Barry Commoner's Four laws of ecology:
1. Everything is connected to everything else.
2. Everything must go somewhere.
3. Nature knows best.
4. There is no such thing as a free lunch.
From The Closing Circle: Nature, Man, and Technology, 1971.
Thursday, August 31, 2006
Thursday, August 24, 2006
Ecosystem of globalization - research proposal
I assembled a research proposal on the "ecosystem of globalization", using the concept of "ecological revolution" to test the idea of globalization as an "epochal shift." The research proposal was done as, well, as homework for a research methods seminar; the quantitative research was never done, but I did do a paper, or two papers out of the literature review ("Speculative capital and the ecosystem of globalization", a longer, more rambling piece, and a condensed version, "The ecosystem of globalization").
I tried to think about how one identifies an "ecological revolution", in order to know if the investigation would show that there is an "ecosystem of globalization" emerging. I proposed looking at the environmental impact of three (speculative) financial structures associated with globalization; and assessing them according to seven categories. Here's the section that laid out my criteria:
[See the proposal for the references]
jd
I tried to think about how one identifies an "ecological revolution", in order to know if the investigation would show that there is an "ecosystem of globalization" emerging. I proposed looking at the environmental impact of three (speculative) financial structures associated with globalization; and assessing them according to seven categories. Here's the section that laid out my criteria:
Categories for assessing ecosystem impact
Non-human categories (after Simmons, 1996)
(1) Biological productivity: A significant change moves the ecosystem from one type to another, where types are identified as forest; woodland, grassland or savannah; desert; cultivated land; urban; other terrestrial. The rationale is that each of these ecosystem types has a distinct net primary productivity (Simmons, 1996), and a shift from one ecosystem to another indicates a shift in biological productivity.
(2) Population dynamics and diversity: A significant change includes the removal of a keystone species, a key engineer species, or extinction, e.g. associated with unique habitat loss.
(3) Stability: A significant change is indicated by a potential change in (1) or (2).
Human-nature categories (after Merchant, 1989)
(4) Production process, including economic productivity: A significant change in the production process is indicated by a new form of motive power or central technology (e.g., the steam engine, the microchip (Davis, 2000))
(5) Social reproduction process: A significant change in the reproduction process is indicated by new productive relations.
(6) Property forms: A significant change in property forms is indicated in types of ownership or a changed the relationship of the owner to the thing owned. E.g., significant changes include a change from common ownership to private ownership, or single owner to corporate ownership, or tenant owner to absentee owner.
(7) Consciousness (representations of nature, narrative, ways of thinking about nature): A significant change in consciousness is indicated by a change in narrative (e.g., from progressive to declensionist, or declensionist to recovery), or change in valence (a role or character reversal, e.g., from nature as Eden to nature as vengeful), or a change in mode of participation (e.g., from subject-object to partnership) (Merchant, 1995).
For example, one identified impact of timber REITs is an increase in land ownership turnover (Block and Sample, 2001; Hagan, Irland and Whitman, 2005). After examining the impact of turnover, timber REITs might be categorized as:
-- signficant to stability (3) (e.g., rapid turnover has the potential of leading to clear-cutting or parcelization that leads to a change in ecosystem type or habitat loss), property forms (6);
-- insignificant to population dynamics and diversity (2) (i.e., some insignificant change is expected), (7) owners' and local inhabitants' way of thinking about the forest;
-- not applicable to biological productivity (1), economic productivity (4) and social reproduction (5).
In the case of land turnover, the applicable effects might be deemed to be relevant at the local and possibly regional level, but not at the global level.
[See the proposal for the references]
jd
Tuesday, August 22, 2006
Dialectical materialism
An addition to the Wikipedia entry on dialectical materialism:
New discoveries in physics (including x-rays, electrons, and the beginnings of quantum mechanics) challenged previous conceptions of matter and materialism. Matter seemed to be disappearing. Lenin disagreed:
Lenin was following on from the work of Engels, who had noted that "with each epoch-making discovery even in the sphere of natural science, materialism has to change its form." (Ludwig Feuerbach and the End of Classical German Philosophy.) One of Lenin's challenges was distancing materialism as a viable philosophical outlook from what he referred to as the "vulgar materialism" expressed in statements like "the brain secretes thought in the same way as the liver secretes bile" (attributed to 18th century physician Pierre Jean Georges Cabanis, 1757-1808); "metaphysical materialism" (matter is composed of immutable, unchanging particles); and 19th-century "mechanical materialism" (matter was like little molecular billiard balls interacting according to simple laws of mechanics). Lenin's (and Engels') solution to this challenge was "dialectical materialism", where matter was understood in the broader sense of "objective reality" and consistent with new developments in science.
New discoveries in physics (including x-rays, electrons, and the beginnings of quantum mechanics) challenged previous conceptions of matter and materialism. Matter seemed to be disappearing. Lenin disagreed:
'Matter disappears' means that the limit within which we have hitherto known matter disappears and that our knowledge is penetrating deeper; properties of matter are disappearing that formerly seemed absolute, immutable and primary, and which are now revealed to be relative and characteristic only of certain states of matter. For the sole 'property' of matter with whose recognition philosophical materialism is bound up is the property of being an objective reality, of existing outside of the mind.
Lenin was following on from the work of Engels, who had noted that "with each epoch-making discovery even in the sphere of natural science, materialism has to change its form." (Ludwig Feuerbach and the End of Classical German Philosophy.) One of Lenin's challenges was distancing materialism as a viable philosophical outlook from what he referred to as the "vulgar materialism" expressed in statements like "the brain secretes thought in the same way as the liver secretes bile" (attributed to 18th century physician Pierre Jean Georges Cabanis, 1757-1808); "metaphysical materialism" (matter is composed of immutable, unchanging particles); and 19th-century "mechanical materialism" (matter was like little molecular billiard balls interacting according to simple laws of mechanics). Lenin's (and Engels') solution to this challenge was "dialectical materialism", where matter was understood in the broader sense of "objective reality" and consistent with new developments in science.
Sunday, June 11, 2006
The ecosystem of globalization
"The ecosystem of globalization" is a condensed version of my "Speculative capital and the ecosystem of globalization" paper. The new paper focuses on globalization and the environment in general, and has a lot less detail on speculative capital.
jd
jd
Tuesday, June 06, 2006
Speculative capital as dominant sector
The concept of a "dominant sector" of capital is based on the idea that power is not distributed evenly throughout a class. One or more sectors may contest for political control; political control provides that sector with the ability to re-align, or even reorganize the economy through government spending, tariffs, taxation, law enforcement, military action, regulation and all of the other instruments of political power.
While wealth is the basis, ultimately, of capitalist power, more important is the control of wealth. This was implied by Lenin in his definition of finance capital as the merger of industrial and bank capital under the control of the banks. This distinction is important because, although finance, and in particular, speculation, does not produce value, it may control the sectors that do, and through that control, dominate (in the sense of setting the political agenda) the class and the economy. Here is an attempt to answer some questions about the concept of "dominant sector" today.
First, how does speculative capital come to be the dominant form of capital in the age of electronics? It does this by coming to control wealth.
1. Globalization (transnationalized production) requires hedging in order to maintain a stable production environment. Hedging is the participation in speculative capital markets to protect assets. Speculative capital comes to control larger pools of capital as a result.
2. Idle money is not capital (it is no longer being used in the self-expansion of capital). Banks historically have provided a way of keeping that money working as capital, by taking the industrialists money and lending it to other industrialists. The faster that money can be loaned out, or, if speculated with, the faster and cheaper and more frequent the transactions, the busier and more profitable that capital can be. Because modern speculation is based on digital networks operating at nanosecond speeds, modern speculation allows that capital to always be active in financial trading. And because of this hyperactivity, the opportunity for additional profit exists, attracting capital to speculation. (This profit is not generated by speculation per se, rather it is re-distributed from producers of values to speculators. Speculative capital attracts and accumulates surplus value produced elsewhere in the economy.)
3. Speculative capital offers a means of gaining a higher return on investment, so money flows into speculation and speculative capital comes to control more wealth. Capital seeks the highest return on investment. In a period of low interest rates, low rates of return, and large pools of money capital (it can't be invested in current production techniques because, with the productivity of robotics et al, investment in production will only flood the market with commodities), companies put that money to work in speculation. As financial observer James Grant said in the recent (6/12/06) Business Week article, "The world is stretching for return."
4. Within the financial sector, speculative operations are more profitable, causing a shift in the focus and activity of finance capital. The tail comes to wag the dog. "Investors argue that trading is booming now while most traditional banking businesses are languishing. Big firms can no longer subsist on underwriting or stock and bond trading as the combination of more rivals and cheap electronic trading drives down profit margins. 'Wall Street doesn't get paid to not take risk anymore,' says Merrill Lynch & Co. financial-services analyst Guy Moszkowski." (6/12/06 Business Week).
5. Through leverage, speculative capital controls sums of capital far in excess of actual holdings. Leverage is basically borrowing money to invest.
According to a Business Week chart (from the 6/12/06 issue), every $1 of major security firm equity controls $18 of assets. This underestimates the reach of speculative capital though: When the hedge fund Long Term Capital Management's troubles became public in 1998, its leverage ratio (that is, the amount of the capital it was investing compared to its own capital) was 28-1 according to a GAO report (Saber, in his Speculative Capital, said it was 50-1). That is the equivalent of a bank lending someone $2.8 million, or $5 million, depending on whose figures you use, using a $100,000 house for collateral. Which of course in normal financing for production a bank would never do. Saber argues that because arbitrage, the heart of speculation is in theory a "riskless investment", that there is a certain rationale to leverage ratios like that. LTCM's leverage ratio according to the GAO report was not out of line with other securities firms; Goldman-Sachs leverage ratio was 34-1 at the time, according to the GAO report. (Due to differences in calculating the ratio, these numbers may not jive with the Business Week numbers above). One additional note on leverage: according to Saber, as the spread on arbitrage shrinks due to competition and better technology, more leverage is required to maintain the same returns.
