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The Rocky Mountains dominate the Western third of the northern and central parts of North America

Farther east of this semiarid region are the well-watered plains of the prairie provinces of Canada and the American Midwest

East of this premier arable zone lies a second mountain chain known as the Appalachians.

North of the Great Lakes region lies the Canadian Shield, an area where repeated glaciation has scraped off most of the topsoil.

The continent’s final geographic piece is an isthmus of varying width, known as Central America, that is too wet and rugged to develop into anything more than a series of isolated city-states, much less a single country that would have an impact on continental affairs. Due to a series of swamps and mountains where the two American continents join, there still is no road network linking them, and the two Americas only indirectly affect each other’s development.

Very few of its tributaries begin at high elevations, making vast tracts of these rivers easily navigable. In the case of the Mississippi, the head of navigation — just north of Minneapolis — is 3,000 kilometers inland.

The unified nature of this system greatly enhances the region’s usefulness and potential economic and political power.

This factor is the primary reason why the major economic powers of the past half-millennia have been Japan, Germany, France, the United Kingdom and the United States.

The vast bulk of the prime agricultural lands are within 200 kilometers of a stretch of navigable river.

First, navigable rivers by definition service twice the land area of a coastline (rivers have two banks, coasts only one).

Second, rivers are not subject to tidal forces, greatly easing the construction and maintenance of supporting infrastructure.

Third, storm surges often accompany oceanic storms, which force the evacuation of oceanic ports.

First are the severe indentations of North America’s coastline, granting the region a wealth of sheltered bays and natural, deep-water ports.

Second, there are the Great Lakes.

Third and most important are the lines of barrier islands that parallel the continent’s East and Gulf coasts.

There are many secondary stretches of agricultural land as well

The rivers of the American Atlantic coastal plain — flowing down the eastern side of the Appalachians — are neither particularly long nor interconnected. This makes them much more like the rivers of Northern Europe in that their separation localizes economic existence and fosters distinct political identities, dividing the region rather than uniting it. The formation of such local — as opposed to national — identities in many ways contributed to the American Civil War.

What is now Mexico lacks even a single navigable river of any size. Its agricultural zones are disconnected and it boasts few good natural ports.

Canada’s maritime transport zones

Its first, the Great Lakes, not only requires engineering but is shared with the United States.

The second, the St. Lawrence Seaway, is a solid option (again with sufficient engineering), but it services a region too cold to develop many dense population centers.

The eastern end of the border could be anywhere within 300 kilometers north or south of its current location (at present the border region’s southernmost ports — Brownsville and Corpus Christi — lie on the U.S. side of the border). As one moves westward to the barren lands of New Mexico, Arizona, Chihuahua and Sonora, the possible variance increases considerably. Even controlling the mouth of the Colorado River where it empties into the Gulf of California is not a critical issue, since hydroelectric development in the United States prevents the river from reaching the Gulf in most years, making it useless for transport.

In the north, the Great Lakes are obviously an ideal break point in the middle of the border region, but the specific location of the line along the rest of the border is largely irrelevant. East of the lakes, low mountains and thick forests dominate the landscape — not the sort of terrain to generate a power that could challenge the U.S. East Coast.

So long as the border lies north of the bulk of the Missouri River’s expansive watershed, the border’s specific location is somewhat academic, and it becomes even more so when one reaches the Rockies.

On the far western end of the U.S.-Canada border is the only location where there could be some border friction. The entrance to Puget Sound — one of the world’s best natural harbors — is commanded by Vancouver Island.

It is common knowledge that the United States began as 13 rebellious colonies along the east coast of the center third of the North American continent. But the United States as an entity was not a sure thing in the beginning

Most of the original 13 colonies were lightly populated by European standards — only Philadelphia could be considered a true city in the European sense — and were linked by only the most basic of physical infrastructure. Additionally, rivers flowed west to east across the coastal plain, tending to sequester regional identities rather than unify them.

With European attentions diverted elsewhere, the young United States had an opportunity to carve out a future for itself relatively free of European entanglements.

This was not England, an island that forced the early state into the expense of a navy. This was not France, a country with three coasts and two land borders that forced Paris to constantly deal with threats from multiple directions. This was not Russia, a massive country suffering from short growing seasons that was forced to expend inordinate sums of capital on infrastructure simply to attempt to feed itself.

The early nation was particularly vulnerable to its former colonial master.

There are only two ways to protect a coastal community from sea power. The first is to counter with another navy.

The second method of protecting a coastal community is to develop territories that are not utterly dependent upon the sea.

Achieving such strategic depth was both an economic and a military imperative.

The United States was entirely dependent upon the English imperial system not just for finished goods and markets but also for the bulk of its non-agricultural raw materials, in particular coal and iron ore.

The Appalachians may not be the Swiss Alps, but they were sufficiently rugged to put a check on any deep and rapid inland expansion.

The Ohio River faced the additional problem of draining into the Mississippi, the western shore of which was the French territory of Louisiana

At the time, Napoleon was girding for a major series of wars that would bear his name. France not only needed cash but also to be relieved of the security burden of defending a large but lightly populated territory in a different hemisphere.

This single road (known in modern times as Interstate 40 or Interstate 70 for most of its length) allowed American pioneers to directly settle Ohio, Indiana, Illinois and Missouri and granted them initial access to Michigan, Wisconsin, Iowa and Minnesota.

