Author: ontheoutside

We’re Betting Everything Against Climate Change

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The takeover of Venezuela has made us a colonial power. Trump is now the dictator of Venezuela for the indefinite future. It has also led to new rhetorical heights about spheres of influence and how we should be able to use our superpower status to take whatever we want from anyone. So seizing Greenland from a NATO member is our perogative by right.

We’re telling all nations of the Americas that their independence is only for as long as we like it. Outside the Americas we’re threatening NATO’s existence by seizing territory. More generally we’re legitimizing the use of military force by anyone with the power to do it. History shows where that goes.

And what we’re getting for all that is oil. Oil that for the most part is not going to become available without billions of dollars of investment and years of development. Even without climate change that’s a shaky prospect; with the reality of climate change it’s nuts.

Climate change denial is not just a matter of sabotaging the Paris agreement and killing research funding.; t’s fundamental to everything they do. The rest of the world is continuing without us. It has to, since there is no other choice. China may be a dictatorship, but it values competence. Europe has kept its act together despite US pressure. Others are already seeing climate impacts. We’re off in our very own never-never land farther and farther from reality.

We’re going nowhere. The only question is whose sphere of influence gets us.

Jobs per Dollar

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As an indication of where the economy is going, someone should calculate permanent jobs created per dollar of capital expenditure for all the new datacenter construction.  That’s probably a new low for expenditures of this magnitude.  It’s more complicated to predict the effect on jobs in the rest of the economy, but that’s most probably negative.

It’s hard for me to think this doesn’t say something about the world we’re going toward.  It’s not so much that there will be a shortage of jobs overall as of good jobs.  What is it that we are going to use to bargain with employers?  Traditional education is about knowledge and capability.  In our familiar world it takes years to put together the package that an employable person represents, and there are many distinct niches that need to be filled.  In the new world, knowledge is more readily accessible, the capabilities required are more generic, and staffing levels may be reduced by efficiencies.  We’re only beginning to see how that will shake out.

As we noted last time, the private sector is not good at managing effects of radical change—on people and on the environment.  On the other hand, we’re talking about really significant productivity improvements, so in principle that should be a good thing.  But that’s not going to happen by itself. It sure didn’t happen at the start of the industrial revolution—for most of humanity that meant misery and war.

In this anniversary of the American Revolution there is a relevant quote from the signing of the Declaration of Independence: “We must, indeed, all hang together, or, most assuredly, we shall all hang separately.”  That’s now true worldwide.  In this time of economic ferment, climate change, and nuclear weapons we had better learn to work together for global well-being or there may be nothing left at all.

The Bigger Story from Rare Earths

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The Rare Earth affair tells us a very important simple truth:  contrary to the endlessly-repeated Republican message, the unfettered private sector (AKA the “free market”) does NOT solve all problems.  The private sector by itself is not sensitive to national security concerns and isn’t terribly worried about single sourcing so long as the price is right. After all there has never been a problem.  Tough luck.

This isn’t some strange outlier issue—it’s the main story.  The business community serves its own interest and generally with a short-term focus.  No one gets promoted for wasting money on what isn’t going to happen, which includes low probability events and any significantly different futures.  The private sector is good at optimizing its own operation.  It’s not good at providing for the population, the environment, or even the conditions for its own long-term success.  There is no “free market” magic to make that happen.  If the government doesn’t do it, it won’t get done.  And that is terrible for the future of the country.  We’re going to get one Rare Earth problem after another (and not just for security reasons), because we’re making sure not to look out for them.

We should be very clear about what we have today.  Trump wants to run everything, but that doesn’t mean we have government doing its job.  On the contrary what we have is business capture of government, so government is making sure that what business wants and nothing else gets done.  That’s why we can’t have government-sponsored basic research or any consideration of consequences of climate change.  Instead we have a whole bunch of protectionist tariffs and business tax cuts—just what business always wants.  There’s a juicy story of golden futures for everyone, but that comes cheap.  There’s no serious logic behind it, just what businessmen always want to believe.  Trump wants to mess with the business environment, but he hasn’t taken his businessman’s hat off.  He just thinks he’s such a genius he can tell all those big shot execs how to run things. Even the H1B affair fits here—there’s no strategic issue, since those pointy-headed engineers are a dime a dozen.

