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Mitch SMith


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What are our true global economics?

I recently saw an estimate that human population is currently consuming 1.5 times the carrying capacity of the Earth.

This suggests that the resources we use - the plants and animals and energy required to keep us alive are generated by the planet ecology.
It suggests that the system, if left to itself, has a capital represented by sunshine, air, water, plants and animals.

It suggests that the carrying capacity for humans is like the "interest" on the global "capital"
The inference is that we are harvesting more than the interest and are well into the capital - harvesting at an exponential growth rate.
In other words, having eaten everything on the farm, we are now eating the farm. And there will be no more "interest" becasue there will be no more capital.
Like our global bank account is in free-fall.
One dimension of the assertion is that, by mass, the nitrogen in human beings is 1.5 the available nitrogen in the at-rest ecology.

Firstly, is this a valid assertion?
Are Earth resources truly finite as assumed?
Are the available resources measurable? If so - who has a good set of data we can use for modelling?

Secondly, if resources are finite and measured - and we are consuming capital exponentially - what are our options?
What lattitude do we have for increasing carrying capacity?
How far can carrying capacity be pushed?
Can we survive in a no-growth, or contracting economic model?
What are the options for population modification?
How long do we have?

These questions are not formulated to "troll" world views. I am asking questions that a lot of people should have rational answers for.
Please reply in the spirit of the questions. Data would be good, as well as well considered models that can be tested.
Also welcome are weblinks that have rational foundations - no ratbag theory please.


Closing Statement from Mitch SMith


I have digested available metrics and known models.

Like everyone else, I am finding that the non-linear factors render the numbers functionally useless. The modeling methods themselves seem to yield more information - but all models admit to not representing any comprehensive claim.

However, one thing is clear - the window of opportunity for business-as-usual closed sometime mid 1900's, the balance of carrying capacity against draw-down of fossil energy is well under way - capital is definitely being exponentially consumed and has a terminal point at around 2050 - at which point all life on planet earth will cease.

But this assumes business as usual based on what we think we know - as it turns out, we know very little.

So .. in this scenario - ignorance is bliss.

I the analogy of our common understanding, we are screwing the planet and the value it represents. So .. to stay within the things we understand - are we rape/murdering the panet - Or are we mating with it?
This distincion is the critical facto determining if a single human will occupy the universe past 2050.

2050 is a conservative estimate - I would recommend you start answering it now.
It might be too late for you, but you might have children.
If you value hope ..
Remember - hope is not required in the universe outside of your own skull.
What you do is important - to you.
I couldn't care less. _ I've made my choice.

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    Nov 14 2012: I don't buy the premise.

    If you asked this when the population of the world was in the millions and you presented this concept what would they say if you asked them about 7 billion or today about 100 billion?

    Peak oil is used as a metric of your concept. But as technology changes so does peak oil. If they perfect fusion reaction energy is irrelevant. Aluminum in Napoleon's time was more valuable than gold but then technology figured out how to make aluminum and it became cheap.

    The resources are made scarce when they are manipulated by government to gain power

    To answer your question, It should be as it has always been the Free Market.
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      Nov 14 2012: Did you ever notice, that on nuclear fusion your all beloved and all problem solving 'Free Market' adds only a tiny fraction on the overall research budget in this field?

      In the US the main financier for this research is the taxpayer, also known as 'Manipulative Government' to some people and they support the National Ignition Facility (NIF), the MIT & Columbia University and the FRX-L (Los Alamos National Laboratory & Air Force Research Laboratory).

      NF Research in France, Russia and Germany is funded by their governments too.

      The only private Institution in the US I know of is the Lawrenceville Plasma Physics, which states, that they rised over $2M from private investors from around the world, after getting kickstarted by $300K from NASA's Jet Propulsion Laboratory.

      So the problem of this crucial technology change is not solved by the 'Free Market' at all, as it has no short term profit, no quick buck to earn in this sustainable and farsighted strategy of energy production.

      This is why all this manipulative governments worldwide started their national budged conspiracies to corrupt their scientist to work on nuclear fusion and to hinder the 'Free Market' to do this work on its own.

      It is interesting to see what you take for granted by and what you blame governments for, and this almost within a single sentence.

