Thursday, December 22, 2016

We are being lied to! (oh, boy, are we!)

Let’s begin giving credit where credit is due, with the proverbial image that is worth a thousand words:

For those that arrived yesterday from an entirely different planet, too distant to ever have received the most cursory communication from Earth, the gentleman depicted above is Jim Wendler, the author of one of the finest methods for getting insanely strong ever devised by any human being (5/3/1, which I’ve been using in any of its multiple variants, for years and years). I hope you’ve noticed the sentence I’ve taken as title of this post is a more encompassing version of the one originally penned by him seen in the photograph (which you can buy nicely emblazoned on a T-shirt or a hoodie in his web site, btw). Mr. Wendler probably refers mainly to the habits of training and eating peddled by the so-called “fitness industry”, which are oriented mainly towards the enrichment of the trainers and the peddlers, and not so much to the overall health and well-being (and even less to the strength and general “awesomeness”) of the unsuspecting consumers of their pabulum.

But the concept could very well be applied to the whole cultural industry, which in turn is but the conveyor belt that society uses to transmit the ideas, values and opinions that the majority needs to embrace to keep it in working condition. I’ve contended a number of times that most of those ideas, values and opinions are not just false, but noxious. They do indeed keep the society working and reproducing itself, but at what a price! At the price of making its members miserable, of pushing them to live lives of quiet (or not so quiet) desperation. Lives that are literally not worth living (and people, consciously or unconsciously recognize such worthlessness, and react the only way left to them: by voting with their gonads not to reproduce such insanity, not to keep the system going for a single generation more).

Not a nice state of affairs. And the fight against it starts with denouncing the lies we collectively tell ourselves to keep it going, with exposing them and invalidating them and pointing their inconsistencies, showing how they seem plausible only because they are repeated so many times. But their plausibility does not derive from being so relentlessly drilled, but rather from benefitting some few at the expense of the majority (one of the many funny aspects of a dominant reason is that those few benefited by them are not even aware of the untruth on which their worldview rests; they do not even have to actively and consciously push the falsities on which their dominance depends).

So let’s do our part today by reviewing a somewhat schematic and summarized list of the lies we are almost daily being told:

Lie # 1: thanks to our social system (capitalism) we are growing richer every day

That one seems almost like a cinch, doesn’t it? If there is a stablished truth, almost written in stone, is how lucky we are to have inherited such a fantastic social system that has allowed us to enjoy more wealth than any previous generation in the whole history of the human race.
For example, here is what one of the most widely used textbooks on economics (Samuelson & Nordhaus) present us with right in the first page of their treatise:

Pretty impressive, uh? Focusing just on the last 45 years (since 1970) the national product has grown from about six times what we produced at the beginning of the XX century to an astounding thirty times, a more than fivefold increase. If you are interested in the raw data, the US of A went from collectively exchanging goods and services valued at about 1.076 trillion of 2015 dollars in 1970 to 18.037 trillion of equivalent dollars in (you guessed it) 2015.

Part of that improvement was caused by the raw increase in population (more people producing goods and providing services), that grew from roughly 200 million souls in 1970 to 321 million in 2015. However, the image of per capita  GDP growth is similarly impressive, from roughly 5,500 dollars/year (again, in 2015 dollars) in 1970 to a tad above 56,000 dollars/ year today:

So is it a closed case? Can we accept that, after a (relatively minor, seen in perspective) bump after the 2008 recession, the system is indeed creating untold amounts of wealth for everybody? Should we rest contented being the luckiest humans being that have ever lived? Nope, unless you have  very warped understanding of who “we” are (or you are damn lucky), as if we look not at how average per capita GDP has grown, but at how median income has, the picture looks quite different:

So what is it? How is it possible that the average GDP per capita has grown 1,000 % (is ten times bigger what it was in 1970) but median income has barely budged (has grown a paltry 12%, from around 50,000 USD to 56,000 USD)? What kind of statistical trickery is this?
Let’s explain it with an easy-to-understand slide (which has taken quite a few hours to prepare, btw), assuming a simplified economy where all income is in the form of cooked chickens, which allows us to compare how we are faring today with how we fared almost half a century ago:

So in 1970 I (I’m standing here for the whole 20% of the population with a higher income, or 80% quintile) the average income was 1 chicken per person, I did a bit better (earning one chicken and a half), you did about as well as the people around you (your brother in law and that annoying neighbor that kept throwing noisy stoner parties, all of which stood in the three central quintiles), which in turn did significantly better than the lower quintile.

But fast forward 45 years, and see what has happened: the lower quintile has improved substantially, so they now earn practically as much as yourself. You are still earning what you did back then, as is your in-law and the annoying neighbor (that somehow has survived through all his drug use). But the average income has skyrocketed to an astounding ten chickens per person! How come? Simply put, me and the likes of me have hoarded almost all the gains, and now make a whooping 45 chickens.

At a global level, the phenomenon was recently identified by Branko Milanovic (which has an excellent blog I recently added to the right side of my own) in a much commented and discussed graph charting the changing fortunes of different income groups aggregated for the whole world (thus going beyond the national analyses we were used to):
So it’s not surprising all of you are pretty pissed off! Of course you are voting for Trump, Brexit, against Italy’s constitutional reform, for the Law& Order party or the Front National! Not only have you not reaped any benefit at all from globalization, the supposed economic growth and whatnot, but you are seeing some people (me) making it royally, and the meager consolation you had (there are those “other people” that are in much worse shape than you) is slowly disappearing. Not that it was a strongly defensible (from a moral point of view) consolation but hey! You take what you can and try to make the most from the hand you’ve been given.

In summary, we can safely dispel with the myth that the system works because the economy grows and we are in a Paretian paradise where everybody is either better of or as well off as they were, and nobody is worse off. Because the bunch that has seen no significant improvement in almost fifty years is indeed considerably worse off. Worse off because they see the distance between themselves and the top quintile increasing beyond any limit. Worse off because to maintain the lifestyle they were accustomed to (the one their fathers enjoyed) they have to work significantly more hours (thanks to the incorporation of women to the labor market, as let’s not forget their forebears enjoyed a very similar income level with almost half of the paid effort, as typically only the husband worked outside the home). Worse off because their parents, in addition to amass almost the same amount of wealth than them also managed to reproduce and put in place a generation to pay for their retirement, something the current generation is failing to do…

I already identified as one of the sources of the current malaise the realization by a growing number of workers than they are indeed not living any better than their parents did, a realization recently shared by none other than my very admired newspaper of record (The American dream seems pretty moribund):

So a system built on the premise (and the promise) of never ending material improvement is showing itself to be more and more incapable to fulfill such expectation… expect people to be more and more angry as they realize what they would get in exchange for hard work and endless sacrifice is a life of never improving drudgery.

Lie # 2: thanks to the spread of innovations, technology will solve all of our problems

Nope again, not only innovations are more and more circumscribed to a somewhat collateral domain (software development, which creates programs of less and less impact on people lives), but even in that restricted domain they are slowing down

Lie # 3: thanks to our superior knowledge, we are healthier and will soon live over a thousand years

Nope, doesn’t matter if you put your hopes on knowing more how genes work, knowing more how aging works, or knowing more how nanomachines could interact with every single cell of our bodies, you will still die (irreversibly, finally, ultimately, in a “that’s all folks”-y way) before your 100th birthday.

OK, obviously I’m running late and didn’t have the time to properly develop the last two lies, probably will make it in subsequent posts. An awful way to stop for today, but remember nobody’s payin’ me for this

Wednesday, December 14, 2016

The shortcomings of Economics II (interlude)

In my last post I argued basically that Economics (the discipline shaped and practiced by university professors, students, uncountable employees and executives distributed in tens of thousands of private and public enterprises along the world, as well as in government positions and as consultants and accountants and occasional entrepreneurs) is a sham. A con job. An ideological construct (in the old Marxist sense) without an atom of empirically verifiable truth within it.  

