17 Aug 2017

Review: Reinventing the Bazaar

I think the title of this 2002 book by John McMillan (who died too early, at 56) refers to the need to reclaim the place of markets in the public's consciousness just after the Dotcom crash and Enron bankruptcy at the turn of the millennium. The book's subtitle ("a natural history of markets") may indicate how markets are natural in both their origin and function as well as their endurance through booms and busts that may "shake out" specific players, products or processes.

My interpretation of the name may be wrong, but the book certainly delivers a thorough and clear explanation of the forces within markets and the forces (especially government policy) that affect their formation and operation. It is with these characteristics in mind that I consider this book a much better introduction to economics than Freakonomics, for example, and a broader foundation to understanding markets than was given in Who Gets What and Why (although that's an excellent book).

(I will note here that the book does not focus on non-market economics central to understanding and managing common pooled and public goods such as those I often discuss here, but McMillan does provide contextual explanations of how markets can create negative externalities, cannot always regulate themselves, and so on.)

To give you a taste of the book, I will provide a brief comment or quotation for each chapter.
  1. The only natural economy: "The market is not omnipotent, omnipresent, or omniscient. It is a human invention with human imperfections. It does not necessarily work well. It does not work by magic, or, for that matter, by voodoo. It works through institutions, procedures, rules, and customs." McMillan's uses "natural" to point out how markets emerge from various behaviors while reflecting local conditions. You cannot make an artificial market unsuitable to those conditions just as you cannot prevent people from making a market to suit their needs.
  2. Triumphs of intelligence: Markets deliver incredible value with low effort by allowing people to trade, each to their own advantage.
  3. He who can't pay dies: Supply goes to those with money, so poorer people are more likely to die. This is not a fault of the market, which is efficient in a way, but a sign that governments need to get involved to help poor people (most usefully by giving them money; most harmfully by controlling prices of goods such as water, housing, or medical care).
  4. Information wants to be free: Competition reveals information about buyers and sellers, goods and services, and more information leads to better outcomes. (Regulation can lead to misleading information, as when industry "helps" draft regulations. The contents of gasoline and food are both regulated, but gas prices provide good information while food labels are misleading.)
  5. Honesty is the best policy: Repeated transactions build reputations that help honest market participants (e.g., fake reviews on Amazon, credit scores, branding, etc.)
  6. To the best bidder & Come bid!: Auctions match the cheapest supply to the most valued demand. McMillan was involved in the pathbreaking auctions of radio frequency spectrum, which have raised $billions for governments. (He points out that governments have cost taxpayers $billions by giving spectrum to political friends.)
  7. When you work for yourself: Property rights give owners an incentive to be more efficient and discover value. The Soviet Union's model of "something that belongs to everyone belongs to no one" fits in here, as does the lack of "ownership" in the environmental commons that results in water pollution and GHG emissions driving climate change.
  8. The embarrassment of a patent: Intellectual property rights can help but they can harmful if they are  too strong. (Listen to this podcast on pharmaceutical patents, for example.) China's Pearl River Delta region may overtake Silicon Valley as the latter's increasing reliance on patents interferes with innovation.
  9. No man is an island: Negative externalities from pollution, market power, etc. inhibit efficiency. McMillan ends this chapter with: "A workable platform for markets has five elements: information flows smoothly; people can be trusted to live up to their promises; competition is fostered; property rights are protected but not overprotected; and side effects on third parties are curtailed. For the remainder of the book I will look at how these five elements of market design get to be implemented -- or fail to be." (P135)
  10. In the next chapter (A conspiracy against the public) he says: "An intrinsic tension exists between the state and market. On occasions it becomes unhinged. The government has an essential role to play in designing markets. But intervention in markets has a downside, for governments cannot necessarily be relied up on to act as they should.... Government officials sometimes obstruct markets and profit from them by extorting bribes. They also on occasion help favored market participants to conspire against the public." Those last two sentences capture the essence of corruption ("abuse of public office for private gain"), which can involve stealing money but also promoting one's personal beliefs of what is "good" over what actually helps people. In the case of water, this includes charging too little for scarce water or system maintenance.
  11. Grassroots effort: A recap of the ideas best expressed in Hayek's 1945 paper, i.e., prices make it easy for disaggregated, uncoordinated participants to coordinate in a bottom-up manner that is faster and more efficient than in any top-down regime.
  12. Managers of other people's money: A recap of the ideas expressed in Coase 1937, i.e., the "boundaries between a firm and the market are determined by transaction costs." Corporations do not rely on prices to play a big role in markets because they reflect command and control management. They tend to do well when there are profits to be won or lost in competition with other corporations, but they fail when they are left to authoritarian devices...
  13. A new era of competition: Governments can create markets for goods such as pollution or spectrum. These markets will work (or fail) in accordance with the design's accuracy and completeness. McMillan describes how the US market for SOx worked, but California's wholesale energy market failed (taking down the governor with it).
  14. Coming up for air: Governments can suppress or create markets (e.g., Russia's 1990s shock therapy), but excessive speed may hinder participants and institutions from learning how to use markets, thereby undermining and destabilizing their function.
  15. Antipoverty warriors: "Poverty cannot be eliminated by sharing the wealth" (p 213), but growth must reduce inequality if it's to be sustainable. We've seen many (well-deserved) protests on this issue. Anti-globalizationists are right to worry about unequal growth, but they need to attack politicians, not market participants, for that fault. It's possible (easy, actually) to transfer some of the gains of growth to losers...
  16. Market imperative: Markets can help a community but not if one group advances at the expense (or without regard) for another. Markets have an immense capacity to help us help each other... "as if guided by an invisible hand" but markets do not exist in a void. Good policies are necessary to help markets serve the community.
Bottom line: I give this book FIVE STARS for its clear and thorough discussion of how markets work (or fail) in human societies around the world. Read it if you want to really understand why economists are often so optimistic about human progress... and why those who are pessimistic focus on social and political failures.

15 Aug 2017

Reddit AMA on NOW

I will be doing an AMA (Ask me anything) on Reddit tomorrow (soon? next week?*) NOW, starting around 14:00 Dutch time (UTC+2). I've done five so far.

Potential topics:
  • Water scarcity, drought and floods
  • Climate change, adaptation and mitigation
  • The commons for cooperation and conflict
  • Travel and culture in different parts of the world
  • The war on drugs, darknets, cryptocurrencies
  • Bikes and cars, cities and people
So, please stop by here.

Tuesday funnies!

I'm getting better at having no idea of what I am doing...


14 Aug 2017

What have I learned after travel to over 100 countries?

I turned 48 today and figured that it's a good excuse to (finally) write up some thoughts on travel, culture and life. (If you just want to see photos, then go here.)

Last summer, I passed the 100 mark in terms of countries that I've visited in my life.* My first trip outside the US was a post-university "grand tour" of nine European countries.

Long ago, someone asked me what I'd learned after traveling for some time, and I replied that "people love their children." This seemingly trivial observation still stands as a good starting point, as it captures the similarity that dominates our differences in history, language, culture, etc.

