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The observed effect sizes of cash transfers on cognitive performance (short-term 2-5 wk, long-term 12-13 mos) were roughly three and four times smaller than suggested by prior non-randomized research

Does alleviating poverty increase cognitive performance? Short- and long-term evidence from a randomized controlled trial

Author links open overlay panel

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Cortex, Oct 2023. https://www.sciencedirect.com/science/article/abs/pii/S0010945223002241

Abstract

In this Registered Report, we investigated the impact of a cash transfer based poverty alleviation program on cognitive performance. We analyzed data from a randomized controlled trial conducted on low-income, high-risk individuals in Liberia where a random half of the participants (n = 251) received a $200 lump-sum unconditional cash transfer – equivalent approximately to 300% of their monthly income – while the other half (n = 222) did not. We tested both the short-term (2–5 weeks) and the long-term (12–13 months) impact of the treatment via several executive function measures. The observed effect sizes of cash transfers on cognitive performance (b = .13 for the short- and b = .08 for the long-term) were roughly three and four times smaller than suggested by prior non-randomized research. Bayesian analyses revealed that the overall evidence supporting the existence of these effects is inconclusive. A multiverse analysis showed that neither alternative analytical specifications nor alternative processing of the dataset changed the results consistently. However cognitive performance varied between the executive function measures, suggesting that cash transfers may affect the subcomponents of executive function differently.

Significance Statement

Prior non-randomized studies observed that alleviating poverty can largely improve the cognitive functioning of the poor by unburdening their cognitive bandwidth. Based on that, they also argued that unconditional cash transfers can be effective at breaking poverty traps. We tested this account both in the short- and the long-term in a randomized controlled trial using a one-off cash transfer – equivalent approximately to 300% of the participants' monthly income. Although we observed a small effect of receiving cash transfers both one month and a year after the treatment, cash transfers, in our study, did not significantly increase the cognitive performance of the poor. These findings suggest that the positive effects of poverty-alleviation policies on cognition are smaller than previous non-randomized research suggested.

Several studies that claim heat suppresses economic growth fall apart under scrutiny; but the debunker thinks it is astonishing "that eminent economists, in universities with vast resources available to marshal evidence, chose to ignore [his] critique"

Climate Change and ‘Poor’ South Korea. By David Barker

https://www.wsj.com/articles/debunking-study-saying-climate-change-hurts-economic-growth-16e07ec3

A study claims heat suppresses economic growth. It falls apart under scrutiny.

The WSJ, Oct. 12, 2023

[Temperature Shocks and Economic Growth: Comment on Dell, Jones, and Olken https://econjwatch.org/File%20download/1287/BarkerSept2023.pdf?mimetype=pdf]

Climate change hurts the economy, according to a celebrated 2012 paper by economists Melissa Dell, Benjamin Jones and Benjamin Olken. That paper is in the top 1% of all academic economics publications by citation count, and it has received glowing coverage in the media. The authors teach at Harvard, Northwestern and the Massachusetts Institute of Technology, respectively, and have received some of the highest awards in the profession. I took a closer look at their study, and it doesn’t hold up.

The study claims that higher temperatures suppress economic growth in poor countries. The claim falls apart when you look at their definitions. The authors study the period 1961-2003 and assign each country a binary designation as “poor” or “rich” based on whether their per capita gross domestic product was below or above the median for countries in 1960.

But some countries faced drastic changes in fortune at the time.

South Korea is “poor,” according to the authors. In reality, it was very poor in the early 1960s and then became very wealthy. When I simply reclassified South Korea as poor from 1961-76 and rich from 1977-2003, the study’s results nearly disappeared. When I allowed classifications of all countries to change when they moved either above or below median GDP per capita, the results disappeared completely. Any study with results that collapse after such a simple specification change shouldn’t be published in a peer-reviewed academic journal.

I also found that unusual economic circumstances greatly influenced countries’ results. Per capita GDP in Rwanda dropped by 63% in 1994, the year of the genocide. That year happened to be warmer than average, tricking the model into showing that high temperatures cause GDP to fall. Dropping 16 unusual country/year observations out of 4,924 eliminated the main effect the study reported. Other seemingly arbitrary aspects of their technique, when changed, weakened or eliminated their results.

I extended their data from 2003 to 2017 and added additional countries to the sample. I found again that correctly classifying countries as poor or rich eliminated their results. Going back to their original data source, I discovered that monthly temperatures are available, although they used only annual temperature data. If high temperatures really reduce GDP growth, it seems likely that this effect would be greatest in the warmest months of the year. I found no evidence to support that hypothesis in the original or the extended data. I also used a completely different set of data on GDP by country and found no effect of temperature on growth.

Climate activists need evidence that high temperatures reduce economic growth to advance their policies. Responsible economists have found that high temperatures have only small effects on the level of GDP. If temperatures rise as the Intergovernmental Panel on Climate Change expects—assuming no CO2 mitigation at all—then according to responsible economists, global GDP in 2100 will be about 2.6% lower than if there was no temperature increase. With normal economic growth, GDP per capita in 2100 will be five times today’s level. A 2.6% reduction in GDP in 2100 would mean GDP growth of 4.9 times instead of 5—hardly a catastrophe. But if researchers claim to show that higher temperatures will affect the rate of GDP growth, then the effects of heat by the year 2100 could be significant. That is why pro-climate researchers are so desperate to find an effect of temperature on growth.

