Unintended Consequences: January 2012 Archives

One of the most difficult concepts that many people have problems understanding is that of diminishing returns. This applies to many different areas in our lives and in our society. I don't know whether it's a lack of education, a failure in their upbringing, or something inherently lacking in the people themselves. Perhaps it's a little of all three.

Going hand in hand with this concept is one that has many of the same roots - perceived risk - something that has driven some folks into action to get the government to "Do Something!" about something that is a minor issue at best.

In case you're wondering, however briefly, how this particular subject came up, it was during a discussion at work about this post from FuturePundit dealing with the declining return on investment from electrical power efficiency.

My employer is always looking for ways to reduce our energy usage, something that appeals to the frugal Yankee in me. Over the past five or six years a number of measures have been taken to reduce our electrical usage, including the use of more efficient lighting at all levels, timers on our existing electric water heaters to shut them off when no one is in the building, on-demand water heaters replacing the older tank-type water heaters as they wear out, more energy efficient refrigerators (used for both food and for storage of certain manufacturing substances...though not in the same refrigerator!), and motion sensors to shut off lights in rooms when no one is in them, just to name a few of the improvements undertaken. All of this has helped reduce our electricity usage by over 20% as compared to 6 years ago. Will further investment reduce our electrical usage any more than it has? Sure it will, but (and it's a big 'but') we won't see anywhere near the savings we already have unless we spend a lot more money than has already been spent. We have reached the point of diminishing return. We'd need to spend many times more than we already have in order to achieve a small fraction of the savings already made. From a financial point of view the return on investment makes no sense, meaning further investment in this effort will not result in energy savings equal to what was spent to achieve them. Or put more simply, we'll spend more than we'll save. It's not worth it.

OK, back to the subject at hand.

We've seen more than a few times where some project has reached its original goals, whether it's a cleanup of some Superfund site or the closing of a municipal landfill. Ninety-nine point nine percent of the contaminants were cleaned up or the landfill might leak 0.001% of the liquids or decomposition products from the landfill. But for some folks that isn't good enough. They want 100%. Never mind that achieving that last little bit will cost as much, if not more, than what has already spent. Never mind that it will likely be the taxpayers footing the bill. Never mind that in the end it won't make one bit of difference. The project has blown past the point of diminishing returns and spending any additional money won't help...other than to make the folks bitching about it feel better. (It would be cheaper to give them some mood-elevating drugs to do that than wasting taxpayer dollars to 'fix' the last little iota of the problem.)

We see this lack of understanding about diminishing returns in all kinds of places and situations. It is also where the problem with perceived risk comes into play.

One of the biggest disservices ever perpetrated upon the public is the notion that life should be totally risk free. This meme started some time in the 1960's. (Yes, I know drives to improve safety started long before that, but the 100% risk free crap started in the late 60's/early 70's.) There's nothing wrong with reducing risk. But to think life can be made 100% risk free is ludicrous. It can't be done. But that doesn't stop people from trying to do so anyways. I wouldn't mind that so much if those same people understood the difference between real risk and perceived risk. The problem is that they don't and because of that lack of understanding money is wasted on slight risks while major risks are ignored.

An example:

Which entails more risk to life and limb: Driving a car or flying on a commercial airliner?

The answer is, of course, driving a car. (There were over 32,885 traffic fatalities in 2010, with many times that number of injuries. As an aside, that number is the lowest number of fatalities since 1949 despite more miles being traveled then ever before, giving us the lowest fatality rate ever.) But people perceive flying as more dangerous. Yet how many fatalities have there been in the US due to commercial airliner crashes over the past few years? None. A person is far more like to be injured or killed driving to or from the airport than they are by flying on a commercial airliner, but they're more afraid of dying in a plane crash. It's all perception, not reality.

Let's try another:

One person lives near a nuclear power plant. Another lives near a coal-fired power plant. Which one is at a higher risk of cancer, injury, or death?

