Re-helllo World! The first post again for many years

I loved writing this blog many years ago, and have come back to read some of the entries again. I let it go for a long time partly because of other projects. But the bigger reason was because it felt that public discussion was so polarized and aggressive for some time that it was less productive to post anything. Many people would feel nothing has changed, or it is even worse. 

But I see grounds for renewed hope. AI is rapidly changing all our core assumptions, and in ways which are closely related to the things I wrote about on this blog. The real challenges are not technological, but how society adapts to wholly new possibilities about work, abundance, legitimacy, political norms and value. It is the human questions which matter. 

Many of those questions are timeless: the answers need to change, however. 

I'm likely to shift most writing to X and Substack, but I'll periodically update here and refer back to posts from other venues.

Hold the Gloom. The Economy is Changing, not Dying

I've been working on some other projects recently, but I wanted to respond to some of the increasing darkness and pessimism about the future that is seeping into public discussion. Take this article in Commentary Magazine, "Our Miserable 21st Century," which attracted much attention this week.

It turns out that the year 2000 marks a grim historical milestone of sorts for our nation. For whatever reasons, the Great American Escalator, which had lifted successive generations of Americans to ever higher standards of living and levels of social well-being, broke down around then—and broke down very badly.

The warning lights have been flashing, and the klaxons sounding, for more than a decade and a half. But our pundits and prognosticators and professors and policymakers, ensconced as they generally are deep within the bubble, were for the most part too distant from the distress of the general population to see or hear it. (So much for the vaunted “information era” and “big-data revolution.”)

David Brooks reinforces the message in the NYT here.

 Of course, it's a good thing to highlight problems. Opioid addiction and people dropping out of the labor force to live on disability and daytime TV are serious issues.  

But the despair is not justified. Society and technology and customs and institutions are always changing. That means we have to be resourceful and creative in making the changes work for us. It means we have to change how we think and realize some major 20th century social institutions need to adapt as well. 

We might have said much much worse about the economy in 1820 or 1830, just before the world got an order of magnitude wealthier than ever before in the following decades.  Malthus told us the mass of the population would be immiserated and kept at starvation levels, forever. Engels noticed working life in Manchester was horrific. Marx argued this was inevitable and would lead to such pain and rage the whole social system would be overthrown. 

None of this came true. The economy didn't collapse. It went through a boom of  stupendous magnitude and duration.

Now the problem is too little dark satanic mills and too much uninspiring lower class leisure like daytime tv? 

The world got hit with two massive shocks in the last twenty years. 

1. Global labor supply effectively doubled in the 1990s, both because of the entry of China and India into the world economy and because logistics and communication made it much easier to use remote labor.  The impact of that hit the American working class. A shock of that magnitude takes time to absorb.
2. Most new innovations are free at the point of delivery (Github, Facebook, Dropbox ) or not excludable goods, like cleaner air. 

A Shift in the Boundaries of the Market

That means we are seeing a shift in the boundaries of the market economy. Relatively fewer things will be exchanged for money, because the marginal cost of many goods  will be zero and distribution costs will be near-zero. Automation and artificial intelligence will only accelerate that trend. 

The shift in the boundaries of exchange is also because most of the new needs people have as society gets wealthier - status, affiliation, stimulation, meaning - aren't as easily bought and sold as grain or port wine or mousetraps .  

That doesn't necessarily mean disaster, though.  Most human societies historically have always had a smaller market sector. The "commons" was larger. Gift exchange, feudal or hierarchical obligation, family ties or subsistence agriculture have been far more important than the labor market for most of human history.  Women  mostly didn't work in the moneyed sector at all until forty years ago.  Indeed, even England only became a fully market economy in the early 1800s when the old medieval commons were enclosed and labor forced off the land to the cities or colonies. And it was only the requirement to pay government taxes in currency that forced many groups around the world into the market economy at all. The current  bundle of rules that make up a "job" or "corporation" and legal framework and expectations that go with them are mostly only 150 years old at most, not eternal  facts of nature.

