An Economic History of the (‘Long’) Twentieth Century – “Slouching Towards Utopia is a rise-and-fall epic—but it is better at depicting the rise than explaining the fall.”[1,2,3]
“Why, with such godlike powers to command nature and organize ourselves, have we done so little to build a truly human world, to approach within sight of any of our utopias?” DeLong asks in his final chapter, only to dodge an answer: “A new story, which needs a new grand narrative that we do not yet know, has begun.”
Brad DeLong tells his story of the 20th century – “The book therefore ends on an ominous note — humans are still deeply unsatisfied with their society, and will doubtless try to create new big political-economic ideas as a result. If history is any guide, this path will be fraught with danger.”
- The History of Economic History, Part II – “[Douglass North’s] efforts to develop a theory of institutions led him, with economic history itself in tow, to study the truly fascinating questions in history: why and how complex societies emerge, change over time, and differ in wealth and power today.”[4,5,6]
- How Much More Economic Growth Can the Planet Sustain? [ungated] – “How is it that economic theory got itself into a condition in which it doesn’t even count the natural world as an important part of our economic wealth?”
- We don’t have a hundred biases, we have the wrong model – “Behavioral economics has identified dozens of cognitive biases that stop us from acting ‘rationally’. But instead of building up a messier and messier picture of human behavior, we need a new model.”
- We need a new philosophy of progress – “We have been naive about progress in the past, but that doesn’t mean we have to be cynical about progress in the future. Progress is not inevitable but that simply means it’s up to us. Are we up for the challenge?”
The World After Capital [transcript] – WENGER: “We went from forager to agrarian, so from food scarcity to land scarcity, then we went from land scarcity to capital scarcity. And now, we’re going from capital scarcity to attentional scarcity.”
RITHOLTZ: So you say something about these transitions that really jarred me. Previous transitions like agriculture emerged over thousands of years and was incredibly violent. Industrial Age lasted over hundreds of years, and also involved lots of violence and bloody revolutions, and two World Wars, which raises the obvious question, what sort of violence is the next transition based on attention scarcity potentially going to involve?
WENGER: Well, at the moment, the leading candidate is the climate crisis. […]
WENGER: Yes. So we know all of this. And here’s the interesting thing. When we went from the agrarian age to the industrial age, we didn’t get rid of agriculture. This agriculture today, right, we all eat food that’s grown in agriculture. But what we did is we shrunk how much human attention is required to do agriculture, and we took it from being like 80% of human attention to like sub 10%.
RITHOLTZ: It’s less than 2% in United States. It’s tiny.
WENGER: So what I want to do is, let’s do the same with the rest of the economic sphere. I’m not an anti-capitalist. I’m not a degrowth. Person. I’m not suggesting we should get rid of markets. I’m just saying we should compress market-based activity from absorbing much of human attention to absorbing maybe 30% of human attention, and we should free the rest up to work on these incredibly important thing. Some of them are threats, and some of them are opportunities, right, opportunity to cure cancer, opportunity to create incredible wildlife habitats, restore those wildlife habitats, opportunity to travel to space. I mean, all these opportunities that we’re not paying attention to because they’re not — again, they’re not really market price based and can’t be market price based. There’s just no prices for them.
To Fix Tech, Democracy Needs to Grow Up [ungated] – “Calls to ‘democratize technology’ ring hollow when both systems seem to be failing. The key is realizing that democracy is not yet in its final form.”
There is growing recognition that rapid technology development is producing society-scale risks: state and private surveillance, widespread labor automation, ascending monopoly and oligopoly power, stagnant productivity growth, algorithmic discrimination, and the catastrophic risks posed by advances in fields like AI and biotechnology. Less often discussed, but in my view no less important, is the loss of potential advances that lack short-term or market-legible benefits. These include vaccine development for emerging diseases and open source platforms for basic digital affordances like identity and communication.
At the same time, as democracies falter in the face of complex global challenges, citizens (and increasingly, elected leaders) around the world are losing trust in democratic processes and are being swayed by autocratic alternatives. Nation-state democracies are, to varying degrees, beset by gridlock and hyper-partisanship, little accountability to the popular will, inefficiency, flagging state capacity, inability to keep up with emerging technologies, and corporate capture. While smaller-scale democratic experiments are growing, locally and globally, they remain far too fractured to handle consequential governance decisions at scale.
