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20140531 The Great Stagnation

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Main Idea:

American society developed using low hanging fruits of industrial development and human capital which is not there any more, so it went into pretty deep crisis now being not able to meet usual requirements of population. The crisis was also aggravated by mistaken believe that society had more resources that it actually had, leading to overstress of financial system with consequent deep plunge into Great Recession. The salvation could potentially come from outside due to development of consumerist society in populous countries like Chine and India, creating higher demand for goods and services and support for continuing economic expansion. Another potential help could come from more effective marketization of technological achievements and increase of prestige of science leading to development of more human capital. The downside of new technologies may be its destructive capability in hands of future dictators.


Chapter 1 – The Low-Hanging Fruit We Ate
American society is in the crisis economically, financially, and psychologically. The reason for this crisis is that system as it is, was not designed to handle complex processes because it was formed and functioned during especially good condition of Low-Hanging Fruit available to it. The Low-Hanging Fruit consist of:
1. Free Land
2. Technological Breakthroughs
3. Smart, Uneducated Kids

Chapter 2 – Our New (Not So) Productive Economy
New and not very productive American economy is built on 3 major areas outside of normal market economy: Government, Healthcare, and Education. This chapter reviews all 3 areas demonstrating quite convincingly that dramatic growth in expenditures in all 3 areas produced very little, if any, improvement.

Chapter 3 – Does the Internet Change Everything?
The point of this chapter is that new technological breakthroughs like Internet did not have dramatic positive economic impact even if it created lots of valuable services that were unimaginable before.

Chapter 4 – The Government of Low-Hanging Fruit
The government provided goods and services that have the same dynamics of Low-Hanging Fruit as overall economy. These Low-Hanging Fruits where government intervention was both effective and efficient: Transportation, Industrial Production, Electronic Communications, and Scientific management had changed so much lately that they do not lend themselves to such use by government that it would be beneficial for population. The technological changes made government intervention harmful even when it is done in these areas.

Chapter 5 – Why Did We Have Such a Big Financial Crisis?
This chapter provides a charming answer to a very hot question and it is: WE THOUGHT WE WERE RICHER THEN WE ARE. This simple explanation goes like this: everybody expected 3% growth and made plans and build assets based on this assumptions, but when real growth was much smaller there were no money to pay for this, so economy crushed. The impact of these incorrect assumptions in financial area was growth of leverage ratio from 1:12 to 1:30 and higher. Obviously the mortgage industry collapse is another example.

Chapter 6 – Can We Fix Things?
This chapter is a review of favorable trends that could help overcome this crisis and unfavorable trends that should be handled. The favorable:
1. Interest to science and engineering in China and India combined with hope that they will become as consumerist society as US is.
2. Internet will generate more revenues eventually
3. Pressure from American electorate to move education to school choice and would cause dramatic improvement in human capital
4. Obvious for author idea: Raise social status of scientists. The example of Norman Borlaug provided as father of green revolution that nobody knows.

The potentially unfavorable listed is future technological development that could cause trouble in hands like Hitler’s in XX century.

My Take on It:

I do not agree with the whole concept of low-hanging fruits due to the simple fact that this fruit was hanging as low as it was in XIX and XX century for all previous history of humanity without any significant progress for a very long time. Much more important is organization of society and psychology of its members. These were the factors that moved Europe and America into industrial revolution creating consumerist society in the place of sustenance and robbery societies. The one most significant fact that led to it was temporary weakness of government that is forces of robbery due to process of switching from aristocratic robbery blessed by god(s) to bureaucratic robbery blessed by “forces of history” and “common good”. I believe that neither growth of consumerism around the globe nor raise in prestige of science would help to overcome this crisis. The only realistic way to do it is to find a way to dramatically decrease the scale of bureaucratic robbery and promote expansion of free markets based on Equal and Marketable rights to natural resources that would provide everybody with something to sell and therefore eliminate support for bureaucratic welfare state.

20140524 American history is not what they say.doc

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Main Idea:

The history as we know it, is not a real, more or less complete collection of facts with simple one-dimensional interpretation that bound to be close to reality, but rather complex ideological construct build on careful selection and/or omission of facts by ideologically conscious individuals in order to support and promote their ideology. The analysis of historical semi-fictional literature of American authors of XX century: Ken Roberts, John Dos Passos, and Gore Vidal confirm this idea. The similar confirmation could be found in works of professional historians: Charles Beard, Harry Barnes, and James Martin.
The overall direction of American history representation went over the last century pretty much from “America the noble and beautiful” selection of facts and interpretations to “America the ugly and imperialistic” selection and interpretation. This is plentifully demonstrated by review of literature about American wars.
This reinterpretation of history was aggressively applied in both entertainment and education and pretty much become a new paradigm of American history in education of young generation. However counter force of new understanding of history with notion of “America the beautiful despite all its warts especially if compared with everything else known to humanity” is growing leading to historical textbooks wars between interpretations by Howard Zinn, Eric Foner, Thomas Woods, and Michael Allen.
The main inference – objectivity is not really possible, so the quality of historical writing should be evaluated based on completeness of facts included and even-handedness of interpretations.


