The illusion of growth: "inflation" is only a third of the real story

 The Social Security Administration notified me of my next year's benefits a few days ago.  The notification letter asserts that my benefits increased by 2.5% over last year, but my take-home payment will actually increase only 2.07% after all the Medicare deductions.  Luckily, I invested my 401(k) retirement plan funds in index funds, so they are capturing some of the excessive profits skimmed off by insurance companies, pharmacy benefit managers, and other healthcare companies. 

According to the Bureau of Economic Analysis, "From the same month [in 2023], the PCE price index for January [2024] increased 2.4 percent. Prices for services increased 3.9 percent and prices for goods decreased 0.5 percent. Food prices increased 1.4 percent and energy prices decreased 4.9 percent. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago."  So that 2.5% Social Security benefit increase doesn't seem totally unreasonable, aside from the fact that it's nearly a year out of date with respect to my current income and expenses.

So why do I, and so many other Americans, feel that our money isn't going as far as it used to?  Maybe because it isn't?  Unlike economists and economic journalists, we're concerned with value for our dollars, not merely prices, and not the rate of price growth that's called "inflation". And our memory extends longer than a year.

We remember this: since before the Covid pandemic in about 2018, the official PCE price index has risen over 20 percent.  And that index excludes gasoline and food, which have risen even more.  The PCE has risen over 40% since the most recent recession, and the amount of value a dollar provides has shrunk correspondingly.  I don't know who to feel more sorry for, the Americans who have to suffer from their loss of buying power, or the deluded economists and the clueless journalists who listen to them and tell us that our own experiences are wrong, and everything is good since wages have gone up too.  They don't care to notice that it's not the wages of the typical worker which have gone up, but the income from the wealth of the rich who have gotten richer far faster than the rest of us. And to add insult to injury, they promise that prices will never go back down as long as they have anything to do with it. The fabled rising tide doesn't lift leaky boats.

Loss of buying power is worse that rising prices suggest.  Lots of people have recognized "shrinkflation" when the same size package contains less stuff.  Marketers hope that you won't notice when the same size box creates an illusion that you're getting the same value for your purchase, while their profits go up because they give you less of what they're supposed to be selling.

Measuring shrinkflation is tricky, because it requires going into the details of how the data that composes an inflation index is compiled and entered into the index.  Sometimes an item may be measured by its container price, and sometimes it's measured by the unit price.  Some indexes may log a box of cereal by its price per box, and other indexes may log the cost of the same box of cereal by its price per ounce, regardless of the number of ounces in the box.  But even the most careful research organization is unlikely to count the number of chocolate chips per cookie, or the number and thickness of pepperoni slices in a pizza. 

The US Bureau of Labor Statistics has studied how shrinkflation affects the Consumer Price Index, and concluded that the effect is miniscule. When they looked at datasets that corrected for items whose quantity had changed between 2015 and 2019, they found the biggest effect in the category of Household Commodities and Services, which changed from 14.31 to 14.26, a difference of 0.05, about a third of one percent.  Considering how outraged consumer reporter articles are about shrinkflation, they are wildly overreacting.  I was surprised, too. It's possible that shrinkflation has increased along with monetary inflation since 2019.  Everyone should encourage the BLS to update their study regularly. In any case, it is annoying to say the least to discover that a manufacturer has pulled such a sneaky trick on you and effectively raised their price, hoping you won't notice. The fact that only a small number of manufacturers do such things doesn't make the practice any less offensive when it occurs.

The third form of inflation is even more insidious. Manufacturers can use lower quality ingredients or components in their products, and service providers can intentionally become sloppy or slow or reducing the feature richness in their work, while keeping prices the same or even merely lowering prices more slowly than they reduce their costs, thus increasing their profits.  There's no popular name for this practice, but "qualflation" works for me.  Some tech-oriented people might think of "enshittification", which was chosen as the 2023 word of the year by the American Dialect Society, but this word encompasses all forms of inflation. Whatever you call it, it's difficult for economists to measure, since it requires deep dives into supply chains and defining quality test procedures for every single one of the thousands of items that go into inflation indexes. Qualflation, because it's even sneakier than shrinkflation, is that much more offensive when it's discovered.  If you're outraged by it, your outrage is justified.

