Only slightly bent

There’s this one great quote on a despair.com product:

Quitters never win, winners never quit, but those who never win AND never quit are idiots.

Every now and then you run into people who just don’t know when to quit in time. One that keeps annoying a lot of people by refusing to quit – and at the same time inflicting untold damage to her party – is Hillary Clinton. I mean come on, it’s clear she should quite simply just drop out of the race as gracefully as is possible. But nooo, she vows to keep on fighting. Oh damn it, if the Republicans end up winning the general election – again – it’ll be at least partly all her fault for screwing with the Democratic nomination for so long.

And from this real life (tragi)comic case, we can make a smooth transition on to printed comic strips, because it’s easy to find more people from that field who refuse to quit in time. A prime example was Peanuts by the late Charles M. Schulz. It went on for literally decades too long. Piranha Club by Bud Grace is also way overdue for getting out of the papers and into the trash bin (the octopus theme is really beating a dead horse).

Then there are borderline cases like Patrick McDonnell, the creator of Mutts. Sometimes he’s stuck repeating the same stupid theme for weeks on end, but sometimes still manages to pull off great stuff.

Of course there are also comics that should never have been allowed in print to begin with, like “Auttajahai” in the weekly supplement of Helsingin Sanomat, NYT. Luckily I’m unable to find a digital example of this.

Luckily, there are people who do know when to quit in time. One of my favorites was Bill Watterson who drew the Calvin & Hobbes comic for 10 years. In that spirit, here’s one great Calvin & Hobbes-strip:

And of course there are strips that are still riding high, like Dilbert. But sometimes that feels way too much like a documentary than a mere comic strip..

Today’s topic is risk. The World Economic Forum’s Global Risk Network released their now-annual Global Risks-report (see links below) already some time ago but I only now got around to reading it. Though the contents isn’t exactly breaking news as such, it’s a very interesting read that draws together some of the major risks that the world is facing.

To dive straight into the real thing, here’s the risk overview with severity of economic loss; in the report there’s a similar graph in terms of deaths:

Now, if it wasn’t for this little detail that “.. the increasing importance of the financial sector in the real economy has made the question of systemic financial risk more important than ever.”, the #1 risk – asset price collapse – which is now being realized would be poetic justice. Unfortunately the financial “innovations” driven by perverse incentives and moral hazard, lowered the risk premiums to unsustainable levels and things are now unraveling in a very concrete way.

But of that, since the risk has realized, we hear a lot from these days. So let’s focus on another highlighted thing: the hyper-optimization of supply chains and subsequent interdependency caused by globalization. Consider these statements:

Geographic concentrations of risk in economically efficient zones of production may have improved global welfare, but are businesses and governments prepared for the consequences of a risk event in these concentrated areas?
[..]
In global supply chains, dangerous accumulations of risk may not be recognized and, yet, may threaten a systemic crisis should one part of the supply chain fail.

There’s one word in particular that should pop up in your head – China. And don’t for a second think that Finland is somehow isolated from events elsewhere; all it takes is a quick glance at the “Made in”-statements of the stuff near you and you soon begin to realize that this country, no matter how seemingly isolated, could no longer function without an invisible global support and supply chain – vulnerabilities of which are generally poorly understood and managed.

Related to this is a process called “squeezing”: the transfer of negative externalities of a production process, such as human or environmental costs, from one area to another, typically one with less regulation – hence the massive environmental problems in China, for example. Of this the the following is noted:

While air and water quality have improved drastically in recent decades in developed countries, quality elsewhere has been declining – calling into question the long-term, risk-adjusted sustainability of economic growth.

Without going into further detail, the report also includes some good suggestions on how to structure the risk mitigation at state and international levels and much more insight into what can be done to mitigate risks in the financial markets.

Meanwhile in Finland..

In this report alone we have lots of important discussion on the risks like a systemic financial failure, problems with food security, supply chain vulnerabilities and energy risks. Surely these important things somehow show up on the agenda of politicians, economists, newspapers and so on over here in Finland, too.

Right?

Wrong. I am so fed up with the level, quality, breadth and depth of political and other debate in this country. So what is going on here then?

Here the energy discussion revolves around how ugly wind turbines are (Hello, excuse me? Are coal power plants belching out black smoke somehow substantially more beautiful?!) or on the location of hypothetical future nuclear power stations with everybody wanting those and nobody wanting the planned uranium mines.

