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Why the Free Market Fails Consumers in Sustainable Energy Innovation

by jeffvail Tue Mar 6th, 2007 at 12:11:14 PM EST

Let's start off with an assumption: humanity must rapidly replace our reliance on non-renewable energy sources with truly sustainable alternatives. The conventional wisdom--at least that advanced by corporate "Main-Stream Media"--is that free markets are the best source of innovation. Now a question: is free-market innovation the best way to develop viable, sustainable energy alternatives?

The free market will ignore solutions that can't turn a profit. Any firm that fails to follow this simple maxim won't be in business for long. The corollary to this maxim is that the free market will ignore any solution that cannot be controlled, either through property interests (enforceable intellectual property, monopoly licenses, etc.) or because economies of scale demand centralized operation. This means that free market innovation is structurally incompatible with a huge portion of the universe of possible energy solutions.

from the diaries (with a portion of the text put below the fold). -- Jérôme


Free markets love non-renewable energy sources because they are readily controlled. In countries where mineral rights are privately owned (only the US and Canada), these resources can be controlled via property rights. In the rest of the world, they can be controlled equally easily through exclusive contracts with governments. But renewable energy presents a serious control challenge to the free market's need to profit.

When confronted with this challenge, the free market attempts to adapt its usual tool, property, to the problem. Take ethanol and other biofuels, for example. This attempted solution to our energy problems can be controlled both through real property (ownership of the farm land that produces the raw materials) and through intellectual property (proprietary distilling processes, patented microbes that convert things to sugars, etc.). Never mind that biofuels provide a suspiciously poor energy return on investment and often require government subsidies, slave labor, or fossil fuel inputs, or that they don't address more fundamental problems like the world's ongoing growth in energy demand, topsoil depletion, or competition between food and energy. They can make money. Is this the best that free-market innovation can provide?

What about solar? The free market is investing huge resources into innovation in this field. Virtually all of it, however, is being invested in proprietary technology for photovoltaics. In other words, property, which can be controlled to produce a profit. Never mind that, while photovoltaics are a great way to produce electricity, they are a very poor way to produce energy (see my discussion on this point). Why does the free market almost entirely ignore the potentially rich conceptual space of passive solar design? Precisely because the obvious value in this area--that of refining and implementing vernacular technologies--cannot be effectively controlled through existing intellectual property mechanisms. If it can't be controlled to produce a profit, then free market innovation is blind to its potential. Never mind that, in my opinion, passive solar design is the single most promising way to meet our future energy needs?

What about conservation? No very sexy, I know, but certainly an effective way to reduce our energy demand. The problem, again, is that the free market has a difficult time profiting off of it. Sure, the free market can innovate something to sell you that will help you conserve, but the actual act of conservation kills profits. I'm not talking about increased efficiency of our energy use (which, as classical economics tells us, lowers cost and frees up the consumer to expend the money saved in consumption elsewhere, thereby increasing the total standard of living--at least when measured as a function of consumption). No, I'm talking about actual conservation--just plain using less. This is anathema to free market economics. The idea that we could use less energy in total, and then invest the savings in non-economic goods such as leisure time or security-through-self-sufficiency, is highly problematic because it causes a cumulative decrease in GDP (leisure time doesn't count as a "product"!). Imagine: "Here's my business plan... I'm not going to sell anything, and when all is said and done, people will us less. We'll get rich!" Sure, the free-market can provide the service of helping people conserve, but that's a bit like a virus that kills its host before it can reproduce...

So, if free market innovation fails in the entire sphere of vernacular-design-based solution, and can't even contemplate conservation-based solutions, then is it really the pinnacle of sustainable energy innovation? There is only one guaranteed result of relying on the free market to solve our energy problems in a world where production from fossil supplies is peaking: its solutions will never free us from energy dependency or energy scarcity. The free market will never produce a solution to this problem where consumers aren't dependent on firms for the product they purchase, because to do so would fail to produce a profit. Similarly, the free market will never have the economic motivation to make energy cheaper (over the long-term)--it would be, by definition, irrational economic behavior to produce energy so cheaply that the total value of the world market for energy goes down.
If that's what you're looking for--depending on someone else for energy that is always getting more expensive--then the free market is your innovation engine of choice. If, however, you'd prefer secure and inexpensive energy, I'd suggest looking elsewhere. Conservation and vernacular-design-based solutions are a good place to start... just don't expect to find much support for this argument, or ideas for conservation or vernacular-design-based solutions, in Main-Stream Media outlets. They have a profit motive, too, and if they can't sell your viewership to others who want to sell you a profit-orriented product, then the story is of no value.

(Note:  this is a cross-post of an article that orriginally appeared at www.jeffvail.net.  It's intended to spark discussion (hopefully)--I'm not claiming that the free-market, or market mechanisms have no value at all, but rather to explore their limitations.)

Display:
Jeff:
Thanks for cross posting. To try to make it worthwhile I'll toss in my 2 cents first.

I think that the need to make a profit is a good guess as to why ideas like consuming less don't make much headway, but this looks at the issue to narrowly. What I've long advocated is consumption substitution. The only thing people really have to spend is time. Then can bank time by working and turning it into money and then using it later, but spending money without reward (or the promise of future reward) is not something that people usually do.

To those who object (citing giving away money to charity, for example) I would say that the rewards purchased don't have to be tangible. Giving away money (and thus implicitly the time it took to earn it) provides some sort of psychic reward.