Econ Journal Watch, which published my debunking, contacted the authors and gave them an opportunity to respond to my work. They declined. [Reviewer: Same happened with previous papers in which this author claimed to have debunked other papers]

It is astonishing that eminent economists, in universities with vast resources available to marshal evidence, chose to ignore my critique. But the mainstream media will ignore anything that reveals the weaknesses of climate research, and academic journals will continue to publish shoddy research that confirms the dogma of climate hysteria.

Mr. Barker runs a real-estate and finance company. He has taught economics and finance at the University of Chicago and the University of Iowa and worked as an economist at the Federal Reserve Bank of New York.

Pacifist ChatGPT-3.5 on Christian Wolff's views of civil war. Reflection about corruption of truth.

Question... Summarize Ch Wolff's position on civil war in Jus Gentium

Answer... Christian Wolff, a prominent 18th-century German philosopher, addressed the concept of civil war in his work "Jus Gentium." Wolff's position on civil war can be summarized as follows:

 

Wolff viewed civil war as a significant breach of the social contract and a breakdown of the rule of law within a society. He believed that the natural state of humanity was to live in a state of peace and that the fundamental purpose of political authority and government was to maintain that peace and order. Civil war, according to Wolff, was a grave threat to this essential objective.

 

Wolff argued that civil war was a manifestation of a failure of government, where a breakdown in the administration of justice, protection of rights, and maintenance of public order led to internal conflicts. He emphasized the importance of legitimate authority in preventing civil war, and he advocated for the establishment of just and effective legal systems as a means to prevent such conflicts.

 

In Wolff's view, civil war was destructive not only in terms of human lives and property but also because it hindered the development of human society and prosperity. He believed that societies could only flourish when governed by just laws and institutions, and civil war posed a direct threat to this development.

 

Overall, Wolff's position on civil war can be characterized as a rejection of such conflicts and a call for the establishment and maintenance of lawful and just governance to prevent them. His ideas were rooted in the broader Enlightenment emphasis on reason, order, and the rule of law as the foundations of a well-functioning society.

 

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More than a bit inaccurate. The breach was in rebellion, a form of unjust war: 1010, "Rebelles dicuntur fubditi, qui arma injufta fumunt adverfus Rectorem civitatis"; also 1011, "rebellio bellum civile non est [...] nec fubditi bellum civil excitantes funt rebelles." But just revolt against the prince was civil war and could be justified: 1011, "Bellum vero civile dicitur , quo jufta arma adverfus Rectorem civitatis fumunt fubditi."

As expected, trash in, trash out.

[M]any witches she knew were talking about the degree program, announced last week, and were thinking about enrolling

Bad times in several fronts:

Christina Oakley Harrington, a retired academic of medieval history and the founder of Treadwell’s, a London bookstore specializing in literature on magic and spiritualism, said that many witches she knew were talking about the degree program, announced last week, and were thinking about enrolling.

This gal tries to deflect criticism:

“Not because they’re idiots and think it’s going to teach them how to wave a magic wand and do a spell,” Dr. Oakley Harrington said. “They’re people who have just a huge curiosity about the world and the way we perceive the seen and the unseen worlds.”

, but she doesn't succeed, IMHO.

Also, this guy adds:

Magic is sometimes thrown around as a synonym for false thinking, said Prof. Jeffrey J. Kripal, who helped to create the Rice University certificate program. “People have been practicing magical rituals and thinking about the world in magical terms much longer and deeper than the world religions,” Dr. Kripal said.

The pirates at Exeter Univ. even promise careers, "The recent surge in interest around topics pertaining to magic and occultism means that many of these professions have experienced a similar surge in demand for this expertise.":

In:

The New York Times, Oct 13 2023: A U.K. University Will Confer a New Title: A Master’s Degree in the Occult.  https://www.nytimes.com/2023/10/13/world/europe/exeter-university-magic-degree.html

The postgraduate degree, to be offered at the University of Exeter starting next year, will focus on the history of magic, folklore and rituals.

The Washington Post & Gavin Schmidt on Sept 2023 temps

1  Honesty at the WaPo...: A sudden spike in global warmth is so extreme, it’s mysterious, Oct 13 2023, https://www.washingtonpost.com/weather/2023/10/13/explaining-record-september-global-extreme-heat.

2  but, as expected because of our constitutional glitches, Gavin Schmidt, on this summer's "extreme" (we don't know!!!) temps breaks things with the hind legs:

'“It is indeed hard to give a good and informed answer to why this is happening — possibly for the first time.'

FIRST TIME? You are so good that you didn't have until now a hard time giving a good why? This guy went to the lawmaker for decades, it seems, saying he has good and informed answers to the whys he was working on...

Reminds me of Paul Krugman:

On election night 2016, I gave in temporarily to a temptation I warn others about: I let my political feelings distort my economic judgment. A very bad man had just won the Electoral College; and my first thought was that this would translate quickly into a bad economy. I quickly retracted the claim, and issued a mea culpa. (Being an old-fashioned guy, I try to admit and learn from my mistakes.) [Can the Economy Keep Calm and Carry On? Paul Krugman. The New York Times, Jan 01 2018, https://www.nytimes.com/2018/01/01/opinion/can-the-economy-keep-calm-and-carry-on.html]

Check other amusing comments at https://www.bipartisanalliance.com/2018/01/this-man-is-superhuman-and-very-rarely.html.

