More Sex is Safer Sex (and also maybe better)

More Sex is Safer Sex
The Unconventional Wisdom of Economics
Steven E. Landsburg

(Free Press, 2007, pp 274; PhP1170 at fully booked)


Expectedly, Landsburg got a lot of hate mail for the lead essay in this collection from readers who misinterpreted it as advocating promiscuity. It does not. What it does is use economic theory to argue that if responsible individuals shy away from the casual sex market, it leaves that market with a greater proportion of individuals with more risky behavior, and thus increase the risk for other people of contracting HIV.

Landsburg, who writes a popular column (Everyday Economics), is one of a few economists who believe that the world would be a much better place if the findings (and also the methods) of economics had a wider audience, and who act on that belief. He does a good job explaining these findings because he refrains from using economics jargon. He succeeds because he is a good writer, and he is a good writer because he is a clear thinker, though he falters in some instances. (Why he appreciates Scrooge).

The main reason I appreciate Landsburg is that he painstaking explains a key concept in economics without ever using the technical term (externality). As a perpetual student and practioner of environmental economics, I am often frustrated with people who don’t understand the idea, because I am a distance removed from the clear thinking of people like Landsburg.

But back to sex, which is probably why you are my accidental reader. To my knowledge, the AIDS scourge is already contained in the Philippines, but I could be wrong and the health authorities could be lying, or maybe the entrepreneurs of the sex industry here might really be more responsible. (Hey, I’m no expert on the sex industry and I’ve never had sex with a prostitute). But the main assertion in the essay holds, regardless. Certainly such ideas would raise the hackles of ‘respectable’ citizens in a morally challenged and hypocritical Catholic country such as ours. But wait, Landsburg refrains from discussing morality, but recognizes that moral values do matter.

In another essay, he could also be misinterpreted as supporting the Catholic church’s position on birth control in the essay “Be Fruitful and Multiply.” He argues that a larger world population would be good for all of us, but he doesn’t necessarily argue that governments (especially in the developing countries) should not spend tax money educating poor households on the merits of birth control and responsible parenthood).

Readers who enjoyed Freakonomics would probably enjoy this book. But they should know that there is a limit to how much economists would reveal the secrets of their profession, because after some limit, they would start to make themselves dispensable. And they would not generally want to cross that line.

The ‘more sex’ idea is not really his but that of Michael Kremer, a Harvard economist, who did the rigorous analysis and reported the results in “Integrating Behavioral Choice into Epidemiological Models of the AIDS Epidemic” in the Quarterly Journal of Economics.


I bought a copy as a wedding present for a very good friend. Books generally make for unimaginative and inappropriate wedding presents, but not in this case. My friend Ben Endriga not only is a good economist and pianist, he would also most likely enjoy reading the lead essay.

Glassner's Gospel of Food

The Gospel of Food
(Everything you think you know about food is wrong)
Barry Glassner

(Ecco, 2007, 285 pp; $25.95)


It is probable that Glassner must have had some heated exchanges with his editor and publisher over the book’s title, motivated, no doubt, to spark interest and sales. It is also possible he was a willing conspirator. Unfortunately, it does somewhat diminish his credibility on his avowed objective, which is to stimulate a critical attitude toward commonly held beliefs (and myths) about food. To promote one’s own gospel, therefore, contradicts that very aim.

Nevertheless, it is not a fatal flaw, especially if readers take the book seriously and enjoy it besides. One main beef of the author, who teaches sociology at the University of Southern California, is that the obsession with healthy eating has taken the fun out of it, and eating without enjoying, according to a study he cites, actually impedes the body’s intake of nutrients!

Since this is the first book of his that I’ve read, I cannot say whether he has a good grasp of statistical methods and thus, whether his informal surveys of clinical studies are accurate, though I must concede that some of his assertions seem intuitive. But that is precisely the problem; many findings of science run counter to intuition.

He asserts, for instance, that many studies in regard to the health benefits of specific diets (what is in and what is out of them) and other habits have ambiguous results, but he hastens to add that the ill effects of smoking are robust. That seems fairly safe as a tentative conclusion.

