New and Noteworthy (Collected)

Back in the '00s, with social media rather less developed and utilized, it was not uncommon for bloggers to post little announcements or referrals to other material such as we would now convey to the world through a service like Twitter instead. I certainly did this with various items that caught my eye under the headings "New and Noteworthy," "In the News," "Items of Interest" and other such headings.

Many of these items have since lost their interest simply because they became dated, while in cases th items in question have disappeared altogether, such that it makes little sense to keep them here. Still, it seemed to me that a few were worth preserving and this post fulfills that purpose, providing a round-up of the lot in one place for anyone who might be interested in them, organized in chronological order, and under the dates of their publication.

December 10, 2008
* A new report about the risk of a WMD attack has cropped up in the headlines, The World At Risk: The Report of the Commission on the Prevention of WMD Proliferation and Terrorism the actual text of which you can find here.

The aspect of the report that has attracted the most attention is, predictably, the estimate in the Executive Summary that

The Commission believes that unless the world community acts decisively and with great urgency, it is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013 (xv).

There is no explanation in the report as to why 2013 should be thought of as some significant benchmark, and while most of the press seems to have uncritically swallowed the claim, experts Donald Henderson and Michael Krepon have appropriately criticized the report for what looks like an attempt to hype up its findings.

It is also noteworthy that the report seems to totally ignore chemical weapons, the authors saying in the preface that they focused on nuclear and biological weapons because "they pose the greatest peril" (x), and leaving it at that. There is no mention of the sarin gas attacks by the Aum Shinrkyo cult in Matsumoto in 1994, which killed seven and sickened six hundred, and in Tokyo in 1995, which resulted in over six thousand casualties. (Instead the only mentions of Aum's activity, despite its lengthy record of activity in this area are in relation to a single botched anthrax attack on Tokyo (on pages 10 and 11).) Partly because of this, the report tends to give the impression that WMD use by terrorists, certainly in a mass-casualty attack, is unprecedented, though clearly it is not (this report itself citing the Rajneeshee cult's 1984 bioterror attack, which sickened over 700 people, with the anthrax attacks of 2001, and the full range of Aum's bioweapon activities, worthy of mention).

These are serious deficiencies which have attracted too little attention in the press, too accustomed to simply reporting what the People In Suits Say, instead of scrutinizing it.

* Speaking of lousy journalistic coverage, consider the treatment of the crisis in Greece, into which a general strike has just factored. The spark for this was the shooting of a youth by police, but the larger background to the situation seems to be long-running clashes between police and "anarchists" (I never know exactly what to make of that label here, given its vulnerability to abuse), and wide discontent with the corruption, incompetence (the mishandling of the wild fires of 2007, the fiscal mismanagement), and economic reforms (read: IMF-recommended neo-liberal measures, like privatizing the state telecommunications company and taking a hard line with labor), of the unpopular conservative government of Kostas Karmanlis.

One should note that Greece is not a Third World country. It is a member of the euro zone, with a $30,000 per capita GDP, putting it right between Taiwan and Italy for 2007. Its Gini score is 33, and its ranking in the Human Development Index is 24th in the world. It has problems with unemployment, debt, inflation, somewhat worse than Western Europe as a whole, but on the whole they do not seem to be very much so (the sizable current account deficit aside, partly due to the high energy prices now on the wane), and the country's growth has actually been comparatively robust (frequently clocking 4 percent a year these last several years, despite worries about slipping competitiveness).

In short, it is not the sort of place where things like this are "expected" to happen (like Latin America, for instance). Nonetheless, the numbers discussed above seem to miss some of the facts on the ground. These include youth unemployment, generally higher and in this case over 26 percent in 2006 according to Eurostat. Nor do they seem to reflect the actual poverty level, a recent study putting one in five households below that line (when the line is drawn at 470 euros a month, or about $7,300 a year), and attributing it to a relatively well-funded but exceptionally ineffective (mismanaged?) welfare system. Official inflation figures tend to understate the actual hardship for consumers of price shocks everywhere, but this is perhaps especially the case in countries which made the transition to the euro, with Greece in particular known to have "faked reported values of inflation in the run-up to accession of the monetary union in order to meet Maastricht criteria" according to this study by Milan Vyskrabka.

Simply put, this means things are worse than they look, and in some critical ways. The slowdown of growth, the promises of still more neoliberalism (keep in mind the country has a large public sector, so that the proportion of the citizenry directly affected will be comparatively large), and skimpy poor relief-justified on the grounds of a lack of money right after the Greek government provided the banking system with a generous and highly controversial financial bail-out (relative to the size of the Greek economy, equivalent to a $1.5 trillion package from the U.S.)-could not possibly be helping the political situation.

Looking at all this data, rarely touched on in the coverage of the riots, my guess would be that the causes of the current crisis are in large part economic, with the anomalousness of Greek politics perhaps playing a role as well. Following World War II the country went through a civil war, and in 1967-74, the country was ruled by a military dictatorship. The radicalization that resulted from it does not seem to have fully disappeared today-one expression of which is the size of the Communist Party (number three in parliament, with an eight percent share), and an opposition to U.S. foreign policy strong even by European standards (though those who see the world through Sam Huntington's "clash of civilizations" lens may also point to the country's Greek Orthodox religious identity). Immigration does not seem to be the "wedge" issue it has been in West European countries, helping to bouy conservative policies in spite of their rarely popular economic components. And the centrality of Athens as a center of Greek life (literally half the country's population lives there) adds to the government's vulnerability.

Nonetheless, with the world struggling through a financial crisis and economic slowdown so sharp as to evoke the "D" word from commentators who would ordinarily never dare let it slip past their lips, and energy prices on the wane now but perhaps poised to rebound even higher (Kevin Phillips speculating on C-SPAN2 yesterday about their going back to over $200 in just a few quarters), and the daily news offering one blast from the pre-neoliberal past after another, the way things are playing out in Greece may hint at the dangers to security and stability that other nations could face in the coming years. When even a eurozone member has this kind of trouble, other, poorer countries are unquestionably vulnerable, and it stands to reason that other affluent countries, many of which are in the same boat with regard to the problems discussed above, may not be totally exempt.

January 19, 2009
* The protests continue in Greece--as have other incidents, including domestic terror attacks staged against the police. (Those only newly following the issue can check out my earlier coverage of the matter, in this blog post, and my subsequent follow-up to it.)

Readers should note that Greece is far from being alone in facing such discontent, Bulgaria and the three post-Soviet Baltic republics (Estonia, Latvia and Lithuania) all having unrest of their own related to government corruption, economic contraction and yet another round of painful reforms imposed on them by international financial institutions, which you can read about in this Guardian article here.

May 17, 2009
* Accelerando author Charles Stross's extrapolation of the future of computer technology (with a focus on gaming) from what he terms a "laughable conservative" set of assumptions in a keynote address at the 2009 LOGIN conference in Seattle (the text of which is available on his site).

* A recent piece in The Economist on the state of ocean mining, another of those ideas that seemed likely to go much further back in the 1970s (indeed, such expectations played a role in the development of international maritime law in that period).

* The latest Reading Radar Weekly Round-Up from the folks over at The New Security Beat.

May 21, 2009
* Gyre.org has identified plenty of interest in recent days, including a piece from Scientific American on the rush on the world's seabed (recently highlighted by Russia's claiming of the North Pole, though this is far from the only instance); work on instilling "ethics" in robots; the ecological impact of space debris (extending to ozone depletion); an article discussing a recent GAO report on the prospect-and implications-of GPS service deterioration; and the capabilities of next-gen telescopes with regard to the spotting of "biosignatures" (like atmospheric water vapor) on exoplanets.

* Dwayne Day has produced another excellent article on the space colony concept as it was once presented, and their fading from the popular consciousness, in "The God That Failed" (a topic I've touched on in pieces like "Revisiting Island One", where I considered the finances and logistics of trying to realize Gerard K. O'Neill's plans with the space shuttle as we know it).

* Science fiction writer Charles Stross recently weighed in on his own blog on the subject of his own recent experience riding American rail, and how it stacks up against service in Europe and Japan (a topic timely again with new attention being drawn to American infrastructural deficiencies, and Keynesian policies which may help to correct them).

* In part due to the concern over swine flu (and in the U.S., optimism about the housing sector which strikes me as rather exaggerated), the global economic outlook remains pretty lousy, most of the major players logging scary drops in GDP during the first quarter of the year. Forbes recently presented us with a round-up of developments worldwide, but here's the Washington Post on Japan, where the 14.4 percent "annualized" decline in GDP over October to December was followed by a 15.2 percent drop in the first three months of this year, though the observers quoted believe the situation is bottoming out.

* RTTNews and Xinhuanet on trouble in the Eurozone, where all the major economies are still contracting, not as badly as is the case in export-driven Japan, but apparently harder hit than the U.S., their GDPs ending up about 4.6 percent smaller in the first quarter of 2009 than they were in the same quarter in 2008. And there is also some prognostication about the prospects for Europe as a whole from the New Europe newsweekly, positing more shrinkage this year and contraction all the way through 2010 before recovery begins, and also

* Fistful of Euros' briefing on Russia, where the first quarter had the country's GDP 23 percent smaller than a year before, not only because of fallen oil prices, but a very sharp drop in industrial output, and while some are claiming mixed signals, the Russian government is speculating about the possibility of an 8 percent contraction over the year as a whole.

Are we through the worst, with things likely to go back on track (such as it was) later this year, or the next, or at worst the year after that? Perhaps, but then again perhaps not, and this piece from FinFacts on the state of the Irish economy (booming, and until recently, widely held up as a model for others) caught my eye. According to the accounting firm of Ernst & Young, Ireland is looking at a full-blown depression (by virtue of a shrinkage of its GDP by 10 percent), with an employment picture that may not quite return to pre-crisis levels until 2021. (Read the Executive Summary of the report here.)

Interestingly, much of what Ireland supposedly did right (here termed "the one-dimensional economy") seems to be part of what is going so wrong (a point the report's summary notes on page 22), and it is worth noting that a few years ago Finfacts reported on a a study by the International Integration Institute at Dublin's Trinity College in 2006 which discussed the country's vulnerability in the event of a downturn in the high-tech or financial services sectors.

These disproportionate impacts, the questions they raise, and the bleaker possibilities they point to ought not to be overlooked.

June 22, 2009
* Economic historians' Barry Eichengreen and Kevin H. O'Rourke update of their April 6 column regarding the present economic situation (apparently part of their work toward a full paper to run in Economic Policy). What they conclude is that "world industrial production continues to track closely the 1930s fall," with German, Britain and the U.S. and Canada tracking the fall of the '30s closely, and France, Italy and Japan actually doing worse. Additionally, despite the rebound of world stock market since March and the stabilization of world trade these were "still following paths far below the ones they followed in the Great Depression."

