Occupy Innovation

Actress Anne Hathaway marches with demonstrators on the two-month anniversary of Occupy Wall Street. (Photo: Elana Levin)

Two days after thousands of police broke up the around-the-clock occupation of New York’s Zuccotti Park, tens of thousands of demonstrators converged downtown to celebrate the two-month anniversary of Occupy Wall Street and stress that with or without Zuccotti, the protest and its message remained strong and relevant.

One of those in the march, the actress Anne Hathaway, carried a sign that read “Blackboards not Bullets,” and though much attention was predictably paid to the 29-year-old star’s presence, the message she carried that day shouldn’t be ignored.

A month earlier, shortly after a company called Boston Dynamics unveiled a prototype of its “Legged Squad Support System” AlphaDog, a walking robot financed by DARPA, the Defense Advanced Research Projects Agency, Rachel Maddow featured the technological marvel in a segment contrasting current advances in military hardware with what is currently on offer for consumers.

Her featured guest in that segment was US Rep. Rush Holt (D-NJ). Holt had, a month earlier still, gone on record in the midst of Washington’s deficit hysteria arguing that the government should actually spend more on scientific research, writing that the framing of the budget debate set up a false choice between basic science and elementary education.

Nothing demonstrates the effectiveness of the young Occupy movement more than the rapid shift in frames. The “cut, cut, cut” of the manufactured deficit crisis that Holt had to fight against has been largely drowned out by the chant of “banks got bailed out; we got sold out” and the reevaluation of spending priorities that came with nationwide demands for an accountable government acting in the service of the 99 percent.

But, to state the obvious, four months of Occupy has not been enough to really transform the way the federal government prioritizes spending, nor has the movement yet transformed the way the country evaluates real progress.

For instance, with December’s formal end of US military operations in Iraq, and a promised drawdown coming in Afghanistan, as well, has anyone in official Washington (or in the commentariat, for that matter) started talking about what America will do with its “peace dividend?”

In fact, the beneficiaries of profligate wartime spending are marshaling their surrogates to warn that cuts in Pentagon spending will actually subtract valuable research dollars from the economy. Citing large contractors like SAIC, Computer Sciences Corporation, and CACI International, a recent New York Times story tried to make the case that massive military spending in the last decade has been an important catalyst for the economy and for innovation in the broader marketplace. If these companies–all three of which have been involved in major scandals over the last several years–stand for anything, however, it is that the unchecked expansion of the defense budget is a catalyst for shameless corruption. (An observation glaringly absent from the Times piece.)

Indeed, for all the sincere excitement that might spring up around robot dogs, or a stream of other “war dividends” that might find some purpose in the consumer marketplace–from high-resolution cameras to improved prosthetic limbs–the wow factor not only obscures the full cost of the innovation, but distorts the measure of innovation itself.

A marketplace of ideas?

Many conservatives (and neo-liberals) love to argue that the marketplace is the best judge of winners and losers. Competition is the key to innovation, they argue. But in the consumer market, innovation isn’t always about providing a better product. Just as often, “innovation” means exploiting a leverageable point of difference or streamlining the manufacturing process in pursuit of better profit margins.

Was Coke Zero an innovation over Diet Coke? Was Nexium an innovation over Prilosec? Certainly, marketing said “yes,” but the research, at least in the case of the pharmaceuticals, stated otherwise:

It’s expensive to produce an innovative drug. On average, the bill runs to more than $400 million. So drug companies often take a less costly route to create a new product. They chemically rejigger an oldie but goodie, craft a new name, mount a massive advertising campaign and sell the retread as the latest innovative breakthrough.

This strategy has shown great success for turning profits. Nexium, a “me-too” drug for stomach acid, has earned $3.9 billion for its maker, AstraZeneca, since it went on the market in 2001. The U.S. Food and Drug Administration classified three-fourths of the 119 drugs it approved last year as similar to existing ones in chemical makeup or therapeutic value.
….

