The Truth about Income in America

Most American's can't recognize their own face in a mirror. Pay attention at 1:50 in the video:



I love the fact that Dan Ariely designed the chart testing people's knowledge of their own society. He is a psychologist who looks at how you can use your understanding of your own irrational inner nature to help you be more rational. His books Predictably Irrational and The Upside of Irrationality are well worth reading.

The problem is that almost everybody has drunk the Kool-Aid of the right wing ideologues:

• government is the problem, not the solution


• work hard and you get ahead


• the problem with America is the welfare moms driving around in Cadillacs not the Wall Street Banks that got a $700 billion gift (bailout) from the taxpayers


• deregulate, deregulate, deregulate (which is exactly while the Wall Street banks blew up, why there was corruption in the dot.com era (Enron, Worldcom, Global Crossing), why the Savings & Loans blew up in the late 1980s, etc.


• the rich are "job creators" and you don't want to tax them


• trickle down economics is how you grow wealth (just wait for those rich to let the crumbs off their table shower down on your head)


• America is great because it is free, the land of opportunity (in fact it has less social mobility than almost any other country except the undeveloped dregs of the world)

PBS's 2009 Document "The Warming"

Here is the first of six chapters in PBS's documentary The Warning which was first shown in October 2009.

Watch the full episode. See more FRONTLINE.

This is an excellent review of how major players like Alan Greenspan, Lawrence Summers, Robert Rubin, and Arthur Levitt blocked the attempt by Brooksley Born to regulate the derivatives market, a market that rose to $60 trillion and burst in 2008 to create The Great Recession. AIG went bust because it backed so many derivatives and had no cash to cover them when the bet went wrong. The whole mess was a prefect example of why the right wing mantra of "deregulate, deregulate, deregulate" was dangerous. It also showed that the economic philosophy, so-called rational choice, is a utopian academic construction with no real relevance in the real world. It is a fine theory with wonderful math and allows for elegant models, but it is useless -- worse, it is misleading -- when applied to the real world.

I like the past in Chapter 2 which first establishes that Alan Greenspan had no interest in regulating and believed there could be no fraud because Wall Street and the banks are "big boys" who can look after themselves and handle risk. But the documentary shows how even in the early 1990s this blew up with derivatives at Bankers Trust. Despite this, the Clinton and Bush administrations allowed the bubble to grow bigger and to demolish even more regulations in their push to "deregulate, deregulate, deregulate".

This PBS documentary does a marvelous job of walking through the various bits of evidence that things were out of control and the economy was heading for rocky shoals of 2008. Watch all six of the chapters the PBS documentary The Warning.

Credo

Here is a bit from a statement of principles by Ross McKitrick. From his web site we get his statement about the WWF's Earth Hour:

I don't want to go back to nature. Travel to a zone hit by earthquakes, floods and hurricanes
to see what it’s like to go back to nature. For humans, living in "nature" meant a short life
span marked by violence, disease and ignorance. People who work for the end of poverty
and relief from disease are fighting against nature. I hope they leave their lights on.
Here in Ontario, through the use of pollution control technology and advanced engineering,
our air quality has dramatically improved since the 1960s, despite the expansion of industry
and the power supply. If, after all this, we are going to take the view that the remaining air
emissions outweigh all the benefits of electricity, and that we ought to be shamed into
sitting in darkness for an hour, like naughty children who have been caught doing
something bad, then we are setting up unspoiled nature as an absolute, transcendent ideal
that obliterates all other ethical and humane obligations. No thanks. I like visiting nature
but I don't want to live there, and I refuse to accept the idea that civilization with all its
tradeoffs is something to be ashamed of.

Count me in. I enjoy brief visits to "nature" but I don't want to be one of those half million in northern Japan having to forage for food and warmth and a place to sleep. I'm pretty sure that hundreds are dying each day because the "natural conditions" are just too harsh.

Explaining Why Some Firms are Big

The ecology of the business world is a logarithmic landscape of firms with lots of little companies, fewer middle-size companies, and a very few behemoths.

If you recall, over the last two decades, the same decades that glorified the EMH (Efficient Market Hypothesis) and globalization and small nimble firms that outsourced all but their essential operations, the world became a destablized place. I think all three phenomena are related, but I'm not an economics type so I have no evidence or real understanding. But here's my argument...

• EMH spread the lie that markets were optimal, that prices included all information, and nobody could do better in estimating real value than what the market price indicated. But this is an illusion as the 2008 stock market crash illustrates. A few who understood the enormous scale of fraud underlying the rise in liar loans and the sordid lies behind mortgage securitization foresaw the crash and made a fortune. The market price didn't "foresee" this. It did the famous Wily Coyote moment of going over the cliff, looking down, seeing there was no ground beneath it, and fell.


• Globalization spread the lie that the best market was an international market that gave everybody a chance to enhance their comparative advantage. But the disorderly collapse of internal labour markets as work was outsourced and the lie of equal and fair access to markets as demonstrated by the continued manipulation of market that exclude third world countries from fair access to developed world markets put the lie to this idealization.


• Outsourcing is built on the lie that you can spin off the "non-essential" parts of your business and focus on just those key bits where your intellectual property and business prowess are maximized. But as the following post from Krugman shows, that is a lie.

