danieldwilliam: (machievelli)
I read this interview transcript with Robert Gordon, author of the Rise and Fall of American Growth.

He's in the End of Growth school and has some particular observations on the impact of this on the USA.

To summarise the End of Growth school's argument; they suggest that technological innovation has slowed and that the new products it is producing are not transformative in the way that the new consumer products of the 3rd Industrial Revolution were. We might make existing things a little more cheaply or a little better but we already have, warm dry homes, near instantaneous communications, rapid personal transport, effective medicine, easy to run homes and broadcast entertainment. They suggest that there is nothing that big to come, probably ever again. And that that nothing new is going to arrive much more slowly than we have gotten used to.

Both points I fundamentally disgree with. I think there are transformative technologies to come and I think they will come more, not less rapidly, than we say in the 20th Century. More on that anon.

However, even if I'm wrong I think there is a fundamental transformation of society to come brought about by the application of technology that is currently in development. What if everything was free?

I think, even without radical new products the combination of machine intellegence, robotic manufacturing, autonomously operating vehicles, machine vision, data handling, the softwareisation of knowledge and machine scheduling of manufacturing and ordering puts a long-term and sustained pressure on the production costs of many household items. A second trend I observe is that the long run cost of energy is about to be capped by rewewables and then that cap is going to slow fall over the coming decades. The combination of human free production of material goods and cheap and stable energy means that living a dignified life, for most people, most of the time, becomes practically free.

With expanded production frontiers some combination of increased leisure time (either voluntary or forced) or fierce competition for position goods or housing.

And along with the increased leisure comes a reduction in the precariousness of living. Dignity and comfort can be maintained for very little, so savings and social security can ensure the wherewithall for a decent material standard of living easily. No more fear.

Social housing, either mediated through the state of the family is going to be a crucial element of the 21st Century.

There may not be radical new solutions to problems that oppress humanity but quantity has a quality all of its own - especially that quantity is available for free.
danieldwilliam: (Default)

The inestimable Andrew Ducker pointed me towards this article on Sundrop Farms. Sundrop farms use solar energy to desalinate seawater which they then put in a hydroponic greenhouse. They have a small proof of concept farm near Port Augusta in South Australia. I’ve been to Port Augusta so you don’t have to. It’s pretty arid land. They are expanding this to a 40 acre £8m facility that will produce 4  millions kg of vegetables a year. Which I think would supply fruit and vegetable for about 5,000 people.

 This is great. Fantastic and if I won the lottery I would totally have one.  The article was touting Sundrop as an end to world hunger. I was left wondering if it was.  It’s easy enough to set up one of these facilities right next to the sea. But there is a limited amout of land within a stones’ throw of the sea.  What happens if you have pump the seawater inland to the farm?

Based on data from here

Here from the NSW department of agriculture

 And

 here from a website on small scale solar arrays

 and Here from a long paper on building a very large water pipeline from Turkey to Jordan.

 I estimate the additional capital costs for putting a Sundrop type farm 10 kilometers from the coast to be about $10m US. That about doubles the cost of a Sundrop type farm from £8m for 20 acres to £16m. 

That’s going to cost about $600k in interest costs to service per year. Or about 2.4m lettuces.

The pipeline is the expensive bit.  I estimate about $0.5m per kilometre of pipe.  The cost estimates in the paper on the Turkey to Jordan pipeline have a low cost estimate of $1.5m per kilometre for 2.1m diameter pipe.  So, I’m reducing that by a third for the much smaller bore pipe needed for relatively small market garden farm using 10,000 litres per day. (Not sure if this is the current demo-farm usage or the usage planned for the 40 acre production site.)

Bit of sense check.  $500,000 per kilometre. Assume half of that is materials. $500 of materials per metre including hire of diggers, forklifts and so on. Not crazy.  So $250,000 for labour. Assume half of that is grunt pipe bashing work rather than expensive specialist control instrumentation or surveying. So $125,000 to spend on actually constructing the pipe.  A kilometre is 100 ten meter sections.  Assume two teams of 4, one building the support struts, one connecting the pipe, so 8 people on site. They cost a $1,000 each per day in total.  So that’s 15 days to build a kilometre of pipe. Or 6 ten-meter sections per day. Or one every two hours.  That seems not crazy to me.

You need two lots of pipe. One to carry the salt water in, one to carry the waste brine out.

The costs of the solar panels to provide energy to pump the water are comparatively little.  The NSW Department of Agriculture guide implies that it takes 500 kwh to shift a megalitre of water with a head of 120 metres. The 10,000 litres of water Sundrop need a day is 1% of this. So were talking 5 kwh generated over about 10 hours per day. Let’s allow for losses and power to run the controls and so and say we need about $40k of solar panels to power this system.

