December 03, 2003

A Framework for the Economic Analysis of Technological Revolutions, with an Application to Nanotechnology

A Framework for the Economic Analysis of Technological Revolutions, with an Application to Nanotechnology

J. Bradford DeLong
U.C. Berkeley

Let me simply assert that a fruitful way to analyze the social and economic impact of every technological revolution that has taken place over the past two and a half centuries is to seek the answers to four different questions, and then to draw out the implications of those answers:

  • What commodities--what goods and services--become extraordinarily cheap as a result of the technological revolution?
  • What human activities--what jobs and skills--become key bottlenecks, and thus become remarkably valuable and well-paid?
  • What risks blindside the society as the technology spreads?
  • What risks do people guard against that turn out not to be risks at all?

These are the four questions.

Let me expand on my assertion, by applying them to the case of the original British Industrial Revolution, at the heart of which was the application of automatic machinery and steampower to the tasks of spinning and weaving--key handwork tasks for every human society since the domestication of the sheep. Over the forty years that were the heroic phase of the British Industrial Revolution, the price of spinning a cloud of cotton wool or wool wool into thread fell at an average of 5% per year. By 1830, the real cost of spinning thread was only 1/8 of what it had been 40 years before, and textiles--especially cotton textiles--became absurdly cheap. This was extremely good news for clothes-wearers in Britain and elsewhere. This was extremely bad news for first handspinners and then handweavers--whether in Scotland, Silesia, or Southeast Asia.

As textile production prices fell, the volume produced in Britain expanded perhaps thirtyfold. And this huge leap in demand pulled up the earnings of engineers who designed and maintained the textile factories, the metalworkers who built the textile machinery, and the merchants and salesmen who distributed the finished products. For the first two generations, little gain accrued to the factory workers themselves: factory workers were unskilled, and population growth plus large scale migration from the countryside meant that unskilled workers were not in short supply. But for those with places in the division of labor that made them essential complements to factory production, the Industrial Revolution was a true bonanza.

And there were other large-scale losers as well. Consider that in 1800 slavery in the United States was largely considered to be on the way out: few objected to Thomas Jefferson's prohibition of slavery in the Northwest Territories, or to his partial and anemic emancipation of his own slaves. But slaves could grow cotton. And as the Industrial Revolution took hold, the demand for cotton by British factories grew extraordinarily large. The value of what American slaves grew soared. The value of slaves soared. And in the American south emancipation became illegal, and unthinkable. This was a consequence of the British Industrial Revolution that nobody foresaw, and that nobody took any steps to guard against.

On the other hand, Karl Marx and Friedrich Engels saw a risk that wasn't really there at all. They looked at the factories of Manchester. They saw stagnant real wages, and horrible public health conditions, accompanying the extraordinary boom in productivity. They concluded that there was something very wrong with the market economy: that it could not generate an acceptable distribution of income. And so they founded world communism and dedicated it to collective ownership of the means of production and to the abolition of use of the market as a social allocation and planning mechanism. In retrospect, however, we can see that they sought to guard against a danger that wasn't there: the share of total production paid to workers has been remarkably constant over the past two centuries--the predictions of the immiserization of the working class were completely wrong.

That's how these four questions would guide an analysis of the original British Industrial Revolution. It seems a useful framework.

Now, assuming it is a useful framework, how would it guide our thinking about nanotechnology? What's going to become absurdly cheap? What human activities are going to turn out to be bottlenecks, and become well-rewarded indeed? What risks are we failing to guard against? What risks that aren't really there will wind up warping our society? And how big will it be? The computer-and-communications technology revolution we have been living through transforms twice as large a share of the economy as did the British Industrial Revolution, looks to last three times as long, and proceeds at a pace three times faster than the revolution in spinning and weaving: it is, relative to the size of the economy, eighteen times a bigger deal than the original. Will nanotechnology be a set of tightly-focused technologies revolutionizing small discrete sectors of the economy, or will it be broad and long-lasting?

I speculate that nanotechnology will come in three waves: a first--materials--wave over the next two technological generations, a second--biologicals--wave between one and four technological generations from now, and a final--Drexlerian--wave that may or may not ever come to be (for if engines of creation are possible, hasn't evolution had enough time to build them yet?). Things that know where they are, know what they are, can figure out where they need repair, and that for the first time ever possess macro strength and other properties that are the simple scaling-up of the strength of their covalent bonds--that is enough of a technological revolution in itself. The greater durability of "smart commodities" alone promises a halving of the size of the manufacturing workforce, coupled with the vanishing of large chunks of that part of the service sector that is concerned with diagnosis, maintenance, and repair. This is likely to give a further upward kick to income inequality: you don't need as many fence-painters when the paint is smart, you don't need as many warehouse workers when things can be programmed to tell their container to move them to where they need to be.

The human specialties that are going to be in short supply are likely to be some sort of analogues to programming: how to modify and install the new materials, and how to program the smart materials will be tasks that require considerable technical knowledge and information-processing skills. Virtually the entire twentieth century was marked by an extraordinary pace of American investment in education, as documented by Goldin and Katz. This extraordinary educational effort kept the supply of skilled and educated workers in America well in front of the skill requirements of current technology. Now American politics has shifted: this extraordinary educational effort is flagging, and there are no signs of the political will to restore it.

If information technology caused a sharp upward leap in the skill- and education requirements of the labor force that has caused a large chunk of our upward leap in income inequality, is not nanotechnology likely to do the same? And is not the pace of economic growth--the spread and use of nanotechnology-generated materials--likely to be constrained by a shortage of the highly educated and skilled materials technicians and programmers that we will need?

In this context, it is worth thinking about the role of foreign educational institutions. We do believe that each extra person educated in America is a national asset--boosting average productivity, and also helping to improve the income distribution by reducing the skill- and education premiums. Is it not in the American--although perhaps not the world--interest to incorporate this belief into our immigration policy? One of the chief things that has made America great, after all, is that we are the only country in which enthnicity is not closely linked to nationhood.

Within this framework, it seems possible that the coming of nanotechnology will act as a further wedge driving apart the American income distribution. In order to keep the income distribution tight, the premium on skilled and educated workers must fall--which means the supply of such workers must increase rapidly as nanotechnologies promise yet another shift of labor demand toward the highly-skilled and well-educated. Yet there are no signs in American politics of the renewal of the extraordinary educational effort which gave America such a huge edge over other advanced industrial economies in the twentieth century.

If it is indeed in the national interest--both for equity and for growth reasons--to take steps to greatly increase the supply in America of highly-skilled and well-educated workers, then immigration policy may turn out to play a key role. America is, after all, the only society that does not define its citizens substantially in ethnic terms.

About risks I will say nothing: I don't know enough to know what real risks we aren't guarding against, and what fake risks we are going to spend resources on. And I will also say nothing about the "biological" and "Drexlerian" waves of nanotechnology: my crystal ball is too cloudy, and they are too far away.

Posted by DeLong at December 3, 2003 11:03 AM | TrackBack

Comments

An interesting start, I would suggest that the first question is really two questions:

In the early phase the technological revolution is used to do cheaply what was expensive previously, with capital investment flowing towards projects which offer an immediate rate of return based on undercutting previous methods.

However, very quickly, the question becomes "what new areas of demand are openned?" Because the very nature of the first part is short lived: as commodities become cheaper, and the capital itself becomes a commodity, demand - willingness to pay - is actually eroded. The expensive cloth that was from a time before the industrial revolution becomes a commodity.

The first obvious area is to expand the market for existing products. But soon thereafterward, demand for new products opens up, and it is in this area that the real technological revolution takes hold. Consider that the industrial revolution created means of making cloth - textiles - before almost any other product. However, textile making rapidly stopped being the driving engine of industrialization. Instead, it was transportation of bulk goods - previously impossible - and the movement of large numbers of people to highly centralized "factories" - previously unneeded - which would remake the landscape. The railroad and the telegraph not only did what had been done before more cheaply, they were the result of a new kind of demand that had not existed previously.

Posted by: Stirling Newberry on December 3, 2003 11:32 AM

____

I'm skeptical about the claim that the fraction of GDP paid to the working class has been remarkably steady. We have seen enormous inequality in the United States in the late 19th century transformed into extraordinary equality (and elevated living standards) in the mid 20th century, returning to extraordinary inequality at the dawn of the 21st century.

Furthermore, income can be deceptive as an indicator, because so much of what constitutes the standard of living is not monetized. Wealth ownership is a better, though still imperfect indicator, and that has shown major fluctuations.

The biggest problem with inequality is the decline in democracy. When fewer voices are represented in national decisions, decisions are less well-reasoned.

I think the major issue we will be facing is the end of work. With such enormous improvements in productivity, why should anyone feel s/he has to to work (in the commercial sector)? What mechanism of wealth transfer is required to enable people to not work, yet remain useful citizens? And why won't elites decide that they simply don't need such a large excess of labor, wall off undesired zones, and let nature take its course?

Posted by: Charles on December 3, 2003 11:38 AM

____

Maybe this is heresy, but I'm not so sure that education is so critical. In the first place, the educational programs that are -now- available aren't likely to be particularly pertinant to technologies that haven't yet emerged. Second, historically, the first wave of specialists in new technologies tend to be self-educated-- the 'self-made man' of the early 19th century has a (possibly ironic) counterpart in the spaced-out computer hacker drop-out of the '70's.

When a technology matures, you get certified experts along with institutions that do the certifying, but all that comes later.

Posted by: Matt on December 3, 2003 12:10 PM

____

If education is the answer to inequality, then why has our experience with worker retraining programs been so very, very bad?

Here is something Paul Krugman had to say about education and inequality in 1994:

http://www.pkarchive.org/global/EuropeJobless.html

"The great problem facing the economies of the West, then, is how to deal with the trend toward growing economic disparities--how to get the incomes of low-paid American workers rising again, and how to draw Europe's reserve army of labor back into employment. Some optimistic economic analysts do believe that the problem of jobs and wages can be addressed at its source, with policies that reduce the underlying disparity of earnings. Observers like Secretary of Labor Robert Reich argue for education and worker retraining. In effect, optimists claim that such policies can both reduce the underlying inequality of skill levels and, by making the labor force as a whole more skilled, reduce the market premium on skill.

It is hard to escape the impression, however, that this is wishful thinking. Experience with worker retraining programs has not been encouraging. Raising the quality of basic education is high on everyone's list of priorities for the United States, but it will not even begin to have an impact on labor markets for at least a decade. And even if we do succeed in greatly improving the quality of basic education, the benefits are unclear. After all, many observers hold up France as an example of a Western society that continues to maintain effective classroom discipline and to teach the basics to virtually all students. Yet France has shared fully in Eurosclerosis and currently has an unemployment rate of 12.2 per cent.

Moreover, to the extent that income inequality is being driven by Rosen's "superstar" effect--that is, to the extent that competition is becoming a sort of tournament that only a few can win--boosting the overall level of skill may do little to reduce income disparities. For example, even a sharp improvement in the average quality of American singing would not change the fact that the big rewards go to a handful of big names.

In the long run, of course, the trend toward growing economic disparities is likely to reverse itself even in the absence of any deliberate policy action. The Industrial Revolution created huge inequalities in its first half-century, but eventually produced a middle-class society of unprecedented affluence. The Information Revolution will probably do the same. Unfortunately, the crisis of jobs and wages is here now and will not go away anytime soon."

I'm reminded of a depressing quote by the futurist Vernor Vinge: "The work that is truly productive is the domain of a steadily smaller and more elite fraction of humanity."

Implicit in the sentiments of both Krugman and Vinge (in my humble opinion) is the notion that the market premium is on skills which cannot be learned, and therefore cannot be taught.

The period from 1947 to 1973 was very equitable, and the periods both before and after were not. I've never seen any evidence that education had anything whatsoever to do with that change.

I think the correct explanation is a real downer: that low-skill work was in high demand only during the last roar of the Industrial Revolution, when manual labor became a significant bottleneck. Equality is the abberation, and inequality the norm.

Here come the flames. I can feel their radiant heat already. . . .

Posted by: Ann Nonymus on December 3, 2003 12:13 PM

____

molecular assemblage (by molecular assemblers :) may not even be possible... or is at least a lot harder and could take a lot longer than any booster would care to imagine such that practical applications shouldn't be considered for the "foreseeable future" and may indeed be more limited in scope owing to narrow "production techniques" that might be confined to biological processes as cells, afterall, have pioneered nano-biomechanical assembly and, after millennia of evolution, arguably provide an ideal template for nanotechnology...

http://science.slashdot.org/science/03/12/03/1341228.shtml

but if it is appropriate to be thinking about a nanotechnological world at this point, i think you're right to surmise that bottlenecks "are likely to be some sort of analogues to programming:"

http://www.edge.org/3rd_culture/lanier03/lanier_index.html

and in this regard the US does not seem to be adequately preparing the next generation for this task.

http://theregister.co.uk/content/7/33512.html
---
Barrett continued Grove's theme that the US was prepared to subsidize what he called "19th century industries" but not education to help technology investment.

"Fifty percent of advanced degrees go to foreign nationals," said Barrett. "We educate these people at taxpayer expense. They should staple a green card to their diplomas and let them stay here," he said.

Posted by: drk on December 3, 2003 12:16 PM

____

I think the idea that skills in short supply cannot be taught is disproved, to soe extent, by armies. Armies have two largely ignored, and unintended, effects on societies. The first, which may be ending now in the West, is that they are vectors of disease, and thus of disease resistance. For most of the time there have been armies, disease killed far more people than enemy action. This was true for the British army, for instance, up to the Boer War. The second thing they do is to teach, and to industrialise the teaching process. People join modern, volunteer armies in part because they hope to acquire marketable skills: that much is obvious from the advertisements. But it must also be the case that they get these skills, and are probably taught much more effectively than they would be in civilian life. Yet those techniques of teaching should be transferrable, if there is a demand. And, if Brad's right, there will be a demand.

Posted by: Andrew Brown on December 3, 2003 12:34 PM

____

"If information technology caused a sharp upward leap in the skill- and education requirements of the labor force that has caused a large chunk of our upward leap in income inequality, "

Is that "if" a confirmed hypothesis?

Anecdotally ... It seems to me that the infotech revolution arose from the dramatic DROP in the skill and education requirements -- exemplified by the so-called "killer aps" of spreadsheets, databases, and word processors.

Word processors put poor spellers and slow typists into arenas of composition and correspondence where they would never have competed prior. Spreadsheets, famously, allowed business people with no more smarts than the typical real estate agent ( pace, I mean no slur upon the profession) to begin spotting trends and forecasting developments that would never have been attempted prior.

The "geeks in the garage" syndrome where half-educated teenagers become millionaires was a staple of the recent boom years. ANYBODY could invent the next Yahoo, the next Google, the next Amazon, Napster, whatever ... it wasn't because these guys were "educated" in the formal Yale/Harvard/Berkeley sense, nor that they were "skilled" , like a basketball or chess or golf player after hours per day for dozens of years practicing the basic moves of the sport.
It seemed instead that the technology allowed any crazy idea to be pushed HARD. You want to search for intelligent signals in the radio background noise from space? The hardware allows it. You want to animate virtual LEGO pieces and recreate the movie "Star Wars"? The hardware allows it.
You want to sort a database of Aramaic word incidence collected from the Dead Sea Scrolls to put it all back into the original sequence? No problem. You want to invent brand new statistics for comparing, say, the pitching of Nolan Ryan to that of Cy Young? Bill James, meet Steve Jobs.
Have fun.

The technology, frankly, allowed POORLY EDUCATED and FOOLISH (but neither stupid nor lazy) people the luxury of attempting some very odd projects ... some of which happened to catch the fancy of enough others to make some of them incredibly wealthy.

Oh. You want to day-trade in the stock or commodities market, despite the fact that you have no training in high finance? Well, there's a sucker born every minute, and it's a free country, and the odds in playing the markets are no worse than playing the state lottery. So still there will be one massively successfuly winner for many thousands of losers ... and wealth inequality will increase.

I make no claim that these effects predominate. __I'M__ not a tenured Ivy League professor with background in the Federal Bureaucracy. I simply wonder whether or not it's a safe presumption that technology advantages the already-elite:
the well-educated, the well-connected, and the well-capitalized. Has this been historically true?
Or does the established upper class suffer erosion of wealth and power when something new comes along? The classic "buggy whip maker" going bankrupt when the automobile comes along, and a whole bunch of upstart grease monkeys jumping at chances to bite off a niche in the new era ?


Posted by: Pouncer on December 3, 2003 12:40 PM

____

"skills in short supply cannot be taught"...Maybe not, but we're assuming that people's brains will remain cognitively "au naturel". Neuroceuticals are likely to change that - see http://www.corante.com/brainwaves/ for more...

Posted by: Anna on December 3, 2003 12:47 PM

____

"The share of total production paid to workers has been remarkably constant over the past two centuries". In other words, it took two centuries of struggle: revolutions, ascendance of labor parties in main European democracies and New Deal in US to keep the workers' relative share in income distribution. Marxism is not an economic theory, it is an ideology and it was a potent weapon in organizing and leading workers for this struggle.

Posted by: Leopold on December 3, 2003 12:48 PM

____

"Fifty percent of advanced degrees go to foreign nationals," said Barrett. "We educate these people at taxpayer expense. They should staple a green card to their diplomas and let them stay here," he said.

In fact many of them choose to stay in the USA. Usually their country of origin has none of the thing that would profit from their advanced formation. If anything, it seems that it is the USA that is refractary to allow them in.

DSW

Posted by: Antoni Jaume on December 3, 2003 12:51 PM

____

"The share of total production paid to workers has been remarkably constant over the past two centuries". In other words, it took two centuries of struggle: revolutions, ascendance of labor parties in main European democracies and New Deal in US to keep the workers' relative share in income distribution. Marxism is not an economic theory, it is an ideology and it was a potent weapon in organizing and leading workers for this struggle.

Posted by: Leopold on December 3, 2003 12:53 PM

____

Wow, this is interesting. I admit I had always naively thought that the emergence of universal, programmable self-replicating machines would render much economic theory obsolete--and machines of superhuman intelligence would probably do in the rest.

I'm not so sure about that anymore, but it is very unusual--and overdue--and welcome--to see a response to the challenge from a serious economist.

I may be completely wrong, but I always felt that the nanotechnology part was a red herring, and the significant point was universal, programmable self-replication--basically production without people but which is capable of realizing anything that can be designed. This could come in the form of nanotechnology; it could be aided by genetic engineering (adding programmability to living things); or it could arrive in a huge automated production system: mining robots send resources on computer-driven trucks (on robotically maintained highways) to fully automated factories that build robots. In the last case, nobody plans it but one day we just wake up to discover that we've laid off everyone in manufacturing but the goods are still showing up at Walmart :)

I don't have a response to the specifics, but one thing caught my eye:
> (for if engines of creation are possible, hasn't evolution had enough time to build them yet?).

