Data Encryption and Obsoleting the Hash

Data Encryption and Obsoleting the Hash

Paul Andreas Fischer
11/15/2016
Professor Kathleen Hyde
Data Encryption Using AES 128 and 256 Images
  Sometimes AES encryption can be used to protect data against oncoming attackers or simply prying eyes. While this paper will discuss the procedure and benefits of encrypting a simple text document, and display the radical difference between the raw data which is produced without appropriate permissions and the data which is produced with appropriate permissions, it should be noted that this technology can also be used to encrypt programs, pictures, films, or even operating systems and firewalls. Finally, the obsolescence of a hash will be discussed by the use of two-fold encryption, which will be demonstrated in the course of the procedure.

Preparing to Encrypt Your Data
  In my data, the chess sheet, some very embarrassing information about the first attempt to learn to play chess using professional lessons is provided. The first thing to do is to identify the document or documents which need to be encrypted and place them in a folder as seen in figure 1. It is then necessary to open an encryption software, in this case Disk Utility.
The Encryption Process
  The option to create an image from the file will give the capability to encrypt the data as seen in figure 2. In this case blue is used for a lighter encryption while green is used for a heavier encryption, it should be possible to change the file to read/write as well at this point, both actions of which can be seen in figure 3. A .dmg is created as seen in figure 4, and the encryption process has been completed.   The finished products, encrypted at AES-128 and AES-256 can be seen in figure 5.
Figures 6 and 7 serve two purposes. The first is to demonstrate how radically different both forms of encryption are, while the second will be discussed in the section on the hash later. The unsuccessful attempts to access the data using Textedit are followed by a successful authorization process in figures 8 and 9.
  Finally, this embarrassing data can be seen in figure 10. A complete analysis of these first 16 games which precede completion of the lessons has been provided and, given time now that 150 lessons have been completed over the course of a weekend, will be followed by more successful statistics, undoubtedly, which will not require encryption. Double redundancy means that the files will not be lost but also provides another security measure.
Obsolete the Hash
  The purpose of the hash is to not only protect the data from unwanted viewers by producing hash values (Anderson), but ceding that possibility for some batches of data, which became necessary with the popularization of the personal computer, to alert the reader to any manipulations of the data. By using a double redundancy, even if one form of encryption is intercepted and manipulated, or even if both are, the chances that both will be intercepted by the same attacker makes this a secure method of securing information. It can be verified by a third-party partway to delivery, just as with a hash, without access to the actual information by verification of the source, as long as the package identity is confirmed.
References:
Anderson, K. D., & Glover, N. (1995). U.S. Patent No. 5,406,279. Washington, DC: U.S. Patent and Trademark Office.
Figure 1: File Awaiting Encryption
Figure 2: Dropdown tab from Disk Utility

Figure 3: Disk Utility, creating AES encryption

Figure 4: Disk Utility, Encryption Completed

Figure 5: Encrypted .dmg files
Figure 6: Accessing AES-128 Encryption with Textedit, notice difference despite same source from AES-256 Encryption
Figure 7: Accessing AES-256 Encryption with Textedit, notice difference despite same source from AES-128 Encryption
Figures 8 and 9: Access of Chess Gradesheet Using Password
Figure 10: A final decrypted file, the Chess Gradesheet

Steps to Secure and Map a Network

Steps to Secure and Map a Network

Paul Fischer
10/30/2016 revised: 11/11/2016
Kathleen Hyde
Steps to Secure and Map a Network
Jerry’s … Locked
Jerrys.media … Locked
MyCharterWiFi13-2G … Locked
MyCharterWiFiaa-2G … Locked and Inconsistent
MyCharterWiFiaa-5G … Locked
MyCharterWificb-2G … Locked
NETGEAR07 … Locked
NETGEAR47 … Locked
NETGEAR83 … Locked
NETGEAR83-5G … Locked
These networks are all locked. They have been mapped in this manner pursuant to a legal ruling by the Supreme Court of the United States of America in 2014 which allowed the google Fi program to map all wireless networks in the country. It is apparent that several are standardized while at least two appear to be commercial and bear the name of a local establishment. The transconnection groupings within similar names may be part of family contracts with wireless companies, which often allow multiple modems, or devices concurrent and component to the original registered device.
There do not appear to be any communications between these networks but evidence is not provided as to the nature of the networks. There may be a reference to the data communication extant in the devices, and the speed and coverage of the networks which have been connected. The average speed of the networks surveyed came to3G while the average speed of constant (not fluctuating) networks was found to be 3.5G, and these calculations also exclude the commercial connection.
To double check the results of this report, a search of the local region using google Fi reveals that the connection guaranteed for wireless devices is 4G. Speculation may commence thatanother high speed device exists without detection, that the sample is not large enough to provide a random group of devices or to determine the connection type possibilities of other local devices.
Steps a Security Firm Can Take to Protect Businesses From Cyber Attack
Security firms can be asked to help businesses with a number of different programs. Methods which can be taken to fight cybercrime in the financial sector include the use of honey nets, defensive programs, or other system structural changes. A list of such programs (Montcalm, 6) will follow along with a comprehensive step-by-step guide to preventing the ability of a Botnet program to enter into a system.
Airmagnet
SnifferWireless
Airopeeks
The Wireless Security Auditor
Netstumbler
Kismet
Methods of Intrusion
In order to understand the needs of security it is first necessary to outline the means of infection (Gibbs, 3-4). Firstly, wormlike replication indicates an evasion of intrusion detection systems by scanning a subnet using bots; malware can then be selectively inserted and replicated into unprotected networks while avoiding those with protection. Secondly, infected media such as thumbdrives and CD/DVDs can be used in the event of a physical breach. Finally, watering holes are used to instigate drive-by downloads in which undeclared downloads containing malware can insert code into a system.
While the first two are exceptionally useful in use against systems vulnerable to a physical breach or direct access, the last would be a concern only in companies with a high number of employees active on such “watering holes” that might allow a critical mass of localized traffic to obtain objective information either through a general attempt or in conjunction with wormlike replication software. It is important to remember that none of the three main methods of infection are mutually exclusive, and the presence of one likely indicates that various forms of the others are either en route or already have ben attempted.
IDPS systems of prevention
IDPS systems of prevention are recommended by the government, which will be outlined in the following section (Scarfone, 23-26). In the same way that infection techniques can build upon one another, nearly all protection services which are recommended by a government guide to intrusion detection and prevention systems are sensors. There are multiple typical components be aware of, which include appliance, software only, inline, and passive sensor systems.
Ironically enough, passive sensor systems are indeed the most effective of the systems in protection against a botnet intrusion. As was mentioned earlier, one way that aggressive attacks can enter through system protection services is by use of a reconnaissance program. Detection of these programs can be seen to be of paramount importance. An effective honey net will use information from mining techniques that have been collected into a crossplane correlation report  that allows both the types of machines and the types of activities, such as “spamming or scanning” to be used in creation of the architecture of a honeynet with individualized pots to catch the onflow of attacking programs (Gibbs, 17-24).
Steps which can be recommended to secure a wireless network in a business setting:
Detection: Set up multiple forms of detection, not just one
-Mining-based Detection
-C-plane Monitoring
-DNS based detection
-Anomaly-based detection approaches
-Network based signature
This final list is an indication that the defense mechanisms outlined thus far are limited to a reaction to a detected scanning or spamming attempt to gain command and control servers which can pose a serious threat to computer resources. There is an intrinsic flow between botnet and vulnerable threat targets which also must be addressed to deactivate an attacker, and even after some command and control servers have been accessed, it may be necessary to include logging systems which can provide a critical director towards the one way flow of code which indicates the presence of a Botnet Master. It does absolutely no good, and only distributes company information and security resources to chase these attempts at taking down vulnerable threats, marked by a number of systems, so signature-based approaches allow low rates of false positives and decrease the chances that an alert or protective service will alert intruders.
References:
Gibbs, Peter. (2014), Botnet Tracking Tools. https://www.sans.org/reading-room/whitepapers/detection/botnet-tracking-tools-35347
Montcalm, Erik. (2003), How to Avoid Ethical and Legal Issues in Wireless Network Discovery. https://www.sans.org/reading-room/whitepapers/wireless/avoid-legal-issues-wireless-network-discovery-176
Scarfone, Peter (2012), Guide to Intrusion Detection and Prevention Systems.http://csrc.nist.gov/publications/drafts/800-94-rev1/draft_sp800-94-rev1.pdf

Crusades in the New World

Crusades in the New World

 10/2016
  A lecture was given recently by former History professor Alfred Andrea, of the University of Vermont at the Waterman Lounge. The presentation was well-sourced, and he has certainly kept a speaking capability which has not suffered after 15 years in retirement. One thesis was included, that the conquest of the New World could be termed as a Crusade.

  It is an interesting point, and one which has been explored in the past. One question which arose and was acknowledged in questioning as a good point was about the Treaty of Tordesillas. There must have been included among some primary sources discussion of calling this conquest a Crusade as Spanish conquistadors and royalty alike wished to prevent the double-entry into the New World by Britain and France.
  Portuguese encroachment upon the perceived divine entitlement of Spain to the New World could be acknowledged as long as similar deferment to the superior naval capabilities of the Spanish Imperial Navy. Unfortunately, these other potential players who had not proven effective in the Middle East or in the Spice Islands yet, and had little bargaining position with which to enter the New World. Whether there will be an attempt to reclassify greater parts of the period of colonization in the New World as a crusade remains to be seen.

Preliminary Research Investigating Cramping and Prefrontal Cortex Activity in Healthy Volunteers Controlling for Administration of THC or CBD, as well as Voluntary Exercise

Preliminary Research Investigating Cramping and Prefrontal Cortex Activity in Healthy Volunteers Controlling for Administration of THC or CBD, as well as Voluntary Exercise

  So the problem is pretty simple in outlook. Cannabidiol is legal for recreational use in the United States currently, but has not been recognized particularly as having medical applications and it may not even be an option to prescribe it. There is a body, which is appropriate for the potential of the product in its anxiolytic and anticonvulsant properties, which are confirmed, of evidence which suggests it has use for athletes and people with medical diagnosis to improve with cramping symptoms and pre-frontal cortex activity, respectively as well as other symptoms of illness (Ashton). This research has not been done with healthy volunteers in the United States of America, but Germany and other member states of the European Union appear to have such research underway.
  This research includes applications for use with tetrahydrocannabinol (THC), which is not believed to have an effect on the pre-frontal cortex in a reproducible manner, except through childhood use as cited in previous research. No studies have used children that I have been involved in, to the best of my knowledge, though there is a substantial body of evidence regarding the impacts of THC on growth in children. Regular underage use as established by research on the topic of THC was not extant in this trial and the earliest confirmed exposure was between 15 and 17, though a couple to a maximum of three solitary experiences or exposures are strongly suspected before. Alcohol is not believed to have been used in a manner which should impact research currently, and has not been a factor in recent research, with last exposure occurring nearly four years ago.
  At the beginning of July 2016, after 3-6 months without cannabis exposure, which was confirmed by UA analysis and no believed CBD exposure though there is no way to confirm that, given current resources readily available, cramping was experienced while swimming, as has been normal for the subject as an excellent athlete and created periods of significant pain. This is exacerbated by a preliminary diagnosis of degenerative disc disease in 2013, and could have been dangerous to the life of the subject with long-term physical activity without proper actions or steps taken ahead of time.
  Rude behavior at this point is believed to be indicative of lapses in prefrontal cortex judgement, albeit minor, and this is the sort of information which will be advisable to collect for recreational marketing studies with the new and fascinating product cannabidiol along with cramping and muscle soreness. The research now includes confirmed exposure to THC in a healthy volunteer with peak levels of nearly 700 ng/ml in urine analysis as well as intensive exercise. This was not an intended level, and there may have been issues with the testing, and a confirmed negative was believed to have occurred after one month using urine analysis. A similar social encounter can be confirmed during this period without a rude or socially unacceptable response.
  Following one month without exposure to THC and with exposure to CBD, the trial was run again with expected exposure to THC and no significant amounts of CBD over the course of some weeks at which point cramping cramping did ensue. Investigating further, a similar social interaction, all of which regard positive rewards naturally, produced a rude response. This indicates that the benefits to the prefrontal cortex are not due to THC but cannabidiol.
  It should be clear that a trial without CBD, THC, or exercise using these same measures is still missing in order to obtain a clear baseline, so this research has been classified as preliminary in nature. As a person in severe pain without use of CBD, I do not believe it to be ethical to require this study be carried out by myself. If you would be, as a person who is not using marijuana, constituent compounds, or activities and substances which have been shown in research to have any impact on the measures being evaluated in this study, so kind as to fulfill this study and to cease regular activity for between one week and one month in order to complete this study, while noting cramping and prefrontal cortex activity indicators, it would be helpful to me. Should a description of the experience be acceptable then it might be possible to provide this research in conjunction with the work so far. Dietary factors are being intentionally excluded, and are not believed to be a factor, as even consumption of food shortly before intensive physical activity did not induce cramping with use of CBD, although combined with necessitated dehydration over the course of relatively short time period did result in physical activity related nausea, no other serious complications had to be recorded.
References:
Ashton, C. H., and P. B. Moore. “Endocannabinoid system dysfunction in mood and related disorders.” Acta Psychiatrica Scandinavica 124.4 (2011): 250-261.

