Predictions

Walter Russell Mead: Channeling America 3.0???

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3D printers, driverless cars, nanotech: the 21st century looks to be even more different from the 20th century than the 20th was from the 19th. American politics and institutions are going to change much more rapidly than most pundits and politicos can yet understand.

Walter Russell Mead

This quote is uncannily congruent the argument of the forthcoming book, America 3.0: Rebooting American Prosperity in the 21st Century – Why America’s Greatest Days Are Yet to Come by Jim Bennett and me.

Walter Russell Mead’s wicked good blog Via Meadia has many posts which track closely with the arguments Jim and I are making. I am sure all this great material will end up in a forthcoming book by him about the demise of the Blue Model (a term he invented) and what is coming next.

I am going to shamelessly recycle this: “the 21st century looks to be even more different from the 20th century than the 20th was from the 19th.” This is a very pithy observation which captures our vision of America 3.0, which of course we cannot really predict with a lot of detail. As Bruce Sterling wisely said:

Nothing obsolesces like “the future.” Nothing burns out quite so quickly as a high tech avant-garde. Technology doesn’t glide into the streamlined world of tomorrow. It jolts and limps, all crutches and stilts, just like its ancient patron, the god Hephaestos.

Tomorrow Now: Envisioning the Next Fifty Years.

Still, we have to imagine the future, not so we will be correct then, but so we can plan, think, and act now. We also have to imagine the future so we don’t think today’s setbacks, as serious as they may be, are the apocalypse. Everyone reading this will be dead in 100 years, but our descendants will be alive, and they will have in part what we passed on to them. They will see us as living in a patch of history with a label and summed up in a few paragraphs. This is a phase, as is every other period in history.

I will confidently predict, as Mead does, that the pace of change will be faster than ever before. Moore’s Law will be in force for a long time to come, I hope.

What is particularly cool about the Mead quote, almost suggesting some kind of brain-meld via the astral plane between Mead and Bennett-Lotus, is the reference to “3D printers, driverless cars, nanotech” — each of these figure prominently in our first Chapter, America in 2040. One muse, three authors?

If you have not read Mead’s two excellent books, Special Providence: American Foreign Policy and How It Changed the World and God and Gold: Britain, America, and the Making of the Modern World, you must do so. Get them soon, so you are done before our book comes out May 28, 2013.

Cross-posted on America 3.0.

Helter-Skelter

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I was a teenager when the Manson murders went down, in the autumn of 1969 of course, the cruel and inexplicable murder of a movie star and several of her friends made all the headlines, and had lots of law-abiding citizens looking over their shoulders and being very careful about locking the doors and windows of their homes at night. It wasn’t until some time later that the associated murders of an elderly retired couple also hit the headlines of the LA Times, and other national newspapers. A blood-drenched, hippy cult with a weirdly charismatic leader had committed those murders in order so they claimed to trigger a devastating racial war, which they termed ‘helter-skelter’ from a Beatles song moderately popular at the time.

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What lies ahead, I fear.

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UPDATE: An an article at Belmont Club describes interest in alternative money creation as a way of anticipating inflation. It also goes further into a discussion of general competence.

The idea that Virginia should consider issuing its own money was dismissed as just another quixotic quest by one of the most conservative members of the state legislature when Marshall introduced it three years ago. But it has since gained traction not only in Virginia, but also in states across the country as Americans have grown increasingly suspicious of the institutions entrusted with safeguarding the economy.

What has changed is faith in the federal government, not just in Virginia but in a growing number of places. The lack of faith in the competence of government — and the soundness of the dollar — has been growing leading some states to create contingency plans in case the currency goes bust.

Once again, I apologize for my pessimism but this is what I see. First, there is this article, which quotes a well known financier.

There may be a natural evolution to our fractionally reserved credit system that characterizes modern global finance. Much like the universe, which began with a big bang nearly 14 billion years ago, but is expanding so rapidly that scientists predict it will all end in a “big freeze” trillions of years from now, our current monetary system seems to require perpetual expansion to maintain its existence. And too, the advancing entropy in the physical universe may in fact portend a similar decline of “energy” and “heat” within the credit markets. If so, then the legitimate response of creditors, debtors and investors inextricably intertwined within it, should logically be to ask about the economic and investment implications of its ongoing transition.

