The brittleness which Mr. Stross correctly points to in Just In Time systems is due to a paradox in the attempts to mathematize Occam's razor. I'll spare you 23,000 words I've written this past week on the matter, but cut to the chase. Given a competing set of analytical models of, say, a commodities market such as Oil, the one which gives the best fit to past data is generally NOT the one that gives the best prediction of future data. There is a tradeoff between prediction and retrodiction. The more comfortable the policy-making apparatus becomes with the status quo, the more they risk collapsing when conditions do not meet expectations. Heteroskedacity is the technical name given the the situation where we are happy with our parameters that define a random system (such as a market) and then these parameters suddenly change. This is far more general than bubbles and how they burst. As we approach the singularity, all models up to a given degree of complexity fail. That degree of complexity heads towards infinity. I've been discussing this for some time with Vernor Vinge; David Bilek is right to cite him. Readers don't need to do the math, but they can trust that Vinge et al have gotten it right, ever since Ulam named and predicted the singularity. If it was not oil, it would be something else; remember the monetary basis in Blish's Cities in Flight?

Wasn't the idea of advanced, complex civilizations being brought down because their hyper-efficiency was very brittle part of the background to _A Deepness in the Sky_? It's been a number of years, but IIRC that was one of the problems Pham Nuwen thought the focused could be used to prevent.

I need to go and read some more on the collapse of complex civilizations
You've read, I guess, Jared Diamond's excellent books Guns, Germs and Steel and Collapse: How Societies Choose to Fail or Succeed ...

Even in industries where the primary producers do have to maintain stocks -- farming, for instance, where the harvest might run for 2 or 3 weeka, and grain might be stored on farm for most of the year -- the rest of the chain of production and distribution is just as brittle. And, because the producers aren't really paid enough to cover the storage costs, and EU policy is encouraging earlier sale and delivery, there's a lot of grain consumption depending on seasonal imports.

So in summer the European stock of grain may be practically nonexistent.

And this is an industry where year on year global supply variations, and variations in harvest dates, are around the same size as the "carry-over", the world's reserve.

I've known a 4-week variation in harvest date between consecutive years. At least that's partly hidden by variations between countries, but it pusts the grain mountains of legend in some perspective.

But, without oil, even if fertiliser and pesticides were not affected, aropund half the farmland would have to be used to produce the farm's fuel. If anyone wants to check on this, look in uk.business.agriculture, good for farming, history, and quantum mechanics.

(You thought I was joking?)

Thomas -- on current form there won't be a UK edition of "The Family Trade". The British fantasy market is in heavy recession (I've heard of established, well-known writers looking for day jobs); moreover British publishers invariably prefer to buy British authors so they can grab world rights and re-sell the book in the USA. I'm effectively a first-time American author, for market purposes in the UK, so my chances of selling the books over here are zilch (until the market recovers in a few years -- British publishing runs on a five year stop/go cycle, has done for decades).

Luckily I got my SF novels into print before the industry went into recession, and Orbit are sufficiently gung-ho about them that they've bought the next couple as well (with an increased advance! In a recession!). So the fantasy series -- and hopefully the Laundry books -- might appear in the UK when the climate improves, but not for at least a couple of years.

(Which is ironic, because the Laundry books are far and away my most "British" work.)

European TFR stats are wildly misleading because european women have been having their kids later than their mothers did, which looks a lot *like* a fertility drop but really isn't - The generation of french women born in 1960 ended up having an average of 2.25 children each, which is well above replacement. In fact it is more children than american women have. France is bit of an outlier, but TFR stats understate european fertility across the board.

Returning to the dollar, I just did a good chunck of my holiday shopping on the US version of amazon, because the total cost, even with the ridiculus shipping charge, (4.99 dollar/book. Eeck!) was cheaper than shopping at the UK version. In one case the US hardcover was cheaper than the UK paperback even. Also. I didn't have enough patience to wait for the UK edition of "the family trade". Sorry about that.

You're comparing apples to oranges on the immigration issue. Those 40% of French people with non-French grandparents is, save for the Muslim immigrants, mostly stuff like having a grandparent from Belgium or England or the Netherlands.

