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Stewardship for the future

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This week brings my first meeting of the Natural Capital Committee, to which I was recently appointed. This is the Committee’s second phase (set for five years), its first running from 2012-2015. As part of my homework, this weekend I re-read chair Dieter Helm’s book [amazon_link id=”0300210981″ target=”_blank” ]Natural Capital: Valuing the Planet[/amazon_link].

51MeUzEvTLL._SX333_BO1,204,203,200_It’s a very accessible and clear explanation of why it’s important to value natural capital and how to go about it. As Dieter explains, there’s no doubt that economic growth has for some time been unsustainable. To be clear, that means that future generations (which could include our older selves) will have lower living standards because we have depleted by so much the capital stock providing economic services. (I would add infrastructure too, as part of the sustainability challenge, and there are similar issues as looking at renewable natural capital.)

The book presents the case for re-investing in natural capital in order to enable sustainable growth – it argues against the ‘no growth’ environmentalists. The mechanism it proposes is an aggregate natural capital rule: “The aggregate level of natural capital should not decline.” If there is damage done in one place, it has to be made good by compensating gains elsewhere. The rule can be applied to renewables, and can be extended to non-renewables by requiring a natural capital fund to compensate for extraction (much as the Norwegians do for their oil and gas extraction).

This is a radical change when you start to look at the amount of money that might be involved. The book suggests it is of the order of at least 4% of current GDP. And of course the details are extremely complicated. To state just two hurdles: we do not have good statistics on natural capital, although the Office for National Statistics does have a programme of work on this; and it is hard to value non-marketed assets and transactions, especially when there are substantial externalities, non-linearities and system interdependencies. Cost-benefit analysis – the only tool economics has to offer – applies to marginal (linear) changes and in practice does not try to value external benefits.

One of the book’s examples about habitats and how to think about the trade-offs compares great crested newts and nightingales. Both are protected species, but nightingales’ habitats are much harder to recreate elsewhere, arguing for a higher barrier to developing the kinds of woodland where they live. I can’t resist recounting an anecdote about newts. If you visit construction sites, as I sometimes have, there will often be a fence half a meter high around the work – to keep out the newts, which have to be carefully relocated from inside the site to outside. In my BBC Trust days, I was quizzing the great Sir David Attenborough about the fate of the poor great crested newts. He said (and who knows, maybe he was joking) that the newts had only got into the legislation by accident and the little creatures are not at all rare. Indeed, he had some in his suburban garden. If you were a newt, isn’t that the best garden you could pick as your home?

Male Great Crested Newt (Triturus cristatus) with breeding colours, underwater, captive UK

Male Great Crested Newt (Triturus cristatus) with breeding colours, underwater, captive UK

Anyway, I’m delighted to have been appointed to the Committee. It speaks to my own pre-occupations with sustainability ([amazon_link id=”0691156298″ target=”_blank” ]The Economics of Enough[/amazon_link]) and measuring the economy ([amazon_link id=”0691169853″ target=”_blank” ]GDP: A Brief but Affectionate History[/amazon_link]). This is exciting territory in terms of the economics, and profoundly important in terms of all our futures.

[amazon_image id=”0691156298″ link=”true” target=”_blank” size=”medium” ]The Economics of Enough: How to Run the Economy as If the Future Matters[/amazon_image]  [amazon_image id=”0691169853″ link=”true” target=”_blank” size=”medium” ]GDP: A Brief but Affectionate History[/amazon_image]

The future is multiple, not singular.

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I’ve long enjoyed the blog posts by Richard Jones on economic productivity and growth – his perspective from physics is always interesting. As I met him in real life for the first time this past week, I also downloaded his free e-book Against Transhumanism (download here) – a brief, compelling demolition of the idea that digital technology is hurtling us towards a ‘singularity’. The most famous transhumanist is Ray Kurzweil, I suppose, of [amazon_link id=”0715635611″ target=”_blank” ]The Singularity is Near[/amazon_link]. Prof Jones points out that:

a) exponential growth (as per Moore’s Law) cannot deliver a singularity, as the value of expnential functions is finite – unless the rate of technological improvement is constantly increasing without limit. Seems a stretch, looking at either current productivity figures or any history at all.

b) transhumanism is an apocalyptic religion, not a scientific theory.

c) To quote the e-book: “The idea that history is destiny has proved to be an extremely
bad one, and I don’t think the idea that technology is destiny will necessarily work out that well either. I do believe in progress, in the sense that I think it’s clear that the material conditions are much better now for a majority of people than they were two hundred years ago. But I don’t think the continuation of this trend is inevitable. I don’t think the progress we’ve achieved is irreversible, either, given the problems, like climate change and resource shortages, that we have been storing up for ourselves in the future. I think people who believe that further technological progress is inevitable actually make it less likely – why do
the hard work to make the world a better place, if you think that these bigger impersonal forces make your efforts futile?”

