I'm a PC - and I think I'm going to be sick

A few months back I was confronted with what was indisputably the most sickening advert I have ever seen. It was from Nescafé (of Third World baby notoriety) and it simply said ‘It’s all about you’.

Yuck.

But I let it pass – hopefully an aberration of narcissism you have to expect from advertisers from time to time.

But then just the other day I came across two at once: Armani’s ‘You make me feel’ and, the worst yet, an advert for Windows, with the strap-line ‘And it’s all about me’.

Yuck and double yuck. And deeply creepy.

Whoever wrote this nauseating line, please go away, read Naomi Klein’s No Logo, and think about your life. Because you need a new one – this one isn’t working.

Yes, that's the point!

Europe's larger CO2 emitter, the German power company RWE, has issued a statement criticising the EU's plan to make electricity generators pay for their CO2 emission permits in full from 2013:

Companies such as ours that... rely on coal-fired power generation will
find themselves at a distinct disadvantage vis-à-vis companies like EDF, which
are based mainly on nuclear and have virtually no CO 2 costs...

This, RWE claimed, will spell the 'end of fair competition in the energy sector in Europe'

Maybe I've missed something here. Isn't that the point of this entire exercise - to end competition based on nothing but price? Or rather, to include in the price of electricity some of the all-too real environmental factors that we will all pay for before long, not least the 140 million tons of CO2 RWE pump into the atmosphere every year.

Pointing at EDF, France's nuclear power generator, is quite bogus - the same point could be made about wind farms.

No, this is where environmental policy starts to bite. Will the EU have the political will make it stick - and, given the commitment of most EU countries to coal-, gas- and oil-based power generation, is the policy going to lead to serious economic and political problems as electricity costs start to rise to pay for the permits?

What's the problem with ID cards?

The whole ID card debate surely has to be one of the most misdirected debates in recent political history. On the one hand there are those who insist that they are invaluable weapons against terrorism, and thus conveniently forget the Madrid bombings, - all Spaniards are required to carry ID cards. And on the other there are those who point vaguely (and for most people, unconvincingly) at threats to civil liberties. The latter are then reminded that ID cards are the norm throughout Europe, so what’s the problem?

The answer is not that ID cards are a problem in themselves. But what has happened in this case is that every other piece of supposedly anti-terrorist legislation we have had so far has been abused. People are being bugged by local councils to see if they are fly-tipping. Elderly hecklers are bundled out of the Labour party’s conference under anti-terrorist legislation. Now an Opposition MP is being arrested under similar legislation for leaking Home Office information – which is to say, for a practice at which the current Prime Minister boasted of excelling when he was in Opposition. And so on.

The fact is not that ID cards are a problem. Had we had them for a century, no one would worry. But we are having them now, which means that they are being introduced by a government and police system that we simply don’t trust. We’re more afraid of them than of terrorists.

Well done, New Labour: you have finally created a situation in which the devil you know is worse than than the devil you don't.

Why we will miss the Millennium Development Goals

I’ve just finished reading the Millennium Development Goals Report for 2008. Basically it says that we aren’t going to make it, and that millions – billions – of people can look forward to hunger, ignorance and disease. Add to that the growing environmental and resources crises, you can add war to that too.

What has this to do with the topic of this blog, the environment? If we aren’t willing to help people in dire need now – even when we have expressly promised to help them and claimed (at the 2000 Millennium Summit) that they would ‘spare no effort’ to do so - how realistic is it to expect us to expend any significant effort on an environmental crisis whose really disastrous effects are mostly several decades away? Not great, I would say. Yet environmental action is at least as urgent as support for developing countries – many of the effects we can expect in future decades are the results of causes that are happening now. But of course we will do too little for far too long.

Why is this? I do not believe that it is because we are stupid or that the environmental case has not really been made. I have no idea how well individual members – or whole departments - of the government understand the problem. The fact that, say, the Foreign Office has ‘promote a low carbon, high growth, global economy’ as one of its four top-level policy goals, and the absence of many details about either climate or the environment generally in the FCO site as a whole strongly suggests that they have not really taken on board how great the change needed really is.

But as the sub-title of this blog – ‘About the environment, peak everything and capitalism’ – suggests, I suspect that it has a lot to do with the fact that the real problem – with understanding what the problem is, let alone solving it – resides at a far deeper level than navigating a particularly set of rapids. The fact is, we are probably on the wrong river, and the rapids ahead look like growing to Niagara-sized waterfalls.

The polluter doesn’t pay after all

Today the UK government begins its sale of 4 million carbon permits, equivalent to the right to release 4 million tons of carbon into the atmosphere. The sale is to electricity producers.

Despite the fact that this is a sale, not a giveaway, the permits are effectively free, because the public - you and me - have already paid for them.

Last year the power generators were given the permits for free - just to get them interested. (Apparently the alternative of being refused permission to sell electricity wasn't sufficient incentive to cough up.) But they passed on the 'cost' of these permits - i.e., the nominal price - to us consumers anyway. So even though they were free, electricity prices went up to reflect the cost of permits!

What does that mean? It means that this year the power generators have a large wad of cash - taken from us last year - with which to pay for permits. And they will of course pass this year's costs on to us too - which means that next year, they will again have a nice wad of cash - taken from us this year - with which to pay for permits. And so on, and on, forever.

In other words, unless the price of permits goes up radically or they need to buy a lot more, they will never pay for the pollution they cause. The polluter pays only for the marginal changes – it’s the polluted who pay the bulk of the costs.

Don't markets work well - especially if you control the market?

I am Jack the Ripper

Although my personal life is pretty dull, family mythology claims that I am related to some pretty exotic characters.

My father once told me that somewhere back there we are related to William Palmer – one of Britain’s more prolific murderers. He also told me that an uncle of his had once been chased through the streets of Whitechapel (where, by coincidence, I am writing these words) by a lynch mob eager to avenge the latest of Jack the Ripper’s crimes, which had taken place that just evening. It was foggy and my uncle, a craftsman, carried his tools in a Gladstone bag just like the one Jack was supposed to keep his tools in. He only escaped by running into a police station.

So was my great-uncle a suspicious character? I suppose so – hadn’t he been ‘linked’ to the unsolved Jack the Ripper murders? So was my father a suspect too – a ‘relative’ who might have led him into evil ways - suspicious? Am I too suspect – after all, I am a 'known associate' of my father’s?

Presumably so, if America’s Black Helix system is to be the judge. This is the very hush-hush database that currently being populated with up to 9000 new sets of DNA each year, taken from terrorist ‘suspects’.

Based on Guantanamo, the very word ‘suspect’ is suspect. Who says they are a suspect? Any old soldier who rounded them up and chucked them into the military paddy-wagon for ‘processing’ – and six years of imprisonment and abuse without charge? Who is suspect here – the ‘suspect’ or the soldier? Or the soldier's officers? Or the military command structure? Or the US government?

So the basis on which such suspects are ‘suspect’ is doubtful. But over and above that, what they are often suspected of is resisting a foreign invasion of their homeland. Which is not, as far as I can tell, a crime. Certainly not in the USA, where I doubt that many would resist the call to arms merely because the United Nations had said that invading them was OK or they didn't have a current set of dog-tags.

So many of these suspects are not really suspected of anything, and the thing of which they are not really suspected isn't actually a crime. But they are suspects anyway. We know - they are in a very hush-hush database. So they must be. No smoke without fire.

And so they will remain, dogged by this label for the rest of their days.

I can’t imagine how many things I must have done that would render me suspicious to the American authorities. Demonstrating against the war in Vietnam. Demonstrating against apartheid. Being rude about George Bush. Comparing Sarah Palin to a pitbull (hang on a minute...). This blog generally.

So someone gets a sample of my DNA and puts it into Black Helix. Thus am I branded for life. Just ask the right people and they will tell you, Oh no, he’s a bit ... suspect. Quite right too – wasn't there something about being connected to someone who was ‘linked’ with Jack the Ripper? Haven't I even ‘confessed’ to it - right here?

I'm all in favour of using databases to keep the world safe from terrorists. I just want them to pay some attention to the people who terrify me. Which right now doesn' t include anyone from Iraq or Afghanistan or any normal Americans. But it does include quite a few people from the US government.

Financial WMD

It is now six years since Warren Buffett wrote his famous description of derivatives as ‘financial weapons of mass destruction’ – a phrase that is now quoted left, right an centre. It comes from his summary of his company’s investment strategy:

We try to be alert to any sort of megacatastrophe risk, and that posture may make us unduly apprehensive about the burgeoning quantities of long-term derivatives contracts and the massive amount of uncollateralized receivables that are growing alongside. In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal (Berkshire Hathaway, Annual Report, 2002: 16).