Sure, they don't share exactly the same culture, but it's hardly comparable in terms of culture clash to the waves of Latin American, Hmong, African, Japanese, Indian, etc etc etc immigrants that the USA assimilates all the time. Really... I've been all over Europe, and the differences between a Parisian and a guy from Florence pale in comparison between somebody from New York and somebody from Jakarta or Lima or Port-aux-Prince. Immigration in most of Europe is, historically, simply not comparable to an immigrant nation like the USA. That's not some sort of moral judgment, it's just being realistic in terms of experience with immigration.

And the reason you can look at the fertility rates as a trend (not a running figure) is because in most of Europe they've been constant for two full *consecutive* cohorts. Roughly 35-40 years. It's possible, I guess, that women will suddenly decide all over Europe that they want lots of kids, but it didn't happen with their mothers nor with their grandmothers. You can't wave away that trend by saying that current TFR isn't necessarily a predictor of future TFR. It isn't, but the *trend* is.

You can generalize about a place as big as Europe in this instance when there isn't a single European country save Muslim Albania (tiny) with a TFR at replacement or higher. That's not generalizing, it's the whole continent! It's not just Italy with a 1.2 TFR, Spain, Russia, and a couple of other places are that low. Lots of other nations (including the big ones like Germany and the U.K.) are in the 1.5-1.6 range, still significantly under replacement.

I agree that if you sampled Iowa and Kansas you might get an inaccurate picture, but if you sampled ALL FIFTY states you sure wouldn't. I'm not generalizing, I've seen the numbers for every nation in Europe, and like I said, except for Albania they're all negative.

I don't think Europe will go extinct, but (to bring us back to where the thread started) I think most of Europe's economies are in no better and quite possibly a lot worse shape than the USA in the medium term.

The difference in my view, Charlie, is that the United States has a long history of being a nation of immigrants. It's tre that much of the growth is due to Hispanic immigrants, but *that's nothing new* for the USA. Except for some throwbacks we like it that way. Most of Europe has no experience with that sort of mass assimilation.

This is just not true.

In France, something like 40% of the population have non-French people among their grandparents. France has been explicitly assimilating immigrants for centuries: what's interesting is that the assimilationist policies weren't applied in the 1960's/70's and subsequently to the North African immigrant population. In the UK, a rather more insular country, you've got people like me (only the second generation of my family to be born here -- yes, two of my grandparents were not born in the UK).

And I don't give much credit to the fertility rate figures that are being bandied around. You can't assess fertility rates as a running figure, you can only assess the fertility rate for a cohort of females once they hit menopause. A low fertility rate at a given time might mean that women aren't having children ... or it might mean that the age at which they start families is simply rising. I'm seeing a number of first-time mothers in their late thirties/early forties around here, something that would have contributed to low observable fertility rates a couple of years ago and have been socially inexplicable a decade or more ago.

Finally, you can't generalize about a place as big as the EU. The figure of 1.2 children/woman is, I think, specific to Italy, and the local conditions differ radically from those elsewhere. If you sampled Iowa or Kansas, you might well draw the conclusion that the US population was shrinking -- but you'd be wrong, and for the same reason that looking at Italy and saying "the sky is falling! Europe will go extinct!" is wrong.

The difference in my view, Charlie, is that the United States has a long history of being a nation of immigrants. It's tre that much of the growth is due to Hispanic immigrants, but *that's nothing new* for the USA. Except for some throwbacks we like it that way. Most of Europe has no experience with that sort of mass assimilation.

I should also point out that the fertility rate for non-Hispanics in the USA is around 1.9, which is only very slightly below replacement. That's nothing like the numbers around 1.2 we're seeing in Japan and parts of Europe. Hispanic immigrants aren't replacing non-Hispanics, they're simply adding to the cultural mix.

I agree the demographic problem will solve itself in due course, which is why I specified "medium-term". It hardly matters to an investor if the demographics problem solves itself in 60 or 70 years if all of their money goes POOF in 25 because European economies collapse under the strain of supporting populations where 2/3 of the country is elderly and probably a third is sick.

Interestingly, I mentioned the Japanese robotics boom recently in RASFF in just this context. Japan will not consider mass immigration for cultural reasons. It just won't happen. So it's a race between their aging population and their advances in robotic technology.

I don't think they're quite going to make it, and things will probably get kinda ugly.

I think the demographic problem will solve itself in due course.