All three are lies based on utopian social thinking. During the revolutionary 19th century so many insurgencies went haywire because of utopian thinking. The utopianism of Communism's central planning was the bane of 20th century economies. The three examples I cite above are examples of late 20th century/early 21st century utopianism that have destabilized the economic future of billions of people.

Here is a post by Paul Krugman looking at the disaster that the Dreamliner has been for Boeing:

Thank You, Boeing

For providing such a clear illustration of the forces driving the theory of the firm.

Oliver Williamson shared the 2009 Nobel mainly because of his work on a question that may seem obvious, but is much less so once you think about it: why are there so many big companies? Why not just rely on markets to coordinate activity among individuals or small firms? Why, in effect, do we have a lot of fairly large command-and-control economies embedded in our market system?

Williamson answered this in terms of the difficulties of writing complete contracts; when the tasks that need to be done are complex, so that you can’t fully specify what people should do in advance, there can be a lot of slippage and strategic behavior if you rely on market incentives; in such cases it can be better to do these things in-house, so that you can simply tell people to do something a particular way or to change their behavior.

In Boeing’s case, they outsourced far too much, only to find that they were getting parts that didn’t do what they were supposed to — and also to find that the subcontractors were seizing a lot of the rents. They discovered, in effect, that there are times when it’s better to rely on central planning than to leave things up to the market.

Obviously this isn’t always true. There’s a tradeoff. But that’s the point — and it’s this tradeoff that determines how big firms should be. Boeing has now provided a clear motivating example. Their loss, the economics profession’s gain.

Go read the original post by Krugman to get the embedded links.

I always enjoy Krugman's ability to clearly get across an insight into economics. Here he points out that Boeing's failure with outsourcing demonstrates why you have big firms. There is a cost to trying to realize the idealization of "efficiencies" like outsourcing (or, as I would claim, the "efficiencies" of EMH or globalization). So for real world reasons, some firms get big so they don't have to deal with the hard reality of writing a contract that can spell out all the expectations of a collaboration between two firms.

Excellent post by Krugman. It makes a person think and understand and connect dots and get a better picture of the world.

And here's a relevant detailed bit on exactly what Boeing did wrong. From an article in the LA times:

787 Dreamliner teaches Boeing costly lesson on outsourcing

The airliner is billions of dollars over budget and about three years late. Much of the blame belongs to the company's farming out work to suppliers around the nation and in foreign countries

The 787 has more foreign-made content — 30% — than any other Boeing plane.... That compares with just over 5% in the company's workhorse 747 airliner. Boeing's goal, it seems, was to convert its storied aircraft factory near Seattle to a mere assembly plant, bolting together modules designed and produced elsewhere as though from kits. The drawbacks of this approach emerged early. Some of the pieces manufactured by far-flung suppliers didn't fit together. Some subcontractors couldn't meet their output quotas, creating huge production logjams when critical parts weren't available in the necessary sequence. Rather than follow its old model of providing parts subcontractors with detailed blueprints created at home, Boeing gave suppliers less detailed specifications and required them to create their own blueprints. Some then farmed out their engineering to their own subcontractors, Mike Bair, the former head of the 787 program, said at a meeting of business leaders in Washington state in 2007. That further reduced Boeing's ability to supervise design and manufacture. At least one major supplier didn't even have an engineering department when it won its contract, according to an analysis of the 787 by the European consortium Airbus, Boeing's top global competitor.

Boeing executives now admit that the company's aggressive outsourcing put it in partnership with suppliers that weren't up to the job. They say Boeing didn't recognize that sending so much work abroad would demand more intensive management from the home plant, not less. "We gave work to people that had never really done this kind of technology before, and then we didn't provide the oversight that was necessary," Jim Albaugh, the company's commercial aviation chief, told business students at Seattle University last month. "In hindsight, we spent a lot more money in trying to recover than we ever would have spent if we tried to keep many of the key technologies closer to Boeing. The pendulum swung too far."...

That's not to say that outsourcing never makes sense — it's a good way to make use of the precision skills of specialty manufacturers, which would be costly to duplicate. But Boeing's experience shows that it's folly to think that every dollar spent on outsourcing means a cost savings on the finished product.Boeing can't say it wasn't warned. As early as 2001, L.J. Hart-Smith, a Boeing senior technical fellow, produced a prescient analysis projecting that excessive outsourcing would raise Boeing's costs and steer profits to its subcontractors. Among the least profitable jobs in aircraft manufacturing, he pointed out, is final assembly — the job Boeing proposed to retain.

Utopian thinking is dangerous. Boeing is an object lesson in extreme optimism born of a utopianism derived from the three points made above.

Extreme pessimism is dangerous, but utopianism is an example of extreme optimism and it too is dangerous. As I watch the spreading demonstrations and revolutions in the Middle East my mind is brought to think about utopianism. These upsurges are based on an optimism that fundamental social change can be achieved quickly and easily. Unfortunately, I don't think so. I'm happy with the revolts and the overthrow of tyrants. But the people are fooling themselves if they think that social revolution is an easy thing.

