Nuggets
I'd never heard of the Summers memo. I think it was a piece on Aaron Swartz's weblog that first brought it to my attention. The bulk of Aaron's article tears apart Harvard president Lawrence Summers' recent speech on gender difference, but he opens it with a striking quotation I hadn't seen before.
I looked at the site that Aaron linked to, and was struck enough to add it to my linkblog. A couple days later, I was talking with Spike about it, and she asked me a couple questions about the context and reliability of the quotes that I couldn't answer at the time. So I went home and did a little more research.
The Memo
In 1991, Summers, then chief economist at the World Bank, distributed a memo of analysis of the environmental impact of development in the third world. One section of it was eventually leaked to the press:
Nuggets
"Dirty" industries: Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs [less-developed countries]?
I can think of three reasons:
1. The measurement of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health Impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and weshould face up to that.
2. The costs of pollution are likely to be non-linear as the initial Increments of pollution probably have very low cost. I've always thought that underpopulated countries in Africa are vastly _under_-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.
3. The demand for a clean environment for aesthetic and health reasons Is likely to have very high income elasticity. The concern over an agent that causes a one in a million change In the adds of prostrate [sic] cancer is obviously going to be much higher in a country where people survive to got prostrate cancer than in a country where under 5 mortality is 200 per thousand. Also, much of the concern over industrial atmospheric discharge is about visibility impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.
The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization.
In a recent e-mail, leftist journalist Doug Henwood told me:
The enviro org that was leaked the memo gave it to the Wash Post & NY Times, both of which sat on it. In desperation, they gave it to The Nation, which asked me to write it up. Just before my deadline, The Economist broke the story, in an apologetic way. Damn. I suspect that Summers saw what was coming and went with a friendly outlet to control the initial spin.
Brazil's Secretary of the Environment, Jose Lutzenburger, called Summers' reasoning "perfectly logical but totally insane... Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional 'economists' concerning the nature of the world we live in.."
Lutzenburger was fired shortly thereafter; Summers went on to be appointed Secretary of the Treasury by President Bill Clinton, and later was made President of Harvard University.
A Google search for the memo turns up hundreds of anti-globalization sites and very little else. The mainstream media seems to have largely forgotten the incident.
A Harvard Magazine article from 2001 argues that "there's more to the story." It quotes a 1998 New Yorker piece to the effect that "the memo was composed by a young economist who worked for him, and that Summers, after a cursory review of it, co-signed it to stimulate internal debate."
Apparently Summers is very fond of stimulating debate. Here are his opening remarks from that recent speech:
I asked Richard, when he invited me to come here and speak, whether he wanted an institutional talk about Harvard's policies toward diversity or whether he wanted some questions asked and some attempts at provocation, because I was willing to do the second and didn't feel like doing the first
The young economist in question (Lant Pritchett) argues that "someone with access to the memo doctored it, combining the heading and the sentences on pollution and toxic waste, shorn of their context and the intended irony."
So there's basically three defences being offered in Harvard Magazine:
- Summers didn't write the memo,
- It was intended ironically, and
- It was taken out of context.
Authorship
I don't know much about the culture at large NGOs. Where I come from, taking someone else's analysis, signing your name to it, and passing it off as your own work is dodgy no matter how uncontroversial the sentiments.
How much less responsibility falls on Summers for mere endorsement rather than authorship is another question.
Irony
This we can work with. The piece isn't hard to read as very dry satire. Okay, then what's it satirizing? Easy. The last paragraph is clearly the payload. When Pritchett/Summers writes:
The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization.
he's saying that if you find the dumping of toxic waste on poor countries objectionable, you should logically be opposed to the mossion of the World Bank in general--in other words, if it's satire, he's saying that the World Bank is fundamentally morally bankrupt.
Did I mention that Pritchett is still there?
Context
I spent a couple hours scouring the web for the rest of the memo. If the "nuggets" section was taken out of context, then what does it look like in context? Even if his critics didn't bother to release the full memo, it seems like his defenders would make a point of doing so. I never found the full text.
Eventually, I e-mailed Doug Henwood, asking if he knew of any copies of the full memo. He replied that he has "an ancient, barely readable xerox of a fax of a xerox of a fax version somewhere in the files," and later added "Most of it was a straight comment on a draft of that year's World Development Report (and a fairly intelligent, if conventional, one). The "Nuggets" section stood out in tone & content. Context did nothing to change the interpretation of it."
