2018 Letter

(This is my personal annual review post; here’s the piece I wrote for 2017.)

I want to kick off this post by making a point about Moore’s Law. That’s the observation, which later turned into a prediction, that the number of transistors on an integrated circuit doubles every 18 to 24 months.

Moore’s Law is not some natural law built into the fabric of the universe, designed to self-execute without a bit of engineering effort. Instead, it’s a massive industrial undertaking to push forward this technological frontier. It follows that we have agency on how quickly we can maintain the pace of technology improvements. The semiconductor industry set a benchmark for improvement early on, one that seems kind of arbitrary today, and made a collective effort to execute against it. Semiconductor companies—the leaders of which are TSMC, Intel, and Samsung—adopted Moore’s Law as an industry goal. The rate of progress seems to have gotten slower and more expensive, but it’s remarkable that Moore’s Law has held up for decades.

Now I wonder to what extent we can replicate exponential progress by doing some branding. Moore’s Law turned from a neat backwards-looking observation into an obligation for the entire chips industry to keep improving. One description that I like of it is that it’s a “clock that has become a chaotic attractor for innovation.” I don’t think there are many other technologies in which exponential growth in performance over decades is possible. But maybe there’s a handful more that are, and they await a nice label that will concentrate minds, mobilize capital, and attract talent to keep improving. Coming up with that label might be a kind of low-hanging fruit that would encourage greater growth.

I’d like this exponential progress to come to other fields, especially industrial technologies. Semiconductors are upstream of all electronics, which is a sector that has been vibrantly innovative over the last few decades. If we had exponential progress in a few more upstream technologies, we may be able to enjoy faster innovation in fields beyond computers, software, and the internet. Silicon Valley is rightly celebrated as a driver of innovation and wealth creation. But I’m not sure to what extent that Silicon Valley companies have yet promoted dynamism in the broader non-tech world. Companies there are very good at building software on top of and abstracted from the physical world. The tech companies we hear most often about tend to be capital-light, beautifully-scalable businesses that earn the most handsome returns for investors.

We’re excited about companies like Airbnb and Uber, which match consumers with underutilized assets. Better matching of supply and demand is valuable, but I’m looking for something more ambitious. Focusing on industrial technologies is more like taking a firm hold of the supply curve and pulling it downwards; that process can unconstrain the growth of many downstream companies. For example, energy is upstream of everything in the economy; think about how much more room AI would have to play with if energy costs were measured in cents rather than dollars. Smartphone components today would have been military-grade technology just two decades ago. Their costs have been brought down in some cases by the hundredfold, and are cheap enough to create whole new categories of products, like the consumer drone and virtual reality headsets.

Instead of being enamored with downstream, consumer-facing internet companies, I wish more people could be excited about upstream, industrial technology companies. It’s easy to love smartphones, the internet, and all the apps we use without thinking about how semiconductor improvements have made a lot of these things possible. Furthermore, I wish that more of these industrial components can improve at the pace of Moore’s Law. We haven’t had quite as much progress in energy, space, chemicals, and medicine that we were expecting decades ago.

To some extent, Moore’s Law is an irrational commitment by the chips industry. It’s expressly driven by an engineering benchmark, i.e. to keep doubling transistor density, which is not necessarily a market- or customer-driven demand. This is a triumph of scientists and engineers over financial types, who would question why an abstract scientific challenge should be invoked for capital allocation decisions. In my view, this sort of irrationality is not a bad thing. In many cases, we should invest more in upstream technologies, even if we have no idea what sort of downstream uses they may enable. I don’t think it would be terrible if many industries developed a maniacal commitment to lowering input costs or broadening the capabilities of these inputs.


This year, my tastes in music veered towards the more adventurous. That means I made a conscious decision to dwell less on Beethoven and Wagner. I attended three performances worth noting: the Vienna Philharmonic playing Wagner in Tokyo; the Berlin Philharmonic playing Mozart in Berlin; and the Deutsche Oper staging Lady Macbeth of the Mzensk District. The first two were nice examples of technical perfection, I enjoyed the third one the best.

Shostakovich may have had too much fun for his own good when he composed Lady Macbeth. It’s no wonder that Stalin is rumored to have personally penned an editorial in Pravda to denounce the work. The best parts of the opera come from the juxtaposition of beautiful musical passages with wildly inappropriate desires acted out on stage. For example, when a kulak decides that he will at last make a move on his daughter-in-law, forcing down the bedroom door if necessary, the music erupts into a gorgeous Viennese waltz. Shostakovich is not the only composer to play these kinds of games. The music of Strauss is most fine when the action on stage becomes most dreadful; sweet and triumphant tones ring out from the orchestra as Salomé fondles the head of John the Baptist, which she had just ordered to be separated from the rest of his body.

Let’s stay a bit longer on music. When I read Tyler’s interview of Elisa New this year, it struck me that many of her suggestions of how to get started on poetry apply just as well as how to get started on opera. The general plan should not be to absorb a whole work sequentially and all at once. (That is, don’t put on Parsifal or Don Carlo, plan to sit still for six hours, and expect to get something out of it.) Instead, the plan should be to look for small moments as entry points, which one can use as beachheads to expand towards the rest of the work.

While most parts of every opera are boring, some parts are the peaks of composed music. Nobody, I submit, can sit in rapture for the entirety of every performance. Instead, I believe that we’re all seeking a few morsels from any particular work. For many moments, you can’t actually hear anything the first few times. I mean that literally, in the sense that even the most beautiful bits will not necessarily register cognitively until a dozen times of repeated listening, often with more than one conductor.

I’ll suggest a few heuristics when it comes to finding morsels in Mozart and Verdi, two of my favorites. First, the endings of acts tend to burst with drama, in which large parts of the cast gather around to issue a gigantic statement of terror or grief; Verdi especially means for these scenes to arouse. Second, look for scenes with multiple voices, like duets, trios, and quartets. To me, these represent many musical peaks. (Rarely am I very moved by solos or the entire chorus.) I found the quartets in Don Giovanni and Rigoletto to be compelling beyond belief, and they were responsible for drawing me into the rest of Mozart and Verdi.

It’s sort of surprising that Verdi works as well as he does. I think it was Alex Ross who suggested that it’s hard to make sense of Verdi from the page: the orchestral accompaniment looks crude, offering usually unimaginative beats. Verdi’s best moments feature a mix of voices that drive the momentum, with urgency that’s hard to pick up from the page. I consider the best parts of Verdi to be the ruminative sections, like the quartets in Don Carlo and Rigoletto, in which each person is making a private confession of grief or joy, none of whom can enjoy the consistent support of the orchestra. Or the concluding duet of Aida, in which the tenor and soprano come to terms that death is the condition for politically-forbidden love, their voices rising and falling on top of shimmering strings. If the ruminative parts of Verdi don’t grab you, look for the fast-paced parts that feature tight rhythms: Il Trovatore offers many such points of ignition. Muti is certainly my favorite Verdi conductor.

Whereas the best of Verdi are the ruminative parts, the best of Mozart are in the flourishes, in which strings propel the action. Instead of dwelling on something marvelously beautiful, as Strauss would, Mozart wraps things up so that he can get on to unfurling the next perfect moment. He’s not like Beethoven, who is sober by default; nor like Verdi, who draws out sad moments with special weight; nor like Wagner, entirely without frivolity, who brings listeners into trancelike states of wonder.

I spent a lot of time this year listening to the Da Ponte operas. Many conductors have recorded these works, I like Currentzis and Gardiner the best. I know that we’re all supposed to prefer Don Giovanni to Figaro and Cosi, but I want to present a dissenting view. I feel that Mozart has a tendency to be ironic and cheerful. It’s harder to pull that off with Don Giovanni, which starts out being objectionable, then turns moralistic, and ends on a sappy note. Figaro and Cosi are less serious and more dialectical. Everyone has a chance to be deceitful and villainous, there is no single person who is the obvious rake. The tender moments of Figaro and Cosi feel more real, and they feature a better use of irony. My favorite morsels from these works include the false wooing of Fiordiligi by Ferrando, the false acceptance of wooing by Susanna from Count Almaviva, and the way-too-real wooing of Donna Elvira by Don Giovanni.

Here is Tyler on Mozart and his advice on how to get into opera. If you should enjoy Lady Macbeth, perhaps you’d also be interested in Jenufa by Janacek, Salomé by Strauss, and Lulu by Berg.


I’m spending most of my time studying Chinese industrial policy and the country’s technology upgrading process. This was a busy year for work given the escalating trade war. I wrote reports on topics that included the long-term outlook of China’s semiconductor development (and how export controls can derail that progress); how China’s internet and smartphone companies are going abroad, mostly to developing countries; how multinationals are adjusting their supply chains given tariffs; a general evaluation of the prospects of success of 2025; and other stuff.

Fragments of that work exist in public. If you’re curious, you can listen to a podcast I recorded for Bloomberg’s Odd Lots, with Joe Weisenthal and Tracy Alloway. I did some live TV with Bloomberg as well, and I’ll link to that segment when it becomes available. There are also bits of my commentary in news stories. For example, I talked about China’s chip capabilities with the FT, electric vehicles with the WSJ, 2025 with the NYT, and data centers in Guizhou with the Economist.

Last year, I visited many cities of the Sinosphere. This year, aside from some time in Tokyo and Berlin, most of travel was in China itself. I’m glad to have visited eight of the country’s ten richest cities, for work or pleasure. (The two I missed were Tianjin and Suzhou.) The least interesting city of them all is Wuhan, which seems to have nothing other than industry, and no food worth remarking upon. I had the most fun in Hangzhou and Chongqing. They’re a nice study in contrasts, and I recommend visiting them as a pair.

Start the trip in Chongqing, a chaotic city in a bizarre geographic setting, with tall buildings growing out of gorges and hills. I find the dusk and night scenes there to be more dramatic than even Hong Kong’s. No wonder the gallery of cyberpunk transformations of Chongqing seems so fitting. Then head to Hangzhou, which I consider the most pleasant large city in China; when I gazed at its lake and surrounding hills of tea plantations, I thought it could plausibly resemble parts of Ontario or upstate New York. Walking around, one can tell that Hangzhou anchored the richest region of China for 1,000 years, why the poets dwelled there to find inspiration, and why the emperors liked to visit. The spicy food of Chongqing is indeed what it’s cracked up to be; and the food in Hangzhou is so fine that I feel that Jiangnan cuisine might be the most wonderful cuisine of them all.


Enough highlights; let’s get on to self-criticism.

I regret that I wrote only three pieces on this site in 2018. It’s half the number of the previous year. Ultimately I’m not so bothered however, that writing personal essays took a concession to quite a lot of work, travel, and reading. Furthermore I’m quite pleased with how my two non-review pieces turned out. Imperial History and Classical Aesthetics was an effort to capture some of the flavors of Chinese cultural sensibilities, and I’m modestly satisfied with the result. How Technology Grows is an elaboration of my thoughts on definite optimism: that we should reach for economic growth and pay more attention to the industrial world. Come to think of it, that’s a rather nice thesis statement for my site. The essay also makes the point that knowledge ought to be considered a living product, which needs to be practiced for it to be even sustained at its current level.

Certainly next year I’ll try to write more, but again I won’t be much bothered if writing here takes a backseat to other stuff. This is after all only an effort that’s meant to be for fun. Much more of my quick-take output has moved to emails and group texts, with some of it spilling over to Twitter.

I’m more aggrieved by my lack of movie and television consumption in 2018. This year I watched only a handful of movies, I think fewer than a half-dozen, and no TV. I’ll repeat what I said from last year: “I regret to have ignored TV as a creative stimulus this year, and concede that my imaginative capacity has possibly suffered as a result.” Of the few movies that I watched, three made an impression.

Ash is Purest White, Jia Zhangke. It’s a gangster movie for the first hour that turns into a Jia movie in the second, starring as usual Zhao Tao. The trailer is great. One kind of knows now what one is getting into with Jia: he will offer poignant scenes, sometimes dropping in the baffling or surreal, and adding a touch of the supernatural. Jia prefers understatement, but the prospect of violence hovers more closely in sight in this more than his other movies.

There are many references to his previous works. Zhao Tao travels through the Three Gorges as she did previously in Still Life. I love that you can find random snatches of Village People in Jia’s movies; he must appreciate their terrible catchiness. Jia used mobile phones to marvelous effect in The World, and the evolution of their use features prominently in Ash is Purest White.

2001: A Space Odyssey, Stanley Kubrick. I saw this movie on TV maybe a decade ago and didn’t think much of it. This time I saw it in 70mm with a full sound system at the Alamos Drafthouse and found the experience stunning. (I’m thankful to Eugene Wei for taking me to the showing; one of my goals in life is to follow Eugene to at least one movie a year.) I thought that the depictions of space travel and orbiting structures were really marvelous. Afterwards I was astonished to discover that the movie was released in 1968, i.e. a full year before we were sure that we could put a man on the moon. Wasn’t it remarkable that Kubrick and the rest of Hollywood had such confidence that space travel could be easy, and a bit disappointing that we’re not going to space in the same way, 17 years after his expected timeline?

Here’s another thought about the movie’s circumstances. I had just finished the fourth volume of Caro’s biography of LBJ before I watched the movie. Towards the end, Caro discusses Johnson’s Great Society initiative to alleviate widespread poverty in the US. It’s all the remarkable then that the US government prioritized going to space—at the peak committing a mid-single-digits share of the federal budget to NASA—before trying to reduce poverty at home. The government made a political decision that technology should come before poverty relief. Regardless of whether one thinks whether that was the right tradeoff then, it’s quite a bit more difficult to imagine that the US government could commit so much to a scientific endeavor today.

After the movie, I re-read Kennedy’s moon speech. Isn’t it a wonderful example of definite optimism? “If I were to say, my fellow citizens, that we shall send to the moon, 240,000 miles away from the control station in Houston, a giant rocket more than 300 feet tall… made of new metal alloys, some of which have not yet been invented, capable of standing heat and stresses several times more than have ever been experienced, fitted together with a precision better than the finest watch, carrying all the equipment needed for propulsion, guidance, control, communications, food and survival, on an untried mission, to an unknown celestial body, and then return it safely to earth, re-entering the atmosphere at speeds of over 25,000 miles per hour, causing heat about half that of the temperature of the sun… and do all this, and do it right, and do it first before this decade is out—then we must be bold.”

The US did all this, and did it right, and did it before the decade was out.

Since I bring up Kennedy, it’s also fair to bring up the definite optimism of Khrushchev. Whereas Kennedy directed his gaze towards celestial bodies, Khrushchev—who supervised the construction of subway lines in Moscow—concerned himself with matters closer to the earth. I’ve discovered a speech the general secretary gave to the National Conference of Builders, Architects, and Workers in 1954. It was an impassioned argument on the virtues of construction in concrete, lasting the better part of two hours. Has any other modern head of state been so full of whimsy as Khrushchev, and could make such a well-informed case for a building material?

Concrete construction prompted a building boom of squat, low-cost apartment buildings that earned the affectionate name of Khrushchyovka. (No wonder the USSR urbanized so quickly.) Khrushchev listened to his scientific and engineering advisors, gained personal conviction of the superiority of concrete, and took it upon himself to sell the idea to the public, which he did with enthusiasm. Shouldn’t this trait, possessed by both Kennedy and Khrushchev, be one of the top qualities we ought to seek in our politicians today?

The Story of Qiu Ju, an early Zhang Yimou movie, maybe the better translation is Qiu Ju Goes to Court or Qiu Ju Pursues Litigation. It’s charming from beginning to end, with many occasions for whimsy. Some of the street scenes were filmed live with a hidden camera. So many shots of ordinary life in a mid-sized Chinese city in the ‘90s would make the movie worth watching alone.


It’s time to talk about books.

My fiction reading this year revolved around Cao Xueqin’s Dream of the Red Chamber. It’s the chronicle of the fortunes of a noble family during peak-Qing, which enjoyed prosperity until it fell into imperial disfavor, after which it suffered waves of calamity. The Dream is our Proust. I mean that the plot is mostly beside the point: one needs not ever care about our protagonist, who is an absurd boy. Instead, it is about drinking in the scenes of everyday life that make the novel so worthwhile.

The novel features many details. These include intricacies of food, textiles, and trinkets, along with how they’re used in family and imperial rites. How the noble Jia family, which managed to produce an imperial concubine, has to pay attention to the changing political currents at court. How the family has to manage an enormous staff of servants, who are able to assert their independence by generating an endless stream of gossip. How the women, both noble and common, could spend all day weaving. (While I was reading the books, I was pleased to come across Melanie Xue’s research, which brought up the fact that regions with more pre-modern cotton-textile production were more likely to view women to be just as competent as men.) I thought that the second half of the dream was most interesting. The family is no longer prosperous and has to suffer unrelenting woe. The characters then stop being such models of piety and literary virtuosity, instead descending into deception, pride, and superstition. It’s a wonderfully Chinese novel.

The Dream has one important difference with Proust worth highlighting: Cao uses his considerable powers to paint vivid female leads, while his men tend to be boring and stupid. (Our protagonist literally turns into an imbecile in the final quarter of our dream.) It’s much the opposite with Proust, whose female characters are mostly flat.

To my surprise, my nonfiction reading revolved around three political biographies this year. They are Deng Xiaoping (by Vogel), Park Chung Hee (by Kim and Vogel), and Lyndon B. Johnson (Caro, specifically Volume 4: The Passage of Power). I found the books about Deng and Park to be useful, and the book about Johnson to be most enjoyable. At last I can appreciate why my friend Kevin Kwok is prosecuting such a spirited campaign to compel everyone he knows to read the Caro books. I don’t care much about LBJ himself, instead I was absorbed by the storytelling. The usual exhaustion of following small details never overwhelmed me, because Caro is so earnest about their importance.

