Sunday, January 26, 2014

To The Point

It's easy to admire someone for what he says, but here's someone I admire for what he doesn't say:

ht: Big Think

Another reminder of the power of the via negativa for avoiding charlatans.

Friday, January 24, 2014

Coining It

A random spectator at a televised sports event held up a placard with a QR code and the text “Send me Bitcoin!” He received $25,000 in Bitcoin in the first 24 hours, all from people he had never met. This was the first time in history that you could see someone holding up a sign, in person or on TV or in a photo, and then send them money with two clicks on your smartphone: take the photo of the QR code on the sign, and click to send the money. Marc Andreessen 
I still haven't figured Bitcoin out: one moment I think it's revolutionary, another I think it's a scam. It could be both, of course. But when you have guys like Marc Andreessen speculating that something big might be happening (beyond the hype and puffery that goes with any new innovation), then maybe I need to take it seriously. Especially when we should be using the Euro's 'phoney war' moment to launch a complementary currency or two here in Ireland.

One possibility is that we might not need to worry about bailing out the banks in future, because we won't need them. David Z. Morris reckons Bitcoin could be Napster for finance:
The functions that advocates say could be automated through the Bitcoin network seem nearly endless, including peer-to-peer investment funds, Kickstarter-like crowdfunding, binding arbitrations, and even non-financial transactions such as naming rights management and encrypted communication. And all could be executed without a cut for intermediaries. Bitcoin partisans, from developers down to rank-and-file users, often seem to revel in the idea that they are threatening the control and profits of Wall Street institutions, who they see as rent-seeking fat cats. If it were limited to the loss of fees on payments and transfers, bitcoin's threat to existing financial institutions would still be substantial. But with a full array of commission-free financial services on the horizon, there is even more reason to take heed.
There's something rather appealing about that.

But the possibility that most intrigues me is the potential for the new peer-to-peer currencies to accelerate our progress towards the Intention Economy. Right now, Google, Facebook et al get all my data and yours for 'free' via the information they capture about our digital activities. Remember, if something is free on the Internet then you're the product. But Bitcoin and similar innovations could create a new social contract whereby we receive micro-payments in return for sharing our data. In fact, every time you send an email you would have to make a tiny micro-payment. Heralding the death of spam...

Also a rather appealing prospect.

Who knows, it might even solve the problem of worsening income inequality in developed economies: if our digital and financial overlords have to share the wealth in return for transacting with us, the end of capitalism might yet be deferred. Again.

Sunday, January 19, 2014

Generation Walt

We need to talk about the parents. The CRC revelations tell us something about the current generation of leaders in Irish society. And it isn't complimentary. A great many organisations in this country appear to be run by people with the moral compass of a Walter White. In the end it isn't their incompetence that is most shocking, it is there utter venality.

Ireland isn't alone in this regard, of course. Here's John Ralston Saul talking about the global trends he's observing:
There’s an inchoate anger driving people around the world and these are the first signs of people starting to believe there’s another way. ...the false morality attached to utilitarianism, which is what’s driven us for 40 years, in fact led to deep immorality—it led to a rise in corruption. This is a very dishonest period in which the dishonesty has been sanitized and not surprisingly you see an enormous rise in corruption in the financial markets and in politics. But corruption is only an expression of the more fundamental problem, which is that there has to be an idea for how society works...
Check out his interview over at EconTalk.

We are coming to the end of an extraordinary economic era. What Graham Barnes calls The Financialised Economy (FE) has completely usurped the Real Economy (RE), and making money out of money is what drives the casino we all now live in. But even Walter White eventually found he had gained a great deal of money at the cost of, well, everything else. There are diminishing returns to greed it appears, and to a great many other things, as we are witnessing today.

But Walter did keep going for a long time. So what comes next? Reflecting on the moral lessons of Breaking Bad, James Bowman points to the only other alternative to Western Civilisation:
Students of history or anthropology are more likely to see the alternative to Western civilization and the rule of law not as the twilight struggle of individual savagery but as the tribal, family-oriented society and the honor culture that actually did precede the Enlightenment’s commitment to universal values and that is still predominant in most parts of the world where those liberal and progressive standards have a more precarious hold.
Maybe that's what we're really witnessing in Ireland. A tribalism of insiders vs outsiders, the former still in control and shamelessly looking after their own, the latter increasingly angry as they realise the extent to which they have been duped and defrauded. Even inchoate anger eventually gives way to something else...

Friday, January 17, 2014

Irony Lost

Every war is ironic because every war is worse than expected. Every war constitutes an irony of situation because its means are so dramatically disproportionate to its presumed ends. … But the Great War was more ironic than any before or since. It was a hideous embarrassment to the prevailing Meliorist myth which had dominated public consciousness for a century. It reversed the Idea of Progress. Paul Fussell
ht The Enlightened Economist

We have a different view of the First World War in Ireland. As the newly released military archives remind us, thousands of Irish men fought in the Great War and then in a 'greater' war for Ireland's independence. So the irony of war was lost on the Irish because the 'Meliorist myth' became a reality. Sort of.

