Tag Archives: economic growth

U.S. labor market growth

Axios has a brief piece on the demographics of the labor force in the U.S. A tight labor market is not just a short-term phenomenon during the pandemic recovery.

In the 2010s, the massive millennial generation was entering the workforce, the massive baby bo0m generation was still hard at work, and there was a multi-year hangover from the deep recession caused by the global financial crisis. But now, boomers are retiring, millennials are approaching middle age, and the Gen Z that follows them is comparatively small.

Axios

So combine this trend with anti-immigrant politics, and we may have a problem. It could lead to the double-edged sword of higher wages and inflation, a trend toward toward greater automation and technological innovation, a general drag on economic growth (which could ultimately lead to deflation), left wing politics, right wing politics, business pressure for more globalization/offshoring, or some combination of any of these (other than inflation and deflation, but maybe it is possible to have a sudden reversal between these and hard for policy to react quickly even if we knew what to do). It is hard to know what to do, but rational immigration policies based on skills and education to fill jobs available would be a start.

What’s new with “decoupling”?

Decoupling is the idea that environmental impact per unit of economic growth is declining. If it were to decline fast enough, in theory, it would be possible for growth the continue indefinitely at the same time absolute impact is declining. This article tries to measure the rate this may or may not be happening, and concludes the long term trend is not even close to being on a path where we could turn the corner and see absolute impact stabilize, let alone decline.

While globally, CO2 emissions per unit of GDP are declining, the decoupling rate from 1995 to 2018 was only -1.8 percent annually. To achieve net zero by 2050, the rate would have to accelerate to -8.7 percent, assuming population and GDP growth projections as given, or by a factor of almost five.

Bruegel.org

This seems about right to me. The idea that we need to choose between “growth” and sustainability in the long term, of course, is logically flawed. If impacts continue to grow, there will come a point where the system breaks and human welfare is no longer able to increase.

There are a few flaws in the decoupling argument. “Growth”, as usually measured by GDP, is a measure of gross economic activity, which includes both benefits and costs to humanity. So in comparing impacts (costs) to GDP (sum of benefits and costs), you have an equation with too many unknowns, unless you can come up with some agreed-upon reasonable measure of costs. If you can do that, you would simply subtract costs from benefits to get net benefits, and figure out whether those are growing or not. They may or may not be growing right now. Even if they are, you need to consider whether they can continue to grow in the future, or whether the underlying system is eventually going to break and no longer be able to support further growth. You also need to consider risks of really bad things happening, as well as the odds of really good things like major technological breakthroughs happening. I would also point out that at the moment we are using carbon emissions as a proxy for sustainability more generally, but there is a lot more that should be considered in a holistic view of a sustainable long-term human-planet system.

Did productivity triple during the pandemic?

I’m hearing claims that “productivity tripled during the pandemic”, and maybe this is the computer and internet and mobile chickens finally coming home to roost and deliver on the promises made way back in the 1990s. Maybe there is some truth to this, but it seems much more likely that the denominator contracted suddenly (hours worked) than that the numerator suddenly expanded.

Here’s one graph I have seen referenced.

What could be going on here? Well I don’t know, you should consult the experts. But of course I can speculate:

  • Lower-productivity (economic output measured in dollars per hour worked, not in the worker’s sense of satisfaction, sanity, or self-worth) jobs suddenly disappeared, and higher-productivity ones (reverse caveats above) were left, so average productivity went up.
  • I’ve heard it suggested tat workers who still had jobs suddenly had no commuting time, so they worked some extra hours, and got more done but didn’t necessarily report the extra hours worked to their employers. I might buy this as a marginal, short-lived effect. Maybe a few young go-getters did this, but certainly not us middle-aged parents who suddenly had small children bouncing off the walls 24-7.
  • I will buy the idea that workers were more productivity with the new software (Microsoft Teams, Zoom, etc.) than they would have been in the same situation with software and communication options available a few years ago. I’m not sure I buy into the idea that they were more productive at home with these tools than they would have been in the office.
  • Maybe there was a sort of mania of productivity for the work-from-home set at the start of the pandemic, for 2-3 months or so. Then it crashed back to earth, which you can sort of infer from the limited number of data points here.

So no, the data are interesting but I am going to say the singularity did not occur last year. I think there may have been a bump in average productivity per (remaining) worker when some workers just disappeared from the economy, which is not a net positive, and I think there may have been a short-term mania among work-from-home professionals that is now feeding into our widespread burnout situation a year and a half or so down the line, and that is not a long-term positive. I do think the rapid/non-voluntary adoption of new software and communication tools on a massive scale probably gave a bump to technological progress, which might pay longer-term dividends.