At the core of such accusation was the idea that economics offers only the skeleton of a theory in the form of equations that are not really equations. So in any Econ101 text you will find that demand (number of units demanded) is a function of the price: D = f(p), and is a monotonically decreasing function at that (so its derivate must be negative): df/dp < 0. Similarly we are told that supply (amount of units supplied) is a function of price, and labor (total number of hours offered by employees) is a function of wages (which is but another name for the price of hours worked in exchange for a salary), etc.

Which sounds “mathematicky” and “scienty”, but is really either a tautology (a statement that, being always true, tells us nothing new about the world) or empty verbiage with very little explanatory power. Putting seemingly common sense ideas (“the law of diminishing returns”, “the equalization of marginal costs and marginal utilities”) in a mathematical formalism apparently allows to understand them better and explore better their implications. It’s called “building a model”, it is understood that the “equations” are not really tools for providing testable predictions of how the real world works, but simplified representations that can indeed help us, in practice… predict how the world works.

According to this line of defense, the shadow of an equation is the second best thing (I guess after a “real” equation) to understand the infinitely complex realities of economic interactions, and not that different from what we encounter in physics or chemistry. When we read that the gravitational attraction between two bodies is directly proportional to the product of their masses and inversely proportional to the square of their distance (F = G x m1 x m2 / d2) that is also an approximation (we can only know G, the gravitational constant, up to a certain level of exactitude, which could mask that the formula is not as precise as it sounds, but an approximation that masks the contribution of additional factors, not to mention that it is valid, even approximately valid, for non-relativistic conditions -when both bodies are relatively stationary or move at speeds much below that of light). Although the engineering part of me feels strongly tempted to dismiss such argument as ludicrous, wooly-headed and downright idiotic, I’m going to give it some unmerited credit and expose its tomfoolery by devoting the remainder of today’s post to highlight the difference between what the knowledge of “economic laws” allow us to predict of how the world behaves and what the knowledge of good ol’ plain physical laws allow by imagining a world where the later are as well known as the former.

Thus, let’s imagine a world where all we know about how the natural world behaves is that it follows “pseudo-equations” of whose real content we know nothing at all. We don’t know what variables underlie the exhibited properties of any system, and what the variation of those variables may cause in the observed output we may choose to measure. All we know is there are “relationships”, and we may have some (not very reliable) inklings about the monotonicity of such relationships. To make it more understandable, I’ll illustrate such a world by the interaction between two characters, a Young Engineer called YE that has just started to work in an engineering company, and an old hand (unimaginatively called OH) that has to teach him the tricks of the trade:

YE: Good morning, Mr. Oh, I was told to ask you for some help in my new assignment

OH: Well, good morning, kid. Pleased to meet you. You’ve come to the right place, yes you have, as I am well known in our company for being not only very knowledgeable, but also kind and patient with young guns wanting to prove their mettle and find their way around. What is it that you have to do?

YE: Well, I have to calculate the diameter and the thickness of the pipes that go into the boiler of a new combined cycle power plant that we are designing.

OH: Now that’s a honorable and exciting task, isn’t it? And a serious one to boot! Make the pipes too big and thick and they will be too expensive, and difficult to support for the metallic structure that is being designed at the same time. Make ‘em too small or thin and they may crack or, even worse, blow up when their valves are closed, and seriously damage the plant. What input data have they given you?

YE: I know the height of the boiler intakes, and the water flow it needs (in gallons per minute) under different operational modes. I also have the performance curve for the pumps that have been selected to be at the base of the boiler and that will push the water

OH: Good, good, so the first thing you have to know is that the pressure loss the pumps will need to overcome is a function of the diameter of the pipes, and of the total flow that goes through them: TDH = f(D,F)

YE (smugly): Yep, I already know that, they teach that to us in engineering school

OH: Oh, that’s great, isn’t it? You’ve got a lot of  the bases covered, then. The other thing you need to know is that the loss of pressure grows with the flow of water, and decreases with the diameter of the pipe: df/dD < 0 and df/dF > 0

YE (a whiff of impatience starts showing in his voice): yep, I also knew that already

OH: well, my boy, then this is the final thing you have to know: WE DON’T HAVE THE DARNEDEST IDEA OF ANYTHING ELSE ABOUT WHAT THE RELATIONSHIP BETWEEN TDH, D AND F IS.

YE: What?

OH: You heard me right. Just no clue.

YE: What do you mean no clue?

OH: what you just heard. There are lots of theories, of course. A bunch of people call themselves “pipe neokeynesians” and maintain that after reaching some maximum the pressure loss may start increasing with an increase in the diameter of the pipe. Another lot (“pipe monetarists”) say that when the flow diminishes beyond certain point (“zero boundary”) it doesn’t matter what you do any more because the pressure loss remains constant. Nobody has been able to prove one or the other, and of course they don’t know either what those conditions may be beyond which the behavior of the water in the pipe changes

YE: But, but… couldn’t this things be, I don’t know, like, be tested? Couldn’t some experiments be run and so those “equations” be a bit more fleshed out, so for example we could determine the coefficients and the relationships between the variables. To arrive at something of the form, I don’t know, v x v/2+ gz + p/d = K (and then determine the value of K for different fluids and different materials of the pipe)???? So I could know the pressure of the fluid, and then see how that pressure affected the section of the pipe at each point?

OH: No, no, nonononononono… that’s a rookie’s mistake, thinking that such relationships can be teased out. You have to realize that nature is really complex, and that this field of research is the most complicated you can imagine. You really would have to take many, many more things into account than the fluid and condition of the inner surface of the pipe: what about the fluid temperature? How viscous it is because of impurities? The air temperature? The possible vibrations due to wind? The noise of the turbine nearby? Lingering effects of past earthquakes? The position of the moon and the stars? Any attempt to try to define anything more precise than TDH = f(D,F) is doomed to fail once and again, to be thoroughly disproved, to throw the whole field of hydrodynamics into disrepute and to reveal more exceptions than rules and to sow more confusion than clarity

YE: But… again, even if we can’t find a detailed relationship to define the pressure within the pipe, and the diameter to limit the internal speed of the fluid, and matrix of forces at each point of the pipe (depending on the thickness), can’t we at least plot the main variables and thus go to such graphic and find the values I need so I can solve the problem I’ve been given

OH: Well, we could do some nice graphs, sure, but they could not have any units on them, so they wouldn0t be of much use

YE: Why is that?

OH: At the beginning of time that method was attempted, and essentially found wanting. Depending on who drew the graphs the units were different, but for some unknown reason the shape was always the same. Thus they lost all credibility. Furthermore, used by different people they predicted wildly different values: where one engineer understood that a 25 inch stainless steel pipe two inches thick was needed, another concluded that a 2 inch PVC pipe 2/16 inches thick would be more than enough, and there was no way on Earth to make them agree. If you asked for the opinion of a third engineer with more experience, he would proffer a third combination, and the ensuing discussion could last for months, so no projects could ever be completed. So the profession decided it was best not even to attempt to reach numerically precise values

YE: So, how should I answer my supervisor? How can a respond to her request for a numerically precise value?

OH (speaking very, very softly): well, kid, this is the dirty little secret of our trade I’m about to tell you. Do as we all end up doing: go to the archive, find a previous project we have already design, take whatever number we used there, and use those

YE: But what if she asks me to justify those numbers?