Already in Egypt it is clear that the military is working from a different "playbook" than the demonstrators. They still haven't released all political prisoners, they are not laying out a path to effective democracy, they have not quickly included civilians in the instutions and created transitional organizations. Instead we are hearing echos of Obamas "security and stability" calls with the military in Egypt calling for an end to all strikes and the people to abandon the only tool they have: demonstrations. The path forward in Egypt is unclear. I remain hopeful, but the number of "worrying signs" increases daily.

Scott Adams is "Out to Lunch"

I usually enjoy posts by Scott Adams, creator of the cartoon Dilbert, on his blog. But from time to time he lets his idiotic "libertarian" silliness slip out. Today he has posted something outrageous. It simply misunderstands democracy. It shows an idolatry of "corporations" which is odd coming from the cartoonist who lampoons the idiocy of big companies:

Freedom of Data

You and I learned in school that freedom of speech is a fundamental right that all people should enjoy. There's a practical reason for that. Without freedom of speech, governments and other moneyed interests would be in a position to abuse their power even more than they already do. And obviously voters need uncensored information in order to shape their government. Democracy only works when citizens and the media enjoy freedom of speech.

But what if freedom of speech is only a benefit in a democratic system?

China's system, as I have written before, reminds me more of a corporate structure, or a meritocracy. In a corporation, you're generally free to disagree with higher ups if you do it with data, and in a professional manner. Usually you need to go through proper channels, but dissent is generally allowed, and sometimes actively encouraged. If you're a jerk about your disagreement with your superiors, or you don't have persuasive data to back up position, you could get fired. But that's a stupidity issue, not a freedom issue.

China's leadership is packed with engineers and lawyers by training. I imagine that like any corporation, they appreciate the value of information when presented in a professional manner, and through proper channels. Unlike elected politicians, managers in a meritocracy are free to change position as new or better data emerges. The advantage of having only one political party is that everyone is on the same team. And if effectiveness is the goal, which apparently it is in China, I assume that new data is generally welcome.

An American politician is likely to lose his next election if he "flip flops" on an issue, even if the reason for the change is that new information has emerged. In that environment, practical politicians simply take the position that their party has established, confident that the free media will present both sides of every argument regardless of where the data leads. A free press has the perverse effect of increasing the volume of information while simultaneously reducing its usefulness.

A free press is also a huge distraction. I would imagine that at least half of all the time and effort our elected officials put into their jobs has something to do with managing the media. Compare that to a corporate system in which managers are also concerned with image, but they focus most of their energy on getting the job done. I imagine that Chinese leaders have a similar freedom to act in accordance with data. And I imagine they spend little or no time worrying about how the media will treat them, since they control it.

What about the jailing of dissidents in China? On a human level, it certainly feels wrong to imprison someone simply for speaking out. It feels even more wrong when the dissident's only goal is to improve the lives of his or her fellow citizens. And it seems pure evil if the dissident has valid criticisms.

But what if the dissidents themselves are the ones who have it wrong? Suppose a dissident is stirring up public emotions in a direction that could be detrimental to the interests of a billion fellow citizens? Suppose, for example, the dissident is agitating for freedom of speech, a right that would be fitting for a democracy, but would be nothing but trouble - perhaps serious trouble - in the Chinese system. In that case, should the Chinese leadership value the freedom of this one individual over the wellbeing of a billion others? What would Spock say?

I'd like to be perfectly clear that I know almost nothing about the Chinese system, and absolutely nothing about any particular dissidents. My emotional reaction is that no one should be in jail for voicing an opinion. But the rational side of me doesn't have any data to support the notion that the Chinese people would be better off with complete freedom of speech, especially since we know that free speech encourages leaders to ignore data.

America has freedom of speech. China has freedom of data. Where do you place your bet?

Why is the above outrageous? Because it presents an idiotic idolization of corporations as benevolent, efficient, rational institutions. But his cartoons work because they poke fun at the incompetence and stupidity of organizations. In the above post he makes this completely ridiculous claim:

The advantage of having only one political party is that everyone is on the same team.

That doesn't pass the laugh test. Anybody who has worked inside a corporation knows that there is palace intrigue going on all the time with factions trying to topple to boss at the top. Even when they aren't out to get the boss, the incentive system in most corporations means that divisions will sabotage each other so they will "look better" at year end and get the big bonuses. People don't cooperate if they can see a way to chop off a competitor at his knees!

Tell the Tunesians that "having only one political party" is an advantage. They has a dictator at the top that made sure everybody was on the same "team". It was a team dedicated to looting the country. Worse, most governments are not "unified". Like all human institutions they are riven by rivalries and filled with incompetents. We are lucky that this was especially true of the Nazis, otherwise we would all be living under Scott Adams's ideal of a "competent" corporate overlord, our Fuhrer.

The point of "freedom of speech" is not to ensure that only highly educated, mentally competent, well organized people get to comment. It is a mechanism to allow those at the bottom of society to blow off steam and give warning signals to the elites that they are about to blow and that the elites better do something to make life for the oppressed a little easier or they could find their heads in a guillotine. Freedom of speech is the mechanism to assure what Winston Churchill saw as the strength of democracy:

Many forms of Government have been tried and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.