I don't think evolution is relevant. Evolution (at least on this planet) hasn't built a creature that can go strolling through a hard-radiation site, or test prospective Mersenne primes up to insanely large values. However, humans, suitably augmented can do that now. Evolution will not result in everything that can possibly exist, just in a variety of systems that are very effective at survival and reproduction. You'd have to claim that "engines of creation" are more suited to the current survival niche of terrestrial life than humans or cockroaches (or other lifeforms) for that to be relevant.

On the other hand, if Drexlerian nanotechnology is possible it seems a safe bet that it exists somewhere in the universe, since it would be very useful to an intelligent lifeform (or would seem very appealing at first glance). If you want to extend your definition of evolution, then it is a product of evolution--the creators had to evolve. It just isn't a product of evolution in the part of the universe observable to those posting on this board.

Posted by: Paul Callahan on December 3, 2003 12:57 PM

____

Now that I think about it, I seem to remember that there was a serious problem keeping kids in school during the equitable boom from 1947-73. Jobs which paid well were available for the educated and uneducated alike. As the inequality of the modern era set in, factory workers desperately tried to get their children educated in hopes of sparing them the agony of the declining standard of living they were forced to endure. Those hopes were dashed, and very harshly so.

It looks to me like the fluctuations in equality observed in the industrialized world during the 20th century were caused by changes in the economy's demand for different kinds of labor, and *not* by changes in the supply or composition of human capital.

Posted by: Ann Nonymus on December 3, 2003 01:06 PM

____

"I think the major issue we will be facing is the end of work."

jeremy rifkin's "the end of work" addressed just this sort of scenario -- the hypothetical island economy where one person owned the machine that when you turn the crank produces all that one wants and needs, only nobody could afford it. his solution was ironically some variation of hayek's guaranteed income or friedman's NIT, i.e. a "social wage." bob black rightly criticized ( http://t0.or.at/bobblack/futuwork.htm ) the idea as the beginning of a formation for some kind of an elite 'eloi' utopia with a vast 'morlock' underclass.

still, i think there is something to recommend reformulating "the economic problem" in some kind of future "era of abundance." indeed, robert heilbroner once posited such a "paradigm shift" saying,

"We live in a period in which much of the conventional wisdom of the past has been tried and found wanting. Economics is in a state of self-scrutiny, dissatisfied with its established premises, not yet ready to formulate new ones. Indeed, perhaps the search for a new vision of economics, a vision that will highlight new elements of reality and suggest new modes of analysis, is the most pressing economic task of our time."

and were an economy not based upon scarcity and acquisitiveness:

"Perhaps in a different society of the future, another hypothesis about behavior would have to serve as our starting point. People might then be driven by the desire to better the condition of others rather than of themselves.

"A story about heaven and hell is to the point. Hell has been described as a place where people sit at tables laden with sumptuous food, unable to eat because they have three-foot long forks and spoons strapped to their hands. Heaven is described as the very same place. There, people feed one another."

of course, then one might reasonably inquire about what kind of financial system and curreny attributes would facilitate or accommodate such an "e-conomy..."

http://www.transaction.net/money/cc/cc01.html

Posted by: drk on December 3, 2003 01:13 PM

____

I just read Crichton, and reread Bear's Blood Music and I don't wanna think about this.

Seriously, some respected techie(my very bad) ranks nano above bioterrorism and robotics as what is likely to destroy the human race in the next century

Posted by: bob mcmanus on December 3, 2003 01:19 PM

____

> Seriously, some respected techie(my very bad) ranks nano above bioterrorism and robotics as what is likely to destroy the human race in the next century

It seems that there are two orthogonal axes: one is efficacy at destroying the human race, and the other is attainability. Nano in the "gray goo" scenario is probably more effective than bioterrorism (surely some humans will be immune or at least get into shelters quick enough). But it's easier to extrapolate bioterrorism from existing technology. Nanotechnology is still pretty theoretical.

I'm revealing a quaint nostalgia for the cold war here, but frankly I think that if the human race ends (really ends, mind you, not just gets set back ten millennia) in the next century that the culprit will most likely be thermonuclear weapons.

Posted by: Paul Callahan on December 3, 2003 01:30 PM

____

Two things:

1. Bottlenecks - isn't education and social mobility strong enough today to make bottlenecks much less of a problem than it were during the industrial revolution?

2. Economic importance of new technology - hasn't hours required in farming and manufacturing shrunk enough to make tech (in the 1st world) less important now than during the industrial revoulution? Will nanotech make you a much better parent, spouse, salesman, customer, lawyer, friend, politician, voter, professor, student?

I'm sure new tech will be good for a lot of things, but will it really change the big picture the way spinning machines did?

Posted by: Mats on December 3, 2003 01:50 PM

____

Charles:

I _think_ when Brad says "worker", he means anyone who gets paid to work. That includes engineers, sales people, and executive vice presidents. In this analysis, a "non-worker" would be someone who gets paid just for owning capital.

The increase in inequality in the US over recent years has been driven by increasing inequality in wage income. CEOs and lawyers still work for a living -- they just get paid a fortune for doing so.

Posted by: Walt Pohl on December 3, 2003 02:19 PM

____

By taking a broader historical view, as developed by Carlota Perez in her seminal work, Technological Revolutions and Financial Capital, we can see that we are nearing the fourth and final stage of the information technology wave.

Carlota contacted me a few months ago about my piece on the neurotechnology wave, wherein I describe how NBIC technologies will converge to create a new low cost input useable across industries - the complete biochip. She called it, "bold and impressive." Take a look at my daily blog on our emerging neurosociety for more:

http://www.neurosociety.net

For the specific paper on the "Neurotechnology Wave 2010-2060" see:

http://www.corante.com/brainwaves/archives/000450.html

As far as nanotechnology is concerned, I see it as an enabler. Just as information technology required electrification before the industries centered on microchips, software and the web could impact society, neurotechnology depends on advances in both nanotechnology and information technology for its potential to be realized. In one sense there is nothing new about nanotechnology. Every piece of technology ever built has involved the manipulation of atoms at some scale. What makes nanotechnology different is that we can manipulate individual atoms and place them in unique combinations. By controlling matter at the atomic scale, it will be possible to make materials that are stronger, lighter and more flexible than can currently be manufactured. These new precision materials will be used to develop increasingly more accurate machines that can manipulate matter further.

Posted by: Zack Lynch on December 3, 2003 02:36 PM

____

On comparisons: wouldn't the suitable comparison be the development of the German chemical industry in the early 1990s (drop in price of dyes, etc).

Nanotech is just smarter organic & inorganic chemistry, after all.

Posted by: Tom on December 3, 2003 02:50 PM

____

Walt Pohl says, "I _think_ when Brad says "worker", he means anyone who gets paid to work. That includes engineers, sales people, and executive vice presidents. In this analysis, a "non-worker" would be someone who gets paid just for owning capital.
The increase in inequality in the US over recent years has been driven by increasing inequality in wage income. CEOs and lawyers still work for a living -- they just get paid a fortune for doing so."

I agree with that definition and don't believe anything I said contradicts this. CEOs and lawyers are simply highly atypical workers, most of them part of the upper middle or lower upper class (with a handful of both being in the true upper class, i.e., their primary income is from ownership of capital).

Posted by: Charles on December 3, 2003 03:07 PM

____

One thing that isn't mentioned is social control - who can grab the cash flow, and skim a chunk off. For example, health care seems to be a nice, boyant industry, because the standards rise as wealth rises. People like being alive and in good health, and will pay a lot.

However, in the last decade (two decades?), doctors and nurses took it on the chin. In the case of nurses, this was despite the fact the the effects of feminism pulled women away from nursing; the opening up of other professional careers should have helped nurses.

The reason, IMHO, was that HMO's and large hospitals established themselves as middlemen, whose major strength was the ability to collectively bargain with medical people (and in the case of HMO's, to collectively bargain with individual hospitals).

Posted by: Barry on December 3, 2003 03:43 PM

____

But the industrial revolution didn't make weavers poorer, it made them "richer". This is a dangerous half truth, the other dangerous half being a statistical artefact.

Look at what actually happened. First, industrially produced yarn got cheaper and weavers actually got better off (indeed, quite a few invested in their own trade, which was shortsighted). This compares with Thomas More's picture of weavers suffering during the early Tudor period, portrayed early on in Utopia.

Then came the statistical artefact, survivor bias. Weavers prospered, the very few that remained after a transition, but they suffered during a transition that drove most out of the industry. It is this group that really suffered, but surviving weavers - a tiny group of specialists - returned to prosperity. Only ex-weavers suffered in the long term.

I only bring out that last travesty as it is being presented to us as we speak, with all sorts of globalists saying how much better off New Zealand farmers are these days, etc.

But the significance of all this to nanotechnology is, we should also be asking which activities might get a temporary boost followed by a long term decline. Me, I think IT work itself is one of these, along with all those other knowledge engineering things - and Brad de Long's views on what will be needed are analogues of someone in the 1780s saying Britain was going to need more weavers because of the mechanisation of spinning.

Posted by: P.M.Lawrence on December 3, 2003 03:44 PM

____

A very interesting post and thread. I believe Tom is right (and not just because of the name) in comparing nanotechnology (that is, technological applications of chemistry and biochemistry) to the original industrial chemistry development in the 1890's.

Brad -- if you pursue this, I strongly recommend you leave out the Drexler stuff. The man is, IMHO, a snake oil salesman who doesn't know his stuff. The Chemical and Engineering News debate pointed to by drk above, at http://pubs.acs.org/cen/coverstory/8148/8148counterpoint.html , shows the difference between someone who actually knows his chemistry (Richard Smalley) and someone who doesn't.

Posted by: Tom Slee on December 3, 2003 03:59 PM

____

The Gini index did in fact decline between 1947 and 1968 and then increase steadily between 1968 and 1992. But if you look at the distribution of income in the U.S. in the post-war period -- http://www.census.gov/hhes/income/histinc/f02.html -- I think it's very hard to see the period of "extraordinary equality" followed by a period of "extraordinary inequality." America has just never had that much income equality.

(The table's numbers are skewed because of two statistical changes that were implemented in 1994 -- changing the numbers beginning in 1993. First, the amount of maximum income reported was increased, and computer-assisted personal interviewing was introduced. This makes the best apples-to-apples comparisons the periods from 1947-1992 and from 1993 to 2001. The data from 1993 to 2001 reflects real inequality better than the pre-1993 data, but to make historical comparisons you have to adjust the income share of the wealthy in the pre-1993 period upward. Unfortunately, the Census Bureau doesn't know by how much, though it suggests that a third of the increase in the income of the wealthy between 1992 and 1993 was due to the higher reported income.)

Regardless, the table shows that there was only a small change in the shares claimed by the various quintiles between 1947 and 1973. It did take the form of a shift from the top quintile (and the top 5 percent) to everyone else, but we're only talking about a total shift of 1.9% of national income. And there was an increase in inequality between 1973 and 1992, with 3.6% of national income being moved from the bottom three quintiles to the top. (Between 1947 and 1992, obviously, the increase in inequality was smaller.) Between 1993 and 2001, meanwhile, there was little change.

The one group that did see its fortunes really change, of course, were the top five per cent, which saw its share of national income decline by 11% between 1947 and 1973 and rise by 35% between 1973 and 2001 (this is unadjusted, which means it's really probably closer to 20%). But I'm hard pressed to see how the difference between getting 16 or 17% of the nation's income and 21% of the nation's income is the difference between democracy and aristocracy. (These numbers, of course, don't include non-cash transfers or health insurance, which would narrow the overall inequality gap, though I'm not sure what effect they would have on change over time.)

Labor's share of national income has stayed relatively constant around 70% in the postwar period: http://web.mit.edu/krugman/www/greider.html. Even more strikingly, it's stayed constant since 1929: http://www.econ.umn.edu/%7Erkhleung/macro3102/fig3.pdf. Labor costs as a share of the output of nonfinancial corporations hit an all-time high in 2001: http://netscape.businessweek.com/magazine/content/02_13/b3776001.htm. Corporate profits and return on capital oscillate wildly, but there has been no upward trend since 1959 in the rate of profit growth or the rate of return, and I believe the period of best sustained return was the 1960s.

Also, it seems pretty clear that the biggest changes in inequality and the real damage to the average worker's income was done during the 1970s and 1980s. That doesn't make the damage any less real, but certainly there's no evidence that things have gotten worse in the past decade. On the contrary, real average and hourly wages rose throughout the 1990s, and rose sharply after 1995, when the productivity boom began. And distribution has changed hardly at all.

Walt's point is right. In Piketty and Saez's study of income distribution between 1913 and 1998, they show that a majority of the people in the top 1% of the income spread "derive a substantial fraction of their income in the form of salary." Of course, I assume that includes many overpaid CEOs, whose "salaries" are more like unearned rents than earned compensation, but the shift away from capital income to salaried income is nonetheless important.

Posted by: James Surowiecki on December 3, 2003 04:29 PM

____

Just to clarify the technical point about the 1993 change: 1/3 of the increase is due to the change in reported income, half to the change in methodology. In any case, the point is that almost all of the increase in the shares of the top fifth and the top 5% between 1992 and 1993 is the result of a statistical change, not a change in real income between 1992 and 1993.

Posted by: James Surowiecki on December 3, 2003 04:40 PM

____

There's an awful lot of hooey here. First, about education. While it is true that real wages for scientists and engineers are in long-term decline, this is of course untrue for specific sectors of science and engineering. The assertion that skills relevant to a post-revolution economy are unteachable is utterly untrue: the new technologies will demand engineers, and only those with the relevant backgrounds will be capable. The new technologies will (1) be built on physics, chemistry, and biology, fields about which we already know a great deal; and (2) need to interface with existing technologies. Consequently, people who understand physics, chemistry, and one or more existing core technologies will have an enormous edge over those who don't. The arguments about retraining are hogwash. Retraining doen't work because the relevant skills generally need to be learned at an early age. Attainment of competence in a technical field typically takes at least a decade (often starting for engineers and scientists in high school or college), and technical concepts are more easily grasped if introduced early. A background in physics, chemistry and biology also protects one from the grey goo: a descriptor of the hooey tossed forth by many overly enthusiastic boosters of nanotech, many of whom know a good deal more about software or finance than about the properties of matter.

Posted by: CD318 on December 3, 2003 04:42 PM

____

There's an awful lot of hooey here. First, about education. While it is true that real wages for scientists and engineers are in long-term decline, this is of course untrue for specific sectors of science and engineering. The assertion that skills relevant to a post-revolution economy are unteachable is utterly untrue: the new technologies will demand engineers, and only those with the relevant backgrounds will be capable. The new technologies will (1) be built on physics, chemistry, and biology, fields about which we already know a great deal; and (2) need to interface with existing technologies. Consequently, people who understand physics, chemistry, and one or more existing core technologies will have an enormous edge over those who don't. The arguments about retraining are hogwash. Retraining doen't work because the relevant skills generally need to be learned at an early age. Attainment of competence in a technical field typically takes at least a decade (often starting for engineers and scientists in high school or college), and technical concepts are more easily grasped if introduced early. A background in physics, chemistry and biology also protects one from the grey goo: a descriptor of the hooey tossed forth by many overly enthusiastic boosters of nanotech, many of whom know a good deal more about software or finance than about the properties of matter.

Posted by: CD318 on December 3, 2003 04:44 PM

____

This is so tangential it's almost embarassing but...
"for if engines of creation are possible, hasn't evolution had enough time to build them yet?"

Natural selection does not necessarily produce optimal outcomes. It is constrained by its current state (and by time). Thus, while wheels are a great way to get around some terrain, there are no macroscopic animals that use them.

I only mention it bc this is a common Creationist argument- "if natural selection produces optimal outcomes, why doesn't X exit?"

Apologies for inserting a mini-diatribe about a completely rhetorical point...

Wu

Posted by: Carleton Wu on December 3, 2003 05:05 PM

____

Charles: I was clarifying that Brad was not (I think) making a claim about the amount of national income went to the working class, but a claim about the amount of national income that was paid out as salary as opposed to return on capital. That is a figure that has remained (freakishly) constant.

Posted by: Walt Pohl on December 3, 2003 05:09 PM

____

As to the distribution of wealth, it seems to me that the production of real wealth in modern industrial economies involves the combination of all sorts of disparate efforts from disparate individuals, such that the exact contribution of each individual can not be precisely measured in many cases in terms of marginal product. Precisely what the contribution of, e.g., a janitor and a CEO is to the overall output of an organization is not clear cut, though it can be guessed that the CEO's contribution is larger, more essential and less substitutable. But it seems to me that this basic unclarity about productive inputs to a large organization highlights the issue of social control within such organization, as it is those individuals and groups within the hierarchical structure of such organizations that occupy key points in determining the flow of revenues within the organization, call them, if you will, the "insiders", who can extract from the overall productive surpluses of the organization the equivalent of rents from external markets. Yes, e.g., corporate lawyers may, in fact, work long hours filing paperwork and torturing precedents to fit the most dubious and arcane of contentions, but these efforts usually are not directed toward irremediable conflicts over rights and wrongs, but are merely strategic moves in competitions to assert and secure claims to productive surpluses generated elsewhere and otherwise. Hence to claim that circa 1900 elite wealth was derived from the ownership of capital whereas nowadays it derives from real work strikes me as a factitious and dubious claim. This is more a matter of immense changes that have taken place since in social, legal and organizational structures than of any alteration in the basic modality of the organization of production at the behest of the extraction of surplus-value. There may be an agent/principal problem here, but it is more a case of the blurring of the agent/principal distinction. But to claim that such distributions of wealth are purely the outcome of the implacable, neutral and objectively necessary operation of market processes is question begging , at the very least. Such an explanation works best for determining the wages of labor and the lower the wages the better. Perhaps in the light of currently dizzying prospects for technological development and the conundrums about employment and distribution that they would seemingly engender, it is overdue to put the "political" back into political economy.

Posted by: john c. halasz on December 3, 2003 05:31 PM

____

John, it's clearly not factitious in the most banal sense, which is that many more rich people today actually have jobs and go to work than did in 1900. I mean, Veblen's entire argument in "Theory of the Leisure Class" is predicated on the idea that the wealthy view work as "intrinsically base" and abstention from it as a "requisite of decency." Certainly the people who have been driving the shift in the upward distribution of income over the past thirty years don't view work in that way at all. That's a meaningful change, which Piketty's and Saez's data reflect.

Also, I don't think there's any blurring of the agent/principal distinction. There is an agent/principal conflict, and too many corporate agents, at least in the 1990s, exploited that conflict to their own advantage. That's why I'd agree that a good chunk of the shift in income has little to do with "market processes."

Posted by: James Surowiecki on December 3, 2003 05:48 PM

____

Apropos "Drexlerian" nanotechnology: http://pubs.acs.org/cen/coverstory/8148/8148counterpoint.html

I saw Drexler speak over a decade ago in front of a group of physicists at Stanford. I remember thinking at the time that did not stand up well to questioning by hard scientists. I'd put my money on Smalley.