      The average ROI time frame in private businesses I worked with is 2 to 3 years. Anything beyond that time and at certain levels of complexity, investment and uncertainty, is, literally, 'none of their business' anymore.

      Also, resources are made scarce when they are manipulated by private companies to gain their power, which is then called monololy - on which I assume you deny their existence... :o)

      By the way, are you a lobbyist of some sort? Because if not, you could certainly make some money here... ;o)
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        Nov 14 2012: Do you think that the government supplied us with flight? They subsidized Samueal Pierpoint Langley to the tune of $50,000 (about 1.3 million today) to build some part of an airplane the Wright brothers got zero. Langley returned nothing the Wright brothers brought us manned flight.

        Did Al Gore bring us the internet? Yes a tiny fraction that does not resemble what we have today

        Same with computers, automobiles, housing, or any other consume good

        Your points are a myth.

        Did government bring us any type of energy? I don't know but me thinks NO. Will they with fusion? I doubt it.
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          Nov 14 2012: For your safety, your government supplied you with a lot of flight!

          Who do you think paid for the development and construction of the latest A10, B2, C17, CV 22, F14, F15, F16, F18, F22, F35, MH 53, HH 60 military aircraft in your country? And how much did this funding increase the know how of those companies, who got it?

          Budget is neither guarantee nor substitute for passion, so don't mix them up!

          And who got you space flight, the first man on the moon, satellite communication and GPS?

          Only now private companies are jumping on a save and well known 'space delivery service', where the risks are known and they make quite a buzz out of it.

          The internet was highly based on government institutions like DARPA, DOD and has many predecessors and fathers coming from those sides.

          The points I made are, unfortunately, no myth, as private companies are limited in their risk-taking and therefore limited in many fields of technology development.

          I am not saying, that the private sector does no good, as it would be false to say so, but I do not worship and believe blindlessly in capitalism, as it outweighs its benefits, does not serve the majority of the people, and creates imbalance in the distribution of wealth.

          Capitalism without governmental regulation is nothing but anarchy in financial power, in which only a few people are free and the rest got to pay for them. The latest bail outs are good examples of how perverted the system has become to us, the people.

          Nuclear fusion is a change for an alternative energy supply. Nobody knows if we'll make it, but if we do, I assume, it will be taken off the hands of the tax-payers and returned to them by private companies to let them pay THEIR profits. Mark my words on this!
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        Nov 14 2012: Clearly you understand this in much more detail than I, Have a nice day.

        After last week I would rather stick needles in my eyes than continue this conversation.
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          Nov 14 2012: I understand, it must be hard to live with a majority of fellow citizens who voted that ignorant ...

          Good luck and be carefull with the needles... ;o)
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      Nov 14 2012: Hi Pat,
      I hoped you would join in - you provide good range for perspective.

      So. you add the important observation: Humans are not good at concieving exponential or non-linear estimates.

      You also point-out that the dynamics are not straight-forward.
      The peak-oil analogy is just a nice, easy to comprehend, example.
      But it does flush-out some of the main dynamics:
      1. Is there a limit to technological efficiency gain?
      2. Is there a limit to technological inovation? What are the time-limits to this inovation?
      3. If free energy is within our grasp with inovation - do we have a plan for energy balance in our environment?

      I can see potential in these things, but I don't want another nebulous god or a Jonestown temple of lemmings. The only way to tell the difference is to get the numbers and crunch them publicly - with participation from all.

      Can you help us understand the free market a bit better?
      If we know what it really looks like, we can get governments and others out of its way.
      I suspect that what we have now is not a free market.

      Here's one for you, something I have difficulty nailing-down:
      How does the invisible regulating hand of supply/demand=price translate into satisfaction of the Maslow pyramid?
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        Nov 14 2012: I don't know if there is a limit to technology efficiency gain actually I don't know what that means

        Is there a limit to innovation, Yes socialism

        As far as balance goes I don't know

        I have tried many times to make you and the others understand socialism better to no avail

        The simplest way I can think of is to point out that the standard of living that we have today compared with a 100 years ago or 1000 years ago is because of the free market. Notice that those countries are gone or going and the standard of living is still here

        There are no absolutes and the countries are always changing Countries like your Australia New Zealand Hong Kong and Singapore are at the top of the freedom scale North Korea is at the bottom.