NIAC Conference Notes

2017 NIAC Symposium Boulder CO: target, Fall 2017

Space Technology Portfolio

Transcription: Paul Fischer

 

9 programs

-Transformative and Crosscutting Technology Breakthroughs

   Tech Demo Missions

   Small Spacecraft Tech Program

   Game Changing Dev.

-Pioneering Concepts/Developing Innovation Community

   NASA Innovative Advanced Concepts

   Space Tech Research Grants

   Center Innovation Fund

-Creating Markets and Growing Innovation Economy

    Centennial Challenges

    Flight Opp

    Small Business Innovation Research and Small Bus. Tech. Transfer


Three stage portfolio

Other Student programs are research programs

Civil Service and Education


Challenge Program

Innovative Electrical Airplanes

Space Elevators

??? Planned?? Helicopters

**Governmentwide program


Widget to design overall program architecture


Pipeline:

Early Stage

-NASA Innovative Advanced Concepts

-Space Tech Research Grants

-Center Innovation Fund

Mid TRL

Game Changing Development ie. Small Spacecraft Tech.??

Comm Partnerships

SBIR/STTR

Flight Opp

Cent Challenges


GO LAND LIVE

Astroid Retrieval Mission

HIAD

Supersonic retropropulsion

surface power

advanced…


STMD Thrust Areas

Critical towards sustainable life on Mars


QA

Analogy for low TRI funding in general – a turkey on Thanksgiving

Small turkeys have a higher number of units per pound (energy)

So for NASA, taking larger percentages of small investments will make more sense

The budget has been constrained by bulky contracts

In order to have a larger budget, looking at smaller projects over greater time will have a greater impact and a greater value for researchers


Phase ones and Phase twos

encouraging outreach and sharing, the coming symposium in Boulder


Pathways, 508 compliance (NASA comm needs ORIGINAL file to convert)

PDF format on the NIAC website

sensitive information must be protected (e.g. separate appendix

Final clients produce views, ITAR Compliance is important

Essential parts of a presentation include a table, graph, and even cards


Something like sugar….?


Please credit NASA and NIAC in all products or articles associated with NIAC studies (include logos)

Mention your NIAC award as funding/contributing to your effort

Please notify Kathy Reilly – ideas and presentation

Please… ???


Associate Director ???

Sputnik story absolutely riveting: Roger D. Launius National aerospace Museum


Working for the Air Force to Director of aerospace program, ownership of the museum (joke)

DO NOT touch the actual spacecraft, just the plexiglass

1950s – The Space Exploration Advocate’s Agenda (painting)

Space transportation system part of an aggressive agenda partially to Mars

Replication in 2001 A Space Odyssey

Environment, imprint

Advocates for Space exploration, German Immigre


(BREAK)

[Insert and return to notes here]

Slamming together of Agencies >> clash and fight over ideas

Sputnik Crisis moves into NASA

Army efforts – jet propulsion lab

Low budget and attempt to create an Agency

-> NASA with early opposition from Eisenhower

DARPA creation and his concern was that we were behind, no necessity to create a bureaucracy existed for him

There will not be a space race with the Chinese as there was from Russia

There is no mutual desire for nuclear war

There are some rivalries, but there is not the death struggle fight with the Chinese as there was with Russia, children used to crawl under the desks many days, this was the environment of the space race

Remaining Incentives for Spaceflight

-Nat. Security and Military Applications

-Scientific Discovery and Understanding

-Economic Competitiveness and Commercial Activities (making $ in space), Jeff Bosen – “I’m not doing this for myself, I want to make money” without this there was the potential to pull the plug

-Geopolitics and national prestige


Mapping the schedule of American Independence with Space Exploration

Christopher Columbus >>> Yuri Gagarin

Lost Colony of Roanoke >>>> Apollo 11

Jamestown >>>> 1st Mars Colony

US Independence >>>> 1st Off-World Republic


Keeping in mind the long periods of centuries involved


Challenges for Future of Human Spaceflight

Exploit historical rationales

Build on initial experiences; broaden international activities

Enhance national security, exploration, science, technology development, commerce, and infrastructure


Step 2: “then a miracle occurs”

Scientist says, “I think you should be more explicit here in step two.”

(Joke)


QA:

What will we do now that there is no space program? Need?

  1. Weather security
  2. Military Aggression
  3. Necessity to make $, comm. success
  4. Extension of human frontier in knowledge, education, and culture: What do you mean there is no space frontier? As the correct response to the above question

Robot program out in Pluto, Shuttle program, only wakes up in event of disaster, without the shuttle program, mainstream appeal should be appropriate


What would have happened if Niel Armstrong had planted a flag and claimed territory in the name of the United States?

Outer Space treaty of 1967 we were party to, so this was prohibited in any case.

What if the first words had been drink Coca-Cola? That was an offer that was refused as well.


The only thing with economic value is a photon or an electron, how to get back to moving atoms rather than bits? The grand transit of a material transportation industry? [ie how to get results rather than spreading information only]

If you ran a train from Chicago to New York and threw away the train for tardiness, then the train would be late every time!


We are biologically entities and we do not cognitively articulate specific intellectual approach towards our personal behavior, biological processes might transcend our needs individually and importance of extending our frontiers to fulfill biological needs.

Yes.


Colonization of America success?

Spanish actually did have success

But the North American Colonies?

Successful in production of tobacco

So a product to kickstart space that could be tied to resources or knowledge or non-physical items, the challenge is: What is the product we will tie to space and create a profit from?

Right


Increasing rate of shipwrecks, raising money for an expedition from Spain or Portugal, using JFK’s warning about roaming, unsettled, throughout space to move out capabilities and the approved program for a watch vehicle which proceeds as necessitated. Scientists should not wring hands about the expediency of work, but quality

Yes


The remarkable nature of these people who are daring enough (got the cahones) to take museum spaceships once upon a time, and the importance of keeping this at the forefront of public awareness (these older ships)… stimulation of program from initial Soviet Space Program and the launch of Sputnik, what was Eisenhower’s knowledge on the topic?

He did not know, in 1952 (‘62?) the Soviet Union shot down U2, with a K[L?]-007 with the correct oversight legislation and Sputnik established for the first time legal oversight precedent


MOL – Apollo initial program Director: I am giving the stamp of approval on all of the things which have been said, and the MOL program has now been declassified

Last Question


Colonization in the last 1000 years, brings the issue of novel resources, not just things like gold, known about, but coffee, spices [indies?], which had not before been known about?

Great


Gift of a 3D printed NIAC logo

 

10 Minute [Break]

E-Glider (electrostatic glider)

Some static electricity allows the balloon to fly around

Properties found in spider silk, electified in teh presence of the earth’s static atmospheric electric field (-120 V/m negative)

Observed flight pattern in spiders can be seen

Benefits to NASA:

Exploration of comets, asteroids, moons and planetary bodies is limited by mobility

[omission]

Phase 1 approach

Analyze a mission scenario using an electrostatic glider

[omission]

Challenges of small bodies

Physics at airless bodies

Microgravity – challenging for locomotion

Cohesions forces – dominate partical interaction through vdW (?) forces

Solar radiation – Constantly in action

Electrostatics – [power source]

Day/night charging environment

Differences on dark side of asteroids vs. the illuminated side (+5V to -1000V)

Effects of solar wind and UV

The environment near the surface of airless bodies is electrically charged due to interactions with the solar  wind plasma and UV radiation

Moon dust fountains

On the Moon, electric fields can reach 50-150 kV [kW?]

Particle ballistics under charging

Still needs to be reached and investigated,

E-glider equilibrium creates a field and static electricity

Electric fields of E`1 kV/m could take place on asteroids and and electric field fo E = -10V

Debye Shielded Force

In a plasma environment an oppositely charged sheath forms about a charged space object

The electron deby length [formula]

Example JPL 150 m Solar Sail Chargin Analysis

Solar sail front -aluminum back -kapton H, 150m

Spacecraft body aluminum

Solar arrays front – solar cells

Solar array back -black kapton

Boom connecting spacecraft and solar array craft -kapton

Prliminary designs

[atom design]

[butterfly design]

Articulating the wings would lead to electrostatic flight

Electrified tehter strands to harvest energy

May need to generate local charges artificially (ion thrusters)

Telecom etc…

Preliminary levitation analyses

Looking at the level of charge necessary to reach zero force, dependent on geometry

With a computation of the charge, we know the power needed to carry in order to obtain that charge

Simulation of small body missions

Landing control

Station keeping

Soil mechanics

NEO capture

E-Glider DSENDS simulations

Autonomy >< Environment ??

Polyhedron graphic model of ??


Electro static Inflation Experiments

0 kV 3 kV 4 kV 5 kV 9 kV

Field sensor: Langmuir probe

-Solar wind causes charge neutralization within a fraction of a second around the….

Electro-cartographic navigation

Measure the charge and attemtp to identify the potential and path of minimum resistence

E-Glider risk-based mobility analysis

JPL’s CEMAT = Combined EDL-Mobility A_ Tech

Inflation of the wings can be seen in animation, and movement along astroid can be seen

E-gliders in mission context

Landers:

DAS

PROP-F

MINERVA

MUSES

Science grade instruments are becoming smaller

From mass spectrometers to communications

Conclusions and future work

Getting sight into the physics, and to further develop simulation models, necessity of plasma physics

QA

This work was done in a laboratory in the 70s, earth does have a net electric field

Positive charges were pushed away, but if the field is conductive, there is no guarantee about the charges redistributing themselves

One critical feature is the conductive nature of asteroids, level of propensity might be needed

This has not yet been fully investigated

Control factors of craft?

There is no answer to this, but a minimum level of control necessitated

Substantial transfer of charge – Inbuilt power supply?