OH: Again, do as we all do. Invent any contorted justification, make it as confusing and difficult to follow as possible, and the defend it so vehemently that nobody can reasonably judge it may conceivably be worth the effort to contradict you

If nothing better could be said, I’m pretty sure Ye would leave somewhat dejected and disappointed, but would in the end follow Oh’s advice, and in the end being as self-assured and confident in his engineering abilities as you could dream of.

Of course, in such a world power plants would be either outrageously expensive (but as in our world, that would greatly depend on what you compared them with…not that they would have a labor theory of value to explain in crystal clear terms why things cost what they cost) or dramatically unreliable. Just to be clear, that’s NOT the world we live in. We are clueless about what effect a raise in the interest rate may have. We are clueless about what may happen if the minimum wage is raised (heck, it is not as clear as I thought it was that the overall level of employment will fall, as that happens ceteris paribus… but all the rest never stays the same). But we do know pretty well how big and thick the pipes going into the boilers should be. And how much fuel (or gas, or coal) those boilers should burn to send a certain amount of steam to the turbine. And how many megawatts the turbine will in turn allow the generator attached to its shaft to pour in the electrical grid.

Now for how those megawatts should be priced, that is an entirely different story… 

Wednesday, December 7, 2016

The shortcomings of Economics (and yes, it is once more about Trump…)

It will come as a surprise to exactly none of my regular readers (all two or three of them) that I am not especially fond of the discipline (I refuse to refer to it with the more exalted adjective of “science”) of Economics. After finishing my MsC in industrial engineering I halfheartedly pursued a degree in Business Administration for three years, but the sheer lack of structure and outright irrationality of the field (and the growing demands of my day job, it has to be said) finally made me to give up and shift my attention to other interests (although more than ten years would pass before I came back to academia, this time to pursue a PhD in philosophy which only this year I completed). It may be argued that trying to obtain a degree in a “social science” (a hodgepodge of some tidbits of knowledge successfully hidden within tons upon tons of half-baked opinion and crass ideology with no regard whatsoever for any semblance of “objective truth”, to the point that the very same concept of truth is utterly discredited and suspect) after getting one in engineering is like trying to bang a 10 $/hour hooker after successfully dating Giselle Bündchen (not that I especially fancy Ms. Bündchen, but I hope you get the idea). Be it as it may, I pride myself of being an intellectually curious guy and to follow whatever train of thought may help me to better understand the universe we inhabit, wherever such pursuit may lead me (I was also a victim of the dominant narrative, originated in Marx’s thought no less, that holds economic relations are somehow the “real” explanation behind how the world works).

As anyone who has ever held an unpopular opinion may readily concede (I hope a position most of my readers have experienced sometimes), being subjected to a constant barrage of dissent can make even the staunchest and sternest believer waver in his beliefs, so after more than a decade hearing from every reputable opinion maker how Economics is the “queen” of the social disciplines; how its epistemic status is undisputed and any other discipline aspires to reach its lofty position; how elections should be decided by the economic content of the platforms (“it’s the economy, stupid!”); how the more or less economic literacy of a candidate (or his/her advisers) should be the most important factor to consider when deciding who to vote for; how the economic impact of any election (most markedly in recent times in the cases of Brexit and the Colombian peace deal between the government and the FARC) should be the first aspect in people’s minds; I hope I can be excused if I say I felt gently pushed (or, more accurately, almost bludgeoned to death) to reconsider my initial distrust and even open scorn for the field and  give it a fresh new look.

Now, when I say “a new look” I don’t mean “let’s read a couple Wikipedia articles, peruse some issues of The Economist and weekly glance at the salmon press somewhat nonchalantly”. May be the way Economics was taught in the University I attended was just not good, maybe I was missing the real deal, and was just for all practical purposes unschooled, and thus my distrust was just a product of my ignorance. So, having made a firm decision to remedy such potential source of error, I went back to The Wealth of Nations (I had read it as moral philosophy, and wanted to check on the labor theory of value as seeming quite foundational for the whole field of Economics), to Ricardo’s Principles of Political Economy and Taxation and to Stuart Mill’s Principles of Political Economy (yup, the good ol’ Classical economists were not the most original of men when it came to giving titles to their works). Wow, wow, wow, you may say, that’s really old stuff! Nothing to do with how Economics has evolved and how it is taught in modern schools! I know, I know, just bear with me for a little longer. I just wanted to have a better grasp of how this kind of thing started, so I also read Steuart’s Enquiry into the Principles of Political Economy, Hume’s Essays having to do with economic issues (“of Money”, “of Interest”, “of the Balance of Trade” and “of Commerce”) and (more recently) the Tableau Économique by Quesnay. I’ll get into more detail about what I learned and what I think of such foundational works (short summary: mostly a befuddling mix of tautologies and wishful thinking), but let’s continue with what I did to ensure I was not judging the august body of knowledge unfairly: I then moved on to the neoclassical thinkers, reading Marshall’s Principles of Economics (interesting that the “political” part had been dropped), Jevons’ The Principles of Economics (that charming originality when it comes to titles, again) and Pigou’s The Economics of Welfare. All of them served as an appetizer for Keynes’ The General Theory of Employment, Interest and Money (with the Essays on Persuasion thrown in the mix just for fun). 

Still old news, and not much used to shape the economic thinking of contemporary students! Yup, I know, so after having gone through those mostly forgotten texts I went right away to Samuelson and Nordhaus’ Economics (not the latest edition, it was the eighteenth, printed in 2007, so it may have been updated -indeed, some of its final policy endorsements and criticism of fiscal policy vs. monetary seems way outdated), Friedman A Monetary History of the United States, 1867-1960, Becker’s The Economic Approach to Human Behavior (which, btw, I’ve repeatedly said is literally the worst book I’ve ever read) and then mostly papers and articles (of note was Coase’s The Nature of the Firm, from which I’ve profited nicely in my current line of work), as I couldn’t find any more books of similar standing to convey a good, comprehensive overview of the discipline.

There may be some picky reader that would object that my understanding of the field of Economics is still incomplete or not up to date enough (please feel free to leave your suggestions of what else I may read to correct such deficiency in the comments section or, not to put it too politely, STFU), I may only add that in sixteen years as management consultant(followed by five years as a C-Level executive in a multinational firm) I’ve been exposed to what a wide array of companies (mostly big corporations, with an oversized impact in their countries’ GDP) do to maximize their benefit and decide what to produce, how to distribute it and how to report it to the (mostly unsuspecting and hapless) public, so I honestly don’t feel like any professor may school me substantially in how a modern economy actually works.

Hoping to have stablished good enough bona fides for what is about to be said, let’s review a short selection of the problems I see with how the field of inquiry has been shaped from its inception:

The shape of Demands to come

The basic unit of analysis for Economics is supposedly what people “want”. When they get what they want they derive satisfaction from it, and such satisfaction is also known as “utility”. Thus, the maximization of utility is posited as the main goal of any rational being, and the means for such maximization are the consumption (or rather the acquisition) of the mix of goods that would yield the maximum utility. Such understanding of humanity is hopelessly flawed, and based on a purely circular logic (note that utility lends itself admirably well to maximization by being an unmeasurable quantity that just happens to be expressed as a function of what we consume) that leaves no space for things like being in a stable, fulfilling relationship, enjoying a clean environment, being in good health (rather the opposite, good natural and spontaneous health is a source of disutility, as it prevents us from spending in medicines) or enjoying a good book or music from the local library (which has costed us nothing).