By and large, this is all you ever read about Buffett famous words – a splendidly resonant phrase. But after a quarter of a century in serious research, I have found that there’s nothing quite like going back to the source. So if you read the report in full (come on, it’s only 78 pages, well written and strangely human for a business document – I rather like the author), you will find an astonishing critique of contemporary business practices, especially among the investment houses. Here are a few of his more striking words from 2002:

Despite three years of falling prices, which have significantly improved the attractiveness of common stocks, we still find very few that even mildly interest us. That dismal fact is testimony to the insanity of valuations reached during The Great Bubble. Unfortunately, the hangover may prove to be proportional to the binge… (pp.15-16)

Accountability and stewardship withered in the last decade, becoming qualities deemed of little importance by those caught up in the Great Bubble. As stock prices went up, the behavioral norms of managers went down. By the late ’90s, as a result, CEOs who traveled the high road did not encounter heavy traffic.

Most CEOs, it should be noted, are men and women you would be happy to have as trustees for your children’s assets or as next-door neighbors. Too many of these people, however, have in recent years behaved badly at the office, fudging numbers and drawing obscene pay for mediocre business achievements. These otherwise decent people simply followed the career path of Mae West: “I was Snow White but I drifted.”

In theory, corporate boards should have prevented this deterioration of conduct. I last wrote about the responsibilities of directors in the 1993 annual report… There, I said that “If able but greedy managers overreach and try to dip too deeply into the shareholders’ pockets, directors must slap their hands.” Since I wrote that, over-reaching has become common but few hands have been slapped. (p.16)

This is followed by a severe critique of allegedly ‘independent’ directors (p.18-20), of whom he declares that ‘their record has been absolutely pathetic’ (p.18), and an insistence that most investment managers perform at a mediocre level (a claim that research bears out fully) but over-paid. Perhaps most strikingly of all are Buffett’s business principle no.7 - ‘We will reject interesting opportunities rather than over-leverage our balance sheet’ (p.70). His preference for a fair price over a high one (p.72) and his attachment to ‘intrinsic value’ (p.73) are pretty striking too.

Unfortunately, having captured the effects exactly, Buffett get the causes quite wrong. He insists that the main cause of this is the difficulty of asking for a mediocre CEO to be fired when you are a member of the same little club, ‘the board’. In other words, the problem is essentially one of good manners.

Well, at least he isn’t going on about personal greed exclusively. Like greed and irresponsibility, weak governance and social constraints do indeed prevent decisive action from being taken. But if the present situation – not to mention to repeated mis-selling scandals – makes perfectly clear is that problem is actually systematic – and that the ‘system’ at fault is market capitalism itself.

Or rather, it is not market capitalism, because another thing these scandals and crises have made clear is that few contemporary ‘markets’ are any such thing. Rather, it is capitalism as such, which if not regulated and, where appropriate, directed and firmly controlled, simply demands the maximisation of profit by whatever means possible. It may help in such circumstances to have a lot of greedy people running the show – people how can be relied upon to maximise their own returns. But as the behaviour of the companies themselves has demonstrated time and time again, this is quite in line with the company board’s own goals.

Perhaps it is worth recalling another major scandal of recent years – the fall of Enron, Global Crossing, Worldcom and above all Arthur Andersen. Perhaps it is an urban myth, but I distinctly recall hearing that the most common response of many figures in the City to their tame Andersen partner was ‘Why didn’t you do that for us?’

This crisis is not about greed or poor internal governance. This is the normal operations of capitalism when it gets to decide its own rules. We would do extremely well not to forget this – and, if necessary, consider alternative arrangements.

Bye bye Sarah

Wonderful. Obama wins.

However, in the interests of political balance, I must admit that the high point for me was the most beautiful sight I have seen in many years - Sarah Palin choking back the tears. Bless.

Sadly, Alaska didn’t go Democratic (though I can’t help feeling that’s mostly because Palin's environmental policies pretty much decimated the polar bear vote), but you can’t have everything.

I feel quite sorry for Obama – a great guy to elect, and a truly crushing victory, but what a dreadful time to be elected. An economy in collapse and two wars with no politically acceptable way out of either. Iraq already in the hands of fundamentalist Shi'ites and Afghanistan completely unwinnable.

Not that Obama will be short of goodwill – after 8 years with Dubya, Obama could hardly be more welcome. I think most non-Americans would have welcomed a three-headed Martian. Or a bucket. Going by the vote, so would most Americans, if only the bucket went to church.

Yet to tell you the truth, I was quite looking forward to McCain winning. Nothing to do with the policies (puh-lease...), but I was rather attracted to the image of him dropping dead right after his inauguration and watching Ms Palin run the planet for four years.

I agree that total environmental collapse and global war is a high price to pay for four years of Sarah Palin accidentally satirising herself 24 hours a day, and there is something quite draining about the prospect of a president who makes Dubya look deep. But on the plus side, it would finally awaken Congress to the need for more terminal measures against pitbulls, no matter how pertly the lipstick was applied.

Celebrities - so what?

Hard to find much to say about a couple of grubby boys on TV.

All celebrities remind me of the end of The Truman Show – although everyone’s completely enthralled while it’s on, the moment he walks away they just change channels and watch something else. That’s the difference between being a celebrity and someone who matters (such as my doctor, children’s teachers, even my dentist).

What worries me rather more us that there is a constant supply of celebrities to be enthralled by, though – it’s becoming increasingly difficult to keep a hold on real life.

Nationalisation is a right-wing policy

Today the Financial Times reported that:

The overwhelming majority of Germans would welcome the nationalisation of large segments of the economy, including its energy, transport and financial infrastructure, according to a new opinion poll that underlines the strength of popular opposition to free-market liberalism in Europe’s largest economy.

Perhaps there will be unreconstructed lefties like me cheering at the news.

Well, not really ‘unreconstructed lefties like me’, given that nationalisation is a truly bogus leftwing policy. What does it achieve? Instead of organisations being directly in the hands of capitalists who prefer profit to people, they are put in the hands of the state. But in what sense is the state anymore leftwing than business? It is true that, under a leftwing government they may be put to socially progressive purposes, but when can we expect to see a leftwing government again? Who would be a candidate? The current German government? The current UK government? Any current government?

And once they pass into the hands of a rightwing government, what can we expect of them then? Only that they become instruments of a pro-capitalist economic and social policies, starting with starving them of resources and holding down state workers’ pay as a way of controlling private sector wages.

No, the leftwing solution is not nationalisation but socialisation – direct control over economic organisations by their workers and managers, based on unqualified legal title and unqualified democratic control.

Getting the sums right

The International Energy Agency – described by the Financial Times rather implausibly as the ‘oil watchdog’ – announces that if we don’t invest very heavily indeed in new exploration and production, world oil production can be expected to fall by 9.1% per annum from now on. Apparently meeting the demand from China, India and other developing countries’ demand will cost around $360bn each year until 2030. And even if we do make all that investment, it will fall by 6.4% anyway. So peak oil is well and truly here.

Curiously, this does not occur to the FT, who then add that the IEA has consequently revised its projections for oil consumption downwards from 116 mbd (million barrels a day) to 106 mbd - a little under 10% less. Yet we are currently producing only about 87 mbd. So according to the FT, if we start with 87 and subtract at least 6% a year, we will get to 106 in 2030…

Who says educational standards are falling? Evidently some of the best educated members of my own generation – the FT’s journalists – can’t add up either.

But the FT are hardly alone in this peculiar visual impairment. Governments everywhere seem to be totting up the figures for economic development – especially in the developing countries – and coming up with equally fantastic numbers for all sorts of things. Oil, gas – even coal looks a bit shaky now. Industrialisation will proceed apace, yet the supply of many of the most important inputs will peak soon. Nor do we have even an idea about substitutes for most of them. So prices will rise and rise, supplies will grow scarce and then fall to nothing – but industrialisation will proceed apace.

Population too – it will level off at around 9 billion sometime around 2050. Yet many of the basic ‘inputs’ for population growth – water for crops and drinking, fertile land, farming skills, people in the right places (i.e., not in giant slums) – are not only in hopelessly limited supply for such a number but we are actively reducing them by our current policies. We are currently producing less and less cereals per head each year, we spent most of the summer sorting out a global crisis in rice supply, we are responding to the melting of the glaciers on which a huge proportion of the world relies for basic drinking water by introducing crops that demand more water – but there will still be another 2,500,000,000 of us by 2050.

Why the double vision? Because a) we don’t want it to be true, b) most of the tools we have for analysing the problem simply don’t work when faced with problems like this, and c) we haven’t a clue what to do about it, not least because we have absolutely no faith in popular willingness to support radical change.