6. Speculative capital is also the arena in which speculation takes place -- the exchanges, the traders, the computer systems -- and speculative capital accumulates capital via the trading fees it charges everyone to participate in the mayhem.
Second, how does speculative capital exercise that dominance? Control over the economy is exercised in several ways.
1. Through influence on money market funds, speculative capital wields tremendous power over national currencies, which affect the cost of imports (in particular oil, priced in dollars) and exports, and access to money for production. See, for experience of various Asian countries in the Asian financial crisis in 1997. Through the speculative financial markets, capital can quickly flow into and out of markets and financial instruments -- is what is meant by "hot money", or the "instant plebiscite" that Walter Wriston talked about in his 1996 Wired interview.
2. Through stock markets, speculative capital (in the form of hedge funds) can affect the fortunes of companies by affecting their stock price, which can affect the ability of companies to raise additional money, or force shareholder activity to boost share price, or play a more active role as a company shareholder. Although traditionally connected to production only abstractly, in some cases speculative capital is taking a more hands on approach (see, e.g., "How U.S. Firms Are Pulled To the Mat by Hedge Funds", 2/11/06).
3. In a similar way, speculative capital, through hedge funds, is playing a more active role in private equity, that is financing start-up companies. See the 6/12/06 Business Week article, also the 4/5/06 WSJ article "Need Cash? Call a Hedge Fund". Speculative capital also provides sources of capital for venture funds, and ways for investors to speculate on new technologies.
5. As capital involved in the trade of commodity futures, speculative capital wields power over commodity pricing -- e.g., historically corners on the grain market; and more recently Enron and other energy traders and the California electricity crisis.
6. Control of wealth enables speculative capital to push for particular solutions that benefit it. Enron, which was transitioning in the 1990s into a speculative trading company, lobbied for the Kyoto protocol, in part because it focuses on the trading of pollution permits as the solution to global warming.
7. Control of wealth enables speculative capital to push for general policies that provides a climate in which it can thrive: free capital flows, controlled inflation and low interest rates, privatization and commodification (more trading opportunities), open capital markets. (E.g., Robert Rubin, Treasury Secretary under Clinton and also a Goldman-Sachs alumnus, used the Asian currency crisis to force open the relatively closed South Korean financial system.) What Hank Paulson does at Treasury after his expected confirmation may provide some indication as to what an "agenda of speculative capital" looks like.
Third, what is the relationship of speculative capital to other sectors of capital?
1. The production of use values, as always, is the foundation of the economy. The source of profit, as always, is surplus value expropriated during the production of values. Speculative capital "only" re-distributes this surplus value -- that is the source of gain from the trading of stocks and options and other kinds of derivatives. Speculative capital cannot exist independent of productive capital. But like the Old Man of the Sea, speculative capital rides on the shoulders of productive capital, overseeing and controlling it.
2. As capital becomes more mobile, all capitals are quickly merged into a big digital ocean of capital. To a great extent, this is made possible by the technology of finance. As soon as cash is deposited in a bank, that money becomes available to the bank for speculation. The boundaries between productive sectors like agriculture, industry, and transportation melt as their capitals mix in finance and become employed as speculative capital. Every industry must keep its capital active when not used for production, whether because expanded production is not feasible (e.g., how many more factories can Toyota build?), or because reserves are needed for future contingencies. Speculative capital puts that capital to work trading financial instruments.
3. Speculative capital works in the same way as finance capital in general, pooling individual capitals under its control. The main difference is that classic finance capital is directed back into production -- loaned out to expand production. If that capital cannot find a place in production (again, because production opportunities are constrained by hyperproductive new technologies and exhausted markets), it is put to work in speculation.
4. Speculative capital is the culmination of the process of the formation of a general rate of profit, the overall system of capital that Marx talked about, where all capitalists partake in the exploitation of labor even if they do not directly produce use values.
5. Speculative capital permeates all sectors of the economy, as a kind of spirit (Hilferding referred to finance capital as the holy ghost of capitalism; speculative capital is the perfection of that permeation) in and behind and around production, connecting everything together. Because it profoundly affects raw material prices and interest rates, speculative capital affects the daily operations of production and transport. Through complex derivatives and other kinds of hedging, speculative capital dissolves boundaries between sectors in other ways connecting distant markets in the same commodities as well as markets in different commodities. The complexity of these financial interconnections is not feasible without computers and digital communication networks.
jd
While wealth is the basis, ultimately, of capitalist power, more important is the control of wealth. This was implied by Lenin in his definition of finance capital as the merger of industrial and bank capital under the control of the banks. This distinction is important because, although finance, and in particular, speculation, does not produce value, it may control the sectors that do, and through that control, dominate (in the sense of setting the political agenda) the class and the economy. Here is an attempt to answer some questions about the concept of "dominant sector" today.
First, how does speculative capital come to be the dominant form of capital in the age of electronics? It does this by coming to control wealth.
1. Globalization (transnationalized production) requires hedging in order to maintain a stable production environment. Hedging is the participation in speculative capital markets to protect assets. Speculative capital comes to control larger pools of capital as a result.
2. Idle money is not capital (it is no longer being used in the self-expansion of capital). Banks historically have provided a way of keeping that money working as capital, by taking the industrialists money and lending it to other industrialists. The faster that money can be loaned out, or, if speculated with, the faster and cheaper and more frequent the transactions, the busier and more profitable that capital can be. Because modern speculation is based on digital networks operating at nanosecond speeds, modern speculation allows that capital to always be active in financial trading. And because of this hyperactivity, the opportunity for additional profit exists, attracting capital to speculation. (This profit is not generated by speculation per se, rather it is re-distributed from producers of values to speculators. Speculative capital attracts and accumulates surplus value produced elsewhere in the economy.)
3. Speculative capital offers a means of gaining a higher return on investment, so money flows into speculation and speculative capital comes to control more wealth. Capital seeks the highest return on investment. In a period of low interest rates, low rates of return, and large pools of money capital (it can't be invested in current production techniques because, with the productivity of robotics et al, investment in production will only flood the market with commodities), companies put that money to work in speculation. As financial observer James Grant said in the recent (6/12/06) Business Week article, "The world is stretching for return."
4. Within the financial sector, speculative operations are more profitable, causing a shift in the focus and activity of finance capital. The tail comes to wag the dog. "Investors argue that trading is booming now while most traditional banking businesses are languishing. Big firms can no longer subsist on underwriting or stock and bond trading as the combination of more rivals and cheap electronic trading drives down profit margins. 'Wall Street doesn't get paid to not take risk anymore,' says Merrill Lynch & Co. financial-services analyst Guy Moszkowski." (6/12/06 Business Week).
5. Through leverage, speculative capital controls sums of capital far in excess of actual holdings. Leverage is basically borrowing money to invest.
According to a Business Week chart (from the 6/12/06 issue), every $1 of major security firm equity controls $18 of assets. This underestimates the reach of speculative capital though: When the hedge fund Long Term Capital Management's troubles became public in 1998, its leverage ratio (that is, the amount of the capital it was investing compared to its own capital) was 28-1 according to a GAO report (Saber, in his Speculative Capital, said it was 50-1). That is the equivalent of a bank lending someone $2.8 million, or $5 million, depending on whose figures you use, using a $100,000 house for collateral. Which of course in normal financing for production a bank would never do. Saber argues that because arbitrage, the heart of speculation is in theory a "riskless investment", that there is a certain rationale to leverage ratios like that. LTCM's leverage ratio according to the GAO report was not out of line with other securities firms; Goldman-Sachs leverage ratio was 34-1 at the time, according to the GAO report. (Due to differences in calculating the ratio, these numbers may not jive with the Business Week numbers above). One additional note on leverage: according to Saber, as the spread on arbitrage shrinks due to competition and better technology, more leverage is required to maintain the same returns.
6. Speculative capital is also the arena in which speculation takes place -- the exchanges, the traders, the computer systems -- and speculative capital accumulates capital via the trading fees it charges everyone to participate in the mayhem.
Second, how does speculative capital exercise that dominance? Control over the economy is exercised in several ways.
1. Through influence on money market funds, speculative capital wields tremendous power over national currencies, which affect the cost of imports (in particular oil, priced in dollars) and exports, and access to money for production. See, for experience of various Asian countries in the Asian financial crisis in 1997. Through the speculative financial markets, capital can quickly flow into and out of markets and financial instruments -- is what is meant by "hot money", or the "instant plebiscite" that Walter Wriston talked about in his 1996 Wired interview.
2. Through stock markets, speculative capital (in the form of hedge funds) can affect the fortunes of companies by affecting their stock price, which can affect the ability of companies to raise additional money, or force shareholder activity to boost share price, or play a more active role as a company shareholder. Although traditionally connected to production only abstractly, in some cases speculative capital is taking a more hands on approach (see, e.g., "How U.S. Firms Are Pulled To the Mat by Hedge Funds", 2/11/06).
3. In a similar way, speculative capital, through hedge funds, is playing a more active role in private equity, that is financing start-up companies. See the 6/12/06 Business Week article, also the 4/5/06 WSJ article "Need Cash? Call a Hedge Fund". Speculative capital also provides sources of capital for venture funds, and ways for investors to speculate on new technologies.
5. As capital involved in the trade of commodity futures, speculative capital wields power over commodity pricing -- e.g., historically corners on the grain market; and more recently Enron and other energy traders and the California electricity crisis.
6. Control of wealth enables speculative capital to push for particular solutions that benefit it. Enron, which was transitioning in the 1990s into a speculative trading company, lobbied for the Kyoto protocol, in part because it focuses on the trading of pollution permits as the solution to global warming.
