Straight Talk

Straight Talk with Paul Kedrosky: Don't Count on Technology To Save Us

Friday, January 21, 2011, 10:38 AM

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Paul Kedrosky. Paul is an investor, writer, entrepreneur and editor of the widely-followed econoblog Infectious Greed. He is a prolific engine of commentary on the economy, the markets, and society - often looking through the lens of how technology serves (and dis-serves) all three. Paul is also a Senior Fellow at the Kaufman Foundation, an advisor to Ten Asset Management, The Berkeley Center for Innovative Financial Technology, and other companies and venture capital firms. He tweets tirelessly via @pkedrosky.


1. You spend your time focusing on the intersection of entrepreneurship, innovation and the future of risk capital. From your vantage point, what are the most important trends you see right now to be driving – or threatening – the advancement of our society?

The list is endless. High on that list, however, is financialization: the absurd, uneconomic and disastrous distortions introduced into the U.S. economy by its overreliance on the financial sector. We are losing many of our best engineers, scientists, and others to the financial sector at precisely the time that we face some of the most difficult problems in history -- precisely the sorts of problems that these people could help us with, were they not too busy creating exotic financial instruments to trade with one another.

2. You have an unusual combination of expertise in both technology and macroeconomics. Are you more optimistic about technology’s promise to offer a brighter future, or pessimistic at the growing risks created by our economic dysfunction? Why?

At root, I am a reluctant pessimist. I want to believe in innovation and its possibilities, but I am more thoroughly convinced of entropy. Most of what of what we do merely creates local upticks in organization in an overall downward sloping curve. In that regard, technology is a bag of tricks that allows us to slow and even reverse the trend; sometimes globally, sometimes only locally, but always only temporarily and at increasing aggregate energy cost.

More than a century ago, we struck a rich vein of cheap energy, one that catalyzed the Industrial Revolution, the rise of the West, and much of what we call" modern society," with its many conveniences. Our current economic dysfunction is mostly a by-product of this brief entropic reversal as it reverses itself again. Having become over-attached to a way of life made possible by cheap energy, we are now economic diabetics whose bodies can no longer properly process sugars. In the absence of a pump, we die.

3. Fostering innovation and risk-taking has been a historic cornerstone of America’s economic success. Other countries now appear to be investing in innovation to a greater scale and degree. What’s your assessment of the state of US competition?

By most defensible measures, U.S. competitiveness has declined in recent years. To some degree this is unsurprising, a function of the rise of the rest of the world as much as of weakening U.S. competitiveness, in any Platonic sense. Having said that, and this isn’t saying much new, the willingness in this country to do the hard work of rebuilding is very low. One measure I point to in that regard is company creation rates in the U.S., with the pace at which new companies are formed here having flatlined for decades, as my colleague Dane Stangler and I have shown in a paper. Despite the huge increase in available risk capital, and despite visible entrepreneurial success among their peers, we are too tied to our debt pump to take action and help ourselves, economically speaking.

4. You spend a lot of time interacting with the investing community. How has the business of investing changed since the ’08 correction? How dramatically have the bailouts, low interest rates, etc., changed the game? Do you see any lessons learned? Are smarter risks being taken?

As the saw goes, in the short run we learn a little, in the medium term we learn a little, and in the long run we learn nothing. The answer to your question depends on the timeframe. We won’t immediately make the mistakes of 2008, but we are increasingly likely to make the mistakes of 1999, and even more likely to make the mistakes of the 1980s. There are pockets of better decisions being made, but financial fees introduce massive distortions, and given how difficult it is to make money investing, and how much more straightforward it is to make money from fees, these agent/principal distortions will always exist. To borrow from War Games, the only way to win is to not play.

5. Where do you think venture capital can best be put to use right now? What industries, if invested in today, offer the brightest promise of future return for both investors and society?

