Friday, September 30, 2011

If We Aren't Careful, We May End Up Where We Are Heading.

It is easy to predict man made catastrophes. Sometimes they even happen. Here are some intractable problems/trends that are likely to make the next hundred years "difficult". If we do not find some way, pretty quickly (fifty to one hundred years), to change course I think we could be fairly described as a failed species. That is, things will look much more like "Blade Runner" or "The Mote in God's Eye" than "Ecotopia".
This post assumes an unstated desired future. If your view of a desirable world differs significantly from mine, you may not find any problems here.
The good news is that we can relatively easily make things much much better. The bad news is that, as a species, we seem incapable of making good long term choices. If change occurs it will likely occur on the back of poverty, war, famine, and plague. If change does not occur, we are condemning our descendants to an impoverished, less habitable planet.

Social Trends - Concentration of Wealth

It has always been true in settled societies that wealth is concentrated. As productivity increases in industrialized societies, it takes less and less labor to make the same amount of goods. Either we constantly increase the amount of goods we desire and require (endless growth) or more and more people become "redundant" as they say in England. That is, there is no need for their labor.
In the nineteenth and twentieth centuries there was a serious countervailing social movement to redistribute wealth to make societies more equitable. Tides seemed to have turned and, particularly in the United States, the scales have tilted toward unfettered wealth and, along with it, increasing manipulation of both media and elections to serve the plutocracy.
I am not suggesting a trilateral commission type conspiracy. Instead, individuals and groups with plenty of money are doing their best to publicize their point of view and make it the basis of discourse. There has been about a century of systematic work to improve marketing. In the political arena the admonition that government should be more like business has been taken to heart in the propaganda department. Political messages use the tools of marketing (focus groups, test markets ...) to find the most immediately effective messages.
There have been some genuine innovations in the exercise of power though. For example, it is no longer necessary to buy politicians. It is much easier to find someone who already holds your point of view and work for their election. An extreme example is Caperton v. A.T. Massey Coal Co..
Sometimes there are social policies that reinforce the concentration of wealth as an unintended consequence. For example, higher education is increasing in cost and is commonly funded with loans. Forbes reports that two thirds of all students graduating from four year colleges and universities carry loans with an average debt of $23,000. This is a doubling from 1996. Instead of leaving the University with knowledge and a clean slate to start new enterprises, this generation is pretty much forced by debt to become simple employees of existing operations.
We know the end of this story. In the U.S. there is relentless propaganda campaign that insists that we have a pure meritocracy and the wealthy are the ones who feed us all. As the gap between haves and have nots continues to widen and the number of have nots increases, eventually they will simply rebel. If that happens, expect decades of chaos and class warfare with guns.

Social Trends - Fewer, Larger Entities

As technology improves it becomes possible to create larger and larger organizations. Advances in information processing have accelerated this capability.
The current tendency is writ large in the video distribution industry. When VHS tapes became the technology winner, the low entry costs for starting a video store allowed thousands or even tens of thousands of independently owned video stores to blossom. Almost as quickly there was a wave of consolidation as smaller operations were either bought or driven out of business by a regional video chains. These, in turn, were consolidated into a few national chains (Blockbuster, Showtime) which dominated the market. There are still mom and pop video stores, but after the first boom they never had appreciable impact on the market as a whole.
In many industries there are very few real players. This includes media companies where nine companies control virtually all television and Clear Channel controls 1200 radio stations. Four cell phone providers own the lion's share of the mobile phone market (280 million subscribers). There are five major oil companies. Oil companies are among the largest companies that have ever existed. Over half of all farm seed is produced by fewer than ten companies.
As a side effect, increasing institution size also works to further concentrate wealth.
We know from network theory and from study of biological systems that diverse systems which have large numbers of highly interconnected parts are more resilient and less prone to catastrophic failure than systems with fewer nodes and interconnections. When diverse systems of many nodes have some of them fail, the remainder of the system tends to work around the problem. When their are fewer, strongly connected nodes, they tend to drag each other down in the face of disaster. Note how this sounds just like the start of the 2008 financial crisis and the current Greek debt crisis.
In agriculture, the number of farms has decreased, the acreage of each farm has increased, and the vast majority of farms are a monoculture. We have centralized meat and food processing. While the system may be immediately efficient, it is also incredibly fragile and shortsighted. We impoverish the ecosystem, including the soil ecosystem. We also make our food supply dependent on a smaller variety of foods where a single virulent disease can spell disaster. Centralized processing means that millions of people can be infected or poisoned from a single point.
Despite their inherent fragility when faced with the unexpected, in the normal course of events, centralization tends to win. The only way to redress the problems is by creating an environment that rewards smallness or penalizes bigness.