The trail was directly responsible for the initial settling of Kansas, Nebraska, Wyoming, Idaho and Oregon. A wealth of secondary trails branched off from the main artery — the Mormon, Bozeman, California and Denver trails — and extended the settlement efforts to Montana, Colorado, Utah, Nevada and California.

From beginning to end, the entire process required less than 70 years.

The Columbia River Valley and California’s Central Valley are not critical American territories.

among other things, they grant the United States full access to the Pacific trading basin — only that control of them is not imperative to American security.

The first land threat to the young United States was in essence the second phase of the Revolutionary War

the British navy could outmatch anything the Americans could float

Geopolitically, the most critical part of the war was the participation of semi-independent British Canada.

Canadian forces, unlike the British, did not have a supply line that stretched across the Atlantic.

Canada is far enough north that its climate is far harsher than that of the United States, with all of the negative complications one would expect for population, agriculture and infrastructure.

What few rivers Canada has neither interconnect nor remain usable year round.

Most of these river connections also have rapids and falls, greatly limiting their utility as a transport network.

the St. Lawrence Seaway — a series of locks that link the St. Lawrence River to the Great Lakes and allow full ocean access — was not completed until 1959.

Newfoundland and Prince Edward Island — are disconnected from the Canadian landmass and unable to capitalize on what geographic blessings the rest of the country enjoys

what population centers Canada does have are geographically sequestered from one another by the Canadian Shield and the Rocky Mountains.

All four provinces have been forced by geography and necessity to be more economically integrated with their southern neighbors than with their fellow Canadian provinces.

The British were exhausted from the Napoleonic Wars in Europe and, with the French Empire having essentially imploded, were more interested in reshaping the European balance of power than re-engaging the Americans in distant North America.

the Americans were mobilized, angry and — remembering vividly the Canadian/British sacking of Washington — mulling revenge.

Using a combination of illegal settlements, military pressure and diplomacy, the United States was able to gain control of east and west Florida from Madrid in 1819 in exchange for recognizing Spanish claims to what is now known as Texas

the United States’ efforts to secure its southwestern borders shifted to a blatant attempt to undermine and ultimately carve up the one remaining Western Hemispheric entity that could potentially challenge the United States: Mexico.

the United States quickly transformed itself from a poor coastal nation to a massively capital-rich commodities exporter.

the biggest potential security threat to the United States was newly independent Mexico, the border with which was only 150 kilometers from New Orleans. In fact, New Orleans’ security was even more precarious than such a small distance suggested.

In the United States, the cheap transport system allowed early settlers to quickly obtain their own small tracts of land.

in time the wealth accumulated to the point that portions of the United States had the capital necessary to industrialize.

Mexico, in contrast, suffered from a complete lack of navigable rivers and had only a single good port (Veracruz).

First and most obviously, the lack of navigable waterways and the non-abundance of ports drastically reduced Mexico’s ability to move goods and thereby generate its own capital. Second, the disassociated nature of Mexico’s agricultural regions forced the construction of separate, non-integrated infrastructures for each individual sub-region, drastically raising the costs of even basic development.

Third, the highland nature of the Mexico City core required an even more expensive infrastructure, since everything had to be transported up the mountains from Veracruz.

very different economic and social structure

Instead of small landholdings, Mexican agriculture was dominated by a small number of rich Spaniards

The Mexican landowners had, in essence, created their own company towns and saw little benefit in pooling their efforts to industrialize. Doing so would have undermined their control of their economic and political fiefdoms.

In just two generations — by 1870 — the American population had ballooned to 38.6 million while Mexico’s was only 8.8 million.

The first was Texas, and the primary means was settlement as enabled by the Austin family.

We kind of made a bargain, a social contract, in the 20th century that even if jobs were pleasant people could still get paid for them. Because otherwise we would have had a massive unemployment. And so to my mind, the right question to ask is, why are we abandoning that bargain that worked so well? When did "we" make this "bargain" and, honestly, what is he talking about? There was no such bargain made. Jobs have nothing to do with whether they are "pleasant." And we didn't create jobs to avoid unemployment. We created jobs because there was demand for work, meaning there was demand for products and services, just as there still is today.

This is the broken window fallacy exploded exponentially for a digital era. It seems to assume that the only "payment" is monetary. That is, if you do something for free online -- share a video or a photo, like a link, listen to a song -- that you're somehow getting screwed because some company gets that info and you're not getting paid.

A token few will find success on Kickstarter or YouTube, while overall wealth is ever more concentrated and social mobility rots. Social media sharers can make all the noise they want, but they forfeit the real wealth and clout needed to be politically powerful. Real wealth and clout instead concentrate ever more on the shrinking island occupied by elites who run the most powerful computers.

It's as if Lanier is talking about a mythical past that never existed to make some point about the future. But all of the evidence suggests that more people are now able to make use of these tools to create new incomes and new opportunities to make money, while in the past you had to wait for some gatekeeper.

The women are given less forgiving roles: Catherine Gibson's Susan can only imagine personal fulfillment through having a baby, Ilinca Kiss's elegant, icy Beatrice oozes stereotypes of Frenchness like a perfume and Claire Sanderson's Hannah goes on vaguely "working with the environment," serving as a foil to the other characters. Her best line is to observe that she's busy after Senexate, because "Most people didn't care about climate change when it was only going to affect their children, but they care now."

And the isolation is only going to get worse. Increasingly, the people who run the country were born into that world. Unlike the typical member of the elite in 1960, they have never known anything but the new upper-class culture. We are now seeing more and more third-generation members of the elite. Not even their grandparents have been able to give them a window into life in the rest of America.

