Brian Finn from Brazil, July 16

16Jul10
Mining and the Environment I: Age of Empires I and the history of Metals

Anyone who has played Age of Empires knows that Ancient Civilizations were defined not by the poetry they wrote but by how good they were at manipulating metals. Civilization advancement occurred by how you progressed in this respect.

Civilizations in the video game and in history started in the Stone Age. In this age, man is using stone objects for various tools and building equipment. This Age has different dates for different areas of the world. Some areas of sub-Saharan Africa, Oceana and much of the Americas never left the Stone Age phase prior to being “discovered” by Europeans.

Those that did advance, advanced to the Copper Age. This age was marked by the realization that stones were composed of different metal elements and it was possible to find or mine for those particular elements. In other words, rather then just finding a rock, you would look for Copper rock because it had certain properties you wanted.

After the Copper came the Bronze Age, in which people figured out that not only different singular elements existed but through the use of a furnace you could forge elements together. You could mix Copper and Zinc together to create a new alloy, which had even better properties than Copper for certain purposes. Your swords became that much stronger and lighter and able to kill guys quicker. In Age of Empires, one Bronze Age soldiers can pretty much take out a whole army of Stone Age warriors.

We are now in the Information Age. At this point we have completely forgotten the role that our mastery of metals played in getting us to this point.  However, at the end of the day, metals underline everything about this current age. From our silicon chips to our copper wires to the palladium we use in our atennas, without these metal sources we would be done.

We have forgotten that but the Chinese haven’t. They have made a point of going to places like Africa and developing their metal resources. They have bought billions of dollars of assets in Australia and South America. As for their own metal resources, they guard them jealously. You are basically not allowed to export rare earth metals from China – metals we need for a lot of our advanced military weaponry. Chinese zealous exploitation of metals across the world will at some point catch the attention of our great political leaders.

At some point in the future, a war will be fought not over religion or high minded political philosophies like communism but it will be fought for the basest most common thing a man needs to build his kingdom, rocks.

Mining and the Environment II: Why Large Corporate Sanctioned Destruction of the Rainforest is Good For the Rainforest

When I visited the mine in the Amazon, I saw whole rainforests utterly destroyed and wiped off the face of the planet so that all that was left was red dirt and trucks. I saw destruction of the natural environment that would shake even a complete cynic – destruction that would probably make James Cameron cry. However, the paradox of all this was that these seemingly horrific scenes of destruction are actually the Amazon’s best hope of long-term survival.

It might take a while to get your head around this paradox. How could a mining company destroying acres of rainforest to make way for a mine be good in the long run for the environment? It sounds like something a radical conservative would say but give me a few sentences to explain.

It is a basic fact of life that people need to earn a living and will do what they can with the options given them to do so.  If you’re a young man in the Amazon, your options are fairly limited. Your only option is often to work in the ranching or farming business, which means that you burn down forests to make way for cattle and crops. The “slash and burn” method is fairly crude and the cost to the environment is extreme – You burn, graze and then burn again, moving from forest to forest. Although it is often illegal, if the authorities catch you and fine you, you are too poor for them to force you to pay up. The authorities can tell you to stop but at the end of the day, getting you and your children fed is more important.

If you want to stop him from doing it, you just have to give him better options. If that person has an option to work in a mine where he gets paid more and receives health care coverage, he will gladly take it and he will quit his old slash and burn job. Now the mining company also does destroy the environment too but there is a major difference between the way the mining company works and the way the small time rancher works.

The mining company is a large often publically traded company and as such is exposed to lawsuits. If the mining company screws up and you sue them and you win, then they pay up. If the mining company does anything that you view to be out of the ordinary, you refuse him his permits or you shut down his operations. Unlike the small farmer and rancher who can quietly tell you to fuck off while he goes on with his livelihood, this mining company has to work with the government. The government gets to say how he uses the environment.

Given that governments have leverage over mining companies and not over farmers or ranchers, there are a number of rules that govern how mining companies operate and mining companies abide by these rules. The mines are required by law to return the environment back to the way it was prior to their arrival. They have to replace all topsoil and replant the seeds and trees. They have to essentially leave the place the way they found it.

The fact is that they do it and do a pretty good job for the most part. As terrible as the destruction looks, it is only temporary. The reforested areas look more or less like they had never been touched. It takes a while but things do grow back. I saw both the destruction and the re-growth.

Mining and the Environment III: Rewriting Avatar

Avatar was a brilliant movie for its technical effects but if it was trying to be an allegory for the destruction of the rainforest, which I think it was trying to do, it couldn’t have been more off base. As I explained before, large law abiding mining companies are better for the environment then the other economic alternatives.

If you really wanted to write the script of Avatar right to reflect what really happens in the rainforest, you would depict the Navi, the natives, as honorable poor folks trying to make a meager living by clearing out sections of the rainforest. The big mining company would be a behemoth that takes those people out of their jobs that devastate the environment and into mining jobs that have a substantially better relative effect on the environment, both in the sense that it causes less long term ecological harm and provides higher economic benefits.