Political debate, on the other hand, seems to be focused on bickering about ineffective Internet censorship initiatives. (Okay, granted, the government has also spent time on such essential issues as Man-island taxation. Wonder if they made a field trip there.)

Newspapers are mainly feasting on the aftermath of the prime minister’s personal relationships. Even the more economically oriented newspapers still mostly treat Finland’s economy as if it’s a cute, tiny bubble (pun intended), isolated from the rest of the world, thus leaving plenty of space to discuss about the supposed high salaries of the telemarketers, completely misinterpreting some EU commission studies or worrying about the best after ski-places.

It’s somehow surreal to live in a country that would be relatively well-positioned to combat most of these risks – if they only were acknowledged and planned for. Going back to the beginning of the above-mentioned report, there’s a lot of truth in this:

Inaction on long-term risks will only weaken the global capacity to manage future challenges.

Fix the incentives!

The Global Risks report highlighted yet again the importance of correct incentives. I’ve talked about this before, but it seems to pop up repeatedly on scales large and small. Here it was discussed in the context of energy security and how the uncertainty of future regulatory framework is impeding utilities’ much-needed investment in sustainable energy production:

Energy security has two sides, and both producers and consumers have much to gain from predictability. Similarly, to unlock investment and innovation in cleaner energy, longterm economic viability must be assured by forward-looking regulatory frameworks and, ultimately, an economic price for carbon. Whether or not such policy changes are forthcoming at the global and national level, individual companies and the energy industry need to improve their capacity to link their own risk management and strategic decisions.
[..]
For example, developed country measures to reduce carbon emissions will not be meaningful in the absence of global frameworks and action. Yet the lack of a global price for carbon means that economic incentives to enhance carbon efficiency or produce in more carbon-efficient geographies are not there.

A global price for carbon. Sounds so simple, doesn’t it? Setting a global price for carbon (preferably one that slightly increases over time) would allow the market to solve a huge number of issues without detailed regulation of things.

Changing the conversation?

But if we want to start small, how about creating the right incentives for wind power right here in Finland? If there were proper incentives in place, maybe over in Finland the conversation could also shift from whining about their looks to something more like this:

The wind turbines that recently went up on Louis Brooks’s ranch are twice as high as the Statue of Liberty, with blades that span as wide as the wingspan of a jumbo jet. More important from his point of view, he is paid $500 a month apiece to permit 78 of them on his land, with 76 more on the way.

“That’s just money you’re hearing,” he said as they hummed in a brisk breeze recently.

That model doesn’t even require any regulation. Just pay the landowner. But I’m sure someone here will find a way to make it too complicated to do even that.

Resources & references

• WEF: Global Risk Network
• WEF: Global Risks 2008
• New York Times: Move Over, Oil, There’s Money in Texas Wind

Two topics today on the future of Finland & the capital area, sort of related but equally good considered independently. The first should not be seen as elitism or accepting the status quo of climate change but rather to point out that if the current self-serving policy line is to be continued, let’s at least do that properly (because a self-serving policy that’s not even good for the country practicing it really is good for nobody).

Supporting the aging population

There’s been an on-and-off discourse about the mid-term future of Finland and how to prepare for it. One of the ugliest facts is that our population is aging at an alarming rate, and in just a couple of decades we’re looking at a massive problem of taking care of that population. By 2030, 25% of the population will be over 65 years old. Tax hikes have already been flashed as being inevitable, but that’s just going to kill the country. Remember, we’re already suffering from one of the highest taxations in the world – much more and many people, including myself, are going to look for a better country to live in. Instead of tax hikes we need people.

Ironically, overpopulation is, on a global scale, a massive problem. But here, in order to sustain an economically (and subsequently physically) healthy society even in the medium term, we need more people. There’s little hope of doing that endogenously (and it really wouldn’t make sense either considering overpopulation really is a huge problem elsewhere), so immigration is the answer. Immigration from everywhere and all kinds of people; obviously highly educated people are better for the receiving end.

