Monthly Archives: March 2011

re: your thoughts, no collapse innement

Hi, Glenn – Pretty much everything you say seems to me to be common sense.  As the saying goes, the Stone Age didn’t end because they ran out of stones.  People don’t seem to realize that resources are never fixed, because they are a matter of technology.  All the oil in the world didn’t constitute a resource in 1810, because there was not use for it, and it may be equally useless in 2050 for the same reason; or like horses, still with us, but not important to the functioning of contemporary society.  In the present post-industrial information age, the chief natural resource needed is — SAND!  That’s the primary physical resource that all our silicon computer chips, silica-based plastics, etc., are made out of.  Could the day come when Saudi Arabia will be wealthy again because of its sand reserves, which are indeed considerable?

The trick is how long we have to make the adjustments.  The less time, the harsher the process; the more time, the less painful.  In this sense, $5.00 oil would be a good thing, as it would encourage the shift to other kinds of fuel more quickly.  Which is not to say that a sudden spike in oil prices wouldn’t wreak huge havoc on financial markets and national economies; but Armageddon it isn’t. 

One of the marks of a rising civilization is that they always think they are in decline; the corresponding mark of a declining culture is that they are quite complacently sure that everything is hunky-dory, to lapse into technical jargon.  C.f. the old stock market saying that markets rise by climbing walls of worry, and fall through floors of reassurance.

Huge rally planned in Madison tomorrow, and people are pouring into local offices to sign recall petitions for legislators who pushed the governor’s coup through.  Walker is undismayed, sure he did the right thing and will prevail, but I think he is sadly mistaken if he thinks the battle is now over & won, time to move on, etc.  This is just beginning to bite back, both locally and nationally. 

Love, Dad

Your thoughts– impending doom??

Dear Tiger,

I ran across the following ad for a book
Reinventing Collapse: The Soviet Example and American Prospects

Publisher Comments:
“In the waning days of the American empire, we find ourselves mired in political crisis, with our foreign policy coming under sharp criticism and our economy in steep decline. These trends mirror the experience of the Soviet Union in the early 1980s. Reinventing Collapse examines the circumstances of the demise of the Soviet superpower and offers clear insights into how we might prepare for coming events….This challenging yet inspiring work is a must-read for anyone concerned about energy, geopolitics, international relations, and life in a post-Peak Oil world.”

So the author has been writing about the collapse of the US for years without it happening (yes, things are dark now, but really, let’s not get carried away. Things have been much much worse in the past, and back then we didn’t even have ipods), and as for Russia, sh**t-hole that it is, it still chugs along (thugs along?). Not that I have any hope for our Russian Bonds, at least not the old ones…

Back to the book. His thesis is that the US will collapse when we run out of (cheap) oil, since that is what the economy/american dream is built on. No cars means no suburbs, etc.

I think we will transit to electric cars fairly quickly, and expect that we will have to start building nuclear. Its either nuclear or coal, and with the global warming people screaming about CO2, the big N starts to look pretty attractive. Takes a bit longer to build, and we haven’t done it in years, but perhaps the French could give us a new “statue” of liberty, symbolizing their freeing us from the oil sheiks. I think they could get it done in 2-5 years.

Your thoughts?

+glenn

re: hobbes in the morning

Hi, Glenn — Two thoughts that also run in parallel.  One of Hobbe’s main contributions is the insight that power resides in the other person’s head.  That is, if A thinks B has power over him, then B does; and if A does not so think, even if B has a gun pointed at him, then B does not have any power over A (think Christ befor Pilate, “You have no power over me except that given by my Father,” or any Christian martyr).  In other words, power is primarily spiritual, not material.  Which is not to deny that material factors can play an important part, and that superior force(s) can be quite persuasive; but only if it succeeds in persuading.  What is happening in Libya right now is an interesting case in point, though it’s not clear which way things are going to fall out.

And money is much the same.  Money is anything that people will accept as money, and has ranged from playing cards countersigned by the Governor late one Canadian winter when the supply ship with new money to pay the troops had not been able to arrive on time, to the famous big stone disk at the bottom of the lagoon on Yap, which “changed hands” every so often, as everybody in the village knew, even though it stayed put on the sea floor.  Tobacco warehouse receipts were big in 18th century Virginia, and remained quite stable for 50 years or so as the amount of tobacco (= money supply) grew more or less in tandem with the expansion of the economy, so you neither had inflation or deflation. 

