“As a double bonus, if everyone stays irrational it might greatly enrich the author, providing future funding for blockchain performance art.” The great art project of our age is to entirely collapse the distinctions between “fraud” and “performance art,” so that one day mortgage-bond traders will be able to say “wait, no, I wasn’t lying about bond prices to increase my bonus, I was performing a metafictional narrative about bond-price negotiations in order to problematize the underlying foundations of bond trading in late capitalism.”
Posts tagged economics
The next step takes the logic further: not only stealing from the rich and giving to the poor (like Robin Hood did), but exploring, building new ecologies, new ecosystems, new universes, new possibilities, new worlds of value. For this purpose the Robin Hood hydra grew a new head: a start-up company Economic Space Agency, Inc. (ECSA). Economic Space Agency builds tools with which we can create economic space — not only to distribute something existing or produced in a pre-existing space, but to reorganize/rebuild the space itself. Two trends are converging and making open source economy possible: the moldability and plasticity of financial technologies and the decentralization and disintermediation provided by distributed ledgers. ECSA’s DNA contains all these things: hard core research (the team has published over 25 books), direct engagement with the power of art to create unforeseen (economical, social, political, financial, incorporeal) processes, financial first-in-the-world inventions (such as a hedge fund as a coop, and asset-backed cryptoequity), experimental hands-on attitude and an intimate lived experience of how the financial and the social co-determine each other.
If you thought seat licenses were lucrative in the 1990s, wait until its city blocks in the 2020s. All are becoming increasingly embedded in physical systems, supply chains, mobility platforms and the architecture of data that makes these and other elements of the real world. One had only to notice how many seemingly incidental displays were malfunctioning in and around mass transit systems during the recent WannaCry ransomware outbreak to get a sense of where these companies systems are entwined with delivery of public conveniences. AWS, WhatsApp, Gmail and Facebook Messenger are now the mission critical sinews of the modern world. But you knew this.
There’s nothing resembling a “sharing economy” in an Uber interaction. You pay a corporation to send a driver to you, and it pays that driver a variable weekly wage. Sharing can really only refer to one of three occurrences. It can mean giving something away as a gift, like: “Here, take some of my food.” It can describe allowing someone to temporarily use something you own, as in: “He shared his toy with his friend.” Or, it can refer to people having common access to something they collectively own or manage: “The farmers all had an ownership share in the reservoir and shared access to it.” None of these involve monetary exchange. We do not use the term “sharing” to refer to an interaction like this: “I’ll give you some food if you pay me.” We call that buying. We don’t use it in this situation either: “I’ll let you temporarily use my toy if you pay me.” We call that renting. And in the third example, while the farmers may have come together initially to purchase a common resource, they don’t pay for subsequent access to it.
Nearly all of the most valuable companies throughout history were valuable through their strong network effects. If there is one motif in American economic history it is network effects. Every railroad made the railroad network more valuable, every telephone made the telephone network more valuable, and every Internet user made the Internet network more valuable. But no hedge fund has ever harnessed network effects. Negative network effects are too pervasive in finance, and they are the reason that there is no one hedge fund monopoly managing all the money in the world. For perspective, Bridgewater, the biggest hedge fund in the world, manages less than 1% of the total actively managed money. Facebook, on the other hand, with its powerful network effects, has a 70% market share in social networking. The most valuable hedge fund in the 21st century will be the first hedge fund to bring network effects to capital allocation.
“Feudalism with cell phones is still feudalism.”
The Chelsea thrived because it stuck to Philip Hubert’s original vision: to house and nurture New York’s creative community — and do so while still being affordable and open to all. It is unlikely that the Chelsea will house the next wave of American creativity (the hotel was closed in 2011, and the new owners are converting it into a pricey boutique hotel. Many of the rooms, including Bob Dylan’s, have since been destroyed.) Yet while New York city’s greatest art colony is all but dead, its structure and ethos continue to enrich American culture — albeit in a different way, and on an entirely different coast.
Yet despite the lucrative returns of Y Combinator and other startup accelerators sprouting up around the USA (like TechStars, 500 Startups, AngelPad and SeedCamp) no ambitious community-building projects exist for American arts like they do for American tech. While most talented tech gurus can find a startup accelerator to join (and fund them), aspiring artists are told to get a bedroom in Brooklyn or move to Iowa for an MFA — both of which cost upwards of $40,000 a year and don’t come with a patron.
Summing up the net worth of the Chelsea’s most famous residents […] the Chelsea Hotel was responsible for more than 2.1 billion dollars of value creation while it was open. That estimate is only going off of the net worth of the artists themselves — not all of the downstream albums or paintings or ticket sales they contributed to (i.e. a single painting by Pollock fetched $200M and Kubrick’s 2001: A Space Odyssey took in more than $190M at the box office. A single room of de Kooning paintings was estimated to be worth as much as $4B.) The funny thing? Despite their obsession with wealth, most startup accelerators don’t even come close to matching the economic impact of the Chelsea Hotel — much less its cultural impact.
“The whole problem that an economic system has to solve is how to achieve some approximation of the general good within the severe constraints imposed by human nature. If you can redefine human nature however you want, then you trivialize the problem.”