Nexium illustrates the drug makers’ strategy. Many chemicals come in two versions, each a mirror image of the other: an L-isomer and an R-isomer. (The “L” is for left, the “R” is for right.) Nexium’s predecessor Prilosec is a mixture of both isomers. When Prilosec’s patent expired in 2001, the drug maker was ready with Nexium, which contains only the L-isomer.

Is Nexium better? So far, there’s no convincing evidence that it is. . . .

The study goes on to point out that the money spent on developing and marketing a “me too” drug is money not spent researching truly new treatments.

The energy sector practically turns the notion of marketplace innovation on its head. From underpriced leases for drilling on federal land to underwritten loans for construction of new nuclear reactors, “innovation” has been about finding ways to preserve the status quo.

Take, for example, a so-called “next generation” reactor design, known as the AP1000, certified by the Nuclear Regulatory Commission just before Christmas. Though touted as a “radical” new design, in reality, the new model represents little more than a riff on 50-year-old pressurized water reactors. While manufacturers contend the AP1000 offers improved options for backup reactor cooling in an emergency, the real “innovations” for plant owners are the number of systems and components that do not differ from what has already been licensed and manufactured – shortening the approval process – and the promise that the new model requires fewer components, far less concrete and rebar, and smaller staffs to operate, thus saving on construction and labor costs.

Nothing about the new reactor design has actually impressed “the marketplace” one iota. No bank will indulge the risk – without billions in federal loan guarantees, none of the reactors now approved and fast-tracked for construction and operating licenses would ever come close to getting built. In addition, the federal government is still paying to clean up after mid-20th Century uranium mining, decades of nuclear fuel processing, and numerous radiation leaks of varying size, and will remain saddled with the burden of providing a long-term storage solution for nuclear waste. The Price-Anderson Act also shields the nuclear industry from the full liability of any accident. None of these costly government investments supports innovation – indeed, it could be argued they prevent it.

The military innovation complex

But as costly as it is to backstop the nuclear industry, it pales in comparison to the military model for innovation. Far from being tested in the “marketplace,” military innovations seem to go through a “spaghetti test” – throw multiple options at the wall, and see if any stick. This is a phenomenally expensive model, and can also cost dearly in terms of lives, but it is a system born of the “cost is no object” approach encouraged by the shock of war, and sustained by the Military Industrial Complex and its enablers.

As a result, as Rep. Holt observed, “The military spends a lot more on development than research. More on the ‘D’ than the ‘R.'” Tax dollars spent in this sector contribute little to primary research, the kind that has the potential to radically shift paradigms. Instead, military innovation focuses on incremental improvements, usable in theater as soon as possible.

And the incremental approach is notably desirable for military contractors. There is so much more profit in producing an assortment of tweaked prototypes and modest upgrades than there is in having a few scientists or engineers work on models. A war–and the war frame for thinking about innovation–might get you many relative improvements, but it rarely produces radical inventions.

In addition, Holt points out that military R&D is often less fruitful for the greater economy because much of the research is kept secret.

Military spending is also much more capital intensive than investments in other vital sectors – and a new study from the Political Economy Research Institute (PERI) quantifies just how much more.

The study, titled “The US Employment Effects of Military and Domestic Spending Priorities” (PDF), calculates the number of jobs created by a set amount of military spending, and then contrasts that with what the exact same amount would do when invested in four non-military alternatives: tax cuts for personal consumption, clean energy and efficiency, health care, and public education. The differences are staggering.

PERI found that $1 billion in military spending produced 11,200 jobs, which sounds impressive until it is placed next to the alternatives. Tax cuts, no reputable economist’s favorite way to create jobs, still outpaced military spending – $1 billion in tax cuts would create an estimated 15,100 jobs. But even that looks weak when compared with more direct government investment in crucial alternative sectors. A billion dollars spent on clean energy and improved efficiency would result in 16,800 new jobs. The same amount in the health care sector would mean 17,200 jobs. And $1 billion of government investment in education would create 26,700 jobs – well over twice the jobs created by the same amount spent on the military.

