‘Efficient’ pricing and social cohesion in disaster recovery

In my view, one of the more shameful episodes in the Canterbury earthquake was the call by some for retailers to implement so-called ‘efficient’ pricing of crucial goods such as water. Among these was University of Canterbury economist Eric Crampton, whose article on the topic was even printed in the papers. Read his blog post In defense of price gouging. I often agree with Eric, but on this topic I just don’t.

I’m no big-city economist, and I seem to have misplaced the argument I wrote on the topic at the time, but essentially the problem is: if nothing is done, the resource just runs out and people who need it can’t get it. Absent some mechanism (rationing, gouging, &c) the criterion for access to the resource is speed and/or ruthlessness — the person who goes down to the supermarket & fills their ute with bottled water wins; everyone else has to rely on other means, such as asking their neighbours or others for help. I see efficient pricing as simply a means to shift the the criterion for access from ‘speed+ruthlessness’ to ‘accessible wealth+ruthlessness’. Those neither speedy nor wealthy (that is, almost everyone) will have to fall back on those same social structures of cooperation and goodwill to get their water in either case, and I don’t accept that privileging those with cash on hand is much of an improvement over privileging those who can get through the gate quickest.

However there is a non-economic factor to consider: in times of disaster, social cohesion is crucial. To large extent it operates on the notion that both the mighty and the humble are brought low; that we’re all in this together, and when the chips are down, Jack’s as good as his master. A resource allocation mechanism which punctures these illusions so as to damage social cohesion, such as by turning the poor against the rich, must deliver an enormous efficiency benefit in order to offset the harm it causes by sapping the goodwill upon which disaster recovery thrives. At a time when the foremost objective should be to promote social cohesion, ‘efficient’ pricing is an ugly imposition of individualism on the collective spirit.

Anyway, the point of this post wasn’t to relitigate that, or to criticise Eric, so much as to say that — by contrast — reports of price-gouging in post-flood Queensland have drawn a firm response from officials. Fair Trading Minister Peter Lawlor warned retailers of the possible strategic consequences of gouging:

“I think traders who attempt to profit from the misery of others during the floods should keep in mind that people have long memories. Even if there’s no official complaint, any quick returns they seek to make will be of little value to the business in the longer term.” [he said]. Mr Lawlor says if there is evidence they are breaking the law, they will be prosecuted.

More robust still was the statement from Ipswich Mayor Paul Pisasale, the same who warned looters that they would be used as flood markers if caught:

Ipswich Mayor Paul Pisasale says the city will remember businesses that try to take advantage of the disaster. “I know I’m not supposed to say [this] – but the health inspectors are on their way and the building inspectors are on their way after we finish this to see if we can help those businesses – [but] like hell,” he said.

This suggests a vigilante streak and willingness to bring the coercive force of the state to bear for social, rather than strictly regulatory reasons, and this is not usually a beneficial trait in a civic leader. However I think in cases like this there is some justification for such a stance. Pisasale’s position is a manifestation of the ‘Queensland culture’ called upon by Premier Anna Bligh in her speeches, and which may now be her political legacy. If it all came to pass, perhaps a disgruntled gouger might take legal action against Pisasale or his agencies for harrassment; but this would be an uphill battle, because Pisasale enjoys the protection of being right in the eyes of his society. After all; the only thing most Aussie battlers hate more than a government bureaucrat is a disaster profiteer. He is on firm ground as a representative of his people, because his representation rings true. His commitment is to the cohesion of his society. He is doing what crisis leaders do; efficiency be damned.

L

Stay classy, Atlases

VEXNEWS‘ headline, while verbose, really does nail it: GREEDY GERRY: Heartless Harvey fiddles at lavish Gold Coast party while Queensland drowns.

That’s Gerry Harvey, of Harvey Norman; and John Singleton, who (with Harvey) owns a thoroughbred brokerage aptly named ‘Magic Millions’. This photo and others were taken at its launch while much of the rest of the state of Queensland was underwater. From the article, with my emphasis:

When asked by a reasonably friendly Gold Coast Bulletin scribe about whether continuing the event in light of the hardship endured by the rest of Queensland, Harvey’s partner John Singleton’s response showed a remarkable lack of sensitivity even by the vulgar standards of the average Sydney spiv: “You feel a bit guilty having a good time when you see what is happening in other parts of Queensland and northern NSW, but on the other hand the Aussie way is life goes on.” Charming.