It’s easy to recommend these books. But you’ve likely already heard of them, and I don’t see my role here to be telling people to read what many other people are already recommending. Instead I feel that I can play a more useful role by pointing towards more obscure works. Of this genre I wish to cast a spotlight on three.

I See Satan Fall Like Lightning, by René Girard. This short book is the best case I’ve read for Christianity. Most faiths (and pagan myths) take the side of the crowd when they strike down their victims, who are denounced to be the cause of general misfortune and woe. The Bible takes the side of victims. It offers one example after another to show how crowds can be whipped up to persecute the innocent. I thought that nearly every page of this book offered insight, all the way through the end where Girard evaluates Nietzsche.

I consider the Cultural Revolution to be the greatest possible Girardian nightmare, and I wish that many more Chinese would study the work of Girard. More people should get to know the virtues of Girardian renunciation and forbearance. I’d even go as far to suggest that encouraging the appreciation of Girard in China could be one of the highest-leverage acts that we can do for humanity, and I’m personally willing to put in some effort to encourage more people to study his work.

Exact Thinking in Demented Times, by Karl Sigmund, can one imagine a more delightful title? A professor of mathematics has written this intellectual biography of the Vienna Circle, a group of logicians, mathematicians, physicists, and philosophers who worked in Austria over the ‘20s and ‘30s. Readers will recognize the names of members of this circle and those who dropped in on them: Gödel, Carnap, Popper, Einstein, Wittgenstein, Mach, and more. The Vienna Circle held monthly discussions to clarify questions in language, logic, and mathematics. Its members produced insights that fundamentally advanced progress in physics and computing.

The group probed ever more abstract questions while the real world fell apart around them. They wanted to debate logic, but increasingly unnerving events of the world had a tendency to intervene—the German annexation of Austria was not even the most severe disruption that the group had to face. This society of logicians and mathematicians was shockingly susceptible to murder and intrigue. Ludwig Boltzmann died by his own hand, after declaring that too many smart people become obsessed with sterile pseudo-problems. (Perhaps we’re not much closer to eradicating this epidemic today.) Kurt Gödel descended into paranoia, eventually starving himself to death after he emigrated to the US. Moritz Schlick, chief organizer of the Vienna Circle, was murdered by a deranged student, who got off easy after the press mostly took the killer’s side.

I liked this bit about Hans Hahn, the mathematician: “His talks and papers were of supreme clarity. To deliver his daily lectures, which he always prepared with meticulous care, he had developed a peculiar technique and carried it to its limits. His favorite student Karl Menger wrote: ‘He proceeded by taking almost imperceptible steps, following the principle that a mathematical proof consists in tautological transformations; yet at the end of each lecture, he left the audience dazzled by the sheer number of ideas he managed to cover.’”

The Confusions of Pleasure: Commerce and Culture in Ming China, by Timothy Brook. How quickly could a Ming emperor’s couriers reach the distant outposts of the empire? How did the merely wealthy try to match the fashions of the actually noble elite, and how did the elite stay a step ahead? How did local cadres attempt to govern in an age of growing commercial sophistication? How did the empire deal with massive weather disruptions through the Little Ice Age? Why did the spread of the printing press cause a century of sectarian warfare in Europe, but barely a political ripple for the Ming?

Brook offers answers to these questions and many others. It’s valuable to read about the development of the crafts and commercial culture on its own terms; Brook makes it easy by being a wonderful stylist. My favorite parts were about how foreigners and imperial subjects were able to travel throughout the empire, on a well-functioning logistics network. This book and the Dream offer reminders of the importance of the material world. We take tools and trinkets for granted, but these books remind us how difficult it was to produce anything at all, much less move it at any distance.

I should also mention that I loved Disturbing the Universe, the memoirs of Freeman Dyson. He is someone we can say has been living a full life. Outside of books, I loved this article by Doug Irwin on the semiconductor trade war that the US launched against Japan in the ‘80s. It’s a fascinating history of technology and political economy. It features a diverse cast that includes the USTR, Japanese trade negotiators, the PC industry, and other fun characters. Semiconductors are kind of a successful application of US industrial policy.


My life this year was not totally bereft of television entertainment. The most novel thing I watched this year was the UFC fight between McGregor and Nurmagomedov. I found it a deep experience, and I thank my friend Dave Petersen for putting it on TV and insisting that I watch it with him.

At first I found the show too gruesome to endure. There were many moments where I could hardly believe what I was seeing, like when one grown man had another pinned to the floor, landing punches on his opponent’s face, while the victim’s own blood was dripping on him from his aggressor’s mouth. But the more I watched, the more I was engrossed. Not so much by the fight, but by everything around the fight.

When I saw the Berlin Philharmonic this year, I thought about the complex system required to produce music of this quality. The few dozen musicians on stage are extraordinarily talented. They’re so good because the world, and especially Germany, has developed a superb pipeline of talent to staff this orchestra and others. The program was Schoenberg and Mozart, and I thought about how long it took to develop such a deep repertory of pieces that would include these two composers. I can also bring up the technologies required for the orchestra. The Berlin audience was sophisticated, and that takes time to develop too. That is a wonderful system that has gotten a lot of things right.

I had the same type of thought watching UFC as I did when I listened to the Berlin Philharmonic. UFC is an amazing spectacle, and so many things had to be developed before something of that quality could be produced. Think of Vegas, first of all, a remote city in the desert that has managed to attract people, not just for this fight, but year-round for entertainment. Second, consider all the accouterments around the fight: the seamless transitions; the interludes from Joe Rogan and Bruce Buffer, who are both talented announcers; the special effects of lighting, fog, and music, all of which combine to marvelous effect. Third, think about what it takes to market this type of event. And finally the fighters themselves, who know what they have to do to provide a good show.

It was then I felt that I grasped how outstanding the US is at producing entertainment. This is a valuable cultural competence. I don’t think there are any other countries that can develop an audience and put on so many types of high-quality shows.


I failed this year when it comes to the most important type of learning activity that I do: playing enough sessions of Avalon, my favorite board game. Kevin suggests that he’d like to promote Avalon to become the golf of tech. I want that as well, so I’ll take this chance to evangelize the game.

Avalon is made up of typically seven players: three are evil—and they know who each other are—and four are good, and they generally don’t know who anyone else is. The goal for the good people is to discover the identities of the evil people; the goal for the evil people is to insinuate themselves as good people. Everyone takes turns proposing different configurations of people to make up a team. We’ll find out if the proposed team includes any evil people, discuss the results, and engage in a total of five rounds of play.

Gameplay is simple, the dynamics are not. There are several remarkable things about Avalon. First, it’s a game that gets more interesting by playing with the same group. Usually board games stop being fun once everyone has mastered the mechanics; that’s not the case for Avalon, because the rules are few, and the game is fundamentally about trying to understand other people. I play with different groups in a few cities, and perceive a distinct hierarchy of competence. At the bottom of the hierarchy are tech people in San Francisco: they tend to misread probabilities, stick with their early impressions of people without updating their views given new information, and are worse at moving fluidly between good and evil roles. The mostly-finance crowd I play with in New York are better on every front, probably because there’s a greater role for scheming when one works at a big bank.

The very best Avalon players are mainland Chinese, who astonish me again and again with their brilliance. I’ve come to believe that merely thinking in Mandarin makes one a better Avalon player.

I’ve appreciated an analogy a friend offered about Avalon. He compares playing the game to getting into the mindset of the Enigma codebreakers (as depicted in Stephenson’s Cryptonomicon.) The Allies may have broken the codes of the Axis, but generals and admirals shouldn’t act on every piece of intelligence. Instead, they have to engage in parallel construction based on public data to maintain the enemy’s faith in his communications system. So the Allies might send surveillance planes to where the enemy is known to be, make sure that the enemy sees these planes, and engage in combat only afterwards. One is always asking: how deeply to press the information advantage, and is it possible to generate alternative explanations for success?

Avalon rewards people for being both social and deductive. Unlike Werewolf, it’s not a purely social game, in which unfounded accusations are all that anyone has to go on; nor chess, a game with perfect information. Avalon is more like poker, in which a player has to persuade with both logic and lies.

(I loved this gallery of different celestial bodies produced by the Jet Propulsion Laboratory: Visions of the Future, with a hat tip to @natfriedman. This picture of Europa makes me recall a line in my previous post: “Why have we not made it a priority to look for extraterrestrial life that might exist on our planetary doorstep, within our very own solar system? I’m volunteering right now to go on the mission that explores these oceans (of the moons of Jupiter). If I must crowdfund my way up there, I’ll offer to write the next Moby-Dick, or Twenty Thousand Leagues Under the Sea, depending of course on the nature and economic value of the monsters that dwell in those depths.”)


I have several questions.

When I cast my eye around the industrial world, I see many consolidated industries. We went from having around 20 DRAM memory chip makers in 1995 to 11 in 2008, and just 3 players today. Wide-body aircraft is a well-known duopoly made up of Boeing and Airbus. For many segments of semiconductors, there’s a single overwhelmingly dominant company or a few holders of critical IP. This list can go on. So why does so much of the popular antitrust discussion in the US focus on internet companies, which I would say for the most part are providing nearly free products to consumers? I’m not saying that the internet companies should be free from regulatory scrutiny, nor that industrial technology companies are totally free from competition. But as a first cut, I think that there are worthier tech targets for competition regulators than the internet giants.

Any sufficiently-capitalized firm is able to buy leading tools from the market to make advanced technology products. But industrial technology companies are concentrated in only a handful of rich countries. In a more extreme case, PCs and software is accessible to most people in the world, but nearly all large internet companies are based in either the US or China. Isn’t that a good case that agglomeration effects and process knowledge are important for building large companies? And should some other hard-to-measure factor be thrown into that consideration?

Michael Pettis is an optimist on Chinese contemporary culture: “the culture that is emerging out of young, urban China is vibrant, exciting, chaotic, and perhaps among the most interesting in the world.” That’s not all: “there is a positive side to this dizzying social transformation, namely the explosion of new culture emanating from China—not just on the music scene but also in literature (especially science fiction), painting and comic-book art, along with fashion and other aspects of youth culture… young Chinese artists are negotiating their complicated and confusing world with a cultural elan whose exuberance probably will be remembered and admired for hundreds of years.” Liu’s Three Body Problem has been a nice export success, but I struggle to name many other examples of Chinese cultural products being noticed abroad. Will we see an acceleration of Chinese cultural products becoming globally popular, or will most of them be confined to being displayed in Beijing, Shanghai, and Chengdu?

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How Technology Grows (a restatement of definite optimism)

I consider Definite Optimism as Human Capital to be my most creative piece. Unfortunately, it’s oblique and meandering. So I thought to write a followup to lay out its premises more directly and to offer a restatement of its ideas.

The goal of both pieces is to broaden the terms in which we discuss “technology.” Technology should be understood in three distinct forms: as processes embedded into tools (like pots, pans, and stoves); explicit instructions (like recipes); and as process knowledge, or what we can also refer to as tacit knowledge, know-how, and technical experience. Process knowledge is the kind of knowledge that’s hard to write down as an instruction. You can give someone a well-equipped kitchen and an extraordinarily detailed recipe, but unless he already has some cooking experience, we shouldn’t expect him to prepare a great dish.

I submit that we have two big biases when we talk about technology. First, we think about it too much in terms of tools and recipes, when really we should think about it more in terms of process knowledge and technical experience. Second, most of us focus too much on the digital world and not enough on the industrial world. Our obsession with the digital world has pushed our expectation of the technological future in the direction of cyberpunk dystopia; I hope instead that we can look forward to a joyful vision of the technological future, driven by advances in industry.

This is one of my longer essays; the final section summarizes the main points.

Process knowledge is represented by an experienced workforce. I’ve been studying the semiconductor industry, and that has helped to clarify my thoughts on technological innovation more broadly. It’s easy to identify all three forms of technology in the production of semiconductors: tools, instructions, and process knowledge. The three firms most responsible for executing Moore’s Law—TSMC, Intel, and Samsung—make use of each. All three companies invest north of $10 billion a year to push forward that technological frontier.

The tools and IP held by these firms are easy to observe. I think that the process knowledge they possess is even more important. The process knowledge can also be referred to as technical and industrial expertise; in the case of semiconductors, that includes knowledge of how to store wafers, how to enter a clean room, how much electric current should be used at different stages of the fab process, and countless other things. This kind of knowledge is won by experience. Anyone with detailed instructions but no experience actually fabricating chips is likely to make a mess.

I think that technology ultimately progresses because of people and the deepening of the process knowledge they possess. I view the creation of new tools and IP as certifications that we’ve accumulated process knowledge. Instead of seeing tools and IP as the ultimate ends of technological progress, I’d like to view them as milestones in the training of better scientists, engineers, and technicians.

The accumulated process knowledge plus capital allows the semiconductor companies to continue to produce ever-more sophisticated chips. The doubling of transistor density every 24 months wouldn’t be possible if these firms didn’t already possess deep pools of process knowledge. It’s not just about the tools, which any sufficiently-capitalized firm can buy; or the blueprints, which are hard to follow without experience of what went into codifying them. The US has many decades of experience in designing and fabricating semiconductors, and it has developed the talent ecosystem that succeeds in pushing Moore’s Law forward. This cluster of talent allows the US to maintain its lead on a critically-important technology.

The US industrial base has been in decline. But sustained innovation in semiconductors is an exception in US manufacturing. The country used to nurture vibrant communities of engineering practice (a term I like from Brad DeLong), which is another way to talk about the accumulated process knowledge in many segments of industry. But not all communities of engineering practice have been in good shape.

The real output of the US manufacturing sector is at a lower level than before the 2008 recession; that means that there has not been real growth in US manufacturing for an entire decade. (In fact, this measure may be too rosy—the ITIF has put forward an argument that manufacturing output measures are skewed by excessive quality adjustments in computer speeds. Take away computers, which fewer and fewer people are buying these days, and US real output in manufacturing would be meaningfully lower.) Manufacturing employment peaked in 1979 at nearly 20 million workers; it fell to 17 million in 2000, 14 million in 2008, and stands at 12 million today. The US population has grown by 40% since 1979, while the number of manufacturing workers has nearly halved.

When firms and factories go away, the accumulated process knowledge disappears too. Industrial experience, scaling expertise, and all the things that come with learning-by-doing would decay. I visited Germany earlier this year to talk to people in industry. One point Germans kept bringing up was that the US has de-industrialized itself and scattered its production networks. While Germany responded to globalization by moving up the value chain, the US manufacturing base mostly responded by abandoning production.

Brad Setser has shown that the US stands out amongst rich countries for its low level of manufactured goods exports. Call me simple-minded, but I believe that the world’s most developed country ought to be responsible for exporting goods around the world. Instead, the US runs both a trade deficit and a current account deficit. The US trade deficit is high not only because it imports a lot of goods; it’s high also because it doesn’t export very much. In order for other countries to import more from the US, first it should have better goods to sell.

Knowledge should circulate throughout the supply chain, flowing both up and down the stack. Successful industries tend to cluster into tight-knit production networks. The easiest way to appreciate the marvel of clusters is to look at Silicon Valley, where capital, academia, a large pool of eager labor, and companies both large and small sit next to each other. To any of us who have spent some time in Silicon Valley, it’s obvious that this concentration of economic linkages is part of the magic that makes the system work.

There are many other examples of industrial clusters. Taiwan’s semiconductor industry was founded and is still centered around a small industrial park south of Taipei. Silicon Valley is so-named because it was the center of semiconductor production (and it has enough toxic Superfund sites nearby to prove that heritage). It’s not just chips: autos, electronics, biotech, aviation, and machine parts all tend to be geographically clustered.

Proximity makes it easier to generate process knowledge. But what happens when we tear apart these production networks by separating design and manufacturing? Sometimes it’s no big deal, sometimes it works out great. But I believe that in most cases, dislocation makes it more difficult to maintain process knowledge.

Both the design process and production process generate useful information, and dislocation makes it difficult for that information to circulate. I think we tend to discount how much knowledge we can gain in the course of production, as well as how it should feed back into the design process. Maybe it’s easier to appreciate that with an example from computing. Arjun Narayan tells me that good software design requires a deep understanding of chips, and vice versa. The best developers are those who understand how processes interact both up and down the stack.

What happens when we stop the flow of knowledge up the stack? I think that the weakness of the US industrial robotics sector is instructive. The US has little position in making high-end precision manufacturing equipment. When it comes to factory automation systems, machine tools, robot arms, and other types of production machinery, the most advanced suppliers are in Japan, Germany, and Switzerland. I think the reason that the US has little position can be tied directly to the departure of firms from so many segments of manufacturing. How do engineers work on the design of automation systems if they don’t have exposure to industrial processes?

A quote from the article: “A report to President Barack Obama on advanced manufacturing, prepared by his council of science advisers in 2012, concluded that the ‘hard truth’ was that the U.S. lagged other rich nations on manufacturing innovation.”

I don’t see enough Americans being troubled by the idea that America isn’t making advanced industrial robots. It might be fine to think that robots will be doing all the manufacturing work in the future; but someone has to build these robots, and own the IP of advanced robotmaking, and for the most part, that someone is not the US. It can’t be an accident that the countries with the healthiest communities of engineering practice are also in the lead in designing tools for the sector. They’re able to embed knowledge into new tools, because they continue to generate process knowledge.

Let’s try to preserve process knowledge. The decline of industrial work makes it harder to accumulate process knowledge. If a state has lost most of its jobs for electrical engineers, civil engineers, or nuclear engineers, then fewer young people will enter into these fields. Technological development slows down, and it turns into a self-reinforcing cycle of decline.

I think we should try to hold on to process knowledge.

