Thursday, July 29, 2010

Deindustrialization and markets

Rook: I hear what you're saying, but why are the markets not responding to the high probability of future deindustrialization? Shouldn't they portend our future doom if this is a significant risk?

Bishop: Not necessarily. Imagine I offer you the following bet: if it snows this August then I will pay you $10. If it doesn't snow this August then you will pay me $0. Do you accept the bet?

Rook: Yes.

Bishop: Because you believe it will snow this August?

Rook: Of course not! I'm accepting the bet—despite the odds—because I stand to lose nothing and possibly gain something.

Bishop: So it was a purely rational decision to bet on snow this April?

Rook: Yes.

Bishop: Perhaps markets behave much the same way.

Rook: But we're not talking about snow futures.

Bishop: True. We're talking about deindustrialization. If the world begins deindustrializing, it is likely that many if not most monetary investments will fall to $0, given enough time. This is because, holistically and analogously reasoned, the shrinking pie will necessarily result, on average, in its slices becoming smaller. Reductionistically, most investments are suited for inflation or deflation but not both, and a chaotic oscillation between inflation and deflation will wipe people out, given enough oscillations, as it will be exceedingly difficult to predict when the next wave hits.

Rook: I don't see what this has to do with our bet example.

Bishop: Look at it this way. Even if the probability of deindustrialization not occurring is the same as the probability that it snows this August, the markets may still have rational reason to bet on deindustrialization not occurring, just as you had rational reason to bet on it snowing this August. This is because most investors will be wiped out if deindustrialization does occur, no matter what they do, so they may as well bet on continued industrialization, however slight the odds.

Rook: That logic seems a little backwards to me.

Bishop: It's rather straightforward. Imagine that, no matter what financial preparations you make, deindustrialization will wipe you out.

Rook: Okay, I can accept that as a hypothetical.

Bishop: In that case, it doesn't make sense to make financial preparations for deindustrialization, correct?

Rook: Right, since I'll achieve the same result regardless of my preparations.

Bishop: So you may as well make financial preparations that are best in case deindustrialization doesn't occur, even if deindustrialization not occurring is unlikely, correct?

Rook: Aha! Now I see what you're saying. I may as well make financial preparations based on the scenario I do have some measure of control in, regardless of the likelihood of that scenario coming to fruition.

Bishop: Exactly.

Rook: That's an interesting point and one that is based on the not-so-difficult-to-swallow assumption that deindustrialization would likely wipe out most people financially. But a doubt lingers in my mind: why not invest in non-monetary investments like homesteads, farmland, or transition towns? Surely these will not all be wiped out in the case of deindustrialization.

Bishop: Well, from the outset we tacitly assumed that markets are rational, which may not be the case. There's a human side—an intrinsic emotional side—to investing as well, and I posit it goes something like this: anyone with money can invest in a monetary asset such as a stock, bond, or a mattress stuffed with cash. Such investments are fundamentally passive and don't require much from the investor and especially don't require him to make fundamental changes to his life. Investing in non-monetary investments, such as becoming a farmer or moving to a transition town, do require the investor to make active, personal changes. In some cases these changes are quite extreme, and many people are understandably not terribly enthusiastic to take on such a large social or spiritual risk. It may be easier and safer to risk one's life savings instead.

Rook: Your betting example deals only with the financial side of things; surely some people will make non-financial preparations, such as learning farming or moving to a transition town. It seems that we should see an increase in these kinds of investments.

Bishop: And exactly we do! Some people are moving into rural areas and becoming more self-sufficient. They have for years, for fearing the collapse of industrialization is nothing new. People are setting up transition towns, which are new, for fearing the collapse of the biosphere as we know it is new. And we see plenty of trends of much simpler, less personally invasive non-monetary investments: people planting gardens in their backyards, women taking up knitting again, people embracing alternative medicine, the whole DIY scene, and so on.

Rook: Even so, I'm not convinced that deindustrialization is going to happen.

Bishop: And right and prudent you are to believe that. Remember, we're not talking about whether deindustrialization is going to occur or not; we're merely talking about whether the financial markets will offer us a useful signal before it does occur. And the prudent conclusion is: not necessarily.

Rook: So you're saying that people may not have reason to believe that deindustrialization is going to occur until it already begins occurring?

Bishop: No, it's actually worse than that. It might be that people will not have reason to believe that deindustrialization is occurring until after it has already begun. After all, what other metrics would you use to reach this conclusion if not the financial markets' indices? How would you know what's going on? But this, I think, is a topic for a different discussion.

Monday, July 26, 2010

Is it different?

Lately, I've been working through the online peak-oil material of John Michael Greer's blog, The Archdruid Report. The site is good in the way that only non-mainstream sites can be; especially in the early archives, when the site was less popular than it is currently, the discussions in the readers' comments section are varied and insightful.

Greer begins with the premise that industrialization is on the way out and that we're headed for a deindustrial future. He's rather dispassionate and non-alarmist about it, though, and forecasts a self-limiting “long descent” spanning multiple generations. He also writes with a level of certainty that, given the subject matter, I find off-putting, but Greer is a religious leader and I'm understanding that all religions, even fringe ones, have in common that their leaders are not in the business of being uncertain—even if it's being certain about being uncertain.