Posted by: Fabio Lanzoni on December 3, 2003 06:04 PM

____

It suddenly occurs to me that if you rule out "Drexlerian" nanotech as Prof. DeLong does to make the question tractable (and several posters do because rightly or wrongly they don't believe it's possible) then you could substitute other new technologies and the question would be equally interesting.

Without nanoassemblers, nanotech is certainly promising, but it's essentially advanced materials science. Surely that will have a significant economic impact, but no more so than biotech, robotics, or even IT. Substitute any one of these fields, and you get an equally interesting topic for a paper, I think. None of these technologies have played out to anything close to their full economic impact.

I know a lot of you probably think there is nothing interesting left in IT but (a) there are gaping bottlenecks in its current application or how else (for just one instance) could a company make money by renting DVDs on the web and sending them by post, and (b) consumers may not need (or think they need) faster computers, but pure computation power is an enabler of other technologies and there is really no limit to how much you can usefully apply to optimization problems (vital to computer-aided design). More powerful, more connected computers will lead to a qualitative change in IT.

I did sort of interpret the original question as "How will cheap automatic assembly of very high quality goods change things?" rather than "How will molecular-scale devices and amazing advances in material strength change things?" Now I'm not sure if I was correct in this interpretation.

Posted by: Paul Callahan on December 3, 2003 06:14 PM

____

"America is, after all, the only society that does not define its citizens substantially in ethnic terms"

WTF? Firstly, all the immigrant societies (Canada, Australia, Argentina, Brazil, etc) have avoided this. Secondly, nation-building in Africa involves explicitly creating a national identity to override ethnic identities - the failure to do this in many places is the cause of the failure of the nation.

You yanks need to look outside your own boundaries more.

Posted by: derrida derider on December 3, 2003 06:30 PM

____

"America is, after all, the only society that does not define its citizens substantially in ethnic terms"

WTF? Firstly, all the immigrant societies (Canada, Australia, Argentina, Brazil, etc) have avoided this. Secondly, nation-building in Africa involves explicitly creating a national identity to override ethnic identities - the failure to do this in many places is the cause of the failure of the nation.

You yanks need to look outside your own boundaries more.

Posted by: derrida derider on December 3, 2003 06:31 PM

____

The question of natural resource constraints occurs to me in connection with these new technologies. Increases in real material wealth remains possible insofar as the "distance" between initial raw material inputs and final consumption outputs in industrial processes can be increased, whether this is conceived as an increase in the number of value-added steps or in the sophistication of products. But the capacity to simply add to the stock of consumable things through the exploitation of natural resource reserves and the application of well-established industrial technologies will increasingly come against the growth in population and the decline in usable natural resource reserves. Already world oil production is projected to peak within the next decade- estimates vary, but not greatly-, after which output will begin to decline and marginal production costs will rise even as international demand continues to rise. Rather than simply promising a cornucopia of unheard of new gadgets, isn't the promise of these new technologies precisely to increase the technical productive efficiency of energy and other natural resource usage? If so, what is to direct their development in this direction? Would market pressures be sufficient, particularly with respect to projecting and predicting future constraints and disruptions, or would some sort of strategic steering capacity, measured and monitored in terms of technical criteria, need to be developed?

Posted by: john c. halasz on December 3, 2003 07:02 PM

____

Paul Callahan has it right. "Without nanoassemblers, nanotech is certainly promising, but it's essentially advanced materials science."

Nanotechnology is a neat word, but it leads people to think this as something brand new -- a discontinuity, a revolution -- rather than a continuation of current research and science-based technology. Just as the publicity-hungry nanovangelists want us to think.

There is still a lot of interesting things that can and will be done on the small scale, with smart materials and macromolecular chemistry and so on, but is nanotechnology a "technological revolution" as the subtitle of the original post suggests, distinct from the current one? I think not.

Nanotech is one more fad along with catastrophe theory, chaos theory, complexity theory, and so on. It's not that there is nothing there, but the (not necessarily revolutionary) scientific and mathematical content is surrounded by a large cloud of hype.

The moral of this particular rant: A cool name does not a revolution make.

Posted by: Tom Slee on December 3, 2003 07:25 PM

____

Those claiming that it's geeks with little education that have profitted from IT revolution are fooling themselves.

As an IT Professional I work with various bright people whose primary education is not IT (many maths degrees, physics degrees, and philosophy students who studied formal logic really hard). But if you have a good IT degree, especially at a masters or PhD level, then there is a shortage of your skills and your pay is embarrassingly good.

Posters here seem focussed on the entrepreneurs like Bill Gates and Steve Jobs rather than on the technical people. Yup, businessmen will always do well without formal education, especially if (like Bill) your dad is able to pony up several million to help you get started.

But the techs who created html, http, the internet, systems like Yahoo or Word, languages like C, C++, Java, SQL, the bank system you use, the system your airline uses - these are build by highly educated, highly trained, highly skilled techs. The self-educated geek with nothing more than a high-school education can be technically brilliant (and I know a couple who are). But that's the exception, not the norm.


Sean

Posted by: sean on December 3, 2003 08:33 PM

____

Pollution? Resource utilization/limitations? They are often overlooked.

Posted by: bakho on December 3, 2003 09:41 PM

____

Wow! What an incredible disconnect between economics and the true sciences! Brad, I emplore you to talk to a physicist about the First and Second Laws of Thermodynamics. You need to know that if you postulate little nanotwirps who can move themselves around they NEED AN ENERGY SUPPLY. Where is it? Secondly, if it is assumed that these animacules can replicate themselves, then for each nanotwirp produced, an equivalent
amount of negentropy must be extracted from the environment (2nd Law).
Biological twirps have been shaped by evolution to carry out these functions.
You should also speak to a biologist.
Scepticus

Posted by: Scepticus on December 3, 2003 11:39 PM

____

Richard Feynman gave a talk in 1959 http://www.zyvex.com/nanotech/feynman.html, exploring the world of nanotechnology. It’s still worth reading. When you get down to the really small-- on the order of 100 atoms—you must consider the effects of quantum mechanics, and this sets some fundamental limits on what can be done.

There is still no shortage of technically trained people; as a matter of fact there really isn’t a shortage of anything, especially computer scientists. It’s a sobering fact that computer scientists with PhDs are now advised to conceal that fact when looking for a job in the commercial sector. Any young person is well advised not to major in mathematics, physics, engineering, chemistry etc. Especially mathematics and physics where the length of your career will be close to zero. Need a physicist? I can supply you with carloads of great, smart hardworking people who can’t find jobs in physics because of the extreme surplus we have. Go type “mathematician” in any of the popular job search engines if you don’t believe me.

Posted by: A. Zarkov on December 4, 2003 02:09 AM

____

'America is, after all, the only society that does not define its citizens substantially in ethnic terms. '

Brad - you were in Canada last summer. You should know better. The foreign-born populations of Canada, Australia and New Zealand are proportionately higher than in the USA.

Posted by: Peter vM on December 4, 2003 03:26 AM

____

Just wanna remind everybody in this very distinguished pack of Marvin Minsky's good quip "Who says our descendants have to be made out of meat?"

Posted by: David Lloyd-Jones on December 4, 2003 06:01 AM

____

Paul Callahan:

"I know a lot of you probably think there is nothing interesting left in IT but (a) there are gaping bottlenecks in its current application or how else (for just one instance) could a company make money by renting DVDs on the web and sending them by post, and (b) consumers may not need (or think they need) faster computers, but pure computation power is an enabler of other technologies and there is really no limit to how much you can usefully apply to optimization problems (vital to computer-aided design). More powerful, more connected computers will lead to a qualitative change in IT."

At a guess, the current bottleneck is still programming. That's what connects the real-world person with the computer's computational capacity. This has improved quite a bit in the past couple of decades, but it could still be improve quite a bit more.

The spreadsheet's strength was that it connected the computational power of a computer with somebody who understood finance/accounting, but who wasn't a programmer. I've heard that the almost unanimous reaction of programmers to Visicalc was "that's not hard, I could whip up a program to do those calculations", meaning that they could set up something which would mimic a single spreadsheet.

The power was that people who weren't programmers could whip up spreadsheets themselves, for each an every application they might desire.

An aside: this is actually a major example of open-source programming. Visicalc didn't sell spreadsheets already set up; it sold the ability to set up spreadsheets. Millions of individuals set up what they needed, and could trade these set-ups. Thousands of individuals could sell these set-ups.

Posted by: Barry on December 4, 2003 06:05 AM

____

"Those claiming that it's geeks with little education that have profitted from IT
Those claiming that it's geeks with little education that have profitted from IT revolution are fooling themselves."

Speaking as one of those who do so claim, I
confess it MAY be true. But the following
is not the argument to convince me.

"But if you have a good IT degree, especially at a masters or PhD level, then there is a shortage of your skills and your pay is embarrassingly good. "

This sort of overly focuses on the direct profit of the industry workers. But the INDIRECT profit to those applying I.T. tools for Non-I.T. functions is more interesting. What do we say of the grocery store manager who uses the tools to reduce costs of slow moving or stale inventory? The car salesman who can access particular make model color option data for not only his own showroom but every dealership within any given radius? The nurse who can take a patient's temperature in seconds rather than minutes? There is NOT a huge difference in educational
investment required from the rare-I.T. era of
the early 1980's to the ubiquitious-I.T. era of today. But there are huge opportunities for those who adopt the tools to boost their profits and productivity (and enjoyment and quality of life) in many matters great and small.

These are the opportunites drive that income inequality Brad worries about, it seems to me; and taking up the new tools doesn't take the educational investment that DEVELOPING such tools requires. (It's the enhanced profit to the tool users that enables them to pay those embarrassingly good salaries to the tool makers. It would seem to me that this has been true since the first band of African Plains Apes decided that the the very best flint-knapper could, if he wanted, opt out of the actual hunt and spend his day edging those really nice spear points that he enjoyed making -- while still getting a haunch of venison at the nightly BBQ. )

Posted by: Pouncer on December 4, 2003 06:42 AM

____

Anyone remember HTS? – About 15 years ago, everyone was saying High Temperature Superconductors would be the next revolution. Twenty years before that is was fusion reactors, and ten years before that... Well for the past five years its been nanotech and fuel cells, neither of which will amount to much on the big scale of things. Sure, nanoscience is incredibly important to computer technology in general and memory storage in particular, and a few other applications are emerging (crash detectors for air bags, tire pressure sensors, etc.), and there will be some neat applications in genotyping and a few other areas. But most of the other hyped applications depending on self-assembly seem likely to fissile – as some have noted, there are issues of energy and entropy. I doubt the economic impact of nanotech outside the above mentioned developing applications is unlikely to exceed $10B two decades from now. (Anyone know of any real applications for nanotubes, at $3000/lb.) It would be nice to see a list of real applications and their projected significance. And forget hydrogen fuel cells. It ain't gonna happen. Check out the Energy Forum at http://deanissuesforum.com/ for some serious, objective scientific analysis on our energy future, or the Science & Tech Forum (same site) for some other useful perspectives.

Posted by: F. David Doty on December 4, 2003 07:56 AM

____

Could somebody explain to me why equality of income is a good thing? It seems to me that equality is easily achieved: make everybody poor.

Posted by: Russell Nelson on December 4, 2003 08:01 AM

____

Anyone remember HTS? – About 15 years ago, everyone was saying High Temperature Superconductors would be the next revolution. Twenty years before that is was fusion reactors, and ten years before that... Well for the past five years its been nanotech and fuel cells, neither of which will amount to much on the big scale of things. Sure, nanoscience is incredibly important to computer technology in general and memory storage in particular, and a few other applications are emerging (crash detectors for air bags, tire pressure sensors, etc.), and there will be some neat applications in genotyping and a few other areas. But most of the other hyped applications depending on self-assembly seem likely to fissile – as some have noted, there are issues of energy and entropy. I doubt the economic impact of nanotech outside the above mentioned developing applications is unlikely to exceed $10B two decades from now. (Anyone know of any real applications for nanotubes, at $3000/lb.) It would be nice to see a list of real applications and their projected significance. And forget hydrogen fuel cells. It ain't gonna happen. Check out the Energy Forum at http://deanissuesforum.com/ for some serious, objective scientific analysis on our energy future, or the Science & Tech Forum (same site) for some other useful perspectives.

Posted by: F. David Doty, PhD on December 4, 2003 08:02 AM

____

Could somebody explain to me why equality of income is a good thing? It seems to me that equality is easily achieved: make everybody poor.

Posted by: Russell Nelson on December 4, 2003 08:06 AM

____

I like that you are bold enough to speculate as to what will happen with this new revolution (if it ever happens). Personally, I don't think any speculations can be made as of yet.

I strongly disagree with your statement
"America is, after all, the only society that does not define its citizens substantially in ethnic terms. "

I think it really does. Not only through census data (god knows what devious things this gets used for and where it goes), but just look at politics and voting. The candidates have to try to appease every ethnic group in this country to gather votes... if this is not defining or categorizing citizens by ethnicity, I don't know what is. "America" itself may not be defining citizens this way, but the government and the entire population sure as hell is on a daily basis. In every aspect that matters, citizens get defined. Take economic status or salary etc. for example, ethnicity really does matter here...

Posted by: Sujan on December 4, 2003 08:14 AM

____

Education isn't being devalued. It's becoming transformed. The style of "education" promulgated by government schools is appropriate for 20th century jobs. If you want to see the future of education, look at what and how homeschoolers are doing. National competitions of excellence are won all out of proportion by homeschoolers. The national spelling bee and national geography bee have regularly been won by homeschoolers. At the New York State Fair, the public presentation content is typically dominated by homeschooled children.

Posted by: Russell Nelson on December 4, 2003 08:24 AM

____

Russell Nelson,

Equality of income is good because inequality of income is bad.

Home-schooling is out of the question for more than half the US population, because it is utterly expensive to achieve. But then you know that. What you want is, from your two posts here, people who have no way to better their income and no way to get their children to have a better life.

DSW

Posted by: Antoni Jaume on December 4, 2003 08:57 AM

____

"The biggest problem with inequality is the decline in democracy."

????

Let's look at trends in democracy in the 20th century in the U.S.:

1) Huge step jump upward in 1920, with Women's Suffrage;

2) Smaller jump upward with the end of various anti-black voting laws in the South, circa the mid 1960's;

3) A very small jump upward with the lowering of the voting age from 21 to 18, in 1971.

Now, let's look at inequality:

1) Rose from 1900 to 1930,

2) Collapsed during the Great Depression, and stayed low through the mid 1970's,

3) Rose again from the early 1980s to the present.

Do you agree that I've accurately depicted the separate trends? If so, how have the trends in democracy and inequality been in any way related?

Posted by: Mark Bahner on December 4, 2003 09:16 AM

____

Tom Slee recommends "Brad -- if you pursue this, I strongly recommend you leave out the Drexler stuff." I disagree, and think that Brad has it exactly right, when he flags this as a later wave of more capability for which experts disagree on its feasibility, but since Brad doesn't feel comfortable predicting the technology, he won't address it directly.

I also agree with Paul Calahan that the [intellectually] interesting question is "How will cheap automatic assembly of very high quality goods change things?" Of course, we have to ultimately develop that technology for it ever to be more than an intellectually interesting exercise.

Posted by: Tom on December 4, 2003 09:29 AM

____

Ceteris paribus, inequality of income may be bad, but ceteris are not paribus. If we can be richer as a society with income inequality (and we can), we have to balance the richer state of the majority against the poorer state of the minority.

Richer as a society? Yes, because, without income inequality, there is far less incentive to work hard, innovate, or gain an education to be more productive. Compare USSR v. USA. As long as we are incenting people to more productive areas (as the market does) the incentives inequality produce are net beneficial to society.

CEO's? A problem, mostly attributable to transaction costs in the form of effort by shareholders - they don't have enough at risk to have an incentive to intervene. "Institutional" shareholders have the same problem, once removed. (The actual owners - pensioners or investors in Mutual funds, own very small shares of the stock. Managers don't have enough at stake to intervene personally.) Market solution? Closely held companies where management and ownership are one (like Microsoft) outperform companies where management and ownership are separate(GM). And when they don't, the managers and the owners, being the same, both suffer. Options aren't enough, what is needed is for the CEO to be the actual majority shareholder, not just his hire. "Outside" board members and such are harmful to this process. Corporate raiders and hostile takeovers beneficial, by punishing poorly performing executives.

Sports salaries? You may not value what they produce, but what they produce brings great happiness to large numbers of people, and their skills are scarce. Thus, they deserve high salaries. Diamonds and water, people. Same with "winner take all" professions - if one, or a few, can produce all desired of a product, than the best producer(s) should produce all of that product, and reap the reward.

If we truly reach the point where redistribution really does increase overall welfare, then we can think about simple programs like negative income taxes to make sure everyone gets a piece without killing incentives. Catastrophic, high deductable health insurance for the unlucky, and a NIT, should be all we need in the welfare front. (Even the former the market can provide, if people start correctly valuing future utility, but I don't expect that.)

Posted by: rvman on December 4, 2003 09:31 AM

____

Volumes 2 and 3 of Capital contain in them an alternative set of potentials to the schematic reading of Marx provided by Brad.

First, those in the class position to live off the distribution of surplus - - the subsumed classes of merchants, financiers, executives, state officials, r & d workers -- may tend to become "bottlenecks" in a position to capture increasing shares of the surplus.

Second, the working class that produces the surplus may or may not be such a bottleneck. For instance, as in early 20th century US, capitalists may pay workers not just wages equal to variable capital, but a union wage premium (or, as in the famous case of Ford in 1914, a union prevention wage premium) to keep the surplus flowing.

Third, the claim that "Labor's Share" is constant depends upon the (class-blind) neoclassical conception that all labor is a "factor of production." An alternative effort at translating present day statistical realities into Marxian categories would likely produce a different conclusion.

Take the BLS hours/earnings of all "non-supervisory production workers on private nonfarm payrolls" (who comprise about 80% of such workers) as imperfect proxy for "working class income"--those who either produce the surplus or receive it as a secondary distribution, e.g. Walmart clerks. Between 1973 and 2003, that share has declined dramatically, from about 43% to about 25% of GDP.

We could debate this definition of working classes and/or the fact that much more compensation now takes forms that BLS earnings exclude (e.g. health insurance premia, profit sharing bonuses, etc.), but the basic, unfavorable shift for the working classes, as such, would likely survive the debate.

A side-point: other than in Marx's relatively brief rhetorical flourishes later taken up by Orthodox/Official Marxism, there is no Marxian Law of Immiseration. There is no requirement for it in contemporary Marxian theory. The rate of exploitation (s/v) and working class incomes may or may not rise together.

Posted by: Eric Glynn on December 4, 2003 09:36 AM

____

"I think the major issue we will be facing is the end of work. With such enormous improvements in productivity, why should anyone feel s/he has to to work (in the commercial sector)?"