The remedy for all three forms of inflation is a free market with multiple suppliers producing a variety of variations on every service and product, or better yet, advanced markets with ecosystems of independent standards and unbiased testing organizations that produce regular reports. But a national currency doesn't exist in a free market -- there are commonly no choices of what money to use when buying something, except in rare situations such as the duty-free shops in international airports. And when governments allow monopolies or near-monopolies to arise, shrinkflation, qualflation, or simple price rises inevitably follow.

For complicated reasons, an economy with multiple currencies doesn't work well.  The United States had many private and state currencies until 1863, and many problems along with them. And since the release of a Bitcoin implementation in 2009, cryptocurrencies have been promoted as a new alternative to government-backed money.  Cryptocurrencies are working about as well for buying things as private currencies did in the past, that is not very well. "Crypto" is evolving into just another collectible asset of little intrinsic value, like fine art or Hummel statuettes. Like other collectibles, crypto has a robust free market, but Grandma isn't paying for groceries with Bitcoins any more than she is with Hummel certificates.

In the Federal Reserve Act (as amended), Congress gave the Federal Reserve System its fabled "dual mandate" of price stability and maximum sustainable employment.  The members of the Fed's Open Market Committee, in their wisdom, have decided to say that money with an inflation rate of 2% counts as "stable prices", and that anything lower is incompatible with maximum employment.  They prefer to try to fool everyone into thinking that growth is occurring, and will continue to occur, so that it makes sense to hire more people to cope with that future growth. Pay no attention to the slow loss of value in the dollar that results.  So far, they've succeeded, and consumer complaints about how high prices never go down have been successfully ignored.

Improving the best grilled cheese sandwich

In 2022, I wrote an article on Medium about The Two Secrets to the Best Grilled Cheese Sandwich. The two secrets are to do these two simple things: (1) use mayonnaise instead of butter, and (2) use real American cheese.  I included a bonus secret: use plain white, square sandwich bread.

That's about it. It's near perfection.  But "near perfection" still leaves room for improvement, or at least variation without loss of quality.  Here are two more things you can do to add variety to the perfect grilled cheese.

Using two slices of cheese, of course, sprinkle some crumbled feta or blue cheese or gorgonzola (which is more green than blue, to my eyes) between the slices before assembling the sandwich.  This will add a bit of salt and umami flavors, although American cheese is already pretty salty.

Try Fontina cheese instead of American.  This melts just about as well, but with a bit different flavor profile.  You could also try Mexican Chihuahua cheese, but you may have to go to a Mexican supermercado to get it.  It's a rare find in a mainstream supermarket, even in the Southwest US, where they often have an entire section of Mexican cheeses.

When something is so near perfect, almost every change is a downgrade.  These tweaks aren't downgrades, which is something else.

Irresistible attraction, insatiable consumption: the obesity epidemic was inevitable - hyperpalatable food just makes it worse

So incredibly delicious, you can't stay away, can't stop. Buy more now!  It's so much better than reading about why it's true!

(This is an abridged version of an essay that was posted on Medium.)

Three years ago in September of 2021 in a blog post titled "Is obesity research too hard?", I observed how difficult obesity research is, and suggested that it might be too difficult for the scientific methods available in the early twenty-first century.  It's even harder than that: here's one set of reasons. [Sorry about the malfunctioning link; the post is on page two, and Blogger's HTML anchors don't recognize that it's not on the front page.]

Most animals obtain their energy supplies by eating food - it's essential for survival. Most of the time, animals find themselves in resource-constrained environments, and feeding systems that work by "eat as much as you can, whenever you can" without any upper limits, work just fine at keeping obesity from becoming a problem.

