Views from Crestmont Drive

This is a breezy, fast-reading book that summarizes grand conclusions simply and directly, and then provides background references to support those conclusions in 40 pages of notes at the end.

The Dutch author is “one of the continent’s most prominent young thinkers”; the book was published in the Netherlands in 2014, and first translated into English in 2017.

The book starts out in Pinker/Rosling territory, alerting us to the fact that the world has improved greatly in recent decades and centuries, then moves through a constellation of ideas, some intersecting those in Harari’s HOMO DEUS, for improving the world, and ends with some insights from psychology about why people cling to old ideas and have trouble considering anything new. Reminding us in the final lines about how nevertheless – slavery, women’s suffrage, gay marriage – new ideas have changed society.

(I read this book a year and a half ago, and it’s one of a backlog of reading notes I mean to post here, for the benefit of anyone who might encounter this blog.)

Take-away key points:

• The idea of free money, of universal income. Idea goes back to Thomas More’s Utopia.
  • From summary below: It’s been thought that poor people are lazy, or that free money would make people lazy. But it doesn’t, according to the evidence. Various examples show that giving poor people cash lets them invest and improve their lives—Kenya, Uganda. These programs reduce poverty and cost less that alternatives. Instead of outsiders deciding what poor people need, let them decide. Studies show they don’t spend the money on alcohol and tobacco.
  • And I’ve made this point recently: It’s not terribly expensive; people would find the work they want; and it’s less perverse than the army of welfare workers we have now that monitor all the recipients.
  • Examples; relative poverty; poverty is not about lack of character; it almost happened under Nixon.
• Why GDP is outdated, a myth that it must always grow. It’s handy for journalists. What’s needed is a dashboard of indicators driven by a vision of what makes life worth living. Which entails asking, what is progress? [[ Rosling’s book speaks to this; I need to catch up on that summary too. ]]
• People used to worry that leisure would be a problem, e.g. short work weeks, the Jetsons. But people are obsessed about having more stuff, and now there’s the cult of overwork.
• People rage against the machine — how new machines take away job, e.g. the loss of job for draft horses in 1901. We have to get over the dogma that you have to work for a living. That means redistribution. As Piketty advocated.
  • [[ And this dovetails with Heinlein’s notions in his early novels, as I’ve described here. And of course matches Harari’s thoughts on a future in which people, becoming unemployed, need to find something to do. ]]
• How to deal with poverty — a solution would be open borders. Only since WWI broke out did some countries seal their borders. Opening borders could double the “gross worldwide product.” Arguments against open borders are fallacies.
• Leon Festinger and his study of cognitive dissonance, about the group who believed aliens would arrive. People search the internet for what they want to be the answer.
• The Overton Window can shift. We need a conviction that change is possible. Cultivate a thicker skin: Be unrealistic, unreasonable, and impossible. “Remember, those who called for the abolition of slavery, for the suffrage of women, and for same-sex marriage were also once branded lunatics. Until history proved them right.”

Detailed Summary:

1, The Return of Utopia

• In the past, everything was worse. Only in the last 200 years have most of us become rich, clean, healthy, etc. For centuries not much changed; the annual income in Italy in 1300 was about the same as 600 years later. Then things took off beginning around 1880. See chart p3.
• Medieval people imagined “Cockaigne”, a place that’s pretty much like western Europe now. Now we worry about adverse effects like obesity and pollution. We can make biblical prophecies come true. And science fiction. Wealthy, hunger, disease; vaccines. Smarter; less crime.
• We have a Land of Plenty. What’s left to do? New gadgets. What to do? We haven’t come up with any new dream.
• This book is about unlocking the future. There have been two types of utopias: more familiar is the blueprint utopia, with rules about everything, e.g. 1602 The City of the Sun. The other is utopia as just a vague outline, finding the right questions to ask, and willingness to change. We’ve become cynical, with nothing but a technocracy, concerned about quantity, not quality. It’s all about personal freedom, but driven by the market. The welfare state focuses only on symptoms. The market and commercial interests have free reign. Thus the dystopia we have today.
• Young people have it good, but they’re both narcissistic and fearful. Traditional guidelines from family, church, and country have been replaced… Capitalism brought about the Land of Plenty, but it’s insufficient to sustain it. The nostalgia for the past reveals a yearning for ideas that we can no longer achieve.
• True progress is about wisdom about what it means to live well.
• So we need alternate horizons to spark our thinking. There have been such dreamers for centuries, p21. B Russell quotes.

