Why does the Olympics Medal Table reflect political power?

You might look at this question and think “it doesn’t”. But look at the table today, on 7^th August 2012, as China leads the table, and USA follows in second.  It wasn’t always this way: back in the 2004 Olympics in Athens, USA was first in the table, followed by China and then Russia.

China has been creeping up the medal table, just as their economy has been booming.  In fact, it was the Beijing Olympics of 2008 when China first overtook the US in the medals table.

Back in the Olympics of 1992 in Barcelona, the Olympic medal table told a different story. The former USSR countries (then called the Unified team) came top of the medals table by a long way. It seems it took a little while for the end of the Soviet Union to be reflected in the medals table.

Before the Berlin Wall came down and the USSR dissolved, the Soviet Union and East Germany had been doing really well in the Olympics medal department, like in the Seoul Olympics of 1988.  One exception to this was in the 1984 LA Olympics in the USA when many Soviet countries actually boycotted the Olympics, meaning the USA came top. 

The USA had actually boycotted the previous Moscow Olympics back in 1980 – in protest of the Soviet invasion of Afghanistan - and athletes could not participate or they would have their passports revoked. At this point, the US and USSR did not want to visit each others’ countries and governments were willing to boycott the Games to put their point across.

As we can see, like most things, the Olympics can get quite political.  I am not saying this is a scientific analysis, and it is definitely not, but there could be a few reasons why this could be happening:

1. Funding for sports

Funding for sports is obviously quite related to economic power.  The bigger superpowers (like China now) can afford to put funds into their Olympic team and train good athletes. 

2. Using the Olympics to gain status

Countries like the Soviet Union might have tried to fund sports more enthusiastically to gain status during the Cold War.

3. Hosting countries have the home advantage

Countries like China in the Beijing Olympics of 2008 may have benefitted from the home advantage, being able to support their team with sports funding in order to host the Games. Countries may be more likely to generate a successful bid for the Games if they are doing pretty well.  Australia, as the host of the 2000 Sydney Olympics came fourth in the table. Confidence also plays a role, and the effect of the home crowd.

Unfortunately, no city in Africa or South America (until Rio next time) has ever hosted the Olympic Games!!  Hopefully, we will see an African city host the Olympic Games in coming decades, as African economies' start to boom.

The Olympics can also be a place for politics to take place. For example South Africa was banned by the IOC from participation in 1964 because of the oppressive apartheid regime, and they were only allowed to rejoin back in 1992.

The IOC is headquartered in Switzerland, and the Olympic Charter states there should not be any demonstration at the Games, but it seems you cannot remove politics entirely (and would you really want to?)...

Open Letter to Rio+20 Summit Leaders

Dear Rio+20 Summit Leaders,

 It is also a shocking fact that 40% of the EU budget still goes to agricultural subsidies, the majority affecting the price of meat and dairy products and giving them a competitive advantage above other foods. President Bush actually the subsidies to intensive factory farming by 80% during his recent term in the USA.

As this time of economic adversity, intensive factory farming is causing environmental destruction worldwide driven by the consumption of meat products - and this is being directly subsidised by public funding by taxpayers. Meat and livestock products are also subsidised indirectly by subsidies to animal feed crops.  Imported animal feed, particularly soy, is responsible for widespread destruction of the tropical Amazon rainforest.  Livestock contributes a total of 18% to global greenhouse gas emissions.

There is no reason why intensive factory farming should be subsidised in this way and given an advantage over other forms of small-scale farming.  Artificially lowering the price of cheap, inhumane meat also has health implications in a world where a growing proportion of the world suffers from obesity and heart problems.

I feel these detrimental agricultural subsidies are at the very root of our broken food system and that Rio+20 offers a real opportunity to change this system. Reduction of the consumption of animal products must be included in the Rio outcomes, along with the removal of the distorting subsidies they receive.

We must overcome the intensive factory farming lobby to implement these changes. If these major subsidies at the root of environmental degradation are not addressed at the Rio Conference, the Summit will be a missed opportunity for the planet and the world. I welcome your response to this.

Yours Sincerely,

A Citizen of the Earth

Economic reasons for public healthcare: A Theory

Is public healthcare more efficient in terms of allocation of resources?

Healthcare is a public good, and there are some reasons why it should be funded by public spending. Firstly doctors in a private system may have perverse incentives to increase costs over and above that which is necessary for patient care. This form of 'over-treating' could be either due to the profit motive in private clinics or at a systemic level, where instead of competing on price, treatments that are most costly become prevalent over equally-effective cheaper versions. These costs would ultimately result in higher insurance premiums or costs which are then passed on to patients.