This puts us in a bind. Clearly, we could be doing a better job directing the development of technology towards collective human flourishing—this may be one of the greatest challenges of our time. […]
Imagine a world of abundant public goods, funded via consortium-based taxes coupled with active participation in investment based on shared need. Right now, many projects with incredible social-value returns, from transportation infrastructure to small businesses that would benefit many in a community, can languish in an innovation valley of death because they’re not well set up for pure public funding, and yet are misaligned with the incentives of private capital. CI mechanisms for pooled funding could address this gap, redirecting state and philanthropic resources into financially supporting these projects in proportion to their deemed benefit to a given community, and dynamically reallocating when necessary. This could better direct scientific and research funding, creating massive positive externalities not well incentivized in the current system, or direct public funding for industrial policy (instead of direct subsidies, which can miss necessary local information or be prone to capture and cronyism).
Or imagine a world of CI-enabled firms prioritizing collective provision at scale through effective economic democracy. Advanced CI mechanisms could expand collective input and ownership beyond voice in a single workplace, or a vote every four years. Imagine networks of production run with input from local and global stakeholders, using transaction fees as taxlike sources of funding for long-term investment—radically updating the regulated monopoly. Or AI assistants helping communities navigate value trade-offs, scaling up commons-based governance practices while computing a range of quantitative and qualitative measures to optimize—instead of just maximizing share price. Or platforms that enable individuals and communities to track the effects of new technologies, internalizing externalities from environmental degradation to pandemic risk.
Of course, getting there won’t be easy—changing power structures never is. Scholars from John Dewey to Helene Landemore have emphasized the material changes and conditions of “education and freedom”—from access to basic necessities to economic security—needed for democracies to truly enable collective intelligence. Incentive-alignment work, political shifts, base-building, and public advocacy are essential for conveying the urgency of shifting transformative technology toward collective intelligence and input.
- @ShannonVallor: “The saddest thing for me about modern tech’s long spiral into user manipulation and surveillance is how it has just slowly killed off the joy that people like me used to feel about new tech.”
- Property Is Only Another Name for Monopoly – “The existing system of private property interferes with allocative efficiency by giving owners the power to hold out for excessive prices. We propose a remedy in the form of a tax on property, based on the value self-assessed by its owner at intervals, along with a requirement that the owner sell the property to any third party willing to pay a price equal to the self-assessed value.”[9,10]
- Plural Money, Socially-Provided Goods, and the Principal-Agent Problem – “Money is an economic lubricant: it helps goods and services slip and slide toward where they can be used more efficiently. Without lubricant, things get ‘stuck’. They don’t go where they’re needed most, and value is wasted.”
- Ethereum’s Founder on What Crypto Can — and Can’t — Do [ungated] – “Vitalik Buterin explains digital currency’s potential to transform our world.”
- Deep Dive on DeSoc- Puja Ohlhaver and Vitalik Buterin – “A permissioning system that is more pro-social and can be built from the bottom up to support governance models that are not plutocratic but democratic.”[12,13]
- Citizens’ Assemblies Are Upgrading Democracy: Fair Algorithms Are Part of the Program – “Math helps to randomly select the fairest citizens’ assemblies since antiquity.”
- What is not separable from how – “In social affairs, what should be done cannot be separated from how we choose to do it. A policy that would succeed and be widely lauded if chosen in one manner might crash and burn if chosen in a different way. This is a problem for technocracy, for the notion that academics and think-tankers can work out the best policy, persuade politicians via white papers and working groups to implement it, then watch the public enjoy virtuous outcomes. Even when (much more rarely than proponents claim) research is good and reliable, social affairs just do not work this way.”
- Liberalism vs democracy – “I am still a strong enthusiast of liberal democracy, and would argue that ‘illiberal democracy’ in practice collapses to ugly autocracy. But we have to continually work to reconcile these ideas, liberal and democracy. They are not mutually reinforcing. Quite the contrary. Respecting and celebrating individual choice while also tethering broad outcomes to the interests and (evolving) values of the demos is, I think, achievable. But it is not automatic or preordained. We have to be clever, and much more careful than we have been, if we hope to mitigate and manage the contradictions. Who knew that preserving the end of history would demand from us so much agility?”
