Saturday, 30 June 2012

How would scarce resources be allocated in an RBE?

This is a version of one of the killer questions that is supposed to show the RBE as flawed, but the best is the eneny of the good here.

In the current system if something's abundant it's a problem, because it's hard, if not impossible, to make money out of something that's abundant. This is why food is wasted or stockpiled while people starve to death, and why [alleged] natural cures for illnesses are downplayed, denied, hushed up or exproprited as commercial products. It cannot be any other way with the current system.

An RBE addresses this issue of deliberate scarcity. Yes it is left with actual, irreducible scarcity, but to use that as an argument against it is invalid if it means sticking with the system we've got until we find a flawless replacement.

We don't really know what these irreducible scarcities are, but we certainly know what the avoidable ones are and I say we make a start.

The power principle

A long documentary in 3 parts, each well over an hour long, but worth making the effort. Not very encouraging to think that we're controlled by an elite for their own benefit, especially if we can't do anything about it. Perhaps it's no wonder people just go along with it - but it's tough on the seriously poor and seriously oppressed to have to accept their low station so that social stratification our system requires to continue can be maintained.

Definitely worth watching, but not something to gladn your heart.

Friday, 29 June 2012

Natural Capital

The Now Show on BBC Radio 4 (a comedy show based on current affairs) mocked the UK Governments' attempt to account for the services that the biosphere provides us with in financial terms. I wish they hadn't. We can't continue to liquidate natural capital and call it income, therefore some attempt to cost (say) the pollination service performed by bees, or the various services provided by trees should theoretically go some way to correcting our current system's tendency to ignore 'externalities' and plnder the planet for profit.

The UK's Conservative government (in coalition with Liberal Democrats) could live up to its Conservative name by seeking to find ways to conserve our planet, and focus less on conserving institutions and traditions for their own sake. The need to sustain human life on this planet is very serious. Yes, make humour about it, but be careful not to undermine any effort in that direction.

Monday, 25 June 2012

Money as trust

One of money's main functions day-to-day, for most of us, is about trust. If I give you a (genuine) £10 note, you accept it becuse you trust someone else will accept it on the same basis. It means we don't have to barter, nor have complex contractual aggreements for each transaction.

This trust was (still is, largely) also extended to current accounts at banks, because, for most purposes, the £s in the bank were as good as £s as notes and coins.

This was a pretty good system, because membership of the trust network is phenomenally widespread and pretty much everything could be bought and sold. It also provides a benchmark pricing system. It givesyou and me an idea of how much I should charge you / how much you should pay me to (say) mow your lawn.

But the banks have betrayed this trust by creating money out of thin air. OK, most people have some protection against the results of the banks' gambling losses, but the ever increasing amount of money that exists is far outstripping the increase in the value of goods and services - ie is there is inflation in the long term.

What can we do? For trust to return we need a network of trust, with a currency that is protected from being created out of thin air by members of the trust network for their own gain. Such networks exist, but they are not widespread, possibly because developing trust starts small, perhaps with friends and neighbours. Technology also enables a form of bartering.On line, we can set up a deal where I mow your lawn and you fix my bike. Provided both sides of the bargain are kept within a reasonable time that should work, but it is easy to see how it is not much better than bartering as was hundreds of years ago.

The money created by banks is demoninated in the same units as notes and coins and exchangeable 1:1. Theferore as each unit of bank money devalues, so does the value of notes and coins.

Any new, trustworthy currency might do well to distance itself from existing currencies for fear that the same counterfeiting stunt may be pulled again. Whatever happens, the supply of money should only be increased if the economy needs it, and not so that banks can benefit from it. Bamks should only be alowed to deal in money that exists. They should not be able to create it.

Positive Money says that a commitee independent of Government should decide when to create more £ and how much. Government would decide (have policies) on what money could/should be spent on. This seems a lot better, but I still have concerns that government will find ways of spending to ensure that the party of government will be voted in next time around.

Tuesday, 19 June 2012

Ferguson and Natural Capitalism

Niall Ferguson's first 2012 Reith Lecture (broadcast on Radio 4 this morning, but to be aired again) was primarily about the role of institutions in economic life. He argues that Britain's erstwhile economic success was down to the quality and constitution of our institutions. In the Q&A session after his talk, he admits, though, though not in these words, that capitalism as we have it breaks its own rules as it liquidates [natural] capital and calls it income.

Limits to growth

'Forty years ago, a self-appointed panel of experts called the Club of Rome published a tract entitled the Limits to Growth, a massively influential report that showed how exponential growth in population and resource use, in a world of finite resources, would end very badly.
Bjorn Lomborg, author of the Sceptical Environmentalist, told the Today programme that the 1970s environmentalists were "spectacularly wrong" because they "fundamentally missed innovation".
"Technology can do amazing things," he said. "We have done a lot better than predicted".
"If we're going to tackle future problems such as global warming we need to focus on innovation," he believes.'

As presented here, Bjorn Lomborg's ideas are rather worrying. He is right that (some of) the specific predictions in The limits to growth were wrong and I accept that he is right that the authors underplayed the benefits of technology, but the undisputable  fact is that there ARE limits to growth as resources ARE finite.