It can also work the other way:  I remember as a kid in France when you would often find five or ten franc notes used as memo paper or with the grocery list scribbled on them.  They were worth more or less the paper each was printed on, and a good scrap of paper is worth its weight in — well, eer, paper.  Similarly I think it was Lenin (or mabye Marx?) who argued that gold would be used for plumbing in the public urinals  when the communist utopia arrived (resists corrosion really well). 

Love,  Dad

Hobbes in the morning

Dear Tiger,

Gave Hobbes another listen this morning, “On Religion” –chapter 12 or such of Leviatian. A nice review of ideas which have circulated in my brain for several years or decades. It was pleasant, and I might skip around, do a few more chapters for similar brush-ups. But it won’t take me long to work through the whole book(s). Since his writings have so permeated Western thought, none are new to me, and in the areas I am especially interested in, he is simply out of date.

As I said before, the next target is Das Kapital. The underlying reason is my desire to understand what is going  on in the world, and I hope Marx can provide some insights into the economics. If that doesn’t pan out, I’ll try Nietzche. Don’t think he will help me answer my questions, but he is at least entertaining. I’ve tried reading him before, and was put off, but as a distraction while driving it might work better.

The world, the economy, and my nemesis, the stock market.

My latest understanding of the markets is built on my math/music analogy. That analogy is based on my previous belief that I have musical talent, and on the supposed close relationship between music and math. I have finally come to understand them math and music as analogous to the parallel rails in a railroad track. Close, yes, and quite similar to each other. No surprise that mathematicians throughout history have believed that they understood music or could if they tried. Close, indeed, but in fact quite separate and never touching.

So that is going to be the closing point in my “what is money” lecture, which I hope to deliver in May to thunderous applause and tremendous increase of respect from my colleagues. Money– looks like math, but it’s not.

I should probably turn my back on all of it, and just focus on my job. Virus, I can understand. The math we use to describe them, that I can do.

+glenn

re: ruminations

Hi, Glenn-  Enjoying your several related emails.  Yes, corporations are a big issue, but Teddy Roosevelt showed the way with his trust-busting, esp. when he took on J.P. Morgan as to who was running the country and saw to it that the government prevailed.  There is also something of a movement to strip corporations of their legal personality, which is an interesting approach, though I don’t think it will get very far.   And the bail-outs of a few years back showed that corporations are more reliant  on government than ever to the the savior-of-last-resort. 

Hobbes is great reading, and powerful political theory, but he needs to be read in conjunction with Locke; the two nicely bracket the spectrum, either one alone gets a bit one-sided.  I agree that Marx’s analysis is powerful, but not all-powerful; i.e., it provides one helpful tool among others.  Max Weber nicely balances him out, arguing that social status and status-interest determines as much as class; class being how you get your money, status how you spend it; in other words, sociology vs. economics.  Both are helpful, neither gives the whole picture.  For instance, I have long thought the race question in the US was really one of class, not skin color per se; but in the US we are class-blind (as opposed to the UK, for instance, which is very sensitive to class, but more colorblind, or at least so it would like to think).  Where Marx went wrong was to think that industrial workers would be the revolutionary class.  Mao based his revolution on the peasantry, whom Marx despised and despaired of.  In fact of course it’s the middle class who are generally the bearers of revolution, and not when things are getting worse & worse, but when they are getting better & better and people feel the present regime is what stands in the way of even further improvement.  You did not see a lot of peasants in Liberation Square in Cairo, but you did  see a lot of students and college graduates.  (The worst element. . . )

I have also thought that if I were a Republican I should be very suspicious of privatizing Social Security, for the best of Republican reasons.  If  everyone’s retirement is tied to the market, and the market crashes, as it inevitably must at least once or twice over a thirty year period, everyone would then demand a government bail-out and the government would have to re-take over the system, under emergency conditions & panic, and would do a worse job of it that the present carefully thought-out and from-time-to-time tweaked Social Security system.  In other words, privatization might temporarily reduce the role of government until that point, but would in the long run mean an even worse “government take-over,” if that’s what you dread the most. 

Love, Dad

Ruminations

Dear Tiger,

Oh, the classic mistake, the one I make every day. I have an idea I wish to express (today it was a letter to you), so I sit at my computer with the idea fresh in my mind, and WHAM get hit by a storm of emails. The focus is gone, the emails demand my attention, and by the time they are gone, one wonders where the idea has gone to.

I have thought to turn my letters to you into a blog, starting with this one, and hoping you do not mind.

