Hudson’s Theory of Economics

Keith had instructed me to post this after he was gone. The following is a highly compressed version of what he considered “the most authentic picture yet of the world economy” as he saw it.

Thanks. Atanu
(atanu@atanudey.com)

Summary

Many economists see the Industrial Revolution (IR) as a model for further lesser expansions of world manufacturing and trade country by country.  The model was — and still is — aspired to by many countries but the first full burgeoning of the IR with its consequences of large profits, subsequent large re-investments and a moving on from one industry to another was confined only to  six countries with England only sightly in the lead.

Although England turned out to be the necessary instigator of it all, the other countries followed rapidly within a few years — all between the years 1780 and 1980. These are (northrn) France, Belgium, Netherland, Germany and America.  A few more European neighbours such as Switzerland and the Nordic countries also started industrialing some of their manufacturing but in unsystenic way.  They are not to be compared with the powerful government assisted copying of products and systems of the IR which Japan, Korea and China undertook before the end of the 19th century and Singapore halfway through the 20th.

Although the Asian Four now export consumer and producer goods quite up to the standard of those made in the Western Six they don’t necessarily make the most technically sophisticated components of those products, nor the scientific discoveries that gave rise to them. Those are still due to leading edge research into all the current areas of scientific curiosity and discovery.  Ninety per cent of all Nobel Prizes in the science fields (excluding economics) are won every year by scientists from one the Western Six.

The same decrepancy may apply as concerning the characteristic mode of production in the new era as we gradually leave the high heat intensity, ‘metal bashing’ era behind and develop carbon-based compounds and software using DNA-type algorithms

There are also a few other countries which already give a high value to scientific research and may well come up with highly creative industries in the future — he three Nordic countries, the three western Baltic countries, Denmark, Switzerland, Austria, Russia, India and the least populous, but possibly the most precocious, Israel.

Continue reading

Keith Hudson Has Passed Away

Dear All,

With a heavy heart it is my sad duty to inform you that I learned from Sue Walker just now that her dad, and our treasured friend, Keith Hudson passed away today morning. We cherish his memory and celebrate his contributions. He enriched the lives of everyone he touched across the world. May his good karma (the consequences of an individual’s actions) continue to echo through time and space.

Peace.

Sincerely yours,
Atanu

Coffee has risen well above tea in the social sipping order in the last 200 years. This is rather in the same way that cigarettes overtook snuff since it used to sit in the great coat pockets of Napoleon Bonaparte and the Duke of Wellington as they faced each other in battle.

Modern Chinese biologists, after three years’ intensive analysis, have discovered a great many more subtle flavours in tea leaves.  Tea DNA is far more sophisticated and surprisingful than the two bog standard version of coffee — arabica and robusta.

There may be no more uniquely new status goods on the shelves but there are certainly delicious refinements of old ones to come, especially when freshly plucked tea leaves are composted with truffles for a year or two, enhancing its social status well beyond that of even the best arabica.

The crucial numbers

There are too many ambitious males — with slightly excessive testosterone in their bodies when born.  This, if anything, is the most egregious fault that affects us today. Nature hadn’t made a mistake during the six million years of living in small groups in the African Savannah, the North American Prairie or the Asian Steppes because no group was viable if growing to more than 80 to 100 individuals at all ages.

This involved no more than a dozen mature males with, on average every seventh or eighth more than usually ambitious.  This meant that as a group leader started making mistakes in old age — that being 40 or even less in those times — then there was always a natural successor to take over.

It is the fifth, sixth or seventh position in the pecking order of a group that is the most crucial.  Those furthest away from the existing leader, can be easily tempted to withdraw their loyalties and throw in their lot with a potential new leader taking shape among them.  This has occurred thousands of times in history once man forsook hunter-gatherer groups for larger bodies.  One epic story will exemplify*.

In 1917 Prime Minister Lloyd George, with a Cabinet of Ministers approaching 20 in number, was losing the war against Germany because he was unable to overrule the Royal Navy in coping with Germany’s U-boat attacks.  He reduced the number to five and changed the strategy totally.  Within weeks, masses of U-boats were sunk and sufficient food and armaments were able to be landed on our shores, turning the trend of the war around within weeks.

Today, however, with too many overlarge organizations in business and government, we have far too many unnecessarily ambitious males who are virtually foot-loose — building up their own departments for want of anything else to do —  until we begin to understand the importance of organization structures.  We’re not far along that path yet.

[*The Standing Committee of the Politburo — that, the Chinese Government — has been reduced from nine members to six in the last two or three years.  This will make the position of the President, Xi Jinping virtually unassailable until the end of his present term, 2020 and probably helps him to persuade the Politburo to extend his term of office further.]

Getting closer to democracy

Now that we suddenly have another General Election coming on us fast on 8 June, an interesting topic for discussion came up on Newsnight last night between an older MP — Tory or Labour I didn’t discern — and the Secretary of the National Union of Students. It was of the increasing reluctance of young people to vote for a House of Commons in which a lot of name-calling is going on — little different from boys’ play-times at junior schools.

What students don’t realise, however, is that serious discussion is also going on in several Select Committees of specialised subjects where about a quarter of the most rational, responsible MPs in the House — from all and any Party — have been selected by informal chairmen, usually already the best informed in their subject. In the last 40 years, these Committees have now built up a reputation for objectivity and fairness and such that they can invite almost anybody they wish for prolonged questioning.

And — fortunately — we don’t have a written Constitution! There is no reason in our case why the reform mentioned above shouldn’t be broadened out into the whole body politic. The civil service already carries out hundreds of Focus Groups every year tapping into English people of all ethnic origins, incomes and both sexes. The result of these help the civil service develop future policies for the most ostentatious arm of the government — the MPs. How much better it will be when the results of these Focus Groups could be revealed to the public so much more quickly than they do these days.

In that case we would be approaching a state of something near to democracy instead of the mark on the ballot paper every few years or so — which often completely misses powerful public controversies building up underneath the politicians’ noses.

