Posts Tagged ‘business’
“I went down the street to the 24-hour grocery. When I got there, the guy was locking the front door. I said, ‘Hey, the sign says you’re open 24 hours.’ He said, ‘Yes, but not in a row.'”*…
As Max Burns reports, a wave of corporate consolidation is reshaping the grocery industry; today, the U.S. has one-third fewer grocery stores than it did 25 years ago. The result is that just four corporations—Walmart, Kroger, Costco, and Albertsons—control more than two-thirds of the U.S. grocery market, This is squeezing workers, limiting competition, and giving this handful of retailers unprecedented control over what Americans pay for food…
If it feels to you like American consumers have fewer choices than ever before, your mind isn’t playing tricks on you. Federal regulators are approving corporate mega-mergers at the fastest rate since the 1980s. Consumers are feeling those industry-spanning consolidations everywhere, as hardly a sector of American life has escaped Wall Street’s goal of building the largest and most powerful corporate conglomerates in world history.
From power utilities and artificial intelligence to broadcast news networks and railroads, a few massive corporate players have come to dominate American commercial life in ways not seen since the Gilded Age trusts of the 19th century. Those consolidations have generated historic profits for executives and major shareholders while working families are faced with lower quality goods and services, fewer options, and a hostile labor market unfairly skewed toward the interests of the ultra-rich.
Democrats have been quick to criticize some of the nation’s biggest mergers as anti-worker and anti-consumer, but one critical sector of the U.S. economy has managed to escape widespread public criticism: grocery stores. Thanks to a record rise in special interest cash donations to both Democrats and Republicans, grocery-industry lobby groups have managed to keep prices high, wages low, and consumer choice limited while avoiding federal policymakers’ crosshairs. The result is an invisible crisis in the nation’s food industry that threatens to reshape how and what Americans eat.
In a corporate landscape defined by Republican deregulation, America’s grocery stores and food suppliers are consolidating despite active federal laws explicitly intended to prevent anticompetitive behavior. Perhaps the most important of those laws is the Robinson-Patman Act of 1936, or RPA, also known as the Anti-Price Discrimination Act. For decades, RPA ensured fair competition by banning food suppliers from charging different prices to different stores; at least it did until the Reagan-era Federal Trade Commission largely stopped enforcing it in the 1980s. Even though RPA is still the law of the land, food suppliers like Pepsi now routinely ignore the law without consequence.
“Big corporations have buying power, and they can oppress and dictate to producers what they want to pay for crops,” Rhode Island Lt. Gov. Sabina Matos told me. “A corporation can come to a farmer and say ‘we’ll pay you this price for potatoes, but you can’t give that price to anyone else,’ so they fix prices in a way that hurts independent supermarkets and independent businesses.”
Megacorporations aren’t subtle about flexing their market power to fix prices in ways that protect other megacorporations. Last year President Donald Trump’s FTC dismissed an RPA claim against PepsiCo which alleged that Pepsi illegally offered grocery chain Walmart unfair pricing discounts while charging smaller chains more for the same products. When independent grocery stores undercut Walmart by lowering the price of Pepsi products, PepsiCo allegedly responded by raising wholesale prices or refusing to do business with the smaller stores until they raised prices above those at Walmart.
As independent grocery stores struggle, they become more likely to sell out to larger national chains, leading to consolidation that makes both prices and employee wages less competitive. As president of the United Food and Commercial Workers International Union Local 3000, Faye Guenther represents over 50,000 grocery and retail workers across the Pacific Northwest. Guenther has spent years fighting the growing imbalance between rising prices and falling wages. Now, she says, things have reached a crisis point for regular Americans…
Read on for Burns’ looks at the impact on workers (TLDR: fewer jobs, lower wages), availability of stores (TDLR: or its opposite, food deserts), and food prices (TLDR: they’re rising), and for his suggested remedies.
The painful reality behind the joke “I’m getting stronger with age. I can now lift $100 worth of groceries with one hand!”: “America’s Grocery Monopoly Problem,” from @themaxburns.bsky.social in @damemagazine.bsky.social.
See also: “Grocery Retail: The Last Link in the Monopoly Chain.”
Also apposite: “Big Food Versus the People” (what court battles reveal about the ultra-processed food industry’s corporate litigation strategies). Further to which: “Is the recycling symbol free speech? A judge just ruled it could be“…
A pioneering California law meant to sharply limit use of the familiar “chasing arrows” recycling symbol has been blocked by a federal judge who said it probably violates the First Amendment.
In a preliminary injunction issued earlier this month, U.S. District Judge William Hayes halted enforcement of SB 343 after food, packaging and retail groups sued, finding that key provisions were “unconstitutionally vague” and likely infringed protected commercial speech. Enforcement of the law, passed in 2021, was expected to start this fall.
The decision is a blow to environmental advocates, who had hoped to remove the familiar symbol from a huge array of plastic products, in line with a statewide study showing that only a fraction are widely collected and actually recycled. SB 343 said only goods and packaging accepted by recycling programs serving at least 60 percent of Californians and then actually sorted for recycling — not collected and thrown away — could bear the chasing arrows.
Hayes’ constitutional reasoning surprised supporters of SB 343 because similar arguments against environmental marketing regulations have historically struggled in court….
Of course, there’s always eating out… but of course, that’s got its own issues: “The restaurant business is changing beyond recognition,” gift article from @economist.com.
Oh, and we might note that this is National Farmers Market Week.
* Steven Wright
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As we chow down, we might recall that it was on this date in 1930 that the officially-adjudicated “first supermarket” opened: King Kullen in Queens, New York.