I could tell you stories about the Iraqi who cried to me and my friend about their families when we met in Yemen in 1997. Or show you photos of the Mongolian father holding his tiny baby while he sat on his horse. Or of the Belgian kids playing in the fountains in the sunshine.

From this starting point, it is not so hard to see that most people are worried about themselves and their lives, not you. That fact makes it easier to travel to places, as most people don't care if you are there. Some may be curious (the more remote places), and some may be needy (the more touristy places), but most want to leave you alone as they want to be alone.

That said, there are many people who have a more difficult life than me (or any tourist), pretty much by the definition that I have the means to visit their country and they usually do not. That difference in means is usually no reason for them to be sad (I forbid my students from saying "poor and miserable"), as happiness is often a subjective emotion that combines current condition and future hope. Food, water, shelter and family in present circumstances and some hope for work, learning or advancement is often adequate for an average human to feel happy. It's the current deprivation or future hopelessness that gets people down -- as we see with people fleeing fascist or collapsing countries or Americans turning to crack or opiates to try to escape their poverty and helplessness.

What I enjoy about travel is exploring and understanding how different people address the various  problems and constraints arising from geography, history, culture or economy. How do they build their houses, get water, move, rest, play or worship? How do they live with their weather, flora and fauna? I've slept on the annoying pebbles on the shores of the Dead Sea, tossed and turned with cold and altitude sickness in Kenya, sweated through the night in India, and licked the salt walls of a salt hotel in Bolivia. I've eaten with my hands, chopsticks, hot bread and even out of the hands of beautiful Ethiopian scammer.

My main goal when traveling is not to uncover the exotic but to see -- and perhaps understand -- how different people make do and succeed in their lives. In most cases, this involves work, money, family and success, but the means and methods vary with the starting point, resources and expectations. The variety of these paths and intense energy with which people pursue them is truly fantastic to consider. One reason I liked going to Burning Man was that it captured a distilled essence of human curiosity, creativity and compassion -- energies that I have experienced hundreds of times in various squares, bus stations, markets and cafes.

I decided not to have children around 2000, as I felt that my life was complex and rewarding enough without them, but a childless life leaves you with the question of what else to do. After five years of continuous travel (1995-2000), I had decided that I had too much "consumption" and not enough "production," so I stopped and returned to work and eventually studied for a PhD. I had begun with a goal of understanding "development economics" (i.e., why some countries grow rich and others do not; what it means to be civilized, etc.) but turned to resource and environmental economics when I got into water. My early interest has not gone away but added to my study of the water and the influence of institutions, politics and society. My travels before, during and since graduate school have complemented book ideas with the reality of the road. I don't see any reason to stop traveling, learning and meeting new people.

What about climate change and travel?

We debate while the world burns (Science museum, Tokyo)
I would be pretty bullish on the future of humanity -- even with people like Trump and Putin around -- if it wasn't for climate change (CC), which promises to take away a number of really helpful "ecosystem services" that we have taken for granted. I doubt that CC will lead to human extinction, but it's definitely going to increase the cost (and thus reduce the quality) of our lives, no matter where we live or how rich we might be.

The real solution to CC is a reduction in greenhouse gas emissions, but such mitigation will not happen voluntarily ("tragedy of the commons") and has not happened through a binding international agreement (The Kyoto Protocol was abandoned too early -- probably because its cap and trade mechanism depended on the politically-devisive need for rich world polluters to send money to poor world victims.) It's under these conditions that I have decided that there's nothing for me to do about my travels, meat eating, etc., as action on my part will not matter unless it is part of a group effort to overcome free-riding. Cooperation on a planetary scale is quite a challenge (we can't even fix daylight savings time), but I'm available if the Galactic Council asks for advice (short answer: carbon taxes).

How about some travel advice? What's changed over 27 years that you've been traveling?
  • Some people don't like to travel or want a beach resort. Others "go native" in a village for 4-5 years. Don't get bothered if someone's style is not yours (unless it's your partner!)
  • "Homesickness" depends on how long you plan to go. If you say 2 weeks, then you start to think of home after 10-12 days. If you say 4 months, then it's after 3.5 months. 
  • It's more fun to travel over land to appreciate the changing scenery and culture, rather than fly in and out. In my overland travels from Europe to Asia, I got a lot more accustomed to gradual changes than I did flying in and out of Latin America in 5 separate trips. (It's also cheaper not to fly, but most people lack the time...)
  • I began when communications were via expensive phone and slow mail. Now people have wifi and continuous status updates. In the old days, travelers would talk to each other and do things together. Now they are usually staring at screens and searching Yelp for restaurants. It's quite sad to see this "low intensity, low immersion" travel, but the locals are doing it too. 
  • As I get older, I prefer to have accommodation booked in advance, as that saves confusion on arrival and money/negotiation on costs. It's still best to travel with a back-pack (mine is a 70 liter water-everything-proof bag) rather than "wheelie" bag to (1) carry less and (2) carry easier.
  • The best way to see a city is to walk around and follow whatever is interesting. Guidebooks can be fun, but they take time to digest and sometimes mislead you with too many "well worth it" recommendations.
  • I find it's harder to revisit a place, as "we" have both changed and may not get along as well as  last time. That said, there are plenty of cities (and countries) that deserve to be explored in layers. Just don't get your hopes up that Paris will taste the same as it did when you were running down the Seine one dark night with a new friend and bottle of wine!
  • Personal recommendations are still the best way to find restaurants, fun neighborhoods, etc.
  • Everyone has their own risk-profile. Most risks are of the unknown, but some are foolish or dangerous. That said, your "nose for risk" will be keener when you've been in country for longer, know more locals, and have heard more stories. That said, most people are just as worried about you as you are about them, so chill out, trust your fear and take some chances.
  • When you're on the road for awhile -- backpacker style -- then you will meet lots of people. Some of them you talk with over tea; others may be travel or cuddle buddies. Many you will never see again. That's not a bug but a feature: it's handy to be friendly with strangers. You can have deeper relationships when you're likely to see the person multiple times per year (i.e., where you live).
  • The best part about talking with strangers is that you can take the time to understand them. People these days are too quick to criticize others because they use social media in a rush -- which sucks for understanding -- rather than talking face-to-face over a few drinks. Try the old school method. (If you do it in bar or cafe with a stranger, then make sure you remind them you're not a serial killer but actually in the place to chat with others!)
  • Travel in the countryside either involves walking (trekking in Nepal), transport (riding atop a Pakistani lorry), riding (to the Kyrgyz highlands), or driving a car (and getting stuck on the wrong road to the hotspring in California). I prefer cities (and walking) because there's more human density, but it's also nice to really get into nature some times.**
Bottom Line: I've enjoyed travel for the insights and knowledge it has given me about myself and the world we live in. People are amazing in their kaleidoscopic variety as well as their shared humanity. We could all live a little easier if we valued and respected people (and the environment that sustains us) as much as we value our lives at home.

