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Reading the galleys in reverse, the prose sharpens and the mood tilts toward manic joy. Forget the hunt for esoteric commas; think paragraphs not fumbling but driving towards very good ideas. Every paragraph with either a real idea or an arresting factual gem to hang on the nail that is the idea to make it memorable. Every page with enough of a forward narrative “what happens next?” thrust to make the reader (or, at least, the author) want to turn the page. And the whole thing turning into a well-architected Memory Palace that does indeed promise that those who read jt from cover to cover will indeed leave having acquired a κτῆμά τε ἐς αἰεὶ, a treasure for all time.

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…And it is a long slog: I never trained my brain to see what is in front of my eyes as opposed to what my brain predicts should be in front of my eyes.

But as I do try to check it, going in reverse order from the back sentence by sentence in an attempt to see each one with truly fresh eyes and without preconceptions about what it must say, I find myself becoming more and more manic.

True: I see no letters of fire that will by the logic of iron necessity inscribe themselves on the minds and souls of readers, and thus make it κτῆμά τε ἐς αἰεὶ, a treasure for all time.

But it is damned good. Paragraph by paragraph, it is damned good. Damned Good. DAMNED GOOD!

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Back up to the spring of 1979, my first year of college: my best friend Michael Froomkin came up from New Haven, where he was going to school, to Cambridge. We wound up going to my Government 106B political philosophy lecture. Afterwards we went up to the podium, where the lecture, the God like Michael Walzer was gathering his notes, to join the people asking him clarifying questions. My friend Michael noted a striking difference between how Walzer dealt with the texts and what the teachers at Yale were doing. Straussians, that weird tribe. They were giving extraordinarily close and convoluted readings of individual sentences, as if every comma in a key sentence was supposed to carry deep weight, send you on a 10-minute reflection on what that comma might mean, and conclude that it reversed the apparent surface import of the sentence. (But, since you couldn’t do that for the whole book, you had to somehow pick out which were the key sentences to be tortured, and have their surface meaning reversed in that way. That, of course, meant that the shared coöperation between the reader and writer in information transmission became 99.9% reader, and only 0.1% the writer as sock puppet. Yes, persecuted writers and writers who feared persecution did not say all they meant. But you could not untangle it by picking twenty sentences and torturing them until they confessed.) Walzer, by contrast, treated each paragraph as one of a set of fumbling attempts by the author to put his finger on a set of concepts and ideas that they only dimly grasped.

Walzer replied that, first, we should not forget that this book, Machiavelli’s The Prince <https://archive.org/details/in.ernet.dli.2015.221835/page/n2/mode/1up>, was hastily written as an audition for a job in the post-coup Medici régime of Florence (and also as an attempt to make them realize that he was a useful tool they could use, rather than an obstacle to be tortured)—not one in which every comma was labored over to ensure that the key esoteric message was conveyed to a small hermetic circle of cognoscenti while escaping the notice of casual or even careful-but-not-initiate readers.

Walzer replied that, second, he had to view writers like Machiavelli and Locke as guys sorta like him—smarter than him and probably more insightful about the worlds they were enmeshed in, but also at a disadvantage since Walzer had more giants to stand on the shoulders of. And he, Walzer said, could not help but remember as he read them how he felt when he wrote a book:

1. He started out with what seemed to be brilliant and irrefutable important insights that he could not quite see how to get down on paper.

2. He wrote feverishly, confident that he was riding were letters of fire that would by the logic of iron necessity inscribe themselves on the minds and souls of readers for all time.

3. But when the book emerged from the press—no letters of fire, just black-ink chicken scratchings, from which only a thoughtful and generous reader could derive the insights he had hoped to impart, which he, Walzer, now found inadequate and beyond his full grasp.

I am not having that kind of letdown right now. Not at all.

UPDATE: I was indeed very gratified, working backward to try (unsuccessfully) to sharpen my proofreading eyesight and to keep perception honest, to find that the galleys of Slouching Towards Utopia did indeed hold up—not as an eternal flame, but as genuine heat. Avoid fetishizing textual minutiae, honor the paragraph as the unit of thought, and trust the disciplined joy that surfaces when you actually see that what is there really is really good!

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##slouching-towards-utopia
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#2022-01-16

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I have a section from my American Economic History lectures this spring on the post-1500 Atlantic-economy racialization of early modern slavery that I want to get into good enough shape to post here. It is not yet there.

And this morning a correspondent who does not especially wish me well this morning with respect to my mental harmony sends something across my screen. He sends me a piece from the New York Times that is relevant to that item on my to-do list, And so I go down a rabbit hole.

The piece:

Richard Fausset: A White Nationalist Wrote a Law School Paper Promoting Racist Views. It Won Him an Award <https://www.nytimes.com/2025/06/21/us/white-supremacist-university-of-florida-paper.html>: ‘The University of Florida student won an academic honor after he argued in a paper that the Constitution applies only to white people. From there, the situation spiraled: Preston Damsky… law student… white nationalist… antisemite. Last fall, he took a seminar taught by a federal judge on “originalism”… argued that the framers had intended for the phrase “We the People,” in the Constitution’s preamble, to refer exclusively to white people. From there, he argued for the removal of voting rights protections for nonwhites, and for the issuance of shoot-to-kill orders against “criminal infiltrators at the border.” Turning over the country to “a nonwhite majority,” Mr. Damsky wrote, would constitute a “terrible crime.”… Mr. Damsky, 29, was given the “book award,” which designated him as the best student in the class. According to the syllabus, the capstone counted the most toward final grades….

The Trump-nominated judge who taught the class, John L. Badalamenti, declined to comment…. The granting of the award set off months of turmoil on the law school campus…. Mr. Damsky’s paper includes… a call to “reconsider” birthright citizenship, and an assertion that “aliens remain second-class persons under the Constitution.” It also argues that courts should challenge the constitutionality of the 14th Amendment, which ensures birthright citizenship, due process and equal protection under the law, and the 15th Amendment, which protects the right to vote for nonwhite citizens.

Mr. Damsky concluded the paper by raising the specter of revolutionary action if the steps he recommended toward forging a white ethno-state were not taken. “The People cannot be expected to meekly swallow this demographic assault on their sovereignty,” he wrote, adding that if the courts did not act to ensure a white country, the matter would be decided “not by the careful balance of Justitia’s scales, but by the gruesome slashing of her sword”…

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The New York Times story does not tell us that Damsky has been banned from the campus for various of his other actions, “including a message calling for the elimination of Jews ‘by any means necessary’”. Thus the piece is, I think, not quite fair with respect to the law school administration, which I see as more likely than not doing a pretty good job in handling the situation in its full gestalt, both with respect to maintaining itself as a community and using this troll’s appearance as a teaching moment.

And I do confess that I do not understand how a paper that argues that courts “should challenge the constitutionality of the 14th Amendment, which ensures birthright citizenship, due process and equal protection under the law, and the 15th Amendment, which protects the right to vote for nonwhite citizens”. How can a duly-ratified constitutional amendment be argued unconstitutional? That claim that the XIV Amendment to the Constitution is un-Constitutional seems, to me at least, the leading candidate for MOST JUST WRONG. I cannot see how a paper that does that can be any good. This is especially the case since Damsky appears to draw very strong conclusions for the state of the law today that are totally consistent with the post-XIV Amendment Constitution.

That said, the argument that the original public meaning of “we the people” in the U.S. Constitution was “we the [white] people” seems to me to be intellectually stronger than much of what I see winning majorities in the Roberts court these days.

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Cast yourself back to 1857 and Chief Justice Roger B. Taney writing the decision in Dred Scott v. Sanford. Taney’s argument is:

As I recall, Roger B. Taney's principal argument was that:

• (a) if back in 1775 white Englishmen had regarded Black Africans as capable of becoming citizens,

• (b) they would not have been able to indulge in the Atlantic slavery economy as they did,

• (c) hence those enslaved and their progeny were not citizens of the several states in 1787,

• (d) did not become citizens of the United States upon the adoption of the Constitution,

• (e) have not been made citizens of the United States by congressional naturalization since, thus

• (g) while Dred Scott is indubitably a citizen of the state of Illinois,

• (h) he is not a citizen of the United States, and

• (i) has no standing to be a plaintiff before the federal courts.1

My suspicion is that back in his day our good Jacksonian Chief Justice Taney regarded this argument of his as Solomonic baby-splitting. He was trying to give each section's powerbrokers what they wanted most: Illinois could free slaves brought into it and make them citizens, but no federal court could poke its nose into the status of blacks in Missouri, or in the territories. And I would note that the infamous "black men have no rights..." Taney quote is, in context, not put forward as his opinion in 1857, but rather as an opinion underpinning the original public meaning or whatever of the words of the U.S. Constitution in 1787.

(Of course, Taney then goes on to write that if Scott had standing, he would still lose because (j) Congress has no power to prohibit slavery in the territories, and (k) slave property is in any event protected by the V Amendment.)

I do think that there is some evidence that this argument of Taney’s was seen to have some force in 1865. The framing of the 14thAamendment suggests that, at least to me: "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside..."

Taney’s (and Damsky’s) argument about how racist white Americans were in the late 1700s seems to me to be not weak.

Consider Benjamin Franklin, writing in 1751 about the swarthy German immigrants polluting his beloved Pennsylvania:

Benjamin Franklin: Observations Concerning the Increase of Mankind, Peopling of Countries, & c.<https://founders.archives.gov/documents/Franklin/01-04-02-0107>: ‘Why should the Palatine Boors be suffered to swarm into our Settlements, and by herding together establish their Language and Manners to the Exclusion of ours? Why should Pennsylvania, founded by the English, become a Colony of Aliens, who will shortly be so numerous as to Germanize us instead of our Anglifying them, and will never adopt our Language or Customs, any more than they can acquire our Complexion.

Which leads me to add one Remark: That the Number of purely white People in the World is proportionably very small. All Africa is black or tawny. Asia chiefly tawny. America (exclusive of the new Comers) wholly so. And in Europe, the Spaniards, Italians, French, Russians and Swedes, are generally of what we call a swarthy Complexion; as are the Germans also, the Saxons only excepted, who with the English, make the principal Body of White People on the Face of the Earth.

I could wish their Numbers were increased. And while we are, as I may call it, Scouring our Planet, by clearing America of Woods, and so making this Side of our Globe reflect a brighter Light to the Eyes of Inhabitants in Mars or Venus, why should we in the Sight of Superior Beings, darken its People? why increase the Sons of Africa, by Planting them in America, where we have so fair an Opportunity, by excluding all Blacks and Tawneys, of increasing the lovely White and Red?

But perhaps I am partial to the Complexion of my Country, for such Kind of Partiality is natural to Mankind…

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The only semi-saving grace I can find for Franklin here is the claim that Amerindians belong, and that the aim of “excluding all Blacks and Tawneys” is to get the benefit of “increasing the lovely White and Red”.

Thus the only potential successful rebuttal I see to the argument that the “we the people” acting to establish the Constitution in 1787 were the white people would, I think, require that you inquire and establish that freed slaves and their descendants were part of the ratifying electorate back at the establishment of the Constitution. Looking at the history as of 1787, we find:

• Vermont: Its 1777 constitution was the first in the U.S. to ban slavery outright and did not restrict voting by race. Free Black men who met the property requirements could vote, and there is some evidence that a few did.

• New Hampshire: The 1784 constitution did not specify race as a barrier to voting. The franchise was limited by property and taxpaying requirements, but there is no evidence of a formal racial bar. Some historians believe free Black men could and did vote.

• Massachusetts: The 1780 Massachusetts Constitution did not restrict voting by race. Theoretically, any free man meeting property requirements could vote. In practice, some free Black men did vote in the late 18th and early 19th centuries, though the numbers were small and local officials sometimes found ways to discourage or ignore their participation.

• Rhode Island: The property-based franchise did not explicitly bar Black men. There are scattered references to free Black property owners, but no clear evidence of Black voting before the 1840s, when the state’s Dorr Rebellion and new constitution clarified the issue.

• Connecticut: The 1662 colonial charter, still in effect in 1787, limited voting to “freemen,” and in practice, this meant white men. There is no evidence that free Black men voted in Connecticut at this time, and later laws explicitly excluded them.

• Pennsylvania: The state did not explicitly bar free Black men from voting, and some did vote, especially in Philadelphia, as long as they met property and taxpaying requirements.

• New York: Free Black men who met property requirements could vote in New York. This right was later restricted in 1821, but in 1787, Black property owners could participate in elections.

• New Jersey: Its 1776 constitution allowed “all inhabitants” worth at least £50 to vote, which included women and free Black men. This was rolled back in 1807.

• Delaware, Maryland, Virginia, North Carolina, South Carolina, Georgia?: No way.

