Book Discount

From October 17 – 24, “Red Gold” will be discounted to 99c/99p. 

Mars is to be colonized. The hype is huge, the suckers will line up, and we will control the floats. There is money to be made, and the beauty is, nobody on Earth can check what is really going on on Mars. 

Partly inspired by the 1988 crash, Red Gold shows the anatomy of one sort of fraud. Then there’s Mars, and where Red Gold shows the science needed for many colonists to survive indefinitely. As a bonus there is an appendix that shows how the writing of this novel led to a novel explanation for the presence of Martian rivers.Red Gold is a thriller with a touch of romance, a little economics and enough science to show how Mars might be colonised and survive indefinitely.

Book Discount

From February 14 – 21, (Seattle time) “Red Gold” will be discounted to 99c/99p. In the previous post, I gave a rather frivolous scam possibility related to space exploration. Try something a little more serious.


Mars is to be colonized. The hype is huge, the suckers will line up, and we will control the floats. There is money to be made, and the beauty is, nobody on Earth can check what is really going on on Mars.

Partly inspired by the 1988 crash, Red Gold shows the anatomy of one sort of fraud. Then there’s Mars, and where The Martian showed the science behind one person surviving for a modest period, Red Gold shows the science needed for many colonists to survive indefinitely. As a bonus there is an appendix that shows how the writing of this novel led to a novel explanation for the presence of Martian rivers.

If you liked The Martian where science allowed one person to survive then Red Gold is a thriller that has a touch of romance, a little economics and enough science to show how Mars might be colonised and the colonists survive indefinitely.

The Latest Indictments by Robert Mueller

Probably the most interesting thing to happen this week on the world stage, as opposed to locally, was the issuing of indictments by Robert Mueller. These came as quite a surprise to me because they were only peripherally related to the election. The few things that were, like dressing up as Hillary Clinton in prison garb was, in my opinion, more juvenile than anything else, and the charge of posting tweets that might have influenced voters seems to me to be a bit over the top. It almost made me wonder if anything I had written in various posts could be considered as “influencing American voters”. If it were, then I find that strange because I have no preference for American politics, but because of the importance of the US, of course I am interested in what goes on there.

One of the things that surprised me about this indictment was its length. It is 37 pages long, and some of the allegations seem to me to be ridiculously trivial. One allegation I found interesting was that some of these Russians “communicated with unwitting individuals associated with the Trump campaign”. This would seem to indicate that Trump’s protestations that there was no collusion is valid. Collusion implies knowledge of what you are doing; being fooled by someone is hardly collusion. Another interesting thing about this allegation is that it gives no examples of what actually happened with these “unwitting individuals”. It could be a straw man allegation for all we know, and no evidence is likely to be required because I can’t see these Russian coming to the US to defend themselves.

One of the defendants is a collection of entities termed “the organization”, and it had an annual budget of millions of dollars. That is a fairly trivial budget compared with what the American parties spent. It “obviously” had Russian government involvement because one of the officers had been in a company that provided food for the Kremlin. Now that is a deep association. It divided itself into sections and posted on social media, with the goal of spreading distrust towards candidates and the political system in general. If so, we have to admire its success, because if you look at the social media there are a lot of people who do not trust their politicians. Apparently the organization received money though a number of Russian banks, but given that it is a registered Russian company and its headquarters are in St Petersburg, that is hardly surprising, nor is it a crime. A cited example of their efforts at subverting the US elections was to have somebody stand outside the White House with a sign saying “Happy 55th Birthday Dear Boss”. What an earth-shattering criminal he was! One man, R. Bovda, attempted to travel to the US under false pretenses but could not get a visa. Obviously a master criminal! Most of the other defendants are charged with holding office in the Russian company. Charged? Why is that a crime?

A number of the defendants were charged either with attempting to enter the US or of doing so and not disclosing their full intentions. The indictment even mentions that two who succeeded wrote a report summarizing their itineraries and listing their expenses. Maybe they were complying with tax law. They talked to Americans, and even made a list of US public holidays. And someone paid them to do this? Others posted on social media, under misleading identities, with the intention of irritating Americans. Now that is sterner stuff.

Apparently these Russians were real spoil sports, as they periodically destroyed or deleted data, emails, and other evidence of their activities. However, the FBI seems to have taken the trouble to look up Facebook and check their history. Again, hardly master criminals. They purchased Facebook ads for “March for Trump” rallies, but also advertised “Support Hillary. Save American Muslims”, although later they tried “Down with Hillary”. For people being paid to do this, they lacked focus.

