It’s Localized Supra-National Organizations via the United Nations That’s Working, Not the Free Market

Disclaimer:  I am now retired, and am therefore no longer an expert on anything.  This blog post presents only my opinions, and anything in it should not be relied on.

I have many things I should be doing rather than writing this, and many things I’d rather be doing.  I’m writing this because I think it needs to be said.

There is a debate going on between, essentially, Steven Pinker on the one hand and Jason Hickel the anthropologist on the other about the nature and extent of poverty, and to what we should ascribe its effects.  To support the case for, essentially, “enlightenment” plus today’s economic system, Pinker points to a chart showing that extreme poverty has decreased from 95% of the world’s population to 10% over the 200 years from 1820 to now.  Hickel challenges that rosy view by pointing out that (a) extreme poverty is not the right metric, since people in “poverty” are also struggling to survive, and there the picture is much more mixed, (b) that because of population growth, while the percentage of people in extreme poverty has gone down drastically, the actual number of people in extreme poverty is increasing, and (c) the metric itself (money) is flawed, since a pre-monetary society may actually become worse off when switching to money, wiping out the gains accrued once the monetary society is established.

To my mind, the key takeaway from the chart is none of the above.  What it shows (and other related charts here and in Sachs’ Age of Sustainability also show) is that there is a sharp break around 1950.  Before, extreme poverty was headed towards a reduction to about 60% of the world being extremely poor by now.  Beyond that inflection point, extreme poverty, vaccinations, education, literacy, and health take a sharp dip or start climbing much more rapidly.  

So what’s causing this?  We can eliminate Pinker’s main suspect right off the bat.  It’s not the Industrial Revolution.  It’s not the free market, because that has not resulted in any faster rise in global productivity and hence GDP from 1950 to 2019 than from 1870 to 1950 – in fact, since the late 1970s productivity improvement rates in developed economies have been decreasing.  And “Unruly Waters” makes it clear that the positive effect of the Green Revolution on India’s and China’s well-being – India and China are responsible for a major chunk of the improvement in extreme poverty percentage, partially because of their population sizes – was much less than is typically portrayed.

Sachs and “Unruly Waters”, among other sources, paint a picture in which better health, more education, and potentially empowerment of women (two of which slow the growth rate of population that can undercut improvements in individual living standards) directly impact extreme poverty.  These seem to be far more persuasive immediate reasons for the dip.  But where do these improvements come from?  There have certainly been efforts at improved literacy and better global health before 1950, and free-market products that promised both, and even individual and government efforts in the same direction.

It’s the UN, NGOs, and Local Governments Working Together, Stupid

The history especially of U.S. foreign aid is very clear on this point.  US foreign aid has typically been driven both by internal political considerations and by the needs of US corporations.  Its ideas, typically born of scant knowledge of local considerations, have failed far more than not.  International economic investment mechanisms, such as the IMF and the World Bank, have a very poor record at enabling economic takeoff.  Economic self-interest in places ranging from Puerto Rico to Indonesia has resulted in over-dependence in many developing countries on commodities like coffee, which over the years has resulted in wild swings in country economic performance and hence living standards.  And, of course, the aid that is targeted at education and health has typically come with prescriptions such as “force everyone to plant this way” or “teach abstinence in sex education” that fly in the face of the evidence.  

To succeed in causing such a dip, an approach must be (a) global, (b) coordinated, (c) evidence-based and not just technology-based, and (d) able to get buy-in from a wide variety of governments and localities.  The only plausible set of actors that meet these criteria are the UN and certain NGOs.  Since 1950, but not very much before that, they have been acting on a world-wide basis to tackle these problems, and the metrics that the UN has adopted starting before 2000 are evidence of just how evidence-based these interventions are.  The UN’s modus operandi emphasizes local “driving” and modification of global prescriptions, and many NGOs have learned to follow suit.

And the contrast is especially marked in the poorest countries of all, in Africa and Southeast Asia – where despite all the handicaps there really is clear improvement in extreme poverty and all the other criteria at least since 2000, where there wasn’t before.  It is wrong to ascribe this to cell phones, because first you have to get the cell phones to people, and even local businesses and microlending can only do so much.  The extension of these services to beyond the easy targets and the smoothing of the path with local and national governments can only be done via mechanisms like the UN-NGO alliance.  

I don’t mean to overemphasize this.  It is certainly true that in both India and China, national-government efforts to pursue certain types of “directed” free markets also played a major role.  I simply want to emphasize that the evidence I see suggests that even in those cases, the positive effect of both the national-government efforts and the free market is much less than we tend to think, and the effect of non-market, non-national-government efforts aimed at health, education, and poverty much greater, partly because they were more effective.  And they were more effective because they communicated to all parties good metrics and effective strategies.

