Patchwork Design Lab

May 19, 2010

Technology and Entropy

Filed under: Human Ecology, Systems Ecology, Uncategorized — Lonnie @ 7:58 am

Technology is not static. No part of it is static. What is not continually used and refined is degrading and will eventually be lost. Those are the facts of entropy and technology. Technology combines information with tools. Most modern technology involves combinations of simple machines powered by motors or engines fueled by fossil fuel of one kind or another or else elaborate networks of electronic switches that perform logical functions in response to incoming signals, these networks also powered by fossil fuel of one type or another. The information comes from insights gleaned either from formal scientific research or else from practical application and experience. There are a few variations on the energy source, some hydroelectric power, some nuclear, a smattering of wind turbines and photovoltaic arrays. But mainly, it’s fossil fuel.

Information is a curious resource, because unlike other natural resources it is not depleted or degraded with use. On the contrary it is improved and refined with use and degrades when not applied. I saw a program on PBS several months ago which talked about how we/NASA no longer remember how to build a Saturn V rocket, the one used to launch the Apollo moon missions. There are no engineering documents that preserve the specifications of any of the components. There are no drawings, no parts lists, nada. On the program, scientists from NASA were obtaining old Saturn V components from a junk dealer in the area who specialized in such high-tech gadgetry and trying to reverse engineer the various sub-systems. My own experience debugging legacy code makes me wonder if it won’t take them longer to reverse engineer the technology than it took to develop it in the first place.

One of the trends I’ve seen in my working life is the dual push for automation, on the one hand, and specialization, on the other. My own “specialty”, that is whenever my job paid anything substantial (jazz musician, carpenter, writer, permaculturist, not so much), usually involved facilitating automation in some way. When the postal service wanted to automate, to some degree, the process of trouble shooting failures in its complex mail sorting and bar-coding equipment, I got a job first writing trouble shooting procedures for operators to use and later automating the process even further by writing interactive troubleshooting programs, again to be used by lower paying nontechnical employees. Ultimately they wanted a program that would use computer monitored voltage levels at different key locations to analyze failures and prompt operators to take the appropriate correctrive measures. Of course they didn’t want to hire and pay the number of people with the appropriate skills to complete the project within the timeframe they were looking at. I guess you can’t automate everything.

There is a modern myth which, if you unpack it, says that technology combined with free markets continually increases the efficiency of production, approaching something-for-nothing asymptotically. It may never reach it, but it can get arbitrarily close to it. Something for Nothing (for all practical purposes) is the bill of goods I’ve seen being sold all my life. No wonder we live in such an entitled society.

Here are the ABC’s of technology and entropy. Most people no longer understand simple machines, because they’ve been packed in black boxes and powered by black-box engines for almost a hundred years now. Technology, you might have observed, is a consumer of energy, not a producer. Sure, there are “energy generating” technologies, but that’s just word salad. Energy is neither “generated” nor destroyed. These technologies are really energy harvesting and transforming techniques. They are not all that efficient. And we are rapidly depleting their primary power source, fossil fuels. In the mean time, the cultural push for convenience, overspecialization, and something for nothing has brought about a decline in wet tech, the neural technology that actually understands the way some of these things work. Not to mention the older techniques of sustainable agriculture, animal husbandry, even – in many cases – basic cooking.
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May 18, 2010

Easing into the consumption crash

Filed under: Uncategorized — Lonnie @ 9:26 am

Whenever I talk to anyone, even friends who agree with me and can see the basic argument about the coming catabolic collapse (to borrow the arch-druid‘s description) they act like I’m talking doom and gloom. I don’t see it that way at all. I can’t argue that it’s going to be easy, or that it’s easy now. But on the whole, to me, the coming changes are a breath of fresh air. Thinking about living in a world without cars and constant ad bombing and everyone running around like crazed racoons looking for meaningful retail therapy and the media constantly hammering out fears of turbaned ruffians improvising bombs from here to Timbuktu, …, well to tell you the truth it just sounds like a big relief.

