Reflecting on ‘Solving America’s Innovation Crisis’

January 4, 2015 · Posted in Business, Economics, Government, Policy, Politics · Comment 

This article by Alexis Ohanian supplied a prescription for some of the ills that have beset our economy, particularly with regards to 'innovation.' It also put forth some suggestions as to what workers should do with themselves in this new world in order to compete. The suggestions, in my opinion, flew far from the mark. Reflecting on it over a year later, it does not look any better. My response:

First, it's a bit confused, so let's unpack the issues within. There are really two crises, and they have some overlapping solutions, but are definitely not the same thing.

First, there are innovation issues. As Tyler Cowen goes over in his books, we've already picked much or all of the low-hanging innovation fruit, and will have to work much harder (collectively and individually) to innovate. Ohanian's statements and implications about education (which I would argue is more about knowledge, practice, and spending time actually thinking about problems and solutions, rather than formal credentials) are correct. Autodidacts are likely to be at the forefront of innovation for the foreseeable future. Those willing to focus on learning and building things for themselves will reap the gains compared to those who want to just live their lives (spend time with others for fun, party, have hobbies, and all those other things people in earlier generations were promised once they "put in their dues") will struggle. While this was probably always true, we're entering a new era of hypercompetition where (in the US at least) it'll be what divides those in poverty from those with plenty (see Autor's work for more on this.) Which brings us to the second crisis:

Jobs. In the coming decades, as we continue to automate people out of jobs permanently (turning them into Zero Marginal Product workers) those left /solidly in/ the job market will be eventually able to command much higher salaries and benefits, while the ZMPs scrape by with either a) welfare if we leave things as they are, b) live a decent life off a guaranteed basic income if we're wise enough to do that, or c) starve, if we continue to do what we've been doing for 30 years. Those on the margins will be the ones dealing with the hypercompetition and will have to work harder and harder to stay above the line. So he's right again about "they instantly show who is resourceful and who isn't—who will go the extra mile and who will coast to the finish", but not for the reasons he thinks. The way we got here wasn't some grand choice by the people, it's the result of political choices: radical deregulation (mostly a bad story), the destruction of labor unions (had to happen), automation (technological unemployment as the result, unstoppable), and as a result, a changed culture of doing more with less. He uses the term "welcomes", but aside from those who enjoy meritocracy and all its upsides AND downsides, I would guess that most do NOT welcome it. If given the choice, most would choose to bring back some semblance the Golden Age (which I believe is impossible and should not even be considered, as the landscape has changed far too much to make that a possibility.)

So there is overlap in the two stories: hypercompetition leading to people having to work harder and harder to stay alive at the margins, and low-hanging fruit being picked requiring us to work harder to innovate. The unspoken idea that if everyone works harder we will all be able to succeed and innovate is naive; working harder to _innovate_ will be necessary but not sufficient. Working harder to _succeed financially_ will only work for /some/, and as time goes by, a smaller and smaller slice of the population.

Mr. Ohanian has romanticized a (for most) tough new reality. I believe this is unwise. We should look at it clearly and with eyes wide open so we can improve the future by putting in policies that support the innovators while keeping all the jobless and medium-term future jobless people from starving; telling people that they can succeed if they only work harder and obtain more education should be considered dangerously misguided.

I received some questions about this post, which I will answer below. They are paraphrased, since I don't know if the inquirers want their words used (if you're reading this and would like attribution, please let me know.)

Are "marginal" innovators really the only safe ones? Many jobs which rely on interpersonal interaction / soft skills will probably survive, right?

Well, there are couple things here. In the medium-term, which I'm most concerned with now, I think the percentage of people with "soft skills that are still useful / necessary to employ" will shrink. It will not go to zero like cashiers or fast food cooks, but as a percentage will go down. We are seeing the very beginnings of this in certain automated fast-food experiments (the equivalent of fast-food Matire'D people) and big-box store greeters (perhaps at some time in the past they would have been stocking shelves.) So rather than having ten human shelf stockers or cooks for each greeter, it might be ten automated shelf stockers/cooks for each greeter. Here in NYC, there are supermarkets with self-checkout aisles, and only 1 human left at a register, along with 1 human left to watch all the machines. Previously it was six or seven (up until a few years ago.) I think that will be the story for more types of jobs which require those soft skills in the future. Certain types, however, will do even better than now. I outlined a few in another comment:

Marketers will become especially important, especially as the prices of many things are driven ever lower due to automation. Perhaps we'll have 2x-4x more than we do now, and even more importantly, we will start to integrate the idea of marketing into more jobs. We already see this with musicians, visual artists, etc. Everyone needing to sell themselves even today gives a glimpse into this, I think. Other soft skill jobs that will be around in the medium term: nannies, a new breed of personal assistants, personal shoppers/designers/makeup artists, and politicians (who have long ago learned the importance of forever being in "marketing mode.")

