Category Archives: Uncategorized

China is taking over the global smartphone market

Looking at Counterpoint Research’s estimates for smartphone shipments in Q3 of 2019, it is striking how many Chinese companies are at top of the list. Seven of the ten top companies are Chinese.

It gets confusing whether to call these manufacturers, companies or brands. Calling them manufacturers isn’t exactly correct because many smartphones are made by other OEMs and ODMs. Saying brands gets confusing, because Huawei includes the brand Honor, Xiaomi includes the brand Redmi, ZTE includes the brand nubia, and Motorola is a brand owned by Lenovo. TCL has a license from Nokia to use the Alcatel brand, and HMD Global also has a license from Nokia to use the Nokia brand. TECNO, itel and Infinix are all brands owned by Transsion Holdings, but Oppo, Vivo, Realmi and OnePlus are companies owned by BBK Electronics which is part of the BBK Group. Presumably Counterpoint’s estimates also include phones made by these companies for cellular network providers. Maybe it is better to say seven of top ten smartphone providers are Chinese, since even the market analysis firms can’t agree on what term to use to describe the entities that produce or subcontract the production of smartphones.
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Why we don’t own our mobile phones

It is an article of faith that when we buy a mobile phone, we are the owners of the device. Nonetheless, it is worth asking what does ownership really mean? We certainly can use the device to make phone calls, browse the internet, take photos and all the other advertised uses of the device.

The maker of the operating system, the manufacturer of the device and the cellular network provider decide what software comes preinstalled on the device and its default configuration. Most people are content to use a mobile phone straight out of the box with the preinstalled software. They may add more software that they find in a repository such as the Google Play Store or Apple Store, but they don’t question whether that preinstalled software should be on their phone and what settings they are allowed to change on their phone. Continue reading

Conservatives have only themselves to blame for the Green New Deal

American conservatives are finally starting to acknowledge that climate change is a real problem, and not just some dastardly liberal plot to raise their taxes and control their lives. Even though the majority of Republican voters now say that they believe that climate change is happening and humans are the cause, they are still engaged in a type of denialism about the kinds of solutions which are required to tackle the problem. Continue reading

Adventures in home maintenance in Bolivia

I’ve never owned a house or a car, so I rarely have to fix anything. When I moved into my new apartment, however, I found all sorts of things, that I needed fixing.

I love the wooden parquet floors, but the previous renters had put down flooring wax without first cleaning the floors, so I could see lots of spots on the floor. I started scrubbing off the wax to clean the spots and ended up scrubbing the floors for two whole days.

Unlike in the US, Bolivian parquet flooring doesn’t have grooves to fit together the wooden tiles and they are glued on top of cement, so after a decade or two of being walked on, the wooden tiles start to come loose. I found about 100 loose tiles, especially in the areas of the apartment there there as a lot of foot traffic, such as the threshold of doorways.

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Presentación en la USFA cerca de las causas y soluciones del cambio climático en Bolivia

Hoy he dado una presentación en la USFA de la Paz acerca de las causas y las soluciones del cambio climático en Bolivia. Aca son los los dispositivos:

Muchos de los datos de este presentación vienen del borrador de mi libro:
La problemática de las emisiones de gases de efecto invernadero en Bolivia

También, tengo un articulo acera de energía en Bolivia:
Bolivia invierte menos en energía renovable que otros países sudamericanos


The consolidation of the offshore wind turbine manufacturers

Adwen, an offshore wind turbine manufacturer which is a subsidiary of Siemens Gamesa Renewable Energy (SGRE), just announced that it will be cutting its current workforce of 480 employees to just 220 employees by 2020. All development and sales of Adwen turbines will be halted, and the remaining staff will be focused on servicing the existing turbines in the field. The engineering staff that currently develops Adwen turbines will be incorporated into Siemens Gamesa.

