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Archive for the month “July, 2014”

Social Dynamics of Empire

America used to be the achievement society, but increasingly since World War II it has become the empire society. Japan and Germany went the other way, empire societies in the thirties, they have become achievement societies today. Japanese capital is very much behind the rise of China and the rest of the Far East. Britain has been an empire society for more than a century now, less so after World War II and less so again after the Cold War ended. Culture, attitudes, and the work force change dramatically when going from one type of society to the other.

In the high military spending and slow growth power society the vectors are all sideways, the fixed economic pie means that if one gains, it is at the expense of another. As the rich get richer, more and more are left behind, unemployed, underemployed, or homeless. What you know becomes less important than who you know, as social mobility is limited. That makes it a win-lose society. Competition is very intense. Market share is crucial, so lawyers, accountants, and salespersons emphasize the small differences. Power control and domination are the goals.

In the low military spending high growth achievement society, the pie is constantly expanding so fast that while some get more and some get less, hardly anyone is left out completely, employment is high and everyone is needed to help get to the higher new frontiers created by the engineers and scientists. Quality circles let the little guy contribute to progress and share in the progress as well. Creating whole new products that grow sales fast means less need to sweat the details with the lawyers, accountants, and salespersons nit picking along the way. Why worry about lawsuits when you can leap ahead of the competition with a great new product? Innovation and excellence are the goals.

The growth society is forward thinking and creative. The population is satisfied and successful and feels valued and secure. Crime and corruption are low, unnecessary as pathways are open to all. Manufacturing is king. No need to anesthetize the pain of a win/lose, “dog eat dog” society with drugs, or leapfrog the inequality gap with lotteries. Savings accumulate easily.
The empire society is fearful, corrupt and crime ridden, with the populace seeking ways out of the box they are in with drug use and lotteries. Manufacturing is shrinking and the service sector is expanding, as technology and infrastructure falls behind leaving the “who you know” personal skills of the service and financial sectors dominant as control is the imperative. Position and class are more important than what you know. Inequality grows as the haves leave the have not’s behind and feeling exploited. Debt grows to try to cover the gap between expectations and the new frustrating reality.

The militarization of the empire society makes pro football popular with its imitation of the glory of World War II. Throw the bomb, in the trenches, blitz the line. Only 10% of the Roman gladiators died, but NFL football players routinely die in their fifties with 20% shorter lifetimes. America leads the industrialized world with prisoners, homicides, mental illness, teenage births, and obesity. Together with the lack of social mobility, these six factors favor the military spending defined empire with a correlation of .82 over the Spirit Level finding of inequality as the prime cause correlating an average of just .69 for the same six factors. America’s militarization level is three times that of Western Europe.
Baseball is the sport of choice for the much more successful society of America in the low military spending first half of the twentieth century as America rose to be the number one economy in the world. After the Second World War America and Japan switched roles, as a new low military Japan emerged adopting the “achievement without violence” sport of baseball. Home is the objective of baseball, played on a diamond, with a ball and a stick, sounds pretty domestic to me, not the violent sport of American football with its warlike overtones. Japan and Western Europe have much healthier societies with longer life spans than Americans, as measured by the six factors mentioned in the preceding paragraph.

America is only 47th in freedom of the press as its national security state routinely distorts the news. Its overseas ranking during the Iraq War is even worse. The average ranking of five of the G7 countries is 23, with only Berlusconi’s Italy worse than the US as the government WAS the media in that case. Land of the free, I guess, as long as you don’t question the CIA or the national security state too much. Well, maybe, home of the brave at least. Thanks to our stagnant and feudalistic economic structure, Americans work the longest hours and have half the vacation time of Europe and Japan. The 99% work harder to get deeper in debt, feeding the quadrupled relative income of the richest 1% in our society, has been the story of the last thirty years.

The middle ages between the Roman Empire and the Renaissance were a period of rampant inequality and militarism, where the church was favored over science. Remember lords and serfs, castles and motes, knights in shining armor, and dangerous travel? Come to think of it, sounds a lot like large portions of America today. And crime is higher where the military is higher in America today.