Japan’s Ise Grand Shrine is an extraordinary example in that genre. Every 20 years, caretakers completely tear down the shrine and build it anew. The wooden shrine has been rebuilt again and again for 1,200 years. Locals want to make sure that they don’t ever forget the production knowledge that goes into constructing the shrine. There’s a very clear sense that the older generation wants to teach the building techniques to the younger generation: “I will leave these duties to you next time.”

Regularly tearing down and rebuilding a wooden temple might not sound like a great use of time. But I’m not sure if local priorities are entirely screwed up here. These people understand that it’s too difficult to write down every instruction necessary for building even a single wooden structure; imagine how much more difficult it is to create instructions for a machinery part, or a chip. Every so often we discover ancient tools of which we have no idea how to use. These shrine caretakers have decided that preservation of production knowledge is important, and I find that admirable.

Building a vast industrial base and practicing learning-by-doing used to be the American way. Brad DeLong again: “When the technologies of the second industrial revolution arrived, the United States with its cotton and wide market, and its rich natural resources, and its communities of engineering excellence, was able to leap ahead—and in fact greatly surpass Britain in manufacturing productivity pretty much everywhere. So that the 20th century became an American century, rather than a second British century, in large part because of the bets Hamilton had induced the United States to make on not simply following comparative advantage.”

The future should be more than services. Isn’t manufacturing always the low value-added stuff, and that the future should be driven by services instead? I’m not so sure. I’m skeptical that we can pin all our hopes on the services sector because it tends to have two big problems: a lot of it is winner-take-all, and much of the rest is zero-sum.

One of the issues with services jobs in the US is that most of the gains are captured by very few workers. Two services sectors are enormously productive: tech and finance. But other sectors, like retail, hospitality, and food services don’t generate productivity growth quite as quickly. Therefore, while aggregate production can rise, consumption doesn’t tend to keep up. That’s because overall production gains in services are asymmetrically generated by hedge fund managers and machine learning engineers, not the hotel workers and retail staff, and these highly productive workers can only consume so much.

Another issue with a lot of service work is that much of it is zero-sum, a point made very well by Adair Turner. Too many service jobs are meant to cancel out the efforts of other service jobs, for example in litigation, where a plaintiff’s lawyer creates a job for the defendant’s lawyer. And often the zero-sumness is asymmetric: a dozen hackers make a theft, and companies everywhere subsequently need to spend collective billions on staff or contractors to protect themselves; a few criminal plague a state, and the government subsequently needs to hire hundreds of officers to make people feel safe; a few people commit accounting fraud, and the ensuing uproar forces companies and banks to ramp up the size of their compliance departments by tens of thousands in the aggregate.

There’s an entertaining line in the Brad Setser piece I linked to earlier. He tells us that one of the reasons that the US has such a high surplus in the services trade is that Americans have a low propensity to travel abroad. I don’t view that as a great way to earn a trade surplus.

My favorite genre of the Bloomberg column has become Noah Smith dunking on the United Kingdom. Services make up about 80% of the British economy, and that has brought along a host of problems. These include low levels of productivity growth over the last two decades, extraordinary vulnerability to the financial crisis, and low levels of R&D spending by its biggest companies. Matt Klein has put forward a fun claim: “Take out Greater London—the prosperity of which depends to an uncomfortable degree on a willingness to provide services to oligarchs from the Middle East and the former Soviet Union—and the UK is one of the poorest countries in Western Europe.”

One more thing on the UK: I really enjoyed Power to Compete, a book made up of the dialogue between two Japanese thinkers. (Thanks to Noah for making the recommendation.) There are many good lines, one that jumped out at me was: “If you look at the United Kingdom, I think the policy of prioritizing debating and thinking has failed them.” (I would also suggest that this liberal arts emphasis on argument turns universities into incubators of Girardian terror.)

Power to Compete is worth reading because it’s by two people who clearly recognize the problem of low growth and are serious about offering solutions. There is no attitude I find more refreshing.

How are we going to do science fiction without an industrial base? I’ve made the negative case for services; is there a positive case for industry? Yes, I think so.

The internet is important, and we’re likely still underrating its effects. But I don’t think that we should let innovation be confined entirely to the digital world, because there’s still too much left to build. The world isn’t yet developed enough that everyone has access to shelter, food, water, and energy at a low share of income. Hundreds of millions still live in extreme poverty, which means that manufacturing and logistics haven’t overcome the obstacles of delivering cheap material comfort to all.

And I submit we can’t bring ourselves to calling it the “developed” world until we’ve built so many other things. We go to work in subways built in the ‘70s, guided by signals equipment put in place in the ‘20s. We’ve been moving more slowly across the planet ever since we decommissioned the Concorde, at a time when global travelers want faster access to major hubs. Are we sure that the developed world is not undergoing its own premature deindustrialization? When people bring up that the fact that the digital world has become very fun, I tend to think that the response smacks of “Let them eat iPhones.”

I’m not saying that manufacturing has special moral worth, and I’ve previously acknowledged that much of manufacturing is unpleasant and hazardous. I’m interested in industry because I see the maintenance of an industrial base as a precondition to building the science fiction technologies of the future.

What are some of the things I’m looking for? For starters: energy too cheap to meter; colonies on Mars and beyond; re-forestization of our deserts; nanotechnology that lets us print basic materials; medical devices and pharmaceuticals that prevent, treat, or cure most ailments; a deeper understanding of materials; and so many other things. To make these all happen, we need to have the development of a lot more tools and machinery.

People who grew up during the Space Age remind us how much lower we’ve re-calibrated our technological expectations. Here’s George Dyson, son of Freeman, after watching a space tourist rocket launch from Baikonur: “When I grew up as a child, Freeman was building this spaceship that was supposed to leave in 1965 with 50 people for Mars and Saturn. The question then was whether the Americans or the Russians would take over the solar system. Here we are, 50 years later after Sputnik, and I’m watching an American pay $35 million to ride on a Soviet-era rocket into low Earth orbit.”

Let’s stay on the subject of space travel. It’s possible that there are warm oceans on the various moons of Jupiter. Why have we not made it a priority to look for extraterrestrial life that might exist on our planetary doorstep, within our very own solar system? I’m volunteering right now to go on the mission that explores these oceans. If I must crowdfund my way up there, I’ll offer to write the next Moby-Dick, or Twenty Thousand Leagues Under the Sea, depending of course on the nature and economic value of the monsters that dwell in those depths.

I acknowledge that there’s a chance that all these innovations will come. Cars are becoming self-driving, and they may even fly soon; the private space efforts look very cool indeed; Boom might be bringing back supersonic jets. But I don’t find their potential sum to be sufficiently exciting. And we may not get them all: The US hasn’t been able to create a national tolling system because it’s too difficult to ask different states to shift their transponders to the same radio frequency (even after an act of Congress required them to do so). If we can’t figure out an interoperable toll system across the states, how soon will we be able to work out the regulatory system for self-driving cars?

The US should emulate a different country. There’s a country I admire whose experiences thread together many of the themes of this piece: I think that the US should learn from Germany. I think of Germany as the country that has done the best job of nurturing its communities of engineering practice. For decades, or maybe centuries, Germany has engaged in industrial deepening.

I was there earlier this year to study its excellence in industry. I can’t claim to totally understand how the systems all work, but I can identify at least a few factors of success: academic collaboration, corporate encouragement, and a commitment to pass on skills all play a part. I’m especially struck by the attitude of older workers, who feel they have a responsibility to transfer their knowledge to younger workers. Today, German companies remain leaders in many segments of industrial technologies.

That’s not to say that everything is going great for Germany. Germany and the rest of Europe seem to have missed the bus to the digital age. It’s hard to name many European companies started in the last 30 years that are leaders in their industry; the best example I can think of is Infineon, a semiconductor spinoff from Siemens with a market cap of $30 billion, and I guess we can include Spotify, though I’m not sure if it’s really a leader. Here’s a remarkable line from the Economist: “If Ericsson and Nokia continue to shrink, only one European firm, Schneider Electric, would be left among the world’s 35 biggest tech companies by revenue.”

Germany and the US have different strengths. The former is good at industry, the latter is good at information technology. But I find it odd that each is poor at what the other is good at. There’s no principle I can discern that forces us to choose one or the other, and I’m optimistic that a country should be able to excel at both industry and the internet.

Both the US and Germany have experienced disappointing growth over the last few decades; I can identify incriminating data points for each country. In the US, rent growth in major cities have outpaced income growth; for reasons I can’t yet get my mind around, homeowners in cities like San Francisco have the ability to veto the creation of new housing stock. Who can believe that they’re able to get away with this? In Germany, more than half of all wealth is now inherited, up from 20% in the 1970s (bringing it nearly to UK levels). It seems like people have mostly given up on the idea of generating wealth by doing new things.

Here’s another issue: the US government is slowly giving up its room for fiscal maneuver. Non-defense discretionary spending made up over 60% of the federal budget in 1962. By 2017, that figure has fallen to 15%, and it’s expected to continue its decline. As that share falls, I wonder how that affects the mindset of legislators, who anticipate diminishing responsibility for allocating funds. In absolute terms, the budget they control is still enormous. But I suspect that it takes away the initiative of US politicians: they can simply let the government go on autopilot, since their predecessors have already committed most available funds. If legislators no longer have room to identify new initiatives for spending, what is there to do except find new things to ban, and then argue with the other side?

The US and Germany are innovative in different ways, and they each have big flaws. I hope they fix these flaws. I believe that we can have a country in which wealth is primarily created by new economic activity, instead of by inheritance; which builds new housing stock, instead of permitting current residents to veto construction; which has a government willing to think hard about new projects that it should initiate, instead of letting the budget run on autopilot. I don’t think that we should have to choose between industry and the internet; we can have a country that has both a vibrant industrial sector and a thriving internet sector.

Development is the only hard truth (or, the social consequences of economic growth). It’s easy to discount the benefits of economic growth if one has lived in a low-growth society for too long. Acceptance of low economic growth is the hidden premise in most commentary that I read. I consider it to be the deepest bias in American and European intellectual society today: it pervades nearly every piece of discourse, from blog posts and bestselling books to movies and pop songs. And I find no theme more radical and refreshing than generalized frustration that economic growth is way too low.

I’d like more people to consider that there are major positive consequences for high economic growth. When people have experienced a few years of high growth, they’re conditioned to expect more of it. That expectation increases risk appetites for both companies and individuals: people have seen their lives getting better in a hundred different ways in the last four decades, and they can be optimistic that more things will improve. They’d be more comfortable starting new businesses or trying on new careers, and these activities won’t even feel like risky events, because new opportunities have always been coming along.

All of this is on top of the fact that higher growth improves our capabilities to deal with various problems. If we’re accustomed to low growth, it’s more difficult to imagine a big improvement to our lives unless we can force a redistribution of wealth. But if we’ve experienced high income growth for a few decades, then it’s easier to imagine that we can make our problems go away because we keep accruing greater resources to deal with them.

It’s the same story with businesses, which can feel emboldened to expand and try new things, because they expect demand to be greater next year than today. I think that these principles are clear to companies in Silicon Valley, where executives make decisions based on their expected position in six months rather than their current position. I suspect that a history of growth also has positive effects on government policies. It encourages the government to engage in long-term planning, because legislators have seen things get better and expect greater room for maneuver.

That view is informed by Bryan Caplan’s idea trap, with which I had not been familiar when I wrote my original piece. I find Caplan’s idea compelling, and it has influenced my baseline model of the world. The countries with low growth will continue to stagnate, because economic rigidity is self-reinforcing; the countries with high growth will continue to grow, because dynamism is self-reinforcing. The latter will have optimistic people, while the former have settled into complacency.

Dystopian science fiction is the natural outcome of stagnant growth; no wonder so much of the science fiction published in the last few decades has been so bleak. What else should we expect when digital technology accelerates but nothing else does? If nicer shops and more hipster cafés are one’s only exposure to physical change, then it’s hard to imagine how the future can be radically different. On the other hand, if cities are rezoning and reinventing themselves every decade, it’s much easier to expect change.

My message to US, Japanese, and European voters is to please cast off this appalling indifference to low economic growth. It seems like you can get the electorate fired up on any political issue except for serious discussions on how to reach a sustained acceleration of GDP. How about electing leaders who can offer a plan to reach 3% GDP growth and sustain it for a few decades? Unfortunately, not even Caplan is sure about how to escape the idea trap, because he says that the only way to break out of this equilibrium is “luck.”

Optimism as a propellant of growth (or, more industry and less Twitter). Instead of waving my hands around to claim that growth comes down to luck, I’d like to wave my hands around in a different way and say that it comes down to a choice to be optimistic. I concede the circularity to the argument, because optimism is probably endogenous to growth. But I’d suggest that optimism can also be the result of proximity to industry, greater enjoyment of science fiction, and avoiding Twitter and politics.

I wish that more of us would study the ‘30s, a decade which saw the systematic application of American ingenuity to the improvement of machinery. That was a time of fantastic advances in chemicals, rubber, electrical machinery, scientific instruments, and many other things. It was a decade in which “technology” referred to advances in aviation, radios, oil recovery, cinemas, and more. How refreshing to consider that people thought that technology was accelerating on many fronts, not just a handful.

1939 was the year of the New York World’s Fair. It was an enormous production that encouraged people to imagine the promise of industrial technologies and to think about how the future will be better than the past. It’s fun to read some of the accounts of Futurama exhibit: “Sponsored by General Motors to the tune of seven million dollars, the equivalent of ninety-one million dollars today, it was the largest animated model ever built: 35,738 square feet. It required the labor of some three thousand carpenters, electricians, draftsmen, and model-makers, and the manufacture of five-hundred thousand miniature buildings varying in scale, and fifty thousand futuristic silver automobiles—ten thousand of them designed to move.”

I think that US culture took a wrong turn when we decided to make fun of plastics and subsequently to celebrate Wall Street instead. Plastics are extraordinary, but the graduates of our top schools are much more enthusiastic about joining an investment bank than to improve our mastery over materials. If we view excellent talent as a scarce resource, then I think it’s regrettable that asset management attracts so many smart young people. I’m not sure that improvements to capital allocation is the most critical accelerant of our technological civilization; on the margin, the more direct improvement probably comes from having smart people make their careers in industry.

I’d like more of us to have greater exposure to industrial processes. Let’s look more at heavy machinery, chemicals, rockets, and all the marvels of the industrial world. Would anyone else like to subscribe to a magazine on industrial goings-on? I’d like for there to be a monthly publication that features interviews of engineers in different segments of industry. We can hear about the current state of the art, how they got here, what are the current constraints, what’s coming down the pipeline, and then to speculate a bit: If we solve some of the big constraints, what kind of advances can we look forward to?

That’s all stuff I hope more of us can develop an interest in. On the margin, what should we be diverting our attention from? Easy: Twitter and politics.

I mean to tune out the angry side of Twitter. The good parts of Twitter are very good indeed, and every day I marvel at how many great links are dropped into my feed by people I follow. I tweet/retweet three things: informationally-dense pieces, interesting pictures, and good jokes. Generally I try to follow people who do the same. Occasionally the waves of angry Twitter wash up on my happy island, but it’s not frequent.

There’s an endless array of social issues to get mad about: we can argue all day on Facebook, Reddit, or Twitter, as indeed some of us do. I confess surprise at the amount of outrage that Twitter can muster over “takes.” The national sport of Twitter is to denounce columnists of the New York Times, which anyone can play from the sidelines. I submit that we don’t have to give in and let everyone know we feel that a column is trash, that the columnist is awful, and that the paper deserves censure as a whole. We should resist this tendency to think that a loud tweet has the capability to inflict devastating blows on the other side: “You get to lose your innocence only once.”

Most of us don’t need to pay attention to the day-to-day of politics, no matter how much the media is trying to convince us otherwise. Let’s turn our minds to more productive uses, like reading books and acquiring skills. One of the first things I did after the 2016 election was to cancel my subscription to the New Yorker; I’m still proud of myself for having quickly taken decisive action. Another possibility is to leave the US, as I did. I understand that this is not an option for everyone, but for some young people at least, maybe this is a good time to spend time abroad. Get out when unproductive debate is the ambient national mood, and move to a more sane environment where you can really learn something instead.

I know few people who are broadly curious about the material world and industrial technologies. I hope that we can turn our minds towards studying them, at the expense of paying attention to politics.

People with the right priorities. In my previous post, I cited Neal Stephenson’s ideas extensively. His novels stress the importance of the material world; and he believes in the capacity of science fiction to inspire optimism. I find that Matt Levine is another writer who has a clear sense of the limits of digital technologies. His newsletters feature many examples of how the real world is a mess, and that it can’t be dealt with entirely as a financial or digital abstraction.

Here are a few other people I want to highlight as having the right priorities. They each played some role in helping to build out the digital world. After they put in that work, they mostly switched their attention to improving the material world.

Bill Gates. What did the co-founder of Microsoft decide to focus his energy on after he left the company? Not computers, the internet, or mobile. Instead, it’s philanthropy, with an emphasis on health, education, and energy. He thought that there were enough people working on the digital world, and that he (and his capital) should mostly try to improve the material world instead.

Freeman Dyson has a wild imagination, and usually his crazy ideas have nothing to do with the digital world. There has never been a Dyson interview that I haven’t enjoyed reading. Here’s one of his early projects: “We decided we would go around the solar system with a spaceship driven by nuclear bombs. We would launch the ship into space — ‘bomb, bomb, bomb, bomb,’ about four bombs per second — going up all the way to Mars and then afterwards to Jupiter and Saturn, and we intended to go ourselves.”