Democracies are messy. They drive rationalists to despair. Surely there is some better "more rational" way to organize society. But the problem is that whatever organization you come up with, the guys at the top get power and power corrupts. You need a mechanism to let the oppressed to peacefully overthrow the corrupt elite. The best mechanism. A very weak and irrational and unpredictable mechanism is democracy. With the vote you can "throw out the bums". In Tunesia, you spend years rotting under a corrupt regime until some tragic even like Mohamed Bouazizi's suicide sparks protests, clashes, and deaths that finally force out the corrupt elite. This report from the NY Times:

The antigovernment protests began a month ago when a college-educated street vendor named Mohamed Bouazizi in the small town of Sidi Bouzid burned himself to death in despair at the frustration and joblessness confronting many educated young people here. But the protests he inspired quickly evolved from bread-and-butter issues to demands for an assault on the perceived corruption and self-enrichment of the ruling family.

The protesters, led at first by unemployed college graduates like Mr. Bouazizi and later joined by workers and young professionals, found grist for the complaints in leaked cables from the United States Embassy in Tunisia, released by WikiLeaks, that detailed the self-dealing and excess of the president’s family. And the protesters relied heavily on social media Web sites like Facebook and Twitter to circulate videos of each demonstration and issue calls for the next one.

...

In his last days Mr. Ben Ali cycled through a series of attempts to placate the protesters, firing his interior minister, pledging a corruption investigation, promising new freedoms and a resignation at the end of his term in 2014, and finally dismissing his whole cabinet.

But his promises did no more than the bullets or tear gas to dissuade the protesters from taking to the streets. After hearing Mr. Ben Ali promise in a televised address on Thursday night to stop shooting demonstrators, crowds began to gather outside the Interior Ministry along Bourguiba Boulevard early Friday morning. And when it became clear that the police were standing idle on sidelines, several thousands more joined them, a largely affluent crowd including doctors, lawyers, young professionals and others who said they had never protested before.

For the first time in the month of protests, large numbers of young women joined the crowd, almost none wearing any form of Islamic veil.

Many, accustomed to living under one of the region’s most repressive governments, were both excited and uneasy about their new sense of freedom. “We are too many now, we are too big, it is more difficult to silence us,” one woman said, grinning. “But for us it is new to talk. We are still a little bit scared,” she added, declining to give her name.

Democracy is a much, much, much better way to change corrupt governments.

But Scott Adams has shown himself to be an idiot by idolizing the Communist regime in China as the "way of the future". Well, I only hope that Scott Adams moves there to enjoy the "benefits" of that society with its block watches, its imprisonment with anybody or anything -- including religions -- that the ruling elite thinks threatens them. It would be appropriate for Adams to take up residence there only to find that the "leadership" doesn't approve of cartoons and he finds himself in prison for life for his "violation of social order". He would have years and years to appreciate the glories of efficient "corporatist" government in China.

OK... I realize that Scott Adams probably only wrote the above post to provoke people like me. He probably doesn't believe what he says. He has done it to simply "stimulate" discussion. But the problem I see is that too many people idolize Scott Adams and can't recognize a simple ploy to get attention and mistakenly assume that it is truly and honestly well thought out and a sincerely held view. It isn't. It is the morning hiccup from a cartoonist -- a libertarian cartoonist -- who fails to appreciate the deep roots of democracy and the utter failure of utopian dreams of "rationalizing" society. The 19th and 20th century are littered with the bodies of something like 200 million victims of "rational" utopian politics from the Nazis, Communists, Fascists, to bloody dictators like Saddam Hussein and petty tyrants in the US like Huey P. Long, Tammany Hall, Father Coughlin, the Chicago Democratic machine, Tom Pendergast's Democratic machine, etc.

It is so easy to assume that there is a "sugar daddy" out there who really, really wants to take care of you, give you good things, and removes all of life's burdens from your shoulders. But it isn't true. Democracy is messy, ugly, and a continuous struggle. But it is the only form of government that over the long haul gives the greatest good to the greatest number of people. It isn't perfect. But it is better than the rest, even the over-heated imagination of an "ideal" society by Scott Adams.

Drug Trip

From BoingBoing here is a video from the this "research":

Here's some rare footage of an experimental LSD session that I came across doing research for my next book... It's from a television program, circa 1956, about mental health issues. The researcher, Dr. Sidney Cohen, was dosing volunteers at the Veteran's Administration Hospital in Los Angeles.

This was the "snake oil" that Timothy Leary and Richard Alpert of Harvard University were selling back in the mid-1960s. I remember that as a high school student in 1964 reading an article in Scientific America that talked about this "LSD research". This drug ruined so many lives. It gutted the anti-war movement as people decided to "tune in, turn on, and drop out". This drug passivity is what allowed Nixon to walk in and take over and turn the US on the right wing political path it has been ever since. The anger of the working class and middle class over youth throwing away their lives helped fuel a mindless lurch to the right as they tried to clamp down on the indiscretions of youth. The "war on drugs" didn't fix the problem.

