December 17, 2018
By: Pithaya Pookamans
December 17, 2018
By: Pithaya Pookamans
When I first saw this book by Warren Reed, a onetime Australian spy and my former colleague in Tokyo diplomatic circles, I was intrigued by its unusual title. It is actually an old Malay proverb, meaning that someone can see a louse as far away as China but is unaware of the elephant on his or her nose. The saying sits nicely in the story, where it is used to measure where the non-Asian world stands today in trying to understand the new power plays underway in the Asian region and the rise of China.
The author has a 50-year association with the region, which began with three years studying international law and politics at the University of Tokyo, all in written and spoken Japanese. He was part of a generation of young Australians who ventured to seek knowledge and wisdom in Asia rather than automatically heading for North America or Europe.
Most of Reed’s life after his initial contact with Japan has involved getting to know the rest of Asia as well. It shows in this contemporary story, which is built around a positive theme of spies with vastly different backgrounds crossing cultural and civilizational fault-lines in the region for a common cause: to thwart a terror attack on Tokyo, a conurbation of some 40 million people. The implications of this devious plot would stand alongside the horrors of 9/11 in the United States, and that’s not only for Japan but for the global community as a whole.
An outstanding feature of this story is how these spies cooperate with each other. This is no simple story of the good guys chasing down the bad guys, and winning. This is the first novel I have read that delves into matters cerebral, rather than merely outlining the mind games that spies often play with their targets.
John La Carre does that eminently well. But Elephant goes a number of steps further. It looks at how the spies involved, and under great pressure, mix and meld their intellects to provide a combined brain power much greater than their number. In a way, it is reminiscent of Bletchley Park in England during World War II when some thousands of British experts, mathematicians, creators of crosswords, spies and many others with a bent for problem-solving came together like a giant human computer to break crucial enemy codes.
Whether Britain would have avoided invasion without this outstandingly successful feat is beyond doubt. Not only did Britain survive but most of the Free World as well.
This is a fascinating attribute of the story. It’s not just a tale of intellectual, linguistic, and technical coordination. It goes far beyond that, delving into a greater challenge: that of building trust across borders seldom traversed. Indeed, in this story, the gravitational pull of history and political ideology work against fruitful cooperation at almost every turn.
Former spies who go on to write spy thrillers obviously have a treasure trove of experiences to draw upon in creating credible story lines and believable characters with which to furnish them. Those who inhabit Elephant are delightfully real. They’re not just clever at what they do, but have foibles and weaknesses like the rest of us.
Despite this, they exercise their strengths to ensure success in ways that most of us never get to appreciate about a spy’s life. How do they suppress their emotions to focus their minds clearly on the task at hand? How do they tackle the challenge of minimal or no sleep while keeping their minds razor-sharp? This story ranges over those dimensions of a spy’s life in a way that is not only real but readily understandable.
James Fallows, the national correspondent for The Atlantic in Washington, who also has had a lifetime of intimate contact with the Asian world, has described An Elephant on Your Nose as “pulling off the trick of being brisk-paced and absorbing while conveying larger truths about the new power game in Asia.” He said he read it straight through, which is what I did. It certainly is a page-turner, not just because of the rapidly evolving story line but mainly because of the characters. You feel you’re with them all the way. It’s a great read and is packed with information on, and insights into the spy world that are unique.
December 16, 2018
Yuval Noah Harari’s career is a publishing fairytale. An obscure Israeli academic writes a Hebrew-language history of humanity. Translated into English in 2014, the book sells more than a million copies. Facebook’s Mark Zuckerberg includes it in his book club in 2015. Ridley Scott wants to turn it into a TV series. Barack Obama says it gave him perspective on “the core things that have allowed us to build this extraordinary civilization that we take for granted”. Its sales spike when it is mentioned on Love Island.
That book was Sapiens, which is bold, breezy and engaging, romping its way from the discovery of fire to the creation of cyborgs in less than 500 pages. The future-gazing follow-up, Homo Deus, was also a global bestseller, and now Harari has turned his attention to the present with 21 Lessons for the 21st Century. It covers everything from war – Harari’s academic specialism – to meditation, his favourite leisure activity. (He does two hours a day, and a month-long retreat every year.) The collection of pieces aims to take stock of where humanity has reached, and where it might be going. Ultra-topical concerns such as “fake news” and the rise of authoritarians such as Donald Trump are set in the context of centuries of our biological and social evolution. As Obama said, this approach certainly gives the reader perspective. Ivan the Terrible was probably more, well, terrible than Trump. Cheer up! Until you remember climate change, at least – because, to his credit, Harari is one of the few futurists to factor ecological collapse into his predictions.
All the classic Harari themes are here. Life in 15th-century China was pretty slow, but now the pace of change feels unstoppable. Religion can be bad, but has its uses. Nationalism can be bad, but has its uses. Factory farming is very, very bad. Liberalism is good, but under threat. Hunter-gathering is a more exciting lifestyle choice than farming, or working in a factory. Technological advances bring Big Ethical Questions. And, of course, there is Harari’s main question, which is here spelled out in a chapter heading. “How do you live in an age of bewilderment, when the old stories have collapsed, and no new story has yet emerged to replace them?” He contends that collective myths, such as money and laws, have allowed us to build huge, complicated societies far beyond what our biological limitations might suggest is possible. But in the secular west, religion is fading from public life. And in our globalised world, the idea of a coherent nation-state is threatened. What do we have left to believe in?