For more information and statistics and semiannual update:

Dr. Peace, Dr. Bob Reuschlein,
best contact
to leave message 608-230-6640
for more info
(Peace Economics 1986 available for $10 ebook)

Evaporation Changes the World

Evaporation reduces warming where-ever there is water, and these temperature differentials change seasons, economics, and through a long chain of factors, even the major war cycle.

We live on the water planet. The surface of our planet is 71% ocean covered. Our bodies are 69% water. Plants are 91% water. And the main use of solar radiation striking the surface of our Earth is 85% to evaporate water. That depends on where the sunlight comes down. The evaporation rate is 90% over ocean and 73% over land. But the land of the continents is full of water, lakes, streams, rivers, and marshes. So over solid land it is about 56% and much lower over desert where there is virtually no water to evaporate. So oceans heat up initially only 10% while land heats up 27%, land has three times the initial heating for ocean. But water retains its heat better than land, so we have weather to bring things back into balance. Night helps too as winds shift the energy and temperature around. So land is the main driver of the heating system of this planet and the biggest land mass, the Eurasian North African one, dominates the planetary changes. North America is a relative backwater by comparison as the ocean currents run North alongside the supercontinent warming while the return cycle brings cooling to the American shores. And the small amounts of land in the Southern Hemisphere are definitely overwhelmed by the ocean. South Africa, South America, Australia and Antarctica are each much smaller than even North America, which at least shares a Northern Hemisphere and wind belts with the super continent. So it is no wonder and no surprise then that the Northern Hemisphere has a seasonal range three times that of the Southern Hemisphere. Further, 20% of the earth’s surface is land North of the equator, and 9% is land South of the equator, and excluding the frozen over poles, that reduces to 6% is land South of the equator. These facts also suggest a 3 to 1 seasonality difference between the two hemispheres.  And all this because solar radiation loves to evaporate water.
For more detail:

OSHA lists about three dozen occupations that are heat sensitive. It’s not just the obvious ones of farming and construction, think of all the maintenance, repair, utilities, and delivery people who have to contend with the outdoors. And we all commute and complain about weather and heating and cooling systems all the time. So the first industrial engineer, Frederick Taylor, found that railroad production productivity dropped the higher it was above the ideal temperature of 64 degrees Fahrenheit. And modern measures in the dry cleaning industry where hot presses are kept running all day long show that above a room temperature of 72 degrees Fahrenheit productivity drops 4% at 74 degrees, 18% at 85 degrees and 37% at 95 degrees Fahrenheit. Heat slows us down. Cooling speeds us up. Maybe I’m a school-ish bookworm, but I’ve always felt personally exhilarated by the change from August to September, as too hot becomes just right in my opinion. So it is not then too surprising to find that, among the populated areas of the planet, the hotter ones have the poorer economies and the cooler ones have the stronger economies. The temperate zone economies have long dominated the tropical economies. And the Northern and cooler parts of Europe and the United States have long had stronger economies than the Southern parts of each continent. Scandinavia Germany and Switzerland have the highest per capita incomes in Europe, while the Northeast is the richest region in the United States. The two coldest of the 48 United States, North Dakota and Minnesota, had the most millionaires per capita in the eighties. Then in 15 of 18 five year periods, when the summer was cooler the economy was stronger and when the summer was hotter the economy was weaker. And the biggest shift was the late twenties to the early thirties, with the sharpest temperature increase and the biggest economic growth rate drop, emphasizing the point with the Great Depression and the dust bowl. With out a doubt, temperature change has a big role to play in the economy.
For more on this section:

As Klyashtorin shows in his 1400 year study of Greenland ice cores, the 55 year cycle is among the three strongest and roughly equal results of a frequency testing procedure. My own much more comprehensive set of weather, wealth, and war cycle data over the last century (or two) show that the cycle is clearly 54 years in modern times. It may be longer in earlier times, because the Roman Empire war cycle is about 18 years off of the modern 54 year cycle, suggesting that the cycle in the 2000 year interim may have been closer to 55 years.
The solar start of the cycle is posited by E. B. Browning of UW Madison and I tend to agree.

