the dismal science


In your blog you mentioned that “the CEO system for running corporations is a dangerous anachronism.” I was wondering what you would replace it with – in your perfect world, what system would you design for building and running a global business and ensuring its continuity from one generation to the next? What other cultural or economic changes would go along with the new system if it were implemented throughout society? (E.g. would there still be brand-name identification of consumer products?)

—Geoffrey

zorg

Not the ideal

Great question; I’m not sure I have a great answer. But that’s because we need a whole lot more experimentation. Anti-monarchists couldn’t necessarily describe parliamentary democracy in 1700, either.

First, let’s review the problem. In that post, I pointed out Trump as the epitome of the terrible CEO. He’s a lazy, incurious person who’s used to unquestioning obedience for his terrible ideas, and takes every reverse personally. But he’s not much of an outlier. I’ve met plenty of much smaller-level CEOs, who have the same arrogance and inability to understand their own business. The good CEOs I’ve met are generally the ones who know when to get out of the way of their own workers— the people who actually know the work and know what needs to get done.

Many people are in love with the idea of the strong leader of uncompromising vision. We’re not so enamored of the Louis XIV or the Napoléon these days, but Americans, at least, still admire the entrepreneur who builds up a company from nothing: Bill Gates, Steve Jobs, Henry Ford, J.P. Morgan, John D. Rockefeller.

I don’t necessarily want to touch that.  On the whole, society benefits when these people build something new.  They should obey labor laws and such, but we don’t need to throw out this part of the system. What we should throw out is the notion that their heirs, or some guy with an MBA, deserve the same deference. If you worship wealth and never address inequality, as Piketty demonstrates, what you get very soon is an aristocracy of rentiers, people who never created anything yet sit on all the accumulated wealth, and whose primary incentive is the maintenance of their own comfort.

So, how do we run a company instead? Two basic approaches:

  • Put someone in charge temporarily
  • Put a representative committee in charge

For now, this comes down to your view of human nature. If you think there needs to be a strong leader (even if his power is limited or we can get rid of him), then you pick Option A. If you distrust all single sources of power, you pick Option B.

Perhaps ironically, in theory option B is what we have now, once the founder is dead. Public corporations have a board of directors, and even rules that a good number of these must come from outside the company; and they pick the CEO. In the US, the board represents the stockholders (i.e. the owners), and it is very possible for them to throw out the CEO.

There are two problems with this.

  • One, boards are in practice not very independent-minded. They’re often friends of the executives and only meet for a brief period every few months.  They’re not deeply involved in the business nor inclined to second-guess the CEO.
  • And two, what the stockholders want is basically more money right now.  This may be completely opposed to the interests of employees, customers, the community, and even investors who are thinking beyond the next 12 months.

A minimal reform is to require that some of these other stakeholders get representation. In Germany, up to half of the board represents labor, though stockholders usually get the determining vote. The idea could be expanded by giving other stakeholders representation.

There are many interesting experiments in corporate governance today, such as:

  • Valve, the company behind Half-Life and Portal as well as Steam, is famously run on near-anarchic lines. Employees literally pick which product they want to work on— and if a product doesn’t attract workers it doesn’t get made. (One does wonder if this is why they never seem to get to release 3 with any of their products.)
  • The first company I worked for is now employee-owned.  It works out well for them, and they were able to weather the 2008 recession in part because they didn’t have the huge expense of a CEO’s salary.
  • NFL management is said to be a huge swamp… except for the Green Bay Packers,  owned by a huge mass of individual Wisconsinites. They’re competitive with other teams and the team stays in Wisconsin.
  • The Mondragon Corporation, of Spain, is a remarkable co-operative firm which employs over 75,000 people.
  • We actually have plenty of examples of non-monarchical institutions: churches, universities, co-ops, many arts organizations or activist groups.

We need more experimentation to see what works. The answer to a lot of objections is going to be “Maybe. We don’t know. We need to try things out.”