In short, the situation is not just as bad as it was in 1929-1930, but in some important ways worse. However, they are hopeful the worst can be averted, in part because of the more aggressive response in the form of monetary growth and stimulus.

Martin Wolf, commenting on their column in the Financial Times notes that "the combination of strong monetary growth with deep recession raises doubts about the monetarist explanation for the Great Depression," and accordingly he focuses on stimulus. He raises the concern, however, that governments might not be able to sustain the necessary levels of stimulus.

I think Wolf is right on both counts, and find myself turning to the U.S. economy's performance during the years of the New Deal. Following the sharp contraction of 1929-1932, the massive expansion of U.S. government spending restored the 1929 level of America's GDP by 1936, and by 1940 produced a figure 20 percent higher than that. The price, however, was the quadrupling of the once small federal debt in the space of those years. (Those curious about the numbers can check out my stats and calculations here.) And they still did not effect a long-term revival, however, the rapid global growth of the 1940s, 1950s, 1960s and early 1970s being driven by much more than that (World War II and the rebuilding that followed, the Cold War, "the welfare state"-things that might be said to have built stimulus into the system on a routinized, sustainable basis) in a situation that may not repeatable.

Indeed, we seem set to go in the opposite direction, given the talk of austerity in Europe and elsewhere, likely only to deepen the hole-as Nicolas Sarkozy himself has said, pointing out that "an austerity policy . . . has always failed in the past" in one of his rare moments of lucidity. (Whether the actions of the man who has so often struck onlookers as a "French Thatcher" will reflect this rather sound thinking remains to be seen.)

And we can expect the resulting troubles to extend far beyond the merely economic. As Greece demonstrated (those who don't remember the troubles there can refresh their memory here), even Western Europe is not immune to the kind of unrest we tend to associate with Latin America, and as this round-up from Reuters shows, the talk already has people in the streets. As the results of the EU elections earlier this month show, a radicalization of public opinion (so far, trending far-right) may already be underway.

June 24, 2009
* On the heels of Monday's sourer-than-expected news from the World Bank (in the Global Finance Development 2009 report) came a slightly better-than-expected prediction from the OECD.

As the opening of the preliminary edition of the latest Economic Outlook says, "For the first time since June 2007, the projections in this Economic Outlook have been revised up for the OECD area as a whole compared with the previous issue." The authors give the credit for this to "massive policy stimulus and progress in stabilising financial institutions and markets."

Still, one should not make too much of the difference between this piece of news and what we got on Monday, the Paris-based organization simply forecasting a milder contraction this year (a 2.2 percent rather 2.9 percent reduction in GWP), with a return to growth next year (somewhat more robust than in the WB's guess), and virtually every page of the document reiterates the point that even if 2009Q2 may see the end to the sharp (Depression-level, as Eichengreen and O'Rourke point out) contraction of the preceding six months, we are not out of the figurative woods.

And strings are attached to such optimism as they can offer, particularly at the policy level continued loose monetary policy and supportive financial policy-read government propping up of the banks-are necessary, while governments should not be too hasty about tightening their belts, and "reemployment measures" need to be strengthened to prevent cyclical unemployment from turning structural. (The last two are not a trivial conditionalities, given the talk of austerity that already has some economists very worried.)

On top of this the authors of the Outlook warn that

the financial system may be more vulnerable to weaknesses in the real economy than assumed in the projection which in turn would have negative repercussions on growth. This risk of a negative spiral would be amplified if households and businesses were to expect that a sustained period of deflation was imminent, in contrast with assumptions behind the Secretariat‟s medium-term reference scenario . . . Other downside risks include a faster increase in bond yields due to sharply deteriorating public finances and a stronger response of household spending to higher unemployment.

Additionally, unemployment levels will remain high-10 percent in the U.S. (official number; the real one's bigger, as those who've been following this blog well know) for some time to come, those hoping to find it not getting the reassurance that the U.S. is not, after all, the "new" France.

* Those at least willing to consider the possibility that officialdom may be a little too quick to say the fall's bottomed out should check out this article by Joshua Holland over at Media Channel which, unlike far too much of the coverage, is attentive to the structural, long-term weaknesses of the U.S. economy, and the toll it is taking on American householders, as well as the hard facts regarding real estate, energy and other elements of the situation which might not necessarily cooperate in the promised recovery.

* Over at MSNBC.com, Tim Hanson also considers another underappreciated aspect of the situation: what the crisis may mean for the unbalanced economic relationship between the U.S. and China.

October 8, 2010
* By way of Gyre.org, a piece in New Scientist discussing the prospect of harnessing the solar wind to meet the Earth's energy needs.

* An article in LiveScience discussing China's blocking a shipment of rare-earth minerals to Japan, which the author links to the dispute over Japan's arrest of a Chinese fishing crew. (Indeed, Leonard David at Space.com references the possibility in his discussion of the question of whether resource politics on Earth make moon mining a national security imperative for the U.S..)

* A report from National Public Radio on popular reaction to the country's economic troubles. Ireland's case is all the more noteworthy given that the "Celtic tiger" had not only appeared to perform so well in the years prior to the 2008 crisis, but had been widely held up as a success story of neoliberal globalization; and afterward, suffered particularly deeply (as noted in the report firm Ernst & May, the GDP decline rated the D-word--"depression")--arguably, because of how closely it hewed to the same fashionable prescriptions for which it was so highly praised.

* By way of Futurismic, a piece by "Lay Scientist" Martin Robbins in the Guardian satirizing bad science journalism, which is, of course, far and away the predominant kind. (Case in point: Time magazine's annual list of "50 Best Inventions," which I discussed on this blog a couple of years ago.) Since then, Robbins has offered a follow-up in which he offers his more straightforward critique of the field.

December 22, 2010
* As a practical matter the transition to a post-fossil fuel economy is for the time being far more likely to entail a shift to a reliance on other kinds of resources rather than freedom from the limitations of the planet's resource base all but promised by those Thomas Homer-Dixon refers to as "economic optimists." This has raised questions about "post-fossil fuel energy security," reflected in discussions in recent months about rare earth metals. This month the U.S. Department of Energy released the Critical Materials Strategy report examining the role of rare earth metals (getting much more attention in recent months) and other materials (lithium, cobalt, indium, tellurium, gallium, etc.) in the "clean energy" economy.

The report (which is comprehensive, even if the vast area it covers means a great deal can only be touched on briefly) examines the use of particular materials in particular products (like batteries for electric vehicles, wind turbines, photovoltaic solar cells with thin-film conductors and fluorescent lighting systems) (chapter 2), historical supply and demand for the materials in question (chapter 3), current programs relating to those materials in the U.S. (chapters 4 and 5) and abroad (chapter 6), and projections about supply and demand (chapter 7). These are followed by an assessment of the criticality of supply in the short- and medium-term for each type of material (chapter 8). In its final chapter (chapter 9) the report outlines a strategy for securing supplies by diversifying the list of suppliers; identifying appropriate substitutes; and more efficient use, recycling and reuse of the necessary materials; with R & D, the encouragement of domestic production, and stockpiling and diplomacy all playing roles in the plan.

* A story in The New Scientist discussing yet another dark side to the "emissions trading" component of the Kyoto Treaty (on top of the way in which it encourages a redistribution of emissions allowances rather than emissions reduction)-specifically the incentivizing of enlarged production of a certain type of greenhouse gas, HFC-23. This is a useless but extremely climate-unfriendly byproduct of HFC-22), a refrigerant used in developing nations. The concern follows a demand by Chinese chemical companies that they receive a subsidy for destroying their HFC-23 stocks rather than releasing them into the air (vastly disproportionate to the cost of safe disposal, perhaps by a factor of 100), raising the specter of an overproduction of HFC-22 (and its byproduct HFC-23) to milk the system.

* By way of The New Security Beat, the Stimson Center article "Wither the Demographic Arc of Instability?" which offers a global overview of projected changes in the age structure of the world's countries (with a focus on the date at which the median age moves past 25)-significant because the zone of "youth bulge" countries largely overlaps with what has been variously termed the "Global Balkans," the "Non-Integrating Gap," or "The Arc of Instability" (from which the article's title is derived), encompassing those areas where armed conflict has been most frequent and bloody in recent decades. While Mexico, Central America, the Andean countries, much of the Caribbean, the whole African continent, southwestern, southern and southeastern Asia are presently inside this category (with Brazil only recently leaving it), the projection has the situation largely confined to sub-Saharan Africa by 2030 (with only a handful of exceptions, like Yemen, Afghanistan, the West Bank and Gaza). The item also offers a brief but useful history of the development of "political demography" as a field. Also at the Beat: a video featuring Joel E. Cohen (the author of 1995's classic How Many People Can the Earth Support?), and a repost of Robert Engelman's analysis of the role of demographics on climate change at the Worldwatch Institute's Transforming Cultures blog.

February 4, 2011
* An in-depth analysis by Daniel Indiviglio of The Atlantic parsing the BLS's unemployment data for January--and showing that the improvement in the numbers (particularly a drop in the U-3 rate from 9.4 to 9 percent, in the U-6 from 16.7 to 16.1 percent during that month) is not due to job creation, which remains paltry. (The month saw a net gain of a mere 36,000 jobs, accounting for less than a tenth of the change.) There is of course disagreement about where the rest of the change comes from, with some observers (Indiviglio included) suggesting it is mainly a matter of discouraged workers finally giving up, though Emily Kaiser at Reuters offers a somewhat more optimistic view. One possible bright spot is that, where in previous months most of the gains have tended to be in services, manufacturing has led the way this time, though Jeff Harding at Seeking Alpha offers a reminder as to why a sustained recovery is unlikely--the softness of demand, which seems unlikely to change anytime soon. In short, it's still a long way back to where the U.S. economy was in 2007--which really wasn't all that great to begin with.

* Two articles in The New Scientist, discussing a pair of reports released this week about how the nine billion people likely to inhabit the world by 2050 might plausibly be housed and fed. The reports are, respectively, One Planet, Too Many People? (which actually considers food, water and energy alongside urban shelter), published by the British Institution of Mechanical Engineers' and freely available online; and Agrimonde: Scenarios and Challenges for Feeding the World, published jointly by France's National Institute for Agricultural Research (INRA), and the Centre for International Cooperation in Agronomic Research for Development (CIRAD).

Both argue for the manageability of the problem, the One Planet report noting in the overview of its recommendations in the executive summary that "there are likely to be no insurmountable technical issues in meeting the basic needs of nine billion people and improving their world through engineering" (p. 9). They have been received as good news because of this, but the optimism is not unconditional: as the same report goes on to say,

there is much urgent work to be done in preparing to meet this mid-century peak in a sustainable way. It is evident that many of the potential barriers to developing these solutions and ensuring a successful outcome are not technological, but lie in the areas of politics, social ethics, funding mechanisms, regulation and international relations (p. 9).