A four-ways crossroad

All economists scorn attempts at describing a future world economy. As an economist manque I feel able to avoid the charge by describing an outline of the over 200 nation-states of the world registered with the United Nations in five categories:

1. The ‘Original Six’ and their consequences.  This category comprises England and the five additional countries that responded immediately when a few carpenters rigged a multi-bobbin machine in Manchester that stretched, twisted and span raw cotton into standard cotton thread. The following countries were France, Belgium, Netherlands, Germany and America.

From then on, they dominated world production of cotton thread — then highly expensive — and, since then continued to dominate world trade in all high-value goods that consumers were demanding from about 1850 onwards.   It’s not surprising, therefore, that these six still have the highest standard of living in the world.

The Original Six also hold scientific enquiry, testing and measurement high in their cultural scheme of things.  Their labs cover every possible scientific potentiality and are first onto totally unexpected discoveries as they occur from time to time.  They win almost all the Nobel Prizes for scientific subjects every year.  Whether any or all of the Six maintain their present respect for science in the next 100 years only our descendants will know.

2. The ‘Might Catch Up Ten’ countries comprise the three Nordic countries, the three Baltic countries, Denmark, Israel, Taiwan, Iceland, Australia* and Canada.*.  All have great respect for high levels of education and they all have at least one or two scientific projects in which they have a leading edge and have won at least one or two Nobels — small numbers so far but already greatly disproportionate to their small populations. One or two or these — probably Israel — might well break into the ranks of the Original Six in 100 years’ time.

[*Unaccountably I missed these two from the original and have apologised in the Comments..  These have been added in postscript here for the sake of any reader in future weeks who may read this version first.]

3. The ‘Seven Long-Shots’ comprise China, Japan, Russia, Iran, Saudi Arabia, India and Brazil. All these countries have poured vast investment into science, engineering and technology.   They are basically copiers of technology, not originators.  Scientists from all of these countries have won Nobel Prizes but only in miniscule numbers, greatly disproportionate to their large populations — relatively large when compared with those of category 2.

The chances are that this category, as with the first two, will be locked into much the same relative standard of living as they have now.  There’s unlikely to be any significant change until we finally leave the present metal-based mechanical era and move into a future biologically-based services era — in which the two main services, education and health. These will be be very highly priced — that is, needing an altogether more efficient and fairer taxation system.

As for the remaining 180 countries registered with the United Nations, what can we say? They’re likely to have a very bad time in the next 100 years, not being able to break into trading high value goods.  One or two lucky ones might acquire governments which manage to steer them gently, but swiftly, down a steep population control path. Smaller populations will help to raise their standard of living.  Also, some governments might decide seriously to conserve beautiful environments — and attendant animal life — in their domains. This could attract growing numbers of appreciative holiday-makers from the Original Six — plus, of course, accommodating many more scientific research projects than are carried out now.

The two ways children are controlled

The Biological Environment has a strict Birth Control Policy for all species.  Control by instincts.   In our case, it doesn’t restrict a male at the top of the pecking order in any culture he exists in to any number at all.  For practical, political and social reasons of his own the male concerned will ensure that these cultures will be kept out of the media of the modern nation-state.

Otherwise, males in lesser cultures in any of our advanced countries today can also be restricted by the Additional Environment — the nature and earnings of his job. For this reason, populations in the advanced countries are now taking a nose-dive. Males at the top of their profession may have, let us say, six or even a dozen children.   Those at the bottom — and indeed a growing number of those in the middling portion of the pecking order — are now choosing to have no children.

When economic good times resume, the Additional Environment will peel away and the very strong maternal instinct of the female will emerge at full strength.

Let’s get real again

Critics of gold-standard money point to the fiasco that occurred between 1926 and 1931 when the pound was re-established after the War (1914-1918). It certainly was a fiasco. As a result, this country — leading the way with 40 others excluding America — went off the gold standard for good.

The fiasco was due to one simple mistake.  During the War there had been massive inflation to printing nine banknotes for every four that had been printed before the War.  In 1931, should the value of the pound be re-established at a rate of nine to the price of one ounce of gold, or should it be four? Common sense and John Maynard Keynes said, “Let’s stay real and make it nine to one.”

However, the City of London pressured the Bank of England not to lose face — as they saw it — in order to restore their former dominance and prosperity.  The Treasury didn’t object and so, from 1931, we have had nothing but depression after depression. Each has been deeper and more complex than the last — that of 2008 being the worst yet, and still not understood, never mind resolved.

At least four of the most eminent ex-central bankers have said that they fear a worse mometary catastrophe is coming.  Is it not time we had a world trading currency that is totally out of the hands of governments’ printing machines — digitally or on paper?

Software as a second language

Never mind hackers of whatever age or intent, catastrophes will continually affect the Internet — and increasingly, too — as hard cosmic radiation from space and nuclear radiation from underground rock destroy transistors in silicon chips. As the use of robots rises so will be the need for repeated software editing by experienced software writers — a tedious job indeed — to restore the original coding and performance.

To make sure that this as fool-proof as possible it’s been proposed that modules containing suspected errors can be temporarily removed from the ‘mother’ program and then translated into ordinary language.  Formal syllogistic logic can then be applied.  If no faults are found then the module can be replaced and the next suspected area attempted.

Software of highly complex subjects are going to be particularly difficult to inspect on an ad hoc basis. In the years to come, it will pay research scientists to translate everything they do and describe in their normal ordinary language into digital language also.  Once complete fluency is gained then the inevitable error checking can be done so much more rapidly

“It’s not what you know, it’s who you know that counts”.

Widely believed and cited, the first statement of the above needs amending slightly. An experienced individual who is promoted to a higher position — or who pushes himself forward — also needs a slightly more forceful personality — more testosterone — than the remainder of his group colleagues. Evolution has averaged this out over millions of years to about one every eighth or ninth male. More frequent than this, then political dissentions for leadership ensure that the friends, wives and children of the two gather behind two candidates and the tribe divides into two.

Outstandingly successful leaders need more than experience or forcefulness — they need to be influential. As they are promoted into groups of higher political and business power they will evince many more subtle qualities — responsibility, honesty, intensive work, openness to possible solutions — and, above all, versatility in socialising efficiently with all sorts of other personalities, whether friendly or hostile.

