Jeff’s Newsletter, Volume 5
1. Too many workers, too few jobs
“The future of work” is part of what I research, so I try to read every prominent new book on the topic. Ryan Avent’s The Wealth of Humans is the latest entrant to the public conversation. If you’ve been following that discussion and reading things like The Second Machine Age or Rise of the Robots or Average is Over, you will find nothing new in this one regarding the technological aspects of automation. But this book has a broader focus (maybe too broad). The title refers to a worldwide labor glut of which Avent thinks automation is just one cause; the other main ones are globalization and rising productivity. In other words, there are too many workers so wages are low. In manufacturing, productivity increases make it worthwhile for American companies to re-shore their plants. This is especially troubling for India, which hardly ever industrialized in the first place and now skips ahead to a becoming a service economy, which offers way fewer jobs. Avent thinks that the 20 years starting around 1990 in which developing countries grew at much faster rates than the developed world was mostly thanks to participating in manufacturing supply chains, and is now over. In the U.S., we know that education and healthcare can easily become the sponges for excess labor, but only if we are happy with no productivity gains and rising costs. Maybe we can’t have it both ways. If creating labor scarcity is the goal, Avent discusses the unattractive options: exclusion of outsiders from expensive gated cities, immigration restrictions, occupational licensing. More education is the solution for many problems but probably not this one: it just makes labor more abundant!
If you read The Economist, where Avent works, most of the analysis and the flavor of the recommendations will be familiar: unions are a bad way to increase labor scarcity, clearing away urban zoning restrictions is the way to give everyone access to high-wage jobs, open borders are the best way to help residents of poor countries (and even to improve those countries long-term through social capital transfer). On most days I agree with at least two of those views, but I quickly grew tired of the breezy, assured, cheerfully technocratic writing style Avent brings from The Economist. Issues this complex should require a self-doubting, skeptical voice.
Avent’s most original contribution is his decision to use “social capital” as a framing device for how productivity works at both firm and national levels. In this usage, “social capital” is meant to be the thing in between capital capital (the stuff firms own) and human capital (the stuff individuals own, like your education and skills). Modern firms are productive, Avent says, because people learn how to work together and with technology in context-specific ways. You know exactly how things get done in your office, and if an equally smart person showed up tomorrow it would take him or her months to become as effective as you. The kicker: “(W)hile social capital lives in the heads of the people who make the economy go, its benefits flow disproportionately to the owners of financial capital.” I think this is a legitimately interesting way to think about who adds value in firms, or, more to the point, whether it even makes sense to think about individuals adding discrete value in collective processes. I will be stealing it for my research. Avent goes on to frame the challenge of international development in social capital terms, and I found this shakier. He sees social capital (what does it even mean across a nation? knowing how to work together? how to keep contracts?) as a prerequisite, not a product, of institutions. When I write about Francis Fukuyama’s Political Order books, I’ll come back to this point and assess whether we can understand Fukuyama’s evidence on creating democratic institutions and rule of law in social capital terms.
2. How to think
I’m making my way through Venkatesh Rao’s archived essays on ribbonfarm, one thematic group at a time. I recently made it through fifteen essays on “refactored perception,” which is basically Rao’s term for learning how to think. Rao is an extremely unusual writer. Almost every sentence is an aphorism: dense, elliptical, tantalizing. The essays “Diamonds versus Gold” and “Just Add Water” explore this aspect of his approach. Where some writers discover gold–immediately valuable in whatever form simply due to its rarity–Rao’s task is to take utterly common carbon and transform it, through sheer unyielding application of pressure, into diamonds. He pulls it off. It’s very difficult to summarize these essays because he has already shrunk the ideas down to the densest form; to “rehydrate” them, as it were, would extend into the thousands of words. I will share some of my favorite gems without any of the context necessary to appreciate them.
- There is something called a “scientific sensibility” and it is much more important than the “scientific method.” The method is “a sensibility crammed into the mold of a system.” The only reason for this is to give people who lack the sensibility a structure to perform science at industrial scale.
- To number something is to make water-tight categories; to name something is to find leaks. “To create difference — irreplaceability and non-interchangeability — as fast as numbering creates homogeneity.”
- Many systems require both “lawyer-minds,” which oppose another dialectically, and “judge-minds,” which make sure the dialectic is working fairly. “By its very nature, you cannot structurally advantage judge-minds at the ultimate boundary of a social system. If you do, you are essentially legitimizing a sort of divine authority.”
- What you can find “interesting” is a function of what patterns you already know. “Interesting is a lot of existing ideas in your head clamoring to meet a new idea.”
- The Internet (or, better, the sum of recorded culture, which the Internet approximates) is one big book. Hyperlinks are how you turn the pages. “In other words, when you browse and skim, you aren’t distracted and unfocused. You are just reading a very dissonant book you just made up.”
