Archive for the ‘Economics’ Category

IrishRepublican.Net: Land Nationalisation

Aibreán 14, 2009

This is in response to the thread on IrishRepublican.Net:

I’ve worked on farms, in factory and office too; I’d like to caution against emotional reductionism to an urban/rural rivalry. Not only is this completely unproductive both politically and intellectually, it’s actually kind of parochial.

I’ve heard lots of criticisms about farmers before, some valid. The wrong-headed ones are overwhelmingly from people who have no actual firsthand knowledge of farming – I am not saying that should prevent people from having an opinion, but I don’t think many of the invalid prejudices would be considered as broadly acceptable if concerning an ethnic minority, for example.

The average income of a farmer from agriculture is about 20,000 yearly; the average income of an employee of the department of agriculture is about 50,000. A farmer does not get a state-guaranteed pension, travel and mileage allowance, his livelihood is not protected by labour tribunal, or by security of civil-service salary and benefits etc. etc.

I’m highly ambivalent about the repeated use of “urban worker” in contrast to farmers. Not only is this being used euphemistically to conflate and ideologically place urban dwellers on a plane above criticism, but also to imply a kind of four-legs-good, two-legs-bad opposition against farmers – not “urban workers”, and by sly implication, not workers?

Ah, but they own land. And if they sold the land… they wouldn’t be able to be farmers anymore, would they? But someone – some urban dweller, let’s say – might build a house, or a whole development of houses. So let’s turn this around… I could also argue that all those “urban workers” – for the sake of consistency, I’ll also use that as a euphemism for all urban dwellers – who have been living large during the Celtic Tiger years, on the Pig’s Back of mortgaged equity, have been relentlessly driving up land prices. This creates a huge incentive for farmers to sell land to developers, at these inflated prices (most farmers promptly turn around and by land somewhere else – it’s just what they know). It also makes it impossible for young farmers to enter farming unless they inherit land – there is no way you can justify that kind of expense for the paltry returns from a field of wheat.

But what is the purpose of creating urban/rural rivalries like that? Does it benefit our understanding, or cloud it? Who benefits from that distraction, other than those elements and institutions who have actually gained the most, and who are now getting bailed out by the taxpayer?

My own back-of-the-envelope calculations are that about 50-60% of the so-called “farmers'” subsidy goes to administration. That would mean those “urban workers” in suits and offices, and all those urban-based inspectors whose numbers have not been decreasing, even as farmers’ numbers have. For every 360 citizens, there is one Garda; for every 14 farmers, there is one Department of Agriculture employee. Of the remainder of the budget, about 75-90% goes on inputs, the majority petrochemical based – e.g. pesticides, fertiliser and fuel. Those are not produced on farms, by the way. And that would be most of the 75-90% of that two-thirds of that so-called “income” mentioned by others; the farmer is a middle man who just takes a cut, before passing the majority on to more urban-workers (have I beaten this horse enough?) in suits and offices.

Picture a loaf of bread. About half a slice of that, that’s about what the farmer gets as a return from that loaf. Who is getting the lion’s share? You might start by asking those fellows who are charging you 50% more in the 26 counties than your compatriots in the six-counties (and I doubt even farmers there get more of a share).

There was a good Pamphlet issued by one of the Wobblies, I think, called “Socialism for the Farmer who Farms the Farm” (as opposed to the “farmer who farms farmers” i.e. the large land-holders). They use the metaphor of “the fat man on the bridge” who collects a toll from everyone who wants to go to the market to sell their products. The toll-taker represents the capitalist problem (not the market per se). The fat man on the bridge is no longer one class or set of people, but the institutional, structural alienation of the product of labour from all workers – rural and urban – by the privatisers (or privateers) and state-sanctioned capitalists.

I disagree that small-scale enterprises are inherently inefficient as opposed to large scale. The question of scale is one of appropriateness and is relative to context. A lot of corporate gigantism is not the result of “free markets”, but rather of state intervention on behalf of corporate and managerial interests. The huge physical distribution costs are effectively subsidised by public road-building and geopolitical pacification (military, political and economic suppression – or transfer – of restless natives: e.g. NATO strongarm, EU Big Mother, IMF economic hitmen…). There is a huge cartelisation impetus, and artificially-high market entrance barrier because of high regulation – the compliance-cost of which can cripple small- to medium-sized enterprises, but which can be absorbed as a constant running cost by large-scale business, now protected from more innovative up-starts.