But after eons of biological evolution and technological development, human civilization achieved prosperity, and invented refrigeration and transportation that made more than enough food available all the time.  According to the US Bureau of Labor Statistics, in 1901 Americans used 42.5% of their expenditures for food., while by 2002 those expenses had declined to 13.1%., and by 2022 all the way to 6.7%, a reduction of 84%. For North Americans, food is an unlimited resource year round, and we have only ourselves to rely on to keep from getting fat. Our evolutionary history has never before needed to cope with this situation. Without the evolution of new forms of food intake regulation, obesity epidemics are inevitable.

Managing food intake to match energy consumption has two major components: appetite, that is obtaining and ingesting food, and satiation, stopping ingestion when enough has been consumed. These have to balance over the long term.

Then, achieving the balance between appetite and satiation are, at a minimum, five interacting behavior-physiological subsystems. Driving appetite are foraging, which I blogged about earlier, which gets the organism close enough to the food to trigger eating behavior.  Eating is closely followed by ingestion, which is succeeded by digestion, which creates circulating nutrients processed by the organism's metabolism.

Each of these stages sends signals to the others to drive or inhibit their activity.  One of those feedback loops goes between foraging, eating, and ingestion. This makes the very acts of finding and consuming food become ends in themselves. Chefs know that the presentation of the food is an important part of the dining experience -- diners simply enjoy looking at a well-composed arrangement of artfully shaped and colored edibles on a plate.

Food producers and processors, whose mission is to sell more of their product without regard for the welfare of their customers, have learned how to make their foods hyperpalatable, exploiting the positive sensory properties and flavors to keep eaters eating, and buying more.  The salty snacks industry has been most successful at this takeover of the food consumption behavior system, whose adaptive value is enormous when the organism is in a nourishment scarcity environment.  Grilled and smoked meats come in second for hyperpalatability, but their producers have been less successful at creating a mass-distributed product.  In a nourishment rich environment, eating for the sake of eating acquires more negative effects than positive ones. This takeover reached what may be its ultimate expression in the slogans that promoted Lay's potato chips: "Bet you can't eat just one," and reaching the end of the bag of chips: "Don't worry, we'll make more."  The clear message is to keep eating, and don't stop, ever.

The result of these interactions is that people will eat even when they're not hungry, and keep eating even beyond the point of satiation. Their tissue mass will accumulate faster than it is depleted and their weight will go up, regardless of any steady state energy balance levels.

Medical researchers and pharmaceutical companies have searched for decades for drugs that can affect the weight regulation system. And they've found them: Wikipedia lists 38 different drugs with appetite suppressant effects. Each of them has many effects in addition to appetite suppression,  Which effect is a primary one and which is a side effect inevitably depends on the user's goals and perspectives.

The latest example of this rainbow of capabilities is the family of drugs called GLP-1 receptor agonists. Originally discovered by studying the causes of the remarkable metabolic capabilities of the Gila monster, a lizard found in the deserts of the Western US, they turn out to be "not only effective in metabolic diseases [such as type 2 diabetes and obesity] but also play a role in non-metabolic disorders, affecting multiple systems including the musculoskeletal, nervous, cardiovascular, and digestive systems, and can even have implications in oncological diseases."

Drug companies are spending major resources promoting GLP-1 receptor agonists as a panacea, of course. In a tour de force of marketing, one of them, Novo Nordisk, is distributing the single drug semaglutide under three different names: injectable Wegovy for obesity, injectable Ozempic for type-2 diabetes, and oral Rybelsus for type-2 diabetes.  It can do this by exploiting the US drug regulation framework, which gives them a set of patents on semaglutide formulation that will expire over years ranging from 2026 to 2041, and allow them to monopolistically charge prices that may be more than 250 times its cost to make..

Marketers and enthusiasts will avoid telling you about the side effects of weight loss drugs, which are serious enough that most people who started taking anti-obesity medications stopped using them within a year.  People trying Wegovy were best at staying with the program, but only 44% of them lasted a year.

