Why Small is Beautiful

At the Daily Reckoning, Dominic Frisby has a splendid article on why small societies have mostly been prosperous

First Mr. Frisby notes of the role played by decentralization and centralization in shaping Italy's present conditions

In the story of man, Italy has twice been the global center of innovation and invention — once under the Romans, and then again during the Renaissance, when it produced such great men as Leonardo da Vinci, Michelangelo and Galileo. No other part of the world can claim such an emphatic double — not China, not Britain, not the USA. You cannot doubt the potential of the Italian people. You cannot doubt their talent.

Yet throughout the 20th century, Italy has been (and still is) a cradle of corruption, political infighting, bureaucracy, crime (think Mafia and Camorra), corruption, rent-seeking, inflations, division, fascism, communism and goodness knows what else. Its state is bloated, its political system dysfunctional. The country might be nominally unified, but in reality it is anything but.

Where did Italy go wrong? The answer: It unified.

Admittedly, this unification was forced on it. As the city-states lost their independence, it came under foreign domination, first under Spain (1559-1713), then Austria (1713-1796), then France, then the Austrians again. Finally, in the mid-19th century, came the Italian Wars of Independence, unification, and birth of the Italy we know today.

Next he narrates a short history of "small is beautiful" in the global context.

Small is beautiful. In A.D. 1000, Europeans had a per capita income below the average of the rest of the world. China, India, and the Muslim world were richer and had superior technology: China had had the printing press for 400 years. Her navy “ruled the waves.” Even as late as 1400, the highest standards of living were found in China, in the robust economies of places like Nanjing. But the empires of the East became centralized and burdened with bureaucracy and taxes.

In Western Europe, however, made up of many tiny nation-states, power was spread. There was no single ruling body except for the Roman Catholic Church. If people, ideas, or innovation were suppressed in one state, they could quickly move to another, so there was competition. The cities, communes, and maritime republics that made up what we now call Italy — Genoa, Rome, and Florence, for example — became immensely prosperous. Venice in particular showed great innovation in turning apparently useless marsh and islands into a unique, thriving metropolis that would become the wealthiest place in the world.

In the 16th century, the repressive forces of Roman Catholicism, which was becoming corrupt, began to be overturned in Northern Europe. The Bible was translated into local vernacular. The Protestant movement saw deregulation and liberalization. Gutenberg’s printing press, invented a century earlier, was furthering the spread of knowledge and new ideas — and thus the decentralization of power.

Over the next two hundred years, Northern Europe caught up with Southern Europe, which remained Catholic, and then overtook it. First, it was the Dutch, also made up of many small states. Then, in the 18th century, it was England, which, in spite of its union with Scotland and its later empire building, had further dispersed centralized power by reducing the authorities of the monarch after the civil war of 1642-51 and by linking its money to gold.

Meanwhile, out East, the Ottoman Empire and China went into a relative dark age, centrally governed by autocratic or imperial elites, burdened with heavy taxes and slow to react and unable to cope with the plagues and wars that befell them. By 1950, the average Chinese, according to author Douglas Carswell, was as poor, if not poorer, than someone living there a thousand years before.

Third, Small is beautiful exists until today…

Nothing changes… The success of small nation-states continues even today. If you look at the World Bank’s list of the richest nations in the world (as measured by GPD per capita at purchasing power parity), you see Luxembourg, Qatar, Macau, Singapore, Norway, Kuwait, Brunei, Switzerland, and Hong Kong. Perhaps Macau and Hong Kong, as parts of China, should not be included, in which case you add the U.S. and the United Arab Emirates (similar nations appear on the International Monetary Fund’s list).

Why is being small beautiful?

In a small state, there is less of a gap between those at the top and bottom, there is more transparency and accountability, it is harder for the state to hide things, there is more monitoring, less waste and more dynamism. Small is flexible, small is competitive — small really is, as economist E.F. Schumacher said, beautiful.

Read the rest here

Small is beautiful because of decentralization. Decentralization promotes a culture of spontaneous diversity, heterogeneity, specialization, tolerance of failure, trial and error, and competition necessary for greater efficiency in the allocation of resources and innovation.

Decentralization thus extrapolates to individual advancement that accrues to, and reflects on the society level.

In short, small is beautiful because it is a bottom up dynamic where commerce or free markets drive real (not statistical) prosperity

Importantly decentralization disperses risks and promotes legal institutions which have mostly been attuned with local customs, traditions and grassroots social interactions.

Decentralization also is an optimum way for people to convert localized knowledge into productive activities.

As the great Austrian economist Friedrich von Hayek wrote: (bold mine)

If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization. But this answers only part of our problem. We need decentralization because only thus can we insure that the knowledge of the particular circumstances of time and place will be promptly used. 

In centralized political systems, “small is beautiful” can be seen in the informal economy.

