Today’s Guardian reports on an exchange of letters between Salman Rushdie and John le Carre, from 1997, in which they disagree vehemently about the limits of free speech. At this point in his career Rushdie was in hiding from Islamic fundamentalists, and le Carre was in trouble for criticizing Israel – which of course put him in line for claims of anti-semitism, about which he was most outraged. Unfortunately, 10 years earlier he had apparently claimed that “Nobody has a god-given right to insult a great religion,” and Rushdie was apparently incensed that le Carre should suddenly be demanding victim status after the religious “thought police” turned on him.
The subsequent exchange – which the Guardian now reports both sides have declared they regret – is a hilarious example of how debates on freedom of expression were conducted before the existence of blogs. Apparently, they are conducted viciously through the medium of newspapers. But the letters themselves read like something straight out of a modern blog flame war – further proof, if any were needed, that the medium has not really changed the message or its tone.
Some of these exchanges are quite pretty, though. le Carre goes in heavy with his concerns about the girl in the mail room getting her hands blown off, and demands a less colonialist approach to the topic of freedom of expression (though thankfully he doesn’t apply this to Rushdie himself, just his admirers). Less colonialist? Since when is it colonialist to criticize the Iranian regime for putting a price on a writer’s head? Rushdie may be a self-canoniser, but a threat to the Iranian regime he is not. Were he some lunatic militarist with actual political power, pushing for the reoccupation or isolation of Iran, le Carre might have a point – but a religious critic?
In reply, Rushdie thanks le Carre for “refreshing our memories as to what a pompous ass he is” and adds that “‘ignorant’ and ‘semi-literate’ are dunces’ caps he has skilfully fitted on his own head.” Isn’t it just like reading an exchange on one of the better major bloggers’ sites, when they have one of their blog wars? Only all of it in the Guardian letter’s page.
I haven’t read Rushdie’s work, but I find it hard not to take his side on the matter. I’ve no doubt that le Carre’s experience of drawing the ire of the Jewish “thought police,” as Rushdie describes them, was much less frightening than Rushdie’s, but one would have hoped it would have given him a hint as to how hard it might be to be in the firing line, whether figuratively or literally. Whether you think his attack on Islam was warranted or not, and whether you think it deserves the ire of Muslims, the fatwa was an outrageous response and even if purely symbolic is still a Very Bad Thing. I would have thought one could have a nuanced debate about colonialism, revolutionary defensiveness, and the responsibilities of western authors, without ignoring the egregious nature of the response, or belittling Rushdie’s genuine difficulties after the fatwa was declared. And if I were Rushdie, I’d certainly be mighty wrathful with writers who failed to defend my rights.
All of which makes for some entertaining reading, 15 years after the fact, and reminds us that modern blogwars do not necessarily have a lower tone than public debate showed before the invention of this anonymous medium. I guess it just significantly increases the amount that gets said (and thus, by application of basic theorems, the number of debates that get Godwinned). In the case of your average blogger, this is probably not a net positive for the world – but had Rushdie and le Carre been blogging between 1985 and 2000, it would have been quite fascinating, I’m sure.
If only the internet had been invented sooner, we could have been given the pleasure of blogposts by such luminaries as Orwell, Rushdie, Abbie Hoffman … imagine the colour and light such blogs would bring to the medium. Imagine if Steinbeck had a blog during the Great Depression, or Dr. Seuss in the lead up to world war 2. I doubt it would have changed anything, but it would certainly have been great reading…
The Guardian has a short video featuring three British actors reading war poems. The first and last is Sean Bean reading Wilfred Owen’s Anthem for Doomed Youth and The Last Laugh. Wilfred Owen is one of my favourite poets but I’ve never heard him read professionally before. It’s quite moving, though I’m not sure what I think of the idea of actors reading war poems on remembrance day – the slickness and glamour of it is a bit offputting. Nonetheless, if you’re a fan of Boromir or just want to hear some sad poetry read by professionals, it’s worth a look.
Congratulations America! With the American electorate[1] having given a resounding endorsement[2] of the policies of the Revolutionary Islamic Socialist Party of Kenya, America will finally see a form of healthcare financing reform. Depending on who you read, this reform seems to be either an insane policy that will bankrupt America, or not much change. I think I speak in concert with 314,731,000 Americans when I declare that I’m no expert on American healthcare – let’s face it, a system that complex is hardly going to be comprehensible to mere mortals – but from my position of limited knowledge I’m inclined towards the latter view. But in health financing, not much change can mean a lot to the minority of the population who are most vulnerable to healthcare-related financial catastrophe, and so not much change is probably, in this case, a Very Good Thing. Just how good will become more apparent over the next few years, and I’m guessing that for health system researchers around the world Obama’s election victory is a huge boon, because it means they can watch what is pretty much the only largely private health financing system in the developed world being reformed from a radically different perspective to the standard vision of universal health cover.
Although reading conservative commentators one gets the impression that Obamacare is a massive socialist-fascist system of monolithic oppression, in reality it appears to be an attempt to impose careful, minimalist regulation on the system, to ensure that it maintains its character of essentially privatized healthcare insurers, but regulates it to improve efficiency and reduce inequality. The efficiency improvements are intended to reduce long-term growth in costs, and the inequality improvements to ensure that everyone gets coverage of some kind, regardless of ability to pay or pre-existing conditions. These latter improvements are intended to eliminate the problem of the uninsured without disrupting the essentially private nature of the marketplace for health insurance. Whether this will work or not is a big gamble, but in the long term it could have huge benefits economically and socially for ordinary Americans.