So if we wish to encourage people to consume less material "stuff" we can compete (and make a profit) by offering alternatives for their time. We have already seen this happening. The developed world now spends a good fraction on intangibles like entertainment, sports and celebration. A typical US family may spend $300+ a month on communication services (mobile phones, landlines, internet access) as well as on subscription TV, radio and movies. The providers expect to make a profit and compete with the sellers of "stuff". Notice that the prices of most of the intangible services are set to compete with the physical ones.

The marginal cost of downloading songs is almost nothing compared with selling a physical CD, but buyers are willing to pay almost the same price for either. They therefore value the service similarly whatever way they obtain it. This gives a competitive edge to the virtual providers. So indirectly they are promoting using less and making a profit.

Sellers of renewable energy may also have a similar model. The windmill makers earn less than does GE with a conventional generator, but they still make a profit and can attract business away from the existing firms. The one area where we have not seen any real progress is transportation. I don't know if this is because the cost of entry into the field is so high or because of anti-competitive regulations (roads get built for "free") or something else. This is a good area where Jeff's conjecture could be further explored.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Tue Mar 6th, 2007 at 10:26:12 AM EST
Welcome to European Tribune, jeffvail!

This excellent diary is interesting because it addresses the central issue of sustainable energy policies and show which are the socio-economic obstacles to the development of new approaches, but also because it illustrates a broader field of issues which I think should be discussed on ET, namely the limitations of market as an efficient coordination mechanism.

I think many of us agree on the fact that market can be an efficient mechanism for certain categories of goods and services, but is inefficient for other categories (like energy).

It would be interesting to develop a debate on the different categories of goods and services and on which are the relevant (market or non-market) coordination mechanisms for these categories.


"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Tue Mar 6th, 2007 at 11:33:13 AM EST
Well, sure. I've argued before that the reason nuke and Big Engineering projects are so much more popular than decentralised micro-generation is partly because they're just plain sexy, and partly - as Jeff points out - that decentralisation threatens the financial and practical control freakery of Wall Street and the City.

Corporations like to have central choke points where they can squat and imbed their fangs, and governments, which are owned by the corporate sector, follow suit.

This makes even more sense when you accept that 'free markets' really means 'Wall Street, the City, and the money markets' and not the more usual abstract textbook idea.

So truly efficient schemes, which combine micro- with macro-generation with off-grid living, are difficult for 'the markets' to accept, because they can't vampirise off them in the usual ways.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Mar 6th, 2007 at 12:59:02 PM EST
[ Parent ]
It's just that it takes you almost as much time to do a $10 million deal as a $1 billion deal, and when you get a 1% income on the deal you're obviously going to want to spend your time on the $1 billion deal...

Don't forget that Wall Street is the only socialist paradize on earth - i.e. the only industry where the workers (erm, the managing directors, at least) grab most of the value added of the deals they make instead of their employers...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Mar 6th, 2007 at 02:57:22 PM EST
[ Parent ]
It is control freakery because once you're in the loop of having to provide quarterly earnings estimates, Wall St can decided whether or not to spank you if you misbehave and don't come up with the profits.

The baseline stops being profitability and starts being growth.

In the real world it should be nonsensical to sell the stock of a company that produces millions in clear profit. According to the Street it's not enough, unless profits increase steadily. And if you have a bad year when they don't - watch out for the knives.

I don't suppose there's any reason why it wouldn't be possible to earn a billion by licensing hundreds of millions of small-scale microgeneration projects, instead of concentrating only on large ones.

In practical terms local, distributed generation, backed by a solid grid, will always be more reliable than a handful of big-ticket mega-deal projects.

If I can run off-grid I don't much care if Russia won't sell me gas because it doesn't matter to me. Multiply that by the millions in the EU and you have huge earnings potential, with decent follow-up potential in on-going maintenance and spares sales.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Mar 6th, 2007 at 04:09:48 PM EST
[ Parent ]
The baseline stops being profitability and starts being growth.

Actually Wall Street is now in a second derivative game. It's not earnings, or earnings increase, but how the earnings compare with "expectations". Since the experts decide what to expect they set the goal posts. Then when earnings figures are released the price varies because of the "surprise".

There have already been some indications that the predictions are being used by insiders to trade before the news comes out. If the experts were really experts and they were consistently "surprised" wouldn't they either lose their job or at least their credibility?

By the way many firms now issue monthly (or in the case of retail, sometimes weekly) figures. This provides so much more opportunity for gambling. The US lotteries have been increasing their frequency as well. I think the Keno game in New York starts every five minutes.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Tue Mar 6th, 2007 at 04:53:01 PM EST
[ Parent ]
local, distributed generation, backed by a solid grid, will always be more reliable than a handful of big-ticket mega-deal projects.

No, it just plain wouldn't.  The behaviour of dynamic systems is complicated and nearly impossible to predict, let alone control.  Try to design an electronic circuit with just a few components and a feedback mechanism if you don't believe me.  After that experience you'll never again talk about circuits with millions of components as being reliable.

by ustenzel on Sat Mar 17th, 2007 at 09:49:57 PM EST
[ Parent ]
There is a deeper issue underlying the point that I was trying to make above, but I'm not sure I can articulate it very well at this point.  That is:

Our understanding of economics, specifically classical liberal economics, is predicated on an environment where the perpetual increase in consumption of resources is possible.

Within such an environment (which did exist in many ways until roughly the present, in my opinion), the growth-based structure of capitalism and the free-market created world where overall wealth could continually increase.  There are arguments to be made about inequity in distribution, but the fundamental notion of 'increasing the size of the pie' worked.

However, it's my opinion that we are now entering (or are about to enter) an economic environment where we can no longer continually increase our consumption of resources without incurring costs that outweigh the value of the additional resources consumed.  

