I haven’t been posting much the last couple of weeks. There are a variety of reasons for that including spending extra time reading and learning new things but the main reason is that I am trying to understand better where we are today.
What do I mean by that? I have been making the argument that we are facing a transition as big as the one from agrarian society to industrial society (and from hunter gatherer to agrarian before that). Are we near the beginning of this transition or somewhere in the middle? Or maybe put more starkly are we in the 1880s or are we in 1914? That is do we have some time to figure things our or are we on the brink of disaster?
Ultimately the answer to this will only be knowable ex-post, once history has unfolded but in the meantime here is why I think looking at the past is instructive. At around 1880 we had all the ingredients for rapid industrialization in place. We knew how to make steel in quantity, we had the beginnings of electric power, and we had more or less figured out the assembly line system of factory layout. The population had shifted from the country to the city as part or urbanization (with most cities having pretty horrid living conditions).
At the same time we had the old agrarian system defining much of the political landscape including territorial conflicts, such as the Franco-Prussian war of 1870-71. We wound up with a volatile combination of disenfranchised city dwellers (who were not yet reaping the rewards of industrialization) and leaders who were still obsessed with “land” as the primary source of wealth and power.
A lot about where we are today has similar characteristics. We have all of the ingredients for an information society in place: a global network that connects everyone, rapidly improving machine learning and automation, additive manufacturing and robotics (to name just a few key ingredients). We also have globalized many aspects of the economy with global corporations and supply chains.
Yet again the political leadership throughout the world is still largely thinking in industrial terms, including emphasizing the nation state as the geographic organizing principle (and playing up ethnic and religious differences). Once again we also have large groups of people who feel pushed around or left behind by the emerging information economy.
In combination then it seems like we have once again reached a time period of potentially dramatic change. We are using dubious tools, such as quantitative easing, to manage the economy. We are using information technology to surveil and control rather than empower people. All of these suppress short term volatility but likely at the cost of much the eventual transition worse.