Here are 5 things you can do to make the transition more enjoyable.
  1. Develop a taste for literature. Having the leisure to read is one of the joys of being independently poor. For one thing, it’s a way to find things out about yourself that you would never know in any other way. I discovered, for example, that I prefer Raymond Chandler to John Updike. I would much rather look straight at the dark underside than wallow aimlessly around on the surface pretending that things are normal. In both worlds – the world of Rabbit Angstrom and the world of Phillip Marlowe – the stakes are life and death, but it comes as less of a shock to the hard-boiled PI than it does to the feckless ex-highschool basketball star.
  2. Move someplace where you don’t need a car. Or lobby your local civic authorities to favor more walkable communities that are friendlier to local enterprise than they are to multinational, cargo cultish, MacJob bait and switch schemes. Care are becoming increasingly unaffordable anyway. The automobile may be the single most environmentally destructive invention ever devised, especially when you consider the infrastructure required to support it. Reduce the amount of asphalt in your neighborhood and replace it with gardens and greenspace. You’ll vastly lower your air-conditioning bills in the summertime by reducing the heat-island effect.
  3. Learn to garden. You shouldn’t be swallowing that processed and polluted corporate crap anyway (this goes for information as well as food). You want to improve your health? Get some exercise and eat more fresh fruits and vegetables, chemical free. You want to feel more financially secure? Break free of the global food-as-commodity debacle.
  4. Learn to draw, paint, dance, sing, or play a musical instrument. Find some friends and start a band. Start noticing the world around you; the arts are a great vehicle for this adventure.
  5. Learn a trade – plumbing, carpentry, welding. The technological innovations of the 21st century will be largely in the field of recycled, scavenged parts. I have an idea for a solar generator using an old turbo-charger, a generator from a truck, some tubing and miscellaneous materials for constructing a panel. I have a friend with welding gear. Green retro-fitting and other types of remodeling and handyman work will be in increasing demand.
  6. Bonus Idea: Start a community. I’m not talking about a ideologically driven eco-village type of thing. No “intentional” communities for me. Network with people you know who share some of your views and/or who have something valuable in the way skills and insight to share. Do business with these people, and shun the Wal-Mart, even though the big boxes are cheaper in the short term. Look into starting a local Credit Exchange Network (such as LETS) or a local currency.

The age of exuberant stupidity is coming to an end. With the breakdown of infrastructure comes the easing of control. There will be room to inhabit your own skin and grow your awareness. As long as you remember this simple phrase: Don’t Panic.

May 5, 2010

Valuing the Commons

Filed under: Human Ecology, System Dynamics & Culture, Systems Ecology — Tags: , — Lonnie @ 7:33 am

President Obama’s recent remark that we will repair the damage caused by the recent oil platform explosion and subsequent, ongoing oil hemorrhage off the gulf coast no matter what the cost is interesting to me. First of all, what is the cost of such an operation? Can he even know this? Certainly he has at least a vague idea that it must be in the billions of dollars. Second, is such a thing even possible? There is a difference, after all, between cleaning up the spilled oil and actually reversing the damage done to the local economies and to the ecosystems of which they are a part and upon which they depend. The movement of money in an economy carries information about the value of goods and services. But to whom do you send a check in payment for the work done by a forest as it contributes to annual rainfall, the ongoing supply of fresh air, and the building of fertile topsoil? Who receives the payment for actually producing the fish that are harvested from wild fisheries?

The fact is that since we simply help ourselves to these services and send no check to any theoretically external agency for these benefits, the circulation of currency carries absolutely zero information about the value of these services. So in the most literal sense, President Obama has no way of knowing the cost of his promise. Furthermore, there are legal limitations on a corporation’s financial liability in these cases. A corporation can be held accountable for immediate damages to property and local businesses, but as I understand it is exempt from accountability for the long term health, economic, and environmental consequences of its screw-ups. So whatever the full cost of remediation may be (to the extent that it is possible at all), the lion’s share of the burden falls upon the shoulders of the taxpayer.