Certainly “growth” seems to be fundamental to our economic health. That, of course, presumes a growing population but it also would be affected by a stagnant population with a growing age disparity. The obvious example of the latter is Japan.

The creation of credit in our modern day fractional reserve banking system began with a deposit and the profitable expansion of that deposit via leverage. Banks and other lenders don’t always keep 100% of their deposits in the “vault” at any one time in fact they keep very little thus the term “fractional reserves.” That first deposit then, and the explosion outward of 10x and more of levered lending, is modern day finance’s equivalent of the big bang. When it began is actually harder to determine than the birth of the physical universe but it certainly accelerated with the invention of central banking the U.S. in 1913 and with it the increased confidence that these newly licensed lenders of last resort would provide support to financial and real economies. Banking and central banks were and remain essential elements of a productive global economy.

The effect of asset bubbles on such a system is worrisome as the history of Japan and the recent history of the US have shown. The Panic of 1907 was largely responsible for the creation of the Federal Reserve. That financial crisis is thought, by the authors of a recent book, to have been a consequence of the 1906 earthquake in San Francisco, which destroyed a large amount of real assets and the insurance costs that were associated. The immediate cause was financial speculation but the real losses had added to the fragility of the system.

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Case Study in Conservative Cruelty: George Will

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I don’t think George Will meant to be cruel when he wrote his recent article “The Time Bomb in Obamacare?” but he was and it is a recurring conservative mistake. Will focused on the law and the constitution. He found a bomb and he imagines he is a good bomb squad officer by analyzing the bomb and figuring out how it is going to blow up. What he missed, and it is crucial, is the vital step of clearing away the civilians. That is a cruel oversight and hurts the conservative cause. You have to make sure that people understand that there is a bomb and which direction to run so they do not get blown up.

The immediate threat for ordinary people is not Obamacare’s constitutional status, but what it will do to ordinary american’s access to care. Institutions that are caught in the payment squeeze will triage because otherwise they go broke and close, which would maximize suffering. Triage means that the lack of funds will cause them to try to maximize who they can save and cut off who they can’t afford to save. If you are going to be triaged, you need to know and you need to make alternate arrangements to pay cash, figure out how to live without needed care, or get your affairs in order. The later people figure this out, the more pain, suffering, and death Obamacare is going to cause.

Nothing George Will said about the law is wrong. By focusing on the Constitution and the law to the exclusion of the upcoming suffering of the people he ended up reinforcing a pernicious stereotype, one conservatives would do well to lose. Ultimately, the conservative focus on the law and the Constitution has the effect of reducing suffering and increasing the happiness of the people. This approach would be greatly increased in effectiveness if conservatives would directly say so instead of assuming people already knew. A great many people do not know and the conservative brand is suffering for it.

America 3.0, The Future of Manufacturing and Employment

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In our upcoming book, America 3.0: Rebooting American Prosperity in the 21st Century – Why America’s Greatest Days Are Yet to Come (available for pre-order here), Jim Bennett and Mike Lotus paint a word-picture of America in 2040, which is less a prediction and more an exercise in hopeful and forward-looking thinking for conservatives and libertarians. We include predictions regarding the impact of distributed manufacturing.

The recent article in Wired by Kevin Kelly entitled Better Than Human: Why Robots Will — And Must — Take Our Jobs makes similar points. Here are two good quotes from Kelly:

Right now we think of manufacturing as happening in China. But as manufacturing costs sink because of robots, the costs of transportation become a far greater factor than the cost of production. Nearby will be cheap. So we’ll get this network of locally franchised factories, where most things will be made within 5 miles of where they are needed.
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It is a safe bet that the highest-earning professions in the year 2050 will depend on automations and machines that have not been invented yet. That is, we can’t see these jobs from here, because we can’t yet see the machines and technologies that will make them possible. Robots create jobs that we did not even know we wanted done.

It is important to remember that technological change destroys categories of jobs, and creates new ones that literally cannot be imagined yet.

We are going to be facing a tidal wave of creative destruction in the years immediately ahead.

Our book offers some ideas about why we are well suited to benefit from these changes, and how to navigate the rapids to get from here to there.

Stand by for very interesting times.