you” kind of mystique. This is harvested yearly, offering investors reliable and consistent income. So, to summarize, here’s what you get: land for cheap that is right on the water (high appreciation potential), the full rights to build whatever you like on it (vacation home or business), a farm of teak trees that will provide a windfall of cash every ten years (built-in revenue stream), and a crop of Noni plants that will pay the light bills (icing on the cake). Too good to be true? You bet.

It didn’t take much digging to conclude that the areas away from Panama City are not even remotely westernized, at least not the economic sense. They’re in a strange place, between the past “he who has the cash makes the rules” system and the future “follow the rules and create the cash” system. Corruption still holds sway over Bocas del Toro. The concept of quid pro quo has not yet really taken hold there, at least not where foreigners are concerned. To some (too many) of the locals, we are nothing more than walking money bags. Their job is to extract as much as possible from us, and there is no ethical or practical issue with saying or doing whatever it takes to make that happen. From my perspective, whether you’re renting a taxi, hiring a tourguide, or buying a teak farm, you are well served if you do not count on honesty or integrity from the locals.

We met another American who had been in Panama for much longer than we had. He had the occasion to befriend an attorney who spends half her time in Panama City and half her time in Miami. She explained to him that a very large portion of the time she spends in Panama deals with helping foreigners who’ve been scammed in real estate deals, many of which take place in Bocas Del Toro. Apparently, they have quite a slick operation set up there.

Buyers are courted and shown real, working tree farms. They’re provided access to reference customers who sing the praises of their investments. When these marks decide to pull the trigger, they are treated to a credible closing, complete with piles of legal paperwork. The thing is that the paper is worthless. The check clears and the crime is discovered only when the “new owner” tries to exercise his rights of ownership – either by building something or simply by hanging out. The Bocas authorities are called in and the person gets that sickening feeling that you get when you know you’ve been had. The police, who most likely are in on the con, rave about how this is causing all sorts of problems and how they are hot to nail these ladrones (criminals). From there, the story is just like any con movie – the victims return to the scene of the closing, only to find an empty building with no one around. The company they dealt with is gone, vanished from paradise. And the point of all this?

The situation in Panama, if we can extrapolate the Bocas situation, highlights something important about how societies handle the transition to capitalism. The thing about going from a closed market to a free market that invites foreign participation is that there is a queue for the receipt of benefits. The haves are the first in line, which means they will have more before the money trickles down to those who have nothing. This can be very disconcerting when seeing far into the future must always give way to daily necessities. So, for many rural Panamanians, the benefits of honoring contracts with foreigners have simply not yet availed themselves. In an area where there is no middle class, corruption, for most folks, is still a better business than truth. The problem is that this can only go on for so long before the whole project withers away.

Capitalism is a vacuum for money, but only if the profit motive can be realized. When money goes in and then disappears because the main rule of the game is that there are no rules, the vacuum dissipates…and fast. This is what is happening in Bocas right now. A friend visited there a couple of months ago and says that Bocas del Toro is already played out. How can that be? As recently as March, you could smell the opportunity there. There were major resorts planned on one of the biggest islands and more and more tourists were visiting and staying longer and longer. It seems, however, that one too many investors got burned by the short-sighted (although understandably pragmatic, from their point of view) actions of latino grifters on the long con. The resorts are on hold. The money well has dried up before it ever really got going. It’s sad, really…but maybe not.

Like I said, Bocas del Toro is beautiful. Though I liked the idea of buying low and selling high while the international tourist boom made landfall there, I now like the idea of being able to go back to a place that’ll be largely unchanged and still every bit as charming (don’t get me wrong, I had fun) in 10 years. And now that I know what I’m dealing with, I’ll conduct business as I do in Jamaica – product first…then the money, mon. And if I’m in a real good mood, I might just finish off the transaction with my favorite Spanish phrase: “Donde tu frijole playa?” (That one, you’ll have to look up.)

Musing Between Theory and Practice

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Original Post (with comments)
Yesterday’s column raised some eyebrows. I got a few notes from folks who felt it was totally out of character and even somewhat irrational. They were concerned that I was standing atop one of the slipperiest slopes known to man. Indeed, they were right. I am, but it’s no cause for alarm. It seems to me that the difference between conservatism and liberalism is often the difference between theory and practice, and predictably, I come down somewhere in the middle. I really think it’s possible to be a compassionate hard-ass.

Bertrand Russell is my favorite philosopher – hands down; it’s not even close. The things he observed and codified about humanity were so prescient that it’s somewhat eery to read them this many years later. One thing he harped on a bit was the treatment of criminals. In a brilliant little book entitled What I Believe (1925 – I have it as an essay in the book, Why I Am Not A Christian – 1957), he wrote:

I merely wish to suggest that we should treat the criminal as we treat a man suffering from the plague. Each is a public danger, each must have his liberty curtailed until he has ceased to be a danger. But the man suffering from the plague is an object of sympathy and commiseration, whereas the criminal is an object of execration. This is quite irrational. And it because of this difference of attitude that our prisons are so much less successful in curing criminal tendencies than our hospitals are at curing disease.

Now, Russell was not so naive as to overlook the valuable deterrence that comes with criminal punishment. His point was, however, to say that, “The vindictive feeling of ‘moral indignation’ is merely a form of cruelty.” This is where I’m coming from in suggesting that even the most economically conservative among us should be careful in simply dismissing the bad decisions of the poor and ignorant as “their problem.”
The liberal theory, the one that underlies much of Russell’s thinking (he had serious socialist tendencies), is that it is unfair to hold people responsible for all of their actions if there are mitigating circumstances. The conservative practice is that this is exactly what we must do if it is an orderly society that we seek. I think there’s middle ground here.