The obvious worry is that discussion and representation take time, or at worst tie the entity up in knots. Democratic politics is not exactly known for calm, civilized consensus. In response to that—

  • Again, monarchs suck. We put up with the inefficiencies of democracy because one-man rule really is worse. But the inefficiencies are definitely there.
  • People get better at democracy when cultural norms evolve to support it. I’ve been in endless, unfocused meetings— people flounder if they don’t know what they’re doing. That isn’t a condemnation of the system; it just means that the transition is tricky. People who are not used to power do not automatically know how to use it.
  • There are better and worse decision-making techniques. A huge, completely open-ended meeting is one of the worst. People are better at reacting to concrete proposals than they are at coming up with them. If a proposal is rejected, it’s better for a small group to take it offline than for a large meeting to attempt to redesign it. The group needs a way to table arguments, so it is not dominated by a few eristic individuals. And so on. Heuristics will develop to smooth the process considerably.

One big caveat: democracy is not a cure-all. I think we’d be happier if we could vote who runs the company, or at least vote the current bums out. But that’s not the same as saying we’d be happy.

On the other hand, looking at modern representative democracy, we have to remember that it’s optimized for the logistics of 1790. I’m sure we could do better. One big problem, for instance, is the bundling of policies. At the federal level, there’s no way to say that you want (say) more health care and less immigration.  You can only pick between the two major bundles that are offered. Maybe we need to vote on policies more than on leaders.

Your question on brands is just part of a much bigger question: the optimum size of corporations.  I’m sure a bunch of readers are eager to tell me that the problem is not how to fix corporations, but how to get rid of them. But leftists have, to my knowledge, only come up with a couple alternatives, and they’re contradictory:

  • Nationalize them. So the organizations become massive.
  • Have workers run enterprises directly.  So the organizations must be tiny.

In general, the first approach makes the problem worse. (Some public goods should be nationalized; but I do not want a government commissar, or even a People’s Soviet, deciding what books can be published or what crops can be grown.) And the second approach is largely untested, and of questionable utility for a planet of 7.5 billion people.

It might be nice if every firm was only the size of a village— 150 to 200 people.  But there is such a thing as economies of scale. Really big firms can grow corn, build computers or airplanes, and make action movies really efficiently.  A world of small firms is also, very likely, a world of high prices for consumers. There’s also the problem of competing standards. These should never be a monopoly, even a government monopoly.  And yet it’s kind of a nightmare if you have a hundred competing standards rather than two or three. And if you’re eager to break up Google, do you also want to break up Mondragon?  (They’re about the same size.)

Plus, there’s the inconvenient fact that large firms are far easier to regulate, and can be far more progressive.  A corporation with 75,000 employees can have a professional HR department, great worker amenities, and a commitment to diversity. They’d also be far easier to democratize.  Smaller firms are often run by the most conservative, cranky old despots.

Ideally we should be able to choose both options. Restaurants, for example: it’s nice to have a one-chef gem of a restaurant.  It can also be convenient to have a known brand where the type and quality of the food are predictable (and prices are cheaper).  In art, it’s great to have quirky one- or two-person projects; also to have behemoths that require hundreds of people working together.

Anyway, the one thing I’m certain about here is that future economics is going to surprise us. The modern corporation emerged only 150 years ago, with the invention of the telegraph.  (Adam Smith thought corporations were of limited utility.)  As late as the 1960s, the ideal of corporate governance was a class of professional, medium-income managers hired by the owners; the cult of rock-star CEOs paid in the megabillions was a (stupid) innovation of the 1980s. Right now things look kind of dystopian, but that doesn’t mean we’re stuck here.

What’s your opinion of [Gregory Mankiw’s] response to Piketty?

—Owen

It’s very weak; it seems like he hasn’t read the book. Even skimming the diagrams would have helped.

First, he says “r < g could be [a problem]. If the rate of return is less than the growth rate, the economy has accumulated an excessive amount of capital. In this dynamically inefficient situation, all generations can be made better off by reducing the economy’s saving rate…we should be reassured that we live in a world in which r > g…” Yet Piketty shows that r < g was true in our world, in the postwar period— precisely the period when there was not an excess of capital; capital was at a historical low. And they were golden years, precisely because r (growth) was so high and so widely shared. (Sadly, one of Piketty’s lessons is that they were also a fluke, not easily repeated.)

