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Post #1 (October 11, 2017) – Global Power & GDP

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Post #1 (October 11, 2017) – Global Power & GDP

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Asia and Europe have continuously swapped the world’s economic center of gravity since AD1. Currently Asia is the center. This is gaged by weighing locations by GDP in three dimensional and estimating to the closest point on the earth’s surface. The GDP is the single most important measure of development capturing strength of government, economic output and richer/poorer gaps in countries. Europe can turn its global economic power around by doing three things according to a survey by Asians: focusing on “economic, industrial and trading power” “standard of living”, and “respect for democracy, human rights and rule of law” (Nougayrede).

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In 2012, McKinsey analysts, using data from the University of Groningen, released a striking map showing how the global economic centre of gravity has shifted since AD1. Yes, you read that correctly: since Jesus was a year old. Looking at the map now brings a fresh reminder of how Europe's global position is fast being challenged. Awakening to that reality is why it makes sense to stick together and make the European project thrive, not wither away.

Here's a glimpse of what the map says. It took one century, from 1820 to 1913, for the centre of gravity (as measured by "weighing" locations' GDP) to move from Asia to Europe. After the second world war, that point moved across the Atlantic to the United States. In the 1960s, 70s, 80s and 90s, it remained in the western part of the northern hemisphere. Then a dizzying acceleration occurred. In just one decade, from 2000 to 2010, the centre swept back to Asia, reversing almost all the trends of the previous 2,000 years.

We've been mentally adjusting to this shift for some time. Books have been written about how this will be the "Asian century". These days, news headlines about North Korea and China, not to mention Myanmar, serve as a constant reminder of how much of the world's security - its governance as well as the liberal democratic values that will (or won't) be upheld - depends on what happens in a part of the world that seems distant to most Europeans.

I remember an Obama administration official telling me in 2012 how 'tedious' Europe felt, whereas Asia was "exciting"

So much is going on in our own region. Debates over equality, social justice, diversity, migration, the German elections, Emmanuel Macron's reform plans, the Brexit mess, not to mention concerns over Poland and Hungary's democratic backsliding, and Russia flexing its military muscle in the east. We can be forgiven for forgetting what our place in the world has become.

Europe matters, but it often seems to matter less than we would like. We didn't even need Donald Trump for us to realise that the old continent had become less of an American focus than for previous generations. I remember an Obama administration official telling me in 2012 about how "tedious" Europe felt (this was in the middle of the euro crisis), whereas Asia was "exciting".

It all has a psychological impact. Studies show that people in Asia's emerging economies tend to be far more optimistic (58%) than Europeans (24%). The new middle classes in Asia are confident their children will be better off financially: for them, the future shines brightly. Europeans, on the other hand, have a hard time feeling upbeat.

With this in mind, changing public perceptions has to be a key part of rebooting the European project. Fixing migration quota issues or calling for a eurozone budget won't do the trick by themelves. Germany's Angela Merkel, it's true, has perhaps little trouble promoting the EU to her voters when she declares: "Germany can do well in the long term only if Europe does well."

Macron had a go at boosting morale this week when he delivered a forceful speech on Europe and democracy in Athens. Europe's past failures, he said, had "corroded the confidence" of its peoples. He called for a rediscovery of the continent's rich culture as a way of drawing nations closer, and he plans to launch a grassroots consultative process in 2018, so citizens can have a better say on the continent's future.

Europe is still licking the wounds of its many crises, and more may yet be on the horizon. But Macron is right to try cast his efforts as an ambitious project of renewal requiring the same kind of energy that Europe's "founding fathers" demonstrated in the 1950s.

Macron's most convincing argument may not be altogether original but it bears repeating: none of today's challenges can be meaningfully addressed by nations acting separately. Europe can be strong only together - a fact Britain's travails now constantly demonstrate. If the EU doesn't built itself up as a true "power", it will end up subjected to the rules and pressures of external actors.

Which brings us back to the global picture. What distinguishes Europe from other regions of the world is, in the end, rather simple. It is found in its unique combination of liberal democracy, individual freedoms and socially minded market economy, with an emphasis on solidarity and pooling sovereignty. You don't find that anywhere else. Whatever Europe's doubts about itself, it remains a highly privileged area compared even with societies whose GDP growth rates far outweigh its own.

The rest of the world can often be more aware of this than we care to be. I'm referring here not only to the migrants and refugees whose movements have made that reality abundantly clear. Rather, look at the results of the recently published, first ever Eurobarometer opinion poll on how other regions, namely Asia, view Europe. Over three-quarters of the Chinese and Indian people polled describe Europe as "a place of stability in a troubled world". Over 80% of Chinese and Indians have a "positive image of the EU" - a much higher figure than for Europeans (69%). According to this survey, Asians identity three key "assets" for Europe: its "economic, industrial and trading power", its "standard of living", and "respect for democracy, human rights and rule of law".

This century may be "Asian", but Europe has cards to play. Rather good ones, too.

* Natalie Nougayrède is a Guardian columnist

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Global power is shifting to Asia - and Europe must adapt to that | Natalie Nougayrède

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In 2012, McKinsey analysts, using data from the University of Groningen, released a striking map showing how the global economic centre of gravity has shifted since AD1. Yes, you read that correctly: since Jesus was a year old. Looking at the map now brings a fresh reminder of how Europe's global position is fast being challenged.

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Post #2 (October 11, 2017)  – Nation-States & FDI

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Post #2 (October 11, 2017)  – Nation-States & FDI

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Nation-states rely on control to continue globalization by nation-states; this depends on control of money, borders, and business. Nations-states are no longer compelling globalization. Over time, cities have gained more sovereign authority and have been acting over things like climate change plans while nations have not acted at all. A rise of city-states would shift power and how money is moved around. Currently how FDI is utilized may not remain. Foreign ownership of firms and assets can already harm countries in the long-term, but we may see more limited options for taxes to increase revenue to provide for the citizens.

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If you'd been born 1,500 years ago in southern Europe, you'd have been convinced that the Roman empire would last forever. It had, after all, been around for 1,000 years. And yet, following a period of economic and military decline, it fell apart. By 476 CE it was gone. To the people living under the mighty empire, these events must have been unthinkable. Just as they must have been for those living through the collapse of the Pharaoh's rule or Christendom or the Ancien Régime.

We are just as deluded that our model of living in 'countries' is inevitable and eternal. Yes, there are dictatorships and democracies, but the whole world is made up of nation-states. This means a blend of 'nation' (people with common attributes and characteristics) and 'state' (an organised political system with sovereignty over a defined space, with borders agreed by other nation-states). Try to imagine a world without countries - you can't. Our sense of who we are, our loyalties, our rights and obligations, are bound up in them.

Which is all rather odd, since they're not really that old. Until the mid-19th century, most of the world was a sprawl of empires, unclaimed land, city-states and principalities, which travellers crossed without checks or passports. As industrialisation made societies more complex, large centralised bureaucracies grew up to manage them. Those governments best able to unify their regions, store records, and coordinate action (especially war) grew more powerful vis-à-vis their neighbours. Revolutions - especially in the United States (1776) and France (1789) - helped to create the idea of a commonly defined 'national interest', while improved communications unified language, culture and identity. Imperialistic expansion spread the nation-state model worldwide, and by the middle of the 20th century it was the only game in town. There are now 193 nation-states ruling the world.

But the nation-state with its borders, centralised governments, common people and sovereign authority is increasingly out of step with the world. And as Karl Marx observed, if you change the dominant mode of production that underpins a society, the social and political structure will change too.

The case against the nation-state is hardly new. Twenty years ago, many were prophesising its imminent demise. Globalisation, said the futurists, was chipping away at nation-states' power to enforce change. Businesses, finance and people could up sticks and leave. The exciting, new internet seemed to herald a borderless, free, identity-less future. And climate change, internet governance and international crime all seemed beyond the nation-state's abilities. It seemed too small to handle international challenges; and too lumbering to tinker with local problems. Voters were quick to spot all this and stopped bothering to vote, making matters worse. In 1995, two books both titled The End of the Nation State - one by the former French diplomat Jean-Marie Guéhenno, the other by the Japanese organisational theorist Kenichi Ohmae - prophesised that power would head up to multinational bodies such as the European Union or the United Nations, or down to regions and cities.

Reports of its death were greatly exaggerated, and the end-of-the-nation-state theory itself died at the turn of the millennium. But now it's back, and this time it might be right.

There were only tens of millions of people online in 1995 when the nation-state was last declared dead. In 2015, that number had grown to around 3 billion; by 2020, it will be more than 4 billion. (And more than 20 billion internet-connected devices.) Digital technology doesn't really like the nation-state. John Perry Barlow's 'Declaration of the Independence of Cyberspace' (1996) sums it up well: the internet is a technology built on libertarian principles. Censorship-free, decentralised and borderless. And now ubiquitous.

This is an enormous pain for the nation-state in all sorts of ways. It's now possible for the British National Health Service to be targeted by ransomware launched in North Korea, and there are few ways to stop it or bring perpetrators to justice. App technology such as Uber and Deliveroo has helped to produce a sudden surge in the gig economy, which is reckoned to cost the government £3.5 billion a year by 2020-1. There are already millions of people using bitcoin and blockchain technologies, explicitly designed to wrestle control of the money supply from central banks and governments, and their number will continue to grow. It's also infusing us with new values, ones that are not always national in nature: a growing number of people see themselves as 'global' citizens.

If a nation cannot defend its border, it ceases to exist in any meaningful way

That's not even the worst of it. On 17 September 2016, the then presidential candidate Donald Trump tweeted: 'A nation without borders is not a nation at all. We WILL Make America Safe Again!' The outcry obscured the fact that Trump was right (in the first half, anyway). Borders determine who's in and who's out, who's a citizen and who's not, who puts in and who takes from the common pot. If a nation cannot defend its border, it ceases to exist in any meaningful way, both as a going concern and as the agreed-upon myth that it is.

Trump's tweet was set against the German chancellor Angela Merkel's offer, one year earlier, of asylum for Syrians. The subsequent movement of people across Europe - EU member states received 1.2 million first-time asylum applications in 2015 - sparked a political and humanitarian crisis, the ramifications of which are still unfolding. It certainly contributed to the United Kingdom's decision to leave the EU. But 1.2 million people is a trickle compared to what's coming. Exact numbers are hard to come by, and notoriously broad, but according to some estimates as many as 200 million people could be climate-change refugees by the middle of the century. If the EU struggles to control its borders when 1.2 million people move, what would happen if 200 million do? The lesson of history - real, long-lens human history - is that people move, and when they do, it's hard to stop.

