Tuesday, August 30, 2005

I Am Speechless

Well, not literally speechless; that would be so not Zycher. But in today's Wall Street Journal we are informed by some poor soul---oops, a journalist---writing about Hurricane Katrina that "amid the grief and heartbreak, it should be noted that growth often follows such catastrophe. Hurricanes Andrew in 1992 and Floyd in 1999, for example, both ended up boosting local and national growth rates as rebuilding efforts created jobs and increased spending."

If this is not the classic manifestation of the old broken-window fallacy, I know not what is. Why not nuke the whole eastern seaboard---I'd say California, but I live there---so that we can expand employment and spending in a rebuilding effort? Is this guy a moron? Or does he merely need to fill up twenty column inches with, well, whatever? That modern journalists are the political equivalent of hurricanes destroying public discourse everywhere they set foot would be amusing were their ignorance not so appalling.

17 comments:

Tlaloc said...

what exactly about this contention is it that you find so ridiculous?

Tlaloc said...

I fail to see how the broken window parable is any different than the corporate practice of planned obsolescence which, I assume, as a good little capitalist you embrace with paroxysms of joy (stop me if I'm mistaken).

The Classic Liberal Anonymous said...

The journalist is correct, growth will follow the hurricane. The question that he fails to address is whether the amount of "growth" is greater than the amount of harm done.

Maybe this is his/her way of looking for the silver lining.

Re planned obsolescense: I am interested in your line of thinking ... please give an example.

Kathy Hutchins said...

Before we spend fifteen posts talking past each other, define "planned obsolescence" and state why you think it is economically irrational.

Kathy Hutchins said...

And the contention that a hurricane causes economic growth because of all the construction jobs it creates is like saying if I come over to your house and bust your kneecaps, it's good for the economy because the doctor gets some work. It ignores the facts that (1) your knee wasn't broken before and now it is and (2) while the doctor was fixing your kneecaps he could have been doing something else, at least as useful if not moreso. You are just shifting resources, you're not creating growth.

The Classic Liberal Anonymous said...

Maybe T was thinking along the following lines:

Lets take the guy who throws the rock through the window and replace him with a capitalist who designs the window in such a way that it breaks automatically, thus starting the succession of events in the BW fallacy.

Am I close?

Tlaloc said...

"Before we spend fifteen posts talking past each other, define "planned obsolescence""

Planned Obsolescense- the conscious decision on the part of an agency to produce a consumer product that will become obsolete in a defined time frame (using the wikipedia definition).


"and state why you think it is economically irrational."

I didn't say it was economically irrational, what I said is that it's the same thing as the broken window parable which Zycher inmplies is economically irrational.

A boy breaks a window causing the home owner to have to buy a new one.

An auto maker designs a car so that it wears out after 5 years. The car owner has to buy a new one.

In both cases an action caused someone to have to replace something which otherwise would have not have needed replacing.

In the case of the broken window it's said this is bad economically.

In the case of planned obsolescense it's considered good.

Tlaloc said...

"Am I close?"

Yep.

Kathy Hutchins said...

No, it's not the same thing at all. Breaking something is not the same as designing something that is designed to wear out eventually. There are many sound economic reasons we don't want to use resources to make a durable good infinitely durable. There are tradeoffs between making the car more durable, making it more affordable, dealing with the extent to which consumers wish to deal with durable good life cycles, and so on. It is not a bad thing that computers have life spans, otherwise I'd still be using an IBM-XT.

Besides, it's not like an item like a car just disintegrates at the end of its calculated lifespan. You always have a choice to repair it, but you calculate a tradeoff between repairing and replacing.

The Classic Liberal Anonymous said...

In keeping with the window example:

If I design a window that "breaks too soon" the shop owner has the option of taking his business elsewhere next time.

The capitalist IDEAL is that a second manufacturer of windows will see that the shop owner wouldn't mind spending a couple extra bucks for one that lasts a little longer.

Perhaps T's definition of planned obsolescence can fit under the umbrella of "INefficient allocation of resources".

It would be inefficient (and expensive) to design "windows" that last forever.

Tlaloc said...

"No, it's not the same thing at all. Breaking something is not the same as designing something that is designed to wear out eventually. There are many sound economic reasons we don't want to use resources to make a durable good infinitely durable."

Same reasons you don't want that pane of glass to last 150 years.



"There are tradeoffs between making the car more durable, making it more affordable, dealing with the extent to which consumers wish to deal with durable good life cycles, and so on."

It's acknowledged that for no or marginal increases in cost cars could be designed which last substantially longer. Just as cars can be designed that require substantially less fuel. They aren't though because these companies are trying (and succeeding) at artificially manipulating the supposedly free markets.



"It is not a bad thing that computers have life spans, otherwise I'd still be using an IBM-XT."

Thats a false argument and I suspect you know it. Were your IBM-XT designed to last longer you'd still have the OPTION of using it if it met your needs. Having an option is always economically superior to not having the option.



"Besides, it's not like an item like a car just disintegrates at the end of its calculated lifespan. You always have a choice to repair it, but you calculate a tradeoff between repairing and replacing."

