jawfish

Value Added, The Standard
john posted in memes, politics & culture on December 4th, 2008

With the current terrible financial weather on top of many years of very bad management in the USA, we need to restructure our economy, and we need a simple common-sense standard to define what we need and what we should jettison.

The Situation
Many of us have been stunned by the size of the banking collapse and bailout. First, old pinstripe investment banks turn out to be mountains of toxic paper and leverage, run by con men, then vast amounts of taxpayer money are thrown at the banking system overnight to no effect, only to be followed by literally trillions of unaccounted dollars from the Fed. Then, when actual manufacturing businesses, the automakers, come to Washington, the New York set couldn’t care less.

Without repeating the details covered elsewhere, let’s just say that the heretofore academic and obscure critique of American business as too little manufacturing and far too much F.I.R.E. ( finance insurance real estate) has become a commonplace in the media. Now we are in real danger of losing the domestic part of the auto industry to bankruptcy.

Some Introspection
Who are we, this nation whose wealth is based on financial transactions? Where is the economy built on farmers, ranchers, and mechanics? Who are these frightened fat people who buy buy buy at Walmart, and have no town pharmacy or clothing store? When did bankers become PT Barnums running a gigantic Ponzi scheme? Is there really no one left outside the Berkshire-Hathaway empire and the computer biz that builds a business year by year?

We Need a Standard
Clearly there are jobs that must be done, like firefighter, cop, and doctor. There are jobs that can make other jobs more efficient or valuable, like sales, accounting, and insurance. There is a powerful fast-moving global financial system that can underwrite world-wide trade. And then there are jobs that make something. These are the jobs that produce real wealth. These are the jobs that provide the raison d’etre for the supporting jobs. The current crisis makes it clear that runaway FIRE business not only detracts from real wealth and prosperity by rerouting resources that should have gone into valuable jobs, but can actually reach a toxic level where it destroys the financial infrastructure. Put differently, we can afford a few residents of Richistan, but turning over the whole banking sector to them leads to a looting of the nation’s wealth.

The nation is in for some tough times restructuring the economy. We need a value standard to use when planning new business and government spending. What jobs are valuable and what are a drain on the society? We can’t go with my personal list or with yours: we need a general way of evaluating work that we can all agree on. For instance, we have to decide what banks will be allowed to do, and what they will be required to do.

Value Added
Here’s a simple way of looking at the value of economic work: Value Added. Value Added simply means that your work took some raw materials and made them into something more valuable. Whether you added dollar value or social value is irrelevant, you made something better. It’s as simple as that, value added is good, value consumed is bad. Any individual job is hard to quantify, and all of us backslide some days and march forward others. But maybe when you are deciding to call your next meeting, you might think, ” Will we lose more production by taking these people off-line, than we gain by meeting?” When you invest, ask, ” Is this a company that makes something, or are they just moving paper around?” When we examine governmental health care proposals, lets ask, “Will this help us compete with foreign sources, will it make health delivery more efficient, will it allow people to work for small companies and start-ups with no insurance?”

Parasitic Work
There has been a ubiquitous de-coupling of wealth from value-creation. We folks outside the inner financial circle hardly knew how much before this collapse, but people of real wealth no longer feed it like the Founding Fathers on trade and agriculture, or like the rust-belt barons on steel and cars. Real wealth today is built like the Robber Barons, on sleazy governmental give-aways and land deals and stock manipulations, and now complex computer-generated pseudo-money-contracts. And giant retailers like Walmart are just growing by squeezing out the smaller competitors, they aren’t making anything new. Or making anything at all.

“The Kept Dollar is a Stinking Fish”
This free-floating wealth is parasitic, it is not beholden or dependent on a region, a nation even. It does not rely on a workforce or raw material. And worst of all, it’s not available capital for businesses: it’s locked up in credit-default swaps, insurance on insurance on paper, and other abstruse and dubious entities. When the wealth has no social ties, it naturally encourages a kind of rich-man’s anarchy. In the past, wealth was based on agriculture, manufacturing, and trade. Sure there were plenty of sleazy deals, swindles, and usury, but they weren’t the majority of the economy. Now, wealth is based on swooping in, and making a bet, gathering up the chips and vanishing.

