The individual should aim to make competition law inconsequential

This morning between games of racquetball, a conversation among the racquetball posse came up regarding parsing out trophies for non-winners. We expressed our concern that giving trophies to children that finish dead last may be creating a society of slackers; a community of individuals that see no rewards from winning.  In the 21st century, Millennials is the group that has been taking much heat for expressing a value of entitlement based on just showing up. “Your mommy got you to the soccer game. Yeah me!” “We’re giving you an award for good citizenship because you tell everyone good morning while your grades are shitty. Yeah, me!” “You got an award for fourth place because the other guys in your bracket forfeited. Yeah, me!” Where does this attitude come from and should Millennials take the brunt of the criticism?

To the latter part of the question, I would argue that Millennials should not bear any part of the criticism. They are only reacting to a world that older grumps created and playing by the rules the older generation promulgated for getting along in this society.  I see this as a world created by the State and those who control the majority of private capital.  The attitude of these monopolists is that there is only so much of the spoils to share and if society is to maintain any validity, then the masses must believe that their participation in traditions and institutions and compliance with the rules will result in some type of reward, even if that reward cannot be tied to winning the actual prize.

It goes back to the “Logan’s Run Paradox” where if you want to continue life past age 30, you have to grab the crystal ball before being disintegrated by multi-colored lasers. Your aspirations must be encouraged, delusions fed, and your eye distracted from the reality that there is, at least under this current paradigm, only so much spoils to share. For over a century now, America’s paradigm of competition has been built on this lie and it is increasingly reflected in our political economy.

Americans argue that a competitive market structure is good for the economy; good for growth in jobs; good for the spread of economic opportunity. The United States over the past 120 years has crafted a regulatory framework that favors multiple participants in an industry driven by the premise that multiple providers are good for consumer choice and where prices are regulated by the ability of multiple firms to participate, the better. Actions by firms designed to keep other firms out of a market, whether those actions involve predatory pricing, vertical or horizontal mergers, or agreements between firms i.e. collusion, are prohibited by anti-trust law.  American government tries to regulate and create competition but is government’s attempt organic or an ill-fated effort to replace real competition with an artificial construct? In other words, is the State simply trying to make all soccer moms and their kids happy?

What the State refers to as anti-trust law is simply trade regulation law; regulating otherwise voluntary agreements between individuals to combine as an association that extracts and organizes resources for the purpose and creating and distributing goods and services. The State exercises its monopoly over a jurisdiction by regulating trade thus hoping to ensure that currency flowing through its payment system and the activities that generate tax revenue are left unimpeded. “Protection of the consumer” is a narrative expressed to the masses in order to garner their support for legislation that is onerous to trade.

The individual doesn’t need these laws once he understands self-reliance. The individual producing their own electricity with today’s technology need not worry about a utility’s monopoly. She does need to worry about the State’s invalid argument for helping to maintain it.  The individual using 3-D printing- technology to design and create tools and clothing need not worry about price gouging unless a so- called consumer protection agency extends its jurisdiction by promulgating rules that prohibits said production. The individual that generates valuable information and data for sale and transmits the value of that data via her own cryptocurrency need not worry about fiat currency created and issued by a central bank, unless that central bank and her ally, the treasury, promulgate rules that challenges the issue of an individual’s currency.

The individual, recognizing how inorganic consumer law is, should pursue personal policy that makes that public policy inconsequential.

Politicians need to familiarize themselves with the new face of labor new technology has created

Too many politicians have been emphasizing employment in the area of technology and not paying enough attention to how technology has changed society and, in some ways, contributes to further divides in society. Nor are politicians demonstrating an understanding of the basic technological platform that underlies the economy and how this platform is evolving in order to produce at increasing efficiencies and higher returns on capital.

The Third Industrial Revolution described by thought drivers such as Jeremy Rifkin encompasses an integration of communications, energy, and transportation networks running on top of the internet of things. The internet of things is a digital world where it is projected in 12 years that 100 billion devices will be connected not just to the internet but to each other.  But this revolution is more than connectivity; it is about productivity and explaining the impact of greater productivity to the voter will be the tricky part for incumbent politicians and new entrants alike.