But still who would want to hear a story that demonizes the poor natives? After all, how can you blame them for doing what they need to do to survive and improve their lives? Who are you to say that they can´t cut down trees so their family can afford a better living standard? You really have no right to tell people that. At the same time though, if you really want to examine what populations, parts of the world are causing the marginal damage that is really straining the environment it is the areas that have massively growing populations of poor people. It is the Chinas, Indonesias, Brazils and Indias of the world. Those are the countries that are seeing their resources strained to the limit. The strain is not coming from big businesses like Exxon Mobile but from small time operators, basically small ranchers and farmers and businessman. Guys who are trying to make a buck any way and are not following any guidelines. If you can get those guys employed by big businesses that are under the regulatory control over the government you would solve a lot of the world´s environmental problems.

Rio Part I: Flavella Economics

People like to pretend that flavellas don´t have laws. They do have laws. Just the laws are not handed down by some democratically elected legislative body or by the mayors office. The laws come from the strongest drug dealer. The first and most important law is to put your client first. That means that contrary to what you might think if I went into a flavella, I would actually be the safest person there. It would be assumed that as a gringo looking guy I would be there to buy drugs. No kid would touch me or they would be hurting their bosses business.

You might think that it makes sense for them to kidnap me? After all a random wealthy Brazilian looking to buy drugs might only bring a few hundred dollars to the community but a kidnapped Brazililan would bring multiples more. I asked that question to my friend and he told me that while kidnapping might make short term sense it crushes the long term value of the business. If word of the kidnapping got it, it would hurt the drug dealer´s brand. It would be as intelligent as running an airline and purposefully crashing an old airplane to get the insurance money. Maybe you make some money but no one would fly your airline anymore (you´d probably also go to jail). If you let clients get robbed or kidnapped in your flavella, no one would go there to buy drugs anymore.

That is not to say that these slum lords are not into the kidnapping business. It is still a very lucrative business and they recognize the huge potential of one off gains from it. They just choose to seperate the two enterprises – the drug dealing and the kidnapping. They don´t let the kidnapping business screw up the brand image of their drug dealing business so they conduct all the kidnappings outside of the flavellas. The most dangerous place for me in Rio is the area in between the flavellas and the beaches. It is kind of like a big multinational owning both a tobacco business and a health food company. You don´t want the ciggarrete business to tarnish the brand image of the health food company so you keep them walled off in seperate subsidiaries.

For the most part the flavella drug businesses can run as a well oiled machine as long as the guy in charge is firmly in charge. However, given the inherent volatility of running a drug/kidnapping/exportion operation, no one´s power position is that stable for all that long. Guys are constantly getting replaced. When a power struggle arrises thats when the mattresses hit the wall and the body count rises. It is one thing to have an intra-flavella power struggle. It is another thing when the outside world – the city and state governments – try to impose their power.

While it rarely happes, when it does happen things get wierd. That is when it really bleeds into the streets into middle class and upper class neighborhoods. Last year, after a large scale attempt to wipe out one of the flavella gangs, the gang responded by sending a truck full of guys with machine guns who sprayed the mayor´s palace with bullets and RPGed a police helicopter.

Its sad to say but you are better off letting sleeping dogs lie.

Rio Part II: The Time Machine

Every time I go to Rio I am reminded of the book The Time Machine by HG Wells. HG Wells describes some future society where you have a group called the Elois who are happy, pretty people living in an idyllic life above ground. They live their life of leasure based on the hard work of the Morlocks who live below ground. The Morlocks grunt and sweat under a weary life. Unlike the Elois who are naïve and dumb, the Morlocks are intelligent. Occasionally the Morlocks will come up and eat one of the Elois. Both groups are terrified of one another.

In Rio, I have been to a club and seen some incredibly happy, good looking well off people living better than 99% of all Americans. I remember one time noticing just how happy and prosperous these people looked in contrast to the guys hustling around, trying to clean up the bottle service.  I am sure the workers at the club were not getting paid a whole lot and some of them were likely heading back to the flavellas. Meanwhile the wealthy Brazilians were going home tonight in armored vehicles always conscious in the back of their mind that a distant relative of the guy who was cleaning up his bottle service could try to rob him.

It is a unique dynamic and it is not one that is common only to Brazil but to many Latin American countries and other emerging market countries. In Brazil, the income inequality is actually going down – unlike many African and Asian countries where it is going up. The one thing you do notice is that everyone aware of this issue. The people I have gotten to know here don´t think that the income inequality is good even if they are part of the small very successful percentage of the population that benefits. They too would like to see it go down. If not out of their own altruistic sense of social justice then because they would like to live in a safer world, a world where they don´t have to drive around in armored cars

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