You don't solve social problems by legal fiat. It requires a moral commitment on the part of the overwhelming majority to change the heart of a people. The anti-war violence of the late 1960s gave way to the apathy and bizarre drug cults and "self discovery" nonsense of the 1970s. Meanwhile the socially conservative movement got in lockstep and decided to deny modernity by harking back to fundamentalist Christian values. Their fear of change drove them into a fiercely held radical conservatism. Rather than constructively engage in a dialog about facing the future and making the necessary social adjustments to better deal with the future, these people simply rejected it. And so the "culture wars" started.

I have no love for the radical left. They were nuts. They embraced more causes than they had fingers and toes and made a mess of all of them. These people simple-mindedly embraced the outsider and the criminal. They willingly encouraged social dissolution.

I have no love for the radical right. They were fanatics who refused to confront reality. They wanted to press everybody into a cookie-cutter mold whether it fit or not. They had no empathy of the outsider or those who were "different".

Dealing with the real world is really rough. It takes courage. It takes patience. It take subtlty. And it take the long haul. It can't be done in a sound bite. It can't be done with political slogans. And it can't be force marched into existence. It has to come from the ground up. It has to come from people feeling in their guts a common bond and a need to come together to put the society on a sound foundation. In the US it happened in 1776 with a Declaration and in 1787 with a Constitution and in 1862 with a Proclamation and in 1941 with Four Freedoms.

Kevin Kelly's "What Technology Wants"

This is a "breathless with excitement" book. Kelly tries to present himself as a sober assessor of the role of technology and our relationship with it. But in reality, this is like walking into a big toy story with a 5 year old. Kelly is all atremble and all aglow with his excitement over technology. I share that. But Kelly goes quite a bit further than I would. He see "the technium" as he calls it, a seventh kingdom of life to place up there with the standard six kingdoms. That will surprise a lot of people. But it gives you a clue of how deep his enthusiasm runs.

The book is full of delightful facts. For those who love to sneak a peek at the width and depth of human knowledge, this book is a good one. It is full of interesting facts about technology, humans, history, and speculations. You won't be disappointed with this book. My interest didn't lag. I confess that about three-quarters of the way through I blinked and realized that Kelly was more of an academic than I realized. He is in love with his ideas. But his feet aren't always on the ground. My realization came with chapter ten (of fourteen) entitled "The Unabomber was Right".

As I read that chapter I realized that Kevin Kelly was an academic. He worries with his argument like a dog with a bone. But he fails to show the one concern which is most basic: the Unabomber never showed any concern for people. He developed his "manifesto" dealing with abstractions about technology and "people" but never about any flesh-and-blood person. Kelly does the same with his treatment of this "argument" from the Unabomber. My view is that you don't waste your time "arguing" with a madman. The Unabomber was lashing out at his own shortcomings and using the world as his whipping post. The Unabomber showed no care for humans.

Kelly is right to point out the deep hypocrisy of the Unabomber in "getting away from it all" but depending on the outside world to feed him. The bit about riding his bike to the little town to rent a car and drive to the city to stock up on supplies is perfect. Here's a guy who hates "the system" but rather than really go out in the woods and do it all for himself, he is hiding out in the woods and using civilization to feed, cloth, and entertain himself (I'm thinking of the shelf of books in his cabin).

I get really tired of anti-modernism. Kelly points out the fatal flaw in all of them: they are like Thoreau, they rhapsodize about their little lake in the woods, but in reality they never cut loose of society and the technological goodies. They simply don't face up to the fact that if you give up technology you will die, alone, cold, and starving. You have to go back to pre-pre-humans to find any creature in our lineage who didn't use technology.

Here's a taste of the Kelly in one of his flights of rapture:

The conflict that technium triggers in our hearts is due to our refusal to accpet our nature -- the truth is that we are continuous with the machines we create. We are self-made humans, our own best invention. When we reject technology as a whole, it is a brand of self-hatred.

"We trust in nature, but we hope in technology," says Brian Arthur. That hope lies in embracing our own natures. By aligning ourselves with the imperative of the technium, we can be more prepared to steer it where we can and more aware of where we are going. By following what technology wants, we can be more ready to capture its full gifts.

I don't buy into his anthropomorphizing technology. It is lifeless. It is just the stuff we have created and use. It doesn't have a life of its own as a "seventh kingdom". If we have a nuclear winter tomorrow, that is it for us and for the technology. If we have a sudden religious revival and all go "back to the country" then technologies dies. It has no life outside of us.

The one place where I am willing to give it some life is as we develop autonomous tools. But sixty years ago Alan Turing was arguing that our computers could emulate us. He thought they would in maybe 20 years. They haven't yet. The AI folks keep telling us "20 years" just like the fusion energy folks for 50 years have been tellingus "20 years" and it will happen.

I believe there is a future with intelligent machines. But it much more likely that it is 100 years out and not 20 years out. It might even be 500 years out. There is no serious science of intelligent matter. There's a computer "science" of AI and algorithms. But that is light years from a thinking machine able to hold an intelligent conversation.

Here's Kelly getting mystical again, but this I do agree with:

Unlike the Amish and minimites, the tens of millions of migrants headed into cities each year may invent a tool that will unleash choices for someone else. If they don't then their children will. Our mission as humans is not only to discover our fullest selves in the technium, and to find full contentment, but to expand the possibilities for others. Greater technology will selfishly unleash our talents, but it will also unselfishly unleash others: our children, and all children to come.

