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The history of inequality (by Peter Turchin) - 0 views

  • Today, the top one per cent of incomes in the United States accounts for one fifth of US earnings. The top one per cent of fortunes holds two-fifths of the total wealth.
  • As the Congressional Budget Office concluded in 2011: ‘the precise reasons for the rapid growth in income at the top are not well understood’.
  • In his book Wealth and Democracy (2002), Kevin Phillips came up with a useful way of thinking about the changing patterns of wealth inequality in the US.
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  • He looked at the net wealth of the nation’s median household and compared it with the size of the largest fortune in the US. The ratio of the two figures provided a rough measure of wealth inequality, and that’s what he tracked, touching down every decade or so from the turn of the 19th century all the way to the present.
  • We found repeated back-and-forth swings in demographic, economic, social, and political structures
  • From 1800 to the 1920s, inequality increased more than a hundredfold.
  • Then came the reversal: from the 1920s to 1980, it shrank back to levels not seen since the mid-19th century.
  • From 1980 to the present, the wealth gap has been on another steep, if erratic, rise. Commentators have called the period from 1920s to 1970s the ‘great compression’. The past 30 years are known as the ‘great divergence’.
    • anonymous
       
      I'd like to pull this citation and superimpose another period-chart onto my timeline.
  • when looked at over a long period, the development of wealth inequality in the US appears to be cyclical. And if it’s cyclical, we can predict what happens next.
  • Does observing just one and a half cycles really show that there is a regular pattern in the dynamics of inequality? No, by itself it doesn’t.
  • In our book Secular Cycles (2009), Sergey Nefedov and I applied the Phillips approach to England, France and Russia throughout both the medieval and early modern periods, and also to ancient Rome.
  • And the cycles of inequality were an integral part of the overall motion.
  • Cycles in the real world are chaotic, because complex systems such as human societies have many parts that are constantly moving and influencing each other.
  • Understanding (and perhaps even forecasting) such trend-reversals is at the core of the new discipline of cliodynamics, which looks at history through the lens of mathematical modelling.
    • anonymous
       
      Cliodynamics - Another thing to learn a bit more about.
  • First, we need to think about jobs.
  • One of the most important forces affecting the labour supply in the US has been immigration
  • it turns out that immigration, as measured by the proportion of the population who were born abroad, has changed in a cyclical manner just like inequality.
  • Another reason why the labour supply in the US went up in the 19th century is, not to put too fine a point on it, sex.
  • This connection between the oversupply of labour and plummeting living standards for the poor is one of the more robust generalisations in history.
  • The population of England doubled between 1150 and 1300.
  • causing the population of London to balloon from 20,000 to 80,000.
  • fourfold increase in food prices and a halving of real wages.
  • when a series of horrible epidemics, starting with the Black Death of 1348, carried away more than half of the population, the same dynamic ran in reverse.
  • The tug of war between the top and typical incomes doesn’t have to be a zero-sum game, but in practice it often is
  • Much the same pattern can be seen during the secular cycle of the Roman Principate.
  • Naturally, the conditions affecting the labour supply were different in the second half of the 20th century in the US. An important new element was globalisation
  • an oversupply of labour tends to depress wages for the poorer section of the population. And just as in Roman Egypt, the poor in the US today eat more energy-dense foods — bread, pasta, and potatoes — while the wealthy eat more fruit and drink wine.
  • Falling wages isn’t the only reason why labour oversupply leads to inequality. As the slice of the economic pie going to employees diminishes, the share going to employers goes up.
  • And so in 13th-century England, as the overall population doubles, we find landowners charging peasants higher rents and paying less in wages: the immiseration of the general populace translates into a Golden Age for the aristocrats.
  • the number of knights and esquires tripled between 1200 and 1300.
  • Only the gentry drank wine, and around 1300, England imported 20,000 tuns or casks of it from France per year. By 1460, this declined to only 5,000.
  • In the US between around 1870 and 1900, there was another Golden Age for the elites, appropriately called the Gilded Age.
  • And just like in 13th-century England, the total number of the wealthy was shooting up. Between 1825 and 1900, the number of millionaires (in constant 1900 dollars) went from 2.5 per million of the population to 19 per million.
  • In our current cycle, the proportion of decamillionaires (those whose net worth exceeds 10 million in 1995 dollars) grew tenfold between 1992 and 2007 — from 0.04 to 0.4 per cent of the US population.
  • On the face of it, this is a wonderful testament to merit-based upward mobility. But there are side effects. Don’t forget that most people are stuck with stagnant or falling real wages. Upward mobility for a few hollows out the middle class and causes the social pyramid to become top-heavy.
  • As the ranks of the wealthy swell, so too do the numbers of wealthy aspirants for the finite supply of political positions.
  • The civil wars of the first century BC, fuelled by a surplus of politically ambitious aristocrats, ultimately caused the fall of the Republic and the establishment of the Empire.
  • So far I have been talking about the elites as if they are all the same. But they aren’t: the differences within the wealthiest one per cent are almost as stark as the difference between the top one per cent and the remaining 99.
  • very intense status rivalry
  • Archaeology confirms a genuine and dramatic shift towards luxury.
  • Social Darwinism took off during the original Gilded Age, and Ayn Rand (who argued that altruism is evil) has grown astonishingly popular during what we might call our Second Gilded Age.
  • Twilight of the Elites (2012): ‘defenders of the status quo invoke a kind of neo-Calvinist logic by saying that those at the top, by virtue of their placement there, must be the most deserving’. By the same reasoning, those at the bottom are not deserving. As such social norms spread, it becomes increasingly easy for CEOs to justify giving themselves huge bonuses while cutting the wages of workers.
  • Labour markets are especially sensitive to cultural norms about what is fair compensation, so prevailing theories about inequality have practical consequences.
  • the US political system is much more attuned to the wishes of the rich than to the aspirations of the poor.
  • Inverse relationship between well-being and inequality in American history. The peaks and valleys of inequality (in purple) represent the ratio of the largest fortunes to the median wealth of households (the Phillips curve). The blue-shaded curve combines four measures of well-being: economic (the fraction of economic growth that is paid to workers as wages), health (life expectancy and the average height of native-born population), and social optimism (the average age of first marriage, with early marriages indicating social optimism and delayed marriages indicating social pessimism).
  • In some historical periods it worked primarily for the benefit of the wealthy. In others, it pursued policies that benefited the society as a whole. Take the minimum wage, which grew during the Great Compression era and declined (in real terms) after 1980.
  • The top marginal tax rate was 68 per cent or higher before 1980; by 1988 it declined to 28 per cent.
  • In one era, government policy systematically favoured the majority, while in another it favoured the narrow interests of the wealthy elites. This inconsistency calls for explanation.
  • How, though, can we account for the much more broadly inclusive policies of the Great Compression era? And what caused the reversal that ended the Gilded Age and ushered in the Great Compression? Or the second switch, which took place around 1980?
  • Unequal societies generally turn a corner once they have passed through a long spell of political instability.
  • We see this shift in the social mood repeatedly throughout history — towards the end of the Roman civil wars (first century BC), following the English Wars of the Roses (1455-85), and after the Fronde (1648-53), the final great outbreak of violence that had been convulsing France since the Wars of Religion began in the late 16th century.
  • Put simply, it is fear of revolution that restores equality. And my analysis of US history in a forthcoming book suggests that this is precisely what happened in the US around 1920.
  • The worst incident in US labour history was the West Virginia Mine War of 1920—21, culminating in the Battle of Blair Mountain.
  • Although it started as a workers’ dispute, the Mine War eventually turned into the largest armed insurrection that the US has ever seen, the Civil War excepted. Between 10,000 and 15,000 miners armed with rifles battled against thousands of strikebreakers and sheriff deputies.
  • Quantitative data indicate that this period was the most violent in US history, second only to the Civil War. It was much, much worse than the 1960s.
  • The US, in short, was in a revolutionary situation, and many among the political and business elites realised it.
  • The US elites entered into an unwritten compact with the working classes. This implicit contract included the promise that the fruits of economic growth would be distributed more equitably among both workers and owners. In return, the fundamentals of the political-economic system would not be challenged (no revolution).
  • The deal allowed the lower and upper classes to co-operate in solving the challenges facing the American Republic — overcoming the Great Depression, winning the Second World War, and countering the Soviet threat during the Cold War.
  • while making such ‘categorical inequalities’ worse, the compact led to a dramatic reduction in overall economic inequality.
  • The co-operating group was mainly native-born white Protestants. African-Americans, Jews, Catholics and foreigners were excluded or heavily discriminated against.
  • When Barry Goldwater campaigned on a pro-business, anti-union and anti-big government platform in the 1964 presidential elections, he couldn’t win any lasting support from the corporate community. The conservatives had to wait another 16 years for their triumph.
  • But by the late 1970s, a new generation of political and business leaders had come to power. To them the revolutionary situation of 1919-21 was just history. In this they were similar to the French aristocrats on the eve of the French Revolution, who did not see that their actions could bring down the Ancien Régime — the last great social breakdown, the Fronde, being so far in the past.
    • anonymous
       
      This heavily mirrors many aspects of Strauss & Howe's observations. Namely that generational cohorts roughly conform to archetypes precisely *because* memory of prior situations moves from accessible-memory (in those who have it) to history/myth once those who remember it have died.
  • It is no coincidence that the life of Communism (from the October Revolution in Russia in 1917 to the fall of the Berlin Wall in 1989) coincides almost perfectly with the Great Compression era.
  • when Communism collapsed, its significance was seriously misread. It’s true that the Soviet economy could not compete with a system based on free markets plus policies and norms that promoted equity.
  • Yet the fall of the Soviet Union was interpreted as a vindication of free markets, period. The triumphalist, heady atmosphere of the 1990s was highly conducive to the spread of Ayn Randism and other individualist ideologies. The unwritten social contract that had emerged during the New Deal and braved the challenges of the Second World War had faded from memory.
  • all of these trends are part of a complex and interlocking system. I don’t just mean that everything affects everything else; that would be vacuous.
  • Rather, that cliodynamic theory can tell us specifically how demographic, economic and cultural variables relate to one another, and how their interactions generate social change.
  • Cliodynamics also explains why historical reversals in such diverse areas as economics and culture happen at roughly similar times. The theory of secular cycles was developed using data from historical societies, but it looks like it can provide answers to questions about our own society.
  • Three years ago I published a short article in the science journal Nature. I pointed out that several leading indicators of political instability look set to peak around 2020.
    • anonymous
       
      2020-2025 is a date-range that continues to pop up in my forecasting readings - and from quite a variety of sources.
  • In other words, we are rapidly approaching a historical cusp, at which the US will be particularly vulnerable to violent upheaval. This prediction is not a ‘prophecy’. I don’t believe that disaster is pre-ordained, no matter what we do. On the contrary, if we understand the causes, we have a chance to prevent it from happening. But the first thing we will have to do is reverse the trend of ever-growing inequality.
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    "After thousands of scholarly and popular articles on the topic, one might think we would have a pretty good idea why the richest people in the US are pulling away from the rest. But it seems we don't. As the Congressional Budget Office concluded in 2011: 'the precise reasons for the rapid growth in income at the top are not well understood'. Some commentators point to economic factors, some to politics, and others again to culture. Yet obviously enough, all these factors must interact in complex ways. What is slightly less obvious is how a very long historical perspective can help us to see the whole mechanism."
anonymous

Information Consumerism: The Price of Hypocrisy - 0 views

  • let us not pass over America’s surveillance addiction in silence. It is real; it has consequences; and the world would do itself a service by sending America to a Big Data rehab. But there’s more to learn from the Snowden affair.
  • It has also busted a number of myths that are only peripherally related to surveillance: myths about the supposed benefits of decentralized and commercially-operated digital infrastructure, about the current state of technologically-mediated geopolitics, about the existence of a separate realm known as “cyberspace.”
  • First of all, many Europeans are finally grasping, to their great dismay, that the word “cloud” in “cloud computing” is just a euphemism for “some dark bunker in Idaho or Utah.”
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  • Second, ideas that once looked silly suddenly look wise. Just a few months ago, it was customary to make fun of Iranians, Russians and Chinese who, with their automatic distrust of all things American, spoke the bizarre language of “information sovereignty.”
  • Look who’s laughing now: Iran’s national email system launched a few weeks ago. Granted the Iranians want their own national email system, in part, so that they can shut it down during protests and spy on their own people AT other times. Still, they got the geopolitics exactly right: over-reliance on foreign communications infrastructure is no way to boost one’s sovereignty. If you wouldn’t want another nation to run your postal system, why surrender control over electronic communications?
    • anonymous
       
      This could have been written by StratFor.
  • Third, the sense of unconditional victory that civil society in both Europe and America felt over the defeat of the Total Information Awareness program – a much earlier effort to establish comprehensive surveillance – was premature.
  • The problem with Total Information Awareness was that it was too big, too flashy, too dependent on government bureaucracy. What we got instead, a decade later, is a much nimbler, leaner, more decentralized system, run by the private sector and enabled by a social contract between Silicon Valley and Washington
  • This is today’s America in full splendor: what cannot be accomplished through controversial legislation will be accomplished through privatization, only with far less oversight and public control.
  • From privately-run healthcare providers to privately-run prisons to privately-run militias dispatched to war zones, this is the public-private partnership model on which much of American infrastructure operates these days.
  • Communications is no exception. Decentralization is liberating only if there’s no powerful actor that can rip off the benefits after the network has been put in place.
  • Fourth, the idea that digitization has ushered in a new world, where the good old rules of realpolitik no longer apply, has proved to be bunk. There’s no separate realm that gives rise to a new brand of “digital” power; it’s one world, one power, with America at the helm.
    • anonymous
       