I’m struck by the extent to which the problem of healthcare-related financial catastrophe is researched in developing countries but left largely undescribed in the USA. I’m also struck by the ease with which developing nations like Indonesia, the Philippines, Thailand and other places have been able to introduce innovative financing schemes, while the USA has languished. So I thought while I’m taking a break from a busy work schedule, that I would consider an alternative to Obamacare based on a careful restructuring of the entire US insurance market, using the existing Medicare system as a base. I lack any in-depth knowledge about the American system, and so this post is entirely speculative, but it gives an opportunity to think about ways of gradually moving from a private to a public system, using primarily market means, and allowing the users of the system to determine the final mix of private and public insurers through their consumption decisions. Once again, it’s entirely and completely speculative, being done purely for fun, and comments demolishing it on all its particulars are welcomed, nay, encouraged.
First, though, a word about the flaws in the current Medicare system.
Does Medicare work?
The New England Journal of Medicine (NEJM) has been running a series of opinion pieces (and some research) on health policy reform for a while now, and on the week of Obama’s reelection it published a fascinating article describing the failings of Medicare. The key message of this article is that Medicare fails as both an insurance package and as a cost containment mechanism. I was shocked to discover that Medicare does not include a cap on costs, so although it is an insurance package it doesn’t stop beneficiaries’ out of pocket expenses from destroying their budget. Compare this with, for example, Japan’s universal insurance scheme, implemented in 1961, has a cap on personal expenses and has been responsible for restraining costs to below the OECD average of 9.6% (according to wikipedia[3]). Granted, other universal health coverage schemes are universal, so they have better risk sharing (Medicare is for the elderly), but still … the USA is the richest country in the world, you’d think sorting this out wouldn’t be soooo hard. According to the NEJM article, in 2009 15% of Medicare recipients faced payment of 5000 $US or more, when the maximum(?) income for pensioners in the USA is something like $15,000. In studies of financial catastrophe in developing nations, this sort of statistic is considered disastrous, though it should be noted that the stats in the article aren’t sufficient to identify rates of financial catastrophe[4]. The article then notes that because of the lack of a cap, Medicare recipients often pay for secondary insurance to pay the out-of-pocket expenses. This has the dual effect of increasing their insurance costs and, if they choose a good insurance package, encouraging unnecessary use of medical care, since a good secondary insurance package enables free healthcare usage and thus increases costs. The article also references a paper suggesting that half of America’s increase in healthcare costs in the last 40 years can be slated home to the growth of private health insurance (I haven’t read this reference and have no idea how good it is). The article’s recommendation is that the government should put a cap on medicare costs while simultaneously restricting the ability of insurance companies to cover Medicare’s out of pocket costs, and references many other reports that have suggested the same thing.
On the basis of that report, Medicare hardly seems to be a good starting point for health insurance reform, does it?
An alternative vision for Obamacare: extending Medicare
Given Obama’s approach to healthcare reform, it seems that a fundamental assumption of any alternative vision is that it should not radically alter current market structures. Obamacare appears to be, fundamentally, a suite of regulatory changes to the current marketplace. He hasn’t suggested, for example, nationalizing all existing insurers to form a single-payer government-run monolith. So, any alternative vision for Obamacare that is going to be consistent with Obama’s obvious preference for creeping incrementalism is going to need to use existing systems to achieve its goals. How can we do this? Let’s try building on Medicare.
The first step of the Faustian plan would be to put a cap on expenses under Medicare – looking at the tables in the NEJM, about $1500 seems like a good limit. Then, to achieve a gradualist change in the American healthcare system, Faustuscare would consist of a simple decision to allow anyone to enrol in Medicare. In Japan the cost of the single-payer insurance system varies by state, so Obama could implement a similar system: anyone can join Medicare, based on paying a rate that varies according to the population and its distribution in their state. This would make Faustuscare cheap in the most populous and youngest states (just as it is in Japan). The one condition on Medicare would be that it can’t ban people from joining on the basis of pre-existing conditions, and has no age-dependent pricing structure… or, if you want to be really brutal, the price a member pays is fixed by the age at which they join, not their current age.
The idea, of course, is to use the power of the government to tax rich idlers like Mitt Romney. Obama fixes the cost of joining Medicare at less than that of the popular big medical plans, and makes up the shortfall from general taxation. It’s almost certain that making Medicare available to people under 65 – even those with pre-existing conditions – is going to reduce overall risk, so he can afford to lower prices. Then, he offers companies a further concession – they can move employees to the new system at some reduced rate, provided that they cut half of the difference with their employees. With such a condition he is going to recruit lots of new members quickly, and everyone who gets recruited is going to essentially get a pay rise.
The plan here is obvious – use the power of general taxation to supplement a reasonably priced health insurance plan, with no health-related joining conditions, to undercut existing insurance companies. The new entrant to the insurance market already has everyone over 65 as a customer, and by introducing the (equality-improving) cap on payments, has caused a lot of those seniors to ditch their existing supplemental insurance. In order to compete with this new market entrant the existing companies are going to have to find a way to drop prices and do away with pre-existing-illness conditions. The result of this will be a massive, across-the-board efficiency gain. The likely survivors of the government’s entry to the market will be the HMOs, which are already ruthlessly efficient, comparatively cheap, and already offer reasonably good health outcomes. Obama can choose to restrain Medicare’s power to ensure that some insurers survive in a mixed market, or he can use the power of general taxation to force them all out of business, nationalizing them one by one as they fold. I would recommend the former, since the American health market is obviously built on competition between both providers and commissioners. Keeping Medicare in the market as the insurer of last resort will ensure that the other insurers lower their prices and/or offer a basic package that is competitive with Medicare, but they will still offer “bonus” packages that appeal to the rich or the health-obssessed.