Compare that to this over-the-top anthropomorphic version:

So what does technology want? Technology wants what we want - the same long list of merits we crave. When a technology has found its ideal role in the world, it becomes an active agent in increasing the options, choices, and possibilities of others. Our task is to encourage the development of each new invention toward this inherent good, to align it in the same direction that all life is headed. Our choice in the technium -- and it is a real and significant choice -- is to steer our creations toward those versions, those manifestations, that maximize that technology's benefits, and to keep it from thwarting itself.

I enjoyed the book, but I don't take it that seriously. It is more poetry than science. It is a visionary cutting lose with a riff that is his fantasy.

The chapter on the Unabomber is where I turned on Kelly. To waste time on the "manifesto" of a homicidal narcissist was too much. The poetry lost its shimmer in that chapter. And the fact that Kelly didn't realize that he was following the Unabomber into the airy-fairy world of abstract "causes" without any humanity really bothered me. I'm sure Kevin Kelly is a nice enough guy, but to buy into arguments about abstract nouns when killing and maiming of real flesh-and-blood people is invoved. That's just too much for me. I part company from Kelly at that point. The book lost its poetry at that point. After that I became obsessed with seeing the ridiculous generalizations in Kelly's arguments. I couldn't get back to the poetry.

How to Make a Miniature World

According to Charlie Stross, the science fiction writer, you really can't do it. It is a wild-eyed dream of fanatics who want to crawl back into a "simpler" past, especially one where they would be the overlords. Here's the starting bit of a fascinating post on Charlie Stross's blog Charlie's Diary:

There's a deceptively simple question that's been bugging me this week, and it is this:

What is the minimum number of people you need in order to maintain (not necessarily to extend) our current level of technological civilization?

There are huge political ramifications hiding behind this question. Let me unpack them for you.

Conservative politicians in the US — and elsewhere — get a lot of mileage from appeals to false nostalgia, to a yearning for a time when things were simpler, everyone was sturdily self-sufficient or knew their place (or both), and government was small (sometimes small enough to drown in a bathtub). Nostalgia trips manifest themselves in all sorts of curious places. In SF (the literary field I know most about) we have the perennial libertarian/space colonization nexus.We have Ayn Rand, and her wish-fulfilment nerd fantasy of a world sustained by a tiny, overworked minority of geniuses who, if only they could demand a level of rewards corresponding to their work, would be rich beyond dreams of avarice (and able to make the trains run on time). Outside it, we have the peculiarly rustic aspirations of the green fringe, who'd like to see a world of five million or so pre-industrial humans living in harmony with nature. In the Republican party of the United States we see rhetoric couched in hatred for "big government", and among the UK's conservatives we see an almost masochistic addiction to cuts in public spending framed with calls for a big society in which many current government services will be delivered by voluntary citizens groups instead.

I think these ideas are mostly delusional because they rely on a fundamental misapprehension about the world around us — namely that we live in a society that can be made simple enough to comprehend.

Robert Conquest's "Reflections on a Ravaged Century"

This is an excellent book that reviews the horrors of the 20th century, the wrack and ruin of competing ideologies of left and right, Communism and Fascism.

He poses the critical question at the very start of the book:

The huge catastrophes of our era have been inflicted by human beings driven by certain thoughts. And so history's essential questions must be:

How do we account for what has been called the "ideological frenzy" of the twentieth century? How did these mental aberrations gain a purchase? Who were the Typhoid Marys who spread the infection?

His book argues for moderation, a threading of a path between left and right taking the best from both, but no falling prey to the idealized versions used by these factions to mobilize populations into totalitarian states. He argues for realism over idealism.

Chapter 3 looks at Marxism:

Marx was seen, and saw himself, as "the Darwin of society": as the originator of a historical science to match Darwin's biological science. He provided his certainties in terms of proven theory. The contract betwwen his own and Darwin's methods is very striking, and indeed Marx saw this himself -- referring rather patronizingly to Darwin's "crude English empiricism." By this he meant no more than the perfectly true circumstand that Darwin accumulated facts before developing his theory, as against the supposedly superior method Marx derived from his German academic background, of inventing the theory first and then finding the facts to support it.

In this chapter he has a number of zingers to expose Marxism for the bankrupt theory that it was:

Marx derived all the evils of "capitalism" -- alienation, exploitation, crises, etc. -- from "commodity" production, that is, from the market system. In fact, the whole history of the USSR testifies to a refusal to face the fact that a complex modern economy cannot operate without a market mechanism. Wehy (even leaving aside economic common sense) Marx thought that a bureaucrat's decision was less alienating than the "unplanned" play of market forces is not clear.

And this:

... Lenin saw history was not behaving in accordance with Marxist theory, so he decided to force it to do so by subjective effort [a revolution directed by an 'elite cadre' on behalf of the slumbering proletariat], like some phrenologist finding one of his subjects lacking the right bumps and producing them by clouting him on the head.