Nobody has to work? You're right, sounds like H@ll. ;-)

Mark (from work) (on lunch break, the most dreaded part of my day ;-))

Posted by: Mark Bahner on December 4, 2003 09:37 AM

____

As one who has watched technologies come and occaisonally go over a 40 year career in the chemical industry, I have been impressed at how slowly new ideas are converted into a product that can be sold.
Before going down the nano-tech road, I suggest that a useful marker for next technology success would be when the manufacturing of cheap goods such as shirts, with robots sewing on the labels and putting them in boxes, returns to the US.

Posted by: Malcolm Watts on December 4, 2003 09:43 AM

____

I make no claim that these effects predominate. __I'M__ not a tenured Ivy League professor with background in the Federal Bureaucracy. I simply wonder whether or not it's a safe presumption that technology advantages the already-elite:
the well-educated, the well-connected, and the well-capitalized. Has this been historically true?
Or does the established upper class suffer erosion of wealth and power when something new comes along? The classic "buggy whip maker" going bankrupt when the automobile comes along, and a whole bunch of upstart grease monkeys jumping at chances to bite off a niche in the new era ?

Posted by: Pouncer on December 3, 2003 12:40 PM

Pouncer, moneyed interests have any number of weapons available for maintaining an edge despite changes in technology. Having large amounts of capital allows companies and individuals to hire smart people to create new opportunities. When somebody beats them to an idea they can simply buy out many threats. The courts and politics are sometimes backup plans. (There is good reason for the rarity of Bill Gates' type stories.) When outmanuevered, the money is simply divested. Thus, most buggy whip manufacturers were making other products when the industry died. It's a safe presumption that technology advantages the already-elite.

Posted by: Stan on December 4, 2003 09:51 AM

____

Drexler-style nanotechnology is not magic or obscure. Use NEMS to do positional chemistry to build NEMS. What's so hard about that?

Lots of people would like it to be impossible. So they come up with facile arguments. But at this point, if it doesn't have math, it's probably a myth.

The work in the past decade has lots of math. It won't be easy to criticize.

Why didn't nature do it yet? Because nature abhors a vacuum, and wet chemistry is limited. Machines can do vacuum just fine.

How do you power it? The same way as you power any other machine. Talk about "negentropy" is just obscurantism.

Does Smalley know more chemistry than Drexler? Smalley was dead wrong about enzymes requiring water to work. No one has caught Drexler in a significant error.

How long it'll take depends on how much engineering is put into it. Which depends on funding. Which depends on incentive. But the incentive for general-purpose manufacturing at the NEMS level is very high. Other technology road maps don't get there for decades.

If anyone wants to discuss why they think it can't work, I'm up for that. You might want to check out my discussions with Bill Atkinson and Richard Jones.
http://www.nanotech-now.com/Atkinson-Phoenix-Nanotech-Debate.htm
http://www.quicktopic.com/24/H/UMabNQK2xXW/p-1.-1 postings 5-29

Chris Phoenix
Director of Research
Center for Responsible Nanotechnology
cphoenix at CRNano dot org

Posted by: Chris Phoenix on December 4, 2003 09:59 AM

____

Drexler-style nanotechnology is not magic or obscure. Use NEMS to do positional chemistry to build NEMS. What's so hard about that?

Lots of people would like it to be impossible. So they come up with facile arguments. But at this point, if it doesn't have math, it's probably a myth.

The work in the past decade has lots of math. It won't be easy to criticize.

Why didn't nature do it yet? Because nature abhors a vacuum, and wet chemistry is limited. Machines can do vacuum just fine.

How do you power it? The same way as you power any other machine. Talk about "negentropy" is just obscurantism.

Does Smalley know more chemistry than Drexler? Smalley was dead wrong about enzymes requiring water to work. No one has caught Drexler in a significant error.

How long it'll take depends on how much engineering is put into it. Which depends on funding. Which depends on incentive. But the incentive for general-purpose manufacturing at the NEMS level is very high. Other technology road maps don't get there for decades.

If anyone wants to discuss why they think it can't work, I'm up for that. You might want to check out my discussions with Bill Atkinson and Richard Jones.
http://www.nanotech-now.com/Atkinson-Phoenix-Nanotech-Debate.htm
http://www.quicktopic.com/24/H/UMabNQK2xXW/p-1.-1 postings 5-29

Chris Phoenix
Director of Research
Center for Responsible Nanotechnology
cphoenix at CRNano dot org

Posted by: Chris Phoenix on December 4, 2003 10:02 AM

____

"As one who has watched technologies come and occaisonally go over a 40 year career in the chemical industry, I have been impressed at how slowly new ideas are converted into a product that can be sold."

"Slowly" is a relative term. When one compares changes in technology in the 20th century with the 19th, 18th, 17th, 16th and on backward, changes came incredibly rapidly in the 20th.

Even comparing market penetration of various major technologies WITHIN the 20th century shows a rapid increase in the late 20th century, compared to the earlier part of the 20th century. (Look at the growth in the Internet, for example, as compared to, say, telephones.)

Posted by: Mark Bahner on December 4, 2003 10:02 AM

____

Drexler-style nanotechnology is not magic or obscure. Use NEMS to do positional chemistry to build NEMS. What's so hard about that?

Lots of people would like it to be impossible. So they come up with facile arguments. But at this point, if it doesn't have math, it's probably a myth.

The work in the past decade has lots of math. It won't be easy to criticize.

Why didn't nature do it yet? Because nature abhors a vacuum, and wet chemistry is limited. Machines can do vacuum just fine.

How do you power it? The same way as you power any other machine. Talk about "negentropy" is just obscurantism.

Does Smalley know more chemistry than Drexler? Smalley was dead wrong about enzymes requiring water to work. No one has caught Drexler in a significant error.

How long it'll take depends on how much engineering is put into it. Which depends on funding. Which depends on incentive. But the incentive for general-purpose manufacturing at the NEMS level is very high. Other technology road maps don't get there for decades.

If anyone wants to discuss why they think it can't work, I'm up for that. You might want to check out my discussions with Bill Atkinson and Richard Jones.
http://www.nanotech-now.com/Atkinson-Phoenix-Nanotech-Debate.htm
http://www.quicktopic.com/24/H/UMabNQK2xXW/p-1.-1 postings 5-29

Chris Phoenix
Director of Research
Center for Responsible Nanotechnology
cphoenix at CRNano dot org

Posted by: Chris Phoenix on December 4, 2003 10:03 AM

____

Drexler-style nanotechnology is not magic or obscure. Use NEMS to do positional chemistry to build NEMS. What's so hard about that?

Lots of people would like it to be impossible. So they come up with facile arguments. But at this point, if it doesn't have math, it's probably a myth.

The work in the past decade has lots of math. It won't be easy to criticize.

Why didn't nature do it yet? Because nature abhors a vacuum, and wet chemistry is limited. Machines can do vacuum just fine.

How do you power it? The same way as you power any other machine. Talk about "negentropy" is just obscurantism.

Does Smalley know more chemistry than Drexler? Smalley was dead wrong about enzymes requiring water to work. No one has caught Drexler in a significant error.

How long it'll take depends on how much engineering is put into it. Which depends on funding. Which depends on incentive. But the incentive for general-purpose manufacturing at the NEMS level is very high. Other technology road maps don't get there for decades.

If anyone wants to discuss why they think it can't work, I'm up for that. You might want to check out my discussions with Bill Atkinson and Richard Jones.
http://www.nanotech-now.com/Atkinson-Phoenix-Nanotech-Debate.htm
http://www.quicktopic.com/24/H/UMabNQK2xXW/p-1.-1 postings 5-29

Chris Phoenix
Director of Research
Center for Responsible Nanotechnology
cphoenix at CRNano dot org

Posted by: Chris Phoenix on December 4, 2003 10:11 AM

____

" In order to keep the income distribution tight, the premium on skilled and educated workers must fall--which means the supply of such workers must increase rapidly as nanotechnologies promise yet another shift of labor demand toward the highly-skilled and well-educated. Yet there are no signs in American politics of the renewal of the extraordinary educational effort which gave America such a huge edge over other advanced industrial economies in the twentieth century."

Time to raise the H1B quota again.


Posted by: raboof on December 4, 2003 10:13 AM

____

Do you agree that I've accurately depicted the separate trends? If so, how have the trends in democracy and inequality been in any way related?

Posted by: Mark Bahner on December 4, 2003 09:16 AM

No Mark, I think you've totally missed the point. Then again Russell Nelson set Antoni up with his loaded question, "Can somebody explain to me why equality of income is a good thing?" I reread the thread and can't find where one person said that equality of income was a good thing. (Though even were I too have missed it the following still stands.) That is probably because everybody was assuming the basic problem was high inequality not a lack of equality.

Thus Russell really needs an answer to why high inequality is considered a bad thing. To do that we would not look at a brief 100 year stretch of U.S. history as you have done. The way you check that is to look at world history to see if high inequality correlated with low democracy and political inclusion. The answer of course is that yes, high income inequality has correlated closely with less inclusive and democratic societies. It does so today. Hence, concern is being expressed at signs of increasing inequality because it poses a threat to liberty and democracy.

Posted by: Stan on December 4, 2003 10:23 AM

____

Drexler-style nanotechnology is not magic or obscure. Use NEMS to do positional chemistry to build NEMS. What's so hard about that?

Lots of people would like it to be impossible. So they come up with facile arguments. But at this point, if it doesn't have math, it's probably a myth.

The work in the past decade has lots of math. It won't be easy to criticize.

Why didn't nature do it yet? Because nature abhors a vacuum, and wet chemistry is limited. Machines can do vacuum just fine.

How do you power it? The same way as you power any other machine. Talk about "negentropy" is just obscurantism.

Does Smalley know more chemistry than Drexler? Smalley was dead wrong about enzymes requiring water to work. No one has caught Drexler in a significant error.

How long it'll take depends on how much engineering is put into it. Which depends on funding. Which depends on incentive. But the incentive for general-purpose manufacturing at the NEMS level is very high. Other technology road maps don't get there for decades.

If anyone wants to discuss why they think it can't work, I'm up for that. You might want to check out my discussions with Bill Atkinson and Richard Jones.
http://www.nanotech-now.com/Atkinson-Phoenix-Nanotech-Debate.htm
http://www.quicktopic.com/24/H/UMabNQK2xXW/p-1.-1 postings 5-29

Chris Phoenix
Director of Research
Center for Responsible Nanotechnology
cphoenix at CRNano dot org

Posted by: Chris Phoenix on December 4, 2003 10:27 AM

____

Antoni Jaume,

"Equality of income is good because inequality of income is bad."

That is circular reasoning. Inequality is a permanent part of society and it is naive to think that it could ever be different. The only thing which changes over time is the degree of inequality. Even in a perfect meritocracy there would be inequality. Only in that case the have's would be those who, for whatever reason, had the skills, talent, luck or work ethic to outperform other individuals. Their wealth would be passed along to their children providing them a better standard of living and education on average. This translates into a head start for those advantaged children/young adults. Voila, no more perfect meritocracy.

Inequality in and of itself is not necessarily a bad thing. If we were to compare 2 hypothetical societies, A & B, which would we say was better off if the citizens of A had a lower annual income bound of $100 and an upper bound of $500 compared with B's citizens who had a lower bound of $500 and an upper bound of $10000? Society A obviously has less inequality yet none of their citizens are especially well off. Society B has much more inequality and yet all of it's citizens are better off than society A.

Having said that I don't think it's an unworthy or necessarily unrealistic goal to work towards a fairer society. I believe that society's with a more equitable distribution (all other things being equal) are generally more stable and less prone to violence and upheaval. In addition most people (I would assume) find a more equitable society pleasing to their sense of fairness and morality.

I think the comparisons regarding democracy and inequality are a bit off the mark. What is a concern to me is the disproportionate influence wielded on government by those people and/or corporations with a large amount of wealth at their disposal. If you want to term the exertion of that influence a "lessening of democracy" then by all means go right ahead, though I don't see that way.

Posted by: Jason on December 4, 2003 10:54 AM

____

While most of the developed world has entered (and is now probably exiting?) the infotech revolution, much of the world is still in the industrial or even agricultural stages.

It is then safe to assume that even when (and if) the nanotech revolution strikes, much of the world will be lagging behind.

Immigration control places a barrier on the flow of skills and workers to the places of high demand. However, capital increasingly does not have any barriers to entry (or exit).

It is safe to say that the advent of nanotech will further increase the disparity between the developed world and the developing world. While some elite of the developing world will be allowed to immigrate into a better lifestyle, most citizens of developing countries will be employed in doing menial tasks to support the developed countries. These workers will help support and sustain the lavish lifestyles of the developed countries, without any hope of enjoying it themselves.

While equal opportunity exists within countries, it does not exist yet on a planetary scale. Citizens are "walled off" from opportunities based solely on their location of birth. Nanotech will make this wall higher and stronger than ever before, or an immigration revolution will cause these walls to break down forever..

Posted by: sumedh on December 4, 2003 11:03 AM

____

While most of the developed world has entered (and is now probably exiting?) the infotech revolution, much of the world is still in the industrial or even agricultural stages.

It is then safe to assume that even when (and if) the nanotech revolution strikes, much of the world will be lagging behind.

Immigration control places a barrier on the flow of skills and workers to the places of high demand. However, capital increasingly does not have any barriers to entry (or exit).

It is safe to say that the advent of nanotech will further increase the disparity between the developed world and the developing world. While some elite of the developing world will be allowed to immigrate into a better lifestyle, most citizens of developing countries will be employed in doing menial tasks to support the developed countries. These workers will help support and sustain the lavish lifestyles of the developed countries, without any hope of enjoying it themselves.

While equal opportunity exists within countries, it does not exist yet on a planetary scale. Citizens are "walled off" from opportunities based solely on their location of birth. Nanotech will make this wall higher and stronger than ever before, or an immigration revolution will cause these walls to break down forever..

Posted by: sumedh on December 4, 2003 11:08 AM

____

"The biggest problem with inequality is the decline in democracy. When fewer voices are represented in national decisions, decisions are less well-reasoned."

I think you have a problem with the definition of democracy. Abe Lincoln said "It is unworthy and ultimately untenable to have the most basic questions settled-and unsettled-by votes. The nation needs a foundation more durable than the sand of opinion that can be easily shifted in each election"

True democracy can only work on a local level. Productivity will liberate unskilled workers because government will have to re-distribute weath or face a revolution. They may have more time to focus on local issues if they're not working two jobs to feed their kids.

Posted by: KirkH on December 4, 2003 11:11 AM

____

While most of the developed world has entered (and is now probably exiting?) the infotech revolution, much of the world is still in the industrial or even agricultural stages.

It is then safe to assume that even when (and if) the nanotech revolution strikes, much of the world will be lagging behind.

Immigration control places a barrier on the flow of skills and workers to the places of high demand. However, capital increasingly does not have any barriers to entry (or exit).

It is safe to say that the advent of nanotech will further increase the disparity between the developed world and the developing world. While some elite of the developing world will be allowed to immigrate into a better lifestyle, most citizens of developing countries will be employed in doing menial tasks to support the developed countries. These workers will help support and sustain the lavish lifestyles of the developed countries, without any hope of enjoying it themselves.

While equal opportunity exists within countries, it does not exist yet on a planetary scale. Citizens are "walled off" from opportunities based solely on their location of birth. Nanotech will make this wall higher and stronger than ever before, or an immigration revolution will cause these walls to break down forever..

Posted by: sumedh on December 4, 2003 11:13 AM

____

hey just saw this on slashdot today :D cheers!

http://slashdot.org/articles/03/12/04/1345253.shtml

---
Economic Analysis of the Nanotech Future
Posted by michael on Thursday December 04, @10:19AM
from the nanoo-nanoo dept.

nweaver writes "Economic Historian and Berkeley Professor Brad DeLong has created an analysis on his Web Log on the economic implications of Nanotechnology. His observations are based on what previously happened with the Industrial Revolution (and other economic shifts in general) and using this to speculate what Nanotech will do to the economy: who wins (technical/knowledge workers), who loses (manufacturing), and what changes (costs of products)."

Posted by: drk on December 4, 2003 11:30 AM

____

RE: rvman comments about sports salaries.

My humble apologies ala Carleton Wu for being distracted by the tangential, but the untold story about professional athletics, at least in this country (and a previous poster was dead on right - Americans must get out more) is the sharp decline in their charitable contributions, which does not play well next to the sky box salaries of star performers. There used to be a time when professional teams were uniformly generous with community outreach activities, such as allowing free entry to poor kids. In fact, the general tenor of the professional athletic vision, at that time, was the social leverage provided by entertainment and a possible shot at an economically secure future. Today high school seniors refer athletic recruiters to their newly hired managers who have already worked out the details of Junior’s new Jaguar.

Economics is more than a market system, as already observed above (and contested.) In fact, when the day is done, the markets might well be reduced to the mechanical rivets of a system infinitely more complicated and my guess is that the wild card is going to come from Information Technology more than Nanotechnology and my further guess is that a great deal of relevant science for economics will emerge from the dynamic nonlinear systems analytics that will drive the currently developing ecosystem sciences.

But I digressed from my original digression. Apologies.

Posted by: Ann on December 4, 2003 11:52 AM

____

Malcolm Watts:
> Before going down the nano-tech road, I suggest that a useful marker for next technology success would be when the manufacturing of cheap goods such as shirts, with robots sewing on the labels and putting them in boxes, returns to the US.

I think this is exactly right, and well put. The issue is not nanotechnology but the unique capabilities now being heralded for nanotechnology. The thing is (a) these aren't really unique to nanotechnology--"macro" robotics has a long way to go--and (b) these will not be realized if nanotechnology merely refers to bulk nanotube production and ever tinier transistors--nanotech as materials science on steroids.

> As one who has watched technologies come and occaisonally go over a 40 year career in the chemical industry, I have been impressed at how slowly new ideas are converted into a product that can be sold.

It took me forever, it seems, to appreciate how large a role market forces play in the implementation of a new technology. For instance, as someone interested as a grad student in massively parallel computation in the late 80s, I was blindsided by the fact that the significant real-world phenomenon was just that sequential processors became cheap and ubiquitous, and so much faster that the "Von Neumann bottleneck" (where sequential processing becomes inadequate) is still way out on the horizon and will remain so except for certain supercomputing applications.

Often there is an idea just out of reach that isn't going to happen. It's just not important enough. Let's take a trivial pet peeve of mine: Why on earth do I have to get out of my car to pump gas? I don't mean I want a white-gloved attendant to fill it up and wash my window. I mean, if you can refuel a jet in midflight, you ought to be able to just pull your car up to the pump where a standard hookup locks on to an easily identified target and fills your tank (and faster than they'd trust a human to). You'd have less trouble, less spillage, less evaporation, less risk. If there was demand, the marginal cost would be trivial and far less than the cost in wasted time. Everything better!

But it's not going to happen. I expect gas-powered cars to become obsolete before I see anything like this. Perhaps an economist can tell me the correct term for why this isn't going to happen.