If you're an American reading this, it's more likely than not that you're overweight.  Lots of organizations are happy that you're that way, and few have incentives to help you manage your weight effectively.  Food producers want you to eat more of their products, regardless of your weight condition. They're working hard to develop ever more hyperpalatable foods to keep your binge eating bouts going. Drug manufacturers are happy to have more overweight patients who will pay high prices for their weight reduction drugs. Purveyors of diet plans want you to use their plan and avoid other plans, regardless of whether it's the right one for you.

Healthcare providers have lost what benign incentives they ever had.  For a brief period in the 1970s researchers had discovered that "health management organizations" (HMOs) that focused on improving health for their clients had less expenses and better patient outcomes than fee-for-service insurance systems.  But then HMO managers discovered that care denial strategies were even more profitable than complicated health promotion programs, and now HMOs are just another, more restrictive, insurance offering.

Against these powerful economic forces, individuals who want to reverse their weight increases have a tough road ahead.  The idea that there's no royal road to weight loss, and that each person needs to find a path that works for them and may be different from everyone else's is a revolutionary one. Biology may be destiny, but controlling your own biology without the necessary data and personalizable systems analysis tools that have not yet been devised, must be done by trial and error.  Keep trying, and don't give up until you find a method that works for you.  Good luck! 

Should Companies Be Owned by Their Workers?

 Freakonomics Radio asked this question last month.  They weren't sure.  But they thought it was interesting to interview Pete Stavros, a senior executive at private capital firm KKR.  Stavros observed that employee-owned companies were 2% more profitable than conventionally owned ones, and he convinced KKR to give a form of employee equity to some of their own companies.  Stavros seems sincere in his belief that he's found a win-win combination that benefits both the private equity firm and the employees, but if you think about it a bit more deeply, you discover that his pitch is an illusion.

When it institutes employee ownership, it gives employees shares in the company, which gives them a stake in the company's success.  The idea that owners must inevitably exploit their workers in order to maximize profits is deeply ingrained in the thinking of KKR's kind of capitalist, so much that they were surprised that workers with a stake in their company were more productive.  Communist Russian dictator Josef Stalin was also surprised, when he allowed families to farm small plots of land for their individual use, in addition to the faceless collective that the New Soviet Man would slave for, and the private farms were more productive.

But unlike the Stalin-era farmer, and unlike traditional Employee Stock Ownership Programs (ESOPs), the kind of ownership given to KKR workers is an illusion, not as good as profit sharing (profit sharing is also good, despite it not coming with any "ownership"), since it exposes the workers to capital losses as well as capital gains, and gives the true owners, the KKR managers, another way to blame the workers instead of themselves when purchased companies ultimately fail.

"Ownership" is real only when it includes control.  This would mean giving the employees a seat on the board of directors, and giving employee shares voting power for board seats in the same way that shares in conventional public companies come with the ability and responsibility to vote for board members.  You can bet the KKR would never go for such an arrangement.

The best form of employee ownership, even beyond ESOPs, is to become a fully owned employee co-op.  But even more than ESOPs, co-ops are complicated to set up, and their advantages may even be opposed by deep aspects of human psychology.  Investigating that will be another blog post.

Why the Xerox Star failed

"That trick never works!" - Rocket J. Squirrel

or

Single-purpose machines built by lone geniuses for other lone geniuses don't scale.

The Xerox Star was an attempt to commercialize the pioneering computers that emerged from Xerox's PARC labs in the 1970s.  They started with machines called the Alto, and continued with Dorados, Dolphins, Dandelions, and Daybreaks, which came to be called D-Machines, all running (mostly) the same software.  They were a marvel for their day, and had all of the components of today's windowing PCs from Apple and Microsoft, but years earlier. The story of how the Star came to be and how Xerox came to abandon it is a complex one, and like the system itself, the full story is distributed across many obscure places that are not entirely consistent with each other.

