Twofish's Blog

January 13, 2007

Wow!!!! Energy and preindustrial societies

Filed under: Career, economics, energy, finance, massachusetts institute of technology — twofish @ 8:30 pm

Every now and then some powerful ideas collide.  I was just at the Houston for a luncheon on the MIT energy initiative and which meant that I couldn’t read the new books from Amazon until today.  So I’m reading the “Qing Formation in World Historical Time” and then I get to page 279 in a article that Jack Goldstone writes and then suddenly…..

 The ulimate bottleneck in preindustrial economies was quite simple.  It lay not in land or other raw materials but in energy.  Given sufficient energy, land could be enriched by irrigation, and applications of distantly produced fertilizers, fibers could be imported and economically worked into finished products, grain could be harvested and threshed with far less manpower, bricks and other construction materials could be cheaply fired and moved, construction and transportation bottlenecks could be overcome.  Whenever breakthroughs in energy use occurred – in wind or water power, in peat or coal or charcoal or coke – gains generally followed.

The got me thinking, there are three elements in the world

  • matter
  • energy
  • information

And matter, energy, and information both exist in

  • time
  • space

This gets back to thermodynamics and finance.  There are some very basic physical connections between time, energy and information, and information is connected to money in a market economy, because money is the means by which information travels between different points.

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January 12, 2007

Nyah!!!! Nyah!!!! Nyah!!!!

Filed under: massachusetts institute of technology, personal — twofish @ 4:47 am

From Carly Simon:

You’re so vain
You probably think this song is about you
You’re so vain
I’ll bet you think this song is about you
Don’t you? Don’t you?

From Annie Get Your Gun:

Anything you can do,
I can do better.
I can do anything
Better than you.

No, you can’t.
Yes, I can. No, you can’t.
Yes, I can. No, you can’t.
Yes, I can,
Yes, I can!

Anything you can be
I can be greater.
Sooner or later,
I’m greater than you.

No, you’re not. Yes, I am.
No, you’re not. Yes, I am.
No, you’re NOT!. Yes, I am.
Yes, I am!

(…)

Any school where you went, I could be master.
I could be master much faster than you.
Can you spell.
No I can’t.
Can you add.
No I can’t.
Can you teach.
Yes I can, yes I can.

Notes on MIT Energy Initiative

Filed under: energy, politics, wikipedia — twofish @ 4:14 am

I’ve posted some notes on a talk about the MIT Energy Initiative on Wikiversity

http://en.wikiversity.org/wiki/MIT_Energy_Initiative_Forum_Notes

January 1, 2007

Notes on the NPCSC Decision on the Property Law

Filed under: china, finance, law — twofish @ 2:54 am

This is an interesting political formula that illustrates some curious
interactions between economics and the law.  The basic economic dispute is
over whether or not privatization is essential for China to develop an
efficient corporate infrastructure (I’d argue that it isn’t,  Yasheng Huang
is one of the people that argue very strongly otherwise.)

By using the formula that “market subjects are equal” what the NPCSC is
basically doing is letting the market decide the dispute.  If it *is* the
case that private ownership is required for efficient corporations then what
will happen is that private corporations will out compete state owned ones,
and lacking state favoritism, corporations will be pushed to privatize.  On
the other hand, if you believe that private ownership *isn’t* required for
efficient corporations, then what will happen is that the state-owned sector
will be able to hold its own against private corporations (and it’s my belief
that the latter will be true).

There are three interesting implications of the idea of “market equality.”

1) First, there are very strong reasons for state-owned enterprises to support
the idea of market equality.  Although, market equality means that SOE’s
don’t get subsidies, it also means that SOE’s also have reasons not to put up
with state interference in management activities, and I suspect that many
SOE’s will use the idea of “market equality” to argue against state
restrictions which they will argue will put them at a disadvantage with
respect to private enterprises.

2) If things are equal, then they can in principle be interchangable, and I
think that the future of Chinese corporations is that they will become
hybrids with mixed private and public capital.  The contrast here is with
foreign and domestic capital which aren’t “equal” which creates an entire
body of law which regulates and restricts how foreign and domestic capital
can be combined.  The “equality” of private and public capital means that the
combinations of private and public will be decided on a case by case basis
with no restrictions and no body of law regulating how they can be mixed,
which I think will create some pretty diverse legal and ownership structures.
This can be thought of as the “hundred flowers” system of Chinese corporate
finance.

3) Finally, since there does now seem to be a consensus in favor of “market
equality” the next set of screaming will be to determine what is
exactly “equal.”  It’s not hard to come up with dozens of scenarios where
there is legitimate disagreement over whether or not a situation respects
market equality.

The last point is particularly significant for Chinese constitutional and
legal development.  Once a (rather vague) principle has been stated, there is
now the need for a mechanism to determine how it works in a specific
situation,  I’ve been doing a lot of reading on the history of US corporate
and securities law, and the striking thing about it is how passive Congress
has been, and how the major decisions and laws come out of case law from the
Courts and SEC actions.  Securities Exchange Act of 1934 section 10(b) (one
paragraph) gives rise to SEC Rule 10(b)-5 (three paragraphs) which gives rise
the the entire structure of US Securities Law.