Grocery chains had been around since 1859, when The Great Atlantic & Pacific Tea Company (A&P) was established. But they rarely sold fresh meat or produce and relied on the old mercantile system of clerks puling items from shelves on request. As long-time readers may recall, the first self-service grocery store was the Piggly Wiggly, which shifted to self-serve in 1916.
The first modern supermarkets appeared just over twenty years later, offering a full range of food items, beverages, and household items under one self-service roof, often with an emphasis on low prices as well as convenience. There were a number of contenders for the “first supermarket” crown…
To end the debate, the Food Marketing Institute in conjunction with the Smithsonian Institution and with funding from H.J. Heinz, researched the issue. They defined the attributes of a supermarket as “self-service, separate product departments, discount pricing, marketing and volume selling.” They determined that the first true supermarket in the United States was opened by a former Kroger employee, Michael J. Cullen, on 4 August 1930, inside a 6,000-square-foot former garage in Jamaica, Queens in New York City. The store King Kullen, operated under the logic of “pile it high and sell it cheap.” The store layout was designed by Joseph Unger, who originated the concept of customers using baskets to collect groceries before checking out at a counter. Everything displayed for sale in the store “had prices clearly marked”, meaning that consumers would no longer need to haggle over prices. Cullen described his store as “the world’s greatest price wrecker.” At the time of his death in 1936, there were seventeen King Kullen stores in operation. Although Saunders had brought the world self-service, uniform stores, and nationwide marketing, Cullen built on this idea by adding separate food departments, selling large volumes of food at discount prices and adding a parking lot. Moreover, the supermarket format as pioneered by King Kullen was not only cheap, but convenient, in how it combined so many different departments under one roof which had formerly required trips to separate stores. – source
“Let’s go to the numbers”*…
From the McKinsey Global Institute, the executive summary of their snapshot– a “balance sheet”– of the global economy…
• The global balance sheet takes stock of all assets, liabilities, and wealth, providing a lens into economic health. This annual update estimates that it reached nearly $1.8 quadrillion ($1,800 trillion) in 2025, up from $1.7 quadrillion in 2024. Several asset classes grew further out of balance with the underlying economy, raising the possibility of corrections through inflation, asset valuation losses, or, optimally, productivity growth.
• The balance sheet’s mounting detachment from the global economy was driven by the world’s two biggest economies in 2025. US equity values soared to 2.4 times corporate net assets as profits were double their share of GDP since 2000. China’s corporate debt grew to 80 percent of real assets, versus 50 percent globally. Government debt remains near all-time highs in the United States and has grown most rapidly in China.
• Globally, most corporate and household debt and real estate moved closer to 25-year averages relative to GDP. Inflation helped with this normalization, although values remain well above pre-2000 levels. The ratio of productive assets to GDP held steady amid flat investment.
• Global household wealth growth rose to a new high of $570 trillion, driven by “paper” gains. Only 20 percent came from real capital formation, while valuations of existing assets grew four percentage points faster than already-high consumer price inflation. In the United States and Canada, equity values drove wealth growth. China, France, and Germany saw a drop in paper wealth as real estate prices declined. In the United Kingdom and Japan, inflation pushed up asset values.
• Major economies were on different pathways entering 2026. The United States has been in a “productivity acceleration” scenario, but high public debt and equities add the possibility of “sustained inflation” or “balance sheet reset.” Europe has gravitated toward “secular stagnation” as sluggish demand depresses growth and interest rates. China has experienced a partial balance sheet reset amid declining property values, although government spending and corporate investment have continued to propel balance sheet growth.
In this report, we provide an update on the global balance sheet in 2025, exploring to what extent its recent expansion, and by extension wealth growth, has been “in balance.” The analysis finds that wealth was, to an even greater extent than previously, rooted in asset values rising faster than real economy investment and growth, creating record levels of global wealth “on paper.”
Although many economies that were studied experienced wealth and balance sheet swings, the global picture was largely driven by its two biggest: the United States and China. Higher US equity values and the accumulation of China’s public and private debt brought some near-term economic benefits but left their economies more vulnerable to potential corrections.
Businesses use both income statements and balance sheets to develop a complete picture of their financial health. Analysts of the global economy tend to focus on the former. Since 2021, MGI has developed a “global balance sheet” to fill this gap, representing a clearer view into the world economy’s wealth and health.
Our previous reports found that from the mid-1990s to the COVID-19 pandemic, household wealth expanded faster than gross domestic product. Asset prices for real estate, equities, and bonds grew, as did debt and deposits. This occurred amid declining (and eventually rock-bottom) interest rates, rapidly expanding US profits, and a property boom in China. Productivity did not keep pace across advanced economies, nor did real wealth formation through net new investment.
When the balance sheet outruns the underlying economy, weaknesses can be exposed. When real estate and equity values rise faster than GDP, capital may disproportionately go to asset repurchases, sometimes with a lot of leverage. This may push up valuations but leave the economy deprived of the type of investment that generates long-run growth. For households, wealth rises but merely on paper, with heightened risks of eventual corrections. Growing asset values also tend to exacerbate wealth inequality, as existing owners of wealth see large gains while entering asset markets becomes harder for others (for example, young households trying to buy a home).