The linkages from planetary weather cycle to economic cycle to war cycle are covered in my power point presentation below and this video:
Power point, 18 slides: 18ppt.3p._2013

Dr. Peace, Dr. Bob Reuschlein,
best contact
to leave message 608-230-6640
for more info (Peace Economics 1986 available for $10 ebook)

Proof of Peace Economics

The proof of Peace Economics rests not just in correlations with productivity and capital investment over -.99. It further goes on to create accurate long term models in America and Germany and the World Economy with similarly high correlations. Then it was further tested roughly by decade over the twentieth century to see if it applies generally to the major countries, and in subsequent time periods after the initial 1986 models were built, and in all cases the concept continues to apply well. It also applies to explain regional economic growth 1981-1985 and in regional unemployment changes 1985-1991 with correlations of 0.97. Then there is the World War II correlation of -.97 from 1941-1948 between military burden and the economy. There are just too many high correlations in highly varied tests to be just chance or autocorrelation or some other excuse for doubt.

When Ruth Leger Sivard published a nineteen year study of the seven leading capitalist economies plus Sweden and Denmark, she was satisfied to present it as a bar chart in her new reference work World Military and Social Expenditures when she went private after leaving the public sector under the Reagan administration in 1981. The editor of the Journal of Peace Research in Oslo connected to the Nobel Peace Prize published an article that took that data and came up with a correlation of -.81 between military spending presented as a percentage of each nation’s economy and the rate of growth of manufacturing productivity in that same nation. I started by decoding the bar chart into numbers and ran the first correlation at -.81. But I also graphed the bar chart results with military spending on the x axis and manufacturing productivity on the y axis. It was obvious from the graph that Canada was an outlier. Dropping Canada, the correlation improves to -.98. I noticed that Britain and France were somewhat off the straight trade-off line where the two statistics add up to 9 for each nation approximately. So I tried using weighted averages to compute an English America and Western Europe data point. Amazingly, this three point continental correlation (with Japan for East Asia) was now a stunning -.997, a perfect one when rounded to two decimal places. This stable Western World economy operating under the Bretton Woods trade regime showed that all these nations were so similar that the only long term difference was the military. The first conclusion was that resources used in the military were just like other manufacturing resources but without a product useful in the civilian economy. Hence military spending lowered the economic growth curve by diverted resources from the heart of the economy to a political purpose outside of any benefit contributed to the economy. Although military spending pumps lots of money into the economy and supports many communities, no one is fed, clothed, housed, or transported by military operations. The tail is there but not the head. The inputs are there but not the outputs. Those who work in the military “factory” benefit, but they produce nothing tangible for the benefit of the rest of society, just all the abstract platitudes about defending the society which does not boost the economy. That’s what the math says, that’s not just my own platitude.

In Ruth Sivard’s second issue she published a bar chart showing the inverse relationship between military spending and capital investment over a twenty year period with the same countries. My work with these numbers shows that capital investment plus military spending equals a common total of about 20.5% of GDP for these five countries: United States, Germany, France, Britain, and Sweden. These are the four largest NATO countries and the largest Scandinavian country. Japan over-performs on this test (25% of GDP) and the secondary economies of their respective continents, Canada and Italy underperform (17% of GDP). Others have found this military capital trade-off in countries as diverse as Australia and Finland. The five country correlation is -.993. This would also explain the first productivity finding, that military spending is essentially lost capital investment.

The common period cross cultural comparisons of Sivard are a good first step, but will the concept perform for a slightly more complex model of the United States from 1920 to 1983, a longitudinal model in one country? The answer was a loud yes, first beginning with my work in progress in December 1985 of the first three decades after WWII. Military spending alone was where I started all investigations, then adjusted as necessary to add other factors. The first factor added was the deficit. The huge amounts of military spending were almost completely offset by deficits for America during the war. Although this alone seemed to make the deficit a positive able to offset the military negative, there were other confirming cases such as after WWI and again after the 1936, 1978 and 1990 tax increases and the massive tax cuts under Reagan. The second factor was the 54 year cycle. Various multiyear averagings were used on the economic growth data to locate the economic tops and bottoms. Fortunately, majorities of these moving averages would usually agree on one year as the top or bottom. By this method, 1898 and 1952 are tops and 1928 and 1982 are bottoms. Then the literature suggested competing evidence for military spending leading to economic growth or slowing economic growth. The modeling of adding back the missing military to the actual economic growth showed clear camel’s hump bulges after WWII for both America and Germany, high in the fifties, lower in the sixties and seventies. This was the Kondratiev Wave, and it verified that military spending reduced economic growth. A friend gave me a book in 1981 before I knew about Sivard (and when I still believed in military Keynesianism) that specified the Kondratiev Wave. It was a 24 year up cycle and a 30 year down cycle. Testing the economic growth data, I came up with an amplitude of plus 3% to minus 3% of the underlying economic growth rate. Because I’m an engineer, I knew that a sine wave was the answer to a differential equation, so I used a sine wave with the just mentioned parameters to begin the modeling. I did not have to alter any of the parameters after that. I compared the actual manufacturing productivity each year with the model predicted manufacturing productivity. There were significant differences each year. But then I wondered if these differences would smooth out over time, so I accumulated the differences continuously over time. Lo and behold, most astonishingly, the differences would completely cancel out over time every eight, nine, or ten years. These cycles are called Juglar cycles. The common sense model was complete. Measuring the Juglar cycles, the correlation was once again .999. It could be slightly lower if you allowed for degrees of freedom, but that does not make sense since the parameters were each independently derived.