Whereas governments and business leaders can manipulate the enterprise conditions for the rise and fall of the ordinary forceful — every seventh or eighth male — they can do nothing for those who are more likely one in every 70 thousands born. Their personalities were laid down in their earliest years of life by parents, or nannies and are beyond modification.

A brutal future for many

The scrubbage and desertification of large regions of earth’s previous vast panoply of forests cannot be blamed on man alone. Our strategy is the same as all others. We have always eaten enough food to ensure that our numbers expand and thus remain a viable species.

There’s always a crunch point in every species when they start to collapse. Five of our eight billion lack sufficient nutrition to be healthy and carry out a full day’s active work, or to be actually starving. In addition, due to recent medical technology, we also have about another four billion middle-aged people who will remain alive for another 30 or 40 years, taking the total population up to about 12 billion..

Outside about a dozen advanced countries and about the same number that are almost as advanced, the bulk of the countries of the world should now be dispensing ‘next-day’ contraceptives. Otherwise, the world faces several more decades of nasty civil wars, revolutions, attempts at mass migration — and subsequent brutal repressions — and susceptibility to high infectious killer diseases, as the rest of the world imagines that the ownership of choice status goods gives us supreme happiness.

Changing Japanese culture

According to the Economist this week, bullying is rife in Japanese schools where the whole of a mixed class of about 30 sometimes gangs up on one person, boy or girl. It is the biggest cause of suicide for Japanese between the ages of 10 and 19. Teachers sometimes take part in it. The Japanese department of education have tried innumerable solutions since the 1980s but to no avail. How would an anthropologist solve the problem?

A class of 30 is not really a class but a fickle crowd, so he would divide it into three or four separate groups with — strictlyno more than seven members in any of them. Once a group exists it naturally forms a rank order and a leader emerges. Due to the long-laid evolutionary balance of genes and hormones, any group with seven, eight or more members is liable to contain two contenders — usually males — for leadership and political dissention inevitably will occur.

Given an occasional problem by the anthropologist-teacher — say, a maths problem — the satisfaction of each member having a social role under a leader and with a joint challenge soon supersedes the previous bully situation. The teacher could then set up a final contest between the groups — yet another natural activity of early human groups. It would also introduce three or four slightly different cultures into a class that, until then, only had one. That can’t be bad for Japan more generally, can it?

A closer step to death in the Labour Party?

If ever we needed a neat piece of evidence that Jeremy Corbyn, the leader of the Labour Party (LP) is not a liberal, nor indeed interested in the truth or reality, then we had it some weeks ago in the case of Ken Livingstone when he was kicked out of the LP. A past Mayor of London and a stalwart of the LP for decades — and well-read besides — he quoted Hitler’s own words from his Mein Kamph that he had no more evil intentions against German Jews than repatriating them to their country of origin or to Palestine or to anywhere else

Originally he did not intend slaughtering Jews and other ‘misfits’. That decision only came when he became all-powerful President and incessantly advised by Himmler to do so. Once Himmler was in total charge of the operation and propagandised the proposal throughout the country, vast gas-chamber complexes were built and Hitler, alongside a high proportion of the German adult population, went along it without a murmur.

The decision itself was trivial compared with the immense tragedy of the systematic murder of millions of individuals and families of all ages. But by raising this story amid a Labour Party which is currently pro-Muslim, and anti Semitic — and anti-black — as well as all sorts of policy lacunae — Ken Livingstone deserved to be kicked out not for misquoting history, which he wasn’t, but for grandstanding in such a provocative way during a delicate — if not a terminal — stage of the LP.

“Jaw Jaw is better than War War”

“Jaw Jaw is better than War War” — a saying of Winston Churchill that’s often repeated. But Jaw Jaw, or discussion, or even negotiation, is not the complete antidote to war. In 1939 Prime minister Chamberlain had two lengthy agreements with Hitler during personal meetings but the latter still declared war soon afterwards.

The more effective counterpoint to War War is trade. When businesses on both sides of an international argument are exchanging significant volumes of assets between them, then heads of state think more clearly of what their countries might lose in the case of war rather than what they might gain by way of conquest.

Getting to the top

“Keeping up with the Joneses” is often said in a jokesy comment about an individual or a family that’s obviously trying hard to keep up wirh the latest status fashion. It’s not really a joke, though. It’s a natural activity in which almost everyone takes part — even though some will pretend otherwise.

It’s the method by which those with relevant skills in a group, business or government — rise up through the pecking order — usually between 15 and 30 years of age — until becoming the leader of the group or at least in the small cluster of two or three or four personnel who are loyal supporters of the leader.

The resultant social elite in the leading advanced countries comprises about 15% of the total population. What qualities were required of those who make the elite? With little doubt it’s intelligence, but also with many other socialization skills — which, being so many, and subtle with it, are impossible to summarise. We can be confident in fearing nothing from artificial intelligence for a long while yet.

Are you crystalline or fluid?

A few days ago I heard someone on television whose name I have regrettably forgotten who proposed that we acquire two new sorts of intelligence in our old age. One he called ‘crystalline’ intelligence, the other, ‘fluid intelligence’. Well . . . he wasn’t suggesting that two new developments actually take place in tbe brain, but I think I understand what he means.

Being reclining-chair-bound 24/7 and often not having the energy to do much for periods of time I think a lot about the mistakes and embarrassments of my past life but also of the experiences and skills I have picked up along the way. I have been bulking up my crystalline intelligence. At the same time I often find myself with a problem. It may be an intellectual problem or it may be a matter of a book slipping away from me onto the floor at more than an arm’s distance away.

In the past twelve months or so, it seems to me that my problem solving has become more successful. Not only that but the solutions have involved the conjunction of, often, quite disparate elements. So perhaps we have fluid agents that burrow their way this way and that into relatively huge crystalline data blocks fetching out this item and that until, finally, it is able to assemble them into the unique solution to the current problem.  I like the idea.

The one-stop revolution and the wall builders

The industrial Revolution (IR) couldn’t have continued longer than it did — approximately 1780 to 1980. This was when unique consumer goods ran out — that is, status goods, such as expensive clothes, personal ornament and foreign travel — among the 1 billion buying public in the half-dozen or so advanced countries.