With this announcement, the Adwen brand of turbines has been effectively terminated. It is the sad end to a promising company that used to be the second largest manufacturer in the world of offshore wind turbines with 18.2% of Europe’s installed offshore capacity at the end of 2015. Adwen’s announcement sounds the death knell for the innovative AD 5-135 turbine, which used a hybrid drivetrain that combined the lower cost of a geared drive with the lower maintenance of a direct drive. There is also no hope of ever reviving development of the Adwen AD 8-180, whose 88.4 meter blades were the longest in the world and its 10 meganewton-meter gearbox was the most powerful in the world. Despite the fact that Adwen had 2 GW of future orders on the books and probably could have survived as an independent company, its geared turbines competed too closely with the direct drive turbines (SG SG 8.0-167 DD, SWT-7.0-154 and SWT-6.0-154) that parent company Siemens Gamesa offers for the offshore market.

It is worth contemplating how few offshore wind turbine manufacturers still remain in the market. Back in 2011, the Siemens SWT-3.6-120, Vestas V112-3.0MW, BARD NV (5MW), REpower 5M, Areva M5000 and Hitachi/Fuji Suburu 80/2.0 were all in production, and there were public announcements about the future development of the MHI Sea Angel 7MW, Samsung S7.0-171, Alstom Haliade 150-6MW, Vestas V164, Siemens SWT-6.0-154, Enercon E-126 (6MW), XEMC Darwind XD115-5MW, Sinovel SL6000, Ming Yang SCD 6.5MW, BARD 6.5, AMSC WT5500FC, CSIC H151 (5MW), Daewoo 7MW, Gamesa G132-5000, Nordex N150 (6MW), GE 4.1-113, Goldwind 6MW and Clipper 10 MW Britannia for offshore use.

The offshore wind industry has changed dramatically since the heady days of 2011 when the sky seemed to be the limit for the offshore business. Vestas hit a financial crisis in 2012 and realized that it didn’t have the necessary resources in house to finish developing its V164, so it created a joint venture in 2013 with Mitsubishi Heavy Industries (MHI), which then axed its own Sea Angel turbine. Areva also decided that developing offshore turbines was too expensive to go it alone, so it created a offshore wind joint venture with Gamesa named Adwen in 2014. This short-lived JV came to an end in 2017 when Gamesa merged with Siemens. In order for Gamesa to be able to complete the merger, Gamesa bought up Areva’s stake in Adwen. GE tried twice to develop its own offshore turbines that never made it to market, before it bought up Alstom in 2016. These mergers have reduced seven offshore turbine manufacturers down to just three. The only remaining offshore wind turbine manufacturer from 2011  that hasn’t yet been merged is REpower, which was renamed as Senvion in 2014, but it is widely rumored to be looking for a partner in the offshore wind industry.

Almost all the other offshore turbines planned in 2011 never got financed or never made it past the testing of prototypes. The American turbine maker, Clipper Windpower, was hit hard by the 2008 economic crisis and was bought up by United Technologies (UT) in 2010, which killed its plan to build a gigantic 10MW offshore turbine in 2011 and then shut down all new turbine manufacturing in 2012, when UT decided to only focus on aerospace. When South Korea announced a plan in early 2011 to install 2.9 GW of offshore wind, Samsung, Daewoo, Hyundai, Doosan and STX all started developing offshore turbines. Samsung even created the largest turbine rotor in the world with 83.5 meter long blades. Then in 2014, it decided wind turbine manufacturing was a money pit and abruptly quit the market. All of its South Korean rivals also quit the wind business as well, except for Doosan which recently announced it would develop an 8MW offshore turbine. Currently only 38MW of offshore turbines have been installed off South Korean shores.

Despite the fact that offshore wind did grow dramatically in Europe, few European turbine manufacturers were able to take advantage of that growth. BARD went bankrupt in 2013, killing its planned BARD 6.5 turbine. Enercon produced its E-126 which at 7.5MW was the most powerful turbine in the world before the introduction of the V164, but Enercon gave up on the offshore market as being too risky for the Germany company, despite employing a direct drive technology that should have been a good fit for the offshore market. Nordex couldn’t find partners to help finance its N150, and has retreated from the offshore market as well.

Back in 2011, there were 6 manufacturers of offshore turbines (Siemens, Vestas, BARD, Areva, REpower and Hitachi/Fuji), plus another 18 companies (GE, Clipper, Samsung, Daewoo, STX, Hyundai, Doosan, MHI, Alstom, Gamesa, Nordex, Enercon, Goldwind, Ming Yang, CSIC, XMEC Darwind, Sinovel and Dongfang) had announced plans to enter the market. Almost none of those plans that looked so rosy in 2011 came to fruition. Looking at the cumulative market shared of offshore wind turbines by the end of 2017, it is striking how few of those companies with grand plans in 2011 hold any significant market share today.

