Thursday, November 19, 2009

Wednesday, November 18, 2009

δύναμις (dunamis)

I haven't spoken to this for some time now, but I want to take a moment to return to my pet theory of energy as currency. I have bounced around a few different places and after several compilations, edits and other editorial slight-of-hand, I think I'm ready to deliver the goods...or at leasta beta version.

O~O~O
A major part of the current economic problems are derived from the current uncertainty of the worth and ownership of various real estate backed debt packages. In short, there is no shortage of doubt about how much things are presently worth, actually. Money can be thought of as a placeholder for the amount of energy in the social system. Adapting fromprevious policy, and some current thought, it might be useful to reestablish a hard currency and take the ambiguity out of the situation. Obviously we can't go back to the gold standard, there just isn't enough to actually cover all those T-bills.

The current theory of wealth is that something has value because it is rare. Gold is the perfect example. Gold is very difficult to come by. Gold is also next to useless.With the exception of some very specialized, advanced applications in electronics, you can't do much that's useful with gold. Its too soft and too heavy for anything but ornamentation. In the more openly superstitious past it was credited with supernatural value, but the simple fact is that the very qualities that make it great as a currency also make it useless for pretty much everything else. So why does gold still command such economic power that certain people still want to go back to using it as the backing of currency? Habit, mostly.That said, let's examine the basic argument for the gold standard. The idea of having something behind currency is appealing. If nothing else it gives you a sense of having something stable and valuable, something tangible. On the other hand, if gold is essentially worthless, why would it be any better than fiat currency? Well frankly it isn't. In real terms, gold is only valuable because we've decided it is, or rather we have never thought about asking why, about challenging that notion of value the way we have challenged so many other “facts” of life. It was once accepted that the earth is flat, women were essentially children in thought and feeling and that the sky was an immense crystalline sphere; the whole of our modern world is founded upon the challenging, the testing, of these and other such ideas.
So how do we gain the benefits of a solid, hard currency without falling for the fallacies of perceived value? We must be completely objective, as far as our power of reason will allow, and look for some thing that has genuine utility, genuine value in practical terms of productivity. It has to be a universally valued commodity, and it would be better still if this standard was one that could be adopted universally. The situation would be further helped if said commodity, like the concept of wealth itself, didn't exist in a strictly finite supply. That supply should be finite at any given moment, but subject to increase with sufficient investment, bearing in mind of course that investment must yield profitable returns; this is to say it must increase the over all supply and availability of wealth in the system.

This is important because basing a currency on an absolutely limited supply of anything creates the same circumstances that led to the creation of the fiat currency. Eventually productivity (which generates wealth) leads to consumption, specifically consumption of foreign imports which will eventually lead to there being more of your currency in circulation than can be supported by a given quantity of any single commodity, or eventually any combination of multiple commodities. On the other hand, if the supply isn’t limited at any given moment then you’re currency is effectively valueless.

So what fits the bill? Energy. Not petro-dollars; hydrocarbons (oil, coal, etc.) are just a storage medium, just as carbohydrates (sugar) or lipids (fat) store energy in various living organisms. We want to address energy as a substance in it’s own right: the basic unit of measurement of energy; the joule.

All goods and services can be described by the amount of energy required to produce/provide them to the market. From the amount of inherent energy in them, to the cost of extraction and processing, to transportation and even advertising, everything can be described in terms of what it takes to make it happen and get to the consumer. Differences in processes will result in tremendous motivation to pursue the greatest possible efficiency in order to provide products at a lower cost than competitors, thus helping to maximize profits without necessarily increase costs at point of sale.

All nations have access to energy resources; some are richer than others, due to variables such as territory (sunlight exposure), climate (wind strength) or reserves of stored fossil fuels. However, each has access to a continuing supply of new energy each day, and that energy can be tapped just like gold, and used to engage in global commerce. The stability of an energy-backed hard currency removes uncertainty, establishes universal value standards, eliminates the inequities created by various exchange rates and essentially solves the Triffin Dilemma by not having a single national currency employed as the global reserve. Everyone has got the same money and productivity becomes the sole defining factor in creating wealth.

The people who stand to derive the most immediate benefit are the Third World countries. The G7 have the technology and capacity for manufacturing, and the Third World provides a ready market for the technology and services that will allow them to begin energy production. It's a cheap buy that will immediately yield tangible results for their populations in terms of wealth garnered by delivering early excesses to developed nations while building the internal infrastructure necessary to make use of the available energy themselves in terms of manufacturing, heat, lighting and transit; all this creates demand for workers, thus providing the desperately needed employment that will further spur domestic markets for goods and services. Thus we convert political capital into monetary investment, which yields energy that becomes the basis of the new currency.