The IR can’t be extended into the rest of the world’s population because the remaining 5 billion people would require the injection of 5 times the amount of electricity made, mainly, from fossil fuels. There’s plenty of this available for at least a couple of centuries to come — particularly as shale gas and oil — but there isn’t the capacity for oil multinationals or governments to exploit the reserves fast enough.

Instead, apart from most countries outside the advanced network which mainly trade high-value goods and services, the remaining 180 countries will remain trapped at living standards roughly where they are now until they start reducing their populations significantly. Until then, a “building a wall” policy against foreign immigrants will prevail, as already being amply demonstrated by the EU Commissioners in Brussels, Japan, the UK, and, of course, Donald Trump.

Join the real countrywide trend

Fox-hunting is no more a traditional countryside sport than a number of other activities that were developed in the 18th century by a prosperous middle class as an entertainment. In that respect it ranks alongside croquet, cricket, football (soccer and rugger), game hunting, polo, point-to-point, tennis and a variety of other sports. The Countryside Alliance (CA), which exists mainly to promote fox-hinting has no genuine claim to charity status as many other genuine charities –such as the League against Cruel Sports, Badger Trust or the International Fund for Animal Welfare– do.

The Charity Commissioners are to be congratulated for their unequivocal decision to remove CA from their list. Perhaps it’s now time for CA members to quietly fade away and join one of the many countryside protection and re-wilding organisations that are now becoming characteristic of the new post-manufacturing epoch taking shape around us.

Both right-wing and left-wing are lost in a fog

Why both Conservatives (Republicans) and Labour Party (Socialists, Democrats) are both lost in a fog — not knowing what to decide as policy — is that they haven’t made up their minds about the social pecking order.

Conservatives are well aware of it as a primal instinct. But because most, if not all, of them make full use of it in exploiting social and eonomic inferiors, they don’t draw atttention to the fact in daily life.  Sociaists simply refuse to face what goes on in every organisation — including their own party..

If right-wing and left-wing both admited reality then they could both have natural differenes between them — the argument being what are the acceptable income differentials between succssive classes

The coming end of the EU

What none of the EU politicians and Brussels commissioners dare to confess as we we now come close to starting serious Brexit negotiations is that England plus London need the EU a great deal less than the EU needs us.  Our trade with the EU was already declining years ago.  Yet the EU depends on us a great deal more than ever.

Our exit would be a body blow to the EU if it ever came to that.  The likelihood is that within a week or two of negotiations the European Central Bank will probably agree with everyone else that there is now no known method of bailing out Greece once again. The faintest whisper that Greece will then decide to leave the EU will galvanize Italy to do so, too.  The EU politicians and Brussels commissioners will hang onto power like grim death but, at the end of the day, it’s the mathematics that count.

Identifying pre-terrorists

The tragedy that struck on Westminster Bridge two days ago not only affects three families who have lost their loved ones who were innocently going about their daily business, but was yet another indication that the issue of religious fanatics — Muslim in this case — are not yet being identified early enough in their lives to be medically treated or, at least, taken away from normal society before they become dangerous when adult.

It is said that there are about 2,500 extremist supporters of Islamic State out of a population of about 2.5 million immigrants in this country in the last 20 years.  But in order to keep close surveillance on the potentially unstable would require an enormous secret service.  Our own culture would be very unhappy about this.   It is only in childhood and adolescence that worrisome signals can be recognized easily.

If, for no other reason, additional amounts of expenditure should now be applied to nursery and junior education in order to afford many more teachers and experts.

Kitting-out new ideas

An innovator or just a highly curious research scientist needs other people if his idea is ever to see the light of day. He needs to belong to a close group of friends he can trust — and who trust him — and/or professional colleagues who have both sufficient managerial experience and further contacts with an investor or financial intermediaries such as banks and venture capitalists.

Best of all is if the original creator of a new idea makes direct contact with an investor and is thus already articulate enough in more financial language but also and, most importantly, with a good potential managerial team behind him — or her — eager to carry out the project.

We all have good ideas most days of the week but we invariably become distracted very quickly. That’s the way the brain works. It is always looking for new information. The ideas that actually persist in the brain and have support of what is described above and get to the market place must be fewer than one in a million.

Pushing human nature forward

If a scientific research group of, maybe, a dozen members, A to L, decides it badly needs three foreign researchers with special skills then, other things being equal — e.g. funding — then the leader, A, will invite them. Because such a research group has a precise objective then new members M, N and O will find their acceptable rank order fairly quickly.

Not so if, by any chance, the new group, A to O happen to live near one another and develop a rich social life between them. If A to L tend to come from one culture — the indigenous one — and if M to O from another then there are likely to be problems. This is due to the enormous number of differences in the way that each group expresses itself — trivially  or substantively.

There has been a cloudburst of major discoveries about human nature in the last few decades. The quicker these get into the curriculums of schools and universities the better.

The edgy Middle East

The Saudi Arabian royal family almost succeeded two years ago in bankrupting America’s nascent shale gas industry. It came very close. Over 2,000 shale wells were priced out of existence and only abut 500 were profitable. However, those that remained have been assiduously developing all sorts of improvements and, today, can make as much profit as those of two years ago.

From now on, the Permian Basin being as extensive as it is — occupying almost the total width of the country — and investment funds of the oil majors being as large as they are, then we can be certain that the Saudi Arabian oil and gas fields will not have the same price-setting powers that they once had — or that they thought they had. Furthermore, Saudi Arabia is going to use its large national surplus in order to pay for the education and training of its young people — now clamouring for attention and relevant jobs.

All this is yet another busted spoke in the wheel that we call the Middle East. The whole region is edging towards some sort of catastrophe.

Saving the komodo . . . saving ourselves

Had the komodo dragon been another animal that peacefully grazed on the African savanah or the Asian steppes then it would undoubtedly have been extinguished — along with the woolly mammoth and many other species — by early man with his atlatl and, later, bow-and-arrow.