One of the answers, although the author does not provide it, is gurus, of which we have created a new class, each individually tailored to our needs. Some anxious middle-class women have Gwyneth Paltrow, who promises enlightenment through yoni steaming and dietary restrictions. Angry, disaffected young men have Jordan Peterson, whose banal advice about tidying your room is camouflaged with Jungian blah and sulky oppositionalism. And people who shone at school and don’t understand why that hasn’t made them happy have Harari.
His books use evolutionary psychology as self-help: the world is a scary, fast-changing place, so it’s no surprise our savannah-trained ape brains struggle to navigate through it. We simply haven’t evolved to cope with automated checkouts and emailing after 7pm.
21 Lessons for the 21st Century is, as the title suggests, a loose collection of themed essays, many of which build on articles for the New York Times, Bloomberg and elsewhere. That has strange results. A chapter arguing that “Judaism played only a modest role in the annals of our species” seems random until you realise it started life as a piece for the liberal Israeli paper Haaretz. However, the format plays to Harari’s big selling point: the ambition and breadth of his work, smashing together unexpected ideas into dazzling observations. “Why do we fear terrorism more than sugar?” Harari asks at one point. (Answer: terrorism is not delicious on porridge.) “Property is a prerequisite for long-term inequality.” (Told you he was nostalgic for the era of berry collection.) “Homo Sapiens is a post-truth species, whose power depends on creating and believing fictions.” (OK, but you did this riff in Sapiens.) Microsoft “is an intricate legal fiction”. (And this one, except then it was Peugeot.)
The best reason not to throw this book out of the window is that, occasionally, Harari writes a paragraph that is genuinely mind-expanding. In the chapter on religion he notes: “Japan was the first power to develop and use precision-guided missiles.” Cue a hundred military historians dropping their marmalade. Say what? But it’s a feint: “We know these missiles as the kamikaze.” The willingness of Japanese pilots to die made their military hardware more effective, and “was the product of the death-defying spirit of sacrifice cultivated by State Shintō”. Humans are endlessly creative, goes the lesson, and sometimes we solve problems by changing the question rather than answering it. Beat that, AI.
There are plenty of provocations – why climate change might benefit the Russian economy, how humans could evolve into different species – but the globetrotting, history-straddling scope of Harari’s approach has an obvious drawback, which is that some of the observations here feel recycled. His sweeping statements, breathtaking though they are, can also feel untethered from the intellectual traditions from which they come. References to previous thinkers and writers on the subjects he covers are largely tucked away in endnotes.
Here’s an example. In the chapter on work, Harari suggests that technology could reduce the availability of paid labour for humans, creating millions of “spare” people. In response, we could “widen the range of human activities that are considered to be ‘jobs’”, Harari writes. “Maybe we need to turn a switch in our minds and realise that taking care of a child is arguably the most important and challenging job in the world.” Unpaid caring labour is undervalued in capitalist systems? No one tell the feminist movement, it’ll blow their minds.
It’s an unkind comparison, but I am compelled to return to Jordan Peterson. The two men are almost mirror-images: Harari is a vegan, while Peterson says that a beef-only diet is the best treatment for his depression. Both can sound like prophets. Harari advises that if you want to “know the truth about the universe … the best place to start is by observing suffering and exploring what it is”, while Peterson tells readers: “Suffering is real, and the artful infliction of suffering on another, for its own sake, is wrong. That became the cornerstone of my belief.”
And both men are treated as general all-purpose Clever People, rather than as academics with a particular specialism. They inhabit the high-altitude world of speaking tours and TED talks, repackaging their books into bite-sized chunks. They also fuse high and low culture, to show they are brainy but also with it, sharing a surprising interest in the 1994 Disney classic The Lion King. Peterson once gave a lecture where he praised Mufasa’s dominant, manly posture: “He’s a very regal-looking person … lion,” he told students. Meanwhile, Harari sees the film as a retelling of the Hindu text the Bhagavad Gita, with its themes of revenge and the circle of life. This kind of pop-culture criticism often relies on implying that no one else (ie, people without PhDs) has contemplated the existence of subtext before. Harari is hardly the first person to spot that the 2015 film Ex Machina was about gender, not just AI. “Many movies about artificial intelligence are so divorced from scientific reality that one suspects they are just allegories of completely different concerns,” he writes.
Ultimately, the smudges and slips of Sapiens are forgivable, because it’s a rollicking good read and I suspect it acts as a gateway drug to more academic accounts of human history. However, this book sees Harari enter that class of gurus who are assumed to be experts on everything. The 22nd lesson of this book is obvious: no single member of the tribe Homo Sapiens can know everything. If this new age needs new stories, then we have to let more people tell them.
