Posts Tagged ‘neoliberalism’
“Without reflection, we go blindly on our way”*…
… or at least sociopathic. Indeed, Evgeny Morozov suggests, we may be well on our way. There may be versions of A.G.I. (Artificial General Intelligence) that will be a boon to society; but, he argues, the current approaches aren’t likely to yield them…
… The mounting anxiety about A.I. isn’t because of the boring but reliable technologies that autocomplete our text messages or direct robot vacuums to dodge obstacles in our living rooms. It is the rise of artificial general intelligence, or A.G.I., that worries the experts.
A.G.I. doesn’t exist yet, but some believe that the rapidly growing capabilities of OpenAI’s ChatGPT suggest its emergence is near. Sam Altman, a co-founder of OpenAI, has described it as “systems that are generally smarter than humans.” Building such systems remains a daunting — some say impossible — task. But the benefits appear truly tantalizing.
Imagine Roombas, no longer condemned to vacuuming the floors, that evolve into all-purpose robots, happy to brew morning coffee or fold laundry — without ever being programmed to do these things.Sounds appealing. But should these A.G.I. Roombas get too powerful, their mission to create a spotless utopia might get messy for their dust-spreading human masters. At least we’ve had a good run.Discussions of A.G.I. are rife with such apocalyptic scenarios. Yet a nascent A.G.I. lobby of academics, investors and entrepreneurs counter that, once made safe, A.G.I. would be a boon to civilization. Mr. Altman, the face of this campaign, embarked on a global tour to charm lawmakers. Earlier this year he wrote that A.G.I. might even turbocharge the economy, boost scientific knowledge and “elevate humanity by increasing abundance.”
This is why, for all the hand-wringing, so many smart people in the tech industry are toiling to build this controversial technology: not using it to save the world seems immoral. They are beholden to an ideology that views this new technology as inevitable and, in a safe version, as universally beneficial. Its proponents can think of no better alternatives for fixing humanity and expanding its intelligence.But this ideology — call it A.G.I.-ism — is mistaken. The real risks of A.G.I. are political and won’t be fixed by taming rebellious robots. The safest of A.G.I.s would not deliver the progressive panacea promised by its lobby. And in presenting its emergence as all but inevitable, A.G.I.-ism distracts from finding better ways to augment intelligence.
Unbeknown to its proponents, A.G.I.-ism is just a bastard child of a much grander ideology, one preaching that, as Margaret Thatcher memorably put it, there is no alternative, not to the market.
Rather than breaking capitalism, as Mr. Altman has hinted it could do, A.G.I. — or at least the rush to build it — is more likely to create a powerful (and much hipper) ally for capitalism’s most destructive creed: neoliberalism.
Fascinated with privatization, competition and free trade, the architects of neoliberalism wanted to dynamize and transform a stagnant and labor-friendly economy through markets and deregulation…
… the Biden administration has distanced itself from the ideology, acknowledging that markets sometimes get it wrong. Foundations, think tanks and academics have even dared to imagine a post-neoliberal future.Yet neoliberalism is far from dead. Worse, it has found an ally in A.G.I.-ism, which stands to reinforce and replicate its main biases: that private actors outperform public ones (the market bias), that adapting to reality beats transforming it (the adaptation bias) and that efficiency trumps social concerns (the efficiency bias).These biases turn the alluring promise behind A.G.I. on its head: Instead of saving the world, the quest to build it will make things only worse. Here is how…
[There follows a bracing run-down…]
… Margaret Thatcher’s other famous neoliberal dictum was that “there is no such thing as society.”The A.G.I. lobby unwittingly shares this grim view. For them, the kind of intelligence worth replicating is a function of what happens in individuals’ heads rather than in society at large.
But human intelligence is as much a product of policies and institutions as it is of genes and individual aptitudes. It’s easier to be smart on a fellowship in the Library of Congress than while working several jobs in a place without a bookstore or even decent Wi-Fi.
It doesn’t seem all that controversial to suggest that more scholarships and public libraries will do wonders for boosting human intelligence. But for the solutionist crowd in Silicon Valley, augmenting intelligence is primarily a technological problem — hence the excitement about A.G.I.