It will be interesting to see how this process occurs in the PRC.  The two
models that I can see is that there will eventually be something in the NPCSC
which is akin to Judicial Committee of the House of Lords or French Court of
Cassation, an administrative law system coming out of the State Council which
will resemble the French Council of State or the US system of Article I
administrative law judges, or having the People’s Courts develop a system of
precedent with respect to securities and corporate law, or most likely an odd
combination of all three.

The development of corporate and securities law in the PRC is also important,
because that is one area in which the “democratic deficit” isn’t a major
handicap.  Most of the time, there is very little public interest in
corporate and securities law, and when there is interest it is in response to
a crisis or scandal in which the legislature is pressured to “do something”
without too many restrictions on what that something is.  In some ways the
fact that the NPCSC is insulated from popular pressure makes it easier for it
to act as a “House of Lords” rather than as a deliberative popular assembly.

It would be interesting to see how this all turns out.

Post on Han Learning

Filed under: academia, china, confucianism, history, law — twofish @ 2:26 am

http://www.chinahistoryforum.com/index.php?showtopic=15534

QUOTE(Yun @ Dec 31 2006, 10:58 AM) *

I am very impressed by your being able to relate your profession as an astrophysicist to the Han Learning tradition. But I’m afraid your characterization of the Han Learning vs. Song Learning debate seems to be incorrect. Essentially, it was Zhu Xi Neo-Confucianism (i.e. Song Learning) that elevated the Four Books and reinterpreted them in certain ways to purge influences from Daoism and Buddhism, using the argument that Confucianism has been distorted ever since the Han period. Han Learning was a reaction against this blanket dismissal of Han scholarship. Han Learning scholars attempted to restore the importance of the Five Classics which had been eclipsed by the Four Books, and also criticized the liberties that Neo-Confucians like Zhu Xi took in interpreting ancient texts to suit the Neo-Confucian agenda. Furthermore, they were able to prove that some of the classic texts that Song Learning used to justify its doctrines were really post-Han forgeries, the most prominent such forgery being the then-standard version of the Old Text Shangshu.

Correct. And Han Learning scholars such as Dai Zhen then accused Zhu Xi of being overly influenced by Buddhism and Daoism and in order to recover the “pristine copies” of the ancient classics, the Han Learning scholars then turned to evidential research, which meant careful research into philology and language in order to remove the Buddhist contamination. This lead them to research astronomy and mathematics which they believed would be the key to deciphering the ancient classics and return China to the pre-Han golden age. Until the Sino-Japanese War, they were convinced that the science and technology that they were seeing coming from Europe was merely “lost ancient Chinese knowledge” that the Europeans had merely refined. After 1895, this belief was unsupportable, but you see the academies in Zhejiang and Jiangsu which had been founded to conduct evidential research reorient themselves to continue research in astronomy and mathematics, and around this time you have the first foreign students to Japan and the United States, which after a generation or two, leads to me…..

So there is a pretty direct line of transmission between the Han Learning school and me. The irony of the school is that they methods that were using to reconstruct the pre-Han “golden age” by demanding strict observation and evidence (i.e. scientific investigation) would later demonstrate that the golden age that they were looking for, never existed, and that would cause a crisis that would effectively end Han Learning in the 19th century.

At the same time, even though the philosophy of the Han Learning school undermined their project, they do form most of the basis for how I look at the world. I reject the rationalism of Zhu Xi and the possibility of sage enlightenment by pure thought, and the believe that reason should overcome emotion in all cases. Instead, my philosophy emphasizes the need to “seek truth from fact,” emphasizes moral uncertainty, and dismisses the possibility of moral perfectability. It also explains my interest in astronomy, law, and history, which are all efforts to understand the cosmic order.

Because I come from Han Learning rather than Song Learning, I also am at odds with those that would elevate Confucianism to a national religion or the “New Confucianism” which attempts to create a “secular religion.” I’d argue that by emphasizing the Song Learning/Buddhist need to go beyond feeling to rational thought that the “New Confucianism” creates a philosophy which is detached from the human experience.

There are a lot of differences between what I believe and what the Han Learning scholars believed. I’m nowhere as hostile toward Buddhism as they were. I live in a world where China is a nation-state is a rapidly globalizing world rather than a “world civilization.” I’m far more interested in physics and engineering than they were. And most importantly, I realize that their original goal won’t work. However, the basic philosophy of the evidential school outlives their original goals and leads naturally to the epistemology and methods of science in much the same way that medieval scholastics in Europe moved toward the philosophy of science, notwithstanding the fact that it destroyed their original goal (which was to mathematically and logically prove the existence of God).

