Review: The Dispossessed

I read this 1974 book by Ursula K. Le Guin because i was looking for some classic, quality SciFi. This book won a slew of awards and — wow — did it deserve them!

Long story short, it’s the story of Shevek, a physicist from the moon (Anarres) of a home planet (Urras) and how their cultures compare. Anarres’s culture is anarchist, while Urras has many countries but the main one is capitalist (“Propertarians”).

I enjoyed how Le Guin really spelled out the essentials of anarchism as well as the “trap” of success in a capitalistic society where everyone, in the end, is owned.

Here are some great quotes:

  1. Shevek sat down on the bed facing the doctor and said, “You see, I know you don’t take things, as we do. In your world, in Urras, one must buy things. I come to your world, I have no money, I cannot buy, therefore I should bring. But how much can I bring? Clothing, yes, I might bring two suits. But food? How can I bring food enough? I cannot bring, I cannot buy. If I am to be kept alive, you must give it to me. I am an Anarresti, I make the Urrasti behave like Anarressti: to give, not to sell. If you like. Of course, it is not necessary to keep me alive! I am the Beggarman, you see.”
  2. Kimoe [an Anarresti] tried to explain status, failed, and went back to the first topic. “Is there really no distinction between men’s work and women’s work?” [Shevek:] “Well, no, it seems a very mechanical basis for the division of labor, doesn’t it? A person chooses work according to interest, talent, strength—what has the sex to do with that?” “Men are physically stronger,” the doctor asserted with professional finality. “Yes, often, and larger, but what does that matter when we have machines? And even when we don’t have machines, when we must dig with the shovel or carry on the back, the men maybe work faster—the big ones— but the women work longer. . . . Often I have wished I was as tough as a woman.
  3. The language Shevek spoke [Pravic], the only one he knew, lacked any proprietary idioms for the sexual act. In Pravic it made no sense for a man to say that he had “had” a woman. The word which came closest in meaning to “fuck,” and had a similar secondary usage as a curse, was specific: it meant rape. The usual verb, taking only a plural subject, can be translated only by a neutral word like copulate. It meant something two people did, not something one person did, or had. This frame of words could not contain the totality of experience any more than any other, and Shevek was aware of the area left out, though he wasn’t quite sure what it was. Certainly he had felt that he owned Beshun, possessed her, on some of those starlit nights in the Dust. And she had thought she owned him. But they had both been wrong; and Beshun, despite her sentimentality, knew it; she had kissed him goodbye at last smiling, and let him go. She had not owned him.
  4. Physicists, mathematicians, astronomers, logicians, biologists, all were here at the University, and they came to him or he went to them, and they talked, and new worlds were born of their talking. It is of the nature of idea to be communicated: written, spoken, done. The idea is like grass. It craves light, likes crowds, thrives on crossbreeding, grows better for being stepped on.
  5. [Shevek talking with male scientists on Urras] Do you find any women capable of original intellectual work, Dr. Shevek?” “Well, it was more that they found me. Mitis, in Northsetting, was my teacher. Also Gvarab; you know of her, I think.” “Gvarab was a woman?” Pae said in genuine surprise, and laughed. Oiie looked unconvinced and offended. “Can’t tell from your names, of course,” he said coldly. “You make a point, I suppose, of drawing no distinction between the sexes.” Shevek said mildly, “Odo was a woman.” “There you have it,” Oiie said. He did not shrug, but he very nearly shrugged. Pae looked respectful, and nodded, just as he did when old Atro maundered. Shevek saw that he had touched in these men an impersonal animosity that went very deep. Apparently they, like the tables on the ship, contained a woman, a suppressed, silenced, bestialized woman, a fury in a cage. He had no right to tease them. They knew no relation but possession. They were possessed.
  6. Shevek was driven out into the country in hired cars, splendid machines of bizarre elegance. There were not many of them on the roads: the hire was expensive, and few people owned a car privately, because they were heavily taxed. All such luxuries which if freely allowed to the public would tend to drain irreplaceable natural resources or to foul the environment with waste products were strictly controlled by regulation and taxation. His guides dwelt on this with some pride. A-Io had led the world for centuries, they said, in ecological control and the husbanding of natural resources.
  7. …all the people Shevek saw, in the smallest country village, were well dressed, well fed, and, contrary to his expectations, industrious. They did not stand about sullenly waiting to be ordered to do things. Just like Anarresti, they were simply busy getting things done. It puzzled him. He had assumed that if you removed a human being’s natural incentive to work—his initiative, his spontaneous creative energy—and replaced it with external motivation and coercion, he would become a lazy and careless worker. But no careless workers kept those lovely farmlands, or made the superb cars and comfortable trains. The lure and compulsion of profit was evidently a much more effective replacement of the natural initiative than he had been led to believe
  8. …every year… fierce protests were made: “Why do we continue these profiteering business transactions with warmaking propertarians?” And cooler heads always gave the same answer: “It would cost the Urrasti more to dig the ores themselves; therefore they don’t invade us. But if we broke the trade agreement, they would use force.” It is hard, however, for people who have never paid money for anything to understand the psychology of cost, the argument of the marketplace.
  9. On arid Anarres, the communities had to scatter widely in search of resources, and few of them could be self-supporting, no matter how they cut back their notions of what is needed for support. They cut back very hard indeed, but to a minimum beneath which they would not go; they would not regress to pre-urban, pre-technological tribalism. They knew that their anarchism was the product of a very high civilization, of a complex diversified culture, of a stable economy and a highly industrialized technology that could maintain high production and rapid transportation of goods. However vast the distances separating settlements, they held to the ideal of complex organicism. They built the roads first, the houses second. The special resources and products of each region were interchanged continually with those of others, in an intricate process of balance: that balance of diversity which is the characteristic of life, of natural and social ecology.
  10. Aside from sexual pairing there was no reason for not sleeping in a dormitory. You could choose a small one or a large one, and if you didn’t like your roommates, you could move to another dormitory. Everybody had the workshop, laboratory, studio, barn, or office that he needed for his work; one could be as private or as public as one chose in the baths; sexual privacy was freely available and socially expected; and beyond that privacy was not functional. It was excess, waste. The economy of Anarres would not support the building, maintenance, heating, lighting of individual houses and apartments. A person whose nature was genuinely unsociable had to get away from society and look after himself. He was completely free to do so. He could build himself a house wherever he liked (though if it spoiled a good view or a fertile bit of land he might find himself under heavy pressure from his neighbors to move elsewhere). There were a good many solitaries and hermits on the fringes of the older Anarresti communities, pretending that they were not members of a social species. But for those who accepted the privilege and obligation of human solidarity, privacy was a value only where it served a function