What I can't help but wonder is if the online peak-oil community is, on the whole, suffering from a chronic lack of imagination. What will the technology-scape of the future look like? Greer asserts that not believing in a deindustrial future is akin to succumbing to the myth of progress. I'm sure we all can agree, optimists and pessimists alike, that the world one hundred years from now won't look exactly like the one we have now. Some people imagine that future world vastly superior to ours; others imagine it as vastly inferior; others still lie somewhere between the two extremes.

Take a cue from Eric Chaisson's idea of complexity and quantify the question by asking, “What will the per capita energy flow be in the future compared to now? Higher? Lower? About the same?” Currently, industrialized individuals consume, on average, about a hundred units of exothermic energy for every one unit of endothermic energy—which is to say between 200,000 and 300,000 kilocalories per day and an order of magnitude higher than even a few hundred years ago. I think that Greer is probably right in that the per capita energy flow of the future will probably be lower than today. Oil is special: oil is too non-fungible to be replaced by any one fuel source. Thermodynamics: it's difficult to capture energy from sunlight in real time compared to burning over a few hundred years what was captured over many millions of years via fossil fuels. Shrinking pie: it's exactly when you begin running out of a resource and see the need to rebuild your infrastructure around different ones that you find yourself least capable of doing so. Yes, these are important points, and I would argue that we should be thinking hard about these sorts of things on an individual basis. What I don't follow is how these sorts of ideas necessarily lead to a deindustrial future. A decline? Yes. Deindustrialization? Who knows.

This whole idea of the rises and falls of civilizations led me to the public library, section 901, to grab a copy of Oswald Spengler's Decline of the West. While there (in the 901 section), I saw another book, titled Medieval Technology and Social Change by Lynn White, Jr. It seemed to me that if deindustrialization is what we're possibly facing, it might be good to bone up on some medieval technology, so I checked out White's book along with Spengler's.

Medieval Tech is academic history. I happen to like books whose context half resides within the footnotes, but I thought I may have outdone myself when I soon realized that White didn't bother translating his Latin sources to English. But I plunged ahead and began learning what, at first, seemed like minutiae: the archaeological and philological nuances of placing the exact date when the stirrup was introduced to Europe sometime several hundred years after its invention in the East. Lynn's style is enjoyable, and as I continued reading, I began to see his bigger picture. The stirrup, he writes, had a profound change on military tactics; it directly led to the shift to mounted shock combat. It's hard to attack an enemy with a lance using the full power of the horse without yourself being knocked backwards off the horse unless your feet are firmly attached. Without the stirrup, a horse-mounted attack is only as strong as the rider; with the stirrup, the attack is nearly as strong as the horse itself.

The effects of the shift to mounted shock combat was not relegated to medieval battlefields. The effects were widespread economically and socially. The shift away from the infantryman of classical times and to the mounted warrior of medieval times quickly gave way to vassalage and the rise of the knight class. This follows from the premise that the maintenance of horses requires much land, and so political and economic power inexorably became bound to land ownership. With the stirrup and the subsequent rise of mounted shock combat, rather than conscripting ten or so peasants and equipping them to be infantrymen in your army, it now was more effective to have those ten or so peasants pool together their resources to equip one mounted warrior among them. Mounted fighters requires more skill and training than infantrymen, and so this led to an elevated, privileged knight class.

Is this bottom-up or top-down? Lynn argues how the stirrup led to the rise of feudalism: the proliferation of horses, the rise of the knights, vassalage, and so on. And yet perhaps the invention of the stirrup was itself a consequence of the fall of the Roman Empire. Of course, nothing about the fall of the Roman Empire directly led to the invention of the stirrup, but necessity is the mother of invention, and with the fall of the Roman Empire, the military tactics of the last 1,000 years—creating and leveraging many legions comprising limitless numbers of infantrymen—suddenly became infeasible in the political and economic vacuum of the dark ages. Huge legions are expensive for a civilization to maintain, resource-wise. With Europe broken up into poorer, fragmented kingdoms and the westward push of the Muslims serving as a real threat to security, it seems that military leaders would have begun looking for a different way to carry out war. But who knows the real reason. Here's a passage from Medieval Technology.
The historical record is replete with inventions which have remained dormant in a society until at last—usually for reasons which remain mysterious--they `awaken' and become active elements in the shaping of a culture to which they are not entirely novel. It is conceivable that Charles Martel, or his military advisers, may have realized the potential of the stirrup after it had been known to the Franks for some decades. However, the present state of our information indicates that it was in fact a new arrival when he used it as the technological basis of his military reforms.
One interest of mine is discovering our ideological blind spots: ideas that we are incapable of thinking about clearly, owing to stubbornness, emotions, etc. What are we missing that's right in front of our noses? For example, I find that many people struggle to frame problems in such a way where no solution is evident. Faced with such a “predicament”, as Greer labels it, people often resort to wishful thinking and other irrationalisms so that the problem can be said to have a solution, regardless of whether the new way the problem is framed has much if anything to do with reality.

