Worldbuilding Realism Consultation Thread Mk. 4

[Allanea]

I just finished Plunkitt of Tammany Hall: A Series of Very Plain Talks on Very Practical Politics, and I really suggest everyone here should read it, especially if they RP a country with democratic politics of any kind.

[Austrasien]

Continued from milrealism thread.

Societal collapse is inevitable it probably can't be avoided. TFR is only part of it. The biggest part is the general collapse of the middle class and the tax revenue they bring, which sort of domino effects the welfare state that is pretty much institutional to Western democracy. That's a fundamental aspect of the information economy.

Most people are simply not cut out to be wealth producers in a knowledge economy. An industrial economy tends to have an exponential growth rate that disappears when it transitions to a knowledge economy, probably because of innate distribution in human IQ that can't be easily fixed.

There is no knowledge economy. Hence, the post-industrial economy does not grow.

The purpose of economic activity is the production of things we need. The main source of wealth is the production of things. Those who produce things become wealthier. The definition of wealth is in fact the possession of many things (incidentally most of today's rich have little more than Schrödingers fortunes for this reason, existing almost entirely on paper and in computers, were they try to actually bring even part of their assets out of financial superposition and into reality the resulting inflation would wipe our most of their fortunes). When you cease to produce things rent seeking (regulated professional services: Doctors, teachers, lawyers etc), money manipulation and inherently non-productive occupations (services) are all that remains.

The idea that production could be separated from "design" or something like that was always nonsense because the people producing things eventually realize they don't actually need someone else to tell them how to do that thing they do. Knowledge is actually without value if it cannot be brought out of the clouds and into reality; the site of all value creation is when raw materials are transformed into useful products.

Fortunately we never globalized farms!

[Questers]

I am with Kyiv on this one. The "knowledge" economy is actually just a supporting arm of the industrial economy - to the extent that our societies are knowledge economies, we are exporting the knowledge to countries which use it for industrial production, in order to enhance that production.

[The Soodean Imperium]

The only thing I'd add is that the opposite is also true - an industrial economy without a knowledge component will see its growth level off once surplus factors of production are nearing full capacity and investment in capital is hitting diminishing marginal returns. In the realm of international development this is sometimes referred to as the "middle-income trap" - a point where wages have climbed too high to win the race to the bottom, but there is no local innovation sector to lead the race to the top.

The "optimal" economy, to the extent that we can speak of one, would be built around a "triple helix" in which innovative R&D departments exist but they are directly partnered with productive enterprises in the presence of state support. South Korea and Taiwan are two good examples, China is potentially on its way there but will have to surmount some considerable obstacles first.

[Taihei Tengoku]

Import substitution, the most effective development policy

"Knowledge economies" is just a high K:L ratio and the movement of an economy away from low-value manufacturing. The reason why China and Mexico makes the tchotchkes we used to back in the day is because their present productivity (ergo comparative advantage) is what the West was at several decades ago.

[The Soodean Imperium]

US industrial decline has only been going on for about two generations, hardly enough time for low intelligence to be "bred out" of the population.

Industrial economies rely on intelligence. It's useful even at much lower levels of development.
Technology development has been going on for at least 10 millennia, probably more - plenty of time to breed out low intelligence, if doing so was useful, in evolutionary terms. Clearly it's not.

Why not, you wonder?

Birth rates also tend to be negatively correlated with things like wealth, education, and having both partners employed in full-time, frequent-overtime white-collar jobs, both within and between societies.

That's why.

There is an optimum level of intelligence, and it's not the level that brings you the most vanity, it's the level that brings you what you need to breed successfully, but doesn't distract you and lure you into chasing dreams that have nothing to do with maximizing the number of your offsprings that get to reproduce further.

I'm not sure where and how you turned "IQ/educational attainment is necessary for career success in a knowledge economy" into "IQ/educational attainment is necessary to reproduce at replacement levels;" it's a non-sequitur into a straw man. Nobody is saying that IQ/educational attainment is necessary to breed successfully, and nobody is saying that the yardstick of individual economic success is one's tendency to bear children (which, again, is consistently negatively correlated with income, education, and full employment, both within and between countries.)

The fundamental argument being made is that if the population is sorted into high-pay-high-status jobs for those with high IQ/education and low-pay-low-status jobs for those who don't fall right enough on the bell curve, with declining domestic industrial employment, this risks bifurcating society into the haves and have-nots and reinforces existing patterns of inequality, which in turn create severe underlying problems in an economy. You're the only one to bring up this weird eugenics stuff.

(wage comparisons)

And what does wage have to do with anything?
There are only two types of income:
1) Sufficient for producing 2+ independent offspring
1) Insufficient for producing 2+ independent offspring
Everything else is just vanity.

