The Glomar Response

A couple of weeks ago already, James Bridle opened his first solo show The Glomar Response at NOME gallery here in Berlin. The opening was attended by more or less everybody I got to know when I first got to Berlin, a reunion of sorts.

James Bridle opening

The exhibition is a collection of recent work and is still exhibited there for this entire month. James is one of the few artists who creates thoughtful work from the conflation of state power and information technology. His work is only made stronger by the writing that underpins it which is all worth reading and listed neatly over on booktwo.

Evgeny Morozov discovers actor-network theory

With some trepidation did I read Evgeny Morozov’s latest piece “The Taming of Tech Criticism” but thankfully the firebrand has matured and this piece is both readable and relevant.

A critical or oppositional attitude toward Silicon Valley is no guarantee of the critic’s progressive agenda; modern technology criticism, going back to its roots in Germany at the turn of the twentieth century, has often embraced conservative causes.

It treats something that I had been struggling with over the past week after the umpteenth debate here about Silicon Valley and venture funded technology. I share the qualms of my friends but at the same time I hink that criticisms of startup culture are deeply reactionary. Whatever argument you make against them is going to be boring, non-productive and unsuccessful. Morozov signals a similar trend that technology criticism which is startup criticism by another name is conservative and futile.

“By offering to reduce the amount of work we have to do, by promising to imbue our lives with greater ease, comfort, and convenience, computers and other labor-saving technologies appeal to our eager but misguided desire for release from what we perceive as toil,” notes Carr in an unashamedly elitist tone.

The fact that Nicholas Carr is patronizing, elitist, stupid and wrong is nothing new but it is good to read it exposed clearly. What does this say about people who still read Carr?

In fact, what distinguishes radical critics from their faux-radical counterparts is the lens they use for understanding Silicon Valley: the former group sees such firms as economic actors and situates them in the historical and economic context, while the latter sees them as a cultural force, an aggregation of bad ideas about society and politics.

What it comes down to and what Morozov considers to be a radical—I’m sure this is radical in America—is that we need better things as well as better ways to pay for them. That is something that should still be eminently feasible in the parts of Europe that have not fallen prey to neoliberalism.

By the end I found out that all of Morozov’s writing—much of it mistaken by his own admission—was so difficult because he hadn’t come around to the speculative turn yet. With this piece it sounds as if he might have, though his omission of sources makes it hard to tell.

By slicing the world into two distinct spheres—the technological and the non-technological—it quickly regresses into the worst kind of solipsistic idealism, paying far more attention to drummed-up, theoretical ideas about technology than to real struggles in the here and now.

Even a cursory reading of Bruno Latour and friends would have told you long ago that divisions between technology and non-technology—society and nature— are a lie (“We Have Never Been Modern”), that there is no technology per se (actor-network theory), and that you cannot take short-cuts when talking about anything (object-realism).

In fact, the very edifice of contemporary technology criticism rests on the critic’s reluctance to acknowledge that every gadget or app is simply the end point of a much broader matrix of social, cultural, and economic relations.

This is actor-network theory if ever I read it.

The rallying cry of the technology critic—and I confess to shouting it more than once—is: “If only consumers and companies knew better!”

It is my conviction as a designer that consumers and companies usually do know better. They are as well informed as they can be for the things they value and they take the best possible decisions considering their personal value functions. Claims to the contrary gloss over realities that these actors are faced with and more than anything else stem from a patronizing difference of opinion.

Session of the traffic commission of the Berlin borough of Neukölln

Neukölln committee for traffic meeting

I heard about the session of the traffic commission of Berlin-Neukölln through the great Urbanist Magazine who wrote that cities get the bike paths they deserve and that being present at political sessions is a prerequisite to change things.

So I made my way over to Rathaus Neukölln during rush hour yesterday to listen in on the session. Even though these things are deadly boring, they are at the same time extremely revealing of the workings and attitudes of our governments and just for that fact worthwhile to occasionally visit. At the same time I think it is a civic duty to attend these sessions for the things that you are interested in. If you don’t, others will.

Berlin.de on an iPhone

The website Berlin.de lists the proceedings of the session but it is unfortunately totally unusable on a mobile device (see the screenshot above) so I went by ear and noted what I could understand of the proceedings. The meeting protocol was I may add a bit chaotic and unclear. Part of it may be because I was ten minutes late (thank BVG) but I would expect local political sessions to at least have signs to show who’s who (like they do in Amsterdam).

Points two to five of the agenda were about improvements for cycling in Neukölln and after some debate all of these points were summarily rejected by the SPD/CDU who have a majority in this part of the city and I gather also chair the commission. For some proposals the chairs took offence and for the others they declared that what was proposed would be of no use. During the vote for each of these points they were rejected.

