The Seneca effect

Temple of the Great Jaguar, Guatemala Dennit Jarvis

Yours truly wrote a piece titled Thru the Looking Glass - Fragile vs. Robust ... A tiny sample :) a blurb focusing on complex vs. simple in terms of fragility and how it applies to civilization. Seems Seneca focused on this very same issue in the 1st century, which means this rube is not alone in showing why complex system fail ... with undue haste.

Nature: Small periodic fires, started by lightning, clears away dead brush to permit new growth. Robust 

Man: By trying to prevent fires of any kind insures the build-up of dead brush to biblical proportions, thus generating the distinct possibility of creating fires unable to be controlled. Channel CA in 2019. Fragile  

To assume is to err. Fragile

Ancient bust of Seneca, part of the Double Herm of Socrates and Seneca

During the first century of our era, the Roman philosopher Lucius Annaeus Seneca wrote to his friend Lucilius that life would be much happier if things would only decline as slowly as they grow. Unfortunately, as Seneca noted, “increases are of sluggish growth but the way to ruin is rapid.” We may call this universal rule the Seneca effect.

Seneca’s idea that “ruin is rapid” touches something deep in our minds. Ruin, which we may also call “collapse,” is a feature of our world. We experience it with our health, our job, our family, our investments. We know that when ruin comes, it is unpredictable, rapid, destructive, and spectacular. And it seems to be impossible to stop until everything that can be destroyed is destroyed.

Figure 1: The Seneca curve, from Bardi’s ‘The Seneca Effect’ (2017). The intensity of something as a function of time (going left to right). For intensity, imagine it is the value of a financial stock. It grows slowly, then it declines rapidly when the company generating it goes bankrupt.

Seneca's take aligns with science as phase transitions are never linear. Remember, the day before a pond freezes, 50% of the surface is ice free. 

Entropy rules ...

And so it begins ...

 

A stream runs through the dried earth of a former wetland near Tulelake, Calif.,

in June 2021. (Nathan Howard/AP)

The start point for forced migrations in the US, thanks to GW, is southern California as drought grips the land, thus initiating a water limitation edict beginning on June 1st. With this in mind, consider the southwest situation as the Colorado River continues to dry up to the extent hydroelectric power may go away if needed water to drive turbines is no longer accessible.

The historically severe drought in Southern California has compelled one of its water suppliers to implement “emergency” conservation measures for the first time that will affect about 6 million people.

The Metropolitan Water District of Southern California (MWD) declared the water shortage emergency Tuesday and ordered limits to “reduce nonessential water use” to parts of Los Angeles, Ventura and San Bernardino counties. The move includes the unprecedented measure of restricting outdoor watering to one day a week for about a third of their region.

Map of some areas to be hit by new water restrictions

“We are seeing conditions unlike anything we have seen before,” said Adel Hagekhalil, the district’s general manager. “We need serious demand reductions.”

And so it begins ...

30X30

A choice resting spot

30X30, a plan to save biodiversity on planet earth can work if we let it.

The U.S. covers a vast array of ecosystems, from Alaska’s Arctic tundra to Florida’s tropical swamps, with prairies, snow-capped peaks and deserts in between. Like the rest of the planet, humans are putting those ecosystems under enormous strain as we convert land to agriculture and urban development, release myriad pollutants and burn fossil fuels that spew heat-trapping greenhouse gases. But fast action can stem the resulting loss of biodiversity and give animals, plants and the ecosystems they make up the best possible chance to adapt.

One action getting headlines is a science-backed proposal to set aside at least 30 percent of the planet’s surface for conservation by 2030 known as 30x30. The Biden administration has endorsed this 30 percent goal for the U.S. and made it a principle of its Conserving and Restoring America the Beautiful plan. The administration recently announced that the U.S. had formally joined the High Ambition Coalition (HAC) for Nature and People, a group of more than 90 countries encouraging the adoption of the 30x30 target.

It's now or never, right?

The question to ask is ...

 Time to go, is it not?

They don't want ...