To a first approximation, venture capital only works in information technology. It accounts for the bulk of the capital invested and the bulk of the returns. In the absence of an IT sector for venture, there would not be a venture investing industry. Period. Yes, biotech has episodically generated returns, and clean tech may eventually – and innovations in both areas are hugely societally desirable – but the truth is that neither has the characteristics that make a sector suitable for heavy venture investment.

6. What are your thoughts on Peak Oil? Assuming you agree it’s a real risk, what is your answer to those who dismiss its importance, claiming “technology will save us”?

Peak Oil is a geologic fact. Anyone saying otherwise should be summarily dismissed, treated no differently than how we treat flat earthers or other deniers of reality. Peak Oil proponents fall into all sorts of traps in making the case, but their rhetorical errors are no refutation of the underlying case that fields deplete, flows slow, and newer fields are grotesquely more expensive than Ghawar and its ilk.

The trouble with promoters of technological innovation is that their arguments are seductive, socially desirable, and a kind of special pleading. We want to believe, we need to believe, so we ignore how unusual fossil fuels are, with their unique combination of energy density, portability, and cost. While we can move away from these fuels, it is more a behavioral and lifestyle problem than anything else. We must want to change our behaviors such that small innovations at the margin can help us. Waiting for massive innovations to save us from our energy profligacy is innovation infantilism.

7. What advice do you have to offer the average American (e.g. NOT a deep-pocketed investor) who is concerned about our economic future and wants to preserve wealth and quality of life?

I tell people to take a barbell posture to wealth and financial life. Most of your money should be in useful, uncorrelated assets, such as short- to medium-term government securities, agricultural property, etc. Unlike some, I also believe people need some exposure to equities, if only as partial insurance against inflation. At the other side of the barbell, however, it is important to have a few more speculative investments, ideally in yourself. Find things that have the potential to pay off at integer multiples, and use those at the margin to counterbalance a portfolio that is otherwise focused on security of assets.

Most people do the exact opposite, of course. They own few liquid assets, lots of illiquid assets (mostly in residential real estate), a few random equities, and virtually no investments in themselves. While this generates considerable fee income for Wall Street, its likelihood of meeting the financial objectives of our prototypical average investor is very low indeed.

8. You publish a tremendous number of posts and tweets every day, drawing observations and inspiration from an impressive wide array of sources. What subjects, sources and thinkers are most valuable to you in developing and maintaining your world view?

I try. I am, at core, a Popperian, someone always looking for their views to be falsified. In that spirit, as a disciple of Karl Popper, I am always looking for thoughtful, data-driven perspectives that shape my own, or, better yet, demonstrate that I’m wrong altogether. I treat certainty as a highly fragile thing, desirably so, and much of what I share is better thought of as working notes for others trying to do the same thing. As a result, it is unapologetically eclectic, compulsive, and impulsive. I have no constituency in mind, other than perhaps my own id.

In terms of sources, it is a mad collection of places, from blogs, to custom news feeds, to a plethora of Google alerts, mostly about scholarly publications, to Twitter. Turning to the last first, a tightly-controlled, curated list of people and sources on Twitter can turn an otherwise destructively noisy service into a useful feed from which I can infrequently and productively sample.

9. What question didn’t we ask, but should have? What’s your answer? 

"Why do these things keep happening?" My answer comes from an essay I recently wrote for Edge:

When John Cabot came to the Grand Banks off Newfoundland in 1497 he was astonished at what he saw. Fish, so many fish — fish in numbers he could hardly comprehend. According to Farley Mowat, Cabot wrote that the waters were so "swarming with fish [that they] could be taken not only with a net but in baskets let down and [weighted] with a stone."

The fisheries boomed for five hundred years, but by 1992 it was all over. The Grand Banks cod fishery was destroyed, and the Canadian government was forced to close it entirely, putting 30,000 fishers out of work. It has never recovered.

What went wrong? Many things, from factory fishing to inadequate oversight, but much of it was aided and abetted by treating each step toward disaster as normal. The entire path, from plenitude to collapse, was taken as the status quo, right up until the fishery was essentially wiped out.