ONE: The Art of History
I. Objectivity in History
This chapter is pretty much about impossibility to achieve ideal of “objective history”. Since the main sources of history are written documents created by contemporaries they all and especially newspapers are not really reports of facts as they occur, but rather selectors and compilers of facts used to create a narrative to support preexisting ideological views of authors and their readers.

II. History and Fiction
This chapter is a review of historical narrative as growing out of fiction. It used to be that everybody including authors considered history as literature. An example is provided of Bancroft’s 10 volumes “History of United States”. The expression of this point of view is Roy Child’s definition: “ History is a selective recreation of past events according to historian’s premises regarding what is important…”

III. The Historical Fiction of Kenneth Roberts (1885-1957)
This chapter is a review of historical fiction by Roberts. His writings were about American Revolution, but from a very specific side – detailed and sympathetic narration of Benedict Arnold story. While not very popular as books, these writings made their way into public conscious via movies and seems played a role in swinging American attitudes towards Britain before WWII into Anglophile direction. This story used as illustration of intellectuals or “secondhand dealers in ideas” (Hayek’s definition) managing to change attitude of previously isolationist majority.

IV. The Historical Fiction of John Dos Passos (1896-1970)
This chapter is about another author of historic novels while not very popular, but influential among intellectuals. The road traveled: pacifism as reaction to WWI, isolationism before WWII, patriotism in WWII, and disappointment after WWII with fear of nuclear war eliminating civilization.

TWO: The Historical Fiction of Gore Vidal: The “American Chronicle” Novels
The part two dedicated to Gore Vidal and his representation of American history, which was nontrivial, but well documented.

I. Burr and Lincoln
Books discussed “Washington DC” (1967), “Burr” (1973),”Lincoln” (1984), Empire (1987), Hollywood (1990), and “Golden Age” (2000). Taken together it is kind of alternative history with Washington supporting strong government in order to defend Mount Vernon and Jefferson supporting state rights in order to get votes. In this alternative history founding fathers are petty, cowardly, violate laws as needed and so on. The same treatment applies to Lincoln.

II. 1876. Empire and Hollywood
This is description in Gore’s novel of period of Grant administration and elections of 1876 pretty much in the same spirit of disparaging traditional narrative. Then it going on through the end of XIX century and American attempts to build empire in Pacific

III Hollywood and The Golden Age
The same representation of American history continues throughout remaining books chronologically all the way until end of WWII at the end of which American imperialism started cold war against Soviet Union.

THREE: The Story of American Revisionism
The story of revisionism of American history includes not that much discovery of new historical facts as reinterpretation of well-known facts from the new and changing ideological positions. Part three of this book goes through a century of consequent reinterpretations of American history.

I. The Birth of American Revisionism and the Rise of Harry Elmer Barnes
This chapter describes the first reinterpretation of history as process driven by economy and technology. The main works are Beard’s “An Economic Interpretation of Constitution” and Barnes’ “History of Western Civilization”. Special attention assigned to revision of WWI history that was a key event for people of this generation.

II. Charles A. Beard and William Appleman Williams: From Progressivism to the New Left
This is about history of progressive anti-war revisionism with initially successful attempt to support isolationist movement in US that eventually failed after Pearl Harbor. The key works were Barnes’ “Perpetual war for Perpetual Peace” directed against Roosevelt’s international policies and Williams’ “The Tragedy of American Diplomacy”. It was a critic of American policy of “open doors” when USA actively tried to open doors of other countries for American goods and ideas. Despite this critic serious historians did not move too much to the left and maintained their distance from anti Vietnam movement.

III. Harry, Elmer Barnes and James J. Martin: From Progressivism to Libertarianism
This chapter adds another historian to the list: James Martin who considered himself not revisionist, but rather “additionist”, adding new knowledge to existing narrative. Martin’s work popularizes libertarianism and another promoter of such ideas – Tucker.

IV. James J. Martin: Historian and Pamphleteer
This is continuation of the story of libertarian historian James Martin in relation to Rampart College and Freedom school. The core formula of this kind of libertarian attitude goes back to Washington’s foreign policy: “Stay home and don’t interfere in other people’s business”.

V. The Libertarian Historians and Their Colleagues on the New Left
This chapter is about interaction between new left and libertarian historians. Lots of references with the most interesting being work of Gabriel Kolko demonstrating that anti-monopoly government intervention into economy was initiated by monopolies in order to restrict competition.

FOUR: Some American Wars–Both Hot And Cold–Through Revisionist Eyes
I. The U.S. Civil War-the Revisionist View
The revisionist view is that Civil War was not about slavery, but about whether US is one perpetual state or relatively loose confederation of states. It was initiated and conducted by Lincoln in response to constitutionally legal intention of South to ceded. It was conducted with complete disregard to constitution and Bill of rights. The chapter includes a short review of work by DiLorenzo.

II. America in the World Wars–A Revisionist Perspective
This is based mainly on works of Barnes and comes down pretty much to putting guilt for war on American anglophiles: first Wilson in WWI and then Roosevelt in WWII. They both worked to provoke Germany and later Japan, creating eventually conditions when wars become inevitable. Obviously they did it in violation of constitution.