7. Control of wealth enables speculative capital to push for general policies that provides a climate in which it can thrive: free capital flows, controlled inflation and low interest rates, privatization and commodification (more trading opportunities), open capital markets. (E.g., Robert Rubin, Treasury Secretary under Clinton and also a Goldman-Sachs alumnus, used the Asian currency crisis to force open the relatively closed South Korean financial system.) What Hank Paulson does at Treasury after his expected confirmation may provide some indication as to what an "agenda of speculative capital" looks like.
Third, what is the relationship of speculative capital to other sectors of capital?
1. The production of use values, as always, is the foundation of the economy. The source of profit, as always, is surplus value expropriated during the production of values. Speculative capital "only" re-distributes this surplus value -- that is the source of gain from the trading of stocks and options and other kinds of derivatives. Speculative capital cannot exist independent of productive capital. But like the Old Man of the Sea, speculative capital rides on the shoulders of productive capital, overseeing and controlling it.
2. As capital becomes more mobile, all capitals are quickly merged into a big digital ocean of capital. To a great extent, this is made possible by the technology of finance. As soon as cash is deposited in a bank, that money becomes available to the bank for speculation. The boundaries between productive sectors like agriculture, industry, and transportation melt as their capitals mix in finance and become employed as speculative capital. Every industry must keep its capital active when not used for production, whether because expanded production is not feasible (e.g., how many more factories can Toyota build?), or because reserves are needed for future contingencies. Speculative capital puts that capital to work trading financial instruments.
3. Speculative capital works in the same way as finance capital in general, pooling individual capitals under its control. The main difference is that classic finance capital is directed back into production -- loaned out to expand production. If that capital cannot find a place in production (again, because production opportunities are constrained by hyperproductive new technologies and exhausted markets), it is put to work in speculation.
4. Speculative capital is the culmination of the process of the formation of a general rate of profit, the overall system of capital that Marx talked about, where all capitalists partake in the exploitation of labor even if they do not directly produce use values.
5. Speculative capital permeates all sectors of the economy, as a kind of spirit (Hilferding referred to finance capital as the holy ghost of capitalism; speculative capital is the perfection of that permeation) in and behind and around production, connecting everything together. Because it profoundly affects raw material prices and interest rates, speculative capital affects the daily operations of production and transport. Through complex derivatives and other kinds of hedging, speculative capital dissolves boundaries between sectors in other ways connecting distant markets in the same commodities as well as markets in different commodities. The complexity of these financial interconnections is not feasible without computers and digital communication networks.
jd
Sunday, June 04, 2006
Mr. Speculative Capital
President Bush nominated Henry Paulson, CEO of investment bank Goldman-Sachs as secretary of the Treasury Department last Tuesday (May 30, 2006). The June 12, 2006 Business Week called it "Mr. Risk goes to Washington." Mr. Speculative Capital that is.
I have argued that speculative capital -- capital involved in the trade of financial instruments -- is a subset of finance capital in general, but comes to dominate not just finance, but capital in general during the stage of capitalism known as "globalization." (For more on see a paper on speculative capital, also a paper of networks and globalization which has more on this.) The transition of Goldman-Sachs from private partnership investment bank -- making its money primarily from advising corporate clients, helping companies go public, and facilitating mergers and acquisitions -- to speculation powerhouse underscores the dynamics of how speculative capital rises to the position of control. As a companion Business Week piece (" Inside Wall Street's Culture Of Risk" by Emily Thornton) noted:
The article quotes financial market historian James Grant: "The world is stretching for return." Speculation can achieve that, while traditional banking activities can't. (Another aspect of speculative capital's clout is the number of Goldman-Sachs alumni in positions of political power: see "The Leadership Factory", another Business Week item.)
I think it is also important to note that large volumes of risk cannot be managed without the aid of computers and digital networks; or, speculative capital can only come to the fore with the introduction of electronics into production. E.g., according to Thornton's article,
The transition at Goldman-Sachs from old-line banking services to speculator was overseen by Paulson, including investing mightily in the technology that required to successfully manage the risk. According to a May, 2000 Forbes cover story on Paulson and G-S, "Goldman Sachs will by year's end have spent $5 billion in five years on all this technology, building an arsenal aimed at making money whichever direction the market goes. So long as it goes somewhere. 'Volatility is our friend,' Hank Paulson says serenely. 'If it wasn't for volatility, why would you need Goldman Sachs? Why would you need to take positions or risk?'". Michael Mandel, in Business Week noted that "Goldman, under Paulson's leadership, became one of the greatest and most profitable risk-taking machines ever built."
So what does Paulson's nomination to head up the Treasury Department mean? Because Paulson is such a big deal on Wall Street, the general assumption in the news of the nomination is that Paulson was guaranteed a seat in Bush's inner circle and more clout in domestic and international economic policy than his two predecessors. Paulson's nomination might help calm jittery markets, the "Rubin effect" as Liz Moyers reported on Forbes.com. Through G-S dealings with China, Paulson might have influence on economic relations with China, including moving them to a market-based currency exchange rate. As a big-time conservationist (Paulson is chairman of the Nature Conservancy) he might bring some sanity to the government's policy on climate change.
Michael Mandel argues that Paulson brings to Washington is the ability to explain to Congress and the public the nature of risk in the new economy. This can be translated into explaining why the sources of risk for most people -- cuts in government programs, "free trade", job flight, downsizing, market volatility, etc. -- are good. Neoliberalism is creative destruction of the old bureaucratic, timid ties that bind, freeing up the entrepreneurial risk-taking adventurous spirit blah blah blah. The two previous secretaries of the Treasury came out of old-economy industry (aluminum and railroads), where debt and risk are "bad". In new-economy terms, growth means risk, risk means debt, and no risk, no reward. Goldman-Sachs increased its long-term debt five-fold from 1999 to 2005 ($20 billion to $100 billion). Looked at in "new economy" terms, the U.S. national debt, trade deficit and currency weakening can be seen as "leveraging up" -- taking on risk for big rewards down the road. Paulson will be able to explain why this is good. And maybe he will be able to explain why privatizing social security will be ... ummm ... good. Mandel writes, "Within Goldman, Paulson is known as an exceedingly effective communicator. If he can translate Wall Street's language of speculation into something the public and politicians understand, the President's gamble in appointing him will pay off for everyone."
Paulson has been a supporter of Bush (helping to raise over $100,000 for his campaign in 2004). As a Wall Street Journal article by Deborah Solomon the day after the announcement noted:
However, the economic policies listed above are not that much different from Clinton's policies. They describe the general neoliberal program of the past 25 years. And one could argue that Bush's actual policies -- the cost of establishing the police state, the cost of the war in Iraq, Congressional pork -- run counter to the neoliberal agenda.
Another, entirely (pardon me) speculative thought: Speculative capital requires some degree of stability in the underlying world economy -- volatility yes, but not so much that it reaches a systemic tipping point. And the Bush administration is making a total mess of things, from the war in Iraq to oil prices to climate change to China to budget deficits and trade imbalance, that "Wall Street", or the representatives of speculative capital, are saying "Enough!" And Paulson is stepping up to try and restore some order.
Time will tell.
jd
I have argued that speculative capital -- capital involved in the trade of financial instruments -- is a subset of finance capital in general, but comes to dominate not just finance, but capital in general during the stage of capitalism known as "globalization." (For more on see a paper on speculative capital, also a paper of networks and globalization which has more on this.) The transition of Goldman-Sachs from private partnership investment bank -- making its money primarily from advising corporate clients, helping companies go public, and facilitating mergers and acquisitions -- to speculation powerhouse underscores the dynamics of how speculative capital rises to the position of control. As a companion Business Week piece (" Inside Wall Street's Culture Of Risk" by Emily Thornton) noted:
Investors argue that trading is booming now while most traditional banking businesses are languishing. Big firms can no longer subsist on underwriting or stock and bond trading as the combination of more rivals and cheap electronic trading drives down profit margins. "Wall Street doesn't get paid to not take risk anymore," says Merrill Lynch & Co. financial-services analyst Guy Moszkowski. The big investment banks add value by 'absorbing the risk that their clients are looking to get rid of.'"
The article quotes financial market historian James Grant: "The world is stretching for return." Speculation can achieve that, while traditional banking activities can't. (Another aspect of speculative capital's clout is the number of Goldman-Sachs alumni in positions of political power: see "The Leadership Factory", another Business Week item.)
I think it is also important to note that large volumes of risk cannot be managed without the aid of computers and digital networks; or, speculative capital can only come to the fore with the introduction of electronics into production. E.g., according to Thornton's article,
Yet for all the risks they're taking on, banks insist they're safer than ever. They've hired many of the greatest mathematical minds in the world to create impossibly complex risk models...
The bank [Bear, Stearns & Co. -- the transition is happening throughout the financial industry - jd] has built such powerful computing systems that Alix [chief risk officer at Bear, Stearns] can reevaluate every day the risks of thousands of positions across the firm's trading businesses under various stressful scenarios to be sure the firm doesn't hold too much of any risky investment at any one time. That type of analysis used to take a week to complete. "The machine works," he says. The degree to which risk management has evolved in the past few decades is astonishing, say analysts.
The transition at Goldman-Sachs from old-line banking services to speculator was overseen by Paulson, including investing mightily in the technology that required to successfully manage the risk. According to a May, 2000 Forbes cover story on Paulson and G-S, "Goldman Sachs will by year's end have spent $5 billion in five years on all this technology, building an arsenal aimed at making money whichever direction the market goes. So long as it goes somewhere. 'Volatility is our friend,' Hank Paulson says serenely. 'If it wasn't for volatility, why would you need Goldman Sachs? Why would you need to take positions or risk?'". Michael Mandel, in Business Week noted that "Goldman, under Paulson's leadership, became one of the greatest and most profitable risk-taking machines ever built."
