Some investors consider more than their own financial returns,
considering investment’s environmental sustainability and social
responsibility, as well as corporate governance. Each of such ‘ESG’
investing strategies have now been shown to actually enhance returns: https://www.db.com/newsroom_news/2016/ghp/esg-and-financial-performance-aggregated-evidence-from-more-than-200-empirical-studies-en-11363.htm
Furthermore, the risk of total loss of capital in ESG investing has been
shown to be quite comparable to money otherwise invested: https://insight.factset.com/the-hidden-risks-of-csr-esg-and-sri-investing.
Friday, March 30, 2018
Sunday, March 11, 2018
Realizing Our Economic Maturity.
Maturity?
In our individual lives, growth precedes a long period of maturity, which is recognized as both the goal of growth and as a process itself. To mature is both to achieve a certain size and to achieve a certain standard of behavior.
Economic Maturity?
Our physical economy can’t grow forever on our finite earth. Despite those feeling a healthy economy must always grow, nothing healthy grows forever - such cancerous growth wouldn’t fit on this planet. Common sense heeds calls for healthy economic maturity, yet many economists fail to understand.
Economic Growth with Physical Maturity?
Some claim society can become mature physically while continuing to grow economically, but we know economic growth without physical growth as inflation. There’s the sound argument that value can grow separate from physical growth; a growth in quality versus quantity. Does conceding this surrender to full separation of economic growth from physical growth? Certainly products can improve in value apart from changes in product mass. But the needed research changes the physical world, and thereby increases entropy. Real value intrinsically has a physical component. Yet this physical component may even shrink with growth in quality, value and economy. One can distinguish between such massless economic development and economic growth which intrinsically involves physical increases. Would such economic development with physical maturity satisfy the economic requirement for ‘growth’? Can such development be systematically massless, or does the needed physical exploration cost render even economic development intrinsically linked to physical growth? In any event, ‘economic growth’ is too imprecise a term for increases in value with physical maturity.
Realize?
Here the word can have two meanings; first, to achieve; second, to become aware of something. Both meanings fit; economic maturity might be achieved in our city, and we might become aware of economic maturity and it’s appropriateness.
Why Realize Economic Maturity?
What’s wrong with economic growth forever? The problems with this fiction are many:
1) It won’t fit. Our earth, having a definite size, can sustain a limited physical economy. More industry than this degrades the environment upon which that industry relies. Others argue that economic growth need not accompany physical growth, but isn’t that merely inflation? Stagflation, where inflation accompanies no growth, shows that these two are separable, but stagflation isn’t economic health. Eventually sanity calls for economic health without physical growth. But when should we begin to consider what amount of economic activity is mature? Perhaps, as air’s carbon pollution exceeds limits of climatic stability, upon which our food supply depends, now is not too early.
2) Economic growth promises social equality, but has delivered increasing inequality consistently instead. Piketty showed that growth accompanied worsening inequality thoughout Western economic history. If growth doesn’t give poor folks a better chance, why bother? Why crowd things; things needed by us and our children?
3) Accepting false limits weakens, but accepting real limits can strengthen by focusing limited resources where real, but limited, opportunity exists. Clear language can help us distinguish false from real limits, and false from real opportunity.
How Do We Realize Economic Maturity?
In one meaning of ‘realize’; to understand and acknowledge, we might realize economic maturity (in the sense of physical maturity), when we see that it has grown to it’s ultimate desirable size.
In another meaning of ‘realize’; to achieve, we might realize economic maturity (maturity in the sense of full ethical development) by seeing beyond preoccupation with growth; with economic ‘bigness’ to better, more ethical measures, based on qualities, not quantities.
Do societies have lifespans? Every society that previously existed did. What limits that lifespan? What extends that lifespan? What does a society need to ‘live’? Let’s ask the students of history; the historians.
