Showing posts with label globalization. Show all posts
Showing posts with label globalization. Show all posts

Monday, January 6, 2020

The 2020s are here



Elderly Shanghai woman practicing tai-chi (Wikipedia – Tom Thai)



Two years ago I wrote about "The Crisis of the 2020s." I argued that this decade would see a worsening confrontation between two world views:

On the one hand, the globalist consensus will continue to radicalize in the core countries of the Western world. On the other hand, a very different consensus will dominate most of central and eastern Europe, with inroads being made into France and Germany. These opposing consensuses will diverge more and more, if only because mutual antagonism will make dialogue impossible. (Frost 2017a)

This confrontation is taking place at a time when the "consensus" no longer seems to be delivering the goods. Economic growth is sluggish not only throughout the West but also in the supposed beneficiaries of globalization—China, in particular. For some, this slowdown means that the current system has failed. For others, it means that the failings of globalization can be resolved only through more globalization.

The Crisis of the 2020s is thus primarily ideological. People are split into opposing camps, and it is far from clear which one will win. While the globalist consensus is losing ground in eastern, central, and southern Europe, it still dominates the western core of the UK, France, and Germany ... as well as North America. The West has lost its manufacturing base but is still culturally dominant. That dominance, not so much in ideas as in the packaging of ideas, is critical to promoting a model of society where people are interchangeable units in a global marketplace.

The ideological crisis will nonetheless be made worse by real-world problems:


China: a shrinking work force

China’s exports will become more expensive as its work force shrinks and grows old. This shrinkage will be worse than expected because the Chinese authorities have been overestimating the country’s fertility rate for almost two decades. The current rate is not 1.6 children per women. In fact, it had already fallen to 1.4 by 2003 and is now probably one child per woman. And this is happening even though the one-child policy is no longer in effect. The fertility rate is even lower among Han Chinese and lower still in the industrialized northeast—where it is down to 0.75 (Frost 2019a; Wang 2018). 

There are already fewer Chinese workers with each passing year, and this decrease will accelerate as the smaller cohorts of the noughts and teens enter the job market. Inevitably, the price of labor will rise. This will be good for China, which needs to reorient away from exports and toward its domestic economy. Western countries, however, will have to be weaned off their dependence on cheap Chinese goods.

Can the same goods be produced elsewhere? Unlikely. None of the alternatives sources of cheap labor have the same worker quality or, just as importantly, worker quantity. In hindsight, China was a lucky find for globalization—a country where the average worker was not only inexpensive but also intelligent and disciplined.

Western consumers are already cash-strapped, with most of them living from pay check to pay check. Where will they get the money to pay for a steep increase in the price of consumer goods?


The global food crisis

The Arab Spring was triggered by a surge in food prices. That surge was no fluke. We are reaching the end of a long increase in food production, a “green revolution” made possible by large-scale monoculture, intensive plowing, and heavy use of chemical fertilizers. That increase has come at a price, particularly degradation of soil fertility. Further increases will be modest and will require a more sustainable model of agriculture, as well as more investment in automation and robotization. Unfortunately, such changes, especially the latter, are impeded by the current heavy reliance on cheap migrant labor.

Agribusiness, particularly in the U.S., has become a conservative force that will stubbornly resist change. Like the culture industry, it will push for more of the same.


The decline of high-trust societies

The evolution of social complexity is far from easy. One of the main challenges has been the creation of large societies in which economic transactions take place mostly between unrelated individuals. Such societies are impossible in most of the world because of the high level of mistrust between unrelated individuals. Each transaction has to be checked and double-checked for lying, cheating, and outright theft. Many transactions never take place because they just aren't cost-effective.

This obstacle has been overcome in northwest Europe and East Asia. In both areas, the solution is behavioral and psychological. Northwest Europeans are more individualistic, less loyal to kin, and more trusting of strangers. Because they attach less importance to kinship, they have been able to build large, functioning societies on the basis of “impersonal prosociality,” i.e., willingness to obey universal social rules, affective empathy toward nonkin, and feelings of guilt for unwitnessed rule breaking (Frost 2017b; Frost 2019b; Schulz et al. 2019). East Asians are less individualistic but just as willing to obey universal rules, which are enforced more by shame than by guilt. Empathy is also at a high level, but less differentiated between affective and cognitive empathy:

The main difference is in the relationship between self and society. Whereas a greater sense of self has helped Northwest Europeans to transcend the limitations of kinship and, thus, build larger societies, East Asians have relied on a lesser sense of self to create a web of interdependence that extends beyond close kin. (Frost 2015)

Northwest Europeans and East Asians are now in steep demographic decline. Inevitably, less wealth will be created. I say "inevitably" because those two groups produce most of the world’s wealth. When they go, most of the wealth will go too. This is not a problem we can resolve by passing laws or changing the school curriculum. To some extent, we could force people to adopt the behaviors of a high-trust society, but that would take time and will. And we don't have much of either.


A name with a nice ring to it

When I wrote that post two years ago I settled on the name "Crisis of the 2020s." It had a nice ring to it. While doing research for this post, I googled the same name ... and got over 56,000 hits. The oldest hit seems to be a 2011 article: "Global Aging and the Crisis of the 2020s." I hadn't read it previously, but it points to the same underlying problem:

The working-age population has already begun to contract in several large developed countries, including Germany and Japan. By 2030, it will be stagnant or contracting in nearly all developed countries, the only major exception being the United States. In a growing number of nations, total population will begin a gathering decline as well. Unless immigration or birthrates surge, Japan and some European nations are on track to lose nearly one-half of their total current populations by the end of the century. (Howe and Jackson 2011)

That article differs from mine in its implied advocacy of immigration as a solution. To be sure, it does mention "the lawlessness of immigrant youths in large cities [of Western Europe]," but it remains upbeat about the United States "because of its higher fertility rate and because of substantial net immigration, which America assimilates better than most other developed countries" (Howe and Jackson 2011). That optimism was already exaggerated in 2011. Today, mass immigration is just as much a process of cultural and demographic replacement in the U.S. as it is in Western Europe.