• 21 Lessons for the 21st Century by Yuval Noah Harari (Jonathan Cape, £18.99) is the Guardian Bookshop’s Book of the Month. To order a copy for £13.99, saving £5, go to guardianbookshop.com or call 0330 333 6846. Free UK p&p over £10, online orders only. Phone orders min. p&p of £1.99.
October 18, 2018
Israeli-American psychologist and Nobel Laureate Daniel Kahneman is the founding father of modern behavioral economics. His work has influenced how we see thinking, decisions, risk, and even happiness.
In Thinking, Fast and Slow, his “intellectual memoir,” he shows us in his own words some of his enormous body of work.
Part of that body includes a description of the “machinery of … thought,” which divides the brain into two agents, called System 1 and System 2, which “respectively produce fast and slow thinking.” For our purposes these can also be thought of as intuitive and deliberate thought.
The Two Systems
Psychologists have been intensely interested for several decades in the two modes of thinking evoked by the picture of the angry woman and by the multiplication problem, and have offered many labels for them. I adopt terms originally proposed by the psychologists Keith Stanovich and Richard West, and will refer to two systems in the mind, System 1 and System 2.
- System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control.
- System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice, and concentration.
If asked to pick which thinker we are, we pick system 2. However, as Kahneman points out:
The automatic operations of System 1 generate surprisingly complex patterns of ideas, but only the slower System 2 can construct thoughts in an orderly series of steps . I also describe circumstances in which System 2 takes over, overruling the freewheeling impulses and associations of System 1. You will be invited to think of the two systems as agents with their individual abilities, limitations, and functions.
These vary by individual and are often “innate skills that we share with other animals.”
We are born prepared to perceive the world around us, recognize objects, orient attention, avoid losses, and fear spiders. Other mental activities become fast and automatic through prolonged practice. System 1 has learned associations between ideas (the capital of France?); it has also learned skills such as reading and understanding nuances of social situations. Some skills, such as finding strong chess moves, are acquired only by specialized experts. Others are widely shared. Detecting the similarity of a personality sketch to an occupational stereotype requires broad knowledge of the language and the culture, which most of us possess. The knowledge is stored in memory and accessed without intention and without effort.
This is when we do something that does not come naturally and requires some sort of continuous exertion.
In all these situations you must pay attention, and you will perform less well, or not at all, if you are not ready or if your attention is directed inappropriately.
Paying attention is not really the answer as that is mentally expensive and can make people “effectively blind, even to stimuli that normally attract attention.” This is the point of Christopher Chabris and Daniel Simons in their book The Invisible Gorilla. Not only are we blind to what is plainly obvious when someone points it out but we fail to see that we are blind in the first place.
The Division of Labour
Systems 1 and 2 are both active whenever we are awake. System 1 runs automatically and System 2 is normally in a comfortable low-effort mode, in which only a fraction of its capacity is engaged. System 1 continuously generates suggestions for System 2: impressions, intuitions, intentions, and feelings. If endorsed by System 2, impressions and intuitions turn into beliefs, and impulses turn into voluntary actions. When all goes smoothly, which is most of the time, System 2 adopts the suggestions of System 1 with little or no modification. You generally believe your impressions and act on your desires, and that is fine— usually.
When System 1 runs into difficulty, it calls on System 2 to support more detailed and specific processing that may solve the problem of the moment. System 2 is mobilized when a question arises for which System 1 does not offer an answer, as probably happened to you when you encountered the multiplication problem 17 × 24. You can also feel a surge of conscious attention whenever you are surprised. System 2 is activated when an event is detected that violates the model of the world that System 1 maintains. In that world, lamps do not jump, cats do not bark, and gorillas do not cross basketball courts. The gorilla experiment demonstrates that some attention is needed for the surprising stimulus to be detected. Surprise then activates and orients your attention: you will stare, and you will search your memory for a story that makes sense of the surprising event. System 2 is also credited with the continuous monitoring of your own behavior—the control that keeps you polite when you are angry, and alert when you are driving at night. System 2 is mobilized to increased effort when it detects an error about to be made. Remember a time when you almost blurted out an offensive remark and note how hard you worked to restore control. In summary, most of what you (your System 2) think and do originates in your System 1, but System 2 takes over when things get difficult, and it normally has the last word.
The division of labor between System 1 and System 2 is highly efficient: it minimizes effort and optimizes performance. The arrangement works well most of the time because System 1 is generally very good at what it does: its models of familiar situations are accurate, its short-term predictions are usually accurate as well, and its initial reactions to challenges are swift and generally appropriate. System 1 has biases, however, systematic errors that it is prone to make in specified circumstances. As we shall see, it sometimes answers easier questions than the one it was asked, and it has little understanding of logic and statistics. One further limitation of System 1 is that it cannot be turned off.