2, Why We Should Give Free Money to Everyone

• In London in 2009 an experiment with 13 homeless men, costing L400,000 per year of government expenses, were given money directly instead, for a cost of L50,000/year. They were asked what they needed, and those things were supplied. A year and a half later seven of them had roofs over their heads.
• It’s been thought that poor people are lazy, or that free money would make people lazy. But it doesn’t, according to the evidence. Various examples show that giving poor people cash lets them invest and improve their lives—Kenya, Uganda. These programs reduce poverty and cost less that alternatives. Instead of outsiders deciding what poor people need, let them decide. Studies show they don’t spend the money on alcohol and tobacco.
• The idea of free money, or a universal basic income, goes back to More’s Utopia. A monthly allowance, no conditions.
• In 1973 the Canadians tried it in a town in Winnepeg, a program called Mincome. The program worked well until a conservative government won the election and stopped it, even money to analyze the data. Later, Medicare archives showed the program had been a resounding success.
• No, people didn’t stop working and start having large families; rather the opposite. School performance improved; hospitalizations dropped 8%.
• Four other experiments were done in the US, back in LBJ’s day. The experiments worked—but were deemed politically unfeasible. In 1968 five economists, including Galbraith, wrote an open letter to congress advocating the idea. The idea was including in a bill put forth by Nixon. But the Senate was skeptical, and democrats were opposed because it didn’t go far enough. Later versions were shelved when the Seattle data showed a rise in divorces—basic income gave women too much independence. But even that turned out to be a statistical error.
• Utopian ideas are generally dismissed as futile, dangerous, or perverse. Even democracy was, once. In 1967 80% of Americans supported gbi.
• But the data show differently. It’s not terribly expensive; people would find the work they want; and it’s less perverse than the army of welfare workers we have now that monitor all the recipients. And so the right is afraid people will stop working; the left doesn’t trust them to make their own choices.
• The welfare system is a vestige from an era when men were breadwinners and had the same job all their lives. But times are changing. “In the end, only a fraction of our prosperity is due to our own exertions. We, the inhabitants of the Land of Plenty, are rich thanks to the institutions, the knowledge, and the social capital amassed for us by our forebears.” P46-7.

3, The End of Poverty

• In 1997 a new casino opened in North Carolina run by the Cherokee, despite the governor’s opposition. Income of the Cherokee to by $5500/year. It was known that poverty causes behavioral problems in children, but which was cause and which effect? The rise in income from the casino resulted in improvements among the children. Crime was reduced. The money helped parents to parent better. Both nature and nurture can cause mental-health problems, but genes can’t be undone, and poverty can.
• But why is it poor people seem to have more problems, make bad decisions? It’s widely thought that poor people have to help themselves. A recent book claims it’s about context. There’s a psychology about scarcity. Scarcity narrows your focus. Poor people are preoccupied with many narrow decisions. Studies show the effects correspond to 13 and 14 IQ points. Studies show…
• Reducing poverty would expand the gross domestic mental bandwidth. Reducing policy would reduce the costs of poverty. But the mindset of scarcity leads many who qualify for assistance programs to ignore them.
• What is to be done? Nudges are cheap, but don’t solve anything. Free money is one thing, but scarcity is a perception based on what others have—thus inequality is a key problem.
• Increasing income only increases happiness to a point. There’s no correlation between incomes and social problems, p64 chart. (The US has the highest index of social problems.) But there is a strong correlation of social problems to inequality, p65. It doesn’t matter that the poor are better off than anyone a couple centuries ago. It’s about relative poverty.
• Poverty used to be a fact of life. The poor used to be required, to some thinking, to balance the wealthy, p68. We’ve learned better in the 20^th century. Poverty is not about lack of character.
• In 2005 Utah attacked the homelessness problem with free apartments. It got people off the streets, and benefitted the economy.
• The same strategy worked in Amsterdam and other Dutch cities, p71. But then the financial crisis trimmed budgets and the problem returned. Despite studies that showed the investments in homelessness enjoyed double or triple returns. Still, some people merely fight the symptoms.

Ch4, The Bizarre Tale of President Nixon and His Basic Income Bill

• How the past is a foreign country.
• None other than President Nixon almost got a guaranteed annual income, of $1600, into law, despite conservative fealty to Ayn Rand. But then Nixon was sent a report – based on a particular book—about a town in England, Speenhamland, in the 1830s, that supposedly ruined the competitive labor market, etc. Nixon was stunned, and shifted his position to require people to register for work with the Dept of Labor, to address the (myth) of the lazy poor. Welfare became workfare.
• But what really happened in Speenhamland? History shows plans for aiding the poor were criticized by, among others, Malthus, who worried that an expanding population would cause famine etc., and assisting the poor would just enable them to have even more children. After an uprising in 1830, the British government did a study on Speenhamland, which concluded it had been a disaster, and when repealed, the poor became more industrious and improved their conditions. The study influenced Karl Marx and others—Bentham, de Tocqueville, et al, p87.
• But a later study showed that report completely flawed—largely written without analyzing the data, because funding was cut for doing so. Later analysis showed it had been a success. Malthus was wrong; people had children for the child labor, which was in high demand. Similarly, Marx and Engels were misguided, p89.
• After that laws were changed that created the poor houses that Dickens wrote about—people locked up or given menial work for being poor, as remedies against sloth and depravity. The myth of Speenhamland persisted—among conservatives, among them Charles Murray—and ultimately led to the dismantling the welfare system by Clinton in 1996.
• Orwell knew poverty. And problem with the nanny state is that it’s like a surveillance state, having unintended consequences, p96.

