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Technology Isn't the Only Source Of Innovation

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The solution is to recognize the critical role of social innovation enabled by networked human and social capital.

To my general astonishment, my new book Get a Job, Build a Real Career and Defy a Bewildering Economy has remained in the top 10 of the Kindle Store category "Job Hunting" since its release four weeks ago. Some observers attribute this to the book's platitude-free action plan; maybe people are looking for a career guide that explains the economy we must work with if we are to prosper in the years ahead.

This week I've addressed the structural reasons for the decline of the middle class. As with all complex systems, there is no one cause--instead there is an interconnected web of causes:

The Decline of Small Business and the Middle Class
The Changing Nature of Middle Class Work
How the Middle Class Lifestyle Became Unaffordable
The Destabilizing Truth: Only the Wealthy Can Afford a Middle Class Lifestyle

So what is the solution to this decline? We face a double-bind dilemma: we are constantly reassured that technological innovation can provide the solution to all problems--yet the problem here is that technological innovation is destroying the need for costly human labor. Technological innovation alone can't solve the problem because it is a key cause of the problem.

As I have noted many times, the solution is not to limit technology--that only leads to impoverishment of the entire economy.

The solution is to recognize the critical role of social innovation enabled by networked human and social capital.

I have stressed that the purpose of work is to create value and solve problems. To understand what this means in the real world, let's look at two small-scale examples of how value is created in the emerging economy with social innovation.

Studies have found that human creativity is largely the result of sharing ideas and transferring innovations in one field to other fields. Innovation may arise from a single person, but its application requires human and social capital.

These local-economy examples illustrate how human and social capital works in conjunction with infrastructure, community and financial capital.

Example 1: Farming as currently practiced is overwhelmingly industrial, and few would see any application of knowledge to the sector as being useful except to further the mechanization/automation of agribusiness. Yet highly educated people are profitably truck farming by applying their knowledge of marketing, food preparation and the restaurant business.

For example, the trend-setting restaurant Chez Panisse in Berkeley, Calif., has a supply network of small farms, which in some cases are run by former employees of the restaurant. These small farmers are paid a good price for supplying very fresh organic produce. What is delivered daily sets the restaurant’s menu for that day's lunch and dinner.

The key value creation in this arrangement is trust (social capital), attention to quality, and the ability to fashion menus around a variety of seasonal produce and meats (human capital). The labor of raising the produce is essential but it alone doesn't create the value.

Example 2: Street-Level Cycles in Berkeley, Calif., is an organization that partners long-abandoned city property with private enterprise to offer classes in bicycle repair and free use of the shop’s tools to do-it-yourselfers who want to repair their own bikes. It also provides bike repair services and sells used bicycles. The income generated by the repair service and sales of used bikes supports a small staff and enables the free community use of the shop’s tools.

The amount of financial capital needed to start this enterprise was modest. The city-owned building was unoccupied for years. In exchange for use of the property, the city gets a self-funding, free community educational resource and service.

The enterprise serves a wide spectrum of the community: students, do-it-yourselfers, those needing bike repairs or an inexpensive used bicycle. In offering the free classes to students, the enterprise has no competitors. In selling repair services and used bikes, it competes with other local bike shops. If someone wants to learn how to repair bicycles, this organization offers a nexus of tools and opportunities to learn and practice.

This low-cost synergy of local government, private enterprise, education, community service and social and human capital did not require any technological innovation-- it required social innovation. It illustrates that the profit motive--often held up as the only motivator within capitalism--is not the only motivation for either innovation or enterprise.

These small-scale examples illustrate that innovation often takes what already exists in terms of financial capital and infrastructure and combines these ideas and resources into new methods of value creation. They also show that the key role of human and social capital in creating value via social innovation does not necessarily require more financial capital or infrastructure--and indeed may require less. This can be summarized as doing more with less.

Value creation and problem-solving arise from many sources, not just the technological innovations that receive media coverage. If we combine the many sources of value creation unleashed by digital technologies, we realize that ours is one of the great transformative eras in human history.


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Sun, 05/11/2014 - 16:31 | 4748697 ZerOhead
ZerOhead's picture

So now people that can't afford cars can fix their bicycles so they can pedal their way to a "value added" organic meal at Chez Panisse that they simply can't afford.

That's your future folks... it doesn't work... and along with the implementation of the next generation of advanced robotics neither will you.

Sun, 05/11/2014 - 16:33 | 4748741 Quus Ant
Quus Ant's picture

I've eaten at Chez Panisse a few times.  Out of towners always want to go there.  It's good- which it should be at $100 a plate, but a model for the rest of us? No

The solutions will only become apparent when the apparatus obstructing them is out of the way. Same as it ever was.

Sun, 05/11/2014 - 18:12 | 4749001 Georgia_Boy
Georgia_Boy's picture

An individualized artisan economy isn’t the answer, first because a lot of the economy can’t do that (individualized Boeing airplanes for everyone?). But more importantly, it’s more of the same problem, runaway individualism itself.