It’s well worth a read, along with the Soft Machines blog.There is a super-clear explanation of the implications of nano-technology,as you might expect from the author of the [amazon_link id=”0199226628″ target=”_blank” ]Soft Machines [/amazon_link]book.

[amazon_image id=”0198528558″ link=”true” target=”_blank” size=”medium” ]Soft Machines: Nanotechnology and Life[/amazon_image]

There’s also a chapter on why it’s unlikely you’ll ever be able to upload your brain to the cloud. Above all, though, the book explains why transhumanism is a Dangerous Idea. The idea of a Singularity has been described as the ‘Rapture of the Nerds’ (attributed to [amazon_link id=”1857238338″ target=”_blank” ]Ken McLeod[/amazon_link]), which makes it sound like the lunatic fringe. But as Prof Jones points out, the Silicon Valley crowd are seriously influential; and their view that technology has its own irresistible dynamic – the techno-determinism – elbows aside the truth that the results of technological discovery are socially determined: “Why would you want to think of technology, not as something that is shaped by human choices, but as an autonomous force with a logic and direction of its own? Although people who think this way may like to think of themselves as progressive and futuristic, it’s actually a rather conservative position, which finds it easy to assume that the way things will be in the future is inevitable and always for the best.”

Written by a physicist but like a true social scientist. The future is multiple, not singular.

Peakiness

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The release of ONS figures on the consumption of physical materials in the UK got some attention earlier this week. The statistics show that in both total and per capita terms, there has been a long term decline in the amount of stuff involved in economic activity, although it’s still just over 10 tonnes per person each year (down from 15 tonnes in 2000). The new figures take account of trade and the fact that the UK is a net importer, particularly of manufactures – figures for earlier years, which also suggested a decline in the ‘weight’ of the UK economy, did not adjust for trade. The ‘resource productivity’ of the economy is increasing so we now get nearly £3 worth of GDP for every kilo of materials, up from £1.87 in 2000. The one resource whose use is not trending down is fossil fuels.

What’s the explanation? The same ones as 20 years ago when I wrote (free pdf) The Weightless World: the switch toward services and intangibles, the miniaturisation and use of lighter materials in products such as fridges and cars, the combining of many products (phone, camera, tape recorder, map etc) into one (smartphone), the dematerialisation of goods and services (books to e-books, CDs to downloads). Much more recycling, too.

[amazon_image id=”0262531666″ link=”true” target=”_blank” size=”medium” ]Weightless World: Strategies for Managing the Digital Economy (Obex Series)[/amazon_image]

Isn’t this good news? Tim Jackson (of [amazon_link id=”1849713235″ target=”_blank” ]Prosperity Without Growth[/amazon_link] fame) comments grumpily in this Guardian article that he doesn’t believe the figures: “You do see these micro trends of peak stuff, but the idea we’re living in a peak stuff world is nuts.” Not for a moment am I relaxed about the environmental impact of economic growth (and I just joined the Natural Capital Committee because of my belief that we need to do much better at stewardship of our natural assets – see Dieter Helm’s [amazon_link id=”0300210981″ target=”_blank” ]Natural Capital: Valuing the Planet[/amazon_link]). Yet I am, you know, pretty happy that this trend is repeated across the OECD and that the UK is doing particularly well in terms of reduced material consumption.

There has been much comment about the UK’s dismal labour productivity and multifactor productivity performance of late. There is probably some mismeasurement, but not enough to explain the flatlining. We ought though to recognize the improved productivity of some physical (buildings, sharing of assets) capital. And this trend in resource productivity, £ of GDP per kilo of materials used in creating it, is welcome:

Real output per kilo of material used, UK 2000-2013

Real output per kilo of material used, UK 2000-2013

Manchester, Marx (and Engels), and Me

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Yesterday I was in the magnificent Chetham’s Library in Manchester with Colm O’Regan, recording a radio programme featuring the desk at which Karl Marx and Friedrich Engels studied for 6 weeks in the summer of 1845. The librarian Michael Powell set out for us the yard of books the two had read during that visit, saying they were very dull including for example William Petty’s [amazon_link id=”B00A1G5MHY” target=”_blank” ]Essays in Political Arithmetick[/amazon_link].

A yard of reading by Marx and Engels

A yard of reading by Marx and Engels

Well, be still my beating heart! As the author of a brief (but affectionate) history of [amazon_link id=”0691169853″ target=”_blank” ]GDP,[/amazon_link] I was delighted to find it had been one of Marx’s early economics texts. Here I am holding the very copy that K.M. read (no marginalia, unfortunately). Rooting around on Google Scholar this morning, I find that Marx emphatically considered Petty to be the founding father of political economy, in [amazon_link id=”1840226994″ target=”_blank” ]Capital[/amazon_link] citing Petty’s description of capital as ‘past labour’. (Bizarrely, Google said it had witheld some search results because of data protection law – ??)