My preferred historical narrative is that of comparative history. Spengler, author of The Decline of the West, was a comparative historian. Wikipedia tells me that comparative history is the “comparison between different societies at a given time or sharing similar cultural conditions.” It relies upon the use of analogy and metaphor to develop an understanding of the world's past, present, and future. It's also happens to have been out of favor since the 1950s, along with the popular comparative historian Arnold Joseph Toynbee.

Comparative history differs from more conventional, academic approaches to history in that it emphasized a top-down view of the world. It views civilizations as entities unto themselves, growing, thriving, and dying in accord to their own “biological” patterns and causes. Medieval Tech definitely is not comparative history. The Decline of the West definitely is.

I reason that my top-down, comparative-history point-of-view saddles me with my own set of ideological blind spots. By pursuing a comparative understanding of history and by inferring through analogy historical patterns that may actually be noise, I am more apt to say, “This time, nothing is different.” For if this time things were different, there wouldn't be much point to comparing past civilizations with current ones. Our civilization will have its winter like every other and give way to succeeding civilizations' springs. A believer in what Greer calls the myth of progress obviously believes otherwise; he is more apt to say, “This time, it is different.” Our civilization will not fall like every other; we will continue making the world a better place.

The hat of comparative history fits me well, but I can take it off from time to time and suppose that the truth probably lies somewhere between these two points of view. Medieval Technology isn't only about the stirrup: it covers the heavy plough, three-field crop rotation, the crank and other forms of rotational power. What's clear is that the middle ages, despite their economic and political stagnation, were not at all technologically stagnant; humans continued finding new ways to solve problems right on up to and through the Industrial Revolution. Take the crank as an example. It's an exceeding common and intuitive device for modern man, providing a method of converting between reciprocal and rotating motion, yet its invention and adoption occurred only about 1,200 years ago. Its adoption, however, sparked a range of additional rotation-related devices, such as the clock.

Whether it counts as progress or not, humans continue to innovate. I think this is an important point to consider before extrapolating our civilization's decline to be symmetrical to its ascent—and especially before predicting its decline to be imminent. Not all inventions since the Industrial Revolution will be tossed out in a lower-energy future. Machining, for example, was a young and fertile technology when industrialization began, and so it's unclear what we would be left with if we lost industrialization. It probably won't look like the 18th century, however.

Then again, it's not so hard to reconcile Medieval Technology with Greer. White gave a lecture related to medieval technology in the mid-1960s titled The Historical Roots of Our Ecologic Crisis. According to the Wikipedia article:
[White] posited that these [Western, medieval] beliefs have led to an indifference towards nature which continues to impact in an industrial, “post-Christian” world. He concludes that applying more science and technology to the problem won't help, it is humanity's fundamental ideas about nature that must change; they must abandon “superior, contemptuous” attitudes that make them “willing to use it [the earth] for our slightest whim.” White suggests adopting St. Francis of Assisi as a model to imagine a “democracy” of creation in which all creatures are respected and man's rule over creation is delimited.
Here, four decades prior, is a pre-echo of Greer's assertion that our current “predicament” is one that cannot be solved by conventional means—more of the same—and that we need a new narrative, a new myth to replace the myth of progress. And so the circle completes. Greer's message leads me to the 901 section of the library for a book of comparative history; on a lark I happen to read something different and am led back to Greer's message, spoken two generations ago.

So is it different this time or not?

Thursday, July 22, 2010

Prose-ack

Jack: Hello Edward!

Edward: Hello, Jack.

Jack: What is it that you're doing, sitting here alone in this coffee shop looking at that neglected chessboard?

Edward: Idle thoughts, friend Edward. Idle thoughts. I was imagining what these chess pieces would say if they could talk.

Jack: Talking chess pieces? You are ever the strange one. I suppose if these chess pieces could talk then they would say something like, ‘Will you please wipe this dust off me?’ That's what I would say if I were one of these grimy chess pieces.

Edward: Yes, I suppose a chess piece would like to be dusted off every once in a while.

[Edward picks up two pieces, one a black bishop and the other a white rook, and wipes at them using a fold of his shirt.]

Jack: Shouldn't you clean the other pieces, too?

Edward: I don't see why.

Jack: Me neither. Oh, Edward, it's terrible! I no longer have any concept of ought. You've destroyed my moral relativism; you've vanquished my Doctrine of Universal Acceptance. I don't know what to think about right and wrong, good and bad, anymore.

Edward: I can certainly see how a person suffering from not knowing ought would end up in a coffee shop.

Jack: Is that some sort an insult directed at caffeine addicts?

Edward: Maybe so. What brings you by today?

Jack: Well, I was… [Jack furrows his brow and looks puzzled for a few moments.] Well, I don't know, really. It's as if I just appeared here. Strange. But I do know that I was on my way home from the doctor's office.

Edward: What did you see the doctor for? Memory loss?

Jack: Memory loss? What makes you say that? Anyway, I was at the doctor's because I was recently attacked by a cat. [Jack shows Edward a bandaged wound on his leg.] See?

Edward: Ouch! What happened?

Jack: I just told you. I was recently attacked by a cat. Geez, who's the one with memory loss here?

Edward: Yes, yes. I mean how did it happen?

Jack: Well, let's just say that some cats don't like to have their cute, fluffy tummies rubbed.

Edward: I see. So did you require stitches?

