Quotulatiousness

November 28, 2011

Charles Stross on worldbuilding for SF stories

Filed under: Books, Economics, History, Media, Science, Technology — Tags: , , , — Nicholas @ 09:46

This is the sort of thing that more science fiction authors should take into account before they write, but not enough seem to do:

So here are some rules of thumb I use, tending towards an increasingly narrow focus. (Sorry if you were expecting me to address the broader uses of confabulation as a fictional tool; this is very much a set of practical guidelines rather than an examination of the theory behind the activity.)

1. Humans are interested in reading fiction about humans.

Constraint #1 on any work of fiction is that it needs to provide an environment in which recognizable human protagonists can exist. If they’re not human (e.g. “Diaspora”, by Greg Egan; “Saturn’s Children”, by me) you need to provide some sort of continuity with the human and give the reader reasons to feel concerned for them. Or you can go for the “they’re not human, don’t look human, and they have no connection with us”, but what you get is either borderline-unreadable at best, or suffers from human-mind-in-a-giant-land-snail-body syndrome (which risks demolishing the reader’s willing suspension of disbelief).

So I’m going to focus on providing a human environment …

2. In general, High Fantasy steals its dress from pre-modern history; Urban Fantasy buys off-the-shelf in TK-Maxx: and Science Fiction goes for that bold futurist look.

Which is to say, if you’re going to write a trilogy with a young soldier on the rise and a throne and an evil emperor, you can do a lot worse than plunder the decline and fall of the Roman Empire for your social background. Note, however, that you’ll do a lot better if you read some social history texts rather than believing what you see in the movies.

That last bit is especially good advice, as the more you know about cultures other than the one you were raised in, the better you can understand why things are different. Ancient Babylonians were not just Englishmen with funny clothes. Classic Greece, for all that it provided a lot of the underpinnings of our western culture, was functionally very different from life as we know it now.

The real reason the German bond auction failed

Filed under: Economics, Europe, Germany, Italy — Tags: , , — Nicholas @ 08:58

Tyler Cowen explains:

If Germany and a few other, smaller AAA countries were to guarantee or monetize the debts of Italy, Spain, and possibly France and Belgium, never mind Greece and Portugal, Germany would not be AAA itself. The German median voter has very little interest in guaranteeing the above-mentioned debts. If German yields are flipping upwards, it is, in my view, because investors now see the whole euro deal as unraveling and don’t want to deal with the complexities and flak. A big chunk of the German auction didn’t sell at all. You don’t have to think that Germany is ripe to default to see that markets are warning Germany not to take on the whole burden.

The only remaining question, if Germany isn’t willing to take on the entire burden of European debt, is when will the whole edifice come crashing down and who’ll manage not to be crushed by falling debris.

Megan McArdle reviews some recent scolding books on thrift

Filed under: Economics, Media — Tags: , , , , , — Nicholas @ 08:39

Megan McArdle admits right up front that she recently splurged on a very spendy kitchen appliance, so you know she does not number herself among the community of scolds on the topic of thrift:

For decades, Americans have wallowed in credit, shunned savings and delighted in debt. In 1982, the personal savings rate was 10.9% of disposable income, by 2005 it had fallen to just 1.5%. It has since rebounded, but remains a measly 5%.

All this profligacy supports a rather vibrant cottage industry in polemics against consumerism. Authors as varied as the economist Robert H. Frank (1999’s “Luxury Fever”) and the political theorist Benjamin R. Barber (2007’s “Consumed”) have ganged up on what they see as the particularly unequal and excessive American spending habits. Unsurprisingly considering their abhorrence of waste, they are avid recyclers; the same arguments, behavioral economics studies and anecdotes appear time and time again. Access to credit makes consumers overspend. Materialistic people are anxious and unhappy. The conspicuous-consumption arms race is unwinnable. Down with status competition! Down with long work weeks, grueling commutes and McMansions! Up with family time, reading and walkable neighborhoods! The effect is rather like strolling down the main tourist strip in a beach town: Each merchant rushes out of his shop, gesticulating wildly and showing you exactly the same thing that you saw at all the previous stores.

The latest person to open up shop on this boardwalk is Baylor marketing professor James A. Roberts. “Shiny Objects: Why We Spend Money We Don’t Have in Search of Happiness We Can’t Buy” runs mostly true to form, its main innovation being to add financial self-help advice to the usual lectures. The book includes not only exhortations but actual instructions—how to make a budget, get out of debt and save for retirement.

