Tuesday, June 10, 2008

Five Good Questions, Five So-So Answers

This is as close to a platform as TheRadicalModerate is likely to come. I am quite certain that the five questions posed in this document are the really big questions that confront our society in the next twenty-five years. Much of the thinking in this piece has been posted here, here, here, here, here, and here.

All of these questions come with some baggage; there are ugly truths that simply aren't going to change. Those truths require choices to be made to minimize their unpleasant consequences. I have outlined some possible policies that might help our society reach an accommodation with those truths but I am uncertain about many of them.

How we respond to these questions, what policies we put in place to address them, will determine the nature of our society fifty years from now. Note that we can ignore any or all of them but deciding not to decide is always a decision. In time, the answers will all be clear. It's better if the answers aren't of the form, "We can't do anything about that any more."

Question #1: How do we provide energy for the 21st and 22nd centuries?

This issue sits at the intersection of three crises, all of them national security issues: Flat-to-reduced supply and explosive demand guarantee that oil will be an expensive resource worth going to war over. The revenue stream from oil is going to states who are antagonistic to the West and who will use that revenue stream against the West's interests. And finally, the downside risk of global warming is too large to attempt to shift to alternative fossil resources like coal.

Global warming is probably real and the consequences of it are probably sort of undesirable. They are probably not catastrophic. Even if they are, an energy policy that only revolves around penalizing the use of fossil fuels is a loser. The solution is going to be found in technology. Use of non-carbon energy sources direct warming abatement technologies, or both, are going to be the answer.

Ugly Truths

The price of oil may be in a short-term bubble, but we're not going to see $70/bbl oil again. The price just goes up from here.

There is no short-term fix to the price of transportation fuels. Nothing will work except for price controls and they will cause crippling shortages.

Domestic US drilling will help only modestly. Oil is fungible, so any domestic oil production merely goes to defraying the cost of what the US would otherwise buy on the world market. Since US production is about 6% of the world market now and it's unlikely that we can do more than double our production, you're only looking at increasing world supply by 4 or 5 percentage points. That's good for something, but it's not going to drop the price below $80/bbl.

Cap-and-trade is a shell game the allows at best for gaming the system and at worst for outright fraud. It's a cowardly way of hiding the costs of the resource.

Conservation is important for reducing costs but nothing is going to prevent the second-tier nations from growing explosively. Anything the US does to conserve will be gobbled up in short order. Ultimately, we'd be better off subsidizing green production than we would conservation. Conservation will occur on its own as the price of the resource forces the market to produce more fuel-efficient technology.


Policy 1A: Don't interfere with the market price of oil and distillates. Nothing will spur demand for alternatives like genuine pain at the pump. Furthermore, any attempt to control oil prices will result in shortages.

Policy 1B: Impose a carbon tax on crude oil, coal, and natural gas. The tax should be per unit sold, not per value. From the proceeds, provide:

  • Tax credits for the working poor.
  • Deployment credits for non-carbon-based energy--including nuclear!
  • R&D funds.

It is essential that carbon taxes don't go into the general fund. The revenues from this tax are going to be a big, fat, juicy target for legislators. They need to keep their grimy mitts off of them.

Policy 1C: Deter any attempt to seize or interdict Persian Gulf oil by maintaining an overwhelming military presence in the Northern Gulf.

Question #2: How do we deter small states and non-state actors when they have access to technology as deadly as that of large states?

The age of asymmetric power is upon us. While the US and other superpowers will still excel at reducing any form of hostile organized military to a smoking ruin, improvements in weapons and communication technology allow non-state actors to play with the big boys and not get caught. To make matters worse, small states have no compunctions about using non-state actors to do their dirty work for them. This makes retaliation at least morally ambiguous, at worst impossible. And without the threat of retaliation, there is no deterrence.

As the lethality of the technology increases, the damage that can be inflicted on a state by an individual or small group rises above the point where it can be deemed an acceptable loss. A modern state's first obligation is to protect its citizens. That obligation is not absolute; a state can't expend infinite resources or excessively restrict civil liberties to save a single life. But neither can a state allow thousands to die at a throw without responding to the threat. Those responses have costs, in money, lives, and in civil liberties. Nevertheless, a strategy for eliminating the threat is imperative.

Ugly Truths

Holographic intelligence, surveillance, and covert action are the major tools for preventing terrorist organizations from carrying out successful attacks. This implies the end of public privacy as we know it.

In urgent situations, torture will be used. The trick is to limit it to only the most extreme situations. You can do this by keeping it illegal and relying on deterrence to prevent interrogators from using torture unless they feel that the public good outweighs the punishment, or you can institutionalize torture with a set of rigid, well-thought-out regulations. The one thing you can't do is prevent torture from occurring.