In 1995 fisheries scientist Daniel Pauly coined a phrase for this troubling ecological obliviousness — he called it "shifting baseline syndrome." Here is how Pauly first described the syndrome: "Each generation of fisheries scientists accepts as baseline the stock situation that occurred at the beginning of their careers, and uses this to evaluate changes. When the next generation starts its career, the stocks have further declined, but it is the stocks at that time that serve as a new baseline. The result obviously is a gradual shift of the baseline, a gradual accommodation of the creeping disappearance of resource species…"

It is blindness, stupidity, intergeneration data obliviousness. Most scientific disciplines have long timelines of data, but many ecological disciplines don't. We are forced to rely on second-hand and anecdotal information — we don't have enough data to know what is normal, so we convince ourselves that this is normal.

But it often isn't normal. Instead, it is a steadily and insidiously shifting baseline, no different than convincing ourselves that winters have always been this warm, or this snowy. Or convincing ourselves that there have always been this many deer in the forests of eastern North America. Or that current levels of energy consumption per capita in the developed world are normal. All of these are shifting baselines, where our data inadequacy, whether personal or scientific, provides dangerous cover for missing important longer-term changes in the world around us.

When you understand shifting baseline syndrome it forces you to continually ask what is normal. Is this? Was that? And, at least as importantly, it asks how we "know" that it's normal. Because, if it isn't, we need to stop shifting the baselines and do something about it before it's too late. 


If you have not yet seen the other articles in this series, you can find them here:

Readers can submit their preferences for future Straight Talk participants, as well as questions to ask them, via the Straight Talk forum.

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23 Comments

joe jackson's picture
joe jackson
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

Wow!!  I really like the way Paul thinks and articulates.

bbroadhead's picture
bbroadhead
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

Thanks so much.  The shifting baseline syndrome fits so well with Dan Ariely's interview.  As a close follower of the state of fisheries I'm so sad that we keep making the same mistakes over and over and over - cod, salmon, tuna, sharks...

cmartenson's picture
cmartenson
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

This is just a really smart set of responses by Paul Kedrosky, especially his response to #2 where he crisply articulates the concept of entropy as it relates to our current condition.

Bravo.

If there's one concept that needs and deserves a wider appreciation, that's it right there.

But it's hard to pick my favorite response, and I suppose a close second is the shifting baseline concept.  The decline of fisheries are something of a personal matter to me, probably because my grandfather and I used to spend so much quality time dipping our lines into the Atlantic while I was a boy.  In my own lifetime I have seen the baseline all but collapse entirely, from abundance to desperate scarcity in most waters.  It bothers me greatly.

So, very well done all around Paul.  My hat is off.

Thomas's picture
Thomas
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

Exceedingly thoughtful interview.

Robinson's picture
Robinson
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New Generator, can produce enought energy to forget fossiel fuel

New generator based on  nickel hidrogen, that consume miligrams of nickel and no hidrogen can  generate 10.000 watts of calorific output power, the device was tested by professors in a public demostration inside a italian university under inspection of university professors.

http://www.journal-of-nuclear-physics.com/

http://lenr-canr.org/acrobat/RothwellJbrieftechn.pdf

Hey Chris and folks, forget the EEE problem, now is the EE problem, the energy allready have a very good solution, no waste residual elements like nuclear power, no enviromental hazard like petrol, just clean and abundant very low cost energy.

www.blacklightpower.com also have a similar device but is working in a direct electric generation.

vital's picture
vital
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Re: New Generator, can produce enought energy to forget ...

Well Robinson, with this "discovery", I completely agree that we no longer have the EEE problem. Instead we now have a EEEBS problem. BS stands....well... for the usual BS.