Some were also charged with obtaining money by fraud, including defrauding a federally insured institution. They are also charged with misrepresenting and lying on their visa application, and in carrying out identity theft, and used false credit cards thus defrauding the financial institutions. They also perpetrated wire fraud and bank fraud. At this point I should add that it is highly appropriate that such people be charged for such crimes, and dealt with in the usual way. However, what I find surprising is that these sort of crimes are not usually given this sort of publicity. The usual procedure is to apprehend the perpetrator, charge them, and let the law run its course. It is hardly of the stature of international crime. Another oddity is that no American is charged, and presumably the Russians are in Russia, so why release this now? Why not say nothing, hope they try to enter the US again, and if they do, arrest them? Is the release to show evidence that Mueller has been doing something? Hopefully, not to divert attention from other problems.

At the same time, an ex-Director of the CIA has apparently publicly stated that the CIA has regularly interfered with foreign elections, “but only for the greater good”. The greater good of whom? Why was Pinochet of greater good than Salvador Allende? Admittedly, the American mining companies in Chile would agree, but would the Chileans at the time? If it is for the greater good of America, why can’t some other country do the same for the greater good of their country? Then we might ask, what was the budget of the CIA for these ventures? My guess is it would be far greater than “millions”. The Russians should be accused of being cheapskates, or maybe the CIA of wasting tax-payer’s money?

In one of my futuristic novels, I had a different form of governance, and there was a fringe movement calling for “the return of democracy” (not that we actually have it now – our western governments are of the Republic form). Three very senior people sit around a table discussing this, laughing at the bizarreness of those long-gone times. However, I never foresaw anything quite like the present political mess.

Science in fiction II

In my previous post, I tried to show that science is a way of thinking, but that left the main issue of the title, “Science in fiction” more or less free of comment. On television, at least, there has been a glut of programs showing forensic science, with various level of realism, but the general rules of cause and effect are generally followed, and given that most of the audience would know nothing of forensic science before these programs started, and given their apparent popularity, I think this shows that if properly done, there is no reason to suspect that readers would be put off by science. The important point of such forensic science programs is that there is usually someone present, like the policeman, who knows nothing about it, and hence can be told what is going to happen. I think the concept of “No surprises!” is important. If the reader is told in advance what is going to happen, and why, the reader accepts it, provided the explanations are reasonably clear.

However, you cannot do that with a surprising discovery, and sometimes the story needs just that to drive the plot along. Thus in my novel Red Gold, which was about fraud during the colonization of Mars, I needed a very big surprise of considerable economic significance to expose the fraud. Up until the critical point, it was believed that colonization of Mars might be very difficult because the soil, or more specifically, the regolith, is rather nitrogen deficient. At the same time, the atmosphere of Mars has very little nitrogen in it. These are standard facts and are correct, as far as we have been able to find out. Rather remarkably, we have found very few nitrates, which is something of a surprise since we have found perchlorates, and it would be something of a surprise if chloride in the regolith was oxidized to perchlorate, and nitrogen did not convert to nitrates. The obvious conclusion is that there has always been very little nitrogen in the Martian soil, although there is a reason why that reasoning might be superficial.

Accordingly, one question is, did Mars accrete with almost no nitrogen, or did it have some, and that nitrogen has disappeared. This is important, because unless nitrogen is plentiful in what is called a reduced form, life is very unlikely to evolve. Suppose the nitrogen was there in the reduced form: that means there was a lot of ammonia around. If it were, as the atmosphere oxidized and carbon species turned into carbon dioxide, the ammonia would be slowly turned into urea, which would then be carried more deeply below the surface by water. Any urea or ammonia left on the surface would be oxidised to nitrogen, and would contribute to the residue in the atmosphere. The surprise could therefore be simply the discovery of urea, which would act as he fertilizer and make the settlement viable. The important point of this, at least for me, was that the story could have the settlement declared viable at a point where the fraudsters were building up a case to cash in on compensation when the settlement failed.

A feature of a genuine scientific discovery is that once you make it, in most cases it also explains a number of other problems that had been a puzzle. In this case, the problem is, where did Martian rivers come from, Mars is too cold for water to flow now, and when these rivers did flow, the sun was only about 2/3 as strong as now. There is significant evidence that Mars has never been above – 60  for any reasonable length of time. Had there been ammonia around, water can flow down to -80,  so the story can be given more credibility. This, admittedly, is something of a special case, but I think there are other options if we do not need to know too many genuine facts. Thus, if something ‘amazing’ only applies to one thing, it looks suspiciously like the proverbial ‘magic wand’, designed to do nothing more than get the author out of a plot hole.

