Gas Wars and Woes
June 25th, 2009 by Grandpa OddballCopyright © GetOddNews and Grandpa Oddball June 25, 2009. All rights reserved.
So what does all this mean. Let me list the problems:
- First a little recognized but vitally important problem. With captive boards of directors rubber stamping the decisions of the feudal corporate executives we have the classic problem of succession. With large investment funds and pension funds also abdicating their responsibility to elect board members which place the welfare of the stockholders first then there is no effective way to choose competent and responsive executives and no practical way to eliminate the incompetent, greedy and dishonest. Instead what we now have is a pseudo-hereditary corporate system exhibiting all the ills of such a system.
- The pseudo-hereditary corporate system wouldn’t be a problem except that the concentration of corporate power via mergers has created an untenable social and economic situation. In effect we have swept aside the anti-trust laws that previous generations enacted to prevent this kind of abuse.
- With the advent of modern communications technology and the de facto repeal of the anti-trust laws the old economic instabilities are exacerbated. This is particularly true of economic bubbles associated with violent crashes such as stock and commodity crashes. These crashes have been with us for a long time (for example, see the classic book Memoirs of Extraordinary Popular Delusions and the Madness of Crowds
by Charles MacKay, LL.D. ) and the basic causes remain unchanged but have been made more severe under our global economy as can be seen recently by the crash of the housing bubble and the effective bankruptcy of the banking industry (and as noted earlier we seem to be making the mistake of “printing” more money to “solve” the situation. Inevitably we are headed for a huge bout of inflation.).
- Empirically many economic/social human systems exhibit “phase transitions” (first or second order). This is too naive since many systems also exhibit bifurcation so that history does matter even in the presence of noise. Note: Contrary to conventional economic assumptions an actual economic system is not in equilibrium and at bifurcation the choices are well defined but the path chosen is “arbitrary” or unpredictable because of noise.
- Not only are real economic systems complex and include bifurcations but they also exhibit metastable states that can persist for long periods of time. these are technically unstable and depending on the history of the system it can take very little (i.e., noise) to cause a transition but without a (random) trigger the state persists; this along the effect of modern communications is a prime reason for market instability. In fact without regulation markets are inherently unstable.
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“Wealth condensation” whereby a few elites get super rich while the rest become impoverished likely leads to the catastrophic collapse of the society.
Free market neoclassical economists are imbued with articles of “faith” but the data observations don’t support them. So strong is this faith that they blame economic problems not on free trade or laissez-faire but on “corrupt CEOs, on government policies, on small investors, on labor unions, on left-wing critics who spread doubt and negative thinking– in fact they lay anywhere but on the market structure itself. If only all these people will behave, say the free-marketeers,…” Basically this is another example of cognitive dissonance.
- A surprising number of unplanned or natural systems (including modern global capitalistic systems) form “scale free small world networks“. That is combinations of small very interconnected groups connected by less numerous long range connections. This seems to be a good compromise between resource utilization, efficiency and robustness. The systems with this kind of connectivity range from power grids, the Internet and unplanned city growth to brain neurons and metabolic pathways. In particular human interacting networks seem to be built like this so that no one is more remote than “six degrees of freedom” from anyone else on Earth. It also means that everyone else’s problems and vulnerabilities are ours as well. These and other pertinent facts have been documented in a book call Critical Mass: How One Thing Leads to Another
by Phillip Ball ) a tour de force presented in a popular format).
- All of the preceding indicates that we have created an unstable economic metastable system. As noted by Dr. H. Eugene Stanley (APS NEWS, December 2008) with modern communication which are often automatic we have built an overconnected economic system and oveconnected metastable systems are WORSE, NOT BETTER for encouraging large fluctuations and bubbles. To fix things we need to moderate these connections.
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Tags: Economics, energy, gas prices
this article with others.
Don’t think I’ll blog about Micheal Jackson. I’m finding more interesting things to me to blog about.
I think I would vote for you. Yes! I would.
Selma
Hey, have you seen this news article?
New details about Michael Jackson’s Death Emerge
I was wondering if you were going to blog about this…