martes, octubre 14, 2014

From Electricity under Jobsism to a Golden Age

Update: the article Platform economics and “unscaling” the electricity industry, posted on the Knowledge Problem, says "In this sense the Nobel Prize award to Jean Tirole (pdf, very good summary of his work) this week was timely, because one of the areas of economics to which he has contributed is the economics of two-sided platform markets." This means that Jean Tirole is able to help advance Jobsism as well.

© 2014. José Antonio Vanderhorst-Silverio, Ph.D.
Consulting engineer on electric sector systems architecting.
Creator of the Value Added Electricity Architecture Framework.

Summary: As political decay of capitalism takes hold, for example, of the United States and the Eurozone, Germany seems to have the best potential to become the leader of the current technological revolution. Unless the common sense behind Fordism (“the common sense behind” is not repeated but intended from here on before both Fordism and Jobsism) is replaced by Jobsism (after Steve Jobs), the current path towards a Second Middle Ages capitalism will continue under the status quo. Germany is well ahead to be able to take the leadership under the Jobsism agenda to get the Eurozone out of its deep systemic crisis, while renewing to a capitalist system without social and environmental externalities, but it needs France to buy in. France will need to let go Fordism in its regulatory systems, by starting to exercise complete and fully functional deregulation, for example, in electricity under Jobsism, even now that French economist Jean Tirole was awarded the 2014 Nobel Price of Economic Sciences, for his work on regulation which is however restricted by Fordism.


Reducing as much as possible the ideological bias, there are only two essential electricity scenarios remaining: (1) Fordism (a well known concept) for those countries that will be left behind and (2) Jobsism (to be discussed here) for those that will lead to the needed shift in both civilization and capitalism. As was anticipated in the 2013 paper A complete and fully functional electricity restructuring proposal, we can now fit those scenarios into going towards the Second Middle Ages and into the Golden Age of the current technological revolution, respectively. The summary of the paper of that proposal which tries to take all essential interdependent effects into consideration says:
Adequate electricity system restructuring is a key subsystem component of the adequate global society system restructuring needed to enter the Golden Age of the first technological revolution of what this author conjecture is a systemic civilization. From a heuristic system architecting perspective that Golden Age will be the result of the design of the value creation generated by the highly complex socio economic system that none of the subsystems by themselves is able to provide. Such value is the result of the relationships among global society subsystems. 
In the paper Rethinking Electricity Restructuring, Van Doren and Taylor said in 2004 that “the poor track record of restructuring stems from systemic problems inherent in the reforms themselves. We recommend total abandonment of restructuring and a more thoroughgoing embrace of markets than contemplated in current restructuring initiatives.” 
What Van Doren and Taylor failed to recognize was that systemic problems are the “wicked” problems that were identified by professors Rittel and Webber as far back as 1973. In addition, as early as 1989, professor Paquet provided two characteristics that make the traditional policy research methods inadequate to address “wicked” problems, while stating a simple rule for the selection of a framework that is satisfied, for example, by the generative restructuring proposal of the Value Added Electricity Architecture Framework.
Since then, I claim that the conjecture was proven in the post Pasemos a la civilización sistémica, something like “Let’s go to the systemic civilization,” where it says, for example, “I humbly think the main difference between the emerging civilization, Alvin Toffler coined in one of his books as the Third Wave, and the world of industrial civilization, that Toffler called the Second Wave, is the potential to achieve positive systemic leverage, which should be the priority of government policy. I just came to the conclusion that the difference is what I have been calling the systemic civilization.”

From representative democracy regulation to direct democracy deregulation

Based on the post Would middle-class 'indignados' prefer direct democracy? it is now easy to show how electricity in the systemic civilization will start to give meaning to Jobisim as it is expected to be the most important sector to address the systemic environmental crisis under direct democracy. Other regulated institutions as anticipated in the recently released 2013 article (through that post) “On the basic services expected by middle-class 'indignados,''' will easily follow to other institutions the deregulation developments of electricity.

While writing this article I have received the following surprise in support of more representative democracy under regulation in contrast to said direct democracy under deregulation: the 2014 Nobel Prize in Economic Sciences was awarded to French economist Jean Tirole "for his analysis of market power and regulation." The Prize is highlighted “…for breathing new life into research on market failures. His analysis of firms with market power provides a unified theory with a strong bearing on central policy questions: how should the government deal with mergers or cartels, and how should it regulate monopolies?”

The surprise is addressed as being at least fourth fold. The first is that central policy has been given excessive importance because it was the result, for example, of mayor architecting flaws in electricity restructuring that made impossible the proper deregulation of those markets under Fordism, as can now be inferred, for example, from the above mentioned proposal. To make real and effective the possibility of deregulation as sorely needed, to address the wicked (systemic) problems that are at the center of, for example, the huge inequality, a shift to Jobsism is essential as could have been inferred from said proposal. As can be seen, the summary of the paper of that proposal says, "we recommend total abandonment of restructuring and a more thoroughgoing embrace of markets than contemplated in current restructuring initiatives,” but regulation has continue for 10 more years in those defective restructured markets.

This second is intimately related to the post Why the Eurozone leaders must change their common sense first, which with as much respect as deserve those leaders (which are facing such a deep crisis) is also deserved by the Royal Swedish Academy of Sciences, by making a shift away from the influence of the Cartesian common sense that favors Fordism to embrace the emerging Peircian (after the great American philosopher Charles Sanders Peirce, which are based on systemic explanations) common sense that favors Jobsism is just as relevant and important. This was also anticipated in the paper of the proposal as being distint from economist do, to which we come next.

