18 September 2020

In Praise of the First Amendment - The Social Invention That Generates New Social Inventions

The first amendment is among the great inventions of history.

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

It has five parts:
1. Freedom of religion or belief
2. Freedom to speak out in defense of or attack on beliefs
3. Freedom of the press to reach a wider audience
4. Freedom to assemble – or organize – around those beliefs
5. Freedom to take your cause to the government in order to effect change, through laws or budget.

It offers freedom of religion and freedom from religion. Just a century before, Europe had been torn apart by religious war and the result was 10 to 30% of folks on the continent killed. Our founding fathers knew the absurdity of legislating religion, whether trying to force someone to not believe something or force them to believe something.

But the first amendment is more important than that. Much more important. And it is brilliantly constructed to result in perpetual progress.

What freedom of religion really means is freedom of belief. The US can’t pass any laws to legislate what you believe. So essentially this is like giving 330 million Americans a license to generate all sorts of wild theories – some folks tales, some religious, some that - if taken seriously - will create great wealth and some that - if taken seriously - will result in death and destruction, some conspiratorial and some downright scientific.

But it doesn’t end there. You can speak about your belief and even go to press with your belief. You can argue for your own belief or against someone with a different belief. The first amendment says that you have a right to believe the earth is flat. It also says that everyone around you – from your neighbor to the nightly newscaster – has the right to tell you how stupid that is. And here is the really amazing thing about you going to press with your belief: it becomes something a little different in the mind of each reader. Your idea becomes the community’s idea. It changes. Your idea becomes bigger than you. In the same way that a gene can be passed on to someone else, an idea, a meme, can be passed on to others and - blended with other ideas - create something new. Someone once wrote, a city is where ideas come to have sex. Once it enters into other people's minds, becomes a part of the community's discussion, your idea will become something different than how it was born in your head.

What’s next? People can organize around this idea, this belief. The most obvious thing is that you can assemble and protest. Less obviously, you can engage in social invention and entrepreneurship to institutionalize your belief. Women organize to become suffragettes, arguing that they have the right to vote. Those groups are the first bit of organizing and then that takes us to the fifth bit of institutionalization.

You can bring your cause – your belief – to the government and work to have it translated into a new bit of legislation. The organized group of suffragettes who argued that women had the right to vote dissolved because they pulled off an even better bit of social invention: they changed the constitution so that women could vote. The reality girls are born into is now different because of their success.

The first amendment traces the trajectory of progress: you have an idea or belief, you talk about it with others, you even publish it, sending it out into the world to become something independent of you, and then people protest the status quo, arguing for this new belief to be made into a new reality and then …. It becomes the status quo for the next generation. It is not enough that Isaac Newton knows the calculus he has invented. What is really powerful is that we teach calculus to teenagers and it simply becomes a common tool for them to model and manipulate reality. At that point – the point at which your idea is institutionalized – the status quo becomes something very different.

This is how progress is made. And that may well be the most beautiful and remarkable thing about the first amendment. It actually traces a thought in your brain into a new, shared reality babies are born into. Each child does not have to start civilization from scratch. We simply don’t have time for that. What we’ve institutionalized becomes the starting platform for the next generation … who begin this process of creating new beliefs that have to go through the stage of challenging and spreading and then becoming the next thing that is institutionalized. The first amendment is so much but to me perhaps the coolest thing is that it is a description of progress.

The first amendment is not about demanding respect for old ideas and traditions. It is about demanding respect for new ideas and innovation. The first amendment is the social invention that itself generates new social inventions. That’s something to shout about. And thanks to the first amendment, you can.

17 September 2020

Pericles, the Afterlife and What Matters

It's my birthday today and I've just set a new record for old, so here are some thoughts on the afterlife.

The notion of an afterlife seems to lie at the root of morality and wisdom. Not afterlife as in another world to which your soul goes but rather this world in which future generations live. The notion that our lives have consequences beyond our own life - and that future lives matter just as much as our own - can provoke something better in us.

Pericles was born about 500 BC and presided over the Athens that included Socrates and Plato. (And Plato who had been taught by Socrates went on to teach Aristotle who went on to teach Alexander the Great - speaking of afterlives and consequences.) Pericles helped to define democracy, something the Athenians were among the first in the world to make a reality.