In 1800 over 95% of populations worked the land. Now in the US it's about 3%. We have more agricultural productivity than ever, by a massive margin. But it's less important to the whole economy and population. The same thing will happen to the monetized exchange sector of the economy. The goods and labor market will be more productive than ever,  but a smaller proportion of the whole. 

We have a motivational and moral problem, not an economic problem

But it takes a lot of time for culture and human institutions and values to catch up. (See Douglas North, for example, or Avner Offer's brilliant The Challenge of Affluence.)  The main issue now  for humanity isn't starvation. It's motivation and what makes for human flourishing and the good life.  (Probably not daytime tv and OxyContin.)  It's  very much as Keynes foresaw in his famous essay Economic Possibilities for our Grandchildren. 

We've now actually solved the original economic problem of raw economic scarcity, starvation and disease. The problem isn't 30% child mortality or famine, as for most of human history.  Survival is rarely the problem any more. Instead, it's purpose. It's value and reward and how people get respect. That's an institutional, social or moral problem more than an economic one, which is why many economists can't handle it.

That's an epochal shift. We just have to figure out what to do with it. 

Trust and Attention in Opposition

This is a very thoughtful and interesting post by Seth Godin, who is a well-known marketing guru with a wonderful blog.

The two scarce elements of our economy are trust and attention.

Trust is scarce because it's not a simple instinct and it's incredibly fragile, disappearing often in the face of greed, shortcuts or ignorance.

And attention is scarce because it doesn't scale. We can't do more than one thing at a time, and the number of organizations and ideas that are competing for our attention grows daily.

People sometimes get more attention by doing a dance, he says, but violate trust in the process.

..those that pay the price to grab some momentary attention almost always do it at the cost of trust.

Part of it, no doubt, is that some of the main ways to grab attention are sensationalism, gossip, exaggeration, sex, glamor, or celebrity, which have never had wider respect. Linsey Lohan gets plenty of attention, but not much trust.

Much attention is tabloid. Much more is cat videos.

Another issue is attention span. It needs time and effort to build trust, which is usually a shared experience and co-evolution. The Internet, on the other hand, often gravitates towards tl;dr and 140-character tweets. The firehose of information hitting everyone means people take shorter and shorter gulps. Attention can be gained and lost faster than ever before.

The kicker is that the Internet also has a much quicker and more ruthless set of mechanisms to expose lack of trust than ever before as well, from Yelp and Tripadvisor with their customer reviews to the lack of gatekeepers who can direct and tamp down conversations.

We also have an inbuilt skepticism toward things that seem done purely for attention. Perceptions of motive is a major underlying force.

 

 

How self-actualization can produce all-or-nothing marriages

This is an interesting article in the NYT about the evolution of marriage. It argues marriage has changed in the last two hundred years as western societies have moved up Maslow's hierarchy of needs.

Our central claim is that Americans today have elevated their expectations of marriage and can in fact achieve an unprecedentedly high level of marital quality — but only if they are able to invest a great deal of time and energy in their partnership. If they are not able to do so, their marriage will likely fall short of these new expectations. Indeed, it will fall further short of people’s expectations than at any time in the past.

There have been three stages in marriage, according to author Eli Finkel. "Institutional" marriage, until about 1850, was largely a matter of mutual survival - food, shelter, and protection from violence. "Companionate" marriage, from 1850 to 1965, was more about love and companionship and intimacy, once the more basic needs were secure. And then,

Since around 1965, we have been living in the era of the self-expressive marriage. Americans now look to marriage increasingly for self-discovery, self-esteem and personal growth. Fueled by the countercultural currents of the 1960s, they have come to view marriage less as an essential institution and more as an elective means of achieving personal fulfillment.

But this has led to an all-or-nothing phenomenon.

