Has U.S. shale oil entered a death spiral?

The bad news coming out of the shale oil fields of America could all be put down to slumping oil prices. That is certainly a big factor. But as investment professionals like to say, when the tide goes out, we all find out who's been skinny-dipping.

The pattern of negative news from shale country is not just related to price, however. Oil production, it seems, is being overstated industry-wide by 10 percent and 50 percent in the case of some companies, according to The Wall Street Journal.

The CEO of one of the largest players in the industry, Continental Resources, predicted that growth in shale oil production could fall by 50 percent this year compared to last year. In reality, we should expect worse as the industry for obvious reasons tends to exaggerate its prospects.

The greatest good for the greatest number: A doctrine of acceptable losses

In 1776 philosopher Jeremy Bentham wrote a phrase that continues to be central to our modern way of thinking: "[I]t is the greatest happiness of the greatest number that is the measure of right and wrong."

That phrase has morphed into the familiar one cited in the title of this piece. Happiness, however, has been reinterpreted first as "good" meaning something which gives pleasure, a move toward a kind of hedonism. "Good" has, however, become associated with "goods," that is, objects which consumers and businesses buy to further their personal and occupational goals.

This drift from the original meaning of what Bentham called his "fundamental axiom" is, in part, why we are addicted to economic growth and the consumerism that derives from it. We believe that "goods" are good for us and so more "goods" will always bring more good in their wake.

Taking a short break - no post this week

I'm taking a short break from posting this week. I expect to post again on Sunday, January 20.

Democracy, truth, fallibilism, and the tech overlords

In a recent conversation a friend of mine offered the following: "There would be no need to vote on anything if we knew the truth." That statement has such profound implications that I will only scratch the surface of it here.

First, democracy presupposes that none of us knows the truth. We have our experience, our analyses, our logic and our intuitions, but we don't have the truth with a capital "T." We may reliably report our names to bank tellers. This is a social and legal designation, a definition backed by a birth certificate, driver's license, and other official documents. Even here we are obliged to provide evidence of the truth of our identity to the teller.

But whether it is wise to subsidize electric cars, legalize gambling, or go to war are issues that are far beyond simple social and legal designations. Our information on such topics is always incomplete, conflicting and quite possibly unreliable. We have difficulty verifying through personal observation much of what we are told. And, we are prone to errors of logic and to misinterpretations.