The answer is the person living near the coal-fired plant. The effluvia from the smokestack and any runoff from the ash pile are a far greater hazard than anything coming from the nuclear plant under normal circumstances. Yet people perceive the nuclear power plant will cause them to get cancer and other illnesses. Even after the Three Mile Island accident there were no increases in cancer or other radiation related illnesses. (Some initial studies stated there were, but review of those studies by the CDC found some creative editing of the health statistics to 'prove' the case. Once all the raw data was reanalyzed those alleged increases in cancer cases disappeared.)

Over the years it seems to me the the perceived risks have received far more attention (and money) than actual risks. Efforts will be made to reduce risks that have little actual impact, but large risks will be ignored.

For instance, the NHTSA wants to ban the use of cell phones and other electronic devices by drivers of cars and trucks. All kinds of efforts are being made to codify that ban in to law across the nation despite the fact that the actual percentage of accidents caused by these distracting gizmos is unknown. The perception is that these devices are leaving a swath of death and destruction along the highways and byways of the nation to rival those caused by drunk driving. The NHTSA reports that 3092 traffic deaths were caused by distracted driving in 2010. That's one out of every eleven fatalities. How many of those were due to cell phone use or texting? The NHTSA doesn't actually say, though the article linked implies all of them were (but there was no actual number cited). The implication is that this is a major risk and that the government must "Do Something!' even though the actual risk is quite small.

But will the government spend a dime on something like removing homes from flood plains or barrier islands, obviating the need to constantly pay out to rebuild them again and again after they are destroyed? (Disclaimer: The gubmint did do that after the Mississippi River floods in 1993, relocating a number of towns to higher ground because it was cheaper to do so rather than paying out the flood insurance claims again and again and again and again, ad infinitum.)

Or will money be spent on things like crumbling roads and bridges, things that endanger us all? We must remember incidents like the Mianus River Bridge collapse on I-95 in Connecticut, the I-35 bridge collapse in Minneapolis, or the Nimitz Freeway collapse during the Loma Prieta earthquake in 1989 , all of which killed and injured motorists. (The Nimitz Freeway collapse occurred because necessary upgrades to the highway support pylons were postponed.) How many other others are out there waiting to happen because we haven't spent the necessary funds to reduce a very real risk? Maybe this is due to the opposite of perceived risk, where people see no risk and therefore think nothing needs to be done, yet the risk exists and is higher than many of the perceived risks people waste time and money dealing with. How much did these real incidents cost compared to what it would have cost to fix the problems in the first place? Do I really need to answer that?

The people need to learn how to discriminate between real risk and perceived risk, and to understand the relationship to diminishing returns. Otherwise we will continue to ignore real risks and waste ever more money on things that are minimal risks at best.

Over at Ace of Spades is a list of the things the Left fears should Obama lose the election come next November. Are their fears unfounded? In some areas, yes. But for the most part they are right to fear that much of the damage done by the Congressional Democrats since 2007 and President Obama since 2009 will be undone should Obama lose in November. When you come right down to it, the upcoming elections are about the wholesale damage perpetrated by the Left's minions over the past 6 years. Will the American people allow the ongoing dismantling of a great nation all in the name of some vague sense of "fairness"? And just who defines what is fair? (Of course the Left believe they are the only arbiters of fairness, even though many I have debated with really have no idea what 'fair' really is.)

The problem is that many on the Left don't see the actions that have damaged the economy as bad. They only see it as 'fair'. (I'm still waiting for someone on the Left to show me where it says life is supposed to be fair. So far, they haven't, nor do I expect them to.) Through observation over the years I have come to see that the Left's ideology is both economically and morally bankrupt. Never mind history's lesson showing it to also to be a murderous ideology, in the end.

There are plenty of examples of the fairness of socialism going back over 400 years to show just how bad their ideology can make it. One of their first forays into 'fairness': the Plymouth colony in Massachusetts.