Each year, a notable Athenian was to give a funeral oration to commemorate those who had died in battle. The tradition was to praise these brave people. Pericles went a step further. In this oration, he actually spoke to why their sacrifice mattered, spoke to what they died for.

He mentioned two reasons these warriors' sacrifice might matter.

One was, "If we look to the laws, they afford equal justice to all in their private differences." It is what we now call justice for all.

Another was, "We throw open our city to the world, and never by alien acts exclude foreigners from any opportunity of learning or observing, although the eyes of an enemy may occasionally profit by our liberality..." Pericles brought in the best minds from around Greece. (The Greeks did not think of themselves as one people at this time. Spartans and Athenians, for instance, were enemies and definitely saw each other as foreigners. Xenophobia is a Greek word. Pericles was different for so many reasons; one is simply that he was not xenophobic.) Those great minds from elsewhere helped fuel math and philosophy and helped to design and build the Parthenon. By the standards of the day, Athens was cosmopolitan and it flourished because it was a magnet for the world's best and brightest.


Pericles looked beyond the lives of the recently dead (and was himself to die of a plague just two years later) to why their deaths - or perhaps anything at all - mattered. What he articulated in his funeral oration was the fact that the afterlife matters because future lives matter. And of course, here we are, convinced that our lives matter even more than the lives of those ancient Greeks. And in another 2,500 years there will be another generation convinced of the same. Whether the world flourishes or flounders is greatly determined by whether past generations thought - or this present generation thinks - that an afterlife deserves our investment, our thought, our consideration.

Young men are driven to pass on genes, old men to pass on memes. We have a biological imperative to create a future that is partly us and mostly someone new; I believe we have a social imperative to do the same with the values and ideals we try to articulate, share and live. That has to at least partly be animated by a love for the possible, for what isn't born yet.

15 September 2020

The Sharp Drop in the Number of High-Skilled Visas

Fun fact: the population of the US in 1790 was 3.9 million. Today it is 330 million. The reason not a single American from 1790 has a job today is because of the millions of immigrants who came to this country after 1790 and stole their jobs.

Most people don't know this but each country is allotted only so many jobs. That number is fixed. If you let too many new people into your country, native born people will not get one of those jobs. THE IMMIGRANT will take that job.

When the US was founded in 1787, the rich people who control the global economy did the calculations to determine how many jobs the US could have. That number has not changed in the 233 years since.
the eAnd here's the deal: if you're stupid enough to let in immigrants, they will just take some of those scarce jobs from you! Yes you! The American to whom that job should rightfully go.

So don't be a dupe and swallow all that nonsense about how regardless of whether your population is growing or shrinking by 10% a year what really determines the number of jobs you have is the levels of innovation and entrepreneurship - which in turn depends on investment in education, research, health, childcare, and levels of openness to other countries and cultures and nurturing a culture of experimentation and risk-taking. Don't let anyone fool you into thinking that it is actually possible to increase levels of prosperity and employment at the same time that you grow your population through birthrates and immigration. Don't be naive. Learn from North Korea. There is a simple rule for prosperity: nobody leaves and nobody comes in.

In related news, there has been a sharp drop off in the number of people coming into the country with high-skilled visas. Source of graph is Axios

13 September 2020

Prosperity Depends on Trust

"As a personal attribute, trust is not inherently good or bad. If I am living in a neighborhood full of thieves and swindlers, being a trusting person will get me into trouble. Trust becomes a valuable commodity only when it exists as the by-product of a society whose members practice social virtues like honesty, reliability, and openness. Trust makes no sense unless it reflects a general condition of trustworthy behavior; under these conditions, it becomes the marker and facilitator of cooperation. Of course, an opportunist could try to take advantage of other people’s trust and try to cheat them. But if one wants to live in the community, this will quickly lead to ostracism and shunning."
- Fukuyama, Francis. Political Order and Political Decay (p. 123). Farrar, Straus and Giroux. Kindle Edition.

2008 was a financial catastrophe because of a credit market crisis. Per Wikipedia, credit came "from Middle French crédit (15c.) 'belief, trust,' from Italian credito, from Latin creditum 'a loan, thing entrusted to another,' from past participle of credere 'to trust, entrust, believe'." A lack of trust creates a crisis - whether within a company, a relationship, or in credit markets more broadly.