Mankiw notes in passing that “the average growth rate of the U.S. economy has been about 3 percent”. Ugh, no. Krugman recently provided a chart of the last 57 years:

us-historical-growth

The average growth is more like 2%— and it’s plummeted in the last few years. Rates over 2% are generally due to high population growth or developmental catching-up; developed nations will be lucky to get 1 to 1.5% in the next century.

Next, he says that a rich person faces three obstacles to passing on his wealth:

  1. he consumes a good deal of his income
  2. his wealth is divided among his descendants
  3. governments tax estates

I don’t have Piketty at hand, but I’m pretty sure he covers all three points.

  1. He shows that capital is dramatically increasing, going back to 19th century levels and showing no signs of stopping.  So consumption does not reduce the accumulation of capital.
  2. Mankiw actually assumes that “the number of descendants doubles every generation”. Seriously, does he not remember that in developed nations population growth is negative?  Or that to have a family you have to have a couple, and thus 2 children do not double the number of wealth-holders but only maintain it? To make an error this gross is a sign of flailing desperately to avoid unwanted truths.
  3. Is Mankiw really unaware that his party is in favor of reducing or eliminating the estate tax?

He proceeds to argue against Piketty’s capital tax, again ignoring that we already have capital taxes (we call them property taxes), as well as Piketty’s argument that an enormous virtue of a tax on wealth would be making wealth visible. Mankiw is pretty sure that great capital is fine, but we can hardly know for sure since capital is so easy to hide.  Before Piketty’s research people mostly focused on income because we actually have data there. Without Piketty would it have been widely realized that there is no country where capital, as opposed to income, is widely distributed in society?  The Nordic countries come close to a fair distribution of income, but they are still highly unequal in the distribution of capital.

Finally he moves on to some moral arguments.  He says “Piketty writes about such inequality as if we all innately share his personal distaste for it.” And at least Mankiw is up front about being in favor of inequality!  He certainly doesn’t have to share Piketty’s morals. But the same can be said for the rest of us about Mankiw’s morals!  Mankiw writes about inequality as if we all innately share his personal enjoyment of it.

He doesn’t see anything wrong with the present state of plutocracy, but, well, he’s certainly in the 10% who gains enormously from it. For the 90% of Americans who don’t, we’ve been watching for 35 years as the gains of productivity no longer lift us up, but go only to the 10%.  Morally, he’s just wrong: it’s immoral to make the lives of the majority of the population crappier.  And intellectually, he’s ignoring Piketty’s carefully accumulated evidence that the situation is getting worse.  Is there really never a point where the rich have accumulated so much that it’s slightly bothersome to Mankiw?

And pragmatically, he’s a shortsighted fool.  Short-changing 90% of the population works only so long as the 10% have a really good story to fool the majority with. Maybe in 2014, when he wrote the paper, he could be satisfied that the Republican con was working.  Surely it’s a little harder to think so in 2016. A huge swath of Republican and Democratic voters are rejecting establishment answers— Trump and Sanders both speak to the people who feel they’ve been left behind by the 10%.  Is Mankiw happy with either a populist-nationalist or a socialist reformation?  And if inequality continues to rise, does he think the popular response won’t get far worse?

 

 

Charles Stross is my favorite living sf author, so I was happy to finally get a copy of Neptune’s Brood. In fact I foolishly decided to finish it last night, so I ended up with four hours of sleep, countered by buckets of caffein.

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It’s a sequel to Saturn’s Children, but set something like 4000 years later… which means it’s effectively a new creation. The characters are no longer androids but metahumans— the difference between machine and human has greatly eroded. The heroine, Krina, is made of metal and computers, but she breathes and eats and presumably excretes, she certainly has no problem with emotions, she can have sex, and though Stross has fun with the details of non-biological life, little in the plot depends on them (unlike the earlier book).

What the book turns out to be about is debt. It begins with a quote from David Graeber and this is not accidental. Stross talks about “fast money”, “medium money”, and “slow money”. Fast money is liquid cash and credit as we know it. Medium money is basically land and other long-term stores of value. Slow money is, well, even more long-term. It’s a currency designed an interstellar civilization that doesn’t have FTL. As transactions have to be confirmed by two interstellar banks, it’s very long-term, non-liquid, stable, and safe. Slow money is essentially an artifact of space colonization: the process is so expensive that a colony starts out in enormous debt, which can generally be paid off only in millennia— or by starting a colony of one’s own.