And yet Niger, with its crippled and stagnant economy, has the highest fertility rate in the world, while South Korea, a shining star of economic development, has the lowest - tied with Macau, Hong Kong, and Portugal.

To the extent that the "cost of raising children" is relevant, it's determined by changing social standards and time constraints: the cost of raising a child being higher in a very competitive developed country where education, tutoring, and top medical care are necessary, and higher still when both parents are employed and frequently working overtime, compared to economies where simply getting enough bread for all one's children is an accomplishment.

Even then, there are an abundance of unexplained factors and contested explanations surrounding the demographic trend toward population decline in advanced economies, virtually none of them related to the natural selection of optimal breeding stock.

Unless you're going to ignore the above and write this up to the natural prolificacy of the African Race Civilization and the natural nonprolificacy of the Asian Race Civilization.

Import substitution, the most effective development policy

"Knowledge economies" is just a high K:L ratio and the movement of an economy away from low-value manufacturing. The reason why China and Mexico makes the tchotchkes we used to back in the day is because their present productivity (ergo comparative advantage) is what the West was at several decades ago.

What if I told you that K:L ratios are not an exogenously changing resource endowment but an endogenous quasi-parameter which both influences and results from a country's institutional structures

[Allanea]

Given how less and less people are employed - as a proportion of world population in 'making' physical things, I'd argue there's no non-knowledge economy.

Remember the US actually produces more 'things' domestically now than ever before. It's just less and less people are involved.

[Tule]

IQ is good at comparing relative intelligence between different people.

It's pretty crap at comparing absolute intelligence.

The actual difference in intelligence between different human beings is actually minimal and pretty insignificant as far as the economy is concerned. Virtually every member of the adult population is capable of using the same thought processes and the same types of reasoning. The moment the bottom ten percent or so of the IQ bell curve becomes unable to produce anything of value in an economy due to insufficient intelligence, the rest of the population has become very vulnerable, including the most intelligent.

[Scandinavian Nations]

I'm not sure where and how you turned "IQ/educational attainment is necessary for career success in a knowledge economy" into "IQ/educational attainment is necessary to reproduce at replacement levels;" it's a non-sequitur into a straw man. Nobody is saying that IQ/educational attainment is necessary to breed successfully, and nobody is saying that the yardstick of individual economic success is one's tendency to bear children (which, again, is consistently negatively correlated with income, education, and full employment, both within and between countries.)

Where did I say anything about career or economic success? I only talked about success without qualifiers. And succeeding without qualifiers, simply as a human, means producing offspring that get to reproduce, at higher than replacement levels (how much higher is optimal is situational). Our pursuit of wealth has started as a means to ensure that capability, but, when it goes anywhere beyond that, it becomes detrimental to biological success.

And that's what we see happening. The cultures that have gotten caught up in pursuing wealth and such - tools to success - to the extent of neglecting reproduction (success itself) are getting squeezed out by cultures that haven't. In other words, the problem is fixing itself.

[Taihei Tengoku]

Import substitution, the most effective development policy

"Knowledge economies" is just a high K:L ratio and the movement of an economy away from low-value manufacturing. The reason why China and Mexico makes the tchotchkes we used to back in the day is because their present productivity (ergo comparative advantage) is what the West was at several decades ago.

What if I told you that K:L ratios are not an exogenously changing resource endowment but an endogenous quasi-parameter which both influences and results from a country's institutional structures :eek: :eek: :eek:

True in the sense that one period affects another, not sure that the actual causal factor is the "country" or its "institutional structures"--stuff happens even in highly flawed institutional environments, even ones that are in many respects worse than their contemporaries

[The Macabees]

Human capital becomes less loosely related to physical capital when the latter moves down the non-specific spectrum.

Take the computer, for instance. The computer can be repurposed towards several different ends, but the ways it can be repurposed is limited by an economy's human capital, not its stock of physical capital.

[The Macabees]

Btw, the terms 'exogenous' and 'endogenous' are meaningless unless you have a specific model in mind. Variables are exogenous or endogenous to a model.

[The Soodean Imperium]

Remember the US actually produces more 'things' domestically now than ever before. It's just less and less people are involved.

And this runs the risk of creating social instability, if the number of new jobs in the knowledge sector is smaller than the number of industrial jobs removed, and the criteria for admission leave out a large sector of the population.

IQ is good at comparing relative intelligence between different people.

It's pretty crap at comparing absolute intelligence.

