Poverty (Part 1)

Last year, I took an economics undergraduate module, called "Development Economics". Dr Mani, the module teacher was talking about the size of the international foreign aid, saying it was an enormous amount, that she could not believe it when she first saw the figure, more than $100 billion annually.

I have just thought about it, and realised actually it is not that big number considering the extent of poverty in the world and the gap between the richest and the poorest nations. I did some research, and that actually makes that "$100 billion" number even worse, in terms of quality and therefore making the effective size of the international aid significantly lower than the $100 billion.

I will write about the problems with international aids and donor countries' policies in Part 2, but here I just want to show why those numbers are low:

1. The number is low in nominal or absolute term:
The estimated total amount of international aid is $123 billion in 2008.
The World Bank estimated there were 1.4 billion people living on less than $1.25 a day (at PPP) and 2.7 billion people living on less than $2.00 a day.
That makes it $0.24 per person (or $0.13) a day.
That number is clearly not enough to support or take those people out of poverty.
(I know it's not meant to spent on everyone in a single year and hence reducing poverty, but this is just to show the size of the aid in relation to the problem it's trying to solve. Part 2 will explain it in more detail.)


2. The number is low in relative term:
There are 34 countries in "Advanced Economies" (by definition of IMF), which as a group has a nominal GDP of more than $40 trillion. That means the total international aid equals to mere 0.3% of GDP of these 34 rich nations.

Superpower (Part 1)

The renowned illusionist, mentalist, magician and much more, Derren Brown has a new show "Derren Brown Investigates".

In today's show he goes to Holland to learn Bronnikov's method with a blind lady from Coventry. The course is conducted by Vladimir Bronnikov, the son of the founder of Bronnikov's method, Vyacheslav Bronnikov.

Their main ability seems to be that they can make people see while blindfolded, hence making it possible for blind people to see, even though their eyes cannot see.
You can see the show through youtube, which shows more about it (although doesn't explain much about the method and how it works, but let me point out that it is not Derren's fault, but rather the 2 Bronnikovs' fault).

However, to me the last 10 minutes or so, when Derren interviews the founder of the method, Vyacheslav Bronnikov.

Vyacheslav Bronnikov claims that he knew that he was coming to this world before he was born and it was his choice to be born. He also claims that he already had lots of capacity when born (although I am not sure what capacity he refers to).

When Derren asks about the 'energy ball', which was central to the beginning of the course, Bronnikov gets very defensive, saying lines such as "You don't have any understanding of what you are saying", "Let your scientist in England organise the test".

Yet his explanation to the original question doesn't go much further than "when you touch your hands, it creates a connection and everything else is secondary. It's all in the mind." I don't know about you, but that doesn't look like much of a statement, let alone a logical explanation, which is what you expect from the 'expert'.

Then Derren moves on, he brings out a box and puts it in front of Bronnikov, asking if Bronnikov is able to see what's inside the box. Let me point out, that's what they do during the course, seeing what's inside the box and going blindfolded without bumping to obstacles. People who have mastered the Level 3 of the course are supposed to have that kind of ability, seeing things blindfolded etc. However, Vyacheslav Bronnikov has mastered the Level 6, therefore it should be a trivial thing for him to do, and it would have shown that his methods work, he is able to do this extraordinary things and that would have shut up his critics.

But, no, he simply refuses to do it and his mood changes to cold and almost anger. Then, he makes some illogical statements once again, blaming Derren: "You form a negative show, your documentary", "You create problems by yourself", "You don't have a scientific understanding", "You don't have an understanding of this technology" and he concludes his nonsense comments by refusing: "I am not playing circus here. I won't prove anything to you. This is not serious".

It is up to him to prove that his methods work. If he is not able to do a 'simple' task, I don't know how he is going to be able to go under any scientific experiment?
Yes, Derren doesn't understand his technique, that's the point! That's why he asking those questions to clarify and make sure they are true, yet he refuses to give any proper explanation or indeed a simple illustration at work. His excuse: Derren is doing something negative, so blame him (this is so often used by those who claim to posses any kind of superpower, blaming the person in question if something doesn't work out).

His answers become even more bizarre: "I see you're trying to see weak-spots. But that's OK, because you're from England", "You are not a scientist, why do this? You don't deal with proofs".

Is he implying, anyone who is not a scientist, doesn't need proof, just believe without questioning, yet he talks about his method as "human development", that seems to be "human un-development" to me. Or is he simply saying ordinary people should never ask for a proof? Whichever way, it's a bullshit, just a way of not answering the question.

After so much refusal of giving any proof or illustration, he mentions about a boy in Rostov na Danu (apparently a small town in Russia), who never developed eyeballs, yet able to see, and he never knew he was actually blind. Oh, the boy just doesn't see, he can see much better than Derren.