Dual-use cables

Solar wind rider cable, could be found in other supplies

 

 

Bruce Wiegmann, NASA Marshall Space Flight Center
HERTS/Electric Sail background information
modeling
tether and deployment specifications
and spacecraft design
Contributions from universities, labs, and technical schools across the country
Distinction of a solar sail from an e-sail
E-sail converts sun’s energy through electrostatic repulsion
wire sheath extends and pushes positively charged protons through
these positively charged tethers are quite different in punch and design from an e-sail
thrust drops by 1/r^2 for the solar sail and 1/r^1.16… for an e-sail
e-sail will provide higher velocity, and have a slower degradation of thrust in dark spots
Voyager took 35 years to reach edge of the solar system, an e-sail could shorten that time significantly
How to recreate a tether deployment in an area with a flat floor, should be ready shortly
the cost came to 50,000 for this research
Results of the particle and sail deployment simulations
data generated was reproducible, a charged wire repulsion
ion source and charged box there >>> tunnel without a wire
deflection of protons creates an angle and temperature which will be discovered with these simulations
diagnostic suite to measure ion flow, has yielded good data
Updating MALTO model (Mission Analysis Low Thrust Optimization)
the idea is to change the thrust drop ratio and ??/ ratio
Extra space designers were put to work on a couple billion dollar mission, requiring RTG propulsion
creating a box-set proof that the e-sail can actually work
Can we package it into a 12U box?
three conditions for potential success, the project had failed two years before
Deploy
Accelerate
Steer
acceleration goal is triple that of competing research and many times that of any existing system
Hub and Spoke > Hybrid > Barbell
neither the first nor the third would be feasible at a full scale
Initial issues with the 12U system propellant mass and combinations of 6 U systems which violated maximum spin rates
the hybrid of 10U and two 1U units did not burn out
Use of the NEA scout 6U design with a 6 kV power supply and other modifications
development of a tether trade tree, for advantages of different materials
Materials
synthetic > organic > metallic
Miralon (CNT)
amber strand leading contender
Aluminum
copper
SOS is the vehicle of choice for deployment, because not many NASA vehicles are outside of orbit
Upper stage> 10 or 11 rideshare payloads, which will eject from this stage
Detumble – drives propellant to spin out, 800 grams of cubesets
Uncouple
200 watts of electricity total for solar array deployment, 16 km in approximately 6 hours>> 8 rotations per day
when spacecraft is 30 degrees out of the ecliptic plane, a solar array can be conceivable
QA
As the model is expanded to actual size, the forces at work will also grow, so the 1/r^1.16… is correct
Scale of animation yields questions about the tether system…
It is outside of the Earth’s magnetosphere 2 different electron transmission cables are provided
Initial skepticism was overwhelmed by personal model on a small scale which proved that this actually did work! Would the solar field be guided by the field lines of the magnetic charges which [exist in space or from craft?] are extant
Yuri Millner and interstellar team are interested in this
Transfers for Lunar extreme environments: Adrian Stoica
Project is currently in phase 2
concept of transformers –
autonomous reflectors deployed from small surface to large surface projects
provide continuous solar illumination into permanently shaded craters
creates an infrastructure that provides power and thermal control to robots as a service
Shape changing robotic space systems that redirect energy
on the rim, can also serve as communication relays
This is not a new thought, but the story of how to bring the sun into the dark place sparked this thought >> Norway in Rio Kant, reflectors provide 50 meters sun exposure
Space mirrors starting with Almond Albet and later Ehricke have been explored conceptually
1) deposits of hydrogen and oxygen are extant
2) tech to power ISRU is permanently shaded areas is lacking
3) locations on the rim of Shackleton crater have long, yet discontinuous, periods of illumination …at most there might only be 3 days (2.5ish) of darkness, so this is also a period which will have to be dealt with
Phase 1 Findings: relatively large reflectors, will necessitate light and small packing
RTG may be ok for prospector rover, but not enough to power ISRU
The rover must survive periodic shortages in hibernation mode
re-usable data
ISRU of icy regolith necessary to extract water, hydrogen, and oxygen
evaluate the possibility to obtain continuous illumination
develop concept and reduce uncertainties, inc. material, unfolding of TF from compact to full sized
Vision
Develop a Lunar Pole South Illumination ???…
capacity of the SPI
Lunar ISRU potential to fuel travel to Mars
Lunar LH2/LO2 propellant from Shackleton Crater may be sufficient
Sustainable and affordable human-mars exploration architecture using self-propelled tanks refueled on Moon
five hundred days of Mars exploration enabled
Deep-Space habitat will use some tanks of fuel
one full tank will be waiting at Leo, while four empty tanks return to Moon for refueling
10 tons of water can be generated per day, and produce 7.5 tons of propellant
Regolith water resource: one meter depth with 5-10% of ice
Total power needs for ISRU
6MW for extraction of water, 50 kJ/g, 24kJ per gram for electrolysis 10 t/day
13MW solar power, 3 MW direct heat and 10 MW energy
Summation of results
LOLA data and 3D models for computer generation
tools allow pretty good comparison of Ray-Tracing and Horizon measurements
Redirection from a region into a two flat mirror system >>>complete illumination along the rim>>> actual illumination through the transformer
should the reflectors be pure or should they be concentrated into lasers?
eg origami opening>>> properties of Spiral and Concentric Crease Patterns
composing solar panel infrastructure, and importance of taking advantage of the Moon before traveling to Mars…
QA No clues on the amount of harvestable ice which might be there, and whether that ice might be needed for lunar settlement
there appears to be enough water for 3000 years of travel to Mars using this method, but technical issues remain
it could be 2000 years, but yeah…
Access remains an issue, shackelton several kilometers across and deep
actual landing and launch will occur from crater.
Michael Paul, presented by Dr. Timothy Miller
Why: Stored Chemical Energy System
continuation of a phase II project
Need:
Power for spacecraft in sunless regions
battery-power leads to short missions (hours)
Not enough plutonium to go around
is there a sweet spot in the design space of missions for combustion?
Combustion of Lithium fuel where a Navy research station did work with power systems
use of all sorts of metals as oxidizers and products are more dense than the actual fuel, which will allow those metals to stay in the system [unlike leaded gasoline, which leaked and combusted into family homes with indoor generators]
Phase two effort follows design for five-days (120-hrs) on the surface of Venus
8Lithium +Sulfuric hexa-Flouride>6dilithiumiSulfite+Heat
standard heat of reaction at 298K is ?? kW
prior stirling demonstration system:
fully integrated system (~.5m diameter)
3kW Stirling Engine
37% efficiency
80 hour Wick Combustor Operation (Fuel exhaustion)
Horizontal, Cylindrical Tank when used has a void space from the Lithium which was present, as products of combustion freeze at a different temperature than Lithium, which can create cracks and breaks in the containment chamber
Lithium Oxide has the highest temperature reaction, so the necessity to create lithium carbide presents
96.5% CO2 and 3.5% N2
in order to obtain clean Lithium, these products must fall away completely
a little over 4 times the system specific energy over a Nitrogen/sulfur based battery
9” by 14” combustion model
1000 degrees fahrenheit yields the blue flame
at 1250 degrees, a scarlet flame is demonstrated which allows some smaller byproducts to form
Li and CO2 yields alot of crap along the top, as the temperatures run began to fluctuate dramatically
a nice sustained combustion process occurs for about 100 minutes before the lithium level sinks below thermal couple one, and proceeds through couple two into couple three
Lithium oxide melts or freezes at a very high temperature, where lithium separates from the crud
this necessitates a wider combuster… will be accomplished shortly
circumferential defraction??? as lithium runs up the sides of lithium oxide and carbide
time progression yields the progression of free carbon
moles products vs. moles CO2
trying this with Nitrogen will be the next goal
For an application on the lunar South Pole, with the engine operating at 2 kW and rejecting heat to only 50 K a run time of 150 hours can be expected.
QA Occupational safety concerns about Lithium, fire safety?
No government body on earth is more restrictive about fuel than US Navy systems, so solid lithium is actually quite benign, unless it accumulates hydrogen… must be used with caution, but is much safer than plutonium or other products
fairly large body of data using no-gravity simulations, but in the third system with the products falling away there may be complications, but there is no indication that the reaction will not occur in zero gravity.
combustion products could sink, but carbon dioxide lithium success does depend on keeping these by-products from sticking to the wall
the holy grail of not having to take an oxidizer
This is the first time of running this project with a Stirling Engine
dependence on segregation has been displayed to be not entirely present

 

The Navy system was deployed as a steam system

Thank you

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Using Foreign Direct Investment and Market Integration to Measure the Foreign Economic Strategies of China

Using Foreign Direct Investment and Market Integration to Measure the Foreign Economic Strategies of China

Paul Andreas Fischer

6/26/2016

Shirley Gedeon

Using Foreign Direct Investment and Market Integration to Measure the Foreign Economic Strategies of China

Chinese foreign success has recently been indicated in the gains made abroad. The region which substantially benefits from synergistic reforms with the commercial giant can be defined with two groups of emerging economies. New industrial economies (NIE) surfaced first, and the development there can be traced to the 1980s, and even includes or included China. Some of these are located elsewhere in the developing world. The investment that China has made is that other economies in the Southeast Asian region will join them.

In light of the savings and loans crisis of the 1980s and 1990s and resource pricing issues of 1999, the government of China has recently ensured that the dependence, both real and implied, of the “forced” entry into the World Trade Organization and supplication to the International Monetary Fund can be mitigated or eliminated within their sphere of influence. Direct foreign investment (DFI) is among the best ways of showing the trends of changes in the Chinese regional strategies. This mechanism can be seen as a progression from horizontal to vertical integration of industries and firms. Both of these measuring tools are available to arrive at a realistic understanding of the nature of continued growth and the conditions under which it can continue in the future.

While domestic growth during the 1980s is touted and Deng’s Four Modernizations are emphasized as critical to liberalization and transformation of the Chinese economy, it will be possible to see that market inefficiencies increased during this period. It was not until later, when Deng encouraged China to “cross the river by feeling the stones” that substantive changes were found. The Soviet Union had fallen, and not as a consequence of war with China.

As a recipient of DFI, China allowed liberalization of some markets. Others, notably petrol, were subject to price controls and governmental control increased early on. By doing so, all potential economic progress from free market institutions had been lost. The political gain remained.

Pressure increased with the fall of the Soviet Union, and China’s consumers were lost. Liberalization proceeded quickly. The way the Chinese market then transformed is remarkable. A distinct cultural shift accompanied this change, though it is not a valid economic tool because this shift was present even at the beginning as the market changed in name only. Understanding the nature of the Chinese market success is critical to the continued health of the global economy: if the transformation was a miracle, then the effort to export it regionally will fail and spell catastrophe for both China and for better qualified recipients of DFI.

By examining the DFI, a trend is found in which the Chinese investments in regional nations may actually be self-defeating in nature. Even during the crisis of 2008, foreign investment to other countries from China only slowed their growth temporarily. Rather than investing in nations that consume Chinese products, investments are being made into competing countries. This arising vertical integration is a new trend, and part of the incentive to invest in China during the 1990s was created by the benign nature of bland Chinese political ambitions on a geopolitical, or at the time even regional, scale.

This paradox of investment options has created a difficult decision for China which is not being decided on rational economic advice, but under supervision of the government which has relative control of the mechanisms of economy. Politically, the money is more safely invested within the range of the bulky People’s Liberation Army, with its limited projection capabilities, than in parts of the world where the global community may be hesitant or unwilling to become involved should complications arise. Unfortunately, this also has stunted the economic development of other nations and embodies a false sense of security into an unsustainable level of growth which may be dependent on exploitation of regional economies.

Competition with other regions of the world could fuel Chinese development into a new and sustainable era of technological progress and growth. Whether investments in regional or domestic endeavors will fulfill this purpose remains to be seen. The ultimate risk is that no objectives will be achieved, and that regional investments may foster substitutes and replacements for the limited consumer demands of larger economic systems while failing to provide adequate competition to increase productivity in China to spark growth after the demands of foreign consumption has been met.

There are two important conclusions which may be drawn from the broader trends in DFI to and from China. Firstly, the only hope China has of continuing the growth secured by horizontal integration is to encourage competition and increase profits from successful vertical integration with foreign emerging or recently emerged markets. Secondly, this goal has only been partially realized as two thirds of Chinese foreign investment has stayed in the region.


Political Goals and Increasing Centrality of Chinese Strategy


While it is possible that political goals come in conflict with each other, ie. China sees regional investments as investments in security with value regardless of the long-term success of such investments, the environment of synergy naturally predicates growth. Loss of synergy can be evaluated as an opportunity cost of development and is evident in the integration of Chinese economic developments in the past. Early outsourcing occurred as a result of Japanese technology firms seeking a lax source of labor and standards, which were found in China. The firms that refused to cross over subsequently failed.

Executives and corporate names remained in Japan at that time, which made the process one of horizontal integration. In order for growth to be sustainable, and rates of successful loans to increase, competition must be indicated by vertical integration. The best way to distinguish between these two phenomenon is by measurement of the domestic value added (DVA). As competition increases, and synergy with it, the DVA increases while a lower DVA indicates a fragmented economy in which competition is prohibited by virtue of governmental standards, or discrepancies in environments.

The amount of value added from import to purchasing price among Chinese goods, or the DVA, has risen from 25% to 50% as a result of increasing development. That number is still terrifying by industrial standards, a developed country such as the Netherlands expresses concern when the DVA has dropped to 80% at any point. The DVA is an indicator which serves a function beyond that of just actual production in a nation, but also indicates the stability and centrality that economy plays to the global economy.

