Post # 2019 Could the problem be capitalism?

Provocation #170
What if the problem is capitalism?
Without safeguards the dynamics of the rich having better access to market information and cheaper credit means those with capital continue to get richer. Simple dynamics at play. To keep this excess manageable safeguards must be continually active, but increasing complexity keeps the dynamics hidden.

The counter measures to capital excess have lost out. A ruined planet ecologically and a ruined society moving back toward feudalism are the result.

Capitalism started early, with herders, breeding cattle, a new head From which comes cap, capital. Ever since the powerful have owned the surplus output of society, its capital. But they needed workers. No more. Any new job is a target for algorithmic development.

Now what? The best rationale for capitalism might be that it is the best way so far invented to create and support an elite without which governance is impossible. Of course the downside is that the insatiable quest for capital ownership leaves the people vulnerable and the planet a mess. Lots of new thinking needed. Or are we stuck with momentum we can’t change? Are we all just pretending?

#2018 Why Trump won. Economic more than identity

The Economic and Social Roots of Populist Rebellion: Support for Donald Trump in 2016
Thomas Ferguson, Benjamin Page, Jacob Rothschild, Arturo Chang, and Jie Chen∗

at

https://www.ineteconomics.org/uploads/papers/WP_83-Ferguson-et-al.pdf

Important.

ABSTRACT This paper critically analyzes voting patterns in the 2016 U.S. presidential election. Using survey data from the American National Election Survey and aggregate data on Congressional districts, it assesses the roles that economic and social factors played in Donald J. Trump’s “Populist” candidacy. It shows the hollowness of claims that economic issues played little or no role in the campaign and that social factors such as race or gender suffice to explain the outcome. While agreeing that racial resentment and sexism were important influences, the paper shows how various economic considerations helped

post # 2018. Economics and world management.

provocation #  169. Economics and world management.

The world definitely needs managing – or some equivalent. Everything overlaps. Specialties don;’t work. The world is one but specialties divide it. Is there any path for economics that will make it a partner in world management? Or are we locked in to an economics that serves academic departments, quantifying bureaucracies and career management?

A management approach  would start with an understanding of what the world and its parts are, how they got that way, and what can happen, and then engage to help make the world move toward an ecology which can support the people. A management approach would be very negative toward those who saw the world as a game to be played for private gain, but realistic about the need for leadership with a  perspective that requires education and rewards.

I realize that I have become increasingly skeptical about the ability of humanity to do this. The question then reverts back to: what is the best use of our time given actual conditions?

Mandatory sequestering? Possible. Unlikely. Many overlapping jurisdictions. Economics could help sort these out. Unlikely. Possible. 

——

Note. The argument about the anthropocene is that humanity created this mess by sucking too hard and becoming dependent on stored energy. Andreas Malm in his Fossil Capital argues that such a perspective fails to notice that it wan’t humanity, it was some humans, resisted by others, who built our energy dependent society. To see the climate and energy dilemma as caused by human nature is hopeless. To see that some of us, from hunter gatherers on, resisted suggests that we are not up against human nature, but confronting the character of some in their   exploitation others. 

Note. The current world chaos is the product of the organization of wealth  and population that increasingly marginalize many and, despite Steven Pinker style thinking, the living conditions of an increasing number (maybe all of us if we include the ethos in which we live, the moral climate) are seriously deteriorating.

Post #2016 Bill Gates capital serving memo on climate change.

Gates Memo has today (Oct 17) My plan for fighting climate change.
Climate change and the 75% problem
gatesnotes.com · by Bill Gates

 
Bill Gates makes a proposal. I think we need to be very critical and get him to take himself more seriously. The errors and omissions of logic are representative of why we are not doing well with global heating. He is trying to maintain the capital investment leading to profit paradigm.

To prevent the worst effects of climate change, we need to get to zero net greenhouse gas emissions in every sector of the economy within 50 years

Zero gross or net (why does he put in net), even if totally eliminated now would not lead to preventing climate warming. What is already in the air and the oceans will still work its rapid destructive effects.

To stop the planet from getting substantially warmer, we need breakthroughs in how we make things, grow food, and move people and goods—not just how we power our homes and cars.

So if the planet will get “substantially warmer” (I wonder what exactly he means by substantial, uncomfortable or unlivable?) anyway we need much more than those things .Is there a sub text here? I think so. The ones he names are all problems that can be solve, maybe, by new innovations..

