Real or virtual universities?

I had the opportunity to visit the amazing campus of Monterrey Tech (I.T.E.S.M., after the initials in Spanish for the Technological Institute of Higher Studies of Monterrey) in Mexico City. It is just one of the thirty campuses that this private university, founded in 1943, operates, in which more than 100,000 persons study. Given that the ITESM, in addition to its traditional classrooms, operates one of the most important virtual universities of the world, the conflict between what is real and virtual should provide for some heated budgeting discussions. 

I can imagine the discussions. On the one side, the traditionalists take their stand, the ones who advocate more and better classrooms. They must still constitute by far the larger part of the faculty. On the other side, the virtual crowd must be growing, they who most probably argue for faster and more potent servers and for more publicity to assure ITESM’s place in the list of the surviving and thriving virtual universities. And, in this sense they are right, since in the coming years—or even months—it could be decided who will be the leading virtual university for decades to come. 

To this date, the traditionalists would have surely based their demands on the grounds that a university with a strong physical presence is the only one capable of producing the expected results. Most of us would have had to agree with them. Nonetheless, the corridors are starting to fill with rumors that analyses of early generations of virtual students have demonstrated a surprising and very real academic superiority over traditional students. I have no real proof of this, but the rumor could end up being true, since obtaining a degree through a virtual approach must surely require some very special motivation. 

What would happen if, in the not too distant future, alumni of these virtual universities were considered to be the best? To begin with, we should remember that it is the professional quality of the graduate which really matters to the labor market and not the fact that he or she enjoyed the university years. Thus, if the business sector starts demanding graduates of virtual programs, well, students might need to go the virtual route, even if it means doing it hiding in the old classrooms. 

Traditional faculties need not panic. Studying the “virtual way” requires plenty of individual assistance to students by faculty members. Thus such professors will not only be necessary, but also they could even have the opportunity to teach from the beach! Considering that a certain amount of interaction among students seems important, many traditional classrooms could still be used when converted into hotel rooms to house the virtual students for weeks at a time and provide them with some real physical contact. 

Published in El Universal, Caracas, December 2004

Virtual or real

I had the occasion to visit the impressive university campus of the Tecnológico de Monterrey in Mexico City. It is just one of the thirty that this private university has, in which more than 100,000 people study. Since the TM also operates one of the most important virtual universities in the world, the conflict between the real and the virtual must be present when budgeting.

I can imagine the discussions. On the one hand, the traditionalists, those who advocate for more classrooms, who surely still constitute the majority of the teaching staff. On the other side, the virtual ones, who are probably fighting for faster servers and bigger advertising allowances with which to ensure they can stay on the list of surviving virtual universities. In the latter they are right, since it will be in the coming years... or months, that the virtual leaders of the coming decades will be defined.

To date, traditionalists have surely based their claims on the assumption that a university with a physical presence is the only university capable of producing the expected results... and most of us would tend to agree. But, the rumors are already beginning to be heard in the corridors that the analyzes of the first batches of virtual students are surprisingly showing a very real academic superiority. I am not aware of the above, but since to obtain an academic degree by studying online, surely it must require a lot of motivation, suddenly it ends up being true.

What would happen if in a few years virtual graduates are considered the best? To begin with, we must remember that what matters to the labor market is the professional quality of the graduate and not at all the fact that he has had a good time during his university years. Therefore, if companies begin to request virtual graduates, then everyone should study virtual... even from the classroom.

And the teachers should perhaps not panic. The virtual study requires individual assistance, so not only will they continue to be necessary, but they may even be able to teach their classes from the beach. Considering that some physical contact between students seems important, it will also be possible to use the many current classrooms, turning them into hotel rooms that can receive virtual students for a few weeks of physical contact.

Translated from El Universal

PS. December 2020 I tweeted "And the Nobel Prize for the best Virtual Online Teacher in the world, in the category of children under 10, goes this year to…"

McPrison

An introduction to McPrison added in my book Voice and Noise, 2006 "Justice needs to begin with just prisons"

"Dear Friends. A couple of weeks ago I had the chance to participate in Madrid in a seminar about Judicial Reform in Latin America, and this made me publish the following article in my country, Venezuela. I wish to share it with you. I know the majestic emblems of power are important, but when I travel around in many countries and see all these new beautiful Supreme Court buildings mushrooming, and know about the horrendous, more horrendous, and most horrendous state of most of the prisons, I just feel that someone got it all upside down."

Here though is the original from 2004:

McPrison

 

Justice is something very difficult to understand with precision, since it is situated along a continuum that becomes finite only when it reaches Divine Justice. On the other hand, injustices are much easier to identify and, in our countries, prisons themselves represent one of the greatest injustices. 

