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by
charleshughsmith
Executive Summary
- Identifying the 8 characteristics that signal a system is experiencing diminishing returns
- The powerful advantages simplification can offer
- Debt-avoidance as a forward strategy
- The criticality of creating parallel, self-reliant systems
If you have not yet read Our Era’s Definitive Dynamic: Diminishing Returns, available free to all readers, please click here to read it first.
In Part I, we surveyed examples of diminishing returns and touched upon the forces that generate devotion to systems beset by diminishing returns. In Part II, we’ll look a little deeper into the dynamics, with an eye on avoiding being ensnared in systems that are doomed by dwindling yields and rising costs.
Characteristics of Diminishing Return Systems
1. Friction. Sources of what I term 'friction' include procedural impedance between dissimilar systems, fraud, inefficiencies, and processes that no longer add value but that are accepted as “the way things work.” (I wrote about systemic friction for Peak Prosperity in 2011: How Much of the U.S. Economy Is Friction?)
Common examples include the proliferating “reward cards” from retailers that fill our wallets and purses with low-value complexity and our absurdly complex income tax system that costs billions of dollars while serving primarily as a conduit for special-interest tax breaks.
2. “Solutions” that do not address the root problem. One example is our healthcare system’s haphazard approach to mental health: A great many mentally ill people who fall between the system’s cracks end up being incarcerated, in essence passing the cost and responsibility for mental healthcare to the already-burdened criminal justice system. Imprisoning the mentally ill is clearly a diminishing-return “solution” to our systemic lack of mental health care.
How to Overcome Diminishing Returns
PREVIEW by charleshughsmithExecutive Summary
- Identifying the 8 characteristics that signal a system is experiencing diminishing returns
- The powerful advantages simplification can offer
- Debt-avoidance as a forward strategy
- The criticality of creating parallel, self-reliant systems
If you have not yet read Our Era’s Definitive Dynamic: Diminishing Returns, available free to all readers, please click here to read it first.
In Part I, we surveyed examples of diminishing returns and touched upon the forces that generate devotion to systems beset by diminishing returns. In Part II, we’ll look a little deeper into the dynamics, with an eye on avoiding being ensnared in systems that are doomed by dwindling yields and rising costs.
Characteristics of Diminishing Return Systems
1. Friction. Sources of what I term 'friction' include procedural impedance between dissimilar systems, fraud, inefficiencies, and processes that no longer add value but that are accepted as “the way things work.” (I wrote about systemic friction for Peak Prosperity in 2011: How Much of the U.S. Economy Is Friction?)
Common examples include the proliferating “reward cards” from retailers that fill our wallets and purses with low-value complexity and our absurdly complex income tax system that costs billions of dollars while serving primarily as a conduit for special-interest tax breaks.
2. “Solutions” that do not address the root problem. One example is our healthcare system’s haphazard approach to mental health: A great many mentally ill people who fall between the system’s cracks end up being incarcerated, in essence passing the cost and responsibility for mental healthcare to the already-burdened criminal justice system. Imprisoning the mentally ill is clearly a diminishing-return “solution” to our systemic lack of mental health care.
by
JHK
Executive Summary
- The 3 fundamental activities society will need to prioritize in order to manage our contracting economy & resources
- How food production will need to evolve if we are to continue to feed ourselves in the future
- How pursuing "growth" is wasting us precious time and energy
- Mandatory transition will be needed across all sectors: transportation, health care, urban planning, manufacturing, trade, etc..
If you have not yet read Part I: Growth is Obsolete, available free to all readers, please click here to read it first.
The problem of growth in its current context is first a problem of language, but do not make the mistake of supposing that this is just a semantic argument. Language is the human animal's primary tool-kit for accomplishing anything in groups, whether it is hunting bison or putting a spacecraft on the moon. If you use the wrong tool you are likely to mismanage the task. Now the primary task facing humans in this moment of history is managing contraction and our goal should be to manage it in a way that minimizes the potential for hardship and suffering. It must be obvious, then, that "growth" in the broad sense that we use the term is not conducive to facilitate "contraction" in the broad sense. The promiscuous use of the word "growth" in our economic debates only confuses us and paralyzes our ability to construct a coherent narrative about what is happening in the world and how we might enter a plausible future which extraordinary events are now shaping.