This situation shouldn’t be at all surprising; it arises quite naturally from two archetypal system-dynamic traps. These dynamic patterns underpin the contemporary global economy to such an extent that once you understand how they operate, you begin to see them everywhere. They are called the Tragedy of the Commons, and Success to the Successful. The tragedy of the commons is a dynamic by which rational decisions made without ill intent but with a view to maximizing one’s profit cause one to take actions whose benefits accrue only to oneself but whose negative consequences are shared by all. Because you receive all the benefit but only a portion of the cost, you perceive the action to be quite reasonably taken. You perceive the odds of a major catastrophe to be low and take the projected long term effects to be purely hypothetical. And your increased income provides you with insulation against many of these consequences. Further, your perception of them is tempered by how dearly you value what has been lost. Clearly, the CEO of a company like Exxon or British Petroleum will not view the damage to coastal ecologies in the same light as will an Alaskan fisherman or Louisiana shrimper.

The second dynamic pattern, Success to the Successful, functions, effectively, to institutionalize the Tragedy. In a game where it takes money to make money, the wider your profit margin, the more quickly it grows – a classic case of exponential growth. Conversely, the slimmer your margin the greater the struggle required to maintain it. Those with a wide and rapidly expanding profit margin have disposable wealth which they can use to reinforce the circumstances that enabled them to succeed. They can influence legislation through lobbying. They can influence opinion through media ownership. They can even sway the types and quality of goods and services available to all by sheer volume of consumption. McDonald’s is a case in point. McDonald’s demand for a consistent product worldwide has so influenced the way beef is produced that it effects what is available even to those of us who never set foot in one of their establishments.

Accountability is a good thing. Everyone says so. Yet we exempt from accountability to any significant degree those people and organizations who have the greatest power to do harm. It’s not difficult to see how this comes about, given the dynamics at play, but it’s puzzling, sometimes, that remarking on the irony of the situation seems to be a public taboo. I guess such an observation is lacking in nuance.

The Problem of Money and Value

Filed under: Human Ecology, System Dynamics & Culture, Systems Ecology — Tags: — Lonnie @ 7:06 am

Ruin is the destination toward which all men rush

Many economists, though by no means the majority, recognize two distinct ways of understanding wealth and value. There is intrinsic value, the value of things-in-themselves, of embodied energy, information, form. Then there is market or exchange value, in which price is determined by market demand. In the first case value increases with abundance; in the second value increases with scarcity. The more arable land and potable water you have, the more people you can feed; ergo, the greater the wealth or value. On the other hand, the more severely you can limit access to arable land and potable water, the greater will be the demand for it and the higher its price. There is another element in this equation. In order for higher price to translate into a wider profit margin, there must be a price spread created either by economies of scale or by preferential subsidies from the government. Either way, the key that opens the doorway to arbitrage is ample capital – enough to purchase land in large quantities or to subsidize the candidacies of key representatives.

A rational man, desiring to maximize the value of his holdings, is motivated to increase his market share, thereby creating relative market scarcity and raising the exchange value of his holdings. He can accomplish this either through acquisition or destruction. The marketplace, with its invisible hand, turns a blind eye to this distinction. Here is a case for keeping government and commerce separate with the same vigilance that we use to maintain the separation of church and state. Government’s job is to identify, develop, and protect the country’s critical resources, both natural and constructed. Enterprises generally wish to sequester and limit public access to resources so that they can buy low, sell high, and maximize their profits. Undue influence of either on the other impedes the proper functioning of both.

This war of competing values sets up a conflict between public and private interests that tends to play itself out in a scenario first described in 1833 by amateur mathematician, William Foster Lloyd (1794-1852) and reintroduced to a wider public under the name tragedy of freedom in a commons, or simply tragedy of the commons by Garrett Hardin in 1968. Here is the scenario in his words:

The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be expected that each herdsman will try to keep as many cattle as possible on the commons. Such an arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land. Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of social stability becomes a reality. At this point, the inherent logic of the commons remorselessly generates tragedy.
As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks “What is the utility to me of adding one more animal to my herd?” This utility has one negative and one positive component.

