Wednesday, July 31, 2013

The Accident of Economic History

Must-read article: The Blip: What if everything we’ve come to think of as American is predicated on a freak coincidence of economic history?

This is a necessary companion piece to Sunday's post about diminishing returns to scientific discovery and innovation. It centers around the work of a couple of clear-seeing economists (a rarity nowadays). One is Robert Gordon, whom we've covered here many times before, but it goes into much greater depth and detail about his arguments:
Gordon has two predictions to offer, the first of which is about the near future. For at least the next fifteen years or so, Gordon argues, our economy will grow at less than half the rate it has averaged since the late-nineteenth century because of a set of structural headwinds that Gordon believes will be even more severe than most other economists do: the aging of the American population; the stagnation in educational achievement; the fiscal tightening to fix our public and private debt; the costs of health care and energy; the pressures of globalization and growing inequality. Over the past year, some other economists who once agreed with Gordon most prominently Tyler Cowen of George Mason University have taken note of the recent discoveries of abundant natural-gas reserves in the United States, and of the tentative deflation of health-care costs, and softened their pessimism. But to Gordon these are small corrections that leave the basic story unchanged. He believes we can no longer expect to double our standard of living in one generation; it will now take at least two. The common expectations that your children will attend college even if you haven’t, in other words, or will have twice as rich a life, in this view no longer look realistic. Some of these hopes are already outdated: The generation of Americans now in their twenties is the first to not be significantly better educated than their parents. If Gordon is right, then for all but the wealthiest one percent of Americans, the rate of improvement in the standard of living year over year, and generation after generation will be no faster than it was during the dark ages.

Gordon’s second prediction is almost literary in its scope. The forces of the second industrial revolution, he believes, were so powerful and so unique that they will not be repeated. The consequences of that breakthrough took a century to be fully realized, and as the internal combustion engine gave rise to the car and eventually the airplane, and electricity to radio and the telephone and then mass media, they came to rearrange social forces and transform everyday lives. Mechanized farm equipment permitted people to stay in school longer and to leave rural areas and move to cities. Electrical appliances allowed women of all social classes to leave behind housework for more fulfilling and productive jobs. Air-conditioning moved work indoors. The introduction of public sewers and sanitation reduced illness and infant mortality, improving health and extending lives. The car, mass media, and commercial aircraft led to a liberation from the narrow confines of geography and an introduction to a far broader and richer world. Education beyond high school was made accessible, in the aftermath of World War II, to the middle and working classes. These are all consequences of the second industrial revolution, and it is hard to imagine how those improvements might be extended: Women cannot be liberated from housework to join the labor force again, travel is not getting faster, cities are unlikely to get much more dense, and educational attainment has plateaued. The classic example of the scale of these transformations is Paul Krugman’s description of his kitchen: The modern kitchen, absent a few surface improvements, is the same one that existed half a century ago. But go back half a century before that, and you are talking about no refrigeration, just huge blocks of ice in a box, and no gas-fired stove, just piles of wood. If you take this perspective, it is no wonder that the productivity gains have diminished since the early seventies. The social transformations brought by computers and the Internet cannot match any of this.

But even if they could, that would not be enough. The growth rate is a heavy taskmaster, Gordon says. The math is punishing. The American population is far larger than it was in 1870, and far wealthier to begin with, which means that the innovations will need to be more transformative to have the same economic effect. I like to think of it this way, he says. We need innovations that are eight times as important as those we had before.
And the necessary counterpoint is provided by Erik Brynjolfsson, another economist whom we've covered quite a bit here. The thing is Brynjolfsson’s argument isn't exactly a refutation of Gordon in any way. To me, it's more complementary. His argument is that the computer revolution is in its early stages and is as transformative as earlier revolutions:
The second industrial revolution itself, he said, proved the point. After factories were electrified, Brynjolfsson explained, the amazing thing is productivity didn’t increase in those factories for 30 years. 30 years! It sometimes take a while for humans to figure out how to use innovations, he said, and perhaps we are just now beginning to comprehend the full possibilities of computerization. In Brynjolfsson’s view, we are now in the beginnings of the new machine age, an extended moment of revolution in artificial intelligence. A child’s PlayStation, he said, is more powerful than a military super computer from 1996; a chess program contained on a cell phone can defeat every grandmaster. Brynjolfsson pointed out that Watson, the IBM AI project, having successfully amassed enough everyday knowledge to defeat the grand champions on Jeopardy!, was now applying for jobs at call centers, and getting them. In finance, and in law, and getting them.
Economists often note that even experts are very bad at predicting the world to come and constantly underestimate it. Optimists like Brynjolfsson say that though productivity gains from computer technologies have declined since 2004, that’s no reason to expect the decline to continue. They see prospects. A recent McKinsey report detailing economic sectors that might grow found, for instance, great possibilities in intelligent machines: trillions of dollars in the so-called Internet of Things, for instance, and 3-D printing.
The funny thing is, Brynjolfsson himself is usually placed in the pessimist camp! The reason is because the book he co-wrote with Andrew McAfee makes the argument that most mainstream economists refuse accept despite the overwhelming evidence: the computer revolution is actually destroying jobs! Growth without jobs is something we're not set up for:
It turns out the optimist’s case is darker than I expected. The problem is jobs, he said. Sixty-five percent of American workers, Brynjolfsson explained, occupy jobs whose basic tasks can be classified as information processing. If you are trying to find a competitive advantage for people over machines, this does not bode well: The human mind did not evolve to multiply triple-digit numbers, he told me. The robot mind has. In other words, the long history of Marx-inflected pleas, from Bartleby through to Fight Club, that office work was dehumanizing may have been onto something. Those jobs were never really designed for the human mind. They were designed for robots. The existing robots just weren’t good enough to take them. At first.
If even your optimists are pessimistic, you might want to be concerned. Put together, both of these cast a dark view on growth. Gordon, in my view, is dead on, but if anything he's too optimistic! He talks about headwinds, but he underestimates the greatest headwind of all - the dwindling availability of raw materials including fossil fuels, and environmental destruction caused by pollution, including climate change. Agricultural output will be hammered by climate change and the rest of the economy will be hammered by the substitution of lower-grade sources of energy for cheap, easily accessible crude oil. From this article (worth reading in full):
Regarding the scarcity of resources issue, none other than the World Bank produced a detailed study of demand and supply projections for the immediate future. The study projects that, on the basis of current consumption and immediately precedent rises in it, the demand for food will rise by 50% by 2030, for meat by 85%, for oil by 20 million barrels a day, and for water by 32%, all by the same year. This is met by alarming statistics and predictions from the supply side. In their report, they state that global food growth rates fell by 1.1% over the past decade, and are continuing to fall, while global food consumption outstripped production in seven of the eight years between 2000 and 2008. Further, the Food and Agricultural Organization and the UN Environment Program estimate that 16% of the arable land used now is degraded. Intensifying competition between different land uses is likely to emerge in future, including food crops, livestock, etc., and the world’s expanding cities. Current rates of water extraction from rivers, groundwater and other sources are already unsustainable in many parts of the world. Over one billion people live in water basins in which the physical scarcity of water is absolute; by 2025, the figure is projected to rise two billion, with up to two thirds of the world’s population living in water-stressed conditions (mainly in non-OECD countries). On oil, the International Energy Agency has warned consistently that there is a significant risk of a new “supply crunch” as the global economy “recovers.” Additionally, the IEA’s chief economist argues that peak production could take place by 2020 (from the “World Development Report 2011, Background Paper: Resource Scarcity, Climate Change and the Risk of Violent Conflict,” www.worldbank.org ).
But a key point made by the article is: All of America's history has occurred during this period of extraordinary growth. America's entire history has coincidentally overlapped with the first and industrial revolutions. Thus, is is questionable whether our society can even exist without it. From the article:
The whole of American cultural memory, the period since World War II, has taken place within the greatest expansion of opportunity in the history of human civilization. Perhaps it isn’t that our success is a product of the way we structured our society. The shape of our society may be far more conditional, a consequence of our success. Embedded in Gordon’s data is an inquiry into entitlement: How much do we owe, culturally and politically, to this singular experience of economic growth, and what will happen if it goes away?
Going beyond this thought means, what if we have succeeded not because of the way we have structured our society, but in spite of it? In Morris Berman's estimation, American culture and expansionist capitalism are inextricably joined. In fact, it is what defines American culture and social relations. From a recent speech:
In March of last year, the Pew Charitable Trust released the results of a poll that revealed that most Americans have no objection to the existence of a small, wealthy elite—the famous 1%. Not at all. Their goal is to become part of that elite, and they are deluded enough to think that they can. This is one reason why the Occupy Wall Street movement had such a short lease on life, and why social inequality was a nonissue in the last presidential election, not even mentioned in the pre-election debates. Rich or poor, nearly every American wants to be rich, and in fact sees this as the purpose of life. In this sense, we have the purest democracy in the history of the world, because ideologically speaking, the American government and the American people are on the same page. To quote Calvin Coolidge, “The business of America is business.” Hustling is what America has always been about.

