Category Archives: Web Article Review

Naomi Oreskes

From the New York Times, here are some attention grabbing quotes:

driverless vehicles and displacement of drivers

Here is a continuation of the Economist‘s musings about automation:

The possibility of a world in which a rather large share of the population works as drivers, simply because human labour has gotten too cheap to automate out of the job, should focus minds on the nature of the policy challenge economies are beginning to face. Is work—and the link between work and the earning of an income sufficient to live on—so important to society that we should want millions of people to function as meatware: doing jobs sensors and computers could and would do if only there were not an excess supply of humans needing to work in order to afford food and shelter?

That’s not a rhetorical question. It’s a genuine puzzle that societies will find themselves confronting in coming decades. It will be obvious to many people that the answer is no and just as obvious to many others that the answer is yes. I cannot begin to say which side will win the argument.

The idea is that as automated vehicle technology becomes more effective and inexpensive, it will start to put more drivers out of work. But having more drivers available will reduce wages for drivers, possibly below what the automated technology costs and reducing the incentive for further development of the technology. It’s logical, but this sort of thing must have happened throughout history, and technology tends to win even if it takes a while. Take agricultural technology like diesel-powered tractors – when they got cheaper and more effective, they put enormous numbers of agricultural workers out of work. For the most part, those people didn’t accept lower wages and continue as agricultural workers, they migrated and tried to find better jobs in manufacturing, jobs that were also unfortunately drying up due to globalization and automation. The result, in the U.S. at least, was formation of a (seemingly, so far) permanent new underclass. So not only are these issues about technology vs. jobs, they are about how (whether) the wealth created by the new technology is going to be shared throughout society. In theory, we could retrain people and better educate their children, while also working less and sharing income more broadly. But that doesn’t sound like the American way, does it?

spending vs. investment

Maybe somebody can explain all this to me (from Project Syndicate):

With all of the rules pointing toward recession, how can Europe boost recovery?

A two-year €400 billion ($510 billion) public-investment program, financed with European Investment Bank bonds, would be the best way to overcome Europe’s current impasse. Borrowing by the EIB has no implications in terms of European fiscal rules. It is recorded neither as new debt nor as a deficit for any of the member states, which means that new government spending could be funded without affecting national fiscal performance.

Thus, some of the investment spending currently planned at the national level could be financed via European borrowing to relieve national budgets. Such an indirect way of dealing with strict rules would also be easier than starting long and wearying negotiations on changes to the fiscal framework…

In addition, the ECB could purchase EIB bonds on secondary markets, which would help to keep funding costs low – or even reduce them. More important, purchases of EIB bonds would enable the ECB to undertake quantitative easing without triggering the degree of controversy implied by intervening in 18 separate sovereign-bond markets, where concerns that ECB purchases would affect the relative pricing of sovereigns are very real.

Already, €200 billion of EIB bonds are available. Adding €400 billion would increase the pool substantially. Together with asset-backed securities, covered bonds, and corporate bonds, €1 trillion of assets – the threshold widely thought to make quantitative easing by the ECB credible – would be available for purchase.

What I think it means is that if we don’t have the money to do the things we want to do, we can just make some more up. But of course, we can’t just make up an infinite amount of money, because we can’t just do an infinite amount of things here on our finite planet. So if we make up too much money, people might start to realize that money is just made up.

Here on this finite planet, we have a certain amount of resources at our disposal that allow us to do things – natural resources like energy, water, and fertile soils; machines, structures, and infrastructure we have built; and the physical efforts, knowledge, and skills of people. Also, less tangible things that we have tended to take for granted in the past – the ability of oceans and other ecosystems to grow food, absorb wastes, and cycle carbon, nutrients and gases that we can’t live without, for example. If we are finding that we don’t have the resources to do all the things we want to do, then we are poorer than we would like to be. We can make up some more money, but ultimately the financial system is just something we have come up with to allocate the resources and efforts we do have available, and ultimately to impose limits on ourselves just short of the actual physical limits, which actually do exist.

Where am I going with this? If we want to get richer, we have to protect the resources we can’t do without, like the health of ecosystems and the atmosphere. We have to impose limits on ourselves voluntarily today before the real physical limits are imposed on us. Then if we want to be richer tomorrow, we need to spend the resources we do have on the right kinds of investments in the right kinds of structures and machines; we need to spend our efforts in smart ways and increase our knowledge and skills in the right areas.