All of that new consumption translates into tangible improvements in people’s lives. It is good for the world overall—but it will be very bad for the climate, unless we find ways to do it without adding more greenhouse gases to the atmosphere.

He means prior innovations. But is it for the good of the world? It is important to know the arguments here. It produced wars, slavery, colonial empires, and a dickensonian world for many (and still does ). Could we actually stop more greenhouse gas? Solar and wind still require materials that need to be mined, or manufactured. I think the logic here is to set up the framework for more investment that can pay off to investors. Ah, so he goes on..

This is undoubtedly a tough problem. It is not obvious what the big breakthroughs will look like. Most likely we will need several solutions to each challenge. That is why we need to invest in lots of research and development, across all five areas, now.

Notice the problems become investment targets even though the sum does not equal limiting climate change and in fact each undertaken vigorously would, at least in the beginning . contribute to warming. Remember, there may not be any after the short run. We only have minus a few years to fix the system. He continues;

Personally, I’m part of a group of investors in a private fund called Breakthrough Energy Ventures (BEV), which is putting more than $1 billion into helping promising companies take great ideas from the lab to market at scale. We’re using the five grand challenges I mentioned above as the framework for our investments. Every idea we’re supporting is designed to solve one of them—and our mission is about to get a big boost from a new partnership in Europe.

Ah notice that these are not public service investments, they are money people investing in a future productive use of their wealth in a system that is already concentrating wealth. One possibility of course is tht the world’s wealthy unite in imposing a new paradigm of money, economy, life style, equality, and environmental remediation. Interesting to think of but nothing in what he says suggests that possibility. (If you know of any such discussions lease let me know).

Because energy research can take years—even decades—to come to fruition, companies need patient investors who are willing to work with them over the long term. Governments could in theory provide that kind of investing, but in reality, they aren’t great at identifying promising companies and staying nimble to help those companies grow.

Years? Where is he with the numbers? protecting investors’ investments in payoff but certainly not engaging with the seriousness of the problem.

Post # 2015. Global heating and economics.

provocation # 167 Global heating and economics.

Is there any realistic hope for dealing with climate? A few interviews show that many people have a very inaccurate understanding of what’s up. For Example, a car with a full tank of gas. What happens to the gas as the tank is used for driving. The question was “How much exhaust does your car produce from a tank of gas. Some answers:

A:(Person with a new Lincoln)I have a good new car and there seem to be no exhausts, not like my old car where you could see them.

A: (Hybrid Prius Owner. )None.

A:(several year old Ford)I don’t know, I guess a cup full. I don’t see any.

The reality is that a tank of gas, let’s say ten gallons, as it burns combines the carbon in the fuel with oxygen and the result is each gallon of gas, which weighs about 6 pounds produces out the tailpipe about 20 pounds of co2, or 200 pounds that will now be suspended in the air along with the exhaust from the two billion vehicles in use, close to a quarter of a ton for each time we fill up the tank.

(The following from https://www.fueleconomy.gov/feg/contentIncludes/co2_inc.htm

How can 6 pounds of gasoline create 19 pounds of Carbon dioxide? It seems impossible that a gallon of gasoline, which weighs about 6.3 pounds, could produce 20 pounds of carbon dioxide (CO2) when burned. However, most of the weight of the CO2 doesn’t come from the gasoline itself, but the oxygen in the air. When gasoline burns, the carbon and hydrogen separate. The hydrogen combines with oxygen to form water (H2O), and carbon combines with oxygen to form carbon dioxide (CO2).

CO2 molecule with one carbon atom (atomic weight 12) and two oxygen atoms (atomic weight of 16 each)A carbon atom has a weight of 12, and each oxygen atom has a weight of 16, giving each single molecule of CO2 an atomic weight of 44 (12 from carbon and 32 from oxygen). Therefore, to calculate the amount of CO2 produced from a gallon of gasoline, the weight of the carbon in the gasoline is multiplied by 44/12 or 3.7. Since gasoline is about 87% carbon and 13% hydrogen by weight, the carbon in a gallon of gasoline weighs 5.5 pounds (6.3 lbs. x .87). We can then multiply the weight of the carbon (5.5 pounds) by 3.7, which equals 20

Everyone on earth should know this.