      THIS right here, is crucial.
  • The sheer naivete of statements like this – predicated on the assumption that somehow one can “live” online the way one lives in the physical world and that virtual politics works on a logic different from regular politics – is illustrated by the sad case of Edward Snowden, a man with a noble mission and awful trip-planning skills.
  • Fifth, the once powerful myth that there exists a separate, virtual space where one can have more privacy and independence from social and political institutions is dead.
  • Microsoft’s general counsel wrote that “looking forward, as Internet-based voice and video communications increase, it is clear that governments will have an interest in using (or establishing) legal powers to secure access to this kind of content to investigate crimes or tackle terrorism. We therefore assume that all calls, whether over the Internet or by fixed line or mobile phone, will offer similar levels of privacy and security.”
  • Read this again: here’s a senior Microsoft executive arguing that making new forms of communication less secure is inevitable – and probably a good thing.
  • Convergence did happen – we weren’t fooled! – but, miraculously, technologies converged on the least secure and most wiretap-friendly option available.
  • This has disastrous implications for anyone living in dictatorships. Once Microsoft and its peers start building software that is insecure by design, it turbocharges the already comprehensive spying schemes of authoritarian governments. What neither NSA nor elected officials seem to grasp is that, on matters of digital infrastructure, domestic policy is also foreign policy; it’s futile to address them in isolation.
  • This brings us to the most problematic consequence of Snowden’s revelations. As bad as the situation is for Europeans, it’s the users in authoritarian states who will suffer the most.
  • And not from American surveillance, but from domestic censorship. How so? The already mentioned push towards “information sovereignty” by Russia, China or Iran would involve much more than protecting their citizens from American surveillance. It would also trigger an aggressive push to shift public communication among these citizens – which, to a large extent, still happens on Facebook and Twitter – to domestic equivalents of such services.
  • It’s probably not a coincidence that LiveJournal, Russia’s favorite platform, suddenly had maintenance issues – and was thus unavailable for general use – at the very same time that a Russian court announced its verdict to the popular blogger-activist Alexei Navalny.
  • For all the concerns about Americanization and surveillance, US-based services like Facebook or Twitter still offer better protection for freedom of expression than their Russian, Chinese or Iranian counterparts.
  • This is the real tragedy of America’s “Internet freedom agenda”: it’s going to be the dissidents in China and Iran who will pay for the hypocrisy that drove it from the very beginning.
  • On matters of “Internet freedom” – democracy promotion rebranded under a sexier name – America enjoyed some legitimacy as it claimed that it didn’t engage in the kinds of surveillance that it itself condemned in China or Iran. Likewise, on matters of cyberattacks, it could go after China’s cyber-espionage or Iran’s cyber-attacks because it assured the world that it engaged in neither.
  • Both statements were demonstrably false but lack of specific evidence has allowed America to buy some time and influence.
  • What is to be done? Let’s start with surveillance. So far, most European politicians have reached for the low-hanging fruit – law – thinking that if only they can better regulate American companies – for example, by forcing them to disclose how much data and when they share with NSA – this problem will go away.
  • This is a rather short-sighted, naïve view that reduces a gigantic philosophical problem – the future of privacy – to seemingly manageable size of data retention directives.
  • Our current predicaments start at the level of ideology, not bad policies or their poor implementation.
  • As our gadgets and previously analog objects become “smart,” this Gmail model will spread everywhere. One set of business models will supply us with gadgets and objects that will either be free or be priced at a fraction of their real cost.
  • In other words, you get your smart toothbrush for free – but, in exchange, you allow it to collect data on how you use the toothbrush.
  • If this is, indeed, the future that we are heading towards, it’s obvious that laws won’t be of much help, as citizens would voluntarily opt for such transactions – the way we already opt for free (but monitorable) email and cheaper (but advertising-funded) ereaders.
  • In short, what is now collected through subpoenas and court orders could be collected entirely through commercial transactions alone.
  • Policymakers who think that laws can stop this commodificaton of information are deluding themselves. Such commodification is not happening against the wishes of ordinary citizens but because this is what ordinary citizen-consumer want.
  • Look no further than Google’s email and Amazon’s Kindle to see that no one is forced to use them: people do it willingly. Forget laws: it’s only through political activism and a robust intellectual critique of the very ideology of “information consumerism” that underpins such aspirations that we would be able to avert the inevitable disaster.
  • Where could such critique begin? Consider what might, initially, seem like a bizarre parallel: climate change.
  • For much of the 20th century, we assumed that our energy use was priced correctly and that it existed solely in the consumer paradigm of “I can use as much energy as I can pay for.” Under that paradigm, there was no ethics attached to our energy use: market logic has replaced morality – which is precisely what has enabled fast rates of economic growth and the proliferation of consumer devices that have made our households electronic paradises free from tiresome household work.
  • But as we have discovered in the last decade, such thinking rested on a powerful illusion that our energy use was priced correctly – that we in fact paid our fair share.
  • But of course we had never priced our energy use correctly because we never factored in the possibility that life on Earth might end even if we balance all of our financial statements.
  • The point is that, partly due to successful campaigns by the environmental movement, a set of purely rational, market-based decisions have suddenly acquired political latency, which has given us differently designed cars, lights that go off if no one is in the room, and so forth.
  • It has also produced citizens who – at least in theory – are encouraged to think of implications that extend far beyond the ability to pay their electricity bill.
  • Right now, your decision to buy a smart toothbrush with a sensor in it – and then to sell the data that it generates – is presented to us as just a purely commercial decision that affects no one but us.
  • But this is so only because we cannot imagine an information disaster as easily as we can imagine an environmental disaster.
  • there are profound political and moral consequences to information consumerism– and they are comparable to energy consumerism in scope and importance.
  • We should do our best to suspend the seeming economic normalcy of information sharing. An attitude of “just business!” will no longer suffice. Information sharing might have a vibrant market around it but it has no ethical framework to back it up.
  • NSA surveillance, Big Brother, Prism: all of this is important stuff. But it’s as important to focus on the bigger picture -- and in that bigger picture, what must be subjected to scrutiny is information consumerism itself – and not just the parts of the military-industrial complex responsible for surveillance.
  • As long as we have no good explanation as to why a piece of data shouldn’t be on the market, we should forget about protecting it from the NSA, for, even with tighter regulation, intelligence agencies would simply buy – on the open market – what today they secretly get from programs like Prism.
  • Some might say: If only we could have a digital party modeled on the Green Party but for all things digital. A greater mistake is harder to come by.
  • What we need is the mainstreaming of “digital” topics – not their ghettoization in the hands and agendas of the Pirate Parties or whoever will come to succeed them. We can no longer treat the “Internet” as just another domain – like, say, “the economy” or the “environment” – and hope that we can develop a set of competencies around it.
  • Forget an ambiguous goal like “Internet freedom” – it’s an illusion and it’s not worth pursuing. What we must focus on is creating environments where actual freedom can still be nurtured and preserved.
  • The Pirates’s tragic miscalculation was trying to do too much: they wanted to change both the process of politics and its content. That project was so ambitious that it was doomed to failure from the very beginning.
  • whatever reforms the Pirates have been advancing did not seem to stem from some long critical reflections of the pitfalls of the current political system but, rather, from their belief that the political system, incompatible with the most successful digital platforms from Wikipedia to Facebook, must be reshaped in their image. This was – and is – nonsense.
  • A parliament is, in fact, different from Wikipedia – but the success of the latter tells us absolutely nothing about the viability of the Wikipedia model as a template for remodeling our political institutions
  • In as much as the Snowden affair has forced us to confront these issues, it’s been a good thing for democracy. Let’s face it: most of us would rather not think about the ethical implications of smart toothbrushes or the hypocrisy involved in Western rhetoric towards Iran or the genuflection that more and more European leaders show in front of Silicon Valley and its awful, brain-damaging language, the Siliconese.
  • The least we can do is to acknowledge that the crisis is much deeper and that it stems from intellectual causes as much as from legal ones. Information consumerism, like its older sibling energy consumerism, is a much more dangerous threat to democracy than the NSA.
  •  
    "The problem with the sick, obsessive superpower revealed to us by Edward Snowden is that it cannot bring itself to utter the one line it absolutely must utter before it can move on: "My name is America and I'm a dataholic.""
anonymous

An empirical perspective on religious and secular reasons « The Immanent Frame - 0 views

  • An example of a policy that would apply to all citizens is gay marriage, and we have all encountered religious reasons for banning gay marriage, such as, “Leviticus 18:22 tells us that homosexuality is an abomination before God.”
  • “Public reason” is a bit more obscure, but liberal theorists mean by the term general reasons that are widely or near universally shared by citizens. This would preclude reasons deriving from any “comprehensive perspective,” such as religion, obviously including Leviticus 18:22.
  • It is critical for our society that we get this normative debate right, for the stakes are high. We face increasing religious diversity. Liberal theorists, like Rawls, say that unless we keep religious reasons out of the public sphere, we could descend into a religiously motivated civil war similar to the Thirty Years’ War of the sixteenth century. On the other hand, critics of liberal theorists, like religious ethicist Charles Mathewes, say that unless we allow each other to talk about our deep differences, such as our religious beliefs, we could descend into the same nightmare that concerns the liberal theorists.
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  • This normative debate is about what people should do in public debates, but knowing what people actually do would allow theorists to develop greater nuance in their analyses.
  • One of the premises of this entire debate is that religious people want to use religious reasons in public debates.
  • If anyone would want to use religious reasons, it would be these activists. But what the scholars find is that, in fact, the religious Right offers secular reasons for their policy proposals.
  • This is not because they are normatively sanctioned for using religious reasons, as critics of liberal theory suggest. Rather, religious reasons do not convince people to accept one’s position.
  • Scholars such as Robert Audi say that religious reasons should not be used anywhere along the spectrum, while others, like Chris Eberle in an earlier post, argue that religious reasons can be given by elected officials while passing laws; and Charles Taylor writes that the use of religious reasons by elected officials is fine, but secular reasons are required in the “official language of the state,” such as the wording of laws.
  • the acceptability of using religious reasons depends on the proximity of the reason-giver to the creation of policy
  • near the “actual power” end of the spectrum, religious people do not want to give religious reasons, because they do not work.
  • If they do not work to mobilize a sub-group of citizens to  advocate for banning abortion, they are not going to be effective for forging a majority vote in Congress, which in theory is just as pluralistic as the citizenry.
  • In my interviews, a majority of the people thought one should use religious discourse with the Hindu neighbor, with conservative Protestants being the most likely to say so. Interestingly, a majority of the secular respondents also thought that one should use religious discourse
  • The most prevalent reason given for advocating the use of religious reasons is that using only secular reasons is not possible if you are religious.
  • respondents actually wanted to start the conversation with secular reasons in order to be understood.
  • As one evangelical said, he tries to avoid “Christian speak” because “nobody knows what the heck you are talking about.” However, if they were asked to give reasons for their reasons, then the respondents thought that eventually their religious reasons would have to be brought into the conversation, because those are “behind” everything.
  • two implications
  • First, it seems that both professional activists and ordinary religious people, including religious conservatives, want to use public reasons in the public sphere.
  • A second implication is that, contrary to what many theorists maintain, religious people appear to be quite capable of translating between religious and secular reasons
  • Calhoun, expanding on Habermas’s notion of translation, explores the idea that what is needed is not the translation of religious reasons into secular reasons, or the exclusive use of one or the other, but “mutual interrogation,” or a “complementary learning process” about people’s real reasons, religious or otherwise.
  • What would happen if people started invoking their comprehensive perspectives by using religious reasons? Famously, Richard Rorty claimed that religious reasons are a conversation-stopper, because they are unintelligible to those who do not share one’s religious beliefs. So, if Rorty is correct, Habermas’s translation proposal will never work.
  • Even though religious reasons are second-order, having religious reasons and not using them is considered insincere. To actually understand the other person’s argument, you have to hear their religious reasons if they have them.
  • Interestingly, the secular respondents did not want religious people to give secular reasons. Their reasoning is: if this is how a religious person thinks, why shouldn’t they be able to talk that way?
  • Of course, many of the secular people added that they were not going to be convinced by the religious reasons, but they would want others to offer such reasons if they wanted to.
  • This is but a sampling of the normative insights that can be developed from the limited existing empirical data on the use of religious reasons in the public sphere. It would be helpful for normative theorists to identify the critical empirical questions that they have, and for empiricists to discuss with them what is actually possible to determine. Working together, the two groups could really shake up the debate about this critical social issue.
  • My concern is that reason-giving isn’t necessarily where the action is, or at least where all of it is. Aside from the “that’s-just-who-I-am” approach you detail in the post, I can think of some other possible routes from religion to public discourse that bypass reason-giving.
  • A prime example here is Christine O’Donnell’s justification for her anti-masturbation stance, which is prima facie idiotic: “…if he already knows what pleases him, and he can please himself, then why am I in the picture?” Leaving aside O’Donnell in specific, everybody of course already knows why a real, live sexual partner is in the picture!
  • The statement only makes any sense at all if uttered in a religious context, i.e., one in which there is an assumed religious commonality between the speaker and the audience. In this case, the commonality is the religious assumption that the purpose of sexuality is essentially religious. Thus this deserves to be understood as religious reason-giving even though there is no religious language in the reason!
  •  
    "This "religion in the public sphere" thread has featured debates about whether citizens of liberal democratic societies can offer religious reasons for public laws that will be coercive on all citizens, or whether they must use, in John Rawls's terms, "public reason."" By John H. Evans at the Immanent Frame on October 1, 2010.
anonymous

Thirty More Years of Hell - 1 views

  • A Pew poll from a few weeks back asked Americans how they felt about capitalism versus socialism. The results said all you need to know about how much longer we’re going to have to wade through this misery. You guessed it: until the Boomers finally croak.
  • For maybe the first time in modern history, we now have a generation that actually has warmer feelings about socialism than it does capitalism: 49% to 46%.
  • And a few days later, amid a multi-billion dollar war on public sector workers, another poll was released demonstrating that a whopping 69% of Millennials think teachers are underpaid (compared to 56% for Americans of all ages).
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  • I first heard the “s”-word from by my sixth grade history teacher—this was in the early days of Yeltsin. She said socialism is when you have to wait in line for hours just for a Happy Meal.
  • Read the fine print: it’s 5% of wages, income from “investments” is excluded. Tax the poor wage-slave, spare the wealthy rentier. Americans still can’t see the play even with Buffett rubbing his secretary’s tax return in our faces.
  • And it’s a servitude from which we can never escape. Forget bankruptcy. Default on a student loan and the government will garnish your wages until they get it all back, plus interest. They can even go after your social security money, off limits for all other debts.
  • Mike Konczal sees this as just another sign of a “submerged state”—the unholy fertilizer that keeps the American libertarian discourse in full bloom. None of the “welfare,” but all of the “state.”
  • “After the Great Society program in the 1960s,” says Leo Panitch, “left-wing Democrats, rather than calling for more public housing to rebuild America’s cities instead called for the banks to lend money to poor black communities…one of the effects of winning those demands was a channeling of those communities more deeply into the structures of finance, the most dynamic sector of neoliberal capitalism.”
  • While a liberal looks upon the New Deal and Great Society generation as a pantheon of benevolent patriarchs, I see a bunch of technocrats who slapped together a crude simulacrum of social democracy and called it “free-enterprise.”
  • Unlike the nations of Western Europe, American workers failed to get a good deal of the social democratic compact written into law, which means it was all the easier to dismantle over here.
  • There are the wars, of course—now pretty much the only way for a good many of us to get a debt-free education.
  • Then there’s the ever-popular Drug War, always trolling for some fresh blood. The Millennials are, after all, the least white generation in U.S. history, making us perfect fodder for the country’s ongoing race war.
  • As The Wire’s David Simon has pointed out, it was Clinton—the first Boomer president—that passed some of the most draconian “anti-crime” laws. Even business in the for-profit juvenile prisons sector is a-boomin’. Same goes for our expanding network of privatized immigration detention centers—a direct beneficiary of the Tea Party campaign for a brutal crackdown on “illegals.”
  • Much of the Patriot Act itself was comprised of legislation creeping around the halls of powers well before 9/11, much of it written with the burgeoning “anti-globalization” movement
  • The fact is that being arrested is pretty much a rite of passage today—or the end-of-the-line for your hopes and dreams if you happen to be a darker shade of pale.
  • Which is why I love the Tea Party so much. They don’t dick around about any of this. It’s a full-scale generational war they’re after.
  • The Ryan Budget—and the GOP campaign around it—divides the American populace into “those who are 55 or older now, and those who are younger.” Meaning Boomers will receive Medicare and Social Security checks unchanged, whereas Millennials get the axe—despite the fact that many of us have been paying into these programs for the past 15 years. Let the record show that it was they who fired the first shot.
  • All of the hippies who skulked off into the world of children’s programming to ride out the counterrevolution have cursed us with both our potential salvation (respect for the commons) and our ultimate weakness (pacifist nonsense).
  • But mostly our decency stems from the fact that we’ve all been muzzled and defanged by student debt, slave wages and mass unemployment. Unlike our parents, we’ll never even get the chance to gobble up our own children and leave them with the tab.
  • Which is why, psychologically, this Great Depression of ours can never hurt us like it hurts them. I see it all the time: the unemployed Boomer thinks himself a loser. He’s spent his life watching his peers accumulate wealth and power. Now he feels like the rug has been pulled from under him. Something has gone terribly wrong. When he files for food-stamps, he feels exactly what the Ruling Class wants him to feel: shame and personal failing.
  • Whereas a Millennial shrugs and swipes the SNAP card at the farmer’s market for a quart of fresh cider and a pomegranate muffin. Why should she feel guilty?
  • We Millennials have all the same ludicrous delusions of grandeur as our parents, but now, we’re ready to shuck capitalist gospel out the window. The Boomers call us spoiled, and ask us to do more with less, telling us to tamper our dreams. But the best thing we Americans have going for us is our entitlement, sans the free-market faith.
  • Way back in 1892, Friedrich Engels knew that success was the real curse of the USA. And that a powerful, anti-capitalist left could never take off in this country until the game stopped paying out: “Only when there is a generation of native-born workers that cannot expect anything from speculation any more will we have a solid foothold in America.” Sound familiar? That’s what Occupy is for most of us—a guttural roar that capitalism will not do.
  • The Boomers are right that it all smacks of entitlement. We are entitled. The world, and this country in particular, is awash in capital. With the billions floating in and out of this city every day, it’s amazing that you can walk around Manhattan and not end up with at least a grand worth of cash sifting around in your shoes like beach sand. The big lie is that the coffers are empty and budgets must be balanced. What a fucking joke. American workers have spent hundreds of years building this country and amassing this wealth, and it’s about time we claimed the vast majority of it.
  • Conservative apostate David Frum recently characterized the contemporary GOP’s platform as “a going-out-of-business sale for the Baby Boomer generation.” Which is pretty much the Democrats’ platform too. They just have better table manners.
  • Boomers know what they’ve wrought. Climate change? Don’t believe the polls. They know it’s happening. Yeah, if you confront one of them, he might put up a denialist front for a couple of minutes. But keep pelting him and it all crumbles, giving way to “well, it’s too late.” Translated: “I’ll be on, or near, my deathbed when the shit really hits the fan. You, youngster, will be hauling your family across the country George Romero style, scavenging for orphans to sell off as catamites to the warlord chieftains.”
  • Documentary filmmaker Adam Curtis has spent the past few years chronicling this ghastly mutation step-by-step—unraveling the seemingly incongruous strands and the hideous parentage of Boomer ideology. Their embrace of American libertarianism—with all of its absurdities, vulgarities and utopianism—was the final cry for help.
  •  
    "Generational analysis is bullshit. Or so I'm told. Fit for netroots liberals and horoscope clippers, maybe. And to be fair, it's mostly thinktank types who've been profiting off that whole Millennials Rising genre. One of the authors of that book is a former writing partner of Pete G. Peterson's, the octogenarian billionaire who has spent the last couple of decades trying to kick over the Social Security ladder before us young'ns can scamper up and collect. Most of it reads like a debriefing after a recon mission-you can feel them sizing us up, drawing up blueprints for the generational counterrevolution that we're living through right now."
anonymous