The actual difference in intelligence between different human beings is actually minimal and pretty insignificant as far as the economy is concerned. Virtually every member of the adult population is capable of using the same thought processes and the same types of reasoning. The moment the bottom ten percent or so of the IQ bell curve becomes unable to produce anything of value in an economy due to insufficient intelligence, the rest of the population has become very vulnerable, including the most intelligent.

All true, though this isn't necessarily critical if only certain skills or ways of thinking will get you a job at Google or Apple.

Personally I'd argue that the issue at stake is really more about educational attainment than IQ; even if we accept the (radical and controversial) proposition that a college degree does nothing to improve actual life skills and is only a piece of paper expressing arbitrary prestige and status, the lack of an undergraduate degree (if not higher) severely limits one's job opportunities, and when combined with unequal quality in public and private education can intensify existing patterns of inequality.

Where did I say anything about career or economic success?

You didn't. That's the point. You walked into a discussion about career access and the structure of labor markets with a non-sequitur about "biological success."

I only talked about success without qualifiers. And succeeding without qualifiers, simply as a human, means producing offspring that get to reproduce, at higher than replacement levels (how much higher is optimal is situational). Our pursuit of wealth has started as a means to ensure that capability, but, when it goes anywhere beyond that, it becomes detrimental to biological success.

And that's what we see happening. The cultures that have gotten caught up in pursuing wealth and such - tools to success - to the extent of neglecting reproduction (success itself) are getting squeezed out by cultures that haven't. In other words, the problem is fixing itself.

"Success" is not a biological criterion but a culturally defined metric, by which I mean a largely constructed set of goals that changes within societies in response to shifting internal and external conditions. If you define "success" as ability to birth new generations, then by definition countries with higher birth rates are more successful, but this is clearly a tautology and has nothing to do with the original argument about changes in the structure of the labor market.

There is a growing perception in Russia, Japan, and S.Korea that low birthrates threaten the sustainability of economic growth, mainly to the extent that they risk creating some ridiculous ratio of pensioners to workers by 2050. And this is a serious issue in its own right, because pension systems are ubiquitous among advanced economies and are very hard to pare back once in place.

But nobody is suggesting that "ability to birth new generations" is what we mean when we talk about economic success, much less that Niger, South Sudan, and the DRC (!!!) have discovered the optimal development strategy and should be classified as the most successful economies in the world. Access to reproductive education and birth control alone can explain a fairly large chunk of the developed-developing divergence, and if anything excessive birthrates slow development by spreading overall GDP increases over a larger per-capita base and creating a youth bubble larger than what the job market can soak up.

What if I told you that K:L ratios are not an exogenously changing resource endowment but an endogenous quasi-parameter which both influences and results from a country's institutional structures

True in the sense that one period affects another, not sure that the actual causal factor is the "country" or its "institutional structures"--stuff happens even in highly flawed institutional environments, even ones that are in many respects worse than their contemporaries

Most of the "success in flawed institutional environments" observations come from failure to accurately proxy for what institutional quality actually is. The AJR-North school of "institutions = property rights" is particularly in need of elaboration. If you define institutions more specifically as the formal and informal structures for mediating private-public and private-private interaction, as I would advocate, it becomes clear that confiscatory dictatorships and landlord-dominated plantation economies are equally dysfunctional, and that China in 1978 - despite severe attrition in state capacity and virtually nonexistent property rights - was actually on fairly solid institutional ground.

It's also important to define what "stuff happens," as a given GDP growth number doesn't necessarily show whether a country is breaking into new sectors or deepening its dependency on raw materials, but that risks getting into a fuzzier argument about what aspects of growth are normatively good.

To play devil's advocate, there is still a fairly large and respectable body of work claiming that geography is the ultimate determinant of economic potential, and the dependencia school sometimes frames institutions as tangential to the actual power dynamics between strong and weak powers. I don't dismiss these entirely - certain advantages like climate and mineral wealth are clearly important to raw material specialization, and before ~1500-1800 geography was possibly the largest influence on a country's economic trajectory, while both of these had "sticky" effects on institutions for centuries to follow - but ultimately I find the institutional school in its various factions and forms more persuasive at laying out the proximate conditions for explaining why some countries (and even individual provinces) have succeeded where others haven't.

[Allanea]

It's important to understand that property rights aren't simply a function of declaring 'hey people, you can own things now'.

Property rights, and especially property in land, are actually very complicated to institute. There is any number of nominally capitalist nations where the mechanisms that are meant to ensure property rights are either totally dysfunctional, non-existent entirely, or have no actual tie to the property people own in actuality. [That's to say, people own homes, land, etc. in practice that's legally registered to entirely different people for generations and there's little way to know who actually owns what].