Chapter 4 looks at totalitarianism:

It has always, even in ancient times, been difficult to remove the leadership of a state. But at least until recently, it was uncommon for a state to be able to ignore, or run wholly contrary to, all economic, social and intellectual trends. The modern totalitarian state suffered few of these limitations.

...

Totalitarianism is, as Leonard Schapiro notes, "a post-democratic phenomenon," arising in the age of nations and nation-states, the emergence of mass society, "the age of the legitimation of power by a democratic formula," as with other aspects of the modern age, until it became technically possible to control an entire society and eventually to pervade it fully with the regime's propagandas and its terrors.

Chapter 6 looks at the USSR:

It can hardly be maintained that Communisms was no more than a continuation of Russian history. Tsarism may have been the most repressive regime in Europe, but if we take the total executions from 1860 to 1914 (mostly of genuine terrorists in 1905-10) and add in all the other victims of civil repression such as the pogroms, we can hardly reach a figure of twenty thousand odd. The current estimate for excutions along in the two-year period 1937-38 is just under 2 million. In terms of the dialectic, this is surely an overwhelming case of the quantitative becoming the qualitative. And indeed, Lenin's regime was already more violently repressive than anything seen for centuries.

I find the above as particularly relevant. Similar to the claims by Communists of an "oppressive" Tsar which justified the gulag in which tens of millions died, the "Islamic Republic" of Iran complained bitterly of the hundreds of deaths under the Shah and his secret police while the ayatollahs have not killed hundreds of thousands in the name of their "revolution".

Chapter 7 looks at how western intellectuals were duped by Communist propaganda. This is relevant for today because all countries manipulate media and "public opinion" to reinforce their power.

Chapter 8 examines the origin of the Cold War and points out it started well before the West was even aware of the manipulations by Stalin.

Chapter 9 looks at how the USSR, even in terminal decay, manipulated Western opinion.

Chapter 10 looks at the rocky situation on post-Soviet eastern Europe and the USSR:

The "creation" of a market economy is, however, to a great extent a misleading concept. Market economies have emerged rather than been decreed. Socialist economies are, of course, consciously set up by the state. The problem in Eastern Europe was to set up the conditions under which a market economy could come into being. First, naturally, the rule of law -- in principle a simple thing, in practice not so.

It is not as if a country can, as it were, be put in dry dock and equipped with new institutions in a careful and considered way. The whole venture is more like trying to reequip a ship at sea, in stormy waters, with a new engine.

Chapter 11 looks at cultural values and attitudes. It has some gems of wisdom. Here's a taste, the opening section:

"Western" political cultgure implies nothing remotely resembling perfection, or even perfectibility. On the contrary, we can only look on it as the best and most hopeful arrangement available to us in the world of reality and enormously superior to its competitors past and present.

All real societies contain greed, power mania, sloth, incompetence, paranoia. All societies contain special interests, not only material one but emotional ones too. And it may not be going to far to say that every onsensual society experiences cycles of degeneration from which, when the results become clear, it pulls up sharply, often at the last moment -- or fails to do so.

So the free society itself should not be Ideified: it is a system of compromise between the individual and the community, between the population and the state. This endlessly generates fricion, myopia, corruption, faction, and perhaps always will. Nor shall we ever have politicians who understand every problem, who have appropriate plans for solving them, and who are able to put those plans into effect.

Meanwhile, many of our present-day problems arise from, or are greatly worsened by mental attitudes that, though not usually ideological in the totalitarian sense, show a family resemblance. That is to say they are usually the result of giving if not absolute, at any rate excessive, status to political or other concepts.

Chapter 12 attacks the shortcomings of "modern" education:

It has often been said that the "answer" to most problems is "education."

But it is obvious that a high level of education in a general sense has often failed to protect twentieth-century minds from homicidal, or suicidal aberrations. As we have seen, these have often been generated by men of high educational standing. And it has often been in colleges and universities that the bad seeds first bore fruit.

This analysis is especially relevant given that Al Qaeda has an inordinate amount of college educated -- mostly engineering students -- at its heart.

In Chapter 12 Conquest skewer's Robert McNamara, the "architect" of the Vietnam war:

An outstanding example of the failure of academic and theoretical expertise was to be found in Robert McNamara's conduct of the Vietnam War. In his recent apologia, he says that he failed to understand nationalism. No, what he failed to understand was Communism (though he no doubt misunderstood nationalism, too). He had no real idea of the motivations of the leadership on the "other side of the hill," that traditional essential to sound strategy. Bertram Wolfe, who worked with Ho Chi Minh in the Comintern in Paris in the 1920s, once told me that Ho never mentioned his home country: we was an international apparatchik with purely Leninist attitudes.

But McNamara's central error, which he still does not seem to understand, was that he undertook a responsibility ... for which he was totally unqualified.

Technological Utopians

Malcolm Gladwell has written an excellent article in the New Yorker which attacks technological utopians: people who think we are on the verge of paradise because technical advances are going to drastically reduce the cost of some item.