It’s a thorough survey of both academic research on consumerism and basic finance advice. Still, I first ran into an argument I hadn’t seen before somewhere around page 200 — that the perfect surfaces of modern products hasten the replacement cycle because they show wear so badly — and well before then Mr. Roberts had fallen into some of the terrible habits of the genre. Though less openly contemptuous of the spendthrift masses than many of his fellow scolds, he still exudes that particular sanctimonious anti-materialism so often found among modestly remunerated professors and journalists.

Here are some of the things that upset him and that “document our preoccupation with status consumption”: Lucky Jeans, bling, Hummers, iPhones, 52-inch plasma televisions, purebred lapdogs, McMansions, expensive rims for your tires, couture, Gulfstream jets and Abercrombie & Fitch. This is a fairly accurate list of the aspirational consumption patterns of a class of folks that my Upper West Side neighbors used to refer to as “these people,” usually while discussing their voting habits or taste in talk radio. As with most such books, considerably less space is devoted to the extravagant excesses of European travel, arts-enrichment programs or collecting first editions.

November 26, 2011

Daniel Hannan on how the “Occupy” movement misunderstands the right

Filed under: Britain, Economics, Liberty, Media, Politics — Tags: , , , , , — Nicholas @ 09:57

In his latest column in the Telegraph, Daniel Hannan lists ten mistaken beliefs that the “Occupy” folks seem to have about conservatives:

1. Free-marketeers resent the bank bailouts. This might seem obvious: we are, after all, opposed to state subsidies and nationalisations. Yet it often surprises commentators, who mistake our support for open competition and free trade for a belief in plutocracy. There is a world of difference between being pro-market and being pro-business. Sometimes, the two positions happen to coincide; often they don’t.

2. What has happened since 2008 is not capitalism. In a capitalist system, bad banks would have been allowed to fail, their profitable operations bought by more efficient competitors. Shareholders, bondholders and some depositors would have lost money, but taxpayers would not have contributed a penny.

[. . .]

6. Nor, by the way, does state intervention seem to be an effective way to promote equality. On the most elemental indicators — height, calorie intake, infant mortality, literacy, longevity — Britain has been becoming a steadily more equal society since the calamity of 1066. It’s true that, around half a century ago, this approximation halted and, on some measures, went into reverse. There are competing theories as to why, but one thing is undeniable: the recent widening of the wealth gap has taken place at a time when the state controls a far greater share of national wealth than ever before.

7. Let’s tackle the idea that being on the Left means being on the side of ordinary people, while being on the Right means defending privileged elites. It’s hard to think of a single tax, or a single regulation, that doesn’t end up privileging some vested interest at the expense of the general population. The reason governments keep growing is because of what economists call ‘dispersed costs and concentrated gains’: people are generally more aware the benefits they receive than of the taxes they pay.

November 24, 2011

US to be crushed by Oriental economic juggernaut, film at 11

Filed under: China, Economics, Japan, Media — Tags: , , , — Nicholas @ 09:27

Do any of these statements sound familiar?

  • “I don’t mean to be an alarmist, but I get the uneasy feeling that America is history”
  • “The power behind the [. . .] juggernaut is much greater than most Americans suspect, and the juggernaut cannot stop of its own volition, for [it] has created a kind of automatic wealth machine, perhaps the first since King Midas.”

This kind of statement can be found in all the prestigious newspapers, opinion journals, and magazines . . . in the late 1970s through the late 1980s. The economic juggernaut of the day was Japan. It was poised to crush the feeble remnants of American capitalism with the all-powerful keiretsu, Japan’s corporate conglomerate organizations. The strong would smash the weak, leaving America (and the rest of the Anglosphere) in the dust. Just in case you didn’t follow economic history, it didn’t happen.

Today, the economic bogeyman is China:

“We are getting our clock cleaned by Chinese state capitalism,” wrote Robert Kuttner, now editor of The American Prospect, earlier this year at The Huffington Post. Massachusetts Institute of Technology economist Simon Johnson piled on at the annual conference of the American Economic Association, declaring, “The age of American predominance is over. The [Chinese] Yuan will be the world’s reserve currency within two decades.” The conservative Citizens Against Government Waste even aired a television commercial featuring a Beijing economics class in 2030 in which a professor explains how America became indebted to China. The professor concludes, “So now they work for us.” The class chuckles knowingly.

