Wednesday, April 11, 2007

An inconvenient fact

Browsing YouTube (whose slogan should be changed without delay to "Just broadcast it") I came across an ambitious attempt by one Danish economist to solve the "big problems of the world" in the most immediately beneficial order of priority.

Listen to what he has to say before I rip it apart piece by piece...

I know what you're thinking. Blue T-shirt?? Where's the grey hair and grey suit??? Surely he isn't a real economist, is he?!? Well, if he talks like one, the chances are, he is one. And he seems to have some older, greyer friends, which always helps.


The ideal that he and every other economist aims to achieve is a system that ensures the self-motivated actions of each individual be consistent with the interests of everyone else. A good example of this would be to charge customers for plastic bags at the supermarket so that they have an incentive to re-use old ones thereby helping them save money AND the environment.

Of course, it's easier to achieve this ideal scenario on a small scale. But when you begin to try and solve 'bigger' problems you run into obstacles that ultimately prove practically impossible to overcome.

To see this you need simply to ask: why hasn't what he suggests been done already? The answer lies in the different interests of the various groups involved.

Basically, the priorities of those with the money and resources to solve the big problems of the world are very different to those without it. In other words, rich countries want to solve their problems first.

This isn't as inappropriate as it sounds. After all, rich countries can cause far bigger problems than poorer ones who currently suffer with diseases that are relatively easy to contain. While you can limit the spread of disease, you can't limit the spread of global warming or the collapse of the global financial system.

This is why the richest nations in the world poor billions of dollars each year into trying to solve their own problems.


While it is useful to prioritise problems (or solutions) in terms of their largest short-term gain, this doesn't take full account of the potential short- (and long-) term cost of leaving other problems unsolved.

In principle it makes sense to solve the problems of poorer countries first but in practise we live in a world where solving one problem literally creates another.

Ultimately, all we can do is try and solve as many problems as possible given the resources we have available. Anything else would be aiming for the ideal and living with something far worse than it otherwise would have been.

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