I don’t see a knowledge economy. I see a knowledge industry.

The term “knowledge economy” gets thrown around a lot. When you combine the term with other terms such as “artificial intelligence” and “machine learning”, you can be left with the impression that unless you have an engineering degree or know how to code, then you will be left to wonder the streets of dystopia, meandering through blithe in search of value or meaning. The knowledge economy, based on how it is presented, sounds like a place carved out for the information elite. I don’t take the dreaded scenario seriously because the knowledge economy does not exist. This acknowledgment is important because embracing this position provides a platform for creating social policy that effectively distributes knowledge as what it is: a capital input.

The United States has gone from an agrarian economy to an industrial economy to a services economy. The labels imply that for some type of output, crops, that there are rules for the extraction, packaging, and distribution of capital necessary for producing an end product, food, and for packaging and distributing to its final destination, the end-user. Once it is consumed, it is either gone immediately or depreciating to zero value over some period of time. There is some range of exclusivity involved in its consumption. We cannot say that for knowledge.

Knowledge results from a combination of information and experience. It is about “knowing how” to do something. It is an awareness of a process behind creating some result. While the “know how” could be protected by the laws of intellectual property, acquiring information, “the noise” and human experience garnered from deciphering through the noise to find a valuable nugget of information, cannot be constrained. The rules of economy are designed to bring society closer to some certainty over how resources will be extracted and distributed, but the open environment around knowledge makes strict rules useless.

Public policy can craft rules that make packaged knowledge exclusive to the creator and owner i.e, copyrights for artistic work or patents protecting applied scientific processes, but there are different paths to creating knowledge resulting sometimes in creating similar but not same packages. Knowledge protection is limited.

For this reason, knowledge can be built upon, expand. There is really no final consumption. Knowledge is reused, modified, improved over time. Rules of economics are not as applicable as they were in agrarian or industrial society.

Knowledge is more input than it is final product. This is why, to me, the term “knowledge economy” is weak. Knowledge has been an input during each of America’s economic phases. America’s increased reliance on information and communications technology over the past fifty years doesn’t mean that “knowledge” gets to claim its own economy.

Markets can be made for knowledge. A consultant takes her insights, advice, and publications into the knowledge market where she hopes she receives an offer that compensates her for the time spent creating the knowledge product and/or presenting the knowledge product.

As for the consumer of the knowledge product, he is taking a gamble that any action plan, output or final product generated by the knowledge creates positive value or profit. The more information the consultant and the purchaser have on the forecasted value of returns on the knowledge, the more accurate the market price for the knowledge.

If anything, we may be in a “learning economy” where consumers are also becoming producers either of their own content or more durable products. The knowledge industry is one of its platforms where knowledge as input is bought and sold.

Black Americans should think like sovereigns

Since their emancipation from physical slavery in 1865, black descendants of slaves brought to what is now known as the United States have fought for full incorporation as citizens. For blacks, incorporation meant the right to own property, vote, move freely across provincial borders, and be free from racial violence whether perpetrated by individuals or the State.

The primary reason for the incomplete incorporation process was the view of the European that blacks, based on their race, did not have equal value as humans, a view that one group must have in order to justify enslavement. Another reason closely related to race is based on the process of becoming a nation-state, a process that caught blacks in the crossfire.

By the time blacks were physically emancipated from slavery, the United States was becoming a nation-state. Having abandoned the British monarchy 89 years earlier, by 1865 America was expanding westward riding the wave of white, Anglo-Saxon manifest destiny.  During the period after 1865, the United States continued its campaign of pacifying indigenous tribes while importing and regulating the movement of Chinese. And while there was internal conflict between other European ethnic groups and Anglo-Saxons, these groups were able to be incorporated much easier than indigenous tribes, the Chinese, or former slaves of African descent.

The Chinese and other Asian groups have managed to balance maintaining their culture while incorporating to some degree into the American political economy.  While state and federally recognized indigenous tribes have limited sovereignty and ownership or use of certain lands, these groups see internal and external threats to their culture including poverty, alcoholism, encroachment on tribal lands by certain corporations, and subjugation to blood quantum tests.

The common thread, in my opinion, between Asians and indigenous tribes is that they have some land to fall back on; some physical reference point that anchors their history and existence. Blacks in the United States do not have that advantage. Besides historical records of slavery and the use of DNA testing, blacks have little connection to the African continent. America is their “soil”, their roots and some would argue that their status as descendants of involuntary migrants and slaves means a perspective significantly different from people who came to the U.S. voluntarily.

The downside of the “involuntary migrants and slave status” argument is that it falls on the deaf ears of those for whom the United States was created. If such an argument was effective, incorporation of blacks into American society would have occurred a century ago. Moral or emotion-driven arguments do not result in acquiring and distributing sufficient resources necessary for individuals in a community to sustain themselves. The current approach asks that a white-dominated government distribute temporary, sub-par benefits that act as a replacement for capital.

