Market Turmoil, Just the Pregame for the Main Event?

Umair Haque today does a pretty good job of terrifying anybody who pays attention to the economy — see “Market Correction? Try Perma-Crisis.” According to Haque, if those in charge don’t do something to restructure their dysfunctional institutions, we could be “on the Express Train to the Federation of Banana Republics.” In such case, he thinks “today’s market turmoil is probably just the pregame for the main event.”

Haque says that about the current economic crisis:

[I]t’s fundamentally grounded in the institutions we use to (mis)manage the economy. They’re deeply broken, and throwing money at broken institutions doesn’t fix them — it does the very opposite: it entrenches them, shores them up, fortifies them against the future.

He outlines six lessons on crisis that help explain why the situation is self-perpetuating, including:

When people who are prisoners of the paradigm that caused the crisis are in charge of fixing it, bet on … more crisis.

AB — 5 August 2011

Rob Hopkins Response to Criticism of Environmentalism

My article this week at ThomasNet Green & Clean was on the fascinating, fast-growing Transition movement — see “The Transition Movement – Preparing for a World After Peak Oil.”

The “green movement” that seemed so powerful and dynamic just a couple of years ago has come under criticism recently, as you can see in Susanna Rustin’s recent article in the Guardian — see “Has the green movement lost its way?

Coincidentally, the Transition Network just concluded its 2011 conference in Liverpool. Co-founder Rob Hopkins wrote up his reflections on the conference in a blog post yesterday, and included a response to Rustin’s question:

An article in the Guardian last week asked “has the green movement lost its way?” I think that is the wrong question. The right question should be “has a new, emergent culture which embraces resilience and localisation, equity and partnership, even scratched the surface of its potential?” I think the answer is a resolute no. We’ve all had a taste of that this weekend.

Having written a great deal about innovation as analyst for the ILO Institute, insights like this get my attention. Innovations often come from unexpected quarters, when people begin asking new questions and asking questions in a different way.

AB — 12 July 2011

Can The Economy Keep Growing Without Destroying the Planet?

Over at ThomasNet Green & Clean earlier this week, I explored the topic of “Decoupling” as it applies to economic growth and its connection to environmental damage and the depletion of resources — see “Decoupling: Can Humanity Prosper Without Plundering and Poisoning the Planet?

The write-up extracts the essence from a report by the United Nations Environmental Programme (UNEP). The authors lay out the basic argument and data for decoupling. The report’s authors believe that innovation is the answer:

Innovation now needs to be harnessed for resource productivity and environmental restoration… innovations that contribute to decoupling through reducing environmental pressure and contributing to sustainability during economic activities.

AB — 10 June 2011

Are Speculative Bubbles Ever a Good Thing?

Over at Bubbleconomics, I wrote recently about the effect of speculative bubbles on innovation — see “Speculative Bubbles: Good for Innovation?

For a long time, I’ve thought that the so-called “Internet Bubble” from the 1990s was actually a good thing in many ways in that it sparked technology and business-model innovation and trained a generation in a new way of thinking about business and communication. Networking pioneer Bob Metcalfe agrees with me, as he says in a 2011 presentation:

We saw from the many Internet Era bubbles that investment, speculation, inflation, competition, and collapse are tools of innovators against the status quo. Bubbles accelerate technological innovation.

AB — 6 June 2011

Why People Don’t Believe Scientists Even When There Is ‘Consensus’

An interesting study, soon to appear in the Journal of Risk Research, by Yale law professor Dan M. Kahan and colleagues, suggests that people tend to disbelieve scientists whose cultural values are different than theirs.

I’m not able to determine when this study will be published, but you can find an abstract at this link, and I was able to download a preliminary version of the whole article in PDF by clicking on the link on that page that says “One-Click Download.”

These conclusions shed light on the debate over anthropogenic climate change, Kahan tells Science Daily (“Why ‘Scientific Consensus’ Fails to Persuade“):

We know from previous research that people with individualistic values, who have a strong attachment to commerce and industry, tend to be skeptical of claimed environmental risks, while people with egalitarian values, who resent economic inequality, tend to believe that commerce and industry harms the environment.

(For more on the climate-change controversy, see my previous entry, “John Abraham’s Point-by-Point Rebuttal of Climate-Skeptic Monckton.”