Jack: Nope. Instead I got these.

[Jack pulls out of his pants pocket a vial of pills and holds the vial between his thumb and forefinger for Edward to see.]

Edward: Are those antibiotics?

Jack: I'm not sure. Let's see… [Jack reads the label on the vial.] It says they're prose-ack pills.

Edward: Prozak? For a cat attack?

Jack: No, not Prozak. Prose-ack.

Edward: Oh. What are they for?

Jack: For cat attacks. You know, you should probably see a doctor about that memory problem of yours. Anyway, I don't really know exactly how these pills work. I'm sure they're good for me, though, because otherwise the doctor wouldn't have prescribed them. After all, once upon a time he pulled a lot of all-nighters in medical school cramming for tests and therefore must now know a lot of useful medical information. In fact… [Jack reads the vial's label again.] ‘Take one pill twice per day…’—I suppose I may as well start the dosing now! [Jack opens the vial, shakes one pill out of it, puts the pill in his mouth, swallows, and closes the vial before putting it back into his pocket.] To my health!

Edward: Did you just toast yourself for swallowing a pill?

Jack: Yes. Don't you toast yourself when swallowing a pill?

Edward: No.

[A few moments elapse in silence.]

Jack: I'm not feeling anything.

Edward: I suppose the prudent prediction is that, being a pill taken orally, Prose-ack takes awhile to be absorbed by the body.

Jack: Edward, Edward, always thinking, with his logic shoddy.

Edward: Apparently these pills don't improve politeness!

Jack: Or make me feel contriteness.

Edward: Wait a minute! Let me see those pills.

Jack: Sure, if what you seek are thrills.

[Jack reaches into his pocket, pulls out the vial, and hands it to Edward. Edward reads the vial's label.]

Edward: Aha! These aren't prose-ack pills, Jack; they're prose-lack!

Jack: So I misread. Why the flack?

Edward: Oh dear. It says right here on the label, ‘Prose-Lack: Stay out of the hearse while speaking in verse.’ Oh dear!

Jack: There's nothing to fear
It's made all so clear
Directions are simple and terse!

Edward: This is awful—

Jack: —But entirely lawful!

Edward: The effects are really taking hold. We should get you medical attention.

Jack: So it is I'm told. So it is you mention.

[Edward remains silent so as not to prompt Jack to do anymore rhyming.]

Jack: I once was attacked by a cat
It lay on the floor like a mat
I reached for its tummy
Which makes me the dummy
Though now I'm immune from chitchat.

Edward: Oh, no, limericks! It's no use. You really are stuck in verse.

Jack: It could be worse!

[A few more moments pass in silence.]

Edward: Say, Jack. Would you like an orange?

Monday, July 19, 2010

Humor

This is a post that is likely to get me in some trouble, if not now then at some future time. So be it.

I have a confession: I have a hard time accepting humor—both my own and others'. I'm not saying that I have a hard time getting humor. I am indeed quite capable of laughing and, at times, making other people laugh. What I'm saying is that I have a hard time pegging humor as a good thing or bad thing.

Most people, I suspect, think that humor is a good thing that should be encouraged—end of story. After all, laughing is enjoyable, is it not? But perhaps most people are wrong. Here is my simplistic theory of humor that challenges the humor-is-a-good-thing idea: on the whole, humor is a psychological tool by which a person makes himself feel better about a bad circumstance. This may sound strange at first until you consider that most of what we find funny is related, at least in part, to something that causes us pain or discomfort. There are the obvious cases, such as slapstick. Slightly less obvious is sarcasm. Other cases are not so clearly connected; however, reflect upon how many times you've laughed at something good happening to someone. Rather, if you're like most people, what makes you laugh is folly, pain, embarrassment, etc.

Reinforcing my simplistic theory of humor is my observation, made over the course of about a decade or so by now, that most habitually funny people are also habitually sick—in the psychological sense. Many of the most frequently funny people I know are ones who mostly frequently don't have their lives together and are, internally, lonely or otherwise discontent people—e.g., bad childhoods leading to bad adult habits. It seems to me that humor is a dangerous coping mechanism.

On the other hand, it does feel good to laugh. Doubtlessly, if humor is a coping mechanism, then nature has endowed humans with it precisely because it is a workable coping mechanism. A coping human has better survival fitness than a non-coping human, it would seem.

However, why not forgo coping altogether and work through fixing the root causes to one's problems in the first place? Perhaps this is simply too difficult to accomplish and humor is the best alternative. I don't know where to stand on this one and can see it both ways. Maybe bad habits are not so bad after all and life should be taken and appreciated, through whatever coping method necessary, one day at a time. But should bad habits be encouraged? Why not be better if you are capable? Shrugging off humor—at least its defensive forms—seems like a good first step to getting one's house in order.

Maybe some common ground between these two positions is benign humor, the kind that is not based on things related to pain or discomfort. Take as an example silly word play. Here's one for you: what letter of the alphabet is most confident? Answer: Certainty. Get it? Wait, why are you groaning? I assure you that joke has no pain associated with it at all!

Thursday, July 15, 2010

The Human Bubble, Reprised

Rookie: Hello, Mr. Bishop.

Mr. Bishop: Hello, rook.

