Perez: cycles, bubbles & golden ages

Carlota Perez in TECHNOLOGICAL REVOLUTIONS AND FINANCIAL CAPITAL: The Dynamics of Bubbles and Golden Ages in a, to my mind, successful, attempt to explain Kondratiev Long Waves, creates a theory of cycles of technology and output. I find her arguments, illustrated by powerful historical example to be compelling,  I cannot understand why her theories are not more popular.

She argues that there have since the turn of the 19th Century been five technology revolutions, of motion and textiles, the original British industrial revolution, followed by railways, steel, oil & cars and latterly silicon, computers and the internet.

I came across the ideas a number of years ago and was revising an unpublished blog article which includes a piece about her book and ideas; I made the above collage and thought I’d share it now. … …

How important is profit for software projects?

a robot using a laptop

I have just posted on LinkedIn, “Does AI actually impact the bottom line in a good way?”. I look at an article from the Register based on a Gartner report which reports that in their survey AI projects “sucess rates were “only 28 percent of use cases fully succeed and offer return on investment (ROI).”

I look at at arguments from Perez’s Technological Revolutions and Financial Capital and remember a late 20th century paradox that while many IS projects had poor and even negative ROIs, firms that didn’t invest failed.

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The Draghi report on European competitiveness.

The Draghi report on European competitiveness.

I have been trying to get on top of whether the Draghi Report on European economic competitiveness is really a game changer. Without study it seems to be a call for more EU (as opposed to member state debt. I am of the view that within the UK, there needs to be transfer union i.e. that borrowing and wealth from London needs to be shared with other parts of the country.

I found this article from the FT, which is headlined, “Europe can learn fiscal lessons from the UK on how to achieve its goals”, and subtitled, “ A co-ordinated reform agenda is crucial if the EU is serious about becoming a climate leader and geopolitical player”, written by Draghi. On diigo, I highlighted the following lines,

The UK government has chosen to significantly raise public investment over the next five years and has adopted precise rules to ensure that borrowing is used only to fund this investment. … Moreover, in order to ensure the quality of spending, transactions will be validated by independent authorities.

To which I reply, “Of course Draghi would argue for independence. The near cultish following with which his recent comments have been greeted is based on the desire by politicians and capitalists to ensure the macroeconomic policy and regulation is outsourced to non-democratic agencies. Central bankers underestimate the ability of democracies to present a wisdom of crowds, even on investment decisions. An example of this is the EU’s horizon investment valuation process, which ranks proposals and select winners from a competition. The technocrats and democrats, particularly representative politicians also underestimate the value that citizens assemblies may bring to these decisions.

Draghi continues,

“A more efficient use of Europe’s high private savings rates requires integrating its capital markets. To redirect private investment from mature industries to more advanced sectors will hinge on completing the single market. … innovative firms in fast-growing sectors such as digital services will not be able to scale up and attract capital. And, as a result, investment will remain locked in old technologies.”

Is this true? Perez, whose theories I summarise on my blog,  argues that the declining profit of now legacy industries will ensure that investment goes to new innovative industries. Also, like most Draghi is betting on digital services as the driver; Perez’s theories suggest that IT is now reaching its stagnation stage and will be replaced although we maybe in a stage where the political power of legacy capitalism is too powerful to be overcome. This is why corporate lobbying power is so destructive to human progress. …

Automating the professionals

Automating the professionals

I attended a seminar the other day which raised some questions in my mind about the next and prior waves of automation, the location of value creation and the legal/social barriers to adoption. Much is spoken of the use of artificial intelligence to augment or replace professional workers and this note briefly looks at this. It examines the nature of decisions and the need to transparently serve a human rights agenda, the question of regulation and assessment by one’s peers, and why it’s so hard to organise Trade Unions amongst the software authors. …

It’s cold outside

It’s cold outside

Carlotta Perez argues that Kondratiev Long Waves have an internal shape. One of the trends is the rollout of the driving technology from the core to the periphery and this takes place in the maturity phase as profitability of the once new technology declines. Another important event is the next eruption and where that takes place. Between the Steel & Oil phases, the world’s core moved from England, the economic and political epicentre of the British Empire to the USA and we should remember that this role was contended for by both Germany and the Soviet Union. It’s moved once, it can move again but it’s most unlikely to come back to England. I wonder what being part of the periphery will be like. I suppose it depends upon where the core is. Will it remain in the USA or move, to China or even the EU. The key will be the dynamism of the innovation economy; it looks like, due to Brexit, the UK’s Universities will decline and that much of aerospace and biosciences will leave the UK. Otherwise the UK & US industries may be defended by the ubiquity of English, but the EU has had 40 years of using it as their language of commerce and to a great extent the language of government.