III. A Revisionist Look at America in the Cold Wax
This is another example of attitude of “blame America first”. According to revisionists the cause of Cold war was insistence of American leadership on leading role of USA in the world.

FIVE: The Polities of the American Revisionists
I. “Left” and “Right,” “Conservative” and “Liberal,” Differentiated Historically
This is description of 3 main ideological movements behind historical revisionism. An interesting discussion about Left and Right with Libertarians assigned to the Left.

II. The Decline of American liberalism–the Early Years
“Decline” is a book by Arthur Ekirch arguing that from relatively liberal beginnings America moved consistently in direction of more centralization and concentration of control at the expense of freedom. This chapter also includes the story of Whiskey rebellion and its interpretation by Murray Rothbard.

III. Conservative Republicans and Liberal Democrats in 19th Century America
This chapter is review of revisionist’s interpretation of XIX century political developments with 40 years of Jeffersonian party following 12 years of Federalists and then followed by Wigs until Civil War.

IV. Teddy Roosevelt, Woodrow Wilson, and the Triumph of Conservatism
This chapter is continuation of historical review through progressives of early XX century from Teddy Roosevelt to Wilson. An interesting look provided at Wilson as individual who tried implement liberal ideas by conservative methods.

V. Herbert Hoover’s New Deal
Revision of Hoover administration to state that it was actually Hoover who started New Deal era of rapidly increasing government.

VI. The Myth of the “Old Right”
This revision is about actual New Deal implemented by FDR. FDR presidential run in 1932 included promises to decrease government expenditures, balance budget and provide sound currency. The actual actions were exactly opposite. The loose group of intellectuals resisting Roosevelt’s New Deal was designated “Old Right” when in reality they were mainly a bunch of classical liberals defending market and small government rather then “Law and Order” conservatives. Another revision is about role of New Deal as promotion of big business at the expanse of free market.

VII. The Goldwater Anomaly
This chapter is about new look at historical development from point of view of struggle between classical liberalism of free market vs. conservatism of big government. Before New Deal these were two forces competing for political power. From Roosevelt until Goldwater it was basically 2 anti free market party since both Republicans and Democrats supported corporate state with big business and big government working in tandem.

VIII. The Reagan Fraud–and After
The Goldwater’s run is considered anomaly because Republican Party of Reagan only used rhetoric of free market remaining the supporting force of corporatism in its actual actions.

SIX: The New American History Wars
The final part of this book is about importance of history teaching that forms views of young people and through their action impacts reality in the way consisted with these views. It goes through a number of authors and textbooks that had a serious impact in last half century.

I. Why Textbooks Matter
This chapter is review of history of textbooks use in American schools as main source of historical information. It traces use in textbooks stories of early XX century stress on common ancestry and culture with British. This may explain at least to some extent American support for entry in WWI on the side of British. Starting in 1960s the left applied a very serious effort to promote their views in historical textbooks. They were mainly successful in these efforts.

II. The Breakdown of the Consensus-the Case of Howard Zinn
This chapter contains story of Howard Zinn writings based pretty much on his communist ideology that become widely accepted in American colleges.

III. American History According to Eric Foner
Eric Foner is another history author who while being “red diaper baby” wrote with somewhat more traditional understanding of history then revisionists. In his books Lincoln is quite a positive hero and WWI and WWII were not entirely adventures of American Imperialism.

IV. Thomas E. Woods. Jr. vs. Larry Schweikart and Michael Allen
These authors are a bit more right wing and it is interesting that their books are widely read by students outside of official curriculum.

V. History, Fiction, and Objectivity—Some Concluding Observations
The final word is praise to Gore Vidal and his novels that should be considered a legitimate historical writings and overall conclusion that objectivity in history is not possible if construed as an absence of any ideological influence, but it is possible if construed as even-handedness and fairness.

My Take on It:

I am petty much agree that complete objective historical narrative is not possible. However I think that Cliometric that is narrative based on documented historical facts especially numerical facts such as demographic and economic statistics is the best way to achieve something close to objective analysis. Such objective numbers based analysis is badly needed after nearly a century of left-wing big socialist government supporters’ controlled historical narrative in American educational systems causing formation of new generation brainwashed into believing in all this junk.
Interestingly enough that people of my generation brought up in conditions of totalitarian Soviet Union, when interpretation of history had to be supportive of ideals and objectives of Communist Party with facts changing or being created as needed, were inoculated from this socialist intellectual disease by reality of everyday life under socialism with its deficits of everything, special supply system for communist elite, and attempts of communist to control any intellectual activity. Here is my great hope that the seemingly overwhelming dominance of left wing statists in education is not really final. As it always happens, the reality tends to penetrate whatever ideological walls are built by propaganda in the minds of people, opening these minds to other explanations of the events when reality of decrease in economic quality of life hit home.
I think that the ideological conquest of American minds that led to triumph of left in form of Obama administration is about to fall apart due to consequences of actions of this administration in both economic and political areas. With no real ability to suppress dissent on par with abilities of KGB or Gestapo, the American left will not be able to continue their inhumane experiment for 70 years, as was the case of USSR.