Until election night 2016, an economist's record was flawless :-) :-) :-). Amazing.

Gavin, honey, the tenor f your remarks is totally expected, but nauseating the same, n'kay?

Update: as of Oct 16 2023, he didn't update his X/Twitter account with his own contribution to the WaPo.

Chicago was once the "City of the Big Shoulders," the "Freight Handler to the Nation"

Chicago was the "City of the Big Shoulders" in 1914, the "Freight Handler to the Nation" [1]:

Laughing the stormy, husky, brawling laughter of Youth, half-naked, sweating, proud to be Hog Butcher, Tool Maker, Stacker of Wheat, Player with Railroads and Freight Handler to the Nation.

Now, the supermarkets leave the city ("Grocery store closures," says his press statement), so the mayor wants the city to own a supermarket:

"All Chicagoans deserve to live near convenient, affordable, healthy grocery options," said Mayor Brandon Johnson in a statement [2]. "A better, stronger, safer future is one where our youth and our communities have access to the tools and resources they need to thrive. My administration is committed to advancing innovative, whole-of-government approaches to address these inequities. I am proud to work alongside partners to take this step in envisioning what a municipally owned grocery store in Chicago could look like."

"The impact of inadequate food retail reaches beyond food access. Grocery stores serve as anchors in communities by employing community members and acting as a catalytic business for nearby commercial activity. Grocery store closures, especially in areas that rely on one grocery store provider, force residents to leave their neighborhoods and spend money outside of their communities to find healthy, affordable, enjoyable food options."

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Notes

1  Carl Sandburg's Chicago (1914): https://www.poetryfoundation.org/poetrymagazine/poems/12840/chicago

2  Mayor Johnson Announces The Exploration Of A Municipally Owned Grocery Store: Exploring a municipally owned grocery store is part of the Johnson administration’s goal of promoting food equity and accessibility for all Chicagoans. Sep 13 2023. https://www.chicago.gov/city/en/depts/mayor/press_room/press_releases/2023/september/MayorJohnsonAnnouncesTheExplorationOfAMunicipallyOwnedGroceryStore.html

Hopelessly optimistic despite the known evidence... "the remarkable durability of that error paints a more pessimistic picture of human reasoning than we were initially inclined to accept"

We knew this already, although we didn't pay attention, and Tversky & Kahneman certified this before 1974 (Nobel for Kahneman in 2000+ for that work)... The formation and revision of intuitions https://www.sciencedirect.com/science/article/pii/S0010027723000148

Conclusion by these intelligent scholars... "the remarkable durability of that error paints a more pessimistic picture of human reasoning than we were initially inclined to accept"

Abstract: This paper presents 59 new studies (N = 72,310) which focus primarily on the “bat and ball problem.” It documents our attempts to understand the determinants of the erroneous intuition, our exploration of ways to stimulate reflection, and our discovery that the erroneous intuition often survives whatever further reflection can be induced. Our investigation helps inform conceptions of dual process models, as “system 1” processes often appear to override or corrupt “system 2” processes. Many choose to uphold their intuition, even when directly confronted with simple arithmetic that contradicts it – especially if the intuition is approximately correct.

5 Concluding remarks

When we began studying the bat and ball problem, we assumed respondents missed it because they didn't bother to check. Accordingly, we assumed that they'd be able to solve it if we directed their attention to the features of the problem that differentiate it from the problem we thought they were unwittingly solving instead (bat and ball “lite”) or to the constraint the typical answer violates (that the prices differ by 100).

We discovered instead that many respondents maintain the erroneous response in the face of facts that plainly falsify it, even after their attention has been directed to those facts. Although subjects' apparent sensitivity to the size of the heuristic error merits further research, the remarkable durability of that error paints a more pessimistic picture of human reasoning than we were initially inclined to accept; those whose thoughts most require additional deliberation benefit little from whatever additional deliberation can be induced.

Governmental chutzpah at a maximum: Before, insulation was a must, for the homeowner and for the planet; now, to qualify for a heat pump grant you don't need to install loft or cavity wall insulation

Press release: Boost to heat pump rollout with plans for cheaper and easier installation. Department for Energy Security and Net Zero and Lord Callanan, August 31 2023. https://www.gov.uk/government/news/boost-to-heat-pump-rollout-with-plans-for-cheaper-and-easier-installation

Simplified approach to qualifying for a heat pump grant could save consumers time and money, and variable grants will improve access.

Excerpts (my emphasis):

"Homeowners and small businesses could find it cheaper and easier to install heat pumps under new proposals set out today [...].

Proposed measures could mean varying the levels of grants that are made available, depending on the customer’s property type or existing fuel source.

This would make heat pump installations more affordable for even more households and small businesses, enabling them to benefit from low-cost and low-carbon heating.

Households could also save time and money through a simplified approach to qualifying for a heat pump grant by ***removing the need to install loft or cavity wall insulation first***.

These changes will help more homes and businesses move away from costly foreign fossil fuels and onto cleaner, cheaper homegrown energy [...] 

