Technological stagnation and the Zero-Risk Society
Also: Can America succeed if it turns away from meritocracy?
“In every society, there are stabilizing forces that protect the status quo. Some of these forces protect entrenched vested interests that might incur losses if innovations were introduced, others are simply don't-rock-the-boat kind of forces. Technological creativity needs to overcome these forces.” - Joel Mokyr, The Lever of Riches
In This Issue
The Micro Reads: gene therapy; AVs and video games; non-competes, and more . . .
The Short Read: Can America succeed if it turns away from meritocracy?
The Long Read: Technological stagnation and the Zero-Risk Society
The Micro Reads
🧬 Gene Therapy Is Coming of Age - Scientific American | It’s finally happening in the substantial way that many have been hoping for since the 1990s. Researchers “have alleviated some cases of blindness, cured cancers, addressed the underlying cause of sickle cell disease, and begun to treat congenital disorders, such as spinal muscular atrophy, that might otherwise be lethal.” (By the way, this piece is part of a larger SA special section on innovations in the sector.)
🚘 The hard job of teaching autonomous cars to drive - The Economist | One particularly interesting bit here, as the piece points out, is that Porsche is one of the carmakers using video game-like simulations to teach their AI programs about rare roadway hazards. Yet given “that much of the reason for owning a sports car is for owners to show off what they perceive to be their driving skills, just how big a market will there be for a version where software takes those bragging rights away?”
🔒 Non-compete contracts sideline low-wage workers - Minneapolis Fed | Faster growth isn’t all about breakthrough tech progress. Non-compete agreements hurt the economy by limiting the ability of workers to negotiate pay hikes or find the job that best fits them. And such contracts are pervasive, unfortunately. This study by Tyler Boesch, Katherine Lim, and Ryan Nunn finds more than one in seven workers have non-compete contracts with their current or most recent employer.” About 21 percent higher-earning workers have non-compete contracts versus 8 percent of workers in the bottom quintile of wages.
⏰ This Atomic Clock Will Transform Deep Space Exploration - Wired | “Atomic clocks used to navigate from the ground are too big — the size of refrigerators — and current space clocks aren’t accurate enough to rely on. The JPL team’s version is the first one that’s both small enough to fit on a spacecraft and stable enough for one-way navigation to become a reality.”
💻 Silicon Valley Syndrome: Measuring How Nontech Firms and Workers Suffer - Doris Kwon (Yale) and Olav Sorenson UCLA Anderson | It’s not just high housing costs (which more building could ameliorate). The researchers find an influx of venture capital is accompanied by a decline in the number of firms (as well as jobs and wages as such firms) that depend on sales outside the region — whether manufacturers or consultants. Demand from the exploding tech sector “pushes up local costs for capital, talent and resources, ‘tradable’ businesses that sell statewide, nationally and internationally, become less competitive.” Of course, attracting that capital in the first place isn’t so easy for many cities.
📱 Tweetstorm of the Issue:
The Short Read
🧠 Can America succeed if it turns away from meritocracy?
Despite public concern about inequality, few elite private colleges have ditched the age-old admissions policy of giving preference to the children of former students. Overall, The Wall Street Journal reports, 73 percent of highly selective schools—those that admit less than 25 percent of applicants — consider legacy status. But earlier this week, Amherst College (8.5 percent admission rate) announced it’s abandoning legacy admissions.
Non-merit admissions, including legacy, are a huge factor at elite schools. For example: The fascinating 2019 paper “Legacy and Athlete Preferences at Harvard” by Peter Arcidiacono, Josh Kinsler, and Tyler Ransom finds that among white admits to Harvard University, 43 percent are recruited athletes, legacies, those on the dean’s interest list, and children of faculty and staff — and roughly three quarters would have been rejected if they had been treated as white non-ALDCs.*
The issue of legacy admissions gets at an interesting question of mobility. Assuming that elite schools don’t massively expand the size of their student bodies, eliminating legacy admissions would theoretically create more slots for people who could merit those positions based on their academic achievements and potential. That’s the upward mobility side of things. But what about encouraging downward mobility? If we want people to have more ability to rise to the top, do we also increase the chances of those at the top falling? Not an easy thing, of course. “No chess grandmaster can out-think an upper-middle-class couple trying to rig life for its spawn,” Financial Times columnist Janan Ganesh has correctly noted.
But axing legacy admissions might be a good start. I recently chatted with Adrian Wooldridge, political editor and Bagehot columnist at The Economist, about his book The Aristocracy of Talent: How Meritocracy Made the Modern World. He would eliminate all ALDC preferences and extend that reform to academically selective secondary schools, allocating slots on the basis of testing.
