Tuesday, 5 May 2015

Establishing a permanent colony of humans on Mars in not an option. It's a necessity...


With Transfinancial Economics financing space projects would become easier. Blogger Ref http://www.p2pfoundation.net/Transfinancial_Economics






Ref Business Insider/Jessica Orwig/May 2015
At least, that's what some of the most innovative, intelligent minds of our age — Buzz Aldrin, Stephen Hawking, Elon Musk, Bill Nye, and Neil deGrasse Tyson — are saying.
Of course, it's extremely difficult to foresee how manned missions to Mars that would cost hundreds of billions of dollarseach, could benefit mankind. It's easier to imagine how that kind of money could immediately help in the fight against cancer or world hunger. That's because humans tend to be short-sighted. We're focused on what's happening tomorrow instead of 100 years from now.
"If the human race is to continue for another million years, we will have to boldly go where no one has gone before," Hawking said in 2008 at a lecture series for NASA's 50th anniversary.
That brings us to the first reason humans must colonize Mars:




1. Ensuring the survival of our species 
The only home humans have ever known is Earth. But history shows that surviving as a species on this tiny blue dot in the vacuum of space is tough and by no means guaranteed.
The dinosaurs are a classic example: They roamed the planet for 165 million years, but the only trace of them today are their fossilized remains. A colossal asteroid wiped them out.
Putting humans on more than one planet would better ensure our existence thousands if not millions of years from now.
"Humans need to be a multiplanet species," Musk recently told astronomer and Slate science blogger Phil Plait.
Humans need to be a multiplanet species. — Elon Musk
Musk founded the space transport company SpaceX to help make this happen.
Mars is an ideal target because it has a day about the same length as Earth's and water ice on its surface. Moreover, it's the best available option: Venus and Mercury are too hot, and the Moon has no atmosphere to protect residents from destructive meteor impacts



2. Discovering life on Mars


Nye, the CEO of The Planetary Society, said during an episode of StarTalk Radio in March that humanity should focus on sending humans instead of robots to Mars because humans could make discoveries 10,000 times as fast as the best spacecraft explorers we have today. Though he was hesitant to say humans should live on Mars, he agreed there were many more discoveries to be made there.
One monumental discovery scientists could make is determining whether life currently exists on Mars. If we're going to do that, we'll most likely have to dig much deeper than NASA's rovers can. The theory there is that life was spawned not from the swamps on adolescent Earth, but from watery chasms on Mars.
The Mars life theory suggests that rocks rich with microorganisms could have been ejected off the planet's surface from a powerful impact, eventually making their way through space to Earth. It's not a stretch to imagine, because Martian rocks can be found on Earth. None of those, however, have shown signs of life.
"You cannot rule out the fact that a Mars rock with life in it landing on the Earth kicked off terrestrial life, and you can only really test that by finding life on Mars," Christopher Impey, a British astronomer and author of over a dozen books in astronomy and popular science, told Business Insider.


3. Improving the quality of life on Earth
  

"Only by pushing mankind to its limits, to the bottoms of the ocean and into space, will we make discoveries in science and technology that can be adapted to improve life on Earth."
British doctor Alexander Kumar wrote that in a 2012 article for BBC News where he explored the pros and cons of sending humans to Mars.
At the time, Kumar was living in the most Mars-like place on Earth, Antarctica, to test how he adapted to the extreme conditions both physiologically and psychologically. To better understand his poignant remark, let's look at an example:
During its first three years in space, NASA's prized Hubble Space Telescope snapped blurry pictures because of a flaw in its engineering. The problem was fixed in 1993, but to try to make use of the blurry images during those initial years, astronomers developed a computer algorithm to better extract information from the images.
It turns out the algorithm was eventually shared with a medical doctor who applied it to the X-ray images he was taking to detect breast cancer. The algorithm did a better job at detecting early stages of breast cancer than the conventional method, which at the time was the naked eye.
"You can't script that. That happens all the time — this cross pollination of fields, innovation in one, stimulating revolutionary changes in another," Tyson, the StarTalk radio host, explained during an interview with Fareed Zakaria in 2012.
It's impossible to predict how cutting-edge technologies used to develop manned missions to Mars and habitats on Mars will benefit other fields like medicine or agriculture. But we'll figure that out only by "pushing humankind to its limits" and boldy going where we've never been before.




4. Growing as a species
 

Another reason we should go to Mars, according to Tyson, is to inspire the next generation of space explorers. When asked in 2013 whether we should go to Mars, he answered:
"Yes, if it galvanizes an entire generation of students in the educational pipeline to want to become scientists, engineers, technologists, and mathematicians," he said. "The next generation of astronauts to land on Mars are in middle school now."
Humanity's aspirations to explore space are what drive us toward more advanced technological innovations that will undoubtedly benefit mankind in one way or another.
"Space is like a proxy for a lot of what else goes on in society, including your urge to innovate," Tyson said during his interview with Zakaria. He added: "There's nothing that drives ambitions the way NASA does."




5. Demonstrating political and economic leadership
© Provided by Business Insider 

 

At a February 24 hearing, Aldrin told the US Senate's Subcommittee on Space, Science and Competitiveness that getting to Mars was a necessity not only for science, but also for policy.
"In my opinion, there is no more convincing way to demonstrate American leadership for the remainder of this century than to commit to a permanent presence on Mars," he said.
If Americans do not go to Mars, someone else will. And that spells political and economic benefit for whoever succeeds.
"If you lose your space edge," Tyson said during his interview with Zakaria, "my deep concern is that you lose everything else about society that enables you to compete economically."






