Why buy local?
I like my local Safeway grocery store a lot. (I can even get sardines at midnight.) But while I was enjoying my regular routine, appreciating the quality and variety of groceries, an annoying announcement came on over the sound system touting their “locally grown” produce section … more
Dumbing Down the World
Public education has been a slowly degenerating disaster throughout the West, and now it seems we’re exporting it to the rest.
At a United Nations meeting 15 years ago, the world’s governments agreed on the goal of enrolling every child on the planet in primary schooling by this year.
Indeed, they have nearly succeeded, with 2014’s reports indicating that 90 percent of children in developing regions now attend primary school. Presumably, the numbers for developed countries are above 95 percent.
But strangely, this lofty plan did not say anything about the quality of the schooling into which we have now driven more than 9 out of every 10 human children; the whole idea is to get children into government-approved classrooms, apparently regardless of what happens there.
The reports of UN agencies like Education for All (EFA) are full of ideas on how to get kids to go to school in developing countries: making education entirely taxpayer funded (commonly by taxpayers from richer countries), providing free medication or food to students who show up, or even just paying cash to the parents in return for kids’ attendance.
But are the pupils who spend more time at these schools actually learning more as a result? Has the goal of putting more kids into classrooms actually led to more kids getting a proper education? MIT’s Abdul Latif Jameel reports, “Several programs which have raised participation, from providing worm medicine to free meals, show no evidence that children are learning more as a result.”
And EFA’s Fast Track Initiative admits, “In nearly all developing countries the levels of learning achievement are shockingly low.… In many low-income countries students learn virtually nothing and end up functionally illiterate.”
In fact, the situation is so bad that Jameel says one area to be improved is “more regular attendance of teachers.”
A crucial fallacy
The international education agencies seem to have been duped by what Austro-libertarian Murray Rothbard calls “a crucial fallacy … confusion between formal schooling and education in general.”
Promising to educate every child in every culture through primary schooling is a bit like promising to clothe every child in every climate by giving them a parka.
In fact, until recently, nearly all children learned the important skills of life largely outside of schools, through observing and joining in with the activities of adults. Rothbard writes with respect to American education, “Education is a lifelong process of learning, and learning takes place not only in school, but in all areas of life. When the child plays, or listens to parents or friends, or reads a newspaper, or works at a job, he or she is becoming educated.”
All the medicine handouts and free school lunches EFA proposes are attempts to offset the direct economic opportunity cost of the child spending a day at school instead of working on the farm or in a factory. While these handouts do take into account the child’s economic contribution to the family’s labor, what about that labor’s educational contribution to the child? What about the educational opportunity cost?
If students in many schools are learning very little and graduating “functionally illiterate,” if attendance doesn’t actually produce real education, and if teachers sometimes don’t even bother to show up, perhaps the parents and children feel that they would learn more outside the schools than in.
The presence of this educational opportunity cost may help explain why, despite all the subsidies and bonuses meant to drive kids into classrooms, the 2014 report on this goal laments, “high dropout rates [of children] remain an impediment to universal primary education.”
The kids are going into school, they and their families are seeing the results, and they and their families are deciding they are better off elsewhere.
But sadly, this important educational opportunity cost doesn’t seem to be on the global pedagogical philanthropists’ radar. Jameel says only that “there is no consensus on why so many poor children don’t attend school, or the best way to increase participation. If children’s labor is crucial to their family’s welfare … it may prove very difficult to attract more children to school.”
There is no mention of any learning that might happen while the child is outside the classroom.
For the moment, let us grant this assumption: Only schooling is education. No learning happens outside of schools.
Under this assumption, not only do children’s minds profit nothing from a day spent at home or in the bush, but most of the parents of children in the developing world are themselves totally un-“educated” — benighted savages whose heads are filled with cobwebs.
Thus, for our benevolent pedagogical overlords, it could make sense to get those kids away from their parents and into schools as soon as possible, even if, as EFA acknowledges, “in some countries nearly every aspect of the schooling system is seriously deficient — infrastructure, teaching materials, teacher availability and qualifications, lack of student assessments and lack of incentives for improving learning outcomes.”
Furthermore, in many poorer countries, the office jobs (the only ones for which schooling is actually required) are nearly all government and international NGO jobs. That’s because these countries have not (or at least not yet) developed a strong market demand for literate and numerate workers. So those kids who do succeed in school end up moving to the capital and writing reports on the importance of international funding for schools.
