Tag: capital accumulation

Accumulation then philanthropy

Peter Woit’s review of a new book about Jim Simons, the mathematician and capitalist who set up the Simons Foundation, which funds math and physics research around the world but principally in the West to the tune of $300 million a year, raises an intriguing question only to supersede its moral quandaries by the political rise of Donald Trump in the US. To quote select portions from the review:

In the case of the main money-maker, their Medallion fund, it’s hard to argue that the short-term investment strategies they use provide important market liquidity. The fund is closed to outside investors, and makes money purely personally for those involved with RenTech, not for institutions like pension funds. So, the social impact of RenTech will come down to that of what Simons and a small number of other mathematicians, physicists and computer scientists decide to do with the trading profits.

Simons himself has engaged in some impressive philanthropy, but one perhaps should weigh that against the effects of the money spent by Robert Mercer, the co-CEO he left the company to. Mercer and his daughter have a lot of responsibility for some of the most destructive recent attacks on US democracy (e.g. Breitbart and the Cambridge Analytica 2016 election story). In the historical evaluation of whether the world would have been better off with or without RenTech, the fact that RenTech money may have been a determining factor in bringing Trump and those around him to power is going to weigh heavily on one side.

This may be the Simons Foundation’s fate but what of other wealthy bodies that accumulate capital by manipulating various financial instruments – the way Jim Simons did – and then donate all or part of them to research? Bill Gates was complicit, as were his compatriots at Silicon Valley, in the rise of techno-optimism and its attendant politics and fallacies, but the foundation he and his wife run today is becoming instrumental in the global fight against malaria. Gates’s Microsoft cofounder Paul Allen has a similar story, as did Jeffrey Epstein, as do many other ‘venture capitalists’ who had to accumulate capital – a super-sin of our times – before redistributing it philanthropically to various causes, benign and otherwise.

If these various organisations hadn’t acquired their wealth in the first place, would their later philanthropy have been necessary? A follow-up: There’s an implicit tendency to assume the research that these foundations fund can only be a good but is it really? Aside from the question of science’s, and scientists’, relationship with the rest of society, I wonder how differently research efforts would be spread around the world if the world had been spared the accumulation-then-philanthropy exercise. If there is a straightforward argument for why there’s likely to be no difference, I’m all ears; but if such an argument doesn’t exist, perhaps there’s an injustice there we should address.

Veblen cars and useless concerns for the climate

Lexus has an ad on the jacket of today’s The Hindu for its new premium hybrid electric vehicle, the LS 500h. The product description states that the car “extends relentless innovation to environmentally conscious engineering with a performance-centric Multi Stage Hybrid System. Crafted with luxury in mind and engineered with the environment at heart” (emphasis added).

This is first-class crap.

Obviously, as a Veblen good (priced at Rs 1.77 crore), the LS 500h is pandering to the self-indulgence of India’s upper class. The car allows the highfalutin to be able to claim that they’re riding around in a vehicle that’s environmentally friendly. It’s not. Aside from the specifics of how it combusts its fuel, the LS 500h measures, in metres, 5.2 × 1.9 × 1.4 (l, b, h). That’s a lot for a carrying capacity of five persons. So the car’s design is quite effectively symptomatic of a belief that pro-environmental engineering is only about rethinking or retooling the car’s central source of power as opposed to redesigning it to take up less space on the roads as well.

We all know the public transport system in urban India is far from ideal. Buses are ill-maintained and don’t ply well-optimised routes. Auto-rickshaw fares are regulated but rarely, if ever, enforced. Trains always run at full capacity, are subject to frequent breakdowns and the associated infrastructure is unclean and, in many cases, unsafe. Overall, public transport options are always in high demand and the commute experience they provide is often stressful. So those who can afford private transportation exercise the option (esp. in the form of two-wheelers). Ultimately, given that most parts of India’s tier I and II cities are unplanned formations, roads are often overcrowded, jammed and/or unnavigable.

So improving this situation needs policymakers and citizens alike to assume an interdisciplinary approach, particularly since transport emissions also have to be mitigated to meet both climatic and health targets. In this multivariate context, one of the variables to be optimised for, among accessibility, affordability, etc., is space. Specifically, it becomes desirable for more people to occupy less space while commuting so that time spent traveling and fuel use efficiency are reduced and increased, respectively.

For five people to occupy a ground area of 10 sq. metres in the LS 500h is ridiculous in the specific context of Lexus claiming that the car was “engineered with the environment at heart”. Let’s be honest: this is a fancy car that’s like any other fancy car. Even the greenness of the electric power it consumes – using electric and V6 engines plus a Li-ion battery – is limited to lower emissions; the power itself, in India, is predominantly generated in thermal power plants. So the car in effect aspires to mitigate its own emissions but does nothing else that’s environmentally friendly. This may be cutting-edge innovation but it is not environmentally productive in the least.

Whether this singular contribution will make a difference is also doubtful. For the upper class to be able to claim they’re being ‘green’ requires them to implement those claims at scale – particularly since possessing the car itself would require capital accumulation to the tune of a few tens of crores. Such wealth can be better redistributed to help those who can’t yet afford to live green but aspire to; in the long-term, sustainable living has the potential to be cheaper, but in the short-term, it is bound to be quite costly. Without redistribution, affirmative pro-climate action through the production and utilisation of Veblen goods will remain an oxymoron.