I grew up treasuring efficiency. I wanted the remote-controlled car that lasted longest, not the flashiest one (yes, I realise that's not necessarily the most efficient, but from a child's point of view in which charging is not a cost it is. It gave me the most time for each 'play'). I wanted games which I'd use a lot. And once I had something I used it. I was even known to choose sweets based on how long they took to eat, since there was no point in the expensive sherbet dips which took 2 seconds to eat.
It was an essential feature of who I was. Maybe that's why I turned to science; the concept of parsimony is simply requiring theoretical efficiency. I was good at efficiency. When we ran around the mountains to reach various markers I planned the route. No other group took our route, and we won comfortably (also due to running the 26 miles rather than hiking).
When we spent two lessons in geography not learning about either tectonics or flooding in Bangladesh, and tried to guess from maps where to put a big city for best resource use, or how to link a number of cities in the best network, I was almost interested in geography. Nowadays we have computer programmes that do this (via iterative methods: no-one's found a programme to solve this better), or else we use slime mould.
As I grew older, we got into more complex problems. When we were asked how we'd guess a fraction if we could only be told that it was higher or lower, a load of people were stumped because they didn't understand the question. One guy said he'd go up in 0.1 intervals. He was thinking of ruling out each decimal in turn on a calculator display screen. I rolled my eyes. I would always start with 0.5, then halve the possibilities each time. It needs fewer guesses, which saves time.
Enough of the background. You can all see that fewer guesses is a good thing if, for example, it's an integral part of a computer programme. We don't want to spend three times as long watching our computers process things because the programmes are inefficient. Efficiency is hugely important.
Why do we have markets? We have markets because, we're told, they're the most efficient way to distribute goods and services. History shows us that all alternatives that have been tried (at a state level) are indeed distinctly worse. Hooray for efficiency! I can buy what I want cheaply because everyone else wants one cheaply too.
So let's look at housing. Yes, it's a bit of a jump in subject. This country's housing stock is hugely inefficient, requiring the architectural intelligence and insight of a chimpanzee. We have the ability to design buildings that need neither air conditioning nor heating, because they create and use draughts and sunlight.
Instead we stick a load of bricks together (or perhaps embed some steel in some concrete and encase it all in glass) and call it modern. Spanish haciendas and the old stone churches needed more ingenuity!
I've mentioned the incredibly backward nature of housing before. It amazes me that in the modern world we have the ability to save resources (both natural resources and money: heating or air conditioning are a large proportion of running costs for most buildings) but we don't use them. It hurts deep inside. Efficiency, I love you much too much (http://www.youtube.com/watch?v=hcH-qRUvGlQ).
Well, I've clearly got a problem with housing. Thankfully, technology is used so much more in other industries, like... motoring?
I'm an efficient driver. In fact, when I started to learn, I was told that I was being dangerously efficient. I would coast everywhere, and we are told that it's best to have the engine engaged in order to have more control (and prevent safety mechanisms locking the steering wheel). I only really started leaving the engine engaged when my instructor told me that engine braking uses less fuel than an idling, disengaged engine (and saves brake wear). I love efficiency! Not for me the thrills of over-revving just for the sound, nor speeding right up to the junction only to brake hard.
We can make engines that run 40 mpg. We can even make vehicles that run 80 mpg. We can make vehicles so efficient that I could do the Oxford-Cambridge-London circuit with a quarter of a tank (rather than the half that I did use). We can fit more people into vehicles, and we even have specialised vehicles, called buses and trains, designed to do just this.
But do we? No.
Europeans are better at it than the wasteful Americans, who, despite needing to travel further, prefer their cars and engines huge and hugely wasteful. Not for me a money-saving, petrol-saving (gas-saving, for those of you not up with the hip lingo), world-saving vehicle. I'll waste my money on destroying the world, thank-you very much. I like the place that much. Well, with people like that around, I can sympathise.
We spend fortunes on paint jobs and bodywork, on getting the latest model and cleaning. Is any of this for efficiency? Do we improve the bodywork for better aerodynamics? Do we see that the latest model can squeeze out an extra few miles every day?
Do we do all this for comfort? Does the next model have a reclining, cushioned chair but our old one just the hard wooden seat? Sometimes convenience might play a part: a new CD player, better air conditioning, new upholstery, a gearbox that doesn't stick on 5th, but mostly this is all for one thing: style.
We waste money because we're buying respect. I don't know from whom these people are buying respect, because I can't see the reasons for admiring desperation and waste.
In fact, the more look around many industries, the more waste we see. People buy guzzling engines, cheap light bulbs, inefficient homes and refrigerators, endless new clothes etc. I can't really complain about some effects of fashion, like bars that charge as much for a measure spirits as the whole bottle costs. It's frustrating if people I know want to go there 'because it's nice', but it's a different issue.
This drive to waste is an inherent quality of capitalism. This is hardly a new observation: we've had complaints about consumption and consumerism for decades. Why does capitalism value short-term interests?