In terms of the use of scarce resources, as an economist I am convinced that justice would today be much better served by improving prisons than by investing in Supreme Courts. I am not advocating, nor do I believe in, imported solutions. Moreover, if we were to respect individual rights defined as extravagantly as possible, for example, by guaranteeing in Venezuela access to justice similar to that O.J. Simpson had access to a few years ago in the United States, this would, because of the cost involved, be an affront to our human rights, collectively. 

Nonetheless, I believe in good examples, and I am sure that if prison franchises could be established in our countries we would all reap the benefits, as we are shamed into reforms. When we read that one factor making it particularly difficult for Schwarzenegger, the new Governor of California, to balance his state’s budget is the 28,500 dollars he has to spend each year on each of his 162,000 prisoners and that one of his options would be to use local private prison services, which would allow him to cut the cost to 17,000 dollars per prisoner per year, we see an opportunity. 

If California wants to save even more, it could do so by letting our countries offer prison services for some of its prisoners. Companies could build and operate prisons and would have to apply ISO 9000-type quality certifications. This would probably generate a set of global good prison practices that would benefit everyone. Nowadays, rapid transport and facilities such as videoconferences should make such proposals much more feasible. All that’s lacking is the will to carry them out. 

Since some people trace the origin of the violent maras (gangs) of Central America to Los Angeles, and since crime is to some degree attributed to the violence in films, perhaps California, its Governor, and even Hollywood all have a special motivation to welcome an initiative such as this one to help us help them. Besides, Schwarzenegger’s experience in the movies alone, which ranges from subduing criminals by force to teaching kindergarten, would seem to fit the ideal resume for a real super prison keeper. 

P.S. I just read in the press that Schwarzenegger refers to his experience in Kindergarten Cop as useful to handle the legislative branch in California… OK perhaps for that too. 

Translated from El Universal, July 15, 2004

PS. The Federal Government reports that the average yearly cost for a jailed prisoner in US 2021 was $43,836 ($120.10 per day).

PS. 2021-22, in California, the annual average cost to incarcerate an inmate in prison is reported to be US$ 106.000

PS. Holy Moley! @NYCComptroller reports that the annual cost of incarceration in New York grew to $556,539 a person per year – or $1,525 each day:  I think that figure might be wrong, but no one reacts to it?

PS. Now, 2023, when with natural horror looking at the images of the prisons/imprisonments Nayib Bukele has ordered in El Salvador, I cannot but help wonder what could have happened if California had helped El Salvador to afford building more decent prisons...these McPrisons

PS. Or what would have happened if all the emigrants of El Salvador, those who keep its economy afloat, had been much more politically empowered.

PS. A 2024 tweet: When a society cannot any longer afford humane prisons with which combat growing criminality, what option does it have? https://x.com/PerKurowski/status/1725551118657192224?s=20

Here it was echoed by El Tiempo Latino, a brother of Washington Post

Yellow, blue… or green

PS. Red, blue... or violet 

Every two weeks I sit down to write the article that I publish on these pages. I identify an issue and considering myself a reasonably rational man, I dedicate myself to doing a weighted analysis of both sides of the coin and usually I end up identifying myself with an intermediate position.

My next challenge is to find a way to convey the message, both so that the reader wants to read it, and so that he understands it. From the springboard, I prefer to execute a few simple low-score jumps well, than to launch myself with some stunts where, even when the relative score is high, I run the risk of losing the reader ... are they still following me?

After the draft is finished, I hand it over to my wife Mercedes, who proceeds to chop up my five-line sentences into five one-liners. The way she dismantles it into little pieces, and then assembles it, without me even noticing the changes, shows her skill.

Once ready, I send it to Miguel Maita and I wait for the day of its publication, when I see it being born at www. eluniversal.com. Then they begin to enter my email, the not so many, nor the not so few comments:

Kurowski. I hate his yellow ... Aren't you ashamed?

Kurowski. I hate your blue ... Don't you have the slightest sense of shame?

Mr Kurowski. Thank you for explaining it so clearly.

This last comment, without a doubt, does my ego a lot of good, but even in that case I am left wondering if they really managed to capture the beautiful green that I wanted to describe, or if it was only that they saw a still more intense yellow or a blue.

Friends, how do you communicate something when the receiver is no longer able to separate the yellows, blues or green resulting from the mix and only knows how to pick it up on a single unicolor channel? This problem of media color blindness is not exclusive to Venezuela, since it seems that humanity is mutating, probably as a reaction to the exaggerated information volume of the modern world. Will the day come when we will never see green again?

Friends, how do you communicate something when the receiver is no longer able to separate the yellows, blues or green resulting from the mix and only knows how to pick it up on a single unicolor channel? This problem of media color blindness is not exclusive to Venezuela, since it seems that humanity is mutating, probably as a reaction to the exaggerated information volume of the modern world. Will the day come when we will never see green again?