- Immigration, exploitation, and social democracy – “We began with a simple, amoral model of an immigrant, a pair of hands attached to a mouth, and a very economistic view of a polity as an aggregation of people seeking material value. We might add to our model of an immigrant a soul. An immigrant is not a mere object that produces surplus or costs, but a subject whose welfare we care about and whose fellowship we enjoy. Our polities are not mere aggregates of selfish people but also nations, groups that seek to thrive together and forge a common future.”
- A fun conversation with Audrey Tang x Glen Weyl [transcript] – “Our actions come to affect each other in different ways, and therefore the necessary governance structures, change with the changes in technology. Yet, the borders of nation state don’t, or at least don’t much.”[16,17]
- Plurality: Technology for Collaborative Diversity and Democracy – “AI aims to automate away human participation, centralizing power, strengthening autocracies, and undermining the middle class. Speculative cryptocurrencies, addictive social media and escapist ‘metaverses’ have undermined the social fabric, reinforced social divisions, spread an infodemic and proliferated criminality. It is little surprise, then, that the countries that have invested in these technologies see democracy and technology as enemies.”
- When civil society is nonexistent — or replaced by the state – “For many years, I struggled to come up with a coherent explanation for the power, the reach, and the policy discretion of the Chinese state. There is coercion, ideological indoctrination, and probably a fair amount of societal consent as well.”
- Audrey Tang: Can Taiwan forge its own path? [transcript] – “Zeinab Badawi is in Taiwan to speak to Audrey Tang, the country’s digital minister. The Taipei government says it stands for democracy in the face of increasing belligerence from China, which claims the self-governed island as part of its territory. Can Taiwan really forge its own path?”
- @audreyt: “We’re at a watershed moment in history. The onus is on each & every one of us to recognize the magnitude of this challenge & act. Democracy in all its forms still is the best way of safeguarding freedom for generations to come.”
Yet, sometimes using money backfires, causing goods to be distributed less efficiently. Consider public education. Giving citizens cash, instead of schools, would less efficiently achieve the important public objective of education. Individuals might, for example, misspend the money, or fail to coordinate around supporting efficient, broadly shared institutions. The same logic holds for roads, telecommunications, and other socially-provided goods that support broadly shared goals. […] If the government addresses these differences by technocratically deciding who needs what, it risks huge mistakes. Even if it avoids mistakes, it makes itself dangerously powerful. And now we’re back to money and markets: this is why they can sometimes be helpful. They aggregate information about where good education and roads are most hotly needed – without directly concentrating power in the government. In short, distributions of goods by decree, or by market, are inefficient and worrisome in different ways. […] This opens up new avenues for issuing local, egalitarian, purpose-limited currencies to help with the allocation of socially-provided goods. These special currencies could help manage access to everything from public sports facilities to carpool lanes and even schools. Even more excitingly, local currencies could go beyond those traditionally public cases, becoming accepted by certain local vendors, and opening up to limited forms of exchange with other, similar new local currencies. In some early writings, we’ve started to explore what this pluralistic system of money might look like.
We’ve been doing the submerged state a lot, and it’s brought us to the crisis of democracy that we’re in. In aggregate our skein of tax expenditures form a misshapen blob from which the broad public feels excluded and alienated, but each one was somebody’s idea of smart policy. The best lobbyists have a talent for persuading themselves that the interests of their employers and those of the public are happily aligned. If only the public could be made to understand. Of course you are different. There is no alternative to an effective state, which both makes good choices and makes them via institutions that recruit broad legitimacy for those choices, within which members of the public feel a sense of collective agency. If you are about getting policy right, good on you. (Really!) But it isn’t enough. We need a better state.