Right now, the West has no deterrent against WMD, because small states don't believe that a terrorist WMD strike on the West will cause WMD retaliation against a state. The connection between the terrorist and the state is too easy to conceal and the cost to innocent civilians in that state is too high.

Nuclear proliferation will continue to occur because the penalties associated with proliferation--either by the proliferating states or by the entities that supply technology to those states--are very mild. Furthermore, the advantages to having a bomb are so apparent that any state that wishes to reduce its vulnerability to a superpower will pursue the technology.


Combating asymmetric threats requires a two pronged approach.

First, to achieve the level of identification, intelligence, and surveillance of terrorist threats requires a fundamental redefinition of the covenant between government and the public regarding privacy.

Policy 2A: The US needs to increase public surveillance exponentially, with improved international monitoring legislation, funding for camera networks in public places, and better emergency responder technology. But the obvious downside of surveillance, i.e., that the government gains more power over the individual, needs to be offset.

Policy 2B: The best way to achieve this offset is for the surveillance to be transparent. The public should have access to the surveillance. Even further, government transparency needs to increase. A policy of opening up all but the most crucial national security secrets to the public is essential.

Policy 2C: But the ability to "watch the watchers" is only half of the new covenant. There must be increased, and even more formal, guarantees on privacy outside of the public forum. Surveillance inside your home and of your medical and psychological status must be even more restrictive than it is now.

Second, we need to be able to deter state sponsors of terrorism in all cases. Nuclear deterrence in the Cold War was based on the idea of mutual assured destruction. The asymmetry of the situation renders that idea useless. But the odd thing is that small states are almost certain that their actions will not result in annihilation because Western public opinion won't allow that to happen. That can be changed with a few targeted policies.

Policy 2D: Despicable though it may be, we need a torture policy. Torture should not be left to the judgment of officers willing to accept the consequences for their actions to promote the public good. Some of those judgments will be too casual. Others will simply be wrong. A torture policy should allow torture only with the consent of the President, require informing Congress, and be allowable only in cases where time-critical national security interests are manifest.

Policy 2E: We need to extend a "nuclear umbrella" over the Middle East with regards to Iran. Any nuclear attack by Iran on another country must be regarded as an attack by Iran on US interests, requiring a disproportionate response in kind.

Such a policy profoundly reduces the utility of nuclear weapons to Iran. It doesn't prevent them from being crazy but it does prevent them from threatening their neighbors in the more conventional ways. Unfortunately, this does nothing to prevent Iran or other rogue states from recruiting terrorists to do their dirty work for them.

Policy 2F: This final piece of the deterrence puzzle will be more difficult. We need an international consensus that certain nuclear powers will be designated "probable sources of nuclear terrorism." In the event of a terrorist nuclear attack, there needs to be agreement that these states--all of them--will be subject to disproportionate retaliation. If a direct link between a state and the offending terrorist group can be proven, the government of the offending state should be subject to annihilation. The means of this annihilation may include use of nuclear weapons.

This is draconian. But this sort of measure is the logical extension of the Cold War mutual assured destruction doctrine to a set of asymmetric threats. It deters states on the list from trying anything. More important, it incents these states to get off the list. That's the real goal.

Question #3: How do we encourage global growth and ensure that everybody can make a living for their family?

Globalization, enabled through liberal free trade policies and modern communication technology, has done more to lift more people out of poverty than any historical trend in human history. Being "anti-globalization" is not only silly, it's futile. Short of a worldwide catastrophe, the trend toward globalization will continue.

Ultimately, the trend toward globalization is indistinguishable from the trend toward increased productivity. High-skill or low-cost labor can produce more goods faster, at lower cost. Productivity improvements have two consequences on overall employment. First, overall employment in a high-productivity industry falls once demand is largely satisfied.

However, those jobs that remain tend to pay better as one worker can add more and more value. As long as workers possess the requisite skills, they will become more and more affluent. However, for workers that don't have valuable skills, the future is grim. This is the principal force behind the income disparities that are showing up in the United States.

As long as the market for goods and services continues to grow through liberalized trade and increased economic development, the consequences of productivity are overwhelmingly positive for skilled workers. The problems lie with the unskilled workers.

Ugly Truths

The trend toward globalization is unstoppable. If we could stop it, we would deny billions of people access to a better life. Stopping globalization is immoral.

Higher productivity results in loss of jobs in an individual industry or service. Those jobs that remain require specific skills but they pay very well.

Unskilled labor is a dead-end. It will always disappear as increased productivity sweeps through an industry. Even in industries that need unskilled labor, the competition for those jobs will guarantee that wages stay low.

Productivity may also wipe out whole classes of skilled jobs as automation renders the skills valueless.

Ultimately, the only hope for unskilled workers or workers whose skills have become outmoded is education. And, since some workers are ultimately ineducable, one of the results of globalization and increased productivity is a class of chronically poor workers.


