That age old debate between communism and capitalism is an illusion of socio-linguistics.

This one isn't for the faint of heart.

The (perceived) conflict between capitalism and communism is littered with intellectual misappropriation. These are just labels for social relations structures, that when analyzed, are to all intents and purposes identical. When we perceive distinctiveness in one or another we are simply noting conformity with one of our mentally preconceived definition matrices. These matrices incorporate various characteristics, and the way in which we see subconsciously selected these characteristics is influenced by the social relations system in which we live. In other words, the notion that there is an intrinsic difference between the two is simply an artefact of our recognition of differences in the socio-political stratification of nations.

The debate essentially concerns the distribution of power and ownership. Since the distribution of power and ownership is often illusory in nature, it is immediately difficult to form any clear classification criteria for political systems, capitalism and communism being two examples. It is commonly held belief that ‘communism’ is some form of social relations structure that sees power and wealth in the hands of the state, on behalf of the people. ‘In capitalism’, the argument may be that hierarchy is determined according to private property, and that the state power of the otherwise ‘communist’ system is subjugated to the capitalist individual. The idea that there is some significant difference between individuals operating as the state and individuals operating as a corporation is an artefact of linguistic expediency. Our labelling of social relations system according to ownership hierarchies is done only with the intention of advancing whichever form of ownership we want to advance, otherwise, there would be no need for distinctions.

Pre-civilization living was hierarchical, but was not capitalist. Individuals contributed as component parts of whichever nomadic tribe they belonged to, and the lack of economic competition is the defining difference between pre-civilization social relations and civilization social relations. The development of hierarchical civilizations generated political conflicts, and in turn these political conflicts came to be defined by differences in opinion about how the hierarchies should be styled. In reality, all ‘politicians’ advocated hierarchy by definition, since they themselves sought to gain power, which axiomatically implies hierarchy at least in the sense of a power relativism. The descriptions of the politicians proposed tweaks to hierarchy were motivated in much the same way as modern day product marketing is. Descriptions such as ‘capitalism’ and ‘communism’ can be seen to be, by their very nature, non academic, since they did not arise of curiousness, rather out of greed and politics, money and power.

So the difference between these two systems essentially rests on the idea that power changes form according to who holds it. The ‘state’ and the ‘corporation’ are anthropogenic social constructions, and as such communism and capitalism are anthropogenic social constructs, since they derive their respective definitions from these institutions; except, the state and the corporation are not institutions in their own right, they are merely examples of many possible extensions of the economic (distributive) ‘institution’. An institution must have a responsibility unique to itself, and that is why the state and the corporation cannot be regard as whole institutions in the classic sense, because they share the purpose of distribution, albeit seeking to do so in differing ways. A corporation could well be viewed as a microcosm of a state, the only relevant difference being the cosmetic one between geographical national boundaries and social business agreements. Thus, capitalism is a form of ‘social-ism’ whereas communism is a form of ‘geographical-ism’. When we see that ‘social-ism’ is a distributive system on a geographical scale that is defined similarly to what is regarded as ‘communism’ the definitions are blurred to the point of insignificance.

Here we go again...

The sheer irony of the current economic outlook is simply breathtaking. In 2008, the mighty Lehman brothers, leveraged to the hilt, were knocked out of businesses by a small spike in oil prices that contributed to the bursting the hose price inflation bubble. You might not be surprised to learn that banks such as Lehman helped arrange complicated balance transactions designed to conceal the level of Greece's debt.

When you think about it, the correlation between the high point of this oil price cycle and Greece's current troubles makes perfect sense. As the cost of running public services is driven up slightly by the price of oil, the budget (arranged when the price per barrell was substantially lower) just won't make ends meet. As you may have noticed, the oil price bubble seems to have stagnated, falling from $125 p/b to $115 p/b over the last month. Those investors who were riding the gravy train upwards now need a new source of income to compensate for the declining value of their oil asset. What better than to pick on the weakest kid and sell greek debt to drive up yields (and then arrange to re purchase them at higher interest with convenient conditions attatched)...

The country is now on the brink of bankruptcy- with yields (effectively interst rates) on 2 year debt up to 28% p/a. There is simply no way the Greek government can afford to borrow any more money. The ponzi scheme is over. Greece is now living off pay day loans, and the loan shark is bringing out the baseball bat. On a back of the paper calculation, Greece would have to start growing 15% a year to possibly sustain its current debt burden without immediate assistance. They're currently in a 6% a year recession.