[Kedri]

How would you organize a country that is divided between pirates and civilians? My goal is to make a modernized country from what was originally a pirate hideout, and with pirates and civilians both having a voice in government.

I decided it should be a confederation with two dominant parties to represent the interest of both groups. Should there be dual heads of state, or a president and prime minister?

[The Soodean Imperium]

It's important to understand that property rights aren't simply a function of declaring 'hey people, you can own things now'.

Property rights, and especially property in land, are actually very complicated to institute. There is any number of nominally capitalist nations where the mechanisms that are meant to ensure property rights are either totally dysfunctional, non-existent entirely, or have no actual tie to the property people own in actuality. [That's to say, people own homes, land, etc. in practice that's legally registered to entirely different people for generations and there's little way to know who actually owns what].

And on the other side, a close look at post-reform China reveals a situation where private businesses were nominally illegal until quite recently, but existed in practice under the guise of "Town and Village Enterprises" which central and local governments tolerated and even supported. Recent work has also documented the emergence of informal reputation-based networks that respond to weak intellectual property laws by sanctioning companies that steal their partners' patents.

Really though I lean toward the view that "strength of property rights" as an independent variable, especially in Acemoglu regressions, is unintentionally proxying for deeper problems like the power of plantation elites to seize land from small cultivators and the state's reliance on forced appropriation as an alternative to formal taxation.

[Taihei Tengoku]

True in the sense that one period affects another, not sure that the actual causal factor is the "country" or its "institutional structures"--stuff happens even in highly flawed institutional environments, even ones that are in many respects worse than their contemporaries

Most of the "success in flawed institutional environments" observations come from failure to accurately proxy for what institutional quality actually is. The AJR-North school of "institutions = property rights" is particularly in need of elaboration. If you define institutions more specifically as the formal and informal structures for mediating private-public and private-private interaction, as I would advocate, it becomes clear that confiscatory dictatorships and landlord-dominated plantation economies are equally dysfunctional, and that China in 1978 - despite severe attrition in state capacity and virtually nonexistent property rights - was actually on fairly solid institutional ground.

It's also important to define what "stuff happens," as a given GDP growth number doesn't necessarily show whether a country is breaking into new sectors or deepening its dependency on raw materials, but that risks getting into a fuzzier argument about what aspects of growth are normatively good.

If institutions are "formal and informal structures for mediating private-public and private-private interaction" you might as well say "all culture ever" instead. That human exchange works best when people interact well is completely true but completely useless in proving anything.

Remember the US actually produces more 'things' domestically now than ever before. It's just less and less people are involved.

And this runs the risk of creating social instability, if the number of new jobs in the knowledge sector is smaller than the number of industrial jobs removed, and the criteria for admission leave out a large sector of the population.

This is literally the Luddite argument against textile mills

[DnalweN acilbupeR]

I'm not sure where and how you turned "IQ/educational attainment is necessary for career success in a knowledge economy" into "IQ/educational attainment is necessary to reproduce at replacement levels;" it's a non-sequitur into a straw man. Nobody is saying that IQ/educational attainment is necessary to breed successfully, and nobody is saying that the yardstick of individual economic success is one's tendency to bear children (which, again, is consistently negatively correlated with income, education, and full employment, both within and between countries.)

Where did I say anything about career or economic success? I only talked about success without qualifiers. And succeeding without qualifiers, simply as a human, means producing offspring that get to reproduce, at higher than replacement levels (how much higher is optimal is situational). Our pursuit of wealth has started as a means to ensure that capability, but, when it goes anywhere beyond that, it becomes detrimental to biological success.

And that's what we see happening. The cultures that have gotten caught up in pursuing wealth and such - tools to success - to the extent of neglecting reproduction (success itself) are getting squeezed out by cultures that haven't. In other words, the problem is fixing itself.

I'm pretty sure those "up and coming cultures" will follow the same trend themselves when they get developed enough and so on.

[Allanea]

Our pursuit of wealth has started as a means to ensure that capability, but, when it goes anywhere beyond that, it becomes detrimental to biological success

So what? We are not our genes.

[The Soodean Imperium]

Most of the "success in flawed institutional environments" observations come from failure to accurately proxy for what institutional quality actually is. The AJR-North school of "institutions = property rights" is particularly in need of elaboration. If you define institutions more specifically as the formal and informal structures for mediating private-public and private-private interaction, as I would advocate, it becomes clear that confiscatory dictatorships and landlord-dominated plantation economies are equally dysfunctional, and that China in 1978 - despite severe attrition in state capacity and virtually nonexistent property rights - was actually on fairly solid institutional ground.