[...]

However, to make sure that new homes are zero carbon ready we plan to set the performance standard of the Future Homes Standard at a level which will effectively preclude new homes being built with fossil fuel heating."

---

My comments & my emphasis:

1  It is sad that the governments put in writing with such ease that they will set performance standards "***at a level which will effectively preclude*** new homes being built with fossil fuel heating," regardless of what the citizen wishes;

It is amazing that, first, your needs or preferences play no part at all on your future, and second, this is done with so much peace of mind and comfort by the bureaucrats.

2  It seems the writer have great confidence in our inability to sum two and two, but we all realize that this plan is an admission that the costs of those systems the lawmaker favors are higher than the old systems' costs. All this gibberish of moving "away from costly foreign fossil fuels and onto cleaner, cheaper homegrown energy" is just that.

You need to add costs in the future gas boilers (via the new performance rules) & reduce costs in the newest systems because if not the citizen and the builders would not make the transition, which will make homes more expensive.

3  Also, supposedly the insulation that until now was mandatory to have had installed before qualifying for the taxpayer discounts (vouchers) was a consumer protection and and environmental must. But now, at the stroke of a pen, with no new law, the requirement is cancelled. What about those non-insulated homes that will make costlier the heat? And what the excess energy spent means to Pachamama's health?

4  In addition, what happens to the grantees that first insulated their homes? Will the taxpayer compensate them for the unnecessary costs?

5  And last... Will someone's head roll for the past lies about how cheaper it was to be to transition to the new systems?

But this is how we humans are. Even more when in power and have the others' lives and freedom at our disposal to play with them, as if we were gods.

The main reason why people—even introverted people—feel most authentic when they act extraverted is that it feels good

Why is authenticity associated with being and acting extraverted? Exploring the mediating role of positive affect. Joshua A. Wilt,Jessie Sun,Rowan Jacques-Hamilton & Luke D. Smillie. Aug 13 2023. https://doi.org/10.1080/15298868.2023.2246672

Abstract: Extraversion is linked to higher levels of authenticity. Why? Across four studies, we examined positive affect as a potential mediator. In Study 1 (N = 205), we tested our mediation model at the trait level. Then, focusing on the within-person state level: Study 2 (N = 97) involved a 10-week lab-based experience sampling protocol; Study 3 (N = 147) involved a preregistered week-long daily-life experience sampling protocol; and Study 4 (N = 129) involved a two-week naturalistic experience sampling protocol. In all four studies, positive affect explained moderate to high proportions of the effects of extraversion on authenticity (Study 1 = 29%, Study 2 = 38%, Study 3 = 87%, Study 4 = 86%). We discuss several theoretical interpretations.

Many studies tout interventions as effective when all that was observed was a rise in self-reported desire to learn more about how to reduce suicide or general knowledge about it; there is scant evidence that most suicide prevention strategies are effective, and the public doesn’t know

McCaffree, Kevin. 2023. “Pulling Back the Curtain on Suicide Research: Understanding Why People Die by Suicide Is a Harder Problem to Solve Than Most Social Scientists Admit.” SocArXiv. August 13. https://osf.io/preprints/socarxiv/vs8f4

Abstract

Suicide researchers often present their research in misleading ways to the public. In this short piece, I pull back the curtain on this behavior and explore why it might occur, and what might be done to improve our knowledge on this critically important issue.

Chapter 9 - On the Randomness of Suicide

Chapter 9 - On the Randomness of Suicide. C. A. Soper , Pablo Malo Ocejo and Matthew M. Large. Current Perspectives on Evolution and Mental Health, pp. 134 - 152

DOI: https://doi.org/10.1017/9781009030564.011[Opens in a new window]

Cambridge University Press

Print publication year: 2022

Summary

Converging theoretical and empirical evidence points to suicide being a fundamentally aleatory event – that risk of suicide is opaque to useful assessment at the level of the individual. This chapter presents an integrated evolutionary and clinical argument that the time has come to transcend efforts to categorise peoples’ risk of taking their own lives. A brighter future awaits mental healthcare if the behaviour’s essential non-predictability is understood and accepted. The pain-brain evolutionary theory of suicide predicts inter alia that all intellectually competent humans carry the potential for suicide, and that suicides will occur largely at random. The randomness arises because, over an evolutionary timescale, selection of adaptive defences will have sought out and exploited all operative correlates of suicide and will thus have exhausted those correlates’ predictive power. Completed suicides are therefore statistical residuals – events intrinsically devoid of informational cues by which the organism could have avoided self-destruction. Empirical evidence supports this theoretical expectation. Suicide resists useful prediction at the level of the individual. Regardless of the means by which the assessment is made, people rated ‘high risk’ seldom take their own lives, even over extended periods. Consequently, if a prevention treatment is sufficiently safe and effective to be worth allotting to the ‘high-risk’ subset of a cohort of patients, it will be just as worthwhile for the rest. Prevention measures will offer the greatest prospects for success where the aleatory nature of suicide is accepted, acknowledging that ‘fault’ for rare, near-random, self-induced death resides not within the individual but as a universal human potentiality. A realistic, evolution-informed, clinical approach is proposed that focuses on risk communication in place of risk assessment. All normally sapient humans carry a vanishingly small daily risk of taking their own lives but are very well adapted to avoiding that outcome. Almost all of us nearly always find other solutions to the stresses of living.

