sábado, febrero 21, 2015

The end of soaring inequality can start with "demand-side economics" on electricity

Fifth update: the end of soaring inequality based on great capitalism is also about the abundance that result from doing much much more with less with much less resources. Such valuable conclusion emerged after Greg Adamson, President, IEEE Social Implications of Technology (SSIT), added a very timely comment on their SSIT group of Linkedin that says:

Interesting quote from Buckminster Fuller. I searched on Google and all I got were hundreds of copies of the same quote, none referencing any date, place or written work (and the first appeared 15 years after his death). I would be interested in the context if anyone knows where the quote came from.
After expending several hours both yesterday (March 12, 2015) and today, I found the following video, below which is the first paragraph of my response, that invites to look at this update:


Thank you very much Greg for being interested on the context of the quote. I propose that the context is in the principle of Ephemeralization - Doing more with less. Please take a look at the beautiful, truthful and ethical 8 minutes animated clip, which is in the Fifth update of the above mentioned GMH post "The end of soaring inequality can start with 'demand-side economics' on electricity" that confirms Fuller's quote "You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete." That can be watched during less than its first 7 minutes, where we can repeatedly learn from the past of the social implications of bridge model building technology.
Then I added: "I suggest that the end of the soaring inequality can be grasped from the last minute and a half of said animated clip, whose transcription is curated next:"
So the principle of dMASS [the source of the clip is www.dmass.com], the principle of producing much much more useful benefit with much less resources is evident in the bridge industry and it's evident in the computer industry because we're all used to saying that computers getting smaller and smaller but getting more and more powerful and using less and less energy and resources.

But most of society is really still organized much like the stone bridge with a little hole at the bottom. We are using millions and millions of times of resources for things which we don't need to use them for. We still build houses the same way we did a hundred years ago, even though our knowledge of materials and resources and being able to design integrated systems that would use a fraction of the materials and a fraction of the energy and a fraction of the water that we have that knowledge.

dMass is about learning to apply these principles of mimicking the way nature solve problems and applying them to all aspects of our lives in order to reduce the total amount of mass that is invested in producing the wealth and the progress that we all want and to being able to take care are ourselves and the entire population of the planet on a sustainable basis.


 Fourth update: I just added comment number 18 in the alternate version to the GMH Blog Post that's in the EWPC Blog post . Of those comments 8 were added by william adams on the IEEE Spectrum Group of Linkedin:

This time I will concentrate on how the old model is obsolete: 
Thank you once again. By now it is easy to see we have very different common sense. 
I understand that 'the free market is what happens when govt does nothing ' is a simplistic definition and we deserved one closer to the needs of humanity. I would start with the "DEFINITION of 'Free Market' A market economy based on supply and demand with little or no government control" which was generally accepted for the industrial civilization and traditional capitalism which is under what I suggest is the common sense of Fordism now corrupted by the common sense of Feudalism. 
As anyone can see after the facts we can now understand why Steve Jobs said "Think Different," It is based on what I have documented, for example, once again via Ref. [4], in the blog post "Applying #Jobsism to transform current global #Fordism marketing myopia ( )." Fitting the common sense of Jobsism, this is what Jay W. Forrester, the Father of System Dynamics explains:"... supply and demand are not balanced by prices alone, as is commonly done in economic models. Inventories, backlogs, and delivery delays are the primary short-term balancing forces. Prices then change as a result of over or under supply of product" 
As a result, I propose to work on a generative dialogue starting with this first approximation of an emergent DEFINITION of 'Free Market' for the systemic civilization and Great Capitalism: A market economy with minimalist government control based on supply and demand, which are not balanced by prices alone, as is commonly done in traditional economic models. Inventories, backlogs, and delivery delays are the primary short-term balancing forces. 
It is very important to accept that the industrial civilization over expansion myopia is what generated all source of systemic problems for traditional capitalism.