Let's be frank. The high productivity of North America, Western Europe, and East Asia has profound behavioral and psychological causes. It is not due to political ideals, universal education, or a particular legal system. It is due to a higher level of social trust, as well as a higher level of cognitive ability and a lower level of personal violence. When immigrants enter that kind of environment, their productivity dramatically rises. They are now working in a society where laws are observed, where information is reliable, and where disputes are not normally settled through violence. We all benefit from that kind of society—simply by virtue of living in it.

That’s the "unearned privilege" that antiracists and right-wing economists love to denounce. Their argument is deceptively simple: “By what right do we deny this privilege to others?  It’s a mere accident of birth! Just think, they’re less productive because we’re keeping them out. So let them in! We’ll all be better off!”

Well, no. Do I have to explain why? 


References

Frost, P. (2015). Two Paths. The Unz Review, January 24
https://www.unz.com/pfrost/two-paths/

Frost, P. (2017a). The Crisis of the 2020s. Evo and Proud, December 19.
http://evoandproud.blogspot.com/2017/12/the-crisis-of-2020s.html

Frost, P. (2017b). The Hajnal line and gene-culture coevolution in northwest Europe. Advances in Anthropology 7: 154-174.
https://file.scirp.org/pdf/AA_2017082915090955.pdf 

Frost, P. (2019a). Autumn in China. Evo and Proud, March 26
http://evoandproud.blogspot.com/2019/03/autumn-in-china.html 

Frost, P. (2019b). Was Western Christianity a cause or an effect? Comment on: J.F. Schulz, D. Bahrami-Rad, J.P. Beauchamp, and J. Henrich. The Church, intensive kinship, and global psychological variation. Science 366 (6466)
https://science.sciencemag.org/content/366/6466/eaau5141/tab-e-letters  

Howe, N., and R. Jackson. (2011). Global aging and the Crisis of the 2020s. Current History, January, pp. 20-25
https://pdfs.semanticscholar.org/9879/fe3ea41e85f5fdfb6bc1ffcc2ae5c44a1a2a.pdf 

Schulz, J.F., D. Bahrami-Rad, J.P. Beauchamp, and J. Henrich. (2019). The Church, intensive kinship, and global psychological variation. Science 366(707): 1-12. 
https://web.ics.purdue.edu/~drkelly/SchulzHenrichetalTheChurchIntensiveKinshipGlobaPsychologicalVariation2019.pdf

Wang, M. (2018). For Whom the Bell Tolls: A Retrospective and Predictive Study of Fertility Rates in China (November 8, 2018). Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3234861  

Monday, January 7, 2019

Demise of the West



Rachel Silverthorne's Ride (1938), mural by John W. Beauchamp at Muncy Post Office. Government-funded art used to promote love of family, community, and nation.



In my last post I discussed the uncoupling of gene-culture coevolution in the Western world. We are no longer co-evolving genetically with an environment where kinship matters less and less and where the market economy has become the main way we process social and economic transactions. Meanwhile, this cultural environment has continued to evolve on its own ... and at an ever-faster rate.

A lot of cultural change has happened since that uncoupling in the late nineteenth century. The extended family is gone—few young people have significant relationships with their cousins or grandparents … if only because most of the latter are already dead because of longer generation times. As for the nation-state, kinship no longer plays even a symbolic role—your "nation" is where you currently reside. Only the nuclear family remains as a kin group, and that last holdout is crumbling. A growing proportion of the population lives alone, and the families that do exist are increasingly "blended" or single-parent.

This liquidation of kinship is driven by the expansion of the market economy and its accompanying ideology of liberalism. This ideology allows some differences of opinion: Right-liberals wish to let kinship self-liquidate and wither away on its own, whereas Left-liberals want to use the State to accelerate the process. Both agree, however, on the end game. Once kinship has been reduced to a vestigial role, individual freedom will be maximized, and we will be able to do the most with what we have in a global marketplace.

So why worry? There may be bumps and potholes on the road to a better world, but we'll all be better off in the end. So let's stay the course and ignore the purveyors of doom and gloom. Such is the thinking that prevails among our elites.

I see fewer grounds for optimism:


Psychological mismatch

We are creating conditions of extreme social atomization that have never existed before and for which we are psychologically ill prepared. It's true that northwest Europeans have a long history of individualism, and this is largely why our ancestors were able to create free societies where the market economy replaces kinship networks as the main way for people to relate to each other. Nonetheless, we’ve freed ourselves from ties of kith and kin to a degree that would surprise even our recent ancestors, with no accompanying changes to our psychological makeup.

Some consequences are already visible: after decades of uninterrupted increase among white Americans, life expectancy is falling because of suicide and opioid abuse among the growing numbers of men who live alone. Those people are like canaries in a coal mine.

To make matters worse, we are exporting this societal model to the rest of the world. The psychological consequences will be much worse there, as can be seen with immigrants to the West. Typically, the first generation has low levels of dysfunction; the problems arise mostly in the second and third generations. 

You may ask: how can that be when the latter are more acculturated? To ask the question is to answer it. Non-Western societies keep people in line through multiple social, cultural, and ideological restraints. Migration to the West dissolves those restraints in an acid bath of personal freedom. The first generation will be OK, but the succeeding generations will have a serious mismatch between their genotype and our phenotype of extreme individualism. Some of them will become a caricature of Western dysfunction. Others will try to recreate the restrictive environment of their ancestors.


Decline of the bourgeois mindset

The market economy requires a certain psychological makeup. It will not, for instance, self-generate in a low-trust society where people are fixated on the present and prefer to settle personal disputes through violence. In that context, the market mechanism will be confined in space and time to marketplaces. It will not spread throughout society to encompass most of the transactions that people carry on with each other (Frost 2018).