Let’s test the idea of Value Added:
Farmer – takes soil, and seeds and makes food. Value added.
Hedge fund manager – takes capital, borrows more capital, and risks it all in an attempt to make more capital. The capital never goes to work, nothing is created, so this behavior is parasitic. Value depleted.
Venture capitalist – takes capital and funds new business with it. Value added.
Traditional banker – Lends for housing, construction, manufacturing plant and equipment. Businesses are built, jobs created. Value added.
New style bonus-driven banker – Constantly searching for new and bigger short-term wins to make his annual bonus bigger. Never invests in long-term projects. Nothing created except risk. Parasite. Value depleted.
Corporate raider, CEO, investment banker – they may improve efficiency of system by reorganizing sick companies, but almost always they just spend on non-productive mergers, or loot current value-added assets. Usually parasitic. Value depleted.

Conclusion:
Sure there are lots of edge conditions where its hard to say what value is added or subtracted. Environmental and social costs are not well accounted for in our system, but that’s a subject for the Green Economic Revolution. But two simple words express the general idea- Value Added. If you are not adding value, you are a net cost rather than an asset. Think about it.

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References:

Niall Ferguson article on the immense size of F.I.R.E
Chris Martenson series on the whole enchilada of financial upheaval.

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Technologies That Will Change the Worldcomment
john posted in memes, technologies on October 10th, 2008

Sometimes when the criminal antics in Washington and Wall St. are too much to bear, you just have to make a list of optimistic things. Some people may want to list how many ways love changes the world, but I go for bits of technology.

Past Examples

examples of the kind of thing I mean:
Switch from whale oil to petroleum
The rudder
Industrial steel
Aniline dye and the synthetic chemical industry
Packet switched computer networks
Semiconductors
Telegraph and so on…

Past successes look obvious from the future, but it is inherent in the nature of disruptive technologies that the really important ones solve problems that aren’t obvious at all. So by this measure whatever is not on this list could be a real whiz-bang idea. But I’ll plunge forward anyway, heedless of the cost.

Future

With the looming greenhouse gas crisis, and massive over-population, energy ideas top the list. But some think that water and good agricultural dirt may be the scarcest resources in the future.

Energy

Most obvious:
Cheap and efficient solar cells. Solar roofing, thin flexible films, solar paints and printing. Current glass-mounted cells cost roughly $700 for 100W, which is too much to pay back even with $0.15/kwh grid power. Many researchers are working on the problem, and new announcements come weekly. For example catalytic breakup of H2O.

The low-tech route: cheap parabolic solar and MIT group builds a low-cost reflector to generate steam.

infra-red solar power Useful for both daytime, and nighttime, plus waste heat recovery.

Everybody’s favorite, fusion power:
Imagine multi-megawatt generators without pollution. Commercial success is still decades away, though the Europeans and the Brits are spending on research.

One attempt to commercialize fusion.

Small energy harvesting:
Various schemes have been proposed for reclaiming small amounts of waste energy. Just as hybrid vehicles recover some motive energy from braking, we could recover energy from waste heat at air conditioners, auto engines, sun-heated paving. Medical researchers are proposing to generate electricity from body chemistry, and from movement. More radical are the self-powered sensors that harvest enough energy from their environment to forgo batteries.

Using radio signals to power sensors
Parasitic power devices.

Artificial photosynthesis
The grand pattern for harvesting solar energy is photosynthesis. An understanding of how it works could lead to genetic manipulation, and creations of more efficient bio-fuels.

One of many starts

Small scale wind power without tall towers:
Efficient wind turbines need to be well above rooflines and trees. This is a problem for residential generation. Some have proposed tethered kites and blimps. Windbelt. There are pilot projects that use harmonic vibration in wires to make small amounts of power. These do not require complex turbines or towers, and so may be useful in the third world.