But I think that the big picture reasons for its failure get lost in the soap opera details, and are worth a few words.  Obviously, Star had to be released too soon for its technology. Many of the reasons for its lack of broad adoption can be traced to the speed of its underlying electronics; and much of the architectural and usability weirdness of the various models of computer in its history can be traced to attempts to compensate for this basic problem.  Fifteen years later, Apple introduced the Macintosh, with almost the same capabilities, but with a commodity microprocessor CPU instead of custom designs made from bit-slice processor elements, at a tenth the price.  The Star had died out by then, but the Mac continues on to this day.

What kicked the Mac over the top into the realm of success was its developer ecosystem.  Technically, the Macintosh and Star developer models were very similar.  In the early days of the Mac, it wasn't possible to use it for development of its own Mac software -- developers had to use the substantially more expensive and powerful Lisa, and then test and distribute their applications on a separate Macintosh unit.  This was the same process that had been used for the Star, where developers used a Mesa development environment, and then deployed the results to the Star environment.

The difference was that there were already a lot of Apple II developers who were excited to move up to the new and awesome Lisa system.   I was a grad student when the Lisa was released, and one of my friends got one -- he must have spent a substantial part of his meager life savings on it.  The business and research communities that were available to Xerox in its own time could not match that kind of commitment.

The community that developed the Star was small and exclusive. I happened to be attached to a PARC-adjacent computing community in the mid 1970s and there were rumors of amazing things going on over there, but exactly what was never clear. It was impossible to tell from the outside, but much later it emerged that the PARC computing community was internally even more fragmented than it appeared to be This turned out to be typical for an entire stream of computer research history, but the phenomenon was particularly acute at PARC, and its effects showed up in fundamental aspects of the D-machine architecture.

Notably, there wasn't really a "D-machine architecture". There were high-level visions of what might be possible in a world where every person had their own computer beside their desk, but everyone had a different version of that vision. PARC had been staffed with some of the most brilliant, creative, and independent computer researchers to be found, and they created Promethean hardware frameworks that could be elaborated into whatever their application vision required.

The result was that a given D-machine could become one of four different computers, depending on who was using it at any given time. A relatively tame instance provided for programming in the BCPL, Mesa, and Cedar languages under the control of a command line interface in its windowed development environment, Tajo. Starting the machine with a different microcode load would turn it into an office workstation providing a suite of word processing and publishing tools with the now-familiar windows, icons and folders metaphors, but without software development ability. Other microcode created a  Lisp Machine running Interlisp-D, or a dedicated Smalltalk machine. The microcode and even the device drivers for each environment were unique and incompatible and the user communities for each one didn't seem to talk to each other, and their writings rarely even acknowledge their counterparts' existence.

A D-machine gave its user a vast amount of control and flexibility -- it could become whatever you could imagine, if only you had the talent, skills, and time to build it before your tenure at the lab expired and you had to go somewhere else. Collecting brilliant people and giving them access to the most advanced tools and letting them work on whatever they think they can be the most productive at is a standard strategy for top tier research labs, and it often produces marvelous results. PARC produced many marvelous things. However, creativity is unpredictable, and unpredictability is largely unworkable as an element of business strategy.

Xerox management turned out to be unable to solve the problem of herding its houseful of cats in a coherent direction that led to business success, and their inability to settle on a common machine language that would be tolerated by all their diverse projects is emblematic of their failure to achieve focus. Each external developer community was too small to provide Xerox with the volunteer support that it needed in order to attain a critical mass that contributed to business innovation in the way that DECUS or SHARE did for DEC and IBM, or that Apple enjoyed in a less organized way, instead of draining energy and R&D funds.  Whether that critical mass was possible given the other limitations of the technology is impossible to say, but there's no evidence that Xerox or PARC management had any notion that customers could be creative contributors to a product in a way beyond passive consumption.  It would take another two or three technology cycles before the idea of a "platform" became a common sense aspect of business strategy.

Two great lies in financial policy

It's not a lie if everyone believes it, is it?

I'm still not sure which of these should be first.  They've both been distorting financial policies for decades.  They have so much history, that about all I can do here is name them.  If you can break out of the reality distortion field that sustains them, the fact that they're lies becomes self-evident.  It's tempting to call them "myths", because for many people they're articles of faith that must not be questioned.  But experts know, or should know, that they're empirical claims that can be falsified. And they have been.  Here's another try. An expanded version of this note is at Medium.