Conflict between an automatic reaction and an intention to control it is common in our lives. We are all familiar with the experience of trying not to stare at the oddly dressed couple at the neighboring table in a restaurant. We also know what it is like to force our attention on a boring book, when we constantly find ourselves returning to the point at which the reading lost its meaning. Where winters are hard, many drivers have memories of their car skidding out of control on the ice and of the struggle to follow well-rehearsed instructions that negate what they would naturally do: “Steer into the skid, and whatever you do, do not touch the brakes!” And every human being has had the experience of not telling someone to go to hell. One of the tasks of System 2 is to overcome the impulses of System 1. In other words, System 2 is in charge of self-control.
The question that is most often asked about cognitive illusions is whether they can be overcome. The message of these examples is not encouraging. Because System 1 operates automatically and cannot be turned off at will, errors of intuitive thought are often difficult to prevent. Biases cannot always be avoided, because System 2 may have no clue to the error. Even when cues to likely errors are available, errors can be prevented only by the enhanced monitoring and effortful activity of System 2. As a way to live your life, however, continuous vigilance is not necessarily good, and it is certainly impractical. Constantly questioning our own thinking would be impossibly tedious, and System 2 is much too slow and inefficient to serve as a substitute for System 1 in making routine decisions.
The best we can do is a compromise: learn to recognize situations in which mistakes are likely and try harder to avoid significant mistakes when the stakes are high. The premise of this book is that it is easier to recognize other people’s mistakes than our own.
Still Curious? Thinking, Fast and Slow is a tour-de-force when it comes to thinking.
June 7, 2018
COMMENT | “The people expect them to be the embodiment of all things good and holy. But the question is: Are they?”
– A Kadir Jasin, “Constitution: The King and the Pauper”
I never thought I would say this, but former Information Minister Zainuddin Maidin questioning UMNO information chief Annuar Musa if the latter was still living in the Hang Tuah era, was pretty interesting blowback for Annuar’s urging of the state security apparatus to investigate Bersatu Supreme Council member A Kadir Jasin for his article allegedly “questioning” the royal institution.
Furthermore Maidin’s caution of not threatening the rakyat with “reckless feudalism” is also a reminder that perhaps, we are living in a new dawn of Malaysians politics, something which I am skeptical of. This idea that political hegemons “threaten” the rakyat with “feudalism”, reckless or otherwise, has always been the preferred weapon of the “bangsa and agama” (race and religion) crowd.
Here is an example of this narrative whereby the rakyat have been threatened with “feudalism”.
When Anwar Ibrahim goes on his royal tour, apparently to convince the royalty that all is kosher with “Malay rights” and “Islam”, this is part of the narrative that Malay rights and Islam are under attack.
Anwar Ibrahim– A Reformist or a Fawning Royalist? Maybe a Political Chameleon. He should be grateful to Malaysians for his Pardon.
When Anwar Ibrahim and any Malay politician for that matter have to reassure the Malay community that for hithe appointment of Tommy Thomas will not adversely affect Malay rights and Islam, this feeds into the narrative that those ideas/institutions are under attack. The counter-narrative is, have they ever been under attack?
What did Kadir actually say in his pieces about the royalty? In his blog post, “Constitution: The King and the Pauper”, he:
To wit – “But unlike the pauper who evokes God’s name to earn sympathy of the passers-by, the Agong evokes God’s name in his oath of office.”
That’s powerful stuff coming from Kadir, and the reality is that this is what the average rakyat is wondering.
When kids carry out a car wash to contribute to the Hope Fund or whatever it’s called, people think it demonstrates how Malaysian we are.
When the salaries of politicians are cut and the trimmings used to contribute to the Hope Fund, people think it demonstrates how politicians are playing their part in saving this country.
However, when the expenses of the royalty are brought into question, people wonder, why is it so much when we are told that we are on an austerity drive.
We have a Finance Minister who apparently has sleepless nights because of his fear of the financial time bombs that he would discover in the red files.
The rakyat also notices how the royalty, during the lead-up to the elections and post-elections, by word or deed have made extremely political overtures.
Of course, when you bring up the expenses of the royalty, you better cite sources which are credible, which is where Kadir’s piece suffers.
However, what should be done is that the Finance Ministry should immediately issue a response and tell the rakyat exactly how much is spent on the royal institutions.
After all, this is supposed to be a ministry which values truth above all else. Truth, we are told, is needed for this country to move forward.
So when Kadir makes a statement about royal expenses, his claim does not have to be challenged by the royalty but should either be verified and challenged by the Finance Ministry. End of controversy. However, Kadir’s piece is more than just about royal expenses.
Kadir’s conclusion is this – “In conclusion, our CONSTITUTIONAL monarch (emphasis in original) has nothing to fear if they understand their special position and stick to their duties as spelt out by the constitution – and the rakyat wonder, does the royal institution understand their special position and stick to their duties as spelt out in the constitution?”
When UMNO was in charge, there was never an issue when UMNO set policy. Even when former Prime Minister Najib Abdul Razak introduced the National Security Council Act – by the way Harapan folks, is this act going to be ditched? – the “issues” with the objections of the royalty were simply brushed aside.
Nobody in UMNO seemed to care that the royal institutions were sidelined because the sitting UMNO Prime Minister wanted more power than the Agong. Even Prime Minister Dr. Mahathir Mohamad said as much on the campaign trail.
