Monday, September 30, 2019

Vox Popoli: The clueless and short-sighted elite

Peter Turchin explains that the US elite is working off of inaccurate and misleading social models:

Last year I had an interesting conversation with someone I’ll call the Washington Insider. She asked me why my structural-demographic model predicted rising instability in the USA, probably peaking with a major outbreak of political violence in the 2020s. I started giving the explanation based on the three main forces: popular immiseration, intra-elite competition, and state fragility. But I didn’t get far because she asked me, what immiseration? What are you talking about? We’ve never lived better than today. Global poverty is declining, child mortality is declining, violence is declining. We have access to the level of technology that is miraculous compared to what previous generations had. Just look at the massive data gathered together by Max Rosen, or read Steven Pinker’s books to be impressed with how good things are.

There are three biases that help sustain this rosy view. First, the focus on global issues. But the decrease of poverty in China (which is what drives declining global poverty, because Chinese population is so huge), or the drop in child mortality in Africa, is irrelevant to the working America. People everywhere compare themselves not to some distant places, but to the standard of living they experienced in their parents home. And the majority of American population sees that in many important ways they are worse off than their parents (as we will see below).

Second, the Washington Insider talks to other members of the 1 percent, and to some in the top 10 percent. The top-income segments of the American population have done fabulously in the last decades, thank you very much.

Third, many economic statistics have to be taken with a grain of salt. Government agencies are often under substantial political pressure to put a positive spin on the statistics they publish. Many economists work hard to please the economic elites and other powers-that-be, because that’s how you get ahead in that profession. Fortunately, there are enough “heterodox” economists who provide us with alternative views. This all doesn’t mean that statistics are worse than “damn lies”; on the contrary, one cannot make sense about where we are headed without statistics. The point here is that one needs to understand why different statistics may give us different answers.

This is more than a little reminiscent of the Boomer cluelessness that simply can't grasp the significance of a rise in tuition from 500/semester to 15,000/semester when wages have not risen. Not a single American cares about the rising Chinese standard of living when his own has declined, and declined significantly in comparison with his parents.

What we've witnessed over the last 50 years is the mass transfer of American wealth and property title from the middle classes to the elite of the US elite. These indicates that revolution is coming, sooner or later, in one way or another. Right now, the average citizen is content with Taco Bell and Netflix... but Netflix is becoming less entertaining with every season that passes.

The problem, of course, is one of labor oversupply.

The American economy has been operating under the conditions of labor oversupply since roughly the 1970s. The main causes were immigration, the entry of massive numbers of baby boomers and women into the labor force, the export of jobs overseas.
- Peter Turchin