Social Darwinism is Alive and Well, and it Dwells Between the Covers of this Book.

"The new forces, elevating in their nature though they be, do not act upon the social fabric from underneath, as was for a long time hoped and believed, but strike it at a point intermediate between top and bottom. It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down."

— Henry George, Progress and Poverty

Move over 1984 and Brave New World. Tyler Cowen conjures his own bleak, dystopian future for humankind. Writing fiction is not his intent, but we have to hope that fiction he writes.

Cowen is an economist at George Mason University. He achieved fifteen minutes of fame via an e-book, The Great Stagnation in 2011. The e-book created a buzz loud enough to grab the attention of a publisher with a printing press. Stagnation insinuated its way between hard covers, from where it continued to make the case that a low-wage, slow-growth economy is something that the world had better get used to. It’s the new normal.

Average is Over, evidently a hurried sequel to Stagnation, reprises Cowen’s message: Extreme income inequality is here to stay. We can't tax the rich, after all, because they have too many channels through which to transfer the burden to the middle class and the poor.

Cowen offers up education as a tool that sub-millionaires might use to elevate themselves economically, but such education as Cowen conceives of might more candidly be called instruction, or schooling, or obedience training. So, operating in a bimodal economy—one that concentrates wealth at the tippy top and diffuses poverty across the broad bottom of the barrel, with no middle between—how does the top dispose of the barrel bottom? Cowen seems to think that that’s a problem to be solved and that he has a solution:

“What if someone proposed that in a few parts of the United States, in the warmer states, some city neighborhoods would be set aside for cheap living?”

Cowen describes the housing in these cheap zones as being modest but not ramshackle, and it all seems fuzzily commonsensical. But then,

“We also would build some makeshift structures there, similar to the better dwellings you might find in a Rio de Janeiro Favela. The quality of the water and electrical infrastructure might be low by American standards, though we could supplement the neighborhood with free municipal wireless (the future version of Marie Antoinette’s famous alleged phrase, “Let them watch internet!”) Hulu and other web-based TV services would replace more expensive cable connections for those residents. Then we would allow people to move there if they desired. In essence, we would be recreating a Mexico-like or Brazil-like environment in part the united States, although with some technological add-ons and most likely greater safety.”

Ok, so let’s fill another flute with bubbly and kick back to get a good look as the great unwashed descend ever deeper into collective poverty. It’s a kind of spectator sport for the well heeled, really. Let’s anticipate this decline in quality of life and contain the newly impoverished in ghettos modeled after Brazilian slums. If we call these habitats for impoverished humanity camps maybe they’ll seem almost recreational. Maybe FEMA would do a good job running these camps, keeping everything orderly and responding to emergencies. They might even cook up a motivational slogan. Maybe something like Arbeit Macht Frei.

No one should find the favela prospect objectionable, Cowen opines, after all, “no one is being forced to live in these places. Some people might prefer to live there. I might prefer to live there if my income were low enough.” He goes on to remind readers that some neighborhoods deteriorate naturally into shantytowns: “The end result is no different from the deliberate shantytowns already discussed.”

Deliberate shantytowns.

Let that cute phrase rattle around inside your skull.

Deliberate shantytowns.

What a striking public policy objective. Cowen wants his manufactured ghettos to be modeled after Brazilian favelas. So, how is it going for the residents of those South American slums? Maybe not so good. Could be better.

You Are Being Stagnated: The social engineers are managing your standard-of-living expectations downwardly.

A pair of insidious memes is making the rounds in the mainstream media. These memes have to do with your standard of living, and they declare that the "Great Recession" is here to stay. George Mason University economist Tyler Cowen calls the persistent economic anemia, "The Great Stagnation," and in his book of that title he argues that we had better get used to hard times. The second meme of the pair is a corollary and is one of the primary legs on which Cowen's argument rests. This meme concerns "the end of innovation." All of humankind's potential inventions evidently already are with us. Or, at least we've picked all of the technological "low-hanging fruit." Innovations currently occupying the pipeline consist of embellishments; they are not game changers, like the inventions of the last century.

This assertion, about technological innovation, admittedly, invites debate, given the ongoing computerization of pretty much everything. Nonetheless, say the pessimists, for whatever reason, recent breakthroughs lack the economic potency of the technological breakthroughs of the early to middle twentieth century. Those innovations fueled deep and broad economic gains. More recent breakthroughs are of a different nature. They are hood ornaments glued onto tried-and-true technologies, and they concentrate their relatively meager economic gains selectively in the pockets of the already rich. Evidently, the "New Normal" applies only to the middle class and the poor. Cowen seems too cavalier about this implication of the new economic order: It's just the way the cookie crumbles.