Elevated balance sheets may correct in one of three ways. A productivity acceleration scenario involves higher income supporting high asset values and debt; this is the most preferred outcome. A sustained inflation scenario brings down the real values of assets and debt, recalibrating the balance sheet with higher nominal GDP. But it can erode inflation-adjusted wealth along with other undesirable side effects. A balance sheet reset scenario, entailing a drop in asset values, deleveraging, and defaults, would shrink the balance sheet in absolute terms, with severe wealth losses and, often, lengthy periods of lost economic growth. Or the balance sheet may just stay high, particularly under secular-stagnation-like conditions of low investment and interest rates, as seen in the United States and Europe in the 2010s. That’s seemingly good for wealth, but at the cost of low growth and rising leverage.
Historically, most balance sheet corrections have taken place through higher inflation. Indeed, the inflation coming out of the COVID-19 pandemic in the United States and Europe brought a correction in the balance sheet (and wealth) ratio to GDP. In China, a drop in property values drove a decline in wealth to GDP.
In 2025, global wealth reached a higher dollar value than ever before. But how “healthy” was this new growth? After postpandemic corrections, some balance sheet items have resumed expansion and reached new heights. This was particularly the case for US equity as AI fueled market optimism and corporate earnings continued to climb. Rising government debt relative to GDP remains a challenge in many economies amid higher interest rates. Stocks of currency and deposits remain high compared to longer-term historical norms. Altogether, this has culminated in even more wealth on paper than in the past several decades and raises the stakes for US corporate earnings to deliver.
Balance sheets, and macroeconomic factors like productivity and inflation, point to diverging trends across major economies. Recognizing the swing factors that can shift an economy to productivity acceleration is more urgent than ever: for the United States, corporate earnings and greater government saving (in other words, less borrowing); for Europe, greater investment; for China, higher domestic consumption.
Future global wealth and stability may depend on it…
[The report unpacks 0with lots of charts/data) the contents– the constituent elements– of the balance sheet, examines whether or not it is “in balance,” and considers whether the growth that it reflects has been “healthy.” (McKinsey worries that it has not been.) It concludes, addressing the executives who are McKinsey’s primary clients…]
… A balance sheet that is out of kilter with the economy—in other words, with high paper wealth fueled by debt and liquidity levels significantly above historical norms—can unwind via higher productivity, higher inflation, or asset price corrections. Balance sheets may also remain large, typically under secular-stagnation-like conditions, effectively kicking the can down the road for potential correction.
Each of these four scenarios shapes the long-term economic outlook. Only productivity acceleration delivers real economic growth justifying valuations, thus protecting wealth. The others sacrifice wealth, growth, or both. Sustained inflation reduces real values of wealth, secular stagnation sees low growth, and a balance sheet reset signals a loss of wealth and growth. Importantly for business leaders, two scenarios would likely mean structurally higher interest rates: Productivity acceleration would entail greater demand for capital amid higher business investment, while sustained inflation would likely involve central banks tightening policy rates and, ultimately, higher long-term yields.
All scenarios are possible for all major economies. However, they appear to be on different pathways, with different swing factors that could move them from one trajectory to another.
For executives, this means both preparing for an unusually broad array of economic pathways and carefully watching the swing factors, which rise above the noise of daily indicators (see sidebar “Business planning for all scenarios”). Leaders across sectors and industries could also explore ways to encourage the optimal outcome, the productivity acceleration scenario.
Major economies show significant divergence in trends across macro drivers of productivity, inflation, and interest rates, along with fundamental balance sheet components including real estate, equity, and debt.
The United States has seen a structural uptick in both productivity growth and interest rates relative to the prepandemic period. Productive investment, particularly driven by the tech sector, has recently grown. High equity values also signal market confidence, although they may pose some downside risks. Meanwhile, inflation remains above the Federal Reserve’s 2 percent target and government debt remains near all-time highs, adding further inflation risk.
The eurozone has experienced a return to secular-stagnation-like conditions, akin to the prepandemic period, amid flat productivity and higher saving. Europe’s balance sheets overall appear more in balance compared to the US balance sheet (with a few exceptions, such as Italy’s government debt). Productivity growth rates, however, are down across the region’s three largest economies (Germany, France, and Italy). Until recently, inflation was mostly trending toward the European Central Bank’s 2 percent target, although Europe is more exposed to energy price changes. Personal savings rates remain high amid a drop in aggregate demand and per capita household wealth has declined in PPP terms in Germany and France.3 Productive investment remains below prepandemic and global averages.
China continues to work through a partial balance sheet reset in the face of a continued decline in real estate, with questions about future growth drivers amid low household demand and a boom in corporate investment. Productivity growth has receded in recent years, although it remains above the rate in advanced economies. Inflation and, in tandem, nominal interest rates have dropped, and concerns have shifted to dealing with deflation risks. At a macro level, lower household property investment has been offset by higher corporate investment, especially among state-owned enterprises, and by government spending. This has coincided with a substantial rise in corporate and government debt, both reaching all-time highs.
While the United States is the only major economy showing signs of productivity acceleration, it is not guaranteed long term, and other economies have a potential path to it. Focusing on “swing factors” could help filter signal from noise in the daily flow of indicators, market fluctuations, and political headlines. These factors differ by economy.
In the United States, swing factors that could knock the economy out of productivity acceleration include the “fiscal tightrope” and corporate earnings.
- Government debt stands at about 120 percent of GDP. Combined with higher interest rates, this means more public spending will need to be directed toward debt repayment. Public spending could come under pressure, especially from bond investors, in the form of higher market interest rates. These translate into higher business costs of capital. If fiscal policy tightens too little, a public debt crisis or sustained inflation becomes more likely. Too much, and secular stagnation is a potential outcome. To bring budgets back into balance, greater fiscal saving (or lower borrowing) on the order of three percentage points of GDP would be needed.