At the end of this short interview on BBC Radio 4's Today programme (link above) Lomborg says that the idea of telling people that they have to live with less is a hard sell. This is undoubtedly true, but by playing up the mistakes in specifics, and down the key point about finite resources, he makes it seem as if people shouldn't be told the unpalatable inevitable consequence of finite resources even if it is true.

What is living with less? Superficially it sounds like we're all to tighten our belts and live more frugally. That may be so, but one of the benefits of technology is that it aids the separation of services from goods/products, and enables us to get more service from the same physical resource. This is a key tenet of / the book Natural Capitalism and lists an increasing number of ways of arranging to derive service benefits from physical resources.

We win all round by doing this. The obvious example of  taxis illustrates. The driver wants his/her taxi to be reliable, so it is in the manufacturer's interest to make it so. The taxi driver wants his/her taxi to be in use a high proportion of the time. This makes maximum benefit from the investment in the taxi, and also provides maximum capacity to the taxi network.

(The technology has not yet yielded up a unified booking system for private hire vehicles. In the main, they operate as separate companies. It should be possible to tell a system that I want to go from A to B, arriving/departing at time xx:xx and for the system to dispatch a vehicle appropriately for the job. The systems exist, but they ae not comprehensive and we still have to choose which company to contact.)

Friday, 15 June 2012

A job to die for

I saw a documentary featuring people whose livelihood depended on felling trees in a rain-forest and (I think) on farming the cleared land .

But removing the rain-forest  unsustainability is threatening the very existence of the human race and other species.Thus the job myth sets up competition between the tree fellers/farmers and the rest of the human race.

This is an absolute classic case of liquidating natural capital and calling it income. It would make more sense to pay these people not to destroy the rain-forest, or to ascribe a financial value to the biological service it delivers. But no, we carry on. Profit and competition are our deities and we must sacrifice our planet and our lives to them.

Friday, 8 June 2012

European Resource Efficiency Panel

"The European economy’s growth after the financial crisis will not be based on resource intensive growth but instead on resource efficiency, according to environment commissioner Janez Poto─Źnik."

"We will have to become more resource efficient whether we like it or not" he said.


Thursday, 7 June 2012

Let's be less productive

I like this opinion piece in the New York Times Sunday Review, for most of what it says, but there are still underlying assumptions with which I disagree.

The author (Tim Jackson) uses this definition of productivity: "the amount of output delivered per hour of work in the economy". So productivity = output / time. OK, but what is output, and how do you measure it?

Here's where Jackson goes a bit wonky, in my view:

"there are sectors of the economy where chasing productivity growth doesn’t make sense at all. Certain kinds of tasks rely inherently on the allocation of people’s time and attention. The caring professions are a good example: medicine, social work, education. Expanding our economies in these directions has all sorts of advantages.

In the first place, the time spent by these professions directly improves the quality of our lives. Making them more and more efficient is not, after a certain point, actually desirable."


"the time spent by these professions improves the quality of our lives". No - Jackson has mixed up his quantities. If he had said what I think he means - 'the output of these professions improves the quality of our lives' or even 'the output of these professions is improvement in the quality of our lives' - then I would agree with him. The point is that output that does not improve the quality of our lives should not be seen as positive by society, even if economics does not discriminate this.

Jackson also misses the point about employment, in a related way, by classing all employment as good even if is not beneficial to the quality of our lives. I disagree. Here are quotes from Jackson making the point:

"Ever-increasing productivity means that if our economies don’t continue to expand, we risk putting people out of work. If more is possible each passing year with each working hour, then either output has to increase or else there is less work to go around."

Less work to go around is GOOD. It seems obvious, doesn't it?

"Increasing productivity threatens full employment." Yes it does, but so what? It is right to be more productive in improving the quality of human lives .

"there’s another strategy for keeping people in work when demand stagnates".

There is, but our end (and therefore our strategy) should be improving the quality of llives, not keeping people in work for its own sake.

"By easing up on the gas pedal of efficiency and creating jobs in what are traditionally seen as 'low productivity' sectors, we have within our grasp the means to maintain or increase employment."

 No. We should not be less efficient in improving the quality of people's lives. We should be more efficient. Again it seems obvious. Jackson is limiting his definition of efficiency to cost efficiency.

"At first, this may sound crazy; we’ve become so conditioned by the language of efficiency."

Yes it is crazy  because we have been conditioned by the language of cost efficiency, albeit just called 'efficiency' and not of resource efficiency.

We have to use less non-renewable resources (here I agree with Jackson) and we should aim to increase total life quality (as I believe Jackson agrees). We should pull in the human labour we need to do both these things, not seek to create work for its own sake.

Tuesday, 5 June 2012

Surviving Progress

Please watch this film. It airs in the UK on Fr 8 June at 00:40 (Th 7 June 23:40 UTC) on BBC4 but it's on-line now.

It is lengthened (arguably unnecessarily) by some fancy effects and CGI  (all very impressive and artistic) , but is worth your time. Overall I would say it's pessimistic about the future of humanity but it correctly pinpoints many of the problems we are making for ourselves on the only planet we have.