I can’t see it clearly, but the corruption and financialisation of the anglosphere economies are stymieing innovation and inhibiting “creative destruction”; there is opportunity for other national economies to do better. It would also seem that Perez’s predicted regulatory correction is nostalgic this time, looking back to times when things seemed better, or defending old out dated business models. We  cannot recreate the industries of the steel revolution.

It’s unlikely to be pleasant, especially if the UK moves from being a 2nd tier economy to peripheral one. …

Regulation

I have been a fan of Carlotta Perez’s work since reading her book; her account of five phases of capitalism with dominant technologies and morphing socio/political structures seems to explain so much. I have just started Mitchell & Fazi’s “Reclaiming the State”, and in their pursuit of why the State was lost, they talk about the “regulation theory school”  which  states that capitalism co-exists with other oppressive forces and that, in their words, capitalism “develops across its history through a series of discontinuous stages”. They see Michael Aglietta as its first proponent, and it would seem that the word Regulation comes from his 1979 paper, “A Theory of Capitalist Regulation: The US Experience”. (Why did we not do this stuff at University?) More to read! …

At Orgcon 17

I am just back from orgcon17, and here are my notes; this was a two day conference, with many sessions on issues of concern to digital liberty campaigners on regulation of the use personal data. It took place over two days, consisting of lectures & panels and workshops. On the first day, at Friends House, where we had the use of the amazing central meeting room it looked at the coming legislation on investigatory powers, the use of the law to make political advances (it’s slow & uncertain), an interview with Caroline Criada Perez, the campaigner who got the first woman on British bank notes and a women’s statue in Parliament Sq.. It looked at e-voting systems in Taiwan where the government used a consensus building software product to engage the population in traffic management solutions design. Jamie Bartlett spoke about privacy vs. security. There was a session on Digital Liberty & regulation in Nigeria. There was also a session on the privacy vulnerability to the coming “age verification for porn users” regulations. Much of these lectures are available on the ORG’s Video channel.

The second day consisted mainly of workshops focused on campaigning. There was a workshop that reviewed the technical architecture of the investigatory powers bill (as they then were i.e. the architecture and legislative stage). There was a workshop in using the Freedom of Information Laws to enhance campaigning, and also about the likely campaigning tools to be offered by the coming General Data Protection Regulation (GDPR) i.e. enhanced subject access requests, the right to be forgotten, of remediation and to object and stop processing.

There were sessions on building local Open Rights Group groups, how to perform IT security effectively for campaigners and a review of the ORG’s Blocked tool.

I chaired a session on building a Charter of Digital Rights, with Richard Barbrook and Mara Leverkuhn. Richard announced his initiative to put some more detail behind the Jeremy Corbyn’s Digital Manifesto which they created to support his 2016 Leadership Campaign. I documented/advertised this session on my blog https://davelevy.info/digital-liberties/

ooOOOoo

The relevance of this conference to CISSP certification is in the Regulation & Compliance domain. One of the critical to IT organisations is failing to keep up with laws and regulations. The ORG focuses on the law as it relates to privacy, censorship & intellectual property. Businesses need to keep these laws in mind when designing their risk taxonomy and control catalogue.

This was written in Oct 2018, nearly 12 months after the event; I did it to claim CISSP CPD Credits. I have as normal, for me, in these circumstances backdated the article to the time of occurrence. …

The next evolution of capitalism

The next evolution of capitalism

How much is Capitalism changing due to the silicon revolution in the means of production. A bunch of books, articles and reviews have been released over the last few months considering the short and long term future of the techno-economy. We are on the cusp of Silicon Revolution’s “Golden Age”, when the people rein in the excesses of the capital market’s hypergrowth excesses. This story was originally created in the Summer of 2015, my hope was to read both “Post Capitalism” and “The 2nd Machine Age” and write a blog on my views as to the nature of the changes coming; but life got in the way. …

Commoditisation killed Sun Microsystems

Commoditisation killed Sun Microsystems

Eric Raymond,  wrote a short article on his blog, “Commoditization, not open source, killed Sun Microsystems”, which I commented on. This blog article says a little bit more than I felt I had room for on someone else’s blog, and I probably abused his hospitality there. I have thought long and hard about this, because I worked there and thought it i.e. the company was worth saving. Here’s what I said on Eric’s blog, and a bit more.  I start by saying that the first thing about Sun’s failure is that it all depends on where you want to start; Sun’s failure was baked in long before the 2000 fall from profit.  …