Three Fundamental Activities
I propose that we substitute the term "activity" for "growth" in our public debates over how our economy can function in the face of the manifold crises of population overshoot, climate change, peak cheap oil, and capital scarcity. There are an endless number of purposeful activities we can undertake to address these large problems that do not connote growth. The three fundamental categories of these activities can be stated with precision, namely:
- re-localizing
- downscaling, and
- de-complexifying.
The quality in common with all of them is indeed the opposite of growth. Yet they all imply a range of positive actions that we can undertake as communities to make new arrangements for the human project to continue in a favorable way.
I will describe the particulars in a moment, but first the point must be made that…
Getting to a Future That Has a Future
PREVIEW by JHKExecutive Summary
- The 3 fundamental activities society will need to prioritize in order to manage our contracting economy & resources
- How food production will need to evolve if we are to continue to feed ourselves in the future
- How pursuing "growth" is wasting us precious time and energy
- Mandatory transition will be needed across all sectors: transportation, health care, urban planning, manufacturing, trade, etc..
If you have not yet read Part I: Growth is Obsolete, available free to all readers, please click here to read it first.
The problem of growth in its current context is first a problem of language, but do not make the mistake of supposing that this is just a semantic argument. Language is the human animal's primary tool-kit for accomplishing anything in groups, whether it is hunting bison or putting a spacecraft on the moon. If you use the wrong tool you are likely to mismanage the task. Now the primary task facing humans in this moment of history is managing contraction and our goal should be to manage it in a way that minimizes the potential for hardship and suffering. It must be obvious, then, that "growth" in the broad sense that we use the term is not conducive to facilitate "contraction" in the broad sense. The promiscuous use of the word "growth" in our economic debates only confuses us and paralyzes our ability to construct a coherent narrative about what is happening in the world and how we might enter a plausible future which extraordinary events are now shaping.
Three Fundamental Activities
I propose that we substitute the term "activity" for "growth" in our public debates over how our economy can function in the face of the manifold crises of population overshoot, climate change, peak cheap oil, and capital scarcity. There are an endless number of purposeful activities we can undertake to address these large problems that do not connote growth. The three fundamental categories of these activities can be stated with precision, namely:
- re-localizing
- downscaling, and
- de-complexifying.
The quality in common with all of them is indeed the opposite of growth. Yet they all imply a range of positive actions that we can undertake as communities to make new arrangements for the human project to continue in a favorable way.
I will describe the particulars in a moment, but first the point must be made that…
by
charleshughsmith
Executive Summary
- The 4 higher education solutions of the Nearly Free University
- How higher education can be both cheaper & better than today's alternatives
- The catalytic roles played by both networking & network theory
- Making decisions for yourself/your children in this new emerging education spectrum
If you have not yet read The (Needed) Revolution Emerging in Education, available free to all readers, please click here to read it first.
In Part I, we surveyed the foundations of Higher Education and its obsolete Factory Model. We described its predatory reliance on student loans to feed its bloated cost structure and its failure to provide students with the skills needed in the economy of the 2010s; i.e., the emerging economy.
In essence, the foundation of higher education has been completely upended. Knowledge and instruction, once costly and scarce, are now abundant and nearly free. The only pricing power left to Higher Education cartel is the artificial scarcity of credentials.
That is not the power of a productive system; it is the power of a predatory system.
The Four Higher Education Solutions of the Nearly Free University
There are four broad technology-enabled solutions that would free higher education from its current cartel limitations on opportunities and accreditation…
The New Education Models Offering New Hope
PREVIEW by charleshughsmithExecutive Summary
- The 4 higher education solutions of the Nearly Free University
- How higher education can be both cheaper & better than today's alternatives
- The catalytic roles played by both networking & network theory
- Making decisions for yourself/your children in this new emerging education spectrum
If you have not yet read The (Needed) Revolution Emerging in Education, available free to all readers, please click here to read it first.
In Part I, we surveyed the foundations of Higher Education and its obsolete Factory Model. We described its predatory reliance on student loans to feed its bloated cost structure and its failure to provide students with the skills needed in the economy of the 2010s; i.e., the emerging economy.
In essence, the foundation of higher education has been completely upended. Knowledge and instruction, once costly and scarce, are now abundant and nearly free. The only pricing power left to Higher Education cartel is the artificial scarcity of credentials.