- On the corporate-earnings side, an equity or wealth reset could be triggered by a large structural shift in the longer-term outlook—for example, from AI disappointment or large geopolitical disruption. Equities are at all-time highs, at 3.7 times GDP and 2.4 times net assets, and constitute nearly 40 percent of household wealth. A price correction could result in a sharp pullback in demand, ushering in an extended period of low growth. It is thus imperative that corporate earnings deliver on high expectations…
Eminently worth reading in full: “The global balance sheet 2026: Imbalance and divergence.”
See also: “World Economic Situation and Prospects 2026” from UNCTAD (the UN Trade and Development Organization), whose review of the global finacial situation resonates with McKinsey’s, but whose recommendations are targeted to global policy makers and development champions:
• Strengthen coordination across macroeconomic policies. Monetary policy alone cannot manage persistent price pressures. Better alignment between monetary, fiscal and industrial policies is essential to stabilise inflation, support investment and protect vulnerable groups.
• Use fiscal policy strategically and credibly. Targeted and temporary measures can help protect households from high prices and support social cohesion, while credible medium-term fiscal plans and prudent debt management are essential to rebuild fiscal space.
• Scale up multilateral cooperation and development finance. Implementing commitments under the Sevilla Commitment, including debt reform and expanded concessional and climate finance, is vital to closing investment gaps and reducing systemic risks.
• Reinforce an open, rules-based trading system. Strengthening transparency, predictability and cooperation in global trade remains central to sustaining growth and limiting fragmentation in an increasingly uncertain global economy.
And for a differently-flavored kind of accounting: “What the Big Mac index reveals about a global currency beef.”
* Catchphrase often used by financial and sports journalists to transition to statistics or financial data, e.g., on public radio’s wonderful Marketplace.
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As we ponder the political economy, we might recall (hoping that history doesn’t repeat itself) that on this date in 1929, while the U.S. economy was already showing signs of strain (agricultural strains and a sagging consumer market), the U.S., its businesses, and its financial markets were still in the “Roaring Twenties.” Roughly three months later (on October 24, 1929, “Black Thursday,” and October 29, 1929, “Black Tuesday”) America– and the world– suffered the Wall Street crash of 1929 and began the slide into the Great Depression.
By this date in 1932, stocks had lost roughly 90% of the value they had had three years earlier. GDP in the U.S. had fallen 30%; GDP around the world was down 15%. International trade fell by more than 50%, and unemployment in some countries rose as high as 33% (peaking in 1933 at 25% in the U.S.).
“If you optimize everything, you will always be unhappy.”*…
Phil Tinline on the history and consequences of the impulse to optimize businesses, markets, and governments…
Optimization means achieving a measurable objective—that is, maximizing or minimizing a given number. It requires controlling the inputs and processes that affect the objective, in order to find the most efficient way to achieve it. It draws on centuries of mathematical discovery, but it emerged in its modern form under the pressure of World War II and the need to manage the byzantine complexity of US military logistics.
In the summer of 1947, a Stanford-trained mathematical scientist named George Dantzig sat in his office at the Pentagon, laboring over US Air Force planning issues with a desk calculator. The problems he had dealt with during the war and since involved “an astronomical number of feasible solutions to choose from,” making it impossible to calculate which was the best. As he recalled, “Those in charge often do a hand-wave and say, ‘I’ve considered all the alternatives,’ but this is so much garbage.” All those leaders had to offer was that their “‘experience’ and ‘mature judgment’ would guide the way” by laying down rules that would limit the options.
The problem, Dantzig realized, was that “you could never find any direct relationship between the stated goal and the actions to achieve the goal.” The solution, he believed, was to formulate a complex real-world problem as a mathematical model. This could then be solved by what became Dantzig’s “simplex algorithm” (or “simplex method”), provided a precise goal was set as its “objective function.”
The simplex algorithm radically reduced the number of feasible solutions. It soon became clear that it could be brought to bear far beyond the military: “All one had to do,” Dantzig remembered, “was change the names of the columns and the rows, and it was applicable to an economic planning problem or to an industrial planning problem.”
In engineering, optimization was put to use in designing rockets and aircraft, and the shape of cars, wind turbines, and hydrofoils. It redefined manufacturing, circuit design, and the management of supply chains. Its impact is still visible in measures of the occurrence of the word “optimization” itself. Before 1950, the term was barely in use at all; thereafter, its frequency soared.
Economists embraced optimization too. An early application was in the development of “portfolio theory,” which, as the aerospace engineer Joaquim R. R. A. Martins and the computer scientist Andrew Ning put it, “formalized the idea of investment diversification, marking the birth of modern financial economics.”7 One important element of optimization in economics is the inclusion of constraining factors: Given a set level of income or cost, how can we maximize utility? But economics is not quite as scientifically determinable as engineering—it’s more exposed to messy, contradictory fellow humans. Here, optimization starts to look rather suboptimal…
… As computers have become ubiquitous, optimization has spread ever deeper into human life. In 2021, a trio of Stanford academics published a book titled System Error: Where Big Tech Went Wrong and How We Can Reboot. They observed: “What begins as a professional mind-set for the technologist easily becomes a more general orientation to life. … The paramount goal becomes removing friction from everyday activities, automating repetitive tasks, and finding ways to save time while improving outcomes.” US tech companies, for instance, are often led by software engineers, who manage their staff accordingly, measuring results against precisely set objectives. An over-dominant engineering mindset, System Error argued, is extending optimization beyond the areas where it can be effective.