Poet's picture
Poet
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Shifting Baselines

That shifting baselines syndrome makes me think of the title of a book: Been Brown so Long, It Looked Like Green to Me. It's a book about the betrayal of environmental issues by Big Green: "in campaign after campaign. St. Clair charts how local activists rise up to challenge corporate assaults on nature only to see the Groundhog Day-like script repeat -- the Big Greens and their foundation masters come in, take credit for the grassroots' hard work, use the issue to raise funds and then cut a Democrat and corporate-friendly 'compromise.'"

Also there's an organization out there raising public awareness of shifting baselines: 

Shifting Baselines Slideshow page (worth watching):
http://www.shiftingbaselines.org/slideshow/pristine_hi.html

More...

Quick Tiny Fish PSA Video on Shifting Baselines

Another Quick Video on Shifting Baselines

Shifting Baselines in Puget Sound

Shifting Baselines in Tijuana

Poet

A. M.'s picture
A. M.
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

Dr. Martenson said:

Quote:
The decline of fisheries are something of a personal matter to me, probably because my grandfather and I used to spend so much quality time dipping our lines into the Atlantic while I was a boy.  In my own lifetime I have seen the baseline all but collapse entirely, from abundance to desperate scarcity in most waters.  It bothers me greatly.

This is something that struck me as well. I grew up fishing the rivers of Western Washington with my grandfather - and we're fortunate enough to still be able and get out on the Columbia from time to time.

I remember as a kid touring a museum in Skamania county which stated that at the turn of the 1900's, there were 14,000,000 Chinook salmon coming up the Columbia - each going to its specific tributary.

Now, it's considered a "good year" when the Bonneville Dam sees a return 600,000.

Poet,

The "shifting Baseline on the Puget Sound" hits close to home. I grew up here, and I can see the difference between the PNW in the 80's and now... it's terribly sad. 

We're dangerously close to pushing nature out of the natural world.
The human saga is neglecting biodiversity for the delusional notion of perpetual growth. 

Aaron

Reuben Bailey's picture
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Re: New Generator, can produce enought energy to forget ...

   Vital: While I understand and share your skepticism, you might want to be careful about dismissing what has been presented out of hand and without any discussion. I do not pretend to know if it is real, but by what I have seen about it, they may be on to something.

   Robinson: If this device proves to be anything close to what is being claimed, we will perhaps have alleviated our energy problems for now, but every solution has it's own problems, including the time/scale/cost factors. Others that come to mind revolve around the production of the feed stocks for the reactor, and the waste heat. In some ways such an energy source would be a blessing, and in others it would only ultimately compound our problems.

All the best,

Reuben

Robinson's picture
Robinson
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Re: New Generator, can produce enought energy to forget ...

Vital.  Is good to be sceptic, but there are proof, yes a black box, but the professor proof that the black box produce a lot of energy.  Why a black box and no disclusure of what is inside?, well i believe that this technology is very simple and easy to duplicate. the first public article was a 40 watt unit was in 1995.  http://babelfish.yahoo.com/translate_url?doit=done&tt=url&intl=1&fr=bf-home&trurl=http://archiviostorico.corriere.it/1995/marzo/30/fusione_fredda_successo_italiano__co_0_95033013842.shtml&lp=it_en&btnTrUrl=Translate

Summary of some of Andrea Rossi's answers: The commercialization timeframe is at most 1 year.  We have contracts in the USA and in Europe. Mass production should escalate in 2-3 years.

Reuben Bailey. Yes i believe that this is not good news to the fiat global economy, and will accelerate the demise of all paper currency and more lost jobs.

This is a news that every body must to follow, the next months will be very exciting.

erich's picture
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

A Brief History of Agricultural Time
Our farming for over 10,000 years has been responsible for 2/3rds of our excess greenhouse gases. This soil carbon, converted to carbon dioxide, Methane & Nitrous oxide began a slow stable warming that now accelerates with burning of fossil fuel. The unintended consequence has been the flowering of our civilization. Our science has now realized the consequences and developed a more encompassing wisdom.

