Futurismic

Statistician and economist Nassim Nicholas Taleb has written an essay on what he calls the Fourth Quadrant, or the statistical “danger zone”. It’s in depth and I found it technically challenging to understand: but I felt it was well worth it in the end. Seriously, go read it, it makes you feel cleverer. The gist:

Statistics can fool you. In fact it is fooling your government right now. It can even bankrupt the system (let’s face it: use of probabilistic methods for the estimation of risks did just blow up the banking system).

Taleb rails against the misuse of statistical economics that has lead us to our current economics woes. Also check out the various responses to Taleb’s essay by assorted luminaries.

[essay on Edge.org][image from BotheredByBees on flickr]

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A fact of life underused in sf is vehicle insurance. Your characters will thank you if you insure them on a pay-as-you-go basis, which should provide a disincentive to rack up the mileage. Good for the environment, good for safety. (Your characters are rational economic actors, aren’t they?)

["The Future?" by Randy Read; updated to add story tip: Atrios]

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To coincide with the mechanical rumblings of the Bank of England a couple of weeks back, the Guardian published a piece about the Phillips machine - an early hydraulic computer;

A sensation when it was unveiled at the London School of Economics in 1949, the Phillips machine used hydraulics to model the workings of the British economy but now looks, at first glance, like the brainchild of a nutty professor. Where the Bank’s team of in-house economists are equipped with state-of-the-art digital computers, the profession’s first stab at modelling was very much a do-it-yourself affair with a whiff of the Heath Robinson about it.

When combined with a nifty visualization of American consumer spending from the New York Times, the whole idea of data visualization kicked my cranial cogs into action. This interactive graphic provides a visual breakdown of spending, highlighting price changes over the previous 12 months. This enables us to see that eggs are almost 30% more expensive than in March 2007, while the average American spends more on chicken than computers.

While nifty, this visualization could easily be the tip of a great big iceberg of usefulness. If our day-to-day spending was logged and recorded (be it through anal retention or RFID), we’d be able to visualize and interact with our domestic spending through a similar framework as that used by the New York Times. Essentially, we’d be looking at some kind of virtual, personalised Phillips machine.

Want to compare the breakdown of your expenses for February with that of the average urban-dwelling male in the 26-30 age bracket? Want to add a dynamic element, and watch your financial fortunes ebb and flow over the past ten years? Perhaps isolating the precise moment at which things started to go wrong?

The potential utility of this kind of service could be vast, allowing the cash-blind and mathematically challenged to grok the intricacies of home economics.

Something to include in the next office software bundle, perhaps?

[image from the Science Museum]

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Congratulations are in order for Rock Port, Missouri - it just became the first town to have its complete energy supply needs met by wind power. [via Slashdot]

Granted, Missouri is a windy region, and wind power wouldn’t suit every town. Plus Rock Port has a population of just 1,300 … but it’s encouraging to see ordinary people waking up to the economic realities of alternative energy sources. [image by Michael Tyas]

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Desperate times call for desperate measures, and as the economic crunch digs in across the Western world we’ll probably see a rise in habits like urban mining. [image by HeyPaul]

Urban mining is a hip term grafted onto an un-hip task that’s been a major source of employment (and illness) in places like China for quite some time. It hinges on the idea that certain consumer electronic devices that are perceived to have no value as a working item thanks to obsolescence (hello, old cell-phone!) contain residual value in the form of the metals used in their construction. Urban mining is the process of digging the value out of dead technology.

If you’ve read some of my flash fiction pieces you’ll know that this is a subject that fascinates me, and I believe it will become a big component of any future economy, especially in developing nations.

What I find saddest of all is that the fancy “urban mining” moniker is a way of covering up the contempt we feel for a process that we already pay lip-service to - it’s just recycling, after all. The only difference is that the world’s poor can’t afford to not do it. [Via Posthuman Blues - cheers, Mac!]

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Did you enjoy Earth Day?

Well, not everyone did. In fact, people in some equatorial countries are rioting over food shortages - a situation that even the slow-poke UN is worrying about.