I have a suspicion that much of this plan could be achieved through administrative rather than legislative changes. It can be sold as a partially free market solution to the health insurance problem, and I suspect a lot of big companies would jump on the chance to shift their insurance payments to such a system. I think the American system needs two forms of competition: competition at the bottom of the market, and plans that don’t discriminate on pre-existing conditions. Any such plan needs to be able to recruit low-risk people to balance its risk profile, and (probably) additionally need some form of subsidy. Medicare is the obvious vehicle, since it already exists, and offering it at reasonable cost to young people could potentially rapidly expand its coverage. Since it already is huge, further expansion of coverage would give it additional power to negotiate cost-cutting with providers – which would force other insurers to do the same.
America’s problem in reforming its health system gradually (rather than the crash-through or crash approach of the original NHS) is to find a way to manipulate free markets to be equitable. Obama appears to be taking the road of regulation, but the alternative is nationalisation by stealth, and Medicare offers the vehicle by which to do this. What do you think?
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fn1: Well, six swing states anyway
fn2: When results are measured to at least two decimal places
fn3: I really should be able to do better than this
fn4: I’ve not done a literature search but I have a strong suspicion that healthcare-related financial catastrophe – a very real phenomenon in the modern USA – is better-understood in developing nations than it is in the USA. What does this have to say about health services researchers attitudes towards the world?
Christianity’s fundamental promise is of eternal life, and the risk of refusing to accept God’s grace is generally accepted to be eternal damnation. While the truth of these statements is still subject to debate, there is little empirical evidence of the benefit of eternal life, and little research exploring the possible drawbacks of a decision to forego evil in exchange for the promise of eternal salvation. In a world of finite resources, decisions about how best to dispose of available resources while alive need to take into account the long-term and (if certain cosmological properties are shown to hold) potentially eternal consequences of the choice between good and evil. In this blog post, we will examine the costs and benefits of baptism and rejection of sin from an econometric standpoint. Of specific interest in this blog post is the relationship between the benefits of accepting God’s grace and the discount rate society applies to years of life not yet lived.
The immediate use of an analysis of the costs and benefits of accepting god’s grace is obvious, but from a wider perspective a clear understanding of the economic aspects of this theological decision may help us to understand the persistence of evil in a world where humans have free will, and to answer the eternal question: why does evil exist in a world shaped according to God’s will?
Methods
Standard cost-effectiveness analysis methods were applied to two simple decision problems. The first decision problem is the question of whether or not to baptize a child, on the assumption that baptism grants the child God’s grace, causing them to live a holy life but to lose the benefits that might accrue to an evil-doer. The analysis was then extended to consider a problem implicit in a great deal of modern rhetoric about the soul and sexuality, viz: if homosexuality is a choice, and that choice leads only to hell, is it cost-effective to choose to be homosexual? This question was answered in terms of numbers of partners foregone, and quality-adjusted life years gained from the sacrifice.
The basic decision problem: whether to baptize
The basic decision problem was addressed using standard measures of effectiveness. It was assumed that were a child to be baptized they would be eligible to enter heaven upon their death, and would thus be able to live forever. Were they not to be baptized, they are assumed to enter hell at death. Each year of life lived was assumed to grant the individual a full quality adjusted life year (QALY); each year in heaven (from now until the rapture, i.e. infinite years from now) was also assumed to grant 1 QALY; while entry into hell was considered to grant 0 QALYs. All QALYs were discounted using the standard formula, and the effect of the discounting rate on the benefits of each decision were calculated over three different life expectancies: 45 years (enlightenment-era), 70 years (biblical lifespan) and 80 years (the life expectancy granted by modern materialist living). Effectiveness was then assessed for a wide range of discount rates, varying from 0.5% to 5%. The difference in QALYs gained (the incremental effect) was then calculated for all these scenarios.
Cost-effectiveness calculation for the baptism problem
Having calculated the incremental effect of baptism, the cost was then calculated under the assumption that evil people make more money. This assumption is implicit in, for example, Mark 8:36, when Jesus asks
What good is it for a man to gain the whole world, yet forfeit his soul?
which suggests that doing good requires some form of material sacrifice. This is, of course, also obvious in the early doctrine of the Dominican and Franciscan orders, and much of pre-enlightenment religious debate was focused around this struggle between material goods and goodness.
This contrast was modeled by a variable , which represents the percentage of additional annual income an unbaptized sinner earns relative to a person living in grace. For example, if a sinner earns 10% more than a convert, then . Then, assuming a fixed average income for god-fearing individuals, we can calculate the lost income due to being good. This is the incremental cost of salvation. From this calculated incremental cost and the incremental benefit, we can estimate an incremental cost effectiveness ratio (ICER), and estimate whether the decision to baptize is cost-effective.
In keeping with standard practice as used by, for example, the National Institute for Health and Clinical Excellence, we set the basic income of one of the saved to be the mean income of the UK, and define baptism as “cost-effective” if its ICER falls below a threshold of three times the annual mean income of the UK. We also establish a formula for the cost-effectiveness of salvation, based on the relative difference in income between the good and the evil, the discount rate, and the human lifespan.
All income in future years was discounted in the same way as future QALYs.
The costs and benefits of voluntary homosexuality
Finally, we address a problem implicit in some forms of modern christian rhetoric, that of the wilful homosexual. Many religious theorists seem to think (either implicitly or openly) that homosexuality is a choice. If so, then the choice can be modeled in terms of an exchange of sexual partners for eternal damnation. In this analysis, we calculated the number of sexual partners a potentially homosexual male will forego over a 20 year sexual career commencing at age 15. We assumed that all life years before age 15 are irrelevant to the calculation (that is, we assumed that all individuals make a choice at age 15 as to whether to be good or evil), and that a person foregoing homosexuality will have 0 partners. Other assumptions are the same as those made above. The ICER for being good was then calculated as the cost in foregone sexual partners (discounted over a wide range of rates) divided by the QALYs gained through foregoing this lifestyle and gaining access to heaven.
