Nick Pinkston

Cheap Insurance for Climate Change

The debate on climate change is a divisive one where one side says the science is settled and the other are skeptical of science itself. I see both positions as being rooted in fundamentalism. 

The Al Gore et al. would have us believe the if we don't act the earth will become completely uninhabitable and devastated. Even though the earth has been this temperature before and life flourished. Sure there will be extinctions, but there currently are a lot of extinctions. 

On the other side, we'll call them Dittoheads, act as if "only" a 1% change is so minor as to not affect a system at all. I'd like to see if they'd allow me to replace just 1% of their blood with a solution of potassium chloride which occurs naturally in the body (anything natural must be benign right??). I think they'd be quite unhappy with the result. 

Instead of being closed-minded, I think that we should instead look at the problem pragmatically. There are risks on both sides: the environment could be negatively affected in the medium and long terms so as to be very difficult to reverse (especially habitat and species loss). On the other hand, the ROI of current methods is very low, and even imposing crippling anti-carbon incentives would yield very little in benefits.

For these reasons, I think the best approach is from an insurance point of view. In fact insurance companies already do. We know there is a possibility that global warming could significantly affect our lives on earth. We've seen that climate change has occurred in the past. Why wouldn't we at least want to buy some insurance? I'd propose a very slight carbon tax (<1% of gross) as a way of raising money for research into methods of reducing carbon: from alternate energy to sequestration. This approach would allow us to have minimal impact on the economy (there will be losses no doubt) while increasing the ROI our technology will have to solve the problem in the future. 

For the skeptics, I don't think you're wrong to question the Greens. Their ideas have their problems and extremism. Carbon taxation would be massive governance problem with massive control issues. The system would need a way of decentralizing control while maintaining proper incentives to avoid power grab issues - a very difficult problem. However, you already believe that our foreign policy has an obligation to stop terrorism worldwide which has caused less than 4000 direct deaths of Americans (very low compared to heart disease which kills 459,000 Americans a year. Comparatively, climate change could be a far worse problem. 

For those who claim that we're all screwed if we don't act now, I think you're right to be very concerned over climate change. However, if we really want to save humanity and the environment as a whole we need to act in the proper way. If you believe the practitioners of climate science, shouldn't you also believe the practitioners of economics? Neither group are able to predict what happens next week, but they're the best we have to look to. These experts recognize that climate change is a very difficult problem which doesn't have obvious answers. You should likewise be compelled to look at the research on the science and economics in search for these non-obvious. 

Climate change is a very real possibility that we should take seriously. There is a chance science could be wrong, but we should at least buy some cheap insurance to make sure we're not screwed. Both sides need to explore the real risk and benefits of the issue. It's not a black and white issue, like the media would us believe. In times of crisis, we need to keep a cool head and think rationally about the issues - not become fundamentalists.

The Tyranny of Taste

I was at a gallery crawl recently with my girlfriend, and aside from the paintings, she was checking out the people themselves - an eclectic mix to say the least. I noticed something that seemingly always comes with an arts event - snobbery. I'm sick of elite art being put on a pedestal. Taste is, if anything, a construct we develop socially. I find that it expresses itself in a very tribalistic fashion: hipsters and country-folk will most likely have very different tastes - due in large part from their social surroundings. 

I don't think there is anyway to say that one sense of taste is somehow better than another, but that's almost always how it's viewed. It's not just the "hip" making fun of the supposedly "vulgar" either. I'd say that I've heard far more "even I could paint that" comments about a Jackson Pollock than I've heard "that's so bland / mainstream" about a Thomas Kinkade. 

I've always been taken aback when one of my friends make fun of someone's taste. So what if your friend listens to mainstream pop - it's what they like. It doesn't even necessarily code for their "tribe" - though it's often well correlated. I've heard countless people draw false conclusions on someone due to what music they were playing. I know someone quite well who can both enjoy gangster rap and also discuss at length the finer points of Nietzsche - to name one of very many.