This applies not just to shops and workshops, but to farming and farmers’ markets (or local shops and restaurants that try to favour local produce). There is a very large compliance cost in agricultural production in Ireland, both in time and resources necessary.

This all suits both big-business and big-state managerialism (many of the top people rotate between them both). It regularises tax-intakes (e.g. the unholy alliance of petrol-companies and Revenue/Dept. of Finance in crimping alternative energy), and provides secure, stable profit streams (less competition).

The mutualist writer, Kevin Carson, has some excellent analysis of this at mutualist.org – check out particularly his “Studies in Mutualist Political Economy“, also “Organization Theory: A Libertarian Perspective“.

By the way, when people say “part-time” farmer, it sometimes sounds more like a sneer. I’m not sure why Mexican campesinos should be less deserving of respect, if they work at other jobs for income, for example. This is a long established phenomenon in sociological and economic studies of many rural societies around the world, there’s nothing aberrant about it (the correct term is “pluriactive” FYI).

Another thing: the people who make the regulations and implement the regulations, and the people who buy the agricultural commodities and consume the products, are primarily urban dwellers, not farmers. Look at how much you are all paying for a bottle of water. Water. In Ireland. Now, on a volume/price basis, compare that with what you are all willing to pay (I should say, “not” willing to pay) for an all-natural energy and health drink with water, protein, calcium… or: “Milk”. You, urban dwellers, are supporting this – not farmers.

I realise that the Irish Farmers’ Association makes a big noise. But the Civil Servants regard this as a game. They know that the IFA leaders may need to make a big song and dance, but that eventually they will be made go away by some “cash in the fist” – they get something shiny to take back to the members as a big victory, but that the system will go on fundamentally the same. IFA leadership is a revolving door for managerial positions in government, a training ground for boyo’s who have proven their mettle, that can be useful assets to a smart government. (the “Phoenix” touches on this, this week actually.) And the farmers are mesmerised into thinking their fella knows all the big boyos and will sort it out. The IFA are tactically brilliant, but strategically nowhere – except as a future governmental asset testbed.

The farmers – a greying population – are being given subsidies as a kind of morphine drip, in preparation for wholesale euthanasia of the industry. Like cattle being lined up for culling. I want to emphasise, that I do not believe they get the vast majority of the subsidy – but they are mesmerised by the little piece of paper telling them how many numbers are supposedly going into their bank account. The most ingenious con-system is one in which the marks are actually committed to it, because they believe they are the chief beneficiaries.

I remember a Dept. official once snidely remarking to someone who asked what he would do when every farmer had been driven out of business: “Don’t worry, I’ll be the last one to lose my job.” They will be happy when there is one big farm, and one big shop to sell it in: they’ll have the same number of people to regulate it, a nice tidy revenue stream – and whether the system calls itself “socialist” or “capitalist”, you can be sure the same people will be rotating through that managerialist revolving door.

Want some quick fixes that could actually work?
1) a) Abolish the Department of Agriculture, and most of the agricultural regulations. Outsource all clerical functions to India;
b) Send an annual cheque for 5-15% of the previous agricultural budget directly to the farmers (remember, this is effectively all that they are getting after everyone else takes their cut anyway, we’re just cutting out the middlemen);
c) You can now either not charge the tax, or refund every resident in the form of food coupons. Or, you could give the 5-15% actual farmer subsidy to actual consumers as food coupons, to be actually spent on actual farm produce.
Congratulations! you have now just slashed the Agricultural budget by 85-95%, and made the effective subsidy go where it was supposed to without the farmers (or urban workers) being worse off;
3) Zone land according to use and/or underlying value category. Urban land is charged a fee in order to reclaim “socially added” value (public infrastructure, demographic density etc.) for public benefit, and is subdivided on that basis (e.g. residential, industrial, commercial, shopping centre, central business district versus periphery etc.). Rural land is also so divided, with “Agricultural” among the lowest – with “Ecological reserve” or “forestry” being perhaps zero charge, or as credit against others to give an incentive to preserve wildlife and habitat etc.

There has been talk of nationalisation and ownership. Remember first that Proudhon is often misquoted as saying “Property is theft”; that’s a misquote, because while he said that, he _also_ said that “Property is freedom” – he was listing the ways that the institution of property could be used to protect the worker (the worker owned his own means of production) as opposed to when the institution was used to alienate the worker’s labour.