These days, when we are bombarded with information and conflicting claims---from the safeness of Metro Manila tap water to the alleged benefits of infant formula and virgin coconut oil---we sometimes feel helpless about how to evaluate information and when to say which is real knowledge ( and this is a recurring theme of my blogs). The only antidote to our insecurities is a critical and scientific outlook (which might also tend to increase our insecurities), regardless of how ‘post-modernist’ outlooks cast doubt on science. But we all act on the basis of what we hold to be true, which is why we don’t jump from cliffs while believing some god who loves us will protect us from the ill effects of gravity.

The book does have revelations which may be taken at face value. My favorite is one which defines natural flavoring ‘additives’, a contradiction in terms but one which is exploited by food manufacturers. The US Food and Drug Administration defines natural flavor and natural flavoring as meaning that:

“the essential oil oleoresin, essence or extractive, protein hydrolysate, distillate, or any [product of roasting,heating or enzymolysis, which contains the flavoring constituents derived from a spice, fruit or fruit jiuce, vegetable or vegetable juice, edible yeast, herb, bark, bud, root, leaf or similar plant material, meat, seafood, poultry, eggs, dairy products, or fermentation products thereof, whose significant function in food is flavoring rather than nutritional.”


And yet, we pay so much at the supermarket when we read “natural”!

I learned about Glassner’s book from Michael Shermer’s column (The Skeptic) in Scientific American earlier this year and my brother Bobby was kind enough to buy and send me a copy.

Read, drink, and enjoy. That is one point that’s difficult to argue with, unless you are a firm believer in the gospel of abstention.

Milking the breasts

I really hate to milk the issue but the controversy over government regulatory power over commercial interests in regard to the Milk Code does trigger paranoia over which of the sides enjoyed longer breast feeding during childhood. Don’t get me wrong. I have always been a great admirer of breasts and the nutritional value these have been proven to produce, though I am open to the possible criticism, especially from the likes of Peter Wallace, that I was deprived of the nutrients at the formative stages of my life.

Raul C. Pangalangan dealt with the fundamental legal issues in his column in Friday’s issue of the Philippine Daily Inquirer (June 22). Perhaps I had enough of my mother’s milk to judge that his arguments were generally cogent. Since I am not a lawyer and since I generally hate lawyers, let me move on to the other important issues.

The infant formula companies say they are only protecting free speech rights and thus the right of citizens to information (oops, this I also parrot from Pangalangan’s version of the issue; however his is consistent with the version of Solita Monsod’s, in her column, also in the PDI, June 16.

First of all, let me say that the advertising that is sought to be banned or regulated benefits not only the cause of the advertisers but also the media of advertising. Which is why I do appreciate the efforts of the local media ( the PDI and ANC) to present a balanced picture.

As an example, yesterday I chanced upon the episode of Korina____(I don’t really know how the program is called; all I remember is that it goes by some title and teasers like ‘flavors of the month’ which makes you wonder if the program producers were breast-fed themselves; but I digress).

The first part of the program featured the side of government and non-government organizations promoting infant and mother health. The second part guested Wallace and the lawyer for the infant formula companies. The conlcuding portion presented a lawyer for the UNICEF. Fairly balanced except that there were questions of fact the producers could have resolved by themselves. Well, we can always blame that on lack of time of resources. But that is exactly the point. How do most of us get information? And how do we know which if the so-called claims are right? And we feel we get ‘information’ overloead, are we really equipped to evaluate conflicting claims?

Citizens elect governments partly to help them evaluate all sorts of claims they themselves have no time to validate because validating information, while useful, has benefits less than the cost of doing so. Which is why communities need to cooperate in regard to common problems.

Having worked on issues on energy and the environment for almost three decades, the issue at hand has consequences way beyond the issue of milk, which I milk for other ends.

I will write about these at a later date, but let me give you a preview. How do we address climate change? Is it a problem at all? Should we believe all that the ‘scientists’ and lawyers say? Now in another age of other stupendous claims on additives and biofuels, I believe the problem of information vetting persists. Doesn’t every claim somehow mask a ‘vested’ interest?

