Wednesday Night Links

• During wartime the British would suspend the convertibility of bank notes with the promise to restore convertibility at the previous parity after the war. This allowed the Bank of England to help finance the war with note issuance without the fear of a wave of redemptions at the Bank and a drain of its gold reserves. In addition, the commitment to restore the previous parity was equivalent to a promise to offset any inflation created during the war from note issuance with a corresponding deflation after the war. Many people, including many economists, have criticized this practice since the policy-induced deflations were particularly costly. They argue that after the war it might be best to let bygones be bygones and simply devalue the unit of account to avoid the costly deflation. However, if one recognizes the state’s desire for emergency financing, it is obvious that this commitment to restore the previous parity is necessary for long-term emergency financing. Without that commitment, money demand would decline over time in anticipation that the currency would be permanently devalued in an emergency and this would make it difficult for the state to use the same tool of emergency finance in the future. [Economic Forces]
  
• Ferran Adrià, the legendary chef of El Bulli, once said that Mao was the most consequential figure in the history of cooking because: “[Spain, France, Italy and California] are only competing for the top spot because Mao destroyed the pre-eminence of Chinese cooking by sending China’s chefs to work in the fields and factories. If he hadn’t done this, all the other countries and all the other chefs, myself included, would still be chasing the Chinese dragon.” [Mr. and Mrs. Psmith’s Bookshelf]
• Take, for example, the 15-minute city, which is a radical proposal that people should be able to get pretty much anywhere they need to go within fifteen minutes and ideally without needing a car. It’s a lovely idea, and the parts of residential America that are like that — most of them former suburbs — are insanely desirable and therefore insanely expensive. If it were easy to make more of them, you’d think the market would have figured out how! And if I had any confidence whatsoever that anyone involved in municipal planning could produce more neighborhoods like that — leafy green places full of parks, libraries, schools, and shops — or even that they wanted to have safe, clean, and reliable transit options, I’d be all for it. But these are the same people who are gutting public safety in the cities while failing to maintain or enforce order on existing transit. These are the same people who imposed draconian Covid mitigation policies like Zoom kindergarten, padlocked churches, and old people dying alone with nothing but a glove full of warm water to mimic human touch, all of which were meant to buy time for…something (human challenge trials? nationalized N95 production?) that never happened. It’s easy to ban things; it’s hard to do things. So you’ll excuse my doubts about their ability to build a 15-minute city that looks like Jane Jacobs’s ideal mixed-use development, with safe, orderly streets and a neighborhood feel. One rather suspects they would find it far more within their wheelhouse to simply abolish single-family zoning or imposing restrictions on who can go where, when. [Mr. and Mrs. Psmith’s Bookshelf]
• Charles Town (later Charleston), South Carolina, modeled on the capital of Barbados, was filled with theaters, taverns, brothels, cockfighting rings, private clubs, and shops stocked with goods imported from London. Life in the city was a constant churn of social engagements, signalling, and status competition: in 1773, a pseudonymous correspondent wrote in the South Carolina Gazette that “if we observe the Behavior of the polite Part of this Country, we shall see, that their whole Lives are one continued Race; in which everyone is endeavouring to distance all behind him, and to overtake or pass by, all before him; everyone is flying from his Inferiors in Pursuit of his Superiors, who fly from him with equal Alacrity…” [Mr. and Mrs. Psmith’s Bookshelf]
• To a certain way of thinking, after all, cities are where you get culture, like live theater and fusion cuisine and $20 cocktails; they’re where you get cool parties and bodega cats and the other essential elements of twenty-first century self-actualization. Children interrupt all that: they’re a weird time-consuming hobby, like building model railroads or running ultramarathons, so the suburbs, which are full of children, are a sort of ticky-tacky storeroom for humanity either larval or on hold. Suburbs are where interesting people go once they have kids and cease to be interesting. But if you regard children as not just a lifestyle choice but part of becoming a human being, if you believe that creating a home for your family is not drudgery but a valuable undertaking, then you begin to see the point of even an exurban subdivision. (Though I still like sidewalks.) [Mr. and Mrs. Psmith’s Bookshelf]
•  My startup Terraform Industries looks to apply solar to produce synthetic fuel, consuming substantial amounts of land (though less than agriculture) in the process. Something like 2 billion acres, or 7% of Earth’s land surface area, would be sufficient to provide every man, woman, and child on Earth with US levels of oil and gas abundance and commensurate prosperity. It’s possible to imagine a future where people consume even more than that – widespread personal supersonic transport, for example – but ongoing conversion of land use away from intensive industrial agriculture toward inherently more productive solar synthetics is a clear net win for the environment. [Casey Handmer]
• The “Yale or Jail” mentality that shuffles moderately intelligent people who would make excellent craftsmen into low-earning degrees at noncompetitive colleges7 gives unearned status to many of those who work at computers in air conditioning. Status is a substitute for cash in human economies, leading to an oversupply of white collar workers, and the cultural rot is continually reducing the number of working-class people who are employable. I predict that wages for people doing physical work will increase substantially in the coming decade, and ironically it may be these workers who have the most leverage to improve their working conditions. [The Tom File]
  
• So why is strong government less appealing these days? Well, COVID happened. And our governments were pretty damn strong in dealing with it. They made strong laws and enforced them. And what did they do with their power? Absolutely retarded shit. They destroyed the world economy and made 95% of people completely miserable for 18 months. Up to 3 long years in some places. Again, as an Orient enjoyer I was very sympathetic of strong, effective government. My life has been pretty cozy thanks to it for the past decades. But after seeing boomers, hypocondriacs and neurotic menopausal women take the reins and use it against healthy people, I'm fucking done with strong effective government. [Spandrell]
• Battery demand is growing exponentially, driven by a domino effect of adoption that cascades from country to country and from sector to sector. This battery domino effect is set to enable the rapid phaseout of half of global fossil fuel demand and be instrumental in abating transport and power emissions. This is the conclusion of RMI’s recently published report X-Change: Batteries. In this article, we highlight six of the key messages from the report. [RMI]
• All we have managed to do halfway through the intended grand global energy transition is a small relative decline in the share of fossil fuel in the world’s primary energy consumption—from nearly 86 percent in 1997 to about 82 percent in 2022. But this marginal relative retreat has been accompanied by a massive absolute increase in fossil fuel combustion: in 2022 the world consumed nearly 55 percent more energy locked in fossil carbon than it did in 1997. [JP Morgan]
• Let’s do a first principles-based bottoms up cost estimate. What is the Platonic ideal of a solar array? An array needs a 50 um thick layer of silicon to be fully opaque, and perhaps 100 um of necessarily flexible plastic “backing” material to provide mechanical support. Throwing in power cabling and installation rigs, I expect the installed cost of solar arrays to fall to $30,000/MW within 15 years, again with no miracles required. This is roughly 10x cheaper than the current cheapest costs. If we’re prepared to consider the implications of materials science wizardry – essentially expanding the class of known manufacturing techniques to include arbitrary configurations of known elements, a solar array could be made that’s even thinner, lighter, and cheaper, or even self-assembling. But even without such science fiction, existing manufacturing techniques will be extended to give us at least another decade of steeply falling costs, along with commensurate additional installations. The market will demand it and industry will provide. [Casey Handmer]
• Your particular contribution is to pluck a worthy idea from the infinite sea of possibility, to determine how it must take form in the physical world, and to contrive a way to connect it to the engine of capitalism so it can generate self-sustaining wealth and value for its users. [Casey Handmer]