Psuedo Direct Action – Thames Boat Race Protestor Trenton Oldfield’s Manifesto ROTFL

There are two types of radicals – the real one who undertake interventions, and those who play at it as if it were solely a play activity for the privileged.  Trenton Oldfield seems to have ripped everything on his RAS profile from Richard Sennett and Naomi Klein  and on his website has the most toddlerish list of suggested rebellions you can imagine.  You are not going to believe this one:

  • Setting off Fire Alarms in buildings where we work, perhaps at strategic times, when a particular meeting is meant to happen that will agree the cutting of services, for example? (This action seems morally okay as all the emergency services happily deployed vast numbers to participate in the filming of a Bond movie the other weekend on Whitehall).
  •  If you work in a private company or government department that is helping enclose Our Public perhaps you could work slowly, make mistakes, loose documents, sending large documents to clog up email accounts?
  • If you are a taxi driver can you take the passenger the slowest possible and most expensive route?
  •  If you are a plumber can you ‘store up’ a problem in the office of a conservative think tank office you have been called to? [that one is rather funny however in those places they talk shot]
  •  If you have a tow truck company can you park in front of Nick Clegg or David Cameron’s driveway, accidentaly? Could you tow their car away?
  •  If you ride a bike and it’s difficult to find somewhere to lock your bike (as bike racks are taken away), can you lock it the one of the corporate bikes which now litter our streets everywhere?
  • If you clean the bathroom of someone that considers themselves elite or is an elite sympathiser, like a right wing professor, can you never put loo paper in their bathroom?
  •   If you work in a restaurant where elitists eat, can you serve the food once it is cold or cook the wrong food?
  •  If you are a builder repairing the house of an elitist can you also bug it and share the footage and audio online?
  •  If you are a pest controller and you are called to the office or home of an elitist or elitist sympathiser can you fail at destroying the pest and possibly introduce new pests?
  •   Can you take up the time of a ‘VIP’ you work for by arranging time consuming meetings, asking as many questions as possible? Can you make them late?
  •  If you work in a call centre, can you refund people and find the best discounts? [like that one]
  •  If you are a student and attend a talk, can you challenge the professors? Can you take the stage and highlight to the audience the work they have done in contrast to academia? [good one]
  •  Are there networking events designed for the elites and their sympathisers where you could let off a stink bomb?
  • If you work in audio-visuals for meetings/conferences could you put up the wrong slides, or turn the correct ones upside down and remove cables, rendering the equipment unusable?
  • Could you plan your own government or council made up from people you admire and trust – in similar vain to Football Manager and publish it on the internet?
  •  Are there events like today’s boat race that you could do something similar to Emily Davison with? Is this possible in the lead up to and within the Olympics itself?

To Max Keiser & Stacy Herbert – Sorry Bitcoin is for Suckers

I love Max and Stacy on the Kaiser Report but Max has two key blindpsots – Gold – and its cryptographic equivalent – BitCoin.

Setting aside the rumours for a moment that Max invented it on his show he recently attacked those who said that ‘bitcoin was backed by nothing’ by saying that ‘bitcoin is backed by cryptography’.

Both wrong – all money, nominarian or not, is always backed by the future physical production of goods or services.  That is lesson 101 of the credit theory of money – for a primer see Greabers 5000 years of debt.  Indeed all anti-neoclassicals – of which Max is a prime example – seem to hold to this theory.

Money is advanced as credit, to fund some future operation which will yield a greater output of goods or services to create growth.  Moving into it is the opportunity cost of buying some other good or currency.

To invest in bitcoin mining we need a pc and electricity – they are what back it – so if you were to advance me credit to do so you would need to be sure my mining operation would make money.

However look here for the definitive calculator for  the expected profitability of mining – looking at cost of pc and electricity against return rates from mining – being a late player to the game you can’t make money unless you get the pc for free and the electricity for free – which is why so many bitcoin ops are from botnets.  But if this became universal then bitcoin mining would become a cost free operation mining would go through the roof and we would get bitcoin hyperinflation and a collapse in the currency.  It would be the equivalent of Spanish treasure ships returning from the indies and collapsing the Spanish economy as a result.