Faustian discount rates and the problem of heavenly utilities
Commonly used discount rates range from 3 to 5%, but these are potentially inconsistent with the discount rates preferred by evil-doers. In this study we did not model differential discount rates between evil-doers and the elect, but we did consider one special case: that in which everyone observes a discount rate equal to that observed by Dr. Faust. As is well known, Dr. Faust sold his soul to Mephistopheles in exchange for earthly power, and after 24 years his soul was taken into hell. Since he knew the time frame at the beginning of the deal, this implies that he was following a discount rate sufficient to rate all time more than 24 years in the future at 0 value. Under standard discounting practice such a rate does not exist, but we can approximate it by the rate necessary to value all time more than 24 years in the future at no more than 5% of current value. This discount rate, which we refer to as the Faustian Discount Rate, is approximately 12.5%. All scenarios were also tested under this discount rate.
A further problem is the problem of calculating utility weights for a year spent in heaven or hell. Given the lack of empirical data on utility of a year in heaven, and the paucity of first hand accounts, we assumed that a year in heaven was equivalent to a year without pain or suffering of any kind, i.e. one full QALY. According to the site What Christians Want to Know, Revelations 4:8 describes heaven as
a constant chant of holy angels that are continually proclaiming Holy, Holy, Holy over the throne of God. The Mercy Seat in heaven where God sits is surrounded by magnificent angels full of glory and power that proclaim and bless the holy name of God without ceasing. Some of these are described as beasts, full of eyes, with six wings and neither rest day or night in their proclaiming the holiness of God.
For those of us who don’t enjoy doom metal, this would probably have a utility value of less than one. In the interests of a conservative analysis, we assign heaven a utility of 1.
A similar problem applies to assigning utilities for hell. Many people claim to have been to hell and back, but their accounts of their time at a Celine Dion concert are not convincing and it is unlikely that accurate data on the state of hell exists. Popular conception of hell suggests a realm of eternal torture, but it is worth noting that in standard burden of disease studies even the most unpleasant and torturous diseases – such as end states of cancer, AIDS, and severe disability – are assigned positive utility weights, often quite a lot higher than 0. It is therefore reasonable to suppose that hell should be assigned a positive but small utility. However, again in the interests of conservative analysis, we assign a utility weight of 0 to a year spent in hell – that is, it is equivalent to death.
Results
Incremental benefit of salvation
The formula for the incremental benefit of salvation can be derived as
where here,
is the incremental benefit of being good, in QALYs
r is the discount rate
l is the human life expectancy
Figure 1 charts this incremental benefit over a wide range of discount rates for three different life expectancies.
Figure 1: Incremental benefit of salvation for three different life expectancies
It is clear that as the discount rate increases the incremental benefit of salvation decreases rapidly. At the Faustian Discount Rate, the incremental benefit of salvation is a mere 0.03 QALYs for a 45 year life expectancy, or 0.0004 for a human with an 80 year life expectancy. That is, even if Faustus had been offered and then rejected his bargain at birth, and expected to live to 45 years only, he would have seen the benefit to himself as being only about 0.03 years of life, due to his tendency to discount the value of years far in the future.
The cost-effectiveness of baptism
We now consider the cost-effectiveness of baptism. Let the income of one of the saved be given by , and that of an evil-doer be . Then the income foregone in order to enter heaven is given by the formula
where all parameters are defined as before. Then the incremental cost effectiveness ratio (incremental cost divided by incremental benefit) is
The ICER is plotted in figure 2 for two common life expectancies across a range of values of the discount rate, assuming a mean annual income of 26,000 pounds and that evil-doers earn 10% more income than the saved.
Figure 2: Incremental cost-effectiveness of salvation for two different life expectancies
At a Faustian Discount Rate, life expectancy of 70 years, and 26,000 pound mean income, the ICER for baptism is 16,202,218 pounds per QALY gained.
We can estimate a general condition on society’s discount rate for baptism to be cost-effective, in terms of the additional income gained by being evil and the life expectancy. This formula is given by:
For a life expectancy of 70 years, assuming that the damned earn 10% more than the saved, the required discount rate for baptism to be cost-effective is 4.3% or less; if the damned earn 20% more this threshold drops to 3.5%. It is clear that damnation doesn’t have to be much more materially rewarding before it becomes attractive even under quite reasonable discount rates.
The costs and benefits of voluntary homosexuality
We now consider the situation of a callow 15 year old youth, considering embarking on a life of sodomite sin. What should he choose? Obviously, from the perspective of a simple youth, the costs need to be weighed up in terms of foregone lovers. Assuming an average of five sexual partners a year, a sexual career beginning at age 15 (which is set to time 0 in this analysis) and lasting 20 years, and the same conditions on discount rates, eternal damnation, etc. as described above, a simple formula for the number of partners this man would be foregoing by refusing to choose the love that dare not speak its name can be derived as
and from this the incremental cost effectiveness ratio (measured in partners foregone per QALY gained) as
Note that this ICER is not dependent on the human lifespan. It is in fact almost linear in the discount rate (Figure 3). At the Faustian Discount Rate, the potential gay man is looking at a cost of 4.6 lovers foregone for every QALY gained. Note these values change for different annual average numbers of lovers.
Figure 3: Incremental cost-effectiveness of foregoing a life of sodomy
It might be possible to construct an experiment that assessed individuals’ discount rates using this formula: their answers to the question “how many years of life would you give up to win an additional 5 lovers” could be used to identify their value of r.
Conclusion
In Mark 8:36, Jesus asks the rhetorical question
What good is it for a man to gain the whole world, yet forfeit his soul?