However, if A.G.I.-ism really is neoliberalism by other means, then we should be ready to see fewer — not more — intelligence-enabling institutions. After all, they are the remnants of that dreaded “society” that, for neoliberals, doesn’t really exist. A.G.I.’s grand project of amplifying intelligence may end up shrinking it.
Because of such solutionist bias, even seemingly innovative policy ideas around A.G.I. fail to excite. Take the recent proposal for a “Manhattan Project for A.I. Safety.” This is premised on the false idea that there’s no alternative to A.G.I.But wouldn’t our quest for augmenting intelligence be far more effective if the government funded a Manhattan Project for culture and education and the institutions that nurture them instead?
Without such efforts, the vast cultural resources of our existing public institutions risk becoming mere training data sets for A.G.I. start-ups, reinforcing the falsehood that society doesn’t exist…
If it’s true that we shape our tools, then our tools shape us, then it behooves us to be very careful as to how we shape them… Eminently worth reading in full: “The True Threat of Artificial Intelligence” (gift link) from @evgenymorozov in @nytimes.
Apposite: on the A. I. we currently have: “The LLMentalist Effect: how chat-based Large Language Models replicate the mechanisms of a psychic’s con,” from @baldurbjarnason.
[Image above: source]
* Margaret J. Wheatley
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As we set aside solutionism, we might we might send thoroughly-organized birthday greetings to Josiah Wedgwood; he was born on this date in 1730. An English potter, businessman (he founded the Wedgwood company), and inventor (he designed the company’s process machinery and high-temperature beehive-shaped kilns), he is credited, via his technique of “division of labor,” with the industrialization of the manufacture of pottery– and via his example, much of British (and thus American) manufacturing. Wedgwood was a member of the Lunar Society, the Royal Society, and was an ardent abolitionist. His daughter, Susannah, was the mother of Charles Darwin.
“The only corporate social responsibility a company has is to maximize its profits”*…
Congressman Fred Hartley and Senator Robert Taft, namesake co-sponsors of the 1947 Taft-Hartley Act (which figures in the tale referenced below)
… Happily that wasn’t always the accepted belief, and may some day recede. The redoubtable Bill Janeway explains– and laments– the passing of corporations that felt a duty to constituents other than their shareholders…
In his new book Slouching towards Utopia, the economist J. Bradford DeLong points out, correctly, that the “industrial research laboratory and the modern corporation” were the keys to unleashing a radical increase in the rate of scientific and technological innovation, and thus economic growth, from 1870 onward. DeLong also identifies the Treaty of Detroit, a landmark 1950 settlement between General Motors and the United Auto Workers, as a linchpin of American-style post-World War II social democracy. But what ever happened to the behemoth corporations that unlocked decades of growth while sponsoring health insurance and pensions for their employees?…
The rise of the neoliberal order in the 1970s and 1980s coincided with the demise of companies that served their societies and employees as well as their shareholders. Since then, the US federal government and other institutions have managed to offset the loss of only part of the broader contributions that big business once made. The fascinating, sad story at “The Rise and Fall of the Socially Beneficial Corporation,” from @billjaneway in @ProSyn.
* Milton Friedman, intellectual leader– and avatar– of the neoliberal order
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As we learn from the past, we might send inclusively-calculated birthday greetings to a Cambridge University faculty colleague of Bill’s, Sir Partha Sarathi Dasgupta; he was born on this date in 1946. An Anglo-Indian economist, Dasgupta’s contributions have been broad, covering welfare and development economics; the economics of technological change; population, environmental, and resource economics; social capital; the theory of games; ecological economics; and the economics of malnutrition. His deepest interest has been in ecological economics, more particularly in the nexus of population, consumption, and the natural environment and in the economics of biodiversity. With the late Karl-Goran Maler, he developed the concept of “inclusive wealth” as a measure of human well-being.