Wednesday, January 15, 2014

Virtue's Future

Deirdre McCloskey is worried that we have lost our virtues. In a marvelous essay published just before Christmas, she explores an economic map of virtue including the Four Cardinal Virtues (in case you forget: Justice, Courage, Temperance & Prudence) as well as the Three Theological Virtues (in case you need reminding: Faith, Hope & Love). She uses two dimensions to create her map - the Ethical Object and the Ethical Subject, thus:

But post Hobbes and Machiavelli there emerged what she describes as the 'strange belief that a serious political philosopher had no need to be serious about ethics'. The result nowadays is that we no longer have a theory of virtue in the West, instead we have 'a new habit of making up virtues on the spot out of social theories or social graces.' Hence our contemporary championing of tolerance, equality and autonomy as the highest virtues, despite increasing evidence of their self-contradiction. Something the old virtues managed mostly to avoid.

Probably the biggest contradiction in our contemporary 'made up' assortment is that it tends to deplete moral capital rather than enhances it (diverse communities have low levels of trust and so on). As Brian Brown has noted about the Church of England's ongoing demise, social capital (including religious communities) relies on moral capital for its replenishment. He uses Jonathan Haidt's definition of moral capital:
"the degree to which a community possesses interlocking sets of values, virtues, norms, practices, identities, institutions, and technologies that mesh well with evolved psychological mechanisms and thereby enable the community to suppress or regulate selfishness and make cooperation possible."
If moral capital is depleted because 'nobody wants to be a member of a club that's so inclusive that membership means nothing' then social capital and economic capital won't be far behind.

But all is not lost. Observing the West's coming demographic winter, Regis Martin points to the obvious:
And to whom, finally, does the future belong?  It belongs to those who show up, which is to say, to the fertile. 
Who has the most babies? Why the 'virtuous' of course. Back to Jonathan Haidt again: he identifies six moral 'clusters' (care, fairness, freedom, loyalty, authority and sanctity), the first three of which circumscribe the values of the Left, while the Right values all six. Loyalty, authority and sanctity are more 'family/baby-friendly' it seems than care, fairness and freedom alone.

By the way, if you're wondering where on the 'morality spectrum' you might be yourself, Haidt has a handy, 12-question survey that tells you. Apparently if you use Chrome as your browser then you're a liberal...

The arc of time will inevitably see us return to the old theory of virtue. We will once again find ourselves on McCloskey's map. It was good enough for most of the past 2,500 years, and it'll be good enough for the next 2,500 years.

Monday, January 13, 2014

Too Much Haassle

Maybe we need to look to the Middle East to understand what's going on up North, now that Richard Haass has gone home. David Goldman has a Spenglerian view of identity-driven conflicts:
The idea that everyone's problems can be solved by rational means is the dominant ideology of liberalism... My argument is that you cannot solve the problems of most people because most people don't want their problems solved. They'll cling to their prejudices, their ethnicity, their ideology, and eventually disappear. And the norm for peoples is to disappear. And most peoples disappear because they lose the will to live. That is typical of history. To survive is atypical. In my book I attempted to call attention to the facts that most peoples die because they lose the will to live; not because Emanuel Kant or some other genius did not come up with a solution to their problems. But this is antithetical to liberalism.
As Sinéad O'Shea put it:
It is hard for unionists not to conceive of this as a loss in a zero sum game, especially for the working class Protestants centred in areas such as east Belfast. They are also keenly aware of the demographic change eroding their majority. They feel as if they are in decline. In many ways they are. 
It is impossible to underestimate the psychological effect of lost power, the sense of lost prestige. It has made the tradition of conducting militaristic marches through Catholic areas and the right to fly the Union Jack on a daily basis all the more integral to the unionist sense of self.
Unionism for too long was defined by what it was not (not Irish, not Catholic, not Republican), and they've probably left it too late to forge a more positive identity - one that'll keep the flag protesters on board anyway.

Still, it could be worse. At least we don't have Goldman's worries about a hostile near-neighbour getting hold of the bomb...

Sunday, January 12, 2014

Foreshadowed by Debt

Nicholas Craft's presentation last week to the conference on Future Directions for the Irish Economy reminds us of some of the positive things shaping Ireland's future. Ireland has 'spare capacity' for growth, and with a fair wind (no eurozone implosion and improving trade prospects) we might enjoy a higher rate of growth than the rest of Europe over the rest of the decade.

Oddly missing from his analysis - and most of the other presentations that I've read - was any reference to the role of debt in Ireland's future. The Economist talks about Ireland (and the PIIGS) being caught in a debtors' prison. With Irish households and businesses and its banks and the government all trying to de-leverage at once from recording breaking high levels of debt, it's hard to see what's going to resource the use of any spare capacity.

My sense of how Irish households view is the future is that they welcome any good news about our macro-economic performance as a sign that things 'ain't getting worse', but see little real change in their personal circumstances and prospects for the foreseeable future. Their future - and the entire country's at that - is foreshadowed by huge levels of debt that are unsustainable barring a prolonged period of inflation. Without the inevitable interest rate hikes.

This means that a lot of spare capacity will go unused for some time to come. It also means that any increases in consumer spending will be modest as savings rates remain high (to pay down debts), and as after tax incomes remain under pressure due to the government's own debt commitments.