The kind of short term economic and financial press coverage I quoted at the beginning of this post doesn’t make the connections between money and the real world, and doesn’t make a distinction between financial spending in general and smart investment in the future. Jeffrey Sachs has written a nice post that makes some of these points, and argues that there has been a recent drop in true investment right when the world needs it most urgently:

Neither neo-Keynesians nor supply-siders focus on the true remedies for this persistent drop in investment spending. Our societies urgently need more investment, particularly to convert heavily polluting, energy-intensive, and high-carbon production into sustainable economies based on the efficient use of natural resources and a shift to low-carbon energy sources. Such investments require complementary steps by the public and private sectors.

The necessary investments include large-scale deployment of solar and wind power; broader adoption of electric transport, both public (buses and trains) and private (cars); energy-efficient buildings; and power grids to carry renewable energy across large distances (say, from the North Sea and North Africa to continental Europe, and from California’s Mojave Desert to US population centers)…

These considerations are reasonably clear to anyone concerned with the urgent need to harmonize economic growth and environmental sustainability. Our generation’s most pressing challenge is to convert the world’s dirty and carbon-based energy systems and infrastructure into clean, smart, and efficient systems for the twenty-first century. Investing in a sustainable economy would dramatically boost our wellbeing and use our “excess” savings for just the right purposes.

air pollution and cardiovascular disease

This just in from the American Heart Association (actually the article is from 2010 but I don’t think the news has gotten any better) – particulate air pollution, which comes from internal combustion engines and fossil-fueled power plants, is pretty bad for us:

There are several ways by which PM2.5 could affect the cardiovascular system; however, one leading explanation suggests that several components of PM2.5, once inhaled, can cause inflammation and irritate nerves in the lungs. These responses can start a cascade of changes that adversely affect the rest of the body, Brook said.

“It’s possible that certain very small particles, or chemicals that travel with them, may reach the circulation and cause direct harm,” Brook said. “The lung nerve-fiber irritation can also disrupt the balance of the nervous system throughout the body. These responses can increase blood clotting and thrombosis, impair vascular function and blood flow, elevate blood pressure, and disrupt proper cardiac electrical activity which may ultimately provoke heart attacks, strokes, or even death.

“These studies also indicate that there is no ‘safe’ level of PM2.5 exposure,”

Also, and this really is breaking news, in the Nurses’ Health Study:

  • In 523 cases of sudden cardiac death, living within 50 meters (164 feet) of a major road increased the risk of sudden cardiac death by 38 percent, compared to living at least 500 meters (.3 miles) away.
  • Each 100 meters (328 feet) closer to roadways was associated with a 6 percent increased risk for sudden cardiac death.
  • In the 1,159 cases of fatal coronary heart disease, risk increased 24 percent.

The public’s exposure to major roadways is comparable to major sudden cardiac death risk factors, researchers said.

pollution and autism

from Alternet, a new theory on possible environmental causes of autism:

The children exposed to two substances were up to twice as likley as others to develop autism spectrum disorders. The first is styrene, which is used in plastics, paints and is also a product of gasoline combustion in automobiles. The second, chromium, is produced during the processes used in steel manufacturing and other industries.

Krugman vs. limits to growth

Paul Krugman has weighed in with an anecdotal example of how companies can find ways to conserve energy:

After 2008, when oil prices rose sharply, shipping companies — which send massive container ships on regular “pendulum routes”, taking stuff (say) from Rotterdam to China and back again — responded by reducing the speed of their ships. It turns out that steaming more slowly reduces fuel consumption more than proportionately to the reduction in speed

Interesting, but Mark Buchanan makes the point that total energy use keeps increasing even as efficiency per unit of GDP decreases (the Krugman article was actually a response to this one):

Growth inevitably entails doing more stuff of one kind or another, whether it’s manufacturing things or transporting people or feeding electricity to Facebook server farms or providing legal services. All this activity requires energy. We are getting more efficient in using it: The available data suggest that the U.S. uses about half as much per dollar of economic output as it did 30 years ago. Still, the total amount of energy we consume increases every year.

Data from more than 200 nations from 1980 to 2003 fit a consistent pattern: On average, energy use increases about 70 percent every time economic output doubles. This is consistent with other things we know from biology. Bigger organisms as a rule use energy more efficiently than small ones do, yet they use more energy overall. The same goes for cities. Efficiencies of scale are never powerful enough to make bigger things use less energy.