“The function of small corner shops in maintaining cities as viable social institutions does not appear in the Washington consensus. The possibility that corner shops may do better at safeguarding social cohesion than mass imprisonment is considered outlandish – if it is considered at all.”*…
For decades, globalist neoliberalism (and here) has driven the policies and practices and political, commercial, and financial leaders and institutions across the developed– and given development policy, the developing– world. Rana Foroohar argues that its time may be up; geography is retaking the upper hand…
For most of the last 40 years, U.S. policymakers acted as if the world were flat. Steeped in the dominant strain of neoliberal economic thinking, they assumed that capital, goods, and people would go wherever they would be the most productive for everyone. If companies created jobs overseas, where it was cheapest to do so, domestic employment losses would be outweighed by consumer benefits. And if governments lowered trade barriers and deregulated capital markets, money would flow where it was needed most. Policymakers didn’t have to take geography into account, since the invisible hand was at work everywhere. Place, in other words, didn’t matter.
U.S. administrations from both parties have until quite recently pursued policies based on these broad assumptions—deregulating global finance, striking trade deals such as the North American Free Trade Agreement, welcoming China into the World Trade Organization (WTO), and not only allowing but encouraging American manufacturers to move much of their production overseas. Free-market globalism was of course pushed in large part by the powerful multinational companies best positioned to exploit it (companies that, of course, donated equally to politicians from both major U.S. parties to ensure that they would see the virtues of neoliberalism). It became a kind of crusade to spread this new American creed around the globe, delivering the thrill of fast fashion and ever-cheaper electronic gadgets to consumers everywhere. American goods, in effect, would represent American goodness. They would advertise American philosophical values, the liberalism tucked inside neoliberalism. The idea was that other countries, delighted by the fruits of American-style capitalism, would be moved to become “free” like the United States.
By some measures, the results of these policies were tremendously beneficial: American consumers in particular enjoyed the fruits of cheap foreign manufacturing while billions of people were lifted out of poverty, especially in developing countries. As emerging markets joined the free-market system, global inequality declined, and a new global middle class was born. How free it was politically, of course, depended on the country.
But neoliberal policies also created immense inequalities within countries and led to sometimes destabilizing capital flows between them. Money can move much faster than goods or people, which invites risky financial speculation. (The number of financial crises has grown substantially since the 1980s.) What is more, neoliberal policies caused the global economy to become dangerously untethered from national politics. Through much of the 1990s, these tectonic shifts were partly obscured in the United States by falling prices, increased consumer debt, and low interest rates. By the year 2000, however, the regional inequalities wrought by neoliberalism had become impossible to ignore. While coastal U.S. cities prospered, many parts of the Midwest, the Northeast, and the South were experiencing catastrophic job losses. Average incomes among U.S. states began to diverge, having converged throughout the 1990s…
Since the beginning of the neoliberal era, a handful of economists had pushed back against the received wisdom of the field. Karl Polanyi, an Austro-Hungarian economic historian, critiqued classical economic views as early as 1944, arguing that totally free markets were a utopian myth. Scholars of the postwar period, including Joseph Stiglitz, Dani Rodrik, Raghuram Rajan, Simon Johnson, and Daron Acemoglu, also understood that place mattered. As Stiglitz, who grew up in the Rust Belt, once told me, “It was obvious if you were raised in a place like Gary, Indiana, that markets aren’t always efficient.”
This view, that location plays a role in determining economic outcomes, is only just beginning to land in policy circles, but a growing body of research supports it. From the work of Thomas Piketty, Emmanuel Saez, and Gabriel Zucman to that of Raj Chetty and Thomas Philippon, there is now a consensus among scholars that geographically specific factors such as the quality of public health, education, and drinking water have important economic implications. That might seem intuitive or even obvious to most people, but it has only recently gained broad acceptance among mainstream economists. As Peter Orszag, who served as President Barack Obama’s budget director, told me, “If you ask a normal human being, ‘Does it matter where you are?’ they would start from the presumption that ‘Yes, where you live and where you work and who you’re surrounded by matters a ton.’ It’s like Econ 101 has just gone off the path for the last 40 to 50 years, and we’re all little islands atomized into perfectly rational calculating machines. And policy has just drifted along with this thinking.” He added, “The Economics 101 approach, which is place-agnostic, has clearly failed.”