The debate about point 3 was especially illuminating.

Point 3 was a proposal to research how to keep the bike path on Karl-Marx-Straße free of parked cars. The chair of the committee said that this problem simply cannot be solved. The representative of the police said that they don’t have the capacity to enforce the law when it comes to this matter and that doing so would jeopardize their ability to stop violent crime. Somebody present requested that these people be fined to which the chair replied that that wouldn’t help either because people don’t care about the fines.

The chair cited examples to the contrary from around Schloßstraße and Savignyplatz. These don’t really seem relevant to me. Fines for parking on a bike lane are nearly trivial but not so trivial that they wouldn’t be felt in Neukölln at all.

A couple of people attending protested and said that this was a selective application of the law meant to fuck cyclists. These people were not taken seriously at all by the committee.

It seems that the governing parties in Berlin reject any proposal submitted by the opposition. An opposition who I may add do not seem to be the sharpest knives. Some of the proposed solutions were not realistic in the slightest. One example: replacing the DHL trucks with cargo bikes is batshit crazy. To add to that: DHL trucks parking on the bike lanes are not the biggest problem at all and something that can be solved fairly easily.

I went to this meeting to see why cycling in Berlin is so bad as it is and most of what I thought was confirmed. Berlin does not take cyclists seriously and the governing bodies are populated by people who say they care but who really don’t give a shit.

Acemoglu’s Critique on Piketty

I read this paper by Acemoglu and Robinson right after I read the book by Piketty thinking that there would be some interesting economic debate. Unfortunately I was proved wrong and this seems to be exemplary for the stagnation of the economic field.

It’s extremely selective nitpicking, some qualms with definitions and arguing about semantics. In those places where Piketty actually writes the same thing as them, they don’t mention it in their paper. This means that they have either not read the book or that they are being disingenuous.

Their paper was also written so poorly that reading it felt like more of a slog than 600 pages by Piketty.

I found a confirmation for my point (and another one) of view and it looks like it’s the old: ‘I need to publish something quickly to take advantage of somebody else’s freshly minted superstardom.’.

Thomas Piketty Debunks Conventional Economics

I read “Capital in the Twenty-First Century” on assignment and I am glad I did because it is a well written, easy to read and profoundly insightful book. It illuminates what capital is and what effects it has in the world to an extent that hasn’t been done before. The book contains lots of insights and it takes down many financial myths that are imposed on us every day.

Even though I read this book on an Austrian mountain I was still witness to the age old workings of capital. The cabin next door belonged to a person who also owned a large chunk of the mountain. On this plot he kept a couple of dozen cows who grazed and calved there by themselves. This herd and therefore this farmer’s capital would thereby multiply every year yielding double digit returns (I estimate anything from 20-80% on the animals).

I’ll treat each of the myths in this post from the copious notes I took while reading the book.

Myth 1: Capital concentration is not a problem

This is the central tenet of the book. The idea that capital is not an issue and will never be again in our societies is disproved. The core equation of r > g states that most of the time the yield on investments is higher than economic growth and even a small difference will have fairly large consequences in the long run.

Those that don’t have any capital (over 50% of society) have no idea what kind of concentrations of capital are available to others nor which mechanisms enable them to create and maintain these quantities of wealth. A lack of widespread knowledge both of the details of capital as of the financial strategies available to elites is a democratic deficit.

“Those who have a lot of it [money] never fail to defend their interests.”

Myth 2: Merit determines what people get

“Modern meritocratic society, especially in the United States, is much harder on the losers, because it seeks to justify domination on the grounds of justice, virtue, and merit, to say nothing of the insufficient productivity of those at the bottom.”

This point is being argued increasingly by for example Alain de Botton on ‘the evils of meritocracy’. It turns out that this argument frames everybody who isn’t rich (usually because of hereditary misfortune) into a loser who who isn’t trying hard enough or is lazy.

This is an absurd piece of reasoning that has been surprisingly predominant in the past decades.

Myth 3: We need 5-10% annual growth

The current consensus seems to be that a growth rate below 2-3% is bad news. Piketty argues that even a growth of 1% year over year will compound to create large amounts of change. This rate of increase is actually exponential growth (for a fairly low exponent) even though Piketty does not call it so.

According to Piketty high growth usually takes place during phases of catch up. Once a country is caught up growth will come down to normal rates. Other countries can and will experience these high growth periods as threatening.