Krina is a banking historian, with a specialty in fraud. She moves to a system named Dojima (this is done by beaming her brain-state and downloading it into a new body) to do research and find out what happened to her missing sister, and almost immediately get caught up with a) a stalker trying to kill her, b) the Church of the Fragile, an organization dedicated to preserving biological humans, despite their comic in adaptation to modern life; c) an association of pirate underwriters. The last group is the most interesting… they do things like aggressively investigate insurance fraud, and audit cargos not to steal them but to do market interventions based on them. (Within a system, travel takes months but information travels in hours, so knowing what’s on a ship is valuable information.)

More details would either be spoilery or confusing. The plot is headlong and twisty. It all fits together pretty well, even if Krina is a bit more passive that the usual Stross protagonist.

As world building, it’s fantastic. Stross calls the book a “space opera”, which more or less means that he doesn’t want to be hassled if the science isn’t 100% plausible; but in fact there’s really nothing magical about his tech. He creates one exotic and fascinating environment after another, and Krina has to adapt to each one in turn. (At one point she become a mermaid. That might be a bit of a spoiler, but it’s on the damn cover.)

You can see why Stross is Paul Krugman’s favorite sf author: he takes problems of economics, money, and debt seriously. Krina, for instance, is instantiated as a slave— that is, she’s basically a clone of her mother, and forced to work for years to earn her freedom. This isn’t simply a bit of far-futuristic oomph; it’s actually straight Graeber, and relates to the main theme of the book: what debt does to people and societies.

I have a few quibbles, mostly related to narrative. It’s a long convention in first person novels that no one really explains why they’re writing out their story, but I think Krina is particularly messy here. She explains things that should be obvious in her world, she talks as if she’s researched her own story but doesn’t really give any metanarrative on why, the book changes to third person in a few spots, a few things are sometimes told in a weird order, as if Stross suddenly realized he needed to give some backstory to an event but didn’t feel like rewriting earlier bits.

Except in the Laundry novels, I think Stross has an ongoing problem making his antagonists smart enough. Of course we want the heroine to be smarter and later threats to be larger than earlier ones, but some of the antagonists here end up being just not very clever or dangerous.

It could be argued that Stross underestimates “Fragiles”— biological life— and overestimates how stable and durable metal and electronics are. Once you can play with genes like Javascript, who knows what limits biological transhumans have? But of course this isn’t a prediction of future development; it’s just a given of this universe that civilization has become non-biological, while (as systems do) retaining the traces of its origins.

But these aren’t biggies. It’s a fun book, it goes fast, and I wish there was a Volume Three…

There was a discussion on Mefi about “Peak Ads“. Supposedly Internet advertising is all broken and shit, which is bad news for sites that depend on advertising.

But that’s not why we’re here today. No, we’re here because a couple of schmos brought up micropayments, which will save everything, and have been standing by ready to save everything for more than 20 years now.

I’m going to go out on a limb and suggest

  • We should probably give up on the idea
  • We kind of have them already

I remember reading about the idea in Scott McCloud’s Reinventing Comics (2000).  He liked the idea because, he says, people won’t spend $10 for an online comic, but they’ll spend 30¢.

Back in 2003, Lore Sjöberg didn’t think it would work:

The Web-wide reticence among independent artists to actually hunker down and charge for material is because we know that if we did so, we wouldn’t get fame or fortune. We’d get, at best, beer money and a clique.

That is, if you have 10,000 readers when you’re a free website, you can’t estimate your potential income by multiplying 10,000 by 30¢.  “Ooh, I could get $3,000 for one web page!”  No, because when you raise the price, even to a frippance, your readership will plummet.

Most of the micropayments people were, I think, thinking not as readers but as creators, or at least on behalf of them.  Be honest: you read the web all day long, how often do you have the impulse to toss 30¢ at an author?  Not often, I’ll bet.   The web is built on costless impulse clicking. If you had a little 30¢ roadblock to get anywhere, you’d probably hang it up and play video games instead.

Besides, the problem with micropayments is that creators would get micropaid.  Suppose you couldn’t see my bitchin’ new conlang, Dhekhnami, without forking over 30¢. Let me be generous and assume that 100 people would do so. That’s $30, for several months of work. Beer money, as Lore says.