Rookie: Say, I've been thinking about our conversation about bubbles and in particular about the idea that the current low birthrate is itself a bubble. I've decided I don't follow your logic fully.

Mr. Bishop: How so?

Rookie: Your argument went, in summary, that the current low birthrates of industrialized societies are, firstly, insufficient to maintain population levels (or else soon will be) and, secondly, due mainly to the rising economic cost of raising children up to the standards of industrialized society. Even if parents' and potential parents' incomes remain as high as they are now, then, or so you argue, the rising cost of child raising leaves less income disposable to other purposes. Your conclusion is that everyone having, on average, less income available for non-child-raising purposes will lead to a deflationary spiral that, presumably, will collapse the high-cost-of-children bubble.

Mr. Bishop: Yes. What is your objection to the argument?

Rookie: Firstly, I'd like to object that you're assuming incomes will not continue to increase. What if they do?

Mr. Bishop: Then the bubble is merely prolonged, that is all. I suppose we could speculate that incomes will inexorably rise to infinity and we'll all have Star Trek replicators that create limitless wealth for every individual, but I for one imagine that there is a real cap to recent centuries' income increases—at least for a “short term” that will likely outlast a typical human lifespan. Call it a local maximum, if you will.

Rookie: I figured you would say as much. I suppose that goes hand in hand with the idea that bubbles are difficult to time.

Mr. Bishop: Indeed. But if you already knew my response, then why did you pose the objection?

Rookie: I just wanted to make sure of the point. And because it's not my real objection. My real objection, which is a question, is this: how do you jump from parents' having less disposable income to deflationary spiral?

Mr. Bishop: I make the jump by assuming that a decrease in demand equates to deflation.

Rookie: I assume that by “demand” you are referring not to how much a good or service is desired or wanted but instead by how much customers are willing to pay for it. Am I correct?

Mr. Bishop: Yes, you are correct.

Rookie: And so you're suggesting that without a continuing, sustaining increase in income, which happens to be the point at which the bubble pops, the rising cost in raising children and the subsequent decrease in disposable income will decrease demand, on average, for all goods and services not having to do with raising children.

Mr. Bishop: Exactly. A lower birthrate due to economic factors is necessarily self-limiting.

Rookie: Wait a minute, here. First of all, how does a decrease in demand equate to deflation? Why couldn't it lead to inflation? Why not have the banks monetize the world's debt, so to speak, and have the government mail a million million dollars to every citizen? In that case, you'd still have, on average, non-increasing incomes (in real terms, which is what we're interested with here) and decreasing disposable incomes (again, in real terms), yet you'd have exactly the deflation's opposite: inflation.

Mr. Bishop: Not really. In that case, you'd have hyperinflation, which is not the opposite of deflation. Though obviously dissimilar to deflation in other ways, hyperinflation is similar in that it destroys monetary wealth. And that's my main point: lower birthrates will eventually lead to the destruction of monetary wealth and thus self-limiting.

Rookie: Okay, I get your point about not being too hung up on the method that monetary wealth is destroyed but rather focus on that monetary wealth will be destroyed someway or another. Here's another objection, though: why can't both incomes and child-raising costs level off and stabilize?

Mr. Bishop: I suppose that's possible, but it's so unlikely as to have negligible odds. Dollars spent towards raising a child are seen, sometimes directly and more often indirectly, as an investment with the intended end result of creating a productive and self-sustaining adult. There exists a constant race, cumulatively, towards outdoing your parental peers, or at least keeping up with them, and this pressures child-raising costs upwards. If total child-raising costs stagnate, then it is because the cost per child continues to increase and the birthrate has decreased, which is exactly what we're seeing today.

Rookie: So you're saying that, on the one hand, a lower birthrate will lead to the destruction of monetary wealth but that, on the other hand, parents feel a continuous pressure to keep up with or even outdo other parents, expenditure-wise.

Mr. Bishop: Yes. Hopefully, it's obvious that that is necessarily self-limiting.

Rookie: It does bring to mind how despite the cost of college outpacing inflation, people today generally regard college as a better investment than ever before. Usually their word for it isn't “better” so much as “necessary”.

Mr. Bishop: Indeed. That's a good example of some irrational bubble-thinking that's going on these days. As a college education becomes more expensive relative to average income, its value as an investment drops substantially. You don't think most people go to college to learn, do you?

Rookie: Your last sentence might be a bit too cynical for my taste, but yes, I agree that college's viability is largely determined by economic wherewithal—thus, treating college as a means to an end—rather than being determined by idealistic notions about the intrinsic value of education.

Mr. Bishop: Indeed, I wonder how many people saddled with immense student loans and income-earning prospects worse than those of a plumber are beginning to question the value of their degree. And it's not just the cost of college in money; there's also an associated opportunity cost, as measured in time, which is not so insignificant as to be discounted entirely.

Rookie: So are you suggesting that a college education will be less common in the future?

Mr. Bishop: Yes, though this is a big, multi-generation bubble and will take a long time to pop. Also, people do not always act rationally and prudently. Possibly already we've reached the inflection at which a college education is no longer worth it, financially speaking, but people may continue pursuing it for a long time for the perceived prestige and social-class-elevation it awards them. Also, sometimes people within groups lack imagination, and this stifles change.

