Category Archives: History

How Bronze Age Rulers Simply Canceled Debts

By Michael Hudson – My book And forgive them their debts”: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year  is about the origins of economic organization ad enterprise in the Bronze Age, and how it shaped the Bible. It’s not about modern economies. But the problem is – as the reviewer mentioned – that the Bronze Age and early Western civilization was shaped so differently from what we think of as logical and normal, that one almost has to rewire one’s brain to see how differently the archaic view of economic survival and enterprise was.

Credit economies existed long before money and coinage. These economies were agricultural. Grain was the main means of payment – but it was only paid once a year, at harvest time. You can imagine how awkward it would be to carry around grain in your pocket and measure it out every time you had a beer.

We know how Sumerians and Babylonians paid for their beer (which they drank through straws, and which was cleaner than the local water). The ale-woman marked it up on the tab she kept. The tab had to be paid at harvest time, on the threshing floor, when the grain was nice and fresh. The ale-woman then paid the palace or temple for its advance of wholesale beer for her to retail during the year.

If the crops failed, or if there was a flood or drought, or a military battle, the cultivators couldn’t pay. So what was the ruler to do? If he said, “You owe the tax collector, and can’t pay. Now you have to become his slave and let him foreclose on your land.”

Suddenly, you would have had a slave society. The cultivators couldn’t serve in the army, and couldn’t perform their corvée duties to build local infrastructure.

To avoid this, the ruler simply cancelled the debts (most of which were owed ultimately to the palace and its collectors). The cultivators didn’t have to pay the ale-women. And the ale women didn’t have to pay the palace.

All this was spelled out in the Clean Slate proclamations by rulers of Hammurabi’s dynasty in Babylonia (2000-1600 BC), and neighboring Near Eastern realms. They recognized that there was a cycle of buildup of debt, reaching an unpayably high overhead, followed by a cancellation to restore the status quo ante in balance.

This concept is very hard for Westerners to understand. more>

Updates from ITU

New Measuring the Information Society Report 2018 shows big progress, big gaps
ITU News – More and more people worldwide have access to and are using the Internet. At the same time, ICT prices have dropped globally in the last decade. However, stronger information and communication technology (ICT) skills are needed to connect people everywhere.

These are some of the top highlights in ITU’s new Measuring the Information Society Report 2018, released today.

The MIS Report also finds that improved ICT regulation and policy-making have played a pivotal role in creating the conditions for the reduction of prices, ensuring that part of the efficiency gains of higher ICT adoption are passed on to consumers.

“This year’s report shows how increased investment in broadband technologies is driving the global digital transformation and enabling more people to access a myriad of services at the click of a button,” says ITU Secretary-General Houlin Zhao.

The report finds that there continues to be a general upward trend in the access to and use of ICTs. Most importantly, the world has crossed the halfway line in terms of Internet use, with 51.2 per cent of the world population using the Internet by the end of 2018. more>

Complexity Economics Shows Us Why Laissez-Faire Economics Always Fails

By Eric Liu and Nick Hanauer – Over the last three decades, an unprecedented consolidation and concentration of earning power and wealth has made the top 1 percent of Americans immensely richer while middleclass Americans have been increasingly impoverished.

Traditional economic theory is rooted in a 19th- and 20th-century understanding of science and mathematics. At the simplest level, traditional theory assumes economies are linear systems filled with rational actors who seek to optimize their situation. Outputs reflect a sum of inputs, the system is closed, and if big change comes it comes as an external shock. The system’s default state is equilibrium. The prevailing metaphor is a machine.

But this is not how economies are. It never has been. As anyone can see and feel today, economies behave in ways that are non-linear and irrational, and often violently so. These often-violent changes are not external shocks but emergent properties—the inevitable result—of the way economies behave.

The traditional approach, in short, completely misunderstands human behavior and natural economic forces. The problem is that the traditional model is not an academic curiosity; it is the basis for an ideological story about the economy and government’s role—and that story has fueled policymaking and morphed into a selfishness-justifying conventional wisdom.

It is now possible to understand and describe economic systems as complex systems like gardens. And it is now reasonable to assert that economic systems are not merely similar to ecosystems; they are ecosystems, driven by the same types of evolutionary forces as ecosystems. Eric Beinhocker’s The Origin of Wealth is the most lucid survey available of this new complexity economics. more>

AI’s Ethical Implications: The Responsibility Of Firms, Policymakers and Society?