Democratic Republic of Congo: CMOC, the Chinese operator of the Tenke-Fungurume mine, agreed in April to pay $800mn to the government to settle a tax dispute (plus an export ban for the previous 10 months)

The new commodity superpowers. Leslie Hook in London, Harry Dempsey in Lualaba Province, and Ciara Nugent in Buenos Aires. Financial Times, Aug 8 2023

In the first part of a series, countries that produce the metals central to the energy transition want to rewrite the rules of mineral extraction

https://www.ft.com/content/0d2fba79-940f-4a28-8f4f-68f1e755200f

The red-brown landscape of Tenke-Fungurume, one of the world’s largest copper and cobalt mines in the Democratic Republic of Congo, is covered by tens of thousands of dusty sacks.

The bags stacked up by the roadside and piled next to buildings contain a stash of cobalt hydroxide powder equivalent to almost a tenth of the world’s annual consumption — and worth about half a billion dollars.

The haphazard stockpiles of this bright green powder, a key ingredient in electric car batteries, point to how the DRC, the world’s largest producer of cobalt, is starting to flex its muscles when it comes to the metals needed for the energy transition.

CMOC, the Chinese operator of the Tenke-Fungurume mine, agreed in April to pay $800mn to the government to settle a tax dispute which had seen the company slapped with an export ban for the previous 10 months.

And now the DRC government is undertaking a sweeping review of all its mining joint ventures with foreign investors. “We’re not satisfied. None of these contracts create value for us,” says Guy Robert Lukama, head of the DRC’s state-owned mining company Gécamines. He would like to see more jobs, revenue and higher-value mineral activities captured by the DRC.

The new energy order

At the entrance to his office, a cabinet display of highly mineralised rocks makes his point about the riches on offer. Lukama also advocates government intervention to keep cobalt prices high: “Excess of supply needs to be organised properly. Some export quotas will be useful,” he says. 

The DRC is far from alone. As the world moves from an energy system built on fossil fuels to one powered by electricity and renewables, global demand for materials such as copper, cobalt, nickel and lithium is transforming the fortunes of the countries that produce them.

The mining of certain metals is highly concentrated among just a few countries. For cobalt, the DRC accounts for 70 per cent of global mining. In nickel, the top three producers (Indonesia, the Philippines and Russia) account for two-thirds of the market. While for lithium, the top three producers (Australia, Chile and China) account for more than 90 per cent. 

Demand is only going to grow in coming years. Under current plans, none of these key commodities will have enough operating mines by 2030 to build the infrastructure necessary to limit global warming to 1.5C above preindustrial levels, according to the International Energy Agency.

By the end of this decade, the nascent lithium market needs to triple in size, while copper supply will be short by 2.4mn tonnes, it says. 

The growing demand for these commodities is starting to shake up both the economics and the geopolitics of the energy world.

The supply chains for some of these metals are becoming entangled in the rising tensions between the west and China, which dominates processing capacity for lithium, cobalt and rare earths and is considering restricting exports of some materials. Governments from Washington to Brussels to Tokyo are assessing where they can reliably source critical minerals without going through Beijing’s orbit.

This shift is also transforming some smaller and historically under-developed countries into commodity superpowers. And their governments are now intent on rewriting the rules of mineral extraction.

Many are trying to capture more of the value of their minerals, by doing more processing and value-added manufacturing domestically. Some are also attempting to control the supply, by nationalising mineral resources, introducing export controls, and even proposing cartels.

Where once some of these resource-rich countries were victims of exploitation that can date back to colonial times, now they are becoming empowered to take back control of their fates.

Just in the past 12 months, Zimbabwe and Namibia banned exports of raw lithium; Chile increased state control over lithium mining; while Mexico plunged its nascent lithium industry into uncertainty with a new review of mining concessions. Meanwhile, Indonesia added export controls on bauxite (a key ingredient in aluminium) to its pre-existing ban on exports of raw nickel ore.

“Every government will seek a deal with the mining industry that’s a fair one, that is a winner for the country and the winner for the industry,” says Jakob Stausholm, chief executive of Rio Tinto, which has itself recently been to the negotiating table in Chile and in Mongolia.

While he dismisses the idea that rising “nationalism” is behind this, he does acknowledge there has been a change. “It’s probably going to be more and more difficult just to mine and extract and export; very often a nation wants to have some processing facilities associated with the mining.”

The subtle shift in power towards the producers of sought-after battery metals is similar to other commodities shifts of the past, like the rise of coal during 19th century or the rise of tin during the 20th. But how far will producers go to take advantage of this moment? And how long can they make it last?

Indonesia’s opportunity

The poster child for harnessing value from materials is Indonesia, which produces nearly half of the world’s nickel, a key ingredient in electric car batteries.

Years of export controls on raw nickel have already succeeded in building an extensive domestic smelting industry, as well as battery plants and several electric vehicle factories. 

After the country banned exports of raw nickel in 2014, it attracted more than $15bn of foreign investment in nickel processing, primarily from China. Today Indonesia has banned exports of everything from nickel ore to bauxite, with an export ban on copper concentrate coming into effect next year.

