Tag Archives: Capital

How Hunter-Gatherers May Hold the Key to our Economic Future

We need to rethink our relationships with the workplace.
By James Suzman – What happened on the Omaheke farms echoes broader trends transforming workplaces across the globe.

The same question also irked John Maynard Keynes when in the winter of 1929 he was contemplating the ruins of his personal fortune. Global stock markets had imploded and the Great Depression was slowly throttling the life out of the Euro-American economy.

To remind himself of the ephemeral nature of the crisis, he penned an optimistic essay entitled “The Economic Possibilities for our Grandchildren”. In it he argued that within a century technical innovation and increases in productivity would usher in a golden era of leisure that would liberate us from the tyranny of the clock, and enable us to thrive on the basis of working no more than fifteen hours per week.

Besides war, natural disasters and acts of God the only significant obstacle he saw to this Utopia being achieved was what he believed was our instinct to strive for more, to work and to create new wealth.

So he took the view that, save a few “purposeful money makers”, we would recognize the economic Utopia for what it was , slow down and “be able to enjoy the abundance when it comes.”

Keynes was right about improved productivity and technological innovation. According to Keynes’s reasoning, on the basis of labor productivity improvements alone we should not be working more than 11 hours a week now.

But, despite having the means to work much less, many of us now work as long and hard as we did before. With the industrial revolution now having merged into the digital revolution there is a good case to be made to suggest that we have reached an inflexion point in the history of work as important as the agricultural revolution. more>

Train PhD students to be thinkers not just specialists

Many doctoral curricula aim to produce narrowly focused researchers rather than critical thinkers. That can and must change.
By Gundula Bosch – Under pressure to turn out productive lab members quickly, many PhD programs in the biomedical sciences have shortened their courses, squeezing out opportunities for putting research into its wider context. Consequently, most PhD curricula are unlikely to nurture the big thinkers and creative problem-solvers that society needs.

That means students are taught every detail of a microbe’s life cycle but little about the life scientific. They need to be taught to recognize how errors can occur. Trainees should evaluate case studies derived from flawed real research, or use interdisciplinary detective games to find logical fallacies in the literature.

Above all, students must be shown the scientific process as it is — with its limitations and potential pitfalls as well as its fun side, such as serendipitous discoveries and hilarious blunders.

This is exactly the gap that I am trying to fill at Johns Hopkins University in Baltimore, Maryland, where a new graduate science program is entering its second year. more>

Guns and the British empire

BOOK REVIEW

Empire of Guns: The Violent Making of the Industrial Revolution, Author: Priya Satia.
An Enquiry into the Nature and Causes of the Wealth of Nations, Author: Adam Smith.

By Priya Satia – In the mid-18th century, advanced areas of northwest Europe and east and south Asia enjoyed roughly comparable life expectancy, rates of consumption, and potential for economic growth. But around 1800, in what scholars call the ‘great divergence’, the power and wealth of the West suddenly and dramatically eclipsed that of India, China and the Ottoman Empire.

The British in particular found vindication for their expanding empire in ideas of cultural and racial superiority.

Concerned about Britain’s aggressive pursuit of empire, Adam Smith presumed that the universal capacity for knowledge-sharing would ultimately right the wrongs of colonialism.

We know that history did not play out that way. Why not? Why didn’t knowledge-sharing equalize the world? Was Smith too generous or naive in believing that it had cultural purchase beyond Europe?

Smith’s naivety in fact lay in his presumption that the emerging political inequalities that he observed would not also shape the spread of knowledge. Like liberal thinkers today, he imagined that knowledge-exchange somehow transpires regardless of power relations.

In reality, in the 18th century, as now, power shaped knowledge-sharing everywhere.

In Britain, for instance, government offices engaged in military supply often prohibited contractors from patenting their inventions: a patent would slow the spread of innovation to other contractors and thus slow the production of urgently needed supplies.

While the British government thus abetted the sharing of know-how within Britain, it actively stifled such sharing abroad.