I think “social innovation” (to use that phrase another way) is as much a part of the problem as technology. We are “socially innovating” ourselves into destroying American families, churches, local schools, all the institutions that gave us a sense of community and identity and shared purpose, and replacing it with selfishness and beggaring thy neighbor.  This is the much deeper problem: commerce is not a substitute for community. And the new idea of community, i.e. getting rid of all the boring bigoted stuff like heterosexual monogamous marriage and church, is not helping, it’s just throwing ourselves headlong into hedonism and individuality and trusting that if we all do what pleases us now, everything will work out for the best.

I think the solution is we need to look back on the strengths of what we had before, and try to rediscover what about that worked, and how to preserve that. We need to get back to respect for community, not every legal decision is just a matter of individual rights. For example, don’t legalize polygamy, if you’re for that, you’re part of the problem, just considering everything as a civil rights issue and not thinking about the effect of what you do on other people.  Legalizing pot, letting investment banks do prop trading, I could think of lots of other examples, consider the welfare of the nation and not just retreat into atomized individualism.

Sun, 05/11/2014 - 18:44 | 4749081 Quus Ant
Quus Ant's picture

The schlubs that came before weren't privy to some special knowledge.  They only lacked the means to wreak havok on our level.  Tell me your ideal era and I'll rattle off some atrocities. 

Yes, community-  but not a community that thinks it can "legalize" anything.  I am a divine creature.  My rights are not up for debate and are only sanctionable when they infringe on yours.  How do polygamy, homosexual marriage or pot affect you?  Other than your sensibilities, of course.  "Welfare of the Nation"; what does that even mean?

Many look backward.  Many look forward.  Few are here right now.

Sun, 05/11/2014 - 19:08 | 4749130 JLee2027
JLee2027's picture

 How do polygamy, homosexual marriage or pot affect you?  

They are immoral and a reflection of a society on the decline that will tolerate wickedness only goes deeper into the pit. Any honest study of humn history will tell you that.

Sun, 05/11/2014 - 19:38 | 4749184 Seer
Seer's picture

"Any honest study of humn history will tell you that."

And you are the arbitor of what is "honest?"

I'll take this one as being rather comprehensive:

And while you and others might conclude that Glubb supports your position I would caution to note that if you read close enough you'll see it as more a "symptom" than a "cause."

Rats in a cage can do some rather "interesting" things.  Is it the rats' fault or the cage's?

But, seriously, pot?  Like alcohol doesn't promote wickedness? Disclaimer: do not do either; I also have no financial interest in either.

Sun, 05/11/2014 - 20:54 | 4749439 Anusocracy
Anusocracy's picture

So live in a society run the way you wish and respect everyone else's choice in what type of society they want to live in.

Of course most people are control freaks and can't possibly allow others to free of their control.

Sun, 05/11/2014 - 23:00 | 4749731 Quus Ant
Quus Ant's picture

Well I guess that's, like, your opinion man.   History tells me humans lived in polygamy until very recently.  Even those ragtag semitic goat herders were polygamists. 


Mon, 05/12/2014 - 07:29 | 4750216 masterinchancery
masterinchancery's picture

No advanced society has ever engaged in polygamy or serious inbreeding for any length of time.

Sun, 05/11/2014 - 23:33 | 4749783 laomei
laomei's picture

Apart from gay marriage, polygamy and pot have been around since forever, in fact NOT having polygamy and pot are the exceptional aberration here.  As for gay marriage, there have always been gays, there has always been gay sex, recognizing marriages is a new thing, but then again, so is discriminating financially based on marital status and social access rights.

Tue, 05/13/2014 - 22:44 | 4757613 Seeing Red
Seeing Red's picture

Yeah right, ethical behavior and social responsibility aren't possible without going to church and whatnot.  Look, on this over-populated planet, our collective options are going to disappear as resources dwindle (this has been covered before I know).  We need innovation, creativity and flexibility, not platitudes.

Sun, 05/11/2014 - 18:58 | 4749112 Wait What
Wait What's picture

"Out of towners always want to go there"

...until they realize most ppl's rez has to be made a month in advance, and much like the tour of The Rock, pushes more people away than it welcomes. usually right up the street to Cheeseboard, which creates some Apple-store-when-the-1st-iphone-came-out-long-lines.

Berkeley, like the rest of the bay area, is a great place to go once you're established, but is a perfect example of why 18-30 yr olds find it almost impossible to stay out of debt in California. overpriced in every respect you can imagine. that they've developed coping methods like cooperatives and small organic farming is only a reflection of how overpriced everything is, if not the ingenuity of the brainpower surrounding the school.

Sun, 05/11/2014 - 19:08 | 4749129 negative rates
negative rates's picture

And don't steal from anyone, cause they might be able to run faster than you can peddle.

Tue, 05/13/2014 - 20:56 | 4757290 ChickenTrain
ChickenTrain's picture

If you wish to see the future of farming, look into aquaponics.  Low water usage combined with high density production..  it's a no-brainer really.  I'm embarassed for the author of this article.

