Sunday, July 23, 2017

Book Review: 'The Wealth of Humans: Work, Power, and Status in the Twenty-first Century' by Ryan Avent

Review by Graham H. Seibert

Philosophers tend to reduce the human animal to an idealization. It doesn't work. It results in simplistic solutions – Communism and Keynesianism – which fail in practice.

Ryan Avent has been a columnist for The Economist magazine for seven years. After taking his MBA, he worked briefly at the Bureau of Labor Statistics. His description of the corporate culture of The Economist is one of the high points of the book. His description from the inside jibes very well with what one experiences from the outside, as a reader.

The book puts both Mr. Avent's strengths and weaknesses on display. He is a bright man and a hard worker. On the other hand, one senses that his worldview conforms very much to that of the establishment publication for which he works and the establishment institutions where he studied. While the book adheres pretty much to liberal orthodoxy, Avent is candid enough to recognize several internal inconsistencies.

Avent scatters clues throughout the book that he knows some of the truth about humanity, but he relentlessly omits it from his analysis and his projections. Let me cite some of the truths that he observes.

1) People support their own. "It is no wonder that experimental, generous welfare policy has tended to emerge in Nordic countries, where ethnic and communal ties are strong (but where openness to immigration has begun to tear at the social consensus)." Also: "The ethno-nationalist diversity of the American population, however, has long been an obstacle to the construction of an exceptionally generous welfare state. White voters in the South are skeptical of a welfare state that promises to deliver generous support to black Americans in northern cities, or to Latin Americans in California."
2) Work is important to mental well-being: "if we can't offer our children, meaning, and identity and work, how do we channel their energies toward healthy alternatives, rather than ideological extremism, or social nihilism?"
3) The rich countries are in a demographic trap: more old people than young to pay their pensions
4) Central banks continue to print money in an attempt to escape stagnation.
5) "University is hard. Many of those who don’t currently make it through a college programme lack the cognitive ability to do so.'

But there are several truths about people that the book does not acknowledge.

1) Today's populations are the survivors of a long process of evolution, which constantly pitted peoples against each other. It is in our nature to strive for supremacy, as individuals and as peoples.
2) Evolution made populations different in every measure, including those that lead to success in rich world society. Avent writes: "but migrants also contribute in myriad ways to American wealth. They commit fewer crimes than natives and are disproportionately represented among entrepreneurs." I doubt this is true overall – he offers no footnote. Moreover, crime and welfare dependency among Chinese immigrants and Indians on H1B visas is certainly vastly lower than among Somalis and Syrians.
3) The idea of work – as in a job and a workplace – evolved slowly, after the advent of agriculture. Human temperaments coevolved, suiting people to work. Work remains largely foreign to peoples who did not go through the agricultural revolution or did so recently.
4) Most people's goal in life is not "the good life" as Avent abstractly puts it, but simply to do what evolution and traditional beliefs would have us do: raise a family and be a valued member of a community of people like ourselves. Avent sees us as atomized children of the Enlightenment. Most of us are not.
5) Social capital, one of his big themes, is inversely related to diversity. He cites the expert on social capital, Robert Putnam, but fails to mention this very important insight from the famous Bowling Alone. The less homogeneous a neighborhood (i.e., the more immigrants and minorities), the less social capital it has.
6) Avent advocates more education for almost everybody, especially in the developing world. But, as noted above, not everybody has the cognitive ability to do college work. Average intelligence in most developing countries is well below that of America. The human potential just isn't there.

There is one major truth about the developed world that he does not acknowledge, that which rather centrist economist Rogoff writes about in This Time Is Different: Eight Centuries of Financial Folly. Central banks have contributed significantly to the income inequality he so laments. As they monetize debt, the money flows eventually into bond purchases, stock buybacks, real estate inflation and other mechanisms that enrich the already rich. Meanwhile, middle class savers and pensioners are devastated by the resulting zero interest rates. It does not matter whether this is due to the hubris of central bankers, stepping in to save the day when the politicians refuse to balance the budget, or sinister intent as suggested in The Creature from Jekyll Island: A Second Look at the Federal Reserve. The result is devastating.

The book does not provide a satisfying answer to the most vexing problem it addresses, what to do when automation makes the labor of half of mankind superfluous. Avent does a credible job of describing the process. As a young computer geek I was instrumental in putting grocery clerks and linotype operators out of work, just as he describes. Today it is warehousemen, assembly line workers, newspaper boys and printers who are suffering. In the near future it will be drivers, newspaper men and paralegals.