Schöning/ullstein bild/Getty Images

The sad state of affairs regarding the gullibility of people to buy into bogus crap perpetrated by trolls too many to count is galling but, as the great, late George Carling so often said, They don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. Thats against their interests. 

Which leads us into ...

Meet the Shitposter Who Started a Right-Wing Moral Panic About the Snickers Dick Vein

Juniper is very open about her posts being fake news — but this isn’t the first time they’ve gone viral

To whit.

The pinned tweet on Juniper’s account is “it’s incredibly easy to create fake news it’s actually ridiculous lol.” But that hasn’t stopped right-wing media outlets from frothing at the mouth over her tweets, most recently a fake news headline indicating that Snickers was set to remove the beloved “dick vein” from its eponymous candy bars.

George Carlin

I rest my case.

Keeping America safe from democracy ...

Keeping America safe from democracy is the latest republican plan. Excellent is it not?

Maher is right, the most dangerous party in America is the repugs. 

Ethics 101

 

A serious question is it not?

Of Light & Shadow

Goethe's theory of light always involves shadow as we always see the interplay of the two no matter the light source. This clip shows why Goethe was onto something profound without question.

Light spectrum, from Theory of Colours – Goethe observed that colour arises at the edges, and the spectrum occurs where these coloured edges overlap.

Theory of Colours (German: Zur Farbenlehre [tsuːɐ̯ ˈfaʁbn̩ˌleːʁə]) is a book by Johann Wolfgang von Goethe about the poet's views on the nature of colours and how these are perceived by humans. It was published in German in 1810 and in English in 1840.[1] The book contains detailed descriptions of phenomena such as coloured shadows, refraction, and chromatic aberration.

Goethe's book provides a catalogue of how colour is perceived in a wide variety of circumstances, and considers Isaac Newton's observations to be special cases.[2] Unlike Newton, Goethe's concern was not so much with the analytic treatment of colour, as with the qualities of how phenomena are perceived. Philosophers have come to understand the distinction between the optical spectrum, as observed by Newton, and the phenomenon of human colour perception as presented by Goethe—a subject analyzed at length by Wittgenstein in his comments on Goethe's theory in Remarks on Colour.

Something profound indeed.

Just a matter of time ...

 

Just a matter of time ...

Buyer beware ...

Photo by Dylan Calluy on Unsplash

BRT has discussed the dubious value of NFTs for quite some time, equating said way of creating value along the lines of the tulip mania in Holland in the 1600s as both entities are replicable but differ as tulips are physical while NFTs are not. Seems legal scholars agree.

In 2021, an investment firm bought 2,000 acres of real estate for about US$4 million. Normally this would not make headlines, but in this case the land was virtual. It existed only in a metaverse platform called The Sandbox. By buying 792 non-fungible tokens on the Ethereum blockchain, the firm then owned the equivalent of 1,200 city blocks.

But did it? It turns out that legal ownership in the metaverse is not that simple.

The prevailing but legally problematic narrative among crypto enthusiasts is that NFTs allow true ownership of digital items in the metaverse for two reasons: decentralization and interoperability. These two technological features have led some to claim that tokens provide indisputable proof of ownership, which can be used across various metaverse apps, environments and games. Because of this decentralization, some also claim that buying and selling virtual items can be done on the blockchain itself for whatever price you want, without any person or any company’s permission.

Despite these claims, the legal status of virtual “owners” is significantly more complicated. In fact, the current ownership of metaverse assets is not governed by property law at all, but rather by contract law. As a legal scholar who studies property law, tech policy and legal ownership, I believe that what many companies are calling “ownership” in the metaverse is not the same as ownership in the physical world, and consumers are at risk of being swindled.

Exactly.

A tulip, known as "the Viceroy" (viseroij), displayed in the 1637 Dutch catalogue Verzameling van een Meenigte Tulipaanen. Its bulb was offered for sale for between 3,000 and 4,200 guilders (florins) depending on weight (gewooge). A skilled craftsworker at the time earned about 300 guilders a year.[1]

The term "tulip mania" is now often used metaphorically to refer to any large economic bubble when asset prices deviate from intrinsic values.[7][8]

Early Spring

Early Spring's the time earth wakes up. Flowers start to bloom, insects make their presence known, birdsong permeates the air and frogs begin their annual mating dance the moment water warms to the right temperature.