What often gets lost in these kinds of discussions is the fact that the history of the human condition has been most characterized by Mother Nature and social groups holding individuals accountable for their actions, regardless of circumstances. Either you provide for yourself or you die. This is the harsh reality of our animal heritage. And while it is a true that it is now possible for people who do nothing toward their own self-preservation to survive and even prosper, we should only see this as an achievement if it does not unravel the system that gave rise to it. This is where practicality rules the day.

It is clear that the rule of law is the tie that binds a free society. If we lean too far left, it is the rule of law that perishes, even as the wards of the state (and the guilt-ridden achievers) applaud the victory of theory over practice. When we distort the nexus between actions and consequences with proximate causes, we subvert the role of our criminal justice system and invite chaos into order. Practicality, therefore, requires us to be compassionate hard-asses when it comes to attitudes about economic stratification.

We should think of our economic system as an anonymous one – anonymous in terms of individuals operating within the system and anonymous in terms of the forces that shape the free market (the invisible hand). Capitalism, by taking advantage of human nature, is based upon this very idea. We recognize at the outset that there will be winners and losers, but we also recognize that our system produces more winners than any other ever devised. The question is what to do when anonymous losers become real people with real problems.

Lefties will, whether they know it or not, advocate changing the system to eliminate losers entirely – this is the vision of the welfare state. It is, quite obviously, impossible, which is why liberals are so often accused of living in fantasy land. My recommendation is that we come up with a means by which we deal with losers once they appear on our radar screen. We should consider it an ancillary benefit that capitalism will alert us to the existence of those who are not faring well under it, not as indication of its cracked foundation. We cannot control a person’s starting point in life, which means we will inevitably come upon folks who cannot make the wise decisions that are the prerequisites to economic success in a free market society. This is not a bad thing. It’s a reflection on reality. What we do next is what matters.

I am vehemently against handouts of pretty much any sort, except in extreme cases. I think a good quid pro quo beats a handout most every time, so despite my compassion towards those who are hurt by our system, you’ll never hear me argue for more welfare benefits. The solution, I believe, starts with separating the truly needy from the able but mentally unprepared. The truly needy, the insane and disabled, are the exceptions to the handout rule. If they cannot reciprocate, compassion dictates that we help them anyway. It is the able but mentally unprepared who have no business getting handouts in my book.

This is where the time horizon of maturity concept comes in. If we can say that the primary feature of being mentally unprepared to thrive in a capitalistic society is being unable to envision and internalize the consequences of future actions, and I think we can, then disdain has no place in these discussions. “Their problems” are our problems, in more ways than we think, which means it is incumbent upon us to try to solve them…without disturbing the economic incentives that underlie our system.

We must introduce a quid pro quo function into the provision of welfare benefits, and I’m not talking about means testing. Means testing will tell us if someone needs help, but it will not tell us why, and it will not tell us what kind. The trick is to provide benefits that sustain life, but with a catch – they diminish unless educational milestones are met, but not just involving traditional concepts of education. The curriculum must, first and foremost, be designed to resolve the time horizon problem. This is the first filter, so to speak. We can’t forget that among the losers in our society, there will always be able-bodied individuals who do not possess the time horizon problem but simply will not act on their own behalf. (If we must dole out disdain, and I’m not saying we must, it is to these souls that it should be aimed.) I am convinced that most people, if properly grounded in the actions/consequences concept, will rise above their plight. The right kind of education is the first step.

The test will come when we then become hard-asses, forcing them to do what it takes…like everyone else. Those who pass, meaning they take responsibility for their lives, get to become anonymous again. Those who do not then go through another evaluation to determine if they’re really needy or just shiftless. The needy get the handouts; the shiftless get to experience the consequences they care so little about. It’s not perfect, but it’s ethical and, most important, it’s fair – we can’t change the system for a few bad apples, but we can at least be rigorous in the separation.
The tricky thing about straddling the line between theory and practice is that solutions often come out half-baked. I’ll admit that this one is. But it’s still better than considering the non-achievers among us as losers without a second thought. We’re better than that, so I’ll hold out hope that a fully-baked solution, one that embraces compassionate hard-assism (please add another hokey coined phrase to my credits), avails itself in due time.

Being Poor is Whose Fault? The Time Horizon of Maturity Reprise

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Original Post (with comments)
Neal Boortz, my favorite radio guy, is fond of saying that poverty is a mental disease, that poor people are poor because they keep doing things that make people poor. It’s all about choices, says the talkmaster. I tend to agree, but there’s more to it than that. I concede that making bad decisions is the fastest way to get poor and stay poor. However, the question on my mind has to do with the culpability of people who consistently make bad decisions. What if the reason so many folks make consistently bad decisions is beyond their control? Then what? Then is it reasonable to advocate a social system that dooms these truly unfortunate souls to the perpetual motion machine of poverty?

I can almost hear the gasps. Here I am, one who pleads regularly for more personal responsibility, taking the blame off the individual. Allow me to elaborate. As I’ve mentioned before, a major component of human development is what I call the time horizon of maturity. This basically refers to one’s ability to project him or herself into the future to actually envision the consequences of actions that are being taken in the present. Children have a very short time horizon, and this is mostly a function of their limited understanding of the concept of time in general. As they grow up, however, they come to understand time, and if they’re raised in the right kind of environment, they come to be able to imagine themselves in the future. This is the key to making good decisions.