Rookie: Surely there's room in that cynical heart of yours for supposing that people might, just might be pursuing a college education for improvement of the mind and soul!

Mr. Bishop: Have you not seen the tripe that constitutes Internet dialogs these days? Most of this supposedly originates from college-educated brains. Where's the improvement?

Rookie: An ironic and self-referential point taken all too well, I'm afraid. So college-as-a-bubble is likely one manifestation of the lower-birthrate bubble?

Mr. Bishop: Yes, though another way of looking at it is that popping the college bubble might lead to a partial relaxing of the low-birthrate bubble. But a long-standing tradition or way of thinking can be hard to break. It's difficult not to extrapolate onto the future the trends of the past. Say, how about I promise to give you $1 million in thirty years?

Rookie: That sounds great! With that money, any children of my own will surely make fine plumbers! … Though, I suspect that you're not going to keep your promise.

Mr. Bishop: Indeed, I won't. You've demonstrated aptly an understanding of how someone making a promise about paying money at a later date does not necessarily make it so.

Rookie: Only the most gullible believe otherwise.

Mr. Bishop: You would think that, and yet how many people are pursuing government jobs for the security of a stable and secure retirement package decades later? This despite the fact that governments are dangerously broke.

Rookie: Another bubble, I presume?

Mr. Bishop: I think so. It has many of the signs of a divorce from fundamental value. People are trusting the authority behind the promise and not looking into the feasibility of delivering on that promise.

Rookie: Sure, I understand that there are many bubbles out there waiting to pop. Some will happen soon; some won't. I guess we could sit here and discuss that whole heat-death-of-the-sun thing that's due in a short 4 billion years, too. That looks pretty formidable. But isn't there a point at which increasing one's foresight returns little real value in return? At what point should a person simply stop worrying so much about tomorrow and take things as they come?

Mr. Bishop: Ah, a foresight-and-planning bubble!

Rookie: Oh dear …

Monday, July 12, 2010

Acceptance

At the beginning of this year, I resolved to see no more than two movies in the theater for 2010. I made the new year's resolution on something of a whim, wanting to spend less time and money on mainstream and passive entertainment. So far I'm on track to meet my goal; yesterday I saw, with Laura, my first in-theater movie for the year, Toy Story 3, which I suppose qualifies as an if-you-see-only-one-movie-this-year kind of movie.

However, I haven't made a similar cut in my video-movie watching habit. On the walk back to my apartment from the movie theater yesterday, I suggested to Laura that we stop at the leasing office to see if they had available any movies we'd like to watch. After perusing the DVD-case spines for a few minutes, Laura suggested Eternal Sunshine of the Spotless Mind. We'd both seen seen it already, though separately, and after listening to me rave about the movie several times—I'm told that I'm likely to repeat myself about a great many things—Laura figured it would be interesting to watch it together. And maybe we will.

Eternal Sunshine is one of my favorite movies of all-time, and I can tell you the exact reason for this. I think the movie captures a mood and meaning that is difficult to capture on screen: acceptance. For those of you who haven't seen the movie or otherwise don't remember, Eternal Sunshine is about a guy in his mid-30s named Joel, played by Jim Carrey, who elects to have erased his memory of his recently ended romantic relationship with girlfriend Clementine by using a new medical procedure. A good chunk of the movie takes place within Joel's mind and acts out the memories that are being erased, thus showing us Joel's and Clementine's relationship with each other. As the movie progresses, Joel realizes that despite the pain he feels from the relationship and its breakup, he doesn't want to lose his memory of it and her after all. Though unconscious during the procedure, he resists the memory-erasure but ultimately finds no way to stop it. Eventually, he comes to accept the looming loss of his memory, enjoying for the last time his remaining, fleeting memories of Clementine before they are gone forever.

Death happens a lot in film. The average lifespan for movie characters measures probably in mere hours or days. With such an abundance of death, it takes small quantities to heighten the poignancy of it. In the case of Eternal Sunshine, it's a mini-death of two years' worth of romantic memories erased. Yet it's sharp, this collision between tragic and irrevocable. And between the two is the human condition of acceptance.

Thursday, July 8, 2010

Friday Morning Ride

Tonight I have no prepared blog post. Rather than writing my regularly scheduled Thursday piece this evening, I instead opted to do some sorely needed maintenance on my bicycle before tomorrow morning's ride. These things happen. At least tomorrow morning my bicycle won't squeak like a hamster cage as I'm lapping around the mini climbs of South Camel.

Friday Morning Ride is not one that I do regularly, not like Tuesday and Thursday mornings' Hour of Power ride. Thursday evenings have a way of slipping away from me, and too often I end up staying up too late to wake up early enough to put in enough time on the bike to make the whole ordeal worthwhile. But when I do do FMR, it has always been well worth it.

The ride is a reminder that I am fortunate to live in a good spot. Just over five miles from my apartment are the five mini climbs of South Camel. These are steep climbs of about 200ft each, and they twist up, down, and around the ritzy houses built into the slopes of Camelback Mountain. These climbs are perfect for interval training, and they're less than a twenty-minute ride from my home.