British industrialists copied Asian textiles and pottery without scrupling over ‘intellectual property’, but could rely on their government to minimize the threat of colonial competition with their own manufactures. more>

Stop Saying ‘Smart Cities’

Digital stardust won’t magically make future cities more affordable or resilient.
By Bruce Sterling – The term “smart city” is interesting yet not important, because nobody defines it. “Smart” is a snazzy political label used by a modern alliance of leftist urbanites and tech industrialists.

Smart-city devotees all over this world will agree that London is particularly smart. Why? London is a huge, ungainly beast whose cartwheeling urban life is in cranky, irrational disarray. London is a god-awful urban mess, but London does have some of the best international smart-city conferences.

The digital techniques that smart-city fans adore are flimsy and flashy—and some are even actively pernicious—but they absolutely will be used in cities. They already have an urban heritage. When you bury fiber-optic under the curbs around the town, then you get internet. When you have towers and smartphones, then you get portable ubiquity. When you break up a smartphone into its separate sensors, switches, and little radios, then you get the internet of things.

However, the cities of the future won’t be “smart,” or well-engineered, cleverly designed, just, clean, fair, green, sustainable, safe, healthy, affordable, or resilient. They won’t have any particularly higher ethical values of liberty, equality, or fraternity, either. The future smart city will be the internet, the mobile cloud, and a lot of weird paste-on gadgetry, deployed by City Hall, mostly for the sake of making towns more attractive to capital.

“Smart cities” merely want to be perceived as smart, when what they actually need is quite different. more>

3 Tips For Managing Innovation

By Alan Pentz – We are used to seeing innovators lauded for their brilliance. They are insightful geniuses who see around corners and live ahead of their times. In practice, most innovators stumble into success. Innovation is more about implementation and execution than it is about inspiration.

Don’t discount the importance of ideas. They are the starting point and the motivator to take action, just don’t stick to closely to those original ideas. As a government leader you should be careful to design your project planning to allow for adjustments and learning. Often the best insights come from ideas that occur during implementation. The original idea doesn’t always work but it leads you down a path to something that does. In other words don’t spend all your time planning up front.

Many leaders in government make two related mistakes. They demand too much validation of ideas before allowing them to go forward and once that validation has occurred they over-commit resources. Whatever you decide on most likely won’t work as advertised so why pretend like it will?

A few tips that can help you on the way are:

  • Establish what success looks like
  • Set the key performance indicators
  • Set formal gates or project reviews that projects must pass through

Managing innovation is a dynamic and shifting process. It’s your job as the leader to create the space to allow innovation to happen. more>

Is democracy essential?

BOOK REVIEW

Superpower: Three Choices for America’s Role in the World, Author: Ian Bremmer.

By Ian Bremmer – In advanced economies, young adults are more likely than older people to prefer technocracy to democracy. The study found that in the U.S., 46 percent of those aged 18 to 29 would prefer to be governed by experts compared with 36 percent of respondents aged 50 and older.

Perhaps most alarming was the revelation than one quarter of millennials agreed that “choosing leaders through free elections is unimportant.” Just 14 percent of Baby Boomers and 10 percent of older Americans agreed.

In a world where even the Communists are no longer communists (China’s state-capitalism is a far cry from Marx, to be sure), there’s no competing ideology forcing those who live in democracies to consider what life might be like without it.

Or maybe it’s that democracy in America no longer seems to be working. During the 1930s, economic depression led many to look abroad for alternatives to democracy and free-market capitalism.

American millennials have never stood in a bread line, but they have experienced the most severe financial crisis since the 30s, a dramatic widening of the gap between richest and poorest, a hollowing out of the middle and working classes, and a level of dysfunction and petty partisan hostility in Washington that seems to get worse by the week.

Then there’s the Trump effect. more>

The Two-Degree Delusion

By Ted Nordhaus – Forty years after it was first proposed, the two-degree target continues to maintain a talismanic hold over global efforts to address climate change, despite the fact that virtually all sober analyses conclude that the target is now unobtainable.