Business Insider
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Thursday, 30 April 2015

"We have a distorted economy”: Joseph Stiglitz sounds off on inequality, the TPP and 2016

                      

Nobel Prize-winning economist tells Salon why inequality is a choice and offers his take on Obama's big trade deal

   Salon. Blogger Ref http://www.p2pfoundation.net/Transfinancial_Economics
                      
"We have a distorted economy": Joseph Stiglitz sounds off on inequality, the TPP and 2016Joseph Stiglitz (Credit: AP/Richard Drew)
During the long run-up to officially announcing her second presidential bid, former Secretary of State Hillary Clinton quietly — but not too quietly — reached out to a number of leading progressive economists. Along with experts from some of the biggest unions in the country, the list of Clinton conferees included some of the biggest names in the (small) world of left-wing economics: former Clinton-era Secretary of Labor Robert Reich, for example. Yet out of all the so-called boldfaced names intended to draw lefty wonks’ attention, none inspired more cautious optimism than that of Columbia University professor and Nobel Prize-winning economist Joseph Stiglitz.
In part, that’s because Stiglitz, like his contemporary and fellow Nobel-winner Paul Krugman, is a brilliant economist who proves that, contrary to what many conservatives say, a firm grasp of the dismal science does not inexorably lead to libertarianism. More important, though, was his association with the problem of inequality — both on political and economic grounds. His 2011 piece on inequality for Vanity Fair made a splash (among the types of people who read Vanity Fair); and his 2012 book “The Price of Inequality: How Today’s Divided Society Endangers Our Future” — which is now available in paperback — was an even bigger hit.
Recently, Salon spoke over the phone with Stiglitz about his new book, “The Great Divide: Unequal Societies and What We Can Do About Them,” the roots of inequality, and what he wants to see from the 2016 presidential candidates to prove they’re taking the issue seriously. Our conversation is below and has been edited for clarity and length.
So this book originally came out in 2012, and now it’s 2015. Are you more optimistic now than you were then? Or less?