By Frederick Ahen – The market for AI is massive.

The expertise needed in the field is growing exponentially; in fact, firms are unable to meet the demand for specialists. Contributions of AI to both advanced and emerging economies is significant and it is also powering other fields that once depended on manual labor with painstakingly slow processes.

For example, precision agriculture now uses drones to help irrigate and monitor plant growth, remove weeds and take care of individual plants. This is how the world is being fed.

Journalists are using drones to search for truth in remote areas. Driverless cars are being tested. Drones are doing wonders in the logistics and supply chain areas. But drones are also used for killing, policing and tracking down criminal activities.

There are many other advantages of AI in the health sector, elderly care and precision medicine. AI machines have the capacity to do things more efficiently than humans or even tread spaces that are more dangerous for humans.

This is the gospel. Take it or leave it.

But there is more to the above. What is also true is that ‘the world is a business’ and business is politics that controls science, technology and information dissemination. These three entities know how to subliminally manipulate, calm, manage and shape public sentiments about anything.

They control how much knowledge we can have and who can be vilified for knowing or speaking the truth, demanding an ethical approach to the production and use of AI or turned into a hero for spinning the truth.

So, the question is, which industrial policies will promote the proper use of AI for the greater good through ethical responsibility in the midst of profits, power, politics and polity? more>

What Peter the Great Discovered in Amsterdam: Inclusivity Creates Wealth

By Nick Cassella – After coming to power in the late 17th century, Peter the Great of Russia decided to escape the confines of the Kremlin and travel incognito across Europe for a variety of diplomatic and personal reasons.

During his European odyssey, Peter visited Holland and was amazed at the commercial success of the small nation.

Trade was clearly a factor, but so too was religious toleration. Holland at the time was what Mathis calls an “intellectual and artistic clearinghouse” where clever thinkers, who let their pen or mouth wander too far, escaped repressive regimes.

In this land of inquisitive minds, Dutch religious tolerance was born. While this principle was not encoded in law, people would “look the other way” so that Calvinists, Catholics, and others could live together peacefully and productively.

Peter began to realize that Dutch commercial prosperity largely derived from its tolerant nature. He left Europe “intrigued by the atmosphere of religious toleration” and swore to mitigate the intolerance and rigidity of the Russian Orthodox Church on his return home.

The levels of wealth inequality across the world and in nations is, to put it lightly, suboptimally distributed. The United States offers a sterling example. Brookings senior fellow, Richard Reeves, looked at Congressional Budget Office data and found the top 20 percent “saw a $4 trillion increase in pretax income in the years between 1979 and 2013” while “the combined rise for the bottom 80 percent…was just over $3 trillion.”

The only way to defend wealth distortion like this is to claim a well-functioning society necessitates great inequality. Just like the religious intolerance of yore, today’s exclusive brand of economics is clearly not the best way to organize a group of people, but instead represents the best way for a few individuals to maintain power and wealth. more>

Updates from Ciena

What’s Next for Cable Business Services?
By Darren McKinney – The state of cable business services, fiber versus coax, the addition of mobile services along with the advent of 5G (friend or foe), new service offerings, service level agreements, the move to virtualization, and more, were all hot topics at the recent Light Reading “Future of Cable Business Services” conference.

I have attended this conference for several years, and as it falls at the end of year it’s always a good time to reflect on what this means for the cable industry moving forward. Here are my top takeaways from the 2018 event, and what I’m thinking about heading into 2019.

For years business services represented 20%+ year-over-year revenue growth for cable MSOs – a significant growth engine given MSOs have experienced declining video subscribers (due to OTT competition), and have generally had consolidated revenue growth of 5-10% in recent years. MSOs have experienced higher growth rates in business services with small (100 employees), where these customers require more sophisticated services and competitive service level agreements (SLAs). more>

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Updates from Chicago Booth

Blockchain’s weakest links
By Chana R. Schoenberger – Blockchain” has become a business buzzword. Commentators, thought leaders, and business experts are highlighting how the distributed-ledger technology promises to revolutionize business and logistics. Universities are teaching courses in blockchain. Blockchain jobs are “booming in Asia,” reports CNBC.

Blockchain “lets us imagine a world that’s not dominated by Google, Facebook, or, for that matter, the [US National Security Agency], one where we, the people, the core components of global society, get to say how our data is managed,” reads The Truth Machine: The Blockchain and the Future of Everything.

