Economics – Alexandru Diduc

Approaching the Singularity Point

The singularity is a point where conventional rules break down and predictability collapses. It manifests across our intellectual landscape in remarkably consistent ways. In mathematics, singularities mark where functions explode to infinity or become undefined, revealing the boundaries of analytic methods. In physics, they represent the extreme conditions at black hole centers and the universe’s origin, where spacetime curvature becomes infinite and our best theories fail. Engineers encounter singularities as critical failure points: robotic arms losing control authority at certain configurations, stress concentrations approaching infinity at crack tips, or control systems becoming unstable at specific parameter values. Yet perhaps nowhere is the concept more consequential – and contested – than in the realm of technology and artificial intelligence, where “the singularity” has become shorthand for a hypothetical inflection point that could fundamentally redefine human civilization itself or, arguably, bring it to an end.

Source: https://www.kaspersky.com/blog/secure-futures-magazine/technological-singularity/32158/

In computer science and futurism, the singularity represents a predicted moment when artificial intelligence surpasses human cognitive capability and enters a recursive self-improvement cycle, accelerating technological progress beyond our capacity to understand or control. It does not have to actually surpass the human intelligence – the control of the narrative is more than enough especially when the existing narratives are challenged and easily cancelled. Continue reading “Approaching the Singularity Point”

Systemic crisis: S&P 500 performance 2008 to 2025

The past 20-25 years are interesting because of the frequency of economic crisis that become rather frequent, way more frequent than they should be. The economic model is in a systemic crisis, which shows in symptoms. Here is an interesting one – the overlay of 2008 to 2025 S&P performance. Since, the roots of the problem were not addressed when they were still manageable with little blood in 2008, the bleeding will be worse now. The common sense says, you can hide the dust under the rug, but there is just that amount of dust, which the rug can hold until it can not anymore. The 2008 solution delayed the crisis, but not fixed it. And sure enough, there is the pendulum effect – the more one postpones the settlement, the harder it will hit back.

Source: https://x.com/great_martis/status/1946334242881040791

What are our future prospects? The answer from Peter Frase’s “Four Futures” book

The current global landscape presents a deeply contradictory and bewildering picture. The sensation that the world has gone mad is reinforced by the simultaneous coexistence of mutually exclusive trends. On the one hand, declarations are heard about the end of capitalism in its traditional form, based on infinite growth, as capital has reached its limits of profitability. Concurrently, we are witnessing the end of globalization and a shift towards region-centrism, which exacerbates geopolitical tensions, – something I was talking about back in 2020. On the other hand, there are high expectations for the Fourth Industrial Revolution and artificial intelligence, which lay claim to the role of a new engine of progress. However, this technological optimism exists against a backdrop of numerous military conflicts, accompanied by rhetoric about “peace,” which only heightens universal distrust and the perception of other actors as a threat—an attitude that has become the norm in this transitional period. Statistics reveal a deeply challenging condition for individuals: economic pressures threatening unemployment and income loss are battering not only the lower but also the middle class globally, with fewer jobs being created. This distress fuels a retreat from living the life in its complexity into substance abuse, gaming, and porn, mental health issues, suicides, leading to declining demographics, radicalization of views, and widespread dissatisfaction. The once-omnipotent media, which previously managed to channel the narratives, is now losing its means of message control – the trust is in true scarcity.

The entire world is, in essence, in a state of transit towards a new economic, political, and technological order. Searching for a framework to perceive the happening, I stumbled at Peter Frase’s book Four Futures. Frase uses “social science fiction” and “ideal types” to map out four possible post-capitalist worlds based on two variables: the level of scarcity or abundance (ecological crisis) and the level of hierarchy or equality (class power). While the author argues – or perhaps hopes – for a positive synthesis among the alternative future models that may lead to a solution that favors the humane development, personally I am less optimistic given the traceable record of the past decisions of the elites to choose and pursue self-interests ultimately bringing the inevitable just to maintain the status quo. I believe, we rapidly approach the point of singularity, where “either/or” will happen with only 2 variables on the table – 1 and 0.

I hope you took the bite, so let me briefly present the Frase’s future options adding a few of my thoughts on top of the topic.

Four Futures: Life after Capitalism

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Formation of Regions: making sense of global politics

Imagine, you are a decision-maker in an international firm. You come out of comma and now you try to catch up with what you missed from the recent news. Would you be surprised to learn about the recent US claims on Canada and Greenland, reaction of the EU, other regional developments?

Depending on how long you were off, you will find an unexpected resonance with the geopolitical developments that have unfolded during your absence from active decision-making in examining Maurice Gomberg’s 1942 “Outline of Post-War New World Map (image below)”. You would note the European policy circles in a state of profound puzzlement over recent American statements regarding territorial interests in Greenland and rhetorical positioning toward Canada – pronouncements that may seem unprecedented but in fact echo Gomberg’s vision of hemispheric consolidation under dominant powers.

