Wednesday, April 30, 2025

Why is it Important to Study Spain?

 


Right now, in the US, there is a lot of anti-Latin American sentiment being stoked by the neoFascist Trump II Administration. I live in the US Southwest have spent a lot of my life doing statistical analysis of Latin America (for example, here). My off-the-cuff explanation for the animosity toward the Southern Border is that Washington DC elites have little understanding or interest in what is happening in the US Southwest. The struggles of dark-skinned Latinos and Native Americans are just of no interest to the White power structure in the US.

Whatever the real reasons for nativist hostility, it would seem to me useful to study the history of the US Southwest starting with the Hapsburg Monarchy after the discovery of the New World by Spain. The map above (from Spain: the Center of the World 1519-1682) shows that the Hapsburg Empire initially controlled the US Southwest and the Spanish influence is evident everywhere in the present. Xenophobic politicians and their supports cannot simply get rid of Spanish culture by harassing Latin American immigrants. It is too deeply entrenched in the Southwest and too widely embraced by Americans living there.

In future posts, I will just reference this post rather than repeating my reasons for studying Spain in the US.

The Decline and Fall of Elon Musk and Steve Bannon


Elon Musk and Steve Bannon, two fellow travelers with the Trump II Administration, have gained a lot of notoriety for embracing pseudo-Nazi imagery and arguing (here) that the US will Decline and Fall for the same reasons that (supposedly) destroyed the Roman Empire: declining birth rates and declining morals. My analysis of the Decline of Rome (here) and that of a lot of historians, says they are wrong and deluded.

Tweaking the George Santana quote a little: Those who deliberately mis-remember the past are determined to repeat it. Because History is not the unbiased record we might wish it to be, it will always be selectively used and misinterpreted for political purposes. On the other hand, it offers an opportunity to educate citizens on things they evidently did not learn in school.

 

Saturday, April 5, 2025

Magnitude of Trump Shocks

 

It seems that the US (and maybe the World System here) are in for some shocks from the Trump II Administration. Just yesterday, Trump seems to have imposed strong tariffs on every country in the World-System (except Russia) and countries (such as China) have instituted retaliatory tariffs. It's hard to understand why Trump is doing this: tariffs are against economic orthodoxy and against Republican economic free-trade orthodoxy. Maybe he was asleep in ECON 101 or maybe there is no explanation.

Here's another idea: Trump learned to like the botched COVID-19 Pandemic Response at the end of the Trump I Administration (2017-2021) and decided to impose his own Shock Therapy on the US and the World System. For a needy narcissist, it does get everyone talking about him!

The graphic above shows a time plot of Quarterly US GDP residuals from (2005,1) to (2024,1) produced by the USL20 policy model. The largest shock to GDP during this period was the bungled Trump Administration response to the COVID-19 Pandemic.

Can we expect another shock like the COVID-19 Pandemic shock from the Trump II Administration? Time will tell...

Wednesday, March 5, 2025

Blog Roll


No, a blog roll is not a WWII hair style (Victory Rolls), it's just a list of my blogs and the blogs of other writers I find interesting (see the right-hand column on the web version). I started blogging in 2009 and received a lot better feedback at the start. Now, social media has thrown a pail of cold water on the blog-o-sphere, but things (I hope) are changing. Social media has become a cesspool of political opinions and vented grievances, but that has a use too. I've also become a little disenchanted with academic journals which seem to be more connected to career advancement (I'm retired). So, I will continue blogging. Let me pull my blogs out of the BLOG LIST in the right-hand column (if you are viewing this on the web version) and explain why I have so many.

Maybe it wasn't a great idea to pull out separate topics for different blogs (that doesn't seem to be the preferred choice of bloggers), but reading a jumble of topics seemed tiresome, so I split out the following themes:
I have other blogs out there and I usually post interesting blog articles on social media. 

Thursday, February 27, 2025

Markets Won't Save Us: A Proof

 


Jeff Bezos has recently made changes to the Washington Post (WaPo) editorial policy to emphasize "free markets and liberty" (here). Sorry Jeff, "free markets" won't save us (no matter how much the WaPo writes about them) and here's the proof.

But first, I'm reading an excellent book by Quinn Slobodian titled Globalists: The End of Empire and the Birth of Neoliberalism. I haven't finished it yet, but I would recommend downloading the Kindle version (yes, this gives some money to Mr Bezos but I appreciate Amazon); it's an easy read on your phone while your are waiting somewhere for the future to  emerge. The book goes into the entire history of Neoliberalism (not just the US version) and Neoliberalism is all about markets. Basically, the European Neoliberal argument is that the economy is too complex to understand with simple mathematical models (the Limits-To-Growth Models or the Neoclassical Economic Growth Model or the DICE model) so we have to write laws protecting self-organization markets, the only reasonable way we know to control the Economy. Unfortunately, markets won't control both the Economy and the associated Environmental Systems to include the Demographic system. Here's the proof.


Let's start with the simple Kaya Identity (directed graph version above) used by the IPCC (see the Notes below). If we add employment markets, commodity markets, energy markets and carbon markets we get the directed graph at the beginning of this post. We don't have markets for global temperature or population (see my prior post here). There is nothing in the full market system that controls global temperature to make sure it will not exceed some tipping point and make the Earth unlivable. However, temperature change will happen gradually and begin having negative effects on population via the dashed Malthusian Feedback loop in the original directed graph. Parts of the Earth will become unlivable deserts and flooded coastal areas (with sea level rise). Increases in global temperature will increase forest fires and make affected wooded areas unlivable or at least uninsurable.

Many people, some of whom read my posts, think that Malthusian Crises can never happen or that Technological innovations will allow us to adapt to all Environmental crises (TechnoOptimism). Technological fixes require some drastic changes to the Kaya coefficients in the directed graph above. And, the coefficients of models are expected to change slowly (how quickly will all-electric vehicles be adopted?)

