Point/Counterpoint: Establishing an Intergalactic Union and Monetary Fund

(This post will contain the arguments in favor of establishing an Intergalactic Union. Check back within the next few days for the counterpoint.)

We've spoken before about the detriments of barring trade and communication from other planets. Suppose, however, that the democratic systems in the DC universe suddenly decided to open themselves up to trade. The question now is: should the major, democratic planets in the DC universe establish an Intergalactic Union (IU)? I see several potential benefits for establishing a single marketplace and universal currency among member planets:

1) Minimizing War. Let's face it, even though planets in the DC Universe remain relatively independent of one another, there are lots of struggles going on. It seems that the only time planets communicate is when they're engaged in some sort of conflict for domination of another or if one is in the middle of a campaign for conquest of the universe. See the Rann-Thanagar War, Final Crisis, Secret Invasion, and countless other examples of intergalactic warfare.

We already know that some entity in the universe cares about the continued survival of the galaxy. In the DCU, the Green Lanterns are a police force composed of humans and aliens from various planets in the universe, whose jobs are to patrol each sector in space at the behest of the Guardians of the Universe. You would think that with all the conflicts going on (Darkseid nearly just unmade existence, after all), the Guardians might be interested in acting as more than just a safety net, but perhaps also try some preventative measures. Organizing major planets into an IU would certainly help there. Building more economic interdependence would foster an interest to prevent the destruction of other planets.

Consider the European Union. What do you think the probability is of a major armed conflict between France and Germany? Likewise, if Rann and Thanagar were trading partners and Rann was reliant on Thanagar for its imports of the Nth metal--a resource native to Thanagar that has the property of negating gravity--do you think that there would have been a war? Of course not. It would have been in Rann's best interest to keep importing gravity boots.

2) Building Stronger Currency and Improving Wealth. Establishing a single market and an Intergalactic Monetary Fund (IGMF) would allow member planets to enjoy freedom of movement of goods, capital, people and services. Humans would finally be able to hover through the sky, to walk on walls, and yes, float around in flying car. In exchange, Thanagarians would finally get their hands on Earth's iPhone and surf the web freely on their 3G networks. Investments and property purchases would easily be moved between planets. Joe Smith would be able to purchase that summer house on Daxam that he's always dreamed of (assuming he could live there -- Daxam is very xenophobic and had actually invaded Earth before. It also lives under a red sun called Valor) .

This would be made even simpler with a common unit of currency, the Galacto. The Galacto would help strengthen the single market by increasing transparency, minimizing exchange rate fluctuations, keeping interest rates low, and protecting against shocks in the global market. Looking at the EU, the European Commission estimates that since its creation in 1993, over 2.5 million jobs have been created. Furthermore, approximately 900 billion euros in wealth and productivity has been generated since its inception. The point: the IU would improve quality of life for all humans, aliens, New Gods, mythical entities incorporated into the system.

3) Inspiring Other Nations to Reform. If ever there became trade talks or a UN type organization, the IU would obviously have a substantial amount of power and influence. And this is not a bad thing since this includes the power to encourage reform in smaller or developing planets (LDPs). Previously hostile systems, dictatorships, etc. might be more swayed to embrace a liberal, democratic government and economy and contribute to the global marketplace.

These are just some of the many reasons why this union would work. Any readers care to submit any others?

share on: del.icio.us digg reditt su

Could New Krypton Have Stayed on Earth?

The Citizens of New Krypton by Pete Woods.

It's truly a shame that Kandor's temporary stay on Earth did not work out as well as Superman had intended. But, economically and politically, it was doomed to begin with.