Way back during the time of martial law, one of the first edicts of the dictatorship was to ban claims about fuel additives, later to be proven to be mostly unfounded. The overthrow of the dictator brought us to another end of the extreme. Where are we now?

Problem Solved!

Missing Maguindanao certificates of canvass found
By JAMES MANANGHAYA
The Philippine Star


Who will give Mr. James Mananghaya a reward and what does he intend to do with these documents?

energy self-reliance(2)

After that brief critique of Dr. Viray’s review of Geronimo Velasco’s book, I’ve decided to write more on energy self-reliance. This time it’s coal.

Back in 1993 when I attended some discussions on the further lifting of quantitative restrictions and the lowering of tariffs for coal, the spokesmen for the local coal industry, as expected, presented the local industry as a champion of its workers. In diplomatic language, I would point out that local coal workers actually were not only underpaid but also faced very hazardous working conditions. Suffice it to say that coal mine explosions were not rare, especially in Cebu mines controlled by a northern warlord. How diplomatic could one be in saying such arguments were shameless.

The other argument was energy security. In a paper I wrote for an NGO (Alternative Forum for Research in Mindanao) also in 1993, on the Apo geothermal development where I looked at the comparative air pollution impacts of the power options for Mindanao and the country, I argued that we could always close local coal mines but make provisions for reopening them when the need arose. That was because, at the time, the tariff protection for the industry was so high and was more than sufficient to make local coal workers rich and also to substantially lower costs for the coal plants at the time. The paper’s assertions were supported with calculations using data from the NPC itself.

Perhaps nowadays, local coal may have improved its position vis-avis imported coal because of some simple technological developments and the rising price of crude oil, but I think the arguments I made are still relevant.

When will Jon Stewart quit?

Watching Jon Stewart sometimes is one of the high points of my day, partly because he refuses to move on and persists in exposing the international scandal that is Iraq, and also because his irreverence is almost limitless--- though I must admit I cannot possibly be sure of that.

One other reason is that he features many thought-provoking authors (especially agnostics, skeptics, and atheists). The most recent was Allan Brandt (The Cigarette Century) who was especially relevant for me because I’m trying to stop for the nth time. I had not known that the number of smokers continues to grow even with the declining numbers in the United States and Europe. And that is because there is still a mine to be gold-mined, the developing world, especially China and India. (Shame on the members of the Philippine House of Representatives who watered down the law meant to increase cigaret taxes three years ago.)

I had almost succeeded in quitting and had been off for more than two months in 1997 if not for a phone conversation I had with the chair of the Energy Regulatory Board at the time over the phaseout of the Oil Price Stabilization Fund as part of the Oil Deregulation law. He was so exasperating I lit one cigaret and a pack three hours after we hung up. As I had been on nicotine gum, my heart started to palpitate and my neighbor volunteered to bring me to a hospital. Luckily my blood pressure stabilized but I continued to be an addict.

The other episode I saw recently was the one where Stewart criticized the media for its mindless coverage of Paris Hilton, when CNN ‘felt’ it had to cut away from a press conference with US defense secretary Gates and joint chiefs chair Pace just to cover Paris’s trip back to prison. Stewart characterized the frenzy as similar to the Black Nazarene procession in Quiapo, Manila. Paris was the Nazarene, he said.

Energy Self Reliance: Viray vs. Velasco

It was with keen interest that I read Dr. Francisco Viray’s review/critique of Mr. Geronimo Velasco’s most recent book on the quest for ‘energy self-reliance’. I must confess I haven’t yet read this book; but I’ve read a much earlier tome by the same author and on the same theme published in the late 70’s.

Viray’s critique---for that is how it should be called---highlights the recurring theme of the proper role of the state in the energy sector, and for that matter, in ‘leading’ sectors of the economy. The quotation marks are motivated by an appreciation of the fact that people tend to think that their sector is always major or leading.

Let me say now that I think that there are major points that Viray really misses. Unfortunately. But let me say too that Velasco’s so-called insights are drivel.

(Allow me this long parenthetical note. Just recently, an analytical report emanating from the Department of Budget and Management urged an urgent review of the Department of Agriculture’s food security objective, saying it was too costly and more to the point, misdirected. It is a point I agree with generally for I have yet to see any evidence that the subsidies really benefit rice farmers and that the tariff protection did not serve only to benefit favored rice importers.

