A Networked World

The linearity problem

Yet another great link from Johnnie that triggers something. No straight lines

I enjoyed Alan Moore's slideshare from Reboot Britain, No Straight Lines. It's worth taking a good look.

Al kicks off with a very funny story about a train journey and an iPod that I won't spoil by summarising. And goes into a passionate diatribe against the limits of linear thinking.

Its not just the lack of linearity that we need to accept, its the lack of sequence. Also not wanting to screw up the joke.

But we almost never learn anything in a stepwise, linear fashion. We grab bits of it passing by, and fiddle with our understanding of them, and sometimes for a long time we "just don't get it" because even when we have all the bits they are like a jigsaw puzzle in a bag, the picture is there but we can't 'see" it.

And some people never do. Especially, paradoxically, those who are best at stuff like computer programming where sequence and excruciating detail is critical. Then one day, apparently without any relevant input, we "get" it.

And I suspect that is where, god help me, real innovation occurs. Someone has most of the bits, but can't make them fit so they create a bit, a new bit that didn't exist before but which connects the thing in an entirely different way

And because the world is NOT a jigsaw puzzle, what happens is that the new bit makes all the old bits fit together in different ways as well. Which is why change can be so disorienting.

We recognise that many of the old bits are there but they are somehow distorted in ways we don't understand. So the response of those who were comfortable with the old ways things worked try to pretend that the old bits still work in the old ways, that its just their perception that is wonky; because to accept that the whole world is wonky is just too much of a challenge.

We are, in effect, betrayed by the proximity to familiarity that wouldn't happen if we, say, suddenly moved to Tanzania and had to learn Swahili to survive. When we shift our entire domain we recognise its foreignness, but when that shift happens around us it takes time to adjust to that suspiciously familiar but actually completely different reality.

That seems to me the problem with peak Oil, with Climate change, with the end of western financial capitalism, it all still LOOKS the same, or closely enough to fool us into believing that we don't have to change anything to deal with the problem.

Wrong.

And one more point about non-linearity, it entails outputs that are grossly inconsistent with the inputs and apparently disconnected from them.

More sunshine and fresh air

The people I have been reading for nearly the last decade have been sayin g exactly this. Economist's warning: Oil supplies are running out fast

Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.

In an interview with The Independent, Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years - at least a decade earlier than most governments had estimated.

But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago.

On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said.

In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil - mostly in the Middle East - would increase rapidly as the oil crisis begins to grip after 2010.

"One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said.

"The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

The only question I have is why, when they have had the best possible information that anyone could have, it had taken so long to acknowledge this.

Stall the recovery? The very least of our problems. By far.

Roubini's yellow weeds of stagnation

Nouriel Roubini has been too right, for too long, for this not to be a clear warning. He taps 9 points to think about in Roubini Sees Yellow Weeds, Not Green Shoots but this one does it for me

Second, this is a crisis of solvency, not just liquidity, but true deleveraging has not really started, because private losses and debts of households, financial institutions, and even corporations are not being reduced, but rather socialized and put on government balance sheets. Lack of deleveraging will limit the ability of banks to lend, households to spend, and firms to invest.

We have a public reserve at the end of the street which is a reserve because it is essentially a watercourse and in winter it gets sodden for weeks on end. Like now.

The grass is starting to turn yellow because there is just too much water and it is drowning. To me its the perfect symbol for what is happening in the global economy, as governments try desperately to pump some life into it with massive injections of adrenaline.

But it doesn't make any difference when the size of the global economy is only X, giving it enough food for 2X is not only meaningless, it could be drowning it.

And if, as Roubini says, the deleveraging has not, in fact, begun but the leverage has just been moved to the whole economy, we have not moved an inch beyond the original problem. There is a huge amount of theoretical value that has to be extinguished and until it is we will have no valid way to set real prices in the economy. Until we can set reral prices we have no way of knowing whether we can pay them.