The landscaped lawns and flowering shrubs of Country Garden Holdings Co.’s huge property showroom in southern Malaysia end abruptly at a small wire fence. Beyond, a desert of dirt stretches into the distance, filled with cranes and piling towers that the Chinese developer is using to build a $100 billion city in the sea. While Chinese home buyers have sent prices soaring from Vancouver to Sydney, in this corner of Southeast Asia it’s China’s developers that are swamping the market, pushing prices lower with a glut of hundreds of thousands of new homes. They’re betting that the city of Johor Bahru, bordering Singapore, will eventually become the next Shenzhen. “These Chinese players build by the thousands at one go, and they scare the hell out of everybody,” said Siva Shanker, head of investments at Axis-REIT Managers Bhd. and a former president of the Malaysian Institute of Estate Agents. “God only knows who is going to buy all these units, and when it’s completed, the bigger question is, who is going to stay in them?” The Chinese companies have come to Malaysia as growth in many of their home cities is slowing, forcing some of the world’s biggest builders to look abroad to keep erecting the giant residential complexes that sprouted across China during the boom years. They found a prime spot in this special economic zone, three times the size of Singapore, on the southern tip of the Asian mainland.
Mainstream political scientists look slightly askance at the subset of geopolitics. They regard geopoliticians much as mainstream economists regard the so-called “gold bugs,” who persist in believing in the eternal value of gold as a medium of exchange and who place their faith in the old constants which they are sure will inevitably reappear. Similarly, the geopoliticans, an exotic subculture within the expert community, believe that despite lofty principles and progress, the mean — strategic conflict over land — will always prevail. Sometimes, they are right. The Foundations of Geopolitics sold out in four editions, and continues to be assigned as a textbook at the General Staff Academy and other military universities in Russia. “There has probably not been another book published in Russia during the post-communist period which has exerted a comparable influence on Russian military, police, and statist foreign policy elites,” writes historian John Dunlop, a Hoover Institution specialist on the Russian right.
Certainly this crisis makes us ask: what comes after work? What would you do without your job as the external discipline that organises your waking life – as the social imperative that gets you up and on your way to the factory, the office, the store, the warehouse, the restaurant, wherever you work and, no matter how much you hate it, keeps you coming back? What would you do if you didn’t have to work to receive an income? And what would society and civilisation be like if we didn’t have to ‘earn’ a living – if leisure was not our choice but our lot? Would we hang out at the local Starbucks, laptops open? Or volunteer to teach children in less-developed places, such as Mississippi? Or smoke weed and watch reality TV all day? I’m not proposing a fancy thought experiment here. By now these are practical questions because there aren’t enough jobs. So it’s time we asked even more practical questions. How do you make a living without a job – can you receive income without working for it? Is it possible, to begin with and then, the hard part, is it ethical? If you were raised to believe that work is the index of your value to society – as most of us were – would it feel like cheating to get something for nothing?
First communication became digitized and free to everyone. Then, when clean energy became free, things started to move quickly. Transportation dropped dramatically in price. It made no sense for us to own cars anymore, because we could call a driverless vehicle or a flying car for longer journeys within minutes. We started transporting ourselves in a much more organized and coordinated way when public transport became easier, quicker and more convenient than the car. Now I can hardly believe that we accepted congestion and traffic jams, not to mention the air pollution from combustion engines. What were we thinking?
First they took over communication. I don’t believe what I hear anymore. I only trust what I see out there in the streets. Then, when they took over the energy grid and fuel supply, things started to move quickly. Transportation became increasingly restricted. It made no sense for us to use cars anymore, since their control systems wouldn’t let us go anywhere inside the city anyway. And the militias control the countryside, so with a bit of skin pigmentation, there’s no telling whether you’ll end up as labor or food. I wonder what those flying cars look like from the inside. The only things that fly around here are the autonomous police drones. Forget about using public transportation. Unless you want to get tased. Or shot. Their facial recognition software is not good at distinguishing dark faces, so they may well confuse you with a known threat. Now, I can hardly believe that we were once allowed to move freely about the city, not to mention not being watched by persistent, omnipresent security systems. Sometimes I use the sewers when I need to go to somewhere far. They haven’t rigged them up with cameras yet, I think. I guess the smell is deterrence enough for most people. It’s hard to wash off that journey.
“There often are competing claims as to who invented a technology and when, for example, and there are early prototypes that may or may not “count.” James Clerk Maxwell did publish A Treatise on Electricity and Magnetism in 1873. Alexander Graham Bell made his famous telephone call to his assistant in 1876. Guglielmo Marconi did file his patent for radio in 1897. John Logie Baird demonstrated a working television system in 1926. The MITS Altair 8800, an early personal computer that came as a kit you had to assemble, was released in 1975. But Martin Cooper, a Motorola exec, made the first mobile telephone call in 1973, not 1983. And the Internet? The first ARPANET link was established between UCLA and the Stanford Research Institute in 1969. The Internet was not invented in 1991. […] Economic historians who are interested in these sorts of comparisons of technologies and their effects typically set the threshold at 50% – that is, how long does it take after a technology is commercialized (not simply “invented”) for half the population to adopt it. This way, you’re not only looking at the economic behaviors of the wealthy, the early-adopters, the city-dwellers, and so on (but to be clear, you are still looking at a particular demographic – the privileged half.)”
–The Best Way to Predict the Future is to Issue a Press Release. Audrey Watters.