Clean, sustainable bio-fuels:
Bio-fuels are already being made from all manner of organic materials, from sewage and manure, to algae, to waste agricultural products, crops, even coal. The problem is that none of these processes are truly carbon-neutral and most have other negative side-effects like disruption in agricultural markets.
Craig Ventner has announced that he will produce carbon-negative fuel from genetically-engineered bacteria that feed on CO2.

Efficient hydrogen storage:
Hydrogen is extremely clean, and good for fuel cells, even internal combustion engines, but it is devilishly difficult to store. Current technologies use extreme pressure, liquification or chemical matrices, none of which are suitable for cars. Some work is being done with ammonia and catalyzed water, as liquid fuels are ideal for transportation.

Efficient hydrogen production:
Hydrogen is extremely common, but bound up in compounds which are expensive to break down. Researchers are working on various biologic methods of producing hydrogen, similar to those for methane and the alcohols. This gets into artificial photosynthesis, where the bio-fuel research is also headed.
Here is a very interesting development.

Cheap powerful batteries:
Today’s Lithium batteries today are expensive, and extremely awkward to make into usable packs for electric cars. Researchers are working on nanotech methods of improving the weight, cost, and maintenance, though the power density may not go up much. And today’s power density isn’t high enough for gasoline-like range at low weights.

Low power lighting
Low power lighting has been with us since the 1980’s, but in the form of compact flourescents that use mercury and have an awkward package. LEDs are reaching the same efficiency, their price is coming down, and they are wondefully small and long-lived. For instance, Toshiba makes white LEDs at about 51 lumens per watt (a 100 w oldfashioned lamp is 17 lumens per watt) and is comparable with CFLs and even with the best gas discharge lights like automotive HID.
Cree may be even better.
More data.

Materials

You can argue that much of the quest for new materials is just the flip side of the quest for cheaper energy. After all, the problem with current materials is that they are too heavy or they require too much energy to mine, process, or machine. But Nanotechnologists may also claim that they are making materials that do things that couldn’t be done at all before. There are two basic patterns for new materials: lighter-stronger-cheaper-less corrosion, and chemically or electrically active.

Cheap wiring:
Electrical wiring is almost exclusively copper. It is expensive and environmentally unclean in production, prone to corrosion, heavy, and inelastic. A cheap, elastic, conductive alternative could save money and weight in all kinds of machines.

High temperature superconductors:
(see cheap wiring)
Transmission wires for the electrical grid that have little to no resistance at room temperature.

Smart mulch:
An agricultural mulch that generates electricity from sunlight to power irrigation pumps, and controls moisture loss, rain penetration, insects, and diseases.

Structural composites:
Composites to substitute for aluminum and steel, with less weight, more elasticity, more corrosion resistance, lower manufacturing costs, Carbon fiber and its relatives already hit some of these points, but it is inelastic and very expensive as a material and in the manufacturing process. Amory Lovin’s Rocky Mountain Institute has been developing a carbon-reinforced plastic that can be mass-produced.
Here’s a patent.

Spider silk:
Spider silk is famously the strongest fiber known. It is also bio-degradable. Various genetic engineering and nanotech approaches are being used to copy or duplicate it in industrial form. Tensile strength is one of the most important qualities in hundreds of products, from tires to structural composites to cables and ropes, so success here will make all manner of light, strong products available.

Resources

Water purification and desalinization:
The third world especially will need small, cheap, low-energy ways to clean water for drinking and irrigation. Global warming changes are accelerating damage done by over-pumping and polluting.
Deka generator/purifier

Farming without soil degradation:
The Romans knew how to do it, but failed to execute. So too the Mayans and virtually every other agricultural civilization. Soil is produced naturally from rock, but the process is much slower than the erosion cuased by bad tillage, and the ecologic depletion caused by hyper-cultivating monocultures.

