Zimbabwe hyperinflation update

It seems that the Zimbabwean central bank is fighting the inflation in Zimbabwe by lopping 10 zeroes off the end of its currency, making 10,000,000,000 Z$ into 1 Z$. Sadly, as mentioned by the Guardian, a new Z$ is not enough to buy a loaf of bread...
Will this ploy to control inflation work? Of course not. This simply makes it easier for people to read the amounts of money they are spending and receiving, and even that, only for a few months, till hyperinflation makes the value of the new Z$ high enough for the CB to lop off more zeroes from it.
The way to really curtail hyperinflation is to stop printing currency to pay the military. While printing currency allows Mugabe to pay his soldiers in the short-term, this printed money ultimately goes to the open market, where, due to the steady, unrelenting inflow of Zimbabwe dollars in circulation, the Zimbabwe dollar steadily loses its value. The solution for Zimbabwe then really is that simple: stop printing paper money so fast that it drives your economy into hyperinflation. Unfortunately, because Mugabe is currently running a somewhat unpopular regime, that is unlikely to happen for quite a while, which means that we will hear about the Zimbabwe central bank re-revaluating Zimbabwe dollars fairly soon.

[via Guardian]

Booming Brazil

There is an article in the New York Times today on the economic boom that Brazil is experiencing currently. While the United States suffers through an annual economic growth rate of 1.9%, Brazil's growth rate for the last year was upwards of 5%. While not as frenetic a pace as China or India, it is probably a much more managable growth rate for Brazilian businesses, allowing them to transition more smoothly into the more prosperous economy. Even more encouraging is the news that, during this economic boom, the income gap between the rich and the poor has shrunk by 6 percentage points. The article credits the growth to government programs such as Bolsa Familia, which provides food subsidies for lower-income families, and the creation of government-backed microloan banks that provide capital to small businesses.
However, amid all the back-clapping for Brazil, the New York Times mentioned some things positively that I did not find as reassuring:

In fact, with a stronger currency and inflation mostly in check, Brazilians are on a spending spree that has become a prime motor for the economy, which grew 5.4 percent last year.

They are buying both Brazilian goods and a rising flood of imported products. Many businesses have relaxed credit terms to allow Brazilians to pay for refrigerators, cars and even plastic surgery over years instead of months, despite some of the highest interest rates in the world. In June the country reached 100 million credit cards issued, a 17 percent jump over last year.

It seems to me that this is the same sort of consumer exuberance, propped up by possibly dubious credit/loan practices that put the American economy in the disastrous position it is in today. In the short run, such a sudden increase in purchasing ability makes perceived wealth of consumers increase, but in the long run, it simply increases the debt that they carry on their shoulders. Therefore, while the economic growth on the shoulders of domestic growth is likely a positive occurrence, if that domestic growth encourages behavior that is driving an increase in irresponsible indebtedness for average Brazilians, I do not believe it is in the best interest of Brazilians or their economy.

[via NYT]

Post-scarcity civilizations (like the Culture)

What exactly is a post-scarcity civilization? A post-scarcity civilization is a society in which members of the society do not work in order to sustain themselves (and their families) but because they enjoy the work that they do. I have been fascinated by this idea ever since I started reading Iain Banks' series of novels about the Culture, a galaxy-spanning post-scarcity civilization. While he does not tackle the Culture directly in any of his novels, the underlying structure of the civilization is made clear in each of his books.
And it is beautiful. Like Banks says in a recent CNN interview, it is a sort of a "secular heaven" for social liberals. Generally speaking, everyone has as much of everything that they could possibly want, to the point that nobody really hoards anything anymore. Commercial ventures are created and dissolved based on whim - some member of the Culture may have found it interesting to run such an enterprise for a decade or so and tired of it, dissolving it at his pleasure. The government is generally non-existent. The only things tying the entire Culture together is the common set of ideas regarding way of life and the technology that sustains that way of life. Aside from that, local bureaucratic things are handled by sentient beings who enjoy administering to such things (with trillions of members, it becomes somewhat easier to find individuals willing to take care of the "annoying things"). There are no real trials because there is little crime in the Culture, as there is no real necessity driving criminal behavior. Any crimes that do transpire seem to be handled by social exclusion, exile from the Culture being a social punishment for the crime.
Admittedly, this seems a utopian society. But that is a very plausible state of being for a post-scarcity civilization. What is the need for an overbearing laws and government administrators in a situation where resources are not limited? The major reason for government is the "equitable" distribution of a limited set of resources amongst the population. With the limit lifted, there is no longer a reason for a strong government. To some extent, the idea of economics also evaporates as there are no longer limited resources for which individuals must compete... Thinking about post-scarcity civilizations is a scary thought, but pleasantly so (if that is possible). It opens up the possibility of a society not based on ties of excluding others and defending one's group from outsiders but rather on a common set of ideas, thought structure, and way of life... Some might call it anarchy but if, in this anarchy, everyone gets what they want/need, is an anarchy so bad?

[more info about the Culture at io9]

Aside: In the recent interview, Banks suggest that the path to human inception into the Culture depends largely on genetic modification. Really interesting that somebody comes out in favor of genetic modification. I always thought it was sort of an inevitable part of human future, good or bad, which would, at first, differentiate rich and poor humans even more, but ultimately benefit everyone, but Banks really takes it quite a bit further. [via CNN]

Chinese Food in Flushing

Ever since I went to Flushing for my cousin's party in June, I have been intrigued by the semi-urban neighborhood that is Flushing. It seemed vibrant for all sorts of unexpected reasons: it has a large immigrant population, scores of relatively active activists protesting and lobbying for all sorts of causes, and a couple of streets where there are actually more pedestrians than cars (GASP!). But, not knowing much about that part of Queens (an outer borough of New York City), I was hesitant to go forth to Flushing again. However, it seems the New York Times has come to my aid this time... Aside from the article linked to below, they also have a pretty interesting "Interactive Graphic" that lays out some of the foods available near the Flushing Main St. subway stop (on the 7 subway line). For anyone else who is interested, check it out.

[via NYT]

File sharing and the Music Industry's Response

The Guardian has an interesting article on the history of digital file sharing and the music industry's reaction to said file sharing. The author points out that the music industry' years of stubbornly refusing to accept that the digital medium has "bred a killer strain of antibiotic-resistant filesharing technology that grows more and more difficult to police by the year." I think that is almost 100% true. The author (Doctorow) also has a fairly clear alternative response laid out for the industry (albeit probably a little late in the game):

* acknowledge that it's going to happen;
* find a place to collect a toll;
* charge a fee that's low enough to get buy-in from the majority;
* ignore the penny-ante fee evaders;
* sue the blistering crap out of the big-time fee-evaders.

If the music industry had, like the author suggests, found a way to get most people to pay for accessing a network like Napster in the early days of music file sharing, it would probably not find itself in the poor position it is now: hated by a majority of consumers while not really making much money in the process. The music industry will have to reshape its approach to the digital medium or face the prospect of a (timely) death.

[via Guardian]