Meanwhile, the formation of the new upper class has been driven by forces that are nobody's fault and resist manipulation. The economic value of brains in the marketplace will continue to increase no matter what, and the most successful of each generation will tend to marry each other no matter what.

The only thing that can make a difference is the recognition among Americans of all classes that a problem of cultural inequality exists and that something has to be done about it. That "something" has nothing to do with new government programs or regulations.

There remains a core of civic virtue and involvement in working-class America that could make headway against its problems if the people who are trying to do the right things get the reinforcement they need—not in the form of government assistance, but in validation of the values and standards they continue to uphold. The best thing that the new upper class can do to provide that reinforcement is to drop its condescending "nonjudgmentalism."

Telangana, the Andhra coastal plain and the interior Rayalaseema region.

The area that will become Telangana is sandwiched between the Godavari and Krishna rivers and sits on the Deccan plateau, west of the Eastern Ghats mountain range. Though the mostly barren north suffers from acute power shortages, has a high rate of poverty and is a hotbed for Naxalism -- India's Maoist militant movement -- its geographic boundaries include Hyderabad, one of India's most vibrant economic regions.

The new plan to divide Andhra Pradesh would have the residual non-Telangana parts -- coastal Andhra and Rayalaseema -- form the state of Seemandhra.

Telangana is poised to join a long list of states that have been created since India's independence in 1947. Before Telangana, the states of Chhattisgarh, Jharkhand and Uttaranchal were carved out of Madhya Pradesh, Bihar and Uttar Pradesh, respectively, in 2000. Goa defined its state boundaries in 1987, while Arunachal Pradesh and Mizoram in the country’s far-flung northeast grew out of Assam in the same year. Manipur and Tripura earned their statehood in 1972, Haryana and Himachal Pradesh were carved out of Punjab state in 1966 and Bombay state in 1960 was divided along linguistic lines into Maharashtra and Gujarat.

Jawaharlal Nehru, India's first prime minister and the father of the Indian republic, quickly realized that the three-tier division the British Raj used to divide and administer India's governorships and princely states was ill-suited to the new country. In 1953, he launched a commission to figure out how to reorganize the country. Controversial political questions naturally emerged -- whether to redraw states along lines of linguistic and cultural unity, as well as how to preserve geographic continuity and financial viability. Leaders worried about the precedents any action could set in a country that speaks hundreds of languages and dialects and is beset by overlapping boundaries and economic interests.

The creation of a new state that affects Hyderabad, a major economic hub home to a number of multinational corporations, is going to be a messy affair. And the statehood question is being addressed at a time when the government is desperately trying to attract and retain long-term foreign direct investment to help it cope with the global economic crisis.

For a long time, I was misled by the fact that 90% of the available books frame globalization and the emergence of modernity in terms of the nation-state as the fundamental unit of analysis, with politics as the fundamental area of human activity that shapes things.

But the more I’ve thought about it, the more I’ve been pulled towards a business-first perspective on modernity and globalization.

Culture is the most mysterious, illegible and powerful force.

But one quality makes gravity dominate at large space-time scales: gravity affects all masses and is always attractive, never repulsive.  So despite its weakness, it dominates things at sufficiently large scales. I don’t want to stretch the metaphor too far, but something similar holds true of business.

On the scale of days or weeks, culture, politics and war matter a lot more in shaping our daily lives.

Business though, as an expression of the force of unidirectional technological evolution, has a destabilizing unidirectional effect. It is technology, acting through business and Schumpeterian creative-destruction, that drives monotonic, historicist change, for good or bad. Business is the locus where the non-human force of technological change sneaks into the human sphere.

Culture is suspicious of technology. Politics is mostly indifferent to and above it. War-making uses it, but maintains an arms-length separation.

It is business that creates the world of magic, not technology itself. And the story of business in the last 400 years is the story of the corporate form.

What was new was the idea of a publicly traded joint-stock corporation, an entity with rights similar to those of states and individuals, with limited liability and significant autonomy

In politics, Mercantilism led to balance-of-power models.

In business, once the Age of Exploration (the 16th century) opened up the world, it led to mercantilist corporations focused on trade

The forces of radical technological change — the Industrial Revolution — did not seriously kick until after nearly 200 years of corporate evolution (1600-1800) in a mercantilist mold.

Smith was both the prophet of doom for the Mercantilist corporation, and the herald of what came to replace it: the Scumpeterian corporation.

The corporate form therefore spent almost 200 years — nearly half of its life to date — being shaped by Mercantilist thinking, a fundamentally zero-sum way of viewing the world.

The Black Hills Gold Rush of the 1870s, the focus of the Deadwood saga, was in a way the last hurrah of Mercantilist thinking. William Randolph Hearst, the son of gold mining mogul George Hearst who took over Deadwood in the 1870s, made his name with newspapers. The baton had formally been passed from mercantilists to schumpeterians.

for America, corporations employed less than 20% of the population in 1780, and over 80% in 1980, and have been declining since

Certainly corporations today seem far more powerful than those of the 1700s, but the point is that the form is much weaker today, even though it has organized more of our lives. This is roughly the same as the distinction between fertility of women and population growth: the peak in fertility (a per-capita number) and peak in population growth rates (an aggregate) behave differently.

a useful 3-phase model of the history of the corporation: the Mercantilist/Smithian era from 1600-1800, the Industrial/Schumpeterian era from 1800 – 2000 and finally, the era we are entering, which I will dub the Information/Coasean era

To a large extent, the history of the first 200 years of corporate evolution is the history of the East India Company. And despite its name and nation of origin, to think of it as a corporation that helped Britain rule India is to entirely misunderstand the nature of the beast.