The FMR starts (and finishes) farther south in Tempe and makes its way to Camel. There, the group treats each little climb like a stage, with the first rider to the top overtly the winner. After regrouping with the stragglers, the group races down the just finished climb and up the next, and so on through the circuit of all five climbs—except during winter, when the group truncates the ride to only the first four. Five climbs, five winners.

When I do FMR, I like to go out a little early, ride the circuit alone, and then join the group. Now that I ride often with a heart-rate monitor, I know quantitatively what I long since have known qualitatively: riding with others brings out my best performance. Sometimes my efforts in the group end up being the hardest efforts I make all week—minutes long sessions of all-out strength and suffering. Though I haven't managed it often, it's a thrill beyond words to reach those final meters of a climb ahead of every other rider in the group and to enjoy a moment on top of the world—even if my world entails only a little mountain in the middle of a big city.

Monday, July 5, 2010

Dispersal

I'm in Houston with Laura for a few days visiting my family and not doing much by way of writing, so I'm trying to rush to completion this post in the waning hour and a half remaining for the day. In it, I'd like to rough out an idea that's been on my mind recently.

Hindsight is 20/20, and foresight is 50/50. Even so, I like to spend a lot of time in the future, thinking about it and planning for it, and readers of Just Enough Craig should know that that I assign a likely possibility to the following two speculative ideas about the future.
  • Energy is going to be more expensive, in real terms, in the foreseeable future than in the present.
  • Passive monetary investments are going to return, on average, little (if anything) in real terms in the foreseeable future (unlike in the past).
It turns out that starting with only these two premises—which, no, I'm not going to defend here—there's quite a lot of interesting conclusions about the future that a person may derive. Today, there's one particular such conclusion I'd like to share.

Here's the thought progression. Passive monetary investments are going to perform poorly, so most middle class people will feel themselves squeezed financially. It once was that a dollar spent in retirement could be accounted for by saving a small fraction of a dollar and making up the difference through investing, whether that investment was actively controlled by the individual or passively controlled, like in a company pension or Social Security benefits. If passive monetary investments perform poorly, then a dollar spent in future retirements will necessarily stem from saving about one dollar and investments accounting for nearly nothing except as a way of storing (protecting) monetary wealth.

Most people are not saving at anything near a rate that will allow them to spend a dollar for each dollar they save and live a lifestyle like what they expect, based on the implicit social conditioning of their affluent younger adulthood. It doesn't take great skills in mathematics to realize that if one expects to work for forty years and retire for twenty and maintain the same level of consumption for all sixty years, then without passive monetary investments making up the difference, a person must be saving one dollar for every two dollars that they spend—for forty years! This is a person earning $1000 per week (after taxes) and saving $333. Throw in that most people, I suspect, won't be happy still working past their mid-50s, which is to say that the forty-twenty split is a modest proposal compared to what most people dream, and I think we have here a recipe for (the perception of) widespread old-age destitution in coming decades and, consequently, general social and political instability.

Now, it happens to be that I think that passive monetary investments will perform poorly because energy will be increasingly expensive. However, rising energy expenses will further shape coming destitution in ways that many people, I suspect, haven't yet begun thinking about. One such way is that transportation will be hit disproportionately hard and that, between transportation supply decreasing due to energy being less available (the flip-side of rising energy costs) and transportation demand decreasing due to decreasing affluence of the middle class, there will simply be a lot less transportation going on in the future. And this, finally, brings me to my main point: we, as not-yet-old adults looking ahead to the future, should begin rethinking family dispersal in a serious way.

Family dispersal is the social trend of middle class grown-up offspring moving far away from their parents and family, setting up independent lives and relying upon their money-earning (and money-protecting) skills to eke out a comfortable and happy existence. This is a trend that worked well in the 20th century because money was a good gig then, as the next year generally brought us more material wealth than the previous one. However, in the case in which we accept our two initial premises, where we can expect the next year to be generally no better than the previous year, then people who are able to profit from the non-monetary benefits of close relationships will be in an advantageous position over those who cannot.

Currently, many people, such as myself, rely upon their career specialization for production and paid-for goods and services for consumption. As the money supply dwindles, in real terms, all but the eternally lucky few will increasingly need to de-specialize to “fend for themselves” more, so to speak. One great way to de-specialize is by forming solid, close relationships and entering into the “reciprocal economy,” as it's sometimes called--people helping each other out. The closest, most solid of relationships during hard times are often familial. Reciprocity is negatively impacted by distance. That is, distance adds friction cost to reciprocity. Living far from those you're related to may be a bad thing in the future.

It's often true that people do poor planning when times are good, as if, as it's been said, rising prices act as a narcotic and impair good judgment. I think it's likely that familial dispersion is one such form of poor collective judgment.

Thursday, July 1, 2010

Spiraling

One of the oft-raised technical questions concerning evolutionary processes is how they can occur within the constraints of the laws of thermodynamics when, at face value, those laws suggest that the universe should be becoming more disorderly, not more orderly. The oft-stated answer to this question is that the universe is becoming more disorderly, evolution included. Only, the universe is developing relatively small pockets of evolved, increasing orderliness at the expense of creating bigger spaces of increasing disorderliness elsewhere.