“Property” in land is not one category, but a bundle of rights and entitlements. It’s quite possible to own the right of one use, but not another (e.g. right-of-ways, cropping), or to own the right to use, but not the underlying value (e.g. one person is allowed farm it, but in case of sale the money is split). It’s quite possible to “nationalise” the “socially added” value of land, while leaving present owners with the right to use it and transfer it. I say “socially added” because the value of improvements to the land (whether through fertility or a building) ought in justice go to the people making those improvements. “Socially Added” value is not due to specific individuals, e.g. publicly funded infrastructure, density of population/labour. This also has the effect of increasing the efficiency of land/site use, since there is a charge for use regardless. The previous comment about land being similar to Gold is very apt: no one’s making more of either, and land or sites are a limiting factor to all production.

There’s lots of ways to skin a cat. Instead of charging home-buyers (or farm-buyers?) a big lump-sum stamp-duty, annualise the capitalisation-cost of the site value (thus also providing a steady stream through good times and bad, and not penalising personal improvements to the house etc.). All of those properties in hock to the bankrupt banks: peel them out and nationalise them – the underlying site values remaining a national reserve, to be paid a regular lease in lieu of tax. All such charges would not necessarily increasing taxes on people, but could allow them to shift their tax burden. I don’t advocate charging away all value: efficient allocation of resources would require an incentive to do so – a bonus or commission kept.

Another big plus to this kind of system: no benefit for tax-exiles, you can’t take land and sites with you. And because sites are necessary for all production, site-value charges are famously “sticky” – they cannot be passed on to consumers, the front-loaded onus is on the site owner to actively pull in revenue instead of squatting there and waiting for people to bribe him for use rights. It also has the benefit of reducing speculative excess – a burden on the entire economy and new house buyers – since possession of land or sites would bear a cost.

I’m borrowing and adapting ideas here from both the American economist Henry George, and the Irish economist Raymond Crotty (but don’t blame them for anything that ticks you off – that’s probably me).

One other thing: I realise that I’m being cheeky calling for the abolition of the Dept. of Agriculture, but examine your response – are you really anti-subsidy, or just anti-farmer? Is it ok to outsource farming, but not office work? How does a farmer compete with state-capitalist corporations that pay third-world workers 30 cents an… hour? A day? Farmers might be more “efficient” if we could pay our accountants that kind of money! Is healthy, inexpensive food-commodities just another consumer item, or a matter of national interest? Do you all want the best – or at least most regulated – food that money can buy, but expect farmers to do it as a charity?

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Irelands Cost of Living vs. the US, vs. the Euro v

Eanáir 19, 2009

Responding to a post by Rob Dreher (Mr. Crunchy Con) about “Europe’s Economic Agony“:

On January 14, Bloxhams – an Irish stockbroking firm – pointed out:
“The weakness of Euro membership for Ireland is highlighted into today’s Lex column.
With the UK doing what is needed to adjust to the new economic reality and devaluing its currency, Ireland is unable to devalue its currency to restore competitiveness. Therefore Lex points out that wages in Ireland will need to fall, something which is exceptionally difficult to achieve. While the Euro zone has provided us with the buffer of a central banking guarantee, the downside pain is in a loss of competitiveness against our nearest neighbour, the UK.”

I would like to point out, however, that at least in places like Ireland universal health care is an accepted part of the national infrastructure (like roads, police etc.) – not a right-wing ooga-booga talking point and socialist plot for world domination.

Consequently, the personal cost of living and financial security – in some respects – is far less than in the US.

Tell the Big Lie

Samhain 29, 2008

There was virtually nobody who saw that low-probability event as a possibility.” – Robert Rubin.”

This is such an outrageous falsehood, such a breathtaking counterfactual and moral abdication, that I feel it is on a par with one of the “big lies” from the mouth of Goebbels. If you feel that’s a little OTT: just consider the amount of pensions for old people annihilated, the amount of economic damage world-wide, the effect on poor people and the planet that this institutional and structural irresponsibility that this represents. And now the capo-di-tutti-capos for this state-sanctioned international ponzi-scheme (consider that Rubin has earned over a hundred million) are not only covering their asses, but are likely to get US cabinet positions? We are all Latin-Americans now.

Mike “Mish” Shedlock –
http://globaleconomicanalysis.blogspot.com/2008/11/rubins-arrogance-and-denial-is.html
as well as Nassim Taleb –
http://www.fooledbyrandomness.com/
were two of the many who saw this coming, and who were loudly and intelligently proclaiming it.

Nassim Nicholas Taleb (”The Black Swan: The Impact of the Highly Improbable”) has been yelling about this coming for some years.