Andy Grove. The former Intel CEO became a vocal advocate for American manufacturing in his later years. He laid out his case in a 2010 Bloomberg Businessweek essay. I’ll just lay out the most bare of summaries here: Grove was skeptical that startups can provide a large number of jobs; that the US should focus on scaling up the startups into big companies; and that when the US exports jobs, it also exports innovative capacity and scaling expertise. In other words, he lamented the loss of process knowledge. He recognizes that when manufacturing jobs left the US, “we broke the chain of experience that is so important in technological innovation.”

Here’s more from Grove: “Our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home. Without scaling, we don’t just lose jobs—we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.”

Grove ended his essay with a call to rebuild the US industrial commons; or as I would put it, to regain the pools of process knowledge. A lot of this piece is driven by what I’ve been learning about the semiconductor industry, and I find it heartening to discover that one of the industry’s most important figures thought in similar terms. I’m happy to flag that the ideas of Andy Grove, Tyler Cowen, and Peter Thiel are the driving forces behind this essay.

Does better capital allocation always lead to technological acceleration? I don’t think so. In fact, I would argue that some of the responsibility for the loss of process knowledge can be attributed to the US financial sector, consisting of both investors and financial analysts, with its emphasis on return on capital. (This is also something that Andy Grove brought up.)

My fundamental argument is that technology ultimately progresses because of people, and in particular the amount of process knowledge they’ve managed to accumulate. In my opinion, the US financial sector has underappreciated how important it is to have a deep pool of technically-experienced workers. It’s certainly much easier to identify and measure the stock of tools and IP instead of process knowledge, which exists in people’s heads. As a result, investors and financial analysts have systematically rewarded the firms that are most eager to reduce headcount, which they see as a cost. But just because we can’t straightforwardly measure process knowledge doesn’t mean that we should dismiss its existence.

I believe that tools and IP are the natural consequence of developing process knowledge. The opposite sequence, however, doesn’t hold: merely having a large stock of tools and IP is no guarantee that we can create more of them. Thus I’m nervous about the loss of process knowledge, and admire countries like Germany and Japan that have kept up the health of their communities of engineering practice.

What are some challenges to these views? I’d like to preserve process knowledge, because I think it’s important for growth and to build the industrial technologies of the future. I also acknowledge that there are many challenges to my argument. Here are a few I find most interesting.

The number of German manufacturing workers has also been in decline. Yes, the number of German manufacturing employees has also been falling (see the statistics, and the chart in this Brad DeLong piece). Doesn’t that suggest that my favored country also hasn’t preserved its communities of engineering practice? I would cite a few things to say that it has preserved them. First, while real output of manufacturing in the US is still at a lower level than in 2008, German real manufacturing output has significantly surpassed its pre-recession levels and has returned to its long-run growth trend. And if we take a look at the sectors that have experienced job losses, we can see that they’re concentrated in lower-value sectors like mining and textile production; over the last decade, Germany has gained employment in higher-value sectors like chemicals, autos, machinery, and electrical equipment. Digging into the data makes me more confident in my claim that Germany reacted to globalization in the correct way, by shedding jobs that aren’t likely to make big gains in process knowledge, and continuing to move up the value chain.

Dematerialization. I remember reading a post by Scott Sumner outlining all the ways that we’re no longer interested in physical things. Sumner is prolific and I can’t find the post anymore; I just remember that he offered many examples in which young people have become more interested in experiences than in owning stuff. (If anyone can email that post to me, I’d be happy to link to it here. Update: The post is here.) If it’s really the case that we’re more interested in establishing status through going to concerts and on exotic vacations, then it’s possible that we won’t have the aggregate demand required to sustain a growing industrial base.

Has most process knowledge already been embedded into tools? One of the best essays I read recently is by Willy Shih, who argues for the affirmative. I recommend reading the whole thing, that essay is one of the prompts for this piece. I’m not sure if it’s easy to cite any aggregate statistics to try to refute it, but I can gesture at a few things. I don’t think it’s the case yet that everyone is effectively able to use the latest tools; we see that companies in semiconductors, aviation, and the internet are mostly concentrated in a few countries. Relatedly, income between countries has continued to diverge even though any sufficiently-capitalized firm can buy the same advanced machinery. These facts suggest that some countries are using tools more effectively than others, probably because they have more process knowledge.

I’m happy to acknowledge that there are many more challenges that I haven’t laid out. I’m not saying that I’ve figured out which industries should be better developed and when to let an unproductive industry go. It’s probably wrong to be critical about rational business decisions if I feel that they get rid of process knowledge. The thrust of my piece is to ask more people to consider how process knowledge grows and to suggest that we should be pushing forward the technological frontier on many more fronts.

There’s more cool artwork of space colonies from the Nasa Ames Research Center.

Definite optimism as human capital. I want to tie this piece off by returning to semiconductors. I believe that technological progress is not inevitable, and that we have agency on how hard to push it forward. A doubling of transistor density every 24 months is not some foreordained natural law, gifted to us through heavenly benevolence. That sort of progress doesn’t happen unless we put a bit of thought into it. Moore’s Law is not a promise, but a challenge, and we’ve met it pretty well so far.

One day, we can throw up our hands and declare that we’ve had enough innovation in semiconductors. “The future is in services instead, not in this kind of toxic manufacturing work.” We can fire all the nerds, throw out all their books, and shut down all these fabs. Let’s say it takes a few years for us to come back to our senses. When we subsequently want to revive the industry, it may not be as simple as plugging in the machines, blowing the dust off of the blueprints, and then happily expect production to resume at prior levels. The hard-won process knowledge held by these engineers will have decayed, and the workers will have to relearn a bunch of things.

I think this decay in process knowledge has happened to a lot of industries. That’s not exactly the case in Germany (although it has its own problems). When I talked to Germans about industry, they declared that they’re vigilant against de-industrialization. They say that engineering is a part of the German identity, and they’re not likely to let go of that very easily. I find that a wonderful thing to believe in. Let’s take a look again at the UK, which seems to have made a conscious decision that it will no longer do industry: “Van Reenen determined that British firms had lagging R&D investment across most of the country’s industrial sectors. This decline was compounded by a significant withdrawal of government support for R&D in the 1980s.” It’s easy to let industry decline if we want it to.

I wish that more of us would study production networks. That means thinking more in terms of systems. Healthy ecosystems are hard to maintain, but if you build them up and continue to inject vitality into them, they deliver sustained breakthroughs. These types of production systems can be grasped well enough by people in service sectors like tech and law; I hope that we can consider the industrial base in those terms as well.

I don’t contend that the internet is anything but amazing. But I think that the marvels of the digital world have made it harder to see how slowly everything else has moved. Many segments of technology have made cautious progress, and we neglect to see that because our phones engross us so. Our apps keep getting better while our physical world is mostly stagnant; I think that the wonders of consumer internet have deluded us on how contingent our technological foundations have been.

Here’s Peter Thiel: “The first step is to understand where we are. We’ve spent 40 years wandering in the desert, and we think that it’s an enchanted forest. If we’re to find a way out of this desert and into the future, the first step is to see that we’ve been in a desert.”

One of the possible consequences is that much of the science fiction published in the last few decades veer towards cyberpunk dystopia. (The Three Body Problem is an exception.) We don’t see much change in the physical landscape of our cities, and instead we get a proliferation of sensors, information, and screens. By contrast, the science fiction of the ‘50s and ‘60s were much more optimistic. That was the space age, a time when we were busy reshaping our physical world, and by which point the industrial achievements of the ‘30s had made themselves obvious. Industrial deepening leads to science fiction that is optimistic, while digital proliferation pushes it towards dystopia.

The Futurama exhibit at the 1939 World’s Fair was enormously popular: people thought that the science fiction technologies of the exhibit really would come along by 1960. But people subsequently began to lower their expectations. Here’s an excerpt from the book about technology in the ‘30s: “A quarter-century later, GM tried to replicate its earlier success with a new Futurama, looking forward another quarter century and beyond… It was unable to capture the popular imagination, and its forecasts of the future have proved far off the mark. The contrasting receptions of these two similarly titled exhibits are consistent with what the aggregate and sectoral data are trying to tell us.”

I’d like for us to return to optimism. It’s not enough to tell everyone: “Just choose to be optimistic.” Instead, I’m suggesting that we can nurture optimism by developing a greater appreciation for industry and by reaching for higher economic growth. Pushing forward the technological frontier should not simply be someone else’s problem. Instead, the question of how to do so should preoccupy many more of us.
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Imperial history and classical aesthetics

I’ve mostly been resisting reading Chinese imperial history, for two reasons.

The smaller reason first: a lot of it is made up. Conquering dynasties tended to burn the records and rewrite the history of the previous dynasty. So it’s hard to tell how much we’re reading is anti-Yuan and pro-Ming rhetoric, or pro-Shu and anti-Wei rhetoric. Cao Cao was a great poet and general; even when we all know that he was the target of absurd libels, everyone still loves to hate him.

The more important reason: China did not trigger its own industrial revolution. The first imperial dynasty was established 2,000 years ago, and the civilization has something like 5,000 years of recorded history. Did life change much for the average person throughout most of that time?

Not really. Dynasties came and went, but the lives of most people changed little throughout millennia. The overwhelming majority of people earned a meager living by farming their small plot of land throughout the entirety of their short lives, just as their ancestors had done and as their descendants would continue to do. Some people would move to settle new lands; some people would be conscripted to fight enemies; some people would die in bouts of famine, disaster, or warfare. These are typical misfortunes that have afflicted people everywhere in the world.

The richer parts of China developed an impressive commercial culture and a sophisticated economy in arts and crafts. But given the lack of sustained industrialization, these offered only marginal improvements in overall living standards. I read somewhere that the populations of Nanjing, Suzhou, Beijing, and a few other cities had not grown from the Song to the Qing, a 1,000 year interval. Isn’t it astonishing that such a thing is even plausible? It makes clear the fact that the imperial era never really broke out of Malthusian dynamics: cities couldn’t keep growing because they weren’t raising productivity. Urban areas couldn’t generate sufficient surpluses to allow more people to leave farms, so all population growth comes from the opening of new farmland.

The lack of intense industrialization really until the 20th century is the best case I can make for ignoring imperial history. I much prefer reading about Germany, which offers such thrilling growth stories in sectors like chemicals and steel. History is always more interesting if it’s accompanied by the rise of companies, like BASF, Siemens, and Krupp.

After some investigation, my view has shifted somewhat. Mostly I hold on to the idea that learning about the dynasties is not terribly worthwhile, for exactly the reason I outline above. But I’ve been able to define a few narrower questions I find interesting and important to pursue. They’re driven by my thought that the study of imperial history is the study of innovations in social governance and political economy.


There are many obviously interesting questions. For example: How did the country manage to get so big early on? How did state capacity evolve over all this time? How did it mostly hang together throughout millennia? There is plenty of scholarly treatment of these questions, mine are of more narrow personal interest.

As usual for my site, I don’t pretend that what I write here can be anything other than my own idiosyncratic views. I’m happy to proclaim on these and many other questions that I’m fundamentally ignorant, that I lack a grasp of the bigger picture, and that there are severe, critical gaps in my knowledge. With that disclaimer, here are some questions I find interesting.

How did the north keep the seat of power when the center of population moved south?

Until the previous millennium, China had mostly been a plains-based civilization of the north; to see how far north, look at the ancient capitals of Chang’an (Xi’an) and Luoyang, as well as the present-day capital of Beijing. It wasn’t until the Sui and Tang dynasties that the state seriously began to open up the south, by undertaking major drainage projects to transform the Jiangnan and Lingnan from swamp into farmland. Once it did so, people filled these areas up quickly, because these regions have more reliable rainfall than the north. Soon, their cities had become the cultural and fiscal centers of the empire. Hangzhou and Suzhou developed vibrant commercial systems and became richer than the north, which suffered chronic grain shortages.

And yet, aside from a few brief exceptions, China has always been governed from the north. Why this persistent divergence between the political and fiscal centers of the empire, even after a few dynastic cycles? Couldn’t southerners also raise horses? It seems like Germany is not the only country to have been ruled by its Prussia instead of by its Rhineland.

What should we infer from the sophistication of many regional cuisines?

If we accept the work of Kenneth Pomeranz, the Yangzi delta was about as rich as England and Holland by as late as 1800. Whereas the Yangzi delta and Pearl delta generated two of China’s greatest cuisines, can we say that the English and the Dutch did the same for Europe? We can let the other Europeans decide this one.

In my own opinion, there are about five great cuisines of Europe; and that figure approaches a dozen in China. (I hope the relative numbers here sound reasonable; if you disagree, let’s organize a culinary tour to settle this question.) Is there anything to infer from the idea that China has produced so many distinct and excellent regional cuisines?

Consider only noodles, of the kind we find for US$2 or $3 a bowl in small shops all over the country. They’re distinct in terms of taste, mouthfeel, and broth/sauce intensity. The noodles of Chongqing are tangy, in a soup so spicy it alters one’s auditory capacity; they’re different from the noodles of Guangzhou, chewy in spite of their extraordinary thinness, served in the lightest broth of them all; which are different from the noodles of Lanzhou, hand pulled, served with slices of beef and radish in savory soup; which are different from the noodles of Wuhan, which are coated with a slightly sweet sesame sauce; which are different from the noodles of Kunming, which are made of rice; and they’re perhaps most perfect in Xi’an, where they’re thick and can come in wide strips, slathered in different meat sauces.

How well do we feel that we understand imperial governance?

The Manchus bureaucratized themselves in the shape of the Ming before they successfully overran the empire. Chinggis Khan did the same with Mongolian tribes before he took on the Song. Each felt there was something to learn from imperial governance.

I’d like to read some comprehensive evaluations of the tactics of governance. I can find plenty of novel developments, like traveling circuits of censors, strategic grants of the salt monopoly, reliance on rites as a source of legitimacy, this list can go on and on. But I don’t really have a grasp of which governance methods were important and why. Which conditions prompted their emergence? How do we evaluate how effective they were? We hear a lot about the imperial examinations and rule by eunuchs; do we feel we understand these systems pretty well at each point in time?

How effective was the Great Wall?

We know that the wall was breached. And it was not fully contiguous, so invaders could simply ride around the fragments. But is it possible that it worked fairly well for most of its history? Even if it wasn’t effective 100% of the time, perhaps it was salient enough of a deterrent to push all but the most determined invaders out of the core of the country, and into Central Asia.

What did the various regions specialize in at different times?

The north, the east, the southeast, the central region, and the southwest all feel like places with distinct cultures. I know that there’s some literature on these macroregions. I’m interested in learning more about their relative status over time. What did each region specialize in to generate wealth? What was their relationship with the central government in different periods? How does economic geography shape their respective cultures? Was there any reason that Hunan cuisine must be spicy while Jiangnan cuisine should not be?

How did Korea remain independent?

It’s easy to look at a map of the Iberian peninsula and wonder how Portugal remained separate from Spain. If you’ve ever wondered that, it’s even more striking that Korea managed to remain separate from China. That’s especially the case since China’s capital has almost always been in the north; the state has managed to conquer peoples far to the west, southwest, and southeast without absorbing Korea. One Sui emperor invaded Korea four times, in what became a personal obsession that led to the downfall of his dynasty, so it’s pretty impressive that the peninsula has managed to hold out.

What can we infer from excellence in arts and crafts?

What should we infer from good craftsmanship, in porcelain, silks, and other fine goods? Anything other than “They were good at making porcelain, silks, etc.?”

How did the Ming hold on to power for so long?

Severe climate volatility disrupted European politics, prompted improbable invasions, and triggered accusations of witchcraft all over the continent. And yet the Ming managed to endure extensive weather volatility, which brought multiple famines and floods, before it was finally overrun by the Manchus. How did it manage to persist for so long?

Come to think of it, this isn’t the right question, because we should be asking it of every dynasty. How did the Tang, Song, Southern Song, Yuan, Ming, and Qing each endure as long as they did? Each of them faced vast challenges. Consider the Qing. It managed to hold on to power for half a century after an apocalyptic band of religious fanatics occupied the fiscal center of the country, coinciding simultaneously with a foreign invasion led by gunboats.

Even the mighty Tang had trouble facing down huge threats, from Turkic peoples, Tibetans, Khitans, the Nanzhao Kingdom, to say nothing of a catastrophic internal rebellion. Song persisted under even more severe conditions. Each of these dynasties lasted a surprisingly long time given the scale of the challenges they had to face.


Some of these questions should be easy to Google and answer. Right now I’m resisting doing the easy thing, because I want to come across them more naturally through books and papers. I think it’s useful to record the questions one has as an amateur, and not be too bothered about getting them right away.

I think that the educated person should know the broad strokes of Chinese history. And that it’s fine to stop after acquiring some of the basic knowledge, because it’s not terribly profitable unless one wishes to become a specialist. The value I personally get from reading imperial history is that the knowledge enriches my visits to different cities. If I were not regularly traveling to China, I’d be focusing most of my energies on reading pre-1930s German history.

My overall thought is that there’s not high value in reading Chinese history unless one is eager to learn about governance and political economy. If so, the history there is very rich indeed. Have you ever wondered what would happen if the state imposed military service in perpetuity, so that every generation of descendants has to serve? Well, let’s look at how well that worked out in the Ming. Imperial history is a rich mine for information on how a state imposes order, how it spreads ideology, and how it renews itself after a crisis. But if these don’t sound like interesting questions, then go read about other places instead.

I’m most interested in the works of three contemporary scholars on these questions: Mark Koyama, Debin Ma, and Kenneth Pomeranz. I haven’t yet read much of Fukuyama’s work, it’s on my list to study.


Now is a good time to discuss one of my favorite recent essays: The Chinese Attitude Towards the Past, by Simon Leys, which can be read in its entirety here. (Actually my entire essay was originally triggered by this piece, and what I am trying to do here is merely to provide a comment to it.)