Indeed I would challenge someone to do a model of say – 25% of the worlds population getting into bitcoin, what would it do to price per bitcoin or electricity costs for mining?

There is a fallback argument, that bitcoin should just be seen as a store of value and hedge against inflation to other currencies.  That is a better argument, though of course there is no safe haven anywhere any more and any that is seen to be is likely to suffer huge capital flows inwards – such as the Swiss Franc, and in due course suffer a collapse especially as that currency is leveraged.  For this reason paper gold, a phantom is doomed to collapse and be a big a credit moment as a sovereign default (if you do the math of paper gold leverage from physical).  As Warren Buffet says ‘Gold is for Smucks’  – even more physical gold as there is a storage cost- demurrage – so you lose a % of its value every year.

I hear now stories of traders who have thought this through and are doing things like buying farms and forests in places like Scotland as ‘the only safe store of wealth’ .  Not so much a hedge against uncertainty but a forest against it.

Note:  This is in good part a write up of a friendly twitdebate with Stacy.

Planning’s Process Obsession – Need for an Outcome Focus #Planorak #NPPF

I call as my first witness Peter Dudley FRSA of Manchester Business School – From RSA

Public service ‘improvement’ strategies are, in reality, very often measured by organisations’ success in delivering a process, not how lives improve for individuals and their communities…it is third sector organisations that are leading the way in taking a different approach.

In any civilised society there are three main areas that should be of prime concern to the established state: health[environment], education and civil security. The managed provision of services in these areas forms not only a necessary basis for wealth creation but also, and in the most fundamental sense, any claim to legitimacy.

The difficulty with such fundamental provision – especially when it is free at the point of consumption – is that the drivers of adaptive change can become divided. What constitutes a successful hospital/school/prison can look very different to the consuming patient/pupil/prisoner than it does to those who are responsible for its funding. And so, the notion of ‘improvement’ must be open to interpretation….

[for example] schools that prioritise educational dogma over student achievement. Despite major changes in education over the years, a House of Commons Public Accounts Committee report published in 2009 states that 16 percent of the adult population lacked literacy skills and 21 percent lacked numeracy skills at: “levels [that] represent the best approximation to what counts as functional competence for everyday living”.

Or a criminal justice system that seem to have been designed more to ensure a steady supply of prisoners, rather than make any real attempt at rehabilitation or the reduction of crime. Sentencing policies seem to ignore evidence of what works and actively promote re-offending. Our policy approach has resulted in a comparatively high (compared to other European countries) and growing prison population, without much evidence that we are succeeding in resettlement.  So, even before we calculate the cost of re-offending, the government looks set to continue to spend the £3.5 billion or so a year that this costs.

Broadly speaking, all organisations depend upon the ability to create or provide social value. Even the grand institutions mentioned above – however varied and diffuse their formal or legal structures may be – depend for their survival on the ability to convert whatever social value they create or provide into internal organisational value. Therefore, when social values in their field changes, so too, if they are to survive, must their ability to create organisational value from its provision.

Over the last 30 years the mechanism for reform favoured by governments has been the ‘grand initiative’; the National Curriculum in relation to schools, NHS Foundation Trusts and short-sharp-shock sentencing and the privatisation of prisons [The NPPF]. All of these changes are underpinned by the underlying narrative of managerialism, focused on process efficiency and performance, and the propensity to ‘sweat’ the capital asset. This creates at least three problems.

First, although it would be naive to deny that any of these service areas have a significant capital element, this is secondary. The primary asset is human. Sweating the facilitating (capital) asset requires sweating the human asset, which will lead to system failure.

Second, a managerialist attitude to process tends to lead to a narrow focus on performance metrics, initially as proxies for whole system performance but, eventually, as outcomes in their own right.

Third, the notion of improvement is subject to interpretation and will be defined in relation to the core model. As the consuming constituency is diffuse, this will tend to be defined by senior managers and their political masters who are incentivised, either financially or by political expediency, to optimise the processes for which they have performance metrics. All of which means that process optimisation will be prioritised over outcome attainment.