And with the fast advancing information age, the world will eventually evolve towards decentralization. But the transition will not be smooth as the friction from the resistance to change by 20th century based centralized political systems vis-à-vis technology based decentralization have only intensified.

War on the Internet: Meshnet activists Rebuilds the Net from Scratch

In anticipation that the US government will require the surrendering of customer’s data, two small email providers including Lavabit, a Texas-based service that was reportedly used by whistleblower Edward J. Snowden, decided to preempt them by shutting down and destroying their servers.

Such are examples of how government has used the web not only to expand their power but to mount repressive policies on their constituents. 

At the same time these are examples how government policies rob economic opportunities of small businesses (favoring the big ones).

However markets aren’t taking this slippery slope of privacy invasion sitting down. Some entities has taken into their own hands the rebuilding of the internet from scratch.

From the New Scientist 

Across the US, from Maryland to Seattle, work is underway to construct user-owned wireless networks that will permit secure communication without surveillance or any centralised organisation. They are known as meshnets and ultimately, if their designers get their way, they will span the country.

Dan Ryan is one of the leaders of the Seattle Meshnet project, where sparse coverage already exists thanks to radio links set up by fellow hackers. Those links mean that instead of communicating through commercial internet connections, meshnetters can talk to each other through a channel that they themselves control.

Each node in the mesh, consisting of a radio transceiver and a computer, relays messages from other parts of the network. If the data can't be passed by one route, the meshnet finds an alternative way through to its destination. Ryan says the plan is for the Seattle meshnet to extend its coverage by linking up two wireless nodes across Lake Union in downtown Seattle. And over the country at the University of Maryland, Baltimore County, student Alexander Bauer is hoping to build a campus meshnet later this year. That will give his fellow students an alternative communications infrastructure to the internet.

While these projects are just getting off the ground, a mesh network in Catalonia, Spain, is going from strength to strength. Guifi was started in the early 2000s by Ramon Roca, an Oracle employee who wanted broadband at his rural home. The local network now has more than 21,000 wireless nodes, spanning much of Catalonia. As well as allowing users to communicate with each other, Guifi also hosts web servers, videoconferencing services and internet radio broadcasts, all of which would work if the internet went down for the rest of the country.

So successful is the community model that Guifi is now building physical fibre-optic links to places like hospitals and town halls where it can help carry the heaviest traffic.

The development of the “new” guerilla internet doesn’t totally bypass the current system.

Again from the same article:

Hyperboria, the virtual layer that underpins meshnet efforts in the US. Hyperboria is a virtual meshnet because it runs through the existing internet, but is purely peer-to-peer. This means people who use it exchange information with others directly over a completely encrypted connection, with nothing readable by any centralised servers.

When physical meshnet nodes like those in Maryland and Seattle are set up, existing Hyperboria connections can simply be routed through them. At the moment, Hyperboria offers a blogging platform, email services, and even forums similar to reddit.

Unlike sheep or automatons, the above shows how people respond to incentives. The war on the internet will signify a cat and mouse relationship in the deepening age of decentralization.

Quote of the Day: Liberalism’s trifecta

The industry was liberalism’s trifecta: newspapers, television networks, and the school system. Two are bleeding red ink. The third soon will be, as online education enables students to live at home, take courses online, graduate with accredited degrees, and pay $15,000 in tuition, total. A widely accepted estimate is that half of all American universities will go under over the next five decades. It won’t take anywhere near that long. The no-name private colleges will go under first, Cutbacks in tax funding will complete the procedure. Legislators will figure out that they can fire two-thirds of the faculty and replace them with online lectures and low-paid, untenured professors and graduate students to grade written exams.

All that liberalism will have left is the public school system, K-12. This dinosaur has been caught trapped in the tar pit ever since 1963, when SAT scores peaked. Online education is invading today. The American Federation of Teachers is on the defensive. In 50 years, the suburban schools will be online. Competition will demonstrate that the public school bureaucracies cannot compete.

Liberalism made entrepreneurial decisions on where the future was headed. The World Wide Web is taking the world in a different direction. It is leaving liberalism behind.

Liberals call this process of ideological decentralization “Balkanization.” I call it the break-up of a cartel that can no longer compete on the free market.

This is from Austrian economist Gary North at the lewrockwell.com. Decentralization will likewise erode the 20th century top-down political institutions.

How the Detroit Syndrome will Affect Industrial era Urbanization

Finally someone in the mainstream partly shares my view on why the centralization “urbanization” paradigm of economic growth represents a passe model as the world transitions to the post industrial or information age.

From Deutsche Bank’s global strategist Sanjeev Sanyal writing at the Project Syndicate (bold mine) hat tip Zero Hedge

The problem with this post-industrial urban model is that it strongly favors generalist cities that can cluster different kinds of soft and hard amenities and human capital. Indeed, the growth dynamic can be so strong for some successful cities that they can hollow out smaller rivals (for example, London vis-à-vis the cities of northern England).