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I think the good news is the way that, in the opening shots of the 2016 campaign, candidates across the political spectrum have said that inequality is a major issue facing the United States. Sometimes they’re not phrasing it exactly about inequality — some say the struggles of the middle class— but of course they’re talking about inequality and that’s very heartening. Obviously, when I hear reports about the amount of money that this campaign is going to cost, and the projections that it will be well in excess of what the last presidential campaign cost, which is $2 billion, I get depressed. Those campaign contributions, as I’ve said often, are investments, not donations. They’re investments in where the investors expect to get a return and that return is shaping our economy to serve their interests.
Republicans, especially former Gov. Jeb Bush, like to talk about a lack of opportunity rather than inequality. Does the distinction make much of a difference?
When they first began making that argument, Paul Ryan said, We’re not interested in inequality of outcomes, we’re concerned about equality of opportunity. But as I point out in my book “The Great Divide,” the fact is we don’t have equality of opportunity. We are among the countries in the advanced world with the least equality of opportunity. So if they think that’s an answer to the question of inequality of income, wealth, justice, all those other kinds of inequality, it’s obviously not. The fact that there’s a huge literature of both theory and empirical evidence saying that the two are very highly correlated means that they can’t escape talking about equality of outcomes, that is to say counties with more inequality of outcomes, the incomes have greater inequality of opportunity. In a sense, the two issues are inextricably linked.
One of the more middle-of-the-road policy responses to inequality you’ll hear about is improving education. But that point of view also has its critics. What do you think of that approach?
That’s sometimes called part of a minimalist apple pie agenda. I’m very convinced that that won’t go far enough and what’s happened in the last fifteen years, has made it even more clear that that won’t go far enough. Since the beginning of the century, even educated people have not been doing very well. They’re only doing well relative to those without a college education. So those without a college education, have seen their incomes really sink and those with a college education have been treading water. So what is going on is much more fundamental, it’s much deeper than that. It is part of any agenda but it’s just a part and won’t really address the fundamental problems going on.
You make a point in the book of arguing that the 1 percent doesn’t flourish because it’s so much better than the rest of us, but rather because our economic system is in many ways rigged to their benefit. What do you mean by that?
One way of thinking about that is to try to think about the textbook model of economics — thousands of producers, competing with each other, each so small that it has no effect on price. Almost the only industry for which that is true is agriculture and that’s an industry where government presence is very, very strong and where government presence is basically designed as an agricultural program that helps the very big farmers with very little of the money going to the small farmers.
More broadly, there are a huge number of examples of this: in ’93, we recognized the inequities of CEO pay and passed a law that said if the pay was so-called performance-related than it was exempt from the special tax that was put on excessive pay. Well, what that did is just open the floodgates and allow every company to re-label their pay as performance pay. Many of us pointed out that these new stock options— which were so-called performance pay — were very non-transparent. Shareholders didn’t know how the value of their shares were being diluted, and we tried to push for greater transparency, but we ended up maintaining this system that encouraged dishonest creative accounting and allowed these bonuses which have very little to do with actual incentive.
That’s a very dramatic example of a legal tax structure that benefits the one percent. At the other extreme, laws that have been passed that make it more difficult for unions, for workers to get together and unionize, globalization rules that almost encourage firms to invest abroad, allowing firms to threaten to move abroad if workers don’t accept lower wages and worse working conditions. All of that has weakened labor. So these are just a few examples by which our rules and regulations have empowered the top and disempowered everybody else.
You also argue that, ultimately, inequality on this scale is bad for everyone — the 1 percent included. Why do you think it’s not in their best interest, either?
The idea is that a strong theory and empirical evidence that inequality is bad for economic performance, that it leads to lower growth and more instability. Back in 1980, the Reagan team said, Let’s try this new experiment of supply-side economics, where we lower the taxes on the top and they said don’t worry that this is going to lead to more inequality, the people at the bottom are going to benefit, because we’re going to get more growth. There’s no evidence for that, and now thirty-some years later, we have the results of that experiment. The combination of lower growth and a lower share of what growth has occurred–in fact negative shared–meant that the people in the middle and on the bottom have been worse off.
Now, you run that engine in reverse, that reasoning in reverse and you say, well, if it is the case that we actually grow the economy better by having more equality, then it’s at least conceivable that those at the top might get a smaller share than the outrageous share that they’re getting today, but the pie would be bigger and they could actually be better off. But I don’t think the one percent wants to live in gated communities; I’ve visited places where there’s a huge amount of inequality, and the quality of life of the one percent isn’t that great. They live in gated communities, there’s an unpleasantness about the nature of their society. That’s a direction to which we may be moving, if we don’t deal with the inequality we have. So I would say that, would I rather live in a society where there’s sort of a sense of community and a sense of purpose, a sense of fairness, I think it’s a much healthier community to live in. And all of us live in a community; none of us are really that isolated.
What would be some of the policies that the 2016 Democratic candidate could realistically run on to combat inequality that would excite you most?
I think I would be the most excited by a candidate that really takes seriously this issue of equality and equality of opportunity, addresses it in as many dimensions as possible, and goes beyond what I would call the minimalist agenda— more education, minimum wage— and begins to work on the most important things that will ensure that the middle class will have access to the basic ingredients that make for a middle class life. That means beginning to work on the underlying structures that are referred to the institutions that have lead to such inequality in before tax income, in market incomes. That begins to say that when we have a tax system that rewards speculators more than people who work for a living that distorts our economy. We don’t want our most talented people to go into speculation; that can lead to even more instability. We have a distorted economy, and that’s a result of the choices that we’ve made and we ought to be making different choices. We can do that! There’s not reason that capital should be taxed at a lower rate than people who work for a living.
Finally, there’s a whole agenda, I think, that could directly address some of the plight of average Americans— make it easier for people to get to jobs and public transportation, make it easier for a woman to work through support of child care or family-leave policy. Basically trying to help every member of our society participate meaningfully in our society.
Last question: You’ve previously expressed opposition to the Trans-Pacific Partnership trade deal, but that was a few months ago. Have you heard or seen anything in the time since to make you feel more positively toward the proposal?
No, I’ve actually heard several things that have made me more adamant in my opposition. I’ve talked to the health negotiators around the world. I’ve talked to people who’ve been involved in the arbitration process as part of the investment agreements. Even people who are arbitrators say the whole system is corrupt, that it’s a very expensive system, that therefore creates an un-even playing field with big corporations with big, deep pockets can get access to have recourse, whereas smaller firms can’t. That American firms can re-locate or do their investments in the United States as a subsidiary, sue the U.S. government in ways that they could not if we didn’t have that trade agreement. In other words, what we’re doing is changing the legal structure for the United States, not only for foreign firms. Because an American firm can become an American firm overnight. So this is a very big deal.
It’s not just a trade agreement, it’s a really major change in a legal structure. And I don’t think it should be taken lightly. I don’t think it should be adopted on a take-it-or-leave-it basis, that’s associated with fast-track. I think each of these issues themselves need to be debated, voted on separately. The bottom line is, if anything, I’ve been more resolved in my opposition.
Elias Isquith Elias Isquith is a staff writer at Salon, focusing on politics. Follow him on Twitter at @eliasisquith.
More Elias Isquith.
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Globalized Inequality

 

Posted on by /Enlightenment Economics/Blog Ref http://www.p2pfoundation.net/Transfinancial_Economics
 

Francois Bourguignon’s The Globalization of Inequality is an interesting companion to Tony Atkinson’s Inequality, which I reviewed here recently. It’s a different kind of book, a relatively short argument about why and how to make the globalization process fairer, as contrasted with Atkinson’s longer and detailed description and analysis of inequality in the UK with a substantial list of policy recommendations. It’s useful to have the global picture alongside the national one, however, because the story globally is of much increased incomes in the middle of the distribution in a few countries – largely China – as well as gains among the richest groups.
In the first chapter and its data annexe Bourguignon sets out the figures in careful detail, distinguishing between increases in inequality within countries and changes between countries. “Inequality in the standard of living between countries has started to decline … On the other hand, inequality within many countries has increased.” The book’s central question is then whether these two phenomena are related, linked by the process of globalization, of trade and investment flows between high and low (average) income countries. This is addressed in the second and third chapters of the book. He answers broadly yes, through the far greater intensity of competitive forces operating on industries in the rich economies that couldn’t cope – although he also attributes a significant part of the explanation to the politics of deregulation and tax cuts, and the expanding role of finance.
The final part of the book turns to whether anything ought to be done about inequality in this global context, and if so what can be done. Bourguignon argues that it is worth trying to get the best of both worlds and combine the trend towards less inequality between countries while tackling greater inequality within countries. He rejects the idea of a sharp trade-off between equity and economic efficiency on the grounds that inequality of the degree seen now in the US and UK is politically and institutionally destabilising. Indeed, he says, many aspects of inequality inhibit the efficient operation of markets.
The final chapter turns to policies, and it is the least satisfactory. This is in large part because in a short book like this, there is little room for the persuasive detail. However, I don’t think the policies he favours – more development aid for the poorer economies, taxes and transfers within the rich economies – would be particularly effective. I’m far more in sympathy with Atkinson’s emphasis on market incomes, and the need to address the structures of markets that are the root causes of the increase in inequality.
Having grumbled about that, it is certainly important to keep the biggest of big pictures in mind when thinking about inequality, even at the national level. The fact that the economy is globalized is an important factor in any assessment of the causes of inequality and therefore what it might be practical to do about it.
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Lies, damned lies, statistics, and GDP