* Here they are! Albania, Argentina, Armenia, Australia, Austria, Azerbaijan, Belarus, Belgium, Belize, Bolivia, Bosnia and Herzegovina, Brazil, Brunei Darussalam, Bulgaria, Canada, Cambodia, Chile, China, Colombia, Costa Rica, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, El Salvador, Eritrea, Estonia, Ethiopia, Fiji, Finland, France, Georgia, Germany, Gibraltar, Greece, Guatemala, Honduras, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kenya, Kyrgyzstan, Laos, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Madagascar, Malaysia, Malta, Mexico, Moldova, Monaco, Mongolia, Montenegro, Morocco, Myanmar, Nepal, Netherlands, New Zealand, Nicaragua, Norway, Oman, Pakistan, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Russian Federation, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Syrian Arab Republic, Thailand, Tunisia, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Uzbekistan, Viet Nam, Yemen

** It's not like Nature is trying to kill you, but "survival of the fittest" is a thing. As humans, we have the tendency to want to conquer Nature and kill everything that threatens us, but this intolerant "them or me" perspective has led to a lot of damage and kept us from taking a more benign path that would be better for us. Ecosystems produce a lot of life, beauty and value amidst all the killing :)

13 Aug 2017

Facebook is essentially misanthropic

I have had multiple bouts of doubt about Facebook, its business model, and its impact on users, but this essay brings new light to my fears of how it will monetize you.

In May 2010, I suggested two options:
  1. FB starts to charge a membership fee or goes fremium... [but Facebook promises "free and always will be," which brings us to...]
  2. FB struggles with free and ads. Maybe it shuts down, but then it goes rogue. All of that data you gave FB when you were 20, inexperienced, foolish and frequently photographed? FB is going to come back, when you are 30 or 40 and ask for a payment, to keep it private. That's because FB never really deletes your data when you tell them to "cancel your membership."
And now I see -- after reading that essay, that FB has essentially "gone rogue" with your personal data to not just target you with ads, but follow you everywhere you go on the internet (and with a mobile phone connection), to sell your profile to merchants who can then price discriminate against you -- and you may not even know they are getting private data on you.

That's why the essayist writes:
"Facebook, in fact, is the biggest surveillance-based enterprise in the history of mankind."
Bothered by this? You can quit Facebook (hard for people like when my work has failed to set up a communications system and uses Facebook instead), or minimize your vulnerability by, for example, keeping your mobile phone number to yourself (and not using FB mobile), as well as posting as little demographic information (age, address, hobbies, schools) as possible. (And switch as soon as possible to a less-invasive social network.)

Bottom line: There's a monopolist that is using your digital profile to take money from your pocket and redirect your life to suit the goals of advertisers. Caveat emptor.

11 Aug 2017

Friday party!

Go Dutch women! (European football champions)


(By coincidence, it's my mother's birthday today. She would have been 76 years old. RIP.)

10 Aug 2017

Competition leads to better political leadership

So end Gerrymandering (drawing electoral districts to favor one political group over another).



Want more? Here's John Oliver's excellent episode on why crazy voters should be able to pick their politicians, and not the other way around

9 Aug 2017

Links of interest

  1. My latest op/ed: "Adaptation should secure communities, not property"
  2. Peer-to-peer lending (I've had a terrible return from Lending Club) will only get legitimate when it's regulated like banking (there are too many incentives to provide sub-prime information now)
  3. Watch this Vox video on "the high cost of free parking"
  4. Corruption: "How powerful people use criminal-defamation laws to silence their critics"
  5. Recommended: "How to think like an economist"
  6. I'm quoted in "Opponents of California’s Delta Tunnels Project Push Alternative Strategies" (Here's my idea for local self reliance; this paper [pdf] estimates that SoCal could "support itself" without imports.)
  7. "A world of free movement would be $78 trillion richer"
  8. Globally, more people think China is a greater economic power than the US
  9. If electrical utilities like heatwaves, then surely water utilities like water waste
  10. A marketing guy applies economics to real life
  11. Should the Dutch switch to English and drop their mother tongue?
  12. "This paper shows that cheating [on a lab task in India] predicts corrupt behavior by civil servants, implying that it is a meaningful predictor of future corruption. Students who demonstrate pro-social preferences are less likely to prefer government jobs"

8 Aug 2017

Review: The Great Surge

I bought this 2015 book after hearing it praised as an excellent introduction to development economics. Its author, Steven Radelet, has several decades of experience as an academic, consultant and advisor to governments and agencies working to improve and implement programs to help people escape poverty, disease, ignorance and oppression.

The book is easy to read, with numerous examples and clear explanations of basic and advanced concepts, as well as an historical perspective that puts various development ideas into perspective. Although I am familiar with nearly all the ideas and examples in the book, I would be hard pressed to write so clearly and provide such a helpful framework to first time readers interested in these topics. The book thus provides a better introduction than either a textbook (too dense and/or inapplicable) or opinion piece (e.g., Easterly, Sachs, Moyo, et al.). That said, Radelet sometimes uses too many examples or repeats some points, so I suspect that the book could have been about 20 percent shorter and thus easier and clearer for the reader.

The book is organized into three parts: The Surge, the Catalysts, and The Future. The Surge explains how the end of the Cold War "freed" many countries from the need to align themselves to either the US or USSR as well as US or Soviet manipulation of those countries' politics in favor of their geopolitical goals. (Radelet explains how many bad colonial policies would have faced criticism in states that won their independence after WWII -- he lived and worked 5 years in Indonesia -- except for the influence of Cold War dynamics.) The upshot was that many regimes needed to adopt liberal political and economic policies as their leaders became more dependent on domestic legitimacy and lost the benefit of outside patronage. At the same time, there was also more opportunities for leaders who wanted to develop, as the end of a the First-World/Second World (US/USSR) dichotomy meant that neighbors could trade based on their comparative advantages rather than political orientation.

There are many exceptions to this generalization, but Radelet uses a dataset of 109 developing countries (neither too small nor too rich) to show how development surged for the average country in that dataset, i.e.,
My basic argument is that beginning in the 1980s and 1990s, many of the “unfreedoms” that had inhibited development began to be removed. The combination of huge geopolitical shifts, changing economic and political systems, deepening globalization, access to new technologies, stronger leadership, and courageous action created the conditions, opportunities, and drivers necessary for progress. The result was the great surge.
Radelet notes that this basic progress did not get a lot of attention from academics or the press, as the former are more interested in studying specific examples in detail and the latter are more interested in extremes and disasters. These points make sense to me. I've visited over 100 countries and the most consistent thing I've learned is that everyday normal dominates occasional exceptional. (I'm writing this in Japan where we've not encountered a single earthquake, sumo wrestler or tea ceremony!)

Radelet also makes a good point when he reminds us that "development" is not just something bought off the shelf. In a world of private goods (e.g., mobile phones), it is indeed easy to set up towers and charge subscriptions to people who have bought handsets from factories on the other side of the world. In a world of collective goods, one cannot ignore or avoid the need to cooperate with neighbors in the provision of public safety, taxation and spending on education and healthcare, etc. It takes time and effort (and often outside existential threats) to form the institutions that separate the "developed" from "developing," i.e.,
The history of more mature democracies shows that it takes many years to build the institutions, public attitudes, expectations, checks on power, and other systems required for democracy and accountability to become established. They must be monitored and strengthened. Democracy is a process: there are no shortcuts, and there are many setbacks along the way. Occasionally countries can evolve into strong democracies in a decade or two, especially when they have strong and gifted leaders, a unified society, and a favorable regional context. However, it often takes longer.