Take environmental economics – surely that can give us the answers? The clue’s in the name!

Not really. Like all other flavours of ‘modern’ economics, environmental economics assumes that most problems can be understood in marginalist terms - balancing claims on our resources to maximise marginal utility, optimise the distribution or substitution of resources, etc. But it has nothing to say about a situation in which resources fall below basic survival level and we haven’t any substitutes, or where the decision to be made about ‘utility’ is about who will die and who won’t. Not really a ‘marginal’ question, unless you are willing to regard the falling over the edge of a cliff as just another incremental step.

That doesn’t add up either. Perhaps it’s time for remedial maths classes for economists or politicians.

A summary of where I think we are now

The problems posed by the human impact on the environment are huge and extremely urgent and we have no previous experience in solving problems of this type or magnitude. The means at our disposal are not only essentially incapable of solving these problems but they are inherently inclined to make them worse. Yet there is no time to create new systems. Therefore the only realistic option is to learn to manage these systems far more radically and on a far larger scale than we do at present. But so radical are the necessary changes that they are likely to be heavily resisted, and resisted by some of the most powerful forces on the planet.

The problems posed by the human impact on the environment are huge and extremely urgent. We need to reduce the impact we are having on the environment radically. In the leading industrial countries we need to reduce our collective carbon footprint by 90% or more, or perhaps even shift to a carbon-negative economy, in which we compensate for past excesses by absorbing more carbon than we emit. We are starting to move, but even the most ambitious national and international targets commit us to probably failing to halt this process. Meanwhile, almost every worst-case scenario – Arctic melting, climate damage, habitat loss – is turning out to be the best case. At this rate, we may well be living in the last century – if not the last few decades - of industrial civilisation.

At the same time, many strategic materials on which our current economic system relies – not only oil and natural gas but many metals and minerals - will become scarce to the point that they will start to disrupt our current economic systems within the foreseeable future. A number of absolutely basic resources such as fresh water and fertile soil will also come under threat within the same timescale, affecting so many people (especially in developing countries) that their effects are imaginable only if you are prepared to imagine the very worst.

But we started to exceed the Earth’s carrying capacity about a quarter of a century ago, and we have already started to witness the consequences.

We have no previous experience in solving problems of this type or magnitude. Pundits like to compare the impending crisis with the Second World War. As the next couple of chapters will make clear, if we do not take vigorous actions quickly enough, the fall of the Roman Empire may well turn out to be a better comparison – if not the last Ice Age. We are already losing – in many cases, actively destroying - the means to solve our problems. Within a few decades the losses will trigger a sequence of environmental implosions in which the collapse of this or that area – the Amazon forests, the Siberian tundra, vast undersea methane hydrate reservoirs - will release enough additional carbon to change the question from ‘How do we manage this?’ to ‘How do we survive this?’

Other events will be equally devastating. The melting of the Greenland and Antarctic ice sheets alone will make some of the world’s most heavily populated areas uninhabitable and flood many of the world’s greatest cities. The droughts that inevitably follow the final melting of most of the world’s glaciers (which feed many of the most important rives) will turn many of the world’s most densely populated – and nuclear-armed – regions to scrublands capable of supporting only the most meagre of populations. In the same timescale we can expect some of the world’s most fertile and productive agricultural areas to fail, including the American Midwest and California’s Central Valley, several of China’s rice-growing regions$$ and the Ganges valley.

Taken together, these processes will combine to ignite civil and political conflicts on an unprecedented scale even while massively damaging the social and political systems we rely on to manage such conflicts.

Meanwhile, the means at our disposal to solve all these problems are not only essentially incapable of solving these problems but they are inherently inclined to make them worse. Faced with any global problem, our most important resource is our economy. It is this that produces the means to do anything else, especially create the new systems and technologies we will undoubtedly need to deploy to escape our predicament. More than three decades after the first credible warnings of what would happen if we continued with unabated industrial growth and almost two decades since global targets and agreements on climate change were first promulgated, we have failed to meet practically every target we have set ourselves.

The fundamental reason for this is, straightforward enough. A capitalist economy relies absolutely on the continual expansion of profits. Without continuing the cycle of profit, investment and profit, it has no rationale and will cease to function. With that, all the remainder of society that relies so entirely on capitalist relationships – employment, consumption, taxation, government – will also collapse. With such a large proportion of all capital tied up in industrial machinery, global transport systems, vast retail networks and an enormous advertising and marketing industry – not to mention an almost official post-ideology ideology of consumerism – not only is our current economic system not designed to help us cut back, but it positively demands endless expansion. Although industry as such is not a problem – any machine can be turned off – capitalist industry is an absolute catastrophe. Under a capitalist regime, turning off the machines would put an end not only to the profits but also to the only system we possess that is capable of creating the means to solve our current environmental problems. Even replacing them with more environmentally friendly alternatives before they had recouped their original investment would cripple businesses.

Yet there is no time to create a new economic system. The problem is Now, and every past transformation as radical as the replacement of capitalism has taken literally centuries. Therefore the only realistic option is to learn to manage these systems far more radically and on a far larger scale than we do at present. The famous ‘turning on a penny/dime’ at the start of the Second World War is encouraging, but the changes needed now are far more fundamental. We have longer to complete them, but there is scarcely an area of everyday life they will not touch, and unlike the changes wrought at the start of the Second World War, this is not a transient change to be made in the face of a clear and present danger. If we are to succeed, we must take far more radical steps than anything ever contemplated before, forcing an extraordinary level of change (and perhaps disruption).

But so radical are the necessary changes that they are likely to be heavily resisted, and resisted by some of the most powerful forces on the planet. The situation is essentially that the next century will be by any standards the most expensive century in human history. That is, we will be investing not so much in grow as in change – often accompanied by shrinkage. Faced with such a situation, most governments and practically all businesses will try to deal with this problem by either evading their responsibilities or making someone else pay for them. Given that at least a significant fraction of governments and businesses have demonstrated a willingness to obtain economic resources and avoid social obligations by a combination of force and fraud, this may well prove to be the most violent century in human history too.

Yet there is a great deal we can do. But only if we are prepared to face up the reality of the situation, and only if we are willing to take action. Now.

New York expresses its solidatory with the beleaguered banking community

Tax the rich till they hardly notice!

Descending briefly from my City eyrie in search of a decent cup of coffee, I am accosted by Mansoor. He sidles up to me, looking mischievous and slightly guilty, and it is soon clear why. He works for Shelter, the housing charity, and after a while people like him realise what evil parasites they truly are.

For what does Mansoor want from me? He wants £5 a month to help a homeless family get back on their feet. And why should he feel bad about that? Because as far as most people seem to be concerned, he might as well be asking the earth. When we walk a little too swiftly past Mansoor, carefully avoiding eye-contact and pretending we are too busy/already gave/dum-dee-dum-dee-daa, we know what a bunch of liars and moral inadequates we are. And we feel bad. And it’s all Mansoor’s fault.

But I stop and talk. We talk about how the poor are rendered invisible. How we seem to hate (or at least despise) the poor. Well, that's what I say, and he doesn't seem to disagree, though I have found that when I say things like that to charity workers, they get a bit nervous. Perhaps they have been trained to get the punters on their side, to appeal to their better natures. Waste of time, I would say - the ones with a better nature do not need it appealing to, and the ones without have already walked right by. As a measure of just how effective the charities' approach is, Mansoor is absurdly grateful that anyone is willing to give him two minutes, let alone £5 a month.

So there Mansoor and I stand, right on the edge of the world’s greatest financial centre, surrounded by more money than anyone could even imagine, talking about £5 a month to give children a roof over their heads.

So how much money are we surrounded by? Just the other day I found out that, each year, the total value of all the transactions carried out around here runs into the quadrillions of pounds/dollars/euros. I don’t know how much that is (other than that one quadrillion is 1,000,000,000,000,000), but I do know that we could solve all the world’s poor’s problems with a minute fraction of that much money.

And then I have a bright idea. Why not take a minute fraction of that much money? Straight off the top. How about taking just one millionth of the total value of every transaction that goes through London, New York, Hong Kong, Chicago – all the top 20 financial centres – and putting it into a fund whose sole purpose is to solve the problems of the world’s poor. Starting with their debts to the world’s richest, perhaps.

How about starting off by asking the London Stock Exchange to consider it as part of their corporate social responsibility? Ask them to give it all to environmental charities as part of their offsetting for the zillions of air flights their members make every year?

How much would that raise? I’ve no idea how much it would come to in total, but it would come to a billion out of every quadrillion pounds/dollars/euros worth of transactions. Would it harm our economies? I would guess not. Hard to see how raising a billion in a world that operates in quadrillions would come to more than their coffee money.

