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If only 0.006% care about BLOOD-SOAKED METAL ... why are we spending all this cash?
Dodd-Frank is POINTLESS
Worstall @ the Weekend As El Reg's official dodgy metals dealer, another tilt at the oh-so-fashionable concerns over conflict minerals and that “blood in the mobile” campaign. The essential point is that almost none of us seem to be very interested in the subject so why the hell are we spending billions of dollars on it?
You can read past coverage of this issue here and the particular point that returns me to this subject is this report over sales of the Fairphone:
Fairphone, the social enterprise that makes an Android smartphone built of raw materials sourced from conflict-free mines and built in exploitation-free factories, plans to make an even fairer phone in 2015. But the outfit has also revealed it has struggled to sell all of the 60,000 phones it has built to date.
That conflict-free bit is all about the war in the Congo; specifically that there's an awful lot of slavery, rapine, mayhem and violence going on over the mining of the three Ts (tungsten, tantalum and tin) as well as gold that can be found in the area. Not unnaturally, various people thought this was a bit off and thought that there might be a way to stop people from profiting from enslaving people to make out mobes while still allowing non-slavery style operations to carry on and enrich the local populace.
I've long been complaining, and have pointed out before, that the specific method chosen to do this was ludicrous. The Dodd-Frank Act means that all American-listed companies must ask each of their suppliers whether they use minerals from the region and if so, do they distinguish between conflict-free materials and not such. Even the SEC, the body charged with overseeing this process, estimates that this will cost $4bn.
There has also been an industry-led initiative to go talk to the ore smelters. This is easy with the three Ts; less so with gold (the sort of alluvial gold we're talking about here is piss easy to feed into the scrap chain. For the processing of the other minerals you need substantially more sophisticated equipment) but it does largely seem to be working. Both Apple and Intel have declared that they're becoming conflict mineral-free simply by using that system. Which is the one I've long recommended and depends upon checking the ores as they arrive at the smelter and rejecting those that come from conflict-riven mines. And yes, we do have a good enough database of the trace elements in ores from the different mines to be able to tell this.
So, I've a certain ire directed at the Enough Project and Global Witness for having had this vastly expensive law passed to do something that could be – well, in fact already has been – achieved in a more effective and simpler manner.
However, those numbers from Fairphone make me wonder whether I've not been too open to the the idea of doing anything at all. Last year's sales were around one billion pieces for smartphones globally and the one which touted itself as entirely fair and ethical, most especially on the subject of conflict minerals, is having trouble selling 60,000 pieces.
Yes, yes, they didn't have a lot of money for marketing and so on: but it's not showing that a huge percentage of the market particularly cares about this issue, is it? 0.006 per cent isn't considered a large percentage.
Which brings us to something that economists are very keen on: an idea called “revealed preferences”. Call this cynical if you like but it's probably more accurate to say that it's realistic. You can get people to talk about many things; you can even get them to vote in some pretty odd ways. But if you want to find out what people really think, understand their actual motivations, you're a lot better off looking at what they actually do instead.
An example of this might be that you can find an awful lot of people who'll agree that government should have more money. Americans have the Gifts to the United States account and that gets some $4m a year given to it. Rather less than you would expect, given the rhetoric. For the one year I managed to get the numbers out of the UK Treasury for the same idea, just five people had coughed up. And four of those were dead, meaning that only one person in the country had actually cared enough to stick his own hand into his own pocket to pay for goodies for the rest of us. (By the way, if you think George Osborne should have more money to spend, just send it to “The Accountant, 2 Horse Guards Road, SW1)
That's rather fewer people than one would imagine shared the desire for the government to have more money – at least, if you read The Guardian.