The kids who do not do well in school go back home to the farms or the factories, having spent years of their lives learning, in some cases, “virtually nothing.” But since the bureaucrats seem to believe that the traditional cultures the children might have spent those years immersed in held no knowledge anyway, this result might not be seen as much of a loss.
Setting young minds free
No doubt, some kids who would profit from schooling are being kept out of it by very bad things: wars, forced prostitution, and outright poverty. EFA’s programs to make schooling more accessible could have a huge positive impact on these children’s lives.
But instead of focusing on gimmicks to get kids into the classes governments want to teach, educators should focus on materials that kids want to learn — or that their parents are willing to invest in.
James Tooley has reported on the existence of an entire underground economy of black- and gray-market private schools in the slums of India and Kenya. Since these schools either hide themselves from the local authorities (to avoid being shut down) or are hidden by the local authorities from the national and international authorities (to avoid embarrassing the public schools), it’s difficult to know how prevalent they are.
What is clear is that these dirt-cheap private schools are operating with a profit motive under serious competition. Students’ parents often have to choose whether to pay for a loaf of bread or a day in school. How good would your kid’s school have to be for you to pay for it under those circumstances?
Meanwhile, these schools’ profits are being siphoned off in bribes to the local inspectors.
We could unleash these not-quite-legal schools from their government shackles by breaking the chain between government and education. Ending the drive for compulsory, state-run, subsidized schooling would, in Rothbard’s words, “give children their head” and let them seek out “a genuine and truly free education, both in and out of formal schools.”
This article was originally published in the Freeman online, and is based on an older article written for Mises Daily. Many thanks to Max Borders and BK Marcus for the opportunity to publish in the Freeman, and to Dan Sanchez for the opportunity to publish in the Mises Daily during his tenure.
Buddhist Lobbyists Push for Legislation Targeting Muslims in Myanmar (UPDATED)
I’ll be straight with you: I hate arguments that try to pinpoint Islam and Muslims as more prone to violence or bigotry than other faiths. Aside from lacking any evidence whatsoever to support such a claim, they contribute to hostility and bad faith when this conversation – about religion and society – could easily be used to contribute to tolerance and a better understanding of why government sucks.
All religions are exactly the same when it comes down to it.
Politically and organizationally, lobbying efforts on behalf of religions are necessarily going to aim for shoving its particular beliefs down the throats of everybody else. This is why separation of church and state is so important (church and state, not church and society; I could care less how people organize themselves in the non-political arena).
So, for example, the censorship we have here in the United States, on television, is the direct result of Christian groups that were able to successfully lobby the government to stifle free speech (see this excellent essay in the Freeman by BK Marcus on how the television markets are now changing thanks to deregulation). Can’t buy beer in your county on Sunday or after 7:00 pm on weekdays? Thank your local Christian lobby (or, if you’re in parts of India, your local Hindu or Sikh lobby, or…).
The extremity of the lobbying groups depends not on religion per se, but on the institutions that a state has in place. Anybody who argues that the Middle East is a more violent place than sub-Saharan Africa – the other region of the world that largely adopted Leninist socialism after independence – is a charlatan or a fool. It is, unfortunately, not a well-known fact that heavily Muslim, predominately Arab states are anti-capitalist, and staunchly so. This anti-capitalistic mentality has led to poverty, of course, and isolation (“cultural stagnation”), but it has also had an adverse effect on these states’ political institutions. Instead of becoming more open, and more inclusive of various factions (“lobbying groups”), political institutions in the Muslim world have been built around the executive branch – the Strong Man – and as a result the more populist a lobby’s message is, the more it is likely to receive support from the Strong Man (the oil states in the Gulf are considered wealthy, but they are still anti-capitalistic).
In a world that is dominated by a secular hegemon that often supports bad people in the name of savvy geopolitics, the popularity of Muslim populism is not hard to fathom.
Meanwhile, in Myanmar, the Muslims being targeted by legislation are mostly illegal immigrants fleeing Bangladesh. The most prominent lobby pushing for the bill, the Association for the Protection of Race and Religion, is headed by a Buddhist monk (of the Theravada sect if I’m not mistaken).
In other news I still come across Americans, my own age, that support the Castro regime in Cuba (“because free health care and equality”). What kind of sick world do we live in?
EDIT: I had to edit this thing for clarity. Jesus donkey smears.
UPDATE (11/2/2014): Wait a second Brandon, did you just write that the Buddhist zealots are lobbying the state of Myanmar for legislation aimed at Muslims? How can this be? Myanmar is a known authoritarian state. Doesn’t the junta do what it wants, when it wants?