Is that enough Black voting in the ratification elections to have made it “we the people” rather than “we the white people” back in the day? Maybe. Maybe not. Do recall the slogan of the South African Communist Party during the Rand Rebellion of 1922: “Workers of the world, unite and fight for a white South Africa”.

But Roger Taney in Dred Scott could easily have decided the standing issue the other way, noting that in eight states in 1787 sufficiently well-off freedmen were, potentially at least, in the body politic that established the Constitution, and hence that Illinois's recognition of his state citizenship carried federal citizenship with it.

Refer a friend

References:

• Bujold, Lois McMaster. Brothers in Arms. Baen Books, 1989. https://www.baen.com/brothers-in-arms.html

• DeLong, J. Bradford. “I Have Yet Another Problem with Mark Graber…” (2008). Grasping Reality. https://delong.typepad.com/sdj/2008/08/i-have-yet-anot.html ↗008/08/i-have-yet-anot.html

• DeLong, J. Bradford. “Law Professor Mark Graber Strikes Again” (2007). Grasping Reality. https://delong.typepad.com/sdj/2007/08/law-professor-m.html

• DeLong, J. Bradford. “What Did People Expect When the Constitution Was Ratified?” (2007). Grasping Reality. https://www.bradford-delong.com/2007/01/what_did_people.html

• Fausset, Richard. “A White Nationalist Wrote a Law School Paper Promoting Racist Views. It Won Him an Award.” New York Times, June 21, 2025. https://www.nytimes.com/2025/06/21/us/white-supremacist-university-of-florida-paper.html

• Finkelman, Paul. The Origins of the Dred Scott Case: Jacksonian Jurisprudence and the Supreme Court, 1815–1859. University of Georgia Press, 1997. https://ugapress.org/book/9780820318871/the-origins-of-the-dred-scott-case/

• Foner, Eric. The Fiery Trial: Abraham Lincoln and American Slavery. W.W. Norton, 2010. https://wwnorton.com/books/9780393340662

• Franklin, Benjamin. “Observations Concerning the Increase of Mankind, Peopling of Countries, &c.” (1751). Founders Online. https://founders.archives.gov/documents/Franklin/01-04-02-0107

• Graber, Mark. Dred Scott and the Problem of Constitutional Evil. Cambridge University Press, 2006. https://www.cambridge.org/us/academic/subjects/law/constitutional-and-administrative-law/dred-scott-and-problem-constitutional-evil

• Litwack, Leon F. North of Slavery: The Negro in the Free States, 1790–1860. University of Chicago Press, 1961. https://press.uchicago.edu/ucp/books/book/chicago/N/bo3646184.html

• Oakes, James. The Radical & the Republican: Frederick Douglass, Abraham Lincoln, & the Triumph of Antislavery Politics. W.W. Norton, 2007. https://wwnorton.com/books/9780393061949

• Ratcliffe, Donald. “The Right to Vote and the Rise of Democracy, 1787–1828.” Journal of the Early Republic, Vol. 33, No. 2 (Summer, 2013), pp. 219–254. https://www.jstor.org/stable/10.1353/jer.2013.0040

• Taney, Roger B. Opinion in Dred Scott v. Sandford, 60 U.S. 393 (1857). https://www.oyez.org/cases/1850-1900/60us393

• Tomlins, Christopher. Freedom Bound: Law, Labor, & Civic Identity in Colonizing English America, 1580–1865. Cambridge University Press, 2010. https://www.cambridge.org/core/books/freedom-bound/6E4F9D7DDAF3B6E84A2A6B6E2B9C2C6B

• Waldstreicher, David. Slavery’s Constitution: From Revolution to Ratification. Hill and Wang, 2009. https://us.macmillan.com/books/9780809072354/slaverysconstitution

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We manifestly have not.

What went wrong?

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The Sweep of History

Back before 1870 the human population was always too large relative to our low (and slowly improving) level of technology, and our limited ability to harvest natural resources. Why? Because poverty made infant mortality very high, and patriarchy meant that women’s durable social power (with a few exceptions) came pretty much only from being mothers of surviving sons. Slowly-improving technology meant that there was not much room for this generation to be more numerous than the last and for people to still get fed: think of an average pre-1870 population growth rate of about 2.5% per generation. If you then do the math, you see that, in such a world, about one woman in three was left without surviving sons. Hence the drive to reproduce more—even if you already had living sons, to have another as insurance—was immense. That drive kept population growing whenever any technological headroom to support higher productivity emerged—breed strains of rice that grow more rapidly so you can get two crops a year, and find in a few centuries that the population of wetland Asia has doubled. That kept humanity poor. Before 1870 this world was a Malthusian world.

But there was even worse: In such a poor world, only a few could have enough. And the only way the few could get enough for themselves and their children was to find a way, through force and fraud, to take a substantial share of what the rest were producing and grab it for themselves. That meant that those who directed human society’s energies did so not toward making humanity more productive but, rather, making the force-and-fraud exploitation-and-extraction system run better for themselves. That meant that those ideas that were promoted and that flourished were not those that made humanity capable of doing more things more efficiently and effectively, but rather those that shored up the force-and-fraud exploitation-and-extraction system. That meant that the rate of technological advance was slow.

My crude guess is that there has been as much proportional technological progress—useful ideas discovered, developed, deployed, and then diffused throughout the global economy—making humanity more productive in the 150-year span since 1870 as there were in the entire nearly 10,000-year span since the beginnings of the creation of agriculture around the year 8000. Moreover, from 8000 to 1870 poverty, patriarchy, and slow technological progress kept humanity under the spell of the Devil of Malthus, with nearly all of the potential benefits of better technology being eaten up by population growth and resulting resource scarcity. Think of something like $900/year—the living standard of the poorest half-billion of our eight billion today—as the living standards of a typical human back before 1870.

Then, after 1870, everything changed.

Economic historians debate, and will debate as long as there is a human species, exactly why the change came in 1870. They debate whether the change could have come earlier—perhaps starting in Alexandria, Egypt back in the year 170 when Emperor Marcus Aurelius Antoninus ruled in Rome, or in the year 1170 when Emperor Gaozong ruled in Hangzhou. They debate whether we might have missed the bus that arrived in 1870 and still, today, be trapped in a Malthusian steampunk, gunpowder-empire, or neo-mediæval world.

But we did not. A lot of things had to go right and fall into place to create the astonishingly-rich-in-historical-perspective world we have today. Three key elements—modern science and the industrial research lab to discover and develop useful technologies, the modern corporation to develop and deploy them, and the globalized market economy to deploy and diffuse them throughout the world—fell into place around 1870.

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Hopes for the Post-1870 Era

Ever since, advancing science, turned into technology by industrial research labs, deployed at scale by modern corporations, and then diffused throughout the world by that magnificent crowdsourcing mechanism that is the global market economy have taken us on a wild ride. The rate of global technological progress, a rate that was perhaps 0.05%/year before 1500, 0.15%/year over 1500-1770, and perhaps 0.45%/year over 1770-1870, went into high gear, and has averaged 2.1% per year on average since. The deployed-and-diffused technological capabilities of humanity have thus roughly doubled every generation since 1870.

Soon after 1870 people got a clue that something had changed. Looking back at 1870-1914, economist John Maynard Keynes was to write between the world wars of how it had been:

economic Eldorado… economic Utopia… that Devil [of Malthus]… chained up and out of sight…. What an extraordinary episode!…

The forces unleashed in 1870 meant that “the economic problem may be solved, or be at least within sight of solution, within a hundred years… is not… the permanent problem of the human race… [which will be] how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well…”

Humanity before 1870 had been stymied because anæmic technology, limited natural resource, patriarchy, and poverty had kept us from being able to bake an economic pie sufficiently large to even raise the possibility that everybody could have **enough**. But with the coming of the power to bake a sufficiently-large economic pie, surely all that would fall away, no?

John Maynard Keynes had certainly thought so: “We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well…”

Friedrich Engels also thought so: with a sufficiently-large economic pie, with enough, the power system of exploitation-and-extraction:

ceases of itself. The government of men is replaced by the administration of things.… Ruling is not ‘abolished’, it atrophies…

They all thought that once you had solved the baking problem, the slicing and tasting problems—sharing and enjoying the pie, using our material resources to make us all healthy, secure, safe, and happy—would be straightforward also. Thus many who lived before 1870 would be very surprised to see us in our manifestly not-paradise, and to see how completely the problems of slicing and tasting the economic pie have flummoxed us.

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What Went Wrong?

So what happened? Why did we fail to grasp a near-utopia, why have we not made the world a near-paradise?

Letting the market economy rip to solve the problem of making enough had consequences. Thus the first half of the Big Story of twentieth-century economic history is a triumphant one. Friedrich von Hayek was a genius. He saw clearly that the market economy, when coupled with industrial research labs, modern corporations, and globalization, was the key to unlocking the cage keeping humanity desperately poor. He thus preached the gospel: “The market giveth, the market taketh away: blessed be the name of the market.” We should, he thought, be satisfied with the fact that there was a large-enough pie, count our blessings, and ignore the problems of slicing and tasting it properly.

But people would not, and did not, stand for that. They demanded, instead: “The market was made for man; not man for the market.” Karl Polanyi saw this most clearly: that humans thought they should have more rights and, indeed, needed more rights than just property rights. The market’s treating those whom society saw as equals unequally, or those whom it saw as unequals equally, brought social explosion after explosion, blocking the road to utopia.

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The New Deal Order & Its Collapse

Perhaps humanity came close to an institutional-societal setup to tackle the problems of slicing and tasting. After World War II in what historian Gary Gerstle calls the New Deal Order, the Global North at least produced the fastest economic and social progress ever seen. It was a shotgun marriage of Friedrich von Hayek to Karl Polanyi blessed by John Maynard Keynes. And it worked.

But this New Deal Order failed its sustainability test in the 1970s. The world made the Neoliberal Turn.

There were complaints. There was inflation—most notably oil shock-driven rising gasoline prices. There were business cycles. There was overbureaucratization. And there were too many programs and too many institutions that people saw as seeing giving too much money to people—from greedy Teamster union members to “welfare queens”—who had no proper right to it. Society may not know what “social justice” is, but it knows what it is not. The New Deal Order ran into the buzzsaw of the neoliberal challenge in the 1980s. The New Deal Order succumbed.

Yet the New Deal Order had delivered a lot—the slow productivity growth and inflation of the 1970s notwithstanding, the Vietnam War notwithstanding. Yes, mistakes were made. Yes, the New Jerusalem was not built. But the effect—the discrediting and replacement of the New Deal Order—seems disproportionate to the causes.

Back in 1993-1995 I was working for the Clinton administration. Back then we hoped to resurrect things. We hoped that 1981-1993 was a mistaken diversion from the best path. We hoped we could reverse course and get back to what had manifestly worked so well in the first post-WWII generation.

So, led by Bill Clinton, we placed a bet: first, economic policies to reverse the growth-retarding mistake of the Reagan and George H.W. Bush administrations; second, hope those would create a fast-growth high-tech high-investment high-employment future for America; third, with faster growth would come greatly reduced economic anxieties—and so burn the thread that the uppity undeserving were getting ahead of themselves out of American politics—then, fourth, once again pursue a pragmatic politics of what worked equitable growth, rather than a destructive politics of finding and punishing enemies.

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The Neoliberal Order

It did not work. It was replaced by a Neoliberal Order that was hegemonic, in Gary Gerstle’s terms: it shaped the core ideas of politics and governance not just for those who cheerled for it, but even and perhaps especially for those who resisted it. We could not restore the New Deal Order. We could not even restore a simulacrum of it in Left-Neoliberal sheep’s clothing.

The New Deal Order had required rapid growth, so that worries that its social-insurance system allowed the undeserving to take advantage of the hard workers and the job creators were drowned out by the music of “it’s getting better all the time.” The New Deal Order required a politics of coalitions in which people agreed they had a good thing going, and the big question was whether they should (as the center-right wanted) prioritize fixing the leaks in the roof or (as the center-left wanted) prioritize completing the addition.

Without all of those, it was unsustainable.

And so we working for and with Bill Clinton found ourselves, instead, working to cement the Neoliberal Order just as Eisenhower had found himself working to cement the New Deal Order back in the 1950s. Whether tilting to the left or to the right, Global North governments indulged in a very aggressive pursuit of free trade and globalization, a great weakening of unions, privatization, deregulation, and an extraordinary reduction of the degree of progressivity in the tax system. A belief that market mechanisms were almost always superior to bureaucratic or political mechanisms. And, for many, a belief that income inequality needed to be increased in order to reinvigorate economic growth, and that that greater inequality was not an unfortunate necessity but rather a positive good—giving the job-creators and the hard-workers what they deserved.

