Category Archives: Mail & Comment

Personal comments and letters that seem to capture an idea well

Real Challenge for CSR Sustainability Reporting

There is a recent discovery of just how much of our real economic impacts are not traceable from the information we can find.   The problem is caused by the nature of self-managing systems, that in working by themselves they also don’t “report” or leave traceable information about how they do it.   It’s recently been shown to cause a major undercount for the energy demand of business products and services, and would seem to apply to all business impact assessment methods.(1)

There’s a very “fat tail” to the distribution of physical impacts of business, usually much larger than what is traceable, and that changes the rules of impact accounting .

Every purchase uses the whole economy

Continue reading Real Challenge for CSR Sustainability Reporting

Ever growing wealth, its sources of fictional value.

The great financial crises of the past have occurred once or twice a lifetime in every banking society throughout history.   Solutions to fix the problems that each crisis of the past exposed have all been like recent ones in one extremely important way.   They’ve always provided temporary fixes that set the stage for still greater financial crises to come.   That’s a sign that people have been asking for the impossible.

It allows the appearance that earnings from finance can keep growing in proportion to past earnings, without any goods and services involved.

A simple but seemingly valid overview is that our ever failing “fixes”, for our ever greater financial panics, all come from not realizing that our information models of finance are not the economy’s source of value.  Models and promises to follow them can indeed extrapolate to infinity.   That is not possible for the physical work of the economy that is the only real source of economic value, that the promises of finance eventually need to rely on.

When the economy grows from physically “small” to “big” relative to its resources or its own technologies or social organization, it becomes a trap for our financial system.  The financial markets are designed to search for any escape from financial constraints. Investing for rapidly growing returns, when delivering goods and services is running into more complications, draws fast money into self-fulfilling speculative manias.  They promise limitless profits, by exploiting gaps between the rules of money and the reality of a changing economy.

Rembrandt's Christ Drives Money-Changers from the Temple, 1626

Money has real value only when it corresponds to credit for deliverable physical goods and services.  The actual physical connection between goods and services and money, and our responsibility for the physical resource uses and impacts caused, are the same.   It’s that our “use” of money constitutes our way of communicating our instructions for delivering physical goods and services from exploiting those resources.

Continue reading Ever growing wealth, its sources of fictional value.

The problem with plentiful solar energy.. or any other

Over the past 50+ years there have been regular announcements of limitless affordable energy soon becoming available, such as Paul Krugman’s recent article “Here comes Solar”, with the consequences of that happening never getting discussed.   The following is as posted to the more cautions Washington Post article yesterday 11/12/11.

One of the most overlooked drawbacks of creating affordable and plentiful solar energy, or ANY other form of energy, is what we’d do with it, the consequences of mankind having access to continually doubling amounts of energy.   What if the improbable “cheap energy” solution were actually discovered?

Would cheap energy eliminate or worsen our other impact problems?

Energy is far from our only constraint on economic growth.   Energy is actually what let us do the destruction of our environment as we have already done, none of which yet result from the CO2 and other GHG’s.    Because we are already at the destructive threshold of many other environmental impact pressures we could expect growing energy use to cause even faster growing impact repercussions than we’ve experienced.   They will not come with a neat technological fixes, either.

The core unrecognized problem is that growth is a construction process.   It’s a mechanism for using the profits of a system to build a bigger and bigger system.   That involves our using our (limited imagination) to take ever expanding control of our environment to do ever more things to our environment. Continue reading The problem with plentiful solar energy.. or any other

the Story of Broke – Part II (the end of broke)

The authors of “The Story of Stuff” published a nice little update called “The Story of Broke”, about the vast sums of money the government spends on subsidizing private business….   This sequel “Part II (the end of broke)” was first posted in a comment, on how the still bigger story of broke, debt piling on top of debt, both was missing from the list of now overwhelming government costs, and has a … very natural end. Government debt provides guaranteed growing returns, whether the economy grows or not. Lenders take government interest payments and add them to what they lend back, multiplying their lending and returns.   It builds up, slowly at first then explosively, as the world’s debt burden

grows on little but the good faith and credit of government guarantees.

You’ve heard of government debt called a “safe haven”. It’s where investors put money to be “safely assured of ever multiplying returns” when they can’t find even better growing returns elsewhere. Where that debt spiral comes from and goes to has been a subject of many have tried to explain.  The view Keynes came to, that I think is the most clear headed of all, outlines the necessities for surviving a debt spiral for a market economy.  Nature would surely not shape her facts of life on earth for our approval, but most people react to the facts of life for surviving debt spirals as if to reject nature’s requirements as “socially unacceptable”, … apparently not seeing Keynes’ elegantly clear logic.   So this is written in the story telling style of Free Range Studio in their Story of Stuff. —

The End of Broke, the True Whole Story of Debt!