In this second type of environment, I think that many of the fundamental assumptions underlying classical economics no longer hold...

by jeffvail (jsvail@gmail.com) on Tue Mar 6th, 2007 at 03:07:01 PM EST
[ Parent ]
Our understanding of economics, specifically classical liberal economics, is predicated on an environment where the perpetual increase in consumption of resources is possible.

That is not even true. The early "classical liberal" writers starting with Adam Smith all the way through Malthus and Ricardo to John Stuart Mill worried a great deal about "the end state of capitalism" in which the rate of profit decayed, rents increased, and the wages of labour were reduced to subsistence level. The only way out that classical economics could imagine was the creation of new economic sectors. So it's not that classical economics is predicated on that environment: the creators of classical economics did not believe they lived in such an environment, since they saw a problem.

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Tue Mar 6th, 2007 at 03:20:55 PM EST
[ Parent ]
So they were roughly saying "our theories only work up to a limit, and to escape that limit we need a deus ex machina." Is that accurate?

you are the media you consume.

by MillMan (millguy at gmail) on Tue Mar 6th, 2007 at 05:28:47 PM EST
[ Parent ]
They were aware that their theories didn't make sense after a certain point. But they were a damn sight better than the theories before them, which is generally the point.

In fact, as a rule, the greats knew perfectly well the limits of what they were doing. It's the second class idiots that followed on that extrapolated beyond the limits of the theory to get nonsensical results. The originators were often addressing a particular problem: zero-sum thinking being a key one.

by Colman (colman at eurotrib.com) on Tue Mar 6th, 2007 at 05:37:58 PM EST
[ Parent ]
Not exactly. I have been meaning to write a diary about it but 1) I don't have my Adam Smith handy; and 2) I have had trouble pinpointing nice quotable paragraphs by J S Mill. But, in fact, J S Mill did envision ways out of the bleak "end state of capitalism" mostly involving population control and universal education. You see, they were all Malthusian, and they had a lot of common sense and little math, unlike the marginalists that came immediately after J S Mill (and not to speak of the neoclassical twats we got after WWII).

Think also of an analogy with the "heat death of the universe". That was a late 19th-century obsession that I don't think necessarily follows from modern understanding. But that is not to say that the thermodynamics of Boltzmann was wrong: it's the rest of his physics and cosmology that was incomplete. Similarly, I don't think a lot of what the classical economists were saying about the way an economy works was wrong. They just imagined a limited number of possible social/political/economic organisations consistent with liberalism, and except for J S Mill I think none of them saw much hope. In addition, their writings (especially those of Smith and Ricardo) were descriptive, not prescriptive. J S Mill was concerned with ethics and so he read completely differently.

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Tue Mar 6th, 2007 at 06:26:15 PM EST
[ Parent ]
Sounds like the ultraviolet catastrophe or the instability of atoms in 1890's physics. The Deus ex machina came from quantum mechanics. By this I mean that sure, economic theories, like any good model, have a limited domain of applicability. There are three reactions to the "bleak end state of capitalism". One is to postulate a Deus ex machina [the cornucopian view that the market will provide], another is to accept the conclusion and do nothing, and a third is to accept the conclusion but try to imagine changing the premises, which in the case of economics is easier than in the case of physics since human organisation is not a law of nature (though it does operate within them).

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Tue Mar 6th, 2007 at 06:30:42 PM EST
[ Parent ]
Greetings
It's interesting that the Free-market you describe doesn't sound free at all.
by Torres on Tue Mar 6th, 2007 at 12:45:40 PM EST
But the economy now might be evolving to something free, but not a market at all! Only industrial/political elites are gonna share services; all others would have to contribute only to single mega-employers, trying to return credit debts. (Just a hypothesis, as I am still in doom telling mode.)

My take on some freedom matters is here and here (and perhaps here).

by das monde on Wed Mar 7th, 2007 at 03:32:22 AM EST
[ Parent ]
Welcome to European Tribune :).

By definition, intellectual property cannot exist in a free market. Intellectual property is a massive government intervention in the otherwise free market, it kills lots of freedom for nearly everyone, and for a very dubious gain.

And as you noticed, the mere presence of IP changes the behaviour of market participant and makes them engage into grossly inefficient pathes.

I don't know if free markets are a solution here, but what you're observing is nothing near a free market because of IP.

Mandatory quote:


    Just to illustrate how great out ignorance of the optimum forms of delimitation of various rights remains - despite our confidence in the indispensability of the general institution of several property - a few remarks about one particuilar form of property may be made. [...]

    The difference between these and other kinds of property rights is this: while ownership of material goods guides the user of scarce means to their most important uses, in the case of immaterial goods such as literary productions and technological inventions the ability to produce them is also limited, yet once they have come into existence, they can be indefinitely multiplied and can be made scarce only by law in order to create an inducement to produce such ideas. Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopaedias, dictionaries, textbooks and other works of reference could not be produced if, once they existed, they could freely be reproduced.

    Similarly, recurrent re-examinations of the problem have not demonstrated that the obtainability of patents of invention actually enhances the flow of new technical knowledge rather than leading to wasteful concentration of research on problems whose solution in the near future can be foreseen and where, in consequence of the law, anyone who hits upon a solution a moment before the next gains the right to its exclusive use for a prolonged period.