Kahan and colleagues based their study on the theory of the cultural cognition of risk. In his paper, Kahan says this theory “posits a collection of psychological mechanisms that dispose individuals selectively to credit or dismiss evidence of risk in patterns that fit values they share with others.”

The researchers surveyed a representative sample of 1,500 U.S. adults. They divided this sample into groups with opposite cultural worldviews, some favoring hierarchy and individualism, the others favoring egalitarianism and communitarianism.

They surveyed the respondents to determine their beliefs about what in fact is the scientific consensus on issues of climate change, disposal of nuclear waste, and concealed handguns, with particular focus on the associated levels of risk in each of those areas. Various statements were attributed to fictional personas portrayed as authors of books on these various issues. Respondents were asked to judge whether each author is really an expert or not.

Analysis of the results on the climate-change issue revealed that:

Disagreement was sharp among individuals identified (through median splits along both dimensions of cultural worldview) as “hierarchical individualists,” on the one hand, and “egalitarian communitarians,” on the other. Solid majorities of egalitarian communitarians perceived that most expert scientists agree that global warming is occurring (78%) and that it has an anthropogenic source (68%). In contrast, 56% of hierarchical individualists believe that scientists are divided, and another 25% (as opposed to 2% for egalitarian communitarians) that most expert scientists disagree that global temperatures are increas-ing. Likewise, a majority of hierarchical individualists, 55%, believed that most expert scientists are divided on whether humans are causing global warming, with another 32% perceiving that most expert scientists disagree with this conclusion.

The study revealed similar results around the issues of geologic isolation of nuclear wastes and concealed-carry laws.

So should we conclude that people are going to believe what they want to believe, and that’s all there is to it? The authors make an interesting statement about the implications for public presentation of scientific findings:

It is not enough to assure that scientifically sound information — including evidence of what scientists themselves believe — is widely disseminated: cultural cognition strongly motivates individuals — of all worldviews — to recognize such information as sound in a selective pattern that reinforces their cultural predispositions. To overcome this effect, communicators must attend to the cultural meaning as well as the scientific content of information.

The report suggests some ways that cultural meaning might be considered in communicating with the public. One such strategy is what the authors call narrative framing:

Individuals tend to assimilate information by fitting it to pre-existing narrative templates or schemes that invest the information with meaning. The elements of these narrative templates — the identity of the stock heroes and villains, the nature of their dramatic struggles, and the moral stakes of their engagement with one another — vary in identifiable and recurring ways across cultural groups. By crafting messages to evoke narrative templates that are culturally congenial to target audiences, risk communicators can help to assure that the content of the information they are imparting receives considered attention across diverse cultural groups.

AB — 24 Sept. 2010

John Abraham’s Point-by-Point Rebuttal of Climate-Skeptic Monckton

[Updated 16 July 2010]

Yesterday I reviewed an informative presentation by John P. Abraham, associate professor in the school of engineering of St. Thomas University in Minnesota. In his presentation, “A Scientist Replies to Christopher Monckton,” Abraham offers a point-by-point rebuttal/refutation of claims made in a presentation he attended by Christopher Monckton, in which Monckton presented arguments against anthropogenic (man-made) global warming (AGW), that is, the idea that human activity is causing an increase in global temperatures resulting in dangerous climate change.

Monckton is Chief Policy Adviser at the Science and Public Policy Institute (SPPI) and is well-known as a critic of anthropogenic global warming. (See one of Monckton’s slides referenced by Abraham, to right.)

Though long (it’s a 73-minute Flash presentation with voiceover), Abraham’s critique of Monckton is well worth reviewing, especially if you’ve been wondering about the emerging criticism of AGW and the general scientific consensus on climate change.

[Update added 16 July 2010]: A reader (see his comment below) has kindly pointed me to Monckton’s response to Abraham’s presentation. This is in PDF format and is very long — his answer is in the form of a series of questions (500 of them). See “Response to John Abraham, by Christopher Monckton.”

I have to say that, although I tend to agree with the consensus position in this case, just because most or even all of the experts in a certain field believe the same way, I don’t think others should be obligated to follow the crowd. And those who do accept the consensus point of view should be willing to keep their convictions on the table and to re-examine matters when new information becomes available.

