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Musings Report #14 4-5-14 The Next Big Thing Is... Nothing?
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For those who are new to the Musings reports: they are basically a glimpse into my notebook,the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
The Next Big Thing Is... Nothing?
The Grand Narrative of the past few centuries goes something like this: from religious authority to secular authority, from agriculture to industrial, from rural to urban, from local to global, from periphery to center, from decentralized to centralized, from low-density energy to high-density energy, from wood to coal to oil, from industrial to communication technology, from gold to fiat currencies, from linear to non-linear (fractal), from productive to consumerist, from sustainable to unsustainable.
In the past few decades, the narrative centers around "the next big thing"--a new technology that drives wealth and job creation.
In the early 20th century, the next big things were plentiful, and they clustered around transport and communication: autos, highways, aircraft , radio and telephone.
The progress of technologies tends to track an S-Curve, with a slow gestation (experimentation, a proliferation of innovations), a period of rapid adoption and technological leaps, and then a maturation phase in which advancements are refinements rather than leaps.
Air travel is a good example: the leap from open-cockpit aircraft of the 1910s to the long-distance comfort of the DC-3 in the 1930s was enormous, as was the leap from the prop-driven DC-3 to the greater capacity and speed of the 707 jet airliner.
But since the advent of the 747 in 1969, very little about the passenger experience of flight has changed (or has changed for the worse): the envelope of speed is little changed, and fuel efficiency has improved, but these are mostly invisible to the passengers.
My 1977 Honda Accord was extremely safe, reliable, powerful, efficient, etc. Improvements in the past 37 years since have been modest in these fundamental technologies. (I actually prefer the smaller, older, less luxurious Accords.)
Once computers reached the Mac OS X/WindowsXP level, improvements have been of marginal utility. The lack of blockbuster medications--and the skepticism regarding the efficacy and cost of existing blockbuster meds--raise the same question: maybe the low-hanging fruit of present technologies have all been picked.
The costs of our lifestyle continue to rise, due to financialization, cartel/fiefdom skimming, bureaucratic bloat and related systemic causes. At the same time, more of our collective consumption is being funded with debt, which is another way of saying that present consumption is being paid for with future income.
Each Next Big Thing magically created more wealth and more jobs. The narrative has been: production moves to lower-labor cost areas or is automated/mechanized, and labor moves to providing services.
What if we've run out of Next Big Things that generate more jobs? What if the next big thing is Degrowth, i.e. doing more with less? The status quo has optimized one pathway: higher consumption, costs and debt. Any reduction in any of these three collapses the system.
Job-destroying computer and communication technology has reached the service sector. As costs inexorably rise, enterprise has only one real way to reduce costs: reduce labor. That means the current Big Thing--the world-wide web--is the first technology that is not creating more jobs than it eliminates.
Many smart people retain the faith that technology always creates more jobs than it destroys, but if we look at our daily lives, I see little evidence to support this faith. Thanks to technology, sole proprietors in information/design businesses can create the same output that took multiple people just 20 years ago.
In my view, the Status Quo has no Plan B, not just from habit and the desire of those in power to retain power; we collectively have a failure of imagination. We cannot imagine a world that consumes less, generates fewer conventional jobs and reduces debt rather than creates more debt.
Such a Degrowth economy is not only entirely feasible in my view, it is the only way forward. The low-hanging fruit of Next Big Things have been picked, and wearable computing (Google glasses, etc.) is simply not a global growth engine. Robotic vehicles will eradicate millions of jobs without creating any more jobs at all; manufacturing self-driving cars will add very little labor to the current process.
Wages are no longer an adequate means of distributing the surplus of an economy. This is doom-and-gloom not for society--it is only doom-and-gloom for the current unsustainable arrangement (Plan A). Plan B is actually a better plan, though few are able to see that yet.
Summary of the Blog This Past Week
What's Cooking at Our House: Local Aquaculture Trout 4/5/14
My Wish for 2016: We Finally Get a President Who Doesn't Kiss Wall Street's Rear End 4/4/14
It's Not Just the Stock Market That's Rigged: the Entire Status Quo Is Rigged 4/3/14
What Happens After the Low-Hanging Fruit Has Been Picked? 4/2/14
April 2016: Dow Jones-30 Suspended Due to Lack of Interest 4/1/14
Have We Reached Peak Putin? 3/31/14
The Status Quo has no Plan B now that the low-hanging fruit has been picked globally.
Best Thing That Happened To Me This Week
Finished my new book on how to build a career in a bewildering economy--and finalized the title with the irreplaceable aid of old friend G.F.B.
Market Musings
Many of the recent high-flyers in the technology, biotech and small-cap sectors have taken swan dives. For perspective, let's look at the monthly chart of the RUT, the Russell 2000:
The RUT has essentially doubled in a mere 2.5 years, and has been on a tear for the past 1.5 years, rising almost 60% since last tagging the 50-week moving average.
Is the top in? perhaps, but look at the MACD. It diverged from the recent new high, but is still firmly positive. That said, there is a lot of air under the RUT; the first real support/congestion is around 850-875.
As many technicians have noted, tops are often lengthy, drawn-out affairs; 18 months is not uncommon. If the RUT (and other indices) have topped out, price could meander for many months. A tag of the 50-week and a strong bounce-back rally might set up a decent spot to go short, but if the bounce-back rally hits new highs--patience is a virtue when it comes to capital preservation.
From Left Field
Criss Angel Amazing Tricks With Coffee Mug (3:29 video) (via John S.P.) This guy is good.... doesn't look like a major star in Vegas, but he is....
Stephan Braun and Valerie Inertie (4:58 video)(via John S.P.) Canadian cyr-wheel (giant hula-hoop) artiste Valerie Inertie, in collaboration with Stephan Braun, German composer and Cello player.
The Floods, The Drought and My Frangipani Tree (via Joel M.) Singapore's driest February since 1869 ... in Hawaii we call Frangipani Plumeria....
The Problem Is The Inexorable Rise In Entitlement Payments -- yet another verboten topic
An Illustrated Taxonomy of City Bikes and Cyclist Archetypes -- I am annoyed that I'm not listed here: counter-cultural geezers on 15-year old mountain bikes, logging thousands of miles under the credo "only the paranoid survive." hey, it works, especially on a bicycle.
Completely Surreal Photos Of America’s Abandoned Malls -- Peak debt-based Retail?
Sorry, China Isn’t Winning in Ukraine: The argument that the Ukraine crisis presents a huge opportunity for Beijing is critically flawed.
Expulsions: Brutality and Complexity in the Global Economy (new book) Cute title for academic critique; may have value simply because it isn't yet another conventional economic analysis....
"They are more accurately understood as a type of expulsion—from professional livelihood, from living space, even from the very biosphere that makes life possible."
Out of Work, Out of Benefits, and Running Out of Options -- the conventional fulltime job is fading for structural reasons...
Wageless Life (Michael Denning) -- somewhat obtuse/academic essay of interest
Meaningful Work Boosts Happiness, Even for Lawyers (those who have jobs, that is....)
The Future of an Illusion: "At the risk of drawing a closer parallel with Freud’s more technical version of it than I wish, I am proposing, then, that energy is the unconscious of the American way of life."
how fish oil is made (via Cindy F.) -- The ancient Romans loved their fish sauce; it was a major trading commodity in the Roman Empire...
"A society that gets rid of all its troublemakers goes downhill." Robert A. Heinlein
Thanks for reading--
charles |
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