Climate Watch: we must not give up!

These are very hard times. The role of climate change in starting and propagating the Californian wild fires continues to be denied in the USA, despite being undeniable. However, here is a link to an even-more under-reported cause of the fires which links the establishment of a federal forestry system back in the 1930s (actually earlier, but the outlawing of burning arrived later) and the loss of indigenous fire-prevention knowledge and action. Seemingly in the past, California’s indigenous population burned the forests’ dangerous undergrowth to avoid wildfires in the dry season. Evidence shows that trees were injured in the process, but not fatally so.

The Amazon continues to burn, and now the Pantanal Wetlands burn, too. Both have deliberate human causes. The Amazon fires are directly related to our increased consumption of meat, particularly beef. Beef cattle are poor converters of plant protein into meat protein, but that does not stop humanity ramping up consumption at the expense of the natural environment. Bio-diverse rain forest gives way to diversity-free  soya plantation.

An example of this meat-fixation nonsense is the report this week of pig farms in China that have buildings that are 7-storey high! A single farm now produces one-million pigs per year to meet growing demand for pork. The implications for waste and use-and-abuse of anti-biotics are significant. The Economist highlighted this 6 years’ ago!

The Economist is at it again in this week’s special climate edition. The Leader article says that decarbonising energy will “avoid the chaos of unchecked climate change , including devastating droughts, famine, floods and mass dislocation. Once mature, it should be more politically stable, too, because supply will be diversified, geographically and technologically. Petrostates will have to attempt to reform and, as their governments start to depend on taxing their own citizens, some will become more representative. Consuming countries which once sought energy security by meddling in the politics of oil producers, which instead look to sensible regulation of their own power industry. The 21st Century should be less economically volatile. Electricity prices will be determined not by a few big actors but by competition and gradual efficiency gains.” One has to marvel at the Economists’ perpetual belief in – and defence of – capitalism.

The optimist in me, however, says this has a lot to recommend it; the pessimist says, capitalism is the cause and cannot solve the problem. Just look at the pig farm. It’s like a doubling down. Simply, though, capitalism cannot countenance de-growth. I am currently reading Jason’s Hickel’s book (right) of that title. A review will follow.

55 – the magic death number

Cigarette advertising is back in Germany. Two campaigns – Winston and now Camel – have something in common, the number 55. It is the number of death sticks that can be squeezed into a packet that is just short of the size of a brick. The two brands also have their brand management by Japan Tobacco in common. Let’s see if 55 catches on.

Book review: Stephanie Kelton, the Deficit Myth

Without my reliable book seller, I would probably not have read this book. It arrived one day through my Covid-barrier letterbox. Once I had started reading, it completely changed my way of thinking and boosted my mood amidst the gloom that is modern politics and economics. Kelton demonstrates that, contrary to the British Prime Minister’s assertion, there actually is a magic money tree. I am going to resort to bullet points here. Here’s what Kelton tells us:

  • we do not pay tax to pay for services, we pay tax to “provision” the economy
  • governments do not tax and spend, they spend and tax
  • governments’ budgets do not work like household budgets
  • countries that have currency sovereignty (i.e. “issue” their own currency), cannot run out of money
  • the role of fiscal policy is to manage inflation, not the deficit.
  • austerity is both unnecessary and damaging economically and socially
  • deficits are a sign of a healthy economy – economies that are balanced are not innovative
  • a negative balance of payments does not mean that foreign powers have power over countries whose currencies they keep
  • currency “holders” convert their cash into interest-bearing bonds
  • countries with currency sovereignty can, and should, have full employment
  • the resources are there for countries with currency sovereignty to transform to carbon-zero economies.

That is almost enough for one book. There are plenty of reviews of this book for my readers can draw on, for example, Despan, 2020. As ever, there is no substitute for reading the book oneself. But let me take just a few of these bullet points and metabolise them.

Take Covid-19, the British Government has found £30bn to fund the furlough/job retention scheme to enable employers to retain staff when revenues are hard to generate. The Government found money to build emergency hospitals; purchase PPE (albeit inefficiently); and even pay us to eat out. The government has not disclosed how these initiatives will be paid for. The Conservative Government has spent millions of pounds on Brexit, most notoriously a £13.8m contract to a ferry firm without ferries. Oh, and those expensive nuclear weapons. Essentially, the Treasury is paying by creating money. Though by contrast, it would seem that Government spending on welfare payments to poorer people, on education, social care, etc., have to be justified and balanced by tax revenue.

Tax, more generally, is not as it seems. Kelton makes the argument that the reason that we pay tax is not to fund spending, but rather for provisioning. Governments need people to be economically active, to make things, to provide services, for progress. Tax, therefore, is the incentive for people to be economically active by ensuring that people have to give their labour and time in exchange for currency (money). There is a secondary purpose to tax, that of wealth redistribution. The obscene wealth concentration in the hands of a few known-individuals – Jeff Bezos, Bill Gates, Warren Buffet, Elon Musk, Peter Thiel – does not serve society at all. The rich who get more money tend to save it rather than spend it. Give poor people money and they will spend it in the real economy. Take a $1bn off Jeff Bezos in tax and he is left with $109bn. Would he really notice? Plus, how much has Bezos increased his wealth during the pandemic which has necessitated large-scale public spending commitments? What can civil society do with $1bn? Rather a lot, I think.