One quick note which may help the less numerically inclined to understand the increasing relative importance of DVA is that it may help to reverse the method of calculation when looking at DVA across industries or nations. A DVA of 50% means the exported product is worth 200% of the price of the imports. With a value of 80%, a change of just thirty points, this becomes 400%, add another ten and the increase in value is 1000%, and so on in an exponentially increasing fashion. In other words, small percentage changes in the West correlate to massive shifts in developing results.

China has an economy which currently plays an indispensable role in the global economic structure. This role was occupied in just a generation. Growth beyond sustenance requires more than performance, it also necessitates creation. The massive elimination of poverty as well as the difficulties of developing a consuming class sums up the achievements and the shortfalls of the economic miracle in China.

It should be assumed that through brute force alone, China will reach parity with Western economies. Regional investments in competitors should mean that Chinese firms will have just as difficult a time retaining the status quo as Japanese firms did in decades past, even if exclusion of other markets abroad slows the process down slightly. That is a point at which current economic policies will fail dramatically.

DVA parity between Western and Chinese economies necessitate a level economic playing field, and even the smallest governmental interventions outside of direct necessity or protectionist practices could disrupt global supply chains. Currently the impact of China’s experimentation with economic policies is mitigated by the universal nature of economic institutions and foreign nations. China’s political system must evolve in order to be allowed to assume a greater level of responsibility.

Had the World Bank invested with a similar geographical prejudice, there would have been a humanitarian crisis in China unrivalled in the history of mankind. Some would argue that during the rise of Mao Zedung, under the “protection” of the iron curtain, such a situation had already occurred once in Chinese history, though without an intentional perpetrator. Entrusting such a responsibility and risking that event to occur as the consequence of intentional policy making is not a viable option currently, but may be in the future. In detailing the optimistic growth and achievements of the Communist regime in China, this paper will assume such political development only facilitates and does not interfere with the continued development there.


Growth and Prosperity: From Potatoes to Refrigerators


The documentary film detailing one hundred years of Chinese Revolution, Born Under a Red Flag, details the shift from agricultural economic zones to manufacturing in terms of culture, politics, and economy. This is echoed in reading as well and evaluation of whether the Chinese economic transformation is a miracle or economic fact, and whether it is reproducible, determines the direction of the burgeoning economy. That is because the centrality of the developments in China actually mean that the government will have a role in determining how the global economy changes in consequence to success there.

Discussion of the incipient role of China on the global stage would be ungrounded without understanding the provinciality of the recent past. Watching the development of China must have been something similar to watching a history of economics. Towns without even a scale or a market for decades have now seen their young living in new skyscrapers in urban centers, and even engaging in political activism.

Many decisions by government and private interests alike have been correct. The Chinese transformation was ignited by a decree allowing the agricultural workers to keep a portion of their crop after paying a quota to the government. All of the agricultural zones immediately reported bumper crops.

This is an example of incentivization that has supplanted the iron rice bowl or, more frequently, impoverishment of the past. These policies were not limited to humanitarian concerns, or forced exclusively by necessity. Incentives were extended to foreign companies as well, which made China considerably more attractive for direct foreign investment than abroad or local opportunities.

In this sense, the Chinese government helped to foster the development of the economy through careful micromanagement of resources and policies. The policies of incentivization has proven to be effective and have been thoroughly implemented. It has also helped level the playing field when the competitive advantage lies against Chinese firms in terms of technological prowess and labor costs. Excessive costs from protectionist policies are mitigated by shared profits from the massive development found later.

Even as the source of funding for industrial expansion has turned outward, the horizons for consumers have effectively been focused inwards. This is both encouraging and worrisome. The indication would be that there is proof here of a reliance of the consuming class on some domestic production, or stimulus provided there. As long as Chinese growth is limited reliant on Western consumption and progress, any development into industries which are efficient or operate at parity will begin to limit the demand for Chinese goods.

This is particularly concerning now because with the development of a Chinese middle class, a wonder in and of itself, there is evidence that the growth of that middle class does not match that of the producing class. With available foreign demand held constant and limited to factors outside of the Chinese government’s control, competition for this demand has become increasingly fierce. The evidence for this is apparent in the politically and geographically motivated DFI of the last decade from China.

The manifestations of the middle class go beyond increased standards of living, refrigerators in the home and the like. It is a result of a massive investment in infrastructure which has completely rocked country and city lives socially, politically and economically. Skyscrapers, highways, and migratory workforces that come to the cities for portions of their lives all typify this development. The Chinese middle class must now also compete with nations who have sustained such lifestyles for centuries for patents, efficiency, and resources.

There is no word for sustainable growth. Optimistic goals of maintaining continuing increases in growth have already failed. That is an indication that the limits of easy expansion are already being neared.

There are three factors which play a role in the approach to these limits. Firstly, the economic factors of production which were employed by foreign nations that China now makes use of are being exhausted. Secondly, supply for foreign nations can only be necessitated by the rate at which those developed economies can grow. Finally, competition which arises may pose the same or a similar threat to Chinese firms.

Even if emerging markets are not more efficient or cheaper, capitalists in the West are sure to know that fragmenting a strong union can be in their interest despite a moderate financial setback. It is also worth noting in conclusion that it may very well be that the financial recession saved the Chinese economy from immediate ruination. Competing emerging markets were devastated as Western nations gobbled up stimulus money and FDI, at their expense. While there is no point in retrospectively imagining what might have happened, it is interesting that those countries had about the same chance of taking on the Chinese economy as China ever had at taking on the Rust Belt, but unlike America which has an established and strong middle class, loss of manufacturing in China would certainly result in a humanitarian crisis of the sort the world has never before seen.


Lingering Problems: Corruption and Bilateralism


Interestingly, in China, with a communist government, a bad work ethic can be a crime against the state. The policy of the iron rice bowl has also created a crisis of low quality production. Attempts to regulate this have been either misdirected, during Deng-era crackdowns on crime, or inefficient, as seen in subsequent redundancies in quality checks.

In a certain way, these policies are being recreated in trade agreements. By overlapping Free-Trade Agreements with bilateral trading incentives, a “noodle-soup” syndrome has arisen which is of great concern to the international business community. This is the sort of threat to long-term security which has characterized foreign hesitancy to invest in China.

To understand this hesitancy in the future, it is necessary to look at the past once again. During the rise of the current government, many teachers and those labeled corrupt were shot. Students were sent to the countryside, which crippled not only the Chinese academic system, but those throughout satellite Soviet nations which had some level of interdependence. The extreme reactionary behavior with underlying motives of consolidation of power is not completely departed and both in Tiananmen Square and in the execution of thousands of criminals in the wake of a threatening “gang of four”, violence has been noted with concern by the rest of the world.

Today that history of politicized violence translates into regional friction and unwillingness for other nations of the world to allow their educated to participate in research in development or pursue contracts in a country with a government that has eliminated such assets in order to maintain control in the past. Of the three barriers to the development of China into sustainable growth, the inability of academic structures to build confidence in foreign talent or to incentivize local brainpower to stay in China is probably the most concerning. While membership in the World Trade Organization has lended some credibility to the endeavors of the government now, such gestures of goodwill are betrayed by a recurring wheel and spoke nature to regional trade agreements.

This lingering problem can be addressed in the form of increased institutionalization throughout the nation. Sent down youth did return to the cities and liberalization commitments, though shallow, are present. The proof will be in pudding as the case were, and that will be indicated by rising levels of development, and with them competition with Western middle class industries and a rising DVA.

Other issues remain in the form of ensuring that China peacefully occupies its transitory role without eclipsing existing economies or fueling competition within economies that are close geographically or politically. The crisis of 2008 cannot be emphasized enough as an indicator of the sensitivity of this topic. Regional investments not only threaten China’s position as the world’s greatest exporter, but also threaten to cut into the domestic market.

By investing in developing countries abroad and developed nations both of those threats can be effectively eliminated. While the USA went through a position in 2009 that was similar to the Cultural Revolution’s “sent-out” youth programs by cutting out student loans, the position was short-term and institutions were neither eliminated nor shut down. Progress continued on a skeleton crew basis, an indicator of financial turmoil and not of fundamental political change. This means that American consumerism will continue to be a determining factor in Chinese economics in a way that China did not develop into a viable partner for the Soviet Union after World War II.

Now that China has developed a middle class, it must navigate a treacherous path of maintaining the barriers which prevent local or even foreign manufacturing from serving a similar impact to its economy as the USA and Japan suffered with the emergence of China. This may necessitate re-evaluation once the development level in China is equal to the United States today. A good estimate for the time frame involved here should be found in DVA.

Provided that the stumbling block provided for emerging economies has set them back in a significant fashion, with this 600 billion dollars in re-allocated investment that had been expected in those economies, for several decades, analysis of the DVA to create a time-frame for China’s chains to manufacturing can be conducted. It took approximately a quarter century for the DVA to rise from 25% to 50% in China. In order to be competitive with Western markets and allow encroachment on manufacturing industries without risking humanitarian disaster, the DVA must rise to at least 75-80%.

Unfortunately this level of increase in DVA in terms of total output represents a greater change than the development required to increase from 25% to 50%. This means that it costs more dollars and takes more time to acquire higher levels of development. Without analyzing production curves and assuming an equilibrium market for patents and technical advancements, it should take between double and three times the amount of time and resources to bring DVA from 50% to 75%. This is because a DVA of 25% only represents under 40% less total output than 50% while a DVA of 75% represents 200% more output than 50%.

If China has the 50 years necessary to reach the development of the United States, and the domestic or foreign investment needed to do so, then success should be guaranteed. A middle class will emerge and be well established. Competition can begin in earnest with Western institutions, and growth as well as development in regional and foreign markets can be encouraged. Ironically, it is the very sources of capitalism which have enabled this progress which threaten the Chinese economy the most.

Given the opportunity, these sources of capital will give no regard to humanitarian concerns and divide the monopoly on manufacturing enjoyed by China simply to gain a greater bargaining power. There will be no sense of security or of loyalty in such a situation. This is the risk created by investment in Western economies and should be treated with as much caution as an investment in regional economies. The latter is substantially preferable, for while the Chinese military may not be able to enforce political objectives in the target of such investments, security in such investments is high, and there is another layer of opportunity before money goes into economies which lie in direct competition with Chinese manufacturing.

The bottom line is that any political action which can be taken to ensure investment remains domestic must be taken, or the risks are an entity in the rest of Southeast Asia, which is as large in population if not development as China, emerges in competition for the same limited role as China. 2008 was not a solution, but a mere stumbling block, and impediments to development and the barriers which arose as a result could be removed as quickly as in a decade or take as long as half a century. Which one of these actually results will likely determine the long-term success of the Chinese economy, and will likely be the result of carefully targeted investment by the global community as well as the Chinese government.

The Russia of V. V. Putin

The Russia of V. V. Putin

Paul Andreas Fischer

6/16/2016

Shirley Gedeon

The Russia of V. V. Putin


Centrally administered socialist states replaced democratic divisions for regional conflicts. Ultimately it was seen as a failure, with GNP across Eastern Europe dropping below that of the United States, though it did allow some substantial growth. The reasons for this failure will be seen as a combination of the motivations and consequences of such an economic system in Soviet Russia.

There were multiple debates which preceded decision making, and which later bound the workers to their decisions. Most frequently these would take the form of five-year plans and determined important factors such as the rate of growth and technological investment. While some sectors, such as mining, did keep up with the United States, the reality of the Soviet failure to provide for citizens can be found across the economy. Japan and America combined had a fifty times greater hold on science and academic intensive industries.

Stalin believed that the internal logic of capitalism would exploit labor. This drove the attempt to mirror growth in capitalistic countries. Inevitability of communism played a key role in this belief, and the losses which were incurred by forcibly or prematurely establishing a command economy would be offset by greater losses if this were not preconceived. The paradox of how to create an industrial technologically advanced economy became a question for Soviet leaders.

New economic policies also focused on collectivization of land. The goals of the Party could not be achieved under post-war circumstances, operating at 5% pre-war levels, and so denationalization of small scale production occurred in a series of decisions known as New Economic Policies (NEP). This was effective and saw the rapid expansion of production. It was not as effective as the command economies which saw 50 years of technological progress attained in a decade within the Soviet Union, a fact proven by the defeat of as well as by virtue of invasion by Nazi Germany, among the leading capitalist nations in the world, a couple decades later.