Social Trends - Race to the Bottom

Globalization has allowed the entire world to become a source of labor and products. One side of this is that wealth has flowed to some desperately poor places. The other side is that it has depressed pay in many developed countries and made jobs much less secure. While money does flow toward poor areas of the world, the net effect is to lower labor costs in general. It is interesting to note that globalization involves capital and goods, not people. A factory worker in Sheboygan is competing with workers in Bangalore, but it is unlikely the factory worker can emigrate to Bangalore and take advantage of its lower cost of living.
Globalization allows producers to reduce costs. Labor is part of this, but not the whole picture. It is also possible to reduce costs by operating in locales that allow costs to be ignored or externalized. For example, it will be cheaper to produce in a country that allows wholesale pollution or deforestation because you don't have to install that expensive emission control equipment or worry about forty years down the road when the trees are all gone.
Because every locality wants the jobs, the tendency is to offer the most attractive deal possible to producers who promise jobs. Producers use this to pit localities against each other. Internationally, this rewards countries with the worst labor practices and the most lax regulations. Within the U.S., communities generally bid by offering tax breaks. The hope is that the increased wage base will make up for the breaks, but often the end result is simply to starve local government.
When the cost of production goes down, a number of things can happen. The cost of goods to the end consumer can go down. High tech items show this most clearly but it also shows up in the price of clothes at Old Navy. Second, profits for producers can increase. This has happened as well. In the current "recession" profits for U.S. manufacturers have completely recovered. Finally wages for workers can increase. In the past few decades this has not happened. Wages in the U.S. have been stagnant for almost two generations. When producers (owners) increase profits but workers do not share in the wealth, this increases the concentration of wealth.
Remarkably, public discourse on workers benefits has joined this race to the bottom. Look at the discussion over public pensions. There is a problem with pension funding. Governments have sometimes promised more than was prudent (as did GM and other major corporations). The discussion never seems to be "how can we get private retirement better", it is always "public employees are getting benefits that private employees do not, let's reduce them".

Social Trends - Rise of the Ideologues

Never underestimate the power of a simple idea or worldview even if it is completely wrong or destructive.
People will take a few general principles and assume everything can be explained by them without much regard to complicating factors. If the ideas lead to bad results, it is a failure of application, not the principle.
Among the current Ideologies that are threatening social destruction I would include (non-exhaustive list): radical violent Islam, any religion based on literal inerrancy of the bible, libertarianism, and all forms of racism.

