The Wondering Mind

One thing you learn to do when you learn economics is to think of a problem in terms of incentives. Not always easy, but I think I have a very clear and good example. The piracy problem off the coast of Somalia. This is something that has been in the news much this past week due to the U.S. crew on cargo ship which was attacked. Thankfully, all crews are now free and safe.

The piracy problem, however, is far from resolved and only seems to be getting worse by the day. And when one looks past a lot of rhetoric and bluster, it’s clear that no one has an answer to this problem.

On a BBC News web page soliciting public opinion, there appear to be broadly 3 types of actions being suggested. (I am not counting a lot of the political finger-pointing, which is not all that helpful.)

1. Punitive collective punishment, against all the pirates, the various villages they come from, or the whole damned country. A less violent (and legal) version of this is for forceful response to piracy.
2. Use of escort convoys. People make comparisons to WWII, but this is something that is actually being done now with some, if not all, shipments of food aid to Somalia.
3. Arming the merchant ships and sailors.

(There are also some other useful suggestions at the very end of the article here.)

What all these suggestions seem to have in common is that fact that they seem to have resulted from a complete lack of any thought on the incentives and disincentives at work on the various parties.

So let us look at each party one at a time and see what incentives and disincentives they have.

First, the pirates.  The incentives are obvious. According to one report on the BBC, one pirate claims to have netted $250,000 from just one incident. You don’t have to live in Somalia for that to be exceptional pay for a day’s work. The disincentives are that it is dangerous work. Just look at what happened to three of the pirates holding the U.S. captain hostage.

Unfortunately, this is not that much of a disincentive. Those cases where the pirates are captured, less actually come to harm, are rare. And for pirates who are captured, it is not at all clear what you can do with them. Somalia has no functioning government, less an effective judicial system. No country wants to start bringing Somalis to their own country to prosecute. Some have tried dumping them on Kenya, but no one actually knows how effective a deterrent that has been, or if the Kenyans are even equipped to prosecute pirates seized by other countries.

What we have just looked at are absolute incentives and disincentives. There are also comparative incentives and disincentives. How does piracy compare against alternatives for these people?

In terms of incentives, it compares very well, since there are very few, if any, alternative means of income for many of these people. If there are no alternatives, it doesn’t really matter what you think or feel about piracy.

The disincentives compare favourably also. Living in Somalia is hard and dangerous by any standards. The main difference between engaging in piracy and not seems to be that most people try to avoid the dangers of Somali life, whereas you are seeking a higher level of danger by pursuing piracy. Unfortunately, piracy has a huge potential payoff, the other option does not. And besides, there’s no getting away from the hardships of Somali life short of leaving the country.

When seen in this light, the suggestions for action don’t have much merit. Action against Somalia will not work, unless you are intent on wiping out the entire population (I think they call that genocide), or you want to occupy the country and rebuild it.

Convoys are hugely expensive and, for that reason, untenable.  The pirates can just wait it out, until the navies get sick of escorting convoys, and then start again.

Arming merchant ships is not very practical. The pirates can, and will, always out-gun any armed merchant vessel. The only certain result of such policy will be increased danger and fatality, mostly for the merchant crew. Remember, the pirates’ lives are already pretty miserable and dangerous; how much worse will armed merchant ships make things for them?

What everyone seems to be missing in all this is that they are intent on setting up punitive deterrents. Clearly that won’t work. If punishment as deterrent worked all the time, we wouldn’t have any crime. So how about taking away the incentives for the pirates?

One, admittedly very simplistic, suggestion would be to make it illegal (maybe even criminal) to pay ransoms. This would be somewhat different from the classic “kidnap for ransom” scenario in that the party capable of paying the ransom is disinterested. While a rich person might pay a ransom for a family member even if it was against the law, a business would not, at least not without risking going out of business.

Businesses would then be faced with a choice. They can risk piracy by taking the same routes, assuming that they can find people to crew the ships. If a ship is taken by a pirate, the company can either pay up and face being prosecuted out of business, or not pay and face ruin in the court of public opinion. Or, they can reroute their ships to stay clear of pirates.

As people have already observed, rerouting ships is costly. But so is paying ransoms, and the various navies who protect ships don’t come free.

Under such a scenario, the payoff from piracy may decrease sufficiently that there is no longer enough incentive to keep doing it. The problem is in the details of such a plan.

This will take collective action on the part of many governments to enact, and properly enforce, the anti-ransom laws. Piracy will not be discouraged as long as there are ships to loot from countries with no such policy. And enforcement will also be problematic. There will be those sympathetic to companies paying ransom to save lives (while conveniently forgetting that it was those companies who put those lives deliberately in harms way in the first place).

The point isn’t that I think I have some great solution. The point is that public debate doesn’t seem to be considering all the incentives at work in shaping our current situation.

They say you should never judge a book by its cover. Maybe the same thing applies to excerpts.