For example, the Trump Effect post the 2016 general election where markets responded positively to Mr Trump’s election was based on expected deployment of new transportation, energy, and communications infrastructure along with increased gross domestic output and incomes. The technology sector has been an overall darling of the market and politicians have been quick to tout the low hanging fruit of innovative new technology as a potential driver of economic growth.  And the numbers seem to support technology’s prominence.

American Entrepreneurship reported last March that since 2010, employment in the technology sector has expanded by 200,000 jobs annually. Approximately 11.5 million workers are employed by the tech sector, contributing $1.6 trillion to United States gross domestic product. Demand for tech workers is outstripping supply.

But even as demand for technology workers remains strong, the manufacturing sector, the one Mr Trump touts a lot on the continuous campaign stump, is seeing less hiring and ironically increased productivity. Pew Research reports that real employment in manufacturing fell from approximately 17.5 million in 1987 to 12.4 million in 2017, a decrease of 29%. During the same period, the real productivity index for manufacturing increased 81%.

Should politicians spend time providing workers a more balanced picture of the economy by educating workers on the need to pursue skillsets necessary for higher paying tech jobs? Yes, especially if they want to distinguish themselves as more trustworthy and knowledgeable about the economy than their opponent.

Properly educating the American worker (and hopefully garnering more votes as a consequence) will require politicians to explain the “productivity paradox.” In an article posted on Vox.com, Timothy B. Lee explains why the increase in innovation is apparently accompanied by a decrease in productivity. As technology innovates rapidly, progress is made in producing cheaper versions of items that have existed for decades. These items become more abundant with the savings eventually spent on more personal services items, items that are produced in slower growth industries.  Ironically, wages in these personal services areas, such as health care, child care, education, consulting, etc., trend upwards. A smaller number of producers will provide the nation’s material goods while slow growth industries take up a larger share of the national economy.

So, although productivity in manufacturing is increasing, the former factory worker will have to start looking for jobs in the slower growth areas of health, education, child care, and other personal services.  Had Republicans been frank during the 2016 campaign about the changes new technology is creating in the labor market, they would have been able to better neutralize criticisms from the left that current policies from the Trump administration are hurting the very people who voted for him. It is probably too late to make corrections to the lack of messaging on technology to avoid losses in the upcoming midterms but adjusting the narrative right after the midterm elections would be wise.

When local government meets high tech sovereigns

Sometimes I think city government is sleeping at the wheel when it comes to technology and capital flows. During its lucid moments, government will fall back on its 1960s playbook of economic development by announcing plans to bring back manufacturing jobs that pay better wages than the service sector jobs that replaced factory work and eviscerated wages. This narrative may have worked in a locality that was created to take advantage of proximity to a local natural resource where factories could then convert the resources into goods for local and other markets, but for a city like a 21st century Atlanta, that narrative is disingenuous.

Atlanta’s “natural resource” today is information. Workers who know how to find, extract, organize, and distribute information are going to be the one’s who obtain employment and the higher wages that come along with work in the information sector. This demand for an information-centric political economy, I believe, is being driven by the changing tastes of capital. Capital wants its goods and services delivered conveniently and its production customized.

Information technology allows capital to target funds directly to high-value driven information entrepreneurs that can deliver a product that was designed, manufactured, packaged in, and delivered from multiple jurisdictions. Capital has no love for mass appeal. Why deal with crowded banks, malls, car dealerships, or grocery stores when extra minutes of leisure can be carved out by the manufacturing and service delivery efficiencies provided by Tesla, Uber, Grubhub, and Insta-cart.

Along with these efficiencies in product manufacturing and delivery come smaller work forces or work forces outside of the jurisdiction of local governments. Local governments have been the front line defense of investor capital from disgruntled labor. They regulate labor union speech during strikes. Where there is violence they arrest the rowdy. However, in an information age where there are a greater number of tech shops employing smaller numbers of non-unionized information workers versus a handful of large factories employing thousands of unionized lower-skilled workers, there is less demand for the police powers of local government. Disgruntled employees at today’s tech shops simply take their information knowledge somewhere else or create their own firm.