  11. Shevek was appalled by the examination system [on Urras], when it was explained to him; he could not imagine a greater deterrent to the natural wish to learn than this pattern of cramming in information and disgorging it at demand. At first he refused to give any tests or grades, but this upset the University administrators so badly that, not wishing to be discourteous to his hosts, he gave in. He asked his students to write a paper on any problem in physics that interested them, and told them that he would give them all the highest mark, so that the bureaucrats would have something to write on their forms and lists. To his surprise a good many students came to him to complain. They wanted him to set the problems, to ask the right questions; they did not want to think about questions, but to write down the answers they had learned. And some of them objected strongly to his giving everyone the same mark. How could the diligent students be distinguished from the dull ones? What was the good in working hard? If no competitive distinctions were to be made, one might as well do nothing.
  12. And the strangest thing about the nightmare [shopping] street was that none of the millions of things for sale were made there. They were only sold there. Where were the workshops, the factories, where were the farmers, the craftsmen, the miners, the weavers, the chemists, the carvers, the dyers, the designers, the machinists, where were the hands, the people who made? Out of sight, somewhere else. Behind walls. All the people in all the shops were either buyers or sellers. They had no relation to the things but that of possession.
  13. But then why do people do the dirty work at all [on Anarres]? Why do they even accept the one-day-in-ten jobs?” “Because they are done together. . . . And other reasons. You know, life on Anarres isn’t rich, as it is here. In the little communities there isn’t very much entertainment, and there is a lot of work to be done. So, if you work at a mechanical loom mostly, every tenth day it’s pleasant to go outside and lay a pipe or plow a field, with a different group of people. . . . And then there is challenge. Here you think that the incentive to work is finances, need for money or desire for profit, but where there’s no money the real motives are clearer, maybe. People like to do things. They like to do them well. People take the dangerous, hard jobs because they take pride in doing them, they can—egoize, we call it—show off?—to the weaker ones. Hey, look, little boys, see how strong I am! You know? A person likes to do what he is good at doing. . . . But really, it is the question of ends and means. After all, work is done for the work’s sake. It is the lasting pleasure of life. The private conscience knows that. And also the social conscience, the opinion of one’s neighbors. There is no other reward, on Anarres, no other law. One’s own pleasure, and the respect of one’s fellows. That is all. When that is so, then you see the opinion of the neighbors becomes a very mightly force.
  14. Does everybody work so hard, then?” Oiie’s wife asked. “What happens to a man who just won’t cooperate?” “Well, he moves on. The others get tired of him, you know. They make fun of him, or they get rough with him, beat him up; in a small community they might agree to take his name off the meals listing, so he has to cook and eat all by himself; that is humiliating. So he moves on, and stays in another place for a while, and then maybe moves on again.
  15. It’s anywhere on Anarres [the desire to control and dominate others]. Learning centers, institutes, mines, mills, fisheries, canneries, agricultural development and research stations, factories, one-product communities—anywhere that function demands expertise and a stable institution. But that stability gives scope to the authoritarian impulse. In the early years of the Settlement we were aware of that, on the lookout for it. People discriminated very carefully then between administering things and governing people. They did it so well that we forgot that the will to dominance is as central in human beings as the impulse to mutual aid is, and has to be trained in each individual, in each new generation. Nobody’s born an Odonian [anarchist] any more than he’s born civilized! But we’ve forgotten that. We don’t educate for freedom. Education, the most important activity of the social organism, has become rigid, moralistic, authoritarian.
  16. While Shevek got hungrier, while the train sat hour after hour on the siding between a scarred and dusty quarry and a shut-down mill, he had grim thoughts about the reality of hunger, and about the possible inadequacy of his society to come through a famine without losing the solidarity that was its strength. It was easy to share when there was enough, even barely enough, to go round. But when there was not enough? Then force entered in; might making right; power, and its tool, violence, and its most devoted ally, the averted eye.
  17. Well, this. That we’re ashamed to say we’ve refused a posting [on Anarres]. That the social conscience completely dominates the individual conscience, instead of striking a balance with it. We don’t cooperate—we obey. We fear being outcast, being called lazy, dysfunctional, egoizing. We fear our neighbor’s opinion more than we respect our own freedom of choice. You don’t believe me, Tak, but try, just try stepping over the line, just in imagination, and see how you feel. You realize then what Tirin is, and why he’s a wreck, a lost soul. He is a criminal! We have created crime, just as the propertarians did. We force a man outside the sphere of our approval, and then condemn him for it. We’ve made laws, laws of conventional behavior, built walls all around ourselves, and we can’t see them, because they’re part of our thinking. Tir never did that. I knew him since we were ten years old. He never did it, he never could build walls. He was a natural rebel. He was a natural Odonian—a real one! He was a free man, and the rest of us, his brothers, drove him insane in punishment for his first free act.”
  18. Fulfillment, Shevek thought, is a function of time. The search for pleasure is circular, repetitive, atemporal. The variety seeking of the spectator, the thrill hunter, the sexually promiscuous, always ends in the same place. It has an end. It comes to the end and has to start over. It is not a journey and return, but a closed cycle, a locked room, a cell. Outside the locked room is the landscape of time, in which the spirit may, with luck and courage, construct the fragile, makeshift, improbable roads and cities of fidelity: a landscape inhabitable by human beings. It is not until an act occurs within the landscape of the past and the future that it is a human act. Loyalty, which asserts the continuity of past and future, binding time into a whole, is the root of human strength; there is no good to be done without it. So, looking back on the last four years, Shevek saw them not as wasted, but as part of the edifice that he and Takver [Shevek’s partner] were building with their lives. The thing about working with time, instead of against it, he thought, is that it is not wasted. Even pain counts.
  19. My world, my Earth, is a ruin. A planet [Le Guin is talking about Earth, not Urras] spoiled by the human species. We multiplied and gobbled and fought until there was nothing left, and then we died. We controlled neither appetite nor violence; we did not adapt. We destroyed ourselves. But we destroyed the world first. There are no forests left on my Earth. The air is grey, the sky is grey, it is always hot. It is habitable, it is still habitable, but not as this world is. This is a living world, a harmony. Mine is a discord. You Odonians chose a desert; we Terrans made a desert. . . . We survive there as you do. People are tough! There are nearly a half billion of us now. Once there were nine billion [this was 40 years ago!] You can see the old cities still everywhere. The bones and bricks go to dust, but the little pieces of plastic never do—they never adapt either. We failed as a species, as a social species.