This is why our elected leaders have a vacant quality about them. After all, the American Dream is about a world without limits, about always having More. But More is not a spiritual path, nor is it a philosophy of life. It has no content at all, and this why, when you look into the eyes of an Obama or a Clinton or a Hillary Clinton—probably our next president—you see not merely nothing, but a kind of terrifying nothingness. Unfortunately, this vacant look characterizes a lot of the American population as well: the microcosm reflects the macrocosm, as the medieval alchemists were fond of saying. Once again, this is evidence of a pure democracy: nobodies elect nobodies to office, and then everyone wonders “what went wrong.” All of this reflects the power of horizontal understanding: what you see is what you get.

The problem with the philosophy of More is that More, as already noted, doesn’t have any intrinsic meaning. After all, once you have it, you then want—More! That’s the American Dream. But the awareness of this dynamic—assuming we ever get to that point—puts us in a particular bind, at least as far as serious social change is concerned. We are finally talking about a kind of conversion experience; and beyond the individual level, which is itself no small achievement, that can only happen when history presents us with a no-win situation. The bald fact is that we cannot maintain the American Dream—now foolishly being pursued by the Chinese—because we are running out of resources, oil in particular. The American Dream cannot survive without energy, and lots of it.
And in a similar vein, from Michael Seidel:
Some of the good things in life are corrupted or degraded if we turn them into market commodities. So when we decide when to use markets, it’s not enough to think about efficiency. It’s not even enough to think about market freedom. We also have to decide how to value the goods in question, be they health, education, national defense, criminal justice, environmental protection, and so on.

These are moral and political questions, not merely economic ones. And to decide them democratically we have to debate them, case by case, just as we have begun to do here, the moral meaning of these goods and the proper way of valuing them.

This is the debate that we didn’t have in the age of market triumphalism. And as a result, without quite realizing it, without ever deciding to do so, we drifted from having a market economy to becoming a market society.
In Berman's account, America is less of a civilization than a get rich quick scheme. I've often noted that our architecture does not look like we intend to be here for more than one or two generations. Apart from a few great cities, many of which are now semi-abandoned and in various states of decay, our architecture is less "buildings," than "sheds" - temporary utilitarian structures erected for convenience with little or no aesthetic value because their inhabitants do not intend for them to last very long.

The model for this is the boom town. Be it oil or gold or minerals or lumber, the extractive culture builds quick shelters for convenience, intending to move on to the next "boom." But what if there are no more booms? What if the United States as a culture, as a society, as a civilization, is just a massive boom town on the scale of the nation-state? And do places like Detroit, Youngstown, Camden and Stockton signify that the boom is already coming to an end? What, if anything, of America will remain? Will there be any signs of our occupation of this continent five hundred years hence, besides mounds of trash and toxic waste?

I apologize, this post is longer than I wanted. But it's important to note that the desire to return to historic growth is nothing more than a modern cargo cult. We may laugh at the ignorance of the Melanesian natives who built planes and control towers out of sticks and stones intending to magically make cargo planes once again appear as they had during the war. But our modern "scientific" society run by economists betrays the exact same lack of understanding about where our wealth comes from. Are we much different from the Aztecs who sacrificed humans to the gods to make the crops grow again? I'm not so sure.

But then again, what do I know?

Sunday, July 28, 2013

An Architect Explains Diminishing Returns

The concept of diminishing returns is useful and so fundamental to the discussion of the predicament of modern civilization. The difficulty is that it is an abstract concept, and thus hard to grasp for a lot of people. I'm going to try and rectify that by using two examples from architecture - building insulation and window areas.

One of my colleagues emailed an article with the following title: Diminishing returns on investment in R-Values. Obviously, the mention of diminishing returns caused my ears to perk up. The article gives a good, concrete example of the diminishing returns to an activity, in this case adding more insulation to a roof. There is a reason why you see 6 to 8 inches of batt or 2 to 3 inches of rigid insulation on modern buildings rather than 12 or 18" of either. Surely more is always better isn't it?
Note the benefits accrued by the leftmost dot. Then note how much is added by the rightmost dot. Now project these into the future and you have diminishing returns. Eventually it flatlines.

After a certain point, adding more insulation actually gets you less and less insulative value for the cost. Plus, there are other tradeoffs, of which the cost of additional insulation is the most obvious, but also potentially the thickness of the wall, the complexity of construction, thicker foundations, etc.

Because the R-Value is described by the reciprocal function, going further out on the reciprocal function graph nets you less and less benefit. After a certain point, the increasingly meager gains are offset by the tradeoffs, potentially entering negative territory. From the article:
The R-value (or R-factor) is a measure of a material’s resistance to heat loss. It is the reciprocal of the U-value (or U-factor), which measures the rate of heat flow through a building material. Most often, design teams are concerned with the heat flow rate through a material or building assembly (i.e., the U-value). In this regard, the use of R-value can be misleading because of the reciprocal function.

R-values have become to the building owner what MPGs have become to the car owner: A largely understood metric that perpetuates a skewed understanding of energy economy. Mike Allen made this observation with MPGs a few years ago (October 2009) in Popular Mechanics, and he suggested that the car industry use “gallons per mile,” the reciprocal of MPGs (miles per gallon). Allen recognized that differences in MPG ratings do not reflect the actual differences in fuel consumption the way that differences in gallons per mile ratings would. The same is true for R-values as compared to U-values. However, the U-value is not as intuitive as the R-value. We understand that greater R-value correlates to better insulation. Conversely, a U-value of U-0.050 (that is, R-20) is difficult to put in perspective.
Diminishing Return on Investment for Increasing R-Values (Environmental Design and Construction)

As a result of the reciprocal function between R-value and heat flow rate, every additional dollar invested in increasing a construction assembly’s R-value becomes less effective after a certain point.
We can see from above that adding more and more insulation to our building will get us less and less benefit. This is critical! Obviously an insulated building performs better than a noninsulated one, and we should insulate buildings. Superinsulated buildings, which use larger amounts of insulation and details to minimize cold bridging are also a good idea, as are Passive Houses, which attempt to maintain a stable indoor temperature with the minimum of mechanical intervention. However, after a certain point, more is not better. If that were true, every inch of insulation would add additional equal benefit, and we could just add 10, 12, 14 inches of insulation and get double the benefit of 5, 6, 7 inches. But it doesn't work that way. Plus the cost and constructability tradeoffs of constructing such walls make adding more insulation unfeasible after a certain point. That's why you don't see such walls, and you never will.

The most benefit of insulation you get is from the first inch! And from there, you get less and less with each additional inch:
Contrary to intuition, doubling the insulation investment to R-40 does not double the effective reduction in heat flow rate. Rather, for twice the money ($376,000), eight inches of XPS insulation (R-40) will only reduce the heat flow by an additional 50 percent compared to the R-20 code minimum. In fact, as the accompanying chart illustrates, every additional “doubling” of the insulation investment will only yield a 50 percent additional reduction in heat flow rate.
This is not to say that we should not strive for higher R-values...
A similar case is that of window area. Obviously, we want windows on our building to let in light and air.  But glass is nowhere near as good a building wall insulator as an opaque wall using insulation as described above.  Glazing systems have little ability to control heat flow and radiation across the building assembly. So how much glass is too much? How much glazing is the optimal amount to maximize daylighting while minimizing unwanted heat gain or loss?

In the past, windows were not very thermally efficient. A series of technical innovations, from insulated (multi-pane) glass to thermally-broken frames have dramatically increased the R-value of window assemblies. This has permitted architects to clad entire buildings in glass, which is hardly a good idea in most cases! In fact, many so-called "green" buildings are clad in glass with R-values as low as 2. And although there are glazing systems with performances as high as R-12, these are much more complex and expensive than even a relatively simple opaque wall with insulation.