Some specialist cities could also do well in this world. But, as Detroit, with its long dependence on the automotive industry, demonstrates, cities that are dependent on a single industry or on a temporary location advantage may fare extremely poorly.

All of this has important implications for emerging economies. As it transformed itself into the “factory of the world,” the share of China’s urban population jumped from 26.4% in 1990 to around 53% today. The big, cosmopolitan cities of Beijing and Shanghai have grown dramatically, but the bulk of the urban migration has been to cookie-cutter small and medium-size industrial towns that have mushroomed over the last decade. By clustering industrial infrastructure and using the hukou system of city-specific residency permits, the authorities have been able to control the process surprisingly well.

This process of urban growth, however, is about to unravel. As China shifts its economic model away from heavy infrastructure investment and bulk manufacturing, many of these small industrial cities will lose their core industry. This will happen at a time when the country’s skewed demographics causes the workforce to shrink and the flow of migration from rural areas to cities to slow (the rural population now disproportionately comprises the elderly).

Meanwhile, the post-industrial attractions of cities like Shanghai and Beijing will attract the more talented and better-educated children of today’s industrial workers. Unlike rural migrants heading for industrial jobs, it will be much more difficult to guide educated and creative professionals using the hukou system. The boom in the successful cities, therefore, will hollow out human capital from less attractive industrial hubs, which will then fall into a vicious cycle of decay and falling productivity.

Stories like Detroit’s have played out several times in developed countries during the last half-century. And, as the fate of Mexico’s northern towns suggests, emerging economies are not immune from this process.

This shows of the evolving transition from the industrial centralized based economy towards knowledge based decentralized economy

This also means that central planning or government infrastructure spending based on the urbanization model will eventually translate to huge losses for society.

But again taxpayers will bear the burden for the miscalculations of presumptuous popularity and vote seeking policymakers

 

From Smartphones to the Internet of Things

The team at Lux Research foresees a transition from Smartphones to the Internet of things: (hat tip Lux’s founder/Forbes contributor Josh Wolfe) [bold original]

“Smartphones plateau and decline.” It could be the title of a scary summer shark flick for the electronics industry, but it’s a reality that a mounting body of evidence supports: handset sales, profits, app downloads, and even innovation itself are flatlining, hitting financials at Samsung and Apple (which both now spend more on patent litigation than R&D) while RIM, HTC, and Nokia struggle to survive at all. In the same process that desktops, notebooks, feature phones, PDAs, and every other information appliance in history has passed through, smartphones are poised to peak and then plummet between now and 2016, leaving electronics industry execs scrambling for the safety – the next big thing

So what are the next big things?

-Wearables includes Smart watches and glasses

-The Internet of Things (IOT) which comprises Low-cost computing, communications, and sensors

-Industrial IOT such as Smart buildings, water management and more

-The Lux team calls the “blue ocean strategy” the biggest promise of all. This is the networking things in motion. The things that move – from smart-textile garments and self-driving cars to robots and satellites

Read the rest here

The information age will continue to pave way for radical advances in creative destruction, disruptive- innovation technologies that will reconfigure people’s lifestyles, and thus the economic environment. For investors, these represent as profit opportunities to ponder at.

Is Stem Cell therapy the cure for HIV?

I am a fan of technology. For me, advances in technology serves as the foundation for the great transition: From the mass based top-bottom social phenomenon known as the industrial age to the niche and specialization based bottom-up dynamic called the information age-digital economy. 

So when I encounter what appears as potential breakthroughs, I post them here.

Is Stem Cell therapy the cure for HIV?

From Reuters:

Two men with HIV have been off AIDS drugs for several months after receiving stem-cell transplants for cancer that appear to have cleared the virus from their bodies, researchers reported on Wednesday.

Both patients, who were treated in Boston and had been on long-term drug therapy to control their HIV, received stem-cell transplants after developing lymphoma, a type of blood cancer.

Since the transplants, doctors have been unable to find any evidence of HIV infection, Timothy Henrich of Harvard Medical School and Brigham and Women's Hospital in Boston told an International AIDS Society conference in Kuala Lumpur.

While it is too early to say for sure that the virus has disappeared from their bodies altogether, one patient has now been off antiretroviral drug treatment for 15 weeks and the other for seven weeks.

Last July Henrich first reported that the two men had undetectable levels of HIV in their blood after their stem-cell treatment, but at that time they were still taking medicines to suppress HIV.

Using stem-cell therapy is not seen as a viable option for widespread use, since it is extremely expensive, but the latest cases could open new avenues for fighting the disease, which infects about 34 million people worldwide.

There are many implications from these developments whether social, moral, commercial and etc…, nonetheless stem cell technology could just one be significant area for advances in healthcare.

