"Restore(s) a little sanity into current political debate" - Kenneth Minogue, TLS "Projects a more expansive and optimistic future for Americans than (the analysis of) Huntington" - James R. Kurth, National Interest "One of (the) most important books I have read in recent years" - Lexington Green
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Posted by Lexington Green on 29th January 2015 (All posts by Lexington Green)
The battle of ideas is a long war. Where would education reform be if Milton Friedman hadn’t started fighting for school choice back in 1955, just because everyone thought he was nuts? Where would we be if Ronald Coase had given up on his idea to auction off radio spectrum, when he was asked in 1959 by the FCC commissioner if his proposal was a joke? Where would we be if Friedrich Hayek and a few other free-market advocates hadn’t met in Switzerland to launch the Mont Pelerin Society in 1947 in order to fight for freedom at a time when all seemed lost?
The fight can only be won by engaging in the battle of ideas now. It cannot be won by those who compromise from the get-go just to stay in power.
Matt is talking about the newly elected reform-minded Republicans in Springfield, Illinois.
They are currently a minority within a minority. That is a start. It’s a beachhead.
It took decades to wreck Illinois. It will take a long time to turn it around. There is no quick fix.
There is a danger that people elected with great aspirations will get coopted, lose their way, forget what they wanted to do when they got involved in politics.
So, to our political leaders: Ask yourself why you ran for office. Know your own values and principles. State them. Lead with them. Apply your principles at every decision point. Knowing exactly who you are and who you represent will allow you to lead with a clear vision and strong voice on any issue.
To be elected as a reform politician at this critical time cannot be about a cozy job, or even an assuredly steady job.
It is — it must be — about changing our state and our country for the better.
It is about confronting serious opposition to make that happen. That opposition offers the allure of various “carrots”, and wields the threat of various “sticks”, to try to compel assent to the current, supposedly “normal” state of affairs. We need leaders who disdain the carrots, don’t flinch from the sticks, and who do not forget why they sought and won office.
Our politicians need an internal compass, as Matt calls for here.
And they need external accountability, as Matt also calls for in this article.
Also, when they do the right thing, they need approbation and encouragement.
We can all help, especially with the latter.
This is a protracted struggle. Be prepared for the long slog.
HB: Drones. You had this amazing “commercial” on “60 Minutes” last year, about this fantastic future when drones are going to fly out and bring me my package, and it’s going to be right there. Immediately, everybody in the country, and probably around the world, was saying, “Great — when?”
JB: That’s a difficult question to answer. Technology is not going to be the long pole. The long pole is going to be regulatory. I just went and met with the primary team and saw the 10th- or 11th-generation drone flying around in the cage. It’s truly remarkable. It’s not just the physical airframe and electric motors and so on. The most interesting part of this is the autopilot and the guidance and control and the machine vision systems that make it all work. As for when, though, that is very difficult to predict. I’d bet you the ratio of lawyers to engineers on the primary team is probably the highest at Amazon.
HB: Is this a situation where everyone else in the world except Americans is going to get drone deliveries?
JB: I think it is sad but possible that the US could be late. It’s highly likely that other countries will do it first. I may be too skeptical. I hope I’m wrong.
It is too bad that the USA is likely to be slow moving in making this — and many other types of new technology — available to the public.
We are going to need entrepreneur and activists and, yes, even lawyers, who are committed to making new technology available to the American people, with the inevitable disruption of existing relationships and expectations.
Getting to a better America is possible, but nothing is inevitable.
There will be many struggles along the way to America 3.0.
Hannan notes that conservatives almost want to believe that there is no hope in the future, that we have seen the best times and they are behind us. But he disagrees.
But my friends we are at our most persuasive, and at our most electorally successful, when as Ronald Reagan did in this country, as Margaret Thatcher did in mine, when we imbue our message with a little breath of warmth, a little hint of optimism, a promise that the best lies ahead.
Things do get better, provided that you have trade and exchange, and that you release the genius of a free people, things will get better at an accelerating rate
We make a similar point in America 3.0, which has the subtitle, “Why America’s Greatest Days are Yet to Come.”
Posted by Lexington Green on 6th November 2014 (All posts by Lexington Green)
Senator Mike Lee has the best article yet about what the new, GOP-majority congress ought to do. It is entitled “Five Steps To Restore Trust, Transparency, And Empowerment.” Please RTWT.
