Economist
E.F. Schumacher talks about two types of problems from a conceptual level. One
is “convergent” problem where more one iterates, chances of arriving at an
appropriate solution increases and the other “divergent” problem where more
effort only increases the options and differences. He cites bicycle wheel
design as an example of convergent and how to teach children as an example of
divergent which has been in debate for the last 100 years if not more.
Clearly, this
book's author has embarked on a pesky divergent problem. He discusses the moral
limits of the markets. We all intuitively know that there are limits to what
money can buy. But when you read this kind of work, you worry that the number
of such things may be minuscule. I am tempted to agree briefly with Malcolm
Forbes, who famously said, “those who say, money can’t buy happiness are
shopping in the wrong places”.
The strength
of this book comes from the examples. They are well thought out and convincing
for me. However, in the end, author does not provide a final verdict and leaves
it all to us. He leaves a philosophical framework for us to ponder. Let us look
at some examples.
Black Rhinos
and Walrus Hunting: Black Rhinos were on the brink of extinction. From 20,000
it fell to 600. Then market solution appears in the form of eco-tourism with a
twist – Pay $150K for hunting one Rhino. Good news is that, the money brought
back Rhinos from the brink. Still to me, it appeared like a Faustian bargain
because it is depressing to kill them for a payment. Author concurs saying, it
is like saving the ancient redwood forests by allowing the wealthy donors the
right to carve their names/initials in the same trees. Even more sober story
for Atlantic Walrus. They are valued for meat, skin, and oil. They are completely
defenseless as well as harmless. In 1928, Canadian government banned Walrus
hunting with an exception for aborigines Inuit group which has been depending
on it for the last few thousand years. By 1990, they approached Canadian government
with proposal to sell their rights to wealthy hunters and was given the
go-ahead. Inuit people now guide the killing for a fee of $6-$7K. Walrus move so slowly, hunters come very near
and shoot. Since Walrus hunting is banned hunters can’t even carry back anything
as memento. In terms of actual challenge it is next to nothing. As NY times
puts it “a long boat ride to shoot a large bean bag chair”. Author discusses
nuanced points about fine and fee. I thought, I knew the difference but I am
not so sure now.
There are
something people don’t do for money and when that aspect is brought in, things
take a different twist as in case of nuclear dump in Switzerland. 51% of
citizens in a Swiss village said they would OK the nuclear dump site because their
sense of civic duty outweighed safety concerns. Subsequently, when a sweetener
was added declaring that government would offer some financial compensation,
acceptance dropped to 25%. Then quantum of compensation was increased only to
learn that acceptance dropped even further. Remember the advertisement “There are something money can’t buy. For
everything else, there is a Master Card”. Looks like nuclear dump permission
is not Master card friendly!
Author
explains that there are two kinds of goods. The things like friends, Nobel
prizes that money can’t buy. Things like kidneys, Children which money can buy
but arguably shouldn’t. He confesses the distinction is less clear than it
appears. His main point is that, we have seamlessly digressed from market
economy to market society where almost everything is up for sale. Good grief
for Credit cards of the world. In the introduction he gives some stunning
examples. He also discusses the scary case of viaticals. His observation is when
fully driven by market, it breeds inequality, and hence market reasoning is
incomplete without moral reasoning.
Author talks
about insurance as one of the moot areas. His profound remarks are thus: “Life
insurance has always been two things in one. A pooling of risk for mutual
security and grim wager, a hedge against death. The two aspects always
co-existed as an uneasy combo. In the absence of moral and legal restraints,
the wagering aspect threatens to swamp the social purpose that justifies the
insurance in the first place. When the social purpose is lost or obscured,
fragile lines separating insurance, investments and gambling come undone”. To
get the full import of this one has to understand viaticals deeply.
He talks
about advertisement in police cars and other public utilities which are worth a
serious thought. I liked his view points on advertisements in schools /
educational institutions. I am also weary of such marketing spins inside such locations.
To quote him “Advertising encourages people to want things to satisfy desires.
Education encourages people to critically examine their desires and restrain or
elevate them. The purpose of advertisement is to recruit customers and purpose
of education is to cultivate citizens”. It reminds us of the paradox “liberty
and equality”. As we all know, when the liberty (freedom) goes unhindered,
albeit it appears to be a virtue, breeds inequality in the long run. Similarly,
if we focus too much on equality (again a virtue by itself), it will result in
too much of restriction or lack of freedom over the long run. Hence, the slogan Liberty-Equality-Fraternity, the 3rd
higher force which hopefully regulates the first two virtues for a healthy
balance.
I closed
this book saying to myself, toughest non-technical problems in this world are
not solved - they are merely grappled with. It is not without reason data base
guru Jim Gary said “May all your problems be technical”.
Thanks for
reading this far.
Regards
madhu