It is fortunate indeed that the komodo survived because it may be the answer to one of the most serious problems now facing man — the resistance of many bacteria, such as tuberculosis, to the limited range of anti-biotics that biologists have been able to develop so far. It now turns out that the bloodstream of the komodo is awash with venal bacteria such as Staphylococcus aureus, but these are kept to ultra-microscopic unharmful quantities by a supervisory body of at least 28 special peptides which act as if they were anti-biotics.

If one dragon bites another then the recipient can quickly make whatever special peptides it needs to counter the bacteria entering its blood-stream. However, if it bites a prey then the latter will either die almost instantly or within an hour or two, having no ability to resist the fast multiplying bacteria in its blood-stream.

We’ve saved this komodo dragon but have there been other ‘komodos’ we haven’t been able to — not realizing at the time of the benefits it might have had. We might never know.

A new species of higher intelligence?

In his comment to my blog about man dividing into two breeds, and possibly two species ultimately (“Will we become two species?” 26 February), Arthur Cordell reminds us of the brilliant science fiction writer, Kurt Vonnegut and his book, Player Piano written 50 years ago. It was then just a glimpse of an amazingly prescient mind. Today, we know from scientific research that it has happened in the past. There’s no reason why it might not happen again.

In fact, 50 years ago there were four different breeds of man — Homo erecctus, Home Neanderthalensis, Homo Denisova and Homo Sapiens. There is but one now but that would be able to divide into two different breeds if the environment threw in a new factor to which only one of the breeds could respond abundantly.

Today, when a highly complex economic system is overlaying the natural environment a new selective factor might be coming to the fore — high educability or intelligence. The signs are, in the advanced countries, that this is becoming important and a division is already occurring.

Observing the next era

So far man has lived through three grand eras — hunting, agriculture, metals-based industry. Each one has a characteristic social structure — small groups, massive pyramids with strong personal weaponry guarding the leader, dense urban cities congregated into nation-states much smaller than empires because they are becoming complex to govern.

There is much evidence and anecdotal comment that it’s now the turn of the nation-state to crumble. The most obvious evidence of a new social structure just dawning is that there is a fantastic burgeoning of specialist jobs, each with its own hierarchical power structure. Each silo has a leaders and a top small community of two or three or four and it is this group that seeks privileges from the government and the regulatory bodies of the day.

Due to increasingly intensive global business competition in the years to come, profits will tend to zero, thus normal saving will not be taking place. Investment in scientific research can only come from government taxation. Dispersal of funds to different projects is something that various scientific research bodies do already.

What else can one say about the new mainly-services era? Not a lot. Too much is still unrevealed. It’s a fascinating prospect for any younger reader.

Where terrorism is coming from

A recent detailed study reveals a significant difference in the causation of acts of terrorism between those immigrant Muslims — or sons of immigrants — when it is high among those who come from localities of high Muslim density or low from those whose families are well scattered among the host population. Birmingham, for example, gives rise to far more terrorist acts than Manchester. Even though the latter has a far higher population, its immigrant homes are far more widely distributed.

In the former case a prone individual is exploited by extremist networks and groups around him — as well as being trained and given resources — and taken onwards to feelings of greater intensity. In the latter case, without the ‘support’ from others, planned projects tend to falter along the way.

The report, appearing in this week’s Sunday Times, was written by David Anderson, until recently an independent reviewer of terrorist legislation. He covers almost 400 offences and 269 individual convictions from 1998 to 2016.

Bill Gates is wrong about taxing robots

When someone as rich and notable as Bill Gates makes a suggestion you assume that it has been well thought through and holds water. He’s made a suggestion on the robotics problem. If automation continues to displace normal human jobs, why not tax the robots — just like normal employees?

If, however, you propose taxing the robots sufficiently to cause the human jobs to be retained then your tax becomes a subsidy and a small number of workers benefit from higher wages. But the price of the product necessarily goes up.

When the price-hike subsequently cycles into the general economy it means that all customers are paying a little bit more for everything than they otherwise would have done. It’s so little that government politicians affect not to notice it. Nevertheless it means that the general standard of living of the population is diminished by a little bit.

Why large organisations always fail

The huge difference between the large business corporations of today — which effectively set the economic scene for the whole world — is that each of them only have one ambitious leaders at the top. Bearing in mind that every hunter-gatherer group depended on having at least one ambitious person per ten or twelve mature adults, then where are all the ambitious males in a modern corporation?

They are, of course, scattered about at all levels within a large corporation — indeed, in every very large organisation — for example, the UK civil service, or the National Health Service. All the ambitious males, frustrated by lack of sufficient routes to the very top do the next best thing and build up their own departments in order to gain personal power — and, of course, earnings.

Ever since the beginning of civilization abut 8,000 years ago its by-product, empires, have never lasted for long. Internal inefficiency grows, as does dissention between frustrated males. Their demise is inevitable. A warning sign to prime ministers and chief executives? Not that you’d notice so far.

Trapped populations

China and half-a-dozen of the most advanced countries of the world (England, France, Belgium, Netherlands, Denmark, Germany and America) can make all — repeat, all — of the latest high-value status goods and services that the whole world — repeat, whole world — can afford.

This means that the remaining 180 countries will only be able to make reconstituted lower-value fashions and versions of these goods and services. The businesses of the 180 countries will have nothing to offer the businesses of the above first mentioned, but only for businesses and consumers in similarly inferior countries. In other words, the standard of living of the 180 countries will become trapped at various levels below — sometimes well below — those of the advanced countries.

This will apply for at least the next 150-200 years until the governments of the 180 countries adopt de-population policies seriously enough to compensate them for their poor economies

Sympatry all over again

After 40 years of a governmental one-child per family policy China is finding it difficult to raise the worker/retired person ratio in the population — and thus pay for the latter’s welfare and old age pension.

Here in Western Europe there’s been a similar vast decline in fertility even though it’s not governmentally imposed. It’s simply the fact that young adults’ wages have declined so much over the past 40 years that many would-be parents can’t even afford one child while they are saving for a deposit on a house. An average of just over two children per family — necessary for replenishment — has long gone in almost all countries in Europe. America is now just on the cusp of it now.