Sun, 05/11/2014 - 16:14 | 4748702 I am Jobe
I am Jobe's picture

The Amerikan future as we know it is dead/gone/kaput

End of story


Sun, 05/11/2014 - 18:57 | 4749109 NoDebt
NoDebt's picture

No, just unavailable to most people.  Upward mobility is still there, but only to tens of thousands, not tens of millions any more.

We are headed rapidly back down towards the long term mean of most human societies throughout most of human history:  Small number of rich, larger number of poor and just enough middle class to service the rich.  The 20th centrury in the US was the anomaly, not the norm.

Sun, 05/11/2014 - 19:36 | 4749199 Seer
Seer's picture

Accepting this fact does not mean defeat, or that the "bad guys" won.  As you note, it's an historical norm that we must account for; and, I realize that there's the "well, we ought to organize and change that" mentality, but that in itself, no matter how well aligned humans could be, cannot overcome the constraints of a finite planet.

"The 20th centrury in the US was the anomaly, not the norm."

All due to the "energy slaves."

Mon, 05/12/2014 - 00:03 | 4749834 Quus Ant
Quus Ant's picture

We are headed rapidly back down towards the long term mean of most human societies throughout most of human history:  Small number of rich, larger number of poor and just enough middle class to service the rich.

and guillotines.  don't forget guillotines.

Sun, 05/11/2014 - 16:24 | 4748720 all-priced-in
all-priced-in's picture

Until they run out of water -

Sun, 05/11/2014 - 16:30 | 4748732 ZerOhead
ZerOhead's picture

The $1T California Rehydration And Crony Kickback Pipeline... AKA the CRACKPIPE will take care of that.

Plus it can deliver fresh Columbia River salmon in season directly to "Chez Panisse".

Sun, 05/11/2014 - 16:53 | 4748796 I am Jobe
I am Jobe's picture

Not so fast, the plant parts was sold to the Saudi's. I guess Harem needs white girls to fullfill the needs to get the parts back in time.

Sun, 05/11/2014 - 16:28 | 4748731 JuliaS
JuliaS's picture

If the right way of thinking was enough for getting people out of economic problems, 3rd world wouldn't even exist.

Sun, 05/11/2014 - 16:53 | 4748798 I am Jobe
I am Jobe's picture

You mean to tell me Amerika isn't Third World? 

Sun, 05/11/2014 - 17:05 | 4748832 Pure Evil
Pure Evil's picture

America a third world?

We'd be lucky to aspire to such heights.

Sun, 05/11/2014 - 19:41 | 4749220 Seer
Seer's picture

750 million people in India live on $0.50/day or less.  And something like 2/3 of the human population lives on $3/day or less.

Just to put things in perspective...  a LONG ways to fall...

Sun, 05/11/2014 - 22:47 | 4749700 ZerOhead
ZerOhead's picture

50 cents a day is still about 50 cents a day more than our billionaire "job makers" say they can afford to pay.

Sun, 05/11/2014 - 19:10 | 4749142 negative rates
negative rates's picture

Nope, we're tellin ya that you're a long way from heaven though.

Sun, 05/11/2014 - 19:17 | 4749152 Goldilocks
Goldilocks's picture

Gun's N' Roses - Knockin On Heavens Door (5:41)

Sun, 05/11/2014 - 16:30 | 4748737 CHX
CHX's picture

Find a sustainble society or perish - sustainble on all levels - financially, morally, socially, demographically, economically, environmentally, etc etc  Unfortunately, that's impossible, so in the long (though for some longer than others) run... 

Sun, 05/11/2014 - 17:29 | 4748896 slightlyskeptical
slightlyskeptical's picture

Anyone who deems it is impossible is part of the problem. It should be an inspiration for all of to achieve.

Sun, 05/11/2014 - 19:45 | 4749244 Seer
Seer's picture

Given our propensity to grow I'd say that is IS impossible.

LIfe forms, however, tend to use the overrun-and-die-back method for "adjusting."  I figure that we're pretty much cast to do the same thing.  The "rich" will ensure that their genes are passed along, and they'll do it at the expense of your genes...

Sun, 05/11/2014 - 16:35 | 4748745 geoffb
geoffb's picture

Good god man while capital is free, labor will suffer.

Sun, 05/11/2014 - 16:41 | 4748758 Peter Pan
Peter Pan's picture

The real problem is that free capital is available to the wrong people.

By the way I gave you an up vote.

Sun, 05/11/2014 - 16:54 | 4748789 Peter Pan
Peter Pan's picture


Sun, 05/11/2014 - 16:52 | 4748793 Peter Pan
Peter Pan's picture

Who is the ignoramus who down voted you?

Don't they realise that fairly priced capital is the ony means that workers and savers have to get a return on their sweat which is tied up in bank deposits and retirement funds?