It is often argued that military jobs are better compensated than others – mostly because of the superior health benefits – however, the money spent in the private sector is so much more efficient at job creation that more jobs are created across the spectrum, even in the upper tiers. (Indeed, for jobs in the upper brackets, clean energy investment leaps ahead of health care – though, in every category, education is the leader in dollars-for-jobs effectiveness.)

Such numbers have major and obvious implications at a time when, in Washington, anyway, leaders talk of the need to cut government spending, but paradoxically also warn of the consequences – especially with regard to employment – of cutting the military.

Innovation and its discontents

So, while it is probably human nature – and an admirable part of it – to get excited about an agile and intuitive robot, the rapid improvements in mechanical dog technology raise important questions: What if the US had the same level of commitment to innovation outside the military? What if the government took just a fraction of the money it poured into Iraq and Afghanistan – wars arguably fought to help preserve America’s access to cheap oil – and instead invested it in renewable energy innovations and improvements in energy efficiency? What if some of the $2,200 spent by every resident in the United States on the military in 2010 (to use the most recently available figures) had been repurposed for education? How much lower would the jobless rate be? How many innovations and improvements equal to or better than AlphaDog would now be receiving the oohs and aahs of an amazed public?

Or is it, as Ezra Klein observed in a response to the Times story, that military R&D is “economically inefficient but politically efficient“–that there might be better ways to spend a research dollar, but the one that Beltway thinking can sustain goes through the Pentagon? Not only is that construct what Klein calls “depressing,” it makes several assumptions about the values of extravagant wartime budgets while ignoring the known and numerous downsides. (The Times piece itself includes two professors who posit without any apparent irony that the biggest economic benefit of inflated defense spending is “what it prevents”–presumably, war and other threats to domestic security.) But, worst of all, Klein’s take on realpolitik is myopic and shortsighted.

If the US fought for the post-carbon economy the way it fights for nebulous state-building goals in foreign wars, the future would be brighter, cleaner, safer and cheaper, with more jobs and perhaps – because it would need to secure less of that foreign oil -fewer wars. If the country built new classrooms with the same urgency it built armored vehicles, more American teens could be choosing between colleges instead of choosing between minimum and sub-minimum wage jobs – and fewer would eventually need public assistance. If the government spent more on blackboards and less on bullets, it would create more jobs today and more innovation in the future.

Neither the military nor the marketplace has proven to be the great incubator of innovation that proponents of defense spending and free markets wish to believe. Instead, both facilitate what author Malcolm Gladwell calls “tinkering” – refinements that might improve upon a big invention, rather than the big invention itself. This is not to slight tinkering: Edison’s light bulb and Apple’s iPod represent the kind of tinkering that can markedly affect everyday life. But those were improvements on earlier discoveries, not the world-changing discoveries, themselves (and, as has been demonstrated, not every tinkering innovation is for the benefit of the end-user).

No, if the United States truly wants to “think different” (as Apple’s advertising once implored), it needs to once again embrace the innovations upon which the country was founded: Real representative democracy, transparency, accountability, checks and balances of three co-equal branches of government, no taxation without representation, trial by jury, a wariness of foreign military entanglements, and, as was added soon after Independence, access to free public education as a right. They are ideals remarkably similar to those embraced by the Occupy movement – if not assumed by most Americans to be part of their national identity.

But they are precepts that have been tarnished by the masters of the marketplace and the adherents of the military industrial complex. Perhaps they don’t need re-invention, but it appears some serious re-dedication is in order. If the innovation in public discourse known as Occupy Wall Street can continue to re-frame the crisis, rethink the role of government and reinvigorate the democracy, then maybe America can re-occupy itself.