HERE lie both the great successes and great disappointments of modern marriage. Those individuals who can invest enough time and energy in their partnership are seeing unprecedented benefits. The sociologists Jeffrey Dew and W. Bradford Wilcox have demonstrated that spouses who spent “time alone with each other, talking, or sharing an activity” at least once per week were 3.5 times more likely to be very happy in their marriage than spouses who did so less frequently. ...But on average Americans are investing less in their marriages — to the detriment of those relationships.

And so this leads to two very interesting points. At the higher levels of the hierarchy of needs, time and personal energy are much more important than before. And when it comes to self-actualization and self-expression, people's expectations matter more as well - perhaps especially when they become unrealistic or foolish. What can people do to improve theie marriages?

First and foremost, couples can choose to invest more time and energy in their marriage, perhaps by altering how they use whatever shared leisure time is available. But if couples lack the time and energy, they might consider adjusting their expectations, perhaps by focusing on cultivating an affectionate bond without trying to facilitate each other’s self-actualization.

There's perhaps wider lessons to be drawn from this. G remarked the other day that one problem with the Millenials is they have extremely high expectations of life, and then feel all the more crushed or resentful when they encounter resistance.

On one level, that story is as old as time. But it is almost a general truth that improvement often leads to turbulence and conflict and even violence because expectations have a tendency to rise faster than realization - which then produces frustration and anger. A rising Germany produced carnage in 19th and 20th century Europe. American cities burnt in riots mostly after the Civil Rights Act passed in 1964. Many developing countries like Egypt have increasingly educated youth but few jobs or positions for them.

Improvement very often produces accelerated expectations. So it means we ought to pay very close attention to how expectations change over time, rather than simply immediate income levels or distribution of income. So far as I know, there is very little data that tracks those kind of assumptions or expectations, beyond very basic things like whether people expect to earn more than their parents. It isn't a matter just of expected income, or short-term economic confidence. What kind of opportunities do people think they will have? How much security do they think they will enjoy? It must be as related to education as to current economic circumstances. It also must come from medi models How quickly and why do people scale back expectations?

This also relates to the evolution of ideas about the good life - something which I will come back to. But one clear conclusion here is, once again, the diminishing marginal utility of money at higher levels of needs. It is mainly time that needs to be invested in pursuit of happiness here, not dollars. In fact, earning more dollars actually takes away from time spent together.

This is the root of the deeper problems with the modern economy, which I've talked about a great deal before. Markets are extremely efficient at producing excludable rivalrous nonpositional goods, like croissants or cars. But if the things we increasingly want are not subject to definable property rights or depend largely on other people's behavior, like honor or reputation, then the goods we want increasingly lie outside the market sphere. That's not a criticism of markets, any more than you actively criticize a Ferrari because it can't fly. It's just a fact you can't really define a contractual tradable right to a happy marriage.

The article also represents a much more binary vision of outcomes, although it's not entirely clear why this should be seen as inevitable. As society rises up the levels of Maslow's hierarchy, does it mean that this all-or-nothing phenomenon will become more typical in other areas too? Or does it simply mean we need a rethink of use of time and it how it is related to happiness? To what extent to do people who fail to onvest enough time or energy in a relationship do so out of choice? There are certainly plenty of anecdotal stories of people who spend more time at the office to avoid spending time at home, or those who are compelled to stay in the office to keep their job.

Overall, it's a very interesting illustration of how core structures in our society, like marriage, are affected by the evolution of what people want and need as basic survival needs are taken care of.

 

What Machines Can't Do

Here's a very nice article by David Brooks.

More generally, the age of brilliant machines seems to reward a few traits. First, it rewards enthusiasm. The amount of information in front of us is practically infinite; so is that amount of data that can be collected with new tools. The people who seem to do best possess a voracious explanatory drive, an almost obsessive need to follow their curiosity. Maybe they started with obsessive gaming sessions, or marathon all-night study sessions, but they are driven to perform extended bouts of concentration, diving into and trying to make sense of these bottomless information oceans.