 

Posted on by /Enlightenment Economics/Blogger Ref http://www.p2pfoundation.net/Transfinancial_Economics
 
           

On the train to Manchester this morning I finished a terrific book I should really have read long ago. I’m very glad I finally have. It’s Morten Jerven’s Poor Numbers: how we are misled by African development statistics and what to do about it. The title made me think it was only relevant to African statistics, when in fact anybody interested in GDP and national accounts should read it.
The book is short and non-technical, but includes a number of important arguments and examples. Here are the conclusions I take from it:
1. Statistics are the ‘facts’ “states collect to get knowledge about their own economic or social conditions.” Having reliable statistics is a marker of an effective state – “the ability to collect information and taxes are closely related” – and the statistics chosen reflect the power structures and political priorities of states. African states are not effective, their statistics are not reliable. (But this also made me reflect that there is a lot happening in the developed economies for which we have no statistics – and no ability of the state to understand or influence change.)
2. African GDP statistics in the key online databases used by economists – the World Bank, the Penn World Tables, the Maddison database – are inconsistent because of different interpretations of the underlyaing national data, different base years, different price indices. The sources even rank African countries differently in terms of GDP per capita. Econometric work will get different results depending which is used.” Jerven argues that economists need to have a much more detailed understanding of both the data they download and the specifics of individual countries’ circumstances to be able to interpret the numbers.
3. The underlying national level data are unreliable because of a lack of resources and statistical capacity. Surveys are rarely carried out, there is much guesswork, base year changes happen too infrequently, there is political influence.
4. 2 and 3 together mean little reliance can be placed on the standard cross-country regressions using the standard data sets. “These problems undermine any general conclusions drawn about what stimulates or hinders economic development in Africa.’
5. The standard national accounts concepts don’t apply well to developing economies with a large informal sector. The distinction between production and consumption or working and not-working is not as clear. (And may be becoming less clear in developed economies too, as technology blurs these boundaries and working patterns change.)
The book argues that the standard outline of African growth – a dismal 1970s, a better outcome post- structural adjustment remedies, and a recent acceleration in growth is largely ‘illusory’. The recent uplift in particular comes from the World Bank/IMF splicing recent rebased GDP figures onto an earlier series, as Jerven describes it. He argues that more data needs to be collected, in regular surveys, to enable both good statistics and an effective state knowing what is happening in the economy and to its tax base. He also argues strongly for greater transparency by national statistical offices but especially by the international agencies such as the World Bank and IMF, whose say-so determines the methods used to create the statistics and the world’s interpretation of what is happening in each economy.
“Accounting for the national economy is fundamental for government accountability. Without reliable macro data, political transparency is hard to imagine. …. Numbers are too important to be ignored and the problems surrounding the production and dissemination of numbers too serious to be dismissed.”
So don’t make my initial mistake of thinking this is a bit of a specialist book. It’s a fascinating and important read.
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Wednesday, 29 April 2015

Cybernetic dreams

 

Posted on by /Enlightenment Economics/ Blogger Ref Link http://www.p2pfoundation.net/Transfinancial_Economics
 

I read Eden Medina’s Cybernetic Revolutionaries: Technology and Politics in Allende’s Chile because I spotted the fuss on Twitter about Evgeny Morozov’s New Yorker piece, The Planning Machine: Project Cybersyn and the Origins of the Big Data Nation. I’m not all that interested in the fuss but was very intrigued by what people were saying about the book.
It is indeed a completely fascinating history and reflection on the interaction between technology and politics, and I highly recommend it. The cover photograph gives a good flavour of the weirdness of this episode. It is the control room built in Santiago in late 1972 under the guidance of British cybernetician Stafford Beer. The control room, that is, for the economy, linking a network of telex machines in factories around the country to a mainframe computer in the capital.
 
