We have met the 1%, and he is us

Guest Post by Willis Eschenbach

In explanation of my title, I fear I’ll have to go on a bit of a digression. Let me tell three stories, about people in three different parts of our amazing planet.

STORY THE FIRST: In my early thirties, about forty years ago now, through a series of misunderstandings and coincidences I spent some time as the first mate on a sailboat in the Philippines. At one point we spent a couple months anchored up offshore from the Manila Yacht Club while we were getting some boat repairs done. As befits a young man with more testosterone than sagacity, I spent the evenings in the dives and nightclubs in the local red-light district. Not paying for the favors of the ladies of the evening, you understand, that always seemed creepy to me. Just drinking and having a good time. One of the bars had a piano. It also had what they euphemistically called “hostesses”, who I was told could be very welcoming and most hospitable in one of the upstairs rooms for a small donation to a good cause …

It became my habit that each evening after work, I would go ashore. I’d walk the six blocks or so over to the bar and play the piano for a few hours, and talk to the “hostesses” and the bartender, and watch the evening go by. After a while, I was just another fixture in the bar, I was the piano man. People coming in thought I was just part of the floor show, and I was. The management liked having me play, so they paid me … in free drinks and bar food, which was more than welcome.

And being the piano man in a “hospitality house”, isn’t that every musician’s dream of heaven?

In any case, I got to be friends with the bartenders, and with the “hostesses”, and they would tell me their stories. One of the women working there was a “hostess” named Helena. She and I got to be good friends. We were never lovers, although I wouldn’t have minded one bit. We just hung out together and had a good time in the bar, singing songs, telling stories. Sometimes on the weekends we would meet and wander around the city and she would explain to me the local customs, tell me what was going on. She taught me just enough Tagalog to get in trouble. It was great.

Figure 1. Slums in Manila

During this time, Helena kept telling me that I was rich. I always laughed and said no, no, in America I was a very poor man. And that was true—I was an itinerant sailor and fisherman and a boat bum. She just laughed back at me. But she never asked me for anything, not for one penny, not for one gift. Well, that’s not quite true. She asked me for cigarettes for her father. So I kept her old man in smokes. I figured it was the least I could do. She had her pride.

One other thing she wouldn’t do. I kept asking her to invite me over to the place where she lived. But she always refused. I wouldn’t like it, she said with her impish crooked smile. So one afternoon I decided I’d just go over there on my own. I got her address from one of the bartenders. He advised me against visiting there, saying it was in a bad section of town. I said okay. I was young. I was foolish. What did I know?

When I told the taxi driver where I was going, he turned around in his seat and looked at me. “Are you sure you want to go there”, he asked? “Yeah I’m sure”, I said with more certainty than I felt. “OK”, he said, “but you gotta pay me the money now, I’m not waiting around once we get there” … I gave him the money and off we went.

Helena’s place turned out to be located in a shantytown covering an entire city block. The buildings had been demolished at some point in the past and then abandoned. An entire community had sprung up there over the years. As soon as I got out of the taxi, the driver sped away. I turned around and was confronted by the most astounding warren of structures that I had ever seen.

Every possible building material was on display. Concrete blocks, short sticks of wood, old highway signs, flattened out tin cans, cardboard of every color and description, car doors and windows, random bits of glass, hunks of corrugated iron, shipping pallets, foam from appliance boxes. And this potpourri of materials was all strapped and held and cajoled into staying together by a motley assortment of rusty nails, bits of wire, rubber straps, pieces of leather, sections of vine, lengths of duct tape, strips of cloth, the variety of fasteners was endless. There were buildings on top of buildings added onto buildings built underneath buildings.

I asked the first person I came to where Helena lived. He gave me a series of instructions that, as near as I could understand, included obscure directives like “go over that direction except stay this side” and “don’t go under the third walkway, go where the man is selling balut” and “be careful to avoid the other opening”. All of these directions were delivered in what to a casual passerby would have passed for English, but on closer examination appeared to have been assembled from random phrases culled from instruction manuals.