He regards the mathematical models used by most empty-suits as intellectual charlatanism that is little more than a way for institutions avoid to responsibility en masse.

One of my favourite quotes of his is:

“Anybody invested in the Stock Market who is critical of religion is a hypocrite… stock market analysts are worse than useless…”

There is a briliant clip of him in full swing on BBC Newsnight at:
http://uk.youtube.com/watch?v=ABXPICWjFIo

This is a Stalinist airbrushing of history, and deserves to be condemned – loudly – from the rooftops. This is inexcusable, and these people need to be publicly and repeatedly called out.

Citigroup’s risk models never accounted for the possibility of a national housing downturn… when examiners from the Securities and Exchange Commission began scrutinizing Citigroup’s subprime mortgage holdings after Bear Stearns’s problems surfaced, the bank told them that the probability of those mortgages defaulting was so tiny that they excluded them from their risk analysis…
NY Times, hat-tip to Scott McConnell

There are Some Things Money Can’t Buy. For Everything Else…

Samhain 26, 2008

World War II:

$3.6 trillion.

The Louisiana Purchase, New Deal, Marshall Plan, Korean War, Race to the Moon, NASA, Vietnam War, S&L Crisis, and Invasion of Iraq:

$3.92 trillion.

Still-rising $4.6165 trillion Bailout*:

Priceless.

There are Some Things Money Can’t Buy. For Everything Else, there’s Taxpayers.

"Your credit rating is so poor, Mr. McGee, that not only are we authorized to cut your CARD in half..."

* Figures from http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/
Hat tip to http://www.huffingtonpost.com/ and http://www.offthemark.com

Space, Time, Energy, Matter, Information – 2

Samhain 17, 2008

L.A.N.D.2:

Space, the final frontier... BP = d / (1 + ( √ (m²1 / m²2))

Space, the final frontier... BP = d / (1 + ( √ (m²1 / m²2))

“… a new geography is being created within which physical distance is less important than electronic connectedness. ” (Seeking source 081117)

Recapping, in paraphrase, STEMI Compression:

STEMI compression in design evolution, as applied to Resilient Communities –
– Space: less volume/area used; “localization… reduction of space needed to support human activity”;
– Time: faster; Just-In-Time production;
– Energy: less energy, higher efficiency; Just-In-Place production reduces transport;
– Mass: less waste; made to order versus mass production;
– Information: “higher efficiency, less management overhead… radical simplification”;

Hypothesis set A:

  1. Limiting Assets – Natural, National, Network Development (Locational ANd Demographic) or L.A.N.D.^2 values, exist;
  2. these values are the result of positive externalities which are due to:
    • intentional investments of site-specific material and social infrastructure;
    • natural opportunities and exogenous natural capital;
    • exposure to social opportunities and demographic energy, access to market, social capital;
  3. These contain both rival and non-rival public goods;
  4. Overuse of non-rival goods can result in them becoming rival;
  5. The rationalisation of provision, or rationing of rival goods, is necessary;
  6. State-allocation is hampered by the problem of cost calculation absent market signals;
  7. Allocation through state-led privatisation of rival goods leads to negative externalities – socialisation of cost, privatisation of profit;

Hypotheses set B:

  1. Technology and design – investment of knowledge – reduce effective spatial and time distance;
  2. Technology and design reduce effective material and energy use;
  3. Both the reductions of effective space-time and matter-energy can be thought of as as reductions of resistance to human action and desire;
  4. The control of such technology and design is equivalent to control of other aspects of LAND2 (hence Infrastructure and Network);
  5. Bottlenecks in such control – whether intentional or not – create an institutional toll-bridge which the rest of society must pay;

Some previous thinkers on demographic energy, locational value, and technology…

Fuller uses as an example of this the Telstar satellite which. while weighing only one-tenth of a ton, out-performs 75,000 tons of transatlantic cable…
… substitution not only in materials but in functions… may vastly alter our lives, effecting how we otherwise spend our energy and time. For example, communications as a substitution for transportation can effect such savings to a great extent…
A society that exercises this option of using communication in place of transportation in many of its activities … can conserve many resources. (Seeking source 081117)

Von Thunen::

r = Y(p − c) − YFm

where R=land rent; Y=yield per unit of land; c=production costs per unit of commodity; p=market price per unit of commodity; F=freight rate; m=distance to market.