Many liberal-minded people think of conservatives as heartless because conservatives don’t often display a great deal of sympathy for people who have had the chance to do something with their lives but they simply haven’t. Indeed, as I myself have said many times, I went to public school. I could have kicked back and lived the high life (literally) every day , but I wanted a future that would not allow it. How is it fair that someone should be rewarded with part of my success (in the form of benefits that come from my tax dollars) for doing nothing, for contributing nothing? Though it has been a bit discomforting, the idea has been steadily dawning on me over the last year or so that maybe I’m wrong. Maybe the libs have gotten this one right…at least partly right – they’ve correctly identified the problem.

Imagine an 8-year old white boy named Jimmy. His father left shortly after he was born. His mother, Lila, has tried to work but she’s been fired again and again for poor attendance – some due to looking after Jimmy, some due to looking after herself a little too much. Now she’s on welfare. She gets food stamps and a check every month. They also live in government housing. Jimmy’s neighborhood is tough, even for 8-year olds. Most of the kids hate school and ditch it whenever they can. Jimmy is no different. When the school calls home to notify Lila, she’s too engrossed in daytime TV to care. Besides, she never exactly liked school herself. Now, the question, the one I can’t shake is this: when 20 years goes by and Jimmy is a derelict in his neighborhood (if he’s still alive), was it his fault that he never got his act together?

The answer revolves around whether or not he possesses the ability to see the future…with himself in it. I am more and more convinced that most people in poverty simply do not. If you say to someone, “You must study for this test in order to pass this course,” it means nothing if passing the course means nothing to that person. Passing a course is not an end in itself. It is the means to an end. In order for one to be motivated by this line of reasoning, he or she must be able to internalize the personal significance of passing the course. More importantly, the significance has to be more powerful than whatever immediate gratification must be foregone in the studying. So you can’t just pound home the platitude that you have to stay in school to succeed in life. It’s like a foreign language to one who cannot see the future, and we cannot hold this person responsible for not speaking a language that they have no experience with. This, more than anything else, is the poverty problem, and our society is not addressing it at all.

What are we to do? This is the big question. Here, I must side with my fiscally conservative brethren in saying that income redistribution is not the answer, at least not as it is done today. You can’t give money to someone who lives for today and expect them to do anything but spend it as fast as possible. This is the phenomenon that explains the staggering number of lottery winners who end up in jail for failing to pay taxes on everything they buy and for defaulting on massive debts. No, money is not the answer. We need widespread prognostication education.

One way or another, we have to get to the people currently in poverty and teach them to envision themselves experiencing the consequences of their decisions. We have to teach them to teach their children the same thing. We have to go back to basics. It’s all about action and reaction. As we do when teaching anything complex, we must start small and work our way up. We need to be able to diagnose where people are and then get them in a program to see further and further into the future. When we have a nation of amateur prognosticators, we can feel justified in holding them accountable for their actions. Until that time, we should be careful with our judgement. We should thank luck and circumstance that it is not we who see tomorrow so much fuzzier than we see today.

From the Mailbag – One Reader Objects To His Genes

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Original Post (with comments)
I got this email recently in response to the “Is Man Inherently Selfless?” article. It is chocked full of object lessons in how not to think about this stuff, so I figured I’d take it apart piece-by-piece.

One thing I read over and over again from evolutionary biologists is how men are genetically programmed to want to impregnate as many women as possible. Men are genetically predisposed agains monogamy. This is totally false. I am not programmed that way. It’s certainly not because I have rid myself of my bass desires through mental discipline. And the reasoning for it isn’t particularly enlightened. It’s quite simple and tied to other unenlightened caveman values. Status. Your offspring are much more likely to achieve status if they are born into a monogamous relationship than if they aren’t. And whereas I certainly could enjoy having sex with 70 virgins I would be highly unlikely to cheat on a monogamous mate because of feelings of loyalty which can override sexual desire. Especially if you have kids, from what I’ve heard people’s sex drive gets noticeably weaker once they have had offspring.
I knowingly embrace these caveman values of mine.

Let’s start with the biggest red flag of them all – “This is totally false. I am not programmed that way.” I see. So if this person had six fingers on his left hand and I stated that humans have five fingers on each hand, would he say that that also is totally false? It’s false for him. Exceptions to rules do not necessarily negate them. We can’t think of ourselves as archetypical representatives of our species. Some combination of genes and culture could easily produce a person who displays almost no “caveman-like” behavior. That doesn’t mean our ancestors were not cavemen, and it does not mean that the biological facts of reality are not still in play.

The facts I’m referring to have to do with the size of our sex cells. Males have many, many small ones; females have relatively few large ones. The size and quantity of sperm cells in males means that males have plenty to lose – there are millions more where they came from. In females, however, eggs are very precious. This is the reason for the divergent reproductive strategies of males and females. Males have shotguns; females have rifles. It’s that simple.

“Your offspring are much more likely to achieve status if they are born into a monogamous relationship than if they aren’t.” Sorry. Wrong again. The notion of monogamous relationships is very modern – as in, it has only been around for a few millennia. When our genes were being shaped by natural selection, it is doubtful that anything resembling monogamy existed, at least nothing very long-term. You can’t think so digitally about this. There are more than two options. Your genes, which are all that matters here, are best served if you have hundreds of kids by impregnating hundreds of women who already have mates, and then having those mates raise them. In fact, it is widely believed that jealousy emerged to keep males from being cuckolded (where they unknowingly raised another male’s child). If this is true, then we can think of monogamy as a cultural analog to jealousy – both exist to see that any time or resources a male invests in his offspring are not actually being invested in someone else’s offspring.