So how should society be compensated? Taxation is the wrong answer. Corporations pay taxes in exchange for services the state provides them, not for capital injections that must yield dividends. There is thus a strong case that the commons have a right to a share of the capital stock, and associated dividends, reflecting society’s investment in corporations’ capital. And, because it is impossible to calculate the size of state and social capital crystalized in any firm, we can decide how much of its capital stock the public should own only by means of a political mechanism. A simple policy would be to enact legislation requiring that a percentage of capital stock (shares) from every initial public offering (IPO) be channeled into a Commons Capital Depository, with the associated dividends funding a universal basic dividend (UBD). This UBD should, and can be, entirely independent of welfare payments, unemployment insurance, and so forth, thus ameliorating the concern that it would replace the welfare state, which embodies the concept of reciprocity between waged workers and the unemployed. Fear of machines that can liberate us from drudgery is a symptom of a timid and divided society. The Luddites are among the most misunderstood historical actors. Their vandalism of machinery was a protest not against automation, but against social arrangements that deprived them of life prospects in the face of technological innovation. Our societies must embrace the rise of the machines, but ensure that they contribute to shared prosperity by granting every citizen property rights over them, yielding a UBD.
In a painstaking analysis, Gada drills down on the insight that economists have entirely missed a crucial feature of the modern world called “technological deflation”. While the concept is nuanced, the basic point of technological deflation is that technological things (like, say, iPhones) have the funny habit of becoming “almost free” very quickly. Remember that fancy new iPhone 6 you bought for $600 back in 2013? How much is it worth now? Well, today if you are so inclined, you can get a brand-new one for $150. One fourth the cost in three short years. Remember, we aren’t talking about buying a used iPhone 6, these are brand new. In another two years, you’d be hard pressed to give one of these away.You don’t see this kind of price deflation everywhere. In fact, in our modern society, we tend to expect to see prices rise over time. Oranges, for example, cost more today than they cost in 2012. Same with milk. A new Eames Chair from Knoll costs a solid $5,000. The same chair brand new cost a mere $310 in 1956. And if you want to ask “how much is that in today’s dollars” you are hitting the point: we are so very used to inflation that we intuitively think of the money itself as different. And yet, a brand new iPhone 6 today costs only one fourth as much as the same phone three years ago. Technological things are, quite vigorously, swimming against the inflationary current.
I’ve written and given a lot of talks on how building a sustainably prosperous global economy is an opportunity — a set of investments that will leave us better off, even while we avoid the worst of the planetary crisis we face. It’s only now becoming clear what the scale of that opportunity is. It is only now easy to see that a giant building boom is what successful climate action looks like. The Guardian reported last week on a new study saying that over the next 15 years, to meet our climate goals, we’ll need to shift $90 trillion worth of new infrastructure spending to low- or zero-carbon models
While degrowth does not have a succinct analysis of how to respond to today’s shifting socio-technical regimes—accelerationism’s strong point – at the same time accelerationism under-theorizes the increased material and energetic flows resulting from this shifting of gears. Put another way, efficiency alone can limit its disastrous effects. As degrowth theorists have underlined, environmental limits must be politicized; control over technology must therefore be democratized; metabolic rates must be decelerated if Earth is to remain livable. To conclude, accelerationism comes across as a metaphor stretched far too thin. A napkin sketch after an exciting dinner-party, the finer details colored in years afterwards—but the napkin feels a bit worn out. Big questions need to be asked, questions unanswered by the simplistic exhortation to “shift the gears of capitalism.” When the gears are shifted, the problem of metabolic limits won’t be solved simply through “efficiency”—it must acknowledge that increased efficiency and automation has, and likely would still, lead to increased extractivism and the ramping up of environmental injustices globally. Or another: what does accelerationism mean in the context of a war machine that has historically thrived on speed, logistics, and the conquest of distance? Is non-violent acceleration possible, and what would class struggle look like in that scenario? To be fair, the word “degrowth” also fails to answer many big questions. There has been little discussion on whether mass deceleration is possible when, as Virilio shows, all mass changes in social relations have historically occurred through acceleration. Can hegemony decelerate? If degrowth lacks a robust theory of how to bring about regime shift, then Williams and Snricek’s brand of accelerationism doesn’t allow for a pluralist vocabulary that looks beyond its narrow idea of what constitutes system change. And yet, the proponents of each ideology will likely be found in the same room in the decades to come. Despite their opposite ‘branding’, they should probably talk. They have a lot to learn from each other.