It took more than a century for democracy to solidify in Western Europe, and the process continues to unfold today. It took the United States 185 years to achieve universal suffrage, with numerous violent conflicts, a bloody civil war, disputed elections, massacres of American Indians, a divisive battle for basic civil rights, recurrent episodes of corruption, countless inside business deals, and human rights abuses along the way. The United States, for all its many strengths, today is far from an ideal democracy. The history of the world’s oldest and strongest democracies teaches us that the democratic transition is neither fast nor easy, and that it does not progress in an orderly fashion.
Although this quote gives me hope in a time of Trump and Brexit,* it also provides a warning of how hard it is to rebuild what some politicians so casually dismiss. Indeed, Radelet's prescriptions for the hopeful path (in the Future section) rely on a US leader who is democratic, willing to work with international institutions, focused on dealing with climate change and willing to work with China -- four characteristics that define the anti-Trump and indicate just what a disaster Trump is for the world.

Returning to the book, Radelet discusses four catalysts: technology, globalization, leadership and foreign aid. He does a good job at describing how each can help as well as fail, i.e., technology that helps some countries get ahead of others, globalization which brings cheaper goods but job losses, and leaders who can make or break a country. The discussion of leadership fits well with his earlier points on democracy and the institutions that keep bad leaders from doing damage and help good leaders move the country ahead. On international aid, Radelet is right to note that it is often helpful but not the only means to development. In most cases, development takes place as individuals work out ways to improve their lives and provide a better future for their children. This path (better examined by Scott in Seeing Like a State and Two Cheers for Anarchism) also explains how development has slipped under the radar of politicians, wonks and journalists who can only understand anecdote or oversimplified explanations.

The final section on the Future covers three paths: all goes well, middling along, and things turn bad. These last chapters are a bit tiresome for someone who would like a concise trajectory but Radelet is right to explain how various forces interact to help or hinder development. Although it's hard to be optimistic and easy to be pessimistic (easy if you worry about over population, populism and climate change), Radelet makes a good point in enumerating the many helpful steps on trade, cooperation, governance and technology that aided development after the horrors of World War II. Those decentralized advances took place in a time when a nuclear war could have killed billions and environmental damages rose to terrifying levels -- problems with modern equivalents in terrorists threatening nuclear war and climate change.

It's not hard to see human civilization as a series of two steps forward and one step back developments, so perhaps that is a good default to use, should we be thinking probabilities more than possibilities.

Bottom Line: I give this book FOUR STARS for its useful overview of the development that we have seen, the causes of that development and where we, as humans, might go in the future. I recommend it to anyone seeking to understand the basics and our common future.

* The Economist on populists:
If there is anything that unites the policies of Mr Trump with Brexit and the beliefs of European populists, it is a promise to break free of constraints. But a populist upswing propelled by unhappiness with established institutions raises an awkward question: if these institutions are worthwhile, why are people so frustrated by them? The authors argue that populists highlight the short-run advantages of wrecking institutions while downplaying the long-run consequences.

For all my reviews, go here.

Stossel vs an ecologist on rhinos

Here's some economic logic against faulty emotion:



(You may remember that I wrote in favor of markets for rhino horns -- and elephant tusks -- a few months ago.)

7 Aug 2017

2 Aug 2017

Please support "Water: An Atlas" on Kickstarter

I have one page in this atlas, but it promises to be a really great book. Please consider supporting this project to help get better geo-spacial visualizations of water data in front of more people.

Here's a sample page:

1 Aug 2017

The Bitcoin fork

If you're interested in crypto-currencies, then maybe you've heard about this. If not, then maybe you want to watch this video to learn how a decentralized (=no government monopoly power) currency evolves.



This site is tracking the fork(s), which are set to occur in the next few days and months (depending on the definition).

Here, btw, is a very entertaining site that will explain Ethereum (another crypto currency) according to whether you're a scammer, nerd, artist, etc.

22 Jul 2017

How will climate change change our lives?

I'm on holiday until 7 August, but you can still think differently about water, life and climate change by:
  1. Reading Life Plus 2 Meters, vol 1 (100pp, free download)
  2. Writing a short "vision" for volume 2 (deadline 15 Sep)
Enjoy the summer!

20 Jul 2017

Review: Development Projects Observed

Albert O. Hirschman wrote this book in 1967 with the permission of his home university (Harvard), the funding of the Brookings Institution and Carnegie Institute, and the cooperation of the World Bank, which provided access to their projects in El Salvador, Ecuador, Ethiopia, India, Italy, Nigeria Pakistan, Peru, Thailand, and Uruguay.

In his preface (p xi), he notes a key finding of his research:
In the end, my argument amounted to denouncing attempts at trait-making [proposing and implementing a project that may not fit with local conditions] under certain conditions. Some narrow-latitude tasks simply go beyond the capacity of a society as presently constituted and are therefore likely to end in failure.
This passage previews what promises to be an insightful early critique of today's International Aid Community -- one that I have criticizedmany. times. It also indicates that this book is still well worth reading 50 years after its publication.

Perhaps the most important reason for reading this book is Hirschman's accessible and conversational style of connecting academic curiosity with realistic critique. You can already tell in the first few pages that you are reading the words of a man who has learned a few key lessons after seeing a lot -- as well as the words of a man who knows that his story is not the only one. Every "development project" has a unique character.

Hischman is known for coining new terms ("Exit Voice Loyalty"). Here, he coins "the hiding hand," which hides surprises that drive a project off its planned course and hides people's capacity to solve those complications. Hischman is therefore pessimistic that we know what we are doing but optimistic that we can actually achieve a lot despite that. When using this term, he is quick to contrast the bureaucrat with the entrepreneur, in that the former is more shy about taking a chance and less eager to innovate to prevent failure. These attitudes may determine the difference between bureaucratic failure and entrepreneurial success on the same project.

After introducing and discussing this idea, Hirschman has four chapters on Uncertainties, Latitudes and Disciplines, Project Design (trait taking and trait making) and Project Appraisal (the centrality of side effects).

I'm going to rush through notes for the rest of the book because (a) you should read it and (b) I'd write a LOT more if I merely described all the great insights in this book of less than 200 pages.

On Uncertainties, Hirschman warns that projects cannot be "copy pasted" when local conditions matter (e.g., irrigation schemes). From the opposite side, he suggests that projects that can happen "anywhere" are less likely to fail from unforeseen (local) conditions such as a division of labor among groups that do not talk to each other for political, religious or other subjective reasons that have nothing to do with the project. These divisions matter in any conditions but they make it much harder to "deal with the hiding hand" because groups see failure as a time to grab their share instead of look for a cooperative solution.