This is the crux of the problem: nation-states rely on control. If they can't control information, crime, businesses, borders or the money supply, then they will cease to deliver what citizens demand of them. In the end, nation-states are nothing but agreed-upon myths: we give up certain freedoms in order to secure others. But if that transaction no longer works, and we stop agreeing on the myth, it ceases to have power over us.

So what might replace it?

The city-state increasingly looks like the best contender. These are cities with the same independent sovereign authority as nations, places such as Monaco or Singapore. The city-state has recently been feted by Forbes magazine ('A New Era For The City-State?' 2010), Quartz ('Nations Are No Longer Driving Globalisation - Cities Are', 2013), The Boston Globe ('The City-State Returns', 2015) and the Gates Foundation-funded How We Get to Next ('The Rebirth of the City-State', 2016).

The trends that are pinching the nation-state are helping the city-state. In a highly connected, quasi-borderless world, cities are centres of commerce, growth, innovation, technology and finance. According to Bruce Katz, Centennial Scholar at the Brookings Institution in Washington, DC, and co-author (with Jeremy Nowak) of the forthcoming book The New Localism: How Cities Can Thrive in the Age of Populism, the hub-like quality of large cities is especially valuable in the modern economy: 'Innovation happens because of collaboration, and that needs proximity. You need a dense eco-system, and so hyper-connectivity is reinforcing concentration.' Cities also have demographic weight on their side: for the first time in history, in 2014 the majority of humans live in cities.

'Power in the 21st century belongs to the problem-solvers. National governments debate and dither. Cities act, cities do'

This is giving cities more political muscle than ever, which they are increasingly keen to flex. On the issue of climate change, for example - something at which nation-states have failed abysmally - cities are pushing ahead. Since 2006, the C40 initiative has brought together more than 60 cities to promote partnerships and technology to reduce carbon emissions, often going significantly beyond international agreements. In the US, where the federal government appears to have given up on climate change, leadership has fallen to cities.

This shift in power is visible in the way that the mayors of major cities are political heavyweights in their own right: think of Bill de Blasio in New York, Sadiq Khan in London, Virginia Raggi in Rome, Ada Colau in Barcelona. Cities as diverse as Indianapolis and Copenhagen are experimenting with ways of using their own physical, economic and social assets to self-finance city-level investment.

According to Katz, the world is moving beyond a nation-state world. 'We're entering a period where cities have new kinds of power. They have enormous chances to leverage their economic and financial advantages to augment their position and effect change,' he told me. I'm used to thinking about power in binary terms: you either have it or you don't. But according to Katz, we need to re-think because there is something in between, where cities are not fully independent of their nation-states, but not supplicant to them either: 'Cities are not subordinate to nation-states, they are powerful networks of institutions and actors that co-produce the economy. Power in the 21st century belongs to the problem-solvers. National governments debate and mostly dither. Cities act, cities do. Power increasingly comes from the cities up, not handed down from the nation-state.'

For a very long time, power was always found at the city-level. For thousands of years, urban settlements with self-government and city walls provided protection, services in exchange for tithes and taxes, and a set of rules by which to live and trade.

The Hanseatic cities for example - with their own armies and laws - pooled their economic weight to improve their bargaining power with other nations in the early 19th century, and became an economic powerhouse in the Baltic trade route. These cities - which included Bremen and Hamburg - realised they shared much in common, and that their mutual interests might be best served by working together. As today's centres of urban global capitalism, major cities are more similar to each other than the provinces of their own nation-states. They are all hubs of finance, tech innovation, culture, and characterised by high levels of diversity and inward migration. While the UK voted to leave the EU 52/48, London voted to remain 60/40. (Following this vote, there was a short-lived movement for London to declare independence from the rest of the UK.) London, as is often remarked by visitors, is nothing like the rest of the country. The same can certainly be said of the US east- and west-coast behemoths.

Fleeting around from one city to the next, as I sometimes do, feels more Hanseatic League than League of Nations: a system of powerful, trading, networked cities. And the Hanseatic League itself was hardly an oddity. Before that there was Venice of course, and that was merely the most well-known of many independent city-states dotted across what is now Italy in the 10th to 16th centuries, including Florence, Bologna and Turin. But even this is 'recent' in the lifetime of the ancient city-state, which reaches back to Jerusalem, before that Athens, before that Babylon, and all the way back to Ur. Only a few formal city-states still exist today (Monaco, Singapore and the Vatican are the completely sovereign city-states; others, such as Hong Kong, act like one but do not have full sovereignty). It is in fact a historical anomaly that so few of us live in city-states.

Clearly, nation-states won't go down tamely. Carving out a new form of sovereign authority from an existing one is extremely difficult, and is generally frowned upon by the UN. There's a more prosaic reason too. In 2015, 2.1 million residents of Venice in Italy (89 per cent of those who voted) voted for independence in a non-binding referendum. Residents were annoyed that the city pays $20 billion more in tax than it gets back. But Italy will certainly not let Venice and its $20 billion tax go easily.

This is why some of the more exciting endeavours are about creating new cities entirely. Paul Romer, the chief economist at the World Bank, has long been an advocate of creating more chartered cities, essentially city-scale administrative zones that operate, to some extent, independently. Cities are the right size, he argues. Large enough to try something new, but not too big that all your eggs are in one basket. 'A rule to create new rules,' Romer said in a TED talk on the subject in 2009. A chartered city, built on uninhabited land would allow experimentation with new rules and systems to attract investment and people. His particular idea is for nations to work together, like China and the UK over Hong Kong. (Special Economic Zones, which have been around for several years, are similar: essentially geographic areas that are physically secure, and operate different economic laws to the host country, usually to encourage foreign direct investment.)

But even this is not easy, since it would require other countries leasing land, which wouldn't even be full autonomy. There are some models, though, that don't even need that.

Out on the swampy Croatian-Serbian border lies the 7 square kilometres of Gornja Siga. Although currently under Croatian control, this small patch of land is technically unclaimed since Croatia and Serbia both believe it belongs to the other. Due to its unusual legal status - terra nullius - this is where Vít Jedlicka, a 32-year-old libertarian from the Czech Republic, is at work trying to create a libertarian city-sized paradise of freedom, trade and prosperity called 'Liberland'.

Liberland, which is uninhabited but has more than 100,000 online citizens ready to move if Croatia stops blocking inward access, already has the trappings of a city-state. A currency, a constitution, a president and even a football team. Everything has been designed to maximise individual liberty. For a start, anyone can join and leave as they wish. It would be the first state in the world where nothing would be compulsory, where you can do whatever the hell you like, as long as it doesn't physically harm someone else. 'It's a tax heaven, not a tax haven,' Jedlicka told me recently when I interviewed him for my book Radicals Chasing Utopia (2017). Schools, hospitals, pensions, roads, sewage works, rubbish collection and the rest will be provided by the market, if people decide that's what they want and stump up the money.

Like most libertarians, Jedlicka loves modern digital technology, seeing it as extremely helpful to the libertarian cause, weakening the nation-states and helping new models such as his. It might seem like a pipe-dream - no other country has recognised this patch of swampland - were it not for the fact that several influential Silicon Valley-type investors share Jedlicka's libertarian outlook, and are donating to his cause. 'A completely novel situation,' wrote the esteemed Chicago Journal of International Law in a detailed examination of Liberland in July 2016, suggesting it had 'a shot' at statehood.

In a world of seasteads, if you don't like your system of government, simply sail off to another one you do like

The problem for Liberland is that the Croatian police could roll in any time they want, which is precisely what they did when I tried to reach the land while writing my book. This is why, as the American libertarian activist Patri Friedman told me recently when we met in Silicon Valley, the next new cities won't be built on land at all. They will be floating in international waters, beyond the reach of the nation-state and its armies.

In 2008, Patri founded the Seasteading Institute, armed with half a million dollars donated by Peter Thiel, the libertarian billionaire who co-founded PayPal, and a plan to build island cities at sea in an experiment with how to live. '[Seasteading] is the market for countries,' he told me. 'You can only get so far patching and hacking the old system.' And in a flourish worthy of his grandfather Milton, he told me that: 'When you don't have a start-up sector, existing countries suck ... they give you crappy services and no change. You need a start-up sector to threaten them.' In a world of seasteads, if you don't like your system of government, it's simply a matter of sailing off to another one you do like. Just as easy as switching series on Netflix, ordering an Uber, or meeting someone new on Tinder.

Patri thinks every seastead will be different and this will create a market in different types of systems of living that will force everyone to improve performance. Especially if the nation-state starts to crumble. ('We don't care if sea levels rise,' he told me.)

Once again, technology is key: Patri is taking the Silicon Valley mindset and applying it to the nation-state. There are all these things you could now do that didn't exist when our current system of government was invented, he told me. Constant online direct-democracy voting, building smart-cities, using crypto-currencies. And yet we still use a 19th-century model.

Google 'Seastead' and you'll find fantastical designs of floating metropolises, fantasy worlds designed on laptops. It's a pipe-dream. Even the Seasteading Institute's modest target of 150 seasteaders by 2015 was missed.

And yet. This year, Patri together with his institute's communications director Joe Quirk released an exhaustive book on seasteading, and signed a memorandum of understanding with French Polynesia to create the first semi-autonomous seazone in shallow waters off their coast for the first prototype city at sea. Patri told me that they're starting to build very soon, and within a couple of years expect to have a few hundred people living on this floating metropolis just off the coast of Tahiti. I asked him if that was a realistic prospect. Of course! he replied. Look at the property prices in San Francisco. If you could live in a completely new country for less, lots of people would. He told me that he has a waiting list 'of thousands', and plenty of backers - mostly technology entrepreneurs - who see it as an investment opportunity. 'These are people who look at a broken system and say: "What if we designed something better?"'

Nation-states are unlikely to collapse overnight. There are no barbarians at the gate. Even Rome did not collapse in a day. But it evolved during a time of industrialisation, centralised 'command and control' bureaucracies and national loyalty. Modern technology tends in the opposite direction: it's distributed, decentralised and uncontrollable. If our political arrangements are a mirror of the modes of production and assumptions of the time, the future doesn't look rosy for this 19th-century relic. It looks far brighter for the modern, connected, agile city, whether that's on land, on borders, or out in the ocean. And anyway: doesn't it pay to have some experiments going on, just in case?

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The end of a world of nation-states may be upon us - Jamie Bartlett | Aeon Essays

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If you'd been born 1,500 years ago in southern Europe, you'd have been convinced that the Roman empire would last forever. It had, after all, been around for 1,000 years. And yet, following a period of economic and military decline, it fell apart. By 476 CE it was gone.