Of course, these barriers are far from trivial (indeed, the "social ingenuity" needed to tackle a problem is often tougher to come by than the technical kind), but the fact of feasibility is meaningful in itself.

April 19, 2011
* Oliver Wyman's scenario for the next financial crisis. (The Atlantic offers a summary here.)

* The Washington Post on the spark that started the wave of revolutions across the Middle East--fruit vendor Mohamed Bouazizi's protest against Tunis's corrupt and abusive cops.

* A story in the Daily Mail on an improved version of the "artificial leaf" that may make a contribution to the expansion of renewable electricity production.

May 1, 2011
* In Slate, Nouriel Roubini asks whether China's infrastructure-heavy macroeconomic policy, which helped it to blunt the effect of the global economic crisis, is not running out of steam. The article has its share of conventionalities, but the question is a valid one, and Roubini raises some very good points. (It is also a reminder that the reality of China's policies--far more reliant on government stimulus than the U.S.'s--makes the ridiculous, xenophobic commercial from "Citizens Against Government Waste" all the more ironic.)

* New York Federal Reserve Bank President William Dudley was recently booed when he told an audience in Queens that there was no inflation. Economists have long been whining about deflation when it's been the "I" word (and plenty of it) that ordinary people have confronted on a daily basis (not least at the grocery store, as the New York Times noted in a recent article on the concealment of rising food prices in shrinking package sizes), this happening, incidentally, as paychecks trend in the opposite direction, a connection too few seem to be making. Of course, rising prices for energy and food--already a source of crisis in significant parts of the world--as well as a weaker U.S. dollar--especially given the inflationary monetarism that has been the Fed's standard operating procedure and the persistent U.S. trade deficit--are trends that can only be expected to sharpen for the foreseeable future.

May 12, 2011
* After six and a half years Jason Sigger has written the last post for his blog, The Armchair Generalist due to a job change. By offering a blog devoted to a progressive view of military affairs, Sigger's blog filled an important niche, and I am sorry to see it go. However, it seems his earlier posts will remain available online, so those unfamiliar with his site can still check out his previous commentary.

* At the Washington Post, Ezra Klein recently assessed President Obama's policies--and found that, far from being the "socialist" he has so often been accused of being, his policies are those of an early '90s moderate Republican. At the New York Times' blog Five Thirty-Eight, Nate Silver offers a rebuttal to this analysis, but doesn't--indeed, can't--dispute the significant rightward shift of American politics overall since the '90s, by no means the start point of the trend.

On a related note, two pieces from the Huffington Post. In the first, Dan Froomkin at reports on a study by public watchdog group Public Citizen of Democrats' increasing fear of the power of moneyed interests to mount attack campaigns in the wake of the 2010 Supreme Court decision in Citizens United vs. Federal Election Commission. In the second, British columnist Johann Hari considers what Donald Trump's apparent bid to become America's answer to Italy's Silvio Berlusconi says about the Republican Party.

* Two new studies regarding energy consumption. The first (discussed in an article by Jeff Tollefson in Nature) is Energy Emergence: Rebound & Backfire as Emergent Phenomena, a review of the academic literature on the "rebound effect" in energy use by researchers at the Breakthrough Institute. To quote the summary's findings,

Rebound effects are real and significant, and combine to drive a total, economy-wide rebound in energy demand with the potential to erode much (and in some cases all) of the reductions in energy consumption expected to arise from below-cost efficiency improvements . . . [and] render the relationship between efficiency improvements and energy consumption interrelated and non-linear, challenging the assumptions of commonly utilized energy and emissions forecasting studies.

Nonetheless, the study does not dismiss energy conservation, rather offering a "new framework for envisioning the role of below-cost efficiency improvements in driving energy modernization and decarbonization efforts." (Summed up briefly, the authors suggest the benefits of "below-cost energy-efficiency improvements" are worthwhile, mainly because of their contribution to economic growth, which will better enable a more plausible source of decarbonization--a shift to "decarbonized" energy production that will be easier for a more affluent society.)

The second (which Christina Larson reports on for Scientific American), is an assessment by the China Energy Group at the Lawrence Berkeley National Lab, China's Energy and Carbon Emissions Outlook to 2050. China's Energy suggests that China can meet its government-set goals in the area of energy efficiency and carbon intensity, and anticipates a

saturation in ownership of appliances, construction of residential and commercial floor area, roadways, railways, fertilizer use, and urbanization . . . [and] slowing population growth

by 2030. The result is still a massive increase in energy consumption and carbon emissions, but perhaps a more useful (and hopeful) basis for action than other scenarios of more explosive growth (this study including an "alternative" as well as a "baseline" scenario).

May 25, 2012
* Author Chris Hedges on what he calls "The Globalization of Hollow Politics." Reporting from France prior to the recent presidential election in that country, he offers a reminder that the phenomenon he described in his book Death of the Liberal Class (recently reviewed here) is not at all a uniquely American phenomenon.

* Over at Alternet, an interview with Morris Berman, author of the recent Why America Failed (the concluding book in his "trilogy" about American decline, The Twilight of American Culture, and Dark Ages America). Among other things, the interview provides a good overview of the case he makes in his latest book. Rather idiosyncratic in some respects (Berman's argument draws on, among other things, an unconventional take on the antebellum South), it is certainly thought-provoking.

* From The Diplomat, a report on a recent poll carried out jointly by the Center for Public Integrity, the Program for Public Consultation and the Stimson Center regarding defense spending – which found broad support, in virtually every demographic, for significant cuts in a host of areas (including withdrawal from the Afghan War), and "modest majorities" favoring "dumping some major individual weapons programs, including the costly F-35 jet fighter, a new long-range strategic bomber, and construction of a new aircraft carrier."

* An opinion piece from Walt Gardner (of Education Week's "Reality Check" blog) on the fate of public schoolteachers in the face of two trends: teaching scripts and the proliferation of computers with educational software. It's an old question all the more pressing with budget troubles at all levels of government and public-sector unions an increasingly easy target as American politics continues its rightward shift.

July 26, 2011
* Glenn Greenwald in Salon on the New York Times' shabby and shameful coverage of the neo-Nazi terrorist attacks in Norway, and the (frankly, bigoted) misuse and abuse of the word terrorism that has become standard in the mass media.

For a bit of additional perspective, check out Dan Gardner's analysis of the European Union's Terrorism Situation and Trends Report 2010 (which incidentally makes clear that perhaps 80 percent of the terrorist attacks attempted in 2009 in the EU are the work of separatists, operating mostly in France, Spain and Ireland).

* Reported by way of Energy Bulletin, here's Kris De Decker's excellent article for Low Tech Magazine on an aspect of the solar energy issue that gets little consideration - the use of solar thermal power for industrial production. Decker argues that this is a practical and useful supplement to electricity generated by photovoltaics, which has the potential to get us that much closer to a renewable energy base.

* And finally, from the Huffington Post, a report on the discovery of a rich deposit of rare earth minerals off Japan - only part of the possibly 100 billion tons of them that may lie below the world's oceans (some 1,000 times the size of the deposits found on land to date). Given the important role of such elements in renewable energy technologies (and worries about China's present near-monopoly on the production of these minerals), there is cause for optimism here - though it is also worth remembering that ocean mining has frequently been overhyped in the past.

Revolution and Rebellion in the Postmodern World

Jack A. Goldstone offered a consideration of the causes of political instability that seems timely now in his classic Revolution and Rebellion in the Early Modern World (1991), a useful book despite the biases (and distractibility) of its author.1 Goldstone observed there that a combination of youthful population, urbanization, and economic stress extending as far as falling real wages and rising "elite competition" (too many qualified applicants for too few "good" jobs, the accompanying credentialing crisis, etc.) sets the stage for revolution; and moreover, that this combination of circumstances is apt to be demographically driven.

All of these have certainly been evident in the Middle East and North Africa. Additionally, recent events have exacerbated these circumstances. While it's the spread of social networking technologies like Facebook and Twitter that have got all the attention in discussions of the ongoing revolts in the Middle East, food prices--which hit record levels in January, exceeding even those seen in the "food and fuel crisis of 2006-8"--are likely to have been the bigger factor.2 That crisis saw developing nations (where poverty makes the populations more sensitive to price shocks) hit especially hard, many of them (including Egypt) seeing riots as a result, events which seem like a prelude to the economic shocks that followed (the Great Recession of 2008, the renewed rise of food prices) and the greater instability evident now.3

Goldstone also offered an insight into why revolutions (to which he is hostile) do not deliver what they promise; simply put, they take over from a previous regime that had already found itself pushed to the wall, its options and resources exhausted.4 (Put another way, by the time the revolutionaries take the palace, the treasury's empty and creditors are pounding on the gates.) A successor government can hardly deliver rapid, positive transformation in such circumstances.

This is all too likely to be the case again, especially given that, in Egypt at any rate, the change of regime seems to fit a pattern Parag Khanna described in his book The Second World:

Small countries . . . which have less economic weight than many large companies, often act as such corporations do, firing a bad CEO first and worrying about who should replace him later.5

Moreover, the deeper causes of the problem (climate change-fueled extreme weather, population stress, scarcities of energy and other resources, the vulnerabilities attendant on greater integration into a global economy and fuller exposure to the vicissitudes of international finance, the pattern of falling investment and budgetary pressures during four decades of slow economic growth) suggest that the current unrest is just a local, present manifestation of issues which are far wider, bigger and likely to get more disruptive in the coming years.

NOTES
1. Unfortunately, Goldstone goes beyond the useful thesis he advances to not just offering this pattern as a complete and universally applicable theory, but devoting much effort and space to arguing for that theory as an outright replacement for the Marxist approach to history he seems desperate to replace (not least, in his "straw man" treatment of Marxist historiography). Of course, conservatives have been playing the game of using Malthus to answer capitalism's critics for two centuries, Malthus himself writing his Essay on the Principle of Population (1798) to refute the social engineering schemes of William Godwin and the Marquis de Condorcet--clearly, without accomplishing their objective. After all, the two explanations are not mutually exclusive.
2. As Malcolm Gladwell noted in a lucid piece in The New Yorker in October 2010, the technologies that have got so much press support

a form of organizing which favors the weak-tie connections that give us access to information over the strong-tie connections that help us persevere in the face of danger. It shifts our energies from organizations that promote strategic and disciplined activity and toward those which promote resilience and adaptability. It makes it easier for activists to express themselves, and harder for that expression to have any impact. The instruments of social media are well suited to making the existing social order more efficient. They are not a natural enemy of the status quo.