20140517 Difference

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Main Idea:

The main idea of this book is not only that diversity or difference in skill sets, knowledge, attitudes, and other human qualities is important and beneficial in achieving objectives, but that it is more important then individual ability. In addition to this interesting idea author also brings in commonly used political meaning of diversity as diversity of skin color, religious believes, and ethnic background, arguing that all these differences provide for different approaches and therefore improve performance.


Prologue: How Diversity Trumps Ability
This statement based on computer based experiments when two groups of people were selected to solve some problems. One group was selected randomly and therefore diverse while another included best individuals performers. The counterintuitive result was that diverse groups were consistently superior in problem solving than groups of superior individuals. Additional reference demonstrating the same idea is provided from “Wisdom of crowds” and other literature.
Introduction: Unpacking Our Differences
The two examples of successful use of diversity are provided: Eli Lilly web site seeking solutions for posted problems; and WWII decoding success of Bletchley Park by collection of diverse individuals. From these examples comes the Diversity Conjuncture: DIVERSITY LEADS TO BETTER OUTCOMES.
The logic of book implemented in 5 parts:
1. Review of five different types of diversity
2. The Benefits of Diverse tools
3. Diverse values
4. Formulation of diversity benefits claims:
a. Diverse perspectives and tools enable collections of people to find more and better solutions
b. Diverse predictive models enable crowds to make better predictions
c. Diverse fundamental preferences frustrate the process of making choices
5. Application in real world.
This introduction also puts a very unusual twist on hot issue of affirmative actions: they make sense as long as different identities correlate with cognitive diversity. This correlation is taken as given, but it is not necessarily so.

1. Diverse Perspectives How We See Things
The perspective framework is provided: A perspective is a map from reality to an internal language such that each distinct object, situation, problem, or event gets mapped to a unique word.
Examples: perspective of mathematician vs. chemist; various perspectives on quality of ice cream. Very interesting presentation of the same simple game Tic Tac Toe from different perspectives making it unrecognizable.

2. Heuristics: Do the Opposite
Definition: A heuristic is a rule applied to an existing solution represented in a perspective that generates a new solution or a set of possible solutions.
Example “Do the Opposite of what you initially wanted” provided from Seinfeld episode as “successful” heuristic for George Costanza.
Heuristics reviewed:
• Traveling salesman heuristic
• Topological heuristics
• Gradient heuristics
• Error allowing heuristics
• Population heuristics

3. Interpretations: Our Own Private Flatland
An Interpretation is a map from objects, situations, problems, and events to words.
Projection interpretation ignores some dimensions of a perspective.
A clumping interpretation creates categories of similar objects that are not simply projections of attributes.

4. Predictive Models: Judging Books by Their Covers
A predictive model is an interpretation together with prediction for each set or category created by the interpretation. Simple example of predictive matrix is provided.

5. Measuring Sticks and Toolboxes: Calibers for the Brain
This chapter adds measurement to previous discussion of tools: Perspectives, Heuristics, Interpretations, and Predictive models. The measurements discussed based of multiple IQ measurements and their use.

6. Diversity and Problem Solving: Darwin’s Brass Tacks
The rule of diversity trumping individual superiority for problem solving restated and explained as following: the best individual perfumers tend to be similar and therefore are looking for solution in the same place achieving local optimization. Diverse problem solvers are looking for solution all over the place including areas of absolute optimum, which often is outside scope of best performers. The rule is not absolute. It requires fulfillment of four conditions:
a. The problem is difficult. No individual problem solver always locates the global optimum
b. All problem solvers are smart enough to recognize solution
c. Any solution other then the global optimum is not a local optimum for some nonzero number of problem solvers
d. The initial population of problem solvers must be large
A very interesting idea comes from Darwin: selection reduces diversity. In other words by selecting the best and brightest to solve problems we actually cutting off all possible solution that could come from not the best and brightest.

7. Models of Information Aggregation: Mindless Signals
This chapter about wisdom of crowds and conditions when it happens: different individuals have knowledge of different parts of solution while various errors distributed randomly and therefore cancel each other.

8. Diversity and Prediction: The Crowd of Models
For predictions the diversity matters as much as ability. Not less and not more. From here comes the Diversity Prediction Theorem:
Collective Error=Average Individual Error – Prediction Diversity
The potential downside: madness of the crowds. People in the crowd conform to prevailing views and suppress non-conformist opinions. The result is dramatic decrease in diversity or even its change to negative value in formula.

9. Diverse Preferences: Why Tapas
Notions defined of Fundamental Preferences (about outcomes) and Instrumental Preferences (how to get there). Preferences are different from choices. They are ordering of alternatives rather then selection of alternatives. Example fundamental preference: reduce crime first and care about better housing second. Example of instrumental preferences: try to reduce crime by increased policing first and by education second.

10. Preference Aggregations: Four (Not So) Depressing Results
Here is an important mathematical results going back to Kenneth Arrow:
• Collective preferences may fail to exists
• Unconstrained voting process may result in arbitrary choices
• People may have incentives to manipulate the choice process
• Common resources (public goods) may be underprovided

I personally love Arrow’s theorem so much that I have to include it: “No complete, transitive collective preference ordering based on individual preference ordering exists that satisfies unanimity, independence of irrelevant alternatives, and nondictatorship if all possible preferences are allowed.
Also provided other mathematical analytics confirming the main result: no collective objective could be defined without manipulation and/or dictatorship or at least suppression of minority objectives.