While not a fully planned economy, the Allende government had nationalised substantial sections of industry and, as time went on and the American-led sanctions began to bite, planned to control key prices. It also had to contend with a nationwide strike led by businesses opposed to the leftist government. The aim with Project Cybersyn, as the cybernetic plan was labelled, was to deliver to the central authorities ample real-time information on production while allowing individual factories the freedom to make their own decisions. Government policy could be adapted quickly in response to the trends identified. In other words, it was meant to avoid the pitfalls of central planning while enabling the co-ordination benefits. As Medina puts it: “Connecting the State Development Corporation to the factory floor would … allow the government to quickly address emergencies such as shortages of raw materials and adapt its policies quickly. Up-to-date production data would also allow Chile’s more experienced managers to … identify problems in factories and change production activities in the enterprise when necessary to meet national goals.”
Apart from the obvious practical difficulties (eg only one mainframe and very few programmers), one challenge was actually modelling the economy. It is unclear what kind of relationships were written in to the code, but they must have been something similar to those embodied in the simple linear model of the Phillips Machine. For all that it was a project about managing the economy, there was just one economist on the team, according to the book. However, Medina emphasises the intended flexibility of Project Cybersyn: “The model would not function as a predictive black box that gave definitive answers about future economic behaviour. Rather, it offered a medium in which economists, policy makers and model makers could experiment and, through this act of play, expand their intuition about [the economy].” The structure embodied the cybernetic emphasis on responding to the information contained in feedback. I must say I didn’t understand Beer’s cybernetic models at all, as the language and concepts are so different from anything I’m familiar with – but then cybernetics itself comes across as rather futuristic-retro.
Beer also hoped to have a method of getting real-time feedback from the people to the government by installing ‘algedonic meters’, or dials indicating their happiness or dissatisfaction, that would be installed in community centres or public places. This part of his plan was never taken up. However, he was keen on getting public engagement with the project and even persuaded Chile’s most famous folk singer Angel Parra to write a Project Cybersyn song.
One of the divisions within the project, well-described in the book, was between the technocrats who saw it as a tool for managing the economy more effectively, and those who saw it as a means of reverse engineering politics and society on the ground. The latter group hoped workers in the factories would develop their own sense of autonomy through inputting information into the telex, and understanding in this way the part they played in the whole. “[Beer] believed that engineering a technology also provided opportunities to engineer the social and organizational relationships that surrounded it.” The technocrats tended to dominate, though, largely because of the growing difficulty Allende’s government had in sustaining its coalition. Politics didn’t co-operate with the technology.
One of the interesting aspects of Project Cybersyn is that the technologies it used were not the most advanced. The US blockade largely prevented Chile from importing more computers or sophisticated equipment. Aside from the one mainframe and the telexes, the futuristic control room used slide projectors and hand drawn slides. The fibreglass control chairs, based on Italian designs, were one of the most cutting-edge aspects of the control room. And yet the project was the most ambitious cybernetics project ever (partially) implemented.
The project Cybersyn control room

It’s hard to decide whether the people behind Project Cybersyn were crazy dreamers or just 50 years ahead of their time – what would they have made of the possibilities of the web and ‘big data’? The basic cybernetic question the project poses remains valid: can policymakers do a better job with rapid real-time feedback on economic indicators – or is the economy as a dynamic, complex system simply beyond the kind of mapping implicit in any such project? Can what is measured about the economy reshape the economy or underlying social order in turn – and what does that imply for the indicators one might try to include in a Project Cybersyn 3.0?
Fascinating questions, and a fascinating book.
PS After finishing the book, I read the Morozov column. It is a precis of the story told in Medina’s book, with a handful of extra paragraphs woven in that give his own reflections on the issues raised – including, for example, exactly the obvious ‘what could we do in the era of the internet of things’ question. If the column had actually been billed as a review of Cybernetic Revolutionaries, I don’t think there would have been any fuss. While not plagiarism, as the book is the only source mentioned, for Morozov to have given it just one passing mention in the ‘Critic at Large’ section seems ungenerous.
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A Cybernetic Approach to Economics

 
The importance of a cybernetic approach to economics is slowly dawning in the world...even in the world of academia. RS
 
 
 
Forums » New Economic Theory » Need for a New Economics

 

Submitted by admin on Mon, 10/31/2011
As a result of attending a meeting of the American Society for Cybernetics at Rensselaer Polytechnic Institute in July 2010, I was encouraged to write an article for Cybernetics and Human Knowing. This article, entitled  A Cybernetic Approach to Economics, (cut and paste version at the end of this introduction exists) was published in December 2010. At the 'Continental Dialog meeting hosted by the Canadian Association for the Club of Rome (CACOR) in June 2011, Roberto Peccei and Heitor Gurgolino de Souza encouraged me to write an outline of the first step in the modeling project proposed in the paper.
CACOR hosted an symposium on new economic thinking in October 2011 that featured a panel discussion involving Ian Johnson, Roberto Peccei, Peter Victor (an ecological economist at York University and author of Managing without Growth), Derek Paul (Professor of Physics Emeritus, University of Toronto), and Robert Hoffman. I will keep you posted as output from the symposium becomes available.
Recently, I came across the work of Elinor Ostrom, an institutional economist and Nobel laureate (2009) who has written on the subject of managing the commons. This body of work is published in the following three books and numerous professional papers.
Ostrum, Elinor. (1990). Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge: Cambridge University Press.
Ostrum, Elinor. (2005). Understanding Institutional Diversity. Princeton NJ: Princeton University Press.
Hess, Charlotte & Ostrom, Elinor (eds). (2011). Understanding Knowledge as Commons: From Theory to Practice.Cambridge MA: MIT Press.
Her research addresses the nature of institutions that have successfully managed local common-pool resources such as fisheries or water resources. She also studies the processes from which these institutions emerged. I think there is much to be learned from this body of work when applied at the scale of the 'global commons'.
A Cybernetic Approach to Economics might be of interest to CADMUS readers. Cybernetics and Human Knowing will permit re-publication provided that attribution is given to the original publication. It is clear that there is little overlap between the intended readership of the two journals.
Robert Hoffman



Notes on a project proposal for the development of a proof-of-concept systems model as an expression of new economic thinking.