After Superman defeated Brainiac and retrieved the stolen city of Kandor, he restored it in its original integrity near the Fortress of Solitude at the North Pole. Overnight, Earth became the new home for approximately 100,000 Kryptonians. Hopes were high to assimilate the Kryptonian population into the Earth community and to teach them the way of Earth cultural and democracy. Yet as tensions rose (unfortunately human tendencies towards xenophobia and paranoia garnered the mistrust of many ill-tempered Kandorians), an exectuve decision was made by Alura-El (Superman's aunt and Supergirl's mother) to retreat completely into autonomy. Kryptonians were to live within their sanctuary at the North Pole, mining their own resources and disconnecting completely from the affairs of the primitive humans.

In effect, Kandor had become an autarky, a completely self-reliant society, economically independent of other nations. Unfortunately, prohibiting a society of 100,000 citizens from international trade or any sort of economic interdependence with other nations is not easy in 21st century Earth. The world is globalizing--fast. Technology, communication, and industry are rapidly expanding into global markets and more nations and societies are quickly being integrated into this system of trade and interdependence. This is why recessions tend to have global impacts; the increasd interconnectedness of these markets makes local economic collapses that much more difficult to contain.

Economic autarkies today either are not real autarkies, or are not doing so well. Consider the case of North Korea. It maintains an "autarkic" command economy and a strict isolation policy from Western countries. The problem is that it is not completely cut off, as Kandor intends to be. In 2008, North Korea's trade rose 30%, three-quarters of which came from China. It has even begun conducting small amounts of business with South Korea. Actually, North Korea also receives considerable foreign aid, from countries including South Korea and even the United States. Beyond that, its economic conditions aren't so hot. Growth is significantly hampered due to its trade restrictions, even though GDP has been rising in recent years. Poverty continues to be a huge problem as well.

Kryptonians do have certain advantages that would aid them in remaining isolated from human existence. A major one is that, apparently, they do not need to eat (how sad!). This means that finding resources that can be made into a source of food is not a problem. Yet, there is no denying that the Kryptonians do need some Earth resources. They have established science and medical guilds, meaning they are interested in innovation and technology. Obviously, they're going to need more fancy crystals to put into crystal tubes. They have labor guilds, which means they need to use tools. And Krypton is a society which pours most of its resources into its own rapid development.

Since its resources on the original Krypton were all but depleted, it needs to make due with the scarce ones available on Earth. The North Pole has untapped minerals and fuels, but I'm betting Kandor will need more that, especially if it wants the kind of technology that will send a child through the galaxy in a crystal ship. This is why Alura sent teams to explore human nations -- it wasn't just to spy on them, it was also to gather stock of what resources might be available to them.

Eventually tensions rose so high that, following an epic battle with the Justice League, the citizens of Kandor left Earth and established a new society on a different planet altogether (New Krypton). It's truly a shame. Imagine the implications for Earth's economic growth and technological innovation if we could have worked out or differences and integrated Kandor into the global marketplace. Once again, we blew it.

share on: del.icio.us digg reditt su

Lloyd's of Asgard

So far, we've discussed the issue of superhero/supernatural insurance as seen in the posts by the distinguished ShadowBanker here and here.

These posts got me thinking about insurance for superheroes. Not just insurance purchased by the public to protect against any damage caused by superheoes, but insurance purchased by the heroes themselves. Insurance firms in the real world have shown themselves willing to insure elements of an invidual such as the legs of a supermodel or a singer's voice. If these special abilities and attributes can be insured, why can't super powers?

This type of insurance would likely apply to those heroes who are not independently wealthy. If Tony Stark's armor is damaged, he has the money to repair it. But if the Punisher loses a prize shotgun or has his property crushed by an irate Russian man, how will he get a new one (especially since he has no discernable source of income)? It's up to superhero insurance to replace these tools and abilities, if possible. If the Flash loses his super-speed, the company which insures his power would be tasked with buying a rack of chemicals and getting said rack struck by lightning while Barry Allen stood next to it.

