Astral Codex Ten

Great Stagnation

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Great Stagnation

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Great Stagnation is a recurring concept in the Astral Codex Ten archive, appearing 4 times across 4 issues between June 04, 2021 and November 27, 2024. The archive places it in contexts such as ""the Great Stagnation""; “We can state the Great Stagnation story nearly as simply”; “Gibson, like Thiel, is a believer in the Great Stagnation - the theory that we’re already reaping the consequences”. It most often appears alongside America, New York City, United States.

Metadata

  • Category: Concepts
  • Mention count: 4
  • Issue count: 4
  • First seen: June 04, 2021
  • Last seen: November 27, 2024

Appears In

Source Context

Recovered passages from the original issue text. When the raw archive preserved outbound links inside the source passage, they are listed directly under the quote.

Your Book Review: Where's My Flying Car?
June 04, 2021 · Original source
What went wrong in the 1970s? Since then, growth and productivity have slowed, average wages are stagnant, visible progress in the world of "atoms" has practically stopped - the Great Stagnation. About the only thing that has gone well are computers. How is it that we went from the typewriter to the smartphone, but we're still using practically the same cars and airplanes?
Inline links: Great Stagnation
"Where is my Flying Car?", by J. Storrs Hall, is an attempt to answer that question. His answer is: the Great Stagnation was caused by energy usage flatlining, which was caused by our failure to switch to nuclear energy, which was caused by excessive regulation, which was caused by "green fundamentalism".
Inline links: "Where is my Flying Car?"
The miracle of the Industrial Revolution is now easily stated: In 1800, 85% of the world’s population was at Level 1. Today, only 9% is. Over the past half century, the bulk of humanity moved up out of Level 1 to erase the rich-poor gap and make the world wealth distribution roughly bell-shaped. The average American moved from Level 2 in 1800, to level 3 in 1900, to Level 4 in 2000. We can state the Great Stagnation story nearly as simply: There is no level 5."
Book Review: Paper Belt On Fire
March 23, 2023 · Original source
An advertisement for the author’s hedge fund Michael Gibson’s memoir Paper Belt On Fire succeeds on all counts. The year was 2007. Gibson had just dropped out of Oxford (grad student, philosophy), and applied for a job with the CIA. His secret reason: when he was one year old, his father had admitted to his mother that he was a spy and might be in danger. Before he could tell her anything else, he was found dead, apparently of a heart attack. He thought maybe if he worked at the CIA, he would have access to more information about what happened. The CIA evaluated him (along with a telephone interview, an “IQ test, a personality test, a statement of values, [and] a set of essay questions”) and rejected him. Gibson got a job as an editorial assistant at a tech magazine and blogged on the side. Some of his blog posts came to the attention of Peter Thiel, who offered him a job at his hedge fund. Wasn’t it a bit bold to offer an Oxford philosopher a hedge fund job? Yes, the book mentions how brave and radical and unconventional Thiel’s hiring policies are about twice per paragraph. For example: The media consistently gets Peter wrong . . .The Atlantic’s George Packer wrote . . . that Peter’s hedge fund had the reputation of being a “Thiel cult” that was “staffed by young libertarian brains who were in awe of their boss, emulating his work habits, chess-playing, and aversion to sports.” Packer is a great writer, but in this he was dead wrong, as anyone actually working on the desk knew. Sure, Patrick “the Wolf Man” Wolff was technically a chess grandmaster, ranked higher than Peter, but hardly anyone else ever played. More importantly, the Wolf Man was a diehard Krugman Keynesian. Woersching was a lefty, too, an ardent fan of the egalitarian philosophy of John Rawls. And Josh, he was a dirt-road California Democrat who was a downhill ski junkie […] In truth, Peter didn’t hire just libertarians. He hired scapegoats who’d survived a mob. People who felt comfortable being a minority of one. Thiel in no way selects employees who agree with all of his controversial libertarian opinions. But, by total coincidence, Michael Gibson does agree with all of Peter Thiel’s controversial libertarian opinions. He writes about Cardwell’s Law; historian Donald Cardwell noted that no country remains on the cutting edge for long. During the early Renaissance, Italy was where it was at; a century later, it was Spain and Holland; later still, Britain and Germany, and now new discoveries and businesses come disproportionately from the United States. Why? Gibson and Thiel think that innovation is a rare and fragile plant, which thrives only in the hidden cracks between power structures. Established structures either stamp it out as a threat, or rent-seek off of it so hard that they bleed it dry. Wherever it succeeds, it has succeeded through weird quirks that prevent fat cats from parasitizing it to death. Hong Kong’s economic miracle was during the administration of John Cowperthwaite, an eccentric British libertarian who refused to collect economic statistics because he thought they would make it too easy for meddlers to extract value. America’s economic miracle happened because of a vast frontier - which not only provided freedom for westerners, but served as a BATNA for easterners, preventing their own institutions from sucking them too dry. Now the frontier has closed. New York