The critical question, as he acknowledges over and over again, it's what happens next? What happens when work is not needed? Avent presumes to have some answers. I am more pessimistic. I don't think his are workable, though I cannot see any that are.

As an economist, he correctly explains the problem. When machines can do a job more cheaply, and better than a person, you don't need that person. He correctly observes (attention, Gov. Jerry Brown!) that when you raise the minimum wage, you decrease the demand for labor and you increase the incentive to replace labor with machines.

He falls down on the "what next?" step. He would like to think that people will use their newfound leisure and creative ways. Perhaps they will create artisanal cheeses, or handicrafts. Perhaps they will stage community plays. Perhaps they will clean up their neighborhoods. No! A quick look at actual neighborhoods says that it does not happen. Doing nothing is simply not consistent with a human being's sense of self pride. "The devil makes work for idle hands" is a potent observation.

Charles Murray's Coming Apart -The State of White America, 1960-2010 is about white people. Idle ones in Fishtown, Philadelphia spent their time watching TV, drinking and doing drugs, having aimless sex and doing minor kinds of misbehavior. They don't often marry, they don't tend to children if they have them, and they certainly are not into civic improvement. Different ethnicities handle idleness differently. Native Americans seem to sink into apathy and drink. Statistics tell us that African Americans are more inclined to validate their existence through crime and amorous conquests. The pathos of the claim that "Black Lives Matter" is that it seems to all concerned, especially those leading those lives, that they don't. Idle and unengaged youth from yet other cultures commit horrific acts of terror.

Social capital is decimated as idle young people use antisocial means in an attempt to invest their empty lives with dignity. People who are employed, raising families and socially engaged, want to be as far from them as possible. This is a conundrum that Avent does not confront. Social capital depends on a sense of self-worth, one that cannot be counterfeited. Social capital declines in a world without meaningful work.

Avent goes into some detail about the lives of the 1%, people with fulfilling, high-paying jobs. The 1% are very self-selective. They seek each other out in rejuvenated urban cores of a few cities. New York, San Francisco, and Washington DC have been intensely yuppified since the crime fueled 1980s.

Affluent professionals have driven housing prices through the roof. The NIMBY phenomenon strangles new development, putting immense premiums on existing properties. Yuppies take over whole neighborhoods by bidding prices up beyond what the middle class can pay. Avent claims that the intensity of their interaction makes them want to locate in close physical proximity, email, messaging and Skype notwithstanding.

I find the argument less than convincing. I lived in Bethesda, Maryland. I was a trustee in a private school board chaired by the wife of David Bradley, publisher of Atlantic Magazine and much else. My children had play dates (two I think) with the Huffington kids. Those are my bona fides for commenting.

The city core suits the increasing numbers of childless, unmarried and gay people among the intense young professionals. Addressing those who do marry, Avent uses (inadvertently, I am sure) the term "assortive mating," popularized by the scandalous book, The Bell Curve. Men and women within the 1% socialize, meet and match.

Raising children in the city is tough. Even in Roman times the cities did not reproduce themselves. I have no doubt that the 1% and America's cities are likewise not reproducing. The hassles of the nannies, the private schools, the carpooling to lessons and so on are almost insurmountable. Those children that they do bear (or adopt – these are older people, and gestation is a major effort and time-sink) grow up with a weird form of socialization, ferried to this lesson and that by their Latin Ladies. Suffice it to say that the 1% has an uphill struggle to perpetuate its numbers and its culture.

I note that the people with whom I rubbed shoulders were often quite narrowly confined in their interests. They did not want to socialize, or rather be social, with just anyone. As you will note by looking at my reviews on Amazon, I have a broad range of interests. I did not find the people in this rarified atmosphere be terribly interested in discussing most of them. On the other hand, Avent is right that they seek like souls. That certainly was true in the data processing field where I made my living as an Oracle expert. It is certainly more enjoyable (and profitable) to solve problems in the company of truly talented people.

Avent writes "Malthus opposed England’s Poor Laws, designed to keep the utterly destitute from dying in the streets; since the poor were doomed at any rate, keeping them alive and capable of breeding simply prolonged and increased their misery, he argued. Happily, Malthus was wrong. Unexpectedly, agricultural productivity grew very rapidly, and families began having fewer children. Malthusian collapse was thankfully averted." Avent also notes that in those days there was considerable demand for unskilled labor. Only a few drunks, crazy people and imbeciles were totally unemployable.

This time it is different. There will be fewer and fewer jobs, available mainly to the smarter and better educated. Broad swaths of humanity will be unable to offer much if any labor of economic value.