So there is absolutely room for some soft skill jobs, but not nearly the number we're used to - and these fields will also get highly competitive, which is where the marginal innovation comes in. If I'm a marketer, even a very good one, I will potentially be competing with a large number of others who have the same training as I do, are unemployed, hungry, spending their time all day working on their pitches, etc. So in this way, I am still having to innovate at the margins. I don't think that part goes away for jobs that have lowish-barriers to entry, but are still in demand.

Telling people to get an education is good, as long as we understand that it really means 'get useful skills.' A problem is that many students go to college to learn things that don't add value and are funded by student debt that may well never be paid back. Past returns from education will likely not be repeated in the future - we're already seeing this in the west, but people should at least get educated/trained in 'good' areas.

I agree with that in the abstract, but I don't think it has a long shelf life. Here's another comment where I deal with that issue:

The short answer there is that supply and demand work against that being a viable strategy. Imagine the scenarios:

  1. Everyone (for example) becomes a software developer. Number of jobs as a percentage doesn't move that much. We fill all the existing positions, and are left with a glut. Software developer salaries plummet due to the "reserve army of labor" effect. We actually already have natural experiments for this one in certain fields (all the 'janitors with PHDs', STEM grads in India (, various others, etc.) Highly unlikely in any case.
  2. Everyone TRIES to become a software developer, and many or most fail. Software developer salaries stay where they are or increase. Those people are still jobless, but now have a pile of debt from 2-3 years of schooling. Not /incredibly/ far from where we are now, but still different.
  3. The status quo continues exactly as it is, and more people wind up with useless degrees. They remain jobless and in debt.

The highly implausible way this works out positively, is that everyone somehow succeeds against all odds and actually does 1), and the number of jobs also somehow keeps pace with the graduation numbers. I think you can probably see how unlikely this scenario is.

What path would you recommend for someone who isn't technical?

For jobs of the short-to-medium term for people who want to stay away from software/hard science/robotics, I would put:

  • Nurses, Physician assistants, and medical professionals in general in remote-ish areas (rural and ex-urban US areas still have a high demand for obvious reasons, smaller cities too. Big-city medicine is tough unless you are at the top)
  • Excellent marketers / creative professionals (art directors, for example, and anyone else who is "consistently creative" / constantly reinventing - if you're the cream of the crop here, you can do well)
  • Nannies (top ones can make 150K US)
  • Physical therapists (will eventually get automated, but likely 20-30 years out)
  • Pilots and air traffic controllers (hard to get into, start with decent pay, get very good later. Will likely be automated sooner or later, though.)

State of things to come, medium-term-ish edition mini-roundup

Two must reads:

"Trotskyite singularitarians for Monarchism! A political speculation" by Charlie Stross

"Automation, inequality and geopolitics" by Tyler Cowen


The world is polarized, drone edition

November 18, 2013 · Posted in Government, Politics, Science and technology · Comment 

 Now that we have insect-sized assassination drones and assassination marketplaces may exist for real, we're entering a world of incredible polarization (interesting that we're seeing the same thing happen with wealth.) We're hitting double edged swords on everything in the area of drones/weapons/security. Make snooping easy, you get surveillance states / make snooping hard, dangerous groups are able to coordinate easily. Give resistance movements access to social networks, easy to coordinate resistance to despots / give despots access to social networks, easy to get propaganda out and use surveillance to monitor movements. Individuals can now have outsize power if they have the right tools (Anonymous, network security savvy individuals, attacking infrastructure, small terrorist groups) while governments have massive datasets, great surveillance tools, many people focused on this area, and lots of guns. Everyone in the middle is potentially caught in this.

We're approaching a world where a lone individual can build a drone to kill a world leader, and a world leader can kill a lone individual with a drone. Just like it's hard to put checks and balances on a nuclear state, so too is it hard to put checks and balances on a determined person with poison needle drone fleet.