The importance of place has become even more evident since the start of the COVID-19 pandemic, the economic decoupling of the United States and China, and Russia’s war in Ukraine. Globalization has crested and begun to recede. In its place, a more regionalized and even localized world is taking shape. Faced with rising political discontent at home and geopolitical tensions abroad, governments and businesses alike are increasingly focused on resilience in addition to efficiency. In the coming post-neoliberal world, production and consumption will be more closely connected within countries and regions, labor will gain power relative to capital, and politics will have a greater impact on economic outcomes than it has for half a century. If all politics is local, the same could soon be true for economics…
All economics is local: “After Neoliberalism,” from @RanaForoohar in @ForeignAffairs. Eminently worth reading in full (and contemplating the consequences of this all-too-plausible shift for addressing global issues like change change and the migration it is sure to drive).
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As we re-scope, we might recall that it was on this date in 1975 that prescient objectors, the Sex Pistols, made their live debut at St Martin’s School Of Art in central London, supporting a band called Bazooka Joe, which included Stuart Goddard (the future Adam Ant). The Pistols’ performance lasted 10 minutes.
“Wouldn’t economics make a lot more sense if it were based on how people actually behave, instead of how they should behave?”*…
Behavioral economics aims to accomplish exactly that. Its approach has been to catalogue the dozens of cognitive biases that stop us from acting “rationally.” Jason Collins argues that instead of building up a messier and messier picture of human behavior, we need a new model…
From the time of Aristotle through to the 1500s, the dominant model of the universe had the sun, planets, and stars orbiting around the Earth.
This simple model, however, did not match what could be seen in the skies. Venus appears in the evening or morning. It never crosses the night sky as we would expect if it were orbiting the Earth. Jupiter moves across the night sky but will abruptly turn around and go back the other way.
To deal with these ‘anomalies’, Greek astronomers developed a model with planets orbiting around two spheres. A large sphere called the deferent is centered on the Earth, providing the classic geocentric orbit. The smaller spheres, called epicycles, are centered on the rim of the larger sphere. The planets orbit those epicycles on the rim. This combination of two orbits allowed planets to shift back and forth across the sky.
But epicycles were still not enough to describe what could be observed. Earth needed to be offset from the center of the deferent to generate the uneven length of seasons. The deferent had to rotate at varying speeds to capture the observed planetary orbits. And so on. The result was a complicated pattern of deviations and fixes to this model of the sun, planets, and stars orbiting around the Earth.
Instead of this model of deviations and epicycles, what about an alternative model? What about a model where the Earth and the planets travel in elliptical orbits around the sun?
By adopting this new model of the solar system, a large collection of deviations was shaped into a coherent model. The retrograde movements of the planets were given a simple explanation. The act of prediction became easier as a model that otherwise allowed astronomers to muddle through became more closely linked to the reality it was trying to describe.
Behavioral economics today is famous for its increasingly large collection of deviations from rationality, or, as they are often called, “biases.” While useful in applied work, it is time to shift our focus from collecting deviations from a model of rationality that we know is not true. Rather, we need to develop new theories of human decision to progress behavioral economics as a science. We need heliocentrism…
For a thoughtful critique of current thinking and a set of four “features” that might inform a new approach: “We don’t have a hundred biases, we have the wrong model,” from @jasonacollins.
* Dan Ariely, Predictably Irrational: The Hidden Forces That Shape Our Decisions
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As we dwell on decisions, we might spare a thought for someone who would probably have had little patience for ideas like these, Rose Friedman; she died on this date in 2009. A free-market economist, she was the wife and intellectual partner of Milton Friedman– a father of the “Chicago School” of neoclassical economic thought that underlies the neoliberlism so dominant of late [see here], of which behavioral economics is a corrective/critique– with whom she co-wrote papers and books (e.g., Free to Choose and Capitalism and Freedom) and co-founded EdChoice (formerly the Milton and Rose D. Friedman Foundation), with the aim of promoting the use of school vouchers and “freedom of choice” in education.
When her husband received his Medal of Freedom in 1988, President Ronald Reagan joked that Rose was known for being the only person to ever have won an argument against Milton.
“‘I wish it need not have happened in my time,’ said Frodo. ‘So do I,’ said Gandalf, ‘and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.'”*…
A couple of weeks ago, (Roughly) Daily took a look at the fall of neoliberalism. What’s to come? The estimable Noah Smith has a suggestion…
For years now, I’ve been thinking about what the next big organizing principle of U.S. political economy will be. By “political economy” here I mean the type of economic policies we carry out, and the ways that we expect those policies to reshape our economy. This will be the first in a series of posts laying out my predictions for what the new paradigm will look like.