Social Trends - Algorithms and Hubris

There is a notion in computer science called the singularity. This is the creation of smarter than human intelligence. A basic question is, will we notice it?
We already have specialized machines that perform much better than humans. Computers have bested humans in games like chess. Robots create and assemble parts much faster and more accurately than humans. In the computer gaming world, our "enemies" are dumbed down to correspond to our terribly slow human reaction time and limited ability to handle large numbers of inputs. Our planes and cars are already run by computers. Humans enter basic parameters for flight, but the plane itself makes virtually all decisions.
To increase efficiency we constantly streamline and automate business processes. The end result is an expansion in the power of algorithmic systems. In a modern corporation there are fewer and fewer levers pulled by fewer and fewer people. Take shipping as an example. A company like Fed-Ex has completely automated the routing of packages. Once your package information is entered into the system, humans do nothing but follow a machine generated instruction to pick up a box in one place and drop it at another. Airline reservations are another example. Humans do not play any role in the process. The price is determined by complex algorithms that are probably beyond the understanding of any single person. Planes are automatically booked and overbooked. Even upgrades and seat re-assignments are pretty much controlled by the algorithm. The person at the gate has almost no choices and no authority.
The system we have to create these systems is not reassuring. When a business decides to automate a process, a team of people, often outside specialists, is assembled to analyze the problem and implement a solution. When successful, the results are put into production and handed off to a separate team that is in charge of operating, maintaining, and improving the system. In theory this is a repeatable process with each group playing its specialized role. The players usually do not understand each other's roles very well. At the business level, the indicators are productivity (how many flights are booked in how much time and at how much cost) and overall profit and loss. The systems are designed to report some set of indicators so this can be tracked. The people who look at the indicators do not usually understand the underlying algorithms. The people who design and implement the system are specialists in new product creation and generally leave the scene after the process is in place. The people who maintain and improve the system generally have documentation, but they may not be aware of why particular design choices were made and the trade-offs involved.
Another way to state this is that every day we create large algorithmic systems that no single person, or even group of people, understands. As long as he systems work reasonably well or can be discarded, there is no real problem. When the systems fail or are critical but so complex they cannot be discarded, we run into trouble.
On Wall Street, most trading does not involve humans. In 2009 almost three quarters of all stock trades were automated trades based on computer algorithms. Since then this number has almost certainly increased. When you listen to commentators discuss the stock market and why it moves one way or another, it is complete nonsense. It sounds good and it always supports the commentator's overall view of the world, but it is not based in any kind of fact. On May 6, 2010 the stock market briefly crashed. It took five months to issue a report that could attempt to explain what actually happened. The basic answer is that the machines did it.
The hubris part of this trend is that there are people who think we can model and control complex systems. As an example, one of the great failures of modern economics has been the attempt to quantify risk. Do a google search for "quantification of risk economics". You will get pages of google results that are complete nonsense written by people who actually believe they are close to the holy grail of putting a number on risk. Often they create models that work well in certain circumstances - but their predictions ALWAYS fail catastrophically in the long term.
What happens when you put a couple of people with Nobel Prizes in Economics in a room with the Vice Chairman and Head of Bond Trading at Solomon Brothers. You get a well funded scheme to make money based on the finest and most capable economic models of the day. You get "Long Term Capital Management" a firm which made profits until it completely failed in 2000. The failure of a single firm, even a big one, is not particularly important. Unfortunately the firm was so highly leveraged (highly leveraged means "playing with huge sums of other peoples money") it threatened to bring down large portions of the financial system. Fixing the problem required a massive bailout supervised by the Federal Reserve. It failed because of events that they simply could not predict. That is the point. There are always events that we simply cannot predict. We do pretty well with "normal distributions", hence the reliable existence of life insurance. Unfortunately, most real world economics are not "normal".
The run-up to the 2008 collapse was a tribute to the power of simple greed, but all good cons need a convincing story. In this case, investors were reassured that the risk involved in collections of mortgages was known and quantified, and besides, we can hedge (insure) to limit losses. There was outright lying at every level of the financial transactions, but a systemic problem was that the intertwined system intended to reduce risk by spreading it, simply increased risk for everyone. Of course there were some folks who knew about the lying and worked the system to their own advantage (notably, Goldman Sachs).