Lie No. 1: The proper rate of inflation is 2% annually.

Economists repeat this so often, it must be true. But historians at the New York Times and elsewhere have traced the history of the number back to a guy in New Zealand (an important guy in NZ at the time) who admitted that he just picked it because it seemed intuitively reasonable.  There's no theory to support this number. Two percent seems reasonable if you don't think too hard, so everyone goes with it.

If you look just a little bit deeper than "what everybody who's important is saying", you'll find that the US Federal Reserve Act, as amended in 1977, requires price stability, i.e. an inflation rate of 0%, not 2%.  Then you look at prices in the US, which have been controlled by the Federal Reserve system's policies, and see that the dollar has lost about 80% of its value since then.  That doesn't look like stability to me.

Lie No. 2: Public companies are required to maximize their short term investor returns.

This lie has been debunked many times, but tenaciously persists.  People complain about it all the time, but the alternative never seems to sink in.  I don't know why the competing soundbite is so slippery. Here's the truth: All companies are required to do whatever their owners specify (including public companies). If the owners want to give its assets away to charity, or run the company into the ground for political or competitive reasons, that's their prerogative.

Milton Friedman is most famously associated with the "shareholder value" dictum. In the most generous reading, this lie is predicated on a misunderstanding of how shareholders communicate with management.  If they can only communicate by buying or selling their shares, then the amount of information that owners can communicate to management is incredibly limited.  A purchase means "good work", and a sale means "you're doing something wrong".  That's it.  Exactly what is being done well or badly is impossible to communicate.

Yet anyone who's actually become an owner by purchasing stock knows that they have purchased more influence than this, both formally and informally. Shareholders choose members of a corporation's board of directors, who choose senior managers to execute their desires.  They also specifically influence company policies by voting on shareholder initiative statements.

Alas, in many corporations, management has effective control of the board rather than vice versa. Board members are chosen by the CEO and then submissively ratified by the broader population of shareholders.

In addition, a vicious cycle of greed exists where sociopathic individuals whose goal is to accumulate more money regardless of the cost to others and to the society that enables their greed, consequently accumulate more financial power to acquire even more money even more rapidly.

Governments attempt to limit the destruction that this cycle causes by anti-monopoly laws and regulatory agencies and regulations intended to ensure that effective markets exist where multitudes of interests can contend and mutually damp each others' excesses.

In heavily financialized modern economies, most of the shares of public companies are owned by huge funds that are themselves public companies, and this distancing of ownership makes communication of corporate goals other than making more profit very difficult. 

Getting large, bureaucratic organizations to change their behavior requires organized efforts, slogans and acronyms. One set of important not-specifically-profit oriented goals has become known as ESG, for Environmental, Social, and Governance oriented investing.  A goal complex called DEI, for Diversity, Equity, and Inclusion, is following ESG as an investment strategy that looks beyond mere short term profit. Additional ways for companies to explicitly step away from the "profit is everything" philosophy are to become incorporated as a "benefit corporation" or certified as "B Corporation".  Curiously, as a non-profit organization B Lab, the company that administers B Corporation certification, is not itself certified as one.

So with organizations tracking and publicizing these measures the market should see how organizing for social benefit gives greater returns, and self-correct.  Easy, right?  Not if politicians get in the way. The conquest of the profit motive by social goals in both left and right wing politics will be the stuff of history for many years to come.

What would world civilization look like if the US collapses?

Doomers' worst nightmare: a sustainable mid-tech, high culture global civilization, plagued by endless failing genocides.

Civilization would survive just fine. But it might not be a robust high-tech 21st century civilization. That might actually be a good thing - it's hard to tell. 

I've written an essay explaining how I came to this conclusion.  Medium says it should take about 8 minutes to read.  But if that's too long for you, here's an extended summary.