One of the causes of spiralling food costs is the corn ethanol boondoggle. While it’s a good thing that we’re turning away from our dependence on oil derivatives, all the ethanol cars in the world will be of little comfort to hungry people … so we should probably be getting right behind the cellulosic ethanol researchers. And while we’re on the subject of cutting down on our oil diet, we could be making plastics from pig piss.

Perhaps you think I’m being a tree-hugger. If so, you’re missing the point. As happens so often, Jamais Cascio sums it up in the intro to an essay you should go and read:

“The grand myth of environmentalism is that it’s all about saving the Earth.

It’s not. The Earth will be just fine. Environmentalism is all about saving ourselves.“

[Supplementary links sourced from MetaFilter, Slashdot, BoingBoing and more; image by Felipe Moreira]

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The headlines about the global economic situation aren’t getting any more cheerful right now, are they? While there are many many contributing factors to a complex economic system, a group of UK researchers have suggested that there is a link between the stability of the stock market and the hormonal levels of stock market traders. [image by Petrick]

“But which is the cause and which is the effect? A further analysis showed that traders who started their days with elevated testosterone made more money than those who didn’t. One trader went on a six-day winning streak, making twice as much money each day as the previous one. Over that period, his testosterone levels rose steadily, some 74 per cent.”

The cause and effect question remains open (and probably always will do), but the article suggests that elevated hormonal levels may be very bad for the traders themselves … and that a stock market with more women trading on it might be more stable.

Amen to that.

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Food prices are at historic highs, thanks to a number of factors including increased biofuel use. Rice prices are causing shortages and inflation problems in India, Bangladesh and the rest of Asia, with prices of many grains double what they were this time last year.

UK Prime Minister Gordon Brown today called for action about the price rises at the next G8 meeting, with the incentives for making biofuel having unforeseen consequences leading to the shortages.

“For the first time in decades, the number of people facing hunger is growing. Food prices have risen sharply leading to food riots in several countries,” Brown wrote.

Meanwhile, in Afghanistan, the Telegraph reports that farmers who had been producing opium for the illicit trade of heroin have begun to switch from the poppy to wheat because the grain fetches higher prices than the drug. Unforeseen consequences, indeed!

[via Russ Winter and Paul Krugman, image of rice at Colaba Market, Mumbai by Dey]

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Slashdot notes a story that quotes a big wheel at Sony as being worried about the potential mainstream appeal of the Asus Eee and its ilk:

“”If (the Eee PC from) Asus starts to do well, we are all in trouble. That’s just a race to the bottom,” said Mike Abary.”

The Slashdot poster observes:

“Presumably by ‘we’ he means all the hardware manufacturers who sell over-priced, full-fat laptops. [...] Looks like what’s bad for Sony may be good for the consumer.”

In the short run, certainly, he may be right - but what about the long game? A drop in hardware prices for us consumers would be nice, sure, but there’s bound to be more consequences than that. [image by Scrambled Egg]

This is an issue that Charles Stross broached late last year (right after purchasing his own Eee, naturally). You should read all of Charlie’s thoughts about the inevitable (and long-overdue) commoditization of computing technology, because they add weight to his final blow:

“… how deep will be the recession that follows once the personal computing industry deflates to its natural value (i.e. peanuts)?”

Ouch.

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Being the sort of well-informed netizens you are, I expect you’re familiar with Malcom Gladwell’s “Tipping Point” hypothesis, widely believed to be the cutting-edge theory for predicting how trends, fads and fashions propagate. [Image from Wikipedia]

According to Gladwell, fashions are started by “Influentials” - highly visible and well-connected individuals who others look to for the next big thing.

According to Duncan Watts, however, the Tipping Point is so much baloney:

“It just doesn’t work,” Watts says [...] “A rare bunch of cool people just don’t have that power. And when you test the way marketers say the world works, it falls apart. There’s no there there.”

And this is not, he argues, mere academic whimsy. He has developed a new technique for propagating ads virally, which can double or even quadruple the reach of an ordinary online campaign by harnessing the pass-around power of everyday people–and ignoring Influentials altogether.

Of course, Watts has his rival theory to promote - he’s not telling us this out of some philanthropic urge. But the point is that the business of marketing is probably where we’ll see the next big breakthroughs in understanding human communication as a system.