The pandemic also gave a sudden boost to biotechnology, which may ultimately end disease as we know it, create unimaginably horrible weapons that kill us all, or both.

why the development gap persists

The world’s technology, for the most part, is available to less developed, lower income countries. So why don’t they just reach out, grab it, and catch up? Well, a few have, particularly the so-called “Asian tigers”. Others have caught up on life expectancy and education, but not on income. This article by Ricardo Hausmann suggests a few reasons why it is not so easy.

  • Restrictions on trade, competition, and/or property rights. (But the point of this article is that these are the traditional answers economists give, and they are not the only reasons.)
  • University scientists are more interested in teaching, basic research, and scientific publications than in applied research that could help profit-seeking commercial firms.
  • Businesses do not invest much in R&D, either internally or with university partners.

He uses patent filings as a proxy for technological innovation, and I am not so sure about that. For one thing, he makes this statement:

Countries like Austria, Germany, Denmark, France, Great Britain, Norway, New Zealand, and Singapore patent at a rate at least one-quarter that of the US. And other countries, such as Australia, Canada, Switzerland, Iran, Israel, Italy, the Netherlands, Poland, and Slovenia, come in at just above one-seventh the US rate.

Project Syndicate

The countries in the list above are doing quite well I believe compared to the U.S., and I know some of them have per-capita incomes greater than the U.S. Certainly, our per-capita U.S. GDP is not 7 times Norway’s and 4 times Singapore’s! (It’s lower in both cases per the CIA world fact book.)

Also, being healthy and well educated in a middle income country might not be all that terrible a life.

Those are my criticisms. But I do sometimes fantasize about how I would jump-start progress in a developing country. Certainly, I want to believe that big investments in research and education would pay off in the long term. Building universities, attracting talented professors, and then connecting them to private sector needs would seem to be important. I would want to bring in direct investment from private firms with high-tech know-how, and also seek expertise from development agencies like the World Bank, USAID and its equivalents in other countries. In all these cases though, you have to drive a hard bargain or you are likely to be exploited. I might hire Norway or Singapore to help me do that. Get the economy moving, then use the proceeds to build the infrastructure and keep the education and R&D thing going. At some point, you have to invest in health care, environmental protection, and labor standards if you want to provide a decent quality of life for people. I would probably follow Costa Rica’s lead and not bother with much of an army, but then I would probably be invaded by my neighbors or murdered by my own body guards.

a jumbo jet crashing every hour

Here are some disturbing statistics on child mortality worldwide.

Child mortality refers to the death of children before their fifth birthday. We live in a world in which 5.4 million children die every year. That’s ten dead children every minute.

Imagine what it means for a child to lose his or her life; imagine what it means for a family to see their child die. Ten families will experience that in the next minute. This will repeat every minute for the rest of the year. That is the horror of child mortality.

These daily tragedies do not receive the attention they deserve. Comparing it with those tragedies that do receive public attention makes this clear. A large jumbo jet can carry up to 600 passengers.3 The number of child deaths is equivalent to a crash of a jumbo jet with only children on board, every hour of every day of the year. 

Max Roser, Our World in Data

It suggests a few points to me. One is that we are most scared and pay the most attention to new threats, like Covid or murder hornets. Meanwhile, old threats like car accidents, heart disease, and malaria cause suffering and death on a much larger scale. We are complacent and accepting of them either because they happen to other people far away (from the perspective of a prosperous country like the U.S.) or because they are so common we assume nothing can be done about them (traffic deaths).

Second, the enormous disparities between countries make it clear that something can be done about child mortality, and that it is a moral imperative to do so. It is not even high tech, it is just a failure of our civilization to recognize the problem, feel the responsibility, organize and act.

The plots of per capita income vs. child mortality are worth staring at. As the article drives home, there are no poor countries with low child mortality rates, suggesting that economic development is necessary in addition to direct interventions (nutrition, vaccination, sanitation, and health care are mentioned.) The U.S., of course, is in the group of richer nations with much lower child mortality rates than the poorer countries. But within its group, the U.S. is the clear laggard compared to the rest of the developed world. We are not applying our wealth and know-how effectively to keep our young children from dying.

what Europe and China are doing on carbon emissions

Well, the EU is apparently instituting a “carbon border tax”.

The EU plan is controversial because it contains an extra-territorial dimension – the much-foreshadowed and very controversial carbon border tax that would impose a carbon tax on imports from countries with lesser emissions reduction targets and carbon prices…

The EU already has arguably the world’s most ambitious response to climate change. It launched its emissions trading system in 2005 and has reduced its emissions, from 1990 levels, by nearly 25 per cent.

Sydney Morning Herald

Not all industries have been covered by the emissions trading scheme, but going forward the system would add steelmakers, power generators, shipping, transport, buildings, carmakers and eventually agriculture to some extent.