Senator Lee makes several observations which are highly consistent with the picture Jim Bennett and I painted in America 3.0.
America’s health care, energy, higher education, telecommunications, security, and criminal justice needs (to name just a few) appear to be in the midst of transitions, nearing tipping points that will help define our nation in decades to come.
Most systems we use to provide government services were designed decades ago, before the tech and telecom revolutions that have changed the way Americans do almost everything else. In 20 years, will we need, say, a Government Printing Office or Internal Revenue Service in anything like their current forms? If disruptive innovations continue to personalize and localize the economy, will centralized, monolithic bureaucracies be the right instruments to regulate it? Or is government just as badly in need of some disruptive innovations that would enable market forces, public desires, and longstanding constitutional principles to once again show us the way and make our institutions more accountable?
… we know that our society and our economy have rocketed out in front of our government, and that the bureaucracy in its current form is unlikely ever to catch up.
Everything about American life today is becoming more decentralized, open-source, localized and personalized. Everything, that is, except government. An increasingly customizable economy and diverse social networks of mini-communities will not long tolerate the innate incompetence of clumsy, self-serving, Big Government.
Let Congress operate less like a nineteenth-century industrial mill, and more like a twenty-first-century open-source network.
In today’s world, individual and community empowerment are strengths for organizations who know how to use them.
This is all good stuff.
Yes, America is in the “midst of transitions”, and many sectors are indeed “nearing tipping points”.
Yes, America’s governmental legacy systems were designed before the contemporary “tech and telecom revolutions” occurred and should be fundamentally re-thought.
Yes, “disruptive innovations” will “continue to personalize and localize the economy” and this presents an opportunity to remake government in a more transparent and cost effective way.
Yes, the “bureaucracy in its current form” is doomed to fall behind the revolutionary pace being set by the American people and the innovations they are creating, which is making “everything about American life … more decentralized, open-source, localized and personalized.”
Yes, the old system has to be replaced, to become compatible with an “increasingly customizable economy and diverse social networks of mini-communities.” (That last phrase, a “diverse social networks of mini-communities” is particularly nice.)
Yes, Congress itself has to change from an America 2.0 model, ” a nineteenth-century industrial mill”, and move into America 3.0 as “a twenty-first-century open-source network.” (That will be cool, actually. It can be done.)
Senator Lee is being a visionary realist, the best kind.
Let’s hope his approach will be adopted by the incoming GOP Congress.
Remember: America’s greatest days are yet to come!
The topic of discussion was the upcoming election. One theme was the concern that Bruce Rauner may end up losing to Pat Quinn, despite Quinn being an unmitigated disaster. Polls show Rauner slightly ahead, but the trends are bad. Rauner has not yet closed the deal with Illinois voters, who are upset and concerned about the direction the state is going, but who are not yet convinced that Rauner is the guy who can fix the problems. I hope Rauner manages to make that connection with voters before election day.
One friend said that Alibaba was going to allow Chinese manufacturers to somehow overrun the USA. But if you go on their site, you see that firms from anywhere in the world can become verified supplier members.
More importantly, the rise of B2B direct contact on this scale is a genie that is now out of the bottle.
How much would I pay to have the item I want delivered to me rather than have to drive miles to the Superstore? if I add up the maintenance costs, fuel and other expenses of operating my car, and the time wasted in traffic, standing in line, etc., how much cheaper is the Superstore price?
How much would I pay to direct my money went to a local worker/shop owner I know and trust rather than to some supplier in a distant city?
These are questions that arise as a consequence of the digitization of the global/local supply chain in the peer-to-peer model. Just as we have reached Peak Central Planning and Peak Central Banking, we may have reached Peak Centralization not just in government and finance but in the corporate-cartel model of “low quality at high margins.”
The centralization represented by Walmart may be past its peak.
Alibaba’s recent IPO, which was almost certainly over-hyped, should not distract us from the importance of the underlying model, or from speculating about what its long term impact may be.
Posted by Lexington Green on 2nd October 2014 (All posts by Lexington Green)
As I noted in yesterday’s post, I team-taught a course on America 3.0 at U.Cal.Irvine last Spring. We considered asking the students to read some additional material beyond the sections of the book we assigned. However, we decided that the book was enough and we did not want to overload under-graduates. The following is the proposed additional material we considered assigning, with links.
