Time to rethink almost everything

by Tom Evslin, on Fractals of Change

Human population is about to start shrinking instead of exploding in a Malthusian nightmare. Machines can think or at least can do jobs which we thought require thinking. Complex global supply webs protected by The Pax Americana are dangerously fragile and ephemeral.

So now what?

That’s what this resurrected Fractals of Change blog is about. Since change begets change in a fractalized mosaic of unintended consequences, the future is literally unpredictable. Nevertheless we must plan, act, and react. All my guesses about the future will be wrong in detail; some may be directionally correct. Same goes for your feedback if you choose to comment.

The Population U-Turn

In his 1798 An Essay on the Principle of Population, economist Thomas Malthus wrote “The power of population is indefinitely greater than the power in the earth to produce subsistence for man”. He explained why: “Population, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio”. His principle was reasonable in light of observed population behavior. Until recently human population seemed to be following his rule as constraints like infant mortality and hunger were removed.

The consequences of belief in his principle were draconian. The British Poor Law Amendment Act of 1834 sought to make welfare so miserable that the poor would be deterred from seeking it and prevented from reproducing. British officials saw the Irish Potato Famine (1845-1852), which killed a million people, as a Malthusian correction so restricted food and other aid.

In 1968 Stanford biologist Paul Erlich wrote The Population Bomb predicting that hundreds of millions of people would starve to death in the 1970s and 1980s. Despite his predictions being wrong, these theories have underpinned global policy for decades—from forced sterilizations in India to China’s one-child policy. Much foreign aid was either directly for population control or conditioned on it. The deeply Malthusian Global 2000 Report commissioned by Jimmy Carter and published in 1980 used computer models to predict potential global catastrophe by 2000 because of resource depletion and became the official grounds for government policy.

Malthusians (almost everyone) shrugged off the faulty predictions claiming that catastrophe was only temporarily averted by one-time improvements in agriculture. “Moreover,” the doom-sayers said, “we now know that the world is warming rapidly as a result of human population growth and increased consumption by those who formerly had nothing so Armageddon is surely coming.”

Putting aside the debatable question of how much of the clearly observable warming is anthropogenic, what effect does a huge drop-off in fertility and an impending population decline have? One effect is that an almost incurable spiral of disaster becomes a manageable short-term problem of bridging from now to when demand from a shrinking and fully-fed population starts to decline. That change unconstrains the possible solutions. Future posts in Fractals will be about the possibilities.

Future posts will also be about the whole new set of problems – transitional and otherwise – which low fertility rates and reduced demand will bring.

AI For Better and/or Worse

Management guru Peter Drucker divided the workforce into builders, sellers, and measurers, which includes middle managers, operations staff, finance analysts, and marketing coordinators. AI can do much of the work of this latter group, according to Cloudflare CEO Mathew Prince explaining a layoff of 1100 people in May of this year. Is AI going to result in mass unemployment? Will it make the other job categories more productive so more people will be hired into them? More future topics.

No question AI can be used for both good and bad. Will its ability to discover flaws in security systems result in better security systems or more successful cyberattacks? The answer is clearly both. AI can speed the development of vaccines and medicines; it can also be used to design harmful viruses. How can we influence the balance between benign and harmful uses?

Is an implementation of artificial intelligence likely to become malign on its own? Might it decide that some or all humans need to be constrained or eliminated for “the good of the world”. Isaac Asimov’s fictional conjectures on the permutations of his three laws of robotics are no longer just theoretical.

unGlobalization

Since World War II the US has protected global commerce both by insisting on low tariffs and physically protecting trade routes. That was very much in our interest when we were exporters of finished goods and importers of raw materials, energy, and intermediate goods like steel. Globalization did lift much of the world out of poverty. It benefitted Americans as consumers; but the economic benefits were unbalanced and have helped lead to both the tea party and the occupy movements and our growing internal polarization.

Moreover, the supply chains, which were optimized mainly to reduce immediate costs, assumed the world would never change. Then came Covid, Chinese mercantilism, American energy independence, and lately drone warfare and Hormuz. Humpty Dumpty has fallen off the wall. What does a more fragmented and localized world look like? What do we want it to look like?

Complete closure of the Straits of Hormuz would actually be good for the US (and most of the Western Hemisphere) – although not good for everyone in the US. We will pay a little more for energy but we have plenty of oil and natural gas which we can sell at a good price worldwide. Our energy-intensive farming and manufacturing will have higher costs but a huge competitive advantage over Asian and European competitors both in price and supply-chain security. Insecurity in the Gulf discourages a flight of capital and banking to suddenly vulnerable places like Dubai. Should we just consider this the new normal, make sure that we handle the disruption domestically better than we did globalization, and let those who need Hormuz to be open try to keep it that way?

“It’s not our war”, said lame-duck British Prime Minister Keir Starmer. Actually, it is fuel for his nation which flows through Hormuz, not ours.

In a more localized world, do we need higher tariffs to lessen the short-term attraction of outsourcing? Do we need government industrial policy so that critical domestic industries can grow? How do we in the US go back to mining our own rare metals and building our own infrastructure? Will there be a huge environmental cost? Do we need more government control or less?