Friday, October 29, 2010

Flux and Flexibility (Part Two)

The Hip-Pocket Fallacy is closely related to another theme I’ve seen in arguments lately. To begin, I’d like to offer up two rules of capitalism: One - change is inevitable; or, to put it another way, we are always in a state of flux and change is constantly occurring. Two - for every negative that comes from a change, there will be a corresponding positive.

It’s kind of like that old saying - the Chinese have the same word for ‘crisis’ as they do for ‘opportunity’ (which isn’t actually true, but is interesting considering that English people started claiming this around the time that ‘crisis’ was a euphemism for the female orgasm). With every change to the system, there will be new disadvantages, but there will inevitably be new advantages as well.

For example: although it hasn’t actually been proposed by a political party, let alone the Greens, some opinion-makers have suggested a carbon tax be applied to livestock due to the greenhouse gas emissions of sheep and cows. This was cited as a reason to not vote for the Greens by a friend of mine just before the election - the line of thinking being that such a law would destroy the farmers’ livelihood.

As I said in Part One, this is hardly a good enough reason to stop implementing the law, considering its aims, but even so - with the raft of laws that restrict polluting industries, there is a corresponding raft of laws that promote green industries. If you’re a farmer, you can invest in sustainable tree planting on your land - a lot of farmers already are. If you’ve got hilly land in windy areas, you might even be able to get a wind farm put on your land - and we’re talking about terrain that was historically quite useless for farming, but that can now be put to good use making the farmer money.

These are examples, mind you, that I’ve come up with off the top of my head, from driving past farmland and idle conversation with a few farmers - imagine the ideas that an actual farmer, who knows the land like the back of his hand, could come up with. Similarly, you might be resistant to carbon-tax laws if you are heavily invested in fossil fuels like coal. The best idea would not be to oppose the laws, it would be to get in early and invest in renewable energy, and make a ton of profit when the laws inevitably pass. As an investor, the real skill isn’t in picking an industry that is always on the up-and-up, and assuming it’ll stay that way - it’s in predicting what the next growth industry will be.

This is the essence of modern capitalism, for better or worse. It’s not just inheriting a piece of land and doing the same old things your father did - it’s trying new farming techniques, getting more out of the land than the old man ever did. It’s not just being fortunate enough to have the money to invest in the first place, throwing it at an old giant, and then watching it grow while you do no work - it’s being smart enough to put the money in the right places. It’s the ability to think, to be nimble and flexible, to be able to adapt to change.

And I know that the people in these fields would agree with me, and say that they already do these things - and to an extent, they definitely do. But at the end of the day, in the face of change, when we try to pass laws like these, that old misoneism rears its ugly head and refuses to budge.

Like I said, I don’t want to argue that money should be completely taken out of our considerations - we don’t want to waste money that could be put to better use elsewhere. And I know that this fallacy will always have appeal to people - it’s just human nature. Letters to the Editor will be rife with it, politicians will use it in their rhetoric, and then voters will often vote for the guy who will save them a few bucks at tax time over the one who will actually take the country forward.

But when we’re trying to have a cogent, logical debate over what the right decision is, we have to take a step back and really weigh up the options. Because sometimes the stakes are too high to worry about a little money.

Part One: here

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