Today, Ali Velshi on MSNBC did a story about President Biden’s phasing out of private prisons. He used the phrase “perverse incentive” a number of times — the point being that it is in the private prison company’s interest to see the prison population grow because they make more money when that happens. And, of course, it is in society’s interest to see the prison population decline as long as the reasons are less crime, less recidivism and more rehabilitation. Perverse incentive was the key justification in Ali’s argument for prison de-privatization, and it was supposedly President Biden’s reason as well.
He was right but Ali made perverse incentive sound like a moral, societal and economic conflict of interest that exists only in that industry. So, I had to laugh at the exclusivity that he devoted to this argument. To the extent that capitalism is motivated by a win-lose philosophy whereby competition is to be overcome or eliminated, perverse incentives exist in every private business. They reduce human and planetary health instead of motivating us to improve them.
Isn't it in Big Pharma’s interest that we get, and remain, ill. If we’re all healthy, they go out of business. They have the biggest and best funded lobby in DC. They advertise more than any other industry does on TV. They create drugs for, and give names to, physical symptoms that really pose no health risks at all. e.g. curved penises and wiggly feet. And, their partner in perverse incentive crime is the insurance industry who has an incentive not to pay claims in order to increase profits.
Guess why the networks don't do specials on the perverse incentives of the pharmaceutical industry — because they’d lose them as advertisers. Thus, the networks have a perverse incentive that contradicts their mission to inform the public about perverse incentives. And we think that they're giving us all the news.
Five university hospitals now have psychedelic centers. Psychedelic use has already shown remarkable results in healing depression, anxiety, brain trauma, PTSD, and alcoholism (see 60 Minutes and Real Sports segments). They are non-addictive. And vets with PTSD are (unintentionally) turning into drug addicts with synthetic medications. Psychiatric meds are notoriously ineffective and most anti-anxiety meds are addictive.
Who will be opposed to the adoption of mushrooms for healing mental disorders if citizens can grow them at home? The street value of psilocybin is about $10/gram. It costs less than that to grow it. A psychedelic dose is 3.5 grams. When Johns Hopkins gives psilocybin to cancer patients, they spend $15,000/dose for a synthetic version made by Big Pharma.
Don’t beer and liquor companies want people to drink more? Don’t the cigarette companies want us to smoke more? These are legal businesses in which the economic incentive isn't perverse or unintended. It’s direct and in-your-face. “This is bad for you. Even the government says so and we have to warn you that it will do you harm in excess. But we want you to buy and use as much of it as you possibly can because we make more money when you do.”
And, there are so many industries with incentives to maintain the status quo by opposing new technologies that will help the environment but reduce their profits. Oil and gas opposed solar and electric vehicles — and still do. Utility companies hate distributed energy, though their ads say they support it. They don't want to become the world’s battery. They have too much money in sunk costs for non-renewable power generation.
Hemp is finally legal and a wonder crop but its legalization was opposed by the lumber, paper and cloth industries. George Washington, Benjamin Franklin and Thomas Jefferson grew hemp. Its praises were sung by the USDA during World War II (see Hemp for Victory video) and farmers were encouraged to grow as much as they could because, after Japan entered the war, the Navy couldn't get rope for its ships from Asia anymore.
Hemp is used in dairy cow feed in Sweden and dramatically increases cow health and milk production. Yet, in the U.S., even though any citizen can legally buy and eat products made from hemp, the FDA and USDA are concerned that hemp’s active ingredients, when fed as a small proportion of total feed to dairy cows, may end up in an even smaller proportion in the milk that humans drink and cause some adverse reaction that direct consumption of hemp products won't cause. Go figure! Obviously, anything that threatens ConAgra and other big ag businesses that do not yet control hemp growth and its inclusion in feed is going to take a very long time to be approved. And the justification, as with Big Pharma, is that all the study is required to protect human safety.