Insofaras the energy sector is concerned, I was really surprised that during a lecture I was privileged to attend, the prominent American energy economist William Hogan made the case that energy should, in the main, be treated as just another commodity for which all social costs should be reflected. He was lamenting the fact that the United States government (or more precisely all American taxpayers) was paying for a very expensive political and defense policy, especially in the Middle East, for which the cost was distributed in a way which did not actually reflect consumption. Think about the war in Iraq! In effect, a private good was being treated as a public good. If the objective were only to address temporary shocks or supply disruptions, one could rely on the Strategic Petroleum Reserve, and charge inventory costs to taxpayers, said.

In his critique, Viray expresses agreement with the objective of ‘self-reliance’ but protests ‘political intervention’ in the affairs of government corporations in the energy sector. Is he saying that the state should give the corporations and the managers the resources and then leave them to their own devices? I think not, for Viray is too intelligent not to know about general political direction and accountability. Mysteriously, Viray speaks of a political context or environment and seems to say that experts (so-called) are always constrained by democratic principles. (I protest dictatorship only if I am not the dictator).

But let us first tackle ‘self-reliance,’ an objective with which he is in agreement with Velasco. Former experts at the corporate planning department of the National Power Corporation and other Philippine energy researchers will surely tell us that this objective is not without costs. Hydro, geothermal, local coal, natural gas etc. are not really the cheapest sources of electric power in any line-up of options. In other words, the objective has imposed and still imposes a cost in addition to lower cost options. I would have no problem with that for as long as these additional costs are properly explained and decided on in the political arena.

Of course, there is a sense in which I am totally in agreement with Dr. Viray. And that is if ‘political’ exclusively meant intervention in the day-to-day management of government corporations in the energy sector and in total disregard of performance and professional management principles. Even Velasco cannot disagree with that but...

Viray quotes Velasco on the fact he (Velasco) was forced to diminish protection for the local coal industry because of the structural adjustment program impositions, mainly of the World Bank and the IMF. As a persistent socialist and qualified nationalist, I would be among the first to protest multilateral impositions; but not when these are essentially correct. I can protest the fact of the imposition but defend its essence. It is a matter of integrity. I can say the ‘enemy’ is absolutely correct in some regard.

Who am I to write all of the above? (Read on).

A year after graduating from the University of San Carlos with a degree in chemical engineering, I joined the National Power Corporation as a chemical analyst for one of the first two power (diesel) barges in the Philippines, anchored in Cebu, in 1991. At the time Secretary Velasco was considered as a god of sorts. We had had training for almost a month when his chopper landed on the premises in Naga just as a super-barge unloaded the power barge straight from Japan.

In the same year I was hailed to the Visayas regional security office of NPC for having spoken at a rally against the notorious Amendment 6, which eventually allowed the dictator to rule by decree even after he had allowed the election of a national assembly in 1978. My interrogator was menacing and a real menace.

In my very short period with the NPC, where I was also assigned to the fuels laboratory serving the first NPC coal power plants (from Romania) I was exposed to all the corruption in procurement. I and another engineer were asked to sign an acceptance report for a hypochlorination plant for the cooling water requirements of the coal plant. We both refused.

Which brings me to this point. How can we assess people like Velasco, who continue to assert virtue?


Later, I joined the Ministry of Energy with the encouragement of someone who had been with the old communist party (but who had been expelled) as still a lowly bureaucrat with the Bureau of Energy Utilization in the Visayas.

In the same year, I was invited by the National Intelligence Security Agency (NISA) for a ‘meeting’ which was actually an interrogation. The agents showed me pictures of protest demonstrations and asked me to explain. At the same time, in the same compound, my girlfriend who happened to work in the same office was also being interrogated in the same compound. Her interrogator was opposite her on a swing, ‘persuaiding’ her to inform on me.

I am sure many Filipinos have similar stories. What should make them special is the willingness and capacity to tell us these now so we will not Velasco and others who came after him escape an accounting.

What follows is Viray's review of Velasco's new book.