Good man, Mr Greenspan

Well at least someone's putting their hands up. From this morning's Financial Times:

Alan Greenspan, the former Federal Reserve chairman, said on Thursday the credit crisis had exceeded anything he had imagined and admitted he was wrong to think that banks would protect themselves from financial market chaos.

“I made a mistake in presuming that the self-interest of organisations, specifically banks and others, was such that they were best capable of protecting their own shareholders,” he said.

Good man (though he does qualify his responsibility a little later in the story). Now maybe we'll see as much candour from the FT itself. (Though with panto season looming, I am tempting to add, 'Oh no we won't!')

Transition Romsey

In case you live in the Romsey, Hampshire area - they are thinking of starting a Transition Town initiative.

A meeting will be held on 30th October on Transition Towns at the Abbey United Reformed Church Hall, from 7.30 to start at 8 pm. Richard Barnett from New Forest Transition Community will be speaking at the meeting.

(See http://transitiontowns.org/New-Forest/New-Forest for more info on New Forest Transition Community.)

Pundit, heal thyself

An interesting article in the Financial Times this morning, from Michael Skapinker, entitled ‘Our sorry need for others to apologise’. It is about how the overpaid idiots who brought the financial system down around their heads and so will cause millions to suffer – lost jobs, lost pensions, lost futures – still can’t bring themselves to say they’re sorry. The reason, says Skapinker, is cognitive dissonance – which is to say, because saying they were sorry would mean they were not the wonders of nature they imagine themselves to be.

I suspect there is another, more serious problem – which is that they really don’t think they’ve done anything wrong.

Be that as it may, I would like to apply Skapinker’s complaint to another group – the cheerleaders for deregulation. Step forward the Economist, the right-wing press – and the FT. As Skapinker himself puts it:

Then there are those of us – governments, regulators, ratings agencies and journalists – who never blew the whistle... It is worth asking why bankers find it hard to apologise. It is also worth wondering why the rest of us need their apologies so badly.

But that is a bit selective - what about all the others he mentions - the governments, regulators, ratings agencies and journalists? More specifically (and just to prove that I can be as selective as the author), when can we expect an apology from the FT, Mr Skapinker?

The answer is, of course, never. The stock in trade of journals like the Economist and the FT is that they know more than you and me - and, in their case, that they are cleverer than you and me too. Which is hard to stomach, especially at times like this, but it does make it difficult for them to admit that for more than two decades now they have been endangering society as a whole with their willfully ideological advice.

Not that I have any problem with ideology. In fact I have far more problems with people with no ideology. But they really should get theirs straight. If they must go for Adam Smith, they really should get the whole story. Smith refers to the shibboleth of FT-style economics, the 'hidden hand', only once in the whole of The Wealth of Nations - exactly as many times as he describes business people as -

an order of men, whose interest is never exactly the same with that of the public, who generally have an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

Even landlords, who are otherwise roundly criticised by Smith, are seen as being in greater harmony with society as a whole than capitalists, and he presents the condition of wage labourers - which has declined so badly relative to that of capitalists - as a sensitive barometer of the state of society in general.

I look forward to the FT and the Economist checking out their evidently untouched copies of The Wealth of Nations and apologising to the world for their ignorance and sophistry. We will try to forgive them. Maybe.

Strings, relations and dialectics

As I understand it (ha ha), one of the fundamentals of string theory is that it replaces the default assumption of pre-string models of matter. That view is that matter is composed of things. that is, in the classic image, billiard balls, or, in quantum terms, the zoo of structural particles - electrons, protons, and so on. Relationships between these particles are then created by the exchange of 'messenger' particles - gluons, gravitons, etc., and so on.

Instead, string theory assumes the reverse - that matter is undifferentiated, but that the highly differentiated structure is created by relationships between the basic components, which is to say, strings themselves. The 'zoo' is an illusion created by looking at the same things from different points of view or in different syntheses.

If this (or anything like it) is correct, can a true relational theory of matter be far behind, that allows a unified theory of complex matter to arise on the basis of relationships and relationships between relationships, up to and including not only physical but also chemical, biological and intelligent structures? And that, because it is based on a relationships rather than things, defines each new layer of matter (chemical, biological and intelligent) in terms of their abstraction from their predecessors rather than by the accumulation of forces and factors, and so permits the higher levels (not least intelligent structures such as logic and mathematics) to have an inherent relationship to the lowest, and so explains their otherwise quite unintelligible validity?

Or, beyond even that, a true dialectics of matter?

Carbon leakage

Something I don't quite understand. About three weeks ago a member of the UK government appeared on the BBC, proudly claiming that the UK were successfully meeting their carbon targets by exporting manufacturing to China.

Leaving aside the obvious loud Doh! this warrants (where do they get these clowns from?), it also raises the whole question of carbon leakage. Today, for example, the Financial Times reports that industrialists in the EU are threatening to move production to areas where carbon emissions are not yet regulated (India, China, USA, and so on) if they don't get some concessions about targets.

But how have we arrived at a situation where such a threat is possible, or was not foreseen? Can we not require companies registered in the EU to calculate the total carbon cost of their good and services, regardless of where the inputs come from and the outputs go? Presumably not, but if we don't, what hope do we have of controlling emissions.

Free will and determinism

A rather long theoretical speculation.

Free will and determinism are generally treated as polar opposites. Here is a hypothesis that starts from that position and concludes with them being identical.

Human free will is difficult to establish. The concept itself is extremely evasive and analysing consciousness and decision-making (which I take to be among the more intractable issues for free will) is fraught with contradictions and infinite regressions. In addition, many of the material determinants of human action and experience are clearly external to the human individual, either as social or as natural entities. As such most social and natural conditions would necessarily limit our material freedom, even if free will were in principle possible. Unlike writers for whom the conceptual analysis of free will and practical constraints on freedom are to be studied separately, I would argue that the reason why the concept of free will is too hard to pin down is the same as the reason we are not, in practice, free.

Essentially, we lack freedom either because of the relative immaturity of the subjective intelligence through which we exist in the world or because of the limitations (gaps, mistakes, conflicts and contradictions) of the objective systems and relationships by which our worlds are actually composed. That is, we are prevented from achieving what we set out to achieve because the structures on which our actions and experience are based stop us from succeeding. It is not simply a matter of weakness: defeat of one kind or another (including subversion, diversion, distraction, disablement and frustration as well as outright defeat) is often built into the very systems and processes through which we act.

For example, even within our world of formal social freedoms (citizenship, equality before the law, and so on), the contradictions that beset our relationships with bureaucracy, representative democracy, economic activity and the law are too well known to need elaborating here. And once again, these are contradictions, not just misfortunes: the problems are built in. Others, created by inhabiting a world made up increasingly of money, commodities and roles, are less obvious, though they are often yet more fatal.

Furthermore, because these structures are contradictory, they prevent us from experiencing the world (or even our own experience) in a coherent manner. This in turn stops us coming up with any way of fully or accurately describing or analysing that experience without working through a huge range of social and historical systems, and so of formulating our goals and intentions adequately in the first place. Furthermore, the vast scale and complex yet ambiguous structure of our social systems makes it unlikely that many people will have the necessary knowledge, or any idea of how to acquire it, or any idea that it is needed.

For example, a capitalist society creates a basic individualism that prevents us from seeing straight away that our problems are social and historical rather than psychological. For most people, the response to bureaucracy, injustice and the general malaise of everyday life is personal frustration, resignation and depression, not social analysis, organisation and action. We divide our efforts between work and consumption, and even these supremely social activities are experienced in terms of a narrow individualism or, at best, instrumental social groupings (office, shopping mall, public transport) to which we commit little of ourselves. This perverse structuring of action and experience both creates innumerable illusions about how the world really works and effectively undermines every attempt to do something about it.

For example, in work we are typically isolated as individuals and functional groupings, and the knowledge we have of the larger systems and relationships we need to do our jobs is generally very narrow. There are timetables, duties, targets, techniques, but little meaning outside the group or the even the task. And in consumerism, we exist solely as isolated individuals, in families and other small, specialised and isolated groups.

So by and large, the only knowledge we need to operate within society is at the level of simple, formally prescribed facts (a great deal of which is anything but correct at any profound level). The massive social and economic processes whereby we ended up there at the supermarket are treated as a combination of the trivially obvious, too dull and difficult for non-specialists to bother with, and none of our business.

At the same time, we are constantly bombarded by complacent and unimaginative politicians, newspaper editors and pundits, and endless other spokespeople for the status quo telling us that we are all already free – or, with one of those small, resigned twists in which modern ideology excels – we are as free as we should try to be.

