The extreme efficiency of environmental regulation—and the extreme inefficiency of war

Apr 8 JDN 2458217

Insofar as there has been any coherent policy strategy for the Trump administration, it has largely involved three things:

  1. Increase investment in military, incarceration, and immigration enforcement
  2. Redistribute wealth from the poor and middle class to the rich
  3. Remove regulations that affect business, particularly environmental regulations

The human cost of such a policy strategy is difficult to overstate. Literally millions of people will die around the world if such policies continue. This is almost the exact opposite of what our government should be doing.

This is because military is one of the most wasteful and destructive forms of government investment, while environmental regulation is one of the most efficient and beneficial. The magnitude of these differences is staggering.

First of all, it is not clear that the majority of US military spending provides any marginal benefit. It could quite literally be zero. The US spends more on military than the next ten countries combined.

I think it’s quite reasonable to say that the additional defense benefit becomes negligible once you exceed the sum of spending from all plausible enemies. China, Russia, and Saudi Arabia together add up to about $350 billion per year. Current US spending is $610 billion per year. (And this calculation, by the way, requires them all to band together, while simultaneously all our NATO allies completely abandon us.) That means we could probably cut $260 billion per year without losing anything.

What about the remaining $350 billion? I could be extremely generous here, and assume that nuclear weapons, alliances, economic ties, and diplomacy all have absolutely no effect, so that without our military spending we would be invaded and immediately lose, and that if we did lose a war with China or Russia it would be utterly catastrophic and result in the deaths of 10% of the US population. Since in this hypothetical scenario we are only preventing the war by the barest margin, each year of spending only adds 1 year to the lives of the war’s potential victims. That means we are paying some $350 billion per year to add 1 year to the lives of 32 million people. That is a cost of about $11,000 per QALY. If it really is saving us from being invaded, that doesn’t sound all that unreasonable. And indeed, I don’t favor eliminating all military spending.

Of course, the marginal benefit of additional spending is still negligible—and UN peacekeeping is about twice as cost-effective as US military action, even if we had to foot the entire bill ourselves.

Alternatively, I could consider only the actual, documented results of our recent military action, which has resulted in over 280,000 deaths in Iraq and 110,000 in Afghanistan, all for little or no apparent gain. Life expectancy in these countries is about 70 in Iraq and 60 in Afghanistan. Quality of life there is pretty awful, but people are also greatly harmed by war without actually dying in it, so I think a fair conversion factor is about 60 QALY per death. That’s a loss of 23.4 MQALY. The cost of the Iraq War was about $1.1 trillion, while the cost of the Afghanistan War was about a further $1.1 trillion. This means that we paid $94,000 per lost QALY. If this is right, we paid enormous amounts to destroy lives and accomplished nothing at all.

Somewhere in between, we could assume that cutting the military budget greatly would result in the US being harmed in a manner similar to World War 2, which killed about 500,000 Americans. Paying $350 billion per year to gain 500,000 QALY per year is a price of $700,000 per QALY. I think this is about right; we are getting some benefit, but we are spending an enormous amount to get it.

Now let’s compare that to the cost-effectiveness of environmental regulation.

Since 1990, the total cost of implementing the regulations in the Clean Air Act was about $65 billion. That’s over 28 years, so less than $2.5 billion per year. Compare that to the $610 billion per year we spend on the military.

Yet the Clean Air Act saves over 160,000 lives every single year. And these aren’t lives extended one more year as they were in the hypothetical scenario where we are just barely preventing a catastrophic war; most of these people are old, but go on to live another 20 years or more. That means we are gaining 3.2 MQALY for a price of $2.5 billion. This is a price of only $800 per QALY.

From 1970 to 1990, the Clean Air Act cost more to implement: about $520 billion (so, you know, less than one year of military spending). But its estimated benefit was to save over 180,000 lives per year, and its estimated economic benefit was $22 trillion.

Look at those figures again, please. Even under very pessimistic assumptions where we would be on the verge of war if not for our enormous spending, we’re spending at least $11,000 and probably more like $700,000 on the military for each QALY gained. But environmental regulation only costs us about $800 per QALY. That’s a factor of at least 14 and more likely 1000. Environmental regulation is probably about one thousand times as cost-effective as military spending.

And I haven’t even included the fact that there is a direct substitution here: Climate change is predicted to trigger thousands if not millions of deaths due to military conflict. Even if national security were literally the only thing we cared about, it would probably still be more cost-effective to invest in carbon emission reduction rather than building yet another aircraft carrier. And if, like me, you think that a child who dies from asthma is just as important as one who gets bombed by China, then the cost-benefit analysis is absolutely overwhelming; every $60,000 spent on war instead of environmental protection is a statistical murder.