Was this transition from New Deal to Neoliberal Order inevitable? I still think that, on the west side of the Atlantic, it might well have worked, had George W. Bush’s team not gotten him elected by a 5-4 vote, and had all the Republican worthies not followed Newt Gingrich down the road that has led them to their current thralldom to Donald Trump and his fellow grifters. I still think that, on the east side of the Atlantic, it might have worked, had Britain’s Liberal Party been willing to support centrist technocrat Gordon Brown rather than rightist ideologue David Cameron.

But the Neoliberal Order entrenched itself in the Global North. But it failed to deliver on its own promises.

The Neoliberal Order did not restore the rapid growth of prosperity by reinvigorating entrepreneurship—rather, growth slowed further as the cult of short-term financial results undermined the ability of businesses and governments to make long-term mutually-reinforcing common-prosperity investments.

The Neoliberal Order did not properly distribute prosperity to the deserving and their just deserts to the undeserving—instead, rent-seeking strengthened among the plutocracy, to which kleptocracy added itself.

The Neoliberal Order did not restore moral order and solidity to Global North society—things continued to fall apart and the center held less. and less.

The only one of its promises the Neoliberal Order in the Global North fulfilled was to greatly increase inequality of income and wealth. It led to plutocracy, tinged with kleptocracy.

And yet the Neoliberal Order remained entrenched. Up until 2008 it was even triumphant. And it proved stubbornly and persistently resistant to erosion since.

It hung on after 2003, even after George W. Bush’s breaking of the Concert of the World and even of the Western Alliance in favor of a “Coalition of the Willing.”

It hung on after 2006, even as the hope that information technology would restore golden-age economic growth rates ebbed away.

It hung on after 2008, even as the claim that depressions were a thing of the past collapsed.

It hung on after 2010, even as the great-and-the-good did not just put the task of restoring full employment on the back burner, but took it off the stove entirely.

Thinkers like Robert Kuttner blame relatively small groups and individuals for the persistence of the Neoliberal Order: “cultural leftists”, especially high-tech ones, who welcomed de-bureaucratization; Ralph Nader, who welcomed deregulation; Bill Clinton, who was opportunistic; Barack Obama, who was inexperienced and cautious. Those do not seem sufficient causes to me. And yet since the 1980s each moment of the Neoliberal Order’s failure to reinvigorate economic growth, restore society to its proper moral center, redistribute wealth to the deserving in an appropriate way, or strengthen a world order in which America is the benevolent dominant power has been met by a common response: we must not replace the Neoliberal Order. We must, rather, double down and try harder.

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A Tentative Diagnosis

Some say that the wheel has finally turned—that we now live in the ruins of the fallen Neoliberal Order. I do not think that is true. It may no longer be hegemonic in the sense of forcing oppositional movements into dialogue and contention with it on its own terms, Neoliberalism is still out there. It persists.

My diagnosis is that, at least in the Global North, potential voters are, today: (a) profoundly unhappy with a neoliberal world in which the only rights that people have that are worth anything are their property-ownership rights and they are thus the playthings of economic forces that value and devalue their property; but (b) are anxiously unsatisfied with social democracy that gives equal shares of access to valuable things to those whom they regard as “undeserving”; and (c) while that economic anxiety can be assuaged by rapid and broad-based growth, it is also (d) stoked by those who like the current highly unequal distribution of wealth and thus seek to make politics about the discovery of (external and internal) enemies rather than about equitable prosperity.

And so here we are. Our current situation: in the rich countries there is enough by any reasonable standard, and yet we are all unhappy, all earnestly seeking to discover who the enemies are who have somehow stolen our rich birthright and fed us unappetizing lentil stew instead. Thus second half of the big story of the twentieth century is that very painful one. And is slicing and tasting satisfactorily even possible? As Richard Easterlin wrote a generation ago, humanity’s is a “hollow victory”:

In the end, the triumph of economic growth is not a triumph of humanity over material wants; rather, it is a triumph of material wants over humanity…

If the Neoliberal Order has been broken, it was broken by Donald Trump and his rants against Chinese, Mexicans, the imports we buy from them, and the immigrants that Mexico sends us. Nobody before Trump had managed to gain much purchase in an attempt to erode the Neoliberal Order. But since Trump’s election in 2016 many politicians—Bolsonaro in Brazil and Johnson in England ex-London, Orban in Hungary and Modi in India, and many others—have been taking notes.

But the potential replacements today for the Neoliberal Order appear massively less attractive than it does. Whether on their own or mixed with surviving Neoliberal remnants, ethno-nationalist populism, authoritarian state surveillance capitalism, or out-and-our neo-fascism are all frightening. And the problems we face are frightening as well: Global warming, ethno-national terrorism on all scales from the individual AR-15 to the Combined Arms Army, revived fascism, techno-kleptocracy—at all of these new and very serious problems that will mark the 21st century.

We have not resolved the dilemmas of the 20th century—as is shown right now most immediately by the failure of governments to manage economies for equitably-distributed non-inflationary full-employment prosperity. It should not be beyond us to elect governments that can manage the technocratic task of squaring the circle, and getting stable prices, full employment, rapid productivity growth, and an equitable distribution of income. Yet somehow it is.

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What Comes Next?

The moment does feel to me like the 1920s. Back then, John Maynard Keynes remembered the then-past era of 1870-1914 in which the world moved toward what he called “economic Eldorado”, looked at his then-present in which opportunities were not being grasped, and wrote: “We lack more than usual a coherent scheme of progress, a tangible ideal. All the political parties alike have their origins in past ideas and not in new ideas…. No one has a gospel. The next move is with the head…”

We need to think harder, much harder, about how to use our immense technological powers to build a good society.

Adapted from DeLong’s new book, Slouching Towards Utopia: An Economic History of the Twentieth Century, published by Basic Books

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CONDITION: End of Semester:

And every single academic committee must hold its meeting RIGHT NOW!

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FIRST: John Quiggin on the End of Neoliberalism:

Very flattering to get such attention:

John Quiggin: The slow demise of neoliberalism: How the all-conquering movement contained the seeds of its own destruction: ‘DeLong personifies the schools of thought within the capitalist world as being those of Hayek (“The market giveth, the market taketh away; blessed be the name of the market”) and Karl Polanyi (The market was made for man, not man for the market)…. While Hayek opposed all forms of government intervention in the economy as a “road to serfdom,” Polanyi argued that people “had rights to a community that gave them support, to an income that gave them the resources they deserved, to economic stability that gave them consistent work.” Within this schema, the decades following 1945 (Les Trente Glorieuses, as the French call them) can be seen as the period in which this tension was resolved by the combination of Keynesian macroeconomic management and the social-democratic welfare state…. But the tables were turned in the space of a few years. Hayek triumphed in the 1970s, both in DeLong’s symbolic terms and as the intellectual star of the decade…..

This account leaves DeLong, and his readers, with two big problems. First, did technological progress really cease to work after 2010 and, if so, why? Second, why was a relatively short burst of high inflation enough to overthrow social democracy yet decades of poor economic performance insufficient to generate an alternative to neoliberalism? On the first question, I am a bit more optimistic than DeLong…. Information is a “non-rival” produc…. Traditional measures of output, income and consumption become less and less relevant….

On the second question, DeLong argues, correctly I think, that social democracy was a victim of its own success…. Neoliberalism promised a return to prosperity. By the time it became clear that this promise would not be realised, expectations had been lowered so much that (for example) a 5 per cent rate of unemployment was seen as a success rather than the disaster it would have been perceived as in the 1970s. Again taking the optimistic view, we are seeing a gradual rehabilitation of the institutions of the mixed economy…. Perhaps we can finally put the era of neoliberalism behind us.

Slouching Towards Utopia: An Economic History of the Twentieth Century
By J. Bradford DeLong | John Murray | $34.99 | 624 pages

The Chile Project: The Story of the Chicago Boys and the Downfall of Neoliberalism
By Sebastian Edwards | Princeton University Press | US$32 | 376 pages

The information age point is, I think, a very good one.

Perhaps this is the way to put it:

• If you are producing a "rival" commodity, something that costs real resources to make another copy of and that can only be used by at most one person at a time, the ratio of user surplus to factor cost—the resources consumed and the money paid to produce the commodity—is of the order of magnitude of one.

• But for an information-good, paid for by the fumes off of advertising dependent on the users. attention, the ratio is much much larger: perhaps on the order of 10. (Although we really do not know: we do nothing but guess here.)

• Thus we have the prospect of an acceleration of wealth perceived as real user values, even as factor reward, values rate of increase slows to a crawl.

Perhaps.

An attention economy is a very odd beast.

I do not think we have a good handle on it.

I want to agree with John, and maybe I will—after I purchase and put on my meta-verse glasses. But when I buy a rival, good, I know that it is something I want to pay attention to. By contrast, I find the infosphere pushing me lots of the time to pay attention to things that, afterwards, I am sorry I did.

Things are very complex. I do not think I have a very good handle on them.

With respect to the second of John's main points in the passages I quote, I am also much less optimistic than he is.

It would be very nice to go back to social democracy: the shotgun, marriage of von Hayek and Polanyi, blessed by John Maynard Keynes. Certainly neoliberalism has not delivered for anyone—except the plutocratic rich, whose wealth it has amplified to a degree that I would say is almost beyond the dreams of avarice, save that the dreams of avarice seem to have no limits whatsoever.

But the failure of neoliberalism has not led to a movement to restore, social democracy.

Rather, the dominant vibe seems to be:

• Economic growth is too slow for us to be able to afford to pay the citizens’ benefits envisioned by social democracy.

• Besides, too many of those benefits go to those who do not deserve them—to the moochers and slackers.

• Thus social democracy’s benefits are too dearly bought, at a price that society is unwilling to pay.

Yes, this is a strange pattern of thought. But it is out there…

I find myself thinking that what I really need to do is go back and reread my Friedrich Engels. I need to think about how changing technology induces changes in the forces of production that then require changes in the relations of production which have consequences for the political-social-cultural superstructure built on top of that.

Plus the changes in the long 20th century have come so damn fast.

Starting in 1000, it was was 650 years from feudal to commercial gunpowder-empire society, and then 220 years from commercial gunpowder-empire to steam-power society. You have time to experiment with different modes of organization, communication, and governance built on top of the changing mode of production. You have time to see what works—or at least what does not catastrophically crash—and for things to reach rough equilibrium, or at least stable trench lines.

But then we only have 40 years from the steam-power mode of production to the second-industrial-revolution mode. And then there are only only 40 years from second-industrial-revolution to mass-production, 40 from mass-production to global-value-chain, and we are now clearly on the way to a dimly visible info-biotech mode of production. And each of these within-40-year shifts looks to me to be of the same order of magnitude as the shift from the feudal to the commercial gunpowder-empire mode of production.

The overwhelming piece of change has consequences: you cannot claim that any sort of equilibrium has been reached between forces and relations of production, or between relations and superstructure, as you could claim had been reached in the transition from feudal to commercial gunpowder-empire or from commercial gunpowder-empire to steam-power modes of production.

Ahem.

All this is to say that I fear there was a very strong elective affinity between mass production and mid-20th century social democracy.

Without those underpinnings, stable social democracy may well be next to impossible.

But I do not know how to make this argument convincing, or even what it is. I just sense that there is an argument there, but they will be correct .

Perhaps I should ask GPT-Chat…

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MUST-READ: Adam Gurri on þe Case Against Dictatorship:

Very nicely done:

Adam Gurri: The Case Against Dictatorship - Liberal Currents: ‘Democracies… are sclerotic, indecisive, and dithering; by contrast, states ruled by strong and capable dictators are capable of rapid policy change–or so it is argued…. It is China’s system, rather than a monarchy or the fascist state, which stands as the alternative to liberal democracy…. Regimes blunder…. But contrary to Mussolini and less nefarious critics, liberal democracy does have important structural advantages over its rivals that are too often overlooked…. Every society faces crises… [that] produce broad unrest among the highly capable “modular” masses, as well as among elites. Liberal democracies have the mechanisms to see the signs of unrest before it erupts, and to act decisively in response to this information. By contrast, the very means by which non-democracies insulate incumbents from competition sabotages their ability to understand and respond nimbly to changing circumstances….

The “modularity” of the modern citizen, stemming in no small part from the broad-based enrichment and access to technologies of coordination, creates a great deal of risk for regimes that outright ignore even very small interest groups. Genuinely open electoral competitions for government leadership with universal enfranchisement provides an institutional valve for the many interests and factions of a nation-state to exert influence, thereby discouraging extra-institutional measures. This is especially true of legislatures, which by their nature subdivide the electorate and thereby create representatives to negotiate on behalf of particular interests….

The myth of the dictator is of a man who is not held back by politics and is therefore able to act decisively on behalf of the public good. But… the termination of electoral competition does not mean the termination of constituents that must be appeased…. Barriers to electoral contestation in the institutional sphere and the barriers to public criticism in the information sphere come at a cost… leave[s] them flying blind to the level of their true support…. Non-democracies that tend to be more successful and long lasting… come quite close to the line of being liberal democracies, and simply take measures to make it very unlikely that current incumbents will have to leave office….