Once production has gotten under way, domestic marketing can be targeted inside the G7. The demand increases exponentially, ramping production and boosting productivity, thus spending. It's Henry Ford's basic principle, you pay people enough to buy the goods they make for you. Initial orders within the G7 will almost certainly be from the public sector, but Public Relations and cost effectiveness will bring the private sector in quickly. Once the average consumer starts producing power as well, the cycle of inflation-production takes hold.

With the basic mechanism outlined, we are obliged to look to the political considerations, especially in the United States, which is where the entire process is going to have to begin. The majority of the voting public in the developed world has an instinctive liking for the idea of a currency that is backed by something; they neither understand nor like the idea of floating currency. Currency isn't a sovereignty issue, although on the surface it does look like one. You aren't surrendering control of anything and the argument can be made, easily, that everyone else is following your lead. All you need to do is remind people that they'll be able to essentially make their own wealth; this engages the profit motive.

The point, again, is that we're shifting the focus of wealth, of available resources away from scarcity to production. Since energy is the key requisite for all production and service, having more of it available drives down costs; at the same time greater energy production increases your wealth, allowing you to have more of it available for use. In short, its like printing money, except that the money is actually backed by real value (energy).

The obvious push back on such an initiative would be from those who benefit from wealth based on scarcity. While anyone might have oil or gold on their land, the quantity will be limited by definition. Wind and sun, on the other hand, never run out; tapping energy freely from the environment would be tantamount to printing your own money, with the exception that, being backed by real energy, it would have exactly the same worth in the system.

But doesn't scarcity define wealth? If the amount of energy available is effectively limitless and everyone can tap it, would the currency then be rendered valueless by abundance? A built-in inflationary loop?

Not necessarily. In the first place, the amount of energy is going to be constantly consumed, as well as generated, thus remaining at a functionally stable level from day to day. In the second, while even a small net gain would result in an inflationary progression,continual production of energy will reduce the cost at point of sale through simple supply and demand; plentiful energy reduces the cost of production. This applies both the power needs of production and the cost of materials when measured in terms of energy cost to produce and transport.

Now we draw it together: energy as the medium of wealth causes an abundance of energy to inflate the energy-backed hard currency, while that same abundance also continually drives down the cost of production, thus reducing prices at the point of sale.

How do you store the energy entering the system? Realistically, you don’t do this very much on a wide scale. Goods can be seen as stored energy in our model, but once you have a product you cannot, normally, easily convert this back to energy. Exceptions can been shown in agriculture, but a leather coat cannot be efficiently reconverted back into production energy. This is where currency enters the picture. To be more specific, what we are saying here is that it isn’t necessary to store vast amounts of unused energy in the system in a fuel/battery format. Because we are relying on productivity rather than scarcity, we simply agree that currency markers will be redeemed, in specie by the government, in the order in which they are presented, by tapping the production cycle. We can do this because we know that the renewable supply will continue to produce with as close to absolute certainty as is possible.

One of the core ideas behind a hard currency is that the government only circulates enough markers to cover what's in the treasury. If you go to an energy backed currency, how do you determine exactly how much there is in the treasury? You can calculate this figure on the basis of two knowable numbers; the amount of stored energy reserves you have in terms of hydrocarbons and nuclear fuel and the amount of energy produced from your renewable facilities on average.

The logical place to begin is by establishing your known energy reserves, i.e., coal, oil, natural gas, uranium, and anything else that is a static, naturally occurring deposit of recoverable fuel. Common sense says you might not be able to establish the absolute supply because it extends beyond current detection. That's fine, you set a hard figure of what is known and adjust your tally upward as new resources are revealed or developed. Finally you tally the amount yielded from your renewable sources in a day, on average for a given fiscal year.

Once we’ve determined how to establish the contents of the treasury, we can begin figuring out the best possible way to make this work for the people at large, in order to both promote greater productivity and generate political will in wealthy nations such as the United States.

Governments begin investing in production of energy, by investing in renewable energy capture projects (wind, solar, etc). Tax payer funds are used to add to the amount of energy in the system, with revenues from production rebated to them on a monthly basis, minus tax on income. These returns add to the over all energy-backed currency value of the system, being stored as cash in banks (where it will earn interest)while the tax revenue is deposited by the government. Obviously, this plan works best in areas of fairly low population with plenty of environmental energy for capture.

At this stage, we turn to the matters of efficiency and productivity. Simply put: The citizens (consumers) are best served by being as efficient as possible in order to reap the largest possible rewards from production returns. Add to this the prospect of privately adding additional energy to the system, in return for further reimbursement, and you encourage even greater productivity.