Sun, 05/11/2014 - 17:10 | 4748831 geoffb
geoffb's picture

I was under the impression that posts aren't even worth reading unless Krugman downvotes them. I see you got one as well. Well played. ;)


Not only is capital flowing to idiots, in some cases, they don't even have to pay back the principal. I'm not sure how many bikes I will be required to fix in the future to compete with negative interest rates??

Sun, 05/11/2014 - 17:28 | 4748895 Pure Evil
Pure Evil's picture

You won't have many bikes to fix because the building you leased from the government is located in a hellhole neighborhood populated by drug cartels and gangbangers.

A month after you've opened there is a drive by shooting where multiple victims are killed among them little children.

And, after that no one is brave enough to visit your little bike shop for fear of being killed by the local criminal element.

Sun, 05/11/2014 - 19:21 | 4749169 Wait What
Wait What's picture

you're not kidding. west of San Pablo Ave. (which runs the length of the East Bay), is all ghetto. watched a guy drop trou, take a quick deuce on the sidewalk, then get up and walk away like nothing happened as I was riding through there once.

Sun, 05/11/2014 - 20:05 | 4749307 Seer
Seer's picture

City folks have it so tough!  No such constraints out here in the rural hinterlands.

Sun, 05/11/2014 - 16:40 | 4748754 OC Sure
OC Sure's picture




"As with all complex systems, there is no one cause--instead there is an interconnected web of causes..."

Yes, there IS always one cause that begets all that follow.

The reason for the decline of the Middle Class is always caused by the opposing cause of why they inclined in the first place.

The middle class inclines when the value of their wages rises; that is, their purchasing power is increasing and therefore the class is on the incline.

The middle class declines when the value of their wages falls; that is, their purchasing power is decreasing and therefore the class is on the decline.

Therefore, the cause of causes is the counterfeiting done by persons who produce nothing as a means to steal from those who produce anything.

Cut to the quick, man. Tyranny is upon us.

Sun, 05/11/2014 - 16:47 | 4748777 Peter Pan
Peter Pan's picture

The middle class was reliant on a consumerist society giving them business but when they too fell for the consumerist crap by building mansions nd lifestyles that were over the top and allowing mnufacturing to be outsourced, that was the beginning of the end.

Their kids are now lumbered with education debt, no job prospects and declining freedoms.

Sun, 05/11/2014 - 16:54 | 4748803 I am Jobe
I am Jobe's picture

So who does one blame. O yes the world , as they bought the bullshit dream. 

Sun, 05/11/2014 - 17:03 | 4748825 ebworthen
ebworthen's picture

"Therefore, the cause of causes is the counterfeiting done by persons who produce nothing as a means to steal from those who produce anything."

I hope you mean printing money while bailing out banks/corporations/insurers.  Throw in ending bi-metal currency backing to debase the currency and trampling the rule-of-law.

Sun, 05/11/2014 - 18:04 | 4748954 OC Sure
OC Sure's picture

Not precisely. The recipient of the counterfeit is not the cause; the counterfeit is the cause.

If it were not the banks/corps/insurers in trouble and it were someone else demanding the counterfeit for their own bailout then we could simply say "you mean printing money while bailing out %insert omg-I-F'd-up-crybaby-recipient here%.

So to address the recipient is to dillydally over the symptoms and not to attack the cause. We are dealing with a monster that has thousands of tenacles but only one head. The Fed is the head and requires decapitation. Only then will the blood sucking tenacles untangle, wither, and die.

Sun, 05/11/2014 - 19:33 | 4749192 ebworthen
ebworthen's picture

Thanks.  That was my point (money printing, bailouts, QE, no Gold standard, etc.).

End the FED!

Sun, 05/11/2014 - 19:12 | 4749145 negative rates
negative rates's picture

Can you get some gangs to turn in their weapons on that list?

Sun, 05/11/2014 - 20:19 | 4749346 Seer
Seer's picture

The entire notion of "classes" clouds us from seeing things clearly.  The very word causes us to constrain our thinking into compartments, and when one operates in compartments the BIG PICTURE is not visible.

2/3 of the world's population lives on $3/day or less.  Is this the result of tyranny or is it because there's insufficient natural resources in which to "elevate" people?

"Therefore, the cause of causes is the counterfeiting done by persons who produce nothing as a means to steal from those who produce anything."

And tyranny didn't exist prior to counterfeiting? (was there ever a time in which humans didn't devalue money?)

Let's suppose that everyone was "productive," and that there were no "non-productive" people.  Even IF everyone was "productive" it would not be possible for it to hold, not as long as we base everything on perpetual growth.

The BIG PICTURE has to do with available resources.  And since we're on a finite planet we have a bit of a problem with how we can perpetuate ourselves with finite resources.

The "problem" is the System, it does NOT have the solution to itself.

Sun, 05/11/2014 - 16:44 | 4748760 RaceToTheBottom
RaceToTheBottom's picture

Articles like this are off base.  It distracts from the real issue.

Much of the Employment problems are because people are trained or study the wrong stuff.

Technical degrees are hired, period.  STEM degrees get jobs.