John Straube of the University of Waterloo and Building Science has done extensive research in this regard. He writes:
Normal thermally-broken commercial aluminum windows and curtainwalls typically have U-values of about 0.5, corresponding to an R-value of two. By using the best available low-e coated, argon-filled double-glazed units (with a center-of-glass R-value of four) in thermally-broken aluminum frames, overall window R-values of three can be approached. If the goal is low-energy buildings, why cover large portions of any building with such a low R-value system, particularly in cold climates?...It is difficult to understand how such a choice of exterior wall could be considered a “green” system, when a simple low-cost wall with only an inch of continuous rigid insulation will provide significantly better control of heat flow.
BSI-006: Can Highly Glazed Building Fa├žades Be Green? (Building Science)

So the ideal ratio of glass to wall is certainly lower than 100 percent! The additional glass conveys no real benefit, but introduces a substantial thermal penalty, which must be made up by extensive and complex mechanical systems like air conditioning and heating. Straube continues:
But the thermal qualities are only part of the story. Glazing lets light in. That, after all, is the primary reason we use glazing. The solar heat gain that results is the reason many buildings require air-conditioning. The size of a building’s air-conditioning plant is almost always defined by the glazed area: more glazing means more chillers, ducts, coils, and fans. ... It is a testament to the miracles of modern glazing (which uses low-e, low emissivity coatings to selectively allow more visible light than infrared heat radiation), that many buildings can have such large window areas and remain comfortable in the summer. Nevertheless, even very good commercial clear glazing still allows about one-third of the sun’s heat to enter.
Furthermore:
It is true that daylight can offset the need for electric lighting and provide a psychologically healthy connection to the outdoors, but one doesn’t need floor-to-ceiling glass for that. In most occupancies and building types, there is no benefit to vision glass installed at floor levels (unless the occupants spend much of their time lying on the floor near the window), but there is a substantial energy penalty. Good daylighting design can reap all the benefits of glazing using vision glass covering less than half the enclosure. Numerous studies have shown there are no daylighting or energy benefits with window-to-wall ratios over 60 percent, and in most cases an area of between 25 and 40 percent is optimum (that is, lowest energy consumption). Even at these ratios, windows in a low-energy building should generally be high performance (triple-glazed in cold climates), with large thermal breaks (over 1/2" thick) and some form of exterior shading (preferably operable).
So from the above, we can see that glass much above sixty percent of the wall area is probably wasted, requiring more complex and energy-intensive mechanical systems to keep the building comfortable, with no real  payoff in terms of daylighting. So why do we see so many all-glass buildings?  Every building is unique, and these rates should be calculated on a case-by-case basis, but it's clear that adding glazing over this window/wall ratio brings diminishing returns - no further benefits are gained from the glazing, but significant losses in performance are accrued. It should be noted that many older buildings that did not have the sophisticated and energy-intensive mechanical systems of today had window/wall areas in this range.

In fact, the history of window glazing itself provides another object lesson. In the past, glass was typically very thin, about 1/4 inch, and could only be made in small panes. This limited its use. Then a series of innovations made it more thermally efficient. The first was double-paned glass: two sheets of glass separated by a dead air space. Then came thermally-broken frames, where the frames that held the glass were separated into inner and outer parts, connected by a low conducting material such as neoprene. Later, the spacers for the double-paned glass followed this technique as well. Then came a series of sophisticated low emissivity (Low-e) coatings that allowed visible light to pass through while preventing wavelengths that added heat from passing through (sort of a reverse greenhouse effect). Later developments including adding additional panes of glass, and using an inert gas like argon in the space between the glass panes instead of air.

U-Values for glass (COG=Center of glazing). Each additional development gets less and less improvement over the original. Source
However, if you were to plot all these innovations out, you would see something interesting. The very first development - double paned glass, provided the biggest boost to thermal performance of all of these. Additional developments yielded better performance, true, but no development got you as big a "bang for the buck" as insulated glass - not low-e coating, not thermally broken frames, not the addition of an additional pane of glass. In fact, every new development over time, if you plotted them out, got you less and less of an improvement over the earlier development!  The cumulative effect of all these developments gets you a window around 90 percent better performing than our initial 1/4" pane of glass. That's great, but does anyone expect another 90 percent improvement? Now we're spending massive amounts of research and development just to get a few percentage point increase. And adding additional panes of glass won't do - each pane gets you less and less benefit, as described by the reciprocal function above, while adding additional cost for the glass, and the larger frame, etc. This is why you don't see more than triple-paned glass, and never will.

The very first steam engines were very inefficient - probably ten percent or less of the coal went into doing useful work; the rest was lost to waste heat, noise and vibration. Thus, in the early days of a discovery there is lots of room for improvement. But the laws of thermodynamics set an upward limit to efficiency. The closer we get to that upward limit, that harder and harder it gets to squeeze further improvements. That doesn't mean that further improvements are not possible or not desirable; they are. It does mean, however, that big "breakthroughs" are less and less likely. Thus over time, innovation doesn't speed up, it in fact slows down. And it does so naturally, because the "big" developments are done first. These are the low-hanging fruit so to speak. So when those engines become, say ninety percent efficient, we can expect smaller incremental gains than we did decades earlier when such engines were very inefficient. We can't double efficiency forever; this is physically impossible.

Anyone who has tried to get fit has experienced this first-hand. When you first start to exercise from being sedentary and out-of-shape, weight flies off relatively quickly, and you add muscle relatively easily. After a certain point, however, you hit a plateau and work ever harder to gain muscle and lose fat. Eventually, you are spending hours in the gym just to lose a few pounds that flew off when you first started, or you have to work intensely just to gain a pound of muscle. Bodybuilders and elite athletes need to spend hours in the gym for even incremental improvements at their fitness level, and many even  turn to drugs to gain additional muscle or lose extra fat, leading to negative health consequences.

One could say the same in regards to population. It can be said that a certain amount and density of population is beneficial for innovation and economic growth. But after a certain point, simply adding more and more people delivers no benefit, yet causes all sorts of serious problems, similar to adding ever more glass to buildings. Many of the most culturally rich and innovative cities in history had less than a hundred thousand people, sometimes less than ten thousand.

Note this does not mean that there are no new innovations or discoveries to to be made, or that we should not engage in research to find them. This is the straw man often brought out whenever this point is made. What it does mean, however, is we should stop anticipating some sort of new "innovation" to fix all our problems, to create vast new industries, to employ massive amounts of people, to completely transform our economy, or similar things. This is wishful thinking based on past history. There is an upward limit on what we can accomplish.

The first amazing breakthrough experiments in the eighteenth and nineteenth century were done by amateurs in drawing rooms with equipment that could be found in the average secondary school science lab. Many twentieth century companies were famously started in garages. Now, multi-million dollar research labs are required to find even  the smallest new breakthroughs and innovations, and corporations must invest millions of dollars in research and development. As John Michael Greer pointed out:
The fusion research community, in effect, is being held hostage by the myth of progress. I’ve come to think that a great deal of contemporary science is caught in the same bind.  By and large, the research programs that get funding and prestige are those that carry forward existing agendas, and the law of diminishing returns—which applies to scientific research as it does to all other human activities—means that the longer an existing agenda has been pursued, the fewer useful discoveries are likely to be made by pursuing it further.  Yet the myth of progress has no place for the law of diminishing returns; in terms of the myth, every step along the forward march of progress must lead to another step, and that to another still. 
Held Hostage by Progress (The Archdruid Report)

Plus earlier research is focused on the really big problems. Once those are solved, often new "problems" are little more than inconveniences, such as the refrigerator that cools down room-temperature drinks in five minutes. The benefits for this feature are negligible while the costs are substantial; this refrigerator retails from many times that of a conventional one. As Robert Gordon pointed out, indoor plumbing, sanitation, refrigeration, electrification, instantaneous communication and universal personal mobility are much bigger and more transformative than online photo albums. Things like universal education and women entering the workforce can only be done once.

So this is the critical takeaway: diminishing returns applies to everything, including technology, innovation, society, and economic growth. There is a point at which more is not better, yet we are unable to recognize this. More is not always better, and the benefits decline over time. As certain forward-thinking economists have pointed out, economic growth has consequences, and the consequences can potentially outweigh the benefits, in pollution, inequality, fragility, quality of life, etc.  So many innovations are simply attempting to solve problems caused by earlier innovations, such as cancer treatments, large-scale geoengineering projects, etc. Others are desperate attempts to maintain the status-quo, as the above mentioned fusion power, electric cars, vertical farms and so on. The amount of true net benefit to more innovation is becoming problematic. Innovation is less about solving problems than generating required profits for holders of capital who expect ever increasing returns to their investment. But as we see from the above, this is not possible forever.

So, armed with this understanding, we know that the future cannot be like the past. Unlike what the mainstream media preaches, we cannot wait, Beckett-like for some sort of innovation to fix our escalating problems. And we cannot expect the high-growth type of society we've come to expect and rely upon, and that we've built all our institutions around, to continue. That time has passed.

Friday, July 26, 2013

Assorted Food Links

Our Coming Food Crisis (New York Times):
What’s more, when food and forage crops, as well as livestock, have had to endure temperatures 10 to 20 degrees higher than the long-term averages, they require far more water than usual. The Western drought, which has persisted for the last few years, has already diminished both surface water and groundwater supplies and increased energy costs, because of all the water that has to be pumped in from elsewhere.

If these costs are passed on to consumers, we can again expect food prices, especially for beef and lamb, to rise, just as they did in 2012, the hottest year in American history. So extensive was last year’s drought that more than 1,500 counties — about half of all the counties in the country — were declared national drought disaster areas, and 90 percent of those were hit by heat waves as well.

The answer so far has been to help affected farmers with payouts from crop insurance plans. But while we can all sympathize with affected farmers, such assistance is merely a temporary response to a long-term problem.

- One strategy would be to promote the use of locally produced compost to increase the moisture-holding capacity of fields, orchards and vineyards...And we have a great source of compostable waste: cities. Since much of the green waste in this country is now simply generating methane emissions from landfills, cities should be mandated to transition to green-waste sorting and composting, which could then be distributed to nearby farms.

- Second, we need to reduce the bureaucratic hurdles to using small- and medium-scale rainwater harvesting and gray water (that is, waste water excluding toilet water) on private lands, rather than funneling all runoff to huge, costly and vulnerable reservoirs behind downstream dams.

- Moreover, the farm bill should include funds from the Strikeforce Initiative of the Department of Agriculture to help farmers transition to forms of perennial agriculture — initially focusing on edible tree crops and perennial grass pastures — rather than providing more subsidies to biofuel production from annual crops. Perennial crops not only keep 7.5 to 9.4 times more carbon in the soil than annual crops, but their production also reduces the amount of fossil fuels needed to till the soil every year.

- Because of recent episodes of drought, fire and floods, we are facing the largest shortfall in the availability of native grass, forage legume, tree and shrub seeds in American history. Yet current budget-cutting proposals threaten to significantly reduce the number of federal plant material centers, which promote conservation best practices.

- If our rangelands, forests and farms are to recover from the devastating heat, drought and wildfires of the last three years, they need to be seeded with appropriate native forage and ground-cover species to heal from the wounds of climatic catastrophe.

Investing in climate-change adaptation will be far more cost-effective than doling out $11.6 billion in crop insurance payments, as the government did last year, for farmers hit with diminished yields or all-out crop failures.
Sounds good. What's the problem? Big Ag opposes these, of course. They would rather sit back and collect the insurance.

This article claims it's mainly a problem of distribution:
"We have two or three times the amount of food right now that is needed to feed the number of people in the world," said Joshua Muldavin, a geography professor at Sarah Lawrence College who focuses on food and agricultural instruction. "A lot of people aren't analyzing the situation correctly. We can deal with short-term food shortages after a disaster, but fixing long term hunger gets ignored," he said.

"We don't have food shortage problem," said Emelie Peine, a professor of international politics and economy at the University of Puget Sound. "What we have is a distribution problem and an income problem," Peine said. "People aren't getting the food, ... and even if [they] did, they don't have enough money to buy it."

If there is enough food, a major problem causing scarcity is what we do with it, said Roger Johnson, president of the National Farmers Union, an advocacy group for U.S. farmers. "Something in the area of up to half of all that's produced is wasted," said Johnson, who runs his own farm in North Dakota.
A hungry world: Lots of food, in too few places (CNBC)

We do waste a lot of food: Tristram Stuart: The global food waste scandal (TED)

We also use a hell of a lot of energy:
Just how much energy does it take to fuel the US food system? A lot. It required just over 12 Calories of fuel to produce one Calorie of food in 2002, once waste and spoilage were accounted for.1 Of these, 1.6 fuel Calories were used in the agricultural sector, while 2.7 were used to process and package food. Distribution, which includes transportation, wholesale and retail outlets, and food service operations such as restaurants and catering services, used another 4.3 fuel Calories. Finally, food-related household energy use added another 3.4 Calories to the tab. This figure has been on an upward trend; it took just over 14 fuel Calories to deliver a Calorie of consumed food in 2007, and if we extrapolate this trend the US food system requires about 15 Calories of fuel to deliver a Calorie of consumed food in 2013.

As high as this 15 Calorie figure might seem, it’s surely an underestimate. The report from which these data were drawn left out a number of sectors within the US food system that require energy as a key input to their operations, including research and development, waste disposal, water provision, and food system governance, among others. If we did a more expansive assessment of the energy use in the US food system, the total energy demand would probably be 15-20 Calories of fuel per consumed food Calorie, or more.

To put these statistics into perspective, 15 fuel Calories equates, in energy terms, to 1.2 gallons of gasoline embodied in the average American’s daily diet. That’s 420 gallons of gasoline per person per year to deliver Americans the food they eat, an amount on par with the 430 gallons the average American burns in their car. The US food system is admittedly more energy intensive than most, but high fuel demand in the service of food procurement is the norm around the world.
The Energy Cost of Food (Resilience.org)

And here's a good reminder of the complex energy-intensive systems that permit the supermarket abundance and convenience we enjoy. And, as the article reminds us,  most of it is completely invisisble:
"The diet of the average American is almost entirely dependent on the existence of a vast, distributed winter--a seamless network of artificially chilled processing plants, distribution centers, shipping containers, and retail display cases that creates the permanent global summertime of our supermarket aisles."

This is an infrastructural truth that it's possible to take as a kind of metaphor or hyperbole because it's almost impossible to believe the scale and complexity of the systems that undergird our lives. But just imagine opening your freezer and being able to see the true narrative of the foods inside. The story isn't solely one of agriculture, of farmers picking the food, and tossing it in the back of the truck. There's so much technology and transportation embedded in those frozen peas, all of which Twilley excavates.

And it's not just the stuff in the freezer! "At least 70 percent of the food we eat each year passes through or is entirely dependent on the cold chain for its journey from farm to fork, including foods that, on the surface, seem unlikely candidates for refrigeration," Twilley writes in introducing her show. "Peanuts, for example, are stored between 34 and 41 degrees Fahrenheit in giant refrigerated warehouses across Georgia (which produces nearly half of the country's peanut harvest)."
A Journey Into Our Food System's Refrigerated-Warehouse Archipelago (The Atlantic)

And the stakes are high: We Are Now One Year Away From Global Riots, Complex Systems Theorists Say (Vice)

Wednesday, July 24, 2013

Homage To Detroit



One of the books I've been meaning to read for awhile is George Orwell's Homage to Catalonia about his experiences in the Spanish Civil War. I'm fascinated about this period when anarchy was not just a theory, but a real force on the ground. As I always emphasize, I think it's important to study history to inform ourselves about what's possible. I would say that studying the history of this period in Spain is essential for those who are interested in ideas of anarchism, collaborative decision-making and self-government, worker self-direction, collective ownership, and similar ideas, and there's much to learn from it. Experience trumps theory ten times out of ten.

Now, unfortunately, my knowledge of this historical period is quite limited. However, it drifted through my head when I read the following article in The New York Times just a few days before Detroit's recent municipal bankruptcy hit the headlines:
 But as with many here who have wrestled with the practical realities of living in this city, Ms. Boyce said she would not mind if some entity other than the city took over the management of Belle Isle, a park whose plan was conceived in the early 1880s by Frederick Law Olmsted. Ms. Boyce goes to the park for exercise, wearing a fanny pack that at times contains a gun — “Do you see any city police here?” — and bemoaning several locked restrooms that have portable toilets planted in front of them.
“I would love to see it leased to the state,” she said of the park. “They’d take better care.”

Recent developments among Detroit’s elected leaders have only added to the sense that significant changes in the city are perhaps even preferable. Two of the nine City Council members have resigned. (One said he was leaving to work for the emergency manager’s office.) Then, Charles Pugh, the Council president, had his salary stopped and power stripped by Mr. Orr after the councilman abruptly stopped showing up for meetings and disappeared from public view.

“Where Is Charles Pugh?” a headline at the top of the front page of The Detroit Free Press asked.

“For a lot of people, I think city government has become a nonentity here,” said Kurt Metzger, the director of Data Driven Detroit, which tracks demographic, economic and housing trends in the region. “People almost feel like the city goes on in spite of city government — that city government in this case certainly doesn’t define the city — and that affects how they’re feeling about what comes next.”

Recently, Mr. Orr indicated that Detroit was getting out of the business of electricity distribution. An independent authority is already planning to take control of the city’s streetlights, 40 percent of which, Mr. Orr’s office said, were not working in recent months. Similar handoffs are being weighed for the water and sewer services, and possibly more.

While many who have been through municipal bankruptcies say such moves often mean more budget cuts to city services, Mr. Orr has called for spending about $1.25 billion over the next 10 years on improving city infrastructure and services, including the police. Last week, James Craig, Mr. Orr’s choice for police chief, arrived to face a city that had seen five chiefs in as many years and had the highest rate of violent crime in 2012 of any city with more than 200,000 residents, according to a report by Mr. Orr.

“Whatever the solution is — a negotiated plan or a bankruptcy proceeding — the end result is going to be better services,” Bill Nowling, Mr. Orr’s spokesman, said. “This is all about getting Detroit strong, viable and solvent.”

Frank Ponder, 45, who works at a hospital here, said major changes in the city, even bankruptcy, now seem all but certain. “Everybody had all these ideas about saving Detroit, and nobody’s ideas actually worked,” he said. “At a certain point, you have to stop fooling yourself.” 
Financial Crisis Just a Symptom of Detroit’s Woes (NYT)

Here's an idea: Anarchism! It sounds like you're pretty much there already, folks. Like Catalonia during the civil war, there is literally nothing to lose! There's an idea that hasn't been tried.

The immediate thought that went through my head upon reading those paragraphs was this one: why don't the people just take these things over and run them themselves? Why wait for some "other entity" to take over management of the parks, why not just do it yourself? After all, joblessness is rampant, so plenty of people have the time. It's not like there's a shortage of personnel.

And why "get out of the power business?" You should be doing the exact opposite! Take over the electric company and run it for the good of the community, for your own use, instead of for profits to absentee investors. Please, don't sell off your sewer and water systems to "a private entity," collectivize it and run it yourselves. If people have power and sanitation, they can bootstrap whatever else they need.

Don't sell of your assets off to private investors, collectivize them! You have everything you need already. Don't be a victim. Don't be steamrolled by the neoliberal steam train. Don't play along with the Shock Doctrine, that's exactly what they want. That's why they brought you to your knees in the first place, and now they're going to take it all.

Why put up with lousy public services? Collectivize and provide those services for yourself. After all, they literally can't be worse. You have nothing to lose; there's no farther to fall. It's the ideal scenario. Anarchist Spain provides a historical precedent. It would seem from the above article that Detroit is the ideal place for an anarchist revolution, much like Catalonia in the teeth of its civil war. After all, reading that article, I ask you, what is there to lose? I mean, to large extent, Detroit already is in a state of anarchy. Reading the above, it seems like government is more a fiction on the page than a reality. And it's much easier to do this on a municipal level than the level of a nation-state, where it's nearly impossible.
Much of Spain's economy was put under worker control; in anarchist strongholds like Catalonia, the figure was as high as 75%, but lower in areas with heavy socialist influence. Factories were run through worker committees, agrarian areas became collectivized and run as libertarian communes. Even places like hotels, barber shops, and restaurants were collectivized and managed by their workers. George Orwell describes a scene in Aragon during this time period, in his book, Homage to Catalonia:

    ­"I had dropped more or less by chance into the only community of any size in Western Europe where political consciousness and disbelief in capitalism were more normal than their opposites. Up here in Aragon one was among tens of thousands of people, mainly though not entirely of working-class origin, all living at the same level and mingling on terms of equality. In theory it was perfect equality, and even in practice it was not far from it. There is a sense in which it would be true to say that one was experiencing a foretaste of Socialism, by which I mean that the prevailing mental atmosphere was that of Socialism. Many of the normal motives of civilized life—snobbishness, money-grubbing, fear of the boss, etc.--had simply ceased to exist. The ordinary class-division of society had disappeared to an extent that is almost unthinkable in the money-tainted air of England; there was no one there except the peasants and ourselves, and no one owned anyone else as his master."

The anarchist held areas were run according to the basic principle of "From each according to his ability, to each according to his need." In some places, money was entirely eliminated, to be replaced with vouchers. Numerous sources attest that industrial productivity doubled almost everywhere across the country and agricultural yields being "30-50%" larger, demonstrated by Emma Goldman, Ausgustin Souchy, Chris Ealham, Eddie Conlon, Daniel Guerin and others.
Despite the critics clamoring for maximum efficiency, anarchic communes often produced more than before the collectivization. The newly liberated zones worked on entirely libertarian principles; decisions were made through councils of ordinary citizens without any sort of bureaucracy. (The CNT-FAI leadership was at this time not nearly as radical as the rank and file members responsible for these sweeping changes.)

In addition to the economic revolution, there was a spirit of cultural revolution. For instance, women were allowed to have abortions, and the idea of "free love" became popular. In many ways, this spirit of cultural liberation was similar to that of the "New Left" movements of the 1960s.
http://en.wikipedia.org/wiki/Anarchism_in_Spain#1936_Revolution

But maybe I'm being idealistic. Maybe I'm being unrealistic. It's probably just a pipe dream, but it seems so frustrating that the ideal conditions for this are occurring right now, and Detroit could be a point on the way forward rather than be just another fire sale for the one percent to come in, buy up assets forged over generations, and become an aristocratic rent-seeking class. New ideas can only emerge when the old ideas have passed away and are no longer viable. Imagine African-Americans, after all they've been through in the last century, running a city for themselves, by themselves. They can hire whatever expertise they need. I'm sure there are a few radical economists willing to lend a hand, if the will is there.

I feel like I'm sitting here impotent on the sidelines, but I hope somebody, somewhere, will read these words and take them to heart. Maybe the people of Detroit just aren't up to the challenge. And that's too bad. But I wish more idealistic and committed radical folks would get there, start organizing, and start creating a DIY alternative to the current dysfunctional system. It's better to light a candle than to curse the darkness. (And yes, the idea has floated through my head, but I already live in a Rust-Belt town on the other side of da lake der hey, and I'd like to think I'm needed here - it is my home, after, all). Here's a positive comment posted today on Naked Capitalism that describes one such person who's put their money where their mouth is:
Enticed back in ’09 by those “Houses for $1″ stories on the web, our family decided to give it a go in a city similar to Detroit. After two years of looking at houses and learning about the auction and Fannie Mae hustles, we found (on Craigslist, of course) a lot with two houses in a palatable location for less than $4,000.

Neither house was occupied. The larger two-family had been unoccupied for at least ten years according to our neighbor. We decided to focus on the two-family since it was already gutted, i.e. most of the plaster and lathe had been removed along with the wiring and plumbing except for the drain system under the basement floor and the water line coming in from the street.

We moved into the house after installing one bathroom, the electric panel and getting a few rooms wired. We created privacy with black plastic walls (like “Dexter”), heated with ventless propane and electric heaters and dressed warmly inside for what was fortunately a mild winter.

Two years later, we’re finished with wiring, and we’re installing a second and third bath and putting up our last load of drywall. We’ve done all the work ourselves, and while everything took longer and cost more than originally estimated, it’s all been done without incurring any debt.

We picked up the lot behind us after the house was condemned and the property tax foreclosed. It cost us $1 plus shipping and handling. The neighbor to the north offered us his four-plex for $1 since he’s given up on rehabbing it and owes $10,000 in back taxes. We’ll wait for the tax foreclosure since that provides an ironclad deed under state law.

The neighborhood is ethnically mixed. There are whites of mostly eastern European descent. (We have a great Slovenian restaurant around the corner.) There are African Americans. And there are Asians (we’re at the edge of the area with most of the Asian restaurants, supermarkets, etc.) Right in our neighborhood, an old school has been torn down and replaced with a year-round urban farm that employs more than a dozen people. The state’s extension service has moved into the one part of the school that remains and will be offering classes in food growing and preservation along with free plants.

We’re a ten minute bus ride from a downtown that houses a great public library, a fine theatre district and major sports stadiums/arenas. It’s a ten minute drive to cultural district with great art museums and a concert hall. We’re less than two miles away from the large university our adult children will be attending in the fall.

Has it been trouble free? Our old car was stolen a year ago from the front driveway, though it was recovered 5 days later more or less undamaged about 5 miles away. A Chinese restaurant at the end of the street is a regular source of violence with shooting deaths every year or two. The chain pharmacy a half a block away is held up a couple of times a month. These are all issues not with our neighborhood’s residents but because these are establishments at or near major crossroads and attract those with criminal intent from other parts of the city.

We’ve done this as a family. I think it would be even more successful if done by a group of people committed to a similar project. Go for it.
http://www.nakedcapitalism.com/2013/07/links-72413.html#comment-1317624

Nice work. That's what I'm talking about.

Yes, Detroit, by all means stop fooling yourself. Stop fooling yourself that the professional political and investor classes give a damn about you, that selling out to the money men will make things better, that bankruptcy without profound social change will turn things around, or that the current economic paradigm works, and that you are powerless and helpless before it. It's got to stop. The above commenter quotes the Spanish anarchist Buenaventura Durruti:
“It is we [the workers] who built these palaces and cities, here in Spain and in America and everywhere. We, the workers. We can build others to take their place. And better ones! We are not in the least afraid of ruins. We are going to inherit the earth. There is not the slightest doubt about that. The bourgeoisie might blast and ruin its own world before it leaves the stage of history. We carry a new world here, in our hearts. [...] That world is growing in this minute.”

Tuesday, July 23, 2013

Forbidden Economic Thoughts

 Here are a few snippets from some recent podcasts that I listened to that have stayed with me, and made very good points. I was going to add comment, but there's enough here already. I'm sure I'll be referring back to them often.

This is a recording of a talk by Michael Goodwin, the author of Economix. The talk was given in New York as part of the Full Circle Series and recorded by KMO of the C-Realm podcast:
It turns out that here is a whole forgotten tradition of economics, a very liberal and almost radical tradition of economics that has really; as I said, it’s forgotten. It’s amazing the degree to which it’s fallen off the radar. The most prominent practitioner of this, was a guy named John Kenneth Galbraith. He was a big-shot academic, but he also wrote popular books, and his first big best–seller was called The Affluent Society. And If anybody remembers that book at all, people say that Galbraith was being arch or sarcastic when he was talking about "the Affluent Society," and that he was talking about really, how poor we were, or whatever. That’s not true. The book The Affluent Society was exactly about that.

His point was, and he was his writing in the fifties, his point was, we’ve solved the problem of production. We can make anything we want; any thing we want, in more or less the quantities we want it. Anything that comes from private industry, whether it’s a car or a razor or whatever, it’s coming in enough profusion that we don’t really have to worry about that aspect of the economy anymore. And his evidence was, look around you.  Look at all these people trying to convince you to buy stuff. Hungry people don’t need to be convinced to buy food. Naked people don’t need to be convinced to buy clothes. The most advertising that anyone would do in that situation is just to tell you where to find it. But that’s not the sort of advertising he was seeing in the fifties. That was the fifties; it’s gotten much worse since then. If we were still at the other space; at the other space there were ads in the elevator, because God forbid you should spend that ten-second ride without possibly being convinced to buy something.

And so, all this advertising is expensive, and they wouldn’t do it if we actually wanted the things they were making. Which is actually a pretty radical thing to say, because all our economic ideas are based on the idea that at the end, when people make stuff and sell it, they’re filling our wants. That I may want a silk shirt one day, and a cool new razor the next day, and if I do, that’s great because somebody’s actually coming and supplying that want, and the amount of misery in the world goes down a little bit. But if we didn’t want the thing until these people actually made it and convinced us to want it, then the whole system is not quite as good as we thought.

Far more radical was his next book called The New Industrial State. That’s where he asked the question, ‘well, who’s doing this?’ And obviously you or I can’t afford gigantic marketing campaigns. His point, which is pretty obvious, is that these giant marketing campaigns are coming from very big businesses. But then he made the point that not only do these big businesses like to convince us to buy things, but they actually need to. They have no choice. And he took the example of a car: You start designing a car, you have to tool up, you have to hire the workers, you have to find a plant, all this stuff. And mainstream economics would have it that, after all this process, the car company goes to the free market and lets supply and demand dictate how much they’re going to sell and at what price. And his point is, they can’t possibly do that! They have to control the whole process, including sales. When they start designing the car, they have to know more or less how much it’s going to cost, and they have to be pretty well sure that they’re going to sell enough. And they ensure they’re going to sell enough by advertising.

So GM manufactures cars, and then GM manufactures our desire for cars, and everybody’s happy unless you think we don’t need quite so many cars. Now note how radical this is. Again, you’re getting very far away from the image that we have of businesses as just these helpful things that are giving us things we want.
Galbraith was very big until the nineteen-seventies. And to really take him seriously means abandoning all of economics and a lot of our social thought and completely rethinking our economy, and that’s very hard. And things seemed to be going okay, so he really got dropped and forgotten. And one reason is, we don’t like to be told we’re being manipulated. We like to think that we’re making our own decisions.
Goodwin goes on to describe the ways the food industry has manipulated us into eating crap food that is bad for us.

The next discussion is from the C-Realm podcast itself, from an interview with Ben McLeish
BM: There are a host of technologies that are sitting on the sidelines right now within the entire world that are being developed and maintained and studied by scientists, and by social scientists as well, doesn’t have to be a man in a labcoat, which is probably what people are thinking of, that could be put to use tomorrow, today, yesterday, a couple years ago. And they have not been. For instance, I’ll give you one. Nanobatteries or nanosolar. Highly, highly efficient solar panels, highly, highly efficient, long-lasting, rechargeable batteries that have minimal waste that are much better than the ones that we have now.
What we come to the table with is to say, listen, there’s a very good reason why these aren’t being put to use, and it has nothing to do with their unavailability or their expense, it is in fact that the guiding value system is one that relies on debt, is one that relies on waste, and turnover and profit rather than actual efficiency rather than market efficiency, and that that’s the point we want to make. And that you would solve a huge amount of problems by just acknowledging that and setting about fixing that, if you see what I mean.

KMO: I do. I’d like to have you expand, though, on the difference between actual efficiency and market efficiency.

BM: So, market efficiency, particularly in the capitalist system now, and this recognized also by people like the Austrians, is the efficiency of producing as much profit as possible out of the materials and labor that you have. So, in other words, it is financially, or market efficient, to produce products that break down, that work suboptimally, that need replacing, that need servicing, and that have limited capacity in their actual functions. Now anybody who owns a computer of any kind, this is true for Apple, this is true for PC, it’s true for Lenovo, it’s true for anything, will know how often their computers break down. Granted, it’s a lot better than what we had. We’re not saying we should go back to the abacus, although the abacus is very powerful on its own as well, but not so good for viewing DivX files I would say. This is something that people intrinsically know about and they moan about their household items breaking down, or their car breaking down, or their house breaking down, or the road systems breaking down. As large as you want to get, you’ll notice this.

Now, technical efficiency is of course what people are actually asking for when they complain about the breakdown of their products, something called inbuilt inefficiencies or planned obsolescence. Intrinsic and planned obsolescence, for which there are rather decent films on the subject as well. One claim is that this inbuilt obsolescence, this deliberate obsolescence, is in fact a myth because that would be selected against in a particularly market-orientated or capitalist system. There’s a great film called Pyramids of Waste that actually digs out historical documents of the [intelligible] consortium conspiring to produce lightbulbs that break extremely quickly. This is true of not just of lightbulbs but of really everything.

Technical efficiency is the very opposite. It’s the deliberate building of the most powerful, upgradable, recyclable, and long-lasting goods, services, and orientations of technical application in society. I do mean in society, I mean the whole world, for their own sake, rather than to maximize profit and create so-called market efficiency.

KMO: Talk about the resistance of the current market system to that approach.

BM: My favorite story, which is the one that Lawrence Lessig, the copyright professor from Stanford University always mentioned, was the story of a gentleman who invented FM technology. FM technology is everything that we’re used to now, although digital radio is creeping in now, and it was essentially much cleaner than AM. You can try this out now by pressing the AM button on any radio that’s near you. AM had a lot of static, didn’t have as much distance in terms of broadcast power, and when this was first shown to the world it was, in fact, on the back of a project that was run by AT&T. And it was decried as being competition to the existing AM market. Even though it’s a better waveform, even though it’s a more efficient, if you like, technology; it uses less power as well. This was heralded as something that would be expensive and dangerous. It’s expensive because you have to change all your incumbent systems that are there and that affects your profit if the only thing you’re looking at is the only thing that’s important.

And this gentleman was actually hounded to his death by years and years of working on patent litigation against AT&T. This gentleman’s name was Edwin Armstrong, a genius now finally recognized in the inventor’s hall of fame and put on stamps. But, all of that, and of course, his FM technology adopted widescale now, better for music and all of the other technical reasons, but of course all of that comes after the fact that he stepped out of his eleventh-story building after seeking financial bankruptcy from  years of litigation. One man versus a corporation and the essential destruction of his legacy in any meaningful sense because of course nobody knows who he was, and it only meant a huge delay in FM.

Now of course FM is a fairly inconsequential technology. What about more life-preserving technologies like new cures for cancer? I say new; ones that have been around for a very long time and have not ever been put into place because its more efficient marketwise, financially, to have repeat prescriptions of poisons and all of that, instead of what would actually be a cure for a problem.
And that’s really the model that we talk about for really all of economics. We compare it based on the work of John McMurtry of the University of Guelph, to a kind of cancer. And that’s not fanciful, it’s not even a metaphor. It’s the same market development. It’s the increase of goods and services that are feeding off the failures and the inefficiencies of the market itself rather than solving the problems. That’s very much like the behavior of cancer cells within a life host that feed off the life host’s capacities and systems and if you like ‘natural capital’ in order to feed a growing tumor of pollution and waste and useless money profit.
Here's Professor Richard Wolff on the same topic on the Extraenvironmentalist podcast:
We have highly efficient automobile companies in the United States. We have highly efficient rubber tire manufacturers. We have highly efficient road contraction companies. But we have the most inefficient transportation system the world has ever seen. Let us look at it with an eye to efficiency. Is the private automobile an efficient way to move people across distances? The answer is, no.

