Category Archives: Social Commentary

Business, Economics, Education, Media Criticism, Political Commentary, Social Commentary

Another Road

January 29, 2013 Rand Simberg 3 Comments

The Blue elites are wrong:

It is easy to see how rational people can conclude that the only hope of preserving mass prosperity in America comes from transfers and subsidies. If we add to this the belief that only a powerful and intrusive regulatory state can prevent destructive climate change, then the case for the blue utopia looks ironclad. To save the planet, save the middle class and provide American minorities and single mothers with the basic elements of an acceptable life, we must set up a far more powerful federal government than we have ever known, and give it sweeping powers over the production and distribution of wealth.

But what if this isn’t true? What if the shift from a late-stage industrial economy to an information economy has a different social effect? What if the information revolution continues and even accelerates the democratization of political, social and cultural life by empowering ordinary people? What if the information revolution, like the industrial revolution, ultimately leads to a radical improvement in the way ordinary people live and opens up vast new horizons of human potential and freedom?

Obviously nobody knows what the future holds, and anything anybody says about the social consequences of the information revolution is mostly conjecture; still, the elegantly paternalistic pessimism of our elites about the future of the masses seems both defeatist and overdone. The information revolution, one should never forget, may be disruptive but more fundamentally it is good news. Human productivity is rising dramatically. If the bad news is that fewer and fewer people will earn a living working in factories, the good news is that a smaller and smaller percentage of the time and energy of the human race must be devoted to the manufacture of the material objects we need for daily life. Just as it’s good news overall when agricultural productivity increases and the majority of the human race no longer has to spend its time providing food, it’s good news when we as a species can free ourselves from the drudgery and monotony of factory work.

Good news is bad news for people who don’t like (other people to have) freedom. They need a crisis to not waste.

Business, Political Commentary, Social Commentary, Technology and Society

Memories Of Flint

January 26, 2013 Rand Simberg 1 Comment

A few months ago when I was back to visit relatives, I took a drive around, and saw the vast empty field that used to be A.C. Spark Plug, where my father and later my brother (and, during summers in college, I) worked. And when I flew in, I saw from the air the ruins of what used to be Buick City, along the Flint River. It was surreal.

For years, Gordon Young, a Flint native living in San Francisco, has been running a blog that’s become sort of a water cooler for people who are from Flint, Michigan, but not necessarily any longer residents.

As a result of a lot of time spent back there over the past few years, he’s written a new book about his experience in buying and restoring a dilapidated house. I don’t think you have to be from Flint, or even Michigan (similar deindustrialization stories could be told about Pontiac, Saginaw and of course Detroit itself), to appreciate the theme of how you can’t go home again, but sometimes you can come close.

And I hope that with the new right-to-work law in Michigan, some of the companies like Honda and Mercedes and others will now consider setting up shop on the old industrial sites, and there can be some semblance of a return to the former glory, even if the new jobs won’t provide the middle-class incomes on unskilled labor that they did in the fifties and sixties. Those days are simply gone, never to return.

[Update a couple minutes later]

Here’s an example post from the blog. 1973 was the year I graduated from High School, into a recession that in Flint was a depression (unemployment was more than twenty percent). The suckitude of the economy, and getting laid off from a job as a mechanic at the VW dealer, inspired me to go back to school, at Mott Community College (named after Charles Stewart Mott, on whose property it was built, and who did die that year, as Gordon notes). In retrospect, that probably was the high point. I moved away three years later, to go to Ann Arbor, and never moved back.

[Update a few minutes later]

Here’s the book’s web site. That reminds me that I should build one for mine.

Business, Philosophy, Political Commentary, Social Commentary, Technology and Society

The Grounding Of The Dreamliner

January 26, 2013 Rand Simberg 24 Comments

…is a sign of a threat to innovation:

The Dreamliner’s troubles reflect a wider trend. Innovation in mature economies such as America’s seems stuck in a perpetual holding pattern.

Venture capitalist Peter Thiel has warned about this slowdown for years.

“There is so much incrementalism now,” Thiel said in a recent interview with Bloomberg Businessweek. “Even back in the ’90s there were companies like Amazon that were willing to do big things. That has gone out of fashion now.”

Thiel points to Space Exploration Technologies Corp. and the electric car company Tesla Motors Inc. (TSLA), both run by Elon Musk, as the rare examples of recent attempts to leap forward boldly. Yet Musk often gets portrayed as a quixotic dreamer.

“I think this reflects the insanity of our country, that anything non-incremental is seen as insane,” Thiel says.

Who’s responsible for this perceived downturn in innovation? One obvious target is overweening government. Some Boeing defenders have charged that the FAA wildly overreacted by grounding the Dreamliner.

“They are trying to make us too risk-averse,” says Gordon Bethune, a retired airline executive who worked for Boeing and later ran Continental Airlines. “The FAA is teaching Boeing something. Are we sending the right signals to our innovators in automobiles, airplanes, appliances, that the heavy hand of God is going to come down on you if you have so much as one question wrong in a hundred-question exam?”

Yet an even more important factor than excessive regulation is that the public markets simply don’t reward big risks. While going public theoretically should give companies more access to capital to finance research and development, it turns out that an initial public offering actually tends to discourage bold bets.

More than 20 years of patent citations show that on average in the five years after a company stages an IPO there’s a 40 percent drop in the quality of innovation, says Shai Bernstein, an assistant finance professor at the Stanford Graduate School of Business, who has studied the trend.

I think this is why Elon has backed off on what were originally rumored to be his plans for an IPO this year.

Gee, someone should write a book about the consequences of extreme risk aversion for human spaceflight.

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