The ”stupid” here, I think, is aimed more at Pinker than Hickel.  I think Hickel is oblivious to the possibility that the population growth he appears to be worrying about can be effectively targeted, and is being targeted, not by coercive “colonialist” programs, but by empowering women financially to make their own reproductive choices and by removing the ever-present worry in extreme poverty that the next generation will not survive to adulthood, hence the added births “in case”.   But Pinker gives the impression that he does not see the role of the UN and NGOs at all, since they don’t fit neatly into his paradigm of “enlightenment” such as is exemplified by scientific organizations and market forces.

It’s Not About Crises, It’s About Long-Term Efforts

And one final point.  We emphasize too much, when looking at long-term effectiveness, war, crises, and particular “bad” governments.  I believe that what the graph referenced above, and many others, shows is that what matters in making a big positive change is the ability to target the right factors and then globally change one’s tactics and goals based on the evidence.  National governments and even global firms are almost universally bad at this, the governments because they do not “mark to market” frequently enough without input from the rest of the world, global firms because they are often too small to leverage the kind of global resources to make a dent and because they continually veer off the right factors into “making money.”  I view what is happening in climate change, with the UN and the IPCC taking the lead in sounding the alarm and most countries lagging behind their metrics, is another example of this, where we overemphasize our concerns with the UN’s effectiveness in handling wars and bad governments, and fail to adequately appreciate or support its coordinating efforts.

Let’s stop the poor economic and political theorizing that fails to realize there is a shining example of the long-term effectiveness of organizations that fit neither “economics rules all” nor “politics rules all.”  No, I’m not recommending global government; but I am certainly not recommending today’s underestimation of the effectiveness of supra-national authorities by the likes not only of Pinker but just about everyone I hear commenting about these matters.  On the contrary.

Climate Change: Being the Smart Change

Disclaimer:  I am now retired, and am therefore no longer an expert on anything.  This blog post presents only my opinions, and anything in it should not be relied on.

Increasingly, personal efforts to combat climate change by changing one’s lifestyle are in the news.  “Being the Change”, Peter Kalmus’ 2017 book, is probably the most detailed book about the subject, but others ranging from Canada’s David Suzuki to Phys.org are also weighing in.  If we just restrict the suggestions to those impacting the carbon emissions caused by one individual’s actions, suggestions include:

·         Reducing or eliminating air travel;

·         A vegetarian or almost-meat-free diet;

·         Growing one’s own food in particular ways, or just buying local, and composting;

·         Living car-free or using transportation fueled by renewable-energy-based sources (e.g., a solar/wind-based grid);

·         Implementing large gains in home efficiency, including all-LED lighting, recent advances in such areas as vacuum cleaners and washer/dryers, insulating, and unplugging appliances;

·         Supplying home electricity and heat via solar panels or utility-supplied renewable energy;

·         If you really want to get drastic, moving to a place that is likely to have the least impact on carbon emissions over the next 60 years, such as a place away from a seacoast and marshland, not in an arboreal forest or one prone to wildfires, and probably in a city or large town.

The one that comes up frequently as having by far the “biggest bang for the buck” is air travel.  But is it, really?

Flying the Uncompetitive Skies

If the effect of your stopping flying one time is that the airlines make, say, 1/30^th of a flight in fewer flights (assuming an average of 30 people per flight), then, according to Kalmus and others, the answer is a resounding yes.  Kalmus estimated that he personally was causing 10 times the amount of carbon emissions that he could achieve by implementing all the major personal carbon-reduction measures that he could bring about.  Under my assumption about the effects of stopping air travel, his cessation of air travel meant he was only causing 2 times the amount of emissions that he could achieve.  In other words, almost 90% of his personal carbon-emissions savings came about simply by quitting air travel.

The flaw in this reasoning comes when we examine the actual effect if you, the reader, stopped air travel altogether.  If you did so, and you’d been flying 30 times a year, would the airlines respond by flying one less flight?  No.  They are typically overbooked, and the loss of you as a customer would be overwhelmed over the course of a year by yearly increases in demand.  Granted, if a few more like you did so, then there might have been less of an increase in the number of flights in that year, but as long as demand from non-abstainers is increasing faster than the number of air-travel dropouts, you are not accomplishing any reductions in global carbon emissions at all – and that’s the bottom line.

Let’s try analyzing this according to economic theory and real-world implications of that theory.  Suppose that, all over the world, one-half of the individual consumers of air travel on one day suddenly stopped flying.  When the dust settled, would we see one-half the number of flights, and hence one-half the number of carbon emissions?  Clearly, demand from non-obstainers is not going to double in the next year after the market crash.