And so [John Dewey in his 1927 book “The Public and its Problems”] argues that what we need is the constant emergent of what, what he calls new publics, which will be these groups of people that will come to govern themselves in relationship to this set of interactions that they have. He describes the figure of what he calls an expert, which kind of corresponds to what Balaji calls a founder, but the expert is a bit different. […] because Dewey’s concept of an expert is not a king or ruler. It’s a convener. It’s a convener of a new polity. So the crucial role of the expert is to let a polity see itself, see the interactions that it’s having, and therefore come into a new form of democratic governance that didn’t exist before because that set of people didn’t recognize the interactions they were having with each other. […] And I think that the Internet was originally imagined by people like J.C.R. Licklider, as a foundation for that kind of what I would call a network society where people are part of multiple intersecting emergent publics. Now, he only did it for communication protocol, so it was very first step. But I think what we’re all working towards is creating that kind of a network society, not a world where everyone choose their favorite little statelet and is completely committed to that. But where everyone participates in many of these emergent democratic polities that are constantly emerging and shifting and I think that that is the right vision of how we need to imagine the way in which networks will transform governments.
But it is not too late to change paths: we can invest in technologies that establish digital human rights, empower pluralism and flourish in democratic societies, allowing them to outperform authoritarianism and hyper-capitalism. We can invest to give every person an inalienable right to digital personhood with a new generation of decentralized identity (DID) technologies that empower every person to travel, transact, conduct business, and participate in democratic communities free from centralized surveillance. We can make freedom of association real in the digital world with community-managed and accountable social networks and ledgers that form the town halls and public squares of the future while bridging the growing divides between groups. We can secure digital property rights by creating the public markets and main streets of the future with cryptographic technologies for the secure and privacy-preserving sharing of data, computation, and storage across peers, free from the control of platform monopolists. We can secure the right to commerce with government-supported, privacy-preserving, internationally interoperable digital currencies. And we can enable every citizen to access these rights by making high speed internet a human right and digital competence education core to public school curricula. Securing these fundamental digital human rights makes pluralism in the digital world not just possible, but natural. In Taiwan, the ideographic characters for “digital” and “plural” are the same: 數位. The experience there and in similar ecosystems has shown how these foundations, even in nascent form, promotes flourishing democracy.[20,21] Secure and private identities allow citizens to participate in thoughtful deliberations and reasoned compromise, as in vTaiwan, without facing attacks from trolls and bots. Private data sharing allows neighborhoods and communities to provide services (from pollution monitoring to mask availability maps) for themselves rather relying on proprietary platforms. Open and reliable payments allow creative forms of crowdfunding to support shared goods without heavy-handed bureaucracies. Peer-to-peer reputation systems empower civil society to combat misinformation, often with humor, while maintaining vibrant and open speech.
Keju [the civil service exam system] had a deep penetration both cross-sectionally in society and across time in history. It was all encompassing, laying claims to time, efforts and cognitive investments of a significant swath of Chinese population. It was incubatory of values, norms, and cognitions, therefore impacting ideology and epistemology of Chinese minds. It was a state institution designed to augment the power and the capabilities of the state. Directly, the state monopolized the very best human capital; indirectly, the state deprived society access to talent and preempted organized religion, commerce, and intelligentsia. The Chinese state in history and today is an imprinted version of this Keju system. Chinese state is strong because it reigns without a society.
I think all the major parties, including the DPP, the Democratic Progressive Party you mentioned, in the parliament, reject authoritarian expansionism. When we look at Hong Kong, the so-called “one country two systems” has turned into so called “only patriots can rule Hong Kong.” So I think we all reject that. […] So our point is that democracy can deliver — if it becomes more democratic, so that everybody can participate. You mentioned Chiang Kai-shek’s relocation [laughs] of the ROC government to Taiwan in the ’40s. At the time, there’s very — like, people with very different life experiences suddenly having to coexist together. My own grandma is a local Taiwanese who studied Japanese and my grandpa comes from Szechuan. So in my family, I understand the need to collaborate across diversity. Today, Taiwan is home to, like, 20 national languages and many different ethnic people. So the point I’m making is that democracy must build collaboration across diversity, and that’s the way we’re employing digital technologies to do.
Introducing Power-Sharing Liberalism – “The simple fact of the matter is that the world has never built a multiethnic democracy in which no particular ethnic group is in the majority and where political equality, social equality and economies that empower all have been achieved.”[25,26]
I want to live in a world where my right to shape my own life and to contribute to shaping the life of my community is recognized. Where elites don’t patronize and condescend to me. Where public representatives are responsive to and respectful of me and look to act on the basis of shared values with techniques of no-blame problem-solving. Where getting the health care I need is simple and affordable, and my choices for my health and well-being are respected. Where costs of housing and energy are low. Where good, family-sustaining jobs are abundant, and everyone has access to them. Where the economy is dynamic and inclusive and wealth-building is open to all. Where the air and water are clean, the climate hospitable, and our kids safe. Where I can say I love my country without being called racist or an Uncle Tom. Where my country is strong in the world because we have strong bonds among us at home. And where everyone, regardless of background and identity and despite our oppression-stained history, now has these things.