Meanwhile, China is starting a new emissions trading scheme, and the U.S. Congress is at least talking again about some kind of carbon pricing, trading, and/or border tax. If all this happens, it would cover a lot of the world’s people, economic production, and pollutant production. I suppose developing countries could be at a disadvantage initially if they can’t continue to grow by expanding dirty industries, but in theory the clean technologies and processes that will result should filter through to them. They certainly will not be well-served by a world of famines, fires, and floods that will result if nothing is done.

what Singapore does well

After reading this long article in the London Review of Books, I find myself reflecting on my own experience in Singapore from 2010-2013. Here’s my take on what they do well. First, they educate everybody. Everybody is not an international math champion, despite what you might think, but everybody gets a solid education through at least a two-year vocational degree. Second, they build their economy by attracting foreign investment and being a center of trade. Third, they have rational guest worker policies for both skilled and unskilled workers. I think all this keeps the economy humming along pretty well. Then, they have rational tax policies. They help the population build wealth through a subsidized housing program (often called “public housing” in the international press, but think of it more like a condo you own with the government as your condo association. If you meet certain requirements (which include race and fertility, policies that would not translate well everywhere), you essentially get to buy your condo at a discount and sell it at full price. Then there is essentially a forced saving scheme, which is invested in the well-managed sovereign wealth fund and given back to people in annuity form at retirement age.

That’s what I liked. I felt the focus on economics resulted in a society where a lot of people really are all about money, and people are somewhat cold to each other. The idea of technocratic government and leadership development works up to a point, but it results in a certain arrogance that does not always match ability. They have comprehensive and highly efficient public transportation, but they still separate residential and commercial land uses and this results in really long commutes for people. And if you are not from there, the place just feels a bit crowded, loud and claustrophobic after awhile.

I had the fortune of experiencing an election while I lived there, and I came away thinking that their one-party-dominated system is not all that different than our two-similar-party-dominated system, at least in terms of barriers to entry and resistance to change. But overall, I think their system is working better in the interest of their people than the U.S. system in recent years.

productivity of working from home

In industries with billable hours, productivity is not particularly easy to measure and an hour billed from home looks just fine on paper. To managers, that is an hour on a spreadsheet with somebody else paying for the coffee, lights, heat, insurance, cleaning (or just not cleaning), etc. But there are some studies from industries where productivity is more measurable. Results are all over the place, but this particular study from Japan puts working from home at about a 30% productivity loss compared to the office. Something in the range of a 20-50% loss seems to be a common assumption from a range of studies.

2020 in Review

2020 has been quite a year for the U.S. and the world, but you don’t need me to tell you that! My work and family life was disrupted, but I have been lucky enough not to lose any family members or close friends to Covid-19 so far. If anyone reading this has lost someone, I want to express my condolences.

Now I’ll get right down to some highlights of my 2020 posts.

Monthly Highlights from 2020

Most frightening or depressing stories:

  • JANUARY: Open cyberwarfare became a thing in the 2010s. We read the individual headlines but didn’t connect the dots. When you do connect the dots, it’s a little shocking what’s going on.
  • FEBRUARY: The Amazon rain forest may reach a tipping point and turn into a dry savanna ecosystem, and some scientists think this point could be reached in years rather than decades. Meanwhile, Africa is dealing with a biblical locust plague. Also, bumble bees are just disappearing because it is too hot.
  • MARCH: Hmm…could it be…THE CORONAVIRUS??? The way the CDC dropped the ball on testing and tracking, after preparing for this for years, might be the single most maddening thing of all. There are big mistakes, there are enormously unfathomable mistakes, and then there are mistakes that kill hundreds of thousands of people (at least) and cost tens of trillions of dollars. I got over-excited about Coronavirus dashboards and simulations towards the beginning of month, and kind of tired of looking at them by the end of the month.
  • APRIL: The coronavirus thing just continued to grind on and on, and I say that with all due respect to anyone reading this who has suffered serious health or financial consequences, or even lost someone they care about. After saying I was done posting coronavirus tracking and simulation tools, I continued to post them throughout the month – for example herehereherehere, and here. After reflecting on all this, what I find most frightening and depressing is that if the U.S. government wasn’t ready for this crisis, and isn’t able to competently manage this crisis, it is not ready for the next crisis or series of crises, which could be worse. It could be any number of things, including another plague, but what I find myself fixating on is a serious food crisis. I find myself thinking back to past crises – We got through two world wars, then managed to avoid getting into a nuclear war to end all wars, then worked hard to secure the loose nuclear weapons floating around. We got past acid rain and closed the ozone hole (at least for awhile). Then I find myself thinking back to Hurricane Katrina – a major regional crisis we knew was coming for decades, and it turned out no government at any level was prepared or able to competently manage the crisis. The unthinkable became thinkable. Then the titans of American finance broke the global financial system. Now we have a much bigger crisis in terms of geography and number of people affected all over the world. The crises may keep escalating, and our competence has clearly suffered a decline. Are we going to learn anything?
  • MAY: Potential for long-term drought in some important food-producing regions around the globe should be ringing alarm bells. It’s a good thing that our political leaders’ crisis management skills have been tested by shorter-term, more obvious crises and they have passed with flying colors…doh!
  • JUNE: The UN just seems to be declining into irrelevancy. I have a few ideas: (1) Add Japan, Germany, India, Brazil, and Indonesia to the Security Council, (2) transform part of the UN into something like a corporate risk management board, but focused on the issues that cause the most suffering and existential risk globally, and (3) have the General Assembly focus on writing model legislation that can be debated and adopted by national legislatures around the world.
  • JULY: Here’s the elevator pitch for why even the most hardened skeptic should care about climate change. We are on a path to (1) lose both polar ice caps, (2) lose the Amazon rain forest, (3) lose our productive farmland, and (4) lose our coastal population centers. If all this comes to pass it will lead to mass starvation, mass refugee flows, and possibly warfare. Unlike even major crises like wars and pandemics, by the time it is obvious to everyone that something needs to be done, there will be very little that can be done.
  • AUGUST: We just had the 15-year anniversary of Hurricane Katrina, a major regional crisis that federal, state, and local governments failed to competently prepare for or respond to. People died, and decades later the recovery is incomplete. Coronavirus proves we learned nothing, as it is unfolding in a similar way on a much larger and longer scale. There are many potential crises ahead that we need to prepare for today, not least the inundation of major cities. I had a look at the Democratic and (absence of a) Republican platforms, and there is not enough substance in either when it comes to identifying and preparing for the risks ahead.
  • SEPTEMBER: The Covid recession in the U.S. is pretty bad and may be settling in for the long term. Demand for the capital goods we normally export (airplanes, weapons, airplanes that unleash weapons, etc.) is down, demand for oil and cars is down, and the service industry is on life support. Unpaid bills and debts are mounting, and eventually creditors will have to come to terms with this (nobody feels sorry for “creditors”, but what this could mean is we get a full-blown financial panic to go along with the recession in the real economy.
  • OCTOBER: Global ecological collapse is most likely upon us, and our attention is elsewhere. The good news is we still have enough to eat (on average – of course we don’t get it to everyone who needs it), for now.
  • NOVEMBER:  It seems likely the Clinton-Bush-Obama-Trump U.S. foreign wars may just grind on endlessly under Biden. Prove us wrong, Joe! (I give Trump a few points for trying to bring troops home over the objections of the military-industrial complex. But in terms of war and peace, this is completely negated and then some by slippage on nuclear proliferation and weapons on his watch.)
  • DECEMBER: The “Map of Doom” identifies risks that should get the most attention, including antibiotic resistance, synthetic biology (also see below), and some complex of climate change/ecosystem collapse/food supply issues.

Most hopeful stories:

  • JANUARY: Democratic socialism actually does produce a high quality of life for citizens in many parts of the world. Meanwhile, the hard evidence shows that the United States is slipping behind its peer group in many measures of economic vibrancy and quality of life. The response of our leaders is to tell us we are great again because that is what we want to hear, but not do anything that would help us to actually be great again or even keep up with the middle of the pack. This is in the hopeful category because solutions exist and we can choose to pursue them.
  • FEBRUARY: A proven technology exists called high speed rail.
  • MARCH: Some diabetics are hacking their own insulin pumps. Okay, I don’t know if this is a good thing. But if medical device companies are not meeting their patient/customers’ needs, and some of those customers are savvy enough to write software that meets their needs, maybe the medical device companies could learn something.
  • APRIL: Well, my posts were 100% doom and gloom this month, possibly for the first time ever! Just to find something positive to be thankful for, it’s been kind of nice being home and watching my garden grow this spring.
  • MAY: E.O. Wilson is alive and kicking somewhere in Massachusetts. He says if we want to save our fellow species and ourselves, we should just let half the Earth revert to a natural state. Somewhat related to this, and not implying my intellect or accomplishments are on par with E.O. Wilson, I have been giving some thought to “supporting” ecosystem services in cities. When I need a break from intellectual anything, I have been gardening in Pennsylvania with native plants.
  • JUNE: Like many people, I was terrified that the massive street demonstrations that broke out in June would repeat the tragedy of the 1918 Philadelphia war bond parade, which accelerated the spread of the flu pandemic that year. Not only does it appear that was not the case, it is now a source of great hope that Covid-19 just does not spread that easily outdoors. I hope the protests lead to some meaningful progress for our country. Meaningful progress to me would mean an end to the “war on drugs”, which I believe is the immediate root cause of much of the violence at issue in these protests, and working on the “long-term project of providing cradle-to-grave (at least cradle-to-retirement) childcare, education, and job training to people so they have the ability to earn a living, and providing generous unemployment and disability benefits to all citizens if they can’t earn a living through no fault of their own.”
  • JULY: In the U.S. every week since schools and businesses shut down in March, about 85 children lived who would otherwise have died. Most of these would have died in and around motor vehicles.
  • AUGUST: Automatic stabilizers might be boring but they could have helped the economy in the coronavirus crisis. Congress, you failed us again but you can get this done before the next crisis.
  • SEPTEMBER: The Senate Democrats’ Special Committee on the Climate Crisis had the courage to take aim at campaign finance corruption as a central reason for why the world is in its current mess. I hate to be partisan, folks, but right now our government is divided into responsible adults and children. The responsible adults who authored this report are the potential leaders who can lead us forward.
  • OCTOBER: We have almost survived another four years without a nuclear war. Awful as Covid-19 has been, we will get through it despite the current administration’s complete failure to plan, prevent, prepare, respond or manage it. There would be no such muddling through a nuclear war.
  • NOVEMBER: The massive investment in Covid-19 vaccine development may have major spillover effects to cures for other diseases. This could even be the big acceleration in biotechnology that seems to have been on the horizon for awhile. These technologies also have potential negative and frivolous applications, of course.
  • DECEMBER: The Covid-19 vaccines are a modern “moonshot” – a massive government investment driving scientific and technological progress on a particular issue in a short time frame. Only unlike nuclear weapons and the actual original moonshot, this one is not military in nature. (We should be concerned about biological weapons, but let’s allow ourselves to enjoy this victory and take a quick trip to Disney Land before we start practicing for next season…) What should be our next moonshot, maybe fusion power?

Most interesting stories, that were not particularly frightening or hopeful, or perhaps were a mixture of both:

  • JANUARY: Custom-grown human organs and gene editing and micro-satellites, oh my!
  • FEBRUARY: Corporate jargon really is funny. I still don’t know what “dropping a pin” in something means, but I think it might be like sticking a fork in it.
  • MARCH: I studied up a little on the emergency powers available to local, state, and the U.S. federal government in a health crisis. Local jurisdictions are generally subordinate to the state, and that is more or less the way it has played out in Pennsylvania. For the most part, the state governor made the policy decisions and Philadelphia added a few details and implemented them. The article I read said that states could choose to put their personnel under CDC direction, but that hasn’t happened. In fact, the CDC seems somewhat absent in all this other than as a provider of public service announcements. The federal government officials we see on TV are from the “Institute of Allergies and Infectious Diseases”, which most people never heard of, and to a certain extent the surgeon general. I suppose my expectations on this were created mostly by Hollywood, and if this were a movie the CDC would be swooping in with white suits and saving us, or possibly incinerating the few to save the many. If this were a movie, the coronavirus would also be mutating into a fog that would seep into my living room and turn me inside out, so at least there’s that.
  • APRIL: There’s a comet that might be bright enough to see with the naked eye from North America this month. [Update: It wasn’t. Thanks, 2020.]
  • MAY: There are unidentified flying objects out there. They may or may not be aliens, that has not been identified. But they are objects, they are flying, and they are unidentified.
  • JUNE: Here’s a recipe for planting soil using reclaimed urban construction waste: 20% “excavated deep horizons” (in layman’s terms, I think this is just dirt from construction sites), 70% crushed concrete, and 10% compost.
  • JULY: The world seems to be experiencing a major drop in the fertility rate. This will lead to a decrease in the rate of population growth, changes to the size of the work force relative to the population, and eventually a decrease in the population itself.
  • AUGUST: Vehicle miles traveled have crashed during the coronavirus crisis. Vehicle-related deaths have decreased, but deaths per mile driven have increased, most likely because people drive faster when there is less traffic, absent safe street designs which we don’t do in the U.S. Vehicle miles will rebound, but an interesting question is whether they will rebound short of where they were. One study predicts about 10% lower. This accounts for all the commuting and shopping trips that won’t be taken, but also the increase in deliveries and truck traffic you might expect as a result. It makes sense – people worry about delivery vehicles, but if each parcel in the vehicle is a car trip to the store not taken, overall traffic should decrease. Even if every 5 parcels are a trip not taken, traffic should decrease. I don’t know the correct number, but you get the idea. Now, how long until people realize it is not worth paying and sacrificing space to have a car sitting there that they seldom use. How long before U.S. planners and engineers adopt best practices on street design that are proven to save lives elsewhere in the world?
  • SEPTEMBER: If the universe is a simulation, and you wanted to crash it on purpose, you could try to create a lot of nested simulations of universes within universes until your overload whatever the operating system is. Just hope it’s backed up.
  • OCTOBER: There are at least some bright ideas on how to innovate faster and better.
  • NOVEMBER: States representing 196 electoral votes have agreed to support the National Popular Vote Compact, in which they would always award their state’s electoral votes to the national popular vote winner. Colorado has now voted to do this twice. Unfortunately, the movement has a tough road to get to 270 votes, because of a few big states that would be giving up a lot of power if they agreed to it.
  • DECEMBER: Lists of some key technologies that came to the fore in 2020 include (you guessed it) mRNA vaccines, genetically modified crops, a variety of new computer chips and machine learning algorithms, which seem to go hand in hand (and we are hearing more about “machine learning” than “artificial intelligence” these days), brain-computer interfaces, private rockets and moon landings and missions to Mars and mysterious signals and micro-satellites and UFOs, virtual and mixed reality, social media disinformation and work-from-home technologies. The wave of self-driving car hype seems to have peaked and receded, which probably means self-driving cars will probably arrive quietly in the next decade or so. I was surprised not to see cheap renewable energy on any lists that I came across, and I think it belongs there. At least one economist thinks we are on the cusp of a big technology-driven productivity pickup that has been gestating for a few decades.

That’s a lot to unpack, and I’m not sure I can offer a truly brilliant synthesis, but below are a few things that are on my mind as I think through all this.

We Americans affirmed that we care about our parents and grandparents (then failed to fully protect them).

One thing I think we learned is that we still value human lives more than a cold, purely economic calculation might suggest, including the lives of our elderly parents and grandparents. (Though we had significant failures of execution when it came to actually protecting people – more on that later.) We have had this debate before in the U.S., for example when thinking about how much to invest in environmental and safety regulations as I was reminded of by this Planet Money podcast. At one point, politicians (can you guess from which party) proposed valuing the lives of senior citizens at lower rates than everyone else. The backlash was fierce and instant, and the proposal was withdrawn. This year, we did not really have that debate – it was simply accepted, for the most part, that we would be willing to endure significant economy-wide pain to try to protect our parents and grandparents.

I kind of liked how Mr. Money Mustache put it back in April. He gave a “worst case scenario” with 3 million deaths and a “best case scenario” with 200,000 deaths, and the reality is on track to be somewhere in between.

In the worst case, our public officials would all downplay the risk of COVID-19, and we’d keep working and traveling and spreading it freely. We’d maximize our economic activity and let the disease run its course…

In the more compassionate case which we are currently following, we drastically reduce the amount of contact we have with each other for a few months, which cuts the number of deaths in the US down from 3-6 million, down to perhaps 200,000. In exchange, our economy shrinks by several trillion dollars (it was about 21 trillion in 2019) for a year or more.

Assuming we are preventing 3 million early deaths, this means our society is foregoing about one million dollars of economic activity for each person’s life that we extend and frankly, it makes me happy to know we are capable of that.

Mr. Money Mustache

The leaders of some countries like Russia, Brazil, and even Sweden seem to have chosen to accept the consequences of business as usual. Most other countries have chosen to try to save human lives at the expense of short-term economic activity, and some executed this strategy much more effectively than others. In the U.S. and UK, we seem to be bumbling idiots who feel some compassion for one another.

The United States has been slipping for awhile, and in 2020 we faltered.

The U.S. continues to slip below average among its developed country peers in many statistical categories like life expectancy, violence, incarceration, suicide, poverty, and public infrastructure. I picture us like a horse that used to be leading the race, then slipped into the middle of the leading pack, and has now drifted toward the back of the leading pack and is continuing to lose ground. Keep slipping and we would no longer be part of the leading pack.

But then came Covid-19, our horse faltered, and all the other horses went thundering past, leaving us in last place. With the possible exception of the UK, we had the least effective response in the world. Like I said, I think a few countries like Russia, Brazil, and Sweden basically chose to accept the consequences of a limited response, and that is different than a failed response (though not to the people who died or whose loved ones died). We tried to respond, and it turned out our government was unprepared and incompetent even compared to developing countries.

So what happened? Some particular failing of the Anglo-American countries doesn’t explain it, because Canada and Australia both did pretty well. Our lack of a public health system (or even universal access to private care) doesn’t explain it, because the UK, Canada, and Australia all have similar systems to each other and divergent outcomes.