This is a theory that can been seen in reality. Healthcare spending in the United States, which is supposedly exposed to competition, is vastly higher than any other country and makes up more than 16% of GDP. Are we too assume there are many more health problems in the USA as a percentage of population, or could privatisation play a role? Private systems may escalate costs where there are incentives to do so. A form of monopoly, as described by Adam Smith, can theoretically occur when pharmaceuticals exert power through promotional spending and influence on regulators.

Perceptions and actions of the economic actors also play a role. Cost does not equal quality, but patients and doctors could get duped into thinking a particular treatment is more effective when it is more costly. Especially when the potential for profit has led to increased promotional spending. The placebo effect can be effective and could be potentially manipulated. Privately-funded researchers also have an economic incentive to 'massage the figures' during trials.

Arguably this all depends on the actions of individuals and their motivations. There could be some evidence that doctors working in public system, where they are paid less, are likely to be motivated more by their social conscience than by a profit motive (or some combination of both). Choosing between treatments may not be clear-cut and there might be reasons for choosing particular treatments over another. It depends on motivations of actors, which we cannot easily discover. It could also lead to over-treatment of symptoms rather than causes, where there are incentives for increasing the numbers of patients return visits (and thus increasing business).

Extreme cases result in cases like Micheal Jackson's death, where a doctor trained in medicine was inventivised to over-medicate with powerful mind-altering drugs on a regular basis, and paid well to do so.

We could argue some of these criticisms apply to public systems too, mainly where medical research is privately financed. Especially this can occur when companies enforce long patents, a form of monopoly on intellectual property, which extract capital from medical products in the long term, rather than enabling generic versions to be developed. This is said to be justified by enabling companies to reap back their initial investment, but it might have been better to use public investments and patents for new medical research and innovations.

In the past, before healthcare was well-regulated by public bodies (and medicine was advanced) doctors often had a bad name as draining con artists, as described by Charles Dickens in the "Tale of Two Cities", where unscrupulous doctors would travel around selling dubious wares. Superstition was rife and it was difficult to find a good doctor. The best way to do this was by reputation. However, lack of public regulation or funding may lead us back to this.

David Cameron speaks of 'choice' but do really want to choose between doctors in a time of sickness? This might just add to stress. Choosing on price may lead to inequity in service and it's so hard to choose on 'quality' when there's no point of reference!

Competition on 'cosmetic' factors, like how good the hospital looks, won't necessarily lead to effective or efficient healthcare.

Infact having a 'marketplace' implies a variable service that, instead of leading to healthy competition, undermines trust (both for patients and between medical professionals!!).

The Profligacy of Today: Can we save our finances and the planet?

[Original Date of Posting: January 26th 2011]

We are hearing a lot at the moment about the reducing the government's deficit and the national debt. At the heart of this is a moral and ethical problem: excessive borrowing and spending builds up the burden and cost on future generations, in terms of the repayments and interest payments that build up.

Borrowing and consumption could be seen as the opposites of saving and conservation; whether that be conserving economic or natural resources. In our culture of consumption, many people have the urge to use their credit card to buy a bigger TV's or cars, or borrow more to buy a larger home. What is the impact on the world's resources of this consumption driven by debt? It has now become so easy to buy items, like mobiles, that will be thrown away after a short time. In fact many items are not 'built-to-last' but are actually built with 'inbuilt obsolescence' which encourages us to buy more!

We have a situation where we are rapidly using up many natural resources, with barely a thought for future generations who may have to suffer the repercussions. Once we have used up most of the oil; what then? Will we still be able to make cheap plastics for food storage and pharmaceuticals? When we have used up the earth’s phosphorus, can we easily make the fertilisers that we use for crops? What about when we can only find exotic animals in zoos, since we have destroyed their natural habitat? It is possible that future generations (if they exist at all) will be extremely angry about the lost opportunities that have been taken from them.

Therefore debt is much like unsustainable consumption; it is effectively stealing from the future. When politicians enter massive debt to provide services or infrastructure for the populace, if they do not do this in an economically sustainable way, they are simply deferring problems for the future. When banks started creating toxic debt to help home-owners gain excessive mortgages, we ended up with the financial crisis. Our economic calculations must look further into the long-term, and be more prudent. For example, if bee populations around the world collapse because farming with pesticides appears “cheaper” than organic farming, we could end up with a situation where one third of the food we eat cannot be pollinated! The network Avaaz recently launched a petition highlighting this ‘Global Bee Emergency’.