For interested readers, on December 13, and will have promotional specials of both Red Gold and Planetary Formation and Biogenesis, the latter of which gives far more details of this theory.

How to reward people fairly? 2

In my previous post I raised the question of people being overpaid for what they do. This raises the questions: What is a reasonable reward? Who decides? On what basis do they decide? How much does someone really need to accept the job? Who pays?

The last question is the most straightforward for a company; it is the owners, or the shareholders, who pay. They pay for the salaries, they reap the rewards of success, and they pay the price of failure. Now, you may say, they can afford it, and sometimes they can, but also stop and think about how much of this investment came from pension funds. The managers of the investment funds do not lose, but rather it is ultimately the pensioners, who can least afford it.

Looking at who decides, we now see what I believe is a real problem: the people who set the boss’s salary are often either directly or indirectly setting their own rewards. If the investors vote, it is the managers of the investment funds who actually do the voting, and their salaries and rewards are usually set according “to what is general in the market”, but they in turn are creating the market price by setting CEO salaries/rewards in the companies on which they sit on the Boards. Anyone see a hint of a conflict of interest here?

However, it is the question of what is reasonable wherein the problem lies. A comment on my first post seemed to think that $25 million per annum was reasonable, obviously for a CEO of a really major company. The question now is, why? As I noted in the previous post, someone like Steve Jobs is almost unique, and deserves whatever he can get. There are also some that run small companies, and I have heard of one or two in the finance industry that have made extraordinary returns for their investors, and while they end up billionaires, I see that what they get as quite fair. They made the money in circumstances where just about everyone else was losing it, so they deserve to keep a good fraction of it. A really stellar performance at least justifies stellar returns. The trouble is, only too many get into such positions and turn in quite disastrous performances when the going gets tough. Worse than that, in some cases they can turn in near fraudulent performances, and fraud is probably the least punished crime.

Does fairness matter? I think it will if there is a real resource shortage, as is almost inevitable in the future? If supply cannot meet possible demand, those with large amounts of money have an extremely unfair advantage. To get around this, in my future history ebooks, I have introduced in A Face on Cydonia, a somewhat different system of payment. In this, you can negotiate whatever payment you can get, but there is rationing of all resource-constrained goods, and everyone gets personalized coupons that must be used to acquire them. That means that while higher salaries lead to the ability to purchase more fashionable things, and some other objects such as art that are not couponed, money itself becomes less of a goal. There are no coupons for private jets and so on. Of course, this creates some additional problems that will be part of the plots of future ebooks, however if anyone wants to suggest some, and if they are useful enough to incorporate in some of the follow-up novels, I promise your suggestions will be acknowledged.

How to reward people fairly? 1

Does anyone think economies should not be more efficient? Does anyone think they should not be fair? In the future, resources and opportunities are going to be scarcer, so how do we realize the two goals of efficiency and fairness? This is one of the topics I have included in my futuristic novels, and since I do not have the answers (every answer I postulate, I then show how someone gets around the rules, which then leads to undesirable outcomes) here is the chance for you, the reader, to show me the light.

One obvious current problem is how to reward people fairly? Obviously, what is considered “fair” will vary between people, and it is unlikely that there will ever be detailed agreement, and an example I gave in Red Gold was, on Mars, who gets paid the most: the carrot grower or the pumpkin grower? The carrot grower might claim carrots are more valuable, but the pumpkin grower might claim to produce more oxygen, which everyone breathes, but is inconvenient to charge for its use. There is another problem. Markets appear to be fair, but the general assumption is that the addition or removal of one player makes little or no difference. Where you have only one or two providers for a product, that assumption fails and monopoly behaviour is seldom fair.

What about salaries, particularly for unique positions? Consider Apple Computers. Now it is possible to justify whatever they paid Steve Jobs, because he rescued what was almost a basket case and turned it into what it is now. However, his predecessor took over the leading personal computer company and turned it into a basket case, and at the same time, took home tens of millions of dollars for the privilege of his doing that. That is neither fair nor efficient.