At a broader level, the EIC managed to balance an unbalanced trade equation between Europe and Asia whose solution had eluded even the Roman empire.

For this scheme to work, three foreground things and one background thing had to happen: the corporation had to effectively take over Bengal (and eventually all of India), Hong Kong (and eventually, all of China, indirectly) and England.

The background development was simpler. England had to take over the oceans and ensure the safe operations of the EIC.

eventually, as the threat from the Dutch was tamed, it became clear that the company actually had more firepower at its disposal than most of the nation-states it was dealing with. The realization led to the first big domino falling, in the corporate colonization of India, at the battle of Plassey.

The EIC was the original too-big-to-fail corporation. The EIC was the beneficiary of the original Big Bailout. Before there was TARP, there was the Tea Act of 1773 and the Pitt India Act of 1783. The former was a failed attempt to rein in the EIC, which cost Britain the American Colonies.  The latter created the British Raj as Britain doubled down in the east to recover from its losses in the west. An invisible thread connects the histories of India and America at this point. Lord Cornwallis, the loser at the Siege of Yorktown in 1781 during the revolutionary war, became the second Governor General of India in 1786.

But these events were set in motion over 30 years earlier, in the 1750s. There was no need for backroom subterfuge.  It was all out in the open because the corporation was such a new beast, nobody really understood the dangers it represented.

The East India bubble was a turning point.

Over the next 70 years, political, military and economic power were gradually separated and modern checks and balances against corporate excess came into being.

It is not too much of a stretch to say that for at least a century and a half, England’s foreign policy was a dance in Europe in service of the EIC’s needs on the oceans.

Mahan’s book is the essential lens you need to understand the peculiar military conditions in the 17th and 18th centuries that made the birth of the corporation possible.)

arguably, the doings of the EIC and VOC on the water were more important than the pageantry on land.  Today the invisible web of container shipping serves as the bloodstream of the world. Its foundations were laid by the EIC.

I call this the “most misleading table in the world.”

corporations and nations may have been running on Mercantilist logic, but the undercurrent of Schumpeterian growth was taking off in Europe as early as 1500 in the less organized sectors like agriculture. It was only formally recognized and tamed in the early 1800s, but the technology genie had escaped.

The Schumpeterian corporation was about colonizing individual minds. Ideas powered by essentially limitless fossil-fuel energy allowed it to actually pull it off.

it is probably reaosonably safe to treat the story of Schumpeterian growth as an essentially American story.

In many ways the railroads solved a vastly speeded up version of the problem solved by the EIC: complex coordination across a large area.  Unlike the EIC though, the railroads were built around the telegraph, rather than postal mail, as the communication system. The difference was like the difference between the nervous systems of invertebrates and vertebrates.

If the ship sailing the Indian Ocean ferrying tea, textiles, opium and spices was the star of the mercantilist era, the steam engine and steamboat opening up America were the stars of the Schumpeterian era.

The primary effect of steam was not that it helped colonize a new land, but that it started the colonization of time. First, social time was colonized. The anarchy of time zones across the vast expanse of America was first tamed by the railroads for the narrow purpose of maintaining train schedules, but ultimately, the tools that served to coordinate train schedules: the mechanical clock and time zones, served to colonize human minds.  An exhibit I saw recently at the Union Pacific Railroad Museum in Omaha clearly illustrates this crucial fragment of history:

For all its sophistication, the technology of sail was mostly a very-refined craft, not an engineering discipline based on science.

Steam power though was a scientific and engineering invention.

Scientific principles about gases, heat, thermodynamics and energy applied to practical ends, resulting in new artifacts. The disempowerment of craftsmen would continue through the Schumpeterian age, until Fredrick Taylor found ways to completely strip mine all craft out of the minds of craftsmen, and put it into machines and the minds of managers.

Blitzeconomics allowed the global economy to roar ahead at 8% annual growth rates instead of the theoretical 0% average across the world for Mercantilist zero-sum economics. “Progress” had begun.

Two phrases were invented to name the phenomenon: productivity meant shrinking autonomously-owned time. Increased standard of living through time-saving devices became code for the fact that the “freed up” time through “labor saving” devices was actually the de facto property of corporations. It was a Faustian bargain.

Many people misunderstood the fundamental nature of Schumpeterian growth as being fueled by ideas rather than time. Ideas fueled by energy can free up time which can then partly be used to create more ideas to free up more time. It is a positive feedback cycle,  but with a limit. The fundamental scarce resource is time. There is only one Earth worth of space to colonize. Only one fossil-fuel store of energy to dig out. Only 24 hours per person per day to turn into capitive attention.

There is certainly plenty of energy all around (the Sun and the wind, to name two sources), but oil represents a particularly high-value kind. Attention behaves the same way.

There is a lot more money to be made in replacing hand-washing time with washing-machine plus magazine time, than there is to be found in replacing one hour of TV with a different hour of TV.

. To get to Clay Shirky’s hypothetical notion of cognitive surplus, we need Alternative Attention sources. To put it in terms of per-capita productivity gains, we hit a plateau.

When Asia hits Peak Attention (America is already past it, I believe), absolute size, rather than big productivity differentials, will again define the game, and the center of gravity of economic activity will shift to Asia.