Modern Agriculture has evolved in the ability to remove the limitations to plant growth, from burning forest for ash fertilizers, to bison bones, to Guano islands, then in 1913, to crafty Germans figuring out how to suck nitrogen from the air to now with natural gas derived fertilizers. These chemical fertilizers have over come nutrient limits to growth for 100 years.

NPK and the “Green Revolution” in genetics have brought us to where we are, all made possible by basically mining soil carbon stocks. So we have now hit a carbon limit in two distinct ways. The first is continued loss of soil carbon content, the second is fossil carbon energy cost. The present farming system spends ten cents of fossil energy delivering one cent of food energy.

We can not go back, but we can go forward with our newly acquired wisdom.
Agriculture allowed our cultural accent and Agriculture will now prevent our descent.

Conservation Agricultural…………
“In general, soil carbon sequestration during the first decade of adoption of best conservation agricultural practices is 1.8 tons CO2 per hectare per year. On 5 billion hectares of agricultural land, this could represent one-third of the current annual global emission of CO2 from the burning of fossil fuels (i.e., 27 Pg CO2 per year).”
http://www.fao.org/ag/ca/doc/CA_SSC_Overview.pdf

Add just 1 Ton more of char/Ha (800lb/Ac) and you cover 100% Current Annual Fossil CO2 Emissions.

Recent NATURE STUDY;
Sustainable bio char to mitigate global climate change
http://www.nature.com/ncomms/journal/v1/n5/full/ncomms1053.html

The Soil Carbon Standard committee’s work with USDA, EPA and Congressional Ag committees offers real hope, with expansion to ISO status, the world can all be on the same soil carbon page.

Wise Land management; Organic farming and afforestation can build back our soil carbon,Biochar allows the soil food web to build much more recalcitrant organic carbon, ( living biomass & Glomalins) in addition to the carbon in the biochar.

Every 1 ton of Biomass yields 1/3 ton Charcoal for soil Sequestration (= to 1 Ton CO2e) + Bio-Gas & Bio-oil fuels = to 1MWh exported electricity, so is a totally virtuous, carbon negative energy cycle.

Biochar viewed as soil Infrastructure; The old saw;
“Feed the Soil Not the Plants” becomes;
“Feed, Cloth and House the Soil, utilities included !”.
Free Carbon Condominiums with carboxyl group fats in the pantry and hydroxyl alcohol in the mini bar.
Build it and the Wee-Beasties will come.
Microbes like to sit down when they eat.
By setting this table we expand husbandry to whole new orders & Kingdoms of life.

Given the lack of leadership in pricing carbon, companies are taking charge. Look at last months news on WalMart’s sourcing local produce. Training small farmers etc.

The old story of vendors going to Bentonville and beat with rubber hoses for the lowest price has radically changed. Now the rubber hoses are used in the name of energy efficiency and full cradle to cradle life cycle analysis. Their Sustainability Indexing Program will now take that data to formulate true carbon foot print labeling, empowering consumer’s choice.

My Dad, a cold warrior, Vietnam battalion commander, gave this short answer when asked about Mutually Assured Destruction or MAD defense policy,
” GIVE ME Liberty or GIVE ME Half-Life ”

While I envision an offensive policy of Mutually Assured Sustainability (MAS) in a new “Green Cold War” with China. Based on carbon accountancy, the rules are simple; Who ever moves more Carbon from the air to the Soil wins, but so does second place, as third and so on.

Soil Carbon Dream

I have a dream that one day we live in a nation where progress will not be judged by the production yields of our fields, but by the color of their soils and by the Carbon content of their character.

I have a dream today.

I have a dream that one day, a suite of earth sensing satellites will level the playing field, giving every farmer a full account of carbon he sequesters. That Soil Carbon is given as the final arbiter, the common currency, accountant and Judge of Stewardship on our lands.

I have a dream today.

I have a dream that one day every valley shall be exalted, every hill and mountain shall be made forest, the rough soils will be made fertile, and the crooked Carbon Marketeers will be made straight, and the glory of Soil Sequestration shall be revealed, and all flesh shall see a Mutually assured Sustainability.