Eventually government starts tossing and turning in its sleep. It sees its “labor clamp down” requests severely diminished. Higher incomes start translating into reduced need for government services from garbage removal to security. Higher income earning citizens may consider pooling resources to support campaigns of candidates who agree to reducing tax burdens are, too the extreme, support carving out or “leasing sovereignty” to higher income communities.

Question is, how will those with no capital react to the erection of this wall of individual sovereignty?

When local government meets high tech sovereigns

Sometimes I think city government is sleeping at the wheel when it comes to technology and capital flows. During its lucid moments, government will fall back on its 1960s playbook of economic development by announcing plans to bring back manufacturing jobs that pay better wages than the service sector jobs that replaced factory work and eviscerated wages. This narrative may have worked in a locality that was created to take advantage of proximity to a local natural resource where factories could then convert the resources into goods for local and other markets, but for a city like a 21st century Atlanta, that narrative is disingenuous.

Atlanta’s “natural resource” today is information. Workers who know how to find, extract, organize, and distribute information are going to be the one’s who obtain employment and the higher wages that come along with work in the information sector. This demand for an information-centric political economy, I believe, is being driven by the changing tastes of capital. Capital wants its goods and services delivered conveniently and its production customized.

Information technology allows capital to target funds directly to high-value driven information entrepreneurs that can deliver a product that was designed, manufactured, packaged in, and delivered from multiple jurisdictions. Capital has no love for mass appeal. Why deal with crowded banks, malls, car dealerships, or grocery stores when extra minutes of leisure can be carved out by the manufacturing and service delivery efficiencies provided by Tesla, Uber, Grubhub, and Insta-cart.

Along with these efficiencies in product manufacturing and delivery come smaller work forces or work forces outside of the jurisdiction of local governments. Local governments have been the front line defense of investor capital from disgruntled labor. They regulate labor union speech during strikes. Where there is violence they arrest the rowdy. However, in an information age where there are a greater number of tech shops employing smaller numbers of non-unionized information workers versus a handful of large factories employing thousands of unionized lower-skilled workers, there is less demand for the police powers of local government. Disgruntled employees at today’s tech shops simply take their information knowledge somewhere else or create their own firm.

Eventually government starts tossing and turning in its sleep. It sees its “labor clamp down” requests severely diminished. Higher incomes start translating into reduced need for government services from garbage removal to security. Higher income earning citizens may consider pooling resources to support campaigns of candidates who agree to reducing tax burdens are, too the extreme, support carving out or “leasing sovereignty” to higher income communities.

Question is, how will those with no capital react to the erection of this wall of individual sovereignty?

Black America’s wrong approach to STEM

Black America needs more engineers but not for the reasons we typically hear on the panel discussion stump. On the panel discussion stump, you typically find well dressed and articulate black men and women speaking on the importance of going to college and picking up degrees in science, technology, engineering, or math in order to get a job with a corporation and make six-figures. Going into six-figure debt to get a six-figure job. Where did this school of thought come from?

Black America’s approach to learning about technology favors consumption of the applications that run over broadband networks. That is what I see particularly among poor blacks here in the West End and the Old Fourth Ward. We are using broadband voice applications to share the latest gossip or evangelizing on life. We are keeping occupied reading news items, watching sports highlights, or playing video games as we pass time on MARTA heading to work. Just about everyone has a cellphone and if you don’t, worry not. If you meet income eligibility requirements, you can buy one from a vendor at the corner of York Avenue and Lee Highway.

This propensity to consume technology is not relegated to the Black American poor. According to a 2016 report released by Nielsen,  Black Millennials are expected to help drive the leveraging of $1.2 billion in Black American buying power. With a cellphone ownership penetration rate of 91%, Nielsen sees Black Americans continuing to use the technology to extend black cultural identity and, with Millennials leading the way, continue efforts at civic or institutional change in America. Black America is also expected to buy more beauty and hair care products versus their white counterparts.

Millennials are expected to take their higher incomes into supermarkets as well. Black Americans demonstrate a propensity for cooking from scratch, planning meals ahead, and using fresh ingredients.

In short, the Nielsen report paints a picture of a Black America that furthers consumer centrism. Since release from their status as chattel slaves, blacks in America have slowly become a population over-indexed on consumption. And to further fuel its $1.2 billion in buying power, Black America has embarked on a campaign to get more of its young people into STEM jobs.

