You can read about the protests in this excellent blog post.

This made me think of two things that I’d like to share. First though, I’d like to give you an idea of how I imagine the two sides viewing the situation.

So the American corporation Newmont wants to build a mine, because it will make them money. A behavior which various laws and company structures has been put in place to incentivise. This is usually argued as a moral practice in two ways. One, that using profit to guide your actions is good, because in theory if everyone acts selfishly, then good things will happen because everyone has been considered. Two, that it doesn’t matter if Newmont builds this mine or not, because if they don’t then someone else will, and so they might as well do it. Kind of a twisted version of the tragedy of the commons.

To the locals, the situation is fundamentally different. To them, they have lived in this region, perhaps for hundreds, even thousands, of generations, and their entire way of life is now threatened. Their crops will not grow in the contaminated ground water, their livestock will die. A few years from now, Newmont will move on, and they will be left with nothing but a hole in the ground where once was their home. The idea of having their lives ruined for American profit must seem like one of the most immoral actions that could be imagined.

Now the locals will fight to stop this mine, which they are doing in a grand way as you saw in the blog post I linked to above. And Newmont, on their part, will lobby the Peruvian government, talking about all the jobs created or the benefits they will bring to Peruvian GDP.

And, like I said earlier, this makes me ponder two things.

The first thing

The Peruvian government is the judge here, it will decide the outcome of this situation. It needs to answer the question “Who is right?”. To them, it might not be such an easy question. They will weigh the supposed benefits of bringing big industry to the country and it’s potential for improvement of the lives of Peruvians, against letting a foreign corporation destroy the lives of thousands of people.

Whenever a government needs to answer a question like this, I hope they turn to John Stewart Mill and his “Harm Principle”, which says:

“the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others.”

When one actor wants to build a mine to make itself wealthier, and it wants to do so at the expense of ruining the lives of thousands of other members of society, then government has the right, indeed the moral obligation, to prevent it.

The second thing

As globalization moves forward, international corporations and organizations will become increasingly powerful players. As they do, it will become ever harder for other actors in society to voice their opinions. Historically, government has served the purpose of solving these disputes by, in theory, acting as an unbiased judge between disagreeing parties. As the power on one side increases, the illusion of an unbiased government becomes clear.

And as one side becomes stronger, the amount of labor and work needed from the other side to argue their case will grow. And so the question is at what point is corruption of government inevitable? How long will the checks and balances work?

Some would argue indefinitely. That modern tools of communication and a growing international redefinition of the term “us” to mean “mankind” and not just “people from my country” will in fact be a strong enough counter balance.

I would argue that we need to re-think how our governments are put together. The classic checks and balances against corruption were put in place in a very different time. I would argue that, as some of these actors in society has gained more power than many governments have, those checks and balances are no longer strong enough to hold wide spread corruption at bay.

Perhaps new tools of communication can help us, to heavily increase transparency and accountability as a way to tip the balance of incentives back towards fair government. Restructuring government to allow stronger local influence would also help, although that would at the same time make national government weaker, perhaps making it unable to force these stronger parties into compliance.

We need to think about how large these actors can become, and we need to think about it before they are so strong that change has become a distant dream.

Because your cousin focused on the walls, you could work entirely on the ceiling, making both the ceiling and the walls the most awesome ceilings and walls in pillow fort history.

Your cousin

Learning all there is to know about building pillow forts in just one weekend can be tough, but if you focus on ceilings, you will learn a lot about them. Likewise, your cousin will learn a lot about putting up walls. So the pillow fort will have great walls and a great ceiling, because you help each other out.

What is really fascinating is that we can actually show that had you been building two separate pillow forts instead of working together, the total pillow-fort-awesomeness-level of the two forts would be exponentially lower than your combined fort. The reason is that you both become great at two separate things, instead of both being mediocre ceiling and wall builders. I know that sounds strange, but just hang on, I’ll give a better example in a second.

This applies generally. If you are working on a big enough project, participants can focus on a few things, and focusing makes you learn faster. In economics, this idea is called specialization, and it is the underlying driver of a concept called economies of scale.

A guy named Adam Smith studied a factory that made sewing pins a while back. What he found was that one guy making pins alone could make perhaps ten pins a day. I know what you are thinking (except for “what the hell does this have to do with pillows?”). That seems like very little. But there is a lot involved to make pins you know. You need to cut the right length of steel wire, straighten it, sharpen it and cut the top to prepare for the pin head. The head takes three distinct steps to make, then you need to put it on and then very, very carefully paint it.

Adam, most pleasing angle

Now, to answer your first question. What the hell do pins have to do with pillow forts? Well, Adam found that when ten people made pins together instead of working alone, and each specialized in one or two things, they were able to make forty eight thousand pins a day. That means each person “makes” 4,800 pins per day. That is four hundred and eighty times more pins than when working alone, enough to sew up a storm. Such is the power of specialization.

If you think about this, you quickly realize how this makes trade very beneficial. Through trade, specialization can spread throughout the world. Someone specializes in making pins, someone in shipping iron ore to the pin factory. Someone specializes in mining for that ore, and someone specializes in making mining equipment for the miners. Someone else specializes in making clothes for all these people, and someone in making fabric for the clothes. The list of interdependencies permeates throughout the world economy, all because of the same simple idea that lies behind a truly great pillow fort.

Still here? I’m done. Here, listen to This American Life instead, about what happens when 920 000 people specialize in building iPhones: http://www.thisamericanlife.org/radio-archives/episode/454/mr-daisey-and-the-apple-factory