Columnist Paul Krugman attributes much of the economic stagnation to a lack of demand for goods and services, essentially telling us that the legendary "job creators" won't be creating jobs any time soon, not until they see more cash in the pockets of prospective customers. If that's a major hold-up, keeping the economy from recovering, then putting cash in the pockets of consumers might be a good thing--the kind of economic stimulus that might work. If only that were the objective of the professional theoreticians and technicians "working" on the problem.

Despite these implications of Cowen's and Krugman's diagnoses, the prescription from both sides is simple: Get Used To It. Krugman glowingly cites economist and political advisor Lawrence (Larry) Summers as having arrived at the same conclusions about the New Normal and The End of Innovation. Now, there's a champion for the working bloke.

Push-back from the contrarians, those who reject the end-of-innovation premise, predictably cites the ubiquity of computing and communications technologies. The new devices have reshaped thoroughly the habits of consumers and big business alike. Computers streamline manufacturing and make comparison shopping as simple as swiping a touchscreen. The impact of the more recent technologies can hardly be said to pale next to that of the twentieth century's marvels. Nonetheless, the scope of their impact is easier to appreciate when one looks under the hood and sees that tiny little integrated circuit, or IC.

The Wirehead Problem and Money as AI

Here is a potential problem facing engineers of artificial intelligence: A sufficiently intelligent agent will work to tap its reward source directly, without doing otherwise useful work.  In this video Tim Tyler invokes the heroin addict for comparison. He concludes that a superintelligent agent will calculate the long-term effects of becoming a junkie and likely will conclude, as most people do, that it's not worth it.

Tyler goes on to counter this argument by conjuring a monopolistic threat.  What if the superintelligent agent wiped out its competitors?  Then, under the dynamics of a monopoly, it would grow flabby and careless, because there would be no reward in making effort in any other direction. And this situation would become conducive to its yielding to the tempation to become a junkie.

It looks like the threat already has landed. The U.S. dollar/federal reserve note is the superintelligent agent Tyler warns against. The U.S. dollar has tapped it own pleasure center, and in an accelerating cycle of masturbations it has exhausted itself.

Each step in the deregulation of the U.S. banking system brought the dollar closer to its source. Finally, when the real-estate bubble burst, the fallout revealed that the originators of money, the private banks, had crossed a deregulatory threshold, and they had exploited the lifting of essentially all conditions on the granting of loans. Because banks originate dollars by crediting loans, unconditional lending became the U.S. dollar's unfettered tap into its own pleasure center, its source. Now the junkie is going through withdrawal. And if the U.S. dollar gets fired from its job as the world's reserve currency, losing its monopoly privileges? Cold turkey.

Money as superintelligent agent reveals a bias in AI theory, or at least in AI practice, insofar as AI focuses on circuits and programs and patterns of atoms. But money is pure abstraction. It can take any form: seashells, printed paper or electronic accounting entries. Higher intelligence doesn't get bogged down in precise material specifications. It is conceptual.

Consider that money can do many things that you cannot. Indeed, it uses you, and the rest of us, to do its bidding. It is not an enabler, as we're taught to think. We are its enablers.  Look at the wonders it has created with our help.

The terrors that it has instigated? Our myth systems teem with wrathful deities and gods of destruction. Maybe the religious sensibility knows something about the superintelligent abstraction that provokes and persuades and thereby gives form to the world. G-d is a junkie?    

SUPERCLASS, the Global Power Elite and the World They are Making

A moneyed elite controls the world. That’s conspiracy theory. And that's just the way it is, according to David Rothkopf, author of Superclass. Rothkopf hobnobs with this elite. His resume includes a stint as director of Kissinger Associates. (Yes, that Kissinger.) He describes mingling with the multibillionaires at Davos. But the book is not an exposé. The author describes the structure of the elite, the astronomical magnitude of individual fortunes, the revolving doors that connect the U.S. Defense, Commerce, and Treasury Departments with the board rooms of the Fortune 100, and he seems perfectly pleased with it all.

Rothkopf’s purpose is less than clear. At times he plays the anthropologist and renders an objective, dispassionate account of rites and rituals among the upper tiers of the global control hierarchy. He narrates a kind of travelogue of interesting journeys among the high and mighty.

Ostensibly, Rothkopf also is trying to debunk conspiracy theories. He portrays the elite as people with a strong work ethic who embrace honest capitalism. They’re just smart operators. Nothing conspiratorial. But he seems oblivious to the prospect of the sheer magnitude of the elite’s wealth and influence delivering an outcome that for all practical purposes is identical to that of the successful execution of a conspiracy. When the wealthy can shuffle back and forth between the highest executive levels of the public and private sectors, then conspiracy might be an imprecise notion, but not one fundamentally flawed. Rothkopf describes a vast financial control elite whose machinations carry it ever nearer to total global control. A conspiracy by any other name . . . .