Robots

The harder problems in robotics – machine vision, autonomy, voice recognition and speech synthesis are finally yielding to sustained research. ( see jawfish ) The first widespread use of mobile robots is in the military, where the cost equation is very favorable. Surely just as cheap IEDs defeat expensive Humvees in Iraq, there will be a tidal wave of cheap, disposable, attack robots used against expensive complex and human targets. I can’t see any good coming out of this prospect, but I can see disruptive change.

But civilian robotics could restore some manufacturing to first-world countries, making supply-chains shorter, and re-invigorating the economy. But don’t expect a good house-cleaning bot any time soon.

Medicine

There may be more innovation coming in health and medicine than all the other fields listed combined, and so I’ll just focus an a couple that might have very-wide reaching effects.

Brain science:
Suddenly, teams of biologists, physicists, doctors, and engineers are building an empirical science of the how the brain works. While the anecdotal guesses of Freud are long behind us, understanding of even the most basic brain traits is a long way ahead. At least we know and agree that we still don’t understand very much, but we do know some things about brain performance. It’s not unreasonable to think that great advances in brain-drugs and brain-training are possible, leading to greater happiness and intelligence, however unmeasurable. Simply learning to control our metabolism to keep neurons strong and fat low would be a huge boon in the developed world. The dark side is also always there, though, development of these drugs will also target addiction pathways and abuse.

Long range birth control:
Pure Speculation Department- if the political will existed, use of cheap, long lasting implantable birth control would be a huge boon. We seem so close to this, and yet we still can’t have programs that pay girls to avoid pregnancy.

Who’s holding up the train?

What’s stopping all this innovation? In some cases nothing, for instance, the cost of petroleum is now high enough to create a bio-fuel industry. Lack of capital and researchers may hinder many projects, though venture capital is finding its way into many of these ideas because the commercial prospects are huge.

But there are many technical solutions that require infrastructure changes, or market regulation, or temporary subsidy. There are many powerful entrenched Luddites who deny the science of global warming out of ignorance or for political ends. American governmental capital has been re-routed into war in the oil-fields for more than five years, and now into the Wall St. bail-out. Many solutions require global cooperation, which is increasingly difficult across the developed vs developing vs undeveloped divides. In short, while our mechanical and chemical and computing skills increase every year, our human skills and institutions barely change. And the very worst of all the human problems, over-population, is not up for discussion in the fastest-growing parts of the world.

Over-population is like a rising flood that will eventually negate the ability of third-world countries to develop, and will continue to plague first-world countries with intractable immigration issues.

So the technology that is going nowhere is human-management. We don’t seem to be much better at making group decisions based on rationality than we were as cavemen or even chimps. And our innate aggression has been outrun by our technical ability to make weapons. The coming robot revolution in the military may make that dilemma even worse.

Why Microsoft Can’t Make it Work
john posted in memes, technologies on July 1st, 2008

Not Just Another Bash-Microsoft Session

Nice things will be said about Microsoft.

(afterthought: today it was announced that Microsoft has started funding Apache, see end of this article for more)

I ran across this MS research project page recently when I googled “intelligent adaptive interface.” I was looking to see if anyone was working on making computer and small device interfaces that adapt to the user’s behavior. What I had in mind was using one of the newly-ubiquitous tiny Linux devices as a remote control. On my conventional low-budget stereo and tv devices, the remotes have a gazillion buttons, with no logical placement and no hierarchy. The labels are invisible in the dark and require reading glasses in the light, and inscrutable when actually read. You all know the drill.

Well this very scientific and academic page shows a whole series of Microsoft Research projects on the general notion of adaptive interfaces. At a glance you can tell this is Serious Stuff done by Serious but Nice People ( their pictures are there). They are well-organized, use big-time ideas like Bayesian filters and Matrices, 3D interfaces, “a state-of-the-art psychological studies laboratory,” and so forth. They get to re-examine human-machine physical interfaces, and all sorts of interesting problems.

So what have they come up with?
The infamous talking paper clip.
Yep I am not kidding. OK there is a long list of other things of more substance from implementing encryption to new 3D rendering filters.