3. The last time, rising petroleum prices (which hit $150 a barrel that year) were the component in the mix of factors (which also included bad weather and "soaring" futures markets) that got the most attention. This time, extreme weather and crop failures have received comparable attention, though oil prices are trending upward again, recently hitting $100 a barrel for the first time since prices crested and dropped in 2008. (Events in the Middle East seem to be cause rather than effect, however.)
4. Gabriel Kolko, who approaches some of the same issues from a leftist (albeit non-Marxist perspective) goes further, arguing in Century of War (1994) that revolutions do not so much topple the previous regime as step into the vaccum left by its collapse (though they achieve their successes by being better able to "articulate the desires of the masses," as well as "making fewer tactical and strategic mistakes than their rivals").
5. Parag Khanna, The Second World: Empires and Influence in the New Global Order (New York: Random House, 2008), p. 29.

Piracy in 2010

The International Maritime Bureau's Piracy Reporting Centre has just released its report on piracy during the year 2010. As anyone who's followed the issue might guess, it was another record for maritime violence, continuing the trend toward more attacks (up 10% over 2009, and the fourth straight year of increase), and especially more ships (53) and hostages taken (1,188), with the locus of activity still the waters off the Horn of Africa, particularly where the more serious attacks are concerned.

Until the spike in activity off Somalia, hijackings were a very rare occurrence, even as piracy increased through the 1990s and early 2000s (developments in which Somalia was also prominent). Now they occur almost weekly, and involve unprecedently large prizes (like supertankers, where '90s-era hijackings involved freighters displacing just a few thousand tons), events which far exceeded the most dramatic projections I remember encountering when I first looked at the issue a decade ago.

This all goes on in spite of widespread awareness of the problem and precautions taken to avoid it, as well as the presence of a massive, active international naval force in the area. It is the position of the Centre's Director, Captain Pottengal Mukundan, that the force has deterred a still larger number of attacks, and it is worth noting that incidents in the Gulf of Aden fell off by half in 2010 (down to 53 from 117 the year before)--as well as the fact that the pirates are venturing further out to continue their business:

In December 2010, they reached as far south as the Mozambique Channel and as far east as 72° East longitude in the Indian Ocean, an operating range IMB says is unprecedented.

Put another way, they are capable of operating (to some extent) all over the whole western half of the Indian Ocean, and the intensity of their operations is something not seen since the nineteenth century.

A significant factor, of course, is something about which naval patrols do very little--namely, the situation onshore. Pirates operating on any scale (let alone the formidable scale that permits attacks on ships 1,000 miles away from home, and the holding of dozens of ships and hundreds of sailors for ransom at once, as has become routine) simply can't function without bases onshore. In recent years, pirates have generally found bases where states situated along strategic sea lanes have collapsed. Just as the turmoil Indonesia went through in the late 1990s had much to do with a spike in piracy in its region, the collapse of Somalia (a country with a nearly 1,900 mile-long coastline at the southern end of the Red Sea) at the Cold War's end made the country a locus of piratical activity. Unfortunately, a stable, functional Somalia still seems quite a ways off--while the pressures that drive states to failure seem likely to get worse in the years to come as demographic, resource and climatic pressures weigh all the more heavily on the international system.

The Real Unemployment Rate (Collected)

Back in 2009-2010 I published a number of posts about the monthly unemployment report, rounding up what seemed to me the relevant commentary and getting in my own two cents (not least, in looking beyond the usually cited U-3 figure to the other, more expansive measures of unemployment). For whatever interest they may still have (if only as a time capsule) I have decided to gather the more substantive of them together below.

June 5, 2009
Regular readers of this blog know the drill. Another month, another unemployment stat when the BEA puts out its report for May 2009, which it usually does the first Friday of the month.

According to the release, May saw the official ("U-3") unemployment rate rise from 8.9 to 9.4 percent-a full half percent increase, for the second month in a row.

The "U-6 measure," the fullest calculation of "labor underutilization" regularly reported in the BEA stats (counting not just "total unemployed" but also marginally attached workers, discouraged workers and involuntary part-timers) went up from 15.8 percent of the work force in April to 16.4 percent in May.

Once again, this bad news is being packaged as a "good news, bad news" deal.

The good news is that the job loss rate is slowing. What this means when you look at the actual numbers is that 345,000 jobs were lost in May-a lousy number, but still less than the half million-plus seen in recent months.

Yet, the overall 9.4 percent number that resulted from this slower pace of loss is worse than what was expected (apparently, a 9.2 percent unemployment rate).

This implies a contradiction which has not been commented on (how can fewer job losses than expected track with more unemployment than expected?), and so one has to look below the surface of that number.

As it happens, the category that saw the main increase is people coping with long-term (15 weeks+) unemployment, which went up from 4 to 4.5 percent of the work force, this happening without depleting the other categories covered, there being "more where they came from."

One explanation for this is that more people are participating in the labor force. There is a tendency to think of this as an unusual, temporary aberration, but it may plausibly be taken to mean that the hard times have driven a certain percentage of people who earlier didn't feel that they had to work to look for employment (retirees who have watched their investments vanish; members of households coping with the loss of income, etc.)-skewing the figures perhaps, but in a way that reflects the current difficulties.

Additionally, it is worth noting that the "official" (9.4 percent) figure does not include those working on an involuntary part-time basis, a category which did see a slight increase during May, and may also be reflected in the cutbacks in hours worked. The work week is down to 33.1 hours, the shortest it's been "since recordkeeping began in 1964." As Liz Wolgemuth of U.S. News & World Report notes,

cost-cutting employers may have slowed their job shedding but continued to slash their employees' hours. Indeed, more than half of employers surveyed last month by outplacement firm Challenger, Gray & Christmas reported using cost-containment strategies such as cutting salaries and wages, while a smaller percentage were cutting staff.

This must be recognized as a different strategy, distributing the economic pain differently, rather than clear-cut proof things are getting better.

While not related to the problem at hand, it is also worth noting that the steepest losses were in the sectors concerned with actually making things (particularly manufacturing, where 156,000 places were lost), whereas the sectors adding jobs were in services (health and government, particularly-with in the latter cases, federal employment seeing job losses, while education systems have done some hiring). Of course, this would seem to be a commonplace, manufacturing being more susceptible to such shocks, and quicker to let workers go, but given the long-term trend of U.S. deindustrialization this would seem to support Richard Moody's claim that the recession is creating a great deal of structural, rather than cyclical, unemployment.

Not inconsistent with such an outlook, James Galbraith recently predicted that not only will the official figure hit 10 percent, but that it will stay there for "a long time"-perhaps years (an assessment that brings to my mind the bleak picture projected for Ireland in the report by Ernst & Young I discussed last month).

Even the comparative optimists banking on a recovery in the third quarter of the year (July-September) expect the employment picture not to recover this year, improvements in the employment generally lagging recoveries (perhaps by up to a year in this case, according to one prediction).

My guess-looking at the collapse of business investment reported in last month's GDP data, and the data from earlier this week testifying to the weakness of consumption, is that while we may see some ups as well as downs in the months to come, the foundations of a really solid recovery have yet to be laid-and things could yet get worse than even Galbraith has speculated.

July 5, 2009
The BLS reported on Thursday, July 2, that the official (U-3) rate's 9.5 percent, while the more inclusive U-6 rate hit 16.5 percent. (In each case, the figure is up 0.1 percent from what it was in May.)

This report is apparently "not as bad" as what was expected (a 9.6 percent U-3 rate), even though the number of job losses was higher than forecast: 467,000 workers got pink slips, many more than the figure predicted (over 100,000 more actually, and close to 50 percent more than in May).

This lower-than-expected unemployment rate, despite higher-than-expected job losses, is all the more surprising given that the percentage of the labor force which is suffering long-term (15 weeks+) unemployment (the U-1 category) saw a big jump-from 4.5 percent in May to 5.1 percent in June (a full 0.6 percent).

At least part of the explanation would seem to lie in the shrinkage of the work force. While some economists last month were quick to point to the labor force's expansion as a factor in the high unemployment rate (it rose by over a million between January and May, which as I noted last month could be read as a sign of distress) the number dipped by over 150,000 from May to June (about 0.1 percent of the work force) as people drop out of the game, an issue rarely acknowledged in the press (Liz Wolgemuth of U.S. News & World Report, whom I also cited in my discussion of this issue last month, being the one exception I've come across).

In any case, simply counting up the number of unemployed understates the problem, because those who do have jobs are still seeing their hours drop. The average work week is now down to "33 hours . . . the lowest level on record," which combined with weak earnings growth (hourly earnings were flat), means falling income (even prior to adjustment for inflation).

As to the longer term picture: this recession has effectively erased the growth in employment of the last business cycle in its entirety, so that as far as the number of jobs available countrywide goes, we're back where we were in 2000, when the country's population was about 10 percent smaller. (And it is well worth noting that manufacturing has been especially hard hit, again accounting disproportionately for the lost jobs-136,000 of them, or almost 30 percent-speeding us further and faster along the road to deindustrialization.)

Of course, there is still plenty of optimism among the talking heads, still promising a turnaround in the "second half of the year" (which we have just entered). One reason is that announcements of layoffs to come seem to have fallen to their lowest levels in 15 months.

Still, the general expectation is that unemployment will hit 10 percent later this year, and just as the talk of "growth" has meant increasingly less to those who actually have to work for money, so will "recovery" (likely to take years where job creation is concerned, in even the optimitsic forecasts-even some mainstream ones being much worse) mean little as this "indicator" (if you actually need a job to live, it's far more than that to you) continues to lag.

November 16, 2009
As was widely reported in the press, we hit (and passed) the much talked-about milestone: 10 percent of the American work force "officially" unemployed.

The actual number is, of course, 10.2 percent.

The figure denoting long-term job losers (15+ weeks out of work) is likewise up, to 5.7 percent (compared with 2.7 percent of the work force exactly one year ago, when the panic was at its height).

And of course, the broader, U-6 category, now stands at 17.5 percent-more than one in six members of the work force presently lacking the full-time work they wish they had.

For a better than average assessment of the news, check out this post from Seeking Alpha.

Also worthwhile from the standpoint of perspective, this article from Tom Raum of the Associated Press confirms the increasingly mainstream character of the view that this unemployment is structural than cyclical. (Remember Richard Moody's comment from a few months back, or the story from the Christian Science Monitor asking if the U.S. is "the New France"?)

Raum specifically points to, among other things, the vicious cycle at the root of the situation, the weakness of the job market (along with the credit crunch) suppressing the consumption that would be key to the new investments that would drive job growth (in fact, it may be that Americans are already "settling into spending less"). The situation is all the worse for "the carnage among Detroit's automakers and the surplus of new and foreclosed homes and empty commercial properties," the auto- and construction industries, two keys to the renewal of employment expansion in the past, having been left in an especially poor position to play the role of economic locomotive anytime soon. (Indeed, both manufacturing and construction suffered 60,000+ net job losses each last month, a particularly dark spot in this 22nd straight month of job losses.)