Being a lazy blogger rather than an actual journalist, the prospect of attempting to read several pages of a scan of a xerox of a fax of a xerox of a fax of a memo written by a career economist and bureaucrat filled me with enought terror that I decided to accept Henwood's analysis.
So What?
This is a news story that fizzled a decade and a half ago. Why care now? The storm of controversy around Summers' recent speech about gender is still roaring (at least here in the Boston area). In fact, since I started writing this piece, the Harvard Arts and Sciences faculty has given Summers a no-confidence vote. This older story is being relegated to a footnote or lost entirely. This is one little stab at improving the balance.
comment by Thomas Colthurst:
I'm not sure why one would search for an ironical reading when everything the Nuggets memo says is good economics, by which I mean that (1) the reasoning is sound and (2) the conclusion is interesting. I'm also not sure why it should be considered scandalous when the Chief Economist of the World Bank outputs good economics. Yes, some dumb people might find the argued for position objectionable. So what? Would it be newsworthy if someone found a memo in which Larry Summers defended evolution?
Oh, I think I get it. Your entire post was ironic, as the last sentence gives away: your intent was to improve the balance by reminding people that Summers at the very least used to be a smart and interesting guy. Very clever, sir! Well done!
comment by Thomas Colthurst:
P.S. The blog entry you link to can hardly be said to "tear apart" Larry Summer's gender difference comments, when it in fact barely discusses them. As far as I can see, all Aaron Swartz does is (1) briefly summarize Larry's speech, (2) recap two books at length, and (3) assert that Larry presented no evidence. There may or may not be a definitive refutation of what Larry said, but this sure isn't it.
comment by Andre:
The "author" gets credit for good ideas, and therefore should also take the blame for turds. But putting one's name on someone else's work is so common we have words like speechwriter, ghostwriter, and apprentice to describe the practice. Senior people in any organization never write the first draft of their memos or speeches, they're too busy. Academia invented the idea of coauthors to give the grad students a chance to share the credit.
comment by Andre:
Yo TWC, I expect the chief economist at the World Bank to be even more politically astute than the president of that lousy university on the Charles. If Summers actually wrote that and was serious (I'm not convinced of either) he's an ass and deserves to get shit over it.
comment by Sebbo:
How 'bout 'cause he claimed it was meant to be ironic?
I'd argue that if you're in a position of power and influence and you're considering calling for actions that you know will cause widespread disease and death for generations to come, you might want to hold the idea to a higer standard than that it be interesting.
This is the thing about Summers' taste for 'provocation.' If I say, 'well, maybe homeless people just really like the outdoors,' I'm just being a stupid blogger, and little or no harm is done. If the director of HUD says the same thing on a podium, it's a much more serious business.
That said, I'm not one of the folks who are anxious to see Summers brought down. He's a fascinating belwether of what I suspect most of the folks in power think but are too cagy to say in public.
Reply to Andre by Thomas Colthurst:
Why do you expect the chief economist of the World Bank to be political astute? Wouldn't the world be a better place if the chief economist was just a really good economist and all the political hackery was left to the president of the World Bank (which, as the recent nomination of Wolfowitz demonstrates, is entirely a political position)?
P.S. When are you arriving in MA?
Reply to Seb by Thomas Colthurst:
According to your recounting, it was Pritchett, not Summers, who brought up the issue of irony. Also, Pritchett implied that the Nuggets memo we have is a version with the irony removed, which again argues against an ironic reading.
The whole point of the Nuggets is that death and disease would overall be REDUCED by moving pollution causing industries to poor countries. They would certainly be reduced in the less poor countries said industries would be moving out of, and they might even be reduced in the poor countries they were being moved to. (Death and disease from pollution would be up in the destination countries, but the increased income could be spent on reducing malaria, HIV, etc. and make the net poor country death/disease rates lower.) Calling for actions that reduce disease and death is I hope a proper activity for those in a position of power and influence?
This is what pains me: an intelligent person makes an intelligent but counter-intuitive suggestion as to how to make the world a better place, and the response is either insults ("arrogant", "ignorant", "an ass") or defacto dismissal ("he's being ironic", "he has a taste for provocation"). It's one thing to argue and say, "here are all the reasons why I think Larry is wrong", but to refuse to seriously consider a proposal just because the conclusion is seemingly improper can only be called narrow minded.