Percent of cumulative global offshore wind turbine capacity at end of 2017:
Siemens Gamesa: 54%
MHI Vestas: 15%
Shanghai Electric (Sewind): 7%
Senvion: 7%
Adwen: 5%
Goldwind: 3%
Envision: 3%
CSIC: 1%
GE: 1%
Source: Calculated from data in the GWEC Global Wind 2017 Report

Siemens Gamesa has built or designed 66% of the world’s existing offshore wind turbine capacity if including its subdivision Adwen and the turbine designs that it licenses to Shanghai Electric (Sewind). It may seem surprising that Siemens Gamesa has so dominated the offshore market, when it equally shares the onshore market with Vestas, GE and Goldwind.

Source: Windpower Monthly (2017-10-02) Top ten turbine makers of 2017.

Siemens first pioneered offshore wind turbines back in 1991, but Vestas was taking most of the offshore market in the mid 2000’s, when offshore wind was just starting to emerge. It is worth examining why Siemens ended up beating Vestas in the offshore market as shown in the graph below of MW of new offshore turbines per year between 2000 and 2016:


Vestas effectively killed itself in the offshore market by using a gearbox that couldn’t stand up to the rigors of coastal winds. Rather than developing a new turbine, Vestas tried to repurpose its existing V90-3.0 onshore turbine for offshore usage. After installing 30 V90-3.0 turbines in the Kentish Flats wind farm in 2005, it had to replace all the gearboxes over the next 2 years and was forced to take the V90 off the market in 2007 until it reintroduced the turbine sporting a new gearbox developed with Hansen Transmissions. This new gearbox, however, proved little better. In May 2012, Vestas reported gearbox problems with 376 of the V90-3.0 turbines that it installed between 2009 and 2011. Questions were raised about the quality of Vestas’ turbines, when the end of the blade broke off a prototype of the V112-3.0 in 2010, which was being developed as the successor to the V90-3.0.

In contrast, Siemens had developed a reputation for good turbines with reliable gearboxes that had low maintenance costs. 96% of the turbines that Siemens installed in the US between 1983 and 1989 were still in operation in 2009. This reputation served it well in the nascent offshore market, where the increased strength of the winds made damage more likely and the high cost of access via boats and helicopters made maintenance more costly. Historically, the gearbox was the part of the wind turbine which was mostly like to fail, so Siemens turbines with their reliable gearboxes were deemed the safest bet by risk-adverse electric utilities and energy project developers.

The design of the high speed, 3 stage Winergy gearboxes and the squirrel-cage generators used in Siemens SWT-3.6-107 and SWT-3.6-120 was very conventional, so it is hard to say that Siemens’ geared turbines were significantly better than its competitors, but almost 10 GW of those two turbine models were installed. Siemens advertised its SWT-3.6-120 as “thoroughly tested, utterly reliable,” and the large number of its deployments created a snowball effect that made it hard for other turbine companies to compete with its reputation. Shanghai Electric (Sewind) chose to license Siemen’s SWT-3.6-120 turbine design because it was so well tested in the field. Because Siemens had so many orders for its offshore turbines, it was able to design its own special ships for installing turbines in coastal waters, which allow it to install a turbine in less than 24 hours.

While Siemens had a reliable design with good reputation and economies of scale in its favor, it mostly took the lion’s share of the offshore market because its competitors were suffering financial woes that restricted the needed R&D and marketing of their offshore turbines. Vestas was suffered through financial turmoil, which hindered its ability to deploy the V112 and delayed the development of the V164, so Vestas was stuck trying to sell the outdated V90 to the offshore market. REpower was also experiencing financial woes, which is why it was sold off to the Indian company Suzlon in 2007. Suzlon, however, had so highly indebted itself buying REpower and trying to increase its production capacity, that it was forced to sell off the company in 2015 in order to avoid bankruptcy. Areva was loosing millions of euros every year on its nuclear business and Gamesa was hit by the loss of renewable energy subsidies in Spain, so neither company had sufficient funds to properly invest in Adwen.