Once again, it is the oceans, rather than land, that will become the theater for the next act of the human drama. While American lifestyle designers are fleeing to Bali, much bigger things are afoot in the region. And when that shift happens, the Schumpeterian corporation, the oil rig of human attention, will start to decline at an accelerating rate. Lifestyle businesses and other oddball contraptions — the solar panels and wind farms of attention economics — will start to take over.

Coasean growth is not measured in terms of national GDP growth. That’s a Smithian/Mercantilist measure of growth. It is also not measured in terms of 8% returns on the global stock market.  That is a Schumpeterian growth measure. For that model of growth to continue would be a case of civilizational cancer (“growth for the sake of growth is the ideology of the cancer cell” as Edward Abbey put it).

I do think humans are motivated to daydream about extraterrestrial intelligence, and, to put a finer point on it, extraterrestrial "people." They are motivated to dream about beings very much like them, things tantalizingly exotic but not so alien as to be totally incomprehensible and discomforting. Maybe those imagined beings have more appendages or sense organs, different body plans and surface coverings, but they typically possess qualities we recognize within ourselves: They are sentient, they have language, they use tools, they are curious explorers, they are biological, they are mortal - just like humans. Perhaps that's a collective failure of imagination, because it's certainly not very easy to envision intelligent aliens that are entirely divergent from our own anthropocentric preconceptions. Or perhaps it's more diagnostic of the human need for context, affirmation, and familiarity. Why are people fascinated by their distorted reflections in funhouse mirrors? Maybe it's because when they recognize their warped image, at a subconscious level that recognition reinforces their actual true appearance and identity.

The first pessimistic take is that the differences between independently emerging and evolving biospheres would be so great as to prevent much meaningful communication occurring between them if any intelligent beings they generated somehow came into contact.

The second pessimistic take is that intelligent aliens, far from being incomprehensible and ineffable, would be in fact very much like us, due to trends of convergent evolution, the tendency of biology to shape species to fit into established environmental niches.

It stands to reason that any alien species that managed to embark on interstellar voyages to explore and colonize other planetary systems could, like us, be a product of competitive evolution that had effectively conquered its native biosphere. Their intentions would not necessarily be benevolent if they ever chose to visit our solar system.

The third pessimistic scenario is an extension of the second, and postulates that if we did encounter a vastly superior alien civilization, even if they were benevolent they could still do us harm through the simple stifling of human tendencies toward curiosity, ingenuity, and exploration.

Right now reaching low-Earth orbit generally comes at a cost somewhere between $5,000 to $10,000 per kilogram, depending on which launch vehicle is used. This creates an enormous barrier to making profitable ventures in space or building major space-based infrastructure. It also engenders further high costs in the design, fabrication, and testing of most spaceflight hardware, which due to the high cost to orbit must be made as lightweight and reliable as possible.

If launch costs fall well below $1,000 per kilogram, a host of economic activities that were previously prohibitively expensive should at a stroke become cheap enough to be readily profitable.

I'm an American citizen, so I will focus my comments on the American space program and the American political system. I'm sad to say that in this country, the most powerful nation presently on the planet, space science, exploration, and development are treated as fringe issues at best. Too many politicians, if they consider these issues at all, treat them in one of two ways: Dismissively, as things to be joked about, or cynically, as little more than pork-barrel job programs for their districts, things to be defended purely for the status quo and only given token lip-service when absolutely necessary.

And who can blame them? Look at what happens to politicians when they try to talk seriously and ambitiously about space today. They are lampooned and ridiculed by the media and by their political opponents as starry-eyed idealists who are disconnected from everyday realities.

Change will be primarily violent in nature -- and thus harder to miss -- in the Middle East.

The United States is also not immune to change. In this generational shift, and all the tumult that comes with it, Washington will be forced to learn the value of restraint in balance-of-power politics, preferring to lean on regional partners and encourage strategic competition as a way of preserving its own power.

The Arab world is moving uncomfortably between two eras. The post-World War II era, in which Arab dictatorships and monarchies supplanted colonial rule, is now roughly blending with -- or in some cases outright colliding with -- a fractured landscape of long-repressed Islamist forces.

This dynamic will be particularly visible in the northern Levant region this year as Syria and Lebanon continue coming apart. From Stratfor's perspective, the regime in Syria has already fallen and is giving way to a familiar state of warlordism, where militias and clan interests reign supreme. There is no longer a political entity capable of wielding control over the entirety of Syrian territory, nor will there be for some time.

once Syrian President Bashar al Assad is removed from power, whether through a negotiated deal or by force, the Sunni forces will fragment along ideological, ethnic and geographic lines, with Salafist-jihadist forces battling against a more politically minded Muslim Brotherhood and secular Sunnis.

As their grip over Aleppo slips, Alawite forces will try to hold Damascus while preparing a mass retreat to their coastal enclave. The battle for Damascus could extend beyond the scope of this forecast.

The potential use of chemical weapons by Alawite forces in a state of desperation could accelerate the unraveling of the region; a U.S.-led coalition would have to assemble in haste to contain the chemical weapons threat.

The growing disparity in the U.S. and Iranian negotiating positions will largely relegate Iran to the role of regional spoiler. So long as Iran can create pain for its regional adversaries, it can slow its own descent.

Iraq remains Iran's primary regional imperative, however. The momentum building among Sunni forces in Syria will eventually spill into Iraq and challenge Shiite dominance.

Iran's presidential elections in June will reveal the declining relevancy of the clerical elite and the populist faction embodied by outgoing President Mahmoud Ahmadinejad. This creates a political void for the Revolutionary Guard to fill. The Supreme Leader Ayatollah Ali Khamenei will try to check the Corps' growing influence by bolstering rival military and security agencies and backing a less controversial and more politically malleable ally from the pragmatic conservative camp for the presidency.