And yet, the impact is likely to be far less than we expect.  There are two key economic principles involved, it seems to me.  First, the global air-travel market is made up of hundreds of regional and national markets.  Each of these is typically effectively a monopoly or duopoly.  And so, they are charging higher prices and taking fewer customers than they could.  When the market is cut in half, they can cut prices (and they have a lot of room to do so).  Meanwhile, demand from non-abstainers rises, because in the regional markets that are the bulk of air travel (think:  New York to Washington DC) there is high cross-elasticity of demand (the second economic principle).  Lower prices means that consumer demand switches from trains to planes.

Practically speaking, of course, such a change would not happen at once.  And that means that non-abstainer demand increases more nearly match rates of abstention, so when the dust settles we may well see a 20% rather than an almost 90% decrease in carbon emissions from personal abstentions.  This is simply one of those cases where accomplishing carbon-emissions reductions by government regulation is realistically the only effective alternative.

Being the Smart Change

So, does this mean that I think the person seeking to “be the change” should give up on giving up air travel?  By no means.  Personal choices do have some effects on markets, and the more individuals do this, the more it goes viral and becomes an unstoppable trend.  I suggest two things:

1.       Go ahead and cut air travel, at least the air travel you really don’t care that much about.  But mentally, don’t think that you’ve had as great an effect as you would from all the other tactics, like energy savings or uses of renewable energy, you carry out.

2.       In choosing what to cut out, consider cutting out long-distance and overseas travel first.  Yeah, I hate to say this.  But the economics says that this is one area where airline companies’ price-cutting power and ability to attract new demand is least, and therefore it is most likely that scheduled flights (not to mention charter flights) will indeed be cut sharply with decreases in demand.  

Postscript/Addendum/Whatever

Let me call two books related to climate change that I am reading to your attention.  Rising, by Elizabeth Rush, adds the loss of marshlands with rapid sea-level rise as one more key, potentially irreversible net source of carbon emissions.  Plus, it has a superb writing style.  In Search of the Canary Tree, by Lauren Oakes, lets you inside the mind and experiences of an environmental scientist as she chronicles the ongoing destruction of yet another vital tree, and also considers to what extent we are capable of long-term adaptation to climate change.  So far, I find it riveting, although I have quirky tastes.

p.s. I have been away from this blog for a few weeks and will not be paying as much attention for a few weeks more, partly because I am posting a series of old writings about JRR Tolkien over at Daily Kos (www.dailykos.com, check the diaries).  Those who care, be warned!

Climate Change Fall 2018: Postscript to Addendum

Disclaimer:  I am now retired, and am therefore no longer an expert on anything.  This blog post presents only my opinions, and anything in it should not be relied on.

Two new factoids:

1.        The CO2 data from Mauna Loa are now showing that CO2 levels (averaged over the last ½ year plus a projection of the next six months) reached 410 ppm in Nov.  This date is a little more than three years since that measure reached 400.

2.       The estimate of carbon emissions – flat for years 2014-2016 – rose by 1.6% in 2017 and is projected to rise by 2.7% in 2018.  Primary increases were from China and India, but the US also rose – only Europe among major contributors decreased.  Although, as I have noted, this measure may well be flawed as an indicator of underlying carbon emissions rise, the very fact that it can now be monitored on a monthly basis suggests that some of the flaws have been worked out.  It is, therefore, less likely to be an underestimate of carbon emissions, and hence the rate of rise is more likely to be correct or a slight overestimate.

Let me reiterate the conclusion in my Oct. addendum more forcefully:  I am told that I have, on average, 8 ½ years more to live.  By the time I am dead, CO2 seems all but certain to reach 430 ppm, and may well be approaching 440 ppm.  By 2050, if things simply continue linearly instead of accelerating the way they have done for the past 60 years, we will be at 500 ppm, nearly doubling CO2 at the start of the Industrial Revolution.  This bakes in a global temperature rise since then of 4 degrees Centigrade, or 7 degrees Fahrenheit in the long run, according to James Hansen and others, with at least 2 degrees C since the IR in the short run, or another 2 degrees F from the way things are right now.  

Another point:  There is a clear line between recent increases in carbon emissions and the administration of President Donald Trump.  The lack of support from that administration is clearly linked not only to US increases (via a strong rise in US oil/shale/natural gas generation) but also to decreased pressure on India and China, both in unilateral relations and in the meetings regarding implementation of the Paris Agreement.

Climate Change and Economics: The Invisible Hand Never Picks Up the Check

Disclaimer:  I am now retired, and am therefore no longer an expert on anything.  This blog post presents only my opinions, and anything in it should not be relied on.