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Post #3 (October 11, 2017) – GDP & Free Exchange

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Post #3 (October 11, 2017) – GDP & Free Exchange

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Internet or social media platforms such as Google or Facebook guarantee their consumers usage for free, but consumers are not aware of how much data is being collected and what it is worth. Ads, promoted posts, and videos rack up billions of dollars for big sites such as these two. Free exchange or absence of prices goes for concern because that will result in a lack of competition among market competitors. The GDP is measured by market transaction prices and income from advertising on platforms like Google are not calculated; the GDP in 2013 should have been increased by $19bn.

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FACEBOOK, whose users visit for an average of 50 minutes a day, promises members: "It's free and always will be." It certainly sounds like a steal. But it is only one of the bargains that apparently litter the internet: YouTube watchers devour 1bn hours of videos every day, for instance. These free lunches do come at a cost; the problem is calculating how much it is. Because consumers do not pay for many digital services in cash, beyond the cost of an internet connection, economists cannot treat these exchanges like normal transactions. The economics of free are different.

Unlike conventional merchants, companies like Facebook and Google have their users themselves produce value. Information and pictures uploaded to social networks draw others to the site. Online searches, selections and "likes" teach algorithms what people want. (Now you've bought "The Communist Manifesto", how about a copy of "Das Kapital"?)

The prevalence of free services is partly a result of history. In the early years of the internet, consumers became used to getting stuff for nothing. They have little idea of how much their data are worth; since digital companies have access to billions of people, the value of one person's data is tiny anyway. More fundamentally, scarcity is not a constraint in the digital world as it is in the physical one. Data are both inexhaustible and super-cheap to transport. In 1993 MCI Mail was charging people 50 cents for the first 500 characters of a digital message, increasing by ten cents for each extra 500. The internet slashed that price to zero. Charging would have been impractical, so small is the marginal cost.

Users may pay nothing, but companies like Google and Facebook have fixed costs to cover: engineers, data centres, etc. To make money, they squeeze their users indirectly, by charging companies to put appropriate advertisements in front of captive eyeballs. In the second quarter of 2017, Facebook eked an average of $4.65 out of each of its users by peppering screens with ads and promoted posts. (By comparison, just eight cents came from payments and other fees, mainly from people paying for stuff within virtual games.)

In the absence of prices, economists struggle to work out what people are getting back when they barter their data and attention for digital services. Some evidence suggests that they are doing rather well. A recent study by Erik Brynjolfsson, Felix Eggers and Avinash Gannameneni of the Massachusetts Institute of Technology offered people different cash amounts in exchange for giving up Facebook for a month. Based on the responses, they then estimated its average annual value to the consumer at around $750. A simpler survey in the same study (without real cash offers) suggested that on average people value free search engines at $16,600 per year, maps at $2,800 and video at $900.

This sounds like a wonderful deal for the consumer, but it generates problems elsewhere. Take taxes. Professionals are not allowed to evade tax by selling their services for benefits in kind, so why should consumers not be taxed if they are paid for their data in the form of services? Statisticians also struggle in a post-price world. GDP is mostly measured by transactions at market prices. A recent study by Leonard Nakamura of the Federal Reserve Bank of Philadelphia and Jon Samuels and Rachel Soloveichik of the Bureau of Economic Analysis used the amount spent on advertising to estimate uncounted output, and calculated that in 2013 American GDP should have been $19bn higher than reported.

Privacy activists also worry. Consumers tend to respond much more strongly to "free" offers than to prices that are only fractionally higher than zero. When Amazon first offered free shipping in European countries, orders surged-but not in France, where by mistake it charged around ten cents. The activists' concern is that the "free" label fosters poor decisions, making people, for example, reveal more about themselves than they would in a more formal exchange. Researchers talk of the "privacy paradox": when asked, people say that they care much more about their privacy than their actions would suggest.

The free economy also troubles competition authorities. Excessive market power can be defined as the ability to raise prices above what would be charged in a competitive market. With no prices to compare, and other options only a click away, companies such as Google seem to operate in an environment of cut-throat competition. It is naive to think so. Consumers are more captive than the low cost of switching might imply. Google, for example, commands a market share for internet search of over 90% in most countries in the European Union, where antitrust authorities in June fined it €2.4bn ($2.7bn) for promoting its own comparison shopping services above its competitors'. Its services may have been free, but the trustbusters judged that its market power was curbing consumers' choices. In the absence of prices, lack of competition will show up in other ways: demanding more information from users than they want to give, for example; or irritating them by stuffing their service chock-full of adverts.

No such thing as a free exchange

Opinion is divided on whether the free economy needs fixing, and if so, how. In his book "Who Owns the Future?", Jaron Lanier suggests that tiny payments for digital contributions might correct yet another problem, a misallocation of labour. If companies paid people for useful data, rather than mopping up what they leave behind as they use online services, then prices could nudge people towards more productive online activity. Others advocate tougher regulation, mandating that consumers have the option of paying for a version of their social-media platforms free of advertisements and digital profiles. Neither seems imminent, and each comes with its own problems. But both would at least force people to start counting the cost of that priceless lunch.

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FACEBOOK, whose users visit for an average of 50 minutes a day, promises members: "It's free and always will be." It certainly sounds like a steal. But it is only one of the bargains that apparently litter the internet: YouTube watchers devour 1bn hours of videos every day, for instance.

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Post #4 (October 11, 2017) – Hong Kong & the Invisible Hand

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Post #4 (October 11, 2017) – Hong Kong & the Invisible Hand

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Hong Kong needed a plan for sustainable growth to improve collective self-interest and social regulation to fix their issues of “political unrest” (Monnery) and economic issues such as heavy taxes and heavy debt. Adam Smith’s idea of the invisible hand emerged around the time that Cowperthwaite was under pressure to choose either heavy government intervention or laissez fare. The idea of the unobservable market force that helps supply & demand of goods in a free market reach equilibrium would help with this and avoid the need for regulation. Therefore, to liberalize and privatize the government would result in sustainable growth.

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Architect of Prosperity: Sir John Cowperthwaite and the Making of Hong Kong. By Neil Monnery. London Publishing Partnership; 337 pages; £24.50.

DURING the 1960s, governments were responding to political unrest and economic challenges with nationalisation, centralised planning and public spending (financed by heavy taxes and debt). There was intense pressure for Sir John Cowperthwaite, the financial secretary of Hong Kong, to join the crowd.

Civil servants in Whitehall had been urging their counterparts in Hong Kong to introduce high taxes for some time. Locals demanded spending to address a lack of housing for crowds of poor immigrants fleeing the horrors of post-revolutionary China, and a territory-wide shortage of drinkable water. Meanwhile, the territory's export-driven economy was threatened by rising global tariffs, prompting demands for public incentives to reorient production towards the domestic market.

A new biography of Cowperthwaite by Neil Monnery, a former management consultant, tells of a man who replied to these demands with a qualified "no", and in the process became that most unusual of things: a bureaucrat hero to libertarians. His approach would subsequently be labelled "positive non-interventionism", meaning governance stopping just short of laissez-faire. Public housing would be funded, but only for tiny flats; reservoirs would be built, but users would be charged. Much of the rest was left to individuals and businesses to sort out, unfettered by government directives. "Money," Cowperthwaite said, should be left "to fructify in the pockets of taxpayers".

Cowperthwaite's ability to resist bigger government was born in a lost era. He was educated in classics and economics at a time when the insights of Adam Smith prevailed. That gave him the foundation to debate with free-spending colleagues influenced by John Maynard Keynes.

In 1945, he arrived in a Hong Kong in ruins from a brutal Japanese occupation. A combined military-colonial administration engaged heavily in economic management, and Cowperthwaite's early jobs included managing the trade in food and raw materials and administering price controls, roles that defined a heavy government hand. But he knew that the territory's lack of natural resources meant that post-crisis prosperity depended on its ability to attract entrepreneurs and capital.

That meant government's role was to provide freedom rather than help. Requests by industry for subsidies were routinely rejected. So too was deficit government financing, which could merely push costs to a future generation and make the territory vulnerable to financial upheaval. Some of his ideas were radical: to ensure that temporary fluctuations in business conditions were not used to justify government controls, he banned the collection of macroeconomic statistics.

"We suffer a great deal today from the bogus certainties and precisions of the pseudo-sciences which include all the social sciences including economics," was his blunt appraisal. "I myself tend to mistrust the judgment of anyone not involved in the actual process of risk-taking." This faith was rewarded. As industries such as cotton spinning, enamelware and wigs declined and Cowperthwaite declined to offer assistance, businesses shifted their attention to promising areas such as toy and electronics production, and then finance. Migrants found work in the expanding industries, becoming a cog in a productive engine rather than merely a cost.

When Cowperthwaite stood down in 1971 his tenure was reckoned a huge success, but that provided only limited protection for his policies. The embargo on data collection was reversed by his successor. Subsequent administrations, both British and Chinese, whittled away the restraints on government intervention.

One persistent objection to limited government particularly rankled Cowperthwaite-that it was callous. He was convinced that "the rapid growth of the economy...produces a rapid and substantial redistribution of income [and] makes it possible to assist more generously those who are not, from misfortune temporary or permanent, sharing in the general advance. The history [of Hong Kong] demonstrates this conclusively." As that history becomes increasingly remote, a biography of a key architect becomes ever more valuable. There are few other examples.

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Meet the invisible hand behind Hong Kong's rise

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Architect of Prosperity: Sir John Cowperthwaite and the Making of Hong Kong. By Neil Monnery. London Publishing Partnership; 337 pages; £24.50. DURING the 1960s, governments were responding to political unrest and economic challenges with nationalisation, centralised planning and public spending (financed by heavy taxes and debt).

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Post #5 (October 11, 2017) – WTO & Economic Globalization

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Post #5 (October 11, 2017) – WTO & Economic Globalization

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Trump’s presidency and the Trump Administration has continuously left the WTO on edge in fear that the rules-based system of trade will no longer be relevant and America will pull out from the WTO because its ideals were no longer the same from when America joined. As noted in lecture, the WTO is a huge part of economic globalization aiming to stabilize macroeconomics and governance by currency exchange regulations and acting in the best interest of the global orders. If America were to exit the WTO, we would lose trade with other countries as well as jobs in profitable companies.

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EIGHT months into Donald Trump's presidency, the rules-based system of global trade remains intact. Threats to impose broad tariffs have come to nothing. Some ominous investigations into whether imports into America are a national-security threat are on hold. Mr Trump looks less a hard man than a boy crying wolf. All the same, supporters of the World Trade Organisation (WTO), the guardian of that rules-based system, are worried. Other dangers are lurking. There is more than one way to undermine an institution.