It's also important to define what "stuff happens," as a given GDP growth number doesn't necessarily show whether a country is breaking into new sectors or deepening its dependency on raw materials, but that risks getting into a fuzzier argument about what aspects of growth are normatively good.

If institutions are "formal and informal structures for mediating private-public and private-private interaction" you might as well say "all culture ever" instead. That human exchange works best when people interact well is completely true but completely useless in proving anything.

Quite to the contrary. In recent years there has been a wealth of comparative articles assessing finding strong correlations between more detailed measures of institutional quality and various measures of economic performance, both at the national and sub-national levels. And there have been additional qualitative case studies looking within individual countries at how institutional change has contributed (or failed to contribute) to economic growth. All of these have cut deep dents into the older paradigms that called on countries to embrace pre-existing comparative advantages, or that attributed economic failure to cultural inferiority.

This can have important policy implications as well; the Chinese case in particular suggests that Post-Soviet shock therapy versus narrow, piecemeal reform is a false dichotomy because both approaches run up against institutional complementarities.

And this runs the risk of creating social instability, if the number of new jobs in the knowledge sector is smaller than the number of industrial jobs removed, and the criteria for admission leave out a large sector of the population.

This is literally the Luddite argument against textile mills

No, it's not, unless your full understanding of the industrial revolution comes from reading the first paragraph of a Wikipedia page.

The problem in the early 19th century was in some respects the opposite of what we're seeing today: the advent of technology was replacing a small, exclusive sector of independent specialized artisans with an unskilled mass workforce in which everybody could be a worker (even children!) and part-time flexible labor was replaced by guaranteed 14-hour workdays. This was also the core complaint of contemporary social commentators like Smith, Marx, Weber, and Durkheim: society's many unique and specialized sectors were being dissolved into a homogeneous proletarian workforce that required no intelligence of its own but could only follow orders and repeat the same repetitive task for hours on end. And there was a vast and growing demand for this workforce, which was sucking in peasants from their idyllic village communities and rolling them through the homogenizing gears of the industrial city. Independent producers were being proletarianized, mechanical solidarity was giving way to organic solidarity, and the laborer hammering pin-heads for hours and hours into the night was becoming more machine than man.

In the end of course, Marx's predictions of ever-intensifying contradictions proved to be extrapolation; workdays fell to 12 and then to 8 hours, wages increased, specialist occupations reappeared, and inequality declined. Capitalism got a second breath of life in the Fordist era, and before long blue-collar labor was itself a source of pride and stability. And the modern city, for all its social ills, turned out to be a lot less homogeneous and alienating than its early critics feared.

The current situation is different because, ironically, the descendants of the same industrial workers lack the qualifications to get into the emerging knowledge economy, which probably lacks the capacity to absorb them all even if they did. This was never a problem in the early Industrial Revolution, where if anything factory owners were chomping at the bit to bring in more laborers and squeeze more hours out of them, and virtually anyone could become a miner or loom operator if they wanted to (indeed, many were left with no other choice). But in a knowledge economy, ex-blue-collar workers seem doomed to the unskilled service-and-retail sector, which in the US at least pays below the poverty line, favors part-time offers and precarious ones at that, and is itself being automated to save wage costs.

I do agree that extending this to "90% of people are unemployed by 2050" is as much an extrapolation as Marx predicting the end of Capitalism before the end of the 19th century, and it's possible that in the long term some as-yet-unforeseen change will absorb surplus labor and reduce income inequality. But for the intermediate term post-industrial discontent is a serious problem for advanced economies, especially when those workers go to the ballot box demanding change.

[Allanea]

On an unrelated point, what are the construction costs of those empty Chinese cities?

And what would it cost to found a city or a town, Peter the Great style?

[Gallia-]

Return of mass armies.

US Army raises 90 divisions of post-capitalist labour.

11th Armored Division pls

[Allanea]

Return of mass armies.

US Army raises 90 divisions of post-capitalist labour.

11th Armored Division pls

Manned by 150 guys each commanding legions of drones?

[The Soodean Imperium]

On an unrelated point, what are the construction costs of those empty Chinese cities?

They're actually very profitable, if you're a prefectural official and need to sell land in order to avoid a budget deficit.

[Gallia-]

Return of mass armies.

US Army raises 90 divisions of post-capitalist labour.

11th Armored Division pls

Manned by 150 guys each commanding legions of drones?

No. Manned by 15,000 men driving tanks with four-man crews and human loaders because you've a huge labour surplus that needs to be soaked up.

Drones will build the tanks, maybe, though. Doubtful they'll do everything, since you still need human assemblers and human wirers and human grinders and human welders and wow even the most automated tank plants can't do much with robots because it's almost like robots are incredibly niche at labour jobs.