At the end of the day, if most non-democracies feel compelled to come as close to liberal democratic institutional arrangements as they can while still insulating incumbents from competition, and to characterize themselves as liberal democracies in their own official documents, one wonders what the case for dictatorship really is. Why settle for anything less than the real thing?

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ONE VIDEO: Apple Computer: The Greatest:

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ONE POEM: Programming Folkware:

Lou Ellen Davis: The Last Bug: ‘“But you're out of your mind,” they said with a shrug.
“The customer's happy; what's one little bug?”

But he was determined. The others went home.
He spread out the program, deserted, alone.

The cleaning men came. The whole room was cluttered
With memory-dumps, punch cards. “I'm close,” he muttered.

The mumbling got louder, simple deduction,
“I've got it, it's right, just change one instruction.”

It still wasn't perfect, as year followed year,
And strangers would comment, “Is that guy still here?”

He died at the console, of hunger and thirst.
Next day he was buried, face down, nine-edge first.

And the last bug in sight, an ant passing by,
Saluted his tombstone, and whispered, “Nice try.”

The poem was written in December of 1967: when IBM cards were fed into card readers face down, with the 9-edge first).

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O þ Things Þt Went Whizzing by…

Very Briefly Noted:

• David Yaffe-Bellany: How Sam Bankman-Fried’s Crypto Empire Collapsed… A masterclass from David Yaffe-Bellany of The New York Times on not to cover SBF.

• Dan Froomkin (2021): Jackie Calmes has an assignment for failing political reporters: ‘Jackie Calmes, a veteran former New York Times White House reporter, lit up media Twitter over the weekend with a powerful and heartfelt plea to her former colleagues to abandon false equivalence when covering the two political parties… one of the asymmetries I see in my daily life is the Democratic politicians are somewhat scared of we democratic economists—genuinely want us to approve their policy proposals, and craft them with that in mind—call republican, politicians are confident their team economists will fall into line no matter what. The New York Times, as far as I can see, never tried to get into the equivalent ood equilibrium.

• Economist: Has private equity avoided the asset-price crash?: ‘No, but everyone is enjoying the charade…

• Matt Yglesias: Why hasn’t technology disrupted higher education already?: ‘The key question about AI and school is about the past…

• Noah Smith: Techno-optimism for 2023: ‘What you should be excited about…. The A.I. breakout…. The energy revolution rolls onward…. The strange biotech boom…. There are others—falling launch costs… quantum computing… workable brain-computer interface implants…. No matter what happens to the total factor productivity numbers, I’ll have plenty of new material for these techno-optimism posts throughout the decade…

• Robin Greenwood & Marco C. Sammon: The Disappearing Index Effect: ‘The abnormal return associated with a stock being added to the S&P 500 has fallen from an average of 3.4% in the 1980s and 7.6% in the 1990s to 0.8% over the past decade…

• IBM: IBM Unveils 400 Qubit-Plus Quantum Processor and Next-Generation IBM Quantum System Two: ‘"The new 433 qubit 'Osprey' processor brings us a step closer to the point where quantum computers will be used to tackle previously unsolvable problems," said Dr. Darío Gil, Senior Vice President, IBM and Director of Research…

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¶s:

A complete inability to recognize on ProPublica’s part that its quality control has failed, and that its anxiety to be non-partisan made it easy play for Republican staff grifters. And, of course, an organization that cannot admit mistakes will soon have no quality control at all:

James Fallows: On That ProPublica ‘Chinese Lab Leak’ Story: ‘ProPublica and Vanity Fair co-released an investigative report…. It started with leads from a team of Republican staffers in the U.S. Senate.... The central figure in the story is a man named Toy Reid… [who] claims to have unique insight into the nuance and meaning of official Chinese documents.... Almost as soon as the story appeared, it was met with questions, criticism, and derision…. Skepticism about the story was entirely separate from views on the “lab leak” hypothesis itself.... The controversy involves language, evidence, and journalistic transparency and accountability… O’Kane: “Yes, exactly. I actually had been avoiding the ProPublica response, because I knew it was going to make me angry. And it has made me angry…

I need to figure out how to apply this to our current situation: I need to have a model of the natural rate of inflation at hand:

George A. Akerlof, William T. Dickens, & George L. Perry: The Macroeconomics of Low Inflation: ‘We question the standard version of the natural rate model…. Downward nominal wage rigidity in an economy in which individual firms experience stochastic shocks in the demand for their output…. There is no unique natural unemployment rate. Rather, the rate of unemployment that is consistent with steady inflation itself depends on the inflation rate. In the long run, a moderate steady rate of inflation permits maximum employment and output. Maintenance of zero inflation measurably increases the sustainable unemployment rate and correspondingly reduces the level of output. We show that these effects are large, not negligible as some previous studies have claimed…

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John Crespi: Fun trivia I just learned that you can footnote for your 2nd edition of Slouching. In 1913, Wittgenstein, Hitler, Stalin, Tito, Trotsky, Freud and Jung were living in Vienna.

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FOCUS: DRAFT: DeLong: SSHA Session: Introduction:

Thank you very much. One of the great things about having finally managed to get this book out into the world is to discover how many friends I have, the book has, and economic history has—how many people are interested in thinking and thinking hard about what we know about the long run shape of human economic history.

What are the stories we should tell ourselves about the very long run? What do we know about the very long-run shape of human economic history?

1. We think that people became markedly less fit after the coming of agriculture.

2. We think pre-industrial rates of population growth were absurdly, ridiculously low given human fertility, the patriarchal imperative to have surviving sons, and the fact that approximately a third of humans wound up without such.

3. (1) and (2) together give us a picture of a humanity after the coming of agriculture and before the coming of modern economic growth that was desperately, horribly poor.

4. And we can discern no visible trend in material standards of living for typical humans until relatively late in the early modern age.

5. Humans are productive. Ideas are productive, capital is productive, and resources are scarce.

6. We have our guesses as to human populations and standards of living, for what they are worth. Parenthetically, let me draw your attention to what I think are the two greatest uncertainties in these guesses.

7. The first is the population of humanity around the year –1000. Is it the approximately fifty million that McEvedy and Jones assigned to it long ago, and that most other people since have followed them in adopting, or is it the hundred million or so that the HYDE people have settled on? This makes a substantial difference with respect to how one views the Iron Age vis-à-vis the preceding Bronze Age.

8. The second is that our guesses of material living standards are more-or less-at factor cost, when what we really wish for is estimates of user benefit. The ratio of user surplus to factor cost is highly unlikely to be constant—especially when we compare constant returns to scale rival commodities with those produced with strongly increasing returns.

9. Putting these two issues to the side, our guesses are what they are:

Let me claim, further, that, at world scale, fluctuations in the human economy’s capital-intensity are relatively unimportant, so that the predominant factors affecting human productivity and standards of living are (a) successfully deployed-and-diffused ideas (about manipulating nature and cooperatively organizing humans) on the one hand and (b) resources per worker on the other. I guess that a measure of the value of the deployed-and diffused-human ideas stock H = y√P: average real income per capita times the square root of population.

Why the square root?

Well to take the value of human ideas H to be average real income times population raised to the zeroeth power would be to say that resource scarcity is not a thing. That is false. To take average real income times population raised to the first power would be to say that humans are not productive. That is also false. The square-root—raised to 1/2 power—is in between.

If anyone has a better idea, I would happily adopt it.

So then what do our guesses about average real income and population give us in terms of guesses of the value of the human ideas stock H? This:

What story does this table tell?

It tells a story of:

• humanity, ensorcelled by the Devil of Malthus, trapped in dire poverty, with technology growth exceedingly small by our standards until at least 1770, on a world scale at least.

• humanity desperately poor, spending hours a day thinking about how hungry you are poor, watching half your babies die, before 1870.

• after 1870 wealth and productivity explode; indeed, people looking back a generation or two later talk about 1870 as the beginning of “Economic El Dorado”.

• after 1870 the demographic transition spreading from being a Franco-Belgian peculiarity to eventually cover the entire world.

• after 1870 it becomes becomes clear within a generation or two that humanity, is for the first time in history, possessed of the prospect that it will relatively soon have the productive mojo to bake a sufficiently large economic pie for everybody to have enough.

Thus before 1870 the road is closed, and after 1870 the road to utopia opens, or ought to have opened after 1870. With the problem of baking a sufficiently large economic pie being solved, what remains are what our predecessors would have seen as the second-order problems of slicing and tasting the pie—of equitably distributing it, and of utilizing our fabulous wealth to live “wisely and well”. With baking solved, the problem of attaining utopia were then, in the eyes of previous generations’ thinkers like Francis Bacon, simply second-order problems.

Most of what made human humanity poor, and human life nasty, brutish, and short, back before 1870 was our inability to bake a sufficiently large economic pie for everyone to potentially have enough.

But in addition, piling Pelion upon Ossa and making life nastier, britisher, and even shorter, were the consequences of that poverty. The only way to get enough for yourself and your family back then was for you to constitute yourself as part of an élite and successfully run a domination-and-exploitation game on the rest of humanity. Thus governance and politics were primarily dissipative, destructive of much of the wealth that was created. For rulers and élites, those in charge and their bully-boy thugs-with-spears (and later thugs-with-gunpowder weapons), assisted by their tame accountants, bureaucrats, and propagandists, reaped where they did not sow and gathered where they did not scatter, and consumed much more of society’s potential energy in their force-and-fraud machines than they were ultimately able to consume.

That was much of what was wrong with human society back before 1870.

It would not, back then, have seemed unreasonable to expect that those force-and-fraud exploitation-and-domination machines would go away once an economy pie large enough for everyone to potentially have enough was bakeable.

We are well on the way to baking the sufficiently large economic pie. Here we are. It is 15 degrees Fahrenheit outside. We are not huddled under every blanket we can pile together, but are, if anything, slightly too warm here inside, because the hotel is overheated while I at least am in clothes that were made for Scotland in 1651, back when the closest equivalent to a source of gortex you have is a sheep.

Yet, in spite of our wealth fabulous in historical perspective, what were supposed to be second-order problems—the problems of slicing and tasting the economic pie, of equitably distributing and properly utilizing it so that people feel safe and secure and are healthy and happy—continue to pretty much flummox us.

In large part. they flummox us because technological progress is so fast. very single generation we have Schumpeterian creative destruction revolutionizing economy and society. Every generation it gives us a brand-new set of forces-of-production hardware. We then have to frantically write new socio-econo-political-cultural relations-of-production, -communication, -organization, -and-so-on software to run on top of it so the whole thing doesn’t crash. We try to figure out how to get the proper benefits of decentralization and incentivization on the one hand, while on the other hand not reducing society to a state where the only rights that are recognized are property rights and thus the only people who have any social power are those who have been lucky or who chose the right parents.

Those were the conclusions I arrived at after making up this table, and then staring at it for a good long while.

Now we could look backward from 1870: asking the question of how we got to the point of explosion. We could look forward from 1870: asking about the working-out of the logic of unprecedented, revolutionary, economic growth generation after generation, and that growth’s political-economy consequences.

I wound up writing a book looking forward from 1870 at the political-economy consequences.

I still regret not also managing to write the Landes-Schumpeter, book about the working out of the process of economic growth after 1870.

And I mourn my inability to write a comprehensive book looking backward from 1870 about how we got to the point of explosion. But I am cheered by noting that, this year alone, each in their own way, Oded Galor and also Mark Koyama and Jared Rubin have published very good works of synthesis on these questions.

But there is another question, about the extent to which we should take 1870 to be in some sense the hinge of history.

Matthew Yglesias informs me that Robert Nozick, when he died, was trying to develop a philosophy of counterfactuals: to distinguish sharply between “causally thin” and “causally thick” processes.

Mostly, Matt thinks, this was because it amused Nozick to troll other members of the Harvard faculty with respect to the trajectory of Marxian Socialism—Nozick maintained that:

1. A Russian revolution was causally-thick, in that there is no reasonable counterfactual in which Russia does not have a revolution after 1900;

2. A Leninist Russian revolution, was causally-thin, in that it is easy to think of counterfactuals in which the Bolsheviks are forgotten well before 1930, and quite difficult to see the stabilization of the really-existing socialist Leninist Bolshevik regime as anything but the most freakish and unlikely mischance;

3. However, conditional on Leninism, the emergence of something like Stalinism is another causally-thick process, for there no reasonable counterfactual in which Lenin’s regime is not followed by a larger disaster.

Indeed, Max Weber predicted this in 1918. When Joseph Schumpeter said that the Leninist Russia would be an “interesting laboratory” for experiments in economics, Weber is said to have roared back: "a laboratory littered with human corpses!” and then stormed out of Vienna’s Café Central, or so the story goes.

