2100. Economy and its deep history

I have dealt with much of this before, but I think it is so compelling, as we rethink economics, to heave these fully in mind. I think a little reflection on what capitalism comes from can help in thinking through what ought to be its future.

The word comes from cap. latin for head, and used in Rome for “a new head of cattle”. We still use that language today. “how many head you got over  to your place?” Capitalism thus has its origin in sexual reproduction and increase. Cattle was to Greece and Rome much like an argentine cattle ranch – it was central to the food economy.

When a new calf is born it is potentially destabilizing – of land for grazing, ownership – individual or community – and what can happen to it – sacrificed, sold, bred..

(see Jereny McInerney Cattle of the Sun: Cows and Culture in Ancient Greece.)

Hunter gatherers killed the animal and shared  it communally. As they contained animals into herds, open range at first and then fenced, the sacrifice maintained the culture of the hunt, because the sacrifice was shared communally. In The Odyssey when Odysseus and his sailors landed on an island hey sacrificed a “hecatomb” of cattle, a hecatomb is 100 head.  The place of sacrifice in ancient cultures is a way of feeding the community

Land aquited by a community was  divided based on grazing rights and was  nomia, a division of grazing rights among equals. Nomia is the same word Plato used for Law, but by his time it meant a collection of laws, not the particular nomia which meant equal distribution.

(see by Carl Schmitt, Nomos of the Earth)

That the history of cap and nomia lie deep in the history of eco-nomy I think is pretty amazing. Equal distribution would not have gained the power of law if there wee not a need for it, which in that ase must have been a threatening trend  toward in-equality. The law, and hence the nomia that is the nomos of eco-nomos that became our word economy, thus has its origin in a social desirable equal distribution of what was valuable.

Private property, to continual looking at key words, has an amazing history.

Property is the same root as proper, “are you dressed properly for the party”, and proper meat appropriate to show the status of a man of rank in society. Property began as a social sign, and explicitly could not be sold or “alienated” from its person.

Private comes from latin privatus, to remove from the public sphere. Private didn’t go from individual to group, it went from group to individual.

For Plato and other greeks, economy meant well managed estate. And if an estate was well managed, it should produce a surplus. They discuss the purpose of that surplus and concluded it was to create leisure time for philosophy and politics and explicitly not for extended consumption.

To go further, that model moved into early Christianity and the idea of the economy of god’s estate which is well-managed should produce the time for contemplation in prayer.

The word economy is used frequently in the New Testament, which was written in Greek, but Cicero translated it into Latin as “disposition.” so modern reader do not know that the word used was economy.

(see Agamben The kingdom and the Glory – for a theological genealogy of economy and governance.)

The history is rich and the modern period seems thin and self-satisfied. New economics,  which will need to deal with land and its usee and ownership, can learn from this past.

2099. Climate. No action possible. Drift.

A look at proposals around climate.

I assume you all saw at least a notice of this.

Climate crisis 11, ooo scientists wrong.

https://scientistswarning.forestry.oregonstate.edu

Strong language but most of it is describing – yet again – the problem. Very little on solutions. For example, here is the proposal on energ from the .World Scientists’ Warning of a Climate Emergency

All quotes are indented.

Energy

The world must quickly implement massive energy efficiency and conservation practices and must replace fossil fuels with low-carbon renewables (figure 1h) and other cleaner sources of energy if safe for people and the environment (figure S2). We should leave remaining stocks of fossil fuels in the ground (see the timelines in IPCC 2018) and should carefully pursue effective negative emissions using technology such as carbon extraction from the source and capture from the air and especially by enhancing natural systems (see “Nature” section). Wealthier countries need to support poorer nations in transitioning away from fossil fuels. We must swiftly eliminate subsidies for fossil fuels (figure 1o) and use effective and fair policies for steadily escalating carbon prices to restrain their use.

Note: that it recommends policies but not actions (actual descriptions of what to do. Leaving fossil fuels in the ground won’t happen without restrictions on the oil companies. Replace fossil fuels with low carbon renewables. This cant be just a policy. It requires specific proposals on how the end user can switch. But more it would require some analysis of what has to stop and who is affected and what they are likely to do.