Although usually presented as a question with no clear answer, it is actually quite easy to investigate this question empirically, and to draw conclusions about its implied cost-effectiveness analysis. The results presented here show that, in general, the good gained by forfeiting one’s soul is quite great, and the decision to forego baptism and live a life of evil (including wilful homosexuality) is generally the best decision one would expect a rational actor to make. At very low life expectancies and unrealistically low discount rates it is more beneficial to forego evil and embrace salvation, but at the discount rates usually used by economists, and assumed to reflect rational decisions made by ordinary individuals, salvation is not a profitable course of action.
These findings have interesting theological implications. First, we note that the Church is most likely to gain converts in a society which has a very low discount rate – but in general, the societies where the Church first took hold were societies with high rates of infant mortality and all-cause mortality, which were likely to put a low value on the later years of life – that is, to have high discount rates. But such societies are not naturally sympathetic to the message of eternal damnation, unless they can be convinced to forego rationality in moral decision making. This might explain the Church’s historical resistance to scientific endeavour, and willingness to foment superstitious practices.
These findings also explain christianity’s historical opposition to usury. It is naturally the case that buying something today and paying for it later – i.e. borrowing – is inconsistent with a very low discount rate, which tends to value future years of lost income almost as much as now. Furthermore, usurers operating in the open market will set interest rates well above 0.05%, and it is likely that the practice of usury plus the publishing of interest rates will encourage a society with higher discount rates (in fact, it is likely that this would be encouraged by the lending class). This directly undermines the church’s lesson of salvation, which depends on very low discount rates to work.
Finally, low discount rates are often associated with environmentalism – care for future generations, priority setting that considers costs in the distant future, etc. – but on the central issue of our time (global warming) many of the born again religious organizations that most fervently preach the message of salvation also vehemently oppose any message of custodianship and environmental care. These organizations would probably make better progress in convincing people to give up the joys of the here-and-now for an indeterminate heaven (that seems to involve a lot of noise pollution) if they could find a theoretically consistent approach to discount rates.
This post has shown a simple explanation for the problem of evil: most people operate with discount rates closer to Dr. Faust than to St. Christopher, and as a result they are unlikely to accept the distant benefits of heaven over the joys of the material world. Until the church can find a way to convince us that all our tomorrows are as important as today, the problem of evil will never be solved.
One possible consequence of the collapse of the summer arctic ice cover is that storms like Sandy will become the new normal. There are reasons to think that the freak conditions that caused Sandy to become so destructive are related to the loss of arctic ice, and although the scientific understanding of the relationship between the arctic and northern hemisphere weather in general is not robust, there seems to be at least some confidence that the ice and weather around the Atlantic are related.
It’s worth noting that what is happening in the arctic this year is well in advance of scientific expectations. The 2007 Intergovernmental Panel on Climate Change (IPCC) report, for example, predicted an ice free arctic in about the year 2100. The cryosphere blogs, however, are running bets on about 2015 for “essentially ice free,” and no ice in 2020, as shown, for example, in this excellent post on ice cover prediction by Neven. Results presented by the IPCC are one of the main mechanisms by which governments make plans to manage climate change – in fact this was their intention – and one would think that events happening 80 years sooner than the IPCC predicts would make a big difference to the plans that governments need to consider.
One of the biggest efforts to make policy judgments based on current predictions of future effects of climate change was the Stern Review, published in 2006 and based on the best available scientific predictions in the previous couple of years. The key goal of the Stern Review was to assess the costs and benefits of different strategies for dealing with climate change, to answer the question of whether and when it was best to begin a response to climate change, and what that response should be.
The Stern Review received a lot of criticism from the anti-AGW crowd, and also from a certain brand of economists, partly because of the huge uncertainties involved in predicting such a wide range of events and outcomes so far in the future, and partly because of it particular assumptions. Of course, some people rejected it for being based on “alarmist” predictions from organizations like the IPCC, or rejected its fundamental assumption that climate change was happening. But one of the most persistent and effective criticisms of the Review was that it used the wrong discount rate, and thus it overemphasized the cost of rare events in the future compared to the cost of mitigation today.
I think Superstorm Sandy and the arctic ice renders that criticism invalid, and instead a better criticism of the Stern Review should now be that it significantly underestimates the cost of climate change, regardless of its choice of discount rate. Here I will attempt to explain why.
According to its critics, the Stern Review used a very low discount rate when it considered future costs. A discount rate is essentially a small percentage by which future costs are discounted relative to current costs, in order to reflect the preference humans have for getting stuff now. The classic, simplest discount rate simply applies an exponential reduction in costs over time with a very small rate (typically 2-5%), so that costs incurred 10 years from now are reduced by an amount exp(-10*rate). I use this kind of discounting in cost-effectiveness analysis, and a good rough approximation to its effects is to assume that, if costs are incurred constantly over a human’s lifetime, actually only about 40% of the total costs a person might be expected to incur will actually be counted now.
For example, if I am considering an intervention today that will save a life, and I assume that life will last 80 years, then from my perspective today that life is actually only really worth about 30 years. This reflects the fact that the community prefers to save years of life now, rather than in 70 years’ time, and also the fact that a year of life saved in 20 years time from an intervention enacted today is only a virtual year of life – the person I save tomorrow could be hit by a bus next week, and all those saved life years will be splattered over the pavement. The same kinds of assumptions can be applied to hurricane damage – if I want to invest $16 billion now on a storm surge barrier for New York, I can’t offset the cost by savings from a $50 billion storm in 50 years time, because $16 billion is worth more to people now than in 50 years’ time, even if we don’t consider inflation. I would love to have $16 billion now, but I probably wouldn’t put much stock on a promise of $16 billion in 50 years’ time, and wouldn’t change my behavior much in order to receive it[1]. Stern is accused of rejecting this form of discounting, and essentially using a discount rate of 0%, so that future events have the same value as current events.