Locational rent, a term used by von Thünen in his argument, is to be understood as the equivalent to land value. It corresponds to the maximum amount a farmer could pay for using the land, without making losses. It can be defined as the equation below:

L = Y(P − C) − YdR

* L: Locational rent (in Money / m²)
* Y: Yield (in Units / m²)
* P: Market price of the crop (in Money / units)
* C: Production cost of the crop (in Money / units)
* d: Distance from the market (in m)
* R: Transport cost / Resistance / Friction (in Money / units / m)

Stewart:: Demographic Gravity:

F = (N1 X N2) / ( √d )
Demographic Force = (population 1 X population 2) / (distance squared)

E = (N1 X N2) / d
Demographic Energy = (population 1 X population 2) / distance; this is also Zipf’s determinant:
Interchange of value; Y value of goods exchanged; inter-community movement of goods (by value):
Y = (N1 X N2) / d

PEN1 = N2 / d
Demographic Potential Energy of population 1 = population 2 / distance

PE = N / d
Demographic Potential Energy @ point = population / distance, in persons per mile

Gradient = N / m²
Demographic Gradient = persons / (mile squared)

Force of Diversity: economy of population living at source of raw material production (saves transport to production centre); n+, N-
Force of Unity: Economy of living together in one big city where all production done (saves transport to consumers); n- (to 1), N+ (to 100%)
Conflict of economies: n number of different communities and N sizes;

Reilly’s retail gravity equilibrium::

Population 1 / (distance to balance, squared) = Population 2 / (distance to balance, squared)

Larger cities will have larger Sphere of Influences than smaller ones, meaning people travel further to reach a larger city.

BP = d / (1 + ( √ (m²1 / m²2))

The balance or Break Point (BP) is equal to the Distance (d) between two places, divided by the following: Unity or Total (1) plus the Square Root of, the size of Place One (p1) divided by the size of Place Two (p2).

Notional gravity can be influenced by a number of things, but square footage is simple and effective measure of utility, ceteris paribus.

Zipf::

Interchange of value; Y value of goods exchanged; inter-community movement of goods (by value):

Y = (N1 X N2) / d

The movement of goods by value – and of persons – between any two communities, N1 & N2 that are separated by the easiest transportation distance, d, will be directly proportionate to the product, N1 X N2, and inversely proportionate to the distance, d. (The “Principle of least effort”)

(seeking source for following 081117)

U (x, h, T)

p (x ‘consumption’) + r (h ‘housing’) = (y0 ‘nonwage income’) + (w ‘wage rate’) . (1 – t ‘commute’ – T ‘leisure’)

Space, Time, Energy, Mass, Information – 1

Samhain 17, 2008

Technological design as a substitute for space, time, energy and material:

MORE Braiiiiiiiiiiins!

MORE Braiiiiiiiiiiins!

Buckminster Fuller came up with the concept of ephemeralization: “the principle of doing ever more with ever less weight, time and energy per each given level of functional performance”. (Fuller, Synergetics 2, 792.52)

This is a similar riff to STEMI Compression (thanks to John Robb – Global Guerrillas Wednesday, 12 November 2008) which I paraphrase here:

STEMI compression in design evolution, as applied to Resilient Communities –
– Space: less volume/area used; “localization… reduction of space needed to support human activity”;
– Time: faster; Just-In-Time production;
– Energy: less energy, higher efficiency; Just-In-Place production reduces transport;
– Mass: less waste; made to order versus mass production;
– Information: “higher efficiency, less management overhead… radical simplification”;

As an example – an important one to which I will return in the next post:

Fuller uses as an example of this the Telstar satellite which. while weighing only one-tenth of a ton, out-performs 75,000 tons of transatlantic cable…
… substitution not only in materials but in functions… may vastly alter our lives, effecting how we otherwise spend our energy and time. For example, communications as a substitution for transportation can effect such savings to a great extent…
A society that exercises this option of using communication in place of transportation in many of its activities … can conserve many resources.
(Searching for source, 081117)

Compare this with the cybernetic or computational trend – in the ability to manipulate and produce information – known as “Moore’s Law”:

Poverty on the world level has decreased from over 70% in 1960 to 30% at present. Averaged over the different decades, a yearly increase in GNP of about 2% seems normal for the developed countries. This increase is primarily due to an increase in productivity of about the same amount…
The increased productivity means that less resources and labor are needed to produce the same amount of goods. Buckminster Fuller (1969) called this on-going trend to do more with less “ephemeralization”. Perhaps the most spectacular illustration of the underlying
technological progress is Moore’s Law, the observation that the speed of microprocessors doubles every [24] months, while the price halves.
This improvement results mainly from miniaturization, so that more (processing power) is achieved with less (materials).
Ephemeralization explains the stable or declining prices (corrected for inflation) of physical resources and energy. The decline is particularly evident if the value of a resource is expressed as a percentage of the average income (Simon, 1995).
FRANCIS HEYLIGHEN and JAN BERNHEIM
GLOBAL PROGRESS I: EMPIRICAL EVIDENCE FOR ONGOING INCREASE IN QUALITY-OF-LIFE
(Received 1 April 2000; Accepted 15 June 2000)

(The ability to generate knowledge – as opposed to simply transmitting information – is a subject also touched upon by Drucker in “Post Capitalist Society”; here it is described in an evolutionary or anthropological sense, again with reference to Fuller, and in a manner reminiscent of Popperian falsification:)

… evolution in this age is not primarily biological, but cultural: what is selected are no longer the genes, but the memes, i.e. the ideas, beliefs, habits, etc. that are transmitted from person to person (Heylighen, 1997a; Dawkins, 1976).
If a new design can achieve more than a previous design, while requiring the same its fitness will be higher in all environments.
Achieving more means being able to cope with a larger variety of problems or getting better results on any one problem. Requiring less means being less dependent on what the environment provides. Together, they imply more power, productivity and efficiency, that is, increased control over the problems that threaten QOL or survival.
…doing more with less (called “ephemeralization” by Buckminster Fuller) is conspicuous in the evolution of our society.
Economic development can similarly be seen as an increasing control of social needs (Heylighen, 1997b).
Unlike biological evolution, cultural evolution has developed a number of shortcuts for the tortuous process of blind variation and natural selection. It is knowledge in its diverse forms which allows us to anticipate to some extent what will happen. This allows us to avoid blind alleys, without first needing to explore them. Campbell (1974) has conceptualized knowledge as a “vicarious selector”. Knowledge selects the most adequate actions from the variety of potential actions, in the same way that natural selection selects by destroying inadequately behaving systems. The difference is that knowledge does not destroy actual systems, it only eliminates unpromising potentialities.
…progress in one domain will make society more competent to push for progress in another, by increasing its overall capacities.
The growth of knowledge obviously benefits all other domains:
the growth of wealth will benefit all other domains, including the domain of knowledge:
more healthy people will be more productive in general, whether it is in the material, the intellectual or the social domain. Similarly, people who feel more secure will invest more resources and energy in developing themselves or the economy.
The same positive feedback or mutual reinforcement can be observed within each of the major domains.
…progress feeds on progress, thus continuously promoting its own development.
FRANCIS HEYLIGHEN and JAN BERNHEIM
GLOBAL PROGRESS II: EVOLUTIONARY MECHANISMS AND THEIR SIDE-EFFECTS
(Received 1 April 2000; Accepted 15 June 2000)

One of the arguments regarding Peak Oil and resource depletion, is that this kind of ephemeralisation means less resources are needed to maintain equivalent or higher standards of living. One of the best champions of this case is Julian Simon in e.g “The Ultimate Resource”. The issue I have with Simon is: he is following a line of reason first successfully argued by Henry George against the Malthusians (that increased numbers of people are not a burden, but a greater source of ingenuity and specialisation), but he misses the problem of externalities and Political Economy. George argued that certain resources and collectively manufactured sources of economic value properly belonged in commonwealth, not private hands. Otherwise there would be the Chomskyist problem of “socialised costs and privatised profits”, which would destroy and act as a set of perverse incentives regarding overall productivity. Bearing this warning in mind, ceteris paribus

Braiiiiiiiiins!

Braiiiiiiiiins!

In exponential growth, we find that a key measurement such as computational power is multiplied by a constant factor for each unit of time (e.g., doubling every year) rather than just being added to incrementally.
…an exponential curve approximates a straight line when viewed for a brief duration. So even though the rate of progress in the very recent past… is far greater than it was ten years ago …, our memories are nonetheless dominated by our very recent experience.
…what would a thousand scientists, each a thousand times more intelligent than human scientists today, and each operating a thousand times faster than contemporary humans (because the information processing in their primarily nonbiological brains is faster) accomplish? One year would be like a millennium. What would they come up with?
Moore’s Law Was Not the First, but the Fifth Paradigm To Provide Exponential Growth of Computing
Each time one paradigm runs out of steam, another picks up the pace
…the most appropriate measure to track is computational speed per unit cost.
…the exponential growth of computing didn’t start with integrated circuits (around 1958), or even transistors (around 1947), but goes back to the electromechanical calculators used in the 1890 and 1900 U.S. Census. This chart spans at least five distinct paradigms of computing, of which Moore’s Law pertains to only the latest one.
Each stage of evolution provides more powerful tools for the next.
The “chaos” of the environment in which the evolutionary process takes place … provides the options for further diversity.
Specific paradigms, such as Moore’s Law, do ultimately reach levels at which exponential growth is no longer feasible. Thus Moore’s Law is an S curve. But the growth of computation is an ongoing exponential…
In accordance with the law of accelerating returns, paradigm shift, also called innovation, turns the S curve of any specific paradigm into a continuing exponential.
http://www.kurzweilai.net/articles/art0134.html?printable=1
The Law of Accelerating Returns
Ray Kurzweil

