Four comments “the world” liked… Mar 2011

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  1. The inequality of wealth as a natural process II – Brian Lehrer on WNYC
  2. The inequality of wealth as a natural process I – Brian Lehrer on WNYC
  3. Efforts to “monetize” nature for financial trading – Open Anthropology
  4. How natural systems diverge from models – John Baez’s Azimuth blog


1. The inequality of wealth as a natural process II
Brian Lehrer WNYC

4/1/11 on : American Inequality, Part 2 with Glenn Hubbard, dean of the Columbia Business School, on the question of the growing inequality in wealth on The Brian Lehrer Show, WNYC

You should have taken my call Brian. What happened to cause the extreme split in incomes is that earnings from providing work or services stagnated, beginning in ~1970, and the earnings from using money to make money continued to multiply. So the curves for wages and GDP went different directions exponentially.

Work and services provide earnings by in proportion to the services, and so in constant units. Earnings from money are in percent’s, so they multiply. The one naturally increases linearly and the other exponentially.

So what we’ve seen is wages tending toward being constant and investment income doubling again and again… without finding anything really productive to do. What money has been making is more and more credit, that is not being used in the productive economy.

I have a nice article on how that core dilemma is affecting the global economy, about to be published in New European Economy, called “A decisive moment for Investing in Sustainability”

2. The inequality of wealth as a natural process II
Brian Lehrer WNYC

3/17/11 comment for Bernie Sanders on American Inequality on Brian Lehrer WNYC

The full reason people don’t respond to the increasing inequality in our economy, has to include the non-political reasons too.

Almost no one studies how our economy works by itself as a natural system, and why its behavior differs so much from what people say it’s supposed to do and how it’s supposed to respond. People believe in ideology, any ideology, far more than they believe in checking their theories with observation.

It would affect the politics if we noticed that when the environment is running out of room for our expansion the cost of everything naturally goes up. That natural price escalation means that the earnings from *everything but speculation* goes down as a direct result.

Nature sends signals like that when systems are hitting dead ends, naturally. In this case the transfer of financial capital from the productive economy to the speculators in the investment economy is being used by investors make it an ever greater problem, not to solve it. That’s the path of maximum profit for investors… of course, but they don’t realize it also brings about the collapse of the thing they’re investing in….

The reason investors don’t steer an economy at its limits of growth in a more profitable direction, than driving up the costs by stimulating increasing demand, is that they have not paid attention to how nature works. It’s only the systems in nature that start investing their profits in their environments, as they hit their limits to growth, that survive their initial growth.

3. Efforts to “monetize” nature for financial trading –
Open Anthropology

3/30/11 comment on the discussion of Sian Sullivan’s study of the movement to monetize the value natural resources as the “New Economy” on the “Open Anthropology Cooperative” Phil Henshaw’s contributions.

John,   I am better with the science than the politics perhaps, often finding myself at odds with the politicians who intend to be “on my side”, but fail to because of how easily they are swayed by the mistaken ideas of profiting from an economic culture of endless growth. Though politics seems like the vehicle that moves people, it both dominates the debates and doesn’t lead people in thoughtful directions at present.

So bringing about thoughtful change is still likely to be one person at a time, without a mass movement to point to.

That said, once the seeds of change are planted they can erupt with tremendous power, as seen in the dramatic changes in the Arab world this past couple months, or the collapse of the Soviet Union, or numerous other mysterious cultural phenomena. It seems nearly all of human history was a matter of “unprecedented” emerging events quite “unforeseen” from the viewpoint of the past.

Cultural change is quite eventful. Our relying on mental models built on information from the past, and so “looking ahead in the rear view mirror” as it were, is part of that too.

So, of course studying how past cultures managed to display foresight might be very productive. My own approach verges on picking out the “animal spirits” at work that drive revolutionary change.

One interesting example I found is the apparent role of the explosive emergence of Hip-Hop culture in New York in 1988-90 when studying the dramatic abandonment of New York’s crack cocaine culture, that began in 1990. Both social and technology change seem often to display the power of these “hotbeds of creativity” which emerge from active “hives” of social culture.

So in looking for how cultures of the past appeared to “get lucky” and make very good responses to their challenges, I’d partly look for creative subcultures taking hold to motivate those events.

Sian’s writing helps expose the opposite, the major errors in the current craze for using measures to monetize nature. That gives evidence to how such “hotbeds of creativity” have frequently resulted in the worst kinds of errors in responding to problems as well as insightful solutions.