In Latitudes and Disciplines, he discusses how it may be useful to have "freedom to adopt" OR useful to lack that freedom, as options can facilitate compromise or make it harder to force compromise. Such situational circumstances can make or break a project, depending on its leadership. Leaders thus might work hard to help a project succeed to protect their reputation, but they may also choose a path that leads to larger harm. (This happened with the Metropolitcan Water District of Southern California when they built the Colorado Aqueduct in the 1930s and had no customers -- they supported sprawl via cheap water as a "solution" -- see my dissertation.)

Hirschman points out that corruption in construction need not lead to corruption in operation if construction and maintenance are separated. If they are both under one roof, then watch out -- especially if it's a monopoly service like energy, trains or irrigation! (He also makes the apt comparison of slums to planned communities, pointing out that slums are probably more efficient in delivering what their poor residents -- rather than planners or ideologues -- want.)

Under Project Design, he notes that a trait-taking project "takes as given" local conditions, which makes it more likely that the project will succeed by adding to those conditions, contra a "trait making" project that forces locals to fit the planners' vision. (See Scott on this issue.) He warns against projects that lack time or site constraints, as they are most likely to wander and attract corruption.

In Project Appraisal, he warns against aggregate benefit-cost analysis that ignores benefits to one group and costs to another or counts some costs but not others -- two themes I explored in this paper [pdf] on desalination projects.

Bottom Line: I give this book FIVE STARS for its interesting and entirely relevant of the process of designing and building the big projects that "develop" societies, projects that require a strong community to ensure that the commons are protected and extended for the benefit of all. I wrote this review in extreme haste, but don't let its brevity mislead. I plan to read this book again every year or so to remind myself of the big picture in human cooperation. You should too.
For all my reviews, go here.

19 Jul 2017

Links of interest

  1. The billionaire-financed rise of the thought leader (and decline of the public-financed public intellectual) combined with the continued decline in access to academic research and the rise of high-tech (low labor) additive manufacturing may favor Europe over the US (or China).
  2. Magical warfare technologies help "irrational" people win
  3. Economics of the populist backlash
  4. "The Photographic electronic Narrative (PeN) project shares photographs taken by current and ex-offenders on placement at LandWorks: an independent charity which provides a supported route back into the community for people in or recently released from prison"
  5. The hightech war on scientific fraud in the place that's had troubles: The Netherlands
  6. Trump and Pruitt appear not to care about the environment people who live in environments (kinda everyone)
  7. A poetic 1970 essay California water management from Joan Didion
  8. A contemporary plea for mercy from Venezuela
  9. An economist brings realism to the discussion of human behavior (spoiler: math doesnt' hack it)
H/T to DL

18 Jul 2017

Trickle down economics just doesn't work

I wrote this on reddit, but it's worth repeating:

The premise of "trickle down" is that wealth for the rich will result in (some) wealth for the poor. More important, it assumes that the government should get involved by making the rich richer. (This is why the term is considered derogatory.)

So... how do the rich get richer?
(1a) The government gives them wealth ("rents") via a contract, corrupion, or other "neoliberal" policy (I hate that term as often confuses markets and politics); or
(1b) They make themselves rich.

For (1a), see "cheap oil royalties", patent trolls, defense contractors et al. For (1b), see "Bill Gates"

Now, how can it "trickle down"?
(2a) The government taxes the wealth and transfers the $ to the poor. That's kinda counter productive for (1a) (why not just give the royalties to the poor?), but makes sense with 1b.
(2b) The poor somehow benefit from rich people being richer (see Fable of the Bees).

Both of these make no real sense compared to the real source of prosperity for the masses, i.e.,
(3a) Cheap access to education and health care
(3b) Competitive markets (reducing rents)
(3c) Taxes on wealth that pay for (3a)

So, next time you hear ANYONE say "trickle down" just walk away. It's bullshit. A government that wants efficiency and equity will do 3a-c, which is compatible with basic income, carbon taxes, property taxes, etc., btw...

13 Jul 2017

Did you leave the water running?

That's what Cornelia asked me on the phone when she got home one day.

I had left the house with headphones on, so I didn't hear that I had left the water running in the kitchen.

Luckily (?), we pay a flat rate for water as we have no meter, so my mistake -- leaving the tap open for 2 hrs and thus wasting about 0.73 m3 of water ( 120*6liters/min = 720 liters) -- cost nothing. Had we paid the price of metered water (about €1.50/m^3), it would have cost about €1-2, but it would have FELT far more painful (like dropping a coin in the canal).

Anyway, the point of this post is that meters make people think different about water consumption, but so do some other things. I got a plumber to repair a leaking toilet last year (cost about €100) because we were renting out to Airbnb people and a leaking toilet is annoying. The cost was far greater than the water lost (ignoring that I don't pay for that), but it's been nice to have a quiet toilet :)

Bottom Line: Nobody wants to "waste" water, but meters (price incentives) will encourage them to take actions to waste less.

Links of interest

  1. A detailed chronology of Trump's ties with Russia (as of May) and a great podcast on Trump, mining your social media and fake news propaganda
  2. "Hot weather is getting deadlier due to climate change"
  3. Don't like ads and targeting? Use this widget to click them all, thereby destroying the value of the data
  4. Bad idea: "Damming the Rivers of the Amazon Basin"
  5. Tanzanian civil servants focus on new projects instead of maintaining existing water projects
  6. "China's growing water scarcity challenge"
  7. "Micro-irrigation in India: An assessment of bottlenecks and realities"
  8. "the Dutch are likely to become undone by their own progressivism"
  9. The first useful description of "what makes a great wine" that I've ever read
  10. Two military strategists explain how the US is wasting lives and money on war
  11. "Economic theory" needs to be understood as "economic perspective"

12 Jul 2017

Internet-wide day of action to save net neutrality


To learn more, read this.

To receive more information, go here.

To see who supports net neutrality go here (and read others' comments).

11 Jul 2017

More on carbon taxes...

In response to So what would a carbon tax really cost?, Stefano Carattini wrote:

We have recently published an advanced review article tackling some of the points that you mention.
From the abstract: Here, we present the main arguments for carbon pricing, to stimulate a fair and well-informed discussion about it. These include considerations that have received little attention so far. We stress that a main reason to use carbon pricing is environmental effectiveness at a relatively low cost, which in turn contributes to enhance social and political acceptability of climate policy
Lobbying definitely plays a key role here, but unfortunately under standard circumstances the general public is not much more open to the idea of a carbon tax (see for instance this).
From the abstract: We examine the determinants of voting and find that distributional and competitiveness concerns reduced the acceptability of energy taxes, along with the perception of ineffectiveness. Most people would have preferred tax revenues to be allocated for environmental purposes... [Given the inefficiency of this choice...] providing information on the expected environmental effectiveness of carbon taxes reduces the demand for environmental earmarking.
I then asked Stefano: Do you think that a series of national carbon taxes (with funds reallocated domestically) is better than an international (but more efficient) tax system? I think that cap and trade is defacto dead as a policy due to its complexity but — worse — its design of shipping money to foreigners. Thus, I think that a national carbon tax (even without border adjustments, but I like that idea of refunding the border adjustment to the exporting country!) is a definite second best…