Myth 4: Macro-economists are doing the best job they can

The biggest value of Piketty’s book is that it demonstrates that a realist approach to economy is possible. Many of the insights in the book are not illuminating because of their politics but because this kind of data has never been collected and analysed in this way before. He calls his deductions accounting identities and as such their content isn’t subject to debate as much as their consequences are.

In the book he questions regularly what economists have been doing for the past centuries. Piketty at one point says that Marx could have done a better job if he’d consulted the data that was available to him at the time. I would say that rather than building a realistic and empirical basis for their positions they have undertaken pissing contests between this school and that.

Every graph in the book points to a data series on an accompanying website where you can download an archive with Stata files, Excel files and all of the graphs in the book. Though a somewhat primitive approach, for the field of economy this looks like a revolutionary innovation. This may be a bit of ‘digital social sciences’ happening finally.

The sheer amount of data lends this book a sheen of objectivity. That may explain why so many people who had not read this book totally lost their shit over it. I believe this is a case where the extra credibility lent to something based on data is mostly justified.

At the end of the book Piketty welcomes the empirical research being popularised within economy as part of ‘behavioural economics’:

“Economists today are full of enthusiasm for empirical methods based on controlled experiments. When used with moderation, these methods can be useful, and they deserve credit for turning some economists toward concrete questions and firsthand knowledge of the terrain (a long overdue development).”

Myth 5: Immigration is a bad thing

“In a quasi-stagnant society, wealth accumulated in the past will inevitably acquire disproportionate importance.”

The consensus in Europe is that immigration is a bad thing. Piketty argues that population growth is a factor on top of economic growth (or instead of) to increase a nation’s income.

Myth 6: Debts are neutral

Piketty explains that debts are a transfer from the poor to the rich. Bond holders are almost exclusively rich people either directly or through portfolios who are paid interest by nations as a whole. As such everybody including poor people pay while the only people who benefit are the rich.

This is highly relevant when considering the levels of national debts within Europe and the fact that nation states are being held hostage by lenders whose identities we don’t even know.

Myth 7: Taxation is just about creating revenue

“It is important to understand that a tax is always more than just a tax: it is also a way of defining norms and categories and imposing a legal framework on economic activity.”

Piketty says that even a tax that is too small to make a fiscal difference would be useful because taxation necessitates transparency and mapping. Just as the taxation of land requires a legible cadastral system to know who had what piece of land, creating a fractional tax on capital would shine some light in a dark place.

Myth 8: Inflation is bad

“How can a public debt as large as today’s European debt be significantly reduced? There are three main methods, which can be combined in various proportions: taxes on capital, inflation, and austerity. An exceptional tax on private capital is the most just and efficient solution. Failing that, inflation can play a useful role: historically, that is how most large public debts have been dealt with. The worst solution in terms of both justice and efficiency is a prolonged dose of austerity—yet that is the course Europe is currently following.”

It turns out that inflation is not as bad a thing as it is made out to be. Many European nations have used inflation in the 20th century to greatly reduce their debts. Piketty says above that austerity is the worst thing that you can do in the face of large national debts.

Inflation is however not an uniformly good strategy to get rid of debts because it will disproportionately affect those without real assets (poor people and the lower middle class) i.e. people with a small nest egg in the bank.

In fact later in the book Piketty mentions that Germany has benefited most from inflation during the 20th century but now refuses to let others benefit similarly.

Germany is often exemplarized as an economic example within Europe but this is patently false. Germany is in fact a deeply unfair and hyper-capitalist society which has more similarities with the USA than with any other continental European nation. There is no minimum wage in Germany. Parents can give their children €800’000 taxfree every ten years. The list goes on.

After using inflation to reduce their debts, Germany has in the 90s reformed its social security and labour market to a fairly extreme level. With such a liberal job market it is also economically expedient for them to be an immigration nation pulling in the qualified labour pools of other countries.

Now being the dominant economic power in Europe Germany is using every means at its disposal to stay that way even if it means choking off other European nations. Comparisons of Merkel with Hitler may be absurd, a comparison with Putin seems justified. Just like Putin, Merkel is allowed to stay in power as long as the economy is growing and things are stable.

Myth 9: Supermanagers deserve to make absurd amounts of money

There has been a lot of debate about this already and it is pertinent to Piketty because the people at the top of the income distribution today are people that have both historically accumulated wealth and are in positions where they make a lot of money from their work.

Piketty argues what has been argued in other places as well: there is no proof for increased productivity of supermanagers or for anything else that would merit such disproportionately high pay. A better explanation for it is that there are old boys who determine each others’ renumeration and have no incentive to hold back.

