June 2014

Coppley, Jackson. Tales From Our Near Future. Seattle: CreateSpace, 2014. ISBN 978-1-4961-2851-5.

I am increasingly convinced that the 2020s will be a very interesting decade. As computing power continues its inexorable exponential growth (and there is no reason to believe this growth will abate, except in the aftermath of economic and/or societal collapse), more and more things which seemed absurd just a few years before will become commonplace—consider self-driving cars. This slim book (142 pages in the print edition) collects three unrelated stories set in this era. In each, the author envisions a “soft take-off” scenario rather than the sudden onset of a technological singularity which rapidly renders the world incomprehensible.

These are all “puzzle stories” in the tradition of Isaac Asimov's early short stories. You'll enjoy them best if you just immerse yourself in the world the characters inhabit, get to know them, and then discover what is really going on, which may not be at all what it appears on the surface. By the nature of puzzle stories, almost anything I say about them would be a spoiler, so I'll refrain from getting into details other than asking, “What would it be like to know everything?”, which is the premise of the first story, stated on its first page.

Two of the three stories contain explicit sexual scenes and are not suitable for younger readers. This book was recommended (scroll down a few paragraphs) by Jerry Pournelle.

 

Geraghty, Jim. The Weed Agency. New York: Crown Forum, 2014. ISBN 978-0-7704-3652-0.

During the Carter administration, the peanut farmer become president, a man very well acquainted with weeds, created the Agency of Invasive Species (AIS) within the Department of Agriculture to cope with the menace. Well, not really—the agency which occupies centre stage in this farce is fictional but, as the author notes in the preface, the Federal Interagency Committee for the Management of Noxious and Exotic Weeds, the Aquatic Nuisance Species Task Force, the Federal Interagency Committee on Invasive Terrestrial Animals and Pathogens, and the National Invasive Species Council of which they are members along with a list of other agencies, all do exist. So while it may seem amusing that a bankrupt and over-extended government would have an agency devoted to weeds, in fact that real government has an entire portfolio of such agencies, along with, naturally, a council to co-ordinate their activities.

The AIS has a politically appointed director, but the agency had been run since inception by Administrative Director Adam Humphrey, career civil service, who is training his deputy, Jack Wilkins, new to the civil service after a frustrating low-level post in the Carter White House, in the ways of the permanent bureaucracy and how to deal with political appointees, members of congress, and rival agencies. Humphrey has an instinct for how to position the agency's mission as political winds shift over the decades: during the Reagan years as American agriculture's first line of defence against the threat of devastation by Soviet weeds, at the cutting edge of information technology revolutionising citizens' interaction with government in the Gingrich era, and essential to avert even more disastrous attacks on the nation after the terrorist attacks in 2001.

Humphrey and Wilkins are masters of the care and feeding of congressional allies, who are rewarded with agency facilities in their districts, and neutralising the occasional idealistic budget cutter who wishes to limit the growth of the agency's budget or, horror of horrors, abolish it.

We also see the agency through the eyes of three young women who arrived at the agency in 1993 suffused with optimism for “reinventing government” and “building a bridge to the twenty-first century”. While each of them—Lisa, hired in the communications office; Jamie, an event co-ordinator; and Ava, a technology systems analyst—were well aware that their positions in the federal bureaucracy were deep in the weeds, they believed they had the energy and ambition to excel and rise to positions where they would have the power to effect change for the better.

Then they began to actually work within the structure of the agency and realise what the civil service actually was. Thomas Sowell has remarked that the experience in his life which transformed him from being a leftist (actually, a Marxist) to a champion of free markets and individual liberty was working as a summer intern in 1960 in a federal agency. He says that after experiencing the civil service first-hand, he realised that whatever were the problems of society that concerned him, government bureaucracy was not the solution. Lisa, Jamie, and Ava all have similar experiences, and react in different ways. Ava decides she just can't take it any more and is tempted by a job in the middle of the dot com boom. Her experience is both entertaining and enlightening.