Translated from El Universal

“Communications in a polarized world” A speech at the World Bank Communication Forum May 19, 2004.

A 2022 tweet:
#Polarization
As a response to the modern world’s huge flow of information volume, humanity is mutating. The media is already turning color blind.
Will the day come when we will never again see the beautiful violet that results from mixing red and blue?

Monsters Inc.

I recently saw the cartoon movie Monsters Inc. again with my daughters. Two friendly monsters, Sulley and Mike Wazowski, put body and soul into perfecting their scare techniques to get the greatest possible emotional charge out of children’s screams. Monstropolis depends on this as its source of electrical energy. Knowing that “there’s no power without screams”, these good-hearted fellows fully identify with their company’s slogan: “We scare because we care.” Of course, their reciprocal fear of children helps them do their unpleasant civic duty. 

A growing energy crisis caused by the fact that “children today don’t scare like they used to”, plus a direct encounter with a cute and very tough-to-scare little girl called Boo, starts our heroes on an adventure where they discover that laughs have ten times more amperage than screams. In the happy ending they redefine themselves professionally as great comedians.

After so many horror stories (enough to make Stephen King envious, were they not true), there is no doubt that fear is palpable here in Venezuela. Although a little cautious fear may be a good thing, we know that chronic fear is bad. It paralyzes everything and can eventually lead to collective suicide, making it urgent for all of us to shun the darkness. 

I wonder what would happen if, when the lights came on, we discovered that, without our knowing it, our country was really just Monsters 2, a movie about a social experiment watched by the rest of the world as a lesson on how to manage conflict that arises from polarized opinions.

And what if we suddenly also discovered that the audience was laughing at all our monsters, having seen that they were only just balloons filled with hot air to rise up and frighten us?

In that case, we would have to conclude that we were the star players in the Mother of all revolutions and counter-revolutions (of the Café, Bodega or Cantina type, as the case may be). In that case, we would be left only with our fear of appearing ridiculous... A welcome change indeed! 

Am I dreaming? Perhaps, but as I watch how the world shrinks, I become more and more convinced that we will shake off our fear in Venezuela. So my friends, to quote Dory in Finding Nemo, the movie that followed Monsters Inc.: Keep on swimming… keep on swimming.

Translated from El Universal

Communications in a polarized world

(A speech at the World Bank Communication Forum May 19, 2004. Extracted from Voice and Noise 2006)

Dear Friends,

What I would want to use this precious one-lunch-speech-chance-only for, is to talk about a world where opinions seem to become every day more polarized, which is an issue that has worried me a lot lately, coming as I do, from a very polarized country that is a living proof of the dangers of it.

To illustrate the problem, and as we are supposed to be learning from cases, let me use as an example my very own amateurish case.

I write in green, but my readers can only read me in yellow or blue.

I write in purple, but my readers can only read me in red, blue.

Every week I sit down to craft out an article to publish in a major Venezuelan newspaper. Believing myself to be a sensible man, prone to reasonable attitudes (though some might say that’s just trying to make up for other types of behaviors), I usually find myself on most issues in an in-between position, where I can identify a lot of pros and a lot of cons.

The true challenge for any writer, who is not into darkness, is to transmit the message in the clearest possible way. In this respect, I like to think of myself as a conservative jumper from a diving board who prefers executing the easy-graded jumps well, rather than going for the spectacular triple in-and-outs, where you could indeed score higher, but you could also completely lose your reader trying.

Therefore, after duly taking inventory of all the pros and cons, carefully turning them around and finding suitable allegories and metaphors and similes that illustrate the topic at hand, I finally come up with what I normally believe is quite an excellent script. Cautioned by experience, I then take the script to my editors. If it is in English, to the closest available qualified colleague and, if in Spanish, then even much closer, to my wife Mercedes.

These critical editors, who probably assess my script in somewhat more realistic terms than my self-assessment, at the best murmuring a “so-and-so,” then usually proceed to split up my 5-line sentences into five 1-line sentences, to be shuffled around. Their professionalism is evident since they always seem to come up with a product that means exactly what I intended to say. I never understand how they can take it to pieces and still manage to put it back together again.

I then send the embryo away and sit down and wait until early Thursday morning, I can see the newborn on the newspaper’s Web line.

Let me now describe how my readers, through their e-mails, react to my babies.

They mostly start with a direct Per Kurowski, as many believe that “Per” is my title and not my name and just as many think that Kurowski is not my name but my alias. In life, I am frequently greeted with an “Oh! Per Kurowski, I didn’t think you existed.”

Their responses classify then in the following three significantly different categories:

“I hate your yellow . . . despicable . . . how could you . . . . Have you no shame?”

