The “Nanny State” Question

The recent debate on the financial reform package featured a number of arguments that, objectively, made no sense at all. While this will come as no surprise to veteran Congress-watchers, such statements are usually recognized as political posturing by press and public alike, and ignored by even their proponents. But in these unsettled times, such senseless arguments have begun to resonate – at least with the “flat world” crowd – and therefore warrant comment.

Consider a prominent argument first raised during the health care debate, but that came into its own as meaningless claptrap only in the run up to passage of the financial reform bill: “they are trying to create  a ‘nanny state’ in which government will make us brush our teeth and eat our vegetables.”

Well, not really, of course.  In fact, nothing of the sort was contained in the financial reform measure.  But even reigning in the excesses of a financial system that left the world teetering on the edge of ruin is too “prescriptive” a solution for the new Objectivists.

Topping the scolding parent metaphor was the mind-boggling and logic-twisting plaint most frequently heard from rapacious lenders: “if we can’t loan money to people who can’t afford to borrow it, how  are poor people ever going to put a roof over their heads?!”

The fact that arguments like these not only aren’t ridiculed, but actually catch on – deeply among a fringe that may or may not be lunatic, and more broadly among a general public not particularly well-versed on the issues at hand – underlies a mounting challenge for our maturing democracy: preserving the integrity of political debate in an era of increasingly complex and difficult problems that defy both easy understanding and simple solutions.

The root of this problem, sadly, is that too few people understand the abstract concepts and principles that are essential to grappling with the realities of our economic system.  Not only grasping, but mastering, those concepts is essential to ensure that the country enjoys full employment and a financial system that can grease the wheels of the economy.  We not only need, but expect, government to fill that role – to consult the experts who do understand and to craft solutions that reflect the realities of a given situation.

But the complexities also ensure that the vast majority of the public will not – cannot – understand enough to assess the validity of a particular argument for or against a proposed solution. That, in turn, leaves us vulnerable to the “through the looking glass” distortions of people who put party before principle, or self-interest before the public interest. When their specious claims take hold – as in the health care and financial reform debates – the desirable falls victim to the possible, itself sorely limited by the inanity of the arguments around it.

How, then, can we expect elected officials to act responsibly, when their employers (constituents) are mesmerized by simple, and utterly false, assertions?

Consider an example. A few years back a professor at the Harvard Business School was making this same point to a class of second-year MBA students, and asked, “Can you tell me, in a few words and a couple of minutes, why there is an inverse relationship between bond yields and bond prices?” One might think that would be a cakewalk for such a group of elite business scholars.  A show of hands, however, disclosed that less than a third of them even thought they could answer.

The answer is simply that when a new bond is issued with a 6 percent coupon, the older bond with a 5 percent coupon has to drop in price to be competitive with the new bond, because all bonds are priced in the same market by “yield to maturity.”  There are many other aspects to bond markets, of course, but if you do not understand this first principle, you cannot understand how the bond market works and therefore you will never appreciate or understand how the whole financial system works.  As a result, if you had to vote on something involving the financial system, you would be likely, given your obvious ignorance of even the most basic principles, to get it wrong.

It’s not exactly a new problem, but it is exacerbated by a world that is unimaginably more complex than that faced by the framers of our system of government.  It wasn’t simply racism or sexism that compelled Alexander Hamilton’s clearly wrongheaded idea that only educated landowners should be allowed to vote. It was also fueled by a belief, going all the way back to Plato, that responsible citizenship required a foundation in knowledge and wisdom.

No one today, of course, is longing for – or would long tolerate – philosopher-kings or standardized tests at the polls.   And I doubt that there are many people out there who want to go back to Hamilton’s idea. So what is to be done?  The problem is real, and there is no clear or easy answer.

There might, however, be some ideas or approaches that can mitigate the problem. One of them was invented over 50 years ago when, to get trade legislation through Congress, it was agreed that when a complicated package of proposals was ready for a vote, the normal parliamentary processes would, after a full debate, be suspended, and a simple up or down vote taken, with no amendments allowed. Because there is a vital need for such trade legislation from time to time, the goal of getting an overall solution in place takes precedence over trying to get everybody’s special interest input, which more often than not does little to improve a solution, and frequently is intended to undermine it entirely.

That takes us back to the beginning of this thought process. The financial reform bill sought to address the most serious problems of the last few years. One of them was the “no doc, no down payment” loans that lured millions of unsuspecting and eager prospective homeowners into deals that made lenders and brokers millions in fees while turning those “poor” folks into deadbeats, and nearly bringing down the financial system with them. When the Congress declared the practice could not be continued, critics said it was not fair to deprive even abjectly unqualified applicants the opportunity to be homeowners, despite the fact that many of these applicants have already lost the homes they couldn’t have purchased if they were not being taken advantage of by rapacious lenders. Get it? It reminds me of the defendant standing accused of murdering his parents and pleading for clemency because he was now an orphan!