Coming back to earth from these dizzying heights, we can see how – in line with the Technocracy movement that stemmed from the old Technical Alliance – design can reduce energy and material inputs if implemented societywide:

From the first clean sheet of paper to the first customer delivery of a new car, 1.7 million hours of research and development time is required: the equivalent of 8000 person-years or 2000 people working for four years at 40 hours a week. At $50 per hour, the cost is $850 million. But with the industry average production run of one million cars, that design cost is amortised to only $850 per car. So the consumer cost for the full benefit of 1.7 million hours of research amounts to only four percent of the average new car price of $20,000. (At $20,000 and weighing 1700 kilos, a car costs $11.70 dollars a kilo. That’s cheaper than steak and it comes with a three-year guarantee.)
For a 40 storey prestige office building costing $110 million, architectural fees are likely to amount to 2.1 percent and the full fee schedule (including quantity surveying) would be about 5.2 percent. At $50 per hour, that bill covers only 117,400 hours of thought or 57.2 person-years (less than .1 percent of the time spent designing your car).
Title: Tomorrow’s dynamic house. Authors: Trudgeon, Michael Source: Architecture Australia ; Nov/Dec98, Vol. 87 Issue 6, p80, 6p
http://libezproxy.open.ac.uk/login?url=http://search.ebscohost.com.libezproxy.open.ac.uk/login.aspx?direct=true&db=a9h&AN=1364011&site=ehost-live&scope=site

Amory Lovins of the Rocky Mountain Institute came up with the idea of “Negawatts” – units of electrical efficiency (power not used) that would be paid for, similar to regular “Megawatts”; here’s the parallel idea from Mumford:

“In the neotechnic phase, the main initiative comes, not from the ingenious inventor, but from the scientist who establishes the general law: the invention is the derivative product.”(217) Improvements in the internal combustion engine provide a new source of power which changes the social order. Rapid transportation is possible by the automobile and the airplane. Communication is further enhanced by the telegraph and the telephone. But, “whereas the growth and multiplication of machines was a definite characteristic of the paleotechnic period, [Mumford says] one may already say pretty confidently that the refinement, the diminution, and the partial elimination of the machine is characteristic of the emerging neotechnic economy.”(258)
Quoted from Technics & Civilization (seeking source 081117)
By Lewis Mumford

Are you a taxpayer?

Samhain 16, 2008

The great and the good of capitalism were holding a requiem dinner for the global financial system at a secret hideaway:

“If the interest rates hadn’t been so low, we wouldn’t be in this mess!” said the bond trader, “I blame the central banks!”

“We told you that you were under-pricing risk,” said the central banker, “I blame the mortgage lenders!”

“We were forced to take on more borrowers just to stay in the game” said the mortgage lender, “I blame all those derivatives products!”

“We were promoting efficiency by allowing you to spread your risks,” said the structured-finance specialist, “I blame the ratings companies!”

“We relied on the computer models that the banks helped us build,” said the credit-rating assessor, “I blame the wholesale markets funding it!”

“We relied on money-markets because the savings deposits weren’t high enough,” said the commercial banker. “I blame the regulators!”

“We allowed you to maximize shareholder returns,” said the regulator. “I blame those greedy investors!”

“We were trying to fund the retirements of thousands in a collapsing market” said the pension-fund manager. “I blame the hedge funds!”

“We had nobel prize winners on staff,” said the hedge-fund manager, “I blame the irrationality of ordinary man.”

Just then, the waiter arrived with the bill.

“Are you a taxpayer?” asked the central banker.

The waiter nodded.

“We were hoping you would foot the bill.”