Of course, most people who ask the question aren't interested in evolutionary processes in general. They're asking about the evolution, the one that entails the origin of species. Here on earth, biologic evolution continues to play within our wonderful biosphere because out there in space, about 150 million kilometers away, a giant mass of half hydrogen, half helium plasma is running itself down, burning through its nuclear store of free-energy hydrogen much faster than we living things here on earth are using the leftover free-energy light resulting from that run-down process.

All this explains sufficiently “how” but does not answer “why” anything would evolve towards greater complexity. Couldn't the universe burn itself out as-is without resorting to having things pursue an upward spiral of complexity?

In the previous post, I explained a bit about Eric Chaisson's concept of normalized energy flows. Chaisson is defining complexity in terms of normalized energy flows. This concept doesn't directly answer the “why” question, but it does tell us that with the universe's non-uniform distribution of entropy creating regions of higher normalized energy flows, these regions are, both by definition and by common observation, more complex.

There's both top-down and bottom-up pushing going on here. A higher normalized energy flow within a system allows for greater heterogeneity of that system's parts and more diversity of interaction between those parts and therefore greater overall system complexity. On the other hand, systems possessing greater complexity are more enabled than systems possessing lesser complexity to exploit existing energy flows. This is because systems of greater complexity have, in general, greater potential for adapting to big changes than do simpler systems.

For example, this entity we call “Craig” is composed of over 200 different types of cells, all interacting in myriad ways to allow Craig to behave in such ways that cause him to consume much more energy (in the normalized-energy-flow sense) than do most other (non-living) entities in the universe. The orderliness of his body allows him to behave in a more dynamic and nuanced fashion than most other entities in the universe and to seek out and process greater (normalized) quantities of energy. This is bottom up. On the other hand, Craig's metabolic rate, which is on the order of 104 erg/g/s, allows him to keep alive and flourishing over 200 different types of specialized cells, all interacting with each other in those myriad ways. This is top down.

The dualism of bottom-up and top-down pushing suggests that evolutionary processes within the universe are not merely driven by greater normalized energy flows but are driven towards greater normalized energy flows. Greater normalized energy flows allow for greater complexity; greater complexity allows for greater exploitation of existing energy flows. And so on it goes, the upward spiral of complexity, the upward spiral to complexity.

Here lies our hint of “why” evolution occurs. Evolution is the process by which the universe seeks out and exploits free energy that is otherwise “locked up” and unreachable by too-simple processes. For example, that giant mass of half-hydrogen, half-helium plasma that's running itself down happens to be emitting outwardly in all directions, as waste product, vast quantities of electromagnetic radiation. Through eons of slow and haphazard change, molecules here on earth hit upon a winning combination, in the form of a chloroplast organelle, that converts a small fraction of locally available electromagnetic radiation into more immediately useful chemical energy. There's no simple way to accomplish this feat; one microscopic chloroplast itself comprises a vast complexity of form and function. Unlocking the free energy radiating away from the sun requires complexity. Once that free energy becomes unlocked, however, even greater complexity can be built on top, using photosynthesis as a base to stair-step to ever greater complexity.

Evolutionary domains stair-steps upwards in complexity so long as there exists (1) enough immediately reachable free energy to power the evolutionary process (e.g., mating and mutation) and (2) that evolutionary process hits upon a workable manifestation of complexity to exploit free energy that was previously locked up from the simpler systems. In other words, evolution towards complexity is merely one process by which the universe maximizes entropy. In this case, it unlocks order that cannot be released by simpler systems, much like how a boulder resting atop a hill but in a small rut requires a hefty shove to release the even greater amount of potential energy in the boulder.

While I wear the push-down hat of complexity and evolution, I'll note the following example. Modern industrial civilization, with its vast consumption of fossil fuels and its order-of-magnitude greater normalized energy flow than any other form of civilization prior to it, can be roughly simplified as the natural result of the universe seeking to unlock the great quantity of stored sunlight captured within high-energy carbon bonds buried beneath the biosphere and otherwise unreachable by any other living thing on the planet. Life continued evolving different arrangements of complexity and eventually hit upon one form—us—that was able to capture fossil fuels and burn them for gain. Civilization itself stair-stepped upwards in complexity by developing ever more complex methods of extracting fossil fuels. The first oil wells, for example, were tens of feet deep. That low-hanging fruit is gone, and now we drill thousands of feet in precarious and sensitive areas. This development of ever more complex methods of extracting fossil fuels both pushes-down and pushes-up with civilization becoming more complex, and so on goes the upward spiral of complexity, the upward spiral to complexity.

However, it's important not to conflate “evolution” with “progress”. The upward spiral continues only so long as there exists ever greater quantities of free energy that are exploitable for a substantial energy profit. As the system's complexity begins to yield less energy profit than it did previously, such as by depleting the low-hanging fruit, that decreasing quantity of energy profit necessarily fails to support the existing level of complexity, and the system then enters into a downward spiral towards simplicity.

If you've made it this far through this trilogy of complexity-oriented posts, I would like for you to read (or reread) a previous post of mine, The upward spiral of complexity. In light of what and why evolution is, and taking care not to conflate “evolution” with “progress”, I think the moral question posed in that post is important for individuals to ponder.