Eight Silly Data Things Marketing People Believe That Get Them Fired. - 1 views

  • It turns out that Marketers, especially Digital Marketers, make really silly mistakes when it comes to data. Big data. Small data. Any data.
  • two common themes
  • 1. Some absolutely did not use data to do their digital jobs.
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  • 2. Many used some data, but they unfortunately used silly data strategies/metrics.
  • Silly not in their eyes, silly in my eyes.
  • A silly metric, I better define it :), is one that distracts you for focusing on business investments that lead to bottom-line impact.
    • anonymous
       
      Within the context of my current project, the bottom-line impact would be increased engagement (in the form of donations, clinical study participation, and blood/fluid donation to scientific research).
  • Eight data things that marketing people believe that get them fired…. 1. Real-time data is life changing. 2. All you need to do is fix the bounce rate. 3. Number of Likes represents social awesomeness. 4. # 1 Search Results Ranking = SEO Success. 5. REDUCE MY CPC! REDUCE MY CPC NOW!! 6. Page views. Give me more page views, more and more and more! 7. Impressions. Go, get me some impressions stat! 8. Demographics and psychographics. That is all I need! Don't care for intent!
  • 1. Real-time data is life changing.
  • A lot of people get fired for this. Sadly not right away, because it takes time to realize how spectacular of a waste of money getting to real-time data was.
    • anonymous
       
      This is some REALLY FUNNY SHIT to me. But I'm a nerd.
  • I want you to say: "I don't want real-time data, I want right-time data. Let's understand the speed of decision making in our company. If we make real-time decisions, let's get real time data. If we make decisions over two days, let's go with that data cycle. If it take ten days to make a decision to change bids on our PPC campaigns, let's go with that data cycle." Right-time.
  • Real-time data is very expensive.
  • It is also very expensive from a decision-making perspective
  • even in the best case scenario of the proverbial pigs flying, they'll obsess about tactical things.
    • anonymous
       
      I get this completely. We get hung up on the tactical and lose sight of the strategic.
  • So shoot for right-time data.
  • That is a cheaper systems/platform/data strategy.
  • (And remember even the most idiotic system in the world now gives you data that is a couple hours old with zero extra investment from you. So when you say real time you are really saying "Nope, two hours is not enough for me!").
    • anonymous
       
      THIS is probably the best argument for our using Google Analytics and Google Search to collect data instead of paying large costs to firms that will offer questionable results.
  • That is also a way to get people to sync the data analysis (not data puking, sorry I meant data reporting) with the speed at which the company actually makes decisions (data > analyst > manager > director > VP > question back to manager > yells at the analyst > back to director> VP = 6 days).
  • The phrase "real-time data analysis" is an oxymoron.
  • 2. All you need to do is fix the bounce rate.
  • The difference between a KPI and a metric is that the former has a direct line of sight to your bottom-line, while the latter is helpful in diagnosing tactical challenges.
  • Bounce rate is really useful for finding things you suck at.
  • Along the way you also learn how not to stink. Bounce rate goes from 70% to a manageable 30%. Takes three months.
  • Stop obsessing about bounce rate.
  • From the time people land on your site it might take another 12 – 25 pages for them to buy or submit a lead. Focus on all that stuff. The tough stuff. Then you'll make money.
  • Focus on the actual game. Focus on incredible behavior metrics like Pages/Visit, focus on the Visitor Flow report, obsess about Checkout Abandonment Rate, make love to Average Order Size.
  • 3. Number of Likes represents social awesomeness.
  • it does not take a very long time for your Senior Management to figure out how lame the Likes metric is and that it drives 1. Zero value on Facebook and 2. Zero squared economic value or cost savings to the business.
  • many spectacular reasons
  • Here's one… We are looking at two consumer product brands, the tiny company Innocent Drinks and the Goliath called Tide Detergent.
  • Even with 10x the number of Likes on Facebook the giant called Tide has 4x fewer people talking about their brand when compared to the David called Innocent.
  • As no less than three comments mention below, Innocent is 90% owned by Coca Cola. Fooled me!
  • In a massively large company they've carved out an identity uniquely their own. They refuse to be corrupted by Coca Cola's own Facebook strategy of constant self-pimping and product ads masquerading as "updates." As a result pound for pound Innocent's fan engagement on its page is multiple time better than Coca Cola's - even if the latter has many more likes.
  • 4. # 1 Search Results Ranking = SEO Success.
  • Not going to happen.
  • as all decent SEOs will tell you, is that search results are no longer standardized. Rather they are personalized. I might even say, hyper-personalized. Regardless of if you are logged in or not.
  • When I search for "avinash" on Google I might rank #1 in the search results because I'm logged into my Google account, the engine has my search history, my computer IP address, it also has searches by others in my vicinity, local stories right now, and so many other signals. But when you search for "avinash" your first search result might be a unicorn. Because the search engine has determined that the perfect search result for you for the keyword avinash is a unicorn.
    • anonymous
       
      This is crucial to understand. I will be sharing this, at length, with my boss. :)
  • Universal search for example means that personalized results will not only look for information from web pages, they also look for YouTube/Vimoe videos, social listings, images of course, and so on and so forth.
  • Then let's not forget that proportionaly there are very few head searches, your long tail searches will be huge.
  • Oh and remember that no one types a word or two, people use long phrases.
  • There are a ton more reasons obsessing about the rank of a handful of words on the search engine results page (SERP) is a very poor decision.
  • So check your keyword ranking if it pleases you.
  • But don't make it your KPI.
  • For purely SEO, you can use Crawl Rate/Depth, Inbound Links (just good ones) and growth (or lack there of) in your target key phrases as decent starting points.
  • You can graduate to looking at search traffic by site content or types of content you have (it's a great signal your SEO is working).
  • Measuring Visits and Conversions in aggregate first and segmented by keywords (or even key word clusters) will get you on the path to showing real impact.
  • That gives you short term acquisition quality, you can then move to long term quality by focusing on metrics like lifetime value.
  • 5. REDUCE MY CPC! REDUCE MY CPC NOW!!
  • You should judge the success of that showing up by measure if you made money! Did you earn any profit?
  • Friends don't let friends use CPC as a KPI. Unless said friends want the friend fired.
  • 6. Page views. Give me more page views, more and more and more!
  • Content consumption is a horrible metric. It incentivises sub optimal behavior in your employees/agencies.
  • If you are a news site, you can get millions of page views
  • And it will probably get you transient traffic.
  • And what about business impact from all these one night stands ?
  • If you are in the content only business (say my beloved New York Times) a better metric to focus on is Visitor Loyalty
  • If your are in the lead generation business and do the "OMG let's publish a infographic on dancing monkey tricks which will get us a billion page views, even though we have nothing to do with dancing or monkeys or tricks" thing, measure success on the number of leads received and not how "viral" the infographic went and how many reshares it got on Twitter.
    • anonymous
       
      In other words, use that odd-one-off to redirect attention to the source of that one-off. I'll have to ponder that given our different KPI needs (nonprofit, we don't sell anything).
  • Don't obsess about page views.
  • Then measure the metric closest to that. Hopefully some ideas above will help get you promoted.
  • 7. Impressions. Go, get me some impressions stat!
  • My hypothesis is that TV/Radio/Magazines have created this bad habit. We can measure so little, almost next to nothing, that we've brought our immensely shaky GRP metric from TV to digital. Here it's called impressions. Don't buy impressions.
  • Buy engagement. Define what it means first of course .
  • If you are willing to go to clicks, do one better and measure Visits. At least they showed up on your mobile/desktop site.
  • Now if you are a newbie, measure bounce rate. If you have a tiny amount of experience measure Visit Duration. If you are a pro, measure Revenue. If you are an Analysis Ninja, measure Profit.
  • Impressions suck. Profit rocks.
  • If the simple A/B (test/control) experiment demonstrates that delivering display banner ad impressions to the test group delivers increased revenue, buy impressions to your heart's content. I'll only recommend that you repeat the experiment once a quarter.
  • You can buy impressions if you can prove via a simple controlled experiment that when we show impressions we got more engagement/sales and when we don't show impressions we did not get more engagement/sales.
  • But if you won't do the experiment and you use the # of impressions as a measure of success
  • 8. Demographics and psychographics. That is all I need! Don't care for intent!
  • This is not a metric, this is more of a what data you'll use to target your advertising issue.
  • Our primary method of buying advertising and marketing is: "I would like to reach 90 year old grandmas that love knitting, what tv channel should I advertise on." Or they might say: "I would like to reach 18 to 24 year olds with college education who supported Barack Obama for president." And example of demographic and psychographic segments.
  • We use that on very thin ice data, we bought advertising. That was our lot in life.
  • Did you know 50% of of TV viewership is on networks that each have <1% share? Per industry.bnet.com. I dare you to imagine how difficult it is to measure who they are, and how to target them to pimp your shampoo, car, cement.
  • Intent beats demographics and psychographics. Always.
  • if you have advertising money to spend, first spend it all on advertising that provides you intent data.
  • Search has a ton of strong intent. It does not matter if you are a grandma or a 18 year old. If you are on Baidu and you search for the HTC One, you are expressing strong intent. Second, content consumption has intent built in. If I'm reading lots of articles about how to get pregnant, you could show me an ad related to that
  • The first intent is strong, the second one is weaker.
  • There is a lot of intent data on the web. That is our key strength.
  •  
    This is a really great read by Avinash Kaushik at Occam's Razor. Volunmuous highlights follow.
anonymous

We Are All Hayekians Now: The Internet Generation and Knowledge Problems - 1 views

  • Primarily in his The Use of Knowledge in Society but also in his other contributions to the socialist calculation debate, Hayek crafted a brilliant statement of a perennial problem.
  • In the world of human endeavor, we have two types of problems: economic and technological.
  • Technological problems involve effectively allocating given resources to accomplish a single valuable goal.
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  • The choice to build the bridge is a choice between this bridge or that skyscraper as well as any other alternative use of those resources. Each alternative use would have different benefits (and unseen costs).
  • This is not a mere question of engineering the strongest or even the most cost-effective structure to get across the Hudson, this is a question of what is the strongest or most cost-effective possible future version of New York City.
  • “We are building the world’s 20th search engine at a time when most of the others have been abandoned as being commoditized money losers. We’ll strip out all of the ad-supported news and portal features so you won’t be distracted from using the free search stuff.”
  • But, of course, Google survived, prospered, and continues towards its apparent goal of eating the entire internet (while also making cars drive themselves, putting cameras on everyone’s heads, and generally making Steve Ballmer very very angry). So, why did Google win? The answer is, perhaps surprisingly, in Hayek’s theory.
    • anonymous
       
      Very embarassing videos.
  • “Our goal always has been to index all the world’s data.” Talk about anemic goals, come on Google, show some ambition!
  • So, is this one of Hayek’s technical problems or is this an economic one?
  • Our gut might first tell us that it is technical.
  • Sure, all this data is now hanging out in one place for free, but to make a useful index you need to determine how much people value different data. We need data about the data.
  • In Soviet Russia, failed attempts at arranging resources destroyed the information about the resources. The free market is the best way to figure out how individual people value individual resources. When left to trade voluntarily, people reveal their preferences with their willingness to pay. By arranging resources through coercion you’ve blinded yourself to the emergent value of the resources because you’ve forbidden voluntary arrangement in the economy.
  • This is different on the internet.
  • The data resources are not rivalrous
  • Search used to be really bad. Why? Because search companies were using either (a) content-producer willingness to pay for indexing, (b) mere keyword search or (c) some combination of editorial centralized decision-making to organize lists of sites.
  • These methods only work if you think that the best site about ducks is either (a) the site that has the most money to pay Altavista for prime “duck” listing, (b) the site that has the most “ducks” in its text, or (c) the site that was most appealing to your employees tasked with finding duck sites.
  • If 999 other websites linked to one website about ducks, you can bet that most people think that this site is better at explaining ducks than a site with only one link to it (even if that link was horse-sized).
  • So Google uses the decentralized Hayekian knowledge of the masses to function. Why does this mean we’re all Hayekians?
  • All of the questions of organizing activity on the internet are solved (when they are, in fact, solved successfully) using Hayekian decentralized knowledge.
  • Amazon customer reviews are how we find good products. Ebay feedback is how we find good individual sellers. And, moreover, whole brick and mortar services are moving to a crowd-sourced model, with sites like AirBnB for lodging and RelayRides for car rental.
  • the giant firms of tomorrow will be those that empower people to freely share their knowledge and resources in a vibrant marketplace.
  • Today, the central challenge for a firm is not to develop careful internal management but rather the non-trivial task of building marketplaces and forums to encourage decentralized knowledge production and cooperation.
  • Our generation already understands this on a gut level. We Google everything.  We defend freedom on the internet as if it was our own personal real-world liberty at stake. We mock the antiquated central planners of the early web, looking at you AOL, Prodigy, for their ineffectual obviousness and denial of crowd-sourced knowledge.
  • We all know where the best economic knowledge lies, in the many and never the few.
  •  
    "We are all Hayekians now. Specifically, the "we all" is not quite everyone. The "all" to which I'm referring is people of the internet-people who've grown up with the net and use it for a majority of their day-to-day activities. And, the "Hayekian" to which I'm referring is not his theories on capital, or the rule of law, but, specifically his vision of knowledge."
anonymous

Looking Closer » Blog Archive » Give us somebody we can blast into pieces! - 0 views

  • We’re seeing more and more movies that suggest that the world is in crisis, and that our methods for saving it are failing. We’re looking for hope in all the old familiar places, and those stories are starting to seem unsatisfying.
  •  
    "We're seeing more and more movies that suggest that the world is in crisis, and that our methods for saving it are failing. We're looking for hope in all the old familiar places, and those stories are starting to seem unsatisfying. It used to be that we could find catharsis by demonizing another culture and making them the enemy. But globalization, technology, and an increasingly multicultural America have brought us into closer relationship with people who are different from us. It's harder for American storytellers to make scapegoats out of people who are different than us. We used to cast Russians and Japanese and Iraqis as "the Enemy." Now, we're more careful. We've learned that it's dangerous and foolish to portray another culture as thoroughly corrupt. And we're coming to see that Americans can be as corrupt as the worst of them."
anonymous

How the internet is making us poor - Quartz - 2 views

  • Sixty percent of the jobs in the US are information-processing jobs, notes Erik Brynjolfsson, co-author of a recent book about this disruption, Race Against the Machine. It’s safe to assume that almost all of these jobs are aided by machines that perform routine tasks. These machines make some workers more productive. They make others less essential.
  • The turn of the new millennium is when the automation of middle-class information processing tasks really got under way, according to an analysis by the Associated Press based on data from the Bureau of Labor Statistics. Between 2000 and 2010, the jobs of 1.1 million secretaries were eliminated, replaced by internet services that made everything from maintaining a calendar to planning trips easier than ever.
  • Economist Andrew McAfee, Brynjolfsson’s co-author, has called these displaced people “routine cognitive workers.” Technology, he says, is now smart enough to automate their often repetitive, programmatic tasks. ”We are in a desperate, serious competition with these machines,” concurs Larry Kotlikoff, a professor of economics at Boston University. “It seems like the machines are taking over all possible jobs.”
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  • 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.
  • For many years, the question of whether or not spending on information technology (IT) made companies more productive was highly controversial. Many studies found that IT spending either had no effect on productivity or was even counter-productive. But now a clear trend is emerging. More recent studies show that IT—and the organizational changes that go with it—are doing firms, especially multinationals (pdf), a great deal of good.
  • Winner-take-all and the power of capital to exacerbate inequality
  • 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.
  • But it can also exacerbate income inequality, says Brynjolfsson. This contributes to a phenomenon called “skill-biased technological [or technical] change.” “The idea is that technology in the past 30 years has tended to favor more skilled and educated workers versus less educated workers,” says Brynjolfsson. “It has been a complement for more skilled workers. It makes their labor more valuable. But for less skilled workers, it makes them less necessary—especially those who do routine, repetitive tasks.”
  • “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.
  • As Paul Krugman wrote, “This is an old concern in economics; it’s “capital-biased technological change”, which tends to shift the distribution of income away from workers to the owners of 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.
  • “The spread of computers and the Internet will put jobs in two categories,” said Andreessen. “People who tell computers what to do, and people who are told by computers what to do.” It’s a glib remark—but increasingly true.
  • 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.
  • This time it’s fasterHistory is littered with technological transitions. Many of them seemed at the time to threaten mass unemployment of one type of worker or another, whether it was buggy whip makers or, more recently, travel agents. But here’s what’s different about information-processing jobs: The takeover by technology is happening much faster.
  • 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.
  • Brynjolfsson thinks he knows why: More and more people were doing work aided by software. And during the great recession, employment growth didn’t just slow. As we saw above, in both manufacturing and information processing, the economy shed jobs, even as employment in the service sector and professional fields remained flat.
  • 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.
  • There are many reasons why the economy has reversed this “compression,” transforming into an “hourglass economy” with many fewer workers in the middle class and more at either the high or the low end of the income spectrum.
  • The hourglass represents an income distribution that has been more nearly the norm for most of the history of the US. That it’s coming back should worry anyone who believes that a healthy middle class is an inevitable outcome of economic progress, a mainstay of democracy and a healthy society, or a driver of further economic development.
    • anonymous
       