Sadly, your robotic shirt factories aren't going to appear until foreign labor becomes costly enough to make it worthwhile. I believe it will happen, but when and how? I guess it could happen either directly through political forces (anti-globalization) or through the labor market (3rd world salaries rise) or finally, if the robotics were just making shirts so much better (or maybe doing fast custom orders--something a huge container ship is not flexible enough for).

BTW, I'm still disappointed that nobody took me up on my comment about the day when we wake up to discover that all the mining, manufacturing, and shipping jobs are gone but the Walmart shelves are being restocked anyway. I.e.: I believe that a non-living self-sustaining system will exist but I don't necessarily expect it to happen through nanotech or even through a deliberate attempt to create one.

Posted by: Paul Callahan on December 4, 2003 12:01 PM

____

Since the industrial revolution there has been a relatively consistent pattern of 50-year waves of techno-economic change. We are currently nearing the end of the fifth wave, the information technology wave, while a sixth wave is emerging for us all to contemplate.

Each wave consists of a new group of technologies that make it possible to solve problems once thought intractable. The water mechanization wave (1770-1830) in England transformed productivity by replacing handcrafted production with water-powered “machine-o-facture.” The second wave (1820-1880), powered by a massive iron railroad build-out, accelerated the distribution of goods and services to distant markets. The electrification wave (1870-1920) provided the foundation for modern cities. The development of skyscrapers, electric lifts, light bulbs, telephones and subways were all a result of the new electricity infrastructure. The fourth wave (1910-1970) ushered in mass assembly and the motorization of the industrial economy, making the inexpensive transportation of goods and services available to the masses.

The most recent wave, the information technology wave (1960-2020), has made it possible to collect, analyze and disseminate data, transforming our ability to track and respond to an ever changing world. Driven by the microprocessors capacity to compute and communicate data at increasingly exponential rates, the current wave is the primary generator of economic and social change today.

Techno-economic waves have pervasive effects throughout the economy and society. New low-cost inputs create new product sectors. They shift competitive behavior across the economy, as older sectors reinterpret how they create value. New low cost inputs become driving sectors in their own right (e.g. canals, coal, electricity, oil, microchips, biochips). When combined with complementary technologies, each new low cost input stimulates the development of new sectors (e.g. cotton textiles, railroads, electric products, automobiles, computers, bio-education). Technological waves, because they embody a major jump up in productivity, open up an unusually wide range of investment and profit opportunities, leading to sustained rates of economic growth.


Here is my bet:

The nascent neurotechnology wave (2010-2060) is being accelerated by the development of biochips and brain imaging technologies that make biological analysis inexpensive and pervasive. Biochips that can perform the basic bio-analysis functions (genomic, proteomic, biosimulation, and microfluidics) at a low cost will transform biological analysis and production in a very similar fashion as the microprocessor did for data. Nano-imaging techniques will also play a vital role in making the analysis of neuro-molecular level events possible. When data from advanced biochips and brain imaging are combined they will accelerate the development of neurotechnology, the set of tools that can influence the human central nervous system, especially the brain. Neurotechnology will be used for therapeutic ends and to enhance human emotional, cognitive and sensory system performance.

The diffusion of the neurotechnology wave will lead to a restructuring of major portions of the economy. Individuals and organizations will respond by creating new:

·Product mixes that take advantage of advanced biochips and brain imaging. For example, neuroceuticals that are based on information about an individual’s genetic and neural organization will make it possible to influence and enhance human emotional, cognitive and sensory capabilities.

·Forms of competitive advantage. For example, innovation is a complex mental function wherein cognitive assessment and emotional compassion combine to accelerate the creation of new knowledge. Individuals that utilize neuroceuticals to become more productive and creative will attain neurocompetitive advantage.

·Patterns in the location of production. For example, India and China will contain regional clusters of neurotechnology firms as political and cultural views on human testing create the necessary conditions for technological experimentation and development

·Infrastructures through significant capital investment. Infrastructures include both tangible infrastructures for their manufacture and distribution and intangible infrastructures, in the form of education and training systems, prevailing management styles, and legal and political frameworks at the regional, national, and global levels.

By viewing recent history as a series of techno-economic waves ushered in by a new low cost input, we can see that sustained investment in the NBIC technologies will lead to substantial economic, political and social change. Neurotechnology has the potential to create new industries, reinvigorate others, develop new forms of social and political organization, and make possible different modes of artistic expression.

In its wake neurotechnology will give rise to a new type of human society, a neurosociety.

www.neurosociety.net

Posted by: Zack Lynch on December 4, 2003 12:25 PM

____

Drexlerian nanotechnology...

Yep. And by 1975 we'll all have helicopters in our garages.

Posted by: Rob on December 4, 2003 12:43 PM

____

There's another element that needs to be considered: the coming revolution in education.

As artificial intelligence evolves, software will improve to the point where education can be cheaply and effectively tailored for each student. The collection of very accurate statistics regarding what works for each type of student will enable educators to truly understand the capabilities of all types of students and further refine the process.

Later, as we learn more about the way the mind works, I think we'll eventually see physical enhancements made to the brain with nanotechnology that will reduce the disparity between what various brains can accomplish. We may even see a "brain race", as efforts are made to enhance various capabilities or broaden the number of areas (logical, social, musical, etc.) in which a particular brain can excel. We might even improve upon nature.

We could see a million Einsteins. Now that would be a competitive situation.

Posted by: Al Brown on December 4, 2003 12:55 PM

____

I admit to some bias towards Smalley over Drexler. However as I analyze my thoughts I find a few valid arguments with Smalleys. Diatoms I think have manipulated silica on a fine scale with fair success. The life in volcanic fissures in the ocean deals with some chemicals that most evolution has avoided. Equisetum hyemale incorporates silica and hyperacumulates gold and silver. There is some evidence that bacteria and fungi create veins of gold crystals in the earth. There are several examples of other living organisms that deal with odd materials and even make simple devices with material not normally considered biological. check out http://www.sciencenews.org/20030705/bob8.asp

Since life is our one good model of micro construction, I would suspect that our best nanotechnology will start to resemble life or be assembled by life.
Some ornamental plants have white variegation. Though this pleases the eye in some cases it does make for a weaker plant. As we make living or almost living devices, the usefulness we have built into them will, I suspect, render them less sturdy or independent. If that is the case, then farmers may be nursing very expensive trees for their high-tech fruit and milk maids will still be hooking milking machines up to cattle even though the milk may resolve into an entirely different type of object after instruction is given to the milk. On the technical side, often workers make money not so much based on the skills they have, but on the expense of their tools. These farmers may end up making good money, even after they pay the tech/vet bills. It is also hard to predict what place nanotechnology will have in our future because it is hard to guess what laws or controls will be placed. Diamonds are fairly simple and common enough crystals that have been kept valuable by artificial means. If someone were to figure out a few basic bits of code that would end up later being required by the nano field, and copyright the code and all of it's logical variations in source and then compile to most languages and copyright the binary, one could halt or dominate the next step. It would be suprising to me if legal and control issues do not have as much effect on the economics as the potential of nanotechnology itself.

Posted by: Bob Strawn on December 4, 2003 01:01 PM

____

There's another element that needs to be considered: the coming revolution in education.

As artificial intelligence evolves, software will improve to the point where education can be cheaply and effectively tailored for each student. The collection of very accurate statistics regarding what works for each type of student will enable educators to truly understand the capabilities of all types of students and further refine the process.

Later, as we learn more about the way the mind works, I think we'll even see physical enhancements made to the brain with nanotechnology that will reduce the disparity between what various brains can accomplish. We may even see a "brain race", as efforts are made to enhance various capabilities or broaden the number of areas (logical, social, musical, etc.) in which a particular brain can excel. We might even improve upon nature.

We could see a million Einsteins. Now that would be a competitive situation.

Posted by: Al Brown on December 4, 2003 01:05 PM

____

Paul Callahan, on the subject of your pet peeve -- I think that the automatic fueling issue is that the problem is actually pretty complex and thus too costly relative to the 'household production' of present-day self-service fueling.

The fueling robot would have to identify the make and model of car (to determine the filler location and access mechanism, neither of which is remotely standardized), access the filler (whose orientation may vary by quality of parking job, etc.) without doing potentially costly stuff like breaking locked filler doors or scratching luxury cars' paint jobs (or potentially dangerous stuff like fueling running cars), determine and accurately deliver how much gas the customer wants, have lots of actuators and moving parts that require minimal maintenance, etc. My strong supposition is that, for the time being, the white-gloved attendant would be much cheaper, and there is relatively little willingness to pay a premium price for full-service now... which is part of your explanation for why we don't see the robotic shirt factories.

In fact, some variation on the robotic shirt factory seems likelier to come first (again, if it hasn't already), as there seems -- as evidenced by the customized clothing experiments by some mass retailers -- to be a sufficiently tangible benefit to bespoke clothes (i.e., beyond traditional snob appeal) at an appropriately modest price and delivery time premium.

On your last point, I agree with you that self-sustaining production systems will exist (and do exist for at least some parts of some processes) and likely through some marriage of more-or-less traditional microelectronics and mechanization. Obviously, there are already some job descriptions that have disappeared in the process -- certain heavy assembly line tasks, elevator operators, airline flight engineers and navigators.

Posted by: Tom Bozzo on December 4, 2003 01:09 PM

____

I admit to some bias towards Smalley over Drexler. However as I analyze my thoughts I find a few valid arguments with Smalleys. Diatoms I think have manipulated silica on a fine scale with fair success. The life in volcanic fissures in the ocean deals with some chemicals that most evolution has avoided. Equisetum hyemale incorporates silica and hyperacumulates gold and silver. There is some evidence that bacteria and fungi create veins of gold crystals in the earth. There are several examples of other living organisms that deal with odd materials and even make simple devices with material not normally considered biological. check out http://www.sciencenews.org/20030705/bob8.asp
Since life is our one good model of micro construction, I would suspect that our best nanotechnology will start to resemble life or be assembled by life.
Some ornamental plants have white variegation. Though this pleases the eye in some cases it does make for a weaker plant. As we make living or almost living devices, the usefulness we have built into them will, I suspect, render them less sturdy or independent. If that is the case, then farmers may be nursing very expensive trees for their high-tech fruit and milk maids will still be hooking milking machines up to cattle even though the milk may resolve into an entirely different type of object after instruction is given to the milk. On the technical side, often workers make money not so much based on the skills they have, but on the expense of their tools. These farmers may end up making good money, even after they pay the tech/vet bills. It is also hard to predict what place nanotechnology will have in our future because it is hard to guess what laws or controls will be placed. Diamonds are fairly simple and common enough crystals that have been kept valuable by artificial means. If someone were to figure out a few basic bits of code that would end up later being required by the nano field, and copyright the code and all of it's logical variations in source and then compile to most languages and copyright the binary, one could halt or dominate the next step. It would be suprising to me if legal and control issues do not have as much effect on the economics as the potential of nanotechnology itself.

Posted by: Bob Strawn on December 4, 2003 01:10 PM

____

There's another element that needs to be considered: the coming revolution in education.

As artificial intelligence evolves, software will improve to the point where education can be cheaply and effectively tailored for each student. The collection of very accurate statistics regarding what works for each type of student will enable educators to truly understand the capabilities of all types of students and further refine the process.

Later, as we learn more about the way the mind works, I think we'll even see physical enhancements made to the brain with nanotechnology that will reduce the disparity between what various brains can accomplish. We may even see a "brain race", as efforts are made to enhance various capabilities or broaden the number of areas (logical, social, musical, etc.) in which a particular brain can excel. We might even improve upon nature.

We could see a million Einsteins. Now that would be a competitive situation.

Posted by: Al Brown on December 4, 2003 01:10 PM

____

There's another element that needs to be considered: the coming revolution in education.

As artificial intelligence evolves, software will improve to the point where education can be cheaply and effectively tailored for each student. The collection of very accurate statistics regarding what works for each type of student will enable educators to truly understand the capabilities of all types of students and further refine the process.

Later, as we learn more about the way the mind works, I think we'll even see physical enhancements made to the brain with nanotechnology that will reduce the disparity between what various brains can accomplish. We may even see a "brain race", as efforts are made to enhance various capabilities or broaden the number of areas (logical, social, musical, etc.) in which a particular brain can excel. We might even improve upon nature.

We could see a million Einsteins. Now that would be a competitive situation.

Posted by: Al Brown on December 4, 2003 01:14 PM

____

"Inequality in and of itself is not necessarily a bad thing. If we were to compare 2 hypothetical societies, A & B, which would we say was better off if the citizens of A had a lower annual income bound of $100 and an upper bound of $500 compared with B's citizens who had a lower bound of $500 and an upper bound of $10000? Society A obviously has less inequality yet none of their citizens are especially well off. Society B has much more inequality and yet all of it's citizens are better off than society A."

That is, in fact, completely false. The overwhelming conclusion of modern studies of the impact of average income on wellbeing is that there is no impact or very little impact, except through the elimination of direct privation (disease, starvation, etc). So once a society has enough money that its citizens are in a generally good state of health and nutrition, enjoying a stable political and economic situation, and so on, adding additional money has no long term impact on average wellbeing. (The existence of growth does improve short term wellbeing, but that's connected to the change in wealth and has nothing to do with its absolute level).

There is, on the other hand, a tremendous impact of relative wealth on wellbeing... and it's a negative sum game. Having more wealth than average makes people happier than average, having less wealth than average makes people less happy than average. Also less healthy, more stressed, and so on. The net effect is negative sum - as inequality increases, the detrimental effects to those worse off increase faster than the positive effects to those better off. Thus the well established finding that societies with higher income inequality have more crime, less healthy populations, and more stress. And a detectable, though not huge, tendency to report that they are subjectively less happy with their lives. This particular finding about happiness is confounded by the fact that culture is a more powerful predictor of happiness than material conditions - cultures which value individual happiness over other goals have people who are happier. Thus poor Latin American nations have happier populations than wealthy Japan.

At any rate, the common economists' assumption that human psychology places utility on absolute wealth - that having more money increases subjective wellbeing, regardless of how much money everyone else has - is now rather thoroughly demonstrated to be false. Absolute wealth is in itself irrelevant to wellbeing. Some of the things it buys are not irrelevant - adequate nutrition, good health care, education, and so on - but many of the other things it buys, for example typical consumer goods, are quite irrelevant. Of primary importance is relative wealth - once basic needs are provided, each person's welfare primarily depends on how much they have relative to the other people in their social universe. Within the developed world, income equality is a far better predictor of average wellbeing than income level. (Outside the developed world you often get poverty so extreme it leads to starvation and epidemics, or poverty that is associated with warfare or repressive government). Income growth also has some impact - people are better off when their situation is noticably improving.

Posted by: Ian Montgomerie on December 4, 2003 01:20 PM

____

Stan:

"When outmanuevered, the money is simply divested. Thus, most buggy whip manufacturers were making other products when the industry died. It's a safe presumption that technology advantages the already-elite."

But then do you hold it as a presumption rather than an established historical fact?

I don't see it, sorry. Even in living memory, the Woolworth and Kresge "dimestore" dynasties have been supplanted by Sam Walton and heirs -- largely on the basis of Wal-Mart's more aggressive adoption of technology.

Where today are the heirs of the railroad "robber barons" of a century ago? Where are the modern day heirs of Howard Hughes's mid-20th century aviation era? This week the news is Disney heir Roy (nephew of Walt) has been forced from that mega-media corporation's board of directors. The money divests, yes, but it splits among heirs, moves to other families, dilutes, disperses, disaggregates ... The few buggy-whip companies that in a later time are making other products are owned by other stockholders and run by other managers. It's difficult for me to point to
a permanent aristocracy of families that pass wealth and powerful families down across generations ...

Except, of course, for POLITICS, where Bushes and Gores and Kennedys and Daleys and Browns and Hoffas use the family name recognition to solicit votes. Or perhaps likewise in entertainment, where Fondas and Douglases pass stardom down like an heirloom. But such transfers do not seem to REQUIRE being well-educated to take advantage of new technologies, nor does BEING so educated seem
to confer any advantage to the younger generation of such families.

So I come back to my original question. Is it well established in the economic historical record that technological change enshrines an existing wealth disparity in favor of those already in the top decile? Seems to be a falsifiable question...

Posted by: Pouncer on December 4, 2003 01:24 PM

____

"Inequality in and of itself is not necessarily a bad thing. If we were to compare 2 hypothetical societies, A & B, which would we say was better off if the citizens of A had a lower annual income bound of $100 and an upper bound of $500 compared with B's citizens who had a lower bound of $500 and an upper bound of $10000? Society A obviously has less inequality yet none of their citizens are especially well off. Society B has much more inequality and yet all of it's citizens are better off than society A."

That is, in fact, completely false. The overwhelming conclusion of modern studies of the impact of average income on wellbeing is that there is no impact or very little impact, except through the elimination of direct privation (disease, starvation, etc). So once a society has enough money that its citizens are in a generally good state of health and nutrition, enjoying a stable political and economic situation, and so on, adding additional money has no long term impact on average wellbeing. (The existence of growth does improve short term wellbeing, but that's connected to the change in wealth and has nothing to do with its absolute level).

There is, on the other hand, a tremendous impact of relative wealth on wellbeing... and it's a negative sum game. Having more wealth than average makes people happier than average, having less wealth than average makes people less happy than average. Also less healthy, more stressed, and so on. The net effect is negative sum - as inequality increases, the detrimental effects to those worse off increase faster than the positive effects to those better off. Thus the well established finding that societies with higher income inequality have more crime, less healthy populations, and more stress. And a detectable, though not huge, tendency to report that they are subjectively less happy with their lives. This particular finding about happiness is confounded by the fact that culture is a more powerful predictor of happiness than material conditions - cultures which value individual happiness over other goals have people who are happier. Thus poor Latin American nations have happier populations than wealthy Japan.

At any rate, the common economists' assumption that human psychology places utility on absolute wealth - that having more money increases subjective wellbeing, regardless of how much money everyone else has - is now rather thoroughly demonstrated to be false. Absolute wealth is in itself irrelevant to wellbeing. Some of the things it buys are not irrelevant - adequate nutrition, good health care, education, and so on - but many of the other things it buys, for example typical consumer goods, are quite irrelevant. Of primary importance is relative wealth - once basic needs are provided, each person's welfare primarily depends on how much they have relative to the other people in their social universe. Within the developed world, income equality is a far better predictor of average wellbeing than income level. (Outside the developed world you often get poverty so extreme it leads to starvation and epidemics, or poverty that is associated with warfare or repressive government). Income growth also has some impact - people are better off when their situation is noticably improving.

Posted by: Ian Montgomerie on December 4, 2003 01:26 PM

____

"Inequality in and of itself is not necessarily a bad thing. If we were to compare 2 hypothetical societies, A & B, which would we say was better off if the citizens of A had a lower annual income bound of $100 and an upper bound of $500 compared with B's citizens who had a lower bound of $500 and an upper bound of $10000? Society A obviously has less inequality yet none of their citizens are especially well off. Society B has much more inequality and yet all of it's citizens are better off than society A."