Food for example. If no fossil fuels for transportation

See  the map for fhe US.

http://theconversation.com/we-mapped-how-food-gets-from-farms-to-your-home-125475

Lets look at Oakes and Stern, closer to economics,

https://www.nytimes.com/2019/10/23/opinion/climate-change-costs.html?module=inlinewrte

What’s the Price of Ignoring Climate Change?

World leaders are underestimating one of the most destabilizing effects of climate change: the price tag.

In a worst-case scenario, climate impacts could set off a feedback loop in which climate change leads to economic losses, which lead to social and political disruption, which undermines both democracy and our capacity to prevent further climate damage.

They make clear that centralized actions are necessary.

In this regard, it seems that some authoritarian governments, such as China, are better positioned to take the radical actions necessary for survival. How could we force other governments to immediately enact long-term decisions for the benefit of all?

scientists have understated how serious this issue is and how costly our inaction is already becoming,

They propose

motivating people to support and elect leaders who are committed to meaningful action.

But no one seems to have a plan of what significant action to cut fossil fuel use would be A politician cannot propose meaningful action when no one knows that that is. They write

by delaying a reasonable and orderly transition from the fossil fuel economy into one that is not carbon-based

Is it possible that there is “a reasonable and orderluy transition”? I doubt it.

Stern then writes:

 I think the aggregate economic models around climate issues have had fundamental defects —  namely, underestimating the risks of inaction and overestimating the cost of action. We have to embark on very different models of production and consumption, which cannot be characterized as minor deviations from economic paths that we are following.

Sounds severe but “overestimating the costs of action”? If we cut fossil fuel use the impact on the economy, I think, is beyond modelling – too many emergent properties, too much chaos and complexity. Lets look at another.

Achamoglu Are the climate kids right? published in Project Syndicate.

it seems increasingly unlikely that we will be able to reduce GHG emissions sufficiently to halt and then reverse global warming.

Wow, But he stays calm.

But social transformation also requires new laws, norms, and incentives. Without meaningful legislation, businesses and individuals will not change their ways

But note, no sugestion on how to achieve this.

Legislation and norms therefore must work in tandem to establish new long-lasting incentives.

 

Give us a narrative on how this could happen.

the current wave of activism will have to be translated into an organized political movement to rival the power of the fossil-fuel industry, perhaps by merging with or taking over existing Green parties.

“will have to be”, but how?

the current youth movement’s biggest weakness is that it lacks a coherent agenda for decarbonizing economic production.

But no one has a coherent agenda.

But the market could be a powerful weapon for fighting climate change. In fact, there is no reason to think that economic growth must be a casualty of climate action.

All assertion. “No reason to think”? But cutting fossil fuel use immediately impacts the ability of the economy to function. “Growth” is the key element in discussions, economists tend to brush it aside.

a tax would serve the dual function of encouraging normative change. As such, carbon taxes should be supplemented with well-designed “green subsidies” to firms and researchers developing wind, solar, and geothermal technologies, and to those working on new ways to limit emissions from existing technologies.

Most carbon tax proposals recognize the impact on the poor and then provides susidies. What will the poor do with the subsidies? Pay more for the same amount of fuel.

To see what state support without a robust market mechanism looks like, consider the disastrous experience of the Soviet Union throughout the 1970s and 1980s.

This is a favorite but the failure of the soviet union was not a failure of socialism but of czarist authoritarian byzantine orthodox Christian culture.

Our task is to find better, more creative, and less resource-intensive ways to meet the diverse needs of more than seven billion people. Once the transition to a cleaner economy is accomplished, growth can continue without adding to our climate footprint.

He wants to support growth . I leave that to another discussion. The task as stated is out of reach. He is implying we can shift the mode of production and consumption for 7 billion, quickly. “Once”? Wow. OK we can go back to normalcy.

But, more to the point, we need economic growth itself to continue – and not only to maintain political support for a green policy

He is saying that realistic cutting won’t get political support. Agree. But that means we are stuck and can’t do what is necessary.

a realistic promise of shared growth will be far more compelling than calls for a halt to economic progress. Now, we need to turn their enthusiasm into an institutionalized political force, and develop a blueprint for a potent, well-designed, and productive economic agenda. Markets need not stand in our way. On the contrary, they could be a powerful ally.