      This is the meaty center. It's what I worry about. The "Middle Class" may just be an anomaly.
  • 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.
  • But that’s only as long as you’re one of the ones telling machines what to do, not being told by them. And that will require self-teaching, creativity, entrepreneurialism and other traits that may or may not be latent in children, as well as retraining adults who aspire to middle class living. For now, sadly, your safest bet is to be a technologist and/or own capital, and use all this automation to grab a bigger-than-ever share of a pie that continues to expand.
  •  
    "Everyone knows the story of how robots replaced humans on the factory floor. But in the broader sweep of automation versus labor, a trend with far greater significance for the middle class-in rich countries, at any rate-has been relatively overlooked: the replacement of knowledge workers with software. One reason for the neglect is that this trend is at most thirty years old, and has become apparent in economic data only in perhaps the past ten years. The first all-in-one commercial microprocessor went on sale in 1971, and like all inventions, it took decades for it to become an ecosystem of technologies pervasive and powerful enough to have a measurable impact on the way we work."
anonymous

How Bayes' Rule Can Make You A Better Thinker - 1 views

  • To find out more about this topic, we spoke to mathematician Spencer Greenberg, co-founder of Rebellion Research and a contributing member of AskAMathematician where he answers questions on math and physics. He has also created a free Bayesian thinking module that's available online.
  • Bayes’s Rule is a theorem in probability theory that answers the question, "When you encounter new information, how much should it change your confidence in a belief?" It’s essentially about making decisions under uncertainty, and how we should update or revise our theories as new evidence emerges. It can also be used to help us reach decisions in those circumstances when very few observations or pieces of evidence are available. And it can also be used to help us avoid common mistakes and fallacies in our thinking.
  • The key to Bayesianism is in understanding the power of probabilistic reasoning. But unlike games of chance, in which there’s no ambiguity and everyone agrees on what’s going on (like the roll of die), Bayesians use probability to express their degree of belief about something.
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  • When it comes to the confidence we have in our beliefs — what can be expressed in terms of probability — we can’t just make up any number we want. There’s only one consistent way to handle those degrees in beliefs.
  • In the strictest sense, of course, this requires a bit of mathematical knowledge. But Greenberg says there’s still an easy way to use this principle in daily life — and one that can be converted to plain English.
  • Greenberg says it’s the question of evidence which he should apply, which goes like this:: Assuming that our hypothesis is true, how much more plausible, or likely, is the evidence compared to the hypothesis if it was not true?
  • “It’s important to note that the idea here is not to answer the question in a precise way — like saying that it’s 3.2 times more likely — rather, it’s to get a rough sense. Is it a high number, a modest number, or a small number?”
  • To make Bayes practical, we have to start with the belief of how likely something is. Then we need to ask the question of evidence, and whether or not we should increase the confidence in our beliefs by a lot, a little, and so on.
  • “Much of the time people will automatically try to shoot down evidence, but you can get evidence for things that are not true. Just because you have evidence doesn’t mean you should change your mind. But it does mean that you should change your degree of belief.”
  • Greenberg also describes Representativeness Heuristic in which people tend to look at how similar things are.
  • Greenberg also says that we should shy away from phrases like, “I believe,” or “I don’t believe.” “That’s the wrong way to frame it,” he says. “We should think about things in terms of how probable they are. You almost never have anything close to perfect certainty.”
  • “Let’s say you believe that your nutrition supplement works,” he told us, “Then you get a small amount of evidence against it working, and you completely write that evidence off because you say, ‘well, I still believe it works because it’s just a small amount of evidence.’ But then you get more evidence that it doesn’t work. If you were an ideal reasoner, you’d see that accumulation of evidence, and every time you get that evidence, you should believe less and less that the nutritional supplements are actually working.” Eventually, says Greenberg, you end up tipping things so that you no longer believe. But instead, we end up never changing our mind.
  • “You should never say that you have absolute certainty, because it closes the door to being able to revise your certainty in light of new information,” Greenberg told io9. “And the same thing can be said for having zero percent certainty about something happening. If you’re at 100% certainty, then the correct way of updating is to stay at 100% forever, and no amount of evidence can tip you.”
  • Lastly, he also says that probabilities can depend on the observer — what is a kind of probability relativity. We all have access to different information, so different people should assign different rates of probability to different things based on different sets of evidence.
  •  
    "Having a strong opinion about an issue can make it hard to take in new information about it, or to consider other options when they're presented. Thankfully, there's an old rule that can help us avoid this problem - and even help us make good decisions when we're uncertain. Here's how Bayesian Reasoning works, and why it can make you a better thinker."
anonymous

Hellfire, Morality and Strategy - 2 views

  • On one side of this dispute are those who regard them simply as another weapon of war whose virtue is the precision with which they strike targets.
  • On the other side are those who argue that in general, unmanned aerial vehicles are used to kill specific individuals, frequently civilians, thus denying the targeted individuals their basic right to some form of legal due process.
  • Let's begin with the weapons systems, the MQ-1 Predator and the MQ-9 Reaper. The media call them drones, but they are actually remotely piloted aircraft. Rather than being in the cockpit, the pilot is at a ground station, receiving flight data and visual images from the aircraft and sending command signals back to it via a satellite data link.
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  • Most airstrikes from these aircraft use Hellfire missiles, which cause less collateral damage.
  • Unlike a manned aircraft, unmanned aerial vehicles can remain in the air for an extended period of time -- an important capability for engaging targets that may only present a very narrow target window. This ability to loiter, and then strike quickly when a target presents itself, is what has made these weapons systems preferable to fixed wing aircraft and cruise missiles.
  • The Argument Against Airstrikes
  • The modern battlefield -- and the ancient as well -- has been marked by anonymity. The enemy was not a distinct individual but an army, and the killing of soldiers in an enemy army did not carry with it any sense of personal culpability. In general, no individual soldier was selected for special attention, and his death was not an act of punishment. He was killed because of his membership in an army and not because of any specific action he might have carried out.
  • This distinguishes unmanned aerial vehicles from most weapons that have been used since the age of explosives began.
  • There are those who object to all war and all killing; we are not addressing those issues here. We are addressing the arguments of those who object to this particular sort of killing. The reasoning is that when you are targeting a particular individual based on his relationships, you are introducing the idea of culpability, and that that culpability makes the decision-maker -- whoever he is -- both judge and executioner, without due process.
  • Again excluding absolute pacifists from this discussion, the objection is that the use of unmanned aerial vehicles is not so much an act of war as an act of judgment and, as such, violates international law that requires due process for a soldier being judged and executed. To put it simply, the critics regard what they call drone strikes as summary executions, not acts of war.
  • The Argument for Airstrikes
  • The counterargument is that the United States is engaged in a unique sort of war.
  • The primary unit is the individual, and the individuals -- particularly the commanders -- isolate themselves and make themselves as difficult to find as possible. Given their political intentions and resources, sparse forces dispersed without regard to national boundaries use their isolation as the equivalent of technological stealth to make them survivable and able to carefully mount military operations against the enemy at unpredictable times and in unpredictable ways.
  • The argument for using strikes from unmanned aerial vehicles is that it is not an attack on an individual any more than an artillery barrage that kills a hundred is an attack on each individual. Rather, the jihadist movement presents a unique case in which the individual jihadist is the military unit.
  • The argument in favor of using unmanned aerial vehicle strikes is, therefore, that the act of killing the individual is a military necessity dictated by the enemy's strategy and that it is carried out with the understanding that both intelligence and precision might fail, no matter how much care is taken.
  • It would seem to me that these strikes do not violate the rules of war and that they require no more legal overview than was given in thousands of bomber raids in World War II.
  • Ignoring the question of whether jihadist operations are in accordance with the rules and customs of war, their failure to carry a "fixed distinctive sign recognizable at a distance" is a violation of both the Hague and Geneva conventions. This means that considerations given to soldiers under the rules of war do not apply to those waging war without insignia.
  • Open insignia is fundamental to the rules of war. It was instituted after the Franco-Prussian war, when French snipers dressed as civilians fired on Germans. It was viewed that the snipers had endangered civilians because it was a soldier's right to defend himself and that since they were dressed as civilians, the French snipers -- not the Germans -- were responsible for the civilian deaths.
  • the onus on ascertaining the nature of the target rests with the United States, but if there is error, the responsibility for that error rests with jihadists for not distinguishing themselves from civilians.
  • There is of course a greater complexity to this: attacking targets in countries that are not in a state of war with the United States and that have not consented to these attacks. For better or worse, the declaration of war has not been in fashion since World War II. But the jihadist movement has complicated this problem substantially.
  • In a method of war where the individual is the prime unit and where lack of identification is a primary defensive method, the conduct of intelligence operations wherever the enemy might be, regardless of borders, follows. So do operations to destroy enemy units -- individuals. If a country harbors such individuals knowingly, it is an enemy. If it is incapable of destroying the enemy units, it forfeits its right to claim sovereignty since part of sovereignty is a responsibility to prevent attacks on other countries.
  • If we simply follow the logic we laid out here, then the critics of unmanned aerial vehicle strikes have a weak case. It is not illegitimate to target individuals in a military force like the jihadist movement, and international law holds them responsible for collateral damage, not the United States.
  • since al Qaeda tried in the past to operate in the United States itself, and its operatives might be in the United States, it logically follows that the United States could use unmanned aerial vehicles domestically as well. Citizenship is likewise no protection from attacks against a force hostile to the United States.
  • There are two points I have been driving toward.
  • The first is that the outrage at targeted killing is not, in my view, justified on moral or legal grounds.
  • The second is that in using these techniques, the United States is on a slippery slope because of the basis on which it has chosen to wage war.
  • The enemy strategy is to draw the United States into an extended conflict that validates its narrative that the United States is permanently at war with Islam. It wants to force the United States to engage in as many countries as possible. From the U.S. point of view, unmanned aerial vehicles are the perfect weapon because they can attack the jihadist command structure without risk to ground forces. From the jihadist point of view as well, unmanned aerial vehicles are the perfect weapon because their efficiency allows the jihadists to lure the United States into other countries and, with sufficient manipulation, can increase the number of innocents who are killed.
  • In this sort of war, the problem of killing innocents is practical. It undermines the strategic effort. The argument that it is illegal is dubious, and to my mind, so is the argument that it is immoral. The argument that it is ineffective in achieving U.S. strategic goals of eliminating the threat of terrorist actions by jihadists is my point.
  • The broader the engagement, the greater the perception of U.S. hostility to Islam, the easier the recruitment until the jihadist forces reach a size that can't be dealt with by isolated airstrikes.
  • In warfare, enemies will try to get you to strike at what they least mind losing. The case against strikes by unmanned aerial vehicles is not that they are ineffective against specific targets but that the targets are not as vital as the United States thinks. The United States believes that the destruction of the leadership is the most efficient way to destroy the threat of the jihadist movement. In fact it only mitigates the threat while new leadership emerges. The strength of the jihadist movement is that it is global, sparse and dispersed. It does not provide a target whose destruction weakens the movement. However, the jihadist movement's weakness derives from its strength: It is limited in what it can do and where.     
  • In the long run, it is not clear that the cost is so little. A military strategy to defeat the jihadists is impossible. At its root, the real struggle against the jihadists is ideological, and that struggle simply cannot be won with Hellfire missiles.
  •  
    "Airstrikes by unmanned aerial vehicles have become a matter of serious dispute lately. The controversy focuses on the United States, which has the biggest fleet of these weapons and which employs them more frequently than any other country. On one side of this dispute are those who regard them simply as another weapon of war whose virtue is the precision with which they strike targets. On the other side are those who argue that in general, unmanned aerial vehicles are used to kill specific individuals, frequently civilians, thus denying the targeted individuals their basic right to some form of legal due process."
  •  
    I'm starting to come around to the objections of expeditionary troops trying to put down the American colonial revolt. There's something to having to look someone in the face when you kill them.
anonymous

War and Bluff: Iran, Israel and the United States - 0 views

  • The Israeli and American positions are intimately connected, but the precise nature of the connection is less clear. Israel publicly casts itself as eager to strike Iran but restrained by the United States, though unable to guarantee it will respect American wishes if Israel sees an existential threat emanating from Iran. The United States publicly decries Iran as a threat to Israel and to other countries in the region, particularly Saudi Arabia, but expresses reservations about military action out of fears that Iran would respond to a strike by destabilizing the region and because it does not believe the Iranian nuclear program is as advanced as the Israelis say it is.
  • The Israelis have less tolerance for risk than the Americans, who have less tolerance for the global consequences of an attack.
  • From the Iranian point of view, a nuclear program has been extremely valuable. Having one has brought Iran prestige in the Islamic world and has given it a level of useful global political credibility.
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  • Having countries like Russia and China unwilling to see Iran crushed has helped. Iran can survive sanctions.
  • A failed military action would benefit Iran, proving its power. By contrast, a successful attack that dramatically delayed or destroyed Iran's nuclear capability would be a serious reversal.
  • Although the United States hailed Stuxnet as a major success, it hardly stopped the Iranian program, if the Israelis are to be believed. In that sense, it was a failure.
  • The principle of mutual assured destruction, which stabilized the U.S.-Soviet balance in the Cold War, would govern Iran's use of nuclear weapons. If Iran struck Israel, the damage would be massive, forcing the Iranians to assume that the Israelis and their allies (specifically, the United States) would launch a massive counterattack on Iran, annihilating large parts of Iran's population.
  • It is here that we get to the heart of the issue. While from a rational perspective the Iranians would be fools to launch such an attack, the Israeli position is that the Iranians are not rational actors and that their religious fanaticism makes any attempt to predict their actions pointless. Thus, the Iranians might well accept the annihilation of their country in order to destroy Israel in a sort of megasuicide bombing. The Israelis point to the Iranians' rhetoric as evidence of their fanaticism. Yet, as we know, political rhetoric is not always politically predictive. In addition, rhetoric aside, Iran has pursued a cautious foreign policy, pursuing its ends with covert rather than overt means. It has rarely taken reckless action, engaging instead in reckless rhetoric.
  • Herein lies the root of the great Israeli debate that pits the Netanyahu government, which appears to regard Iran as irrational, against significant segments of the Israeli military and intelligence communities, which regard Iran as rational.
  • Assuming the Iranians are rational actors, their optimal strategy lies not in acquiring nuclear weapons and certainly not in using them, but instead in having a credible weapons development program that permits them to be seen as significant international actors.
  • Up to this point, the Iranians have not even fielded a device for testing, let alone a deliverable weapon.
  • For all their activity, either their technical limitations or a political decision has kept them from actually crossing the obvious redlines and left Israel trying to define some developmental redline.
  • Both want to appear more fearsome than either is actually willing to act.
  • The Iranian strategy has been to maintain ambiguity on the status of its program, while making it appear that the program is capable of sudden success -- without ever achieving that success. The Israeli strategy has been to appear constantly on the verge of attack without ever attacking and to use the United States as its reason for withholding attacks, along with the studied ambiguity of the Iranian program.
  • If a country can develop nuclear weapons, there is no reason it can't develop hardened and dispersed sites and create enough ambiguity to deprive Israeli and U.S. intelligence of confidence in their ability to determine what is where.
  • I am reminded of the raid on Son Tay during the Vietnam War. The United States mounted an effort to rescue U.S. prisoners of war in North Vietnam only to discover that its intelligence on where the POWs were located was completely wrong. Any politician deciding whether to attack Iran would have Son Tay and a hundred other intelligence failures chasing around their brains, especially since a failed attack on Iran would be far worse than no attack.
  • Dispersed sites reduce Israel's ability to strike hard at a target and to acquire a battle damage assessment that would tell Israel three things:
  • first, whether the target had been destroyed when it was buried under rock and concrete; second, whether the target contained what Israel thought it contained; and third, whether the strike had missed a backup site that replicated the one it destroyed.
  • if the Israelis had an ultrasecret miracle weapon, postponing its use might compromise its secrecy. I suspect that if they had such a weapon, they would have used it by now.
  • The Americans emphasize these points, but they are happy to use the Israeli threats to build pressure on the Iranians. The United States wants to undermine Iranian credibility in the region by making Iran seem vulnerable. The twin forces of Israeli rhetoric and sanctions help make Iran look embattled. The reversal in Syria enhances this sense. Naval maneuvers in the Strait of Hormuz add to the sense that the United States is prepared to neutralize Iranian counters to an Israeli airstrike, making the threat Israel poses and the weakness of Iran appear larger.
  • When we step back and view the picture as a whole, we see Iran using its nuclear program for political reasons but being meticulous not to make itself appear unambiguously close to success.
  • We see the Israelis talking as if they were threatened but acting as if they were in no rush to address the supposed threat.
  • And we see the Americans acting as if they are restraining Israel, paradoxically appearing to be Iran's protector even though they are using the Israeli threat to increase Iranian insecurity.
  • It is the U.S.-Israeli byplay that is most fascinating. On the surface, Israel is driving U.S. policy. On closer examination, the reverse is true. Israel has bluffed an attack for years and never acted. Perhaps now it will act, but the risks of failure are substantial. If Israel really wants to act, this is not obvious.
  • Speeches by politicians do not constitute clear guidelines.
    • anonymous
       