Bottom line: “What’s the good of an anarchist society that’s afraid of anarchists?” FIVE STARS.


Here are all my reviews.

Interesting stuff

  1. Listen: Concordance Over Truth, aka, there is no such thing as “free speech” on social media.
  2. Listen to this fascinating discussion of work, community and meaning.
  3. Listen: Why DEI failed and how to better help minorities.
  4. Listen to Robert Putnam on how to bring back community.
  5. Amsterdam is taking over its failing drinking water company (Waternet). What will happen next [Dutch]?
  6. Listen to What It Takes to Make a Great Company. Key point: The CEO of TSMC uses performance reviews (=grades) to help employees improve. When it comes to FIRING employees, he does not use PRs. Instead, he would focus on what part of the company needs to shrink. (But, he’s never fired anyone!)
  7. US schools are bringing shop class back, as students realize there’s money to be made.
  8. Wow. What a crazy story of a mad? Spaniard in the New World. Listen.
  9. Trump likes ripping people off, so he loves “shit coins” — Americans should be prepared to get ripped off. Watch. Related: Listen to a good discussion of how European financial markets are booming as Trump flails, how Europe is finding its own path as Trump rips up 80 years of cooperation, and — finally — how Trump is undermining trust, to bring America’s government down to his level.
  10. James Hoffman innovates coffee off the rails. Watch the fabulous.