The short answer is “No, it can’t.” Authoritarian regimes are constrained by choices and popular opinion as well. One of the main differences between authoritarian and democratic states is the number of factions involved in the lobbying process. In democratic states, any faction can lobby the government for any reason it wishes to. Everybody has equal access (if not equal influence). This equal access (which, again, does not translate to equal influence) is, in part, what classical liberals and libertarians mean by political and legal equality. In authoritarian states the number of lobbying groups tends to be a lot smaller than in democratic states. I’ll let you figure out why this is.
It’s worth noting that calls to limit lobbying efforts by repealing Citizens United is, in its barest form, an authoritarian urge. For what is this repeal movement, if not an attempt to shut some factions up using the power of the state? The excuses always vary (in this case it’s “money”), but the pattern of authoritarianism through limiting choices remains the same.
The difference in understanding of equality between libertarians and conservatives/liberals strikes at the heart of American politics (I can’t speak for other places). Yet it also illustrates why libertarianism’s conception of equality is superior to that of the conservative/liberal. If there is a successful attempt at leveling out influence so that it’s equal in some measure (though conservatives/liberals are ambiguous on what they mean by ‘influence’, not to mention ‘equality’), then equal access has to be denied or else some factions would tip the balance of influence. Attempting to guarantee equality of influence would also lead to cronyism. Instead of lobbying the government for favors, factions would end up lobbying the committee that picks lobbying groups it deems worthy of lobbying for government favors!
On the other hand, if equal access is protected then everybody has a shot and no influence is guaranteed.
UPDATE (11/03/2014): The more I think about it, the more the Muslims-are-more-prone-to-violence canard sounds an awful lot like the Jews-secretly-run-the-world canard. People point to outbreaks of collective or individual violence perpetrated by Muslims or a Muslim and say to themselves “Well, this isn’t surprising, as their 7th century founder was a war chief.”
Disgusting. And, I suppose, Jews really are running the world because Judas stabbed poor ole Jesus in the back for 30 pieces of silver in the first century. The logic is exactly the same.
The Jews-secretly-run-the-world canard hides a nasty prejudice against Jews by creating a half-baked, pseudo-scientific rationale that can be used in public (this canard does not hide such a prejudice very well, at least to others; it may hide well from himself the intolerance and ignorance a person has in the form of rationalizing his prejudice). The Muslims-are-more-prone-to-violence canard is most often used by proponents of overseas military intervention in Muslim regions of the world.* Like the anti-Jewish voices, the anti-Muslim voices are not interested in Truth but in forcing their own deeply hostile beliefs down the throats of others. Hence the libertarian’s task of delicately balancing religious skepticism with the protection of religious believers from vulgar conspiracy theorists.
* There is a small cadre of religious skeptics and secularists who also use the “violence” thesis, though this faction, which includes myself, is more easily swayed by evidence.
Borderless Economics: Chinese Sea Turtles, Indian Fridges and the New Fruits of Global Capitalism
Robert Guest, the business editor for The Economist, has organized insights gleaned from 20 years of reporting on and analyzing events around the world into a breezy yet profound account of the flow of people and ideas across borders.
Raw immigration statistics miss the “networks of innovation,” as Guest calls them. Immigrants may find it difficult to adapt to a new land with strange customs and a new language. But in just about any American city they find a community of people like themselves who can ease the transition and help them get established. This process is good for everyone involved.
For example, Indian immigrants to America—most notably Silicon Valley engineers—are tightly networked among themselves and have contacts in India and around the world. Having made their fortunes, some then return to India to pursue business or philanthropic activities. To illustrate, Guest describes the Universal Identity program. Hundreds of millions in India have no public identity beyond their immediate communities. A team of Indian expatriates returned to India and launched a program to create a computer-based system that would allow Indians to submit to fingerprinting and retina scans and to receive a national ID number that would serve as their entrée into the modern Indian economy. Libertarians look askance at government identification numbers, but in rich countries we take for granted our ability to prove our identities. Continue reading
Free Banking Beats Central Banking
In “More Bits on Whether We Need a Fed,” a November 21 MarginalRevolution blogpost, George Mason University economics professor Tyler Cowen questions “why free banking would offer an advantage over post WWII central banking (combined with FDIC and paper money).” He adds, “That’s long been the weak spot of the anti-Fed case.”
Free banking is better than central banking because only in a free market can the optimal prices and quantities of goods be determined. Those goods include the money supply, and prices include the rate of interest.