Insect Apocalypse ... looms

Scientists have found a clear link between extreme land use and 

the climate crisis in pushing insect species toward collapse. 

While Americans are the leaders in not worrying about climate change, the rest of the world is not, especially when considering how rapidly the 6th great extinction event, known as the Anthropocene, is gathering speed with one focal point being the ongoing insect collapse happening 24/7 as we speak.

Extreme land use combined with warming temperatures are pushing insect ecosystems toward collapse in some parts of the world, scientists reported Wednesday.

The study, published in the journal Nature, identified for the first time a clear and alarming link between the climate crisis and high-intensity agriculture and showed that, in places where those impacts are particularly high, insect abundance has already dropped by nearly 50%, while the number of species has been slashed by 27%.

These findings raise huge concerns, according to Charlotte Outhwaite, the lead author on the study and researcher at the University College London, given the important role of insects in local ecosystems, pollination and food production, and noted that losing insects could threaten human health and food security.

"Three quarters of our crops depend on insect pollinators," Dave Goulson, a professor of biology at the University of Sussex in the UK, previously told CNN. "Crops will begin to fail. We won't have things like strawberries.

"We can't feed 7.5 billion people without insects."

This can change if we want it to.

However, the report says we can all act as first responders and take relatively simple steps to help reverse what the report describes as a "catastrophic decline in the abundance and diversity of insects."

"Insects live in our parks and gardens. Gardeners can really make a difference," he said.

He said habitat loss was the biggest culprit in declining insect populations globally, but pesticide use in farming and climate change were also contributing.

• Mow your lawn less frequently and allow part of it to flower. View weeds such as dandelions -- which are great for bees -- as wildflowers and let them grow.
• Grow plants that attract pollinators like bees and butterflies, such as lavender, catmint and buddleia.
• Make a bug hotel or provide a log or brush pile. These attract humble insects and invertebrates like woodlice, which recycle nutrients and act as food for birds and small mammals.
• Dig a pond and watch as it attracts dragonflies, pond skaters and whirligig beetles.
• Urge local authorities to plant native trees that flower on streets and parks and plant wildflowers in road medians.
• Avoid using pesticides and encourage authorities to do the same.

Logic be dammed ...

 Photograph: Paramount/Everett Collection

Spock, the prime example of logic and coolness under pressure, was wrong 83% of the time as the word assume was inherently part of his persona. Nevertheless, he was pretty damn cool without question.

“Spock is held up as this exemplar of logic and reason and rationality, but he’s set up, in my opinion, as almost a weak caricature—a straw man—of reason and rationality, because he keeps making all these dumb mistakes,” Galef says in Episode 462 of the Geek’s Guide to the Galaxy podcast. “That’s the show’s way of proving that, ‘Aha! Logic and reason and rationality aren’t actually all that great.'”

When reading this, the profound philosophy of the Tao comes to mind as to assume nothing is both hard and wise as reality is always changing, where information is always incomplete and the ability to accept this is key to thriving in a world we will never fully understand.

The bagua, a symbol commonly used to represent the Tao and its pursuit.

In the franchise, Spock makes confident predictions based on his superior Vulcan mind. Galef was curious to see exactly how often these predictions pan out. “I went through all of the Star Trek episodes and movies—all of the transcripts that I could find—and searched for any instance in which Spock is using the words ‘odds,’ ‘probability,’ ‘chance,’ ‘definitely,’ ‘probably,’ etc.,” she says. “I catalogued all instances in which Spock made a prediction and that prediction either came true or didn’t.”

Spock’s biggest weakness is his failure to understand that other people don’t always behave “logically.” He also makes no attempt to update his approach, even when his mistakes get his crewmates killed.

He's lucky he didn't get killed also.

“He’s not a spring chicken,” Galef says. “He’s interacted with non-Vulcans before, and so presumably he’s had lots of opportunities to see that, actually, lots of people don’t behave the way he thinks they—rationally —should behave. And yet he fails to learn from those instances of missed predictions because instead he just shrugs and says, ‘Well, the world didn’t behave the way it should have.'”