H/T to CD

Three books of travels

I enjoyed all three of these, but their “special” nature may not appeal to you. Here’s a bit on each…

Project Hail Mary (SciFi, Andy Weir 2021)

In this book, an astronaut is trying to save the world from a virus but he meets an “alien” trying to do the same for its home planet. I really liked how Weir used so many science concepts to drive the story along [*****]. Even better, he switched from the backstory to the very tense front story often enough that I didn’t get an ulcer 🙂

Wow. I’m sitting here in a spaceship in the Tau Ceti system waiting for the intelligent aliens I just met to continue our conversation … and I’m bored. Human beings have a remarkable ability to accept the abnormal and make it normal.

I am not rested at all. Every pore of my being yells at me to go back to sleep, but I told Rocky [the alien] I’d be back in two hours and I wouldn’t want him to think humans are untrustworthy. I mean … we’re pretty untrustworthy, but I don’t want him to know that.

The Long Way (True adventure, Bernard Moitessier 1973)

This is the best sailing book I’ve read [*****]. BM entered a competition to sail around the world single handed. He did that, but didn’t stop until he had gone another “half turn” around. He didn’t want to win the prize in the end, as he just loved being one with the sea. He’s an amazing, poetic writer. His technical annexes are very detailed. I am sure that I would never make such a trip (I’d prefer to crew with many others), but anyone who thinks about long distance sailing or escaping from “civilization” would love this book!

And I had the feeling, again almost physically, that my hand drew them [sea birds] more than the cheese. I wanted to caress them, at least to try. But I did not dare; maybe it was too soon. With a clumsy and premature gesture I risked breaking something very fragile. Wait a while longer, don’t rush things, don’t force things. Wait until the waves of friendship, made of invisible vibrations, reach their full maturity. You can spoil everything, trying to go faster than nature…

For nearly a week the barograph line has been full of little jerks and tremors, as if the gods of the Indian Ocean were restraining their anger. Some say ‘Let’s clobber him.’ Others try to hold them back: ‘Come on, leave the little red and white boat alone. Can’t you see he’s not about to eat your precious icebergs!’ And the gods argue back and forth up there, throwing cirrus, halos and rainbows around.

My real log is written in the sea and sky; it can’t be photographed and given to others. It has gradually come to life out of all that has surrounded us for months: the sounds of water on the hull, the sounds of wind gliding on the sails, the silences full of secret things between my boat and me, like the times I spent as a child listening to the forest talk.

I ate nothing this morning, nothing at noon. Not from laziness or nerves; I just didn’t feel like it. Penguins and seals go for long periods without food in the mating season, other animals do the same in the great migrations. And deep within himself man may carry the same instinct to leave food aside, as animals do in the solemn moments of their lives. I watch this fantastic sea, breathe in its spray, and feel blossoming here in the wind and space something that needs the immensity of the universe to come to fruition.

If we listened to people like you, more or less vagabonds and barefoot tramps, we would not have got beyond the bicycle.’ ‘That’s just it; we would ride bikes in the cities, there wouldn’t be those thousands of cars with hard, closed people all alone in them, we would see youngsters arm in arm, hear laughter and singing, see nice things in people’s faces; joy and love would be reborn everywhere, birds would return to the few trees left in our streets and we would replant the trees the Monster killed. Then we would feel real shadows and real colours and real sounds; our cities would get their souls back, and people too.’ And I know all that is no dream, everything beautiful and good that men have done they built with their dreams . . . but back there, the Monster has taken over for men, it dreams in our place. It would have us believe that man is the centre of the universe, that all rights are his on the pretense that he invented the steam engine and lots of other machines, and that he will someday reach the stars if he just hurries a little before the next bomb. Nothing to worry about there, our hurrying suits the Monster just fine . . . he helps us hurry . . . time is short . . . hardly any time left.

Alas yes, money . . . for all our picking up butts and living with a reasonable amount of brains, more or less money is necessary, depending on one’s temperament. In any case, one thing is certain: one can go very far and lead an interesting life with very little money to start, because one always makes out once underway—provided one is underway.

King Solomon’s Mines (Adventure fiction, H. Rider Haggard, 1885)

This book launched the entire genre of “boys adventures” that showed up in later books and movies (e.g., Indiana Jones). It’s very dated in terms of its non-PC language regarding Africans and women, but it’s also gives an  interesting view into Victorian culture [****]. The plot — white men venturing into the lands of savages to recover (white) King Solomon’s treasures — is silly but it wasn’t so crazy at the time, given how much of Africa was blank on the map. Oh, and the animal killing is a lot less offensive when you remember that the animals had a better chance to kill men back then.

It is a hard thing that when one has shot sixty-five lions as I have in the course of my life, that the sixty-sixth should chew your leg like a quid of tobacco. It breaks the routine of the thing, and putting other considerations aside, I am an orderly man and don’t like that. This is by the way.