The United States in early 2024 is in a political situation where collapse into a quasi civil war like "the troubles" in Ireland seems like a possibility.  Elected politicians in Texas are calling for military-aided defiance of Federal authorities, supported by governors of 25 other states.  But unlike the first US Civil War in the 1860s, there is no sign of the creation of large state armies to oppose the US Army, and the states themselves are internally divided to the point where a next war would be as much of a "war within the states" as a "war between the states".   Nobody in the Texas Legislature is proposing to fund the Texas Military Department to a level where it would pose more than symbolic opposition to Federal forces.  It's more likely that violent opposition to the United States would take the form of "stochastic terrorism" (I prefer the term "freelance terrorism") - bombings and random mass shootings. Whether these could become focused enough to target Federal buildings and political gatherings seems doubtful.

But it's interesting to imagine what might happen if the US went into a collapse as deep as the Great Depression of the 1920s, that somehow became permanent.

The global impact of US collapse would span five realms: general economic activity, social and cultural activity, geopolitics, technological development, and environmental stability.

The loss of the US as an economic force would severely but not seriously damage the global economy. The Dollar would lose its role as the world's reserve currency, and this would have a tremendous impact. The World Bank, the Euro, and the Chinese Renminbi are waiting to take over if the situation becomes intolerable, though.

Global culture would not be significantly affected. High culture of symphonic music, fine art, and fashion has always been ruled by Europe, and would stay that way. 

Geopolitically, the long-predicted end of the Pax Americana would finally be realized, though the Great Game of pre-WWI colonialism is gone forever, never to return.  The Mideast would continue to be the same mess of intra-Islamic jihadism that it's been since the end of the Ottoman Empire.  China's dominance in the Far East would finally be unquestionable.

Attacks on Taiwan would lead to a major technological setback, since the most powerful semiconductors are made there by TSMC. Software to use the computational power of those semiconductor devices might lose its creative momentum that originates in Silicon Valley, The tech giants are fully globalized and can easily migrate transactions and data from their already fortified datacenters to ones in less unstable areas.

Advanced electric power technology would easily be able to fill in the gap caused by the loss of the US.

When it comes to transportation, the US is no longer the uncontested leader in technology, but only a participant in a close race. The US is losing its lead in aerospace technology.  The US is not even in the running for the lead in advanced railroad technology. Automobile and truck technology has long been a global competition, and the loss of US auto manufacturing would wound employment in Mexico and Canada, but not significantly elsewhere.

The environment continues to be destroyed at a rate exceeding its restoration regardless of the details of civilizational conflicts, although there are macrotrends that act to slow the rate of destruction. 

As long as the High Income countries (aside from the chaos-plagued US) continue to produce pollution-reducing solutions, as Low and Middle Income Countries graduate into the upper tier (and assuming that the World Bank and OECD don't move the dividing lines) their improving governance and economic incentives will lead them to reduce their emissions as well.

As we sum up the effects of US chaos in the five realms of global civilization beyond climate, it appears that short of a global thermonuclear war, the chief threats are related to reduction of silicon and lithium processing capability for computers, photovoltaic power sources and batteries.  These capabilities are concentrated in the Western Pacific, and it's essential that the rest of the world build up resiliency against disruptions there.

As long as environmental and climate deterioration can be reversed, the worst that might happen would be a reversion to the American lifestyle that was pervasive in the 1970s, before everyone had PCs and smartphones. With Total Electric Homes and electric cars in garages, this could be quite tolerable.

Seven simple fixes for US politics

Simple, though totally not at all easy.  But in today's sound-bite environment, simple is a requirement. Half of these could be implanted by individual states without the super high threshold required for Constitutional amendments.