That is not the power of a productive system; it is the power of a predatory system.
The Four Higher Education Solutions of the Nearly Free University
There are four broad technology-enabled solutions that would free higher education from its current cartel limitations on opportunities and accreditation…
by
Gregor Macdonald
Executive Summary
- As goes Japan’s efforts to rescue it’s economy, so will go the U.S. and E.U.
- Japan’s options:
- Outsource its manufacturing base
- Replace as much human labor with automation as it can
- Rush to trade its depreciating currency for hard assets around the world
- What Japan is telling us about the Keynesian endpoint
If you have not yet read Part I: Abenomics’ Dismal Anniversary, available free to all readers, please click here to read it first.
Japan Is Reflecting the Future of Western Economies
While many observers continue to follow Europe as the proxy for post-growth dynamics in the OECD, it’s actually Japan that merits the closest analysis.
Much farther along in its post-growth phase, bloated with government debt and having tried a number of big-bang initiatives over the decades, Japan – not the U.S. or Europe – is leading the way. The country has never really recovered from the gigantic property and stock bubble over twenty years ago.
As proof, just consider the biggest trading story of the past 12 months. Was it the Federal Reserve’s intention to taper? How about the chaos in emerging market currencies in countries like India and Indonesia? Or perhaps the continued economic depression in peripheral Europe, as countries like Spain, Portugal, and Greece re-run the 1930s, with mass unemployment and people burning wood from forests to say warm? No, not even such dramatic suffering in Europe was enough to move markets or the EUR currency much this past year.
Instead, it was Abenomics and the front-running (and then chasing) of wildly huge moves in both the Nikkei and JPY that helped drive liquidity and speculative juices across all markets. It is not a coincidence that the peak of this frenzy in May heralded the peak in many markets.
But Japan has more than a financial problem. Despite the hand-wringing about Japan’s debt, the world has ignored for some time now Japan’s debt-to-GDP, GDP on an absolute basis, and Japan’s low cost of capital. Japan borrows. Japan prints. Japan devalues. But the world doesn’t care.
An issue the world may finally begin to care about, however, is that Japan has failed to launch itself out of deflation and is making very little progress in its struggle now. Indeed, Japan has a demographics problem and a resources problem that far outweigh its financial problems. To this point, instead of launching into recovery, Japan is running with the resources Red Queen, as every step of its currency devaluation is met with rising costs to import the raw materials Japan uses to make its goods…
We’re All Turning Japanese
PREVIEW by Gregor MacdonaldExecutive Summary
- As goes Japan’s efforts to rescue it’s economy, so will go the U.S. and E.U.
- Japan’s options:
- Outsource its manufacturing base
- Replace as much human labor with automation as it can
- Rush to trade its depreciating currency for hard assets around the world
- What Japan is telling us about the Keynesian endpoint
If you have not yet read Part I: Abenomics’ Dismal Anniversary, available free to all readers, please click here to read it first.
Japan Is Reflecting the Future of Western Economies
While many observers continue to follow Europe as the proxy for post-growth dynamics in the OECD, it’s actually Japan that merits the closest analysis.
Much farther along in its post-growth phase, bloated with government debt and having tried a number of big-bang initiatives over the decades, Japan – not the U.S. or Europe – is leading the way. The country has never really recovered from the gigantic property and stock bubble over twenty years ago.
As proof, just consider the biggest trading story of the past 12 months. Was it the Federal Reserve’s intention to taper? How about the chaos in emerging market currencies in countries like India and Indonesia? Or perhaps the continued economic depression in peripheral Europe, as countries like Spain, Portugal, and Greece re-run the 1930s, with mass unemployment and people burning wood from forests to say warm? No, not even such dramatic suffering in Europe was enough to move markets or the EUR currency much this past year.
Instead, it was Abenomics and the front-running (and then chasing) of wildly huge moves in both the Nikkei and JPY that helped drive liquidity and speculative juices across all markets. It is not a coincidence that the peak of this frenzy in May heralded the peak in many markets.
But Japan has more than a financial problem. Despite the hand-wringing about Japan’s debt, the world has ignored for some time now Japan’s debt-to-GDP, GDP on an absolute basis, and Japan’s low cost of capital. Japan borrows. Japan prints. Japan devalues. But the world doesn’t care.