It’s a lot of attention for what is essentially an accounting technology. The plumbing behind financial services is generally unaccustomed to such publicity.

Companies are expected to spend $2.1 billion on blockchains by 2018, and $9.2 billion by 2021, according to research firm IDC. But first, like any new technology or market—and blockchain is both, in some sense—it has to overcome a few issues to prove its staying power.

For starters, there are different types of blockchains, and researchers have identified some potentially severe challenges facing the most ubiquitous type, known as “proof-of-work.” The choices companies and others make in the near future about which system to use, and how to use it, will determine how blockchain systems progress—and if blockchain does indeed mark a next era of tech.

Because bitcoin mining is a proof-of-work system, miners use electricity to run computers as they race to solve math problems to earn the right to validate the next block in a blockchain, and thereby win a bitcoin reward. This has raised another big concern with Nakamoto’s system: energy use.

As Bitcoin prices surged, so did mining and its impact on the power grid. If Bitcoin were a country, it would rank 39th in worldwide energy usage, behind the Philippines (38th) and ahead of Austria (40th), more>

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Updates from Georgia Tech

Growing Pile of Human and Animal Waste Harbors Threats, Opportunities
By Josh Brown – As demand for meat and dairy products increases across the world, much attention has landed on how livestock impact the environment, from land usage to greenhouse gas emissions.

Now researchers at Georgia Institute of Technology and the Centers for Disease Control and Prevention are highlighting another effect from animals raised for food and the humans who eat them: the waste they all leave behind.

In a paper published November 13 in Nature Sustainability, the research team put forth what they believe is the first global estimate of annual recoverable human and animal fecal biomass. In 2014, the most recent year with data, the number was 4.3 billion tons and growing, and waste from livestock outweighed that from humans five to one at the country level.

“Exposure to both human and animal waste represent a threat to public health, particularly in low-income areas of the world that may not have resources to implement the best management and sanitation practices,” said Joe Brown, an assistant professor in Georgia Tech’s School of Civil and Environmental Engineering. “But estimating the amount of recoverable feces in the world also highlights the enormous potential from a resource perspective.” more>

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Updates from Datacenter.com

30 Years of Open Internet in Europe
By Piet Beertema – On Saturday, 17 November at 2.28 pm it is exactly thirty years ago since the Netherlands was the first country in Europe to be connected to the Internet. System Administrator Piet Beertema of Centrum Wiskunde & Informatica (CWI) in Amsterdam received the confirmation that CWI – as the first institute outside the US – officially gained access to NSFnet, an academic computer network that later evolved into the worldwide Internet.

In 1988, the pioneers of CWI gained access tot the – then still American – Internet after years of preparation (CWI was already the central hub within the European network ‘EUnet’ and predecessor NLnet), thanks to their good contacts in the network world. Teus Hagen, head of IT at CWI at that time, explains in the documentary that during the development period, especially hard work was being done to establish the internet connection and the associated technology, so that communication between – especially scientists – would be faster and easier. “Data and information were exchanged freely at that time. If we had known that privacy and hacking would play such a big role in the future, we would have opted for a different approach for sure.”

Steven Pemberton was one of the first Internet users in Europe. In a later stage he developed important standards for the World Wide Web, one of the most important applications of the Internet. “In retrospect, establishing that first connection was a historic moment, something we did not realize at that time.” more>

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Is a Recession Coming?

By Derek Thompson – Cascading stock prices might seem like a random crisis if you’ve been paying attention to the overall economy, which is booming. At 3.7 percent, the official unemployment rate is the lowest of this century. Job satisfaction is at its highest level in more than a decade. Small-business and consumer confidence hit record highs this year.

Observing the gap between Wall Street jitters and Main Street optimism, some are inclined to point out that “the stock market is not the economy.” But you should resist that temptation. The stock market is not the entire economy. (Neither is wage growth or health-care spending.) Rather, the stock market is a part of the economy that reflects both the value of capital investment in public companies and a prediction of their future earnings. As labor costs increase (good news for workers), and interest rates creep up (good news for traditional savings accounts), cost of business increases for many large companies, which can hurt their stock value.

For many years, corporate profits thrived as labor costs were low. Now corporate profits are at risk as labor costs are rising.

One way to predict the likelihood of a recession today is to look back at the past few downturns and evaluate whether the U.S. economy is in danger of repeating history. more>