So much for the ebullient talk of green shoots; the hope of anything more than a shallow, short-term fix leading to still more long term mess from the methods tried; and in the sweeping of harsher economic realities under the rug as the Dow Jones average rebounds, the hope that governments would move beyond "business as usual" after the cold shock of reality afforded by the Great Recession of 2007-2009 (as noted by Mike Whitney of the Centre for Research on Globalization in his sweeping overview of the economic policy of the Obama administration, one year in).

December 4, 2009
The official, U-3, unemployment rate has edged down from 10.2 percent in October, to 10 percent in November, according to today's report from the Bureau of Labor Statistics.

Additionally, the U-6 rate went down by an even larger margin, from 17.5 percent in the last report, to 17.2 percent in this one.

However, a quick check shows that the number of long-term unemployed actually climbed, from 5.7 percent in October to 5.9 percent in November. The improvement, as Kurt Brouwers of Marketwatch suggests, may simply be "a statistical change rather than a real improvement" due to a number of frustrated job-seekers giving up the hunt.

In other words, the fact that people give up looking for work because the situation is so awful ends up, perversely, looking like a sign of improvement.

It also seems that, as Briefing.com suggests, the "drop in payrolls was entirely driven by goods-producing firms shedding jobs. Goods-producing companies lost 69,000 jobs in November." Read: manufacturing and construction. This is also bad news rarely commented upon, fashionable as it may be to slight actual goods production as trivial.

As always, the details count.

The U-3 unemployment rate held steady until last month, remaining officially at 9.7 percent-a point which is of course being spun in the usual ways-like "Wasn't that a close one? We thought it'd be worse!" or "We've stabilized, which means we can only go up from here!"

Less noted was the fact that the broader U-6 rate, after seasonal adjustment, actually saw a slight uptick-from 16.5 to 16.8 percent.

It may be that the Census (which will see the hiring of a half million workers) will trim the numbers slightly in the next few months, but this is a short-lived blip, while observers continue to wait for signs of real strength in critical sectors. Construction suffered last month, still shedding plenty of jobs-64,000 is the figure I'm seeing-but economists chalk that up to the unusually rough winter weather. (Given the trend over the last year, however, I'm not sure how much difference it made.) Manufacturing has seen some hiring, but the car industry clearly saw job losses-10,000 in February after the uptick of the previous month, and John Schmid of the Milwaukee-Wisconsin Journal-Sentinel is right to refer to the sector's "erratic fluctuations," of which this may simply be one.

Even the relatively upbeat report from Business Week does not question the widespread expectation of a slow labor market recovery-a pessimism that affects not only the officially unemployed, but the underemployed as well, according to Gallup tracking polls from January. Notably, the pessimism is far stronger among those with postgraduate degrees than those who just have "some college or vocational school," with sixty-five percent in the former category giving the "not optimistic" answer, compared to forty-two percent in the latter. (Those looking for broader coverage of those confronting such downward mobility can check out Peter S. Goodman's four-pager in the New York Times last month.)

That the matter of employment is still being discussed as something apart and different from the broader issue of an economic recovery, the "conventional wisdom" from before "the Great Recession" still going strong.

February 5, 2010
The (seasonally adjusted) figures for January have the U-3 unemployment rate at 9.7 percent-a small drop from the previous month's figure of 10 percent, and down further still from the recent peak of 10.2 percent reported late last year (since revised down to 10.1 percent).

The U-6 figure also fell back to 16.5 percent.

In short, the numbers seem slightly better. However, they remain essentially lousy, and a detailed examination of the picture hardly improves its appearance.

For one thing, as Steve Schaefer reports in a market brief at Forbes.com reports, there has been no actual job growth-with the economy overall suffering job losses (20,000, with gains in retail and temp hiring overcome by declines in employment in transport and warehousing).

This is notable, especially in light of a bit of buzz last month regarding reports of a 5.7 percent GDP growth rate in the fourth quarter of 2009-which, as Schaefer notes, was due mainly to the restocking of inventories (3.4 percent of that 5.7 percent increase in output) rather than some revival of consumer demand (where would it come from, with unemployment, anxiety and credit as they are?) or really new investment. In short, it's not likely to last, and a really substantive recovery from "The Great Recession"-even to the mediocre state of things antecedent to 2007 (so easily forgotten given the past-quarter, this-quarter, next-quarter perspective of too much business journalism)-far from realized.

March 6, 2010
The U-3 unemployment rate held steady until last month, remaining officially at 9.7 percent-a point which is of course being spun in the usual ways-like "Wasn't that a close one? We thought it'd be worse!" or "We've stabilized, which means we can only go up from here!"

Less noted was the fact that the broader U-6 rate, after seasonal adjustment, actually saw a slight uptick-from 16.5 to 16.8 percent.

It may be that the Census (which will see the hiring of a half million workers) will trim the numbers slightly in the next few months, but this is a short-lived blip, while observers continue to wait for signs of real strength in critical sectors. Construction suffered last month, still shedding plenty of jobs-64,000 is the figure I'm seeing-but economists chalk that up to the unusually rough winter weather. (Given the trend over the last year, however, I'm not sure how much difference it made.) Manufacturing has seen some hiring, but the car industry clearly saw job losses-10,000 in February after the uptick of the previous month, and John Schmid of the Milwaukee-Wisconsin Journal-Sentinel is right to refer to the sector's "erratic fluctuations," of which this may simply be one.

Even the relatively upbeat report from Business Week does not question the widespread expectation of a slow labor market recovery-a pessimism that affects not only the officially unemployed, but the underemployed as well, according to Gallup tracking polls from January. Notably, the pessimism is far stronger among those with postgraduate degrees than those who just have "some college or vocational school," with sixty-five percent in the former category giving the "not optimistic" answer, compared to forty-two percent in the latter. (Those looking for broader coverage of those confronting such downward mobility can check out Peter S. Goodman's four-pager in the New York Times last month.)

That the matter of employment is still being discussed as something apart and different from the broader issue of an economic recovery, the "conventional wisdom" from before "the Great Recession" still going strong.

April 2, 2010
The Bureau of Labor Statistics' latest figures on unemployment have the U-3 rate holding steady at 9.7 percent, while the U-6 rate has ticked upward to 16.9 percent (from 16.8 the previous month).

Hiring is supposed to be a bit stronger, with employers adding 162,000 jobs in March (touted as the largest addition in three years).

This is not bad news, but unspectacular news. Given that the recession added another 8 million jobless, simply to return to where the economy was in 2007-never mind alleviating the situation of those who had already been unemployed or underemployed, or accommodating new entrants to the job market-will take fifty months of progress at that rate, over four years without setbacks.

Of course, trends are rarely so constant-and deceleration or reversal seem more plausible than acceleration. One positive sign is that manufacturing payrolls increased, but only by about 17,000 (10% of the total). Meanwhile, as the Los Angeles Times notes, "about 30% of the payroll increases over the last month, or 48,000 jobs, were created by the Census Bureau"-helpful, but temporary, and far from being proof of robust long-term job growth in the private sector.

John Canally of LPL Financial is quoted in the Christian Science Monitor as saying that the natural job growth rate (which this data would support) is more along the lines of 100,000 jobs a month-at which rate it would be some eighty months, or almost seven years, to return to pre-recession employment levels-2017, before the market recovers to where it was in 2007.

Even those numbers, however, merit some extra scrutiny. On top of the Census jobs, there were another 40,000 private sector temp jobs in that payroll increase-better than nothing (and a sign of improvement), but not an unambiguously positive sign for those concerned with the underemployment the U-3 figures overlook. After all, it seems only too plausible that this recession will mean a long-term increase in the percentage of the work force working as temps who wish they were full-timers.

And of course, there is the continued tightness of credit and the implausibility of much increase in consumer spending so long as people remain jobless, or insecure in their jobs.

In short, even if things do start to brighten, the effects of this decade's financial disaster will almost certainly be felt for years to come.

October 8, 2010
Last month the National Bureau of Economic Research declared the "Great Recession" officially over as of June 2009.

Still, you wouldn't know it to look at the unemployment data that came out today. "Labor underutilization"'s at 9.6 percent according to the U-3 measure, 17.1 percent according to the U-6--which not only represents a 0.4 percent rise over August, but is actually slightly higher than last September's figure (a flat 17 percent).

As Steve Schaefer of Forbes notes, the slight increase in the number of unemployed that resulted in this figure was due mainly to government layoffs, "split almost evenly between the end of temporary census jobs and cuts at the state and local levels." This overwhelmed the slight rise in private sector hiring, mostly in the service sector, health care and food services in particular (the two, adding some 24,000 and 34,000 jobs respectively, almost equal to the total increase of 64,000 by themselves). Construction and manufacturing are still shedding jobs (those sectors down by 21,000 and 6,000 respectively last month, the improvement in manufacturing earlier this year really just about restocking inventory after all).

The fact that government is still cutting so many jobs--with jobs in education "declining substantially due to budget woes" (as Joshua Shapiro of MFR Inc. has noted)--is a worrisome sign, and Jay Feldman of Credit Suisse would seem all too right when he notes that "The state and local fiscal crisis is clearly leaving a deeper imprint on aggregate economic activity." The decline in construction and manufacturing, those two crucial engines of employment and growth, is likewise telling, as is the predictable obverse of the fact, namely that the increase in private-sector employment has been mainly "in bar and restaurant jobs . . . not exactly known for the good pay and benefits," as Paul Ashworth of Capital Economics notes.

Taken together they all indicate the frailty of the job market, and reminders not only of the continued weakness of demand, but the likelihood that demand will remain weak for some time to come.

It's all getting awfully monotonous (which is one reason why this is no longer a monthly feature of this blog).

Meanwhile, in other (related) economic news:

* Banks have failed even faster in 2010 than they did in 2009 (bringing the total since Washington Mutual's collapse in September 2008 up to 279 this past month) and there is little sign of the rate falling off, as Randall Smith and Robin Sidel of the Wall Street Journal note in their "anniversary" piece from two weeks ago.

* The issue of income inequality inside the United States has got more than the usual amount of attention in the press in recent weeks, due primarily to two events. One is the U.S. Census Bureau's annual publication of its data on income distribution. (The country's Gini index, as it happens, is now 0.468, which would make the U.S. equal to Rwanda, according to the CIA World Factbook.) The other is the release in September (just two days before the Census report came out) of Paul Pierson and Jacob S. Hacker's book Winner-Take-All-Politics: How Washington Made the Rich Richer and Turned its Back on the Middle Class, described in a piece in the Atlantic Wire sampling response to it as "a synthesis of recent studies" of the subject. (Ezra Klein, blogging at the Washington Post, also takes a look at the book, presenting Pierson and Hacker's data regarding what the current picture would have looked like "if growth had been equal" in graph form.)