People will argue – particularly in the USA – that rich people are serious philanthropists. Bill Gates’ foundation gives billions to the fight against malaria. Warren Buffet has endorsed Gates and will donate his fortune to Gates’ foundation upon his death. There are two problems – at least – with that argument. Many billionaires have become so rich by exploiting workers, communities and natural resources. Suddenly to give excess money “away” to causes that they decide are worthy seems wrong. They distribute excess money (they do not become St Francis of Asissi). They live well and maintain their political influence. And who is to say the causes selected by philanthropists are worthy and the most efficacious? Where is the transparency, the democracy, the accountability?

Back to Kelton’s main arguments, government deficits are, by definition,  surpluses or credits to others. I buy something (debit) and give money to someone else (credit) in return for something that I actually want. But unlike governments, my debit does have to be covered either by savings or borrowing. Governments only get into trouble when they borrow in currencies that are not their own. Cases such as Argentina are often floated as examples of how deficits are bad. Notwithstanding the fact that Argentina’s 2001 inflation-led crisis caused a default on foreign debt, it did reconfigure its economy to one that focused on domestic growth and full employment. Its government moved away from US dollars both in cash terms and also uncoupling interest rates to a foreign currency.

Inflation, unemployment and climate change

Inflation is a problem for economies. In my lifetime I have seen high inflation; though nothing compared to the hyper-inflation suffered by Germany in the 1930s which still scars the landscape and leads to economic conservativism within the country and forces austerity on countries such as Greece that share the currency (the Euro). Inflation is usually controlled by notionally-independent central banks. They increase interest rates to dampen down demand. 2 per cent inflation seems to be a common target in modern economies. Overshoot and the central bank will raise interest rates. That will also impact on the unemployment rate – but modern economy managers trade off inflation and employment. Higher unemployment is a price worth paying for keeping down inflation, unless you are, of course, someone being made unemployed. This trade-off can be seen at work in a recent article by Gordon Brown, UK PM during the financial crisis of 2008. In response to the Covid-19 crisis, he writes: “Now I am the first to say that the Bank needs a more demanding constitution, one that imposes a dual mandate: to take unemployment as seriously as inflation. This should be matched by an operational target stating that interest rates will not rise or stimulus end until unemployment falls to pre-crisis levels.” (Guardian, 15 September 2020).

Kelton argues convincingly that countries with sovereign currencies can run their economies with a “good jobs guarantee”. Monetary policy has it that there is a natural level of unemployment – NAIRU. The Economist Martin Goodfried puts a figure on it: 7 per cent! In the USA, that might be as many as 12 million Americans “naturally” without work and a whole lot more who are under-employed. To keep that number of people unemployed is not some law of economics (there are no laws of real economics), it is purely a political decision predicated on a non-existent law of rising wages caused by too much employment and hence bargaining power of labour leading to inflation. When wages rise, interest rates should increase to prevent inflation from occurring.

Mainstream economics has it that unemployment benefit is sufficient to provide for the needs of people without work. Critically for the neo-liberal economists, the rate needs to be set sufficiently low so as to provide the incentive for the unemployed to take any paid work rather than be idle. The gig economy is, arguably, the result of this mentality; that is insecure and sporadic work. However, this argument is pretty phoney – most people are motivated by a sense of purpose, much of which comes from engaging in meaningful work. But the rich – for example, those who earn six-figure sums – do not work harder the more they receive in salary and bonuses. They merely accumulate believing themselves to be worth the money they are paid. Moreover, they bias the policy of their firms in order to maximise the benefits they receive. For example, if remuneration is linked to share price, CEOs may engage in share buy-backs rather than invest in innovation and new products.

Kelton identifies seven deficits that do matter. These are: employment, infrastructure, education, climate, democracy, health and savings. Let me take a couple of those deficits, starting with employment. Kelton argues that progressive governments would use the state apparatus to employ all unemployed labour on a wage that sustains individuals and families until full employment returns in the natural economic and business cycles. A good job guarantee (the good is important here) can maintain aggregate demand even in a downturn because everyone who wants to work can do so. This potentially makes the downturn of shorter duration. All citizens would be covered (not everyone is eligible for unemployment benefits either because they have not paid-in to the insurance system, or they have exhausted their “entitlement”) and purposeful work is at the heart of such a programme. Moreover, skills are retained and/or enhanced. Kelton argues further that these public works should be based in communities and the work itself should focus on developing communities – whether it be public service, caring (for elderly and children alike) or business development/entrepreneurship. It is also clear that such a job-guarantee programme could be beneficial as societies pursue environmental sustainability. It is also feasible for people to change their own direction from accumulation to sharing and “de-growth”.

That leads to the second deficit that matters, climate change. Kelton rehearses many of the arguments made by key writers in this field such as Mike Berners-Lee, David Wallace-Wells, Tim Lang, Bruno Latour, etc. If governments persist with a neo-liberal, deficit-avoidance economic mindset, then climate change will impact human society at the upper, catastrophic-end of the climate-modelled scenarios. There is no financial block on investment in green technologies. It is political. Sovereign currency issuers such as the USA and the UK can generate the financial resources needed to eliminate carbon as the source of all energy and limit warming to below 2 degrees Celsius.

In conclusion, Kelton is a credible critic of existing monetary policy. She demonstrates how we can as a society have the things we need. Society has never been provided for by taxation. It has always been spend and tax, not tax and spend. Tax does not provide the resources for public spending, it is primarily a tool of redistribution. Some rich people are not keen on that, for some reason.