This was the case for most of history and prehistory. It's not that people didn't understand markets. They did. It's just that they preferred to get most of what they wanted on their own or through people they could trust in their kinship network. Conditions were not in place for the market mechanism to break out of this straitjacket and create a true market economy.

It's no coincidence that this breakout happened in northwest Europe, where kinship networks were already relatively weak, where most adults remained single into their mid to late twenties, and where many never married. Once the market economy took off, people exploited its possibilities by pushing their envelope of phenotypic plasticity—by living, thinking, and behaving in new ways. Then, through selection over succeeding generations, the mean genotype followed this evolving phenotype, thus allowing people to keep pushing the envelope farther and farther. 

In sum, this market-driven environment favored the survival and reproduction of people with a certain psychological makeup. Such people were more future-oriented, less willing to settle personal disputes with violence, and better able to process numerical and textual data. In other words, this was the bourgeois mindset of thrift, self-control, foresight, numeracy, and literacy (Clark 2007; Clark 2009; Frost 2011; Frost 2017; Frost and Harpending 2015; hbd*chick 2014; Rindermann 2018, pp. 86-87).


Cultural decline

This mindset has helped the market economy to work better, but there is no reason to think that the latter will return the favor. This was pointed out by Daniel Bell in his work The Cultural Contradictions of Capitalism (1976). In it, he argued that the market economy encourages consumerism and desires for immediate fulfilment, thus eroding the values of thrift and delayed gratification that originally made it possible. Furthermore, since personal desires cannot be satisfied without effort, and since people vary in their ability to make the necessary effort, there will be growing pressure on the State to step in and satisfy those desires for everyone. The culture itself will become narcissistic.

These negative effects were being noticed by the late nineteenth century, notably in Catholic encyclicals. In Rerum novarum (1891), the church stated that employers must see the worker "as a person ennobled by Christian character" and ensure that he "be not exposed to corrupting influences and dangerous occasions; and that he be not led away to neglect his home and family, or to squander his earnings."

In the United States, the Progressive Era of the 1890s to the 1920s reflected this same mistrust of the free market and individualism. Many movements for community or national improvement began in that era, particularly those for temperance, social hygiene, immigration control, nature conservation, urban beautification, and so on.


Genetic decline

Alongside this cultural decline, the bourgeois mindset also seems to have suffered genetic decline. There is growing evidence that people in Western countries are losing the gene-based improvements their ancestors had gained in cognitive capacity and other mental traits. 

The strongest evidence for this regressive evolution is seen in an Icelandic study that shows a steady decline since the early twentieth century in alleles associated with high educational attainment (Kong et al. 2017). Only a fraction of such alleles have been identified to date, but it is disturbing that the ones we have identified are being replaced by alleles associated with low educational attainment. There is also evidence that mean reaction time has increased since the Victorian era (Madison 2014; Madison et al. 2016; Woodley et al. 2013). Finally, the Flynn effect is leveling off and even reversing in some Western countries (Rindermann 2018, p. 88). The Flynn effect is itself illusory, being due mostly to increasing familiarity with test taking. With peak familiarity the genetic decline is now becoming visible.

At first, this decline was driven by a reversal of class differences in natural increase. Previously, the lower classes had failed to reproduce themselves and had steadily absorbed downwardly mobile members of the middle class, which at that time was much more reproductively successful (Clark 2007). In the late nineteenth century this situation reversed. The middle class had fewer children because they wished to pursue higher education and pay for the trappings of an affluent lifestyle. Meanwhile, working people were better able to settle down, marry, and have children. This was largely because industrialists began to recognize they had a vested interest in creating stable communities for their workers. Two English companies, Cadbury's and Lever Brothers, showed the way by providing their employees with housing, medical care, and recreational activities. Other companies followed suit, and this industrial paternalism became a model for the welfare state (Wikipedia 2019a)

These class differences in natural increase would eventually narrow, particularly after the Second World War. All classes participated in the postwar economic boom and baby boom, with fertility rising among middle-class couples. This leveling of class differences was further aided by greater access to contraception for people of all backgrounds.

Since the 1970s the IQ decline seems to be driven much more by decomposition of the nuclear family: proportionately more births are to single mothers who tend to have children by sexy men who are less intelligent and more prone to violence (see previous post).


The Indian summer of the mid-twentieth century

This cultural and genetic decline leveled off during the mid-twentieth century. On both the right and the left, people had become convinced that the market economy was fouling its nest through impulse buying, needless consumer debt, and erosion of community values. In response, a new societal model came into being.

That model took shape during the last great depression and lasted until the 1960s. Called the "New Deal" in the U.S., it was characterized by low immigration, particularly of unskilled, low-wage labor, by high unionization, by corporate paternalism (employee benefits, recreational activities for workers, etc.), and by the welfare state (pensions, health care, unemployment insurance). It was also characterized by propaganda to promote the family, the community, and the nation. Although this societal model is now branded as "fascist" it was present to some degree in all advanced societies, including America under Roosevelt and the Soviet Union under Stalin.

Indeed, Roosevelt's America was a lot less liberal than we like to think. The Hays Code, introduced in 1930 and strengthened in 1934, imposed strict moral guidelines on movie making. Meanwhile, Frances Perkins, U.S. Secretary of Labor in the Roosevelt administration, brought in policies to encourage marriage, larger families, and population growth:

Maternalists would use the New Deal to reward the domestic woman and discourage the working mother. They expanded and nationalized existing state programs that protected mothers and created "new ones to deliver social benefits to the wives and widows of wage-earning men." They "prescribed domesticity to unemployed women in vocational programs that trained [them] for housekeeping and parenting," and they urged "counseling services for mothers tempted to work outside the home." Linking truancy, incorrigibility, and emotional disorders among children to a "mother's absence at her job," the Maternalists mounted campaigns to bring working mothers home. (Carlson 2002)

Under the New Deal, support was also given to artwork that promoted love of family, community, and nation. This was particularly so with "regionalist” artists like Thomas Hart Benton, Thomas Craven, and many others (Baigell 1974).