There is no scientific way to know in advance the right price of goods. With ever-changing population, technology, and preferences, markets are turbulent, and there is no way to accurately predict fluctuating human desires and costs.
The quantity of money in the economy is no different from other goods. The optimal amount can only be discovered by the dynamics of supply and demand in a market. The impact of money on prices depends not just on the amount of money, but also on its velocity, that is, how fast the money turns over. The Fed cannot control the velocity since it cannot control the demand for money, that is, the amount people want to hold. Also, even if the Fed could determine the best amount of money for today, the impact on the economy takes several months to take effect, and so the central bankers would need to be able to accurately predict the state of the economy months into the future. Continue reading
FDR, Uncle Fred, and the NRPB
In Ayn Rand’s epic novel Atlas Shrugged, government officials regulate the economy through something called the Bureau of Economic Planning and Natural Resources. She clearly chose that name to reflect their belief that productive people were bound to produce just because of their “conditioning” and could therefore be treated pretty much like coal in the ground—as resources ripe for exploitation.
One wonders whether she had ever heard of the National Resources Planning Board (NRPB). The NRPB was a real agency, part of the kaleidoscope of bureaus that formed the New Deal. Its history is in some ways as dry as dust, but a closer look reveals some interesting and timeless insights into the planning mentality and the role of personalities in shaping history.
The philosophy underlying Roosevelt’s New Deal, if one can call it that, was to try something and if it didn’t work, try something else. In that same spirit the NRPB mission changed frequently; even its name changed four times before it was killed in 1943. It had been authorized as part of the National Industrial Recovery Act, but that program was ruled unconstitutional in 1935, leaving the National Planning Board, as it was called then, in danger of extinction. It was quickly rescued by FDR, however, and established as an independent agency. Casting about for a new name, one planner suggested “natural resources,” whereupon another commented that human beings were America’s most important resource. “National Resources” was suggested. The President chewed the phrase over a few times, then, pleased with its sound, grinned and announced, “That’s it. Get that down, boys, because that’s settled.” Continue reading
Unemployment: What’s To Be Done?
In Part 1 I outlined natural unemployment, government-caused unemployment, and the attempts to measure these. We saw how ambiguous and subjective some of the concepts of unemployment are and how the government, specifically the Federal Reserve, is charged with managing it. Now we turn to current conditions and what can be done about them.
There have been huge advances in technology and substantial declines in trade barriers in recent years. While these developments have raised living standards they have been hard on people whose skills were rendered obsolete or uncompetitive. When changes evolve gradually, as when so many people left farming in the last century, the disruption is not so great. Changes are now coming faster and are extending to some high-paid professional jobs. Automated systems can now handle at least the routine aspects of some legal research and medical diagnosis.
Time and time again new doors have opened to workers as old doors closed. Machines replace workers, but they raise productivity and produce new employment opportunities. We can expect this pattern to continue for a long time to come. Still, it is within the realm of possibility that robots and computers could take over so much work that the demand for human workers would shrink drastically. But those very machines would mean higher productivity and thus higher living standards.
A great deal of work can be now be done remotely, providing an advantage to areas with low living costs. Substantial outsourcing of such jobs to foreign countries has occurred (though that trend may be reversing as low-cost areas of the United States become competitive and as customer dissatisfaction and problems with managing offshore workers come up). The benefits of outsourcing and other productivity enhancements are spread across all consumers, but the job losses are concentrated among small and sometimes vocal minorities. Continue reading
Government and Governance
Policy debates typically center around the role of markets versus the role of governments. But this is a misleading distinction. Human society always has governance. Private organizations such as corporations and clubs have management, rules, and financial administration similar in function to those of government. The difference is that private governance is voluntary, while state-based government is coercively imposed on the people within some jurisdiction. So a central question is not whether the market or the government can best accomplish some task, but whether the governance shall be voluntary or coercive.
The Market-Failure Doctrine
Most economists would agree that we don’t live in the best of all possible worlds. But the doctrine of market failure found in most economics textbooks fails to distinguish between consensual and coercive governance as correctives. The prevailing theory asserts that while markets might provide private goods efficiently in a competitive economy, markets fail to provide the collective goods that people want. There are two basic reasons offered as to why markets are not sufficient. Markets can easily determine the demand for private goods, but how can we tell how much each individual wants of a collective good? We could ask people how much they are willing to pay, but how do we get a truthful answer? Free riders also are a problem. Once the collective good is provided, folks can use it whether they pay or not, so why pay?