You don’t have to be a PhD economist to understand this.  Adam Smith understood it in 1776. I won’t give the usual long quote.  We just need a shorter one: “The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatever.” — Book IV, Ch. VII

The Real Deal on Rare Earths

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The subject of “rare earths” is everywhere—now that Trump has discovered that not everyone he bullies backs down. (Like most bullies he clearly never thought of risks beforehand.)  But it is shocking how much of the discussion is both wrong and wrong-headed.

Let’s start with what’s wrong.  First of all, the set of rare earths includes 17 chemical elements that share some chemical properties, but whose significance is individual not collective.  Particular elements are important in particular ways.  Availability and processing requirements are not the same either.  So if Trump announces that we’re going to get rare earths from, say, Ukraine that may be relevant to an important issue or it may not be.  Similarly when someone announces with fanfare that we’re going to start processing rare earths somewhere outside of China, that may or may not have any importance at all—depending on what it is.

All that sounds like we need a lot of new information that would be hard to track down, but actually that’s not true.  There is an excellent, widely-available report from an unbiased source that goes right down the line on everything you would like to know.  And the answer is that there is nothing we are doing that is going to change China’s leverage any time soon (measured in years of course).  And that’s the news about rare earths. 

Wrong-headed is a different issue.  The important thing to realize is that the rare earth problem is NOT one-of-a-kind.  The rare earth problem is what happens when you don’t plan ahead for what the world is going to look like in the future.  There are two changes that made this problem happen:

  • The technology environment changed, so that suddenly these elements went from exotic to strategic.
  • The political environment changed to one of economic war with everyone, so that the US suddenly has to become economically independent of everyone whose arms it can’t twist. There is a strategic question with China, but we forced this issue by declaring war.

The impact of item one is only going to get worse.  Trump is preoccupied with the past (e.g. the 1950’s) not the future, so all kinds of necessary technologies won’t be here. He has done all he can to kill funding for future-oriented research at NIH and universities.  His climate denial has ceded leadership in all the (many) sustainable energy technologies to China.  His anti-trust policies favor existing large companies over new entrants.  He even told the troops on the aircraft carrier he visited that they should be happy it still used steam pressure to launch planes instead of the newer electronic system on the (single) new Chinese carrier.  We can count on being behind the eight-ball for the foreseeable future, and it’s going to be hard to reassemble the infrastructure to catch up.

On item two we have only begun to appreciate what it means to be at economic war with everyone.  We’re still in an environment where the US has many historical mutually-advantageous relationships with partners.  We benefit as participants in a common enterprise.  All such partners now find they are under attack.  Trump relies upon factors such as NATO membership and US market size to coerce other countries to do his bidding.  Neither form of coercion is permanent, as everyone can see that even Canada is under attack.  Resources and support come into question.  Whether we like it or not, allies are important.  And that’s not just a military matter.  It’s a basis of our economic strength and our standard of living.

Rare earths are no one-of-a-kind deal.  They’re a bellwether for our future.  

Things Aren’t Okay—We’ve Been Here Before

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It strikes me that comparisons of Trump with other would-be dictators are actually a distraction from a more important historical parallel.  Unless we can stop it, we seem hell-bent on replaying the 1930’s with even more at stake.

This isn’t just an economic story; it’s a story of response to worldwide crisis.  When the US stock market collapsed in 1929, it wasn’t inevitable that the entire world would move to disastrous depression and then war.  That it did so was a failure of national and global governance.  We humans did it to ourselves.

There’s a problem with human psychology.  When something bad happens, we pull in and defend what we’ve got.  In societies, that means in downturns those on top focus on defending themselves (e.g. with austerity) from what they see as the moral failings of the rest.  That’s why countercyclical policies are so hard to do—they’re the last thing ruling classes want to see. However austerity itself breeds more declines and a vicious cycle to the bottom.  In international relations the corresponding phenomenon is xenophobic retrenchment in a cycle of increasing grievance, paranoia, and hostility.  All that matters is to make sure you end up on top.

That’s pretty much what happened in the 1930’s. It drove the world to economic disaster and then World War II. (World War I contributed, but dire times in Germany elected Hitler.) The post-WWII institutions—whatever their shortcomings—were an attempt to prevent it all from happening again.  They gave us an unprecedented period of worldwide economic growth.  Even with the 2008 crash the US and China basically cooperated in keeping the world economy afloat.  But we’re a long way from that now—all we hear about is being on top.