So how do you get someone from, say, Spain to move to Finland? As bad as it is in the grand scheme of things, climate change could come with a medium term silver lining for Finland. As other parts of the world become intolerably hot, dry, wet or whatever else, Finland could – and should – actively recruit people from these areas to Finland. If you look at the climate prediction models, Finland may be one of the few winners (again, in medium term – in the long term everyone loses) of climate change so living conditions here ought to stay tolerable or even improve. Finland could, if it wanted to, profile itself as the high-class climate refuge.

Of course, in order to do that with a straight face, we need to become the leaders in renewable energy usage, energy conservation, mass transportation and all that. It’s not even too difficult, it just requires waking up to the realities, tweaking taxation here and there, investing heavily in wind power etc. Thanks to Russia and the upcoming increases in raw wood duties, the energy-consuming paper industry is already on its way out.

Trying to attract the well educated people only is definitely a selfish plan. And I’m not saying we shouldn’t take environmental refugees from less well off countries also (and to a much greater extent than we are doing now – population inequalities need to become more balanced with ecological support capacity anyway), but naturally no country can keep an entirely open door policy for everyone. Also, mention a country that isn’t selfish when it comes to fighting for survival.

Suppose we could attract, say, 10,000 to 50,000 people here yearly, how do we fit all the people here? Well, even if we discount the fact that Finland has nothing but space with a population density of 16 inhabitants per square kilometer (compare that to 31 in the US or 113 in France), we could start building real buildings – see below.

Housing people

In the Helsinki area, housing prices are ridiculously high and still rising. It’s been claimed that one of the main culprits is lack of land for detached houses, but the real problem is really the lack of imagination and the will to act. None of the current zoning plans go where there’s most room to go – up. There are something like two (!) houses that are locally considered something of a high-rise, and they’re a pathetic 20-something stories high. That’s nuts. I’m talking about construction of buildings with 50 to 100 stories.

There’s been some talk of building a little higher in the Pasila area, but the talk has remained just talk. It’s time to start acting instead; zone an area near the current downtown – Pasila is quite okay – for high-rise buildings (both offices and condos/apartments), build a lot of them there, build them fast, make the apartments big, extend the subway line there and I’m sure you’d start to see some positive results like:

• With the availability of thousands of apartments, housing prices would come down or stabilize. If you build with enough scale, the building could be done cost-efficiently so the new spaces need not become absurdly priced at 10,000eur/m2.
• With a new lively and “cool” city neighborhood, the highly desirable good taxpayers might decide to stay in the city instead of escaping to the nearby municipalities.
• With sufficient amount of new housing (Pasila could easily house 100,000 inhabitants), the city and the area would remain on a growth track which would help in a number of ways.
• Traffic would ease (or at least not become a problem) with more people relying on public transportation.
• Massive apartment buildings have the potential of being far more eco-friendly than detached housing, thus easing the environmental load also.

So how about it? How about adding a zero to the population increase visions of Helsinki and Finland?

The government had an idea to equip all elementary school students with a computer. Not a bad idea, considering computer skills are pretty much necessary already today, let alone in 10-20 years.

Now OAJ (Trade Union of Education) has apparently decided that it’s impossible and basically tries to proclaim the idea DoA. The reasoning, as is often in such hastily made statements, is pretty interesting in its shallowness. Let’s see how we could help Anne Kolehmainen out with some of the issues (translations mine):

…seurannaiskustannukset, kuten langattomien verkkojen virittäminen ja lisääntyvä it-tuen tarve olisivat kestämättömiä.

…consequential costs, like setting up wireless networks and increasing IT-support would be unbearable.

First off, who said anything about wiring (or is that wirelessing?) all school properties with Internet coverage? Second, setting up WLAN networks is seriously not that expensive. And how about co-operation with operators or the likes of FON for the connectivity part?

Lisäksi opettajat tarvitsisivat pedagogista tukea.

Additionally teachers would need pedagogical support.

So we would actually need teachers tuned into todays challenges and issues? They would also need to learn to use the machines, learn about netiquette, online security, privacy and all that? This needs to be done with or without a one-laptop-per-child-policy. Someone please explain to me how having technologically competent teachers would somehow be a problem. And what about voluntary work to help out with this?

Pelkillä koneilla ei vielä paljoa tehdä, vaan niissä pitäisi olla ohjelmistoja. [...] Softalle ei jää kummoisia rahoja.

One can’t do much with just the machines, they need to have software [...] There’s not much money left for software.