This is not even particularly controversial among economists. There is disagreement about specific environmental regulations, but the general benefits of fighting climate change and keeping air and water clean are universally acknowledged. There is disagreement about exactly how much military spending is necessary, but you’d be hard-pressed to find an economist who doesn’t think we could cut our military substantially with little or no risk to security.

The challenges of a global basic income

JDN 2457404

In the previous post I gave you the good news. Now for the bad news.

So we are hoping to implement a basic income of $3,000 per person per year worldwide, eliminating poverty once and for all.

There is no global government to implement this system. There is no global income tax to be collected or refunded. The United Nations and the World Bank, for all the good work that they do, are nowhere near powerful enough (or well-funded enough) to accomplish this feat.

Worse, the people we need to help the most, not coincidentally, live in the countries that are worst-managed. They are surrounded not only by squalor, but also by corruption, war, ethnic tension. Most of the people are underfed, uneducated, and dying from diseases such as malaria and schistomoniasis that we could treat in a day for pocket change. Their infrastructure is either crumbling or nonexistent. Their water is unsafe to drink. And worst of all, many of their governments don’t care. Tyrants like Robert Mugabe, Kim Jong-un, King Salman (of our lovely ally Saudi Arabia), and Isayas Afewerki care nothing for the interests of the people they rule, and are interested only in maximizing their own wealth and power. If we arranged to provide grants to these countries in an amount sufficient to provide the basic income, there’s no reason to think they’d actually provide it; they’d simply deposit the check in their own personal bank accounts, and use it to buy ever more extravagant mansions or build ever greater monuments to themselves. They really do seem to follow a utility function based entirely upon their own consumption; witness your neoclassical rational agent and despair.

There are ways for international institutions and non-governmental organizations to intervene to help people in these countries, and indeed many have done so to considerable effect. As bad as things are, they are much better than they used to be, and they promise to be even better tomorrow. But there is only so much they can do without the force of law at their backs, without the power to tax incomes and print currency.

We will therefore need a new kind of institutional framework, if not a true world government then something very much like it. Establishing this new government will not be easy, and worst of all I see no way to do it other than military force. Tyrants will not give up their power willingly; it will need to be taken from them. We will need to capture and imprison tyrants like Robert Mugabe and Kim Jong Un in the same way that we once did to mob bosses like John Dillinger and Al Capone, for ultimately a tyrant is nothing but a mob boss with an army.Unless we can find some way to target them precisely and smoothly replace their regimes with democracies, this will mean nothing less than war, and it could kill thousands, even millions of people—but millions of people are already dying, and will continue to die as long as we leave these men in power. Sanctions might help (though sanctions kill people too), and perhaps a few can be persuaded to step down, but the rest must be overthrown, by some combination of local revolutions and international military coalitions. The best model I’ve seen for how this might be pulled off is Libya, where Qaddafi was at last removed by an international military force supporting a local revolution—but even Libya is not exactly sunshine and rainbows right now. One of the first things we need to do is seriously plan a strategy for removing repressive dictators with a minimum of collateral damage.

To many, I suspect this sounds like imperialism, colonialism redux. Didn’t so many imperialistic powers say that they were doing it to help the local population? Yes, they did; and one of the facts that we must face up to is that it was occasionally true. Or if helping the local population was not their primary motivation, it was nonetheless a consequence. Countries colonized by the British Empire in particular are now the most prosperous, free nations in the world: The United States, Canada, Australia. South Africa and India might seem like exceptions (GDP PPP per capita of $12,400 and $5,500 respectively) but they really aren’t, compared to what they were before—or even compared to what is next to them today: Angola has a per capita GDP PPP of $7,546 while Bangladesh has only $2,991. Zimbabwe is arguably an exception (per capita GDP PPP of $1,773), but their total economic collapse occurred after the British left. To include Zimbabwe in this basic income program would literally triple the income of most of their population. But to do that, we must first get through Robert Mugabe.

Furthermore, I believe that we can avoid many of the mistakes of the past. We don’t have to do exactly the same thing that countries used to do when they invaded each other and toppled governments. Of course we should not enslave, subjugate, or murder the local population—one would hope that would go without saying, but history shows it doesn’t. We also shouldn’t annex the territory and claim it as our own, nor should we set up puppet governments that are only democratic as long as it serves our interests. (And make no mistake, we have done this, all too recently.) The goal must really be to help the people of countries like Zimbabwe and Eritrea establish their own liberal democracy, including the right to make policies we don’t like—or even policies we think are terrible ideas. If we can do so without war, of course we should. But right now what is usually called “pacifism” leaves millions of people to starve while we do nothing.