Suppose we apply this Nozickian framework to human economic history. Two natural questions are:

• Was the explosion of wealth and productivity of 1870, the Second industrial Revolution, the one big wave of Robert Gordon, causally-thin, in the sense that institutions had to evolve then in a way that was unlikely to get the explosion?

• Was the actual causally-thin nexus, instead, or nexuses earlier?

Could we very easily have avoided the last few institutions need to support the Second Industrial Revolution and Modern Economic Growth falling into place in 1870? Simon Kuznets was very firm that Modern Economic Growth was a different animal than what was going on during the British Industrial Revolution. In the British Industrial Revolution era of 1770–1870 world technological progress was perhaps a hair less than 0.5% per year. With the processes then ongoing pre–1870, it seems more likely than not that post–1870 technological progress would have been slower than that. A lot of global growth in deployed-and-diffused technology over 1770–1870 comes from the globalization-driven concentration of manufacturing worldwide into the districts in which manufacturing was most productive, largely the British Midlands. You can only do that once. A lot of global growth in the power of deployed-and-diffused technology over 1770–1870 came from its complementarity with stored sunlight in the form of coal and from the fact that the last round of glaciers had been bulldozers that scraped off post-carboniferous rock and gave us really cheap coal at sea level where it could be floated anywhere for pence. As of 1870 that coal was running out; William Stanley Jevons made his first splash in economics by pointing that out.

If Jack Goldstone were here, he would probably make his argument that the British Industrial Revolution is perhaps viewed as the last “efflorescence”. Had post–1870 technological growth fallen back from its 1770–1870 pace, we might now be sitting here with the technologies of 1903 trying to support our same world population of 8 billion. We would then be much, much, poorer. We would be sending people by the tens of thousand to islands in the South Pacific with pickaxes to mine guano.

Was the Second Industrial Revolution an eye-of-the-needle event?

Earlier this fall at Berkeley the extremely learned Robert Brenner said “no”. He lectured me for 45 minutes about how the true causally-thin nexus came much earlier: the emergence, in the two centuries after the Black Death, in the 300 mile-radius circle around Dover, of market-bourgeois class relations, and thus the transformation of (a) a society of peasants, knights, lords, and the occasional merchant into (b) a society of laborers, craftsman, merchants, farmers, landlords, mercenaries, and plutocrat-politicians. After that it was baked in the cake. And it is entirely right and just that Robert do this. He has, after all, been writing this since I was 15. Indeed, I remember, back when I was 20, David Landes telling me: you need to pay a great deal of attention to Robert Brenner.

Some here say that the causally-thin counterfactual nexus word was the founding of the Royal Society and nullius in verba, “nothing by word”. This shift from (a) ideas spreading primarily because they are useful to an upper class élite running a force-and-fraud domination-and-exploitation scheme on the rest of society, to (b) ideas spreading because they are true of empirical reality.

Others would talk about how the true truly unusual Nexus is the development of an extraordinary level of social trust.

Others might go back to the Emperor Heinrich IV Salier, reportedly standing in the snow outside of the castle at Canossa in 1077, and the establishment of the principle that the law is not just a tool for but binds even the most powerful.

Or you might even go back to the emergence of a strict monotheism—a God focused not on this world but on heaven and hell—in which case in this world one should praise the Lord, yes, but what is important here and now is to pass the ammunition.

What is the best narrative, the best grand narrative, for human economic history? Or what is the best grand narrative for us? Or are we better off without grand narratives at all? Might this whole project simply have been ill-advised?

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FOCUS: Hegemony Ending: One of the Ends of the Long 20th Century:

The estimable Nick Gruen reminds me of this passage:

Brad DeLong: Slouching Towards Utopia: In 2003, the era in which the United States was the trusted leader of the global-north “Western alliance” came to an end. At the end of the 1980s, after the end of the Cold War, George H.W. Bush reassured the world that US military supremacy was benign because the US military would be deployed only in support of an overwhelming majority vote of a country’s people, or according to the will of the UN Security Council. The Clinton administration had changed this to “according to the will of the NATO alliance”; and then the George W. Bush administration had changed it to “more or less at random, according to false and misleadingly interpreted intelligence, against countries that do not possess nuclear weapons.” Countries took note…

“Trusted leader” is perhaps laying it on too thick.

But it is the case that from 1870 to 2010 first the United Kingdom and then the United States believed that it was a benevolent hegemon, guiding the world militarily, diplomatically, and economically toward an ever-brighter future of prosperity, peace, and civilization. On the military side, preventing the growth of an authoritarian or radical power that could upset the liberal order; on the diplomatic side, a concert of liberal powers or of united nations; and on the economic side globalization and trade. This meant that often the hegemonic power had to, or perceived itself as having to, submerge its own short-run national interests in order to keep the global international system on course.

All this fell apart in 2003, and more sale in 2017, as the United States shifted to acting much more like simply another normal great power—and an erratic and ill-governed one at that.

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MUST-READ: Karl Marx in Perspective:

Branko Milanovic: The unexpected immortality of Karl Marx: Socrates and Jesus... would not have become worldwide... had it not been for people who propagated their thought... Plato, and... Paul.... [For]] Marx, that role was played by Friedrich Engels.... Had not Engels spent more than a decade  putting Marx’s papers in order and producing, out of dispersed notes, two additional volumes of Das Capital, Marx’s fame would have ended at the point where it was in 1883. It would have been rather minimal....

Had there not been the Great War... Marx’s influence would have steadily gone down as the social-democrats in Germany moved toward reformism and “revisionism”. His picture would have probably been displayed among the historical “maîtres à penser” of the German social-democracy but not much of his influence would have remained.... But then the October Revolution and Lenin came (the second event), totally transforming the scene....

Then as the Comintern began to abandon its Eurocentrism and to get engaged into anti-imperialist struggles in the Third World, Marx’s influence expanded to the areas no one could have predicted it would (the third event). This decisive turn away from Eurocentrism and towards the Third World,  including, of momentous importance, to China, transformed Marx from a German and European thinker into a global figure....  Who could have imagined that two bearded 19th century German exiles would on special occasions adorn the Gate of Heavenly Peace in Beijing?

Responsibility. But with the success goes responsibility. As communism’s crimes became better known, and gradually increasingly laid at Marx’s door, and as communist regimes sputtered and their mournful and poorly educated ideologues regurgitated predictable phrases, Marx’s thought suffered an eclipse. And the question was asked: were Marx’s ideas, his “spirit”, responsible for many of the atrocities committed by the regimes that ruled in his name—perhaps his “ghosts”?... The ideas that were implemented in the 1920s Soviet Union, and after the Second World War in most of Eastern Europe and China were very much the ideas that Marx expressed in his writings even if his discussion of the post-capitalist society was scarce....

The influence did not end: the Chinese government’s decision in the early 1980s concerning how far to allow the growth of the private sector was justified by Marx’s true or apocryphal statement that workers’ exploitation was acceptable if the total number of employees hired by a capitalist does not exceed seven.... Even the violence which often accompanied communist revolutions or policies cannot be simply ascribed to historical contingencies or the non-democratic past of the countries that implemented Marxist ideology.... His was not exactly the language of reformism, conciliation, and “the long march through the institutions”....

Did we thus establish his responsibility and should we stop there? Not really. Because it is wrong to draw a direct line, or to entirely reject, an ideology because of its real-world consequences.... The ideas of the French Revolution of liberty, equality, and fraternity are not to be dismissed because that revolution quickly degenerated into reign of terror.... Marx’s ideas have indeed to be held responsible as much as the ideas of other economists and political scientists but that responsibility cannot obliterate the importance of his core ideas of human progress, equity, and revolution.

The rebel, the critic, and the analyst. There are two features of Marx’s that will, guarantee his influence.... The first is rebellion or revolution in its most primordial meaning of dramatic and thoroughgoing change.... Marx will always appeal to people who want to change the existing order of things.... So long as capitalism exists, Marx will be read as its most astute analyst. He identified two crucial and historically original features of capitalism: insatiable need for gain (“Accumulate, accumulate, this is Moses and all the prophets”), and the need for perpetual expansion to new territories or areas of production.... If capitalism ceases  to exist, however, Marx will be read as its most prescient critic. So whether we believe that in another 200 years, capitalism will be with us or not, we can be sure that Marx will...

Very nicely done—although I still prefer my own:

Brad DeLong's Grasping Reality

Understanding Karl Marx

I greatly enjoy and am, in fact, driven to write Grasping Reality—but its long-term viability and quality do depend on voluntary subscriptions from paying supporters. I am incredibly grateful that th…

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4 years ago · 2 likes · 3 comments · Brad DeLong

And I would especially call to your attention: Jonathan Sperber: Karl Marx: A 19th-Century Life <https://archive.org/details/karlmarxnineteen0000sper>

Brad DeLong's Grasping Reality

HOISTED FROM ÞE ARCHIVES: Five Books on þe Classical Economists (2020-09-29)

The Best Books on the Classical Economists recommended by Brad DeLong They were an eclectic bunch, including, among others, a stock market speculator, a moral philosopher, a cleric, a lawyer and a jour…

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5 years ago · 4 likes · Brad DeLong

Plus here are some ideas for a book that somebody someday should write:

Brad DeLong's Grasping Reality

Trying to Take "Modes of Production" Seriously

I greatly enjoy and am, in fact, driven to write Grasping Reality—but its long-term viability and quality do depend on voluntary subscriptions from paying supporters. I am incredibly grateful that the great bulk of it goes out for free to what is now well over ten-thousand subscribers around the world. If you are enjoying the newsletter enough to wish to join the group receiving it regularly, please press the button below to sign up for a free subscription and get (the bulk of) it in your email inbox. And if you are enjoying the newsletter enough to wish to join the group of supporters, please press the button below and sign up for a paid subscription…

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4 years ago · 2 likes · 2 comments · Brad DeLong

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Oþer Things Þt Went Whizzing by…

Very Briefly Noted:

• Quantian: ‘Dear Reddit: A friend of mine ran into some trouble with the law and was arrested Friday. The cops came around to my house and asked if we saw him Thursday night, but even though we had dinner together I denied knowing him 3 times. Now my friends are on my case about this. AITA?…

• Paul Krugman: Nobody cares about Biden’s energy policy. Great!: ‘Biden’s Carrots-Not-Sticks Approach to Climate Policy Is Looking Pretty Good…

• Martin Wolf: Central banks are right to act decisively: ‘The worst possibility would not be for disinflation to be done too slowly but for policymakers to give up too quickly…

• Ben Collins: ‘I am blocked by a man named CatTurd2 on the internet, making it considerably harder for me to figure out the business strategy of the richest man in the world…

• Aaron Rupar: 40 seconds from Trump's mess of a campaign launch speech that stuck with me…

• Brooke Masters: How not to fire people: ‘Badly done lay-offs at Twitter and elsewhere could wound the tech sector for years to come…

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¶s:

John Ganz: A Fascism and Far Right Reading List: ‘The Anatomy of Fascism - Robert Paxton…. A History of Fascism, 1914-1945 - Stanley G. Payne…. The Civic Foundations of Fascism in Europe — Dylan Riley…. Fascists - Michael Mann…. Fascism (Oxford Readers) - Roger Griffin, ed….. The Occult Roots of Nazism: Secret Aryan Cults and their Influence on Nazi Ideology - Nicholas Goodrick-Clarke…. The Crisis of German Ideology: Intellectual Origins of the Third Reich - George L. Mosse…. The Politics of Cultural Despair - Fritz Stern…. Reactionary Modernism: Technology, culture, and politics in Weimar and the Third Reich - Jeffrey Herf…. Neither Left nor Right: Fascist Ideology in France and The Birth of Fascist Ideology: From Cultural Rebellion to Political Revolution - Zeev Sternhell…. Nationalism, Antisemitism, and Fascism in France - Michel Winock…. The Politics of Resentment: Shopkeeper Politics in Nineteenth Century France - Philip Nord…. A History of Fascism in France: From the First World War to the National Front - Chris Millington…. Italian Fascism: Its Origins and Development - Alexander De Grand…. The Seizure of Power: Fascism in Italy 1919-1922 - Adrian Lyttelton…. The Fascist Ego: A Political Biography of Robert Brasillach - William R. Tucker…. The Appeal of Fascism: A Study of Intellectuals and Fascism, 1919-1945 - Alistair Hamilton…. Avant Garde Fascism: The Mobilization of Myth, Art, and Culture in France, 1909–1939 - Mark Antliff…

Milky Eggs: What happened at Alameda Research: ‘If you want to read a poorly researched fluff piece about Sam Bankman-Fried, feel free to go to the New York Times(PDF). If you want to understand what happened at Alameda Research and how Sam Bankman-Fried (SBF), Sam Trabucco, and Caroline Ellison incinerated over $20 billion dollars of fund profits and FTX user deposits, read this article.... Tentative[ly].... Alameda’s market-making edge decayed and they started punting longs.... Alameda was an incredibly disorganized, poorly run trading firm.... Sam Bankman-Fried was erratic, rash, and potentially incompetent.... Collusion between Alameda and FTX caused huge losses from algo failures.... Loans collateralized by FTT/SRM resulted in reflexive liquidations.... We don’t actually have a great idea of exactly how Alameda and FTX burned through as many billions of dollars as they did...