Finally, Schneier's latest Crypto-gram is a must-read:

We're all going to need personal protection bubbles.

The failure of political gridlock

September 18, 2013 · Posted in Government, Policy, Politics · Comment 

 Our system of divided government in the US is designed as a double-edged sword: things that are useful happen slowly, but things that are dangerous are slowed (or stopped.) That's the price we're supposed to pay. When dangerous things like the PATRIOT act can pass, but useful policies like working out the debt ceiling, or updating redistribution policies to reflect modern realities have no chance, it becomes clear that our system has failed. The doubled-sword is now a "Bident", with both prongs facing us.

Guaranteed basic income and automation super link roundup

July 11, 2013 · Posted in Economics, Government, Politics · Comment 

It's finally entered the mainstream. The guaranteed basic income will have to be our transitional policy until we reach post-scarcity (and that's a long way off), and there's just no way around it anymore:

Share Or Die as a survival horror manual

Perhaps it should be titled “how to survive in an early post-apocalyptic zombie-infested wasteland”, with chapters like “collaborative consumption” guiding the way to how to divvy up scarce provisions and “unprepared” showing the disconnectedness and naivete of a formerly sheltered set of people (and how quickly the naivete dissipates when said people are thrust headlong intro reality.) In many ways, the rise of disaster fiction dovetails nicely with the follies and problems of our age. Originally created as a critique of mindless consumer capitalism, zombie survival-horror as a genre perhaps is now more apt as both a warning for those who have yet to experience this new world first-hand, and set of training videos for surviving it. Both the resurgence of these genres and the creation of this book, in retrospect, now seem to have been inevitable.

The book deals with a many issues related to our “New New Economy” (and I recommend that everyone read the original “The New Job Security” book, which I read back in the early 2000s. It turned out to be prescient quite quickly.) “Share or Die” deserves a lot of credit for putting personal stories and names to things that have been studied and detailed in the broad strokes, via discussions of policies like deregulation, downsizing, offshoring, outsourcing, widespread automation, and upper-income-bracket tax cuts; ballooning student debt, and the associated peonage of its debtors, as well as the fact that degrees have gone from proof of competence to the most basic of HR filters; short-lived traditions like “jobs for life” gone, and at-will employment treated the way you’d expect based on the label; the shrinking or disappearance of health benefits, our lack of universal health care, or paid leave; the dog-eat-dog economy where the dogs are getting hungrier as the opportunities shrink with each passing day; and a landscape which differs from the rosy  ”you can do anything if you only try” meritocratic fairytales pushed by our institutions, policymakers, teachers, and many others who grew up in an era (post WWII to Reagan) where standards of living seemed like they’d rise forever and opportunity for everyone seemed ever-present, and never-ending.

The book offers many ideas for coping – a few of which are worth entertaining – but are mostly just the ideas of people grasping for something, anything that will deliver us from this predicament. Unfortunately, the vast majority of ideas will not serve most people very well, or for very long. In this way, the ineffectiveness, indifference, or complete absence of societal institutions present in virtually every piece of zombie (and related disaster genres) fiction look like extremely fitting metaphors for our government, corporations, and charities. From the false promises of the “governments” of “Survivors” and “Threads” to their complete absence in “The Walking Dead” or “28 days later“, these pieces of fiction illustrate quite well the plight of those under 40, and increasingly, those over it, today. Those genres also shows what happens as the supplies run out, the crazy ideas which seemed to have a hope of working (the book) stop doing so, and the nerves are well past the frayed stage.

Share Or Die is an excellent, ground-level snapshot of our new age. An age without useful answers (only the same answers that have failed us for a long time), and without the promise of prosperity returning anytime soon.  An age which, to someone transported here from only two or three decades ago, would seem like a radically futuristic place (and it many ways it is.) The powerful devices in our hands, the always-connectedness, the truly instant communications, self-driving cars, the nascent “cyborging” of humanity, the medical advances, and a great many other wonderful things. It also looks like those other futures – the ones with the walled fortresses, and black seas; poverty; despair; wealth concentration; a growing underclass; social unrest and outright rebellions; rising political divisions; and a widespread lack of trust of just about everything

Lastly, there appears to be another parallel in the book to those movies and shows. At some point a few of the characters come to a terrible realization: that no help is coming.

