Second thoughts on riots

A friend recently pointed me in the direction of an insightful blog post by a former professor, Tim Burke, on the riots.  Tim Burke is a brilliant guy, a keen observer and, not coincidentally, takes almost all the credit (if there’s credit in it) for getting me interested in economic development in the first place.

Burke’s basic point is this: framing the riots as the products of “underlying causes of unrest,” instead of juxtaposing the relatively minor damage they caused against the massive economic damage done by bankers and media organizations is (1) not a very “empowering” line because the causes of riots are unbelievably complex, and (2) “forms a dyadic pair” with the tough on crime folks.

As far as it goes, this is absolutely true.  In terms of the first point – that on the unbelievable complexity that constitutes a “riot” – economists like Ed Glaeser, even if they get choose their interrogated variables well and come up with a robust study design, are still reduced to something like seismologists: they can tell you where the risks of upheaval are greatest, and maybe even what kind or degree are most likely, but they cannot accurately predict when or exactly where.  The complexity simply outstrips our models.

If you interrogate the second point a little, though – that of “underlying causes” versus a claim on Marxian justice – it seems also to re-establish another “dyadic pair” that conflict studies folks have worked for the past decade or more to transcend: that between “greed” and “grievance.”  I mentioned this pair in my previous post, and noted (as have others) that it was strange for an economist like Collier to use such morally charged language, since “greed” (one of the Seven Deadly Sins, no less) is basically used in his article to mean “economic rationalism.”  Burke’s use of “underlying causes” – perhaps synonymous with “structural causes” – could also be interpreted by an economist to mean something close to Collier’s greed… that is, the economy is structured in a way to incentivize looting.  So yes, there is definitely a spontaneously constituted “dyadic pair” here that could be reduced (as economists so love to do) to marginal revenue and marginal cost – supply and demand.  There is a (perceived) marginal revenue associated with participating in riots (due to looting) and a marginal cost associated with participation due to the likelihood of getting caught and punished.  So far, so good.

In a sense then, the left-right divide on the issue could theoretically come down to nothing more than divergent views on the elasticity of those perceived marginal revenue and and cost curves.  (Apologies in advance for the intro to micro-economics lesson.)  Let’s say you are right-wing, and therefore believe that the perceived marginal cost of participating is fairly inelastic – that is, as your level of participation increases, the punishment you get sky-rockets.  Let’s also say that the perceived marginal revenue of participating is very elastic: your marginal revenue from rioting and looting will pretty much remain constant, no matter the degree you choose to participate at, because there are no limits to the wealth that can be gained in such a way.  Well then, moving the marginal revenue curve – say, by providing job skills training, or supporting local employers with a lending program – will not greatly affect the quantity of rioting or looting that goes on:

However, if you move the cost of participating the same amount, you’ll get massive results:

Now let’s assume you’re a left-winger, and therefore believe that the elasticities are exactly reversed: that is, predatory behavior is punished in a heavy-handed way for even petty offenses, and therefore can’t rise dramatically. Moreover, you believe that rebels’ payoffs erode greatly the more they loot – perhaps because the more time they spend looting, the less unsecured wealth there will be to loot.  Now, cracking down on crime doesn’t have much of an impact:

By contrast, improving the overall economy does:

Burke is saying that all of this is somehow distinct from, and not as interesting or compelling as, the robber-baron narrative.  Here’s where I disagree… because at base, “structural”/ “underlying”/ “everyday” violence inherent in an economic or political system is just as much of a rights violation – and should provoke just as much outrage – as the splashier, more egregious displays of economic injustice.  Should, I say, but doesn’t.

Thorstein Veblen, one of the all-time underrated economists, described a theory of the private property system as initially constituted – in stark contrast to Locke’s liberal view of property created through value-adding – through violent collective seizure of resources, and intra-group strife resulting in the private apportionments of the those resources pertaining “organically to the person or user” (1934).  I love this notion, and it fits much more neatly with my intuitive understanding of human nature than Locke’s.  Moreover, at a fundamental level, while Locke’s theory (and modern mainstream econ) allows for radically unequal property in a value-free environment (it’s just traded against leisure time, and therefore a personal preference issue), Veblen’s notion is more sensitive to community dynamics and, ultimately, predation on some by others.  In fact the entire ho-hum, mundane system we seek to justify in neutral terms is predicated at its very core on Thrasymachus’ adage that might makes right.

It is that very notion that explodes the “greed” and “grievance” dichotomy – because the system doesn’t just happen to be structured to incentivize riots in underprivileged areas.  The wants and needs of the less powerful are in fact actively suppressed, their own ability to self-govern – to make decisions about their own fates – actively undermined.

Get angry about bankers.  Get angry about News Corp.  But get angry, too, about a political class that ghettoizes.


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One response to “Second thoughts on riots

  1. Pingback: A little hypocrisy | Resource Curse

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