There are arguments for using this type of discounting when discussing climate change, because climate change is an intergenerational issue and high discount rates (of e.g. 3%) fundamentally devalue future generations relative to our own. Standard discounting is probably a logic that should only be applied when considering decisions made by people about issues in their own lifetimes. This defense has been made (the wikipedia link lists some people who made it), and it’s worth noting that many of the conservative economists who criticized the Stern Review for its discounting choice implicitly use Stern’s type of discounting when they talk about government debt – they complain extensively about “saddling future generations” with “our” debt, when their preferred discounting method would basically render the cost to those generations of our debt at zero. This debate is perhaps another example of how economists are really just rhetoricists rather than philosophers. But for now, let’s assume that the Stern Review got its discounting wrong, and should have used a standard discounting process as described above.
The Stern Review also made judgments about the effects of climate change, largely along the lines of the published literature and especially on the material made available to the world through previous rounds of IPCC reports. For example, if you actually access the Stern Review, you will note that a lot of the assumptions it makes about the effects of climate change are essentially related to the temperature trend. That is, it lists the effects of a 2C increase in temperature, and then applies them in its model at the point that the temperature crosses 2C. For example, from page 15 of Part II, chapter 5 (the figure), we have this statement:
If storm intensity increases by 6%, as predicted by several climate models for a doubling of carbon dioxide or a 3°C rise in temperature, this could increase insurers’ capital requirements by over 90% for US hurricanes and 80% for Japanese typhoons – an additional $76 billion in today’s prices.
The methods in the Stern Review are unclear, but this seems to be suggesting that the damage due to climate change is delayed in the analysis until temperature rises by 3C[2] – which will happen many years from now, in most climate models.
The assumptions in the Stern Review seem to be that the worst effects of climate change will begin many years from now, perhaps after 2020, and many (such as increased storm damage) will have to wait until the temperature passes 2C. There seems to be an assumption of a linear increase in storm damage, for example, which loads most storm damage into the far future.
This loading of storm and drought damage into the far future is the reason the discount issue became so important. If the storm damage is in the far future, then it needs to be heavily discounted, and the argument becomes that we should wait until much closer to the time to begin mitigating climate change. This argument is flawed for other reasons (you can’t stop climate change overnight, you have to act now because it’s the carbon budget, not the rate of emissions, that is most important to future damage), but it is valid as it applies to the debate about whether we should be acting to prevent climate change or prepare for climate change.
However, recent events have shown that this is irrelevant. Severe storm damage and droughts are happening now, and at least in the Atlantic rim these events are probably related to the collapse of the arctic ice load, and reductions in snow albedo across the far north. Stern’s analysis was based on most of these events happening in the far future, not now, and as a result his analysis has two huge flaws:
It underestimates the total damage due to climate change. Most economic analyses of this kind are conducted over a fixed time frame (e.g. 100 years), but for any fixed time frame, a model that assumes a gradual increase in damage over time is going to underestimate the total amount of damage that occurs over the period relative to a model that assumes that the damage begins now. Stern couldn’t assume the damage begins now, because those kinds of things weren’t known in 2006. But it has begun now – we need to accept that the IPCC was wrong in its core predictions. That means that the total damage occurring in the next 100 years is not going to be $X per year between 2050 and 2100, but $X per year between 2010 and 2100 – nearly twice as much damage.
The discount rate becomes irrelevant. Discount rates affect events far in the future, and have minimal effect now. If Stern had used a standard discount rate of 3%, then from his perspective in 2006 the current estimates of storm damage in the USA due to Sandy ($50 billion) would be about $42 billion. Also, all the damage in the USA due to Sandy is excess damage, because without the collapse of the arctic ice fields, Sandy would probably have headed out to sea, and done 0 damage. The estimated cost of the storm surge barrier mentioned above was $16 billion, so assuming that this cost is correct (unlikely) and it could have been built by now (impossible), that investment alone would have been worthwhile. Whereas if we assume a storm like Sandy won’t happen until 2050, the cost of the storm from Stern’s perspective is $14 billion, and we shouldn’t bother building the barrier now.
This means that the main conservative criticism of the Stern Review is now irrelevant – all that arcane debate about whether it’s more moral to value our future generations equally with now (Amartya Sen[3]) or whether we should focus on building wealth now and let our kids deal with the fallout (National Review Online) becomes irrelevant, because the damage has started now, and is very real to us, not to our potential grandchildren.
The bigger criticism that needs to be put is that Stern and the IPCC got climate change wrong. The world is looking at potentially serious food shortages next year, and in the last two years New York has experienced two major storm events (remember Irene’s storm surge was only 30cm below the level required to achieve the flooding we saw this week). Sandy occurred because of a freak coincidence of three events that are all connected in some way to global warming. We need to stop saying “it’s just weather” and start recognizing that we have entered the era of extreme events. Instead of writing reviews about what this generation needs to do to protect the environment for its children, we need to be writing reviews about what this generation can do to protect itself. Or better still, stop writing reviews and start acting.
—
fn1: This is a problem that has beset the organized religions for millenia. An eternity in heaven is actually not equivalent to many years on earth, if you discount it at 3% a year.
fn2: Incidentally, I’m pretty sure I was taught in physics that the use of the degree symbol in representing temperatures is incorrect. Stern uses the degree symbol. Economists!!! Sheesh!
fn3: Incidentally, I think in his published work, Sen uses the standard discounting method.
A few weeks ago I put up a post about the research challenges in studying online communities, in which I suggested that online surveys are an essential but flawed tool for the study of communities that are largely defined by their internet rather than their physical presence. My post was in the context of the controversy over Lewandowsky’s analysis of data from online climate “skeptics,” but in contrasting online communities with marginalized or stigmatized groups, I implied that online surveys are part of a broader problem in research, dating from before the internet, in how to access people who are not easy to trace or very rare.
