Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts

Wednesday, December 30, 2009

What’s really happening

A story about stories

There is a fundamental paradox that we are all vaguely aware of, even if we haven’t quite articulated it to ourselves.  Unlike the paradoxes of physics and philosophy, which we may never personally encounter, this paradox resides right under our noses.  More specifically, it resides right at the tip of our tongue.  It also buzzes incessantly right between our ears, being the fabric out of which even our internal monologue is woven.    It is the paradox of storytelling—the holy trinity of the story, its teller, and its audience. 


When I say storytelling you probably think of the sorts of storytelling done by professionals such as Twain or Poe, or the kind that is performed to a group sitting around a campfire or a dinner table.  And I do mean those; but I don’t mean only those.  I mean storytelling as grand as telling the story of our cosmic origins, or as minute as silently but persistently telling ourselves what it is we are thinking about at the moment…and everything in between.

We are all storytellers.

Historians compose stories about civilization, the ideologies and innovations that compete and collaborate to form periods of stability, progress, and revolution.

The press and its journalists compose stories that amount to the history of “now”—events at the intersection of people, their roles, and the motivations that drive them to act according to their roles.

Biologists tell same sorts of stories as historians and journalists; the differences amount to ones of scope, with roles played by very different sorts of characters, the innovations of a much less teleological nature, and the motivations largely being those of survival.  But really these are not such dramatic differences after all.

Physicists tell causal stories about particles and their interactions.

Your mind tells stories about you, what you’re doing, what you have done, and what you plan to do.

How many stories are there?

We like to think of history as a continuous stream of goings-on.  So much so that we each tend to decide on one story and stick with it, quickly forgetting, ignoring or even deleting versions that don’t jive with it.  We all know it’s the winners that write the history books; this is true of the shared history written down in books as well as our personal histories written down in our stream of consciousness.  But if you’re really observant, you can sometimes spot multiple drafts of the same story before one get chosen and the other swept under the carpet. 

Case in point: the recent protests in Iran (video).  There are two major versions of the same events.  I’d like you to suspend judgment, if just for a moment, which version you believe.  (btw I’m going off this NY Times article)

Version #1: The Iranian government says that western countries helped orchestrated the protests, and that shots from the crowd struck and killed several people, including Ali Mousavi, the nephew of the opposition leader.

Version #2: The people in the street says that the protests were peaceful, but that revolutionary guard soldiers violated the rules of the holy day by shooting into the crowd, possibly even assassinating the nephew of the opposition leader.

These two versions of the story seem completely incompatible.  How can one person ever believe both at the same time?  How can it be decided which version is a “factual” account of the events?  Most likely what will happen is that one group of people will believe one version, and another will believe the other.  Whichever story gets believed by more people in the end will survive and become the “official” account, the other will pretty much die away.

What’s the real story, and who gets to tell it?

And now for the paradox. 

We all know that there are many sides to a story.  And so it makes sense to say that there is no one real story of what really happened.  There are only versions of stories, which are unavoidably colored by who is telling them and who they are being told to. 

But on the other hand, to say that there is no privileged version of what really happened—there is no plain and simple truth, no bare fact of the matter—seems totally crazy. 

I think this paradox, just like any paradox worth its mettle, is inherently unresolvable.  But that does not make it a dead end.  Keeping this paradox in mind helps us remember that we may always be wrong about even the things we’re most certain of.  I think this is a crucial step—perhaps THE crucial step—towards the peaceful resolution of conflict.

Tuesday, December 30, 2008

Defibrillating Capitalism

Remember the wooly mammoth? It was a large, hairy ancestor of the elephant that thrived during the ice ages. Overhunting and rising global temperatures led to its extinction, but recently scientists have decoded 80% of the creature's genetic code, raising the possibility that we will one day in the not-so-distant-future see one in real life. Will it once again range the Earth freely? No, more likely it will be sustained in a lab or a zoo. Perhaps McDonald's will come out with the McWooly.

Remember the Chrysler auto company? It was a large, hairy ancestor of the Hummer that thrived during the oil era. Gas guzzling and rising global temperatures led to its extinction, but recently the Executive branch of the government stepped in to resurrect it with a $17.4 billion dollar get out of bankrupcy free card. Coincidence? I think not.

Do the recent collapses in the auto and securities industries represent the dying coughs of capitalism? No. Contrary to common belief those industries were not capitalistic, and haven't been for a long time. In that sense, capitalism has been writhing around on the ground for a while. Although they may have been necessary in the short term, the bailouts amount to kicking capitalism while its down.


What should we do? Can capitalism be saved? I say it can, and I have an idea of how to do it...

First, it is important to realize that capitalism works in much the same way as evolution: there is a diverse field of competition for limited resources, and the fittest survive to fight another day. The auto companies, like a lot of old industries, have become big, clunky dinosaurs in the modern era. There is no longer a diverse field of competition, because the car companies offer the same old gas-guzzling crap and if they all fail the government just gives them money anyway.


If capitalism were to work itself out, then we would expect it to happen by new car companies starting up and try something new. If they are fitter for the present economy, the auto startups would take over the market. But there's one problem for capitalism working here: capital. None of the existing companies have the capital to try anything risky (like seriously marketing a hydrogen-cell car) and nobody else has the capital to create a start-up car company. Are we stuck? If so, we are screwed.

There is hope. Another business that is becoming a relic of a bygone age is gold mining. The mines are running out of gold, and it is too expensive to risk digging in new places. Nobody has the capital to create start-up gold mining companies. But one company found a successful work-around. Goldcorp did something completely unprecedented in the gold industry: they made their gold maps public and held a competition in which anyone who could find gold would get part of the treasure. The Goldcorp Challenge worked brilliantly: new sites were found and the company jumped from a $100 million failure to a $9 billion success story.

This is not the only place this worked. Another outdated beast with high production costs is space travel. Until recently, there was no real competition--only governments could afford to send people into space. That is, until the Ansari X Prize inspired 26 teams to spend a combined $100 million dollars to figuring out a low-cost solution to putting a person into orbit. At first, the task seemed insurmountable, but in 2004 Scaled Composites won the prize 8 years after it was announced.

What should the U.S. government do to save the auto industry? Not what it's currently doing. It's giving out free money to the very companies that were selected against by the economy. That's like trying to resurrect the wooly mammoth in our post-ice age modern world. Instead, the Senate should allocate funds towards an H-Prize: $500 million to the first company to market an affordable Hydrogen fuel-cell powered car. Or something like that, anyway…you get the idea!


Making competition based auto payouts would not signal the end of capitalism, but the return to capitalism. It's well worth the shot.