Even for professionals who specialise in such questions, social life is not exactly training for solving problems of free will and determinism! In fact, the disciplines of history, philosophy and the social sciences seem to be almost as confounded by these assumptions about how our lives work (if that is the word) as everyone else. I doubt that one sociologist in a hundred could explain the idea of alienation.

The basics of the real processes through which all this takes place should be all too familiar to need explaining, though they certainly are not, even for those with a background in the social sciences. Or perhaps they should be anything but familiar. After all, why would any social system regard a theory that that system does not make sense as a tool for making sense of itself? It would be a confession of failure and futility and an invitation to do something about it.

On the other hand, if the ways we understand our relationships to the world and to one another and the systems and structures through which we actually live are so closely interconnected, creating a world of freedom and conceiving of free will properly ought to be mutually fruitful enterprises. If we could do something about these endemic contradictions that constantly frustrate freedom we would be able to grasp the concept of free will, and the more thoroughly we work through the conceptual contradictions (including their social and historical aspects), we more clearly we will know how to go about creating a world in which genuine liberty is the norm.

So what is the general model of freedom I am arguing for? In brief, freedom is lacking whenever the structures that determine either our intentions or the means to realise them are outside our control. If everything that controlled both how we grasped the world and what we wanted, expected, needed (and so on) was (in some sense) a part of ourselves, then we could say that the ways we conceived of our existence in the world and the structures that through which that existence was enacted were one and the same, both with one another and with ourselves. In other words, the structures that determined and realised our will would all be part of ourselves. It would thus be free will, yet wholly determined, yet subject to no material constraints or limitations from beyond itself. Conversely, if we could internalise within ourselves over all the structures needed to materialise those intentions and desires in the external world of practical reality, there would be no constraints on the exercise of our free will either. In other words, our free will would be exercised in freedom.

But what are the structures that need to be created to freedom to be achieved? And, given that the structures that impinge on the exercise of our will might be found anywhere in the entire universe, in what sense could they possibly be internalised? I have tried to describe in detail the historical and phenomenal processes through which truth and freedom (for truth and freedom come down to the same thing) can be reconciled with determinism in my The History of Human Reason. But in the most general terms, this argument entails that a) such a reconciliation is possible, and b) it is susceptible to scientific investigation in all its aspects, with no sneaky corners of irreducible indeterminacy.

Isn’t philosophy fun?

Which conflict of interest?

Another day, another patronising lecture from the FT.

Today it’s Jamie Whyte. He tells us, in the usual FT tone of pursed-lipped frustration with the foolishness of lesser mortals, that the problem with paying bankers is not that their incomes need putting under control but that the interests of bankers need aligning better with their employers. Then they would pursue the interests of their employers (the banks) with the same alacrity that they pursue their own. So banks would not crash about our ears.

No fooling?

But that is not the problem, of course. The problem is that the bankers always were pursuing the banks’ interests, because ramping up risk, mass mis-selling, bogus economics, self-importance and outright lies were not only consistent with what the banks were up to but were, in most case, actively propagated by both the banks and their spokespeople – the very bankers Whyte seems to think had another agenda.

In short, it was not the relationship between employer and employee that was broken but the relationship between both employer and employee and the society of which they were allegedly responsible members and on whose resources they battened with such enthusiasm.

But what ultimately is Whyte saying here? Quite simple - that there's nothing wrong with the system that a few tweaks cannot fix. Even though those tweaks look like costing us trillions of pounds/ euros/ dollars, not to mention the well-being of thousands who will pay with their jobs, well-being and social support.

I wonder how hard it would be to construct a handbook of excuses for those discovered causing a monumental cock-up? We certainly seem to have seen quite a few since Lehman’s went pear-shaped. Blame government. Blame the victims. Accuse those who predicted this mess years ago of 20-20 hindsight. Deny that there’s anything seriously wrong. Patronise those who are trying to clear up the mess.

I wonder how many we have yet to see? Considering how much effort and imagination this lot have dedicated to looking for (but not, it turns out, finding) loopholes in the basic laws of economics, quite a few.

BAU won’t work

A few words from Peter Mandelson on trade and climate change:

Trade is our basic means for spreading green technology. Carbon emissions
targets rely on the political and social will to change the way we do things.
But they also rely on the technologies that will enable us to change. Those
technologies are goods and services that are traded like any other.

So far, so conventional. In fact quite hard to argue with, in strictly economic terms. The obvious difficulty with Mandelson’s position is that it assumes that there is a match between need for environmental action and the money needed to take that action. But green technology goes to those who are willing to buy it, and they are not the same people as those who either want or can afford green technology. Trade is helpful in some respects – it greases certain kinds of economic wheel, and Mandelson may well be right to say that:

This is, in my opinion, the most important potential contribution of trade policy to the climate agenda. So we have to get it right.

But the problem we have with the environment is so much greater – much greater is size and scope and vastly more urgent – than anything trade alone could deal with that the very notion that trade might be even a major part of the overall solution - leaves one feeling slightly queasy.

Like almost everything else about the current climate debate at governmental level, this position assumes that ‘business as usual’ is a viable option. A bit more trade, some pretty substantial technical fixes, little more pump-priming investment, a little judicious regulation, and there we are.

Only we’re not, of course. The whole ‘business as usual’ approach is based on a single fatal assumption, namely that have time. Hence the extraordinary folly of senior government officials (starting with presidents and prime ministers) to the effect that ‘green’ and ‘growth’ are compatible. There is a formal economic sense in which that is perhaps true, but not in the sense that most governments seem to mean.

So what is the problem? Simple: the world’s economy ceased to be sustainable a quarter of a century ago. Sometime around 1980, we started to use the Earth’s resources more quickly than they could be replenished. Now, when the global economy is twice the size it was then, our collective ecological footprint is well over 1.25 times Earth’s entire carrying capacity.

So what would regulating or shaping trade on better ecological terms add? It would help us to make an awful situation get worse at a slightly reduced rate. Not much of an accomplishment.

What exactly is it that government’s don’t ‘get’ about our present predicament? In a word, that all their basic assumptions about a viable economy are simply false. Most of all, they don’t get it that the idea that economies can grow indefinitely is not only false in principle (you only have to be numerate to recognise that) but it is urgent, murderously, catastrophically false right now. We are already committed to serious environmental change even if we could stop growth this very instant, and every year we leave doing something about it, the more environmental change – and then damage, and then disaster – we are also committed to. But our governments are simply not taking this fact on board.

And there’s little point in Mandelson and other apologists for free trade asserting that:

Any strategy for addressing climate change that does not respect the right
of developing countries to a level of economic prosperity broadly equivalent to
ours simply will not fly in the developing world. An approach to climate change
that kicks away the ladder from the developing world simply won't work. So we
are going to have to break the link between economic growth and rising carbon
emissions through new power sources, more efficient energy use and new patterns
of behaviour, not by stifling economic growth.

This is complete nonsense. If we do not stop economic growth – at least in the sense of forms of economic activity that increase environmental damage – ASAP, it is the developing world that will suffer first and suffer worst. Equity in the current situation is a utopian dream – and I say that as a socialist for whom equity is the sine qua non of civilisation.

The fact is that there is no existing version of economic development for the developing world that is ecologically viable. There might be if the developed countries were willing to pay for it, but when has that ever happened? It is the developed countries far more than the developing that are committed to growth, who are causing much the most environmental damage per person and who will have the most trouble turning their economies around. But they also hold the whip hand when it comes to future development. If a country like China or India continues to develop industrially willy-nilly, it is they who will suffer from it. What would either of these countries do for water with the Himalaya glaciers gone? How will India and Pakistan or Laos and Cambodia and Vietnam look at each other when the Indus and Ganges, the Yangtze Kiang, the Huang Ho and the Mekong, the Irrawaddy and the Brahmaputra are all starting to run dry for a large part of the year?

No, these countries can afford the ecological consequences of climate change even less than wealthy western countries. And we have never shown any real interest in doing anything about it. What, short of a major ideological, political and economic upheaval will change that? Better trade agreements? I don’t think so.

A word from Francis Wheen

I don’t know a better summary of our ‘solution’ to the present economic crisis than the way it was explained by Francis Wheen on yesterday’s News Quiz on BBC 4:

The banks will be given £500,000,000,000 of our money and, in return, they are
going to lend some of it to us, and charge us interest on it.

I think that summarises very well exactly how rational our economic system really is.

Can we have globalisation part 2, please?

One of the most striking things about the current global meltdown is that the meltdown is global but the response is piecemeal. I have always been a fan of the idea of globalisation in general, but a complete sceptic about allowing it to happen at the behest of capitalist corporations and under the control of capitalist corporations and what can only be described as intellectually and politically supine national governments. To the extent that there is an effective global politics of any kind it seems to consist solely of organisations such as the WTO, whose role appears to be to further the interests of business.