Now the MS people I have met have been really smart, and I don’t doubt for a minute that working with these folks would be a real intellectual thrill. But I assure you, bet money on it, they will never solve the remote control button problem, or even improve the visual mess that is Windows. How come I know this at a glance, without any special knowledge? You look at that page, what do you think? And chime in if you disagree.

So why can’t they make it work?
They have meetings.
They have too many people and too much money.
Whatever they do will be diluted and absorbed by the layer after layer of other groups just like them at Microsoft.
They start by going back and questioning premises about human psychology.
They have no test track and feedback loop.
They aren’t hungry.

Feedback
For me, the most interesting of these obstacles (because it could, in theory, be overcome at a big company), is the lack of feedback and test track. The rest are the result of working in a company with 30,000 other smart people, where overhead approaches 100% of total effort. What’s feedback in this case? Feedback is not focus groups. Useful feedback comes from actually writing some software and letting it loose on the public to see if anyone likes it, and actually paying attention to what they say and do. The test track is the venue where you can get good feedback with high frequency.

Let’s look at an analogy, motor racing. In racing you have an absolute test: the order of finish. You have a set of rules, intentionally designed to narrow the problem with constraints to the point where it becomes partially soluble, remains quite difficult, and always has room for improvement. You have competitors and a prize which provide motivation. Good engineering practice is reinforced in racing because at every level there are painful time and resource constraints.

Let me use a type of racing I am familiar with to explain why good practice is reinforced:
In motorcycle road racing a team typically races one or two times a month, but they only get to the track on Tuesday sometimes even Thursday before a Sunday race. Because of cost constraints of many kinds, they only get a few hours of practice, and then qualifying time on the track. Every track is different and requires a new chassis setup, and last year’s settings won’t work, because too many other factors have changed. There are multiple variables to set, and they have unpredictable interactions. Teams have no ability to use the track at other times for testing. There is an unshakable deadline, and somebody wins.

So does this incredibly difficult process produce better engineered bikes?
Lap times get faster every year. C’est tout.

Back to Microsoft, just how are they ever to get this sort of feedback, testing, and motivation? The giant company could spin off into small teams and create a competition. But then what is the test? Microsoft can’t afford to release a bunch of half-baked ideas to the public ( cynics disagree, but I promised not to mock ), so the test is inevitably arbitrary and maybe political. This engenders a kind of corporate navel-staring which can’t produce good work. So no, I don’t think they can innovate, because too much is at stake.

What about the famous iPod, iPhone model of innovation at Apple? The market has clearly voted for that in a big way. Apple is a huge company that nevertheless finds it possible to innovate. The Apple Macintosh approach to the personal computer was to control everything, the hardware, the operating system, the user interface, in the name of consistency, reliability and integration. All of which are other ways to say “control.” Yes Apple is more of a control-freak than Microsoft.

A recent Wired magazine article tried to take on the culture at Apple, inevitably making the question into the culture of Steve Jobs:

Jobs’ fabled attitude toward parking reflects his approach to business: For him, the regular rules do not apply. …
… Apple is … more like an old-fashioned industrial titan than a different-thinking business of the future. Apple operates with a level of secrecy that makes Thomas Pynchon look like Paris Hilton. It locks consumers into a proprietary ecosystem. And as for treating employees like gods? Yeah, Apple doesn’t do that either.

But by deliberately flouting the Google mantra, Apple has thrived. When Jobs retook the helm in 1997, the company was struggling to survive. Today it has a market cap of $105 billion, placing it ahead of Dell and behind Intel…..

It’s hard to see how any of this would have happened had Jobs hewed to the standard touchy-feely philosophies of Silicon Valley. Apple creates must-have products the old-fashioned way: by locking the doors and sweating and bleeding until something emerges perfectly formed. It’s hard to see the Mac OS and the iPhone coming out of the same design-by-committee process that produced Microsoft Vista or Dell’s Pocket DJ music player.