  1. The positive component is a function of the increment of one animal. Since the herdsman receives all the proceeds from the sale of an additional animal, the positive utility is nearly +1.
  2. 2) The negative component is a function of the additional overgrazing created by one more animal. Since, however, the effects of overgrazing are shared by all the herdsmen, the negative utility for any particular decision-making herdsman is only a fraction of -1.

Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another; and another… But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit – in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.


An economic system based exclusively on exchange value is the perfect expression of and arena for this dynamic. As such, a system of this type will never produce abundance for all. The rising tide does not lift all boats. The system is designed to create difference, apartheid, extremes of wealth and poverty. Those who benefit the most are the ones in a position to set policy.

This, of course, runs utterly counter to the prevailing economic paradigm, which says that the combined efforts of rational decision-makers, each working purely in her individual self-interest, will redound to the benefit of all. I believe that the basis for this kind of thinking, which was born in the 17th century European Enlightenment, lay in an early and somewhat rudimentary insight into system dynamics. Adam Smith understood markets to be largely self-regulating – self regulating within certain limits. These limits had to do with resource constraints. This idea of constraints was quickly discarded as unimportant, relating only to externalities, by his successors. They were more impressed with his notion that the marketplace has an invisible hand.

Classical economics presents a very neat and elegant system. There is a perpetual-motion-like cycle where money flows to investment which mobilizes resources to produce goods and services which generate money which flows to investment, and so on. The flow of money and resources through this cycle is regulated by a mutual compensating loop dynamic, which Adam Smith characterized as an invisible hand. This dynamic operates to regulate price via demand and demand via price. As demand rises, the price tends to rise. Rising demand creates an apparent scarcity which enables suppliers to raise their prices. At some point prices climb high enough to dampen the demand, causing it to fall and so lowering the price as well. In theory, these oscillations gradually subside, and supply and demand are brought into balance at a relatively stable price. Stable prices allow people to make reasonable financial plans; stable prices create a stable economy, which benefits one and all by allowing the perpetual cycle of money and production to continue.

This all takes place through the actions of a multitude of economic players, each trying to maximize her individual benefit in a purely selfish way. And it works quite well as long as you discount a few empirical facts. Many economists, even some who are Nobel Laureates, claim that in economic terms, resource limitations do not impinge on this system in any significant way. Their argument is basically that human ingenuity is unlimited, and for every critical resource that is exhausted another will be found. The question in my mind is do they really believe that? If I were to go to a bank and ask for a loan using my unlimited ingenuity as collateral, how much do you think they’d lend me? Okay they say, ignoring the question, look at the history. In the very early days of the industrial revolution, when England had exhausted its wood fuel through deforestation because of overharvesting, they discovered coal. And again, when the supply of whale oil was threatened, again by overharvesting because of growing demand, what did we discover? Rock oil (of all things): Petroleum. Of course the costs of these discoveries – the soil-destroying, climate-changing loss of biodiversity through deforestation, the wholesale destruction of entire watersheds through efficient coal mining practices, more recently the ongoing destruction of coastal ecologies and (by the way) gulf coast fishing and tourism industries because of an explosion on a drilling platform that triggered a deep water oil hemorrhage – are not economically relevant.

But never mind that. Let’s just look at history. It’s easy to find historical corroboration for almost any position (this is where human ingenuity is most outstanding). As counter examples to the industrial revolution, what about Easter Island’s population crash or the collapse of the Classical Mayan civilization, both caused by the economically irrelevant drawdown of critical resources, trees and topsoil, mainly? What about the gradual desertification of the fertile crescent through the dual practices of upriver deforestation and long term over-irrigation and over-grazing?