This concluding paragraph is just froth. Dishonest? Stupid? Meme dominated? Lets look at another, one I tend, usually, to trust.

Martin Wolf

https://www.ft.com/content/27c9a6e8-ffb7-11e9-b7bc-f3fa4e77dd47There is one way forward on climate change – To succeed in tackling the emergency, we need dramatic policies that are effective, legitimate and global

Despite decades of talk, emissions of greenhouse gases and global temperatures continue to rise.

As the IMF notes in its latest Fiscal Monitor, meeting the latter goal requires reducing emissions of greenhouse gases by a third below the baseline, by 2030. To keep below a 1.5C increase, emissions need to be half of the baseline…almost too late to avoid what experts view as destructive and irreversible changes in climate. For that reason, dramatic policies are needed.

Problem, conclusion,  both well stated, then..

Yet they are feasible, argues the Energy Transitions Commission, if they are firmly implemented over the next three decades.

The word” firmly” sounds like a Mussolini approach. We have no current politics (except maybe China) that could do this.

Thus, many supporters of the Green New Deal view climate as a justification for the planned economy. As British journalist Paul Mason argues: “Labour wants to combat climate change through three mechanisms: state spending, state lending and the state direction of private finance.” This approach allows opponents to argue that the left is more concerned with destroying market economies than saving the planet.

He concludes,

The mess created by trying to plan an economy into zero net emissions in a decade might bring all attempts at mitigation into disrepute.

This sounds like it needs a conclusion, but he just jumps us  ahead to

In any case, climate change will not be solved by one country. To succeed, policy must be effective, legitimate and global.

OK,  how?

To make policy legitimate, it is essential to compensate losers.

If we cut fossil fuel use to zero in 10 years, nearly everyone is a loser in their position in the old (currently existing) economy.

use of the revenue raised from carbon pricing to compensate losers

As stated above, the losers will use compensation to pay to continue to heat their houses. Where does the cut in use emerge from?

In an era of populism and nationalism, is there any chance of all this? Not obviously, alas. If so, we will indeed have failed. But the young are surely right to expect better.

That is his final paragraph. I think we are dealing with an understandable failure of nerve. No one knows what to do to stay below 1.5.  So we default to drift and lots of interesting local experiments. Should we just get on board the drift scenario?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2098. Capitalism, socialism and alternatives. Economics rarely discuss

provocation 232 Capitalism, socialism and others.

It is getting harder to write provocations because we all are, every day, increasingly exposed to provocative facts by concerns with climate , fossil fuels, and inequality. But here goes.

Socialism and capitalism. Is there a third possibility? Both are running in parallel to democracy, the major way society makes decisions and by whom. Those with capital make the crucial decisions for society. In socialism the bureaucracy makes those decisions. In both, democracy is a public spectacle, without real power except the threat of revolt.

Economics does not seem to have a way of creating a third – 0r a fourth or a fifth – alternative for consideration.

We do not get economic journal articles that seem to go outside the confines of acceptable (to whom) limits. Books and popular press articles do a little better but are rarely if ever referenced in the journals. No major journal articles on for example what would happen if we did not, with law, create those anti free market things called corporations?

Such speculations are not written because, it seems, no major journal would publish them.

In most sciences such big step moves can be made because the ideas are immediately appreciated because they interpret some aspect of reality that was before unseen or misinterpreted.

In economics it is hard to come up with such convention -breaking facts. But when we do, as in the reality of climate heating driven by fossil fuels or the lack of inclusion of many people in the economy, mainstream economy seems to continue its undisturbed momentum, treating such empirical facts as external to the system of the economy.

Both society, which needs new thinking, and economics, which needs to remain relevant, lose out.a

2097. cal fires and climate

provocation 231. california fires as rehearsal for climate heating.

a day late. we have been riding the wave of the California Kinkaid fires snd had no power and then evacuatrd. but since we can learn from anything, …

I noticed that with Kinkaid people are much calmer than during last year’s Paradise fire. No power and evacuations. They have thought it through, have plans. This suggests that for climate events, such as rapid disengagement from fossil fuels, the more it is talked about the more people will rehearse what will happen and what their options are. they will be less afraid, more open to plans.

this should be a policy.

doug

from somewhere on the road

2096. IMF an avoidance of energy conversion costs.

Provocation 230.  Why do institutions deal with marker costs of energy but not of end costs of its use?
I keep being perplexed.  So many institutions treat the energy problem driving climate heating as solved if alternative non carbon costs match or fall below  fossil fuel costs.  This is especially important for the costs and impact of heating buildings. My view, as I have written, is that the discussion  looks at the cost per kw and hoping solar and wind can deliver kw below the cost of coal and gas. this is pure market theory.