Granted boatloads of cheap H1'whatevers are depressing the salaries but an engineering degree still pays more than a basketweaving degree and will always have less unemployment.

The technical world we live in requires more technical people.

The idiots that say we are not smart enough ought to be shot on sight

Sun, 05/11/2014 - 16:45 | 4748768 Quus Ant
Quus Ant's picture

I look forward to the day basketweavers get the last laugh. 

Sun, 05/11/2014 - 16:58 | 4748807 ebworthen
ebworthen's picture

Parasitism is the problem.

Governments and corporations are happy to sell out the citizenry for the cheapest and most profitable path.

Why bring in H1's when you could train or educate someone in your own country?  It's cheaper and more profitable!

Sun, 05/11/2014 - 17:16 | 4748862 Pure Evil
Pure Evil's picture

Having everyone get a STEM degree would only saturate the market driving down the wages of even those type of careers.

Same reason wages at MikeyD's start at the minimum wage. An over supply of labor with no skills and a minimal education. If the supply of unskilled labor were to dry up, not likely with the border between the US and Mexico flooding the US with unskilled labor, the wages of even fast food workers would rise to the point where more people would apply for those positions.

Right now in Florida, there's an oversupply of STEM applicants for each job opening. Wages are low and will stay that way until the demand for STEM applicants exceeds the supply.

But, that won't happen because they continue to bring in people on H1-B visas that are more than willing to take any new STEM field openings no matter what the pay.

Sun, 05/11/2014 - 18:41 | 4749065 Georgia_Boy
Georgia_Boy's picture

When you get down to it, there are more than enough people to fill every kind of job with lots of unemployed left over.  The U.S. does not need, and cannot as a society afford, 300 million full time work-for-pay employees. Count me in among those who think the decline of the labor participation rate is not necessarily a bad thing, it depends on who leaves and why. Not all work should be commoditized and monetized and taxed, a big example of course being people living together in families and raising their own children and not all of the members of the household work outside the house. The government of course doesn't like that because it means less taxes, so I don't much think they'll help with any rediscovery of middle class values.

Sun, 05/11/2014 - 18:52 | 4749097 FredFlintstone
FredFlintstone's picture

STEM isn't a slam dunk anymore. If you didn't have an intership in college you probably will struggle to get a job right now out of school. I hire them and talk to them. My third child just graduated from a Big Ten engineering program with decent grades. 1 offer.

Mon, 05/12/2014 - 18:01 | 4752471 RaceToTheBottom
RaceToTheBottom's picture

Congrates on your son.  1 offer is approximately 100% better than none.  Which is what the person with the basket weaving degree has.  That was my only point.


If I had the choice, I would have been born filthy rich.

Sun, 05/11/2014 - 19:16 | 4749150 negative rates
negative rates's picture

Back to sleep with you.

Sun, 05/11/2014 - 20:26 | 4749366 Seer
Seer's picture

"an engineering degree still pays more than a basketweaving degree and will always have less unemployment."

Let me guess, you've got an engineering degree?

Long-term I wouldn't bet on that engineering degree.  Most of what engineers are employed doing is borderline menial shit: yeah, "I engineer cardboard boxes!" and if there aren't products to go in them that people can afford...  As "economies of scale" start backpedaling there's going to be a shitload of engineers looking around to see whether basketweaving might not hold some promise...

Mon, 05/12/2014 - 18:08 | 4752487 RaceToTheBottom
RaceToTheBottom's picture

Yes, I have an Engineering degree, actually two of them.  BS and MS.  The power of those degrees is not what facts I learned, those were mostly gone after 10 years.

Engineering teaches you applied scientific thought: Problem Analysis Solution thinking.  That plus the ability to go from the grass level to the 50,000 ft level, hopefully makes me useful and employable.


Having said that I went through a stint when the consulting industry through that it could survive using only Indians at 5$/day where I was unemployed or doing my own thing.  Those 2 years were very hard...

Also I live in Seattle where when every 10 years or so Boeing lays off a bunch of engineers and scientists and they hang out pumping gas till Boeing asks them to come back (at a discount).  Talk about a license to rape and pillage...

Sun, 05/11/2014 - 16:53 | 4748765 ebworthen
ebworthen's picture

Let's start a social network called "Why Toil Send Us Money" or WTSUM.

We don't work, we apply for S.S. disability and other entitlements, and demand that the FED send us $10,00 montlhly.

Why not?  They give banks/insurers/corporations free money - and we'd be doing as much work as government bureaucrats.

It is time for a social network that uses peaceful civil disobedience to stop the madness.


Sun, 05/11/2014 - 17:03 | 4748819 Pure Evil
Pure Evil's picture

I'm all in.

But, we need to get an F in their somehow

Like - Why Fucking Toil Send Us Fucking Money......

and let the imported foreigners do all the work, at least until the robots come onboard, den fuk dem fereigners.

Sun, 05/11/2014 - 17:07 | 4748839 ebworthen
ebworthen's picture

"Why Toil, Fucking Send Us Money" or "What the Fuck, Send Us Money", both would be "WTFSUM".  