War on Bitcoins: US States Tighten Noose on Bitcoins

Increasingly desperate governments in fear of competition from their monopoly privilege over money have been in the process of tightening the noose on bitcoin, whose popularity has been gaining ground. 

From the Wall Street Journal:

State regulators are warning virtual-currency exchanges and other companies that deal with bitcoin that they could be closed down if their activities run afoul of state money-transmission laws, according to people familiar with the matter.

According to people familiar with the situation, banking regulators in California, New York and Virginia in recent weeks have issued letters telling the companies that they need to follow the state rules or prove that the rules don't apply to them.

The warnings fall short of formal "cease and desist" orders, which would demand that the companies immediately stop engaging in their business, these people said.

Bitcoins essentially promotes the blackmarket or the informal economy or economic activities outside the control of governments.

The growing popularity of digital cryptocurrencies led by bitcoin extrapolates to the intensifying growth of the informal economy. The informal economy in the US has reportedly doubled since 2009

And growing blackmarkets or informal economy reduces the capacity of governments to seize or confiscate resources from her ‘dissentious’ constituents directly via taxes and indirectly via financial repression and thus is seen as a threat to government’s monopoly on money

And as I have previously explained:

Bitcoins are supposedly decentralized. So technically speaking the US government cannot directly strike at bitcoin without taking on the internet itself. Thus the US government’s campaign against bitcoin has been channeled through the financing facilities of the trading platforms and not bitcoin itself…

The US government wants bitcoin dealers to operate under their umbrella and has assailed or harassed those operating outside their ambit.

In short, the governments will work on controlling cryptocurrencies covering all variants; aside from Bitcoin:Litecoin, PPcoin, Freicoin, Solidcoin, BBQcoin, Fairbrix, Geistgeld among the many more.

Under today’s highly fragile financial conditions which may anytime metastasize or implode into a global debt crisis, as seen via the unfolding upheavals in the bond markets, any possible challengers to the political establishment whether gold and precious metals, cryptocurrencies  or bizarrely even cash transactions, represents the grand scheme of slippery slope events designed to deepen political and economic repression to preserve the privileges of the beneficiaries of the industrial age political system. 

Resistance to change would only mean a disorderly transition.

Spielberg-Lucas Fearless Forecast: Movie Industry Will Implode!

I have been constantly saying that the information age will reconfigure almost every aspect of our lives. And much of the social frictions I have been posting here signifies as the angst of the transition from the legacy of the industrial age dynamics of top down, centralized and mass production, mass media and mass market forces to the decentralized, bottom up, highly specialized, niche production, niche media and niche based market forces of the information age.

Movie moguls Steven Spielberg and George Lucas predicts that the movie industry will suffer a disorderly evolution. Hollywood may suffer a meltdown!

Here is David Cohen from the Variety.com (bold mine)

Looking into their crystal ball, George Lucas and Steven Spielberg predicted the imminent arrival of a radically different entertainment landscape, including pricey movie tickets, a vast migration of content to video-on-demand and even programmable dreams.

Speaking on a panel at the USC School of Cinematic Arts, Spielberg and Lucas took a grim view of the future of the majors and predicted theatrical motion pictures will become a niche market.

“They’re  going for the gold,” said Lucas of the studios. “But that isn’t going to work forever. And as a result they’re getting narrower and narrower in their focus. People are going to get tired of it. They’re not going to know how to do anything else.”

Spielberg noted that because so many forms of entertainment are competing for attention, they would rather spend $250 million on a single film than make several personal, quirky projects.

“There’s eventually going to be a big meltdown,” Spielberg said. “There’s going to be an implosion where three or four or maybe even a half-dozen of these mega-budgeted movies go crashing into the ground and that’s going to change the paradigm again.”

This would be the forces of creative destruction at work, which should benefit the movie consumers as well as the industry, who will have to compete to reformat or restructure to suit the desires of the consumers, overtime.

NSA Spying sends George Orwell’s 1984 Books Sales Soaring; The Age of the Leakers

Whistleblower Edward Snowden’s expose of the NSA’s spying on Americans has sent sales of George Orwell’s 1984 soaring.

From the Bloomberg:

Sales of George Orwell’s novel “1984,” featuring a futuristic totalitarian state, jumped on Amazon.com Inc. (AMZN)’s website following reports of a classified program that lets the U.S. government collect personal data.

One edition of the book, which was originally published in 1949, moved to the No. 5 spot on Amazon’s Movers & Shakers list, which tracks dramatic increases in sales volume over a 24-hour period. That makes it the 125th-best-selling book on the site, an increase from its previous rank of 7,397.

The sales gains come after the revelation of a top-secret electronic-surveillance program that allows the National Security Agency and the Federal Bureau of Investigation to access data from audio and video chats, photographs, e-mails, documents and connection logs from the biggest U.S. Internet companies. The Washington Post and the U.K.-based Guardian reported the program’s existence last week.