The WTO is meant to be a forum for reaching deals and resolving disputes. But all 164 members must agree to new rules, and agreement has largely been elusive. So if members do not like today's rules, as interpreted by judges, they have little prospect of negotiating better ones. That puts pressure on the WTO's judicial function, the bit that has been working fairly well.

Trouble is brewing at the WTO's court of appeals. It is meant to have seven serving judges, but has only five and by the end of the year will have just four. The Americans refuse to start the process of filling the spots, citing systemic concerns. What seemed an arcane procedural row has become what some call a "crisis".

This tension comes at a bad time. Over recent years the number of disputes has risen both in number (see chart) and complexity. The court is already dealing with a backlog of cases, which are supposed to take two months. One appeal from the EU, relating to Airbus, an aircraft manufacturer, is almost a year old. By the end of 2019 the terms of three more judges will expire, leaving only one. Three are needed to rule on any individual case. If the gaps are not filled, the system risks collapse.

Notionally, the Americans object to two procedural irregularities, including the way the most recently departed judges left. But according to Brendan McGivern, a lawyer in Geneva, neither is a "show-stopping" problem. And on September 18th Robert Lighthizer, America's usually tight-lipped trade representative, outlined a bigger agenda. To a Washington room packed with foreign-policy wonks, he complained that decisions from WTO judges had "diminished" what America had bargained for and imposed obligations it had not agreed to when it joined the WTO.

These are long-standing and uniquely American concerns. Panels at the WTO have repeatedly ruled that the way it calculates defensive duties on imports breaks the rules. Mr Lighthizer sees this as undermining America's ability to protect itself from unfair trade. Many in Washington accuse the WTO's lawyers of overstepping their remit, filling in the gaps where the original rules are silent.

So the American administration seems in effect to be using the judicial appointments to hold the WTO hostage. Oddly, though, it has been vague about what it wants. Mr Lighthizer's past offers clues. According to the Wall Street Journal, when he advised Bob Dole, a presidential candidate in 1996, he recommended that a panel of American judges should review any findings against America, which would threaten to quit the WTO after three duds. This week Mr Lighthizer spoke fondly of the system that preceded the WTO, under which members could block panel rulings.

Bullying the appellate body into ruling in favour of America would undermine its usefulness. If members no longer think that they will get a fair hearing, they are more likely to take matters into their own hands. Mr McGivern worries that an American fix to the perceived problem of judicial overreach could undermine the rules-based system, by tampering with the independence of the appellate body.

Some signs suggest that Mr Trump's administration is not planning to ditch the WTO entirely. It is pursuing two disputes initiated by Barack Obama. And Mr Lighthizer has said that if he uncovers a breach of China's commitments under WTO rules, he will file a dispute. But he expressed doubt about the WTO's ability either to deal with Chinese mercantilism or to reach any agreements at its next ministerial meeting in December.

Mr Trump's tough-cop trade policy appears to be to threaten tariffs unless he gets his way. Mr Lighthizer's is subtler but perhaps more menacing. By combining indifference with a ploy to starve the WTO of judges, he is gambling that the WTO needs America more than America needs it. In both cases the risks are the same: that the rule book will become irrelevant.
Correction (September 22nd): A previous version of this article misstated the number of judges in the WTO's court of appeals due to retire in 2019. This has been corrected online.

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America holds the World Trade Organisation hostage

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EIGHT months into Donald Trump's presidency, the rules-based system of global trade remains intact. Threats to impose broad tariffs have come to nothing. Some ominous investigations into whether imports into America are a national-security threat are on hold. Mr Trump looks less a hard man than a boy crying wolf.

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Post #10 (November 30, 2017) - Labour Party & Keynesian Times

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Post #10 (November 30, 2017) - Labour Party & Keynesian Times

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The environmental crisis from the 20th century to today calls us to create and maintain sustainable economic growth we need to remove neoliberalism and Keynesianism to begin a new approach starting with sufficient privacy and public luxury. Public amenities will decrease deprivation for the public and create controlled commons. This relates to the tragedy of the commons by identifying the fact that if everyone acquired luxurious things, this would limit space and deprive others of space. This also relates to the course by discussing neoliberalism and Keynesian ideas as redundant. An increase in land increases funds which can increase income.

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We are still living in the long 20th century. We are stuck with its redundant technologies: the internal combustion engine, thermal power plants, factory farms. We are stuck with its redundant politics: unfair electoral systems, their capture by funders and lobbyists, the failure to temper representation with real participation.

And we are stuck with its redundant economics: neoliberalism, and the Keynesianism still proposed by its opponents. While the latter system worked very well for 30 years or more, it is hard to see how it can take us through this century, not least because the growth it seeks to sustain smacks headlong into the environmental crisis.

Sustained economic growth on a planet that is not growing means crashing through environmental limits: this is what we are witnessing, worldwide, today. A recent paper in Nature puts our current chances of keeping global heating to less than 1.5C at just 1%, and less than 2C at only 5%. Why? Because while the carbon intensity of economic activity is expected to decline by 1.9% a year, global per capita GDP is expected to grow by 1.8%. Almost all investment in renewables and efficiency is cancelled out. The index that was supposed to measure our prosperity, instead measures our progress towards ruin.

But the great rupture that began in 2008 offers a chance to change all this. The challenge now is to ensure that the new political movements threatening established power in Britain and elsewhere create the space not for old ideas (such as 20th-century Keynesianism) but for a new politics, built on new economic and social foundations.

There may be a case for one last hurrah for the old model: a technological shift that resembles the second world war's military Keynesianism. In 1941 the US turned the entire civilian economy around on a dime: within months, car manufacturers were producing planes, tanks and ammunition. A determined government could do something similar in response to climate breakdown: a sudden transformation, replacing our fossil economy. But having effected such a conversion, it should, I believe, then begin the switch to a different economic model.

Land value tax and community right to buy help to create what I call a politics of belonging

The new approach could start with the idea of private sufficiency and public luxury. There is not enough physical or environmental space for everyone to enjoy private luxury: if everyone in London acquired a tennis court, a swimming pool, a garden and a private art collection, the city would cover England. Private luxury shuts down space, creating deprivation. But magnificent public amenities - wonderful parks and playgrounds, public sports centres and swimming pools, galleries, allotments and public transport networks - create more space for everyone at a fraction of the cost.

Wherever possible, such assets should be owned and managed by neither state nor market, but by communities, in the form of commons. A commons in its true form is a non-capitalist system in which a resource is controlled in perpetuity by a community for the shared and equal benefit of its members. A possible model is the commons transition plan commissioned by the Flemish city of Ghent.

Land value taxation also has transformative potential. It can keep the income currently siphoned out of our pockets in the form of rent - then out of the country and into tax havens - within our hands. It can reduce land values, bringing down house prices. While local and national government should use some of the money to fund public services, the residue can be returned to communities.

Couple this with a community right to buy, which enables communities to use this money to acquire their own land, with local commons trusts that possess powers to assemble building sites, and with a new right for prospective buyers and tenants to plan their own estates, and exciting things begin to happen. This could be a formula for meeting housing need, delivering public luxury and greatly enhancing the sense of community, self-reliance and taking back control. It helps to create what I call the politics of belonging.

But it doesn't stop there. The rents accruing to commons trusts could be used to create a local version of the citizens' wealth funds (modelled on the sovereign wealth funds in Alaska and Norway) proposed by Angela Cummine and Stewart Lansley. The gain from such funds could be distributed in the form of a local basic income.

And the money the government still invests? To the greatest extent possible, I believe it should be controlled by participatory budgeting. In the Brazilian city of Porto Alegre, the infrastructure budget is allocated by the people: around 50,000 citizens typically participate. The results - better water, sanitation, health, schools and nurseries - have been so spectacular that large numbers of people now lobby the city council to raise their taxes. When you control the budget, you can see the point of public investment.

In countries such as the UK, we could not only adopt this model, but extend it beyond the local infrastructure budget to other forms of local and even national spending. The principle of subsidiarity - devolving powers to the smallest political unit that can reasonably discharge them - makes such wider democratic control more feasible.

All this would be framed within a system such as Kate Raworth's doughnut economics, which instead of seeking to maximise growth sets a lower threshold of wellbeing, below which no one should fall, and an upper threshold of environmental limits that economic life should not transgress. A participatory economics could be accompanied by participatory politics, involving radical devolution and a fine-grained democratic control over the decisions affecting our lives.

Who could lead this global shift? It could be the UK Labour party. It is actively seeking new ideas. It knows that the bigger the change it offers, the greater the commitment of the volunteers on which its insurgency relies: the " big organising " model that transformed Labour's fortunes at the last election requires a big political offer.

Could Labour be the party that brings the long 20th century to an end? I believe, despite its Keynesian heritage, it could. Now, more than at any other time in the past few decades, it has a chance to change the world.

* George Monbiot is a Guardian columnist

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How Labour could lead the global economy out of the 20th century | George Monbiot

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We are still living in the long 20th century. We are stuck with its redundant technologies: the internal combustion engine, thermal power plants, factory farms. We are stuck with its redundant politics: unfair electoral systems, their capture by funders and lobbyists, the failure to temper representation with real participation.

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Post #7 (November 30, 2017) - Burst of Economic Growth

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Post #7 (November 30, 2017) - Burst of Economic Growth

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The International Monetary Fund finds that global markets and economies rising in unison while they usually compete as uneven elements. For the past ten years, countries’ economy’s have not grown as one but almost every major developed country is growing simultaneously. The International Monetary Fund works to stabilize the economy and international trade which makes their meeting this fall about the rising economies very important. Regarding the EU, the pending exit of Britain is taking a toll on their economy. The EU is a big part of economic globalization to stabilize macroeconomics and unite the global orders.

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"In terms of positive cycles, it is difficult to find very many precedents here," said Brian Coulton, the chief economist at Fitch, the debt ratings agency. "It is the strongest growth we have seen since 2010."

In Japan, a reform-minded government and aggressive action by the central bank have pushed growth to 1.5 percent - up from 0.3 percent three years ago.

In Europe, strong domestic demand in Germany and robust recoveries in countries like Spain, Portugal and Italy are expected to spur 2.2 percent growth in the eurozone. That would be more than double its average annual growth in the previous five years.

Aggressive infrastructure spending by China; bold economic reforms by countries including Brazil, Indonesia and India; and rising commodities prices (helping countries such as Russia) have spurred growth in emerging markets.

And in the United States, despite doubts about President Trump's ability to pass a major tax bill, the economy and financial markets chug along.

In fact, one of the few large economies not following an upward path is Britain, whose pending exit from the European Union is taking a toll. Having grown at an average annual pace of just over 2 percent from 2012 to 2016, the British economy is expanding just 1.5 percent this year.