To say that those who question claims of climate-change are “anti-science” or to call them “deniers” (as if their challenges were somehow akin to denials of the Holocaust) is disingenuous and counter-productive. It gets people arguing about all the wrong things, instead of communicating and working on problems.

In the case of the challenges to the climate-change consensus, science itself is not being called into question. The real issues have to do with things like politics, public policy, economic philosophy, and ideology. If people’s livelihoods and the well-being of their descendants are in play, isn’t it reasonable to allow them to call into question the conclusions and policy implications of those who evoke climate science as justification for their policy recommendations?

Also, it’s reasonable to point out that scientists themselves are humans with their own foibles, and while for the most part they might believe they are carrying out their work according to well-established principles and sound procedures, some of them have shown themselves to be influenced by self-interest, greed, and ideological leanings. So if their work is financed with public resources and being used to influence policy, isn’t it reasonable to expect their work – and especially their statements about its implications – to stand up to public scrutiny?

If researchers and institutions are convinced that anthropogenic global warming is a real danger, then it would behoove them to find ways to present the evidence in an accessible way, rather than just sticking their noses in the air and spouting arrogant put-downs of those that raise questions.

That brings me to the value of John P. Abraham’s presentation.

Sample slide from Abraham presentationI found Abraham’s presentation reasonable and level-headed (see one of his slides to right). He refrains from personal attacks. Abraham analyzes Monckton’s scientific references, charts, and assertions in detail. Where available, he examines the data sources for Monckton’s charts and the papers he references. He even wrote to the authors of many of the original papers to ask for clarification when needed and shows their replies in his presentation.

Abraham’s presentation is really produced as a point-by-point refutation of Monckton, but along the way you learn a lot about climate change and the associated data. Pretty easy to follow, for a non-specialist reader with a fair understanding of science.

“My goal,” he says, “is to show people how they can learn about the scientific understanding on their own.”

The questions he addresses include:

  • Has Al Gore really overestimated the future sea-level rise by 100 times, and is it really true that sea levels are not rising?
  • Are polar bears in the Canadian Beaufort Sea really endangered by warming temperatures or not?
  • Was there a medieval warming period comparable to that taking place today, and did the IPCC “erase” that medieval warming period from its historical climate data?
  • Do IPCC’s climate sensitivity estimates really rest on just 4 scientific papers, rather than 2,500?
  • Have average temperatures actually been going down, contradicting IPCC projections?
  • Is there really no evidence for any catastrophic effects of anthropogenic climate change anywhere in the world?
  • Is it really true that increase in CO2 levels is an effect of warming rather than a cause, and is it really true that CO2’s effect on global temperature is negligible?
  • Is the extent of arctic sea ice actually remaining steady rather than declining?
  • Has the Greenland ice sheet really been increasing rather than decreasing?
  • Is it really true that the Himalayan glaciers have not been retreating?
  • Is it really true that oceans are not heating up?
  • Is it really true that global warming is caused by increased solar activity, rather than human activities?

If these kinds of questions concern you, I encourage you to review Abraham’s presentation.

AB — 29 June 2010

One Reason Youtube Is a Great Resource: Khan Academy’s 1,200 Educational Videos

Many people think of YouTube as a big time-waster with nothing but videos of animals dancing and guys getting whacked in their privates.

But as time goes on, I become more and more conscious YouTube as a great resource in many respects. For example, in my work as a writer and analyst, I’ve been making good use of corporate videos on YouTube, where it’s possible now to access in-depth presentations by company executives, scientists, and other experts.

Thanks to a mention yesterday in Boing Boing, I’ve learned about Khan Academy, which now has over 1,200 educational videos on YouTube. Using a very simple “chalk talk” format, Salman Khan, an engineer and manager, provides 10-20-minute video presentations on a huge variety of topics, including science, history, math, finance, economics, and more.

These videos would be useful as quick reviews or knowledge fill-ins for students, both adult and child, or for parents who are trying to help their kids with their studies. I also find them useful as a writer who needs to be able to get up-to-speed quickly on economics and finance topics.