“I hate your blue . . . despicable . . . how could you . . . . Have you no shame?”

“Oh, thank you for explaining it so well and in such clear terms!”

Although I obviously prefer the amicable intentions of the third group, and they do help support my ego, I am still never sure whether their praise of my explanatory power is because they managed to see the green I wanted to show them, or just because they saw an even brighter yellow or blue.

And this is the big polarization that is blocking communications and creating worldwide divides.

In 1872, the British Parliament decreed Speaker’s Corner in Hyde Park of London as a place reserved for free expression, and initially it attracted all those extremists who, although qualifying as nuts, still had the right to vent their opinions. Lately, we have all witnessed how the original Speaker’s Corner speakers moved into Speaker’s Studios and now radicalism, anarchy, or fundamentalism is voiced on prime-time television. All of us others, modest low-key analyzers or rational in-betweens, have to settle gratefully for slots in after-midnight cable television, dubiously sponsored by the most traditional professional services. As rationality could soon be viewed as symptomatic of a modern nut, we might all have to line up at Speaker’s Corner.

As you understand, this polarization poses many challenges.

How on earth, in an ever more colorblind world, can we be sure the reader knows what color we talk about?

How on earth do we know that we have communicated, when clearly rating is not all nor should be an end it itself and, on the contrary, sometimes a big rating just guarantees a bigger confusion, as when everyone finds it easy to read in his preferred color.

How on earth do you communicate, when the receiver is no longer decoding the message into its yellow or blue components, but only receiving the whole message, as is, through his one and only yellow or blue pipeline? There are times I actually suspect we are going through a genetic mutation, in response to modern information overload.

And friends, this is not a problem just in communications, as color blindness can hit us anytime, anyway, and anywhere. For instance, in the World Bank, most of those who currently speak about Public-Private Partnerships do so only because they feel they have found a more politically correct way of defending a 100% private or a 100% public alternative and not because they would truly believe in PPPs, or even understand what they are.

As you can understand, this raises all types of serious issues, especially for a World Bank that wants and needs to communicate so much Knowledge with Yellows and Blues but that—for it to become the development Wisdom the world so urgently needs—must all be mixed into various degrees of Green.

So, what do we do? You tell me. You are the experts! Anyhow, armed with the blissful ignorance of an amateur, let me daringly point out some directions.

We can perhaps keep it a very simple green so that there is no way it could take a blue or a yellow meaning, though running the risk of watering down the message so much, that it is just ignored.

Or—we can complicate it so much that the receiver is blocked from any channeling of the message, as he cannot even start to understand it. Though this does not at all sound very promising, it might in fact be the route some researchers in the World Bank are exploring. Just last week, I read a document that was very cleverly obscured in academic jargon, mentioning “modeling this in a tractable way using autoregressive conditional heteroskedasticity” and including so many footnotes that a comparable reference to healthful food would most certainly have included a note: “(Mother. 1958. Published on the magnet memo board on the Fridge)

Or—keep the colors so pure that a blue channel would choke on a yellow message and vice versa. This could be a stupendous idea, but only if we were looking to be ordained as High Priests of the Purist Blue or the Purist Yellow Churches.

Or—do we need really to diversify and open two or three Web sites? One for each color extreme and one for the mix, and how do we hyperlink them?

Or—should we use ex-ante censorship, like some radio and TV channels, where you are only allowed to call in your opinions on line yellow or line blue, to help the producer avoid mixing colors? By the way, this new era of media apartheid seems already to produce its counterrevolutionaries as we can already hear an insurgent movement of color cheaters, the blues on line yellow and the yellows on line blue.

Or—set up ex-post filters with questionnaires that the receiver is obliged to answer before being allowed to leave?

Now, as long as I have you all sitting there, let me also dare some recommendations that could generally help the World Bank in reaching out to a world that does not seem to hear even our loudest fire alarms.

First, I dislike the concept of “The Knowledge Bank,” as it sounds too much like arrogant yellowist or blueist to me, and I would much rather prefer a more humble “The Search for Solutions and Answers Bank” or, even better, “The Learning Bank”: knowledge comes from learning, and the Bank—although having acquired a significant stock of cumulative knowledge over sixty years of operations—has still a lot to learn from its clients. Such an approach would stand a better chance to transform its knowledge pool into wisdom, which, at the end of the day, is what the developing and the developed world really needs.

Second, we need to start talking more with the world instead of with one another, hoping the world listens in. I myself would prohibit the use of all acronyms. I am certain that Mary Poppins would never have been able to communicate as effectively had she used an SCE instead of supercalifragilisticexpialidocious, much less Shakespeare had he used a TBONTB instead of a To Be Or Not To Be. Today, I tell you after having asked around, the sad fact is that our lead product, the MDGs, has very low name recognition among the NONNGOs, the normal citizens, and this does not bode well for our future. Do we need a flashy MDG logo?

