11 June 2026

The Illusion of Stability and the Reality That Organisms and Organizations Continually Move Toward Extinction or Evolution

Organisms and organizations are being continuously nudged toward either extinction or evolution. Stasis is unstable as a long-term condition. The appearance of stability is usually the surface signature of dynamic processes that happen to be in temporary balance. And the practical implication is that the right response to this condition is not to try to preserve current arrangements unchanged but to engage actively in the adaptation that current conditions require. The choice is not between change and stasis. The choice is between deliberate adaptation and unintended decay, and the second is what happens when the first does not.

It is a fantasy to think that our founding fathers - or even Lincoln's new Republicans or FDR's active reformers or - most shocking of all - Reagan's advisors from just the 1980s - would step into our current world and recognize it as their own. We do not have the alternative to preserve our union as it was or is. We have only the alternative to intentionally adapt to changing conditions, people and imaginations or to watch it decay.

The choice between stagnation and change is mostly illusory. There is no genuine option to keep things as they are. The option to keep things as they are is actually the option to let them decay, because everything around them is changing and a system that does not adapt to a changing context is being increasingly mismatched with its conditions. The visible alternatives are usually adaptation toward continued function or accumulation of mismatch toward eventual failure. The third option, true stability, exists only as an artifact of short time horizons or selective attention.

This is uncomfortable to sit with because human psychology is heavily biased toward preferring the appearance of stability. We like the idea that things can stay as they are. We organize our lives around the assumption that what is reliable today will remain reliable. We resist changes to institutions, customs, and arrangements that have been working, on the grounds that they are working and should not be disturbed. The instinct is reasonable as far as it goes, because changes have costs and unintended consequences, and not every proposed change is an improvement. But the instinct can become pathological when it leads to the assumption that the current arrangement will persist without the ongoing work that has been keeping it in place. The institutions that look most permanent are usually the ones that have been most actively maintained, and when the maintenance stops, the apparent permanence begins to dissolve.

The deepest version of this comes from thermodynamics. The second law of thermodynamics says that closed systems tend toward maximum entropy, which is to say they tend toward disorder, equilibrium, the dissolution of structure. Any ordered system that persists is doing so by importing energy from outside its boundaries and using that energy to maintain its order against the entropic gradient. This is true of stars, of cells, of organisms, of ecosystems, of organizations, of civilizations. None of them are stable in the sense of self-sustaining without input. All of them are, in physical terms, nonequilibrium structures that persist only as long as they can keep importing energy and exporting waste fast enough to maintain themselves against the universe's general tendency toward dissolution.

Organizations are nonequilibrium structures sustained by ongoing inputs of resources, attention, talent, legitimacy, and institutional energy. When these inputs decline, the organization decays. When they grow, the organization can either expand or stagnate, depending on what it does with them. There is no neutral state in which an organization simply persists without development. Every organization is either developing in some direction or decaying, and the appearance of stability is usually the signature of dynamic processes that happen to be roughly balanced for a period.

There are a variety of theories that offer explanations of the balance between stasis and change.

Evolutionary biology gives us the version most people are familiar with. Species that fail to adapt to changing conditions go extinct. Species that do adapt continue, but as something different from what they were. The rates of evolutionary change vary enormously across species and conditions, but the underlying principle is that genetic stability without occasional revision is incompatible with long-term survival.

Systems theory and complexity science give us the version that applies most directly to organizations. Stuart Kauffman, Per Bak, Ilya Prigogine, and others have argued that complex adaptive systems exist on what is sometimes called the edge of chaos, a regime in which the system is dynamic enough to respond to its environment but stable enough to maintain coherent identity. Systems that drift too far toward order become rigid and brittle. Systems that drift too far toward chaos disintegrate. The sustainable position is somewhere in between, and maintaining that position requires continuous adjustment as conditions change. This is sometimes called dynamic equilibrium, but the word equilibrium is misleading because the position is not static. It is a moving balance maintained through continuous effort.

