The path of thinking, which has brought me to think what I am thinking now

My editorial

I am thinking about the path of research to take from where I am now. A good thing in the view of defining that path would be to know exactly where am I now, mind you. I feel like summarising a chunk of my work, approximately the three last weeks, maybe more. As I finished that article about technological change seen as an intelligent, energy-maximizing adaptation , I kind of went back to my idea of local communities being powered at 100% by renewable energies. I wanted to set kind of scientific foundations for a business plan that a local community could use to go green at 100%. More or less intuitively, I don’t really know why exactly, I connected this quite practical idea to Bayesian statistics, and I went straight for the kill, so to say, by studying the foundational paper of this whole intellectual stream, the one from 1763 (Bayes, Price 1763[1]). I wanted to connect the idea of local communities based entirely on renewable energies to that of a local cryptocurrency (i.e. based on the Blockchain technology), somehow attached to the local market of energy. As I made this connection, I kind of put back to back the original paper by Thomas Bayes with that by Satoshi Nakamoto, the equally mysterious intellectual father of the Bitcoin. Empirically, I did some testing at the level of national data about the final consumption of energy, and about the primary output of electricity, I mean about the share of renewable energy in these. What I have, out of that empirical testing, is quite a lot of linear models, where I multiple-regress the shares, or the amounts, of renewable energies on a range of socio-economic variables. Those multiple regressions brought some seemingly solid stuff. The share of renewable energies in the primary output of electricity is closely correlated with the overall dynamics in the final consumption of energy: the faster the growth of that total market of energy, the greater the likelihood of shifting the production of electricity towards renewables. As dynamics are concerned, the years 2007 – 2008 seem to have marked some kind of threshold: until then, the size of the global market in renewable energies had used to grow at slower a pace than the total market of energy, whilst since then, those paces switched, and the renewables started to grow faster than the whole market. I am still wrapping my mind around that fact. The structure of economic input, understood in terms of the production function, matters as well. Labour-intensive societies seem to be more prone to going green in their energy base than the capital-intensive ones. As I was testing those models, I intuitively used the density of population as control variable. You know, that variable, which is not quite inside the model, but kind of sitting by and supervising. I tested my models in separate quantiles of density in population, and some interesting distinctions came out of it. As I tested the same model in consecutive sextiles of density in population, the model went through a cycle of change, with the most explanatory power, and the most robust correlations occurring in the presence of the highest density in population.

I feel like asking myself why have I been doing what I have been doing. I know, for sure, that the ‘why?’ question is abyssal, and a more practical way of answering it consists in hammering it into a ‘how?’. What has been my process? Step 1: I finish an article, and I come to the conclusion that I can discuss technological change in the human civilisation as a process of absorbing as much energy as we can, and of adapting to maximise that absorption through an evolutionary pattern similar to sexual selection. Step 2: I blow some dust off my earlier idea of local communities based on renewable energies. What was the passage from Step 1 to Step 2? What had been crystallising in my brain at the time? Let’s advance step by step. If I think about local communities, I am thinking about a dispersed structure, kind of a network, made of separate and yet interconnected nodes. I was probably trying to translate those big, global paradigms, which I had identified before, into local phenomena, the kind you can experience whilst walking down the street, starting a new small business, or looking for a new job. My thinking about local communities going 100% green in their energy base could be an expression of an even deeper and less articulate a thinking about how do we, humans, in our social structure, maximize that absorption of energy I wrote about in my last article.

Good, now Step 3: I take on the root theory of Bayesian statistics. What made me take that turn? I remember I started to read that paper by pure curiosity. I like reading the classics, very much because only by reading them I discover how much bulls*** has been said about their ideas. What attracted my attention, I think, in the original theory by Thomas Bayes, was that vision of a semi-ordered universe, limited by previous events, and the attempt to assess the odds of having a predictable number of successes over quite a small number of trials, a number so small that it defies the logic of expected values in big numbers, genre De Moivre – Laplace. I was visibly thinking about people, in local communities, making their choices, taking a limited number of trials at achieving some outcome, and continuing or giving up, according to said outcomes. I think I was trying, at the time, to grasp the process of maximizing the absorption of energy as a sequence of individual and collective choices, achieved through trial and error, with that trial and error chaining into itself, i.e. creating a process marked by hysteresis.