Similarly, when the new stimulus package was proposed, opponents argued that it was not needed – that lower taxes and less government debt would bring the economy back to life. In this tale, they fill the role of the two-thirds the class of Harvard MBA students who couldn’t explain bond pricing. They, obviously and objectively, do not understand the rudiments of economics. Lower taxes do nothing for the unemployed; less debt does not spur consumption and thus demand, which is how jobs are created.

So we are facing a conundrum in how to break the vicious cycle of misunderstanding that can lead to perverse government policy action and mistakes. If knowledgeable and sincere elected officials are out of reach, along with a well-educated citizenry, perhaps something like the trade legislation method is needed to get complex economic/tax/financial matters passed through Congress. Such an approach might allow us to overcome the limited understanding that undermines our democracy and puts us all at risk.

Elizabeth Warren, the distinguished Harvard Law School Professor who was one of the driving brains behind the recent protections for retail financial customers, exercised extreme politesse when she characterized the problem as “cognitive impairment.” While she is correct, perhaps the description in this piece might be more persuasive, though more controversial.


The Year 3010 Seen from Today

“Why would any sane person want to think about the human condition a millennium from now?” is a question I have heard every time the subject has come up. So, why bring it up?

Perhaps some reasonable speculation might help inform us today about how to lay foundation stones for the lives of our descendants. For example, simple math shows that, if each member of each generation between now and then produces two offspring, their descendants will aggregate in 3010 some 17 billion people! Surely we should care enough about those distant descendants to spend some time and effort imagining, and hopefully helping, the world they will inherit from us.

A few years back, a visit to the Vatican Museum in Rome revealed an amazing map room which dates from around the 1100s. It is about as long as a football field and high and wide. Around its well-windowed walls are large, detailed maps of the inhabited places around the Mediterranean. The Popes of that time could stroll about and visualize their empire and make their plans. It seemed more like a map room in today’s Pentagon than the center of a church that, one thousand years ago, was far flung and growing. This prompted a lingering question: could those Popes have even remotely imagined the world of 2010? And, if they had, what might they have done differently?

In those days the Popes, though they evidently thought they knew the whole world inside and out, really didn’t. There was a lot going on in Asia they knew very little about. North and South America existentially had not crossed their horizon. The printing press, locomotion, accurate navigational tools and anything resembling modern medicine were still to be discovered.

Today, though we think we know just about everything there is to know about our world, we still do not know what we do not know, for instance, about the mysteries of the oceans, the innards of earth and the environs of our solar system. Smart people everywhere are working on all those questions, to be sure, but mysteries abound. For example, we are increasingly uncertain about some of the key fundamentals of time and space; we now know there are lots of exoplanets around stars like our sun; we know there are limits to our current main sources of energy, but we do not yet know how to tap efficiently either solar energy or deep center of earth energy. We do know that for millions of years earth has had repetitive cycles of about 100,000 years’ length in which it slowly warms and then suddenly cools. We do not know quite where we are in the current cycle, but we believe man has raised our present point on the warming curve enough to create new challenges to the sustainability of the future of earth.

Our imaginations are, of course, limited by our experience and our perspective. Fully believing in the supremacy of the Church and the literal truth of Scripture, the twelfth-century papacy would have found it impossible to conceive the discovery of a heliocentric universe or the disaffection that spurred the Reformation.

Given a crystal ball of sufficient power, might the Popes have taken steps to standardize language and education in hopes of knitting together the disparate peoples of their empire? Might that have avoided the carnage and misery that emerged from the struggles for local identity and dominance which occupied so much of the Middle Ages? Or, are such struggles not only the price, but indeed, the essence of progress?

Surely the Popes could not – would not – have imagined the transformation which did occur in the ensuing thousand years, particularly the technological innovations that have more than any other factor shaped the world as it exists today. Yes, there were geniuses like Leonardo, Copernicus and Jules Verne who came later but, even at their best, their imaginations fell short.

Technology is a fundamental – the way the future is always created. Therefore, a good starting point in thinking forward a thousand years is to ask what technologies and evolutionary developments are likely to emerge.

What are some of the things which far-thinking people might find some agreement about today, assuming that the basic conditions of life have not been changed, cataclysmic collisions from outer space from the equation?