City recently abandoned its attempt to build a light rail line to the airport: after reaching a $2.4 billion price tag and spending eight years in the planning phase, the government realized it wouldn't be able to overcome all the legal hurdles necessary to grant itself permission. The San Francisco Chronicle reported that it requires 87 permits, two to three years, and $500,000 to get permission to build houses in SF - and your plan might still get shot down because a planning commissioner thinks its glass windows are “a statement of class privilege”. The cracks have shut; the rare fragile plant has been shredded by a combine harvester. Gibson, like Thiel, is a believer in the Great Stagnation - the theory that we’re already reaping the consequences of our newly parasitic society. The early 20th century gave us cars, airplanes, electricity, and penicillin; the early 21st has so far given us some truly excellent social media sites but not much else. Innovation in the world of bits - unbound by geography, comparatively hard to regulate or extort - has sort of continued; innovation in the world of atoms has ground to a halt. And Gibson, like Thiel, talks like a man on a mission. What is good in man thrives only in a few tiny cracks, easily found and destroyed. The last crack was closed within living memory, but its legend hasn’t completely died; the few people who managed to pick up a little of its lore are racing against time to open a new crack before it is entirely forgotten and their project is left to the vicissitudes of history. The cover of “Paper Belt On Fire” goes hard. And yes, the “money” part is a reference to Bitcoin. Gibson’s heart was originally in charter cities - asking some government to open a tiny controlled crack in a sliver of its territory, promising it more meat in the end if it lets its victims grow fat and healthy than if it strangled them in the cradle. But for whatever reason they thought the time wasn’t ripe (the right time, apparently, would be 2019). Instead, Thiel asked Gibson to work on what would become the Thiel Fellowship. He teamed up with Danielle Strachman, a dangerously-hippie-adjacent burnt-out former charter school principal. Their plan was simple: offer talented kids $100,000 to drop out of school and do something exciting in the real world (usually start a company). Paper Belt spends long pages on the hate they got. Larry Summers called it “the single most misdirected bit of philanthropy this decade”. Journalist Jacob Weisberg said anyone who accepted the Fellowship would “halt their intellectual development at the onset of adulthood, maintaining a narrow-minded focus on getting rich as young as possible and thereby avoid the siren lure of helping others or pursuing knowledge for its own sake” (this was before journalists decided that helping others was also evil). Others focused on how there was no way any of these young people would possibly succeed or make money - when the first batch of Thiel fellows failed to revolutionize the world within one year, journalist Vivek Wadhwa wrote Billionaire’s Failed Education Experiment Proves There’s No Shortcut To Success. In fact (slightly conflating the part with the Fellowship with its successor fund): The press . . . hated us. In a 2016 New York Times op-ed, science journalist and author Tom Clynes claimed that “radical innovation has yet to emerge” from anything related to the Thiel Fellowship, and that “the biggest hits have been the most pedestrian.” Antonio Garcia Martinez, the author of the Silicon Valley memoir Chaos Monkeys, spewed forth his bile for us on social media: “For fans of ironic stupidity, Silicon Valley is a never-ending feast”, he wrote on Facebook. He went on to explain, with great vulgarity, why our fund would fail by backing young dropouts. My favorite . . . has to be the challenge issued by Scott Galloway, a professor and bloviator in marketing from NYU’s business school . . . who told Business Insider that if he picked ten smart recent graduates from his alma mater, the University of California at Berkeley, they would outperform any ten dropouts we worked with on some dimension of success related to income or startup formation. Of course he wouldn’t have written the book if any of these people had been right. I can’t find a list of all Thiel fellows, but there are ~20 per year and it’s been running about 12 years, so maybe 200 - 250? At least eight have founded companies valued at over a billion dollars, and others have become impressive philanthropists, activists, and scientists. Pretty good success rate. Gibson argues it’s not about the money, it’s about the mission. We’ve told young people they can’t succeed without the stamp of approval from big institutions. In order to get that stamp, they sacrifice their childhood on the altar of doing things that look nice to admissions officials, then go deep into debt to pay ruinous tuitions. All to waste four years of their lives listening to some professor drone on about post-colonial gender relations in Harry Potter so they can satisfy their gen ed requirement so they can learn the stuff they want to learn so they can get hired by McKinsey so that one day they can be cool and important enough to make a difference in the world. Why not tell young people they can just make the difference right now, without doing any of that? It’s not about the money - but when your graduates are routinely founding billion dollar companies, you’d be crazy to keep it that way. After a few years, Gibson and Strachman noticed the billion-dollar-bill lying on the ground, left the Thiel Fellowship, and started a new VC fund, 1517 (named after the year Martin Luther did some institution-challenging