But these discussions  do not include the cost of conversion of gas furnaces to electric, which are significant.  Even  if such costs are made part of the discussion, the capacity of manufacturing to deliver so many units seems not to be recognized.
a new report by  the IMF , attached, is typical I think of institutional perspectives.
It starts with a strong view of the dire problems of co2. Followed by
A better future is possible. The technological and
policy means are available to switch from coal and other
polluting fossil fuels to cleaner energy while maintaining
robust economic growth and creating jobs. For the
needed transformation to take place, a key challenge is
to distribute its costs and benefits in a manner that can
muster enough political support—both domestically and
internationally.

and

This Fiscal Monitor argues that, of the various mitigation
strategies to reduce fossil fuel CO2 emissions,
carbon taxes—levied on the supply of fossil fuels (for
example, from oil refineries, coal mines, processing
plants) in proportion to their carbon content—are the
most powerful and efficient, because they allow firms
and households to find the lowest-cost ways of reducing
energy use and shifting toward cleaner alternatives.

Then

burden of the tax in proportion to household consumption
is moderately larger for lower-income households
Solution?
This chapter analyzes the carbon prices countries
must impose to implement their mitigation strategies
and the tradeoffs with other mitigation instruments.
Limiting global warming to 2°C or less requires policy
measures on an ambitious scale, such as an immediate
global carbon tax that will rise rapidly to $75 a ton of
CO2 in 2030. Under such a scenario, over 10 years
electricity prices would rise, on average, by 45 percent
cumulatively and gasoline prices by 15 percent, for
households, compared with the baseline (no policy
action). The revenue from such a tax (1.5 percent of
GDP in 2030, on average, for the Group of Twenty
[G20] countries) could be redistributed, for example,
to assist low-income households, support disproportionately
affected workers or communities
So cash goes to lower income people who have ti pay a higher price. Won’t they just use the supplement to pay the increased cost while maintaining, or only slightly lower, current costs? Remember for the gas heated home, the cost of shifting to electric is much more in the cost of replacing equipment to use the electricity than it is in the cost of the electricity itself.

The kind of seductive language , sort of implying we are conscious, is

This Fiscal Monitor compares such uses
of the revenues in terms of economic efficiency and
impact on income distribution.
A question would be, what is the going on in th mind of the writer? Lying, at one extreme, and, at the other extreme of motive,  comfortable using grad school logic because never taught what might be wrong with this market model applied to  the market model to appliance conversion. Those conversion costs by the way, are proportionally higher for large buildings. There is also the problem of time to manufacture all the new electricity based heating units.
Meeting temperature stabilization goals does not
mean that overall global energy investment must
increase much further, but it does imply an urgent need
to shift energy supply investment toward low-carbon
sources.
This perspective seems aimed at maintaining supply in some form without consdiering its use at the and. Why?
Yes. Why are we stuck in this logic applied to only half the problem?
Here is a more detailed part of the report
These opportunities include
reducing the emission intensity of power generation
(for example, switching from high-carbon-intensive
coal to intermediate-carbon-intensive natural gas or
coal with carbon capture and storage, and from these
fuels to carbon-free renewables or, with appropriate
safeguards, nuclear); curbing electricity demand (for
example, through adoption of energy-efficient appliances,
air conditioners, and machinery and less use
of products using electricity);
Energy efficient.. but no cost analysis
One source of the problem seems to be a failure of those with an economic perspective to recognize the realities of the texture or real lives . What is it like to live in a home that we want to keep heated? We will do all we can to keep using energy and to avoid the cost of conversion – actually most homes cannot afford this conversion.
Now what?

2095. Bezos and Goldman Sachs.

Provocation 229 Oct 14.

Two thoughts. Bezos and Goldman-Sachs.