Siemens Gamesa probably won’t have such a commanding lead in the current generation of 5-9 MW turbines, as it did in the last generation of 3-4 MW turbines, but it is undoubtedly going to continue to grabbing the lion’s share of the market in Europe and Shanghai Electric has used its turbine design to grab 50% of the Chinese offshore market as well.

Shanghai Electric, Goldwind, Envision and CSIC have been relegated almost exclusively  to the Chinese market, although Envision and Goldwind have ambitions to become global players. With Adwen in the process of being phased out, there are currently only three competitive offshore turbine manufacturers outside of China. Senvion has limited reach, since it only has operations in 11 countries. Its 6.2M126 offshore turbine uses a high speed, 3 stage geared design from mid-2000’s which is outdated and considered less reliable than Siemens’ direct drive and MHI Vestas’ medium speed, 2 stage geared drive. For most of the world, the only real competitors in the offshore market are Siemens Gamesa and MHI Vestas.

It seems strange that so many companies have been driven out of the offshore market, considering the fact that the market size has quadrupled in six years, from under 1000 MW in 2011 to 4331 MW in 2017. With an exploding market, why were so many turbine manufacturers driven out of the offshore wind business and most of them forced to combine into larger companies in order to survive?  What makes it odder still is that so many of these companies like Nordex and Enercon were highly experienced in building onshore wind turbines or industrial giants like Samsung, Hyundai, Fuji and Areva with decades of experience in electrical generation and deep enough pockets to survive the initial R&D, yet they still found the offshore market too tough to survive.

First of all, it is important to recognize that many of these companies were relying on a home market advantage which hasn’t yet materialized in places like the US, Japan, South Korea, India, France and Spain. Although the market has grown rapidly, it is striking where it didn’t grow.

In anticipation of offshore wind eventually taking off on the American Atlantic seaboard, GE started experimenting by installing its 3.6 SL turbines in 2003 off the coast of Ireland. The American market, however, still hasn’t materialized a decade and a half later and GE’s turbines have only been deployed in a single 30 MW wind farm off the coast of Rhode Island. After the 454 MW Cape Wind offshore project was first proposed in 2001 off the coast Massachusetts, it faced a decade and a half of of lawsuits and public protests from local residents before it finally died in 2017.

Similar protests from the residents of  South Korea helped kill 2.9 GW of planned offshore wind farms in South Korea. The public opposition and the lack of firm commitment from the South Korean government led to Samsung, STX, Hyundai and Daewoo all fleeing the market. Samsung tried in vain to sell its turbines in Europe as well, without any success.

Fuji Heavy Industries developed a 2MW turbine with Hitachi for typhoon prone Japanese waters back in 2009 and has been testing it as a floating turbine since 2013, but it never saw much usage. After spending three years trying in vain to sell the Suburu 80/2.0 turbine to Japanese utilities, Fuji Heavy Industries sold out its stake in the wind business to Hitachi in 2012. Hitachi proceeded to loose millions of yen developing a 5.2 MW floating turbine that could be used in the deep waters off the Japanese coast and survive typhoon winds. Hitachi’s failure was partly due to Japan’s geography, but it was also due to Hitachi’s lack of focus. Rather than invest in renewable energy, it was been distracted by the joint ventures it created with GE in nuclear power and Mitsubishi Heavy Industries in thermal generation, which are both dying industries that will continue loosing money.

After the Fukushima Daiichi nuclear disaster in 2011, the Japanese government also prioritized saving Toshiba and Hitachi’s nuclear business and importing more liquefied natural gas, rather than pivoting to renewables. Most of Japan’s offshore wind potential is located in the less-populated, northern regions, but the country lacks an adequate grid to transfer electricity from Hokkaido and Tohoku down to Toyko and convert it from 50Hz to 60Hz to sell to western Japan. The Japan Wind Power Association estimates that only 96 GW out of a potential 378 GW of offshore wind capacity can be developed due to limitations in the grid. Although a feed-in tariff for wind and solar energy was introduced in 2012, Japan currently only gets 15% of its electricity from renewable sources and its current energy plan only targets increasing that percentage to 22%-24% by 2030. There is no clear plan for developing its offshore wind industry or upgrading its electrical grid for renewable energy.