Schumpeter gave us the version that applies to economic and institutional life. Creative destruction is not a periodic event but a continuous condition. Industries, firms, and economic arrangements that fail to adapt are continuously being replaced by ones that do. The appearance of economic stability is the surface signature of constant turnover at deeper levels. The companies in the Dow Jones in 1900 are mostly not the companies in the Dow Jones today. The industries that dominated employment in 1950 are not the industries that dominate employment in 2026. The continuous renewal is what allows the larger economy to persist.

Buddhist philosophy, in a different idiom, has been making essentially the same point for 2,500 years. The doctrine of impermanence, anicca, holds that all conditioned phenomena are in continuous flux, that nothing remains the same from one moment to the next, and that the appearance of stable selves and stable objects is a cognitive overlay we project onto a reality that is fundamentally a process rather than a collection of things. This framing is not identical to the thermodynamic or evolutionary versions, but it points at the same underlying observation: stasis is not a feature of the world we actually live in. The world is constant change, and what we call stable things are local patterns of change that happen to maintain coherence for a while.

Institutional recession is exactly what an institution looks like when its capacity for genuine adaptation has weakened but it has not yet collapsed. The institutions are not extinct. They are also not evolving in directions that match the conditions they are operating in. They are persisting in a state of partial function, doing some of what they used to do, failing at increasing portions of their original purpose, and gradually losing legitimacy as the gap between their performance and the changing demands of their environment widens. This is the phase before either renewal or extinction, and it can last for a long time before resolving in either direction.

The prescription of public sector entrepreneurship as the practice of citizens working to renew their institutions is essentially an argument for active engagement with the adaptation process rather than passive observation of its failure. Institutions cannot adapt by themselves, they require deliberate human effort to undertake the changes that will let them continue to function, and without that effort the trajectory bends toward extinction rather than toward evolution. Complex systems do not maintain themselves automatically. They require continuous infusion of attention, energy, and adjustment, and when that infusion declines, the system declines.

The choice between stagnation and change is mostly illusory. There is no genuine option to keep things as they are. The option to keep things as they are is actually the option to let them decay, because everything around them is changing and a system that does not adapt to a changing context is being increasingly mismatched with its conditions. The visible alternatives are usually adaptation toward continued function or accumulation of mismatch toward eventual failure. The third option, true stability, exists only as an artifact of short time horizons or selective attention.

This is uncomfortable to sit with because human psychology is heavily biased toward preferring the appearance of stability. We like the idea that things can stay as they are. We organize our lives around the assumption that what is reliable today will remain reliable. We resist changes to institutions, customs, and arrangements that have been working, on the grounds that they are working and should not be disturbed. The instinct is reasonable as far as it goes, because changes have costs and unintended consequences, and not every proposed change is an improvement. But the instinct can become pathological when it leads to the assumption that the current arrangement will persist without the ongoing work that has been keeping it in place. The institutions that look most permanent are usually the ones that have been most actively maintained, and when the maintenance stops, the apparent permanence begins to dissolve.

Organisms and organizations really are being continuously nudged toward either extinction or evolution. Stasis really is unstable as a long-term condition. The appearance of stability really is usually the surface signature of dynamic processes that happen to be in temporary balance. And the practical implication is that the right response to this condition is not to try to preserve current arrangements unchanged but to engage actively in the adaptation that current conditions require. The choice is not between change and stasis. The choice is between deliberate adaptation and unintended decay, and the second is what happens when the first does not.

10 June 2026

The Smaller You Make Your Circle of Trading and Investment Partners, The Smaller You Make Your Economy - the Impact of Brexit

David Frum shares data from an economic study of the effect of Brexit on the UK economy.

"... estimates suggest that by 2025, Brexit had reduced UK GDP by 6% to 8%, with the impact accumulating gradually over time. We estimate that investment was reduced by between 12% and 18%, employment by 3% to 4% and productivity by 3% to 4%. .... these forecasts were accurate over a 5-year horizon, but they underestimated the impact over a decade."

My take? The smaller you make your economy in terms of the scope of your trading partners, the smaller you make your economy in terms of investments, employment, incomes and growth in jobs and GDP.



AI Predictions

 AI is going to be bigger than ....