“And whereas I certainly could enjoy having sex with 70 virgins I would be highly unlikely to cheat on a monogamous mate because of feelings of loyalty which can override sexual desire.” Your feelings of loyalty to your mate have been installed by your environment, I can assure you. This is easy to see because you don’t have to teach kids to tell lies and be selfish. You have to teach them to tell the truth, even when it hurts. You have to teach them to share. And when it comes to sex – look at what goes on in the least educated, most ignorant places in the world. Rampant male promiscuity is the order of the day. Just look at America’s inner cities. Very few mothers are married, yet most males have children. The flip side is to look at affluent and educated people. Fewer kids, more marriages. I suspect that you grew up closer to the affluent educated side of the spectrum than you did the poor ignorant side. That, more than anything else, explains your “loyalty.”

“Especially if you have kids, from what I’ve heard people’s sex drive gets noticeably weaker once they have had offspring.” Sex drive toward the male’s mate may get weaker, but take away any culturally-installed inhibitions and put him in the back room of a strip club with a dozen prostitutes and then tell me about his sex drive.

Let me shout this point from the rooftops – IF YOU ARE MONOGAMOUS AND FAITHFUL, IT IS BECAUSE YOUR LIFE EXPERIENCES HAVE TAUGHT YOU TO OVERCOME YOUR GENES. The job can be done so well that you never even know it happened – just like how kids raised in devout religious environments never even realize (at least not until they get out into the world) that it’s possible to go through life without ever believing in God. Early indoctrination of the human mind is every bit as powerful as genetics, which is why we should be using it to do good, not to promote superstitions and nonsense. Those of us who have risen above our genes have much to be proud of, but as long as people continue to deny the dangers of our natural tendencies, we’ll never realize the vision of a truly compassionate and rational society.

This is a classic case of recognizing the problem being half the battle. Those who insist upon romanticizing humanity will consistently fail at this. Too bad. How do we justify telling a kid after catching him in a lie that he’s programmed to be good, but that somehow he has turned against his nature? And we wonder why so many people have inferiority complexes.

Scandinavian Economic Prosperity and Merits of the Welfare State

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I was listening to the Michael Medved radio show today (He’s really good, by the way.). The topic was Scandinavian family values, or rather the lack thereof. He was referring to a USA Today article that talks about how 82% of Nordic children are born to unwed mothers. Though it is somewhat shocking to think that an entire culture has embraced such a backwards mentality as to consider marriage more deliberately than bearing children, it appears to be so. A couple cited in the article is expecting a baby in May but they’ve decided to put off marriage until they’re sure they’re right for each other. Say what? Aside from the differences in religious and social attitudes in Scandinavia, there appears to be an economic explanation for this practice.

According to a caller from Copenhagen (you gotta love internet radio), the Danish system rewards having children before you get married – government benefits are substantially higher for single mothers than they are for married parents. Putting aside that this is obviously stupid, I think it illuminates something more important about the relationship between economic policy and social attitudes. But first, it’s time to put to rest the myth that the Nordic system is the pinnacle of compassionate and effective economic policy.

Scandinavia is often held to be an example of a successful welfare state, where taxes are high but benefits are high and much appreciated by a population more happy with the return on their substantial investments. On the surface, given the prosperity of these three countries, this argument seems compelling. It seems to refute the notion that the kind of economic freedom reflected in free-market capitalism (and its necessarily minimalistic welfare model) is a prerequisite for truly elevating the human condition. However, I am inclined to believe that it is the social pressures that exist in such ethnically homogenous populations that explain the success of the massively regulated and redistributive economies in Scandinavia.

The problem for free market fans like myself when considering this area of the world has always been reconciling the notion that there is no free lunch with the fact that Sweden, Norway, and Denmark have in years past enjoyed very low unemployment and a commendable general standard of living. How could such generous benefits be sustained economically? Why wouldn’t the freeloaders bankrupt the system? The answers, until the last decade or so, have revolved around the fact that freeloading among Scandinavians was socially unacceptable. The folks who could work did work because the social repercussions of being a deadbeat sponging off the system were more painful than whatever agony was associated with maintaining gainful employment. Social responsibility effectively protected the system. Therefore, the security of comprehensive state-provided benefits could be enjoyed by all without fostering resentment toward a significant portion of the population for taking without contributing. Nowadays, however, the Scandinavian welfare state is in a crisis, and immigration is turning out to be the chief culprit.

I found an article on the Royal Danish Ministry of Foreign Affairs website called “Denmark – Conditions of Life – The Scandinavian Welfare Model.” The author, Niels Ploug, describes the situation:

It has never been the intention either with unemployment, sickness benefits or with cash benefits that so many people should receive them or that they should receive them for so long as has been the case in recent years. The financing of the welfare state has thus become a problem, and as it has not been politically possible to increase taxes, which are already very high, the Scandinavian countries have accrued a very large national debt which on the long view could represent a threat to the welfare systems.

The reason so many are receiving benefits is the influx in the last few years of immigrants. The Scandinavian systems were designed to provide benefits to all residents. Prior to the immigration stampede, this was viable because the ratio of people contributing to the system (via high taxes) versus people extracting benefits from the system was high enough to sustain it. However, now that immigrants are moving in and realizing that they can live in relative luxury (compared to life back home) without so much as lifting a finger, the system is descending into deeper and deeper waters. Thus, the free market fan is vindicated.