      No kidding.
  • Rather than seeing Netanyahu as trying to force the United States into an attack, it is more useful to see Netanyahu's rhetoric as valuable to U.S. strategy. Israel and the United States remain geopolitically aligned. Israel's bellicosity is not meant to signal an imminent attack, but to support the U.S. agenda of isolating and maintaining pressure on Iran. That would indicate more speeches from Netanyahu and greater fear of war. But speeches and emotions aside, intensifying psychological pressure on Iran is more likely than war.
  •  
    "For the past several months, the Israelis have been threatening to attack Iranian nuclear sites as the United States has pursued a complex policy of avoiding complete opposition to such strikes while making clear it doesn't feel such strikes are necessary. At the same time, the United States has carried out maneuvers meant to demonstrate its ability to prevent the Iranian counter to an attack -- namely blocking the Strait of Hormuz. While these maneuvers were under way, U.S. Secretary of State Hillary Clinton said no "redline" exists that once crossed by Iran would compel an attack on Iran's nuclear facilities. The Israeli government has long contended that Tehran eventually will reach the point where it will be too costly for outsiders to stop the Iranian nuclear program."
anonymous

USENIX 2011 Keynote: Network Security in the Medium Term, 2061-2561 AD - 1 views

  • if we should meet up in 2061, much less in the 26th century, you’re welcome to rib me about this talk. Because I’ll be happy to still be alive to rib.
  • The question I’m going to spin entertaining lies around is this: what is network security going to be about once we get past the current sigmoid curve of accelerating progress and into a steady state, when Moore’s first law is long since burned out, and networked computing appliances have been around for as long as steam engines?
  • a few basic assumptions about the future
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  • it’s not immediately obvious that I can say anything useful about a civilization run by beings vastly more intelligent than us. I’d be like an australopithecine trying to visualize daytime cable TV.
  • The idea of an AI singularity
  • the whole idea of artificial general intelligence strikes me as being as questionable as 19th century fantasies about steam-powered tin men.
  • if you start trying to visualize a coherent future that includes aliens, telepathy, faster than light travel, or time machines, your futurology is going to rapidly run off the road and go crashing around in the blank bits of the map that say HERE BE DRAGONS.
  • at least one barkingly implausible innovation will come along between now and 2061 and turn everything we do upside down
  • My crystal ball is currently predicting that base load electricity will come from a mix of advanced nuclear fission reactor designs and predictable renewables such as tidal and hydroelectric power.
  • We are, I think, going to have molecular nanotechnology and atomic scale integrated circuitry.
  • engineered solutions that work a bit like biological systems
  • Mature nanotechnology is going to resemble organic life forms the way a Boeing 737 resembles thirty tons of seagull biomass.
  • without a technological civilization questions of network security take second place to where to get a new flint arrowhead.
  • if we’re still alive in the 26th century you’re welcome to remind me of what I got wrong in this talk.
  • we’re living through the early days of a revolution in genomics and biology
  • We haven’t yet managed to raise the upper limit on human life expectancy (it’s currently around 120 years), but an increasing number of us are going to get close to it.
  • it’s quite likely that within another century the mechanisms underlying cellular senescence will be understood and treatable like other inborn errors of metabolism
  • another prediction: something outwardly resembling democracy everywhere.
  • Since 1911, democractic government by a republic has gone from being an eccentric minority practice to the default system of government world-wide
  • Democracy is a lousy form of government in some respects – it is particularly bad at long-term planning, for no event that lies beyond the electoral event horizon can compel a politician to pay attention to it
  • but it has two gigantic benefits: it handles transfers of power peacefully, and provides a pressure relief valve for internal social dissent.
  • there are problems
  • . In general, democratically elected politicians are forced to focus on short-term solutions to long-term problems because their performance is evaluated by elections held on a time scale of single-digit years
  • Democratic systems are prone to capture by special interest groups that exploit the information asymmetry that’s endemic in complex societies
  • The adversarial two-party model is a very bad tool for generating consensus on how to tackle difficult problems with no precedents
  • Finally, representative democracy scales up badly
  • Nor are governments as important as they used to be.
  • the US government, the largest superpower on the block right now, is tightly constrained by the international trade system it promoted in the wake of the second world war.
  • we have democratic forms of government, without the transparency and accountability.
  • At least, until we invent something better – which I expect will become an urgent priority before the end of the century.
  • The good news is, we’re a lot richer than our ancestors. Relative decline is not tragic in a positive-sum world.
  • Assuming that they survive the obstacles on the road to development, this process is going to end fairly predictably: both India and China will eventually converge with a developed world standard of living, while undergoing the demographic transition to stable or slowly declining populations that appears to be an inevitable correlate of development.
  • a quiet economic revolution is sweeping Africa
  • In 2006, for the first time, more than half of the planet’s human population lived in cities. And by 2061 I expect more than half of the planet’s human population will live in conditions that correspond to the middle class citizens of developed nations.
  • by 2061 we or our children are going to be living on an urban middle-class planet, with a globalized economic and financial infrastructure recognizably descended from today’s system, and governments that at least try to pay lip service to democratic norms.
  • And let me say, before I do, that the picture I just painted – of the world circa 2061, which is to say of the starting point from which the world of 2561 will evolve – is bunk.
  • It’s a normative projection
  • I’m pretty certain that something utterly unexpected will come along and up-end all these projections – something as weird as the world wide web would have looked in 1961.
  • And while the outer forms of that comfortable, middle-class urban developed-world planetary experience might look familiar to us, the internal architecture will be unbelievably different.
  • Let’s imagine that, circa 1961 – just fifty years ago – a budding Nikolai Tesla or Bill Packard somewhere in big-city USA is tinkering in his garage and succeeds in building a time machine. Being adventurous – but not too adventurous – he sets the controls for fifty years in the future, and arrives in downtown San Francisco. What will he see, and how will he interpret it?
  • a lot of the buildings are going to be familiar
  • Automobiles are automobiles, even if the ones he sees look kind of melted
  • Fashion? Hats are out, clothing has mutated in strange directions
  • He may be thrown by the number of pedestrians walking around with wires in their ears, or holding these cigarette-pack-sized boxes with glowing screens.
  • But there seem to be an awful lot of mad people walking around with bits of plastic clipped to their ears, talking to themselves
  • The outward shape of the future contains the present and the past, embedded within it like flies in amber.
  • Our visitor from 1961 is familiar with cars and clothes and buildings
  • But he hasn’t heard of packet switched networks
  • Our time traveller from 1961 has a steep learning curve if he wants to understand the technology the folks with the cordless headsets are using.
  • The social consequences of a new technology are almost always impossible to guess in advance.
  • Let me take mobile phones as an example. They let people talk to one another – that much is obvious. What is less obvious is that for the first time the telephone network connects people, not places
  • For example, we’re currently raising the first generation of kids who won’t know what it means to be lost – everywhere they go, they have GPS service and a moving map that will helpfully show them how to get wherever they want to go.
  • to our time traveller from 1961, it’s magic: you have a little glowing box, and if you tell it “I want to visit my cousin Bill, wherever he is,” a taxi will pull up and take you to Bill’s house
  • The whole question of whether a mature technosphere needs three or four billion full-time employees is an open one, as is the question of what we’re all going to do if it turns out that the future can’t deliver jobs.
  • We’re still in the first decade of mass mobile internet uptake, and we still haven’t seen what it really means when the internet becomes a pervasive part of our social environment, rather than something we have to specifically sit down and plug ourselves in to, usually at a desk.
  • So let me start by trying to predict the mobile internet of 2061.
  • the shape of the future depends on whether whoever provides the basic service of communication
  • funds their service by charging for bandwidth or charging for a fixed infrastructure cost.
  • These two models for pricing imply very different network topologies.
  • This leaves aside a third model, that of peer to peer mesh networks with no actual cellcos as such – just lots of folks with cheap routers. I’m going to provisionally assume that this one is hopelessly utopian
  • the security problems of a home-brew mesh network are enormous and gnarly; when any enterprising gang of scammers can set up a public router, who can you trust?
  • Let’s hypothesize a very high density, non-volatile serial storage medium that might be manufactured using molecular nanotechnology: I call it memory diamond.
  • wireless bandwidth appears to be constrained fundamentally by the transparency of air to electromagnetic radiation. I’ve seen some estimates that we may be able to punch as much as 2 tb/sec through air; then we run into problems.
  • What can you do with 2 terabits per second per human being on the planet?
  • One thing you can do trivially with that kind of capacity is full lifelogging for everyone. Lifelogging today is in its infancy, but it’s going to be a major disruptive technology within two decades.
  • the resulting search technology essentially gives you a prosthetic memory.
  • Lifelogging offers the promise of indexing and retrieving the unwritten and undocmented. And this is both a huge promise and an enormous threat.
  • Lifelogging raises huge privacy concerns, of course.
  • The security implications are monstrous: if you rely on lifelogging for your memory or your ability to do your job, then the importance of security is pushed down Maslow’s hierarchy of needs.
  • if done right, widespread lifelogging to cloud based storage would have immense advantages for combating crime and preventing identity theft.
  • whether lifelogging becomes a big social issue depends partly on the nature of our pricing model for bandwidth, and how we hammer out the security issues surrounding the idea of our sensory inputs being logged for posterity.
  • at least until the self-driving automobile matches and then exceeds human driver safety.
  • We’re currently living through a period in genomics research that is roughly equivalent to the early 1960s in computing.
  • In particular, there’s a huge boom in new technologies for high speed gene sequencing.
  • full genome sequencing for individuals now available for around US $30,000, and expected to drop to around $1000–3000 within a couple of years.
  • Each of us is carrying around a cargo of 1–3 kilograms of bacteria and other unicellular organisms, which collectively outnumber the cells of our own bodies by a thousand to one.
  • These are for the most part commensal organisms – they live in our guts and predigest our food, or on our skin – and they play a significant role in the functioning of our immune system.
  • Only the rapid development of DNA assays for SARS – it was sequenced within 48 hours of its identification as a new pathogenic virus – made it possible to build and enforce the strict quarantine regime that saved us from somewhere between two hundred million and a billion deaths.
  • A second crisis we face is that of cancer
  • we can expect eventually to see home genome monitoring – both looking for indicators of precancerous conditions or immune disorders within our bodies, and performing metagenomic analysis on our environment.
  • If our metagenomic environment is routinely included in lifelogs, we have the holy grail of epidemiology within reach; the ability to exhaustively track the spread of pathogens and identify how they adapt to their host environment, right down to the level of individual victims.
  • In each of these three examples of situations where personal privacy may be invaded, there exists a strong argument for doing so in the name of the common good – for prevention of epidemics, for prevention of crime, and for prevention of traffic accidents. They differ fundamentally from the currently familiar arguments for invasion of our data privacy by law enforcement – for example, to read our email or to look for evidence of copyright violation. Reading our email involves our public and private speech, and looking for warez involves our public and private assertion of intellectual property rights …. but eavesdropping on our metagenomic environment and our sensory environment impinges directly on the very core of our identities.
  • With lifelogging and other forms of ubiquitous computing mediated by wireless broadband, securing our personal data will become as important to individuals as securing our physical bodies.
  • the shifting sands of software obsolescence have for the most part buried our ancient learning mistakes.
  • So, to summarize: we’re moving towards an age where we may have enough bandwidth to capture pretty much the totality of a human lifespan, everything except for what’s going on inside our skulls.
  •  
    "Good afternoon, and thank you for inviting me to speak at USENIX Security." A fun read by Charlie Stoss."
  •  
    I feel like cancer may be a bit played up. I freak out more about dementia.
anonymous

Libertarianism and Hegemony - 0 views

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    The comments are a hoot. "My views on foreign policy tend to diverge from mainstream libertarian doctrine. Take American hegemony. Many people are predicting (usually with glee) the demise of American power (see, for example, Ronald Dworkin). Regardless of the accuracy of these predictions, I think libertarians have reasons to support American global hegemony. Realistic alternatives to hegemony are the international state of nature, balance of power, and governance by an international institution such as the United Nations. The state of nature is undesirable for well-known Hobbesian reasons: defensive efforts would undermine productive cooperation. Balance of power is inherently unstable; sooner or later will morph into hegemonic power. And, at least in today's world, governance by an international institution would be plagued by legitimacy deficits and agency costs that would surely threaten liberal values. So, if we are going to have hegemony as the only arrangement capable of providing global public goods, the United States is the least bad because American institutions and culture embody liberal values. Any likely competitor is certainly to be worse for those who cherish liberal values. I believe history supports this, too: three times during the 20th century the United States saved liberal culture from onslaughts by illiberal forces. Objections to hegemony are often condemnations of means rather than ends, and I certainly agree with those where applicable. Let us concede that the United States sometimes pursues moral ends (say, helping other nations achieve freedom) with immoral means (say, bringing about unjustified collateral harm). Citizens in liberal democracies must oppose the use of immoral means, even for a good cause. However, this kind of criticism cannot be a wholesale condemnation of hegemony, because there are world powers, such as the Soviet Union, who pursue immoral ends. Surely these cannot be saved even when they use moral means (whi
anonymous

U.S.: What the Sequester Will Do to the Military - 0 views

  • The current continuing resolution that Congress is using to fund the entire government until March 27 has already affected U.S. forces.
  • Although Stratfor typically does not examine domestic U.S. issues, this one is geopolitically significant.
  • The U.S. military, and particularly the Navy, is the most powerful force projection instrument in the world. When the sequester takes effect, it will immediately reduce military spending by 8 percent, with more than $500 billion in cuts to defense spending over 10 years divided equally among the military branches.
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  • It is not the overall amount of the reductions that is damaging, necessarily; it is the way in which the cuts will be implemented. The across-the-board cuts required by the sequestration coupled with the limits set by the continuing resolution are constraining budget planners' options in how to absorb the spending reductions and thus are damaging all the military branches, programs, training, deployments and procurement.
  • Just the threat of continued budget reductions has had an immediate effect on the military's readiness. The Navy decided not to deploy a second carrier to the Persian Gulf, backing down from its standard of two carriers in the region. Instead, the second carrier will serve in a surge capacity for the immediate future. The other branches have extended the deployments of units already in theaters and delayed others from rotating in as replacements since it is relatively less expensive to have units stay in place than move them and their equipment intercontinentally.
  • Maintenance budgets across the forces have been reduced or suspended in anticipation of cuts. Training of all non-deploying forces who are not critical to the national strategic forces is also being heavily curtailed.
  • These options were chosen because they are immediate cost-saving measures that can be reversed quickly as opposed to the big-budget procurement programs, in which changes can cause delays for years.
  • Any given military platform, from a Stryker armored vehicle to an aircraft carrier, requires a lot of money in order to be ready for use at any time at its intended level of performance. These platforms require consistent use to maintain a certain readiness level because machines cannot sit idle for months to years and then operate effectively, if at all, especially if called on for immediate action.
  • Moreover, the people that operate this equipment need to maintain their working knowledge and operational skill through continued use. This use causes wear and tear on the platform and requires consistent maintenance. All of this is necessary just to maintain the status quo. In the end, there must be a balance between a platform's readiness level and the amount of funding required for operations and maintenance, but if the money is no longer available there is no choice but to reduce readiness.
  • For example, the Navy has said it is considering suspending operations of four of its nine carrier air wings while shutting down four of its carriers in various stages of the operations and maintenance process. This would essentially give the United States one carrier deployed with one on call for years. This will be sufficient if the world remains relatively quiet, but one large emergency or multiple small ones would leave the United States able to project limited force compared to previous levels.
  • Procurement cycles are very slow and take decades to implement; for instance, the Navy that the United States wants to have in 20 years is being planned now.
  • The U.S. military has a global presence, and sequestration would have appreciable effects on this in certain areas. Potentially, the hardest hit region will be the Pacific, which has been the focus of the United States' new strategy.
  • The single biggest capability gap that will develop will be the U.S. military's surge capacity. If the Syria-Iraq-Lebanon corridor were to become more unstable, the United States will not be able to respond with the same force structure it had in the past. The U.S. military can still shift its assets to different regions to attain its strategic goals, but those assets will come from a smaller resource pool, and shifting them will lessen the presence in some other region. The military's ability to use one of its softer political tools -- joint military exercises -- will also be at risk.
  • This is not to say that the U.S. military will be wrecked immediately or that its condition is anywhere near that of the Russian military in the 1990s. A military's effectiveness is measured against its potential opponents, and the United States has enjoyed a large gap for decades.
  • Funding cuts are not necessarily abnormal for the United States while winding down into a postwar stance. Historically, the pattern has been a reduction in spending and retrenchment of a large volume of forces from abroad. However, Pentagon planners typically go into a postwar period with the stated goal of not damaging the force through these cuts and reductions. 
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    "Sequestration, the automatic spending reductions scheduled to take effect March 1, will affect the U.S. military's ability to project force around the world. The current continuing resolution that Congress is using to fund the entire government until March 27 has already affected U.S. forces. The longer these funding cuts continue, the more degradation the U.S. military will incur, with longer-lasting effects. "
anonymous