 

Robert Hoffman

Club of Rome and what If? Technologies

 

May 31, 2011

 

Background

 

The substance and rational for a new approach to economics is outlined in A Cybernetic Approach to Economics by Robert Hoffman, published in Cybernetics and Human Knowing, 2010. The proposed cybernetic approach is intended to address the following issues – none of which has been or can be satisfactorily addressed from within the existing paradigm of mainstream neo-classical economic theory:

  • Impending ecological limits exemplified by peak oil and climate change

•     The conflict between the goals of economic growth and sustainability

•     The inadequacy GDP per capita as an indicator of social well-being or prosperity

•     The instabilities associated with financial bubbles

•     The growing inequity in the distribution of income both within and between nations

 

It is proposed that economics is more appropriately framed as a ‘management of the commons’ problem rather than a global optimizing problem. (Hardin, 1968).This proposed formulation is concerned with the allocation of the benefits to be derived from a finite and diverse natural resource base distributed unevenly in space base to the population to be supported by it. The amount of benefit to be derived from the commons depends upon the existence and effectiveness of the processes needed to transform the natural resource of the commons into goods capable of yielding the services needed by people. Production in this framing of economics consists of the transformation of materials using energy and know-how.

 

Framing economics as a management of the commons problem implies that economics must be seen through the lens of complex evolutionary systems:  Evolutionary, because evolution at both the biologic and social levels is a process in which knowledge creation plays a key role. Complex, because there are multiple commons at various geographical scales consisting of a wide range of naturally occurring processes yielding resources with differing physical properties with the consequence that there is an equally large number of processes and process chains for transforming materials and energy. Further there are a large number of economic agents that own, control and influence the commons. Complexity also arises because of potential non-linearities in the relationships among the variables.

 

Unlike global optimizing problems, which have elegant mathematical properties and lend themselves to analytic solutions, complex systems may be best understood using simulation techniques (Berlinski, 2000; Casti, 1997). The development of such a simulation model is the subject of proposed project.

 

Project objectives

 

  • Design and implement a simulation model as proof-of-concept for the cybernetic approach to economics.

 

  • Create and document a set of scenarios designed to illustrate important features of the model as they may apply to the global issues identified by and of concern to the Club of Rome.

 

  • Make the model and the scenarios accessible to key institutions concerned with global issues and the formulation of public policy.

 

  • Complete this project one year from start-up.

 

 

Project Ingredients

 

  1. Institutional base

The proposed project needs an institutional home in an established centre in the field of complex systems modeling. The centre should be able to provide managerial leadership, financial accountability and administrative support for the project. It should be eligible for funding from academic sources and foundations. It is important that the institution be part of a network of institutions that have programs in the area of complexity science and new approaches to economic thinking. The complex systems modeling program proposed at the Waterloo Institute for Complexity and Innovation (WICI) would be well placed given the linkage between the Institute for New Economic Thinking (INET) and the Centre for International Governance Innovation (CIGI) at the University of Waterloo. Other institutions with capabilities and interests might include the Santa Fe Institute, IIASA, Potsdam Institute, and Wuppertal Institute.

 

  1. Team of experts for model and scenario design and oversight.

This team will meet two or three times over the course of the project, initially to guide the design of the model, then to critique the model once a first version has been implemented and finally to guide the creation of a number of scenarios. This team should consist of a dozen of the best and most creative thinkers in the field, not restricted to those within the discipline of economics. Thomas Homer-Dixon (Waterloo), Stuart Umpleby (GWU), Roger Bradbury (ANU), and Martin Lees (CoR) had agreed to participate in the project as it was proposed in the first round of INET grants. Other members might be drawn from the Club of Rome, the Santa Fe Institute, INET, the Capital Institute, or the community of ecological economists.

 

  1. Implementation team

The team at whatIf? Technologies, now consisting of half a dozen experienced modelers with backgrounds in mathematics, computer science, physics, engineering and economics could realize the proposed model. Over the past two decades, this team has created in excess of fifty simulation models and a powerful suite of software tools and methods for designing, implementing, calibrating and operating simulation models. This experience includes a number of biophysical models including the Australian Stocks and flows Framework developed in collaboration with CSIRO Sustainable Ecosystems, the Canadian Energy Systems Simulator, developed in collaboration with Natural Resources Canada, the National Research Council, the Canadian Energy Research Institute and the Institute for Sustainable Energy, Environment and Economy at the University of Calgary, and the global systems simulator, a model that serves as proof-of-concept for some of the elements of the proposed model.

 

  1. Funding

A ball park estimate of funding requirements for the project is $500,000. This estimate allows $150,000 for an honorarium and travel expenses for the expert team members, $200,000 for the implementation team, and $150,000. for institutional overhead.