Still, the good news may result in some backslapping this week for policy makers and regulators more accustomed in recent years to putting out financial fires than basking in improved economic well-being.

"The meetings will celebrate this period of synchronized economic growth and calm financial markets," said Mohamed A. El-Erian, chief economic adviser to the fund giant Allianz.

There are plenty of reasons to hold off on uncorking the Champagne. Wage gains have been slow in coming. And most experts think the current sweet spot of positive growth, low inflation and accommodating central bank policies could be fleeting.

Mr. El-Erian, for example, said he was nervous about several possibilities: that global growth could taper off; that prices of stocks, bonds and other financial assets are unsustainably high; and, most important, that markets might not be prepared when central banks reverse their efforts to stimulate economies by keeping interest rates low and buying huge sums of assets.

But for the time being, investors, economists and policy officials point to a growing quantity of data that highlight the power of this recent burst of economic growth.

Business sentiment in Japan and Europe is at 10-year highs. And last month, manufacturing activity in the United States hit its highest level in 13 years.

A big driver for growth in emerging markets, said Mr. Coulton, the economist at Fitch, has been Chinese imports, which are up more than 10 percent this year. China is the world's largest consumer of raw materials such as oil, steel and copper, and it is increasingly buying them from emerging economies.

Global portfolio managers like Rajiv Jain of GQG Partners, who oversees $9 billion, have been quick to capitalize, snapping up shares of Russian banks and French construction companies.

"The global economy looks pretty darn good," Mr. Jain said.

But with interest rates still historically low, investors have been pushing into even riskier assets, including the bonds of emerging-market economies, to eke out returns.

Some countries are taking advantage of the frenzy by issuing more debt. Argentina recently sold so-called century bonds, which don't come due for 100 years. Jordan and Ukraine issued government bonds that mature in 30 years and 15 years, respectively.

Susan Lund, an expert on global financial trends at the McKinsey Global Institute, said these types of investments from global asset managers tended to be longer term - and thus less destabilizing - than the so-called hot money from commercial banks that contributed to recent debt crises in the United States and Europe.

Are things getting too hot?

"We are in a boom today, but we should not forget that the financial system is still relatively unstable," said Jim Reid, a credit strategist at Deutsche Bank.

Mr. Reid, who spices up his market analyses by regaling clients with pop songs on the piano, recently published a detailed study on what he expects will be the causes of the next global financial crisis.

Pick your poison: an abrupt slowdown in China, the rise of populism, debt problems in Japan or an ugly outcome to Britain's move to leave the European Union.

His overriding worry, though, is that investors and policy makers aren't prepared for what will happen when global central banks put a halt to their easy-money policies.

Since the 2008 crisis, Mr. Reid noted, central banks have accumulated more than $14 trillion in assets - an amount that exceeds the annual output of China by $3 trillion.

What happens when the central banks all start to sell?

"This is unprecedented," Mr. Reid said. "And no one knows what the outcome will be."

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The Economy Is Humming. Bankers Are Cheering. What Could Go Wrong?

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"In terms of positive cycles, it is difficult to find very many precedents here," said Brian Coulton, the chief economist at Fitch, the debt ratings agency. "It is the strongest growth we have seen since 2010." In Japan, a reform-minded government and aggressive action by the central bank have pushed growth to 1.5 percent - up from 0.3 percent three years ago.

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The World Meteorological Organization announced that the Carbon dioxide concentration has reached a record high (four hundred and ten parts per million) this past April. World leaders met in 2015 to discuss that volumes had reached outrageous numbers. Republicans and Democrats have publicized clean coal to save mining jobs and to protect the environment through the American Coalition for Clean Coal Electricity. This relates to our case study in this course, deciding if mining is a positive or negative edition to our environment. Carbon removal is contradicting and possible impossible to do but also may be impossible to do without.

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CO₂ could soon reach levels that, it's widely agreed, will lead to catastrophe.

Carbon Engineering, a company owned in part by Bill Gates, has its headquarters on a spit of land that juts into Howe Sound, an hour north of Vancouver. Until recently, the land was a toxic-waste site, and the company's equipment occupies a long, barnlike building that, for many years, was used to process contaminated water. The offices, inherited from the business that poisoned the site, provide a spectacular view of Mt. Garibaldi, which rises to a snow-covered point, and of the Chief, a granite monolith that's British Columbia's answer to El Capitan. To protect the spit against rising sea levels, the local government is planning to cover it with a layer of fill six feet deep. When that's done, it's hoping to sell the site for luxury condos.

Adrian Corless, Carbon Engineering's chief executive, who is fifty-one, is a compact man with dark hair, a square jaw, and a concerned expression. "Do you wear contacts?" he asked, as we were suiting up to enter the barnlike building. If so, I'd have to take extra precautions, because some of the chemicals used in the building could cause the lenses to liquefy and fuse to my eyes.

Inside, pipes snaked along the walls and overhead. The thrum of machinery made it hard to hear. In one corner, what looked like oversized beach bags were filled with what looked like white sand. This, Corless explained over the noise, was limestone-pellets of pure calcium carbonate.

Corless and his team are engaged in a project that falls somewhere between toxic-waste cleanup and alchemy. They've devised a process that allows them, in effect, to suck carbon dioxide out of the air. Every day at the plant, roughly a ton of CO ₂ that had previously floated over Mt. Garibaldi or the Chief is converted into calcium carbonate. The pellets are subsequently heated, and the gas is forced off, to be stored in cannisters. The calcium can then be recovered, and the process run through all over again.

"If we're successful at building a business around carbon removal, these are trillion-dollar markets," Corless told me.

This past April, the concentration of carbon dioxide in the atmosphere reached a record four hundred and ten parts per million. The amount of CO ₂ in the air now is probably greater than it's been at any time since the mid-Pliocene, three and a half million years ago, when there was a lot less ice at the poles and sea levels were sixty feet higher. This year's record will be surpassed next year, and next year's the year after that. Even if every country fulfills the pledges made in the Paris climate accord-and the United States has said that it doesn't intend to-carbon dioxide could soon reach levels that, it's widely agreed, will lead to catastrophe, assuming it hasn't already done so.

Carbon-dioxide removal is, potentially, a trillion-dollar enterprise because it offers a way not just to slow the rise in CO ₂ but to reverse it. The process is sometimes referred to as "negative emissions": instead of adding carbon to the air, it subtracts it. Carbon-removal plants could be built anywhere, or everywhere. Construct enough of them and, in theory at least, CO ₂ emissions could continue unabated and still we could avert calamity. Depending on how you look at things, the technology represents either the ultimate insurance policy or the ultimate moral hazard.

Carbon Engineering is one of a half-dozen companies vying to prove that carbon removal is feasible. Others include Global Thermostat, which is based in New York, and Climeworks, based near Zurich. Most of these owe their origins to the ideas of a physicist named Klaus Lackner, who now works at Arizona State University, in Tempe, so on my way home from British Columbia I took a detour to visit him. It was July, and on the day I arrived the temperature in the city reached a hundred and twelve degrees. When I got to my hotel, one of the first things I noticed was a dead starling lying, feet up, in the parking lot. I wondered if it had died from heat exhaustion.

Lackner, who is sixty-five, grew up in Germany. He is tall and lanky, with a fringe of gray hair and a prominent forehead. I met him in his office at an institute he runs, the Center for Negative Carbon Emissions. The office was bare, except for a few New Yorker cartoons on the theme of nerd-dom, which, Lackner told me, his wife had cut out for him. In one, a couple of scientists stand in front of an enormous whiteboard covered in equations. "The math is right," one of them says. "It's just in poor taste."

In the late nineteen-seventies, Lackner moved from Germany to California to study with George Zweig, one of the discoverers of quarks. A few years later, he got a job at Los Alamos National Laboratory. There, he worked on fusion. "Some of the work was classified," he said, "some of it not."

Fusion is the process that powers the stars and, closer to home, thermonuclear bombs. When Lackner was at Los Alamos, it was being touted as a solution to the world's energy problem; if fusion could be harnessed, it could generate vast amounts of carbon-free power using isotopes of hydrogen. Lackner became convinced that a fusion reactor was, at a minimum, decades away. (Decades later, it's generally agreed that a workable reactor is still decades away.) Meanwhile, the globe's growing population would demand more and more energy, and this demand would be met, for the most part, with fossil fuels.

"I realized, probably earlier than most, that the claims of the demise of fossil fuels were greatly exaggerated," Lackner told me. (In fact, fossil fuels currently provide about eighty per cent of the world's energy. Proportionally, this figure hasn't changed much since the mid-eighties, but, because global energy use has nearly doubled, the amount of coal, oil, and natural gas being burned today is almost two times greater.)

One evening in the early nineties, Lackner was having a beer with a friend, Christopher Wendt, also a physicist. The two got to wondering why, as Lackner put it to me, "nobody's doing these really crazy, big things anymore." This led to more questions and more conversations (and possibly more beers).

Eventually, the two produced an equation-dense paper in which they argued that self-replicating machines could solve the world's energy problem and, more or less at the same time, clean up the mess humans have made by burning fossil fuels. The machines would be powered by solar panels, and as they multiplied they'd produce more solar panels, which they'd assemble using elements, like silicon and aluminum, extracted from ordinary dirt. The expanding collection of panels would produce ever more power, at a rate that would increase exponentially. An array covering three hundred and eighty-six thousand square miles-an area larger than Nigeria but, as Lackner and Wendt noted, "smaller than many deserts"-could supply all the world's electricity many times over.

This same array could be put to use scrubbing carbon dioxide from the atmosphere. According to Lackner and Wendt, the power generated by a Nigeria-size solar farm would be enough to remove all the CO ₂ emitted by humans up to that point within five years. Ideally, the CO ₂ would be converted to rock, similar to the white sand produced by Carbon Engineering; enough would be created to cover Venezuela in a layer a foot and a half deep. (Where this rock would go the two did not specify.)

Lackner let the idea of the self-replicating machine slide, but he became more and more intrigued by carbon-dioxide removal, particularly by what's become known as "direct air capture."

"Sometimes by thinking through this extreme end point you learn a lot," he said. He began giving talks and writing papers on the subject. Some scientists decided he was nuts, others that he was a visionary. "Klaus is, in fact, a genius," Julio Friedmann, a former Principal Deputy Assistant Secretary of Energy and an expert on carbon management, told me.

In 2000, Lackner received a job offer from Columbia University. Once in New York, he pitched a plan for developing a carbon-sucking technology to Gary Comer, a founder of Lands' End. Comer brought to the meeting his investment adviser, who quipped that Lackner wasn't looking for venture capital so much as "adventure capital." Nevertheless, Comer offered to put up five million dollars. The new company was called Global Research Technologies, or G.R.T. It got as far as building a small prototype, but just as it was looking for new investors the financial crisis hit.