    The Fatal Conceit: The Errors of Socialism, 1988 (p. 35) Friedrich von Hayek

by Laurent GUERBY on Tue Mar 6th, 2007 at 02:49:23 PM EST
Laurent:

I certainly prefer your definition of "free market" as one without IP, but it doesn't seem to be the definition that is proffered by the Main-Stream Media.  I'm not arguing that you're correct, just that message we're being fed is that our economic success hinges on secure property rights, especially including IP (just pick up any issue of The Economist!).

I've even written that free access to information can benefit the most closed-informatio-access organizations:  the government functions of military, security, and diplomacy.

Open Source Warfare

So I agree, restricting the use and access to information is certanly contra to the notion of "freedom," but it seems to be included in the "approved message" for how a free-market economy works.  The providers of that message seem to enjoy trotting out quotes from the likes of Hayek or Mises when it suits them, while conveniently ignoring critical parts of their theories...

by jeffvail (jsvail@gmail.com) on Tue Mar 6th, 2007 at 03:17:05 PM EST
[ Parent ]
Oh I fully agree with your observation on MSM on this topic, but that's not a reason not to point out the obvious manipulation.

Economist Dean Baker reminds us of this often on his blog Beat The Press, see here and here.

In particular "free trade" agreements are everything but "free".

by Laurent GUERBY on Wed Mar 7th, 2007 at 02:26:28 AM EST
[ Parent ]
"Approved messages" can be countered, or not?

For example, if I remember well, 10 years ago the word "populism" meant politics appealling to simplistic way of social life (with lower taxes, less public involvement, or mpre nationalistic). Now this word is used in the media with exactly possitive meaning.

by das monde on Wed Mar 7th, 2007 at 03:14:32 AM EST
[ Parent ]
top-notch diary, welcome to the funny farm, jeff.

you did a great job laying out your message, excellent communication, signal nice and clean.

this is the impasse, the choke point as brit calls it.

(so descriptively....squat and embed fangs indeed....)

THIS is why progress is treacle-slow, and why pure market-based solutions have passed their sell-by date.

the rational/materialist worldview presupposes a lot of givens that are being taken away, the trough is emptying, but the pigs know only one position....heads down and grub...

we need a radically different, worldwide acknowledgment of the blindingly obvious: what worked no longer does.

waiting for bought governments to see the light, when it disempowers their very raison-d'etre, is like to be a long haul, yet how long is dependent solely on how many of us can wake up and start walking the other direction, spreading the 'good news' that alternatives exist at all.

the public needs to come out of doze-mode and realize what a bill of goods it's been sold, and diaries like this need to be disseminated more widely, a welcome wake-up call.

you've put your finger squarely on the nexus of the problem, imo.

it behooves us to get on it as individuals, reducing our footprints, and rally for justice and change, notwithstanding the incredible array of vested interests in delaying the shift as much as they can.

they are brainstorming like crazy trying to figure out ways to keep us in the dark, and paying through the nose for what should be as widely distributed-at-near-cost as air, water, sanitation and broadband.

so we need to do the same...

you sure came to the right blog, this perspective has been under-emphasized around here, and fairly frequently drowned out by some who believe conservation to be irrelevant, and shiny new nukes the panacea.

when you track back the propaganda to its multinational source, it's pay-nfully plain to see why there is pooh-poohing of alternative energy as meaningful contribution, and disparagement of conservation, ala shooter cheney.

remember how they were telling us from the 80's on how solar was 'impractical', meanwhile the panels are popping up everywhere except where they would help consumers lower their bills....traffic signals, buoys, space satellites etc etc.

 uh-huh...

corporate conscience....owes no allegiance to humanity, decency, honour or compassion, just zeros digitizing on monitors somewhere.

homicidal greed masquerading as civilised behaviour-

and the longer this tragi-farce continues, the sharper and harder the fall.

so thanks for this bracing cuppa java...

i look forward to more of your diaries, a very auspicious start.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Tue Mar 6th, 2007 at 04:40:17 PM EST
Hmmm ... need to reflect on this. I think, however, that passive solar fell to the wayside for architects/builders because the culture became focused around man's domination of nature rather than living with nature.  

Just as with HVAC systems, they could ignore the passive solar aspects with impunity since technology (and cheap fossil fuel) could overwhelm the inadequacies of the passive solar design.

And, it was cheaper for mass home developers (tract homes in the United States, developments in Europe (apartments or otherwise)) to simply ignore the environment as they laid out the streets/such.  Again, power would enable overwhelming how badly they were designed.

Blogging regularly at Get Energy Smart. NOW!!!

by a siegel (siegeadATgmailIGNORETHISdotPLEASEcom) on Tue Mar 6th, 2007 at 06:29:53 PM EST
I still suspect there is a Veblenesque aspect to housing design;  very wealthy people in olden days had big houses with lots of windows in open parklands.  It was a way of displaying wealth and power:  it said I can afford glass (which was expensive back then when energy was closer to true-cost accounting), I own or command enough woodlot to heat this sprawling pile, I am powerful enough and the local elite is powerful enough to impose order so that I need not fear my neighbours, the peasants, or invaders, and I do not need to raise food because I command tribute from others, so my grounds are given over to unproductive lawns and decorative plantings (in the front anyway).  and I command enough labour to keep my grounds immaculately manicured.  the home farm and the kitchen garden were discreetly hidden, like the ha-has which discouraged trespassers without being an unsightly barricade.  and that aesthetic, watered down, Taylorised, adulterated, plasticised, is the suburban ideal.

the elite define our aesthetics over long periods of time, as do antiquated standards.  a passive solar home with its strategically situated windows looks "weird" to most people;  in many suburbs the neighbours will complain if you grow veg anywhere visible from the street;  we are still hooked on home designs whose very appeal is their nose-thumbing stupidity and inefficiency, and tend to look down on anything small, efficient, or productive because it looks "peasanty".  American high school kids learn to call the metro bus the "loser cruiser".  American hate-radio jocks "joke" that all cyclists are fags.  and so on.

anecdote...  I was attending the SPIE conference in Glasgow a few years back (they made me go, I had a poster).  on the shuttle bus from airport to ghastly convention centre there was a predictable concentration of US science geeks.  two were sitting directly in front of me, commenting on the city sights.  "Wow," said one, "look how small the cars are!"