PS. I do not know the present status of the above project. RS/Blogger
 
 
 




Above Ref Source
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Global crash to be included in new economics A-level

 

By Judith Burns Education reporter/BBC News/Blogger Ref http://www.p2pfoundation.net/Transfinancial_Economics
 
Student writing
The global banking crisis of 2007-08 will be included in a new economics A-level

Students will learn about the global financial crisis in a new economics A-level to be taught from September.
The course, from Pearson's Edexcel exam board, will cover factors leading up to the banking crash of 2007-08.
It will also ask pupils to compare the crash and the way governments handled it, with the Great Depression of 1930s.
"It is vitally important that our A-levels reflect the realities of an ever changing world," said Mark Anderson, Pearson's UK managing director.
"We know that students and teachers are eager to study the biggest financial crisis to take place in our lifetimes, and it is so important that tomorrow's business leaders understand and debate these key economic events."
Pearson says its new A-level economics will ask students to consider the factors that contributed to the crisis "including moral hazard, speculation and market bubbles".
They will also look at the role of banking regulation and the methods governments adopted to deal with the crisis.
These include "quantitative easing" - when central banks print or create money electronically and use it to buy bonds from banks or pension funds to increase the amount of cash in the financial system, boosting lending to businesses and individuals.
The theory is this should allow them to invest and spend more, hopefully increasing growth.
Arguably government efforts to manipulate the money supply and interest rates in the recent recession helped avoid the crisis becoming a 1930s style depression.
Students will also for the first time study the use of "national wellbeing" and "national happiness" as economic measures.
They will also look at the limitations of these and more traditional economic measures in comparing living standards between countries and over time.
The syllabus will also include the study of economic theorists such as Karl Marx, John Keynes, Friedrich Hayek and Adam Smith, as well as a section on new theories in behavioural economics and the ways in which psychological, emotional and social factors contribute to people's economic decisions.
Students will also study emerging and developing economies and consider economic theories and concepts in different contexts.
Exam boards OCR and AQA have also redeveloped their economics A-levels in response to new government specifications for the subject.
These require students to develop an "appreciation of economic concepts and theories in a range of contexts and develop a critical consideration of their value and limitations" in explaining real-world events.
AQA qualifications manager Sam Livesey said his board's A-level economics course, developed with help from the Bank of England, would include the 2008 credit crunch "as a real-life example to teach students how the financial system operates and give them real-world knowledge of economics.
"The topic will give students an understanding of how financial crises occur and what measures can be put in place to avoid them," said Ms Livesey.
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Tuesday, 28 April 2015

We have the technology to reduce earthquake deaths. So why don't we?


The following article has been posted here at the time of the great international operation to help the people of Nepal from their terrible earthquake. It claims that the technology exists to reduce deaths.   One reason why this has not transpired is because of a lack of finance. This is indicated in the article below along with other factors...

With Transfinancial Economics though such vital funding could also be more easily accessed than now. In TFE new money could be created electronically in full, or in part to fund technology which could reduce the death toll.  See http://www.p2pfoundation.net/Transfinancial_Economics

PS. Also mentioned in the article is the problem of corruption. One way round it would be that the people, and NGOs involved with spending money correctly, and properly would have special bank accounts that could be tracked electronically, and if fraud is detected the money could be deleted, or sent to a safe account. This is not a new idea as such, and is becoming common with mobile phones which can transmit money. But refinements to all this should be seen as necessary.

As for disaster areas in war torn countries, welfare agencies could receive greater, and greater military protection, and support from the UN troops, and make sure that aid gets to the right people, and the right places. The need for more troops (plus robot soldiers possibly) could be funded in full, or in part from a Facilitation Bank which would have  the power to create new money electronically.

As for finding the right places requiring aid in war torn areas, bribing people (notably terrorists) should be avoided as far as possible. Instead ideally, "mini" drones could be sent in advance of a convoy of aid to find those in serious need.

RS.
 

 
We have the technology to reduce earthquake deaths. So why don't we?
 
 
 Getty Images/ Article source Vox.com/Author Brad Plumer/ April 2015
 
 
We have the technology to reduce earthquake deaths. So why don't we? 
Earthquakes don't kill people. Buildings do.
You hear that line from seismologists whenever a deadly quake strikes. And it's become horrifically relevant again Saturday, after a 7.8-magnitude earthquake hit Nepal, leaving at least 4,000 dead (and counting).
The basic truth is that earthquakes are much, much deadlier in places where buildings are poorly constructed, unreinforced, and not designed to withstand shaking. Kathmandu, Nepal, was a gruesome example: observers told CNN that buildings in the city often aren't up to code. As a result, a shallow quake easily turned the city into rubble, trapping people underneath.
The tragedy here is that humans possess the technology to reduce earthquake deaths. Vulnerable regions like California, Japan, and Chile have taken steps to reinforce their buildings and dramatically reduce their risks over the past century. So why hasn't this happened in countries like Nepal or Iran or Pakistan, where experts have warned again and again that massive earthquakes are inevitable?
This difficult question was explored in an important 2013 paper in Science by Brian Tucker, founder of GeoHazards International.Often, he points out, it's a funding problem, particularly for poorer countries. In some cases, there might be unique obstacles at work (in Nepal, civil unrest made the task of retrofitting even harder). But, in many areas, there are psychological barriers — people simply aren't even thinking about preparing for earthquakes.
"The psychological reasons we don't prepare for earthquakes are often ignored," says Tucker, whose nonprofit has been working to reduce casualties from natural disasters. "Just as an example, we still find a lot of people who think of earthquakes solely as an act of god — and don't think about the very real ways to reduce risks."
Massive earthquake hits Nepal