Even the most obscure federal agency has the power to mess up on a colossal scale and wind up on the front page of the Washington Post and the focus of a congressional inquest. So it was to be for the AIS, when an ill wind brought a threat to agriculture in the highly-visible districts of powerful members of congress. All the bureaucratic and political wiles of the agency had to be summoned to counter the threat and allow the agency to continue to do what such organisations do best: nothing.

Jim Geraghty is a veteran reporter, contributing editor, and blogger at National Review; his work has appeared in a long list of other publications. His reportage has always been characterised by a dry wit, but for a first foray into satire and farce, this is a masterful accomplishment. It is as funny as some of the best work of Christopher Buckley, and that's about as good as contemporary political humour gets. Geraghty's plot is not as zany as most of Buckley's, but it is more grounded in the political reality of Washington. One of the most effective devices in the book is to describe this or that absurdity and then add a footnote documenting that what you've just read actually exists, or that an outrageous statement uttered by a character was said on the record by a politician or bureaucrat.

Much of this novel reads like an American version of the British sitcom Yes Minister (Margaret Thatcher's favourite television programme), and although the author doesn't mention it in the author's note or acknowledgements, I suspect that the master civil servant's being named “Humphrey” is an homage to that series. Sharp-eyed readers will discover another oblique reference to Yes Minister in the entry for November 2012 in the final chapter.

 

Rickards, James. The Death of Money. New York: Portfolio / Penguin, 2014. ISBN 978-1-59184-670-3.

In his 2011 book Currency Wars (November 2011), the author discusses what he sees as an inevitable conflict among fiat currencies for dominance in international trade as the dollar, debased as a result of profligate spending and assumption of debt by the government that issues it, is displaced as the world's preeminent trading and reserve currency. With all currencies backed by nothing more than promises made by those who issue them, the stage is set for a race to the bottom: one government weakens its currency to obtain short-term advantage in international trade, only to have its competitors devalue, setting off a chain of competitive devaluations which disrupt trade, cause investment to be deferred due to uncertainty, and destroy the savings of those holding the currencies in question. In 2011, Rickards wrote that it was still possible to avert an era of currency war, although that was not the way to bet. In this volume, three years later, he surveys the scene and concludes that we are now in the early stages of a collapse of the global monetary system, which will be replaced by something very different from the status quo, but whose details we cannot, at this time, confidently predict. Investors and companies involved in international commerce need to understand what is happening and take steps to protect themselves in the era of turbulence which is ahead.

We often speak of “globalisation” as if it were something new, emerging only in recent years, but in fact it is an ongoing trend which dates from the age of wooden ships and sail. Once ocean commerce became practical in the 18th century, comparative advantage caused production and processing of goods to be concentrated in locations where they could be done most efficiently, linked by the sea lanes. This commerce was enormously facilitated by a global currency—if trading partners all used their own currencies, a plantation owner in the West Indies shipping sugar to Great Britain might see his profit wiped out if the exchange rate between his currency and the British pound changed by the time the ship arrived and he was paid. From the dawn of global trade to the present there has been a global currency. Initially, it was the British pound, backed by gold in the vaults of the Bank of England. Even commerce between, say, Argentina and Italy, was usually denominated in pounds and cleared through banks in London. The impoverishment of Britain in World War I began a shift of the centre of financial power from London to New York, and after World War II the Bretton Woods conference established the U.S. dollar, backed by gold, as the world's reserve and trade currency. The world continued to have a global currency, but now it was issued in Washington, not London. (The communist bloc did not use dollars for trade within itself, but conducted its trade with nations outside the bloc in dollars.) In 1971, the U.S. suspended the convertibility of the dollar to gold, and ever since the dollar has been entirely a fiat currency, backed only by the confidence of those who hold it that they will be able to exchange it for goods in the future.