How true. But how’s free, is free a good price for you? Ever heard of Linux? How about OpenOffice? GIMP? All the other free, excellent-quality software out there? And if that’s not good for you, how about corporate sponsorship? I’m sure companies like Microsoft would love to help out here to imprint whole generations as future users of their software.

In the end, of course it would cost money to do this. But to just flat-out dump the idea by stating that it costs too much without even trying to figure out solutions to get it funded is, to put it mildly, shortsighted. And this attitude, as much as I wish it would be, is certainly not limited to this case. It’s as if our country is saying that the hailed goal of an information society is only okay as long as nobody has to put in any effort or money on actually implementing it – as long as it remains a powerpoint-exercise, as long as nobody needs to learn anything.

I say let’s not get dismissive or desperate, let’s get creative. Again, this applies to so many other things than just this computer-issue.

Globalization is supposed to be all about free movement of goods and people and all that stuff. Free movement of people is still a far-fetched dream and even casual intercontinental movement of people is inconvenienced by the US-driven security theater. Anyhow, in the face of all the talk about globalization, it’s amazing that even free movement of bits can’t be done. It’s bad enough when thanks to some obscure, stupid rule you can’t order stuff to an overseas address from the US, but it gets really annoying when even digital goods face stonewalling or blockage at the borders. What I’m talking about here is, of course, digital media content.

The media industry is constantly whining that online piracy is destroying their profits (a stand that has been belied more than once but keeps on living, kind of like an urban legend), but instead of taking some actions to offer consumers alternatives they have been suing their customers. Cute. Anyhow, in US there has for some time been encouraging, albeit still small, movements towards delivery methods that actually start making some sense. For one, you can buy movies and TV series etc from e.g. BitTorrent, which is great.

But there’s a small catch. You can do it but only if you’re in US. Oh, and only if you use IE. And only if you have Windows Media Player. And only if… the list goes on, but apart from the useless DRM-stuff, the most limiting factor is, amazingly, the user’s domicile. What exactly is so difficult in allowing anyone, anywhere, to buy the digital content? The delivery costs for the sending party are, under current business models anyway, usually the same no matter where the customer is.

The end result is that the legal content is blocked at the borders, but spam and all the illegal stuff certainly isn’t. So the situation in the digital domain is essentially the same as it is in the physical world: the only product that knows no borders is pollution.

—–

And in other news roughly related to global commerce, the VATT (Government Institute for Economic Research) in Finland had yet another gem for us some time ago; namely they’re basically trying to scare people to leave the country by appealing to their research stating that the tax rates will have to be significantly raised in the coming decades in order to pay for pensions and other costs of an aging society.

So the only idea to financing something are tax hikes? That’s just so representative of the thinking of certain factions in Finland.. But hey, since tax hikes would promote globalization as people start leaving, I suppose in the grand scheme of things it’s good! Right? Oh, it isn’t? I don’t know if it’s something they’ve eaten or what, but it seems VATT has been on a scaremongering crusade lately.

I know I’ve probably talked about climate change ad nauseum, but VATT (The Government Institute for Economic Research in Finland) recently contributed what must’ve been the most useless study if not ever, at least this year. They state that the EU goal of cutting emissions by 20% by the year 2020 would lead to the loss of 60,000 jobs in Finland. Who knows, maybe that’s even true. But even so, there’s this one tiny fundamental flaw with the study – that it doesn’t take into account the jobs that would be created at all. Oh, and it also conveniently forgets to mention that we’ll lose much more than 60,000 jobs if we don’t tackle climate change.

One has to wonder a couple of things; first, what kind of hidden agenda (and whose agenda) is behind such “research”? Secondly, did they think they could get away with publishing such completely one-sided stuff without getting caught? Seriously. This is precisely the kind of scaremongering we don’t need. By scaring people (or governments) into inaction by presenting spurious bad outcomes and simultaneously dismissing the reality of a certain, big disaster if action is not taken is really nothing short of irresponsible.

Heck, with the workforce shifting constantly to new areas, one could safely make a categorical prediction that Finland will lose 100,000 jobs in the next ten years if <INSERT YOUR FAVORITE TOPIC HERE> is / is not done. Whatever you put there, it’ll be true simply because of constant change and movement in the workforce.

And if we don’t mention the 100,000 or more jobs created elsewhere, it’ll make a much better headline, won’t it?