"Our timing was exquisite," Lackner told me. Unable to raise more funds, the company ceased operations. As the planet continued to warm, and carbon-dioxide levels continued to climb, Lackner came to believe that, unwittingly, humanity had already committed itself to negative emissions.

"I think that we're in a very uncomfortable situation," he said. "I would argue that if technologies to pull CO ₂ out of the environment fail then we're in deep trouble."

Lackner founded the Center for Negative Carbon Emissions at A.S.U. in 2014. Most of the equipment he dreams up is put together in a workshop a few blocks from his office. The day I was there, it was so hot outside that even the five-minute walk to the workshop required staging. Lackner delivered a short lecture on the dangers of dehydration and handed me a bottle of water.

In the workshop, an engineer was tinkering with what looked like the guts of a foldout couch. Where, in the living-room version, there would have been a mattress, in this one was an elaborate array of plastic ribbons. Embedded in each ribbon was a powder made from thousands upon thousands of tiny amber-colored beads. The beads, Lackner explained, could be purchased by the truckload; they were composed of a resin normally used in water treatment to remove chemicals like nitrates. More or less by accident, Lackner had discovered that the beads could be repurposed. Dry, they'd absorb carbon dioxide. Wet, they'd release it. The idea was to expose the ribbons to Arizona's thirsty air, and then fold the device into a sealed container filled with water. The CO ₂ that had been captured by the powder in the dry phase would be released in the wet phase; it could then be piped out of the container, and the whole process re-started, the couch folding and unfolding over and over again.

Lackner has calculated that an apparatus the size of a semi trailer could remove a ton of carbon dioxide per day, or three hundred and sixty-five tons a year. The world's cars, planes, refineries, and power plants now produce about thirty-six billion tons of CO ₂ annually, so, he told me, "if you built a hundred million trailer-size units you could actually keep up with current emissions." He acknowledged that the figure sounded daunting. But, he noted, the iPhone has been around for only a decade or so, and there are now seven hundred million in use. "We are still very early in this game," he said.

The way Lackner sees things, the key to avoiding "deep trouble" is thinking differently. "We need to change the paradigm," he told me. Carbon dioxide should be regarded the same way we view other waste products, like sewage or garbage. We don't expect people to stop producing waste. ("Rewarding people for going to the bathroom less would be nonsensical," Lackner has observed.) At the same time, we don't let them shit on the sidewalk or toss their empty yogurt containers into the street.

"If I were to tell you that the garbage I'm dumping in front of your house is twenty per cent less this year than it was last year, you would still think I'm doing something intolerable," Lackner said.

One of the reasons we've made so little progress on climate change, he contends, is that the issue has acquired an ethical charge, which has polarized people. To the extent that emissions are seen as bad, emitters become guilty. "Such a moral stance makes virtually everyone a sinner, and makes hypocrites out of many who are concerned about climate change but still partake in the benefits of modernity," he has written. Changing the paradigm, Lackner believes, will change the conversation. If CO ₂ is treated as just another form of waste, which has to be disposed of, then people can stop arguing about whether it's a problem and finally start doing something.

Carbon dioxide was "discovered," by a Scottish physician named Joseph Black, in 1754. A decade later, another Scotsman, James Watt, invented a more efficient steam engine, ushering in what is now called the age of industrialization but which future generations may dub the age of emissions. It is likely that by the end of the nineteenth century human activity had raised the average temperature of the earth by a tenth of a degree Celsius (or nearly two-tenths of a degree Fahrenheit).

As the world warmed, it started to change, first gradually and then suddenly. By now, the globe is at least one degree Celsius (1.8 degrees Fahrenheit) warmer than it was in Black's day, and the consequences are becoming ever more apparent. Heat waves are hotter, rainstorms more intense, and droughts drier. The wildfire season is growing longer, and fires, like the ones that recently ravaged Northern California, more numerous. Sea levels are rising, and the rate of rise is accelerating. Higher sea levels exacerbated the damage from Hurricanes Harvey, Irma, and Maria, and higher water temperatures probably also made the storms more ferocious. "Harvey is what climate change looks like," Eric Holthaus, a meteorologist turned columnist, recently wrote.

Meanwhile, still more warming is locked in. There's so much inertia in the climate system, which is as vast as the earth itself, that the globe has yet to fully adjust to the hundreds of billions of tons of carbon dioxide that have been added to the atmosphere in the past few decades. It's been calculated that to equilibrate to current CO ₂ levels the planet still needs to warm by half a degree. And every ten days another billion tons of carbon dioxide are released. Last month, the World Meteorological Organization announced that the concentration of carbon dioxide in the atmosphere jumped by a record amount in 2016.

No one can say exactly how warm the world can get before disaster-the inundation of low-lying cities, say, or the collapse of crucial ecosystems, like coral reefs-becomes inevitable. Officially, the threshold is two degrees Celsius (3.6 degrees Fahrenheit) above preindustrial levels. Virtually every nation signed on to this figure at a round of climate negotiations held in Cancún in 2010.

Meeting in Paris in 2015, world leaders decided that the two-degree threshold was too high; the stated aim of the climate accord is to hold "the increase in the global average temperature to well below 2°C" and to try to limit it to 1.5°C. Since the planet has already warmed by one degree and, for all practical purposes, is committed to another half a degree, it would seem impossible to meet the latter goal and nearly impossible to meet the former. And it is nearly impossible, unless the world switches course and instead of just adding CO ₂ to the atmosphere also starts to remove it.

The extent to which the world is counting on negative emissions is documented by the latest report of the Intergovernmental Panel on Climate Change, which was published the year before Paris. To peer into the future, the I.P.C.C. relies on computer models that represent the world's energy and climate systems as a tangle of equations, and which can be programmed to play out different "scenarios." Most of the scenarios involve temperature increases of two, three, or even four degrees Celsius-up to just over seven degrees Fahrenheit-by the end of this century. (In a recent paper in the Proceedings of the National Academy of Sciences, two climate scientists-Yangyang Xu, of Texas A. & M., and Veerabhadran Ramanathan, of the Scripps Institution of Oceanography-proposed that warming greater than three degrees Celsius be designated as "catastrophic" and warming greater than five degrees as "unknown??" The "unknown??" designation, they wrote, comes "with the understanding that changes of this magnitude, not experienced in the last 20+ million years, pose existential threats to a majority of the population.")

When the I.P.C.C. went looking for ways to hold the temperature increase under two degrees Celsius, it found the math punishing. Global emissions would have to fall rapidly and dramatically-pretty much down to zero by the middle of this century. (This would entail, among other things, replacing most of the world's power plants, revamping its agricultural systems, and eliminating gasoline-powered vehicles, all within the next few decades.) Alternatively, humanity could, in effect, go into hock. It could allow CO ₂ levels temporarily to exceed the two-degree threshold-a situation that's become known as "overshoot"-and then, via negative emissions, pull the excess CO ₂ out of the air.

The I.P.C.C. considered more than a thousand possible scenarios. Of these, only a hundred and sixteen limit warming to below two degrees, and of these a hundred and eight involve negative emissions. In many below-two-degree scenarios, the quantity of negative emissions called for reaches the same order of magnitude as the "positive" emissions being produced today.

"The volumes are outright crazy," Oliver Geden, the head of the E.U. research division of the German Institute for International and Security Affairs, told me. Lackner said, "I think what the I.P.C.C. really is saying is 'We tried lots and lots of scenarios, and, of the scenarios which stayed safe, virtually every one needed some magic touch of a negative emissions. If we didn't do that, we ran into a brick wall.' "

Pursued on the scale envisioned by the I.P.C.C., carbon-dioxide removal would yield at first tens of billions and soon hundreds of billions of tons of CO ₂, all of which would have to be dealt with. This represents its own supersized challenge. CO ₂ can be combined with calcium to produce limestone, as it is in the process at Carbon Engineering (and in Lackner's self-replicating-machine scheme). But the necessary form of calcium isn't readily available, and producing it generally yields CO ₂, a self-defeating prospect. An alternative is to shove the carbon back where it came from, deep underground.

"If you are storing CO ₂ and your only purpose is storage, then you're looking for a package of certain types of rock," Sallie Greenberg, the associate director for energy, research, and development at the Illinois State Geological Survey, told me. It was a bright summer day, and we were driving through the cornfields of Illinois's midsection. A mile below us was a rock formation known as the Eau Claire Shale, and below that a formation known as the Mt. Simon Sandstone. Together with a team of drillers, engineers, and geoscientists, Greenberg has spent the past decade injecting carbon dioxide into this rock "package" and studying the outcome. When I'd proposed over the phone that she show me the project, in Decatur, she'd agreed, though not without hesitation.

"It isn't sexy," she'd warned me. "It's a wellhead."

Our first stop was a building shaped like a ski chalet. This was the National Sequestration Education Center, a joint venture of the Illinois geological survey, the U.S. Department of Energy, and Richland Community College. Inside were classrooms, occupied that morning by kids making lanyards, and displays aimed at illuminating the very dark world of carbon storage. One display was a sort of oversized barber pole, nine feet tall and decorated in bands of tan and brown, representing the various rock layers beneath us. A long arrow on the side of the pole indicated how many had been drilled through for Greenberg's carbon-storage project; it pointed down, through the New Albany Shale, the Maquoketa Shale, and so on, all the way to the floor.

The center's director, David Larrick, was on hand to serve as a guide. In addition to schoolkids, he said, the center hosted lots of community groups, like Kiwanis clubs. "This is very effective as a visual," he told me, gesturing toward the pole. Sometimes farmers were concerned about the impact that the project could have on their water supply. The pole showed that the CO ₂ was being injected more than a mile below their wells.

"We have had overwhelmingly positive support," he said. While Greenberg and Larrick chatted, I wandered off to play an educational video game. A cartoon figure in a hard hat appeared on the screen to offer factoids such as "The most efficient method of transport of CO ₂ is by pipeline."

"Transport CO ₂ to earn points!" the cartoon man exhorted.

After touring the center's garden, which featured grasses, like big bluestem, that would have been found in the area before it was plowed into cornfields, Greenberg and I drove on. Soon we passed through the gates of an enormous Archer Daniels Midland plant, which rose up out of the fields like a small city.