The coefficients e, q, e, and t are parameters in the model and will have to change rather quickly to avoid Environmental Tipping Points. TechnoOptimist assertions can be tested using the Kaya Identity. I'll leave that to you to work out the math as an exercise. You have the tools now.


Notes

Starting with the Kaya Identity also disproves the Neoliberal assertion that the Economy is too complex to be understood. The Kaya Identity is true by definition: if you add more people (N) to a SocioTechnical system you will eventually increase employment (L) which will increase output (Q) which will increase energy use (E) which will increase CO2 emissions and finally raise global temperature (T). If you don't accept the Kaya Identity, plug in some numbers to a program I have written (here) and run the program. Or, plug the parameter values into the Kaya Identity and do a back-of-the-envelope calculation (see more discussion here). To understand Technological change, modify the parameter values. Remember, the Kaya Identity is a model not the real TechnoSocial system. Yes, the real system cannot be understood with arm-chair speculation; models are all that we have.
The Kaya program (here) is very general and can be used to "prove" the  TechnoOptimism position. But, do you really believe that growth can continue forever on a finite planet? This is the argument for colonizing Mars, but that won't work either. There won't be enough space ships for the exponentially growing population to escape from the over-crowded planet.

If markets won't save us, what will? My best guess is that we will continue to hope that markets will save us but in the end it will be Malthusian Crises that control the Kaya System--a topic for a future post. For the time being, you can experiment with the Malthusian Controller here.

You might still not be convinced that markets don't control the SocioEconomic system. Here are a few more proofs.


Let's just focus on commodity markets in the directed graph above. 


Since markets are assumed (by economists) to adjust instantaneously without delays, we can reduce this part of the expanded Kaya Identity to the directed graph above.   All we have done is to modify the L-Q parameter slightly. And, since markets must be stable, (1-pq) < 1.0. In other words, we have increased the impact of labor on production. What this means is that, if markets do anything and if markets are stable and if markets adjust instantaneously, markets increase growth rates slightly. It is a line peddled by Neoliberalism and will probably be emphasized on the WaPo editorial page.


The directed graph above adds a shock, X, to the reduced market model. 



And, as we have found out with the US Egg-Price Shock, instantly adjusting markets leave prices elevated until the shock is over.  Markets do not control shocks. On the other hand, it's not that Economic Planning could have done much about the Bird Flu Pandemic or COVID-19, for that matter.






Tuesday, December 31, 2024

China's Long Malthusian Crisis After Mao's Death

 

Thomas Robert Mathus (1766-1834) died 180 years ago but his Essay on A Theory of Population (you can read it here, but few people have) continues to stir strong controversy and continues to be misunderstood. Karl Marx (1818-1883)  considered the assertion that growth would outstrip agricultural production a libel on the Human Race since it was the Capitalist System that would likely fail to produce enough food. Kenneth Boulding (here) was the first to reformulate Malthusian Theory as a General System and point out that it was simply a truism: population growth could not outstrip economic production without creating a crisis. In this post, I will apply a statistical systems model to the Economic growth of China after WWII that clearly identifies the Chinese Malthusian Crisis that lasted from 1975 to 2005 (see the model outputs in the graphic above).

Population, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio (An Essay on Population, p 4).

Malthus was not a systems theorist. Systems Theory had not been invented when Malthus wrote in 1798.  The quote above is what has made it impossible to reason with Techno-optimists. Malthus was trying to lend some mathematical rigor to his analysis. It made his two equation theory testable and falsifiable. It can easily be proved wrong and is a perfect scientific hypothesis. So why are we still talking about Malthus? Systems theory, invented in the Twentieth Century, allows us to restate the Malthusian theory in a general form that continues to be testable, useful and not casually falsifiable. It is useful because conventional Liberal Economic theory has nothing useful to say about population growth. It is simply an exogenous force that a stable economic system can always accommodate. Liberal Economic theory also has nothing useful to say about unemployment, depression and societal collapse--all these problems are important for China (see below).

So, let me just restated Malthusian Theory as a systems model (above) to avoid sterile arguments. As a system, Malthusian Theory agues that the comparison between agricultural production (QA) and population (N) can (it doesn't have to) function as an Error Correcting Controller (ECC) defining the State of the System (S). If (QA-N) is positive the system can continue growing. If (Q-N) < zero the system will start contracting. People living at the subsistence level will start starving while the wealthy can emigrate (EM). Technological change (TECH) can also intervene (e.g., the Green Revolution) to boost agricultural productivity. During a famine (negative shock to QA), however, technological innovations might not necessarily be immediately available or affordable to a society living at subsistence.

What is typically misunderstood about the Malthusian System is that there should be feedback between the state of the system (S), population growth and production. Famines should be a signal that the system cannot support the current population and that something must be done.

So let's return to China. Here is the Measurement Matrix for the CNL20 State Space model:



The first row, CN, describes overall growth and explains 90% of the variance in the indicators (taken from the World Development Indicators--Databank. The second component, CN2 (Malthus2 in the graphic above) describes the Malthusian Controller (0.55Q - 0.30N). It explains an addition 0.06% of the variation. The third component, CN3, describes a global unemployment measure, (0.82LU - 0.50 KOF) where KOF is an Index of Globalization from the Swiss Economic Institute.

The Malthus2 (CN2) component, in the graphic at the beginning of this post, reaches a low point (Q<N) between 1990 and 2000, but the Malthusian Crisis extends from 1975-2005. Major events in Modern China's History (Death of Mao, One Child Policy, Tianamen Square  Protests and Massacre) happened during the Malthusian Crisis. 

You can run the CNL20 BAU model here. You can run the CNL20 Malthus model here.