In Egypt, the military will adapt to an emerging Islamist political order. The military will remain the ultimate arbiter of the state and will rely on a number of factors -- including a fragmented judiciary, the military's economic leverage, a divided Islamist political landscape and the military's foreign relationships -- to check the Muslim Brotherhood.

Jordan, the oft-overlooked casualty of the Arab Spring, will continue to destabilize quietly and slowly in 2013

Israel and Turkey are both greatly affected by the shifting political dynamics of the Arab world, but both have little means to influence the change. The two former allies will continue exploring ways to restore a quiet working relationship under these new regional stresses, but a public restoration of diplomatic ties is less likely.

Israel will struggle internally over how to adapt to a new regional framework in which the reliability of old working partners is called into question.

Turkey sees an opportunity in the rise of Islamist forces in the Arab world but Ankara's limited influences restrain its actions beyond Turkish borders.

A more aggressive Saudi role in Syria will aggravate the civil war and create competition with other regional stakeholders, including Turkey, Qatar and Jordan.

In 2012, the European Union took numerous steps to mitigate the financial impact of its ongoing crisis.

First, the European crisis is fundamentally a crisis of competitiveness.

Second, the crisis has a political aspect. The European Union is not a federation but a collection of nation-states bound together by international treaties.

Third, the European crisis is threatening the social stability in some countries, especially in the eurozone's periphery.

In 2013, the two largest economies of the eurozone (Germany and France) will face low growth or even stagnation. This will have negative effects across Europe.

The conspicuous divide between the ruling elite and the populations of the periphery will be a key element in 2013, and some governments could fall. But even if opposition parties take power, they will face the same constraints as the governments that preceded them. In other words, a change in politicians will not bring a substantial change in policies regarding the European Union.

The only country in the eurozone periphery that has scheduled elections is Italy (in February). If the next Italian government fails to achieve political stability and apply economic reforms, the increased market pressure on Italy will make Rome more likely to require financial assistance from Brussels.

Because of the fundamental contradictions in the national interests and foreign policy strategies of the EU member states, the European crisis will continue generating political and economic divisions in the Continent in 2013.

Outside the eurozone, the United Kingdom will seek to protect its sovereignty and renegotiate its status within the European Union. But London will not leave the European Union in 2013.

Domestic Issues After the political tumult of 2012, Russia will face another year of anti-Kremlin protests, tensions among various political factions and ethnic groups, crackdowns and government reshuffles. Overall, the political tensions will remain manageable and will not pose a serious challenge to Moscow's control.

Russia has made significant progress recently in re-establishing influence in its former Soviet periphery.

Russia's relationship with Ukraine could be its most important connection in the former Soviet Union in 2013. Russia has been pursuing integration with Ukraine, primarily by taking over its natural gas transit infrastructure and calling on Kiev to join the Customs Union.

Georgia will be Russia's main concern in the Caucasus in 2013. With the political emergence of billionaire tycoon Bidzina Ivanishvili and his Georgian Dream movement, Russia's position in the country strengthened at the expense of the anti-Russian camp of Georgian President Mikhail Saakashvili.

In the past year, Russia has changed its tactics toward Europe to preserve its presence and leverage for the future. Russia's primary link to Europe is the Europeans' dependence on Russia's large energy supplies, which Moscow knows will be threatened when more non-Russian supplies become available.

The United States and Russia will continue sparring over trade matters, negotiations for a new nuclear arms treaty and Russia's role in Iran and Syria. Stratfor does not expect major changes from Washington or Moscow that would break the gridlock in negotiations on these issues.

The low-level violence and instability that occurred throughout Central Asia in 2012 will continue in 2013.

Three things will shape events in East Asia in 2013: Beijing's struggle to maintain social and political stability amid lower economic growth rates; China's accelerating military modernization and increasingly aggressive moves to secure its territorial and economic interests in the region; and varied efforts by other regional players, including the United States, to adapt to China's changes. 

In 2013, the Chinese economy will continue the gradual, painful process of moving away from high export-driven growth and toward a model that is more sustainable in the long run.

But barring another global financial meltdown on the scale of 2008-2009, China's coastal manufacturing economy will not collapse outright. The decline will be gradual.

The ongoing, gradual eclipse of coastal China as a hub of global manufacturing over the next several years will lead to higher unemployment and social dislocation as more of China's 250 million-strong migrant labor force returns inland in search of work. 

Shadow banking is by no means new in China. But it has grown significantly in the past few years from the geographically isolated informal loan markets of coastal cities to a complex network of semi-legal entities that provides between 12 and 30 trillion yuan (between $1.9 trillion and $4.8 trillion) in credit -- at interest rates of 20-36 percent -- to thousands of struggling small businesses nationwide.

The Party's growing sense of insecurity -- both internally and with regard to the social consequences of China's economic transition -- likely will be reflected in continued censorship of online social platforms like Weibo, crackdowns on religious or other groups perceived as threatening, and the Chinese military's growing assertiveness over China's interests in the South and East China seas and Southeast Asia.

The decline of low-end coastal manufacturing in China will present enormous opportunities for Southeast Asian countries like Indonesia, Vietnam, the Philippines and potentially Myanmar -- all of whom will continue to push strongly for foreign investment not only into natural resources and raw materials industries but also into developing better urban, transport, power generation and materials processing infrastructure.