This is our hope.

My apologies to Dr. King, but I think he would understand my passion

Please join me in this quest to build a bridge to a Post-Combustion Age.

Since we have filled the air, filling the seas to full, Soil is the Only Beneficial place left.
Carbon to the Soil, the only ubiquitous and economic place to put it.

Thanks for your efforts.
Erich

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John Steinsvold
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

An Alternative to Capitalism (which we need here in the USA)

The following link takes you to an essay titled: "Home of the Brave?" which was published by the

Athenaeum Library of Philosophy:

http://evans-experientialism.freewebspace.com/steinsvold.htm

John Steinsvold

Perhaps in time the so-called dark ages will be thought of as including our own.

--Georg C. Lichtenberg

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A. M.
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

Mr. Steinsvold,

Quote:
Can we learn to distribute our goods and services according to need (on an ongoing basis) rather than by the ability to pay? Why not? Poverty and materialism will be eliminated! Our sense of value will change. Wealth will no longer be a status symbol. A man will be judged by what he is; not by what he has. He will be judged by his achievements, leadership, ideas, artistic endeavours or athletic prowess; not by the size of his wallet.

No, we cannot. 
The reason, there is never absolute equality in allocation, and need is subjective.
Furthermore, arranging services on an ongoing basis according to need is a recipe for disaster for several reasons:
1. Removing the financial incentive for success opens the window for lethargy.
2. Lethargy opens the door to state sponsored incentives.
3. State sponsored incentives create inequality.
4. Inequality pre-empts the centrally planned economy on a philosophical basis
5. This invites dischord amongst people who've been promised equality and empowers populism

This cycle has repeated itself in most of the centrally planned economies ever attempted.
While certain exemptions do exist, the socio-political circumstances and population size significantly affect the level of success.

The idea that "everything can be free according to need" is sadly unrealistic.
If you work in a classroom and I work in a mine, we both "need" soap. But who's to say one person needs soap worse?
Further, what happens if there is a soap shortage?
Who will suffer?
Does this create disparity?

Quote:
The more "expensive" items, such as housing, cars, boats, etc. would be provided for on a priority basis. For example, the homeless would be given housing ahead of those living in crowded quarters. How will this priority be established? Perhaps a local board elected by the people in the neighborhood such as a school board. Or perhaps the school boards could absorb this responsibility in addition to their present duties.

And again - who is the "authority" entrusted with this massive delegatory power? 
What if his cousin needs my grandparents farm worse than I do?
He's never worked on it, never seen it, but certainly "needs" it - how can I challenge his claim?
Further, is there a latent, human predisposition to bias towards ones' kin?
If this is so, can a society ever be collectively unbias in their concept of "equality"?

Quote:
Unfortunately, what immediately jumps into the minds of most people is: "It simply won't work!" The idea of a way of life without money is then dismissed without further thought. After all, what motivation is there for people to work if there is no paycheck? How can we possibly satisfy the labor needs of our nation? The following reasons are offered why people would be completely happy working in a way of life without money: 

Today, only 50% of Americans enjoy their work. That will change. In a way of life without money, we will all be free to do the work we want to do or even love to do without any economic fear. We will be free to pursue our passion or as Joseph Campbell suggests we "follow our bliss".

 

It won't work, but I hope you'll agree that I'm not simply dismissing it without further thought.
There are a significant number of hurdles that you're on the hook to address before you can make any further assertions that this will work for the benefit of society.

In a way of life without money, who is going to elect to clean toilets?
To sort trash?
To feed prisoners?
To delouse cesspools?

No offense, but you're not considering that if Americans didn't get paid for their labor, their satisfaction with their "job" would likely decline dramatically.
If no one elects to plunge toilets for a living, who decides who will do this essential task?
Will this create any sort of backlash? Compromise worker satisfaction?