———

Global warming and economics. Nordhaus got rave reviews for winning the Nobel. It is always mentioned that he discusses climate, but reading through some of his papers and book, the focus is on carbon tax. And he is honest about how long it will take, but he doesn’t then react with “ok, here is what needs to happen. Most recent interview, from the NYT few days ago.

The New York Times https://www.nytimes.com/2018/10/13/climate/nordhaus-carbon-tax-interview.html

“One of my very, very few disappointments in Obama when he was president is that he did not come out in favor of carbon tax. I’m sure he did the political calculus on this. He should have come out and talked not just about climate change and its dangers but how to use a carbon tax to fix it. He was a great speaker a great educator but this is one where he let us down, I think.”

The implication that a carbon tax would fix it is confusing people The reality is that if we stopped ALL carbon fuel use tomorrow, Tuesday, ALL, We would still face a devastating future from climate heating and its consequences for agriculture, migrations, and wars, all leading to the dislocation of people from their current circumstances of trying to live.

The interviewer asks: “How do you think a carbon tax could get bipartisan support? Nordhaus responds:

“Things change over the long run. What is toxic or opposed in one generation gradually becomes accepted in the next. Social security took a long time. It was opposed for many, many decades but since Reagan is has been widely accepted.”

Again the interviewer: Do we have enough time to avoid the warming that will bring severe and damaging effects of climate change?

It’s not going to happen in time for 1.5 degrees. It’s very unlikely to happen for 2 degrees. We’d have to be very pessimistic about the economy or optimistic about technology for 2 degrees. If we start moving very swiftly in the next 20 years, we might able to avoid 2 degrees, but if we don’t do that, we’re in for to changes in the Earth’s system that we can’t begin to understand in depth. Warming of 4, 5, 6 degrees will bring changes we don’t understand because it’s outside the range of human experience in the last 100,000 to 200,000 years. We’ve been going backward for the last two years. Maybe we can stop going backward and start going forward.

Can we do better? Chandran Nair’s Sustainable State makes a serious attempt. He lays out the logic for a single state with the authority to make major decisions. But he too does not lay out a political or violent process that could actually create such a state.

`Is there any group of wise people who could call for a global shift to such governance now? The US Declaration of Independence reads:

 

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

 

Would it be possible to run the process backward? “When in the course of human event it becomes necessary to renew the bonds…”?. Global heating and economics

Post #2008 Constraints within economics prevent engagement.

What are the self-imposed constraints on new economic thinking?

The purpose of science is to give as best we can a picture of relevant reality. It is not the results of applying a method to a problem only because the problem is tractable with the method. Aa Aristotle made clear, each un known has is appropriate method.The first criteria is to pick a good enough example of the problem that, if understood, would actually throw light on the problem, not just on the method.

Economics seems to operate under extreme constraints on what it can or should study. Big data can find the tiny fraction of you that correlates with the tiny fraction in many others, but it cannot find the Plato or Bob Dylan in you. So big data misses lots that is relevant to actual humans. The admonition to grad students and tenure seekers to find a good data set might be good careerism but bad science.

If we accept the constraints, like keeping economics separate from politics or the other social sciences, how can we live up to the challenge for new economic thinking? New economic thinking probably requires introducing new aspects of reality, new “variables”, into the discussion. To introduce new methods without considering new aspects of reality probably can’t bring us very far and reflect a conservative – “things have to change in order to remain the same” approach, which might provide an important clue as to the motive for the slow movement of new economic thinking.

Constraints emerge because we stay within assumptions that we do not violate:

The assumption of capitalism.
The assumption that ownership is not a legitimate category of economics
The lack of discussion of the caste system that divided us into owners and workers, labor and capital.The legitimacy of corporations

Economics bypasses all the interesting categories of how the day is spent by an unemployed spouse, by the retired, trust fund babies, artists choosing poverty, those filling out time to retirement by playing videos at their desks, adventurers. We don’t look at the content – much of which is not “economic”- of the lifestyles of the one percent.

Why do we stay within these constraints?

Good manners?
Not wanting to shake up colleagues?
Fear of consequences to career?
Fear of destabilizing society?

Put another way: the world needs managing of the relationship between humanity and the globe, which needs to be a mix if economics, ecology, politics, philosophy, historical understanding, dealing with human nature and civil society. Is economics up for it, or is it holding on to old assumptions that help prevent any integrated approach?

Is there a better way to frame the question?

