Our sci- fi fantasies have always been one step ahead of the plodding reality that the same fantasies have stuck us with. Instead of flying carz we get heat waves and oil well blowouts. Maybe those ancient Greeks … the ones with spears running around the outside of the pots … were on to something …

Pandora, Icarus, Prometheus, Cassandra, didn’t they all warn humanoids about overreach?

The story of resource waste comes now to an X-Box console near you.

“By the 25th century, Earth’s resources were ravaged, consumed … exhausted. Desperate and on the verge of extinction, we cast out into the void of space and discovered rich new worlds waiting to be cracked open … and stripped bare. All Earth became devoted to this effort …”

Sounds depressingly familiar, doesn’t it? It’s all downhill from there, as the high- technology deep- space ravaging process uncorks endless hordes of zombies that have to be blasted. The blasting action takes place in somewhat overwrought basement spaces that look remarkably like the insides of fab New York City nightclubs, office building lobbies, boiler rooms and the subway. All this is built on what’s left of the moon Titan orbiting Saturn aptly named ‘Sprawl’. Topical, no?

When you are finished with the grisly work of hi- tech blasting, you ravage some more … then blast some more, ravage and blast, again and again! It’s kind of like commuting. There is no return on it.

Both trivializing and insightful the designers deploy a subversive message: The farther tech ‘advances’ the more linearly destructive and nightmarish tech becomes. Put into terms even economists can understand, the future indicated by technological advance is not robot kitchens but ravaged resources with a few crazy stragglers in haunted, ruined space cities blowing apart sub- human monsters.

You get 200 points for stomping the skull of a zombie!

Articles suggesting tech solutions to the energy constraints are endlessly commonplace. Right now, tech is both our friend and our hopeful salvation. What if? Thomas Robinson @ Guy McPherson’s web page takes the time to seriously examine the tech so- called solutions and reveals not only another peak but something more interesting, that our invention cupboard is bare:

The slowing in innovation is not merely a hypothesis, intuition, or vague impression. Jonathan Huebner has made a case for the concept of peak innovation using quantitative measures. His paper examines the number of technological innovations in relation to population size since the 1450s and reaches the flabbergasting result that innovation peaked in 1873 and that within a few years, the rate of contemporary innovation will drop to levels not seen since the Middle Ages. There may be inaccuracies in using patents as proxies for innovation, but the results are so marked that they at least suggest an overall trend. In the abstract, Huebner is therefore able to draw an astounding statistical conclusion: “We are at an estimated 85% of the economic limit of technology, and it is projected that we will reach 90% in 2018 and 95% in 2038.”

Not unlike with oil, it would seem that the low-hanging fruits of research have been taken. The remaining breakthroughs in science will take longer to attain and involve more extensive funding and regard ever more esoteric subjects. This can be seen, for example, in the age of Nobel Prize winners. They have been getting older and older over the last many decades, suggesting that scientific results take longer to reach. For instance, the winners of the 2010 Nobel Prize in economics were 62, 70, and 71 years old, while conventional wisdom would have it that 50 years of age was an upper limit.

Middle ages don’t look so bad, eh? Thomas clearly has been reading Economic Undertow blog and grasping the blood-sucking, skull-stomping quality of our Kulture.

Ever more efforts are spent on creating virtual innovation: new fantasies, new computer games, new special effects in movies, “reality” shows, political spin. These create the illusion of movement, while the technology supporting the real, physical basis for life has not changed, merely been ignored.

Take that, Dead Space Two, you are a distraction!

What Robinson doen’t mention is diminishing returns from the use of the tech we already have. The Zombies have unleashed on the human race hamburgers and automobiles! Heaven save us from the junk that hasn’t been invented yet! New machines are required to free us from the consequences of the current machines. Good grief! Most of our inventions make things worse. It’s not just Robinson’s Google search that gives us quadrillions of results in diminishing nano- seconds of time. Tech is simply a highly- polished cost- shifter. Right now the returns on the cost- shifting tactic are diminishing. We only learned last week that all the costs of the past twenty years or so have been shifted to a bunch of Egyptians … and boy are they pissed! Not only are the ‘easy inventions’ done, the cost- consequences of these produce structural impediments to further tech progress.

This is certainly true in the energy field where the costs are calculated Net Present Value there are very few places remaining for them to hide. How much of the cost to drill for oil at the bottom of the Arctic Ocean represents oil that has already been wasted?

‘Efficiency’ gains are another form of shifting of human skill and ability toward machines. This looks good on company bottom lines but is counterproductive when the machines’ inability to purchase the goods they just made is factored into the equation.

I’ll sit here and just wait for a machine to innovate …

… still waiting!