The argument that we have previously supported (or even continue to support, ahem, Saudi Arabia) many of these tyrants is sort of beside the point. Yes, that is clearly true; and yes, that is clearly terrible. But do you think that if we simply leave the situation alone they’ll go away? We should never have propped up Saddam Hussein or supported the mujihadeen who became the Taliban; and yes, I do think we could have known that at the time. But once they are there, what do you propose to do now? Wait for them to die? Hope they collapse on their own? Give our #thoughtsandprayers to revolutionaries? When asked what you think we should do, “We shouldn’t have done X” is not a valid response.

Imagine there is a mob boss who had kidnapped several families and is holding them in a warehouse. Suppose that at some point the police supported the mob boss in some way; in a deal to undermine a worse rival mafia family, they looked the other way on some things he did, or even gave him money that he used to strengthen his mob. (With actual police, the former is questionable, but actually done all the time; the latter would be definitely illegal. In the international analogy, both are ubiquitous.) Even suppose that the families who were kidnapped were previously from a part of town that the police would regularly shake down for petty crimes and incessant stop-and-frisks. The police definitely have a lot to answer for in all this; their crimes should not be forgotten. But how does it follow in any way that the police should not intervene to rescue the families from the warehouse? Suppose we even know that the warehouse is heavily guarded, and the resulting firefight may kill some of the hostages we are hoping to save. This gives us reason to negotiate, or to find the swiftest, most precise means to deploy the SWAT teams; but does it give us reason to do nothing?

Once again I think Al Capone is the proper analogy; when the FBI captured Al Capone, they didn’t bomb Chicago to the ground, nor did they attempt to enslave the population of Illinois. They thought of themselves as targeting one man and his lieutenants and re-establishing order and civil government to a free people; that is what we must do in Eritrea and Zimbabwe. (In response to all this, no doubt someone will say: “You just want the US to be the world’s police.” Well, no, I want an international coalition; but yes, given our military and economic hegemony, the US will take a very important role. Above all, yes, I want the world to have police. Why don’t you?)

For everything we did wrong in the recent wars in Afghanistan and Iraq, I think we actually did this part right: Afghanistan’s GDP PPP per capita has risen over 70% since 2002, and Iraq’s is now 17% higher than its pre-war peak. It’s a bit early to say whether we have really established stable liberal democracies there, and the Iraq War surely contributed to the rise of Daesh; but when the previous condition was the Taliban and Saddam Hussein it’s hard not to feel that things are at least somewhat improving. In a generation or two maybe we really will say “Iraq” in the same breath as “Korea” as one of the success stories of prosperous democracies set up after US wars. Or maybe it will all fall apart; it’s hard to say at this point.

So, we must find a way to topple the tyrants. Once that is done, we will need to funnel huge amounts of resources—at least one if not two orders of magnitude larger than our current level of foreign aid into building infrastructure, educating people, and establishing sound institutions. Our current “record high” foreign aid is less than 0.3% of world’s GDP. We have a model for this as well: It’s what we did in West Germany and Japan after WW2, as well as what we did in South Korea after the Korean War. It is not a coincidence that Germany soon regained its status as a world power while Japan and Korea were the first of the “Asian Tigers”, East Asian nations that rose up to join us at a First World standard of living.

Will all of this be expensive? Absolutely. By assuming $3,000 per person per year I am already figuring in an expenditure of $21 trillion per year, indefinitely. This would be the most expensive project upon which humanity has ever embarked. But it could also be the most important—an end to poverty, everywhere, forever. And we have that money, we’re simply using it for other things. At purchasing power parity the world spends over $100 trillion per year. Using 20% of the world’s income to eliminate poverty forever doesn’t seem like such a bad deal to me. (It’s not like it would disappear; it would be immediately spent back into the economy anyway. We might even see growth as a result.)

When dealing with events on this scale, it’s easy to get huge numbers that sound absurd. But even if we assumed that only the US, Europe, and China supported this program, it would only take 37% of our combined income—roughly what we currently spend on housing.

Whenever people complain, “We spend billions of dollars a year on aid, and we haven’t solved world hunger!” the proper answer is, “That’s right; we should be spending trillions.”

9/11, 14 years on—and where are our civil liberties?

JDN 2457278 (09/11/2015) EDT 20:53

Today is the 14th anniversary of the 9/11 attacks. A lot has changed since then—yet it’s quite remarkable what hasn’t. In particular, we still don’t have our civil liberties back.

