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“Humanity is acquiring all the right technology for all the wrong reasons”*…

Further to yesterday’s post on the poverty created by manufacturing displacement, and in the wake of the sturm und drang occasioned by the coup at OpenAI, the estimable Rana Foroohar on the politics of AI…

… Consider that current politics in the developed world — from the rise of Donald Trump to the growth of far right and far left politics in Europe — stem in large part from disruptions to the industrial workforce due to technology and globalisation. The hollowing out of manufacturing work led to more populist and fractious politics, as countries tried (and often failed) to balance the needs of the global marketplace with those of voters.

Now consider that this past summer, the OECD warned that white-collar, skilled labour representing about a third of the workforce in the US and other rich countries is most at risk from disruption by AI. We are already seeing this happen in office work — with women and Asians particularly at risk since they hold a disproportionate amount of roles in question. As our colleague John Burn-Murdoch has charted [image above], online freelancers are especially vulnerable.

So, what happens when you add more than three times as many workers, in new subgroups, to the cauldron of angry white men that have seen their jobs automated or outsourced in recent decades? Nothing good. I’m always struck when CEOs like Elon Musk proclaim that we are headed towards a world without work as if this is a good thing. As academics like Angus Deaton and Anne Case have laid out for some time now, a world without work very often leads to “deaths of despair,” broken families, and all sorts of social and political ills.

Now, to be fair, Goldman Sachs has estimated that the productivity impact of AI could double the recent rate — mirroring the impact of the PC revolution. This would lead to major growth which could, if widely shared, do everything from cut child poverty to reduce our burgeoning deficit.

But that’s only if it’s shared. And the historical trend lines for technology aren’t good in that sense — technology often widens wealth disparities before labour movements and government regulation equalise things. (Think about the turn of the 20th century, up until the 1930s). But the depth and breadth of AI disruption may well cause unprecedented levels of global labour displacement and political unrest.

I am getting more and more worried that this is where we may be heading. Consider this new National Bureau of Economic Research working paper, which analyses why AI will be as transformative as the industrial revolution. It also predicts, however, that there is a very good chance that it lowers the labour share radically, even pushing it to zero, in lieu of policies that prevent this (the wonderful Daron Acemoglu and Simon Johnson make similar points, and lay out the history of such tech transformation in their book Power and Progress

We can’t educate ourselves out of this problem fast enough (or perhaps at all). We also can’t count on universal basic income to fix everything, no matter how generous it could be, because people simply need work to function (as Freud said, it’s all about work and love). Economists and political scientists have been pondering the existential risks of AI — from nuclear war to a pandemic — for years. But I wonder if the real existential crisis isn’t a massive crisis of meaning, and the resulting politics of despair, as work is displaced faster than we can fix the problem…

Everyone’s worried about AI, but are we worried about the right thing? “The politics of AI,” from @RanaForoohar in @FT.

See also: Henry Farrell‘s “What OpenAI shares with Scientology” (“strange beliefs, fights over money, and bad science fiction”) and Dave Karpf‘s “On OpenAI: Let Them Fight.” (“It’s chaos… And that’s a good thing.”)

For a different point-of-view, see: “OpenAI and the Biggest Threat in the History of Humanity,” from Tomás Pueyo.

And for deep background, read Benjamin Labatut‘s remarkable The MANIAC.

* R. Buckminster Fuller


As we equilibrate, we might recall that it was on this date in 1874 that electrical engineer, inventor, and physicist Ferdinand Braun published a paper in the Annalen der Physik und Chemie describing his discovery of the electrical rectifier effect, the original practical semiconductor device.

(Braun is better known for his contributions to the development of radio and television technology: he shared the 1909 Nobel Prize in Physics with Guglielmo Marconi “for their contributions to the development of wireless telegraphy” (Braun invented the crystal tuner and the phased-array antenna); was a founder of Telefunken, one of the pioneering communications and television companies; and (as the builder of the first cathode ray tube) has been called the “father of television” (shared with inventors like Paul Gottlieb Nipkow).


“Success is in making money, not in the size of the airline”*…

Airlines make more money from mileage programs than from flying planes—and it shows. Ganesh Sitaraman explains…

… From the late 1930s through the ’70s, the federal government regulated airlines as a public utility. The Civil Aeronautics Board decided which airlines could fly what routes and how much they could charge. It aimed to set prices that were fair for travelers and that would provide airlines with a modest profit. Then, in 1978, Congress passed a sweeping law deregulating the airline industry and ultimately abolishing the CAB. Unleashed from regulation, airlines devised new tactics to capture the market. American Airlines was one of the most aggressive. In the lead-up to the deregulation bills, it created discount “super saver” fares to sell off the final few remaining seats on planes. That meant cheap prices for last-minute travelers and more revenue for American, because the planes were going to take off whether or not the seat was filled. But these fares upset business travelers, who tended to buy tickets further in advance for higher prices. So in 1981, American developed AAdvantage, its frequent-flier program, to give them additional benefits. Other airlines followed suit.