STEM employment pays well, according to a report written by the U.S. Department of Education. The average STEM employee pulls in approximately $65,000 a year. Those specializing in engineering or engineering technology average $73,700 a year. Great incomes for hair and makeup and cultural expression. But what is more important, in my view, is STEM driven creation of resources placed in black communities for blacks.

We don’t hear enough about the entrepreneurial side of STEM although we have examples out there. Firms such as Logistics Systems Incorporated and ATS-Chester Engineers have been providing engineering services for decades. They are demonstrating that blacks can do more than consume technology but design technology solutions as well. Production and ownership of technology assets lie at the heart of wealth creation for blacks and if properly deployed can be the basis for the creation of real black communities in the United States.

Unfortunately for current black communities, their leadership is tainted. Legacy black civil rights organizations that have a leadership class still living in 1968 are still focusing on how best to break into corporate America, or in the case of establishing minority-owned firms, maintaining affirmative action programs that provide set asides from government contracts. To paraphrase Yuval Noah Harari, they do not even have realistic ideas of what the job market looks like in two decades because they cannot see. Black leadership is still nostalgic about the civil rights battles of the 1960s when the focus should be on the resource and capital battles of the 21st century.

One example of a leadership not understanding STEM’s practical use is the lack of solar in the West End. I have yet to see a community solar farm. I see more historic district designations on houses than I see solar panels or wind turbines. Finding low cost energy solutions by pooling more STEM talent into black owned firms is a start. Current legacy black-owned engineering firms should consider investing in new black-owned start-ups that are committed to serving distressed communities. No community should be without its own locally owned energy source and this is one approach toward developing one.

Black America’s one-prong approach to STEM needs an upgrade and new leadership.

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.

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.

Trump uses broadband to shore up and keep his rural base

During a speech in Nashville, Tennessee, President Donald Trump announced that he had signed an executive order designed to increase broadband access to 23 million underserved residents of rural America. The initiative involves recommitting to prior attempts to use federal facilities as sites for commercial wireless broadband facilities. Streamlining siting policy for broadband infrastructure by using federal property is seen as a way to “reduce barriers to capital investment, remove obstacles to broadband services, and more efficiently employ government resources.”

Mr Trump’s announcement was made at the American Farm Bureau Federation’s annual convention just prior to the President heading further south to attend the national football championship game in the undisputed capital of the south, Atlanta. The southern flavor of the event is further flavored by the two southern teams that are playing, the University of Georgia and the University of Alabama. In my view, the convention, announcement, and attendance at the game is a great kickoff for the 2018 midterms, where getting out Mr Trump’s base will be crucial not only for the elections this November, but for the 2020 elections as well.

This may be the first of many salvos during the 2018 campaign. The connectivity and inclusion of rural America has also been the concern of Ajit Pai, chairman of the Federal Communications Commission.  Mr Pai is from the Midwest and has placed closing the digital divide high on his priority list arguably being a close second in priority to overturning the Commission’s net neutrality rules, which were repealed last month. He fervently believes that high-speed broadband access to the internet can level the economic playing field for rural residents.

The connectivity issue goes beyond technology and economics. According to an article in The Washington Post, rural Americans feel deeply estranged from their fellow Americans that live in urban areas.  Almost seven out of ten Americans living in rural areas find their values out of sync with the values of big city dwellers. The federal government is perceived by rural America as favoring urban dwellers over them.

And it doesn’t appear that rural Americans want to connect with urban Americans, broadband connectivity or not. They appear satisfied by their own social fabric, comfortable in their culture, one that sees each of them looking out for the other.

Broadband connectivity may improve their ability to move goods to markets, but it may also further enhance internal rural bonds. And given Mr Trumps penchant for social media, especially Twitter, rural America will be able to maintain a connection with the only urban dweller that matters to them.

When Bitcoin becomes a transmitter of valuable information

Bitcoin is not for speculation. Bitcoin is about the transmission and exchange of valuable information attached to a digital currency that measures the value of the information. The volatility we are seeing in the market for Bitcoin is based on the fear of missing out on a pop in value.