  • Population. Today the world is home to about 6.8 billion people. By 2050 the number is expected to reach more than 11 billion.  By many measures we already have a non-sustainable sized population. Perhaps by 3010 we will have learned how, using many methods which today are unthinkable, to shrink and hold population to a manageable, sustainable size.
  • Life Expectancy. Most people on earth are living a lot longer than their forbears thanks largely to modern medicine. By 3010 there may be a need for many people to live much longer lives to be able to take long space voyages and return with time left to transfer what they learned to younger people. Perhaps life for some might become virtually endless by slowing aging and repairing (or recreating) and replacing worn out parts, including hearts? Average age might get well into hundreds of years. That, of course, raises big questions of opportunity for the young and others: if too many people hang on forever, innovation, opportunity and vision could disastrously decline.
  • Daily Life. Daily life most probably will not change too much; people will still be diurnal and will want to sleep, eat and reproduce much the way they do today. But there are likely to be some big differences too. People will consistently eat better and more healthful food. They may have some genetic mapping to help in picking their mates in order to ensure the right skill sets are being developed on earth. Perhaps copulating will become mere entertainment and reproduction with planted eggs and sperm will be delegated to women who are professional surrogate mothers?
  • Communication. It is difficult to imagine that there won’t be a single global language a thousand years from now. The techniques of communication, though, are likely to be far different.  This is an area where the sci-fi fantasies are likely to come true: embedded communications chips, practical telepathy and mind reading and near universal and instantaneous access to the full breadth of accumulated human knowledge, if not wisdom.
  • Government: The nature of government is almost certain to change radically in the next thousand years, much as it did in the last thousand.  Where feudalism gave way to the modern nation state, with nationalism and sectarianism as basic building blocks, the future will deliver a global system of governance centered on the allocation of resources – food, minerals, fuel and people. Such a system will require a high degree of local autonomy to give cohesion and sense of belonging to local population centers, which will, with carefully designed systems of taxation, support global needs with a global currency, other resources and human talents. Cultural differences among the many local centers will have shrunk, yet people will compete globally to participate in the exciting opportunities to be explorers in the many dimensions and directions of space and be elite leaders in all aspects of global life. Perhaps there will be “term limits” on many activities to create opportunity for everyone?
  • Culture. Music and art in all its forms will be thriving. More and more people, particularly the older and retired, will take up activities they had no time for earlier. Movies, books and other forms of entertainment will thrive. Moreover, the means to access them will become seamless through something like eyeglasses, which will “tune in” whatever media, wherever and whenever. Payment, will of course, be debited automatically, and most assuredly not with a piece of plastic.
  • Money. Currency will exist but it will not be physical. Everyone will have an implanted (or evolved biological) chip from which the medium of exchange is debited and credited automatically at the mental will of the host. All one will have to do is think to instruct the chip what is wanted and ask what the available resources are and they will “hear” the answer.
  • News. News will still be streamed via the global web 24/7/365, BUT there will still be a need for journalists to interpret/edit news sources and commentary for those who are interested – and most people will be interested because of their far better education. One significant benefit of life one thousand years from now: no Geraldo! And, advertising, as we know it, might give way to subscription fees for information sources. For example, Google then will be the biggest company in that world and will cost perhaps $500/year in today’s dollar terms.
  • Religion. From the beginning of time, religion, in one form or another, has been one of the key ways people have both explained the mysteries of the world to themselves as well as tried to manage like minded people. At the same time some of the most virulent problems among the world’s people have been caused by perceived differences of religion. Witness today’s clash of civilizations.  A thousand years hence, it makes sense to believe that as one language will likely have emerged, so may one religion, which could give people perspective and direction to help guide them deeper into their still unfolding future.
  • Economics and Finance. The dismal science will have become a thing of beauty. With information about everything constantly available there will be feedback loops that will constantly adjust behavior and largely eliminate what we call the business cycle. That said, the human emotions of fear and greed will still create opportunity and risk.

Obviously no one can do more than suggest the general directions of the future. The only real limitations on imagination should be the immutably powerful laws of gravity and physics. Therefore, almost everything imaginable is possible.

Most people shrug off the future, seeing it as irrelevant to their lives today. A lot of those same people in fact do read/study history simply because it is interesting and because they know they are otherwise doomed to repeat it. As the Popes one thousand years ago might have tried to standardized language and education, today our popes might try to steer the world towards a unified planet where people everywhere come to value the entirety of humanity as the people they want to share the future with.

If we give more attention to the future, even though no one alive today will live to complain or contradict anything surmised today, perhaps the future might eventually reflect some of the wisdom of these speculations.