Saving globalization’s losers

This boy is Ignorance. This girl is Want. Beware them both,
and all of their degree, but most of all beware this boy,
for on his brow I see that written which is Doom, unless the
writing be erased.   — Charles Dickens, “A Christmas Carol”

America is witnessing the consequences of a failure to educate and retrain globalization’s losers.  For 25 years, the globalists, including myself, have presumed that technology and trade will eventually make everyone better off.  It’s taking too long, and the natives are restless.  Americans without the right kind of education, increasingly unemployable in a world of low-wage offshore manufacturing and low-skill illegal immigration, are rebelling.

This, more than anything else, is why Trump won.  As his administration appears to go down in flames, don’t be too sure that we’ve seen the end of the forces that unleashed him.  One charlatan may go, but the basic problem is not addressed.

In designing policy, we must first understand that globalization is inevitable, because it is driven by technology, not policy.  Globalization has been under way, slowly but inexorably, throughout recorded history.  Horses and carts allowed regional trade, which created larger economic regions.  Then shipping.  Then canals.  Then rail.  Then telegraph.  Then phone.  Then superhighways.  Then the Web.  Each step increased the size, and lowered the transaction costs, of trade areas.

Larger trade areas have always made everyone better off on average.  This comes straight from Adam Smith:  the bigger the trade region, the greater the economies of scale for a given specialization, hence higher productivity than otherwise would be possible.  This has always been true, and will continue to be true.  It’s an arithmetic truism.

But larger trade areas don’t make every individual better off.  If you’re uncompetitive, you get whacked.  The US, and especially Clinton-era Democrats, gambled for a quarter-century that globalization would eventually make everyone better off.  It hasn’t happened yet.  That’s what brought the Trump/Sanders rebellions.

Unfortunately, both Trump and Sanders have the wrong answer:  retreat.  Both mistakenly think of globalization as a policy choice, rather than a technological inevitability.  Withdrawing from a large trade area would only ensure the US is left behind in future trade-driven prosperity.

The only thing that could save us from more Trumps and Sanderses:  access to free Web-based education.  Huge shortages exist in skill sets that can be learned online for free.  Making those skills even a little more accessible to globalization’s losers could make a huge difference politically.

What kind of accessibility?

  • Universal internet access.  Just as the Rural Electrification Act in the 1930s brought Kentucky and Tennessee into the industrial age, a Rural Webification Act might bring them into the internet age.  Computers are already cheap:  $100 will buy you enough computing power to do real work.  The roadblock is the internet service provider:  $80/mo for decent bandwidth is an insurmountable barrier for a poor family.  But imagine if someone demonstrating an income under $40k could get 1Mbps internet for $10/mo.  It could permanently transform his fortunes, at low cost to the rest of us.
  • Road map to skill shortages and free resources.  How do you know where to start? or what to study?  There are endless online resources to learn, for example, Ruby on Rails coding — but to begin, you need to know, first, that Rails coders are in tremendous shortage, and, second, where to find the free online resources to learn Rails coding.  Government and charitable foundations could provide this road map.
  • Awaken globalist American charitable foundations to an existential threat. For all their brilliance at providing the greatest good to the greatest number worldwide, groups like the Gates Foundation seem not to appreciate that they cannot function, nor even survive, unless the United States remains politically stable and engaged with the world.  Thus it is in their existential self-interest to participate in the rescue of globalization’s losers.

Notice what I’m not advocating:  universal income, trade barriers, immigration barriers.  These are all forms of retreat, and should be viewed with skepticism.

I’m also not advocating for “free college,” which is a high-cost, uncertain-benefit misapplication of archaic forms of general education to address the narrow, specific skill shortages, learnable for free, that would most rapidly improve the fortunes of globalization’s losers.  A degree in English remains socially useful as ever, and classroom debate is as enriching as ever.  However,  on average, it will not reliably improve the fortunes of Pennsylvania’s urban unemployed at minimum cost.

The highest-leverage solution is to point people to free sources of useful skills, and give them just enough resources to access them.  It’s the lowest-cost, highest-benefit approach, and we should maintain laser focus on it.

Our crazy, undemocratic immigration policy

US immigration policy is deeply confused.  Neither party thinks clearly about it, and as a result, laws have gone unenforced for decades, corroding the integrity of our rule of law.

Democrats, traditionally the party of labor, would once have opposed low-skill immigration:  it brings in ultra-low-cost labor, weakens unions, and ultimately hollows out the traditional base.  We’ve watched that hollowing for decades.  Yet Dems have mostly wanted to go easy on illegal low-skill immigration, partly for fear of offending constituencies, and partly because of a well-founded belief that free trade and loose immigration will eventually make most Americans better off.  The Democratic party has been staunchly globalist for 25 years, and they’re not wrong.  But they haven’t acknowledged, nor taken decisive action to mitigate, the consequences for their traditional labor base.  The strain is showing.

Meanwhile, traditional pro-business Republicans should logically support unskilled immigration, because it brings low wages, making everything cheaper to produce.  Yet they generally oppose it — partly, it seems, out of simple xenophobia.  The GOP has pandered to xenophobes for some time, and naturally this won’t be publicly admitted either.

Result:  the two parties are not just unable to hammer out a compromise they can stick to, but unable even to openly acknowledge their own de facto platforms to their own constituents.

For lack of openness and compromise, we are left with laws on the books we don’t actively enforce.  That’s a failure of democracy, and corrosive to the rule of law.

What laws are not enforced?  The simplest example is that it is a crime to be in this country without permission.  We’ve let this slide so long that we almost forget.  We begin to draw a mental distinction between “in the country for 10 years without permission,” and “actual crimes.”  But there is no such distinction in law.  Illegal immigration is illegal.

This is true in every country.  If I drove to Mexico and stayed there for a year with no visa, I would be in that country illegally.  That is a crime.  El Policía Federal could arrest and deport me. Would it become less a crime if I stayed there 10 years, learned fluent Spanish, and obeyed all other Mexican laws?  No.  If anything, would become more a crime, because I had stayed there illegally for longer. This is obvious. Yet in the US, municipalities often direct police not to enforce this law.  The years turn into decades, and we begin to forget what is legal and what is illegal.  Dangerous precedent.

We rationalize this lack of enforcement because it would be cruel to deport someone who has already built a life here — or, even crueler, to deport someone to who came here as a child, and may know nothing of their legal home country or language.  It’s true.  That would be cruel.

But it’s important to understand that this cruelty is not caused by suddenly enforcing the law.  It is caused, instead, by the systemic failure to enforce the law, for decades, allowing lives to be built in the US outside the rule of law.  This is a fundamentally shady way of operating, anathema to the rules-based approach that made the US successful in the first place.

The only non-shady way to operate is to legislate a policy we are prepared to enforce, and actually enforce it.  That requires a process of open legislative debate and compromise.

Which brings up the second point:  we got to here by a failure of democracy.

To reach a policy compromise on immigration, Republicans and Democrats would first have to openly reconcile their own platforms with the interests of their constituencies.  This reconciliation been so long in coming that it feels foreign.

For example, one thing does make sense about the surprise Trump victory:  his opposition to illegal unskilled immigration and manufacturing imports, right or wrong, was popular with unskilled men, whose jobs are most at risk.  Traditional union Democrats, abandoned by a globalist Democratic Party that offered no solutions to their plight, defected to Trump.  Yes, there are racists and xenophobes out there too, but that would not explain the suddenness of the defection.  The logical explanation is that unskilled men finally found a candidate who claimed he would eliminate their toughest competition in the unskilled labor market.

When Trump proposes to enthusiastically enforce existing law, he puts Democrats and Republicans alike in an untenable position.  He is calling them out for failing to compromise and enforce.  What possible counterargument is there?  “No, we will continue to let municipalities ignore existing law, fail to produce laws we can stick to, and fail to confess our own party platforms.”  Checkmate.  It is ironic that the US president most likely to undermine the rule of law has gotten this one thing right, even if by accident.

Dems in particular are suffering from a failure to be open about their pro-trade, pro-immigration globalism, and to offer real alternatives for Americans who are left behind.  Coming clean about this, and offering help to globalization’s losers, would be a first step to real legislative compromise, which could then be more enthusiastically enforced on the ground.  This would then restore the rule of law that brought America so far.

Later today, I’ll post a potential platform to help those left behind by globalization.

Tech and the new generation gap

The “fewer, nicer” credo — elegant simplicity, few assets — is partly generational.  People born before 1960 simply do not get it.  Like past generation gaps, this is driven by changes in tech.

1960s:  the Generation Gap was essentially “before pills” and “after pills.”  After World War II, changes in technology rendered venereal diseases curable, and pregnancy avoidable.  People who reached puberty after about 1960 then simply acted on human instinct, unrestrained by a millennia-old social rule, “don’t commit adultery,” that suddenly carried no real consequences.  Older people, acting on the old social rules out of habit rather than rationale, were shocked.

2017:  here we go again.  The mobile internet has turned old assumptions upside down.  For any type of knowledge work, you can now live and work anywhere you can find high-speed internet.  So-called “millennials” are simply responding to this new landscape of capabilities and constraints.

Houses and cars look like boat anchors, limiting flexibility and mobility.  Luxury goods in particular are unmasked:  while aesthetics still have value, luxuries are in effect much more expensive than before, because they reduce mobility.  Fixed offices have less utility when you can work and collaborate from anywhere.  Landlines, checkbooks, bank branches, cable TV — there is a very long list of things that suddenly don’t make sense in the modern technological landscape.

And people born before about 1960, or even 1965, simply do not get it.  Since most politicians are on the wrong side of that divide, they are unable to forge policy that makes sense in today’s conditions.

 

Duh. Charisma wins elections

Surprisingly, six weeks after the 2016 US presidential upset, some HRC supporters still don’t accept that she lost simply because most people dislike her.

Don’t misunderstand. I voted for HRC. Easy decision. I was surprised she lost, but shouldn’t have been.

Charismatic politicians win. It’s not partisan to say so. Trump entertained crowds. HRC didn’t.

Yes, the Russians hacked the election. Yes, there was fake news. Yes, unskilled workers have been abandoned by tech and globalization.

But the simple, obvious root problem is that according to polls, basically everyone hates HRC. The Democrats ran the most unpopular presidential candidate in US history. Unforced error. They did that all by themselves.

Had DNC run anyone even slightly more likable, they would almost certainly have won, Russians and fake news notwithstanding. Biden would have won. Dean would have won. There are a dozen candidates that would have made mincemeat of Trump.

That’s the lesson. Mystifying that career political operatives could have missed it, and still deny it.

Have fewer secrets

Summary:  the trend toward less information security is irreversible.  The best response for democracies, and their constituents, is simply to have fewer secrets.  Doing so would reveal a hidden advantage of democracies over autocracies.

Recent privacy-related embarrassments — Clinton campaign email leaks, Trump video, Wikileaks, Snowden, Russian disinformation campaigns, and private fundraising speeches leaked to the public  — are all manifestations of one simple asymmetry.

Stealing digital information is vastly cheaper than protecting it.  The feds can spend billions on security, yet remain vulnerable to a single whistleblower or foreign agent posting gigabytes of secrets with little effort.  This will not change;  in fact, the asymmetry is growing.

People born before 1965 have trouble accepting this is an irreversible new normal, enforced by the economic and technological landscape.  The Clinton/Trump generation, aged about 70, simply fails to grasp it, dumbly shocked again and again with each new leak, flailing wildly, throwing more and more resources at trying to restore a secrecy that can no longer exist.

For democracies, though, this is a good thing, not a bad thing.  Embracing a lack of privacy exposes the strengths of democracies, and the weaknesses of autocratic leaders, who cannot follow suit without losing power.

Instead of doubling down on secrecy, as Clinton, Comey and other people born before 1965 keep doing to their detriment, we should go the opposite direction:  government could communicate mainly by Twitter or Slack, making communications as public as possible.

This leaves Russia and China with far fewer useful hack targets, and enforces good behavior within our own government.

At the same time, it renders the governments of Russia and China nakedly vulnerable.  Imagine if the U.S. announced it will acquire and leak all the internal government communications of any nation that employs information attacks against the U.S.  Authoritarian nations have no counter-move to this.  We can survive publicity.  They can’t.  It’s a weakness that can be exploited.

Under this plan, fixing Twitter becomes important.  But it could be improved with greater openness.  For example, what if it cost a flat rate of 50 cents per year to have permission to tweet?  Not per tweet, just a flat 50 cents a year.  And only one Twitter account allowed per credit card.  Twitter would then have a valid billing address for anyone tweeting.  Trolls, bots, Russian intel, terrorist recruiting, and most fraud would become much harder.  Twitter would be smaller, but more civil and more reliable.  Openness wins again.

 

 

Escaping the cult of sunscreen

Intelligent choices come from comparing the costs vs. benefits of all known alternatives, and choosing the one alternative with the best cost/benefit ratio.