11. Interacting Toolboxes and Preferences: Go Ask Alice
There is complex interaction: Diverse fundamental preferences produce diverse values and different sets of possible solutions. The effects of interaction: diversity begets diversity; diverse predictive models create diverse instrumental preferences.

12. The Causes of Cognitive Diversity: Family Vacations, College, or identity?
Summary so far:
• Cognitive diversity produces benefits
• Fundamental preference diversity creates problems;
• Collections of people with diverse cognitive toolboxes and diverse preferences have higher-variance performance.
Causes of diversity: DNA, Training and Experience, Identity, finally and very important – Serendipity.

13. The Empirical Evidence: The Pudding
This chapter is about proper collection and analysis of data. Example provided of hypothetical experiment to define if bike is faster transportation then walking. The result really depends on user having skill to use bicycle.

Here are the areas were diversity hypothesis is supported by facts: Predictions and Problem Solving. The confirmed Formula: Net Benefits = Gross Benefits of Diversity – Cost of Diversity.
The overall empiric results:
Cognitive diversity always improve collective performance
Identity diversity performance impact is not clear. Sometimes cost of identity diversity is too high when groups fight each other.

14. A Fertile Logic: Putting Ideas to Work
This chapter contains more or less detailed recommendations for effective use of diversity:
• Move beyond stock portfolio analogy in building diverse groups by taking into account superadditivity of diverse tools
• Contain multitudes (Whitman) by not being afraid of contradictions
• Bring in and listen to dissenters
• In politics encourage diverse citizens
• Encourage interdisciplinary efforts
• When building groups distinguish the Fundamental from the Instrumental
There is also a sub-chapter about use of diversity in hiring and admissions.

Epilogue: The Ketchup Questions
This epilog is pretty much call to invest necessary effort not only into tolerance of diversity, but go farther and embrace diversity because it would help to solve problems and improve lives.

My Take on It:

The term “diversity” is pretty much spoiled for me by its use to justify racial preferences, or support for illegal immigration, or refusal to reject intolerance, or even expression of sympathy to historical grievance or religion motivated terrorism.

However I agree with thesis of this book and I think that application of recommendations provided in it would be very beneficial for everybody’s wellbeing and prosperity. The only thing that I believe did not get proper treatment is tolerance. I think that if society to survive diversity, it should be extremely tolerant to everything except of intolerance of actions. Somehow people get excited when somebody said some stupid thing about race, but find it wonderful to have official race discrimination in college admissions. I would much prefer opposite attitude: everybody ignoring with contempt stupid talks by individuals and get excited and seriously fight all forms of race, religious, and any other form of discrimination.

As to the problem of people not getting proper treatment in childhood and schools, I am all in support for additional training to close gaps that prevent such people from competing on equal basis. I am completely against of having different criteria for anybody. Somehow in sport nobody suggests that athletically not very proficient people participate in Olympics running shorter distances or getting some seconds shaved off their time. The real consequence of this is not advance of disadvantaged, but cultivation of resentment resulting in inevitable increase in cost of diversity to the point of negative consequences.

20140510 The Average is Over

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Main Idea:

This is nicely analyzed and documented description of change in market labor requirements due to automation. This process allows automate medium complexity tasks and correspondingly eliminate middle earners with average skills who do these tasks. What left is top and bottom: the top skill and top earnings individuals whose labor cannot be automated: entrepreneurs, senior level professionals, managers, and scientist on one hand and low level low skills and low earnings jobs that are not easily automated: personal services, retail sales, and similar jobs. It would lead to significant changes in American politics, wealth distribution, and class relationships. The expected outcome is increased taxes, decrease in rents, decrease in consumption, and decrease in upward mobility due to difficulty of getting to the top.


PART I Welcome to the Hyper-Meritocracy

1. Work and Wages in iWorld
This chapter is pretty much description of the new brave iWorld where computers and related technology takes more and more tasks that used to be done by humans, leaving the young generation, even with the college level education, unemployed.

2. The Big Earners and the Big Losers
This is analysis of market scarcities and abundances that leads to high returns for individuals in possession of scarcities and correspondingly low returns to individuals in possession of abundant resources.
Scarcities are: natural resources, Intellectual property especially new ideas, and Quality labor with unique skills. Abundant are: unskilled labor and monetized wealth. Correspondingly winners are: Individuals in control of natural resources from American superrich to Russian oligarchs; innovators and individuals with unique marketable skills.
Identified areas of growth and prosperity: Marketing and Finance due to increase in value of effective resource allocation, Managers due to increase in teamwork, top level individual workers due to high dependency of results on individual actions and uniqueness of high level skills.

3. Why Are So Many People Out of Work?
The explanation provided is simple – majority of people have average skill set and demand in it is going down dramatically. An interesting analysis based on chess game that underwent invasion of chess computers. The chapter includes review of unemployment impact of great recession and phenomenon of freelancing.