Second, the era seems to reward people with extended time horizons and strategic discipline. ..

That doesn’t seem too surprising. A computer can calculate a zillion options, move by move, but a human can provide an overall sense of direction and a conceptual frame. In a world of online distractions, the person who can maintain a long obedience toward a single goal, and who can filter out what is irrelevant to that goal, will obviously have enormous worth.

 

Achieved and ascribed identities

Here's an interesting piece in the Guardian, in the wake of the first recorded bar brawl over Kantian philosophy: two men in Russia got into a pub brawl over Kant, and one shot the other.

Kant cropped up again earlier this week while I was having coffee at my house with David Goodhart, the director of Demos, a thinktank that describes its mission as "to bring politics closer to people". We were recording a programme about community for Radio 4, in the course of which he said something extremely interesting: that the problem with the political class, and the reason they are often so emotionally and politically distant from many ordinary people, especially in settled working-class areas, is that their identities are often achieved, not ascribed.

What he means is that politicians, like many "successful" people, have achieved success by finding a route beyond the limitations of their background. They have come to define themselves not by where they are from, their community, but through what they have achieved in terms of education, qualifications, career and personal aspiration. Community is thus often a nostalgic background hum for many successful people, but not something they are completely embedded within. And if they find a new community, it is one they have chosen, not one ascribed to them by birth.

This, in a sense, is the Kantian ideal. "How recognisable, how familiar to us is the man so beautifully portrayed [by Kant]," wrote Iris Murdoch. "Free, independent, lonely, powerful, rational, responsible, brave, the hero of so many novels and books of moral philosophy.For Kant, the human being is at his or her best when they have successfully self-authored. It's all about self-determination. For such as these, freedom is about breaking free of allegiance, of the restrictions of the local and the particular. In such a world, loyalties are simply a temporary convenience.

Autonomy is not the whole of ethics.

 

People forget how to engage attention

Here's an interesting take in the New Yorker on how and why Facebook makes people unhappy.

What causes us to feel bored and, as a result, unhappy? Attention. When our attention is actively engaged, we aren’t bored; when we fail to engage, boredom sets in. As Eastwood’s work, along with recent research on media multitasking, have illustrated, the greater the number of things we have pulling at our attention, the less we are able to meaningfully engage, and the more discontented we become.

[...] Demands on our attention lead us to use Facebook more passively than actively, and passive experiences, no matter the medium, translate to feelings of disconnection and boredom.

In ongoing research, the psychologist Timothy Wilson has learned, as he put it to me, that college students start going “crazy” after just a few minutes in a room without their phones or a computer. “One would think we could spend the time mentally entertaining ourselves,” he said. “But we can’t. We’ve forgotten how.” Whenever we have downtime, the Internet is an enticing, quick solution that immediately fills the gap. We get bored, look at Facebook or Twitter, and become more bored. Getting rid of Facebook wouldn’t change the fact that our attention is, more and more frequently, forgetting the path to proper, fulfilling engagement. And in that sense, Facebook isn’t the problem. It’s the symptom.

In a broader sense, of course, the Internet offers much more opportunity for active engagement than staring at the television. And I'm not sure the point holds more generally. I'm typing this at my usual coffee shop in New York, a city which is a huge blaring multicolored kaleidoscope of things competing for attention - which is what makes it so stimulating. So why does big city buzz inspire, but online multiple pulls of attention enervate?

It must be something to do with energy and depth and unexpectedness. Any amount of shallow celebrity gossip and trivia must depress people after a while.

It must also have something to do with the right amount of stimulus. I'm reminded of Cziksentmihalyi's idea of flow, that the right amount of challenge, at the edge of our capabilities, puts us into a state where time just seems to pass almost without noticing because you are so absorbed in what you are doing.

Still, it's such a common experience now that people pay more attention to their devices than the person right in front of them that it must point to a deeper problem beyond Facebook.