Derren gets happy, as he thought he got some example, so asks for the name of the boy. Bronnikov simply says "I don't have this information".

Whaaaaat? So that's nothing other than a myth and a legend, or just a made-up story by Bronnikov himself. Indeed Derren's team could not find such a boy after research in the town Bronnikov mentioned.

So all in all, Bronnikov has been completely busted. Oh, did I mention that his courses lasting between 16 and 20 hours, costs a mighty sum of €600. He offers 3 courses for Stage 1, and 1 course each for Stage 2 and 3, making the grand total of handsome €3000 for the entire course.

It sounds lot like a scam to me, yet there are people who has re-taken his courses (although retakes are at discounted price) over and over again, but still seems not be able to do those extraordinary things that they have been promised. In their website, they claim that up to 80% of the brain power will be used against 2-5% for most people. I don't think so, I simply don't believe that's actually physically possible. I think those people's ability to think clearly is gone down, otherwise why would they keep paying for the same courses, that hasn't worked for them?

Prison

During an economics class:

... Teacher: There has been a case, when an elderly woman didn't pay her council tax, she was put into jail.

Student: Great! She gets to keep the money, and in return she gets free accommodation and food.

As it happens, it was during my economics class and I was the student. Aside from the joke, I was trying to make a point, that prison is a burden on the society. After all, it accommodates people who have contributed little to the government pocket yet it digs deep into government pocket, and it can reach ludicrous levels in developed nations.

In the UK, on average it costs in excess of £40'000 a year to accommodate a single prisoner, compare that number against the median household income of around £26'000 (note that it is household income and not personal income) in the UK or GDP per capita of £400 in Ghana. Given there are more than 83'000 prisoners, and rising, it costs more than £3.3bn to run all the prisons in the UK and this doesn't include the initial cost of almost £120'000 to create a new prison place. £3.3bn is more than the entire economic output of Malawi in 2009, a country of 15 million people.

I am not saying we should close all these prisons and let out all the prisoners back to the society, in which case they may actually cost the society more than what it costs to lock them up and without a doubt, there will be more human costs, which I refuse to put a value on (but you can ask a life insurance broker or a statistician about that value).

So I am not making any point and just putting a silly, pointless argument? Maybe, I am, but I think prisons have to be self-financing, mainly through 'forced' labour. I think that's only fair to the rest of the society, why should we be paying for their 'free' accommodation and food? In the USA, 'prison-industry' (sale of prison-made goods since 1979) is quite significant, but I doubt it's bigger than the total cost of running the prisons. Besides, inmates are paid from this industry, rather than financing the prisons.

Of course, pedantic ones are going to question 'free' accommodation and food, and if it's really 'free' then, will be I be happy to receive this 'free' accommodation and food. Of course not, for inmates, there is a loss of 'freedom'. But 'freedom' is not a zero-sum game, just because someone's freedom is being restricted doesn't mean I gain more freedom. Maybe it does, and maybe it creates a safer and more 'free' place for those outside the prisons. But that still doesn't mean we should take the burden of financing the prisons. If I smoke in a non-smoking area, let's say a train, then I will be fined, and other passengers won't be paying me to stop smoking, so why should we pay to keep those prisons operating?

(Although, there are arguments that says actually other passengers should pay me. It does make sense, till you take into account that many others start smoking to get money from other passengers and coming to the point of everyone start smoking, and hence making the whole society worse off, even though it may be optimal. Maybe that's why there are many prisoners who keep going back to jail, because they are not forced to work. But then why doesn't everyone commit a crime to benefit from these 'free' accommodation and food provided by the rest of the society, well I think most of us have committed some crime*, intentionally or unconsciously, but beside that we have to take into account of 'morale')

Some could argue, there is actual benefit (which, by the way you cannot really measure, because it's only preventing a potential cost that would occur if we let all prisoners out) from financing the prisons, and as long as the value of this benefit exceeds the cost, we should finance the prisons. But I am a believer in 'real' costs and benefits, and I believe every prisoner should work and the sales of inmate-produced goods should finance the prison and not us. After all, why should they not be working, whilst the rest of the society working and paying taxes?

*Have you ever copied a song from a CD to your laptop or MP3 Player? Well, if you have done so, that's illegal (at least in the UK, even though it's obsolete, and silly, it's still the law).

UPDATE (on 13th March 2010):
In Britain, now it costs about 140 thousand pounds to lock up a young offender for a year according to The Guardian Weekly on 5-11 March 2010 edition (which says, the estimates are from The New Economics Foundation thinktank).