Myth 10: Education should be expensive

Piketty argues that even though education may not be a cure for inequality that open access to higher education for anybody who is able to go is very important for a society.

Unfortunately in the Netherlands higher education is being instrumentalized and financialized. It is becoming unattractive to learn things that do not have a direct market payoff because of the debt you incur while studying. It is fairly obvious that this system disproportionately benefits those with money who are less affected by opportunity cost.

Myth 11: Globalization is bad

Piketty argues that globalisation is good and that countries that close themselves off rarely benefit from it. He uses this as an argument for more taxes: “Absence of progressive taxation may undermine support for a globalised economy.”

Myth 12: The United States have always been a nation of low taxation

“Furthermore, the Great Depression of the 1930s struck the United States with extreme force, and many people blamed the economic and financial elites for having enriched themselves while leading the country to ruin.”

“Josiah Wedgwood, in the preface to a new edition of his classic 1929 book on inheritance, agreed with his compatriot Bertrand Russell that the “plutodemocracies” and their hereditary elites had failed to stem the rise of fascism. He was convinced that “political democracies that do not democratize their economic systems are inherently unstable.”

I was amazed that the United States (and England) for a period of time had incredibly high (confiscatory) taxes on income, capital and estates because: ‘all excessively high incomes were suspect.’ The accumulation of capital was seen as something unhealthy and also as something profoundly illiberal.

Myth 13: Financial transparency is undesirable

“It is particularly striking to discover that the countries that are most dependent on substantial tax revenues to pay for their social programs, namely the European countries, are also the ones that have accomplished the least, even though the technical challenges are quite simple.”

One of the most important solutions and necessities Piketty suggests is to increase the transparency of capital stocks and flows around the world. There are initiatives underway to do this but they will take a long time to implement and will probably be watered down when they get there. Doxing off-shore banks may be the only remedy available to us in the meantime.

Financial transparency for everybody and especially the ultra-rich should be something for which there is a clear majority. The question then remains why it is so hard to push through. Maybe having a president of the European Commission who used to work for the Luxembourg cottage financial industries is not making this any easier?

Knowing whose money is where and where it is going is also necessary during financial crises to be able to take the right action. It would seem obvious but it turns out that during the recent financial crises our governments had to resort to the equivalent of randomly throwing money into black holes.

The initiative Open Spending focuses on making government finances transparent. A similar initiative should push for doing the same with the financial data of public and private companies.

Myth 14: Public wealth will follow after economic growth

Economic growth in an area does not benefit everybody and definitely not equally. Berlin for instance has recently seen a gigantic influx of capital and private wealth. The city finally has budgets in the black again but still has no money to speak of. More correctly: there isn’t any money for better public transportation or to clean school buildings; there is money for large scale construction projects and Olympic bids.

Myth 15: Investors are as useless as a gorilla

“The higher we go in the endowment hierarchy, the more often we find alternative investment strategies,” that is, very high yield investments such as shares in private equity funds and unlisted foreign stocks (which require great expertise), hedge funds, derivatives, real estate, and raw materials, including energy, natural resources, and related products (these, too, require specialized expertise and offer very high potential yields).”

Piketty demonstrates this popular notion to be patently false. It turns out that given enough money you can get both access to more interesting investment opportunities and hire advisors that can get you high yields on those opportunities. He takes the endowment of for instance Harvard as an example where they by investing a small part of their huge capital (of some $30B) they manage to get returns on the order of 10% a year.

The measly one or two percent you and I can get at the bank pales in comparison and does not even keep up with inflation. You could save yourself some trouble and just throw your money into a fireplace.

Tempelhofer Park and the union between local government and property developers

There is a shack on Tempelhofer Feld that explains the senate’s plans with the park and the construction they plan to do there:

One sided citizen participation because that is how this city rolls

The people of 100% Tempelhofer Feld with an alternate view are not allowed to express their view on the park itself. Reading through their facebook feed for the past weeks is a collection of absurdism that beggars belief. Truth is stranger than fiction.

And now the city has started a campaign where they found people willing to shill for construction on the field in videos such as these:

They don’t mention how much these people have been paid for their participation. Maybe a human flesh search for these people would be a good idea to track them down and ask them what they really think.

Anyway the entire thing is turning into a travesty where capitalism and the corrupt local government get what they want regardless. There is a term for such an unholy alliance though it has fallen slightly out of use in Germany these past decades.

The Union issue

I have been long flummoxed by how terrible the CDU/CSU complex in Germany is. I could not understand how people could be that stupid and that conservative to the detriment of everybody including themselves. The number of examples is near infinite, but this post was prompted by yesterday’s action by the young Union Berlin.

