Does Per Capita GDP Mean Anything?

There are various ways to measure the level of a country’s development. Choosing the right methodology for quantifying economic status is critical for thinking about the problem of poverty effectively. On a macroeconomic level, the most common indicator is per capita GDP. But I am not sure if per capita GDP is really a good measuring stick for the relative prosperity of a country. The statistic is used as a proxy for development, without taking into consideration the relative concentration of wealth.

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On August 2nd

You don't want this baby seal to be clubbed to death, do you?The brouhaha over August 2nd as a firm deadline to raise the nation's debt ceiling has at least some element of Washington Monument Syndrome.  From Wikipedia:

Washington Monument Syndrome, also called the "Mount Rushmore Syndrome", is the name of a political tactic allegedly used by government agencies when faced with reductions in the rate of projected increases in budget or actual budget cuts. The most visible and most appreciated service that is provided by that entity is the first to be put on the chopping block.  The name derives from the National Park Service's alleged habit of saying that any cuts would lead to an immediate closure of the wildly popular Washington Monument.  The Washington Monument Syndrome emerged as a euphemism for cutting the most visible services after George Hartzog, the seventh National Parks Director, closed popular national parks like the Washington Monument and the Grand Canyon for two days a week in 1969. The intent of the closures may not have been to get people to complain to Congress, but the effect was that Congress received complaints, Hartzog was fired, and the funding was restored.

Here are some more examples of the phenomenon in ascending order of ridiculousness:

The Zakim Bridge from Cambridge to Boston is one of the Boston's most popular landmarks.  In April 2009, the MBTA faced budget cuts and billions in debt still lingering from the Big Dig and decided to turn off the bridge's famous lights, which would save a whopping 1/30,000 of the organization's debt.  The ignorant public responded to this stunt by demanding that the MBTA's budget be raised so the lights could be turned back on.

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Modern Visionaries Part III - Benoit Mandelbrot

"Think not of what you see, but what it took to produce what you see.” - Benoit Mandelbrot

"Nebulabrot" by Paul Nylander

In keeping with the mathematics theme established in the previous installment of this series (on Buckminster Fuller), Part III is about Benoit Mandelbrot.  It is impossible to ignore the “geodesic”, forward-looking genius of Benoit Mandelbrot.  Like Fuller before him, Mandelbrot used geometry to identify and educate us about the nature of infinity.  Mandelbrot’s elucidation of “fractals” may have given the human race a much closer look at nature’s grand design.  

Benoit B. Mandelbrot was born November 1924 and died on the 14^th of October, 2010.  A mathematician born in Poland but raised in France, Mandelbrot spent much of his life living and working in the United States.  Starting in 1951, Mandelbrot worked on problems and published papers in mathematics and applied math, information theory, economics, and fluid dynamics.  He became convinced that two key themes - fat tails and self-similar structures - ran through a multitude of common problems in those fields.

the Mandelbrot setPerhaps Mandelbrot's most famous contribution is the M-set.  Mandelbrot discovered the M-set in 1980; this discovery has been widely discussed in books such as The Fractal Geometry of Nature by Mandelbrot and Chaos by James Gleick and in scientific magazines (for example see the beautiful pictures and excellent summary in the July 1985 issue of Scientific American).

I am by no means a mathematician.  I’ve always been humbled by the complexities of higher mathematics, more of a right brained guy I guess.  Mandelbrot’s discovery of the “M-set” may well be a look in to the true fabric of Mother Nature, and sure enough, Mom speaks math.  

For those who are mathematically inclined, here is a brief outline of how the M-set is created: start with the expression z -> z^2 + c; choose two complex numbers z and c; solve the expression z^2 + c to get a new value of z; put the new z into the z^2 + c term and compute another z value; continue this process on a computer for much iteration.  Color coding the rate at which different values of c cause z to either (1) shoot off to infinity, (2) stabilize in the realm of finite numbers, or (3) go to zero creates the visual embodiment of the “m-world”.  One of the many wonders of this infinitely complex “world” is that it can be created by just a few simple lines of computer code that are repeated recursively.  From these little algorithmic loops comes the most rococo universe that anyone has ever seen.  No matter how many times you magnify the M-set to infinity, it continues to expand.  And you can see the M-set everywhere in nature.  Mandelbrot found a mathematical formula to describe a “fractal” (a term he invented to describe the M-set) – in which each part mimics the pattern of the whole.

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Cash Rules Everything Around Me

I've written before that it's very important for America to learn to count past "one, two, many".  Case in point: BP's $25,000,000 fine for DPing Alaska's North Slope back in 2006.  From the New York Times:

BP will pay $25 million in civil fines to settle charges arising from two spills from its network of pipelines in Alaska in 2006 and from a willful failure to comply with a government order to properly maintain the pipelines to prevent corrosion, federal officials announced on Tuesday.

The fine is the largest per-barrel assessment ever levied against an oil company in a spill case and represents a new blow to BP’s corporate treasury and reputation.

The aggressive approach of federal prosecutors in this case could portend huge fines and penalties from BP’s much larger spill in the Gulf of Mexico last year.

I will eat my own arm if $25,000,000 dollars "represents a new blow to BP's corporate treasury and reputation".  BP's 2010 revenue was $309,000,000,000.  $25,000,000 represents 1/12360 (0.008%) of BP's 2010 revenue.

To put this figure in terms the average person can understand, the median annual household income in the United States in 2010 was just under $50,000.  0.008% of $50,000 is four dollars.  BP paying a $25,000,000 fine is like you or me paying four dollars.  (For comparison purposes, a typical bounced check fee represents a six to ten times greater economic burden on the individual than a $25,000,000 fine represents for BP.)  Surely a $25,000,000 fine is not "a new blow to BPs corporate treasury"; hence, I do not have to eat my own arm.

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