Source: https://en.wikipedia.org/wiki/Outline_of_the_Post-War_New_World_Map

The map proposed a post-war order organized into vast regional blocs—a United States of America encompassing much of the Western Hemisphere, a Soviet-dominated Eurasia, and other spheres – prefiguring patterns we observe today: Continue reading “Formation of Regions: making sense of global politics”

The Culture of Rush and Slow thinking

Slow down! This is going to be a long post, but it is worth you time. If you are in a rush, go down to the last paragraph.

In a world of a constant rush, who is doing the slow thinking for you?

THESIS
It’s not just your imagination. The pace of life is accelerating in spite of all of the conveniences that we are exposed to, such as airplanes and fast trains, quick cars, productive computers, smart phones, smart houses, Internet with its instant availability, dishwashers, laundry machines, mixers, smart and functional food processors, robotized lawn mowers and abundance of other tools that are supposed to free up the time. The same is the situation at work, where work processes, production schedules and pressure to commit to rapid decision-making require an immediate action. This trend is nurtured in the public culture with its rapid-fire news cycles and next-day delivery to “speed-watching” videos and the relentless pressure to be more productive, we are all caught in a current of increasing speed. While often exhausting, this trend is not arbitrary. However, a solid question retains its validity whether we recognize the rush or not: towards what are we all rushing… towards what and, most importantly, what for?

The rush culture is built by the environment around us. It builds on an interesting connection to the processes of our individual, internal thinking with an outcome which is not pretty. The persistent rush is the logical outcome of a powerful convergence of technological, economic, and social forces affecting our fast and slow thinking (processes described by Daniel Kahneman) in a way that makes sense, while making no sense. Such duality is absurd, but it seems that humanity as a kind and its individual agents somewhere along the way gave up and embraced all of the absurdities to be able to discern any and more importantly do something about it. Please, follow me and I will show you what I noticed in a minute or so.
For simplicity, let’s consider these three reasons why our world is systematically speeding up – the technological, economic, and social forces. I am sure, these dimensions are not exhaustive, but sufficient to see the pattern and patterns is what matters, when one tries to see a bigger picture.

Technology is the primary driver of acceleration, creating and then catering to an expectation of immediacy. It establishes the feedback loop of instant gratification. Do you remember the clicking sound of the modem on your Windows 95 PC dialing the network provider and how long it took to load a webpage or download a favorite song? We’ve moved from dial-up internet to 5G. A delay of a few seconds in loading a webpage or video is now considered unacceptable. This eradication of technological waiting has rewired our patience, making us expect the same instantaneous response from other facets of life. Now, couple that with social media and news feeds powered by algorithms that prioritize engagement. Content that is new, shocking, or controversial gets pushed to the top, creating a relentless, 24/7 news cycle. The race for clicks and views incentivizes a faster churn of information, leaving little time for reflection. On top of that, the wide spread of productivity software, communication platforms, and automation tools, which are designed to help us do more in less time, did not produce more free time for its users. In fact, we end up in the “productivity paradox”: instead of creating more leisure time, we simply fill the saved time with more tasks, raising the baseline expectation for output ending up in a ferocious rat race chasing the undefined “better life”.

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Is Moldova still a failed state (2025 update)?

As a born on the territory of the Republic of Moldova, I naturally tend to follow what is happening in the country. Normally, I refrain from commenting about the political events because find it as interesting as commenting flea racing. Why would I change the habit?

While checking through my old notes and files, I stumbled upon something I wrote in almost ancient 2008. We were assigned to produce an essay arguing why our home country is a failed state for the Political Economy class. It was quite interesting to read it after the passage of time. I am pleased to notice that although I had rather naive perceptions about the potential of better future for the Republic at that time, the background analysis of the problem still remains rather valid.

So, what has changed since?

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Essay: “Republic of Moldova – Natural Tragedy or Controlled Disaster” (2008)

PDF version: Diduc Alexandru – Political Economy, Moldova

Alexandru Diduc
April 22, 2008
Moldova – Natural Tragedy or Controlled Disaster
4052 words

Abstract

This essay will focus on the reason for the instability in Moldovan economy and the failing state the Republic of Moldova is. The central idea of the paper is that the causes for the controlled disaster in the country are not only internal but mostly they are of the external origin. The internal causes are the mostly agrarian economy and the transnistrian conflict. The external causes are the incompatible geopolitical and geo-economical interest of the EU and Russia. Transnistrian region and Moldova is used in this game as a small change and a tool of control. The change in the wellbeing of the united Moldova is expected to come with the settlement of the conflict and dynamic implementations of reforms.