I now have a new working theory that explains this issue and sheds a new light on Germany.

Working theory: Most of the people from the Nazi party who weren’t shot after WWII went into the Union.

I have not really heard anybody object to this and it really does explain a lot. Those people had to go somewhere and I’m guessing they did not enter the socialist parties which were probably seeded from whatever red element survived the world wars.

This fact has shaped modern German politics from then on.

Turkey’s stolen elections

I have followed the Turkish elections on the night from Sunday to Monday which turned into a gripping account of prime minister Erdogan trying to steal the elections while most of the people were sleeping. Orchestrated blackouts had drawn out the count. The twitter block didn’t prevent activism from spreading but did reduce the reach of its effects. Those that knew and cared about it were at the counting locations trying to safeguard the ballots and the tallies.

The tally notes were shared to be able to corroborate them with entries into the online result system. Most of those results have been off, some by a small amount, some by a larger amount.

Altogether it was a mess and from the cross section of tallies I’ve seen it’s hard to believe that the AKP would have fully swept Istanbul and Ankara. What follows now is a long process of chasing the issue into Turkey’s notoriously horrible judicial system. It is unclear whether that will have an effect other than reducing the trust people in Turkey have in institutions even further.

What that night did teach me after the lukewarm Dutch municipal elections is that democracy is an institution worth defending both when things are calm but especially when times are tough. I am finally allowed to participate in a vote in Berlin. The European Parliament elections may be lackluster but I’ll take whatever little democracy I’m given.

I’ll post back here about how that vote and its count goes.

Something else that is noteworthy is the dismal coverage the elections got in the Dutch mainstream media. For any kind of news event that you are interested in, following tweets either in the local language or by English speaking commentators on the ground provides a far better experience. What I saw on Dutch television and in Dutch newspapers was predictable, shallow, disconnected and actively shameful.

Lazy intellectualism exposed (probably without consequences)

Funny to come across three pieces today wherein a bunch of fashionable faux-intellectuals are taken apart.

First Franzen in the LRB:

He writes against blogs, yet allows a comparison between Die Fackel and blogs; he writes about the way the internet disturbs the reading experience, but does it in pages bracketed into German and English sections and in notes that confuse me more than anything I read online – that confuse me more than the Talmud. He writes about competition and the work ethic, but never mentions his own Heine: David Foster Wallace, a master of the nuanced citation who managed to be both smarter and more casual, crazier and kinder.

I tore through Freedom for a book club but I never understood the hype. Recently he’s hitchhiking on the anti-internet nostalgia that is so fashionable in 40-somethings which makes him not only suspect but lazy as well. And yes you should read all of DFW and none of Franzen.

Then Gladwell in the New Republic whose stories were amusing to read but who I never could take seriously after the exposition of his corporate shilling.

Now also Diamond in the LRB being taken apart by the esteemed James C. Scott whose writing could inform so much of what passes for political debate in the Netherlands but who seems to be ignored by the fashions of continental academia and the stupidity of our opinion makers.

And last week the exposition in nsfwcorp of Pierre Omidyar as an extremist robber baron (just like every other billionaire out there).

In many regions, Omidyar Network investments have helped fund programs that create worsening conditions for the world’s underclass, widening inequalities, enhancing exploitation, pushing millions of people into crippling debt and supporting anti-poverty programs that, in some cases, resulted in mass-suicide by the rural poor.

This compromises all of the work that Greenwald and colleagues will do under that banner. Of course no reaction from Glenn Greenwald will be forthcoming because of the (partially justified) internet paranoiac way in which he handles criticism.

The lesson here seems simple: if something strikes you as too convenient or too simple to be true, it probably is.

Germany still isn’t really a democracy

I tried to register to vote for the buyback of the Berlin energy grid and then I got this letter back informing me that I cannot vote.

IMG_0001

I already knew that I cannot vote for national German elections and I don’t care much for them anyway. That I can’t vote at the local level where I live and where I am taxed is however somewhat annoying. Especially given the number of new entrants to the city, the fact that none of them receive any representation for their taxation is a outrageous.

There’s a Turkish man who cycles around Berlin with a placard about this very fact. He has a cassette tape to make his point and looks rather funny but the issue that he protests is real for many people. A lot of people who live in Germany for a long time have no say in what happens there. During the most recent elections the statistic was posted that a quarter of people living in Germany are not allowed to vote (because they are foreigners) and another quarter do not vote. This means the government has a shaky mandate based on half the inhabitants.

It could also explain why mainstream politics is so broken and boring. Maybe it’s time for some democracy in Germany?