A counry’s population can go down, even to the point of extinction, or it can totally recover. Or — a big or — it can go two ways simultaneously — part of it disappearing, part of it growing again — as discussed in my recent blog (Will we become two species?” 26 February)

If we are to survive for a lot longer

It cannot be emphasised too much that modern man is as much a hunter-gatherer as he and his predecessors were 10,000 years ago, evolutionarily trimmed by the exigencies of living on the African savannah for millions of years beforehand.

The result of all that? Most anthropologists are fairly united in saying that a hunter-gatherer clan of more than 100 or 120 individuals didn’t exist without splitting into two smaller groups. At around that maximum figure, then there’d be about a dozen young and mature adult males in which a crisis would be building up as to who was to be the next leader. Around a successful leader, able to remain in power for more than a short time, then there would need to be a particularly loyal group of two or three supporters who would be guarding against any further take-over of the leadership.

And that this is precisely which we find in all organisations of the modern world, whether of governments, businesses, organised religions. charities, scientific research, sports and entertainments. It’s always the case that there is one leader only and that he or she is then supported by a small group of loyal followers who make sure that strategic decisions are conveyed decisively throughout their respective organisations.

All this is beyond coincidence. This is a subject that needs a great deal of further study if we are to survive a great deal longer.

. . . . On the other hand

Despite the claim made in my posting yesterday (“Will we become two species?”) an equally logical case can be made out that two co-existent populations can never occur, at least in an advanced country. This is that in times of increasing hardship for the majority and the poor, the number of voluntary charities increases substantially.

Most of these are faith-based. Though they ensure more than ever before that everybody who needs help is assessed at least once and, in practice, many times, they don’t have the effect of increasing worshiping congregations.

What it does mean, however, is that in the years to come any individual can be repeatedly identified as being what Victorians called a ‘deserving person’. Sooner or later every average-to-poor person is able to be helped — so long as he has the intelligence and social skills — to up through the pecking order to find his natural group for both work and relaxation.

Will we become two species?

For years I’ve also been writing that a serious social divide is taking place in the US and the UK — having very similar economies — but also in Germany, Holland, Belgium, and France. In today’s Sunday Times, concerning the US, Irwin Stelzer writes: “For every man between the ages of 25 and 55 that is counted among the unemployed, there are three who are neither working or looking for work.”

In short, in the most advanced countries there are gradual accumulations of so-called ‘jobs’ — as defined by economists — which have neither the financial incentive, skill-attractiveness nor social satisfactions that even the meanest jobs had recently as, say, 30 or 40 years ago. A cultural phase change is going on in which — at the top end — the number of specializations is growing, incomes are rising, and education requirements need to be higher than ever.

There is already something like a 10-points IQ divide between those in the social elite — about 15% of the population? — and the average of the remainder. This would not be so serious if there were a fair degree of intermixing of marriage — and subsequently of talented children — between the two halves. But this is not what happens.

Those who have interesting, well-paid jobs tend to meet similar partners at the elite universities. As for those who don’t make the grade in the superior part they will, of course, tend to drop out before they produce their children. Also rare, but running counterwise, are exceptionally talented young adults in the majority population becoming accepted by the elite and joining them for marriage and jobs — with bright children as a consequence.

In the advanced countries we might therefore be at the beginning of a widening division between two parts of the population. There is nothing unusual in this. It is called sympatry in biology and has already happened many times in man’s past. Is it happening again? Will we become two separate species living side by side or will the high profile part of the population ‘defeat’ the other in some way — in survival efficiency perhaps — it’s an intriguing question.

Profound changes to follow . . . as night follows day

I’ve written many times in the last few years that we haven’t had a uniquely new status consumer item in the last 50 years, the last one being colour television.  So far no-one has contradicted me.

There are two apparent exceptions at the present time.  One is the smartphone and the other is the electric automobile.  But neither of these are uniquely new, both being developments of items that were originally genuine signs of social status 100 years ago.  The latest versions confer brief status but this soon goes as sales of both rapidly expand.

The drone has been suggested.  But this is either an unmanned aerial vehicle used in warfare or a plaything  for boys and immature young men or a genuine production item as, say, Amazon wants to use them.  There’ll be hundreds, if not thousands, of similar innovative items in the decades and centuries to come.

The expiry of new status goods in the advanced countries speaks for a profound change in our economics and cultures in the years to come.

“He achieved the impossible during the election race . . . .

” . . . he may be doing it again.” So says a headline in my morning paper today. Nonsense! He may have been lucky with a fickle electorate. Trump will not be so lucky with his political advisors — no matter how extremist some of them are, or even more so, some of his specialist civil servants. He’ll not be allowed to be anywhere near as dangerous as some fear he might be.

If they decide to impeach him, as they were going to do in Nixon’s case, how will be react? There’s lots of fascinating events almost immediately ahead of us.

The why of social hierarchy

A recent essay discusses the reason why the pecking order is so interesting in our own and others’ lives.

The main point of social hierarchy in humans is why it should have ever evolved in the first place.  It is the social context in which the instinct of the female can operate when she wants a child.  She will always generally choose upwards towards the best males available for partnership with best abilities, intelligence and genetic fitness.  She will ignore the unfit and inept males, so that they will be unable to pass inferior genes onwards to children.

It is our quality control mechanism. Without our DNA would increasingly flounder in a morass of average abilities in in which a steadily growing number of harmful recessive genes and obfuscate the necessary genes for species survival.

The most permanent attribute of all

With his wild tongue, Trump has now gone far too far when describing judges as ‘so-called’ judges.   Judges don’t have to be the most honest people in the land nor the brightest nor the most knowledgeable about the law.  They happen to be the individuals given the responsibility of protecting the most precious attribute of any civilized culture — the permanency of a sense of justice.  When that is gone nothing remains.

Man’s prolific inventiveness

In the advanced countries we spend by far the most of our surplus income on ‘status’ goods (and services).  We gather these around us in order to show our friends, work colleagues, local neighbours and sometimes — if we are very rich — the public more generally, just where we think our social rank-order is, or ought to be.

As a simple check-list of what constitutes a status good rather than a necessity or a tool, does it satisfy the following criteria?