In my previously listed example a supermodel's legs contribute greatly to her livelihood. The model makes her money based on her looks and if those looks are damaged, her ability to earn money is greatly diminished. Hence the need for insurance. This is not necessarily true for superheroes. Most heroes do not derive their economic support from their powers or tools. However, the powers and super weapons do have intrinsic value for the protection of society. If Luke Cage loses his powers, there is a void in the protection of urban areas. The first goal of insurance should be to pay for an attempt to restore his powers. But if this is unsuccessful the company insuring Luke Cage's invulnerability could pay for youth centers and more police officers if Cage's powers disappear. This would be a good option in lieu of providing the money to Cage himself.

Another aspect of insuring superhero attributes and weapons would be to protect against any damage caused by them. This particular insurance could work a lot like car insurance. If your car damages another vehicle, the insurance you purchased for your car will be used to repair the damages to another individual's property. This type of coverage could be applied to the superhero world. If, for example, your mighty thunder hammer Mjolnir is used to destroy a children's hospital, the insurance you place on the hammer could be used to repair the damage up to a pre-arranged amount determined by the insurance companies.

The insurance could also protect against damaged caused by high-jacked superpowers. If the Mandarin takes control of your armor or Mimic steals your optic blasts, it would be reassuring to know that a financial institution had capital and established procedures to back you up.

Of course, there exists the question of who will pay the outrageously high premiums of items of such high value as Thor's hammer and Spider-Man's spider sense. These are items that, if placed in a Mastercard commercial, would likely fall under the category of "priceless." The cost could be partially underwritten by the government and the superhero him/herself. It's also possible that the hero could provide services of more traditional economic value (such as endorsing the company that insures them in advertising spots) in order to reimburse some of the company's investment.

Regardless, this method of insurance would center around the hero and not the environment that they interact with and could provide more focused insurance. But thoughts are welcome about how this system could work and whether it would even be feasible for any company to become involved with superhero insurance.

share on: del.icio.us digg reditt su

Superhero Decadence: The Headquarters

Another glaring example of how superheroes waste money lies in the old superhero tradition of the headquarters. Every hero needs a lair and every team needs a meeting place. From this sanctuary the hero (or group of heroes) can rest and prepare to deal with the next threat.

I take no issue with this concept. Even superheroes need a place to rest and collect all their crime-fighting equipment. And not every hero can make due with the spartan settings used by the likes of Spider-Man (who uses a cramped New York apartment) or Wolverine (who seems perfectly content falling asleep in alleyways). Sometimes fighting crime requires some space to store your stuff. But sometimes superheroes take things too far.

The Teen Titans have a tower shaped like a "T." That just seems wasteful and somewhat architecturally unsound.

S.H.I.E.L.D. operates out of several flying aircraft carriers. I understand their need to be portable and react to emergency situations around the world, but do there also need to be offices and prisons inside of the floating fortress?

The X-Mansion is filled with high tech gadgets and expensive alien technology which is constantly being replaced after being blown up by Sentinels and evil mutants from the dawn of time.

DC's Justice League takes things to a new height of absurdity by having placed their headquarters on the moon. Thats right, the goddamn MOON! This hardly seems like the most effective base of operations for fighting crime unless your sole concern is preventing astronauts from stabbing other astronauts. Rather than taking whatever funds and supplies they have amassed to feed the hungry and house the homeless, the Justice League felt that the most efficient use of their resources would be to create a multi-leveled base of operations on a planetoid other than the one where they actually fight crime. Not only did they build this structure, they also took the time and money to bling it up with a trophy room and nifty teleporters so they can get to the actual planet they police. The money used to provide pressurization and air to the hall of justice alone would likely be able to feed and house a large portion of the homeless in New York City.


And you may argue that the Justice League needs to have a headquarters away from Earth in order to protect themselves. Well, that doesn't exactly work.

In my short duration as a Justice League reader, the JLA watchtower on the moon was blown up twice and attacked directly another time. In fact, the watchtower was even leveled at the beginning of Infinite Crisis. Well done, Justice League. I'm sure investing all that money into what is now a smoking pile of rubble on the moon was a worthy investment. Much better than say, curing cancer.