This might surprise the tech analyst Dan Wang, whose 2025 bestseller Breakneck: China’s Quest to Engineer the Future argued that “an American elite, made up mostly of lawyers, excelling at obstruction” had much to learn from China’s “technocratic class, made up of mostly engineers, that excels at construction.” But even Wang admitted that engineering logic can be taken too far. “Sometimes, it feels like China’s leadership is made up entirely of hydraulic engineers,” he wrote, “who view the economy and society as liquid flows, as if all human activity—from mass production to reproduction—can be directed, restricted, increased, or blocked with the same ease as turning a series of valves.”
Given its mathematical foundations, optimization depends on having numerical data that can be adjusted to achieve the numerically expressed objective. As the American historian of science Theodore Porter showed in his 1995 study Trust in Numbers: The Pursuit of Objectivity in Science and Public Life, governments began to gather data at scale and to rely on it for decision-making for reasons similar to those set out by Dantzig—to get away from the subjective judgment of leaders.
However, Porter warned that while using numbers to exercise power objectively might be an attractive idea, it is also impossible to do. Even governments can’t count everything, and choosing what to leave out is an intensely political decision. Worse, Porter wrote, “numbers have often been an agency for acting on people, exercising power over them,” even turning people “into objects to be manipulated.” As Wang noted, in China the drive to meet numerical targets has sometimes taken a crushingly simple form, as with the government’s “one child” or “zero Covid” policies.
Even when optimizers aren’t sealing sick people in their homes, as the Chinese state did during the pandemic, they are often so focused on their objective that they don’t notice the damage they’re doing. Whatever is not relevant to the objective can be shrugged off as a so-called externality. Witness corporations optimizing their operations to maximize profits or the price of their shares. Some squeeze pay or working conditions; others pollute with abandon, or exploit their dominant market position to force down their suppliers’ prices, regardless of the impact.
And the problem with optimization is not just a matter of unfortunate side-effects. We are seeing the emergence of what we might call “social optimization”—the belief that this idea offers a way to transform society as a whole. But as Porter’s work suggests, this is not a matter of neutrally making things better. Optimization privileges the measurable over the unmeasurable. And it places the onus for improving society on the ever-striving individual rather than asking more fundamental, structural questions about why systems work as they do and whom they empower and disempower.
This is not an explicit ideology. No doubt, businesses and governments often are simply following the logic and opportunities implicit in new digital technology, from smartphones to the cameras and sensors that can now cheaply and efficiently monitor a wide range of activities. Nonetheless, as new technology has made it possible to gather ever more numerical data, optimization has begun to embed its implicit values into our lives.
In the workplace, this can swiftly make people’s lives worse. Particularly in sectors such as logistics, new technology allows employers to optimize more and more rigorously for maximum productivity and minimum cost. It has become commonplace to give employees an ongoing score, with the aim of incentivizing them to compete continually. This goes beyond even the monitoring of worker efficiency that the management consultant Frederick Taylor pioneered in the early twentieth century and the numerical key performance indicators that his successors promoted. The intensive quantification of employees’ performance has come to be known as “digital Taylorism.”
Optimization has refocused the media around the measurable preferences of the individual, as tallied in clicks, page views, unique browses, and similar metrics. This erodes the shared moments that build a culture and the shared truths that underpin democracy. Social media takes this even further: Algorithms are optimized to maximize attention, incentivizing people to respond to political issues not with thought but vivid expressions of feeling, rewarding users numerically in follows, likes, and shares. Meanwhile, tracking apps increasingly normalize the optimization of health metrics.
Yet technologists are keen to go much further. Off the back of their successes producing software, they are raising their sights to the horizon, optimizing for a few grand objectives at all costs, in pursuit of an ever more perfect world. They have formed an alliance with philosophers and philanthropists in the Effective Altruism movement, which aims to purge generosity of the influence of feeling in favor of calculable reason—even as it confidently prophesies the far future. Other tech leaders support the principles of the “network state.” According to the journalist Gil Duran, this concept proposes to create “private, corporate-controlled cities” that will liberate innovators from the constraints of the democratic state and its messy, unmeasurable trade-offs.13
And most of all, the dream of social optimization reverberates through promises of an AI-transformed future, in which once unthinkably efficient tech will supposedly liberate individual human potential. In “The Techno-Optimist Manifesto” (2023), the venture capitalist Marc Andreessen proposed using technology and the free market to maximize abundance to the point of infinity. Though Andreessen insists he does not believe in “the Unconstrained Vision of Utopia,” he dismisses the “Precautionary Principle” as an “enemy.”
The problem here is obvious to anyone not immersed in the culture of Silicon Valley. Not every worthwhile objective can be measured. How do we quantify social peace, for instance, or the health of our arts and culture, or the concentration of power? Or the worth of work itself, or a truly enriching education, or kindness? We might hope the realization that not everything can be measured would prompt the promoters of social optimization to accept its limitations and appreciate the qualities of more deeply rooted systems, such as democracy. Alas, they tend to conclude that if a goal or a problem has no measure, it is not worth bothering with. Kevin Kelly, a technology journalist and an apostle of the Quantified Self movement, has faced criticism, as he puts it, that “only intangibles like meaningful happiness count.” His response: “Meaningfulness is very hard to measure, which makes it very hard to optimize.” Similarly, in a critique of the US anti-monopoly movement, the journalist Matthew Yglesias has protested that “‘corporate power’ doesn’t mean anything” on the grounds that it “doesn’t add up to anything measurable or actionable.”