All the long term data indicate a physics-like level of proof for longer periods of time and larger economic areas. So when the regional results came in at correlation .97 for the Reagan buildup or the end of Cold War builddown of the military, that slightly lower result was consistent, as the units were only part of a nation, actually 16 or 17 mini-regions, because cities are the economic hubs, not states. For example, WI IL IN is greater Chicago, and CT NY NJ is greater New York. Then the year by year results actually showed a year by year direct effect of military budget changes. Two or three year trends were more accurate than single year effects. The only area where military spending appears to stimulate an economy and lower military spending lowers the economy is the war situation. But this is an illusion, because the adrenaline flows in the beginning of wars and ebbs after. The war boom postwar bust is the exception that proves the rule. Actually military spending not covered for by deficits will bring an economy down quickly; see my detailed analysis of WWII. The war bonding kept pace with the military in 1942 and 1943 as the economic growth matched New Deal levels, then failed to keep up with the military spending cutting the growth rate in half in 1944, doubled the gap between military and deficit in 1945 leading to negative growth that year. The longer the war runs, the deeper the postwar recession for just these types of reasons. The Kennedy tax cuts actually were responsible for only one third of the economic change from the slow growth fifties to the high growth sixties. The military cuts were the other two thirds of the economic boost. Then the nineties end of the Cold War initially created a post war slump that later doubled the economic growth rate under Clinton due to lower military spending. Nobel Laureate and Clinton economist Stiglitz says as much in a British newspaper editorial.

The accuracy of my economic models make it extremely implausible that anything more accurate could show up and compete with those models. And I did not detail here all the many year by year verifications of the basics in the model. There are no major events of the economy of 20th century America that do not conform to the models I’ve developed to explain it all. The economic model makes other explanations look exceedingly pale by comparison, as twenty year 99% accuracy after twenty year 99% accuracy creates an elegant 99% accurate 64 year simple model of manufacturing productivity, the essence of economic growth. This model will be the new physics-like backbone to the social sciences, as precision empire modeling and cycle theory replace the sloppiness in existing macroeconomics and climate change theories.
As published in the original Peace Economics book, still ahead of its time in 2014:
Here are all the numbers used in the US model from 1920 to 1983 and the detailed write-up:

Dr. Peace, Dr. Bob Reuschlein,
best contact
to leave message 608-230-6640
for more info (Peace Economics 1986 available for $10 ebook)

