Marc Andreessen's blindness

Marc Andreessen is a wealthy venture capitalist who got his money from the IPO of his first company, Netscape. Recently he gave an interview to Vox explaining how he doesn't believe that we're on the way toward higher income inequality in the future.

The first point he makes is that economic gains must come from increases in productivity. This is just plain wrong. Another source of growth is simply population growth. Imagine an agricultural village with per capita income of 100 money. Add one more person working at the same potential. Now the economy is 100 money richer, without any increase in productivity.

Next, it's not even clear that productivity will all of a sudden stop improving  Productivity has been rising steadily, and while it's hard to pinpoint the exact cause of this, it is a definite upward trend. Saying that trend will stop is an assumption that should be backed up by evidence. The fact that there are no signs of stopping the existing automation trends seems to discount this theory.

Thridly, he says that the annualized return rate of S&P500 is flat for the last 15 years. While basically true, he picked the absolute worst period of time for returns. According to Wikipedia, the 5 year annualized returns are 18%, and 10, 20, and 25 year returns are 7, 9, and 10% respectively. There is no evidence that capital growth is slowing down.

The next point he makes is there is high turn over at the top, and therefore there doesn't seem to be solidification of family wealth. First of all, looking at only the very very top is misleading. The economy is not so static that people will stay at that position for very long. However, it's not as if those families and people are falling back down to even the 99% income level.

Additionally, we're only about  20 years away from the massive growth in income inequality. We won't see evidence of real solidification until the next generation, probably 30 to 40 years from now. The families at the top .1% will still be there, and their income will primarily come from capital rather than earned wages, if Piketty's hypothesis is correct.

Andreessen also says there is no mechanism by which the wealthy can benefit at the expense of the rest. This should be pretty obvious. The influence of money in politics controls the agenda of government. While they won't get everything they want, the it will be very hard to create policies which harm them. Policy solutions only hurt other groups. For example, despite the fact that there is no crisis in social security funds, pundits and politicians still discuss cutting benefits. Even if there were a shortfall, a small tax increase would cover it, but the solutions presented always end up damaging lower income workers.

In recent years, productivity gains have risen substantially, yet all the gains have been captured by capital (source). Political decisions also favor those of the donor class, and are almost completely unaffected by general public opinion (source). Both of these phenomenon point to increasing concentration of wealth.

Andreessen makes a comment that Marx was wrong that all the capital would flow to the capitalists. The VC must not have heard of the Gilded Age. The huge accumulation of wealth by the capitalists was only halted by the exact type of government Andreessen decries during the New Deal era of the 40s through the 60s. Not coincidentally, that was also a period of massive economic growth for the country.

Anthropology

People usually have an image of hanging out with preindustrial people in the middle of a jungle. While interesting, I wonder if there is any such research into modern culture. For example, is there any research into the fanbases of sports teams or music personalities?

Depending on the group, each fan base has a form of loose societal bonding of varying strengths. How these groups form and create these bonds when the members don't often meet should tell us something about the fundamental social wiring of human beings.

Personally, I have a hard time fitting in to new social groups. Yet tons of people on the internet can identify as fans of the same pop group or tv show. For example, the K Pop group Girl's Generation fans call themselves SONEs, (pronounced so-won) which just spontaneously arose form the lyrics of one of their songs. No one planned that. Yet thousands, or tens of thousands, or hundreds of thousands (who knows) of people came together with this common identity.

If that phenomenon isn't worthy of study, I don't know what is.

Those Other People

One thing that bothers me a lot about some people's prognostications is how little they trust other people. Everyone knows how much everyone else is a hard core moocher. But of course, they themselves would never do such a thing.

If everyone says everyone else is a moocher, but they aren't, what is that supposed to mean? Do we really have such little faith in other people that we can't come together to solve problems in the most obvious way?

Universal social security could help all people with financial security. Such a system wouldn't work if everyone decided to quit their jobs and just live off of the pension. But I wouldn't do that. I bet you wouldn't do that. Would so many people do it that it would break the system? Even if the pension was such a small amount of money, you'd be barely scraping by with it? Somehow I don't think that's very likely.

Still, everyone knows everyone else is a terrible person. Just not them.

The Naivete of Libertarianism

Libertarians are either naive or cruel. Somehow they all seem to have a condescending attitude whenever they write about thinkers of competing ideologies, but really it's their own ideology that makes the least sense.

Their first failure is believing that an unregulated market is a free market. That is not the definition of a free market. A free market requires symmetric information by all parties involved. An unregulated market does not require information to be spread to all participants, so it is not a free market.

Additionally, markets will never take into account externalities. Pollution and public health would greatly suffer if factories were able to pump their toxins into the atmosphere. Without some form of regulation, factors like these would never be checked.

Libertarians also think that any agreement by 2 people should be allowed. However, as any lawyer will tell you, drawing up agreements is very difficult and time consuming. There is a ton of paperwork involved in the purchase of a house, but all of those forms are standardized and governed by various laws. They are designed to protect both parties in the transaction. Imagine if both parties had to comb through each and every word to make sure that the other hadn't changed some wording to completely overhaul the document. It would be an overwhelming burden.