This gloomy message of American decline relative to China appears to be seeping into popular consciousness. An April 2011 poll by Xavier University found that “a stunning 63 percent believe that the Chinese economy is more powerful than the US economy.”

“The U.S. could lose its status as the world’s biggest economic power within five years,” reported The Daily Mail in April. The Mail article was based on calculations released by the International Monetary Fund projecting that total Chinese GDP, adjusted for purchasing power, will surpass U.S. GDP by 2016.

Can that be? Let’s do the math: China’s total GDP is around $6 trillion today. Assuming 10 percent GDP growth for the next 20 years, China’s GDP would rise to $40 trillion. If the U.S. economy grew at, say, 3 percent a year, total GDP would be $27 trillion. Back in 2007, before the financial crisis, the investment bank Goldman Sachs issued a report projecting that Chinese GDP would be $26 trillion in 2030, compared to $23 trillion for the U.S. It bears noting that current Chinese purchasing power per capita is about $6,000, compared to $46,000 for Americans.

That’s not to say that it’s impossible — the longer the US government struggles to avoid cutting back, the more likely it is that the US will enter a long economic decline — but China has economic problems a-plenty.

Nigel Farage on “German-dominated Europe”

Filed under: Bureaucracy, Economics, Europe, Germany, Greece, Italy — Tags: , , — Nicholas @ 08:59

November 23, 2011

The political delusion: “We must re-establish the primacy of politics over the market”

Filed under: Economics, Europe, Germany — Tags: — Nicholas @ 10:06

That’s Angela Merkel, expressing the thought that many politicians have, but rarely speak out loud. There’s a lot of wishful thinking wrapped up in that statement:

“We must re-establish the primacy of politics over the market.” That sentence, spoken a little while ago by Germany’s Angela Merkel, sums up the startlingly unoriginal character of the approach adopted by most EU politicians as they seek to save the common currency from what even Paul Krugman seems to concede is its current trajectory towards immolation.

As every good European career politician (is there any other type?) knows, the euro project was never primarily about good economics, let alone a devious “neoliberal” conspiracy to let loose the dreaded market to wreck havoc upon unsuspecting Europeans. The euro was always essentially about the use of an economic tool to realize a political grand design: European unification. Major backers of the common currency back in the 1990s, such as Jacques Delors and Helmut Kohl, never hid the fact that this was their ultimate ambition. Nor did they trouble to hide their disdain of those who thought the whole enterprise would end in tears.

From the common currency project’s beginning, economic considerations were continually subordinated to the goal of using the euro to cement political bonds. That’s why most countries were allowed to enter the euro despite not having met some basic entry criteria. It also explains why no one really seemed to care too much when Greece admitted in 2004 that it had fudged, distorted, and lied its way into the euro club. Now, however, Europe is discovering what happens when political games diminish a currency’s ability to reflect economic facts on the ground.

H/T to “Monty” at Ace of Spades HQ, who commented:

This in a nutshell is everything that is wrong with the sovereign governments of both Europe and the United States (and China, and Russia, and…well, you get my point). The “market” is not a thing to be managed, or a process to be controlled. The market is just an aspect of the natural world, working on the creatures who move through it. Merkel’s comment reflects the combination of arrogance and ignorance that is at the root of so many of our economic problems.

QotD: How the sequester is a symptom of political cowardice

Filed under: Economics, Government, Politics, Quotations, USA — Tags: , , , — Nicholas @ 09:40

Those who can do. Those who can’t form a supercommittee. Those who can’t produce a majority vote in a supercommittee sequester. Those who can’t even sequester are telling the world something profound about American inertia.

As Veronique points out [. . .], the “automatic” sequestration cuts would over the course of ten years reduce US public debt by only $153 billion. Which boils down to about a month’s worth of the current federal deficit.

Yet even slashing a pimple’s worth of borrowing out of the great oozing mountain of pustules will prove too much for Washington.

Mark Steyn, “Happy Sweet Sequester’d Days”, National Review Online, 2011-11-21

Tim Harford on credit rating agencies

Filed under: Economics, Government — Tags: — Nicholas @ 08:52

I think it’s safe to say that he’s not over-impressed with the organizations involved in doing credit risk assessments:

What are rating agencies again?