How to better equality without overgrowth has been explored by prominent ecological economists Herman Daly http://www.steadystate.org/eight-fallacies-about-growth/, Joshua Farley, Hazel Henderson and in recent work by Tim Jackson. Let’s apply this wisdom to understanding how we can better our real fate.
In our individual lives, growth precedes a long period of maturity, which is recognized as both the goal of growth and as a process itself. To mature is both to achieve a certain size and to achieve a certain standard of behavior.
Economic Maturity?
Our physical economy can’t grow forever on our finite earth. Despite those feeling a healthy economy must always grow, nothing healthy grows forever - such cancerous growth wouldn’t fit on this planet. Common sense heeds calls for healthy economic maturity, yet many economists fail to understand.
Economic Growth with Physical Maturity?
Some claim society can become mature physically while continuing to grow economically, but we know economic growth without physical growth as inflation. There’s the sound argument that value can grow separate from physical growth; a growth in quality versus quantity. Does conceding this surrender to full separation of economic growth from physical growth? Certainly products can improve in value apart from changes in product mass. But the needed research changes the physical world, and thereby increases entropy. Real value intrinsically has a physical component. Yet this physical component may even shrink with growth in quality, value and economy. One can distinguish between such massless economic development and economic growth which intrinsically involves physical increases. Would such economic development with physical maturity satisfy the economic requirement for ‘growth’? Can such development be systematically massless, or does the needed physical exploration cost render even economic development intrinsically linked to physical growth? In any event, ‘economic growth’ is too imprecise a term for increases in value with physical maturity.
Realize?
Here the word can have two meanings; first, to achieve; second, to become aware of something. Both meanings fit; economic maturity might be achieved in our city, and we might become aware of economic maturity and it’s appropriateness.
Why Realize Economic Maturity?
What’s wrong with economic growth forever? The problems with this fiction are many:
1) It won’t fit. Our earth, having a definite size, can sustain a limited physical economy. More industry than this degrades the environment upon which that industry relies. Others argue that economic growth need not accompany physical growth, but isn’t that merely inflation? Stagflation, where inflation accompanies no growth, shows that these two are separable, but stagflation isn’t economic health. Eventually sanity calls for economic health without physical growth. But when should we begin to consider what amount of economic activity is mature? Perhaps, as air’s carbon pollution exceeds limits of climatic stability, upon which our food supply depends, now is not too early.
2) Economic growth promises social equality, but has delivered increasing inequality consistently instead. Piketty showed that growth accompanied worsening inequality thoughout Western economic history. If growth doesn’t give poor folks a better chance, why bother? Why crowd things; things needed by us and our children?
3) Accepting false limits weakens, but accepting real limits can strengthen by focusing limited resources where real, but limited, opportunity exists. Clear language can help us distinguish false from real limits, and false from real opportunity.
How Do We Realize Economic Maturity?
In one meaning of ‘realize’; to understand and acknowledge, we might realize economic maturity (in the sense of physical maturity), when we see that it has grown to it’s ultimate desirable size.
In another meaning of ‘realize’; to achieve, we might realize economic maturity (maturity in the sense of full ethical development) by seeing beyond preoccupation with growth; with economic ‘bigness’ to better, more ethical measures, based on qualities, not quantities.
Do societies have lifespans? Every society that previously existed did. What limits that lifespan? What extends that lifespan? What does a society need to ‘live’? Let’s ask the students of history; the historians.
How to better equality without overgrowth has been explored by prominent ecological economists Herman Daly http://www.steadystate.org/eight-fallacies-about-growth/, Joshua Farley, Hazel Henderson and in recent work by Tim Jackson. Let’s apply this wisdom to understanding how we can better our real fate.
Saturday, March 03, 2018
Robocalypse?
Robocalypse: What’s not to like about the elimination of all human labor with robots? Isn’t it good to eliminate labor with productivity?