In the early years, these programs were simple, like the punch card at a café where your 11th coffee is free. But three big changes transformed them into the systems we know today. First, in 1987, American partnered with Citibank to offer a branded credit card that offered points redeemable for flights on the airline. Second, in the ’90s, the airlines proliferated the number of fare classes, charging differential prices for tickets. With more complicated fare structures came the third change: Virgin America realized that the amount people spend on a flight, based on the fare class, is more important to their bottom line than the number of miles flown. So, in 2007, it introduced a loyalty program rewarding money spent rather than mileage accrued.

These three shifts fundamentally transformed the airline industry. They turned frequent-flier systems into the sprawling points systems they are today. And they turned airlines into something more like financial institutions that happen to fly planes on the side.

Here’s how the system works now: Airlines create points out of nothing and sell them for real money to banks with co-branded credit cards. The banks award points to cardholders for spending, and both the banks and credit-card companies make money off the swipe fees from the use of the card. Cardholders can redeem points for flights, as well as other goods and services sold through the airlines’ proprietary e-commerce portals.

For the airlines, this is a great deal. They incur no costs from points until they are redeemed—or ever, if the points are forgotten. This setup has made loyalty programs highly lucrative. Consumers now charge nearly 1 percent of U.S. GDP to Delta’s American Express credit cards alone. A 2020 analysis by the Financial Times found that Wall Street lenders valued the major airlines’ mileage programs more highly than the airlines themselves. United’s MileagePlus program, for example, was valued at $22 billion, while the company’s market cap at the time was only $10.6 billion.

Is this a good deal for the American consumer? That’s a trickier question. Paying for a flight or a hotel room with points may feel like a free bonus, but because credit-card-swipe fees increase prices across the economy—Visa or Mastercard takes a cut of every sale—redeeming points is more like getting a little kickback. Certainly the system is bad for Americans who don’t have points-earning cards. They pay higher prices on ordinary goods and services but don’t get the points, effectively subsidizing the perks of card users, who tend to be wealthier already.

The strange evolution of airlines into quasi-banks reflects how badly deregulation has gone. Regulation carefully set the terms under which airlines could do business. It was designed to ensure that they remained a stable business and a reliable mode of transportation. Deregulation, in turn, allowed the airlines to pursue profits in whatever way they could—including getting into the financial sector.

The proponents of deregulation made a few big promises. The cost of flying would go down once airlines were free to compete on price. The industry would get less monopolistic as hundreds of new players entered the market, and it would be stable even without the government guaranteeing profitable rates. Small cities wouldn’t lose service. In the deregulators’ minds, airlines were like any other business. If they were allowed to compete freely, the magic of the market would make everything better. Whatever was good for the airlines’ bottom line would be good for consumers.

They were wrong. As I explain in my forthcoming book, most of their predictions didn’t come true, because air travel isn’t a normal business. There are barriers to entry, such as the fixed supply of airport runways and gates. (And, for that matter, mileage programs, designed to keep customers from ditching an established airline for a rival.) There are network effects and economies of scale. There are high capital costs. (Airplanes aren’t cheap.) The idea that anyone could successfully start an airline and outcompete the big incumbents never made much sense.

After a relatively short period of fierce competition, the deregulated era quickly turned to consolidation and cost-cutting, as dozens of airlines either went bankrupt or were acquired. Service keeps getting worse, because the airlines, facing little competition, have nothing to fear from antagonizing passengers with cramped legroom, cancellations, and ever-multiplying fees for baggage and snacks. Worse still, without mandated service, cities and regions across the country have lost commercial air service, with serious consequences for their economies. And when a crisis like 9/11 or the coronavirus pandemic comes along, the airlines—which prefer to direct their profits to stock buybacks rather than rainy-day funds—need massive financial relief from the federal government.

Deregulation even failed to deliver the one thing it is sometimes credited with: lowering prices. Airfare did get cheaper in the years after the 1978 deregulation law. But the cost of flying had already been falling before deregulation, and it kept falling after at about the same rate.