The main idea was to continue our ruminations on current events, both at home and abroad. I am listening to Hobbes/Leviathan on my commute, and reading a bit of Marx over my lunch breaks. The communists were so wrong (fortunately this is now a dead issue, the terrorists having taken over the role as bogiemen), but Marx, the more I read, seems more and more correct. I wish I still had my Karl Marx T-shirt (it was red, of course); only now I would wear it in understanding, and not in protest against I don’t know what.

But there has been a fundamental change, which he did not seem to anticipate (or perhaps I have not read enough).

In the French revolution, the people were happy to kill the aristocracy because the arisocrats gave the people very little. In the American revolution, the Brittish were extracting too high a price for the protection they provided against foreign invasion– (this threat becoming less credible with every passing year), so again the people had an easy target for the evils of the rulers.

But in the US of today, and this is the fundamental change, the new rulers are the heads of large companies. And these companies are large because they give people what they want (sure, there are other factors, corruption, old-boy networks, etc, but still). So are the people going to use their iphones to organize a revolution against Steve Jobs? Drive their cars to the rally against higher oil prices?

Our policy makers have been trying to prevent revolution by making the populance stake-holders. Put everyone in a house, get everyone to invest in the stock market. I think this ploy will end badly (or rather, is in the process of a nasty end). But despite the current darkness, our love of stuff may prove the salvation of our society.

Today’s favorite triumph-over-tradgedy story is that Miss Colorado was evicted from her house the other week. She was living with her mom, whose insurance company denied her coverage, leading to huge medical bills and eventually loosing their home. Tragic story, but it happened to a celeb, which might get the problem some attention.

Turning to world events. You once told me that when a movement turns to extreme violence, it means it is near its death. You used the Anarchists as an example. It wasn’t them who toppled the Russians, even though they were able to kill the Tsar.

We see this again, as all the talking heads are saying that the people’s revolution in North Africa is bad for islamic fundamentalists. Let’s hope the heads are right.

I look forward to a day when all the people of the (i)Book can live in peace.

Until then, if all that is solid melts into air, well, at least know that the air is fresh and free for all to breath.

re: the fall of Rome

Hi, Glenn-  I think it’s more the rich forget that they are a part of the same body as the poor.  In the knoweldge economy, the rule is that we all prosper together or we all go down the tubes together; one sector prospering at the expense of another doesn’t work long-term.

It comes down to the difference between a material good and a spiritual (i.e., non-material) good. With material goods, the more you share, the less you have; the more you use it up, the less you have. Think coal, or the oil of the Middle East.  With spiritual goods however (knowledge, education, joy, love; think Apple Computers) the reverse rules apply:  the more you share, the More you have; the more you use it, the More you have.  Because we have lived in a material-based economy for so long (slaves, oxen, horses, coal, oil, uranium, whatever) we think the old rules still apply when in most cases they no longer do. 

eg witness these exchanges of emails!

Love, Dad

The fall of Rome

http://motherjones.com/kevin-drum/2010/12/inequality-and-economic-collapses

Dear Tiger,

Interesting hypothesis above. But they didn’t have Rome on their list, which makes their hypothesis doubtful. Can’t seriously talk about the fall of civilization without mentioning Rome

To save you reading the article, they quote a nice econ paper which claims that economic crashes go like this:

The rich take all the money.
They loan it to the poor so the poor can buy things from the rich
    — or at least buy enough food so they don’t have to eat the rich.
The financial sector helps
The whole system becomes overleveraged and crashes

Can you use this as the “red thread” which ties together Greece, Ireland, Tunisia, Egypt, Lybia, and Wisconsin?

Interesting times.

+glenn

re: populist rants

Hi, Glenn –  I think you’re right, on both counts.  Interesting & a good sign that the police in WI have refused to clear the protesters out. It increasingly seems that the gov. is being tagged with the term “overreach” — there are indeed limits.  Were I of that persuasion I would be very chary of anything that would lose me Wisconsin or especially Ohio, which has a potentially similar situation, in 2012.  The Republicans need Wisconsin, and cannot win at all without carrying Ohio in a presidential election.  

Populist rants

Nobody knows, which is precisely why leadership everywhere is addled and uncertain how to respond. What they should most fear, however, is someone who connects together the riots in Greece several years ago, the demonstrations in Iceland, and the events throughout the Middle East, with the protests in Wisconsin, and who then draws a picture which makes sense and which everyone can understand.

http://www.economicpopulist.org/content/libya-kaddafi-and-marketing-dictators

Dear Tiger,

I ran into the above quote. The general theme of the story is very populist, that the problem is that the rich are manipulating the world in order to screw over the poor. (What? again???).

I think people don’t really remember just how desperate the 1930s were. My guess is we area long way from that, at least in the US.

+glenn