Social Trends - Missing the Big Picture

Evidence based action is important to understand what works and what doesn't. When we have the evidence it seems silly to ignore it. But, it is also silly to read more into our simple experiments than is actually there.
Experimentation is difficult and expensive. This is especially true with trying to understand humans. Too often we end up understanding and exploiting a tendency. The results may be immediately satisfying but ultimately destructive.
There are many situations where short term investigation gives us a "local optimum" where people are more satisfied at this instant, but the end result is ultimately destructive to our health and well being.
The prime example of this is industrial food production. To build a more popular food product you have to understand what people want so they will buy your product. An industry with a new product must be able to produce it consistently and on a large scale. If you create a focus group or simply ask people on the street to tell you which of several food products they prefer, the winner is likely to be the the cheapest product with the highest sugar/fat/salt. As organisms that evolved in circumstances of want, we crave these things. To produce the product consistently and in large quantities you have to industrialize the production of the raw ingredients. In the case of food this is living organisms. For crops, we standardize the breeds, the methods of production, and we process the results in chemical plants to homogenize, filter, and extract. For animals, we reduce them to eating machines on a cheap controlled diet and we engineer their genetics to change what was an animal into a muscle production machine.
We get consistent products that we biologically crave, we also get obesity, diabetes, heart disease, and an odd form of malnutrition. Don't worry about the malnutrition though, because we have processed supplements to fix that.
Since the introduction of the automobile we have done exactly the same sort of short term fixes. When faced with traffic problems, typically traffic congestion, the answer is always the same. Congestion will be alleviated if we add more lanes and reduce the number of entrances into the main streets (no houses on arterials). It also helps if people stay away from the congested areas. The end result is our typical suburban city form. That is, a built environment that is reasonable if you are a car, but not very suitable for supportive human culture.
On a business level the question is usually "How can we improve our profits this quarter or this year?" It is almost never "How can we stay in this business in a sustainable way?" or "How can we make the world a better place in ten or a hundred years?" If your time horizon for profit is one or even five years and an opportunity arises to make a profit based on destruction that will not become apparent for ten or twenty years, most businesses will take the profit and screw the future, which leads to the next section.

Environmental Trends - Destruction of the Natural World

It is clear that as a species we are quite willing to destroy everything around us for short term survival or short term gain. We are willing to completely destroy the natural environment. Take as examples mountaintop removal for coal, deforestation and overfishing.
On top of this, there are unintended results of our actions. The prime example is global warming. General habitat destruction as we exploit more and more of the world is a severe problem.

Environmental Trends - Unsustainable Human Population

We have already passed a tipping point in human population. We have more people than the planet can sustainably support. Like a profligate child with a large inheritance, we can live for some time by depleting our inheritance, but in the end we will be broke. In this case of humanity, our inheritance is the natural world and all its riches which we are rapidly despoiling.
It is not clear what the carrying capacity of our planet is, particularly since this is partially related to the technology at hand. It is clear that we have exceeded the current capacity. As the human population continues to increase we will see even more rapid environmental degradation as well as more frequent human disasters (crop collapse, famine, social unrest, war for resources...).
In industrial countries population has stabilized or even decreased. This gives some hope that we can control our own numbers. For the world as a whole I think it is likely that we will simply exhaust natural resources. This will cause a very painful decline in human population based on misery.
As a contrast, think what the world would be like with our current technology if we had a third of our current population. We could live in a world of human plenty with a massively improved environment. We have passed the point in human society where increasing human labor is the best way to improve the human condition.


sf said...

Ahh, the Eternal Pessimism of the Intellectual Mind...

Not to say that you aren't correctly describing what's going on...

Michael G. said...

Ah, but this is not pessimism. This is just looking at the charts and stating where they are going. The fact that some people see clearly the problem is a very good sign.

Here is something a bit more pesimistic. If you look at every living species on the planet including pine trees. There is one thing that they all do, propagate until the carrying capacity of the environment around them puts a stop to growth. Humans have been especially clever ways to manipulate matter. When we end up depleting the resources around us, they will have been cleaned to the last crumb. No chance whatsoever for "rebuilding." We go back to the stone age or we cease to exist.

At our current rate of consumtion, it is quite likely that Jessica's son Adam will live to see the real and definitive start of the decline. It is not clear that his children (he is so smart and handsome that it is not possible he will not have children ;-)) will either be living well in a totally different social structure or he will be really curious about what the hell all these things lying around labeled "computers" were used for.

Now that is not even pessimistic. When I say that this is indeed a likely outcome for America, now that is pessimistic. Might I suggest a migration to the South American Andes where, if the "modern world" crashes, they will simply say "huh, that was interesting" and continue to work as they have for a couple of thousand years.

I think it is here that my optimism shines. There is still time to move the family to the rain forest before the idea gets too popular and the locals figure out what jerks we are and start using us as a source of protein. With the dietary increase of complex amino acids perhaps nature can finish constructing a brain that can actually think well. In the end, things may work out well. See, optimism.