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Passage:

For those on the right, there is no question that the Volcker disinflation was necessary—indeed, long delayed past its proper time. One of the charges that right-wingers leveled at social democracy was that it led people to expect that life would be easy, that there would be full employment, that jobs would be plentiful. This, in turn, encouraged workers to be insufficiently differential, and to demand too-high wages, spurring inflation, which kept profits too low to justify investment. And since it promised to reward even those who had not pleased previous employers with jobs, it undermined public virtue.

Erratum: “differential” should be “deferential”, as Ihor Gowda has pointed out to me.

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The passage:

Yes, humans have coevolved with culture and geography. Those of us whose ancestors moved far from the equator are descended only from those among the migrants who developed mutations disrupting their melanin-production genes, so that enough sunlight could get through the outer layers of the skin to turn cholesterol into Vitamin D. It looks as though lactose tolerance has evolved six times in the past 6,000 years. Yes, we wish right now that whatever founder effects produced Tay-Sachs disease had not occurred.

Ann McCants writes, correctly, that this is:

a fundamental conceptual error…. Coevolution, by definition, means that two forces are in dynamic play with each other, that each changes the other without one being prior. It is conceptually possible that humans have coevolved with their cultures in the sense that both might change, even if slowly. But is it possible that human change can change geography?  So what do you mean here?

I wrote back: It should be “Yes, humans have coevolved with culture and migration”, in an acknowledgement that breaking the melanin-production genes and doing everything possible to amp-up the immune system against malaria have very powerful Darwinian advantages and have shaped our genes.

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The passage:

Being subjected to millennium-spanning slave raiding as a major part of life created a long-lasting durable culture of social distrust. In a well-functioning market economy you begin nearly every meeting you have with a stranger thinking that this person might become a counterpart in some form of win-win economic, social, or cultural exchange. This is not the case if you think there is even a small chance that the stranger is in fact a scout for people with weapons over the next hill who will seek to enslave you, and perhaps kill you or your family in the process. This background assumption of distrust did not matter much as long as the trading and commercial infrastructure of the colonizers governed economic activity. But after the colonizers left, the distrust came to the forefront, and it led people to grab for weapons more quickly and more often than they would have in a more trusting society.

This point is of much broader applicability than to post-colonial sub-Saharan Africa before 2000. I should have but did not make this clear—and so Anne McCants makes a valid critique of the book:

I find statements such as this one on development in the global south to be really misleading. You ascribe the reason that the global south did not catch up or even keep pace (p. 341) as: “The pre-World War II colonial masters did next to nothing to prepare the colonized nations of Asia and Africa for independent prosperity.”

The lack of effort on the part of former colonizers may well be true (although material and advice aid to the global south has been a very big industry for a long time – simultaneously accused of being patronizing and not enough). But that is only one hypothesis among many possible. And it overlooks the role of trust-supporting-exchange entirely. I think it is possible to ‘teach’ people not to trust, but much more difficult to teach them to trust. So, it is not unreasonable to go next to the African slave trades of 1600-1900 period as a teacher of not-trust. This too is a testable hypothesis, but I suspect many of the standard tests are post hoc. As you point out yourself, there have been many massive slave trades through history – indeed, it seems safe to venture that the majority of all people who have lived (certainly before 1900, but plenty remain today, and disproportionately in the global south even without an oceanic trade) have been enslaved or in forced labor arrangements of varying kinds.

This is, sadly, the human condition.

It is not enough to cite the absolute number of the Atlantic trade (truly horrific of course) as bigger, because we don’t have a clear sense of the relative size (to population for example) of earlier, or parallel but less well documented, cases. It seems also that it might matter that external slave trades are only possible where local slaving is already commonplace, as we know it was in much of world history, the exceptions being the rare case. If we start with the presumption, as I think we should, that slavery is lamentably the normal condition, then what is really worth explaining is why it becomes abhorrent in some contexts.

[I believe you have heard my co-author Dan and I say something similar about polygamy and monogamy – in the contemporary west we feel a need to explain the former, but in fact the condition that is odd in world history is the latter. And it’s not an accident that Marx drew the parallel between polygamy and slavery.]

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It was an error in the First Edition to leave this now-durable productivity slowdown largely unaddressed. It is not just something that happened to semiconductors, but much broader. A good source is Bill Janeway: “The Rise and Fall of the Socially Beneficial Corporation”, Project Syndicate (Nov. 11, 2022) <https://www.project-syndicate.org/commentary/us-corporate-profits-from-rd-social-welfare-to-buybacks-by-william-h-janeway-2022-11>:

The Rise and Fall of the Socially Beneficial Corporation

Nov 11, 2022 WILLIAM H. JANEWAY

The rise of the neoliberal order in the 1970s and 1980s coincided with the demise of the socially beneficial corporation. Since then, the US federal government and other institutions have managed to offset the loss of only part of the broader contributions that big business once made.

CAMBRIDGE – In his new book Slouching towards Utopia, the economist J. Bradford DeLong points out, correctly, that the “industrial research laboratory and the modern corporation” were the keys to unleashing a radical increase in the rate of scientific and technological innovation, and thus economic growth, from 1870 onward. DeLong also identifies the Treaty of Detroit, a landmark 1950 settlement between General Motors and the United Auto Workers, as a linchpin of American-style post-World War II social democracy. But what ever happened to the behemoth corporations that unlocked decades of growth while sponsoring health insurance and pensions for their employees?

As scientific discovery supplanted mechanical tinkering as the basis for economically meaningful innovation in the late nineteenth century, the required research funding was supplied by the corporations that the Second Industrial Revolution (steel, railroads, mass production) had spawned. “In firms such as American Telephone & Telegraph, General Electric, U.S. Steel or DuPont,” write David Mowery and Nathan Rosenberg in Technology and the Pursuit of Economic Growth, “the development of a strong central office was closely associated with the establishment or significant expansion of a central research facility.”

By allocating their monopoly profits to scientific research and development of technological applications, these corporations extended their market power while also serving a larger, social purpose. Before World War II, this purpose was not being met by the US government, which, starting in the Lincoln administration, had provided federal research support only for the agriculture sector. By 1940, the US government was allocating more research funding to agriculture than to all the constituent agencies that would make up the post-war Department of Defense.

Whether they owed their positions to formal agreements with the federal government (AT&T), patent monopolies (RCA and Xerox), or a combination of innovative research and commercial dominance (DuPont and IBM), the leading research laboratories could afford to invest upstream in the basic science from which technological innovations of commercial significance might evolve.

Then came WWII. Unemployment fell to 1%, and major US employers, restricted by wage controls, had to compete fiercely for labor. Thanks to a pragmatic compromise with the government, they were allowed to offer fringe benefits, such as health insurance and defined-benefit private pensions. This was made possible by asymmetric tax treatment for these benefits: employers could deduct the costs, and employees did not have to include them as income. 

The Treaty of Detroit was both a peacetime validation of the compromise and a broad signal to the private sector, where union membership peaked in the 1950s at about one-third of the labor force. It radically extended the role that dominant companies had come to play in the communities where they were based – this being the era before shareholder primacy came to dominate corporate management thinking.

Within the space of a generation, however, the monopoly profits available for funding R&D and social benefits had come under growing pressure. One after another, the great tech companies of the WWII era succumbed to the forces of Schumpeterian creative destruction and federal antitrust enforcement. 

AT&T and IBM were repeat targets of the Department of Justice’s antitrust division; but it bears mentioning that each case of state intervention proved directly beneficial to the broader enterprise of American innovation. In a 1956 consent decree, AT&T agreed to license freely all of its patents that were not directly relating to communications. And in a pre-emptive response to the DOJ’s third assault on it, in 1969, IBM “unbundled” software from its computers, thereby creating an independent software industry.

Other corporate giants failed on their own. US Steel was run over by a combination of more efficient foreign producers and the emergence of domestic “mini-mills” that thrived on scrap metal. RCA and Westinghouse fell victim to short-sighted financial engineering that traded strategic technical capability for instant stock-market gratification in the conglomerate mania of the 1980s. DuPont’s key patents expired, and the productivity of its R&D investments declined in the face of ferocious international competition.

Even as the twentieth century’s private-sector champions withdrew from the scientific and technological frontier, their absence was more than offset by the US federal government, which came to be the leading funder of R&D. With its roots in the WWII Office of Scientific Research and Development, the Department of Defense funded development across all the technologies that combined to make the digital revolution – from silicon to software. And to exploit the new downstream commercial opportunities, the professional venture capital industry emerged, first to fund digital innovation and then, following President Richard Nixon’s “War on Cancer,” to launch biotech startups.

But major corporations’ role in providing for their employees’ social welfare was not offset after their decline. Worse yet, the 1947 Taft-Hartley Act opened the door to state-level “right to work” laws that proved highly effective in reducing union membership in the private sector over the course of the post-war decades.

By then, after President Harry Truman’s effort in 1949 to establish universal health care as a federal entitlement was defeated, President Lyndon B. Johnson’s passage of Medicare and Medicaid marked the limits of publicly underwritten health care in America. In parallel, a systemic shift from defined-benefit to defined-contribution pensions moved the burden of investment risk from the employer to the employee. Today, the great corporations that catalyzed innovation and sponsored social welfare have come and gone, but market power persists, raising the question of where those monopoly profits are going.

During the neoliberal era that is now ending, a new target of opportunity for the application of excess cash flow emerged in the form of corporate stock repurchases. Previously, regulators barred this practice as a form of market manipulation. But the Securities and Exchange Commission changed the rule in 1982. Now over 60% of US companies buy back their own stock each year, and the annual amounts of these purchases typically exceed the payment of cash dividends (which is unsurprising, given the more favorable treatment afforded to capital gains).

The rise of the neoliberal order, so richly documented and analyzed in a recent book by the University of Cambridge’s Gary Gerstle, coincided with the demise of the socially beneficial corporation. Today’s digital tech giants are neither motivated nor equipped to play such a role, which is one reason why they have been struggling for legitimacy. Looking ahead, enhanced investment in technological dynamism and social welfare, under the stress of climate change, will come predominantly from the public sector, if at all. Can the new US CHIPS and Science Act and Inflation Reduction Act kick-start a new era of innovation? We can hope so, but hope is not an active verb.

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And the learned Fred Block writes in email:

There is a lot of evidence that the corporate research labs have declined dramatically in significance over the last half century. 

Some of this is short-termism where corporations don’t want to spend on anything that will not improve the bottom line in the next two or three quarters. 

But far more significant is the greater technological complexity of current innovation.  Developing new products or new processes now requires five, six, seven, or more different scientific specialties.  Not even the big monopolies can afford to create career lines for technologists in more than three or four fields.  So the current pattern is that they have experts in two or three fields and they link up with outside experts either at federal laboratories or universities or the new larger research institutes that the government is busy creating—such as the advanced manufacturing institutes.  

Moreover, the public sites are the place where the actual innovating occurs rather than back home at the corporate lab that probably lacks all the high tech equipment that the public sector provides.  Nobody talks about this because it undermines the case for privatizing the profits rather than gainsharing that acknowledges the federal contribution. 

To which I responded:

Re: “corporate research labs have declined dramatically in significance over the last half century.”

No, that is not a quibble—that is, I think, a very important point and a key part of how the neoliberal era has been such a disappointment to all in the Global North save the plutocrats. The Fordist-R&D structures of Bell Labs, Xerox PARC, and such were of immense value for human society, and you are right to note their sharp decline over the past half century.

And I do think you are right in extending Gerschenkron’s “Economic Backwardness” argument from finance and investment to research and development. Gerschenkron claimed that while the individual entrepreneur could do the job of finance and investment in the first generation of industrializers, you needed the support of universal banks for the second and of the state for the third. But the scale-of-R&D dimension may well be more important. And just how have Apple and TSMC managed it—financing the hardware node construction, gaining the engineering knowledge, and also writing the software to take advantage of what they make? I thought I understood Intel-Microsoft back in The Day. But I do not understand TSMC-Apple today.

