Cyreenik Says
This 12 Jan 13 Economist article, Innovation pessimism: Has the ideas machine broken down?, is a long one about an important idea: Is innovation slowing down? Is this slow down slowing growth in general?
It seems so. The important part, though, is this should have been a topic of US conversation in 2001, not 2013. Why wasn't it? Because we were deeply distracted by the 9-11 disaster. What followed 9-11 was the fear distraction of making anti-terrorism work, and the related mania distraction of not paying attention as good intentions enflamed the asset bubble. Not paying much attention to these issues of innovation and productivity in the early 2000's is a prime example of the deep expense of not treating 9-11 as something one-in-a-million and therefore not worthy of responding to, and not treating al-Qaeda as a group of extremist cranks who scored a remarkably lucky shot, once again, not worthy of becoming the center of US cultural attention.
This article is good to see. It means we are steadily returning our focus to the right, important, issues.
This thought was inspired by this 15 Jan 13 WSJ editorial, Richard Vedder: The Wages of Unemployment: Labor-force participation has declined since 2000, and among the reasons are soaring government benefits.
From the article,
"Why are Americans working less? While there are a number of factors, the phenomenon is due mainly to a variety of public policies that have reduced the incentives to be employed. These policies include:
• Food stamps...
• Social Security disability payments...
• Pell grants...
• Extended unemployment benefits... "
Nothing new here. Important, true, but nothing new.
What came to mind while reading this was a new insight. I combined the ideas in this article with my thoughts on the mystery of why the ultra-low interest rates of the last five years that were supposed to stimulate the economy haven't done so.
The insight: The major difference between a business creating a job and other organizations creating jobs and other activities to keep people busy is how positive feedback -- productivity -- fits into the picture.
A business creates a job when it can bring in more to the business than the expenses of hiring the new employee create. This is positive feedback. The business expends resource and gets more back in return for doing so, and this gives the business, and the community, more resource to spend on the next round. This is what businesses are constantly looking at, so positive feedback is at the center of every hiring choice, be it increase or cut back.
When interest rates are high, this means the search for positive feedback becomes more intense -- businesses get fussier. This means that the positive feedback becomes even more positive, which means growth comes even faster.
So: if we want to see the US economy growing fast again, we should a) raise interest rates, and b) push the job creation into the business arena. Both of these will increase positive feedback.
The converse of these is what we are currently experiencing. Other organizations have other issues high on their agendas. An example of another category of issue is rights. Today's environment of low interest rates, widening social safety nets, and rights pursuing is distracting from the search for positive feedback. Instead of positive feedback, we are letting rights pursuing and other from-the-heart causes determine how resources are allocated.
We should not expect fast growth until we as a community are willing to move back to having growth be the center of our community attention. When we are, then creating business environment jobs in a high interest rate environment -- positive feedback jobs -- will become the center of our attention.
Update: No sooner do I finish this than I read this 12 Jan 13 Economist article, The great innovation debate: Fears that innovation is slowing are exaggerated, but governments need to help it along, covering the same topic.
From the article, "Yet nobody recently has come up with an invention half as useful as that depicted on our cover. With its clean lines and intuitive user interface, the humble loo transformed the lives of billions of people. And it wasn’t just modern sanitation that sprang from late-19th and early-20th-century brains: they produced cars, planes, the telephone, radio and antibiotics."
This 5 Jan 13 Economist article, Cloney ponies: How technology could transform an ancient sport, is an example of a surprise use of a technology. It is also an example of a technology being introduced as a toy. This is an example of a way to introduce a new technology while dodging The Curse of Being Important. Toys -- very expensive ones in this case -- don't fire the community busybody instinct the way "serious" or "important" uses do.
So, well done aspiring cloning engineers!, this is just the kind of early use which will let cloning technology thrive in its "early spring" stage -- when there is much to learn, a lot of mistakes to be made, and it's important that busybodyness not get in the way of the experimenting.
Recently I experienced a wonderful example of tolerance in action.
I was at a grandchild's baptism. This was a group of about forty people assembled in a room for about a half hour. The group consisted of grandparents, parents, children, toddlers and babes in arms -- a full mix of age groups.
The kids were doing kids things thoroughly mixed in with adults doing the baptism ceremony. No one thought twice about this wide range of activities taking place. Example: One of the kids wanted to sit next to daddy while he was giving a speech. She moved her chair next to his at the front of the room, and fidgeted in it while he spoke. No one minded. When the child got out of the chair to move on to something else interesting, the mother quietly moved it back.
Again, this mix of activities did not spoil the baptism one wit. It was tolerated, everyone was relaxed, and everyone had a good time.
I bring this up as an example of the benefit of tolerance. It was impressive!
Here are some analogies to other worldly situations:
o Each person there experienced the baptism in their own way. There wasn't just one right way, there were many right ways
o The kids didn't experience the baptism the same way the adults did, but they knew enough to not be running, shouting and screaming. Many of the older kids busied themselves with watching over the younger kids, and the younger kids busied themselves with exploring and quiet take-up games. The young kids would punctuate their games with coming and sitting next to a parent or older child for a while, getting hugs and whispers, then back to exploring.
o When the big moment came, all the kids rushed to the front to be up front and close when the magic moment happened. They knew why they were there, and this part was of great interest to them.
o The girl moving her chair is an example of disruptive technology. She was innovating. She had come up with a good idea. When mom thought the chair move was just random, the child demonstrated that, no, she had thought this through and her idea would work better.
And, again, the encouraging part was that all this tolerance made this ritual more enjoyable for all involved, and built enfranchisement. The kids were not herded off to enjoy this in a separate place. The adults did not have to put up with military precision. Each person played their part in their way.
Once again, a wonderful example of tolerance in action, and how tolerance can both increase life's enjoyability and build community enfranchisement.
Bemoaning the US is a common enough activity for writers about current events. And, thank goodness, most of the time it has been proven wrong. But the "Midwest Disease" is pernicious. It's about falling into decline in a way so comfortable that the residents don't really sense that it's happening.
This 21 Nov 12 Economist article, The Lottery of Life, ranks various nations by which would be the best to be born in today.
From the article, "A quarter of a century ago, when The World in 1988 light-heartedly ranked 50 countries according to where would be the best place to be born in 1988, America indeed came top. But which country will be the best for a baby born in 2013?
To answer this, the Economist Intelligence Unit (EIU), a sister company of The Economist, has this time turned deadly serious. It earnestly attempts to measure which country will provide the best opportunities for a healthy, safe and prosperous life in the years ahead." (Here is the article about the methodology)
It's an admittedly subjective ranking, but the US now comes in at #16, tied with Germany. Top three are Switzerland, Australia and Norway.
What has happened? Why has the US slipped so dramatically?
What has happened is distraction. Americans have not stayed focused on the target of building a better life for themselves and their children. They have divorced themselves from close connnection with harsh reality, then let the emotions of fear, guilt and good intentions guide their choices.
Ungrounded emotions are how you build a better Neolithic Village, not how you build a better civilized society. To reverse this decline we need to be paying attention to harsh reality. We need to be paying attention to the material consequences of our choices, not just the emotional ones.
Early decline, where the US is now, is a comfortable state of being. The harsh reality alerts which will scratch at our delusions will come later... when it's probably too late to perform a reversal. Looking upon the history of "Golden Age" cultures (my article here), this is the most common course.
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