Updated, 15 September 2020 to incorporate quote by Gordon Brown

Cigarette advertising post-Covid lockdown

The last post I made on cigarette advertising in Germany was 10 February, just before Germany went into lockdown. Even then, I thought that cigarette advertising was on the wane and we were unlikely to see big cigarette campaigns by the big brands. One of the reasons for this was the growth of e-cigarettes. Campaign budgets were being transferred from authentic killing to massaged killing. The clearest indicator of that is the warning at the bottom of each advertisement. Traditional cigarette advertising (bottom right) says “smoking is deadly”. Advertising for the new delivery method of super-heated tobacco says “this way of smoking can damage your health and make you dependent”. And to demonstrate how cool we are – and is this method of killing or maiming otherwise healthy people, let’s have a picture of an attractive women who nicely illustrates the product “glo”. The important thing for the tobacco company behind it, British American Tobacco, is that it is real tobacco from real tobacco plants, with real killer chemicals.

I have been out-and-about in Munich recently. Finally, I found a couple of cigarette advertising posters. Take the first one (right), I may have got the translation wrong, but maybe the packet is big enough to act as a parasol? Ho ho ho! There is some double meaning there that defeats me with my limited translation skills. Actually, I think one could actually live in the box, let alone use it as a parasol.

The second poster (left) goes for the time theme. If I am reading it right, there are so many cigarettes in the packet that in getting through them one has the time to name some woman? Again, this may well be marketing genius, but I am happy with my failure to appreciate perceived marketing cleverness on products that are designed to kill and maim.

My last Samsung

A few years’ ago, I watched a documentary about corruption at Olympus (the Japanese camera/optics firm). I was rather disturbed by it. To the western viewer, there was unacceptable fraud being perpetrated by Japanese executives. The British-company president at the time, Michael Woodford, found that dealing with it was not straightforward and could be dangerous. What he could not understand with his capitalist mindset was that losses were not only about honour in Japanese society, but also about social welfare – the interests of generations of employees (Olympus people) were intertwined with the fortunes of the company. The Japanese executives did what they could to avoid the collapse of the company for that reason – something that is difficult for a western mindset to embrace.

So in reading Geoffrey Cain’s book (left) about South Korea’s Samsung corporation, packed full of examples of fraudulent business activities, should I try to understand the cultural imperatives and conclude the book was a good read? Which it is, though the style as a thriller is annoying, but that is just me again. Samsung is a family business traded on foreign stock markets. It is the cornerstone of the South Korean economy, run as a business empire with a patriarch who can be convicted numerous times for services to the ruling family and somehow evade the full force of the criminal justice system. The book concludes just at the point where the current patriarch, Lee Jae-yong (Jay Lee), was facing a re-trial on bribery charges after a successful appeal by prosecutors to the Supreme Court.

The charges are intimately linked to Lee Jae-yong’s attempts to retain control over the company and not pay much inheritance tax in the process. Although Samsung is traded on stock markets,

car

1999 Samsung SQ5, later called SM5

investors do not buy a stake in the parent; there is a lot of cross-shareholding that does two things. It blurs the precise nature of who owns what whilst ensuring a controlling role for family members. It is a conglomerate, but at the same time not. Family members control the affiliate businesses including a theme park, a hospital, shipbuilding, fashion and chipsets. It made motor cars in my lifetime (right) The cross-shareholding allows the family to retain control with relatively small shareholding. The structure is frequently adjusted in the interests of the Lee family.

In 2015 one of these adjustments involved two affiliates merging to the considerable detriment of the financial interests of the existing shareholders of one of those affiliates, C&T such that it was being valued at less-than zero. As Cain notes: “Samsung argued that this was an attempt to consolidate business units…Jay Lee owned a 23 percent stake in Cheil Industries, the company acquiring Samsung C&T [Construction and Trading], which in turn owned a 4 percent stake in Samsung Electronics, the crown jewel. The merger would simplify and solidify Jay Lee’s control of Samsung Electronics through this shareholding web, starting with Cheil at the top” (p245). To make matters worse, the family managed to convince one of the largest institutional investors, The National Pension Service (NPS), to support the merger despite it not being in the interests of its own stakeholders; namely, South Korean pensioners and those hoping to retire on a pension. In the end, a combination of the devaluing of the NPS’s shareholding and the stock market’s response, it lost $500m – a straight transfer from the people to an industrial elite!

Even a US hedge fund, Elliott Management, led by Paul Elliott Singer, failed to stop it. Singer himself was described by Bloomberg as “The World’s Most Feared Investor”. Samsung engaged in some pretty unsavoury propaganda to discredit him. Singer is Jewish and Samsung went full-on antisemitism even going to the point of setting up a website called “Vulture Man” with a slide show depicting a vulture, thought to be a caricature of Singer, “whose sadistic practices consisted of plotting and preying on the poor and disenfranchised around the world” (p250).

Samsung’s origins are uncomfortable from a 21st Century context. Its founder, BC Lee, was educated in Japan and was enamoured to say the least by Japanese Zaibatsu, powerful family-dominated industrial and financial business empires, which fell victim to post-war reconstruction. Lee’s first business operation was in supplying vegetables to Japanese soldiers in Manchuria. That story itself has unsavoury implications, though from a business perspective, perfectly reasonable. A man familiar with Japanese cuisine supplies vegetables to customers in Manchuria. The fact that they were an occupying force is neither here nor there.

After WWII, the South was invaded by the North; 3 years’ of war saw most of Lee’s assets taken or looted. Lee then entered sugar refining and wool spinning, banking, insurance and chemicals. Samsung was intimately involved in the economic transformation of the country arising from the military coup in 1961 led by General Park Chung-hee after some horsetrading over the scope of Samsung business interests. Actually, the state wanted the banks.

selfieThe transformation into an electronics firm started to take shape with the acquisition of a semi-conductor firm in 1974. Always a supplier, Samsung powered the first iPhone. In fact without very close collaboration between the two firms the iPhone would not have made it to the market and that infamous 2007 presentation by Steve Jobs at the Macworld convention would not have happened. That event is itself a tale of trade-off and compromise.