Quote:
Or the perk could be the latest model boat or sports car which would not be immediately available to the public. Another option is to draft everyone once in their lifetime, to do a half year or so stint at a menial task. Perhaps a humbling experience is in order for all of us. It might serve us well in the area of character building.

 

Who's going to develop the latest model boat or sports car if there are no financial incentives?
More likely than not, there would only be a couple models of car available, as there is no need for a "latest model" in a planned economy where equality is paramount. That would create social disparity. So... if they are made, who will end up with them?
The likely answer is the authority entrusted in distributing them, and his closest friends.

Thanks for your post, and any further consideration you give these issues.

Cheers,

Aaron 

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Bravo, Aaron Moyer!

Aaron Moyer wrote:

The reason, there is never absolute equality in allocation, and need is subjective.

Most excellent rebuttal, Aaron. It's scary to see within what is quoted, the very inequality that the person you quoted wants to do away with. Their circular logic is just scary. And yet hundreds of millions fell sway to such empty promises of "equality" made by unscrupulous leaders who literally led them to their doom for the sake of power.

Poet

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Re: Bravo, Aaron Moyer!

Poet wrote:

Aaron Moyer wrote:

The reason, there is never absolute equality in allocation, and need is subjective.

Most excellent rebuttal, Aaron. It's scary to see within what is quoted, the very inequality that the person you quoted wants to do away with. Their circular logic is just scary. And yet hundreds of millions fell sway to such empty promises of "equality" made by unscrupulous leaders who literally led them to their doom for the sake of power.

Poet

Except that I think if there ever was a soap shortage.....  mines should be shut down!

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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

Utopian plans always fail to consider the seven deadly sins:

  1. Pride
  2. Envy
  3. Gluttony
  4. Lust
  5. Anger
  6. Greed
  7. Sloth

Its people that are the problem. Not the plan.

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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

The shifting baseline concept is just the mechanism by which each generation justifies mining resources. By this, I mean double-digit digging into the capital of fishes, forests, soil, clean water, air, etc.

The bioproductivity of the Earth is 2-3 per cent. This is the true growth possible overall for every life form. We only live because we feed on this 'interest'. When we use technology and oil to take more than 2-3 per cent from various systems, we can beat the system for a while, although the tradeoffs to get, say, 20 per cent return on crops, is paid for by all the other resources lost in the process.

This is called the Laws of Thermodynamics: you can't win; you can't break even; and you can't get out of the game. Life fools the second law, creating a kind of perpetual motion machine by reproducing itself, and we survive and thrive on this seeming anomaly. Overall, however, the three laws hold and business must, if it's to be more than a flash in the geological-time pan, work within its limits.

Turning to green energy and technology to continue to mine life's capital is just as stupid as using non-renewable carbon to do this. Oil, at present, sets the pace, and green 'improvements' are sought to continue it. What folly. Everyone who manages a household knows you don't burn the furniture and walls to stay comfortable; every CEO knows that you don't spend core capital to pay dividends.

We live on Earth's interest. There's no global future for humanity until we understand this and make a concerted effort world-wide to live within Earth's means.

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438miler
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

Great information - why I keep coming back here.

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Tim_P
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

In regards to John Steinsvold's article, has this not been tried before and failed miserably?  Multiple times?  As pointed out by J.O. above, it fails to address human behavior.  The basic human trait of trying to expend the least amount of effort for a given outcome totally kills this idea.  If the grocery stores are filled with anything and everything you need, but don't charge anything for them, why would I go to work today?  Couldn't I just skip the job and look for Leave It To Beaver reruns?  

The article assumes that we all have stuff we love to do and that everything that needs done has someone that will gladly do it for free because of their love of the work.  Aaron points out great examples of problem areas in that idea.  But what about the people that don't want to do anything at all, except hang out with friends and discuss the weather?  Our society is filled with them today already.  The position that making stuff free will somehow turn these people into productive members of society is illogical at best.  They've already shown that they would rather do nothing and do without than do something and earn a better life.  BTW, I'm not talking about folks that want to work but cannot, I'm referring to those that can work but choose not to.