But it’s not 2003 any more. What do we have?  Arguably, something better than micropayments:

  • Paypal, which allows pretty much anyone with e-mail to safely offer services over the web, and allows payments down to about $0.31.  (There’s a fixed fee to the seller, so it actually costs the seller money to offer things for less.)
  • Print on demand and e-books, which allow anyone to publish.
  • Kickstarter, which allows the medium-famous to move a project along.
  • Patreon, which allows readers to pledge a small amount per creation.
  • Greenlight, where Steam allows indie game creators to sell their crappy games.  OK, they’re not all crappy, but I just got burned on one and I’m pissed.

What this allows is a mixed model: offer content for free; sell physical objects for cash money.  For instance, I’ve read the nearly 1000 episodes of Order of the Stick online without paying a dime. But I’ve spent– let’s see–  688 dimes on OOTS books.

Or take Erika Moen’s extremely NSFW, extremely adorable Oh Joy Sex Toy.  Her comic is free, but she’s doing a Kickstarter for a print book, which has so far raised $46,000, plus she’s got something like $1000 a month coming in from Patreon.  Hey, people love cute sex comics.

And it turns out that people are reasonably fond of linguistics, too.  I make a scant living from writing books on languages, conlanging, and worldbuilding, something that wouldn’t be possible if I hadn’t spent 20 years first creating a huge, free website.

So, people aren’t willing to pay 30¢ a page to browse the web, but they are willing to pay $15 when you’ve amassed a book’s worth of content.  And that’s good, because chunks of $15 add up a hell of a lot faster than dribbles of 30¢. Plus the bigger chunks make for a certain quality threshold, in that you can’t make money unless you can actually produce book-length chunks of readable content.

Mefi itself has been having financial problems– for unknown reasons their Google ad revenue halved, and they had to let half the moderator staff go.  The readership basically said, “Screw all the research that says no one will pay for web content and take our money.”  Over 3000 people have made a one-time payment or signed up for a recurring one.  So the physical object isn’t always necessary.

Now, we’re still talking niches and long tails.  But then, micropayments were not going to allow a million artists to make a living with webcomics.  And anyway, it’s a big plus to get rid of some of the gatekeepers; a lot of stuff is available that wouldn’t exist if it had to be selected by some guy in a suit first.

In between paragraphs I’ve been browsing Reinventing Comics, and I’ve gotta say… I love McCloud, but he was seriously loopy about the infinite canvas thing, too.

 

 

 

This book, by David Graeber, is great.  Provocative, brilliant; also crankish and infuriating.

barter

Graeber is an anthropologist, and the best parts of the book are where he does anthropology. He’s devastating on what he calls the “myth of barter”. Economists love to talk about the invention of money as freeing us from the situation where Fred has arrowheads and Madge has pots, and Fred needs a pot, but they can’t trade because Madge doesn’t need arrowheads right now.

This doesn’t happen.  There was never a “barter stage”; no societies suffer from this hangup.  There’s a number of possibilities, but the basic pre-money mechanism is that Fred goes to Madge and says “That’s a handsome pot.”  Madge gives it to him.  At some later time, if she needs arrowheads, she goes and asks for some.  These may be considered tiny little debts, or they may just be considered the way social life works: people help each other out.

Once money exists, debts tend to be enumerated in units of account– but these are rarely transferred physically, and in fact the system long predates coins and even writing.  For 2500 years, Middle Eastern civilizations had markets, checks, traders, inns, interest, and debt without coinage.  Everything was done on credit.

Coins, according to Graeber, come in with large empires.  This developed out of the existing tradition that strangers are outside the credit economy.  Once you have a large standing army, you need to pay the soldiers, and they need to buy beer and horses and prostitutes.  As they’re rarely natives of the area they’re stationed in, it’s enormously useful to provide small portable bits of currency. It’s only in the last couple hundred years that this marginal coinage-based system took over the whole economy.

And then there’s debt.  As promised, Graeber gives a history of debt from ancient times, and in his telling it’s up to no good.  Debt always gets out of hand.  Ancient societies were plagued by a cycle of debt peonage: peasants would get loans; they were unable to pay the interest; they then sold off implements and furniture, then their fields, then their wives and children, and finally themselves.  Periodically, in the Middle East, kings would decree a vast cancellation of debts– all the records would be destroyed and the debt slaves would return to their restored homes.