It never does

According to Boyd, decision-making occurs in a recurring cycle of observe–orient–decide–act. An entity (whether an individual or an organization) that can process this cycle quickly, observing and reacting to unfolding events more rapidly than an opponent, can thereby "get inside" the opponent's decision cycle and gain the advantage.

The Art of War also applies, does it not?

The beginning of The Art of War in a classical bamboo book from the reign of the Qianlong Emperor

Pterosaurs!!!

Artist reconstruction of Tupandactylus imperator. Credit: Bob Nicholls (CC BY)

Of all the animals yours truly would like to see, Pterosaurs top the list. Exotic, mysterious and above all else, spectacularly weird, these ancient flyers top the list in terms of what wonderful mischief nature can come up with to beguile us humans to the max.

Long before the first birds flapped and fluttered, pterosaurs took to the skies. These leathery-winged reptiles, their bodies coated with wispy filaments paleontologists call pycnofibers, were the first vertebrates to truly fly. Now experts are beginning to think pterosaurs and birds had more in common than previously assumed: An exquisitely preserved fossil from Brazil not only hints that pterosaurs’ peculiar filaments may have been true feathers but also suggests that this plumage could possibly have been as riotously colored as that of any modern toucan or tanager.

If both pterosaurs and dinosaurs had feathers, and if those feathers had variable shades for visual communication, then either those traits evolved independently in each branch or they go back to the common ancestors of both groups—reptiles that lived early in the Triassic Period more than 243 million years ago. “We feel that the common structure in dinosaurs and pterosaurs reflects shared ancestry,” McNamara says. Likewise, the findings add support to the hypothesis that some kind of feather or feather precursor was present among these Triassic reptiles, hinting that many more pterosaurs and dinosaurs wore feathery body coverings than paleontologists expected. Pêgas points out that no skin impressions, feathers or other body coverings from Triassic dinosaurs and pterosaurs have yet been found to test this hypothesis. Paleontologists are only just beginning to uncover the deep history of colorful fluff and fuzz, a line of inquiry that will have experts digging into the earliest days of the Age of Reptiles. 

From the tiny to the huge, weird is their middle name.  :)

Reconstruction of one of the studied short-tailed pterosaurs. 

Credit: Yuan Zhang, Nature Ecology & Evolution

Even experts often resort to the word “bizarre” when describing pterosaurs, the winged dragons that ruled the skies for more than 160 million years. This is especially true of the group of short-tailed pterosaurs called anurognathids, which used to dart and bob through Mesozoic era forests like bats, hawking for insects.

Credit: Chase Stone

The Mesozoic era, which spanned the time from 251 million to 66 million years ago, is often referred to as the age of dinosaurs. But although dinosaurs reigned supreme on land back then, they did not rule the air. Instead the skies were the dominion of an entirely different group of beasts: the pterosaurs.

Pterosaurs were the first vertebrate creatures to evolve powered flight and conquer the air—long before birds took wing. They prevailed for more than 160 million years before vanishing along with the nonbird dinosaurs at the end of the Cretaceous period, around 66 million years ago. In that time, they evolved some of the most extreme anatomical adaptations of any animal, living or extinct. The smallest of these aerial predators was the size of a sparrow. The largest had a wingspan that rivaled that of an F-16 fighter jet. Many possessed heads larger than their bodies, making them, in essence, flying jaws of death. Pterosaurs patrolled every ocean and continent on Earth. No animal in the Mesozoic would have been safe from their gaze.

Adaptations of these amazing flyers to their environment goes beyond imagination.

Skeletal reconstruction of a quadrupedally launching Pteranodon longiceps

Mark P. Witton1, Michael B. Habib

Pterosaurs were the first flying vertebrates and ruled the skies of the Mesozoic era. These flying arcosaurs appeared in the Triassic period and evolved during the Jurassic and Cretacic periods to highly-adapted forms. This infographic shows some of the most remarkable adaptations of pterosaur anatomy and physiology, including the anatomy of the wing or the structure and histology of the patagium (the pterosaur wing membrane), among others, depicted in Pteranodon, one of the most well-known groups of cretacean pterosaurs and an outstanding example of the degree of specialization acquired by pterosaurs.