But this is not the first time similar-sounding criticisms have been raised against attempts to perfect society. Where they chose to focus their fire, and where they didn’t, reveals what’s distinctive about the phenomenon of social optimization…
[Tinline reaches back to the early 19th century (and the earliest known use of the word “optimize”) then follows the development of what has become a powerful mindset– in effect, a movement. He concludes…]
Governments today do have something to learn from Dantzig’s insistence on the importance of having a clear objective. But his overly dim view of leadership needs to be constrained. It is increasingly clear that, in the less calculable areas of life, a leader exercising human judgment is preferable to an implacable optimization algorithm. Without such human-centered constraints in place, social optimization won’t make things better—only more extreme.
On not letting the perfect be the enemy of the possible– and often the preferable: “The Cult of Optimization,” from @philtinline.bsky.social in The Ideas Letter.
We should note that the optimization craze has taken hold at the personal level as well, with similar results. See. e.g., “Optimising is just perfectionism in disguise. Here’s why that’s a problem” and “Optimization Culture Is Making Us Miserable.”
* Donald Knuth (the godfather of computer programming)
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As we celebrate slack and internalize externalities, we might spare a thought for a man who looked beyond the metrics od his day, Clifford W. Beers; he died on this date in 1943. An author and psychiatric patient, he is best known as the founder of the American mental hygiene movement.
Clifford Whittingham Beers was an American author and social reformer who wrote an autobiography documenting appalling conditions and maltreatment by staff of mental patients. His classic book, A Mind That Found Itself (1908) raised public consciousness of the need for reform. He had already himself experienced treatment as a mental patient, first in 1900, diagnosed with depression and paranoia. His four siblings also suffered mental health problems and died in mental hospitals, as he also did. In 1909, Beers founded the National Committee for Mental Hygiene (since renamed as Mental Health America) with the mission to improve the treatment in mental health institutions. By 1913, he was able to establish the Clifford Beers Clinic in New Haven, an outpatient mental health clinic, the first of its kind in the U.S., which continues his legacy to the present. – source
“The present is the past rolled up for action, and the past is the present unrolled for understanding”*…
As Jean-Baptiste Alphonse Karr put it, “plus ça change, plus c’est la même chose” (“the more things change, the more they stay the same”). Case in point: Derek Thompson reminds us that about 100 years ago, America was obsessed with technology, immigration, women, work, and money. Sound familiar?
[Just over] one hundred years ago, on September 26, 1929, President Herbert Hoover gathered a group of social scientists at the White House. He asked them to begin research on the most detailed report ever produced on the state of the nation. Four years later, running more than 1,500 pages long, Recent Social Trends was published, offering an unusually granular look at life in the mid-1920s.
The document is almost entirely forgotten. But today, for America’s 250th birthday, I’m blowing the cobwebs off this sucker and taking readers inside its yellowed pages for a look back at what life was like in the U.S. exactly 100 years ago, when the U.S. was celebrating its sesquicentennial anniversary…
And what a look it is…
… Imagine that you are the typical American in 1926. You are a white 26-year-old. (In 2026, the median age is 40.) Since most immigrants have been male, we’ll say you’re a guy. Your name is John. Born in the first term of William McKinley’s presidency, you are raised on a farm without flush toilets or electric lighting. Too young to fight in World War I, you come of age alongside a generation that sees war in Europe as a “useless colossal blunder,” in the words of historian David M. Kennedy. Your life—indeed, your entire generation—is shaped by several notable developments: education, urbanization, automation, and women’s rights. You are the first person in your family to finish high school.
At 19, you move from the countryside to an urban apartment, as one small drop in the migratory flood from farm to city. Jobs in manufacturing and retail are easy to find. They’re also easy to lose. Temporary unemployment is the norm. You earn $100 a month and put some away for a rainy day, confident that the bustling city will provide another job in a few months. (Unemployment insurance does not exist; neither does Social Security.) In the evenings, you “radio”; yes, it’s a verb, too. Every weekend, you visit a cineplex, where the movies are black-and-white and silent. Sometimes, you down a few prohibited cocktails and go dancing with flappers. Several times a week, you drive around in a black Model T.
The year 1926 has been good to you. City life is a blur of high-velocity machines—cars, assembly lines, and radio broadcasts—and you sometimes miss the ancient rhythms of your farmland home. One year from now, Charles Lindbergh will shock the world by flying across the Atlantic. In two years, at 28, you’ll be married. In three years, you’ll have a baby. And in four years, in 1930, just months after the biggest stock market crash in American history, the world as you know it will be over…
Thompson goes on to unpack the details of the economy and employment, the migration from farm to city, the extraordinary centrality of the automobile, changing mores and gender roles, the primacy of literature and the rise of radio, and so much more. He concludes…
The authors of Recent Social Trends were astonishingly prescient about the direction of technology. In one paragraph, they somehow anticipated the rise of audiobooks, YouTube, Netflix, smartphone cameras, musical software, ubiquitous air conditioning, and the electric battery revolution:
It may be that the world will find much use for talking books; school and college students may listen to lectures by long-running phonographs or talking pictures; moving pictures may be transmitted by wireless into houses; seeing with that new electric eye, the photo-electric cell, and recording what is seen, appear to have almost unlimited applications; new musical instruments different from any now in use may be given to us by electricity; the production of artificial climate may become widespread; an efficient storage battery of light weight and low cost might produce changes rivaling those of the internal combustion engine. And these are only a few of the myriad possibilities from new inventions in the future!
In an equally oracular section, the authors predicted the emergence of remote work and declining geographic mobility, anticipating that “the transmission of goods, of the voice and possibly of vision may act as a retarding influence on human mobility in the future and may cause a development of more remote and impersonal direction and controls.”