In addition, the impact of this crisis are vastly more than financial. A the impact works its way through national economies, we can only expect the meltdown on Wall Street and in the City to mean suffering for many millions throughout the world. This crisis means difficulties for homeowners in Omaha and Frankfurt, but in the Third World it is going to kill people. A lot of people.

So what is the answer to the current global economic crisis? A global political response? As a temporary measure, yes – but also, now that global corporations have managed to demonstrate just how little they know how to manage the global economy, the time has surely come for a serious attempt to build a global political system. Without that it is hard to see either how economic globalisation can be made to work, even for those who run the corporations, or how the rest of us can be protected from its massive downside.

We won’t get it, of course. Our politicians have made sure of that. On the one hand they have abdicated responsibility for actively managing society to big business and on the other they have barred the doors to politics to everyone but the ‘professionals’ – i.e., people like George Bush, Gordon Brown, my MP and a thousand other talking heads with zero practical experience of running the world and zero insight into the real structure of global society.

Who's to blame? Not me, that's for sure

I love the Financial Times. Like every other player in the current global financial fiasco (do I mean fiasco? How about another word beginning with f, ending in -up?), they of course are not to blame. Some words from today's edition, from Gillian Tett, their capital markets editor:

For this package suggests that British mandarins have finally learnt to draw sensible lessons from the past...

How foolish of those silly 'mandarins' - to have listened to the FT for the last few decades, constantly telling these silly old bureaucrats how absurd they were to attempt to control the markets! I wouldn't be surprised to hear someone from Goldman Sachs or RBS telling us that it's my mother's fault next.

And no sooner do I write these word sand start reading the very next story in the FT - and I discover that yes, it was all our own fault! Apparently we should have seen through the mass hysteria drummed up by the financial services, the mass mis-selling, the outright lies, the bland reassurances that the bull market was forever, the obvious confidence our benighted governments showed in markets!

Well, all right I confess, I dunnit. And I would like 1973 crash, the 1987 crash and the Fall of the Roman Empire taken into account too.

A few days ago the journalist Stephen B. Gray emailed me with the following query:

I see from your web site that we have many viewpoints in common, and I have
enjoyed reading it. Maybe you can give me some help with the following
puzzle.

Christians sometimes use as an argument for God that advanced human
intelligence, the kind that lets us develop abstract mathematics and physics
(not to mention late Beethoven quartets, Mahler symphonies, Shakespeare plays,
etc.) would not develop on its own. One doesn’t need abstract thinking to make
better spearpoints. I assume a highly capable brain consumes even more energy
than a lesser one, so it would be evolved against unless it offered some
survival value over the long run. The question of course is why it did
evolve.

I am writing an article refuting many Christian claims but as yet I
don’t have an answer about development of high intelligence. Is there anything
you can say or point me to?

Good question. I hope my answer was equally good:

Hello Steve

It is certainly a puzzle, to which I am by no means sure I have the answer. There is a technical answer, which I suggest below, but I have also suggested a non-technical argument I have made elsewhere, which your audience might find more accessible. It's at the bottom of this email, and basically says, even if intelligence and the universe as a whole were created, it doesn't tell us anything about whether religion is true. Nothing whatsoever.

The traditional evolutionary answer to this conundrum is that there is still a massive pressure to improve our intelligence, but it does not come from competing with other organisms. Rather, it comes from other people. Social competition drives the reproductive advantage of higher intelligence, even though it is the classic 'expensive tissue'.

The only problems with this problem are that a) there is little evidence of such competition, and b) the development of intelligence does not arise from evolutionary causes. Other than that, everything's hunky-dory!

a) There is little evidence of such competition

There is an eminent cognitive anthropologist name Christopher Hallpike (one of whose books I happen to have published) who argues that the effective distance between societies, the existence of effective social controls o competition (especially for mates) and the general lack of selective pressures between groups means that evolution doesn't affect cognitive capacity very much. I am inclined to agreed with him. However, even if he's wrong, there always...

b) The development of intelligence does not arise from evolutionary causes

I have written a very long (but still unpublished paper) on this, but the gist of of it is that evolution created the potential for intelligence, but that potential is only realised in the course of individual development. So no amount of evolutionary pressure will explain why we have developed higher and higher levels of intelligence, any more than it could explain why one stone rolls down a hill faster than another.

Real answer

There real answer lies elsewhere. In essence, you can only explain why we reach such a high level of intelligence by looking at the conditions in which intelligence develops in the individual. These conditions are partly biological but mainly social. Again put very briefly (the details are set out at enormous and very trying length in my History of Human Reason), as social system become more complex, so the forms of activity in which one must engage to live in that society become more and more complex. Thus life in a hunter-gatherer society is of quite limited complexity, while industrial capitalism forces us to live through elaborate systems of roles, money, commodities, employment, law, bureaucracy ... As a result, the mere conduct of social life in a complex social system causes one to live a more demanding life, which generates both the experience and the demand to develop to higher and higher cognitive levels. And that, I believe, is the real reason why human beings have such advanced intelligences.

All this assumes that intelligence has the capacity to develop that far, even though, in many conditions, it simply doesn't. That's a bit of a puzzle too. How come all that potential was there all the time? But again the answer lies in the fact that evolution throws up only a potential for intelligence. In the case of most adaptations, you tend to be limited to incremental improvements. But in the case of intelligence, you get this sudden transition to intelligence in all its glory. The reason this is possible is that intelligence is a quite different kind of structure from other aspects of life in general, and as such has a vast potential to fulfil that has nothing to do with the usual limits of biological change. After all, if the whole development of intelligence takes place within the individual, then the whole potential must be present in each individual. So unlike the potential of living organisms, most of which is only realised as evolution replaces one species with another, the whole potential of intelligence as such can arise in anyone, given the right conditions. Spooky stuff.

But this is also the inconvenient part of the answer from the standard scientific point of view, because the standard scientific point of view does not generally allow for the possibility that intelligence has superseded biology as fully as biology supersedes chemistry. Nature does not make leaps, goes the conventional wisdom. To which I can only reply, does that mean that life is only chemistry, only more so? Still, it's a bit of an embarrassment. It's only merits are that ) it does not support religion either, b) it's entirely scientific, and c) it's true.

So you may find it convenient not to raise this issue until directly pressed for an answer!

Alternative answer

But if you are looking for comment on religions using arguments from human intelligence, I think you'll find this blog entry of mine (see below for all my blogs) more helpful. Basically, every single step in the theological argument is a non sequitur.

Mandy's back? How desperate can Gordon be?

Yes, Peter Mandelson's back in the Cabinet - a place from which he has twice been ejected in disgrace. To appoint a man who is perhaps the only person in Britain more heartily despised than Tony Blair - this is the sort of thing pundits usually call 'brave', though perhaps only because being more forthright would result in an action for libel.

Is there no end to Microsoft's selfishness?

Good old Microsoft. Just when you might have thought people were starting to get the message about how environmentally damaging flying is, they offer air miles to anyone using their search engine:

Under the latest plan, known as Search Perks, Microsoft said that US
internet users would be able to earn a “ticket” each time they conducted a
search on its Live Search site, then redeem those for things such as ... regular air
miles. (Financial Times, October 1 2008)

Well done. Another generation addicted to flying. Still, it serves a higher purpose - bribing Google users to jump ship.

If you are a Google user, please don't accept the Microsoft bribe. And God knows the world would scarcely be a better place if Microsoft gain control of yet another area of computing!

The Director of the LSE has an attack of attention deficit disorder

I suppose it had to start sometime around now - the excuses, the 'no one could have seen it coming' tosh from the bankers and their mates. Here is the learned opinion of Howard Davies. Sir Howard is Director of the London School of Economics and Political Science and one-time Chairman of the Financial Services Authority, the UK's financial regulator.

Some people saw it all coming, of course. The celebrated commentator Harry
Hindsight... has trenchantly argued that any fool could have seen that the credit expansion would end in tears, that regulators should have seen the trouble coming and headed it off at the pass. He would certainly have done so himself – though a diligent Google search has failed to unearth any warnings he personally gave.

I appreciate that a director of the London School of Economics is a busy man. According to his resume on the Morgan Stanley website,

Sir Howard J. Davies has been a director [of Morgan Stanley] since 2004. He has been Director of the London School of Economics and Political Science since September 2003. Sir Howard served as Chairman and Chief Executive of the U.K. Financial Services Authority (1997-2003), Deputy Governor of the Bank of England (1995-1997) and Director General of the Confederation of British Industry (1992-1995). From 1987 to 1992 he was Controller (CEO) of the U.K. Audit Commission.