Fukyama writes of Greece and Southern Italy's economies in this context of trust. People in these places generally don't trust folks outside of their family. The result? You can't create a business of any size and government is dysfunctional. This creates poverty. Per capita income in the south of Italy is about half what it is in the north; in Greece it is 55% of what it is in Germany.

The key to success is making yourself part of such a big us that one can specialize. If you are in a group of five or ten, you have to be a generalist, you have to do everything. Your productivity will be so much lower than if you are in a large group where you can specialize. The key to becoming part of a bigger group, to making us larger, is to create institutions bigger than family or tribe, institutions like church, state, banks, and publicly traded corporations, and even the less obvious civic organizations.

Where you find communities where people have learned to be distrustful, you will find poverty. Success - whether within a family, friendship, company or country - depends on you creating a culture where trust is inherently good and isn't something easily or often betrayed.

12 September 2020

Comparing the Stock Market and Labor Market During Democratic and Republican Presidencies

Which one of the three following arguments is definitely not supported by the data we have on presidents since 1977?

1. Republican presidents are better for the economy than Democratic presidents.
2. Democratic presidents are better for the economy than Republican presidents.
3. The economy does what the economy does and it is far too complicated to argue that either Democratic or Republican presidents make any difference.

(Punchline: it is 1.)


The data for these numbers is at
https://data.bls.gov/pdq/SurveyOutputServlet
Since Carter, the economy has created 2.2 million jobs per year when Democrats have had the presidency and 600,000 jobs per year when Republicans have.

11 September 2020

Betsey Stevenson Testimony on Needed Economic Policy for Phase Two of the COVID Recession

In March and April, the economy laid off 22 million people. In a normal recession, it takes time for businesses to realize demand has fallen and there is a lag between the slowdown and layoffs. COVID meant the slowdown and layoffs were coincident. This has likely caused us to underestimate the damage this will do.

The good news is that nearly 11 million of those people have been hired back.

The bad news is that we're now entering the normal phase of a recession: the "I guess business is not picking back up to normal levels so we're going to have to lay off more people now" phase. Without fiscal stimulus, the economy will destroy millions more jobs before year end, this on top of the 13 million people already unemployed.

A layoff of 2 months is frightening; a layoff of a year or more is devastating.

This testimony from the University of Michigan's Betsey Stevenson is really illuminating about the stakes for policy over the next few months.

Excerpt:
"We cannot afford for you to ignore the needs of our children. If the needs of children—from hunger, to care, to education—are not the most important priority in your next bill then I would urge you to reexamine your priorities."
Her full testimony is here:

https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/BetseyStevensonTestimony.pdf

As American As Protesting Protests

Regarding an NFL game last night, a friend wrote,
"Fans began booing when players and coaches stood the length of the field arm-in-arm and the public address announcer called for 'a moment of silence to support racial equality in our country.'"
That is so meta. And so American. People loudly protesting silent protest.

"I'm protesting your protest!"
"Oh. So you are for protests?"
"No! I'm against them!"
"Hmm. Sounds to me like we've got ourselves a protester."
"I am not"!
"To quote Shakespeare, 'The lady doth protest too much, methinks," to actually be anti-protests."
"Now you're just putting words in my mouth!"
"No. You did that yourself. We were silent until you came along."

09 September 2020

The Catastrophic Bug in Nationalism and Why Trump is Working to Remove The Globalization Code that Fixes It

A bug can cause a piece of software - or even a civilization - to crash.

The new invention of the nation-state spread throughout the West during the 1800s. Inspired by Americans breaking away from the British Empire and French decapitating royalty, Europeans began turning themselves into nationalists. This new software of nationalism was largely installed by about 1900, but also had some catastrophic bugs that resulted in two tragic world wars between 1900 and 1950.

The West found out that nationalism worked great with the addition of new code called globalization, creating institutions like the UN, NATO, and the World Bank. Now neo-nationalists like Trump, Duda in Poland and Orban in Hungary are trying to un-install the globalists code. If they’re successful, it could repeat some of the catastrophes of the early 1900s.