Khan creates his videos on a tablet computer with pen input. Here’s an example of a video explaining the basics of banking:

AB — 8 June 2010

Developing the Internet of Things and a Smarter Planet

A conversation earlier today with some of the innovation folks at IBM about their Smarter Planet initiative has got me revisiting some research we’ve done at the ILO Institute on a concept know as the “Internet of Things.” The essential idea is that objects in the physical environment around us are increasingly being embedded with networked technology, interacting with the larger network, and creating data. In fact, a video by IBM (shown below) suggests that there already might be more objects connected to the Internet than people.

I first encountered the Internet of Things concept in 2006 working on a report on the future of RFID (radio-frequency identification). RFID is a technology used to embed miniature wireless communications in objects of all kinds, such as packaging, boxes, equipment — even humans and animals. At that time I was in touch with some people working on the Internet of Things concept at MIT.

Charles Murray of MIT’s Auto-ID Center had written in Design News that “RFID will be the backbone” of this Internet of Things, “in which almost everything, large and small, is connected via the Web.”

In our 2006 report we wrote:

On a product level, says Murray, each item would be tagged by “a sort of Web page for each item” coded in HTML. “Thus, all products could be identified anywhere, instantly.” Plans include migrating from sticky tags to RFID devices embedded in cardboard cartons during the manufacturing process.

Murray speaks of this emerging Internet of Things in terms of the supply chain. However, the eventual possibilities go far beyond keeping track of products for supply chain management. If miniature Web pages and servers could be embedded in building materials, components of vehicles and aircraft, furniture, appliances, apparel, and other places, this could have huge implications for marketing, communication, and provision of services, not to mention changing the very nature of the world around us.

Wanting some further insights, I had a phone conversation with MIT’s Sanjay Sarma, an RFID expert at MIT. Sarma stressed the impact the Internet of Things will have on business:

MIT’s Sanjay Sarma tells ILO researchers that this Internet of Things is “going to have a huge impact,” and that RFID is one of the key enabling technologies. He points out that RFID creates a greatly increased connection between the physical world and the world of information by connecting more data to physical things and transferring it at much greater speeds in much greater volumes. “We used to connect data to the physical world through keyboards, but there’s only so much data you can get in through the keyboard. But with RFID it’s automatic and it’s happening all the time.”

Sarma says that the Internet of Things will allow you to “have control in your enterprise in a way that is completely unprecedented.” Sarma calls this control “high-resolution management—management with eyes everywhere, as opposed to management by gut reactions and guesswork.”

Earlier this year, we completed a report on how the Smart Grid is likely to affect the shape of the electric utility business in the future. If the smart grid initiative rolls out as anticipated (and utilities are working on this very aggressively right now), the electric grid in the U.S. will be transformed from the traditional century-old dumb one-way transmission utility into what Thomas Friedman has called an “Energy Internet” (see his book Hot, Flat, and Crowded, chapter 12, “The Energy Internet: When IT Meets ET”).

Under the Energy Internet paradigm, networked technologies will be embedded all through the electricity delivery system — in control facilities and substations, in smart meters at homes and businesses, in home appliances that will shut on and off in response to grid conditions, in electric vehicles and their charging systems, in home-based generating systems that will sell electricity back to the grid, and much more that we probably can’t imagine.

Friedman maintains that the smart grid will enable “a great energy transformation.” On page 286 of his book, he outlines what this could mean for utilities companies:

Utilities, instead of limiting their vision from the power plant to your home electricity meter, would be wholly transformed. Their universe would stretch from the generation of clean power on one end right into your home appliances, your car battery, and even the solar panels on your roof. Rather than just being a seller of dumb and dirty electrons, it would be an enabler of this whole smart grid-Energy Internet system. And it would make money from optimizing this system.

In effect, Friedman maintains, smart grid will bring utilities, businesses, and consumers together into an interactive energy market. Taking the reader forward in time, he projects how such a market might function (pages 277-278):

[N]ow that we’ve moved to the Energy Internet – the smart grid – utilities can run your refrigerator or adjust your thermostat in line with when the wind is blowing or the sun is shining. It can match the supply with the demand. Therefore, it can use more of these renewable power sources at much lower cost. When clouds block out the sun or the wind dies down, the utility’s smart grid lowers demand by raising prices (so your SBB [Smart Black Box] decides not to do the laundry then) or by adjusting your home temperature settings. And when the sun is shining brightly and the wind is howling, the utility runs your dryer at the lowest price. So there is now a direct correlation between how smart your grid is, how much energy efficiency it can generate, and how much renewable power it can use.

