May 4, 2018--Elvers

In a few days we will be heading to Maine. 

One thing we look forward to is spending six months with the TV turned off. We do get the New York Times to keep in touch with the news but even more for the crossword puzzle. We try to keep things there as simple and peaceful and deeply soul-satisfying as possible. To help with this we do some disconnecting from the wider world and some of its problems. This helps. Especially now when things have become so ugly and raw. 

In Maine for us it's about pursuing happiness Declaration of Independence style, where the happiness being pursued is more about contentment than jollity.

And, we find, if we want to, there are other ways to stay connected to that larger world other than paying obsessive attention to what's going on with North Korea, Syria, trade wars, and the dislocating and agitating effects of globalization.

But, then, since globalization presumably affects everyone and everything, there should be evidence of it in the Midcoast. And indeed there is.

Take baby eels for example. Elvers.

In a few places on the planet they spawn in the ocean and then migrate to fresh water where they grow to adult size. More than anywhere else these elvers find their way across the Gulf of Maine and then enter the tidal estuaries and fresh water streams of the coast just 15 miles from where we spend the season.

But before they are allowed to grow to adult size they are netted by a fortunate one thousand fishermen who have state permission to fish for them. "Fortunate," since this year elvers are expected to go for up to $2,800 a pound. Great news as last year they brought less than half that, just $1,300. 

It is. estimated that the total yield for the elver fishermen will reach a promising $26 million by the end of the season. 

The record prices this year are the result of poor winter harvests around the globe. The elvers in Maine thus are part of the globalized market in baby eels.

That globalized market is complex and spans the oceans. The reason prices are so high in Maine this year is because captures of japonica eels in the western Pacific have been low and this in turn has boosted prices for Atlantic eels. But catches in Asia are surging and that soon will result in a price decline in Maine. 

Elvers are sold to Japanese buyers who fly them to Japan where they are allowed to become adults and after that find there way to only the best sushi restaurants where they are, as unagi, in great demand.

In fact, in the fall, our local New York City Japanese restaurant  Sharaku, serves them as very special delicacies. 

Before knowing about the Maine connection and the triangular trade route that circles the globe and brings them via their unique supply chain from up the road from our Maine place and then some months later to Sharaku, just two blocks from here, fresh eel unagi are my favorite kind of sushi, served on rice, sauced by a slowly reduced blend or mirin, sake, sugar, and soy.

May 16, 2017--Where's Waldo?

Flipping through the Sunday New York Times, I was struck by a dramatic photo on the first page of the business section.

It was of a Ford Motor Company "assembly line" in their new plant in Hangzhou, China. I put assembly line in quotes because my notion of an assembly line is a slowing-moving conveyer belt where cars are assembled by workers one stage at a time.

From what I could tell from the picture of the Hangzhou plant the cars being assembled were moving along but there wasn't a worker in sight.

See if you can spot one. I couldn't.

Ford Assembly Plant, Hangzhou, China

Workers are nowhere in sight.

This reminded me of Where's Waldo?, a series of children's books created by the English artist Martin Handford in which there are detailed illustrations depicting dozens of people doing a variety of amusing things. Hidden in their midst is Waldo. Though he is always wearing his distinctive red and white stripped shirt and a bobble hat with a pom-pom on top and large, Harry Potter type glasses, it is not easy to locate him.

Where's Waldo?

As our economy continues to struggle with the decades-long decline in good manufacturing jobs, and as politicians point out the off-shoring of so many jobs to sites such as Hangzhou, all the while pandering to worker fears of global unfairness--how foreign wages are artificially kept low in regrettable efforts to undermine the workings of the free market--there are in fact larger forces at work that are not as widely discussed and much more difficult to ameliorate.

Yes, many high-paying manufacturing jobs have been lost because in places such as Hangzhou the workers that are employed at the Ford assembly plant make on average only $4 an hour, more disruptive--even to the Chinese economy--is the exponential proliferation of robots.

Robotics more than low wages is what is fundamentally transforming the nature of work.

And not just manufacturing. Modern forms of automation are also altering how work is organized in corporate offices. Thus the question the world faces, as we see the global economy undergoing a paradigm shift, is what kinds of jobs will be available, even exist, by the middle of the 21st century.

To adapt we may need to experiment with different ways to help support employees, or permanently displaced workers. Guaranteeing a minimum annual income may be one such approach. This has been suggested, counter-intuitively, by some of the economically conservative members of the free-market-oriented Austrian School of Economics.

It is being tried in Canada among other places and it may also be time to begin to think this way here.

May 27, 2016--World War III

In their now daily barrage of anti-Trump articles, the New York Times, on Tuesday finally went all the way--

After helping for months to fuel the belief that a Trump presidency would lead to fascism, one of their columnists, Eduardo Porter, more than implied that if Trump is elected World War III will be one possible result.

In, "We've Seen the Trump Phenomenon Before," he suggests in a subtle way that social and economic conditions are now similar to those that pertained during the years leading up to the outbreak of global warfare in 1914 and 1941. World Wars I and II.