In his telling, this process was linked to other bad things– such as slavery and misogyny.  Slavery was once limited largely to war captives, which were a limited resource; debt created a vast and increasing population who were effectively slaves.  Women in early Sumerian society were surprisingly visible and influential, and temple sex was a respected profession; the selling of wives and daughters to repay debts, and the subsequent sexual service, degraded the position of women.  And the fear of such selling-off led to the Middle Eastern focus on honor… meaning a man’s ability to protect his womenfolk, keeping them out of his creditor’s hands– and under his control.

And then there’s the moral effects.  Debt becomes a metaphor for the relationship of children to parents, or humans to gods.  We’re told to pay our debts, and yet most human cultures have despised usurers, and the first act of any peasant rebellion was to destroy the debt records.  Not infrequently kings or religious authorities took the part of the poor against their creditors, going so far as to ban interest or slavery… though these measures didn’t often last.

In the end, Graber suggests, debt– and economic theorists– blind us to how human societies really operate.  There are at least three types of human economy, which he calls communism, exchange, and hierarchy.  ‘Communism’ is the helpful, altruistic systems that underlie all human society– it’s how families work, and entire villages in many cultures, and even how corporations work internally.  Hierarchical exchanges are largely exactions by the rich and powerful, and their salient feature is precedent: a particular tax or tribute, once levied, becomes customary, which is one reason you should be wary of offering a gift to the king.  (On the other hand, it’s rare that an elite simply does nothing but take; usually it needs to attract supporters by giving things away.)

To Graeber, economists go terribly wrong in ignoring or underestimating the non-exchange portions of the world.  The whole attitude of looking at the world in terms of rational, egoistic calculation is a vast misapplication of what was originally a very narrow part of the economy– associated with debt, war, and slavery.

All of this is fascinating and eye-opening, and can be used to deepen (and darken) your view of history, or your conworld.

At the same time… well, for Graeber history is full of villains, and he’s often so busy flinging mud at them that he loses track of who’s worse and who we should be rooting for.  E.g. he talks about the rise of coinage as something of a disaster, destroying the credit economy and ultimately turning the Roman citizens into slaves.  Yet he’s already shown that debt slavery functioned with its full horribleness in pre-coinage societies, and turned the Mesopotamians into slaves.  Later he provocatively suggest that the Dark Ages weren’t so dark, as the Europeans ended slavery, resisted usury, and ended the militarism of the Roman Empire.  But the Middle Ages, as he well knows, replaced slavery with serfdom, and threw out the political and technological advances of the ancients.

The last half of the book is a breezy retelling of history which grows increasingly polemical and tedious.  A particular low point is where he talks about the Iberian traders engaging in the arms trade, the slave trade, and drug trade, and a moment later explains that the “drugs” meant coffee, tea, sugar, and tobacco.  He’s often a bracing cynic and amusing contrarian, but this is just propaganda.

The last chapter, on the world since 1971, is a weird political diatribe of the Everything Is Horrible school.  He’s mostly mad at the US, and throws everything he can at it, no matter how contradictory: the US military is overwhelming, yet is easily resisted; the national debt can’t be eliminated, except it totally could if we didn’t spend so much on the military; the US oppresses everyone economically, but it was forced to grant favorable trading terms to Europe; buying US treasury bonds is a sign of empire, except when the Chinese do it.  Or there’s a bit where the US creates “a vast apparatus of armies, prison, police” to create an atmosphere of fear and jingoistic conformity… er, sorry, Dave, but those two things are pretty much opposites; people celebrating American power are not also afraid of it.  He even inserts charts to show how things are out of control!! with the propagandist’s tool of not correcting for inflation.  Plus his frequent references to “wage slavery” only cheapen his earlier discussion of real slavery.

As an anthropologist, he’s very good at criticizing the fantasy history that economists create; it doesn’t make him an expert on economics.

He’s also an anarchist activist, and was involved with anti-globalization protests, but he’s missed the biggest story of the new century: the fact that the Third World has become far, far better off.  He keeps asserting that capitalism can’t include everyone… and yet it seems to be doing just that.