A grain supply crisis by 1928 followed expulsion of the left, the Trotskyists, and foreign relations deteriorated. Success of nationalization efforts under those dire consequences lead to a great realignment. This lead to the year of the Great Break, in 1929. This was the source of Stalin’s emphasis on increasing the scope of five-year plans dramatically. His emphasis on command economies would be combined with fear of war, which was dramatically foreseen.

Soviet planning was successful in its creation of technological and industrial growth amongst an era of crisis. A long-term period of peace, embodied in the Cold War, however, saw the expansion of a shadow or black market amongst industrial goods. Since liberalization of price markets, the Russian shadow economy has grown from 15% to a quarter or perhaps as much as 40% of the overall economy. It is not, as was the case during command economic eras, concentrated in industrial sectors. Deep problems with Stalinist economic systems began to emerge after the war period, and one of these was removal of k/n ratios meaning that normally benign corruption struck into military or industrial bases upon which the Russian economy was dependent.

A break in this rule was found in the aggressive campaign in Afghanistan. With troops only coming home in 1988, the drawn out war nearly exhausted the superpower’s capability to succeed. It is ironical to watch the dominance espoused by Kruschev among third world countries to have crumbled to this point. After years of funerals for leadership, the Soviet Union’s last “strong man” dissolved the union following secession of the Ukraine and worldwide velvet revolutions. This is a second point, that communism, which appeared to be successful in the threat or reality of war but lost ground during peacetime, would also crumble partially as a consequence of military operations.

The Helsinky conference is perhaps the beginning of the manifestation of what some saw as the end of the Soviet Union as early as Hungarian protests in 1968. In 1975 the agreement signed there forced recognition of human rights violations and ensured prevention of exploitation of workers through political dictatorship throughout member states. The way that the Russian economy was prevented from continuing the unbridled success that lead to the rise of the Soviet Union is the cause of this symptom of political malaise.

When Marango described the fall of the Soviet Union later, reference is made to the fundamental issues with communism as an economic system and the inconsistencies it creates. The same argument for the existence of government among economic systems also defeats efficiency of communism except in very particular circumstances. This argument will be summarized shortly.

Certain freedoms exist which the government has neither the capability nor the interest in being involved in. On another end of the spectrum, there are industries which undertake to provide services in which government presence is necessitated. Within this spectrum, every industry requires different levels of government involvement. This is represented by the fact that not all taxes are excise taxes, but vary based on income or revenue both in total amounts and proportions of income paid.

Communism was successful in the face of a total war, because in that economic period, with a grain shortage, the involvement of the government in every industry became necessitated. Micromanagement was an asset, and while a free market may have succeeded as well, even the option of failure in any of the industries would have represented a destabilizing impact on political and social structures. During the Afghanistan war as in the post-war period there was a greater need to emphasize government control of certain modes of production.

This risk of shadow market equality can still be seen today, but it should be argued that growth of the shadow market in Russia is healthy because it represents a movement from industries critical to health and security such as food production and industry into those less critical. In other words, it is not that there was too much waste occurring, but more that it occurred in areas where such waste could not occur. During a period of crisis, the government could ask for near complete obedience, outside of those conditions such a request lead to uprisings. Finally, as with any such capitalist economy, incentivizing the movement of the shadow economy requires an incentive, traditionally reflected in interest which banks offer to firms in order to invest their profits in other industries and here seen in the overall growth of such an industry.

A new form of leadership has arisen in Russia, and with it have come a resurgent emphasis on some very old traditional values. The siloviki are those with security backgrounds, which include V. V. Putin. These are supporters generally who share belief in persistent existence of hierarchy. As Russia’s equipment ages and the share of GDP devoted to the military has dropped, it is important to understand this terminology as a manifestation of the re-emphasis of political goals. Rather than losing importance, removing control from regional governors was critical to siloviki as well as Putin’s early agenda.

One interesting aspect of the siloviki is whether the eight-fold increase among political elites of this group is in spite of, because of, or causal to the rise of cronyism and oligarchy in Russia. Cronyism is the use of nepotism or familiar ties beyond quid pro quo into the realm of fraud. Oligarchy seeks to justify these objectives by establishing this method of control as the political status quo. “Taming” these forces have made the tools, such as export revenue taxes, of soft authoritarianism usable.

Soft authoritarianism has arisen in Russia as a reaction to these two forces coming in conflict with strong nationalism. One tool which was used to concretely describe this change was the Gref Plan, already in place prior to Putin’s election. Redefining fiscal federalism only went so far, though, and relative control or stabilization of industries through the Gref Plan promised to destabilize the economy. The answer appeared in the United Energy Systems reform and dissolution.

The targeting of natural monopolies in the electricity sector remains among the longest standing successes of Putin’s presidencies, and the market was liberalized in 2011. Creation of competition in markets has been seen in dominant industries such as the railways as well. Ending cronyism among the Gazprom and Rosneft oil and gas industries has become a dominant feature of the presidency of Dmitry Medvedev.

After eight years of Putin’s leadership, the constitution necessitated leadership change. At a critical juncture for many political goals, and unwilling to see those goals go unfulfilled, Medvedev was found to allow Putin to retain a position of leadership without breaking his norms of soft authoritarianism. With public support in excess of 80% for most of his presidency, it would have been hard to find any suitable candidate outside of the president himself.

The most important aspects of his administration also build on Putin’s own goals. Russia was once the IMF’s greatest debtor, and during the period was able to pay back all foreign debt. Foreign currency reserves, the warchest of a modern economy, had dropped to levels similar to a large corporation and have now been buttressed. Despite economic gains, the statement that presidency left was dominantly a political one, demonstrating soft authoritarian principles that would not give way to dictatorship.

Dual economic functions arose in many industries as an inheritance from the Soviet Union, and original liberalization of markets, including the oil industry, has given way to nationalization. Those responsible include Yegor Gaidar, one of the liberal technocrat from Moscow or, like Putin, St. Petersburg. Selections of such geographically and politically oriented individuals are an example of cronyism despite the resurgent siloviki class and reaction to Yeltsin era cronyism.

The bribe tax is a concept which has arisen under various conditions. Sutela points to abuses of market liberalization as impeding the stabilization which would have been the second step in the political transformation in the resurgent democracy expected from Russia. These include health hazards of dropping alcohol taxes and rule breaking in the corporate field. Others would point to the gutting of educational and healthcare expenses as a consequence of massive expenditures in waging war against Afghanistan.

The Russian economy is underdeveloped as a result of dramatic losses in the realm of intellectual property, as stated above. Even within the production efficiency frontier, however, there remains a dramatic discrepancy in levels of output. This is due partially to cronyism and pursuant economic policies. It is also a relative indicator of the cost of fighting the expansion of the systems of oligarchy which have become entrenched. The inefficient small-scale factories which are left over from the Soviet era are also fingered as a causal factor.

The bottom line, however, is that the massive credit which Putin’s regime won great acclaim, and rightfully so, for paying back was misappropriated. While the rating of Russia has increased by around 9 levels due to this progress in repayment, the fact still remains that the funds available were neither sufficient nor appropriately used to employ the full capacity of productive force, which could be massive. The majority of the factories are Soviet-era remnants, and frequently one factory cities dominate, with a quarter or a third of factories being built after 1992. This creates a picture of success, but obsoletion of manufacturing machinery has erased the gains of more efficient modern construction.

Russia’s primary source of revenue, as Europe’s gaspump, fails in contradiction to the primary sources of employment in the country. Because much of the product is prepared for export, the domestic market actually reduces income. That creates a unique economic situation. When employment rises, revenue falls and unemployment or lower levels of economic activity in various sectors of the Russian economy means a greater cash flow for the largest corporations, which are now publicly owned.

There is not a full explanation in the rise of corruption in the post-Soviet era which can be found there, and this should be considered the least of the symptoms of this critical paradigm. Failure to expand markets appropriately has other consequences, which one should look to China as a method of comparison. The excess of labor in China is a result of a different set of priorities. Wages there cannot go any lower and the price demanded can vary almost completely, this means that an increase or decrease in the population has virtually no impact on the function of the economy within practical limits, while every good consumed domestically will provide dividends abroad.

In Russia, it can be seen that conversely, wages and domestic consumption may vary greatly while increases or decreases in the price of oil have widespread repercussions throughout the world. Every barrel extra which can be exported increases the Russian importance in the world while the marginal price of oil is difficult to increase as a result of domestic consumption increases. This creates an incentive in Russian economics which may date back to Soviet era relationships with client states in Eastern Europe to eliminate domestic consumption by distribution of rent across populations. This economic anomaly or irregularity may also help to explain how the Soviet Union was able to maintain competitiveness for such an extended period of time.

Rosneft is the Russian oil producer which has become the subject of scrutiny and nationalization in recent history. It is an oil giant, and has a history with partners such as Norway’s Statoil and England’s British Petroleum. They are frequently the subject of political thrusts, and this can be seen in a recent press release that features a picture of Vladimir Putin in which concerns for global oil reserves are made clear.

While the Italian interview details a recent potential discovery of 100 million tons of oil equivalent, a finger is pointed at the United States for dropping oil production, which has lead to the recent report estimating expiration of oil supplies in the near future. Igor Sechin, the CEO of Rosneft, announces pleasure in the oil discovery but is concerned about the future. He is a prime example of the expansion of the siloviki class among business and political elites. This can be seen in his position in Moscow under Putin.

The alternative to this source of oil, both politically and mechanically, would be Gazprom. Efforts to subdue the giant, founded in 1989, found themselves in a greater quagmire of issues for various reasons including those political. The bias in political stories around the company also varies dramatically from that authorized by the nationalized Rosneft. In one article from the New York Times, European nations are depicted as standing firm against bullying efforts from Russian firms, including Gazprom. Proposals included in consideration are limiting supplier shares to 40% and establishing a Nordstream pipeline to bypass the Ukraine.

The purpose of such legislation would be to avoid a repeat of the Gas Wars of 2006 and 2009. Today Gazprom provides ⅓ of the gas to the European Union. This brings parallels to regulatory action in the news from the Gas Wars in which titans of Russian industry were actually incarcerated, frontlining some newspapers with mug shots or photos of the executives in prison garb.

Finally, there is the future which is seen perpetually in uranium. While the world’s largest producer of the energy is Khazakstan, Russia remains a premier supplier of the product. Nations such as France depend nearly entirely on atomic power for energy concerns. Along with coal and hydro power, uranium represents a reserve of energy which is substantial beyond the economic capability of the Russian state.

Some of this is left over specialization from the Cold War and client states, but most of this reserve is unique to Russia’s situation. The reserves and production are augmented by decommissioning nuclear weapons, which should be finished by 2030, and provide further sources of supply. With his master’s in mining, these are concerns which Putin is specifically able to address, and he has used his expertise to win big political victories in these economic fields. If his goals are attained, the massive increase in nuclear power generation may be the greatest and most dramatic legacy of a Russian leader since the remilitarization efforts which supported the Vietcong in Southeast Asia.

Response to the End of Free Markets

Response to the End of Free Markets

Paul Fischer

Comparative Economics

5/28/2016

Professor Shirley Gedeon

 

Rise of a New System, Response


The Ten Largest Corporations

Corporation Base of Operations Ownership*
ICBC Xicheng District, China 1
Construction Bank of China Beijing, China 1
Agricultural Bank of China Beijing, China 1
Berkshire Hathaway Omaha, Nebraska, USA 2
JP Morgan Chase New York, New York, USA 2
Bank of China Beijing, China 1
Wells Fargo San Francisco, California, USA 2
Apple Cupertino, California, USA 2
ExxonMobile Irving, Texas, USA 2
Toyota Toyota, Japan 2

*1 – State Owned 2 – Private Corporations Traded Publicly 3 – Privately Held Corporations

Source: Forbes Global 2000 (note: Forbes Global 500 ceased in 2003)


The Ten Largest Nations in the World (Aggregate E. U.) by Total GDP, 2014

Nation GDP (US billions of dollars)
European Union 18,510
United States of America 17,419
China 10,354
Japan 4,601
Brazil 2,417
India 2,049
Russian Federation 1,861
Canada 1,785
Australia 1,455
Korea, Republic 1,410

Source: World Bank

Multinational Corporate Growth and Regulation


The numbers and size of the multinational corporations have multiplied enormously. This is reflected both in raw data as well as media coverage of that raw data: the Forbes magazine stopped covering the top 500 corporations just over a decade ago and established the new global 2000 list which is annually produced. Metrics critical to analysis of markets have now ceased to be relevant.