To which he replied: The question that you ask is a tough one, but I would say that yes, starting with domestic carbon taxes is probably the most feasible solution. The number of countries implementing carbon taxes has been slowly but steadily rising in the last few years. I know of several initiatives trying to tackle the unpopularity of carbon taxes, with the aim to push for (acceptable) national carbon taxes in different countries. For instance, Citizens’ Climate Lobby is also pushing in several countries (starting from the US) the idea of a carbon fee-and-dividend, a carbon tax whose revenues are redistributed through lump-sum transfers (advertised as “checks”). Their plan does include carbon motivated border tax adjustments, as also did the recent initiative by a group of prominent republicans. At some point, British Columbia actually had a serious plan to implement an original version of a border tax adjustment, by taxing carbon-intensive imports.*

The wind may be slowly changing. Firms are also realizing that carbon pricing may be advantageous for them, of course depending on the design, as long as the status-quo is no longer an option.

* DZ: According to this summary, the border tax has not been implemented, perhaps due to the plan to tax carbon across Canada in 2018.

6 Jul 2017

Masters of Useless

NB: I originally wrote this for The Guardian's Academics Anonymous, but they passed. I am publishing it now because our students are graduating today, and they may want to think about incentives before they rush into masters programs. My thoughts here have nothing to do with official policy or perspective at Leiden University.

Millennials (born 1985-2005) should pay attention to 2002 and 2007. The first year coincides with implementation of Europe's Bologna Accords harmonizing higher education standards into three-year bachelors and one- or two-year masters programs. For some European countries, this meant chopping their traditional, longer programs for first university degrees into separate bachelors and masters degrees. Future students would be encouraged to take one degree in one university and their second -- should they not take a job -- at another university. This reform promised students a greater diversity in their education as well as graduate titles more familiar to North American academics and employers.

The year 2007 is important as the first year of the Great Recession, a time of falling housing prices, market panics, and political turmoil. For Millennials, the Great Recession has been a true disaster: under-25 unemployment rose faster than already intolerable average unemployment rates. Young graduates got to choose among unpaid internships, zero-hour temporary contracts, and staying home. Many bachelors graduates faced competition from masters graduates for the same jobs. Even worse, their parents -- the ones who had earned traditional, "rigorous" 6-year degrees -- didn't respect their training or ability.

You can see how going back for a masters looked like a good choice. It is thus unfortunate that these students may have getting a worse education than the university's promised or they expected.

The Bologna process meant that bachelors programs needed to recruit two cohorts of students every 6 years to maintain their budgets. This pressure meant that over-worked staff are more likely to promise what they cannot deliver. They could let bachelors students have an easy pass, since "the masters program is where you really finish your qualification."

Masters programs, likewise, needed to accept many applicants to pay for their programs -- and they  had to recruit an entire student body every year or two. Would they make sure that masters students worked hard and earned their degrees? Not if they were trying to fill seats. It was easier to let the students pass (even award them honors!) because every -- and any -- graduate provided revenue. So they started more and more masters (over 1,000 in the Netherlands), each promising a bold, keyword-laden future.

Who is responsible for who when reciprocation is unclear?
In the past, it had made sense to invest in relationships, training and reputation because the university and student worked as partners. The addition of a third wheel added well-known friction to those dynamics.

Turning from the administration, how did students and professors respond to the reforms?

For students, the logic was easy. They needed masters degrees and they were being praised for "excellent work." Some of them wanted to make sure they got a good education that would lead to good job, but how would they know? Their inexperience works against them.

Professors might have had more perspective on these changes, but they carried their own burdens. Some had to raise more funding, others needed to do more marketing of the school (or themselves). Everyone needed more (often worse) publications. The only students worth their time where PhD students (with funding!), so teaching took the hit. Could they do more to help their students find jobs? Maybe, but perhaps that was someone else's job? Their divided priorities mean lower quality teaching.

So now we arrive at a rising threat to educational excellence, with students getting shunted through shoddy bachelors and masters programs by universities trying to fill seats, professors worried about other things, and parents hoping  their children would learn find jobs. What about employers and taxpayers? Employers are displeased by the need to sort through indebted, entitled, needs-a-bit-of-finish youngsters. Taxpayers surely worry that their earnings are directed to keyword-laden uselessness. But neither group is in charge of education policies or decisions.

How are the students doing? Some are blithely sailing through the wreckage, as the young can. Some are betrayed and poorer. The majority are probably complaining via memes to their social networks -- an ironic way to complain as social networks are pretty bad for organizing the collective action that the young would need to take to force educational bodies to deliver value rather than marketing.

Bottom Line: Students need to take time to find the right masters program because nobody else is going to help them make that choice. Then they need to suck all the learning and advice they can get out of that program that they can, as the programs are designed for mass consumption, not individual achievement. The penalty for poor choices is not just a bad education given to the wrong people by programs that do not deserve to exist at the expense of taxpayers, but a false start to a young life that needs all the help it can get.

5 Jul 2017

Links of interest

  1. OMICS (a fraudulent open access journal) now has a journal for climate change deniers whose logic includes "the ‘greenhouse theory’ cannot be correct because real greenhouses have glass roofs and the atmosphere does not."
  2. Looking for online videos to learn economics? Here. (Oh, and don't forget that economics is not a science!)
  3. My "thoughts on sustainable solutions" (PDF slides and 58 min MP3)
  4. Water managers are wasting money and/or harming the environment by taking too much water in California, where "water users appeared to more easily achieve the water use reductions requested by utilities during more recent droughts" and Orange Country (California) water managers consistently over-estimate demand [pdf]
  5. Circle, a blockchain-based FinTech company is offering zero cost, "bank rate" multi-currency transfers. I signed up but have not tried it yet.
  6. Bitcoin Energy Consumption Index, (premature) Ethereum Obituaries and WTF is Ethereum? (A good primer)
  7. "Writing advice to my students that would also have been good sex advice for my high school boyfriends"
  8. Not-the-Onion: Bic pens... for her. Read the reviews!
  9. Mumbai was built on a wetlandsthe origin of London's sewers and how Amsterdam invented bike sharing
  10. "Water Security and Climate Change: The Need for Adaptive Governance"
  11. How bureaucracy fails (UK edition)
H/T to TL

4 Jul 2017

The evolution of the Dutch drinking water sector

We just finished revisions of this paper to meet the deadline for a journal's special issue, BUT we would love to hear you thoughts or feedback on the paper, the sector in the Netherlands, or how these themes relate to systems you know better. We will surely have a chance to improve the paper (probably if it's accepted for the special issue and certainly if it isn't ;), so please do send comments.