We live in dizzying times. To meet our moment, we have to bring the same intentionality to redesigning and renovating our institutions now in the 21st century as was brought to bear in the 18th century. We are founders. That is what this dizzying feeling means.
- Nima Arkani-Hamed: The End of Space-Time – “I’m not guaranteeing that if we understand what space time is more fundamentally that in 100 or 200 years we’ll have some major technological breakthrough, but I am guaranteeing that the only access we have to power and magic and mystery and awe that’s vastly beyond the reach of any individual human being is out there in the universe and the only way that we can access it is by studying it.”
- The big idea: why relationships are the key to existence – “From subatomic particles to human beings, interaction is what shapes reality.”
- Reflecting on a Possible Quadratic Wormhole Between Quantum Mechanics and Plurality – “Weyl et al.  has been exploring, under the banner of ‘Plurality’, the formal duality between individuals and groups (e.g. how each can be modeled as the intersection of the other) as a technological foundation for a ‘network society’ as envisioned by social thinkers like Simmel  and Dewey .”
A well-known computationally hard problem is economic planning [Deng et al., 2003, Shalizi, 2012]; in fact, one of the first conjectures about computational complexity regarded the difficulty of computing economic equilibrium [von Mises, 1920]. To the extent that QF and QF-like systems are able to cut the Gordian knots of pluralistic calculation, the demands on them will grow. At full scale, computing optimal levels for funding of public goods would involve billions of individuals (and organizations, and organizations of organizations, …) and need to discover the joint optima for hundreds of millions of overlapping projects shared by a disorderly labyrinth of interests. We expect what was originally a short-cut will eventually become a clogged superhighway. That would be QF’s mark of success. But QCs may make success less painful. QCs are a rising, if still unproven, technology based on the intrinsic parallelism of quantum physics. Quantum states are linear combinations (“superpositions”) of eigenstates each of which can encode a mathematical function value, or in some cases observed data. Superposition allows the entire function to be manipulated in a single step. This is the power. The accompanying weakness is reading out detailed information from the encoded function. In some cases, such as Shor ’s factoring algorithm, the difficulty is overcome by a dexterous use of the Fourier transform within the quantum context. The promise of quantum computing varies across problem sets. Where quantum computing can shine is where the calculational bottle neck can be massaged into a step that quantum physics naturally does anyway. The Born rule is the prime example of what physics does: It takes a bunch of amplitudes, adds them, and then outputs (the absolute value of) the square. Curiously, and marvelously, QF also asks the computer to add up a long list of weighted contributions and square them. So, if this step is, indeed, the bottleneck; quantum computers may decongest our superhighway. A word of caution is in order. Loading data into a quantum wave function will likely take time proportional to the size of the data set so much of the quantum advantage is burned when manipulation of actual classical data is involved. However, we believe that most of the computational effort will be spent normalizing models. For this task it is likely that suitable test data can be generated in superposition restoring the quantum advantage. While it is presently difficult to see though the challenges and countervailing stratagems, application of QC to QF is an intriguing possibility. In fact, this line of reasoning might offer a critique of the argument that large-scale “artificial intelligence” (AI) systems conceived of as unitary agents (as in Bostrom ) “are the future”: the argument that by overcoming the frictions naturally arising in pluralist systems, such unitary architectures will always asymptotically outperform “messier” architectures. This claim has always lacked empirical grounding: why, in this case, has biological and social evolution not pointed in this direction? In fact, the currently dominant model of computation usually labeled as AI (primarily neural networks) features tremendous diversity and complexity internally (billions of nodes, each representing objects at different levels of abstractions, often running in parallel on highly distributed systems). The line of reasoning in the previous paragraphs further suggests that economically efficient systems running of quantum computers could exhibit plurality rather than singularity.