"Yeah," said his companion.  "The UK, it's like a third world country these days."

In other words, having large wasteful cars is a sign of wealth and power;  the more wasteful the more prestigious.  Having small cars is a sign of second-class status, loss of prestige.  Conspicuous consumption.  This is going to be a hard cultural nut to crack, the anti-potlatch of deliberately wasting resources to nobody's gain, just to show off rank and status.  The anti-gift economy.  The overwatered golf course and uncovered swimming pool in the desert states.  The AC keeping the homes and cars in the Sun Belt so cold that people wear sweaters indoors (no kidding).  The 5000 sf trophy home in the carburb.

now we are back to the smallness of iPods and how to make elegance and efficiency attractive -- for those who are somehow colourblind or tone-deaf to their inherent, bewitching attractiveness :-)

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Tue Mar 6th, 2007 at 09:27:53 PM EST
[ Parent ]
This is going to be a hard cultural nut to crack, the anti-potlatch of deliberately wasting resources to nobody's gain, just to show off rank and status.

We'll need anthropologists for this one, but perhaps this is a cultural nut which can't be cracked, because we're still wired in the way of apes and want to pile up our hoarded bananas for all to see to gain an evolutionary advantage... Short term advantages all too often dominate over the long term disadvantage in evolution patterns.

by Nomad on Wed Mar 7th, 2007 at 01:43:28 AM EST
[ Parent ]
When the potlach stakes get high enough, don't they go as far as to burn the stuff?

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Wed Mar 7th, 2007 at 01:55:44 AM EST
[ Parent ]
I would have to go retrace some reading pathways from a decade and more ago, but my memory suggests that the "burning" potlatch was only observed after Anglo conquest of the Pac NW and sustained attempts to wipe out the first nations' languages, religions, and cultural patterns.  the ethnographer whose book I was reading at the time was of the opinion that the "burning potlatch" was a debased or corrupted form, inspired by the despair of the tribes as their land was stolen, their children forcibly taken from them and "re-educated", their sacred sites demolished or profaned, etc.   s/he read it as similar to the self-immolation practised by some Asian peoples as the ultimate statement of shame, grief and rage after defeat by an overwhelming force.

the destruction or sealing-away of goods in an intact culture is iirc more strongly associated with organised hereditary kingship, like the grave-goods of the pharaohs.  he who dies with the most toys tries to take them with him into death, selfishly ensuring that no one else will have any use or benefit from them.

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Wed Mar 7th, 2007 at 03:54:20 PM EST
[ Parent ]
Short term advantages all too often dominate over the long term disadvantage in evolution patterns.

It's the friggin' discount rate.

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Wed Mar 7th, 2007 at 01:59:06 AM EST
[ Parent ]
hoarding bananas seems like a nonstarter, as they rot rather quickly in the climates where they grow naturally :-)  actually one of the synergistic processes by which we went from share/gift economy to hoarding might be found in the transition to hard grains, which can be stored for multiple seasons and remain edible...  this makes hoarding a worthwhile activity...  whereas hoarding your recently killed ground squirrel, juicy grub, or ripe fruit makes no sense.

has hoarding behaviour actually been observed among the apes?  I know that "exchanges" and gifts are well documented, with apes using gifts to sweet-talk their way into a new band or while courting a potential mate;  but hoarding I haven't read about.  the real shocker for me, a couple of decades ago, was publication of field observations of what looked like a lineal transmission of apparent status among macaques in Asia, i.e. the daughters of dominant females tending themselves to become dominant females.  hereditary ranking -- afaik -- has not been much observed in mammals.

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Wed Mar 7th, 2007 at 03:47:35 PM EST
[ Parent ]
It's even worse... As it doesn't limit to suburban houses but to most buildings.
If you take time to look at most "high level" architecture contests, you'll find that power/wealth vs efficiency gap !
Some french cities mayors want to build offices buildings to lure companies to come and hire local labour... As with a wooden duck on the lake for the hunter!

The nut is even harder to crack as information and education is often biased...!

"What can I do, What can I write, Against the fall of Night". A.E. Housman

by margouillat (hemidactylus(dot)frenatus(at)wanadoo(dot)fr) on Wed Mar 7th, 2007 at 08:19:14 AM EST
[ Parent ]
I was thinking later on that the brick shape of so many FUVs is another nose-thumbing idiocy: I have so much horsepower that I don't need to be aerodynamic.  the very shaoe of the vehicle conveys conspicuous waste.

reminds me of the old macho joke told by chopper pilots:  Airplane pilots fly;  Helicopter pilots just beat the air into submission.  a dense clusters of memes there about dominance, violence, masculinity defined as brutal force, power and status weirdly displayed by inefficiency and "doing it the hard way".  the valuing of brawn over brains :-)

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Wed Mar 7th, 2007 at 03:39:38 PM EST
[ Parent ]
actually the iPod is a bad example of efficiency because of its notorious failure rate, which wins it special mention in Slade's book Made To Break.