PART II What Games Are Teaching Us

4. New Work Old Game
This is a small chapter about use of computer in games, specifically in chess.

5. Our Freestyle Future
This is continuation of discussion about chess, computers, and human interaction as Freestyle operation – probably future of work.

6. Why Intuition Isn’t Helping You Get a Job
This part is about human intuitive decision-making versus computer-based decision-making. It comes with an interesting set of rules:
• Human strengths and weaknesses are predictable
• Be skeptical about elegant intuitive theory
• It is harder to get outside of your head then you think
• Revel in messiness
• We can learn

7. The New Office: Regular, Stupid, and Frustrating
At first it is about new work environment saturated with computers and technology. Then author is describing movement to use this technology to grade humans with example of FICO score expanded to multiple other areas, providing foundation of multiple fears of computers going wild or at leas making errors that humans would not make.

8. Why the Turing Game Doesn’t Matter
This is discussion of human versus machine and the fact that at current level of technology when computer consistently wins over human, the Turing’s criterion is not applicable any more. However the main thrust is to demonstrate that we are moving to human/computer combination in all areas of our lives.

Part III The New World of Work

9. The New Geography
The new geography of work is based on technology that allows instant communication and selection of who to communicate with. It also provide for easy movements leading to people sorting themselves out into groups. As example a statistics is given of dramatic increase in variance between the most and least educated cities. Similar geographic segregation is going on around the world.

10. Relearning educations
This is about dramatic changes in education when things like Khan academy, TED lectures, and such dramatically expand availability of best teaching methods and programs to everybody in the world. There is also a new understanding of learning processes developed based on computer games. It is self-directed and self-controlled processes when instead of grades student just plays until enough skills are mastered to move to the next level. The point is also made that there is plenty of space for human face-to-face teaching, but it comes as support for computer based self-learning.

11. The End of Average Science
The disappearance of average also fully applies to science. 3 reasons are given:
• Scientific problems become more complex
• Individual knowledge and contribution become more specialized
• AI computer could do research on their own
This process in its current status reviewed based on example of author’s area of expertise – economics.

12. A New Social Contract?
The typical reasons for coming dramatic social change are listed here: fiscal problems caused by generational entitlements of developed world, growing income inequality, huge populations of India and China are joining civilized world.
An interesting note about academic life as related to entitlements: the same professor who would defend unlimited safety net, would be pretty strict in his application of meritocratic attitude and demand for work ethic to his students and assistants.

Generally author’s forecast is stated like this:
a. Taxes will raise for top earners
b. Medicaid will be cut, but not Medicare
c. Fiscal shortfall will be taken out wage earners income through hidden cuts in benefits and additional burdens and mandates
d. Real estate rent will go down because people move to cheaper housing
e. Generally consumption expenses will decrease especially for junk.

The political changes per author are not expected to bring anything really dramatic such as revolution. America is still very rich country with one of the highest qualities of life even for relatively poor people. The political division expected to go three ways: high earners leaning democratic and low earners divided into two groups. One group that is living off government transfers would support big government democrats, and another one that is living off the relatively free market would support republicans.

There is also an interesting observation about division between high earners and high prestige groups. There is tension and a little bit of fight between them about what is more important: status currency of money or status currency of intellect.

The final word: do not expect dramatic changes in American polity, but dramatic changes in technology and environment are coming fast and it is both scary and exciting.

My Take on It:

Generally I agree with trend described in this book. However I do not think that average is over, it would rather change and quite dramatically. One things that got missing here is role of government not only as redistributor of wealth to the poor, but also as creator of meaningless and even harmful, but well compensated jobs for significant number or maybe even future majority of population.

The government jobs by definition have no value outside of legitimate government function of dealing with violence. These jobs produce something that nobody would buy on the free market. Actually author sees the future with government playing the decisive role in accommodation to changes described. I, on other hand, due to my half-life experience of living in USSR see another danger – it is danger that government redistribution of wealth could not prevent. This danger is boredom and loss of interest in producing something that people need and would buy and increase in interest in obtaining higher position in bureaucracy and better access to constantly diminishing pool of quality goods and services.

The only way out of this is to make sure that everybody had something to sell on the marked independently of demand for labor. I suggest equal rights for use of natural resources with individuals using less then average being able to sell these rights to individuals using more. This would eliminate dependency on labor sales or government loot for existence as long as one accepts life with somewhat below average use of natural resources.