After the Indian company Suzlon outbid France’s Areva to buy REpower in 2007, it proceeded to accrue $2.5 billion in debt as it geared up to sell its turbines in India where the government was offering big subsidies for renewable energy. Suzlon planned to build a  300MW wind farm off the coast of Gujarat before the Indian government slashed the energy subsidies. Suzlon was forced to abandon the idea of marketing offshore wind to the developing world and in 2015 it sold off its Senvion division in a fire sale to avoid bankruptcy.

In the past, the economics of offshore wind made it largely impossible to compete with other sources of energy, without the firm backing of governments and heavy subsidies. According to REN21’s 2017 report on renewables, the capital cost of installing a kW of onshore wind capacity in 2016 was on average $1263 in Asia, $1866 in Europe, and $1805 in North America. In comparison, installing a kW of offshore wind cost $3286 in Asia and $4207 in Europe. Block Island off the coast of Rhode Island, which was the first offshore wind farm in North America, had a capital cost of $5500 per kW. Even when factoring the higher capacity factors for offshore wind due to the fact that that the wind speed is higher and more constant, the offshore wind energy is still costs 20% more than solar and 40% more than onshore wind. There is more wear and tear on offshore turbines subjected to coastal storms and accessing the turbines by boat or helicopter makes the maintenance costs much higher. What ultimately killed the Cape Wind project was not the 23 lawsuits and the public protests, but the fact that the power utilities didn’t want to pay the contract price of $220 per MWh when they could get cheaper electricity from other sources.

Only in Europe where the governments had strong mandates and were willing to massively subsidize offshore wind, was it able to take off. China had a similar experience as Japan, Korea and the US with offshore wind, until the government stepped in a couple years ago and started mandating its installation. China’s offshore wind installations didn’t take off nearly as fast as called for by the government’s five year plan, but it is now expected to grown 40% per year until 2020 due to the Chinese government’s goal of transitioning away from coal as fast as possible. South Korea and India are just as dependent upon coal as China, yet they don’t have the same level of governmental support to drive their offshore wind industries.

Even in places where the subsidies were strong and there was governmental support to grant regulatory approval, most wind turbine manufacturers lost their shirts in the offshore business. It takes years of prototyping and testing to develop a good offshore turbine that power project developers are confident enough to buy, since the maintenance costs and potential financial risks in coastal waters will be much higher than on land. The technical problems BARD experienced before it went bankrupt, convinced project developers like Orsted (formerly DONG), E.ON, Innogy, Vattenfall and Northland Power that it was very risky to go with untested offshore turbines and newly designed electrical conversion and transmission systems. One of the reasons why Vestas and Gamesa paired up with Mitsubishi Heavy Industries and Areva, respectively, was because their experience in electrical generation and transmission reassured wind project developers. On top of that, new types of ships, cranes and foundations needed to be designed to install offshore turbines and developing the best techniques and figuring out the logistics took years of costly experimentation.

After Siemens established an early lead in the offshore market and had a battle tested turbine model like SWT-3.6-120 with thousands of deployments, it was hard for any other company to compete in the offshore market. Companies like Samsung invested millions only to discover that it would take millions more in costly testing and small-scale deployments to convince the big wind project developers to risk their capital on their untried turbines. Even worse was the fact that there were very few offshore wind projects to go around and they often took far longer in the planning, financing and regulatory approval than initially expected.

The steep cost of entering the offshore market was coupled with the double whammy of reductions in renewable energy subsidies in Europe, India and the US. Between 2013 and 2016, direct subsidies for wind energy in the US fell 80%, from 6187 to 1266 million dollars. After Spain eliminated most of its renewable energy subsidies, its two wind turbine manufacturers, Gamesa and Acciona, could no longer survive as independent companies. Gamesa sought the safety of a merger with Siemens and Acciona sold itself off to Nordex. The margins for turbine manufacturers have grown smaller as the subsidies have dried up and energy companies have fewer profits so they are willing to pay less for turbines. According to the World Energy Council, the average selling price of onshore wind turbines in the US has dropped from roughly $1500 per kW in 2008 to between $950 and $1240 per kW in 2016. China has experienced similar trends with the price of wind turbines falling 37% between 2007 and 2016.