The old system of airline regulation wasn’t perfect. Barred from competing directly on price, the airlines got into an amenities arms race that notoriously included in-flight piano bars. But the cure was worse than the disease. The industry went from being a regulated oligopoly, which had real problems, to an unregulated oligopoly, which we are now seeing is much worse…

Painful reading: “Airlines Are Just Banks Now” (gift article) from @GaneshSitaraman in @TheAtlantic.

* Gordon Bethune (Long-time chair of Continental Airlines)


As we pray for an aisle seat, we might console ourselves that at least we’re not boarding the S.S. Minnow; on this date in 1964 Gilligan’s Island premiered on CBS. Seven castaways– five paying passengers who’d booked a “three hour tour” from Honolulu, and their two-person crew– spent the next three seasons marooned on an uncharted island.


“I prefer radio to TV because the pictures are better”*…

Was Walter Benjamin the ur-podcaster? Peter E. Gordon on Benjamin’s audio adventures, how they relate to his cultural theories, and what they suggest about what has become (and may yet become) of audio…

No audio recordings of Walter Benjamin have survived. His voice was once described as beautiful, even melodious—just the sort of voice that would have been suitable for the new medium of radio broadcasting that spread across Germany in the 1920s. If one could pay the fee for a wireless receiver, Benjamin could be heard in the late afternoons or early evenings, often during what was called “Youth Hour.” His topics ranged widely, from a brass works outside Berlin to a fish market in Naples. In one broadcast, he lavished his attention on an antiquarian bookstore with aisles like labyrinths, whose walls were adorned with drawings of enchanted forests and castles. For others, he related “True Dog Stories” or perplexed his young listeners with brain teasers and riddles. He also wrote, and even acted in, a variety of radio plays that satirized the history of German literature or plunged into surrealist fantasy. One such play introduced a lunar creature named Labu who bore the august title “President of the Moon Committee for Earth Research.”

Today Benjamin is widely esteemed as one of the foremost cultural critics and theorists of the 20th century. But his career was uneven and marked by failure. In 1925, after the faculty of philosophy in Frankfurt rejected his enigmatic study of German Baroque drama and dashed his hopes for an academic career, he found himself adrift, with little assurance of a regular income. But this failure also brought freedom. His untethering from the university meant that he could indulge in his interests without restraint, and he turned his talents to writing essays that took in the whole panorama of modern life—from high literature to children’s books and from photography to film—and, for nearly six years, he supplemented his earnings with radio broadcasts, some for adults and others meant especially for children. Of the many broadcasts, about 90 in all, that he produced for the radio stations in Frankfurt and Berlin, only a fragment of a single audio recording has been preserved; unfortunately, Benjamin’s voice cannot be heard.

Now transcripts of these broadcasts have been assembled and translated into English in a new volume edited by Lecia Rosenthal, whose incisive introduction assists the reader in appreciating their true significance. One can’t help but wonder what Benjamin would have made of all this attention, since he was inclined to dismiss his radio work as unimportant. In correspondence with his friend Gershom Scholem, he wrote with some embarrassment of “piddling radio matters” and condemned nearly all of it as having “no interest except in economic terms.” Today we know that he was mistaken. The transcripts are more than mere ephemera; they are perfect specimens of Benjamin’s interpretative method, exercises in a style of urban semiotics that he would later apply during his exile in Paris. Hannah Arendt once likened her late friend to a pearl diver who possessed a gift for diving into the wreckage of bourgeois civilization and emerging into the sunlight with the rarest of treasures. The radio transcripts offer further evidence of a genius whose career was ended far too soon…

A fascinating– and illuminating– read. Walter Benjamin’s radio years: “President of the Moon Committee,” from @thenation.

* Alistair Cooke


As we listen in, we might spare a thought for Hugo Gernsback, a Luxemborgian-American inventor, broadcast pioneer, writer, and publisher; he was born on this date in 1884. Gernsback founded radio station WRNY, was involved in the first television broadcasts, and is considered a pioneer in amateur radio.  And he was a prolific inventor, with 80 patents at the time of his death.

But it was a writer and publisher that he probably left his most lasting mark:  In 1926, as owner/publisher of the magazine Modern Electrics, he filled a blank spot in his publication by dashing off the first chapter of a series called “Ralph 124C 41+.” The twelve installments of “Ralph” were filled with inventions unknown in 1926, including “television” (Gernsback is credited with introducing the word), fluorescent lighting, juke boxes, solar energy, television, microfilm, vending machines, and the device we now call radar.

The “Ralph” series was an astounding success with readers; and later that year Gernsback founded the first magazine devoted to science fiction, Amazing Stories.  Believing that the perfect sci-fi story is “75 percent literature interwoven with 25 percent science,” he coined the term “science fiction.”