In the UK, figures just released show retail sales slumped 1.4% in May. Did I predict that one of the symptoms of the coming crash would be a decline in retail sale volumes? Essentially yes; I argued that one of the factors in the 2008 crash was a decline in retail shares- obviously linked to sales- in turn linked to the "credit crunch"- and most importantly, oil. None of these signs bode well for anyone. The market is more vulnerable now than it was in 2008, like a rabbit in a tiger cage, all it can hope for is that the tiger start fighting each other over it, and it can escape in the meantime. The analogy here is that the different economic jitters we face right now could to some extent offset each other. If growth stumbles, inflation will too, and so might interstest rates on European debt. However, it's almost inconveicably unlikely that the right "balance" between the different crisis will come about by chance. Investors are acting with a predator mentality with no regard for sustainability in their decision making. "Every man for himself" pretty much sums up the current situation.

A greek default could be significant enough to wipe out enough of bank balance sheets to close the gap between assets and liabilities that allow them to keep lending. That's why the debt crisis has potentially major ramifications for the entire European economy. We should be worrried; very worried.

Shock horror, cutting carbon could worsen global warming!

It is the exhortation of the politically correct media and left wing politicians that reducing carbon emissions will reduce the rate of average global warming. However, after much investigating I have found that this little polemic falls foul of a classic academic assumption that I detest. This is the "ceteris paribus" assumption, a Latin phrase that literally means "everything else being equal". The big black hole in the carbon myth is that everything else is not equal.

Before we delve further into the wonders of this inconvenient truth, I must declare that I am NOT a climate skeptic. The science behind the IPCC forecasts is solid, but what is not so solid is the economics behind it. The IPCC's emissions scenarios, which project future fossil fuel consumption are only made possible by the data of the International Energy Agency on reserves of these fuels. I hasten to add that countless environmentalists have poured scorn over the IEA's information, and with good reason- the IEA simply trusts declared reserves given to them by the various countries which they survey. These reserve figures are known to be a political artifact, fraudulently inflated to boost asset values (read: "investor confidence").

Now it might seem that this is irrelevant. If the IEA has exaggerated reserves, then we won't be able to emit the disastrous quantities of carbon that the IPCC's projected emissions scenarios rely on. On the other hand, if the IEA's reserves are correct, then climate change is still game on. However, things are not quite as simple as this.

The burning of fossil fuels contributes to concentrations of aerosol chemicals in the atmosphere, which have a short term cooling effect. Because they don't last long, the atmospheric concentration is highly responsive to changes in emissions. Carbon dioxide, on the other hand, has a long term heating effect, but unlike aerosol's, if you were to cease emissions, the atmospheric concentration would not rapidly plummet. The total radiative heating effect of all greenhouse gases is (2005) 2.45 W/M^2 (watts per meters squared) with a range of 2.18 to 2.7. However, this needs to be adjusted for the cooling effect of atmospheric aerosol, which gives us a figure of 1.41 W/M^2 with a range of 0.41 to 2.2. For the sake of transparency, I have calculated these from the parts per million concentrations of greenhouse gas equivalents and atmospheric aerosol's at http://www.skepticalscience.com/carbon-dioxide-equivalents.html (pro global warming site) and the IPCC's (pro global warming) formula of 5.35*log(new concentration/288)= radiative heating effect.

It is immediately apparent that drastic emission cuts would also lead to a collapse in the cooling effect of atmospheric aerosol's - to disastrous consequences- something that environmentalist James Lovelock lucidly explains in his book "The Vanishing Face of Gaia". Using the mid range figures, there would be a warming effect of 1.04 extra W/M^2, compared to today. The warming effect of the loss of atmospheric cooling aerosol's would ironically be greater than all the warming effect of greenhouse gas pollution in the last 35 years, except it would be much more sudden. It is proposed that carbon emissions are reduce by 80% on 1990 levels by 2050, although, for the sake of argument, let's say we were to eliminate them all within 10 years. The saving in terms of the prevented rise in carbon dioxide equivalents excluding aerosol would be in the order of 30 parts per million, yet the overall increase in total atmospheric forcing would be greater than the saving made by reducing greenhouse gas emissions.