Whenever income distribution is derided by classical liberals (not to be confused with the modern-day notions of liberalism), the misguidedly compassionate are quick to point to Scandinavia as an example of the realization of their vision. It is the harshness of capitalism, they argue, that creates poverty and crime. If we only adopted the redistributive policies of our Nordic friends, many of our problems would go away. This, as we can now see, is nonsense.

The fact is that there is no ethnic homogeneity in this country to protect us against freeloaders. Our society is so anonymous that it is entirely possible to remain unemployed and receive unemployment and welfare benefits without any “neighbors” ever knowing – especially now that food stamps are giving way to benefit cards that are often indistinguishable from debit and credit cards. So there are no real social incentives to be productive. We can see how a relatively small population of immigrants with no ethnic connection or feeling of social responsibility are bankrupting the Scandinavian system. Imagine implementing that system here. It would make the inane US social security system look like the height of economic acumen. And, beyond simple economics, as in the case of single mothers in Nordic countries, there are significant social ramifications to such systems.

As the caller from Denmark pointed out, there’s a definite connection between the terms of the provision of benefits and the behavior of the general public. It simply makes sense economically to have a child before you get married. According the Ploug article, about two-thirds of single mothers in Sweden receive housing allowances, which means that available benefits are being taken advantage of in a big way. And why not? If you and your partner are blissfully in love and want to have a child, you’ll receive significantly more income from the state if you do so while unmarried. Could it be that much of the rationalization for this practice (liberal attitudes about the sanctity of marriage, etc.) is a smoke-screen for the fact that people will often do what makes the most sense economically? This has certainly been the case in the US.

When Welfare Reform was passed in 1996 limiting the amount of time benefits could be received, the US saw a gradual reduction in the number of people on the welfare rolls. When there was no economic incentive to get to work, many welfare recipients were content with limiting their exertions to walking to the mailbox every month to collect a check from Uncle Sam. But when the money ran out, necessity forced them into the workplace. So, when we look at Scandinavia, we should not see a shining example of how things ought to be. We should see the massive impact that economic policies have on the prosperity of nations and on the value systems embraced by the populations therein. It is, quite simply, an axiom that large-scale income redistribution inevitably leads to a decline in fiscal health. What is also becoming more and more clear, however, is that attitudes regarding employment, family life, and the relationship between the rich and poor are disproportionally influenced by economic policies in the welfare state. This is an object lesson in the concept of unintended consequences.

Social attitudes should be shaped by the public’s rational pursuit of the good life. But when economic policies place arbitrary hurdles in the way of practical courses of action, impractical and often irrational options become the paths of least resistance. Over time, they become socially acceptable simply by virtue of being well worn. The problem is that, eventually, these paths place the good life entirely out of reach. As far as I’m concerned, it’s better to let necessity continue to be the mother of invention. What do you want to bet she’s married?

Random Thought on the Variation in Animal Behavior

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I love nature shows, but I’m always alarmed at the confidence with which folks like Steve Irwin and Jeff Corwin approach dangerous animals. They consistently refer to the exhaustive body of research on these animals as evidence of what these critters will do from moment to moment. This seems odd to me, even though the fact Corwin and Irwin are still alive reasonably substantiates their credibility. What gets me is this: how is that human tendencies have so much variation but animals are fairly well predictable?

I mean, there are good people who adhere to social norms, but there are also bad people, even evil people, who have no regard for others. The behavior of these kinds of people cannot be even remotely predicted. Are there not equivalents in the animal kingdom? Are there not “bad seeds” who, far from doing what researchers expect, will jump at the opportunity to maul a supremely arrogant human? This thought grips me most when I see marine biologists swim with sharks. Wasn’t the shark in Jaws one of these bad seeds? I know, it’s just Hollywood, but still. I saw a show a couple of nights ago where a guy was swimming with no weapons and in no cage with a slew of bull sharks. He was obviously very comfortable – the crazy bastard. Why is it that the behavior of such dangerous animals can be predicted so consistently, yet humans are all over the map?

Maybe it’s human culture that builds in so much variation in behavior. I don’t know, but you can count on one thing – if I ever encounter a bunch of bull sharks, I’m exiting the water immediately.

Is Man Inherently Selfless?

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Scientific American is putting out a new quarterly magazine called Scientific American MIND. I picked up what they’re calling the premier issue (although there are letters to the editor regarding the previous one – go figure) and found an interesting article on a topic I’ve written about before. That topic is altruism. My thesis, the one I’ve gotten from evolutionary psychologists, has been that altruism doesn’t really exist, that seemingly benevolent actions are really just selfish acts with less obvious payoffs than usual. The article, entitled “The Samaritan Paradox,” argues that this thesis may be flawed. The authors, Ernst Fehr (an economist from the University of Zurich) and Suzann-Viola Renninger (a journalist educated in biology and philosophy, also in Zurich) put forth the notion that humans may indeed be endowed with genes for selflessness and truly altruistic behavior. Hmm. As much fun as it might be to be debunk the prevailing scientific wisdom, I don’t think these two are up to it.