We haven’t had 1929-style crash, but there are problems that can’t be papered-over. Even before the current AI explosion, technology change was making working populations obsolete far faster than governments could cope. In the West there is nostalgia for a simpler, somewhat-mythical past—a fertile ground for anyone willing to lie about recreating that past and to blame others (elites, immigrants, other countries) for lost status and security.  For the East and global south it is a time to get even with past oppressors.  It’s a hard time for global action when everyone is looking to get ahead in a hostile world. As many have noted, Trump’s high tariffs recall the Smoot-Hawley tariffs of 1930.  Those tarrifs should be recognized as a sign of danger above and beyond the immediate damage that they do.

In addition we’ve got something new.  Climate change is an existential threat to everyone, but a hard sell for real action.  It requires real money in the present to prevent locked-in damage in the future.  It’s all too easy to claim it’s all unnecessary or can be put off to some unspecified future—with immediate benefits as a sweetener.  The US may win prizes for foolhardiness (no real businessman would tell his investors that no risk contingencies are needed because of his personal genius and intuition), but there are few countries whose expenditures match the danger or even the Paris agreement objectives.  No one can be beyond the risks of climate change, but with Trump’s incessant hawking of US fossil fuels we’re sure are trying to believe we’re special—like the 1930’s rich people who couldn’t be bothered with the problems of the depraved poor.

Given that, what is the world working on today?

  • It’s certainly not working toward global governance and not effectively working on climate change.
  • It’s not working on political stability, since the UN is now extraneous to most of what is going on.
  • It’s not working on peace (despite Trump’s many claims), since the most basic rule of the post-war system—that countries shouldn’t invade each other—has pretty much fallen by the wayside.  It was never fully obeyed, clearly not even by us, but we’re now in new territory.  Russia is making no apologies in Ukraine, and the same is true for the US in Venezuela. If anything the new stated mantra is about spheres of influence where the strong have a right to do what they want to the weak.
  • However there is one thing that the world IS definitely working on:  a desperate competition for dominance in artificial intelligence, and that is serious enough for a discussion of its own.

Where is AI taking us?

  • Since AI has both military and economic consequences, this amounts to a full-scale arms race.
  • The money spent on data centers is phenomenal even compared with total investment in the participating countries.
  • As such, it drains resources that would otherwise be used to the benefit of the population, accelerating the disaffection noted earlier.
  • Its massive energy use accelerates the timetable for climate change (and takes money from climate-oriented activities). In this country of course wind and solar contributions are banned.
  • Most importantly its objective—Artificial General Intelligence, basically surpassing human capabilities for reasoning—is ill-defined, and the work to get there is hard to predict.
  • Because of the huge level of debt financing, it raises the specter of financial collapse if gains don’t match revenue expectations in predicted timeframes.
  • Even more dangerous, the military consequences are considered so important that the arms race threatens to become more and more serious, with competitive positions extremely difficult to assess—raising risks of instability and preemptive war.

The story is not exactly the same as the 1930’s, but the parallels are too clear to ignore.  We’re not addressing the festering problems, and we’ve created new opportunities for economic collapse and unimaginable war.  That isn’t okay.

We, the human race, can’t aford to fail as we did last time.

I’m not going to propose any simple answer, but there a few things worth saying.

  • I believe that climate can be a model for international cooperation, because it is a true common problem that can only be effectively solved if everyone benefits.  We have a lot to walk back, since Trump killed the original Paris Agreement unanimity, but we have to do it.  The US had a big role then, and needs to play a big role now.
  • The best way to address a full-blown arms race is to diminish the incentive to use them.  The world needs a workable notion of fair trade that will allow all countries to succeed.  We were a lot closer to that than self-interested propaganda would have people believe.  The test for success is shared prosperity, including labor standards and environmental protections.
  • The biggest barrier to that endeavor is how prosperity reaches national populations—obviously a problem today even in developed economies.  Ruling elites everywhere want a big share and have many means to get it.  What’s more AI will make the problem even more pressing, since future job losses can destabilize any progress. Maybe trade groups such as the EU can stand as models, where considerable national autonomy has been ceded in exchange for what has been a very large gain for all. That may sound strange but in fact the US only got going when the states gave up part of their independence for the Constitution, and the EU has managed to unite age-old enemies for something better than war.

Obviously none of this is going to happen tomorrow.  But unless we do something, we can see all too well how this story can end.