The price of offshore turbines is dropping at a faster rate than onshore turbines, judging from plummeting prices being paid for offshore wind electricity in public bidding. In the UK’s latest round energy auction for offshore wind, the winning bid of £57.50 per megawatt hour was over 50% lower than the average £117.14/MWh awarded in the last comparable bidding round just two years ago. Maryland will paid $132/MWh for its offshore wind electricity that is scheduled to come online in 2020, compared to the $250/MWh paid for Rhode Island’s Block Island offshore wind farm, which came online in 2016. The price of European offshore wind electricity has dropped from roughly $0.17 per kWh in 2010 to $0.13 in 2017, and recent auctions for offshore wind farms in the Netherlands in 2022 and Germany in 2024-5 will sell electricity at the unsubsidized price of $0.06 per kWh. It is highly likely that other countries will follow the example of the Netherlands and Germany and start auctioning off future wind farm concessions at unsubsidized energy prices.

There is the potential for massive growth in offshore wind. Many governments around the world have formulated new plans to install offshore wind on a massive level, such as Belgium (4GW by 2028), Netherlands (11.5GW by 2030), Germany (15GW by 2030), Taiwan (5.5GW by 2025), France (3.3GW by 2023), UK (18GW by 2020), South Korea (13GW by 2030), China (30 GW by 2020), New York (2.4GW by 2030), New Jersey (3.5GW by 2030) and Massachusetts (2GW by 2027).

There are a number of companies that plan to challenge the duopoly of Siemens Gamesa and MHI Vestas in offshore wind. GE is promising to finally bring Alstom’s Haliade 150-6MW to market in 2019. GE also plans to be the first company to introduce the next generation of offshore turbines in 2021 with its gigantic Haliade-X, which will have a capacity of 12 MW and 107 meter long blades. GE has both the resources and the technical know-how to design such a monstrosity. It recently bought the Danish company LM Wind, which manufactures the longest blades in the world, including 75.1 meter blades for Goldwind and 88.4 meter blades for Adwen.

Hitachi is also gearing up to finally enter the offshore market after years of testing and prototyping. However, Hitachi recently announced that it will install 21 of its 5.2MW turbines in Taiwanese waters, so it appears to finally be entering the commercial offshore market in a serious way. Goldwind might also become a serious competitor in the future. The Chinese company is now testing its GW154/6.7MW and promises future GW164/6.45MW and GW171/6.45MW models. The prospects look good for GE, Hitachi and Goldwind, since each company should have a special advantage in their home markets of the US, Japan and China, respectively.

My prediction is that only Siemens Gamesa and MHI Vestas will be able to compete globally in offshore wind. Senvion will probably either be bought up or go bankrupt, since it can’t compete with the global giants. Goldwind will become a regional player, that dominates in China, but also gets installed in some developing countries that receive financing from China. GE might be able to challenge the global duopoly of Siemens Gamesa and MHI Vestas, especially if it ends up being the first company to bring a 12MW turbine to market, while its competitors are stuck with 8-9MW turbines. However, I think that it more likely that GE will be a regional player limited to North American shores. GE is currently betting big on offshore wind, but it is the type of company where a future CEO might decide that it isn’t getting enough orders for its offshore turbines to justify the high costs, and decide to quit the market. As for the rest of the companies, they have done little except produce some prototypes to test and they are unlike to ever bring any offshore wind turbines to market in a serious way.

The problem is that developing the next generation of 12+ MW turbines is going to be so expensive that only a few giants can compete. Offshore turbine manufacturing is becoming like jumbojet manufacturing. It takes tens of billions of dollars to do the necessary R&D and many years of large orders are needed to pay back those costs. In an industry where the technology is changing so fast, there is little guarantee that a turbine model will be used long enough to ever repay the development costs.

Developing the current generation of 5-9 MW turbines took longer and cost more than than anyone in the industry anticipated. Vestas, the largest turbine manufacturer in the world, started developing its V164 in 2009 and it took nearly 8 years to take it to serial production. Siemens also started developing the SWT-6.0-154 in 2009, which is a huge investment for a turbine which ended up seeing almost no commercial deployment before being replaced by a better model. Alstom started testing prototypes of the Haliade 150-6MW back in 2012, yet GE won’t bring it to market until 2019.