        By virtue of the fact that for an producer to sell his wares he has to have a customer which requires voluntary cooperation this activity forces the benefit of both parties. This allows self betterment of seller and typically helps the buyer to survive better both will be happy about the exchange and yes all of Maslow's needs are met.
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          Nov 14 2012: Hi Pat,

          Many thanks!

          Please don't mistake me for a socialist. As far as I'm concerned, the models that sprang from Marx were just another form of power concentration. I'm more like an anarchist - but with qualifications - I observe that there are dynamics in human interaction - such as supply/demand - in fact, I was one of the people who helped develop the math for supply/demand analysis.

          What concerns me most is regulations applied that concentrate wealth and power - these are almost always demonstrated to be manipulations of supply demend - and it seems to work like this:
          A group of people forms up into a micro-community. This micro community starts trying to survive as an entity in it's own right - the resource/fuel of that entity is the potential agency of the individuals in it. The cell will max-out this resource and turn outward to accumulate energy elsewhere. In this way we get "governments" - governments have self-survival as priority over all things, with only window-dressing for the electorate that provides the additional energy - the larger the electorate, the more growth the "government" organism has. Then the "citizens" are maxed-out under the burden of feeding it. Then the "government" creature must start competing with others of its ilk through conquest.
          Governments aren't the only meta-organism on the block - corporations also do this. Between them, the healthy dynamics of the free-market are harnessed up to feed the competing meta-beasts.
          I would not mind so much if these meta-beasts seemed to have any positive attributes ,, it would be like assisting evolution, but I cannot see anything to redeem them.
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          Nov 15 2012: Pat, If some bright spark out there cracks the holy grail of energy and tries to sell it but finds that he's been hemmed in by the big guns that want what he has and them gets all high and mighty with their pitiful offers and chooses to do what Linus Torvald did, He gave it to the world, so now almost 20 odd years later to the chargrin of Microsoft, his software powers most of the net.

          Open innovation access to these great ideas starts slow interest but gains momentum as small business starts to develop said free tech rather than the big corps trying to lock it down from every angle and a feeding frenzy begins, Nz is a country built on small business and to me it's small business that keeps things ticking along, what's your view on this?
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        Nov 15 2012: A volume of history is worth a tomb of logic:

        How many companies have lasted for over 100 years? That is right almost none, you see the market place is between a rock and a hard place. Remember all the robber barons, they are gone. Spare me the Teddy Roosevelt trope.

        The same goes for the U.S. for the same reason it quit responding to the market place. As did it's predecessors for the same reason.
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          Nov 15 2012: Come on Pat, you can't have all the fun - sure it's nice to exercise words of derision such as "trope", but that's more a function of your spleen than your brain - c'mon, put a real log on the fire ;)

          I'd enjoy seeing your arguement. Who is this "Teddy Roosevelt" and what was his "trope"?

          Corporations eat each other, some starve by not adapting. The corporation of USA seems to be doing well, as do the Roman Catholic church and the old banks.

          I mean really, I'm trying to find a place for your free-market paradigm - it seems like part of anarchy - and I'm all for it. So how about you break some logic out of it's "tomb" and use it to breath some life into this "history" that you observe?
          Can you be specific about this "Rock" and this "hard-place". It seems like we should do something positive to remove them.
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        Nov 15 2012: The typical left believes that the anti trust law created by Teddy Roosevelt were what did the citizens good by eliminating the monopolies that you mention. A while back I was talking to you or another Aussie (you all look the same to me) about an example of this which was Montgomery Ward was beaten out of the market by Sears both were mail order but Sears starting opening stores Sears was then beaten out by Walmart by using the efficiencies of modern technology and the cheaper cost goods from China. Inside of 100 years the leader in a huge market changed hands 3 times.