The shadow economy is not just ‘poor’ people. It’s potentially anybody who hasn’t internalised the correct state-corporate narrative of normality, and anyone seeking a lifestyle outside of the mainstream. The future presented by self-styled innovation gurus has no scope for flexible, unpredictable or invisible people. They represent analogue backwardness. The future is a world of endless consumer choice built upon an inescapable digital uniformity of automated rules, a matrix outside which you can neither exist nor think. Back in Amsterdam I hang out with Ancilla van de Leest of the Netherlands Pirate Party. She only visits establishments that accept cash, true to her political belief in individual privacy from prying eyes. It would be wrong to assume, however, that Ancilla’s primary concern involves surveillance by a Big Brother-style bogeyman. It’s true that your spending patterns reveal much about how you actually live, and the privacy implications of having these recorded in searchable database format are only starting to be uncovered. We know that targeted individual surveillance of payments occurs by the likes of the FBI and NSA, but routinised mass surveillance could become a norm. Imagine automatic flagging systems triggered by anyone engaging in a combination of transactions deemed subversive. Tax authorities are bound to be building systems to flag discrepancies between your spending patterns and your declared profits. It’s also true that at London fintech gatherings the excited visions of cashless society now occasionally come with a disclaimer that we should think about the power granted to those who control the system. Not only can payments intermediaries see every time you buy access to a porn site, but they have the ability to censor your transactions, like Visa, PayPal and MasterCard attempting to choke WikiLeaks by refusing to process people’s donations. We could imagine some harsh sci-fi scenario in which a theocratic regime issues decrees to payments processors to block anyone buying books deemed sexually deviant. Such decrees could be automatically enforced via code, with subroutines remotely triggering smart locks to place the offending miscreant under house arrest while automatically deducting a fine from their account.
When we started to think of a possible topic for this year’s Information Design course at IUAV, Venice (after exploring the world’s technology and networks in two consecutive editions of an illustrated Atlas of the Contemporary) we realised that in trying to understand how — and if — this crisis would have unfolded, there was a great potential for design to help illuminate this conjuncture. Given the increasing importance of economical data and the financial landscape over our lives, the lab was then established as an ongoing, real-time workshop in data-visualisation, which would track and explain the crisis that the analysts predicted for 2016. Its purpose was to better understand the broader network of causes and implications which every financial turmoil exists within, providing context to economic reports, and looking at the socio-political framework of news stories. From a design perspective, the intention was to develop new ways for visualizing financial news, in order to move from the rather bi-dimensional and dispassionate language of bar and pie charts, into a richer territory made up of maps, cartograms, illustrations and diagrams.
Since Germany is one of the most successful economies in the world and Bavaria is one of the most successful economies in Germany, the thought did cross my mind that trust might be one of the secrets of economic success. Steve Knack, an economist at the World Bank with a long-standing interest in trust, once told me that if one takes a broad enough view of trust, “it would explain basically all the difference between the per capita income of the United States and Somalia”. In other words, without trust — and its vital complement, trustworthiness — there is no prospect of economic development. Simple activities become arduous in a low-trust society. How can you be sure you won’t be robbed on the way to the corner store? Hire a bodyguard? (Can you trust him?) The watered-down milk is in a locked fridge. As for something more complex like arranging a mortgage, forget about it. Prosperity not only requires trust, it also encourages it. Why bother to steal when you are already comfortable?
Recently, I’ve been thinking of ways to collect some different form of value, besides money or just another token. One of the more interesting ideas is that in age of abundance, our time and thus attention is the most valuable asset. Maciej Olpinksi has written about the attention economy in relation to blockchain tech and similarly inspired me to think about ways to monetize that.
The term ‘heterodox economics’ is a difficult one. I dislike it and resisted adopting it for some time: I would much rather be ‘an economist’ than ‘a heterodox economist’. But it is clear that unless you accept — pretty much without criticism — the assumptions and methodology of the mainstream, you will not be accepted as ‘an economist’. This was not the case when Joan Robinson debated with Solow and Samuelson, or Kaldor debated with Hayek. But it is the case today.
Talking about “peak oil” can feel very last decade. In fact, the question is still current. Petroleum markets are so glutted and prices are so low that most industry commenters think any worry about future oil supplies is pointless. The glut and price dip, however, are hardly indications of a healthy industry; instead, they are symptoms of an increasing inability to match production cost, supply, and demand in a way that’s profitable for producers but affordable for society. Is this what peak oil looks like?
A slump in oil, gas and other commodity prices over the past two years has left lower helicopter prices in its wake. In economies like Brazil’s, which are heavily reliant on volatile commodities prices, demand for corporate use copters has grown soft. And while companies that extract natural resources often rely on choppers to survey prospective mines and oilfields, they’ve recently been warming to drones, which can be less expensive. “The civil and parapublic [helicopter] market still looks pretty awful,” Thomas Enders, chief executive of Airbus Group, said during an earnings call last month. Airbus produces about a quarter of the world’s rotorcrafts, according to Forecast International, an aerospace-market research firm. Helicopters generally hold their value much better than cars. The latest downturn is notable because rotorcraft production has declined—an important gauge of demand, since producers often have buyers lined up when the parts come together on the factory floor. Global rotorcraft production will likely total just 1,050 in 2016, which would be the fewest in at least a decade, according to Forecast International.
Politically the fantastic would give voice to the oppressed, the excluded, the marginal – to all those who were deemed outside the sublime world of economic security, the illusory world of the powerful, the rich, the visible. The poor and outcast of society had become invisible and it was the power of the fantasist to make visible what was now invisible in the social body, what had been rejected and left to fend for itself in the darkness of societies morbid, and obscene slums and decaying systems of crime and punishment. One can see this in many of the stories of Dostoevsky, Gogol, Kafka, Lovecraft, Machen, and on through those such as Borges, Bioyes, and later authors too numerous to name here. Against the realism of society one will discover in the fantastic terms such as the impossible, the unreal, the nameless, formless, shapeless, unknown, invisible. As H.P. Lovecraft famously noted, “the oldest and strongest emotion of mankind is fear, and the oldest and strongest kind of fear is the fear of the unknown.”