And you can repair the window pane or the entire window. Same situation. You haven't exactly indicated any meaningful difference between the two cases.

I'll make it simpler for you and we'll go with CLA's idea: the window maker designs the window so it breaks after five years give or take a year. That is is unequivicably an example of planned obsolescense, now how is it any different than the kid throwing a rock?

Tlaloc said...

"The capitalist IDEAL is that a second manufacturer of windows will see that the shop owner wouldn't mind spending a couple extra bucks for one that lasts a little longer."

Of course, except that if planned obsolescense is an accepted and even celebrated economic underpinning then there's no reason for any producer of windows to build a longer lasting product. They know it's better to fight over the market of constant refreshes rather than produce themselves out of business with a superior product.

Tlaloc said...

"It would be inefficient (and expensive) to design "windows" that last forever."

No not really. Moving away from the idea of windows (for which there are practically limitless lifetimes) we can look at cars.

Despite the huge advances in material science, computer design, and so on cars have hardly improved at all in the last fifty years. In many respects they have back slid and become worse. They are more complicated sure but last no longer, and have seen little to no improvements in milage or in safety. And this is a primary technology of our times! This isn't some small esoteric device that no one has heard of. Millions of cars are sold every year and they can't improve the design in half a century?

Either auto manufacturers are the most incompetent bunch of engineers on the planet or they are artificially constraining their products advancement. We know for a fact it's the latter because they have admitted it. They can't survive in an environment where people refresh their cars every 30 years. On average people now trade in cars every four years and a car lives just 13.

The Classic Liberal Anonymous said...

Are you suggesting the following:

1) better technology exists to build widgets;

2) if a manufacturer were to use said technology and build better widgets eventually everyone would buy them and have better widgets;

3) greedy capitalists are avoiding doing #2 because it won't make them any money.


Hmmm ...

The Classic Liberal Anonymous said...

Re cars:

Cars have improved:

1) efficiency(*) has gone up;
2) A/C is available even in entry level cars;
3) safety HAS improved (heard of the airbag, controlled crumple zones etc...);
4) emissions have been reduced dramatically.
5) because efficiency has gone up, so has mileage (as long as you control for the weight of the car).



(*) Yes efficiency has gone UP. Look at the amount of horsepower available per unit of energy input.

Tlaloc said...

"Are you suggesting the following:
1) better technology exists to build widgets;
2) if a manufacturer were to use said technology and build better widgets eventually everyone would buy them and have better widgets;
3) greedy capitalists are avoiding doing #2 because it won't make them any money."

I don't have to suggest it it's the entire concept behind planned obsolescense. The idea is that if you have something like a car which as opposed to a computer, will not see any radical advances in it's capabilities as time goes on and you build them to last as long as possible you are denying yourself a market to sell to. A person who has to buy a new car every four years is obviously much better profit wise than one who buys one every 20 years even if they 15% more to do so.

Tlaloc said...

"Cars have improved:
1) efficiency(*) has gone up;

(*) Yes efficiency has gone UP. Look at the amount of horsepower available per unit of energy input."

Who cares? That's not a meaningful measure of efficiecy. Look at miles per gallon where there has been only a marginal improvement.


"2) A/C is available even in entry level cars;"

That's not an improvement it's a gimmick. It in no way makes the car function better, and in cars that overheat it can make them function worse.



"3) safety HAS improved (heard of the airbag, controlled crumple zones etc...);"

Indeed they've added doodads and yet there were fewer deaths in 1960 due to car crashes than last year. Of course our population has increased since then but that means that 40 years of invention to increase the safety of cars has failed to even keep up with our increased usage? That's not exactly an award winning claim.

Stop and think for a moment about the radical differences in a 1950s plane and a modern jet. The two are miles apart. And yet a 50s car is kissing cousin to our modern conveyances.



"4) emissions have been reduced dramatically."

Emissions have reduced substantially, but while that's very good it's not exactly a central feature of the car. A car is a mode of transport. It's salient features then are how much it costs, how fast it goes, how far it goes, how safe it is, and how long it lasts. From an engineering point of view those are your primary attributes. Everything else is fluff you tack on if you can.

They failed to make more than marginal improvements to any of thefirst four features while intentionally sabotaging how long it lasts.

Again compare cars to practically anything else:

The clunk radio of the 50s now fits on a single chip with room to spare.

Computers have of course advanced phenomenally.

Planes have advanced from clunky turbos and the very first jets to the sleek radar invisible jets and the SR-71 that can hit mach 3.5

Televisions have become flat panels in color and the potential for HDTV not to mention vastly superior controls and remotes.

Telephones now not only are tinier, portable, they are capable of acting as video recorders, music boxes, and web browsers.

It's easy to understand why cars haven't been made substantially faster, because that'd exacerbate the safety issues. They aren't made cheaper becasue of auto maker's profit margins (so they add in the doodads to compensate). They aren't made to go further because...well honestly I don't know why the car companies are so adamant about building really inefficient designs like SUVs. But as far as lifespan...there is no reason on earth that cars haven't dramatically improved in lifespan except that the auto makers don't want them to.