What about physics? The claim that there are no relevant resource limits violates the first law of thermodynamics, which says that while matter and energy can be transformed one into the other, neither can be created or destroyed. The total amount of matter/energy in the universe is constant. The amount of matter on Earth is finite and very nearly constant, disregarding the loss of particles stripped off the upper atmosphere by solar winds. Therefore any material resource is finite, as is the total number of theoretically interchangeable material resources. Additionally, the perpetual cycle of money to investment to production/consumption to money, etc., violates the second law of thermodynamics. A closed-system perpetual motion cycle is not possible, because there will always be some loss of energy and information in every transaction. You may hide your income from the IRS, but the universe’s accounting system is flawless and never misses a single transaction.

Then, we could discuss how lousy a model of a human being is the rational utility maximizer of modern economic theory. We could talk about how perception affects exchange value and how plastic and easily molded through media bombardment perception has proven to be – also considered irrelevant in theory though quite clearly recognized in practice. But you get the picture.

The prevailing economic paradigm is tantamount to a state religion whose precepts are upheld and enforced regardless of any and all discorroborating empirical facts. These precepts, unsupported by rational examination, are upheld through faith alone, which makes the theory behind the global economy look either like a religion that extols greed and exploitation, or else, if that possibility is too discordant to your ear, simple pseudoscience.

May 2, 2010

Centering the Community


Long supply chains have been the bane of generals and emperors throughout history. The globalized flat-earth market (flat, of course, only to the movement of fiat capital) with its tangled webs of transport, where a single product’s components may be manufactured in 3or 4 different countries on 2 or 3 different continents, while the product is assembled in another and sold in yet another, depends in its entirety upon cheaply available energy. And while investment fraud may have played a pivotal role in the most recent economic downturn, fraud, as John Updike’s character Rabbit Angstrom observes early in his career, makes the world go ‘round. And it is just possible that the steep ascent of oil prices during the summer of 2008 to just under 25% of GWP may have made some contribution to the precipitous skid in stock prices. Given the vulnerability of the market to the vicissitudes of oil pricing and supply and the notorious fragility of long supply chains (especially those that share the global financial markets’ crippling dependence upon the oil supply), it would seem only prudent, from a risk-management perspective, for local communities to develop a certain degree of self-sufficiency with respect to the production and exchange of critical goods and services.

Going back to the historical difficulties of supply chains, we find Sun Tzu writing, “we may take it then, that an army without its baggage-train is lost; without provisions it is lost; without bases of supply it is lost.” Local communities, with their current, near total dependence upon supply chains whose complexity would make Rube Goldberg dizzy, are little more than high-cost encampments plopped down any old place with no knowledge of local resources and no infrastructure to develop them. Ask Napoleon, next time you see him, how that worked out for him in his Russian Campaign.

Yuichiro Miura, the subject of the 1970 documentary, The Man Who Skied Down Everest, had, at least, a parachute which enabled him to stop, just barely, before he sailed over the edge of a deep crevasse. Very few communities today have even that much of a safety plan.

Nothing will Come of Nothing


The great depression delivered a nasty rabbit punch to the US economy and caused widespread deprivation in the midst (and in spite) of vast natural wealth. The fundamental problem was not that there wasn’t enough good land and agricultural know-how to feed everyone or that there wasn’t enough work that actually needed doing to achieve full employment or that there were any shortages of the energy or material resources needed to fuel the economy. The problem arose from a failure of the prevailing system of money and credit. Vesting the power to extend credit, and thereby create money, in the banking system in a monopolistic fashion interferes with money’s ability to function as a pure information medium in the same way that ownership of an influential newspaper by a large corporation with a vested interest in a specific ideological perspective tends to skew editorial policy.

Inability to accurately valorize natural capital, be it human labor and know-how or material resources, makes it difficult or impossible for individuals, businesses, or governments, either local or national, to access investment capital to match it. Monopolistic money can only represent the values of its creators. When the financial system views natural resources as externalities, it becomes blind to their true value – both as already functioning contributors to the general economy and as potential contributors to the development of essential products. Conventionally, we tend to think that it is the entrepreneur’s job to bring this value into light by inventing creative ways to develop and market it. But even the most creative of entrepreneurs is constrained by the in-built myopia of the market within which he must operate.