According to Keynes, the nineteenth century had unleashed such a torrent of technological innovation—“electricity, petrol, steel, rubber, cotton, the chemical industries, automatic machinery and the methods of mass production”—that further growth was inevitable. The size of the global economy, he forecast, would increase sevenfold in the following century, and this, in concert with ever greater “technical improvements,” would usher in the fifteen-hour week. To Keynes, the coming age of abundance, while welcome, would pose a new and in some ways even bigger challenge. With so little need for labor, people would have to figure out what to do with themselves: “For the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won.” The example offered by the idle rich was, he observed, “very depressing”; most of them had “failed disastrously” to find satisfying pastimes.
A report by the Australia Institute to be released today titled “Jobs and Growth … And a Few Hard Numbers” shows that there is little correlation between economic performance and either political party. The report, which examines the economic performance of Australia under every prime minister since Menzies, also found that the “business friendliness” of a government does not appear to have much impact either.
“The whole problem that an economic system has to solve is how to achieve some approximation of the general good within the severe constraints imposed by human nature. If you can redefine human nature however you want, then you trivialize the problem.”
Austerity policies not only generate substantial welfare costs due to supply-side channels, they also hurt demand—and thus worsen employment and unemployment. The notion that fiscal consolidations can be expansionary (that is, raise output and employment), in part by raising private sector confidence and investment, has been championed by, among others, Harvard economist Alberto Alesina in the academic world and by former European Central Bank President Jean-Claude Trichet in the policy arena. However, in practice, episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output. On average, a consolidation of 1 percent of GDP increases the long-term unemployment rate by 0.6 percentage point and raises by 1.5 percent within five years the Gini measure of income inequality
Over a year ago, an anonymous source contacted the Süddeutsche Zeitung (SZ) and submitted encrypted internal documents from Mossack Fonseca, a Panamanian law firm that sells anonymous offshore companies around the world.
The only reason that anyone could be induced to take part in such a dangerous business was the fabulous profit that could be made. Gideon Allen & Sons, a whaling syndicate based in New Bedford, Massachusetts, made returns of 60% a year during much of the 19th century by financing whaling voyages—perhaps the best performance of any firm in American history. It was the most successful of a very successful bunch. Overall returns in the whaling business in New Bedford between 1817 and 1892 averaged 14% a year—an impressive record by any standard. New Bedford was not the only whaling port in America; nor was America the only whaling nation. Yet according to a study published in 1859, of the 900-odd active whaling ships around the world in 1850, 700 were American, and 70% of those came from New Bedford.
Local businesses in Crickhowell are turning the tables on the likes of Google and Starbucks by employing the same accountancy practices used by the world’s biggest companies, to move their entire town “offshore”. Advised by experts and followed by a BBC crew, family-run shops in the Brecon Beacons town have submitted their own DIY tax plan to HMRC, copying the offshore arrangements used by global brands which pay little or no corporation tax.
Subsidies for fossil fuels amount to $1,000 (£640) a year for every citizen living in the G20 group of the world’s leading economies, despite the group’s pledge in 2009 to phase out support for coal, oil and gas. New figures from the International Monetary Fund (IMF) show that the US, which hosted the G20 summit in 2009, gives $700bn a year in fossil fuel subsidies, equivalent to $2,180 for every American. President Barack Obama backed the phase out but has since overseen a steep rise in federal fossil fuel subsidies.
The gamification of social conformity, overseen by an authoritarian government and mediated by nudge theory, is a thing of beauty and horror; who needs cops with nightsticks to beat up dissidents when their friends and family will give them a tongue-lashing on behalf of the government for the price of a discount off a new fridge? But don’t worry, I could make it a whole lot worse. The first notable point about this system is that it’s an oppressive system that runs at a profit. Consider the instant no-colateral loans for online shopping: the Chinese system only grants these to folks who are a good credit bet. The debt will be repayed. Meanwhile it goes into providing a Keynsian stimulus for the productive side of the economy. And it rewards people for political right-thinking. What’s not to like?
Fossil fuel companies are benefitting from global subsidies of $5.3tn (£3.4tn) a year, equivalent to $10m a minute every day, according to a startling new estimate by the International Monetary Fund. The IMF calls the revelation “shocking” and says the figure is an “extremely robust” estimate of the true cost of fossil fuels. The $5.3tn subsidy estimated for 2015 is greater than the total health spending of all the world’s governments.
Every economy has to answer two questions: how much to produce and how to distribute that production. Technological advances ensure that each year we can make more stuff with less labor and capital than the year before. This has not changed. What has changed is how we allocate the benefits of progress. Back in the day, workers got the money; today, owners of assets do. Stagnant wages and higher stock prices are two sides of the same coin.
In a society organized around the logic of capital, human activities tend to be directed toward the production of commodities. That is, capitalism can be understood in a broad sense as a system of generalized commodity production. The institutional arrangements result in particular social arrangements and generate distinct types of human social action. The commodity serves as a basic unit to understand the larger culture-nature relations and capitalism itself. It is a base element of capitalist market processes. […] This fundamental tension between the necessity of quantitative expansion to sustain the economic relations and the qualitatively unsustainable ecological consequences marks the defining characteristic of the modern ecological crisis and the tragedy of the commodity.
