Vanilla Gorilla: "What's it worth to you?"

[We have picked up another contributor, Vanilla Gorilla. VG will provide us with specialized and unorthodox commentary on economics and African politics, in particular. We are filling up fast - if anyone else wants in email me --Dan]

One of the questions I frequently ask myself is why Americans, though seemingly dissatisfied (some intensely) with the current government, do nothing to change it? It seems to me that if European countries with no insurmountable differences in cultural traditions or legal practices can survive tolerably with different accountability systems, why can't we? Or yet another way of putting it is to ask why there is such low accountability for the American government? This bothers the crap out of me, because, as we all well know, voters are suffering from an acute case of the political equivalent of buyer's remorse.

As I was slogging through some particularly boring academic articles on the economic nature of the firm, I came across a hidden gem of a topic: appropriable quasi rents. OK, I admit it, whatever it is does not sound sexy, is not related to any terrorist group, and will not attract government spooks to swarm the server. But I do think it has some explanatory power with regard to America's busted democracy. But before I start, I'd like to preempt that terrible joke you were going to make by saying that the term quasi-rent has nothing to do with any half animal hybrids living in the apartment down the hall. [Dan: Bush put a stop to that, thank Jesus]

The definition of an appropriable quasi rent can best be seen through an example. Consider an oil field and a refinery connected by a pipeline, all owned by separate parties. The pipeline buys from the oil field, and sells it to the refinery. In this scenario, the pipeline has both the refinery and the oil field held hostage. It has to pay the oil field only as much as the field could sell the oil to someone else for, which is not much because they have no way of moving the oil without the pipeline. Likewise, it will charge the refinery up to the amount that it would cost to get their crude outside the pipeline. Quasi rent refers to the difference between the value of the oil to the pipeline and the amount at which another buyer/seller could offer an alternative transaction. In this case, the pipeline appropriates all of both rents, innit?

Here is the NY strip: Isn't the government pushing harder and harder in a exactly symmetrical situation? The cost of revolution is incalculable, but the costs of a less dramatic change are substantial as well. Political change isn't as simple as politely asking Canada to come to dinner and please bring their low crime and good healthcare. We are faced with a high cost of alternatives, and thus we are being "charged" a higher and higher portion of our well-being as a result.

It is difficult to think of an aspect of governance that doesn't bear this out, from rising economic inequality due to tax/corporate policy, to loss of life and freedom under the auspices of the war on terror. Hell, if you don't feel like the no-bid contract to Halliburton was Cheney's way of cock-slapping you in the face, I won't be able to convince you of this fact. The truly sad thing is that this is only one way of warming over the leftovers of every social scientist since at least Machiavelli.

In this respect, though, the issue isn't limited to corpulent America, the whole world gets in on the dish. Those precocious Neocons have shown that they're willing to oppress anybody to satisfy their desires, and as such, everyone else needs to decide how much their willing to pay for an alternative. Who's it going to be, China? Some EU-like creature going to step up? Iran got the nuts to stand up? Or can everybody just stand pat? As a parting shot, I think it is interesting that many Americans, who are *supposed* to be willing to sacrifice freedom only at death, live tiny lives hedged into unrewarding careers etc., while a supposedly oppressed society in need of our liberation is full of people willing to pay the ultimate price for their liberty.

[Score 1,000,000,000 bonus points for Vanilla Gorilla. Anything involving pipelines is genius! Right on. --Dan]

Posted by Vanilla Gorilla at February 15, 2006 04:52 PM
Listed under The White House .