An issue the world may finally begin to care about, however, is that Japan has failed to launch itself out of deflation and is making very little progress in its struggle now. Indeed, Japan has a demographics problem and a resources problem that far outweigh its financial problems. To this point, instead of launching into recovery, Japan is running with the resources Red Queen, as every step of its currency devaluation is met with rising costs to import the raw materials Japan uses to make its goods…
by
JHK
Executive Summary
- Ready or not, the forces underlying the Long Emergency will force a return to the 'real' (vs the virtual)
- What regions and town/city models will fare best in this future?
- The age of the car is over: how will we transport goods and ourselves?
- Which skills will be in greatest demand?
- How to prepare ourselves emotionally for becoming less techno-dependent
If you have not yet read Part I: Returning to the 'Real' available free to all readers, please click here to read it first.
A Return To the 'Real'
John Maynard Keynes famously remarked, “In the long run we are all dead.” Which leaves the short to intermediate run, which is a lot. Start with the proposition that we’ll be compelled to reconnect our lives to biophysical reality, that is, nature. The techno-industrial adventure was about the exhilaration of overcoming natural limits — and the grandiosity in thinking that we could de-link permanently and put something synthetic and supposedly just-as-good in nature’s place. In the process, we de-natured ourselves and unplugged from the satisfactions found in being part of something wondrous and whole and larger than ourselves. We don’t have to reinvent the sacred. It has been there all along. We just ignored and disregarded it for about a century, and now we have to rebuild the social and logistical infrastructure for it. That job will be easier than keeping the interstate highway system in repair.
Expect to be living a far less mediated existence, being more directly in touch with the patterns afforded by nature, the sun and moon, the seasons, the temperature, the sensations, the tastes and textures, the pains and pleasures. For the generation used to sensing absolutely everything through the tiny portal of a five-inch smart phone screen, this may come as a startling psychological shock, greater than the psychedelic drugs of the hippie days were to the Boomers. By the way, nobody should expect that the national electric grid will survive indefinitely, or that every locality will be able to generate its own electricity without the long commercial chains of mining, advanced metallurgy, and the manufacture of modular machinery.
Where to Live?
One of the first questions for people to answer for themselves, especially in a period of demographic turmoil, is what place do I feel okay about being in and how do I set my roots in it? …
The Future of Living
PREVIEW by JHKExecutive Summary
- Ready or not, the forces underlying the Long Emergency will force a return to the 'real' (vs the virtual)
- What regions and town/city models will fare best in this future?
- The age of the car is over: how will we transport goods and ourselves?
- Which skills will be in greatest demand?
- How to prepare ourselves emotionally for becoming less techno-dependent
If you have not yet read Part I: Returning to the 'Real' available free to all readers, please click here to read it first.
A Return To the 'Real'
John Maynard Keynes famously remarked, “In the long run we are all dead.” Which leaves the short to intermediate run, which is a lot. Start with the proposition that we’ll be compelled to reconnect our lives to biophysical reality, that is, nature. The techno-industrial adventure was about the exhilaration of overcoming natural limits — and the grandiosity in thinking that we could de-link permanently and put something synthetic and supposedly just-as-good in nature’s place. In the process, we de-natured ourselves and unplugged from the satisfactions found in being part of something wondrous and whole and larger than ourselves. We don’t have to reinvent the sacred. It has been there all along. We just ignored and disregarded it for about a century, and now we have to rebuild the social and logistical infrastructure for it. That job will be easier than keeping the interstate highway system in repair.
Expect to be living a far less mediated existence, being more directly in touch with the patterns afforded by nature, the sun and moon, the seasons, the temperature, the sensations, the tastes and textures, the pains and pleasures. For the generation used to sensing absolutely everything through the tiny portal of a five-inch smart phone screen, this may come as a startling psychological shock, greater than the psychedelic drugs of the hippie days were to the Boomers. By the way, nobody should expect that the national electric grid will survive indefinitely, or that every locality will be able to generate its own electricity without the long commercial chains of mining, advanced metallurgy, and the manufacture of modular machinery.
Where to Live?
One of the first questions for people to answer for themselves, especially in a period of demographic turmoil, is what place do I feel okay about being in and how do I set my roots in it? …
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