The real impact of falling oil prices

Interesting take on it by Harold James from Princeton.

Oil seems to be going the way of timber and steel, losing its strategic importance. Large amounts of energy will still be needed for the basics of modern life, including data processing and storage, but it will increasingly come from other sources.

This is likely to have epochal consequences, as weakening oil prices undermine the authoritarian regimes that control the main producers. There is a large amount of scholarly evidence linking dependence on natural resources with poor governance – the “resource curse.” Whatever the many differences among Nigeria, Venezuela, Saudi Arabia, Russia, Iran, and Iraq, all have one thing in common: Oil revenues have corrupted the political system, turning it into a deadly struggle for the spoils. As prices fall, the bandits in charge will quarrel more among themselves – and with their neighbors.

The leaders of oil-producing countries are already busy concocting narratives explaining their country’s misfortunes. Venezuela’s President Nicolás Maduro has taken up the Latin American left’s old, populist slogans and pointed his finger at the US. Similarly, Russian officials are drawing parallels between today’s events and the falling oil prices that undermined the Soviet Union. In both cases, the US is to blame; hydraulic fracturing in Oklahoma or Pennsylvania, according to this narrative, is the latest example of America’s projection of power abroad.

In other words, the security challenges implied by dropping oil prices are likely to be more significant than the economic risks…

The other industry that is getting ‘too big to fail’

Apropos danah boyd’s essay, Dave Winer pitches in with an equally relevant thought:

In last night’s debate, when HRC said there’s more than one street, referring to Wall St, she was challenged. She had rattled off a list other industries that had misbehaved. But she left one out, and when we look back at this election in the future, the omission, imho, will be glaring.

Neither of them mentioned the excesses of tech. They’ve enjoyed and taken advantage of an undeserved halo, and they use that to do things other industries, including the financial industry, only dream of.

The unchallenged power of tech. The press is oblivious. Politicians are mystified. The priesthood is firmly in control. That’s going to get us in trouble in the future, probably in a much bigger way than the banks got us in trouble in 2008.

We should worry about our next President being in the pocket of tech just as much if not more than we worry about them being in the pocket of banks.


We’re not just in a tech bubble. Silicon Valley is a Reality Distortion Field

For my money, danah boyd is one of the smartest and most perceptive people around. This year she went to Davos, and wrote a stunning essay about what she saw there, and the implications thereof. Well worth reading in full, but here’s a sample:

Walking down the promenade through the center of Davos, it was hard not to notice the role of Silicon Valley in shaping the conversation of the powerful and elite. Not only was everyone attached to their iPhones and Androids, but companies like Salesforce and Palantir and Facebook took over storefronts and invited attendees in for coffee and discussions about Syrian migrants, while camouflaged snipers protected the scene from the roofs of nearby hotels. As new tech held fabulous parties in the newest venues, financial institutions, long the stalwarts of Davos, took over the same staid venues that they always have.

Yet, what I struggled with the most wasn’t the sheer excess of Silicon Valley in showcasing its value but the narrative that underpinned it all. I’m quite used to entrepreneurs talking hype in tech venues, but what happened at Davos was beyond the typical hype, in part because most of the non-tech people couldn’t do a reality check. They could only respond with fear. As a result, unrealistic conversations about artificial intelligence led many non-technical attendees to believe that the biggest threat to national security is humanoid killer robots, or that AI that can do everything humans can is just around the corner, threatening all but the most elite technical jobs. In other words, as I talked to attendees, I kept bumping into a 1970s science fiction narrative.

Yep. The problem is not just that we’re in a tech bubble. It’s that we’re in a Reality Distortion Field which leads those who dominate the tech industry to think that they are the centre of the universe, that Silicon Valley is the Florence of Renaissance 2.0. And — worse still — it’s a RDF that leads powerful and influential non-tech people to believe that maybe they’re right.

Like I said, danah’s piece is unmissable — and wise. Make space for it in your day.

The Viking who is taking on Silicon Valley


Terrific Financial Times profile of Margrethe Vestager, the EU’s Competition Commissioner, who is really getting up the noses of Silicon Valley’s overlords. Because of public hostility to the craven deal that HMRC negotiated with Google over back-taxes, many people here will be rooting for her. (She’s said that she is prepared to examine the deal.) But if her probe into Apple’s weird tax arrangements with the Irish government results in a colossal back-tax bill for the company, then we will really have moved into new territory.