Gernsback was a “careful” businessman, who was tight with the fees that he paid his writers– so tight that H. P. Lovecraft and Clark Ashton Smith referred to him as “Hugo the Rat.”

Still, his contributions to the genre as publisher were so significant that, along with H.G. Wells and Jules Verne, he is sometimes called “The Father of Science Fiction”; in his honor, the annual Science Fiction Achievement awards are called the “Hugos.”

Gernsback, wearing his invention, TV Glasses


“Better not bring up a lion inside your city, but if you must, then humor all his moods”*…

A competitor dressed as a Spartan warrior takes part in the 2010 Tough Guy race in Telford, England, on Jan. 31, 2010

Historian Bret Devereaux on why it’s ill-advised to idolize Spartans…

The Athenian historian Thucydides once remarked that Sparta was so lacking in impressive temples or monuments that future generations who found the place deserted would struggle to believe it had ever been a great power. But even without physical monuments, the memory of Sparta is very much alive in the modern United States. In popular culture, Spartans star in film and feature as the protagonists of several of the largest video game franchises. The Spartan brand is used to promote obstacle races, fitness equipment, and firearms. Sparta has also become a political rallying cry, including by members of the extreme right who stormed the U.S. Capitol on Jan. 6, 2021. Sparta is gone, but the glorification of Sparta—Spartaganda, as it were—is alive and well.

Even more concerning is the U.S. military’s love of all things Spartan. The U.S. Army, of course, has a Spartan Brigade (Motto: “Sparta Lives”) as well as a Task Force Spartan and Spartan Warrior exercises, while the Marine Corps conducts Spartan Trident littoral exercises—an odd choice given that the Spartans were famously very poor at littoral operations. Beyond this sort of official nomenclature, unofficial media regularly invites comparisons between U.S. service personnel and the Spartans as well.

Much of this tendency to imagine U.S. soldiers as Spartan warriors comes from Steven Pressfield’s historical fiction novel Gates of Fire, still regularly assigned in military reading lists. The book presents the Spartans as superior warriors from an ultra-militarized society bravely defending freedom (against an ethnically foreign “other,” a feature drawn out more explicitly in the comic and later film 300). Sparta in this vision is a radically egalitarian society predicated on the cultivation of manly martial virtues. Yet this image of Sparta is almost entirely wrong. Spartan society was singularly unworthy of emulation or praise, especially in a democratic society…

Eminently worth reading in full. U.S. admiration of a proto-fascist city-state is based on bad history: “Spartans Were Losers,” from @BretDevereaux in @ForeignPolicy.

In the spirit of offering alternative perspectives: Brad DeLong in defense of Gates of Fire, if not of the worshipful view of the Spartans.

* Aristophanes, The Frogs


As we rethink role models, we might recall that it was on this date in 1951 that Disney’s Alice in Wonderland had its American premiere (in New York, two days after premiering in London).

Walt Disney first tried to adapt Alice into a feature-length animated feature film in the 1930s, but were scrapped in favor of Snow White and the Seven Dwarfs (1937). The idea was revived in the 1940s. The film was originally intended to be a live-action/animated film, but Disney decided it would be the fully animated feature film. During its production, many sequences adapted from Lewis Carroll’s books were later omitted, such as Jabberwocky, White Knight, the Duchess, and Mock Turtle.

Alice in Wonderland was considered a disappointment on its initial release, so was shown on television as one of the first episodes of Disneyland. Its 1974 re-release in theaters proved to be much more successful, leading to subsequent re-releases, merchandising, and home video releases.


“The past is a foreign country: they do things differently there”*…

The inimitable Tim Urban on the children who populate print ads from the first (the “pre-TV”) half of the 20th century…

Girls who are a weird level of hungry

Kids with old faces…

Infants drinking soda…

Children at risk…

… and so much more: “Creepy Kids in Creepy Vintage Ads,” from @waitbutwhy.

* L.P. Hartley, The Go-Between


As we contemplate change, we might recall that it was on this date in 1941, before a Brooklyn Dodgers–Philadelphia Phillies game at Ebbets Field, that NBC-owned station WNBT in New York aired the first (legal) television commercial– The “Bulova Time Check.” Bulova paid $4 in air fees plus $5 in station fees; there were about 4,000 TV sets in the New York Area at the time. The average cost of a 30-second spot in the broadcast of the last Super Bowl was $7,000,000.

Written by (Roughly) Daily

July 1, 2023 at 1:00 am

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