They are private companies that express opinions about the likelihood that, for example, Italy will pay the money it owes bondholders. Sometimes they express opinions about how much money people will get back if Italy defaults on its loans. One way or another they’re providing opinions about the risks that creditors face.

That’s it? Just a bunch of opinions?

Basically, yes. And there are plenty of other opinions out there from journalists and particularly from people who put cash on the line and buy and sell these bonds. But the rating agency opinions have real-world significance in a way that a bloke in the pub doesn’t. Many investment funds promise their investors that they will only hold assets with ratings above a certain level. If a rating is downgraded, those funds have to sell, even if they think the asset is a bargain. Ratings are also hard-wired into regulatory rules, with similar effect. And another thing: unlike most opinions, they’re quantified.

Quantified on a scale of 1-10?

No, quantified on a scale of D through CC+ and BBB- all the way to AAA. Or alternatively, au choix, from C through Caa2 and Ba1 to Aaa. Depending on which agency you’re looking at.

Why?

For ABSOLUTELY NO GOOD REASON.

November 22, 2011

The biggest threat to the environmental movement

Filed under: Economics, Science, Technology — Tags: , , — Nicholas @ 09:50

No, it’s not some ferociously polluting corporation, or a dangerously powerful conservative politician or a candidate for the GOP nomination in the United States. It’s algae:

“We can engineer, humbly, like we have been domesticating plants for a long time,” one scientist told me. “We engineer the algae to do biochemically something quite different to what they’d be doing in the wild: they still take photons from the sun, and via biology, turn it into a useful captured molecule. We have them doing something similar but with stunning efficiency: it’s 40 to 100 times more efficient,” says Elbert Branscomb, chief scientist to the US Department of Energy.

There are (at least) around 60 startups hoping to produce oil and diesel biologically, with accelerated fermentation or photosynthesis techniques to produce an end product that is 100 per cent compatible with the existing infrastructure. Some, for example, tweak the algae to make them do photosynthesis anything from 40 to 100 times more efficiently. LS9 received $30m in funding and has a one-step process to convert sugar to create renewable petrol. It expects production within five years. If oil prices remain high, say over $40 or $50 a barrel, then it’s viable.

So why is this the biggest threat to the environmental movement?

But the greatest challenge cheap hydrocarbons poses is for people whose outlook is founded on what I call “End Times logic”. The most successful political movement in recent years is environmentalism, which expanded from specific concerns about pollution and conservation into an all-encompassing worldview, complete with very preachy appeals to changing parts of our lifestyles.

These ranged from “Don’t flush the loo too often”, to “Don’t fly for a weekend break”, to “Eat less red meat”. Very few politicians have felt courageous enough to contradict this. And the movement has achieved its ascendancy through urgent, apocalyptic appeals, rather than using calmer methods of rational persuasion which involve costs and benefits to be totted up. These new energy sources pose a profound problem: they saves the planet, and we carry on with minimum disruption.

I expect that one effect will be that environmentalism will become much more about everyday concerns such as pollution, and conservations again, back to where it started. But it grew into a vacuum, after the end of the Cold War, when great political ideas seemed to lose credibility. As a way of driving the political agenda, it will become currency without value. Buzzwords such as “sustainability”, founded on a resource-constrained view, will no longer be credible. People will simply laugh at them.

Another case where “spending cuts” still mean increased spending

Filed under: Britain, Economics, Government — Tags: , , , — Nicholas @ 09:40

No, not the US government, even though the media will be talking up the “savage” spending cuts coming because of sequestration (which will only reduce the rate of increase, not actually reduce spending). In this case it’s Britain:

Why is Britain growing more slowly than other developed nations? Why have we been outperformed over the past 12 months by every EU state except Greece, Ireland, Portugal and Romania?

Let’s start by dismissing the Labour-Guardian-BBC explanation: the idea that the economy is shrinking because of ‘the cuts’. As this blog never tires of pointing out, net government expenditure is higher now than it was under Gordon Brown. We are set to borrow at least £122 billion this year. Spending is above 50 per cent of GDP. How much more ‘stimulus’ do critics want?

