Vivid thoughts about the future

From Time on the Brain: How You Are Always Living In the Past, and Other Quirks of Perception by George Musser.

The world as we perceive it is constructed and that construction depends both on reliable recollection and imagination.

The bottom line is that memory is essential to constructing scenarios for ourselves in the future. Anecdotal evidence backs this up. Our ability to project forward and to recollect the past both develop around age 5, and people who are good at remembering also report having vivid thoughts about the future.

An influx of skilled, ambitious people

It's all about productivity. The Vanishing Middle Class by Reuven Brenner. Perhaps a source of woes is that we are losing our comparative advantage in freedom. If so, uh-oh.

For background: After World War II and well until the 1990s, the United States enjoyed an influx of skilled, ambitious people who were escaping a world largely ruled by dictatorial and unstable regimes. Hundreds of millions of others, those with skills, drive and intelligence equal to those lucky enough to be born in the West, were trapped behind iron and other curtains. As long as the US enjoyed monopoly powers on the leveraging of talent and capital, it could impose high taxes, with large segments of the population benefiting from high wages and transfer payments. Political barriers gave these groups of employees in the US the negotiating powers to extract those benefits.

The fall of communism and the political stabilization of what we now call "emerging countries" eroded the US's advantages, thus weakening these negotiating powers. Talented, entrepreneurial people and capital can and still do move to the United States, but capital and industrious individuals can also now exit it in favor of newly decentralizing parts of the world, where hundreds of millions of individuals are eager to work hard and catch up.

Practice and language shape habits of mind

From Unsettled civilizations: How the US can handle Iraq by Reuven Brenner.

On some of the critical distinctions between mobile (Enlightenment Age cultures) and immobile (those based on natural resources and agriculture) cultures. In this case he is discussing risk and probability.

Practice and language shape habits of mind. The greater the role of business and the more transactions, the more complex calculations of probability become, and the notion of probabilities change, imperceptibly, perhaps, all facets of life. To describe transactions is far from a trivial exercise, as even a casual look at any investment prospectus illustrates. Prices, which are present values of goods and services to be delivered in the future, are approximations, reflecting expectations and probabilities. Because of difficulties in fulfillment when pricing uncertain quantities, price becomes just one feature of a complex contractual agreement. It is not surprising, that in mobile societies, with developing capital markets, discussions about probability, risk and uncertainty are linked to both legal reasoning and the institutions needed to back contractual agreements.

The fruit of chance and necessity

Democritus:

Everything in the universe is the fruit of chance and necessity

Makes sense when you think of chance as being random variation and necessity being the pursuit of survival and continuity.

Added: In researching this quote, it appears that it was misremembered by an author, Jacques Monod, who used part of the quote as a title for one of his books. From there, it has been frequently requoted, still incorrectly. Background from Antoine Danchin in The Atomists: Logos and Necessity.

Clayton Cramer highlights a similar experience where a quote gets attributed, in this case to Cotton Mather, and then enters circulation without ever being corrected. Did Cotton Mather Really Say This?

What are you rewarding, and what are you punishing?

From Black and right by Ray Sawhill.

Thomas Sowell:

Over the years, I’ve reached the point where I can hardly bear to read the preamble of proposed legislation. I don’t care what you think this thing is going to do. What I care about is: What are you rewarding, and what are you punishing? Because you’re going to get more of what you’re rewarding and less of what you’re punishing.

If fewer than seven men attack private property, they are thieves

From Unsettled civilizations: How the US can handle Iraq by Reuven Brenner.

There is an old clause in the law codes that King Ine of Wessex established in the 8th century. If fewer than seven men attack private property, they are thieves; if between seven and 35 attack, they are a gang, and if more than 35, they are a military expedition.

Four traps

From Popular Development Economics—An Anthropologist among the Mandarins by Mike McGovern. It is interesting that what has happened in the US is mirrored at the global level: The bottom quintile have stagnated in terms of their productivity at the same time that the top quintile have blossomed.

Collier’s argument starts from the finding that the bottom billion have stagnated over the past forty to fifty years while the other four billion people living in the “developing world” have not only achieved economic development but, in most cases, a greater degree of political stability. He identifies four “traps” that reinforce economic stasis, political instability, and each other. They are conflict, reliance on natural resources, being landlocked with bad neighbors, and bad governance.Having laid out these structural challenges, Collier uses the second half of The Bottom Billion to outline some possible solutions, including judicious use of development aid, postconflict international peacekeeping missions, revised international laws that would diminish the complicity of richer governments and their businesses in bad governance and conflict, and revising trade policy in a way that actively favors the poorest countries.