Towards a Constitution

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To continue the subject of the Constitution, it seems that the problems we face are more fundamental than we would like to think.

I want to begin by going back to the post-World War II America of my childhood.  At that time we were proud of our Constitution precisely because of the way in which it was able to adapt to new eras that could not have been imagined when it was written.  We were privileged to have a Constitution that was most fundamentally a statement of principles that could guide us on into the future—whatever that might be.

We now see that whole story was a myth.  The only way that the Constitution could play such a role was that in those days the country was largely unified in outlook.  Putting aside the anti-communist hysteria, the country was in a humanistic mood coming out of both the Depression and World War II, and we looked at the Constitution in that way. Also the history of the Constitution fit that mold—written by people who created a democracy by defeating a tyrant.  So the meaning of the Constitution was our shared idea of what the humanistic founding fathers would say about the problems of today.

We now understand that there is no solid legality behind any of that.  Nothing in the Constitution guarantees that interpretation, and the document can be interpreted in wildly different ways—both honestly and dishonestly—by different readers. (That’s not just a matter of “strict interpretation,” which in practice means getting rid of what you don’t like, with no constraint on what you do!)  From a practical point of view it’s hard to say how much of the Constitution exists at all—its meaning is entirely determined by the Supreme Court, and they don’t even have to say how they reach their conclusions. If a President can break the law in the exercise of his office do we still have rule of law?  Do we really have a Constitution?  What exactly do we need to do to get one that works?

As it turns out, two recent books help drive those problems home.  Steven Pinker’s latest “When Everyone Knows What Everyone Knows” talks about the whole notion of common knowledge—what gave us the Constitution of my childhood—as a kind of distributed process independent of its norms.  That’s no way for today’s internet-fragmented society to produce a basis for law.  The second was Jill Lepore’: ‘s “We the People: A History of the U.S. Constitution”.  In passing she notes that the Reconstruction civil rights amendments—numbers 13, 14, and 15—were interpreted out of existence by the Supreme Court for fully fifty years after passage!  It seems words on paper have never been enough.

So the Constitution is a large, serious problem area.  Somehow we have to fix the Supreme Court, determine what level of specificity we need for an enforceable Constitution, and deal with at least some of the other problem areas from our previous note.  That leads to a rather different relationship to the Constitution than we have today.  Instead of trumpeting our Constitution as a world-unique miracle, we’re going to need to turn pragmatic, to understand what the experience has been with constitutions worldwide. And somehow or other we’ll need to find a process to fix it without losing what we’ve got.

There is a lot that is good about the Constitution. In today’s world we’re more conscious of that than ever. But despite our past dreams it can’t defend or update itself.  That, today, is a problem for everyone.

Our Colony on the Mediterranean

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There’s something simple behind Trump’s 20-point plan for Gaza—we now have a colony on the Mediterranean. It is a state containing Palestinians without being a Palestinian state. Since we’re in charge it’s ours, even if we counting on others to pay for it or somehow keep the peace.

It’s not the first colony we’ve had recently.  There was also Afghanistan and to a lesser extent Iraq.  Colonies can seem rational—even benevolent—at the start, but it doesn’t tend to work out that way.  So we have to hope this one works better.

But that’s getting too far ahead.  What is there to say about the plan?  First, there is no denying that it is a lot better than continuing the war.  This has always been a particularly terrible affair, because in this horrible mess both sides wanted to kill as many Palestinians as possible.  For Netanyahu, the prime objective has been to kill enough of the enemy so that the Israeli population would forget that he was responsible for the success of the October 7 attacks.  For Hamas, the main point was to prevent any kind of Israeli-arab cooperation and to provoke an Israeli counterattack that would demonstrate the evils of Israel to the wider world.  Before his death Sinwar gloated to his boss in Qatar about the number of Palestinian dead he had achieved for the cause. What world this is!

With the peace comes the colonial bureaucracy.  The Palestinians aren’t running anything, because the Israelis don’t trust them to even the slightest degree.  In Netanyahu’s UN speech the Palestinians were described in every instance as unrepentant, vicious terrorists.  The plan has a lot of talk about how Gaza will be purged of Hamas, and there will be a whole new body to keep the peace—once it is ready.  Until then (whenever that is) the Israeli army will need to do that job.  There is a longer-term objective of maybe someday a Palestinian state once Palestinians can somehow be trusted to live in peace with Israelis.  Netanyahu has been explicit about when that is—never.

