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Urban DecayedEconomics of an Apocalypse
Who am I?
Michael Taillard, PhD MBA– Education
• PhD Financial Economics• MBA Int’l Finance, & Int’l Management• BSci Int’l Economics, AA Bus. Admin• Army Trade Certificate Logistics Management
– Experience• Economics Professor at Universities Around the
World• Economic Consultant for Global Companies,
Government Agencies, and Non-Profits• Researcher Specializing in Behavioral Strategy• Multiple-Published Author• Media Personality and Public Speaker
Scientific Method
• Apply the scientific method to the study of zombie outbreaks
• Experiments and theoretical exercises improve our understanding of the sciences
• Valuable in furthering our knowledge of how any widespread destructive event will impact our lives– Natural disasters, disease pandemics,
war, zombies, etc.
• FUN!
Scientific Method• Ceteris Paribus
– Translation: All other things remaining equal
– Allows us to isolate variables to measure cause and effect
– Zombies do not exist making functional experiments impossible
– Use existing information to measure individual variables and infer implications
Economics
• The study of how humans distribute a limited number of resources
• Includes a wide array of subjects- Business operations - Healthcare- Finance - Migration- Trade - Environment- Governments - Behavior- Agriculture - And More
Zombies
• Dead or otherwise soulless human bodies that actively pursue other humans– Typically have intent to harm other
humans– May be result of any number of
causes:• Voodoo, witchcraft, or other mysticism• Astronomical radiation• Biological or chemical weapons• Infectious disease• Parasitic Infections
Resident Evil®
• Zombies not interested in economics• Only resource of value is human
flesh• Relentlessly seeks out this resource
without concern for distribution or rationing
• With no mediating variables they will soon exhaust their food source and starve themselves to an minute pop.
Scarcity of Human Flesh
• Models zombie infection using pandemic modeling
S=susceptible people; Z=zombies; R=removed (dead)π=Starting population; β=Infected humanα=killed zombie; ζ=reanimated dead; δ=killed human
• We use it as a population growth model for the zombie population
Epidemiology
Philip Munz, et al., 2009, p.136
• Most accurate estimates show survival of a very small percentage of humans
• Other estimates show total human annihilation
• Model assumes human-zombie interaction will be consistent and inevitable
• As with disease, outliers will exist to skewed results, geographically– High: Infection from sources other than zombie contact– Low: Infection resistance/immunity; isolated geography
Epidemiology
Health Economics
• Studies the availability, efficiency, efficacy, and behaviors of healthcare in a region
•Zombies will reduce the efficacy and availability of healthcare
•Physicians more urgently needed over wide areas
• Assume an inability to predict source of original infection – Leaves no chance for preparation or prevention– General increase in hygiene and safety limits potential
for speed and scope of infection
• Models show disease will spread too fast to create a cure in time to stop pandemic-level infections
• Kill the infected as soon as possible, preferably using means that won’t waste supplies
• Focus only on treating the living
Efficacy
• Institutional Medicine Unavailable• Necessary Return of Wandering Doctors
– Called Chakara in Buddhism– Regular practice in the Pre-Hippocratic Period– Currently common in areas without proper availability
Availability
Doctors Without Borders
Economic Geography
• The study of the distribution, movement, and spatial activities of resources
• Introduction of zombies:– Alters the movement of assets– Disrupts the organic processes that influence
movement– Reverses trade gravity and related activities
for something like “trade anti-gravity”– Causes capital flight and brain drain to create
“economic jet lag” through dispersion and inefficient utilization of assets and skills
Reverse Urbanization
• Highly populated areas have highest risk– More total survivors but higher ratio
of infection and death– The flu never chased your ass
through the streets - hand sanitizer won’t help
– Zombies don’t require ready access to conveniences or each other causing increased dispersion and urban sprawl
Reverse Urbanization• Low population areas have lowest
risk– Low population density results in lower
rate of infection– Zombie likely to starve or get hit by
truck before finding food
Arkaroola, Australia