It is a dilemma to critique a book authored by someone I worked for and admire as a person but with whom I disagreed with in major policy decisions during my term as Secretary of Energy under the Ramos administration. I can either end up defending myself—which will be construed as a biased critique—or avoid a debate on policy decisions by simply citing the differences in governance during his time and my time. However, such simplistic review would ignore the significance of the management approach and policies that helped the accomplishments cited in the book, which I completely agree with. Not because I worked for the author for some time, but because I was very much involved in the energy industry during my academic career at the University of the Philippines during the Marcos administration.

The book is a good treatise on how to manage government corporations, most especially in the energy industry, which is critical to the life of a country’s economy and the well being of its citizens. The story on Philippine National Oil Company (PNOC), Petron, and National Power Corporation (Napocor) showed that the state has to insulate from political intervention the energy industry’s government corporations if it wants them to accomplish their mission in the interest of national security and price affordability, and if it wants corporations to act as catalyst to support policies on energy development and management. The admission of the author that he would not have done the things he had done without Martial Law attests to this statement (48, 78). He can even get away with so-called anomalous Memorandum of Agreements (141) at the time. Moreover, the success of Petron from which the author inherited personnel with a private culture of efficiency and merit-based recognition compared to the lesser success of Napocor, which was a government corporation from the start, is another testament (140-41).

While I agree that the best way to influence the behavior of players in the market is for government to play a significant role through a full ownership of Petron and Napocor, such role can only be played if it is allowed to be run professionally and freed from political intervention and removed from the rules and regulations of government hiring, salary structures, procurement procedures, and the like (17-19, 205). Note: A lot of good people at Napocor left when it was placed under the Salary Standardization Law of the government.
The mere fact that when the Department of Energy was reinstituted in 1992, Congress inserted a provision whereby the budget of PNOC and Napocor had to be approved by Congress proves that insulating energy corporations from political intervention is easier said than done. Imagine Petron’s budget passing through Congress, its crude oil procurement done through government bidding procedures (19), or Petron being asked by government to subsidize oil prices during periods of crude oil increase just like what was mandated for Napocor. Under our version of a democracy and its resultant political environment, Petron will be bankrupt by now and will thus fail in its obligation that the author stated: “It [Petron] was the most profitable government corporation and thus a valuable source of revenues for government. More important, Petron performed a unique role in stabilizing local oil prices” (177). The author recognized that he could not have insulated Petron from political intervention and government rules and regulations if it were not for Martial Law (29).

I submit that the privatization of Petron and the oil deregulation law are the right policies under the current political environment, but I agree with the author that the government must strengthen its regulatory powers and exercise it to the fullest. Deregulation does not mean no regulation but re-regulation. For starters, one advantage of deregulation would be that all service stations, not only of Petron, would have clean toilets (168).

Congress needs to pass an anti-trust law so that it can strengthen its regulatory mandate in liberalized and deregulated markets. Even if the government has only a 40 percent share in Petron, this can still be used as a policy instrument and exert influence in pricing. However, government would need political savvy in addition to management acumen.

The author admits that during his term, everybody followed Petron when it set the price (194). The same happens in a deregulated environment: Everybody follows the lowest price setter, hence the “same price” situation still prevails, but that same price is the lowest price set by the most efficient. While one is always free to accuse the foreign companies of collusion, I do not think that Petron is a party even with Saudi Aramco as a foreign partner. Otherwise, government itself, which has equal vote in the board, will be a party to a cartel, which it wants to prevent—an irony in its highest degree. The privatization model of Petron achieves the twin objectives of insulating it from political intervention and performing its role as “a potent policy instrument” vis-à-vis major oil industry players.

To be able to perform its role well, Petron had to be financially stable, efficient, and able to compete; but this is possible only if it is insulated from political intervention. Given the current political climate, its privatization, with government retaining 40 percent and the public 20 percent, is the best decision that was made by the Ramos administration.