Third, whatever we do, let us not badmouth the NGOs, since they might very well be, at least for the time being, the only wall that echoes our voice and so, without them, we could find ourselves with virtually no voice at all.

Fourth, we all might benefit from better focusing. Doing and communicating about so many things, ninety and then some thematic themes, might signify, or at least leave the impression, that we are not doing anything at all—which might also be true. For instance, the way the Board is drowned in tons of communications, might be exactly the reason why, frankly, it is currently quite nullified.

Fifth, I believe that it would not hurt if we also lighten up our ways of verbal expression. It has lately become an unbearable fashion to speak in a grave voice, in a tone of solemnity, and with an accent that could come only from using the same tutor as Robert Williams used for the role of Ms. Doubtfire.

Finally, as for myself, as a true green, a radical of the middle, an extremist of the center, with perhaps poor ratings and condemned for ever to Hyde Park Corner, I will go on, doing just the best I can, searching to communicate with simple natural and organic ingredients, while following Dori’s safeguards of … just keep swimming … just keep swimming.

Thank you and, now I am ready for your answers.

NO ANSWERS … just questions, some on the issue of voice.

Q. What do you think about more voice for the developing countries?

A1. Before we worry about our voices in the Bank we should perhaps worry about the voice of the Bank. The sad fact is that were it not for a couple of NGOs, the whole world might be unaware of our existence. Hey! They even ignored our 60th Birthday. We were not able to rouse up even 60 protesters. Is that not a sign of irrelevance?

A2. I could have a big voice and still not be heard at a Knick final at Madison Square Garden, or out in the desert of Tucson. I could have a small voice, and still be heard a lot, if the acoustics are right and so, let us work on the acoustics. At this moment, with about a thousand formal board documents that come our way each year, plus about four thousand other projects, plus about a hundred seminars and brown-bag lunches, plus having to call home now and again, in fact no one at the Board has a voice … and so in the famous words of Alfred E. Neuman: “What, Me Worry?

PS. Some posts by which I started to fight odious polarization profiteers

Red and blue, or, red or blue

PS. The "yellow, blue or green" I speak of above had its origin in an Op-Ed I wrote in Venezuela. Translated to the USA it would read as, "red, blue or purple". That Op-Ed ended with: 

"Friends, how do you communicate something when the receiver is no longer able to separate the yellows, blues or green resulting from the mix and only knows how to capture it through a single unicolor channel? This problem of media color blindness is not unique to Venezuela, since it seems that humanity is mutating, probably in reaction to the exaggerated volume of information in the modern world. Will the day come when we will never be able to see green again?"

Distinctively alike

PS. That Speaker’s Corner I then said had moved to TV Speaker’s Studios has now moved to Social Media, where you can connect with millions with a zero marginal cost. Never ever has Speaker's Corner been so dangerous.

PS. A decade later I came to suspect that the most profitable business in town is polarization. “You attack me as hard as you can, I attack you as hard as I can, we convince our followers we are the best ones to save the world from the horrible threat each one of us poses… and then we split the profits 50-50”

PS. Social media, which allows polarization and redistribution profiteers to send out their hate and envy messages at zero marginal cost, has become social harmony’s worst enemy.

PS. It is now 2018, polarization is getting worse, and I have found myself forced to tweet comments like:

“Since things got way out of line during the White House Correspondence Dinner, and ordinary decency was abandoned, at least the polarization profiteers had a bad night. And that’s good news, for all of us citizens.”

To: “When the constipated Left and the smug Right blow off in social media...True to the laws of physics, when two identically charged particles meet, they repel each other”... I answered, “Are you sure of that? What if many of these Left/Right members are just the same, namely polarization profiteers engaging in fake fighting?”

“The polarization profiteers are having a heyday exploiting the “separated children” issue up to the tilt with blatant exaggerations and crocodile tears. I am afraid that will backfire on those we wish to protect.”

“Are polarization profiteers throwing first stones? That anti-Trump restaurant owner who booted out Sarah Huckabee Sanders, is he appealing to the same refusal rights as those in that case where someone refused to make a wedding cake for a same-sex couple?”

"It saddens many of us seeing John McCain exploited by polarization profiteers, and not being able to publicly rebuff them, as he could and did while being alive"

"I saw some twitter threads generated by the Nathan Phillips vs. Covington Catholic School incident. I now ask, how long before polarization profiteers convince their respective targeted and exploited tribe members to tattoo themselves in best MS-13 fashion?"

Polarization Profiteers must be stopped!

We should keep a ranking on the web of the 100 most aggressive and insidious polarization profiteers continuously updated, so as to shame them accordingly.