So what does Paulson's nomination to head up the Treasury Department mean? Because Paulson is such a big deal on Wall Street, the general assumption in the news of the nomination is that Paulson was guaranteed a seat in Bush's inner circle and more clout in domestic and international economic policy than his two predecessors. Paulson's nomination might help calm jittery markets, the "Rubin effect" as Liz Moyers reported on Forbes.com. Through G-S dealings with China, Paulson might have influence on economic relations with China, including moving them to a market-based currency exchange rate. As a big-time conservationist (Paulson is chairman of the Nature Conservancy) he might bring some sanity to the government's policy on climate change.
Michael Mandel argues that Paulson brings to Washington is the ability to explain to Congress and the public the nature of risk in the new economy. This can be translated into explaining why the sources of risk for most people -- cuts in government programs, "free trade", job flight, downsizing, market volatility, etc. -- are good. Neoliberalism is creative destruction of the old bureaucratic, timid ties that bind, freeing up the entrepreneurial risk-taking adventurous spirit blah blah blah. The two previous secretaries of the Treasury came out of old-economy industry (aluminum and railroads), where debt and risk are "bad". In new-economy terms, growth means risk, risk means debt, and no risk, no reward. Goldman-Sachs increased its long-term debt five-fold from 1999 to 2005 ($20 billion to $100 billion). Looked at in "new economy" terms, the U.S. national debt, trade deficit and currency weakening can be seen as "leveraging up" -- taking on risk for big rewards down the road. Paulson will be able to explain why this is good. And maybe he will be able to explain why privatizing social security will be ... ummm ... good. Mandel writes, "Within Goldman, Paulson is known as an exceedingly effective communicator. If he can translate Wall Street's language of speculation into something the public and politicians understand, the President's gamble in appointing him will pay off for everyone."
Paulson has been a supporter of Bush (helping to raise over $100,000 for his campaign in 2004). As a Wall Street Journal article by Deborah Solomon the day after the announcement noted:
Mr. Paulson has generally taken positions that hew closely to the Bush administration's. He has called for open markets, favored Bush economic policies and said deficit reductions should come through spending cuts, not tax increases. In an op-ed article in this newspaper in 2003, Mr. Paulson said the Bush dividend tax cut would spur growth and said the notion that such a reduction "somehow favors the wealthy at the expense of the poor harkens back to an earlier era when only the rich held equities." Last year, Mr. Paulson said that while he was "concerned" about the deficit, he viewed it "as being a necessary and understandable side-effect of what needed to be done to stimulate the economy."
However, the economic policies listed above are not that much different from Clinton's policies. They describe the general neoliberal program of the past 25 years. And one could argue that Bush's actual policies -- the cost of establishing the police state, the cost of the war in Iraq, Congressional pork -- run counter to the neoliberal agenda.
Another, entirely (pardon me) speculative thought: Speculative capital requires some degree of stability in the underlying world economy -- volatility yes, but not so much that it reaches a systemic tipping point. And the Bush administration is making a total mess of things, from the war in Iraq to oil prices to climate change to China to budget deficits and trade imbalance, that "Wall Street", or the representatives of speculative capital, are saying "Enough!" And Paulson is stepping up to try and restore some order.
Time will tell.
jd
Friday, May 26, 2006
Malthus and crisis point
Someone asked me a question about globalization and the ecosystem of globalization -- I argue that globalization as a new stage of capitalism (or an "epochal shift" in the terms of William Robinson et. al.) leads to a new ecosystem, in contrast to the ecological narrative of the "end of nature". How does such a viewpoint fit with the Malthusian idea of carrying capacity and crisis point? (For a bit more on population and environment, see this little paper: Human population and ecology)
Here was my response:
Re: Malthus and carrying capacity and crisis -- I think that Malthus is a political story and not a scientific one. Or hypothetical but simplistic, because the factors that contribute to carrying capacity are complex and political in the sense that carrying capacity has to do w/ historical/cultural factors and technology (which is political in the sense of what gets researched and deployed). So "crisis point" is not fixed but "depends."
One might argue that we are already at an ecological crisis point, having already exceeded carrying capacity as indicated by mortality from poverty-related causes (curable diseases, starvation, exposure, etc.) But this would be the carrying capacity of globalization-as-a-stage given the current advance of technology. Some other form of social organization might (I would hope) raise the carrying capacity, assuming some more rationale understanding of affluence, and accompanied by an intense research and development program of renewable energy sources.
I think the tendency in globalization is towards more artificial or managed environments that will continue to provide the conditions for the economy to stumble along. It won't be a particularly "wild" or "natural" environment (except maybe for areas reserved as private parks or ecotourist havens). There may be localized ecological crises, that even spill over their local boundaries, but they will be absorbed in the same way that localized economic crises are absorbed at the global level.
However, I don't think that globalization is the only choice available, in big historical terms, so hope springs eternal. Environmental questions quickly slip from the realm of science into the realm of politics.
Climate change is something else, and if the worst case scenarios, or close-to-worst case scenarios happen, all bets are off.
jd
Here was my response:
Re: Malthus and carrying capacity and crisis -- I think that Malthus is a political story and not a scientific one. Or hypothetical but simplistic, because the factors that contribute to carrying capacity are complex and political in the sense that carrying capacity has to do w/ historical/cultural factors and technology (which is political in the sense of what gets researched and deployed). So "crisis point" is not fixed but "depends."
One might argue that we are already at an ecological crisis point, having already exceeded carrying capacity as indicated by mortality from poverty-related causes (curable diseases, starvation, exposure, etc.) But this would be the carrying capacity of globalization-as-a-stage given the current advance of technology. Some other form of social organization might (I would hope) raise the carrying capacity, assuming some more rationale understanding of affluence, and accompanied by an intense research and development program of renewable energy sources.
I think the tendency in globalization is towards more artificial or managed environments that will continue to provide the conditions for the economy to stumble along. It won't be a particularly "wild" or "natural" environment (except maybe for areas reserved as private parks or ecotourist havens). There may be localized ecological crises, that even spill over their local boundaries, but they will be absorbed in the same way that localized economic crises are absorbed at the global level.
However, I don't think that globalization is the only choice available, in big historical terms, so hope springs eternal. Environmental questions quickly slip from the realm of science into the realm of politics.
Climate change is something else, and if the worst case scenarios, or close-to-worst case scenarios happen, all bets are off.
jd
Sunday, May 21, 2006
More on emissions markets
Here are some links to more info on the carbon emissions markets (I lifted news and commentary ones from the Gristmill post and comments).
News:
Emissions-Trading Profits in Europe Plunge as Data Questioned (Bloomberg report)
EU gives green light to pollution hike (Times of London)
Data Leaks Shake Up Carbon Trade (New York Times)
Commentary:
EU carbon-trading market hullabaloo from Gristmill, the Grist online magazine blog
Emissions impossible from the Guardian
Question marks over EU CO2 trading scheme from EurActiv, includes a number of links for additional background info.
Background: These articles came out within the past two years, but include good analysis
Marketing and making carbon dumps: Commodification, calculation and counterfactuals in climate change mitigation A very good analysis by Larry Lohmann of The Corner House, appeared in Science as culture, September, 2005.
Climate fraud and carbon colonialism: The new trade in greenhouse gases by Heidi Bachram, appeared in Capitalism nature socialism December, 2004.
jd
News:
Emissions-Trading Profits in Europe Plunge as Data Questioned (Bloomberg report)
EU gives green light to pollution hike (Times of London)
Data Leaks Shake Up Carbon Trade (New York Times)
Commentary:
EU carbon-trading market hullabaloo from Gristmill, the Grist online magazine blog
Emissions impossible from the Guardian
Question marks over EU CO2 trading scheme from EurActiv, includes a number of links for additional background info.
Background: These articles came out within the past two years, but include good analysis
Marketing and making carbon dumps: Commodification, calculation and counterfactuals in climate change mitigation A very good analysis by Larry Lohmann of The Corner House, appeared in Science as culture, September, 2005.
Climate fraud and carbon colonialism: The new trade in greenhouse gases by Heidi Bachram, appeared in Capitalism nature socialism December, 2004.
jd
Thursday, May 18, 2006
Speculative capital and the environment, plus carbon markets
Here is a link to a draft of a paper I presented at the 2006 Global Studies Association here in Chicago. The paper is titled "Speculative capital and the ecosystem of globalization". It will undergo a significant re-write before I am done with it.
Related to this, the New York Times carried an article in Tuesday's paper (5/16/06) called "Data leaks shake up carbon trade" by Heather Timmons (I'm not sure how long that link will be good). It has been one year since the Kyoto protocol went into effect for the 163 signatory countries, and several European countries started leaking out their emissions numbers ahead of the May 15 release date. The initial numbers from France, Sweden and a few other countries were significantly below their allotted permits, meaning that those permits would be available for sale on the carbon market. This drove down the price of carbon permits from about 30 euros per metric ton of CO2 to a low of 9.40 Euros in a matter of days. But on May 15, prices doubled from the day's low to the day's high. (If you are curious about the carbon markets, check out the European Climate Exchange website, which has historical prices, and a good news section.)
It looks like European countries exaggerated their current emissions levels, used to create and allocate the permits. By exaggerating the baseline of pollution used to measure Kyoto reductions, national government's were cutting their local industries some slack. With a high baseline, industry has had to do little or nothing to meet reduction guidelines. Or maybe industries provided faulty numbers: "Governments have been cheated by the big industries, which gave them the wrong assumptions for their emissions," charged Stephen Singer of the World Wildlife Fund. Or possibly industry was on their way to reducing emissions anyway, through cleaner technology, and the Kyoto targets weren't set low enough.
The extreme volatility in the market has upset some traders as well, who taken by surprise by early release of data and data leaks.