        The rock and the hard place is a good thing. Run fast or get eaten by the competition the benefactor is the consumer.
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          Nov 15 2012: Hi Pat - you yanks, it's encouraging to see your myopia is voluntary not congenital ;)

          Was there any connection between Teddy bear and FDR? I seem to remember FDR doing some good stuff with the Glass Steagal initiative - that once dismantled lead to your current implosion. Which has also cheered me up no end :)
          All that talk of Sesession - go market!
          I know about Seers et al, The Yanks adopted teh Aussie cash-and-carry model - turned it into a thing called K-Mart which they launched back here in OZ. My company like the improvements and copied it brick-for-brick all over the place and drove them out of the market.
          That thing with Wal-mart is just a natural development. Interstingly, none of these companies view the customer as more than a substance driving throughput. Ther is no profit made from sales - it is all cash-flow investment on 90-120 day settlement terms - a device used to screw suppliers for interest free cash loans. I helped my company by redefining the dictionary definition of the word "rebate" .. turned it into settlement discount - very funny :)
          I'm not sure if you have seen the new thing in the USA yet. With the risk in currency trades getting so dangerous right now, there is some lateral hedging into drugs and gambling.
          Problem with that is whether it will canibalise sales as people have less money for food.
          As I recall - you are a corporate fellow? You don't seem to demonstrate much experience.

          So let's see what happens to your living standards .. It will be chuffing to compare notes in a year or so.
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          Nov 16 2012: The typical Everyone, as I think you have mentioned often, Pat, knows essentially nothing about economics. While the antitrust act signed into law in the early 1890s, I think, was meant to protect consumers, over the years more careful scrutiny revealed that some parts, like prohibitions against price-fixing among those who should be competing is typically sensible, but lots of other prohibitions in the law, particularly in Sherman Act section 2, made no economic sense in terms of benefiting consumers.

          The law underwent serious economic scrutiny, certainly, in the early eighties, and while I don't know what may have been changed formally in the legislative sense since that time, parts that made no sense for consumers were no longer enforced and many previous consent decrees were vacated- droves of agreements that made no sense for anyone.

          An example of an economic principle that the law as it had been enforced did not reflect is the competitive pressure created by the threat of entry in industries in which new entry is easy.
          Sorry, Mitch, for the tangent, but as you were exploring the tangents somewhat yourself, I thought you would not mind.
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        Nov 15 2012: Ken

        Small business is the engine it creates all of the new jobs. Existing business some shrink some expand but at the end of the day it is wash.
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        Nov 15 2012: Mitch

        Not that I know of.

        Glass Steagall is another trope. Canada doesn't have anything similar yet no meltdown. The reason is that Glass Steagall does not regulate derivatives, so with or without Glass Steagall the result would have been the same.

        I find it hard to believe that companies are hedging by going to illegal activities

        Yes clearly I don't know what I'm talking about...

        Yup the standard of living is going to go lower and then implode. The only question I have is it going to be Mad Max or a dystopian 1984
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          Nov 15 2012: Agree about small business - you have to have passion to do it, and passion is the engine of authentic life.
          The separation of speculation from genuine capital is important to stop big collectives from P*ssing all our hard-won capital up against the wall. Don't kid yourself that non-USA states did not follow USA into and out of Glass Steagall - Some banks retained the initiative despite the urgings of governments to "derugulate", The major bank in Oz resisted and kept the deposit and investment arms rigidly separate - there was a lot of wisdom in that company along with the usual megolomania. AS I recall, the plan was to destroy halal banking in indonesia, but the Asian melt-down prevented them from doing it. This is one of the true motives behind Muslim-ophobia .. it's about the sanctity of usury.

          As for the fall .. well, it's happened to us over and over in history. I have a newsletter from an oranisation advising the rich how to hang onto their power and money through it all. How to "arm-up", how to build secret bunkers and how to squirel value away for the re-emergence. I am of half a mind to publish a newsletter about how to detect hidden bunkers and why "a cave is a grave".
          All you can do is disconnect from dependency, reserve your freedom and keep all options as wide open as possible - adaptability is how we always overcame these things.
          Even though I find you to be overly bellicose, I do admire your capacity to stick to your guns.
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        Nov 15 2012: You do not understand Glass Stegall had nothing to do with the meltdown, zero.

        The thing about this stuff is that it takes more than sound byte to understand it, if you haven't already closed off any communication about it because of preconceived notions.