We're not alone, of course. Here's John Michael Greer on what the future will hold for American citizens:
... imagine that this is your future: that you, personally, will have to meet ever-increasing costs with an income that has less purchasing power each year; that you will spend each year you still have left as an employee hoping that it won’t be your job’s turn to go away forever, until that finally happens; that you will have to figure out how to cope as health care and dozens of other basic goods and services stop being available at a price you can afford, or at any price at all; that you will spend the rest of your life in the conditions I’ve just sketched out, and know as you die that the challenges waiting for your grandchildren will be quite a bit worse than the ones you faced.
Not so much 'muddle through' as 'muddle down'. Still, no apocalypse either. And that's the point. The future doesn't owe us a living - or a better quality of life. We have to make the decisions now - as well as the sacrifices - that will avoid a 'muddle down'. But if the government starts believing its own spin (and worse, Brussels and Frankfurt become believers too), then we'll remain stuck in debtors' prison, looking out at the future that might have been.

Wednesday, January 8, 2014

Not Your Father's Third World

This I didn't know, via New Scientist:
In the last three decades, the number of adults estimated to be obese in the developing world has almost quadrupled to 904 million, overtaking the number in rich countries.

Monday, January 6, 2014

Swans & Doves

Same Old, Same Old

The safest forecast to make about the near future is that it will be pretty much the same as the recent past. So for 2014 we can reasonably expect:
  • The eurozone economy to limp along, with some indicators pointing to things getting better and others to things getting worse.
  • Ireland's economy will continue to do the 'recovery tease', one week indicators will show clear signs of improvement, the next will demonstrate how far we still have to go.
  • Politicians (across Europe, including Ireland) will fret loudly about unemployment, banks and growth, but any hard decisions that can be postponed will be postponed.
 Still, if something can't go on for ever - as Herb Stein observed - it won't. Maybe twelve months is too narrow a frame for speculating about the things that will matter, but let's speculate a little anyway. Surprises, by definition, are just that. Nicolas Taleb coined the term 'black swan' to describe low probability, high impact (mostly negative) surprise events that can make the recent past a very poor guide to the near future, never mind the longer term.

There's no point in me speculating about black swans - by definition they're outside the frame of speculation anyway - but let me talk about a few 'grey swans'; events that some people are already speculating about which could make 2014 anything but a re-run of 2013. And I'll add a few 'grey doves' as well; some potential changes that could point us in a more positive direction.

Grey Swans

The most obvious grey swan is the stock market (and no, I don't mean our own, sad little ISEQ). There are quite a number of indicators pointing to a bearish turn for the US stock market in 2014 - John Hampson lists just a few:

With global growth still anemic, we shouldn't be surprised if the strong recovery baked in to the bullish prices seen in many equity markets during 2013 turns out to be a tad optimistic. The resultant 'reset' could be very painful for all concerned.

China is the other (maybe even bigger) grey swan for 2014, both economically and politically. The economic uncertainty relates to its need to deflate several very large bubbles - if they burst instead then we'll all feel the shock wave. However, it isn't the economic consequences that should concern us but the military ones. Right now, China's 'selectorate' (to use Bruce Bueno de Mesquita's term) are motivated to keep the game going. But a post-bubble China might want to focus their surplus males on a new game - with the Senkaku islands row a mere foretaste.

Staying in Asia, let's not forget Fukushima - and let's hope that fourth reactor stays intact...

Grey Doves

But what about Ireland in 2014? Here I think we can look forward to a number of interesting, positive developments that will take our country in a new and better direction. Though you won't read about them in any of the mainstream media's pontifications about the year ahead. In no particular order, we can anticipate:

Peak Atheism - just as 1914 witnessed Peak Theism; one hundred years later the cycle is turning again. Maybe it's the 'Francis effect', or simply the consequence of ageing populations ('nearer my God to thee', and all that) - but the public conversation about spirituality is growing. In our post-modern age it would seem that one man's belief in the virgin birth is as valid as another's belief in the multiverse. Though don't tell President Higgins...

New Nationalism - the European elections in May will give Europeans an opportunity to tell the Eurocrats in charge of the Great Stagnation what they think. Euro-scepticism is in the ascendant, and even in Ireland we're beginning to realise that a European project which puts the interests of creditors first and debtors last is not one conducive to Ireland's best interests in the long run. Nationalism has been a dirty word for a long time (the Nazis were 'national socialists' after all), but the 1914 centenary (and 1916/2016 of course) will cause many to rethink terms like patriotism, nationality and identity in ways that will move us beyond our supine deference to Brussels and Frankfurt.

Men Matter - 2014 will be the year that the tired only feminist tropes about 'obsolete men' are finally put to rest. In fact it began last year elsewhere, but this year Irish men will have had enough of being second class citizens and one of the most disadvantaged minorities in their own country. One recent indicator - the 790 (and counting) comments on Una Mulally's predictable article on Feminism 4.0 in the Irish Times. Irish men have had enough of being lectured to, thank you.

That's it for now - may you see more doves than swans dear reader in the year ahead.

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