********* 

The idea behind nationalism was to align a people with a government. Sometimes that meant breaking away: Czechoslovakia could break away from the Austro-Hungarian Empire. Sometimes it meant consolidating: isolated, feuding regions could be combined into a nation state like Italy, Germany or the United States. (The American Civil War ended in 1865, turning a confederation into a union. In 1870 and 1871, Italy and Germany became nation-states.)

As a concept, nationalism is a great idea. In practice, it’s messy. At one point, Czechoslovakia is part of an Austro-Hungarian Empire, at another it is a country and at another point it is two countries - Czech and Slovak. And of course, no one can tell you which is “real.”

It took a long time to make nationalism real for everyday people. One bureaucrat who went out into the French countryside in the late 1800s asked a room full of school children what country they lived in. None could tell him. At the time of the French Revolution 75% of the country spoke a language other than French; a century later it was still a third.

In the US, the variety of language and cultures were even greater than it was in France. By 1900, 20% of Iceland had moved to the US and the US was home to more people who’d been born in Ireland than still lived in Ireland. Another 5 million had come from Germany. Immigrants weren't just coming from Europe. By 1870, Chinese immigrants and their children made up nearly 9 percent of California's population, and one-quarter of the state's wage earners, and one-third of Idaho's settlers. These new immigrants merely added to the variety of cultures and languages already here. 

The Mexican War and the Louisiana Purchase of the 1800s had left the US with large numbers of people who spoke Spanish and French. That variety persists. In California, 220 languages are spoken and 44% of Californians speak a language other than English at home. Some states have declared English as their official language; the US never has.

For the West, nationalism had become normal about 1900. And then the West discovered that nationalism contained a catastrophic bug.

World War 1 killed 10 million soldiers and 10 million civilians. (And the pandemic that spread as soldiers came back home at war’s end – the Spanish Flu – killed another 50 million around the world.)

The second world war killed four times as many people as the first, leaving 80 million dead.

One world war might be an accident. Two world wars suggest a terrible bug in this new phenomenon of nationalism.

Nationalism could work, world leaders realized, if they created global organizations like the United Nations, NATO, the World Bank, and GATT. These institutions greatly decreased wars and increased prosperity. Since 1950, only 100,000 people have died in warfare in Europe, about 1% of the total killed in the two world wars. And GDP growth accelerated. Between 1900 and 1950, GDP in England grew 50%. Between 1950 and 2000, it grew 234%.

It bothers me that people are not more bothered by Trump’s focus on dismantling globalization. Who benefits from his vandalism? Well, Putin certainly would. Russia is no match for NATO but Russia can easily match any single country within Europe. If we’re back to nationalism, Putin is far more powerful.

But I don’t think that Trump’s nationalism is all about helping his buddy Putin. It is a way to rally the base. Talk about international law or trade deals and normal people will glaze over and conspiracy theorists will light up. Globalization may let people live in peace and prosperity but – oddly – it is not going to win any elections. Now talk about how “they” are rapists and murderers or our stealing our jobs and you’ll rally the base. Nationalism excites tribal impulses.

We have instincts for sex and violence; folks who write scripts exploit that to get higher ratings. We have instincts for tribalism and nationalism; folks who run campaigns exploit that to get more votes. Those impulses make for terrible guides to actual behavior, though. They can create chaos. We’ve seen the chaos that the worst impulses of nationalism and tribalism could create in the first half of the 20th century. If we don’t protect the project of globalization, we could see it again.

07 September 2020

The Future of Work Lies at the Intersection of Flow, Income, Meaning and the Popularization of Entrepreneurship

Some thoughts on labor on this its day.

One of my heroes, Deming, used to argue that the worker deserved to take pride in her work. To feel proud of what you do you have to feel like it matters, it is valued, and that it represents your best.

One chief difference between work and a hobby is pay. One reason I like markets is that it is a way for the community to signal what it values. You may want to write another folk song but what the folks in your neighborhood will actually pay for is someone who can solve the problem of getting them food at lunchtime or to devise a better solution for running rainwater off of - or collecting solar energy onto - their roof. Pay is the community conspiring to vote on what would be valuable to them and not just to you. That makes us all a little more relevant, forcing us outside of ourselves.