Context, however, is everything. There’s a good reference to the fall of Rome in there, but here’s the real bit of background which brings it home:

Gerry Harvey is closely associated with the brand of his many outlets where so many Australians buy the goods that furnish their homes. Many (fortunate enough to be insured) Queenslanders will come to file into these outlets in the days and months ahead when they want to replace all the things they lost. He stands to make (yet another) fortune. You’d think the man would show a little more decency during this sobering time for our country.

Well, you would — but in fact, it’s worse than that. Many of those worst affected by flooding actually aren’t insured for it — because insurers expressly exclude flood damage from their policies. Most cover storms (falling water in the local area) but not flooding (rising water, or that which originated elsewhere). The Queensland Department of Primary Industry has a summary:

A major obstacle that delays insurance claims is the different definitions for flood and inundation in insurance policies. The Australian Securities and Investments Commission (ASIC) defines ‘flood’ as:
“In general terms, flood damage refers to the inundation of a property by water which overflows from a natural watercourse, while storm and tempest damage refers to the inundation of a property by water as the result of a storm.”
Therefore, some inundation risks are covered by the term ‘flood’.
According to ASIC’s Consumer Understanding of Flood Insurance Report, both types of damage are usually linked to a storm, and a property may be inundated by both water from the storm and water overflowing from a natural watercourse. However, most insurance policies don’t cover damage to a property if caused by:
* inundation of water flowing from a natural watercourse
* inundation of water from both the storm and overflow of a natural watercourse (unless most of the damage is caused by stormwater)
* other phenomena, such as earth movement, even though this may itself have been caused by water from a storm.
The Insurance Council of Australia advises consumers to review the terms and conditions of their cover in their Policy Disclosure Statement.
If in doubt, contact your insurer.

It makes sense, as an insurer, to decline to offer cover for anything which might actually cost money; and there abides a regulatory environment which permits insurers to do just this. The topic, and related problems resulting from poor government policy, are covered in some detail in a column by La Trobe University disaster researcher Rachel Carter in today’s Australian. Consequently, despite the present floods being declared the most severe disaster in Queensland’s history and with some discussion today that it may be the worst in the history of the Commonwealth, insurers were, a few days ago, saying that the losses to their industry would be modest.

(Sidebar: if you’ve not connected the dots, this is the same insurance industry to which the Key government intends to deliver ACC early in their second term. Don’t say you weren’t warned.)

And so it is as it ever was: even in an affluent, modern first-world democracy with strong disaster-response agencies, which likes to regard itself as an egalitarian nation where the “little guy” gets a fair suck of the sav — when push comes to shove the big guys make out like bandits, and the little guy goes under.

In both cases, literally.

L

On a lighter note: Machine of Death

Not that the Rolling Stones have destroyed us — I mean, you can’t always get what you want. You know what I’m saying? Brown sugar. I have no idea what that means.  -- Glenn Beck, The Glenn Beck Program, October 27, 2010

On 26 October 2010, the guy who writes the marvelous Dinosaur Comics and a bunch of others self-published a book (because nobody would publish it for them) of short stories based around the idea of a machine which could tell you how you would die. The book is called Machine of Death. They happened to choose October 26 as the publication date without knowing that Glenn Beck’s latest tome of dangerous absurdities with the suitably loony title “Broke: The Plan to Restore Our Trust, Truth and Treasure was to be released on the same day. While it’s nice that Machine of Death pipped Beck’s book in the amazon.com sales rankings on opening day (proof), what’s most wonderful about this little episode is that it so incensed Glenn Beck that he had a wee rant about the book on his widely syndicated radio programme. It’s so gloriously insane, there’s nothing to do but quote it in full:

And I want to tell you that, um…our books are ALWAYS #1. And I find it REALLY fascinating, FASCINATING, that if you go to Amazon.com, Broke is number THREE. And the two books that are ahead of it — one is Keith Richards’ Life, which is getting a TON of — you know, that’s everywhere.
But this is a book about, you know, how he snorted his father’s ashes, after death. (sarcastically) THAT’S cool. This is the SDS [Students for a Democratic Society] book. This is for all of the — this is for [union leader] Andy Stern who’s all, I guarantee you he’s on the phone and has been the last few days, you know, with people like, you know, Bill Ayers going “All right, DUDE! Ah, do you remember when we were rolling around in the mud like animals? Remember that? This guy was smoking ash — you know, smoking his dad, and, and, popping stuff into his veins? Ah, those were the DAYS, man.” And then William Ayers was like, “Whaddaya mean, those were the days? I’m still doin’ that stuff, man!”
So that… “culture of death.” And it’s an escape into the past, of, you know, the Woodstock stuff.
And then, the #1 book — TODAY, at least — is Machine of Death. And it’s a — collected stories about, you know, people who know how they’re gonna die. Haowww!
So you have DEATH — I know it’s called Life, but what a life it is, really! It’s a culture of death! OR, “How do we restore ourselves?”
These are the — this is the left, I think, speaking. This is the left. You want to talk about where we’re headed? We’re headed towards a culture of death. A culture that, um, celebrates the things that have destroyed us. Not that the Rolling Stones have destroyed us — I mean, you can’t always get what you want. You know what I’m saying? Brown sugar. I have no idea what that means.
— Glenn Beck, The Glenn Beck Program, October 27, 2010

This, as if it needs to be said, is the other side of the Angel of Death ad I wrote about the other day; what happens if the font of inchoate hatred which powers the Tea Party movement isn’t carefully channeled through propaganda wizards and filmmakers and spin doctors. Wonderful. Frightening.

L

Coming this Fall: the Battle for America’s Soul

Imagine that title in scary-movie-narrator-voice. Via Pascal’s Bookie, a simply magnificent piece of propaganda from Personhood USA.

This two-minute ad is superbly done. It frames Colorado’s 1967 abortion law as the beginning of the end, and Amendment 62 in Colorado, which aims to declare that personhood begins at the moment of fertilisation, as the beginning of the battle to save America. Amendment 62 is up for the vote at the mid-term elections in November.

What we have here is clearly not the work of amateurs, nor of itinerant cranks in trailer parks, as many (including myself) have mocked the Tea Party movement. It draws together all the conventional Tea Party wisdom about what’s wrong with America into powerfully truthy narrative: start with a misappropriated Jefferson quote; follow up with Semitic “men in black robes” who hate truth, justice and the freedom and “legislate from the bench”; portray the fringe radical rump of conservative white folk as a valiant oppressed minority group; intolerant millennial-cult hypervigilance as the American Way; Obamacare as morality and human life being bought and sold as a commodity (oh, the irony!); and most crucially, Obama himself as the Grim Reaper, the lynchpin of it all, with the caption “Then the Angel of Death arrived, and Hell followed with him”. The whole thing is capped with fireworks and the Statue of Liberty, a Daisy-esque girl fading to black and a fist-pumping don’t-tread-on-me baby. And the soundtrack really just speaks for itself.

The whole thing is absolutely barking. In the cold light of day it’s nothing more than a Dan Brown plot. It’s fevered stuff, wound up to eleven to inflame passion and suppress reason. But that’s the whole point: this ad is basically the movie trailer for the upcoming battle for America’s soul, coming soon to a screen near you. Just sit back, let it wash over you, and marvel at what that country has become.

L

The Perils of the Dark Side

Via 3 News journalist Patrick Gower on Twitter, the news that Pita Sharples is the keynote speaker at the Destiny Church annual conference this Labour weekend. Concerning news.

Except I’m not sure it’s completely accurate. According to the Destiny press release, Sharples is the keynote speaker at the Friday night Awards & Recognition event which kicks the conference off, while (who else) Bishop Brian Tamaki is the “keynote preacher” for the weekend-long event. I think this is an important distinction: it’s appropriate for Sharples, with a lifetime of support for Māori excellence, to be present for an event which celebrates achievements in “business, management, the health and social services sectors, Pacific arts, family breakthrough and contribution to at-risk youth” for a large and largely Māori organisation, featuring pasifika and kapa haka performances to boot.