Addendum. The strangest of them all were the Azhdarchid pterosaurs  With wingspans up to 40 feet, as tall as a giraffe and weighing close to 500 lbs, they were the true terrors of the skies without question.

The Maastrichtian, Transylvanian giant azhdarchid pterosaur Hatzegopteryx sp. preys on the rhabdodontid iguanodontian Zalmoxes. Because large predatory theropods are unknown on Late Cretaceous Haţeg Island, giant azhdarchids may have played a key role as terrestrial predators in this community.

azhdarchid pterosaur  Hatzegopteryx (A-B, holotype in light grey and referred elements in dark grey) compared with Arambourgiana (C) and Quetzalcoatlus sp. (D-E)

Size comparison of Hatzegopteryx (red) with Pelagornis sandersi (orange) and royal albatross (green)

The wingspan of the latter had been estimated at 11 to 12 metres (36 to 39 ft) in 1981;

Wonderful mischief indeed.

Phobos in transit ...

April 2, 2021, solar eclipse on Mars.

A solar eclipse, Martian style, never ceases to amaze. :)

However, earlier this month operators of rover turned its powerful Mastcam-Z camera toward the sky to capture Mars' potato-shaped moon Phobos transiting across the surface of the Sun. And the result, well, the result is spectacular.

Yes indeed. :)

Up & Up ...

There's money to be made, this time its Ukraine for 3 billion & counting. Who knows, it might be more, much much more if WWIII doesn't intervene.

JUAN GONZÁLEZ: And, Bill, could you talk about the relative size we’re talking about here — this is now about more than $3 billion from the Biden administration to Ukraine — in terms of the context of what this means to these companies, this increased amount of money not only now, but, clearly, there will be security needs for years, and maybe decades, into the future?

WILLIAM HARTUNG: Well, this is a bonanza for the companies. You know, they’re going to profit from this in so many ways, it makes my head spin. But you’ve got the $3 billion in direct arms, which is a substantial amount for these companies. Then you’ve got countries like Germany increasing their Pentagon — military budgets to buy things like Lockheed Martin F-35s for billions of dollars, or Poland buying General Dynamics tanks. And then you’ve got several flows of money. There’s a Pentagon program to arm Ukraine. There’s a State Department aid program to help arm Ukraine. And then, of course, there’s the Pentagon budget. And these companies and the Pentagon are arguing that Ukraine is a reason to push it to record levels: over $800 billion in the Biden proposal, which is $100 billion more than at the peak of the Cold War.

So, between the arms to Ukraine, arming the European buildup, the Pentagon being jacked up far beyond what is needed even to address the Ukraine crisis, these companies, which already get — you know, the top five get $150 billion a year from the Pentagon. That’s just going to go up and up. So this is kind of unfortunate for the world, but it’s good financial news for these companies.

War is a racket - Smedley Butler

 

1935 cover from the first printing

Addendum ... 

Even before hostilities broke out, the CEOs of major weapons firms were talking about how tensions in Europe could pad their profits. In a January 2022 call with his company’s investors, Raytheon Technologies CEO Greg Hayes typically bragged that the prospect of conflict in Eastern Europe and other global hot spots would be good for business, adding that “we are seeing, I would say, opportunities for international sales… [T]he tensions in Eastern Europe, the tensions in the South China Sea, all of those things are putting pressure on some of the defense spending over there. So I fully expect we’re going to see some benefit from it.”

In late March, in an interview with the Harvard Business Review after the war in Ukraine had begun, Hayes defended the way his company would profit from that conflict:

“So I make no apology for that. I think again recognizing we are there to defend democracy and the fact is eventually we will see some benefit in the business over time. Everything that’s being shipped into Ukraine today, of course, is coming out of stockpiles, either at DoD [the Department of Defense] or from our NATO allies, and that’s all great news. Eventually we’ll have to replenish it and we will see a benefit to the business over the next coming years.”

Agan .... it's all about the money.