How the results will be used remains to be seen, of course. [Via The Daily Swarm]

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The original “Mad Max” was about a post-nuclear war Australia, where the war had been caused by countries vying for dwindling oil supplies. But what if the same could happen, only the precious substance was water? Many people seem to think so, and the number’s growing. The largest-growing area of the US is the Southwest, the area with precisely the least amount of water to go around, though by far not the only region of the country with water problems.

The kicker is that, unlike carbon emissions, if one person conserves x amount of water, and another person on the other side of the world uses a surplus of x amount of water, it doesn’t even out. If I in Japan - a country with a high amount of rainfall - conserve water, it doesn’t do an Australian sheep farmer a lick of good. They say all politics is local, and water usage is the same. It’s up to each local to use its supply wisely. Some people have said that Darfur, if not the Rwandan genocide, was the first of the 21st century water wars. We’ll see if it turns out that way.

(photo via brtsergio)

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Freakonomics has an excellent quorum of space experts and economists talking about a very interesting question - Is Space Exploration Worth The Cost? There are some interesting points made although all of the participants are in the field of space science, so naturally they all agree it’s a good thing! It would have been nice to have a few dissenting views but even so there are some good quotes here.

G. Scott Hubbard: “We explore space and create important new technologies to advance our economy. It is true that, for every dollar we spend on the space program, the U.S. economy receives about $8 of economic benefit. Space exploration can also serve as a stimulus for children to enter the fields of science and engineering.”

Keith Cowing: “Right now, all of America’s human space flight programs cost around $7 billion a year. That’s pennies per person per day. In 2006, according to the USDA, Americans spent more than $154 billion on alcohol. We spend around $10 billion a month in Iraq. And so on. Are these things more important than human spaceflight because we spend more money on them? Is space exploration less important?”

John M. Logsdon: “In the longer run, I believe that human exploration is needed to answer two questions. One is: “Are there activities in other places in the solar system of such economic value that they justify high costs in performing them?” The other is: “Can humans living away from Earth obtain at least a major portion of what they need to survive from local resources?” If the answer to both questions is “yes,” then I believe that eventually some number of people in the future will establish permanent settlements away from Earth.”

Personally I agree with Charles Stross that living away from Earth has so many things to overcome that it’s unlikely without huge discoveries but the value of space exploration in our lifetimes may be in asteroid mining - with many new technologies like solar cells rapidly using up some of Earth’s more scarce elements.

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Well, they are in Second Life, at least; Linden Lab, creators of the anarchic virtual world, have stepped in with a major change to the terms of service that bans individuals and organisations from running finance operations that offer “unsustainable interest”:

“Usually, we don’t step in the middle of Resident-to-Resident conduct – letting Residents decide how to act, live, or play in Second Life.

But these “banks” have brought unique and substantial risks to Second Life, and we feel it’s our duty to step in. Offering unsustainably high interest rates, they are in most cases doomed to collapse – leaving upset “depositors” with nothing to show for their investments. As these activities grow, they become more likely to lead to destabilization of the virtual economy.”

This move is doubtless triggered by the final collapse of SL Ponzi scheme bank Ginko Financial - though the threat of lawsuits from people who lose significant amounts of real-world money probably has a part to play as well.

Economist Robert Bloomfield is a little disappointed, as he saw the SL economy as an experimental control group for learning how real-world markets operate, and he wonders whether some of the stock exchanges will continue to operate - if the Linden Lab rules provide sufficient loopholes for them to do so.

Meanwhile, Ian Betteridge wonders if we’ll see real banks stepping into the breach. [Image by ChikaWatanabe]

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Charlie Stross has been shopping - and he’s pretty impressed with the Asus Eee notebook he bought. Not because it’s particularly powerful (which by current standards it isn’t, really) but because he feels it represents a turning point in the commoditization of computer technology:

“The Eee isn’t an order of magnitude cheaper than a normal laptop but it is close to an order of magnitude cheaper than previous ultra-lightweight subnotebooks. And I think I’m going to use it as a pointer to a future trend in the computer business, at the low end. The Eee is about 8 times as powerful as that 1998 Omnibook, at a quarter the price. That’s an improvement of half an order of magnitude in one direction and close to a full order in the other. And it’s a tipping point, I think, showing that the price points that have defined the goal posts for the personal computer business aren’t set in stone.”