Samsung seems to have been obsessed with beating competitors. First, Sony in terms of design and LCD screens/televisions. More famously, beating Apple, particularly in the American market for which Samsung employed a crack team of marketers led by Todd Pendleton. Their White Glove project culminated in one of the most famous non-selfies when Ellen deGeneres tried to make a selfie  with Meryl Streep using a Galaxy mobile at the Oscars ceremony in 2014. It ended up being the most-retweeted Tweet (right) featuring other stars such as Julia Roberts, Channing Tatum, Jennifer Lawrence, Bradley Cooper, Brad Pitt, Lupita Nyong’o, Jared Leto. And Kevin Spacey.

It is at this point in the book that I realise how meaningless life is.

The politics are much more interesting than the marketing; and much more unsavoury. Further words are expended on the PR disaster of the Galaxy Note 7 and the company’s insufficient recall policy and unwillingness to come clean about the cause, or indeed the danger. Readers will not be surprised to learn that there turns out to be considerable institutional causes over-and-above the design flaws. And then there is the premature release of the folding-screen phone that was so delicate that it broke by looking at it. Cain concludes, however, that we, the consumers, are just seduced by good products in nice cases. We will overlook the behaviour of the manufacturer in pursuit of consumption. My Samsung  S8+ is now into its fourth year. That is a testament to the product (and a bit to my care and attention to it). My next mobile will not be a Samsung.

Pics: Samsung SQ5: raul • CC BY-SA 3.0

Posh hotels

We’ve been revisiting the television recently. We’ve done the ten episodes of The Great British Sewing Bee. I finally got round to watching the extraordinary story of the Shah of Iran’s extravagant and delusional party in the desert back in 1971. But the other night we fancied something extremely light and un-challenging. So we went for the BBC’s Amazing Hotels: Life Beyond the Lobby featuring Schloss Elmau in the Bavarian Alps. Unfortunately, this was challenging. I am writing this now because the impact is still festering.

presentersThe concept of the programme is that two presenters go to posh hotels all around the world and muck-in, as it were, whilst giving the hotel a priceless chunk of advertising. The presenters (left) are Monica Galetti – a real-life chef, and Giles Coren – a sometimes controversial columnist with, by his own admission, an opinion “on just about everything”. This mucking-in, or as the publicity for the series has it, “rolling up their sleeves” is excruciating. Coren, in this episode, trying to learn towel flapping in a sauna is a case in point.

I tried to book a room at the hotel. The off-peak prices were about 3000 Euros for a couple of nights for two. But for that you get fed twice a day, access to a spa and a series of temperate pools inside and outside, accessible all year round, libraries and a bookshop (that is a nice touch), lounges and generously-sized rooms with views. Stunning views. It is also unique in that it is a music venue. Some of the world’s most eminent classical musicians play there (and have done so since 1959) on a “stay and play” basis. So the owner, Dietmar Mueller-Elmau, when asked what is the core theme of the hotel, he took them to the music room. It is extraordinary. Oh, and the G7 met there in 2015.

Summary – culture and well-being. At a price. What is my gripe, then?

Notwithstanding the extraordinary publicity granted a private business on a public broadcaster, and the format of the programme – mucking-in – there is an elephant in the room. It is probably true of all in the series and not exclusive to Schloss Elmau. And that elephant is sustainability.

At no point was there any discussion about the carbon footprint of this place. I cannot begin to imagine just how much carbon it generates from heating, the spa, the kitchens and, of course, getting people there. Whilst there is a train 7km away, I doubt it is the primary mode for visitors, especially in the winter. We had a look at the menus for the five restaurants. It all looked rather meaty. Just adding, of course, to the carbon footprint. Now bearing in mind the hotel had a devastating fire in 2005 and was largely rebuilt to meet the vision of Mueller-Elmau, one might have thought that there was a potential sustainability story to be told. Maybe there was, and the BBC just edited it out. I sense the producers and editors just loved Muller-Elmau’s declaration of delight when the hotel burned down and the opportunity it presented. I have no idea to what standard of sustainability the hotel was rebuilt.

That leads to the BBC and any other broad or narrow caster. Sustainability needs to be central to the theme of these programmes. OK, I can be a voyeuristic as the next person on how the “other half” lives, but at least put a carbon price on it. Or maybe the next series is about hotels that are sustainable, have been built or rebuilt to be sustainable – carbon neutral. Maybe it is time to promote them. Or if Schloss Elmau is sustainable, tell that story. Amazing hotels, I fear, come at a price much higher than what comes out of my bank account to visit.

Photo: BBC

Why solar power is the answer

illustrative

Demonstrations against nuclear power, Hull, 1983

Again, showing my age, there was a time before chiller vending machines. I had just started at college and one arrived on campus. There seemed to me to be two things instantly wrong with them. First, the drinks – sticky water really – were packaged in aluminium cans. Giving back aluminium cans to supermarkets had been one of my earliest experience of environmental activism. I’ve never liked them because of the energy required to make single-use containers. Second, chillers used energy to chill something that really did not need chilling. It was purely an aesthetic, especially in the middle of winter. Chillers just multiplied from that point onward. It seemed to me throughout my formative years that we used energy for things that did not need energy. Shop windows at night. What was that all about?