Why Peace Economics Matters

Today whole conferences are based around the least important aspects of Peace Economics. Direct expenditures only are measured, not the massive lost economic opportunity involved in using resources for destructive purposes rather than constructive purposes for decades at a time, seemingly perpetually. Military spending is a direct reduction in capital investment and manufacturing sector resources. If the average 7% of GDP devoted to the military from 1946 to 2014 had been reduced to the rest of the world level of 2% of GDP today, American median incomes of $38,000 today would instead be about 30 times as much (5% interest compounded for 69 years), or over $1,000,000 for the average American job. Obviously, there would be environmental restraints and the average workweek would come down a lot, so maybe $500,000 would be more realistic. But the military research shifted to other purposes would have probably conquered many common diseases like heart disease, cancer, obesity, and Alzheimer’s. And vacations on the Moon or around the world trips would be likely, with much more free time from work. Solar power would be basic and normal everywhere.
Growth technologies would be emphasized over power and control technologies, so the research, science, and engineering sectors would be greatly enhanced, while the financial, legal, and accounting sectors would be less important. Entitlements would be much more European style than rugged individualistic American style. Education and health care would be free. Right wing politics would look more like German right winger Angela Merkel, far to the left of either party in America today.
The accuracy of my economic models make it extremely implausible that anything more accurate could show up and compete with those models. The economic model makes other explanations look exceedingly pale by comparison, as twenty year 99% accuracy after twenty year 99% accuracy creates an elegant 99% accurate 60 year simple model of manufacturing productivity, the essence of economic growth. This model will be the new “science of physics like” backbone to the social sciences, as empire modeling and cycle theory replace the sloppiness in existing macroeconomics and climate change theories.
The unusual accuracy of peace economics and the long cycle theory would lead to widespread acceptance of the long term booms and busts of the cycle. So we would see the opportunities of the peaks around 1898, 1952, and 2006. These tops in economic growth rate also correspond to bottoms in interest rates and inflation rates. The dangers of the bottom of the cycle, 1928, 1982, and 2036, would also be taken more seriously as naturally occurring events of the earth cycle. These correspond to economic growth minimums and dangerous economic major mistakes. These also correspond to maximum interest rates and inflation rates. The major exceptions to these trends would be war and military buildup related debacles, like the real estate and savings and loan problems after the Reagan military buildup and the banking and real estate problems after the Bush wars. When regional economics is 94% determined by military buildups of congress and the presidency, false stimulus overheats military states real estate markets creating a bubble that eventually bursts bringing down elements of the banking industry.
An achievement oriented high growth win win economy is a very different thing from a power driven empire stagnant low growth win lose society. Military spending kept low creates the first condition and military spending kept high creates the second condition of empire. The growth society has high social mobility; the empire society has high prisoners, high homicides, high obesity, high teen births, and high mental health problems.
Toynbee found that 23 of 24 empires he studied rose with low military spending and fell with high military spending. Since World War Two, the highest decades of military spending for three different societies were the largest losses of share in the world economy. That would be the fifties for America when Eisenhower doubled military spending after the Korean War from what it was just before the war, the sixties when Germany doubled military spending after the Berlin Wall, and the seventies for Russia when the Breshnev buildup 1966-1982 bankrupts the Soviet Union leading to collapse in 1991.
Every president elected in the Cold War came from a high military spending state, the best record of seven indicators (military state, war hero, run before, Southern Democrat, Republican, economy, large state). About 80% of the cabinet, the congressional leadership, and the supreme court come from high military spending states. It’s 90% for the presidency, higher if you include strong CIA connections. Both Democrats elected since the Cold War worked for or with the CIA before being elected. Ford, the only Republican from a low military spending state, was never elected president.
If you base your support for military spending on research, you are conceding the lack of useful economic output of the other 90% of the military budget. Of the 10% on research, only one third gives a commercial benefit, one third is too military specific, and one third is lost due to secrecy. Venture capitalists know that benefits accrue to those who start something at the rate of about 20%, the rest goes to competitors. So military research is 33% beneficial to the civilian economy or 7% if you consider the competitors response. That makes the military budget either 97% or 99.3% economic waste depending on your theory, an upper middle class “warfare” program with no positive feedback to the rest of the economy.
The flatness of the military economy and the power imperative exceeding the achievement imperative will lead to conservative politics and a new feudalism like the high military low growth lord and serf inequality of the middle ages. The move from manufacturing to a financial services economy will steadily erode unions and the middle class.
Education helps an economy. But trying to row the boat faster doesn’t work when there is a huge hole in the bottom of the boat. Higher education does not compensate for the military hole in the bottom of the economic boat, as the G7 economies empirically show.
Lower military spending leads to higher productivity. But the political changes that go with a plentiful society can lead to taking more productivity in the form of time off and longer vacations. Also, plentiful societies are more equal and more willing to take trade offs in terms of a greener economy.

Here is the pamphlet enclosed with the Peace Economics 25th anniversary video:
Dr. Peace, Dr. Bob Reuschlein,
best contact
to leave message 608-230-6640
for more info

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