I’m vacationing in California this week. (Take the family to L.A., they said… the weather is always perfect in L.A., they said…). I’ve read a couple of pieces during the trip that I want to share and comment on. (1) Elon Musk’s Shadow Rule, by Ronan Farrow. (File under: Big Money Ruins Everything)
The weirdest thing in the world about capitalism is that its chief defenders and proponents tout its intrinsic, natural adaptability--a system that doesn't need command inputs from human managers or planners, that routs goods and services to where they are most in demand, adjust prices based on supply, incentivizes producers to make more or less of a commodity based on need, grows wealth...
...and then they're the ones clutching pearls most desperately whenever it comes up against a problem that ostensibly its adaptability shouldn't be fazed by. Not enough workers for difficult, boring-but-necessary, or dangerous jobs? Isn't that precisely where the orthodox theory of capitalism says that wages should naturally rise, until people are properly priced in to do that work? (Or where employers are properly incentivized to find ways to make those jobs less difficult, less boring, less necessary or less dangerous and thus attract more workers at the going price?) Does that make the commodity or service being produced too expensive? Well, at some point either the buyers will have to pay what it costs or decide they don't need the commodity or service. Or maybe there's some other work in the production process that is being artificially overvalued. (Hint: the CEO? The whole C-suite?)
Same deal here. A shrinking population that skews older? Either adapt working conditions to make them attractive to older workers, etc.; adjust production to the population that you have rather than some imaginary one you want, and so on. Isn't this what we're told capitalism just did naturally and all that?
Now if that's all a load of hooey, then yes, maybe there's an issue. And you know what, maybe neoliberalism and wealth inequality is the *reason* that populations are shrinking and aging--that social democracy created security and continuity that made more people want to have families and more confident about the future for their children. Maybe the more that people see others going broke because of terrible health care, ballooning housing costs, the insecurity of gig work, etc., the less inclined they are to have children *and* less inclined to work hard on their own behalf. Etc. But people skeptical of the idealized sketch of capitalism already knew that for any problem of this kind, some form of collective action through the state is the only possible answer in our present system.
"Fewer workers, supporting an expanding elderly population, will strain the tax base and muck up all sorts of macroeconomic trends. People will have to work longer and harder to accumulate any sort of wealth. It’s not going to be great."
I know this is the conventional wisdom but I'm not sure it's true. Consider two factors: housing costs and wages. Over the past generation, housing costs/values have far exceeded inflation (in large part due to under-supply), and wages have lagged inflation (due to suppressed worker power). In a future where there are fewer people over time, it's easy to see how this flips: a declining population leads to an over-supply (and thus falling costs) of housing, while a shrinking work force is empowered to demand higher wages. They earn more and have to pay less for their biggest budget item, and so: more wealth!
Now, yes - an aging population will need more (expensive) medical care - but there's a huge amount of deadweight loss in both the US healthcare system and our consumer economy, generally. Realigning both will be work but I'm not freaking out about that as much as I am about, e.g., ocean acidification.
The FTC fines? No, it’ll be the EU fines, since the EU is much less reliant on him and has demonstrated increasingly assertive animus towards American tech companies operating there.
“Without SpaceX, NASA can’t transport astronauts to and from the International Space Station. Without Tesla’s charging stations, the U.S. can’t meet its electrification goals.”
NASA has multiple contractors they can use. NASA is not stupid and does not rely on 1 manufacturer or launch site. They’ve invested in SpaceX because they want to develop more private companies as viable options beyond transitional aerospace contractors.
They also want to depreciate Soyuz entirely and decouple from Russia
Good points! The assumption that capitalism as we know it will continue in a more or less linear fashion is ... not realistic. I don't know what will happen or how, but, as a library director, I was involved in managing institutions which in 2000 were assumed to be permanent, even though they had serious problems. The last one I was at is now gone. Things do change - it's gradual enough that we often don't realize how radical the changes are.
It's quite conceivable that the big fortunes will be phased out more quickly than they were built. (I'm listening to Woody Guthrie right now, it's not impossible that Elon will get his wish and go settle on Mars-for as long as the resources he brings with him last...)
People adapt, societies adapt. It's not always pleasant, but saving the big fortunes by continuous growth doesn't seem like a large priority. There are much deeper incentives for fewer people to have lots of kids nowadays than can be addressed by moralizing and tax benefits. When people are adapted to the new climate and prospective parents concretely see a hopeful and prosperous future for their descendants they will start having children. I don't know how long it will be until that happens. (If 200 years from now the world population is 2 billion people, is that necessarily, in itself the catastrophe? It's how we get there that's scary.)
The US should nationalize SpaceX, like, now.
Until this week, I was certain that neither DOJ, nor any other federal agency would touch Musk, but SpaceX was just sued by the DOJ for widespread discrimination.
It's unlikely that the Consent Decree will be enforced, given that Twitter is still on course for bankruptcy, but this DOJ action might cause a contagion of courage in other countries re Twitter or Tesla.