But let’s leave aside for a moment the essential incompleteness of the economic understanding of men’s motives, and try to delve a bit deeper in how such understanding can at least be useful to model (and thus predict) at least some elements of people’s behaviors. According to economists (in their neoclassical, or marginalist, interpretation) the utility that people derive from the acquisition of a particular good is a function of how many items of that same good it has already acquired, so the value that a person would assign to adding one more item to its existing stock (hence what he would be willing to pay for it) can be calculated by just knowing the amount he already has. To be more precise, in the majority of cases it will be a decreasing function, as additional units will be less enjoyable, less useful (or producing less pleasure), thus less valuable. In the arch-famous representation devised by Marshall, the “demand curve” has a downward slope:
Seems intuitive enough, right? Unfortunately, a cursory reflection shows that this is not, by a long shot, how people think of most of the things they do, let alone about the things they buy. First, although it may make some sense for commodities (those items that are interchangeable, exactly alike) like loaves of bread or gallons of tap water, it doesn’t work so well for the growing percentage of purchases in a knowledge economy that are not commodities, like information or unique experiences (what is the value of purchasing a book you have just read or a song you have just downloaded and copied? It may very well be zero; what about a travel to a unique location? Ditto, after being there and ticking it off from your bucket list you may very well not want to return in a number of years… the demand curve would then be a single step, with a certain value for Q=1 and zero for every other value of Q). If you are a collector, the additional items of a certain category that you acquire to complete certain areas of your prized collection may not have a decreasing marginal value to you, but an increasing one. And finally, depending on the moment of the day, of the lifecycle, and the location, exactly the same item may have very different values to the same person, regardless of how many of those he already has (like the proverbial bottle of water after an exhausting workout in the gym that makes your regular bro be willing to pay three times the normal price, regarding of how many more he may have in his home’s fridge). In sum, the demand curve is an invalid construct as it does not “explain” in any meaningful sense neither an individual’s choice (how many money, or effort, he would be willing to forswear to obtain an additional unit of a certain good) nor the collective one (it can not be aggregated to guess how much a whole group would be willing to pay for a certain amount of said good, as it doesn’t accurately reflect the real value for any of the members of the group at any value of Q).

My own experience tends to confirm such uselessness of the model. After having covered the basic concepts of supply and demand in one of the subjects (“economic organization of production”) within the syllabus of my engineering training, I was mildly surprised that none of the companies I worked for had the slightest idea of what the demand curve for their products was (starting with my employer, a consulting firm, ad going through all my clients, be they telecommunication companies, utilities, industrial conglomerates or consumer products manufacturers). They did build predictive models of how variations in the price of their different product lines would affect the amount they would be able to sell, but they all had to resort to a host of additional variables that gave very little (if any at all) weight to the total amount they and their competitors poured in the market (or the amount their clients may already have).

OK, so may be Economics has not been very good at coming with a simple model able to predict the amount of any merchandise that clients may buy, no big deal as such imperfect model may still be useful when combined with the (similarly flawed) one used to predict how much of each merchandise the producers will supply. Fat chance, but that forces us to turn to

Supply and the supplyin’ suppliers

In the neoclassical model, consumption decisions are made by consumers (duh!) of each commodity in accordance with the demand curve. What about the decisions that determine how much of each commodity will be manufactured (and thus offered in the market)? As you may imagine, for symmetry’s sake an elegant model was devised to define how much (how many items) of any merchandise will be produced, based on how much it costs to produce the latest item (that is, the only variable taken into consideration is how many items are produced in total). Since the beginning it was supposed that each additional item would be more costly to produce, as it would require additional units of the different inputs that went into its production that would eventually interfere between them (in what has been considered an almost universal law of nature: the law of diminishing returns), so the equivalent of the demand curve would be a “supply curve” that would slope upwards:
Again, any person that has actually managed a production facility would scratch his head seeing this, as normally the opposite of what it depicts is the case: up to a certain extent (where you have to expand your facilities, incur in additional costs for new plant, machinery and labor and thus give a big boost to costs), the more units you produce the cheaper you can sell them, because you have more units between which to distribute your fixed costs and thus the average cost per unit (which consist in the sum of the variable cost, that tend to be constant per unit within certain range, and the fixed cost divided by the number of units produced) goes down with the increase in units.

As with the demand curve, I’ve seen (and led) complex projects to help my clients set up cost accounting so they could better understand how much it costed them to produce each unit (at the margins or not), and I can tell you that the total amount produced was the smaller of the contributors, dwarfed by the cost of the raw materials, labor, communications and transportation, amortizations (depending on the industry) and other financial costs. Yup, in the long term all of them could be treated as variable, but the production decisions are rarely taken “in the long term”, the problem managers have to solve is how much to produce (and what resources to commit) in the shortest of terms, in the next shift, in the current fiscal year, given the overall business cycle. So unsurprisingly nobody cares a iota for the classical supply curve (heck, nobody would even know what their supply curve, understood as the marginal cost of producing an additional unit based only on the total level of output, is).

So we have a theory which neither does adequately model how people make their purchasing decisions nor fares any better modeling how firms make their production decisions. What could go wrong? Of course, when you put those two together (technically adding every consumer’s decisions to create an “aggregate demand” curve, and doing the same for every producer’s to create the “aggregate supply”) you get the mythical spot where demand equals supply, and which defines the price at which the market “clears”: if the price is a bit higher, being above what consumers would pay for that amount the unsold inventories would pile up and force producers to reduce their output; if the price is a bit lower consumers would snatch up the existences, creating scarcities and inducing manufacturers to produce more. Which I dare to say is a big load of balderdash, and does not reflect what has ever happened in a market in the whole history of the human race (well, that may be too strong a statement, may be the pork bellies futures’ market in Chicago has some time or other seen such miraculous coincidence happen). To a certain extent, even economists recognize the very limited applicability of such model, as they proffer it is only valid to describe the expected behavior of “perfectly competitive markets”, which are again as doubtful of ever having existed (with the aforementioned exception of pork bellies futures) as the tooth fairy or the Easter bunny.

Let’s stop for a minute to take stock of where we stand. We have a theoretical framework that professes to be of some help to decide the “best” use of limited resources that have alternative uses (“best” being the one conductive to a greater sum of individual utility for those involved in the enjoyment of the products of such resources), but such framework is defective when it comes to decide:

·         How to allocate our (limited) consumption budget (i.e. what to consume)

·         How to decide what quantities to produce

·         How prices are set (and thus, if the price level is adequate, fair, conductive to a just distribution of the social effort, etc.)

Such is life. However, that is the realms of microeconomics, which sometimes is compared with the nebulous relationships postulated as much as observed between the evanescent entities of quantum dynamics. It may be similarly said that even though we are not very sure of what it is that we measure and predict when talking about an elementary particle’s spin or mass or momentum, but when we just blindly apply the model and solve the equations what comes out happens to coincide surprisingly well with how the world (at a macroscopic level, amenable to measurement) behaves. Stretching our analogy, when we put together the simple but powerful models of supply and demand and apply them to the goods market, the labor market and the money market we obtain the triple equilibrium (or general equilibrium) that actually describe how a modern economy works…

Balancing the balances (it’s not Karma, it's even better!)