Expiration of media coverage and attention on a select number of keystone leaders has not occurred and this change is due to growth among multinational corporations, and not to a fundamentally unanswered call for comprehensive analysis. Such a need would be expressed during a point of rapid economic contraction of the sort not seen in modern markets. Justice is contemporarily meted out by the invisible hand of the free market, which has historically dominated even the mixed markets of today and created a low level of necessitated oversight or analysis. That is reflected in the rapid expansion of the numbers of multinational corporations by the tens of thousands in the decades after 1970.

There have been changes to the political make-up of the nations which corporations that play a role in the world market are based in. This is a result of both geographical shifts of markets as well as additive gains to extant public markets by authoritarian or hybrid democratic corporations. Substantive indicators of this change in market have become resurgent in the last decade.

In the decades prior to this the top ten corporations were generally publicly traded and read like a grocery bundle of the average American consumer. Today the list stands as a reflection of the near equal mix in the world’s population of those living in free democracies versus hybrid-democratic and authoritarian states. The extreme spreads of authoritarian markets, in which monopolistic behaviors are the norm, translate to fat tails and require a greater relative sample size to gauge efficacy and trends. It has already been established that the mechanisms of evaluation have remained the same after accounting for growth in terms of markets and numbers of multinational corporations, shifting popularly in media from 500 to 2,000 in the early 2000s.

Market inefficiencies are not to be expected as a result of this disconnect between consistent levels of analysis and changing political backgrounds extant in modern markets. There are two phenomena which can be identified which play a role in ensuring this: liberalization of existing free markets and unification of those markets. While carefully engineered corporate structures have entered the global economy as a result of decreased transportation, communication, and commodity prices the political setting for extant corporations has also dramatically changed.

The state may have begun to play a greater role in the United States of America during the recent recession but this concludes a long period, which continues today, of lowered levels of interference, engineering, or support. Member nations of the European Union as well as other free democracies globally have seen dramatic movement towards a libertarian utopia from a vision of a communist utopia (not to be misinterpreted that either would occur under any circumstances naturally). Free democracies globally have found ways to exert greater levels of freedom within their markets.

European markets also reflect well the trend of existing democratic nations towards greater unification, again noting some breaks in application to the United States. While not a new trend, with foreign corporations first challenging American dominance in the middle of the Cold War, it is one which had accelerated in recent decades. This is found in the sudden presence of a European economic power unrivalled since the colonial period, and is a change which must be considered in evaluating the levels of analysis necessitated by markets and is consequence to enormous levels of foreign direct investment across the globe.

State Capitalism

In the twenty-first century a distinct form of economic engineering has emerged which is individual to nations that embrace it that is known as state capitalism. This is a trend independent of socialism in which industries are engineered by the state. The outcome is a political victory for the state, which ensures a similar stability and has been seen in socialist domination of oil-producing nations including Venezuela. Bureaucratic control of certain industries ensures that the market is generally free and limits the exposure to government interference by any industry. A short period of interference may be a success politically and boost stability at a minimal cost to the industry, but a prolonged period without a commitment to public resources could transform into a liability for both state and industry.

Having described state capitalism, it is now appropriate to describe the geopolitical effects of free markets, perhaps in previous decades brought to a point of liberalization which is inefficient given minimal costs of regulation and the capacities of the industries, such as media earlier discussed, that allow regulation. When nations with free markets adopt a state capitalist stance, it may be more threatening to authoritarian governments even than a free market. The latter governments are incapable of demonstrating compromise and so are unable to reciprocate the move. This also gives the capitalist side of state capitalism a permanence which subverts authoritarian intent to spread.

On a final note, it is also worth exploring the insulation state capitalism provides to truly free markets. While buffer zones may be some sort of a defensive maneuver, it is also possible that uniform state capitalism may bring more hybrid democracies out of the functional norms of authoritarian states, or from under authoritarian control. That is an approach in which state capitalism is not the answer to preserve free markets but instead one of the many mechanisms described above which determine the actuality of regulation and the nature of markets. Misinterpretation of state capitalism as an escape route rather than as a shield could be fatal for an accurate economic forecast; the means used by capitalism for preservation and expansion cannot by definition be singular in nature.

Brief History to Capitalism – Response and Summary


Early economic theory is rooted in liberalism as an extreme reaction to the oppressive nature of feudalism. After many years of serfdom and servitude, which provided security at a steep price in terms of goods and liberties, the industrial wealth brought extinction to manorial systems of commerce. Limits and cautionary trends were established almost as quickly as the concept of capitalism was established. There are two primary sources of this: foreign intervention (much of the world still lived under manorial systems) and, later, actual necessities for regulation as monopolistic corporations arose out of cronyism in postwar America and other nations.

That which provided the greatest impetus for growth during the period of capitalistic development was the elimination of mercantilism by establishment of fair global markets and currency exchange. Nations relied on mass media and fair elections to propagate control, rather than on manipulation of markets or winning of gold in wars or by other means. Elements of mercantilism remain. These include using economic control for domestic political victories and the importance of maintaining a favorable trade balance.

Use of foreign policy to protect international economic interests also remains a critical part of the government’s role which remains today. The beneficiaries of such remnants can be individuals or institutions. How this is integrated into state capitalism will be examined next.

Definition and Expansion of State Capitalism


The difference between state capitalism and free-market is the individual nature of state capitalism. It should be possible to establish some marking traits of at what point state capitalism emerges from a free-market economy or from one attempting utopian communism in a similar way to that which it is possible to distinguish mixed market capitalism from anarcho-capitalism. State capitalism has an organic relationship with but is not synonymous to authoritarian or command economies, and is instead best described as a tool which can prevent free-markets from collapsing into such economic conditions as to necessitate total government intervention or which can bring a nation towards a command economy by mechanically emphasizing the role of the government.

It is best used when particular nadirs in marginal costs of regulation occur individual to nations, which is why it was not effective (or extant) in the middle ages when technological progress was in stasis or during the early industrial revolution as technological progress outstripped all nations ability to develop for around a century. One could describe national socialism in this sense, though dividing markets into compartmentalized unregulated industries turned out to be an abysmal worst of both worlds scenario. Welcoming foreign investment from corporations such as Fanta, already a subsidiary of Coca-Cola, meant that these divisions, perhaps enough to limit domestic investment and allow rudimentary engineering of the economy, yielded bizarre results as certain industries became completely flush with foreign investment and attempted to project that investment upon others.

Just as state capitalism is a tool between command and free economies, there are many tools which determine how the state capitalism operates. These intermediaries include national oil and gas corporations, state-owned enterprises, privately owned national champions, and sovereign wealth funds. The first can be used to show the nature of resource nationalism and the last allow western governments to achieve political goals with economic windfalls from developing and emerging countries.

National oil and gas corporations provide fundamental resources. As state-owned enterprises have entered and dominated the global reserves, multinational corporations such as ExxonMobile, a top ten company, are reduced to providing auxiliary roles in those markets. Even though the state-owned companies can sell on the same market now, competition is prohibited, creating a favorable disequilibrium for them. This is evident from food production to uranium extraction so the trend is by no means limited to oil.

The favorable disequilibrium created by the companies is nullified by the role of state capitalism, which subjects those companies to unprofitable decisions, such as gouging prices (and customers) outside of the realm of rationality in order to achieve national goals. Profits from these sources play a direct role in the development of sovereign wealth funds. Such funds are ways for free-market governments to exert economic influence like an authoritarian state as well as a way for state capitalist governments to extract funds from profitable state-owned businesses.



10 Largest Commodity Financed Sovereign Wealth Funds 2016

Sovereign Wealth Fund Origin Nation
Government Pension Fund – Global Oil Norway
Abu Dhabi Investment Authority Oil UAE – Abu Dhabi
SAMA Foreign Holdings Oil Saudi Arabia
Kuwait Investment Authority Oil Kuwait
Qatar Investment Authority Oil and Gas Qatar
Public Investment Fund Oil Saudi Arabia
Abu Dhabi Investment Council Oil UAE – Abu Dhabi
Kazakhstan National Fund Oil Kazakhstan
National Welfare Fund Oil Russia
International Petroleum Investment Company Oil UAE – Abu Dhabi

Data: SWFI 2016

Export and natural resources do not provide substantial cash flows for a free-market, so the way that it is possible to exert such influence as those funds allow is to provide direct funding for them from taxpayers and federal reserves in foreign currency. This can be used by authoritarian governments as well under certain circumstances. Such funds are tremendous economic opportunities and have existed for many decades. Public use of the term is barely a decade old, which predicates the secretive nature of the largest and earliest funds.

Many of the tools described serve two functions. In the same way that sovereign wealth funds have allowed investment of otherwise stationary reserves in free-market economies, authoritarian states have found ways of using these to their advantage by making them secret and investing heavily in organizations such as Blackstone. This money then circulates in a normally volatile market, but is controlled by an authoritarian state, giving undisclosed insight as to the nature of market developments. The scale of this development is dramatic: by the late 2000s there was more invested in those funds than was collected by the American government from taxpayers. OPEC is another example of how embracing economic liberalism can help state capitalist economies, rather than moving a nation towards free-markets.

State Capitalism Around the World – Response


Vladimir Putin remains a dedicated state capitalist. His work is described as a use of state capitalism to enforce potential goals for his political party. State capitalism emerged as a scapegoat in early Bolshevik Russia, but has today been the means by which the formerly communist juggernaut is able to swallow capitalism in general. A certain level of repression has been present, with a very distinct reaction compared to such Chinese violence.

Much of the nature of state capitalism in Russia is personality-driven, and Putin has had an enormous individual effect, combined with publicity and high approval, on the country as President and Prime Minister. It is clear that Dmitry Medvedev has not deviated from the course already blazed.  Repression has not been limited to protesters, and was also used to establish and protect Russian state interests in industries, allowing foreign companies only to hold a stake with a regular loss.

Tactics employed by state capitalism under Putin include armed police battalion deployment, the arrest of former oil and gas oligarchs, and establishment of restrictive trade barriers. Support for the protests was provided by the Communist Party and the oligarchs found solace among foreign Western investors who had hoped to grab Russian oil interests. Tariffs will be addressed in greater detail shortly, but when a trademark of state capitalism includes the use of funds and economic policies to win political victories, tariffs eat state funds and erode political goodwill.

One thing to add is that state capitalists to use sovereign wealth funds to undermine foreign regulations and engineering of markets or to break them in their favor. The ability of China to use this tool, with a few billion dollars, to exacerbate the economic crisis and ultimately require around 600 billion in rescue loans, is described with an account of Blackstone. During the financial crisis, these sources of cash could also be used to keep nations afloat and determine the nature of the recovery.

The concept that Russia and America have traded nuclear weapons for such reserves in foreign currency is indicative of the general nature of a shifting geopolitical goal. Both the Soviet Union and the United States swore to never use violence to obtain goals during the Cold War. That has today become a reality, and with an emphasis on the lack of an actual national opposition in the Iraq and Afghanistan wars, was a reality by the time Bremmer’s wrote his book. State capitalism has been used by Russians and Americans to both undermine and uphold free markets in recent past.

Response to the Challenge


The challenge is described as threefold in nature. The most important challenge being faced is that of the international tariff. By definition, this represents the sort of state intervention which in a free global economy, nearly always results in market inefficiencies. Even as nations pledged at the G20 summit not to impose tariffs, dozens were put in place during periods of economic turmoil.

Grounds for the decision are found in the security provided by an effective system of tariffs. It is harmful to facilitate competitors and in a competitive market governments will seek to maximize opportunities for growth in industries which pay taxes and will seek to punish those that pay taxes elsewhere. At the risk of unemployment and price disequilibrium, a government will destabilize some markets given the opportunity to.

That opportunity is provided by state capitalism, in which engineering can also include deconstruction. The liquidity of funds in a globally backed system of banking gives assurances that resources will still be available and investment will continue after tariffs are imposed. This is also the phenomenon which makes them particularly ineffective.