It kind of didn’t matter in those days. Aluminium smelters were located near to hydro-electricity stations and there was plenty of coal and generating capacity to burn it. Plus, chillers and lit shop windows made life better. Apparently. It is true, it was a piffling amount of energy relative to the big users: iron and steel producers, paper mills, bitumen manufacturers, water-treatment works, industrial-scale refrigeration. What I did not know before reading Chris Goodall’s book, The Switch, was that some smart people run businesses that sign up some of these large energy users and gain permission to turn off their equipment when the grid is under pressure at peak times. One Belgian company, REstore (now part of Centrica), operates a platform that monitors the real-time use of electricity of its clients and gauges whether they can be taken off-grid for a certain amount of time to level out demand. The platform is clever – or at least the people behind it are – in that it works out just how much energy can be taken from a big customer without affecting production. For example, molten steel stays that way for some time. Even 5 minutes off-grid can provide enough capacity to keep everyone else secure in supply. The company receives money from the grid in exchange for its clients coming off grid when requested to do so.

illustration

Hastings Railway Station: why no solar panels?

Why is this important? it is important because despite the startling fact supported by a logic that I am not going to argue with, photovoltaics (PVs) can supply humanity with all of the electrical energy that it needs more cheaply than by any other renewable mode. Contrary to what I had thought about chillers and well-lit shop windows, actually energy consumption is declining in developed countries. In the UK, apparently, we are back down to levels of consumption as of 1970 driven by two things. First, it is actually difficult for those in the rich west to consume much more. There is unlikely to be more chillers because – probably – there is nowhere to put them and we cannot realistically drink more sugared water. Second, many of the things we still consume are getting more efficient, in particular lighting (see below). Semi-conductors, too, are becoming energy efficient, exponentially so.

How much electrical energy does humanity need? Goodall thinks that a decent standard of living can be achieved by a total running energy demand of 3kw per person (one-third more than the running demand in 2015). Scale that up, that is about 30 terawatts of power (twice the level in 2015). Goodall notes, too, that the amount of available solar energy is: ten times that of the nearest renewable alternative, wind; one-hundred times that of biomass; wave and hydro are some 13 times less than biomass. All we have to do is collect the solar energy and covert it. Well, not quite.

illustrative

Roofs in Hastings. Spot the solar panels

PV cells are getting cheaper. Goodall uses the concept of the learning curve to explain this. Essentially, the more units manufactured, the more learning about how to manufacture them quicker and more efficiently. The decline in the costs of manufacture has a name, Swanson’s law (Like Moore’s law in semi-conductors, but bigger).

And maybe my chiller and shop window lighting gripes are actually valid? In a solar-dominated world – and especially in the temperate North – energy use peaks between 1600 and 2000 daily. There is an overlap between businesses shutting down and people arriving home, turning on lights and cooking dinner. Goodall reminds us how crazy it is that we do not have demand pricing for energy at these peak times. In the zero carbon world, we are going to have to turn off our lights and appliances at peak times. Ensuring that all light fittings are LEDs, seemingly would make a huge difference – demand can be reduced by one-third by this very simple change. Goodall goes further and advocates we all sign-up for smart meters on the basis that, in the washingend, suppliers will be able to shut off energy-hungry appliances at times of stress for the grid. He’s thinking particularly of our washing machines, tumble driers and dishwashers. My supplier invites me weekly to install a smart meter; I have been reluctant to let them into my house, but maybe there is a utilitarian case for it?

So, controlling demand at peak times is one element of the solution. Another element is alternative sources. As noted above, wind is the second-best option here; conveniently there is an inverse relationship between solar and wind – when it is not sunny, it is often windy. Wind turbines, however, cannot compete on price with solar. At the time of Goodall’s writing, the best solar conversions were coming in at US$0.06 per Kwh. Swanson’s law suggests that this conversion can go down further. However, such prices are half that of the best performing fossil fuel sources (p47). Wind can do about US$0.07 in its best places (Texas, for example), so it is a good complementer, and works at night and when the sun does not shine so brightly. Wind’s experience curve, however, is much less steep and sustained. It is also more expensive to site turbines (rental charges can be quite high; offshore has quite high maintenance costs).

SpongThere is also room for public policy – a south-facing roof in a city should have solar cells mounted on it. Equally, dwellings need to be made energy-efficient. A bit of insulation is insufficient. Rendering UK housing stock energy-efficient, in particular, is a major task. It is going to take central government support to transform regular houses, but companies like Energie Sprong (right) in the Netherlands (operating in the UK) show the way; though at £30k, it is quite a commitment. One house in a block seems a little pointless. We may need to do a bit of getting together to make this happen. Though disappointingly, there was no sign of money for these kinds of developments in UK budget statement of 8 July 2020.

Then there is the battery solution which has been driven by a rapid diffusion of electric cars. Elon Musk’s Tesla vehicles’ high performance depends on high capacity battery storage – in his case based on lithium ion technology (fast discharge). Seemingly there is enough lithium on the planet to build the necessary batteries. The United States Geological Service estimates that there is 13.5m tonnes available, which is more than enough and is recyclable. What Goodall doesn’t tell us, however, is whether this lithium is accessible, subject to geopolitics and/or would have environmental implications if it was exploited. There are other battery technologies – flow batteries are slow discharge, so not much use for cars, but work for other less dynamic applications such as mobile phone masts.

illustrativeThen there is pumped hydro – excess daytime electricity is used to pump water up for hydro-release when the sun does not shine. There is one in the UK at Dinorwig in Snowdonia (left). It can react quite quickly at peak times. But scaling up is not easy; there would be more damning needed and lots of power lines. Effectively, we are still short.