Most of us probably saw or read about the Jeff Bezos article in The Atlantic. $150 Billion, increasing a billion a month, and using it to get rid of the earth and fulfill his childish identification with Starwars. – Why did monopoly and size get such  an upper hand? The equilibrium point in markets is concentration to one because small factors, of which there are many, repeatedly give the wealthier  the upper hand in the majority of transactions. 

But  since something like Amazon has to exist because someone has to be the biggest, we need policy to work against  such  absurd result. Since Amazon is the result of a societal process, we are all part of making Amazo what it is, so why shouldn’t we all benefit? So here is a proposal that conserves most of capitalism. Let the corporations perform as they do, including salaries as they deem desirable, but put all the profit of all corporations into a national fund, like the Alaska oil fund, and distribute equally the profits with a check to every citizen once a year.  That would take away the incentive to concentrate wealth and to buy back stock to push up executive  pay. 

2. If we look at the prose that just won the Nobel prize, at economics proposals in Project Syndicate, on Medium, Forbes and more, we are still getting   silo proposals, each  issue dealt with as if the others did not exist (externalities),

Growth to create jobs despite the negative impact on co2.

Education to give people the skills to get the  up the ladder jobs which are not coming. Technical skills are the easiest to turn into algorithms.

Climate action which is driven by desire for corporate profit and leading to more concentration of wealth. This from Market-watch today”

“In July, Goldman Sachs formed a Sustainable Finance Group, a much-hailed project that CEO David Solomon in a letter called a “significant, long-term” priority that is increasingly a “strategic growth opportunity and competitive necessity for our firm and our clients.”

Push for AI despite its negative impact on jobs.

The spokespeople for each of these are economists. 

I sense a research project for dealing with a situation where  when A goes up  it drives  B down, but both are desirable, what to do?  (Arrow says there is no logical procedure, but something has to happen. Each treating the other as if it doesn’t exist is not a socially productive solution.)

Might be interesting to take an anonymous  community poll on how long do we have before we are past the point of being able to keep below 2 degrees?

The consequences are shocking when dealt with in the following way, also from  Goldman Sachs. “From a note in April, researchers found that if the temperature increased by just 4 degrees Fahrenheit, US GDP would drop 2%. If it went up 8 degrees, then 4% would be lost.” This is mal-practice.  At  8F, 5 C, humanity is done for except for niche living post collapse. 

2093. ice man lifestyle 3300bc.

brad delong posted this. important for gardenworld to show the lifestyle of early humans.

Wikipedia: Ötzi the Iceman https://en.wikipedia.org/wiki/%C3%96tzi: “Born near the present village of Feldthurns (Velturno), north of Bolzano, Italy. Died c. 3300 BCE (aged about 45) Ötztal Alps, near Hauslabjoch on the border between Austria and Italy…. Currently, it is believed that Ötzi bled to death after the arrow shattered the scapula and damaged nerves and blood vessels before lodging near the lung….. Ötzi was 160 centimetres (5 ft 3 in) tall, weighed about 50 kilograms (110 lb), and was about 45 years of age…. Analysis of pollen, dust grains and the isotopic composition of his tooth enamel indicates that he spent his childhood near the present village of Feldthurns, north of Bolzano, but later went to live in valleys about 50 kilometres farther north…

…Partly digested remains of ibex meat, confirmed by DNA analysis, suggesting he had a meal less than two hours before his death. Wheat grains were also found. It is believed that Ötzi most likely had a few slices of a dried, fatty meat, probably bacon, which came from a wild goat in South Tyrol, Italy. Analysis of Ötzi’s intestinal contents showed two meals (the last one consumed about eight hours before his death), one of chamois meat, the other of red deer and herb bread; both were eaten with roots and fruits. The grain also eaten with both meals was a highly processed einkorn wheat bran, quite possibly eaten in the form of bread. In the proximity of the body, and thus possibly originating from the Iceman’s provisions, chaff and grains of einkorn and barley, and seeds of flax and poppy were discovered, as well as kernels of sloes (small plum-like fruits of the blackthorn tree) and various seeds of berries growing in the wild.[18] Hair analysis was used to examine his diet from several months before….