The international monetary system is now in a most unusual period. The dollar remains the nominal reserve and trade currency, but the fraction of reserves held and trade conducted in dollars continues to fall. All of the major currencies: the dollar, euro, yen, pound, yuan, rouble—are pure fiat currencies unbacked by any tangible asset, and valued only against one another in ever-shifting foreign exchange markets. Most of these currencies are issued by central banks of governments which have taken on vast amounts of debt which nobody in their right mind believes can ever be paid off, and is approaching levels at which even a modest rise in interest rates to historical mean levels would make the interest on the debt impossible to service. There is every reason for countries holding large reserves of dollars to be worried, but there isn't any other currency which looks substantially better as an alternative. The dollar is, essentially, the best horse in the glue factory.

The author argues that we are on the threshold of a collapse of the international monetary system, and that the outlines of what will replace it are not yet clear. The phrase “collapse of the international monetary system” sounds apocalyptic, but we're not talking about some kind of Mad Max societal cataclysm. As the author observes, the international monetary system collapsed three times in the last century: in 1914, 1939, and 1971, and life went on (albeit in the first two cases, with disastrous and sanguinary wars), and eventually the financial system was reconstructed. There were, in each case, winners and losers, and investors who failed to protect themselves against these turbulent changes paid dearly for their complacency.

In this book, the author surveys the evolving international financial scene. He comes to conclusions which may surprise observers from a variety of perspectives. He believes the Euro is here to stay, and that its advantages to Germany coupled with Germany's economic power will carry it through its current problems. Ultimately, the countries on the periphery will consider the Euro, whatever its costs to them in unemployment and austerity, better than the instability of their national currencies before joining the Eurozone. China is seen as the victim of its own success, with financial warlords skimming off the prosperity of its rapid growth, aided by an opaque and deeply corrupt political class. The developing world is increasingly forging bilateral agreements which bypass the dollar and trade in their own currencies.

What is an investor to do faced with such uncertainty? Well, that's far from clear. The one thing one shouldn't do is assume the present system will persist until you're ready to retire, and invest your retirement savings entirely on the assumption nothing will change. Fortunately, there are alternative investments (for example, gold and silver, farm land, fine art, funds investing in natural resources, and, yes, cash in a variety of currencies [to enable you to pick up bargains when other assets crater]) which will appreciate enormously when the monetary system collapses. You don't have to (and shouldn't) bet everything on a collapse: a relatively small hedge against it will protect you should it happen.

This is an extensively researched and deep investigation of the present state of the international monetary system. As the author notes, ever since all currencies were severed from gold in 1971 and began to float against one another, the complexity of the system has increased enormously. What were once fixed exchange rates, adjusted only when countries faced financial crisis, have been replaced by exchange rates which change in milliseconds, with a huge superstructure of futures, options, currency swaps, and other derivatives whose notional value dwarfs the actual currencies in circulation. This is an immensely fragile system which even a small perturbation can cause to collapse. Faced with a risk whose probability and consequences are impossible to quantify, the prudent investor takes steps to mitigate it. This book provides background for developing such a plan.

 

Mankins, John C. The Case for Space Solar Power. Houston: Virginia Edition, 2014. ISBN 978-0-9913370-0-2.

As world population continues to grow and people in the developing world improve their standard of living toward the level of residents of industrialised nations, demand for energy will increase enormously. Even taking into account anticipated progress in energy conservation and forecasts that world population will reach a mid-century peak and then stabilise, the demand for electricity alone is forecasted to quadruple in the century from 2000 to 2100. If electric vehicles shift a substantial part of the energy consumed for transportation from hydrocarbon fuels to electricity, the demand for electric power will be greater still.