The Inequality That Matters - 1 views

  • there’s more confusion about this issue than just about any other in contemporary American political discourse.
  • The reality is that most of the worries about income inequality are bogus, but some are probably better grounded and even more serious than even many of their heralds realize. If our economic churn is bound to throw off political sparks, whether alarums about plutocracy or something else, we owe it to ourselves to seek out an accurate picture of what is really going on.
  • Let’s start with the subset of worries about inequality that are significantly overblown.
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  • Most analyses of income inequality neglect two major points.
  • First, the inequality of personal well-being is sharply down over the past hundred years and perhaps over the past twenty years as well.
  • by broad historical standards, what I share with Bill Gates is far more significant than what I don’t share with him.
  • Compare these circumstances to those of 1911, a century ago. Even in the wealthier countries, the average person had little formal education, worked six days a week or more, often at hard physical labor, never took vacations, and could not access most of the world’s culture.
  • when average people read about or see income inequality, they don’t feel the moral outrage that radiates from the more passionate egalitarian quarters of society. Instead, they think their lives are pretty good and that they either earned through hard work or lucked into a healthy share of the American dream.
  • In narrowly self-interested terms, that view may be irrational, but most Americans are unwilling to frame national issues in terms of rich versus poor.
  • There’s a great deal of hostility toward various government bailouts, but the idea of “undeserving” recipients is the key factor in those feelings. Resentment against Wall Street gamesters hasn’t spilled over much into resentment against the wealthy more generally.
  • their constituents bear no animus toward rich people, only toward undeservedly rich people.
    • anonymous
       
      Which is how the policy can be reframed to the benefit of those that understand this more cleanly.
  • in the United States, most economic resentment is not directed toward billionaires or high-roller financiers—not even corrupt ones. It’s directed at the guy down the hall who got a bigger raise.
    • anonymous
       
      Provincialism!
  • The high status of the wealthy in America, or for that matter the high status of celebrities, seems to bother our intellectual class most. That class composes a very small group, however
  • All that said, income inequality does matter—for both politics and the economy.
  • To see how, we must distinguish between inequality itself and what causes it. But first let’s review the trends in more detail.
  • Income inequality has been rising in the United States, especially at the very top.
  • The data show a big difference between two quite separate issues
  • income growth at the very top
  • greater inequality throughout the distribution
  • When it comes to the first trend, the share of pre-tax income earned by the richest 1 percent of earners has increased from about 8 percent in 1974 to more than 18 percent in 2007. Furthermore, the richest 0.01 percent (the 15,000 or so richest families) had a share of less than 1 percent in 1974 but more than 6 percent of national income in 2007. As noted, those figures are from pre-tax income, so don’t look to the George W. Bush tax cuts to explain the pattern. Furthermore, these gains have been sustained and have evolved over many years, rather than coming in one or two small bursts between 1974 and today.1
  • Caution is in order, but the overall trend seems robust. Similar broad patterns are indicated by different sources, such as studies of executive compensation. Anecdotal observation suggests extreme and unprecedented returns earned by investment bankers, fired CEOs, J.K. Rowling and Tiger Woods.
  • At the same time, wage growth for the median earner has slowed since 1973.
  • But that slower wage growth has afflicted large numbers of Americans, and it is conceptually distinct from the higher relative share of top income earners. For instance, if you take the 1979–2005 period, the average incomes of the bottom fifth of households increased only 6 percent while the incomes of the middle quintile rose by 21 percent. That’s a widening of the spread of incomes, but it’s not so drastic compared to the explosive gains at the very top.
  • The broader change in income distribution, the one occurring beneath the very top earners, can be deconstructed in a manner that makes nearly all of it look harmless. For instance, there is usually greater inequality of income among both older people and the more highly educated, if only because there is more time and more room for fortunes to vary.
  • Since America is becoming both older and more highly educated, our measured income inequality will increase pretty much by demographic fiat.
  • Economist Thomas Lemieux at the University of British Columbia estimates that these demographic effects explain three-quarters of the observed rise in income inequality for men, and even more for women.2
  • Attacking the problem from a different angle, other economists are challenging whether there is much growth in inequality at all below the super-rich. For instance, real incomes are measured using a common price index, yet poorer people are more likely to shop at discount outlets like Wal-Mart, which have seen big price drops over the past twenty years.3 Once we take this behavior into account, it is unclear whether the real income gaps between the poor and middle class have been widening much at all.
  • And so we come again to the gains of the top earners, clearly the big story told by the data.
  • It’s worth noting that over this same period of time, inequality of work hours increased too. The top earners worked a lot more and most other Americans worked somewhat less. That’s another reason why high earners don’t occasion more resentment: Many people understand how hard they have to work to get there.
  • A threshold earner is someone who seeks to earn a certain amount of money and no more.
  • If wages go up, that person will respond by seeking less work or by working less hard or less often. That person simply wants to “get by” in terms of absolute earning power in order to experience other gains in the form of leisure—whether spending time with friends and family, walking in the woods and so on. Luck aside, that person’s income will never rise much above the threshold.
  • It’s not obvious what causes the percentage of threshold earners to rise or fall, but it seems reasonable to suppose that the more single-occupancy households there are, the more threshold earners there will be, since a major incentive for earning money is to use it to take care of other people with whom one lives.
  • For a variety of reasons, single-occupancy households in the United States are at an all-time high.
  • The funny thing is this: For years, many cultural critics in and of the United States have been telling us that Americans should behave more like threshold earners. We should be less harried, more interested in nurturing friendships, and more interested in the non-commercial sphere of life. That may well be good advice.
  • Many studies suggest that above a certain level more money brings only marginal increments of happiness.
  • What isn’t so widely advertised is that those same critics have basically been telling us, without realizing it, that we should be acting in such a manner as to increase measured income inequality.
  • Why is the top 1 percent doing so well?
  • Their data do not comprise the entire U.S. population, but from partial financial records they find a very strong role for the financial sector in driving the trend toward income concentration at the top.
  • The number of Wall Street investors earning more than $100 million a year was nine times higher than the public company executives earning that amount.
  • The authors also relate that they shared their estimates with a former U.S. Secretary of the Treasury, one who also has a Wall Street background. He thought their estimates of earnings in the financial sector were, if anything, understated.
  • Many of the other high earners are also connected to finance.
  • After Wall Street, Kaplan and Rauh identify the legal sector as a contributor to the growing spread in earnings at the top.
  • Finance aside, there isn’t much of a story of market failure here, even if we don’t find the results aesthetically appealing.
  • When it comes to professional athletes and celebrities, there isn’t much of a mystery as to what has happened.
  • There is more purchasing power to spend on children’s books and, indeed, on culture and celebrities more generally. For high-earning celebrities, hardly anyone finds these earnings so morally objectionable as to suggest that they be politically actionable.
  • We may or may not wish to tax the wealthy, including wealthy celebrities, at higher rates, but there is no need to “cure” the structural causes of higher celebrity incomes.
  • If we are looking for objectionable problems in the top 1 percent of income earners, much of it boils down to finance and activities related to financial markets. And to be sure, the high incomes in finance should give us all pause.
  • some investors opt for a strategy of betting against big, unexpected moves in market prices.
  • Most of the time investors will do well by this strategy, since big, unexpected moves are outliers by definition. Traders will earn above-average returns in good times. In bad times they won’t suffer fully when catastrophic returns come in, as sooner or later is bound to happen, because the downside of these bets is partly socialized onto the Treasury, the Federal Reserve and, of course, the taxpayers and the unemployed.
  • To understand how this strategy works, consider an example from sports betting.
  • if you bet against unlikely events, most of the time you will look smart and have the money to validate the appearance. Periodically, however, you will look very bad
  • Does that kind of pattern sound familiar? It happens in finance, too. Betting against a big decline in home prices is analogous to betting against the Wizards. Every now and then such a bet will blow up in your face, though in most years that trading activity will generate above-average profits and big bonuses for the traders and CEOs. To this mix we can add the fact that many money managers are investing other people’s money.
  • If you plan to stay with an investment bank for ten years or less, most of the people playing this investing strategy will make out very well most of the time. Everyone’s time horizon is a bit limited and you will bring in some nice years of extra returns and reap nice bonuses.
  • And let’s say the whole thing does blow up in your face? What’s the worst that can happen? Your bosses fire you, but you will still have millions in the bank and that MBA from Harvard or Wharton.
  • For the people actually investing the money, there’s barely any downside risk other than having to quit the party early.
  • Moreover, smart shareholders will acquiesce to or even encourage these gambles.
  • They gain on the upside, while the downside, past the point of bankruptcy, is borne by the firm’s creditors.
  • Perhaps more important, government bailouts minimize the damage to creditors on the downside.
  • Neither the Treasury nor the Fed allowed creditors to take any losses from the collapse of the major banks during the financial crisis. The U.S. government guaranteed these loans, either explicitly or implicitly.
  • For better or worse, we’re handing out free options on recovery, and that encourages banks to take more risk in the first place.
  • In short, there is an unholy dynamic of short-term trading and investing, backed up by bailouts and risk reduction from the government and the Federal Reserve. This is not good.
  • But more immediate and more important, it means that banks take far too many risks and go way out on a limb, often in correlated fashion. When their bets turn sour, as they did in 2007–09, everyone else pays the price.
  • And it’s not just the taxpayer cost of the bailout that stings. The financial disruption ends up throwing a lot of people out of work down the economic food chain, often for long periods.
  • In essence, we’re allowing banks to earn their way back by arbitraging interest rate spreads against the U.S. government. This is rarely called a bailout and it doesn’t count as a normal budget item, but it is a bailout nonetheless. This type of implicit bailout brings high social costs by slowing down economic recovery (the interest rate spreads require tight monetary policy) and by redistributing income from the Treasury to the major banks.
  • The more one studies financial theory, the more one realizes how many different ways there are to construct a “going short on volatility” investment position.
  • In some cases, traders may not even know they are going short on volatility. They just do what they have seen others do. Their peers who try such strategies very often have Jaguars and homes in the Hamptons. What’s not to like?
  • The upshot of all this for our purposes is that the “going short on volatility” strategy increases income inequality.
  • In normal years the financial sector is flush with cash and high earnings. In implosion years a lot of the losses are borne by other sectors of society. In other words, financial crisis begets income inequality. Despite being conceptually distinct phenomena, the political economy of income inequality is, in part, the political economy of finance.
  • If you’re wondering, right before the Great Depression of the 1930s, bank profits and finance-related earnings were also especially high.8
  • There’s a second reason why the financial sector abets income inequality: the “moving first” issue.
  • The moving-first phenomenon sums to a “winner-take-all” market. Only some relatively small number of traders, sometimes just one trader, can be first. Those who are first will make far more than those who are fourth or fifth.
  • Since gains are concentrated among the early winners, and the closeness of the runner-ups doesn’t so much matter for income distribution, asset-market trading thus encourages the ongoing concentration of wealth. Many investors make lots of mistakes and lose their money, but each year brings a new bunch of projects that can turn the early investors and traders into very wealthy individuals.
  • These two features of the problem—“going short on volatility” and “getting there first”—are related.
  • Still, every now and then Goldman will go bust, or would go bust if not for government bailouts. But the odds are in any given year that it won’t because of the advantages it and other big banks have.
  • It’s as if the major banks have tapped a hole in the social till and they are drinking from it with a straw.
  • In any given year, this practice may seem tolerable—didn’t the bank earn the money fair and square by a series of fairly normal looking trades?
  • Yet over time this situation will corrode productivity, because what the banks do bears almost no resemblance to a process of getting capital into the hands of those who can make most efficient use of it.
  • And it leads to periodic financial explosions. That, in short, is the real problem of income inequality we face today. It’s what causes the inequality at the very top of the earning pyramid that has dangerous implications for the economy as a whole.
  • A key lesson to take from all of this is that simply railing against income inequality doesn’t get us very far.
  • We have to find a way to prevent or limit major banks from repeatedly going short on volatility at social expense. No one has figured out how to do that yet.
  • It remains to be seen whether the new financial regulation bill signed into law this past summer will help.
  • The bill does have positive features.
  • First, it forces banks to put up more of their own capital, and thus shareholders will have more skin in the game, inducing them to curtail their risky investments.
  • Second, it also limits the trading activities of banks, although to a currently undetermined extent (many key decisions were kicked into the hands of future regulators).
  • Third, the new “resolution authority” allows financial regulators to impose selective losses, for instance, to punish bondholders if they wish.
  • We’ll see if these reforms constrain excess risk-taking in the long run. There are reasons for skepticism.
  • Most of all, the required capital cushions simply aren’t that high, so a big enough bet against unexpected outcomes still will yield more financial upside than downside
  • What about controlling bank risk-taking directly with tight government oversight? That is not practical. There are more ways for banks to take risks than even knowledgeable regulators can possibly control
  • It’s also not clear how well regulators can identify risky assets.
  • Some of the worst excesses of the financial crisis were grounded in mortgage-backed assets—a very traditional function of banks—not exotic derivatives trading strategies.
  • Virtually any asset position can be used to bet long odds, one way or another. It is naive to think that underpaid, undertrained regulators can keep up with financial traders, especially when the latter stand to earn billions by circumventing the intent of regulations while remaining within the letter of the law.
  • For the time being, we need to accept the possibility that the financial sector has learned how to game the American (and UK-based) system of state capitalism.
  • It’s no longer obvious that the system is stable at a macro level, and extreme income inequality at the top has been one result of that imbalance. Income inequality is a symptom, however, rather than a cause of the real problem.
  • The root cause of income inequality, viewed in the most general terms, is extreme human ingenuity, albeit of a perverse kind. That is why it is so hard to control.
  • Another root cause of growing inequality is that the modern world, by so limiting our downside risk, makes extreme risk-taking all too comfortable and easy.
  • More risk-taking will mean more inequality, sooner or later, because winners always emerge from risk-taking.
  • Yet bankers who take bad risks (provided those risks are legal) simply do not end up with bad outcomes in any absolute sense.
  • We’re not going to bring back torture, trial by ordeal or debtors’ prisons, nor should we. Yet the threat of impoverishment and disgrace no longer looms the way it once did, so we no longer can constrain excess financial risk-taking. It’s too soft and cushy a world.
  • That’s an underappreciated way to think about our modern, wealthy economy: Smart people have greater reach than ever before, and nothing really can go so wrong for them.
  • How about a world with no bailouts? Why don’t we simply eliminate the safety net for clueless or unlucky risk-takers so that losses equal gains overall? That’s a good idea in principle, but it is hard to put into practice.
  • Once a financial crisis arrives, politicians will seek to limit the damage, and that means they will bail out major financial institutions.
  • Had we not passed TARP and related policies, the United States probably would have faced unemployment rates of 25 percent of higher, as in the Great Depression. The political consequences would not have been pretty.
  • Bank bailouts may sound quite interventionist, and indeed they are, but in relative terms they probably were the most libertarian policy we had on tap. It meant big one-time expenses, but, for the most part, it kept government out of the real economy (the General Motors bailout aside).
  • So what will happen next?
  • One worry is that banks are currently undercapitalized and will seek out or create a new bubble within the next few years, again pursuing the upside risk without so much equity to lose.
  • A second perspective is that banks are sufficiently chastened for the time being but that economic turmoil in Europe and China has not yet played itself out, so perhaps we still have seen only the early stages of what will prove to be an even bigger international financial crisis.
  • A third view is perhaps most likely. We probably don’t have any solution to the hazards created by our financial sector, not because plutocrats are preventing our political system from adopting appropriate remedies, but because we don’t know what those remedies are.
  • Yet neither is another crisis immediately upon us. The underlying dynamic favors excess risk-taking, but banks at the current moment fear the scrutiny of regulators and the public and so are playing it fairly safe.
  • They are sitting on money rather than lending it out. The biggest risk today is how few parties will take risks, and, in part, the caution of banks is driving our current protracted economic slowdown. According to this view, the long run will bring another financial crisis once moods pick up and external scrutiny weakens, but that day of reckoning is still some ways off.
  • Is the overall picture a shame? Yes. Is it distorting resource distribution and productivity in the meantime? Yes. Will it again bring our economy to its knees? Probably. Maybe that’s simply the price of modern society. Income inequality will likely continue to rise and we will search in vain for the appropriate political remedies for our underlying problems.
    • anonymous
       
      Painfully straightforward.
  •  
    "Does growing wealth and income inequality in the United States presage the downfall of the American republic? Will we evolve into a new Gilded Age plutocracy, irrevocably split between the competing interests of rich and poor? Or is growing inequality a mere bump in the road, a statistical blip along the path to greater wealth for virtually every American? Or is income inequality partially desirable, reflecting the greater productivity of society's stars?"
anonymous