High levels of both copper particles and arsenic were found in Ötzi’s hair. This, along with Ötzi’s copper axe blade, which is 99.7% pure copper, has led scientists to speculate that Ötzi was involved in copper smelting…. Ötzi’s lifestyle included long walks over hilly terrain. This degree of mobility is not characteristic of other Copper Age Europeans. Ruff proposes that this may indicate that Ötzi was a high-altitude shepherd…. Ötzi apparently had whipworm (Trichuris trichiura)…. Ötzi’s teeth showed considerable internal deterioration from cavities. These oral pathologies may have been brought about by his grain-heavy, high carbohydrate diet…. Ötzi was lactose intolerant….

Ötzi had a total of 61 tattoos (or Soot tattoos), consisting of 19 groups of black lines ranging from 1 to 3 mm in thickness and 7 to 40 mm long. These include groups of parallel lines running along the longitudinal axis of his body and to both sides of the lumbar spine, as well as a cruciform mark behind the right knee and on the right ankle, and parallel lines around the left wrist. The greatest concentration of markings is found on his legs, which together exhibit 12 groups of lines….

Ötzi wore a cloak made of woven grass and a coat, a belt, a pair of leggings, a loincloth and shoes, all made of leather of different skins. He also wore a bearskin cap with a leather chin strap. The shoes were waterproof and wide, seemingly designed for walking across the snow; they were constructed using bearskin for the soles, deer hide for the top panels, and a netting made of tree bark. Soft grass went around the foot and in the shoe and functioned like modern socks. The coat, belt, leggings and loincloth were constructed of vertical strips of leather sewn together with sinew. His belt had a pouch sewn to it that contained a cache of useful items: a scraper, drill, flint flake, bone awl and a dried fungus….

The leather loincloth and hide coat were made from sheepskin… nearer to modern domestic European sheep than to wild sheep…. Part of the coat was made from domesticated goat… The leggings were made from domesticated goat leather…. Shoelaces were made from the European genetic population of cattle. The quiver was made from wild roe deer, the fur hat was made from… brown bear….

Other items found with the Iceman were a copper axe with a yew handle, a chert-bladed knife with an ash handle and a quiver of 14 arrows with viburnum and dogwood shafts. Two of the arrows, which were broken, were tipped with flint and had fletching (stabilizing fins), while the other 12 were unfinished and untipped. The arrows were found in a quiver with what is presumed to be a bow string, an unidentified tool, and an antler tool which might have been used for sharpening arrow points. There was also an unfinished yew longbow that was 1.82 metres (72 in) long.

In addition, among Ötzi’s possessions were berries, two birch bark baskets, and two species of polypore mushrooms with leather strings through them. One of these, the birch fungus, is known to have anthelmintic properties, and was probably used for medicinal purposes. The other was a type of tinder fungus, included with part of what appeared to be a complex firelighting kit. The kit featured pieces of over a dozen different plants, in addition to flint and pyrite for creating sparks.

Ötzi’s copper axe’s… haft is 60 centimetres (24 in) long and made from carefully worked yew with a right-angled crook at the shoulder, leading to the blade. The 9.5 centimetres (3.7 in) long axe head is made of almost pure copper, produced by a combination of casting, cold forging, polishing, and sharpening…. The copper in the axe came from southern Tuscany. It was let into the forked end of the crook and fixed there using birch-tar and tight leather lashing….

The Y chromosome DNA of Ötzi belongs to a subclade of G defined by the SNPs M201, P287, P15, L223 and L91 (G-L91, ISOGG G2a2b, former “G2a4”)…. Analysis of his mitochondrial DNA showed that Ötzi belongs to the K1 subclade…. Ötzi is most closely related to southern Europeans, especially to geographically isolated populations like Corsicans and Sardinians. DNA analysis also showed him at high risk of atherosclerosis and lactose intolerance, with the presence of the DNA sequence of Borrelia burgdorferi, possibly making him the earliest known human with Lyme disease…. In October 2013, it was reported that 19 modern Tyrolean men were descendants of Ötzi or of a close relative…

2092. Need for a new story

Human history has been a continuous damaging search for a ladder to climb up to a better future – for the successful climbers. The story is going to change, because those who climbed the highest have used policies to do so that ruin the world for the rest of us. No more ladders.  The need is for on the ground cooperation. Waking up is going to be necessary.

____

Relevant to  Gardenworld