The third surprise is in what is said in the post Replacing the Science of EcoNoMics with the System Profession of EcoIsOurs. I suggest reading directly the strong arguments on that post to support the need for such replacement to a System Profession under Jobsism.

The fourth (not necessarily the last) is in the post A virtual referendum: say YES to replace mediocre politician with great statesman. For the purpose of this article, it might suffice to extract from the post that “by introducing the EcoIsOurs 1st level architecture, that increases the scope beyond any political, social, cultural, ethnic, religious or climatic differences, the YES vote intends to replace the obsolete status quo EcoNoMy savage (no longer civilized) capitalism with the emerging EcoIsOurs humanistic capitalism.”

Will Germany, France and/or the United States of America be the leaders?

When trying to define global electric power scenarios for the future, the Financial Times’ article German energy market a disaster, says EDF chief, by Pilita Clark in London, for example, is a nice addition to both the emerging avalanche of the electric power industry discovered and documented near April 2014, as well as the most recent post Avoiding delays on capitalism transformation. France is essentially claiming that the future is a continuation of the past, while Germany seems to be considering the future not having such continuation.

Based on the comments I posted under the article What To Do While You're Waiting For Steve Jobs, contradicting such need to wait under Jobsism and suggesting to avoid the above said delays, the French scenario can be said to be following Fordism, while the German is easy to shift to Jobsism once they change their common sense. According to Carlota Pérez, for example, in her very valuable article “Finance and Technical Change: A Long-term View,” published in the African Journal of Science, Technology, Innovation and Development, Vol. 3, No. 1, 2011, the leaders of the four technological revolutions, during the industrial civilization were in (with revolution starting on the year): 1) Britain (1771); 2) Britain and spreading to Continent and USA (1829); 3) USA and Germany overtaking Britain (1875); and 4) USA and spreading to Europe (1908).

Carlota also anticipated a fifth technological revolution in USA, spreading to Europe and Asia. However, as it was discovered that it is better seen as the first technological revolution of the systemic civilization, it can now be reinterpreted by the strong influence of shifting from Fordism to Jobsism. In that article she writes, for example, that
...there is a fundamental difference between the agents of production capital and those of financial capital. They will share the same paradigm and act in unison to fund growth and innovation, as long as it is successful in practice and profitable. However, once signs of exhaustion appear, the different depth of commitment to a particular paradigm becomes evident. For the production enterprise, the exhausted trajectory is profoundly embedded in existing investment in equipment, in structures, in knowledge and experience, in the organization and the personnel and in the external networks of suppliers, distributors and clients. For financial capital the paradigm is mainly a set of criteria for judging what was likely to be successful; basically a thought model, relatively easy to abandon when it fails, no matter how strongly rooted it may have been in ideas and in decision-making practice. 
It is simply that change in thought model, which we have been referring to common sense that governments need to act on to change the incentives and disincentives from Fordism to Jobsism. From the common sense of the Fordism scenario, the German energy market is seen (using non systemic explanations) as a disaster by the EDF chief as they are unable to see a way to let go out its exhausted trajectory of embedded resources, which now might be pushed further as it may supposed to be extended and reinforced with Tirole’s Nobel Prize. But as can be seen in the proposal mentioned in the introduction of this article, there’s a big problem with Tirole’s approach: systemic problems, which are critical to go to the Golden Age can’t be addressed by current government regulation.

However, the common sense of Jobsism will help Germany to take the lead of the first technological revolution of the systemic civilization. While corporations enjoyed the advantage of social and environmental externalities under the Fordism scenario, not such externalities need to be available under Jobsism, which can be able to fully address social and environmental systemic problems with systemic leverage. Starting, for example, with the environmental crisis, Germany will be set to do it once their leaders complete the change in their common sense.

Now we may wonder where the United States is. My understanding is that while they have the best conditions to be the leader of the Jobsism scenario, they have a strong status quo pushing to extend the useful life of Fordism. That understanding is well in agreement with the article America in Decay, by Francis Fukuyama. Writing about “two obstacles [that] stand in the way of reversing the trend toward decay,” in the September-October 2014 issue of the Foreign Affairs magazine, Fukuyama says that “the first is a matter of politics,” which obviously refers to public and private sectors politics:
Many political actors in the United States recognize that the system isn’t working well but nonetheless have strong interests in keeping things as they are. Neither political party has an incentive to cut itself off from access to interest-group money, and the interest groups don’t want a system in which money won’t buy influence. As happened in the 1880s, a reform coalition has to emerge that unites groups without a stake in the current system. But achieving collective action among such out-groups is very difficult; they need leadership and a clear agenda, neither of which is currently present.
But the good news of this article is: What better agenda can there be than that of the Jobsism scenario? It must be obvious that such strategies will let Germany take the lead of the current technological revolution, while the United States seems to be distracted on fossil fuels (natural gas) and France is obviously trying to extend the useful life of their nuclear power investments, both under the Fordism scenario. To get an earlier attempt at the idea on how this fit in the USA and the Eurozone taking the lead, please read the GMH blog post Agenda para transformar la civilización en sistémica.