That is, in fact, completely false. The overwhelming conclusion of modern studies of the impact of average income on wellbeing is that there is no impact or very little impact, except through the elimination of direct privation (disease, starvation, etc). So once a society has enough money that its citizens are in a generally good state of health and nutrition, enjoying a stable political and economic situation, and so on, adding additional money has no long term impact on average wellbeing. (The existence of growth does improve short term wellbeing, but that's connected to the change in wealth and has nothing to do with its absolute level).

There is, on the other hand, a tremendous impact of relative wealth on wellbeing... and it's a negative sum game. Having more wealth than average makes people happier than average, having less wealth than average makes people less happy than average. Also less healthy, more stressed, and so on. The net effect is negative sum - as inequality increases, the detrimental effects to those worse off increase faster than the positive effects to those better off. Thus the well established finding that societies with higher income inequality have more crime, less healthy populations, and more stress. And a detectable, though not huge, tendency to report that they are subjectively less happy with their lives. This particular finding about happiness is confounded by the fact that culture is a more powerful predictor of happiness than material conditions - cultures which value individual happiness over other goals have people who are happier. Thus poor Latin American nations have happier populations than wealthy Japan.

At any rate, the common economists' assumption that human psychology places utility on absolute wealth - that having more money increases subjective wellbeing, regardless of how much money everyone else has - is now rather thoroughly demonstrated to be false. Absolute wealth is in itself irrelevant to wellbeing. Some of the things it buys are not irrelevant - adequate nutrition, good health care, education, and so on - but many of the other things it buys, for example typical consumer goods, are quite irrelevant. Of primary importance is relative wealth - once basic needs are provided, each person's welfare primarily depends on how much they have relative to the other people in their social universe. Within the developed world, income equality is a far better predictor of average wellbeing than income level. (Outside the developed world you often get poverty so extreme it leads to starvation and epidemics, or poverty that is associated with warfare or repressive government). Income growth also has some impact - people are better off when their situation is noticably improving.

Posted by: Ian Montgomerie on December 4, 2003 01:30 PM

____

The expansion of the British Empire's industrial capacity required the forcible opening of Asian and South American markets through military means. Within a couple of generations, Britain had acquired an Empire and was using social engineering, famines, and mass-scaled drug addicted coercion to "rationalize" foreign markets - some into producers, others consumers, others excluded through tariffs.

This was the essence of "free trade" - new markets had to be seized for the output of the British factories.

You mention some of the disruption caused to weavers and spinners, but you take an a priori classic laissez faire position that such transformation was somehow inevitable and happened as a natural consequence of technological proicesses. On the contrary, it was both produced and magnified by incredibly destructive military processes.

I have no doubt that these new nano technological producers, should they emerge, will similarly use unilateral and multilateral pressures and organizations to forcible eradicate nativist and local resistance to their products and trade.

The interested reader is referred to Mike Davis' impressive Late Victorian Holocausts for further information.

http://www.amazon.com/exec/obidos/tg/detail/-/1859843824/meehawl-20/

Posted by: meehawl on December 4, 2003 01:32 PM

____

What indeed would happen if we had self-replicating
biological intelligent workers? We do.
They're people (just like soylent green).

As for whether nature has produced any engines of
creation, I believe that, depending on how you
look at it, the ability of a single cell to
replicate and differentiate into a multicellular
organism by absorbing building blocks (read
nutrients) from its environment is a sort
or example. Of course, in Drexler's vision, a
non-biological engine of creation would operate
much more quickly. I am only pointing out that
nature has produced something similar in kind if
not degree.

Posted by: Froggy on December 4, 2003 01:44 PM

____

The expansion of the British Empire's industrial capacity required the forcible opening of Asian and South American markets through military means. Within a couple of generations, Britain had acquired an Empire and was using social engineering, famines, and mass-scaled drug addicted coercion to "rationalize" foreign markets - some into producers, others consumers, others excluded through tariffs.

This was the essence of "free trade" - new markets had to be seized for the output of the British factories.

You mention some of the disruption caused to weavers and spinners, but you take an a priori classic laissez faire position that such transformation was somehow inevitable and happened as a natural consequence of technological proicesses. On the contrary, it was both produced and magnified by incredibly destructive military processes.

I have no doubt that these new nano technological producers, should they emerge, will similarly use unilateral and multilateral pressures and organizations to forcible eradicate nativist and local resistance to their products and trade.

The interested reader is referred to Mike Davis' impressive Late Victorian Holocausts for further information.

http://www.amazon.com/exec/obidos/tg/detail/-/1859843824/meehawl-20/

Posted by: meehawl on December 4, 2003 01:45 PM

____

The expansion of the British Empire's industrial capacity required the forcible opening of Asian and South American markets through military means. Within a couple of generations, Britain had acquired an Empire and was using social engineering, famines, and mass-scaled drug addicted coercion to "rationalize" foreign markets - some into producers, others consumers, others excluded through tariffs.

This was the essence of "free trade" - new markets had to be seized for the output of the British factories.

You mention some of the disruption caused to weavers and spinners, but you take an a priori classic laissez faire position that such transformation was somehow inevitable and happened as a natural consequence of technological proicesses. On the contrary, it was both produced and magnified by incredibly destructive military processes.

I have no doubt that these new nano technological producers, should they emerge, will similarly use unilateral and multilateral pressures and organizations to forcible eradicate nativist and local resistance to their products and trade.

The interested reader is referred to Mike Davis' impressive Late Victorian Holocausts for further information.

http://www.amazon.com/exec/obidos/tg/detail/-/1859843824/meehawl-20/

Posted by: meehawl on December 4, 2003 01:59 PM

____

"When data from advanced biochips and brain imaging are combined they will accelerate the development of neurotechnology, the set of tools that can influence the human central nervous system, especially the brain. Neurotechnology will be used for therapeutic ends and to enhance human emotional, cognitive and sensory system performance."

I am always surprised by how remarkably little imagination people display about this - even someone as yourself who is trying to emphasize the potential importance of "neurotechnology".

If you can change the brain at a low level, it's not just about the economy any more. You have direct and relatively immediate access to the foundations of human behavior (as opposed to, say, genetic engineering which is pathetic in comparison - horribly indirect, limited to natural developmental mechanisms, and needing decades to bear fruit in altered brains).

What do you think the impact would be of, say, eliminating virtually all crime? Of having the ability to turn any person into an extreme-right conservative or an egalitarian liberal, regardless of their genes and prior experience? Of shutting off some of the brain machinery that evolved to help people lie believably... or overcoming mechanisms that increase our reluctance to step on others on our way to the top? What about when someone decides they don't like male/female behavioral differences, and provides an easy way to remove them?

Get the ability to use technology to precisely influence the brain, and you're in a realm where even science fiction authors virtually never tread. It's not economics. It's ideology on a level we're completely unprepared to deal with.

Just to imagine one example, let's say someone in 2050 says to themselves "hey, communism is a nice idea, too bad it's incompatible with human behavior. Hey, wait a minute, that's just because rhetoric and totalitarianism really couldn't do much to change behavior. Neurotechnology puts it all within reach". A little voluntary reprogramming later, and New Communist Man is born. A person for whom an egalitarian, altruistic commune organization is the natural social order, and who doesn't even respond to market incentives at all. And heck, let's make him averse to lying in the way that most people are averse to incest, and set his "reaction to hierarchy" dial at the "Noam Chomsky is a fascist pig" setting.

Once that sort of thing starts to happen, the fortunes of industries will be pretty low on peoples' list of things to worry about.

Posted by: Ian Montgomerie on December 4, 2003 02:01 PM

____

The expansion of the British Empire's industrial capacity required the forcible opening of Asian and South American markets through military means. Within a couple of generations, Britain had acquired an Empire and was using social engineering, famines, and mass-scaled drug addicted coercion to "rationalize" foreign markets - some into producers, others consumers, others excluded through tariffs and bilateral treaties signed at gunpoint or with ironclads docked in the harbour.

This was the essence of "free trade" - new markets had to be seized for the output of the British factories.

You mention some of the disruption caused to weavers and spinners, but you take an a priori classic laissez faire position that such transformation was somehow inevitable and happened as a natural consequence of technological proicesses. On the contrary, it was both produced and magnified by incredibly destructive military processes and sociological famine engineering. Tens of millions of people were effectively sacrificed on the altar of "free trade". China, Brazil, and India were reduced from a pre-eminent members of the global economy to balkanized, marginal shells full of starving, impoverished masses and their level of technological and social development reduced to pre-17th Century levels. The "Third World" was invented.

I have no doubt that these new nano technological producers, should they emerge, will similarly use unilateral and multilateral pressures and organizations to forcible eradicate nativist and local resistance to their products and trade.

The interested reader is referred to Mike Davis' impressive Late Victorian Holocausts for further information.

http://www.amazon.com/exec/obidos/tg/detail/-/1859843824/meehawl-20/

Posted by: meehawl on December 4, 2003 02:12 PM

____

Charles wrote (December 3, 11:38 AM), “The biggest problem with inequality is the decline in democracy.”

I responded by accurately--at least no one has yet contradicted me--describing the trends in democracy and inequality in the United States in the 20th century. I asked, "...how have the trends in democracy and inequality been in any way related?" My question was mostly rhetorical. Anyone can see that democracy and income equality were not correlated in the U.S. in the 20th century.

Stan responds, "No Mark, I think you've totally missed the point."

No, Stan, I didn't “totally miss the point.” I never miss the point. (Well, hardly ever at all. ;-)) Charles was spouting leftist politico-economic babble that is totally unsupported by the data of the 20th century in the United States.

Stan continues: “…look at world history to see if high inequality correlated with low democracy and political inclusion.”

“World history” has virtually NO democracies to look at, Stan. There were virtually NO democracies throughout world history, until the time of the American Revolution. When Abraham Lincoln said, in 1864(!), “…that government of the people, by the people, for the people shall not perish from the earth”…he wasn’t simply slinging BS. Given the fact that there are virtually NO democracies to look at, your advice to “look at world history” is unenlightening. There are no data.***

Stan concludes, “The answer of course is that yes, high income inequality has correlated closely with less inclusive and democratic societies.”

These data that you refer to, where are they, other than your imagination? Show me the data!

I have showed everyone here that, based on U.S. history in the 20th century, there was NO correlation between democracy and equality. Democracy increased in several steps, which were not correlated with changes in equality. Where are your data? Where are anyone’s data that show that, “The biggest problem with inequality is the decline in democracy?” Where are anyone's data that show that, as income inequality in a particular country increases, that country tends to become less democratic? (That's small "d" democratic, not capital "D" Democratic!)

P.S. ***Actually, the “world history” data could be taken to support the exact opposite of what you want them to support. Look at Brad DeLong’s calculation of world GDP from 1 million BC to present. For 999,800 of those 1,000,000 years, the average GDP per capita was pathetically low. Everyone was equal…because everyone was broke! And there was essentially NO democracy for those 999,800 years. So, based on 1 million years of human world history, high levels of EQUALITY correlate closely with LACK of democracy. :-)

Posted by: Mark Bahner on December 4, 2003 02:38 PM

____

The expansion of the British Empire's industrial capacity required the forcible opening of Asian and South American markets through military means. Within a couple of generations, Britain had acquired an Empire and was using social engineering, famines, and mass-scaled drug addicted coercion to "rationalize" foreign markets - some into producers, others consumers, others excluded through tariffs and bilateral treaties signed at gunpoint or with ironclads docked in the harbour.

This was the essence of "free trade" - new markets had to be seized for the output of the British factories.

You mention some of the disruption caused to weavers and spinners, but you take an a priori classic laissez faire position that such transformation was somehow inevitable and happened as a natural consequence of technological proicesses. On the contrary, it was both produced and magnified by incredibly destructive military processes and sociological famine engineering. Tens of millions of people were effectively sacrificed on the altar of "free trade". China, Brazil, and India were reduced from a pre-eminent members of the global economy to balkanized, marginal shells full of starving, impoverished masses and their level of technological and social development reduced to pre-17th Century levels. The "Third World" was invented.

I have no doubt that these new nano technological producers, should they emerge, will similarly use unilateral and multilateral pressures and organizations to forcible eradicate nativist and local resistance to their products and trade.

The interested reader is referred to Mike Davis' impressive Late Victorian Holocausts for further information.

http://www.amazon.com/exec/obidos/tg/detail/-/1859843824/meehawl-20/

Posted by: meehawl on December 4, 2003 02:44 PM

____

"Sadly, your robotic shirt factories aren't going to appear until foreign labor becomes costly enough to make it worthwhile."

Or until the cost of machines *come down* enough to make it worthwhile.

Posted by: Mark Bahner on December 4, 2003 03:02 PM

____

"Sadly, your robotic shirt factories aren't going to appear until foreign labor becomes costly enough to make it worthwhile."

Or until the cost of machines *come down* enough to make it worthwhile.

Posted by: Mark Bahner on December 4, 2003 03:07 PM

____

I apologize for the repeat postings, after clicking the "post" button the window hung for 10+ minutes so I closed it. I promise to click the "Post" button once this time!

Posted by: meehawl on December 4, 2003 03:50 PM

____

Walt Pohl says, "Charles: I was clarifying that Brad was not (I think) making a claim about the amount of national income went to the working class, but a claim about the amount of national income that was paid out as salary as opposed to return on capital. That is a figure that has remained (freakishly) constan"

Do you have figures to support this? I questioned the figure but simply don't have the data to prove it one way or another.

Mark Bahner states that, "Anyone can see that democracy and income equality were not correlated in the U.S. in the 20th century."

"Anyone" does not include me, Mr. Bahner. Making arguments-by-assertion does not support the notion that you understand what you are talking about.

I see a strong (anti)correlation between the drop in income inequality especially after the Great Depression and the rise in women's rights, rights for African Americans (and Indians and Hispanic Americs), the right to organize and so on. Only when people have some degree of income security are they able to obtain an advanced education, inform themselves on a daily basis, strike if required, blow the whistle on corporate wrongdoing and otherwise resist the anti-democratic tendencies of the corporate state. When they are deprived of economic security, they can be crammed into company towns, shot down if they strike, deprived of education and so on... as was the case through much of the latter half of the 19th century.

Calling that observaton "leftist psychobabble" is no substitute for knowing history.

Do you even understand what happened to income inequality in the 20th century? I don't think so.

Posted by: Charles on December 4, 2003 03:58 PM

____

The numbers on the steadiness of labor's share of national income are here:

http://web.mit.edu/krugman/www/greider.html.

http://www.econ.umn.edu/%7Erkhleung/macro3102/fig3.pdf.


Posted by: James Surowiecki on December 4, 2003 04:37 PM

____

CD318:

"The arguments about retraining are hogwash. Retraining doen't work because the relevant skills generally need to be learned at an early age"

Lots of research going on related to restoring neural plasticity. Cortex Pharmaceutical (http://www.cortexpharm.com/main.html) has several clinical trials going on right now.

Posted by: Nick on December 4, 2003 05:29 PM

____

CD318:

"The arguments about retraining are hogwash. Retraining doen't work because the relevant skills generally need to be learned at an early age"

Lots of research going on related to restoring neural plasticity. Cortex Pharmaceutical (http://www.cortexpharm.com/main.html) has several clinical trials going on right now.

Posted by: Nick on December 4, 2003 05:34 PM

____

Antoni Jaume: (sarcasm)wow, that was a really unimpressive explanation. I have truly been persuaded that inequality of income is bad.(/sarcasm) Of course homeschooling is not an option for at least half the population. That's not the point. The point is that untrained unspecialized amateurs can teach better than professionals with a master's degree. Since econmics is *based* on improvements due to specialization, what does that tell you about the current method of government education?

Posted by: Russell Nelson on December 4, 2003 08:14 PM

____

Antoni Jaume: (sarcasm)wow, that was a really unimpressive explanation. I have truly been persuaded that inequality of income is bad.(/sarcasm) Of course homeschooling is not an option for at least half the population. That's not the point. The point is that untrained unspecialized amateurs can teach better than professionals with a master's degree. Since econmics is *based* on improvements due to specialization, what does that tell you about the current method of government education?

Posted by: Russell Nelson on December 4, 2003 08:19 PM

____

The articles assumption that "if engines of creation are possible, hasn't evolution had enough time to build them yet? " among others, I would take issue with. Millions of species have evolved to one extent
or another only to dead end. Nature saw fit to provide this planet with dinasaurs for 160 million years. Well we suspect we know what happened to them. Thinking in cosmological time frames would seem to make more sense than considering the narrow band of human experience. Nature is a very hit and miss proposition. Perhaps the purpose of our existence is to eventually do the job in a more precise and controlled way. That job may be to dominate and eventually manipulate the universe...before somebody else does.
SETI by the way, may not be such a good idea.

Posted by: Jesse Spencer on December 4, 2003 09:57 PM

____

I agree with Jesse Spencer that:

'The articles assumption that "if engines of creation are possible, hasn't evolution had enough time to build them yet? " among others, I would take issue with.'

I understand his argument as

(1) Engines of creation might have already evolved and have also gone extinct

(2) Engines of creation might yet evolve in the future

I'd like to add

(3) Engines of creation might be possible only if artificially created by man first. There might be no evolutionary path from primeval soup to engines of creation, except through the agency of human intelligence. One limitation of evolution is that it cannot see or plan ahead, it has to improve organisms one small step at a time. Version x894 might be the most survivable version of an organism but if the intermediate steps to x894 from the current version x001 result in less survivability, version x894 will not evolve.

Posted by: Yuen Kit Mun on December 5, 2003 01:46 AM

____

So I come back to my original question. Is it well established in the economic historical record that technological change enshrines an existing wealth disparity in favor of those already in the top decile? Seems to be a falsifiable question...

Posted by: Pouncer on December 4, 2003 01:24 PM

Pouncer, I've given you the answer of a historian and economist for why the economic studies I've read have shown that movement up and down the wealth scale is generally rare. You asked whether Brad could make the presumption. You can continue to conjecture that your few examples of movement up and down the wealth scale equal major trends or you can take my word for it that Brad can safely make that presumption. There is plenty of literature available on the subject.

__


Stan continues: “…look at world history to see if high inequality correlated with low democracy and political inclusion.”

“World history” has virtually NO democracies to look at, Stan. There were virtually NO democracies throughout world history, until the time of the American Revolution.

Posted by: Mark Bahner on December 4, 2003 02:38 PM

Mark, I put the words political inclusion in that sentence because democracy has been so rare. Your hypothesis of everybody being poor and equal prior to the American Revolution shows an amazingly slim grip on world history generally or even a basic understanding of political realities in this country.

Serfs were as close to being poor and politically unincluded as it gets. The wealth disparity of Russian serfs and Russian nobility, like the Chinese aristocracy and peasants was extremely wide even though all would be considered poor by todays standards. In these societies over hundreds of years as wealth disparity increased, political inclusion decreased. When the pattern reversed and wealth disparity decreased political inclusion increased. This correlation is repeated in various political systems around the globe throughout recorded history.