Obama's Bluff - 0 views

  • Damascus' close ties to Iran and Russia give the United States reason to be hostile toward Syria, and Washington participated in the campaign to force Syrian troops out of Lebanon. Still, the United States has learned to be concerned not just with unfriendly regimes, but also with what could follow such regimes.
  • The United States has been reluctant to heed these calls. As mentioned, Washington does not have a direct interest in the outcome, since all possible outcomes are bad from its perspective.
  • U.S. President Barack Obama therefore adopted an extremely cautious strategy. He said that the United States would not get directly involved in Syria unless the al Assad regime used chemical weapons, stating with a high degree of confidence that he would not have to intervene.
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  • Al Assad is a ruthless man: He would not hesitate to use chemical weapons if he had to. He is also a very rational man: He would use chemical weapons only if that were his sole option. At the moment, it is difficult to see what desperate situation would have caused him to use chemical weapons and risk the worst.
  • The truth here has been politicized, and whoever claims to have found the truth, whatever it actually is, will be charged with lying. Nevertheless, the dominant emerging story is that al Assad carried out the attack, killing hundreds of men, women and children and crossing the red line Obama set with impunity. The U.S. president is backed into a corner. 
  • The United States has chosen to take the matter to the United Nations. Obama will make an effort to show he is acting with U.N. support. But he knows he won't get U.N. support.
  • Regardless of whether the charges against al Assad are true, the Russians will dispute them and veto any action. Going to the United Nations therefore only buys time.
  • This is no longer simply about Syria. The United States has stated a condition that commits it to an intervention.
  • If it does not act when there is a clear violation of the condition, Obama increases the chance of war with other countries like North Korea and Iran.
  • If these countries come to believe that the United States is actually bluffing, then the possibility of miscalculation soars.
  • Syria was not an issue that affected the U.S. national interest until Obama declared a red line. It escalated in importance at that point not because Syria is critical to the United States, but because the credibility of its stated limits are of vital importance.
  • The question therefore becomes what the United States and the new coalition of the willing will do if the red line has been crossed. The fantasy is that a series of airstrikes, destroying only chemical weapons, will be so perfectly executed that no one will be killed except those who deserve to die. But it is hard to distinguish a man's soul from 10,000 feet. There will be deaths, and the United States will be blamed for them.
  • attacking means al Assad loses all incentive to hold back on using chemical weapons. If he is paying the price of using them, he may as well use them. The gloves will come off on both sides as al Assad seeks to use his chemical weapons before they are destroyed. A war on chemical weapons has a built-in insanity to it.
  • When Obama proclaimed his red line on Syria and chemical weapons, he assumed the issue would not come up.
  • He made a gesture to those in his administration who believe that the United States has a moral obligation to put an end to brutality. He also made a gesture to those who don't want to go to war again.
  • It was one of those smart moves that can blow up in a president's face when it turns out his assumption was wrong.
  • Obama can get overwhelming, indisputable proof that al Assad did not -- and that isn't going to happen -- Obama will either have to act on the red line principle or be shown to be one who bluffs
  • Libya was easy compared to Syria. Now, the president must intervene to maintain his credibility. But there is no political support in the United States for intervention.
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    "Images of multiple dead bodies emerged from Syria last week. It was asserted that poison gas killed the victims, who according to some numbered in the hundreds. Others claimed the photos were faked while others said the rebels were at fault. The dominant view, however, maintains that the al Assad regime carried out the attack."
anonymous

DNA/How to Stop Worrying and Learn to Love the Internet - 0 views

  • I suppose earlier generations had to sit through all this huffing and puffing with the invention of television, the phone, cinema, radio, the car, the bicycle, printing, the wheel and so on, but you would think we would learn the way these things work, which is this: 1) everything that’s already in the world when you’re born is just normal; 2) anything that gets invented between then and before you turn thirty is incredibly exciting and creative and with any luck you can make a career out of it; 3) anything that gets invented after you’re thirty is against the natural order of things and the beginning of the end of civilisation as we know it until it’s been around for about ten years when it gradually turns out to be alright really.
  • Because the Internet is so new we still don’t really understand what it is. We mistake it for a type of publishing or broadcasting, because that’s what we’re used to. So people complain that there’s a lot of rubbish online, or that it’s dominated by Americans, or that you can’t necessarily trust what you read on the web.
  • ‘carved in stone.’
    • anonymous
       
      Add: You can carve lies in stone.
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  • Another problem with the net is that it’s still ‘technology’, and ‘technology’, as the computer scientist Bran Ferren memorably defined it, is ‘stuff that doesn’t work yet.’
  • In ‘The Language Instinct’, Stephen Pinker explains the generational difference between pidgin and creole languages. A pidgin language is what you get when you put together a bunch of people – typically slaves – who have already grown up with their own language but don’t know each others’. They manage to cobble together a rough and ready lingo made up of bits of each. It lets them get on with things, but has almost no grammatical structure at all. However, the first generation of children born to the community takes these fractured lumps of language and transforms them into something new, with a rich and organic grammar and vocabulary, which is what we call a Creole. Grammar is just a natural function of children’s brains, and they apply it to whatever they find.
  • We are natural villagers. For most of mankind’s history we have lived in very small communities in which we knew everybody and everybody knew us. But gradually there grew to be far too many of us, and our communities became too large and disparate for us to be able to feel a part of them, and our technologies were unequal to the task of drawing us together. But that is changing.
  •  
    "...the change is real. I don't think anybody would argue now that the Internet isn't becoming a major factor in our lives. However, it's very new to us. Newsreaders still feel it is worth a special and rather worrying mention if, for instance, a crime was planned by people 'over the Internet.' They don't bother to mention when criminals use the telephone or the M4, or discuss their dastardly plans 'over a cup of tea,' though each of these was new and controversial in their day." By Douglas Adams at The Sunday Times on August 29, 1999.
anonymous

Global Economic Downturn: A Crisis of Political Economy - 0 views

  • For classical economists, it was impossible to understand politics without economics or economics without politics.
  • The use of the term “economy” by itself did not begin until the late 19th century.
  • For classical economists, the political and economic systems were intertwined, each dependent on the other for its existence.
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  • The current economic crisis is best understood as a crisis of political economy.
  • Moreover, it has to be understood as a global crisis enveloping the United States, Europe and China that has different details but one overriding theme: the relationship between the political order and economic life.
  • the origin of the current financial crisis was the subprime mortgage meltdown in the United States.
  • To be more precise, it originated in a financial system generating paper assets whose value depended on the price of housing.
  • From the standpoint of economics, this was essentially a financial crisis: who made or lost money and how much.
  • From the standpoint of political economy it raised a different question: the legitimacy of the financial elite.
  • Think of a national system as a series of subsystems — political, economic, military and so on.
  • Then think of the economic system as being divisible into subsystems — various corporate verticals with their own elites, with one of the verticals being the financial system.
  • A sense emerged that the financial elite was either stupid or dishonest or both.
  • Fair or not, this perception created a massive political crisis.
  • There was a crisis of confidence in the financial system and a crisis of confidence in the political system. The U.S. government’s actions in September 2008 were designed first to deal with the failures of the financial system. Many expected this would be followed by dealing with the failures of the financial elite, but this is perceived not to have happened.
  • This generated the second crisis — the crisis of the political elite.
  • The Tea Party movement emerged in part as critics of the political elite, focusing on the measures taken to stabilize the system and arguing that it had created a new financial crisis, this time in excessive sovereign debt.
  • Its argument was that the political elite used the financial crisis to dramatically increase the power of the state (health care reform was the poster child for this) while mismanaging the financial system through excessive sovereign debt.
  • The sovereign debt question also created both a financial crisis and then a political crisis in Europe.
  • What had been a minority view was strengthened by the recession.
  • The European crisis paralleled the American crisis in that financial institutions were bailed out. But the deeper crisis was that Europe did not act as a single unit to deal with all European banks
  • There are two narratives to the story.
  • One is the German version, which has become the common explanation. It holds that Greece wound up in a sovereign debt crisis because of the irresponsibility of the Greek government
  • The Greek narrative, which is less noted, was that the Germans rigged the European Union in their favor. Germany is the world’s third-largest exporter, after China and the United States (and closing rapidly on the No. 2 spot). By forming a free trade zone, the Germans created captive markets for their goods.
  • Moreover, the regulations generated by Brussels so enhanced the German position that Greece was helpless.
  • Which narrative is true is not the point.
  • The point is that Europe is facing two political crises generated by economics. One crisis is similar to the American one, which is the belief that Europe’s political elite protected the financial elite. The other is a distinctly European one, a regional crisis in which parts of Europe have come to distrust each other rather vocally. This could become an existential crisis for the European Union.
  • The American and European crises struck hard at China, which, as the world’s largest export economy, is a hostage to external demand, particularly from the United States and Europe.
  • The Chinese government had two responses.
  • The first was to keep factories going by encouraging price reductions to the point where profit margins on exports evaporated.
  • The second was to provide unprecedented amounts of credit to enterprises facing default on debts in order to keep them in business.
  • This led to a second crisis, where workers faced the contraction of already small incomes.
  • The response was to increase incomes, which in turn increased the cost of goods exported once again, making China’s wage rates less competitive, for example, than Mexico’s.
  • China had previously encouraged entrepreneurs. This was easy when Europe and the United States were booming. Now, the rational move by entrepreneurs was to go offshore or lay off workers, or both.
  • In the United States, the first impulse was to regulate the financial sector, stimulate the economy and increase control over sectors of the economy.
  • In Europe, where there were already substantial controls over the economy, the political elite started to parse how those controls would work and who would benefit more.
  • In China, where the political elite always retained implicit power over the economy, that power was increased.
  • In all three cases, the first impulse was to use political controls.
  • In the United States, the Tea Party was simply the most active and effective manifestation of that resistance.
  • In Europe, the resistance came from anti-Europeanists
  • It also came from political elites of countries like Ireland who were confronting the political elites of other countries.
  • In China, the resistance has come from those being hurt by inflation
  • Russia went through this crisis years ago and had already tilted toward the political elite’s control over the economy.
  • Brazil and India have not experienced the extremes of China, but then they haven’t had the extreme growth rates of China.
  • But when the United States, Europe and China go into a crisis of this sort, it can reasonably be said that the center of gravity of the world’s economy and most of its military power is in crisis. It is not a trivial moment.
  • Crisis does not mean collapse. The United States has substantial political legitimacy to draw on.
  • Europe has less but its constituent nations are strong.
  • China’s Communist Party is a formidable entity but it is no longer dealing with a financial crisis.
  • It is vital to understand that this is not an ideological challenge.
  • Left-wingers opposing globalization and right-wingers opposing immigration are engaged in the same process — challenging the legitimacy of the elites.
    • anonymous
       
      This is why so much of American life seems like that proverbial puppet show. Politicians, at their basest, have a vested interest in portraying this as a problem between us-vs-them. It reflects heat.
  • The real problem is that, while the challenge to the elites goes on, the profound differences in the challengers make an alternative political elite difficult to imagine.
  • This, then, is the third crisis that can emerge: that the elites become delegitimized and all that there is to replace them is a deeply divided and hostile force, united in hostility to the elites but without any coherent ideology of its own.
  • In the United States this would lead to paralysis. In Europe it would lead to a devolution to the nation-state. In China it would lead to regional fragmentation and conflict.
  • These are all extreme outcomes and there are many arrestors.
  • But we cannot understand what is going on without understanding two things.
  • The first is that the political economic crisis, if not global, is at least widespread, and uprisings elsewhere have their own roots but are linked in some ways to this crisis.
  • The second is that the crisis is an economic problem that has triggered a political problem, which in turn is making the economic problem worse.
  • The followers of Adam Smith may believe in an autonomous economic sphere disengaged from politics, but Adam Smith was far more subtle. That’s why he called his greatest book the Wealth of Nations. It was about wealth, but it was also about nations. It was a work of political economy that teaches us a great deal about the moment we are in.
  •  
    Classical political economists like Adam Smith or David Ricardo never used the term "economy" by itself. They always used the term "political economy." For classical economists, it was impossible to understand politics without economics or economics without politics. The two fields are certainly different but they are also intimately linked.
anonymous

A Brief History of the Corporation: 1600 to 2100 - 1 views

  • In its 400+ year history, the corporation has achieved extraordinary things, cutting around-the-world travel time from years to less than a day, putting a computer on every desk, a toilet in every home (nearly) and a cellphone within reach of every human.  It even put a man on the Moon and kinda-sorta cured AIDS.
  • The Age of Corporations is coming to an end. The traditional corporation won’t vanish, but it will cease to be the center of gravity of economic life in another generation or two.  They will live on as religious institutions do today, as weakened ghosts of more vital institutions from centuries ago.
  • this post is mostly woven around ideas drawn from five books that provide appropriate fuel for this business-first frame. I will be citing, quoting and otherwise indirectly using these books over several future posts
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  • 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.
  • The human world, like physics, can be reduced to four fundamental forces: culture, politics, war and business.
  • 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.
  • Business? It gets into bed with it. It is sort of vaguely plausible that you could switch artists, politicians and generals around with their peers from another age and still expect them to function. But there is no meaningful way for a businessman from (say) 2000 BC to comprehend what Mark Zuckerberg does, let alone take over for him. Too much magical technological water has flowed under the bridge.
  • 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.
  • There are some who treat corporate forms as yet another technology (in this case a technology of people-management), but despite the trappings of scientific foundations (usually in psychology) and engineering synthesis (we speak of organizational “design”), the corporate form is not a technology.  It is the consequence of a social contract like the one that anchors nationhood. It is a codified bundle of quasi-religious beliefs externalized into an animate form that seeks to preserve itself like any other living creature.
  • 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
  • two important points about this evolution of corporations.
  • The first point is that the corporate form was born in the era of Mercantilism, the economic ideology that (zero-sum) control of land is the foundation of all economic power.
  • 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.
  • It was not until after the American Civil War and the Gilded Age that businesses fundamentally reorganized around (as we will see) time instead of space, which led, as we will see, to a central role for ideas and therefore the innovation function.
  • 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.
    • anonymous
       
      So, Mercantilism was about colonizing space. Corporatism is about colonizing time. This is a pretty useful (though arguably too-reductionist) way to latch on to the underpinning of later thoughts.
  • This divide between the two models can be placed at around 1800, the nominal start date of the Industrial Revolution, as the ideas of Renaissance Science met the energy of coal to create a cocktail that would allow corporations to colonize time.
  • The second thing to understand about the evolution of the corporation is that the apogee of power did not coincide with the apogee of reach.
  • 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
    • anonymous
       
      I think it would be useful to map these eras against the backdrop of my previously established Generational timeline (as well as the StratFor 50-year cycle breakdown) in order to see if there are any self-supporting model elements.
  • By a happy accident, there is a major economist whose ideas help fingerprint the economic contours of our world: Ronald Coase.
  • 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.
  • Two images hint at its actual globe-straddling, 10x-Walmart influence: the image of the Boston Tea Partiers dumping crates of tea into the sea during the American struggle for independence, and the image of smoky opium dens in China. One image symbolizes the rise of a new empire. The other marks the decline of an old one.
  • 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.
  • there was nothing preventing its officers like Clive from simultaneously holding political appointments that legitimized conflicts of interest. If you thought it was bad enough that Dick Cheney used to work for Halliburton before he took office, imagine if he’d worked there while in office, with legitimate authority to use his government power to favor his corporate employer and make as much money on the side as he wanted, and call in the Army and Navy to enforce his will. That picture gives you an idea of the position Robert Clive found himself in, in 1757.
  • 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.)
  • The 16th century makes a vague sort of sense as the “Age of Exploration,” but it really makes a lot more sense as the startup/first-mover/early-adopter phase of the corporate mercantilism. The period was dominated by the daring pioneer spirit of Spain and Portugal, which together served as the Silicon Valley of Mercantilism. But the maritime business operations of Spain and Portugal turned out to be the MySpace and Friendster of Mercantilism: pioneers who could not capitalize on their early lead.
  • Conventionally, it is understood that the British and the Dutch were the ones who truly took over. But in reality, it was two corporations that took over: the EIC and the VOC (the Dutch East India Company,  Vereenigde Oost-Indische Compagnie, founded one year after the EIC) the Facebook and LinkedIn of Mercantile economics respectively. Both were fundamentally more independent of the nation states that had given birth to them than any business entities in history. The EIC more so than the VOC.  Both eventually became complex multi-national beasts.
  • 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.
    • anonymous
       