Late in the book, Rothkopf does address conspiracy theories directly and plies the old saw about people being scared by the apparent randomness of events and then seeking comfort in the idea that events are managed from behind the scenes. He writes,

“Conspiracy theory is the comfort food of politics. Actually, it is more than that. According to psychologists, it fills a fundamental desire to balance perceived causes with perceived consequences and thus satisfies our sense that bad outcomes are not the product of happenstance.”

He then offers a couple facile quotes from psychologists:

“If we think big events like a president being assassinated can happen at the hands of a minor individual, that points to the unpredictability and randomness of life, and that unsettles us."

and

Conspiracy theories are “psychologically reassuring because what they say is that everything is connected, nothing happens by accident and that there is some kind of order in the world.”

What psychobabble. Insipid.
If conspiracy theories are so reassuring, so warm and fuzzy, then why does a prominent conspiracy magazine go by the name, Paranoia? Why not, Milk and Cookies?

Think about how empty is this dismissal of conspiracy theories. They put people at ease? Puh-leeze.

Take as an example the collapse of the Interstate 35W bridge in Minneapolis. What is the more comforting belief, that the bridge fell because budget cuts reduced inspections, because the warnings that were offered were ignored, because the bridge was overloaded with equipment during repairs, because the original construction used inferior materials—in other words, because of human foibles and bad luck?

OR, is it more comforting to believe that the bridge was brought down deliberately by evil agents conspiring behind the scenes?

The idea that conspiracy theories are comfort food is ridiculous. Just the opposite is true. They are bitter fare. Start espousing conspiracy theories, and your loved ones eventually will start asking you questions like, “If you actually believe that, then how can you sleep at night?” The conspiratorial view is unsettling.

Indeed, people looking for comfort amid the seeming randomness of big events turn to the reassuring tones of network television and mainstream print media to be told that all is as it should be and that our elected leaders are on top of things. The alphabet soup of ABC, CBS, NBC, CNN, MSNBC, PBS, BBC, and NPR constitutes the comfort food of politics.

Of course, one can defend the concentration of wealth in the hands of so few with an assertion that those with wealth are deserving of it. But this leads to a Darwinian tautology:

Who are the wealthy? The deserving.

Who are the deserving? The wealthy.

Come January’s transfer of power, we’ll see how many Bush administration officials and how many congressmen ousted by the election dash over to Wall Street to catch the monies they just pitched over there. Maybe this was the real reason the bailout had to be rushed. The bill had to be signed before the new administration and congress took office. Fresh leadership might have come under pressure to consider the welfare of people outside the millionaire’s club.

It worked by skulduggery, but an autonomous executive class has positioned itself on top of the American masses. The concentrated wealth that this class wields renders inoperable any distinction between public and private sectors. Beyond the reach of democratic institutions and insulated from the discipline of markets, the executive class alternately assumes public office to ratify its wishes then retires to the boardroom to pocket the results in a perpetual cycle of self enrichment.

Conservative: Someone who hates socialism when it benefits poor people but loves socialism when it benefits the wealthy.

And the winners are
J. P. Morgan Chase
Goldman Sachs
Citigroup

Marx Explains McLuhan’s Gnomic Aphorism

The Medium is the Message.

Thus announced Marshall McLuhan—and the fallout continues.

“What could he mean?,” pointy heads have been asking each other for more than a quarter century. “Certainly the message is the message. The medium is a neutral carrier. There IS a difference between Shakespeare and stock market reports. Surely it matters whether the media carry one or the other. The particular medium is unimportant. What matters is the content.”

This is how McLuhan gets refuted, ostensibly.

But wasn’t there a precedent? Karl Marx said something much like McLuhan, but didn’t incur the same criticism (though Marx has incurred much other criticism). Marx said that changes in the means of production alter the relationships among social classes. He said, in effect, the medium is the message.

In Marxist analysis, the introduction of new technologies—once called labor-saving devices—into a society upsets the social order. When the upset is dramatic, a violent revolution might ensue. But the change in the means of production comes first. Revolution is an effect of changes in relationships among social classes, not a cause.

Now, nobody said, “Wait a minute there, Karl. You can’t just say that new technologies rearrange societies. What are those means of production producing? Labor-saving devices are just neutral carriers. There IS a difference between washing machines and bayonets. Surely it matters whether the means of production produce one or the other. The particular means of production is unimportant. Human labor, machine labor, who cares? What matters is the content.”

The medium is the message.