Posts by Tom Foale 1

It does work, sort of

I worked with Moley for a few months. It does exactly what it says - copies a chef exactly. Both the ingredients have to be exactly the same as the chef used to get the same dish, and they have to be placed in the right position, plus or minus a few mm, and in the right pots. This won Best in Show at CES 2005.

At 70k it's not aimed at the hoi polloi, but there's quite a big market that will buy it.

There is a way to make the whole thing work as a seamless solution that delivers reliable meals, and the robot isn't where the real value is, but I'd have to shoot you if I told you.

Adam Smith is misunderstood

Adam Smith was first and foremost a moralist, and his primary concern was the perverse incentives of business owners and property owners, given power, to subvert the national wealth for their own ends. Hence he first had to show how the wealth of the nation came about - through pursuit of self interest. So Smith's writings were about the morality of the politico-economic system, not just economics.

We now know that the basis of economics is trust, of which money is just a convenient form. Trust in institutions accounts for all of the difference in average income between a state like Somalia and the UK, or 99.5% of the average British income. Loss of trust destroys wealth, as happened in 2008 when the banking system lost trust in the CDO, sending the world into recession. Crashes are due to sudden and contagious loss of trust. Trust is hard to gain, easy to lose.

Laissez-faire liberalism is a cargo-cult version of free markets, ignoring the many assumptions which are necessary for perfectly competitive free markets to work without regulation - including the fact that we are far from "Homo Economicus". It will fail, and it is failing in the USA and UK, as the gap between rich and average continues to widen.

Another Tim, Tim Harford (whose books should be mandatory reading for every wannabe politician) recently asked 5 middle-of-the-road economists what policies they would adopt if they were in charge (http://timharford.com/2015/04/the-economists-manifesto/). This produced some brilliant and very well argued answers. Many of which are in line with what you have written.

Many economists saw the crash coming. Warren Buffet called CDOs "toxic waste" but many banks still treated them as real assets equivalent to cash on the balance sheet. Even I saw the crash coming, and I'm no economist, I was already advising friends not to buy houses at the inflated prices of the time. What I and nobody else could predict is the timing of the crash, because money is only the exchange of promises and the economy is only the trust in those promises. The crash happened when banks stopped believing each other's promises -or at least the promises made by the issuers and valuers of some of the fancier promises like CDOs. Reagan said "trust, but verify" - it was mark-to-market rules that exposed the loss of trust, because banks suddenly found they could not find a price for these "assets". However, a deeper look at what underlay the promises, such as the risk of mortgage default for a small rise in interest rates, would have identified the problem much earlier and led to a much earlier but shallower crash.