Orwell’s novel portrays a dystopian society where individuals are monitored through ubiquitous television screens and overseen by a leader called Big Brother.

(mask of British renegade Guy Fawkes)

I am reminded of the movie  V-for Vendetta  which looks apropos on the theme of neutralizing of the tyranny of Big Brother.

Nonetheless, the Snowden-NSA episode exhibits the shifting of the balance of power of media and whistle blowers which has been undergirded by the information age.

Austrian economist Gary North calls this the age of leakers:

Edward Snowden is now the talk of the town — and the world. His story on the NSA’s PRISM spying system has given exposure to a story that NSA expert James Bamford had exposed in 2008, but which no one in the mainstream media bothered to promote.

Snowden went to the Washington Post first, but when the Post waffled, he dropped them and went to Glenn Greenwald, a pro-civil rights lawyer who lives in Brazil and writes for The Guardian, a British newspaper/website. Greenwald wrote up the story as Snowden gave it to him, thereby scooping the world. He gets 100% credit, as does The Guardian. The Washington Post gets also-ran status.

These days, a leaker with a story can get his story out his way. There is always a journalist somewhere who will run it. If it’s in a major publication, which The Guardian is, the story will get coverage.

A leaker no longer has to do it anyone else’s way. He can do it his way.

This has put governments on the defensive. Because the Web acknowledges no borders, a story gets picked up and sent around irrespective of where it was published. The Guardian does not operate in the USA. It is not in the shadow of the U.S. government. It owes the U.S. government nothing. It is not dependent in any way on the U.S. government. So, the Administration’s spin-meisters have no leverage over The Guardian.

This is the age of the leakers. They can get their stories out to the public by doing an end run around their nation’s fearful mainstream media.

There are no more national gatekeepers. If a newspaper reporter wants a scoop, he will have to do it the leaker’s way — otherwise, he will be an also-ran.

The above only exhibits of the erosion of mainstream media’s centralized control over information and likewise political power.

The age of the leakers include Wikileaks and the Anonymous and myriad forms of social media.

UK’s Blossoming Libertarian Movement?; The Clash of Generations

The libertarian movement seems to be blossoming among English youths.

The Economist observes:

Polls show that the young are more relaxed than others about drugs, sex, alcohol, euthanasia and non-traditional family structures. They dislike immigration, but not as strongly as do their elders. And they are becoming ever more liberal. The BSA has tracked attitudes for three decades. It shows that the young are now far more tolerant of homosexuality, for example, than were previous generations at the same age.

Experimenters with new technologies, fashions and ideas, young people in Britain and elsewhere have long tweaked established social institutions. But their iconoclasm goes further than this. Young Britons are classical liberals: as well as prizing social freedom, they believe in low taxes, limited welfare and personal responsibility. In America they would be called libertarians.

Here is where it gets interesting:

More than two-thirds of people born before 1939 consider the welfare state “one of Britain’s proudest achievements”. Less than one-third of those born after 1979 say the same. According to the BSA, members of Generation Y are not just half as likely as older people to consider it the state’s responsibility to cover the costs of residential care in old age. They are also more likely to take such a hard-hearted view than were members of the famously jaded Generation X (born between 1966 and 1979) at the same stage of life.

The above shows of the intensifying generational conflict brought about by the welfare state.

People “born before 1939” have been the primary beneficiaries of UK’s welfare programs which originated during the 1906-1914 Liberal Welfare Reforms era.  In a Ponzi scheme, they represent the initial investors whose "return" “are “paid out of the investments of new entrants”.  

The new entrants in today’s Ponzi-welfare programs are the young generation, who plays the role of funding the entitlements of the Liberal Welfare generation, which has been intermediated by UK’s welfare state. 

The fragile state of UK’s fiscal conditions reveals that welfare expenditures account for the 25.9% of GDP according to the Wikipedia.org.  This has substantially contributed to the UK’s deteriorating debt conditions now at 90% of GDP. The above chart reveals of the breakdown of UK’s government spending budget

Given the increasing burden from entitlements which has been shouldered by today’s youths, welfare programs are getting to be less appreciated. The wider the generation gap, the more likely resistance on welfare policies.

Add to this globalization and the deepening of the information age,  the rise of UK classical liberals would seem like a natural outgrowth

Yet should libertarian politics deepen, this will likely worsen generational conflict at the risks of triggering social upheaval. Parasites will struggle to resist from losing their hosts.

Nonetheless UK classical liberal-libertarians seem as gaining significant grounds in terms of politics. 

The UK’s Independence Party (UKIP) said to be a democratic libertarian party headed by Nigel Farage may win next year’s European Parliament elections.

From Daily Mail

David Cameron expects the UK Independence Party to win next year’s European Parliament elections despite his pledge to hold an in/out referendum on Europe.