Since libertarian ideology is often at odds with social solutions, holding private enterprise as an ideal and viewing private provisioning as best, the solutions presented are often pushing more entrepreneurship and voluntarism and ever more responsibilization. We just need a new start-up, or some new code, or some magical new business model! This is what Evgeny Morozov calls Solutionism, the belief that all difficulties have benign solutions, often of a technocratic nature. Morozov provides an example “when a Silicon Valley company tries to solve the problem of obesity by building a smart fork that will tell you that you’re eating too quickly, this […] puts the onus for reform on the individual.”
The Random Darknet Shopper is an automated online shopping bot which we provide with a budget of $100 in Bitcoins per week. Once a week the bot goes on shopping spree in the deep web where it randomly choses and purchases one item and has it mailed to us. The items are shown in the exhibition «The Darknet. From Memes to Onionland» at Kunst Halle St. Gallen. Each new object ads to a landscape of traded goods from the Darknet.
“President Xi Jinping and the Chinese government have committed over $16 billion towards building the required infrastructure to recreate the centuries-old trade route stretching from China to the Mediterranean. The new ‘Silk Road Economic Belt’, a high-speed train line running through Eurasia, Iran and Turkey before finishing in Western Europe, is one of two large-scale, global trading projects China is aiming to create, as well as the ‘Maritime Silk Road’, which will run via Southeast Asia, India, and Kenya, before finishing in the Mediterranean.”
The Governance of Common Pool Resources. Ostrom begins by noting the problem of natural resource depletion—what she calls “common pool resources”—and then goes on to survey three largely complementary (“closely related concepts”) major theories that attempt to explain “the many problems that individuals face when attempting to achieve collective benefits”: Hardin’s “tragedy of the commons,” the prisoner’s dilemma, and Olson’s “logic of collective action.”
The notion that sharing would do away with the need for owning has been one of the mantras of sharing economy promoters. We could share cars, houses, and labor, trusting in the platforms to provide. But it’s becoming clear that ownership matters as much as ever. Whoever owns the platforms that help us share decides who accumulates wealth from them, and how. Rather than giving up on ownership, people are looking for a different way of practicing it.
This digital alternative to street-based drug retailing rewards dealers for using innovative and non-violent methods of competition, and for providing quality goods and services. Drug consumers, meanwhile, are offered an unprecedented range of choice and information about products available. They are also treated with a civility that reflects their purchasing power.
Much has been said about the difference between money and wealth and how we, as individuals, can make more of the latter, but the divergence between the two is arguably even more important the larger scale of nations and the global economy. What does it really mean to create wealth for people — for humanity — as opposed to money for governments and corporations?
Well, we can talk about the decline of the union movement, but it runs deeper. In the late 19th and early 20th centuries, one of the great divisions between anarcho-syndicalist unions, and socialist unions, was that the latter were always asking for higher wages, and the anarchists were asking for less hours. That’s why the anarchists were so entangled in struggles for the eight-hour day. It’s as if the socialists were essentially buying into the notion that work is a virtue, and consumerism is good, but it should all be managed democratically, while the anarchists were saying, no, the whole deal—that we work more and more for more and more stuff—is rotten from the get-go.
According to Keynes, the nineteenth century had unleashed such a torrent of technological innovation—“electricity, petrol, steel, rubber, cotton, the chemical industries, automatic machinery and the methods of mass production”—that further growth was inevitable. The size of the global economy, he forecast, would increase sevenfold in the following century, and this, in concert with ever greater “technical improvements,” would usher in the fifteen-hour week. To Keynes, the coming age of abundance, while welcome, would pose a new and in some ways even bigger challenge. With so little need for labor, people would have to figure out what to do with themselves: “For the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won.” The example offered by the idle rich was, he observed, “very depressing”
The cryptocurrency craze spun into a new realm of ridiculous with Kanyecoin, Dogecoin, Ron Paul Coin and the bounty of other clone-coins that sprung up to ride the Bitcoin wave. But the latest altcoin to enter the market, Auroracoin, wants to take the futurist trend back to its cryptoanarchist roots. The altcoin was designed specifically for Iceland, and the creator plans to give every citizen of the Nordic country a digital handful of Auroracoins to kickstart their use. Auroracoin is the brainchild of cryptocurrency enthusiast Baldur Friggjar Odinsson, and he’ll be the one distributing pre-mined coins to the entire population of Iceland at midnight on March 25 in a countrywide “airdrop.” Each Icelandic citizen—all 330,000 of them—will receive 31.8 AUC through a digital transaction. Citizens all have a national ID number available through a public database, which will be used to verify their identity.
One way to appreciate the virtues of climate models is to compare them with a field where mirages are pretty much the standard product: economics. The computer models that economists operate have to use equations that represent human behaviour, among other things, and by common consent, they do it amazingly badly. Climate modellers, all using the same agreed equations from physics, are reluctant to consider economic models as models at all. Economists, it seems, can just decide to use whatever equations they prefer.
The shift to the distorporation comes at the expense of the “C” corporation, the formal name for the familiar limited-liability joint-stock structure that emerged a century ago (see chart 1). The newer structures still protect investors from liability. But the requirement for partnerships to pass through their money blocks the accumulation of earnings. In C corporations retained earnings can be used to fund investment and growth, assuring persistence. Without them, pass-through businesses have to be far more intertwined with investors. Staying alive means routinely inhaling capital, as well as exhaling.