Reverse Urbanization• Survivors move from cities to rural
regions– Minimize risk of zombie attack– Closer to source of new food as
scavenged food goes bad– Some resourceful people may find a
way to survive in regions inaccessible to the infected
Trade Anti-gravity• People and production move away from
urban to rural areas• Large cities will repel trade due to high
risk and low availability of primary resources
• Economic Jetlag leaves cities drained after flight– Capital Flight: Capital repelled from cities– Brain Drain: Skilled labor repelled from cities
F = -exp[βo+β1ln(M)-β3ln(D)]η
F=trade; M=GDP; D=Distance; n=error expectation
Agricultural Economics
• Studies food production, distribution, land usage, and related variables
• Introduction of zombies may create infected food by contaminating water used to hydrate crops through physical contact
• Assuming no infection of plant, soil, water, or animal, all agricultural production systems should be left in working condition
• Damaged only to the extent that farm workers are exposed to infection
• Already noted that these regions at less risk than average
• Production infrastructure still intact and working properly (i.e.: land, seeds, and water undamaged)
• Framework for human survival available
Producing Produce
Fertile land; No Distribution
• Focus on foods which are nutrient-dense and have low input/output ratios
• Learn how crop rotation works• Stay healthy & keep your energy high;
long-term nutrition requires planningGrain: Veg: Fruit: Dairy:
5oz/day 2cup/day 1.5cup/day 3cup/day150oz/month 60cup/month 45cup/month 90cup/month1825oz/year 730cup/year 547cup/year 1095cup/year
Protein: Fats/Oils: Water: Note:5oz/day 5tsp/day 8cup/day All values per person150oz/month 150tsp/month 240cup/month1825oz/year 1825tsp/year 2920cup/year
• Fridgeless Preservation methods:• Dry, jar, pickle, smoke, salt, ferment
Producing Produce
• No properly available utilities or infrastructure to distribute agricultural goods to population in urban or rural regions– Destroyed by zombie attack, lack of
maintenance, or natural causes
• Access to agriculture available only to those in immediate area
• Rural areas see higher long-term survival rates with growth and attract others
Dysfunctional Distribution
Trade Theory
• Studies the process of exchanges between individuals and groups of people – Includes influence on/impact of exchanges
• Introduction of zombies will segment trade to a patchwork of very small groups– Fewer people, higher risk, poor transportation– Caravans and towns will replace nations– Neighboring towns could create trade
agreements to form blocs
• All trade starts with surplus agriculture and food supply– Farmers grow more than they need
and trade surplus for other services– Makes urbanites with no agricultural
experience useful and offers hope of survival for others
• Maintain a small degree of separation of labor– e.g.: Farmers produce food for
everyone while others work to build fortifications against zombie attack
A Growing Economy
Skill Diversification• Each person takes on more
roles– Many roles of the supply
chain; vertical diversification– Described by Adam Smith in
“The Wealth of Nations”
• Examples:– Carpenter:
• Tool maker, Lumberman, Stone Cutter, Architect, Builder, Mason, Handyman
– Textile Maker:• Fiber cultivator, carder, tapestry
maker, tailor, cobbler, designer
• People must develop a generalized set of skills– Learn many trades to be self-reliant and
useful; horizontal diversification– Fewer people reduces potential for trade and
skill specialization
• All people must be soldiers first– Able and ready to fight off attacks of zombies
Skill Diversification
Farming Tailoring Security
Fishing Sewing Smithing
Carpentry Weaving Mining
Masonry Bowyer Sanitation
Husbandry Veterinary Cooking
Baking Medical Teaching
Preserving Fletcher Tanning
Brewing Hunting Spinning
Butchery Botony Midwife
Cobbling Economics Milling
Critical Skill Sets
Microeconomics
• Studies the decisions of individuals and firms when allocating limited resources
• Production schedules will be indirectly altered through functional and seasonal limitations
• Zombies can’t have a direct impact on microeconomic fundamentals ?
“Micro… what!?”
Production Schedules• Constant Production
– Output produced at a constant rate – No rationing required– Price will remain relatively constant– Some primary sector goods
• Stone, lumber, water, etc.
– More secondary sector goods• Metal goods, rope, preserves, textiles, etc.
– Most tertiary sector goods• Education, sanitation, cooks, security, etc.