I thanked the man and wandered off in the general direction he had indicated. I stopped at intervals to get new sets of partially intelligible instructions from random strangers. These led me through and over and into more of the 3-D maze. The way to her house went by means of a bizarre collection of passageways that were neither streets nor alleys. I could not tell public from private areas. Eyes looked out of every opening. I knew that I could not find my way back out without a guide. The passageway wandered over and around structures, at points seemingly going through people’s back yards with life in full swing. At other points, the way passed along a ditch running foul sewage, complete with a strange assortment of floating objects that did not bear close inspection. After accidentally looking at one particular piece of flotsam, I repented and quickly switched to carefully looking at the other side of the path, and I eschewed further reckless eyeballing until I left that ditch far behind.

Now, people mistake the Philippines for a nation. In reality, it is much more like a really big family with a bunch of kinda strange relatives. Not bad, just strange. And of course, on this city block of houses-in-wonderland, everybody knew everybody. The nature of communications in the area was such that by the time that the kindness of strangers had brought me to where Helena lived, she had heard the news already and had gotten spruced up and was prepared to meet me at the door. She invited me into what she explained was her aunt’s house. She had a room in the back. She offered to show it to me.

We stepped inside her room. Of course, we could not close the door, that was not proper … nor all that practical given the miniature size of the room. But it wouldn’t have made much difference, there was no privacy. You could hear everything everywhere, the walls were paper-thin. And I suppose that shouldn’t have been surprising, because one wall was actually made of paper, but I was surprised by that detail nonetheless. I noted in passing that the paper wall was made up of pasted together advertising posters for Hindi Bollywood movies, lending a pleasant, almost carnival atmosphere to the place.

Her room was tiny. A small sleeping pallet took up almost all of the available floor space. Inside the room were all of Helena’s worldly belongings. They consisted of a small wooden box which contained a few dresses and blouses and undergarments, and another smaller wooden box which contained a few items of makeup, a mirror, and some little trinkets and costume jewelry that obviously were precious to her. Other than that, there was one pair of shoes, and a cross and a picture of Jesus on the wall. Oh, there was the cloth pallet on which she slept, but that scrap of sewn-together rags likely belonged to her auntie. And that was the sum total of her possessions, all contained in a minuscule room with one wall made of paper …

That was it … that was all that she owned. A few dresses and a picture of Jesus. Now I understood why she thought I was rich. Because by her terms, I most assuredly was rich. I was incredibly wealthy in her world.

I talked with her a while there in the house, and with her aunt. Her uncle was out working. Her aunt had a small sewing business in her house. Life was not bad, life was not good, life was just life. Helena didn’t like her work, but that was the only job she could find, she had no education and no skills. And it paid the bills. Helena translated, her aunt spoke only Tagalog. We laughed some. They had a roof over their heads, albeit one of flattened tin cans laid as shingles. They had each other. We watched the almost-liquid warmth of the Manila gloaming slowly pouring over the city, and we soaked in the last rays of the day.

After while, Helena showed me how to get back to the street, and found me a taxi. I wouldn’t have been able to find the street without her, and no taxi would have stopped for me there at dusk, but they knew Helena. She left me there, she had to go back and get changed and get to work. I said I was going back to the ship, I’d see her later that evening, play some piano.

In the taxi, on my way back to the ship, I reflected on how incredibly wealthy I actually was. I finally realized, with some embarrassment, why she had laughed so heartily when I was so foolish and naive as to claim that I was poor. The only remaining mystery to me was how her laughter at my blindness had been so free of even the slightest hint of reproach for my colossal bumbling ignorance.

STORY THE SECOND: Fast forward five years. I’m working in sub-Saharan Africa, in Senegal. My workmate and I are in some godforsaken village out near the Kaolack salt flats. A 3-D relief map of the turf would look like a flat sheet of paper—it’s the land god stepped on. We get invited to dinner by some farmer, and by custom, we cannot refuse. He lives in the proverbial mud hut, with his wife, a scad of kids, a wooden planting stick, a wooden mortar and pestle for grinding grain, a three-rock firepit out back for cooking, a leaky roof, and not much else.