Did anyone from UMNO or PAS object when the constitutional provisions that guaranteed certain rights to the royalty were supplanted by this most odious of “acts” from UMNO? Were the rakyat threatened by reckless feudalism from the UMNO state?
Did the royalty make noise that the powers they were guaranteed under the constitution – the very same powers, that Kadir argues, makes them immune from insecurity – were under attack from the Najib regime?
Did the Malays need to be reassured that the Malay institution was not under attack?
This idea that the royal institution has not changed through constitutional means is a myth, much like the mythical/mystical era – depending on the source – of the Hang Tuah era.
The current Harapan grand poohbah in his time went against the “reckless feudalism” and instituted changes that were embraced by some of the very same UMNO potentates who are now scrambling for power in the political party – UMNO – which has staked the “bangsa and agama” ground as its sole province.
Look even in the Sinar Metro article, all Kadir did was raise three points – in my opinion – which are vital to the economic and social stability of this country. Reproduced here in the original Malay:
My interpretation of Kadir’s words is as follows (you may of course disagree): In times of austerity, because the rakyat are in a crunch, the government of the day should scrutinise its expenses and the royal institutions should also play their part. That the royal institutions should not be involved in unofficial business and social enterprises, because it weakens the integrity of these institutions and encourages practices which are detrimental to a functional state. And as Malaysians we should understand that reforms of institutions – all institutions – are needed to save this country.
If anything, what Kadir is advocating is “responsible feudalism”, which I suppose is what a constitutional monarchy is all about.of
S THAYAPARAN is Commander (Rtd) of the Royal Malaysian Navy
March 4, 2018
Artificial intelligence researchers and conventional economists may have very different views about the impact of new technologies. But right now, and forgetting the possibility of an existential battle between man and machine, it seems quite plausible to expect a significant pickup in productivity growth over the next five years.
CAMBRIDGE – Most economic forecasters have largely shrugged off recent advances in artificial intelligence (for example, the quantum leap demonstrated by DeepMind’s self-learning chess program last December), seeing little impact on longer-term trend growth. Such pessimism is surely one of the reasons why real (inflation-adjusted) interest rates remain extremely low, even if the bellwether US ten-year bond rate has ticked up half a percentage point in the last few months. If supply-side pessimism is appropriate, the recent massive tax and spending packages in the United States will likely do much more to raise inflation than to boost investment.
It is hard to know who is right: neither economists nor scientists have a great track record when it comes to making long-term predictions. But right now, and leaving aside the possibility of an existential battle between man and machine, it seems quite plausible to expect a significant pickup in productivity growth over the next five years.–
There are plenty of reasons to object to recent US fiscal policy, even if lowering the corporate-tax rate made sense (albeit not by the amount enacted). Above all, we live in an era of rising inequality and falling income shares for labor relative to capital. Governments need to do more, not less, to redistribute income and wealth.
It is hard to know what US President Donald Trump is thinking when he boasts that his policies will deliver up to 6% growth (unless he is talking about prices, not output!). But if inflationary pressures do indeed materialize, current growth might last significantly longer than forecasters and markets believe.
In any case, the focus of economists’ pessimism is long-term growth. Their stance is underpinned by the belief that advanced economies cannot hope to repeat the dynamism that the US enjoyed from 1995-2005 (and other advanced economies a bit later), much less the salad days of the 1950s and 1960s.
But the doubters ought to consider the fact that many scientists, across many disciplines, see things differently. Young researchers, in particular, believe that advances in basic knowledge are coming as fast as ever, even if practical applications are taking a long time to develop. Indeed, a small but influential cult touts the Hungarian-American mathematician John von Neumann’s “singularity” theory. Someday, thinking machines will become so sophisticated that they will be able to invent other machines without any human intervention, and suddenly technology will advance exponentially.
If so, perhaps we should be far more worried about the ethical and social implications of material growth that is faster than humans can spiritually absorb. The angst over AI mostly focuses on inequality and the future of work. But as science fiction writers have long warned us, the potential threats arising from the birth of silicon-based “life” forms are truly frightening.
It is hard to know who is right: neither economists nor scientists have a great track record when it comes to making long-term predictions. But right now, and leaving aside the possibility of an existential battle between man and machine, it seems quite plausible to expect a significant pickup in productivity growth over the next five years.
Consider that the main components of economic growth are increases in the labor force, increases in investment (both public and private), and “productivity,” namely the output than can be produced with a given amount of inputs, thanks to new ideas. Over the past 10-15 years, all three have been dismally low in the advanced economies.
Labor force growth has slowed sharply, owing to declining birth rates, with immigration failing to compensate even in pre-Trump America. The influx of women into the labor force played a major role in boosting growth in the latter part of the twentieth century. But now that has largely played out, although governments could do more to support female labor force participation and pay equity.
Similarly, global investment has collapsed since the 2008 financial crisis (though not in China), lowering potential growth. And measured productivity growth has declined everywhere, falling roughly by half in the US since the tech boom of the mid-1990s. No wonder global real interest rates are so low, with high post-crisis savings chasing a smaller supply of investment opportunities.