In the interim it’s not clear what is going to happen, except hopefully relief for Palestinians (an expensive proposition) and the encouragement of business investment.  There is no guarantee how much business investment will be aimed at the well-being of Palestinians.  Anything done for the Palestinians will come under US control and with arab or even Israeli investment.  On the face of it, this sounds like a bunch of fancy hotels and a massive complex of cheap apartment buildings to serve them.  I’m also a little worried about who else might be coming as immigrants, but which may or may not be an issue.  It’s hard to guess how peaceful this is going to be.  The horrors of the past two years are such that one can’t imagine there won’t be resentment.  The ideas of Hamas will be harder to exorcize than the known Hamas fighters. And we can’t know what will happen with the released arab prisoners.

So it’s great that the war is going to end.  At least to start with this particular plan seems dictated by the needs of Israeli security combined with Trump’s fervor for real estate development. However, the first step will be meeting the immediate needs of the Palestinians for a peaceful, livable future.  That is already such a challenge that the rest is up for grabs.

Problems with the Constitution

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There has always been plenty of talk about what is right and wrong with the Constitution of the United States. However much of that was on the back burner until recently. Now it is different. First we saw government collapsed into non-functional partisan chaos, and then Trump demonstrated that what we thought was a government of laws was actually a government of unenforceable traditions.

So what follows is a list of issues. I won’t say it is complete or well-organized, but the problems are all serious.

  • Open to dictatorial takeover

The Supreme Court was a terrible mistake.  There are no limits to its power, and it doesn’t even have to justify its decisions.  The Justices are chosen undemocratically and serve for life.  We’ve now seen they can even declare a President above the law, so that the entire Constitution is out the window.  It is a dictatorship waiting to happen.

  • Open to corruption (only works because of tradition, not law)

The entire electoral apparatus belongs to the states, where it is operated by partisan officials.  It is common practice to make voting difficult in opposition districts, but that is just the beginning. The whole voting apparatus is controlled by people who gain from controlling results.  It works if people are committed to democracy, but not otherwise.  Other democratic countries have established separate, nominally non-partisan organizations to administer voting.

  • Unrepresentative

The Senate is phenomenally unrepresentative.  Two senators per state means residents of small states have astonishingly outsize power.  At the very least, very large states such as California need additional Senators.  The problems of the Senate also affect the Electoral College, so that not only legislation but also Presidential elections are affected.

Then there is the whole question of gerrymandering. Computers have made this both easy and effective. The US Congress is currently so gerrymandered that very few districts have real elections. That severely limits democracy.

  • Doesn’t work for states

These is an urgent need for clarify the division of responsibility between the states and the federal government.  As an example, the federal government has traditionally backed up the states for emergencies of all kinds.  That is necessary because it has greater resources as well as the ability to run deficits if necessary (which many states can’t).  With both Covid and the operation of FEMA Trump decided he was either opposed or lukewarm about it, and that was that.  The Constitution has to be explicit about responsibilities.

  • Doesn’t work for the federal government

The federal government simply doesn’t work as intended.  We’ve reached an era of non-cooperation between parties, so government only works when a single party controls everything.  Between the “Hastert rule” in the House and the filibuster in the Senate, it’s easy to block everything otherwise.  That means the so-called separation of powers in government is largely non-functional  Furthermore the primary system for the nomination of candidates basically disenfranchises the political center, so that parties are by definition extreme.  That means government is either functionally blocked or unrepresentatively extreme.

  • There is no protection for governmental expertise

A functioning national government needs expertise upon which to base its conclusions.  For that reason Congress created a number of bodies intentionally buffered from Presidential politics.  More recently the Supreme Court has decided that any body working in the executive acts at the discretion of the President.  It is now impossible for anyone with necessary expertise to make a career in the federal government.

  • Unclear dividing lines between branches of government

The Trump administration is legislating by executive order, and the Supreme Court has decided that is okay.

  • The unspecified role of parties can undercut everything else

Everything about our two-party system is outside the Constitution.  So that, as mentioned earlier, we have a primary system that disenfranchises the political center, and there is nothing in the Constitution that has any bearing on it.  The Constitution needs at the least to say how elections work.  Anything not specified is vulnerable to corruption and takeover. Non-partisan primaries with rank choice voting is a possible step in that direction.