 Third update: While Thomas Piketty suggests to adopt a global tax on wealth to transfer it, Wouldn't it be wiser to follow Peter Drucker advise that "the best way to predict the future is to create it," and do so for Great Capitalism in order to go the Golden Age where the innovation magic happens.
Second update: Giving a response on Facebook about this same discussion, I wrote:
In traditional capitalism there are two positions, which correspond in the USA to the Democrats and republicans without entering into the the evils that introduce market failures that are admissible in industrial civilization.

This could be my humble contribution: great capitalism prevents those positions and leads to flawless markets where public and private politicians no longer have excuses to intervene (and corrupt) markets, creating said soaring inequality.

First update: one adjustment to try to redefine of "demand-side economics:"
Thanks to a comment posted on a closed Linkedin group, in order to respond I just found out that John Maynard Keynes introduced the idea of demand-side economics for the industrial civilization but it is not what I am meant. I meant a different opposite of "supply-side economics" to that Nobel Prize winner economist Robert Mundell introduced to make sure we consider great markets that have not market failures as a result of the emergence of the systemic civilization.

The idea of what I named "demand-side economics" is very important in the following sense. To me all this business of smart-meters which are approved by utility regulators is about supply-side economics. Demand-side economics would be redefined to follow Steve Jobs quote "You've got to start with the customer experience and work back to the technology, not the other way around."
The end of soaring inequality can start with "demand-side economics" on electricity
"You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete."  --Buckminster Fuller
Summarizing Thomas Piketty's "Capital," an article published a year ago in the column The Economist explains says that he "... closes the book by recommending that governments step in now, by adopting a global tax on wealth, to prevent soaring inequality contributing to economic or political instability down the road [1]." We should strongly disagree with such recommendation by identifying the source of such "soaring inequality" and by giving a better recommendation to minimize said instability.

The main source of such inequality is the result of Robert Mundell’s win-lose “supply-side economics” existing reality of unfair markets [2] that should be replaced with a win-win “demand-side economics” proposal, starting for example in electricity to make Mundell's model obsolete, as suggested by Buckminster Fuller [3]. The summary of that "demand side economics" proposal is:
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.
To enable said proposal with an institutional innovation we can start to leap Capitalism from Good to Great [4], which is summarized as follows:
The Electric Pact of the Dominican Republic that started on January 2015 can become a great opportunity for humanity if it is reframed as a strategy of trajectory from its current strategy of terrain to go into the Great Capitalism Systemic Civilization scenario instead of the current Good Capitalism 2nd Middle Ages scenario, Corresponding to a systemic crisis of more that 40 years, being very representative for other sectors of society, this high systemic leverage opportunity should not be wasted.
Instead of the adjustments being made by governments on the supply-side subject to market failures, they are to be done on the demand-side on great markets that by fast institutional scalable learning in due time won't eventually fail [5]. In that restructuring proposal it was recognized the "systemic problems of those reforms were originally named as “wicked” problems in the 1973 article ‘Dilemmas in a General Theory of Planning’ by HORST W. J. RITTEL Professor of the Science of Design and MELVIN M. WEBBER Professor of City Planning, of the University of California, Berkeley [3].”

It is those systemic problems that mutually reinforce each other for the worst, which are the source of Piketty’s discovery of the soaring inequality that society has been experimenting [6]. The new “demand-side economics” has available increasing returns that makes possible sufficient systemic leverage to be available under healthy cooperation and competition so that a win-win environment [5] can be developed  as described, for example, in said proposal [3] for the electric power industry. As the general conjecture on the Systemic Civilization has been proved [4], we understand that the availability of “demand-side economics” is another way to prove the emergence of  its first Golden Age [3].

[1] Thomas Piketty’s “Capital”, summarised in four paragraphs, The Economist, May 4, 2014.
[2] Greg Palast, Robert Mundell, evil genius of the euro, The Guardian, June 26, 2012.
[3] A complete and fully functional electricity restructuring proposal, GMH Blog, November 4, 2013.
[4] Should we waste the opportunity of an institutional innovation on the Electric Pact to start to leap Capitalism from Good to Great?, GMH Blog, February 6, 2015.
[7] Jim Collins, Good to Great, HaperCollins, 2001


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