Processes can be endlessly altered in response to emerging changes in social values but the inability to manage the whole organisation towards the achievement of its (primary) purpose will be compromised.

As Geoffrey Vickers, a pioneer in the field of systems practice, said: “The nature of the trap is a function of the nature of the trapped.” This focus on the process of delivery (and its efficiency) to the exclusion of its effectiveness – the extent to which it achieves its purpose – is the trap. Politicians, civil servants and managers become stuck in a mentality where only incremental local ‘improvements’ are possible, and even then only at the expense of causing wider problems. They are, in short, condemned to getting better at doing the wrong thing.

These are difficult and worrying times, which bring challenges that require a great deal of personal, institutional and political will. The third sector (especially) is taking up these challenges…

However, it is not so much the program as their attitude that is important.  By recognising that activity is subservient to outcome, and embedding the structures to support this, any organisation can become more adaptive, more able to learn about itself and its environment and, therefore, more able to make changes that are outcome focused.

The First Political Economy Animate? David Harvey and the Limit to the Limits to Capital

Was reminded in the comments that it was RSA Animate in their animation of a David Harvey lecture that started off this trend which Richard Mc Williams and Now Steve Keen have picked up on.

The David Harvey talk, and the Monopoly Board metaphors for capital accumulation is very good.  But Harvey s approach does have its flaws – and indeed this has had a rather negative effect on the development of radical geography.

In Harvey structure the world is one of over-accumulation.  Capitalists gather too much dosh and have to move it around.  Capitalism shifts crises around.  It is Rosa Luxembourg written by a geographer.

This is fine as far as it goes however it completely neglects consumption – and therefore effective demand and poverty, as well as technology, resources and institution’s.  There are more fixes than spatial (investment) ones important as they are.

The political economy frame from Marxism is helpful to form a structural model of capitalism, but sticking narrowly Marxist box neglects the advance in political economy since and from other schools.  It also has a rather chilling effect on terminology and language creating a narrative impenetrable to the uninitiated.

For example Ikea investing in housing last week was described as a ‘good example of over-accumulation in the primary circuit leading to spillover to the secondary circuit’  – I know what that means but it is obfuscatory and functionalist.  It is simply an example of investment funds shifting to areas with the highest rate of profit where a firm can lever competitive advantage. This approach obscure the short term decision issues from the long-term structural issues issues of economic change.

Having said that there is one spatial fix that is reaching resource limits – agriculture – as now almost all cultivable regions are that was the whole point of my ‘Capitalism’s Last Frontier’  series (see tab on right) which one day I might get around to finishing.

The ‘Financial Whiplash Effect’ – and the Limits of Monetary Policy

Episode 3 of the wonderful Punk Economics Series – this time on the impact of QE feeding into global asset prices and this creating a risk of a ‘financial whiplash effect’ requiring a sharp increase in interest rates in the future.

Comment:  Overall at the moment deflationary forces are stronger than inflationary ones in most economies and the risks of inflation are small other than for food and energy prices.  Though of course food and energy prices are being inflated by the impact of QE on asset prices.

Banks are more likely to fund high returns in merging economies rather than domestic investment – making it a very inefficient tool for relating domestic demand, and with weak domestic demand why invest domestically?  This means very large amounts of QE are needed for a small impact on domestic aggregate demand, and feeding the increase in asset prices also erodes domestic demand in real terms.  The latter effect however is exaggerated as a return to high growth would likley push up the price of scarce assets like oil far more.

This is yet another argument for avoiding overeliance on monetary rather than fiscal policy.  Debt funding fiscal expansion is more likely to fund domestic aggregate demand and have much less of a financial whiplash in the future.

There is a considerable risk here.  If we see modest recovery and more than modest inflation a rise in interest rates could push many with debt underwater – and mortgage foreclosures from a rise in interest rates, and remember it is only the zero bound that is keeping millions afloat,  could see swift debt-deflation.  Without dealing with that debt, and also not allowing moderate inflation to deflate that debt – would could a Japanese like lost 2 decades.  Again another reason why achieving reasonable economic growth should be more important to central bankers than squeezing every last ounce of inflation from the system.