Wednesday, November 23, 2011

The Undercounted Economic Benefits of Low Diversity and Trust

My wife and little ones are big fans of going to the beach, even though beaches in Oregon and Northern California aren't about swimming.  On the way to many of our favorite spots though, we pass through lots of extremely white small towns on the coast.  One thing that jumps out is the very high levels of trust that persist there (the second being the celebrity treatment my two little tiny redheads get from the many grandparents that inhabit such places).  Here is an example---it strikes me as profoundly alien every single time I pass it because of all the things it implies.
In the middle of a very small parking lot---really more of a spot where one could pull off the coastal highway than a parking lot honestly---there are stacks of bundles of firewood, and a sign advertising them for sale for the customary $5 or so.  Next to the sign is a bucket where you can put your payment.  That's it.  No watchman or clerk, no cameras...Nothing.  But it's been here for years now, so apparently the guy who cuts the wood must not get ripped off often.  This speaks to positively alien levels of trust by the standards of the societies that I've been a part of.  I recall visiting relatives with my great-grandmother in Northern Idaho as a preteen and being similarly floored when I was told NOT to lock the front door and that the sofa in the foyer was to be kept made up in case some passer-by needed a place to crash during the night, and even more so when I confirmed with their neighbors that my relatives were NOT just weird, that this was a social norm.
From an economic standpoint, whoever runs this gets the $5 per bundle of wood that people (usually campers) expect to pay for cutting and stacking the wood, and the customers pay the going rate.  But all the usual middleman costs are totally absent.  Most of said middleman costs would be calculated in as part of what economists call GDP.  Something to think about when one hears that economists say that 'immigration is good for the economy'.  How can one take them seriously when they have not even a mechanism to measure how much the degradation of trust created by diversity costs?  You could probably even argue that increasing diversity creates an artificial economy of scale benefiting larger firms versus the guy---probably a retiree, who likely enjoys cutting wood.


Matthew Walker said...

The $5 honor system firewood is ubiquitous in rural Maine, too, even relatively near Portland. You also see produce, eggs, blueberries. This is even though in the summer, rural Maine is full of vacationing Massholes and other flatlanders.

But you can probably guess what kind of people come to vacation in rural Maine. Not a very vibrant crowd. We get the ones who want to escape that.

Aretae said...


Does that put you between Gold Beach and Yreka? I travel a lot, and enjoy our discussions. Might offer you a beverage on my way through next summer.

If you were closer to the bay...I'd likely offer you something sooner.

Jehu said...

I've travelled through that area with my family quite a few times---stayed at both of those towns in fact on our last California trip, but we live near Portland. Bandon is my wife's favorite actually, but we reserve that for multi-day trips since it is a long drive.

Hail said...

I assume that by economic benefits, you mean nominal benefits (higher apparent GDP), rather than true benefits.

Hail said...

In the minds of the people who gave us Homo-Economicus, higher levels of economic activity are always a good thing.

Jehu, the wood-selling method you describe above refutes that convincingly, if anecdotally.

Jehu said...

Yes, a 25 pound bag of rice purchased from Costco is a benefit to me. Their security force isn't, it is merely what Marx would call guard labor. But it's counted nevertheless in GDP. Societies with extremely high trust levels don't need to spend huge amounts of resources on things like 'loss prevention'.

Hail said...

Trust can also save humbling amounts of money and resources by cutting back on the (need for) suburbanism. Suburbs are expensive to maintain. They also create a lot of extra work: building, upkeep, and services.

I've heard Oregon has harsh laws limiting sprawl, which it can get away with with so few Nonwhites. In more-diverse areas, especially in the old "block-busting" days, limiting suburban growth would have been politically infeasible. Whites in many parts of the USA have needed, and have had, a place to which they can flee. And GDP growth rolled on (through 2008 anyway).

Jehu said...

Yes, also quite true, the breakdown of trust (plus desegregation) largely motivated the massive white flight to the suburbs, which can be viewed as the massive waste of productive resources. There was a good reason why the Sierra Club of old was strongly anti illegal immigration and somewhat anti legal immigration. You're quite correct about Oregon's laws limiting sprawl. Oregon has another thing going for it insofar as limiting diversity---6+ very grey months out of each year. All of the black engineers I work with (granted, that's like 2 of them, they're hardly plentiful in my field) are on prescription vitamin D, as well as quite of a few of the Indian engineers.

Hail said...

I notice that Census-2010 found Hispanics to be 11.7% of the state population, up from 8.0% in 2000, and up from 3.95% in 1990.

What's the nature of this increase? It can't be all transient agricultural workers. How localized is it? Is "White Oregon" on the way to becoming a myth? (Only 78.5% of Oregoners answered 'White non-Hispanic' to the race question in 2010). Pardon my ignorance, because I have never been within a thousand miles of the state.

Jehu said...

Hail, what you describe is a significant problem. No, it's not all transient workers, lots of it is in construction as well. Hopefully the downturn in housing and the economy in general will work against it.

Sardonic_sob said...

This is also quite common along the spectacular Hana Highway on Maui - people will put fruit and flowers out along the road at the end of their driveways, and there's just a box to put money in.

Maui is much more expensive, and considerably less package-toury, than Oahu (the most populous island and the only one with an actual city, Honolulu.) I would be interested to know if this practice is as common on Oahu or if the higher population and lower socio-economic class of the tourists on that island makes it less attractive.

Incidentally, I understand Kauai is even smaller and more rural, but driving the Hana Highway is one of life's grand possibilities. Highly recommended. Be sure to stop a while and watch the surfers (or do it yourself, if you're so inclined) off Pala Beach.

Jehu said...

My wife and I went to Oahu, Maui, and Kauai a few years back. Oahu has the things you really want to see once, like the Arizona memorial, the Polynesian Cultural center, and Diamond Head. Kauai is just plain gorgeous. Maui, on the other hand, is the most fun. We drove the road to Hana with its one lane bridges and had a blast bicycling down the big dormant volcano on Maui.