2073. Dorian and Climate change – how we think.

Provocation 224   Life threatening Dorian and life threatening economy collapsing through climate change -how we think. 

Why are a number of the economists I know  so tuned in to Dorian but not tuned in to climate change? (I am going to leave this rough, like a conversation, not giving the false appearance of being well worked out. Imagine that we are just having a cup of coffee and  chatting. )

 There are some deep similarities between the way we look at the climate, economy and  change and the way we look at Dorian . For example, the focus on numbers such as GDP and category 4 or 5.  But Hurricane categories seem visceral while   GDP a is OK for approximate calculation. GDP (and other performance measures for the economy, such as “incomes are rising”) do not get us in the gut – because it is too far away from visceral experience, and, as in this case, badly misleading. We know for example that cutting trees can contribute positively to GDP while also a loss  of wealth from the earth. But we don’t feel it the way trees falling in Barbados tears at our imagination.  In the economy our  numerics and our intuition often move in opposite directions.  House work and child care don’t count.  For hurricanes it seems like a more coherent experience.

The main difference might be that hurricanes are delivered in narrative form as a sequence,   “this then this then this”, whereas economics are delivered in equations – only “if this then this”. The narrative form is open and easy to include emerging or missing steps. In economics such things are treated as external to the system and mere disrupters of our professional stance. 

What can we learn about this? It really is a call for a deeper understanding of human feeling and cognition if we want to increase our understanding of what happens.. Our narratives about the hurricane seem fairly accurate, taken together, while for  climate change they are just touching the surface. Death  by hurricane is spoken, death by climate change is not.

One way to think about this s to compare an approach through systems thinking with narrative thinking.  I was in a meeting yesterday where a silicon valley thinker said he was relabeling himself a story teller, no longer  a systems thinker. System thinking tends to form around a single heavy model, narratives are more like  a handful of butterflies.

2065. An allegory about the modern economy.

provocation 223. aug 19

An allegory about the modern economy.

Once upon a time a small group of hunter-gatherers discovered a good sized pond and found that it was full of fish which they caught and ate and these fish became the center of their diet. The group grew and more people fished at the edge.The number of fish caught was related to the number of people fishing.The economists wrote equations. After a while of good living, space at the edge was harder to just walk up to and altercations broke out. Stronger men seemed to find themselves in the most favorable spots for an easier catch. The economists watched all this, related the population to the catch, and helped draft some rules to apportion the space along the pond’s edge. Some of the men found it better to go make fishing poles from somewhat distant saplings and trade the poles for fish. But what was not noticed, because better poles kept the catch proportional to the population of people, was that the total number of fish in the pond was going down. What they did see was that with more men fishing with better poles the catch remained reassuringly constant per person. More children wee born, more men made fishing poles. All seemed more or less ok, until. Ah, until.

After all, this is a fairy story. Until with no new pole innovations the number of fish caught was suddenly in decline, not enough to feed the fishermen and heir families and the pole makers and their families. The fish being caught were smaller and fewer. The economists had always assumed that more effort would mean more fish caught. Maybe a new technology would lead to more fish more easily caught. What they missed was that there were no longer enough fish to feed all the people. More effort, better technology, would not help. Other small groups had discovered other ponds, fields, herds and followed a similar path. There was nothing more out there.

In our time we have extracted much of the wealth from the land and the sea and sold it to the bulging population. But competition started pushing prices up, so we loaned money to the bulge – mostly against the value of their homes – to keep buying. What was not noticed was that that prices were higher, more welfare was distributed, and the people were skinnier (or fat from bad food which is the same thing) and living in increasingly poor housing or on the street. The society, having stripped the environment and the people, could no longer feed them all. Less food, more people, more debt, more anger. The economists looked for a new configuration of people and resources that would work, little realizing that there as no way to configure all the variables except possibly a wise leader who could with authoritarian verve bring land, technology, people into new equilibrium. But there was no such person in sight and what there was of “leadership” would lead to to much pushing and pulling, taking lots of time and making it impossible to get to any such new configuration and equilibrium. Any new technology would lead to the loss of jobs in old sectors and continue to deplete the environment. The old elite would look for robots algorithms and gated communities as defensible liveabe islands and this turns out to be, for lots of logistical reasons, an illusion.

