Tag Archives: growth

Blog

Wicked Problems and ends to limitless [x]

3 Comments

That Steelweaver post on Reality As A Failed State I mentioned a few days back really did the rounds. So I’m going to link to Karl Schroeder at Charlie Stross’s blog once again, and without any sense of shame – he’s been quiet for ages, but he’s spooling out a year’s worth of good shizzle over the space of a few weeks at the moment, and I think he’s a voice worth paying attention to.

Here he is talking about the “metaproblems” that Steelweaver mentioned, which have not only been known and named (as “wicked problems” for some time, but are already a subject of intense study… which is a good thing, too.

It is not the case that wicked problems are simply problems that have been incompletely analyzed; there really is no ‘right’ formulation and no ‘right’ answer. These are problems that cannot be engineered. The anger of many of my acquaintances seems to stem from the erroneous perception that they could be solved this way, if only those damned republicans/democrats/liberals/conservatives/tree-huggers/industrialists/true believers/denialists didn’t keep muddying the waters. Because many people aren’t aware that there are wicked problems, they experience the failure to solve major complex world issues as the failure of some particular group to understand ‘the real situation.’ But they’re not going to do that, and granted that they won’t, the solutions you work on have to incorporate their points-of-view as well as your own, or they’re non-starters. This, of course, is mind-bogglingly difficult.

Our most important problems are wicked problems. Luckily, social scientists have been studying this sort of mess since, well, since 1970. Techniques exist that will allow moderately-sized groups with widely divergent agendas and points of view to work together to solve highly complex problems. (The U.S. Congress apparently doesn’t use them.) Structured Dialogic Design is one such methodology. Scaling SDD sessions to groups larger than 50 to 70 people at a time has proven difficult–but the fact that it and similar methods exist at all should give us hope.

Here are a few wicked problems I think are exemplary. I touched on one of them yesterday, in fact, namely the roboticisation curve in manufacturing; far from liberating the toiling masses in some utopian fusion of Marx and capitalism, it might well increase the polarisation and widen the gap between the poor masses and the super-rich elites, a process that Global Dashboard‘s Alex Evans refers to as “jobless growth”::

In some developed economies (and especially the US), research suggests that job opportunities are increasingly being polarised into high and low skill jobs, while middle class jobs are disappearing due to “automation of routine work and, to a smaller extent, the international integration of labour markets through trade and, more recently, offshoring”. Meanwhile, data also show that while more women are entering the global labour force, the ‘gender gap’ on income and quality of work is widening between women and men. These trends raise a number of critical uncertainties for employment and development to 2020.

If automation of routine work genuinely is a more significant factor in developed economy job polarization than international trade or offshoring, then the implication is that developing economies may increasingly also fall prey to job polarisation as new technologies emerge and become competitive with human labour between now and 2020. Chinese manufacturing and Indian service industry jobs could increasingly be replaced by technology, for example, and find their existing rates of inequality exacerbated still  further.

And here’s a serendipitous look at the economics of a world where replicators and 3d printing become cheap enough to be ubiquitous [via SlashDot]:

Prices for 3D printers are tumbling. Even simple systems often cost tens of thousands of dollars a decade ago. Now, 3D printers for hobbyists can be had for a fraction of that: MakerBot Industries offers a fully assembled Thing-O-Matic printer for just $2,500, and kits for building RepRap printers have sold for $500. The devices could be on track for mass-production as home appliances within just a few years.

So, will we all soon be living like Arabian Nights sultans with a 3D printing genie ready to grant our every wish? Could economies as we know them even survive in such a world, where the theoretically infinite supply of any good should drive its value toward zero?

The precise limitations of replicator technology will determine where scarcity and foundations for value will remain. 3D printers need processed materials as inputs. Those materials and all the labor required to mine, grow, synthesize or process them into existence will still be needed, along with the transportation costs to bring them to the printers. The energy to run a replicator might be another limiting factor, as would be time (would you spend three days replicating a toaster if you could have one delivered to your home in an hour)? Replicators will also need inputs to tell them how to make specific objects, so the programming and design efforts will still have value.

[…]

Perhaps the most important limitation on the replicator economy may competition from good old mass production. Custom-tailored suits may be objectively better than off-the-rack outfits, but people find that the latter are usually the more sensible, affordable purchase. Mass production—especially by factories adopting nimble 3D-printing technologies—can still provide marvelous economies of scale. So even when it is theoretically possible for anyone to fabricate anything, people might still choose to restrict their replicating to certain goods—and to continue making their tea with a store-bought teabag.

The unspoken underpinning of that last paragraph (as hinted by my bolding) is the important bit: the economies of scale of fabbing will see more and more human labour replaced by machines – machines that don’t need holidays, or even sleep; machines that don’t get tired and make a higher percentage of dud iterations as a result; machines that, before too long, will be able to make other machines as required. The attraction of such a system to Big Capital (and small capital, too) is pretty obvious.