A) Microwave ovens 

B) Radio

C) Cell phones

D) the Railroad

E) Penicillin 


The Next Rocky Movie

It has been 20 years since a new Rocky movie has come out. I don't know what Stallone is waiting for. Maybe the surprise endings are getting harder to dream up.

Stallone: "And then, I'm like on the ropes. I mean, literally on the ropes. It looks like I'm not going to make it and then ..."
Producer: "Let me guess."
"What?"
"You manage an heroic comeback."
"Hey. Why you got to be like that?"
"Sorry."
"You didn't know what I was gonna say."
"I did not. You're right. Very rude of me to interrupt."
"I don't even want to tell you now."
"Please. Tell us. I do want to hear."
"You're sure?"
"Positive. Please. Do go on. I don't know what got into me."
"Okay." Pauses. Shuffles his feet, punches the air a couple of times. "Then, like just when everyone thinks I'm done for, I get this look in my eye. And I start punching. I mean, really punchin'."
"That's it?"
"No! I mean, I come back. I punch him a lot. I punch him hard. I knock him out. Everybody goes crazy."
"And then?"
"And then nothin' We run the credits. That's it."
"So how does it start?"
"Not so good. Things don't look so good for Rocky."
"But then you come back?"
"That's right. That's it."
"So who are you fighting in this one?"
"Chat GPT. He's a real know it all. I don't like him. Nobody likes him. I don't say nothin' I just throw punches."
"Sounds like a hit. That's great. Really."
"Yeah?"
"Yeah."

Fascism Is Always Home-Grown

"Fascism is ultra-nationalist. In other words, there is no such thing as foreign fascism. Fascism is always home-grown."

- Sarah Churchwell, cultural historian

Culture - From Taming the Wilderness to Taming People

Culture began as agriculture, the art of taming wilderness into productive soil. Later, it became the art of taming people, making them productive. A tidy arc from soil to soul. From productivity of land to productivity of the human animal, a more cultured existence.

The Story of Inflation and Unemployment from 2019 Through May of 2026

Inflation was 4.2% in May, up from 2.4% a year ago.

During his debate with Vice President Kamala Harris, Donald Trump frequently blamed the Biden-Harris administration for record inflation, calling it "probably the worst in our nation's history". He claimed the cost of basic groceries and energy had skyrocketed, causing a "disaster for people", and pointed to the Inflation Reduction Act as a cause of economic catastrophe.

Here are year end numbers for inflation and unemployment through COVID in 2020, the stimulus program and supply chain issues that dramatically reduced unemployment and raised inflation in 2021 and 2022, and then the slow return to normal interrupted this year by Trump's war with Iran and the resultant oil price shocks that have again raised inflation (the blue portion of the bar below).



Related, real income has dropped in the last year. This from BLS,
"From May 2025 to May 2026, real average hourly earnings decreased 0.7 percent, seasonally adjusted. 
The change in real average hourly earnings combined with a 0.3-percent increase in the average 
workweek resulted in a 0.4-percent decrease in real average weekly earnings over this period."

09 June 2026

The Preposterous Age Difference Between Trump and Obama

The Obama Library opens in Chicago this summer.

Here is a curious fact: starting right now, Barack Obama could serve four more terms as president and still be younger than Trump is right now.

Trump is not 4 years older than Barack Obama. He's 4 terms older.

Trump's Preposterous Claim that a Republican Won California's Recent Election for Governor

The last time Californians cast a majority vote for either a senate or presidential candidate from the Republican Party was in 1988. That was a long time ago: a child born that year is now old enough to run for president.

Trump thinks you're stupid enough to believe him when he says that there is no way a Republican candidate for governor came in second place in a state-wide election last week, even though that is all they have done for 38 years.

08 June 2026

Explaining the Sell-Off of Stocks in the First Week of June

The New York Knicks made the NBA Finals. New Yorkers had to liquidate some of their stocks to get money for seats for the home games, so last week (June 1 - 5) represented one of the sharper sell-offs of stocks in 2026, the NASDAQ dropping about 5%.

Rather Unseasonal for June

"What is that patter on the roof," she asked.