      There was an excellent episode of the original Connections series that pointed this out, specifically focusing on the Dutch boats and the direct line to container ships and 747 cargo planes.
  • A new idea began to take its place in the early 19th century: the Schumpeterian corporation that controlled, not trade routes, but time. It added the second of the two essential Druckerian functions to the corporation: innovation.
  • 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 action shifted to two huge wildcards in world affairs of the 1800s: the newly-born nation of America and the awakening giant in the east, Russia. Per capita productivity is about efficient use of human time. But time, unlike space, is not a collective and objective dimension of human experience. It is a private and subjective one. Two people cannot own the same piece of land, but they can own the same piece of time.  To own space, you control it by force of arms. To own time is to own attention. To own attention, it must first be freed up, one individual stream of consciousness at a time.
  • 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.
  • It sounds awful when I put it that way, and it was, in human terms, but there is no denying that the process was mostly inevitable and that the result was vastly better products.
  • The Schumpeterian corporation did to business what the doctrine of Blitzkrieg would do to warfare in 1939: move humans at the speed of technology instead of moving technology at the speed of humans.
  • 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.
  • Then the Internet happened, and we discovered the ability to mine time as fast as it could be discovered in hidden pockets of attention. And we discovered limits. And suddenly a new peak started to loom: Peak 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.
  • Take an average housewife, the target of much time mining early in the 20th century. It was clear where her attention was directed. Laundry, cooking, walking to the well for water, cleaning, were all obvious attention sinks. Washing machines, kitchen appliances, plumbing and vacuum cleaners helped free up a lot of that attention, which was then immediately directed (as corporate-captive attention) to magazines and television.
  • The point isn’t that we are running out of attention. We are running out of the equivalent of oil: high-energy-concentration pockets of easily mined fuel.
  • 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.
  • It will be the dawn of the age of Coasean growth.
  • 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).
  • Coasean growth is fundamentally not measured in aggregate terms at all. It is measured in individual terms. An individual’s income and productivity may both actually decline, with net growth in a Coasean sense.
  • How do we measure Coasean growth? I have no idea. I am open to suggestions. All I know is that the metric will need to be hyper-personalized and relative to individuals rather than countries, corporations or the global economy. There will be a meaningful notion of Venkat’s rate of Coasean growth, but no equivalent for larger entities.
  • The fundamental scarce resource that Coasean growth discovers and colonizes is neither space, nor time. It is perspective.
  •  
    This is a lay friendly, amateur, mental exploration of the Corporation. It's also utterly absorbing and comes with the usual collection of caveats that we amateurs are accustomed to rattling off when we dunk ourselves into issues much bigger than ourselves. Thanks to BoingBoing, via Futurismic, for the pointer: http://www.boingboing.net/2011/06/23/a-brief-history-of-t.html http://futurismic.com/2011/06/22/a-brief-history-of-the-corporation-1600-to-2100/ "The year was 1772, exactly 239 years ago today, the apogee of power for the corporation as a business construct. The company was the British East India company (EIC). The bubble that burst was the East India Bubble. Between the founding of the EIC in 1600 and the post-subprime world of 2011, the idea of the corporation was born, matured, over-extended, reined-in, refined, patched, updated, over-extended again, propped-up and finally widely declared to be obsolete. Between 2011 and 2100, it will decline - hopefully gracefully - into a well-behaved retiree on the economic scene."
anonymous

Jaron Lanier: The Internet destroyed the middle class - 2 views

  • His book continues his war on digital utopianism and his assertion of humanist and individualistic values in a hive-mind world. But Lanier still sees potential in digital technology: He just wants it reoriented away from its main role so far, which involves “spying” on citizens, creating a winner-take-all society, eroding professions and, in exchange, throwing bonbons to the crowd.
  • This week sees the publication of “Who Owns the Future?,” which digs into technology, economics and culture in unconventional ways.
  • Much of the book looks at the way Internet technology threatens to destroy the middle class by first eroding employment and job security, along with various “levees” that give the economic middle stability.
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  • “Here’s a current example of the challenge we face,” he writes in the book’s prelude: “At the height of its power, the photography company Kodak employed more than 140,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people. Where did all those jobs disappear? And what happened to the wealth that all those middle-class jobs created?”
  • But more important than Lanier’s hopes for a cure is his diagnosis of the digital disease. Eccentric as it is, “Future” is one of the best skeptical books about the online world, alongside Nicholas Carr’s “The Shallows,” Robert Levine’s “Free Ride” and Lanier’s own “You Are Not a Gadget.”
  • One is that the number of people who are contributing to the system to make it viable is probably the same.
  • And furthermore, many people kind of have to use social networks for them to be functional besides being valuable.
  • So there’s still a lot of human effort, but the difference is that whereas before when people made contributions to the system that they used, they received formal benefits, which means not only salary but pensions and certain kinds of social safety nets. Now, instead, they receive benefits on an informal basis. And what an informal economy is like is the economy in a developing country slum. It’s reputation, it’s barter, it’s that kind of stuff.
  • Yeah, and I remember there was this fascination with the idea of the informal economy about 10 years ago. Stewart Brand was talking about how brilliant it is that people get by in slums on an informal economy. He’s a friend so I don’t want to rag on him too much. But he was talking about how wonderful it is to live in an informal economy and how beautiful trust is and all that.
  • And you know, that’s all kind of true when you’re young and if you’re not sick, but if you look at the infant mortality rate and the life expectancy and the education of the people who live in those slums, you really see what the benefit of the formal economy is if you’re a person in the West, in the developed world.
  • So Kodak has 140,000 really good middle-class employees, and Instagram has 13 employees, period. You have this intense concentration of the formal benefits, and that winner-take-all feeling is not just for the people who are on the computers but also from the people who are using them. So there’s this tiny token number of people who will get by from using YouTube or Kickstarter, and everybody else lives on hope. There’s not a middle-class hump. It’s an all-or-nothing society.
  • the person who lost his job at Kodak still has to pay rent with old-fashioned money he or she is no longer earning. He can’t pay his rent with cultural capital that’s replaced it.
  • The informal way of getting by doesn’t tide you over when you’re sick and it doesn’t let you raise kids and it doesn’t let you grow old. It’s not biologically real.
  • If we go back to the 19th century, photography was kind of born as a labor-saving device, although we don’t think of it that way.
  • And then, you know, along a similar vein at that time early audio recordings, which today would sound horrible to us, were indistinguishable between real music to people who did double blind tests and whatnot.
  • So in the beginning photography was kind of a labor saving device. And whenever you have a technological advance that’s less hassle than the previous thing, there’s still a choice to make. And the choice is, do you still get paid for doing the thing that’s easier?
  • And so you could make the argument that a transition to cars should create a world where drivers don’t get paid, because, after all, it’s fun to drive.
  • 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?
    • anonymous
       
      I think that's a worthy question considering the high-speed with which we adopt every possible technology; to hell with foresight.
  • Of course jobs become obsolete. But the only reason that new jobs were created was because there was a social contract in which a more pleasant, less boring job was still considered a job that you could be paid for. That’s the only reason it worked. If we decided that driving was such an easy thing [compared to] dealing with horses that no one should be paid for it, then there wouldn’t be all of those people being paid to be Teamsters or to drive cabs. It was a decision that it was OK to have jobs that weren’t terrible.
  • I mean, the whole idea of a job is entirely social construct. The United States was built on slave labor. Those people didn’t have jobs, they were just slaves. The idea of a job is that you can participate in a formal economy even if you’re not a baron. That there can be, that everybody can participate in the formal economy and the benefit of having everybody participate in the formal economy, there are annoyances with the formal economy because capitalism is really annoying sometimes.
  • But the benefits are really huge, which is you get a middle-class distribution of wealth and clout so the mass of people can outspend the top, and if you don’t have that you can’t really have democracy. Democracy is destabilized if there isn’t a broad distribution of wealth.
  • And then the other thing is that if you like market capitalism, if you’re an Ayn Rand person, you have to admit that markets can only function if there are customers and customers can only come if there’s a middle hump. So you have to have a broad distribution of wealth.
    • anonymous
       
      Ha ha. Ayn Rand people don't have to admit to *anything,* trust me, dude.
  • It was all a social construct to begin with, so what changed, to get to your question, is that at the turn of the [21st] century it was really Sergey Brin at Google who just had the thought of, well, if we give away all the information services, but we make money from advertising, we can make information free and still have capitalism.
  • But the problem with that is it reneges on the social contract where people still participate in the formal economy. And it’s a kind of capitalism that’s totally self-defeating because it’s so narrow. It’s a winner-take-all capitalism that’s not sustaining.
    • anonymous
       
      This makes me curious. Is he arguing that there are fewer *nodes* because the information access closes them?
  • You argue that the middle class, unlike the rich and the poor, is not a natural class but was built and sustained through some kind of intervention.
    • anonymous
       
      My understanding was that the U.S. heads of business got the nod to go ahead and start manufacturing things *other* than weapons, because our industrial capabilities weren't anhialated (sp?) relative to so many others.
  • There’s always academic tenure, or a taxi medallion, or a cosmetology license, or a pension. There’s often some kind of license or some kind of ratcheting scheme that allows people to keep their middle-class status.
  • In a raw kind of capitalism there tend to be unstable events that wipe away the middle and tend to separate people into rich and poor. So these mechanisms are undone by a particular kind of style that is called the digital open network.
  • Music is a great example where value is copied. And so once you have it, again it’s this winner-take-all thing where the people who really win are the people who run the biggest computers. And a few tokens, an incredibly tiny number of token people who will get very successful YouTube videos, and everybody else lives on hope or lives with their parents or something.
  • I guess all orthodoxies are built on lies. But there’s this idea that there must be tens of thousands of people who are making a great living as freelance musicians because you can market yourself on social media.
  • And whenever I look for these people – I mean when I wrote “Gadget” I looked around and found a handful – and at this point three years later, I went around to everybody I could to get actual lists of people who are doing this and to verify them, and there are more now. But like in the hip-hop world I counted them all and I could find about 50. And I really talked to everybody I could. The reason I mention hip-hop is because that’s where it happens the most right now.
  • The interesting thing about it is that people advertise, “Oh, what an incredible life. She’s this incredibly lucky person who’s worked really hard.” And that’s all true. She’s in her 20s, and it’s great that she’s found this success, but what this success is that she makes maybe $250,000 a year, and she rents a house that’s worth $1.1 million in L.A.. And this is all breathlessly reported as this great success.
  • And that’s good for a 20-year-old, but she’s at the very top of, I mean, the people at the very top of the game now and doing as well as what used to be considered good for a middle-class life.
    • anonymous
       
      Quite true. She's obviously not rolling in solid gold cadillacs.
  • But for someone who’s out there, a star with a billion views, that’s a crazy low expectation. She’s not even in the 1 percent. For the tiny token number of people who make it to the top of YouTube, they’re not even making it into the 1 percent.
  • The issue is if we’re going to have a middle class anymore, and if that’s our expectation, we won’t. And then we won’t have democracy.
  • I think in the total of music in America, there are a low number of hundreds. It’s really small. I wish all of those people my deepest blessings, and I celebrate the success they find, but it’s just not a way you can build a society.
  • The other problem is they would have to self-fund. This is getting back to the informal economy where you’re living in the slum or something, so you’re desperate to get out so you impress the boss man with your music skills or your basketball skills. And the idea of doing that for the whole of society is not progress. It should be the reverse. What we should be doing is bringing all the people who are in that into the formal economy. That’s what’s called development. But this is the opposite of that. It’s taking all the people from the developed world and putting them into a cycle of the developing world of the informal economy.
  • We don’t realize that our society and our democracy ultimately rest on the stability of middle-class jobs. When I talk to libertarians and socialists, they have this weird belief that everybody’s this abstract robot that won’t ever get sick or have kids or get old. It’s like everybody’s this eternal freelancer who can afford downtime and can self-fund until they find their magic moment or something.
  • The way society actually works is there’s some mechanism of basic stability so that the majority of people can outspend the elite so we can have a democracy. That’s the thing we’re destroying, and that’s really the thing I’m hoping to preserve. So we can look at musicians and artists and journalists as the canaries in the coal mine, and is this the precedent that we want to follow for our doctors and lawyers and nurses and everybody else? Because technology will get to everybody eventually.
  • I have 14-year-old kids who come to my talks who say, “But isn’t open source software the best thing in life? Isn’t it the future?” It’s a perfect thought system. It reminds me of communists I knew when growing up or Ayn Rand libertarians.
  • It’s one of these things where you have a simplistic model that suggests this perfect society so you just believe in it totally. These perfect societies don’t work. We’ve already seen hyper-communism come to tears. And hyper-capitalism come to tears. And I just don’t want to have to see that for cyber-hacker culture. We should have learned that these perfect simple systems are illusions.
  • You’re concerned with equality and a shrinking middle class. And yet you don’t seem to consider yourself a progressive or a man of the left — why not?
  • I am culturally a man on the left. I get a lot of people on the left. I live in Berkeley and everything. I want to live in a world where outcomes for people are not predetermined in advance with outcomes.
  • The problem I have with socialist utopias is there’s some kind of committees trying to soften outcomes for people. I think that imposes models of outcomes for other people’s lives. So in a spiritual sense there’s some bit of libertarian in me. But the critical thing for me is moderation. And if you let that go too far you do end up with a winner-take-all society that ultimately crushes everybody even worse. So it has to be moderated.
  • I think seeking perfection in human affairs is a perfect way to destroy them.
  • All of these things are magisterial, where the people who become involved in them tend to wish they could be the only ones.
  • Libertarians tend to think the economy can totally close its own loops, that you can get rid of government. And I ridicule that in the book. There are other people who believe that if you could get everybody to talk over social networks, if we could just cooperate, we wouldn’t need money anymore. And I recommend they try living in a group house and then they’ll see it’s not true.
    • anonymous
       
      Group House. HAH!
  • So what we have to demand of digital technology is that it not try to be a perfect system that takes over everything. That it balances the excess of the other magisteria.
  • And that is doesn’t concentrate power too much, and if we can just get to that point, then we’ll really be fine. I’m actually modest. People have been accusing me of being super-ambitious lately, but I feel like in a way I’m the most modest person in the conversation.
  • I’m just trying to avoid total dysfunction.
    • anonymous
       
      See, now I like this guy. This is like the political equivalent of aiming for the realist view in geopolitics. We separate what is likely from what is unlikely and aim not for "the best" situation, but a situation where the worst aspects have been mitigated. It's backwards thinking that both parties would have a hard time integrating into their (ughhh) brand.
  • Let’s stick with politics for one more. Is there something dissonant about the fact that the greatest fortunes in human history have been created with a system developed largely by taxpayers dollars?
  • Yeah, no kidding. I was there. I gotta say, every little step of this thing was really funded by either the military or public research agencies. If you look at something like Facebook, Facebook is adding the tiniest little rind of value over the basic structure that’s there anyway. In fact, it’s even worse than that. The original designs for networking, going back to Ted Nelson, kept track of everything everybody was pointing at so that you would know who was pointing at your website. In a way Facebook is just recovering information that was deliberately lost because of the fetish for being anonymous. That’s also true of Google.
  • I don’t hate anything about e-books or e-book readers or tablets. There’s a lot of discussion about that, and I think it’s misplaced. The problem I have is whether we believe in the book itself.
  • Books are really, really hard to write. They represent a kind of a summit of grappling with what one really has to say. And what I’m concerned with is when Silicon Valley looks at books, they often think of them as really differently as just data points that you can mush together. They’re divorcing books from their role in personhood.
    • anonymous
       
      Again, a take I rarely encounter.
  • I was in a cafe this morning where I heard some stuff I was interested in, and nobody could figure out. It was Spotify or one of these … so they knew what stream they were getting, but they didn’t know what music it was. Then it changed to other music, and they didn’t know what that was. And I tried to use one of the services that determines what music you’re listening to, but it was a noisy place and that didn’t work. So what’s supposed to be an open information system serves to obscure the source of the musician. It serves as a closed information system. It actually loses the information.
    • anonymous
       
      I have had this very thing happen to. I didn't get to have my moment of discovery. I think Google Glass is going to fix that. Hah. :)
  • And if we start to see that with books in general – and I say if – if you look at the approach that Google has taken to the Google library project, they do have the tendency to want to move things together. You see the thing decontextualized.
  • I have sort of resisted putting my music out lately because I know it just turns into these mushes. Without context, what does my music mean? I make very novel sounds, but I don’t see any value in me sharing novel sounds that are decontextualized. Why would I write if people are just going to get weird snippets that are just mushed together and they don’t know the overall position or the history of the writer or anything? What would be the point in that. The day books become mush is the day I stop writing.
  • So to realize how much better musical instruments were to use as human interfaces, it helped me to be skeptical about the whole digital enterprise. Which I think helped me be a better computer scientist, actually.
  • Sure. If you go way back I was one of the people who started the whole music-should-be-free thing. You can find the fire-breathing essays where I was trying to articulate the thing that’s now the orthodoxy. Oh, we should free ourselves from the labels and the middleman and this will be better.I believed it at the time because it sounds better, it really does. I know a lot of these musicians, and I could see that it wasn’t actually working. I think fundamentally you have to be an empiricist. I just saw that in the real lives I know — both older and younger people coming up — I just saw that it was not as good as what it had once been. So that there must be something wrong with our theory, as good as it sounded. It was really that simple.
  •  
    "Kodak employed 140,000 people. Instagram, 13. A digital visionary says the Web kills jobs, wealth -- even democracy"
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