End of the New Deal and beginnings of globalization

The baby boom ended in the 1960s and the economic boom a decade later. To some degree both were victims of their success. As incomes doubled, and as unemployment remained low, people could more easily do as they liked. Many postponed marriage, either to pursue postsecondary education or simply to enjoy the pleasures of the new affluence. Sexual experimentation became widespread. Again, this was made easier by the success of postwar society, particularly in reducing STDs to a low level and in creating a safety net that could cope with broken homes and parentless children. Negative effects were less serious back then than they would be later.

Meanwhile, the West opened up to globalization. This began in the late 1960s with outsourcing of textile production and some manufacturing to low-wage economies, initially the eastern fringe of Asia (Hong Kong, Taiwan, and South Korea) and later, in the 1980s, the People's Republic of China, Mexico, and Bangladesh. Outsourcing soon spread through most of  manufacturing and even high-tech.

This period also saw a steady rise in the number of immigrants, principally from low-wage countries. The U.S alone went from taking in just under 300,000 a year in 1965 to over a million a year by 1990. Illegal immigrants also arrived in growing numbers, their estimated population in the U.S. now ranging from a low of 11 million to a high of 29 million (Fazel-Zarandi et al. 2018). Immigration to the United Kingdom has similarly surged from around 200,000 a year in the 1970s and 1980s to around 600,000 in the 2000s (Wikipedia 2019b). Most Western countries have followed suit, including many that had previously not received immigrants on a large scale.

Jobs have thus been outsourced to countries where labor is cheaper. Conversely, cheap labor has been insourced for jobs that, by their very nature, cannot be sent abroad, i.e., in construction, agriculture, and services. This two-way movement benefits business at the expense of workers. It is one of the reasons, if not the main reason, why more and more wealth is accruing to the top 1% (Roser and Ortiz-Ospina 2016). It is also the reason why workers in the West are getting poorer: median wages have stagnated since the 1970s and have probably fallen if we adjust for the decline in employee benefits and the decline in unpaid childcare by mothers and grandparents (Mishel et al. 2015; Semuels 2013).

The old working class also has to bear the cost of longer commutes as it gets pushed farther and farther into the exurbs by the rising cost of housing and by the new class of low-wage immigrants. The latter now dominate the suburbs and provide the gentry of the inner city with cheap services (daycare, food services, laundry and dry cleaning, landscaping, etc.).  A new social geography is being created, with high-income people in the inner city, immigrants in the suburbs, and the old working class relegated to the exurbs.

This pattern is key to understanding the gilets jaunes in France. Why are they so upset over a fuel tax? A big reason is the long commutes that French working people now have to make.

[...] employment and wealth have become more and more concentrated in the big cities. The deindustrialised regions, rural areas, small and medium-size towns are less and less dynamic. But it is in these places — in "peripheral France" (one could also talk of peripheral America or peripheral Britain) — that many working-class people live. Thus, for the first time, "workers" no longer live in areas where employment is created, giving rise to a social and cultural shock.

[...] This confinement is not only geographical but also intellectual. The globalised metropolises are the new citadels of the 21st century — rich and unequal, where even the former lower-middle class no longer has a place. Instead, large global cities work on a dual dynamic: gentrification and immigration. This is the paradox: the open society results in a world increasingly closed to the majority of working people.

The economic divide between peripheral France and the metropolises illustrates the separation of an elite and its popular hinterland. Western elites have gradually forgotten a people they no longer see. (Guilluy 2018; also see Caldwell 2017)

Why not build housing for them near the big cities? Well, such housing was built. It's now inhabited overwhelmingly by immigrants who provide the inner-city gentry with cheap services:

After the mid-twentieth century, the French state built a vast stock—about 5 million units—of public housing, which now accounts for a sixth of the country's households. Much of it is hideous-looking, but it's all more or less affordable. Its purpose has changed, however. It is now used primarily for billeting not native French workers, as once was the case, but immigrants and their descendants, millions of whom arrived from North Africa starting in the 1960s, with yet another wave of newcomers from sub-Saharan Africa and the Middle East arriving today.

[...] As a new bourgeoisie has taken over the private housing stock, poor foreigners have taken over the public—which thus serves the metropolitan rich as a kind of taxpayer-subsidized servants' quarters. Public-housing inhabitants are almost never ethnically French; the prevailing culture there nowadays is often heavily, intimidatingly Muslim. (Caldwell 2017)


Conclusion

We need to stop viewing the market economy as a self-correcting mechanism that works best if left alone. That view is best reserved for things that have proven themselves over the long term. That is not the case here. For most of history and prehistory we had markets but not a true market economy. It has only been over the past thousand years that this economic system gradually came into being among northwest Europeans and in the societies they founded. Its current globalized form is less than a half-century old.

Ironically, free market proponents often look back with nostalgia to the United States of the 1950s—a time of high tariffs, low immigration, high corporate taxation, and high unionization, not to mention the Hays Code and countless other restrictions on entertainment. The current system is actually much closer to the free market ideal.

Is this system sustainable? It is … for some people. As is often the case, the system is most sustainable for those who benefit the most and who have the power to prevent change. For them, life is great and couldn’t be better, at least for now. 

The system is less sustainable for the remnants of the old working class. For them, the outlook is especially bleak. They are caught between the anvil of stagnant wages and the hammer of rising costs—in part to support the growing population of net tax consumers and in part to insulate themselves from the latter … and an increasingly dysfunctional social environment.

In the end, however, the current system is not sustainable. The problem isn’t just that globalization will level the wages of Western working people down to the global average. In that scenario, the system could be sustainable. Indeed, the new gentry would have the best of both: a nice first-world lifestyle and cheap third-world labor. The world, as a whole, would be wealthier, even though people in the West would, on average, be poorer. And the top 1% would probably be richer than they are today.