Proudhon once said: “property is theft” but perhaps also “debt is slavery”. Once you are in debt, you have no choice but to attempt to repay, and you can be drawn into a spiral of debt where you lose your will to be sensible. For instance, in the debate about student loans in the UK, we have not fully considered the mental pressure upon students who will forced to shoulder the burden of repayments for many years. Students may be sucked into a system which reduces their ability to pursue alternative or lowly-paid careers.

In terms of energy resources, we are rapidly burning up the finite fuels that fuel our whole economy. Solar and wind power may appear “expensive” today; but not if you look further into the future. If you build renewable power, at some point in the future you will still have that power source and it will become cheaper as we learn how to improve it. Whereas if you build a gas or coal power station, at some point, that source will run out.

China, India and other rapidly-growing Asian countries have some of the highest rates of personal savings in the world. In fact, China has a high level of saving in government, as well as households and business savings. Some have argued this culture of saving helps with resilience in the long-term. By contrast, the US now has one of the highest levels of household debt. It seems sensible to encourage saving, which increases resilience to the economic and environmental challenges ahead.

This is not to say that all debt and credit is bad. If lending is well-managed it can help people access opportunities they otherwise would not be able to; but they have to be able to pay off their debt eventually! Microcredit institutions such as the micro-loans in Bangladesh, set up by Nobel-prize winner Mohammed Yunus, can be an immense help for poor people. However, these institutions need to be fair and not become “loan sharks”.

The essence of the problem is consideration of fairness and equity, rather than a problem with credit itself; it is question of morals, not money. Yet the world of politics has hardly connected the dots between issues of ecological and financial debt - the IPCC (Intergovernmental Panel on Climate Change) does not mention the issue of debt and environmental damage. Moreover, the international economic institutions, the IMF and WTO, hardly consider environmental issues or inter-generational equity. We urgently need more intelligent harmonisation of policy.

If politicians want to cut the deficit, what about cutting spending on environmentally damaging activities, as well as improving efficiency? Governments are spending on fossil fuel subsidies amounting to $700Bn per year globally according to the International Energy Agency (IEA), as well as subsidies for intensive agriculture which amount to 39Bn Euros per year in the EU alone! Cutting the deficit may be possible without cutting important public services, but instead by cutting the wasteful spending that damages those in the future. Ultimately, the cost of profligacy can be financial and environmental ruin.

Climategate - Drawing Blood from a Stone

Once again, climate sceptics have tried to draw attention to uncertainties in climate science by publishing the private emails of climate scientists.

Is there any truth in these allegations of improprietry?

One particular email which has been drawn upon by the media refers to uncertainties in the climate data from the tropics. The statement by scientist Peter Thorne that "we need to communicate the uncertainty and be honest" is taken completely out of context.

What Thorne does say is that "observations do not show rising temperatures throughout the tropical troposphere unless you accept one single study and approach and discount a wealth of others". However, elsewhere in the actual email, Thorne points out that "uncertainties are largest in the tropics and Southern Hemisphere high latitudes where radiosonde coverage is poorest".

It is well known that data coverage in the tropics is poor due to a lack of weather data stations and meteorological records. This means that the temperature and climate change are not well understood in these regions, including phenomenon like the ENSO (El Niño/La Niña-Southern Oscillation).

In fact, this uncertainty actually makes climate change even more dangerous. It means that communties and countries are not able to adapt to the growing challenges and extreme weather events as they occur. Even a sceptical group of scientists recently agreed that global temperature is rising.

The uncertainty and lack of knowledge on certain areas actually makes climate change even more worrying and dangerous as people will be less able to adapt! For example, in this recent book chapter explains that over much of Africa, there is considerable uncertainty about how rainfall patterns will change, an issue affecting millions of farmers.

Is it a coincidence that the hacked emails were posted on a Russian server? Unlikely. Climate change has become a political issue. Putin once joked that climate change is good for Russia, and it certainly seems Russian oil companies are set to benefit from melting Arctic ice, even as the rest of the world burns. So it does not surprise me that the emails were posted on a Russian server.

Obama Killed the Copenhagen Talks

Since the Copenhagen conference, there has been much media speculation blaming China and India for the failure of the Copenhagen talks. However, the secret recording of the last hours of the Copenhagen talks, released by the German paper 'Der Spiegel', tell a very different story.