I asked G about it. She says it's like a hunter-gatherer thing. You see something shiny or interesting, and the instinct is to grab it.

 

"Stop saying robots are killing jobs"

An article in MIT Technology Review disputes that technology is destroying jobs, especially arguments from Brynjolfsson and McAfee which we've seen before.

Brynjolfsson and McAfee’s mistake comes from considering only first order effects of automation where the machine replaces the worker. But when a machine replaces a worker, there is a second order effect: the organization using the machine saves money and that money it flows back into to the economy either through lower prices, higher wages for the remaining workers, or higher profits. In all three cases that money gets spent which stimulates demand that other companies respond to by hiring more workers.

It's the traditional argument that demand simply shifts to new goods and services. But it relies on the traditional assumption that new needs are similar in economic terms to the old ones. In the example above, what of the higher wages for the remaining workers induce them to take more leisure, so total wages remain the same or even fall? That has not happened much to date, but it is a matter of taste rather than economic law.

The fundamental issue is how and when things fall outside the monetary economy, so the flow above springs a leak. I keep arguing that more and more of the things we value as we rise up the hierarchy of needs are harder to package in monetary terms, because they are not excludable nor rival goods. As the underlying nature of the economy changes, our institutions have to adapt too.

 

Who will prosper in the New world?

Tyler Cowen asks in the NYT:

Who will do well? THE CONSCIENTIOUS Within five years we will are likely to have the world’s best education, or close to it, online and free. But not everyone will sit down and go through the material without a professor pushing them to do the work. Those who are motivated to use online resources will do much, much better in the generations to come.

Motivation - those who have it, those who can inspire it - is one of the main themes. It's an interesting take. I agree motivation - including incentivizing behavior - is the key issue for the emerging new economy. That's why I've been so interested in some of the classic psychology on motivation, like Maslow.

 

How technology wrecks the middle class

David Autor,a well-known Labor economist, and David Dorn write in the NYT today.

The good news, however, is that middle-education, middle-wage jobs are not slated to disappear completely. While many middle-skill jobs are susceptible to automation, others demand a mixture of tasks that take advantage of human flexibility. To take one prominent example, medical paraprofessional jobs — radiology technician, phlebotomist, nurse technician — are a rapidly growing category of relatively well-paid, middle-skill occupations. While these paraprofessions do not typically require a four-year college degree, they do demand some postsecondary vocational training.

It's not wholly new - a riff on the hollowing out thesis - but worth a look.

The "experience economy" comes to the arts

This is an interesting piece in the NYT. The art/ museum world is shifting towards a focus on experiences, it argues.

In this kind of world, the thrill of standing before art — except perhaps for works by boldface-name artists like van Gogh, Vermeer, Monet and Picasso (and leaving aside contemporary artists who draw attention by being outrageously controversial) — seems not quite exciting enough for most people. What’s a museum to do?

Glenn D. Lowry, the director of the Museum of Modern Art, has seen the future. In a speech he gave a while back in Australia, he noted that museums had to make a “shift away from passive experiences to interactive or participatory experiences, from art that is hanging on the wall to art that invites people to become part of it.” And, he said, art museums had to shed the idea of being a repository and become social spaces.

I discussed the book which, according to the NYT article, looks at the commercial aspects of this idea here.

Im fact, I was in the Metropolitan Museum yesterday, and walked around their newly rehung and expanded European paintings section. They now have what appear to be little iPad-like devices in front of some of the paintings, with simple analysis videos which are very effective.

Of course, they've had iPod-like audio devices for years, although I seldom use them. And I love their 82nd and Fifth series of two-minute videos about pieces.

But there must be so much more scope to put particular pieces or objects in context. Perhaps in five years, there will be video of some of the original settings for the Egyptian artifacts right beside them in the museum, for example.