But that’s quite a different thing to lending the imprimatur of his status as the co-leader of a government party and Minister of Māori Affairs to the shady cultishness of Destiny’s main event. This is not to say that Sharples should shun Destiny outright: after all, as a kaupapa Māori politician he does represent some of the group’s members, and many non-members who share some of their values. Such ‘Dark sides’ of support exist for almost every party; the Greens have their crazed dark-green environmentalists; Labour has the blue-collar rednecks about whom I’ve written previously; ACT has mostly sucked away the white-collar rednecks (and doesn’t mind admitting it) from National, but the Nats still have the worst offenders among the farming lobby and many of the least-savoury Christian sects (much of Destiny undoubtedly included). For all that they might be abhorrent to some, these are all legitimate interest groups and — within reasonable bounds — they must be tolerated and their needs entertained in a free society. Their members have as much right to democracy as anyone else, but (as with any fringe group) politicians must be extremely circumspect about the type and quantity of support that they grant.

There is a danger that Pita Sharples will be seen to pander too much to Destiny; and indeed a danger that he does pander to them. The māori party paddles turbulent waters at present; having compromised very heavily on the Marine & Coastal Area/Takutai Moana legislation to replace the Foreshore & Seabed Act, and now finds that Faustian bargain under attack both from the ACT party without and from Hone Harawira within. Despite the former, and probably because of the latter, they have been very quiet lately. Although they — ironically — share some common ground with Labour on the Takutai Moana bill, there remains a very large gulf between them; not least because Labour’s own conference signals a much more classical materialist direction than that which has previously obtained. Sharples and Turia are no fools, and can see that remaining a client of Key’s pragmatic-instrumentalist National party is a hiding to nothing — even with the ACT party likely out of the picture after the next election, the likelihood that they can maintain common cause once the other has outlived its immediate use seems slender. So they feel like they need another support base, and it must be very tempting to team up with a charismatic leader such as Brian Tamaki at a time like this.

It would be ruinous to do so. Most obviously, this is because outside of his most loyal followers — his 700 Sons — Tamaki’s is an illusory sort of strength, based on the smoke and mirrors of a showman’s art rather than upon deep loyalty and conviction. This much was clearly shown in the 2005 and 2008 elections, where the Destiny Party (and later the Family Party with Destiny’s express endorsement) failed to come close to success, due largely to a lack of internal cohesion. Destiny has failed to demonstrate — even at the height of its profile five years ago, under a government largely hostile to it — that it could mobilise a meaningful number of votes.

The second, and by far the more important reason, is the abhorrent nature of the policies and principles Destiny stands for — crude Daddy State authoritarian Christian conservatism with a brownish tinge; illiberal, intolerant, homophobic and misogynistic, quite opposed to where Aotearoa is heading. And that’s to say nothing of the corruption and appalling social dysfunction endemic to the evangelical cults of which Destiny is an example. The sorts of scandals which currently rock the church of Tamaki’s own “spiritual father” Eddie Long in the USA must undoubtedly also exist within Destiny. This is essentially the same package of qualities which turned the Exclusive Brethren to political poison for Don Brash’s National party in 2005. Because of this deep and fundamental disconnect, and New Zealanders’ innate distrust of folk who think they’re ‘exclusive’ (especially if they’re brown, wealthy or religious), the reality is that an alliance between the māori party and Destiny would likewise be poison, and would probably circumscribe any future prospects of working with either of the two main parties, not to mention utterly ruling out the Green party — with whom the māori party shares the most policy in common.

So there is no easy course for the māori party in the long term; the swell is heavy and the winds both strong and changeable. But to extend the nautical metaphor, Destiny is a reef; not an island. Better that they paddle on by their own course and seek more solid ground.

L

Performance art

Listening to Tao Wells’ stone-cold crazy performance on Radio New Zealand’s The Panel this afternoon (audio, starts at about 19:30) it’s pretty clear that the whole thing is simply a continuation of The Beneficiary’s Office, his performance art project.

I’m not sure what the endgame is, beyond driving publicity for Wells and ‘The Wells Group’, the self-styled PR agency running The Beneficiary’s Office. But fundamentally this is the only explanation for the character who fronted The Panel. The studied eccentricity of his characterisation and rhetoric — the Leninesque styling and cheap, ill-fitting suit; the suggestion that he might replace Paul Henry on Breakfast, using the scandal du jour as a springboard for publicity; the incoherent, aggressive, entitled, self-indulgent indignant victimhood of his media presence — he is exploiting the fourth wall illusion, the audience’s naïve impression that they’re separate from the performance; that the show stops at the proscenium arch. To do so Wells is reading from the big book of Glenn Beck and Sarah Palin. His project is a little bit of inchoate Tea Party wingnuttery turned back on an issue so close to the wingnuts’ hearts that they can’t see the mockery in it. No matter that his actual argument doesn’t bear the slightest bit of rational scrutiny and is all but completely obscured by his outrageous delivery — this isn’t the point. The point is to suck people in and involve them in the performance by lighting the flame of their hatred. To make them attack the tar-baby. As Palin’s own idol Ann Coulter said, paraphrasing Joseph Göbbels and George Orwell in her diatribe Slander: “Any statement whatever, no matter how stupid, any ‘tall tale’ will be believed once it enters into the passionate current of hatred.”