It appears that the meeting intended to save the planet from potentially irreversible climate impacts was not important for Obama. In fact at the meeting on 18th December 2009 he was recorded saying "we are not staying until tomorrow.... all of us obviously have extraordinarily important other business to attend to."

What is the "other business" Obama referred to that was so "important"? What could be more important the only planet we inhabit, the sole habitat for all life in the known universe, from potentially irreversible and catastrophic biosphere changes?

Of course - Obama was referred to the economic recession - a problem Obama obviously considers "extraordinarily" more important than the future of the entire planet.

China have been blamed for rejecting the mention of targets of 80% cuts by 2050, and asking for more time. However, it was Obama who first snubbed the Chinese Premier, apparently, by organising an important meeting without him. Due to this political snub, Wen Jiabao did not attend the final talks and was replaced by a junior minister; possibly affecting the final outcome (although this could also demonstrate the dangerous power of rumours).

The Chinese representative was right to point out that the vast percentage of historical responsibility for climate change lies with developing nations like the US and Britain; not with developing nations like China and India where the population is only just managing to escape from dire and abject poverty.

French PM Sarkozy tried to accuse the Chinese of hypocrisy; which deeply offended the Chinese - since of course the historical evidence and data demonstrate it is the developed nations that are being hypocritical. The whole energy system of developed countries has been built up around petroleum-based consumption, and now they are saying that the Chinese must somehow 'share' the cost of the climate problem that they caused themselves.

The basis upon which the burden and cost of mitigation were to be shared was not being hammered out clearly. The details were left entirely vague and undefined. The principle of 'common but differentiated responsibilities' had to be considered. That was probably why the Chinese asked for more time. They did not want to be backed into a completely unfair and unequitable agreement.

As the Chinese minister pointed out; "in the past 200 years of industrialisation, developed countries have contributed more than 80% of emissions. Whoever created this problem is responsible for the catastrophe we are facing". This is a totally ethical and reasonable argument. However at this point in the recorded meeting, the Chinese minister was interrupted and talked over by the other leaders.

At this stage, the talks were suspended for a break for the Chinese minister to speak to the Premier, and also to meet some developing countries in another room (India, Brazil and South Africa). However, it was then that Obama secretly met privately with this 'BASIC' grouping and hastily signed the appallingly weak 'Copenhagen Accord'.

Obama signed the agreement behind the European's backs, also completely excluding the rest of the world, thereby sneakily signing a weak agreement that suited his own interests (which are clearly not climate change). The world has been so blinded by Obama's personal prowess that they have brushed over this appalling failure.

He was not even willing to stay a few more hours to attempt to sign something more sufficient for the planet.

Only time will tell whether he will redeem himself.

Can you really discount the future?

Economists often use a 'discount rate' on their investments, effectively assuming that we value the present more than the future. It is assumed that in the future, people will be better off, so the value of savings will be lower.

The Stern Review turned that around; arguing that because of the chance of catastrophic impacts in the next 100 years from climate change, we should not discount the future at such a high rate. There is the chance that the next generation or the one after that will be worse off, in many ways. Particularly since we will have used up so many finite natural resources.

We come to the issue of intergenerational equity. Can we really 'discount' the future? Do people really value their children more than their grandchildren?

I would argue that is unethical. Of course we should value the present, but also think about the future for our children and grandchildren. We cannot just 'live for the moment' which justifies all kinds of reckless behaviour (and on an individual basis it will shorten your lifetime, for example excessive drinking).

A high discount rate reflects a level of impatience or myopia (short-sightedness). Instead we should be investing in the future, rather than solely focusing on fuelling our ultra-consumerist whims and desires. People used to say things like “a penny saved is a penny earned” - but people seem to have forgotten about those values. Household savings in China are much higher than in the West, perhaps one of the reasons they are doing so well.

Also, if we used a lower discount rate it would obviously make renewable energy investments much more attractive. Instead of continually paying to 'fuel' your boiler or supply, you pay an upfront cost for the equipment and then reap the benefits of free, renewable energy later on (apart from maintenance costs).

How much would it really cost to avert a climate crisis? Most estimates place the cost of mitigating climate change at about 2% of world GDP. Since world GDP is $60trillion, that makes it around $600 Billion.

However, the cost of the “bank bailout” was around $400Bn in the US and £850Bn in the UK according to some estimates! (Source: Reuters) That already exceeds the cost of mitigating climate change over the whole world....

The economists and politicians that run this planet must be crazy.