People also have limited brainpower. If every time I went to the store to buy some milk, it would drive me crazy if I had to check every label to make sure it was pasteurized, homogenized, safely transported, and every other imaginable factor in the safe creation of milk. Even if I did manage to get all of that information together, who would stop them from lying? Who would punish them if they did?

Somehow, libertarians think that other political philosophies are naive, when they are the ones who think that if there are no rules, everything would be fantastic. Well, at the dawn of mankind, there were no rules. If it was such a great system back then, why hasn't it lasted until the present day?

Libertarians might say that the rise of governments ruined the pure world that existed before. But if a libertarian world was unable to stop the rise of oppression, doesn't that also mean libertarianism wouldn't protect people from oppression anyways?

Of course, maybe libertarians don't care if oppression happens as a result. Often these types of people also think they're above average and would benefit from a society with less rules. In that case they're pretty much bullies who wish the teacher would go away so they could extract what they're owed by people "beneath" them. In any case, there's no reason to believe their utopia would lead to any better outcomes than those of other misguided idealists.

Dogma

One of the key features of human society is the ability to cooperate with total strangers. For example, coworkers are not likely to have met before starting their jobs, but none the less are able to work towards a common goal. People from the same nation feel a kinship with one another even though they have never met. The same goes for religion and ethnicity.

Some of these bonds are stronger than others. While big box store employees may or may not feel a connection with each other, people from the same church will likely sacrifice a great deal for one another. Part of this binding agent is the shared identity of those involved.

This shared identity has been manipulated by those who wish to create a more cohesive society. Extremist groups often have a very simple if unrealistic view of the world. However, this simplicity allows many people to identify with that ideology, and creates a very strong bond between people with otherwise nothing in common. The communists during the 20th century were great exploiters of this fact. Modern day radical Islamists are similarly able to forge strong bonds and loyalties.

While it is easy for people with less attachment to reality to come up with simple philosophies for people to rally around, the more same people of the world should not ignore the power of shared philosophy. Defining one that is both easy to understand and support yet also appeals to our higher aspirations over our base instincts is not a simple task, but such a philosophy would help bring together the sensible people of the world against insanity.

Freedom

In America, the word "Freedom" gets thrown around a lot. Whenever someone does something that conservatives don't like, they always say it's taking away our "Freedom". Anything from better science standards in education to universal healthcare brings an angry roar to preserve "Freedom".

Strictly speaking, the are right that these initiatives restrict people ability to do certain things. Background checks on guns will force people to reveal more about themselves to the government. Not allowing people to dump toxic waste in the river forces companies to invest in proper disposal.

However, everything is a trade off, and some freedoms are more important than others. Having background checks on gun purchases trades the ability to buy weapons freely for a greater freedom from armed criminals. Stopping toxic waste dumps may cost a company a lot of money, but people who depend on the water will be free to use it without the fear of contamination.

All the ridiculous opposition to any action which restricts an action is blind to the other freedoms we gain from that restriction. With a stronger social safety net, people will be able to take more risks to pursue their passions without endangering their own livelihoods or those of the people who depend on them. Allowing people to fulfill themselves is definitely worth the cost of a few more dollars in taxes.

The End of History

The way history is taught, everything is simply presented as fact. Every event inevitable. The steady march of time takes on a heavy sense of fate. The course was never in doubt. The ending written in advance.

Of course, that is definitely not the case. No one would have predicted the rise of Rome during the Hellenic era. While later writers wrote that Rome was the successor of the great Greek civilizations that came before it, that was more of a tacked on fiction than anything else. Yet its legacy lives on today, immortalized by their marks on modern European language and culture. Every great nation on the continent claimed bits of Rome's glory as their own.

In 1770, none of the British American colonists would have guessed that just 6 years later, they would be declaring independence from their overseas rulers. Even fewer would dare gamble that the new government would take representational democracy to a whole new level and forgo a monarch, unlike almost every other nation in Europe. Yet by 1790, independence was won, a constitution was written, and the world was changed.

However, despite the great uncertainty surrounding any event in history, all that has come to pass is usually taught as a series of immutable events. The rough spots are smoothed over, giving a false veneer of perfection.

Since everything seems to have wrapped up so perfectly, some may even forgo thinking about current events. The cold war is over! The good guys won! McDonald's and KFC for everyone! Just a few small issues like malaria and global warming will be fixed shortly, and then there's nothing more to worry about! Of course, anyone paying attention will realize there are still more problems to be had.

Even then, by the time it comes to think about continuing history, there is always a disjunction between the pretend perfection of the past and the messiness of the present. What we had been taught were the perfect solutions to past problems are applied with disastrous results to new issues. It seems like the living are less competent and all knowing than our wise predecessors. After all, they solved everything perfectly! The fact that everything seems so uncertain and dire to us must mean that everything will come crashing down. We have arrived at the end of history.

This perspective does no one any good. Glossing over the faults and uncertainty of the past just leaves us scared and confused when confronting the future. Not everything that has happened was meant to happen. Not all the issues that confront us are unsolvable, even if no one has ever solved them before. We must brush away the illusion that history was perfect, embrace the fragility of fate's path, and fight to harness it into a better future.