Poor countries are falling behind at preparing for earthquakes

Take, for example, south central Asia. More than one quarter of the world's population lives here — in Iran, Afghanistan, Pakistan, India, Nepal, Bhutan, Bangladesh, Sri Lanka and Burma.
These countries all sit around the northern edge of the Arabian and Indian tectonic plates that are colliding up against the southern edge of the Eurasian plates. This is the same process that has created the soaring Himalayan mountains. But these sliding plates can also produce massive earthquakes in the area — like the one that devastated Nepal this week:
Everyone knows this is a seismically active zone. Massive earthquakes are basically inevitable. Yet throughout the region, buildings are often shoddily constructed and topple easily in earthquakes.
In a 2013 paper for Science, Roger Bilham and Vinod Gaur took stock of this problem. Throughout the region, contractors often fail to adhere to building codes. Oftentimes, what building codes do exist only apply to civic structures — not the places where people live. The result? In an earthquake these shoddy buildings collapse and lots of people die.
Tucker says there are lots of reasons for this:

1) Rapid population growth. For starters, the population is growing extremely fast in many developing countries — particularly as more and more people move to cities. "So when you have this tremendous demand to build hospitals, schools, and apartment buildings, it's very difficult to build good buildings at the rate that is needed," he says. The graph below shows that the number of people who live near earthquake zones in developing countries keeps soaring:
This was a factor in Nepal, where people were fleeing civil unrest in the countryside and moving to cities. That made the task of retrofitting buildings even more difficult.

2) A lack of funding. Funding is another problem, particularly for poorer countries. In his 2013 paper, Tucker notes that only about 1 percent of all disaster aid actually goes to prevention. The United States and other wealth countries give a fair bit of money to nations that have been devastated by earthquakes — we devote a lot less toward preventing them in the first place.

3) Corruption and weak governance. It's significantly harder for countries in earthquake zones with corruption problems to enforce their building codes. "You can't just retrofit buildings and enforce building codes," says Tucker. "You also have to fight corruption."

4) Complacency and other psychological barriers. This is another big one. Tucker notes that too many countries don't take the risk of earthquakes seriously enough. This is particularly true in poorer countries that often have more immediate concerns, such as poverty or even pollution. "Humans respond to threats that are personal and visible or rapidly changing," he says. "Earthquakes and climate change are examples of slow-moving problems that we just have not evolved to respond well to."
This complacency can take a variety of forms. For instance, Tucker recalls a meeting in the mid-1990s with a minister of Nepal, who told him that Nepal had no need to worry about another earthquake because "Nepal had already had its big one in 1934." (This despite earthquake experts warning that Kathmandu was extremely vulnerable.)
In other areas, he notes, religion can be a barrier — people view earthquakes as an act of god. "I've had people say that what I'm doing is blasphemous," he says. "That's just nuts."

Countries often only take action after tragedy strikes

Unfortunately, it often takes a tragedy before countries start taking the threat of earthquakes seriously.
In his 2013 paper, Tucker examines Chile and Haiti as a stunning exercise in contrasts. In 1960, a magnitude-9.5 earthquake struck Chile, after which the country embarked on a massive earthquake-safety program and enforcing new building codes. By contrast, Haiti did nothing during this period, lulled into complacency by a lack of seismic activity and hampered by constant political unrest and extreme poverty.
Then, in early 2010, two similar earthquakes struck the two countries. Only about 0.1 percent of Chileans affected by the magnitude-8.8 earthquake died. By contrast, 11 percent of Haitians affected by a magnitude-7.0 earthquake with similar shaking died . "In other words," Tucker wrote in his 2013 paper, "Haitian buildings appear to be 100 times as lethal as Chilean
buildings."

We may need public health campaigns for earthquakes

I asked Tucker what practical steps he would advise Nepal to take, now that it has had its own tragic wake-up call. He suggested two big ones. First, Nepal should start focusing on reinforcing schools. Not only is spending money on schools politically popular, but it also helps educate schoolchildren that earthquakes aren't a purely natural disaster — their risks can be reduce greatly.
Second — and this was surprising — he mentioned that foreign-owned luxury hotels were often a good place to start reinforcing buildings. The reason? It creates incentives for competitors to also start reinforce their hotels. And it provides jobs for masons and architects, who learn how to build buildings up to code.
Still, it's far better for countries to start preparing for earthquakes before tragedy strikes. And, on that score, our current method of dealing with earthquakes seems to be failing. Tucker suggests that earthquake experts may need to start trying public health-style campaigns — "similar to the ones that get people to use seatbelts or quit smoking."
In his 2013 paper, he noted that an earthquake campaign would have to have many facets — not just information, but also incentives to increase preparedness. "Publishing statistics on the increasing occurrence of lung cancer and auto fatalities was not sufficient; nor were photos of black, leathery lungs on cigarette packages or photos in driver education movies of gory accident scenes. Taxes, fines, and opprobrium were used. ... The earthquake
risk reduction community might find effective lessons, models, and tactics from studying those public health campaigns."
Importantly, however, he concludes that the world's current strategies for cutting down on earthquake risk aren't working. Twice as many people died from earthquakes in the decade between 2001 and 2012 as died in the previous two decades combined. And those deaths are only likely to increase in the future as more people move to seismically active areas.
"More of the same," he concluded, "is not enough."


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Wednesday, 22 April 2015

Social Physics?


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