Here are links to a few interesting articles I came across recently. They are about the close linkage of prolonged economic downturns, widespread disillusionment with the ‘system’ and rise of populist politicians. As usual, note that you should not believe any author just because you agree with one or two of their opinions.
Link 1: An entire class of Americans misunderstood and rejected: Dismissing white workers is profoundly reactionary
The white working class is under the microscope. Facing bleak economic prospects and opioid overdose, wage-labor rage is alternatively credited and blamed for propelling the Sanders and Trump insurgencies. But a growing number of dissident analyses contend that this new conventional wisdom rests on lazy assumptions: Trump supporters are well to do, Sanders’ advantage is based on age rather than income, and whites aren’t really that poor anyhow compared to black and Latino people. The debate is an empirical one but emerges from general elite agita over just what to think of these people who many comprehend with the nuance that generally pertains to cartoon characters. From the liberal establishment, it’s about painting Sanders as a phenomenon rooted in white college students. On the right, it’s a plain meltdown over Trump’s usurpation. But whether it be derision or dismissal coming from liberals or conservatives the upshot is diminishing the import and possibility of class politics in the United States.
One finding that’s hard to ignore: Trump support is highly correlated to areas where the death rates of middle-aged white people, fueled by opioid overdoses, are spiking. No doubt xenophobia and white nationalism is driving Trump’s rise. But its the admixture of economic populism, however phony, that makes him so potent. Not only are people in the bottom and middle getting squeezed, many in the middle are falling into the bottom or fear that they will. Wages have been stagnant. Median household income and wealth plummeted during the Great Recession. At the same time, healthcare, childcare, higher education, housing and retirement costs have risen. Since 1979, the share of working-age American households making within 50-percent of the median has steadily declined. Importantly, class self-perception has shifted too, with many fewer Americans identifying as middle class and many more identifying as lower class. In particular, the number of young people identifying as lower or lower-middle class has skyrocketed. It should be expected that voter incomes exceed those of larger populations including non-voters. Missing that distorts analyses of any given candidates’ class appeal.
Link 2: The Elites and the Rise of Donald Trump
The “privilege” that these working class whites are looking to defend is middle class factory jobs paying between $15 and $30 an hour. These jobs generally came with decent health care benefits and often a traditional defined benefit pension, although that has become increasingly rare over the last two decades. This is certainly a privileged position compared to billions of people in the developing world who would be happy to make $15 a day. It is also privileged compared to women, whose pay still averages less than 80 percent of their male counterparts. And, it is privileged compared to the situation of African Americans, Hispanics, and other racial and ethnic minorities who have frequently been trapped in the least desirable and lowest paying jobs. But these factory jobs and other blue collar occupations are hardly privileged when compared to the high flyers in the financial industry, the CEOs and other top level managers, or even professionals like doctors and dentists. These groups have all seen substantial increases in their pay and living standards over the last four decades.
To start with the simplest case, the pundits, who are all free traders, get really blank faced when the topic of protectionism for doctors, dentists, lawyers and other highly paid professionals comes up. Just as there are hundreds of millions of people in the developing world who are prepared to do factory labor for a fraction of the pay of our manufacturing workers, there are tens of millions of really smart ambitious people in the developing world (and Europe) who would happily train to U.S. standards and work as professionals here for a fraction of the pay of our doctors and lawyers. The difference is that we have designed our trade deals to subject our manufacturing workers to competition, while we have maintained or increased the protection for our doctors and lawyers. Then we have our financial sector where the bankers benefit from “too big to fail” insurance from the government. We also exempt trades of stocks, bonds, and derivatives from the same sort of sales tax that applies to clothes, cars, and most other products.
Link 3: Ascended Economy?
The part about replacing workers with robots isn’t too weird; lots of industries have already done that. There’s a whole big debate over to what degree that will intensify, and whether unemployed humans will find jobs somewhere else, or whether there will only be jobs for creative people with a certain education level or IQ. This part is well-discussed and I don’t have much to add. But lately there’s also been discussion of automating corporations themselves. I don’t know much about Ethereum (and I probably shouldn’t guess since I think the inventor reads this blog and could call me on it) but as I understand it they aim to replace corporate governance with algorithms. For example, the DAO is a leaderless investment fund that allocates money according to member votes. Right now this isn’t super interesting; algorithms can’t make too many difficult business decisions so it’s limited to corporations that just do a couple of primitive actions (and why would anyone want a democratic venture fund?). But once we get closer to true AI, they might be able to make the sort of business decisions that a CEO does today. The end goal is intelligent corporations controlled by nobody but themselves.
The more ascended corporations there are trying to maximize shareholder value, the more chance there is some will cause negative externalities. But there’s a limited amount we would be able to do about them. This is true today too, but at least today we maintain the illusion that if we just elected Bernie Sanders we could reverse the ravages of capitalism and get an economy that cares about the environment and the family and the common man. An Ascended Economy would destroy that illusion. How bad would it get? Once ascended corporations reach human or superhuman level intelligences, we run into the same AI goal-alignment problems as anywhere else. Would an ascended corporation pave over the Amazon to make a buck? Of course it would; even human corporations today do that, and an ascended corporation that didn’t have all human ethics programmed in might not even get that it was wrong. What if we programmed the corporation to follow local regulations, and Brazil banned paving over the Amazon? This is an example of trying to control AIs through goals plus injunctions – a tactic Bostrom finds very dubious. It’s essentially challenging a superintelligence to a battle of wits – “here’s something you want, and here are some rules telling you that you can’t get it, can you find a loophole in the rules?” If the superintelligence is super enough, the answer will always be yes.
What do you think? Comments?