Sub-par public educational services do not teach children critical thinking skills that go along with the life skills provided by their households. Sub-par medical services while subsidizing drug prices thus the revenues of the drug industry do not provide the wellness information that keeps individuals truly healthy. Sub-par public safety that subsidizes police terrorism not community security does not benefit blacks either. The American political system feigns a sub-par community approach when in reality it is a temporary bandage designed to keep the barbarians from knocking down the gate.

The American political economy has been telling black Americans to “go your own way” for some time now. Maybe it is time to listen.

 

The President’s 5G public works project

It is election year and President Trump is signaling that he is well aware that priming the economic pump to quench America’s thirst for growth in the economy may buy him some political capital while helping his fellow Republicans in the Congress and maybe a few Republican governors and state house members retain their seats. Today’s latest political proposal: construction of a nation-wide 5G communications network by the federal government.

Reuters reported earlier today that among the Trump administration’s initiatives to address potential Chinese hacks of America’s communications systems is the construction of a 5G network by the U.S. government. According to the report, the idea is still being considered among lower ranking staff within the Administration and proposals may not get to the President for another six to eight months.

Federal Communications Commission chairman Ajit Pai was quick to respond this morning to the 5G proposal. Mr Pai argued in his brief statement that construction of this latest generation of high-speed communications network was best left to the market. Rather than going down a costly and eventually unproductive path, the chairman recommended that federal policy stay the course and focus on getting more spectrum, that portion of electromagnetic waves necessary for making calls and moving mobile data, into the commercial space.

Again, Mr Pai demonstrated that he is one Republican that attempts to be practical.

Progressives haven’t come out one way or the other …. yet. Progressives have thrown support in the past behind the idea that initiatives on the part of municipalities to build their own broadband networks, premised on the need for access to affordable broadband in the face of a lack of supply by large carriers such as AT&T and Comcast. On first blush, Mr Trump’s idea seems to be nothing but municipal broadband on steroids, just on a national level.

I doubt, however, that advocacy groups like Public Knowledge or Free Press are going to jump on the opportunity to provide Mr Trump with any favorable optics on this issue. The last thing progressives want to risk is giving the Administration any type of lifeline that would help pull Mr Trump’s popularity into the respectable zone.

Mr Trump could have used the opportunity to make a political play based on economic stimulus a nation-wide project like this could provide. He could have sold it like his version of the Hoover dam, especially in rural or mountainous areas where broadband companies have dared not tread because of sparser populations and rough topography. The Deplorables in flyover states and the Forgotten that inhabit the insular territories of the Caribbean and the Pacific would have warmed up to Mr Trump’s goody bag of 5G services by 2021,especially if the idea is sold as another job creator.

Mr Trump will have to sell broadband access providers on the idea of falling on their swords and taking one in the national interest. According to NCTA, broadband providers have invested $1.4 trillion in constructing and deployong broadband networks. The cable industry alone claims to have made a $275 billion investment in broadband infrastructure.  They are not about to tell investors that future returns on this investment are about to be pushed aside by a public works communications project designed to keep China from eavesdropping on two ex-college room mates talking recipes for peach cobbler and the latest #MeToo campaign.

The average American’s opinion on #immigration doesn’t matter

I just finished reading an article in The New York Times concerning the minority view toward illegal immigration in the United States. The article describes the overall opposing attitude held by 10% to 25% of the American population toward foreign nationals who enter the United States without proper documentation. Included in this group of opponents are immigrants who entered the United States in full compliance with American law.

For most Americans today pushing back against illegal immigration, the argument, in my opinion, comes from a fear of cultural dilution. Liberal elites, in their advocacy for the continuance of the Deferred Action in Childhood Arrivals (DACA) are standing up for the immigrants that look more like Sofia Vergara. Those pushing back against DACA are fearful that America will be overrun, for example, by the darker skinned Garifuna or K’iche; by the immigrants that they see working blue collar labor jobs and living on Buford Highway in Dekalb County Georgia.

Most of America’s immigration history has been less about cultural integrity and more about economic necessity. America could not actualize its manifest destiny, its push to the Pacific and beyond without human capital. European monarchs issued charters to barons, lords, dukes, soldiers, explorers, and stock companies to explore North America and take possession of land by any means necessary.

Labor, whether slave, indentured, or voluntary, was brought to the Americas for the purpose of extracting resources and organizing those resources into product for sale and export. The goal was to generate returns from the land with proceeds going to the monarchs and later the nation-states in the form of taxes and to the the private parties lending to the government, in the form of bond coupon payments. Immigration is, for the most part, about contributing to the returns on America’s capital.

A public ignorant to how the American economy works should be silent on immigration policy.   Rather, the American public, especially those who occupy the middle strata, should occupy themselves with questions of relevancy in an emerging political economy prepared to replace workers with artificial intelligence, machine learning, and robotics.  The immigration issue is just a distraction for the American middle class.

Over the next two to three decades, unless one is employed in a knowledge-intensive occupation or can add value to an automated process from a design or engineering perspective, the question won’t be whether an immigrant who doesn’t look like me now lives in “my country.” The issue will be, can I really function in a society where my skill set is so useless that I have no option but to be a ward of the state?