Still, the best bet is that AI and other new technologies will eventually come to have a much larger impact on growth than they have up to now. It is well known that it can take a very long time for businesses to reimagine productive processes to exploit new technologies: railroads and electricity are two leading examples. The pickup in global growth is likely to be a catalyst for change, creating incentives for firms to invest and introduce new technologies, some of which will substitute for labor, offsetting the slowdown in the growth of the workforce.
With the after-effects of the financial crisis fading, and AI perhaps starting to gain traction, trend US output growth can easily stay strong for the next several years (though, of course, a recession is also possible). The likely corresponding rise in real global interest rates will be tricky for central bankers to navigate. In the best case, they will be able to “ride the wave,” as Alan Greenspan famously did in the 1990s, though more inflation is likely this time.
The bottom line is that neither policymakers nor markets should be betting on the slow growth of the past decade carrying over to the next. But that might not be entirely welcome news. If the scientists are right, we may come to regret the growth we get.
January 10, 2018
In 2016, the highest-paid employee of the State of California was Jim Mora, the head coach of U.C.L.A.’s football team. (He has since been fired.) That year, Mora pulled in $3.58 million. Coming in second, with a salary of $2.93 million, was Cuonzo Martin, at the time the head coach of the men’s basketball team at the University of California, Berkeley. Victor Khalil, the chief dentist at the Department of State Hospitals, made six hundred and eighty-six thousand dollars; Anne Neville, the director of the California Research Bureau, earned a hundred and thirty-five thousand dollars; and John Smith, a seasonal clerk at the Franchise Tax Board, earned twelve thousand nine hundred dollars.
I learned all this from a database maintained by the Sacramento Bee. The database, which is open to the public, is searchable by name and by department, and contains precise salary information for the more than three hundred thousand people who work for California. Today, most state employees probably know about the database. But that wasn’t the case when it was first created, in 2008. This made possible an experiment.
The experiment, conducted by four economists, was designed to test rival theories of inequity. According to one theory, the so-called rational-updating model, people assess their salaries in terms of opportunities. If they discover that they are being paid less than their co-workers, they will “update” their projections about future earnings and conclude that their prospects of a raise are good. Conversely, people who learn that they earn more than their co-workers will be discouraged by that news. They’ll update their expectations in the opposite direction.
According to a rival theory, people respond to inequity not rationally but emotionally. If they discover that they’re being paid less than their colleagues, they won’t see this as a signal to expect a raise but as evidence that they are underappreciated. (The researchers refer to this as the “relative income” model.) By this theory, people who learn that their salaries are at the low end will be pissed. Those who discover that they’re at the high end will be gratified.
The economists conducting the study sent an e-mail to thousands of employees at three University of California schools—Santa Cruz, San Diego, and Los Angeles—alerting them to the existence of the Bee’s database. This nudge produced a spike in visits to the Web site as workers, in effect, peeked at one another’s paychecks.
A few days later, the researchers sent a follow-up e-mail, this one with questions. “How satisfied are you with your job?” it asked. “How satisfied are you with your wage/salary on this job?” They also sent the survey to workers who hadn’t been nudged toward the database. Then they compared the results. What they found didn’t conform to either theory, exactly.
By bridging the fields of anthropology, evolutionary biology, behavioral ecology, geopolitics, and social science, trailblazing scientist Jared Diamond (b. September 10, 1937) has done more than anyone since Margaret Mead to decondition the Eurocentric approach to history and debunk the biological fallacies on which the monster of racism feeds. His Pulitzer-winning 1997 book Guns, Germs, and Steel: The Fates of Human Societies (public library) is a foundational text illuminating the conditions that led to inequality in the modern world and combating the broken logic that perpetuates these toxic beliefs.
At the heart of Diamond’s work is the notion that in order to understand any one society, we must contextualize it in the larger ecosystem of humanity and therefore must understand all societies. Only by grasping the richness and diversity of the entire ecosystem can we begin to dismantle our assumptions about the value of others and realize that people from different groups fared differently in history not due to their innate abilities but due to a complex cluster of environmental and geopolitical forces.
As the relative-income model predicted, those who’d learned that they were earning less than their peers were ticked off. Compared with the control group, they reported being less satisfied with their jobs and more interested in finding new ones. But the relative-income model broke down when it came to those at the top. Workers who discovered that they were doing better than their colleagues evinced no pleasure. They were merely indifferent. As the economists put it in a paper that they eventually wrote about the study, access to the database had a “negative effect on workers paid below the median for their unit and occupation” but “no effect on workers paid above median.”
The message the economists took from their research was that employers “have a strong incentive” to keep salaries secret. Assuming that California workers are representative of the broader population, the experiment also suggests a larger, more disturbing conclusion. In a society where economic gains are concentrated at the top—a society, in other words, like our own—there are no real winners and a multitude of losers.
Keith Payne, a psychologist, remembers the exact moment when he learned he was poor. He was in fourth grade, standing in line in the cafeteria of his elementary school, in western Kentucky. Payne didn’t pay for meals—his family’s income was low enough that he qualified for free school lunch—and normally the cashier just waved him through. But on this particular day there was someone new at the register, and she asked Payne for a dollar twenty-five, which he didn’t have. He was mortified. Suddenly, he realized that he was different from the other kids, who were walking around with cash in their pockets.
“That moment changed everything for me,” Payne writes, in “The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die.” Although in strictly economic terms nothing had happened—Payne’s family had just as much (or as little) money as it had the day before—that afternoon in the cafeteria he became aware of which rung on the ladder he occupied. He grew embarrassed about his clothes, his way of talking, even his hair, which was cut at home with a bowl. “Always a shy kid, I became almost completely silent at school,” he recalls.
Payne is now a professor at the University of North Carolina, Chapel Hill. He has come to believe that what’s really damaging about being poor, at least in a country like the United States—where, as he notes, even most people living below the poverty line possess TVs, microwaves, and cell phones—is the subjective experience of feeling poor. This feeling is not limited to those in the bottom quintile; in a world where people measure themselves against their neighbors, it’s possible to earn good money and still feel deprived. “Unlike the rigid columns of numbers that make up a bank ledger, status is always a moving target, because it is defined by ongoing comparisons to others,” Payne writes.
Feeling poor, meanwhile, has consequences that go well beyond feeling. People who see themselves as poor make different decisions, and, generally, worse ones. Consider gambling. Spending two bucks on a Powerball ticket, which has roughly a one-in-three-hundred-million chance of paying out, is never a good bet. It’s especially ill-advised for those struggling to make ends meet. Yet low-income Americans buy a disproportionate share of lottery tickets, so much so that the whole enterprise is sometimes referred to as a “tax on the poor.”
One explanation for this is that poor people engage in riskier behavior, which is why they are poor in the first place. By Payne’s account, this way of thinking gets things backward. He cites a study on gambling performed by Canadian psychologists. After asking participants a series of probing questions about their finances, the researchers asked them to rank themselves along something called the Normative Discretionary Income Index. In fact, the scale was fictitious and the scores were manipulated. It didn’t matter what their finances actually looked like: some of the participants were led to believe that they had more discretionary income than their peers and some were led to believe the opposite. Finally, participants were given twenty dollars and the choice to either pocket it or gamble it on a computer card game. Those who believed they ranked low on the scale were much more likely to risk the money on the card game. Or, as Payne puts it, “feeling poor made people more willing to roll the dice.”
In another study, this one conducted by Payne and some colleagues, participants were divided into two groups and asked to make a series of bets. For each bet, they were offered a low-risk / low-reward option (say, a hundred-per-cent chance of winning fifteen cents) and a high-risk / high-reward option (a ten-per-cent chance of winning a dollar-fifty). Before the exercise began, the two groups were told different stories (once again, fictitious) about how previous participants had fared. The first group was informed that the spread in winnings between the most and the least successful players was only a few cents, the second that the gap was a lot wider. Those in the second group went on to place much chancier bets than those in the first. The experiment, Payne contends, “provided the first evidence that inequality itself can cause risky behavior.”
People’s attitude toward race, too, he argues, is linked to the experience of deprivation. Here Payne cites work done by psychologists at N.Y.U., who offered subjects ten dollars with which to play an online game. Some of the subjects were told that, had they been more fortunate, they would have received a hundred dollars. The subjects, all white, were then shown pairs of faces and asked which looked “most black.” All the images were composites that had been manipulated in various ways. Subjects in the “unfortunate” group, on average, chose images that were darker than those the control group picked. “Feeling disadvantaged magnified their perception of racial differences,” Payne writes.
“The Broken Ladder” is full of studies like this. Some are more convincing than others, and, not infrequently, Payne’s inferences seem to run ahead of the data. But the wealth of evidence that he amasses is compelling. People who are made to feel deprived see themselves as less competent. They are more susceptible to conspiracy theories. And they are more likely to have medical problems. A study of British civil servants showed that where people ranked themselves in terms of status was a better predictor of their health than their education level or their actual income was.
All of which leads Payne to worry about where we’re headed. In terms of per-capita income, the U.S. ranks near the top among nations. But, thanks to the growing gap between the one per cent and everyone else, the subjective effect is of widespread impoverishment. “Inequality so mimics poverty in our minds that the United States of America . . . has a lot of features that better resemble a developing nation than a superpower,” he writes.
Rachel Sherman is a professor of sociology at the New School, and, like Payne, she studies inequality. But Sherman’s focus is much narrower. “Although images of the wealthy proliferate in the media, we know very little about what it is like to be wealthy in the current historical moment,” she writes in the introduction to “Uneasy Street: The Anxieties of Affluence.”