Over the past few days, I have been reading Kim Stanley Robinson’s “Green Earth” trilogy, an examination of possible futures and strategies in dealing with climate change thinly disguised as science fiction.  One phrase in it struck me with especial force:  “the blind hand of the market never picks up the check.”  To put it in more economic terms:

·         Firms, and therefore market economies as a whole, typically seek profit maximization, and because the path to profit from new investment is always uncertain, to focus particularly on cost minimization within a chosen, relatively conservative profit-maximization strategy.

·         To minimize costs, they may not only use new technologies (productivity enhancement), but also offload costs as far as possible onto other firms, consumers, workers, societies, and governments.  Of these, the most difficult is offloading costs onto other firms (e.g., via supply-chain management), since these are also competing to minimize their costs and therefore to offload right back.  Therefore, especially for the large, global firms that dominate today’s markets, the name of the game is to not only minimize costs from workers, consumers (consider help desks as an example), and societies/governments, but also to get “subsidies” from these (time flexibility or overtime from workers, consumers performing more of the work of [and bearing more of the risk of] the sales transaction, governments not only providing subsidies but also things such as infrastructure support, education and training of the work force, and dealing with natural disasters – now including climate change). 

Often, especially in regard to climate change, economists may refer to the process of the invisible hand never picking up the check as the “tragedy of the commons.”  The flaw of this analysis is to limit one’s gaze implicitly to tangible property.  If one uses as a broader metric money equivalents, then it is clear that it is not just “common goods” that are being raided, but personal non-goods such as worker/consumer/neither time that translates to poorer health and less ability to cope with life’s demands, sapping productivity directly as well as via its effects on the worker/consumer’s support system, not to mention the government’s ability to compensate as it is starved of money.  And all of this still does not capture the market’s ability to “game the system” by monopolizing government and the law.

Another point also struck me when I read this phrase:  macroeconomics does not even begin to measure the amount of that “cost raiding”, instead referring to it as “externalities”.  And therefore:

Economics cannot say whether market capitalism is better than other approaches, or worse, or the same.   It cannot say anything at all on the subject.

Further Thoughts About Economics and Alternatives to Market Capitalism

A further major flaw, imho, in economics’ approach to the whole subject is the idea that cost minimization should not only be a desired end but also the major goal of an enterprise.  I am specifically thinking of the case of the agile company.  As I have mentioned before, agile software development deemphasizes cost, quality, revenue, time to market, and profit in favor of constantly building in flexibility to adjust to and anticipate the changing needs of the consumer.  And yet, agile development outperforms approaches that do concentrate on these metrics by 25% at a minimum and sometimes 100%.  

If the entire economy were based on real agile firms, I would suggest that we would see a comparable improvement in the economy – permanently.  Moreover, the focus on the consumer should lead to a diminution in “cost raiding”.  The focus on being truly in tune with the consumer’s needs, for example, should diminish raiding the consumer’s time in the sales transaction and forcing them to use the help-desk bottleneck.  And I still live in hope that agile development with fewer time constraints will empower the developer with the ability to seek out and implement his or her own tools to improve processes, thereby allowing better retraining.   

Implications of Climate Change for Economics and Market Capitalism

Robinson includes a critique of market capitalism in his work, and concludes that it has to change fundamentally.  I find the critique itself problematic; but that doesn’t mean he isn’t right in his conclusion.

The fundamental question to me is, what happens when externalities go in reverse, and suddenly the things that have led to ongoing profits lead to ongoing losses?  Robinson paints a frightening picture of a world in which brownouts, blackouts, killing cold, and killing heat are common, and insurance, whether private or governmental, cannot adequately compensate, leading additional costs to settle, inexorably, on their last resort, business.  Then, implicitly, firms must cannibalize each other, with the largest being best equipped to do so.

I tend to place things in less apocalyptic terms.  According to Prof. deLong, GDP performance can be thought of as part improvement in productivity and part expansion of the workforce.  The climate change scenario necessarily implies a shrinkage of that workforce (in labor-hours) faster than productivity can climb, and therefore a constantly shrinking market.  In that case, the market’s rising need for “cost raiding” as the market shrinks simply speeds up the shrinkage of the market – not to mention the underlying societies.  And that, to me, is the fundamental flaw that needs correcting. 

Theoretically, one option is to capture things like “the social cost of carbon” in company accounting – an idea I wrote about five years ago.  Practically speaking, the uneven effects of that on companies mean real impact on the employees of coal and oil companies, a fact we have already seen a small foretaste of, and that has further revealed the ability of oil and coal companies to entirely snarl the political process to prevent adequate steps at limiting “cost raiding” – and that makes our carbon pricing efforts in real-world terms more likely than not to be inadequate to reverse the “cost raiding” trend.  