Firstly, the mobility of capital, and the nature of the stock market, means that at any one moment investors want to see an immediate improvement in stock values. They can sell when they want, and invest elsewhere, so if they have to wait, they won't.
Secondly, people have problems with future-discounting. They don't buy a product that costs twice as much and will last ten times as long. Having wealth now is given disproportionate value over wealth in the future. Maybe this is a psychological trait we have because of the nature of nature: life is nasty, brutish, uncertain and short. However, we don't live in nature any more, and life is more dependable. You can depend on regretting frittering your money away pointlessly.
Thirdly, at the intermediate level, companies have no incentives to prioritise long-term plans. Companies are run by individuals. They need make an immediate, individual impact, in order to be promoted (or not get fired). They need to get things done now. If you judge people on a month's results, but it takes a year to form a good relationship with a customer through friendly and efficient provision of follow-up services, then you'll have very pushy and unfriendly staff. CEOs can sack hordes of staff to cut costs and leave the company before it runs itself into the ground.
Of course, not all capital is as mobile. Those who can't keep up lose. Private investors and ponderous pension funds invest for the longer-term, fighting the other pressures to short-term considerations. When short-term considerations are given priority, long-term investors lose, along with everyone who has long-term interests: the workforce, customers (whose customer service might suffer if a company fails) and related business that work with that company (and have invested in future business). And who gets their money out first when a company goes under? Is it done under a length-of-investment basis, so that those who put their money in first get something? No, because that might lead to pyramid schemes (even though these are outlawed separately). Is it those with business relations? No, it's the big lenders. It's the people who invest short-term and could have bought the debt the day before. So there's even more reason that big banks with short-term investment outlooks thrive. We even have supercomputers buying and selling within fractions of a millisecond of each other. That hardly seems like a useful activity. The big banks make money, and we need to ask ourselves where this money comes from. Is it enough to say 'well, they pay taxes, so it's alright' (leaving aside their ingenious tax avoidance schemes which become so much more worthwhile when done on behalf of enormous amounts of capital)? If they're a tax on business itself, it's no good to allow it because some of the money goes to the exchequer. When businesses fail because of stock market games, employees and medium lenders lose out. When a stock-market investor makes money, it must come from somewhere. Do we, as a society, think that the supposedly more efficient distribution of capital is worth this tax of greed that costs billions of pounds?
That's enough getting side-tracked. The point is that capitalism is geared for as short-term an outlook as possible. This is partly because people are that way too. But we expect our societies to be run with some consideration for the future. So government needs to step in and impose long-term considerations. Not just environmental externalities, but incentives for people to make sensible long-term decisions.
We wouldn't be in a mess if people actually cared about efficiency and sustainability. Capitalism can never fully value efficiency of the sort I'd naturally want to value, because efficiency gains in resource management will always be outweighed by efficiency in resource consumption. Why make it stretch further when it's cheaper to use more?
The only time capitalism can value efficiency is when there's nothing left to consume. By it's nature it can't account for finite resources until they are gone, which is the height of stupidity. We need a hefty penalty on taking things that can't be replaced. Not just an environmental penalty because most of these things generate pollution, but a penalty that takes into account the incredible externalities of depriving everyone in the future of using that good for any and every possible future use.
Since we don't even know all the possible future uses of any good, the penalties need to be large to allow for possible very useful uses. That's efficiency. Why is it good to burn as much as possible now? If they knew what underlies modern economies, would most people really accept the sort of nihilism that says the future has no rights and that destroying the planet now is acceptable if it gets us better lives for a day or two?
I want to see futuristic houses where the draughts are treasured parts of the architecture. I want to see a world where the amazing insights in mathematics are applied to everyday problems; where we travel in electric cars and have oil left to make plastics. But long-term visions require planning, and if you mention planning, you raise the dread shadow of state-planning and control, feared before anyone even sees what it actually looks like.
So we're stuck with the belief that out of chaos comes order. It's true; evolution proves the tautology that things that best survive survive best. Until a shock, like running out of resources, or meeting something new. Evolution shows that the order from chaos is only responsive, and never predictive. The dodo, the dinosaurs, the kiwi... there are endless examples of the losses incurred by the 'it'll work out without interference' attitude.
But not bothering to anticipate the future is incredibly inefficient. If we only ever respond, we'll always lag behind, dragged along by the forces we create. We need to get cleverer. We need efficiency.
Where can we find it? State planning is dead, a catastrophic failure, like the introduction of the cane toad. An impossibility that is too complex ever to work. Wait! What? We don't understand the problem well enough, so we dismiss it, but when it comes to problems like what to do when the resources run out we're told 'we'll solve it, even though we haven't yet'. I detect some bias in the levels of optimism.
As it happens, I think we should have great optimism about state interventions. The cane toad was a failure in adjusting complex market-like systems, but there have been hundreds of successful instances of biological control since then. Our understanding improved, and so did our success rate. Biology is leading the way. We just need economists and politicians to follow.
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