That scenario ignores one thing, however. The market economy, and its power to create so much wealth, came into being because of certain cultural, psychological and, yes, genetic characteristics. Those characteristics are not distributed uniformly around the world. In fact, for a long time they didn’t even exist. They gradually evolved and came together in certain human groups, particularly in northwest Europeans.

Yes, there were similar evolutionary processes in other human groups, notably East Asians, Ashkenazi Jews, Parsees, and so on. But those groups, too, will form a diminishing proportion of the world’s population. The cultural, psychological, and genetic basis for the market economy will therefore regress as time goes on.

The most likely scenario is that the market economy will likewise regress. We will return to a low-trust world of spatially localized markets with no market economy, at least not one that will self-generate without coercion. We will all be poorer.


References

Baigell, M. (1974). The American Scene. American painting of the 1930s. New York: Praeger.

Bell, D. (1976). The Cultural Contradictions of Capitalism. New York: Basic Books.

Caldwell, C. (2017). The French, coming apart. The Social Order. Spring
https://www.city-journal.org/html/french-coming-apart-15125.html

Carlson, A.C. (2002). Sanctifying the traditional family: The New Deal and national solidarity, The Family in America 16(5).
http://profam.org/pub/fia/fia_1605.htm

Clark, G. (2007). A Farewell to Alms. A Brief Economic History of the World. Princeton University Press: Princeton and Oxford.  

Clark, G. (2009). The domestication of man: The social implications of Darwin. ArtefaCTos 2: 64-80.
https://www.researchgate.net/publication/277275046_The_Domestication_of_Man_The_Social_Implications_of_Darwin

Fazel-Zarandi M.M., Feinstein, J.S., Kaplan, E.H. (2018). The number of undocumented immigrants in the United States: Estimates based on demographic modeling with data from 1990 to 2016. PLoS ONE 13(9): e0201193.
https://doi.org/10.1371/journal.pone.0201193

Frost, P. (2011). Human nature or human natures? Futures 43: 740-748.
https://www.researchgate.net/profile/Peter_Frost2/publication/251725125_Human_nature_or_human_natures/links/004635223eaf8196f0000000.pdf

Frost, P. (2017). The Hajnal line and gene-culture coevolution in northwest Europe. Advances in Anthropology 7: 154-174.
http://file.scirp.org/pdf/AA_2017082915090955.pdf

Frost, P. (2018). Evolution of the market economy. Evo and Proud, June 4.
http://evoandproud.blogspot.com/2018/06/evolution-of-market-economy.html

Frost, P. and H. Harpending. (2015). Western Europe, state formation, and genetic pacification. Evolutionary Psychology 13: 230-243.
http://evp.sagepub.com/content/13/1/147470491501300114.abstract

Guilluy, C. (2018). France is deeply fractured. Gilets jaunes are just a symptom. The Guardian, December 2
https://www.theguardian.com/commentisfree/2018/dec/02/france-is-deeply-fractured-gilets-jeunes-just-a-symptom

Hbd*chick (2014). Big summary post on the Hajnal Line. October 3
https://hbdchick.wordpress.com/2014/03/10/big-summary-post-on-the-hajnal-line/

Kong, A., M.L. Frigge, G. Thorleifsson, H. Stefansson, A.I. Young, F. Zink, G.A. Jonsdottir, A. Okbay, P. Sulem, G. Masson, D.F. Gudbjartsson, A. Helgason, G. Bjornsdottir, U. Thorsteinsdottir, and K. Stefansson. (2017). Selection against variants in the genome associated with educational attainment. Proceedings of the National Academy of Sciences 114(5): E727-E732.
http://www.pnas.org/content/early/2017/01/10/1612113114.full

Madison, G. (2014). Increasing simple reaction times demonstrate decreasing genetic intelligence in Scotland and Sweden, London Conference on Intelligence, Psychological Comments, April 25
#LCI14 Conference proceedings
http://www.unz.com/jthompson/lci14-questions-on-intelligence/  

Madison, G., M.A. Woodley of Menie, and J. Sänger. (2016). Secular Slowing of Auditory Simple Reaction Time in Sweden (1959-1985). Frontiers in Human Neuroscience, August 18
https://www.frontiersin.org/articles/10.3389/fnhum.2016.00407/full

Mishel, L., E. Gould, and J. Bivens. (2015). Wage stagnation in nine charts. Economic Policy Institute

Rindermann, H. (2018). Cognitive Capitalism. Human Capital and the Wellbeing of Nations. Cambridge University Press.

Roser, M. and E. Ortiz-Ospina. (2016). Income inequality. Our world in data
https://ourworldindata.org/income-inequality

Semuels, A. (2013). The numbers behind the decline in workplace benefits. Los Angeles Times, April 7
http://articles.latimes.com/2013/apr/07/business/la-fi-mo-numbers-decline-workplace-benefits-20130407

Wikipedia (2019a). Welfare capitalism
https://en.wikipedia.org/wiki/Welfare_capitalism  

Wikipedia (2019b). Modern immigration to the United Kingdom
https://en.wikipedia.org/wiki/Modern_immigration_to_the_United_Kingdom  

Woodley, M.A., J. Nijenhuis, and R. Murphy. (2013). Were the Victorians cleverer than us? The decline in general intelligence estimated from a meta-analysis of the slowing of simple reaction time. Intelligence 41: 843-850.
https://pdfs.semanticscholar.org/e8cc/634169c7c5d3e4738fe08091c86177be1380.pdf


Tuesday, December 19, 2017

The Crisis of the 2020s



China's population pyramid. The crisis of the 2020s will be triggered in part by the end of cheap imports from China and the return of inflation.