Policy 3A: Nothing can interfere with free trade. Without it, growth ceases and the whole thing comes crashing down.

Policy 3B: We need to re-focus childhood education on preparing children for a lifetime of acquiring skills. Chances are that at least one career for which an American is trained will become outmoded in his lifetime. Unless children are skilled in the art of acquiring new skills, the dislocation caused by losing a carefully-honed skill will be incredibly painful.

Policy 3C: A productive, low-cost system for adult education must be developed. Such a system must allow displaced workers to identify skills for which they have an aptitude and acquire those skills within a fairly short time (probably 18 months or less).

Policy 3D: The only way the adult retraining can succeed is if the worker can support his family while he retrains. The unemployment system needs to be changed to provide credible, whole-family support during retraining.

Policy 3E: We need to recognize that one of the consequences of a modern economy is a (hopefully small) permanent underclass of untrainable workers with very low productivity. These people don't necessarily deserve a good life, but they deserve a life that is something less than desperate. We will need permanent welfare policies that strive to reduce this class as much as possible, but which acknowledge its existence.

Question #4: How do we value human life and combat human suffering in the face of increasingly expensive, but also increasingly effective, technology?

Biomedical technology is exploding, but so is the cost of that technology. We can do more to the human body than ever before, but as we do so, the elasticity of medical care increases.

Consider: Two hundred years ago, it was simply impossible to extend a person's life span from seventy-five to eighty years. Yes, some people lived to be eighty but medicine had nothing to do with it. Today, such a five-year extension can be had for a price, although that price is often hundreds of thousands of dollars.

In the near future, as drugs go off patent and procedures become standardized, the cost of that five-year extension will likely drop to something under $100,000. But what about the extension of life from 80 to 85? From 85 to 90? Both of these are likely to be possible, but the price will be even higher. A trend is discernable: As time increases, the ability to live that last extra five years will increase, with a higher and higher price, faster than the ability to live the previous five will come down in price. Average life expectancies will go up even as the gap between the life expectancies of the richest and poorest gets wider and wider.

When we talk about universal health care today, we start with an unconscious premise that high-quality care should be available to all. Baked into that premise is the assumption that modern medicine has finite capabilities, which prevent it from expending unlimited resources on a single patient, because the expense rapidly hits a law of diminishing returns. That's already not really true and it will be less and less true in the future. If we want medical care to be available to all, the rationing of that care will become more and more draconian. That rationing can either occur through market mechanisms or through government command-and-control mechanisms.

At the same time that we confront the problem of arbitrary life-extension, medicine presents us with another dilemma: As genetic engineering, proteomics, nanotechnology, cybernetics, and biomechanical engineering all merge, we will be confronted with an increasingly fluid definition of what it means to be human.

Abortion, stem-cell research, the Terri Schiavo case, the Oregon assisted suicide statutes, selective culling of embryos from multiple in vitro pregnancies, even performance-enhancing drugs in sports--all of these are merely the leading edge of a set of ethical dilemmas that will become increasingly exotic and difficult.

A lot of the above is about health care, but it's important to recast the question away from health care and more towards a question of quality of life. We have been fortunate so far to have lived in a era where the ethics of human suffering and the economics of medicine have had only modest coupling. That era is at an end. From here on, the phrase, "your money or your life" is going to take on increasingly ominous undertones.

Ugly Truths

We can't afford it all.

The vast majority of human beings want to live long, healthy lives. They will resist any system that reduces innovation toward that goal as they will resist any system that rations care toward that goal.

A greater and greater percentage of total health care expenditures will go toward care in the last five years of life.

We have a huge stake in continued medical progress. It is only through this progress that life spans increase and suffering is alleviated. It is only through this progress that humanity can improve its performance, its capabilities, its very nature.

We can choose to provide some medical services collectively in the interest of fairness but we can't mandate equal treatment for all without mandating the end of medical progress.

We simply don't know what the next ethical crisis will be, other than to know that there will be one. Each crisis needs to be examined seriously, because each one defines who we are.

We can only have the ethics we can afford.


Policy 4A: Health care needs to be segmented into three extremely well-defined categories:

  • Routine care, consisting of all treatments and procedures that a nominally healthy human who isn't of advanced age might incur, absent accident or catastrophic disease.
  • Catastrophic care, consisting of all treatments and procedures that an otherwise normal human might incur in the course of accident or catastrophic disease.
  • Geriatric and end-of-life care, consisting of treatments and procedures likely to be encountered as the bodies of elderly humans wear out.

Each of these categories needs its own policy.

Policy 4B: Routine care is by definition uninsurable, since it occurs routinely. Every time you attempt to insure a routine expense, the insurer will pass the average expense directly on to the insured. It is more efficient to acknowledge this fact and set up HMO-like organizations to deliver these fairly simple services in bulk. For all but the poor, the expense of these services must be borne directly by the consumer. The poor should be subsidized to allow them to pay for these services. Direct payments will ensure that competition drives the cost of routine care down as quickly as possible. Since routine care is 30% to 50% of all care, such a policy should save quite a bit on the national healthcare expenditures.