Unfortunately, Americans often try instead to avoid any risk, no matter how small, at any cost, no matter how high.  This is why our healthcare is so expensive.  It’s also why we receive nutty proposals like the one I got today from the local high school.

Today, our child’s high school sent a bulletin recommending all parents force their children to wear sunscreen at all times during school hours, to prevent skin cancer.  Is that smart?  Let’s examine the costs and benefits, and compare them to alternatives.

  • For practical purposes, melanoma is the skin cancer that kills you, and hence the one worth focusing on.
  • Over 95% of melanomas occur in people with blue or green eyes.  Our high school is majority Asian;  less than 5% of students, or fewer than 175 people, have blue/green eyes.
  • Annual incidence of melanoma among non-Caucasians is less than 1 in 25,000.
  • Incidents usually occur after decades of exposure, but let’s say 10 years.
  • Skin cancer is proportional to sun exposure, occurring mostly in people who spend hours a day outdoors with no protection.
  • Our students spend between 0.5 and 1.5 school hours outdoors, depending on whether they have physical education class.  Students take an average of 2 years of PE, so over their four years, average daily exposure per student, per school day is about 1 hour.
  • Skin cancer is far more associated with episodes of sunburn than with long-term, low-level exposure.  Almost no one, other than blue-eyed people, can become sunburned by 1 hour of incidental sun exposure.
  • Sunscreen costs $15 a bottle.  Bottles last no more than two weeks if you use them every day, reapplying as directed.  Suppose all 3500 students followed the school’s advice.  They would use 91,000 bottles of sunscreen a year, costing almost $1.4 million.
  • Nearly all store-bought sunscreens rely on oxybenzone, homosalate, and similar chemicals, which are suspected hormone disruptors, and which have not been reviewed by FDA since the 1970s.
  • The developed world suffers from an epidemic of Vitamin D deficiency, primary caused by a lack of sun exposure.

Conclusion:  by following the school’s advice, at a cost of $1.4 million a year, we might save at most one hundredth (1/100) of a student life per year, and probably far less — while causing unknown harm due to vitamin deficiency and hormone disruption.  Minimum cost per life saved:  $140 million.

Those who don’t think rationally about cost/benefit will protest here.  Life is precious!  If we could save just one life, maybe it’s worth $140 million.  Well, maybe.  But let’s first compare alternative ways of saving lives at the same venue, and choose the cheapest.

For example, for $50k a year, the school could hire a full-time suicide counselor.  The school has a suicide every few years.  If a counselor saved just one fourth of them, say one student every 10 years, the cost would be $500k per life saved — about 250 times more effective than ubiquitous sunscreen.

That’s cost benefit analysis.  It’s not an exact science.  It doesn’t need to be exact, when the difference in effectiveness is so stark.

 

The Web promotes pithiness

Ever noticed that Malcolm Gladwell books read like magazine articles stretched out to book length?  Gladwell is naturally pithy, spent a lot of time writing for periodicals, and so his natural rhythm seems to be 7,000 words — but he writes for an inflexible genre that requires 70,000.

Similarly, ever noticed that pop song lyrics often peter out?  The first verse is clever, the second trite, the third nonsensical.  This pattern has been true for decades, even in famous anthems like Strawberry Fields Forever.  (If you haven’t noticed this before, listen to a few songs, and be amazed.)  The problem is that the pop format is standardized, running about 2.5 minutes, structured something like verse 1, verse 2, chorus, verse 3, bridge, chorus.  If the songwriter’s idea doesn’t fit, then, for commercial reasons, he needs to add filler.

A great thing about the Web, still in flux even now, is to shake up these standard formats.  Things can run as short or long as needed.  Especially shorter.

This is counterintuitive.  The Web made it free to publish an infinite number of words, so one would think we’d get longer books, articles and other media.  Instead, the opposite happened.

There are three reasons it turned out this way.

  • Web search, e.g. Google, reduced the need for well-defined content categories.  This created an opening for new ways of communicating.  The question a book agent used to ask — “what shelf would this book idea go on?” — became less relevant.
  • In a world flooded with content, the value of pithiness went up.  You now have instant access to thousands of times more content than you can ever consume.  The scarce resource is not money or content, but time.
  • Fulfillment costs went to zero, so the barrier to pithiness went down.  When selling a traditional book, most of the cost went into printing, binding and shipping.  To have a meaningful amount left over for the author and publisher, you needed to charge $20 for the end product, which required delivering something big enough that readers would feel they received good value.  That whole paradigm is going away.  If the author can communicate the same idea in 20 pages, and sell online for $3, everyone is happier.  The reader saved 90% of his money and 90% of his time.  The author collects $1 or more per copy, about what he would have received for a paper book.  Everyone wins except the traditional intermediaries, the publisher and bookstore.