Finally, I sadly think that there are only a handful of people in power who think like Larry. Alan Greenspan (and the other governors of the Fed) fits the bill, but it's hard to point to anyone beyond that who has any real power. (Paul Krugman has some power, I guess, and Jeffrey Sachs has Bono's home phone number -- does that count as power?)
P.S. Your comments form needs to be bigger by default; a preview option would also be nice.
comment by Andre:
No Thomas, the world would not be a better place if people stopped listening to the chief economist at the World Bank because they thought he was a racist asshole.
A Lame Analogy by Sebbo:
I'd like to draw a distinction between being blunt and being flamboyantly callous. I'd like to say it's a fine line, but in this case it's not--it's a shiny line.
Lets suppose your research has shown that drive-by shootings happen less freqyuently in the suburbs than in the inner city. Further, evidence suggests that this is an unfortunate inequity--due to a lower population density, a bullet fired in the suburbs is less likely to strike a random passer-by than one fired in the city.
How shall you present your conclusions? Is "between you and me, the suburbs don't have enough drive-by shootings" a wise approach?
But wait! Consider, for our theoretical example, that the inner cities have been engaged in the systematic pillage, genocide, and enslavement of suburbanites for generations. The suburbs are still reeling from the material and cultural effects of this gross exploitation.
The organization you work for is one formed by city dwellers for the improvement of the suburbanites' lot. Understandably, it is viewed with some suspicion in the suburbs.
Does any of this color your answer?
And, yeah, I'm working on the preview thing. Looks like I'm gonna have to write it myself. Can I count on you for Perl advice when I get stuck?
comment by Sebbo:
No Thomas, the world would not be a better place if people stopped listening to the chief economist at the World Bank because they thought he was a racist asshole.
Actyally, Andre, I'm not certain you're right.
I don't buy the bit about a fixed death rate by Spike:
Industries do not behave in the same way in different countries. Many industries have options as how how much pollution they produce based on what practices they employ. So, if a polluting industry is currently located in the U.S. its practices will to some extent governed by the laws and social-political environment of the U.S. If we move this industry to a country with more lax environmental standards, a less vigorous press, and citizens with less economic power, this industry will experience fewer incentives to reduce the amount of pollution it produces. Therefore, it is not reasonable to compare total projected deaths based on a fixed rate of pollution.
Economics by Eric deRiel:
Spike's excellent point notwithstanding, Summers also illustrates an important characteristic of the more asinine variety of economist. Of all the different ways to look at the vast disparity in wealth and income between the third world and the first world, rather than to examine the issue from the point of view of the opportunity cost of underproductive, overstressed subsistence economies, Summers takes the position of maximal shift of cost burden away from the industrialized world — short-sighted by any account, and particularly ludicrous for someone from a global finance organization.
Besides which, this whole "just between you and me" thing is bush-league. A chief executive who's afraid to talk like a man deserves to be slapped around.
comment by Thomas Colthurst:
First, apologies for the delay in replying; I was without Internet access this weekend.
Second, is there anyway we can move this discussion to email? I'm getting sick of this editorless typing into tiny comment boxes.
Third, Spike is entirely correct that one cannot assume a fixed amount of pollution. (Except possibly in the case of transporting pollution produced in one country to another.) Luckily, Summers doesn't so assume. In fact, if we grant the point that the Nuggets memo is predominately devoted to -- namely, that the true costs of pollution are lower in an LDC -- then it follows that in the socially optimum distribution of pollution, total pollution is increased as compared to the optimum distribution with non-movable pollution. (The total utility of both countries involved are both individually up in the optimum as well; this is also just Ricardo's theory of comparative advantage applied to a negative cost good [aka a "bad"]).
Finally, I'm not sure why fruitbat characterizes Summers' position as that of "maximal shift of cost burden away from the industrialized world". If South Boston decides that it is willing to let US Air have a new flight path over it in exchange for $1 million, and I say "You go, South Boston", am I guilty of advocating for a maximal shift of cost burden away from the non-Southie world? (P.S. I find the implied gender roles and machismo flavored violence in your comments problematic. Also, chief economist != chief executive.)