The obvious alternative, which I and others have argued for and I in fact picked up on eight years ago when I first understood the dire implications of climate change, is “World War II in America”, governmental interference in the economy comparable to that of WWII in order to “win the war on climate change”.  Only, of course, the aim is to lose the war with as little damage as possible.  So suppose we do that; what then?

The obvious answer is, “sustainability” – meaning practices that will ensure that having “won the war”, we don’t lose it again in the future by slipping back into the old carbon-guzzling, ecology-devastating, arable-land-destroying habits.  Is that enough?  Robinson says no, that despite sustainability, cost raiding will continue to increase in other areas.  And here I tend to agree with him, although I am not sure.

It appears, reverting to Prof. deLong’s point above, that it is possible with sustainability to continue to improve both human welfare and corporate profitability, by improving productivity with a more or less stable (almost certainly shrunken) population and workforce.  However, productivity improvement may well be less than in the Industrial Revolution – it has already slowed for an unduly long time.  And if that is the case, then there is no market-capitalism path forward that involves today’s increases in corporate profitability and avoids cost raiding increases.

I don’t know the answer to this.  I feel, however, that the beginnings of an answer lie not in perpetually increasing the size of the workforce by improving human welfare, while somehow not increasing population, but rather in perpetually increasing “consumer productivity”:  the value that people get out of their lives, that they can then invest in others.  More specifically, I think markets can be divided into those for carrying out daily tasks (“Do”), those for socializing and participating in society (“Socialize”) and those for learning and creating (“Learn”).  A balance must be kept between these efforts in any individual’s life, so the perpetual increases must be achieved inside each of these three sets of markets. 

I would argue that today’s market economies use “Do” to crowd out much of the other two sets of markets, and are less good at perpetually increasing the value of “Socialize” and “Learn”, although the crowding-out may mean that “Do”’s superiority is illusory.  I have no clear idea as to what to do about my conclusions, except to examine each set of markets more closely to gain clues as to how to achieve this perpetual value increase.

Just some thoughts.  And oh, by the way, Robinson is indeed worth reading.

Climate Change Fall 2018: A Personal Addendum

Disclaimer:  I am now retired, and am therefore no longer an expert on anything.  This blog post presents only my opinions, and anything in it should not be relied on.

One thing I did not note in my recent climate-change update:  The CO2 data from Mauna Loa are now showing that CO2 levels (averaged over the last ½ year plus a projection of the next six months) reached 409 ppm in Sept.  This is about three years since that measure reached 400 ppm, and is less than 6 months before it reaches 410 ppm.

I am told that I have, on average, 8  ½ years more to live.  By the time I am dead, CO2 will in all likelihood have reached 430 ppm, and may well be approaching 440 ppm.  By 2050, if things simply continue linearly instead of accelerating the way they have done for the past 60 years, we will be at 500 ppm, nearly doubling CO2 at the start of the Industrial Revolution.  This bakes in a global temperature rise since then of 4 degrees Centigrade, or 7 degrees Fahrenheit in the long run, according to James Hansen and others, with at least 2 degrees C in the short run, or another 2 degrees F from the way things are right now.  

Heckuva job, humanity.

Local Markings of Climate Change These Days

I have lived in the Northeast US for all of my 68-year life, the last 40 years of it near Boston.  This year, there are so many weather changes I cannot remember ever seeing before.

It is now a day before Halloween.  For the first time ever, most of the leaves are still on the trees.  Leaf coloration only began happening in early October, the latest ever; it used to happen in mid-September. 

In late October, shortly before a playoff game was to be played in Fenway Park, there was a thunderstorm.  That has never happened in late October.  As a matter of fact, thunderstorms only used to happen around here once or twice in mid-summer – if that.  

This last summer was hot (as usual) and humid (something that has only been happening in the last 10 years.  It started in late June and went full tilt until mid-September, which it has also never done before, at a typical “the way it feels to you” pace of the upper 80s to the low 90s F.  Many days, I stayed indoors all day and night.

All year, the wind has been strong – typically 10 mph faster than even 15 years ago.  My backyard is well shielded by trees from the wind, and until the last couple of years I could look out and not see the leaves and branches moving.  This year, I typically see them moving even close to the house.

There has been a lot of rain this year.  What’s unprecedented is that most rains are hard rains, with big raindrops hammering on the roof.  Going out for a walk during a rainstorm, with wind blowing your umbrella wildly, the streets flooded an inch or three, and the wind driving the large raindrops horizontally onto your clothing, is contraindicated in most cases.  So even in the spring and fall of this year, some days I spend indoors all day and night.