Do not pay attention to the inconvenient fact that almost not a single market works according to the dynamics of classical supply and demand. If there are markets that deviate from such model, they surely are the market for salaried workers (labor market) and the market for means of payment (the money market). Hell, even most goods are either subject to heavy regulations or offered by a very small number of suppliers that can exert an unduly influence both in the amount of merchandise offered for exchange and in its price. But that doesn’t prevent the whole field to have swooned over the stroke of genius of linking together precisely those three types of exchanges:

Just brilliant, now you really understand how the total production of goods and services of an economy (national Gross Domestic Product), the price level, the employment rate (more or less dictated by the total hours worked), the salaries paid, the amount of money in circulation and the interest rate all relate to each other, and by varying one of them you know how all the other variables may vary. Wow! Really something. When I learned about all this I really wondered why there were still cyclical depressions (I learned it in the early 90’s, quite dire times in Europe although the USA were beginning its longest recorded expansionary phase). And do you know what the answer is? Pick at random literally any post by Paul Krugman in the NYT and Ken Rogoff (latest one in the Grauniad: The dark side of Rogoff) and you will soon find out. Keynes may have been a respected genius, but nobody knows how to separate heads from tails regarding his brilliant insights, and none of the models built after them has stood too well the passing of time (the stagnation of the 70’s is widely understood as having driven the proverbial last nail on the coffin of standard Keynesianism, thus what we have today is “neo-Keynesianism”, which battles with neo-Fisherism and neo-monetarism and a bunch of other old novelties for a supremacy that never seems to be attained for long). None of the above presented curves is really known (by any accepted methodology), so really the best prediction of how much a country’s GDP may improve if we raise 1%the interest rate is anybody’s guess. The best prediction of how much we could reduce the rate of unemployment by the same raise? Anybody’s guess. The best prediction of how much inflation we would have if we increased aggregate demand by a certain amount through public purchases, or public investment in infrastructure? You already know the answer: anybody’s guess…

Not surprising, giving that the elementary components used to build the integrated model are, each of them, highly dubious and of questionable validity. Even calling them “models” is a misrepresentation, as all they really are are attempts to pass as a continuous function (represented by an equation, unfortunately one whose terms are never known) what is nothing but a bunch of individual, isolated observations which only seem to share a regression coefficient (something that really we, as observers, impose on the data, and not something we could claim the data present us with).

But what, then about the brilliant mathematical models that the discipline has developed and that have been empirically validated? Every time I hear such comment I tend to ask what models are we talking about, because what I’ve mostly read in the more detailed, supposedly more advanced literature are “ghosts” of functions that are differentiated (and equaled to zero to find their maxima or minima as if that was a highly esoteric, highly respectability-enhancing procedure that could stand for the lack of true understanding of what kind of relationship they were supposedly revealing) but about whose underlying nature very little is actually said or presented as evidence (the worst offender in this area is, as far as I’ve seen, Becker, whose debunking would merit a post of its own). But from a ghost of a function, from the formal structure of what a function would look like (but with very little actual content of what it actually poses) very little can be either predicted or actually measured. No kidding the falsifiability of most economic theories has proved so hard, and all the “neos” I mentioned before have shown such a resilience, regardless of how many economists have come out saying they had been thoroughly disproved.

However, how much of such disproving has actually succeeded will be the subject of a future post, along with how such failure indeed explains in part the success of Trump in the latest USA presidential election.

Friday, November 25, 2016

Keep lifting after the honeymoon phase is over

As princess Irulan, daughter of emperor Shaddam IV Padisha famously states at the beginning of the first tome of Frank Herbert’s Dune, “a beginning is a very delicate time”. Indeed, in my bookish childhood beginnings were a dreary business. Every time I immersed myself in a new book (that was many times a week) I had to first find my bearings. I read mostly fiction then, and a good deal of science-fiction, and God knows that science-fiction beginnings are dazzling and confusing and disorienting. It’s not just entering in a new place, populated by people you still don’t know anything about, but on a whole new universe where the usual laws of physics may not entirely apply, where societies are systematically imagined to work differently (but in the end not that differently) from your own, and where customs and mores and unspoken assumptions can’t be relied upon to guide you through the plot.  

To this day, acquiring a new skill is a bit like starting a new book: you feel clumsy and insecure, you soon realize you are woefully inadequate to perform it, especially when compared with more experienced practitioners, and there seem so be an unbridgeable chasm between what you can actually achieve and your aspirations. As the traditional wisdom would have it, if you persevere and keep honing your ability, you end up having a reasonable level of mastery, and you can actually start enjoying the application of such skill. Be it writing poetry, reading in a new language, playing a sport, developing web pages or drawing comics, what I’m essentially saying is that beginning sucks, but overcoming such sucking enables the patient practitioner to reap the rewards of his application and become that “better version of himself” that so many times I’ve propounded as the ultimate finality of human life.

As an aside, there are a couple activities where the beginnings are not that tough, and for some they may even result to be even more enjoyable that what comes after. The first of them is dating: when we start going out with a new prospective couple everything is peaches & cream. Everything the other person says or does is charming, amusing, interesting and a source of endless fascination. Her utterances and comments and suggestions are deep and thoughtful. Her face is an inexhaustible well of wonder, each gesture and countenance a trove of suggestions, of rich signals to be deciphered and treasured. If she happens to smile, or even more to openly laugh, what a joy, what inexpressible happiness and exultation! But as is well known, after a (sometime shorter, sometimes longer) period of time the initial wonderment wears off and the relationship has to either find a more stable, better rooted footing or wither away, to be replaced  by some new one (and we all know of people that seem unable to make their relationships grow beyond that first phase of elation and settle in a more sustainable and mature form).

The second kind of activity blessed by nature with an easy beginning, I will argue, is lifting weights. And as with relationships, it is likely to be followed by a more mature, more stable phase when there is not so much exultation and fun but, if pursued consistently, is apt to give us much firmer benefits. Now some readers may argue that the beginning of a lifting career is not that different from other complex pursuits, as we soon realize we are not that skilled, and definitely not that strong to begin with. BS, I say. Most moves are so easy a kid can learn to do ‘em in a technically sound way in 10 minutes (believe me, not only did I learn myself in such a timeframe -and I’m no genius of kinetic self-awareness- but I’ve taught my own kids to do it without much fuss), and every session brings with it the wonder of being almost effortlessly able to move more total weight than the previous one. A most exhilarating feeling, as becoming gradually (but sure-footedly) stronger is a solid foundation for a host of additional pleasurable and rewarding mental states (more self-confidence, better ability to do in a sustained way difficult thing, more tolerant to pain and discomfort, etc.)

But like in sentimental relationships, there comes a time when it is just not so fun anymore, when the prospect of going to the gym and complete the planned schedule does not fill you with joy but either leaves you somewhat indifferent or, worse, what it fills you with is dread of how difficult and painful and exhausting it will be. My contention, and what this post will argue for, is that such wholly expectable moment has to be overcome, for it is by overcoming it that we not only become better persons, but learn a valuable lesson that unlocks additional possibilities of personal growth and improvement.   

First, let’s take a look at the underlying cause of most people disenchantment. When we start lifting progress comes naturally and easily (as every experienced coach say, at the beginning almost everything “works”). Making a weak and detrained person half strong is comparatively easy, as long as you do not prescribe some utterly asinine program based on an excessive volume (or highly ballistic moves that can prove dangerous and lead to injury), regardless of age.  As long as you do not expect a 90 year-old lady to do full snatches on her first day, or ask a detrained guy of any age to do 10 sets of 10 reps each of half a dozen moves, they will be OK, and will improve from one session to the next. Some will do it at a slower pace, some will do it by leaps and bounds (young females and, especially, young males become stronger just by breathing, eating normally and sleeping well, so if you add a few compound movements it’s amazing how insanely strong they can become really fast) but all and every weak human beings have the potential to gain some strength no matter how asininely they are coached (unless they get injured, of course, so the basic boundary to effectively train them is “do not do stupid shit that can get them harmed”).

But after a few months (or may be quite a lot of months, if progress has been slower) people are more than halfway in their way to reaching their full genetic potential (a somewhat slippery concept, but bear with me for a while) and can be considered to have overcome their novice phase (that phase has a very precise meaning in Mark Rippetoe’s terminology, which we will come to in a moment). That means that to continue progressing it is not enough to do just any combination of sets and reps of nay move. Recovery within each training session, and recovery between sessions become a priority (more so the older the trainee), and if things are not balanced properly it is very common to stop progressing altogether: too much volume and little recovery and instead of being stronger and moving more weight every single day you find that what you could lift a week ago feels like it is stapled to the ground. Reduce the volume substantially and increase the rest periods (decrease frequency substantially) and you meet the same result. What gives? No wonder a lot of people in forums and seeking advice end up thinking that this lifting thing is an arcane science (or more like a dark art) that requires paying some guru a lot of moolah to be able to keep on adding a few paltry grams to the bar.