Good suggestion, the network is started.

Sun, 05/11/2014 - 17:23 | 4748879 Pure Evil
Pure Evil's picture

Ok, now we need to develop a two party system, vote ourselves a president, and create a ponzi scheme to skim membership fees and dues off the unsuspecting WTFSUM's that join our coalition.

Of course, all those that join early will enjoy the benefits of being on top while continuing to screw the rest our fellow coalition members.

I mean it is free money after all, might as well get richer taking advantage of a few of the rubes.

Sun, 05/11/2014 - 20:28 | 4749373 Seer
Seer's picture

It's a WTF world, so...

WTFSUM - What The Fuck, Send Us Money


Sun, 05/11/2014 - 16:46 | 4748766 Steve in Greensboro
Steve in Greensboro's picture

More delusional gibberish from Chuck-You.

The ongoing decline of the America is due 100% to the ongoing, metastatic growth of the U.S. Federal government.

Sun, 05/11/2014 - 16:54 | 4748801 ebworthen
ebworthen's picture

And 100% to the ongoing, metastic growth of the U.S. Crony Corporatocracy.

This is a two-headed hydra Steve.

Sun, 05/11/2014 - 19:19 | 4749163 negative rates
negative rates's picture

Hitch your wagon,

    to a star.

Sun, 05/11/2014 - 20:33 | 4749385 Seer
Seer's picture

Fine, I get it that the govt ain't exactly making things better (slight understatement of course), but let's consider that this is a global shit-storm that we're facing.

The entire MODEL/SYSTEM is faulty.  The cause is not "govts" or even "corporations," let alone "poor folks" (or "rich folks").  The disease is based in the need for perpetual growth, and the govt and Big Corporations are doing no more than to keep pushing this meme as it is the only thing they are all geared toward.  Sure, they could pare down a bit (again, this is a slight understatement), but this will NOT fix the core problem.

Sun, 05/11/2014 - 16:46 | 4748770 TuPhat
TuPhat's picture

Charles is quite confused as usual.  These comments are more informative and accurate than the article.

Sun, 05/11/2014 - 19:19 | 4749160 Goldilocks
Goldilocks's picture


Sun, 05/11/2014 - 16:58 | 4748810 brown_hornet
brown_hornet's picture

I wonder how they keep the tools from walking away from the "community" shop?

Sun, 05/11/2014 - 20:41 | 4749408 Seer
Seer's picture

I didn't bother to read the article, so what I say should not be construed as being in defense of what may have or may not have been written by Smith...

I volunteered at a not-for-profit, community bike shop for several years (I was a board member, and I also wrenched).  While I'd encountered some theft (money- know who did it; improved security and that resolved that) I didn't really see it as being very rampant at all; mostly tools would just break and get used up.  Little different than what I've seen in the for-profit community.

Like anything else, there tends to be a need for folks who are, for a lack of a better word, "gatekeepers."

Sun, 05/11/2014 - 17:34 | 4748913 smoothie
smoothie's picture

So your bicycle store, get this, Glasgow Uni, at the start of term all the new freashers turn up with flashy expensive bikes, mum and dad bought them for their 17 year old off to uni for the "ride" of their life.

OK so they have a little chain and they think Glasgow uni is a nice little place in the west end, it is so lovely there, ah...

See that little chain, well the junkies spotted that, now they are banging about undercover as students during the freashers party month, you know when the kids get to spend all the big loan they got on campus booze and cocaine, it OK because they have a bike you see, all good.

So the junkies have bolt cutters, and they are running all over campus cutting the chains off the bikes and breaking into flats for laptops.

Guess what that shimey new bike just got knocked kiddies. Where did it ultimately end up?

In the bike shop, where it is stripped, resprayed, and everything is sold, the frame and wheels is all that is left, but if they put on a single gear and cheap brakes they can sell it as a custom bike, you know cheap to the same kiddies they knocked it from, its a custom made city bike now with a hardcore lock this time from tesco! You see with only one gear the chain won't come off in traffic! We sell a lot of these, its so cheap too kiddies, we know you spent all your money in the party, we are here to help!

Since it has no !markings because the kiddies didn't think that kind of thing happens,and it has no original parts. Who would know it was the same bike!

That sum up your bike model up there!

Sun, 05/11/2014 - 19:29 | 4749183 Wait What
Wait What's picture

scary because it's true. not just in Glasgow, in America, too. there's a whole black market for bikes and parts that lives off brand-new uni kids' bikes.

Mon, 05/12/2014 - 01:36 | 4749943 Seer
Seer's picture

Have you all lived sheltered lives?

I think that I was 15 or so when I discovered some neighborhood folks running a chop shop for cars.  Many of those doing it were just slightly older than I.  It was, as much as I could tell, however, about getting parts and money to build up their own cars.  Insurance companies pay out big time for auto theft; just consider how much vehicles are going for nowadays, and parts- wow!