Javelin missile. Photo: US Army/Markus Rauchenberger.

Something perverse about this ...

 

IMHO, something's perverse about the upcoming sale of one of Warhol's Marilyn prints but it's not about the piece, it's about how much money billionaires will pay for said art. Tulip time resides big time in terms of buying art or could it be an artistic way to launder money? One never knows, do one?

Will This Warhol Become the Most Expensive Artwork Ever Sold?

When one of the pop artist’s famed portraits of Marilyn Monroe goes to auction next month, some observers think it could fetch up to half a billion dollars. What is it about this particular work that gives it such potential to break the market?

“Two hundred is a huge benchmark. It’s the highest reported estimate ever, it’s the highest estimate ever put on an artwork,” said Alex Rotter, the Christie’s chairman who’s overseeing the sale. “Could we have set more? You could always say more.”

Many are indeed saying more, making the $200 million mark seem not like the estimate—but the jumping-off point. Several dealers, advisers, auction specialists, and Warhol experts who I spoke to recently believe that, if the right tech billionaires, Middle Eastern sovereign wealth funds, Asian foundations, or pandemic-enriched shipping magnates go head-to-head during the bidding, the work could hammer as high as $500 million, making it the most expensive artwork of all time—a marker currently held by Salvator Mundi, a rendering of Jesus Christ attributed to Leonardo da Vinci that went for $450 million in 2017.

Leonardo da Vinci (alone) or Leonardo with workshop participation

Nothing personal but the talent required to paint the Mundi is somewhat higher than creating a silkscreen print of a photograph is it not?

The missing word is ...

Artwork by Nikita Iziev

BRT has discussed the issue of AI ad nauseam as said subject is both interesting and disquieting at the same time. Not only are we losing control of this emerging tech due to the fact we don't know how it works, said open ended entity is becoming smarter at rates beyond the kin of man.

You are sitting in a comfortable chair by the fire, on a cold winter’s night. Perhaps you have a mug of tea in hand, perhaps something stronger. You open a magazine to an article you’ve been meaning to read. The title suggested a story about a promising — but also potentially dangerous — new technology on the cusp of becoming mainstream, and after reading only a few sentences, you find yourself pulled into the story. A revolution is coming in machine intelligence, the author argues, and we need, as a society, to get better at anticipating its consequences. But then the strangest thing happens: You notice that the writer has, seemingly deliberately, omitted the very last word of the first                   .

The missing word jumps into your consciousness almost unbidden: ‘‘the very last word of the first paragraph.’’ There’s no sense of an internal search query in your mind; the word ‘‘paragraph’’ just pops out. It might seem like second nature, this filling-in-the-blank exercise, but doing it makes you think of the embedded layers of knowledge behind the thought. You need a command of the spelling and syntactic patterns of English; you need to understand not just the dictionary definitions of words but also the ways they relate to one another; you have to be familiar enough with the high standards of magazine publishing to assume that the missing word is not just a typo, and that editors are generally loath to omit key words in published pieces unless the author is trying to be clever — perhaps trying to use the missing word to make a point about your cleverness, how swiftly a human speaker of English can conjure just the right word. 

It gets better ...

Before you can pursue that idea further, you’re back into the article, where you find the author has taken you to a building complex in suburban Iowa. Inside one of the buildings lies a wonder of modern technology: 285,000 CPU cores yoked together into one giant supercomputer, powered by solar arrays and cooled by industrial fans. The machines never sleep: Every second of every day, they churn through innumerable calculations, using state-of-the-art techniques in machine intelligence that go by names like ‘‘stochastic gradient descent’’ and ‘‘convolutional neural networks.’’ The whole system is believed to be one of the most powerful supercomputers on the planet.

And what, you may ask, is this computational dynamo doing with all these prodigious resources? Mostly, it is playing a kind of game, over and over again, billions of times a second. And the game is called: Guess what the missing word is.

Fulcrum ...

Mission creep ...