The students should read Section I, part C — pages 10-24. This article covers three major sources of disruptive change: 3D Printing, Synthetic Biology and Bioprinting and Robotics. Of course, they may read the entire article if they wish. The question of the law and regulation of these new technologies is a huge area to be explored.
Posted by Lexington Green on 30th September 2014 (All posts by Lexington Green)
This diagram shows the stalling progress in the speed of air travel.
The inner ring, the range of a DC-3 in 1940, was substantially improved upon by the Lockheed Constellation in 1950, and much more so with the Boeing 707 in 1960. That was twenty years. But from 1960 to 1990, only the small outer circle was gained. And in the quarter century since, it has not expanded at all.
Technology has advanced in small things — small in size, not in importance — like electronics. But in big, macroscopic things, the world of “stuff”, it seems that there has been stasis for two generations. In a recent post, I linked to a video where Peter Thiel made this point. Theil may have overstated his case, but in the case of aviation he certainly appears to be correct. (Incidentally, my copy of Theil’s new book, Zero to One: Notes on Startups, or How to Build the Future arrived yesterday.)
One theory is that only defense-related spending is sufficiently large and removed from market considerations to lead to truly massive breakthroughs in technology. This view is espoused by Peter J. Hugill, in his book World Trade Since 1431: Geography, Technology, and Capitalism Paperback, a brilliant book which I heartily commend to you. However, I am not convinced that this is true in every case. In the case of aviation, the basic scientific insights exist, so government-financed development may not be necessary to reach the next breakthrough in aircraft performance.
My coauthor Jim Bennett notes:
We may soon see transsonic aircraft operating commercially. These will fly just above the speed of sound, where the sonic boom can be minimized by a number of design tricks. These could operate at airspeeds of around 700 knots, compared to the 500-550 at which most airliners are operated today. They could go faster but they are deliberately slowed down to reduce fuel consumption.
According to Jim, true supersonic or hypersonic aircraft “will be limited to transoceanic routes by sonic boom restrictions, or depend on new approaches which have yet to be fully tested.”
While a 20% increase in speed will be nice to have, I am eager to see these massive, disruptive changes in aviation speed — multiples of the present speed, not just incremental increases.
In America 3.0 we predict a breakdown of the regulatory machinery that is stalling technological progress in many areas, including improved aircraft performance. We speculate about what much faster commercial air travel will allow in terms of, for example, locating retirement housing in Cuba and Mexico, with rapid access by air.
Seniors are able to stay at home, both with mechanical assistance and with many people specializing in providing elder care, or move into modularized units easily attached to the their adult childrens’ homes. Retirement communities in Cuba, the Central Highlands of Mexico and the Mexican border zoner are becoming popular. Hypersonic air travel, until recently only used by the very wealthy or government officials, is slowly coming down in price, as aerospacelines compete for business, thus making visits back and forth to visit Grandma far easier.
Just as driverless cars will make exurban development feasible, as we describe in America 3.0, routine, affordable supersonic air travel will make remote locations useable for business and housing that are not feasible now.
A world that it is half or a third the size it is now, in terms of travel time, opens up opportunities that we cannot even conceive of now.
Posted by Lexington Green on 29th September 2014 (All posts by Lexington Green)
There is enormous inertia—a tyranny of the status quo—in private and especially governmental arrangements. Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.
This could easily have been the quote at the front of America 3.0.
A crisis, or series of crises, are likely to be coming in the years ahead as the economy and government based on industrial era (America 2.0) models fails more and more completely and obviously. The inertia, the tyranny of the status quo, embedded in our existing institutions is going to resist meaningful reform. It will not be an inert resistance, either, it will be attacks on agents of change. To use Clausewitz’s phrase, the defense of the status quo will be “a shield of blows.” Some people will be hurt by the blows.
But it won’t work. It cannot work.
Our task in the book was and is precisely to offer alternatives to existing policies, and explain why our proposed alternatives suit America’s inherited underlying culture, and the technology which will shape our future. Many of the things we suggest in the book have been dismissed as “impossible” even by friendly critics. But as Milton Friedman correctly noted, the politically impossible can become the politically inevitable, if it is an idea whose time has come.
Posted by Lexington Green on 26th September 2014 (All posts by Lexington Green)
This is an excellent dialogue between George Gilder and Peter Thiel, from 2012, regarding two different versions of what the future will look like.