( I have cut out a rather silly comparison to Google)

This probably isn’t the most profound commentary on Apple, but it does try to get at the culture issue that is clearly different, if a bit distasteful. Jobs is famously a screamer, possessed of a legendary “reality distortion field,” in short, a real prima donna. I worked a long time ago for an outfit with a head man like that, The Santa Fe Opera under John Crosby. He ran the opera like a fiefdom, it was housed on his ranch North of Santa Fe, and he usually decided by fiat that he would conduct one of the operas each season. He used his own stable of buddies to conduct, design, and direct. He was known to summarily dismiss even lowly employees for simple offenses like a noisy muffler. Crosby was at best a mediocre conductor, and his taste could veer into the campy and maudlin, but it’s impossible to conceive of the SFO without him. He created a world-class summer residency for opera out of the juniper, sagebrush, and rattlesnakes of New Mexico. Santa Fe was interesting. It was something to sit outside ready for the incredible New Mexico stars, watching a thunderstorm approach down the Rio Grande valley, and have the orchestra break into the Der Fliegender Hollander, or Lulu, the most depressing show I have ever seen, or Falstaff. At its best, it was thrilling, and people cared.

The various Apple iThings were brand-new products, and Jobs bet a good part of the company on them. Poker players call this kind of gamble, “all-in” and it requires an appetite for risk, and an environment where aggression is rewarded. Other companies don’t seem to be able to follow, even when there is such a clear example to copy. Let’s not just dump on Microsoft, why can’t the Japanese or Koreans or Finns make an mp3 player or cell-phone as good as an iPod or iPhone?

Hell, why can’t anybody even make a good remote control or car radio?

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Microsoft goes Open Source?

an afterthought…

Well the cnet article points out previous areas of cooperation between Microsoft and the Open Source world, and favorable differences in the Apache license and the GPL used by many other open applications. So its not quite a shocker. But never mind these inside-the-silicon-axis matters, does this mean Microsoft might have to open up its platform to be able to innovate at all?

Windows is in a pinch. World-wide its tremendous market success has paradoxically left it with few new markets to expand into. Sure the Chinese market may eventually be as big as Europe and America combined, but its not at all clear that they will pay for the software they use. If somehow forced to start observing international IP standards on piracy, they might just use no-cost Linux instead. The latest Windows, Vista, has been a flop technically and in sales. In addition, the hot new market is phones and tiny devices, where Apple owns the flashy-bits and Linux, with help from Google and others, may be the gorilla in the room.

An admittedly far-fetched scenario:
If Microsoft moved very quickly and transformed Windows into a windowing application that could run natively on Linux, and provided software infrastructure ( libraries) for the applications developers to port to the Linux kernel-Windows hybrid, they might be able to drop thousands of developers from Windows, and replace them with some funding for the various Linux groups they’d need. Windows users would get the same look&feel, and Microsoft could probably charge just as much for a product with much smaller development costs. They won’t do it because its risky.

Not doing it might be just as risky, since the Open Source world is catching up quickly in all areas. Another far-fetched idea of three years ago, that one day Linux and friends might be a real competitor for Windows, doesn’t seem as outrageous today. Another and more likely option for Microsoft is to stay the course and milk the Windows franchise for as long as it can, and meanwhile focus on games, small devices, and phones. This might be more profitable in the near term, depending on how much labor costs could be saved or re-used on future-oriented development. It would be much easier for management to do, and therefore its the likely choice for them.

Why iPhones and Text Messages and MP3s Matter
john posted in memes, politics & culture on October 3rd, 2007

Take two current giant-corporate-media blunders:
Apple introduces brickware, software updates that can make an iPhone completely unusable if the owner has changed the standard software. Apple doesn’t want owners to modify their phones to run more applications or take calls on other phone networks.

Verizon censors political text messages on their cell system because they objected to the content.

Ok Verizon has already lost this battle, and Apple will too. But they illustrate a nasty trend in the power-politics between giant multinationals and users.

And today, Sony announces that it believes ripping your CDs to MP3s or even just backing them up is piracy.

read on …