Their argument is full of holes, which is understandable – them being Swiss and all. (Get it?  Swiss cheese…) It rests on what they deem to be the perennially intractable problem with the selfish gene theory – the presence of people who give and give with no hope of ever getting – people like Mother Theresa and volunteers who rush to the aid of perfect strangers after natural disasters. They write,

Such sacrifice does not follow the rules of evolutionary biology. If the immediate family does not profit and if neither reciprocal aid nor aid aimed at improving reputation promise future advantage, then selflessness gains nothing. Worse, it is costly in terms of resources, health, or money. By this logic, there really should not be any good Samaritans. Yet they clearly exist.

Well, I guess that settles it. Sarcasm aside, I think this is a good example of how evolutionary theory gets contentious. These two authors have pitted themselves against the master himself, Richard Dawkins, in suggesting that his elegantly simple theory may be overblown. The problem is that they cannot see the forest for the trees. Instead of considering the simple (and obvious, at least to me) solution, they run off on a long tangent about “punishment” games. Fehr and Renninger attempt to prove the exception to the selfishness disguised as altruism concept by citing games which show that “many people – even when facing high monetary stakes – are willing to penalize others at a cost to themselves to prevent unfair outcomes or to sanction bad behavior.”  This proves nothing.

In my mind, it is obvious why we see selfless acts that clearly have no payoff. It’s the caveman mind in a modern world problem. We can’t forget that our emotions evolved to motivate us to do things that would see to our survival. As I’ve mentioned before, sympathy has been referred to as nature’s bargain hunter. It works like this: a caveman walking along stumbles on a guy who’s down on his luck and hungry. This caveman, all of sudden, starts to feel this twinge of emotion that is discomforting. Looking for some way to assuage his tortured mind, he offers some meat to the hard-luck character. Voila – he feels better. The consequence? He gets back more meat than he gave at some point down the road, or he has a new ally in the dangerous game of making it to the next day. All other things being equal, the caveman with this emotional proclivity has a better chance of surviving than the caveman who ignores the guy in trouble – he gets a large return on a small, insignificant investment. But, though we have the same genes, we are not cavemen.

The crumbling of the false hope that mankind is at his core benevolent hinges on the idea that our minds, and therefore our emotions, were designed for an environment that no longer exists. This explains why they should be going haywire, so to speak, in modern times. In caveman days, life was not as anonymous as it is today. In a tight knit social environment, bargain-hunting emotions flourished because they led to actions that benefited the individuals that had them. In this world, however, it isn’t inconceivable that those emotions (since they are today what they were back then) could lead to acts that would result in no benefit whatsoever. Emotions are powerful, and sometimes we humans do whatever they command – like running into a burning building to save someone we don’t know, dying in the process. In my view, it’s more likely that selfless acts are indicators of miscalculating anachronistic selfish motives than they are of some inherent selflessness in mankind. Given the countless other ways our ancient emotions steer us wrong, this just makes the most sense. The good news is, however, that these ill-fated emotional tendencies need not be attenuated.

Just as love is not achieving its original aim – getting us to pump out as many offspring as possible – neither is sympathy. But far from being cause for alarm, this is cause for celebration, for it means that we are not doomed to operate as robots blindly following our emotions, as our cave-dwelling ancestors were. We can, instead, harness them for our own enjoyment of life, clinging to the ones that make us happy and discarding the ones that weigh us down – we need only understand them. Furthermore, considering that the prevailing theme throughout the history of mankind has been the struggle for power between the haves and the have-nots, is it not reasonable to conclude that we are naturally selfish, but that a few, the enlightened, have consistently raised the bar of compassion in human society? So to Fehr and Renninger I say, nice try, but you’re fired.

Another from the Mailbag – What Emotions Do We Keep?

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Got an email from Drew that also warrants posting.

i’ve been perusing your archives and i must say that i enjoy reading, and agree with, virtually every point you’ve made. personal responsibility, something which has obviously gone the way of the dodo, if it ever found homes in the minds of the masses in the first place, appears to be both a theme of your work and a complaint i regularly voice to anyone who will listen. that being said, i was reminded of bishop butler, if memory serves correctly, who believed that logical precision should be held above the interpersonal relationship (to be fair, i’m grossly over paraphrasing butler), as i was reading your posts. i read an essay he wrote back in school concerning the fact that he would rather sacrifice his mother, if she had committed some crime, than sacrifice his ethical underpinnings and logical rigor. the interesting thing about being human is the process of taming the oft-volatile mix of reason/emotive impulse. were we cold, calculating robots, though the world’s current problems resulting from the caveman mentalities that we cannot seem to shake from society at large would probably be solved, what minds would be around to care? to get to my point, as you often allude to the more fundamental point that anything done ought to be to secure as much time for meaningful interpersonal relationships as possible, in the form of the offhand remarks concerning your wife and child, my question to you, and the answer to which you might want to consider putting up on the site or in some book you’re working on, is what of the caveman mind ought remain and be encouraged to flourish? thanks for taking the time to post on the site. it’s always nice to know that others share the same passion for the belief that virtually anyone can become the master of one’s own destiny, and that it requires little more than a willingness to take responsibility for one’s actions and the direction of one’s more enlightened mental development.

Despite the fact that Drew went to the TS Eliot School of Writing Style, he poses a great question. Let me rephrase it. If the caveman mind causes so many problems, what, if anything, should we leave intact? I write about this a bit in my book but the basic answer is the love parts. The evidence seems to suggest that love evolved just like all other emotions – to get us to do things that made us more likely to reproduce. However, in my view, it’s the very best thing about life. Who cares why we’re lucky enough to experience it. That’s the point, really.