And I know that from here on, on average, it all only gets worse.  100-mph nor’easter, anyone?

Reading New Thoughts: O’Reilly’s What’s The Future, the Agile Entity, and Prediction

Disclaimer:  I am now retired, and am therefore no longer an expert on anything.  This blog post presents only my opinions, and anything in it should not be relied on.

Tim O’Reilly’s “WTF:  What’s the Future, and Why It’s Up to Us” is, alternately, an insightful memoir of many of the computer industry events that I lived with and to some extent participated in, a look at the oncoming technologies coming from the computer industry and its spinoffs, with particular over-emphasis on Uber and Lyft, and an attempt to draw general conclusions about how we all should anticipate what’s going to impact us in the future and how we should “ride the wave”.

First, I want to add a caveat that I think should become a Law:

The future happens faster than we think – and then it happens slower than we think.

By this I mean:  when new technological breakthroughs arrive, not all are obvious to a particular part of the economy that we attend to, even if (today) they are linked by software technology.  Then, even when they seem like the “new new thing” everywhere in our particular area, they typically take 10-30 years to spread to the world at large.  For example, smartphones and their apps (themselves over 10 years old) are by no means ubiquitous in the Third World, despite the hype.

I’d like to note here several instances of the future arriving “faster than we think”, some profiled in WTF.  Among the ones that I find amazing (and sometimes frightening):

·         We can now alter and replace 20-gene DNA and RNA segments, and hence genes in general, not only for the next generation but also in many cases over the course of a few months for our own.  The work to achieve that happened less than 10 years ago, practical implementation was achieved less than 5 years ago, and the Nobel Prize for that work (led by Jennifer Doudna and her team, described in her book) was awarded this month.

·         Pictures of anyone can be inserted seamlessly in a different scene, making it very hard to tell the truth of the news pictures that we see every day.

·         Understandable automated language translation (e.g., Google), automated voice recognition, and automated picture recognition have been achieved (although “good” speech recognition has still not been reached).

·         Semi-automated bots generate comments on articles and in blogs that are often indistinguishable from the ungrammatical and rambling comments of many humans.  Hence, the attempts at hacking political elections and the increasing difficulty of figuring out the truth of events in the public arena, “crowded out” as they now sometimes are by false “rumors.”

More subtly:

·         Uber and Lyft create “instant marketplaces” matching buyers and sellers of taxi services.

·         Supermarkets now dictate to growers production of specific items with detailed specification of quality and characteristics, based on narrow segments of the consumer market.

Now, let’s talk about what I think are the new thoughts generated by WTF.  In particular, I want to suggest that O’Reilly’s view of how to “predict” which oncoming technologies should be factored into one’s business, government, or personal strategy going forward, how to fit these into an overall picture, and how to use that picture to develop strategy, is really of most use in developing an “agile strategy” for an agile entity.

WTF Key Technologies and Strategies

Perhaps the best place to start is with WTF’s “Business Model of the Next Economy,” i.e. a model of the typical firm/organization in the future.  There are many subtleties in it, but it appears to break down into:

·         Central “Networked Marketplace Platforms”, i.e., distributed infrastructure software that provides the basis for one or many automated “marketplaces” in which buyers and sellers can interact.  In the supply chain, the firm would be the primary buyer; at the retail level, it would be the primary seller.

·         Feeding into these platforms, an approach that “replaces markets with information” – instead of hoarding information and using that hoarding to drive monopoly sales, the firm releases information openly and uses the commoditization of the product to drive dominance of new products.

·         Also feeding into the platforms, a new approach to user interfacing that seeks to create “magical experiences.”  This particularly enhances the firm’s and platform’s “reputation.”

·          Another “feeder” is “augmented” workers – workers enabled by rather than replaced by AI-type software.

·         A fourth “feeder” is “On-Demand” (applied flexibly, as needed) talent (workers given added value by their talents) and resources.  This includes an emphasis on actively helping workers to succeed, including over the long run.

·         A fifth feeder – somewhat complementary to the fourth – is “Alternatives to Full-Time Employment”, where the emphasis is on being flexible for the benefit of the worker, not the employer – the takeaway being that this actually benefits the employer more than WalMart-style “show up when we need you and never mind your personal life” approaches.  The key newness about this approach is that is “managed by algorithm” – the algorithm allows both the employer and employee to seek to manage their needs in a semi-automated fashion.

·         Returning to the business itself, the final feeder to the marketplace platform is “Services on Demand”, which offers to the consumer an interface that is providing an ongoing service rather than simply selling a product.  This is enhanced by “marketplace liquidity,” ways to make it easier for the consumer to buy the service.