It’s difficult to find evidence of historical monuments in Chinese cities today. Most large Chinese cities look similar in the same ugly way, with big apartment blocks, wide avenues, concrete everywhere. How is it that the splendid cities of the past have all been reduced to such dreadful streets and buildings? Contrast that mess with the well-preserved cities of Europe, which have kept the churches, monuments, and sometimes even whole streets in as marvelous conditions as when they were first built.

Disregard of the material past is a tragedy for the modern traveler. What did the Tang capitals of Chang’an and Luoyang look like? We have to use our imaginations and be guided by the texts, for these cities offer very little guidance when we examine them today. But Leys argues that this failure to maintain historical monuments is in fact a sign of vitality: “The past which continues to animate Chinese life in so many striking, unexpected, or subtle ways, seems to inhabit the people rather than the bricks and stones. The Chinese past is both spiritually active and physically invisible.”

My heart trembles with nervousness whenever an essayist invokes geist. But perhaps Leys is on to something here, and instead of trying to grasp Chinese history by seeing, we ought instead do so by listening.

How good are monuments as guides to the past, really? Perhaps very little at all, and the continuation of intangible traditions is more valuable instead. Most Chinese know the same sets of stories and parables everyone is told growing up; the actions we see in paintings and read in books follow a logic that still makes sense; I’m personally struck that I’m familiar with the characters in centuries-old scrolls, unchanged throughout millennia.

Instead of building magnificent pyramids and cathedrals out of stone, Chinese have accepted that time wears down all structures. Eternity can inhabit not the building but the spirit. Thus, in addition to mostly neglecting to maintain structures, Chinese have been extraordinarily active in burning, vandalizing, and utterly destroying the material heritage of their past.

I like Leys’ thought that the physical existence of any object is beside the point once we’ve elevated it into an idea expressed through a poem or a painting. He cites a Ming essay pondering the necessity of gardens: Many famous gardens of the past exist no more but in literary form; given how perishable gardens are, why not skip the fragile stage of actual existence, and go straight to the permanence of literary existence? Millennia later, words are all that we can hope to pass on.

It’s tempting to associate Europe’s intense efforts to preserve old buildings with its current economic malaise. That feels facile, and the connection is from me, not Leys. Having spent some time living both in Europe and Asia, I have to say that the nice cities of Europe feel much too nice. Perhaps on the margin, Europe can use a bit of Chinese disregard of its material heritage, so that it has to think about how it will build the future. There’s no end of old stuff to preserve if one wants to, and eventually we wouldn’t be able to have room for anything else at all, so why not focus our efforts on phasing out the old to bring on the new?

One final note on this topic: I’ve already conceded the point that most parts of large Chinese cities look alike. But there’s one aspect of intangible culture that is different in each region: food. The ingredients and the methods of cooking are different and combine in mostly wonderful ways; see my notes above on noodles.


I find the most brilliant of Leys’ essays to be the one on calligraphy: “Poetry and Painting: Aspects of Chinese Classical Aesthetics.” Unfortunately I cannot find a copy online, you’ll have to purchase his set of collected essays: The Hall of Uselessness. It’s an excellent guide to taste in Chinese aesthetics.

I find paintings to be the easiest entry point into Chinese high culture. Previously I’ve found paintings boring, now I seek them out. There’s a great deal of feeling in the restrained use of the brush; some of the most compelling scenes are ones with large patches of blank space, with brushstrokes not even especially fine. I’ve come to see that it is precisely the restraint that shows evidence of great feeling… how delicate each brushstroke feels when we compare them to European paintings, which tend to have such heavy oils ladened on the canvas. I find Chinese paintings to go along well with the type of melancholy framed by Laszlo Foldenyi.

No longer do I find it a mystery that the chief art critic of the Times once wrote: “There is no art in the world more passionate than Chinese painting. Beneath its fine-boned brush strokes, ethereal ink washes and subtle mineral tints flow feelings and ideas as turbulent as those in any Courbet nude or Baroque Crucifixion.”

If painting is not your thing, I suggest looking at porcelain. The best works from the Ming and the Qing are very fine, and one needs only to gaze closely to appreciate their details and sheen. I find the blue and white Ming ceramics to be pretty boring. Instead, I like to look for bolder colors, as well as the pure white porcelain from Dehua, which look almost like they’re made of white jade. My two favorite ceramics exhibits are at the Asian Civilizations Museum and the Shanghai Museum, I believe both are permanent exhibitions.

The deepest art is calligraphy, and that remains mostly beyond me. I can sense only the faintest glimmers of intense feeling behind the strokes, and I haven’t practiced it enough to sense that more strongly.


Zhu Da, 1626-1705, drew nice fish and birds.

The best set of books on imperial history is the one edited by Timothy Brooks, via HUP. My favorite is the one on the Yuan and Ming, written by Brooks himself. Not only is it good history, it’s marvelously written, and organized in a very clever way.

I want to conclude by switching gears. Instead of telling me what I should know about imperial history, I wish to solicit suggestions for something different: Japanese industrial policy in the latter half of the 20th century. Japan was a trailblazer. It had some astonishing successes, but also a lot of failures. Let’s say I’m familiar with Chalmers Johnson’s book on MITI. What are the books and papers I should be reading instead?

(Thanks to RM, WFY, PYZ, SC, and CS for some discussions on the history.)

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2017 Letter

I thought to write a post on some of the things I’ve learned in the past year, along with some recommendations on what you should see and read.

Here’s a general principle I’d like to put forward: That learning, broadly defined, ought to accelerate over time. It’s an analytical error to analogize the growth rate of knowledge (and I’m going to be vague about this) to something like the growth rate of a country’s GDP. Instead of expecting it to slow over time, we should spend our days trying to accelerate the growth of our knowledge base.

My observation is that most people expect learning to decelerate. It’s not uncommon to see this attitude among fresh college grads: “I’m done with school and it’s time to join the workforce so that it’s time to implement all the stuff I’ve learned.” They tend to tie learning together with being forced to read books and attend lectures, and since they no longer need to do these things, therefore they don’t have to keep learning. The result is that they more or less lose interest in improvement.

Countries generally can’t maintain high growth rates, but that doesn’t equally have to affect individuals. I’d like for people to think in different terms. The world is big enough, and any individual is small enough, that we can accelerate learning over time. And I submit that positive belief that this claim is true would make it so.

Let me try to justify this in some theoretic terms.

  • Network effects. Learning more facts increases the value of the facts that one already knows. In other words, learning a new fact can increase the value of older facts you know. When you know more, you can identify a greater number of themes and form new theses. At certain levels of abstraction, you feel that you’re able to form novel insights, that things you didn’t previously understand have moved within your grasp, that a point you dismissed previously as mundane is in fact quite deep.
  • Positive returns to scale. The more you learn, the easier it is to learn. You can start skipping over stuff you’ve read before, because you’re familiar with the ideas or the methods of argument. (Do we still need to read that paragraph explaining, say, comparative advantage?) Thus one skips over the familiar stuff to get straight to the unfamiliar ideas.

Okay, maybe these are saying the same thing: they boil down to a claim that knowledge can compound. I’d like for us to think more about how to accelerate the growth of learning. The traditional method of reading more books and trying to improve professionally are good starts, but it’s not enough to stop there. One can learn more by traveling to new places, being social in different ways, reading new types of books, changing jobs or professions, moving to a new place, by doing better and by doing more. Writing stuff out and putting ideas out there helps too, and I wish that my friends wrote more.


Speaking of writing, I regret to have posted only six essays in 2017. It’s a low figure and I wish to do better. On the other hand, I’m pleased that each of them made some small impact in a few circles; more importantly, overall I’ve been pretty happy with their quality.

My two best pieces have been Definite Optimism, a proposal for developing a concrete vision of the future, as well as the importance of maintaining an industrial base; and Girardian Terror, which describes the problems that come from focusing our gaze on each other, instead of matters of the world. I’m delighted that Definite Optimism became my most well-read piece of the year. I don’t often write from the left, and I was pleasantly surprised that the packaging didn’t detract from the message.

It’s only this year that I feel that my posts have started to develop greater forward and backward linkages. That is to say, instead of most posts being idiosyncratic and unrelated to each other, more of them are cohering together into themes. Some people have remarked negatively upon the length of my posts. But there’s a way to think of them as very short indeed. I break my posts into sections, marked by asterisks, and I’d like to think they’re all modular upon my overall thought. While posts may look like they’re organized under distinct titles, my hope is that each individual section is a fractal for all my other views.

I kicked off the year with a piece on what I find so bizarre about California, and I present there a framework for viewing the world. My review of The Complacent Class has a lot to do with my review of the Three Body Problem, which makes sense since both are commentary about China. Why so few people major in computer science was the second most read piece of the year. Girardian Terror coalesced various themes of this site since its beginning, while Definite Optimism is commentary on my change in perspective since I moved from New York to Asia.

One should never be all that explicit when writing on the internet, so I’ll stay silent on the implications of my Girard and California pieces. I’m happy however to bring out a few questions I’d like more people to consider from my definite optimism post:

1. Why not let’s ask for the US to reach and sustain 3 percent GDP growth by 2020?

2. Are we sure that rich countries aren’t themselves suffering their own premature deindustrialization?

3. Why don’t we focus more on developing the developed world?

Certainly I wish to write more than six pieces a year. But I have to contend with the fact that I have a full-time job after all, and writing essays here is supposed to be for fun. (I don’t make much income from this site, nor do I ever intend to.) And while I wish I wrote shorter posts more often, much of my quick writing has moved to email correspondence with friends, so these posts end up more as polished final products rather than spontaneous thoughts. It’s the wrong tendency, I admit, for the blogosphere. But I think these kinds of thought-out posts work better for me, and therefore I won’t make any promises of higher output this year.


It’s time to talk about books.

Most people don’t have a very high-level understanding of the mechanics of China’s economy, generally speaking. You can be part of the solution and not part of the problem by picking up Arthur Kroeber’s book, China’s Economy: What Everyone Needs to Know. It offers an overview of the main drivers of the world’s second-largest economy, including the property cycle, urbanization, the fiscal system, industry and exports, demographics, and more. (I should note at this point that I’m biased because Arthur is the head of research at my firm.)

I reviewed two books in these pages this year that I’m happy to recommend again. Liu Cixin’s The Three Body Problem series, and Tyler Cowen’s The Complacent Class. If Three Body Problem is not your cup of science fiction tea, then I’m also happy to recommend Seveneves and Snow Crash, which I read back to back this year. (Though if you haven’t yet read Cryptonomicon, I say pick that up first.)

Much of my reading has been China-focused recently. I enjoyed Autumn in the Heavenly Kingdom, not only because its title is sublime; although it’s not really conceptually driven, it reads quickly, almost as if it were a novel. Unlikely Partners, by Julian Gewirtz, gives a good sense of how post-reform policymaking happened: through extensive arguments by different factions trying to hammer out a written document, which becomes policy for all. I’m enjoying making my way through the HUP series History of Imperial China, edited by Timothy Brook. They’re good because they’re more conceptually driven than chronologically so. (Thanks to Simon Cartledge for lending me all six books in the series.)

The most Chinese book I read this year was Buddenbrooks, by Thomas Man. It opens with the virtuous head of a merchant family, and then moves on to his more carefree and less competent descendants, who fritter away the family’s fortune and good name. It’s shirtsleeves to shirtsleeves in four generations, culminating in death induced by typhoid. I thought it took great daring by the author to set the novel in Lübeck and Hamburg instead of Hangzhou or Beijing, but it worked well. By the way, I found Buddenbrooks to be much more easygoing and enjoyable than The Magic Mountain.

Two nonfiction books:

The Second World Wars, by Victor David Hanson. At some point one has to stop reading books about that war, and for me this about does it. The book is less about individual battle scenes and generalship; instead it’s a case for why the Allies had to win, based on a better grasp of strategy as well as far greater capacity for industry.

How Asia Works, by Joe Studwell. It’s the best story of the East Asian economic miracle. Should you meet anyone who doubts that this subject is worth studying, I suggest responding with this quote: “Whereas Hegel saw the 19th century Prussian state as a manifestation of God’s will in history, I am assigning a comparable (but secular) place of importance to the East Asian economic miracles. The word ‘miracle’ truly does apply.”

In a sense, the best nonfiction I read this year was the Financial Times. It’s only this year that I finally had a subscription to the FT, and I wish I signed up years ago. Its culture section is excellent, and I feel that it delivers the most intelligent way to approach news. I like its tech coverage a great deal too, and I’d recommend my Silicon Valley friends to take a look; it most consistently focuses on the things that matter.

I didn’t do a great deal of fiction in 2017, and I intend to remedy that in 2018. I had wished to re-read the Proust series, but failed to finish. One piece of good news is that the second half of the new Penguin translations ought to be released in the US this year, so that fresh translation will provide an impetus.


I watched only a single TV show this year, which I really enjoyed: Big Little Lies on HBO. The shots are beautiful and the drama is compelling; it was a significant inspiration for my piece on Girard. I regret to have mostly ignored TV as a creative stimulus this year, and concede that my imaginative capacity has possibly suffered as a result.

The very best movie I watched this year was The Florida Project, so good I saw it in theaters twice. The premise: Motels outside Disneyland in Orlando are pretty cheap, and they take on more or less permanent guests, most of whom don’t have very good jobs. And that’s all I’ll say. Some parts were really funny, some other parts were very moving, do try to go. (I thank Eugene Wei, without whom I would not have heard about this movie, for taking me to see it.)

Three other movies of note:

Mountains May Depart, Jia Zhangke. I’d say that this is now my favorite Chinese movie. It and Autumn in the Heavenly Kingdom have the best names in this post.

Toni Erdmann, Maren Ade. It’s terribly uncomfortable, and that’s part of the humor. At other times it’s very sad indeed. The magic of both Toni Erdmann and The Florida Project is that they make one sit very still in the theater, transfixed, with no idea how the current scene will resolve, nor what the next scene will bring.

Youth, Feng Xiaogang. This is straightforwardly a propaganda film. I say it’s worth watching for what Chinese reminisce about, and its production values are higher than most propaganda films out there. Its first minute is quite good, you can watch a Youtube clip here.


A question I like to ask when I travel: “What would I be like if I grew up here? Would I be very different if I spent my childhood here rather than in Kunming, Ottawa, and Philly?” I find that asking it prompts better thoughts, and it encourages me to be more observant of the things around me.

One good thing about Hong Kong is that it’s very easy to leave Hong Kong. I don’t merely mean that the airport infrastructure is set up very well here; about half of humanity is within a six hour flight of this city. This year, I had the chance to visit every part of the Sinosphere (or places where people are majority Chinese): I live in Hong Kong, and I’ve visited mainland China, Macau, Taiwan, Vancouver, and Singapore.

There’s fantastic variety to these places. Singapore is a remarkable city, and it takes only one visit to see that. Out of all these places, I had the most fun in Taipei, which I found to be the place best optimized for eating and leisure. Macau certainly does the latter, but to proportions that approach the grotesque, while meal for meal, nothing beats the inventiveness of Taiwan.

My favorite travel experience was in China itself. It’s so easy to find accounts extolling holidays in places like Japan, Thailand, or Bali. They’re easy to appreciate, either because of their natural endowments or because they’re already so good at catering to tourists. I’d argue however that China delivers the most rewarding travel experience of all, precisely because there are so many weird frictions.

I submit that really every part of China is worth seeing, not just Shenzhen, Shanghai, and Beijing. Sichuan, Guizhou, and Yunnan are very different from Guangdong and Fujian, which are not at all the same as Heilongjiang, Jilin, and Liaoning, which are so distinct from the Jiangnan, and on and on, to say nothing of the far west. Each Chinese province has roughly the population of a large EU country; there may not be as many differences between each province as there are between European countries, but they’re still huge.

One can’t so easily find accounts of how much fun it is to travel around China. Those who haven’t ventured far beyond Shenzhen, Shanghai, and Beijing underestimate the sheer number of totally random stuff that happens to you. In stores, traffic, restaurants, and on the streets, I regularly come across behaviors and fixtures that I had no idea were a thing. You might be driving along miles of farmland, when suddenly a massive high-tech factory with the logo of a well-known foreign company looms up on the horizon; in a restaurant, I was asked one time to help with the cooking because chefs had to go out to buy more ingredients; you never know who might come up to you and tell you an interesting story. The lack of professionalism in nearly all things is sometimes frustrating but mostly hilarious.

There are many interesting stories from Chinese that we’ll never know. That’s true not only because in general we won’t know most interesting stories, not even in a single city block, but it’s especially the case in China, which has seen intense changes but few records. Most people who grew up through 1979 have had some extreme experiences, both happy and unhappy, and I wish that more of their stories can be recorded for posterity. A secular version of a monastery, say, supporting scholars whose sole jobs are to take down oral histories from ordinary people.

Here’s something underreported: how good the consumer experience is today in most of Asia. Retail and restaurant marketers should come over to Shenzhen, Singapore, Taipei, Seoul, and Tokyo to see how sophisticated the consumer experiences are for young people. These stores make shopping and eating a fun experience, with their combination of good service, fun stuff to do while you wait, and inventive new foods.


This year, my taste in music veered toward the conventional. I’ve found myself listening to a great deal of Beethoven, especially the third symphony—his most perfect of all—and to the string quartets. I’m not sure why exactly I’ve gone to them this year, I attended no live performance that rekindled this interest.

I attended a few memorable performances. I loved the Tristan from the last season of the Met, with Nina Stemme as Isolde and Simon Rattle as conductor. Strauss’ Salomé works well on disc, but it was fun to see it extravagantly performed live. Also at the Met, Jenufa and L’amour de loin were very enjoyable.