But it is worth considering the consequences of continuing to pursue a goal that is no longer obtainable. Some significant level of future climate impact is probably unavoidable. Sustaining the fiction that the two-degree target remains viable risks leaving the world ill prepared to mitigate or manage the consequences.

In reality, most of the climate risks that we understand reasonably well are linear, meaning that lower emissions bring a lower global temperature increase, which in turn brings lower risk.

There are a range of potential nonlinear tipping points that could also bring catastrophic climate impacts. Many climate scientists and advocates argue that the risks associated with triggering these impacts are so great that it is better to take a strict precautionary approach to dramatically cut emissions. But there are enormous uncertainties about where those tipping points actually are.

The precautionary principle holds equally well at one degree of warming, a threshold that we have already surpassed; one and a half degrees, which we will soon surpass; or, for that matter, three degrees. more>

Development, self-interest, and the countries left behind

By Sarah Bermeo – The self-interest of developed countries affected policy on foreign aid, trade agreements, and even climate finance, as I argue in my new book, Targeted Development.

Targeting foreign aid to areas where potential spillovers to the donor are high is not only the practice of great powers.

Australia, Austria, Canada, Denmark, Finland, Germany, Italy, Japan, the Netherlands, New Zealand, Sweden, and Switzerland have all favored more proximate countries in the post-2001 period—when you control for measures of need such as income, disasters, and civil war.

For Australia, Austria, Denmark, France, Japan, the Netherlands, New Zealand, Norway, and Sweden, aid is also associated with bilateral migrant flows.

The more a donor imports from a developing country, the higher aid flows are to that country; this is especially true for Austria, Canada, Denmark, Finland, Japan, Norway, Sweden, and the United Kingdom.

For states not targeted, however, the picture is bleak.

Where migration—and hence remittances—is low, foreign aid will also be low. When foreign aid is low, the chances of being granted preferential access to wealthy country markets is lower too.

Where geographic distance is great, economic engagement will lag behind. more>

Post-Davos Depression

By Joseph E. Stiglitz – I’ve been attending the World Economic Forum’s annual conference in Davos, Switzerland – where the so-called global elite convenes to discuss the world’s problems – since 1995. Never have I come away more dispirited than I have this year.

The world is plagued by almost intractable problems. Inequality is surging, especially in the advanced economies. The digital revolution, despite its potential, also carries serious risks for privacy, security, jobs, and democracy – challenges that are compounded by the rising monopoly power of a few American and Chinese data giants, including Facebook and Google. Climate change amounts to an existential threat to the entire global economy as we know it.

Perhaps more disheartening than such problems, however, are the responses.

But, by the end of their speeches this year, any remaining illusion about the values motivating Davos CEOs was shattered. The risk that these CEOs seemed most concerned about is the populist backlash against the kind of globalization that they have shaped – and from which they have benefited immensely.

They may lack the candor of Michael Douglas’s character in the 1987 movie Wall Street, but the message hasn’t changed: “Greed is good.” What depresses me is that, though the message is obviously false, so many in power believe it to be true. more>

An ambitious project to measure the wealth of nations shows how GDP is a deceptive gauge of progress

By Eshe Nelson, Dan Kopf – Is gross domestic product a sufficient measure of an economy’s health?

Many argue that GDP, which counts the sum of the goods and services produced by a nation, fails to reflect a population’s well-being, because it accounts for neither distribution of income nor extractive effects such as pollution.

Wealth includes all assets, which means human capital (the value of earnings over a person’s lifetime), natural capital (energy, minerals, agricultural land), produced capital (machinery, buildings, urban land), and net foreign assets.

Assessing an economy by GDP instead of wealth is like looking exclusively at a company’s income statements without considering the assets on its balance sheet. A company can make its income look good for a short time by liquidating assets, but over the long run this will reduce the firm’s productive capacity and other means of generating income in the future.

The same applies to a country. GDP “does not reflect depreciation and depletion of assets, whether investment and accumulation of wealth are keeping pace with population growth, or whether the mix of assets is consistent with a country’s development goals,” the report states. more>