Review: The Organization Man, by William H. Whyte

New York: Simon & Schuster, 1956, pp. 429.

When I picked up William H. Whyte's The Organization Man I expected to find a musty curiosity. Back when Whyte was writing the country was undergoing sustained, rapid economic expansion such as America has not approached since (averaging 5 percent GDP growth a year for twenty years); the New Deal State was going strong and expected to go on doing so forever, the conservatives fulminating against it apparently hopeless yearners for a past that was never coming back; and a new hire of the kind he was writing about expected to be able to stay not just in their field, but at the same company, for life.1 Indeed, Whyte worried that the great danger of the organization to the individual was that being an "organization man" was too comfortable, the company environment too "beneficent" (to use his favored term) for the good of the organization men, or their organizations. By contrast the post-1973 period has been characterized by mediocre growth through decade after recession-filled decade; by a shift in the character of government's role in economic life that in Whyte's day had been widely thought an inconceivable regression; by the stagnant salaries and generalized insecurity that have left working people caught up in a revolution of falling expectations. The result of all this is that the pressures of the workplace would today seem to be something quite different.

Yet, while much has changed, much has also remained constant, and much of the analysis of this book, sophisticated yet accessible in a way that makes so much of our current pop social science seem embarrassingly dumbed down, could have been written today. Barbara Ehrenreich's writing in books like Bait and Switch (2005) and Bright-Sided (2009), its description of the pressure to be "optimistic" and agreeable while on the job, and the submergence of individuality beneath sociability in the workplace; the self-help tradition and its special place in the culture of salesmanship; the use, misuse and abuse of personality tests by employers; is a reminder that much of what was problematic about the world of work Whyte described remains with us. Similarly relevant is his description of how the middle class handled its finances in his day, the portrait he paints one of people with little knack for managing their own money generally living beyond their means to maintain their social status (a reminder that this hasn't solely been a feature of the slow economic growth we have taken for granted since the '70s). Likewise, there is the rightward political shift among those leaving the city for suburbia, the similarly motivated "ex-urbanites" today repeating the process.

An even bigger surprise for me was Whyte's characterization of education. Reading his comments on the conservatism and non-intellectualism or anti-intellectualism of college students; the decline of the humanities and liberal arts (and even the short shrift given the fundamental sciences) not only as majors but as components of the average student's education as training became more narrowly vocational; the weaknesses of teacher recruitment and teacher training, with its low stress on subject area knowledge; the hysteria that some challenge by another nation requires us to produce more engineers, to lament that more students don't study the necessary subjects, and to (disingenuously) blame "softer" majors for that lack; the concern that business's grant-giving is having undue influence on education, and that academics are only too inclined to cater to what they think businessmen want; it certainly seemed to me that there had been very little change on campus, for all the celebration and condemnation of the 1960s as some watershed. I think, too, of what Whyte said of business's bias against liberal-arts majors at hiring time, even as business leaders call for more broadly educated employees, the author observing that

At the rate things are going, it would seem liberal arts is well on its way toward being made into a specialty--a preprofessional training considered useful only for those who intend to lead the gentle life (105).

And of course, there is the issue at the bottom of it all, summed up in the words beneath the title on the cover: "The clash between the individualistic beliefs he is supposed to follow and the collective life he actually lives--and his search for a faith to bridge the gap. Of course, that clash was not a new issue in Whyte's time. Arguably, Frederick Jackson Turner writing a half century and more earlier wrestled with the same issue in the wake of the frontier's close, anticipating the replacement of earlier, more libertarian economic thinking by a world of big business and big labor and big government, the older resource profligacy by something like sustainable growth--and an America looking more like Europe. The failure to reconcile the contradiction between reality and ideology, which may be starker now than ever before, makes Whyte's take on the problem even more relevant now than when it was first written. A century after the great merger movement and the trusts, during which time the trends such writers saw have only advanced, our rhetoric on issues from space development to the welfare state still recalls frontier-style individualism. Simply put, we haven't really dealt with the contradiction, and I wonder if we ever will.

NOTES
1. This is my own calculation using data from the Bureau of Economic Analysis, adjusted for inflation.

A Brief History of the Future: A Brave and Controversial Look at the Twenty-First Century, by Jacques Attali

New York: Arcade Publishing, 2009, pp. 291.

True to its title (how often does a book refer to itself as "brave and controversial?"), Jacques Attali's A Brief History of the Future opens with an introduction that will strike most as self-confident to the point of arrogance. The author quite flatly tells us that he will "demonstrate . . . that history obeys laws that allow us to make predictions and channel its course" (x). To be fair, this is hardly an exceptional claim--just one made with less than the level of humility demanded by the anti-teleological bent of contemporary intellectual life.

Nor is Attali's claim regarding the nature of those laws particularly unusual. As Attali argues,

Viewed from an extremely long-range standpoint, history flows in a single, stubborn, and very particular direction . . . from century to century, humankind has asserted the primacy of individual freedom over all other values (xii-xiii).

In practical, tangible terms this has manifested itself in the "progressive rejection of all forms of servitude," the development of labor-saving technical advances, and the "liberalization of lifestyles, political systems, art, and ideologies" (xiii), increasingly empowering the individual to "plan and master his fate free of all constraints--except respect for the rights of his fellow man to the same freedoms" (xiii).

Related to this growth of freedom has been a pattern of shift in the balance between the three historically dominant social forces--religion (in a theologically-oriented "ritual order"), violence (in a territorially-oriented "imperial order") and money (in an individualistic "mercantile order")--or to put it another way, the priest, the soldier and the merchant--with the dominance of religion giving way to the dominance of violence, and the dominance of violence in turn giving way to the dominance of money. The ritual order predominated through pre-history, increasingly giving way to an imperial order in the third millennium B.C., when the first empires emerged. The advent of empires headed by princes was a crucial moment in the development of human freedom--the "concept of an individual . . . born with the ruling prince, and it is under his dictatorial sway that the dream of freedom begins" (p. 14). (Attali identifies China's Huang Di as the first such prince, though he appears to have come along later than Egypt's Menes, the first to unite Upper and Lower Egypt, whom Attali also mentions.)

The third order makes its first appearance as a dominant force some two millennia later, in the eastern Mediterranean during the first millennium B.C., among the Greeks, Phoenicians and Israelites. For these peoples, "human life comes before anything else"--which is to say that their outlook is a worldly one--and "every man is equal to his neighbor" (even if full humanity is accorded only a very narrow group), two ideas not held by the previous orders. Additionally, the acquisition of wealth is regarded as a worthy goal, and there are the first glimmerings of the idea of progress, going along with which is a valuing of the new. Attali calls this package of ideas the "Judeo-Greek ideal," and the social model growing out of it the "market democracy."

The mercantile order developed inside the successive Roman and Islamic empires that dominate the Mediterranean region. The "leading edge of the mercantile order," however, passed from Moorish Cordoba to the West in the twelfth century (p. 31), after which point the "core" shifted from place to place as a result of crisis or war.1 Still, the core was invariably, a port city with a substantial agricultural and industrial hinterland, the "hard power" to "exert . . . control over hostile minorities, lines of communications, and sources of raw materials" (p. 105), cutting-edge financial institutions and a comparative openness to outsiders. These enable it to attract and retain an "innovative class," which advances the industrialization and automation of economic life, and expands the definition of human freedom. Indeed, each core's ascendance is typically connected with the appearance of a central new technology, which did not necessarily originate there--contrary to the prevailing pieties about innovation--but which is implemented there more thoroughly than anywhere else.2

At the start of this period the cores generally appear in the Low Countries and northern Italy--Bruges, Venice, Antwerp, Genoa and Amsterdam successively being the locale from the twelfth to the eighteenth centuries--after which it passes to London and then crosses the Atlantic to Boston, New York and finally Los Angeles. The last is the core in the age of the microchip, which has seen the Pacific supplant the Atlantic as the hub of the world economy.

It is here that Attali turns from what has been essentially a history of capitalism (comprising the first third or so of the text, 86 of my edition's 278 pages), to the future of capitalism and everything else. Today L.A.'s tenure as a world core is three decades old, and the "American empire" of which L.A. is a part is, Attali notes, beleaguered by mounting debt, overfinancialization, deindustrialization and a widening gap between rich and poor. Attali predicts the continued extension of market democracy and rapid worldwide economic growth for two decades to come, but believes L.A. (and the American empire) will have seen its day by the 2030s. Attali contemplates the possibility of a tenth core (perhaps also to appear in California, just as the U.S. had two successive cores on the East Coast, Boston and New York), examining numerous possibilities, but in the end judges a shift to a polycentric world of regional leaders more likely, while the United States, after the end of empire, becomes either a North European-style social democracy, or a dictatorship.3 (Indeed, he raises the possibility of a broader, if only partial, reversal of market democracy's gains by the spread of market authoritarianism.)

That particular process will be reinforced by three waves, all of which are already sweeping the world, which will define the twenty-first century more than the accomplishments (or misdeeds) of any one state. The first, which Attali calls "planetary empire," is the continued expansion of the size and pervasiveness of the market to the point where the power of money unshackles itself from everything else, including the nation-states it will all but dismantle (the U.S. included), and even the family unit (as the atomization and proletarianization of human beings approaches its greatest imaginable extreme).

The ultimate conclusion is a super-capitalist "super-empire" with an internationalized, ultra-mobile elite at the top (hypernomads) moving as their interests suit them, as nations are reduced to "oases competing with one another to attract passing caravans" (183). The sedentary, who cannot or will not embrace a life of such mobility, are necessarily marginalized. Virtually all services will be supplied on a private basis only, an order conducing to the benefit of the richest hypernomads at the expense of everyone else. Meanwhile, the governance of business will be almost entirely private--both by the associations industry will be forced to set up for itself, and the increasingly powerful insurance business. (In the provision of insurance against ecological disturbances, as well as the rising cost of scarce energy, water and other resources, the market will even end up taking a measure of responsibility for the environment--though not enough to take care of the problem.) Related to this development will be the emergence of an unprecedented surveillance society, with business pursuing any and all information about "employees, clients, suppliers, competitors and risks" (173), while individuals take enormous pains to verify their continued acceptability to employers, insurers and the like through an adherence to the norms set for them. Ultimately, human beings will be commodified (209) as genetic engineering, cloning and the technology to transfer a human consciousness from one body to another make a posthuman existence feasible (an outcome Attali views with great revulsion, and expects to be key in prompting subsequent backlash against the first wave).

The second wave, "planetary war," is the sub-state, intra-state and interstate violence which will emerge out of an unequal, aggrieved world struggling with sharpening resource scarcity and climate disruption, as well as the "super-empire's" assaults on traditional cultures and institutions (like religion). Far from emphasizing one type of conflict, just about every kind of conflict defense intellectuals have predicted makes an appearance in this part of the book, with some relatively outré possibilities included (like the prospect of new Volkerwanderungs by heavily armed refugees), and the array of weapons involved including exotic new possibilities (like nanite-based systems). This could well culminate in the intense, perhaps omnicidal, violence of "hyperconflict."