Indeed, there could be a whole separate museum or area which looks for just a few pieces at a time in depth, using audio-visual means to delve deep into context, to enter into the world represented by the piece - the culture, the setting, the artist, ideas about art, how it fitted into the history of the time, audience and reception, technique, how it affected other art or ideas. The Met is dazzling in its breadth, but taking just a few things and looking very closely could be highly rewarding.

Instead of a room with twenty pieces of art, there could be one piece of art with twenty screens and a soundtrack. That could be inspirational, as well as a matter of participation and experience.

Artists often claim pieces speak for themselves. But they often speak in code, demanding knowledge of why and how the art has come about. More depth of context could challenge people much more to think and feel and respond to something encapsulating a different age and point of view. The key would be to go deep enough to challenge the superficiality or assumptions a viewer brings to the piece.

 

Moving on from Clippy

"Bill Gates says software assistants can save the world," says MIT Technology Review.

Readily accessible floods of data, combined with powerful cloud computing and advances in software, should allow personal assistants to “understand” what humans are doing and actively collaborate or help them out, said Gates. Smart assistant software could even be crucial in addressing some of the world’s most challenging problems, he said, as identified by his philanthropic organization the Gates Foundation.

Gates said, for example, that software able to intelligently interpret the available data about a person and respond could improve education.

The software agents could help make decisions, too.

Gates imagined an assistant helping a Kenyan farmer using the M-Pesa mobile banking system that handles roughly 30 percent of the country’s GDP (see “Shopping via Text Message”). “When I sell my crop after the harvest, it advises me to save some of my money and even makes that deposit,” said Gates, who praised the data M-Pesa has made available for such projects

Clippy, the notorious Microsoft paperclip "helper", had perhaps just been premature, he said.

Clearly, there's something to this argument. But for now, I find the services available surprisingly primitive. Nobody has yet developed an effective assistant to help prioritize an email inbox, for example (at least commercially). Junk filters and prioritizing some senders is about all email programs do. Compare this to the confident hopes about artificial intelligence and expert systems in the 1980s. Far from super intelligent computers taking over the world, they can barely sort important work time-sensitive email from routine information emails.

And for all the discussion of predicting wants and needs, I still find one of the most common examples, Netflix suggestions, amazingly primitive sometimes. It has not yet figured out there is a man and a woman in our house and they often like different movies.

The difficulty has always been computers have difficulty with context and meaning. Brute force and massive amounts of data, such as Google Machine translation, is starting to change that. However , it looks like we're just going to see specific small-scale helpers for the time being.

That could still have an impact in education or office productivity. But expectations have also fallen.

 

 

"For the Last Time, Robots Do NOT Cause Unemployment"

Here's a pushback at RealClearMarkets against recent worries about technology and the job market.

Parts of the nation's commentariat have been seized, in recent months, with a nasty bout of technophobia. Technophobia is a psychological condition, but infectious. Hardly a week goes by without a new outbreak documented in another blog post or business column. To judge from the symptomatic hand-wringing the epidemic is spreading, we are on the verge of mass unemployment as work becomes increasingly automated.

As I've often said, it is clearly true that there has always been an increase in aggregate demand for labor in the past. But to argue that will continue indefinitely carries an assumption the nature of needs and wants is static. Economics is not that good at understanding changing needs and preferences. Instead, they are treated as exogenous. And that is a foolish assumption.

In fact, it's not at root an economic problem. It's an ethical and instiutuonal problem. There needs to be deeper change and adaptation in economic institutions. That more attention to issues of the "good life " given basic economic survival is no longer the prime problem facing humanity. The labor market achieved huge prominence in the industrial revolution period, dominating life in a way which would have been inscrutable to medieval peasants on the land, or aristocratic Romans. It may be less prominent in the future.

"Sympathy for the Luddites"

Paul Krugman says technological disruption is real, and argues redistribution is the only way to deal with it.