And this isn’t just about mobility and fairness. There’s a geopolitical angle. China is returning to its meritocratic roots in both education and government. (At the height of the Chinese Mandarin system about 10 percent of the population was sitting these exams, Wooldridge notes.) Yet America seems to be going the other way as, for instance, a growing number of colleges and universities drop standardized testing as an admissions requirement. All part of a dangerous trend, Wooldridge says:
America is engaged at the moment in a huge revolt against meritocracy. You have SATs being got rid of for admission to lots of universities. You have Lowell School and Boston Latin School getting rid of examinations and replacing them with lotteries of all things — essentially blind admission. . . . So instead of a system based on results in which people win prizes on the basis of effort and ability, you have a system of spoils in which people get public positions or educational positions on the basis of organizing as pressure groups. And I think all of that’s bad because it creates a constant system of agitation and competition — not in the good sense of people all striving to learn things, but in the bad sense of people all agitating for spoils.
But America is not the only country in the world. . . . China is a country that’s growing very fast, a country that is determined to use this idea of merit to advance its own interests. If we have a world in which China is harnessing the meritocratic idea to reinforce the power of the Communist Party, the communist state, and America at the same time is dismantling meritocracy or softening meritocracy, if you have these two things going on at the same time, America loses. China becomes a massive version of Singapore. America becomes, I don’t know, a version of Brazil or something like that, and you lose. They win.
*The original version of this sentence left out “white” in front of the concluding portion “if they had been treated as white non-ALDCs”
The Long Read
⚠ Technological stagnation and the Zero-Risk Society
As bits of Peter Thiel-ian wisdom go, “Big plans for the future have become archaic curiosities” isn’t nearly as catchy as “We wanted flying cars, instead we got 140 characters.” But it’s the former saying of the billionaire venture capitalist that makes it into the 2020 paper “Are ‘Flows of Ideas and ‘Research Productivity in secular decline?” by Peter Cauwels and Didier Sornette at ETH Zurich. Thiel himself is mentioned multiple times. Indeed, the paper serves as a sort of empirical proof of Thiel’s stagnation thesis that modern society lacks bold, high-risk discovery and invention.
Of course, one could cite common statistical measures, including total factor productivity and longevity, as evidence that the pace of technological progress has slowed. Or how about a regression in the speed of air travel? It takes just as long to fly from LA to New York or to London as it did 40 years ago.
(Before I dig into the Cauwels-Sornette paper, a few definitions. “Discovery” means the first observation or recognition of something physical already existing, such as a star or fundamental particle, but also an insight into something intangible, like a fundamental law of nature. “Invention” means the creation of something new: a steam engine, a mathematical algorithm, a chemical process like the Haber-Bosch ammonia synthesis to produce fertilizers. And “innovation” is the novel combination of “existing technologies to solve a problem, optimize a process or bring a new product or service to the market.”)
Cauwels and Sornette have created their own metrics and indices for analyzing scientific and technological progress. One is what they call the “Flow of Ideas.” It gives, for each year between 1750 and 1988, the number of “protagonists” from different scientific disciplines and geographical areas that are professionally active. These protagonists are considered “elite practitioners” — scientists and technologists “acknowledged in reference works for their significant contribution to the body of discoveries and inventions.” (Specifically: Krebs’ “Encyclopaedia of Scientific Principles” and Asimov’s “Chronology of Science and Discovery”) A second index is “Research Productivity,” which gives the per capita (per million) result of the Flow of Ideas index. Cauwels and Sornette use the Krebs and Asimov data to define single indices, per scientific discipline and region.
One obvious question: Why look at sci-tech practitioners in a particular year rather than the number of actual discoveries and inventions made in each year? Cauwels and Sornette find that approach problematic, arguing it’s “impossible to pinpoint the exact years when ideas are generated around a new discovery.” Look at this chart:
Although each discovery has a corresponding year, each was certainly preceded by many years of research and refinement: “One could argue that the Flow of Ideas leading to [Max Planck’s] theory of quanta started when Kirchhoff formally stated the problem of black-body radiation in 1859. . . . [Or] one could use the year 1894 as start date, when Planck turned his attention to the problem. When looking at the discoveries in the table from this perspective, it becomes clear that they do not contribute to the Flow of Ideas as single events in one particular year.”
The core Cauwels-Sornette findings:
Our main result is that scientific knowledge has been in clear secular decline since the early 1970s for the Flow of Ideas and since the early 1950s for the Research Productivity. . . . Research productivity is not constant. One can observe two waves, one around 1780 and another around 1820, which coincide with the First industrial revolution; a steady increase, between 1850 and 1910, that quantitatively demonstrates the occurrence of the technological revolution; and a further acceleration, cusping in a clear peak at the end of the 1960s and early 1970s, coinciding with the post-war boom of the electronic revolution. After that, all indices are in steady decline. The fact that the temporal patterns of the Flow of Ideas and Research Productivity indices coincide with the industrial and technological revolutions provides a validation step of our index construction methodology.