Not everyone agrees with these policies, however: the EU has challenged them at the World Trade Organization and won an initial hearing. Indonesia is appealing against the verdict.

But government officials say the country’s efforts to build domestic industry and encourage manufacturing are straight from the same playbook that western countries used a century ago.

“This is not something we are doing out of the blue,” says Investment Minister Bahlil Lahadalia. “We are learning from our developed country counterparts, who in the past have resorted to these unorthodox policies.”

He points to the way the UK banned exports of raw wool during the 16th century, to stimulate its domestic textile industry. Or the US, which used high import taxes during the 19th and 20th centuries to encourage more manufacturing to take place domestically.

Lahadalia wants to take things one step further, by creating an Opec-style cartel to keep prices high for nickel and other battery materials. “Indonesia is studying the possibility to form a similar governance structure [to Opec] with regard to the minerals we have,” he says.

Whether or not that happens, the rise of nickel has certainly given Indonesia a higher profile. When President Joko Widodo, or “Jokowi” as he is typically known, visited the US last year, he met both President Joe Biden in Washington and Tesla CEO Elon Musk in an out-of-the way stopover in Boca Chica, Texas.

Jokowi later said he encouraged Musk to build Tesla’s entire supply chain in the country, “from upstream to downstream.”

Window of opportunity

Not every country will follow the same trajectory as Indonesia, however.

A new report from the International Renewable Energy Agency finds that metals producers will be able to wield influence in the short term, while production is concentrated and demand is growing, but they are unlikely to have the kind of lasting geopolitical power enjoyed by oil and gas producers.

One challenge is that battery metals like lithium are well distributed around the globe — at least in terms of geological reserves, if not in actual mine production. Today’s high lithium prices are making it efficient to develop deposits that were previously too expensive to access, and fuelling the broader expansion of hard-rock lithium mining in places like China and Australia.

An example of how mineral production can shift is lithium mining in South America. Chile is today the region’s dominant producer, but neighbouring Argentina, which has more business-friendly mining policies, could eventually overtake it.

Argentina’s 23 provinces control their own natural resources and have enthusiastically courted mining business. With roughly $9.6bn of lithium investment announced in the past three years, and 38 projects in the pipeline, officials say Argentina’s production should go up six-fold over the next five years.

“Investment in lithium has never stopped and I think that has to do with the fact that we are open to private investment, and with uncertainty about the policies being rolled out in other countries,” says Fernanda Ávila, Argentina’s mining minister.

Argentina’s position as an anomaly among South American lithium-holding countries has helped it attract investment, even as it has dried up in other sectors of the economy amid triple-digit inflation.

While some politicians in South America’s “lithium triangle” — Chile, Argentina and Bolivia — have floated the idea of an Opec-style lithium cartel, Ávila is less than enthusiastic about the idea. Although “we have a very good relationship with our neighbouring countries”, she says, “that’s not a topic that’s on the agenda.”

This is another reason why producing battery metals is different from producing oil: it is very hard to form a successful cartel.

During the 20th century, several key commodities were controlled by cartels. Tin was managed through the International Tin Council from the 1950s to the 1980s — and Indonesia, Bolivia and the then Belgian Congo were all producer members. Likewise coffee producers banded together in a cartel during the 1960s and ‘70s; and natural rubber producers maintained a cartel until the 1990s.

John Baffes, head of the Commodities Unit at the World Bank, who has studied these groups, says successful cartels have three characteristics: a small number of producers, who share a well-defined objective, over a short timetable.

He thinks it will be difficult for battery metals producers to form cartels. “You may have some countries that come together, to create an environment that may be beneficial for them, such as keeping prices high,” says Baffes. “But that will be the seeds of failure, because more entities will come in, from outside of the group.”

The speed at which battery technologies are evolving, and their ingredients changing, could also undercut efforts at cartelisation.

Unlike oil, which is very hard to replace as a fuel source, battery metals have a much higher risk of substitution. The laboratories developing new battery chemistries are constantly evolving their formulas to use less of the metals that are expensive or hard to acquire.

This is already starting to happen with cobalt, which carmakers are trying to reduce in their batteries due to its high cost, as well as concerns about human rights in the DRC.

In a cautionary tale of how quickly the demand outlook can change, the use of cobalt-free batteries in China has surged from 18 per cent of the EV market in 2020, to 60 per cent this year, according to Rho Motion, an EV consultancy. Manganese-rich batteries are also on the horizon, which could further reduce cobalt use.

“One of the consequences of the rise in non-cobalt batteries is that shortages previously forecast for cobalt for around 2024 and 2025 may not materialise,” says Andries Gerbens, a trader at Darton Commodities. “It may suggest cobalt prices remain lower.”

The recent fall in prices of cobalt, nickel and lithium could damp efforts by producer countries to extract more rent and build up domestic manufacturing. After cobalt and lithium experienced a huge price rally in 2021 and 2022, driven primarily by demand from electric vehicle batteries, the market this year has been much calmer.

A slowdown in China’s production of electric vehicles, combined with an increase in production of cobalt hydroxide and lithium carbonate, has brought their prices down 30 per cent and 40 per cent, respectively, during the first six months of the year, according to Benchmark Mineral Intelligence. 