Fuels are stores of energy. Fossil fuels are particularly good because they are concentrated stores which means you get a lot of energy per bundle rendering it possible to have meaningful fuel tanks in cars and aeroplanes. Goodall doesn’t hold out too much hope in the hydrogen economy – it is way too dangerous and difficult to store and is not particularly dense in its energy. Time to turn to microbes. Carbon neutral fuels are possible. Here’s the logic: take hydrogen and carbon dioxide, literally feed it to known microbes in return for energy-rich molecules containing hydrogen, carbon and oxygen. These can be stored in existing oil storage infrastructure – a bonus for what will need to be a rapid switch.

Goodall advises us to keep an eye on a couple of pioneering companies – Electrochaea and LanzaTech. Both use microbes to convert various elements and compounds – carbon dioxide, carbon monoxide oxygen and hydrogen – often taken from the environment, sewage installations or from industrial plants such as cement factories before emission, and converted into a liquid fuel – methane and ethanol – that can be stored and used when needed. Just like with hydro, excess summer electricity is used in the conversion process. The excess, argues Goodall, is actually worthless. PV generates more electricity than is needed in the summer, so putting it to good use is no bad thing.

Finally, there is air capture of carbon dioxide. This is inherently a good thing as it would actually remove carbon dioxide from the atmosphere. It does not require the burning of fossil fuels to capture it to then use it to make liquid fuels. A company called Climeworks in Switzerland leads the way here. Carbon dioxide is captured, combined with other elements to produce liquid fuels. It is expensive at the moment and would benefit immensely from the world adopting realistic carbon taxes as Climeworks’ carbon dioxide would be tradeable. Investment costs are equally important. Low interest rates help in the development of technology and installation, particularly of PVs for consumers.

I am still convinced that saving energy is still important and might contribute to reducing the deficit between what renewables can achieve in the winter and dark months. It does not seem to me just to be a case of our appliances becoming more energy efficient. Those drinks chillers and shop windows can still be turned off.

Pictures:

Energie Sprong – https://www.energiesprong.uk/

Dinorwig – https://www.fhc.co.uk/en/power-stations/

 

Book Review – Rutger Bregman, Humankind

illustrationI was going to start with what I dislike about this book, but that would be contrary to its whole ethos. I had in my head that there was something opportunist in Bregman’s prose, and hence the man himself. I have to say that this book could be life-changing, or in the case of oldies like me, a bit of a booster, like one gets to top up a vaccine every now and again. In life I can see myself slipping into pure cynicism. Bregman is a check on that. So I am going to change the criticism to give readers some idea of how I should be thinking rather than the way that I have come to think.

So, here is the re-writing of my original first paragraph (I’ve moved what was the original first paragraph to the end of the review for anyone who is remotely interested).

Regular readers know that I do not watch much television, though I did when I was a child. As I got older and was allowed to stay upillustration later and watch adult television, my father insisted that we watch documentaries rather than sit-coms and soaps (we’re talking the 1970s). The format was always the same: an expert or knowledgeable person (or both, James Burke, right), would present in a quite succinct way some science or current affairs. There was never any music and the expert or knowledgeable person had no dress sense, even then. With hindsight, one of the reasons for the no frills was limited bandwidth. Broadcasting hours were fewer back then, and there were no specialist stations. It was broadcasting in the true sense. There was insufficient airtime to waste on unnecessary graphics, or choreography. In recent times, I have been reading much more than I used to – the pandemic has helped. I have noticed a style of writing in popular non-fiction (a genre that I have traditionally avoided out of snobbery). It is akin to current TV documentary style. There’s a soundtrack, an extended narrative with cliffhangers and expansive prose. I realise that this book in this style is not produced for me. Though if it gets people engaged with science, current affairs, art, philosophy, then all well and good.

SONY DSC

I started reading this book, not because I want to be convinced at how kind humans can be – which is the point of the book – but because I know Bregman is an important commentator. I finished it, incidentally, because I wanted to be convinced of how kind humans can be. Bregman made a big splash at Davos in 2020 in telling rich people that they should pay their taxes, and in the US when he took on Fox News’ Tucker Carlson. He is not going away in a hurry. I commend him for that because ultimately he is on the right side of history, albeit a white history. But the style of writing is not entirely to my liking but I know this view is not shared!

The first part of the book seeks to debunk the hypothesis that there is a human predilection to violence and being beastly to one another. I have not checked the veracity of many of the claims made in the book, but here are a few that I really want to be true:

  • blanket bombing of populations in war does not result in the surrender of those subject to it
  • soldiers do not like shooting at other soldiers, even if they are deemed to be the enemy
  • Lord of the Flies is a work of fiction; left to their own devices, boys will create order and manage their way through
  • the people of Easter Island did not engage in tribal warfare that decimated the population (colonialists did that)
  • The Stanford Prison Experiment was a contrived hoax to enhance the reputation of social psychology and academics

illustrationThe philosophers at the heart of Bregman’s analysis are Hobbes and Rousseau. The Hobbesian world is that of the Leviathan – the human need for strong leaders, discipline and order to prevent a state of chaos, barbarism and cruelty. The Rousseau-ian world is one of the social contract, cooperation and common interests regulating behaviour. Bregman makes the argument that it all started going wrong when private property was conceived, when people – who became powerful and rich – were able to enclose common land and exploit it for private gain. These people built a civilisation on slavery, private property and the exploitation of natural resources. This has been a theme of other books that I have recently read; namely, Adreas Malm’s Fossil Capital and Tim Lang’s Feeding Britain.