Superman as an individual however, shows great restraint in his headquarters. Though the "Fortress of Solitude" is a fairly pompous name, Superman was able to build a hero's home that is economical and useful. Built cheaply and easily out of Kryptonian crystal technology, the Fortress of Solitude houses species from Earth and different planets as well as advanced technology Superman uses in his never-ending battle against the forces of evil. Hell, I would bet that the Fortress of Solidtude could even be classified as green. Well done, Man of Steel, well done.

share on: del.icio.us digg reditt su

Can J. Jonah Jameson Stop Spider-Man Using Economics?

Poor J. Jonah Jameson. For so long he's held such a passionate grudge against Spider-Man's vigilantism and has employed every means in his power as editor of The Daily Bugle to slander and whittle Spidey's popularity away from the public's eye. It's worked with mix results. But now, Jameson has just landed a position of power as the mayor of New York City. And that means things are going to be different. He has the political and budgetary power to take out Spider-Man through a variety of new methods. He's going to make life really rough on our web-crawler.

Except things are sort of the same.

You see, Jameson's first order of business was to use government funds to secure a special operative task force with the sole purpose of hunting Spider-Man 'round the clock. Aside from Spidey's quip about spending all this money in such a financial climate (Ecocomics Recession Watch!), there is a larger problem: it's not working the way Jameson had intended. His master plan is to either catch Spider-Man or force him into hiding, which would ensure him victory over New York and earn him respect for being a "no-nonsense, law-and-order, zero-tolerance arachnid" politician.

The problem with this plan is twofold. First of all, governments are generally lousy at catching superheroes. Many times in the comic book world have such task forces and organizations been created and it seems like they consistently get nothing done, while draining the economy's resources for high-tech surveillance gadgets. But the more interesting problem is that Jameson's actions are actually having a strange, adverse effect: rather than forcing Spidey into hiding, he actually decided to don the suit and fight crime 24/7, foregoing his Peter Parker persona. Jameson has actually increased Spider-Man's popularity.

I think that if Jameson really wants to beat Spider-Man, it's about time that he uses his newfound power and influence in a more creative way: economics.

Despite the fact that Spider-Man battles with an array of supervillains, most of his duties involve taking out regular crimes -- robberies, street thugs, gang violence, etc. This is what he is seen doing during Mark Waid's "24/7" story arc. And this sort of crime is currently running rampant in New York (at least in the Marvel Universe). But other things running rampant as well: poverty, uninsurance rates, health care and education costs, etc. These are factors that are known to contribute reductions in crime. A strong economy, for instance, is shown to have reduced the incidence of nonviolent crime (the kind with financial incentives--burglary, robbery, etc.). This paper from the Quarterly Journal of Economics shows that providing families with opportunities to move to lower-poverty neighborhoods significantly reduces juvenile violent crime. This article from The Washington Post describes investment in social programs' effect on reduction of gang violence.

Admittedly, a strong economy does not explain the whole story and there is plenty of evidence to suggest other factors in crime reduction (see Freakonomics, which argues that the legalization of Roe v. Wade in the 70s has played a large role in the reduction of crime rates in the 90s). Yet, Jameson should consider taking the money that he is spending on police forces, especially this anti-Spidey-squad, and funneling it towards anti-poverty measures, health care, education, job training, etc. This way, he accomplishes two things. First, he actually has a chance of achieving the reduction in crime that he preached in his campaign. This would win him the favor of the public. Second, he slowly but surely diminishes the need for Spider-Man, correcting the 24/7 plot that he accidently instigated and reducing Spidey's influence on the city. In this way, Jameson could demonstrate his considerable prowess and show to the people of New York that he is more effective than Spider-Man. Oh yeah, and it could also help reduce poverty, insure more people and help with education. Those things are nice too.