Greenberg explained that the project we were visiting was one of seven funded by the Department of Energy to learn whether carbon injected underground would stay there. In the earliest stage of the project, initiated under President George W. Bush, Greenberg and her colleagues sifted through geological records to find an appropriate test site. What they were seeking was similar to what oil drillers look for-porous stone capped by a layer of impermeable rock-only they were looking not to extract fossil fuels but, in a manner of speaking, to stuff them back in. The next step was locating a ready source of carbon dioxide. This is where A.D.M. came in; the plant converts corn into ethanol, and one of the by-products of this process is almost pure CO ₂. In a later stage of the project, during the Obama Administration, a million tons of carbon dioxide from the plant were pumped underground. Rigorous monitoring has shown that, so far, the CO ₂ has stayed put.

We stopped to pick up hard hats and went to see some of the monitoring equipment, which was being serviced by two engineers, Nick Malkewicz and Jim Kirksey. It was now lunchtime, so we made another detour, to a local barbecue place. Finally, Greenberg and I and the two men got to the injection site. It was, indeed, not sexy-just a bunch of pipes and valves sticking out of the dirt. I asked about the future of carbon storage.

"I think the technology's there and it's absolutely viable," Malkewicz said. "It's just a question of whether people want to do it or not. It's kind of an obvious thing."

"We know we can meet the objective of storing CO ₂," Greenberg added. "Like Nick said, it's just a matter of whether or not as a society we're going to do it."

When work began on the Decatur project, in 2003, few people besides Klaus Lackner were thinking about sucking CO ₂ from the air. Instead, the goal was to demonstrate the feasibility of an only slightly less revolutionary technology-carbon capture and storage (or, as it is sometimes referred to, carbon capture and sequestration).

With C.C.S., the CO ₂ produced at a power station or a steel mill or a cement plant is drawn off before it has a chance to disperse into the atmosphere. (This is called "post-combustion capture.") The gas, under very high pressure, is then injected into the appropriate package of rock, where it is supposed to remain permanently. The process has become popularly-and euphemistically-known as "clean coal," because, if all goes according to plan, a plant equipped with C.C.S. produces only a fraction of the emissions of a conventional coal-fired plant.

Over the years, both Republicans and Democrats have touted clean coal as a way to save mining jobs and protect the environment. The coal industry has also, nominally at least, embraced the technology; one industry-sponsored group calls itself the American Coalition for Clean Coal Electricity. Donald Trump, too, has talked up clean coal, even if he doesn't seem to quite understand what the term means. "We're going to have clean coal, really clean coal," he said in March.

Currently, only one power plant in the U.S., the Petra Nova plant, near Houston, uses post-combustion carbon capture on a large scale. Plans for other plants to showcase the technology have been scrapped, including, most recently, the Kemper County plant, in Mississippi. This past June, the plant's owner, Southern Company, announced that it was changing tacks. Instead of burning coal and capturing the carbon, the plant would burn natural gas and release the CO ₂.

Experts I spoke to said that the main reason C.C.S. hasn't caught on is that there's no inducement to use it. Capturing the CO ₂ from a smokestack consumes a lot of power-up to twenty-five per cent of the total produced at a typical coal-burning plant. And this, of course, translates into costs. What company is going to assume such costs when it can dump CO ₂ into the air for free?

"If you're running a steel mill or a power plant and you're putting the CO ₂ into the atmosphere, people might say, 'Why aren't you using carbon capture and storage?' " Howard Herzog, an engineer at M.I.T. who for many years ran a research program on C.C.S., told me. "And you say, 'What's my financial incentive? No one's saying I can't put it in the atmosphere.' In fact, we've gone backwards in terms of sending signals that you're going to have to restrict it."

But, although C.C.S. has stalled in practice, it has become ever more essential on paper. Practically all below-two-degree warming scenarios assume that it will be widely deployed. And even this isn't enough. To avoid catastrophe, most models rely on a yet to be realized variation of C.C.S., known as BECCS.

BECCS, which stands for "bio-energy with carbon capture and storage," takes advantage of the original form of carbon engineering: photosynthesis. Trees and grasses and shrubs, as they grow, soak up CO ₂ from the air. (Replanting forests is a low-tech form of carbon removal.) Later, when the plants rot or are combusted, the carbon they have absorbed is released back into the atmosphere. If a power station were to burn wood, say, or cornstalks, and use C.C.S. to sequester the resulting CO ₂, this cycle would be broken. Carbon would be sucked from the air by the green plants and then forced underground. BECCS represents a way to generate negative emissions and, at the same time, electricity. The arrangement, at least as far as the models are concerned, could hardly be more convenient.

" BECCS is unique in that it removes carbon and produces energy," Glen Peters, a senior researcher at the Center for International Climate Research, in Oslo, told me. "So the more you consume the more you remove." He went on, "In a sense, it's a dream technology. It's solving one problem while solving the other problem. What more could you want?"

The Center for Carbon Removal doesn't really have an office; it operates out of a co-working space in downtown Oakland. On the day I visited, not long after my trip to Decatur, someone had recently stopped at Trader Joe's, and much of the center's limited real estate was taken up by tubs of treats.

"Open anything you want," the center's executive director, Noah Deich, urged me, with a wave of his hand.

Deich, who is thirty-one, has a broad face, a brown beard, and a knowing sort of earnestness. After graduating from the University of Virginia, in 2009, he went to work for a consulting firm in Washington, D.C., that was advising power companies about how to prepare for a time when they'd no longer be able to release carbon into the atmosphere cost-free. It was the start of the Obama Administration, and that time seemed imminent. The House of Representatives had recently approved legislation to limit emissions. But the bill later died in the Senate, and, as Deich put it, "It's no fun to model the impacts of climate policies nobody believes are going to happen." He switched consulting firms, then headed to business school, at the University of California, Berkeley.

"I came into school with this vision of working for a clean-tech startup," he told me. "But I also had this idea floating around in the back of my head that we're moving too slowly to actually stop emissions in time. So what do we do with all the carbon that's in the air?" He started talking to scientists and policy experts at Berkeley. What he learned shocked him.

"People told me, 'The models show this major need for negative emissions,' " he recalled. " 'But we don't really know how to do that, nor is anyone really thinking about it.' I was someone who'd been in the business and policy world, and I was, like, wait a minute- what?"

Business school taught Deich to think in terms of case studies. One that seemed to him relevant was solar power. Photovoltaic cells have been around since the nineteen-fifties, but for decades they were prohibitively expensive. Then the price started to drop, which increased demand, which led to further price drops, to the point where today, in many parts of the world, the cost of solar power is competitive with the cost of power from new coal plants.

"And the reason that it's now competitive is that governments decided to do lots and lots of research," Deich said. "And some countries, like Germany, decided to pay a lot for solar, to create a first market. And China paid a lot to manufacture the stuff, and states in the U.S. said, 'You must consume renewable energy,' and then consumers said, 'Hey, how can I buy renewable energy?' "

As far as he could see, none of this-neither the research nor the creation of first markets nor the spurring of consumer demand-was being done for carbon removal, so he decided to try to change that. Together with a Berkeley undergraduate, Giana Amador, he founded the center in 2015, with a hundred-and-fifty-thousand-dollar grant from the university. It now has an annual budget of about a million dollars, raised from private donors and foundations, and a staff of seven. Deich described it as a "think-and-do tank."

"We're trying to figure out: how do we actually get this on the agenda?" he said.

A compelling reason for putting carbon removal on "the agenda" is that we are already counting on it. Negative emissions are built into the I.P.C.C. scenarios and the climate agreements that rest on them.

But everyone I spoke with, including the most fervent advocates for carbon removal, stressed the huge challenges of the work, some of them technological, others political and economic. Done on a scale significant enough to make a difference, direct air capture of the sort pursued by Carbon Engineering, in British Columbia, would require an enormous infrastructure, as well as huge supplies of power. (Because CO ₂ is more dilute in the air than it is in the exhaust of a power plant, direct air capture demands even more energy than C.C.S.) The power would have to be generated emissions-free, or the whole enterprise wouldn't make much sense.

"You might say it's against my self-interest to say it, but I think that, in the near term, talking about carbon removal is silly," David Keith, the founder of Carbon Engineering, who teaches energy and public policy at Harvard, told me. "Because it almost certainly is cheaper to cut emissions now than to do large-scale carbon removal."

BECCS doesn't make big energy demands; instead, it requires vast tracts of arable land. Much of this land would, presumably, have to be diverted from food production, and at a time when the global population-and therefore global food demand-is projected to be growing. (It's estimated that to do BECCS on the scale envisioned by some below-two-degrees scenarios would require an area larger than India.) Two researchers in Britain, Naomi Vaughan and Clair Gough, who recently conducted a workshop on BECCS, concluded that "assumptions regarding the extent of bioenergy deployment that is possible" are generally "unrealistic."

For these reasons, many experts argue that even talking (or writing articles) about negative emissions is dangerous. Such talk fosters the impression that it's possible to put off action and still avoid a crisis, when it is far more likely that continued inaction will just produce a larger crisis. In "The Trouble with Negative Emissions," an essay that ran last year in Science, Kevin Anderson, of the Tyndall Centre for Climate Change Research, in England, and Glen Peters, of the climate-research center in Oslo, described negative-emissions technologies as a "high-stakes gamble" and relying on them as a "moral hazard par excellence."

We should, they wrote, "proceed on the premise that they will not work at scale."

Others counter that the moment for fretting about the hazards of negative emissions-moral or otherwise-has passed.

"The punch line is, it doesn't matter," Julio Friedmann, the former Principal Deputy Assistant Energy Secretary, told me. "We actually need to do direct air capture, so we need to create technologies that do that. Whether it's smart or not, whether it's optimized or not, whether it's the lowest-cost pathway or not, we know we need to do it."

"If you tell me that we don't know whether our stuff will work, I will admit that is true," Klaus Lackner said. "But I also would argue that nobody else has a good option."

One of the peculiarities of climate discussions is that the strongest argument for any given strategy is usually based on the hopelessness of the alternatives: this approach must work, because clearly the others aren't going to. This sort of reasoning rests on a fragile premise-what might be called solution bias. There has to be an answer out there somewhere, since the contrary is too horrible to contemplate.

Early last month, the Trump Administration announced its intention to repeal the Clean Power Plan, a set of rules aimed at cutting power plants' emissions. The plan, which had been approved by the Obama Administration, was eminently achievable. Still, according to the current Administration, the cuts were too onerous. The repeal of the plan is likely to result in hundreds of millions of tons of additional emissions.

A few weeks later, the United Nations Environment Programme released its annual Emissions Gap Report. The report labelled the difference between the emissions reductions needed to avoid dangerous climate change and those which countries have pledged to achieve as "alarmingly high." For the first time, this year's report contains a chapter on negative emissions. "In order to achieve the goals of the Paris Agreement," it notes, "carbon dioxide removal is likely a necessary step."