For one thing, it’ll unravel a crazy system of international tax laws that dates back to 1928. And it’ll open all kinds of worm-cans — Amazon pretending that it’s based in Luxembourg; Facebook, Apple, Microsoft and Google pretending they’re based in Dublin; and so on. And of course the US will be mightily pissed off. Not bad for the daughter of two Lutheran pastors. Just as well that she’s a tough cookie. The FT profile has a nice story about her time as Deputy Prime Minister of Denmark. An opposition spokesman complained in Parliament that her proposed spending plans were “small”.

“Some think it is a rather small plan,” she retorted, with a mischievous grin. “But I am a bit cautious about trusting any judgments on size from men, and perhaps — but this might be a woman’s perspective — I am more interested in the effect.”

HMG wakes up to the potential of blockchain technology

This morning’s Observer column:

There are not many occasions when one can give an unqualified thumbs-up to something the government does, but this is one such occasion. Last week, Sir Mark Walport, the government’s chief scientific adviser, published a report with the forbidding title Distributed Ledger Technology: Beyond Block Chain. The report sets out the findings of an official study that explores how the aforementioned technology “can revolutionise services, both in government and the private sector”. Since this is the kind of talk one normally hears from loopy startup founders pitching to venture capitalists rather than from sober Whitehall mandarins, it made this columnist choke on his muesli – especially given that, in so far as Joe Public thinks about distributed ledgers at all, it is in the context of Bitcoin, money laundering and online drug dealing. So what, one is tempted to ask, has the chief scientific adviser been smoking?

Read on

They’re Democrats, Hilary, but not as you know them…

This morning’s Observer column:

Good news for Hillary Clinton: there are very few Republican voters in Silicon Valley. Bad news: the Democrats there are not Democrats as you know them. They detest trade unions, for example, and they’re very keen on immigration – so long as the immigrants have PhDs from elite Indian or Chinese universities. They are in favour of government, so long as it’s “smart” government. And they believe that all change is good – especially in the long term.

We know this courtesy of a fascinating piece of opinion polling by Gregory Ferenstein, the guy who runs TechCrunch’s policy channel…

Read on

Dave Winer would like to apologise, on behalf of the United States…

To the rest of the world…

I would like to apologize for Donald Trump and the selfish, childish, uninformed Americans who support him.

Many Americans are from immigrant families who came here as a sanctuary. In some cases, America saved our lives. Many of us are not Christian, though we tolerate them, even though, as in this case they often act like immature entitled condescending superior brats.

I am sorry you all have to see this. But no one has voted yet. Let’s see how it turns out before we panic.

Thanks, Dave. But we never held you responsible for him!

We’re the suckers in the Syrian poker game

From Tom Friedman’s NYT column:

What Obama also has right is that old saying: “If you’re in a poker game and you don’t know who the sucker is, it’s probably you.” That’s the game we’re in in Iraq and Syria. All our allies for a coalition to take down ISIS want what we want, but as their second choice.

Kurds are not going to die to liberate Mosul from ISIS in order to hand it over to a Shiite-led government in Baghdad; they’ll want to keep it. The Turks primarily want to block the Kurds. The Iranians want ISIS crushed, but worry that if moderate Sunnis take over its territory they could one day threaten Iran’s allies in Iraq and Syria. The Saudi government would like ISIS to disappear, but its priority right now is crushing Iranian-backed rebels in Yemen. And with 1,000 Saudi youth having joined ISIS as fighters — and with Saudi Arabia leading the world in pro-ISIS tweets, according to a recent Brookings study — the Saudi government is wary about leading the anti-ISIS fight. The Russians pretend to fight ISIS, but they are really in Syria to protect Bashar al-Assad and defeat his moderate foes.

The triumph of hope over adversity?


The New York Times has put an editorial on its front page for the first time since 1920. It’s about gun control in the wake of the Californian terrorist massacre. It will, of course, have no effect: the US is beyond rationality in this area — as Nick Kristof observes in a remarkable column on the inside pages:

LESBOS, Greece — For three weeks American politicians have been fulminating about the peril posed by Syrian refugees, even though in the last dozen years no refugee in America has killed a single person in a terror attack.

In the same three weeks as this hysteria about refugees, guns have claimed 2,000 lives in America. The terror attacks in San Bernardino, Calif., and at the Planned Parenthood clinic in Colorado Springs were the most dramatic, but there’s an unrelenting average of 92 gun deaths every day in America, including suicides, murders and accidents.

So if politicians want to tackle a threat, how about developing a serious policy to reduce gun deaths — yes, including counterterrorism measures, but not simply making scapegoats of the world’s most vulnerable people.

The caricatures of Syrian refugees as jihadis who “want to kill us,” as one reader named Josh tweeted me, are unrecognizable to anyone who spends time with these refugees…

Note the numbers in the Kristof piece: an average of 92 gun deaths a day in the US.