Capital, technology, social media, & fake connection

Capital uses technology to create a singularity in the individual. This process toward “self-actualization” is the wrong one because the journey to self has nothing to do with technology or capital.
 
The downside of using technology to create a singularity is that as part of validating its use, technology markets itself to the masses as a way of creating a collective consciousness, a fake singularity.
 
I call it fake because trying to create a oneness with multiple, diverse, un-self actualized minds is dangerous and only leads to narcissism on steroids. It is the mistake that liberals, for example, have been making for the last 130 years of political history in the United States. One need only look at social media and see the effects.
 
Meanwhile, the masses, believing they are creating some good through collective behavior are merely being used by the few that herd them up into single-minded, over-emotional mania.
 
Eventually this fake singularity collapses on itself with violent repercussions as all shifts in mass political behavior eventually does as this fake singularity is exposed for what it truly is; a distraction.
 
What are the masses being distracted from? The fact that progressives have learned how to hoard and leverage inside information, move to urban centers, monetize this inside information, and raise rents on the poor, forcing the poor to move to lower quality areas.
 
Meanwhile, rich, liberal urbanites become more “singular” meaning less diverse as they show their true value system, one that was never built on diversity, but where a diversity narrative was merely used as a Trojan Horse that allowed them to infiltrate minority communities and run out people that neither look, act, or think like them.
 
Atlanta, Manhattan, San Francisco. We see it, but cognitive dissonance allows us to ignore it. The fake singularity has no room for an organic collective.

A person living in the internet shouldn’t have to pay taxes

Nyota Uhura is on a quest to digitize herself. She creates digital product on her laptop, transmits her finished product to her clients via the internet, and gets paid primarily in cryptocurrency. Every now and then she accepts fiat currency issued by a nation-state in part because as a mini-sovereign she likes to have a reserve currency for emergency use or in case a hole-in-the-wall restaurant on a south Florida beach doesn’t accept BitCoin.

She probably spends too much time socializing in cyberspace. Facebook and Instagram keep her in touch with her brothers and sisters in Congo or her cousins in Brooklyn. As a busy creative she sends out for food via Uber Eats and uses Uber or Lyft to get around.

She is not naive about the public safety protection that Atlanta markets to its residents. She has a home security service that she communicates with via broadband. She uses her laptop as a surveillance camera courtesy of her broadband access provider. She keeps a shotgun and feels confident in her self-defense skills. If she were a pilot, she would avoid Atlanta’s biggest amenity, Hartsfield-Jackson International Airport and opt for the smaller Charlie Brown airfield.

Why then, she asks, should she even pay taxes?

Her friends rebuttal is that she should contribute to the public services that she uses to get around; that she should pay for use of the streets and use of the police protection. On a national level, she should support Medicare and the national defense, and social security because these programs help provide security for her future.

And she should be ashamed of herself for not showing the ultimate allegiance to her government by avoiding the use of America’s fiat currency. Her failure to use it, they argue, only negatively impacts the nation’s economy by devaluing the dollar through shrunken demand.

Nyota expected the canned rebuttal from her friends and family. She responds, however, with a rebuttal they are not prepared for, one based on value. Being coerced by a false sense of duty and obligation to pay for sub-par protection services makes no sense to her. She hasn’t bought in on the police’s public relations campaign that they are there to protect the public and would like her taxes reduced by whatever the city assesses as her contribution. She has no enemies in Russia, North Korea, Syria, Afghanistan, Iraq, or Iran other than the enemies created by U.S. policy. Since she didn’t create these enemies, she would also like her taxes reduced by the amount of her contribution to these services.

Nyota pays a sales tax when she eats a cheat meal at McDonald’s. She also contributes to the transportation tax when she pays her Uber driver for a lift to the grocery store. She literally works in another jurisdiction, cyberspace, and because of this, Nyota believes she should not have to pay a federal income tax, especially to a government that provides low value protection services.

A strong legal and political argument will have to be crafted and promoted to bring about these changes, but at least Nyota is thinking about exit.

The Federal Reserve Bank of Atlanta’s outlook on #fintech in 2018

What will be the challenges for the fintech environment in 2018? Douglas King with he Federal Reserve Bank of Atlanta wrote a piece back on 4 December 2017 laying out potential questions that the Federal Reserve may address. They include:

  • Will it continue to be up to financial institutions  to do due diligence on fintech companies, much as they do for third-party service providers?
  • Will regulatory agencies offer financial institutions additional guidance or due diligence frameworks for fintechs over and above what they do for third-party service providers?
  • Will one of the regulatory agencies decide that the role of fintech companies in financial services companies is becoming so important that the companies should be subject to examinations like the financial companies get?

In addition, as we get closer to Jerome Powell taken the helm as the chairman of the Board of Governors of the Federal Reserve, what type of relationship should the fintech industry expect? Probably one of proactive collaboration, according to comments Mr Powell made back in September 2017. The Federal Reserve has as a policy goal a faster U.S. payments system that is also ubiquitous and safe, and a positive relationship with the private sector is key.