There’s a chapter on Stanley Milgram and the “shock machine” – an experiment in 1961 where volunteers administered electric shocks of up-to 450 volts to so-called “learners” in an adjacent room. Milgram was Jewish and, claims Bregman, devised the study to to offer an explanation for the Holocaust. People follow orders, hypothesised Milgram, irrespective of the implications, genocide being one of them. All is not, however, as it seems. Bregman argues that the experiment did not test obedience, as stated, rather it tested goodness! The subjects, although paid, participated because they believed that the research would result in a contribution to knowledge. An explanation for the Holocaust was a worthy study. There was trust in the research and people in white coats who kept insisting that they needed to continue to administer the electric shocks for the research to be valid.

It was also the time of Adolf Eichmann’s trial in Jerusalem. Bregman’s case for human kindness could not exclude a discussion on the Holocaust. I do not have the authority or knowledge to engage with the terms of Eichmann’s guilt. What is recorded is that Eichmann presented himself as someone who just followed orders. Hannah Arendt who witnessed the trial first hand coined the term, banality of evil, to capture the essence of the Eichmann phenomenon as she saw it from the courtroom. There is much debate about exactly what she meant, though it was largely interpreted as her accepting Eichmann’s defence. Bregman concludes that Eichmann’s motive for his actions was actually a commitment to a cause that he believed would lead to a better society, however perverted.

What about the German citizenry who fought to the very end of the war, despite the inevitability of both the eastern and western fronts being breached? The evidence points to camaraderie, argues Bregman, rather than ideology as the cause of seemingly pointless resistance.

More optimism

Bregman takes us with him to visit some interesting people. For example  trained nurse and economics degree dropout, Jos de Blok (right), not someone I’d previously been aware of. He runs a large healthcare company in the Netherlands called Buurtzorg. He does this not by dillustrationesign, but as a consequence of working in the sector and realising that it the care service was not fit-for-purpose. Care is not delivered optimally as a product (i.e. commoditised) and by people who get their orders hierarchically, rather by people who work in small autonomous teams. De Blok is not unknown; he is in receipt of the the Royal Society of Arts’ Albert Medal. Previous recipients of this medal have been Stephen Hawking (physicist), Tim Berners-Lee (the www) and Francis Crick (DNA). So, he’s in good company.

Then there is the story of the transition of South Africa from Apartheid state to inclusive democracy under Nelson Mandela. The period between Mandela’s release in 1990 and the presidential election in 1994 was precarious. I was aware of the ugliness of Eugène Terre ‘Blanche and his Afrikaner Volksfront. I was not aware of the Viljoen twins. The family resource meant that only one of them could go to university. Constand said that brother Abraham should go. Constand (left) joined the army and became a senior officer in the South African Defence Force in Apartheid South Africa. Abraham studied abroad and found himself irreconcilably parted from his brother and aligned with the ANC and Mandela. Constand joined Terre ‘Blanche. I’ll leave it there – it is worth reading the book just for this section and only goes to raise my emotions. Mandela is the leader that we all need.

If any reader thinks that I have covered everything in this book, I have not. It is packed with ideas about positive reforms: education, democratic, penal, protest and warfare! The protest issue is so pertinent as I write at a time when the USA is convulsed by the racist Murder of George Floyd. Drawing on a study by American sociologist, Erica Chenoweth: “In the real world, she thought, power is exercised through the barrel of a gun. To prove it, she created a huge  database of resistance movement going back to 1990. ‘Then I ran the numbers,’ she wrote in 2014. ‘I was shocked.’ More than 50 per cent of the nonviolent campaigns were successful, as opposed to 26 per cent of the militant ones. The primary reason, Chenoweth established, is that more people join nonviolent campaigns. On average over eleven times more. And not just guys with too much testosterone, but also women and children, the elderly and people with disabilities. Regimes just aren’t equipped to withstand such multitudes. That’s how good overpowers evil – by outnumbering it.” (p359). At a time of Covid-19, however, maybe not.

Bregman keeps caveating his narrative with admissions of imperfection in the characters and methods he presents. Deliberative democracy works sometimes, not others. There are some truly bad people around – power corrupts, absolute power corrupts absolutely in Lord Acton’s famous phrase. But Bregman is right, too, that if we treat one another badly in our places of work, jails, schools, communities, we cannot be surprised if it is reciprocated. We have seen during the pandemic real goodness in people, communities coming together to help one another and even the act of self-isolating and observing the lockdown are unexpected demonstrations of togetherness. Let us try to retain some of that as we move on, starting with the rewriting of my first paragraph.

Here is the original first paragraph:

The more I have been reading recently, the more I have seen this style of writing. Now, I do not watch much television these days. But when I was growing up – I know I keep going on about this – television documentaries used to have an expert or knowledgeable person (or both), would present in a quite succinct way some science or current affairs. There was never any music and the expert or knowledgeable person had no dress sense. One of the reasons for this succinctness, I imagine, was limited bandwidth. TV programmes did not start showing until late afternoon and TV stations shut down by midnight, apart from at the weekend. And then it was half-past midnight. There was such a shortage of airtime, so every minute mattered. Hence the quality of the output. Bregman’s book is a documentary with music, and is excrutiating for it. Moreover, it is extremely patronising: “This may get a little technical, but we need to understand where he went wrong” (p88). It then proceeds to be not very technical.

Pictures:

Bregman: Victor van Werkhooven

James Burke: https://archive.org/details/james-burke-connections_s01e10

Jos de Blok: https://www.josdeblok.com/biography/

Constand Viljoen: https://en.wikipedia.org/wiki/Constand_Viljoen

 

 

 

They’ll do anything for a deal with the USA

Today I wrote to my new MP, Sally-Ann Hart, for the first time. The Conservative Party manifesto for the 2019 election stated:

“In all of our trade negotiations, we will not compromise on our high environmental protection, animal welfare and food standards.”