of his own). Their business plan was to do roughly the same thing as the Thiel Fellowship - only this time, invest in the companies beforehand (the parting with Thiel seems to have been amicable; he invested $4 million). So Gibson adopted the life of a venture capitalist. He talks frankly about the difficulties. For example, in one case he found someone nobody else believed in, gave them enough money to keep going, and helped them start their company in exchange for them giving Gibson a certain stake. After the company succeeded, Gibson accuses bigger VC firm Sequoia Capital of convincing the founder to kick him out, and stealing his stake. He says that in the world of VCs it’s poison to sue founders for any reason, so nobody can enforce contracts, so if your founders defect to a different VC for more money, there’s nothing you can do (this is not legal advice). Also, “please give me millions of dollars so I can invest it in college dropouts” is a tough sale for everyone except Peter Thiel. Still, he got a bit of money and tried his best. He takes as his - would it be insensitive to say “role model”? - John Walker Lindh, the American who defected to the Taliban (and who he apparently looked like). Probably it depends on the angle or something. Lindh was the only American to find Osama bin Laden in the early 2000s - he went to lots of jihadi training camps in the process of learning how to jihad, and Osama happened to be at one of them. The lesson, Walker says, is that if you want to find people who are hard to find, you need to steep yourself in their culture, truly understand them, become one with them. Good founders are hard to find. But he and Strachman went to dozens of dingy college dorms, math competitions, group houses, and hackathons, looking for people with the right sort of talent. After pooh-poohing IQ (“Marilyn vos Savant is listed as having the highest recorded IQ, and what does she do? She writes a column for a Sunday supplement in the newspaper”) he lists some of his own preferred metrics for judging would-be Thiel fellows and founders: Polytropon - a famously untranslatable Greek word (“of-many-turns”? “always-has-a-trick-up-his-sleeve” “clever bastard”?) used to describe Odysseus. Edge control - willingness to constantly surf the boundary between order and disorder Crawl-walk-run - ability to scale from a tiny startup to a big company. …and several others, including “tensive brilliance” and “Friday night Dyson sphere”. He and Danielle searched the country for people with these qualities, annoying colleges (he was banned from MIT after showing up too often to convince their students to drop out) and doing various stunts (on October 31 2017, the 500th anniversary of Luther’s theses, he nailed a list of anti-formal-education theses to the doors of the admin buildings of top colleges (“Our commercial printer had misunderstood our request and printed them on seven-foot-long scrolls. They were ridiculous . . . but it turned out for the best.”) At one point, he negotiated with a brilliant 21 year old who may have discovered a transformative diabetes therapeutic, but the hidebound conformist novelty-hating establishment refused to work with him just because he liked the Marvel Cinemat - okay, fine, he may have legally changed his name to “Tony Stark”. Still, Gibson saw past his eccentricities, helped him start his company, and gave him sage advice (he should introduce himself to other investors as “Anthony”). Skip through several more chapters of everyone hating Gibson and telling him he was wrong and refusing to give him money and cheating him out of the money he already had, and the payoff is Luminar. One of the dropouts they cultivated founded a beyond-cutting-edge lasers-for-self-driving-cars company which went public at $3 billion. 1517 made $200 million from the deal - it sounds like they had only ever raised about $25 million, so their investors must have octupled their money on that company alone. Everyone involved is now very rich, and Gibson considers his anti-education thesis on the way to being proven. The book ends with a newly-resourced Gibson continuing his quest to figure out whether and why the CIA killed his father, but it’s slow going. If any of you know a guy named Albert van Dam in Amsterdam, or how to convince Swiss banks to reveal secret account information, get in touch with him. II. A common pattern: I assert something. Everyone yells at me and tells me I’m wrong and stupid, sometimes in very colorful language. I wait, time proves me right, and I write an essay gloating educating people about this. The median comment is “of course this is true, nobody ever denied this was true, why are you wasting our time with something obvious?” I hate this and I try to avoid doing it to other people. This is too bad, because I’m tempted to say: obviously talented dropouts can start good companies. We’ve known this at least since Bill Gates dropped out of Harvard in 1975 to start Microsoft. But also, obviously they can. Brilliant and driven people can succeed whether they get a college education or not. If Bill Gates had stayed an extra two years at Harvard, he probably would have taken a few more advanced math classes not really related to programming software or running a company. So why should we even have as a hypothesis that he couldn’t start Microsoft successfully without doing that? Still, Gibson adequately proves that lots of people hated him and were sure he would fail. Either we should read this backwards - learn that there was once a time when pro-college messages were even stronger than now, so strong that people thought it was literally impossible to succeed without every single day