Policy 4C: Catastrophic care should be addressed by insurance. Individuals should get to choose the level of deductible they can afford, but catastrophic insurance should be mandated to have guaranteed enrollment. We'll need some rational guidelines on how insurers group and classify enrollees, since that classification affects their premium. As with routine care, the poor should be subsidized so that they can purchase a reasonable, low-deductible policy.

Policy 4D: Geriatric and end-of-life care simply cannot enjoy unlimited support through public funding. The costs will spiral out of sight. The proper policy here may be to grant the elderly a yearly stipend for care, based partially on their assets. That stipend can be used for buying insurance or buying care directly. Every person would obviously have the right to use their own money.

This is, again, draconian. It is somewhat mitigated by the fact that many old people are fairly well-off. But ultimately, the main cause of death is going to be lack of money, not just simple old age. We need to implement policies that recognize this fact.

Policy 4E: We should be liberal in our definition of human life, but conservative in restricting activities that will degrade the quality of life for all. I think this is the right formulation for deciding these emerging ethical quandaries. Under this guideline, abortion would be legal. Performance-enhancing drugs would be legal. Denying routine and catastrophic health care services would be illegal. Assisted suicide would be legal. Creating civilization-destroying cyborgs would be illegal.

I can't do better than this. This is an area where we're going to have to be fast on our feet as a society.

Question #5: How do we keep democracy healthy in the face of explosive changes in media technology and intensified lobbying?

Our democracy grew up in a time of extremely inefficient communication. The slow exchange of information had two consequences. First, if you wanted to be involved, you had to work hard to acquire the minuscule amounts of information there were about an issue. Second, you had plenty of time to ponder and debate before any one tried to commit the government to a course of action.

First radio, then TV, and now the internet have ratcheted up the quantity and speed of exchanged information by several orders of magnitude. All citizens are now drowning in a sea of ideas. Furthermore, just because there's more information doesn't mean that it's higher quality. Distinguishing between good ideas and bad is harder than ever.

The speed of information exchange hardens positions before they've had a chance to be debated. Polarization results when groups, and then groups of groups, self-select for opinion orthodoxy, leaving no room for dissent and marginalizing potentially good ideas or even good objections to good ideas. Government moves faster and is more vicious.

The volume of information makes it easy for those seeking advantage from the system to hide in plain sight. Lobbying and the money accompanying it becomes more and more sophisticated, making its use more opaque and unobvious. As issues are diced into subtler and subtler gradations, the intent of legislation becomes ever more obscure, ever easier to conceal advantage to individuals to the detriment of the common weal.

Ugly Truths

A free press is a press with a profit motive. The profit motive requires that reporting be interesting and popular, not that it be important.

Polarization is inevitable. The speed of information flow guarantees that opposition to any opinion can be mobilized. This isn't all bad, but it's bad when the opposition obscures the issues, rather than clarifying them.

Lobbying is essential. It is the most important feedback mechanism for government. While the press can criticize and mobilize opinion on easy issues, the lobbyists represent the nuts-and-bolts expertise in the details of policy. Bad laws are made with inadequate lobbying. But bad laws can also be made when the lobbyists' interests aren't made known to the public.

Populism will be ever more popular. Since it inevitably produces laws with horrific unintended consequences, populism has to be resisted.


Policy 5A: Implement a Sarbanes-Oxley for lobbyists and legislators. There is no reason why every contact with an elected federal official, outside of his immediate family, shouldn't be public record. There are obvious exceptions for national security but they're easy to define and enforce. If we, as citizens, are going to be subject to holographic public surveillance, then our elected officials should have the same scrutiny. If legislators can force corporations to be transparent, then they should be subject to the same standards.

Policy 5B: Don't restrict money in politics. Just make it transparent. The success of Obama's fundraising heralds a new paradigm for campaign finance, where big money can be ignored in favor of lots of small money donations. McCain-Feingold needs to be dismantled, or at least revised. Its transparency requires need to be enhanced. Its money restrictions need to be eliminated or at least reduced.

Policy 5C: De-classify and make transparent as much of the government's dealings as possible. This is hard; there are legitimate reasons to keep some information secret. But there are almost always more reasons to make it public.

Policy 5D: Leave the press alone, but realize that rational discourse is at a premium. It's not a horrible idea to have the government support a non-partisan, searchable database of issues, opinions, and policy ideas, and open threads for public comment. Good comments can be graded and promoted. The inevitable nastiness can be graded and ignored. It'll be a food-fight but one where official and non-official policy can merge and be reconciled.

No comments: