Wednesday, November 30, 2011


We've talked about how the economy is concentrated into the hands of just a few corporations, essentially functioning as a brittle, centrally-planned system. This system is more and more coming to resemble Communism, just in private hands. Just as the state owned everything in pre-collapse Russia, an amalgam of the state and a few private decision-makers own everything in or society. Just like that society, the decision-makers enrich themselves while the rest of us get poorer, and suffer unsafe conditions, diminished opportunities, etc. And, just like the S.U., our society is getting more and more repressive.

Here's an exhibit on just how tightly controlled our food system is:

Conglomerate American Food Infographic
Source: Frugal dad

And, to make matters worse, we're running out out of key elements that make society work. Have a look (click to enlarge):

via Grist

Tuesday, November 29, 2011

Wool Mills, Composting Cups,The Sharing Economy and Doubling Up

Some more positive news today.

An interesting bit of retro-future. Might this type of business be run by monks in a post-collapse economy?

In 2001, a couple with science backgrounds were looking for a small business in a rural location when they came across an ad in a county journal. Discovering the ad was for an old wool mill in Genoa, New York, they took the opportunity to take over operations from the previous owners. After a week of on-site training, they found themselves on a whole new adventure in life. Now with 14 Hog Island Sheep, 29 chickens, several goats, and a cow, Jay Ardai and Suzanne O'Hara have established the Fingerlakes Woolen Mill, a sustainable operation that functions in a local context and produces beautiful, natural fibers that many eco-minded New York designers use in their work.

Read more: Fingerlakes Woolen Mill Carries History of Processing Sustainable Wool in Upstate New York | Inhabitat New York City.

Also, what if we could compost our coffee cups along with our coffee grounds?

The paper industry estimates that Americans used more that 23 billion dollars worth of paper cups last year – and as much as we love taking our morning coffee and tea on the go, the trash truly adds up. Fortunately, the geniuses at Repurpose Compostables recently invented an eco-friendly plant-based, insulated cup that can be composted in 90 days. The amazing cup has been available to the food service industry for the past year and it just became available to the masses at Bed Bath and Beyond. The cups are made from FSC-Certified paper, their manufacturing process produces 65% less CO2 than traditional paper cups, and they are completely non-toxic.

Traditional insulated cups are made with extra layers of paper, which wastes a great deal of material. The addition of a petroleum lining makes them nearly impossible to recycle as well. Repurpose Compostables utilizes a patented insulation material on a “single wall” cup that is not only plant-based and clean but also requires no heat sleeve! The company encourages using the cup compost to grow your own plants.

Read more: Plant-Based Repurpose Compostables Coffee Cups Hit Store Shelves Nationwide | Inhabitat - Green Design Will Save the World

Also, via the BBC - Collaborative Consumption. I'm not able to embed the video, but head on over to see the feature. I think the Shareable Economy is going to be a huge movement, and a challenge to the current economic paradigm. The whole thrust of the economy of the past was to encourage wasteful overcompensation as much as possible. Everyone with their own car, their own tools, their own camping equipment, etc., with much of it lying unused most of the time. In fact, much of the push for the "nuclear family" of the 1950's was to increase consumption, as an atomized family of individuals needed to consume more than a multi-generational household. Suburbia was part-and-parcel of the "consumer economy" - making sure there was enough demand for all the stuff we could produce. Alienation was a side-effect.

But that will change in the future. As incomes and the economy shrink, sharing will become more and more of a necessity. I once read that medieval manors were highly communal because they could only afford one team of oxen, so they had to share. In a declining economy, sharing can be seen as a logical adaptation, particularly with the communication tools we have at our disposal. There is so much "waste" in big cities, that it makes sense to use internet tools to put all the idle stuff that's sitting around to a good, useful purpose. Here is a great article on Collaborative Consumption and the Sharing Economy.

From an environmental perspective, it's a way for that fond and long-held hope, dematerialization, to start getting real traction. It turns out the ownership model, in and of itself, builds in a huge amount of resource inefficiency. We buy things that, by definition, as individuals, we cannot utilize fully, and they spend most of their time simply being owned (think of all your books and CDs, if you still have them). Now the ownership model is beginning to give way to the access model, wherein what's prized is access to services and experiences.

From a sustainability perspective, the crucial thing about an access model is that efficiency and durability are baked in; the profit incentive is naturally oriented toward getting the maximum number of human use-hours from the minimum amount of stuff. Just where we want the incentive to be! So greens have direct stake in seeing sharing models spread and flourish.

From an economic perspective, this puts real stress on the conventional ways of assessing an economy's performance. As sharing spreads, more and more socially productive activity will be "off the books" -- no money will exchange hands, or if it does, it will be be a direct exchange, which, if it can be tracked at all, will basically count as a gift. Enterprises like Wikipedia, YouTube, and open-source software, which are based on the coordination of distributed, voluntary efforts ("social production"), add hugely to consumer welfare but do not produce much if any in the way of profits.

Another trend you're going to see is sharing habitation. This will probably mainly be multi-generational households, but it can also be roommate situations. Mutli-generational households and sharing are some of the reasons Hispanics can live so cheaply. Eventually, we will all have to follow suit. According to the U.S. Census Bureau:

Households Doubling Up, by David Johnson, US Census Bureau: In coping with economic challenges over the past few years, many of us have combined households with other family members or individuals. These "doubled-up" households are defined as those that include at least one "additional" adult ?€" in other words, a person 18 or older who is not enrolled in school and is not the householder, spouse or cohabiting partner of the householder.

The Census Bureau reported today that the number and share of doubled-up households and adults sharing households across the country increased over the course of the recession... In spring 2007, there were 19.7 million doubled-up households, amounting to 17.0 percent of all households. Four years later, in spring 2011, the number of such households had climbed to 21.8 million, or 18.3 percent.

All in all, 61.7 million adults, or 27.7 percent, were doubled-up in 2007, rising to 69.2 million, or 30.0 percent, in 2011.

Young adults were especially hard-hit, with 5.9 million people ages 25 to 34 living in their parents' household in 2011, up from 4.7 million before the recession. That left 14.2 percent of young adults living in their parents' households in March 2011, up more than two percentage points over the period.

These young adults who lived with their parents had an official poverty rate of only 8.4 percent, since the income of their entire family is compared with the poverty threshold. If their poverty status were determined by their own income, 45.3 percent would have had income falling below the poverty threshold for a single person under age 65. ...

We've been accustomed to thinking that single people or married couples living in their own home is normal. It isn't (remember The Honeymooners?). It was an aberration from the prosperity and land build-out following the Second World War. There is a reason it was termed the "nuclear family" (in the '50s everything was 'nuclear'); it was a new phenomenon. The push to get veterans into homes after the war via loans and subsidies was designed as a means of control - even in ancient Rome, returning veterans were given land (in that case, farmland), to keep them from causing trouble from idleness. Plus, once each veteran was ensconced in his own private plywood castle, he would have little need to engage in undesirable activities, like going to Communist Party meetings (seriously, they were worried about this sort of thing). It worked - perhaps too well. Suburbia (along with it's handmaiden, TV) destroyed the nation's social capital . See Robert Putnam's Bowling Alone.

For most of history this arrangement has been unusual, and it still is unusual in many parts of the world. In Europe, where houses are passed down from generation to generation and there is less land area, people live at home until they get married. Sometimes they live at home until they have children, and sometimes they never more out! More and more, we will return to this mode of living, and the real estate market will dwindle as we get poorer and poorer. Not only are they sensible adaptations to a time of scarcity and decline, given our alienation from each other, doubling up, multigenerational households and the sharing economy might all be considered improvements to our lives. And see this:

RESILIENT JOURNAL: How to make Multigenerational Households work (Global Guerrillas)

Update 11/30:  Full house: Merged families coping under one roof (via BBC)

Monday, November 28, 2011

Return to Japan

A while ago, I wrote an essay entitled "Is Japan the Future?" This was based on some articles I had read pointing out that Japan seems to have entered the era of zero economic growth two decades ago. It also talked about the Japan's Edo Period as a model for a self-sufficient economy.

There are two fascinating articles on the BBC today about the sociological changes Japan is undergoing. Interestingly, they seem to parallel the U.S. in many ways. Traditional marriage and child-rearing in Japan is disappearing:
Record numbers of young Japanese do not have boyfriends or girlfriends, and many do not want one, according to a survey by the country's government. Sixty-one percent of unmarried men aged 18 and 34 do not have a partner, nor do half of unmarried women the same age. The numbers have increased since the previous survey in 2005.

Japan has one of the lowest birth rates in the world - and its population is on course to shrink dramatically by the middle of the century. So every five years the government carries out a detailed survey of attitudes to sex and marriage. The latest found that 61% of unmarried men aged 18 to 34 have no girlfriend, and half of women the same age have no boyfriend - a record high. More than a quarter of the men and 23% of the women said they were not even looking.

Some cited a shortage of money, others a belief that it is impossible to find a good partner once they had passed the age of 25. Many of the women also said single life suited them better than how they imagined marriage would be. The survey also found that more than quarter of unmarried men and women between 35 and 39 years old said they had never had sex.
Japan Singletons Hit Record High (BBC)

Intersesting how this coincides with the substance of Kate Bolick's article that become such a sensation in the Atlantic Monthly. It seems to be a worldwide trend.

And as in the United States and Greece, the Japanese are finding a life slaving away in a cublicle in overcrowded cites less and less appealing, and longing to return back to the land:

Like millions of others from her generation Megumi Sakaguchi cannot find a permanent job, just contracts. Temporary workers now make up a third of the workforce - up from fewer than a fifth in the mid-1980s - and a greater proportion of them are young. The certainty of the job-for-life tradition enjoyed by earlier generations has passed her by.

"I never know if I'm going to lose my job," she says. "Financially my anxiety levels are very high. "In the morning during the rush hour when I'm getting off the train, the way people behave, they are almost inhuman," she adds. So she has decided it is time for a change.

One weekend in October Megumi Sakaguchi joined a bus tour through the Japanese countryside. Like her fellow passengers, who were also from the cities, she was getting a taste of what life would be like as a farmer - trying out working the land for a day.

Excursions like this around apple orchards and greenhouses full of strawberry plants, talking to farmers in their fields, take place pretty much every week somewhere in rural Japan. They are organised and paid for by local authorities which are desperate to repopulate the countryside. After years of young people heading for the cities the average farmer in Japan is now 65.8 years old and that figure is rising steadily.

But now some are considering making the journey back.
Japan's youth turn to rural areas seeking a slower life (BBC)

From Clogs to clogs in three generations, indeed. Perhaps I belong in Japan.

Sunday, November 27, 2011

The Migration Back to Cities

My Internet connection tends to mysteriously vanish, without any indication what's wrong. Hopefully it will come back. In the meantime, here's this: The Death of the Fringe Suburb. It seems people like James Howard Kunstler and the New Urbanists are being vindicated.
Many boomers are now empty nesters and approaching retirement. Generally this means that they will downsize their housing in the near future. Boomers want to live in a walkable urban downtown, a suburban town center or a small town, according to a recent survey by the National Association of Realtors.

The millennials are just now beginning to emerge from the nest — at least those who can afford to live on their own. This coming-of-age cohort also favors urban downtowns and suburban town centers — for lifestyle reasons and the convenience of not having to own cars.

Over all, only 12 percent of future homebuyers want the drivable suburban-fringe houses that are in such oversupply, according to the Realtors survey. This lack of demand all but guarantees continued price declines. Boomers selling their fringe housing will only add to the glut. Nothing the federal government can do will reverse this.

Many drivable-fringe house prices are now below replacement value, meaning the land under the house has no value and the sticks and bricks are worth less than they would cost to replace. This means there is no financial incentive to maintain the house; the next dollar invested will not be recouped upon resale. Many of these houses will be converted to rentals, which are rarely as well maintained as owner-occupied housing. Add the fact that the houses were built with cheap materials and methods to begin with, and you see why many fringe suburbs are turning into slums, with abandoned housing and rising crime.
And, in fact, teenagers are driving less:
But with money tight in many households, and the cost of gas and insurance soaring, some youngsters are having to choose between buying a car and owning the latest smartphone or tablet.

In a survey to be published later this year by Gartner, 46% of 18 to 24-year-olds said they would choose internet access over owning their own car. The figure is 15% among the baby boom generation, the people that grew up in the 1950s and 60s - seen as the golden age of American motoring.

Wally Neil, a 25-year-old wholefood salesman, from Raleigh North Carolina, was determined to stand out from the crowd by not getting a driving licence and a car as soon as he was old enough.

But it was a decision made easier by the fact that he could speak to his friends online and play games with them over the internet so did not feel he was missing out.

"We were all pretty closely connected, even before Facebook.

"So we were not driving to our friends' houses, there was the gaming network and all that. We were putting the car on the back burner.

"There is a lot to be said for the video game killing the need for a car for a lot of kids."

For Wally, whose father Dan is a motoring writer and sports car enthusiast, walking everywhere or taking the bus when he was a teenager, rather than learning to drive, was "an act of rebellion".

But he still had to put up with the taunts of his friends, he says, who could not wait to get behind the wheel and thought public transport was "for losers".

"I was ridiculed a little bit in my peer group but I was also saving a lot of money at the time."

There is no question that fewer teenagers are on the roads in the US.

In 1978, 50% of 16-year-olds had obtained their first driving licence. In 2008, according to the US Transportation Department, it was just 30%.

The number of those aged 19 and under with driving licences has also been in steady decline since its 1978 peak, when 11,989,000 had one. In 2010, it was 9,932,441, or 4.1% of American drivers.

So the next generation seems to be much less obsessed with car ownership and suburban living. What happens when they become the majority as Baby Boomers die off? There is change in the air...

Saturday, November 26, 2011

The New York Times Discovers The Jobless Future

The Roman Emperor Titus Flavius Caesar Vespasianus Augustus, known to us as Vespasian, was responsible for beginning construction of one of the largest building projects of the ancient world - the Flavian Ampitheater, better known as the Colosseum. When offered labor saving devices to decrease the amount of workmen needed, Vespasian refused. Michael Grant reports in The World of Rome:

"[W]hen Vespasian was offered a labor-saving machine for transporting heavy columns, he was said to have declined with the words: "I must always ensure that the working classes earn enough money to buy themselves food."

How times have changed! Ancient societies have always engaged in massive public works to keep the idle workforce occupied, from the great pyramids of Egypt to the canals of Mesopotamia, to the walls of Cuzco, to the Colosseum. Excess labor was channeled into the building of great projects, many of which still remain. Generally, these were built by a state which was responsible for keeping such workers fed and housed, one that did not have to contend with the system of wage labor and private industry as we do today. Heron of Alexandria built devices powered by steam; the idea of using them to replace human labor never occurred to the ancient Greeks. Of course, one reason the wage system was less prevalent in the past was due to the institution of slavery, including chattel slavery and debt bondage. The remarkable ubiquity and persistence of the notion that one person can own another is certainly nothing to be proud of.

An important recently appeared in The New York Times. I didn't write it, but I may just as well have. It makes a good summary of the case I laid out in my inaugural posts What Are People Good For in one column: that there are just too many workers, and there is absolutely no way we will create jobs for all of them. The op-Ed is entitled The Age of The Superfluous Worker, and its author is an Herbert J. Gans, an emeritus professor of sociology at Columbia University (notice, not an economist):
AMERICA, like other modern countries, has always had some surplus workers — people ready to work but jobless for extended periods because the “job creators,” private and public, have been unable or unwilling to create sufficient jobs. When the number of surplus workers rose sharply, the country also had ways of reducing it.

However, the current jobless recovery, and the concurrent failure to create enough new jobs, is breeding a new and growing surplus pool. And some in this pool are in danger of becoming superfluous, likely never to work again.

The currently jobless and the so-called discouraged workers, who have given up looking for work, total about 15 percent of the work force, not including the invisible discouraged workers the government cannot even find to count.

In the old days — before Social Security, welfare and Medicaid — poverty-caused illnesses killed off or incapacitated some of the people who could not find jobs. Even earlier, some nations sold their surplus workers as slaves, while the European countries could send them to the colonies.

In addition, wars were once labor-intensive enterprises that absorbed the surplus temporarily, and sufficient numbers of those serving in the infantry and on warships were killed or seriously enough injured so that they could not add to the peacetime labor surplus.

The old ways of reducing surplus labor are, however, disappearing. Decades of medical and public health advances, as well as Medicare and Medicaid, have reduced the number of poverty-related deaths. The Iraq and Afghanistan wars have left many more service members injured than killed.

Over the past quarter-century, one very costly way of decreasing the surplus has been the imprisonment of people, mostly dark-skinned men, for actual and invented offenses. Felons are not often hired when they leave prison. Many, at least those who do not become recidivists, become surplus and then superfluous labor. As incarceration becomes less affordable for financially strapped states, inmates will reach surplus or superfluous status at a younger age.

Meanwhile, new ways of increasing surplus labor have appeared. One is the continued outsourcing of jobs to low-wage countries; the other is the continuing computerization and mechanization of manufacturing and of services not requiring hands-on human contact. Continuing increases in worker productivity add yet more to the surplus. So does the unwillingness of employers to even consider hiring people who have been unemployed for a long time.

When the jobless recovery ends and the economy is restored to good health, today’s surplus will be reduced. New technology and the products and services that accompany it will create new jobs. But unless the economy itself changes, eventually many of these innovations may be turned over to machines or the jobs may be sent to lower-wage economies.

In fact, if modern capitalism continues to eliminate as many jobs as it creates — or more jobs than it creates — future recoveries will not only add to the amount of surplus labor but will turn a growing proportion of workers into superfluous ones.
Robert Reich supplies some actual numbers:
Not to depress you, but our economic troubles are likely to continue for many years — a decade or more. At the current rate of job growth (averaging 90,000 new jobs per month over the last six months), 14 million Americans will remain permanently unemployed. The consensus estimate is that at least 90,000 new jobs are needed just to keep up with the growth of the labor force. Even if we get back to a normal rate of 200,000 new jobs per month, unemployment will stay high for at least ten years. Years of high unemployment will likely result in a vicious cycle, as relatively lower spending by the middle-class further slows job growth.
I'm glad to see this is getting more attention. Why should we expect the private sector to "create jobs", when all the incentives are to eliminate them? It never ceases to amaze me that these alleged Conservative hypercapitalists don't seem to know how capitalism works. The incentive is always to produce more with less workers. Thus, the private sector has every incentive to eliminate jobs, not create them. Employers only create jobs if there is a need for them, and who is to say that they need everyone? Why doesn't anybody get this? Here is a perceptive comment left on the Global Guerrillas Web site:

With automation and outsourcing for lower wages what little labor is needed the market is going to fail. This is because it can no longer create sufficient ability for people to consume its production. In theory some kind of social welfare state could prop up something like a market system but its proponents oppose redistribution on that scale so sooner than later bound to fall. Taking the developed nations as an example, all of them have high youth unemployment (20% plus) and mass chronic underemployment. This means that those people will never be useful as consumers to any scale, are useless as workers and sooner or later if they aren't already are going to be regarded as a threat. They will be likely murdered actively (via bits or military action) or passively (starvation, lack of ability to reproduce through artificial scarcity etc) by the elite class. The youth are waking up to this and trying to preserve a future for all of them. Whether this will succeed is unclear. Either way broad scale industrial capitalism is done for.

Broad scale industrial capitalism is done for. I agree, and we should be sowing the seeds for what comes after now. Instead, we are engaged in cargo-cult like behavior, hoping the olden days of the nineteenth century will come back as if by magic. We are seeing this system fail already- Reich's statistics above show the impossibility of creating enough jobs to employ the workforce. Employment increasingly becomes a game of musical chairs, with the seated players told to deride the standing ones as 'lazy' and 'unproductive'. Note professor Gans' description of prisons as a way to deal with the excess workers. We already imprison almost one out of every 100 people in post-industrial America. Are we really so wicked? Now you see why the drug war must be continued, despite opposition from both political liberals and conservatives. And notice especially this line: "In the old days — before Social Security, welfare and Medicaid — poverty-caused illnesses killed off or incapacitated some of the people who could not find jobs...Decades of medical and public health advances, as well as Medicare and Medicaid, have reduced the number of poverty-related deaths." Is it any coincidence that one of the the Republican Party's core platforms is the elimination of Medicare, Medicaid and Social Security and Unemployment Insurance? Is it any surprise they want to expand the military and ramp up the drug war, despite the enormous costs of these things? The Republicans may be telling their true-believer followers that if taxes are lowered on the rich the jobs will magically come back, but when the doors are closed inside the corporate boardrooms of their supporters, they know they will never employ enough people in the globalized labor force. The Democrats know this too, and the idea that "more education" and some unspecified "innovation" is going to save us is equally as nonsensical.

And we're not even taking into account resource limitations. Richard Heinberg, in The End of Growth, contends that we can no longer ramp up our consumption of certain raw materials to grow faster (particularly nonrenwable and nonreplacable fossil fuels). He also contends we're reached "peak credit" and limits on debt creation will also stifle growth. The two are related of course. I think he's a bit too pessimistic. Not all growth requires fossil fuels. However, new growth will not be industrial growth. This is key. Without industrial growth, there is no way to employ a mass population. Computers, biotechnology, materials science, gaming, etc - while such innovations will continue growing the economy somewhat, none will employ the masses of the population. As Charles Hugh Smith has pointed out, much job growth in the last decade was powered by debt, not productive activity. He also points out that much of our economy is useless friction.

Jeremy Rifkin in The End of Work gives a history of how labor productivity essentially outstripped the need for it already in the Great Depression. Essentially, we're been trying a large number of tricks to over up that inconvenient fact - the creation of the consumer society, with it's manipulation of emotions to encourage mindless consumption and hordes of advertising, marketing and service jobs; the suburbanization of America based on buying and selling of houses; the extension of unlimited consumer credit regardless of incomes to pay the money back; the outsourcing of labor to poor countries to push the prices of goods down; and the financialization of the economy decoupled from actual productive activity - these were all means to hide this fact. One-by-one they are unravelling. We're out of gimmicks, just as automation is ramping up to levels never even imagined before.

That's why I've described what is happening as The Final Solution for the working class. I use those provocative words intentionally, for I truly believe that is what's happening. Once you understand this, you understand why Republicans are doing everything in their power to increase the prevalence of guns in society- so the working classes can finish each other off in a standoff between the remaining employed and the destitute. Dramatic? I don't think so. And you know why the PATRIOT Act was passed and extended with bi-partisan support. As the desperate masses continue to grow, law enforcement will need the necessary tools to "eliminate" them and stifle dissent, as the commenter above describes. The Act was never about foreign terrorism, in fact, it's main use to date has been in the drug war. Over the past few weeks, we've been treated to a front-row seat to what we're in for thanks to the Occupy Movement. Expect a lot more of this in the future.

To give you an idea of how bleak it looks out there, here is a blog post by Harold Meyerson on automation:

Google, we learn from Monday’s New York Times, has a secret lab in an undisclosed location in the Bay Area where it is developing robots. We don’t know what the Google-oids are working on there, but we do know that the company has developed and built a driverless car that has already traversed 100,000 miles on California roads without getting either a ticket or a scratch.

Surely, though, there are innumerable now-human activities that could be performed efficiently, and eventually more cheaply, by robots. On Tuesday, the Robot Report (“Tracking the business of robotics”) ran a story that Foxconn, the Taiwan-based manufacturer that employs roughly one million Chinese workers who assemble all of Apple’s products (and many of Dell’s and other high-tech companies) has broken ground on a factory in Taiwan to manufacture robots. Foxconn hopes to replace 500,000 of its Chinese workers, the Report says, with 1 million robots.

If Foxconn succeeds at this venture, it will be yet another example of U.S.-developed technology going to Asia for manufacture—following, as it were, the Apple model. It also means that the kind of mechanization now prevalent in many of the remaining U.S. factories, which are far less labor-intensive than their Asian counterparts, will come to Asia as well, with consequences for Chinese employment that would doubtless alarm the Central Committee and countless others.

For that matter, suppose Google continues to develop its driverless car until its safety and efficiency standards far exceed those of humans, and then scales up so that the purchase of such robots isn’t prohibitively expensive. How long before bus companies, cab companies, and truck companies decide to go driverless? Suppose Google commercializes a robot that can drive a truck, pick up, and deliver packages? Does anyone believe the fiercely anti-union Fed Ex wouldn’t discharge its drivers and go with the robots? Does anyone believe that unionized UPS wouldn’t be compelled to follow suit? Which brings us to the U.S. Postal Service. Is this an unimaginable scenario for, say, 2030? I don’t think so.

Even as things stand today, we’ve not really replaced the manufacturing jobs that have been mechanized with higher-skilled ones. That’s one reason why lower-paying service-sector and retail-sector jobs have increased while jobs in manufacturing have plummeted. What happens when, say, five million transportation workers are replaced by robots, too? I hope that Google lab is pondering this question as well –- God knows, hardly anyone else is.

Friday, November 25, 2011

Dark Earths

Archaeologists excavating sites in Northern Europe from shortly after the decline of the Western Roman Empire made an interesting discovery:
The third and fourth centuries at London are characterized by the widespread presence of dark humic soil, sometimes more than a yard thick and with cultural debris (pottery, bones of butchered animals, glass fragments) mixed into it, covering occupational remains of earlier centuries. This material, known as dark earth, is not unique to London but has been identified at many urban sites all over Northern Europe during late Roman times. There has been a great deal of discussion and debate about this dark earth--what it represents and how it originated. It was once widely regarded as evidence of decline and abandonment of Roman urban centers. It was considered a natural soil that developed on top of areas that had once been active parts of the urban center, such as we might observe forming in a vacant lot in a city today.

For a variety of reasons, this interpretation has changed. the dark earth is not thought to represent not abandonment but rather thriving activity--but activity of a very different character from that of the Roman urban centers. The dark earth has been found to contain remains of timber-framed, wattle-and-daub huts, along with sherds of pottery and metal ornaments datable to the late Roman period. These observations demonstrate that people who were living on the site were building their houses in the traditional British style rather than in the stone and cement fashion of elite and public Roman architecture. Such structures are much more difficult to identify in the archaeological material than Roman buildings, because all that is typically left of them are postholes in the ground and crumbly fragments of the daub that had been packed around the branchwork of the walls.

What are we to make of these two major changes reflected in the archaeology? After rapid growth in the latter part of the first century, London emerged as a stunning center of the Roman Empire on its northern edge, with the monumental architecture, a thriving commericial center, and a military base characteristic of the greatest of Roman cities. The third and fourth centuries at London are marked by a stoppage in major public architecture and a reverse of that process, the dismantling of major stone monuments, at the same time that much of the formerly urban area seems to have reverted to a non-urban character.

To call these changes "decline," "collapse," or "abandonment"--as has been done in the past--is to adopt a conservative Roman attitude toward change. Because we live in societies that use monumental stone architecture in ways similar to how Rome used it, we tend to think of dismantling such structures--our monuments to military and civic glory--as distasteful. But the question we need to ask is, how can we understand these changes in terms of the lives and actions of the inhabitants of this specific place?

All of these changes--the dismantling of stone buildings, the reuse of stone, and the buildup of the dark earth--can be understood in terms of new uses of the formerly urban landscape for different purposes. As evidence accumulates in London, it is becoming clear that the site was not abandoned, as earlier researchers had thought. Life went on in place throughout the third, fourth, and fifth centuries; it was just different. For reasons that are explored below, the inhabitants of London after the glory years of the second century did not have uses for the monumental stone structures that played such important roles between A.D. 70 and 200. Their needs were different, and they behaved in ways dictated by their traditions and their uses of the resources available to them.
Peter S. Wells, Barbarians To Angels: The Dark Ages Reconsidered. pp. 111-113

This fascinating discovery seems to be underreported. Even over a period of centuries, the building of that much organic soil is quite a significant achievement. In nature, topsoil formation is extremely slow, in fact it takes a "natural" system hundreds of years to produce about an inch of topsoil. So deposits of humic soils up to three feet deep are quite a find! Are these anthropogenic (man-made) soils? If so, how was it done? And why were these found in cities? Were there urban gardens? Urban farming? Livestock grazing? Composting? Were early Europeans practicing biochar (carbon farming)? Were they practicing an early form of Hugelkutur? If so, why is it only found during the time period of the Dark Ages? Written sources don't exist, of course, but further scientific study could be instructive.

One is reminded of the recent discovery of Terra Preta soils in the Amazon basin:

Amazonian Dark Earths (ADE), one of the best-known examples of anthropogenic (man-made) soils, are the result of Amerindian settlements in the pre-Columbian period. ADE are highly variable in terms of their size, shape, depth and physical and chemical make-up. Scholars tend to divide ADE into two categories: terra preta and terra mulata. The former are dark and highly fertile soils replete with ceramic shards, indicating former areas of habitation, while the latter are lighter in colour, less fertile, lacking pottery and thought to be old agricultural fields. While a scientific consensus on the origins of terra preta has existed for several decades, the origins of terra mulata remain enigmatic and contested.

I had no idea until I read the book cited above that similar things were found in European settlements during the Dark Ages. One of the major advances in recent historical understanding is the role that topsoil depletion has played in the decline and fall of past civilizations, including those of ancient Mesopotamia, the Roman Empire and the Lowland Classic Maya. Wikipedia says:

Topsoil depletion occurs when the nutrient-rich organic topsoil, which takes hundreds to thousands of years to build up under natural conditions, is eroded or depleted of its original organic material. Historically, many past civilizations' collapses can be attributed to the depletion of the topsoil. Since the beginning of agricultural production in the Great Plains of North America in the 1880s, about one-half of its topsoil has disappeared. Depletion may occur through a variety of other effects, including overtillage (which damages soil structure), overuse of inputs such as synthetic fertilizers and herbicides (which leave residues and buildups that inhibit microorganisms), and salinization of soil.

Topsoil depletion is a significant issue throughout the world. The message is clear: destroy healthy, productive soil and destroy civilization. The question is, can it be done without the collapse of large-scale industrial agriculture? The late Roman period was characterized by large landed estates called latifundia; essentially large plantations which were worked by slaves producing export crops. Wikipedia calls them the closest thing the ancient world had to modern industrial agriculture. Once Roman military and legal control slowly faded away, latifundia declined as well, since long-distance shipping of commodities like grain and olive oil declined and food production was retooled for local production. Slaves disappeared, and farming was once again done on smaller scales by free farmers (although most were serfs). With so much land in the hands of industrial farming, can we transition to more benign methods without a collapse? What do these dark earths have to teach us?

Taking this out of the past and into today, there is a case in our own time similar to the collapse of the Roman Empire's trade networks in Northern Europe. When the Soviet Union collapsed, Cuba was isolated from it's main trading partner on the other side of the Atlantic, and surrounded by hostile states. The ships from Russia stopped coming. The situation in Cuba must have been very similar to that faced in sub-Roman Britain. Without the trading networks, Roman estates geared for export crops would have foundered. Here is what happened in Cuba, according to Wikiepdia articles of the event:
During the Cold War, the Cuban economy relied heavily on support from the Soviet Union. In exchange for sugar, Cuba received subsidized oil, chemical fertilizers, pesticides and other farm products. Approximately 50 percent of Cuba's food was imported. Cuba's food production was organized around Soviet-style, large-scale, industrial agricultural collectives. Before the collapse of the Soviet Union, Cuba used more than 1 million tons of synthetic fertilizers a year and up to 35,000 tons of herbicides and pesticides a year.

With the USSR collapsed, Cuba lost its main trading partner and the favorable trade subsidies it received, as well as access to oil, chemical fertilizers, pesticides etc. From 1989 to 1993, the Cuban economy contracted by 35 percent; foreign trade dropped 75 percent. Without Soviet aid, domestic agriculture production fell by half. This time, called in Cuba the Special Period, food scarcities became acute. The average per capita calorie intake fell from 2,900 a day in 1989 to 1,800 calories in 1995. Protein consumption plummeted 40 percent.

Without food, Cubans had to learn to start growing their own food rather than importing it. This was done through small private farms and thousands of pocket-sized urban market gardens—and, lacking chemicals and fertilizers, food became de facto organic. Thousands of new urban individual farmers called parceleros (for their parcelos, or plots) emerged. They formed and developed farmer cooperatives and farmers markets. These urban farmers found the support of the Cuban Ministry of Agriculture (MINAGRI), who provided university experts to train volunteers with organic pesticides and beneficial insects. These efforts were furthered by Australian agriculturalists that came to the island in 1993 to teach permaculture, a sustainable agricultural system, and to "train the trainers". The Cuban government then sent these teams throughout the country to train others.

Due to a poor economy, there were many crumbling buildings that could not be repaired. These were torn down and the empty lots lay idle for years until the food shortages forced Cuban citizens to make use of every piece of land. Initially, this was an ad-hoc process where ordinary Cubans took the initiative to grow their own food in whatever piece of land was available. The government encouraged this practice and later assisted in promoting it. Urban gardens sprung up throughout the capital of Havana and other urban centers on roof-tops, patios, and unused parking lots in raised beds as well as "squatting" on empty lots. In Havana, organopónicos (organic farms and gardens) were created in vacant lots, old parking lots, abandoned building sites and even spaces between roads.

Cuba's history of colonization included deforestation and overuse of its agricultural land. Before the crisis, Cuba used more pesticides than the U.S.. Much of their land was so damaged (de-mineralized and almost sand-like) that it took three to five years of intensely "healing" the soil with amendments, compost, "green manure", and practices such as crop rotation and inter-planting (mixed crops grown in same plot) to return it to a healthy state. Bio-fertilizers and bio-pesticides have replaced most chemicals. Today, 80% of Cuba's produce is organically grown. Without the fertilizers, hydroponic units from the Soviet Union were no longer usable. The systems were then converted for the use of organic gardening. The original hydroponic units, long cement planting troughs and raised metal containers, were filled with composted sugar waste and hydroponicos became organopónicos.

Another reason Cuba survived this crisis is the shift in their thinking from machine to manual labour. Abandoning their previous industrialized agricultural methods, tractors and other machinery were replaced with human and animal labor. Older farmers familiar with raising and training oxen trained others to increase those involved in food production. Chemical fertilizers were replaced with organic farming techniques which require more labor but less fossil fuels.

Cuba has more than 7,000 organopónicos. More than 200 gardens in Havana supply its citizens with more than 90% of their fruit and vegetables. Yields have more than quintupled from 4 to 24 kilograms per meter squared between 1994 and 1999, and currently around a million tons of food per year is produced in the organopónicos. More than 35,000 hectares (over 87,000 acres) of land are being used in urban agriculture in Havana alone. The city of Havana produces enough food for each resident to receive a daily serving of 280 grams (9.88 ounces) of fruits and vegetables. The urban agricultural workforce in Havana has grown from 9,000 in 1999 to 23,000 in 2001 to more than 44,000 in 2006. "Kiosks" (farmers' markets) were set up in all communities to provide easy access to locally grown produce; less travel time required less energy use. These local markets provide 80-100% of the produce needed for that local community.

One can imagine some similarities between this and what happened to far-flung provinces in the Roman Empire, where stone architecture was dismantled, and food production was moved much closer to the cities. Perhaps this explains some of the mystery of the Dark Earth.

The overall message is a hopeful one. Wells' passage cited above suggests that societal change can be transformational without being destructive, and that human actions done rightly can preserve and even enhance the environment, while producing abundant food.

For a modern take on rapid topsoil formation, please see this terrific article by Permaculturalist Ben Falk: Inheriting Subsoil, Leaving Loam.

Thursday, November 24, 2011

Thanksgiving Day Post

Something to be thankful for: Real turkeys are making a comeback (Grist)

Fascinating article throughout about the history of the turkey. This native American bird was once common in all sorts of varieties, now it's mass-produced for thanksgiving like so many iPods. But the diverse, and absolutely gorgeous breeds (now termed 'heirloom' turkeys), are being bred by foodies:
In 1997, The American Livestock Breeds Conservancy (ALBC) took a turkey census. For about half a century, nearly every turkey farm in the U.S. had been raising a breed known as the Broad Breasted White. (This cost-efficient, big-breasted bird has a lifespan of only 18 weeks and can neither fly, nor reproduce without artificial insemination). So when the ALBC went looking for other, older breeds of turkey, what they found was startling: They counted only 1,300 turkeys not bred for industrial purposes. In the whole country.

Fast forward to today, when “they have literally bred all of the turkey out of the turkey,” says Will Harris, owner of White Oak Pastures, the largest USDA-certified organic farm in the state of Georgia. Harris raises American Standard Bronze turkeys, one of eight varieties identified by the ALBC as heritage breed turkeys—or birds descended from a continuous gene pool dating back to before the rise of the Broad Breasted White. Heritage birds can still mate naturally, and have a long outdoor lifespan and slow growth rate. Industrial turkeys, on the other hand, said Harris, “are satisfied to sit in one place and eat and defecate.”

At the time of 1997 census, the farmers who still raised heritage turkeys did so because they “had a true passion for them,” said Jennifer Kendall of the ALBC, not because they were profitable; until around 2000, the concept of heritage turkeys was unfamiliar even to more conscious eaters.
Turkeys are snapshot of what's wrong with Industrial Agriculture in this country:
When it comes to turkeys, or any kind of food, the existence of multiple, diverse varieties (i.e. biodiversity) is crucial to food security. “The analogy we like to use is a stock portfolio,” says Alison Martin, also of the ALBC. You wouldn’t want to put all your savings behind one stock, but “essentially that’s what commercial agriculture has done. In a time of global climate change and economic stress, doesn’t it make sense to have options for other production methods?”

That’s the theory behind Slow Food’s Ark of Taste project, “a catalog of over 200 delicious foods in danger of extinction.” The Ark of Taste strives to preserve these endangered edibles (everything from American Rye Whiskey to Amish Pie Squash) both for their unique tastes and for the sake of the biodiversity of our food system. If we don’t, said Vaughn, “we’re going to do ourselves a disservice in terms of what we have access to in the future.”

Heritage turkeys were added to the ark in 2001. And farmers like Harris are crucial to their preservation efforts. His family farmed conventionally until the 1990s, when he “grew tired and disgusted with the excesses of modern industrial farming.” Harris stopped giving his cattle corn, hormones, and antibiotics, and stopped using pesticides and chemical fertilizers. Then he added sheep and poultry to his flock of livestock, realizing it would benefit every aspect of his farm.

Nature wants a whole smorgasbord of different things out there grazing,” he says.

For eaters, a big draw of heritage turkeys—beyond the knowledge that they’re part of a diverse food system—is their “more rich, succulent” taste, says Kendall. Because they’re bred on pasture, as opposed to in cages, heritage birds also have stronger legs, with more thigh meat.

Industrial agriculture favors the bland,” Vaughn explains. “Because [Broad Breasted Whites] mature so fast, [they] don’t develop the rich flavor that heritage birds do.
It's the same old story: mass production at the cost of quality and the environment. And if that weren't enough to scare you, antibiotic resistant strains of bacteria are starting to show in factory farmed birds:

Don't look now, but some turkey has antibiotic resistant superbugs (Grist)

Gee, why aren't I hearing that in any mainstream media outlets? Maybe if people start dying from our traditional all-American meal, it may cause us to have a dialog on the way we produce food. Hopefully it won't have to come to that. Sure, a "real" turkey costs more, but isn't thanksgiving supposed to be a special meal? It's sad that not everyone can afford it.

Also, Paul Krugman explains how Thanksgiving is actually un-American:
Think, for a minute, about what happened on the original Thanksgiving. (Yes, I know that there are doubts about what really happened, but never mind.)

Here’s how it went down: a bunch of people got together, with each group bringing what it could — the Wampanoag brought deer, the Pilgrims apparently shot some birds, etc.. Then everyone shared equally in the feast — regardless of how much they brought to the table. Socialism!

Worse yet, many of the lucky duckies benefiting from the largesse of this 17th-century welfare state were illegal immigrants. (That would be the Pilgrims).

We need to stop celebrating this deeply un-American event, and start celebrating something more in tune with the things that make America great, such as the Ludlow Massacre.
Finally, I can't help but note this anecdote from John Robb (via Nassem Taleb), the parable of the happy turkey:
  1. In the morning, a nice man comes for a visit.
  2. He puts food in your bowl.
  3. The food is fresh and tasty.
  4. The food is always in plentiful supply.
  5. At night there's a warm place to sleep.
  6. The next day, the process is repeated. The nice man visits, he feeds you, and you sleep comfortably. It repeats day after day.
  7. You think: everything is right with the world. How could anything possibly go wrong? In fact, the only thing I really have to fear is getting hit by lightening when it rains or a the rare chance a fox might get under the wire and into the coop (which very seldom happens). The Turkeys that worry about this are pessimists.
  8. One day, the nice man arrives.
  9. The nice man grabs you.
  10. He lays you across a stump, your neck exposed.
  11. He raises an axe and cuts off your head.
He uses it to explain how unexpected circumstances arise for investors, but I took a completely different meaning from it. So many people I know are kept comfortable and complacent by their nice, cozy corporate jobs. They have a nice house, nice car, big-screen T.V., cell-phone, retirement savings, health care, etc. They're just like the turkey - comfortable because everything is taken care of for them. Sure they're in debt- but that job will always be there, they think. The corporation will take care of me, as long as I play by the rules, they think.

But that comes at a price - like the turkey, they are in a prison. They are stuck in their cublicle-pens selling away the moments of their life one at a time, at the bottom of a pecking order, satisfied, in the words of the farmer above, to "sit in one place, eat, and defecate." But they're comfortable. The average American is like the domesticated turkey, bred for lethargy and stupidity, trading freedom for comfort, and unable even to attain freedom because it can no longer survive in the wild.

Then, one day the farmer comes with the axe. The job is gone. The bills are due. The jobs are moving overseas. the mortgage cannot be paid. You can't afford gas. By then, you realize the price of being a domesticated breed, the price of being reliant upon the farmer. You were only alive as long as you were useful to him. Now it's time to collect, and it's too late do anything about the situation.

So it is fitting that the turkey is the quintessential American bird. The sad story of the turkey seems to be the sad story of Americans - once a self-sufficient people, now reduced to sitting in cubicle pens with others taking care of us and awaiting the slaughter. And it looks like the plutocrats are sharpening their axes.

Happy thanksgiving!

 The Royal Palm turkey, a beautiful heirloom breed.

P.S. on a note related to the above: The Poor, The Near Poor And You.

P.P.S. And to end on a more positive note, Thanksgiving Scripture. The way we used to be.

Wednesday, November 23, 2011

Thoughts On Exponential Growth

Matthew Iglesias talks about automation using a framework from the book Race Against the Machine, which we covered earlier:
I offered my complaint about Erik Brynjolfsson and Andrew McAffee Race Against The Machine yesterday, but I also want to praise one extremely important insight in the book that really changed my way of thinking about something. This is what they call “the back half of the chessboard” and they derive it from an old story about a Persian king who makes a deal in which he promises to pay someone as follows. On the first day, one grain of rice is placed on one square of a chessboard. On the second day, two grains go in the second square. On the third day, four grains go in the third square. On the forth day, it’s eight grains in the forth square. The king agrees, and of course it turns out that 2^64 grains of rice bankrupts the kingdom. But the point about the back of the chessboard is that even though the mathematical pattern is evident throughout the process, the actual impact is amazingly backloaded.

The point of this, in terms of technological progress, is that we’ve gotten so accustomed to Moore’s Law that we sometimes overlook the implication that the deeper we get into the chessboard, the bigger the changes. We all know that computers advanced a lot between 1991 and 2011, but we should expect the scale of change over the next 20 years to dwarf those changes. This is a straightforward application of a well-known principle and some pretty basic math, but it’s usually not discussed in quite the right way. We think we’re used to the idea of rapid improvements in information technology, but we’re actually standing on the precipice of changes that are much larger in scale than what we’ve seen thus far.
I've never heard the term "back half of the chessboard" before, but it's a great term, and a good framework for understanding so I'll use it from now on. As I've noted earlier, I'm a skeptic when this is extrapolated to something like progress, which is nonquantifiable, even though I do believe we are in for a lot more automation in the future. But I should note that the "back half of the chessboard" concept has to do with not just automation, but ANY sort of exponential growth, including economic growth.

Another analogy is the water lily problem. It goes like this: If a single lily pad began doubling on a pond on the first day of June and doubled each day thereafter until the entire pond was covered by the end of the month, what percentage of the pond would be covered with lily pads after twenty days?

The answer is one-tenth of one percent. That’s right, 0.1%! What happens over the next 10 days is a little short of amazing—the entire pond gets covered. And, since it doubles every day, even on day 29, only half the pond would be uncovered! From no problem to catastrophe would occur in a single day! Like the chessboard, the problem is heavily "back-loaded." It is not noticed until it is too late.

Folding a piece of paper gives an even more striking analogy. Since each time you fold a piece of paper, it is a doubling of the previous paper's total thickness, it is analagous to exponential growth. So, although twenty pieces of paper is insignificantly small, folding a piece of paper only twenty times gives you a thickness taller than a skyscraper! Of course, folding it two or three times is no problem; we do it all the time. Again, such is the nature of exponential growth - it's normal until it isn't.

This is why exponential functions always lead to absurdity. Extract it out far enough, and it grows infinitely in no time. That's why debt is destroying the global economy - debt grows exponentially. Eventually, it grows rapidly enough to no longer be serviceable. This is one reason why a debt-based economic system will always be subject to boom and bust. The real, underlying productive economy cannot grow exponentially forever, as it subject to the laws of thermodynamics, demographics, etc. Since the supply of money and debt (essentially the same thing) always increases faster than the productive economy can, there is always inflation, followed by a crash as debt cannot be paid back. Then there is a deleveraging making you even poorer than you were before the crash! Right now, debt is being used as a weapon to eliminate the safety net and sell of the nation's productive assets to wealthy private investors. As you can see, such a debt crisis is not only possible, it is inevitable!

Exponential growth also applies to population. The most notable essay on exponential growth was written by Thomas Malthus. He noted that populations grow exponentially, while resources do not. Food production is limited by the supply of land; you can add some new arable land over time, but it cannot grow exponentially, as population can (when you bring new fields into production, they are not double the size of the previous ones). Thus, he famously predicted there would be inevitable population crashes and dieoffs.

He was supposedly proven wrong - population kept doubling in spite of his predictions. But we all know why - the use of fossil fuels allowed more fields to be farmed, nitrogen to be extracted from the air and dumped onto the fields (eliminating the need for crop rotation), and food to be shipped all over the place. New high-yielding strains of wheat and rice were also developed.

I would argue, however, that Malthus was not entirely wrong - all those things came at a terrible cost. Expanded agriculture has wreaked havok on the environment. And the quality of our diet has declined - those people are being kept alive by cheap carbohydrates - alive and malnourished. Sure they're alive, but that's about it - they're not healthy or thriving. Even in the developed world, cheap food has come at a cost; there's evidence that our highly processed carbohydrate-rich diet may be behind many of the diseases we suffer from. Some also contend that the genetically-modified dwarf varieties of wheat that have taken over world agriculture are contributing to the obesity epidemic (although this is controversial). Much of our economic growth has already come at the cost of quality - just look at the crappy particle board furniture we use today.

In his now famous newsletter to investors, Jeremy Grantham pointed out the absurdity of expecting exponential growth to continue forever:
I briefly referred to our lack of numeracy as a species, and I would like to look at one aspect of this in greater detail: our inability to understand and internalize the effects of compound growth. This incapacity has played a large role in our willingness to ignore the effects of our compounding growth in demand on limited resources. Four years ago I was talking to a group of super quants, mostly PhDs in mathematics, about finance and the environment. I used the growth rate of the global economy back then – 4.5% for two years, back to back – and I argued that it was the growth rate to which we now aspired.

To point to the ludicrous unsustainability of this compound growth I suggested that we imagine the Ancient Egyptians (an example I had offered in my July 2008 Letter) whose gods, pharaohs, language, and general culture lasted for well over 3,000 years. Starting with only a cubic meter of physical possessions (to make calculations easy), I asked how much physical wealth they would have had 3,000 years later at 4.5% compounded growth. Now, these were trained mathematicians, so I teased them: “Come on, make a guess. Internalize the general idea. You know it’s a very big number.” And the answers came back: “Miles deep around the planet,” “No, it’s much bigger than that, from here to the moon.”

Big quantities to be sure, but no one came close. In fact, not one of these potential experts came within one billionth of 1% of the actual number, which is approximately 10^57, a number so vast that it could not be squeezed into a billion of our Solar Systems. Go on, check it. If trained mathematicians get it so wrong, how can an ordinary specimen of Homo Sapiens have a clue? Well, he doesn’t. So, I then went on. “Let’s try 1% compound growth in either their wealth or their population,” (for comparison, 1% since Malthus’ time is less than the population growth in England). In 3,000 years the original population of Egypt – let’s say 3 million – would have been multiplied 9 trillion times!
That's the problem with exponential growth - by the time the problem reveals itself, it is too big to tackle. Population, economics, resource depletion, all are problems with an exponential component. It amazes me that economists, who are supposedly so wise in the ways of mathematics, cannot see that we're on the back half of the chessboard, and eternal economic growth is not possible, or even desirable. It just seems like common sense.

The Majority of Americans Are Struggling to Survive

Can a nation have a prosperous economy when most of its workers are poor or stuggling? That's a fundamental question I think we're going to have to deal with if we ever hope to fix the economy. The idea behind capitalism is that the trend was always up - higher living standards for more and more people. Now we see that this is not happening - life has become a brutal struggle just to get by from day to day. Sure, if you compare American's living standards with, say 1940, it's much higher. But remember, life back then was more family-oriented, less stressful, and there was a sense of optimism. No more. And no amount of electronic doo-dads can change that fact.

The New York Times Economix Blog has been on tear recently, doing some great work in actually looking beyond the statistics at how far most Americans have fallen in their living standards:

Voices of the Near Poor.
When the Census Bureau this month released a new measure of poverty, meant to better count disposable income, it began altering the portrait of national need.

The new method, called the Supplemental Poverty Measure, was designed to add in many of the things the old measure ignored, like the hundreds of billions the needy receive in food stamps and tax credits. At the same time, it subtracted the similarly large sums lost to taxes, medical care and work expenses.

One surprising difference with the new measure, outlined in an article today, was the 51 million people with incomes less than 50 percent above the poverty line. That category, sometimes called “near poor,” was 76 percent higher than the official account, which was published in September. (The portion of people under the poverty line, meanwhile, increased by just 5 percent in the new measure.)

About a fifth of the people who appear near poor in the new measure are lifted out of poverty by benefits the old measure ignores, like food stamps and tax credits. But more than half were pulled down into near poverty from higher income levels by taxes, medical costs and work expenses like child care and gas. Taken together with people under the poverty line, a full third of Americans – or about 100 million people – live in poverty or in the economically vulnerable area just above it.

In Washington and its suburbs, the near poor are people with incomes between $31,693 and $47,539 for a family of four with a mortgage.

Reporters talked to people in the Washington area this week with incomes in this category. They spoke of the knife-edge quality of their lives, in which one unexpected bill could knock them off balance. Many owned the usual trappings of middle-class life – cars, houses, cellphones and air-conditioners. But payments on those possessions were juggled, often unsuccessfully, depending on the unpredictable tides of their incomes. None saw themselves as poor. Most saw themselves as part of the middle class. But they focused on how hard they had to struggle to remain there.
The article has interviews with actual people, unlike what you normally here out of the ivory-tower statisticians who normally pontificate on economic affairs. The stories have a common thread - working full-time jobs, two incomes, and yet costs for food, housing, transportation and health care make them struggle to get from paycheck to paycheck, with one unexpected expense having the potential to cause utter destitution. They are stressed, tired and demoralized; economic cannon-fodder whose labor fruits flow almost exclusively to the 1 percent.

The article raises a common pint conservatives always use - they like to point out all the electric doodads these people have. "Look, cell phones!" "Flat-screen TV's!" "X-Boxes!" "These people aren't poor!" they cry. Because consumer electronics are cheap thanks to exploiting the global economy, we're supposed to believe that everything's A-OK, and that poverty is a figment of our imagination. Never mind the fact that you cannot afford decent housing, education or health care, or that there is no money or time left over after working and commuting nearly every minute of the day.

Imagine if these people went without a TV or cell phone. Well, first, those things last years, so the cost must be spread out. Second, even if they were not purchased, it would make almost no difference in their finances, since those things are so cheap. It's the ongoing costs that bite - paying the cell phone bill and paying the cable bill every single month (one reason why I have neither).

You've heard the statistic - 70 percent of the economy is consumer demand. How are workers going to buy stuff when they're broke? Anyone? And if they're more broke every year due to rising health care, education, and gasoline costs, how exactly is the economy supposed to grow? We've already tried debt, and that didn't work. And as we've pointed out before, it's not just the bottom - even educated people are seeing incomes shrink, while only the top 5 percent or so are seeing incomes rise (mainly due to rent-seeking, or price gauging in health care and education).

Here's a recent post on economic insecurity:
A new report from Wider Opportunities for Women, a nonprofit group that previously produced an index of what it takes to do more than survive while working, shows that 45 percent of United States residents live without economic security. That means they are not earning enough income to cover basic expenses, plan for important life events like college or save for emergencies like unexpected health bills.

“What does it take for households in this country to get by and be able to plan for their own futures based on the work that they do?” said Donna Addkison, president and chief executive of Wider Opportunities for Women. “We’re really looking at not just the lowest of the lowest income households but that slice of households that live somewhere above the poverty line but are constantly in danger of being thrown into financial catastrophe, and that’s a much larger slice of the American public than we are currently talking about.”

Although the study uses median incomes on a national basis, Wider Opportunities and its research partners are working on tables that define what economic security would mean on a state-by-state basis. Obviously, the income needed to cover basic expenses would be higher in New York City than in Omaha.

The report showed that 55 percent of children live in households where families do not earn enough to achieve economic security. Even among those households with two full-time workers, 22 percent of those families with children earn less than is necessary to guarantee economic security.

The most vulnerable households are those led by single mothers, as well as African-American and Hispanic households. Only 18 percent of households headed by single mothers are living with economic security, while two-thirds of Hispanic households and 62 percent of African-American households are not earning enough to cover basic needs and saving requirements.

Part of the problem, Ms. Addkison said, is that so many jobs pay low wages. According to the report, less than 13 percent of the jobs that the Labor Department projects will be created by 2018 will pay wages that will be sufficient to allow families to keep their heads above water.
And government does make a difference: Millions Caught by Social Safety Net:
According to the Center for Budget and Policy Priorities, the percentage of the United States population living in poverty increased by 0.6, to 15.5 in 2010 from 14.9 in 2007.

The poverty measure refers to resources available to families, accounting for the taxes they pay and subsidies they receive. Considering all that happened in the economy over those three years, 0.6 percentage points is quite a small change. Measures of the poverty rate typically change more than that over any three-year interval.

The study found that many people were technically above the poverty line in 2010, although their incomes were low, because they received government assistance like unemployment insurance, food stamps and refundable tax credits. The government assistance permitted them to have living standards above poverty, even while their market incomes were below the poverty line.

Were it not for government assistance, the study found, the recession would have pushed 4.2 percent of the population into poverty, rather than 0.6 percent.
Once the social safety net is abolished due to "austerity", expect millions more to fall into utter destitution. It's only a matter of time. Poverty, crime, suicide, child-abuse, drug use, etc. will all increase, pulling us down even further as we have to spend more GDP dealing with all the social fallout.

The idea that our threadbare safety net is keeping workers from getting jobs is ludicrous. As the articles show above, even families with two jobs have nothing left over once the bills are paid. How exactly are these people supposed to "pull themselves up by their bootstraps?" And what happens when all the children who grew up in poverty, with all the dysfunction and trauma that causes, become the majority of the populace as the Baby Boomers die off? How will they afford soaring tuition rates? What will they do for a living?

Can we have a successful economy while the vast majority of Americans are nearly destitute? Is that where capitalism is headed? And what can possibly reverse this trend? My head hurts.

The Charts Tell The Story

Corporate income tax as a percentage of profits:

Corporate income tax as a percentage pf GDP:


Tuesday, November 22, 2011

Failed States

Imagine a land the size of Western Europe with abundant natural and mineral resources, including forests, oil and rare elements that the world's cell phones and computers rely on for manufacture. Now imagine this place with no functional government whatsoever. A paradise? Hardly.

It's a real place - the Democratic Republic of Congo (DR Congo), formerly Zaire. While Somalia is often pointed to as a cautionary tale of how libertarianism operates under actual conditions, DR Congo seems to make an even better cautionary tale. It is considered to be one of the world premier failed states, if not the premiere one.

This article from the BBC is fascinating throughout: Failed State: Can the DR Congo recover? What really shocked me was the size of this region - the BBC has a graphic superimposing DR Congo on Western Europe, and they're almost the same size!
People in the Democratic Republic of Congo expect very little from the state, government or civil servants.

In fact, ordinary Congolese often repeat expressions like "the state is dying but not yet dead" or "the state is ever present but completely useless".

It seems they also expect little from the upcoming elections and there can be little argument that DR Congo is indeed a failed state.

Ordinary citizens are poor, hungry and under-informed.

The government is unable to provide decent education or health services.

The country - two-thirds of the size of western Europe - is a battleground.
I could insert a comment here about how similar the first three points are to another country with which we're familiar [ahem], but I'll refrain. I'll just point here and wonder how much we can expect from our own government. Anyway, it seems a total lack of government does not lead to the expected libertarian paradise:
I asked a university colleague if he thought things could get worse.

"When you are rock bottom, you can still dig deeper," was his response.

Public administration is in shambles. Civil servants have mutated into predators.

Ferdinand Munguna is a retired railway worker in Lubumbashi, the mineral capital of DR Congo in the south of the country.

He has to bribe the man working in the pension office who requires "motivation" before processing the old man's file. Mr Munguna complains that his pension is "hardly enough to buy soap".

Starting a business in DR Congo takes 65 days compared to the sub-Saharan African average of 40 days. In neighbouring Rwanda it takes three days.

And guess which country has one of the worst air safety records worldwide?

The prestigious Foreign Policy magazine's Failed States Index puts DR Congo in the critically failed category. Only Somalia, Chad and Sudan (when it included South Sudan) have worse rankings.

The recently released UNDP report on human development indicators put the former Belgian colony at the bottom of the 187 countries it surveyed.
Obviously this an extreme example, but it seems to be indicative of the way things are going around the world in the age of austerity. This is what we have to look forward to, while the wealthy will be insulated in the cocoons of extravagance we talked about yesterday. I've heard several interviews with Lester Brown, and he believes that environmental and resource problems are causing states to fail one by one around the world. Every passing year brings more failed states. Brown asks the pointed question: how many failed states to we need to have before we have a failing global system? He writes:
The Failed States Index, undertaken by the Fund for Peace and published in each July/August issue of Foreign Policy, ranks 177 countries according to “their vulnerability to violent internal conflict and societal deterioration,” based on 12 social, economic, and political indicators. In 2005, just 7 countries had scores of 100 or more out of 120. (A score of 120 would mean that a society is failing totally by every measure.) By 2010, it was 15. Higher scores for countries at the top and the doubling of countries with scores of 100 or higher suggest that state failure is both spreading and deepening.

States fail when national governments lose control of part or all of their territory and can no longer ensure people’s security. Failing states often degenerate into civil war as opposing groups vie for power. In Afghanistan, for example, the local warlords or the Taliban, not the central government, control the country outside of Kabul.

Among the top 20 countries on the 2010 Failed States list, all but a few are losing the race between food production and population growth. The populations in 15 of the top 20 failing states are growing between 2 and 4 percent a year. Many governments are suffering from demographic fatigue, unable to cope with the steady shrinkage in cropland and freshwater supply per person or to build schools fast enough for the swelling ranks of children.

In 14 of the top 20 failing states, at least 40 percent of the population is under 15, a demographic indicator that raises the likelihood of future political instability. Many are caught in the demographic trap: they have developed enough economically and socially to reduce mortality but not enough to lower fertility. As a result, large families beget poverty and poverty begets large families.

Virtually all of the top 20 countries are depleting their natural assets—forests, grasslands, soils, and aquifers—to sustain their rapidly growing populations. The 3 countries at the top of the list—Somalia, Chad, and Sudan—are losing their topsoil to wind erosion, undermining the land’s productivity. Several countries in the top 20 are water-stressed and are overpumping their aquifers.

After a point, as rapid population growth, deteriorating environmental support systems, and poverty reinforce each other, the resulting instability makes it difficult to attract investment from abroad. Even public assistance programs from donor countries are sometimes phased out as the security breakdown threatens the lives of aid workers.
Here's Wikipedia on failed states. What's amazing is that according to their map, almost all of the world's surface area is either failed of in danger of failing (I would include the U.S. in orange). And notice how much worse it has gotten in the last five years! It seems Lester Brown's worries are justified - the world system is failing. See also John Robb on Failed States versus Hollow States.

Do read the BBC article. It ends on a positive note - even in the worst of  failed states, people find the courage to go on:
While DR Congo is clearly a failed state, Congolese society has not failed.

On the contrary it is strong, vibrant, dynamic, tolerant and generous. People have a sense of taking charge of their own destinies.

Women form rotating credit systems to compensate for the absence of an accessible banking system.

Farmers band together to hire a lorry to get their cassava or charcoal from the central city of Kikwit to market in Kinshasa.

Bebe, who lives in the Paris suburb of Griney, sends money home to Kasai via Western Union. Some months it contributes to school fees, others it pays for medicines for her ailing mother-in-law.

Her father will spend some of it on Primus, the beer of choice in Kinshasa.

"Elikia" means hope in Lingala and there is much of it throughout the country.

Hopes for positive change will come from the people, not from the Congolese political establishment, and certainly not from outside interventions.
Incidentally, basically the whole African continent is failed or failing. To give you some idea of how much land that is, see this: The True Size of Africa.

Monday, November 21, 2011

America Is Balkanizing Along Income Lines

One of the reasons there is such an income gap in the U.S. has to do with geography. Wide open spaces allowed the wealthy to essentially secede from society, building enclaves in the former cornfields ringing America's cities. Essentially, America is Balkanizing along income lines. there once was a time when rich and poor at least lived close to one another. Not any more.

These communities need not be walled - they have economic walls. First, they are far away from urban centers with no access by public transportation. There is no way to get there without automobiles. Such communities are moving farther and farther out; in the old days you used to be wealthy if you lived twenty minutes from downtown, now the truly wealthy live at least an hour away. Second, these communities spend large amount of money on police forces. Why would wealthy communities with no poverty need large amounts of police? It's not to keep them safe from their fellow residents, it's to keep them safe from outsiders. Anyone looking "suspicious" (i.e. poor or minority), is pulled over and harassed, and often served up with tickets costing hundreds of dollars. Finally, high housing prices make sure anyone not in the top ten percent of income earners cannot afford to live there, or anywhere even close.

And due to "local control" these communities can keep all their money and spend it on the best schools and public services, while poor communities face closed libraries, failing schools, deactivated streetlights, and roads turned back into gravel. This, in turn, decreases social mobility. It also leads to political balkinization, as districts of wealthy are gerrymandered to keep Republican politicians in power. That's the finding out of this report:

Middle-Class Areas Shrink as Income Gap Grows, New Report Finds (New York Times)
The findings show a changed map of prosperity in the United States over the past four decades, with larger patches of affluence and poverty and a shrinking middle.

In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970. At the same time, a third of American families lived in areas of either affluence or poverty, up from just 15 percent of families in 1970.

The study comes at a time of growing concern about inequality and an ever-louder partisan debate over whether it matters. It raises, but does not answer, the question of whether increased economic inequality, and the resulting income segregation, impedes social mobility.

Much of the shift is the result of changing income structure in the United States. Part of the country’s middle class has slipped to the lower rungs of the income ladder as manufacturing and other middle-class jobs have dwindled, while the wealthy receive a bigger portion of the income pie. Put simply, there are fewer people in the middle.

But the shift is more than just changes in income. The study also found that there is more residential sorting by income, with the rich flocking together in new exurbs and gentrifying pockets where lower- and middle-income families cannot afford to live.

ean F. Reardon, an author of the study and a sociologist at Stanford, argued that the shifts had far-reaching implications for the next generation. Children in mostly poor neighborhoods tend to have less access to high-quality schools, child care and preschool, as well as to support networks or educated and economically stable neighbors who might serve as role models.

The isolation of the prosperous, he said, means less interaction with people from other income groups and a greater risk to their support for policies and investments that benefit the broader public — like schools, parks and public transportation systems. About 14 percent of families lived in affluent neighborhoods in 2007, up from 7 percent in 1970, the study found.

The map of that change for Philadelphia is a red stripe of wealthy suburbs curving around a poor, blue urban center, broken by a few red dots of gentrification. It is the picture of the economic change that slammed into Philadelphia decades ago as its industrial base declined and left a shrunken middle class and a poorer urban core.

The Germantown neighborhood, once solidly middle class, is now mostly low income. Chelten Avenue, one of its main thoroughfares, is a hard-luck strip of check-cashing stores and takeout restaurants.

Plutocracy Watch

The 1 percent are having to take ever-greater measures to protect themselves from the indigent masses:

Protests are a payday for security firms (New York Times):
They call when they make the Forbes 400 list. They call when annual hedge fund rankings appear, when their names are mentioned on CNBC and when their children travel abroad. And, these days, they call when protesters camped in Lower Manhattan grow uncomfortable with the idea of their existence.

The ultra-rich bankers, hedge fund managers and private equity executives of New York City have long enlisted private security firms to help safeguard them and their wealth. But as the mood on Main Street turns increasingly hostile, New York’s financial titans are cranking their security measures up to 11. For the high-end security firms that provide the moneyed elite with specialty services like around-the-clock bodyguards and elaborate home security systems, Occupy Wall Street has been a stimulus package all its own.

“We expect to more than double our revenue in New York this year,” said Paul M. Viollis, a co-founder of Risk Control Strategies, a firm that protects some of the top executives on Wall Street.

The executive protection industry has existed as long as there have been executives, but it got a boost in 2003, when Edward S. Lampert, a Greenwich hedge fund manager, was kidnapped by four men on his way to his car. The men stuffed the billionaire into a Ford Expedition at gunpoint, took him to a motel and tied him up in the bathroom for two days. (Mr. Lampert survived the incident, and his kidnappers were caught and convicted.)

These days, bankers and hedge fund managers are willing to spend millions of dollars to avoid enduring anything similar.
That’s right, they’ll spend millions of dollars for security and private protection, but not a penny more in taxes for schools, libraries, etc.  The rich are sociopaths, pure and simple. In other news, limos aren’t good enough for the 1 percent anymore; they’ve taken to driving around cities in armored mobile offices called "sprinters":
Steve Kantor admits that he likes to travel in style. He is an affable investment banker, concerned about flaunting his wealth, but he drives around Manhattan in what looks like a simple black delivery van.

Of course, most vans do not have chauffeurs, as Mr. Kantor’s has. Or a built-in office, custom installed.

“I have two big-screen televisions; I have a couch in the back that goes into a bed,” Mr. Kantor said. “I have four chairs that go back and massage you. It has a desk, a table and an intercom so you can have meetings in there if you want to.”

As the economy limps along and more attention is paid to the so-called 1 percent, some of the richest New Yorkers have taken to driving around in vehicles that ooze neither wealth nor privilege. But on the inside, the vans may be as lavishly decorated as the private railroad cars owned by turn-of-the-century industrialists.

Some owners use them as mobile offices, outfitted with fine leather chairs and Persian rugs; vans may also double as a child’s playroom on wheels, complete with a built-in vacuum to clean what the children dirty.

And while some owners say they are drawn to the vehicles’ vanilla exteriors, their outsize profiles cannot help but draw attention: at more than 22 feet long and nearly 9 feet tall, they look like cargo vans on steroids, their high roof lines dwarfing nearly all that surrounds them on the streets of New York. And that’s before the satellite dishes are raised.

For the rich, cargo vans on steroids (New York Times)

Outraged yet? And should the 1 percent need to fly somewhere, pehaps to broker a merger costing thousands of jobs, they can be sure to fly in style:
The gap between first class and coach has never been so wide.

Carriers on international flights are offering private suites for first-class passengers, three-star meals and personal service once found only on corporate jets. They provide massages before takeoff, whisk passengers through special customs lanes and drive them in a private limousine right to the plane. Some have bars. One airline has installed showers onboard.

The amenities in the back of the cabin? Sparse.

So as domestic travelers take to the skies for the holiday season, most will be in cramped cabins, their food is likely to be bland and they will have paid for it, along with any fees for slightly more legroom or checked bags.

But even as they have cut back on domestic service, including first-class accommodations, the airlines have been engaged in a global battle for top executives and the superwealthy on their international routes. Though only a privileged few can afford to pay $15,000 to fly first class from New York to Singapore or Sydney, the airlines are betting that the image of luxury they project for the front helps attract passengers to the rest of the plane. That includes a growing business-class section with offerings once solely the preserve of first class.
Taking First-Class Coddling Above and Beyond (New York Times)

Now you may wonder if the super-rich are worried that such ostentatious displays of wealth and privilege will cause the masses to revolt in a time of falling living standards, mass unemployment, gutted social services, lack of health care, foreclosures, homelessness and overall loss of hope. Fear not. In a absolutely chilling post, John Robb describes what he sees as the method of control:
The question this should raise: how do a very, very small group of neo-feudal plutocrats control a global population (of economic losers) in the modern context?

Right now? Lawfare and the bureaucracy of the nation-state. As things continue to degrade, that veneer of legality and constraint will fade and become less effective.

Long term? Bots. Software bots. Drones. My good friend Daniel Suarez did a great job of demonstrating how this works in his books Daemon and Freedom.

In short, bots will increasingly allow a VERY small group of people (in our case, a small group of plutocrats that act as the world's economic central planners) to amplify their power/dominance in a the physical world to a degree never seen before.

Software bots automate information dominance. They can do everything from checking purchasing habits to energy use (via smart meters) to social media use o look for "terrorist" signatures. They can dominate markets as we are seeing high frequency trading. These software bots can also automate interactions with human beings from the simple phone spam/customer service phone tree to interfaces like Siri.

Hardware bots include everything from flying drones to crawling rats to kill, maim, or incapacitate individuals and/or groups. Driven by the ability of computational hardware to mimic nature, these bots will be able to do what their counter-parts in nature can do and more (already, although the data isn't official yet, I anticipate the majority of "enemy combatants" killed by the US security system in 2011 were killed by drones). Expect to see them operating in swarms/clouds, conducting highly autonomous decision making (including the decision to kill), and serving in hunter killer roles.

The combination of the two bot systems, software and hardware, provides the means to automate control of vast populations. A perfect, privatized solution for an extremely small group of plutocrats.
Q: How Will Plutocrats Dominate a World? A: Bots (Global Guerrillas)

Doubtless they will control the bots from their floating offshore islands that they are now constructing, free from any legal constraints. That is, when they're not jetting into space for a vacation. But I'm sure they all "earned it", right?

Welcome to Capitalism 2.0.