What the international league tables show is that the countries which decreed the biggest bailouts experienced the sharpest contractions. Far from ‘stimulating’ the economy, these various programmes have taken money out of the productive sector. If stimulus spending worked, the Soviet Union would have won the Cold War.

Acronym watch: “In the euro zone farmyard, it’s time to forget about the PIGS and start counting the broken EEGs”

Filed under: Economics, Europe, Germany, Humour — Tags: , , — Nicholas @ 09:36

The journalists will appreciate this new acronym:

The euro zone needs a new acronym. For the past three years, PIGS has served as a catchall for the cash-strapped states on the single currency’s periphery. But now that the crisis has moved to the core, a change is overdue.

PIGS has proved surprisingly durable. When it was first coined, citizens of Portugal, Ireland, Greece and Spain were understandably upset at being lumped together in such a derogatory way. Yet as Ireland and Portugal followed Greece in seeking bailouts, their similarities outweighed historical differences.

Some felt the acronym was self-fulfilling, giving attention-deprived speculators a handy shortlist from which to select their next sovereign victim. However, its survival was also an accident. When Italy got into trouble earlier this year, it slotted smoothly into the slot previously reserved for bailed-out Ireland. Politically sensitive bodies avoided the zoomorphic insult by reshuffling the letters to create the GIPS.

[. . .]

A better idea might be to start with the one remaining euro zone member that isn’t under attack from the bond markets. Andrew Balls, head of European portfolio management at PIMCO, now describes the euro zone states being shunned by investors as EEGs: Everyone Except Germany.

November 21, 2011

Michael Geist on the CRTC’s usage-based billing decision

Filed under: Cancon, Economics, Technology — Tags: , , , — Nicholas @ 12:56

It’s not quite what it seems like:

My weekly technology law column [. . .] notes the resulting decision seemed to cause considerable confusion as some headlines trumpeted a “Canadian compromise,” while others insisted that the CRTC had renewed support for UBB. Those headlines were wrong. The decision does not support UBB at the wholesale level (the retail market is another story) and the CRTC did not strike a compromise. Rather, it sided with the independent Internet providers by developing the framework the independents had long claimed was absent — one based on the freedom to compete.

For many years, Canada has maintained policies theoretically designed to foster an independent ISP market. Those policies required the large Internet providers such as Bell and Rogers to make part of their network available to independent competitors. Since the large providers were not supportive of increased competition, the CRTC established mandatory rules on access, pricing, and speed matching.

Yet despite years of tinkering with the rules, the independents only garnered a tiny percentage of the marketplace (approximately six percent). The UBB issue illustrates why the independent providers have struggled since the original proposal would have allowed Bell to charge independent ISPs based on the amount of data used.

While that sounds reasonable, the cost of running a network has little to do with the amount of data consumed. Rather, it is linked to the capacity of the network — the fatter the pipe, the greater the cost, irrespective of how much data is actually consumed.

November 20, 2011

If you’re not paying for the service, you are the product

Filed under: Economics, Media, Technology — Tags: , , , , , — Nicholas @ 10:07

John Naughton points out that TANSTAAFL still applies, even to “free” services on the internet like Facebook and Twitter:

Physics has Newton’s first law (“Every body persists in its state of being at rest or of moving uniformly straight forward, except insofar as it is compelled to change its state by force impressed”). The equivalent for internet services is simpler, though just as general in its applicability: it says that there is no such thing as a free lunch.

The strange thing is that most users of Google, Facebook, Twitter and other “free” services seem to be only dimly aware of this law. Facebook, for example, handles the pages of 750 million users, enables more than half of that number to visit and update their pages every day and hosts more than 70 billion photographs. The cost of the computing and communications resources — in terms of server farms, energy, bandwidth and technical expertise — required to make this happen doesn’t bear thinking about. And my guess is that most Facebookers don’t think about it.

But it costs money — millions of dollars a month, every month. The monthly amount is called the “burn rate”. It comes from investors who make their cash available for burning in the hope that it will eventually pay off in terms of a stock market flotation or the evolution of a profitable business whose shares will be worth holding. In the internet era, the favoured strategy has been to “get big fast” (the title of a famous book about Amazon — that is, add users/subscribers at an exponential rate, and then find a way of monetising the resulting hordes.

November 19, 2011

Three reasons not to bail out student loan borrowers

Filed under: Economics, Education, Government, USA — Tags: , , — Nicholas @ 11:16

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