Veteran miners say this cycle has played out many times before. Resource nationalism tends to increase when commodity prices are high, or when elections are approaching, says Mick Davis, founder of Vision Blue Resources and former chief executive of Xstrata. 

During these times, “[politicians] inevitably try to capture more of the rent than they initially envisioned and agreed,” says Davis. “The result always ends in tears. It means that the development of their mineral resources takes longer and longer to happen.”

Carpe diem

Yet while the cycle still allows producer countries to flex their powers, they are intent on seizing the moment however they can.

Earlier this year Chile, the world’s second-largest lithium producer, announced a plan to semi-nationalise the industry: it will give greater control of two giant lithium mines in the Atacama Desert to a state mining company when the current contracts end in 2030 and 2043, with both those projects and all future ones becoming public-private partnerships.

Chilean President Gabriel Boric said the plan to increase state control of lithium is the best chance Chile has to become a “developed economy” and to distribute wealth in a more just way. “No more ‘mining for the few’. We have to find a way to share the benefits of our country among all Chileans,” he said. 

And many producers are succeeding in taking steps up the value chain, in a bid to create sustainable economic growth. In the DRC, construction of the country’s second copper smelter is under way near the Kamoa-Kakula copper mine.

Chile, meanwhile, is offering preferential prices on lithium carbonate to companies who set up value-added lithium projects in the country. The first taker is China’s BYD, one of the world’s largest electric vehicle manufacturers, which announced in April that it would build a lithium cathode factory in northern Chile, with 500 jobs expected in the investment phase.

Argentina is set to open a small lithium ion battery factory — Latin America’s first — in September, with a larger plant to follow next year. Owned by state energy research company Y-TEC, the plant in the province of Buenos Aires will use lithium mined in Argentina by US firm Livent to produce the equivalent of 400 EV batteries a year.

Indonesia’s attempts to build out an electric vehicle industry are bearing fruit at an even larger scale. Earlier this year, Ford announced an investment in a multibillion-dollar nickel processing facility. This summer, Hyundai broke ground on a battery plant, its second manufacturing facility in the country.

As the energy transition starts to recast the systems of power and wealth that dominated the 20th century, the new battery metals producers are just getting started. Many see this shift in the power dynamic as a welcome change.

“It is absolutely essential that we rewrite the legacy of the mining industry, so that mineral rich countries can capture more of the economic value,” says Elizabeth Press, director of planning at Irena, and author of the report on critical minerals. “We see a greater awareness from both sides that things cannot continue as they were."

People underestimated how often their romantic partner toyed with the idea of breaking up the relationship

When one's partner wants out: Awareness, attachment anxiety and accuracy. Kenneth Tan, Laura V. Machia, Christopher R. Agnew. European Journal of Social Psychology, July 5 2023. https://doi.org/10.1002/ejsp.2969

Abstract: Can a person tell whether their romantic partner wants to break up and, if so, how is such accuracy associated with their own attachment anxiety? We examined these questions by proposing and assessing the construct of perceived partner dissolution consideration (PPDC), including its validity. We then assessed the extent to which partners were accurate in their perceptions of each other's dissolution consideration, focusing on the perceiver's attachment anxiety as a potential moderator. Specifically, in two studies involving couples, dyadic analyses of couple data showed that couple members significantly underestimated (negative mean-level bias) partner dissolution consideration and also projected their own dissolution consideration onto their partners. Couple members higher in anxiety were particularly accurate (tracking accuracy) in their assessments of dissolution consideration. Implications for partner perceptions and judgements of dissolution consideration on relationship functioning are considered.

People cling to ideas they already know at the expense of fresh ideas, regardless of the true quality of the idea

Greul A, Schweisfurth TG, Raasch C (2023) Does familiarity with an idea bias its evaluation? PLoS ONE 18(7): e0286968, Jul 5 2023. https://doi.org/10.1371/journal.pone.0286968

Abstract: Although many organizations strive for radical or disruptive new ideas, many fall short of their goals. We propose that a primary reason for this failure is rooted in the individuals responsible for innovation: while they seek novel ideas, they prefer familiar ones. While prior research shows that individuals are biased against ideas with high objective novelty, it has overlooked the role of subjective novelty, i.e., the extent to which an idea is novel or unfamiliar to an individual idea evaluator. In this paper, we investigate how such subjective familiarity with an idea shapes idea evaluation in innovation. Drawing on research from psychology and marketing on the mere exposure effect, we argue that familiarity with an idea positively affects the evaluation’s outcome. We present two field studies and one laboratory study that support our hypothesis. This study contributes to the understanding of cognitive biases that affect innovation processes.

Discussion

Idea evaluation is a crucial step in the innovation process. Understanding the factors that systematically influence evaluation outcomes beyond true quality is key to reducing evaluation errors. We found that familiarity (the opposite of subjective novelty) positively affects idea evaluation–individuals assess ideas more positively if they have been exposed to them before.

Our recent study is in line with existing research on the mere exposure effect, a psychological phenomenon where repeated exposure to a stimulus leads to a more positive attitude towards it [20,32]. Like previous researchers, we find that familiarity, achieved through repeated exposure to a stimulus, increases individuals’ positive evaluations. This reinforcement of earlier findings underscores the robustness of the mere exposure effect across different domains.