Providing this electricity in an affordable, sustainable way is a tremendous challenge. Most electricity today is produced by burning fuels such as coal, natural gas, and petroleum; by nuclear fission reactors; and by hydroelectric power generated by dams. Quadrupling electric power generation by any of these means poses serious problems. Fossil fuels may be subject to depletion, pose environmental consequences both in extraction and release of combustion products into the atmosphere, and are distributed unevenly around the world, leading to geopolitical tensions between have and have-not countries. Uranium fission is a technology with few environmental drawbacks, but operating it in a safe manner is very demanding and requires continuous vigilance over the decades-long lifespan of a power station. Further, the risk exists that nuclear material can be diverted for weapons use, especially if nuclear power stations proliferate into areas which are politically unstable. Hydroelectric power is clean, generally reliable (except in the case of extreme droughts), and inexhaustible, but unfortunately most rivers which are suitable for its generation have already been dammed, and potential projects which might be developed are insufficient to meet the demand.

Well, what about those “sustainable energy” projects the environmentalists are always babbling about: solar panels, eagle shredders (wind turbines), and the like? They do generate energy without fuel, but they are not the solution to the problem. In order to understand why, we need to look into the nature of the market for electricity, which is segmented into two components, even though the current flows through the same wires. The first is “base load” power. The demand for electricity varies during the day, from day to day, and seasonally (for example, electricity for air conditioning peaks during the mid-day hours of summer). The base load is the electricity demand which is always present, regardless of these changes in demand. If you look at a long-term plot of electricity demand and draw a line through the troughs in the curve, everything below that line is base load power and everything above it is “peak” power. Base load power is typically provided by the sources discussed in the previous paragraph: hydrocarbon, nuclear, and hydroelectric. Because there is a continuous demand for the power they generate, these plants are designed to run non-stop (with excess capacity to cover stand-downs for maintenance), and may be complicated to start up or shut down. In Switzerland, for example, 56% of base load power is produced from hydroelectric plants and 39% from nuclear fission reactors.

The balance of electrical demand, peak power, is usually generated by smaller power plants which can be brought on-line and shut down quickly as demand varies. Peaking plants sell their power onto the grid at prices substantially higher than base load plants, which compensates for their less efficient operation and higher capital costs for intermittent operation. In Switzerland, most peak energy is generated by thermal plants which can burn either natural gas or oil.

Now the problem with “alternative energy” sources such as solar panels and windmills becomes apparent: they produce neither base load nor peak power. Solar panels produce electricity only during the day, and when the Sun is not obscured by clouds. Windmills, obviously, only generate when the wind is blowing. Since there is no way to efficiently store large quantities of energy (all existing storage technologies raise the cost of electricity to uneconomic levels), these technologies cannot be used for base load power, since they cannot be relied upon to continuously furnish power to the grid. Neither can they be used for peak power generation, since the times at which they are producing power may not coincide with times of peak demand. That isn't to say these energy sources cannot be useful. For example, solar panels on the roofs of buildings in the American southwest make a tremendous amount of sense since they tend to produce power at precisely the times the demand for air conditioning is greatest. This can smooth out, but not replace, the need for peak power generation on the grid.

If we wish to dramatically expand electricity generation without relying on fossil fuels for base load power, there are remarkably few potential technologies. Geothermal power is reliable and inexpensive, but is only available in a limited number of areas and cannot come close to meeting the demand. Nuclear fission, especially modern, modular designs is feasible, but faces formidable opposition from the fear-based community. If nuclear fusion ever becomes practical, we will have a limitless, mostly clean energy source, but after sixty years of research we are still decades away from an operational power plant, and it is entirely possible the entire effort may fail. The liquid fluoride thorium reactor, a technology demonstrated in the 1960s, could provide centuries of energy without the nuclear waste or weapons diversion risks of uranium-based nuclear power, but even if it were developed to industrial scale it's still a “nuclear reactor” and can be expected to stimulate the same hysteria as existing nuclear technology.

This book explores an entirely different alternative. Think about it: once you get above the Earth's atmosphere and sufficiently far from the Earth to avoid its shadow, the Sun provides a steady 1.368 kilowatts per square metre, and will continue to do so, non-stop, for billions of years into the future (actually, the Sun is gradually brightening, so on the scale of hundreds of millions of years this figure will increase). If this energy could be harvested and delivered efficiently to Earth, the electricity needs of a global technological civilisation could be met with a negligible impact on the Earth's environment. With present-day photovoltaic cells, we can convert 40% of incident sunlight to electricity, and wireless power transmission in the microwave band (to which the Earth's atmosphere is transparent, even in the presence of clouds and precipitation) has been demonstrated at 40% efficiency, with 60% end-to-end efficiency expected for future systems.

