One of the NYT opinion columns today, from Nicholas Kristof, is a lovely look at the comparative costs and benefits of schools v. missiles in US - Pakistani foreign policy. It asks whether or not it's more effective to fight against or empower the villages and tribal areas of Central Asia. Tough question!
This is the money quote:
Each Tomahawk missile that the United States fires in Afghanistan costs at least $500,000. That’s enough for local aid groups to build more than 20 schools, and in the long run those schools probably do more to destroy the Taliban.
(Of course, is it worth wondering how important it may be that the half a million dollars goes into the "US economy": the coffers of Raytheon, KBR, and Lockheed. The school, on the other hand, just saves us the bother of producing such fine weapon systems.)
The story reminded me of some of the lessons from the book I'm reading right now, Jane Jacobs' The Nature of Economies.
In her weird way, Jacobs is trying to describe alternative methods of economic development, based, strangely enough, on her arguments about city sidewalks. She argues that economic activity follows the same rules as ecological growth, developing increasingly complex chains of energy usage and interdependencies. Whether or not you're talking about co-dependent relationships in a ecosystem, or the kinds of mutually beneficial relationships that exist between firms in cities, each reflects basic rules of creativity that stem from diverse uses of natural and human resources.
So in this model, the missile represents capital entering the local economy, making an "impact", and leaving no economic trace beyond increased demand for anti-missile systems, military training, AK-47s, etc.
The school represents investments in human capital like literacy, allowing for a far broader types of resource uses in the future. Jacobs' ideas seem to be increasingly accurate, particularly meshing with ideas like microlending. And she's particularly interested in how these sorts of metrics can be applied to cities, which she believed were localized stockpiles of human capital and interconnected, webs of relationships that were "alive" with the ability to adapt, change, and develop new kinds of economic activity.
I just finished reading Jane Jacobs's "Cities and the Wealth of Nations", in which she takes the ideas about import-replacement she established in "The Economy of Cities" and expands it to discuss macroeconomics. I really enjoyed it, and it talks a lot about economic development in backwards places like Pakistan.
ReplyDeleteI haven't read "The Economy of Cities" yet, but I wish I had reads it first, because this one really builds off of it.
I like this last one the most. The main caveat is that she employs a very strange "dialogue" form where she embeds her arguments in a conversation between four or five people, most with unusual names (Hiram, Hortense, etc.). They all pretty much sound exactly like her.
ReplyDeleteIt is certainly not a book economists would ever endorse (Krugman excepted?).
It's one of Jacobs' assets as a writer and thinker that she doesn't fit the conventional mold of economic writing -- she is much more of a philosopher than an economist, which makes her that much more interesting. See Nicholas J. Slabbert's article on this aspect of her in the Aug 2007 issue of Urban Land Magazine, "Jane Jacobs: Political Economist of the City."
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