And when the required effort keeps on increasing whilst the measurable improvements keep on becoming smaller and smaller (the almost omnipresent law of diminishing returns) it is not surprising that so many people quit entirely, and stop lifting altogether. Hell, even some of the greats turn to other interests (there is a very specific transition from lifting for “performance” to lifting for “aesthetics” that take many former powerlifters to end up in bodybuilding shows which I found deeply disheartening, but I will not go into such deviancy for now) as finding the willpower to keep on punishing oneself in the gym after many years in the iron game is understandably difficult, and that’s why you see comparatively few people able to squat over 400 pounds or deadlift over 500 (something that, according to Justin Lascek, any healthy male who puts his mind to it should be able to accomplish). When it starts being difficult to further approach those numbers, they raise the foot from the gas pedal, and when understandably the car slows they let it stop altogether and divert their straying attention to other pursuits, like Pilates or Zumba, “toning” their muscles, “leaning” and other sorry excuses for working less hard and not having to push themselves so hard.

Well, I’m not here to criticize anybody, but I will say this: lifting heavy weights beats, hands down, any other form of physical activity. I’ve played rugby (great for conditioning, and much, much more fun), I’ve run until my reconstructed knee told me in not uncertain terms to shove it, I’ve shot putted (which is really a lot of heavy lifting plus jumping oddly with a cannonball that then you let go a couple times a week) and cycled and swum and rowed and skied and skated, and let me inform you they are not even close. Any other activity is probably funnier, and as such I fully understand it can be a deeper source of joy and contentment for many. That is not what I’m arguing about. But if you want to be “fit” (whatever that means), if you want to ensure you fully function as a normal human being is intended to function (with well-oiled joints, reasonably strong and balanced muscles for moving thick, dense bones around them and a sense of balance and coordination to direct them) there is simply no substitute to lifting repeatedly a heavy barbell, in “big” compound movements that involve most of the body, and doing it frequently. Again, I’m not saying swimming, or running, or cycling are not great exercises. They are, and chock full of benefits for your body and most likely for your mind. Hell, even Zumba and Pilates, which I can not help but see as glorified versions of 70’s aerobic and old school calisthenics beat by a mile stayin’ in the couch watching TV and eating Doritos all day. And if that is what makes you tick, by all means go for it. But just don’t think you are making the most efficient use of your time (and especially, don’t try to proselytize me into following your latest fitness trend, thank you very much). Not that everything must be decided based on efficiency, and as I’ve said a number of times now, if balancing on a Bosu ball with pink dumbbells in your hand is what lights your candle, have at it to your heart’s content.

Obviously, I’ll stay lifting, and lifting frequently, and going heavy now and then, and for sure “pushing it” well beyond the point of noticeable discomfort (and every now and then right into the realm of all out effort, and occasionally in that of questionable sanity). And hope to counteract the unavoidable setting in of old age ‘til the day I croak, not necessarily setting new PR’s (unless I start using the Sinclair coefficient for calculating it, but I’ll still wait a few years for that) but programming my lifts judiciously so I can keep on improving, no matter how hard it is (no matter how dark an art I have to learn in the process) until that very last day. A few pieces of advice for those who are, like myself, past their prime years and thus need to apply some sound judgment:

·           Don’t get too obsessed about sets and reps and percentages of 1RM. If you have been some years in this game you already know what your body tolerates and what you can get away with. Periodize and program some undulation (start your “waves” with more reps with less weight, and slowly add weight while reducing reps per set… when you reach a high enough number start again, if possible slightly higher) but leave yourself some leeway to accommodate changes in your baseline strength

·         Be consistent, but don’t get obsessed about it. Allow for some slippage in your schedule caused by more load at work, bad sleep because of the kids, longer intervals due to attending family events, etc.

·         As you grow older, it may be advisable to notch the intensity down a bit. Still go heavy now and then, push it when you feel like it, but don’t impose on you many sessions above 80-85% furthermore, 85% of a 500 pounds DL is significantly more taxing than 85% of a 300 DL (Duh!) You should be pretty strong by now, that level of strength only grows when used judiciously, not so much when called upon frequently with no rhyme or reason

·         Assume that it may take longer to recover from the same effort you recovered easily from just a few years back. Specially from moves with a marked eccentric component. Heck, I’m talking about squats. Low bar back squats can be wrecking (again, not exactly big breaking news here), so as you will be doing them (heck, what kind of program does not include lots of heavy squats? A shitty program, that’s what!) you better program some extra recovery measures afterwards (be it foam rolling -which, btw, has never done anything at all for me- deep tissue massage, or plain ol’ eating a ton of carbs)

·           Probably it pays to break your training in more sessions of shorter duration. Instead of very depleting couple of full body sessions twice a week, of almost two hours each it may pay to do four sessions of 50’ in which you stay focused from the beginning to the end, and instead of leaving the gym like the cast of The Walking Dead (and I’m not talking of the “live” part of the cast that tries to escape from the zombies here) leave sprightly and full of energy, itching to come back for more as soon as you can, but…

·           Pay attention to your joints. Past certain age, I’d be surprised if you don’t have at least one or two ligaments and tendons either surgically replaced or chronically inflamed or at least giving frequent and clear signals of protesting all the abuse you have heaped upon them. Be gentle to them and accept that you better be picky and take some aggravating exercises off the menu, rather than keep pushing beyond the point of no return. And frequent training seems to make that condition worse (unless you choose the exercises in each session to provide for adequate rest of the aggrieved joint), so balance your programming accordingly

Just apply some common sense and you may enjoy a long, productive lifting career. I’m not telling you following those simple rules will ensure you become your country’s IPF champion and/ or record holder, but they sure can make you have a physically more rewarding, fuller life. And that, my friends, is what a life well lived should be about. 

Monday, November 21, 2016

The proles are rebelling! (well, some of them, maybe)


Let’s get some perspective first, with help from the lyrics of a recent Loquillo song:

The future is shrouded in mist
The present unseen
The past is like ice
On which we slip

Only love delivers us
And it does it once and again
I tell you to believe me
Through an act of faith

Two weeks ago who would rule the powerful USof A was still shrouded in mist, but that piece of information is now part of the past: transparent and visible, but impossible to change (until it recedes further, when the explanations and ultimate causes surrounding it will get fuzzier and fuzzier and we will become unable to ever agree about them). And it is already slippery, as I see four main narratives congealing about how an individual opposed almost unanimously by the elite (even the leaders of his own party were more than tepid in their support) ended up receiving more electoral votes (not popular votes, but such is the peculiar system the Americans use) than his very prepared opponent:

·         It is all about the candidates. Hillary was terrible. Trump was a “master persuader” (in Scott Adams words, man I don’t think I’ll ever be able to see Dilbert in the same light again…)

·         It is all about the economy. The slow recovery of the past eight years has been unequally distributed (all the benefits have gone to the richest 1%) and a substantial portion of the electorate (the ones living in the most economically depressed areas, aka the rust belt, which coincidentally happens to be mostly white) are still hurting, jobs have not come back after the big 2008 recession, hope has mostly died, they suffer from all kind of economic maladies (lack of educational opportunity, lack of investment, crumbling infrastructure, lack of prospects of economic betterment, in sum) and they have showed a collective finger to an establishment that they see, regardless of party affiliation, as complicit with such dire state of affairs