Post # 2004. World Economic

Financialisation as the Core Problem for a “Social Europe”

paper. 

For more than three decades, increasing financialisation has been a core feature of the European economy. This process does not only lead to economic instability, but also to social inequality. A driving force of financialisation in Europe are the internal market institutions of the European Union, aggravated through the introduction of the Euro and the programmes for rescuing the common currency. The European Union, principally, should be the most suitable institution to limit financialisation in favour of a more social Europe, given that it is often considered to be a shield against the harsh winds of globalisation. However, both the legal foundations as well as the political power relations within the Union are more likely to rather pave the way towards a deepening of financialisation and social inequality.

 

More diagnosis, but the language more pointed.

2001.Radical numbers

Provocation # 148. Radical numbers.

The following is sketchy.

I like Musk’s use of numbers.

 

https://youtu.be/OIgzzAMgnSU

“Two  billion wall batteries  would be needed  to meet all the world’s energy needs.  Difficult? Most people think impossible. We have 2 billion cars, replaced every twenty years. We can do this. “

If we took the social side in the same straight-forward way, what draconian but adequate measures would be necessary. A few off the top ideas floating around:

 

•Stop all air transportation  October 31. Use internet
•Cut population radically
•War can do it.
•One child families gets each child 4 parents.
•Food. Seed production increased and distributed. Everyone plants.
•Freeze on mortgage payments, cut rent. (Down come the banks).

•Unemployment is first step toward redeployment,

You get the idea. Necessary but impossible? But something will happen.

 

Two major narratives to start:

◦Collapse; climate,  food, grid, finance

◦Cohere, struggle but widespread survival with dignity..

Smart money right now seems to be  on cohere (though private conversations suggest widespread skepticism), because if you win, great, and if you lose no worse than if you had bet on collapse. But since this takes many smart people who, in choosing the likelihood of society cohering,  out of the effort to work on draconian measures, which consequently hurries us toward failure.

 

What to do?

Post # 2000. Intro to the book

The 2000 post seems like a landmark, though I remember the disappointment that moving the year from 1999 to 2000 was not so exciting.  To mark this occasion now  here is the introduction  to a book I am drafting, the intro is of course still a draft,

The working title is

GardenWorld and Civilization:
Its Politics economics and philosophy-
The drama of humanity

Click on link for pdf

intro aug 5

Here are the opening paragraphs..

Chapter 1. INTRODUCTION
Any politics which does not aim toward the humanization of its people and the gardening of the world is not an adequate politics.  – DC.

______________________________________

Since we all want to live in a vital combination of nature and civilization, why do’t we use our wealth to go there? Without a goal to enhance the globe and its nature we have embraced the blind path of killing it off. The goal was to develop technology so as to free people from work and to live in a beautiful world – but not to free them from income. The world we have, where technology, governance and infrastructure support the wealthy and their professional supporters, but not the majority of people, needs to be seen as a grand failure. There is a goal for the world, a mix of nature and civilization, what I am calling GardenWorld, that has a deep appeal to many and could possibly be a goal to which we can work. GardenWorld would replace the drive for growth and consumption that has benefitted the few and not led to a society we love nor can trust, that limits basic security and creates meaningless work and worse unemployment..
We can think our way to a better society rather than just being carried along like a semi out of control. Our society is not ready for autonomous driving (though the tech world is moving us there). We need a shared sense of what is happening and we need a goal to know what we are doing. “Without a vision the people are lost.” We are not
using our intelligence to furthering the well being of the species but to enhance favored individual lives. Early societies had elites that took the well being of the population through the complex process of food as crucial, and managed fairly well.
A return to thinking about how the human species and the natural environment can be interrelated is essential, to our survival. We are organized to favor increasing complexity linking money, innovation and markets rather than favoring flexibility to deal with breakdowns and misjudgments. Flexibility may even help us to a more delightful life. While we need innovation, we also need, as a balance, restraint and reflection on secondary consequences of innovative proposals. Proposals need to be consistent with society, with the human life cycle, as well as technical requirements. Learning to appreciate each other and others cultures needs to be the core of a new culture for humanity.
One lesson I hope we all understand: it is very important to be better educated: philosophy , history , anthropology. We tend to believe that we already know the outlines of what is important. This is not true. In fact we have built institutions that reinforce narrow thinking by creating narrow departments and a current practice that supports careers management, not insight .