So you think he'd have noticed. Nevertheless, Sir Howard really can't have been paying much attention over the last decade or so. Not only have the 'toxic assets' that are currently poisoning the world's financial systems been a routine topic of conversation for quite a few years now, but a number of related scams (this time wholly to the financial sector's benefit) have also been paraded across the public's screens. What about all those mis-selling scams? What about the Great Savings + Loan Scandal of the early 90s?

As for Sir Howard's tenure at Morgan Stanley, I can only assume he was brought in to help clear up the great stink of corruption that followed the enormous scam that surrounded the investment banks and cost them hundreds of millions of dollars in compensation to the clients they misled - Morgan Stanley included.

The fact is, this is only different because this time the financial sector have been so stupid (or irresponsible - or criminal) that they have collectively shot themselves in the foot - if not worse. Otherwise it's business as usual.

Why not send them to gaol?

Not too long back I posted my finding that most people I knew wanted Paris Hilton in gaol, but they didn’t think it mattered whether she had broken any laws. It was a matter of principle.

Likewise the leaders of the financial community who have led us into our current dire straits.

Today the Financial Times published an article by Martin Wolf bemoaning the irresponsibility of Congress for not coughing up $700,000,000,000 to save the financial system. The grounds were very reasonable –

We are watching the disintegration of the financial system. Finance is the web
of intermediation binding economic agents to one another, across both space and
time. Without it, no modern economy can survive. Yet that is now threatened,
with the ongoing collapse in trust and flight to safety. We can indeed run this
experiment. But why should we?

As far as the role of the financial system is concerned, I agree absolutely, and it would be insane not to fix the problems. And that’s coming from a devout socialist. (Strangely, in my experience socialists understand capitalism far better than capitalists.)

But this is one case where we could and should throw out the babies with the bathwater, or at least the throw out the bath attendants. They got us into this, and it is shocking that, if this measure goes through, they will still have their jobs – the very jobs they have proved they cannot do at the very pinnacle of the systems they have just proved are crucial to society as a whole. To tell you the truth, I’m quite shocked that, come the end of this process, they will still have their liberty. As I keep telling everyone I know (very nearly jokingly), the message should be that, once the negotiations about saving the system are over, they will all be off to gaol. We don’t really care what for – they just belong somewhere as dark and dingy as the misery to which they have sent so many other people.

A bit draconian? How about this then? The banks (etc.) get this financing on the absolute condition that they have completely replaced their leaderships within a year. After that, if we catch any of them running so much as a sweet shop, they go to gaol.

Still a bit draconian? I don't think so. What have these people done that deserves such bitter treatment? Just pushed the financial system Wolf rightly declares to be the hub of our economies over a cliff. They were give absolutely all the leeway to run their businesses they asked for. Nothing was too good for them as far as our brainless governments (who seem not to understand capitalism at all) were concerned. And what did they give us in return? The threat of the worst economic depression we have seen since the Thirties. The destruction of thousands – and if the more grim predictions are right, maybe millions – of jobs. Vast harm to millions of people. A crushing blow to the very economic foundations of society.

I’m sorry, but if I had deprived so many people of so much – money, safety, happiness, future - by such evident greed, indifference and stupidity, but done it in some other walk of life (bank robbery, perhaps), would I still to be loose on the streets, let alone being paid to carry on?

Large Hadron Collider rap

Forget matter and anti-matter, do you want to see what happens when the two most mutually alien forms of matter in the known universe - rap and science - meet? Then try this little ditty - with real scientists 'dancing' - authentic geekipods.

Enjoy.

Take your partners for the Lehman's Excuse-Me

(Yes, I know - what, you are thinking, could the collapse of Lehman's possibly have to do with the environment? The answer is that it displays one of the most important aspects of capitalism in its current guise, namely its ability to deal with a serious crisis. Read on...)

The current Lehman collapse gives us a flavour of what is likely to befall us all when markets are squeezed by rocketing energy, food, water and resource prices. Merrill Lynch (the home of prancing bull) are in trouble too, agreeing to be bought by Bank of America for $50,000,000,000. Stock markets and the dollar have fallen and AIG, the world's largest insurance company (who provide over a hundred billion dollars of capital to banks), are also on the skids.

It's not as though they did not see it coming. Already the 2007 World Economic Forum in Davos - long before the bubble burst, Lehman's boss, Richard Fuld talked openly about being "really worried" about the risks posed by property valuations, excess leverage and the rise in oil and commodity prices. "We're taking some money off the table," he said (Financial Times, 15/9/08). But nothing like enough it turned out, because they couldn't resist a few more juicy acquisitions and their foresight was a good deal less advanced than their ambition. As so often in business, they (and everyone around them, investors, governments and regulators included) thought they could walk on water, only to discover too late that they were just about to walk out of the shallows and into really deep water. And of course, they became more and more detached from reality:

Mr Fuld’s role in these decisions was hard to pin down because colleagues say he
was growing more remote. Mr Fuld spent an increasing amount of time in his
mansion in Sun Valley, a ski resort in Idaho that he has used for years to
entertain clients, or travelling around the world. “When Dick came over it was
like a state visit,” says one London-based banker. Some bankers believed, too,
that Mr Gregory shielded Mr Fuld from what was going on and discouraged
executives from raising criticism or reporting bad news. “Joe was like Dick’s
bodyguard,” says one senior banker. (Financial Times, 15/9/08)

So, with 'hundreds of billions of dollars' now expected to be lost (say the BBC), who do you think will actually lose their money? The Lehman partners? Merrill's directors? On the contrary, three of the latter are to join Bank of America's board. How about their clients, who also helped dragged us all into this catastrophic mire with their insane gambles? Nope. Profit, economists tell us, is a reward for risk - we take the risk, and they get the reward.

And no, that is not just a lazy, knee-jerk anti-capitalist jibe. As Peter Morici, professor of University of Maryland's business school and 'a recognized expert on international economic policy, the World Trade Organization, and international commercial agreements', has put it:

Performance-based compensation practices at Lehman and throughout Wall Street,
which pay big bonuses when bankers bet right but only imposes losses on
shareholders when they bet wrong, has propagated the kind of toxic financial
engineering that caused mortgage-backed securities meltdown, general credit
crisis, and the near-death experience of many Wall Street banks and securities
dealers.

So when Alan Greenspan opines that 'We will see other major financial firms fail but this does not need to be a problem. It depends on how it is handled and how the liquidations take place. And indeed we shouldn't try to protect every single institution. The ordinary course of financial change has winners and losers', I start to feel a little queasy. Just 'winners and losers', Alan? Such as pensioners whose pension won't get paid now? Such as workers who lose their jobs? Ah well, win a few, lose a few, eh?

So what lesson is being learnt? To quote the man from PWC (who will earn millions from burying Lehman's rotting corpse), 'What it underlines to me is the importance of market confidence'. No fooling. But can we draw a slightly deeper lesson? How about 'the ludicrous vulnerability that comes from fantasising that people whose sole motive is short-term profit are fit guardians of the world's economic health', even if they do wear nice suits?

Meanwhile, not too long from now, when oil and gas start going through the roof, who will be holding all our money then? Hard to name names, but it's a cast-iron certainty that quite a few of them will be ex-Lehman and Merrill who have managed to find another comfortable birth in some other bunch of Masters of the Universe.

So what specifically do we learn about how capitalism might handle a severe environmental crisis?

1. Despite being given long notice, most organisations simply won’t respond in time. We have known about the currently housing finance crisis for a decade - that there was a massive and fundamental financial weakness. That is not to say that the individuals who have been at the forefront of the current crisis have been stupid or short-sighted or greedy or wicked. The returns, while the bubble lasted, were good, and the overriding pressure business people face is to generate a return. It does not matter that the whole edifice is based on junk resources, just so long as the direction is upwards. Like all the other classic financial pyramids and bubbles, just as long as everyone else is buying, things will be OK – even though they are only buying because you are buying too.
   
2. When the crisis comes, it comes extremely quickly and for most people cannot be escaped. It is a classic case of exponential spread leading to systematic collapse. It means that years and decades of solid growth and self-congratulation may still be terminated in months or even weeks. Ironically, thinking about the environmental equivalent to this sort of crisis, one of the seminal books on the environment, the Club of Rome’s Limits of Growth (1972) is all about the logic, consequences and limits of exponential growth.
   
3. The economic crisis become systematic, affecting not only the sector in which the crisis was triggered but all areas of the economy. If AIG are indeed providing over a hundred billion dollars of capital, yet are undermined by their exposure to junk resources, then thousands of firms are going to find their loans called in or their interest rates pushed up when they are least able to repay them.
   