·         It is all about the sociological divide. Half of America lives in rural communities centered around churches and Sunday school, hearing country music and watching NASCAR, the NFL and baseball while owning increasing amounts of guns. The other half lives in big urban agglomerations with no church (but lots of Starbucks and craft breweries), hearing rap and watching the NBA (and maybe also baseball) while thinking owning a gun (let alone walking around with it in plain sight) is nuts. None of those halves understand, comprehends or has the slightest sympathy for the other, and this time the rural one (what Scott Alexander has termed the “red tribe” Anything but the outgroup, and has been recently and most famously portrayed in J. D. Vance’s Hillbilly Elegy as a hotbed of addiction, broken families and other social dysfunctions) was more successful mobilizing their numbers to vote, while the urban one got too complacent and stayed home, lulled by its supposed demographic advantage

·         It is all about race. The vanishing majority of angry white males joined together in a last effort to turn back the clock and regain some of their (unjust?) privileges that they perceive as slipping away from them. The winning message was nativism, overt racism and opposition to immigration and political correctness (understood as a limit in the free expression of white grievances)

Of course, those narratives are not entirely opposed. A tough economy and the perceived lack of fairness of what is seen as a rigged system strengthens what we may charitably call “not very enlightened attitudes” about race. Even if we leave race aside, when you see your lifestyle, your values, even your aesthetic preferences frequently scorned and mocked by a distant elite you circle back to your tribe, formed by those similar to you, and reject everybody lacking the perquisite tribal identifiers (including race, of course, but also religion, attitude towards guns and musical taste). However, I think when analyzing the election’s results it is useful to keep them separate, as they point to very different potential futures:

·         If it were an issue of just choosing the right candidates, there is not much to be done. The primaries process is pretty dysfunctional in both parties, ensuring they both select the candidate that is most appealing to a base that seems unable to expand beyond 50% of the electorate, and that in each electoral cycle seems to push harder for a more partisan candidate, imposing bigger and bigger difficulties to pivot to the center, where general elections were traditionally won, although Trump’s win may make many reconsider that worn out piece of wisdom. Indeed, it could be argued that Trump won on one of the most right-wing platforms ever crafted, whilst Hillary (who, let’s not forget, won the popular vote by what is appearing as a historically high margin) run also on one of the most left-wing platforms ever… All this was to say I think unrealistic that the current dynamic may allow for the future choice of more moderate candidates, with better skills at unifying an electoral body that is badly divided. And such unhealthy division (the much touted increase in partisanship derived from an increased self-isolation enabled by social media and network TV) is what makes the “candidate appeal” theory null and void.

For republicans Hillary Clinton was the worst possible candidate: stilted, inauthentic, utterly corrupt, a pathological liar, not liked by her own electorate and with too much baggage. But I seriously think even if the Dems had run FDR, or MLK, or Nelson Mandela, or Barack Obama again the Repubs would have seen them as inauthentic, mumbling, corrupt, inarticulate, etc. (hell, there is a whole segment of the Interwebz devoted to badmouthing exactly those figures, you know: Breitbart, Taki, American Renaissance… oh, well, I forgot one of them was already masterminding the campaign of the winner). Ditto for the democrats, who saw Trump as a misogynist, an overt racist, a populist, a pathological liar, a narcissist, an embezzler, a con artist, a fraudster and a chauvinistic pig. But they would have seen in a similar light most of the candidates that the GOPers were considering (see their treatment of them during the primaries), as they do with any GOP president from Andrew Jackson on (probably the equivalent of the right’s demonization of the record of some figures that a couple decades ago were almost beyond criticism, like FDR and MLK, is the left’s derision towards Ronald Reagan, which briefly seemed to aspire to a similar status).

So it’s really not about the candidates. The climate of venom and despondency that has infected the electoral body is what causes any candidate to be seen as unacceptable and a paradigm of moral filth by almost a half of the population (the ones supporting the opposite party), no matter what. On a side note, and seen from afar, the equivalency as presented by the press between the two candidates has been something to behold. Sorry, my fellow Americans, but the candidate you just happened to choose is by no measure, standard or metric comparable to the one you collectively rejected. But that will merit a post of its own.

·         If it were the economy, it has to be clarified why people who are essentially angry about how wealth is being distributed have collectively decided to hand the reins of power to the party with a program more explicitly designed to give them the hardest shaft, cutting taxes on the already rich and most likely degrading further the flimsy safety net (which they think “those other people” enjoy, but of which they are the true beneficiaries) that barely remains in place. We are embarking in a fascinating experiment which I’m not very optimistic about: is a massive dose of voodoo economics able to get the economy growing again, like the WSJ editorial page has been thunderously proclaiming for years? Because, although Trump has promised everything and its opposite in the campaign trail, Voodoo economics on stilts is what seem to be coming to the republic: reducing the fiscal burden of the segment with less marginal propensity to consume and reducing redistribution (starting with healthcare for the needier and likely following wit food stamps) implies almost by definition reducing aggregate demand. That reduction may (or may not) be counterbalanced by a massive public investment program in infrastructure, which the country badly needs, but if pursued in parallel with the tax cuts that have been so much publicized it is difficult to gauge the impact of the ballooning deficit that may ensue. The other element to be taken into account is deregulation (it is still not clear what and how, as this is one area where it is easy to grandstand but difficult to actually simplify very complex codes that reflect the experience of decades), and this is the one area which I’m more curious about, as some economists seem to think that regulation was the true villain and thus its elimination is all that’s needed to make the universe whole again (Deregulation is princess Celestia from my little pony ). I’m more than a bit sceptic about it, and history doesn’t give us much hope, but I’ll keep an open mind. If the experiment fails, I’m even more curious of how people will react in four years…

·         If it were the sociology it has to be clarified why people who identify themselves as hard-working, straight, God & guns & heartland folks have chosen as their champion a New York millionaire (who claims to be a New York billionaire) with three wives, admittedly loose sexual mores, unscrupulous business practices and a history of stiffing contractors that one would expect to be very badly received by the social milieus where those contractors hail from. Although the white working class seems to resent professionals (which they actually have to interact with, and be bossed by) but have nothing but admiration for rich people that happen to have inherited a good deal of their wealth (What people don't get about the WWC, by the way, the article ends recommending not to confound blue-collar resentment with racism, good luck with that, as I’ll show in the next section), them being conveniently far away, so they can rationalize such distant admiration assuming they surely “worked darned hard for every cent they have” (hilarious, I know). There is a tinge of truth in the fact that Clinton won 88 of the 100 most populous counties (getting there over 12.5 million votes more than Trump), but could only win 332 of the roughly 3,000 less populous ones (in which Trump got 11 million more votes than her), and they were those 3,000 counties which ended delivering the majority of the electoral college to him.

·         If it is race, History (which is but the handmaiden of demography, or was it the other way around?) is still on the side of the Dems, and if not in four years in eight they will more than recover, doesn’t matter how they rebuild or what they do, who they choose to represent them or what platform they run on.

So, to summarize, it was not a tremendous difference in the quality or the charisma of the candidates (the less qualified by far won); it was not the economy (the losers of globalization chose the candidate that most assuredly will ensure they keep losing ground); it was not the sociological divide (the rural working class chose a urban millionaire who shares none of their values); there is only one explanation left (those globalization losers with a traditionalist set of values, that happen to be mostly lily white, decided that Hillary Clinton was too cozy with blacks and latinos, which at the same time they see either as undeserving poor or as illegal immigrants pushing their salaries down and stealing their jobs, and so either voted against her or stayed home).