The charge that baselines were faulty reinforces the idea that the Kyoto Protocol terms are a joke: open to fraud and deceit, and shooting for targets that will do little to reduce emissions or global warming. "So far, the permit market appears to have done more for the balance sheets of power companies than for pollution control," per the NYT article, since companies were granted the inflated number of permits, which they can turn around and sell on the open market. And the markets themselves, including the brokers, which make money as long as trading is taking place.
jd
Related to this, the New York Times carried an article in Tuesday's paper (5/16/06) called "Data leaks shake up carbon trade" by Heather Timmons (I'm not sure how long that link will be good). It has been one year since the Kyoto protocol went into effect for the 163 signatory countries, and several European countries started leaking out their emissions numbers ahead of the May 15 release date. The initial numbers from France, Sweden and a few other countries were significantly below their allotted permits, meaning that those permits would be available for sale on the carbon market. This drove down the price of carbon permits from about 30 euros per metric ton of CO2 to a low of 9.40 Euros in a matter of days. But on May 15, prices doubled from the day's low to the day's high. (If you are curious about the carbon markets, check out the European Climate Exchange website, which has historical prices, and a good news section.)
It looks like European countries exaggerated their current emissions levels, used to create and allocate the permits. By exaggerating the baseline of pollution used to measure Kyoto reductions, national government's were cutting their local industries some slack. With a high baseline, industry has had to do little or nothing to meet reduction guidelines. Or maybe industries provided faulty numbers: "Governments have been cheated by the big industries, which gave them the wrong assumptions for their emissions," charged Stephen Singer of the World Wildlife Fund. Or possibly industry was on their way to reducing emissions anyway, through cleaner technology, and the Kyoto targets weren't set low enough.
The extreme volatility in the market has upset some traders as well, who taken by surprise by early release of data and data leaks.
The charge that baselines were faulty reinforces the idea that the Kyoto Protocol terms are a joke: open to fraud and deceit, and shooting for targets that will do little to reduce emissions or global warming. "So far, the permit market appears to have done more for the balance sheets of power companies than for pollution control," per the NYT article, since companies were granted the inflated number of permits, which they can turn around and sell on the open market. And the markets themselves, including the brokers, which make money as long as trading is taking place.
jd
Wednesday, April 26, 2006
Wired / environment
The cover story in the new Wired is titled "The Next Green Revolution". Author Alex Nikolai Steffen acknowledges that "green-minded activists" were right about the problem, but wrong because the solutions they offered people were "unappealing" since they called for sacrifice: turn down the heat, give up the car, eat less meat, etc. Now,
The inane naïveté of it all. "The industrial system we've devised" is the problem the article says. First, I'm not sure who "we" is in this case. The industrial system grew out of fossil fuel-powered technology operating within the law system of capitalism. Capitalism was, and is, driven by the maximization of profit, which has included the externalization of environmental costs. The result is an economic system that has plundered the planet and shat where it lives.
But now, capitalism as a system is faced with a dilemma. It cannot continue the process of accumulation -- that is, the making and selling of stuff to amass more profit -- without natural resources and healthy consumers. The environment is becoming an internal cost. As with every social crisis, the challenge for capitalism as a system, and its agents, like the "resurrected Al Gore" featured on the cover, is how to resolve the problem within the constraints of capitalism -- to turn lemons into lemonade.
The traditional solution proposed by the environmentalist movement has been the regulation of capital, going back to the early 1970s: the Environmental Protection Agency, the Clean Water Act, the Endangered Species Act, the Clean Air Act, etc. This inside the beltway strategy is failing now in the neoliberal political climate of zero government and market-based solutions. It was this three-step strategy (isolate an issue; design a technical fix; sell the technical fix to legislators) that Michael Shellenberger and Ted Nordhaus challenged in their "Death of Environmentalism" article, the failing strategy of working within existing economic and political structures. According to Shellenberger and Nordhaus, "modern environmentalism is no longer capable of dealing with the world's most serious ecological crisis [climate change - jd]"; and "[w]hat the environmental movement needs more than anything else right now is to take a collective step back to rethink everything." The political climate has changed, in terms of how people get information, who they trust, how they act. The "left" and "progressives" must connect with people where they are, not where one wishes they were. The masterminds of the New Right capitalize on the general anxiety churned up by globalization, and package that into an anti-choice, anti-science, anti-human agenda. No effective vision has been articulated to counter it. Part of the problem for many "progressives" is that the solution to this problem cannot be found within the framework of capitalism, and rather than sink capitalism, they blunder on with blind and un-inspiring solutions.
As a result, the emerging solution for "neo-greens" is to see capitalism itself as the solution. Maybe private property and profit maximization and the market really can solve the environmental mess that it ... umm ... created.
Capitalism is a remarkably flexible and adaptable system. Some corporations are realizing that they must address things like climate change, because they also are on lifeboat Earth, and climate change is an objective, happening thing. They must confront environmental catastrophe if they are to continue as enterprises. Their solution is to make "green" an investment opportunity, to turn it into a site of accumulation, a place to make profits. British Petroleum looks for alternative energy sources because because "peak oil" may be a real thing, and ultimately, it doesn't matter what the source of the energy they package and sell is, as long as they package and sell it. If General Motors can make and sell cars that run on ethanol, why not? The manufacturers that make smokestack scrubbers for coal plants are a site of profitability, as will be some of the alternative energy companies that venture capital firms are now pumping money into. The Wilderhill Clean Energy Index, which tracks the stock prices of companies involved in the alternative energy business, has almost doubled in price in the past year. Speculative capital finds profit opportunities in carbon emissions trading and weather derivatives.
Looming behind "green capitalism" as the way out of the environmental crisis is the long-standing question of "is capitalism sustainable?" As James O'Connor pointed out in an essay that appears in his collection Natural causes: Essays in ecological Marxism, Guilford Press, 1998), "sustainable for whom?" Capitalism conceivably (maybe) could manufacture a franken-world ecosystem that sustains profit-maximization. It could create the conditions to sustain capitalism, and never address the polarization of wealth and the total immiseration of 3/5ths of the world's population.
Another concept of "sustainable" implies a system that sustains the non-human environment as well as the health and well-being of the human part of it, too. This can't be done within the context of capitalism. The polarization of wealth is an emergent property of capitalism. General Motors, no matter what color it is, green or otherwise, cannot help but destroy the lives of its workers and retirees -- that's what it (GM) does -- it maximizes profit for shareholders. Capitalism means alienation -- from production, from people, from nature. Everything (if not now, soon) is routed through the commodity relationship, the price tag and the toll.
An environmental movement that figures out a way to accommodate itself with globalization and capitalism may succeed in some narrow way, along some narrow issues. But it will ultimately fail in achieving a world that sustains the people on it in any meaningful way. And the environment also will be the poorer, in the same way that the "Rainforest Cafe" is not a rainforest (or Lincoln Park zoo an African savannah or a tree plantation a jungle, etc. etc.).
jd
With climate change hard upon us, a new green movement is taking shape, one that embraces environmentalism's concerns but rejects its worn-out answers. Technology can be a font of endlessly creative solutions. Business can be a vehicle for change. Prosperity can help us build the kind of world we want. Scientific exploration, innovative design, and cultural evolution are the most powerful tools we have. Entrepreneurial zeal and market forces, guided by sustainable policies, can propel the world into a bright green future.
The inane naïveté of it all. "The industrial system we've devised" is the problem the article says. First, I'm not sure who "we" is in this case. The industrial system grew out of fossil fuel-powered technology operating within the law system of capitalism. Capitalism was, and is, driven by the maximization of profit, which has included the externalization of environmental costs. The result is an economic system that has plundered the planet and shat where it lives.
But now, capitalism as a system is faced with a dilemma. It cannot continue the process of accumulation -- that is, the making and selling of stuff to amass more profit -- without natural resources and healthy consumers. The environment is becoming an internal cost. As with every social crisis, the challenge for capitalism as a system, and its agents, like the "resurrected Al Gore" featured on the cover, is how to resolve the problem within the constraints of capitalism -- to turn lemons into lemonade.
The traditional solution proposed by the environmentalist movement has been the regulation of capital, going back to the early 1970s: the Environmental Protection Agency, the Clean Water Act, the Endangered Species Act, the Clean Air Act, etc. This inside the beltway strategy is failing now in the neoliberal political climate of zero government and market-based solutions. It was this three-step strategy (isolate an issue; design a technical fix; sell the technical fix to legislators) that Michael Shellenberger and Ted Nordhaus challenged in their "Death of Environmentalism" article, the failing strategy of working within existing economic and political structures. According to Shellenberger and Nordhaus, "modern environmentalism is no longer capable of dealing with the world's most serious ecological crisis [climate change - jd]"; and "[w]hat the environmental movement needs more than anything else right now is to take a collective step back to rethink everything." The political climate has changed, in terms of how people get information, who they trust, how they act. The "left" and "progressives" must connect with people where they are, not where one wishes they were. The masterminds of the New Right capitalize on the general anxiety churned up by globalization, and package that into an anti-choice, anti-science, anti-human agenda. No effective vision has been articulated to counter it. Part of the problem for many "progressives" is that the solution to this problem cannot be found within the framework of capitalism, and rather than sink capitalism, they blunder on with blind and un-inspiring solutions.
As a result, the emerging solution for "neo-greens" is to see capitalism itself as the solution. Maybe private property and profit maximization and the market really can solve the environmental mess that it ... umm ... created.
Capitalism is a remarkably flexible and adaptable system. Some corporations are realizing that they must address things like climate change, because they also are on lifeboat Earth, and climate change is an objective, happening thing. They must confront environmental catastrophe if they are to continue as enterprises. Their solution is to make "green" an investment opportunity, to turn it into a site of accumulation, a place to make profits. British Petroleum looks for alternative energy sources because because "peak oil" may be a real thing, and ultimately, it doesn't matter what the source of the energy they package and sell is, as long as they package and sell it. If General Motors can make and sell cars that run on ethanol, why not? The manufacturers that make smokestack scrubbers for coal plants are a site of profitability, as will be some of the alternative energy companies that venture capital firms are now pumping money into. The Wilderhill Clean Energy Index, which tracks the stock prices of companies involved in the alternative energy business, has almost doubled in price in the past year. Speculative capital finds profit opportunities in carbon emissions trading and weather derivatives.