And yet, the Government is pushing a new agriculture bill through the parliament that offers no such commitment. In order to rectify that, one of her Conservative Party colleagues, Neil Parish, proposed an amendment to the bill that would honour that manifesto commitment. The amendment tabled on 13 May 2020 was defeated (22 Conservatives did vote for it, but Sally-Ann Hart was not one of them).

The reason is clear. There is no hope of a trade deal with the USA if existing standards are maintained. So, Conservative MPs are prepared to sacrifice the livelihoods of farmers (who will not be able to compete against US farmers, especially those on marginal land), environmental targets, including greenhouse gas emissions and the health of their constituents who will finally be able to enjoy chlorinated chicken, hormone-fed beef and pork, and eggs produced in battery cages.

Full story here and farmers’ reaction here including a list of the 22 Conservatives who voted for the amendment.

I work in a Business School: Shut down the Business School

Martin Parker (left) tells us in his new book, Shut Down the Business School (below right),  what we already know. We know that Business Schools are – to use that always unhelpful metaphor – cash cows – for universities the world over. They are a volume business in themselves. They also sell a product – the dream or aspiration of riches with the right formula learned at the Business School.

That definition of riches – or personal wealth – is a capitalist-managerialist one. It is one in which (let me turn this into a powerpoint presentation):

  • bosses boss and everyone else does as they are told;
  • bosses – managers – are worth more than the people who work for them (defined in salary and benefits/perks)
  • managers’ decisions are right (until they are not);
  • meeting or exceeding shareholder expectations is the purpose of firms;

Business Schools are multi-disciplinary – that is definitely a plus – and the aggregate business discipline is a social science. The disciplines, for Parker, are (pp 26-34):

  • Finance (always assuming that earning rent on capital is a legitimate and perhaps even praiseworthy activity, with skillful investors being lionized for their technical skills and success);
  • HRM (not particularly interested in what is like to be a human being);
  • Management information systems (premised on the sensible assumption that high-quality, relevant and timely information is necessary to make high-quality relevant and timely decisions, but agnostic about direction or context of the made decisions);
  • Operations management (aimed at shrinking time and space, and when successful destroys the local);
  • Accountancy (the production of different versions of the truth for different purposes);
  • Marketing (predicated on maximising the number and value of transactions within a given organisation, market or economy, promoting hyper-consumption);
  • Strategy (an attempt to predict the future and shape an organization in such a way that it profits most from what that future looks like).

Economists are spared character assassination, MBAs (the award and the award holders) are not, and there is not much that is good to be said about professional organisations such as Business School accreditation and Accountancy bodies. Government and regulators are also chastised and the universities obliquely for currying favour with them.

Of course, practitioners in these disciplines are likely to be unhappy with these characterisations. But Parker is trying to make a point and breaking a few eggs in the process. For whilst in each Business School there are scholars happily teaching to formula, many are not. He puts himself in the not category as a critical management theorist. These iconoclasts are generally tolerated in Business Schools. And successfully ignored, though their books and papers are, usually, counted in the compilations of league tables of excellence in publishing.

Where is this going?

This book follows the formula for the books that I currently read and review: tell a ghastly story of how it is, and then lead the reader to a new and enlightened future. For the Business School, Parker has a number of ideas. The marketisation of education has turned education into a product. The Business School then provides the customer – students, their parents – with what it thinks they want; namely, the formula for being a manager, creating wealth (for self and others) and “success” (judged against spurious measures).

Parker’s solution is a School for Organising; one that does not view organising and management as synonymous. There is no reason – as demonstrated in countries such as Germany – for workers and their representatives to be excluded from Executive Boards. There is no reason for firms to prioritise shareholders over employees, workers and community. There can be no justification for the raison d’etre of firms to be to externalise pollution and bring about the collapse of civilisation (which is the likely outcome of uncontrolled climate change). The “hollowed-out” state, as we witness currently (writing in the middle of the Covid-19 pandemic lockdown in the UK), has left citizens vulnerable to a virus for want of Personal Protective Equipment, the provision of which in the UK was outsourced and subject to minimal inventory control, something that the managers of the supply companies and the politicians, learned in Business Schools.

The new Business School asks “How can people come together to do stuff”? (p113). What are the alternative modes of organising, both political (for example, anarchy) and business (for example, co-operatives such as wholefood wholesaler, SUMA, pp116-119)? It is truly interdisciplinary – not just within the School’s disciplines, but external, too. Other faculties such the natural sciences and humanities (art and business are very good companions). For myself and my own writing (I am writing a strategy textbook, please get in touch if you want to read it), the natural sciences are the starting point of our business courses. The planetary boundaries are the starting point for organising, not an afterthought. It is the job of the new Business School to alert students to the possibility of alternative ways of organising, evaluation and making decisions.

The disciplines ridiculed earlier are repositioned. “Accountancy is no longer about finding and hiding profits” (p169), marketing works for the people who buy things, not those who sell; operations management correctly prices carbon and other pollutants against speed and price. Economists teach de-growth or reformulate GDP in human terms.

Parker is also aware of the dangers of setting up a School for Organising. Over time, it becomes its own Business School, packed with salaried professionals with pensions detached from the people who are subject to the School’s teachings. There is a need, he argues, for de-schooling (drawn from the work of Ivan Illich), a much more co-operative approach to learning – learning being the operative word. That said, there has to be room for study – a discipline, a task – without which more bad decisions get made. De-schooling to its natural conclusion of no School at all is no panacea. The Business School is politics and politics is about power and the control of resources. There is nothing, however, to say that what the Business School teaches has to be capitalist-managerialist.

Picture: University of Leicester