PS. April 13th 2019, when walking on Fleet Street I heard a 7-8 years old girl ask:
"Mommy, what's worse murder or Brexit?”

Now in the US, 2020, any moment I expect a child ask her mother"
"Mommy, what's worse Trump or Coronavirus?”

We sure are suffering the impact of a polarization pandemic😡

Main and social media write in red or blue, purple is all but gone 

Coronavirus / COVID19 has provided all polarization profiteers an extremely potent resource that they are now exploiting up to the hilt

PS. April 15, 2019 I went to Speakers' Corner in Hyde Park London, sadly I heard the sound of silence, there was no one speaking there, there was no one but me there :-(

Indeed Speaker's Corner has been relegated to history

PS. Dated 2020: When a majority of social media, teams up with a majority of the main media, all in order to imposing political correctness gags, thereby silencing not-fitting facts and impeding frank discussions, that dangerously weakens any nation’s willingness to defend itself.

PS. Dated 2020: The most dangerous underlying condition of Covid-19, is that it broke out in the midst of a raging Polarization Pandemic, in which way too many polarization profiteers have a vested interest in blocking the development of a harmony vaccine.

PS. November 2020: In these times when we are all suffering the impacts of a worldwide raging polarization pandemic, whether the loser in USA’s presidential elections is Biden or Trump, is of much less importance than the losses produced in the democratic spirit of America

PS. January 2021: Social media threatens the survival of newspaper so these have sought refuge in more profitable polarization and bad/false news. So, paraphrasing Upton Sinclair "It is difficult to get a journalist to report the truth, when his salary depends upon his not reporting it!"

PS. January 2021: Can it be that the Senior Advisory Committee of the Institute of Politics at Harvard among its members have explicitly declared not to include one single of those 72 million Americans who voted for Trump? Please tell me I’m wrong.

PS. March 2021: The battle of our times: Herd Immunity vs. Herd Docility

#AI #OpenAI #ChatGPT #Grok: Help us human to be undivided: on abortion.
#AI #OpenAI #ChatGPT #Grok: Help us human to be undivided: on gun control

Global Tax

Dear friends and colleagues, (my fellow Executive Directors at the World Bank)

Timidly, within brackets, and diluted by an “among others,” the most recent Development Communiqué spells out the possibility that, in order to mobilize additional resources for aid, we should at least examine the option of a global tax. We must have touched a raw nerve somewhere, and I at least have been approached by a surprising number of persons who, moving up close, give me the what-do-you-think-of-it whisper. Colleagues, we will certainly have endless discussions about this matter in the Board, or at least our inheritors will, but, for the time being, let me share with you my not so hushed up but precocious answer. 

In general terms, like any normal citizen, I hate taxes, but, in this case, that might be precisely why I find it interesting to look into a formal global tax so as to see whether in that way we could get rid of some of those informal global taxes that we are already paying or, if deferred, we will pay some fine day soon. As we live in a minuscule interrelated world, with a lot of butterfly wings flapping, no one will convince me that there aren’t many problems out there that already have someone somewhere paying taxes for them, albeit not always in cash. 

I come from a country where we have grown too accustomed to paying some sort of hidden taxes in many forms and ways: holes in the street gobbling up the car ties, insecurity that requires our paying private guards, a precarious health system where some even pay with their lives, poor public education whereby even if your own kids get a good private education it is worth less as they will be unable to count on the synergy of other educated citizens, and you could go on forever. On a global level, for instance in matters of the destruction of the environment, it is clear that we already are paying taxes, at an ever increasing rate. 

Therefore I would analyze a new and formal global tax, not in terms of its being a new tax, but in terms of whether it is a more efficient and transparent tax to substitute for some of the current and future awful-consequence taxes. Intuitively, I would answer “yes” on both counts, and here are briefly my reasons: 

In terms of effectiveness, at least it sounds quite good to be able to count on some type of centralized funds that could be allocated strictly according to global priorities instead of being captured by local interests. Just as an example, it is absolutely clear to me that, from an environmental perspective, we would be much better off allocating scarce financial resources to help Brazil cover for the fast-growing opportunity costs of not developing the Amazon, than building windmills in somebody’s backyard. As you can see, this is impossible, while taxes are parochial. 

In terms of transparency and coming from an oil country, what more could I say? Huge taxes are currently levied on oil in the developed world, and most of the contributors (consumers) believe that these taxes have environmental purposes that extend much beyond curtailing consumption. Well, no, the truth is that not a single net cent of each dollar goes to the environment, perhaps even less, when taking into account the economic inefficiency of investments in wind and solar energy and the environmentally negative implications of coal subsidies. 