Looming behind "green capitalism" as the way out of the environmental crisis is the long-standing question of "is capitalism sustainable?" As James O'Connor pointed out in an essay that appears in his collection Natural causes: Essays in ecological Marxism, Guilford Press, 1998), "sustainable for whom?" Capitalism conceivably (maybe) could manufacture a franken-world ecosystem that sustains profit-maximization. It could create the conditions to sustain capitalism, and never address the polarization of wealth and the total immiseration of 3/5ths of the world's population.
Another concept of "sustainable" implies a system that sustains the non-human environment as well as the health and well-being of the human part of it, too. This can't be done within the context of capitalism. The polarization of wealth is an emergent property of capitalism. General Motors, no matter what color it is, green or otherwise, cannot help but destroy the lives of its workers and retirees -- that's what it (GM) does -- it maximizes profit for shareholders. Capitalism means alienation -- from production, from people, from nature. Everything (if not now, soon) is routed through the commodity relationship, the price tag and the toll.
An environmental movement that figures out a way to accommodate itself with globalization and capitalism may succeed in some narrow way, along some narrow issues. But it will ultimately fail in achieving a world that sustains the people on it in any meaningful way. And the environment also will be the poorer, in the same way that the "Rainforest Cafe" is not a rainforest (or Lincoln Park zoo an African savannah or a tree plantation a jungle, etc. etc.).
jd
Friday, April 14, 2006
Faster computers and speculative capital
Today's (4/14/06) Wall Street Journal reports more evidence of the connection between speculative capital and electronics. An article titled "Supercomputers Speed Up Game" by Edward Taylor, Aaron Lucchetti and Alistair Macdonald reports on how faster computers are contributing the swelling of automated stock trades and consolidation among the world's stock exchanges.
The use of computers in trading of course is nothing new. In fact, modern speculative capital (post-Bretton Woods, started with the advent of money markets) only exists because of networked computers. But the march of technology -- faster, smaller, cheaper -- continually changes the game. The trend allows smaller players into the game:
Nasser Saber, in his excellent and unique book Speculative Capital described how speculative capital tends to more and faster trades to take advantage of increasingly smaller price differences in different markets or (what amounts to the same thing) different derivative configurations, the practice called arbitrage. Proteom, mentioned above, exploits differences in the S&P 500 Index and the individual stocks that make up the index (if I am reading the article correctly):
Testifying as the importance in electronics in this practice:
The technology has also reduced trading transaction costs, make more trades financially feasible. The article cites the growth in transaction volume at many exchanges, as well as the growth in the share prices of the exchanges themselves.
Of course, one good turn deserves another, driving the process forward: "'There is an arms race [among exchanges] to be the fastest,' says Steve Swanson, president of brokerage firm Automated Trading Desk LLC."
Here's a link to a paper I did on speculative capital.
jd
The use of computers in trading of course is nothing new. In fact, modern speculative capital (post-Bretton Woods, started with the advent of money markets) only exists because of networked computers. But the march of technology -- faster, smaller, cheaper -- continually changes the game. The trend allows smaller players into the game:
Buyers and sellers have been matching up electronically since the 1980s. But an increase in computer capacity readily available to even small hedge funds -- investment pools for institutional investors and wealthy individuals -- has changed the game. "With four people and 50 computers that have the power roughly equivalent to a Cray supercomputer, we can achieve what someone else would need one trader and 100 analysts to accomplish," says Jonathan Kinlay, chief executive of Proteom Capital Management Ltd., a Bermuda-based hedge fund with about $100 million under management.
Nasser Saber, in his excellent and unique book Speculative Capital described how speculative capital tends to more and faster trades to take advantage of increasingly smaller price differences in different markets or (what amounts to the same thing) different derivative configurations, the practice called arbitrage. Proteom, mentioned above, exploits differences in the S&P 500 Index and the individual stocks that make up the index (if I am reading the article correctly):
Proteom uses computers to execute complex trading strategies based mainly on stocks in the Standard & Poor's 500-stock index and their tendency to rise or fall sharply and quickly, a measure known as volatility.
Testifying as the importance in electronics in this practice:
"This business could not have existed 10 years ago [because] the computational power was not available," Mr. Kinlay adds. "The execution of a trade, the analysis of the live data, the updating of databases and the construction of portfolios of stocks are all automated."
The technology has also reduced trading transaction costs, make more trades financially feasible. The article cites the growth in transaction volume at many exchanges, as well as the growth in the share prices of the exchanges themselves.
Of course, one good turn deserves another, driving the process forward: "'There is an arms race [among exchanges] to be the fastest,' says Steve Swanson, president of brokerage firm Automated Trading Desk LLC."
Here's a link to a paper I did on speculative capital.
jd
Thursday, April 13, 2006
Global Studies Association conference 2006
The Global Studies Association will be having its North American conference on May 12-14, 2006 at DePaul University in Chicago. The theme of this year's conference is "Alternative globalizations". The International Studies Program at DePaul is co-sponsoring the conference.
For more information see the conference web site.
jd
For more information see the conference web site.
jd
Monday, April 10, 2006
Draft of a project idea
The world is in a bad [okay, need to clarify] state. An effective effort to change this state requires an accurate assessment of the problem. While current responses have been very creative organizationally [network form], the response has suffered from a theoretical poverty [in terms of fundamental processes at work, nature of process, where we are in the process]. The absence of a clear, coherent understanding of historical roots and current state has resulted in a scattered and generally ineffective response.
"Globalization" as a total umbrella of current period.
Confusion over what "globalization" is. Is it something different? If not, old strategies and tactics should work. Is it something new? Then new strategies and tactics are required.
If it is something new, what is it?
The answer to this last question should determine the political response.
-- globalization as something distinct is in dispute
-- idea of stages seems to be in some dispute
-- [proceed on assumption that there are stages] determining an appropriate political response requires an accurate assessment of current stage. If globalization is a distinct stage, it requires a distinct political response.
Research will explore concept of globalization as a stage, by exploring one aspect of globalization -- speculative capital -- and its relationship to the environment.
-- capital is a social relation -- describes a particular kind of relationship between people in act of production/reproduction.
-- through production and reproduction, this relationship extends to the environment as foundation of economy; also source of well-being (reproduction)
Look at three contemporary financial structures.
First, examine these structures
(a) in terms of infrastructure necessary to make them possible
(b) in terms of demands, needs, opportunities that make them possible
Are these structures possible under other conditions? Or, if there are historical precedents, how are they the same, and how different, if at all? So could they arise in their current form under other conditions, or are they specific to current conditions? If they cannot arise under other conditions, then they are evidence of something distinctive about Capital today [part of a general category I call speculative capital] and therefore globalization [which is capitalism today].
[Use Carolyn Merchant's "ecological revolutions" as a framework, although will need to fill out areas where I think that it is lacking. use other environmental historians, e.g. William Cronon. Basic concept is that changes in mode of production (although will need to break this into smalled chunks, to look at at level of stages of capitalism) result in different ecologies]
Second, examine the financial structures
(a) in terms of property ownership
(b) connection between immediate participants [investors mainly] and the environment; agents of the participants and the environment.
What are the features of these relationships to the environment? [These relationships are mediated throug property relations.] Are these relations to Nature the same as in the past? If they are similar, in what ways? If not, how are they different? If the relationships are different, that is, they describe a different ecology, how do we characterize it based on the cases? [Or, to use "ecology" in a more traditional or narrow way, how are the ecosystems different?]
If the relationships are different, they are evidence again of something distinctive about capital today.
jd
"Globalization" as a total umbrella of current period.
Confusion over what "globalization" is. Is it something different? If not, old strategies and tactics should work. Is it something new? Then new strategies and tactics are required.
If it is something new, what is it?
The answer to this last question should determine the political response.
-- globalization as something distinct is in dispute
-- idea of stages seems to be in some dispute
-- [proceed on assumption that there are stages] determining an appropriate political response requires an accurate assessment of current stage. If globalization is a distinct stage, it requires a distinct political response.
Research will explore concept of globalization as a stage, by exploring one aspect of globalization -- speculative capital -- and its relationship to the environment.
-- capital is a social relation -- describes a particular kind of relationship between people in act of production/reproduction.
-- through production and reproduction, this relationship extends to the environment as foundation of economy; also source of well-being (reproduction)
Look at three contemporary financial structures.
First, examine these structures
(a) in terms of infrastructure necessary to make them possible
(b) in terms of demands, needs, opportunities that make them possible
Are these structures possible under other conditions? Or, if there are historical precedents, how are they the same, and how different, if at all? So could they arise in their current form under other conditions, or are they specific to current conditions? If they cannot arise under other conditions, then they are evidence of something distinctive about Capital today [part of a general category I call speculative capital] and therefore globalization [which is capitalism today].
[Use Carolyn Merchant's "ecological revolutions" as a framework, although will need to fill out areas where I think that it is lacking. use other environmental historians, e.g. William Cronon. Basic concept is that changes in mode of production (although will need to break this into smalled chunks, to look at at level of stages of capitalism) result in different ecologies]
Second, examine the financial structures
(a) in terms of property ownership
(b) connection between immediate participants [investors mainly] and the environment; agents of the participants and the environment.
What are the features of these relationships to the environment? [These relationships are mediated throug property relations.] Are these relations to Nature the same as in the past? If they are similar, in what ways? If not, how are they different? If the relationships are different, that is, they describe a different ecology, how do we characterize it based on the cases? [Or, to use "ecology" in a more traditional or narrow way, how are the ecosystems different?]
If the relationships are different, they are evidence again of something distinctive about capital today.
jd
Friday, March 24, 2006
P2P Foundation
Here are some links to The Foundation for Peer-to-Peer Alternatives resources:
The P2P Wiki includes sections of the foundation itself (background, statement of purpose, links); topics and projects; and various P2P resources.