In state capitalist countries the imposition of a tariff essentially acts as a boycott or prohibition, and the investment is made anyway, and the chain of expenses, as well as growth, before the Federal Government collects the sum entirely back is dramatically shortened. This is because the economy is engineered and there is not a system for substitution, which would undermine the tariff. Truly free markets do not suffer this issue as severely, and require broader and more unwieldy tariffs to truly create a disequilibrium in the economy.

The same way a nation might use regulatory or police action to counter price gouging, foreign competitors selling a product cheaply can be countered with tariffs. Examples include the United States’ tariffs on Brazilian sugar and Russian tariffs on imported automotive parts. These are useful choices because political opposition and demonstration resulted in violence in Russia while the American tariff proved ineffective. The removal of farm subsidies and dramatic drop in food surplus by 40% in recent years buried American attempts at protectionism for the agricultural industries.

It appears clear, then, that in order to break a state capitalist economy it would be necessary to provoke widespread tariffs within that economy. This allows elimination of foreign reserves, sovereign wealth funds, and guts oil or resource companies. That happened in China as state-owned oil companies were subject to price ceilings and unable to declare losses, nearly leading to the nation’s dissolution around the time it joined the World Trade Organization and gained the security of investment. The shock was not sudden, however, as a similar crisis in oil in which Russia took a tariff in order to see America squirm, laid the groundwork for that nation’s ultimate dissolution and China remains in good, if not yet a superpower, standing.

Source:

Bremmer, I. (2010). The end of the free market: who wins the war between states and corporations?. European View9(2).

Could Failure to use Marijuana Responsibly for 5-6 Years as an Adult Pose the Same Mental and General Health Risks as Childhood Use or Even Failure to Exercise?

Could Failure to use Marijuana Responsibly for 5-6 Years as an Adult Pose the Same Mental and General Health Risks as Childhood Use or Even Failure to Exercise?

  Recent research has confirmed findings from the early 2000s which showed an increase in IQ among responsible adult users of marijuana in comparison to those who never used cannabis. While childhood use has been shown to be indicative of negative health consequences concurrent with reduced prolactin levels, looking into the effects of marijuana as a predictor or causal agent in positive health effects outside of the realm of cancer prevention has been relatively untilled ground. That builds on previous research which explored the possibility of using cannabis to reduce levels of dependence on other products with responsible adult use, even as childhood use has been proven to negatively impact the odds of responsible adult use. This paper will review some of the basic facts which longitudinal studies have demonstrated as an effect of responsible adult marijuana use, and how those effects can play out on a society while evaluating some very glaring inconsistencies or limiting factors which have presented.
  The impact of IQ on income and social class has been long established and is well publicized in today’s highly technological global community. Less known are its predictive values for life expectancy and more severe mental health complications. Childhood IQ can predict mortality between groups with great discrepancies (Whalley). Lower childhood IQ has been associated with many mental health issues, though it has been shown to predict a lower rate of adult mania, an interesting anomaly which may merit some attention but does not disturb the nature of this trend (Koenen). While the impact of changes in IQ from adult or childhood use of marijuana, whether positive or negative, on life expectancy are minimal, paling in comparison to regular physical activity, which can add as much as a decade, or somewhat akin to tobacco use, shown to remove 1-2 years (Ferrucci), among a population these changes can demonstrate a viable advantage which should not be overlooked.
  A horizontal shift in IQ can double the highly gifted and geniuses among a society with an average IQ of 98, such as the USA, and will continue to produce significant gains as IQ increases. Massive gains have been seen in the past (Flynn), with many factors that can be held responsible from removing environmental toxins such as lead to increased availability of educational factors which can play roles. The gains which are being described have yielded greater total and proportional numbers of college and high school graduates, which is yielding advantages to all spectrums of society (Moretti). There is no reason this trend should not remain the case.
  Responsible adult use of marijuana has been shown to increase IQ in a causal fashion (Fried) in a manner equivalent to the decline in IQ associated with childhood use. Heavy use is here substituted with childhood use because of later research which showed that the probability of becoming dependent on marijuana are around half of that of alcohol at age 18 and virtually zero by age 21 (Chen). Recent research has shown that the increase in IQ is a causal consequence of cannabis exposure, and not one of a predictive nature, a conclusion largely apparent from research (Filbey). That was research which also helped to investigate some of the mechanisms behind higher brain functioning. This would appear to now be a manner of basic deductive reasoning to see that this increase in IQ also will give a concrete benefit to society with responsible adult use encouraged by the spreading legalization of recreational marijuana.
  Some problems have presented, however, and many of the same issues which have negatively impacted attempts to prohibit cannabis now impede an honest recommendation of use for the purpose of mental health at least, though the anti-cancer properties appear to be solid in nature. Many mental health disorders are accompanied by self-inflicted harm, hard drug use, and other certain outcomes which leads to a negative stigma and a serious approach towards treatment. Early childhood use has been shown, commiserate with a declining IQ and mental functioning, to increase such negative outcomes along with other negative physical and mental effects including decreased mortality (Manrique). Interestingly, however, responsible adult use has “only” been found to result in equivalent outcomes among responsible adult users as those who had never used in all methods of evaluation including hard drug use and mortality from all causes (Andreasson).
The research outlined previously does not indicate any limiting factors which should be present in regards to mental health or life expectancy concerns: all countries involved in such research do have room for improvement which far outweighs any contribution from cannabis use of virtually any nature. It is unlikely that there is an organization responsible for the wholesale massacre of 1-2% of the marijuana using community, or slightly early termination of individual marijuana users that could explain the lost additional productivity, life expectancy, and mental health gains which are to be expected in any country, much less the developed countries where this research has taken place, so this particular confounding situation will have to stand as an anomaly or unexplained phenomenon. That statement may appear provocative and the latter precludes the former. Should the former be the case, the mental health gains would still be evident without a targeted shock among the mentally ill. There could also be an issue with multiple research studies, notably the work of Whalley, which would alter this conclusion should heightened IQ not causally impact greater life expectancies, or perhaps most likely, that the Swedish researchers led by Andreasson vastly overestimated the use of marijuana by the conscripts in their study, with heavy use occurring in childhood users but without the vast numbers of extraneous responsible adult users in excess of the childhood users which present in the USA, and naturally with a substance of the type. That is deemed as most likely due to the tendency of European cultures to expose younger children to age-restricted substances than in America, at least. The nature of a bell curve does indicate that the lower tail of IQ performance will demonstrate a limited effect on outliers with further horizontal shocks, so the failure to materialize significant declines in hard drug use or self-inflicted harm and other indicators of lower intellect are not outside of expectations and does not indicate confounding material or discrepancies in research.
Finally, some issues have been noted with application of the positive and negative health benefits of cannabis to adults from a financial perspective, in terms of productivity gained. While there is no question that the general economy has fared more effectively in a large part due to intellectual progress and increasing regulations which have made American children and adults healthier, application of this theory has fallen apart when applied to responsible adult users of marijuana (Cerdá). As a group, according to research, the increase in IQ should be easily described as an economic shock, giving a great advantage in terms of productivity and social class. Both of these are frustratingly missing after economic research. Unlike the discrepancy in life expectancy, and perhaps exacerbating that conundrum, there are pieces of information which present to address this situation. Because childhood and responsible adult use are not distinctions made previously in research on health care costs, it must be assumed that the costs of childhood marijuana users tend to be much higher as a result of marijuana dependence and psychological or physical manifestations of this. Therefore, research showing that cannabis users as a population have the same per capita health care utilization as those who have never used could be interpreted to show significant gains among the responsible adult users (Fuster). As health care can make up hundreds of thousands of dollars over a life time, and is among the dominant expenses both for an individual and for the government, this may be communication of the gained productivity from cannabis use to healthier lifestyles or investments, if not more financially frugal decisions.
The research is fascinating and demanding in nature. Seeing the demographic dispersion among groups of people after laboratory or controlled experiments which add a political or social aspect to the work is relatively rare. It can be concluded that responsible adult use of marijuana does indeed result in productivity gains associated with the increased IQ, and equal to the detrimental effects from childhood use. These gains in the current population of marijuana users, as a significant minority, are invested heavily into healthcare, though there is a low likelihood that this would continue with a regulated industry, while the trend may remain to some extent. In terms of life expectancy, the results are anything but clear, and this deserves further attention, investigation, or experimentation. While childhood users face increased mortality risks as expected, the responsible adult users live exactly the same lifespan as those who have never used. The 1-2% gap between expected and actual life expectancies is not explained by limits on health care returns: countries have greater life expectancies than the USA. It does not detract from the massive predicted and realized gains of responsible adult users of marijuana in terms of productivity and health care, or tarnish in anyway the great impact legalized recreational marijuana will have on the United States of America and the world in coming years.

References:

Andreasson, S., and P. Allebeck. “Cannabis and mortality among young men A longitudinal study of Swedish conscripts.” Scandinavian Journal of Public Health 18.1 (1990): 9-15.
Cerdá, Magdalena, et al. “Persistent Cannabis Dependence and Alcohol Dependence Represent Risks for Midlife Economic and Social Problems A Longitudinal Cohort Study.” Clinical Psychological Science (2016): 2167702616630958.
Chen, Chuan-Yu, Megan S. O’Brien, and James C. Anthony. “Who becomes cannabis dependent soon after onset of use? Epidemiological evidence from the United States: 2000–2001.” Drug and alcohol dependence 79.1 (2005): 11-22.
Ferrucci, Luigi, et al. “Smoking, physical activity, and active life expectancy.” American journal of epidemiology 149.7 (1999): 645-653.
Filbey, Francesca M., et al. “Preliminary findings demonstrating latent effects of early adolescent marijuana use onset on cortical architecture.” Developmental cognitive neuroscience 16 (2015): 16-22.
Flynn, James R. “The mean IQ of Americans: Massive gains 1932 to 1978.” Psychological bulletin 95.1 (1984): 29.
Fried, Peter, et al. “Current and former marijuana use: preliminary findings of a longitudinal study of effects on IQ in young adults.” Canadian Medical Association Journal 166.7 (2002): 887-891.
Fuster, Daniel, et al. “No detectable association between frequency of marijuana use and health or healthcare utilization among primary care patients who screen positive for drug use.” Journal of general internal medicine 29.1 (2014): 133-139.
Koenen, Karestan C., et al. “Childhood IQ and adult mental disorders: a test of the cognitive reserve hypothesis.” American Journal of Psychiatry (2009).
Manrique-Garcia, Edison, et al. “Cannabis use and depression: a longitudinal study of a national cohort of Swedish conscripts.” BMC psychiatry 12.1 (2012): 1.
Moretti, Enrico. “Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data.” Journal of econometrics121.1 (2004): 175-212.
Scallet, Andrew C. “Neurotoxicology of cannabis and THC: a review of chronic exposure studies in animals.” Pharmacology Biochemistry and Behavior 40.3 (1991): 671-676.
Whalley, Lawrence J., and Ian J. Deary. “Longitudinal cohort study of childhood IQ and survival up to age 76.” Bmj 322.7290 (2001): 819.

Changing Horizons as a Function of Limits on Certain Growth in American Higher Education

Changing Horizons as a Function of Limits on Certain Growth in American Higher Education

Paul Andreas Fischer

4/30/2016

Professor Anastasia Wilson

 

Changing Horizons as a Function of Limits on Certain Growth in American Higher Education


Student loans initiated at the height of the Cold War as a way of continuing private expansion of the academic system as government resources were gobbled up in the form of a developing arms race. These were successful, and allowed in a stagnant industrial economy, transfer of funds and resources to be reinvested into the expanding economy.  Government organizations were able to recruit and utilize graduates. The factors of production which were present in the previous generation fulfilled in spirit and reality the goals of the students in their educational system. While environmental toxins such as lead exposure decreased the available optimal brainpower of the nation relative to healthcare and other considerations, technological advances meant that the raw resources or intellect necessitated by such a massive expansion of the academic system were available.

The purpose of government involvement in the entrepreneurial industry is one which is meant to be symbiotic. As a solution to student debt, service learning programs unsuccessfully implemented in South Africa but more successfully implemented in the GI bill and Peace Corps in the United States will be analyzed. The aversion of state competition with the private sector will be seen to be critical to deconstruction of these divergent results. In the case of BEC, a state-run electronics firm in the 1970s, the company became a “training ground for engineers” and represents a trend which is emphasized in the role of higher education (Evans 1995, 130).