1. Originally, it was an exceedingly expensive hand-made unique item made only for the very rich;
2. It was later capable of being made in successive stages of automation until mass-producible and relatively cheap;
3. It is highly desired by individuals in all social ranks as a guide to show others during social interchange;
4. It has to be readily perceptible by others — visually, audibly and tactilily, particularly on first meeting.

We have run out of new status goods, but man’s prolific curiosity and inventiveness will no doubt continue  whenever it’s a case of “necessity is the mother of invention”.  Instances of these include environmental catastrophe, man-made mess, more energy-efficient infrastructure, and search for a better scientific hypothesis than the one in current use.

The unavoidable scenario

It is a deeply unfortunate fact of life that the medical knowledge gained in the last 250 years has also been the cause of the world population growing from about 1 billion people to about 8 billion as now — with a further 3 billion to come in the next 35 years as middle-aged poor people around the world proceed into old age.  Only then — around 2050 — is there likely to be a tailing off.

Already, half the population of the world is unable to eat an adequately nutritious diet.  This will become immensely more serious in the next 35 years as the middle-aged hump mentioned above grows older but also as 0.5 billion Chinese people and perhaps as many Indian proceed to a better proteinaceous diet.  This will require something like 10 times as much grain to be fed to farm animals and fish as now, so the total result will be a diminution of the present barely adequate diet of 0.5 billion people.

Ir will take at least 200 to 250 years for the world population and adequate food supply to get into pre-1750 balance again.  Not a single growth economist has yet produced a model to show how this scenario can be avoided.

Incalculable investing in the new era

About 30 years ago it suddenly became politically incorrect to use First, Second and Third World without somehow demeaning all those countries who were not Firsters.  Instead, we had “developed” and “developing”.  I’m sure others besides myself become confused sometimes.  Perhaps they ought to be typeset as “developed” and “developing“.

As a reminder, First World countries are the Seven which first set the industrial revolution going in the early decades of the 19th century — Britain, France, Belgium,  The Netherlands, Denmark, Germany and the United States.  Between them they presently monopolize fundamental research across every scientific faculty that has yet been set up.

The Seven were joined in later decades by another seven — Japan, Switzerland, Singapore, Israel, Sweden and Russia — which rapidly caught up by copying Western technology.  Between them all fourteen produce, and trade, high value goods and services almost exclusively with one another and have reached the highest levels of cultural pursuits.

Two World countries are those which might, in due course, break through into the fourteen above.  They are Brazil, China, India, Saudi Arabia, Iran, Australia, Canada, New Zealand and about twelve former communist countries of eastern Europe.  These have yet to show that they are capable of developing scientific research of the relevant depth and width to be able to innovate the new goods and services of tomorrow’s economy and thus get to share the First World’s standard of living.

This still leaves about 170 countries which have registered as nations with the United Nations Organization.  These can only be regarded as Third World countries because they have little to offer besides food and other low value resources for exports to mainly First World countries .  They have no education system worth speaking of — never mind scientific research.  They have little by way of adequate government and most will be suffering one way or another under dictators.

There will be some, though, with superb ecologies that make them attractive to both scientists and holiday makers. Taking care in developing these for sophisticated tourism and saving their wild life  at the same time will probably become highly profitable to some countries and their people in decades to some. But their one and only master strategy is, of course, to get their populations down — to approaching the sizes they were about 250 years ago.

This is a totally different scenario from the one that most orthodox economists were assuming — if not promoting — in the years before the 2008 Crisis.  This is that the world economy could keep on growing for centuries to come.  But this will be impossible because it would need a parallel growth in the use of high intensive energy.  The world economy has to stabilize at some stage, and it may be that we are not far off that now.

And we are also entering a world of advanced service occupations in which heavy investments — in education and training — will have to be made.  The rub is that, unlike now, when reasonable calculations can be made of what the returns might be, this will not be possible in tomorrow’s world.

How virtuous are you?

What makes you what you are — and our success in life?

Let’s assume that the basic bedrock of success is intelligence.  If we ask psychologists what makes for intelligence there is general agreement that it’s 50% genetic and 50% environment.  We could now speculate a little by suggesting that 50% of the environment is due to the culture you absorbed from your parents, and 50% due to the external environment experienced after puberty.

Further, the latter could be due to physical circumstances — and contingent shocks — but also the friends we make and the socialization skills we acquire in the work and social groups we are comfortable with as we approach full adulthood at around the age of 30.

For most individuals with normal levels of testosterone their future lot is largely settled at around the age of 30 years.  For the more ambitious it depends on whether they have sufficient intelligence and ability to practise a myriad of new social skills in order to insinuate themselves into a higher social level.  More gratifyingly, members at a higher social level like what they see and offer a way into joining their group.

If we add up all the percentages for average individuals we have something like — 50% +25% +12.5% + 6.25% + 6.25%.  There’s not a lot of room there for individual decision-making is there?  If we do the same for an individual too ambitious to stay for long in any one adult group before moving upwards, we have — 50% +25% +12.5% + 6.25% + x% + y%, ‘x’ being environmental circumstances, ‘y’ being individual personality change and genuine free will when it comes to taking decisions. How virtuous are you?

When will they be sending for the men in white coats?

The American Constitution was the wisest political document of its time.  Having got rid of the British government in the 18th century, America rightly decided that the biggest problem of its time was that others would rush in to obtain absolute power.

It therefore decided that future potential power holders — the president, other elected politicians, sivil service, lawyers, military, business, church, trade unions, must be expunged permanently from the possibility of power or modifiable.  The three seen to be the safest to govern were the President, Congress and the Supreme Court.

Presidential decisions — except for declaration of war — can be modifiable by his immediate advisors, such as the Secretary of State and the Secretary of Defense, Congress before being instituted, or, after the event, by Congress as a cricket back-stop. Or it can also be declared unconstitutional by the Supreme Court as a boundary back-stop or by the shouts of the people in the streets outside the ground as an ultimate back-stop after a disastrous decision has been made.

Also, as an important point which I now haven’t the time to develop further but must be mentioned is that the highest grades of American graduates that are actively recruited by the potential power-holders and mentioned above should also, these days, include media journalism.  In condemning the media, as he has done, Trump confuses the gutter press with the quality press. In recent years, it has only been the quality press that has exposed high level corruption.