Step 4: putting the model of the Bitcoin, by Satoshi Nakamoto, back to back with the original logic by Thomas Bayes. The logic used by Satoshi Nakamoto, back in the day, was that of a race, inside a network, between a crook trying to abuse the others, and a chained reaction from the part of ‘honest’ nodes. The questions asked were: how quick does a crook has to be in order to overcome the chained reaction of the network? How big and how quick on the uptake does the network has to be in order to fend the crook off? I was visibly thinking about rivalling processes, where rivalry sums up to overtaking and controlling some kind of consecutive nodes in a network. What kind of processes could I have had in mind? Well, the most obvious choice are the processes of absorbing energy: we strive to maximise our absorption of energy, we have the choice between renewable energies and the rest (fossils plus nuclear), and those choices are chained, and they are chained so as to unfold in time at various speeds. I think that when I put Thomas Bayes and Satoshi Nakamoto on the same school bench, the undertow of my thinking was something like: how do the choices we make influence further choices we make, and how does that chain of choices impact the speed the market of renewable energy develops, as compared to the market of other energy sources?

Step 5: empirical tests, those multiple regressions in a big database made of ‘country – year’ observations. Here, at least, I am pretty much at home with my own thinking: I know I habitually represent in my mind those big economic measures, like GDP per capita, or density of population, or the percentage of green energy in my electric socket, as the outcome of complex choices made by simple people, including myself. As I did that regressing, I probably, subconsciously, wanted to understand how some type of economic choices we make impacts other types of choices, more specifically those connected to energy. I found some consistent patterns at this stage of research. Choices about the work we do and about professional activity, and about the wages we pay and receive, are significant to the choices about energy. The very basic choice to live in a given place, so to cluster together with other humans, has one word or two to say, as well. The choices we make about consuming energy, and more specifically the choice of consuming more energy than the year before, are very important for the switch towards the renewables. Now, I noticed that turning point, in 2007 – 2008. Following the same logic, 2007 – 2008 must have been the point in time, where the aggregate outcomes of individual decisions concerning work, wages, settlement and the consumption of energy summed up into a change observable at the global scale. Those outcomes are likely to come out, in fact, from a long chain of choices, where the Bayesian space of available options has been sequentially changing under the impact of past choices, and where the Bitcoin-like race of rivalling technologies took place.

Step 6: my recent review of literature about the history of technology showed me a dominant path of discussion, namely that of technological determinism, and, kind of on the margin of that, the so-called Moore’s law of exponentially growing complexity in one particular technology: electronics. What did I want to understand by reviewing that literature? I think I wanted some ready-made (well, maybe bespoke) patterns, to dress my empirical findings for posh occasions, such as a conference, an article, or a book. I found out, with surprise, that the same logic of ‘choice >> technology >> social change >> choice etc.’ has been followed by many other authors and that it is, actually, the dominant way of thinking about the history of technology. Right, this is the path of thinking, which has brought me to think what I am thinking now. Now, what questions to I want to answer, after this brief recapitulative? First of all, how to determine the Bayesian rectangle of occurrences, regarding the possible future of renewable energies, and what that rectangle is actually likely to be? Answering this question means doing something we, economists, are second to none at doing poorly: forecasting. Splendid. Secondly, how does that Bayesian rectangle of limited choice depend on the place a given population lives in, and how does that geographical disparity impact the general scenario for our civilisation as a whole? Thirdly, what kind of social change is likely to follow along?

[1] Mr. Bayes, and Mr Price. “An essay towards solving a problem in the doctrine of chances. by the late rev. mr. bayes, frs communicated by mr. price, in a letter to john canton, amfrs.” Philosophical Transactions (1683-1775) (1763): 370-418

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