One of my other heroes, Csikszentmihalyi, studied the psychology of engagement, what he called flow. It turns out that we're happiest when we're doing something that requires our full attention. When we're in flow we face clear goals, there is a balance between our skills and the challenge we face, we are free from distractions, we are animated by clear - rather than conflicted - priorities, there is a perfect overlap between what we're thinking about, wishing for, and doing, we are not worried about failure (one's mind has no room to simulate that outcome, so fully engaged is it in the task at hand), we lose track of time, the activity becomes worth doing for its own sake, and the self becomes more developed as the result of this state of flow, this absorption in the task.

Flow is a fabulous thing but for many it is easier to find in a video game than in work. A video game provides little meaning, though.

A task is meaningful if it serves a purpose bigger than that task. One guy might be cutting stone and the guy beside him - engaged in the exact same task - may be building a cathedral, be glorifying God. Sometimes meaning is simply a matter of framing your work as something bigger than the task at hand. More often it is being animated by what a difference your work makes in the lives of others, even in the lives of future generations.

As we become more affluent, we may rather paradoxically define ourselves even more by our work. Identity is often bound up in our job and in answer to the question, "What do you do?" we rarely say, "Stay current on politics," or "Read all of Michael Connelly's new novels." We tell folks what we do for a living. But as work becomes less essential to covering the necessary costs of life, we may expect that we not just get paid in money but in flow and meaning as well.

Faulkner wrote, “You can’t drink eight hours a day. Or make love. Work’s about the only thing a fellow has to do to keep from being bored” We have a number of examples of folks in the modern world who have made more money than they can spend and yet a great number of them continue to work. I suspect that we peons will follow their example and increasingly demand of our work these elements of pay, flow and meaning even as incomes rise.

Video game designers, TV producers, and designers of social media know how to capture and hold attention. What I suspect will define much of the modern corporation is that it will distinguish itself not by the products it designs - its employees will do that - but by its design of work so that employee efforts create income, flow and meaning. The founder of companies in the early 1900s became wildly successful by designing products like safety razors and automobiles. I suspect that we'll look back at the founder of successful companies in the early 2000s as successfully designing work to attract the best and brightest.

Keep in mind that Facebook, Twitter and Instagram aren't producers of any content in the same way that Newsweek, CBS or the New York Times are. They are platforms. I think that corporations in general will take on a similar relationship with employees in the future, focusing on creating great work rather than great products or services, positioning themselves as a platform rather than maker of products. This is part of what I mean by the term, "the popularization of entrepreneurship." Employees will create the new products, services and businesses that generate new jobs and wealth. The corporation will create the systems and roles that facilitate those outcomes.

Work matters. Profoundly. It has the potential to define us as much as anything else in life. Think of the people who stand out in history, people as different as Picasso, da Vinci, Marie Curie, Maria Montessori, Beethoven, Bjork, and Kurt Vonnegut. We know them through their work. Work is key to how we become who we are. And just like us, our labor continues to evolve. I suspect it will matter even more in the future than it does now.

Happy Labor Day!

What Should be Allowed and Outlawed in a World of Genetic Engineering?

In 1978, the first "test tube baby" was born. By 2017, babies born by in vitro fertilization (IVF) were 1.7% of all babies born in the US.

In 2018, 40 years after the first IVF baby, two baby girls were born whose genes had been edited. I think there is a real possibility that gene editing will become more common in 40 years than IVF is now.

Which genetic changes should be outlawed in such a world?

Which genetic changes should be allowed?

If you refuse to analyze or edit genes of your offspring and they suffer from what will then be an easily preventable genetic issue, should they be able to sue you?

Evolution to this point has been random. Will the world improve once evolution is made more intentional?

05 September 2020

Why Conservatives Hate San Francisco's Nancy Pelosi (it has nothing to do with communism and everything to do with the disruption of markets)

Republicans really hate Nancy Pelosi. Last week, in the midst of a pandemic taking 1,000 lives a day and a reminder that we still have 11 million newly unemployed people, the most popular story on Facebook was about Nancy Pelosi's haircut. On a related note, I've seen a number of Trump fans holler about how a vote for Biden will be a vote for socialism or communism, some of it explicitly tying this charge back to Pelosi who - in their eyes - apparently is a socialist or represents a socialist part of the country.