CBD from hemp is already getting a bad name for its ineffectiveness because there are no standards for its content other than govt. mandates that it contain no harmful chemicals and that THC has to remain below a certain limit. Beyond that, it can be grown dried and stored in ways that reduce CBD potency. There are no other active ingredient content standards and potency varies by more 50%. Thus due to competition, whatever makes CBD cheaper to sell is the standard now since anyone with a shovel, bucket, hose and seed can grow it.
The same is true of biochar, which is used in animal feed in Europe. It increases hoof and udder health and reduces mortality rates in livestock. But Big Pharma sells more antibiotics to farmers for livestock than they do to humans. They like sick cows. They don't want to see cows become healthier, especially if the farmer can create his or her own biochar by pyrolyzing manure. The EU has testing and certification standards for biochar. The U.S has none, which is affecting biochar’s rate of adoption, even in products where it’s legal.
So, how self-sufficient does big business really want us to be?
The White House Rural Council, with help from the USFS, proved that Cross-Laminated Timber (CLT) could be used for the structure of buildings above four stories in height (the limit beyond which fire codes had previously not permitted wood to be used) without any increased danger to human safety. Guess who's lobbying against CLT use — the steel and concrete industries. Wood sequesters as much carbon per cubic meter as steel and concrete manufacturing emit into the atmosphere. It’s a three ton swing per cubic meter used. And, there are 40 M acres of beetle killed trees in our national forests just waiting for lightning strikes. The USFS could certainly use a market like CLT for that wood.
And, these trees could also be turned into biochar, which can be used in a number of building materials (e.g. drywall, stucco, paint, asphalt, concrete, roof tiles) as well as in fertilizers. Al Gore has called biochar the product that could have the single greatest impact on reducing global warming via carbon sequestration. But, there are existing big industries whose sales would drop if biochar started to show up in products that perform better than their products do. Thus, they have a perverse incentive to prevent its adoption.
The FAO says that by 2035, the world will no longer have enough arable land, energy and water to support the food demands of the world’s population. The NRDC says that 40% of food grown in the U.S. never makes it to the table and ends up as waste. From calf birth to table, it takes 26,000 gallons of water to produce a pound of beef. Livestock emit more CO2 into the atmosphere than do all of the vehicles in the U.S.
Indoor growing produces 100 times greater yield per sq. ft. than does field growth. It generates food year round, uses 95% less water, creates double the shelf life and because it can be done in underutilized urban structures close to where people live and eat, it reduces carbon emissions from fossil fuel vehicles used to transport food the average 1,500 miles from where it’s grown to where it’s sold. Not hard to guess who doesn’t want Controlled Environment Agriculture (CEA) to happen, especially since, like solar, it’s already starting to be done more affordably at residential scale. God forbid that we should start to grow our own food again.
The bottom line is that big, centralized businesses with segmented, multi-profit delivery chains evolved in the industrial era and basically control how we live today. The shift back to self-control of basic necessities like food, shelter, energy and medicine has become necessary in order to reduce our impact on the planet because the status quo is very wasteful. Since we don't see that waste, most of us think we’re responsible just because we recycle. But, our responsibility is much greater because, with our purchases, we support the system that must change. Big, unavoidable, lifestyle adjustments are ahead for our grandchildren. They will be severe to the extent that they remain unanticipated and end up having to be forced upon us. Or, we could, by choice, slowly make those adjustments over time.
And, it’s the perverse economic incentives associated with the status quo that will create conditions that make these lifestyle changes mandatory and not optional. As always, the impact will be felt bottom up, from the poor, first to the richest, last. Unfortunately, its the richest that control our existing manufacturing, delivery and consumption practices. It takes five miles in the ocean for supertanker to make a ninety degree turn.
We support perverse economic incentives every day with our purchases. COVID is a terrible thing but a useful example for how much lifestyle changes can reduce GHG emissions. So, we have to voluntarily change the direction of big business with our purchasing habits and lifestyle choices. We must move from win-lose to win-win. Our survival and the planet’s survival depend upon it.