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Musings Report 2016:11 3-13-16 And 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.
ADMIN NOTE: Due to illness, This week I am reprinting a Musings Report essay that many of you might not have read. I apologize for the repetition to long-time subscribers with excellent memories. The rest of the report (Market Musings, this week's blog, best thing that happened to me) is new.
And 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 aroundtransport 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 39 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 Week
It's Not Just the Corrupt, Cronyist Republican Party That's Imploding--the Corrupt, Cronyist Democratic Party Is Imploding, Too 3/11/16
Do Any of the Current Rallies Pass "The Sniff Test"? No. 3/10/16
Cheap Oil, the U.S. Dollar and the Deep State 3/9/16
A Profitless Recession 3/7/16
Best Thing That Happened To Me This Week
Homemade Chinese clay pot stew with shiitake mushrooms, lily buds, "tree ears" (dried fungus), thick slices of ginger and a bit of chicken--very savory over brown rice....
Market Musings: Crude Oil and Inflation
The price of crude oil (WTIC) is typically charted with the nominal price, rather than the inflation-adjusted price.
I've marked up a long-term chart of WTIC with the lows adjusted for inflation, i,e, stated in current dollars.
Based on adjusted lows over the past 40 years, crude oil could sink to $24/brl or even $17/brl. Interestingly, analyst Art Berman recently proposed a target of $16.50, which is in line with the $17/brl low on the chart.
Nobody knows what will happen to the price of oil--perhaps it bottoms at $24, or declines to the previous nominal lows of $12/brl. Berman argues that once storage facilities are full, the price will drop. If the oil exporters and U.S. producers keep pumping, there is little reason for stored oil to be consumed.
Thus the question is: how low will it go? Nobody knows, because nobody knows what the global recession will do to demand, or what geopolitics will do to supply.
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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