Getting back to bike theft...  I recall getting some kid a bike from the bike shop along with a lock.  Had the fucking thing stolen within a day or so, from school I believe.

Sun, 05/11/2014 - 20:50 | 4749429 Seer
Seer's picture

Um... well, that's your anecdotal, and I'm sure that it applies in SOME instances/places, but, in defense of OTHER places, I have experience with a lot of CRAP bicycles, with a community bike shop (not-for-profit) that would NOT touch anything suspicious.  Occassionally we might get what were once thefts, but they came from the local police deparment and they could only be turned around and given away (others we could sell here and there to bring in enough revenue to keep the doors open and to buy parts to keep our programs going), though if memory serves me it wasn't that often.

If someone is registered as a 501(c)(3), like the place I volunteered for was, then they could face a loss of that status if they were caught trafficing in stolen goods, not to mention being completely shutdown by the local authorities.

Most bikes of value have serial numbers.  Ground-off serial numnbers are kind of a red flag...

Sun, 05/11/2014 - 21:31 | 4749540 smoothie
smoothie's picture

No I get you, not everyone is playing this game, its an instance in microcosm, in the town where I originally come from there is an excellent shop like the one you describe, this is just an on the ground observation that o spotted going on, another would be the shifts that the beggers work outside certain places and how they rotate round the town, umdoubtable a network criminal entity, the scenario of the bikes actually another of its operations. Its just interesting when you start to look and watch what is happening around you, when your face isn't planted in an apple!

Sun, 05/11/2014 - 22:28 | 4749664 Seer
Seer's picture

"Its just interesting when you start to look and watch what is happening around you, when your face isn't planted in an apple!"

Awareness of one's enviornment is always good advice.

Sun, 05/11/2014 - 17:40 | 4748926 MedicalQuack
MedicalQuack's picture

First of all we know inequality is in fact "modeled" and you can watch a former Quant that worked for Larry Summers (who now says he's nuts in essence) talk in the video how modeling works...she's writing a book too called Weapons of Math Destruction..I sure like the the title..

We do have a "little" and I say little as this is still kind of new with the government hiring quants to audit bank models...Government Is Finally Hiring Some Data Sleuth Quants - Office of Comptroller of the Currency To Work In Compliance With Bank Models..

The OCC changed effort should be lest they are paying attention to what in the heck a models is and does.

This is somewhat related and you may want to look at it and it has to do with health insurance mergers and acquisitions.  When one group is merging with another, and this is in the OC in California, the report shows doctors and patients listed as mere "inventory"..pretty disgusting in my opinion.   packed a ton of related links in there too as the battle between hospitals and insurers heats up a bit.  So there's your great source of innovation...improving inventory..yuk!  This is what's wrong all over and I call it "The Grays" to where ethics have sunk to the lowest level I have ever seen and sometimes non ethical technologies get mistaken for innovation..

Sun, 05/11/2014 - 19:26 | 4748972 smoothie
smoothie's picture

I can draw some parallels and interesting factoids relater to those points.

In the UK we have digitised patient records, supposedly to sell the "big" data to insurers etc, there are some conspiracy theories about that.

And I'm with you on the click logging, I try to mask things myself now, duckduck, 

the NHS is the biggest drugs purchaser by far, and with this merger with astrzenica and phiser, astra has a lung cancer advanced treatment apparently, ready (almost) along with a whole host of cancer drugs about to be published.

Astra and phiser is going to go through from what I can tell, right before the NHS gets a little more privatised. Because it already is in some places, when that happens I figure treatment costs and drugs prices will increase. Plus they will be as you note, pulling databases together.

Another thing I note was your security breach point, and its somewhat unrelated, however, so far encryption falls are being kept secret, but the hack s know most of them, the biggest risk I see in bitcoin, is actually Just that, what if somome BIG has got a vulnerability in that shit that no one can see yet (heartbleed was open source on its fringes BTW), then some bloke comes along one day with a flash drive and a ticket to HK and fires it out to the world, worst yet, consider a war where someone might be saving it for a Rainey day, to fuck your system over before a major attack! I note some BIG withdrawals from that shit. I'm sure you guys can see that scenario tho!

It was the snow that unblinded me tho, we have a new rector you know.

Sun, 05/11/2014 - 21:16 | 4749500 Seer
Seer's picture

Not to kill the sense of the wrongness of it all, but this is all but picking the bones from the dead and dying.

If we all had enough "meat" we wouldn't be resorting to these things.

Clearly this is all borderline criminal, but behind this I see it more as desperation, and this prompts me to dig deeper, not because I am wanting to know what ails them, but to understand why they are acting.  It's TOO easy to just stamp them as sick deviants.  I think that it starts when things are tight and there is the need for "creative 'fresh' solutions," you know, the kind that mange to just fit inside the existing laws.  The folks who operate here, like Summers, were, like the Trojan Horse, allowed to pass the gates.  If there had been no war/struggles then the likes of the Horse and Summers probably wouldn't see gates swinging open.  Of course, I could apply many other names to the long-list of gate-passers...