It is a little over an hour, and I highly recommend you listen to it.
Gilder is a thorough-going optimist. He sees a world where everything is good and getting better, and critiques of technological change are generally wrong-headed. That is a brutal over-simplification, of course. Gilder is a seasoned speaker, debater and writer. He makes a decent case, better than I am suggesting here.
Theil makes a more subtle case. He says that technology, other than the technology has stalled for decades. He says that the fields of engineering that deal with “stuff” have been — and this is a strong word — “outlawed.” As a result, the only areas where technological change is happening are in finance and computing. Nuclear engineering, for example, would have been a suicidal career choice if you made it a generation ago.
So, Theil is one hand a pessimist. He sees a decay in the rate of technological development, a decay in standards of living and real wages, a decline in optimism and expectations for a better future.
However, he does not conclude, “so, we are doomed.”
What he says instead is that we cannot pretend that technological progress grows on trees. He says that we need to address the obstacles to technological change which are thwarting the potential for a better future.
All of that seems correct.
The vision Jim Bennett and I depict in America 3.0 is one in which the excessive regulatory obstacles to technological progress, capital formation, and new business formation have been greatly reduced. Under that scenario, much of the halted progress in the world of “stuff” should resume. This is particularly the case because, as Gilder correctly notes, the extraordinary advances in computing power will enhance the potential of all of these areas. The potential for rapid development, leading to rapid economic growth and rising living standards, is within our reach. It is being held back by political and regulatory obstacles, not technical or scientific ones.
That has to change. But, it might not. Nothing is inevitable.
Posted by Lexington Green on 25th September 2014 (All posts by Lexington Green)
A key factor in explaining the sad state of American education can be found in overbureaucratization, which is seen in the compulsion to consolidate our public schools into massive factories and to increase to mammoth size our universities even in underpopulated states. The problem with bureaucracies is that they have to work hard and long to keep from substituting self-serving survival and growth for their original primary objective. Few succeed. Bureaucracies have no soul, no memory, and no conscience. If there is a single stumbling block on the road to the future, it is the bureaucracy as we know it.
Bureaucratic and institutional irrationality occur because, of all man’s institutions, bureaucracy in all cultures has a tremendous potential to be counterproductive. This drive toward inefficiency may be a direct consequence of blind adherence to procedure, but it also stems from bureaucratic needs for self-preservation and a vulnerability to pressure groups. The combination is unbeatable.
By their very nature bureaucracies have no conscience, no memory and no mind. They are self-serving, amoral and live forever. What could be more irrational? Changing them is almost impossible, because they function according to their own rules and bow to no man, not even the President of the United States. Custom, human frailties, and the will to power keep our bureaucracies going. … Paradoxically, most bureaucracies are staffed largely with conscientious, committed people who are trying to do the right thing, but they are powerless (or feel powerless) to change things. None of which would be so serious if it weren’t that these are the very institutions on which we depend to solve all our major problems. Some answer must be found to bureaucracy. It is not social injustice capitalized upon by political leaders that causes revolutions. It is when bureaucracies become so top heavy and inefficient that they are incapable of serving the needs of the people, that governments fall.
Bureaucracy on the life-destroying scale described by Edward T. Hall is an industrial era phenomenon. Only a bureaucracy can turn ordinary, decent people into participants in gigantic atrocities that go on and on, and absolve the people who operate the government machine from personal responsibility for the consequences.
In America 3.0 Jim Bennett and I refer to Industrial Era America as “America 2.0″ — an era which is ending, and a new post-bureaucratic, post-industrial era, America 3.0, is struggling to born. Edward T. Hall helps us see that there is a lot about the old world that will not be missed.
John O’Sullivan is the Director of the Danube Institute in Budapest. John arranged for a debate between Jim Bennett (on the left in the photo) and George Schöpflin (on the right), which took place on March 27, 2014. The Debate is entitled: Continuity as a Model for Central Europe?
there is a significant difference between Western Europe and the rest of the world, for example the difference of endogenous and exogenous marriages, the latter produces outward looking societies. All of Western Europe shares this heritage, including Hungary. But there is a predictor in Europe: who was modernized in the 19th century and who in the 20th century. There is a further, significant separation between England, Eastern Scotland, and the continental areas. There is the question: how important is the family system, versus other important things like religion, culture, and language? My opinion is that the family system is as equally important as other factors. People typically analyse national differences, but the family system lines can be good predictors of different models of state buildings, too. Attempts to build states across the lines of different family systems might result in trouble areas within Europe.