In Made to Break: Technology and Obsolescence in America, the Richmond, B.C.-based author explains in painful detail why cast-off cell phones -- and countless other products and electronic devices, from pocket calculators to PCs -- are quietly creating the largest toxic waste stream the world has ever known. The situation is bad, and in three years' time, he notes, it's about to get much worse.
Tyee's new Blog Roller series

To be clear, Made to Break is not a book about e-waste. (There are several of those out there, including Elizabeth Grossman's excellent High Tech Trash.) Rather, it is a meticulous history of planned obsolescence -- the practice of engineering or designing products in such a manner that they become either socially undesirable or non-functional after a given time period. Under the banner of "innovation." Slade argues that this technical and psychological obsolescence -- and the parallel phenomenon of disposability -- have over the course of a century become so ingrained in western consumer culture that our very economy depends on it to survive. [...]

Disposability was first created with paper clothing products, like paper shirt-fronts, collars and cuffs. You'd take off your shirt collar at the end of the day and stick it in the stove, and it was gone. It was only later that metal watches and Gillette razor blades started going into landfills. Once disposability was invented, then planned obsolescence could occur. We had invented mass production, and we had to feed the machine -- we had to get people to buy new stuff -- and obsolescence emerged as the answer.  [emphasis mine] Waste was simply the after-phenomenon.

By 2009, the FCC [the U.S. Federal Communications Commission] will have mandated the complete change from analog to digital television. All the older TVs have cathode-ray tubes that contain maybe five to 10 pounds of lead. Television enjoys a 95 per cent market penetration in the United States, which would mean that, conservatively, there are about 300 million of them out there in living rooms and dens and basements. And they are about to be chucked. The sheer amount of toxic lead that is about to enter the waste stream is simply going to overwhelm it -- there are not enough container ships to send these obsolete televisions off to Asia where they can be broken up safely. This is a massive biohazard that is about to enter America's groundwater. And it is going to happen because electronic manufacturers lobbied the FCC to mandate digital TV. The problem for them was, there is not enough obsolescence in the television market; they are built to last five to seven years. That was too long.

Steve Jobs came out recently and pretty much admitted that the iPod should be thought of as a disposable product. It is a slick, sleek thing, and you would never consider that it comes from a fundamentally dirty industry. In fact, the amount of toxins that go into an iPod is enormous. There are more than 68 million of these things out there, and they are full of cadmium, beryllium and lead. And Apple has deliberately created them so they only last a year. The company has a voluntary take-back program, but how many people use it? They won't say. I am hugely personally disappointed in Steve Jobs. He turned into Darth Vader. [...]

I would like to point out that the highlighted passage vindicates or underscore's Hornborg's comments on the investment trap of core technomass, which I've applied in other threads to e.g. overcapitalised factory trawlers.  some technology is so expensive, and so "efficient," that it can only "pay for itself" if it runs at maximum duty cycle.  the owner cannot "afford" to shut it down.  

we have to feed the machine because if it stands idle we are losing money -- failing to pay the interest on the massive loans needed to pay for the huge buy-in cost.  the technology, and the financial model (compound interest finance capitalism plus mass production, automation and cheap fossil fuel) creates a finger-trap that the owner cannot get out of w/in the rules of the capitalism game.  we have to shovel raw materials into the machine -- converting harmless substances to harmful ones, potential energy to dissipated and irrecoverable energy, living things to dead ones -- constantly and (thanks to the growth model necessary to support the compound interest fantasy) at an accelerating rate.

in other words, it doesn't matter if we create nifty, small, light, low-energy technologies;  if we continue to render them obsolete w/in 12 to 18 months in order to keep the machinery of production from idling, there will be no meaningful slowdown in our resource or energy consumption.  traditionally the amount of energy needed to manufacture a consumer product was vastly exceeded by the energy it consumed in a long functional lifetime;  with modern disposable gizmos it may very well be that making them more energy efficient doesn't make that much difference, since the bulk of energy dissipation and toxification happens during the manufacturing and disposal process -- the product lifetime is so short that its own energy consumption is almost irrelevant.

so... it's not sufficient to produce nifty/energy-parsimonious consumer technology, ni matter how small and kewl;  it also has to be fully remanufacturable or recyclable at lower energy cost than fab from raw, and it needs to last longer.

and that means revising the whole capitalist model;  the notion of "having to" keep the assembly line running in order to protect the rentier's investment -- even if this means a spectacular waste of resources and drives perverse dogwaggery in the form of "demand creation" (with all the intrusion, privacy invasion, pollution of the memescape and other side effects of blitz advertising that groups such as Adbusters document so well) -- is just plain absurd.

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Wed Mar 7th, 2007 at 08:06:28 PM EST
[ Parent ]
by das monde on Thu Mar 8th, 2007 at 06:35:00 AM EST
[ Parent ]
and that means revising the whole capitalist model;  the notion of "having to" keep the assembly line running in order to protect the rentier's investment -- even if this means a spectacular waste of resources and drives perverse dogwaggery in the form of "demand creation" (with all the intrusion, privacy invasion, pollution of the memescape and other side effects of blitz advertising that groups such as Adbusters document so well) -- is just plain absurd.
Price the resource waste appropriately and the rentier will shut down the plant and take the loss.

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Thu Mar 8th, 2007 at 06:38:25 AM EST
[ Parent ]
I suspect that if we price the resource waste appropriately, capitalism comes to an end -- since its whole function is to accumulate profit based on the externalising of costs and the liquidation of resources.  if that externalising is  forbidden and the resources are priced fairly instead of being extorted, looted, or undervalued via fraud or cartel price-fixing, then the whole house of cards collapses;  margins revert to what we might call the "solar growth rate" of 3 or 4 percent per annum not compounded, and accumulation is no longer possible on the scale which supports the rentier culture.  or so I read the tea leaves.