New Year's 2021. Little seems to have changed over the past three years. Technologically, there are more smart devices to entertain you or to help you with your work. Economically, things are supposed to be better, but that's not your impression. Politically? Not much either. Most of eastern and central Europe has gone nationalist, but they always were, weren't they? There's Italy, where Berlusconi governs with two nationalist parties, but isn't that a rerun of what he finagled two decades earlier? Finally, North Africa is in the news, but no one seems to know what's going on there.

Yet something is afoot. A friend makes a remark he never would have before. He of all people! At the health club you try to follow the news on TV, but it seems harder to follow than usual. You're thinking of traveling abroad, but it's more complicated, supposedly because of the terrorist threat ...

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The Crisis of the 2020s will not be readily apparent when the decade begins. Nationalist parties will be in power over most of Europe, but the Western European "core"—the United Kingdom, France, and Germany—will still be postnational. Yet even there nationalist parties will have made inroads at the regional and municipal levels. These electoral successes will be self-reinforcing, with one leading to another, especially in regions that are culturally and linguistically similar.

But this nationalist consensus will have to reckon with an opposing consensus that is already in place and likewise self-reinforcing. This postnational consensus took shape in the 1940s, when elites throughout the West blamed nationalism for the Second World War and the preceding depression. It grew stronger in the 1950s and 1960s with competition by the two superpowers for the hearts and minds of emerging nations in Asia and Africa. The Cold War had the perverse effect of making the United States and the Soviet Union mirror images of each other, each trying to preach its own universal gospel to the unconverted. 

This elite consensus entered a new phase with the end of the postwar boom in the 1970s and a slowdown in economic growth throughout the West. This slowdown has been attributed to several causes:

- The postwar boom was driven by low prices for raw materials, especially oil. In the 1970s oil prices spiked, as did prices for other key commodities.

- The postwar boom was also driven by population growth—the baby boom. Young adults spent more on housing, children's clothes, educational supplies, and other family-related purchases. They also became more willing to invest in the future, both personally and collectively, since they were literally investing in their children. During the 1960s fertility rates declined dramatically, and by the 1970s declines in school enrolment and household spending had become noticeable. 

- A backlog of technological innovation had piled up during the Great Depression and the Second World War. By the 1970s this backlog was largely gone.

- Thrift and saving had become ingrained during the depression and the war. By the 1970s the culture had shifted toward greater acceptance of living beyond one's means.

These causes should be viewed with some caution, since the slowdown happened across very different political and cultural contexts in North America, Western Europe, and Japan. It also happened in the Soviet Union and Eastern Europe. Slow growth may simply be the historic norm, and economies return to this norm as they mature. In any case, policy makers are less interested in causes than they are in solutions, and to find solutions to slow growth they have consciously or unconsciously turned to postnational thinking for inspiration. 

A slowly growing economy isn't necessarily bad for the average person. Because population growth has likewise slowed throughout the West, economic growth, however sluggish, translates into more wealth per capita. Because companies can no longer count on a growing market, they have to compete much more with each other for market share, thus improving the quality of the goods and services they offer. They also have to compete for a limited supply of labor, thus bidding up wages and raising productivity through automation and robotization. Japan has taken that path, and it isn't doing so badly despite the doom and gloom one hears. Labor scarcity means that 74% of Japanese aged 15 to 65 have a paid job—well above the OECD average of 67%. Only 1.2% of Japan's labor force has been without work for a year or longer—below the OECD average of 2%. Also, Japanese life expectancy at birth is 84 years—well above the OECD average of 80 years.

Slow growth may not be bad news for the average person, but it is for the rentier class—those whose income comes not from work but from dividends, interest, and speculation. When economic growth falls to 2 or 3% a year, this becomes their return on investment. It's not enough to live on, at least not in the style they're used to.

The rentier class has thus pushed Western governments to make the economy grow faster than it normally would. Since the 1970s, growth has been spurred through financial stimuli of one sort or another: tax cuts, deficit spending, lower interest rates, and monetary expansion. This is still a popular response, but the shortcomings are now well-known. The immediate one is inflation—in the 1970s inflation rose to double digits throughout the West. It has since been contained by a mix of money supply management and globalization, i.e., outsourcing jobs to low-wage countries and insourcing low-wage labor for jobs that cannot be outsourced (agriculture, construction, services). In the U.S., massive low-wage immigration began with the Reagan amnesty of 1986, although this outcome was emphatically denied at the time. Upward pressure on wages has further slackened with the decline in unionization, itself largely a result of globalization, particularly the loss of jobs in manufacturing and the shift to less easily unionized jobs in services. Finally, immigration itself has been seen as a way to stimulate the economy through increased aggregate demand, particularly for real estate and construction.

While these stimulus measures help to spur growth over the short term, the outcome seems more dubious over the long term. Today, interest rates are at record low levels throughout the West, and immigration is running at record high levels—in the U.S., legal immigration alone is over three times what it was in the 1960s. Yet year-to-year economic growth is much lower: 1.6 to 2.5% in the 2010s versus 2.3 to 6.5% in the 1960s.

The economy seems to habituate to these stimulus measures. We thus have the apparent paradox of more and more stimulus producing less and less growth. This paradox has three causes:

- People take further growth for granted, particularly in their willingness to go into debt. Growth becomes a Ponzi scheme.

- Uninterrupted growth leads to accumulation of inefficiency. Without periodic recessions to remove wasteful companies and work practices, the economy becomes less productive.

- Sources of immigration have shifted to cultures that are less oriented to the market economy and to the values that make it possible. Historically, most economic growth has been within two culture areas: Europe, especially northwest Europe, and East Asia. These cultures are characterized by high levels of trust, high future orientation, and low willingness to use violence for personal disputes (Clark 2007; Clark 2009; Frost 2015; Frost 2017; Frost & Harpending 2015). Most immigrants to the West no longer come from either culture area. As a result, trust is declining, fear of violence is increasing, and more resources are being earmarked for external behavioral controls (police, private security), which are replacing the internal behavioral controls that used to be enough. Transactions now have to be double-checked for evidence of fraud, theft, or counterfeiting, with the result that economic activity costs more and in some cases is no longer worth doing.