Thus, no scientific breakthrough of any kind is required to harvest abundant solar energy which presently streams past the Earth and deliver it to receiving stations on the ground which feed it into the power grid. Since the solar power satellites would generate energy 99.5% of the time (with short outages when passing through the Earth's shadow near the equinoxes, at which time another satellite at a different longitude could pick up the load), this would be base load power, with no fuel source required. It's “just a matter of engineering” to calculate what would be required to build the collector satellite, launch it into geostationary orbit (where it would stay above the same point on Earth), and build the receiver station on the ground to collect the energy beamed down by the satellite. Then, given a proposed design, one can calculate the capital cost to bring such a system into production, its operating cost, the price of power it would deliver to the grid, and the time to recover the investment in the system.

Solar power satellites are not a new idea. In 1968, Peter Glaser published a description of a system with photovoltaic electricity generation and microwave power transmission to an antenna on Earth; in 1973 he was granted U.S. patent 3,781,647 for the system. In the 1970s NASA and the Department of Energy conducted a detailed study of the concept, publishing a reference design in 1979 which envisioned a platform in geostationary orbit with solar arrays measuring 5 by 25 kilometres and requiring a monstrous space shuttle with payload of 250 metric tons and space factories to assemble the platforms. Design was entirely conventional, using much the same technologies as were later used in the International Space Station (ISS) (but for a structure twenty times its size). Given that the ISS has a cost estimated at US$ 150 billion, NASA's 1979 estimate that a complete, operational solar power satellite system comprising 60 power generation platforms and Earth-based infrastructure would cost (in 2014 dollars) between 2.9 and 8.7 trillion might be considered optimistic. Back then, a trillion dollars was a lot of money, and this study pretty much put an end to serious consideration of solar power satellites in the U.S.for almost two decades. In the late 1990s, NASA, realising that much progress has been made in many of the enabling technologies for space solar power, commissioned a “Fresh Look Study”, which concluded that the state of the art was still insufficiently advanced to make power satellites economically feasible.

In this book, the author, after a 25-year career at NASA, recounts the history of solar power satellites to date and presents a radically new design, SPS-ALPHA (Solar Power Satellite by means of Arbitrarily Large Phased Array), which he argues is congruent with 21st century manufacturing technology. There are two fundamental reasons previous cost estimates for solar power satellites have come up with such forbidding figures. First, space hardware is hideously expensive to develop and manufacture. Measured in US$ per kilogram, a laptop computer is around $200/kg, a Boeing 747 $1400/kg, and a smart phone $1800/kg. By comparison, the Space Shuttle Orbiter cost $86,000/kg and the International Space Station around $110,000/kg. Most of the exorbitant cost of space hardware has little to do with the space environment, but is due to its being essentially hand-built in small numbers, and thus never having the benefit of moving down the learning curve as a product is put into mass production nor of automation in manufacturing (which isn't cost-effective when you're only making a few of a product). Second, once you've paid that enormous cost per kilogram for the space hardware, you have launch it from the Earth into space and transport it to the orbit in which it will operate. For communication satellites which, like solar power satellites, operate in geostationary orbit, current launchers cost around US$ 50,000 per kilogram delivered there. New entrants into the market may substantially reduce this cost, but without a breakthrough such as full reusability of the launcher, it will stay at an elevated level.