The third wave, "planetary democracy," is the growth of the "relational enterprises" of civil society (led by "transhumans," a fourth "sector" after the priests, soldiers and merchants), which he expects will not only salve the damage done by the first two waves, but tame the first wave of super-capitalism and suppress the second wave of hyperconflict, revitalizing democracy, and laying the foundations for meaningful global governance (through revived but more open states, and international organizations). The protection and extension of the "common good"--"the things that make life possible and worthwhile--climate, air, water, freedom, democracy, culture, languages, fields of knowledge" will be the priority for that new order, while a "universal intelligence" greater than the sum of its parts, and perhaps leading to a "hyperintelligence of the living" (implicitly transcending humanity technologically) will emerge. Everything essential to leading a full and rich human life and "participat[ing] in the common good" (274) will become available to all, including not just a more developed version of the rights of the classical liberal kind (like "freedom"), or more recent and even less often realized social and economic rights (information and a clean environment will be part of the package), to such things as "respect" and "compassion" in a more prosperous, more sustainable and freer world than has ever existed before. Attali terms this "hyperdemocracy," and is optimistic about the likelihood of the happy ending to the trajectory his book charts--but there is a range of possibility regarding how long it will take to get there, and how much worse things will get before they start to get better.

A Brief History is not a particularly dense read (those accustomed to this sort of futurology should be able to breeze through it), but there's no arguing the sweep of its narrative, or the range of its influences. Perhaps first and foremost, there's quite a bit of Hegel here: the idea of history as the story of freedom's growth, in which we can see a movement from one being free (in the despotic regimes of those first princes), to some being free (in the more or less aristocratic societies that emerged since), to all being free (at the "end of history"). It's evident too in the westward progression of the cutting edge from one "world-historical" people to another, China giving place to the eastern Mediterranean, after which Western Europe (and eventually the United States) picks up the torch; the characterization of East and West, and Asia and Europe he presents; and the dialectical movement of that history, with action and reaction compelling a higher synthesis (as the second wave pushes back against the first, and the third pushes back against both those preceding it).

There's also a good bit of Hegel-by-way-of-Marx, there being a fair amount of Marxism here, explicitly acknowledged. The Marxist critique of capitalism (which Attali regards as substantially validated by recent history) is key to the narrative, not least the market's tendency to create innumerable problems (cartels, disruptive speculation, wasted natural resources, etc.), failure to resolve other problems older than itself (poverty, joblessness, etc.), and dissolve all things in the cash nexus, while ultimately its thrust is unsustainable. He does not suggest the possibility of a revival of Marxism or even socialism as political forces (or propose any overarching secular alternatives which might occupy their former place), but he predicts that the failures of the market will become increasingly obvious as such, and feed the reaction against them he described above.

The inspirations and parallels, however, are not to be found exclusively in these classics of nineteenth century German philosophy. Even if the rise and fall of capitalism's cores is not precisely the same story as the rise and fall of the world-system's hegemonic great powers (a story told numerous times by historians like William McNeill, and Paul Kennedy, and Charles Kindleberger), the parallels between them are considerable, with the principal exceptions Attali's focus on key cities rather than key countries in his account of the core's progress, and the short shrift (perhaps too short) he gives to the Iberian powers more typically viewed as dominant in the sixteenth century, Portugal and Spain.

Finally, I got a sense that when he first wrote this book in 2003 (the French edition came out in 2006, and the English edition only three years later) he'd distilled the preceding decade or so of writing about the post-Cold War order. The book his three waves actually put me most in mind of is perhaps Benjamin Barber's Jihad vs. McWorld (1996)--corporate globalization (wave one) colliding with an often violent ethno-religious-traditionalist reaction (wave two), while a reinvigoration of civil society (wave three) offers our best hope for a way out of this mess. (I can point to Thomas Friedman's The Lexus and the Olive Tree (1999) as well, though in keeping with its far less critical approach, Friedman's later book offers Lexuses and olive trees as comparatively gentle variations on McWorld and Jihad, respectively.) A lot of other '90s-era ideas are evident here as well, like Francis Fukuyama's version of the "end of history" argument. (Indeed, Attali explicitly states that the "End of History . . . will certainly come about" as a result of economic growth, increasing transparency and the expansion of the middle classes (p. 165), though as demonstrated above, there are considerable differences between his reading of events, and Fukuyama's neoconservative triumphalism.) There are echoes of Samuel Huntington's "Clash of Civilizations," Robert Kaplan's "Coming Anarchy," and also Thomas Homer-Dixon and Michael Klare's writing on ecologically-driven conflict, in Attali's description of hyperconflict.4

To Attali's credit, the result is a sense of synthesis rather than the incoherence into which such an effort might easily have collapsed, and even if many of his own insights appeared in his previous books (his three-orders concept, among others, can be found in previous books by this author, like 1992's Millennium), they do contribute usefully to the whole. His treatment of ecological issues and the stagnation of technological progress in recent years (the latter an especially underappreciated matter) is on the whole quite persuasive. Attali also recognizes the challenges laying ahead of a Chinese or Indian path to world leadership, and his idea that the twenty-first century will see multiple, regional cores rather than a single global one is quite plausible. Some of Attali's predictions also seem to have already been validated, particularly those about a reversal of democracy in some quarters (as suggested in John Kampfner's 2009 book Freedom for Sale) and the increased scale of criminal activity (as in the intensity and ambition of piracy off the Horn of Africa in recent years).

As a discussion of the growth of democracy out of the market his book offers a rare degree of balance and nuance, certainly in comparison with the more triumphalist, sanitized versions American writers tackling the theme (like Walter Russell Mead in God and Gold) are prone to offer--these being far less likely to acknowledge the ways in which an increase in the freedom of a few has gone hand in hand with a decrease in the freedom of others. This is certainly the case with his analysis of contemporary globalization, in contrast with the many writers--like Thomas Friedman--prone to focus on "winners" and ignore or brush aside "losers" in the game.

Nonetheless, Attali's book has a number of significant weaknesses. One is that Attali's discussion of economics all too often reflects hype rather than substance--for instance, when he approaches the subject of how well the world economy did during the last three decades, the author of this book claiming that in the years since 1980 Gross World Product increased "by more than 4% per year, a rate never before achieved in history" (p. 94). (In actuality the world economy didn't even come close, the more generous measures putting it at 3 percent, and a good many more nuanced indicators putting it well below that. It might also be pointed out that the world did better during the late 1940s to the early 1970s, when it actually achieved and even exceeded the aforementioned 4 percent rate, as I show in my own article on the subject here.) He is equally prone to accept hype where it is negative, as with the claims for "Eurosclerosis," which he takes at face value. His discussion of the economics of energy production and use is particularly superficial--blithe about the prospects of extracting unconventional oil, dismissive of renewables, and overly precise about the intrinsically speculative matter of the commercial prospects of nuclear fusion, which he simply states "will certainly not be practicable before the end of the twenty-first century, at best" (p. 137). (I covered some of the deficiencies of such an outlook in an article I published in Survival two years ago, available here.)

Further, while there is much that is useful in the basic vision of three waves, there is much in the details that strikes me as doubtful. It seems to me that privatization cannot and will not go to the extremes Attali describes, not least because of the problems he describes. As Thomas Frank notes, the actuality of neoliberalism has been the capture and reorientation of states, rather than their outright suppression. I have a hard time picturing this actually changing, and I would expect that states will go on having their place, and indeed, remain large and powerful entities in their own right.

Where recent trends are concerned, again, my view has been that we saw anemic world economic growth and technological stagnation, and that barring some change unforeseen in this discussion, this will continue for the foreseeable future, especially as ecological shocks and financial instability worsen. (In particular one has to wonder if a posthumanity such as he imagines will become feasible within the time frame he describes--technological stagnation working against this outcome--and how it actually will be received. The kind of rebellion he describes does not seem necessarily assured.)

I have my doubts, too, that religion will play quite the role he imagines in hyperconflict, and certainly about its participation in an anti-capitalist backlash. By and large, the revival of fundamentalism has been socioeconomically as well as socioculturally conservative, and my guess would be its cooptation by the first wave, so that its prominence in an overt, explicit anti-capitalist movements; would have little precedent (and Attali fails to make an argument adequate to explain why things will be different this time). I wonder also if religion will not prove a more hollow force during this century than is commonly suspected (especially if secular critiques of the status quo turn out to be less sterile than he imagines).5

I wonder, too, what effect the aging of the world's population Attali acknowledges will have on the propensity to resort to violence, if it will not produce an opposing tendency toward a less bellicose world.6

Finally, while I do not denigrate the accomplishments of the "fourth sector" which constitutes the main source of hope in his story (as it does in so many others written in recent decades), Attali offers little reason to think it will really have the wherewithal to come to the rescue in the face of super-empire and hyperconflict, especially given the resistance the first two waves will put up, and the lack of a clear, overarching vision to bring them together. (As a participant in wave three, Attali, the founder of the non-profit organization PlaNet Finance, may be prone to overstate their weight.)

If I had to make a guess it would be that the first wave will crest earlier than predicted here, and the second too, powerful as they will be. The third wave may prove even more limited than that. I certainly don't rule out catastrophe (indeed, it still seems quite plausible given that balance of forces), but I suspect the run-up to it is likely to be less dramatic than the portrait he paints, even if the result is just as bad. At the same time, it strikes me as all too likely that our happy ending might end up being not much more than our somehow muddling through, and that if a way out of our mess is to be found, it will almost certainly be along lines quite different from what he imagines.

NOTES
1. As the reader may have noted, the narrative is an essentially Eurocentric one. Attali's explanation is that, roughly at the time of the advent of the mercantile order, Asia and Europe parted ways, the East setting "out to free man from his desires, while the West seeks to make him free to realize them" (24). Such an analysis is problematic: both drives clearly exist in both cultures. Additionally, there is considerable evidence for the dynamism of East and South Asian capitalism down to the end of the eighteenth century--much of it assembled in Andre Gunder Frank's study ReOrient (1998). (Indeed, as Frank notes, Adam Smith repeatedly referenced contemporary China as a model capitalist economy in his classic The Wealth of Nations.)
2. Where those technologies are concerned, a recurring theme is the "industrialization of services," which is to say the creation of goods that replace services earlier performed by people--for instance, frozen meals in place of cooking--in contrast with the prevailing thinking regarding a split between a declining manufacturing economy, and an ascendant service economy. (As with the discussion of the three orders, Attali presented this in earlier form in Millennium.)
3. Where the decline of the U.S. is concerned, Attali predicts a massive financial crisis playing a key role, one which he predicts for the 2025-2030 period. In a footnote included in my addition, however, he suggests that the 2008 financial crisis may be the event (155), though he does not go beyond this to a broader updating of the prediction.
4. Of course, there is ample precedent for his conception in fiction, as with cyberpunk science fiction and its successors from the 1980s on. The title and theme also resemble a tradition originating with H.G. Wells (in novels like The World Set Free and The Shape of Things to Come) in which the excesses of capitalism and nationalism threaten to destroy the world, with salvation emerging in a humane new global order. The late Wells scholar W. Warren Wagar penned an updated version of the story (albeit a more explicitly Marxist one) in the similarly titled A Short History of the Future (first published in 1989, with a new edition coming out in 1993).
5. That Attali was writing in 2003, shortly after the 2001 terrorist attacks, may in fact have made him exaggerate the place of religious conflict in international relations.
6. The prospect of hyperviolence, furthermore, would seem another argument in support of markets preserving states, if only because private actors would be unwilling or unable to foot the security bill.