In 1961-2, US Advisors began training the Montangnard to fight the North Vietnamese Vietcong, thus starting the disaster of Vietnam after Kennedy was assassinated Nov 22, 1963. Echos of this  CF can be seen with the $800 million dollar initiative to support Ukraine to include, you guessed it, training soldiers, in this case, to use US 155mm howitzers against the Russians. The difference here is Russia's nukes and the potential of staring WW III if a misstep is made in how the US handles its undeniable escalation vis a vis the Russians in the supporting of Ukraine.

A U.S. Army Ranger trains Montagnard guerrillas

U.S. troops deployed to Europe will begin training the Ukrainian military on howitzers and radar systems as part of a massive new weapons and security aid package announced Wednesday.

The planned training is a major development in the U.S. involvement in the bloody Russian war on Ukraine and will put its military once again in direct contact with Ukrainian forces after U.S. troops left the country in the weeks ahead of Russia's invasion.

President Joe Biden has vowed that Americans will not fight in the country, and thousands of troops deployed to eastern Europe have so far only guarded the border of the NATO alliance as the conflict rages next door.

Tell me if we heard this narrative before regarding Nam. Mission creep looms.

History does not repeat but it often rhymes. - Mark Twain

Double Entry

Modified image from Alex Zaharia

We all know Elon Musk is the wealthiest man on the planet, right? Well, maybe not as accounting 101 shows a different picture as how exactly accounting works differs from what this rube has mistakenly assumed about how accounting actually works for far too many years. :)

To whit.

There is a real economy and an unreal economy. Confusingly, the unreal one is called just ‘the economy’ and the real one is generally ignored. Understanding this distinction is crucial to understanding how fucked we are, and where we need to be.

Unreal Engine

The unreal economy is all the markets, GDP figures, and most of the metrics we use to measure reality. They say you get what you measure, and what we measure is unreality. To understand this, just look at the wealth of the ‘world’s richest man’. It’s not real.

To understand that, however, we need to go back to the Renaissance, when the accounting of Musk’s wealth really started.

Luca Pacioli, about to drop science on y’all

Luca Pacioli Sleeps With The Fishes

People from Iraq to China have been ‘accounting’ forever, merchant ledgers are some of the oldest known forms of writing. Capitalist accounting, however, is a whole-ass Renaissance art.

Luca Pacioli, Leonardo Da Vinci’s math tutor and homie, codified modern accounting in the 1494. The art may have come via India or the Muslim world (along with Hindu-Arabic numerals), but I’ll refer to Pacioli here. Not only did he advocate using numbers as we know them, he codified the same system that lets us ‘know’ Elon Musk’s wealth today.

How accounting really works. :)

from Jane Gleeson-White’s fascinating book Double Entry

The word Assume applies ...

Whereas working people think of wealth as cash on hand, ‘cash’ is just one entry in an accounting book. Datini could have 10,000 florins in Florence, but 10,000 florins worth of armor on a boat, and he had to account for both. Counting tells you what ships have come in. Accounting tells you about the ship that’s yet to come. This is an important method for ‘perceiving’ complex business dealings, but as you can see, it’s inherently prone to being wrong.

At the end of the day, you simply don’t know if your ship will come in. That’s why Renaissance accounting books, including Datini’s, were almost always dedicated to God.

Gleeson-White’s really does attempt to answer these questions, 

I can’t recommend it highly enough

Unreal Wealth

Today we have Elon Musk ‘worth’ $265 billion based mostly on a company which has retained earnings of less than $500 million. That is to say, in 18 years of operations the company has lost money every year except two, digging them just barely out of the hole. The legally-adult company has earned only $500 million total. This is less that one day of Amazon profits, but Musk is somehow worth more than Bezos.

How is this so? Because investors are betting not on ships that have come in, but ships that are yet to come. And they’re betting on other people believing in the same thing. You can see how this speculation spirals, ad absurdum.

Thus you have a car company with less revenue than Hyundai, valued higher than every other car manufacturer—people producing many more cars and certainly more cash. Thus you have a man who’s wealth is not in his hand, but in other people’s minds. Elon Musk’s wealth is their belief that his ship will come. There’s no real cash or cars to justify it. It’s just the belief that there’s something over the horizon.

The rabbit hole beckons and yes, I bought the book. :)