Thoughts on Peter Perdue’s “China Marches West”

Filed under: academia, asian am, china, hayek, massachusetts institute of technology, taiwan — twofish @ 1:45 am

I had the pleasure of reading Peter Perdue’s book “China Marches West – The Qing Conquest of Central Eurasia” this afternoon. One of the things that I found most useful about the book was the last chapter in which Perdue summarizes a lot of the recent scholarship in the Qing dynasty, and then tries to connect them with recent scholarship on nationalism. Perdue points out (correctly) that nationalist readings of history tend to have several characteristics, one of which is that they are telelogical, in that they imply that the present is the inevitable result of the past, and they imply the existence of “natural boundaries.” Unlike a series of what I call “China-debunking” literature, Perdue even-handed (and I think correctly) points out that these characteristics are common across all nationalisms.

Personally, I tend to agree that nationalist histories are “constructed products” and my own thinking on this is borrowed from Benedict Anderson’s work “Imagined Communities.” By “constructed” I don’t (and I don’t think either Anderson or Perdue) mean “fake.” But rather than a natural outcome of facts, to create a history and nationalistic narrative or national identity requires conscious effort.

I know, since I’ve had to create my own narrative.

One of the interesting connections was that one of the first classes I took at MIT was a seminar on the Asian-American identity given by Professor Perdue and Professor Sally Deutsch. Creating an identity has been a struggle for me, and it has also been increasingly important now that I have kids, and am trying to figure out what to teach them. National identity has touched every aspect of my life. It touches who I married, what I teach my kids, what jobs I take or don’t take, where I live, and every other decision I make. And the discovery that I made was that none of the “off the shelf” identities really worked for me. So it was a liberating discovery to learn that national boundaries, national histories, and national identities, were constructed. If the “off the shelf” identities don’t work, then I can create my own, and I have proceeded to do so out of Chinese nationalism, American nationalism, combining with the “nationalisms or sub-nationalisms” of Taiwan and Texas. I’ve come up with something that works……

As long as war doesn’t break out in the Taiwan straits….. Fortunately that is looking less likely, and one thing that I figured out a few years ago, was that if a war did break out in the Taiwan straits, my life would be in shambles, and so would the lives of the people around me even if they had blonde hair and blue eyes and ancestors that came from Ireland.

One thing that is very different in 2006 than in 1987 is how far progressed globalization has progressed. In 1987, I was a little embarassed to have as strong feelings for Chinese nationalism as I did. The dominant paradigm was the “melting pot” in which I and my kids would lose their Chinese characteristics and assimilate into the American mainstream much as the immigrants of Eastern Europe did. This made me uncomfortable because I felt as if I’d lose some precious if that happened, even if I was unable to articulate exactly what. At the same time, I had this deep fear that I’d be completely out of place in “China” and find it totally alien and different.

Those fears are still there, but globalization has lessened a lot of it. It is becoming more and more obvious that being able to more or less move between a Chinese and an American identity is not a handicap, but it is something in fact that multi-national corporations find desirable. There is still the fear of being seen as a “traitor” or a “foreigner” but that is increasingly being lessened by the fact that more and more of the world is becoming like me. A person with connections to various parts of the world, and has to figure out how to integrate these different parts of themselves.

And in this all, I find one commonality between Qing China and the United States which is very touching and gets back to MIT. Both societies faced the difficulty of trying to integrate people of very different languages and ethnicities into a functioning whole, and in both cases, part of the solution involved creating an academic system. In the case of Qing China, it was to use the system of Imperial examinations to create a shared sense of communal values. In the case of the United States, it was through the use of public schools and an excellent university system. In the case of Qing China, the value system that was promoted was one based on classical Confucian learning. In the case of the United States, the value system is a civic religion based on the Constitution and the values that underlie it. Ultimately, these two value systems are not in conflict (I would hope).

And looking at history, this correspondence is not accidental. My great-grandparents adopted the value system that was promoted by the Imperial examination system. Those values were transmitted to me, which is why I was attracted to something similar and feel such a strong attraction to academia and why I ended up at MIT.

But in trying to puzzle all of this out, I had to cross a lot of boundaries, which made me question the “naturalness” of the historical boundaries, and made me realize that they were as “constructed” as the national histories.

One final thing. One characteristic of national histories is their telelogical nature (which is known as the Whig view of history), every event is portrayed as being the inevitable set of events which leads up to the present. In giving up the sense of historical inevitablity, one gives up a lot of security, but one gains something far greater. Freedom and the scary realization that people’s decisions matter.

If the present is not the inevitable result of the past, then it follows that the future is not the inevitable result of the present. The world we see today is the result of people’s decisions and random events mixed together. If people had decided to do different things, the world would be different, but that means that the decisions we make today will influence the future. This puts an awesome and scary responsibility on us to make correct decisions.

And on what basis should those decisions be made???

One thing that I’ve learned in looking at history is that the decision about what flag you wave or what uniform you wear is largely out of your hands. I find myself a deep blue supporter of the Kuomintang because of who my parents where. There is some scope for choice, but that is limited.

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