By the time the industry starts developing the 20+ MW offshore turbines, the R&D for these turbines will probably cost as much as developing the Boeing 787 and Airbus A380. A small company like Senvion simply can’t compete at that scale and larger companies like GE, Hitachi, Doosan and Goldwind that are currently determined to compete might loose so much in the attempt, that they will throw in the towel.

If northeastern states in the US keep delaying their plans for offshore wind parks and the Haliade 150-6MW flops in the market, GE might throw in the towel and stick to less risky ventures.

Jordan Peterson ignores the importance of social policy in addressing societal problems

Jordan Peterson was recently interviewed in San Francisco by Simulation, which is a series of talks and interviews with interesting people. As one of the “radical leftists” and “cultural Marxists” that Jordan Peterson loves to mock, I actually enjoyed listening to this talk and I learned some interesting things from Peterson. I can’t say the same about Sam Harris, Ben Shapiro or most other conservative commentators, so I definitely recommend watching the whole interview on YouTube:

The interview was a wide ranging conversation on a whole slew of topics and the interviewer wasn’t very well prepared in my opinion on the academic topics that were discussed, so Peterson was able to opine freely with little push back. I suspect that Peterson would have been taken to task on a number of his arguments in an academic convention, but he is playing in the court of public opinion, which is much less knowledgeable on these topics.

On the question of wealth redistribution, Peterson argues that wealth and achievement naturally accumulates toward the top in all societies, even in prehistoric societies. In making the argument that overaccumulation of wealth at the top is feature of all societies, he throws up his hands and says “nobody knows what to do about it”. He ignores all the ways that societies thorough out history have alleviated overaccumulation of wealth at the top.

Peterson even argues that wealth will accumulate naturally in the hands of the people with the most intellectual ability, which is better for society, since they will use that wealth in the most productive fashion. In making this argument, he ignores all the empirical evidence showing that wealth redistribution has a lot of benefits for society as a whole. Redistributing wealth toward the bottom causes more economic growth than distributing wealth toward the top, because it causes money recirculation in the national economy. Also, the studies of a universal basic income, providing apartments to homeless people, investing in low-income schools, guaranteed retirement funds, and raising the minimum wage all show economic and social benefits to the society as a whole. Peterson uses the example of the cocaine addict who misuses extra wealth and ends up overdosing, but Peterson uses the example of a few outliers and generalizes for all of society. There is a great deal of academic literature to showing the benefits and efficacy of redistributing wealth toward the bottom of society.

Peterson pretends that the most productive thing to do with wealth is to let the richest people keep it and uses the example of Bill Gates using his wealth to cure malaria, polio, sleeping sickness and other diseases. Yes, there are people like Gates and Musk who use their wealth productively, but there are many more like the Koch Bros, Sheldon Adelson, etc. who use their wealth to corrupt the economic system and destroy democracy. The economic literature supports some wealth inequality to promote growth, but it is clear that the level of wealth inequality that we currently have actually depresses economic growth because it destroys demand in the economy and reduces the recirculation of money.

On an individual basis, I think Peterson has a lot of insightful advise for how people can improve their lives, but he is a psychologist treating individuals who are generally outliers. A sociologist who does statistical analysis on society as a whole comes to opposite conclusions about what is good public policy. For example, individuals should think that working hard leads to success and there is some evidence for that. But, it is also true that society investing in schools and training, especially for the underprivileged has huge benefits, which Peterson seems to ignore. He looks at the lowest 10% and says that it is pointless to provide training to them. However, he ignores the 90% who would benefit from extra schooling and training. I work as a computer programmer and I can tell you that there are some people who simply don’t have the mind to be good programmers, but there are roughly 25% who do, but only 1% every get the training to do it. For those 24% of society who have the mental ability but not the training to be programmers, they would really benefit from free or subsidized education programs, as any sociologist would tell you. Peterson has nothing so say about the “radical left” proposals about how to better fund education for the disadvantaged.

Another major hole in Peterson’s argument is the fact that he ignores how IQ is influenced by environment and he ignores all the proposals of the “radical left” to improve the environment for the disadvantaged. For example, Peterson has nothing to say about proposals to improve the nutrition of people living in food ghettos and how to give people economic security to create the kind of stable and secure environments which produce children of high IQ. I appreciate all of Peterson’s insight into the importance of play, but otherwise he is remarkably silent on the kind of social policies that are needed to help the development of children and raise their IQs.

