16 July 2018

Gales of Creative Destruction and the Stress of Progress

Since Oct-2010, the US economy has destroyed 475.6 million jobs (layoffs, retirements, firings, quits) and created 494.2 million jobs for net of 18.5 million jobs.

As of June, the labor force was 162.1 million.

So during the 8-year recovery the American economy has created 3X more jobs than there are people in the workforce and destroyed 3X more jobs than there are people in the workforce

244,000 jobs were created in May. More precisely, 5.8 million jobs were created and 5.5 million jobs were destroyed for a net of 244,000. It is not true that everyone kept his or her job except for 244,000 people who were newly hired. Every month people are laid off, fired, quit or retire; in May, 5.5 million people had such experiences. That's a lot of elation (those who retire), relief (those who quit), frustration and panic (those laid off and fired). We talk a lot about taxes but an economy this dynamic is emotionally taxing.

One of the challenges of the modern economy seems to be that given progress comes in the form of gales of creative destruction we have a high level of stress. Personally I think that just reinforces the necessity of things like universal healthcare, investments in job retraining and generous unemployment, etc. But regardless of the solution you'd advocate, you have to realize that anyone whose idea of the good life is a stable, predictable career is going to feel a continual level of stress and unease by progress.

Two things can be simultaneously true: we are creating better jobs and a lot of people end up with worse jobs. There are probably as many people laid off from manufacturing jobs paying $45,000 a year now working at Wal-Mart for $25,000 as there are people with new programming jobs making $75,000. (And of course that very dynamic is part of why median wages move upwards so slowly and why income inequality is increasing.)

This economy is wonderfully creative but it is increasingly disruptive. Entrepreneurship and social invention creates the new and obsoletes the old just as innovation does with products. We used to have marriage between one man and one woman and now we have same-sex marriage and polyamory. We used to have jobs with pensions and 40 hour workweeks and now we have 401(k)s and a gig-economy that offers us Uber-like jobs with both more freedom and uncertainty. We used to have an American economy and now we have NAFTA. If you find comfort in continuity you will actually find progress threatening because so often it forces us to act or be different. 

Innovation changes products while entrepreneurship and social invention changes people. That's unsettling.

It seems to me like the divide that doesn't get talked to enough is the divide between those who embrace progress and all its novelty and those who embrace tradition and all its familiarity. To the latter group, progress can actually feel like a threat.

07 July 2018

The Most Important Development in the Evolution of Humans

First an excerpt from Thinking Big, a book about how our brains evolved to adapt to social realities. A key point here is this matter of thinking in terms of relationships and not just rationally.

Food was certainly of vital importance and obtaining it efficiently and securely must have dominated much of their [early hominins’] lives. The archaeologist Rhys Jones, who lived with Aborigines in Northern Australia, once said to us that these hunters and gatherers were always 24 hours away from hunger.But for us the keys to understanding food lie in the implications for social cooperation. This takes two forms. First are the tactical demands, of getting working parties together to hunt or gather safely and with greater chance of success. This covers defence against predators as well as obtaining those foods that were needed to fuel expanding brains. Second is the strategic matter of planning for bad times. This is achieved by looking for help beyond your immediate community. Instead of restricting access to resources by defending them against all-comers, it is better to allow other people in. By linking individuals and their communities over very large geographical areas a form of ecological insurance is produced. [highlighted added]Archaeologists refer to this as social storage: tokens exchanged for food in bad times, and vice versa in good. In other words, if conditions deteriorate where you happen to be ranging, then we will allow your community to come over to our range and use our resources for a while. Later, the reverse will be the case, and you can pay us back. Such a system works well, but it requires that the community has a territory large enough to cover a wide range of habitats. It won’t work so well if community territories are small and consist of essentially the same kind of habitat.
…..Rather than concentrating on what may be rational explanations of why they hunted bison rather than reindeer or chose not to eat fish, as the isolated Tasmanians famously did 6000 years ago, we need to shift the perspective and see the role of food and other materials in creating relationships rather than simply meeting calorific goals. Archaeological explanations for the human story need to be relational (being social) as well as rational (being economic). Social life is not based on calories alone but on the relationships that emerge when things are made, exchanged, used, and kept.pp. 86-7 of Clive Gamble, John Gowlett, and Robin Dunbar’s Thinking Big: How the Evolution of Social Life Shaped the Human Mind, Thames & Hudson, London, 2014, paperback version 2018.