Try your best to get a grip around the fact that democracy in name itself does not equal political inclusion. The U.S. itself had democracy in name with a large group of totally excluded members. Slaves were totally poor being possessions themselves and they were totally excluded politically. The inequality of wealth during that period of U.S. history was extremely high.

Higher political exclusion and therefore lack of political liberty has correlated quite closely with less equal wealth distribution throughout history. One of the largest problems faced in the developing world is the problem of resource led autocracy. The problem is basically one of extreme inequality. People with a good grip on the problem have been proposing an Alaskan style trust fund system for Iraq to help its people escape the trap.

Charles was quite accurate in suggesting that inequality is a threat to participatory democracy because for the vast majority of any given society it is. Your attempt at refuting the concept still misses the mark entirely. That you believe a 100 year stretch of U.S. history is somehow the most informative on the issue is at best incurious. At worst it is a calculated attempt to confuse others. Having argued with you ad naseum on the nature of the "right" of possession, I can fortunately attest that your case is most likely the former.

Posted by: Stan on December 5, 2003 08:07 AM

____

James Surowiecki says, "The numbers on the steadiness of labor's share of national income are here:"

Thank you. That is helpful.

Posted by: Charles on December 5, 2003 09:48 AM

____

Uhm, Nick? That neural plasticity thing? You don't happen to have a phone number by any chance? I think I'm overheating.

Posted by: Ann on December 5, 2003 10:26 AM

____

Krugman's statement on the shares of incomes: "[T]he share of *wages and benefits* in national income has been remarkably steady (at about 73 percent) *for the past generation.*" http://web.mit.edu/krugman/www/greider.html

There's some interesting unpacking to do from that statement.

First, it covers a fairly narrow period, much narrower than the two centuries of Prof. DeLong's statement. Second, by including benefits, it misses an important fact: medical inflation has by far outstripped general inflation in the last generation. One can't eat health insurance, nor live in it. For an executive earning $1,000,000 per year, a change in healthcare costs from $1,000 - $5,000 (at constant salary) represents a small loss in cash income. For a typical worker earning $30K per year, that means a drop of over 10% in cash income.

The Erkhleung data, http://www.econ.umn.edu/%7Erkhleung/macro3102/fig3.pdf, cover a longer period (1929-2001), but illustrate another problem. If self-employed income is assigned to capital, then then there has been a significant shift (from roughly 60-72%) of the fraction labor has received. If 2/3 of self-employed income is assigned to labor, then the shift is smaller (from ca. 65-72%), but is still visible. What is a reasonable number to use, give that self-employment has changed radically over that period? I don't know. The two lines converge in the present. Is that plausible? Considering the massive changes in society, I somehow doubt it. Should some fraction of income imputed to capital nowadays actually be called labor income, because it represents stock/options paid in lieu of salary? Again, I don't know, but would like to. How are shifts in noncash income, such as has occurred in the transition from farming to other forms of employment, accounted for? Unknown, at least to me.

But most important is understanding what the graph means, in human terms. Even if one uses what appear to be the trends line pre-war vs. post-Great Society, in which the shift of the share of income is less, perhaps 68-72%, that's a lot of money. In 10T national economy, a shift of just 1% represents $100B. Distributed over 300 million people, that's over $300 per capita!

It's all very well for armchair economists to call the shifts in income trivial, but for a middle class family, the change shown on the chart from 1975 to 1998 represents the difference between giving a child a college education and not, between owning a home and not, between having health care coverage and not.

So, at least from what I've seen, I would still question Professor DeLong's statement.

Again, the bottom line is inequality in income, and more crucially, in assets. There, the data are quite clear. Inequality has increased substantially in the last generation, no matter what the income data might seem to say.

Posted by: Charles on December 5, 2003 10:44 AM

____

"Smalley was dead wrong about enzymes requiring water to work."

Err, no. Much less water than previously thought, but they still need water.

Posted by: Tom on December 5, 2003 12:17 PM

____

So, as I understand it, this is the history of industrialization.

1. "Stagnant real wages, horrible public health conditions."

2. THEN A MIRACLE HAPPENS.

3. "the predictions of the immiseration of the working class were completely wrong."

Unless it happens to be a foregone conclusion to go from step 1 to step 3, some people might ask what was involved in step 2.

The nanotech stuff sounds kind of Star Trekkian, where you get your food out of those food maker things, etc. I suppose that will mean that there is no need for factory workers, just people to watch over the little assembler guys and make sure things are set up right.

And, as far as jobs, also thinking Star Trekkian and what jobs our government is willing to fund, it will definitely be time to ramp up the military to include just about everyone, because we are going to need us some jobs.

Posted by: northernLights on December 5, 2003 12:31 PM

____

Here's another essay on the challenges in measuring labor's share: http://www.irs.princeton.edu/pubs/pdfs/413.pdf

I think everyone can agree that inequality in income and wealth has increased since the 1970s (in income, it may be since 1968). I also we can agree that the change has not been monumental: that is, we have not gone from an egalitarian paradise to a Russian-serf-like state. The income distribution numbers I cited many posts above are pretty clear on this point. And even the wealth numbers don't show a radical shift. Here's a comparison of the distribution of wealth ownership in 1976 and 1998: http://www.ufenet.org/research/Economic_Apartheid_Data.html#p55. In 1976, the top 10% owned 65% of the wealth, and in 1998 it owned 71% of the wealth. And these numbers are based on Edward Wolff's work, which some economists have criticized for being too biased in favor of a depiction of an increase in inequality. (1998 was also near the peak of the bull market. One suspects that the top 10% is considerably less wealthy now then it was then, but I may be wrong about that.)

The big shift Wolff documents is a dramatic increase in the amount of wealth held by the top 1% of the population, which he says is double the percentage it was in 1976. But most of that gain came at the expense of the top 2-10% of the population, not the rest of us. I don't think the redistribution of wealth among the rich is really what we mean when we say that society is becoming more unequal.

Even so, we have an unmistakable trend toward inequality between the early 1970s and the mid-1990s. (I don't really see any evidence that things have gotten worse since then.) The question is, what does this mean for American society?

Charles is right. In an economy as big as the U.S., even small percentage shifts constitute real money. So if the distribution of income had stayed the same as it was in the 1970s, most Americans today would have more money than they do. All things being equal, that'd be a better state of affairs. But you can't demonstrate that an increase in inequality is bad by saying that any increase in inequality is bad. That's assuming away what you're trying to demonstrate.

Charles suggests that the increase in inequality has had an effect on Americans' education and health care. The number of Americans who attend college is much higher today than it was in the 1970s -- http://nces.ed.gov/programs/coe/2003/pdf/05_2003.pdf -- and there's simply no comparison to the difference in educational level between the average American today and in, say, the 1950s, when a sizeable percentage of the population never even finished high school. (Today, around 85% of 18-to-24-year-olds have a high school degree.)

As for health care, life expectancy at birth in 1973 was 71.3 years: http://www.cdc.gov/nchs/data/lifetables/life73_2acc.pdf. In 2000, it was 76.9 years. And I've never seen a study suggesting that most Americans are unhealthier than they were in the 1970s. Certainly things are much better today than they were for most of the 1947-1973 period, since a large chunk (much larger than today) of Americans had no health insurance at all until the mid- to late 1960s. This piece has some info on that: http://www.nytimes.com/2003/12/01/opinion/01SANT.html.

In an earlier post, Charles mentioned that the key was "income security," which allowed people to take risks to better their condition, invest time in society, and stand up to intimidation. This seems reasonable to me. But I'm not sure what evidence there is that the average American income is less "secure" than it was in the 1947-1973 period. Certainly if you compare the average American's life today to any time before the mid-1960s, it looks much more secure today. The average income is significantly larger. A higher percentage of Americans own their own homes. Ordinary people have access to credit that they never had before the 1960s. A much higher percentage have health insurance, and health care in general is infinitely better than it was. As for since the 1970s, all these statistics -- with the important expectation of health, as we've seen -- are about the same. I may be missing it, but I don't see the evidence of a rise in "insecurity" (again, we can't use inequality as a proxy for this, because we're trying to figure out if inequality has concretely bad effects, not assuming that it is inherently bad).

Finally, there's the political question, that inequality is bad because it threatens democracy. This seems intuitively right. Levels of inequality like those of, say, Tsarist Russia probably make democracy difficult. But if you look at 20th century American history -- as Mark and Charles were arguing about -- I think it's very difficult to make the case that there's any correlation between the level of inequality and the rise or decline of democracy.

The single most important advance in popular democracy was obviously women's suffrage, which enfranchised half the population. That happened in 1920, when inequality (as measured by the Gini index) was dramatically higher than it is today: http://www.ssc.wisc.edu/irp/pubs/dp116698.pdf (p. 6). The rise of organized labor and the passage of New Deal legislation happened in the 1930s, when inequality was near its peak for the century. (Plotnick and Smolensky, who are left economists, show in the study cited above that inequality did not fall during the Depression, but rather rose, which makes sense when you think about how high the unemployment rate was.) Progressivism, which was the first sustained response to corporate power and which was responsible (whatever its flaws) for a host of democratizing and citizen-protection legislation (direct election of senators, passage of income tax, food and drug legislation, etc.) took place when inequality was, again, extraordinarily high by our standards. It's certainly true that the 1960s saw a flowering of democracy, but the 1950s (part of the period of falling inequality) brought us McCarthyism, while in the past two decades we've seen the rise of the gay-rights movement and, no less significantly, much greater attention to the rights of the disabled. And the environment is inarguably in better shape today than it was in 1973. The point is simply that you cannot look at 20th-century America and find any direct connection between inequality and democracy or the lack thereof.

I'm not saying that life is better today than it was in 1973, although I think that if you could ask the average American to choose between living in 1973 and 2003, she would pick the latter. But that's a judgment call. I am saying, though, that it's very hard to see the concrete harm that the rise in inequality has effected, and certainly history would suggest that if democracy is currently under threat, it's not for reasons having to do with the rise in inequality.

Posted by: James Surowiecki on December 5, 2003 01:10 PM

____

Re: Charles and James Surowiecki:

It is interesting to correlate the philosophical arguments presented by Francis Fukuyama in ’The End of History and the Last Man’ with the economic arguments made by posters on this site. I am not at all sure that we have established the compatibility of free market capitalism with democratic governance.

The other question relates to the question of ‘noblesse oblige’ or republicanism, which was much admired by our founding fathers and sacrificed with great regret, especially by Madison, as the American ‘experiment’ turned towards democracy in all it’s free-for-all forms. Are the ’markets’ possessed of sufficient intelligence to guide our economy or is it ultimately necessary to provide some from of gentile guidance to the ’uneducated masses.’ The terminology reeks of last generation political ideology but have we actually resolved the issues?

Posted by: Ann on December 5, 2003 05:04 PM

____

Thank you, Mr. Surowiecki. That's a very constructive post. The Krueger paper is very interesting.

On this point, "Charles suggests that the increase in inequality has had an effect on Americans' education and health care. The number of Americans who attend college is much higher today than it was in the 1970s... " I would reply that that is because college education is now viewed as an essential of life rather than a luxury. Savings have fallen drastically, debt is way up, individual wages have fallen because more people are working, including more young people.
Of course, the cost of a college education has also risen, such that the educational system would probably collapse without an elaborate network of state subsidies. And, as the Krueger paper points out, the value of labor has been falling, and only investments in human capital have prevented wages from falling even further.

The life expectancy observation is a good one, but it's dependent on many factors other than income. Smoking cessation is probably the single most important contribution to life expectancy since the development of penicillin, insulin and childhood vaccines. Given that there are such potent extrinsic gactors, I would be cautious in trying to correlate life expectancy directly to inequality.

And, yes, it's true that health insurance grew dramatically in the 1960s-- in large part as a consequence of Medicare. But the graph you link in Santerre's article shows health care reaching an optimum at about the same time inequality reached a minimum... and then rising with inequality. While one should take any "misery index" with a grain of salt, Santerre's article does say that health care consumers were best off when inequality was lowest and have been losing ground ever since.

As for insecurity, one can certainly debate the status in the early 20th century vs. the 1950s... but I'm not sure to what end. I look at the 19th century, with zero income security. That's the fulfillment of income inequality, when wealthy Robber Barons do whatever they want and everyone else has to obey.

In this era, we have lingering protections from the Roosevelt Era, including Social Security and some unemployment insurance. We have Medicare thanks to Johnson and the Great Society. The Republican Party has made it no secret that it wants to eliminate Medicare and Social Security, to replace them with privatized systems that can be further gutted by employers. If they succeed, income security will be a thing of the past. Democracy in the United States is on pretty shaky ground already, with corporations buying legislation so shamelessly that we may even have a bribery scandal brewing in Congress.

As for whether inequality weakens democracy, I think that once one concedes the extremum-- that extreme wealth inequality goes hand-in-hand with tyranny-- one has more or less conceded the argument. No, economic phenomena are not simple linear processes. They usually have optima. But we are much closer to extreme wealth inequality than to total equality of wealth. And the trend is definitely toward oligarchy and away from democracy.

One final point: trying to correlate short-term fluctuations in inequality or democracy are unproductive. The short term includes extrinsic factors, such as wars leading to curtailment of domestic freedoms (that's the story of the 1950s) and depressions (which make people more earnest in demanding democracy). It's only in the broader contours of history that one can see how wealth inequality has acted in keeping people down. The Tsars-- that's a good data point.

Posted by: Charles on December 5, 2003 05:30 PM

____

Ann asks, "I am not at all sure that we have established the compatibility of free market capitalism with democratic governance."

I'd like to see some genuine free market capitalism, Ann. It seems to me that things have always been pretty well controlled by insiders, large corporations and the wealthy. I always get a smile out of people who complain about regulation... not knowing that the large companies basically control the regulatory agencies. They know how to create barriers to entry. They're brilliant at it. And they're also brilliant at using the issue of regulation-- the very regulation they themselves crafted to keep competition out-- as a Republican campaign issue!

If we could guarantee a system of near-perfect information, a real one-person-one-vote/ 95% participation electoral system and basic income and health security, then I'd have no qualms about the power of business.

But one encounters the same problem that is seen in Ayn Rand's writings: in her world, there are no helpless young, no frail elderly. No one has terminal cancer. There are no retarded children, and no mentally ill. No one is addicted to drugs or alcohol. In such a world, almost any economic system would work. But, sadly, Ayn Rand's world does not exist.

Accordingly, until we have the near-perfect information, fair electoral system and basic security, I will advise people to treat the corporate state as an imminent, deadly danger.

Posted by: Charles on December 5, 2003 05:45 PM

____

Nanotech will, if it is even half of what is hoped for, obsolete industrial capitalism. It will do so by, for many purposes, obsoleting the need for large, expensive, fixed machinery--industrial capital property--and the vast armies of workers needed to operate such machinery. So nanotechnology will bring us to one of those times of which Marx wrote when the social order of production, and the legal order of property that, will be overturned. The question comes up what the crucial form of property will be--the one which would order a nanotechnological mode of production. I think the answer is information and ideas in physical forms, material, especially biomass, and, as always energy. It is likely that nanotech will make solar energy relatively easy to gather and use for (slow) production--it will become easy to cover large areas with devices which gather solar energy, or perhaps even use biomass directly. The people who own such things--may be groups rather than individuals. The order of such groups, hmmm, good question.

"It is then safe to assume that even when (and if) the nanotech revolution strikes, much of the world will be lagging behind." Not so—because there is no requirement for extensive capital property, the revolution can spring up anywhere, indeed is more likely to spring up in the third world, which is not already committed to industrial production.

Posted by: Randolph Fritz on December 5, 2003 10:07 PM

____

I think I can believe that "extreme wealth inequality" is incompatible with democracy without conceding that any income inequality (or rising inequality) weakens democracy. To my mind, there is a qualitative and not a quantitative difference between inequality in the U.S. (at least in this century) and inequality in, say, Tsarist Russia. A society in which incomes are unequally distributed but most people enjoy at least a middle-class standard of living (if I can use that phrase as shorthand) is not a society that I think would have any trouble being democratic (as long as the system was one-man, one-vote). And I think the U.S. today is still that kind of society. As I think I wrote earlier, I don't actually think there is an economic trend toward oligarchy, because I believe things have improved quite a bit since the mid-1990s. The disastrous decades for American workers, to my mind, were the 1970s and the 1980s.

At the same time, it's true that much of what makes this society still healthy (in my eyes) is, as you point out, the result of advances in the past that we're still reaping the benefits of. If those things -- Social Security, Medicare, unemployment insurance, progressive income tax, etc. -- were to disappear, then I think the results (for the U.S. in general, and for American democracy) would be very ugly. My (relatively) sanguine attitude isn't meant to imply, then, that there's nothing to worry about. I guess I just have this kind of visceral (and undoubtedly naive) faith that when push comes to shove, ordinary Americans will do the right thing.

Anyway, this has been very interesting. I do have one last question/issue. One of the big reasons I'm skeptical that the "corporate state" is imminent (or perhaps even here) is that corporate profits have not risen. It is, of course, true that corporations could be dominating the political system to their own ends but just be doing a bad job of helping themselves, but I sort of doubt it. If corporations have significantly more power than they did in the 1960s, why are corporate profits actually lower than they were in the 1960s (which I think is generally agreed to be the peak of corporate profitability)?

Posted by: James Surowiecki on December 6, 2003 01:22 AM

____

This has been a fascinating thread, with lots of interesting comments.

But let's get to the serious stuff. Please, Randolph Fritz, do not use "obsolete" as a verb.

Posted by: Tom Slee on December 6, 2003 10:59 AM

____

James Surowiecki writes, "As I think I wrote earlier, I don't actually think there is an economic trend toward oligarchy, because I believe things have improved quite a bit since the mid-1990s. The disastrous decades for American workers, to my mind, were the 1970s and the 1980s."

Look at Table 2 of the original work in some detail (http://www.levy.org/docs/wrkpap/papers/300.html)

The net worth of the top 1% rose from 33.8% of total to 38.1% of total. It's not plausible to believe that that is due to the market, because that fraction was unchanged (declined a bit, actually) from 1995-98. More telling, the net worth of the bottom 60% is 4.7%, down from 6.1% in 1983. And the net worth of the bottom 40% is only 0.2%, down from 0.9%!

If a middle class family has some reserves, it may be willing to contribute to candidates, blow the whistle on wrongdoing, or otherwise expend resources to maintain democracy. But if Wolff's tables are correct, the average family in the bottom 60% has declined by a third, while the bottom 40% have been all but wiped out.

The political effects of income inequality come from the *relative* disparity. I suggest the parable of the elephants and the ants. The elephant was a very nice young elephant, and when he was small, he was good friends with the ants. But as he grew, he got farther from the ground. And so, the elephant began accidentally stepping on the ants because they were so very, very small. When they brought the matter to his attention, he apologized and tried to steer clear of where ants might be walking. But at last he grew so large that he couldn't see or hear them, and frankly didn't care.