Me holding Petty

Me holding Petty

Here is Colm, metaphorically scratching his head about one of the other books, a super-dull history of trade since ancient times, in three volumes. More information about our podcasting project in the weeks ahead.

Colm O'Regan dipping into the history of trade

Colm O’Regan dipping into the history of trade

Marxian economics is a chasm in my education, although I did try to read Capital when young.[amazon_link id=”0140445684″ target=”_blank” ]Capital: Critique of Political Economy v. 1 (Classics S.)[/amazon_link] The [amazon_link id=”0141397985″ target=”_blank” ]Communist Manifesto[/amazon_link] is good and stirring stuff of course, and sitting in the Chetham’s Library, which could have served in a Harry Potter film, you understand why they had spectres in mind. However, for me Engels’ book, [amazon_link id=”0199555885″ target=”_blank” ]The Condition of the Working Class in England[/amazon_link], is one of the finest pieces of analytical economic reportage, and a true call to arms.

[amazon_image id=”0199555885″ link=”true” target=”_blank” size=”medium” ]The Condition of the Working Class in England (Oxford World’s Classics)[/amazon_image]

Update: the entire list of books read that summer by Marx and Engels, kindly provided by the librarian Michael Powell, is:

Aikin, John                                 Description of the country from thirty to forty miles around Manchester (London, 1795)

D’Avenant, Charles                     Essays on peace at home and abroad (London, 1794)Discourses on the publick revenues and on the trade of England (London, 1698)

Eden, Frederick Morten                The state of the poor, 3 vols. (London, 1795)

Gisbourne, Thomas                     Inquiry into the duties of men in the higher ranks and middle classes of society in Great Britain (London, 1795)

Macpherson, David                     Annals of commerce, manufactures, fisheries and navigation, 4 vols. (London, 1805)

McCulloch, John Ramsay            The literature of political economy (London, 1845)

Petty, William                               Essays in political arithmetick (London, 1699)

The absences that matter

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I was reminded by this article about a hoax submission to the annual international conference of the Society for Social Studies of Science, purporting to be a paper proposed for a panel called ‘On the Absence of Absences’. Author Peter Dreier writes: “I not only wanted to see if I could fool the panel organizers and get my paper accepted, I also wanted to pull the curtain on the absurd pretentions of some segments of academic life. To my astonishment, the two panel organizers—both American sociologists—accepted my proposal.” As he recounts, having jumbled pretentious jargon words together for an abstract, he simply didn’t go to the conference, thus becoming an Absence. Maybe some of the conference participants thought that was intentional.

The account cites the 1997 book [amazon_link id=”B00ENKP2TM” target=”_blank” ]Intellectual Impostures[/amazon_link] by Alan Sokal and Jean Bricmont (1998 in English). Sokal, a physicist, submitted a parody article to the American cultural studies journal Social Text, titled ‘Transgressing the Boundaries: towards a transformative hemeneutics of quantum gravity.’ It claimed reality (eg gravity) is a social construct. The article was published – in a special edition of Social Text “devoted to rebutting the criticisms leveled against post-modernism and social constructivism by several distinguished scientists.” Talk about irony.

[amazon_image id=”B00ENKP2TM” link=”true” target=”_blank” size=”medium” ]INTELLECTUAL IMPOSTURES Postmodern Philosophers’ Abuse of Science.[/amazon_image]

Sokal immediately revealed the hoax, and he and Bricmont use the book to evaluate the consequent firestorm and to drive home their argument that postmodernists abuse concepts and terms from maths and physics (eg Baudrillard claiming modern warfare takes place on non-Euclidean space, Lacan stating that the structure of the neurotic subject is ‘exactly the torus’ etc. Sokal and Bricmont make clear they are not attacking all social science, or all French or structuralist philosophy. For example, they point out that Derrida does not write the meaningful drivel they attack, although Deleuze, Kristeva, Lacan do. The bulk of the book analyses a number of offending texts. I read it at the time, and thoroughly enjoyed the demolition job. While respecting the necessity of jargon in academic disciplines, I was predisposed to agree that much of the cultural studies material I occasionally read was literally meaningless.

It ends with an epilogue making some key points, including: It’s a good idea to understand what one is talking about if using scientific terms, even in a loosely metaphorical way; not all that is obscure is profound; science is not a ‘text’, reality and evidence exist (even though their perception and discussion is socially shaped); etc. They end by asking – does it matter? Is postmodernism the biggest problem facing the world?

Sokal and Bricmont conclude that the spread via academia of an absence, the absence of clear thinking and respect for empiricism, is a serious issue. And the obscurantism and pretentiousness of the intellectual/academic left – which has not abated since 1997, as the Peter Dreier experiment indicates – has contributed to the populism rampant today, and the evident preference of voters who are not well-off, privileged or highly educated for people who do ‘speak their language’.