But the social scientists did not see these trends as altogether good. They worried that modern life, defined in equal parts by urbanization and technology, obliterated people’s values and their sense of self. Even as they gawked at the increase in patents—which grew more than 20-fold between the 1850s and the 1920s—they worried that a growing number of discoveries would bring “problems of morals, of education, of law, of leisure time, of unemployment, of speed, of uniformity and of differentiation.”
Social scientists of the 1920s saw machines pushing workers off of farms and competing with workers in manufacturing plants. How long, they wondered, until they would replace human workers in all tasks? “A larger proportion of work by machines, and a smaller proportion of human labor, is to be expected in the future,” they wrote. “There are indeed a few cases of wholly automatic factories and automatic stores and many automatic salesmen.” It is extraordinary to read these fears and not reflect on the AI jobs panic of the present, while also marveling at the thousands of occupations that are possible today precisely because machines made old jobs obsolete.
The dawn of the age of the machine drove us mad. Physicians of the day warned that the frail human mind was no match for the car, predicting at the time that “diseases of the wheel” would afflict the youth who rode bicycles and cars without restraint. It was not entirely obvious that they were wrong. In Germany, the number of patients registered in mental hospitals grew from 40,375 in 1870 to 220,881 in 1910. Over the same period, the share of patients admitted to general hospitals for illnesses of the nervous system rose from 44 to 60 percent.
Most perceptively, social critics of the age recognized that the urban-technological revolution of the early 20th century—what we might even call “modernity”—transformed not only our minds but also our values. Machines and systems that pulled Americans off the farm, away from the family home, and into churning markets of people and products threatened to replace the Judeo-Christian values that had bound the country for centuries with a new system of values dictated by markets. In 1903, the sociologist Georg Simmel anticipated the anxieties of the Twenties—ours and theirs—when he observed that in cities “money takes the place of all the manifoldness of things” and becomes “a common denominator of all values.” Money “hollows out the core of things, their peculiarities, their specific values, and their uniqueness and incomparability in a way which is beyond repair.”
One hundred and twenty years after the publication of that essay, the Wall Street Journal asked thousands of Americans what values were still important to them. While a declining share of Americans endorsed the worthiness of patriotism, religion, community, and children, the share who said “money” was “very important to them” went up. It sometimes seems as if markets and money are the last value standing, the final common denominator beneath all human endeavor.
On its 250th birthday, the U.S. similarly defines itself through markets. Those famous words of Calvin Coolidge, America’s president in 1926, could just as well serve this American president and this American moment: “The chief business of the American people is business.”…
Eminently worth reading in full: “America, 1926: What a Forgotten 100-Year-Old Report Says About Who We Are,” from @dkthomp.bsky.social.
You can find the full text of Recent Social Trends in the United States- Report of the President’s Research Committee on Social Trends, from the collection of the remarkable Prelinger Library, at the invaluable Internet Archive: Volume 1 and Volume 2.
* Will and Ariel Durent, The Lessons of History (in which, also: “Progress is an improvement in the means that we use for achieving the same old ends. I sometimes wonder if the progress is only of means without any progress in ends.”)
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As we hear the echo, we might recall that today marks the anniversary of a signature advance during the period covered by Recent Social Trends in the United States: on this date in 1928, sliced bread was sold for the first time, by the Chillicothe Baking Company of Chillicothe, Missouri.
For more on this seminal development, see “What was the best thing before sliced bread?“
“The clearest way to see through a culture is to attend to its tools for conversation”*…
Matt Pearce revisits Neil Postman‘s 1992 Technopoly: The Surrender of Culture to Technology…
In the 1960s, a German-American computer scientist named Joseph Weizenbaum coded an early version of today’s AI chatbots. Weizenbaum called his program ELIZA, after the “My Fair Lady” character Eliza Doolittle who takes speech lessons (and gets better).
How people reacted to Weizenbaum’s crude creation tells us almost everything we need to know about AI hype more than half a century later.
ELIZA could hold basic “conversations,” including playing the role of a psychotherapist with real human users. [In the example above, ELIZA’s responses to one woman are shown in capital letters.]
Anybody with a cursory awareness of recent headlines about AI romances and AI psychosis already knows where this is going. ELIZA’s human interlocuters in the 1960s, despite talking to a clunky machine they knew had been programmed by Weizenbaum, refused to believe that they were talking to a mere machine. His secretary, having watched him build the contraption over several months, after just a few exchanges with ELIZA, asked Weizenbaum to leave the room so she could have some privacy.
Weizenbaum, exhibiting a bit of Freudian sangfroid about all this, was not surprised to see people form emotional attachments with inanimate objects. He’d already seen people get attached to their cars or guitars or computers. But “what I had not realized is that extremely short exposures to a relatively simple computer program could induce powerful delusional thinking in quite normal people,” Weizenbaum wrote in his 1976 book “Computer Power and Human Reason: From Judgment to Calculation.”…
… I learned about Weizenbaum’s ELIZA experiment from Neil Postman’s 1992 book “Technopoly: The Surrender of Culture to Technology,” a work of technoconservatism that, like Weizenbaum’s writings, was imbued with foresight about our struggles with today’s vastly more powerful technologies.
Consider this passage from Postman’s “Technopoly”:
In a technocracy, tools play a central role in the thought-world of the culture. Everything must give way, in some degree, to their development. The social and symbolic worlds become increasingly subject to the requirements of that development. Tools are not integrated into the culture; they attack the culture. They bid to become the culture. As a consequence, tradition, social mores, myth, politics, ritual, and religion have to fight for their lives.