20140502 Revolt Against Masses

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Main Idea:

This is a review of history of liberalism in USA as a product and political movement of self-conscious intellectuals directed against widely based democracy of uneducated and unrefined masses. This history starts a bit earlier then usual dating of progressive / liberal movement – not at the beginning of XX century, but a couple decades earlier when ideas of natural intellectual aristocracy start taking hold over minds of educated and semi-educated individuals.
The movement‘s objective was and is to overthrow “dictatorship of middle class” in America and establish rule of “the best and brightest” defined as individuals who successfully achieved accreditation from institutions accepted by other “intellectuals” as qualified to grand such accreditation: universities, especially ivy league universities, high brow publications, bureaucratic organizations of government, and all kinds of evaluation institutions created specifically for this purpose such as Oscars for cinema art, Pulitzers for journalism, Nobel for just about everything, and such. Since this accreditation in normal market economy does not necessarily could be easily converted into wealth, the paramount objective of the movement is to obtain control of violent machinery of the state and force transfer of resources from unwashed masses that created resources in the first place to control of “intellectuals”.
So far the movement was very successful, tremendously increasing size and role of government in American life. However this success was paid for by dramatic decrease in vitality of American economy and, consequently, levels of prosperity of American population. It seems that lately it got pretty close to achieving a tipping point when American Middle classes either rise to fight this enemy of their prosperity or will be destroyed by increasingly powerful bureaucracy that will inevitably will lead to additional and probably dramatic decrease in wealth and quality of life for vast majority of people including low level accredited “intellectuals”.


1. Progenitors
The beginning of contemporary liberalism came after Civil war massive industrialization that created the new rich. These new rich moved to the national scene in mass, but they were deeply resented by old gentry who was running country before. It took a few dozen years to produce forefathers of the movement: E.L. Godkin – founder of “Nation”, Henry Adams son of John Quincy and author of “Education of Henry Adams”, H.G.Wells author of Science fiction books, Herbert Croly founder of “The New Republic” and author of “The promise of American life”, Randolph Bourne author of “Youth and Life”, and Henry Mencken who made his name with books about plays of Bernard Shaw, and, obviously, Bernard Shaw himself.
All these individuals had similar world view saturated with contempt for regular people and hate to America as country where these contemptible regular people had power to live their lives the way they wanted and use resources they produced for their own purposes – the arrangement that severely limited intellectuals’ ability to direct development of society. Interestingly enough, this hate and contempt to democratic America was combined with admiration for Bismarck’s Germany, the country of all conquering bureaucracy that controlled society and provided social services appropriate for masses.

2. 1919: Betrayal and the Birth of Modern Liberalism
The idea here is that modern liberalism was born after WWI as rejection and even betrayal of progressivism. The progressives were aiming to improve democracy by reforms, while liberals rejected democracy as inappropriate form of government for contemporary world. The second term of Woodrow Wilson and red scare that actually was well justified, provided background necessary for this change. The milestone in change from improvement of America to contempt for America was collection of essays “Civilization in United States” written by elite Harvard graduates.

3. “Randolph Bourne Writing Novels” About Main Street
Bourne was a poet who hated America. This chapter is about a very popular novelist Sinclair Lewis and his novels saturated with the deep hate to American Bourgeois Middle Class, specifically the most famous of them “Main Street” and “Babbitt”.

4. Three Trials
These were: trial of Loeb and Leopold – two kids from rich Jewish families who killed a boy just from boredom and to prove their superiority after reading Nietzsche; Monkey trial about legality of teaching evolution; and Sacco and Vanzetti trial of two anarchists killing and robbing payroll guard. The point is made that intellectuals promote their agenda by using all three trials to prove that ideological complain can override the simple fact of each case: in Loeb case it was reasoning that killers were actually victims of society so their lives should be spared; in Scopes Monkey trial the whole case was intentionally initiated to reject ability of traditional society to maintain control over educational system; and in Sacco case the real fact were successfully overwritten by strife to make these two man into martyrs of labor movement.

5. Giants in Decline
This chapter traces fate of founding fathers of movement. Croly was disappointed with prospects of western civilization and eventually moved to support Mussolini and fascism before dying in 1930. Herbert Wells rejected both fascism and soviet communism, but for amazing reason of both these system being too democratic, that is having support of majority. Wells’ own ideas presented in “Open Conspiracy” were quite traditional – naturally born class of elite intellectuals ruling masses without any limitations whatsoever.

6. The Red Decade
It was decade of 1930s when western world was struggling through depression while intellectuals found example of bright future build in the Soviet Union with plan and control economy being superior to chaos of markets. The chapter brings in a number of Soviet supporters, propagandists, and enablers in USA who worked hard on behalf of Soviet Union as paradise for workers dutifully covering up truthful information about real Soviet Union as murderous totalitarian regime. Interestingly enough the common name for them at the time was “Penthouse Bolsheviks” that sounds a pretty close to contemporary “Limousine Liberals”.

7. The Passing Glory of the Vital Center
This is review of the next historical period of liberalism – post WWII development. It is mainly about Arthur Schlesinger and his ideas expressed in the book “Vital Center”. This strain of liberal / progressivism thinking was directed to distance itself from previous products of intellectuals – totalitarian Communist and Fascist regimes.

8. How Highbrows Killed Culture and Paved the Path to the 1960s
This is a story of 50s and liberal’s successful attack against American mass culture and consumerism. Two books from 1930s played a significant role in this attack: Aldous Huxley’s “The Brave New World” and Jose Ortega y Gusset’s “Revolt of masses”. Especially interesting is account of how mass culture moved to merge with classical culture through series of Great Books, TV performances of classic plays, and other attempts to bring high culture to masses. These attempts ended when intellectuals start mocking the combination of middle class with high culture and made a significant and successful effort to devalue such high culture in order to avoid any intellectual equalization with middle class.