3. (Working) family values
For someone who is probably going to be the president, there has been remarkably little discussion of Hillary Clinton’s policy ideas. Yes, I’m slowly realizing that politics is mostly about expressing an identity. But some of us like to pretend that we live in a policy world, and in that world Ezra Klein and Jonathan Cohn are rock stars. This week on The Ezra Klein Show they asked: what is Clinton’s core policy agenda? It’s sort of hard to figure out because she has very well-informed views on everything and is not great at framing speeches around simple, resonant messages. But Klein and Cohn agreed that her deepest commitment is probably to an agenda we might call “working family values” (that’s mine, do you like it?). This is shorthand for a set of policies meant to make life easier for households where both (or single) parents work: expanded family and medical leave, child care credits, early childhood education, etc. It’s interesting that this suite of ideas has been so low-salience this year; arguments might be that only women take these issues seriously, or that Clinton hasn’t framed them well enough (though she does talk about them a lot). One interesting thing Klein pointed out is that a discussion of “low labor force participation” has been pretty salient in the past few years (admittedly mostly among wonks), and while we usually picture laid-off factory workers who stop looking for jobs, stay-at-home mothers might be a larger group capable of boosting those labor force numbers if they had the proper supports. Not that we necessarily want more labor force participation, if you ask Ryan Avent…
4. No college left behind (but really this time)
Assuming that Clinton is president, one of her other top priorities appears likely to be her “New College Compact,” a federal reform program for public colleges. The Bernie-approved “free college” part of this plan has gotten most of the attention, but Rick Hess, a conservative education policy scholar, writes in National Affairs to warn us that other parts of the plan may do for college what No Child Left Behind did for K-12. That’s probably not a good thing. The basic concern is that Washington will impose standardized rules on public colleges, homogenizing a system whose strength, at least compared to K-12, is variety. Hess identifies three problematic assumptions of No Child Left Behind that are likely to reappear in the college plan: that educational quality could be measured, that those measures could and should guide rewards and sanctions, and that Washington could suggest useful institutional recipes to fix failing schools. Largely as a result of having worked in the education world, I am a huge skeptic about tying incentives to new measurements of complicated processes. The Obama administration had proposed to disburse aid to colleges that scored high on a new measure of poor students’ experiences, but Hess credits the administration for where they ultimately landed: publishing an informational guide to affordable colleges with good outcomes, but not tying consequences to it.
On paying for college, Hess’s recommendations seemed eminently reasonable. He does not want the government to prescribe particular reforms to states or colleges. Instead, he wants to publish more transparent information on college quality, streamline the student loan process by replacing a hodgepodge of federal loans and tax credits with a single $50,000 line of credit to be repaid as a percentage of eventual income when filing federal taxes, make colleges share in the risk by holding them responsible for a portion of unpaid loans, and let students vote with their feet. I think this a great example of combining the libertarian principle that consumers know best with a recognition that consumers also need better information, all backed by a commitment to spend a lot of money, as long as it goes directly to the right people. I am afraid that progressives are going to get caught up in the excitement of the “free college” tagline and shrug at the idea of a national college measurement system and a national reform playbook. We will then repeat the exact same mistakes for which many of us, especially progressives, rue No Child Left Behind.
5. The widening gyre
Steve Randy Waldman, who blogs as Interfluidity, comments on the election. I do not agree with all of it but it is one of the most thoughtful things I’ve read, especially trying to look beyond this election toward the longer-term problem of national unity. In his view, nation-states are always either integrating or fragmenting. For much of the 20th century America was integrating; now it’s fragmenting.
Physical segregation, widely divergent education, commercial segmentation or exclusion, self-organizing point-to-point communication networks, the absence or decay of civic religion, political polarization, absence of a broad popular culture, economic dispersion that stratifies lifestyles, perceived unfairness in patterns of prosperity, and immigration from external communities can be sources of fragmentation. Some of these “sources of fragmentation” are very good things!
But a successful nation-state must budget the centrifugal forces it can tolerate against the centripetal forces it can generate.
Part of his argument is that we should be careful about framing Trump support as fundamentally about racism, or white nationalism, or whatever you want to call it, even if that is correct for a lot of people. It leaves those who are already committed to Trump (what would it take for us committed Democrats to vote for a Republican?) “little choice but to own what they’ve been accused of.”
The assertion that Trump’s supporters are all racists has, I think, become partially self-fulfilling. In and of itself, that will make America’s already deeply ugly racial politics uglier. It will help justify the further pathologization of the emerging white underclass while doing nothing at all to help communities of color except, conveniently for some, to set the groups at one another’s throats so they cannot make common cause.
It’s too late to undo the damage this election has done to national unity (by the way, check out ex-banker photojournalist Chris Arnade talking about “two Americas” on this week’s EconTalk). But in evaluating policies in the future, I am going to try putting this notion of creating centripetal or unifying forces front and center. In our personal lives, most of us reading this are very happy with how America is working. That means we have an enormous blind spot for how half our fellow citizens think. If you care about America continuing to exist as we know it in the long run, that should freak you out.