…. When the smart grid extended into a smart home all the way to a smart car, it created a whole new energy market on the other side of your electric meter. In the old days, there was no market beyond the raw dumb electrons that came into your house. Everything stopped at the meter, and you just paid the price calculated at the end of the month. But once your appliances became smart, and a Smart Black Box was introduced into your house, a market was also created beyond your meter and throughout your home, and, more broadly, inside every factory and business around the country.

How will the Internet of Things, a Smarter Planet, transform the world? My guess would be that what eventually emerges will surprise us all. As humans, our predictions tend to be vastly oversimplified. In our smart-grid report, we wrote,

It is good to remember that 20 years ago, experts were referring to the Internet as an “information superhighway” – not wrong in itself, but a vast oversimplification. How many pundits at that time could have foreseen today’s massive World Wide Web and e-commerce activity – not to mention Google or Facebook?

The implication, then, is that utility companies need to become generators not just of power but of innovation – watching for potential new ventures and business models that will surely arise out of such areas as smart-metering, electric vehicles, and renewables. Utilities need to start now building the organizational capabilities necessary to exploit the opportunities that will emerge in this networked energy marketplace – which means expanding R&D and internal venture funding, establishing entrepreneurial units and innovation teams, and building a new culture of innovation.

For some insights into the Internet of Things concept, I invite you to watch this thought-provoking video from IBM:

AB — 20 May 2010

Social Critics on Social Darwinism: How Rushkoff and Wiker Converge

I recently completed two books by two very different authors, Douglas Rushkoff and Benjamin Wiker. However, the serendipitous fact that I read them one right after the other brought home to me some intriguing commonalities between the two, focusing particularly on the widespread societal effects of social darwinism.

The two books are:

Although I suspect that these two authors would be very far apart on political issues, my reading of these two books in juxtaposition emphasized two interesting commonalities:

  • Both authors comment on the origins and dangers of social darwinism.
  • The two authors both focus their historical analyses on roughly the same time period, from the Middle Ages to the present day.

In writing the above, I also came to an interesting realization on another more-subtle commonality: Wiker starts with the classic cynical treatise The Prince, by Niccolo Machiavelli. Rushkoff starts with the Middle-Age “princes” who created the corporation and imposed central currency in Europe.

Rushkoff’s premise is that the aristocracy in the Middle Ages devised the chartered corporation as a legal mechanism to give them control over commerce and wealth. Because of their privileged status granted by government, corporations have progressively gained more power, even becoming legal “persons” over time.

Rushkoff’s criticism is that Western society has become steeped in corporatism, and that this pits individuals against one another in a win-lose competitive struggle. People operate according to unconscious corporatist values and assumptions about how life should be and are prevented from connecting in a natural way through communities.

Wiker’s premise is that modern civilization has been affected by a materialistic, atheistic philosophical tradition preserved and promoted by a series of highly-influential thinkers and their books, starting with Machiavelli, then Thomas Hobbes, Rene Descartes, John Stuart Mill, Karl Marx, Charles Darwin, Sigmund Freud, Margaret Sanger, Margaret Mead, and Alfred Kinsey, along with others along the way.

As I said, where I see an important commonality between Rushkoff and Wiker is when it comes to their implications and comments about social darwinism: The modern world is strongly influenced by the idea that the natural order demands that the strong survive and the weak die off.

Ruskoff writes,

Richard Dawkins’s theory of the “selfish gene” popularized the extension of evolution to socioeconomics. Just as species competed in a battle for the survival of the fittest, people and their “memes” competed for dominance in the marketplace of ideas.

Human nature was simply part of biological nature, complex in its manifestations but simple in the core commands driving it. Like the genes driving them, people could be expected to act as selfishly as Adam Smith’s hypothetical primitive man, “the bartering savage,” always maximizing the value of every transaction as if by raw instinct.

Ironically, says Rushkoff, religionists were used to promote a compatible economic regime:

Right-wing conservatives turned to fundamentalist Christians to promote the free-market ethos, in return promising lip-service to hot-button Christian issues such as abortion and gay marriage.