The difference between theory and practise in practise ...
by DeAnander (de_at_daclarke_dot_org) on Sun Mar 11th, 2007 at 02:49:56 PM EST
[ Parent ]
container ships to send these obsolete televisions off to Asia where they can be broken up safely

Yeah, sure. If only...

Enforcement of no-pollution and health safety laws in China and India being what it is, that safely is absurd...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Thu Mar 8th, 2007 at 10:43:09 AM EST
[ Parent ]
"safely" in this case means "not in my back yard," or "no affluent Anglo people get hurt."  the displaced peasants picking over mountainous toxic waste dumps in Asia are considered disposable labour, as Larry Summers so bluntly pointed out years ago in his infamous memo -- "the economic logic is impeccable."  I am reminded that psychotics are also rigidly logical, within the skewed coordinate system of their own private reality.

The difference between theory and practise in practise ...
by DeAnander (de_at_daclarke_dot_org) on Sun Mar 11th, 2007 at 02:45:34 PM EST
[ Parent ]
Interview with Chris Jordan, art photographer, on his "Intolerable Beauty" series.

one of his images:  discarded cell phones.

[...] beauty is a powerfully effective tool for drawing viewers into uncomfortable territory. If I took ugly photographs, no one would want to look at them. My hope is to draw the viewer in with the intricate details and colors, and maybe the image will hold their attention while the deeper message seeps in. Many photographers have used beauty in this way. It's like slipping a note under the castle door.

The strange combination of beauty and horror for me also serves as a potent metaphor for our consumerism. When you stand at a distance, consumerism can look pretty attractive -- all the nice shiny cars and houses and clothes and plasma TVs and so on. But when you get up close and look at our overworked dysfunctional families, the waste streams of our products, the wars our greed is fostering, worldwide environmental degradation, toxic metals in the breast milk of Eskimo women, birth defects in the children of the mothers who assemble our electronics in China, then you start to see that our consumer lifestyle is not so pretty. I try to create this effect in my photos, where it looks like one thing from a distance and then up close you realize it is something else.
[...]
I am frequently surprised by how little negative feedback I get for my criticism of the American way of life. Maybe it is because we all know it is true: that we are living insane lives governed by materialism and greed. Or maybe the lack of resistance is a reflection of the depth of our denial. When I exhibit my work and talk about our rampant consumerism, no one ever seems to think I am talking about them.

Talking to Americans about consumerism is like talking to someone with an alcohol problem. Our culture is in deep denial about what we are doing to our planet, to the people of other nations, and the people of the future. And maybe the biggest tragedy of all is that we are in denial about how our consumer lifestyle is sapping our own spirits. We are slowly killing ourselves, and we all feel it. We know we are somehow getting screwed, that all this stuff isn't really satisfying, that we have lost something sacred that is related to the very core of our selves. But still we don't act. Instead we get in our BMWs and drive to our skyscrapers and shuffle our papers for all of the best hours of the best days of the best years of our lives so we can afford our new kitchen remodel.
[...]
I wish I could wag my finger self-righteously about everyone else's consumerism, but it doesn't take much self-reflection to realize I'm right in there myself. Not only do I benefit in a hundred ways from our consumer society every day, but my artwork is a direct part of it, and that is how I make my living. My printing process requires rolls of paper, gallons of ink, electricity, and so on. When I drive or fly somewhere to talk about my work, I contribute to the global warming that I am trying to fight against. And despite my efforts, sometimes I cannot resist buying cool stuff. Those new iPods are bitchin' and I want one. One thing I try to do is look at our consumer society from within, instead of preaching as if I were an outsider. One alcoholic in a family of alcoholics can speak up, as long as they don't do it in a finger-pointing kind of way.

[quotes elided and rearranged by me]


The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Mon Mar 12th, 2007 at 06:47:56 PM EST
[ Parent ]
Great link thanks.

Lots of interesting images here:

http://www.artnotoil.org.uk/gallery/v/2006/gas+works+-+Carolyn+Stubbs.jpg.html

Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Mon Mar 12th, 2007 at 07:27:01 PM EST
[ Parent ]
It is amazing how much we expect from the free market alone. It must run all civilization, all the wealth of the world, nothing else.

The free market is indeed a powerful beast. But is is a wild beast. Why let it run untamed? Why must we depend on the way it spins? Why can't it be directed to most helpful turns?

I think the free market can accomplish for us much more if we not just react to its moods, but decide what purposes we must achieve more urgently. I do not mean that the government has to try hard. But if there is a foresight of more contructive and/or less wasteful market direction, is it responsible to wait? Especially in dealing with environmental and energy issues, we need more than moderation of greedy impulses; the best hope is to employ ingeniously the power of the market beast and compel people to act sensibly out of handy convenience.

I believe, for example, that the markets might even run health care, but with a discipline engineered for common benefit. I have a specific proposal for public transportation. I believe that the idea is already commercially viable and gradually implementable. But if it does not look profitable safely enough, a government may reasonably offer initial assitance. The particular transporation project alone does not bring CO2 emissions down to exemplary levels; but it may diminish substantially the ammount of gas unnecessary burning in traffic jams. People have to see that something is possbile!

by das monde on Wed Mar 7th, 2007 at 03:06:02 AM EST
I have ZERO hope that a "market" economy will ever produce the technologies necessary for a solar-powered society?  Why?

Because I have serious interest in the history of American aerospace.