So to everyone who’s found themselves incandescent with righteous fury, uttered slogans like “the world doesn’t owe you a living!” or called for the disestablishment of Creative NZ or defended Wells and his absurdist position — this includes the media who’ve covered it from the ‘benefit scandal’ angle; obviously WINZ, who’ve cut his benefit; and most notably David Farrar and the KBR, whose response has been nothing short of magnificent — you’re part of the show. You have been trolled.

So as far as that goes, well done, Tao Wells.

L

Fighting like you mean to win

I had meant to write something substantive on the politics-of-not-playing-politics evident in all aspects of the Christchurch earthquake and its aftermath, but circumstances have conspired to prevent me from doing so. I also have two deadlines in the coming week. So just a quickie, via George Darroch: What climate activists need to learn from the NRA and the gun-control wars.

fail

I’ve made the argument before that climate change, having as it does the weight of scientific orthodoxy behind it, should be an easy win in the battle of ideas. That it isn’t, I believe, is due less to the powerful business cartels and their conspiratist minions arrayed against it, and more down to poor strategy and coordination on the part of those responsible for ensuring that the findings of the science are adequately promulgated throughout society, and for ensuring the policy responses to the problem are appropriate.

fail

As gun control advocate Robert Walker argues in the linked post, those people — both the scientists and the political actors — can learn an awful lot from the NRA. Despite being pretty far out on the lunatic fringes even in the US political context, the NRA has simply phenomenal support both among gun users and those for whom the specifics of the debate have no direct relevance. They have this degree of support largely because they have succeeded in propagandising that issue to the point where its symbolic aspects matter more than its functional, material aspects. Doing this — breaking your topic from being a policy matter to being a symbolic matter in the public consciousness — is hard and complicated work, and you have to fight as if you mean to win; to not underestimate your enemy or permit your campaign to be hijacked by incompetence and vainglory. But if the NRA can do it with an issue like gun ownership, arguing for which on rational policy bases is deeply problematic, then surely those responsible for climate science can do as much. How they might do so is sketched in Walker’s article.

L

‘Come back Helen Clark, all is forgiven’

Thus spake John Ansell, who’s back with another cracking demonstration that he’s the nation’s pre-eminent racial fearmonger. He really is peerless in this regard.

And there’s plenty more where that came from.

Incidentally, you can read Scott Hamilton’s (and others’) thorough and systematic destruction of Ansell’s rather slippery and Victorian views on race, ethnicity, culture and religion (yes, Virginia, ‘Māori’ is a religion) in the comments thread of this post at the excellent Reading The Maps.

L

Personal narrativium

From the NZ Herald, Why I should be the mayor:

Len Brown:

Every day I wake up and, for one thing, I’m thankful I do wake up. But secondly, I have the greatest job in the world and it’s a job that enables me to make a difference, to really change people’s lives, to deliver change, new direction and positive growth in the community. I can sort of perform little miracles around our place. When the change occurred I wondered whether I could shift this position to the community that has raised me since I was 7. I have very quickly found that passion. It has been an extraordinary journey thus far and the opportunity to deliver something by the way of step change and extraordinary redirection of Auckland and taking up of its potential, a marrying of our business dynamic with our community aroha and love is something I believe is an extraordinary opportunity, and I would like to take that opportunity.

John Banks:

At age 18, I decided that I would balance the family ledger by joining the police. The Auckland police told me in no uncertain terms that I was a lowlife son of two shitbags and there was no place for me in the New Zealand police. Twenty-five years later, I became the Minister of Police. I’m doing this to balance the family ledger.

So it’s “boundless enthusiasm for community miracles” squaring off against “individual crusade for redemption, nothing to do with Auckland” in the Supercity mayoral battle. If that’s all there was to it, Banksie would be a lost cause.

L