But, as always, the devil is in the details. How on earth should an earth tax be run? I haven’t gotten that far yet but, as a starter, perhaps a petit committee of experts, world leaders, and scientists (not any self-appointed eminences) could allocate the resources to development institutes, through yearly public hearings, based on proposals and performance, and could also help to fire some healthy competition and accountability into development. 

And tax on what? On our airplane tickets? No, if we are going to have a chance to work things out globally, we should meet frequently, not only through videoconferences. If forced to give an off-the-cuff answer, I would mention a type of Tobin tax[1] on capital movements as a probable candidate, as that would also perhaps help us to slow financial movements down, from a nanosecond to hundreds of a second, and help the world to move out of its shortsightedness where full weight is given to the next quarter’s results and nobody thinks about the next generation. 

Summarizing, those opposing a global tax are blind to the fact that such costs exist anyhow. Perhaps they are living out their teenage illusions of never growing old and never needing to depend on others. 

Friends … pssst … what do you really think of a global tax? 

Per 

[1] Tobin tax refers to a very low tax proposed by James Tobin, Nobel Prize in Economics, 1981, of between 0.05 and 0.1 per cent, to be applied on all trade of currency across borders, in an effort to put a penalty on short-term speculation in currencies. 

Odious Credit

I recently wrote about odious foreign public debt, that debt about which there is a current debate in the world as to whether it can be legally repudiated if it is taken on by illegitimate governments or for illegitimate ends.

The other side of the coin is odious credit. Please don’t think I’m against banks—quite the opposite. But I respect the role of the financial middlemen too highly to keep quiet when they are not doing their job right. In 1981, the representative of a foreign bank in Venezuela showed me a letter in which his boss instructed him to “give credit to the INAVI, Venezuela’s National Housing Institute. It’s the worst public institution, which means that it pays us the highest rate and, as you know, in the end it’s just as public as the best of them and Venezuela will have to pay up just the same.” Odious credit, isn’t it?

The first thing a good banker should ask a client applying for a loan is what is it for and if the answer is not satisfactory he should reject the application, regardless of the guarantees offered. Simple plain-vanilla fraud of the Parmalat kind will always exist, but the asinine way all their creditors fell into the trap makes one suspect that this is only the first case of systemic risk in the banking system: tempted by the regulators in Basel, banks subordinate their own criteria to those dictated by auditors and credit raters. This development, bad in itself, is even more serious in the case of public credit, where the what it’s for is being replaced by how much can be carried, perversely derived by calculating the level of sustainable public debt.

When I call for the total elimination of foreign public debt (which is feasible and would not require huge sacrifices in an oil rich land like Venezuela) my colleagues often argue that a certain level of debt is good and necessary for the country. This does not convince me, since it makes debt sound like electricity that must be kept at a certain voltage. Because public debt must always be paid back, regardless of whether anybody ever knew what or whom it was for, I’m fighting for the day when the private sector in Venezuela can return to the markets, freely, without having to carry that huge monkey—foreign public debt—on its back.

In my opinion, the Benemérito (the dictator Juan Vicente Gómez (1864–1935) who ruled the country between 1908 and 1935) deserved great credit for ridding Venezuela of her foreign debts He certainly knew that to shake off that vice more than patches or pieces of chewing gum are needed.

From El Universal, Caracas, April 22, 2004

Odious Debt

One of my recent articles, which focused on the need to protect the environment, concluded by recalling the ancient proverb, “We have not inherited the world from our parents; we have borrowed it from our children.” On that occasion, as always, I thought about Venezuela and I knew that, as borrowers from our children, we have acted like veritable pigs. Not only have we extracted our country’s oil without putting it to much good use, we have even mortgaged its future in the process.

Some countries may be in need of foreign loans to get on their feet, but here in Venezuela we ought to know by now that our foreign public debt, be it the debt of yesterday, today, or tomorrow, only serves to fasten us all the more securely to a sinking ship. Foreign public debt is a monstrous obstacle. It keeps our citizens from getting loans (or at least makes loans much more expensive) that could indeed lead to growth in the country and allow the government to satisfy social needs through taxation.

Our only salvation is to learn how to resist the lure of the eternal sirens’ song, which goes “foreign debt taken on by the previous administrations is evil and good for nothing, but rest assured, with us, everything’s going to be different.” How do we—like the ancient Odysseus—tie ourselves to the mast?

There are those, in similar desperation, who argue that since our creditors were accomplices of those administrations, we shouldn’t pay our debts to them. I accept the theory of complicity, at least on the part of the intermediaries, but I think we should punish them much more harshly, by canceling the entire debt and never again taking out another loan.

What can ordinary citizens do who want to and have to go about their daily lives and can’t be continually overseeing the government? The same as any company: they can refuse to provide their management with authorization for contracting debts. Along these lines, a doctrine is now being discussed in the world according to which, if the debt was contracted by an illegitimate government, or for uses that were clearly of no benefit to the country said debt could be declared odious and, as such, its collection would not be legally enforceable.