And all in the name of chasing perpetual infinite growth, a central assumption of most modern economic thought (or at least the stuff I’ve encountered so far) that relies on a lot of other assumptions… like, say, the assumption that we’ll always be able to either produce more energy, or use the amount we have available more efficiently [via MetaFilter]:

It seems clear that we could, in principle, rely on efficiency alone to allow continued economic growth even given a no-growth raw energy future (as is inevitable). The idea is simple. Each year, efficiency improvements allow us to drive further, light more homes, manufacture more goods than the year before—all on a fixed energy income. Fortunately, market forces favor greater efficiency, so that we have enjoyed the fruits of a constant drum-beat toward higher efficiency over time. To the extent that we could continue this trick forever, we could maintain economic growth indefinitely, and all the institutions that are built around it: investment, loans, banks, etc.

But how many times can we pull a rabbit out of the efficiency hat? Barring perpetual motion machines (fantasy) and heat pumps (real; discussed below), we must always settle for an efficiency less than 100%. This puts a bound on how much gain we might expect to accomplish. For instance, if some device starts out at 50% efficiency, there is no way to squeeze more than a factor of two out of its performance.

[…]

Given that two-thirds of our energy resource is burned in heat engines, and that these cannot improve much more than a factor of two, more significant gains elsewhere are diminished in value. For instance, replacing the 10% of our energy budget spent on direct heat (e.g., in furnaces and hot water heaters) with heat pumps operating at their maximum theoretical efficiency effectively replaces a 10% expenditure with a 1% expenditure. A factor of ten sounds like a fantastic improvement, but the overall efficiency improvement in society is only 9%. Likewise with light bulb replacement: large gains in a small sector. We should still pursue these efficiency improvements with vigor, but we should not expect this gift to provide a form of unlimited growth.

On balance, the most we might expect to achieve is a factor of two net efficiency increase before theoretical limits and engineering realities clamp down. At the present 1% overall rate, this means we might expect to run out of gain this century.  Some might quibble about whether the factor of two is too pessimistic, and might prefer a factor of 3 or even 4 efficiency gain.  Such modifications may change the timescale of saturation, but not the ultimate result.

So it ain’t just Moore’s Law that could be running into a brick wall real soon. A whole lot of caltrops on the highway to the future, then… and we’re still arguing about how to bolt more governers and feedback loops onto fundamentally broken polticoeconomic systems. Wicked problems, indeed. It’s hard not to feel bleak as we look into the eye of this abyss, but Schroeder suggests there’s a way out:

Here’s my take on things: our biggest challenges are no longer technological. They are issues of communication, coordination, and cooperation. These are, for the most part, well-studied problems that are not wicked. The methodologies that solve them need to be scaled up from the small-group settings where they currently work well, and injected into the DNA of our society–or, at least, built into our default modes of using the internet. They then can be used to tackle the wicked problems.

What we need, in other words, is a Facebook for collaborative decision-making: an app built to compensate for the most egregious cognitive biases and behaviours that derail us when we get together to think in groups. Decision-support, stakeholder analysis, bias filtering, collaborative scratch-pads and, most importantly, mechanisms to extract commitments to action from those that use these tools. I have zero interest in yet another open-source copy of a commercial application, and zero interest in yet another Tetris game for Android. But a Wikipedia’s worth of work on this stuff could transform the world.

Digital direct democracy, in other words, with mechanisms built in to ameliorate the broken bits of our psychology. Oh, sure, you can scoff and say it’ll never work, but even a flimsy-looking boat starts looking like it’s worth a shot when the tired old paddle-steamer starts doing its Titanic impersonation in the middle of the swamp. What Schroeder (and many others) are suggesting is eminently possible; all we lack is the political will to build it.

And it’s increasingly plain that we’re not going to find that will in the bickering halls of the incumbent system; it’s only interested in maintaining its own existence for as long as possible, and damn the consequences.

Which is why we need to turn our backs on that system and build its replacement ourselves.

Blog

A Brief History of the Corporation: 1600 to 2100

This is a rather excellent essay, and you should go and read it. With all the normal I-am-not-an-economist caveats, Venkatesh Rao’s reading of post-Enlightenment history in terms of the rise and fall of the concept of the corporation is powerful stuff, and – unlike a lot of economics material I’ve read recently – it actually manages to look beyond tomorrow afternoon, albeit with a certain amount of shrugging (I’d much rather have someone admit they’re not sure how something’s going to pan out than dress up a guess as a given). It clocks in at over 7k words (!) so you’ll wanna set aside some time to read the whole thing; I suspect that even those among you who’ll disagree with some of Rao’s mappings will still find plenty of stuff to think about.

But hey, this is Futurismic, and we’re all about the hand-picked excerpts, so here’s a teaser that makes it clear that not only are today’s rapacious and out of control corporations nothing new, but that they’re also pussycats compared to their historical forebears:

The [East India Company] was the original too-big-to-fail corporation. The EIC was the beneficiary of the original Big Bailout. Before there was TARP, there was the Tea Act of 1773 and the Pitt India Act of 1783. The former was a failed attempt to rein in the EIC, which cost Britain the American Colonies.  The latter created the British Raj as Britain doubled down in the east to recover from its losses in the west. An invisible thread connects the histories of India and America at this point. Lord Cornwallis, the loser at the Siege of Yorktown in 1781 during the revolutionary war, became the second Governor General of India in 1786.