Usually I listen to Philip Glass when I write, and this year I got to attend a live performance. It was the premiere of his 11th symphony, by the Bruckner Orchestra Linz, which Glass attended as well on his 80th birthday. And the very best musical event of my year was a performance of Brahms’ Deutsches Requiem, performed by the Rundfunkchor Berlin, as part of the Lincoln Center’s White Lights Festival. We stood in a chapel in the Upper West Side, as the choir emerged from the audience, finding ways to engage with us throughout the singing, deploying constant surprises in the dark space. I thought it was sublime, and the good news is that the ensemble performs it elsewhere, so perhaps you can catch it too.

I had a lot more Wagner this year. I find that Tristan and Das Rheingold work well on disc, and Parsifal too, especially the third act. Strauss as well, whose operas are exceedingly fine, most of all Daphne and Der Rosenkavalier. Verdi’s Otello is sometimes spoken of as comparable to Shakespeare’s play, but hardly anyone says the same about the respective Macbeths. Verdi’s Macbeth is not frequently performed, but I think that its ruminative parts are excellent reminders of why it is we love Verdi.


(I enjoyed this cyberpunk series of Hello Chongqing)

On Hong Kong I shall write more later.

To conclude, why not let’s ask for the US to reach and sustain 3 percent GDP growth by 2020?

Are we sure that rich countries aren’t themselves suffering their own premature deindustrialization?

Why don’t we focus more on developing the developed world?

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Definite optimism as human capital

In a brief essay, Anton Howes asks: “Is innovation in human nature?” That is to say, do people have some natural stock of innovative capacity, waiting to burst forth when conditions are right? By way of anecdote, Howes’ answer is: not really. He pushes back against the idea that the industrial revolution took place merely because the economic conditions were suitable for one: “The more I study the lives of British innovators, the more convinced I am that innovation is not in human nature… People innovate because they are inspired to do so. And when people do not innovate, it is often simply because it never occurs to them to do so. Incentives matter too, of course. But a person needs to at least have the idea of innovation—an improving mentality—before they can choose to innovate.”

Let’s ask more generally: What are the factors that drive economic growth? If we pull out and dust off our econ textbooks, we’ll read that growth is a function of higher investments, spending, trade, productivity, and so on. They can be broken down into ever more abstract categories, but technical enough that we can measure them to two decimal points and above. Howes’ framing prompts me to bring up some questions I was too dumbfounded to pose in four years of econ classes: How do beliefs about the future affect long-term economic growth? What role do optimism and pessimism play? How important are imagination and drive to growth?

And most of all: Why do we treat innovative capacity as some kind of fixed stock, constant across time and between countries, ready to be activated as soon as policymakers have finally gotten around to legislating the right conditions in place?

I’ve come to the view that creativity and innovative capacity aren’t a fixed stock, coiled and waiting to be released by policy. Now, I know that a country will not do well if it has poor infrastructure, interest rate management, tax and regulation levels, and a whole host of other issues. But getting them right isn’t sufficient to promote innovation; past a certain margin, when they’re all at rational levels, we ought to focus on promoting creativity and drive as a means to propel growth.

I wonder if economists overrate the easier-to-observe policy factors and under-theorize the idea that positive visions of the future drive long-term growth. To put it in a different way, I wish that they would consider definite optimism as human capital. In addition to education levels, human capital models should consider factors like optimism, imagination, and hope for the future.

When I say “positive” vision, I don’t mean that people must see the future as a cheerful one. Instead, I’m saying that people ought to have a vision at all: A clear sense of how the technological future will be different from today. To have a positive vision, people must first expand their imaginations. And I submit that an interest in science fiction, the material world, and proximity to industry all help to refine that optimism. I mean to promote imagination by direct injection.


Let’s start with the capacity of science fiction to improve imagination. One way of having a better idea of the technological future is to first read about one in a book or see one on screen.

Alas, for some reason, science fiction movies have taken a bleak turn in the last few decades. The dominant mode in modern sci-fi movies is dystopia, and perhaps even nihilism. Today, the contrarian project is to present an earnest, joyful vision of the technological future. That kind of undertaking will invite mockery from commentators posting essays on Medium, but one can hope that younger, less jaded people will find attractive that daring imagination.

If I had funding and access to studio talent, I would reshoot a bunch of films. Elysium, with a focus on the logistics behind the smooth functioning of a satellite habitat. Ex Machina, featuring an artificial intelligence whose greatest desire is not acceptance in human society. Gravity, with greater marveling of space and the desire to explore, not the aftermath of random mechanical failure. Her, in which artificial intelligences decide to improve humanity, instead of migrating en masse to a higher spiritual plane. Star Wars with no wars and no Jedis—and therefore no Sith—that instead draws out the gains from interstellar exchange under oversight of the Trade Federation. (Bonus points for working out rules that would govern countervailing duties and state procurement under a galactic trade regime.)

I confess I don’t know how to make these stories exciting. Doesn’t it sound though like an exciting challenge for the creative type? It is so conventional these days to watch yet another movie about how robots attempt to wipe out humanity, but ultimately fail, because they’re missing some essential soulful touch. So let me provide prompts to the enterprising screenwriter: What might society look like if we had energy too cheap to meter? If artificial intelligences must be otherworldly, how about we present them as angels of Rilke come down to Earth? When humanity manages to become a solar civilization, can we depict the inventions we need to colonize various moons and planets? How about the logistics of how colonies trade?

Books are less uniformly dystopian. I loved two that I read in the past year: *Seveneves* by Neal Stephenson and *The Three Body Problem* by Liu Cixin. Both present definite optimistic visions of the future: Calamity threatens humanity; but it allows some time for humanity to prepare; and humanity uses this time to plan out the technological future. It more or less fulfills what it set out to do, and for the most part people triumph over their threats. I am delighted by the theme of people working hard to overcome existential challenges.

And I hope that many more authors and directors get into this genre. Let’s have more movies and books that look forward to the technological future.


Economists tend to be dismissive of arguments for industrial policy. I usually agree with their arguments, but today I want to stick up for one potentially positive aspect: That manufacturing and engineering work can improve imaginative capacity through exposure to industrial processes. I sympathize more often with those who lament the decline of the US industrial base because I think that more people should have greater proximity to the world of manufacturing and engineering.

(A bit of context: According to FRED’s measure, the number of people employed in manufacturing peaked at nearly 20 million in 1979; that figure is slightly above 12 million today. As a share of working age population, that’s a decline of 14 percent in 1979 to 6 percent today. That decline in headcount has not translated to a decline in total output. Today, manufacturing output in real terms is higher than ever before. But it’s worth noting that the figure collapsed after 2008, and is now only a shade higher.)

The fewer the manufacturing workers and engineers, the more removed everyone is from the particulars of industrial processes, and the more remote that knowledge becomes in each successive generation. We become think tankers and app designers and restaurant hosts, while the details of the industrial world become further and loftier abstractions. How many of our grandparents were familiar with the details of ball bearings, wire production, concrete mixing, industrial chemicals, while we are not?

I regret this abstraction of the material world. Most of our living standards are tied to the world of atoms. Even when we spend a lot of time online and on our phones, we go to work in cars and subways; keep ourselves warm and cool using machinery and electricity; surround ourselves with objects that let us cook or relax; and on and on. The online world is not entirely free of the material world. Our phones require aluminum and rare earths and silicon chips; the internet is powered by cables that run under our streets and beneath the oceans; we mine our bitcoins with a great deal of electricity.

Manufacturing work tends to be hazardous or unpleasant in all sorts of ways. But it’s also associated with faster productivity growth and the greater possibility of technological upgrading. Here’s Andy Grove: “Abandoning today’s commodity manufacturing can lock you out of tomorrow’s emerging industry.” If a country gives up on manufacturing too early on, even if it’s very low value-add stuff, it also loses all the tacit knowledge and design expertise from a workforce familiar with industry. The US continues to retain the highest value-add work of R&D and marketing in many sectors; but a lot of the scaling expertise, supplier networks, and supply chain knowledge have dispersed to other shores. I predict over the long term that diminishes the country’s capacity to have the labor force ready to take advantage of scaling up a big, innovative technology; and it slightly reduces the chances that the country will have the talent to create it.

If a state has lost most of its jobs for electrical engineers, or nuclear engineers, or mechanical engineers, then fewer young people in that state will study those practices, and technological development in related fields slow down a little further. When I bring up these thoughts on resisting industrial decline to economists, I’m unsatisfied with their responses. They tend to respond by tautology (“By definition, outsourcing improves on the status quo”) or arithmetic (see: gains from comparative advantage, Ricardo). These kinds of logical exercises are not enough. I would like for more economists to consider a human capital perspective for preserving manufacturing expertise (to some degree).


I wonder if the so-called developed countries should be careful of their own premature deindustrialization. The US industrial base has faltered, but there is still so much left to build. Until we’ve perfected asteroid mining and super-skyscrapers and fusion rockets and Jupiter colonies and matter compilers, we can’t be satisfied with innovation confined mostly to the digital world.

Those who don’t mind the decline of manufacturing employment like to say that people have moved on to higher-value work. But I’m not sure that this is usually the case. Even if there’s an endlessly capacious service sector to absorb job losses in manufacturing, it’s often the case that these new jobs feature lower productivity growth and involve greater rent-seeking. Not everyone is becoming hedge fund managers and machine learning engineers. According to BLS, the bulk of service jobs are in 1. government (22 million), 2. professional services (19mn), 3. healthcare (18mn), 4. retail (15mn), and 5. leisure and hospitality (15mn). In addition to being often low-paying but still competitive, a great deal of service sector jobs tend to stress capacity for emotional labor over capacity for manual labor. And it’s the latter that tends to be more present in fields involving technological upgrading.

I read occasional arguments that liberal societies need to have a healthy level of engagement with its armed forces, or they risk revering but not understanding the military. I’d like to make a similar appeal for manufacturing. Until our world is much better built-up than the present, it’s too early to accept the diminishment of an industrial base, by which I mean little growth in output accompanied by a decline in the workforce. At a time when more tech companies are offering digital tools to industry, we should expect the number of people jumping in to take advantage of them to be increasing, not decreasing.

It’s sad that DuPont’s excellent slogan “Better living through chemistry” has been ironically twisted from a celebration of chemicals and plastics to enjoyment of recreational drugs. How far along is humanity in its progress toward its bright technological future? I submit that we’re less than 3 percent of where we should ultimately be. Let’s worry about premature deindustrialization in the developed world as well.


Here’s a bit more skepticism of service jobs. In an excellent essay on declining productivity growth, Adair Turner makes the point that many service jobs are essentially zero-sum. I’d like to emphasize and elaborate on that idea here.

There are plenty of service jobs that are meant to cancel out the efforts of other service jobs. One firm spends a few million dollars to hire a dozen ad agencies to convince you to purchase its car insurance policies; another firm hires a different dozen agencies and puts out other ads. One firm or person decides to sue another, creating the need for two sets of lawyers. One candidate attempts to raise a hundred million dollars to win an election, and the other side has to do the same, and meanwhile only one can win.

Worse, the zero-sumness is often asymmetric. A dozen hackers make a theft, and suddenly companies everywhere need to spend collective billions on staff or outside agencies to protect themselves. A few criminals plague a state, and suddenly the government needs to hire hundreds of officers to make people feel safe; or border agents and wall builders if it turns out the criminals were aliens. A few dozen people commit accounting fraud, and the ensuing uproar forces companies and banks to ramp up the size of their compliance departments by the tens of thousands.

Although manufacturing jobs can be wasteful, I don’t think it has this issue of being zero-sum.

I noted in my computer science piece that two of the big growth areas of US bachelors degrees have been healthcare and law enforcement. Much of the marginal growth has to deal with compliance—after all, in health care at least, the growth of new doctors has not accelerated. In addition, a lot of the marginal growth in financial services and higher education appears to be compliance-related as well.

Some of that is prompted by legislation. Without passing judgment on the overall merits of these new policies, I find them to be pretty remarkable as jobs programs. It almost feels like developed countries have shifted the focus of industrial policy to service jobs. If this was the principal aim of US policymakers, I find impressive that they’ve pulled this off in response to deindustrialization. Congress rises in my estimation.

Healthcare and finance are both high-margin industries, and I wonder if Congress will find another to take a more active role as a jobs provider. Technology, perhaps? Maybe something like hiring people to keep newsfeeds and search results free from dangerous content or fake news. In fact that’s something that sounds like it could well receive bipartisan support.


A Bloomberg piece prompts some of my questions about definite optimism and human capital. The current unemployment rate in Japan is 2.8 percent. Japanese millennials get to enjoy a fairly tight labor market, which means they ought to have their pick of company to work for. But few of them have an interest in switching jobs, because they want not high wages but perfect stability. The article attributes this risk aversion to lingering fears of the previous downturn. The country that lost a decade—or maybe two—has fostered a generation of youth highly averse to risk-taking. (Elsewhere in Bloomberg headlines: “Japan has the world’s gloomiest millennials.”)

By contrast, the article quotes a recruiter who says that China has a “fearless” employee base. When recruiters come around promising higher wages, Japanese millennials keep their heads down, while young Chinese are willing to try something new. Given that two generations of Chinese have never experienced recession, it might be that job hops don’t even feel like a risky move; there ought always be another opportunity waiting around the corner, so why not try something out for fit?

That theme dovetails into another of my recent pieces. I think it’s a puzzle that relatively few people major in computer science given how lucrative it is. After I wrote my piece, a great number of people responded that I’ve been focusing on the hangover of the 2001 dotcom bubble. Let’s say they’re right, i.e. the bubble drove a lot of people away from majoring in CS, such that the number of graduates in 2001 wasn’t surpassed until 2014. I see this as a pessimistic interpretation. It means that it took nearly 15 years for the number of graduates to recover to a previous high after a single, brief recession. (Meanwhile, the share of graduates remains below its ’01 high, because many more people are earning bachelors degrees today.)

It’s worrying that a recession was able to do all that. How many fewer startups have been founded, how many larger companies could have been better staffed, how many more VCs could have generated higher returns for LPs, if the field didn’t have to deal with this talent constraint caused by a brief recession? The lesson of both Japanese millennials and CS grads is that recessions leave deep psychological scars that hurt risk appetites for a much longer time than the downturn itself.

That lesson comes to mind when I read Andrew Batson on the hypothetical tradeoff between short-term and long-term growth in China. He suggests that in principle, it’s possible that China’s much-criticized debt-fueled stimulus policies are not hurting long-term income growth as much as people fear: “Officials could argue they do not need to spend time worrying about measures that might damage long-term productivity growth, since no one really knows what causes long-term productivity growth anyway, and are right to focus on preventing deep and damaging cyclical downturns.”

It’s straightforward to measure a recession’s effects on employment and output. But what if the psychological impact of a recession is much more severe than we thought, to the extent that it could make a dent in long-term productivity growth? If we accept the idea that recessions linger in the form of psychological scars, lower expectations, and greater risk aversion, then it makes more sense to do a lot to avoid them. And it weakens the Austrian case for recessions as healthy corrections that improve capital allocation, because they cause a great deal of unseen harm as well. If we treated definite optimism as a function in human capital and productivity growth, then we could be slightly more rigorous in considering the broader effects of recessions.


I submit that an underrated Trump phenomenon is how many people have been drawn to care about political scandal. I haven’t much changed the people I follow on Twitter, but my feed has gone something like 25 percent politics to 60 percent politics; I don’t have a Facebook, and I suspect that something similar happens there as well. So many people have become addicted to retweeting the very latest Trump embarrassment, or making identical jokes about it.

But what could be more boring?

This is the social risk: That the minds of many talented young people today will be permanently disfigured by this obsession with Trump embarrassments. The effect will persist when Trump is no longer in office. By that time, people will still be hypersensitive to whatever political news is happening at the moment, as they’re glued to social media looking for breaking jokes. Some people expressed this fear when George Bush was in the White House. I submit that it’s much more severe today: It’s Donald Trump, plus social media, and more cable news, in the midst of a flowering meme culture.

I confess guilt to taking pleasure in some of these memes myself. But I realize the glee is an unhealthy one, and that I have to break it before it breaks me. I entreat more people to consider their news consumption in these terms—most of us do not need to pay attention to the day-to-day goings on in the political world. There are too many sites and personalities that have completely re-oriented themselves to telling people how they ought to feel about the latest piece of news. I don’t blame them, because I think they’re delivering what we want. But we can change our preferences.

Call me a romantic, but I’d like everyone to think more about industrial lubricants, gas turbines, thorium reactors, wire production, ball bearings, underwater cables, and all the things that power our material world. I abide by a strict rule never to post or tweet about current political stuff; instead I try to draw more attention to the world of materials. And I’d like to remind people that there are many things more edifying than following White House scandals.


Let me be concrete. I have two suggestions on how to take on greater definite optimism to think more about technological future:

First, we can all try to engage more actively with the material world, not merely the digital or natural world. Go ahead and pick an industrial phenomenon and learn more about it. Learn more about the history of aviation, and what it took to break the sound barrier; gaze at the container ships as they sail into port, and keep in mind that they carry 90 percent of the goods you see around you; read about what we mold plastics to do; meditate on the importance of steel in civilization; figure out what’s driving the decline in the cost of solar energy production, or how we draw electricity from nuclear fission, or what it takes to extract petroleum or natural gas from the ground.

To be a bit more future-looking, consider what the technological civilization ought to look like in the year 2300. Then figure out what kinds of theoretical and practical breakthroughs people need to solve in the near future before we get to that stage.

Second, we should ask for more direct, unironic celebrations of innovation in popular culture. That means, for example, shooting more science fiction movies that are not fixated on the ways that technology will kill us all. Let’s see more examples of invention, exploration, and risk-taking in film. And also more images of what the world of tomorrow will look like.