In our immediate panicked response to the attacks, the United States passed almost unanimously the USA PATRIOT ACT, giving unprecedented power to our government in surveillance, searches, and even arrests and detentions. Most of those powers have been renewed repeatedly and remain in effect; the only major change has been a slight weakening of the NSA’s authority to use mass dragnet surveillance on Internet traffic and phone metadata. And this change in turn was almost certainly only made because of Edward Snowden, who is still forced to live in Russia for fear of being executed if he returns to the US. That is, the man most responsible for the only significant improvement in civil liberties in the United States in the last decade is living in Russia because he has been branded a traitor. No, the traitors here are the over one hundred standing US Congress members who voted for an act that is in explicit and direct violation of the Constitution. At the very least every one of them should be removed from office, and we as voters have the power to do that—so why haven’t we? In particular, why are Dan Lipinski and Steny Hoyer, both Democrats from non-southern states who voted every single time to extend provisions of the PATRIOT ACT, still in office? At least Carl Levin had the courtesy to resign after sponsoring the act allowing indefinite detention—I hope we would have voted him out anyway, since I’d much rather have a Republican (and all the absurd economic policy that entails) than someone who apparently doesn’t believe the Fourth and Sixth Amendments have any meaning at all.

We have become inured to this loss of liberty; it feels natural or inevitable to us. But these are not minor inconveniences; they are not small compromises. Giving our government the power to surveil, search, arrest, imprison, torture, and execute anyone they want at any time without the system of due process—and make no mistake, that is what the PATRIOT ACT and the indefinite detention law do—means giving away everything that separates us from tyranny. Bypassing the justice system and the rule of law means bypassing everything that America stands for.

So far, these laws have actually mostly been used against people reasonably suspected of terrorism, that much is true; but it’s also irrelevant. Democracy doesn’t mean you give the government extreme power and they uphold your trust and use it benevolently. Democracy means you don’t give them that power in the first place.

If there’s really sufficient evidence to support an arrest for terrorism, get a warrant. If you don’t have enough evidence for a warrant, you don’t have enough evidence for an arrest. If there’s really sufficient evidence to justify imprisoning someone for terrorism, get a jury to convict. If you don’t have enough evidence to convince a jury, guess what? You don’t have enough evidence to imprison them. These are not negotiable. They are not “political opinions” in any ordinary sense. The protection of due process is so fundamental to democracy that without it political opinions lose all meaning.

People talk about “Big Government” when we suggest increasing taxes on capital gains or expanding Medicare. No, that isn’t Big Government. Searching without warrants is Big Government. Imprisoning people without trial is Big Government. From all the decades of crying wolf in which any policy someone doesn’t like is accused of being “tyranny”, we seem to have lost the ability to recognize actual tyranny. I hope you understand the full force of my meaning when I say that the PATRIOT ACT is literally fascist. Fascism has come to America, and as predicted it was wrapped in the flag and carrying a cross.

In this sort of situation, a lot of people like to quote (or misquote) Benjamin Franklin:

“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

With the qualifiers “essential” and “temporary”, this quote seems right; but a lot of people forget them and quote him as saying:
“Those would give up liberty to purchase safety, deserve neither liberty nor safety.”

That’s clearly wrong. We do in fact give up liberty to purchase safety, and as well we should. We give up our liberty to purchase weapons-grade plutonium; we give up our liberty to drive at 220 mph. The question we need to be asking is: How much liberty are we giving up to gain how much safety?

Spoken like an economist, the question is not whether you will give up liberty to purchase safety—the question is at what price you’re willing to make the purchase. The price we’ve been paying in response to terrorism is far too high. Indeed, the price we are paying is tantamount to America itself.

As horrific as 9/11 was, it’s important to remember: It only killed 3,000 people.

This statement probably makes you uncomfortable; it may even offend you. How dare I say “only”?

I don’t mean to minimize the harm of those deaths. I don’t mean to minimize the suffering of people who lost friends, colleagues, parents, siblings, children. The death of any human being is the permanent destruction of something irreplaceable, a spark of life that can never be restored; it is always a tragedy and there is never any way to repay it.

But I think people are actually doing the opposite—they are ignoring or minimizing millions of other deaths because those deaths didn’t happen to be dramatic enough. A parent killed by a heart attack is just as lost as a parent who died in 9/11. A friend who died of brain cancer is just as gone as a friend who was killed in a terrorist attack. A child killed in a car accident is just as much a loss as a child killed by suicide bombers. If you really care about human suffering, I contend that you should care about all human suffering, not just the kind that makes the TV news.