Economy and Philosopy: Nassim Taleb

Samhain 7, 2008

PBS (USA) Interview:

Nassim Nicholas Taleb (Author: The Black Swan), Benoit Mandelbroit (Mathematician).

Globalisation fools us into false security; if there is a failure, there can be a massive failure.

Fora.tv: Atheists and the Stock Market – Nassim Nicholas Taleb;

“Anybody invested in the Stock Market who is critical of religion is a hypocrite… stock markets analysts are worse than useless…”

BBC Newsnight – Nassim Nicholas Taleb:

“…we may be at the very beginning… we have to throw out everything we know…”

Charlie Rose Green Room – Nassim Taleb:

“You cannot seperate skills from luck… skills are necessary.”

Charlie Rose Interview 1. – Nassim Taleb:

“1. A surprise; 2. massively consequential… after the fact, we always analyse to find causes… the world is becoming more and more difficult to understand.”

“Most of what we know, came form tinkering… design has not led to desirable consequences… most [important] events come from large deviations… you have to learn form the extraordinary, not the ordinary.”

PBS – Newshour: Hedgefund explanation (Amaranth);

“… a crisis of confidence, because of an event that seemed impossible, until it happened.”

Times Online: Nassim Taleb – Life tips;

Timberland

Samhain 2, 2008

Timber and land are both concrete, non-ephemeral, and always have some use, regardless of whether markets tank or not. As commented over on Seeking Alpha, true biologically-based “growth cycles,” mostly disconnected from from men-in-suits’ idiocracy – a level of insulation that may as well put it on a different planet. You also have about 1-5+ years to delay harvest in case of down prices.

Regarding wood as fuel: there are some “old school” technologies which make it quite comparable to oil, especially at $60+ a barrel prices.

Combined Heat and Power plants – also known as Cogeneration – deliver energy in the form of both electricity and heat.

In Denmark, for example, several cities operate District Heating systems, whereby heat is literally piped into buildings and apartment as a utility, form CHP plants.

Wood pellets act in some ways like a “liquid” in terms of storage tanks, and can be used in individual suburban and even some urban contexts with a high level of automation in burners. Pellets do require an intermediate manufacturing process involving heat, moisture and pressurisation. They also need to be below a certain percentage moisture, or are less effective.

Wood chips have some advantage in requiring less intermediate processing, are a bit less fussy concerning moisture. In Ireland, some institutions, such as hotels, use woodchip burners quite effectively. It’s also possible for companies to sell the heat, rather than the pellets, by renting container-like units that operate on-site, containing the burner and storage tanks, which are then maintained by the heat-utility company.

An advantage with both of these can be the use of thinnings from forestry, which might normally be a drain.

One key issue when bringing these fuels to market, is the level of intermediary processing; one estimate (I think) is that every time a tonne of the wood is handled, you subtract €5. And the more that a company can add value (e.g. through processing the wood for pellets) especially on-site, the more financial value can be reclaimed from the market, rather than just selling a raw commodity.

Wood-gas burners are another old, very efficient and proven technology with a high level of modern technological development. They’ve also been used – and can be still – in automotive contexts, believe it or not. FEMA even issued a do-it-yourself handbook for farmers in case of national emergency. The process involves heating the wood to release the gas, which is then burned, and is not very complicated.

Irish Ship Sinking: Government Bails Out Iceberg

Deireadh Fómhair 3, 2008
"Four Hundred BILLION Euros!"

Irish Finance Minister: 4 hundred BILLION Euros!

Even the bloggers at The American Conservative (you’d think they’d have enough to write about) are amazed by the Irish Government’s preemptive bailout (it’s not a bailout!) of (take breath) 400-500,000,000,000 (I have to stop and count the zeroes each time… not so good at maths to begin with…).

400 or 500? “A hundred billion here, a hundred billion there… pretty soon you’re talkin’ real money” (apologies to Barney Frank Everett Dirkson of Illinois (1896 – 1969)).

Just a back of the envelope calculation:

400,000,000,000 ”guarantee”
/Divided by/
4,400,000 population in the 26 counties.
=============

€90,909  exposure per man, woman & child;

Or, €454,545 per family of 5;

But it’s not a bailout! Ah, well, phew! We’re alright then.

Update: Mon Oct. 6

Who the hell knows anymore? With all the foreign funds swarming into Ireland now, maybe the bhoys in the Dáil have pulled a great stroke… that is, if our collective bet pays out, that increased exposure won’t actually expose us to a financial shit cascade if not only our own, but now foreign banks start to go belly up.