Reading these excerpts of a book on spouses and partners of paedophiles, I’m not entirely sure what the book is supposed to tell us. It’s entitled, “Understanding Child Abuse: The Partners of Child Sex Offenders Tell Their Stories”. The thing is, if the excerpts are anything to go by, there isn’t much to be understood.

Many of the women quoted are former victims of abuse themselves. And many also display clearly irrational judgement. Perhaps the best example of both is “Cheryl”, the last person quoted.

There was one social worker that tried giving me a lecture because I’d said I wanted to try and help him and she said, like, I shouldn’t stay with him just to help him. She felt because I had been in a violent relationship before, I had to be one of these people and I said, “No, I’m not like that, I just do want to help Graham – he’s worth helping.” He has his off moments but I don’t stay with him to stick two fingers up at everybody – I stay with him because I love him and I think he’s worth the effort.

“Graham”, incidentally, has been convicted of on multiple occasions, so has clearly demonstrated a tendency for recidivism. And there is nothing in any of Cheryl’s account which explains how Graham might be “worth the effort”.

Judging by these examples, it’s hard not the reach the conclusion that most of these women find themselves in their predicament at least in some part due to their own circumstances and failings. Which is not to say that all women whose partners turn out to be paedophiles are that way. “Rachel” perhaps best exemplifies a woman who is as close to someone who is not herself  already “damaged” or displaying poor judgement.

Even in her case, however, there is nothing in her story which lends us any greater understanding of child abuse, the abusers, or their partners and family.

Unless the excerpts are missing something, I’m not sure what the book achieves, except satisfying morbid curiosities.

I seem to be on a role lately with the “What price…?” questions. Well this time, it’s about Guantanamo.

The “enemy combatants” being held there by the Bush White House have been a source of controversy (and many would say a source of shame) for the U.S. since the facility opened for detention of the enemy combatants. And in this latest report by the BBC, there is nothing particularly new being said by anyone. However, concentrating as it does on the issues of the legal process of trying to prosecute the inmates, it took me back to some of the mechanisms the British tried while dealing with “the Troubles” in Northern Ireland, especially back in the 1980’s and early 1990’s.

The British probably tried just about every known method of dealing with terrorism during the whole period of the Troubles, both legal and illegal. And although they never treated their terrorism problem as anything other than a criminal problem, unlike the American approach to Al Queada and other current terrorist groups, they also often faced problems when trying to prosecute the perpetrators of the terrorist acts.

In particular, the British government over the years tried to introduce a raft of different legislation to legalise new courts, procedures, and other methods of judicial process for prosecuting the terrorists. This was often born out a perceived need for added security, similar to concerns the Americans have about the prisoners in Guantanamo.

There were concerns about keeping secret the identity of personnel and methods of investigation. This was due to genuine concerns about protecting informants, as well as protecting security service agents and policemen, who were under real threat of assassination. It was also due to genuine concern about keeping secret methods which had proved effective against the terrorists and might be used again in the future.

But it was also due to unjustifiable reasons, such as a penchant for an unnecessary degree of secrecy among the security agencies and the Royal Ulster Constabulary, the police force in Northern Ireland. It was also no doubt to protect themselves from embarrassment and criminal prosecution should information about their own dubious and illegal acts be revealed.

Even so, the British government kept the process within the criminal justice system. They just tried to change it to suit their perceived needs in prosecuting terrorists, and in the process pushed the boundaries of accepted law and legal tradition.

What should be instructive, and should have been warning to the Americans, is that even with these limited changes (at least compared to what the Americans are trying to do with the “military tribunals”), there were huge problems. More than a few prosecutions failed or were overturned on appeal because the methods used by the police and security agents, or the new laws under which the terrorists were prosecuted were deemed illegal.

There are many in Britain who believe that such tactics were unnecessary and were ultimately counterproductive in that they brought the whole British legal system of justice into disrepute. And this disrepute is nothing compared to the contempt many hold the “legal” proceedings the Bush administration is desperately trying to force in Guantanamo.

The approach the Bush administration is taking is lazy and that of cowards who are afraid of their own shadows. Fact is that many dangerous people can be prosecuted and incarcerated using normal methods of criminal justice. It may be harder and more time consuming, but it can be done. And it is true that the world would be a little more dangerous a place as a result of the few people who we cannot prosecute this way.

I would suggest, however, that the difference in the level of danger would be minuscule. Especially since the officials trying to keep us safe should then be motivated to redouble their efforts within the existing system, which may result in even more terrorists being captured.

More to the point, the world is not, and will never be, a “safe place”.  You could be killed going to work tomorrow morning, or going shopping for groceries. With or without terrorism, people cannot function without finding a way to manage these risks of living.

This is a lesson many Britons learned while the IRA were particularly active in their terrorist campaigns. It is a lesson many Americans have learned as well. Unfortunately, the Bush administration are not among that number. Let’s hope that Obama and his administration are more mature and thoughtful.

The great thing about the American sense of exception is that it give Americans a boundless sense of hope and optimism about their place in the world and the future.

The bad? You get hare-brained people like Palin giving it a really bad name.

The consequence? You’ll live in splendid isolation with others shunning you.