A senior Conservative source said it was now taken as a ‘reasonable assumption’ in Downing Street that UKIP would top the poll next May – sparking a fresh round of Tory bloodletting on Europe just 12 months before the General Election.

The UKIP also performed strongly in the latest local elections.

From the Telegraph:

Nigel Farage, the party’s leader, was jubilant after it emerged that one in four voters supported Ukip in the elections in 35 councils in England and Wales.

The rise of the party cost the Conservatives three local authorities, although Ukip did not win control of any councils.

So the rising politics of decentralization or the renaissance of classical liberalism likewise chimes with the deepening of the information age.

Incidentally, in the latest protest against the Turkish government, this headline seem to herald the spreading of classical liberal-libertarian movement across the world (hat tip Cato’s David Boaz)

Protesters are young, libertarian and furious at Turkish PM, says survey

KPCB's Mary Meeker: Internet Trends 2013

For technology buffs, find below the global internet trends as presented by the slideshow of KPCB's Mary Meeker and Liang Wu (courtesy of Slideshare.net)

KPCB Internet Trends 2013 from Kleiner Perkins Caufield & Byers

How a 3D Printer Helped Save a Dying Baby

3D Printing makes another leap towards revolutionizing medicine

From CNN (hat tip AEI's Mark Perry) 

When he was 6 weeks old, Kaiba Gionfriddo lay flat on a restaurant table, his skin turning blue. He had stopped breathing.

His father, Bryan, was furiously pumping his chest, trying to get air into his son's lungs.

Within 30 minutes, Kaiba was admitted to a local hospital. Doctors concluded that he had probably breathed food or liquid into his lungs and eventually released him.

But two days later, it happened again. It was the beginning of an ordeal for the Youngstown, Ohio, family that continued day after agonizing day.

"They had to do CPR on him every day," said April Gionfriddo, Kaiba's mother, who later found out her son had a rare obstruction in his lungs called bronchial malacia. "I didn't think he was going to leave the hospital alive."

With hopes dimming that Kaiba would survive, doctors tried the medical equivalent of a "Hail Mary" pass. Using an experimental technique never before tried on a human, they created a splint made out of biological material that effectively carved a path through Kaiba's blocked airway.

What makes this a medical feat straight out of science fiction: The splint was created on a three-dimensional printer.

Read the rest here

War on 3D Printed Guns: US Government Censors 3D Blueprints

Here is what I earlier wrote

With the proliferation of 3D printed guns, the next step governments will likely take is to regulate 3D.

As predicted, the US government forced a takedown of 3D gun blueprints

From the Forbes:

The battle for control of dangerous digital shapes may have just begun.

On Thursday, Defense Distributed founder Cody Wilson received a letter from the State Department Office of Defense Trade Controls Compliance demanding that he take down the online blueprints for the 3D-printable “Liberator” handgun that his group released Monday, along with nine other 3D-printable firearms components hosted on the group’s website Defcad.org. The government says it wants to review the files for compliance with arms export control laws known as the International Traffic in Arms Regulations, or ITAR. By uploading the weapons files to the Internet and allowing them to be downloaded abroad, the letter implies Wilson’s high-tech gun group may have violated those export controls.

“Until the Department provides Defense Distributed with final [commodity jurisdiction] determinations, Defense Distributed should treat the above technical data as ITAR-controlled,” reads the letter, referring to a list of ten CAD files hosted on Defcad that include the 3D-printable gun, silencers, sights and other pieces. “This means that all data should be removed from public acces immediately. Defense Distributed should review the remainder of the data made public on its website to determine whether any other data may be similarly controlled and proceed according to ITAR requirements.”

Unfortunately for the US government, the markets have already anticipated such a move. There has been more than 100,000 downloads of the blueprint prior to the takedown.

Again from the same article:

Wilson, a law student at the University of Texas in Austin, says that Defense Distributed will in fact take down its files until the State Department has completed its review. “We have to comply,” he says. “All such data should be removed from public access, the letter says. That might be an impossible standard. But we’ll do our part to remove it from our servers.”

As Wilson hints, that doesn’t mean the government has successfully censored the 3D-printable gun. While Defense Distributed says it will take down the gun’s printable file from Defcad.org, its downloads–100,000 in just the first two days the file was online–were actually being served by Mega, the New Zealand-based storage service created by ex-hacker entrepreneur Kim Dotcom, an outspoken U.S. government critic. It’s not clear whether the file will be taken off Mega’s servers, where it may remain available for download. The blueprint for the gun and other Defense Distributed firearm components have also been uploaded several times to the Pirate Bay, the censorship-resistant filesharing site.

So the US government will have to extend its censorship to cover New Zealand based Mega and Pirate Bay.

But since the technology is already out, this will find various ways to spread. Thus the US government will have their hands full in instituting controls.

The cat and mouse chase between marketplace and regulators on the 3D technology has began.

Flying Cars are Now a Reality

Step aside Marty Mcfly**, flying cars are now a reality.