Having grown up on a ranch, I automatically note when we get there that he has two scrawny chickens wandering the yard. When we go into the house, he confers for a moment with his wife. She disappears. I hear squawking. I realize the man now has one scrawny chicken wandering the yard. The farmer and my associate and I drink sickly sweet tea and talk about the doings in the area. After a while, his wife brings in the chicken cooked up all nice, and offers it to us, the honored guests. The kids watch from the corners of the room.

But I can’t eat that damned bird. I can’t do it. I can’t bear the eyes of the kids. Don’t misunderstand me. It’s not like they are watching me with reproach in their eyes or anything, that wasn’t the problem at all. The thing I can’t bear is that the kids can’t take their eyes off of the chicken. Their eyes caress it. As the poet said, they watch that bird “as one who hath been stunned and is of sense forlorn”. They are blind to everything else. I can’t take it.

Plus I am shamed by the easy generosity of the man and his wife. They have nothing, and yet he offers us half of what they have without missing a beat. I am reminded of Rabelais’ will: “I have nothing, I owe a great deal, and the rest I leave to the poor”. The farmer’s wife has cooked and served the chicken, both of them temporarily appropriating the easy air of people who have hundreds of chickens, people who have chicken for dinner every night. My heart hangs, suspended. I hear the lone remaining chicken complaining outside.

So I trot out my old threadbare excuse from Mexico, and I blame my much-maligned liver. In Mexico, they blame their liver for everything. I have found it’s quite a useful excuse—over the years my liver has cheerfully soaked up the blame for a host of my idiosyncrasies. So I take one small bite for form’s sake, and then (in French, it being Senegal) I compliment the woman and the man on the chicken. I tell them the doctor has said that chicken is bad for my liver,  le médecin has said that le poulet is downright mauvais for my greatly-abused old foie, so as much as I liked the delicious flavor, and as much as I was deeply grateful for the honor they were offering me, I say I’m terribly sorry but I can’t possibly eat any more, they’ll just have to finish it off for me. And I tuck into the rest of the meal, the part that my liver doesn’t mind, to prove my bonafides.

They make the appropriate noises of disappointment that I’m not eating, and they have the grace not to look overjoyed. The children’s eyes are full of expectation. They look at that poor scrawny little representative of the great avian nation with unconcealed longing. The wife takes the plate into the back. In contrast to their earlier raucous play, the children vanish soundlessly on bare feet along with her. It seems that none of them dare to make a sound in case the mirage all disappears, like Cinderella after midnight. Not the time to get mom mad …

I avert my eyes from the disappearing chicken and the children. I look at the man and my workmate. We lapse into small-talk with no reference at all to poultry, or to children, chatting light-heartedly as though nothing meaningful had just occurred.

Thinking on it now, I consider how many times I’ve bought some random chicken in the supermarket on a whim, and how little it represents to me. I could buy fifty chickens if I chose, five hundred if need be. And I think about what that one scrawny chicken meant to that family.

STORY THE THIRD: Fast forward another five years, to when I lived on an atoll in the Solomon Islands, a remote bunch of tropical islands in the South Pacific north of Australia. Because I ran a shipyard, I met lots of yachties who were on boats sailing through the Solomons. Often they would complain to me about the high prices being asked by the islanders for their beautiful wood carvings. After the first few complaints, I developed the following analogy which I used over and over.

I told the yachties, imagine that one day an alien spaceship lands in your front yard. It is made out of solid gold, and it is encrusted with rubies, diamonds, sapphires, and emeralds. The alien steps out of the spaceship. He is dressed in cloth picked out in gold and silver threads, and his shoes have platinum buckles and diamonds everywhere, including on the soles … he comes up to you, and through his universal vocoder he says, “I say, old fellow, I rather fancy that old pickup truck of yours. How much money would it take to convince you to part with it?”. 

Now, you know the old truck is worth maybe a hundred dollars, and that’s on a good day with a following wind. And no one can predict the future, but you are kinda sure that this opportunity will never come again … which means the real question is, would you tell the diamond-studded alien “Oh, I could be persuaded to let it go for a million dollars, it’s kinda precious to me”, or would you only say “a hundred thousand dollars”?

Seriously, I’d tell the yachties, you get a one-time chance like that, you have to take your shot. You have to ask for the moon. Might not get it, but why not ask?