At this point I revert to my caveat/Law in the beginning.  This “next economy” model is already operating in parts of the computer industry and related fields, e.g., Amazon, Google, Lyft – the future has already happened faster than we think.  At the same time, there will be a longer time than we think before it diffuses across the majority of organizations, if it does so at all.  Government and law are two obvious places considered in WTF where this model holds great potential, but will take a long, long time to effectively apply.

If the object of the game is to “ride the technology wave” by predicting which oncoming technologies should be factored into one’s business, then the technologies in this model are relatively safe bets.  They are already past the stage of “timing”, where the technology is attractive but it may not yet be time for the market to implement it.  As WTF points out, the trick is not to simply latch on to a strategy like this, but to constantly update the model and its details as new technologies arrive at their “timing” stage. 

Enter the agile strategy.

Prediction and the Agile Entity

The agile process is, on its face, reactive.  It does not attempt to get out ahead of the combined wisdom of developers/process-users and consumers/end-users.  Rather, it seeks to harvest that wisdom rapidly in order to get out in front of the market as a whole, and only for the purposes of each development/rollout process.

An agile strategy (which, up to this point, I haven’t examined closely) should be a different animal.  Precisely because any strategy bridges a firm/organization’s entire set of new-product-development efforts as well as aligning the rest of the organization with these, an agile strategy should be (a) long-term and (b) to a significant degree in advance of current markets.  

In the case of the strategy outlined in the previous section (i.e., implement the “new business economy model”), one very straightforward way of adding agility to the strategy would be to add agility to the software and analytics used to implement it.  One tried-and-true method for doing this is “refactoring” – adding a layer of abstraction to the software so that it is relatively easy to change.

Another method is simply to plan to revisit the strategy every 3-12 months.  The agile CEO I interviewed and reported on in a 5-years-old blog post did exactly that – a 5-year plan, revisited and informed with both his outside feedback and the information he gathered by attending scrum meetings.

WTF adds a third dimension:  attempt to discern upcoming technologies and approaches that are “important”, and then “time” the shift to a new strategy incorporating those technologies/approaches.  “Prediction,” in these terms, means anticipating which oncoming technologies/approaches are important and also the pace of their evolution into “timely” products and services.

I would argue, however, that this is precisely where an agile strategy adds value.  It does not assume that what seems important now stays important, or that an important technology/approach will arrive in the market in the next 5 years, but rather that whatever steps we take towards preparing the way for a new technology/approach must be flexible enough to switch to another technology/approach even midway in the process.  For example, we may move towards augmenting our workers with AI, but in such a way that we can instead fully automate one set of workers in order to augment a new type of worker whose responsibilities include that of the old.  We would be, in a sense, “refactoring” the worker-task definition.

So here’s my take from reading WTF:  It should be possible, using WTF’s method of anticipating change, to implement an agile strategy as described.  Moreover, an agile strategy should be clearly better than usual ones.  Usual strategies and agile processes do not anticipate the future; agile strategies such as this do.  WTF-type strategies anticipate the future but are not flexible enough to handle changes between identification of the future and the time for its implementation; an agile strategy should be able to do so.

Climate Change Mid-2018: The Relatively Good Bad News

Disclaimer:  I am now retired, and am therefore no longer an expert on anything.  This blog post presents only my opinions, and anything in it should not be relied on.

As I have argued before, human metrics on how well we are coping with climate change can be highly misleading, usually on the side of false optimism.  Two metrics that are clearly not thus biased are:

1.       Measurements of atmospheric CO2 at Mauna Loa in Hawaii, which have been recorded since 1959;

2.       Estimates of Arctic sea ice volume (with extent serving as a loose approximation), especially at minimum in September, which have been carried out since the 1980s.

Over the past few years, I have covered the drumbeat of bad news from those two metrics, indicating that we are in a “business as usual” scenario that is accelerating climate change.  In the first half of 2018, what has happened in both cases is that the metrics are not following a “worst possible case” path – hence the “relatively good” part of the title.  At the same time, there is no clearly apparent indication that we are deviating from our “business as usual” scenario – mitigation is not clearly having any effect.  It is possible, however, that we are seeing the beginnings of an effect; it’s just not possible to detect it in the statistical “noise.”  And given that scientists are now talking about a “tipping point” in the near future in which not only a frightening 2 degrees C temperature by 2100 is locked in, but also follow-on feedbacks (like permafrost melt) that take temperature rise eventually to a far more disastrous 3-4 degrees C – well, that’s the underlying, ongoing bad news.