Automobiles now are the major user of fossil fuels in the United States. Automobiles are the major polluter of air in the United States. Automobiles foul huge quantities of our surface because they are rusting hulks buried in the ground with all sorts of toxic results. Automobiles are the largest killers of American people in automobile accidents far exceeding what all all our wars do in the way of killing and wounding people.

So on the grounds of fuel efficiency, on the grounds of pollution efficiency, on the grounds of the efficiency of life, death and wounding, we would be much better off if we had a system of light rail transportation, of van transportation, of regular railroad and boat transportation. It’s much more efficient. It would waste less resources, and on and on and on. It is an example of stunning inefficiency. Our housing system is the same. It’s much cheaper to heat houses that are built collectively, whether they’re apartment houses or garden apartments or cooperative housing developments. Child care, laundry, home maintenance, fuel, heat, electricity, all of it is much more efficiently provided to people living in groups of housing units than people living in individual, isolated, single-family homes.
We have the private car and we have the private home in the United States because it was profitable for capitalist enterprises to do that. The fact that they are in themselves efficient does not offset the grotesque inefficiency of  allowing their profit seeking the shape the otherwise inefficient mode of housing and transportation, and I just chose those as examples. But that’s the way we culturally train our people. We tell them that capitalism is efficient, without telling them all the areas in which it is the opposite.
And finally, from a discussion with David Collum on the Kunstlercast:
...This goes for me all the way back to high school. I remember my brother was an econ major in college and he said that an economy was unhealthy unless it was growing. And even then I said, ‘that can’t go on forever.’ That’s a Malthusian concept. And I to this day don’t get that. I don’t understand why, let’s say, GDP didn’t grow. Why is that not just existing in our current form? I’m lost, and I get really lost at the idea that we just have to keep growing.
And what I do know is about mathematics is that anything to some nth power where n is bigger than 1, right, so it’s 3 percent growth rate, n is 1.03, that mathematical function blows up. And so, you say, how does it blow up? A great analogy is if your ancestor at the time of Christ had $100.00 and put it at a 3 percent above inflation bearing account and put it in your name, you’d now be worth 10^28 dollars. To calibrate that, I’d have to do some quick math, but it’s something like covering the United States in M&M’s 100,000 miles deep.

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The Royal Baby: the only child born today who knows he'll have a job in twenty years.

Monday, July 22, 2013

War Before Civilization?

Humans aren't angels, but large-scale war and killing appears to be a consequence of settled farming societies:
Researchers from Abo Academy University in Finland say that violence in early human communities was driven by personal conflicts rather than large-scale battles.They say their findings suggest that war is not an innate part of human nature, but rather a behaviour that we have adopted more recently. The study is published in the journal Science.

Patrik Soderberg, an author of the study, said: "This research questions the idea that war was ever-present in our ancestral past. It paints another picture where the quarrels and aggression were primarily about interpersonal motives instead of groups fighting against each other."

The research team based their findings on isolated tribes from around the world that had been studied over the last century. Cut off from modern life and surviving off wild plants and animals, these groups live like the hunter gatherers of thousands of years ago. "They are the kind of societies that don't really rely on agriculture or domestic animals - they are primitive societies," explained Mr Soderberg. "About 12,000 years ago, we assume all humans were living in this kind of society, and that these kind of societies made up about for about 90% of our evolutionary path."

Using the modern tribes as an analogy for earlier society, the researchers looked at cases where violent deaths had been documented. They found 148 such deaths but very few were caused by war. "Most of these incidents of lethal aggression were what we call homicides, a few were feuds and only the minority could be labelled as war," Mr Soderberg said.

"Over half the events were perpetrated by lone individuals and in 85% of the cases, the victims were members of the same society." Most of the killings were driven by personal motives, he added, such as family feuds or adultery. The researchers admitted that modern communities were not a perfect model for ancient societies, but said the similarities were significant and did provide an insight into our past.

Mr Soderberg said: "It questions the idea that human nature, by default, is developed in the presence of making war and that war is a driving force in human evolution." Instead, he thinks that war may have developed later. As the hunter gatherers made the transition to farming, groups became more territorial and with a more complex social structure. "As humans settled down, then war becomes more dominant and present. For these primitive societies, war has not yet entered the picture," he added.
Primitive human society 'not driven by war' (BBC). I may have to head to my local library to pick up a copy of this study. I wonder what other things about "primitive" societies may be untrue. Maybe they didn't all die at 18 either.

Incidentally, this is from an earlier post. Note how the violence escalates after the transition to a farming/herding way of life and the scuttle for scarce land:
Linda Fibiger, an archaeologist at the University of Edinburgh in Scotland, and her colleagues focused on the late Stone Age, when European hunter-gatherers had transitioned into farming or herding animals.

Some mass graves unearthed from that time contained mostly males who had died in violent conflicts. As such, researchers had thought women were spared from conflicts due to their potential childbearing value, Fibiger told LiveScience. But looking only at the aftermath of big, bloody conflicts can obscure the day-to-day realities of Neolithic farmers. "It would be like only looking at a war zone to assess violence," Fibiger said. "That's not going to tell you what's going on in your neighborhood."

To see what more humdrum days looked like for these Stone Age farmers, the team assessed 378 skulls from collections throughout Sweden and Denmark from between 3900 B.C. and 1700 B.C. They distinguished bumps due to falls or accidents from violent wounds, which might leave evidence such as an "axe-shaped hole in the skull," Fibiger said.
Nearly 10 percent of the Swedish skulls exhibited signs of violent injury, and nearly 17 percent of the Danish skulls had such wounds. Men had more nonfatal injuries, but women were just as likely as men to have lethal head wounds — which can be identified because they never healed. That suggests these ancient herders routinely experienced violence, likely due to raids, family feuds, or other daily skirmishes with competing groups, Fibiger said.
Battered Skulls Reveal Violence Among Stone Age Women (Live Science)

See also: Farming 'spread by migrant wave' (BBC) and How European Farmers Spread Agriculture Across Continent (Live Science)

Sunday, July 21, 2013

Peak Oil Has Arrived

Let's talk about Peak Oil.

The impending change of status of the venerable site The Oil Drum has caused a bit of soul-searching on the Web. Fortunately, many of the best writers on TOD have gone off and formed their own blogs like Nicole Foss, Stuart Staniford, Ugo Bardi, Gail Tverberg and others, so we won't be devoid of content or analysis. And Energy Bulletin had broadened its scope as Resilience.org. However, this has not stopped some people from claiming that Peak Oil is dead or disproven, or something of that sort. This is usually done by misunderstanding what Peak Oil actually meant, or by constructing some sort of straw man.

For what they miss is that the Peak Oil scenario spun by it's proponents beginning in the Nineties is happening right on schedule. And as it moves from theory from reality, we can see which camps were correct. And the answer, not surprisingly, is both and neither.

To some extent the "conventional" economic story played out - as a resource became scarcer, prices rose giving incentives to the market to "innovate," making the resource more plentiful by finding substitutes, promoting use efficiency, developing new drilling technologies, bringing previously unrecoverable sources to market, and stimulating new exploration, just as economic theory dictates.

But this story has far from a happy ending. We are not substituting fossil fuels with superior substitutes. We can't, because no energy source is as economical and as energy dense as hydrocarbons to exploit, as physicists have pointed out. Instead, we're going after inferior sources of hydrocarbons - "tight" oil, tar sands, shale oil, liquid condensates, arctic drilling, methane clathrates, artificial algae biofuels, used french-fry grease, etc. Fracked natural gas (methane) and low-grade coal are being used more and more as substitutes in place of liquid fuels.

All of the above are not inconsistent with the Peak Oil scenario of course, they are part and parcel of it. Peak Oil pointed out that we went after the easiest and cheapest to exploit sources of fossil fuels first, and that future sources would be inferior and harder to access. Check. The United States is set to become Saudi Arabia only because oil is so expensive that we pulling out all the stops and going after the dregs everywhere on the North American continent. We are doing this not because oil is cheap, but because it is dear - which is what Peak Oil theory predicted all along. Oil is expensive and needs to be for this scenario to pan out. That this would have deleterious effects on the global economy was another prediction of Peak Oil that was essentially correct. It was never about running out of oil, but about running out of cheap oil.

These are not triumphs, they are desperate measures. Rather than testaments to human ingenuity, they are testaments to the Vicious Circle Principle. We have become totally wedded to the industrial way of life and cannot live without it. Therefore, we are forced to innovate - and become dependant upon those innovations, putting us in an even more precarious position than before. Meanwhile, we are merely holding off the inevitable. Peak Oil is not moving us toward superior sources of energy; it is a desperate rearguard action on the way to decline. It reminds me of how the Mesopotamians planted salt-tolerant barley in place of wheat as irrigation and a high water table began the salinization of their fields. Obviously, this only delayed the inevitable, as the dessicated and abandoned mud brick ruins of Iraq attest.