We haven't started the work yet. Meanwhile, get a look at the latest from Dmitry Orlov

Peak Planes are on the horizon

Its pretty well axiomatic that the peak of anything, oil, fish, copper or aircraft, will come at the moment when its development has reached a level never experienced before.

While Airbus was building the A380 I had a little bet with myself that it would fly but it wouldn't go into servivce as Peak Oil killed off mass international travel and the peak Plane built to service it.

Well, I lost that one, but not, apparently, by much. Qantas moves raises questions over Airbus A380's future in economic downturn.

THE Airbus A380 was meant to be the future of air travel in Australia: vast, fast, and - thanks to a perfect mix of capacity and efficiency - recession proof. But Qantas's decision yesterday to defer buying four of the $350 million superjumbos has raised questions about whether the planes it once described as an aviation revolution would survive the economic downturn.

Having crowed last year about being among the first airlines to buy the A380s, Qantas has now become the latest in a long line of carriers - others include Air France, Lufthansa and Emirates - to defer, cancel or reduce the role of the aircraft.

Emirates put it on the north Atlantic and last month hauled it off again for lack of traffic. If it can't work there, it can't work anywhere.

They fly two of them into Auckland about 4 times a week, half an hour apart. They are great to watch, but I'm not betting on them being up there much longer.

Aicraft are the modern equivalent of the pyramids, they have never made a cent on balance since the C47's of the postwar era were bought at cents on the dollar to start this mass travel game. They exist to show the world a nation's technological prowess, just like the pyramids.

The only difference is that in the old days you had to round up the tourists/slaves and bring them to Egypt to stand in awe at the great monuments, then get down to building an even bigger one, these days we just fly the monument to your place.

And at the end of the empire the monuments are the biggest of all, then they vanish. Comming soon to an airport near you.

A while ago the Peak Shrink ran this piece on how Sweating the Small Stuff grinds us down.

It’s the small stuff. I know, I should be focused on losing my transportation in a place with no bus service, or whether I’ll have the mortgage next month, but that’s not what truly bugs me, and causes me a melt-down.

I know the feeling; I'm pretty much into the whole Peak Oil, economic meltdown, climate change, pandemic arena by now, I have plans and backups and strategies and I'm pretty sure that when one or another of them, maybe more than one, is declared, I wont do the stunned mullet thing with the "this can't be happening" overtones.

But dealing with the huge things, while challenging, is still a conceptual thing, even when it is actually happening. Over the last few days I've been watching an accumulation of direct and indirect small stuff and been appreciating how hard it can be to deal with.

Last night one of my dogs started having breathing problems. 11PM and 15 KM to the emergency vet who shot her full of steroids and antibiotics and I drove home with a much happier dog.

But in a constrained world I might not have the fuel to spend on a 30KM midnight dash, I might not be able to afford the $188 fee, I might not have a car at all. It was stressful enough dealing with her distress, but not being able to do anything about it till the next day, or longer? Try that for size.

My other dog has progressive loss of function in his left side (possibly a tumour pressing on his spinal chord) we are already facing the fact that he may not last much longer than his nearly 13 years, but the small stuff of actually dealing with it is the real kicker.

The other day one branch of the family had a separation after 21 years, a diagnosis of treatable bowel cancer and a fall from a ladder, all 3 people over 60, all in one day. All small enough stuff for those except the ones directly involved, but additive.

My SIL lost his job with Fujitsu a while back and with employment scarce he is planning to do a teaching diploma, meanwhile my daughter's company is pretty tight right now and can't pay her what they agree she is worth.

A colleague of my wife's, on whom she depends for critical parts of her work tried to auction her house last weekend, no bids and interest only $300K below their needed price, oh, and her daughter was made redundant yesterday. Nothing directly to do with us, but I'll bet it affects her work performance.

Small stuff, dealing with it well will be the key to whether we get through this thing or go postal.

So much for small is beautiful

A couple of years ago Australia's Howard government had Treasurer Peter Costello out there "warning" that if demographic trends continued, Australia's population would halve by natural attrition by 2050 and the people should make a point of having three kids, "one for mum, one for dad and one for the country".