Meanwhile, Vietnam and the Philippines -- China's most vocal opponents in Southeast Asia -- will continue to push for greater integration among members of the Association of Southeast Asian Nations and for U.S. business and military engagement in the region.

The Coming U.S. Withdrawal from Afghanistan Ahead of the 2014 drawdown of U.S. troops from Afghanistan, efforts will intensify to negotiate a settlement that gives the Taliban a place in a new government.

The negotiations will face numerous obstacles this year. There will be an upsurge in violence -- both in terms of officially sanctioned attacks designed to gain advantage on the negotiating table and spoiler attacks by Taliban elements allied with al Qaeda on both sides of the Afghan-Pakistani border.

Washington's intention to reduce its presence in the region will spur regional actors to fill the void. Pakistan will increase its interactions with Russia, Central Asia and Iran to prepare for a post-U.S. Afghanistan.

India will also turn its attention eastward, where the United States is quietly trying to forge a coalition of regional partners to keep a check on China in the Indo-Pacific basin. Myanmar in particular will be an active battleground for influence this year.

Preparing for a Post-Chavez Venezuela After a year of successful campaigning for re-election, Venezuelan President Hugo Chavez is in questionable health. Although the ultimate outcome of December's medical treatment for the ailing leader is unpredictable, Chavez's decision to name Vice President Nicolas Maduro as a political successor at the end of 2012 indicates that there is significant concern for his ability to remain in power.

Although it remains possible that Chavez will stay in power through the year, for Maduro to capitalize on Chavez's recent political gains, elections may need to be called sooner rather than later, regardless of Chavez's immediate health status.

Throughout 2013, Colombia will continue the incremental process of negotiating an end to the conflict with the Revolutionary Armed Forces of Colombia, known by its Spanish acronym FARC.

This will be a year of significant transition for Mexico. Policy issues that were bottled up by intra-party competition in the waning years of the National Action Party's administration have begun coming to the fore and will dominate 2013. These include socio-political issues like education, tax and pension reform.

However, the threat of war remains a major tool by which North Korea tries to achieve its political ends.

This posturing has allowed North Korea, since the end of the Cold War, to pose enough of a threat to have countries like China, the United States, Japan and South Korea offer incentives at times to avoid a war. But over the years, North Korea has found that its message of impending doom is growing ever less alarming.

In 1993, the mere threat of leaving the Nuclear Non-Proliferation Treaty raised tensions to a near fever pitch, and the intervention of Jimmy Carter gave North Korea the reprieve it was looking for, along with the promise of light-water nuclear reactors and food and economic aid. As the effects wore off, North Korea carried out its first long-range rocket test in 1998, triggering another crisis that led to renewed diplomatic ties with several countries and to the first inter-Korean summit.

A decade later, in 2003, North Korea completed its withdrawal from the Non-Proliferation Treaty, setting in motion the six-party talks that Pyongyang used to manipulate the competing interests of the other parties. As the talks began losing steam, North Korea raised the stakes again, testing its first nuclear device in 2006, just months after an attempted long-range rocket test. Within a year, the six-party talks had produced results from Pyongyang's perspective, and North Korea hosted the second leadership summit with a South Korean president. By 2008, Pyongyang had convinced the United States to drop North Korea from the list of state sponsors of terrorism.

A year later, in 2009, North Korea saw the need to raise the stakes yet again, so Pyongyang attempted a satellite launch and performed its second nuclear test. Pyongyang also suggested it was no longer bound by the 1953 Armistice Agreement. When the world effectively yawned at this action, North Korea followed with the sinking of the South Korean navy corvette ChonAn and the shelling of Yeonpyeong Island, along the maritime Northern Limit Line. North Korea also showed a visiting U.S. scholar one of its uranium enrichment facilities, confirming Washington's accusations that Pyongyang was pursuing an alternate nuclear program.

But, as in 2009, the latest missile and nuclear tests have largely been brushed aside, leading to verbal retorts and a new round of sanction talks rather than any significant economic or political concessions to Pyongyang. The threat to revoke the Armistice Agreement is, once again, meant to heighten tensions. North Korea is trying to show it has something to trade away as it seeks economic incentives to return to the status quo.

For North Korea's new leader, there are few options aside from the path of his father if the basic structure of relations cannot be altered. There can be no experiments in economic opening, not even minor adjustments in social policies, so long as the technical state of war remains.

The circuitous route of North Korean diplomacy, and its pattern of issuing threats to seek rewards, may also help explain why North Korea's new leader has chosen Dennis Rodman to transmit his eagerness for talks with the United States. So long as North Korea remains quirky and unpredictable, and so long as Kim Jong Un remains somewhat unreadable, Pyongyang may be able to keep the West guessing -- and perhaps even awaken interest in what Kim could do if North Korea were no longer a pariah.

In the early 1800′s, nine out of ten Americans worked in agriculture—now it’s around 2%. At its peak, about a third of the US population was employed in manufacturing—now it’s less than 10%. How many decades until the figures are similar for the information-processing tasks that typify rich countries’ post-industrial economies?

To see how the internet has disproportionately affected the jobs of people who process information, check out the gray bars dipping below the 0% line on the chart, below. (I’ve adapted this chart to show just the types of employment that lost jobs in the US during the great recession. Every other category continued to add jobs or was nearly flat.)

Here’s another clue about what’s been going on in the past ten years. “Return on capital” measures the return firms get when they spend money on capital goods like robots, factories, software—anything aside from people. (If this were a graph of return on people hired, it would be called “Return on labor”.)