For the near future, Western policy makers will continue to follow the postnational consensus, not so much because they believe in it but rather because they are immersed in it and have little exposure to alternate views. This echo chamber will, in fact, cause the prevailing consensus to become more radical over time. One example is the recent call from Canada's council of economic advisers for a sharp rise in immigration:

The 14-member council was assembled by Finance Minister Bill Morneau to provide "bold" advice on how best to guide Canada's struggling economy out of its slow-growth rut. 

One of their first recommendations, released last week, called for a gradual increase in permanent immigration to 450,000 people a year by 2021 — with a focus on top business talent and international students. That would be a 50-per-cent hike from the current level of about 300,000.

The council members — along with many others, including Economic Development Minister Navdeep Bains — argue that opening Canada's doors to more newcomers is a crucial ingredient for expanding growth in the future. (Blatchford 2016)

This is the backdrop for the Crisis of the 2020s. On the one hand, the postnational consensus will continue to radicalize in the core countries of the Western world. On the other hand, a very different consensus will dominate most of central and eastern Europe, with inroads being made into France and Germany. These opposing consensuses will diverge more and more, if only because mutual antagonism will make dialogue impossible.

The crisis itself may be triggered by one or more factors:

- Inflation will return after a four decade absence. China's supply of cheap labor is drying up, and alternate sources, such as Africa, will prove unsuitable. Prices for certain commodities, especially food, may also rise. This will be pivotal because globalism has gone unchallenged among the elites largely because it has delivered on its promise of inflation-free growth.

- There will be a growing realization that the new migrants to Europe have a different work ethic. They will end up being tax consumers rather than, as hoped, tax payers. Forget about them paying for your pension and health care.

- The French presidential election of 2022 will be much closer than the one in 2017, the result being a narrow defeat or a narrow victory for the Front national. Either way, the country will become ungovernable. A similar situation may or may not develop in Germany after the 2021 federal election.

- NATO may try to intervene in one or more countries in eastern or central Europe.

The actual trigger will matter less than the instability of the world-system. This instability will cause even minor conflicts to escalate, either within the Western European core or, perhaps, in response to a failed intervention in Eastern Europe.

Such escalation will be demanded by those who support the postnational consensus, yet it will work to their detriment. A world-system is stable only if, as Wallerstein (1974) argued, it meets three conditions:

- Military strength is concentrated in core societies

- Ideological commitment to the system is pervasive, i.e., "the staff or cadres of the system (and I leave this term deliberately vague) feel that their own well-being is wrapped up in the survival of the system as such and the competence of its leaders. It is this staff which not only propagates the myths; it is they who believe them."

- Peripheral societies are unable to unite against core societies.

Conflict, especially armed conflict, will destroy the illusion that the postnational consensus is a consensus and thus the only sensible way of viewing reality. Uncertainty and disenchantment will spread even among "sensible" people. Furthermore, if military strength no longer remains concentrated in the core, being used, for example, to intervene in the periphery, there may not be enough people in uniform anymore to defend the entire world-system. Defeat in one country may lead to a chain reaction where one country after another defects to the other side.

References

Blatchford, A. (2016). Finance Minister's key advisers want 100M Canadians by 2100, Thestar.com October 23

Clark, G. (2009).The Domestication of Man: The Social Implications of Darwin, ArtefaCToS, 2, 64-80

Clark, G. (2007). A Farewell to Alms. A Brief Economic History of the World, Princeton University Press, Princeton and Oxford.

Frost, P. (2017). The Hajnal line and gene-culture coevolution in northwest Europe, Advances in Anthropology, 7, 154-174.

Frost, P. (2015). Two Paths, The Unz Review, January 24

Frost, P. and H. Harpending. (2015). Western Europe, state formation, and genetic pacification, Evolutionary Psychology, 13, 230-243.

Wallerstein, I. (1974). The rise and future demise of the world capitalist system: concepts for comparative analysis, Comparative Studies in Society and History, 16(4), 387-415.

Thursday, November 9, 2017

Why the dominoes fall



Election Poster for the Lega dei Ticinesi (Italian canton of Switzerland), an "isolationist, national conservative party" (Wiki). Currently, it holds 21 out of 90 seats in the Ticino legislature (Wikicommons: NAC)


My last post was on the collapse of communism in 1989, specifically why it began in Hungary and Poland and why it spread so fast throughout Eastern Europe. At the end I mused that the same two countries were once more the bad boys on the block.

History doesn't repeat itself, at least not exactly. Today, the actors are different, as is the dominant ideology, which for want of a better term I will call "globalism." The cultural context is also larger and more diverse. In 1989, the dominoes fell within a geographic space that was not only smaller but also more homogeneous socially and culturally. Even if we ignore earlier points in common (Catholic and/or Slavic heritage of most countries, largely agrarian social order until recent times), these societies all shared the historical experience of the postwar era: occupation by the Red Army, destruction of the prewar elites, imposition of a new socioeconomic model, and transnational integration into the Warsaw Pact and COMECON.

Today, the dominoes are falling within a larger and more diverse geographic space—Europe in its entirety, as well as overseas societies of European origin. People do share points in common within this space, notably a long history of Christianization and a consciousness of being "white" in relation to the rest of the world. For most, however, this commonality has become a source of ambivalence and, increasingly, shame. Furthermore, this larger geographic space is marked by differences in political and social development that dwarf those of Eastern Europe in 1989.

So what makes the dominoes fall? Beissinger (2007) called this phenomenon "modular revolutionary change" and tried to identify the processes that drive it:

I use the term "modular" in the way in which Tarrow used the term to describe the spread of collective action across groups. Modular action is action that is based in significant part on the prior successful example of others—a model being, in one of Webster's definitions, "an example for imitation or emulation."

