Presented by Jacob Igono, Alexia Lochmann & Gaby Regalado Are we Collapsing? A Review of Jared Diamond’s Collapse By Scott E. Page Are we Collapsing? A Review of Jared Diamond’s Collapse By Scott E. Page Article Title:

Reviewing the responses of historical societies to threats causing the collapse of some of them Mentioning environmental changes, the effects of climate change, hostile neighbors and trade partners as influences to the collapse

Finally, comparing the fate of those historical civilizations with nowadays’ civilization, pointing out the possibility of catastrophic near- future consequences

Why Nations Fail (D. Acemoglu) Comparative method between past and present societies Solution: “Institutions, Institutions, Institutions” – Focus on institutions (property rights) and politics; “markets aren’t enough” Collapse (J. Diamond) Comparative method between past and present societies Solution: “Focus on environmental issues” – Bottom-up approach – Culture, geography ECONOMIC FOUNDATIONS?

First part: describes the collapse and survival of past civilizations Second part: describes how scientists reconstruct the particulars of past civilizations and climates Third part: “The world is a big Easter Island” Fourth part: explains how we could save ourselves from the Easter-Island fate

Diamond arrived at a 5 point framework Mismanagement of Resources Institutional and Cultural Failures Climate Change Fewer Friends Greater Enemies

Mismanagement of Resources Civilizations that wisely manage their resources survive. Why weren’t these past civilizations able to sustain what they had? If these mistakes were made in the past, could the same mistakes be made today?

Institutional and Cultural Failures Institutional failures refer to poor choices made by institutions Cultural failures indicate poor choices by everyone in society Change is often slow to take effect

Climate Change Temporary changes in weather (drought, floods, hurricanes, etc.) Permanent alterations to weather patterns (mini ice age, desertification) How do you know which is happening? Changes take effect very slowly vs.

While the multiple factors may be correlated with collapse, only overharvesting is present in each collapse

Diamond’s approach: Reading, reading, reading Economist’s approach: Mathematical explanation

Model Initial quantity of resources Q Q decreases from extraction X Q increases from regeneration R Dynamics If natural resource is non- renewable: collapse! If natural resource is renewable: – X = R leads to sustainability – X > R leads to extinction

Better Sampling Instrumental Variables Diamond chose only four civilizations for his sample. Three of them are located on the outer reaches of inhabitable land. Diamond chose only four civilizations for his sample. Three of them are located on the outer reaches of inhabitable land. Diamond based his findings on issues that were correlated with collapse, but did not really show causality.

Diamond makes the assertion that the world is “one big Easter Island.” Parallels Cultural/Institutional failures Climate change Overharvesting resources Greater Enemies/Less Friends

Not so Parallel Cultural/Institutional failures Climate change Overharvesting resources The world has more than one culture and we learn from successes and failures The past climatic events were local issues If we were near the end of supply, it would be reflected in prices

Option 1: The Bottom Up Approach If everyone, of their own will, decides to start being more environmentally conscious, it will make a difference and stave off a collapse. Diamond is a proponent of this. Option 1: The Bottom Up Approach If everyone, of their own will, decides to start being more environmentally conscious, it will make a difference and stave off a collapse. Diamond is a proponent of this. Some of the Activities Advocated Making environmentally responsible voting decisions Making environmentally friendly purchases Sharing information about companies that help or harm the environment Joining local organizations

Option 2: The Market Approach The markets are efficient. As supply decreases, the prices associated with costly behaviors will rise accordingly. Option 2: The Market Approach The markets are efficient. As supply decreases, the prices associated with costly behaviors will rise accordingly. Some of the Activities Advocated Let the markets work

Option 3: The Top Down Approach The onus of getting people to make choices that are good for future generations rests in the hands of the government. Option 3: The Top Down Approach The onus of getting people to make choices that are good for future generations rests in the hands of the government. Some of the Activities Advocated Raising taxes on gasoline Outlawing excessive packaging Subsidizing clean energy and environmentally friendly homes Mandate cleaner water

The Bottom Up Approach The Market Approach The Top Down Approach Not scalable Doesn’t solve common pool resource problem, no incentives Provides the right incentives for both individuals and markets and effects more than local communities

Diamond presents a complex problem that should be addressed but his presentation suffers from a lack of economic perspective.

Thank you!