It might be a good philanthropic undertaking to create exciting visions of the future. I humbly beg the various generous people who open up their pocketbooks to also consider funding culturally exciting projects. I’d like the altruistic millionaires and billionaires to step up funding of movies, books, World Fairs, murals, memes, whatever, to expand our imagination. More art, say, that depict societies of the future, like so much of what we had previously. Or focus the World Fairs to once again showcase applications of cutting-edge technologies. Or figure out how to make cool videos of industrial processes that people are happy to watch online.

Perhaps the mighty industrialists and financiers who steer so much money towards think tanks to promote their goals can consider culture more often. Fewer op-eds on how people should feel about upcoming legislation; instead, more creation of cultural products that get people excited about the technological future. These kinds of efforts to promote definite optimism, rather than a continuous focus on never-ending political battles, might result in greater economic growth in the long run.


It’s time to synthesize this piece with my previous. That was about the destructive results that follow when we keep our gaze fixed on the people around us, instead of towards our own goals. When we get sucked into Girardian dynamics, people get too competitive, always trying to one-up another in the group, until they reach places that look totally extreme to the outside world. The way to avoid this Girardian conflict is to direct our gaze outwards to the tangible things of the world.

When we all have different things to be interested in, we can avoid the narcissism of small differences. I’m hopeful that greater interest in the industrial world would decrease the amount of Girardian conflict in society, because manufacturing and engineering have so many different niches. It’s not the only one, however. The essay is in part an exhortation that the world has many interesting things to focus on instead of each other.

Here’s one more point that I’d like to add on Girard at college: I wonder if to some extent current dynamics are the result of the liberal arts approach of “college teaches you how to think, not what to think.” I’ve never seen much data to support this wonderful claim that college is good at teaching critical thinking skills. Instead, students spend most of their energies focused on raising or lowering the status of the works they study or the people around them, giving rise to the Girardian terror that has gripped so many campuses.

That makes me wonder if encouraging creativity and critical thinking skills is possibly overrated at current margins. Ian Leslie’s book, Curious, makes the point that we shouldn’t be so pleased to offload so much of our memory to search engines, such that the most key skill is learning how to Google instead. So I’m starting to better appreciate the Leninist system of education in France and China, in which children are endlessly stuffed with information (especially in technical subjects) and then sorted through rounds and rounds of examinations. Kids may develop critical thinking skills more easily if they have a vast base of knowledge to work with, when they’ll be able to make connections of facts on their own, instead of being taught some interesting rules and not enough content to practice them. But I throw this out as a hypothesis, not as a strong conviction.

Here is an illustration of a satellite habitat from Seveneves.


A few last thoughts:

An excellent objection to my points about manufacturing is that many parents worked darn hard to make sure their kids didn’t take the same kinds of jobs, and told them as such. I concede once more that much of the work is unpleasant and hazardous. Still, at some margin, there could be too little encouragement to enter the field, especially through not knowing many people not in services. I wish that the mix of adults that a high school student can expect to be exposed to include more manufacturing workers and engineers.

The digital world is indeed a lot of fun, and it’s entirely wrong to deny that the sector has been innovative. Still, I wish to remind people that changes in the physical world drive a lot of living standard improvements. Given how many people struggle in low-end jobs, and how quickly a few major expenditures are getting more expensive, reminders that the internet is really good smacks today of “Let them eat iPhones!”

It’s striking how much Neal Stephenson’s novels maintain the importance of the material world. It’s not all digital wonder for him. I chuckled at the bit in Seveneves in which Stephenson blamed social media for civil disorder, cannibalism, and general social collapse.

I wouldn’t change much about The Martian movie. More like it, please. I’m cautiously optimistic for the movie adaptation of the Three Body Problem, due to be out later this year. There’s no way it can be as good as the book. But the series is driven by a fundamentally optimistic vision, and that’s refreshing. And instead of an alien civilization that’s 70 or 80 percent more advanced than humans, it asks why aliens should not be 10,000 times more advanced than humans. That’s fun to wonder about.

Stephenson’s Project Hieroglyph sounds like a great idea, I wish that there were more institutions like it: “Inspiration is a small but essential part of innovation, and science fiction stories have been a seminal source of inspiration for innovators over many decades. In his article entitled “Innovation Starvation,” Neal Stephenson calls for a return to inspiration in contemporary science fiction.” But it doesn’t seem to be very active. Anyone know if it’s still an ongoing concern?

The most important essay I read in the last month is by Lant Pritchett. He asks why the scarcest economic resources—entrepreneurial ability and technical talent—are going into automating an abundant resource: cheap labor. In the developed world, labor is expensive because of policy restrictions, and it is neither efficient nor equitable to use scarce technological talent to displace globally abundant workers.

Thanks to Michael Gibson for reading an early draft.

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Violence and the Sacred: College as an incubator of Girardian terror

I’ve written about René Girard’s ideas once before, to try my hand at identifying mimetic crises in the world of George R. R. Martin. Today I’d like to apply Girard’s ideas to another world in which people are driven to conflict over small differences and personal slights.

(Rather than attempting to explain Girard’s ideas in depth, I leave concessions to the reader, and point instead to discussions from the Raven Foundation and the IEP. If you’re looking for a quick introduction to the life of Girard, take a look at his obituary in the Times.)

Girard presents a model of human conflict that is Shakespearean, not Marxist. That is, he thinks that people are not engaged in class struggle, in which proletarians unite against the bourgeoisie; instead, people reserve horror and resentment for people most like themselves. Consider the origin of the ancient grudge laid out in the opening line of Romeo and Juliet: “Two houses, both alike in dignity…” The Montagues and Capulets fight not because they’re so different but because they’re so alike.

The closer we are to other people—Girard means this in multiple dimensions—the more intensely that mimetic contagion will spread. Alternatively, competition is fiercer the more that competitors resemble each other. When we’re not so different from people around us, it’s irresistible to become obsessed about beating others. Girard’s framework vastly improves Freud’s phrase “the narcissism of small differences.” It’s also a framework for Kissinger’s quip: “Academic politics are so vicious because the stakes are so small.”

Where should we expect Girard’s predictions for mimetic crises to run most rampant? At places where values are confused and people are much the same. To me, that description best fits one place in particular: the American college.

In the US, where I attended college, nearly everyone starts undergrad in the same way: After graduating from high school at age 18. When they start school, few people have a clear sense of the career path they’ll set on; it’s rare to meet a person who has high confidence of what they’ll end up doing, and even rarer to see someone who actually follows that plan. Instead, people happily confess that they don’t know what they’ll do, and that they’ll figure it out by trying different classes and by joining clubs, sports teams, fraternities, and so on.

None of this is bad, really. Unless you’re a Girardian.

It’s hard to construct a more perfect incubator for mimetic contagion than the American college campus. Most 18-year-olds are not super differentiated from each other. By construction, whatever distinctions any does have are usually earned through brutal, zero-sum competitions. These tournament-type distinctions include: SAT scores at or near perfection; being a top player on a sports team; gaining master status from chess matches; playing first instrument in state orchestra; earning high rankings in Math Olympiad; and so on, culminating in gaining admission to a particular college.

Once people enter college, they get socialized into group environments that usually continue to operate in zero-sum competitive dynamics. These include orchestras and sport teams; fraternities and sororities; and many types of clubs. The biggest source of mimetic pressures are the classes. Everyone starts out by taking the same intro classes; those seeking distinction throw themselves into the hardest classes, or seek tutelage from star professors, and try to earn the highest grades.

There’s very little external intermediation, instead all competitive dynamics are internally mediated. The prizes are so obvious. The big companies that come to career fairs soothingly assure high-status jobs; the speakers at convocation tell us that we too will become as successful as them one day; our peers hold leadership positions at clubs, get internships at exciting companies, and earn those chances to have lunch with the university’s president.

The lack of external mediation explains why objects of desire on campus can be seen to have such high worth. And why certain leadership positions on campus are heavily fought over, even though they don’t seem to have much influence. It also helps to explain why so many people enter into only a handful of fields.

Mimetic contagion magnifies small fights by making people focus on each other. These processes follow their own logic until they reach conclusions that look so extreme to the outside world. Once internal rivalries are sorted out, people coalesce into groups united against something foreign. These tendencies help explain why events on campus so often make the news—it seems like every other week we see some campus activity being labeled a “witch hunt,” “riot,” or something else that involves violence, implied or explicit. I don’t care to link to these events, they’re so easy to find. It’s interesting to see that academics are increasingly becoming the target of student activities. The Girardian terror devours its children first, who have tolerated or fanned mimetic contagion for so long.

Girard’s main mechanism for renunciation of metaphysical desire doesn’t seem to have a big presence on most campuses. I think that’s also the case for secular society in general. (As an aside, I’ve started to become curious if the rationality movement, broadly defined, is the secular answer to Girardian renunciation.) I invite Girard scholars to tell me how or if he saw secular ways for conflict to be resolved.

No one has ever asked me how one should escape mimetic contagion on campus. Still here’s my answer: If one must go to college, I advise cultivating smaller social circles. Instead of going to class and preparing for exams, to go to the library and just read. Finally, not to join a fraternity or finance club, but to be part of a knitting circle or hiking group instead.


René Girard’s most famous student did not take the threat of mimetic contagion lightly when he ran a company. When Peter Thiel was the CEO of PayPal, he tried to minimize mimetic contagion, possibly because the company was hiring a bunch of kids who’ve been socialized in elite colleges. Keith Rabois has recounted that as a manager, Thiel allowed everyone to work on one thing and one thing only. Rabois couches in terms of ridding distractions, but it’s clear that this is good Girardian practice. People will not feel mimetic envy if they cannot look at the work of others.

Thiel’s comments on management more generally are worth reading. The Girardian themes are clear if one looks for them: “If you were a sociopathic boss who wanted to create trouble for your employees, the formula you would follow would be to tell two people to do the exact same thing. That’s a guaranteed formula for creating conflict. If you’re not a sociopath, you want to be very careful to avoid this.”

From the same interview, here are his entertaining remarks on business schools: “The conceit of the MBA is that you don’t need to have any substance at all. It’s just this management science, and you can apply that equally well in a software company or an oil drilling company or a fashion company or a rocket company. That’s the bias I’d want us to cut against. So for the degree, people would learn substantive things and then on the side you’d pick up some business skills. But you wouldn’t treat the business degree as the central thing.

“I think one challenge a lot of business schools have is they end up attracting students who are very extroverted and have very low conviction, and they put them in this hothouse environment for a few years—at the end of which, a large number of people go into whatever was the last trendy thing to do. They’ve done studies at Harvard Business School where they’ve found that they largest cohort always went into the wrong field. So in 1989, they all went to work for Michael Milken, a year or two before he went to jail. They were never interested in Silicon Valley expect for 1999, 2000. The last decade their interest was housing and private equity.”


I haven’t watched much TV recently, but the new show I’ve liked best is *Big Little Lies* on HBO. Rich suburban moms, with desires mediated by their children, are incited towards violence against each other in gorgeous Monterey, California. Who can resist?

The parents have drawn their battle lines by the first episode. The Girardian themes get heavier and heavier throughout the series, until the astonishing finale, which culminates in violent murder. Mimetic contagion races through the group of mothers, who battle over progressively higher stakes, until the show ends with communal violence against a mysterious outsider, the death of whom unites the community in frolicking harmony. The murder takes place during a masquerade-like public performance, over flames, alcohol, and music; the perpetrators each have a hand in violence; scenes of a beating are interspersed with the breaking of Pacific waves on rocks in all directions. That murder unites feuding groups under a lie, and previously lingering questions are papered over, without resolution nor need of one.

Isn’t this a fairly compelling depiction of a Girardian war and peace? I want to only gesture at another question: The parents make every effort to spare pain from the children, but isn’t it the case that the kids see things far more clearly than the adults?

I liked the show a lot. Apart from the Girardian themes, the shots of Monterey are beautiful, the characters are compelling, and there are many funny moments. Do watch.


Here’s an article about how literal memes spread on campus. Apparently many colleges have Facebook meme groups sharing jokes particular to that school. The dankness of one’s meme reflects the high quality of the school.

Elsewhere in meme culture on campus, Harvard recently rescinded offers to at least ten incoming freshmen because they shared memes that were either sexually explicit or racist. This story is just too good. The college set up a Facebook group for the Class of 2021. People started to befriend each other and created a meme group. Unsatisfied with the lightheartedness of most memes, some members started a “dark” group, which created these unacceptable memes. To gain membership in this dark group, first one had to post a risqué meme in the general group.

It’s amazing that even before they met each other, the class of ’21 was already testing its members’ limits, sorting themselves into elite sections, and trying to outdo each other in explicitness. Instead of being focused on real goals, their gaze is directed at each other, and each concentrates on one-upping the previous go. Internally every move is so compelling; externally the situation turns too extreme.


If one is a Girardian, then there is perhaps no greater catastrophe than the growing tendency of the American meritocracy to be incubated in elite colleges. Is it not worth fretting that the people running the country are coming in higher numbers from these hothouse environments at a young age, where one is inflamed to compete over everything and where tiny symbolic disputes seem like life and death struggles? How much of the governing class has fully adopted this attitude, and to what extent can we see our recent political problems to be manifestations of this tendency?

I want to make a point that I’ve brought up once before: Because acts of youth are more easily recalled, our future elites will be made up of people who’ve managed to keep their records unsullied. What happens when most records of our life are accessible via Facebook, Snapchat, Twitter, or blogs? I think that makes it so that our future leaders will be selected for whether they were willing to be really boring in their 20s, who have no recorded indiscretions that might derail a Senate confirmation. Are these the people we want to be governed by?

I liked this piece by Mihir Desai: “The Trouble with Optionality,” published in the Harvard Crimson: “The Yale undergraduate goes to work at McKinsey for two years, then comes to Harvard Business School, then graduates and goes to work Goldman Sachs and leaves after several years to work at Blackstone. Optionality abounds!

“This individual has merely acquired stamps of approval and has acquired safety net upon safety net. These safety nets don’t end up enabling big risk-taking—individuals just become habitual acquirers of safety nets. The comfort of a high-paying job at a prestigious firm surrounded by smart people is simply too much to give up.”


I think mimetic contagion is worst in US colleges. In Canada, people apply to major in certain subjects; if they earn admission, it’s not so easy to switch, so there’s less of this intellectual loitering that one finds on American campuses. And when I attended a German university, students told me that German 18-year-olds don’t usually go directly to university after high school. Instead, they take a year off to travel, work, or volunteer. These experiences create difference and maturity, thus better inoculating people against mimetic contagion.

I wonder about graduate schools in the US. I think they’re more free from Girardian conflict, though I’m not sure by how much. The place where one expects people to be most susceptible to mimetic contagion—business school—is composed of people with somewhat distinctive starting points and end goals. Those who start MBA programs usually vary more by age and have a clearer idea of what they want, at least relative to undergrads.

I submit that anyone who accepts the ideas of Girard should be extremely wary of being in anything resembling the college environment. It might be too much to ask high school students to read I See Satan Fall Like Lightning or Things Hidden Since the Foundation of the World. But anyone who’s familiar with these works ought to feel grand Girardian horror to contemplate exposure to these dynamics in college-like corporate environments or graduate school.

An unhappy study shows that one in two PhD students experiences psychological distress, and that one in three is at risk of a common psychiatric disorder.


The two best novelistic modelers of mimetic desire are Marcel Proust and Stendhal. (And as I’ve written before, George R. R. Martin isn’t bad either.) I feel that I’d have said this even if the triangular desire in these novels weren’t pointed out by Girard himself.

Having Girard in the back of one’s mind is helpful for reading Proust in particular. His novels are like agonized letters. At first I found his transitions bewildering and his anecdotes too tedious to follow. Afterwards I felt a craving for his daily epiphanies, which really cannot be rivaled in their acuity.

It’s fun to read Proust with a particularly Girardian question in mind: Does our narrator ever have spontaneous desires of his own? Each episode of his various obsessions starts with someone else pointing out that a particular person is worth acquaintance or a piece of art is worth appreciation. The best examples are the actress La Berma and the painter Elstir. Once someone whispers to our narrator that he is in the presence of an exceptional talent, he feels the greatest sense of worship. If there are any instances in which our narrator comes to desire without a mediator, I’ve yet to find it.

At some other point I’d like to write about Girard and Stendhal, as well as more generally the validity of extracting lessons of mimetic contagion from literature.


To me, America’s greatest feature is that it allows people to embrace mimesis or free themselves from it. Society allows people of both types to thrive. It’s not like in other countries, where people are forced to socialize in certain ways or find it too easy to extricate themselves from society.

I want to make clear that mimetic tendencies aren’t all bad. Two types of people have the greatest capacity for learning: Those who are intensely mimetic and those who are incapable of mimesis.

Thiel gets at the learning capacity of the latter when he makes a point about Aspergers in the Valley: “If you’re less sensitive to social cues, then you’re less likely to do the same thing as everyone else around you. If you’re interested in making things or programming computers, you’ll be less afraid to pursue these activities single-mindedly and thereby become incredibly good at them.”

Meanwhile, those who are susceptible to mimesis can be excellent learners too. They’re better able to pick up social cues than anyone else, and they have a greater capacity to please. Mimetic ability manifests in “conscientiousness,” such a popular trait these days. They have a clearer sense of who successful models are, and they have the greatest eagerness to learn from them.

I submit that the key to success is to be aware of one’s tendencies, either to be very mimetic or not at all. Then one can harness these tendencies to maximize learning, and not spend all one’s time indulging solitary whims or be governed by mimetic contagion. It’s possible that the greatest amount of learning comes as a result of fluctuating between these extremes. And I feel that kind of fluctuation is possible only in America, not really anywhere else I’ve lived—Canada, China, Germany, and now Hong Kong.


A few last thoughts:

If you’re looking for an overview of René Girard’s work, I recommend Wolfgang Palaver’s primer.