So, the market-failure story goes, markets fail to deliver collective goods. Entrepreneurs lack incentive because they can’t get their customers to pay for the service the way they can get people to pay for individually consumed private goods. Continue reading
The Volcker Rule
Paul Volcker is a man of considerable stature, and not just because he’s six feet, seven inches tall. He gained a reputation for courage and plain talk as chairman of the Federal Reserve System under Presidents Carter and Reagan because he broke the back of the 1970s inflation. He did so by (mostly) sticking to a tight monetary policy even though that meant sky-high interest rates and sharp back-to-back recessions before the economy could enter its vigorous recovery. Now 84, he has enjoyed a comeback in recent years as an adviser to President Obama. His Volcker Rule, prohibiting proprietary trading by banks, was heralded as one way of preventing a repeat of the recent financial crisis, and it became part of the Dodd-Frank Act signed into law in July 2010.
Dodd-Frank’s full title, incidentally, is the Wall Street Reform and Consumer Protection Act. Like most current legislation its name reflects hoped-for outcomes, not its actual provisions. Reading the act (the PDF is available here) is not for the faint of heart. There are 16 titles consisting of 1,601 sections for a total of 848 dense pages. Only a lawyer could love sentences like this:
Any nonbank financial company supervised by the Board that engages in proprietary trading or takes or retains any equity, partnership, or other ownership interest in or sponsors a hedge fund or a private equity fund shall be subject, by rule, as provided in subsection (b)(2), to additional capital requirements for and additional quantitative limits with regards to such proprietary trading and taking or retaining any equity, partnership, or other ownership interest in or sponsorship of a hedge fund or a private equity fund, except that permitted activities as described in subsection (d) shall not be subject to the additional capital and additional quantitative limits except as provided in subsection (d)(3), as if the nonbank financial company supervised by the Board were a banking entity.
Volcker initially outlined his proposal in a three-page memorandum. It came to life as Section 619 of Dodd-Frank, expanded to 11 dense pages. This section is supposed to prevent banks from buying and selling securities for their own accounts, in contrast to brokering customer trades. It also prohibits banks from holding interests in hedge funds or private equity funds or from sponsoring such funds. These prohibitions are supposed to lessen the need for future bailouts like those that were provided to financial institutions in 2008 and 2009. Continue reading
Making Whistle-Blowing Pay
The federal bureaucracies are hard at work churning out rules to implement the Dodd-Frank financial “reform” act. In May the Securities and Exchange Commission announced rules for its new whistleblower program, which rewards individuals who provide the agency with “high-quality tips that lead to successful enforcement acts.”
The minimum amount of recovered funds that can earn a reward is $1 million, but the sky’s the limit on the upside. The whistleblower gets to keep 10 to 30 percent of the amount collected, including fines, interest, and disgorgement of ill-gotten gains. We’re talking about big game here, with awards conceivably topping $100 million.
Eric Havian, an attorney with a law firm that represents whistleblowers, noted in an interview with the San Francisco Chronicle’s Kathleen Pender that the securities laws cover a “huge category of bad conduct,” such as illegal insider trading, cooking the books, market manipulation, stock option back-dating, false or misleading disclosures, and the deceptive sales of securities. Almost anything potentially can be illegal, and these vaguely defined offenses leave much room for government mischief. As for insider trading, this is a practice that does little harm and may actually provide benefits to small investors. (See my January/February 2011 Freeman article, “Inside Insider Trading.”)
If corporations felt they needed limits on insider trading or other conduct to attract shareholders, they could write prohibitions into their bylaws so that violations, if not settled internally, could be remedied under civil law. Continue reading
Sardines at Midnight
Sardines at midnight? If the mood should strike me, I can zip down to the local Safeway store here in Belmont, California, which is open 24/7, and be back with a can in 20 minutes. My biggest problem would be choosing from among Thai, Canadian, Polish, or Norwegian sardines packed in water, olive oil, tomato-basil, or soybean oil.
So what? It’s darn near a miracle, that’s what, and would seem so to most inhabitants of today’s world and everyone in yesterday’s world. Leonard Read’s phrase “The Miracle of the Market” was only a slight exaggeration. I won’t attempt to describe how markets miraculously motivate and coordinate the actions of the thousands of people who cooperate in providing me with sardines. Nobody can do that better than Leonard Read did in his classic “I, Pencil.” If for some reason you haven’t read it, stop now and do so.
The increased quantity and quality of the conveniences available to us are really amazing. We should stop to think about them from time to time, paying special attention to the incentives that brought them about.