The difference between the extraordinary low rates in Asia, and the higher rates in Europe and the Americas is particularly stark. There are a couple things that I think may explain it. First is good airport screening. I traveled in Asia during the swine flu pandemic, and the screening is robust. The U.S. obviously has to beef up its health infrastructure at international airports and other border crossings (yes, there is a certain irony here that is lost on anti-immigrant types.) Part of this is also beefing up the data systems that track who is coming in from where, where they are going and what their status is. It became obvious within weeks that the CDC’s databases were a complete failure.

I think beyond border screening and data management, the other big difference between East and West is that Asian countries were willing to restrict physical movement and enforce quarantine, whereas western countries mostly were not. Had I exhibited symptoms while I was traveling in Singapore or Thailand during the swine flu, either country would have detained me in a government facility (with three meals a day and wi-fi, one would hope) for 14 days. Asian countries have also been willing to shut down domestic airports, train systems, and highways at times. Most western countries are simply not willing to do this. In the U.S., I think it is partly a matter of law and politics, but also a stupid idea that it would be “too expensive” when quite obviously it would have saved trillions of dollars in the long run. We simply don’t have the political will, the institutional mechanisms, or the basic competence. Covid-19 was a borderline crisis – a lot of people will lose cherished parents and grandparents but it is not an existential threat to our country’s survival. The U.S. needs to plan now to quarantine effectively in an even worse pandemic or god forbid, an incident involving biological weapons.

A few words on government agencies. Hurricane Katrina came up a few times in the monthly picks above. That was a major failure of federal, state, and local governments in the U.S. to plan, respond, and rebuild after a disaster. Before that, I would have assumed FEMA was up to the task, as they seem to have been in the past. Most people’s faith in the CDC was similar or even greater, and they turned out to be bumbling fools. The U.S. will need to fund its public agencies, stock them with competent, well-trained technocrats, and appoint talented political leaders to integrate them with the rest of society if they are going to function competently in the future.

In a hurricane, FEMA basically rolls into your city and takes charge, for better or worse. Early on, there was speculation that the CDC might try to do something similar in a disease outbreak. That didn’t happen. We will also need to adequately fund and train state and local agencies, if we are going to continue to put the lion’s share of the burden on them in a decentralized disaster like this. We could just get rid of the states and have the federal government work directly with metro areas, but this seems like a pretty pie in the sky idea politically.

What other government agencies do we have faith in that might have turned into rotten hollow logs while we weren’t paying attention? The Treasury and Federal Reserve do in fact seem to know what they are doing, which has saved us a couple times now in the last couple decades. We assume the military can fight a war if they need to. We assume the Department of Agriculture can feed us. Are we sure?

The democratization of propaganda.

Governments in general, and the U.S. government in particular, are having trouble getting messages out to their citizens. We used to worry about governments and big business controlling the media to put out purely ideological or purely profit-driven messages. Now anyone in the world can pretty much say anything anytime. People have trouble telling which messages are truthful and which are more reliable than others. In the U.S., this is combined with low trust in government and low trust in experts, and the result is that people either didn’t receive important messages about public health, or received a variety of conflicting information and noise and didn’t reach reasonable conclusions reading to reasonable decisions.

We hear a lot about “following the science” and “listening to scientists”, but this is really about policy communication not science communication. Scientists are trained to communicate uncertainty to each other. Often though, the uncertainty is low enough that it is clear one course of action has better odds of a good outcome than others. Media do not communicate this well – they tend to focus on the uncertainty statements scientists make, even when uncertainty is low and the best course of action is clear. The public is not prepared to process this information in a way that will lead to reasonable conclusions and decisions.

So we need to try to educate children to evaluate the source of information and think critically about whether it makes sense in the context of what they know. We need to educate them about uncertainty and decision making. We need to train journalists better to communicate scientific information but especially policy choices. Regulating social media companies might play some small role in this, but in the U.S. at least we don’t want to see a move toward censorship.

Back to the CDC. When Covid-19 hit, I was expecting the CDC to step in and dominate communications from the beginning on the issue. They needed to use all the tools modern advertising has to get messages across. I would have trusted what they said, and I think a lot of people would. If they had seized the initiative, it would have been hard for other voices to compete, and we might be in a better place now. Unfortunately, they have probably suffered a permanent loss of credibility both through poor communication and inadequate action, but better communication would definitely have helped. Make this one more U.S. institution that has lost credibility in my eyes as I have gotten older – Congress, the State Department, and the New York Times after weapons of mass destruction (I never trusted intelligence agencies), the military after the failures in Afghanistan and Iraq (I’m not saying I trusted them per se, but I thought they were good at fighting wars), FEMA after Hurricane Katrina (and more recently the horrific non-response in Puerto Rico), and now the CDC and federal public health establishment.