Next, consider the average Solomon Islander, I would tell the yachties. The average guy in some outer island village might only see a hundred Solomon dollars in cash all year, that’s thirty bucks US. I said to the yachtie, your watch is worth thirty dollars US. Your yachting shorts set you back forty-five, the cool sunglasses were seventy-five dollars, the Izod polo shirt was fifty-five, the belt was thirty bucks. Your stylish yachting cap was sixty bucks. The nice Sperry Topsider boat shoes were seventy-five dollars. Not counting your socks or your skivvies or your jewelry,  just what you are wearing alone is worth about what cash the average outer islander might make in ten or twelve years. It’s worth a decade of his labor, and that’s merely what you are wearing as you pass through his world.  That doesn’t count the cash in your pocket, or the credit cards in your pocket. It doesn’t count the value of the rest of your wardrobe. And we haven’t even gotten to the money you might have in the bank or your other assets …

So yes, when you sail up to the village in a yacht and ask how much something costs, they will ask a hundred dollars Solomon, or three hundred dollars, who knows? Because to them, you’re an alien wearing gold cloth, with diamonds on the soles of your shoes. They’d be mad not to ask top dollar for their carvings.

And I told the yachties, you know what? Given both that huge disparity in net worth between you and the woodcarver, and the world-class quality of the woodcarving in the Solomons, you’d be mad not to pay top dollar for whatever carvings catch your fancy.

============ END OF THE THREE STORIES =============

Now, I have told these three tales in order to provide a context for a couple of quotes. The context that I am providing is that there is an almost inconceivable distance from the top of the heap to the bottom of the heap. The top of the heap is the 1%, not of the US, but of the global population. That 1% is made up of the people like you and me and the folks who read this, folks who live in the western world, the top few percent of the global population who enjoy the full benefits of development, the winners on the planet. It’s a long, long way from where we stand down to the bottom of the heap, that dark and somewhat mysterious place we don’t like to think about where far too many of the planet’s people eke out a living on a dollar or three a day, and we wonder how on earth they can do so. To them, we are as unknown and distant as aliens in golden jeweled spaceships with diamonds on the soles of our shoes. I offer the stories to give you some idea of the constraints on those people’s lives, and the contrasts between their lives and ours.

Those people have no slack. They have no extra room in their budgets. They have no ability to absorb increases in their cost of living, particularly their energy spending. They have no credit cards, no credit, and almost no assets. They have no health insurance. They are not prepared for emergencies. They have no money in the bank. They have no reserve, no cushion, no extra clothing, no stored food in the basement, no basement for that matter, no fat around their waist, no backups, no extras of any description. They are not ready for a hike in the price of energy or anything else. They have damn well nothing—a wooden digging stick, a spare dress, a picture of Jesus, a paper wall, a scrawny chicken, a bowl of millet.

It is in that context, the context that acknowledges that about half the world, three billion people, live on less than three dollars a day (2005 PPP),  that I bring up the following two quotes:

 “Somehow we have to figure out how to boost the [US] price of gasoline to the levels in Europe”

and

“Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.”

Here’s my problem with these brilliant plans. Regardless of whatever hypothetical possible future benefit they might or might not bring in fifty years, right here and now in the present they are absolutely devastating to the poor.

The US Secretary of Energy Stephen Chu, the author of the first quote, wouldn’t have his commute to work imperiled if US gasoline prices were to rise to $8/gallon and thus reach the levels in Europe. He can buy all the gasoline he wants for any purpose. But if you are a poor single mom with a couple of kids and a clapped-out car that gets you to work and back and drinks gasoline faster than your good-for-nothing ex-husband drank whiskey before he left, for you a doubling of the gas prices means the kids eat less or something else goes by the board, because you have to get to work. It’s not optional.

And if the cost of electricity for the US and the White House “skyrockets”, Obama won’t be sleeping cold in the winter. Nor will I, for that matter. That would be the poor renter in upstate New York who can’t afford to turn on the electric heater.

The difference between rich and poor, between developed and developing, is the availability of inexpensive energy. A kilowatt-hour of electricity is the same amount of energy as a hard day’s labor by an adult. We can buy that for fifteen cents. We’re rich because we have (or at least had) access to the hardworking servants of inexpensive energy. We have inexpensive electrical and mechanical slaves to do our work for us.