I admit it: in my last book, The Five Stages of Collapse, I viewed collapse through rose-colored glasses. But I feel that I should be forgiven for this; it is human nature to try to be optimistic no matter what. Also, as an engineer, I am always looking for solutions to problems. And so I almost subconsciously crafted a scenario where industrial civilization fades away quickly enough to save what’s left of the natural realm, allowing some remnant of humanity to make a fresh start.
By contrast I emphasize the role of misconceptions, misinterpretations and a sheer lack of understanding in shaping the course of events. I focus on the process of change rather than on the eventual outcome. The process involves reflexive feedback loops between the objective and subjective aspects of reality. Fallibility insures that the two aspects are never identical. That is where my framework differs from mainstream economics.
The next generations of zone, as they incubated in China’s Special Economic Zones or in Middle Eastern city-states essentially swallowed the whole of the city and rendered urbanism as service industry. China’s experiment with the market was so successful that it has generated its own global urban networks of zone trading centers. For Dubai, reawakened by oil for a new chapter in global trade, the zone is a fresh form of entrepôt not unlike those in ancient episodes. No longer in the shadow of the global city as financial center (New York, London, Tokyo, Sao Paulo) the zone has now quickly overtaken it, offering a wilder more hyperbolic form that mixes off-shore financial districts, logistics parks, manufacturing facilities, educational campuses or technology villages. The zone has become the world city and the glittering mimic of Dubai, Singapore and Hong Kong. Ranging from spaces of a few hectares to conurbations that are hundreds of square kilometers, the scores of zone variants—each a newly minted cocktail of urban aspiration.
I don’t know of a better example of the way the collective imagination of the modern world shifted gears when Sputnik I broke free of the atmosphere and opened the Space Age. Until then, the top of the atmosphere might as well have been a sheet of iron, as the Egyptians thought it was. (Their logic was impeccable: polished iron is blue, and so is the sky; iron is strong and heatproof, and the sky would need to be both to deal in order to support the boat named Millions of Years on which Ra the sun god does his daily commute; besides, the only iron they knew came from meteorites, which they sensibly interpreted as stray chunks of sky that had fallen to earth. Many of our theories about nature will likely seem much less reasonable from the perspective of the far future.)
Institutional economics (old-style à la Commons; neo-institutional à la Douglass North; new institutional à la Williamson). Empirical studies of different sorts of economic institutions. Industrial organization and market structure (institutions beyond the bounds of any one formal organization). Organization theory. Theories of institutional change, formation. Difference between institutions which are products of policy and those which are products of custom. (Intermediate cases abound naturally.) Evolutionary economics. Memes. Institutional design. Centralized vs. decentralized institutions. Corruption. Distribution of power vs. formal organization. History of bureaucracy and other sorts of formal organization. (Did Europeans take civil service exams from China? How did they evolve in China?) Game-theoretic approaches. Simulations. Spontaneous formation of institutions. How, exactly, do “institutions matter” in economic development and growth?
In 2011, cultural industries directly employed 531 000 people, and indirectly generated a further 3.7 million jobs. Copyright industries were worth $93.2 billion to the Australian economy in 2007, with exports worth more than $500 million.2 According to its own figures, the mining industry is worth $121 billion a year to the Australian economy, only around 25 per cent more than the cultural industries. Mining employs significantly fewer people than the cultural sector: 187 400 directly, and a further 599 680 in support industries.3 The industry receives government assistance – to the tune of $700 million in the last financial year.4 In 2011–12, Australian industry as a whole – including agriculture, food manufacturing and service industries – was given an estimated $17.3 billion in combined assistance (a mixture of direct subsidies, tax breaks, tariffs and regulatory assistance).5 This doesn’t count a further $9.4 billion invested in research and development by the Australian government in the same financial year.6 In contrast, it’s probably safe to say that, when discussing arts funding, we’re talking about around $500 million annually, out of a total tax revenue in 2011–12 of $390 billion7 – that is, about 0.1 per cent of total government expenditure. (Assistance to industry, including research and development, is around 7 per cent.) The Australia Council, the major arts funding body, has a budget this year of $220 million.
The digitization of our economy will bring with it a new generation of radical economic ideologies, of which Bitcoin is arguably the first. For those with assets, technological savvy, and a sense of adventure, the state is the enemy and a cryptographic currency is the solution. But for those more focused on the decline of the middle classes, the collapse of the entry-level jobs market, and the rise of free culture, the state is an ally, and the solution might look something like an unconditional basic income. Before I explain why this concept is going to be creeping into the political debate across the developed world, let me spell out how a system like this would look
What is GNH and how does it work? Contrary to Western perceptions, GNH has nothing to do with the feel-good type of happiness. It is grounded in the Buddhist concept of compassion, of enhancing the happiness of all beings. Last week we heard the concept of GNH being used and referred to in at least four different ways
MONEY is perhaps the most basic building-block in economics. It helps states collect taxes to fund public goods. It allows producers to specialise and reap gains from trade. It is clear what it does, but its origins are a mystery. Some argue that money has its roots in the power of the state. Others claim the origin of money is a purely private matter: it would exist even if governments did not. This debate is long-running but it informs some of the most pressing monetary questions of today.