Reducing nature to information for making financial profit isn’t learning from nature, but continuing to convert nature in our own image. In the end measurements are just a tool, of course, and what you use then for is what matters. Depending on your purpose you could use measures to learn from nature rather than to convert it into a commodity to buy and sell.

Putting a dollar value to the “negative profits” of unforeseen environmental liabilities of past investments could be used to belatedly correct their balance sheets, and their perceived return on investment (ROI). That would be very informative, by showing the cost of not avoiding approaching conflicts.

It’s only common sense that avoiding future conflict is very profitable, and failing to is very costly, and by accounting for it the value of expanding investment would then show it too. The better use of profits is for easing the pressures and repairing the damages, not barreling ahead.

That’s also the idea of sustainability, that being responsive to the environment would allow investments to keep producing good returns, rather than incur ever growing hidden liabilities, pushing net returns below zero. We’re just repeating some old mistakes in getting it to add up.

That’s essentially the principle that Keynes discovered and described as the future of capital, that avoiding conflict is necessary to keep investment returns from going to zero, but it did not get discussed as such.

How our choices about the future are misinformed from using information from the past is exemplified our common misunderstanding of money. People are unaware of the quantity of energy used for delivering what we spend on, because it largely goes unrecorded.

Once you learn how to measure it, spending money really is proportional to energy use. It accumulates as a direct environmental cost for the energy uses “paid for but unrecorded” in the chain of services that are needed to deliver what you buy.

Since nature does not print out receipts for the accumulative charges, people then tend to see them as zero, and the basis of wealth as money itself. The reality is more that money is a share of what the whole economy is organized to do for you with energy.

So how to make that palatable is part of the political question, that I don’t seem so good at. The message money = energy is really NOT what people want to hear, is it?! ;-)

So finding “a positive spin” to put on it, like that having access to energy is more honestly considered as a gift of nature to protect, rather than a right to squander, and might ease what is bound to be a rude awakening, and quite important to find a way to do.

4. How natural systems diverge from models
John Baez’s Azimuth blog

March 20, 2011 Comment on Azimuth, John Baez’s blog, on Energy, the Environment, and What Mathematicians Can Do (Part 2), Quoted below in three parts (omitting replies), responding to a scientist blogging as “Florifulgurator” who commented on the expected discovery of a kind of ’supermath’ saying:

“Moreover I expect deeper philosophical enlightenment: … E.g. to make Lovelock’s Gaia theory rigorous (perhaps deduce it from thermodynamics) would be a great milestone in the history of natural philosophy”

March 20: Flori, Well, that’s assuming that the biosphere is generally like an equation… Net-energy systems might be energetic processes of complex organizational accumulation though, often having parts that are actively learning as they go, rather than equations.

If so, then to find equations to help work with them you’d need to study something *other than* how to think of them as equations… Rosen and others have considered it simply as having two subjects. One is the natural world that behaves by itself that we study. Then the other is the world of our theories we tinker with, looking for what will help us interact with the one.

March 22: Flori, Well, yes that describes a strategy, and could be used with an object language for components like Tim suggests. BUT even if that were feasible and not just poetic, aren’t you still stuck in the same situation of having to learn how to understand complex systems from observing their behavior, and not from having programmed it?

Isn’t that the step everyone seems to be avoiding, learning how to understand complex systems from watching how they work rather than from knowing the rules they follow?

April 2: Flori, Justin & Tim, sorry I didn’t notice your questions for a couple days. I’m not in the least “criticizing” models for being naturally incomplete, but suggesting we use that property to help expose and study the ways nature does more than we can model, studying how nature completes natural system behaviors by comparing model and observed behavior.

I’m suggesting a forensic science approach, comparing standard models we understand well to help reveal coherent behaviors of natural systems that diverge in the model we understand.

No doubt that seems a muddleheaded way to construct a model, as it’s something of the opposite, not how to construct a model but how to deconstruct our observations of nature. Of course, the main “coherent departure” of nature from what we can model is the emergence of new systems.

There might be other clues to use, but my theorem of emergence and continuity proves that to satisfy energy conservation new energy using processes need to exhibit a period of “inflation”. It’s a conclusion that is quite broad, that the big bang’s period of inflation, found necessary to explain the astrophysical data, would be a special case of.

Now do you understand why I’d scan data looking for emerging processes of inflationary development?




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