And the modern counterparts of those woolworkers might well ask further, what will happen to us if, like so many students, we go deep into debt to acquire the skills we’re told we need, only to learn that the economy no longer wants those skills?

Education, then, is no longer the answer to rising inequality, if it ever was (which I doubt).

So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.

It's interesting evidence mainstream economics is starting to get worried about this issue. He's not providing a "but these fears have always been misplaced in the past" usual take.

The trouble is redistribution without some sense of who deserves what isn't going to fly. This is the left's problem: people don't believe equality is the same as justice (or "fairness".) We can't solve this without having some sense of what we value, or what the good life is. And liberal neutrality on that question, and its focus on material resources and income above all, makes that impossible.

Krugman's solution also assumes there will be supernormal profits, but technology may compete and innovate those away, too. In a perfect market profit is zero, after all, and tehnology is removing barriers to entry and market segmentation.

 

 

 

 

Siren Servers

The stories about NSA surveillance of email and phone metadata are one more boost to skepticism about the new digital economy.

Here's a separate article in the NYT about digital concentration of influence and wealth.

DISSECT almost any ascendant center of power, and you’ll find a giant computer at the core. In the past, power and influence were gained by controlling something that people needed, like oil or transportation routes. Now to be powerful can mean having the most effective computer on a network. In most cases, this means the biggest and most connected computer, though very occasionally a well-operated small computer can play the game, as is the case with WikiLeaks. Those cases are so rare, however, that we shouldn’t fall into the illusion of thinking of computers as great equalizers, like guns in the Wild West.

The new class of ultra-influential computers come in many guises. Some run financial schemes, like high-frequency trading, and others run insurance companies. Some run elections, and others run giant online stores. Some run social network or search services, while others run national intelligence services. The differences are only skin deep. I call this kind of operation a “Siren Server.”

The irony is the original image of the personal computer was of liberation, such as Apple's famous Superbowl ad in 1984. The Silicon Valley political vision of the world - a kind of libertarian paradise - is encountering increasing resistance and skepticism.

So the author of the NYT article suggests we should move towards micropayments for our personal information, to reduce the advantage of the "siren servers."

Of course, the counterargument is today's titans - Google, Facebook, Amazon, Apple - are likely to be tomorrow's Dell, Compaq, MySpace, or AOL, let alone earlier titans such as Bethlehem Steel or Pennsylvania Railroad. I doubt there are natural monopolies or network effects sufficiently powerful to entrench the current digital elite for long.

Algorithms can be replicated. That kind of information wants to be free, too. And if people find their personal data is being over-exploited, they will find alternative ways to communicate.

There can often be something of an arms race with technology. Take airline fares, for example. Large centralized computing power originally enabled the airlines to segment their customers in the 1970s and 1980s, and extract the maximum amount people would pay for a certain route. But the consumer caught up. Technology also brought transparency before long, including sites like Expedia or Kayak. Large centralized computers still price airline fares, but the airlines barely stay out of bankruptcy most of the time, and their only way to get pricing power is to cut capacity. Their industry became commoditized.

People have also feared the use of technology for surveillance for decades, but it usually enables transparency and less power for gatekeepers too.

The whole economy is changing in deeper ways, and that is irreversible. But I doubt that technology will enable any enduring center of power.

 

 

 

 

 

The Prevalence of Loneliness

This, from an article in the New Republic, is an indicator that things are not going well in society. How truly amazing and sad.

... even among the not-so-old, loneliness is pervasive. In a survey published by the AARP in 2010, slightly more than one out of three adults 45 and over reported being chronically lonely (meaning they’ve been lonely for a long time). A decade earlier, only one out of five said that. With baby-boomers reaching retirement age at a rate of 10,000 a day, the number of lonely Americans will surely spike.

I've talked before how we overlook the importance of connection and the experience of the texture of daily lived life, as if we need a "gross national loneliness" to set against GDP.