We, as humans, come to the show with hundreds of thousands of years of genetic baggage. The survival skills of our species have proven so superior that survival is not a concern for most of us, at least on this side of the world. We are now to the point where we have access to heretofore unimagined areas of solution space, and we have the tools to explore them. We are finding that our species is hooked on status like crack. We are finding that our species is obsessed with physical appearance. We are finding that the human mind is a devoted tabulator of favors done and favors owed. Most importantly, we are finding that we have the power to control what goes through our minds and to what extent we act on the emotions that were designed to motivate us.

But love is tricky. Bertrand Russell’s musings on love are well worth reading. His basic idea is that love without mutual respect and admiration is not worth having in most cases (at least in terms of romantic love). That means love itself isn’t enough. So, while I think we should hold on to love, I think we should be deliberate about who we allow ourselves to love and be loved by. But, if we get it right, I think we are well-served if we let our love run wild. This, I believe, will never steer us wrong.

Aside from love, I think it’s important to recognize that our emotions are our primary motivators. I remember a drunken argument I had with a Star Trek fan who tried to tell me that Vulcans use reason entirely to motivate themselves. Always willing to entertain a silly argument, I kept asking why one would build a space ship or educate a child. The answer was always, “to better this or that.” But for what? If you have no emotions, how do you know that it is better for children to live than die? If you have no emotions, why would you ever get off the couch? The point is that I don’t think we should be talking about doing away with our emotions. I’m talking about understanding them so that we can harness them rather than be victimized by them.

For example, it is very clear from history that competition and accountability bring out the very best in mankind. But why? Wanting to win in competition obviously has its roots in the quest for status. Accountability, to a lesser extent, is the same thing – public awareness of deficiency is always to be avoided in the caveman mind. So, we should hope to embrace our competitive side. This is how we improve ourselves. The key is to make sure that we don’t tie our self-opinions to how we do in contests – even if we’re Tiger Woods or Lance Armstong.

I’m an amateur cyclist – so amateur that I can’t finish in the pack of a Cat 5 race (for you cyclists out there). But I love it and I try every year to get better. I put myself in situations where I have to compete – sometimes in races; sometimes just to the top of a hill or to end of a street, but I’m competing. No matter whether I win or lose, however, I always go home feeling the same about myself. I am who I am, and nothing I did on my bike today changes that. It’s what I think of as a healthy disconnect between ancient emotions and modern self-esteem.

At the end of the day, our emotions can help us along or they can do us in. One thing is for certain – they’re with us for the long haul. We’d best get to know them to make the best of the time we have. Thanks Drew. PS – Get yourself a shift key. They’re cheap.

A Tribute to Solution Space

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There’s concept in science known as solution space, and it colors my entire perspective. Solution space refers to the sum total of all possible solutions to a problem or question. For example, if you’re asked in which month Arbor Day falls, your solution space is a list of the twelve months of the year. The thing about solution space is that most problems have a massive number of possible solutions. One, or even a few, may be right, but most are absolutely wrong.

There’s more. Solutions that are wrong but not very wrong are often located closer in space to the right solution than solutions that are very wrong. So, since Arbor Day is usually the last Friday in April (I had to look it up, believe me), March is closer, in solution space, than February, which is closer than December. The idea is to kind of visualize an expanse of space and to think of the solution as being located in some tiny locale therein. In this case, our solution space is two-dimensional. But in most cases, when you factor in thousands of variables at work at any given time, the space expands in all directions.

I have found the use of the solution space concept very valuable over the years. For one thing, it keeps me very far from ever proclaiming certainty. Regardless of what we’re trying to explain, there’s a solution space for it and, very importantly, our imaginations play a large role in what areas of solution space we explore. We generally start where we’ve been before and extrapolate from there. Herein lies the wisdom of solution space. The moment we think we’ve thought of everything, we need only remind ourselves that solution space is gigantic and that the odds are very good that we’re missing A LOT. It’s humbling and produces a tendency to keep digging, which bring me to the next benefit of solution space.

Solution space is a creativity enhancer. By understanding that our current way of explaining things is limited to the insights gained from our previous experiences, each located in its own area of solution space, eventually we know where not to look. We’re forced to reject the familiar if our question remains unresolved. We have to find environments that stimulate our brains in new ways. As soon as we experience new things and new ideas, we begin to consider the permutations that surround them in solution space. It’s as if we’re instantly transported to a new area of space with all new possibilities. This is why people go to movies, and it’s also why a lot of people do drugs. Isn’t a big screen experience the ultimate cure for boredom with the familiar? And didn’t John Lennon and pals frequently refer to the mind expanding powers of whatever it was they were on? What the moviegoer and Lennon had in common was the desire to access some previously unaccessed areas of solution space. In looking for explanations for everything from meaning of life to the perfect melody line, the solution space jockey finds the thrill in the chase.

At some point in the internalization of solution space, we come to know that finding what we want may take a while. We develop tenacity to continue searching for solutions. Eventually, when we’ve run down one too many rat holes, it dawns that the most important solution space is the one related to what makes for a worthwhile question. It becomes instantly apparent that the good ones are daunting, where many have tried and all have failed, where the space of possibilities is enormous. But you have to pay your dues and the big questions aren’t big for nothing.

Getting a crack at the biggest expanses of solution space requires years of training. One must learn to tell the difference between a correct and incorrect solution – between truth and fiction, at the end of the day. The base of this skill is the commitment to the notion that possibilities may only be proven wrong, never right. The only thing to do is disprove as many as possible and then evaluate the field that remains. Based upon a certain set of rules, a solution may or may not be chosen as the preferred solution. And preferred solutions are only allowed if they are accompanied by an admission of uncertainty (solution space is big, even for simple things).