Less than 1 percent of the American population is in the bottom income quintile for that duration (15 years)

From Black and right by Ray Sawhill.

We tend to think of poverty as a static condition whereas, in the US, it is highly dynamic. People move up and down over the course of a lifetime. Poor students become rich doctors. To understand poverty we have to understand durations and behaviors. What mires people in poverty and for how long. These are much more troublesome issues. As Sowell indicates, we are blessed with the fact that few are truly fated to live in poverty for lengthy durations.

And while we should rejoice in that figure of 1%, I don't think it lets us off the hook completely and for two reasons. Most people that manage to avoid poverty are highly dependent on various transfer programs that take money from one group and give to another. A safety net, and one that is necessary. However, the real goal is to be sufficiently productive that you are not in poverty. If you are not in poverty because of the generosity of others, you have mitigated a problem, not solved it.

The other issue is that you can avoid being in poverty and still be leading a frustratingly meager existance. Someone who is able to hold a job for a year or two may not be in the bottom quintile but if they are constantly gaining and losing employment, oscillating between quintile four and quintile five, they are still both unproductive and in sad material circumstances. No, they don't live continuously in quintile five but they are a frequent inhabitant.

I suspect that our problem is sourced in a much larger population than 1%. Those who are ill equipped in terms of knowledge, will, decision-making and values to sustain themselves in a productive fashion and who spend a life time floating between quintiles four and five and with no real prospects of either freeing themselves from dependency on others or of achieving sustained productivity.

You write in the new book that only 3 percent of Americans spend as long as eight years in the bottom-fifth income bracket.

That study has now been extended to 15 years. And when you stretch it out to 15 years, you find that less than 1 percent of the American population is in the bottom income quintile for that duration. Add to that the fact that most of our millionaires have made their money themselves, and you realize that it’s a tremendously fluid system.

Achievement gap is attributable to out-of-school factors

From Group Urges More Money to Aid Poor in School by Winnie Hu. A classic example of difficult decision-making, trade-offs, noble goals and hard-headed reality. What do you do in terms of fairness to enable children to more effectively participate in the productivity and bounty of this country when they are disadvantaged by the decisions made by their own parents.

As troubling, how do you pay for it. Increased spending on those in need is one solution (though problematic from an effectiveness perspective) but where do you raise that money from? Ideally, from a pure productivity perspective, you would issue a bond to be recouped by the improved productivity of the affected children in the future. That's just not practical, independent of some of the ethical issues.

The most straightforward mechanism is to raise the money from existing households that are already productive. But that, in economic terms, is simply raising the cost of being effective, and whenever you raise the cost of something, you get less of it. In order to prospectively raise the productivity of some, you are reducing the productivity of others. In that sort of trade-off, your risk and cost-benefit numbers have to be rock-solid in order to make an effective decision; yet those number are usually not much more than hopes and wishes - they aren't real numbers.

“Expanding comprehensive educational services for poor children is an essential investment even in these tough budgetary times, given how much of the achievement gap is attributable to out-of-school factors like poverty,” Ms. Weingarten said. “Economic opportunity and educational opportunity are inextricably linked, and we have no choice but to invest in our kids’ and nation’s future.”

We do have choices but they are neither obvious or pleasant.

Most of the 106 billion people who’ve ever lived are dead—around 94 percent of them

From The Geniuses We'll Never Know by Niall Ferguson. Numbers and context - always a winning proposition.

This essay is not about Steve Jobs. It is about the countless individuals with roughly the same combination of talents of whom we’ve never heard and never will.

Most of the 106 billion people who’ve ever lived are dead—around 94 percent of them. And most of those dead people were Asian—probably more than 60 percent. And most of those dead Asians were dirt poor. Born into illiterate peasant families enslaved by subsistence agriculture under some or other form of hierarchical government, the Steves of the past never stood a chance.

Chances are, those other Steves didn’t make it into their 30s, never mind their mid-50s. An appalling number died in childhood, killed off by afflictions far easier to treat than pancreatic cancer. The ones who made it to adulthood didn’t have the option to drop out of college because they never went to college. Even the tiny number of Steves who had the good fortune to rise to the top of premodern societies wasted their entire lives doing calligraphy (which he briefly dabbled in at Reed College). Those who sought to innovate were more likely to be punished than rewarded.

Today, according to estimates by Credit Suisse, there is approximately $195 trillion of wealth in the world. Most of it was made quite recently, in the wake of those great political and economic revolutions of the late 18th century, which, for the first time in human history, put a real premium on innovation. And most of it is owned by Westerners—Europeans and inhabitants of the New World and Antipodes inhabited by their descendants. We may account for less than a fifth of humanity, but we Westerners still own two thirds of global wealth.