9.Not a New Left but a New Class
This chapter is about 1960s when intellectuals moved to the next step of their battle against middle class using their prevalence in education to indoctrinate young generation move away from traditional values into tender hug of New Left. Galbraith provided the ideological foundation in his book “The Affluent Society”. In it intellectuals found their place as class of managers and technocrats superior to entrepreneurs and small business owners. It was also the time when pseudo scientific bureaucrats massively moved into politics first in Kennedy and then in Johnson administration. There is also an interesting reference to Eric Hoffer who identified this movement as the New Class aspiring to substitute old aristocracy and put themselves firmly on the top of masses.

10. From Jim Crow to Crow Jim
The point in this chapter is made that liberalism of 1960s was simultaneously statist and libertarian. It was striving to expand big government run by technocrats / bureaucrats and remove racial and cultural barriers. This went through a brief period of general agreement on colorless society, and then moved on to the new racism this time with superiority of black skin and inferiority of white. Paradoxically well-established white liberals for whom it seems gave license to expand government and correspondingly their power over middle class enthusiastically supported this switch.

11. McGovernized
This is review of tumultuous period of 1970s from initial far left liberal push of McGovern complain through republican big government of Richard Nixon who created a bunch of new federal administrations and such a pearl of liberalism as affirmative action, crash of Nixon administration in Watergate and return of one party rule of democrats with Jimmy Carter and completely democratic congress. 1970s was a time when failed rebels of 1960s got older and moved in mass into government, technocracy, and education. The big government supported businesses especially finance and other areas where many of intellectuals could find secure returns on their education relatively isolated from market. During these years leftists consolidated their views around ideology of big government and big business isolated from market and prepared foundation of their future massive offensive with objective to transform America into some kind of semi-socialist paradise where the best and brightest would make decisions in common interest and on behalf of everybody and where this contemptible middle class would be finally put in the low place where it belongs.

12. Progressives Against Progress: The Rise of Gentry Liberalism
This small chapter describes development of alliance between traditional liberalism and environmentalism that kind of provided “scientific” foundation for restrictions on growth of prosperity of middle class.

13. “The Philosophical Crisis of American Liberalism’?
This is description of philosophical transformation of Democratic Party from party of saloonkeepers, segregationists, private sector unions, and middle class workers with objective to provide protection and support to these groups within framework of market capitalism into party of government employees, public sector unions, and big government-protected businesses with objective to maximize control over all generated resources in hands of government leaving remnants of free market only in areas which government has problem to handle. At this point in late 1980s middle class was still too strong so technocratic liberal Dukakis went down to defeat due to damage inflicted on the middle class by liberal law non-enforcement politics, but philosophical framework for contemporary liberal / progressive ideology was pretty much settled down.

14. The Clinton Interregnum
Small chapter on Clinton years when liberal white house managed to accommodate republican legislature providing for relatively calm and prosperous period of economic prosperity. It also helped a lot that USSR fall apart so there were no serious external challenges.

15. Gentry Liberals and Public-Sector Unions to the Fore
This is a little bit more detailed description of formation of alliance between Democratic Party and Public employees Unions.

16. What Are Our Convictions?
This is an interesting question. In 2000s the left liberals of Democratic Party consolidated on mainly negative platform of opposing Bush II administration. With economy doing relatively well and Bush promoting republican version of expansion of big government, the main point become failure to limit wars in Iraq and Afghanistan. Financial crisis caused by big government intervention into financial markets ironically opened way to power for truly Leftist technocratic liberal wing of Democratic Party.

17. Conclusion: Obama Versus Main Street
The final chapter is about Obama, his administration and personality. Quite a bit of space dedicated to Obama’s successful reelection complain of 2012 when he won despite poor economy and lack of success in anything that he tried to do except for growth of government power. The conclusion seems to be that bureaucratic version of social democracy remains the only one of all isms of XX century that is still standing and there is no visible alternative to this arrangement.

My Take on It:

After a century of struggle BUPs (bureaucrats and politicians) finally arrived. With successful reelection of Obama administration, its nearly complete control over Democratic Party, and, despite Republican Party’s control of Congress, American liberal totalitarians seems finally have an opportunity to transform America in what they want it to be – docile government employees, protected against risks and prosperity of the free market, diligently working to implement great visions of the Best and Brightest. Fortunately it is not going to happen.
The one thing that inevitably comes with BUPs (bureaucrats and politicians) taking control over economy and/or any part of it is dramatic decrease in quality and quantity of goods and services generated. We can see it in every one of parts of American economy taken over by BUPs over the last hundred years: railroads, communications during AT&T monopoly, air travel during Aeronautics board control, education, home mortgage industry, and now healthcare services.
It is not obvious, but I think that we are on the brink of dramatic changes and real transformation of America because of a simple fact that this country populated by people who do not like and do not accept long term decreases in their quality of life. They already feel that exactly such decrease is happening now and they are becoming restless. Eventually, and probably pretty soon the young activist part of middle class will overcome remnants of educational indoctrination they were subjected to in schools and colleges and turn against people who brought this plaque of big government on them – liberal intellectuals and their Democratic party.
It’s going to be fun to watch.