And given the extreme wanton wastefulness of the industrial regime under capitalism (where everything is designed for maximum profitability to a tiny economic elite as opposed to efficiency), and the system's need for exponential growth (due to usury and Ponzi dynamics), even this scenario runs into the wall on a long enough timeline. Even one percent growth causes doubling every 70 years.

So high prices; low flow rates; low net energy; huge externalities including earthquakes, flammable drinking water, and climate change; environmental destruction; extensive resource needs (especially water); and huge upfront capital investment costs all mean that despite proclamations of Peak Oil being "over" or a "myth," it is, in fact, occurring more or less as some of the more sober experts claimed it would. Can something be disproven by actually occurring?

I think what it does end up disproving are some of the hard-core "doomers." We are not headed toward James Howard Kunstler's "World Made by Hand," anytime soon. We will not be living in isolated small towns spending our days ploughing fields behind a draft horse and our evenings playing the fiddle by candlelight within the next fifty years. We will not all be living like Amish with Internet, unless, of course, we choose to be Amish. In other words, put away your "collapse porn."

But neither is business as usual an option. I've always felt that the inherent problems with our economy have less to do with oil and more to do with the inherent contradictions and instabilities within capitalism, such as overproduction, extreme inequality, mass unemployment caused by automation and outsourcing, government corruption, diminishing returns to scientific discovery and innovation, exponential growth of debt, and the like. After all, the Great Depression occurred on the upswing of crude oil production. And the unravelling of the Soviet Union was due to a lot more than the temporary low prices for crude oil due to the 1980's oil glut. They didn't collapse because of a lack of oil - Russia's a major exporter even today. The same goes for Argentina, Greece, and a number of other locations.

To some extent, doomerism was always the easy way out. You did not have to reform the system because it would collapse of its own accord. In its place would spontaneously arise the small-scale localized economies free of the Wal-Mart race-to-the-bottom and fast-food blandness we have become accustomed to. Current elites would be impoverished, bloated government would shrink to a manageable size, and manufacturing would move back to the United States reactivating and reanimating the heartland. The global economy where you are nothing but a "consumer" purchasing products made in robotized factories far away in a warehouse staffed by demoralized minimum wage workers would be no longer viable, and self-sufficient homesteads and local small businesses would once again be the norm.

But, several years into the Peak Oil scenario, note that none of this is happening. Instead, the poor are getting poorer, the rich are getting richer, and the elites are more isolated than ever. Big banks are still above the law, speculation is rife, small businesses are failing left and right, and all our stuff is still imported from the other side of the world. The Rust Belt is still losing people, and the Sun Belt is still gaining them (although driving is down). Our farms are still supersized and centered on corn and soybean yields. We're fracking the hell out of everything, genetically engineering crops for global climate change, engaging in economic "austerity," declaring municipal bankruptcies, raising taxes and fees (except on the wealthy), engaging in money-manipulation schemes, and squeezing average workers harder and harder to keep up profit levels. All levels of society are still clamoring for "growth," while the media is being used by elites to justify "the new normal," to a demoralized and proletarianized former middle class.

No, industrial capitalism hasn't ground to a sudden halt the way people like James Howard Kunstler, Matt Savinar and Michael Ruppert claimed. But it's limping along on life support, all while maintaining the fiction that the centralized, socialized, highly manipulated system of crony capitalism where gains are privatized but losses are socialized is a "free market."

So, no, Peak Oil is not giving us the world we want, and it's not likely to. It's up to us to do that.

To the articles:

Peak Oil is Dead! Long live Peak Oil! Noah Smith. And economist who read the Oil Drum, what a relief! Excellent summary:
The thesis of Peak Oil is simple: Global oil production will soon peak and begin to decline. But there were two possible stories that the Peak Oilers told about how this would happen:

"Good Peak Oil": In this case, we find something that's better than oil, and switch to that, just like we once transitioned away from whale oil. In this case, oil prices and production would both fall.

"Bad Peak Oil": In this case, we don't find something better than oil, and as oil becomes more scarce, the price would go up, while oil production and overall economic activity both contracted.

What we got was neither of these. Or more accurately, we got a little bit of both, coupled with something else that doesn't fit with either story... Basically, what happened is this: Scarcity attacked humanity, and Human Ingenuity battled back. Through heroic efforts, doomsday was averted. But Ingenuity did not win a smashing victory, as it did when we switched from wood to coal, or from whale oil to oil. Instead, humanity was forced into a fighting retreat, with Ingenuity executing a brilliant rear-guard action and forcing Scarcity to call off its pursuit...for now. But humanity has lost ground.

And Scarcity may not wait very long before launching another attack. Future increases in shale oil production (including tight oil and oil shale) is likely to be a lot more expensive than the low-hanging fruit we have picked thus far. Coupled with continued rises in developing-country oil demand and continued decline in conventional oil fields, this could cause another rise in oil prices. That will bring back the "Peak Oil" meme, which only seems to interest most people as an investment story. But sadly, The Oil Drum will not be around to chronicle the return of Peak Oil.

In the meantime, whatever you think of the predictive prowess of the Peak Oilers, the policy implications of the permanent transition from cheap oil to expensive oil are the same. Humanity is running out of high-quality, fungible, energy dense transportation fuel, and there is no substitute on the horizon. Creating a substitute - be it biofuels, batteries charged by cheap solar, or whatever - is going to take a lot of research, which is going to cost a lot of money. And realistically, the only entity that will put up that kind of money is the government.
Note the chart begins after the 1970 domestic peak.
This article from the BBC, The receding threat from 'peak oil' attempts to discredit Peak Oil but ends up indirectly proving it:
This follows a pattern of technical innovations to find new ways of extracting oil from existing fields that might otherwise be depleted.

In central California, where the first oil wells began to flow as far back as the 1890s, the oil originally emerged from the ground under its own pressure. In the 1940s, operators had to introduce the technique of injecting steam into the wells to free up the oil and flush it to the surface, a method still in use today. More recently, horizontal drilling - in which drills reach more than a mile down and then along - has reached reserves otherwise considered closed.

According to one independent oil producer, Fred Holmes of Holmes Western, the key factor is a high price for oil, making it worthwhile to continue exploiting existing fields and explore new ones. "There's still plenty of oil - we just haven't got all of it out of the ground yet. There's not a real danger of there being no fossil fuel… the oil is still valuable and it's not easy to get," he told BBC News. "There's enough oil in this country for another 100 years with our present technology and there's more around the world to be found yet."
Forbes magazine, as expected, attempts to assure us that Peak Oil is "dead":
To wit, the core of the Peak Oil hypothesis could be summed up as: sometime in the not so distant future we need to put some effort into finding new oil extraction techniques. This might be easy in which case there will be plenty more cheap oil. Or, it might be hard, in which case either we can switch to something else or, as with most every other good on earth, we will want to devote some fraction of our time and energy to continually pushing the technological frontier. And, while this is superficially true, it leads you to no deep conclusion and provides no serious insight into the future of humanity or the global economy.
No, the core of the Peak Oil hypothesis is that modern industrial civilization has for its lifeblood an energy source that is finite and that can only be used once and for which there are no substitutes, and we are utterly dependent upon it. Furthermore, the cheapest and easiest to access sources are used first, meaning it will get more and more expensive over time, and will require ever more resources and energy to extract it, leading to less net energy to power said civilization, leading to economic contraction and declining living standards. Also, fossil fuel use causes permanent damage to the biosphere, causing severe consequences to civilization from things like pollution and climate change. Get it right, will you?


And at Slate, Matt Yglesias looks at the data and concludes that:
Now with some subsequent years of data we can see that despite the slow growth in developed countries prices have very certainly not returned to the halcyon days of the Reagan-Clinton years. We can see that the Iraq/Kuwait price spike actually looks like a bit of a joke. We can see the impact of the unconventional oil, which has created this anomalous gap between the WTI price and the Brent price. It's a big gap. This is nothing to sneer at. Not only is it causing an economic boom in North Dakota and select portions of Texas, but it plausibly explains some of why America's overall economic performance has been so much better than Europe's. But even so, America's oil boom hasn't pushed U.S. oil prices back down to mid-aughts levels and it certainly hasn't pushed U.S. oil prices back down to 1990s levels. The good old days of genuinely abundant liquid fuel really do appear to be behind us.
Which is what the more rational Peak Oil proponents were claiming all along.

Again, I would argue that seeing Peak Oil discussions from mainstream economics bloggers and in publications like Forbes and the BBC proves that it is, in fact, occurring. It's part of the dialogue now. Face it, we're getting worried, or we wouldn't be talking about it at all.