Ch5, New Figure for a New Era

• The Japanese tsunami in 2011, ironically, boosted the Japanese economy, i.e. its GDP. But the GDP is outdated; it doesn’t measure many things – free stuff, the black market, advances in knowledge—treating society like a production line, and benefiting from activity that’s actually harmful. 105b: “If you were the GDP, your ideal citizen would be a compulsive gambler with cancer who’s going through a drawn-out divorce that he copes with by popping fistfuls of Prozac and going berserk on Black Friday.” Another problem is that the financial sector is included.
• And it’s a problem, a myth, that the GDP must always grow. Certainly it’s handy for journalists.
• Measures of society go back to 1665 and we preoccupied with financing wars. The modern GDP was developed by Simon Kuzmets for Herbert Hoover. It works well in times of war. But it’s full of subjective elements.
• But how else to measure the quality of society? Simple happiness isn’t enough; you need some unhappiness to drive people. Other measures include the GPI and the ISEW, p118. A key issue is that some things can’t be expanded or made more efficient—a performance of Mozart, for example. And considering that manufacturing has gotten more efficient, so that products are cheaper, you’d expect things like education and health care to be relatively more expensive. Being obsessed with productivity means having no vision.
• So what’s needed perhaps is a dashboard of indicators driven by a vision of what makes life worth living. And that entails answering the question, what is progress?

Ch6, A Fifteen-Hour Workweek

• Keynes in 1930 predicted such a thing by 2030, and worried that leisure would be the biggest challenge to overcome. Similar predictions, or worries, were made by Benjamin Franklin, by John Stuart Mill, by Asimov in 1964—“a race of machine tenders”, p132. Henry Ford cut back the work week to 5 days, to allow his employees time to drive his cars!
• The Jetsons portrayed such a future, where work involved pushing a single button, for a couple hours a day.
• Why hasn’t this happened? Instead, we got more stuff. And feminism, and increased time parenting. Others tried cutting back, e.g. Kellogg, but eventually those tries faded. And now there’s a cult of overwork.
• But working less would solve many problems: reduce stress, climate change, accidents, unemployment, and benefit women, old people, and relieve inequality. And most people agree they could use more leisure time. But getting there would require careful planning.

Ch7, Why It Doesn’t Pay to Be a Banker

• A 1968 garbageman strike in New York City showed that it does pay to strike.
• At least for some professions, not many—lobbyists, media consultants. Some people create wealth, others just shift it around. And ironically the latter professions are the ones that are the best paid. Farms and factories have grown more efficient, so they employ fewer people.
• In 1970 a bankers strike in Ireland last six months, and had little effect. People created their own currency, exchanged at pubs, where they were known.
• Bankers get rich by taxing their customers, in effect.
• Another cause of overwork are what are called “bullshit jobs,” those that are nearly superfluous. And some of these pay very well.
• You can shift the economy so that innovation and creativity pay off, e.g. with taxes on the financial sector to reduce their profits. The Reagan tax cuts led to more people working as bankers and accountants. Higher taxes get more people to do work that’s useful.
• Education is too focused on predicting needed skills in tomorrow’s job market. Instead ask, what knowledge and skills do we want children to have? We want to use that extra leisure time doing things that are meaningful.
• And now garbage collectors in NY are well paid.

Ch8, Race Against the Machine

• One million jobs for draft horses in 1901 were taken away by machines. And now robots may take away many other jobs.
• Moore’s law, from 1965, seems to still be in effect.
• Shipping containers reduced time in port from 50% to 10%.
• A ‘fact’ of economic growth in 1957, that the share of national income that goes to labor was two-thirds, has shifted to just 58%, due to technology gains. Products like iPhone and Nutella are international. Big players drive out hundreds of smaller players. We have a ‘winner-take-all’ society. This increases inequality.
• Asimov’s prediction about machine tenders was optimistic—we may not even need the tenders. It’s estimated that 50% or so of jobs might be usurped by machines. In the past, new jobs have appeared to replace ones removed by automation. But beginning around 2000, productivity increased while jobs decreased, p187. Consider how quickly computers have learned to play chess, and win game shows. Kurzweil predicts as intelligent as people by 2029.
• So what do we do? We face a new generation of Luddites. Recall 1812, an attack on a mill with a new type of power-loom. The Luddite rebellion peaked in 1811, and was crushed.
• What can be done? Not much. The gap between high earners and lower classes will increase. There are calls for greater education.
• And shorter work weeks and universal income. We have to get over the dogma that you have to work for a living. That means redistribution. As Piketty advocated.