As a technology of last resort, carbon removal is, almost by its nature, paradoxical. It has become vital without necessarily being viable. It may be impossible to manage and it may also be impossible to manage without. ♦

This article appears in the print edition of the November 20, 2017, issue, with the headline "Going Negative."

Elizabeth Kolbert has been a staff writer at The New Yorker since 1999. She won the 2015 Pulitzer Prize for general nonfiction for "The Sixth Extinction: An Unnatural History."
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Can Carbon-Dioxide Removal Save the World?

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Carbon Engineering, a company owned in part by Bill Gates, has its headquarters on a spit of land that juts into Howe Sound, an hour north of Vancouver. Until recently, the land was a toxic-waste site, and the company's equipment occupies a long, barnlike building that, for many years, was used to process contaminated water.

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Exploring the question “Should Russia modernize by following the Western path towards civil rights and representative government, or should it try to lock in stability by holding fast against them?” this article finds that Putin trusts a liberal-minded economy through his brand of authoritarianism. Due to the lack of democracy in Russia, the next ruler may rise with a power struggle which can put many countries in danger due to Russia’s amount of nuclear weapons. Western movement relates to Modernization Theory by following the example of western countries of the five stages of development process – all leading to social welfare.

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SEVENTEEN years after Vladimir Putin first became president, his grip on Russia is stronger than ever. The West, which still sees Russia in post-Soviet terms, sometimes ranks him as his country's most powerful leader since Stalin. Russians are increasingly looking to an earlier period of history. Both liberal reformers and conservative traditionalists in Moscow are talking about Mr Putin as a 21st-century tsar.

Mr Putin has earned that title by lifting his country out of what many Russians see as the chaos in the 1990s and by making it count again in the world. Yet as the centenary of the October revolution draws near, the uncomfortable thought has surfaced that Mr Putin shares the tsars' weaknesses, too.

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Although Mr Putin worries about the "colour" revolutions that swept through the former Soviet Union, the greater threat is not of a mass uprising, still less of a Bolshevik revival. It is that, from spring 2018 when Mr Putin starts what is constitutionally his last six-year term in office after an election that he will surely win, speculation will begin about what comes next. And the fear will grow that, as with other Russian rulers, Tsar Vladimir will leave turbulence and upheaval in his wake.

Firm rule

Mr Putin is hardly the world's only autocrat. Personalised authoritarian rule has spread across the world over the past 15 years-often, as with Mr Putin, built on the fragile base of a manipulated, winner-takes-all democracy. It is a rebuke to the liberal triumphalism which followed the collapse of the Soviet Union. Leaders such as Recep Tayyip Erdogan of Turkey (see article), the late Hugo Chávez of Venezuela and even Narendra Modi, India's prime minister, have behaved as if they enjoy a special authority derived directly from the popular will. In China Xi Jinping this week formalised his absolute command of the Communist Party (see article).

Mr Putin's brand of authoritarianism blazed the trail. It evokes Russia's imperial history (see Briefing), offering a vivid picture of how power works and how it might go wrong.

Like a tsar, Mr Putin surmounts a pyramid of patronage. Since he moved against the oligarchs in 2001, taking control first of the media and then of the oil and gas giants, all access to power and money has been through him. These days the boyars serve at his pleasure, just as those beneath them serve at their pleasure and so on all the way down. He wraps his power in legal procedure, but everyone knows that the prosecutors and courts answer to him. He enjoys an approval rating of over 80% partly because he has persuaded Russians that, as an aide says, "If there is no Putin, there is no Russia."

Like a tsar, too, he has faced the question that has plagued Russia's rulers since Peter the Great-and which acutely confronted Alexander III and Nicholas II in the run-up to the revolution. Should Russia modernise by following the Western path towards civil rights and representative government, or should it try to lock in stability by holding fast against them? Mr Putin's answer has been to entrust the economy to liberal-minded technocrats and politics to former KGB officers. Inevitably, politics has dominated economics and Russia is paying the price. However well administered during sanctions and a rouble devaluation, the economy still depends too heavily on natural resources. It can manage annual GDP growth of only around 2%, a far cry from 2000-08, which achieved an oil-fired 5-10%. In the long run, this will cramp Russia's ambitions.

And like a tsar, Mr Putin has buttressed his power through repression and military conflict. At home, in the name of stability, tradition and the Orthodox religion, he has suppressed political opposition and social liberals, including feminists, NGOs and gays. Abroad, his annexation of Crimea and the campaigns in Syria and Ukraine have been burnished for the evening news by a captive, triumphalist media. However justified, the West's outrage at his actions underlined to Russians how Mr Putin was once again asserting their country's strength after the humiliations of the 1990s.

What does this post-modern tsar mean for the world? One lesson is about the Russian threat. Since the interference in Ukraine, the West has worried about Russian revanchism elsewhere, especially in the Baltic states. But Mr Putin cannot afford large numbers of casualties without also losing legitimacy, as happened to Nicholas II in the Russo-Japanese war of 1904-05 and in the first world war. Because today's tsar knows history, he is likely to be opportunistic abroad, shadowboxing rather than risking a genuine confrontation. The situation at home is different. In his time in power Mr Putin has shown little appetite for harsh repression. But Russia's record of terrible suffering suggests that, whereas dithering undermines the ruler's legitimacy, mass repression can strengthen it-at least for a time. The Russian people still have something to fear.

Mother Russia's offspring

The other lesson is about succession. The October revolution is just the most extreme recent case of power in Russia passing from ruler to ruler through a time of troubles. Mr Putin cannot arrange his succession using his bloodline or the Communist Party apparatus. Perhaps he will anoint a successor. But he would need someone weak enough for him to control and strong enough to see off rivals-an unlikely combination. Perhaps he will try to cling to power, as Deng Xiaoping did behind the scenes as head of the China Bridge Association, and Mr Xi may intend to overtly, having conspicuously avoided naming a successor after this week's party congress. Yet, even if Mr Putin became the éminence grise of the Russian Judo Federation, it would only delay the fatal moment. Without the mechanism of a real democracy to legitimise someone new, the next ruler is likely to emerge from a power struggle that could start to tear Russia apart. In a state with nuclear weapons, that is alarming.

The stronger Mr Putin is today, the harder he will find it to manage his succession. As the world tries to live with that paradox, it should remember that nothing is set in stone. A century ago the Bolshevik revolution was seen as an endorsement of Marx's determinism. In the event, it proved that nothing is certain and that history has its own tragic irony.

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SEVENTEEN years after Vladimir Putin first became president, his grip on Russia is stronger than ever. The West, which still sees Russia in post-Soviet terms, sometimes ranks him as his country's most powerful leader since Stalin. Russians are increasingly looking to an earlier period of history.

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Post #9 (November 30, 2017) - IMF & Trade

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Post #9 (November 30, 2017) - IMF & Trade

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Due to neglect towards policy enactment, many have begun to blame robotic advancements instead of policy makers. At a recent global forum, the IMF said some of the economic pain attributed to globalization was instead due to the rise of robots taking jobs – false - according to data, labor productivity has decelerated. The IMF works to accelerate trade internationally and secure high employment; it’s important they recognize the failure of policies that allow workers to gain income vs. blaming technological advancements. This relates to the WC and policy regimes to stabilize the macro economy, SAPs (loans provided by IMF).

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Defenders of globalization are on solid ground when they criticize President Trump's threats of punitive tariffs and border walls. The economy can't flourish without trade and immigrants.

But many of those defenders have their own dubious explanation for the economic disruption that helped to fuel the rise of Mr. Trump.

At a recent global forum in Dubai, Christine Lagarde, head of the International Monetary Fund, said some of the economic pain ascribed to globalization was instead due to the rise of robots taking jobs. In his farewell address in January, President Barack Obama warned that "the next wave of economic dislocations won't come from overseas. It will come from the relentless pace of automation that makes a lot of good middle-class jobs obsolete."

Blaming robots, though, while not as dangerous as protectionism and xenophobia, is also a distraction from real problems and real solutions.

The rise of modern robots is the latest chapter in a centuries-old story of technology replacing people. Automation is the hero of the story in good times and the villain in bad. Since today's middle class is in the midst of a prolonged period of wage stagnation, it is especially vulnerable to blame-the-robot rhetoric.

And yet, the data indicate that today's fear of robots is outpacing the actual advance of robots. If automation were rapidly accelerating, labor productivity and capital investment would also be surging as fewer workers and more technology did the work. But labor productivity and capital investment have actually decelerated in the 2000s.

While breakthroughs could come at any time, the problem with automation isn't robots; it's politicians, who have failed for decades to support policies that let workers share the wealth from technology-led growth.

The response in previous eras was quite different.

When automation on the farm resulted in the mass migration of Americans from rural to urban areas in the early decades of the 20th century, agricultural states led the way in instituting universal public high school education to prepare for the future. At the dawn of the modern technological age at the end of World War II, the G.I. Bill turned a generation of veterans into college graduates.

When productivity led to vast profits in America's auto industry, unions ensured that pay rose accordingly.

Corporate efforts to keep profits high by keeping pay low were countered by a robust federal minimum wage and time-and-a-half for overtime.

Fair taxation of corporations and the wealthy ensured the public a fair share of profits from companies enriched by government investments in science and technology.

Productivity and pay rose in tandem for decades after World War II, until labor and wage protections began to be eroded. Public education has been given short shrift, unions have been weakened, tax overhauls have benefited the rich and basic labor standards have not been updated.

As a result, gains from improving technology have been concentrated at the top, damaging the middle class, while politicians blame immigrants and robots for the misery that is due to their own failures. Eroded policies need to be revived, and new ones enacted.

A curb on stock buybacks would help to ensure that executives could not enrich themselves as wages lagged.

Tax reform that increases revenue from corporations and the wealthy could help pay for retraining and education to protect and prepare the work force for foreseeable technological advancements.

Legislation to foster child care, elder care and fair scheduling would help employees keep up with changes in the economy, rather than losing ground.

Economic history shows that automation not only substitutes for human labor, it complements it. The disappearance of some jobs and industries gives rise to others. Nontechnology industries, from restaurants to personal fitness, benefit from the consumer demand that results from rising incomes in a growing economy. But only robust public policy can ensure that the benefits of growth are broadly shared.

If reforms are not enacted - as is likely with President Trump and congressional Republicans in charge - Americans should blame policy makers, not robots.
Follow The New York Times Opinion section on Facebook and Twitter (@NYTOpinion).

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Opinion | No, Robots Aren't Killing the American Dream

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Defenders of globalization are on solid ground when they criticize President Trump's threats of punitive tariffs and border walls. The economy can't flourish without trade and immigrants. But many of those defenders have their own dubious explanation for the economic disruption that helped to fuel the rise of Mr. Trump.