We have based ourselves on this notion that we can have infinite growth.  We bought into this notion.  It's the culture that we've engrained into ourselves, our very being.  We cannot, therefore, accept any discussion that challenges this.  As a result we accept more and more "snake oil" salesmen to draw our attention, either in "hope" or in attack.  It's a distraction from the real underlying forces.

The System is losing its margins.  In order to keep things running more and more bone picking.  Ultimately, however, it all will stop: good news for those who detest the vultures; bad news for those who feel compassion.

Sun, 05/11/2014 - 21:34 | 4749551 smoothie
smoothie's picture

I like your take on what I just said, It has made me think morally about what I just said, I'm not going to go ahead with that, buy.

Sun, 05/11/2014 - 17:58 | 4748961 smoothie
smoothie's picture

Its an example of one place.! Where the money moves down.! Oh but only if it wasn't your bike that was knicked.! 

Sun, 05/11/2014 - 18:43 | 4749079 q99x2
q99x2's picture

Everyone knows Loyd Blankfein is the cause. He admitted it when he said he was doing God's work.

Sun, 05/11/2014 - 21:19 | 4749509 Seer
Seer's picture

Uh oh... that's got some "higher up" ramifications!

Sun, 05/11/2014 - 19:09 | 4749137 Goldilocks
Goldilocks's picture

Madonna - Material Girl [Official Music Video] (4:03)

Sun, 05/11/2014 - 21:21 | 4749513 Seer
Seer's picture

"Go shopping more!"  Fixes everything!


Sun, 05/11/2014 - 20:23 | 4749354 Cloud9.5
Cloud9.5's picture


The Greeks invented the first steam engine.  We were not ready for it so it took a couple of thousand years for the idea the catch on in the west.  Technology while amazing is not the panacea many think.   My cell phone is a useless paper weight when the battery dies.  The electricity that charges that battery is generated in a nuclear power plant that depends on a myriad of systems and resources just to keep it running.  A cyber-attack, earth quake, tsunami,  or EMP pulse and the power goes out and I am stuck with a dead phone and radioactive tomatoes. 


The fact that all this stuff still works is to no small extent dependent on luck.  Somebody could trip over the kill switch on any given afternoon.


Energy is bleeding out of the system.  Oil fields are declining at a rate of four to six percent.  If you doubt it, research the production rates of the Mexican oil fields or the North Sea.  All mature fields exhibit the same curve of production.  The Cassandras do the math and the Cornucopians trust in the magic of technology.  Hope as much as you want but gas is now almost four dollars a gallon.


Cities and states, except for those that are oil producing, are watching their revenues decline.   Small business is shuttering the windows and property values are declining in all but the bubble markets.  The only growth industry is government and government dependency.  The only way the federal government can keep the doors open is by hiring a bank to counterfeit the currency which it then borrows to offset revenue shortfalls.


For the last three decades we have been in resource wars.  We invade every country that might have a teaspoon of oil or natural gas.  We were going to invade Syria to save the children a Democratic mime just like we invaded Iraq over weapons of mass destruction, a Republican mime.  Now it seems we are concerned over some kidnapped girls in Africa.  My bet is that there is oil under their little feet.



Here is the deal:  the whole system, economic and political is based on exponential growth.  The only problem, we are in a contraction.   This contraction is not based on the business cycle.  It is based on resource decline.  Nothing can reverse that fact.  Our first leg down will take us to the 19th century as far as population and economic activity is concerned.  Once the cascade begins, it may even drop us back into the 18th century.


If you can’t feel the floor falling out from under you, you have not been paying attention.



Sun, 05/11/2014 - 22:36 | 4749685 Seer
Seer's picture


I never forget the story of the Easter Islanders.  Right up to the bitter end they were slaving away at continuing the "same-ol-same-ol" of chiseling up and dragging down statues.  I believe that it's stated/documented that they started waring against each other (groups).

We're burning energy to get energy so that we can...  We're a bit more sophisticated, but we nonetheless suffer from the same blindness.  Evolution of the human ego?

Sun, 05/11/2014 - 23:40 | 4749798 smoothie
smoothie's picture

I know, I saw that they must have "known" it was the last tree.!!!!

Mon, 05/12/2014 - 00:00 | 4749829 kurt
kurt's picture

You may recall I have said the new economy is growing in the festering carcass of the old.

Mon, 05/12/2014 - 02:44 | 4750020 Debugas
Debugas's picture

technological development is not a problem but not a soluution either because

the essence of the problem is social in its roots - fair distribution of the added value


technology simply expands the total carrying capacity of our planet - how large the total population of Earth can be sustained

regulating the actual amount of people living on our planet is more a social and political issue rather than technological

Mon, 05/12/2014 - 09:23 | 4750452 esum
esum's picture

example 1 example 2  .... are you kidding

Tue, 05/13/2014 - 20:57 | 4757284 ChickenTrain
ChickenTrain's picture


Do NOT follow this link or you will be banned from the site!