So we are stuck. We can either start here and struggle for creative solutions, or just withdraw and let the curtain come down, figuratively to hide the reality from ourselves, or realistically, the drama is over.

2059. Economic formalism vs economic theory.

 Provocation 221 Economic formalism vs economic theory.

Much recent critique of economics has been on its formalism – more interested in the equations than in reality,   and hence  not a terrific science . The alternative to formalism is theory (narrative). Sounds strange. How are formalism and theory different, are they not the same?

Formalism usually raises the question how can I express this data in a set of equations, what is goin on with  the numbers.. Theory asks what is really going on here, what is happening outside the numbers.?

The difference is subtle. Take “capital”. No quantitative questions come to mind, but what is it leads to questions: who owns it, how does it affect society, are there alternatives? Same with “ownership” “property” or “land”. Formalism tends to work with what is (data sets) whereas theory pushes intuition and metaphor into the unknown.

To encourage a bit more playfulness in economics, here is a simple tool.


What comes in and out of the economy? Try a few of your own. Things will occur to you. Better questions, interesting answers. Obviously any such diagram is incomplete, the question is, is it fruitful?

Most economists assume relevant reality is “in the economy”, but the simple circle suggests that much of importance economically is usually treated as outside the economy. Such an assumption is very limiting on creating better theory.


comments much appreciated. doug@dougcarmichael.com

post 2036. Operating the system at a loss

Provocation #217 Operating the system at a net loss.

Capitalism is a problem for society  because it  maximizes profit and money wealth, not the quality of the society or of lives. Instead of managing for ecological health and the benefits of tech for the elimination of labor, it manages the whole for the good of a part, destroying the environment and crippling the people.

Capitalism exploits what is created and taken as if free and charges for it: trees, minerals, plants all of which have some human input but the main value is produced by the earth and then taken, worked and charged for. A few acres of redwoods bought for X, cut and sold for many times X, perhaps a 20 cents aboard foot. But think of what it took nature to make that board foot.  What is sold in the market, or taken to the end of building a new house,  includes unpaid work, such as the raising of children that are then taken by the employer for wages. The result is the depletion of the earth and of society. The whole supports a part.

Moreover, everything that is sold is sold for less than the total costs of production.  Think of what you pay for  your morning coffee. That payment is distributed back down the chain to the importers, the ships, the plantation. But the chain keeps on going, through the earth, its minerals and organics,  to the rain and sun. These last steps are not paid for nearly what they are worth. The result is an overall depletion of the earth without renewal nor compensation. Thus capitalism can appear to be making a profit but it is actually operating at a loss. We have used up much of the topsoil and polluted the atmosphere and impoverished much of the population (if you think of what it takes to raise a child and then that child as an adult, on the coffee plantation, paid).  

Bad system management. One result is that we do not have the leverage to repair the system and we have too many people, too much output,  too many guns and we can’t see a way to keep it from collapsing. Is anything better possible? Is there an economics for ecological restoration where there is no product nor  service but general good? Is there a way to distribute the fruits of tech so that everyone benefits from “labor saving”?



2033. The Democrats have no path.

Democrats and much of the voters are stuck. The old Democratic party of workers evolved since the 60’s to representing the professional middle class represented by the Clinton’s. The problem now is, the Democrats can’t go back, because the labor they lost became the middle class that is now losing out, and those people don’t want to be labor, they want to be middle class and have salaries, not wages.. That group, the vulnerable middle class , is looking for a solution that will give them good salaried employment,  but  the context is climate change and the need to use no carbon fuel. Automation also is in the wings ready to compete for any new jobs.