For to my mind, however beautiful a view may be, it requires the presence of man to make it complete, but perhaps that is because I have lived so much in the wilderness, and therefore know the value of civilisation, though to be sure it drives away the game

But whether you are right or wrong, I may as well tell you at once that I am going through with it to the end, sweet or bitter. If we are going to be knocked on the head, all I have to say is that I hope we shall get a little shooting first, eh, Good?” “Yes, yes,” put in the captain. “We have all three of us been accustomed to face danger, and hold our lives in our hands in various ways, so it is no good turning back now.” “And now I vote we go down to the saloon and take an observation, just for luck, you know.” And we did—through the bottom of a tumbler.

With a scream of pain the brute seized the poor Zulu, hurled him to the earth, and placing his huge foot on to his body about the middle, twined his trunk round his upper part and tore him in two. We rushed up mad with horror, and fired again, and again, and presently the elephant fell upon the fragments of the Zulu. As for Good, he got up and wrung his hands over the brave man who had given his life to save him, and myself, though an old hand, I felt a lump in my throat. Umbopa stood and contemplated the huge dead elephant and the mangled remains of poor Khiva [the Zulu]. “Ah well,” he said presently, “he is dead, but he died like a man.”

“Listen! What is Life? It is a feather, it is the seed of the grass, blown hither and thither, sometimes multiplying itself and dying in the act, sometimes carried away into the heavens. But if the seed be good and heavy it may perchance travel a little way on the road it wills. It is well to try and journey one’s road and to fight with the air. Man must die. At the worst he can but die a little sooner. I will go with thee across the desert and over the mountains, unless perchance I fall to the ground on the way, my father.” He paused awhile, and then went on with one of those strange bursts of rhetorical eloquence which Zulus sometimes indulge in, and which to my mind, full as they are of vain repetitions, show that the race is by no means devoid of poetic instinct and of intellectual power.

I am, to be honest, a bit of a coward, and certainly in no way given to fighting, though, somehow, it has often been my lot to get into unpleasant positions, and to be obliged to shed man’s blood. But I have always hated it, and kept my own blood as undiminished in quantity as possible, sometimes by a judicious use of my heels. At this moment, however, for the first time in my life, I felt my bosom burn with martial ardour. Warlike fragments from the “Ingoldsby Legends,” together with numbers of sanguinary verses from the Old Testament, sprang up in my brain like mushrooms in the dark; my blood, which hitherto had been half-frozen with horror, went beating through my veins, and there came upon me a savage desire to kill and spare not. I glanced round at the serried ranks of warriors behind us, and somehow, all in an instant, began to wonder if my face looked like theirs. There they stood, their heads craned forward over their shields, the hands twitching, the lips apart, the fierce features instinct with the hungry lust of battle, and in the eyes a look like the glare of a bloodhound when he sights his quarry.


Here are all my reviews.

The paradox of economic competition

Felix writes*

Economists have long defended the benefits of fair competition, explaining that it makes markets more efficient, increases innovation, and generates more benefits for consumers. It’s therefore surprising to see a lack of competition in academic economics, where the same few universities collect titles, honors and influence for their research.

How loyal are economists to their principles, when their professional interests are at stake?

Richard B. Freeman, Danxia Xie, Hanzhe Zhang & Hanzhang Zhou studied the concentration of award-winning academics across institutions, and concluded that across “18 major academic fields in the natural sciences, engineering, and social sciences,” economics was the only discipline that was evolving towards a more clustered knowledge and centralized institutional system, going against the other disciplines leaning towards decentralization.

Indeed, their study shows that prestigious awards such as the Nobel Prize are disproportionately given to academics linked or directly working with a few universities, including the University of Chicago, Harvard, or MIT.
The paper suggests that a reason for that could be the importance of prestige in the field of economics, where a debate between two points of view or theories is influenced by high status individuals and the reputation of their institutions. Most importantly, this concentration is problematic because it prevents diversity of thoughts, fosters “club mentality” and overall limits new challenging perspectives from emerging scholars (The Guardian, 2024).

In theory, academia should be a meritocracy where the best research rises to the top, pushed by its own quality. In practice, the structure of academic economics does not look like a fair market, it rather looks like a winner-takes-all market where power is concentrated among a few key players. The LSE Impact Blog argues that academics have internalized a hyper- competitive system where success is almost only defined by publication in a small set of high-impact journals, mostly controlled by scholars from elite institutions. This dynamic leads to an inefficient situation where many economists spend more time “playing the game” rather than engaging in genuine intellectual exploration.

This lack of genuine competition in an academic field encourages unethical behavior. A study discussed by the LSE on “scientific misbehavior in economics” found that many economists admit to engaging in “dishonest” behavior: manipulating journal rankings, favoring insiders in hiring and promotions, and even suppressing opposing research. Again, the main reason of that is the common and constant pressure to publish.