I leave it to you to write the ending.

You're welcome to discount Wolf's work-- it's a difficult area to study and one that is under-researched. But Wolf's work is what we have.

>>At the same time, it's true that much of what makes this society still healthy (in my eyes) is, as you point out, the result of advances in the past that we're still reaping the benefits of. If those things -- Social Security, Medicare, unemployment insurance, progressive income tax, etc. -- were to disappear, then I think the results (for the U.S. in general, and for American democracy) would be very ugly.>I do have one last question/issue. One of the big reasons I'm skeptical that the "corporate state" is imminent (or perhaps even here) is that corporate profits have not risen. It is, of course, true that corporations could be dominating the political system to their own ends but just be doing a bad job of helping themselves, but I sort of doubt it. If corporations have significantly more power than they did in the 1960s, why are corporate profits actually lower than they were in the 1960s (which I think is generally agreed to be the peak of corporate profitability)?<<

Several things.

Some of the drop in profits is due to foreign competition, as with the auto industry-- and that's a good thing. As you know, in competitive markets, economic profits are zero.

But corporate failure is much worse than the profit figure would show. Corporations are more heavily-subsidized, and they have far less tax incentive to lie to the IRS. I think this is a worldwide phenomenon, though the US is leading. Cash flow/op income discrepancies suggest books are being cooked, according to CFO. If we had honest accounting and no feeding at the trough, profits might well be zxero.

As for power, it can only be measured in a relative way. As the net worth figures above indicate, the assets of the bottom 40% have collapsed while the next 20% have lost a third. Therefore, even if corporations have the same amount of power (measured by share of GDP, say) as in the 1960s, they are more powerful.

Finally, thanks to a very uncritical financial press, we all have a distorted view of corporations. I am by no means a reflexive detractor of corporations. I won't elaborate, but I mean that most sincerely. But from the inside, many of them make FUBAR a desirable state. I relate that to a loss of employee power. In the old days, it's true that people wouldn't blow the whistle on the corporation. But they also felt much freer to speak out against bad decisions before they were irrevocable.

So, how can screwups attain high position? I like George Soros' phrase, that the United States is in a bubble era... a political, not financial, bubble.

Right until the last moment in a bubble, and often well beyond, touts are touting the great new age. The skeptics and the cynics are called, among other things, "shrill".

And then, as in 1929, or in Gorbachov's Soviet Union, or any of a dozen other memorable bubbles, they collide with reality and implode.

Afterwards, no one can figure out how it happened.

I think falling corporate profits fall into that category. Some companies are doing great. But the typical company is led by someone who doesn't know the business and has his own interests ahead of the company's. At best, they're a Carly Fiorina, trying to stitch together a company that prided itself on quality and technology with a company famous for costcutting. At worst, they're an Al Dunlop, looting the company for personal enrichment.

And at the root of it all is a loss of a sense of freedom by employees, who would otherwise speak against wrong and prevent it from happening.

Posted by: Charles on December 6, 2003 11:12 AM

____

DNA and Reflections about Minimum Amount of Instructions and Molecules Needed for Self-Replication and Functionality Beyond Replication

DNA and RNA are the molecule chains that cells and virii use to self-replicate and derive functional instructions from. Biological researches have postulated that a major portion of DNA is "junk" DNA, or repeated and unnecessary sequences. It follows that it may be possible to remove this "junk" DNA and have a cell or viral structure that uses the minimum amount of DNA to survive and self-replicate.

If this ideal instruction set were created, then could we add further instructions to achieve functionality beyond simple self-reproduction and subsistence? Could this be the minimum amount of material needed to create a drexlerian self-replicator?

Aside to any biology experts:
Could "junk" DNA serve a complex purpose not immediatly discernable?

Posted by: Brian Fisher on December 6, 2003 01:20 PM

____

RE: corporate state - health versus danger.

Charles is using economic analysis to support his contention that the corporate state presents an imminent threat to both wage earners as well as the institution of democracy. Income distribution is one focal point but I submit there are several others.

The hi-tech industry introduced two practices that skewed the accounting and financial reporting - hedonic pricing and expensing of stock options. The former ‘inflates’ the traditional growth by including increases in productivity provided by faster and better computational power and the latter, if implemented in full, will reduce revenue growth, at least in the technology sector.

An additional practice new to many, if not all, manufacturing industries is outsourcing, which is categorized as a ‘service’ instead of capital goods production and to my knowledge this change in definition is not adequately reflected in the economic tracking.

Companies that are struggling for any reason - poor management, sunk market, corrupt competitive practices, etc - typically forfeit pension fund contributions, which is not acknowledged until the insurance company goes into bankruptcy trying to cover too many underfunded plans. This is the current situation with the PBGC, largely due to steel and airline sectors.

Companies that have introduced ‘non-market value’ into the economy through improved environmental production techniques, such as recycling, have no way to include quality of life contributions into the corporate accounting. I understand work is being done in this area - contingency evaluation is one effort, but a realistic and robust methodology is still lacking.

Finally, there are a significantly large number of illegal immigrants in this country whose contribution to the income distribution reportage is unidentified and this effect should be clarified to make the economic numbers more meaningful as input to policy and analysis.

My point here is not to tell the economic community what to do. My point is to tell you that there are a growing number of people in this country who no longer have any faith in the numbers you produce.

Posted by: Ann on December 7, 2003 12:51 AM

____

RE: corporate state - health versus danger.

Charles is using economic analysis to support his contention that the corporate state presents an imminent threat to both wage earners as well as the institution of democracy. Income distribution is one focal point but I submit there are several others.

The hi-tech industry introduced two practices that skewed the accounting and financial reporting - hedonic pricing and expensing of stock options. The former ‘inflates’ the traditional growth by including increases in productivity provided by faster and better computational power and the latter, if implemented in full, will reduce revenue growth, at least in the technology sector.

An additional practice new to many, if not all, manufacturing industries is outsourcing, which is categorized as a ‘service’ instead of capital goods production and to my knowledge this change in definition is not adequately reflected in the economic tracking.

Companies that are struggling for any reason - poor management, sunk market, corrupt competitive practices, etc - typically forfeit pension fund contributions, which is not acknowledged until the insurance company goes into bankruptcy trying to cover too many underfunded plans. This is the current situation with the PBGC, largely due to steel and airline sectors.

Companies that have introduced ‘non-market value’ into the economy through improved environmental production techniques, such as recycling, have no way to include quality of life contributions into the corporate accounting. I understand work is being done in this area - contingency evaluation is one effort, but a realistic and robust methodology is still lacking.

Finally, there are a significantly large number of illegal immigrants in this country whose contribution to the income distribution reportage is unidentified and this effect should be clarified to make the economic numbers more meaningful as input to policy and analysis.

My point here is not to tell the economic community what to do. My point is to tell you that there are a growing number of people in this country who no longer have any faith in the numbers you produce.

Posted by: Ann on December 7, 2003 12:56 AM

____

If I may add a post script. It is fine to focus on the subject of income distribution, but if the subject is expanded to include the role of bureaucracy in capitalist markets and/or the proper relationship between governance and markets, then the boundaries of relevance become quite different.

The regulatory role of the federal bureaucracy has been historically, and is at present, defined as benefits conferred upon the ‘few’, typically the few with the most influence. The documented history is compelling.

But I cannot accept the implied false dichotomy that free markets are the only alternative, as suggested above. I will not expand too much on this point because I believe it is off-topic except to provide a quotation:

“You can have the greatest controls in the world, but unless the people doing the deals have integrity, it doesn’t matter what the hell you do.” Robert O’Connor, AOL (commenting on the aggressive ad sales of AOL that ‘contributed‘ to the NASDAQ decline in 2000 by exposing immature dot-com companies to a level of financial commitment they could not sustain.)

In the simplest incarnation, the situation requires a better balance between perfecting mankind and perfecting the markets - as a metaphor for all secular institutions. This dichotomy leads directly into the nasty morass of post-modern thought and deconstruction and the validation of “theistic science” or divinely-inspired empiricism as a valid alternative to naturalism or objective epistemology, which is taking lives on another part of the planet. So I digress, but my point is that democracy is currently exposed to enemies far more threatening than the economics of income distribution.

Posted by: Ann on December 7, 2003 01:43 AM

____

As a final footnote, I should defend myself against the implied charge of being a Randian Objectivist. As a high school student, I had the good fortune to be exposed to a Russian immigrant from New York who was ‘stuck’ in my relatively small hometown while her husband worked under security clearance in radio telemetry for the military base also in my home town. She despised the philosophy of Ayn Rand and I never really had much of a chance to ever embrace Objectivism.

What I do embrace is scientific empiricism as a superior, and possibly the only, avenue of empirical knowledge currently available to mankind. The scientific method is not a ‘co-construct’ equivalent to ‘theistic science’ and it is not a context-specific epistemology dependent on prevailing social paradigms, as alleged by radical misleaders of Kuhn et al.

I ‘believe’ that I understand the Leftist rebuttal to Rand’s Objectivism because surely human existence is more than the sum of the parts. The spirit-body duality has not yet been effectively integrated into a single satisfying philosophy.

However, I object to the post modern attempt to ridicule the most productive and reliable epistemology devised to date in what is nothing more than a guilty philosophical flight from the eruption of the Marxist and Fascist states of WWII within what was intended to be a utopian scheme of egalitarianism. The Left flight into the politics of relativism, perspectives, and special interest strategies was, IMO, ill-conceived and they are now facing the difficult task of reconciling the moral and political authority assigned to relative perspectives with the need for met-narratives to unite the fragmented social groups into functional communities. The Left must also find a way to swallow the difficult truth that scientific objectivism is ‘hegemonic’ among the possible avenues of epistemological inquiry available to humankind. I submit this admission would not result in the deaths of anyone, but the requisite humility is not yet available.

Lastly, I object to the parasitic presence of Left post-modern thought within the Democratic Party. They have literally gutted what used to be a respectable political party with irrelevant rhetoric that translated very poorly into a political strategy of ‘Do Good’ by government fiat. This is an authoritative morality that is hegemonic and quite pricey.

The economic contribution has been interesting, if inconclusive. The flacks, flakes, hacks, and cognitive crickets can kiss my analysis.

Posted by: Ann on December 7, 2003 06:32 AM

____

Ann says, "The hi-tech industry introduced two practices that skewed the accounting and financial reporting - hedonic pricing and expensing of stock options. The former ‘inflates’ the traditional growth by including increases in productivity provided by faster and better computational power and the latter, if implemented in full, will reduce revenue growth, at least in the technology sector."

I assume this is in response to the issue of corporate performance.

One estimate of the effect of hedonic pricing is 0.2% of GDP over five years (http://www.oecd.org/dataoecd/14/23/16694808.ppt). That's not peanuts, by any means, but it's also not a dominant factor. Stock options are an interesting issue. In many industries, they're negligible and indeed their usage has contracted ever since the issue of expensing has come up. But in startups, they're a major portion of compensation. So, yes, there are two factors which contribute to an overestimate of corporate performance. However, only the latter would show up in the key statistic, i.e., profit growth. There are much larger issues in measuring profit, especially accounting practices and taxation. When companies are paying negative taxes and reporting that as profit, there's a problem.

Ann adds, "An additional practice new to many, if not all, manufacturing industries is outsourcing, which is categorized as a ‘service’ instead of capital goods production and to my knowledge this change in definition is not adequately reflected in the economic tracking."

Yes. I will be very interested to see how this plays out. I suspect the "productivity boom" of the last quarter is a statistical anomaly.

Ann also adds, "Companies that are struggling for any reason - poor management, sunk market, corrupt competitive practices, etc - typically forfeit pension fund contributions, which is not acknowledged until the insurance company goes into bankruptcy trying to cover too many underfunded plans."

Pension funds are a real concern, especially since the rules for what constitutes an adequately-funded program are too elastic.

And this, "The regulatory role of the federal bureaucracy has been historically, and is at present, defined as benefits conferred upon the ‘few’, typically the few with the most influence. The documented history is compelling."

I know. As I wrote, " always get a smile out of people who complain about regulation... not knowing that the large companies basically control the regulatory agencies. They know how to create barriers to entry."

As for whether free market capitalism can work, I certainly think that genuine regulation-- by the public and not by the regulated-- as well as some income redistribution are essential to any nation. So, I am not proposing laissez faire capitalism: we know that doesn't work.

But the first step to any reform effort is to get corporate siphons out of the Treasury. Other essential steps are public financing of elections, revitalizing anti-trust law and laws guaranteeing the right to organize.

Ann also says, "As a final footnote, I should defend myself against the implied charge of being a Randian Objectivist."

No such "charge" was implied. I simply said that Rand's world sounds attractive but isn't very realistic. I thought I was agreeing with you that advocacy of free market capitalism without regulation, which is what Rand's readers generally take as the message of her books, fails to recognize the imperfections that make it unrealistic.

As for the rest of it, you lost me.

Posted by: Charles on December 7, 2003 09:25 AM

____


Equality of result is unjust.

If you think otherwise, do you think someone who works twice as much should be paid the same as one who works half as much?
Should a model citizen and a rapist be treated the same by the local magistrate? Or, consider the inquality of beauty, should the beautiful be made ugly to aid in creating facial 'fairness'?

Socialistic attempts to create equality not only create poverty and economic misery, they also wreak havoc on justice. Justice is the equality of ends through a fair process, and any fair process must involve giving people their due.

So this begs a large question of why it is deemed a 'problem' to have inequaliy. One poster says: "I have showed everyone here that, based on U.S. history in the 20th century, there was NO correlation between democracy and equality."

Not only that, but one could even posit that there is only weak correlation between socialist economies and real equality and/or opportunity. Consider the USSR's nomenklatura for example.

A 'fair' but complex society inevitably has forms of hierarchy and inequality, but what makes inequality unfair is not inequality itself but the abuse of power to steal that which rightfully belongs to another. Notably, this happens in any form of Government, but is larger when the role of Government in the economy is larger.

We must retire the false notion of equality of result as having any bearing on the health of a society or on its 'fairness' and return to more properly morally based notions, ie, equality of opportunity and meritocracy.

Posted by: PatMcguinness on December 7, 2003 02:32 PM

____


Equality of result is unjust.

If you think otherwise, do you think someone who works twice as much should be paid the same as one who works half as much?
Should a model citizen and a rapist be treated the same by the local magistrate? Or, consider the inquality of beauty, should the beautiful be made ugly to aid in creating facial 'fairness'?

Socialistic attempts to create equality not only create poverty and economic misery, they also wreak havoc on justice. Justice is the equality of ends through a fair process, and any fair process must involve giving people their due.

So this begs a large question of why it is deemed a 'problem' to have inequaliy. One poster says: "I have showed everyone here that, based on U.S. history in the 20th century, there was NO correlation between democracy and equality."

Not only that, but one could even posit that there is only weak correlation between socialist economies and real equality and/or opportunity. Consider the USSR's nomenklatura for example.

A 'fair' but complex society inevitably has forms of hierarchy and inequality, but what makes inequality unfair is not inequality itself but the abuse of power to steal that which rightfully belongs to another. Notably, this happens in any form of Government, but is larger when the role of Government in the economy is larger.

We must retire the false notion of equality of result as having any bearing on the health of a society or on its 'fairness' and return to more properly morally based notions, ie, equality of opportunity and meritocracy.

Posted by: PatMcguinness on December 7, 2003 02:37 PM

____

Response to Ian:

(Neurotechnology) "It's ideology on a level we're completely unprepared to deal with."

Ian, this is the precise reason I began communicating, writing and speaking about our emerging neurosociety. I am extremely concerned about the neuroethical issues with respect to this technology and the profound implications it represents. (See my 30 posts on neuroethics and neuropolicy--

http://www.corante.com/brainwaves/archives/cat_neuroethics.html

Re: "If you can change the brain at a low level, it's not just about the economy any more."

Exactly, this is why I describe it as our emerging neurosociety, not a neuroeconomy. There will be profound changes in people's perceptions of cultural differences, interpersonal conflict, team building, etc... The public conversation cannot begin soon enough.

Take some time to read through my daily posts on this topic over the past year:

http://www.corante.com/brainwaves


Posted by: Zack Lynch on December 7, 2003 05:27 PM

____

Pat McGuiness states that "A 'fair' but complex society inevitably has forms of hierarchy and inequality, but what makes inequality unfair is not inequality itself but the abuse of power to steal that which rightfully belongs to another. Notably, this happens in any form of Government, but is larger when the role of Government in the economy is larger."

There is no evidence that larger government implies more abuse of power overall. What makes abuse of power possible is a disproportion of power by various players. If corporations have all the power, they will have be the abusers. If government has all the power, and lacks genuine democratic oversight, it can become the abuser.

The solution is to distribute power as broadly as possible. To the extent that money equates to power, that means reducing inequality. But of course, money only equates to power when there are gross disparities of wealth. Therefore, considerable inequality is compatible with democracy. We are well past that point, such that the corporate state controls far too much.

Mr. McGuinness states that "Equality of result is unjust."

But no one has proposed requiring equality of results. This is one of those strawmen that gets thrown out in these discussions. It gets tedious to point out to those who employ it that it amounts to creating a false dichotomy, one of the least productive rhetorical techniques.

Posted by: Charles on December 7, 2003 08:56 PM

____

RE: Charles

Sorry I missed the nuance of your Rand comments. As for 'the rest of it', I will let it rest because I believe that some of the more extreme interpretations of so-called post-modern thought will wither away on the intellectual vine. And I am very gratified to see evidence that people are thinking rationally and realistically about economics, business, and politics. The persistent and stale partisan bickering has left me ice cold and completely contemptuous of a system that not only tolerates it but encourages it. One giant Jerry Springer Show.

RE: Pat Mcguinness

How do you introduce concepts of morality into secular institutions designed to maintain an arms length distance from religion? In my opinion, the startling absence of ethical behavior in both business and politics, which have been joined at the hip for many years, is the direct result of being unable to separate moral concepts from the religious framework. Secular morality is almost unheard of in the business environment. It is almost universally axiomatic that markets are NOT vehicles for achieving social change, but function exclusively as vehicles for maximizing profit. Hence the sometimes tortured attempts to find some sort of workable structure in less incendiary concepts like equality.

You make a very good point. This is why economics remains a challenging discipline. Several attempts were made during this thread to keep posters ‘on-topic’ but real solutions cannot evolve from subjects that have been cherry-picked for evaluation. It is very complicated in different ways. Surely the interaction of technical issues with ethical issues is but one complication.

Posted by: Ann on December 9, 2003 02:06 PM

____

Genius hath electric power which earth can never tame.

Posted by: Dawson Richard on December 10, 2003 02:37 AM

____

You are free and that is why you are lost.

Posted by: Gutenberg Gene on December 20, 2003 03:33 PM

____

Post a comment
















__