Ch9, Beyond the Gates of the Land of Plenty

• What about people who are still in poverty? The West has spent a lot on foreign aid, and we don’t really know if it’s helped. We have theories and surveys and gut feelings. It’s like bloodletting. Then in 2003 MIT created a Poverty Action Lab.
• Recall the story of Daniel and his experiment about eating vegetables. In 1836 this was done for bloodletting. In 1998 it was done for foreign aid, for distribution of free textbooks. They didn’t help at all. These researchers are named ‘randomistas,’ and they set up RCTs, random control groups, e.g. about free nets vs. nets for sale. The randomistas realize that humans aren’t rational actors. One RCT debunked the idea of microcredits. Others have shown that cash works just fine. Others show that deworming works as well as free meals to raise school attendance.
• It’s about evaluating Ideology, Ignorance, and Inertia, to see what works.
• One that would work is: open borders. It’s estimated that could double the “gross worldwide product.” AS they effectively were, a century ago. Only when WWI broke out did some countries seal their borders. Goods and services cross borders, but not people. Opening borders would boost wealth by $65 trillion. Because borders stop people from finding better work, or markets. Only a few countries in the world are very rich—p218.
• The arguments against open borders are fallacies: they’re not terrorists, they’re not all criminals (look at the data). They don’t undermine social cohesion—a study by Putnam in 2007 was debunked. They’re not taking our jobs. They don’t force wages down. They’re not too lazy to work. And open borders make it easier for immigrants to go back.
• We know migration fights poverty—the Irish in the 1850s and Italians in the 1880s came to America. And now the world is building more barriers than ever.
• Perhaps someday we’ll look back on boundaries at the borders the way think of slavery and apartheid today.

Ch10, How Ideas Change the World

• In 1954 psychologist Leon Festinger followed a group who believed aliens would come rescue them from a flood that would destroy Lake City. How would they react when it didn’t happen? AS they sit through the fatal night, they get more ‘messages’ and update their predictions. His book, 1956, made points [exactly like we read about today]. Cognitive dissonance. Note 236b, “position in social circles”. Not about intelligence. The internet makes it worse. They search for what they want to be the answer.
• For example, author’s encounter with evidence against his 15-hour work week idea. And author has become so attached to the idea of a universal basic income, what would happen if counter evidence came along?
• Does this mean new ideas can’t change the world? We know that ideas have changed over time. Shocks work. How the world works, p240t. Group pressure can overcome our own senses. But sometimes a single opposing voice can make the difference.
• In 2008 the financial crisis seemed to overthrow economic dogma. Alan Greenspan was shocked. But a few years later, his confidence was restored, and fundamental reform never happened.
• Consider neoliberals Milton Friedman and Freidrich Hayek. They challenged their archrival, John Maynard Keynes. They were anti-government and pro free market. Their predictions seems to come true with the oil crisis in 1973, p247. Over the years Reagan and Thatcher carried the ideas on. Thus a once radical idea came to rule the world.
• These ideas have become establishment thinking—despite the financial crisis. But we need new ideas, even if right now they’re crazy dreams.

Epilogue

• So how do we implement these ideas?
• Consider the Overton Window—how only ideas considered acceptable at the moment get considered. But the window can shift. You proclaim an idea so shocking that anything less radical sounds sensible. Trump and others have mastered this art. It’s been moving to the right for decades. Left-wingers are stepping back, becoming ‘underdog socialists,’ caving in on taking radical actions. They side with society’s unfortunates, but they are dull, they have no story to tell. They’re more concerned with identity than achieving results. It should be a narrative of hope and progress, told in simple language. Reform, meritocracy, innovation, efficiency, cutting the nanny state, freedom. Redefine the concept of work, to be concerned about what matters.
• First, we need a conviction that change is possible, that utopia is within reach. See how the idea of basic income is now widespread.
• Two final pieces of advice: first, there are more people out there like you. Second: cultivate a thicker skin. Be unrealistic, unreasonable, and impossible. “Remember, those who called for the abolition of slavery, for the suffrage of women, and for same-sex marriage were also once branded lunatics. Until history proved them right.”