He stroked his beard then said, "Probably just the rain, dear."

"Oh," she nodded. And then instantly wondered whether this was yet another slip, him revealing yet again his secret life. Then again, she had never before been with a man who wore so much red and rather than chuckle or laugh actually "ho-ho-ho'ed," or was so generous with gifts.

Dallas Fed AI Projections - A Curious Mix of Wow, Hmm, and ... Well That Can't Be Good

There was an old Dilbert cartoon in which Dilbert learns how to use PowerPoint for presentations. In the first panel, he shares this fact. "Bad news: our product is killing people." In the second panel he presents this instead. "Good news: drop in the number of dissatisfied customers."
Here is a curious graph from the Dallas Fed, which offers four scenarios to capture the possible effect of AI.




1. No change. Per capita GDP continues to grow at 1.9% a year as it has for more than a century.
2. Significant change. Per capital GDP begins to grow at 2.1 to 3.4% a year. (And this is not to be scoffed at. Given the size of the economy, this is a difference of trillions of dollars, a rate of progress equal to or significantly more than what we've had since the Industrial Revolution.)
3. A benign, or positive singularity in which our lives are so transformed by AI that we gain entirely new capabilities and productivity soars beyond what one might reasonably project now, changes more profound than what percentages could capture.
4. Or this singularity results in our extinction, AI deciding that we're either superfluous or detrimental to progress and ridding the planet of us the way we have tried eradicating various viruses and diseases.
So, the most plausible scenario is that because of AI we will be making ten thousand or more dollars each year than we otherwise might in a decade (an outcome bounded by imperceptible change on the one hand and remarkable progress on the other) and in the worst-case scenario we are extinct. But as Dilbert might point out, in this last scenario there are no complaints. I mean, can it really be called a risk if there is no one left to complain?

07 June 2026

The Base of Trump's Support is the Former Confederacy

Trump won 10 of the 11 former confederate states. (The only one he lost was Virginia which was so divided over the Civil War that West Virginia actually split off from Virginia at that time.)
Those 10 states also opposed Civil Rights, the integration of schools, and the end of institutionalized racism. That is, they supported the least defensible side in the Civil War and on civil rights.

It could be that the former confederacy that was so far behind in 1860 and in 1960 is now far ahead of the rest of the nation in so uniformly supporting Trump in contrast to the West and Northeast. Or it could be that they are - once again - on the wrong side of history. And weirdly, for some of the same bad reasons.

06 June 2026

Remembering the Planners on D-Day

D-Day is rightly remembered for the men who stormed the beaches. It should also be remembered for the planners who made the storming possible. This from Michael Lind's Land of Promise.

"In 1942, American policy makers were engaged in a secret debate about the feasibility of a US-British invasion of German-occupied Europe in 1943. In a classified report for the War Production Board, two economists, Robert Nathan and Simon Kuznets, concluded that it would not be possible to produce the necessary material until 1944 at the earliest. The army's chief military supply officer, General Brehon Somervell, was furious. He denounced 'this board of "economists and statisticians" ... without any responsibility or knowledge of production.' He called for the suppression of the report, which should 'be carefully hidden from the eyes of all thoughtful men.' But the argument of Nathan and Kuznets prevailed, and D-Day was a success in 1944 instead of a disaster in 1943."

The planning paid off. In 1944, the United States completed one plane every five minutes, launched fifty merchant ships a day, and finished eight aircraft carriers a month.

The Nazis were known for the Blitzkrieg, which combined German machinery and pharmaceuticals into an attack of tanks and amphetamine-fueled soldiers. But in truth, the Wehrmacht had more horses than tanks. Throughout the war, the German military relied on roughly 2.75 million horses to move supplies, artillery, and infantry, about 50 horses for each tank. By D-Day, the United States and its allies had clear superiority in numbers and in the production capacity that sustained the war."

On D-Day, June 6, 1944, the Germans could deploy only 319 aircraft. The United States and its allies deployed 12,837.

Kuznets won the Nobel Prize in Economics in 1971. By then, the economist Somervell had wanted to silence had been recognized as one of the most important economic thinkers of the twentieth century. He and Nathan helped to win the war by insisting that the war wait for the production capacity to catch up to the ambition.