[...] Modular phenomena based in the conscious emulation of prior successful example constitute only one form of cross-case influence; spillover effects, herding behavior, path-dependence, and reputational effects are other ways in which cases may be connected with one another.

To explain this power of example, Beissinger (2007) proposed "the elite defection model":

[...] once example gains momentum and crosses the tipping point where modular behavior accelerates across groups, a general expectation about the direction in which events are flowing demoralizes those representing established institutions, potentially promoting defections among them and encouraging bandwagoning behavior. Here, established elites entertain doubts about their own legitimacy and the future of the structures they are defending, so that a demonstration of the vulnerability of such structures in other contexts leads them to co-opt opposition demands or to seek to bail out before it becomes too late.

This bandwagon effect isn't inevitable. If the elites of one country see what is happening in another, they may try to prevent the same thing from happening in theirs, either through negative measures (harsher repression) or through positive ones (reform). Beissinger (2007) mentioned only the possibility of negative measures:

[...] established elites opposing modular change learn the critical lessons of the model from its repeated successes and failures and impose additional institutional constraints on actors to prevent the model from succeeding further. Under this model, established elites retain a belief in the future of current institutions, hold that established elites in other contexts where modular change was previously successful squandered that future as a result of foolish moves, and respond to the threat of modular change by moving aggressively to prevent such challenges, repressing them and raising the institutional constraints that they face.

There are reasons why this kind of situation causes elites to respond with negative measures rather than positive ones. First, even modest reform can spin out of control if people strongly desire change. Second, the elites themselves may fall prey to their own propaganda, particularly their demonization of the opposition. They may thus double down and strive even harder to portray opponents as wicked traitors who must be stopped at all costs.

Third, the elites don't necessarily have the same self-interests as the rest of society. This was less so in communist Eastern Europe, where social distances were relatively small, partly because of socialist ideology and partly because the prewar elites had been eliminated. In 21st century Western Europe and North America, however, the top 1% live in a very different world and accordingly have a very different view of self-interest. In particular, over the past half-century they have greatly improved their position at the expense of their fellow citizens by outsourcing work to low-wage countries and by insourcing low-wage workers for those jobs that cannot be outsourced. In short, the elites can relocate labor and money to maximize return on their investment, while the Western working class cannot so easily relocate itself.

In any case, fewer and fewer countries can offer Western working people the standard of living they once enjoyed. We can debate back and forth whether globalism is raising the living standards of the world's poor—in some countries it has and it others it hasn't. One thing however is clear. Throughout the Western world, incomes have stagnated or declined for most people—largely as a result of a shift from high-paying, largely unionized jobs in manufacturing to much lower-paying, non-unionized jobs in services, where competition with immigrants is most intense.

This point was made by Bernie Sanders in an interview with Lou Dobbs on CNN:

SANDERS: If poverty is increasing and if wages are going down, I don't know why we need millions of people to be coming into this country as guest workers who will work for lower wages than American workers and drive wages down even lower than they are now.

DOBBS: And as we know, the principal industries which hire the bulk of illegal aliens, that is construction, landscaping ...

SANDERS: Lou, I just heard something.

DOBBS: Those are all industries in which wages are declining. I don't hear that discussed on the Senate floor by the proponents of this amnesty legislation.

SANDERS: That's right. They have no good response. I read something today that a lot of people coming into this country are coming in as lifeguards. I guess we can't find — that's right. We can't [find] American workers to work as lifeguards. And the H1B program has teachers, elementary school teachers. Well, you know.

DOBBS: And that H1B program, we got to watch Senator Ted Kennedy watch there with the sole witness being one Bill Gates, the world's richest man, telling him he wanted unlimited H1B visas, obviously uninformed to the fact that seven out of 10 visas under the H1B program goes to Indian corporations that are outsourcing those positions to American corporations in this country and that four out of five of those jobs that are supposed to be high-skilled jobs are actually category one jobs which is low skill.

SANDERS: Well, you raise a good point, in that this whole immigration guest worker program is the other side of the trade issue. On one hand you have large multinationals trying to shut down plants in the America, move to China and on the other hand you have the service industry bringing in low wage workers from abroad. The result is the same — middle class gets shrunken and wages go down. (CNN 2007)


And this is only one aspect of the economic, demographic, and political crisis that now faces people throughout the Western world, particularly those who thought they had a nation-state to defend their interests. Radical change, by its very nature, tends to do more harm than good, and the change we’re now facing dwarfs that of any previous revolution. Robespierre and Lenin didn’t attempt what the current leadership of the West is now attempting. In many respects the crisis we face is an existential one.

Recapitulation

How many dominoes will fall? And how fast? Clearly, the process will be slower and more irregular than it was back in 1989. Compared to Eastern Europe, the Western world is much more heterogeneous culturally, politically, and historically. Its elites likewise have less in common with the average man and woman. Finally, they can rely on support from each other, most crucially from elites at the center of the Western world.

On the other hand, this same heterogeneity means that some countries have elites whose hold on power is weaker and whose legitimacy is correspondingly weaker. In such countries, repression may be harsher and yet less effective because there is so little collaboration at the grassroots level. If change is in the air, agents of repression may hesitate to act, for fear that they might later be held accountable for their actions.

So more dominoes will surely fall. For now, they'll fall where the elites are more peripheral in the Western world, where their hold on power is weaker, and where cultural affinity or shared historical experience can facilitate the bandwagon effect. In my next post, I will peer into this near future and the apparent surprises that lie in store.

References

Beissinger, M.R. (2007). Structure and example in modular political phenomena: The diffusion of Bulldozer/Rose/Orange/Tulip revolutions, Perspectives on Politics 5(2), 259-276.
http://georgica.tsu.edu.ge/files/01-Politics/Rose%20revolution/Beissinger-2007.pdf

CNN (2007). Lou Dobbs Tonight, June 21, CNN.com Transcripts
http://www.cnn.com/TRANSCRIPTS/0706/21/ldt.01.html