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Can Toyota and Reason Overcome Blindness? – Article by Edward Hudgins

Can Toyota and Reason Overcome Blindness? – Article by Edward Hudgins

The New Renaissance HatEdward Hudgins
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If you’ve shut your eyes at the ugly spectacle of political and cultural decline around you, look in the right direction and you’ll see what’s best in the world, including innovations from Toyota that are helping the visually impaired.

Technology helping the blind see

The research department at the world-class auto maker is doing more than designing Priuses. It recently unveiled Project BLAID, a shoulder and neck-worn device that can help guide visually-impaired folks through building interiors with cameras, speakers and other technology. This is just one nice bit of good news in a world where the media is ruled by “if it bleeds, it leads.” This is one of many innovations in a world that is being transformed by exponential technologies.

For example, in January an Australian research team at Monash University announced development of another system to help the blind that it will test soon. It bypasses the eyeball, which is often damaged beyond use in blind people, and uses a pair of glasses that feeds visual data directly into the brain. At this time that technology at best would give blind people very limited vision, only enough to let them maneuver around like the Toyota technology does. But it’s a start.

Technology helping the deaf hear

Let’s remember that in recent decades, some 190,000 deaf individuals have received cochlear implants. These devises do not simply amplify sound as do hearing aids. They translate sound into electrical impulses that directly stimulate the cochlear nerve in the ear so the individuals can hear. It is estimated that around 150,000 children are born each year with hearing impairment so serious that they could benefit from such implants.

So as the costs of these implants decrease, we will see the gradual elimination of the ago-old scourge of deafness just as the blight of blindness will gradually disappear from list of human woes as companies like Toyota continue their work.

Reason as the cure

The proximate cause of all this good news is the exponential increase in information processing capability, usually called “Moore’s law.” Since the mid-1960s the capacities of semiconductors have doubled every eighteen months. A capacity of 1,000 at that time is 2,000,000,000 today. That means not only the advent of laptops, tablets, and smart phones but also medical devises that would have been thought science fiction decades ago.

But what is really behind these achievements is a moral code that treats rationality as our highest virtue and human achievement as our highest purpose. It is a commitment by individuals to objective reasoning and to understanding the world so that they can control it to enhance human life and flourishing. And it is a joy that individuals take in the process of understanding and creating.

Ayn Rand called machines “the frozen form of living intelligence.” Do you want to live in a world from which blindness and other illnesses or physical defeats are banished? Then fight for this morality of reason.

Dr. Edward Hudgins directs advocacy and is a senior scholar for The Atlas Society, the center for Objectivism in Washington, D.C.

Copyright The Atlas Society. For more information, please visit www.atlassociety.org.

Europe and Deflation Paranoia – Article by Frank Hollenbeck

Europe and Deflation Paranoia – Article by Frank Hollenbeck

The New Renaissance Hat
Frank Hollenbeck
April 30, 2014
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There is a current incessant flow of articles warning us of the certain economic calamity if deflation is allowed to show its nose for even the briefest period of time. This ogre of deflation, we are told, must be defeated with the printing presses at all costs. Of course, the real objective of this fear mongering is to enable continued national-government theft through debasement. Every dollar printed is a government tax on cash balances.

There are two main sources of deflation. The first comes from a general increase in the amount of goods and services available. In this type of deflation, a reduction in costs, in a competitive environment, leads to lower prices. The high technology sector has thrived in this type of deflation for decades as technical progress (e.g., the effect of Moore’s Law) has powered innovations and computing power at ever-decreasing costs. The same was true for most industries during much of the nineteenth century, as the living standard increased considerably. Every man benefited from the increase in real wages resulting from lower prices.

The second source of deflation is from a reduction in the money supply that comes from an increase in the desire of the public or banking sectors to hold cash (i.e., hoarding).[1] An uncomplicated example will make this point clearer. Suppose we have 10 pencils and $10. Only at an equilibrium price of $1 will there be no excess output or excess money.

Suppose the production cost of a pencil is 80 cents. The rate of return is 25 percent. Now suppose people hoard $5 and stuff money in their mattress instead of saving it. The price of a pencil will be cut in half, falling from $1 to 50 cents, since we now have a money supply of $5 chasing 10 pencils. If input prices also fall to 40 cents per pencil then there is no problem since the rate of return is still 25 percent. In this example, a drop in output prices forced an adjustment in input prices.

The Keynesian fear is that input prices will not adjust fast enough to a drop in output prices so that the economy will fall into a deflation-depression spiral. The Keynesian-monetarist solution is to have the government print $5 to avoid this deflation.