        I'm becoming less and less aggressive about it because the election is over and most likely the United States as anyone recognizes it.

        Contrary to popular belief I speak sooth.
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          Nov 15 2012: Hi Pat,

          Hmm - I'm willing to be educated:
          As I see it, the separation of speculative investment from deposits prevented the deposit capital from being diverted into high-risk ponzi-shemes such as derivatives.
          Exposing bank reserves to schematic collapse (such as the sub-prime event), meant that all the bets got called-in - the resulting doom of wallstreet was headed-off by taxpayer-funded bailouts - and set the stage for contunued acceptance of insane financial instruments leading to continuous bail-outs - which has been "gamed" ever since.

          How do you see It?
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        Nov 15 2012: Glass Steagall did separate the two type of banks. The catch is that all the trouble was with OTC derivatives, derivatives were never regulated by Glass Steagall so it would no have made any difference.

        The other aspect of this is that the media reports huge numbers but what they don't report is that the investors hedge their bets so the real exposure is a fraction of what the media reports.

        A person will be a lot smarter if they just don't watch tv or read the newspaper.
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          Nov 16 2012: Thanks Pat - it helps.
          The hedges are pretty well known, I was not aware of the OTC distinction.

          Man - I cannot agree more about TV and newspapers.

          I think we all need to review what the word "freedom" actually means. It's not "freedom from" or "Freedom of" - - it's "Freedom to" . And, as far as I can see, we have forgotten to evaluate all the trade-offs we make - how we follow the shiny baubles into cages where the only freedom we have is to rattle the bars on the door we slammed shut behind ourselves.
          in my "jibber jabber" I call it potential agency - the power to determine and foster our own advantage or disadvantage - to choose within those options according to our own judgement from anyone who insists they know better - whether we choose wisely or not.
          All these laws that make people criminal for existing outside of absurd ideals.
          And then they say "selfish" .. but I always have to ask .."well, how the hell can I be "other-person-ish?" And even if I could be other-person-ish - which other person? You? give me a break ;)
          (not speaking about you personally there).

          The other aspect of financial meltdown seems to be the printing of money on value that can never exists. In a way, it ensures collapse if for no other reason than to get trading tokens re-linked to gold or some other real value unit. As i see it, the holders of the funny-money contracts have got everyone by the coblers and sovereignty now is pressed to declaring - "no" - come and get your funny debt and we'll see who is left standing.
          If there is courage enoough for that, we might avoid both the Mad Max and the 1984.
          It's all playing out in the US .. and a lot of breath is being held.
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        Nov 16 2012: One thing that you say resonates with me. It is about freedom to.

        You say you want freedom? The answer is always freedom from the big evil... or Mats takes it step further I want freedom from having to make a living.

        But the statement never comes up I want freedom to... When ever you start a revolution you have to have the to part all figured out or else the people will fight for freedom from alright but once you are done if you don't have the to part figured out your revolution was for naught.

        The to part is the purpose the goals and the IS what is missing. Yes a chicken every pot, a house for everyone, a guaranteed pension, etc etc Yup the we have allowed the government to turned us all into a bunch of whores.

        The corollary to freedom from is where the real game is, this may seem esoteric but it is not. In 1984 they stated that only proles are free. Imo this double speak because they are medicated on Soma so they do not Look.

        Damn shame...
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          Nov 16 2012: Well, lately, I'v abandonned much of my idealism .. turned out to be mostly media programming (till I trashed the TV).
          With re-developing my entire world view (thanx a lot to genuine conversations here on TED) one thing that stands right out is the need for people to stop expecting authority to think for them.
          I say "forget jarbs - find your work" .. i know that a great number of people have no desire to find their life's calling, but, at the very lest, the idealist expectation for everyone to aspire to jarbs has an alternative in the minds of those who actually have a life's calling.
          And these are the guys who will get their hands dirty starting small businesses - creating the jobs for the rest!

          I wanted to take on an apprentice last year, but the beurocratic overheads put it way out of reach - one good guy lost a job and i lost the opportunity to keep up with my order-book (i had to close the order book - 2 years is too long to maintain a supply contract with customers who I regard as friends).

          What's your take on this?
          It seems on-topic.

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