Economics: it might take a while and it might backfire, but it is certainly an idea that Jameson should try out if he's serious about finally nabbing that pesky arachnid.

share on: del.icio.us digg reditt su

Ecocomics is Now on Twitter!

Follow Ecocomics!

share on: del.icio.us digg reditt su

Supernatural Disaster Insurance 2: Insurance Harder

Cover from Superman #677 by James Robinson and Renato Guedes. Cover by Alex Ross.

Thank you all for your wonderful comments on the earlier Supernatural Disaster Insurance post. As promised, here is the sequel, equipped with some of my views on the matter.

There were three systems I had proposed in the first post: a full public system, a public/private mix, and a solely market-based system.

The merits of the market-based system are that it would allow individuals to choose the insurance system that they feel is most appropriate for their situation. It would also minimize public taxes and curb any potential moral hazard problems. The problem here is that, first of all, it is likely that the low-income individuals would be boxed out of the system. With the frequency with which supernatural disasters occur in the comic book world, premiums would likely be very expensive -- especially in Metropolis, New York, etc. It is also generally regarded that the income disparities in cosmopolitan cities in the comic world world are considerable and only widening by the month. The poor in Gotham can barely afford food (one of the factors which contributes to the significant crime rate in the city). Hardly would they be able to afford insurance on their homes. And that means that if Two-Face blows it up, time to get a new home!

The other issue is that I think there are potential adverse selection problems. A commenter, Ajay, pointed out that this is unlikely to occur with the higher-income people since they tend to have more property and assets and hence more expected loss (and more reason to insure against those losses). This is a great point. But consider other factors. What about region? In a voluntary system, it is likely that individuals living in particularly dangerous neighborhoods will purchase insurance, especially if premiums are not underwritten. People living in neighborhoods that don't see many pumpkin bombs or batarangs on the other hand will likely opt out. And those populations are not insignificant. Superhero violence, though having the potential to occur at any given neighborhood, does tend to be localized. How many times has the Daily planet been destroyed? How many times has Spiderman fought around Times Square? Let's face it -- certain neighborhoods are like tractor beams for superviolence. Hence, those choosing to opt out of the insurance system, feeling they are generally safe from harm's way, will cause average premiums to skyrocket, will impose an extra cost burden on those that need insurance the most and will further shrink the market.

A public/private system is an interesting solution because it will enroll more of society's low-income populations. Considering a "catastrophic" mechanism, the lower-income populations would be able to insure against major damages to their their property. So if I were living in New York, I would feel safe knowing that my home is protected against any potential throwdowns between the Green Goblin and Spiderman. If, however, I live in a neighborhood where lots of cars get blown up by pumpkin bombs, I might consider some supplementary insurance for the cheaper stuff. Again, though, unless there is a mandate, I think you would likely see similar adverse selection problems.

I think the solution that makes most sense is for the government to cover all costs imposed by supernatural disasters. The public would pay higher taxes, which would go towards a fund to cover these sorts of damages. You might argue that this could engender a moral hazard problem, as pointed out by commenter, Carl. I doubt this would be a huge problem. I don't see what kind of insurance fraud anyone is willing to commit that would pit them against the Joker. There are potential lives at stake with supernatural disasters. I don't think that the people of Metropolis would start flocking towards highly concentrated super-active areas simply because they know the government will pay for their toaster.

I tend to view this government spending as not all that dissimilar from national defense and security spending. For the most part, superheroes are government-approved (with exception of vigilantes like Batman). Consider the case of Superman. The Metropolis government, law enforcement agencies, and public have no problem allowing him to take residence in the city in exchange for their protection. It is a contract between him, the public and the government: Superman has free reign to conduct his business against evil-doers, while the police turn their heads barring any significant indiscretions. In exchange, the city is protected under the Man of Steel's umbrella. The cost of this security is the cost that the public pays towards repairing the negative externalities (destruction).

Now if only we had some way of curbing the destruction caused by Superheroes. Perhaps we do.

share on: del.icio.us digg reditt su