Likewise, the Philippine Electric Power Industry Reform Act (EPIRA), for all its shortcomings, is a step in the right direction. The government has no money to put into the required expansion program of the power sector, and with political intervention Napocor cannot generate its cash counterpart requirements for the projects (136). Lower interest loans are offset by inefficiency and political interference. EPIRA is a developmental process and the issue of cross-ownership prohibition must come at the right time. For this, government must be constantly at attention to monitor developments on monopolistic behavior. National Transmission Corporation, for instance, must be privatized like the Petron model. It must not be entrusted completely in the hands of the private sector, even in a concessionaire model of privatization.

The author failed to mention that our independent power producer contracts are, in reality, not IPP contracts in the strictest sense, but are Build-Operate-Transfer contracts (a policy embodied in Republic Act [RA] 6957 and RA 7718) wherein the assets will be transferred to the Napocor after the cooperation period. As such, the payments made due to the “take-or-pay” contract, whether used or not, are payments for the capital assets and not for unused fuel or coal because Napocor supplies the fuel. Note that the author’s word is “whether or not the organization needed” (155) instead of used, to which I disagree with because at the time the take-or-pay volume were contracted out, they were based on forecast and therefore were “needed” in the future as forecasted at that time. Unlike a straightforward IPP, the facilities are not transferred to the buying party. So in the BOT projects, payments made if the plants are not used is not wasted because the assets will eventually be owned by Napocor.

Lastly, to say that the post-Marcos administration did not have a comprehensive energy development plan is a sweeping statement. I would like to take exception for the Ramos administration for which I was the Secretary of Energy from September 1994. In fact, the plans and programs of the Ramos administration were built on the achievements mentioned in the book; and the policies, objectives, and basic thrusts were basically maintained (208). Policies on the development of indigenous energy resources and renewable energy and energy conservation were continued. We pursued the implementation of the Malampaya natural gas project, which has enhanced our energy security and independence. We left behind an ocean, solar, and wind pole-vaulting program, which is geared toward developing renewable energy. We had the very successful Power Patrol Project, which involved the participation of the private sector to support the energy conservation policy.

The policy on deregulation and liberalization of the oil and power industry are policies called for in this current form of political governance. Liberalization is not an invention of post-Marcos administrations because as the author wrote, “In 1984, as the country implemented the International Monetary Fund’s structural adjustment program, we [the Marcos administration] had to allow market forces to operate in the coal industry” (65-66). Moreover, the Ramos administration left behind a thirty-five-year Energy Development Plan (1998-2035), which takes off from the accomplishments cited in the book and those done during the Ramos administration.

The Filipino people are now enjoying the fruits of the labor of the author in our quest for energy self-reliance, most especially the geothermal and hydropower development. But while he does not agree with the privatization of Petron, we must realize that Petron’s privatization was successful because it was nurtured and managed well to become a very profitable company during the Marcos administration. While we have yet to see the benefits of the EPIRA, it is too early to pass judgment on policy decisions of post-Marcos administrations on the power sector. Suffice it to say that I agree with the author that the success of deregulating a very critical industry, like oil and power, is a strengthened, responsive, and well-administered regulatory environment. The challenge that lies ahead of us is to be able to duplicate the achievements told in the book in our own version of democracy in which political intervention, not only by the politicians but also by those with self-interests from the private sector and nongovernment organizations, is a commonplace.—Francisco L. Viray, President, Trans-Asia Power Generation Corporation

Lomborg and Climate Change

I’ve found the arguments of Bjorn Lomborg on climate change appealing for sometime but was somehow still uncomfortable with them. For one thing, I agree that the money that could be spent to address the climate problem could be better spent on some other world problems if the first criterion was saving lives wherever in the world. That seems obvious to me.

However, he might miss the point that the primary objective of environmental policy---at least for economists--- is to make polluters pay for the consequences of their actions.

In this regard, I have yet to see any proof or articulation of a tentative proof from B. Lomborg that there will be any correspondence between the responsibiity for GHG emissions and responsibiity for the other priorities. In other words, he seems to think that the funds to address the climate change problem can be raised in the same way that these can be raised in addressing perhaps more important problems.

For me, these are really different but interrelated issues.

It also seems to me that the Lomborg position is based on aid from the developed countries to the other countries, which should not be the case. This should not be a matter of generosity but fairness, especially since the developed countries are responsible for most of the current stock of greenhouse gases.