The evolution of the Dutch drinking water sector <== link to download

David Zetland and Bene Colenbrander

Abstract: Dutch drinking water companies (DWCs) have brought more water of better quality to more people over the past 160 years, but their institutional environment has changed with social priorities. We divide these changes into four eras in which an initial solution leads to a new constraint that forces a change in priorities and thus DWC actions. The first era begins around 1850 when polluted common pool water attracts sellers of drinking water as a private good. Priorities changed around 1900 as the government pushed for a network expansion that would bring drinking water services to all as a public good. The third era began around 1950 as strains on common-pool budgets and water supplies shifted the focus to rationalization and efficiency. The fourth and current era began around 1970 with DWCs being asked to restore ecosystems and play a larger role in the community. These shifts demonstrate how the path towards clean, safe drinking water may twist and turn as new opportunities eclipse past successes and changing priorities shift the relative costs and benefits of different actions.

As a preview, check out the figure on infant mortality and death rates that drives our narrative:




1 Jul 2017

Yay Canada!

They have a day too...

Some gamers already live in the Matrix

From this very interesting article:

Even the most open-ended games tend to offer a sense of progress and direction, completion and commitment. In other words, they make people happy—or at least happier, serving as a buffer between the player and despair. Video games, you might say, offer a sort of universal basic income for the soul.

[snip]

The best of these games overwhelmed my capacity to think about anything else at a time when more thinking wasn't terribly beneficial. They provided distraction, but also direction, and a sense of focused calm. I wanted a job, but I couldn't find one. Instead, I played video games. They weren't as good as a job. But they were better than nothing.

[snip]

Did all those hours playing games make me feel fulfilled? Did they make me feel as if I had made good decisions in my life? Yes—and no. At times, I found video games an entertainment experience as smart and satisfying as any novel or movie or television show I have ever absorbed. At other times, I have let go of my controller late at night, overcome by existential emptiness and the realization that I have, yet again, just spent the better part of a day engaged in an activity of no practical value to me or anyone else. I enjoy games, but not without some reservation. Sometimes I go weeks without playing. And if I had to choose between gaming and work, I know I'd pick the latter.

29 Jun 2017

Review: Deep Web

I wanted to watch this movie to learn more about the foundation and operations of The Silk Road, the most famous "dark web" market where people used encrypted (PGP), traceless (Tor) communications to make deals, mostly exchanging bitcoin for drugs.

What I got was a rather ugly update on the drug wars, government misbehavior/corruption, and the future of marketplaces.

Drug wars: The Silk Road attracted attention for its open market for drugs and buyer ratings for vendors (just like Amazon). Users were happy to get better, cheaper gear with less risk.* Vendors could invest in building their reputation by competing to offer better service. Politicians and (some) law enforcement saw the site as a challenge to their authority. Companies selling legal highs also disliked SR because it offered cheaper (and perhaps safer) products.

Opiates (everything from Oxycontin to heroin) are now responsible for the greatest "premature" death toll of any activity in the US -- higher than deaths from guns and car accidents, combined.

Politicians and law enforcement decided to shut down the Silk Road (Big Pharma wouldn't mind), and the bulk of the film focusses on the chase, capture and trial of the "kingpin" behind SR (Ross Ulbricht, pictured) by any means, fair or foul.

Government corruption: I'll cut to the main point, which is that the government violated Ulbricht's Fourth Amendment Right against unlawful search and seizure when they "copied Silk Road servers" and seized Ulbricht's laptop without getting the correct warrants or following transparent procedures. Why does this matter? Because Ulbricht was accused of contracting for the murder of 5-6 individuals on top of money laundering, computer hacking, and conspiracy to traffic narcotics. Those attempted murder charges are what caught the attention of the press and anger of the trial judge, but the charges were dropped in the real trial. Why? Perhaps because no dead bodies were ever connected to Ulbricht?  Perhaps because law enforcement planted evidence on Ulbricht's computer? That latter action is very easy for me to believe after following the Drug War for several decades: Cops are willing to break, bend or undermine the law when it comes to getting "bad" guys or their assets.

Skeptical? Then think about this: Two government agents involved in catching Ulbricht were tried, convicted and jailed for stealing bitcoins from him in the course of the operation. I don't thins that was all they did to "give justice a hand up."

(Oh, and don't forget that poor black men suffer much more than affluent white men (like Ulbricht) from the War, so this story will be old news in communities that have been abused since the 1980s.)

The future of darknet markets: They're here to stay, for as long as people want drugs and drugs are illegal.** (Related: A very interesting post on how cryptocurrency markets work -- or fail!)

Bottom Line: Governments cannot shut down markets with willing buyers and sellers. (The best they can do is regulate them.) Ross Ulbricht was a rebel against -- and victim of -- the US Government's flat earth attitudes. I give this film FIVE STARS for bringing attention to the human side if those trying to innovate market institutions.

* Most of the danger from "drugs" comes from their illicit status, e.g., "medical marijuana laws lead to a decrease in violent crime in states that border Mexico. This is consistent with the theory that marijuana decriminalization reduces violent crime in markets traditionally controlled by Mexican drug trafficking organisations."

** I just took about 10 minutes to download Tor, find AlphaBay (a big Darknet site), create a profile (I already had GPG -- a version of PGP -- installed), and find this advert (out of 300k+):


FYI, this $104 purchase supplies the equivalent of 10,000 10mcg doses (I'm not quite sure, actually) or enough to kill about 50 people (100mg of heroin would not kill one). This drug is so cheap that it's being distributed everywhere to make "fake" heroin, but it is so strong that people are dying daily. The darknet is delivering what people want, but the lack of legal regulation (and safety) is resulting in violence (fights among street dealers) and death. Legalize it!
Addendum (1 Aug): Police have shut down alphabay and another darknet website. This observer notes that those actions will do nothing to stop demand and are likely to lead people to take more chances to get drugs from street dealers or less reputable sites. Fail.

28 Jun 2017

Links of interest

  1. "Dirty Soap Co. is an awareness project centered around marine pollution"
  2. Made from sewage, these “popsicles” reveal the scale of Taiwan’s water pollution
  3. Is Vegas's quest for other people's groundwater inevitable? Maybe, if you look at the return to Big Infrastructure in the US West
  4. A massive survey of households (mostly in developing countries) finds that adult women are still more likely to fetch water than adult men (children don't go so often), taking an average of 28 minutes/day. (I spend 0 minutes, since I have safe tap water.)
  5. Training rural Indian women to test their water quality (via Akvo support)
  6. The AMA lobbied to make America's health system ineffective and expensive
  7. Stephen Fry sees the future of the internet in the past of printing (it's on us)
  8. What's warming the world? After removing other factors, it's us, bigly.
  9. "Climate Change and Increasing Aridity: The Fate of Agriculture and Rural Communities in the Middle East and North Africa" [pdf]
  10. "We need a fundamental shift in the approach for modernizing the Columbia River Treaty, from a review of the original commercial contract for flood control and power generation to an ecosystem based management approach for the entire Columbia Basin" Read more of this communique [pdf] from this conference
H/T to PR

27 Jun 2017

Review: 2052: A Global Forecast for the Next 40 Years

Jorgen Randers -- one of the original authors on The Limits to Growth (my review of LTG) -- wrote this 2012 book to think about the future using similar techniques from the 1972 project. (Contrary to the claims of critics, LTG was pretty accurate in its predictions.)