It was now the godless Soviets who sought to thwart the Maker’s plan to bestow the universal rights of happiness and property on mankind. America’s founders, on the other hand, had been divinely inspired to create a nation in God’s service, through which people could pursue thier individual salvation and savings.

Rushkoff contends that

What both PR efforts had in common were two falsely reasoned premises: that human beings are private, self-interested actors behaving in ways that consistently promote personal wealth, and that the laissez-faire free market is a natural and self-sustaining system through which scarce resources can be equitably distributed.

Wiker follows the development of atheistic social darwinism from Machiavelli, but he takes considerable time to establish the connection between Darwin and eugenics. On pages 88 to 89 of 10 Books he quotes from Darwin’s Descent of Man (not as well known as On the Origin of Species):

With savages, the weak in body or mind are soon eliminated; and those that survive commonly exhibit a vigorous state of health …. We civilized men, on the other hand, do our utmost to check the process of elimination [by means of various works of charity and relief]. Thus the weak members of civilised societies propagate their kind ….

If … various checks … do not prevent the reckless, the vicious and otherwise inferior members of society from increasing at a quicker rate than the better class of men, the nation will retrograde, as has occurred too often in the history of the world.

Wiker argues that the writings of Darwin and other atheistic thinkers have led to a modern world in which the weak are seen as expendable for the good of human progress.

At the end of his book, Wiker comments:

We are so fond of thinking of our progress from the simple savage that we forget to take account of whether we are really progressing in some sort of virtue or rather becoming more complexly and deviously savage.

We have a higher regard for health than our ancestors did, and a far greater knowledge of biology. But when biology, rather than theology, becomes the queen of the sciences, then Christian prohibitions against eugenics, the elimination of the unfit or the unwanted through abortion or infanticide, or the elimination of diseased races or classes all become merely “medieval” and irrelevant.

Rushkoff and Wiker approach their analyses with very different objectives and foci, and it would be far from accurate to say that they reach the same conclusions.

But both Life Inc. and 10 Books That Screwed Up the World shine light on some of the historical and philosophical sources of the great streak of heartlessness evident in the modern world.

In about 1970, I was picked up hitchhiking on I-85 in North Carolina by an older fellow driving a sedan. We got into a conversation about the problems of the world. From his point of view, one of the biggest problems was welfare and charity — all the giveaway programs that are supposed to help the poor.

I raised the question, Well, what are they supposed to do? Suppose they need help to survive and get back on their feet?

His response was, “Who cares? Let ’em die. That’s the way nature works.”

I wonder who he had been reading.

AB — 4 September 2009

The Hole in the Wall: Computing for India’s Impoverished

Below is a blog entry I posted a few years ago when I was working for TMCnet. I wanted to refer to it in an upcoming post, but it has disappeared from the TMCnet web site.

Transferred over on 31 March 2009 from Al Bredenberg’s VOIP & CRM Blog (linking here to the Wayback Machine’s archived version):

VoIP for the Developing World

Rich Tehrani wrote a fascinating blog entry today about the potential connection between MIT’s $100-laptop program and the future possibilities for VoIP in developing countries. See his essay at:

VoIP Helps the Needy

In part, Rich writes:

… imagine if there was a way to get computers into the hands of more children. What would this do for the world’s developing nations and how would it help children? Imagine they would now be able to compute inexpensively and have access to the Internet and also speak for free with others.

This is a huge deal because in many parts of the world there aren’t telephones or even telephone lines. Many children don’t even understand the concept of the telephone. What if we could get them to access the web, allow them to compose documents, blog and talk for free? What an amazing world that would be. What an exciting place to live. What a more interconnected planet we would live on.

This reminds me of the fascinating story of “The Hole in the Wall,” which I heard about a couple of years ago.

Sugata Mitra, a computer scientist in India, decided to place a computer with a high-speed Internet connection in a hole in the wall that separated the high-tech company he worked for from the slum next door. He found that the kids from the neighborhood, who had never seen a computer, very quickly figured out how to use it and how to perform complexe tasks over the Internet. The last I heard, he was institutinga program making public-access computers available in poor neighborhoods in many areas of India.

One of the incidents I recall from the story was that a reporter asked one of the kids how he learned to use a computer so well, and the kid answered, ‘What’s a computer?’

AB — 10/3/05