In the pre-industrial world, filled with fossil fuels, minerals and ores, and empty of people and pollution, those before us brilliantly eliminated much labor using these resources and new techniques. And it fit: the techniques proliferated, the population burgeoned and the inevitable pollution dissipated at first. Techniques were key to this transformation, inspired and rewarded by patents, and by research and development tax write-offs, and quantified by measuring labor productivity. Such a central and celebrated measure was soon referred to simply as ‘productivity’, and expected to grow forever.
So the world filled with people and pollution, while emptying of the easiest-to-access resources. At first, negligible resources were used up in transforming resources into products, yet eventually, coal might be mined from such difficult-to-access seams so rocky that machinery breaks faster than the coal dug can repair it. This exemplifies the energy return on energy invested (EROEI) reaching zero, where net energy returns have dwindled to nothing. At that point it is easier to stay home than to work and burn all the mined coal just to mine, repair and clean up after that very mining. Another way to zero EROEI is through increasingly risky and polluting mining or oil drilling, where cleaning up the inevitable seems unaffordable, and is worse than the resources extracted are good.
In our world today, still filling with willing workers, pollution and problems, while emptying of easy-to-access resources, we can all be better off by increasing resource productivity while sacrificing labor productivity. We can employ many more, pollute much less and conserve our dwindling limiting resources. This can clearly help the worst-off. But what of the majority? It turns out that even the best-off of us can benefit by opportunity broadly increasing, since we are all measurably stressed by the fear of poverty and healthily reassured by greater equality of social opportunity, as documented in The Spirit Level.
Instead of the Robocalypse sparing us lives of drudgery, further elimination of labor worsens our lives, and misses the chance to make the best use of what we have the least of.
But isn’t this Robocalypse inevitable? It may be, but why hurry to meet it? Instead, we can slow the evolution of labor-eliminating techniques by lessening revenue loss via tax write-offs for research and development, and for further extraction of fossil fuels we can’t afford to burn.
Hat tips to Herman Daly, Hazel Henderson, Richard Wilkinson, Kate Pickett and others.
In the pre-industrial world, filled with fossil fuels, minerals and ores, and empty of people and pollution, those before us brilliantly eliminated much labor using these resources and new techniques. And it fit: the techniques proliferated, the population burgeoned and the inevitable pollution dissipated at first. Techniques were key to this transformation, inspired and rewarded by patents, and by research and development tax write-offs, and quantified by measuring labor productivity. Such a central and celebrated measure was soon referred to simply as ‘productivity’, and expected to grow forever.
So the world filled with people and pollution, while emptying of the easiest-to-access resources. At first, negligible resources were used up in transforming resources into products, yet eventually, coal might be mined from such difficult-to-access seams so rocky that machinery breaks faster than the coal dug can repair it. This exemplifies the energy return on energy invested (EROEI) reaching zero, where net energy returns have dwindled to nothing. At that point it is easier to stay home than to work and burn all the mined coal just to mine, repair and clean up after that very mining. Another way to zero EROEI is through increasingly risky and polluting mining or oil drilling, where cleaning up the inevitable seems unaffordable, and is worse than the resources extracted are good.
In our world today, still filling with willing workers, pollution and problems, while emptying of easy-to-access resources, we can all be better off by increasing resource productivity while sacrificing labor productivity. We can employ many more, pollute much less and conserve our dwindling limiting resources. This can clearly help the worst-off. But what of the majority? It turns out that even the best-off of us can benefit by opportunity broadly increasing, since we are all measurably stressed by the fear of poverty and healthily reassured by greater equality of social opportunity, as documented in The Spirit Level.
Instead of the Robocalypse sparing us lives of drudgery, further elimination of labor worsens our lives, and misses the chance to make the best use of what we have the least of.
But isn’t this Robocalypse inevitable? It may be, but why hurry to meet it? Instead, we can slow the evolution of labor-eliminating techniques by lessening revenue loss via tax write-offs for research and development, and for further extraction of fossil fuels we can’t afford to burn.
Hat tips to Herman Daly, Hazel Henderson, Richard Wilkinson, Kate Pickett and others.
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