SPS-ALPHA tackles the high cost of space hardware by adopting a “hyper modular” design, in which the power satellite is composed of huge numbers of identical modules of just eight different types. Each of these modules is on a scale which permits prototypes to be fabricated in facilities no more sophisticated than university laboratories and light enough they fall into the “smallsat” category, permitting inexpensive tests in the space environment as required. A production power satellite, designed to deliver 2 gigawatts of electricity to Earth, will have almost four hundred thousand of each of three types of these modules, assembled in space by 4,888 robot arm modules, using more than two million interconnect modules. These are numbers where mass production economies kick in: once the module design has been tested and certified you can put it out for bids for serial production. And a factory which invests in making these modules inexpensively can be assured of follow-on business if the initial power satellite is a success, since there will a demand for dozens or hundreds more once its practicality is demonstrated. None of these modules is remotely as complicated as an iPhone, and once they are made in comparable quantities shouldn't cost any more. What would an iPhone cost if they only made five of them?

Modularity also requires the design to be distributed and redundant. There is no single-point failure mode in the system. The propulsion and attitude control module is replicated 200 times in the full design. As modules fail, for whatever cause, they will have minimal impact on the performance of the satellite and can be swapped out as part of routine maintenance. The author estimates than on an ongoing basis, around 3% of modules will be replaced per year.

The problem of launch cost is addressed indirectly by the modular design. Since no module masses more than 600 kg (the propulsion module) and none of the others exceed 100 kg, they do not require a heavy lift launcher. Modules can simply be apportioned out among a large number of flights of the most economical launchers available. Construction of a full scale solar power satellite will require between 500 and 1000 launches per year of a launcher with a capacity in the 10 to 20 metric ton range. This dwarfs the entire global launch industry, and will provide motivation to fund the development of new, reusable, launcher designs and the volume of business to push their cost down the learning curve, with a goal of reducing cost for launch to low Earth orbit to US$ 300–500 per kilogram. Note that the SpaceX Falcon Heavy, under development with a projected first flight in 2015, already is priced around US$ 1000/kg without reusability of the three core stages which is expected to be introduced in the future.

The author lays out five “Design Reference Missions” which progress from small-scale tests of a few modules in low Earth orbit to a full production power satellite delivering 2 gigawatts to the electrical grid. He estimates a cost of around US$ 5 billion to the pilot plant demonstrator and 20 billion to the first full scale power satellite. This is not a small sum of money, but is comparable to the approximately US$ 26 billion cost of the Three Gorges Dam in China. Once power satellites start to come on line, each feeding power into the grid with no cost for fuel and modest maintenance expenses (comparable to those for a hydroelectric dam), the initial investment does not take long to be recovered. Further, the power satellite effort will bootstrap the infrastructure for routine, inexpensive access to space, and the power satellite modules can also be used in other space applications (for example, very high power communication satellites).

The most frequently raised objection when power satellites are mentioned is fear that they could be used as a “death ray”. This is, quite simply, nonsense. The microwave power beam arriving at the Earth's surface will have an intensity between 10–20% of summer sunlight, so a mirror reflecting the Sun would be a more effective death ray. Extensive tests were done to determine if the beam would affect birds, insects, and aircraft flying through it and all concluded there was no risk. A power satellite which beamed down its power with a laser could be weaponised, but nobody is proposing that, since it would have problems with atmospheric conditions and cost more than microwave transmission.

This book provides a comprehensive examination of the history of the concept of solar power from space, the various designs proposed over the years and studies conducted of them, and an in-depth presentation of the technology and economic rationale for the SPS-ALPHA system. It presents an energy future which is very different from that which most people envision, provides a way to bring the benefits of electrification to developing regions without any environmental consequences whatever, and ensure a secure supply of electricity for the foreseeable future.

This is a rewarding, but rather tedious read. Perhaps it's due to the author's 25 years at NASA, but the text is cluttered with acronyms—there are fourteen pages of them defined in a glossary at the end of the book—and busy charts, some of which are difficult to read as reproduced in the Kindle edition. Copy editing is so-so: I noted 28 errors, and I wasn't especially looking for them. The index in the Kindle edition lists page numbers in the print edition which are useless because the electronic edition does not contain page numbers.