Posts Noted 2011 March 13

Blog posts noted on 13 March 2011

• Mark Thoma reposts on The End of the 'Washington Consensus' part of The end of the 'Washington consensus', by Kevin Gallagher. A premature celebration, perhaps, as the iron fist of the US military is not alluded to at all. These things are not mentioned in polite company.

The bigger point here is that, even if Colombia gets the sorry trade deal it wants and doesn't get a canal, the United States is literally and figuratively bankrupt in its competition with Chinese finance. Literally, because the US has the largest deficit on the planet and owes a big chunk of that to the Chinese. Figuratively, because the economic model that the US has exported to Latin America hasn't worked. China is funding infrastructure, exploration, science and technology, and all the other things that President Obama says we should be spending on here at home.

• Cassandra's legacy: Joseph Tainter: talking about collapse. The complexity overwhelms the ruling class' ability to manage society. The more efficient a society becomes, the smaller the ruling class becomes. This relative smallness reduces the pool of talent able to meet crises.

Tainter's point is that there is a strong relationship between resources and complexity. It is clear that complexity cannot exist without resources - not for a long time, at least. But the relationship is far from being linear: with resources diminishing, complexity does not decrease – on the contrary it keeps increasing. It is the result of the benefits that complexity gives: resource depletion can be counteracted by increasing complexity, but only up to a certain point and with ever-reducing returns. At some moment, returns become negative, society cannot support any longer its complex infrastructures and the result is collapse.