Remember, a growing population is also an economic drag; children cost a hell of a lot of money to raise and educate to the standard required by a developed nation for its work force. (Think £120,000 and 22 years, for a basic graduate-level education and upbringing.) Those who see the USA's growing population as a panacaea for the social security system probably aren't paying enough attention to the implications of the No Child Left Behind nonsense (education privatization? What the hell do they think they're doing, trying to third-worldize the USA academically?!?). Moreover, when you look at demographic breakdowns of the US population, how to put it ... most of the growth is in the hispanic and other immigrant sectors, not the third-generation or older population. There's alarmism among the American right about the idea of Moslems in Europe breeding like flies and taking over the EU -- racist overtones entirely intentional, as that's basically what it boils down to -- which just goes to prove the point of the old proverb about motes and beams in eyes.

The answer to social security being an issue is to raise the retirement age in step with increases in life expectancy. And if you're really worried about population decline, to look into the Japanese robotics boom targeted at the same problem.

Edited by author 11-26-2004 09:32 PM
I'll continue to be worried about Europe's economies in the medium term until and unless I see some actual attempts to come to grips with what the rapidly shifting (for the worse) demographics in most of the continent. Right now it looks to me like Europe has its head in the sand on that score in exactly the same way that the USA is ignoring the debt problem.


I've no confidence in either economy, medium term.

Well, if you guys aren't worried about Europe then I'm not going to argue on that point. A lot can happen on the downslope, and it wouldn't be the first time the bears were wrong anyway.

Since Ben mentions India, here's a twist:
"The BBC reports that quite a few young European tourists stick around in India to work for eSolutions companies who contract outsourced work from European companies. The salaries are mediocre, but you get free housing, great food, snacks ŕ volonté and a free taxi ride to work each morning."
http://it.slashdot.org/it/04/11/25/1418248...=98&tid=187&tid=218

And yes, today is Thanksgiving. And yes, tomorrow is the biggest shopping day of the year. That's when millions of Americans buy useless toys with money we borrowed from you nice folks overseas, and that we fully intend to pay back with devalued money.

Life is interesting. :)

Actually I'm not all that worried about europe. One of the upsides to the way the european economy is organised is that it is pretty shock-resistant. Finland recovered right damm quick from both the collapse of the sovjet union and the devaluation in Russia. despite a huge amount of trade going that way - And really, as things stand we're shipping stuff to the US and being paid in IOU's backed by the Bank of China. Which is just plain silly. Re-adjusting the terms of trade so that things are more equitable is supposed to be a bad thing for europe? Frankly, I don't see it.
The Euro will go up, the ECB will probably drop interest rates even further, which, well, wouldn't suck, and more capital will be invested here which really won't suck.

Edited by author 11-25-2004 10:38 AM
Two things I would add.

1) I think some parts of Asia will be fine. China will keep pegged to the dollar so the idea that devaluation will increase exports will at best be a small gain. The idea of outsourcing to India will probably die a death tho.

2) The solution used in 87 was to borrow and allow inflation to ramp up. The first option is not really possible and the second could well be self fulfilling thanks to the rising cost of raw materials a deflating dollar will create.

The rest of the Far East, Europe and to a less extent Europe is going to have an interesting time. Especially as I'm starting to thank that while everyone is treating the economy as a game of chess, China seems to be playing Go.

Finally, what are you doing here. Isn't it Thanksgiving, a time from family, food and limbering up for the sales tomorrow?

Edited by author 11-25-2004 10:19 AM
Ben -- That's certainly something to worry about, and it fits in with Charlie's concerns. It's really something for the world to worry about. We in the U.S. are addicted to debt, but everybody else is addicted to U.S. markets. If we fall, Asia's going to fall hard, and probably Europe as well.

And by "fall", I don't mean as in headed into a depression. 1929 didn't need to lead to the Great Depression. It was made worse by bad Fed policy and stupid politicians. People barely remember 1987.

Randy,

My feeling is that America is not Britain circa 1901 but Britain circa 1973 (prior to the oil crisis). Until there is a global equivalent to America circa 1901 I don't really think that America has problems along those lines. Now America circa 1928 seems to be a popular comment both Goldman Sachs and Morgan Stanley seem very bearish http://business.bostonherald.com/businessN...d=55356&format=text Steve for the Morgan Stanley bit.

As for you Charlie I usually buy whichever edition arrives first in stock. You could have ready cash (possible even Scottish notes) if you sell me proof copies.