The P2P Foundation blog.
The P2P Foundation newsletter.
jd
The P2P Wiki includes sections of the foundation itself (background, statement of purpose, links); topics and projects; and various P2P resources.
The P2P Foundation blog.
The P2P Foundation newsletter.
jd
Thursday, March 23, 2006
Claypool-Stroger race follow-up
A brief follow-up on yesterday's post -- Forrest Claypool conceded the Cook County Board of Commissioners president race to John Stroger yesterday afternoon when it became clear that, even with many ballots still uncounted, there was no way that Claypool could win.
According to the Chicago Sun-Times, Claypool acknowledged the strength of the south and westside black vote in re-electing Stroger, even though it is unlikely that Stroger, bedridden with a stroke and with possible paralysis and brain damage, will be able to actually continue to serve as board president. Per the Sun-Times, "If Stroger can't make it, the county's 80 Democratic committeemen will pick the new nominee. And it is those ward bosses, Claypool said, who led Stroger to victory."
In another wrinkle on Chicago machine politics, according to the Sun-Times:
jd
According to the Chicago Sun-Times, Claypool acknowledged the strength of the south and westside black vote in re-electing Stroger, even though it is unlikely that Stroger, bedridden with a stroke and with possible paralysis and brain damage, will be able to actually continue to serve as board president. Per the Sun-Times, "If Stroger can't make it, the county's 80 Democratic committeemen will pick the new nominee. And it is those ward bosses, Claypool said, who led Stroger to victory."
In another wrinkle on Chicago machine politics, according to the Sun-Times:
Should Stroger be unable to run the $3 billion county government through 2010, it is expected that a candidate from Chicago's African-American community would be selected to fill his spot... Mayor Daley and other elected officials are expected to press for a black candidate so as not to antagonize black voters before next year's mayoral primary.
jd
Wednesday, March 22, 2006
The Claypool-Stroger race
I did a little bit of work on the Forrest Claypool campaign for Cook County (Illinois) board president. Chicago is in Cook County; Cook County is the second largest county by population in the U.S. (after Los Angeles). The board president is the chief executive of a $3 billion county government. The county commission board president also automatically chairs the Cook County Forest Preserve District board, which controls over 10% of county land set aside as natural and recreational space.
Cook County voters went to the polls yesterday (3/21) to vote in the Democratic Party primary, of which the most controversial contest was for the county board president seat. John Stroger, the incumbent was challenged by a county commissioner, Forrest Claypool, seen as a reformer. The race has indeed been close -- as of this writing, the Cook County Board of Elections suspended vote counting last night, with about 15 percent of the precincts uncounted. Stroger has a few percentage point lead.
I have been trying to what the race means. My initial interest in the race was because of the Forest Preserve. The preserve covers some 68,000 acres of woods, rivers, prairie, lakes, trails, soccer and football fields and picnic areas. The preserve forms a green belt around Chicago. The preserve is a wonderful resource, endangered by neglect and mismanagement, and in need of defense and protection. The forest preserve was the reason I got involved in the Sierra Club's work on the Claypool campaign.
Historically, the preserve has been a Democratic Party patronage job dumping ground, one of the resources that the machine could use to sustain its army of ward bosses, committeemen and precinct captains. In a writeup I did on the Forest Preserve, I commented that the old machine system worked, more or less, in an era of expanding U.S. economic power. In spite of the waste and corruption, the machine was able to deliver services. But in the environment of globalization and its program of neoliberalism, the foundation of the machine system has been undermined. While the machine tries to operate as normal, the revenues are not there to both grease the machine and deliver services, and services suffer as a result. The Forest Preserve is a case in point, as a damning study by the public interest group Friends of the Forest Preserve describes in dismal detail. The Cook County hospital system and juvenile justice system also stand out as failures. Claypool made these failures regular themes of his campaign to unseat Stroger.
The Claypool-Stroger race expresses a deep political fracture. John Stroger, 76 years old, represents the old Chicago Democratic Party machine. Stroger started working with the southside Democratic Party in 1953 -- before the first Mayor Daley was elected. Claypool represents a different kind of Democrat, a kind of professional manager Democrat who has promised to "reform" county government. As reported in the New York Times, "'What's at stake here is shifting the balance of power from the regular Democrats,' said John P. Pelissero, a political science professor at Loyola University Chicago. 'Cook County sort of represents the last bastion of the old guard of Chicago politics and where they've hunkered down.'" ("A Stroke Adds to Uncertainty in Illinois Race", 3/18/06). It is unlikely that Stroger, a diabetic and cancer-survivor who suffered a stroke last week and has been bedridden since, will be able to run in the November election. In Cook County it is a forgone conclusion that the Democratic candidate will win, so the real battle is who the Democratic Party will run for any seat. If Stroger wins the primary, and as expected, drops out of the race, 80 Democratic Party committeemen -- the control mechanism of the political machine -- will decide who will be on the party ticket in November. The race is really one between Claypool and the machine.
While the function of the party machine is to keep itself in power, it does this by delivering votes for the Democratic Party. Stroger's power comes from the fact that he can deliver southside votes for Democrats. Elected party positions city-wide, county-wide, state-level and up are beholden to his power. (One irony is that the machine at the same time has a chokehold on the black voters of Chicago, not really representing their interests, but at the same time preventing any significant political response.) The Chicago vote is a vital resource for the Democratic Party in Illinois and nationally, so the party leadership by and large came out to support Stroger. Former president Bill Clinton recorded a radio spot for Stroger. Illinois Senator Dick Durbin endorsed Stroger in the final days of the campaign. Mayor Daley endorsed Stroger. From private conversations though, the support is not as solid as it appears. With no love lost between them and Stroger, Rep. Jesse Jackson, Jr. and Senator Barack Obama had their apparatuses help Claypool behind the scenes. Mayor Daley may face a significant challenge in his 2007 re-election bid; he will need Stroger's support. So he lukewarmly endorsed Stroger, although refused to attack his former chief-of-staff Claypool. Other important Daley supporters like Rep. Rahm Emanuel and David Axelrod supported Claypool.
This struggle within the Party represents a deeper shift though. As the Chicago Tribune pointed out in its editorial endorsing Claypool, "correcting all that is wrong demands new and aggressive stewardship in an era when Washington and Springfield cannot bankroll Cook County's slipshod ways... It's been easier for Stroger to complain that Washington and Springfield don't send him enough dollars. The time of easy money from Somewhere Else is over." (Chicago Tribune, 2/19/06). The old school solution is more tax money; Claypool acknowledges and accepts the new neoliberal climate of starved public sector.
Claypool has promised no tax increases to pay for cleaning up the current county mess. As head of the Chicago Park District under the second Mayor Daley, Claypool undertook a program of privatizing Park District functions, as well as professionalizing staff and re-organizing the district to try and break it out of the patronage system and push more decision-making to the individual park managers. He achieved some success and recognition in cleaning up the parks and revitalizing them. Claypool's work was part of a broader challenge to save Chicago from industrial, Detroitesque oblivion and transform it into "Global Chicago":
In this light, Claypool is the candidate of globalization writ in the fine print of local politics. He represents the kind of candidate that Democrats need, as a party of globalized Capital, to take up the flag of a kinder and gentler neoliberalism. The "no help from Washington or Springfield" is part of the broader fallout of globalization: polarization of wealth, privatization ("contracting out") of public services, the contingentization of work, unleashing the market etc. etc. Claypool is a candidate to make government work -- to make globalization work -- within these accepted new parameters. The Democratic Party's dilemma is that it wants the kind of guarantees that the Stroger machine can deliver, but at the same time needs to re-cast itself in the mold of candidates like Claypool.
Unions supported Stroger because of the jobs Claypool eliminated while at the park district. For the most part, Chicago city unions seem to be hopelessly wandering into the future gazing longingly in their rear-view mirror. Here is a problem of half-measures and false choices. Assuming that the Chicago Park District was better off for Claypool's changes, one has to ask, how is this possible? Why didn't the unions ensure that the parks were clean, beautiful and served the people of Chicago? How is it that fewer and better-trained staff, privatized services, and distribution of management responsibility can deliver better services? One possible answer is that there is nothing holy about unions -- trade unions historically have been an apparatus of worker control, not worker liberation. This is not to say that organizing is hopeless, or not desirable. We have been at this crossroads for some time. How do we have a revolution in the trade union movement so they become organizations of liberation, where members desire to serve not "the public" but their community? And likewise, a revolution in every organization that presents a false choice of old programs and tactics versus worse choices? In the Claypool-Stroger campaign, the false choice is between the old machine where the incentive is the patronage job, versus neo-liberalism, where the incentive is a shrinking paycheck and the terror of unemeployment. A real choice would be where the incentive is joy -- the joy of service without fear no food, no house, no heat, no health care, no education.
In another light, Claypool is an agent of creative destruction -- the clearing the blockage of sclerotic machine politics that mires any hope of change in the muck of graft and patronage. Claypool is the candidate of network politics, the atomization of politics into temporary intersections of interests, of technocratic meritocracy, a dismantler and clearer-away and fixer-upper. And in this light, Claypool is an agent of a kind of progress. The old system cannot be sustained; it is collapsing under its own top-heavy weight. So how will the collapse be managed, to what final end? If Claypool wins, and pushes forward his program, some political space will be opened up for greater maneuvering and more creative and humane solutions. I think.
Whether the process can be fought to its conclusion is to be determined.
jd
Cook County voters went to the polls yesterday (3/21) to vote in the Democratic Party primary, of which the most controversial contest was for the county board president seat. John Stroger, the incumbent was challenged by a county commissioner, Forrest Claypool, seen as a reformer. The race has indeed been close -- as of this writing, the Cook County Board of Elections suspended vote counting last night, with about 15 percent of the precincts uncounted. Stroger has a few percentage point lead.