This is particularly important for the poor. The poorer you are, the larger a percentage of your budget goes to energy-intensive things like transportation and heat and electricity. If you double the price of energy, everyone is poorer, but the poor take it the hardest. Causing an increase in energy prices for any reason is the most regressive tax imaginable. At the bottom of the pile people make a buck a day and pay fifty cents a kilowatt-hour for electricity … there’s no give down there at the bottom of the heap, no room for doubling the price of gasoline to European levels, no space for electric prices to skyrocket.

So I find it both reprehensible and incomprehensible when those of us who actually are in the 1% of the global 1%, like President Obama and Secretary Chu, blithely talk of doubling the price of gasoline and sending the cost of electricity skyrocketing as though there were no negative results from that; as though it wouldn’t cause widespread suffering; as though cheap energy weren’t the best friend of the poor.

What Chu and Obama propose are crazy plans. They are ivory-tower fantasies of people who are totally out of touch with the realities faced by the poor of the world, whether inside the US or out. Now please, I’m not making this political. There are people on both sides of the aisle who have signed on to the crazy idea that we should raise energy prices.

When I was a kid, everyone was quite clear that inexpensive energy was the key to a fairly boundless future. Our schoolbooks told of the Tennessee Valley project, and how it lit up the whole region, to everyone’s benefit. In particular, electricity was seen, and rightly so, as the savior of the rural poor. How did we lose that? Just how and when did deliberately making energy more and more expensive become a good thing?

I don’t buy that line of talk, not for one minute. Expensive energy is not a good thing for anyone, wealthy or poor. And in particular, more expensive energy condemns the poor to lives of increased misery and privation.

As far as I know, other than the completely overblown “peak oil” fears, about the only argument raised against the manifold benefits of inexpensive energy is the claim that increasing CO2 will lead to some fancied future Thermageddon™ fifty years from now. I have seen no actual evidence that such might be the case, just shonky computer model results. And even if CO2 were to lead to a temperature rise, we have no evidence that it will be harmful overall. According to the Berkeley Earth data, we’ve seen a 2°C land temperature rise in the last two centuries with absolutely no major temperature-related ill effects that I am aware of, and in fact, generally beneficial outcomes. Longer growing seasons. More ice-free days in the northern ports. I don’t see any catastrophes in that historical warming. Despite the historical warming, there is no sign of any historical increase in weather extremes of any kind. Given two degrees C of historical warming with no increase in extreme events or catastrophes, why should I expect such an increase in some hypothetical future warming?

So I’m sorry, but I am totally unwilling to trade inexpensive energy today, which is the real actual salvation of the poor today, for some imagined possible slight reduction in the temperature fifty years from now. That is one of the worst trades that I can imagine, exchanging current suffering for a promise of a slight reduction in temperatures in the year 2050.

Finally, for those who think that these quotes and ideas of Chu and Obama only affect the US, nothing could be further from the truth. Sadly, the policies are being exported and imposed, both by force and by persuasion, on the poorer countries of the world. To take just one example, pressure on the World Bank from the western countries and NGOs is denying financing to coal-fired plants in countries like India with coal resources. So the poor of India are denied inexpensive coal-fired electricity, they end up paying the price for the western one-percenters’ guilt and fear ridden fantasies about what might happen fifty years in the misty future.

Heck, even if the dreaded carbon menace were real, raising the price on fossil fuels would be the last way on earth I’d choose to fight it. Like I said … big current pain for small future maybes, that’s a lousy trade. Now, I don’t think CO2 is worth fighting. But if you do, I implore you, first do no harm—any rise in energy prices harms the poor. If you want to fight CO2, there are other ways.

w.

[UPDATE: a reader has pointed out that I am not describing the poorest of the poor, and he is quite correct. Helena had her job. The African farmer had a house and land, and not to mention originally two, but lately only one, chicken. The people in the Solomons had their bush gardens and the bountiful ocean.

The poorest of the poor have none of these things. They are a whole level below the people I talk about. You don’t want to consider where they sleep or what they eat. And yes, they are hit by rising energy prices like everyone else. -w.]