With regard to the notion that you can't afford to let the unemployable starve, per Malthus above, Avent is right. Our humanitarianism will not tolerate it. But neither can society afford to provide the unemployable with expensive services such as medicine or education. The problems of funding them are reaching crisis proportions all over the rich world. It is unlikely that a democratic society will arrive at a solution. Rather, something ugly will emerge out of its collective inaction. Services will decline in quality. Society will stop discouraging down-and-outers from taking drugs – let them have their soma. And the rich will take care of their own needs – medical, pension, security – privately.

Most important, something must curb the fertility of the unemployable. Western society, the rich world is already experiencing problems with the rapid growth of certain dependent populations such as Gypsies and Muslims in Europe. True, their fertility is shrinking, but if the fertility of the producing sector of society is likewise small and shrinking. It should be clearly that society will not be able to afford to support increasing legions of dependents. One also notes that these minorities are eroding Europe's social capital – its ability to create wealth – at the same time the replacement rate of the wealth-producers is well below two. We may retrogress to 1927, when Justice Holmes justified state-administered sterilization, writing "Three generations of imbeciles are enough." Society may again demand a quid pro quo: "We will support you, but you can't have kids."

The big cities have been yuppified largely because crime was controlled by innovative policing techniques, such as Bill Bratton's "broken windows" approach in New York City, imitated in many other cities. This is coming undone in this year 2016. Crime rates are spiking. The cities may not retain their allure, and the highly mobile yuppies may again flee.

Terrorist acts such as the pressure cooker bombs that have gone off in New York City the week I write this have a vastly detrimental effect. They wipe out hundreds of millions of dollars of social capital in a single blast. People simply don't want to take the risk of living in the cities. I fear that this is going to drive those who have the wherewithal to live wherever they want, into their own ghettos once again. We notice that although the central cities of New York, San Francisco and Washington DC are vibrant, they each have a string of attractive suburbs in Westchester County, the San Francisco Peninsula, and up the Potomac. When the hip people become scared, they can quite easily move out just as they moved in. Avent's transportation revolution, driverless cars and all, may facilitate it.

Groupthink is an occupational hazard of today's newsman. Although a newsman is supposed by definition to be curious, there is a powerful conformity among the establishment media. They believe what they were taught in the university, they talk to each other and reinforce the ideas, and they scoff at outsiders, the unwashed, the pariahs.

However, many people who think outside of the mainstream really quite bright. Nigel Farage is a devastatingly witty and compelling orator. I would advocate that if Ryan Avent hasn't yet read materials from the Dark Enlightenment or the Alt Right, he should try writers such as Mencius Moldbug and Jared Taylor.

I would recommend reading some books that offer what he might consider heretical, offering unconscionable ideas. These would include IQ and Global Inequality , and Race Differences in Intelligence: An Evolutionary Analysis. These are well composed quite readable academic books, downloadable as PDFs. Even if he has to carry them in plain brown wrapper because his peers at The Economist will absolute scoff at the idea, he should read the books and think of rebuttals. However despicable the ideas, are the books wrong? How can one argue against the arguments as presented? The mark of a truly educated man is the willingness to take on different and uncomfortable ideas. I offer this challenge to readers of this book. Avert's is a book full of fairly comfortable ideas. Go outside the box.

Avent writes that "Radical parties in Hungary and Poland are pushing for significant political change: to undermine existing democratic institutions and to edge away from the EU." This is wrong on a couple of counts. Radical, says who? One can argue that they want to preserve their democracy in the face of an unelected and unaccountable EU. At any rate Avent should read what they write, even at the pain of perhaps learning a language other than English.

An easier task is to recognize also that many of today's most recognized thinkers are halfway in and halfway out of the establishment – Nicholas Nassim Taleb, Niall Ferguson and Kenneth Rogoff would be examples. Recognize moreover that the people are all the way out of the box, those above whose names are not used in polite company, have a great many followers. Recognize also that the core of the followers of these outgroups are the white native-born members of those societies. They are by and large, better educated and wealthier and if you really look hard, more intelligent than the immigrants and minorities that The Economist would champion. It is hard to accept, but to judge from the blogosphere, Brexit and Trump appear to be the work of the more intelligent and educated voters.

Four stars. Avent is a work in progress, looking outside the box but not getting there quite often enough.


Editor's note: This review has been published with the permission of Graham H. Seibert. Like what you read? Subscribe to the SFRB's free daily email notice so you can be up-to-date on our latest articles. Scroll up this page to the sign-up field on your right.