Moreover, a survey on academic ethics showed that nepotism, through publication bias, and exclusionary practices are widespread in economics. For instance, senior economists at high-ranked universities have significant control over publication decisions, invitations to conferences, and career opportunities (List et al., 2015).

Bottom line: The excessive clustering of awarded academics and the nepotist practices present in the economic discipline goes against the virtuous competition economists call for. It impoverishes the quality of academic research and increases pressure on economists to publish without integrity.


* Please help my Applied microeconomics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂

What is the cost of safety?

Mihaela writes*

For thirty years El Salvador has been under the control of two gangs, MS-13 and Barrio 18. Leaders had tried to dismantle the gangs and put an end to their reign of terror over the general public. However, only one leader has been successful so far in bringing safety to the country, President Nayib Bukele who has been in power since 2019.

It all began in March of 2022, when Bukele declared a national state of emergency sending the military to the streets, suspending constitutional rights, and most notably, carrying out mass imprisonments of anyone who even seemed to be affiliated with a gang, which brought the incarceration numbers to eighty thousand. He embraced mano dura (iron fist) crime policies that were aggressive — even overwhelming. While considered a dictator, his approval rating from locals stands at 91%.

Other Latin American leaders hope to adopt similar policies and have said that ‘he has accomplished a miracle’. Furthermore, crime rates have dramatically decreased from 51 per 100,000 in 2018 to 2.4 in 2022 since he adopted his new policies. This makes El Salvador the safest and most rapidly developing country in Latin America, as of today.

A graph comparing El Salvador’s and the US’s murder rates per 100,000 people since 2016

The country’s GDP per capita has also shown a promising increase between 2020, when it stood at US$4000, and 2023 ($5,400). A reason for the GDP increase can be explained by The Economist’s findings on how much gangs actually cost the economy of El Salvador. The total cost was said to be around 16% of the nation’s GDP, and it included the extra spending on security per household, bribes, and the loss of those who were deterred from working.

At first glance, this all seems to be a huge turnaround for the living standards in the country as well as its overall development. However, keeping 1% of the population imprisoned is bound to come with adverse and hidden costs to the country. Firstly, this came at a high cost for human rights. There were reports of the wrongful arrests of minors and adults alike, as well as reports of mistreatment and unexplained deaths of prisoners in the custody of the mass prisons.

Furthermore, there have been concerns about the country’s democratic backsliding and the lack of protection against the government’s abuse of power over its people. It’s also important to note that under Bukele’s economy, the country is experiencing higher levels of extreme poverty and increased inflation. The president inherited a weak economy and a state controlled by gangs. It’s expected that growth won’t be linear due to uneven development, but what is the right price for safety?

Bottom Line: El Salvador has become far safer and the economy has grown under Bukele, but that progress is undermined by weakening human rights and a lack of fundamental economic reforms. How long will the Bukele boom last?


* Please help my Real Donut Economics** students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂

** Why “Real”? In short, because (a) Raworth’s claims to being a “21st century economist” denies that all of her ideas were presented by others in the 20th century and (b) she presents no viable mechanisms (besides “be nice”) for achieving equality and sustainability. My students are more realistic. In long? Read this.

Work less and save the planet?

Števo writes*

Every adult who enters their first full-time job quickly understands that time is our most important asset. Weekends always seem short, rest is rare, and work suddenly devours a massive part of our life. In 1930, John Maynard Keynes predicted a fifteen-hour workweek by 2030. That result would release us from these pressures, but it does not seem likely.

That said, the ±40-hour workweek has become the norm in many countries, and average yearly working hours are falling. On the other hand, this trend has stagnated or completely halted for full-time workers in many western countries over the last 40 years.

Instead of more leisure time, citizens embrace consumerism, politicians strive to grow GDP, and “being busy“ has become a status symbol of the higher classes. Today, with sustainability at the forefront of many political discussions, some are exploring the possibility of a shorter workweek as a solution to both lowering out footprint on the planet while also freeing more time for ourselves. Some studies show that countries and households with longer working hours have larger climate footprints, but would decreasing our work time really deliver sustainability?

There are many caveats and possible ways to reduce working hours. If there is a top-down decrease in the working week, for example through a four-day workweek, shorter workday or more vacation days, it is important whether the wage will stay constant or decrease proportionally. If it were lowered, people would be forced to consume less, in theory decreasing production and our material footprint; but less income is also associated with austerity, which would hurt “precariats” who are already economically struggling. If salary stays the same, then the environmental impact would depend on people’s use of their leisure time.  Would they spend it cooking organic meals at home, or on more fast food or on a holiday in the Maldives?

Another option to reduce working hours would involve taxes that would internalize the negative externalities (spill over costs) from unsustainable consumption. The resulting higher prices would lower consumption and thus production, which would decrease working hours or even increase unemployment.

A third option would combine government support for better work-life balance with a revolution in social norms, so that people decided to both work and consume less.