The best case against my argument that college generates Girardian terror is the tendency for most people to remember their college years fondly. I concede that my analysis may be badly wrong. First, that I’m in error, in my analysis of Girard; second, that Girard is in error, in his analysis of the human condition; third, that more people are immune to mimetic contagion than this piece suggests; or fourth, that the warm light of memory makes people forget about these dynamics, so that they remember the peaks of what made college fun instead.

For academic year 2017-18, the school I attended—Rochester—will charge a $67,708 to incoming freshmen. At least I think that’s the case when I tally fees from this page. Curiously, the school offers breakdown of costs, but not their sum. That’s confusing because some fees are mandatory while others are not. That’s not the extent of total fees; the school mandates people to purchase health insurance, and if you take the one offered by the university, a freshman’s charge comes to a cool $70,000 a year. Other private schools are drifting to $70,000. For the upcoming academic year, Harvard’s billed costs are $65,609, Yale is at $66,900, Princeton is at $67,100. I’m sure you can find less well-ranked schools that present a higher bill.

Here’s an observation from Gonzalo Fernández de la Mora: ”One may admit to pride, avarice, lust, anger, gluttony, and laziness… There is only one capital sin no one admits to: envy.” Most New Yorker cartoons are Girardian, this one especially so: “It’s not enough that dogs succeed, cats must also fail.”

I’ll end with a quote from I See Satan Fall Like Lightning: “Mimetic desire enables us to escape from the animal realm. It is responsible for the best and the worst in us, for what lowers us below the animal level as well as what elevates us above it. Our unending discords are the ransom of our freedom.

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Why do so few people major in computer science?

In 2005, about 54,000 people in the US earned bachelor’s degrees in computer science. That figure was lower every year afterwards until 2014, when 55,000 people majored in CS. I’m surprised not only that the figure is low; the greater shock is that was flat for a decade. Given high wages for developers and the cultural centrality of Silicon Valley, shouldn’t we expect far more people to have majored in computer science?

This is even more surprising when we consider that 1.90 million people graduated with bachelor’s degrees in 2015, which is 31% higher than the 1.44 million graduates in 2005. (Data is via the National Center for Education Statistics, Digest of Education Statistics) That means that the share of people majoring in computer science has decreased, from 3.76% of the all majors in 2005 to 3.14% of all majors in 2015. Meanwhile, other STEM majors have grown over the same period: “engineering” plus “engineering technologies” went from 79,544 to 115,096, a gain of 45%; “mathematics and statistics” from 14,351 to 21,853, a gain of 52%; “physical sciences and science technologies” from 19,104 to 30,038, a gain of 57%; “biological and biomedical sciences” from 65,915 to 109,896, a gain of 67%. “Computer sciences and information technologies?” From 54,111 in 2005 to 59,581 in 2015, a paltry 10.1%.

If you’d like a handy chart, I graphed the growth here, with number of graduates normalized to 2005.

(Addendum: Several people have pointed out that 2005 was an idiosyncratic year, and that I should not rebase figures from that date. I graphed it from this point because in the NCES dataset I’ve been using breaks out the data by one-year intervals only since 2005. Scroll to the end of the post to see data on graduates from 1975, which shows clearly that 2005 was a peak for graduates. A more full discussion would involve the impact of the dotcom bubble; see below.)

I consider this a puzzle because I think that people who go to college decide on what to major in significantly based on two factors: earning potential and whether a field is seen as high-status. Now let’s establish whether majoring in CS delivers either.

Are wages high? The answer is yes. The Bureau of Labor Statistics has data on software developers. The latest data we have is from May 2016, in which the median annual pay for software developers is $106,000; pretty good, considering that the median annual pay for all occupations is $37,000. But what about for the lowest decile, which we might consider a proxy for the pay of entry level jobs that fresh grads can expect to claim? That figure is $64,650, twice the median annual pay for all occupations. We can examine data from a few years back as well. In 2010, median pay for software developers was $87,000; pay at the lowest decile was $54,000. Neither were low, now both have grown.

Now we can consider whether someone majoring in computer science can expect to join a high-status industry. That’s more difficult to prove rigorously, but I submit the answer is yes. I went to high school during the late-aughts, when the financial crisis crushed some of Wall Street’s allure, and Silicon Valley seemed glamorous even then. Google IPO’d in 2004, people my age all wanted to buy iPhones and work for Steve Jobs, and we were all signing up for Facebook. People talked about how cool it would be to intern at these places. One may not expect to end up at Google after college, but that was a great goal to aspire to. Industries like plastics or poultry or trucking don’t all have such glittering companies that attract.

I tweeted out this puzzle and received a variety of responses. Most of them failed to satisfy. Now I want to run through some common solutions offered to this puzzle along with some rough and dirty argument on what I find lacking about them.

Note: All data comes from the Digest of Education Statistics, Department of Education.


1. Computer science is hard. This is a valid observation, but it doesn’t explain behaviors on the margin. CS is a difficult subject, but it’s not the only hard major. People who proclaim that CS is so tough have to explain why so many more people have been majoring in math, physics, and engineering; remember, all three majors have seen growth of over 40% between 2005 and 2015, and they’re no cakewalks either. It’s also not obvious that their employment prospects are necessarily more rosy than the one for CS majors (at least for the median student who doesn’t go to a hedge fund). Isn’t it reasonable to expect that people with an aptitude for math, physics, and engineering will also have an aptitude for CS? If so, why is it the only field with low growth?

On the margin, we should expect high wages to attract more people to a discipline, even if it’s hard. Do all the people who are okay with toiling for med school, law school, or PhD programs find the CS bachelor’s degree to be unthinkably daunting?

2. You don’t need a CS degree to be a developer. This is another valid statement that I don’t think explains behaviors on the margin. Yes, I know plenty of developers who didn’t graduate from college or major in CS. Many who didn’t go to school were able to learn on their own, helped along by the varieties of MOOCs and boot camps designed to get them into industry.

It might be true that being a software developer is the field that least requires a bachelor’s degree with its associated major. Still: Shouldn’t we expect some correlation between study and employment here? That is, shouldn’t having a CS major be considered a helpful path into the industry? It seems to me that most tech recruiters look on CS majors with favor.

Although there are many ways to become a developer, I’d find it surprising if majoring in CS is a perfectly useless way to enter the profession, and so people shun it in favor of other majors.

3. People aren’t so market-driven when they’re considering majors. I was a philosophy major, and no I didn’t select on the basis of its dazzling career prospects. Aren’t most people like me when it comes to selecting majors?

Maybe. It’s hard to tell. Evidence for includes a study published in the Journal of Human Capital, which suggests that people would reconsider their majors if they actually knew what they could earn in their associated industries. That is, they didn’t think hard enough about earning potentials when they were committing to their majors.

We see some evidence against this idea if we look at the tables I’ve been referencing. Two of the majors with the highest rates of growth have been healthcare and law enforcement. The number of people graduating with bachelor’s degrees in “health professions and related programs” more than doubled, from 80,865 in 2005 to 216,228 in 2015. We can find another doubling in “homeland security, law enforcement, and firefighting,” from 30,723 in 2005 to 62,723 in 2015. Haven’t these rents-heavy and government-driven sectors been pretty big growth sectors in the last few years? If so, we can see that people have been responsive to market-driven demand for jobs.

(Sidenote: if we consider the pipeline of talent to be reflective of expectations of the economy, and if we consider changes in the number of bachelor’s degrees to be a good measure of this pipeline, then we see more evidence for Alex Tabarrok’s view that we’re becoming a healthcare-warfare state rather than an innovation nation.)

In the meantime, I’m happy to point out that the number of people majoring in philosophy has slightly declined between 2005 to 2015, from 11,584 to 11,072. It’s another sign that people are somewhat responsive to labor market demands. My view is that all the people who are smart enough to excel as a philosophy major are also smart enough not to actually pursue that major. (I can’t claim to be so original here—Wittgenstein said he saw more philosophy in aerospace engineering than he did in philosophy.)

4. Immigrants are taking all the jobs. I submit there are two ways to see that immigrants aren’t meeting all the marginal demand. First, most immigrants who come to the US to work are on the H1B visa; and that number has been capped at 65,000 every year since 2004. (There are other visa programs available, but the H1B is the main one, and it doesn’t all go to software engineers.) Second, rising wages should be prima facie evidence that there’s a shortage of labor. If immigrants have flooded the market, then we should see that wages have declined; that hasn’t been the case.

To say that immigrants are discouraging people from majoring in CS requires arguing that students are acutely aware of the level of the H1B cap, expect that it will be lifted at some point in the near future, and therefore find it too risky to enter this field because they think they’ll be competing with foreign workers on home soil. Maybe. But I don’t think that students are so acutely sensitive to this issue.

5. Anti-women culture. Tech companies and CS departments have the reputation of being unfriendly to women. The NCES tables I’m looking at don’t give a breakdown of majors by gender, so we can’t tell if the shares of men and women majoring in CS has differed significantly from previous decades. One thing to note is that the growth of people earning CS majors has been far below the growth of either gender earning bachelor’s degrees.

More women graduate from college than men. (Data referenced in this paragraph comes from this table.) In 1980, each gender saw about 465,000 new grads. Since then, many more women have earned degrees than men; in 2015, 812,669 men earned bachelor’s degrees, while 1,082,265 women did. But since 2005, the growth rate for women earning bachelor’s has not significantly outpaced that of men. 32.5% more men earned bachelor’s degrees in the previous decade, a slightly higher rate than 31.5% for women. It remains significant that women are keeping that growth rate for over a higher base, but it may be that it’s no longer the case that their growth can be much higher than that of men in the future.

What’s important is that the growth rate of 30% for both genders is below that of 10% for CS majors over this time period. We can’t pick out the breakdown of genders from this dataset, but I’d welcome suggestions on how to find those figures in the comments below.

6. Reactionary faculty. The market for developers isn’t constrained by some guild like the American Medical Association, which caps the number of people who graduate from med schools in the name of quality control.

CS doesn’t have the same kind of guild masters, unless we want to count faculty to be serving this function on their own. It could be that people serving on computer science faculties are contemptuous of people who want high pay and the tech life; instead they’re looking for the theory-obsessed undergraduate who are as interested in say Turing and von Neumann as much as they are. So in response to a huge new demand for CS majors, they significantly raise standards, allowing no more than say 500 people to graduate if a decade ago only 450 did. Rather than cater to the demands of the market, they raise standards so that they’re failing an even higher proportion of students to push them out of their lovely, pure, scholarly field.

I have no firsthand experience. To determine this as a causal explanation, we would have to look into how many more students have been graduating from individual departments relative to the number of people who were weeded out. The latter is difficult to determine, but it may be possible to track if particular departments have raised standards over the last few decades.

7. Anti-nerd culture. Nerds blow, right? Yeah, no doubt. But aren’t the departments of math, physics, and engineering also filled with nerds, who can expect just as much social derision on the basis of their choice? That these fields have seen high growth when CS has not is evidence that people aren’t avoiding all the uncool majors, only the CS one.

8. Skill mismatch and lack of training from startups. This is related but slightly different to my accusation that CS faculty are reactionaries. Perhaps all the professors are too theoretical and would never make it as coders at tech companies. Based on anecdotal evidence, I’ve seen that most startups are hesitant to hire fresh grads, instead they want people to have had some training outside of a college. One also hears that the 10X coders aren’t that eager to train new talent; there isn’t enough incentive for them to.

This is likely a factor, but I don’t think it goes a great length in explaining why so few people commit to majoring in the field. Students see peers getting internships at big tech companies, and they don’t necessarily know that their training is too theoretical. I submit that this realization should not deter; even if students do realize this, they might also know they can patch up their skills by attending a boot camp.

9. Quality gradient. Perhaps students who graduate from one of the top 50 CS departments have an easy time finding a job, but those who graduate from outside that club have a harder time. But this is another one of those explanations that attributes a greater degree of sophistication than the average freshman can be observed to possess. Do students have an acute sense of the quality gradient between the best and the rest? Why is the marginal student not drawn to study CS at a top school, and why would a top student not want to study CS at a non-top school, especially if he or she can find boot camps and MOOCs to bolster learning? I would not glance at what students do and immediately derive that they’re hyperrational creatures.

10. Psychological burn from the dotcom bubble. Have people been deeply scarred by the big tech bubble? It bursted in 2001; if CS majors who went through it experienced a long period of difficulty, then it could be the case that they successfully warned off younger people from majoring in it. To prove this, we’d have to see if people who graduated after the bubble did have a hard time, and if college students are generally aware of the difficulties experienced by graduates from previous years.

11. No pipeline issues anymore. In 2014, the number of people majoring in CS surpassed the figure in 2005, the previous peak. In 2015, that figure was higher still. And based on anecdotal evidence, it seems like there are many more people taking CS intro classes than ever before. 2014 corresponds to four years after The Social Network movie came out; that did seem to make people more excited for startups, so perhaps tech wasn’t as central then as it seems now.

I like to think of The Social Network as the Liar’s Poker of the tech world: An intended cautionary tale of an industry that instead hugely glamorized it to the wrong people. The Straussian reading of these two works, of course, is that Liar’s Poker and The Social Network had every intention to glamorize their respective industries; the piously-voiced regrets by their creators are absolutely not to be believed.

Even if the pipeline is bursting today, the puzzle is why high wages and the cultural centrality of Silicon Valley have not drawn in more people in the previous decade. Anyone who offers an argument also has to explain why things are different today than in 2005. Perhaps I’ve overstated how cool tech was before 2010.


A few last thoughts:

If this post is listed on Hacker News, I invite people to comment there or on this post to offer discussion. In general, I would push on people to explain not just what the problems are in the industry, but how they deter college students from pursuing a major in CS. College freshmen aren’t expected to display hyperrationality on campus or for their future. Why should we look for college students to have a keen appreciation of the exponential gradient between different skill levels, or potential physical problems associated with coding, or the lack of training provided by companies to new grads? Remember, college students make irrational choices in major selection all the time. What deters them from studying this exciting, high-wage profession? Why do they go into math, physics, or engineering in higher numbers instead?

I wonder to what extent faculties are too strict with their standards, unwilling to let just anyone enter the field, especially for those who are jobs-minded. Software errors are usually reversible; CS departments aren’t graduating bridge engineers. If we blame faculty, should people be pushing for a radical relaxation/re-orientation of standards in CS departments?

Let’s go to the top end of talent. Another question I think about now: To what extent are developers affected by power law distributions? Is it the case that the top say 25 machine learning engineers in the world as worth as much as the next 300 best machine learning engineers together, who are worth as much as the next best 1500? If this is valid, how should we evaluate the positioning of the largest tech companies?

Perhaps this is a good time to bring up the idea that the tech sector may be smaller than we think. By a generous definition, 20% of the workers in the Bay Area work in tech. Matt Klein at FT Alphaville calculates that the US software sector is big neither in employment nor in value-added terms. Software may be eating the world, but right now it’s either taking small bites, or we’re not able to measure it well.

Finally, a more meditative, grander question from Peter Thiel: “How big is the tech industry? Is it enough to save all Western Civilization? Enough to save the United States? Enough to save the state of California? I think that it’s large enough to bail out the government workers’ unions in the city of San Francisco.”

Thanks to Dave Petersen for offering helpful comments.


Addenda, May 30th:

I’m pleased that this post has generated more discussion here in the comment section, on Hacker News, Reddit, and on Twitter. On Twitter, Evan Soltas pointed to an article from Eric Roberts, a professor at Stanford, discussing this question from a longer term view.

Several people remarked that my rebasing of majors to 2005 is misleading because of the impact of the dotcom bubble. I only gestured at it in the post above, but it probably explains a big chunk of why the number of CS majors hasn’t risen. So here’s a more full chart, from Eric Roberts’ article, with the number of CS majors starting from 1975.

Wow, the number of people graduating with CS degrees is really cyclical. The first peak in 1985 corresponds to the release of the IBM Personal Computer. The second peak corresponds to the 2001 dotcom bubble. I agree now that the ’01 bubble explains a lot of the decline afterwards; people graduated into a bad job market and that scared many students away. That year, however, may have been the worst of it; by 2005, Google had IPO’d, Facebook was spreading on campuses, the iPod was a success, and the iPhone would be released two years later. Those companies drew students back into studying CS, and we can see that from the rise again in 2009.

This is a neat story, but still I have to confess some surprise. Should it take 15 years before the popping of the bubble before we see that college students are graduating with the same degrees again? I guess so, and I’m interested if other industries have experienced a similar lag. Were people entering school say in 2003 acutely aware of how badly fresh graduates were suffering? Were they very well aware of then market conditions, and decided that things were too risky? Why didn’t freshmen/sophomores course correct earlier when they saw that the bubble had bursted?

Elsewhere, Matt Sherman points out this survey from Stack Overflow, which shows that three-quarters of developers have a bachelor’s degree or above, alongside much other interesting data. Alice Maz and an email correspondent remark that people decide on majors because they’re driven by fear of failure, not for high wages; that explains why so many people are fighting for med school spots. I like that Bjoern Michaelsen and commenters below have pointed out that developers suffer from significant skill depreciation and limited job security; I suppose that this is stuff that undergrads are able to intuit. And several people have remarked on mid-aughts fears that all software development would be outsourced to India; I had been unaware of the strength of this fear.

I’d like to finally remark that this could be an interesting project for more serious researchers to pick up. I wrote this out of fun on my leisure time, and invite others to study how cyclical demand for this major is, what the supply constraints are, and the quality gradient between the developers. Someone more serious than me can also discuss how the NCES aggregates different majors in these categories; perhaps a more granular breakdown is more helpful. Wage data especially might be helpful to overlay here. In the meantime, I invite people to keep commenting here.

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