Sherman’s first discovery about the wealthy is that they don’t want to talk to her. Subjects who agree to be interviewed suddenly stop responding to her e-mails. One woman begs off, saying she’s “swamped” with her children; Sherman subsequently learns that the kids are at camp. After a lot of legwork, she manages to sit down with fifty members of the haut monde in and around Manhattan. Most have family incomes of more than five hundred thousand dollars a year, and about half have incomes of more than a million dollars a year or assets of more than eight million dollars, or both. (At least, this is what they tell Sherman; after a while, she comes to believe that they are underreporting their earnings.) Her subjects are so concerned about confidentiality that Sherman omits any details that might make them identifiable to those who have visited their brownstones or their summer places.
“I poked into bathrooms with soaking tubs or steam showers” is as far as she goes. “I conducted interviews in open kitchens, often outfitted with white Carrara marble or handmade tiles.”
A second finding Sherman makes, which perhaps follows from the first, is that the privileged prefer not to think of themselves that way. One woman, who has an apartment overlooking the Hudson, a second home in the Hamptons, and a household income of at least two million dollars a year, tells Sherman that she considers herself middle class. “I feel like, no matter what you have, somebody has about a hundred times that,” she explains. Another woman with a similar household income, mostly earned by her corporate-lawyer husband, describes her family’s situation as “fine.”
“I mean, there are all the bankers that are heads and heels, you know, way above us,” she says. A third woman, with an even higher household income—two and a half million dollars a year—objects to Sherman’s use of the word “affluent.”
“ ‘Affluent’ is relative,” the woman observes. Some friends of hers have recently flown off on vacation on a private plane. “That’s affluence,” she says.
This sort of talk dovetails neatly with Payne’s work. If affluence is in the eye of the beholder, then even the super-rich, when they compare their situation with that of the ultra-rich, can feel sorry for themselves. The woman who takes exception to the word “affluent” makes a point of placing herself at the “very, very bottom” of the one per cent. “The disparity between the bottom of the 1 percent and the top of the 1 percent is huge,” she observes.
Sherman construes things differently. Her subjects, she believes, are reluctant to categorize themselves as affluent because of what the label implies. “These New Yorkers are trying to see themselves as ‘good people,’ ” she writes. “Good people work hard. They live prudently, within their means. . . . They don’t brag or show off.” At another point, she observes that she was “surprised” at how often her subjects expressed conflicted emotions about spending. “Over time, I came to see that these were often moral conflicts about having privilege in general.”
Whatever its source—envy or ethics—the discomfort that Sherman documents matches the results of the University of California study. Inequity is, apparently, asymmetrical. For all the distress it causes those on the bottom, it brings relatively little joy to those at the top.
As any parent knows, children watch carefully when goodies are divvied up. A few years ago, a team of psychologists set out to study how kids too young to wield the word “unfair” would respond to unfairness. They recruited a bunch of preschoolers and grouped them in pairs. The children were offered some blocks to play with and then, after a while, were asked to put them away. As a reward for tidying up, the kids were given stickers. No matter how much each child had contributed to the cleanup effort, one received four stickers and the other two. According to the Centers for Disease Control and Prevention, children shouldn’t be expected to grasp the idea of counting before the age of four. But even three-year-olds seemed to understand when they’d been screwed. Most of the two-sticker recipients looked enviously at the holdings of their partners. Some said they wanted more. A number of the four-sticker recipients also seemed dismayed by the distribution, or perhaps by their partners’ protests, and handed over some of their winnings. “We can . . . be confident that these actions were guided by an understanding of equality, because in all cases they offered one and only one sticker, which made the outcomes equal,” the researchers reported. The results, they concluded, show that “the emotional response to unfairness emerges very early.”
If this emotional response is experienced by toddlers, it suggests that it may be hardwired—a product of evolution rather than of culture. Scientists at the Yerkes National Primate Research Center, outside Atlanta, work with brown capuchin monkeys, which are native to South America. The scientists trained the monkeys to exchange a token for a slice of cucumber. Then they paired the monkeys up, and offered one a better reward—a grape. The monkeys that continued to get cucumbers, which earlier they’d munched on cheerfully, were incensed. Some stopped handing over their tokens. Others refused to take the cucumbers or, in a few cases, threw the slices back at the researchers. Like humans, capuchin monkeys, the researchers wrote, “seem to measure reward in relative terms.”
Preschoolers, brown capuchin monkeys, California state workers, college students recruited for psychological experiments—everyone, it seems, resents inequity. This is true even though what counts as being disadvantaged varies from place to place and from year to year. As Payne points out, Thomas Jefferson, living at Monticello without hot water or overhead lighting, would, by the standards of contemporary America, be considered “poorer than the poor.” No doubt inequity, which, by many accounts, is a precondition for civilization, has been a driving force behind the kinds of innovations that have made indoor plumbing and electricity, not to mention refrigeration, central heating, and Wi-Fi, come, in the intervening centuries, to seem necessities in the U.S.
Still, there are choices to be made. The tax bill recently approved by Congress directs, in ways both big and small, even more gains to the country’s plutocrats. Supporters insist that the measure will generate so much prosperity that the poor and the middle class will also end up benefitting. But even if this proves true—and all evidence suggests that it will not—the measure doesn’t address the real problem. It’s not greater wealth but greater equity that will make us all feel richer. ♦