At least a dozen decisions by President Trump in his first week have greatly disturbed half of the more thoughtful Americans, as being against the whole style of American culture.    While Trump is intelligent and an expert is property transactions, he is a case of ‘a little knowledge is a dangerous thing’.  He is already being talked about as “mad” by individuals who’ve been high in government.

The Republican Party, which must now take responsibility for allowing Trump to take their name while he was campaigning, will probably have to impeach Trump for incompetence before too long and sending for the white van.  At least a quarter, perhaps a half, of those who normally vote Democratic will support such a decision.  It seems to me that it’s just a question of when.

Solar cell plus direct electricity

Arthur Cordell writes as a Comment to my recent blog about driverless cars and all-electric ones:  “Goodbye fossil fuels, hello electric cars. Where will the electricity come from? From nuclear of course.”

Only France derives a substantial proportion of its non-transport energy needs from nuclear power, but now that the first generation of stations is experiencing an increasing number of problems, the government cannot be  confident about the reliabilitly of the next generation.

Meanwhile, world over-population, following present trends, is almost certain to start decreasing steeply in 100 to 150 years’ time. The bulk of electricity demand will be more than taken up by shale gas power stations — with half the production of CO2 from conventional fossil fuels.

Meanwhile also, the further development of solar cells, production of electricity in desert regions plus the use of direct current transmission lines — that is, not alternating current —  into the major cities will bring down the costs of energy use enormously.

Perhaps Yes to the Wall

It is sometimes said that walls are ineffective when preventing the entry of large numbers of desperate economic migrants. This isn’t so. The energy mustered by the home population when protecting their territory is more than fully equal to the task. In many species of animals and birds, opportunistic males, however powerful or desperate, seldom manage to evict a resident male from his own territory.

The EU wall, or fence, starting in the northernmost tip of Finland — to keep out migrants coming through Russia — and zig-zagging southwards through the Balkans until it reaches the Mediterranean, is a good example. Over the course of a year it is probably successful within a dozen or two individuals. The only weak spot in the EU border is the sea-borne route between Libya and Sicily used by young Africans. What are now modest numbers of them are now accumulating in Italy — and still being refused jobs in a country which is on the verge of a declining population!

The Mexico-Texas wall was partially built in President Bush’s time, and there’s no reason why it shouldn’t be finished off relatively quickly. Perhaps it ought to be now in order to assuage half the American electorate but mainly to allow Trump to save face and greatly modify many other of his hastily signed Executive Orders, many if which are abhorrent to any modern advanced civilization.

Hudson’s Theory of Economics in less than 300 words

The industrial revolution was a unique event taking place between about 1780 and 1980. The first five decades were driven by a new class of middle class entrepreneurs aspiring to become aristocrats, and subsequently by working class people aspiring to become the new middle class. By then also, traditional mechanical principles were giving way to new scientific discoveries that had proceeded since the times of Galileo (around 1600).

By 1980, the repertoire of status goods was exhausted and the world financial sector had become deeply complicated by the need to somehow keep high consumer demand growing at previous levels — around 3.5% per annum. It didn’t succeed and the monetary system blew up during 2007/8.

By 1980, the same seven countries that had initiated the industrial revolution — Britain, France, Belgium, Holland, Denmark, Germany and America — still dominated world trading in high value goods because they had a monopoly of what was by then many centres of fundamental scientific research. They still do so today, keeping one another supplied with the very latest improved version of each of the status goods in the standard repertoire.

The remaining countries of the world will industrialise as best they can, but will never be able to break into the high-value trading ring of the seven advanced countries. They will become trapped at standards of living only a little more advanced than where they are now unless massive injections of high-intensity energy can be added into the world economy. This is unlikely to say the least. Otherwise, the world economy, being a physical system, will accord to the basic laws of thermodynamics, including “the law of least effort”. Thus they’ll stay approximately at a level of where they are now. Most of the countries of the world can only aspire to a decent standard of living by reducing their populations.

The fate of two innovations

Two major innovations for future consumers have been much mentioned in the last few years. They are driverless automobiles and all-electric automobiles. However, the former has hardly been mentioned in the media in the more recent months. This is a surprise, considering that Google (Alphabet) are developing it, and I can only conclude that the original motivation behind it is declining now.

The all-electric automobile is entirely another matter. We read and see mention of this every day of the week, not merely as desirable but of the highest priority if we want to live in healthy cities and avoid breathing toxic fumes and particles. Several major manufacturers are already planning to make electric vehicles.

They’ll be expensive to start with, and batteries that are quick-chargeable — and reliable! — need a great deal more development yet, but the final days of petrol and diesel engines are already numbered, at least among the social elite in the cities they espouse for work and leisure.

A space very much to be watched

Netanyahu is nothing if not quick off the mark. No sooner had President Trump started to sign off some executive actions on Monday, overruling previous vetoes of Obama, then Israel decided to activate a plan strongly opposed by Obama — to build 566 houses in the West Bank on land sold to them by their Palestinian owners.

Yesterday, even more astonishingly, Prime Minister Benjamin Netanyahu announced yet more plans to build 2,500 settlements in west Jerusalem. Otherwise, without the triumphant ascent of Trump in America, these plans might not have seen the light of day for another ten or twenty years.

The Middle East is a powder keg. Could not these Israeli announcements be provocative? Start a war perhaps? It could be. The ramifications are well nigh unimaginable. A space very much to be watched from now onwards.

More transparency is required

The controversy over the failure of a Trident missile test last June is greater than might be imagined.  Did the government know the reason for the failure before the House of Commons decided a few days later on renewing funding for the system?

That’s serious enough, but there’s something far more problematical involved.  All computer systems and all electronic components are vulnerable to being degraded due to cosmic radiation from outer space or from radioactive bedrock underground.  Could this have affected the Trident system? It could well have been the case.

Everything we presently rely on by way of banking and financial systems will break down sooner or later due to radiation damage.  Indeed, it has been calculated that none of our computers will be operational well within 100 years.  Some fail-safe tandem systems will have to be developed before too long.

This is potentially going to require a great deal more transparency from government than this Trident incident.