Yet, this money creation is distortive and will cause a misallocation of resources since the new money will not be spent in the same areas or proportions as the money that is now being “hoarded” (as defined by Keynesians). Furthermore, even if the government could find the right areas or proportions, it would still lead to misallocations, since the hoarding reflects a desire to realign relative prices closer to what society really wants to be produced. The printing of money may actually increase the desire to hold cash, as we see today. Holding cash may be the preferred choice over consumption or investment (savings) when relative and absolute prices have been distorted by the printing press.

Of course, no one is really asking the critical questions. Why does holding more cash change the money supply, and why did the public and banks decide to increase their cash holdings in the first place?[2] Without fractional reserve banking, neither the public nor the banks could significantly change the money supply by holding more cash, nor could banks extend credit faster than slow-moving savings. The boom and ensuing malinvestments would be a thing of the past and, thus, so would the desire to hold more cash during the bust phase of the business cycle. If central banks are really concerned about this type of deflation, they should be addressing the cause — fractional reserve banking — and not the result. Telling a drunk that he can avoid the hangover by drinking even more whiskey is simply making the situation worse.[3] The real solution is to have him stop drinking.

According to the European Central Bank’s Mario Draghi,

The second drawback of low inflation … is that it makes the adjustment of imbalances much more difficult. It is one thing to have to adjust relative prices with an inflation rate which is around 2%, another thing is to adjust relative prices with an inflation rate which is around 0.5%. That means that the change in certain prices, in order to readjust, will have to become negative. And you know that prices and wages have a certain nominal rigidity which makes these adjustments more complex.

Draghi is confusing the first source of deflation with the second. The recent low inflation in the Euro zone can be attributed primarily to a strengthening of the Euro, and a drop in food and energy prices.

Economists at the Bundesbank must be quietly seething. They are obviously not blind to the ECB’s excuses to indirectly monetize the southern bloc’s debt. Draghi’s “whatever it takes” comment gave southern bloc countries extra time. Yet, little has been done to reign in the size of bloated public sectors. Debt-to-GDP ratios continue to rise and higher taxes in southern bloc countries have caused an even greater contraction of the private sector. Many banks in southern Europe are technically bankrupt. Non-performing loans in Italy have gone from about 5.8 percent in 2007 to over 15 percent today. And, the situation is getting worse.

Greece recently placed a five-year bond at under 5 percent which was eight times oversubscribed. This highlights the degree to which the financial sector in Europe is now dependent on the “Draghi put.” As elsewhere in the world, interest rates in Europe are totally distorted and no longer serve the critical function of allocating resources according to society’s time preference of consumption, or even reflect any real risk of default.

The ECB will likely impose negative rates shortly but will discover, as the Fed and others did before it, that you can bring a horse to water but cannot make him drink. QE will then be on the table, but unlike the Fed, the ECB is limited in the choice of assets it can purchase since direct purchase of Euro government bonds violates the German constitution. One day, Germany and the southern bloc countries, including France, will clash on what is the appropriate role of monetary policy.

Germany would be wise to plan, today, for a possible Euro exit.

Notes

[1] Keynesians view holding cash, and even holding savings in banks as “hoarding,” but properly understood, only the equivalent of stuffing money in a mattress is hoarding.

[2] Fractional-reserve lending is inflationary, thus contributing to inflationary booms. In turn, banks hold more cash when they fear a confidence crisis, which is also a result of the boom.

[3] Since inflationary fractional-reserve lending is a source of the problem, additional lending of the same sort is not the solution.

Frank Hollenbeck teaches finance and economics at the International University of Geneva. He has previously held positions as a Senior Economist at the State Department, Chief Economist at Caterpillar Overseas, and as an Associate Director of a Swiss private bank. See Frank Hollenbeck’s article archives.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Technological Singularities: An Overview – Video by G. Stolyarov II

Technological Singularities: An Overview – Video by G. Stolyarov II

Mr. Stolyarov explains the basic concept of a technological Singularity and his understanding that humankind has already experienced three such Singularities in the form of the Agricultural, Industrial, and Information Revolutions. The next Singularity will come about due to a convergence of technologies such as artificial intelligence, nanotechnology, and biotechnology (including indefinite life extension).

Indefinite Life Extension is Achievable – Video by G. Stolyarov II

Indefinite Life Extension is Achievable – Video by G. Stolyarov II

Mr. Stolyarov summarizes why indefinite life extension is achievable in our lifetimes, given enough effort, funding, and moral support. He encourages your support for the Movement for Indefinite Life Extension (MILE), which has the goal of increasing awareness of indefinite life extension by an order of magnitude each year.

References
– The Movement for Indefinite Life Extension (MILE) Facebook Page: http://themile.info or https://www.facebook.com/pages/MILE-Movement-for-Indefinite-Life-Extension/197250433628807
– SENS Research Foundation: http://sens.org
– Resources on Indefinite Life Extension (RILE): http://rationalargumentator.com/RILE.html