As an example, I built a business selling 8-page research papers into a market that was accustomed to 40 pages.  Rivals had no more content than I did, but were stretching what they had into the longer format for essentially historical reasons.  Readers aren’t dumb.  They read mine, found it had higher information density, and was thus more useful.

Similarly, Amazon is a great place to publish novelettes and shorter nonfiction, resulting in a better product than stretching to fit the traditional book format:  more succinct, faster to read, less dreck.  This means happier readers, which in the long run means sales, and thus happy authors.

 

Loyalty vs Objectivity

A fundamental cultural value is the relative importance of loyalty and objectivity.

To illustrate by obvious extreme, suppose your friend does something illegal.  The police stop by to ask you about it.  Do you tell all, or cover for a pal?  Your answer mostly depends upon whether you value loyalty or objectivity more highly.

Does this seem distant from your daily experience?  It’s not.  You may have no sketchy friends, but stepping away such extremes, this dichotomy is as ubiquitous as air, and as invisible.

When you argue politics, do seek to defend a party (loyalty), or explore an answer (objectivity)?

If a married friend divorces, do you side with the friend (loyalty), or with the injured party, whoever it may be (objectivity)?

This is one of those distinctions that is true at nation scale.

  • Corruption:  loyalty > objectivity.
  • Resigning due to scandal: objectivity > loyalty.
  • Property rights: objectivity > loyalty.
  • Amnesty for undocumented immigrants:  loyalty > objectivity.
  • Loosening immigration law to reflect reality:  objectivity > loyalty.

As you might expect, objectivity-based cultures appear to be more fair, egalitarian and prosperous.  Getting the right answer is really important, it seems.

“They” are “we”

In my twenties, I bicycle-camped across the United States.  People would stop me to talk.  The most common chat-starter was the excruciatingly dull, “how many flats have you had?”  More than once, a family man in his late forties opened by looking wistfully at the bike and saying, “I wish I had done that when I was 25.”

This was awkward.  These guys seemed like they were from another planet, and almost inauthentic:  obviously (to me), they could bike across America right now, if they chose.  The ride takes two months at an easy pace, and you can train as you go.  People in their sixties do it all the time.  So were these guys condescending to me?  Envious?  Or something else?

Now it’s twenty years later, and I’m one of those guys, from that other planet.  This makes it easier for me to see that they and I were never so different in the first place.  I think maybe they were just bad at small talk, or trapped by habit.  Just like me, both then and now.

I would have appreciated those chats more then if I had appreciated our similarities as much as our differences.  More generally, I think most interactions are improved and simplified when we presume they occur among a group of “us,” not “us and them.”

When you talk with a person who has no formal education, remember there is no they.  They are we.  We both love our kids, get old, fear death, enjoy sweets.  Our goals and dreams are more similar than may at first appear.  If we can’t converse easily, it might not be because we are different, but because we’re hampered by the false presumption that we are different.

When you feel weird talking to a billionaire, again remember.  Same goals and dreams, same struggles with motivation, same fears of isolation.  It is cynical to presume that the billionaire’s problems have disappeared because they are wealthy.  In fact, if you truly believe the most important things in life cannot be bought, then it would be hypocritical for you to not to empathize with someone who is rich and unhappy.  Our differences are more superficial than our similarities.

When you talk with someone much older or younger than yourself, remember that they are we.  That 80-year-old still fears isolation or not making a difference, still can’t help noticing attractive women or men, still fears making a bad impression, is still uncomfortable with small talk.  The mix changes, but the ingredients stay the same.

When the 40-year-old talks with the 20-year-old intern at the office, it can be awkward.  The awkwardness might come from both parties forgetting that they are we.  Is the 40-year old condescending, or just bad at small talk?  It could be either one.  Does he really envy the 20-year old’s youth and freedom, or is he just afraid to risk a bad impression by saying something truly revealing and non-obvious?  If he is just a fearful conversationalist, then he is just a regular person, no different from many 20-year-olds.  He is just forgetting that “they” are “we.”  And if the 20-year-old doesn’t see that, then maybe both are forgetting.