We're in for a wild ride. Exponentially accelerating technological, cultural, and socioeconomic evolution means that every year will see more developments than the previous one. More change will happen between now and 2050 than during all of humanity's past. Let's explore the 21st century and ride this historic wave of planetary transition with a confident open mind.

Thursday, October 7, 2010

Constructing Efficient Socieconomic Systems

Part 1: A second look at non-technological top down approaches we're already familiar with

The last article touched upon a simple overarching goal that seems to have been lost in the discourse about the public sector. That is, constantly using cutting edge engineering and technological knowhow to create a bigger energy bang for your energy buck when delivering goods and services via public means. When one makes the effort to replace a plow with a tractor one has greatly cut spending in terms of energy/resources over the long run.

Many governments in the world are the plow/ horse and buggy equivalents. Throwing more money for a better plow isn't going to cut it in the 21st century. Public tools at humanity's disposal must be restructured to meet the demands ahead, these demands being mass scale production of fission and fusion reactors to power up southern hemisphere and reindustrialization of the Western world.

Future public sectors will be judged in how they balance:

1) preservation/expansion of human autonomy


2) speed in construction of energy plants needed for continental infrastructure projects in irrigation, transport, farming, etc.

The idea will be to create virtuous cycles where the public tools and infrastructural products of said tools reinforce each other in a rapid movement forward.

No, this is not a call to emulate China (as some in the West are beginning to do) or argument for some sort of a scientific dictatorship (although after the current ghastly rule by bankers and lawyers a congress/parliament of scientists would be a liberating breath of fresh air). Efficiency should not be a dirty word. The word was certainly dragged through the mud by free market economists (the energy logistics behind outsourcing being so inefficient as to make Soviet central planners blush) but we can reclaim it.

Many people are currently focused on bottom up structural reform within their communities and micro governance in general. That is all good but before we move on to that lets remember that there are always 3 other basic ways to get things moving on a macro level. Additionally, whether reform is from above or below, the extent to which it is possible depends on a certain level of technological development and proper implementation of communication devices, transport, etc.

Common top down types of restructuring to bring about efficiency on a macro scale:

A) Breaking up larger political structures geographically to infuse the newly independent parts with new life and autonomy. Example: dissolution of Austria-Hungarian Empire and USSR. After the fragments became independent they learned how to function and are now joining up again in new economic/political blocks on their own free will. Think of it as a bloated monopoly or an unwieldy AOL/Time Warner merger coming apart. When the different parts don't compliment each other well (if they are kept together by historical force or if the ethnic groups don't mix well), then major public sector efficiency gains can be made locally through splitting up the country. Some even argue that countries should have population caps (ranging from 10-50 million people) as small countries provide best examples of governmental streamlining.

If large entities like India, China, or United States (it can easily be 5-7 smaller federal unions) are split up, the fragments can reorganize and then merge again in a fashion that is more productive for all. This is not realistic brainstorming in most cases but lets continue to illustrate types of macro reform that may be attempted in unforeseen regions in the future.

It may presently be absurd to join the already huge and ungovernable Mexico and USA together with Canada to form a North American Union. However, if Mexico splits, if USA splits, and then if Canada splits, after 10-15 years of independence the newly streamlined governments of fragments can rearrange into a North American Union that is dramatically more productive. This of course is recommended for those bloated beasts that can split without bloodshed (once again you know who you are... Indian subcontinent).

B) Joining industrial enterprises together to create economies of scale.
One may think that A) contradicts itself. Why would countries join together again (even partially) after political decentralization and independence? Once again, efficiency is the reason. Think of a hypothetical federal union that has 3 major states: Mexas, Malifornia, and Mew Mork. The country has one large industrial monopoly (Mockheed Lartin) that makes advanced passenger planes. The factories to assemble the airplane parts are scattered throughout the union, research facilities concentrated in one part, vertically integrated mines in another and so on. If this imaginary country splits up, the new governments may become a lot more efficient, responsive/closer to the people, freer, have greater energy and ability to do things faster, etc. However, the new sovereigns of Mexas, Malifornia, and Mew Mork may suffer greatly if Mockheed Martin is similarly split up into three pieces. That is because synergy between the parts of the industrial giant has been lost. The new countries will be left with pieces of a giant and will not be able to barter planes for other things that they need (or even provide planes for themselves in the short term as cheaply as before). The slow down of real physical economy would then negate benefits from acceleration of the political process.

This is not to say that all industrial monopolies with a global reach are synergetic. Lockheed Martin for instance purposefully decentralizes its operations through all 50 states to influence congressmen which creates ridiculous cost overruns and logistical inefficiencies. But if one looks at how European Union and USA emerged, there were major industrial enterprises driving the integration. When it comes to infrastructure builders and providers for products like MagLev trains, tunnels, and canals it's obvious that some organisms need to stay together and expand for cheaper utilization of materials and assembly lines. Industrial giants benefit from size and are the only way to advance real physical economy and wealth of the world.

Therefore, if we continue discussion of what may be best for North America, the optimal restructuring may be: the 3 great countries on the continent splitting into a bunch of smaller sovereign political units (while preserving their industrial links) THEN coming together again as a North American EU confederate  equivalent and THEN creating singular continental industrial monopolies to take advantage of economies of scale. This way North American Union can fully utilize its resources to stamp out planes, trains, fission reactors in large cheap quantities to compete with similar continent wide industrial giants elsewhere. These continental giants would dwarf Gazprom and most likely be born from bilateral/multilateral agreements between sovereign governments (rather than any private interests). At this scale, such continental industries are necessarily public property as a mater of simple energy economics and common sense. On a longer timeline, this process would eventually lead to UN being partially or fully in charge of a planetary electrical grid, irrigation construction, and other things of sufficiently international scale.

C) Finally another structural reform is elimination of local governments. In parts of northeastern USA, the oldest parts of the country, there is an absolutely absurd, archaic, and insanely inefficient overlap of tiny local governments. An area and population that would simply and cheaply be covered by a county government in the Midwest would have an ancient village government, a town government, and various neighboring microgovernments all fighting tooth and nail with each other as if it was some Middle Age feudal principality.

Often, a good way to cut spending is to simply wipe out local governments and replace them with one bigger horizontal government with a flat managerial structure that can provide goods and services cheaply by utilizing its larger negotiating power. Unlike A) which wipes out an umbrella gov, C) creates a new umbrella gov for localities while eliminating those under it. Feudal political middlemen on the village level may sound like they are close to the people but when it comes to adding to resource costs and societal progress they stand in the way like some strange Western tribal elders. Here is an example of a fiasco that can occur.

This will be all for now, I'll return to question of efficiency and its interplay with human autonomy in later parts as well as discuss micro bottom up approaches.

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