Peterson is right to point out how wealth and success accumulates to the few at the top, but he has zero to say about how to alleviate that overdistribution towards the top. He basically pretends that that it is a natural function and we don’t have any idea how to alleviate it. Many societies have features which mitigate the overaccumulation of wealth at the top, whereas unregulated Capitalism promotes it. There is a major difference between today’s neoliberal Capitalism that concentrates wealth and the giving away of wealth in order to gain social status among the Native Americans of the Pacific NorthWest. Peterson pretends that there is no social policy to address the overaccumulation at the top (other than making war and promoting plague), whereas any sociologist or historian could point to dozens of ways to address this problem (including changing Capitalism, which Peterson refuses to consider).

Peterson talks about the studies among animals showing that reciprocity arises naturally from play and is essential for development. Based on those studies, he concludes that morality is universal and a natural development from play. Strangely, he doesn’t use those same studies to advocate for good social policy. For example, he discusses the studies that show that stable hierarchies occur among chimpanzees when the dominant males establish friendships with the lesser males and look out for the welfare of the baby chimpanzees. In contrast, instability and violence occurs in chimpanzee society, when the males at the top of the hierarchy use physical domination and treat the lower chimpanzees badly, which leads to short reigns of power which are quickly overthrown.

Peterson is strangely silent on the social policy implications of the very studies he cites. The “radical leftists” who Peterson derides would look at those studies and conclude that it is a bad public policy to spend huge amounts on the police and military budgets. They would advocate against domestic policy based on police violence and a foreign policy that tries to physically dominate other nations.

Peterson also talks about the studies where $100 is shared between two people and Peterson noted that the people who are generous and share over 50% will do better in the long run. He doesn’t use those studies, however, to conclude that the wealthy should be forced to share their wealth with the lower classes and treat then better if we want a stable and prosperous society.

Peterson is correct to point out that women on average are more interested in people and men are more interested in things, but that doesn’t mean that sexism doesn’t exist in the STEM fields or that we shouldn’t have social policies to encourage women and minorities to pursue those fields, just like we should have social policies to encourage men to become nurses and teachers. Sexist attitudes do exist in these fields of work and it helps society as a whole to overcome them. Men who find childhood development fascinating shouldn’t feel belittled and their masculinity challenged when they become kindergarten teachers, just like women shouldn’t be steered away from using math. We need social policies to fight against sexist attitudes in society rather than pretending that is entirely the natural interests of the sexes that lead to gender disparities in jobs. Peterson is right that there are different interests on average in the sexes, so some of the gender disparities are not socially constructed, but some of the disparity is also socially constructed. We have both biological and social and cultural factors that lead to gender disparities and he refuses to talk about the policies that are needed to address the social and cultural factors.

Peterson became famous last year when he argued against rules banning gender discrimination in speech in Canadian universities. Peterson derides the social construction of gender as having no basis in the scientific literature and dismisses it as a form of “cultural Marxism” promoted by leftist academics. It seems rather bizarre to me to call the social construction of gender a Marxist idea, since Marx believed that culture was arose from material production and was rooted in materialist interests of the classes. Marxian analysis of culture is diametrically opposed to the postmodern analysis used by many feminists, especially when it is rooted in language. What people like Peterson call “cultural Marxism” did arise from leftist academics, who were often sympathetic to Marxist movements, but it is downright disingenuous for Peterson to tar them as Marxists if you know anything about the philosophical basis of Marx’s arguments.

Peterson criticizes Silicon Valley companies for trying to hire more women and people from diverse backgrounds. He seems oblivious to the studies showing that businesses which have more women, more racial minorities and more diverse backgrounds of their employees tend to function better and are more successful.

In conclusion, there is some truth to Peterson’s arguments about a competence hierarchy rather than a domination hierarchy and the natural distribution of rewards toward the top, but he is strangely silent on all the academic studies about how racial and class bias make a difference in success and promotion (as well as religious bias in some countries). He is right to criticize many academics for failing to acknowledge that biology and natural tendencies play a role in many of society’s problems, but he fails to acknowledge that there are also social and cultural factors at play and that social policy can play a important role in addressing these factors.