4. The victims will be spread throughout society, to the point where the social system as a whole is threatened. Millions of individuals work for those thousands of firms, have loans from banks, rely on income (e.g., pensions) from those investments, and so on. This in turn can only feed back into the economy in the form of people tightening their belts or claiming massively more in the form of social security and unemployment benefits.
   
5. The government will not be able to manage the problem. One company – a Bear Sterns, perhaps – is one thing, but a whole raft of major financial institutions going down is quite another. Just Merrill’s price tag - $50 billion even when it is in trouble – is equivalent of $160 each for every man, woman and child in the USA. And in any case, governments have so completely abandoned themselves to the idea that capitalist markets are the solution and so completely sold all their assets to the very people who are now in crisis that is will require a major ideological effort even to imagine that the answer is to protect society, not to salvage this fatally flawed economic system – or even recognise that these are two radically different problems.
   
6. The whole process will disable society even at the level of basic physical resources – in this case housing, in the future energy and industry as a whole – not because they somehow don’t work any more or people suddenly don’t need homes, but because the system of property evicts the only people who can use them in the name of organisations who ‘own’ them yet are completely unable to make any use of them.

Of course, an environmental crisis would not look quite like this. Nor are all the player's in the present investment bank crisis behaving quite as stupidly as Lehman's. John Thain, Merrill's CEO, was congratulated for being astute enough to call a halt before they too went over the cliff. But he was an outsider who came in in late 2007 with a cold eye towards Merrill's pretensions and culture. Who is going to perform that role for industrial capitalism as a whole when the real crises start to hit?

Yet the lessons are striking. Cheap energy is the resource-equivalent of cheap credit with no ability to repay the debts - precisely what caused the current credit crunch. As oil, like credit, becomes much more expensive, the effect on any number of major industries will be as inexorable as a huge rise in interest rates and collapsing currencies combined. And the shock effect will be similar – rigidities in the economic system, the vulnerability of society as a whole to crises that are (literally) none of their business, and the inability of government to deal with such a vast crisis.

As for what governments are really willing to do, even about the present crisis, it's worth noting that just a few days later, on 23 September, Philip Augar (author of The Greed Merchants: How the Investment Banks Played the Free Market Game - Penguin 2005), was writing the FT that:

The last time Wall Street was in the mire was between 2001 and 2003 when the
dotcom bubble burst. President George W. Bush pledged “to end the days of
cooking the books, shading the truth and breaking our laws”, but instead a patsy
settlement with the investment banks was reached in 2003 that imposed trivial
fines and minor rule changes but left their business model intact.

It's hard to see that, under the far greater pressure of a global energy or other environment crisis, they would do any better.

Mind you, the current crisis could have much greater political repercussions than initially meet the eye. To quote the FT again:

Meanwhile, the Federal Reserve threw open the doors to investment in the US banking industry by private equity firms, sovereign wealth funds and corporate investors – in the hope that this would direct much-needed capital to US banks... Morgan Stanley said earlier it would sell a stake of 10-20 per cent to the Mitsubishi UFJ Financial Group (MUFG) in a deal worth up to $9bn. The news came just hours after Nomura, Japan’s largest broker, confirmed it was buying Lehman Brothers’ operations in Asia and was in exclusive talks to secure parts of its business in Europe.

Does this signal the end of one of the USA's most cherished ideals - the option of isolation? Does it signal that the commanding heights of American capitalism are starting to go offshore? If so, we might start seeing a more global perspective starting to take shape in American politics too - which can only be (relatively) good, given the obstinacy of current American politics in the face of global environmental problems, to which the USA contributes so much and about which it has, so far, done so little.

Negative reality

A small contribution to science fiction rather than science, I suspect.

There is no such thing as a vacuum. Quantum theory tells us that, even if a vacuum existed, it would soon find itself being populated with particles caused by inherent quantum fluctuations. Once they come into existence these particles are normal enough, but a moment ago they simply weren’t here. So where were they? Nowhere. They just emerged out of a quantum flux.

And then there are negative numbers. I can have one apple, two bananas, three protons, four quantum physicists – but not -1 of anything. Why not? Isn’t that a bit of a paradox? No – as Piaget tells me, negative numbers represent not things but actions – taking away. So positing one apple is literally positing – putting into position. And by the same token, negating is simply taking away. Of course, when you get to zero, you can still hypothesise a lot of taking away – hence the negative numbers. Well...

Actually that sounds like a lot of sense to me. But I can’t help speculating in slightly more empiricist vein anyway (probably because I’m British). Is there a possible connection between these quantum fluctuations and negative numbers? How about this? There is a positive universe to which we have access, and a negative universe to which we don’t. That’s not to say that there is nothing there – it just exists on a plane we cannot touch or interfere with. On such an account, nothing/zero refers not to an absolute limit but to a transition point. Being creatures of the positive universe, we cannot make that transition, but that does not mean that matter as a whole is limited to our half of these cosmic Siamese twins. Indeed, that is exactly what the quantum fluctuations in the vacuum – the closest we have to physical nothing – signify – particles shifting between positive and negative universes.

Now, what would happen if we could fish in the vacuum and pull something a little more substantial through from the negative universe? I feel a sci-fi story coming on...

Better a pig than a pitbull

Beats me. A week ago, Sarah Palin proudly compares herself to a pitbull in lipstick. A couple of days back, Barack Obama completely fails to compare her to a pig in lipstick (he was obviously referring to McCain's policies), and she gets all hoity-toity.

Look, Mrs Palin, a pig is an intelligent and useful animal and a pitbull is an ugly, stupid, vicious, downright dangerous beast with absolutely no redeeming features. Now it is perfectly clear that you resemble the latter a good deal more than the former, so when someone says something a least relatively nice about you, try to be a little grateful.

Future for sale

I bang on a lot about how market economics is completely unsuited to our current environmental predicament. Here are a couple of practical - and potentially catastrophic - examples.

Now that we are growing crops for fuel instead of food, we have accidentally created a new nexus that markets have been quick to exploit – to all our costs. Now that corn is sought as eagerly by petrol companies as by food companies, the price of cereals for biofuels must converge with its equivalent in oil. However, even if, say, the USA converted all its crops to biofuels, it this would still barely touch its total fuel consumption, so the prices of cereals must move towards oil rather than vice versa - and the process of oil is currently a lot higher. So this will cause world food prices to rise – just as we complete the seventh year out of eight when we have consumed more food than we have grown, and prices are going up anyway.

Or how about this. In India, the city of Chennai – 7 million strong - is running out of water. So local water companies are buying the water from the farmers who till the surrounding land, who are happy to sell it because it is worth a lot more than any crops they might be able to grow by irrigating mere food. So sometime not long from now, when the currently falling water table has passed beyond practical or economic reach, there will be no more water – and no food either.

Nor is a Third World peculiarity. Cities in the USA (including San Diego, Las Vegas, Los Angeles, Denver, El Paso and many more) are perpetrating the same lunacy. Their water purchases run into hundreds of millions of tons and will undermine what is now invaluable farm land over decades and decades. And their purpose? To buy an unsustainable present in which vast quantities of water are squandered and paying for it with a truly terminal future.

But what can we expect if it takes 14 tons of water to make a ton of steel but 1000 tons to grow a ton of wheat, and the steel is ‘worth’ (treacherous word!) two or three times more than the wheat anyway?

Both classic examples of market economics, in which the commodity goes to the highest bidder, regardless of the consequences. Such a system cannot even see the consequences or distinguish human misery from a packet of cornflakes. Yet trade agreement after trade agreement places such arrangements ever more firmly in the driving seat.

And of course, if we don’t sort out a non-market mechanism for managing water soon, much worse will follow.

A pitbull in lipstick

Very decent of the Republicans to describe their own would-be Veep as a 'pitbull in lipstick'. Here in England, pitbulls are regarded as so dangerous that the mere possession of one is a criminal offence. If Mrs Pailn comes here, there is a real chance she will be put down - which could really put a dent in Anglo-American relations. And as far as most Britons are concerned, people who keeps pitbulls are inadequate saddos who really should get a life.

But Mrs Palin doesn't need to go quite so far to find out how most of the world sees her:

It is illegal in Miami-Dade County to own any dog which substantially
conforms to a Pit Bull breed dog... Acquisition or keeping of a Pit Bull dog:
$500.00 fine and County Court action to force the removal of the animal from
Miami-Dade County. [Legal code, Section 5 Code 17]

Pitbulls are also under some form of legal control in at least 23 other locations in the USA, not to mention Denmark, Australia, parts of Canada, Singapore, New Zealand the Netherlands and (now this will impress them) France ...

Hope no one shoots her - that would violate the fine American tradition of shooting only their presidents.