I think in the near future what will eventually drive the value of Bitcoin is the underlying value of the information that the individual sovereign either possesses or can produce. It is likely that person A holding Bitcoin may look at person B who allegedly has some information, x, and determine that the person B’s information or ability to generate useful information has no value. Think of someone in London approached by someone from Somalia who wishes to trade in Somalian currency. The Londoner wouldn’t touch it.

You may argue that scenario already occurs in the real world, that trader A is not required to transact with trader B. In a centralized world, trader B would bring a discrimination grievance against trader A for refusing to trade. In a decentralized, voluntaryist cyber world, no matter how much cryptocurrency you hold, the value of your true currency, the information that you possess or can produce, will determine your digital currency’s value.

As for the speculators, the error they make is using valuation methods created in a centralized, coercive political economy to assess the value of a currency designed for a decentralized cyber society. A speculators are enjoying the upside of Bitcoin’s market appreciation, but as the currency becomes more expensive and reaches its 21 million digital currency cap, will these speculators be able to purchase any more of the currency? Or, will they be able to ride out the inflationary characteristic the coin takes on should it become a matter of two few Bitcoin chasing too many goods? Will lower income individuals who may have made their first purchases with their credit cards be able to recover the dollar value of the coin in order to pay off increasing interest rates?

Not to mention the competing currencies that will eventually knock off Bitcoin from its perch. As technology improves such that “information rich” individuals create their own cryptocurrency, individual sovereignty will be complete. Just like western nations trade with each other based primarily on similar values and culture, the information rich will do the same. As the value of their currency increases so to will the demand from vendors who will likely prefer hold in reserve the currency of the information rich versus the “information poor.”

I believe that the information poor or “information losers” who were lucky to get a few pieces of a coin in the early days will not be able to participate on either side of a cyber trade in the future. Their focus should be on building their information gathering tools versus pursuing a quick fix, get rich path.

Cyber space will remain decentralized by the silos created by the information rich will prove daunting for the information poor.

Senator Markey conflates net neutrality and artificial intelligence

The U.S. Senate’s commerce committee held a hearing on how artificial intelligence and machine learning could impact economic growth and American consumers. The panel did their best to assure the committee that Kristanna Loken would not be busting through walls terminating humans on her way to activating Skynet.

Senator Brian Schatz, Democrat of Hawaii, made the audience aware that he was sponsoring a bill that would create a commission that would ask the tough questions about AI (excluding Texas senator Ted Cruz‘s reference to the aforementioned Skynet.)

The committee’s walk through geek and nerd park was pretty much uneventful. From a regulatory perspective, the panelists did not seem gung-ho about the introduction of burdensome regulations at this stage of AI’s development. While the concept of AI has been around since the mid 1950s, the advent of machine learning has raised the level of awareness and in some cases concern about AI. Instead of new rules, it was suggested that current rules we adjusted to address concerns about AI. Also, government could afford to do some learning on its own, gathering the expertise necessary for how best to integrate AI into society.

Also, the panel seemed to downplay concerns about AI displacing workers. It was argued that the technology would create other jobs directly needed by the technology sector, and work spawned by the demand the newly employed in the technology industry would create.

One panelist also tried to mitigate the “Skynet” concern by informing the committee about where actual AI work was being focused. AI is not concerned at this time with creating a general intelligence, that super, global brain depicted in movies. Rather, AI currently has a narrow focus on developing something more akin to an alien intelligence, creating a need for humans to communicate with AI-based technology on another level.

Unfortunately for my eardrums I had to suffer through Senator Ed Markey’s near enthusiastic willingness to conflate net neutrality and artificial intelligence. The Massachusetts Democrat asked one of the panelist, Dr Edward Felten, whether the expected vote by the Republican membership of the Federal Communications Commission to repeal net neutrality rules would negatively impact the development of artificial intelligence. To summarize Dr Felten’s answer: No, repeal of the rules would not.

How Markey or any of his net neutrality posse could confuse equal and transparent exchange of data between networks with the ability of computers to perform tasks usually performed by humans is a leap. Besides, given the billions of dollars invested in AI, would you really want any data generated by machines using artificial intelligence to have its traffic exchanged at an equal or lower priority than a cat video that took two hours and a couple hundred dollars to make?