Closer to home (New Zealand) we have a state-owned company called Solid Energy, which, recently, was worth several billion dollars, and is now deep in the minus column. The management, who brought about this disaster, take home what are, for here, enormous salaries. Three examples of their “brilliant management”:

1. They spent something like 70 million dollars on a study to convert lignite to liquid fuels. I could have reached the correct conclusion for a few per cent of that, and got fat on it! There were several reasons why the idea was a lost cause, e.g. they did not own the land, the lignite was very wet, there were major environmental protests promised, the technology is well-known but nobody wants to use it because it is economically wrong right now, and there were more. It was always a dog!

2.  They spent a similar amount of money on a project to grow canola and make biodiesel. The problem was, apart from the fact this is a bad idea in its own right, they planted a huge area in a region where nobody else tried to grow it. The overall yield was negligible, most of the plants well dead before seed formation. They overlooked a golden rule of new ventures: unless you are sure, start with a small experiment. Small costs less when it fails.

3.  Over the last couple of years coal prices were extremely high, so they bullishly expanded. So far, so good. However, they were unprepared for the prices to fall again. Now, you do not have to be extremely bright to work out that the reason prices were high was because supply was short, and the reason for that was that the huge mines in Queensland were shut down due to flooding. Equally, you do not have to be extremely bright to realize that such highly efficient mines would eventually reopen, supply would be full to overfull, and prices would drop. Good management would keep an eye on Queensland, and close down the least efficient in time.

My question is, why did such stupidity justify excessive pay? For that matter, why are so-called investment bankers paid huge bonuses for bubble trading, with the taxpayer picking up the pieces when the bubble bursts? Why do not people who made fortunes generating shonky derivatives and dressing them up all nice go to jail for fraud? That is where I would go if I generated such rubbish and sold it, but it appears that when an “approved bank” does it, it is OK.

None of which answers the initial question, so feel free to offer your suggestions.

Economic governance

I am currently writing a sequence of books that together comprise a “future history”, and one of the questions I am trying to address is, how should we be governed? By what right do some take from the majority? Obviously, the issue is extremely complicated, BUT it is an issue we have to face, because in my opinion, the current situation is far from ideal. Before thinking about that, though, perhaps some thoughts on how we got into this mess are worthwhile, and here, you, the reader, should also contribute.

In the deep past, the ruler was determined by might, then, because that was messy, by bloodline. That had the advantage of having a clear nominated ruler, which stopped the inevitable bloodletting, at least most of the time (the War of the Roses is a clear example of what can go wrong), but there was no consideration given to ability, justice, or anything else. The objective was to stop civil war, and lesser battles for lesser power, and, of course, for those with privilege to retain it. Ownership of land or the ability to operate a craft alone gave opportunity, and land ownership gradually accreted to a number of Lords, while craftwork had limited scope for expansion, and again, the skills were inherited. There were no tech colleges to learn to be a smith; your father taught you. This led to an embedded class system where your life was determined by the status of your parents. This system was static for a number of reasons, but the most obvious was that there were no opportunities to get out of it. The industrial revolution changed that; there were opportunities everywhere and fortunes could be made, but to make them workers had to leave the land.

Even before the industrial revolution, there were pressures to change, largely because there were new opportunities. The existence of colonies meant there was an expansion of land, which led to the American Revolution, while in France, the ruling class totally neglected their obligations. What happened then was that people began thinking about how they should be ruled, which is my question.

We have settled for what we call democracy, but in my opinion, it is deeply flawed. So far, the flaws have not mattered that much, because there have been a continual supply of fresh opportunities, at least in some countries. The masses in India, China and Africa might find opportunities there difficult to come by even now. Technology has removed the dependency on land ownership, but opportunities still depend on resources, and particularly on the availability of energy. Like it or not, sooner or later oil will no longer provide the cheap source of energy that we have experienced, and that will contract opportunities. Now what? What should be the basis of future governance? Winner take all? Fairness? Pre-existing wealth rules?

What started this particular post is the news that Cyprus has a deep problem. Cypriot banks have miss-behaved, at least according to the European Central Bank, and although the details are unclear, it seems to be related to the Greek crisis. So what does the European Central Bank do? They will lend Cyprus the money, but will raid the depositors’ savings to cover most of it. This tactic is not entirely original. It is the method once used by one J. Stalin, so with precedent, it is OK, right? Wrong! It is simply theft. The fact that previously only J Stalin tried this should be some indication that the morality of doing this is definitely on the dark side.