1. Ranked choice, instant runoff voting. Reduces partisanship (parties hate this) and saves money.
2. Single, open primaries. Runoff first, with a 2-candidate election from the finalists. An alternative or supplement to preference voting that further enhances voter choice. Parties hate this even more.
3. Rule-based redistricting.  "Non-partisan commission, appointed by politicians" is an oxymoron.
4. Population-weighted Senate composition, with a two-Senator baseline, and all seats elected "at large" statewide.  One person, one vote, not one state, two votes, yet preserves a Congress with two distinct Houses with differing perspectives. Fixes the inequities of the Electoral College for free.
5. Term limits for all Federal elected offices. If it's good enough for the President, it's good enough for Congress and the Supreme Court. Even for the Supreme Court, "Serving during good behavior" notwithstanding, if individual retirement is allowed, then mandatory retirement is obviously also allowed. Mandatory retirement at the age of Social Security would be a bonus.
6. Rotating membership in the Supreme Court. Keep the nine justices, but every election cycle retire the senior justice and install a new justice from all the justices of the Appellate Courts, selected at random from those who have yet served or from nine who have served least recently. If the Senate fails to confirm a nominee, a new nominee is selected from the Appellate Justices as before.
7. Mandatory National Guard service. "A well regulated militia, being necessary to the security of a free state," requires that every able-bodied person who possesses a gun be properly trained and organized. This in no way impairs the right to keep arms, and enhances citizens' ability to effectively bear arms. Organizing refresher tours of service by random selection, just like jury duty, should not be excessively burdensome. Every new purchase of a weapon comes with free state-provided training. Free weapons are already provided to volunteer Militiamen; they should be allowed to keep de-automated ones when their tour ends.

The current American political system is not massively broken, but some fundamental defects that weren't intolerable in past eras have been exploited into severe problems. A bit of tuning is in order, and should make it substantially more robust.

Almost as good as free will

Stanford professor Robert Sapolsky has concluded that free will doesn't exist. I mostly agree.

Neurobiologists like Sapolsky, psychologists, and even computer scientists have realized that the brain has multiple components that independently make decisions in different domains, a point which seems to have eluded philosophers for generations.  Sapolsky's point about our inability to "choose what to choose" takes that dissociation far beyond most philosophers' thinking.

Notably missing from discussions about Sapolsky's ideas are the physicist's perspective.  The brain is a material object subject to the laws of quantum mechanics, which most physicists have realized is fully deterministic, following the Schrodinger and Dirac equations with incomprehensible complexity. In order to preserve free will in quantum theory, some creative physicists have concluded that "electrons have free will".

Yet even without absolute free will, our independence from the environment and other people that allows us to think and act on our own as individuals provides for an autonomous will, which should be good enough for practical and legal purposes.

Unrelated: Happy 2024!

The Byzantine Generals Problem also applies to politics with lies and misinformation

The classic work on the Byzantine Generals problem, arose in the context of fault-tolerant computing.  The Wikipedia entry on the topic is titled Byzantine Fault.   Thinking about the problem for reasons that I can't recall, I recently realized that it can apply to political systems infested with lies and misinformation. Studies of this aspect are hard to find, if they exist at all.  

Leslie Lamport's 1982 paper is concerned strictly with systems that use only point-to-point communications, rather than political situations where miscommunications are broadcast to audiences of various sizes. Its successors are (almost?) exclusively about improvements to the amount of messages needed to be sent to prevent any faults at all from being concluded.  The remainder are concerned with the consensus mechanisms for cybercurrencies, and rarely go into any mathematical depth about the consensus formation problem itself.  I expected to find discussions of this in the economics or political science literature, but my web search skills, such as they are, didn't uncover any.  Maybe their vocabulary is totally disjoint from the computer science vocabulary?

What political scientists should want to know are things like how the probability of a false consensus varies as the probabilities of any particular general generating a lie, and the number of variably lying generals changes.  If everyone lies, but nobody lies very often, how much worse or better is that then a situation where some generals lie all the time?

The least bad news is that autocracies can be consistently subverted if at least 1/3 of the "lieutenants" fail to follow the generalissimo. The Achilles heel of all the variations seems to be vote-counting systems. Open voting, like legislative roll call votes, appears to be most robust to miscounts. Open counting of secret ballots can also work. It's why vote-counting machines must be fully open source.