The question that might arise that this would lead to everyone just generating energy instead of building goods and providing services. The answer is no. Simply because a private citizen could sit back and do nothing but collect on energy production, does not mean that they will. There will continue to be a demand for food, clothes, houses, transportation and luxuries. Someone will meet these demands because it is profitable to do so. Even if we reach a point where energy/currency production far exceeds consumption and provides an essentially free pool of capital exchange, there will still be demands that will need to be met, however little it may cost to do so.

On the other hand, a certain amount of mass-production may go out. With an abundance of energy-backed currency, many people will prefer to go into smaller scale, craftsmanship oriented production. Since essentially anyone could create a generic, mass-produced product at little cost, there could easily be a renewed focus on the craftsmanship of a particular commodity. This could lead to a renaissance of The Artisan. As energy is captured/produced, and used to back additional currency, you have to put that currency directly into the hands of the producers. In short, you have to make sure that every extra joule put into the system gets banked, where it in turn accrues interest and getsloaned out.

With large amounts of energy constantly being captured and stored, a continually growing supply of stored energy driving down costs, and the power of compound interest acting as a force multiplier, an economic system based on an energy backed hard currency would become supercharged; a pool of almost freely available energy/wealth, underpinned by constant production, provided that production exceeds consumption as the general rule.

Using this model, we can easily imagine a society, on a global scale, where eventually anything becomes possible simply because the energy/wealth is available to be thrown at it. Inefficient, cumbersome beginnings aren't prohibitive and open the door to costly scientific and technological Research & Development.

Bring Out You're Dead!

Okay, so the administration is commencing (finally) the prosecution of the detainees currently being held to account for the 9/11 attacks.

My own opinion on the prosecution itself is simple: about time. Of slightly more interest in the public forum (at least to the current herd of Elephants) is the decision of Justice to pursue the trial in old New York itself, practically in the shadow of the WTC itself. According to Faux News, this is the next sign of the impending apocalypse...or at least an invitation to "the bad guys" to stage another attack...or for the defendants themselves to do something disruptive (oh noezies!) ...or some other vague thing that we all need to A: be afraid of and B: blame on Obama. On of the chief complaints being raised from this quarter is actually the fear that somehow these men will be acquitted on a technicality; while I am generally loathe to agree with Mike Malloy's rhetoric, I freely admit that the lack of confidence in our system of Justice registered by the wing-nuts is, at the least, annoying. Of course there are also those who feel that we simply should not be extending our legal system and it's rights to these men; the hypocrisy of such people is galling. Are we to take it that we, as Americans, are more entitled simply by virtue being Americans? Asinine, at best.

Other people however have pointed out that while it is certainly possible these men may be released onto the streets of New York, their ultimate fate is unlikely to be much different than with a guilty verdict and we, as a nation, have the obligation to live up to our highest principles. Let me take this moment to recall the storage capacity of the Hudson.

Almost as bad is the rampant doom saying regarding the decision to move the prisoners of Gitmo to Illinois. The facts are rather enlightening and the voices from the locals are overwhelmingly positive; the people in the local in question want this, even as Republicans do their level best to monger fear and shout down the plan.

Once again...I am forced to recall my study of The Ethics which in turn forces me to say again, "If wish to be a just people, we must practice justice."

Monday, November 16, 2009

Tastes Like Chick




...aside from my usual annoyance at the religious, there are some people for whom I have to reserve a special measure of dislike. One such is Jack Chick, a comic artist who has elected to ply his trade as an evangelical. You may be familiar with his work, his little palm sized comics turn up in many, many places. Just now I found one sitting in a public toilet, on top of the paper dispencer...admittedly this is where I have, almost without exception, found his "Chick Tracks"...I won't go quite so far as to say that this is the most appropriate venue for his...work. I will happily suggest it indirectly however and let you reach your own conclusions.




Obviously I have a bias. I personally find his work offensive, chiefly because the man is quite happy to deride the beliefs of others and cite archeological, anthropological or historical data to support his attacks...yet never seems willing to provide any sort of similar evidence as to why his own particular brand of primitive superstition is immune to such arguments. Additionally, his work universally depicts any person not firmly and vocally in his camp as being either deranged, possessed or themselves an evil and diabolical villain.




I wouldn't even bring this up but I did, as I said, just find another of Chick's skreeds in the toilet.