Meanwhile, estimable Herman Daly makes an indirect observation regarding Thomas’ declining invention thesis: to whom do these innovations belong? Daly has taken residence @ the new-ish Center for the Advancement of the Steady- State Economy webpage: it’s probably his idea:

Managing the commonwealth of nature and knowledge presents us two rather opposite problems and solutions. I’ve argued that the commonwealth of nature should be enclosed as property, as much as possible as public property, and administered so as to capture scarcity rents for public revenue. Examples of natural commons include: mining, logging, grazing rights, the electromagnetic spectrum, the absorptive capacity of the atmosphere, and the orbital locations of satellites. The commonwealth of knowledge, on the other hand, should be freed from enclosure as property and treated as the non-rival good that it is. Abolishing all intellectual property rights tomorrow is draconian, but I do think we could grant patent monopolies for fewer “inventions” and for shorter time periods.

Monopolies, bad. Repricing inputs, good! Daly has been working on a steady- state economic form for a long time, perhaps this is the Holy Grail of economic theory. Steady state is not a ‘Brand X’ growth economy stuck in a recession. It is designed to natively husband throughput outside the mechanism which drives growth. It’s actually really hard economics! Here is the contradiction that undermines Steady State and Daly trips over it:

As economic growth increases the scale of the economy relative to that of the biosphere, it becomes recognized that these goods are in fact physically rival (that is, because one is using it other cannot, steve). The first step is to put a cap – a maximum – on the scale of use of that resource, at a level which is deemed to be environmentally sustainable. Setting that cap – deciding what it should be – is not a market decision, but a social and ecological decision.

OUCH! No wonder the steady state never gets off the ground. The growth that drives the scale factor is cultural first, economic second. The economic ‘rump’ reflects specialization and lifetime- costs which requires an expansion of demand. The demand part is manageable but the growth part exists beyond the reach of economics. This is because growth is a piece of the ‘progress narrative’ which the Zombies have borrowed eagerly from comic books and video games.

At the same time, deciding the level of resource utilization HAS to be a market decision otherwise the social decision- making thing-y won’t work! The Zombies cheat: besides growing three heads and retractable fangs, they buy Congressmen and write their own rules about everything. Only if the decision making is made integral to economic processes … will a proper repricing take place.

This recognizes that economics is the collection of strategies needed to manage the costs of surpluses (wealth) and not some scarcity allocation bullshit.

An argument can be made the necessary repricing is already taking place right under the noses of establishment economists.

Here is room for innovation: how about an economic structure that installs incentives to conserve equal to those received for wasting? Part of this orbits around the culture value system’s Hierarchy of Goods. Houses are more valuable than gasoline. Why?

Gas costs less than 7-Eleven coffee. Why, again? I wrote about this last October in, “Culture Change, Broken Chains”:

The marketing and economic mechanisms that support fuel consumption are finance inventions not acts of God. The petroleum pricing structure that makes fuel an ‘economic loss- leader’ was contrived by John D. Rockefeller in the 19th century as a means to monopoly. He undersold his competition and by doing so supported the nascent automobile industry with very cheap fuels. There is certainly no reason why a successful economy cannot be devised that requires very expensive fuels, after all our current economy thrives on very expensive diamonds, very expensive gold and very expensive Picassos.

Steve Waldman, who is one of the sharpest economic theorists had a piece that skirted around steady- state concept early last year:

Let’s return to the simple, constant-technology model, and see what happens to money. In the graph below, the solid line represents the aggregate perceived wealth of agents in the economy. The dashed line represents real income, GDP, the goods and services that the economy is actually producing. The gap between the solid and dashed line is the stock of money, backed by nothing but nevertheless part of the perceived wealth of agents in the economy.

 

Note that the money stock grows earlier in less equal economies. This is the “leakage” that slows their growth. But for all economies, money growth is unbounded, while (technology-adjusted) GDP approaches a steady state. That is, for all economies, eventually the stock of money gets to be much, much larger than the capacity of the economy to produce goods and services. Is it rational, then, for agents to keep adding to their money stock? Can this be a stable arrangement?

The surprising answer is yes, as long as there is no other risk-free asset in the economy. By assumption, agents who choose not to hold money bear idiosyncratic risk: the value of their holdings, while expected to increase, fluctuates in a manner that they dislike. As long as all agents treat money — backed by nothing at all — as a risk-free asset, and there are many agents whose risks are uncorrelated, each agent knows with almost-certainty that whenever their real projects fail, others will have succeeded more than enough so that the flow of goods and services to the monetary authority will be more more than sufficient to accommodate their idiosyncratic withdrawals. As long as the net flow into money is positive at all times, the aggregate stock money is irrelevant. Each agent values her own stock of money, and wants more, because the greater her stock, the greater her entitlement to make withdrawals should she encounter a string of bad events. The growing illusion of wealth produces real benefits, by leaving agents less insecure than they otherwise would have been. The economy is effectively a Ponzi scheme that, under our assumptions, never fails. More formally, it is a Nash equilibrium: each agent’s best strategy, under the assumption that other agents treat money as a stable risk-free asset, is to treat money as a stable risk-free asset. This is true even when all agents are fully aware of the Ponzi-ish nature of the arrangement.

Interesting, no? Waldman gropes in the direction of a static, zero- tech goods economy alongside a finance part that cons its participant into believing they are rich. It’s a start …