**fictional character from the Back to the Future Trilogy

From the Daily Mail (including Photos) (hat tip lewrockwell.com)

The first flying cars are set to go on sale to the public as early as 2015.

Terrafugia has announced its Transition design, which is part sedan, part private jet with two seats, four wheels and wings that fold up so it can be driven like a car, will be on sale in less than two years.

The Massachusetts-based firm has also unveiled plans for a TF-X model that will be small enough to fit in a garage, and won't need a runway to take off.

Pls read the rest here

One thing leads to another. The flying car technology will mean more variants. Not only are these products of the marketplace, they are signify the deepening transition to the information age.

The World’s First Fully 3D Printed Gun: The Liberator

The advent of 3D printing technology are one of the many major manifestations of the deepening information age or the digital economy.

Meet the world’s first entirely 3D Printed Gun: the Liberator

Writes Andy Greenberg at the Forbes

Eight months ago, Cody Wilson set out to create the world’s first entirely 3D-printable handgun.

Now he has.

Early next week, Wilson, a 25-year-old University of Texas law student and founder of the non-profit group Defense Distributed, plans to release the 3D-printable CAD files for a gun he calls “the Liberator,” pictured in its initial form above. He’s agreed to let me document the process of the gun’s creation, so long as I don’t publish details of its mechanics or its testing until it’s been proven to work reliably and the file has been uploaded to Defense Distributed’s online collection of printable gun blueprints at Defcad.org.

Update: Here’s my full account of Defense Distributed’s first test-firings of the Liberator, including firing it by hand.

All sixteen pieces of the Liberator prototype were printed in ABS plastic with a Dimension SST printer from 3D printing company Stratasys, with the exception of a single nail that’s used as a firing pin. The gun is designed to fire standard handgun rounds, using interchangeable barrels for different calibers of ammunition.

Technically, Defense Distributed’s gun has one other non-printed component: the group added a six ounce chunk of steel into the body to make it detectable by metal detectors in order to comply with the Undetectable Firearms Act. In March, the group also obtained a federal firearms license, making it a legal gun manufacturer.

The 3D printing technology continues to evolve. From simple tools, 3D printers have now covered complex products such as guns, guitars or even cars. 3D will increasingly make many tools “homemade”. Even healthcare trends will be influenced by 3D, I pointed to jawbone replacement and lately 3D technology has enabled printed lab grown human livers. 

The widening diffusion of 3D printers will reconfigure today’s economic system.

Notice that the current trend of technological innovation leads to decentralization, or bottom-up or niche markets. Such trend basically represents a diametrical opposite of the industrial age platform based on centralization, or top down or mass markets. Yet policymakers have been forcing upon the public, centralized policies that contradicts the direction of markets. So naturally, the struggle for domination will mean social frictions from these antipodal forces.

Take 3D printed guns; 3D will enable the public to autonomously design and manufacture their own guns even at home. So many if not all of the gun control regulations may be rendered “obsolete” by sheer technicalities. This comes even as the media passionately debates on them. 

With the proliferation of 3D printed guns, the next step governments will likely take is to regulate 3D. Such applies also to various vested interest groups, particularly manufacturing and other sectors that will be threatened by the 3D technology.

But since 3D printing or additive manufacturing, as the Wikipedia.org explains represents “a process of making a three-dimensional solid object of virtually any shape from a digital model” implementing social controls on a non-specific module would make such controls ambiguous and or ineffective. So technology will run rings around old industrial era statutes.

In short, the trend of technology advancements and politics have been in a collision course. There will be a winner and a loser.

War on Bitcoin as US Government Tightens Grip

INCREASINGLY desperate governments around the world will resort to various ways and means of preventing people from safeguarding their savings from legal depredation. Thus, the attacks on gold or even cash transactions or hoarding.

Bitcoins are now seen as a threat by the US government and will be subject to "regulations".

Notes the Zero Hedge (bold original)

Just six weeks after the US Treasury decided enough-was-enough with this upstart non-fiat, non-controlled-by-TPTB currency (and applied money-laundering reglations), US financial regulators are now looking for supervisory control over Bitcoin. As The FT reports, CFTC's Bart Chilton notes "it's not monopoly money - real people have real risk in these instruments," and  that regulating the controversial cyber-currency "is sure something [CFTC] needs to explore." Chilton's remit to regulate this "shadow currency" is predicated on it becoming a basis for derivative contracts as opposed to purely transactional (akin to the monitoring of physical oil transactions that can influence crude futures.) Since the Treasury's March decision, at least three North American companies have had their accounts seized by the banks but while this attempt to control the virtual currency follows the ECB's 'ponzi attack' last year, the 'regulators' may note that, "even if US regulations make it hard for Bitcoin businesses to operate in the US, that doesn’t mean it will make it difficult for people to use Bitcoin as a currency in the US. Bitcoin is a world currency."