According to data table 6.1 of the IPCC's most recent global warming study (2005 data), the total forcing of aerosols is -1.2, whereas the positive forcing of long lived greenhouse gases (Carbon Dioxide, Methane, Nitrous Oxide, and tropospheric Ozone) is 2.65. Halocarbons add an additional 0.34 W/M^2 but these have short term lifespans and are in any case being successfully and rapidly phases out so in the long term they are essentially an irrelevance. It is however misleading to give real figures, since what is really relevant is the change. For instance, the sun has an enormous forcing (over 1300) but the long term changes are very small. Around 1/2 of the forcing effect of the long lived greenhouse gases (LLGHGS) is of anthropogenic (man made) origin- there were lots of them there before we polluted the atmosphere with some extra. Overall, the positive forcing anthropogenic LLGHGS is balanced out by anthropogenic aerosols. The warming of the 21st century is attributable to the net difference between the two that only occurs due to short term minor greenhouse gases that are being phased out. We should, in other words, expect to see a reversal of the warming trend as the positive forcings decrease to match the level of negative forcings over the next few decades as the short term gases are phased out and disappear from the atmosphere. However, there is incessant political will to reduce LLGHG emissions, and thus stop the industrial processes associated with them that keep up the aerosol levels. The 21st century warming, of 0.8 deg C, attributable to the net forcing of 0.3-1 W/M^2 could be dwarfed if aerosol levels fell, leaving humanity, in Lovelock's words, to feel "the full force" (sic) of the anthropogenic greenhouse effect.

No matter how fast emissions cuts are carried out, the collapse of atmospheric aerosol concentrations is a long term inevitability. Interestingly, the IPCC does not give a forecast for these, even though it gives a forecast for all other radiative heating/cooling gases. Despite this being extremely mysterious, it only highlights the fact that a big jump in total CO2 equivalents from the figure including aerosol cooling to the figure excluding it. That would already put us on course for the 2 degree warming everyone is trying to avoid. Somebody has messed up big time with the plan to save the planet by reducing GHG emissions. It seems we really are stuck between a rock and a hard place.

Shale gas puts trick in magic trick.

1000 years of supply, 10000 years of supply, who knows. Some of the claims that are being banded about about the big shale gas plays would make the return of Christ seem unexciting by comparison. It is not often mentioned that the energy return on investment for shale gas is so negligibly positive at best, that you'd have to reinvest equivalent to say 95% of the resource just in getting it all out of the ground; and that's if there is any "ground" left after you have blown it to smithereens and polluted it to hell with the extraction process.

Hydraulic fracturing, the literally explosive process by which gas can be extracted from tight shale bed rock has been available since the 60s, as have all of the companies that you would regard as "big oil"- household names like BP, Exxon, Shell, Total, and so on. Proponents of shale gas claim that "new technology" has opened up shale bed gas as a new resource, which is nonsense. The big oil companies new how to do it all along, the just didn't want to do it, it doesn't make money.

The "frack job" of almost sexually inappropriate proportions by drilling company "Caudrilla" in Blackpool, England, has been revealed as the cause of two EARTHQUAKES last week, and has been put on hold (no surprise). Shale gas is already the culprit of (severe) groundwater toxic pollution- which occurs when the chemicals in the fracking solution permeate through porous rock into underground groundwater aquifiers - and is thought to cause as much as 2.5 times as much greenhouse gas pollution than coal, but now it causes earthquakes as well, whatever next! No wonder big oil has avoided it like the plague.

Shale gas "discoveries" allowed the IEA (International Energy Agency) to double it's numbers for global gas reserves, not that the shale gas had magically appeared, it had just been declared recoverable due to the entry of shale gas drilling firms into the market. To outside observers, it might have seemed as if the IEA had some sort of magic wand when it came to gas reserves, how could a finite resource always increase in size?

The oil as gas companies are responsible for the reserve growth miracle. It's not that they discover the oil/gas, it was nearly all discovered decades ago, they just keep enough of it in their back pocket to declare in the future, that way they can always (appear to) offset production with new discoveries. The word discoveries should be substituted for "revelations"; more appropriate for the conjuring trick style business they get up to with the numbers. You don't have to look far to find the oil companies boasting about the miracle of reserve growth, each year their annual reports are plastered with factoids explain that they have more than last year, despite production, without explaining how the magic trick works.

It's common sense that if shale gas was profitable, big oil would have got in the game years ago, their geologists knew about the reserves and they had the technology. The fact that the shale gas boom has minions such as Caudrilla in the UK and Chesapeak Energy in the US at the helm is testament to the equally magical nature of the modern business system. I muse that these companies only need the "prospect" that shale gas delivers to convince the gullible banksters to lend them some money. Before long, governments will hopefully make the sensible decision to ban shale gas drilling and avoid runaway climate change (if that is still possible). In doing so, they'll crash the boom and destroy a hefty chunk of those loans that Caudrilla and Chesapeak won't be able to repay, unless they really can do magic.