Mostly the book is an attack on Chris Anderson and his new book Free: The Future of a Radical Price. But this bit givves you a better feel for the thrust of Gladwell's argument. In this bit Gladwell takes a step back and looks at an older utopian claim (one which I remember from my youth and was lured into youthful daydreaming about) to show how foolish it was:

Anderson begins the second part of his book by quoting Lewis Strauss, the former head of the Atomic Energy Commission, who famously predicted in the mid-nineteen-fifties that “our children will enjoy in their homes electrical energy too cheap to meter.”

“What if Strauss had been right?” Anderson wonders, and then diligently sorts through the implications: as much fresh water as you could want, no reliance on fossil fuels, no global warming, abundant agricultural production. Anderson wants to take “too cheap to meter” seriously, because he believes that we are on the cusp of our own “too cheap to meter” revolution with computer processing, storage, and bandwidth. But here is the second and broader problem with Anderson’s argument: he is asking the wrong question. It is pointless to wonder what would have happened if Strauss’s prediction had come true while rushing past the reasons that it could not have come true.

Strauss’s optimism was driven by the fuel cost of nuclear energy—which was so low compared with its fossil-fuel counterparts that he considered it (to borrow Anderson’s phrase) close enough to free to round down. Generating and distributing electricity, however, requires a vast and expensive infrastructure of transmission lines and power plants—and it is this infrastructure that accounts for most of the cost of electricity. Fuel prices are only a small part of that. As Gordon Dean, Strauss’s predecessor at the A.E.C., wrote, “Even if coal were mined and distributed free to electric generating plants today, the reduction in your monthly electricity bill would amount to but twenty per cent, so great is the cost of the plant itself and the distribution system.”

This is the kind of error that technological utopians make. They assume that their particular scientific revolution will wipe away all traces of its predecessors—that if you change the fuel you change the whole system. Strauss went on to forecast “an age of peace,” jumping from atoms to human hearts. “As the world of chips and glass fibers and wireless waves goes, so goes the rest of the world,” Kevin Kelly, another Wired visionary, proclaimed at the start of his 1998 digital manifesto, “New Rules for the New Economy,” offering up the same non sequitur. And now comes Anderson. “The more products are made of ideas, rather than stuff, the faster they can get cheap,” he writes, and we know what’s coming next: “However, this is not limited to digital products.” Just look at the pharmaceutical industry, he says. Genetic engineering means that drug development is poised to follow the same learning curve of the digital world, to “accelerate in performance while it drops in price.”

But, like Strauss, he’s forgotten about the plants and the power lines. The expensive part of making drugs has never been what happens in the laboratory. It’s what happens after the laboratory, like the clinical testing, which can take years and cost hundreds of millions of dollars. In the pharmaceutical world, what’s more, companies have chosen to use the potential of new technology to do something very different from their counterparts in Silicon Valley. They’ve been trying to find a way to serve smaller and smaller markets—to create medicines tailored to very specific subpopulations and strains of diseases—and smaller markets often mean higher prices. The biotechnology company Genzyme spent five hundred million dollars developing the drug Myozyme, which is intended for a condition, Pompe disease, that afflicts fewer than ten thousand people worldwide. That’s the quintessential modern drug: a high-tech, targeted remedy that took a very long and costly path to market. Myozyme is priced at three hundred thousand dollars a year. Genzyme isn’t a mining company: its real assets are intellectual property—information, not stuff. But, in this case, information does not want to be free. It wants to be really, really expensive.

Go read the whole article. It is typically delightful Malcolm Gladwell, i.e. thought provoking and very interesting.

For a slightly different take on the Chris Anderson/Malcolm Gladwell argument. Here is a blog entry by Matthew Yglesias:

Where Anderson goes off the rails is in his suggestion that this “give it away” business model is actually a promising business model. Gladwell demolishes some of Anderson’s examples, but the problem with Anderson’s argument is completely theoretical. The convergence to marginal cost of production is predicated on the idea that you’re operating in a highly competitive marketplace. But the thing about operating in a highly competitive marketplace is that it’s impossible to make tons of money by doing this.

...

Consider the case of YouTube, which Anderson labels a quintessential example of Free. Gladwell points out that YouTube actually loses money—it’s a terrible business. But what’s really noteworthy about YouTube, to me, is that as it exists it’s actually competing with several other, also Free, also money-losing video services. But since Google as a whole can easily afford to cover YouTube’s losses, it’s hard to see the percentage for Google management in shutting down a market-leader, or in destroying its position by trying to charge people to use it. But conceivably YouTube will just operate indefinitely as a money-losing subsidiary of a large profitable firm. And since it’s there losing money but not going out of business, it will probably be impossible for any competitors to ever beat it. And if YouTube does go out of business some new money-losing free video site will become the market leader as long as there’s some investor out there somewhere who believes, wrongly, that he’s smart enough to figure out a way to make money out of this thing. Meanwhile, as the underlying technology gets cheaper the scale of the losses should get smaller, making it ever-more-realistic to run the business at a loss and thus ever-less-likely that the money-losers will be driven out of the market and create the possibility for monopoly rents.

That’s the real lesson of Free. The combination of competition, the near-zero marginal cost of production, and the psychological significance of the zero bound means that the market-leader in video is bound to lose money. To win the market, you need to make your product Free. But while your marginal cost is near-zero, it’s not actually zero, so you’re losing money.