I read this book to learn more of how we might (not) adapt to life in a climate-changed world (the theme of my life plus 2 meters project).

I am going to group my comments on this book into several categories rather than focus on details, as I made far too many notes. The book is organized into Why & How 40 Years?, Five Big Issues (capitalism, economic growth, democracy, intergenerational relations and climate), a Global Forecast (population & consumption, energy & co2, food & footprint, non-material "goods" and zeitgeist 2052), and ending with sections on Analysis, Straight Questions, Five Regions, Other Futures, and What to Do.

First, consider that Randers makes a forecast rather than a prediction by relying on trends and possibilities rather than probabilities. To oversimplify, Randers focusses on several macro trends in five main regions in the 2012-2052 period. These trends -- based on demographics, economics, engineering and politics -- are used to explain forecast where we humans might find ourselves in 2052.

One important interactions is among trends for population, consumption and impact, with the main idea that the footprint will be heavier -- and thus the chance of "run away climate change" (RACC) larger -- if there are more people consuming more stuff. I think that Randers is too optimistic in his forecasts here. He predicts that the world population will peak at 8.1 billion, that 2-3 billion people will stay poor (=low consumption), and that people in the rich world will consume less because they need to invest significant resources in responding to climate change (e.g., recovering from disasters, coping with climate migrants, paying more as supply chains are disrupted and so on.)

This path -- in the presence of little or no climate change mitigation -- will leave the world on a knife's edge after 2052, with 2080's global temperatures of 2.8C above pre-industrial levels and a 50/50 chance of triggering RACC in which melting permafrost, wildfires and other natural responses trigger positive feedback loops that accelerate warming and far worse living conditions. [A negative trend I discussed over 9 years ago.]

Randers does not consider this forecast as good news (he says "global society will have to perform a miracle after 2052 if it is to end the century in a desirable situation" given that the transition to sustainability will only be half-complete by 2052), and he's admirably frank about our political mechanisms being too weak and short-termist to coordinate either mitigation or adaption, but I think that his underlying assumptions on population and consumption are far too optimistic. The UN recently forecast that "the current world population of 7.6 billion is expected to reach 8.6 billion in 2030, 9.8 billion in 2050 and 11.2 billion in 2100." Turning to consumption, it is hard to see much sign of any government putting the brakes on the cult of GDP growth (e.g., Indonesia converting rainforest to palm oil, China promoting cars and suburbs, or economic refugees fleeing their dysfunctional homelands to go earn some money). Taken together, these "alt-guesses" would put the world in far worse shape in terms of RACC, temperature increases, and so on.

(You can download Randers's massive spreadsheet and change details to suit your own preferences, but I am focussing on aggregates. Am I "cheating" rather than "scientific" to say this? Not if a spreadsheet is merely an opinion dressed up as a model.)

Second, I want to congratulate Randers for his interesting use of "outside experts" who gave 20+ forecasts on various dimensions of the future (a few are a waste of time). Their contributions and Randers's own commentary really created a useful space for thinking about how systems interact (e.g., "more investment" means "less consumption") in our complex world.

There are many interesting, surprising and thoughtful statements in the book:
  • Nations will face climate change only after they give up on a global quota for carbon, tax fossil fuels and force adoption of renewables, energy efficiency, and carbon capture [the story there is grim]. They will only do this when climate damages are a clear and present danger (i.e. probably too late). Global investments will rise from a need to shut down fossil industries early [here's a nice perspective on its collapse in the near future] and cope with climate damages, but productivity will fall due to climate damages, loss of natural capital, more workers in services, etc.
  • There's not much support for "saving ecosystems" among voters who prefer Netflix... and will increasingly experience the world via screen. The impacts will be worse in nations without redistribution or social insurance (poor countries; the US), and especially if "democracy" leads to short-term consumption over long term sustainability. 
  • The worst shocks will not be to the poor (who already suffer), but to the Americans who will face the twin-disasters of losing first place to China as well as greater conflict over national and financial resources due to its weak social welfare system.
  • The Chinese government will use its strength to force its people to sustainability.
  • National militaries will be much more occupied with climate-related risks and assaults. The "third flowering of humanity" will arrive via computers that may work for us (or not).
  • Temperature zones (microclimates) will move away from the equator at a pace of 5km per year and up mountains at a pace of 5m per year
  • Do not acquire a taste for things that will disappear (or give that taste to your children), as you will only be disappointed when your "favorites" are no more. Stick with digital hobbies, etc.
  • Live in a place that's not exposed to CC but where political structures function (NL is -1 and +1 on these!)
Third, Randers covers many topics but he is sometimes trapped by "current thinking" on technology or politics, e.g., discussing the impact of greater biofuel production on food prices (not good for the poor) when cheaper oil (via fracking as well as the shift to renewables) is crowding out biofuels.

Finally, I now think different on several big topics. For example:
  • Japan's consumption per person rose by 33 percent between 1990 and 2010 because GDP was "flat" while population and investment was falling. (One reason robots are so popular in Japan!)
  • Countries that import food may lack "food security" when times get tough and they cannot afford to buy food on world markets. (The same might be said of energy, manufactured goods, etc.) Thus a country like Pakistan may turn into a failed state with hungry people because it has mismanaged its natural resources ("liquidating natural capital") at an even worse pace than the rest of the world, thereby increasing its relative insecurity. We can see this problem today in Yemen but not in places like Japan or New Zealand that have protected their natural capital.
  • Younger generations will not respect older generations -- they will take part of their pensions to pay for damages. (A strategy that may not work if bitcoin, tax havens and corruption undermine government action.)
Bottom Line: I give this book FIVE STARS for helping me think about our (potential) common future, which Randers summarizes as follows [snipped from several places]:
It is surprisingly difficult to maintain a happy outlook when you know deep in your heart that the world is on a path toward disaster (reducing age-old biological diversity and man-made cultural diversity in the process).

The world of 2052 will be well established on a path that I really fear—the path toward self-reinforcing climate change and climate disaster in the second part of the century. I certainly did not find a world on a well-planned path toward sustainability. I don’t know how to assess this future. It will be much better than a global cataclysm where population and production drop dramatically as a consequence of natural disaster and war. But it will be much worse than the now common expectation of continuing growth in GDP and disposable income. It will be good for me as an old Norwegian living in the New North, which will fare well over the next couple of decades. But it will be surprisingly bad for all my good friends in the United States, who will have to endure gradual and seemingly never-ending stagnation from the peak years of their empire in the twentieth century. And much worse for the two billion earthlings who will remain poor.

Even if your personal life is sound and satisfying, it is wearying to know that so much is being done systematically to destroy our common future. Thus my final word of encouragement: Don’t let the possibility of impending disaster crush your spirits. Don’t let the prospect of a suboptimal long-term future kill your hope. Hope for the unlikely! Work for the unlikely! Remember, too, that even if we do not succeed in our fight for a better world, there will still be a future world. And there will still be a world with a future—just less beautiful and less harmonious than it could have been.