What happens at the free grocery store when the sloth gets in line with the man or woman that works in a foundry all day?  If there is only one gallon of milk left, who gets it?  What about housing?  Who determines how many people to house in a single home?  If more than one family gets put in a house, who gets to choose their new roomy?

This description does not sound like utopia at all, but more like life in the gulags.  The problem is not the existence of money, but the abuse of monetary policy.

Tim

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Farmer Brown
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

Wow!  Thanks for the interview!  I'd never heard of Paul Kedrosky, but am now a new fan.

The whole entropy thing is so well framed.  Life itself is a battle against entropy only made possible by momentarilly burning and consuming energy sources for life's sake, faster than natural entropy would have them done away with anyway.  Depressing, but true.  Thank goodness this all takes billions of years.

Nate's picture
Nate
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

Tim_P,

Spot on.  Communes fail because the few that work get tired of supporting those that don't.  Society isn't different in that regard.  JO gets it - it boils down to human behavior.

Nate

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robie robinson
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Re: Straight Talk with Paul Kedrosky: Don't Count on ...

The first one to get the milk is the one who milks the cow.  robie

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Damnthematrix
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Heinberg’s New Coal Question

http://www.monthlyreview.org/110101wishart.php

Heinberg’s New Coal Question

Ryan Wishart

Richard Heinberg, Blackout: Coal, Climate and the Last Energy Crisis (Gabriola Island, BC: New Society Publishers, 2009), 208 pages, $18.95, paperback.

Coal today lies at the very center of the world predicament over the future of energy and the climate. An indication of this can be found in the November 18, 2010, issue (vol. 468) of the leading scientific journal Nature, which includes an article by Richard Heinberg and David Fridley entitled “The End of Cheap Coal.” The article opens with the startling words: “World energy policy is gripped by a fallacy—the idea that coal is destined to stay cheap for decades to come.” What follows is a short, dramatic discussion of problems (geological, economic, and environmental) constraining future coal production and consumption. Heinberg and Fridley’s argument here has been developed more extensively in Heinberg’s recent book Blackout: Coal, Climate, and the Last Energy Crisis, which provides us with yet another indication of the momentous challenge and burden of our historical time.

Heinberg is best known as a peak oil theorist, but is probably better viewed in his role as a leading Green activist for a post-carbon world. His newest book (following Blackout) is The Post-Carbon Reader: Managing the 21st Century’s Sustainability Crises (co-edited with David Lerch), the contributors to which include such leading environmental thinkers/activists as Bill McKibben, Wes Jackson, Stephanie Mills, David Orr, and William Rees.

The most serious carbon issue today, as scientists like NASA’s James Hansen emphasize, is not oil but coal. To avert a disastrous climate change tipping point, Hansen argues, peak oil must be accompanied by peak coal, and in fact coal-fired plants must be rapidly phased out to protect the earth.1 Yet coal exploitation is commonly presented by the vested interests as a solution to energy scarcity. Indeed, some, such as James Fallows in the latest issue of Atlantic Magazine, even promote the erroneous idea that “clean coal” (an oxymoron) will save the earth from climate change!2

Heinberg wades deeply into these issues in his book, focusing on estimates of coal reserves and of peak coal production. He concludes that there is far less energy to be had from world coal reserves than is typically thought by policy makers. Yet, as Hansen has stressed (and Heinberg acknowledges at one point), the greatest immediate threat from coal is not its scarcity but its consumption, which threatens to push the climate past dangerous tipping points. Though the ecological considerations of coal are, unfortunately, something of a secondary consideration in Heinberg’s book—he is perhaps too directly concerned with the issue of peak coal rather than how this fits into climate change—there is nonetheless much that is important in Blackout, for those who see climate change and ecological crises more generally as our most pressing planetary problems.

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