of a four-year college application - or the critics were trying to get at something deeper they were bad at expressing. For example: what, exactly, is Gibson’s alternative to the education system? The back-of-book-blurb says Paper Belt On Fire is about “how higher education and other institutions must evolve to meet the dire challenges of tomorrow” - but evolve how? What exactly has been proven here? A few of the very brightest young people, hand-picked by an expert young-person-picker and given $100K, can become billionaires or make great discoveries without a college degree. What are the implications? Suppose you are an average college student with an average level of talent and motivation. Should you drop out and try to create a company for Peter Thiel? Based on how many average-talent people Thiel rejects, even he doesn’t think you should do that. And if you don’t have a good answer to this question - the one relevant to 99.9% of education system inmates - have you really launched a challenge to the educational system? Gibson doesn’t address this question, but I predict he would admit that, fine, he doesn’t have an alternative to the education system in the sense of “educate people this way rather than that way”. He just wants less formal education, and has proven this will work fine. True, he’s only proven it for a tiny subset of ultra-talented people. But “billionaire tech founder” is a hard job - if it wasn’t, more people would do it and reap the $1 billion reward. Proving that people can become billionaire tech founders without college degrees implicitly suggests they can be successful middle managers or budget analysts without college degrees. So the sort of companies that need middle managers and budget analysts should also consider hiring people without degrees, and the sorts of average-level-of-talent-and-motivation people who want these jobs should consider skipping college. Would this work? Probably. It worked in the early 1900s, when only 5-10% of Americans had college degrees but the country seemed about as dynamic and successful as it does now. It worked for people like George Washington, Abraham Lincoln, and Thomas Edison, none of whom went to college. It works in other countries - for example in the UK where young doctors skip undergrad and go straight to medical school, and whose patients get about the same outcomes as in the US. It works for people with impractical degrees like philosophy, who are constantly getting jobs in (and doing well in) fields that don’t require you to compare Locke vs. Leibniz’s perspective on a priori truths. So this would work if everyone agreed to do it at once, which they won’t. The way college gets you is adverse selection. Suppose that tomorrow, you - a smart and hard-working person who could easily get a college degree - decline to do so, because you appreciate Peter Thiel and Michael Gibson’s anti-institutional perspective. The pool of people without college degrees is now, to a first approximation: 200 million people who weren’t smart to get in, rich enough to afford it, or motivated enough to finish.
Inline links: Paper Belt On Fire, John Cowperthwaite, recently abandoned its attempt, reported that, might still get shot down because, https://substackcdn.com/image/fetch/$s_!XcvP!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa8b369ca-5089-4e18-857d-1f34a9eee200_585x134.png, 2019, journalists, decided, that, Billionaire’s Failed Education Experiment Proves There’s No Shortcut To Success, https://substackcdn.com/image/fetch/$s_!R2y6!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F38012394-be90-413c-b9a2-c291f1b3a118_858x392.png, his company, read this backwards
Notes From The Progress Studies Conference
October 24, 2024 · Original source
Progress (as measured by things like total factor productivity) was fast for much of the early 20th century, then slowed around 1970. Nobody knows why; theories include shifting social attitudes, over-regulation, or simply exhausting the potential in a few big inventions like electricity and mass production. This slowing was a great historical tragedy: if progress had continued at pre-1970 rates, we would be twice as rich today. We call the ensuing period the Great Stagnation. There was plenty of innovation in computers (“the world of bits”), but real physical goods (“the world of atoms”) stayed disappointingly similar. Our great-grandparents grew up in a world of horse-drawn carriages and lived to see the moon landing. We grew up in a world of cars and jumbo jets, and live in it still.
But Tyler Cowen has declared the Great Stagnation provisionally maybe starting to be over. This is a bold pronouncement; official statistics are as dull as ever, and Progress is a field where going off vibes leads you astray. Still, advances in AI, solar, space, and biotech seemed impressive enough that he thought it represented a phase change.
Inline links: provisionally maybe starting to be over
And this was the sort of conference you would expect in a world where the Great Stagnation was ending, with topics like:
Prison And Crime: Much More Than You Wanted To Know
November 27, 2024 · Original source
The benefit from increased urban density. Ben Southwood claims that this may outweigh all other costs and benefits in the equation. His argument goes: when cities are crime-ridden, people move to the suburbs. The suburbs are less dense than cities, driving up housing costs and decreasing the agglomeration effects crucial for technoeconomic progress. Therefore, crime is responsible for a significant portion of the housing crisis and of lost GDP from the Great Stagnation.
Inline links: Ben Southwood claims, agglomeration effects, is responsible for