Of course, this summer’s everlasting heat waves in the US, Europe, and the Middle East – heat waves clearly caused primarily by human-generated CO2 emissions and the resulting climate change – make the “new abnormal” obvious to those of us who are not wilfully blind.  But for anyone following the subject with an open mind, the heat waves are not a surprise.  

So let’s take a look at each metric.

The El Nino Effect Recedes

From late 2016 to around June of 2017, the El Nino effect crested, and, as it has done in the past (e.g., 1998) drove both temperatures and the rate of CO2 rise skyward.  Where 2013-2015 saw an unprecedented streak of 3 years of greater than 2 ppm atmospheric CO2 growth, 2016 and 2017 both saw record-breaking growth of around 3 ppm (hiding a brief spurt to almost 4 ppm).  1998 (2.86 ppm) was followed by a year or two of growth around 1 ppm – in fact, slower than 1996-7.  But the percentage rate of rise has also been rising over the years (it reached almost 1% in early 2017, 4 ppm over 404 ppm).  Therefore, it seemed a real possibility that 2018 would see 2.5 ppm growth.  Indeed, we saw 2.5 ppm growth as late as the first month or two of 2018.

Now, however, weekly and monthly growth has settled back to a 1.5-2 ppm rate, consistently since early 1998.  Even a 2 ppm rate gives hope that El Nino did not mean a permanent uptick in the rate of rise.  A 1.5 ppm rate would seem to indicate that 2018 is following the 1999 script – a dip in the rate of rise, possibly because of the follow-on La Nina.  It might even indicate a slight – very slight – decrease in the underlying rate of rise (i.e., the rate of rise with no El Nino or La Nina going on).  And that, as I noted above, is the first indication I have seen that things might possibly be diverging from “business as usual”.  

Of course, there’s always the background of bad news.  In this case, it lies in the fact that whereas ever since I started following CO Mauna Loa 6 or 7 years ago CO2 levels in year 201x were about 10 ppm greater than in year 200x (10 years before), right now CO2 levels are about 13.5 ppm greater than in year 2008.  So, even if the El Nino effect has ended, the underlying amount of rise may still be increasing.  

The best indicator that our efforts are making a difference would be two years of 1 ppm rise or less (CO2 Mauna Loa measures the yearly amount of rise by averaging the Nov.-Feb. monthly rises).  Alas, no such trend has shown up in the data yet.

Arctic Sea Ice:  Not In Stasis, Not in Free Fall

Over the last 2 years, the “new normal” in Arctic sea ice advance and retreat has become apparent.  It involves both unprecedented heat in winter, leading to new low extent maxima, and a cloudy and stormy July and August (key melt months), apparently negating the effects of the winter melt.  However, volume continues to follow a downward overall trend (if far more linear and closer to flat-line than the apparently exponential “free fall” until 2012, which had some predicting “ice-free in 2018”).

As Neven’s Arctic Sea Ice blog (neven1.typepad.com) continues to show, however, “ice-free in September” still appears only a matter of time (at a best guess, according to some statisticians, in the early 2030s).  Subsea temperatures (SSTs) in key parts of the Arctic like above Norway and in the Bering Sea continue to rise and impact sea ice formation in those areas.  As the ice inherited from winter thins, we are beginning to see storms that actually break up the weaker ice into pieces, encouraging increased export of ice to the south via the Fram Strait.  The ice is so thin that a few days ago an icebreaker carrying scientists had to go effectively all the way to the North Pole to find ice thick enough to support their instruments for any length of time.

So the relatively good news is that it appears highly unlikely that this year will see a new low extent, much less an ice-free moment.  The underlying, ongoing bad news is that eventually the rise in SSTs will inevitably overcome the counteracting cloudiness in July and August (and that assumes that the cloudiness will persist).  Since 1980, extent at maximum has shrunk perhaps 12%, while extent at minimum has shrunk perhaps 45% (volume shows sharper decreases).  And in this, unlike CO2 Mauna Loa, there is no trace of a hint that the process is slowing down or reversing due to CO2 emissions reductions.  Nor would we expect there to be such an indication, given that we have only gotten globally serious about emissions reduction in the last 3 years (yes, I recognize that Europe is an exception). 

The Challenge

The question the above analysis raises is:  What will it take to really make a significant impact on our carbon emissions – much less the dramatic reductions scientists have been calling for?  I see no precise answer at the moment.  What I do know is that what we are doing needs to be done even faster, far more extensively – because the last few years have also seen a great increase in understanding on the details of change, as I have tried to show in some of my Reading New Thoughts posts.  The ways are increasingly there; the will is not.  And that, I think, along with countering the disgustingly murderous role of President Trump in particular in climate change (I am thinking of Hurricane Maria and Puerto Rico as an obvious example), should be the main task of the rest of 2018.