I have vague memories of the Fisher Brothers grocery store where my mother took me around 1950. The place was tiny and the selection limited. Looking back, I wonder about its cleanliness: The owners kept sawdust on the floor to soak up spills. Later they built a supermarket that was much larger but still only a pale precursor of today’s Safeway. A mix of union coercion, government regulation, and perhaps just plain custom kept all supermarkets closed after six p.m. Monday through Saturday and all day Sunday. A working woman had to scramble to get her shopping done before closing time or join the mob on Saturday. Continue reading
Shoot the Shorts
European bank stocks have dropped sharply in recent days, presumably because they hold large amounts of shaky debt issued by the governments of Greece, Portugal, Spain, Ireland and Italy. Several European governments have found someone to blame for their financial problems, and their target is that perennial favorite, speculators. And not just any old speculators, but the darkest of that shady lot, short sellers. Short sales of major European bank stocks are banned for a period of time so that traders can’t spread false rumors and trigger a downward spiral in these stocks.
(To sell short means to sell borrowed stock in the hope that the price will decline. If the stock does fall, sellers buy the shares cheaply, return them to their original owner, and pocket the cash difference. If the shares rise instead, short sellers have to pay a high price and suffer a loss. When a number of short sellers cover their positions out of fear of rising prices, it’s called a short-covering rally.)
What a dreary and stupid move the Europeans have made. They might have learned from the ban instituted in 2008 by U.S. authorities, which accomplished nothing.
There is good reason to fear for the European banks – the problems with European sovereign debt are evident. Rumors are hardly necessary when the banks’ exposure is well known. And if false negative rumors justify intervention, what about false positive rumors? Why not ban purchases of stocks when the all-knowing regulators determine they were boosted by bullish rumors? Continue reading
Bank Deregulation: Friend or Foe?
Banking has changed a lot during my lifetime—for the better. The changes are partly due to technology (ATMs, online access), but also to deregulation that subjected banks to a lot more competition. What were the major deregulatory moves and how might they have contributed to the recent crisis? Before addressing those questions, a little personal history.
I got interested in money and banking at a very young age. My mother often took me along on shopping trips, explaining what money was, why we needed it in stores, and how my father got it for us. Trips to the bank were a special treat. The Cleveland Trust branch near us was an imposing affair, with a limestone façade, high ceilings, and tellers ensconced behind ornate barred windows. The architecture was intended to instill confidence, but to me it was just a magic place.
Later, my sixth-grade class operated a student branch of another bank, the Society for Savings. Twice a month our classroom was rearranged like a bank branch. Tellers (all boys, as I recall) would accept student deposits of a dime, a quarter, or sometimes a whole dollar. Assistant tellers (girls) would write the amount of the deposit in the student’s passbook, while the boys handled the cash. After closing we tallied the deposits and packed the loot—perhaps $50—into a canvas bag, and a privileged student would trundle it off to the principal’s office under the watchful eyes of two “guards.” What great lessons we learned: thrift, honesty, attention to detail!
By the time I was 14 I was earning good money shoveling snow, raking leaves, and mowing lawns. I had become something of a saving fanatic. I soon found out that the local savings and loan (S&L) offered higher interest than commercial banks, so I opened an account there. Savings passbooks seem quaint in hindsight, but mine was a treasured possession, a tangible reminder of my growing nest egg. Continue reading
Rare Earth Elements: Stockpile or Markets?
Quick, what do you know about lanthanum, praseodymium, neodymium, or dysprosium? If you said they are chemical elements, you are right: numbers 57, 59, 60, and 66, to be exact. They and their neighbors on the periodic table, collectively “rare earths,” were once mere curiosities tucked in between barium and tungsten. Now they’re having their day in the sun, thanks to new technology, as did uranium and plutonium when atomic energy was developed. The military may begin stockpiling them.
Good idea or not?
My first encounter with these elements was a project that developed high-tech shock absorbers to protect a replacement camera for the Hubble telescope during the camera’s rough ride to orbit. These devices, called M-Struts, pioneered the use of permanent magnets for shock mitigation. The only material our team found that would provide sufficient magnetic flux density (a measure of the strength of a magnetic field at a given point) was a rare earth alloy, NdFeB (neodymium-iron-boron). This material could only be procured from China.
M-Struts were a one-off project that had no discernible effect on the demand curve for neodymium. But now the demand curve is crowding up against the supply curve largely because of rare earth applications in “green” energy devices such as wind turbines (extra points if you knew that). Continue reading