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(A version of this story previously appeared on Truthout under the headline Occupy Innovation: Neither the Military Nor the Market Does)

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The Party Line – November 4, 2011: Self-Styled Clean Energy President Embraces Future That’s Dirty, Dangerous, and Expensive

“Reeling from months of protests, President Barack Obama’s advisors are worried. . . .”

So begins a November 3rd story from Reuters assessing the potential political fallout from an administration decision to green-light the Keystone XL pipeline, TransCanada Corp’s plan to move crude oil from the tar sands of Alberta to refineries in Texas. Reading the whole piece, one can’t help but feel that Obama is still of a mind to go ahead and OK this dangerous and much-derided plan, it is just the Obama 2012 campaign that’s agonizing over how to spin it.

Back in 2008, Obama the candidate seemed to understand the threat posed by global warming, and he spoke often of moving away from carbon-heavy fuel sources like tar sands. Now, a good part of what is considered the president’s “base,” it seems, understands that the transcontinental pipeline is not only a danger to farmlands and aquifers, but also a betrayal of a campaign promise.

Don’t think this is the dynamic at play? Look at recent administration boasts about such “green” initiatives as raising the Corporate Average Fuel Economy (CAFE) standards, or just read Obama campaign spokesman Ben LaBolt in the abovementioned Reuters story:

“The president has done more to wean us off of foreign oil and transition the nation to a clean energy economy than any other,” he said. “When Americans compare the president’s record promoting clean energy and America’s energy security to those of the leading Republican candidates, who don’t even believe that climate change is an issue that we need to address and would cede the clean energy market to China, there will be no question about who will continue our progress.”

Moving beyond the observation that this is the same “We suck less” positioning that performed so poorly for Democrats in 2010, there are indeed many questions raised by Obama’s apparent take on our energy future.

LaBolt’s claim, “The president has done more to wean us off of foreign oil and transition the nation to a clean energy economy than any other,” first begs the obvious fact-check: Alberta is not in the US, and tar sands crude is no one’s idea of clean energy. But it is not a big leap to read this statement as something more inclusive, something meant to refer to all of the Obama administration’s moves in the energy sector. Indeed, with references to clean energy, climate change and China, the Obama campaign is probably hoping for some to hear a commitment to solar power, while others might understand it as an embrace of nuclear fission.

Intent notwithstanding, administration moves have underscored the latter–a White House enraptured with nuclear power–just as events continue to lay bare the lie that US nuclear power generation could fit anywhere into a tale of clean, domestic energy advocacy.

A new stupid way to boil water?

On November 1, the Nuclear Regulatory Commission approved a new design of what is called an Advanced Boiling Water Reactor (ABWR) slated for construction in South Texas. The plan to build two 1,350-megawatt reactors was originally pitched five years ago, with the original plant operator, NRG Energy (so nice they named it twice!), requesting design certification for Toshiba’s version of ABWRs in 2007.

But in 2009, the NRC made mandatory what had previously been a voluntary requirement that plants would be able to withstand a 9/11-style aircraft attack and continue to cool the reactor and spent fuel pools. The ABWR design, and its certification, had to be amended. This amended design is what just received the NRC’s thumbs-up.

A funny thing, however, happened since the original request: NRG stopped investing in the project. NRG was the prime investor in the “South Texas Project Nuclear Power Co.,” which is the name of the body that originally submitted the amended design. Without NRG, Toshiba has been shepherding the certification request, the one just approved by the Nuclear Regulatory Commission. Just one hitch, though, foreign companies are not allowed to operate nuclear power plants in the United States–a point that seems to have been missed by the NRC (and by most establishment news reports about the certification).

This design certification without funding or domestic management in place provides an almost comic counterpoint to the funding-without-certification approach taken by the Obama administration for the AP1000 reactors proposed for Georgia’s Plant Vogtle.