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Introduction

Moldova is widely famous for its wines, its poverty and 4,163 km² of uncontrolled territory on the left bank of the Dniester River. It is a matter of fact that Moldova is a failed state and a weak functioning economy. These are just consequences of the more complicated processes that influence the outcome. The Republic of Moldova (RM) is just a small card played on the table in the geopolitical game of the superpowers in the region. Unmatched geopolitical and geo-economic interests of pragmatic and contradicting Russia and EU and of ambitious Moldova are the main reason for the failed state and poor economy as Moldova is now. But the change is expected to come in 2009 and the following years with the settlement of the Transnistrian conflict and the energetic implementation of the reforms.

My assumption is that there are no any inner parties interested in fueling the instability in the state between Moldova and Transnistria, and which stand behind the weak economy. Thus, there should be any external forces, Russia and EU, which directly or indirectly influence the present situation in the economy and state. Moldova is a peaceful nation and the nation that highly values stability, predictability and wealth. Moldovan people like to work and enjoy the times of economic and political stability more than anything else. Moldovans have low but firm expectations of stability, which they pursue either through the migration or short term employment abroad. But mostly these are the short-term solutions and in the good times the population is going to return. Thus, the resolution of the Transnistrian conflict and dynamic economic reforms along with the EU integration will bring the prosperity and positive change in this region.

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Globalisation no more… what is next?

Image source: http://www.chinadaily.com.cn/a/201907/01/WS5d196537a3103dbf1432b248.html

Mark my words, but the situation we have today (as of May 2020) in the economy and politics globally is the end of globalisation as we know it. If you missed somehow in the notion of globalisation, it is, according to IMF 2000 definition, “the increasing integration of economies around the world, particularly through trade and financial flows.” Besides the trade and capital movement, it relates among many others to the movement of people and the spread of knowledge/technology as some of the most important mechanisms for the existence of globalisation. We are about to witness how all of these are going to be trashed or replaced. Replaced with what? Now, this is a good question. To even distantly approach it, we need to see why/what for globalisation exists, what happens now (past years, even a decade) to threaten its existence. Only then we can imagine/fantasise what is next.

Why globalisation exists?

It is almost a common sense that trade is a part of the big geopolitical game and the rules were set to serve the interests of the main beneficiary (-ies). Let me reemphasise: it was assembled by the interested player(s) for the expected benefits of the interested player(s). If someone is good at swimming, it would be naïve to propose to compete at marathon running especially with professional runners. If you are good at swimming, then make everyone swim. The existing global trade system was designed to facilitate trade in those areas, where the western civilisation has a relatively good edge against the rest. The system is designed to support the trade of high-tech products, goods and services, and financial instruments which yield thicker profit margins. The rest of manufacturing, for instance, is considered insignificant and was outsourced to the second and third world countries. No one designed the system for the resistance of the heavy stress conditions, global crisis, major threats as this is not the main strength of the one who sets the rules.

In the post-Soviet era/post-Cold War era, it was considered that the development of the globalisation would secure the leading position of the USA as the main beneficiary. The foreign policy of Ronald Raegan administration brought “the giant” to the knees. The decision was made to ransack the Soviet Union, Russia and the satellite states, benefiting of the abundant resources and relatively unsaturated market of Eastern Europe. Think for a moment about the geographic spread: from Eastern Germany on the west, to Yugoslavia on the south, up to Estonia and all the way to Russian Kamchatka laid the market to consume the manufactured products and resources awaiting for someone to get hold of them. The pie was too big to digest alone so the States brought to the table its Western European allies. At about the same time, China was allowed to get access to the globalisation system. China, at the time, was a huge pool of cheap human resource and outsourcing some of the insignificant tasks made good sense. Then producing more advanced products made equally good sense, since no one expected anything of China. The players made money out of this cooperation, but no one expected that China can win the race. The race was for the white gentlemen to win – not for China. Fast forward to present days, here we are: China is the biggest manufacturer, biggest economy, with the biggest internal market, projecting its influence there, where only the gentlemen were allowed (Africa, Middle East, Europe and even Americas).

What happens now?

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Internationalization strategy: how to go from local to global

Internationalization is a complex process with many scientific articles dedicated to that. Comprehensively presenting it in a format of a short blog post is a task that requires major simplifications. Nevertheless, here is what it takes from a company to consider this major step in terms of market, operation modes and product – internationalization strategy canvas.

Understanding the big picture is critical for strategic decision-makers. Implementation of a decision too early or too late can turn very costly. Especially in the context of internationalization, a right decision in a right time makes an ordinary company extraordinary. The challenge is though how to understand the timing and correctly interpret the operational context of a firm, when external environment is always in a change?

International trade is an “infinite game” (see Carse 1986). Good news is that rules are the same for all players; the pace of the game is different, but stages are the same; the sequence of steps is different, but steps are the same. Each player sets own goals and selects a strategy. As it is common for the games, choices come with a price tag. Once the setup of the game is clear, the action is just a matter of imagination.

Figure 1. Internationalization process canvas

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