The key idea in Zerocoin is that each coin commits to (read: encrypts) a random serial number. These coins are easy to create – all you need to do is pick the serial number and run a fast commitment algorithm to wrap this up in a coin. The commitment works like encryption, in that the resulting coin completely hides the serial number . At the same time this coin ‘binds’ you to the number you’ve chosen. The serial number is secret, and it stays with you.
What’s really going on is that software-enabled human locust swarms are eating everything they can access. Which generally means small business front-end layers wrapped around larger platforms. The locust swarms cannot actually take on true Big Industry unaided, for the most part. When Big Industry owns its own last mile (think McDonald’s) it is rarely stupid enough to offer up lunch for locusts.
However tawdry their origins, the creation of new media of exchange – coinage appeared almost simultaneously in Greece, India, and China – appears to have had profound intellectual effects. Some have even gone so far as to argue that Greek philosophy was itself made possible by conceptual innovations introduced by coinage. The most remarkable pattern, though, is the emergence, in almost the exact times and places where one also sees the early spread of coinage, of what were to become modern world religions: prophetic Judaism, Christianity, Buddhism, Jainism, Confucianism, Taoism, and eventually, Islam. While the precise links are yet to be fully explored, in certain ways, these religions appear to have arisen in direct reaction to the logic of the market. To put the matter somewhat crudely: if one relegates a certain social space simply to the selfish acquisition of material things, it is almost inevitable that soon someone else will come to set aside another domain in which to preach that, from the perspective of ultimate values, material things are unimportant, and selfishness – or even the self – illusory.
In late 2009, the Ministry organized a 1,000-member strong national gathering - a drill in collaborative “Where do we go from here?” brainstorming involving randomly selected citizens and a few handpicked prominent thinkers (Magnusson and Jónsdóttir were there). Groups of participants bounced ideas off each other, ultimately formulating a list of shared values. The summit organizers, through Magnusson and his tech-nerd compatriots, took those suggestions and came up with an aggregation of cherished mores in short order. Not long after the discussions finished - thanks to social media crowdsourcing - Iceland had a decent estimate of its moral compass.
Degrowth (in French: décroissance, in Spanish: decrecimiento, in Italian: decrescita) is a political, economic, and social movement based on ecological economics, anti-consumerist and anti-capitalist ideas. Degrowth thinkers and activists advocate for the downscaling of production and consumption—the contraction of economies—as overconsumption lies at the root of long term environmental issues and social inequalities. Key to the concept of degrowth is that reducing consumption does not require individual martyring and a decrease in well-being. Rather, ‘degrowthists’ aim to maximize happiness and well-being through non-consumptive means—sharing work, consuming less, while devoting more time to art, music, family, culture and community
OpenOil is an energy consultancy and publishing house based in Berlin. We are a transparency business, seeking market-driven solutions which produce better outcomes from the oil and gas industry for the people of producing nations.
Why did the projected explosion of technological growth everyone was expecting—the moon bases, the robot factories—fail to happen? There are two possibilities. Either our expectations about the pace of technological change were unrealistic (in which case, we need to know why so many intelligent people believed they were not) or our expectations were not unrealistic (in which case, we need to know what happened to derail so many credible ideas and prospects).
Attention conservation notice: Over 7800 words about optimal planning for a socialist economy and its intersection with computational complexity theory. This is about as relevant to the world around us as debating whether a devotee of the Olympian gods should approve of transgenic organisms. (Or: centaurs, yes or no?) Contains mathematical symbols (uglified and rendered slightly inexact by HTML) but no actual math, and uses Red Plenty mostly as a launching point for a tangent.
Imagine a world in which most people worked only 15 hours a week. They would be paid as much as, or even more than, they now are, because the fruits of their labor would be distributed more evenly across society. Leisure would occupy far more of their waking hours than work. It was exactly this prospect that John Maynard Keynes conjured up in a little essay published in 1930 called “Economic Possibilities for Our Grandchildren.” Its thesis was simple. As technological progress made possible an increase in the output of goods per hour worked, people would have to work less and less to satisfy their needs, until in the end they would have to work hardly at all.
David Graeber’s Debt: The First 5000 Years begins with a conversation in a London churchyard about debt and morality and takes us all the way from ancient Sumeria, through Roman slavery, the vast empires of the “Axial age”, medieval monasteries, New World conquest and slavery to the 2008 financial collapse. The breadth of material Graeber covers is extraordinarily impressive and, though anchored in the perspective of social anthropology, he also draws on economics and finance, law, history, classics, sociology and the history of ideas. I’m guessing that most of us can’t keep up and that we lack, to some degree, his erudition and multidisciplinary competence. Anyway, I do. But I hope that a Crooked Timber symposium can draw on experts and scholars from enough of these different disciplines to provide some critical perspective
Then, in the eighteenth century, our earthly happiness became important to us, in high intellectual fashion. By 1776, “life, liberty, and the pursuit of happiness” was an unoriginal formulation of what we all, of course, now admitted that we chiefly wanted. John Locke had taught, in 1677, that “the business of men [is] to be happy in this world by the enjoyment of the things of nature subservient to life, health, ease, and pleasure”—though he added piously, “and by the comfortable [that is, comforting] hopes of another life when this is ended.” By 1738, the Comte de Mirabeau wrote to a friend, recommending simply, “[W]hat should be our only goal: happiness.”