The AP1000, a riff on a Pressurized Water Reactor design, is supposed to provide passive cooling inside a reactor in the event of a loss of power to the active cooling system. There are many questions about the AP1000, and it too had to be altered to comply with the 2009 9/11 rules, but the most recent delay in certification comes at least in part from concerns that the design should also account for a Fukushima-like seismic event. At this point, Vogtle’s operator, The Southern Company, and the NRC have not come to a meeting of the minds.

But these concerns–or, at least, delays–did nothing to dampen the enthusiasm of the White House. In February of 2010, without any design certification in place, none other than Barak Obama himself announced $8.33 billion in loan guarantees for Southern. This was done with fanfare at a public event (there’s even a YouTube of the announcement).

So, certification with no funding, or funding with no certification–to the US federal government, it doesn’t matter. And it spells out two points in bold type: The Obama administration stands squarely behind nuclear power. . . and the marketplace does not. Without help from what the campaign would have voters believe is the all-time greatest champion of clean, green, domestic energy, new nuclear reactors would not be built in the United States.

Uranium extraction is not clean and never has been. The US is still paying to clean up from mining in the southwest that ended half a century ago. And today, uranium is not really a domestic fuel source, either. A list of the world’s top uranium producers looks like this: 1) Kazakhstan, 2) Canada, 3) Australia, 4) Namibia, 5) Russia, 6) Niger, 7) Uzbekistan. The US comes in eighth, accounting for just 2.9 percent of the world’s uranium production. By contrast, the US ranks third in global oil production, extracting almost 11 percent of the world’s crude.

And uranium doesn’t jump out of the ground ready to go for a nuclear reactor. The processing of uranium ore into useable fuel is a dirty, costly and energy intensive endeavor requiring loan guarantees, waste storage and safety protocols all its own. (And as if to underscore this, House Speaker John Boehner has recently requested federal loan guarantees to build a new nuclear processing plant in his home state of Ohio.)

Fukushima: a case study

A pair of new stories out of Japan provide all the evidence any president would need to honestly evaluate the role of nuclear power in America’s supposedly clean, green energy future.

Fukushima isn’t a single event, it is an ongoing, ever-evolving, always metastasizing crisis. In case anyone thought otherwise, the detection of radioactive xenon in Fukushima Daiichi reactor 2 provided a chance to again pay heed to just how serious things remain at the crippled Japanese nuclear facility.

Though Tokyo Electric Power Company (TEPCO), the nominal owners Fukushima Daiichi, contend that the trace of xenon gas does not represent evidence of a nuclear chain reaction inside the reactor previously thought closest to a so-called “cold shutdown,” they still pumped in boric acid–a substance used to mitigate nuclear fission.

Tokyo Electric may or may not be telling the whole truth in this instance, but evidence from throughout this disaster dictates skepticism. For example, scientists have again revised upwards their estimates of total radiation released from the plant, and a new study explodes TEPCO’s minimalist fairytale:

France’s l’Institut de Radioprotection et de Surete Nucleaire (Institute for Radiological Protection and Nuclear Safety, or IRSN) has issued a recent report stating that the amount of radioactive cesium-137 that entered the Pacific after 11 March was probably nearly 30 times the amount stated by Tokyo Electric Power Co. in May.

According to IRSN, the amount of the radioactive isotope cesium-137 that flowed into the ocean from the Fukushima Daiichi nuclear plant between March 21 and mid-July reached an estimated 27.1 quadrillion becquerels.

Quadrillion is not a number that often comes up in polite conversation, but suffice it to say, it’s a lot. . . even for becquerels. Soon after the March 11 earthquake, Japan revised acceptable levels of radioactive cesium upward. . . to 500 becquerels per kilogram. Though even the 27.1 quadrillion number sort of redefines the phrase “a drop in the ocean,” the really disturbing notion is that with a relatively long half-life, the pattern of Pacific currents, and the principles of bio-accumulation and bio-concentration at play, it is possible that everyone who includes Pacific Ocean fish in his or her diet is now part of an informal, long-term experiment on the effects of low-level radioactive contamination. Or, as the same story as above snidely puts it:

The radioactive silver lining? Radioactive cesium-137 has a half life of roughly 30 years, so if the IRSN estimates are accurate, then [b]y 2041 the Pacific’s aquatic life will only be subjected to a mere 13.55 quadrillion becquerels of radiation.