Technology, attacking and taking over the culture? Bending society to its own imperative for advancement? In my United States of America? Postman (most famous for writing “Amusing Ourselves to Death”) thought the U.S. was the world’s first “Technopoly,” a society marked by “the submission of all forms of cultural life to the sovereignty of technique and technology,” where information itself has become a form of pollution.
To Postman, “the milieu in which Technopoly flourishes is one in which the tie between information and human purpose has been severed, i.e., information appears indiscriminately, directed at no one in particular, in enormous volume and at high speeds, and disconnected from theory, meaning or purpose.”
Neil Postman wrote “Technopoly” before the introduction of ChatGPT and Sora; TikTok and YouTube; Twitter and Facebook; Google Search and the Netscape browser. Postman wrote the book before Windows 95 existed. A philosophy of technology that mostly holds up through successive eras of technical revolution has already passed time’s first test, which is for the philosophy to outlive the philosopher. And Postman’s philosophy is ultimately conservative, motivated by the desire to preserve the traditions of humanism, social cohesion and a shareable sense of collective history.
Technoconservatism was old before it was new. Postman quotes Plato’s “Phaedrus,” where Thamus warns that whoever learns writing (one of our first dangerous technologies) “will cease to exercise their memory and become forgetful” and “will receive a quantity of information without proper instruction, and in consequence be thought very knowledgeable when they are for the most part quite ignorant.” And Postman, to his credit, is like — well, yeah! Writing really did that. A new technology is neither good nor bad, but ecological: it “does not add or subtract something. It changes everything. In the year 1500, fifty years after the printing press was invented, we did not have old Europe plus the printing press. We had a different Europe.”
In previous generations, societies dealt with information revolutions (which always produced information gluts) by creating institutions that prioritize “good” information and deprioritize the bad; think about schools with their organized curricula, courts with their standards of evidence, newspapers with their party lines or codes of journalistic ethics. But Postman notes that we got lucky after the Gutenberg revolution, when information technology’s development slowed down long enough for societies to catch up and be excellent:
From the early seventeenth century, when Western culture undertook to reorganize itself to accommodate the printing press, until the mid-nineteenth century [with the invention of the telegraph], no significant technologies were introduced that altered the form, volume, or speed of information. As a consequence, Western culture had more than two hundred years to accustom itself to the new information conditions created by the press. It developed new institutions, such as the school and representative government. It developed new conceptions of knowledge and intelligence, and a heightened respect for reason and privacy. It developed new forms of economic activity, such as mechanized production and corporate capitalism, and even gave articulate expression to the possibilities of a humane socialism. New forms of public discourse came into being through newspapers, pamphlets, broadsides, and books. It is no wonder that the eighteenth century gave us in the work of Goethe, Voltaire, Diderot, Kant, Hume, Adam Smith, Edmund Burke, Vico, Edward Gibbon, and, of course, Jefferson, Madison, Franklin, Adams, Hamilton, and Thomas Paine. I weight the list with America’s “Founding Fathers” because technocratic-typographic America was the first nation ever to be argued into existence in print.
Contrast the luxuriously slow social pace of the Gutenberg era with today’s information development timelines. Over the course of three decades, we’ve seen the rise and now-decline of the open web; the rise and now-decline of social media; the rise of short-form video and the rise of chatbots and synthetic information. All created enormous economic and philosophical disruptions whose fundamental impacts you can’t get a group of people in a room together to describe accurately. Among the disruptions: These increasingly efficient forms of sharing information keep encountering falling test scores; universities are trying to implement AI as their own students use it for cheating or boo the tech at their graduations; people are falling in love with their chatbots, which sometimes tell their users to kill themselves. A society that wants to understand itself probably wouldn’t act like this…
Read on for how we might — dare one suggest, should— act: “A society that wants to understand itself probably wouldn’t act like this,” from @mattdpearce.com.
Compare to/contrast with with Yuval Avnar‘s riff on Pascal’s musing on the implications of his invention, the “arithmetic machine” (an early, if not the first, modern mechanical calculator): “The Inventor of the Thinking Machine Didn’t Worry. Neither Should You.“
* Neil Postman, Amusing Ourselves to Death: Public Discourse in the Age of Show Business
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As we introspect, we might send pointed birthday greetings to Ambrose Bierce; he was born on this date in 1842. His satirical lexicon The Devil’s Dictionary was named as one of “The 100 Greatest Masterpieces of American Literature” by the American Revolution Bicentennial Administration. His story “An Occurrence at Owl Creek Bridge” has been described as “one of the most famous and frequently anthologized stories in American literature”; and his book Tales of Soldiers and Civilians (also published as In the Midst of Life) was named by the Grolier Club as one of the 100 most influential American books printed before 1900.
A prolific and versatile writer, Bierce was regarded as one of the most influential journalists in the United States, and as a pioneering writer of realist fiction. For his horror writing, Michael Dirda ranked him alongside Edgar Allan Poe and H. P. Lovecraft. S. T. Joshi argues that he may well be the greatest satirist America has ever produced, and can take his place with such figures as Juvenal, Swift, and Voltaire. His war stories influenced Stephen Crane, Ernest Hemingway, and others; and he was an influential and feared literary critic. In recent decades Bierce has gained even wider regard as a fabulist and for his poetry.
In 1913, Bierce told reporters that he was travelling to Mexico to gain first-hand experience of the Mexican Revolution. He disappeared over the border and was never seen again.
Apropos the piece featured above:
TELEPHONE, n. An invention of the devil which abrogates some of the advantages of making a disagreeable person keep his distance.
– The Devil’s Dictionary
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