Today’s issue of the journal PLOS Medicine has an article about ethical considerations in online research, which is published in the context of online surveys of medical treatments and genome studies. The paper, available open access here, has a nice description of the types of bias that enter online studies, and also a discussion of the ethical implications that arise both from the nature of these biases and from the general properties of online surveys. They mention the possibility that data will be shared and the importance of telling participants, something which I suspect neither Lewandowsky nor the follow up survey at WUWT explained to their participants; they also mention the possibility of data sales and the additional complexities of obtaining consent from non-identifiable participants.
The article doesn’t make any revolutionary claims or present any strong judgments about whether online research is bad, good or better than other forms of research, but it does note the growth of this type of research, discusses its applicability and generalizability, and points out some of the ethical implications that arise from the ease with which people can conduct online research. I was certainly surprised to read the kind of data people are willing to exchange with online research organizations of the type identified in the article and I wonder if there is a broader problem here in that our technological ability to collect private and sensitive data from strangers has outpaced the community’s understanding of the risks and ethics of such practice. If the wash-up of the Lewandowsky affair has you wondering about the broader issues surrounding that type of research, then the article is certainly worth reading.
Last night I went to a work-related dinner with foreign guests, and my students did the stereotypical ’80s Japanese thing of subjecting the foreigners to every gross food that Japanese people eat, without warning. Uterus, raw octopus with horseradish, frogs legs, stewed guts, grilled chicken skin, pickled plums, some kind of tiny fish that tastes like socks… and inago, grilled grasshopper. Me being one too many sheets to the wind (and having secret theories about the morality of insect eating), I tried it.
Inago is actually very good. It is sweet-salty, crunchy and bite sized. I was expecting some kind of gross prawn-brain flavour that needs to be washed down with beer (and carries the attendant risk of an explosion of fishy aftertaste, that the Japanese call namakusai and appreciate). It has none of these things, so is vastly superior as a beer snack to either dried squid or deep fried whole peawns. I recommend grasshopper, though I can’t vouch for the effect of eating a whole bowl.
If you want to try this “delicacy,” the old-fashioned restaurant chain Hanbei (半兵ヱ？) sells them, and has an english menu. There is one in Shibuya near the station. Good luck!
Yesterday’s role-playing was a session of Saga editionStar Wars, set in the era just after the clone wars, and my character was a Rodian scout – that is, one of Gredo’s race, pursuing essentially the same trade and with probably just as much aplomb and skill.
My character, Seredo, was joining an established group, who were on a mission to rescue a turncoat admiral from an imperial prison. The prison was hidden in a treacherous fungus forest on the planet of Feluchia, and the majority of the group had already made landfall and been caught in a firefight with stormtroopers. I had been sent separately, hunting a criminal who was in turn stalking the group, and so I reached the firefight halfway through. This gun battle was taking place across a stream, and involved a couple of stormtroopers, some speederbikes and our party: a human jedi, a protocol droid, and a wookie. Seredo’s aim was to enter the battlefield secretly and use stealth to ambush two stormtroopers who were trying to alert a star destroyer to the group’s presence; unfortunately, Seredo did a Gredo, and fumbled his entrance – instead of sneaking onto the battlefield, he stumbled into a thicket of puffballs, which exploded in clouds of different coloured spores, giving Seredo a rockstar’s entrance to the scene. Still, he was able to pick off one of the stormtroopers and provide covering fire for the jedi and the droid, who were able to kill the others.
Having joined up, we then had to enter the prison block. Being star wars, this was going to have be done only one way: by stealing a scout walker. Our session had to finish after four hours, so we didn’t complete the task, but we’re halfway through: the Jedi is on the roof of the scout walker, I’m between its feet, and the wookie has been spotted. The best laid plans of men and walking carpets, etc.
Playing Star Wars is fun. Blasters, prancing jedi, droids and speeder bikes – it’s just like being there. One of our players has a weird little wookie-head-shaped device with 10 buttons, that when you press it makes various wookie sounds, and it comes with a code so that you know what button to press at what time. Every success and setback is greeted with its own roar of glee or outrage. There are outlandish aliens, stormtroopers to kill, and all the dubious and seedy characters of a universe that is, essentially, a fantasy realm with spaceships wrapped around it. Fun! The system is a variant of d20, simplified a little and with some additional deadliness built in – it has a kind of wound system that makes it a bit nastier to play with blaster weapons, and it’s probably a bit faster than standard d20. So it’s a good balance of crunch and swashbuckling. Of course, being d20 it still takes a bit of time to get anything done. It’s also nice to be playing a PC that can actually do something useful, even if it is only at a Gredo-esque level of ability. So, there’ll be more of Seredo’s exploits in a month or so, when we return to the planet of Feluchia and find out whether he’s going to end his reptilian span prematurely under the feet of an AT-ST, or whether he’s going to ride one to glory freeing imperial slaves …
The Guardian reports that JRR Tolkien’s apparently unfinished Arthurian epic, The Fall of Arthur, is to be released soon. The story is a poem in old-English alliterative style, with passages like these:
His bed was barren; there black phantoms
Of desire unsated and savage fury
In his brain brooded till bleak morning
I’m a fan of alliterative poetry and Tolkien was apparently a master of reading it in its original language, so I’m intrigued that he could have written a modern-day Arthurian poem based on this style. A lot of people can get this sort of thing wrong but when it’s done well it can be very evocative, and I see every possibility that Tolkien could pull it off. Of course, it’s not always the case that specialists in a field make good practitioners, as shown by the long-standing rule that one should never let a film studies student choose your Saturday night movie, but Tolkien is a published writer and some of his other more stylized writing, though hard going, is quite rewarding (see e.g. The Silmarillion). I don’t like every aspect of the passage I cited above, but it seems like a nice first pass, and I will certainly be checking out the full poem. It could be that while Tolkien can often be mediocre in his standard prose, he will be consistently good in this style, so it will be fun to give it a go – plus, it looks like a dark reinterpretation of the Arthurian legend, but will no doubt lack much of the rape!rape!grimdark! of more modern writers who attempt to “subvert” the classic fantasy style through dark reinterpretations. If it’s grimdark without the salacious shock value, I think it could be an excellent addition to the Arthurian canon…
This is my first attempt at mapping the Steamlands, the kingdom in which I am now running WFRP 3 adventures. The map was created in Hexographer (the free version) because I’m a terrible artist, designer or drawer. The geography of this kingdom is based loosely on Kyushu, Southern Japan, taking the names and some of the features of parts of Japan for inspiration. I’ve also chucked in a bit of Germany for good measure (the World Forest on the west coast, and the river system lined with towers, is essentially a geographical feature copied from the Black Forest and the Rhine).