From the late 1970s through the middle of the 2000s, our organizing principle was what some people call “neoliberalism” — deregulation, tax cuts, free trade, and the shift of the welfare state towards in-kind benefits and work requirements. The reasons we went down this road were complex, and the results were mixed. This replaced an earlier paradigm that people called “the New Deal”, which started to emerge during the Great Depression but really solidified during and just after WW2. That paradigm involved large-scale government investment, heavy regulation, high taxes, social insurance, and the encouragement of a corporate welfare state.
Ever since the financial crisis and the Great Recession of 2008-12, we’ve been looking for a new organizing principle. Obama didn’t really try to give us one; with the exception of Obamacare, he was mostly focused on crisis recovery and damage control (stimulus, financial regulation, boosting the welfare state incrementally along largely neoliberal lines).
But everyone knew a new paradigm was needed. The question was what it would be…
[After carefully considering, then sadly rejecting climate change as a candidate…]
So if it’s not climate change, what will be the thing that forces us to come up with a new policy paradigm? If it’s not the moral equivalent of war, perhaps it’ll be the threat of actual war…
“The War Economy,” Part 1
In a second post, he elaborates on how the U.S. and its allies might stack up against a “New Axis.” He dives into relative demographicc, economic, and social strengths, concluding…
I can’t say whether or not the New Axis is the most formidable military competitor that the U.S. and its allies have ever faced. The original Axis was certainly fearsome, and the USSR had tens of thousands of nuclear weapons ready to roast the world at the touch of a button. But I think that the comparisons above show that the New Axis certainly represents an economic competitor like none the U.S. and its allies have ever faced. And the reason is simply China. Russia is mainly a gas station with nukes. But China has three things going for it:
- China has far, far more workers than the original Axis or the Soviet bloc.
- China has advanced manufacturing technology that probably rivals the original Axis in relative terms, and far exceeds the Soviet bloc.
- China has the world’s largest manufacturing cluster, making it the “make everything country”, which neither the Axis nor the USSR managed to be.
He continues…
This is simply a unique situation in modern history. The Industrial Revolution began in Europe and spread to the U.S. and the East Asian rim. The aftermath of WW2 saw central Europe and the East Asian rim incorporated into a U.S.-led alliance that dominated global manufacturing in a way that the communist powers could never threaten. Now, with the rise of China, world manufacturing is divided roughly in two.
Much of the War Economy in the U.S. (and its allies) will therefore be about rediscovering the manufacturing capabilities they neglected during China’s meteoric rise…
“The War Economy, Part 2: Sizing up the New Axis“
The Brookings Institute recently published its own (and very resonant) assessment of U.S. readiness, “The Sources of Societal Competitiveness.” And Nathan Gardels followed with a trenchant reminder that consensus on national security is a double-edged sword…
In the end, the enduring vitality of any country must be built primarily on the wherewithal within, not on the shaky foundation of menacing adversaries without. George Kennan, architect of the containment strategy against the Soviet Union, understood that lasting vigor comes from the inner confidence of a nation that thrives on its own terms and doesn’t rely on enemies to hold it together. External threats may spur a welcome renewal, but it will remain fragile if that becomes its purpose.
Kennan believed correctly that the West would ultimately be victorious in the Cold War not on some battlefield but through the organic strength of a robust society that no adversary could match.
The same perspective applies today with respect to the challenge of assertive autocracies, especially China. The most important contribution democracies can make to fostering more freedom in the world is to demonstrate through their own institutional integrity and innovations how a governing consensus can be reached by non-authoritarian means.
“When Domestic Unity Is Built On Foreign Enemies“
We live in interesting times. Eminently worth reading all of the links in full.
* J.R.R. Tolkien, The Fellowship of The Ring
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As we return to first principles, we might recall that it was on this date in 1945 that the Japanese Foreign Ministry sent telegrams to the Allies (by way of Max Grässli at the Swiss Department of Foreign Affairs ) announcing that Japan would accept the Potsdam Declaration. The surrender of the Empire of Japan was announced by Japanese Emperor Hirohito on 15 August and formally signed on 2 September 1945, bringing the hostilities of World War II to a close.
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