Apart from sounding creepily like other totalitarian governments of the past, and ignoring the reality that mum and dad had to work every hour available just to put a roof over their heads with no suggestion that "the country" would be practically supportive (state supported child care being yet another anathema to these right wingers) the reality of Australia already being grossly overpopulated never hit the agenda.

Now the Japanese are doing the same. Tired workers urged to go home and multiply.

JAPAN'S workers are being urged to switch off their laptops, go home early and use what little energy they have left on procreation, in an attempt to avert demographic disaster.

The drive to persuade employers that their staff would be better off at home than staying late at the office comes as health experts warn many couples are simply too tired to have sex. A survey of married couples under 50 found that more than a third had not had sex in the previous month. A study by Durex found the average couple has sex 45 times a year, less than half the global average of 103 times.

Japan's birth rate of 1.34 is among the lowest in the world and falls well short of the 2.07 children needed to keep the population stable.

If it persists, demographers say, the population will drop from its peak of 127.7 million in 2006 to 95 million by 2050.

If we are to have a sustainable tenancy on this planet, we are all going to have to face the facts that we cannot sustain our current consumption of finite resources and destruction of renewable ones. It makes perfect sense for island nations, especially those with high consumption patterns, to lead the way in reducing population and building the economic models that enable us to deal with those falling populations.

It wont be easy, especially for those indoctrinated into the yeast culture of breed or die. But unless we find new ways to deal with our impact on the planet, we are pretty close to the planet starting to impact on us.

Australia, NZ, Japan, all have the golden opportunity, what's the bet we throw it away in the isnane chase to have the most toys at the end?

Doing our bit

I'm not sure what happened here with our electricity consumption. We have been actively trying to cut back since about March when it became obvious that there was a power problem looming in winter. But the last couple of bills didn't seem to show any great effect.

Then today I had the bill for the last 32 days from 20 June to 21 July and after looking like we were stuck to about 16 KwH a day this is MUCH better.

A world inside out

Its interesting to watch old models coming to the end of their useful lives: County to pool resources to purchase fuel, save towns money.

A year ago, we all thought $2.70 for a gallon of gasoline was expensive. Now, that seems cheap.

Plymouth County wants to help.

With the resources of 26 towns and one city, the county packs a lot of purchasing power. Monday, the County Commissioners announced a bid process to bulk purchase gasoline and diesel fuel for the communities they serve.

The county can pool the resources of the towns, and itself, to get lower fuel rates than any one municipality or agency could on its own.

“With gas and diesel prices crunching municipal budgets, offering a bid that can reduce costs for our communities is something the county can do to help,” Commission Chairman Jeffrey Welch, of Abington, said.

[...] With a town that covers 104 square miles, Plymouth faces it’s own energy crisis. The price of diesel fuel has increased two dollars a gallon since the budget for fiscal 2008 was accepted by Town Meeting in the spring of 2007.

Plymouth consolidated its fuel purchases 18 months ago, and has saved money, though the actual figures weren’t readily available.

This uses a now-failing idea that those who want to buy in bulk make for lower supply costs so the savings can be split between supplier and customer. In a supply-constrained world however, those who want to buy more will become the problem clients, to get the discounts you will need to be able to sell back parts of your contract to your supplier.

Those with long-term supply contracts will offer to reduce their buy and to share in the benefits by their supplier being able to resell the difference at the current market value and splitting the extra profit.

The conservation message has always been "Reduce, re-use, recycle" in that order. The mantra has moved from ethical nicety to something even an accountant could love.

At last, the hard, clear word

My introduction to Peak Oil was a comment from someone on a blog that we are in a race between PO and Climate Change and we really only have a chance if Peak oil gets there fast enough, because we sure as hell wont make the necessary changes voluntarily.

lets face it, w\e haven't even started talking about PO in the main stream yet and every report on Climate Change comes froofed up with hedges and qualifications that undermine anything else that is said. But maybe this is a start: Climate crisis 'diabolical'..