The problem with a worldview where everything is horrible is that there’s no room for progress at all, including in the future.  A contrarian can point out truthfully enough that living standards stayed the same for most people– that is, on the edge of starvation– until about 1800. But even in that period there were advances, such as the abandonment of absolute monarchy, the rise of science, and the development of a vast array of progressive philosophies.  (The thing about idealisms is that somebody eventually will take them seriously… e.g., you pass a Bill of Rights and then, a couple centuries later, courts start to make it real.)  Plus, even in Graeber’s own telling, not infrequently the authorities found it useful to cancel debts, repress usurers, or free serfs.

And after 1800, it’s hard to deny (though Graeber does his best) that the average American is better off than the average Babylonian.  Knowing more about the world helps; tamping down the claims of kings and priests is valuable; rural villages don’t seem like such paradises to the people who live in them.

Graeber likes to detail how many of our institutions arose in war, debt, and slavery.  And they did!  However, things don’t remain forever tainted because of their bad origins.  He’s fond of pointing out that governments went into debt and issued coins and taxed people largely to finance wars, and that a huge portion of US spending is still military.  But it’s now far from the majority of spending– most government spending is education, roads, social security, health insurance. and so forth.

(The problem with criticizing an Everything Is Horrible person is that some people will get the impression that I’m instead saying that Everything Is Great. It’s not, of course. I understand the impulse to think that the whole system is rotten and has to be thrown out. But sometimes our impulses aren’t so smart. Throwing the whole system out rarely goes well.)

After all that, I should emphasize that I don’t disagree with all of his cynical remarks.  He’s pretty acute, for instance, about the disaster of neoliberalism… the insistence that with every crisis, Third World governments implement “reforms” that favored First World creditors and clawed back social progress for the poor.

He doesn’t say much about what he’d like to do instead; but in his concluding section he does make a practical suggestion: cancel debts!  And he has a point.  High-debt systems generally lead to reforms that do just that; the irony is that under the current plutocratic system, rich debtors get government relief and poor debtors are screwed.  As he points out, we’re trained to say “People should pay their debts!”, and never to ask why people get so far in debt and whether we really want that to be the system we live under.

Sometimes you have to take a step back from the daily news and look at the long term trends.  This chart, by James Plunkett, does a great job of telling what’s happening in the world today:

global-income-1988-2008

What you’re seeing is what happened over the last 20 years to each percentile of income, worldwide. The two big stories:

  • The developing world has moved ahead massively.  The old picture of the well-off First World contrasted with the miserable Second and Third is out of date.  Literally billions of people are far, far better off than they were… a lot of this is in India and China, but also places like Brazil, Turkey, Malaysia, Gabon, Botswana, Chile.
  • The middle and working classes in the US and Europe have been stiffed.  The old picture of middle class countries where everyone prospers is– in these countries— no longer true.  New wealth is still being created, but it goes only to the top 10%.

To put it another way, you can’t assume any more that we’re inexorably moving toward a future like Star Trek— where prosperity just increases so steadily and broadly that traditional economics and inequality no longer matter– everyone joins the 1960s American middle class.  Instead, we’re heading more toward Snow Crash.

The second part of the story– how the US has moved from liberalism to plutocracy– I’ve addressed in more detail before.

Edit: Alert reader Alon Levy points out that the collapse of this part of the graph is also in part due to post-Soviet decline.

The first part we hear about much less.  A good place to start is this report from the Gates Foundation, which spotlights three huge stories:

  • Global poverty is on the way out.  Extreme poverty– the dollar-a-day type– is now limited to a billion people or so, and could be entirely eliminated.  Age-old diseases are being eradicated.  Even Africa is doing much better.
  • Foreign aid works, and it works better than ever.  Aid agencies concentrate on measurable gains, and they’re no longer held back by wasteful attempts to fight the Cold War with money.
  • When prosperity goes up, overpopulation ceases to be a problem.  We’ve already passed Peak Child; the earth’s population is stabilizing.  When people don’t have to have 12 children to have two survive, and when women are empowered, they no longer have 12 children.