There is no possibility of a vibrant middle class of consumer style living. The population will need to embrace agriculture to survive. No politician is yet ready to tell this truth. What the people want the Democrats cannot deliver and people in their frustration – in a huge game of musical chairs – are attracted to Trump’s disruptions, which going much further will lead to wars arrests, closings.



Post 2027. Strategy and climate – by whom? What?r

There are three obvious sets of actors

  • corporate
  • state
  • decentralized
  • Unknown  4th?

What will happen is likely to be a mix with one dominant.

Four obvious approaches/strategies

  • Stop co2 and shrink the economy
  • Stop co2 and innovate green like mad to expand the economy
  • Just invent new technologies
  • Do nothing

Those who prefer decentralization with its open society with equity  (guaranteed annual income) approach are hostile to  what a massive corporate initiative might be like. My sense is that we will not do the future without taking into account the momentum of the present.  Corporations and capital certain dominate now. It is hard to believe that they would just give up to serious climate change, especially when the alternative as they see it might be “green rush” for the gold, with increasing centralization of wealth, class, power, and, they would hope, quality of life as the Plant struggles.. They would mobilize rapidly This is a challenge to government and local initiatives because the corporate feudal system  would want to not be motivated by the negative of climate but seize the day, milk the society for all the cash it can to invent, organize and profit from the activity.

That is, corporations would have a three-fold  agenda.

  • Deal with climate heating
  •  Increase but at least maintain capital flow by going massive  green
  • Maintain security for themselves (the top 1% plus their support people  in law,  politics, education, health, lan, etc.).

One unknown is the Internet

  • Internet of social surveillance
  • Inernet or organizing grass roots, local initiatives into a full bore coping with climate realitiies.

Aso unknown is the character of a majority of the people at the top. Push comes to shove, prefer a more decentralized or clearly corporatist society?


The Green New Deal proposes

  • stop fossil fuel to zero,
  • deal wiht the resulting social chaos wiht guarnateed annual wage, training.

The problem is what if we get the first but not the second? This is the approach I think the corporatists will want to take.





Post 2027. The lawful and the unique. Economics avoids the unique.

Provocation 2013. The lawful and the unique. Economics avoids the unique.

Science has taken the view that things that can be made into “laws” are worthy of science. Unique events not so.

Mary is standing by herself on the livingroom floor. Newton’s F=MA tells us how much she weighs.

But Mary sees  Jane’s dropped handkerchief, which suggests a drama. 

Economics deals with things like the first but ignores (as unscientific) things like the second.  Bt real life, including economic life is vastly more made up of events  like the second. This is important for climate change discussions. Economics talks easily about shifting energy source from fossil to wind and solar but does not discuss how Harry will need to get rid of the family’s gas heater an replace it with electric. Who pays? How many such heaters have to be made? How long will it take?

If science was  interested in the world  it would explore both kinds of events. In that sense science is not scientific but ideological. 

post 2054 cascading effects in economic shifts

Cutting energy use to stay under 2 degrees will have cascading effects. The energy for commuting for example, lets say cut enough that some people can’t get to work (as we know people drive increasingly long distances). The building they drive to also un-heatable and coolable. Not useable. What happens? Mortgage doesn’t get paid, anks fail, product of the company doesn’t get delivered..A stable structure comes apart as fast as pickup sticks. We have built to get rid of redundancy and to rely on “just in time” supply chains. These are not very resilient.
Is there any coherent discussion of cascading effects in economics?

Post # 2051 big data vs unique event.

We are in a paradox, first amassing big data to intercorrelate everything and tying all the data sets together into one giant machine (Mirowski ).

At he same time we are missing the big thing going on – the undoing of the planet – that we needed to know. The who, what why and when – and alternatives.
How can these two co-exist? Doesn’t the promise of the first – knowing everything – expect to know the one thing that we needed to know?

How much of economics is just filling in the gaps in the fabric (like exporting the Chinese person recognition software to Chile and tyying the results to consumer data sets) and how much is struggling for insight into the overall situation?