05 June 2026

Circus Tents, Factories and 2026 Job Creation

Five months into 2026, job creation appears to have returned to normal after an unusually weak 2025. The weak job growth of 2025 likely reflected several factors: uncertainty around tariffs and trade policy, slowing labor force growth from weaker immigration, and higher interest rates. Some of the 2025 tariffs have since been struck down by the courts. Trade uncertainty remains higher than it was in 2024, but 2026 has had less disruption than 2025.

A president changes the economy primarily through policy. War with Iran has increased inflation. Trump's 2025 tariffs lowered job creation. But in 2026 Trump has had less impact on trade policy than he did in 2025, because the courts have ruled that Congress, not the president, has the authority to impose taxes, even in the form of tariffs. That is good for the economy. To the extent that Americans no longer worry that presidential narrative will become actual policy, late night posts can be dismissed as odd but irrelevant.

Within limits, politics can become increasingly theatrical while much of economic life continues according to its own logic. America is at times a place with a circus tent out front, full of spectacle and sentiment, and a factory and office in the back where the actual economic work gets done. The next few years will depend in no small part on whether Congress, the courts, and the voters in November can keep the show in the tent and out of the factory.


04 June 2026

Word Cloud for New Politics for the Next Economy

 Book due in 2026 ...



The Impracticality of Measuring Near-Magical Gains in Productivity Already Demonstrated by AI

"Through their artificial intelligence model AlphaFold, Demis Hassabis and his team at DeepMind cracked the code. By analyzing the amino acid sequences of hundreds of millions of proteins, the AI learned the rules of protein folding. Today, rather than spending years in a wet lab, the system can predict the highly accurate 3D structure of a protein in just 10 to 20 seconds."

AI completes this incredibly important task that once took a PhD student years in just seconds.

How do you even measure that kind of productivity gain? How would that even show up in productivity gains or economic value?

To the extent that AI is as transformative as it promises to be, it will - like the industrial revolution - actually elude proper measure. Think about air travel. In 1900, no one could travel by air. By 2000, millions of people regularly did. How do you actually measure productivity gains when they go from, "Doesn't exist" to "Fairly common?"

John Gray on What You Shouldn't Look for In Politics

"One shouldn't look to politics for human salvation. And one shouldn't look to politics for meaning in life. If you do you'll be terribly disappointed. You should look to politics as a way to protect yourself, the people you care about so that you'll be able to find or make a meaning in life." 
- John Gray

Sapphaccino and Greek Literature

Overheard in a Greek cafe.

"My knowledge of Greek literature begins and ends with the Iliad and the Oddity," she said before taking another sip of Sapphaccino, a curious concoction the waiter had suggested as a stimulating drink best shared with that certain someone.

LBJ, Robert Caro and Power

Lyndon Baines Johnson's biographer Robert Caro pushes back against Lord Acton's familiar axiom: "Power tends to corrupt, and absolute power corrupts absolutely." Caro saw something else.

"Power doesn't always corrupt. Power reveals. When a person gets power, you see what was underneath all along. With Johnson, what you see is that as soon as he had it, he passed the first major civil rights legislation since Reconstruction, roughly a century earlier."

Related, LBJ's political career lasted 32 years. In 1937, he was elected to the House of Representatives and his presidency concluded in January of 1969.

Robert Caro has been researching and writing his multi-volume biography of LBJ for 49 years and the fifth and final volume is still in progress.

A half century+ to complete the biography of a career that lasted three decades. 

31 May 2026

Optimizing a Life Means Suboptimizing Its Moments

There is a counterintuitive feature of systems optimization. You don't optimize a system by optimizing any one part of it. To optimize a system, you have to sub-optimize its parts. Let me illustrate by talking about a life.

Your life is a product of many things: your physical health, your mental life, 
your friendships and family, your sense of meaning, your connection to community, your sense of individuality within it,  your sense of legacy, your income and financial security, the pleasures of food and music and books and stories, the tribal urges that find expression in cheering for your team.

