Where Poetry and Cost-benefit analysis meet

A Ballad Of Ecological Awareness

The cost of building dams is always underestimated—
There’s erosion of the delta that the river has created,
There’s fertile soil below the dam that’s likely to be looted,
And the tangled mat of forest that has got to be uprooted.

There’s the breaking up of cultures with old haunts and habits loss,
There’s the education program that just doesn’t come across,
And the wasted fruits of progress that are seldom much enjoyed
By expelled subsistence farmers who are urban unemployed.

There’s disappointing yield of fish, beyond the first explosion;
There’s silting up, and drawing down, and watershed erosion.
Above the dam the water’s lost by sheer evaporation;
Below, the river scours, and suffers dangerous alteration.

For engineers, however good, are likely to be guilty
Of quietly forgetting that a river can be silty,
While the irrigation people too are frequently forgetting
That water poured upon the land is likely to be wetting.

Then the water in the lake, and what the lake releases,
Is crawling with infected snails and water-borne diseases.
There’s a hideous locust breeding ground when water level’s low,
And a million ecologic facts we really do not know.

There are benefits, of course, which may be countable, but which
Have a tendency to fall into the pockets of the rich,
While the costs are apt to fall upon the shoulders of the poor.

So cost-benefit analysis is nearly always sure,
To justify the building of a solid concrete fact,
While the Ecologic Truth is left behind in the Abstract.

--Kenneth E. Boulding

The 300 dollar man

Here is a neat little nugget of historical incidence that illuminates the funda of insurance. I learnt about this while watching the movie Gangs of New York. You should watch it if nothing else than simply for Daniel Day Lewis who is a rocker!

This dates back to the time when US would conscript (also called "draft") citizens for its war purposes. Conscription is not your usual voluntary enlistment practised in India. Onto the nugget from Wikipedia.

A military manpower shortage occurred in the Union during the war. Congress passed the first conscription act in U.S. history on March 3, 1863, authorizing President Lincoln to draft citizens into military service who were between the ages of 18 and 35. Copperheads (Democrats opposed to the war) were dismayed by the news. Their main objection was to national service of any kind, but in terms of rhetoric, they attacked the provision allowing men drafted to pay either US$300 or supply a substitute as a "commutation fee" to procure exemption from service, which led to the derisive term "300 dollar man". However, in practice, men formed clubs whereby if one was drafted the others chipped in to pay the commutation fee.

That is a fascinating historical example of mitigating risk through insurance!

25 differences I wish I knew earlier!

1. Causality versus Correlation
2. Strategic versus Tactical/ Operational
3. Possible versus Probable
4. Absolute versus Relative
5. Output and Outcome
6. Risk and Uncertainty
7. Experiment and Observational
8. Point estimates (average/mean) versus Distribution measures (median/ variance)
9. Understanding versus Justifying
10. Economic profit and Psychic Profit
11. Average versus Marginal
12. Variable costs and Sunk costs
13. Models versus Reality
14. Reality versus Counterfactual
    
15. Data versus Opinion
16. Credible data versus Non-credible data
17. Process versus outputs
18. Design and Evolution
19. Stock versus Flow
    
20. Internal validity and External validity
21. Random and Randomized
22. Statistical significance and Physical significance
23. Principle and Degree
24. Rule of law and Rule by law
25. Sex and Making love!

Any additions?

Update:
26. Urgent versus Important
27. Efficienct versus Effective
28. Explain versus Explain away
29. Mutually exclusive issues/ functions and those not so...