The BIGGER “Story of Broke” is one that starts quite small, but is designed to actually keep growing ever bigger.   As it does so it also casts its own vote in the story of business influence in government and demand for subsidies and preferential services, persuading government that’s the way to get money to pay its ever growing debt!   It’s the story of how a small amount of debt naturally grows relentlessly big, with no natural end other than either creditors spending it or both government finance and economic collapse.

the spiral of dreams
Drowning in the spiral of dreams

The whole story of debt is a very very simple little thing.   It’s that some of us earn by $units and others by $%’s… and by providing guaranteed returns to lenders, in an economy you can actually earn by $%’s till the economy collapses.  What seems like a totally innocent “little difference” in measurement, between units and ratios, makes AN INFINITE DIFFERENCE over time in life. Some people have called it “our misunderstanding of the exponential curve”, others simply call it “greed”.   The problem with this kind of greed is how very addictive it is and that it grows explosively, making a “little greed” become SO.. GREEDY, with its promise to multiply the rewards of greed forever. Continue reading the Story of Broke – Part II (the end of broke)

Ethics for Economics in the Anthropocene, life on a world changed by man

(this is a concept for a part of a longer collaborative work)

The human quest for love, improving our lives and finding understanding, pursue human values that are not inherent in nature.  Their pursuit requires reliable knowledge of nature, though, and the kind of values exhibited in her designs of natural systems.    So ethics for using the earth is partly a matter of learning to notice the way nature makes complex relationships that work beautifully.   It’s also a matter of observing how our having changed the earth alters our own ability to live by our own values.

A world of ecologies converted to monocultures

Nature offers myriad examples of how complex communities can live together, demonstrating many kinds of competition, collaboration, conflict and tolerance, etc., that do or don’t work.   They offer something like a set of natural ethical principles for “what works”.   In nature all living systems need to produce a profit of surplus energy, for example. Continue reading Ethics for Economics in the Anthropocene, life on a world changed by man

Sustainability by design

John Ehrenfeld’s nice blog post on the ethics of sustainability, “On the Merits of Fishing“,  prompted this short response.  It leads to a good way to describe economic sustainability by design, as Keynes envisioned:

“this more favorable possibility comes to the rescue”.

It’s curious that the metaphor of growth has yet to be connected with nature’s general process of making things that reliably work by themselves. Her process invariably involves systems become comfortable with themselves at the end of growth, something like the fisherman’s ethic described here. Continue reading Sustainability by design

Disaster Hidden by the Weather, a Larger Toll

Katharine Q. Seelye’s Year Packed With Weather Disasters Has Brought Economic Toll to Match by was in the NY Times yesterday.  This is my letter to her.

———–

I’m an economic systems physicist, and one of my favorite gold mines for hidden information about events is checking out what’s happening behind the news when more than one natural system of change is involved.  How nature’s systems work tends not to be reported, actually hidden from view *within the internal organization of the systems doing the work*, so you need to discover them.

There are two or three different long term trends behind the recent flurry of news about weather related disasters.   There are the long term trends of climate change and development in hazardous places.   There’s also a faster changing trend that began recently, also associated with severe weather in the minds of many people.

Disasters hit like lightning, like our emerging resource disaster too.

Continue reading Disaster Hidden by the Weather, a Larger Toll

The economic “crazies” all around

the alternative journal Yes! published “Building a Resilient Economy“, a fairly well informed discussion of alternative economic approaches… except for being just like “business as usual” in one critical regard.

It's that false promise we love too much

The economic “crazies” all around..    comment by Phil Henshaw Aug 15, 2011

Of course the most glaring group of “economic crazies” are the business as usual crowd, but I’ve also looked equally closely at the alternative economics literature. There’s no question but that the alternative schemes are differently crazy, but just as unworkable in a physical world as BAU.

Continue reading The economic “crazies” all around

Profiting from mayhem, is that what’s next?

Andy Revkin reposted on Dot Earth my comment (below) on Can Jeremy Grantham Profit From Ecological Mayhem? by Carlo Rotella in the NY Times Magazine.   On Dot Earth Andy also inserted other views, posting them together as Linear Resources + Exponential Demand = ?.

The gist is that it does indeed *seem* an economy designed to consume its resources ever faster would end in mayhem.    Except that’s not how nature always does it, making it a choice.   To solve it would change our institutions, but not would be a lot worse.

The mayhem option is there, and as I’ve discussed in an Profiting from Scarcity and Vicious spirals & relief.   From a systems science and sustainable investment view I have an article in the current New European Economy, “A decisive moment for Investing in Sustainability” also with discussed of Jeremy Grantham’s financial world view and research comments and links at big news… from Henshaw, Grantham &… the earth.

Appended are my two responses to the Dot Earth discussion, #12 “science is finding questions for which there are confident answers” and #28 a more modern view of Malthus.

A general map of emergence to decay for natural self-managing systems

 

What most people don’t adequately factor in…,

including Grantham, is how classically similar to a “Malthusian crisis” our collision with the resource limits of the earth is.  Our economy is having to adjust to the earth providing linear rates of supply to satisfy our built-in exponentially growing demand.  What’s hidden from view is that nature has two ways to handle that classic crisis of natural limits. Continue reading Profiting from mayhem, is that what’s next?

Does living in social networks change how we think??

The WNYC radio program On The Media, with Brook Gladstone and Bob Garfield is always insightful, and this week addressed The Personal Impact of the Web, and how the internet is changing human culture & society.   There has been some question whether the dramatic changes in how people think and behave are good or bad, or just “change” that older generations feel left out of…

Of course it’s “all of the above”, and I added the following as a comment regarding how in an information age, social networks naturally tend to create their own realities to live in, with the consequence of becoming detached from the changes in the natural world occurring around them…

_____________

"Cyberboy" learning that nature is now the network?

Bob & Brooke, Your ideas about how the internet is changing us are insightful and entertaining as always, but honestly, you’re missing the physics of it. The “internet generation” somewhat corresponds to the “productivity people”, the driving force of economic activity and growth around the world, and the internet is a major productivity tool, allowing us to control more and more with less and less awareness of it.
Continue reading Does living in social networks change how we think??