I have yet to see an economist present a coherent argument as to how humans will somehow break free from such physical constraints. Standard economics doesn’t even discuss how energy is tied into growth, which it sees as the outcome of interactions between capital and labor.

Brian Czech further attacks the Krugman article:

Let’s not let Krugman delude us. “Growing real GDP” isn’t about an efficiency gain here and there. It means increasing production and consumption of goods and services in the aggregate. It entails a growing human population and/or per capita consumption. It means growing the whole, integrated economy: agriculture, extraction, manufacturing, services, and infrastructure. From the tailpipe of all this activity comes pollution.

Krugman seems to have fallen for the pixie dust of “dematerializing” and “green growth” in the “Information Economy.” He may want to revisit Chapter 4 of The Wealth of Nations, where Adam Smith pointed out that agricultural surplus is what frees the hands for the division of labor. In Smith’s day that included the likes of candle-making and pin manufacturing. Today it includes everything from auto-making to information processing, but the fundamentals haven’t changed. No agricultural surplus, no economic growth. And agriculture is hardly a low-energy sector.

Now, I think it’s possible to have a vision of truly clean energy, which could one day allow us to grow energy use without increasing our environmental footprint. But to get there, we have to turn the corner where the reduction in impact per unit increase in energy use is greater than the overall increase in energy use. And we are nowhere near turning that corner yet.

urbanization and economic growth

From PLOS, Urbanization is correlated with economic growth, but it is not necessarily the cause of it.

The authors of the study argue that GDP growth may create conditions that organically drive migration from rural to urban areas, but the assumption that urbanization will necessarily drive strong economic growth may be false. Pointing to the numerous examples of accelerated urbanization without strong economic growth (again, the green graph above), they caution that “urbanization is not an automatic panacea” for economic difficulties. Citing other work, the authors suggest that instead of trying to move people into cities, governments and development agencies should focus on creating a mobile workforce, ensuring broad access to goods and markets, implementing government policies that support commerce, and investing in infrastructure. These efforts could make a bigger difference for short- and medium-term economic growth than arbitrary urbanization targets.

While economic growth is an incredibly complex process and much work remains, this study serves as a good reminder not to confuse causation and correlation: just because two variables are closely related doesn’t necessarily mean that one directly causes the other.

welcome to 1981

According to BBC, the Swedish military is back out searching for “foreign underwater activity”, meaning Soviet…er, Russian submarines. So I went to Wikipedia and refreshed myself on the “whiskey on the rocks” incident from 1981:

Soviet submarine S-363 was a Soviet NavyWhiskey-classsubmarine of the Baltic Fleet, which became famous under the designation U 137 when it ran aground on October 27, 1981 on the south coast of Sweden, approximately 10 km from Karlskrona, one of the larger Swedish naval bases. U137 was the unofficial Swedish name for the vessel, as the Soviets considered names of most of their submarines to be classified at the time and did not disclose them. The ensuing international incident is often referred to as the Whiskey on the rocks incident…

his produced the most dangerous period of the crisis and is the time where the Swedish Prime MinisterThorbjörn Fälldin gave his order to “Hold the border” to the Supreme Commander of the Swedish Armed Forces. The coastal battery, now fully manned as well as the mobile coastal artillery guns and mine stations, went to “Action Stations“. The Swedish Air Force scrambled strike aircraft armed with modern anti-ship missiles and reconnaissance aircraft knowing that the weather did not allow rescue helicopters to fly in the event of an engagement. After a tense 30 minutes, Swedish Fast Attack Craft met the ships and identified them as West German grain carriers.

The boat was stuck on the rock for nearly 10 days. On November 5 it was hauled off the rocks by Swedish tugs and escorted to international waters where it was handed over to the Soviet fleet.

How many times were the two sides locked and loaded during the Cold War, and are we just lucky that cooler heads almost always prevailed?

still more on oil prices and fracking

This article from Planetizen puts the break-even price for hydraulic fracturing at something like $80-85 a barrel, higher than I had previously reported. The point is that they are getting down to the point where it would no longer be as profitable as it has been, and at some point it wouldn’t be profitable at all. It’s fun to try to piece together the reasons for this shift – slowing economies in Europe, Asia, and Africa, and as a result a rising U.S. dollar which means oil that might be holding steady in currencies around the world is still getting cheaper in U.S. dollars at the moment. I still think this is a short-term fluctuation masking a decades-long trend toward higher energy and food prices.