Put more simply, as humanity evolved it faced two choices.
1. Defend your limited resources from others.
2. Expand your limited resources by sharing with others.

Archaeologists think that Neanderthals adopted the first strategy and early humans adopted the second. Neanderthals went extinct. We've become the dominant species.

As it turns out, the second strategy of strengthening relationships rather than walls has a host of advantages. Not only do you have more insurance against bad times but this strategy requires you to cooperate with larger groups of others, which enables all sorts of advances. This means opportunities for wider array of mates, the exchange of ideas, and the "outsourcing" of or cooperation on explanations, research and development, and cultural and technological innovations that eventually dwarfed the diversification of food sources in importance.

The choice to cooperate to share more rather than compete to protect less may be the single most important choice early humans ever made.

05 July 2018

Trade Wars, Immigration and the Invasion of Iraq

I remember feeling so utterly baffled as to why so many of my fellow Americans were eager to invade Iraq. The reasons we were given were so odd. Saddam might have weapons of mass destruction. (Without convincing proof that reason could be used to invade any nation.) This was retaliation for 9-11. (We already knew most of the terrorists of 9-11 were from Saudi Arabia and none were from Iraq and that Osama bin Laden was behind the attack, not Saddam.) We could "liberate" the people of Iraq by dropping bombs on them. Finally, the idea was that at the instant Saddam were taken out, democracy would bloom in its place. (There is no history to suggest that every community is a democracy waiting to bloom with the removal of a despot. The predecessors to democracy are more complicated by far.)

There were no experts who believed any of these weird claims. None of this made sense. And yet Americans were so excited to go do this and Bush and Cheney and Condoleezza Rice assured us that it would work. (Didn't explain how it would work or even what the risks were but instead just adamantly insisted that it would. As it turns out, this is a big sign that the person talking to us doesn't know what they are talking about.)

I never did understand how it was going to make our lives better here in the US but it did turn out to cost us $4 trillion, kill 4,000 American soldiers and somewhere between 100,000 to 2 million Iraqis, triggered a refugee crisis that still rocks Europe, was the catalyst for forming ISIS, which still terrorizes that region, and Iraq is not only now less stable but now so is its neighbor Syria. It turns out that anger isn't really a great guide to good policy.

Now Trump and his supporters are just as excited about immigration and trade as Bush and the country was about invading Iraq. Like then, this will create huge misery for others, some misery for us, and will cost us a lot.

Like the Iraq invasion, trade wars and cracking down on immigration apparently gives a lot of people a cathartic release but it is costly - like shooting up heroin before driving onto the freeway.


Trump has increased spending on border patrol. He was taken the dramatic and hateful steps of seizing children from asylum seekers coming to this country. He has claimed that trade wars are easy to win. Now he's even looking to rescind citizenship from people who have already been granted citizenship.

There are no experts who agree that trade wars are easy to win. Even the Trump administration's cost-benefit analysis of immigration saw it as net positive, and besides the rate of illegal immigration has been seriously lowered in this century. 

Illegal immigration is the weapons of mass destruction of this administration, the weird policy fixation that no expert understands but nonetheless seems to trigger every tribal instinct that drives GOP voters. 

I know that some voters are hopelessly enamored of the power to take lives, whether it be through actual killing in an invasion or in the form of seizing children from their parents as they cross the border. Obviously you people are beyond reaching. But there are some folks who don't get excited about creating misery for others who have nonetheless continued to be Republican. If this is you, if you are excited about the crack down on unfair trade and immigration, ask some important questions.

How much is this anti-trade, anti-immigration effort going to cost? 
How is this going to make your life better? 
Which experts defend this and how do they explain it? 
At least importantly, how does Trump himself explain how this is going to make life better? Is there data to support any of these claims?

As an American voter, you can increase or decrease the level of misery on the planet, including your own. Take that responsibility seriously.