Freefall: America, Free Markets and the Sinking of the World Economy, by Joseph Stiglitz

New York: W.W. Norton & Co., 2010, pp. 361.

As the title of the book makes clear, Joseph Stiglitz tells the story of the housing bubble's emergence and bursting.

Stiglitz points out now-familiar problems, and in particular runaway securitization in a lack of transparency, an excess of complexity, poor corporate governance, the "too big to fail" syndrome and the rest. He also notes the lax regulation that permitted such things as "questionable" accounting, massive information asymmetries, predatory lending and of course, the conflicts of interest in the inclusion of commercial banking and investment banking in the same firm-in cases a matter of regulation failing to keep up with innovation in the development of financial devices, though in others a matter of the financial community's effective resistance to and reversal of regulations, such as the Gramm-Leach-Bliley Act of 1999 which repealed Glass-Steagall), and the irresponsibility of the Federal Reserve as overseen by Alan Greenspan and Ben Bernanke. (Stiglitz also provides effective and accessible critiques of the intellectual background to the situation, in the orthodox teaching of economics.)

He then moves on to analyze the Federal government's response to the mess. Just as the Clinton administration continued along the economic course set under Reagan-Bush I (as Stiglitz noted in his earlier book, The Roaring Nineties), he finds continuity rather than rupture in the transition from the Bush administration to Obama's tenure-which symbolically saw the return of right-winger Larry Summers to the Treasury, but not more liberal figures like Robert Reich, or this book's author.

In the chapter titled "The Great American Robbery" he details the story of how the bail-outs essentially pumped money into the system with virtually no strings attached, and in the absence of the kinds of meaningful reform that would resulted in a sounder financial system over the long term, while the Federal Reserve massively expanded the money supply. (Showing how different things could have been, Stiglitz discusses alternative approaches to the problem, such as a "trickle-up" bail-out approach which would have helped the banks by helping homeowners meet their obligations. He also offers a wide array of ideas for reorganizing the financial system on a more sustainable basis, not least the restoration of Glass-Steagall "in some form," as well as the establishment of an Electronic Funds Transfer System that would enable everyday financial transactions to occur outside the banks, and a Financial Products Safety Commission to facilitate tighter regulation of activities like mortgage lending and the packaging and selling of derivatives.) Stiglitz also examines the stimulus program and finds it to be too slow in arriving, too small, too short-term and too poorly directed-especially in the parts going into tax cuts, and the others that are (incompletely) filling in the holes in state budgets rather than launching new initiatives-or doing anything meaningful about the mortgage problem.1

Stiglitz is a Keynesian, and the influence of Keynesian theory on his thought is not merely acknowledged but quite apparent. However, a prior knowledge of it is not essential for understanding the book, Stiglitz's concern being practical rather than theoretical, and Stiglitz quite ably explains the relevant concepts in what is overall a lucid and useful account of the story as it recently stood-as well as some real ideas about what might plausibly be done to avoid a repeat.

Still, at the end it struck me that Stiglitz provides rather modest grounds for optimism about corrective action to address the situation-certainly in contrast with Keynes's earlier confidence about the chances that ideas had against the power of vested interests (even as Keynes famously owned up to the influence those vested interests had on the "marketplace of ideas"). Stiglitz assumes the inevitability of change, given the alternatives, in fact comparing the collapse of Lehman Brothers to the fall of the Berlin Wall, what the latter spelled for Communism marking the same for neoliberalism. Nonetheless, it still seems to me that the latter still has rather a long life ahead of it.

NOTES
1. It may seem odd to describe an $800 billion stimulus as "too small." However, divided over two years, it pumped a mere $400 billion into a $14 trillion annual economy-equal to about 3 percent of GDP. The New Deal, even while falling far short of the initial vision, saw a much greater (and more sustained) rise in government spending, the size of the Federal government relative to GDP quadrupling between 1929 and 1940.

The General Theory of Employment, Interest and Money by John Maynard Keynes

John Maynard Keynes's work has been receiving renewed attention these last two years. Much of what has been said about Keynes's work has, of course, been wildly inaccurate, and a reappraisal of Keynes's ideas as he expressed them himself only too timely.

Keynes's key book is, of course, The General Theory of Employment, Interest and Money, which I suspect is yet another of those old, large books routinely mentioned but rarely read--the more in as it has a reputation for difficulty. In the preface Keynes informs the reader that he is chiefly addressing his fellow economists, even if he hopes "that it will be intelligible to others." His intellectual starting point, in his presentation of his argument, and indeed, his thought process, is the neoclassical state-of-the-art as it stood in the 1930s, much of it recognizable to anyone acquainted with marginalism, but many of his references and much of his terminology is comparatively obscure now, especially to non-specialists.

Nonetheless, the difficulty of Keynes's manner of presentation is not a reflection of some great obscurity on the part of the book's ideas, which are actually fairly simple, and it should be noted, presented quite accessibly at a number of points inside the text itself (such as the outline offered in chapter three, and the summary in chapter eighteen).

Essentially, Keynes's argument is that the classical, "Ricardian," supply-side view of economics, is wrong. Consumption is the end of all economic activity, and without consumption--without "effective demand" (a concept Keynes borrows from Thomas Malthus)--there is no incentive to produce. Demand depends on income, but not only income, because of a crucial, previously unconsidered factor--that the "propensity to consume," both that of the community and the individual, declines with increasing wealth, making society vulnerable to shortfalls in this area. The money in the hands of working people is the money most completely and reliably spent on consumption, making effective demand dependent on employment, which in its turn is dependent on investment, while investment is dependent on the incentive to invest (i.e. purchase capital assets out of income). This, in turn, depends "on the relation between the schedule of the marginal efficiency of capital and the complex of rates of interest on loans of various maturities and risks."

In other words, businessmen have to expect that the return on their investment will be higher than the cost of the capital involved for investment to appear worthwhile--and this confidence a fickle thing because of two related aspects of life economics had previously tended to overlook in its fixation on the idea of unfailingly rational, utility-maximizing Economic Man. This is the reality that human beings make decisions in conditions of uncertainty, one result of which is "that a large proportion of our positive activities depend on spontaneous optimism rather than on a mathematical expectation, whether moral or hedonistic or economic." And that, in turn, means that "economic prosperity is excessively dependent on a political and social atmosphere which is congenial to the average business man," and also that "slumps and depressions are exaggerated in degree" as was the case with the Depression during which Keynes was writing.

This image of economic life naturally led to certain prescriptions, perhaps the most famous of which is the pursuit of a low interest rate, so that the marginal efficiency of capital, and with it, employment-creating investment, are attractive. (Indeed, Keynes specifically suggests in chapter twenty-two the path of remedying the trade cycle by lowering the interest rate, ideally "abolishing slumps and keeping us permanently in quasi-boom.") However, as he states in the final chapter (where he offers his most focused treatment of his theory's implications for policy), it also seems to him that merely tinkering with interest rates would be inadequate to attain that goal, and so he called for "a somewhat comprehensive socialisation of investment . . . [as] the only means of securing an approximation to full employment." (Indeed, a drastic redistribution of income is a step governments might take to stimulate consumption as booms go on--again, rather than putting an end to growth.)

Keynes makes very clear in his book that he did not anticipate the abolition of inequality or private initiative, let alone economic individualism (even if he viewed the reduction of inequality as an object that was both desirable and achievable). He also anticipated the socialization he described as coming about slowly, and still leaving the economy relatively decentralized.

Contrary to popular misconceptions, Keynes also recognized the limits of his ideas. There was, as he noted in chapter fifteen, limits to what the monetary authorities could do--cases where governments could do little to increase or decrease liquidity. Similarly, there is virtually no discussion of deficit spending in this book. (Indeed, this only gets one mention in chapter eight, where it is discussed as a situation in which governments might find themselves while providing unemployment relief in hard times, not as some cornerstone of his theory.) Given the emphasis on putting money into the hands of those who have least and therefore can be counted on to spend what they can get, it is also quite clear that upper-class income tax cuts are a dubious form of economic "stimulus" from the standpoint of his theory.

Why all the confusion, then? Given how often ideas like these are received secondhand, a measure of distortion was inevitable, especially given the hostility they have attracted in some quarters. This would seem to have been exacerbated by the broader inattention to macroeconomics common in the field, the fact that the "synthesis" of Keynes's thought with the neoclassical thinking he set up his theory against became so pervasive, and the subsequent evolution of Keynesianism into successor schools (some quite far removed from the initial theories). When all that is taken into account, the errors seem tiresomely predictable rather than surprising.

"How Long Till Human-Level AI?"

H+ magazine recently carried an article regarding a small-scale survey of experts (twenty-one of the attendants at the 2009 Artificial General Intelligence conference) on the question of when general artificial intelligence will arrive, and specifically when it will attain four milestones-Turing-level intelligence, the intelligence of a third-grader, the intelligence needed to do Nobel Prize-quality work, and finally the key Singularitarian outcome of superhuman intelligence. Interestingly, fifteen of the twenty-one-seventy percent-of them predict a computer will pass the Turing test by the 2040s. A significant percentage answered "never," however, particularly in regard to the question of when a computer would achieve superhuman intelligence-nine of the twenty-one answering in this way, the greatest unanimity the survey finds on any point. However, that still leaves the doubters of that particular outcome in the minority, eleven of the twenty-one predicting this actually happening by the 2040s. (Incidentally, the second most popular guess was that computers would be doing Nobel-quality science by the 2020s, with a full third of the respondents giving that answer.) Of course, this is a limited examination of the views of a small, pre-selected group (these all being AI specialists rather than a more general sampling of computer scientists), and this is a particularly tricky kind of prognostication, so that my guess would be a likelihood on their part to err on the side of overoptimism rather than the reverse. Nonetheless, that such a view is common is well worth noting, and the discussion (as well as the magazine more generally) well worth a look from those interested in the issue.