Nancy Pelosi -Democrat - is the Speaker of the House. Mitch McConnell - Republican - is the Senate Majority Leader. There are 535 members of Congress but these two easily have the most influence on legislation. By comparing the regions that elected them as representatives, you can learn a lot about who Republicans and Democrats are.

Kentucky is the 2nd most dependent state in the union, taking in far more money than it pays in taxes. California is 41st on that list.

Kentucky had 39 startups attract $743 million in venture capital in 2018. San Francisco had 1,127 startups attract $24 billion in venture capital, 30X the number of startups and venture capital in spite of the fact that San Francisco's population is only 20% that of Kentucky's. No Republican has explained why venture capitalists are so enamored of the communists in San Francisco but so avoidant of the capitalists in Kentucky.

Average income in San Francisco and % of folks with a BA are both 2.4X higher than in Kentucky. In Pelosi's San Francisco, households make nearly $100,000 more than those in Kentucky. In January, the unemployment rate in Kentucky was twice as high as it was in San Francisco.

The Republican - Democratic divide along with income is not limited to Kentucky and San Francisco. Of the 8 states with the highest per capita income, Biden is strongly favored to win all 8 (per fivethirtyeight's forecast 6 Sep). Of the 8 states with the lowest per capita income, Biden is favored to win only one. This November, the other 34 states will be deciding whether to follow the lead of the communities that host Silicon Valley, Wall Street and Harvard and MIT or to follow the lead of rural Mississippi, Alabama and Kentucky.

How do politicians like Mitch McConnell manage to convince so many folks that the socialists are in San Francisco and the true capitalists are in Kentucky, a state that manages to attract lots of government subsidies but very little venture capital? In other words, a region highly dependent on the government but not capital markets?

Maybe it is because markets are disruptive and the real issue for Republicans is a preference for tradition over the disruption of change. The whaling industry was made obsolete by oil wells. Oil wells are being made obsolete by solar panels. Progress has little respect for tradition and for conservatives, tradition is more important than markets.

William F. Buckley was the right's favorite intellectual for decades. His most telling quote was, "A conservative is someone who stands athwart history, yelling 'Stop!'"

The Bay Area is not communist. It does, however, represent a threat to tradition. It continually tries new things with less regard for tradition than perhaps any other region of the world. Now California governor Gavin Newsom was the first elected official in the country to grant same-sex wedding licenses when mayor of San Francisco. Dee Hock - former founding CEO of VISA - helped to invent the modern credit card in San Francisco. Genentech was founded there, the first company to dare turn genetic code into intellectual property, starting the biotech industry which threatens to change humanity at a its most basic level: our DNA. For many conservatives, this sort of entrepreneurship, innovation and social invention is more threatening than any socialists. And yet it is the natural culmination of market economies, the very opposite of communism.

04 September 2020

August 2020 Job Numbers - Down from 22 to 11 Million Jobs Destroyed - Policy Now Determines How Many Millions of Lives Will be Destroyed

A few quick notes about today's jobs numbers.

One, it is fantastic to be up 1.4 million jobs in a month.

Two, we have now replaced 50% of the jobs lost in March and April. In March and April, the economy lost 22 million jobs. Since then, the economy has created (or brought back) 11 million jobs. So we're half way to normal and those next 11 million jobs will take longer than 4 months. Whether it takes years longer or months longer will be a matter of policy.

Three, we brought back 11 million jobs in no small part because we increased the deficit from $1 trillion to $3.3 trillion. There has been a huge infusion into the economy to keep households solvent and pay businesses to hire back folks, etc. Without that we could have easily seen an increase in the number unemployed rather than a halving.

One of the things that drove me crazy about the Great Recession were all the Republicans and some of the Democrats who were wringing their hands about the difference between a trillion dollar deficit and a two trillion dollar deficit, like that was more catastrophic than millions of Americans being unemployed for years rather than months. And of course all of you (and you know who you are - you continually commented on deficits before, as if they mattered more than destitute families) will be wringing your hands when we need to run record deficits to create and recover the next 11 million jobs. Just don't do it here; since 2008 I've become an old man and have lost my tolerance for intentional stupidity.