Paul Kedrosky: Don’t count on technology to save us
Adam Taggart, www.Chrismartenson.com
Jan. 21, 2011, 10:11 AM
This week’s Straight Talk contributor is Paul Kedrosky. Paul is an investor, writer, entrepreneur and editor of the widely-followed econoblog Infectious Greed. He is a prolific engine of commentary on the economy, the markets, and society – often looking through the lens of how technology serves (and dis-serves) all three. Paul is also a Senior Fellow at the Kaufman Foundation, an advisor to Ten Asset Management, The Berkeley Center for Innovative Financial Technology, and other companies and venture capital firms. He tweets tirelessly via @pkedrosky. 1. You spend your time focusing on the intersection of entrepreneurship, innovation and the future of risk capital. From your vantage point, what are the most important trends you see right now to be driving – or threatening – the advancement of our society? The list is endless. High on that list, however, is financialization: the absurd, uneconomic and disastrous distortions introduced into the U.S. economy by its overreliance on the financial sector. We are losing many of our best engineers, scientists, and others to the financial sector at precisely the time that we face some of the most difficult problems in history — precisely the sorts of problems that these people could help us with, were they not too busy creating exotic financial instruments to trade with one another. 2. You have an unusual combination of expertise in both technology and macroeconomics. Are you more optimistic about technology’s promise to offer a brighter future, or pessimistic at the growing risks created by our economic dysfunction? Why? At root, I am a reluctant pessimist. I want to believe in innovation and its possibilities, but I am more thoroughly convinced of entropy. Most of what of what we do merely creates local upticks in organization in an overall downward sloping curve. In that regard, technology is a bag of tricks that allows us to slow and even reverse the trend; sometimes globally, sometimes only locally, but always only temporarily and at increasing aggregate energy cost. More than a century ago, we struck a rich vein of cheap energy, one that catalyzed the Industrial Revolution, the rise of the West, and much of what we call” modern society,” with its many conveniences. Our current economic dysfunction is mostly a by-product of this brief entropic reversal as it reverses itself again. Having become over-attached to a way of life made possible by cheap energy, we are now economic diabetics whose bodies can no longer properly process sugars. In the absence of a pump, we die. …