A caveat here that I was having some difficultly following the energy usage figures so I could well be understating this significantly. But even if I’m out by an order of magnitude then the rounded figure is still about £10m for every ten klicks inland.  

A thousand kilometre stretch of coast cultivated to a depth of 10 kilometers is about 5% of the UK’s agricultural land use.  They are using hydroponics so the yields should be higher than soil based agriculture.  I’ve seen yield improvements touted of 5 times. I’ve also seen improvements of 30 times.  Five times would take a 1000 kilometre by 10 kilometre strip to this being about equivalent to a quarter of the UK’s agricultural base. The UK meets about 60% of its food needs domestically. So we need 1.6 UK’s to grow all the food we consume, or we’d need about 6 and a bit of these coastal slots to support us in the manner to which we have become accustomed. 

The pipeline costs probably don’t scale with size particularly.  So you might well be able to pack 60,000 farms into the 10 klick strip with much more efficient pipe construction overall and not end up doubling the overall construction costs.  This might let you move a further 10 klicks inland. Maybe 30 klicks before you’ve doubled the cost of the installation again. As an aside, if you were able to move 30 klicks inland and assume 10 workers per farm and that each farm worker has .25 dependents and that each farmer needs one additional person nearby to provide support services like education for children, health, beer services and so then the population of this strip of South Australia goes from about 10,000 to about 3-4 million people.  

But the energy costs do scale.

(major caveat – these are pretty much back of the envelope figures which I did in a hurry over lunch. If you think they are wrong, you might well be right. If you are planning to base any form of anything on them I would do your own figuring out.)

danieldwilliam: (Default)

I am thinking about self-driving vehicles and the impact of them on day to day life. 

I am often on a bus from Chippenham to Calne so I’m using this bus route as the basis for some high-level* thinking about the impact on my life. 

I’m deliberately showing my workings in case** I have made a significant error in my assumptions. 

The service from Chippenham via Calne to Swindon that I use takes about 1 hour 5 minutes one way. It runs every 20 minutes from 6am until 10 pm. A 16 hour service. 

Labour Costs 

I think there will be 5 buses on the route at any one time, one way. Ten buses in total. 

Those buses will need drivers.  Ten drivers.  But they don’t work 16 hours. I reckon they work 8 hour shifts. So two shifts are needed for each day. That’s 15 drivers.   

The drivers will want holidays and will call in sick. I’m guessing about 15% additional headcount to cover absensce.  So that’s 17 and ¼  drivers working this route.  I estimate their salary including on-costs at £30k.  (I’m basing this on adverts I used to see in Swindon for bus drivers.) 

That’s a cost of £520k for direct labour driving the bus. 

Fuel Costs 

The journey is 22 miles one way. 

For three buses an hour each way for 16 hours I make that 96 trips of 22 miles or 2,112 miles per day.  The service doesn’t quite run every day but let’s assume it does.*** 365 days at 2,112 miles per day is 770,880 miles per year. 

Deisel fuel retails at £1.42.  Buses get a rebate of 43p on the fuel duty they pay so the real retail price of the fuel is closer to £0.99.**** 

Fuel costs therefore about £282k per annum. 

Total marginal direct cost for the service £800k  

So of the marginal direct costs 35% (ish) is fuel and 65% (ish) is labour. Shall we say a 3:2 ratio of labour to fuel. 

Sacking all the drivers saves £520k.  

If it helps let me point out that computer driven buses are going to be more fuel efficient than human driven buses.  I’m allowing for a 10% fuel saving, worth £28k. This takes the total cost of the service down to £254k or 32% of its original costs.  Pretty much the third of the cost. 

What conclusions do I draw from this? What is the impact? 

If you were to install a fleet of self-driving buses on the Chippenham to Swindon bus service and sacked all the drivers the savings from driver wages would be about the same the fuel costs for running the service, twice. Therefore you could either triple the frequency or run two equivalent service on a different route***** 

Self-driving buses half or better the cost, double or triple the frequency or double or triple the coverage of bus transport in the UK. 

There are some flaws with the analysis. The most significant is that in order to double the number of bus journeys you need to double or triple the number of buses.  Say £100k per bus. That would be £1.6 million for my Bath to Calne route. Or the savings made in drivers’ wage for 3 years. 

*EDITED*

*To update fuel cost figures for a fuel used per mile more reflective of rural driving conditions* Quite literally your mileage may vary for this post.

 

*Vague and almost certainly wrong but hopefully useful in a Fermi sense. Urban bus labour costs to fuel costs might be significantly different as urban buses are in stop start traffic and the density of buses per route is a bit higher (the routes are shorter and more frequent)

 

**In the expectation 

***The buses will have to be driven back and forwards to the depot and theirs driver training and so on. Let’s call it 365 days. 