But these events were set in motion over 30 years earlier, in the 1750s. There was no need for backroom subterfuge.  It was all out in the open because the corporation was such a new beast, nobody really understood the dangers it represented. The EIC maintained an army. Its merchant ships often carried vastly more firepower than the naval ships of lesser nations. Its officers were not only not prevented from making money on the side, private trade was actually a perk of employment (it was exactly this perk that allowed William Jardine to start a rival business that took over the China trade in the EIC’s old age).  And finally — the cherry on the sundae — there was nothing preventing its officers like Clive from simultaneously holding political appointments that legitimized conflicts of interest. If you thought it was bad enough that Dick Cheney used to work for Halliburton before he took office, imagine if he’d worked there while in office, with legitimate authority to use his government power to favor his corporate employer and make as much money on the side as he wanted, and call in the Army and Navy to enforce his will. That picture gives you an idea of the position Robert Clive found himself in, in 1757.

He made out like a bandit. A full 150 years before American corporate barons earned the appellation “robber.”

Rao’s thesis here is that the corporation – in terms of its power and influence – is actually entering its twilight years as we hit the limits of certain forms of economic growth; as such, I guess we have to view the recent banking crises as one last desperate – and rather savage – grasp for power and influence over a changing world. I certainly hope he’s right… though his concept of “Coasean growth” probably won’t be as appealing a replacement for the status quo for others as it is for me.

Blog

Peak Travel

1 Comment

Trends suggest that the demand for transit is flattening out in the industrialized West. Ars Technica:

… prior to recent years, two forms of transit have driven most of the growth in miles travelled, and thus energy use: air and car travel. And, although air travel has continued to increase, car travel has started to decline (a trend that predates the oil price shock of recent years). As a result, since 2003, total miles travelled have flattened out and has started to decline in some countries. This flattening out is even more apparent when graphed against per-capita GDP. Here, most countries show a flattening out once they hit a per-capita GDP of $25,000 (in the US, the figure is $35,000, while Sweden shows a continuing rise).

There are lots of individual features hidden within these general trends. For example, the US drop in the energy intensity of car travel stalled once milage standards languished in the 1990s. In contrast, European countries started raising their gasoline taxes around the same time, and experienced the opposite trend. Longer flights are also less energy intensive, which means that domestic air travel is less energy-intensive in nations like the Australia, Canada, and the US simply as a function of geography.

Nevertheless, the authors argue that the GDP-related trends, which are more consistent across countries, suggest that there might be some common factors underlying the decline in travel, such as urbanization, increased taxes, aging populations, a saturation of automobile ownership, and a basic desire not to spend any more time behind the wheel. Carpooling has also seemed to decline to the point where it probably won’t go down much further.

The folk behind the study are wisely reluctant to project into the future, though they suggest that “continued, steady growth in travel demand cannot be relied upon.”

I fully suspect that the next few weeks will see a rash of pundits suggesting that this flattening of trends means we can stop worrying about carbon emissions and climate change, to be met by a rash of counter-claims at the opposite extreme; between all the shouting, nothing of note will be achieved. Both sides can call me back when they start basing their narratives on the evidence, rather than crowbarring the evidence into their narrative. This Red vs Blue bullshit is starting to bore me.

Blog

The global recession that isn’t

4 Comments

You can’t turn a page or click a tab here in the UK without reading about the ongoing woes of the global recession, and I rather suspect the situation is similar for Stateside readers.

Thing is, the global recession isn’t quite so global as it looks from our standpoint in the “developed” West; via Tobias Buckell, here’s a piece at Foreign Policy that paints the nations of Africa as a golden investment opportunity – a far cry from the war-scarred deserts and shanty-towns of popular perception.

Africa, in fact, is now one of the world’s fastest-growing economic regions. Between 2000 and 2008, the continent’s collective GDP grew at 4.9 percent per year — twice as fast as in the preceding two decades. By 2008, that put Africa’s economic output at $1.6 trillion, roughly on par with Russia and Brazil. Africa was one of only two regions — Asia being the other — where GDP rose during 2009’s global recession. And revenues from natural resources, the old foundation of Africa’s economy, directly accounted for just 24 percent of growth during the last decade; the rest came from other booming sectors, such as finance, retail, agriculture, and telecommunications. Not every country in Africa is resource rich, yet GDP growth accelerated almost everywhere.

Toby goes on to do some back-of-the-envelope maths:

The world population is estimated to be 6.7 Billion.

Asia and India, both currently in growth patterns, represent 60% of the world’s population. Africa represents 15%. So 75% of the world is actually right now currently growing.

However most of Western Europe, parts of North America, and parts of South America are not. So it’s a global lack of growth for 25% of the world’s population.

There’s no denying that things are looking pretty grim economically for us Euros and Yanks, and that our problems are having a knock-on effect elsewhere. But rather than a global recession, perhaps what we’re seeing is simply a globe that doesn’t spin around us as the pivot point any more. Cold comfort for the myopic, I suppose, but I’m kind of relieved; we’ve had our time in the sun, but the sun hasn’t stopped shining just yet.