I have been trying to what the race means. My initial interest in the race was because of the Forest Preserve. The preserve covers some 68,000 acres of woods, rivers, prairie, lakes, trails, soccer and football fields and picnic areas. The preserve forms a green belt around Chicago. The preserve is a wonderful resource, endangered by neglect and mismanagement, and in need of defense and protection. The forest preserve was the reason I got involved in the Sierra Club's work on the Claypool campaign.
Historically, the preserve has been a Democratic Party patronage job dumping ground, one of the resources that the machine could use to sustain its army of ward bosses, committeemen and precinct captains. In a writeup I did on the Forest Preserve, I commented that the old machine system worked, more or less, in an era of expanding U.S. economic power. In spite of the waste and corruption, the machine was able to deliver services. But in the environment of globalization and its program of neoliberalism, the foundation of the machine system has been undermined. While the machine tries to operate as normal, the revenues are not there to both grease the machine and deliver services, and services suffer as a result. The Forest Preserve is a case in point, as a damning study by the public interest group Friends of the Forest Preserve describes in dismal detail. The Cook County hospital system and juvenile justice system also stand out as failures. Claypool made these failures regular themes of his campaign to unseat Stroger.
The Claypool-Stroger race expresses a deep political fracture. John Stroger, 76 years old, represents the old Chicago Democratic Party machine. Stroger started working with the southside Democratic Party in 1953 -- before the first Mayor Daley was elected. Claypool represents a different kind of Democrat, a kind of professional manager Democrat who has promised to "reform" county government. As reported in the New York Times, "'What's at stake here is shifting the balance of power from the regular Democrats,' said John P. Pelissero, a political science professor at Loyola University Chicago. 'Cook County sort of represents the last bastion of the old guard of Chicago politics and where they've hunkered down.'" ("A Stroke Adds to Uncertainty in Illinois Race", 3/18/06). It is unlikely that Stroger, a diabetic and cancer-survivor who suffered a stroke last week and has been bedridden since, will be able to run in the November election. In Cook County it is a forgone conclusion that the Democratic candidate will win, so the real battle is who the Democratic Party will run for any seat. If Stroger wins the primary, and as expected, drops out of the race, 80 Democratic Party committeemen -- the control mechanism of the political machine -- will decide who will be on the party ticket in November. The race is really one between Claypool and the machine.
While the function of the party machine is to keep itself in power, it does this by delivering votes for the Democratic Party. Stroger's power comes from the fact that he can deliver southside votes for Democrats. Elected party positions city-wide, county-wide, state-level and up are beholden to his power. (One irony is that the machine at the same time has a chokehold on the black voters of Chicago, not really representing their interests, but at the same time preventing any significant political response.) The Chicago vote is a vital resource for the Democratic Party in Illinois and nationally, so the party leadership by and large came out to support Stroger. Former president Bill Clinton recorded a radio spot for Stroger. Illinois Senator Dick Durbin endorsed Stroger in the final days of the campaign. Mayor Daley endorsed Stroger. From private conversations though, the support is not as solid as it appears. With no love lost between them and Stroger, Rep. Jesse Jackson, Jr. and Senator Barack Obama had their apparatuses help Claypool behind the scenes. Mayor Daley may face a significant challenge in his 2007 re-election bid; he will need Stroger's support. So he lukewarmly endorsed Stroger, although refused to attack his former chief-of-staff Claypool. Other important Daley supporters like Rep. Rahm Emanuel and David Axelrod supported Claypool.
This struggle within the Party represents a deeper shift though. As the Chicago Tribune pointed out in its editorial endorsing Claypool, "correcting all that is wrong demands new and aggressive stewardship in an era when Washington and Springfield cannot bankroll Cook County's slipshod ways... It's been easier for Stroger to complain that Washington and Springfield don't send him enough dollars. The time of easy money from Somewhere Else is over." (Chicago Tribune, 2/19/06). The old school solution is more tax money; Claypool acknowledges and accepts the new neoliberal climate of starved public sector.
Claypool has promised no tax increases to pay for cleaning up the current county mess. As head of the Chicago Park District under the second Mayor Daley, Claypool undertook a program of privatizing Park District functions, as well as professionalizing staff and re-organizing the district to try and break it out of the patronage system and push more decision-making to the individual park managers. He achieved some success and recognition in cleaning up the parks and revitalizing them. Claypool's work was part of a broader challenge to save Chicago from industrial, Detroitesque oblivion and transform it into "Global Chicago":
Other arms of city government are delivering impressively on the civic campaign to give Chicago the amenities and services it needs to compete in the global arena. The park district, once a patronage pit, has become a professional service that has literally greened the city.
...
Daley persuaded the state legislature to give him control over the park district in 1993 and the school system in 1995. He created a corporate style of management in each, with a board and a chief executive, and appointed two of his best managers, Forrest Claypool at the park district and Paul Vallas at the school system. Neither had experience in their new areas, but both were former city hall officials with good track records and, more important, good relations with the mayor.
...
Both agencies underwent a thorough turnover in top management, with Claypool and Vallas hiring top staff with strong personal loyalties to the two executives. They quickly erased the two systems' budget deficits, partially through downsizing, efficient management, and contracting out. Between 1993 and 1997, Claypool cut the park district's total staff by 27 percent, from 4,938 persons to 3,577... The park district increased its spending on two core functions, recreation and landscaping, from 14 percent to 29 percent of its budget. (Richard Longworth, "The Political City" in Global Chicago edited by Charles Madigan, Chicago: University of Illinois Press, p. 80)
In this light, Claypool is the candidate of globalization writ in the fine print of local politics. He represents the kind of candidate that Democrats need, as a party of globalized Capital, to take up the flag of a kinder and gentler neoliberalism. The "no help from Washington or Springfield" is part of the broader fallout of globalization: polarization of wealth, privatization ("contracting out") of public services, the contingentization of work, unleashing the market etc. etc. Claypool is a candidate to make government work -- to make globalization work -- within these accepted new parameters. The Democratic Party's dilemma is that it wants the kind of guarantees that the Stroger machine can deliver, but at the same time needs to re-cast itself in the mold of candidates like Claypool.
Unions supported Stroger because of the jobs Claypool eliminated while at the park district. For the most part, Chicago city unions seem to be hopelessly wandering into the future gazing longingly in their rear-view mirror. Here is a problem of half-measures and false choices. Assuming that the Chicago Park District was better off for Claypool's changes, one has to ask, how is this possible? Why didn't the unions ensure that the parks were clean, beautiful and served the people of Chicago? How is it that fewer and better-trained staff, privatized services, and distribution of management responsibility can deliver better services? One possible answer is that there is nothing holy about unions -- trade unions historically have been an apparatus of worker control, not worker liberation. This is not to say that organizing is hopeless, or not desirable. We have been at this crossroads for some time. How do we have a revolution in the trade union movement so they become organizations of liberation, where members desire to serve not "the public" but their community? And likewise, a revolution in every organization that presents a false choice of old programs and tactics versus worse choices? In the Claypool-Stroger campaign, the false choice is between the old machine where the incentive is the patronage job, versus neo-liberalism, where the incentive is a shrinking paycheck and the terror of unemeployment. A real choice would be where the incentive is joy -- the joy of service without fear no food, no house, no heat, no health care, no education.
In another light, Claypool is an agent of creative destruction -- the clearing the blockage of sclerotic machine politics that mires any hope of change in the muck of graft and patronage. Claypool is the candidate of network politics, the atomization of politics into temporary intersections of interests, of technocratic meritocracy, a dismantler and clearer-away and fixer-upper. And in this light, Claypool is an agent of a kind of progress. The old system cannot be sustained; it is collapsing under its own top-heavy weight. So how will the collapse be managed, to what final end? If Claypool wins, and pushes forward his program, some political space will be opened up for greater maneuvering and more creative and humane solutions. I think.
Whether the process can be fought to its conclusion is to be determined.
jd
Monday, March 13, 2006
Complexity and Goethean science
From Daniel Wahl's "Zarte Empirie: Goethean Science as a Way of Knowledge" (Janus Head 8(1), 2005):
It is in the process-orientated understanding of the relationship between the whole and the parts that Goethean science and complexity theory meet. Both sciences understand the cyclical rather than linear causality that makes the part and the whole depend on each other in the symbiotic relationships of co-evolution. Both Goethean science and complexity theory are holistic sciences as they conceive wholes as being more than the sum of their parts. Both are paying attention to the interactions and dynamics of the whole and focus more on quality than quantity.
Saturday, February 18, 2006
Cook County Forest Preserve + Enviro fantasy
A couple more short papers on my website:
The Cook County Forest Preserve - somewhat timely in that the primary for Cook County board president (who also is president of the Forest Preserve District board) is coming up March 21, 2006.
Green Town - an environmental fantasy about Chicago.
jd
The Cook County Forest Preserve - somewhat timely in that the primary for Cook County board president (who also is president of the Forest Preserve District board) is coming up March 21, 2006.
Green Town - an environmental fantasy about Chicago.
jd
Monday, January 30, 2006
Papers on environmental issues
Here are links to some papers I did for an environmental issues course:
Biodiversity
Capitalism as an environmental issue
Human population and ecology
jd
Biodiversity
Capitalism as an environmental issue
Human population and ecology
jd
Monday, January 23, 2006
Broken promises
"Yet as governments prepare for the 2005 UN summit, the overall report card on progress makes for depressing reading. Most countries are off track for most of the MDGs [Millennium Development Goals]. Human development is faltering in some key areas, and already deep inequalities are widening. Various diplomatic formulations and polite terminology can be found to describe the divergence between progress on human development and the ambition set out in the Millennium Declaration. None of them should be allowed to obscure a simple truth: the promise to the world’s poor is being broken."
From the overview to the United Nations Development Programme's Human Development Report 2005
From the overview to the United Nations Development Programme's Human Development Report 2005
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