Here is a list, from the CDC, of things that kill more Americans per month than terrorists have killed in the last three decades:

Heart disease: 50,900 per month

Cancer: 48,700 per month

Lung disease: 12,400 per month

Accidents: 10,800 per month

Stroke: 10,700 per month

Alzheimer’s: 7,000 per month

Diabetes: 6,300 per month

Influenza: 4,700 per month

Kidney failure: 3,900 per month

Terrorism deaths since 1985: 3,455
Yes, that’s right; influenza kills more Americans per month (on average; flu is seasonal, after all) than terrorism has killed in the last thirty years.
And for comparison, other violent deaths, not quite but almost as many per month as terrorism has killed in my entire life so far:
Suicide: 3,400 per month

Homicide: 1,300 per month

Now, with those figures in mind, I want you to ask yourself the following question: Would you be willing to give up basic, fundamental civil liberties in order to avoid any of these things?

Would you want the government to be able to arrest you and imprison you without trial for eating too many cheeseburgers, so as to reduce the risk of heart disease and stroke?

Would you want the government to monitor your phone calls and Internet traffic to make sure you don’t smoke, so as to avoid lung disease? Or to watch for signs of depression, to reduce the rate of suicide?

Would you want the government to be able to use targeted drone strikes, ordered directly by the President, pre-emptively against probable murderers (with a certain rate of collateral damage, of course), to reduce the rate of homicide?

I presume that the answer to all the above questions is “no”. Then now I have to ask you: Why are you willing to give up those same civil liberties to prevent a risk that is three hundred times smaller?

And then of course there’s the Iraq War, which killed 4,400 Americans and at least 100,000 civilians, and the Afghanistan War, which killed 3,400 allied soldiers and over 90,000 civilians.

In response to the horrific murder of 3,000 people, we sacrificed another 7,800 soldiers and killed another 190,000 innocent civilians. What exactly did that accomplish? What benefit did we get for such an enormous cost?

The people who sold us these deadly wars and draconian policies did so based on the threat that terrorism could somehow become vastly worse, involving the release of some unstoppable bioweapon or the detonation of a full-scale nuclear weapon, killing millions of people—but that has never happened, has never gotten close to happening, and would be thousands of times worse than the worst terrorist attacks that have ever actually happened.

If we’re worried about millions of people dying, it is far more likely that there would be a repeat of the 1918 influenza pandemic, or an accidental detonation of a nuclear weapon, or a flashpoint event with Russia or China triggering World War III; it’s probably more likely that there would be an asteroid impact large enough to kill a million people than there would be a terrorist attack large enough to do the same.

As it is, heart disease is already killing millions of people—about a million every two years—and we aren’t so panicked about that as to give up civil liberties. Elsewhere in the world, malnutrition kills over 3 million children per year, essentially all of it due to extreme poverty, which we could eliminate by spending between a quarter ($150 billion) and a half ($300 billion) of our current military budget ($600 billion); but we haven’t even done that even though it would require no loss of civil liberties at all.

Why is terrorism different? In short, the tribal paradigm.

There are in fact downsides to not being infinite identical psychopaths, and this is one of them. An infinite identical psychopath would simply maximize their own probability of survival; but finite diverse tribalists such as we underreact to some threats (such as heart disease) and overreact to others (such as terrorism). We’ll do almost anything to stop the latter—and almost nothing to stop the former.

Terrorists are perceived as a threat not just to our individual survival like heart disease or stroke, but a threat to our tribe from another tribe. This triggers a deep, instinctual sense of panic and hatred that makes us willing to ignore principles we would otherwise uphold and commit acts of violence we would otherwise find unimaginable.

Indeed, it’s precisely that instinct which motivates the terrorists in the first place. From their perspective, we are the other tribe that threatens their tribe, and they are therefore willing to stop at nothing until we are destroyed.

In a fundamental way, when we respond to terrorism in this way we do not defeat them—we become them.
If you ask people who support the PATRIOT ACT, it’s very clear that they don’t see themselves as imposing upon the civil liberties of Americans. Instead, they see themselves as protecting Americans (our tribe), and they think the impositions upon civil liberties will only harm those who don’t count as Americans (other tribes). This is a pretty bizarre notion if you think about it carefully—if you don’t need a warrant or probable cause to imprison people, then what stops you from imprisoning people who aren’t terrorists?—but people don’t think about it carefully. They act on emotion, on instinct.

The odds of terrorists actually destroying America by killing people are basically negligible. Even the most deadly terrorist attack in recorded history—9/11—killed fewer Americans than die every month from diabetes, or every week from heart disease. Even the most extreme attacks feared (which are extremely unlikely) wouldn’t be any worse than World War II, which of course we won.

But the odds of terrorists destroying America by making us give up the rights and freedoms that define us as a nation? That’s well underway.