Even if we could get lower production without harming the poor and a sustainable use of extra leisure time, there’s still another problem: fossil fuels. Cheap fossil fuels have really boosted productivity and efficiency in our economy. In a post-fossil world, certain sectors would need more work, i.e., “what capital will no longer do, humans will have to do.

Bottom Line: Working less would reduce environmental stress, but it’s hard to see how to reduce working hours without big changes in social norms, lifestyles and preferences.


* Please help my Real Donut Economics** students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂

** Why “Real”? In short, because (a) Raworth’s claims to being a “21st century economist” denies that all of her ideas were presented by others in the 20th century and (b) she presents no viable mechanisms (besides “be nice”) for achieving equality and sustainability. My students are more realistic. In long? Read this.

Paradise lost to overdevelopment

Hansika writes*

King’s Day is usually a cause for celebration across the Kingdom of the Netherlands yet for many Aruban locals, it signified a day to protest against the unregulated growth of hotels. Protestors marched on April 27th, 2024, to oppose Aruba’s mass tourism, which they argue was damaging the environment, the economy and their quality of life (Billy, 2024).

The problem: Hotel construction in Aruba has been vast, and each additional hotels adds to the burden on the island’s infrastructure and fragile environment. For example, high levels of pollution and sewage produced by the hotels leak into the surrounding areas, causing smog and contaminating fresh water sources nearby. Many of these hotels have also privatized beaches that were previously open to the public. Such hidden costs are not paid by the hotel nor the tourists that use their facilities, but local communities. A negative externality graph illustrates this problem.

As hotel expansion exceeds the socially optimal price (Po) and quantity (Qo), the marginal private cost (MPC) surpasses the marginal social cost (MSC). MPC refers to the direct costs to businesses such as utilities and labor, while MSC refers adds costs to society such as environmental harm and land loss. The blue triangle between MPC and MSC represents deadweight loss, i.e., the economic inefficiency caused by excess hotel construction, which falls on society.

Moreover, the majority of these hotels are all-inclusive, which encourages tourists to spend money on hotel activities, rather than local ones—a risky model in a country where tourism is the backbone of its economy. In Aruba, tourism accounts for more than 70% of its GDP, yet the economic benefits are limited, fostering dependency on hotel construction instead of local businesses (López, 2024). As tourism expands, external costs, such as those mentioned above, increase, and lead to the overconsumption of tourism-related goods and services. These costs fall on local communities while the benefits go to hotel developers.

Furthermore, the Dutch Caribbean islands do not represent themselves on international platforms as The Netherlands is supposed to speak on behalf of the whole Kingdom. This has caused relations between the two to deteriorate as climate priorities have diverged. For example, an NGO in Bonaire has sued the Dutch government for the latter’s perceived failure to protect the island from climate change (Holzhausen, 2024).

Bottom line: Demonstrations across the Dutch Caribbean islands emphasize how the local population are fighting not only for the environmental integrity of their islands, but also for their economic sovereignty.


* Please help my Applied microeconomics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂

Can we really have it all?

Ayala writes*

When I first started to read about Thailand’s “Sufficiency Economy Policy (SEP), I thought they had figured it out. It seems ideal. The SEP addresses a key problem — overconsumption — and emphasizes the importance of finding a middle path of self-reliance. It stands on the principles of moderation, reasonableness, and self-immunity, and does so by interacting with economic and development activities from the individual level to the community and national ones (Piboolsravut, 2004).

More specifically, the SEP encourages grassroot contributions to local, sustainable development (Schaffar, 2018). This for example can be seen from Naipinit et. al.‘s case study of how the SEP was implemented in four Thai villages. According to it, 80% of the villagers surveyed responded that they grow food solely for their own consumption, reflecting the concept of resilience that is integral to the policy. Moreover, by saving money on buying luxury goods, they can invest in protections from different crisis. It was also shown that in these villages’ social networks are strong and that locals work together to benefit their own community, resulting in both high-level products and in increased well-being (Naipinit et. al., 2014).

It is important to note that much of the SEP’s success can be attributed to its alignment with Thai informal institutions that build on Buddhism. The idea of sustainability in Buddhism involves the interconnectedness of the economy, society, and the environment (Song, 2020). This cultural link means that local institutions help support the SEP.

On the other hand, I found some criticism of the SEP. Schaffar suggested that the SEP has recently been used to justify Thailand’s dictatorship. The regime has gained its legitimacy by leading innovative development ideas, including the sufficiency economy and their commitment to the SDGs. They argue that their control stabilizes the economy (Schaffar, 2018). Moreover, it seems that much of the burden of living a sufficient lifestyle is directed towards the poorer populations, which are already living off quite minimal consumption (Elinoff, 2014).

Bottom line: I am no longer convinced that Thailand’s Sufficiency Economy Policy is a success story, but it does represent a step in the right direction.