The war over bitcoins showcases the volatile transition from the industrial age to the information age or the Third Wave.  

It is interesting to see how governments will try to close the gap between the digital marketplace, where the latter would be constantly innovating ahead, while the former will also be constantly in a chase over "controlling" innovations.

 

So far bitcoin has been in consolidation after the recent crash, which has coincided with gold-commodities

US Informal Economy estimated to have DOUBLED to $2 Trillion since 2009

All the financial repression via bailouts, rescues, inflationism, new taxes and regulations from the US mortgage-banking crisis of 2008 have driven many of the average Americans to the informal economy.

From the CNBC:

The growing underground economy may be helping to prevent the real economy from sinking further, according to analysts.

The shadow economy is a system composed of those who can't find a full-time or regular job. Workers turn to anything that pays them under the table, with no income reported and no taxes paid — especially with an uneven job picture.

"I think the underground economy is quite big in the U.S.," said Alexandre Padilla, associate professor of economics at Metropolitan State University of Denver. "Whether it's using undocumented workers or those here legally, it's pretty large."

"You normally see underground economies in places like Brazil or in southern Europe," said Laura Gonzalez, professor of personal finance at Fordham University. "But with the job situation and the uncertainty in the economy, it's not all that surprising to have it growing here in the United States."

Estimates are that underground activity last year totaled as much as $2 trillion, according to a study by Edgar Feige, an economist at the University of Wisconsin-Madison.

That's double the amount in 2009, according to a study by Friedrich Schneider, a professor at Johannes Kepler University in Linz, Austria. The study said the shadow economy amounts to nearly 8 percent of U.S. gross domestic product.

Whether in politics (Boston’s martial law) or in economics (informal economy) the US appears to be sliding down the path towards a banana republic.

Why?

The informal, underground or shadow economy have always been a product or outcome of the politicization of the marketplace.

Proof?

Regulations have been skyrocketing in the US. A big segment of growth comes from the post-crisis years. The number of pages of regulations from the Federal Register has ballooned almost sevenfold since 1940s. Chart from Political Calculations Blog.

Additional regulations means more taxes too.

Number of pages of Federal Tax Rules has swelled by about eight times since the 1940s, where the bulk of the recent expansion of tax rules also occurred during the years of post-US mortgage banking crisis . (Chart from Cato’s Chris Edwards)

Regulations signify as hidden taxes too. 

Estimated compliance costs is at $236 billion in 2012. This would account for 1.5% of the US GDP. By the way, $2 trillion informal economy is about 12.7% of the $15.7 trillion US GDP in 2012. 

Yet there are indirect regulatory costs too.

Overall, the total estimated regulatory costs have been at $1.752 trillion in 2011 according to Competitive Enterprise Institute.  That’s more than 10% of the US economy. Such costs must be a lot more today.

Statistics would not really capture the lost business opportunities from the burdens of additional taxes, regulations and other politics based programs because they are largely invisible or unseen by the public. For instance, I recently pointed out how state authorities shut down a child’s lemonade stand for the lack of license. So one has to be leery of any supposed analytical insights entirely focused on the shouting of statistics or on the dependence on empirical methodology.

We will have to add the burdens of tax and regulatory costs  from Obamacare and Dodd Frank.

That’s not all. There is also the enormous onus from entitlement spending. (chart from Heritage Foundation)…

…and the diminishing purchasing power of the US dollar from the printing presses of the US Federal Reserve since 1913 (chart from visual.ly), whose boom bust cycles have led to the justification of more interventions or “never let a crisis go to waste” dogma. 

So such vicious cycles of government expansion leads to a debt trap.

To cap it, increasing politicization of the marketplace means higher costs of doing business which entails more limitations or restrictions on economic opportunities and diminishing productivity and capital accumulation, which extrapolates to stagnation or a decline in living standards.

Thus when people’s survival is at stake, and where costs of doing formal business is high and increasingly a hindrance, they resort to the informal, underground or the shadow economy.

The digital age via the web has also substantially contributed to the expansion of the informal economy, where the former provides the platform to conduct businesses outside the prying eyes of the government. The emergence of the Bitcoin is a wonderful example.

The growth in the informal economy will also likely be manifested in the evolution of politics. This should translate to a growing divide or the deepening polarization between the productive class and political parasites (political class, cronies, welfare-warfare beneficiaries and the bureaucracy).

Although while informal economies represent as good sign of people’s attempt to generate productivity outside the political realm, they represent as an implied or passive revolt against politics. Alternatively, this also could mean social unrest ahead.

Updated to add: Informal economies will be smeared by the mainstream as illegal and immoral operations (such as drugs, money laundering and etc...). While there could be some, most of them aren't. This would represent as propaganda to cover up the failure of governments or to shift the burden of blame on the public rather than they owning up to their failures.