The argument seems to be that the depositors knew the risk, so they pay. My question is, did they? How many depositors in any country have the foggiest idea what their bank is doing, and even if they did know, what could they do about it? Then, consider that in 2007, in the US even the Federal Reserve either had no idea what “Investment Banks” were creating, or alternatively they did, but they did nothing. The bank is fundamental to our economy, so much so that banks are considered “too big to fail”. So, bankers seem to have a charmed life. They can pay themselves whatever they like, do whatever they like, and someone else will pick up the pieces. Is this fair? What part should fairness play in future governance? Why should a banker in one country have the right to steal money from another, then effectively ruin that country’s economy, to cover his/her own ineptitude? Then there are the bankers. If I sold you shares in the Golden Gate Bridge, I would go to jail for fraud, but if bankers sell worthless derivatives that nobody has the faintest chance of understanding, they pass go and take millions in bonuses, while all and sundry lose their jobs, their houses, whatever. Can that be allowed to continue? What do you think?

Indecision: Time for joint venture infighting.

As indicated in a previous post, it took the new Labour government three years to reach a decision on whether to sell any of the durene-rich hydrocarbon stream. Senior business people tend to have big egos, and doing nothing does not feed big egos. Accordingly, some of them began to feel they had to do something, the only opportunities to do anything were against the other parties, hence the dynamics within the three parties to the joint venture began to change. The question was, where did everyone stand?

The very small company was in a rather peculiar position: apart from my experience as a chemist, it had no knowledge, but it was the cause of getting the tender process being in existence, and it was the registered start of the process. Without them, there would be no process, and everyone knew it. I doubt ICINZ had any love for the small party, but they believed the politics of the situation meant that the government would want some New Zealand content, so our position had to be accepted. Subsequent evidence suggested that those politicians could not care less whether there was new Zealand content or not. All they wanted was a clean run at the next election.

Our financier was a major merchant bank that was making a lot of money out of start-ups in the overheated economy that came with the freeing up of the economy in the mid 1980s, but that did not mean it was our natural friend because it also had its eyes on the government asset sales program, so it had good reasons not to irritate the government, and it stood to make more money from the asset sales than it did from this start-up, or so it thought.

The position of ICINZ was also of interest. It represented the multinational, but it had local shareholding, as part of the price that ICI paid to get its preferred sales position. In the normal course of events, the UK parent, ICI, would not be particularly concerned about the dilution of its interest, because it expected essentially all the products that were handled by ICINZ to have originated in the UK, or maybe Australia. They were probably somewhat puzzled that this “colonial outpost” could be the origin of the only cheap source of dianhydrides, important polymer intermediates, in the world, but what could they do about it?

Recall that in the previous protected environment, certain multinationals, including ICI, set up local companies and encouraged these to be good citizens and develop industries in New Zealand. Unfortunately, ICINZ had a poor reputation. As an example of the problem, in the early 1970s, ICINZ decided to get involved with a project to develop montan wax from peat deposits. This project failed, partly for technical reasons (which the UK parent would never have let happen), but in my opinion mainly because, to save money, they constructed the plant near existing road infrastructure, as opposed to close to the better quality resource. Capital expenditure was another interesting exercise, as they had discretion up to a certain amount, beyond that they had to get Australian approval, or seriously beyond that, they needed UK approval and UK management. As it happened, I believe the site they started mining had the worst quality peat. I assume management would have got their knuckles rapped for that, so when the durene opportunity came up, at first they were gun-shy, particularly since the project would compete with two significant UK plants. They hoped the project would go away. When it did not, and when they were superficially locked out, which could mean that one of their opposition might start to get preferences on local sales of all the chemicals they were importing as well, they were only too happy to form a joint venture with a small company if that got them onto the field. The small company could be dealt with in due course.

In a situation like this, perhaps the most important assets a small company has are its contracts. What I found was that all parties honored to the letter their contractual obligations, but anything not specifically agreed was a potential minefield for the smaller partner. One problem with the government delay was that cash kept going out, but the venture was not getting anywhere. The smaller company had to do most of their share “for free”, or through sweat equity. But after the three years of getting nowhere, decision time came and our venture won. It seemed to be well worth it then.

One of the other consequences of this delay was that it gave the participants time to think. During this period we looked at all the chicanery going on in the overheated stock market bubble that was being generated. As one of our financiers remarked, during this period you could float a brick shithouse! That, of course, was of no value to the development of a sound business proposal, but it did give me the inspiration necessary for some of the “bubble–aspects” for my novel “Red Gold”, which outlines the nature of one class of fraud that becomes prevalent in overheated markets.