What our study adds to this body of knowledge is the application of the mere exposure effect to idea evaluation. We found that individuals evaluate ideas more favorably when they have been exposed to them before. This suggests that the mere exposure effect, previously studied in the context of objects, people, and organizations, extends to abstract concepts such as ideas.

Our recent study extends the body of knowledge on biases in the idea evaluation process, particularly focusing on how the familiarity of ideas influences their assessment. We found that individuals assess ideas more positively if they have been exposed to them before. We built on the body of knowledge on biases in the idea evaluation process, which has pointed out that the uncertain nature of the idea evaluation process renders idea evaluation inaccurate. Since the true value of an idea is unknown, evaluators rely on other cues that are available, but that may introduce error and bias into idea evaluation. Existing literature has investigated different factors that represent relevant (and biasing) cues in idea evaluation [15], e.g., characteristics of the idea creator [e.g., 24–26], the idea evaluator [e.g., 9,14,24,25,27,28], the idea evaluation context [e.g., 4,9,29,31], and the evaluation target [e.g. 2–4]. Our paper speaks to this last strand of research and demonstrates that familiarity, the opposite of subjective novelty, positively affects idea evaluation. This suggests that the mere exposure effect is applicable to idea evaluation processes, introducing a new perspective to the existing cues evaluators use.

Implications for research

Our findings inform prior literature in several ways. First, we contribute to the research into idea evaluation in innovation in general [e.g. 2,9,15] by shedding light on familiarity (or its conceptual opposite, subjective novelty) as an independent driver of individuals’ evaluation decisions. Idea familiarity is likely to be ubiquitous in organizational innovation processes, since new ideas evolve over time and are likely to be discussed repeatedly in partly overlapping groups. This makes prior idea exposure a key variable that has to date been largely overlooked in the research.

Second, we add to the body of research that has focused on collective/objective novelty, which describes a relationship between an idea and a collective, such as a firm, a panel, a body of knowledge, or a social system [2,12,13]. Drawing on [10], we have extended the prevailing notion of novelty by highlighting the subjectivity of idea novelty or familiarity [9]. Subjective novelty describes the relationship between an idea and an individual idea evaluator; thus, it differs between individuals.

Third, our findings that more familiar ideas are less likely to be devalued than unfamiliar ideas also bears on literature whereby individuals tend to reject ideas if they feel uncertain in evaluation situations [23]. Following this literature, uncertainty reduction may be a principal mechanism whereby idea familiarity leads to increased liking.

Finally, we suggest that familiarity is an underappreciated mechanism that explains some well-known phenomena. For instance, the not-invented-here syndrome [5,43] may partly be driven by a familiarity effect, since individuals are more likely to be familiar with internal than with external ideas and therefore positively inclined toward the former and biased against the latter. Also, organizational myopia leading to the lack of ability to come up with breakthrough ideas may be partly rooted in the fact that decision-makers favor familiar ideas over unfamiliar ones [44].

Implications for practice

Our study has important implications for practitioners. The bias toward familiar ideas that we have uncovered harms innovation success in organizations as it counteracts the goal to find, select, and implement highly novel ideas. Firms find it hard to overcome this bias, since it is often individual decision-makers who decide about the fate of ideas.

Based on our research, we advise that managers be more aware that they are subject to familiarity bias. It can be counteracted by putting evaluation panels in charge of particularly important decisions and by job rotation as it can offset the biasing effect of individual idea familiarity. Finally, distributed idea evaluation (e.g., internal crowdfunding [25]) is gaining in popularity as a new tool in the decision-making toolbox. It helps to overcome individual level familiarity biases, as long as subjective familiarity with an idea is differently distributed across evaluators: A more diverse group of evaluators is likely to have a broader range of familiarities with different ideas, reducing the overall bias in the decision-making process.

Viewed from a different angle, our findings also add to the toolbox of influence tactics [3], since employees can use sequences of prior exposure with ideas to convince supervisors of their ideas.

Limitations and future research

This study has several limitations, which also open up directions for future research.

First, we did not consider boundary conditions to our findings. Familiarity and subjective novelty may have differential effects depending on other key variables. That is, we would expect that familiarity’s effects may depend on the context (e.g. high vs. low uncertainty), the idea type (e.g. ideas with high vs. low collective novelty), the idea source (e.g. is the ideator inside or outside the firm), and evaluator characteristics (e.g. high vs. low openness to new experiences). Future research could benefit from investigating these contingencies.

Second, we did not measure the de facto mediating process by which idea familiarity leads to higher idea evaluation. We shed light on a number of potential candidates that may drive idea familiarity’s effects on idea evaluation, such as fluency or reduced uncertainty. We encourage researchers to be more explicit about the respective path and to identify under what conditions each path is likely to operate.

Third, we have investigated familiarity’s effects for single exposures only. For repeated exposure, familiarity’s effects may weaken or may even reverse. When we entered the quadratic term of familiarity in our factorial survey study, we found significant decreasing returns for familiarity, but the effect remained positive over the full range of responses. Future research should investigate whether this positive effect turns negative and leads to reduced evaluation for very high exposure levels.

Fourth, the field studies were conducted within a large automotive firm, which might limit the generalizability of the results to other industries and organizations. Future research should replicate the study in different industries and organization types, which will help validate the findings and increase the generalizability of the results.