Here is the deal. If you optimize any one of these, you will sub-optimize the whole. Do everything you can to be in peak physical condition and you will have little energy left for great literature. Do both while working full-time and your social life will suffer. The hours in your week are zero-sum, and optimizing for any one piece sub-optimizes the rest. Oddly, the way to optimize any system, including and perhaps especially your life, is to sub-optimize every piece of it.

The punchline is familiar: a balanced life means moderation in all things.

Now the part that complicates this.

There is a familiar argument that to accomplish anything significant you need to work eighty hours a week. People point out, correctly, that an eighty-hour week is counterproductive. Long term, this is true. Short term, the original argument is right.

A balanced life is not something achieved in any given instant. You do not split each hour into seven minutes for workout, three minutes for great literature, eight minutes for relationships, four minutes for eating. Even within a day or a week, we focus on one thing at a time. So in any given instant, we are not balanced.

There are times in life when you need to move forward. In those instances you look for the limit or obstacle and you challenge it. You optimize to the part that is the limit, at least until it no longer is.

If you optimize a life but not any one part of it, what does it mean to sub-optimize in a way that is best for your life? It means you have stretches of life that really do optimize for one part and subordinate everything else. If you have children, you do not dedicate the rest of your life to optimizing for them. But in the first few months? First few years? The first decade or two? You often subordinate the other parts of your life to them. Nobody with a newborn is running marathons or throwing big parties or reading great literature. They are sub-optimizing everything to that new life.

If you write a dissertation or a symphony, build a business, pursue a gold medal, you will go through something similar. You will sub-optimize to that one thing for a few months or years. New parents do not put in forty hours a week for the newborn. It would die in the other eighty-eight. A similar but less dramatic version of this happens with any ambitious venture. Balance suggests you never dive in. Success suggests you do.

You may keep diving into things across your whole life. More realistically, the dives are separated by six months to six years of "la de dah," days when not much happens. (The perfect storm of incredible opportunity for which you are perfectly suited at exactly the right time of life happens once, twice, maybe three or four times in a lifetime. Know when that happens and dive into it.) You throw yourself into things that produce sub-optimization elsewhere. You are immoderately out of balance at every stage, and the end result is a full life that is balanced because it lets you experience life whole over the course of a whole life, but never in any one instant.

A life takes a lifetime. If you are interested in a legacy of any kind, you do not even optimize for a window as small as a lifetime. But that is the stuff of another post.

30 May 2026

The Simple Trade Agreement that Helped Transform Two Countries Into a Shared Economy

After WWII, Europe transitioned from a model based on conquest and extraction to one based on trade and interdependence. You need coal and iron to make steel.

France’s steel industry relied heavily on the coal-rich Ruhr Valley in Germany, while Germany's heavy industry relied on the iron ore found in the Lorraine region of France.

Because neither country could effectively produce steel or build a modern, post-war industry without the resources of the other, they decided to merge their economic and production interests. It was a forced interdependence, almost like an arranged marriage.

The agreement to dependably formalize that trade, known as the the European Coal and Steel Community (ECSC), created in 1951, evolved into the EU. As it turns out, iron and coal are not the only exports / imports that go into creating a modern economy and the trade agreement that began with these simple but essential ingredients for modernity expanded to include thousands of other products and materials.

The two world wars were devastating for France and Germany.

France in WWI lost roughly 25% of all their men aged 18–30.
Germany in WWI lost about 13% to 15% of its entire mobilized military. In WWII, the destruction of the German military was even more complete; some historical estimates show that over 30% of all German males born between 1915 and 1924 were killed or went missing.

The arrangement made for trade and interdependence hasn't just made them far more prosperous, it has made France and Germany far more able to turn young men into old men rather than corpses. The last half of the twentieth century has seemed to support the notion that greater economic interdependence has made trading partners more peaceful and prosperous. 

Kyiv's 1,544th Birthday

Today, the city of Kyiv - Ukraine's capital - has turned 1,544 years old [per Olga Nesterova].

I suppose such a thing could change your perspective about how long you could hold out against a Russian invasion.