Before moving on, there is one particular canard I’m reading a lot which I would like to put to rest: A significant number of NYT and WaPO commenters keep claiming that it is all the Democratic party leaders’ fault, who chose the wrong candidate, understood as the less liberal one. I suspect those angry and self-righteous commenters are the same ones that kept pillorying the editorial boards of the MSM for warming up to Mrs. Clinton (the ones that made me write presciently Hillary has the steepest hill to climb). Such luminaries keep thinking that, had their first (and in many case only) choice been the candidate, he would have “easily” defeated Trump, based on a number of (early and thus not that significant) polls that showed a marginally better chance of the Vermont senator winning in a two-way race against the real estate mogul than the one ascribed to Clinton. Look, this election has upturned many old certainties, and I am as error prone as the next analyst, but there is one truism I think still holds: there is no way a self-professed “democratic socialist” can win a general election in the USA. Not before hell freezes over, or pigs fly. The college-educated kids tend to repeat that Sanders would have done better with the white working class in the rust belt that costed Hillary the election. I doubt that (remember the working whites are against “Washington insiders” precisely because they see them as redistributionists that take their hard earned money to give it to the blacks and immigrants), but even more significantly ,he would have lost the majority of the college-educated elder whites that Hil won as they were repelled enough by Trump to consider voting for her, and that I have a hunch would have felt threatened by Bernie in a way they didn’t feel with her at the top of the ticket.

Be it as it may, reading back my analysis and immediate forecast (What to expect after Trump loss, Yep, I said it, Nazis! and Only maybe he doesn't lose after all ) I think most of it still stands, with some minor caveats (and a major one, of course, as I thought Hillary would be the winner after all):

·         The death of the GOP is as certain as it was, but the new ANSWP will at least be able to maintain its previous name of “Republican party”, which will make such death undetectable for the less insightful observers. Even some of the old cadres will remain (I’m looking at you, Paul Ryan), and of course they will claim to be applying the traditional GOP recipes all along, but international isolationism, breach of trade treaties and massive deficits (does somebody believe that the huge tax cuts announced by Trump are going to be even partially offset by proportional cuts in spending? What about the promised military buildup? And the fact that there will be a whole new breed of cronies to shift funds to in addition to the old ones, which will surely reposition themselves?) will give the game away, being the opposite of what the GOP has nominally stood for (maybe with the exception of the deficit, which they always had a soft spot for as soon as they gained real power).

·         Also, I stand by my prediction of expecting more repression as a necessary manifestation of the ANSWP true nature, a further increase in guard labor and the prison population (where you know which races will be even more overrepresented, don’t you?), a further militarization of the police (and forget about that wishy-washy liberal dream of having them wear body cameras so they can be more easily indicted if they misbehave… them misbehaving “judiciously” more and more frequently is exactly part of the package, as long as they do it only with “those people”), further intimidation of the press, further erosion of niceties like the right to challenge your detention in court (or the expectation not to be tortured when detained) and of course, all of it will happen with the approval of a SCOTUS that is about to turn violently to the right (probably one of the most momentous consequences of the election, as the justices appointed by Trump -anywhere between one and four- will constitute a conservative supermajority likely to last for a full generation).

·         The split of the Democrats (them losing the white working class) didn’t have to wait for the arrival of a more astute, more cunning führer. It has already happened, and they are likely to go through a very turbulent period at least until the next midterms, with a discussion perversely reminiscent of the one in the GOP between those blaming the defeat on their candidate not being left leaning enough (all those Sanderistas that doomed Clinton by not showing up to vote in enough numbers and that now are in the front lines of the firing squad claiming, against all odds, that their preferred option would have crushed the Orange one) and those arguing that they need to regain the center to appeal to the hosts of dissatisfied working class traditionalists (the “rural America”) that broke off so decisively for Trump this time. As I pointed towards, the working white class has indeed separated itself from the urban poor (where blacks and latinos are overrepresented) and strongly rejected “identity politics”, which were a very salient part of the Democrats’ agenda, as representing a set of values they find utterly alien. Trying to bring them back to a wide coalition is going to be challenging (to put it mildly).

All of which is sad and sorry, regardless of how predictable it was. Which brings us back to the title of this post. Remember my Toynbeean framework for prognosticating the downfall of Western civilization in its moment of apparent triumph? (a quick reminder: Everything going to hell - but gently ) The dominant minority had indeed succeeded in imposing a universal state on the world, but it had lost its creativity to confront external challenges, so it was slowly being swamped by them, isolated from its worst effects thanks to its enormous (and growing) wealth, and unable to inspire the masses as it turned more and more intently to extract rent from them forcibly. That masses had in turn become proletarians (again, in Toynbee’s sense, very different from Marx and having nothing at all to do with who owns the means of production). Not sharing the values of the dominant minority, and more and more excluded from the decision mechanism that set society’s direction, all they can do to express their dissatisfaction with their lot is to revolt (I was going to title this post “the proles are revolting!”, but wasn’t sure my readership would appreciate the double entendre).

And boy, are they revolting (rebelling)! In a most peaceful manner (at least in the West). The British don’t want to be part of Europe, doesn’t matter how much poorer such choice makes them. The Colombians don’t want to accept the ex-terrorist (or leftist insurgents, depending on your viewpoint) of the FARC between them, doesn’t matter (again) how much it costs them. The Americans vote in for the highest office a “colorful” character like Trump, doesn’t matter what absolutely all their representatives (in academia, in the MSM, in both established parties, in the summit of the corporate world -with the exception of Peter Thiel) tell them. The Europeans, caught in a demented institutional straitjacket they seem unable to shake off, will keep lurching towards greater extremism until such constraints are dismantled, and all bets are off what may happen afterwards…

The common thread in all those cases is the all-too-predictable reaction of a majority that has been consistently lied to. Lied to by a value system (a dominant reason) that kept on telling everybody that relentless competition was the only way to happiness, as it would make everybody better off. But enough people is reaching an age when they plainly see they are not materially better off than the previous generation, and in many cases they are significantly worse off, as even when they have barely as many material goods as their parents (normally obtained working longer hours), they realize that in the hustle and bustle of producing and acquiring them for themselves they didn’t find time to beget and nurture a next generation big enough to sustain them in their old age, which now looms as a frightening time of reckoning (even Ross Douthat has realized this: The post familial election ).

After discovering they have been lied to, it comes as no surprise they distrust every message they receive from the ones they identify as liars (all the members of the dominant minority) and they become easy prey for the lies of anyone perceived as an outsider (I think it was Chesterton who quipped that the problem with people that has lost the belief in God is not that afterwards they believe in nothing, but that they believe anything). Of course, most of the “outsiders” (most of them as belonging to the old dominant minority as the most frazzled establishment pol, btw) don’t have a clue of how to deliver the prosperity they promise their gullible followers, so they resort to that old populist playbook: propose simplistic solutions to every problem and find a scapegoat to blame when they do not work.

So we will soon find what particular scapegoats the last wave of populists chose. And how they fail, of course, because nothing short of a complete redefinition of the dominant reason will be enough to arrest our collective decline. And redefining dominant reasons is darn tough, indeed. To begin with, it requires clear sighted thinkers with the ability to reach enough people (what used to be known as “respected public intellectuals”) able to formulate and advocate for it. When those thinkers are heard, the society (or civilizational group, in Toynbees terms) can change course and avoid catastrophe. When they are not, the society crumbles (think late Roman empire, or Tang’s China) and a new one surges from the rubble and the ruins, free from old habits of thinking. Of course, if such unfettering compensates all the suffering, the impoverishment and the dissolution of social bonds caused by the crumbling is an open question. How bad will it be this time? I started this section asserting that so far the rebellion of the proletariat has been entirely peaceful and through democratic means. Once they discover they are as much being lied to as they were under the “old” plutocracy (which happens to be exactly the same as the new one) such peacefulness should not be taken for granted any more…