At the moment I have no ideas for this world except the names of towns (translated from the Japanese) and a couple of general features. Although the geography is modeled loosely on Kyushu and the city names a translation of Kyushu names, the vegetation and weather is roughly similar to south east Australia – so the World Forest, for example, is a vast wilderness of eucalyptus forest, and the flat areas can be imagined to be rolling pasture dotted with cows. I haven’t decided if it has marsupials (probably not) but it will have a bird that resembles a kookaburra, and the forest will preserve Australian features – quiet, pleasantly fragrant, dry and kind of spooky. Some particular features of the landscape (and the names they’re translated from) are given below.
The Spear Capes (Nagasaki): a land of inlets and bays, rich swamps and wild rivers, I imagine this is dotted with independent cities of pirates and traders, and is quite primitive and barbaric in many ways. I imagine the swamps will be mangroves, and crocodiles will be common. I also imagine that the inland areas will have plantain and sugar farms, and possibly large plantations owned by strongmen from the other kingdoms (particularly from Twinluck)
Twinluck (Fukuoka): Twinluck is the largest city in the Steamlands, and is connected by a railway line to the city of Store. I imagine Twinluck as a chaotic melting pot, with an ancient history and lots of steampunk technology. I also think that the current ruler has styled himself “The Emperor of Infinity” and is attempting to build a great empire, the Empire of the Manifold Path, which is slowly expanding East and Southwest (through the land that in real life is called Saga but in this map is simply farmland and forest that is open to exploitation by the most aggressive settlers). I also imagine that the people of the Manifold Empire (as it is often referred to) are of a different race to those in the Spear Capes, and there is much conflict on the edges of the Empire
Store (Kitakyushu/Kokura): I know nothing about Store except that it is at the other end of the railway line from Twinluck, and it constitutes the Easternmost boundary of the Manifold Empire. It is so-called because the coastline is riddled with old caves that connect into a deep dungeon, in which can be found lost artifacts and ancient technology – as well as ancient evils
Heavenbalm (Usa): Heavenbalm is the temple-fortress at the centre of a religious kingdom, about which I know nothing. I guess there is human sacrifice and witch burning, and possibly magic is forbidden.
Steamline Spa (Yufuin): This town is the centre of a network of hot springs and spas, scattered through the mountains in this area. This is the area where the campaign began
Separation City (Beppu): The adventurers are heading here as I make the map. I’m not sure why it’s called “Separation City” or what’s there, but I think it will be a smallish town with a large entertainment industry, and a large port for Eastward travel to the Four Kingdoms and the Summerlands (two other continents not shown on this map)
Greathalf (Oita): A large industrial and agricultural city, the last significant town before one heads down the wild east coast
The Beastlands (Kumamoto): Kumamoto means “origin of bears,” so for this area I figured it must be full of beastmen. These beastmen regularly spread to the east coast or northeast towards the civilized lands of Greathalf, and the line of towers has something to do with them. The southernmost island of the Beastlands is the Isle of Pan, and it may be the home of some kind of god of the beastmen, though no one has returned to tell the tale of its contents. This island corresponds with the province of Kagoshima (Island of Fauns), and the islands which inspired the mythical forest of Princess Mononoke, which seems apt
The World Forest: the home of the elves, especially away from the coast, and continually being contested between elves, beastmen and humans
Besides these rough outlines, I have no other ideas for the world. I know there is another kingdom on the east coast, not yet described, which corresponds with Miyazaki, but I can’t think of a good translation of Miyazaki (“Palace” plus “Promontory” or “Peninsular”). Maybe the “Bay of Palaces”? Sounds rich and powerful! Or maybe it once was, and now is crumbling under the beastman threat.
Because there is a dwarf in the party I need to find a place to fit dwarves in all of this – they might, however, come from over the sea, in the Four Kingdoms.
The PCs are heading to Separation City to get a lawyer to sign a deed transferring property to them, so that they can take ownership of an onsen in the mountains. After that they have adventure options in Twinluck, and they can return and explore the land around their property, or they can head elsewhere to explore the Steamlands. At this stage it’s all pretty open, basically a sandbox to enable me to see how far I can push the WFRP 3 rules before I get bored of them and/or they break. Shall I have a beastman empire? What is buried beneath Store? And does the Emperor of Infinity know something we don’t? Only time will tell…
, which represents the percentage of additional annual income an unbaptized sinner earns relative to a person living in grace. For example, if a sinner earns 10% more than a convert, then 
. Then, assuming a fixed average income for god-fearing individuals, we can calculate the lost income due to being good. This is the incremental cost of salvation. From this calculated incremental cost and the incremental benefit, we can estimate an incremental cost effectiveness ratio (ICER), and estimate whether the decision to baptize is cost-effective.
is the incremental benefit of being good, in QALYs
, and that of an evil-doer be 
. Then the income foregone in order to enter heaven is given by the formula
Compromise and Conceit 