 

Work is a human right

A great essay by Walter Russell Mead, here. I disagree with his confidence about personal services sometimes, but this is good stuff, worth reading in full.

There is a horrible snobbery lurking beneath the idea that most people will not be able to find meaningful work when the age of scarcity ends. Once the working classes aren’t needed to dig coal anymore, in this view, there is nothing to be done for the mass of mankind than to sit them in front of the TV on a comfy couch with a big bag of chips. They are good for nothing else.

This is a premise which any serious theist or humanist must reject. If we believe that every human being has a unique real worth, we must also believe that every human being has a contribution to make. Keynes rather snidely remarks that few people have the talent to live creative lives; writing about the difficulty many will have adjusting to lives without toil he warns of the intense boredom that most will suffer. “Yet it will only be for those who have to do with the singing that life will be tolerable and how few of us can sing!”

Actually, a good many more of us can sing than Keynes thought; it’s just that life in the coal mines and the factories means that many people haven’t had the same chances to develop their talents that a son of privilege like Keynes did.

 

Morality unhinged from Wisdom

Walter Russell Mead writes about the situation in Syria, as Samantha Power, who urged humanitarian interventions, leaves the Obama Administration:

As a general rule, sad to say, the good guys and the smart guys often play on different teams. For too many foreign policy humanitarians, it is more important to have good intentions than to understand the crooked and wicked ways of the world you want to change. This instinct for the ideal over the real was a hallmark of humanitarian policy failures all during the 20th century and on the evidence to date the deadly mixture of political amateurism with ambitious humanitarian international agendas has persisted into the 21st. America’s university campuses are packed with people who believe that the flaws in our foreign policy are failures of morality rather than failures of forethought and execution, but morality unhinged from wisdom is one of the most destructive forces known to man.

 

The end of entitlement

Robert Samuelson writes that the public is going through a downshift in expectations that is having deeper political consequences.

Weighed down by these contradictions, entitlement has been slowly crumbling for decades. The Great Recession merely applied the decisive blow. We're not entitled to many things: not to a dynamic economy; not to secure jobs; not to homeownership; not to ever-more protective government; not to fixed tax burdens; not to a college education. Sooner or later, the programs called "entitlements," including Social Security, will be trimmed because they're expensive and some recipients are less deserving than others.

The collision between present realities and past expectations helps explain the public's extraordinary moodiness. The pandering to the middle class by both parties (and much of the media) represents one crude attempt to muffle the disappointment, a false reassurance that the pleasing past can be reclaimed. It can't.

I don't think this is true. We still have the paradox that we have more productive capacity and underlying abundance than ever before. The problem is we have less and less clarity on how to distribute it, or what we value, or what incentives are or ought to be.

What it does mean is we need a deeper rethink of economic institutions to cope with a world in which many of the things we value most are not easily traded. Government cannot deliver what people want if we have no shared vision of what people ought to want, in their own different ways. Instead, our general discourse on rights and universal rules tends to evade the question.

"..some recipients are less deserving than others" says Samuelson. That is the heart of the problem. It is a matter of ethics, not economics. The left wants universal (unearned) rights. The right wants a changing mix of pure market allocation and tradition.

People are just not that motivated by money alone

Here's an interesting blog post on the Harvard Business Review site on how money and motivation are related: they're not.

The results indicate that the association between salary and job satisfaction is very weak. The reported correlation (r = .14) indicates that there is less than 2% overlap between pay and job satisfaction levels. Furthermore, the correlation between pay and pay satisfaction was only marginally higher (r = .22 or 4.8% overlap), indicating that people's satisfaction with their salary is mostly independent of their actual salary.

In addition, a cross-cultural comparison revealed that the relationship of pay with both job and pay satisfaction is pretty much the same everywhere (for example, there are no significant differences between the U.S., India, Australia, Britain, and Taiwan).

It puts a little more solid evidence around the argument that is made in books like Daniel Pink's Drive: The Surprising Truth About What Motivates Us.