The good news is going to engender some resistance, but I encourage you to read the linked report, which goes into far more detail.  Often people seem to prefer to think that the world is falling apart; we don’t have a place for massive good news.  (And I haven’t even gotten into the other huge secular trends to more democracy and less war.)

But global warming!  you cry.  And I’d reply: the big hangup on addressing global warming is not world development; it’s American political stupidity.  We’re the ones who deny the problem, refuse to do anything about it, and embrace sprawl, automobiles, and oil.  It’d be nice if China did more, given its scale, but we need to lead by example.  The developing world isn’t going to take the lead on this while we continue to spew out carbon.

And, of course, there’s that growing First World inequality.  A bunch of people look at the above chart and say, well of course, what we need is to stamp on the US middle class more, and give more money to the rich.  I wish I could say I don’t understand it, but I do: they’re still living in 1979; their worldview is still full of hippies, welfare, inflation, high taxes, and US domination.  Well, it’s time to update your calendars.

I’ve been reading Bruce Trigger’s Early Civilizations, which is a comparative study of Egypt, early Mesopotamia, Shang China, the Maya, the Aztecs, the Inkas, and the Yoruba. It’s a huge book and rather dry, so unfortunately I can’t say I read it all. But for conworlding purposes I thought I’d list some of the stuff that was new to me.

It's got a great beat, and you can dance to it

Early dancers were half the size of the musicians

He finds a significant difference between city-states (Mesopotamia, Maya, Aztecs, Yoruba) and territorial states (Egypt, China, Inkas). Both were governed by kings, were hierarchical, were divided into an elite and a peasantry with little social mobility. But territorial states are likely to have fewer cities (with peasants living in villages rather than the cities), government road systems, and long-distance trade run largely by the government.

My favorite historical atlases, by Colin McEvedy, are apparently out of date on the subject of early trade. Or to be precise, McEvedy gave an accurate picture of the Egyptian state, which had a command economy; but Mesopotamia had a lively trade economy even if it didn’t have marketplaces or coinage. (The picture of early traders in my story “The multipliers” is more accurate than I thought!)

None of the civilizations really valued traders, and indeed often took steps (e.g. with sumptuary laws) to signal that they were not aristocrats. On the other hand, in some civilizations, lesser members of the aristocracy could supplement their income with trade.

The position of women in all the civilizations was lower than the men, and tended to deteriorate over time. E.g. in earlier Egypt and Shang China we see female bureaucrats (often relatives of the king), later replaced by men. Traders among the Yoruba, and innkeepers in Mesopotamia, were often women.

The idea of a straightforward practical manual on anything seems to have eluded the literate societies– what they wanted to write down was magic and rites. Even practical concerns, like metallurgy in Benin and navigation in China, were conducted with rituals and superstitions.

The Tea Party view of the world– a 1% who cannot be coddled enough, the poor who need to be treated ever more badly– is as old as dirt. The social contract was always a rotten bargain. E.g. in China, there was ‘punishment’ (xing) for the lower classes, ‘etiquette’ (li) for the gentry. It was viewed as just and natural for the elite to live off the labor of the masses– and make sure the masses had no real avenues of improvement. When ordinary coercion wasn’t enough, it was always possible to invent even more pretexts for oppressing the poor, e.g. with accusations of witchcraft. Things like the admirable road system of the Inkas were not built as social services– they were for military movements and for provisioning the elite. About the one service the poor could count on was security: times of anarchy and disunion were even worse.

At the same time, management was a very difficult problem for early states. No ruler could keep an eye on everything, and the elite was both a necessity and a threat. The elite had to be kept relatively happy, and it was the only source of people one could delegate authority to, but it also took all the independence it could get. In practice, totalitarian micromanagement was impossible– even conquered groups of people were generally left to rule themselves so long as they paid their taxes.

The book is organized by topic, so you can compare (e.g.) class organization or cosmology across all seven societies. It’s very thorough, but he doesn’t have a gift for making it vivid (as e.g. Marvin Harris or John Fairbank do).

The choice of civs is just a little odd– the Aztecs and Inka were hardly early; there were the culmination of a thousand years of development. He has some excuses for not including anything from India– I think he says we know too little about early civilization there– but if you’re going to include something as late as the Inka Empire, you could certainly include Asoka’s empire.

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