Professor Ross Garnaut 600-page draft report on climate change, of which the make-up of an emissions trading scheme (ETS) is a major focus, was released today. (Actually July 4 but I'm really slow)

Speaking at the report's launch in Canberra, Professor Garnaut said climate change was a "diabolical'' policy problem.

"While an effective response to the challenge would play out over the many decades, it must take shape and be in place over the next few years,'' he said.

"Without early and strong action, some time before 2020 we will realise we have indelibly surrendered to forces that have moved beyond our control.''

Professor Garnaut said climate change was the hardest policy problem in living memory.

"Climate change presents a new kind of challenge,'' he said.

"It is uncertain in its form and extent, rather than drawn in clear lines.

"It is insidious, rather than directly confrontational.

"It is long term, rather than immediate in both its impacts and its remedies.''

In other words, its a test of our intelligence and understanding. Damn.

Remedies will require global co-operation of unprecedented complexity and dimension, he said.

AND a test of our ability to share, collaborate and agree; double damn. But at least its a start.

Dead canaries all round

Only months ago Ryanair CEO Michael O'Leary was bragging about how his company would be the only cheapo airline in business in a couple of years. Or maybe not: Ryanair axes thousands of flights from Stansted due to soaring fuel costs and airport fees.

Budget airline Ryanair is to axe one in seven of its flights from a major UK holiday airport following a row over cash with controversial 'monopoly' airport operator BAA.

The no-frills carrier announced today that it would making a 14 per cent reduction in the number of weekly flights from 'too expensive' Stansted in Essex for winter 2008-09.

Ryanair  will cut the number of planes based at Stansted from 36 to 28 and said it was also closing operations at seven of its European bases from November 4 to December 19  - at  Basel, Budapest, Palma in Majorca, Krakow and Rzeszow in Poland, Salzburg and Valencia.

It comes amid fears that the deepening  economic gloom will force cash-strapped families to abandon plans for a now almost traditional 'winter sun' break.

Axing the flights will lead to 900 job losses at Stansted, including 150 of its own staff, said Ryanair.

NZ property investor Bob Jones once talked about why he resisted lowering rents for companies when times were tough, his point was that if the difference in rent was what it took to keep a company afloat, its business was dead.

The reality is that Ryanair may have hedged for the current situation, but its customers were people for whom the £10, or £30 airfare was all they could afford and when rising housing, food and fuel costs have eaten even 10% of that airfare, Ryanair loses 100% of the business.

And its not just the very bottom of the heap that is having hassles, I had this yesterday from my cousin Pete in the UK who is well in the middle class.

... desperately trying to arrange a holiday but the prices are just horrendous and despite the fact that a lot of the holidays are unbooked and the hotels half empty no-one seems to be accepting reality and dropping their prices.

The problem is that the costs are going nuts for the all the people in the travel chain and they caught between the rock of unsustainable costs and the hard place of falling business. The days of mass air travel are over, and with them the tourism business, time to get a new focus in life.

And its not just the cheapo airlines of course, QANTAS is lining up for a long range fight just to stay in business.

Qantas is set to axe up to 2,000 jobs worldwide as the record price of oil hits world airlines hard.

I saw Alistair Darling, the UK Chancellor of the Exchequer yesterday acknowledging that costs are rising but asking that it not lead to higher wage claims, translation; "please get ready to accept a lower material standard of living".

Anyone paying attention has already started planning for that, but what is demoralising is that our leadership is still not biting the bullet, none of them are saying, "we are all in for tough times, the future is going to be very different from the past and here is how we are going to deal with that and make sure that the weakest don't carry all the cost".

Partly it would be a lie, partly it would undermine the source of their donations before the donors get out of the market and leave it all to the suckers, so we get this gazing over our shoulders stuff.

Unless we have access to the blogs, then we are making plans and taking local action.