During the initial years of the colony, the Pilgrims tried a social experiment, one that predated Marx by almost 300 years, that experiment being "From each according to his ability. To each according to his need." The results? Famine. Everyone wanted from the common larder, but no one wanted to work to fill it. In the end the colonists abandoned the experiment as a failure and from that point on the colony thrived.

Did the Left learn from that experiment? No, of course not. They've tried that experiment again and again (Nazi Germany, the Soviet Union, China, North Korea, Cuba, Cambodia, Laos, Venezuela, etc.) with the results being the same: economic and social collapse, and in some cases, mass murder. Such failures haven't dissuaded them from trying to pull that here. I have little doubt their reasoning is something along the lines of "But we'll do it better this time because we're better than the others were!" They've become a living example of Einstein's axiom about insanity.

So now we come back to present day and the Left's push to drive America in a direction of oft proven failure. Again we return to the so-called fairness doctrine as an excuse to justify large scale theft and interference in our day to day lives. Where does this call for fairness derive?

I figure it goes back to the egalitarian movements that drove things like the French Revolution. An egalitarian society sounds like a great thing, in theory. But in practice, such societies tend to be anything but, usually devolving to the lowest common denominator - mob rule. The French Republic after the Revolution didn't earn the sobriquet "Reign of Terror" for nothing. Of those that did not devolve into mob rule, it was a totalitarian government that drove everyone to be equal - equally poor, equally miserable, and equally terrified of their government. I doubt that was the dream of the egalitarians, but that's what their dream ended up being - a nightmare.

The problem with such egalitarian ideals comes down to this: they are based upon two concepts that are poor at best and base at worst, those being human emotion and a false understanding of human nature. Let's take a look at both of these to see where the Left got it wrong and continues to do so.

The first of these two, emotion, is the most troublesome. While a sense of fairness may be an admirable thing and something to which we can aspire, it should not be something based upon envy or greed. Unfortunately the Left's sense of fairness is derived from that very source. All you have to do is listen to their rhetoric in regards to fairness and I think you'll find it has nothing to with actual fairness and everything to do with envy. Oh, they won't admit to it, but when you think about it it makes sense. It all comes down to "Hey, that guy/girl/person has something I don't and can't afford right now! That's not fair! We/I should take it away from them because they don't deserve it!" But if they earned the money to pay for it then why shouldn't they be allowed to have whatever it is? Again, envy comes into play, this time in regards to the money earned to pay for whatever it is. Why should one person make more for their job than someone else for their job? Never mind that one job may be worth far more than another, may create more goods, services, or jobs than another. It just doesn't seem fair. But it is. Too bad far too many of the Left are incapable of seeing this.

The second of the concepts that lead the Left astray is their decision to ignore human nature. Or perhaps I should say their decision to ignore it as it happens to be rather than as they wish it to be. Of the two, the second is based upon pure fantasy. It seems one of the biggest fantasies that endure on the Left is that you can change human nature with enough education, indoctrination, or terror. It's been tried in a number of places, but has never yielded the expected results. The USSR tried for over 5 generations to create the New Soviet Man, a human with none of the ideological weaknesses attributed to capitalists. They wanted someone that would put the needs of The State (or The Good Of The People) ahead of those of their own, ahead of those of their own families. But that way lies slavery, where the individual is merely a replaceable cog in the machinery of state, without free will, to be sacrificed at whim and without a thought to their own welfare. But that goes against millions of years of existence, against millions of years of human nature. You can't overturn something so basic to human existence with education, indoctrination, or terror. Human nature wins out in the end. And in the end that's why Leftist 'paradises' have collapsed and disappeared into history. We're watching that happen now in Venezuela, a once prosperous nation turned into a land of want, broken down infrastructure, and the inability to even feed itself, all done in the name of 'fairness'. And this is what the Left wants to do here?

Thanks, but no thanks.