Dear friends, if we are going to do right by our children, our grandchildren, and our great grandchildren, and return the country we borrowed from them in good shape, maybe we should take advantage of such a possibility and declare our foreign public debt eternally odious. Given that threat: Would creditors dare provide us with loans? What would the credit-rating agencies say? 

Or let us be even more clear about the message and amend our constitution to say that the government of Venezuela has no authority to borrow from foreign sources, that any attempt to do so is illegal, and hence that all such illegal debts will not be repaid. That should stop foreigners from lending us money!

Translated from El Universal, Caracas, March 25, 2004

About prisoners, the old and the sick

About prisoners, the old and the sick

WE READ THAT IN THE United States there are approximately 2.2 million people dedicated to capturing and keeping 2 million prisoners behind bars. Imagine what it can mean for any country to capture even 1% of that market.

Other buoyant markets are those of the elderly care industry, whose demand in developed countries grows as the ratio of the number of young to old decreases. So are those in the long-term care industry, where continuous advances in medicine seem to generate almost infinite demand. 

It is strange then the insufficient attention that developing countries give to these services when negotiating their trade agreements, considering their current and competitive salaries, and that, on the other hand, it does force them to open up to the services sector via banking, insurance, auditing, etc. 

As an example, the economic impact to a poor country of a school that annually graduates a few thousand excellent bilingual nurses, to work around the world or in their own country, could exceed the benefits that a trade agreement would have on its agriculture and manufacturing industry combined. By the way, nurses would cancel their educational credits, perhaps even more easily than economists like me.

Furthermore, given the tensions that occur when millions of people seek to emigrate in any way to the labor markets of developed countries, in order to produce family remittances, it is surprising not to hear that the best way to avoid this illegal immigration, which is often destined in one way or another to care for prisoners, the sick and the elderly, it would be sending this same clientele to developing countries to be cared for. 

A real opening in services would allow poor countries to access sources of sustainable economic growth, while at the same time it would alleviate the pressures that the costs of caring for prisoners, the elderly and the sick exert on the finances of developed countries, to such a degree that They even threaten to make their own economies unsustainable. 

New ideas? No way! Papillon was sent prisoner to Guyana and Australia was founded with exported convicts. There are already European governments that pay in one way or another for the stay of their elderly in places like the Canary Islands, and history is full of examples of those who had to go to other places due to diseases such as tuberculosis.

Translated by Google from El Universal

What’s Chinese (as in inexplicable) in China

Travel to China and be fascinated. I assure you that for a tourist trip, if you get a special ticket, there is nothing that beats it. To go to the Great Wall, I got on a bus with only Chinese, who sang in Chinese with the help of a video where the ball jumped over Chinese characters. But, much more than that, was Chinese to me.

In today's China, most families have only one child. What will this mean for society? Could Latinos, for example, continue to be Latinos with one-child families? 

It is precisely when a country comes out of poverty and seeks to be at an intermediate level where any progress, such as going from bicycle to motorcycle and from motorcycle to car, demands a lot of energy. Is there energy and oil in the world to satisfy Chinese growth? 

The current model of economic growth in China would seem to take it in a very short time from being a rural country to a country where its citizens end up living like sardines in huge cities, and we intuit that such a destination is neither good nor sustainable. Observing how recent technological advances in the world already almost allow the most remote villagers to be present, almost live, in the very center of the capital of their empire, we have to ask ourselves: Are there really no new and better options? 

The current growth rate in China is brutal and from what we know that immense inequalities will arise between those who manage to climb into today's developed consumerism and those who are far from even entering the current millennium. All progress involves risks and may even require leaving victims in your obituary, but, if the injustices become too great, the past can claim. Will China, in a few decades, be able to do what used to take centuries and still remain China? 

Forgive the political indiscretion but, when at dawn, when the red flags were raised in Tiananmen Square, I saw how the human waves moved and kept a certain order only when they were instructed by the guards at the top of their lungs, I had to wonder if in the long run it would be possible to manage China with one of the current democracies of the “Viva la Pepa” (meaning, “let’s do what we want”) type. 

Finally, when I found myself on The Great Wall of China, to which I ended up riding in a yellow cart that looked like as one retired from a Disney Park and as I walked slowly through an incredible crowd, I asked myself, again and again: Will it hold? 

Translated from El Universal

Note: Written while being an Executive Director at the World Bank.

PS. “Also, we should never forget that historically, through all economic cycles, there is nothing so valuable in terms of personal social security as having many well-educated loving children to take care of you, and that you can’t, in real terms, beat that with any social security reform.”