Production SchedulesSeasonal Production
Seasonal variations in supply and demand will have a much bigger role. Demand for weather-specific products will go up, and supply will vary with seasonal product potential
Food is especially subject to seasonal variations as plants and game vary during the year
Production Schedules• Goods that can no
longer be produced– Industrial supplies and
high technology– Must be rationed
carefully– Ammo of particular
rationing concern
– Value continuously goes up over time as supply is depleted
• Apply oil politics to Twinkies
Commodities Investor
Woody Harrelson in Zombieland
Financial Economics
• Studies the role of money and other money-measured assets in exchanges and agreements
• Money is a physical representation of the value of goods and services owed to the owner as a result of having produced and given away something else of value
• Introduction of zombies will leave money nearly useless but not more so than any other type of apocalypse
• Money loses usefulness– Low total availability of production
means that your skills must be needed by those whom you wish to solicit
– No competition means no standardization of value
– The value of each service in the exchange must be negotiated in advance
– The value placed on a service is measured in terms of other services
Barter Systems
• Possibility for isolated use within individual communities– Must be enough people and competition within
the community to make money a viable means of exchanging value
– Monetary value an arbitrary measure and not likely to translate properly outside the community
– Salt, spices, & silk likely to be used as currency alternatives
– Dollar bills only as useful as the material they are printed on
Money
Macroeconomics
• Studies the behavior of production and distribution of assets across the entire population of a particular group or region
• End of large, organized governments and reduced importance of money eliminates all normal policy development
• Small, local control with strict concern for increasing production will prevail
• Governments composed of community leaders– Manage small, self-sustaining
communities of several people or families
• More involved role in managing resources– Focus on ensuring adequate
production to ration during the winter or during zombie swarms
Managing Resources
• Monetary policy– No money means no monetary policy
• Fiscal policy– Units of production stored vs. rationed;
same mechanism as taxation and expenditure
– Bartering without money makes long-term measures difficult
• Option1: Standardized system• Option 2: Trust your customers during
crisis
Monetary and Fiscal Policy
• Inflation– Low demand-pull
inflation– Production needs
determined by ration requirements
– Still possible through cost-push influence
– SRPC will resemble LRPC
Monetary and Fiscal Policy•Employment
-Employment will remain at 100%- High production demand with scarce labor markets
Energy Economics
• Studies sources and utilization of energy• Ancient Sources
– Human effort, animal effort, limited wind (windmills), limited water (water wheels), limited oil (animal oil lamps)
– All mechanical energy, none electrical
• Modern Sources– Oil, gas, coal, wind, water, nuclear, geothermal,
hydroelectric, and more– Abundant electrical energy
Going Off-Grid
•Energy infrastructure will disappear
•No ability to refine gas, oil, or nuclear material
•No infrastructure for the distribution of major hydroelectric or geothermal energy
•Small-scale solar/wind energy will last for decades•Strong for 1 product life-cycle, scavenged parts and replacements for years afterward
•Lost use of industrial energy will cause per capital production to drop to pre-industrial revolution levels
•Economic growth potential severely limited
Developmental Economics
• Growth: Volume of production issues– Wealth, GDP, Income, etc.
• Development: Quality of life issues– Education, health, environment, etc.
• Sustainability of each a key concern
• Zombies bring a trade-off – Poor education and health infrastructure– Improved environment via low production– Improved sustainability via low population
• Zombies: Good for the Environment Bad for Businesses– Consume very few resources– Release no toxic byproducts into the
air, land, or water• Exception: If one falls in the water making
that water unsafe
– Very high ratio of zombie population means lower impact on environment
• Much lower production volume
Going Green
• Environmental Restoration– Consumption currently at degradation levels;
more than can be sustained– Seeking steady-state consumption
• Consumption rates equals renewal rates• e.g.: Cut trees at rate equal to growth
– Zombies constantly have rate of consumption within renewal levels
– Remaining human infrastructure gradually destroyed by returning plants and animals.
Going Green
Life After People on History Channel
• Human flesh consumption reaches steady-state sustainability– Human communities survive and
reproduce– Zombies continue to seek us out as we
attempt to evade them– Zombies mitigate human growth,
maintaining sustainable levels
Sustainability
• Human development measured by Human Development Index (HDI)
• Where:
• Result of Zombies: All decreased– Much Increased in Future Potential– GNI Growth w/ Lower Pop. Growth
• Greater GNI per Capita
Human Development
Life Expectancy Education Index GNI/Capita Index
• Improved Equality Among People– Measured by Gini Coefficient
• Shift in AS and labor decreases value of G by increased reliance
Human Development
Summary
• Zombie apocalypse will fix the economy– Ample supply of agriculture– High employment and low inflation– Improved socioeconomic disparity– Environmental restoration– Resource sustainability
• Zombies keep the real threats at bay– Human excesses and overpopulation– Degradation status fixed by killing more people– Sustainable human development achieved
Michael Taillard, PhD MBAFreelance Economist
Consulting, Teaching, Research
Writing, Public Speaking, Media