Let me explain.

In a burst of pure genius, the airplane was invented by two Americans.  This was a private self-financed venture.  The Wright brothers were businessmen and looked to make a killing in airplanes.

Yet by 1916, the American aircraft industry was almost hopelessly behind the French and Germans.  Of course, much of this could be attributed to military spending but the fact is that both governments had jumped in with both feet almost as soon as it was clear that the airplane actually was possible.

Why is this important?

Simple.  Building airplanes is simply much too complicated to turn an immediate profit.  It requires years of expensive engineering and research. It requires patient capital.  It requires a working atmosphere where making ANY return on investment is regarded as foolish.  It requires cost-plus contracts because when inventing something new, anyone who tells you how long it will take or how much it will cost is, at best, a storyteller (liar is more accurate.)  

What does this have to do with a solar economy?

We do not have a solar economy for a very simple reason.  We don't know how to do it.  And unlike the promises of the "50 easy ways to save the world" types, building a solar economy will be VERY, VERY difficult, not to mention VERY, VERY, VERY expensive.  

The idea that such a project can be financed through the private sector is beyond insane.  A typical bond trader buying and selling the same financial instrument within a few minutes pretty much eliminates the possibility of "patient" capital.

But what about our hero Jerome??  Doesn't he prove that bankers are finally getting on board with investments in windpower?

Yes he does.  But keep in mind two important things here.

  1. Wind power is the low-hanging fruit of the solar economy.  People have been making money using wind power since the days of Rembrandt.  Not exactly financing untested concepts here.

  2. Go a site like Vestas--one of the big players in wind power.  Included at the site is a history of the sort of wind turbine they build.  This history is over 100 years old!!!!!  A LOT of "non-profit" effort over the years went into learning how to build turbines reliable enough to be a part of the electrical grid AND be cost effective enough so a regular banker will invest.
http://www.vestas.com/vestas/global/en/Wind_power/Discover_the_unique_power_of_the_wind/DUPOW.htm
(you must have Flash installed to play it)

The so-called "markets" are ONLY designed to finance the solar conversion AFTER all the research and development is already DONE.  But since we do not know how to build a solar economy, the KEY economic question is how we finance this R and D.

Until this question is answered, the solar economy simply will not be built.

I wrote a whole book on this subject.  Find out more at:
http://www.elegant-technology.com/DFbase.html


"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Wed Mar 7th, 2007 at 09:35:34 AM EST
The first successful planes may have been built by the Wright brothers, but the invention was pretty much about to happen in France and the rest of Europe ; and faster innovation in Europe might be attributed to a network of builders, in competition but also emulation and cooperation...

It's a good thing there wasn't any IP on the first plane...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Wed Mar 7th, 2007 at 12:18:39 PM EST
[ Parent ]
You are right about the French.  In fact, because the Wrights were so secretive, the French thought they had invented the airplane.  And in the early days, the French aviators were self-financed.  Even so, airplanes did not become something more than toys until governments got involved--even in USA.

As for IP on the first plane.  There was.  In fact, one of the things that so crippled early American aviation was the long, bitter, and expensive patent fight between the Wrights and Glenn Curtiss.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Wed Mar 7th, 2007 at 02:11:35 PM EST
[ Parent ]
Bankers are financing windpower because there has been violent interventionism in the markets for years to make it a profitable venture (guaranteed feed-in tariff for wind power producers and the like).

It's only very recent that wind power has become almost price competitive on a stand alone basis - and it's been made possible by the effects of scale created by early subsidies to get the industry going. Those governments that did it first got to keep the manufacturing capacity. The same is happening with solar.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sat Mar 10th, 2007 at 07:17:51 PM EST
[ Parent ]
There are lots of businesses that by their nature are not "scaleable".  They tend to be local businesses, as opposed to national or global.  Generally healthcare is local, in the sense of delivery of healthcare.  So your normally find that general practice physicians, internicists, etc. are sole proprietership or partnerships.  They don't lend themselves to bel global businesses.  (On the other hand, people that make the products, or drugs used by these businesses, or often regional, national or global.  Because the products can be sold more broadly, and there are economies of scale, ability to innovate across markets, IP as you suggest.)

The same with lawyers.  Many types of consulting or local, though certain specialty areas of consulting have gone national or global, like strategic  consultants.  but there are also many local, state, or regional strategic consultants.

Why does the free market almost entirely ignore the potentially rich conceptual space of passive solar design? Precisely because the obvious value in this area--that of refining and implementing vernacular technologies--cannot be effectively controlled through existing intellectual property mechanisms. If it can't be controlled to produce a profit, then free market innovation is blind to its potential. Never mind that, in my opinion, passive solar design is the single most promising way to meet our future energy needs?
I'm wondering what the right business model would be for this.  Would this really even be a standalone business?  or would it be integrated into architectural firms--many of which are themselves local, or regional,,,,some have gone national or global.

and is there really a market need, as perceived by the customer, right now?  when you build a house, how big of an issue is this to the person building the house.  I am building a small home, and these issues have come up.  they are probably something like 5% of the total issues you confront when building a house--wild guess, hard to even think that way.  we're using an architect and general contractor, and these issues came up, we looked at alternatives and made decisions.  Specialists on window design, green roofs, types of heating systems were appropriately consulted.  so I guess from my standpoint as a consumer, it seems the market did provide the answers.

what is your idea, just taking this area of passive solar, that would better address the needs of consumers?--either in a free market system, or some other kind of system?

by wchurchill on Wed Mar 7th, 2007 at 04:54:03 PM EST


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