I have come to respect local public health authorities more through all of this. I actually work in the same building as my local public health agency, and know some people who work there, but I never really saw the connection to the larger health care system or my daily life before this. Part of the federal government’s communication strategy should be to package crystal clear messages for delivery by trusted local individuals like public health workers, family doctors, and school nurses.

Preparing for the big (and small) risks

Covid-19 has caused me to think even more about risk management. A major pandemic was something we knew was virtually certain to happen at some point, and we knew the consequences could be severe. And yet we still failed to adequately plan, prepare, and respond. There are a few other things in this category, like (obviously) another pandemic, a major earthquake, and sea level rise. Then there are risks where we are not sure of the probability, but the consequences could be catastrophic, like nuclear and biological war, ecological collapse, and major food shortages. (Alien invasion? No, I’m not really taking this seriously, but along with things like “gray goo” it should be on the list and discussed, providing a rational basis for taking action or not.) Then there are things that are certain to happen but are geographically limited (storms, fires, floods) or steadily kill a few people here and there adding up to a lot over time (car crashes, air pollution, poor nutrition). I am not sure where some risks fit in, for example cyberattacks or antibiotic resistance – but this is the point of gathering the information and having the discussions in a rational framework. In a rational world, a risk management framework provides a way to allocate finite resources (money, effort, expertise, research) to planning, preparing, mitigating, or simply choosing to accept each of these.

The state of scientific and technological progress (is the Singularity near yet?)

I had a decent technology list under “most interesting post” for December, so I won’t repeat it here.

Above, I find myself referring to the Covid vaccine as a “moon shot”. It is clearly an example of how a big government push can get a new technology over the finish line and bring it into widespread use quickly. I am wondering though if it is a true example of accelerating a scientific breakthrough, an example of accelerating application of a scientific breakthrough to new technology, or simple a case of government correcting a market failure. We had been hearing about mRNA vaccine technology for awhile, and we know a vaccine was developed for SARS but not widely deployed. We have also been hearing for awhile that drug companies were still growing basic childhood vaccines in chicken eggs, and not investing heavily in the mRNA technology, because the market demand and profit potential was not there in the rich countries to make it worth their while. So this was at least partially a case of the U.S. and other governments making that market failure go away by simply paying for everything and simply transferring the profits to those companies. I am not saying this is bad – we do it for arms manufacturers all the time, so why not vaccines?

Vaccines for HIV, dengue fever and other similar mosquito-borne diseases would be nice. One solution to antibiotic resistance might be bacteriophages – viruses tailored specifically to infect and kill specific bacteria. It seems like this technology could be applied to this. If antibiotic resistance is really the medium- to long-term emergency some say it is, maybe this should be a top priority.

This technology is also scary. It is the ability to create a custom organism that can go into a person’s body and have a specific desired effect. Vaccines are obviously a benign application, but somebody, somewhere, sometime will use this technology for evil. This seems like a near-existential risk on the horizon that needs to be dealt with.

I am going to say no, the Singularity is not imminent in 2021. Then again, the idea is that if at some point we hit the knee of the curve on technology and productivity, it will seem to accelerate all at once, because that is the nature of exponential change. If that happens, we will shrug and say we knew it all along. The trick is to find ways to drive innovation and progress while managing the risks that could temporarily but repeatedly set back or permanently derail that path, and without destroying our planetary ecosystem in the process. I am not ready to put odds on what outcome we are headed for, but I am hoping 2021 will at least bring a gradual return to the pre-Covid status quo, and allow us to set the stage for the future.

If anyone has actually read my ramblings all the way to this point, or just skipped to the end, Happy New Year!

a new “science of progress’

This article in the Atlantic says we need a “new science of progress”. It’s an interesting philosophical question – the universe is all around us, its secrets there for us to reach out and understand. The knowledge that exists to discover is not changing, and yet we seem to only be able to discover it in fits and starts. Are there things we could do to discover it faster? Well, there is something called the scientific method. There is something called technology. The field of economics certainly tries to study progress in a systematic way. How best to educate and train human beings is a perennial field of research. Maybe we need to mash all these together somehow, then add hefty doses of system thinking and data science? Or maybe we just need to find the really smart, innovative, unconventional thinkers and figure out how to harness their genius better?

This is exactly what Progress Studies would investigate. It would consider the problem as broadly as possible. It would study the successful people, organizations, institutions, policies, and cultures that have arisen to date, and it would attempt to concoct policies and prescriptions that would help improve our ability to generate useful progress in the future.

Along these lines, the world would benefit from an organized effort to understand how we should identify and train brilliant young people, how the most effective small groups exchange and share ideas, which incentives should exist for all sorts of participants in innovative ecosystems (including scientists, entrepreneurs, managers, and engineers), how much different organizations differ in productivity (and the drivers of those differences), how scientists should be selected and funded, and many other related issues besides.

The Atlantic