But long half-lives and long-term health effects require long-range thinking, not to mention arguments about the relative value of human life. Perhaps another fresh release from Japan tells the nuclear story in numbers a deficit-obsessed DC elite can more easily comprehend:

Tokyo Electric Power Co. won approval for a 900 billion yen ($11.5 billion) bailout from the government after the Fukushima nuclear catastrophe to avert bankruptcy and start paying compensation for the crisis.

Trade and Industry Minister Yukio Edano approved the support after the company known as Tepco committed to cutting 7,400 jobs and 2.5 trillion yen in costs. The utility forecast an annual loss of 600 billion yen, its second since the March earthquake and tsunami wrecked its Fukushima nuclear plant.

Eleven-and-one-half-billion dollars–and that only takes TEPCO through March 2013. Who here thinks the crisis will be over by then? It almost makes Obama’s $8.33 billion loan guarantee to Southern look like a bargain.

Almost.

Except that the loan guarantee is just for construction of a yet unapproved reactor design–should Southern, or whatever entity might eventually operate Plant Vogtle, experience an accident, that would likely be a whole other ball of bailout.

But what could possibly go wrong? Well, as repeatedly documented in this column, a lot. Beyond the level-7 sinkhole that is Fukushima, in the US, 2011 alone has seen manmade accidents and natural disasters that have scrammed and/or damaged more than a half-dozen reactors. And with each event, a process of shutdown, repair, inspection, authorization and startup costs time and money that does nothing to provide America with clean, safe, renewable, affordable energy.

Each event does, however, add costs to a variety of segments of the economy. Energy production and utility bills are obvious, but this nuclear obsession also drives up costs for healthcare, food safety, air and water quality, the yet-to-be-solved problem of long-term waste storage, and don’t forget the additional tax burden required to support all the bailouts, tax breaks and loan guarantees for the nuclear industry. The Center for Strategic and International Studies, a US think tank, has also called for a global study of the health effects of long-term radiation exposure as part of an international response to the Fukushima disaster. That, too, is an expense that should be factored into the real cost of nuclear power.

One thing, however, has gotten cheaper since the Japanese earthquake and tsunami gave the world its third top-level nuclear accident since 1979, and that would be uranium. Since March, world uranium prices have fallen some thirty percent. In fact, demand is so low, the French company Areva has decided to suspend its uranium mining in the Central African Republic–for two years.

The market is again speaking, but to those predisposed to cherish the siren song of nuclear power, cheap uranium could easily become the excuse to dash greener, safer alternative energy development.

Since the earliest days of nuclear power, that siren song has gone something like this: clean, safe, and too cheap to meter. Obviously, 2011 has proven none of that rings true, but when an administration believes it can greenwash away the political fallout from a tar sands pipeline, is it such a stretch to see them ignoring the financial and radioactive fallout of nuclear power in their attempt to package Obama as the cleanest, greenest energy president ever?

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I am always happy to see the issues discussed in this column get attention from a broader audience, so I was thrilled to see Rachel Maddow take nine minutes out of her Wednesday show to call attention to what she sees as a scandal no one finds sexy enough to get excited about–namely the dangerous state of nuclear power plants across the US. But her contention that no one is paying attention irks me, at least a little. I have lost count of the number of posts I have devoted to this very subject this year, and I think, throughout, most would say I find much about this subject quite scandalous. So, Rachel, next time you want to talk about this stuff, the next time you want to share your excitement about this scandal, call me.