**** There are other complexities to do with taxation, especialy VAT but unless you are the Tax manager at my last employer I won’t do VAT for you. 

***** A Bath to Calne route would be my favourite.

danieldwilliam: (economics)

Three thoughts make a post.

I’ve been thinking a little this morning about second order effects from technology.

Electric cars and the Meadows.

Prompted by an article on the ever popular Andrew Ducker’s Interesting Links I’ve been thinking about the geography of the Meadows.

There is a strip of park that runs along Melville Drive, the big road that runs along the south side of the Meadows and the north east side of the Bruntsfield Links. It’s on the south side of Melville Drive, so not part of the Meadows proper This bit of park land is about 20-40 feet wide and runs from outside my flat to the far west end of the Meadows.  It’s tree lined and has a foot and cycle path running along it.  It’s pleasant to walk through but it’s not much used for anything other than being walked through. Nobody sits there, even when the Meadows is utter full.  I think this is because it’s right next to a main road.  It’s noisy and a bit fumey from the traffic.

When we start using electric cars which are quiet and non-polluting* I think this area becomes much more likely to be a place to sit.  On hot days when the Meadows and Links are full it’s an extra three quarters of a hectare of shaded outdoor space.  As I walked to work I noticed quite a few spaces where one might sit were it not for the noise and gases from passing cars dotted about Edinburgh

So, I’m wondering what parts of our cities become much more pleasant to use when we have mainly electric cars.

Language barriers and Cultural barriers.

My second Wold question** was about language translation. What happens when we have access to fast to the point of instant, very accurate translation.  I type an email in English, you read it in German, or Latin or Lithuanian.  Going a bit further, I chat away in English and your earphones translate my chat into your language of choice.  Thinking about these abilities being so good that they eliminate the language barrier.***  I wonder if it removes the most significant barrier to labour mobility in the EU.  Does it remove it and is it the most significant barrier to labour mobility?

Labour mobility, or the relative lack of it compared to China and the US, I think is one of the reasons why the EU is just slightly under performing its own economic potential. The US has a population of several hundred million who speak one of two languages and can move anywhere. The EU, with a  slightly larger population has a couple of dozen.

I think more practically porous borders might help with some of the acute difficulties facing some EU populations. It’s currently not hugely helpful to an unemployed Greek or Spaniard that the German economy is booming as they find it difficult to migrate to Germany to find work because they don’t speak German. 

Does the economy of the EU get a boost from increased labour mobility or do we end up with even larger migrant populations crowding into cities where the economy is growing?

What happens to culture when we all, in practise speak German and Greek and Spanish?  Does it persist geographically? By interest group?  By outlook?

So I am wondering at the secondary effects on the EU of reducing the language barriers through technology.

A Huge Economy, A Large Public Sector.

By 2046 the UK public sector will be the same size of our entire economy is today.

Or rather, assuming average growth in the UK returns to slightly below its long term average i.e. 2% and the proportion of GDP spent through the public sector in 2046 rises to 50% in 2046 the size of the public sector will be about £2.48 billion from a total GDP of £4.96 billion.

At 2%***** growth, compounded, our economy doubles every 35 years.**** I think a lot of this growth is going to come from technology.

At current wage trends we should see income parity with China sometime around 2030.  Productivity adjusted unit cost of labour parity is likely to arrive sooner than that.

So we’ll be richer in 35 years. With less competition on price for jobs.******  Obviously, there are questions about how that wealth is distributed which matter a lot to our individual and collective experience of that increased wealth. I’m thinking about the second order effects of additional wealth. Do we become more generous?  Do we choose to take that growth as leisure, as stuff, as transfer payments or investments to promote equality?

Will we notice, or will life still feel like hard work when lived from the inside?  If life feels easier I’m wondering how that changes us.  Would we see a reduction in the number of two income households?  More amateurs in all fields?  A great culture explosion as freed from the tyranny of paid work we invest our time in our hobbies and our children?

*At the point of use.

** A Wold Question is a family term for a pondering, not very acute but makes you think a little bit question. The term originates with my mother who on a trip to the Cotswolds with her friends asked “But what is a Wold?”
***Douglas Adams fans know the answer to this but after we’ve rebuilt Europe what then?

****At 4% it doubles about every 18 years or so.

***** 2% and a bit has been the trend of growth in the UK for some time and there is some evidence to suggest that 2% is the long term growth trend for the world over the last several thousand years when you strip out the effect of population growth and accumulation of capital. That is to say that the effect of technology on growth is 2% per annum.

******From humans.

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danieldwilliam

August 2017

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