One of the most visible forms of taste is in the fashion of clothing. I see it as analogous to all forms of taste: that of a cultural signal. This is not to say that I'm divorced from the concept of fashion all together - I play the game as well. I see fashion as both for others and myself. 

I see this as a pragmatic decision - as it may be for the rest. I'd like to portray a few things:

• That I mean business, but that I'm casual/not-uptight.
• That I care about my appearance, but not to the point of vanity.
• That I'm not beholden to brands (I won't wear logos), but to quality.
• And to convince myself that I really am all of the above.

I was asked a question the other day: whether the pursuit of fashion as a career and passion is somehow antithetic to living a meaningful life. I'm still rather torn on this issue. I find that on the one hand "losing" a talented designer to fashion - as opposed to say designing products that change our lives in a more substantive manner (such as what Designer's Accord is doing), and on the other hand the pragmatist in me says that fashion could lead, in a very real way, to the furthering of these very same causes.

If I project the look of success and accomplishment, I have a better chance of influencing others to get more things done. It's a sad fact of life, but as a rationalist I must accept it. Perhaps a true injustice in the world of fashion is accessibility to even the basics of signaling fashion.

Look no further than to the success of campaigns like TOMS Shoes who give shoes to the Third World, and you'll see that it's in fact a real dilemma. In developing countries, if you don't have shoes you're not only uncomfortable and less healthy, but you're considered to be of a lower class. If we were to level the fashion playing field, we'd be able to bring true merits to the forefront of the conversation. This isn't to mention the fashion problems that plague even the wealthiest of countries in that ancient game of romance. 

This somewhat convinces me that there are still areas where fashion innovation (even in the non-functional aspects) is more than mere vanity and could actually have real humanitarian impact. This leads me to think that practitioners in this medium could have a nobel impact and hence one can be both a lover of fashion and a "good" person.

A Brief Case for Financial Innovation

Like getting fuel perks at the local gas station?

Like that you can use them while you use a credit card at the pump?

Like that you can lease the car that you drove to the gas station?

Like that cars are actually affordable by average people at all?

Like that you can pay for gas with dollars and not a commodity like chickens or oxen?

All of these are due to financial innovation. Fuel perks are an alternative currency. Credit cards are on-demand credit & electronic processing. Leasing is made possible by liquid capital markets and derivatives & swaps for auto resale & currencies. Global mass manufacturing can only work with complex financing (equity, debt, and combinations thereof), currency derivatives, commodity futures, and host of products that are all financial innovations.

I'm sick of people claiming that the financial industry "doesn't build anything". These, very often smart people, think that innovation is great in nearly every field, but that it's unneeded or even reckless in finance. I was at a meeting of scientists and engineers talking about economics, and they kept asking: "How can we stop financial innovation?!?". It's funny because I imagine what they'd say to: "Can't we stop X by banning research in that area?"

They do have a point in the short term though: often new financial products cause bubbles to form from poorly valued products and those can hurt people in the short term. In the long term though, these products are either discarded or refined. The problem isn't that new financial products are bad; it's that transparency in these financial products is bad. These people should be calling for transparency - not an end to financial innovation.

I think financiers (and no, not just "responsible" ones) should be given the credit for helping to create innovative ways to fund our dreams and cushy lifestyles. I'm not saying that I'm happy with the current oligarchy in the financial sector - far from it. I want increased competition and more innovation.

I don't care if they "don't make anything" directly - they provide the ability to. Ask an entrepreneur whether they'd prefer to have the skill to either raise money or physically "build things" - it's not the latter I assure you. Financing is a universal - every business, non-profit, etc. needs it. If you have money, you can pay the guys to build you something. 

If you don't have money, you need to talk to the finance guys - whether that's your rich uncle, a venture capitalist, or the bank down the street. Until we find another universal means of exchange, we're stuck with needing money to unlock many of our dreams.