Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

17 September 2008

The Price of Life and the Cost of Entry into Heaven

A tragic story and perhaps old news now more than 24 hours after it happened. However at least 21 people have been killed in a stampede for a handout that amounts to about USD 3.50. There are probably many ways you could look at the issue. Perhaps you could look at it from an economic perspective and analyse the value of life and the costs of getting into heaven. maybe you could look at it from a law and order perspective. You might look at it from a public negligence perspective, or as some have suggested you might want to look at this from the perspective of a complete breakdown in the trust of the people for their public institutions such as the police.

The story occurs in Pasuruan, a small town in East Java. A local Muslim of some fortune decided that he was going to make donations to the poorer members of the community in the form of a cash hand out. It is after all the holiest of holy months, Ramadan, and many Muslims make the giving of alms a priority during the month. So, the simple fact that a rich Muslim wanted to do this is not strange or unusual.

The Pasuruan tragedy is probably the result of the convergence of a number of issues.

Poverty in many parts of Indonesia remains acute, some might even argue that it is worsening, and this runs counter to much of the positive spin that the government is putting on economic numbers. So, the very idea of a cash hand out is likely to draw the masses. In this case it is thought to have drawn somewhere in the vicinity of 5,000 people (perhaps up to 7,000). The area surrounding the private residence of the family handing out the alms is small and littered with small gang ways. Try and imagine if you can 5000+ people crammed into a series of small gangs and a small courtyard.

The end result was perhaps as predictable and preventable as it is tragic. The crowd surge meant that many were crushed and trampled to death in the rush to get to the front. At least 21 lives have been snuffed out and each for less than USD 3.50.

There were no police in sight to administer or control the crowds. The police were not there because they were not invited or asked to attend. Why not? Probably because the family was concerned that if the police were there then most of those receiving the donation would have lost a portion of it on the way out as a "service charge" or tax collected by the police. Are the police responsible and can they be held responsible for not being there? I would hazard a guess and say not. However, this needs to be contrasted against the fact that it is alleged that the deaths occurred over a period of seven hours. So, on the first report of a death occurring it would make sense for the police to attend and then attend to crowd control. They did not.

The next question focuses on the family. Should the family have used a charity to distribute the alms that they wanted to distribute. The answer to this question is a tricky one. The family chose not to because perhaps they were concerned that much of the alms they wanted to provide would have been lost to administrative charges (the charities enriching themselves) and not distributed to those most in need. This is a sad indictment of the people's trust in charities.

Who is responsible for this tragedy? The family decided to go it alone on this one and as such they should bear primary responsibility for what occurred. However, it would seem that perhaps they are not solely responsible. The reasons for doing what they did highlights that there is something fundamentally wrong with the system that it cannot take care of the people it is designed to care of nor function to distribute alms to those most in need.

The cost of getting into heaven in this instance was just too high.

10 July 2008

Rising Fuel Prices

A recent study by the CSIRO in Australia, Fuel For Thought, suggests that fuel (petrol) could reach AUD 8 per litre within ten years. This is expected to add about AUD 220 per week to the expenses of anyone running a medium sized car by 2018. This rapid rise is premised on an ever-decreasing supply in a time of ever-increasing demand. Simple economics really.

It would therefore make sense that now is a good time for investment in cars that are more fuel efficient and perhaps even into alternative fuels. It is much more than just reducing our carbon footprints and saving the world from a self-induced inferno. There is a genuine need for us to innovate with respect to energy in order to survive.

Once we have burned all our fossil fuel supplies and we have drilled every where there is to extract each and every last drop of the black gold, then what? Then what will be our chance to see Darwinian theory up close and personal, as only the fittest will survive!

Perhaps the report is not all gloom and doom, but it certainly does not paint a rosey picture of the future. There are a lot of assumptions and theorizing in the report that seems to require certain things to happen and certain times and quite often simultaneously in order to make the numbers work.

In a move to alternative fuels such as ethanol from maize there are inherent problems. One such problem has already come to the fore. More people are planting maize and selling it to fuel producers because they get a better price for it. This means that there is less maize in the market place and there will ultimately be food shortages which in turn drive up the cost of foodstuffs generally. Pressure from another angle.

These pressures will increase as the world reaches the peak oil limit. Peak oil simply is where production rises to a peak and then begins to decrease as no new reserves come on line or are discovered.

What is clear is that we should expect an increase in the price of petrol at the pump.

The report deals with the impacts in Australia. I might have to write a post on how peak oil might play out in the very inefficient Indonesian setting. It is scary just to think about as oil is still heavily subsidized here. The photo was taken from here.

03 January 2008

It's evolution, my genes cannot help it!

The perfect excuse for cheating men and single men who prefer to pay for sex rather than enter into long-term relationships has just become available courtesy of a study conducted by Michael Gumert of Nanyang Technological University in Singapore. Gumert studied the behaviour patterns of long-tailed Macaques monkeys in the forests of Central Kalimantan...The study found that on average the female of the species had sex or offered sex at a rate of about 1.5 times per hour. However, this is not the most interesting part of the study!

The
study found that the rate increased significantly if the female had been groomed by the male Macaque seeking the sexual favour...Yet, the study gets even more interesting when it explores the basic economics of supply and demand in sexual transactions. Simply, when there was an over-abundance of females in the immediate vicinity the cost of sex would drop to eight minutes of grooming. However, when there were limited females present in the area the female understood the value of her service and the grooming required before sexual favours become available jumped to 16 minutes.

I wonder does dinner and a movie equate to grooming in the Macaque? If it does then I guess a great majority of us would be guilty of either paying for sex or accepting payment for sex...then again if the courtship is a lot longer than one dinner and one movie maybe then both parties are entitled to a long-term monogamous partnership / marriage? Maybe I should have continued in my psychology studies after the first year of university way back when so that I could be a chance of figuring this out...Nevertheless, sexual behaviour of humans has been well-documented, particularly since the release of the Kinsey Report in 1948.

So, what does the study tell us? That sex for money is not only the oldest human profession but perhaps the oldest profession amongst our primate relatives! But is it really as simple as economic principles of supply and demand; do Macaques really care about economics?

It seems the perfect excuse has been found--it's in the evolutionary genes, men cannot help themselves (well, maybe some can but there are always exceptions to the rule, right?)...To each their own. I guess if you need an excuse you now have one!