In his paper Mr. Fletcher presents “a framework for understanding decision-making in different business cultures that will enable B2b researchers confronted with a new market to ask the right questions quickly and not waste time and money looking in the wrong places for the wrong things.” Mr. Fletcher finds that culture is “the hidden dimension” which has a “significant influence on economic and industrial behaviour and performance, but a large part of culture is implicit, unconscious and hidden from direct view.”
Bennett notes: “First, it takes 5 million plus taxpayers, and most of the North Sea oil base, out of the funding available to keep the U.K. within the minimum 2 percent GDP contribution to its defense capabilities that NATO calls for … .” It will reduce Britain’s defense capabilities, and make Scotland a security free-rider.
Second, it will likely require Britain to remove the nuclear submarine base from Faslane, which is the base for Britain’s Vanguard class Trident ballistic missile submarines. Britain’s entire nuclear deterrent force is on these submarines. Building a new base to replace Faslane will be an enormous new expense at a time of declining defense budgets.
Bennett also notes that the Scots seem to have erroneous ideas about the prospects of making their country more socialistic than it already is.
But, as Bennett notes, a defeat for the independence referendum could mean a move toward a more federal United Kingdom, which would be more interesting than just another small, socialist ethnic enclave in Europe.
Posted by Lexington Green on 3rd September 2014 (All posts by Lexington Green)
Arnold Kling has a nice quote about the relative importance of cultural over institutional factors. If for some reason the US Government stopped working overnight, the American people would not be plunged into chaos. We have a culture which would permit us to voluntarily organize much of what we need to do. As Mr. Kling put it:
[T]he cultural margin is more important than the institutional margin. … [T]here are no societies in which anarchy will work well but government would work poorly, or vice-versa. Instead, on the one hand there are well-developed cultures, which could have good government or good anarchy, while on the other hand there are poorly-developed cultures, which could have only bad government or bad anarchy.
The vision that Bennett and Lotus put forth is not the technocratically-run national system that most contemporary politicians and pundits presume is ideal. Nor is it the philosophically-driven rights-based society that libertarians might prefer. However, if the authors are correct in their cultural anthropology, then their idea of America 3.0 is what fits best with our culture.
This is a nice summary of the future we hope to see in America.
Posted by Lexington Green on 15th August 2014 (All posts by Lexington Green)
I spoke yesterday to a the Indianapolis Federalist Society Lawyers Chapter. I gave an overview of America 3.0. I focused on the past and future of the legal profession for this mostly lawyer crowd. It was a very good session, with lively Q&A, with some digressions about contemporary politics, especially Illinois politics.
Mr. Brownback has led the movement for tax reform, which has been taken up by Republicans in Oklahoma, Missouri, Ohio, North Carolina and Wisconsin. Liberals are trying to stop the trend from spreading by predicting catastrophe. They’re afraid people may soon be asking what’s right with Kansas.
Meanwhile, a reliable source tells me the picture above is from Governor Brownback’s office.
Posted by Lexington Green on 5th August 2014 (All posts by Lexington Green)
They stand now on the threshold of public life. They are in the leash, but in a moment they will be slipped. What will be their fate? Will they maintain in august assemblies and high places the great truths which, in study and in solitude, they have embraced? Or will their courage exhaust itself in the struggle, their enthusiasm evaporate before hollow-hearted ridicule, their generous impulses yield with a vulgar catastrophe to the tawdry temptations of a low ambition? Will their skilled intelligence subside into being the adroit tool of a corrupt party? Will Vanity confound their fortunes, or Jealousy wither their sympathies? Or will they remain brave, single, and true; refuse to bow before shadows and worship phrases; sensible of the greatness of their position, recognise the greatness of their duties; denounce to a perplexed and disheartened world the frigid theories of a generalising age that have destroyed the individuality of man, and restore the happiness of their country by believing in their own energies, and daring to be great?
Will they? Will they believe in their own energies? Will they dare to be great? Will they restore the happiness of their country? Will they denounce the frigid theories that have destroyed the individuality of man?