Notice: the only industry where the return on capital is as great as manufacturing is “other industries”—a grab bag which includes all the service and information industries, as well as entertainment, health care and education. In short, you don’t have to be a tech company for investing in technology to be worthwhile.

One thing all our machines have accomplished, and especially the internet, is the ability to reproduce and distribute good work in record time. Barring market distortions like monopolies, the best software, media, business processes and, increasingly, hardware, can be copied and sold seemingly everywhere at once. This benefits “superstars”—the most skilled engineers or content creators. And it benefits the consumer, who can expect a higher average quality of goods.

“Certainly the labor market has never been better for very highly-educated workers in the United States, and when I say never, I mean never,” MIT labor economist David Autor told American Public Media’s Marketplace.

The other winners in this scenario are anyone who owns capital.

Computers are more disruptive than, say, the looms smashed by the Luddites, because they are “general-purpose technologies” noted Peter Linert, an economist at University of Californa-Davis.

In March 2009, Amazon acquired Kiva Systems, a warehouse robotics and automation company. In partnership with a company called Quiet Logistics, Kiva’s combination of mobile shelving and robots has already automated a warehouse in Andover, Massachusetts.

From 2000 to 2007, in the years leading up to the great recession, GDP and productivity in the US grew faster than at any point since the 1960s, but job creation did not keep pace.

Especially in the past ten years, economists have seen a reversal of what they call “the great compression“—that period from the second world war through the 1970s when, in the US at least, more people were crowded into the ranks of the middle class than ever before.

Indeed, some have argued that as technology aids the gutting of the middle class, it destroys the very market required to sustain it—that we’ll see “less of the type of innovation we associate with Steve Jobs, and more of the type you would find at Goldman Sachs.”

So how do we deal with this trend? The possible solutions to the problems of disruption by thinking machines are beyond the scope of this piece. As I’ve mentioned in other pieces published at Quartz, there are plenty of optimists ready to declare that the rise of the machines will ultimately enable higher standards of living, or at least forms of unemployment as foreign to us as “big data scientist” would be to a scribe of the 17th century.

Faucets are ways through which game currency is injected into the game. This generally involve players receiving currency from the game system itself, as opposed to other players.

Sinks are ways through which game currency is removed from the game. This generally involve players paying currency into the game system itself, as opposed to other players.

The establishment by Blizzard of a real money auction house (“RMAH”) alongside a virtual gold auction house in the game provided players with an incentive to both farm the game for real world profits and to pursue arbitrage opportunities. The RMAH was also created, at least in part, to disincentivize players from patronizing third party markets outside the game.

Although its anonymity may make it subject to skepticism, several weeks after the game’s debut a source claimed that there were at least 1,000 bots active 24/7 in the Diablo 3 game world, allegedly “harvesting” (producing) 4 million virtual gold per hour.[4]

The RMAH had minimum and maximum dollar amounts for in-game gold transactions: $0.25 minimum, $250 maximum. Market participants were also limited to dealing in increments of a certain size, called a “stack.” The “stack” was initially set to 100K gold. But as gold prices fell owing to rapidly building supply, the stack size was changed in August 2012 to 1 million. This practice, known as redenomination, is a fairly standard (if cosmetic) method of addressing inflation, but was viewed by some players as tacit devaluation.

To be clear, at the time at which the redenomination was introduced, gold was still trading above the floor rate. But being artificial, caps and floors not only prevent markets from clearing, but give black markets a target to undercut, to say nothing of offering players an opportunity to avoid the 15 percent fee — another intended gold sink — levied upon transactions within the auction house.

By early 2013, the gold price had fallen to the exchange floor set by the game managers — $0.25/million — and players began to show signs of concern.

Hyperinflation is the economist’s equivalent of an astrophysicist’s quasar cluster or a marine biologist’s dolphin “stampede”: a rare exhibition of a unique set of circumstances which arise infrequently and are closely studied when they materialize.

when holders of money expect the supply of money to increase — particularly without any sense of timing, bounds, or other guidance

monetary demand in the present drops in favor of surrendering money for vendibles.

If historical cases of hyperinflation — real, and now virtual — have one thing in common, it is the instinct among its victims to blame the symptoms rather than the disease.

While RMAH prices for virtual gold rallied occasionally, the prevailing direction of black market prices for virtual gold was inexorably lower as third party sellers undercut the in-game gold floor.

Several competing definitions for hyperinflation exist, with the strictest — an increase of 50 percent in one month — defined by economist Philip Cagan in his 1956 book The Monetary Dynamics of Hyperinflation.

On May 7th 8th, 2013, Blizzard rolled out Patch 1.0.8, which contained the seeds of the last, hyperbolic surge of gold superabundance.

In just a few hours, the already gold-swamped economy saw trillions more created: a mammoth deluge of, by then, worthless virtual gold chasing finite goods, driving prices upward in leaps and bounds.

Blizzard quickly closed the in-game auction houses and audited transactions which took place during the blowout, banning players who took advantage of the bug and donating the proceeds of certain sales to charity. The gold stack size was also moved back from 10M to 1M.

Remembering that game economies are private and players are voluntary members, there’s no explicit mandate to ensure rigid inflation control as one often sees (however rarely pursued) in public economies.

More critically, though, whether structured as auctions or exchanges, markets must be allowed to operate freely, without caps, floors, or other artificialities. Unrestricted (real) cash auctions would for the most part preempt and obviate black markets. [24]

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