As Stross points out, client-side power is becoming less necessary as well as cheaper - at least outside of boutique markets like the one Apple has staked out for itself. And this is a good thing, surely? Well, it would seem so at first. But with the science fiction writer’s instinctive “what if?” chops, Stross looks beyond the immediate:

“… how deep will be the recession that follows once the personal computing industry deflates to its natural value (i.e. peanuts)?”

Ouch. Double-edged sword. [Image by UnwiredBen]

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Climate scientists released a scary report this week saying that global warming is likely to be both ’stronger than expected and arrive earlier than expected’. Since 2000 large spikes in releases of the gas have seen the amount in the atmosphere grow much faster than expected when the Kyoto treaty was drawn up in 1990. The principle reasons for this increase include the growing economy, China’s increased use of coal and most worryingly, a decrease in the amount of absorption by the world’s natural ’sinks’.

The UK and New Zealand have both had news stories this week with ministers seeking to go back on ‘unrealistic’ Carbon emission cuts. The problem for all these countries is as the world economy is in such a delicate balance right now (and always, you could argue), to be the first one to start making the drastic changes neccessary means a massive hit to your economy and job market. 12 States including California and New York are sueing the US government for failing to do enough about the problem. All across the news, there are gloomy tales of doom if we don’t change but very little positives highlighted of changing to a less energy intensive future.

SF Writers have a huge part to play in all this. I’m not saying we should all run off and become Mundane. However, science fiction has a capacity to inspire unlike any other genre - just look at the Space Race to see the dreams of the genre in action in the real world. At the moment people understand global warming is a problem. They just don’t have an image in their head of what can replace the current state of affairs. Most of the books that deal with climate change are overwhelmingly apocalyptic, offering no respite and little hope. If we as SF writers can paint a picture of a future where we have adapted to the problems globalisation has caused us without the world ending or life becoming depressingly morbid, we can achieve something that few people are able to do. We can stop scaring people into change and start inspiring them.

[story via the new Guardian America site, image by alasam]

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An interesting post over at Colony Worlds suggests that the dwarf planet of Ceres would be a better bet for early human colonisation than Mars - it has supplies of water ice and valuable minerals, but a far shallower gravity well, making it a more viable proposition from logistical and economic perspectives. Personally, I think getting a few working orbital colonies around our home planet would be a sound first move … but after that, why not? [Image from Wikipedia]

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We’ve been hearing a lot about the potential of biofuels, particularly ethanol, as being a great (and green) answer to our global dependence of petrochemicals. Which is true, to a certain extent.

The problem being that corn ethanol, while itself a cleaner fuel, is a horrendously climate-intensive crop, the cultivation of which may cause as many (if not more) problems than it solves … which is why we’d be wise to look at the numerous other sources for the same chemical (like algae, prairie grass and fast-growing trees) which won’t cause an environmental and economic trainwreck further down the line. [Via Worldchanging]

Of course, we’ll need to do something about the enticing boondoggle subsidies that are making corn ethanol such an enticing political playing piece first. [Image by Jpeg Jedi]

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You may or may not have heard about the ‘bank run’ of panicking customers withdrawing their savings from beleaguered UK lending institution Northern Rock over the last few days. While the phenomenon of snowballing panic causing the initial problem to worsen is an old one, it has moved to populate the online world in parallel with the offline - so many customers are trying to access Northern Rock’s website at once that their servers can’t cope and return 404-page-not-found errors, adding to the impression of an institution in trouble. [Image from Getty, copied from BBC article]

As a side note, the Financial Times is predicting that this is the start of a rough period for finance on both sides of the pond - welcome to Crunch Week.

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Paul Saffo, notable futurist and advisor to the World Economic Forum, believes there’s a fifty percent chance that the United States will have ceased to be a single nation within the next half a century - and that this would be a desirable outcome. I’m not an economist (nor do I play one on television), but I think I can see the points he’s making here. The question is - would the end result be something like the ancient Greek city-states, or some bizarre balkanized smorgasbord of corporations and micro-nations, as in Stephenson’s Snow Crash? [BeyondTheBeyond]

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