The presence of mass demonstrations on the topic of student debt today is ironical. The generation preceding the student loans had protested the failure to commoditize schooling, and these rights were closely tied in grade and high school to the feminist movement. Teachers had been only paid a token wage, prior to the expansion described during the next generation. This paper will identify the contemporary limits on growth in the academic sector after offering a selective review of how these limits were approached during the age of expanding student debt and under what levels of growth student debt can increase expansion, be forced to contract, or maintain a constant rate of development.

What Constitutes Interest on a Student Loan

Real interest rate is naturally inversely related to inflation during times of technological shock. Without a change in the factors of production necessitated by technological shock, inflation can occur without impacting output (Rudebusche 2010, 13). The nature of conglomerated series of loans, including student loans, have two primary determining factors in the amount individual holders of these endeavors can expect to receive in return for their lending capacity. Both of these play a role in the evaluation of the historical development of student loans as well as their current and future optimal interest rates.

Firstly, the amount of money supplied is positively correlated with the rate of return under normal economic conditions. More money, relative to the general economy, means a greater bargaining position and greater returns. With a smaller amount of initial capital relative to the emerging economy, expiring corporations or individuals can expect a lower return and bargaining power in negotiating interest rates. Secondly, the return which borrowers expect to receive from the funds that are made available is positively correlated with the interest rate. Exceptions to this rule can be made for the sake of security in investment, but in a combined loan setting, that factor loses importance.

Historical Application of Student Interest Rates


At the onset of student loans, the factors of production which were used to create the economy remained the same. This meant the resale value of these factors of production, at the time steel and oil, retained their relative economic importance. When expiring corporations or individuals paid taxes or went to banks with money to distribute in the form of loans, their bargaining position was relatively high. Students could be asked to share a greater part of the economic burden of training because forecasts to the nature of technological progress indicated that the factors of production they would need in the workplace were already extant, or at least cheap to build using resources utilized by the previous generation. This all resulted in mobility, though not a complete shift, of educational funding from government grants to loans (Subotsky 1999, 414).

What has occurred in the last generation is unprecedented in the history of industrialized economies, except perhaps by the progress from wooden looms and sailing ships to dreadnoughts and automatically powered factories. Students are being trained today so that they will build their own factors of production, which are more efficient and create greater wealth with a focus on innovation (Coad 2008, 646). More importantly, a different array of inputs are necessary to build the contemporary economy. As computers have shrunk in size and cost, while increasing in productivity, the value of the components which are necessary to maintain a certain level of output and growth has dropped. Where low-skilled labor was once a necessity, today the high-tech industries have made a higher education critical to the survival of an economy, or an individual (Berman 1997, 1246). Morphological change in the cross-index of resource utilization and resource arrays is a phenomenon which has had a significant impact on utilization of resources across many industries, indicated in the expansion of boundary roles in the modern economy (Aldrich 1977, 222).

The way this translates into actual student loan interest rates and returns as well as overall funding for educational endeavors can be seen with actual student debt data. From an initial system of higher education which did not include student loans but did not service all capable students, “within a decade average undergraduate student loan debt in 2002 was $18,900. It more than doubled from 1992, when it was $9,200” (Williams 2006, 157). This does not match with the models described above about interest rates and changing factors of production; the expansion of the academic sector to meet the new demands of innovation previously described does provide some offset to the evaluation. The discrepancy between relative initial capital provided and desired premium is the market inefficiency which is described in a contemporary setting by this work.

Use of Advertising, Taxation, or Economic and Social Policies to Confound or Exacerbate Results

The expansion of higher education in the United States has included significant advertising campaigns by corporations and universities to new consumers, who now, through student loans, have the capability of making such an investment. Universities prepare and evaluate a given product in the intellectual capacity of graduates. One of the best examples of the market inefficiencies in student loans is the changing rate of growth in student defaults, which matches the historical timeline for the economic switch to high-tech methods of production precisely (Hillman 2014, 173). Flatlining until the mid-2000s, the loans became impossible to pay back for an extra 5-10% of borrowing students. This is because the factors of production for the previous generations have changed dramatically, and the bargaining positions of the lenders have not changed in actuality with the relative importance of the goods, whether factories and methods of production or raw materials, which are being exchanged for a return on students’ productive capacity, now expected to be much higher and require different sets of inputs to previous generations.

Many universities receive a significant proportion of funding through government grants or programs, making issues of taxation appear to be irrelevant to this discussion. In such a subsidized system, however, in which the government enjoys a commensal relationship, dropping government funding actually amounts to an economic shock in the same manner that a sudden tax on any other industry could exercise. This is perhaps the most terrifying aspect of this research: a market inefficiency can be fixed with shifting economic horizons, through degrading or exporting factors of production and by limiting forecasts on growth by institution of economic policies to emphasize security. A strangling tax however, goes beyond this quid pro quo negotiation of relative bargaining power and could threaten to end academic institutions, as well as the government and industries reliant on the material talent produced in turn. In recent history programs including the Peace Corps and grant funding, lauded for their unconventional societal benefits (Williams 2006, 167), have regressed.

Even though research suggests, as pointed out earlier in this section, that the student default rates have increased despite demographic or socioeconomic factors, there are also economic and social policies which have been shown to play a distinct role in the nature of higher education. At first, this seems to subvert the nature of higher education in measuring productive and intellectual capacity of students as they are being trained. Dealing with the extremes of intellectual capacity, as higher education does, IQ plays some role in the eventual income and ability of students to pay back loans (Bowles 2014, 9). Education and parenting play a far greater role, however, and as a measure of success in accessibility, research shows that segregation is not appropriately decreasing (Ong 2013, 270), which as the academic system expands into new demographic markets at greater rates may explain how default rates may increase even as more funds have become concretely available.

Distinctions Within Advantages of Entrepreneurial and For-Profit Universities and Colleges

One method of maintaining the spirit and perhaps even the growth of the entrepreneurial university which is offered and proposed by Subotsky is the initiation of community-service learning programs. There are both positive and negative externalities which are explored in that research, and become apparent after review of research. The goal of “the academic, the practical, and the civic… few reach it” (Subotsky 1999, 428), which adds to certain liability in these programs when compared to inefficient methods of educational standards which have the security of proven benefits. Generations of students lacking boundary roles may face similar aggregate problems in accessibility and matching roles in the actual work setting (Aldrich 1977, 228).

The directional impact of an implied tax on higher education did not strangle the economy. Despite increasing student default rates, the total amounts paid back by all students are greater. This supports earlier analysis of an increasing economic potential in the new economy. There is simply a disequilibrium which has been created by the changing bargaining position of lenders and lack of government support to make up for this gap. In the work of Subotsky, South African schools are shown to represent an example of a situation where the “redistribution and reconstruction” aspects of higher education can be at odds with the nature of entrepreneurial universities necessary to ensure growth, creating a unique paradox which must be delineated within a larger American analysis, that can be found here, through the advent high tech industries and changing factors of production (Subotsky 1999, 412).

Lessons in a Developing Economy Contribute to the Solution in a Developed Economy


The nature of the solution to a coming, and many would argue already present, student loan crisis can be a combination of cutting interest rates and expanding community service programs. While many economic programs or policies may not work in conjunction together, the actuality of the relationship between these two would be certainly synergistic in nature. A negative example of competition can be found in COBRA, a state institution which began, “selling commodity hardware in competition with Brazilian firms” and crippling the motivation of growth in both fields after decades of high-tech growth in 1989 (Evans 1995, 129). It would take the Brazilian high-tech industry throughout the 90s to recover from incipient, albeit natural, corruption. Factors of production are critical in evaluation of such shifting models. 

In South Africa, the economic inputs have remained constant, so redistributing wealth while investing in entrepreneurial universities plays at odds with each other. The role of the government in that case was inefficient and as can be seen in C-DOT, a company “able to play technological midwife to potential private-sector producers of electronic equipment rather than confronting them as competitors,” missed the direct role of such programs in the industry (Evans 1995, 135). In the United States, a moment of economic transformation has taken and is taking place. Consequently community service programs can actually accelerate this process with ample room to spare without impairing the ability of entrepreneurial universities to train and graduate high quality workers into a dynamically growing economy.

The phenomenon described here is rather simplistic in nature but is critical to understanding and developing a feasible solution for the prevention of a legitimate student loan crisis which America may face in coming years given current policy decisions. As the former inputs and factors of production retain their value, a greater bargaining position is exercised by lenders, and students can expect employment through simple reprocessing of these factories or materials. This means greater interest rates such as those set in recent years on American student loans can be demanded at market equilibrium. Failure to do so and enforcement of service learning programs, which actually occurred in South Africa, compounds the demands of entrepreneurial market economies and creates inefficiencies as the programs eat up employment, factors of production, and material inputs which can still retain economic value. Student production cannot be as valuable as that provided by professional workers, and the opportunity cost of these endeavors skyrockets in relative terms.

Conversely, as a technological shock is experienced, such as that proven earlier in the United States, declining interest rates can be moderated at mutual benefit by implementation and expansion of service learning programs which eliminate liabilities and enhance assets of lenders, ie. taxpayers. An example of this in play is the Computer Maintenance corporation in India, which recycled hundreds of engineers from the departing IBM, showing how, “in a high-tech version of the state’s traditional role as a provider of infrastructure, state firms may have advantages over both local private firms and TNCs” (Evans 1995, 132). The factors of production which could form a substantial portion of lenders’ funds to students have now been made useless by the described economic conditions. Service learning provides students with the opportunity to train and reduces liability or helps to transform toxic assets into those useable by the new economy while placing the state in a role where it has a comparative advantage, rather than in an arena in which extraneous use of resources may be guaranteed. The limits to such an expansion are only moderated by the extent of implementation of new economic models and systems of production.


Integral Components in Forecasts for Coming Economic Evaluations of Higher Education and Summation


This research has successfully explored several options for higher education in the future and has made the evaluation with a proof of the necessity for dropping interest rates in the United States effective immediately. The symptoms for this include the increasing student debt combined with increased total defaults as well as total repayment figures. The consequences of these factors in play holding current advances in technology constant, assuming no regressions, are increasing total economic productivity regardless of policy change and dramatically shifting efficiency of that productivity based on changing levels of boundary roles. Categorical reminiscence of the original goals and objectives of student loans in the United States is useless when the factors of production are changing dramatically.

Rules of thumb or prospective nuclear evaluations of the excellent relationship between allegorical social pressures on the economic system cannot be integrated as an analogy to contemporary economic rules. New make-ups of IQ, social demographics of graduating students, and most importantly a shifting array of economic inputs for the economic system are dramatically changing the fashion in which the entrepreneurial university has a relationship with the state in the educational sector. Further research could investigate the nature in which, amongst institutions of higher education, the state can expand its role in a convergent manner, playing an infrastructural role, rather than operating as a competitive entity.

References:

Aldrich, H., & Herker, D. (1977). Boundary spanning roles and organization structure. Academy of management review, 2(2), 217-230.


Berman, E., Bound, J., & Machin, S. (1997). Implications of skill-biased technological change: international evidence (No. w6166). National Bureau of Economic Research.


Bowles, S. (2014). Schooling in capitalist America: Educational reform and the contradictions of economic life. Haymarket Books.


Coad, A., & Rao, R. (2008). Innovation and firm growth in high-tech sectors: A quantile regression approach. Research policy, 37(4), 633-648.


Evans, P. B. (1995). Embedded autonomy: states and industrial transformation (Vol. 25). Princeton, NJ: Princeton University Press.


Hillman, N. W. (2014). College on credit: A multilevel analysis of student loan default. The Review of Higher Education, 37(2), 169-195.


Ong, P. M., & Rickles, J. (2013). The Continued Nexus between School and Residential Segregation. Berkeley Journal of Gender, Law & Justice, 19(2), 379.


Rudebusch, G. D. (2010). MACRO‐FINANCE MODELS OF INTEREST RATES AND THE ECONOMY. The Manchester School, 78(s1), 25-52.


Subotzky, G. (1999). Alternatives to the entrepreneurial university: New modes of knowledge production in community service programs. Higher education, 38(4), 401-440.

Williams, J. (2006). The pedagogy of debt. College Literature, 33(4), 155-169.

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