The state and future of the nation-state

February 14, 2012 · Posted in Government, Politics, Sociology · Comment 

A response to: The Nation-State Reborn

Eventually we will probably have a global government. One language, one currency, immigration/emigration policies at parity, universal respect of human rights/civil liberties, "near-instant" transport, one system of labor and environmental laws, the works. That day, however, is a ways off. The Internet may be breaking down barriers, but not quickly enough or broadly enough to make this a reality in the next few decades. It will take time to have a global culture and consciousness, a belief in a shared set of values that people /actually/ agree on, rather than just pay lip service to. The "loyalty to real estate" that the ethicists referred to in the post decry perhaps should be considered an unfortunate relic of our tribalist past (It's an argument I'm highly sympathetic to.) An unfortunate, artificial barrier separating human beings from each other. That doesn't mean, however, that we can simply skip it or pretend it's going to disappear tomorrow. In a way, we really *need* their disdain of it; it serves to push the intellectual margin, even if we don't move towards the "ideal end game" anytime soon. We still need people thinking about it and preparing for it.

Those that are part of the "globetrotters" club get to experience this reality to a degree now. When they travel to another country, they meet others like themselves. Many may have similar interests, values, shared experiences and backgrounds (even if they come from different countries - they get to absorb the "culture" of the institutions they have been a part of - whether that be Harvard, Yale, or the IMF.) On top of that, they get to live life in whatever country that happen to be residing in or visiting in a very similar way. Just look at the "special zones" in various theocratic Middle Eastern countries that the diplomats, international business people, etc. stay in. You get to dress in a way you're accustomed to, drink, and socialize without interference from the national government. Tiny states-within-states.

All this perhaps gives us a preview of what a nation state-less future will be like. Combine this with superabundance and ultra-fast travel and we'll be on to the next stage of human society. A global one. A fair one. A barrier-less one. One where stereotypes about and hate towards humans goes away. Where we do not divide ourselves up based on how we look, where we were born, our what haplogroups we belong to.

Until that day comes, however, the nation state is the best we've got. We should figure out how to reboot it, reconfigure it, remake it, or whatever is necessary to make it work until we are actually able to reach that next stage of human society. I personally look forward to that day.


Response to: We Need a Second Party

This article by Thomas Friedman makes a relatively new, but familiar-feeling argument. The Republican party needs to change. It's outmoded. It's conflicted. It's woefully inequiped to deal with today's realities. His criticisms couldn't be more correct. In our song A Graveyard of Elephants we offer some of the exact same arguments. He's correct as far as it goes.

Where his analysis begins to fall down is where he begins to argue that today's incarnations of Conservatisms can be salvaged. By and large, this is completely wrong. In today's America, which version of Conservatism is worth saving? Which one resonates? Which one are Americans moving toward? As Alan Wolfe so eloquently states "In this entrepreneurial, mobile, innovative, and individualistic country, conservatism was constantly on the defensive, aiming to preserve things--deference, reverence, and diffidence, to name three--that most Americans were anxious to shed." This is more true than ever.

Religious or "traditional family structure" conservatism? Religion is on the wane (recent controversies notwithstanding - study after study backs this one up.) America is becoming more secular and more accepting of LGBT rights. Birth control is used regularly. Abortion, though a perennial topic, still has broad support, and will eventually be made obsolete by better methods of birth control (permanent and side-effect free.) More people are living alone or co-habiting than ever before. Single parenthood is hardly the shocking subject it once was. Staying single for life, open marriage, non-hetero marriage, polyamory, being childfree, and various other non-traditional family/non-family structures have entered the mainstream lexicon and, while not necessarily popular, are gaining acceptance.

Market Fundamentalism, a kind of "Conservatism" *(with built in contradictions), but in its current incarnation allows massive wealth concentration and poverty? Being rejected across the board - even large percentages of Republicans have rejected our current levels of wealth inequality. From the Tea Party to Occupy Wall Street, there's a rejection of this doctrine, even if some of the members of those movements don't always know it.

Other, lesser known Conservatisms will likely never be popular. Take Bioconservatism, for example. Cosmetic surgery is commonplace. We're replacing (and now growing!) limbs and organs and putting them on and inside people. How far are we from enhanced contact lenses (permanent, with AR overlays)? Implants which help us learn faster and remember more are likely to be as eagerly embraced as "smart drugs" are becoming in many circles.