I think possibly the worst part of this whole enterprise is the fact that the comic art form generally appeals most to children, who are least able to reason for themselves or identify the fallacies in the work. For instance, in this particular...I hesitate to use the word "publication" but nervertheless, Chick has a fatehr and son coming across a group of Muslim men engaged in their prayers at a Mosque. The child inquires about the prayers, the father tells us they are praying to a "moon god" which, no great surprise, motivates one of the men to approach him and address the insult. This of course winds up witht he Muslim being portrayed as a dangerous, threatening fanatic. fear not though, as the good Christian Father now procedes to enlighten us further about a questionable archeological finding (no reference info, of course) and a completely unsupported story about a power hungry Mohammad. Unsurprisingly, after this "revelation" the Muslim man in question abandons his faith, becomes a Christian on the spot and procedes to run back to the Mosque proclaiming this revelation and his intent to evanglize among them.




Vascillation

At some point in the last two weeks an odd thought came to me; have I been drifting too far to the left? Did I unwittingly drink the Kool-Aid and turn into a Commie-bot while ripping on the RNC and conservatives in general? How could I answer this question in an objective manner?

Well it hit me fairly quickly, as I was also bemoaning the basic lack of programming on POTUS, that I could cast my net into new waters and sample the channel which specifically labels itself as "Liberal Radio", on XM 167. I took the waters, as it were and I can only say one thing in all honesty.

Holy shit. Any suspicion that my enthusiasm for Obama and his overall administration thus far qualified me as being a "liberal" was blown completely out of the water. I mean wow. Just over a weak of listening to Mike Malloy and Alex Bunnett has cured me of any such illusions. Listening to Malloy reminds me of the old joke about what happens when you play country music backwards; substitute Limbaugh for Hank Williams. Apparently, according to Micky here, everything wrong in life can be laid at the feet of capitalism; frankly, if you listen to this lefty loonie tune, you can figure out he's a hold-over hippie who is still carrying a torch for communism. Bleeding hell I am tired of "-isms".

So what have I learned? I am hated at both ends of the spectrum and while I still have to politely (or not so much) disagree with both the loonies and the wing-nuts I can at least understand while they both hate each other. I have to return to my earlier position that letting these to waring camps hold the reigns of power is a hideously bad idea. Massive Left-Right political shifts in our national policies are going to tear this country apart and the only way to cure the affliction is the one thing we can't get people to do; we can't get them to actually reason and compromise with one another. This in the age of instant, real-time communication...the irony could gag a goat.

Throughout human history, numerous figures have cautioned against extremes in society. From Taoism to Aristotlean ethics we are again and again advised to avoid extremes...yet the dramatic nature of such draw followers like moths to a flame and even as they are immolated the followers of extremes hurl invective at we more moderate persons for our refusal to abandon our control and grasp of the mean.

If it wasn't for the fact that modern candle flames include nuclear energies, I would be tempted to ask these fools to hurry to their fate a bit faster.

Thursday, November 5, 2009

Election 2009

So as I was going down the road last night, I caught Pete's show and he asked a very interesting question; what do the results of the 2009 elections mean, if anything? Given all the drummed up hype from the radical right about this being a "national referendum on Obama", its a reasonable question.

The short version of the results is that the two governor's races in New Jersey and Virginia both went to the Republican candidates by long and narrow margins, respectively, while the Democrats one each of the House seats up for grabs, even managing to take New York District 23, a Republican stronghold since the Civil War. Finally, the same-sex marriage law passed in Maine was shot down by the locals ballot veto power, by a somewhat narrow margin. The various mayoral races are still being resolved. For purpose of my point, I'm going to stick to the specific issues I've raised.

The first thing that springs to mind is that the political right in this country may want to rethink their "referendum" line, in view of the actual results. While the Republicans did take the races in NJ and VA, they soundly lost the House seats; this could be taken as an indication that predictions of the Republican Party no longer being a national force are valid. I'm not entirely convinced of that, but it could be seen in that light. In my own opinion, I'm given to think that A: the VA race was completely predictable (massive voter drop-off), B: the NJ incumbent was very unpopular and the voters wanted something different without being sufficiently motivated to choose the 3rd party candidate (also not much of a surprise) all while C: the general opinion in national politics remains that the Republicans both screwed the electorate and refuse to help do anything to clean up the mess.

So...why did the Republicans fail in the nationals while winning in the states? For this I return us to the old debate of republicanism v. federalism. Without going into too much history, the basic point is that republicans prefer to see small, localized governance while federalists favor a centralized, accountable organization. Both positions have merits but at the moment I want to focus on the constituencies. In short, what we currently call conservatives or a traditional Republicans are all generally small "r" republicans while Democrats and "progressives" are generally federalists, and each camp is generally motivated to turn out for the issues they feel the most strongly about. In the case of the former it tends to be state and local concerns while in the latter it tends to be national issues.