The rules that determine if we can even prefer a solution are the same rules that we use to determine if a solution is true or false. These are the rules of logic. Once they are mastered, we must use them to acquire as much knowledge as we can – about a wide array of subjects. The more we learn, the more difficult the questions we can pursue effectively. This is pretty much where I am these days.

I’m on a mission to learn as much as I can about this world. This blog, I hope, will help me do that. I am constantly pondering the role of our genes in our ability to understand our experiences. So I’ll throw out what I’ve encountered in my jaunts through solution space in the hopes that readers might help in the search. And if I stray into politics too much, well I can’t help it – the drama’s irresistible.

Sympathy – Mother Nature’s Bargain Hunter

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The concept of status hierarchies gets a lot of play here, but there’s another evolutionary biology concept that is worth a mention. That is the notion of reciprocal altruism. It’s no secret that the attribute that most accounts for the success of Homo sapiens over other hominid species is the ability to cooperate. While some other upright, hairless apes were definitely stronger and more fierce, in the end, it did not matter. What kept humans from extinction was their tendency to band together and do as a group what individuals simply could not. But this begs a question: what does it take to cooperate?

The first thing it takes is trust. When the stakes are life and death, you need to know that your buddy will do his part when the time comes. Maybe you’re springing a trap on a lion, and you get to be the diversion. If your pal doesn’t come through at the right time, there’s a good chance you’ll end up getting your skull crushed by the lion’s massive jaws. So, cooperation requires trust, and the best way to build trust is to build a credit history, so to speak.

In caveman days, humans did favors for one another, and they kept track of who reciprocated. (Thus, we see the emergence of the first accountants. It wasn’t double-entry, to be sure, but hey, they were cavemen.) One who consistently repaid favors built up a good reputation, or credit history, which could be leveraged when needed. It is fascinating to consider that somehow Mother Nature stumbled on the genetics that prompted humans to band together like this, but she did, and it worked…like gangbusters. Things, however, get interesting when you consider that not all favors are equal.

If I have been starving for days and a guy tosses me a scrap of meat, I am profoundly indebted to him. In fact, I’ll gladly give him five times what he give me as soon as I can procure it. (Thus we see the emergence of the character, Whimpy, from Popeye – “I’ll gladly pay you Tuesday for a hamburger today.” Isn’t evolution enlightening?) This is the non-zero sum concept – one man’s famine is another man’s feast. The question is this – why would a guy, a caveman living a high stakes game of evolutionary musical chairs, give me a scrap of meat? I mean, I’m already down on my luck. Though I may intend to give him five times what he gave me, who’s to say I can come up with it? Maybe it’s sympathy.
Was the guy who gave me food being benevolent or selfish? Hard to say. It would seem that giving me a small scrap of meat, the equivalent of giving a handful of change to a homeless person, is a losing proposition. There’s little likelihood that there will be any return on the investment. But remember, the scrap of meat means very little to one who has plenty, so giving it away costs next to nothing. If I repay him, however, he’s gained 500% on his pittance of an investment. That’s pretty solid. What if Mother Nature programmed humans to do this kind of calculation automatically? There are many evolutionary psychologists who believe she did. Sympathy, so says one of the originators of the field, Robert Trivers, is nothing more than bargain hunting at the emotional level.

Consider the idea that every favor you do amounts to an investment in your resources. In a cooperative arrangement, you expect to get a fair return on your investment. Usually, you get back what you put in, though it may be in a different form. But sometimes, sometimes you have the chance to get back a lot more than you put in. You get to make a major profit. This is what happens in non-zero sum situations like the one mentioned earlier. So, suppose natural selection stumbled upon some combination of genes that produces a heart-wrenching response to sad situations where the individual feeling those emotions can make a small investment and potentially expect a generous return? Would that individual not enjoy a bit of an advantage in the limited resources world of cavemen? So long as he came out positive in the long-run (that is, he won more than he lost), he certainly would. There are a couple of points to make here.

The first is that we need to understand that our emotions evolved to get us to do things that are in our best interest from a survival perspective. We fall in love so we can reproduce. We get angry to avoid getting screwed over. We get jealous (at least males do) to avoid raising someone else’s child. And we feel sympathy to alert us to opportunities to get back more than we put in. Of course, I know that many folks recoil in horror at the thought of such a despicable heritage for our gentlest touches. But their resistance changes nothing, and it’s more important to know who we are and why we think and feel the way we do than it is to continue to indulge every fantasy we have about our special place in the universe.

That brings me to my second point. Though our emotions may be somewhat hard-wired, understanding them is the first step in mastering them, and that, my friends, is the grail. I’m not about to say that we can (or should) become Spock from Star Trek. However, one thing is for sure, some emotions do more harm than good. Knowing where they come from and when we can expect them to arise and take over is the key to keeping ourselves on an even keel. I can’t go into all the details of this here (It took me two years to write a book about it), but I can say this – a great deal of the unhappiness that is experienced in this world is the result of our caveman emotions grappling with our immensely prosperous world.
So, the next time you feel sorry for the homeless guy in the street, remember that it’s your genes looking to get a dollar for the quarter in your pocket. Ask yourself, by giving this guy a quarter, am I really helping him or am I making myself feel good? Then decide, rationally, whether or not to give it to him. I care less about what you decide than about how you decide. Get it?