So what's left for Conservatism? Only one thing really looks promising to defend: "Economic nationalism", which will mean putting America's economic growth and innovation first. This will of course mean shedding other kinds of Conservatism. Free Markets has money go wherever it's most likely to make a profit in the short term. If we're going to try to move to the next level, we'll need to take some of that "State Capitalist" medicine that China has been popping for a while. Technology investment, items with longer-term payoffs (or that may not turn a profit), 21st-century infrastructure/transportation development, initiatives for further city densification and all its attendant benefits (idea mixing, serendipity creation, etc.)

Friedman argues these things, but implies that we can do it by reinventing the Republican party - which may be true. Doing so, however, will mean jettisoning all of those Conservatisms in the process. It's Conservatism(s) against the world, and Conservatism which will need to be sacrificed.

We need big moves, big ideas, and an international, rather than domestic-focused competitive spirit. An ideology that puts American innovation at the forefront, and all the policies necessary to make that happen. That's the only kind of Conservatism left worth defending.

Our Restive Zeitgeist: song about protest movements around the world

November 16, 2011 · Posted in Announcements, Lyrics and Explanations, Music, Policy, Politics · Comment 

Listen to this song, Our Restive Zeitgeist, on Bandcamp.

As of this writing, it's been three years since the 2008 financial crisis ended. Over this time, many have wondered just what would happen we finally stopped reeling from the confusion, shock, and bewilderment at the scale of its effects. In 2011, we finally began to move from that previous state to one disappointment and despondency. Around the world, people have wondered just what, collectively, was next. Would we deal with corporate malfeasance; massive financial fraud; abysmal governance; the globalization of capital and faux-free trade that benefits a narrow minority at the expense of the many; growing wealth inequality; crumbling infrastructure; bailouts and corporate socialism; vanishing social mobility and increasing wealth and power concentration? In terms of reforms, it seems we've barely budged from those fateful days of Bear Stearns and Lehman Brothers. Much hand-wringing, and "what is to be done?" have occurred, but very little of actual consequence to fix, or even ameliorate our many ills has been accomplished, or in many cases, even attempted in the US or Europe. The social contract in these places has been broken, and no sign of imminent repair appears forthcoming.

The countries of the Middle East and North Africa have been different stories. Suffering for decades under tyrannical regimes, people in these countries have, one after another, been rising up and ousting their rulers. Much of this continues today, and the outcomes remain highly uncertain. Each country, of course, has its own set of unique historical circumstances and local grievances. One thing that has united them, is that in many of these places, a sort of social contract existed: trade your loyalty (and liberties) for guaranteed income streams, a sinecure, and fixed prices for staples. For a variety of reasons, this has broken down; we've been seeing the results.

Aside from the broken social contract, the one thing has united people in all these different regions and countries: disappearing opportunity. We've relied on governments and (mostly large) businesses to remedy our situation, but as has become abundantly clear, no help is coming. The latter was perceived to be reliable out of a mix of national interest-tinged self interest, the former because it is what we elect them to do. Instead, many of these large businesses have become untethered from their home country in this era of frictionless globalized capital, and easy access to low-cost (and in some cases, suffering under Mercantilist regimes) labor. Governments, on the other hand, have succumbed to Neoliberal, non-Ricardian-Free Trade ideology, internal division, pure incompetence, and myopia. Both, of course, have become parties to corruption, influence peddling, and the system of revolving door jobs. These last issues have become a central focus of many extant protest movements (and are the subject of our song "Mussolini's Revenge.")

Now, we've begun to reach a boiling point. Inchoate, at times unfocused, but rapidly coalescing around many of the issues above, this worldwide crisis has been decades in the making, and is the subject of this song. It's particularly focused on the crisis in the US and the attendant "Occupy" protest movement.

Lyrics start with a ">" and are italicized. Full lyrics without the explanation at the bottom.

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Job automation roundup

October 29, 2011 · Posted in Business, Economics, Government, Policy, Politics · Comment 

 Many articles about technology replacing labor, the future of the human workforce, and the potential for mass unemployment (and what that means for the welfare state) have been making the rounds lately. I'm listing some of the best here (some are older, but still very important) so there's a single place for them - and because it is one of the most important issues in the world, and will only continue to get more important:

Why workers are losing the war against the machines

Will robots steal your job?

The jobless future

Krugman and Delong on automation

Structural problems in the US labor market

American workers race against the machine

A post of  my own on the subject:

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