* Please help my Real Donut Economics** students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂

** Why “Real”? In short, because (a) Raworth’s claims to being a “21st century economist” denies that all of her ideas were presented by others in the 20th century and (b) she presents no viable mechanisms (besides “be nice”) for achieving equality and sustainability. My students are more realistic. In long? Read this.

Polish couriers win against COVID-19

Dominika writes*

As e-commerce is on the rise, and many firms are stepping away from the classic model of physical stores, it is no surprise that there would also be modernizations in the courier services that deliver online purchases (Szelag, 2016) .

During the COVID-19 Pandemic we experienced a huge rise in shopping online as restrictions, lockdowns and safety regulations forced people to shop from home. This led to a large increase in the use of courier services (Czerwinska, 2023). The courier industry also had to adapt to the contactless system imposed on them by regulations. Although parcel lockers have been around for years, no contact regulations boosted their popularity above forecasts (Czerwinska, 2023).

One such courier firm that greatly benefited from the demand for parcel lockers is the Polish firm InPost. Founded in 1999, InPost has growing international reach in Europe, and has become the leading courier service in Poland (InPost). Their parcel lockers offer an easy way to send and receive parcels 24/7. In response to the challenges that the courier companies were about to face because of the COVID-19 Pandemic, InPost introduced changes to their services that would both ensure better safety for their staff and also expand their reach. Anticipating a rise in demand for courier services they expanded their network of parcel lockers (Czerwinska, 2023). According to their 2020 annual report, they increased their count of lockers by 78% and by an additional 63% the following year (InPost).

The pandemic years turned out to be very successful for the company as their foreshadowing and quick action allowed them to prosper till today. InPost’s automated system was convenient and safe (Czerwinska, 2023), and now the company has an even stronger market position.

Bottom line: InPost’s COVID-19 innovations served society as well as the company.


* Please help my Real Donut Economics** students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂

** Why “Real”? In short, because (a) Raworth’s claims to being a “21st century economist” denies that all of her ideas were presented by others in the 20th century and (b) she presents no viable mechanisms (besides “be nice”) for achieving equality and sustainability. My students are more realistic. In long? Read this.

True pricing: effects on competition

Sarah writes*

Although Trump has once again pulled the U.S. out of the Paris Climate Agreement, American firms still face consequences in EU markets. Numerous countries are still committed to non-legally binding climate targets, but the EU demands full adherence to its Green Deal policies. Non-compliance could bring legal and financial repercussions. Thus, businesses within the EU must evolve their models to align with environmental and social regulations. If national authorities fail to guide them through the transition, many may crash. Yet, many member states are lagging behind, requiring grassroots approaches to drive faster change.

One of those grassroot initiatives is the True Price Institute, a Public Benefit Organisation, that promotes the reflection of negative externalities in price mechanisms (True Price, n.d.). From April to June in 2023, they held an experiment at three different Albert Heijn (AH) supermarkets spread throughout the Netherlands (True Price & AH To Go, 2023). Customers received the following two options: to pay the price of coffee that they were used to, or a few cents extra. By increasing the price, the institute included the social and environmental costs of milk and coffee, which are both linked to exhaustive production processes. But did it really work? And how did customers respond?

Based on online survey responses and data analysis from the experiment, we might observe a gap between words and actions. While 36% of respondents expressed willingness to pay a few extra cents, only 15% of actual customers did pay more (True Price & AH To Go, 2023). Although the drop may reflect the difference between survey respondents and actual shoppers, the result also makes logical sense. The Dutch are known for being “gierig” (frugal). Plus, even when made aware of negative externalities, it may still be difficult for individuals to grasp the impact of their personal choices.

Although the report is optimistic about these results, it is clear that consumer choice alone will not drive sufficient change. Implementing a true pricing mechanism requires top-down support. To create strong incentives for sustainable transformation, companies must shift their perspectives. If they do not comply with the EU Green Deal, they will eventually be forced to internalize social and environmental costs at a much higher price. Instead, businesses should facilitate a smoother transition now to prevent economic shocks later. And that assumes we have more time — which we don’t.

For example, large companies will be required to report on non-financial directives starting in 2024 under the CSRD regulation (European Commission, n.d.). Previously, companies only had to report on their financial activities. However, to monitor alignment with social and environmental directives, the EU is demanding early accountability. (“Early” means relative to 2050 rather than in terms of climate action.)

True Price et al., 2014 have modeled how market shares might change as firms internalize those external costs:

According to their report, true pricing will strengthen innovation, reputation, and risk management — all of which offer comparative advantages on firms.

Once the EU has built its labor force for the sustainable transition, where will the U.S. stand? If the EU becomes more expensive, will it gradually reduce trade with the U.S. to improve its own market efficiency? And what if other major economies, such as China, follow suit?

Bottom line: Time will tell, but one thing’s for sure: Pay now or pay more later.


* Please help my Applied microeconomics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