Nothing will come of nothing. In many cases poverty in fact arises from poverty in fancy. Where there is lack of vision, wrote Lao Tzu, the people perish.

Success to the Successful


All activity arises from nature’s abhorrence of a gradient. Electrical current flows because of a charge difference that sets up an electrical field between two battery terminals. This field is nothing other than a charge gradient. The flow of electrons functions to neutralize this gradient. All forces in nature arise in a similar fashion. Speculators in a market, on the other hand, love a financial gradient. Any gap in information or assignation of value creates an opportunity for arbitrage. But the flow of money across this gap constitutes an exchange of information that tends over time to eliminate this difference in valuation of the product or service in question. In order to stay in business, the gap-speculator must either find a way to conceal either his profitability or his source. Or, he can invest in a congressman or two in an attempt to create a law that works to preserve his value gradient. In other words, like any good business, he must invest some of his profits toward maintaining the resource that produced them.

If he is successful, his profitability should improve over time, giving him even more disposable income to put to work toward increasing his future profitability. In this case, the wider the gap, the greater will be the profit margin of its exploiter. If you can buy a commodity for dollars-a-ton and sell it for dollars-a-pound you can ride the gravy train all the way to seats on numerous influential boards-of-directors. You can dine with senators, drink with celebrities, and spend quality time with the young and the beautiful while your spouse goes shopping somewhere fashionably (and conveniently) far away.

All this success requires that you constantly mind the gap. And this gap is good, you think. This gap creates jobs on both sides. But increasingly, the lion’s share goes to the speculator, and to the others, the employees, the small, third-world-country farmers or suppliers, the factory workers, goes the trickle. Because your wealth depends on a gap, the gap must be maintained. To paraphrase, to him that hath it shall be given, and from him who hath not it shall be taken even that which he hath. Or words to that effect.

Democratizing the Money


Is there a natural or universal law that says only banks can create money? Clearly there is not. In fact, as we have seen, sequestering this right within the confines of one business, organization, or institution actually works to create wealth for a very few and poverty for very many. It functions to actually undermine the health of an economy and the well-being of the general populace.

If I have something that I value, whether it is an old guitar or a well-honed skill, all I have to do to profit from it is to find someone else who value’s it and has something else that I value. Generalize this idea to the notion that everyone has something of value to someone else and you have the makings of a small-scale, independent credit exchange system. The goal of such a system would be to provide its members with an alternative to monopolized bank money by empowering them to create their own exchange medium in the form of trade credit. Such a system can cast a much finer net over the distribution of resources within a local community. It can focus a community’s economic vision on developing these local resources and local talent rather than relying, in the fashion of the western Pacific cargo cults, on outside capital and investment whose lenders are guaranteed to take more of value away than they will bring in. They have to make a profit to stay in business, after all. Learn to see and value what’s all around you and create your own system of exchange and distribution, and you can begin to free your community from its dependence on the long and fragile supply chain that ties it to the interests of people who, let’s face it, apart from your value to them as cheap producers of what they want to buy and consumers of what they have to sell, have no reason to care whether you live or die.

In order to establish a truly local economy, you will need to put effort into developing the local infrastructure and resource basis, as well. You will need to establish farms using good soil management practices so that your yields continue to grow year after year because of soil improvement. There are ways to do this. It’s not rocket science. Likewise, other industries will have to be developed. Again, none of this is new or difficult to understand. The function of a localized trade, currency, or credit system is to facilitate investment on a scale that is small enough to succeed, rather than too big to fail.

Resources


Lets Systems: The Home Page

Interlinking Mutual Exchange Systems

Cooperative Principles and Complementary Currency

A successful Swiss Economic Circle Cooperative

Local Currencies:

E. F. Schumacher Society: List of local currencies…

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