The below Cauwels-Sornette charts illustrate those results with Flow of Ideas on top and Research Productivity on the bottom. The charts on the left also have a regional breakdown.
A somewhat similar approach to that of Cauwels-Sornette, which the researchers mention, can be found in a 2005 paper, "A Possible Declining Trend for
Worldwide Innovation," that attempts to measure the scientific progress over the past 500 years. It defines the “rate of innovation” as “the number of important technological developments per year divided by the world population.” The startling conclusion: The rate of innovation peaked around 1873 and started to decline rapidly afterwards. Additionally, the model projects that 90 percent of the economic limit of technology would be reached in 2018 and 95 percent in 2038.
One obvious eyebrow-raiser, Cauwels and Sornette note, is that there’s no sign of any industrial and technological revolutions in that paper’s data, “only one wave up, cusping around 1873, followed by a continuous and more rapid decline ever since.” Another problem: Huebner does all the calculations at the world aggregated level, which is odd since innovations primarily happened in the advanced world while population growth has been taking place in the developing world for decades.
Anyway, what explains the stagnation? Cauwels and Sornette see an unhealthy imbalance between three fundamental drivers of technological progress: “the efficiency of the low-risk, mostly incremental, exploitative innovation, the serendipity of the medium-risk creative invention, and the boldness of the high-risk explorative discovery.” Now all of those are important, but the researchers see too much focus on exploitation (innovation) in disregard of creativity (invention) and exploration (discovery). Cauwels and Sornette: “It is a sign that our affluent society has become extremely risk averse; we refer to this as the zero-risk society. When wealth and age in society increases, people become ever more risk averse, focus on going concern, protection of existing wealth and rent seeking.”
And their solution? Well, it could have been written by Thiel, Marc Andreessen, or probably just about any high-impact entrepreneur:
Paradoxically, in order to make our society more resilient, we contend that we need to be open for exploration, and be willing, but also create opportunities for people, to take unknown risks. As a matter of fact, this is also the only way to get out of the trap of diminishing returns and escape from the “equilibrium” of economic and technological stagnation. This is comparable to the military tactic of reconnaissance. Indeed, you put smaller groups of scouts at a higher risk, but the exploration outside the area occupied by friendly forces is at the benefit of the larger group and increases its resilience.
We need “to make risk-taking great again”. For the haves, we must promote a culture in education where failure is seen as part of the learning process. For the have-nots, we need to create a society that gives much greater access for everyone to opportunity, health, education and especially empowerment. Let us aggressively fund explorative, high- risk projects, encourage playful, creative, even apparently useless tinkering, that will surely foster serendipity in research on the longer term. Of course, targeted research is extremely useful, and efficiency is necessary, but we need to understand that most often this, at best, only leads to innovation. To stimulate discovery and invention, which are the parents of innovations, untargeted free exploration, driven by curiosity, as well as by economic and social rewards, depending on the individual or group, is key.
And finally, we need different role models for our youth. Why not promote the risk-taker, the explorer, the creative inventor as a new type of social influencer acclaimed like a Hollywood or sports star? Only by such a deep cultural change, by bringing back the frontier spirit and making risk-taking great again will we be able to escape from the illusionary and paralyzing zero-risk society and deal with the massive lurking risks that it produces.
Technological progress, as well as politics, is downstream from culture — both in terms of what we value today and how we imagine tomorrow. And that stream has been polluted with caution and pessimism for a half century. (Of course, it works the other way, too. Rapid growth and progress can also inspire optimistic, techno-solutionist culture.) How much of the coverage of Elon Musk focuses on his tweets and overpromising on Tesla autonomy — of course, journalists report both the good and bad — versus the absolutely amazing things SpaceX is accomplishing and what that means for America’s future?
One of the goals of Faster, Please! is to explore ways of creating a more pro-progress culture. So if you have ideas or come across any, please pass them along!
*Note: The image accompanying this issue comes from For All Mankind on Apple TV+
One challenge with government funding of higher risk projects is that that failure of a project inevitably becomes a campaign issue. Solyndra is a good example. In The Fifth Risk, Michael Lewis gives some examples of moonshot problems that will never get funded as long as failure can be demagogued.
That tweetstorm is bad. Denmark is the size of a US state and the contiguous US is about the size of Western Europe. US states can and do import and export energy like European nations, and it's possible for regional transfers to mitigate the issue of intermittency. It also doesn't even mention improvements in storage, or the large expected decline in the price of wind and solar power.
There might be good arguments against solar + wind (I'm pro nuclear), but that tweet thread doesn't properly engage with the issue.