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FOCUS: Components of þe Grand Narrative of þe 21st Century: Global Warming, & China Stands Up:

I made a decision fairly early in writing Slouching Towards Utopia <bit.ly/3pP3Krk> that there were two important processes—global warming, and the rise of China to whatever its ultimate position in the world will turn out to be—were parts of the story of the 21st century, and did not belong in my grand narrative of a long 20th century that began in 1870. Jeremy Wallace seems to me to have by far the most intelligent disagreement with that decision of mine:

Jeremy Wallace: Slouching Tiger, Hidden Dragon (of Neoliberalism): ‘I… have a hard time reading a history of the long twentieth century while ensconced in my position well into a 21st century where it seems increasingly clear that climate and China are central if not the main characters…. Taking China more seriously as not just a major player in the world going forward but as a causal force in the global turn towards neoliberalism as well as its current demise (?) is a missed opportunity….

The “Thirty Glorious Years of Social Democracy”… phrasing is very common and, in some ways, not wrong…. This was a period of vast improvement, relatively well-distributed. On the other hand, different perspectives (*cough* China *cough*) might view this time period as less congenial. One could argue that the famine of China’s Great Leap Forward is, next to World War II itself, the second greatest devastation humanity has suffered since the Black Death. Forty million Chinese are killed….

Great forces of economics and politics reshap[ed] the world… pushing forward neoliberalism from the social democracy that came before it…. More could be done to acknowledge China as an agent in that story with particularly underexamined power…. Early shifts away from Maoist planning helped to cement hegemonic beliefs in markets in the field of economics. The (Chinese) left wasn’t just devoid of ideas, it was actively switching sides…. That rapid development in China was seen by modernization theorists and Western politicians as likely to produce shifts in Chinese political dynamics towards greater freedoms helped provide cover for investments that could have been more tarred as disloyal to the home country. The idea that these investments might have positive political externalities smoothed them….

Delong argues against a simple “China shock” understanding of this dynamic where China stole American jobs leading to backlash: “Hyperglobalization’s principal effect was to cause not a decline in blue-collar jobs but a roll of the wheel from one type of blue-collar job to another—from assembly-line production to truck-driving and pallet-moving distribution, plus, for a while, construction.”… I concur, trade with China generated broad but diffuse benefits, principally through cheaper goods to consumers across a range of products, while the costs of the trade remained relatively narrow but deep….

China’s undercutting of neoliberalism also comes from its presentation of an alternative system of political economy with substantially more state involvement… Keynesian stimulus… industrial policy for favored firms and sectors…. I’m not suggesting that a world shifting away from neoliberalism will be moving more quickly to utopia…. As likely as not… we’ll fall deeper into morasses of identity-based violence, isolationism, beggar thy neighbor policies, and war…

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The passage is:

Things changed starting around 1870. Then we got the institutions for organization and research and the technologies—we got full globalization, the industrial research laboratory, and the modern corporation. These were the keys. These unlocked the gate that had previously kept humanity in dire poverty. The problem of making humanity rich could now be posed to the market economy, because it now had a solution.

Arthur Goldhammer has a withering critique of how the theme of the industrial research lab is developed—or, rather, left undeveloped in the book:

Given your emphasis on the importance of the "industrial research lab" in this period, you might have devoted more space to this theme. Examples would have been welcome, along with a deeper historical account of the evolving relationship between pure and applied research. World War II marked a turning point here, and I'm thinking not just of the Manhattan Project but also of the MIT Radiation Lab, Lawrence's lab at Berkeley, Bell Labs, etc. University science scaled up to industrial magnitude, while industry opened itself up to basic research as never before. Subsuming all this under the head of "industrial research lab" (and without differentiation across your lengthy period) doesn't quite do it justice. I could have done with fewer pages devoted to rudimentary solid-state physics and the doping of silicon and more on the sociological transformation of big science by postwar projects such as the SAGE radar system, early computer systems such as ENIAC and UNIVAC (which long predated integrated circuits), the development of FORTRAN, etc. The Edison/Tesla duality is not enough to capture the complexity of this nascent knowledge economy…

He is correct.

I wrote an email back to Art:

The only plea I can make is that the original very rough manuscript was twice as long (I am staring at various of its dismembered pieces as I write this), and throw myself upon the mercy of the court.

Yes, there is a draft of a chapter on the drive for European unity after World War II, starting with Jean Monnet showing up in de Gaulle’s goals office after the fall of France; a lot of talk about keeping the Americans in, the Russians out, and the Germans down; a deeper dive into the issues of Barry Eichengreen’s and my long-ago Marshall Plan paper, and Paul-Henri Spaak’s proposal to erect a 50-foot statue of Joe Stalin as the Architect of European Unity in front of the Berlaymont in Brussels.

Yes, the “varieties of capitalism” literature is shamefully neglected—Hall and Soskice, Esping-Anderson, and all their company. I feel particularly bad about this because Peter A. Hall was one of the two people who gave me my summa, and thus convinced me that this was the business I ought to enter, rather than heading for Wall Street.

Yes, my neglect of industrial research labs (and corporate organizations) after having highlighted them at the beginning is, I think, a major misstep. It was supposed to be corporations, IRLs, and globalization all falling into place as the last pieces of the necessary institutional configuration for Modern Economic Growth; MEG’s rake’s progress, and all its political-economic and sociological vicissitudes. But I could not assemble a Grand Narrative for a book with that thrust.

So I would up with von Hayek vs. Polanyi, with Keynes off whimpering in the corner, as my Grand Narrative because it was the least false one I could manage to execute.

But there are many other figures who ought to be as prominent in the book as Karl Polanyi and Friedrich von Hayek are:

• Karl Popper, Michael Polanyi, & Alasdair Macintyre on science and “rationality”

• Michael Polanyi, Vaclav Smil, & Davis Landes on science and technology

• David Landes, Alfred Chandler, and Peter Drucker on technology & the corporation

• Josef Schumpeter, Theodore Veblen, & Ronald Coase on corporations & industries

• Karl Popper, Walter Lippmann, & Thomas Dewey on hopes for rational self-government

• William Beveridge on the taming of inequality through public provision and wealth redistribution

• A.C. Pigou & John Maynard Keynes on light-fingered and soft-touch central planning as ways of aligning the imperatives of the market with the needs of society

There will, I hope, be another book—or an extended metaverse apology tour of extended web notes this fall…

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The passage:

No: [von Hayek’s] “The market giveth, the market taketh away; blessed be the name of the market” was not a stable principle around which to organize society and political economy. The only stable principle had to be some version of [Polanyi’s] “The market was made for man, not man for the market.” But who were the men who counted for whom the market should be made? And what version would be the best making? And how to resolve the squabbles over the answers to those questions?

As Arthur Goldhammer has pointed out to me, this really needs a reference to and some discussion of the “‘varieties of capitalism’ literature stemming from the seminal work of Hall and Soskice”. Plus more discussion of the evolving European Union as a “locus of the postwar praxis (as opposed to the intellectual history) of politics vs. markets” would strengthen the book.

See Peter Hall and David Soskice (2001): Varieties of Capitalism: The Institutional Foundations of Comparative Advantage (New York: Oxford University Press: 0199247749) <https://archive.org/details/varietiesofcapit0355unse>

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The passage:

Itō launched the First Sino-Japanese War in 1895. With eleven European-built and two Japanese-built warships, and with an army trained by a Prussian major, Jakob Meckel, Japan quickly won. The major Chinese base and fort of Dalian in Liaoning—Port Arthur—fell to a frontal Japanese assault in one day. Korea and Taiwan were grabbed as Japanese protectorates…

Dalian Is in Liaoning, Not Shandong.

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The passage is:

Dig into Friedman’s thesis that the Great Depression was a failure of government and not of market, and things become interesting. For how could you tell whether interest rates were too high, too low, or just right? According to Friedman, too-high interest rates would lead to high unemployment. Too-low interest rates would lead to high inflation. Just-right interest rates—those that corresponded to a “neutral” monetary policy—would keep the macroeconomy balanced and the economy smoothly growing. Thus theory became tautology…

Mark Skousen writes:

I'm dumbfounded by your claim that Milton Friedman wanted to "stabilize interest rates" (pp. 401-402).  Actually Friedman wanted to target the growth of the stock of money, not the price of money.  He wanted the Fed (central banks) to increase the money supply at a stable rate equal to the long-term economic growth rate, and to let interest rates find their own equilibrium.”

He is correct: the implication that Milton Friedman sought to stabilize interest rates is wrong. He sought a neutral monetary policy—in which interest rates, and much else, would be stable. What I was trying to get at was that when Friedman talks about focusing on the monetary base plus checking deposits—M2—as a quantity to be stabilized, this M2 is not a control variable but rather an intermediate target. It is a leading indicator of nominal spending, and valuable and important only to the extent that it is a reliable leading indicator. M2 is, in Friedman's schema, an immense help as a thing to watch in crafting a neutral monetary policy. Whenever Goodhart's Law arrived and roosted, and the correlation between M2 and future nominal spending broke down. Friedman threw away the M2 target and focused on the nominal spending path as an ex post indicator of whether monetary policy had been properly neutral. But too much of that a argument was left on the cutting room floor in the final compression of the ms. And so it makes the points only to someone, like me, who already understands what I am trying to say.

For a while in his career, Friedman relied on historical correlations for his claim that a “neutral” monetary policy could be made automatic. But as Charles Goodhart had warned him, the historical correlations broke down as soon as central banks started to try to rely on them as control mechanisms. See C. A. E. Goodhart, “Problems of Monetary Management: The UK Experience,” in Monetary Theory and Practice: The UK Experience, London: Palgrave Macmillan, 1984, 91–121. Friedman then took refuge in a “‘neutral’ is whatever works” position. See Timothy B. Lee, “Milton Friedman Would Be Pushing for Easy Money Today,” Forbes, June 1, 2012, <http://www.forbes.com/sites/timothylee/2012/06/01/milton-friedman-would-be-pushing-for-easy-money-today/?sh=76b918545b16>.

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The passage is:

Things changed starting around 1870. Then we got the institutions for organization and research and the technologies—we got full globalization, the industrial research laboratory, and the modern corporation. These were the keys. These unlocked the gate that had previously kept humanity in dire poverty. The problem of making humanity rich could now be posed to the market economy, because it now had a solution. On the other side of the gate, the trail to utopia came into view. And everything else good should have followed from that…

Nick S. of Unfogged <http://www.unfogged.com/archives/week_2022_11_06.html#018157> points out:

Given the list of three key changes in the organization of human and economic life (‘globalization, the industrial research lab, and the modern corporation’) there's minimal attention paid to the ways in which those shaped the power of government as well as the economy. Globalization is certainly political as well as technological and possibility of deglobalization is driven by political factors. The industrial research lab and corporation grew in tandem with increased state capacity. It struck me, as I was writing this summary, that the figure cited above -- that the British government was able to mobilize 1/3 the productive capacity of the country for the war effort -- is specific to the long 20th Century (quick googling makes me think the Civil War involved similar levels of mobilization but, I believe, prior to that state capacity was much more limited).

He is correct. The coming of the modern state with its organizational and regulatory capacity is a fourth major change around 1870, that I should not have omitted.

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The passage is:

Once German dreams of a swift victory were dashed, and everyone went to their trenches, the logic of the Prussian way of war—if you fail to win quickly, sue for peace—fell out of favor. The German officer corps’ adherence to Totenritt—a willingness to undertake a “death ride”—held sway, so that carrying out senseless orders to the best of one’s ability substituted for logic…

This is much too compressed, to put it politely, as has pointed out to me by Mossy Character, who snarked “news to Frederick II, among others” <http://www.unfogged.com/archives/comments_18157.html>. The “logic” was supposed to be: 1. Prussia has no natural defenses and a poor population. 2. Hence if it is going to win, it must win quickly. 3. Hence the Prussian Way of War—strike first, strike hard, strike by surprise, strike from an unexpected direction. 4. The logic of the Prussian Way of War is that you are going to lose a long war. 5. Therefore if you fail to win quickly, logic says sue for peace. 6. But that is not how the German army worked. And then the next sentence should begin with an “Instead…”

But none of that comes through in the first edition text.

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FIRST: Two Concepts of “Free Market”:

In his Free Market: The History of an Idea <https://www.amazon.com/dp/0465049702/> Jacob Soll fakes right, making me think I am going to read an appreciation of 20th century free-market thought:

Twentieth-century free-market thinkers… Friedrich Hayek to Milton Friedman… constituted a powerful, conservative force that foresaw the authoritarian and totalitarian dangers—on the left and the right—that lay ahead…

But no! He goes left! He brings down the hammer, in a way that would make Judah “The Hammer” son of Mattathias proud:

And yet, along with the great moral achievements and economic insights of free market thinkers came a very particular form of paranoia, ideological obsession, and myopia…. Twentieth-century orthodox free-market economists believed that pure individual desire and agency were the catalyst for all societal and economic good. In their eyes, any system that deviated from this view became suspect. It was not so much an academic position as an article of faith…

He brings down the hammer specifically on Friedrich von Hayek:

The Road to Serfdom would become the handbook of postwar free-market and libertarian economics… less a work of economic theory than a declaration of total libertarian faith…. With hindsight… the book stands out for its total lack of engagement with the realities of the postwar growth period and its fanatical vision of the state as a force of evil…

And:

Hayek saw market freedoms in a combative light, emerging from a struggle between good and evil. One either chose economic liberalism with no government, or one would be enslaved…. Hayek chose to forget that Hitler could neither have taken nor held power without the concerted support of German capitalists, who saw fascism as an attractive answer to trade unions, communism, and even social democracy…

I do understand. I, myself, see von Hayek as 40% Dr. Jekyll and 60% Dr. Hyde—great insights and very valid concerns, somehow married to a majority of crazypants views on macro, politics, and moral philosophy.