It is worth reading the entire piece, but here is a flavor of the analysis--

Mr. Trump perhaps can best be understood as the face of a broader global dynamic: the resistance to policies that encourage global competition and open borders to people who have lived too long on the losing side. 

The world's "golden age" of globalization around the turn of the 19th century into the 20th was capped by what came to be known as the Great War. [World War I] The discontent bred of the worldwide economic devastation of the 1930s ended in another war. [World War II]

Porter then cites Harold James, an expert on European history at the Woodrow Wilson School of Public and International affairs--

Backlashes against globalization promoted a zero-sum-game: To protect ourselves, we must do so at the expense of somebody else. It increases nationalism and the willingness to go to war.

Connecting these two dots to the current situation (third dot?) where Trump in his heated nationalism and critique of globalization appeals to "his" people who have lived too long on the losing side and are motivated to see in globalization a zero-sum-game that still has them losing to various somebodies. In Trump's view mainly illegal immigrants.

Porter concludes--

"We shouldn't try to stop globalization, even if we could. But if we don't do a better job managing a changing world economy, it seems clear that it will end badly again."

Should I say fro him, "in World War III"?

April 17, 2014--Today's Luddites

A young friend who is making his way quite nicely in the IT field (he is a software builder with investable ideas for a company of his own) was talking the other night about the Luddites.

In addition to being impressed that he knew anything at all about them, he had interesting things to say about today's version.

We began by comparing the power of the Gutenberg Revolution with the advent of the Internet--"I think," he unsurprisingly said, "that the Internet will prove to be an even more powerful cultural and work-shifting technology. Everything is and will change, from knowledge acquisition to the way work is structured."

Though two generations removed from his, though feeling threatened by so much change that I do not and never will fully understand, I agreed. But, I wondered, as we moved on to compare the structure of work brought about by the Industrial Revolution with the Cyber Revolution, that the changes we are seeing globally are likely to be much more disruptive than those brought about when we shifted, less globally, from an agriculture-based economy to one dominated by machines and mass production.

"You're making my point for me," he said, wanting to retain control of the direction of the conversation. "But though I am in my small way contributing to these paradigm-shifting developments, I am worried about some of the trends that I see, unintended consequences--there are always some--that may not turn out to be either benign or progressive."

"Say more," I said, pleased to cede the direction of the conversation to him.

"In the past, the actual, historic Luddites got it wrong. They thought that brining waterpower and machines to the manufacture of textiles would both alienate labor further and ultimately lead to fewer jobs--machines would replace workers."

"What you're saying is correct. They did go about literally and metaphorically smashing the very machines that they felt would replace them."

"And they turned out to be wrong. Right?"

"Say more."

"Rather than replacing workers, though many were dislocated and/or needed to learn machine-based skills, over time the capital invested in mechanization, which temporarily shifted the economic balance more toward capital (things like machines and factories) than workers and wages, over time--and this is important--the balance shifted: more workers were ultimately needed and the demand for them, plus unionization, led to higher wages."

"Correct. Classic economic theory," I said, wanting to sound relevant, "says this is what happens historically as the result of capital outlays and aggregation."

"But back to my but," he pressed, "I do not see this happening now. And maybe it will not happen even during the upcoming decades."

"What won't be happening?" I admitted to myself that he was leaving me behind.

"IT, information technology . . ."

"I know what IT is."

He smiled at me. "It may turn out that IT will permanently not only dislocate workers but also make much of human, hands-on work work itself redundant."

"Redundant?"

"OK, obsolete. No longer needed. And, here's the worry, this may wind up permanently replacing the old, classic economic model. We may see a longterm shift in the balance between capital and wages. A shift in the direction favoring capital. The data in many countries, very much including ours, are trending in this direction."

"OK. But what about the Luddites?"

"Well, it may be a generational thing--with people from, forgive me, your generation serving as the contemporary Luddites. You, I mean they," he smiled again, "may be decrying these cyber innovations because you, I mean they, are feeling left behind by more than age. But, they may be right."

"Slow down. You're losing me. Right about what?"

"That the new machines, actual and virtual, will in fact replace hands-on workers (except maybe in health care and restaurant work). Replace them for the foreseeable future. Maybe permanently. Maybe if displaced, redundant workers acquire new skills there may not be enough jobs for them. Look at what goes on in auto assembly plants these days. Cars are now made more and more by robots. Yes, at the moment humans have to make the robots but after they are deployed (capital investment) very few actual workers are needed. Just maybe to grease the machines and manipulate them via computers."

"Wow," I couldn't help but say. "That's quiet a future you're presenting."

"To be truthful, these are not only my ideas. There are people who know tons more than me about this who are studying what's going on and alerting us to the changes."

"I know that," I said. "I've been reading some of their stuff too."

"And I'm seeing it where I work. What in the past would have required dozens of workers requires very few. Considering the economic size and reach of a Google and a Facebook, to mention a couple, they have relatively few workers. That's one reason they're so profitable. And my own guess is that if you look at them five years from now they'll be even bigger and will have even fewer employees. This is a very big deal." I

"Could you pour me a little more wine? I need some." I slid my glass toward him.

While doing so, he concluded, "In other words, you Luddites are right!"