Soll’s book is a book that I very much wish that I had had when writing my Slouching Towards Utopia <bit.ly/3pP3Krk>, for he takes the von Hayek-Polanyi oppositional dialectic that I use as a major focus of my book, and projects it back past the Enlightenment and the Mediæval Era to the Classical Age of Cicero. It taught me a lot, and brought much that I had only dimly realized into focus.

Soll is 100% right in finding and stressing a great divide between what “free market” thought meant before and what it meant after 1900. There was a very large shift away from an earlier perspective traced by Soll, one in which the free market can work very well indeed when exchange is between individuals who are roughly on the same level with respect to their social power. In that view, “the free market” is only one arrow in a large quiver of alternative instruments of statecraft and human cooperation:

By contrast, twentieth-century free-marketeers saw the untrammeled market as both necessary and sufficient for… something. What was not clear. It did not seem to be any form of general human flourishing. Instead, it was, as I quoted above, in Soll’s judgment:

A very particular form of paranoia, ideological obsession, and myopia…

One way to think about this is that pre-1900 Free Marketeers wanted to free entry into the market—that people should not be bound to work for another who was their master in the sense of dominus, that people should not be prohibited from producing or selling on account of their social status, that the king should not sell monopolies. This then bled over into a concern that the king should not disproportionately tax commercial wealth in order to reward his friends, and that individual, small group, or collective entities should not themselves be allowed to constitute themselves as monopolies either.

This freedom to enter and participate in a market that was free to work was part of a general Enlightenment vision which, Soll writes, was a

vision of progress through benevolent moral discipline, education, radical science, and a worship of agriculture…

With Adam Smith being perhaps its foremost exponent. But this is not a “free market” in the sense of post1900 Free Marketeers. Indeed, the market of Adam Smith and his predecessors is a market that has to be carefully and successfully managed—not least in that the people who meet each other in the marketplace need to be on the same level, have comparable levels of social power. If not, then, as Karl Marx wrote, the market appears to be:

a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property and Bentham. Freedom, because both buyer and seller of a commodity… are constrained only by their own free will… contract as free agents… give legal expression to their common will… [to] exchange equivalent for equivalent… [as] each disposes only of what is his own… in accordance with the pre-established harmony of things… for the common weal and in the interest of all.

But in reality, Marx writes, in the market system of rich bourgeois and poor proletarian:

we… perceive a change in the physiognomy of our dramatis personae…. capitalist;… [and] labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own skin to market and has nothing to expect but — a tanning…

It was Alfred Marshall who soft-pedaled the income-distribution and social-power worries, and also pushed forward the idea that the market did not need government regulation, for it would and could regulate itself.

Alfred Marshall’s star pupil John Maynard Keynes disagreed. Keynes saw mammoth defects in the ends the market pursued as a result of unequal income distribution and the ability of the market to regulate itself and employ resources properly, with the principal resource misuse being the scandal of depressions and the result unemployment. Keynes, however, thought—hoped?—that these defects could be repaired easily, with the lightest-hand management of the economy possible. He saw that:

the outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes…

A market economy managed by his technocratic disciples would, first, attain and maintain full employment. Then even someone who owned only his own skin would have at least some social power when he brought his self to the market—for without the worker’s hands, eyes, and brains, expensive machinery would lie idle, rusting away. Yes, the worker had to find a job or starve. But in a constant full-employment economy the boss would have to find a worker or go bankrupt.

But, second, there would be more. The full-employment monetary policy that Keynes’s technocratic disciples would manage the economy to would be a very low-interest rate economy. That meant, Keynes thought, the euthanasia of the rentier: plutocrats would only be able to use their social power as property-owners to control affairs if they spent down their capital, and then they would cease to be plutocrats.

Keynes was thus a supporter of “free markets” in the older sense. As Soll notes:

in the 1920s, he warned of a battle between communism and individualistic laissez-faire, which laissez-faire had to win. But Keynes felt that there were holes in free market theory…

Chiefly the two I noted above. Thus the state would have to take “an even greater responsibility for directly organizing investment.”

In some ways, Milton Friedman bought Keynes’s argument about the inability of the economy to regulate itself. But Friedman thought that the central bank could do all the regulation and management needed. By defining whatever monetary policy achieved constant full employment as a “neutral” monetary policy that was be definition the opposite of government intervention, Friedman hoped to win a game of intellectual free-card-monte, in which what Keynes called government intervention, regulation, and management was redefined as the real hands-off.

This, I think, led to a lot of confusion.

Soll concludes his book:

Free individual action is essential to the dynamism of the market, but it alone does not guarantee the economy’s steady functioning…. We would do well… to return to… Cicero… [for] lessons… Wealth was only good, Cicero thought, insofar as it could be used to support constitutional government, civil peace, and decorum. More important to him than riches were the principles of living in harmony with nature, cultivating learning and friendship, and doing the hard work of ethical stewardship. Faith in the market alone will not save us, but hewing to these old virtues just might…

In short, be pragmatic: The market should be free to the extent and in the direction that such freedom leads to widely distributed prosperity, and wealth should be pursued not as an end in itself but a means to the political and societal good.

Should any of us disagree?

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Must-Read: Your Favorite DSGE Model Sucks:

This is a judgment on one of the intellectual communities I have been contributing to—or, rather, attempting largely unsuccessfully to contribute to—throughout my career. It is funny, in a brutal way. Or, perhaps, it is brutal, in a funny way:

Daniel J. McDonald & Cosma Rohilla Shalizi: Empirical Macroeconomics & DSGE Modeling in Statistical Perspective: ‘Daniel graduated…. Smets and Wouters (2007)… needed both a lot of programming time and a lot of computing time to churn through thousands of variable swaps and tens of thousands of fits to simulations. We both got busy with other things…. But what we can tell you now, with great assurance, is that:

1. Even if the Smets-Wouters model was completely correct about the structure of the economy, and it was given access to centuries of stationary data, it would predict very badly, and many "deep" parameters would remain very poorly estimated;

2. Swapping the series around randomly improves the fit a lot of the time, even when the results are substantive nonsense.

The bad news is that even if this model was right, we couldn't hope to actually estimate it; the good news is that the model can't be right, because it fits better when we tell it that consumption is really wages, inflation is really consumption, and output is really inflation…

Recognize that this DSGE model language has for a generation been how highbrow domestic macroeconomists (attempt to) communicate with one another.

One way to look at it is that DSGE models are members of the class of macroeconomic models of the domestic economy that are, as Chris Sims taught me now long ago, are sufficiently flexible that their structure places no restrictions on their forecasts at all. Their forecasts are thus those of VAR—vector autoregression—models, and fit as well or as poorly as VAR models fit. Their estimated structural parameters are whatever values are needed to, when processed into the reduced form, generate the best-fitting coefficients of the VAR. Beyond that role as proto-VAR coefficients, they are thus as close to being pure noise as can be found in this Fallen Sublunary Sphere.

Chris Sims originally made this as a critique of the “structural” models of the 1970s. But it applies to DSGE models as well.

There was one paragraph in McDonald and Shalizi that made me especially wince. It was at the end of their “replicating Smets-Wouters” section:

Table 1 presents the posterior mode [maximum likelihood estimate of the Smets-Wouters model parameters “from our simulated annealing method, which stochastically explores the likelihood surface in a principled manner”]. Note first that some of the parameter estimates are similar to those presented in Smets and Wouters (2007)… while others differ dramatically. However, comparing the likelihood of of our estimated parameters to those in Smets and Wouters (2007), our fit is significantly better. For our dataset, the penalized negative log likelihood of the parameters is 1145 compared to 1232…

In short, the McDonald-Shalizi computer found a parameter vector that the Smets-Wouters model thinks is 60,000,000,000,000,000,000,000,000,000,000,000,000 times as likely as the parameter vector found by the Smets-Wouters computer back in 2007, and that Smets-Wouters then reported as the “maximum likelihood” vector of the parameters.

“Our fit is significantly better”, indeed.

And then there is the feeding-the-model-data-generated-by-the-model-to-see-if-it-can-recovery-the-truth test:

Variability declines as the size of the training set increases, though not the average…. It improves markedly as the training set increases to about 400 observations (=100 years) but then plateaus…. As we get more and more data, we can not predict new data any better. This indicates one of three possibilities: (1) that with about 400 observations, we can estimate the parameters nearly perfectly, (2) that the model is poorly identified—some parameters will simply never be well estimated, but we can predict well anyway, or (3) the data are so highly correlated that the range of training observations we consider is far too small—we actually need millions of observations in order to see a meaningful decline in out-of-sample predictive performance….. The blue line in Figure 2 is the out-of-sample mean prediction error for the true parameters. The test error is not getting any closer… plateauing slightly above the baseline by about 400 training points. This seems to suggest that explanation (2) is accurate: even with more data, we will never be able to recover the true parameters, though we get some improvement in predictions relatively quickly…

Yes, we today have roughly 1,000 times more computer power at our disposal than we did in 2005. Yes, high-dimensional likelihood functions are positively Lovecraftian. But at least Claudius Ptolemy could fit his model and use it to accurately predict. And his structural parameters—the commonality of the epicycle vectors of the outer planets with the deferents of the inner planets and the sun, plus the sun’s lack of an epicycle—gave powerful clues to a better model.

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Oþer Things Þt Went Whizzing by…

Very Briefly Noted:

• Mark Lobel: ‘I asked @delong what turnaround would help most countries out of the financial crisis… over a cup of ☕️ 🫖 “the end of the war in Ukraine and a reversal of the grain and oil shocks”…

• Nouriel Roubini The Age of Megathreats: ‘For four decades after World War II, climate change and job-displacing artificial intelligence were not on anyone’s mind, and terms like "deglobalization" and "trade war" had no purchase. But now we are entering a new era that will more closely resemble the tumultuous and dark decades between 1914 and 1945…

• Aaron Sojourner: ‘Prime age (25-54 years old) employment to population ratio is an important measure of core labor market strength, omits people on the fringes of work. It fell 0.4 pp to 79.8%, back to its June level, a signal of weakening but monthly numbers are all noisy <https://t.co/pdA2U3DVci>…

• Benn Stancil: The emperor and his clothes: ‘It’s possible… that the train wreck… at Twitter works out. Twitter Blue may work; Twitter OnlyFans may work; Twitter for enterprise may work; the Vine reboot may work. Twitter Battle Pass, Twitter Achievements, Twitter Happy Hour, Twitter Streaks may work. Twitter for Tesla may work…. Twitter is being run by Silicon Valley’s unchecked id. Move fast and break things? Check…

• Michael Ignatieff: The Politics of Enemies…

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¶s:

Jamelle Bouie: The Attack on Paul Pelosi Has Unmasked the G.O.P.: ‘An important part of our politics has been the pretense that our leaders care about appearances, even as they fight to gain and hold power by any means necessary. Abraham Lincoln was both a bare-knuckled partisan brawler and a sagacious, broad-spirited political leader. So were many of our most revered and respected presidents, from Thomas Jefferson to Franklin Roosevelt and beyond. From the beginning, Americans saw virtue — whether real or feigned, sincere or performed — as a key ingredient in the practice of republican self-government…

Jordan Schneider & Irene Zhang”: US-China Chip War with the Chip Avengers: ‘What will the Biden administration's new export controls mean for the US and Chinese semiconductor industries as well as the future of the US-China relationship?… I assembled the Chips Avengers: Reva Goujon (Rhodium Group), Jay Goldberg (Digits to Dollars), Doug O'Laughlin (Fabricated Knowledge), and Martin Chorzempa (PIIE)…. China can produce 14-16nm logic chips. Biren can produce GPUs at these thresholds. YMTC can produce NAND at this threshold too. What's very interesting is that they did not set the thresholds at an aspirational level for China. They set them at levels that China already is able to do, and it's cutting off their ability to do it. The fact that China's already at this level tells you that the Biden administration was in a bit of a rush. They felt like they had to do this now.

Patrick Collison: CEO Patrick Collison's email to Stripe employees: ‘You might reasonably wonder whether Stripe’s leadership made some errors of judgment. We’d go further than that. In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important: (1) We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown. (2) We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in. We are going to correct these mistakes...

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