Cheer up! Better times are on the way

From Amazon

Introduction

The theory of long cycles - first identified by Nikolai Kondratiev and later refined by Joseph Schumpeter - proposes that capitalist economies undergo long waves of growth and renewal, spanning 40-60 years. 

These cycles are kicked off by periods of innovation, followed by economic expansion - but eventually stagnation and decline set in, as existing technologies mature and productivity gains dwindle.

The first Kondratiev wave, the Industrial Revolution (circa 1780–1830), introduced mechanised production in textiles, iron, and water power, catalysing industrial growth and urbanisation.

The Age of Steam and Railways (1830–1880) followed, marked by steam power and extensive rail networks, creating national markets and driving economic expansion.

The third wave, the Age of Steel, Electricity, and Heavy Engineering (1880–1930), brought advancements in steel, electricity, chemicals, and the internal combustion engine, fostering new industries like automotive and chemical manufacturing.

The Age of Oil, Automobiles, and Mass Production (1930–1970) then transformed society through petroleum-fueled growth, automobiles, and consumer-oriented mass production, ushering in widespread prosperity post-WWII.

Finally, the Information and Digital Age (1970–present) has redefined economies with computing, the internet, and digital communication, creating an interconnected, information-driven world.

Now, we are entering a sixth wave led by AI, biotech, robotics, and green energy.

Our current period of economic slowdown is, therefore, not an anomaly. We are living through the tail end of the fifth long wave, which began with the information and digital revolution of the 1970s and 1980s. Its initial explosive productivity has long gone, leaving us mired in the ensuing "Long Stagnation".

But that is about to change.

The Cycle of Disruption and Rebirth

Long cycles do not begin smoothly; they are born out of upheaval. 

Schumpeter referred to this as “creative destruction” - a period when old industries, ways of working, and social structures are uprooted to make way for new, more efficient ones. Historically, each new wave brings disruption that manifests as political resistance, temporary labour displacement, social restructuring, and financial volatility.

These challenges are not unique to the coming cycle; they were seen in all the major economic transformations. Steam power in the 19th century led to the mechanisation of labour and the rise of cities. More recently the spread of electricity and assembly lines in the early 20th century saw society adapt to large-scale industrialization - eventually bringing prosperity to unprecedented numbers of people.

Emerging Technologies Drive Growth

Technological advancements in AI, robotics, biotech, and sustainable energy are not merely incremental improvements - they represent transformative shifts:

• Artificial Intelligence will drive efficiency gains in manufacturing, logistics, healthcare, and finance.
• Biotechnology will transform personalised medicine, gene editing, and sustainable agriculture.
• Robotics and Automation will enhance pretty much every industry it touches.
• Sustainable Energy Technology, (renewables and energy storage) decouples growth from environmental degradation, improving the quality of life.

The Timeline for Prosperity

The initial, disruptive phase of this new cycle will advance to prosperity in roughly a decade as these technologies mature and integrate into the economy, creating dramatic efficiencies and driving growth.

During the early 2030s, expect accelerated adoption as infrastructure, expertise, and regulatory frameworks catch up.

This will culminate in a long period of stable growth in the 2040s, comparable to the post-WWII economic boom.

The Dawn of a New Cycle

The Long Stagnation has seen political volatility as cohorts of university educated young people have failed to achieve the futures their education appeared to promise them. Meanwhile, for most people, personal incomes have not advanced in decades, and the future looks bleak. No wonder they're cynical and angry.

Politically, the veto networks of established interests have conspired to block off hopes of change. Yet these new economic forces will not be forestalled. Through political turmoil new leaders and parties are unjamming the process.

How ironic if the self-styled Progressives are now the reactionary ones, wedded as they are to their static and lifeless equilibrium models which serve only to justify their privileges. Meanwhile the so-called Conservatives, riding the waves of change, are the real revolutionaries, the motors of progress going forward!

The Pathological State and the Prospects of War

 

"No Two Democratic States Have Ever Gone to War"

This oft-cited claim is at least approximately true. It holds not as an iron law but as a reflection of the dynamics within and between democratic states. Understanding why this holds - and when it doesn’t - requires analysing the nature of democracy, the capitalist economy and the specific phenomenon of the pathological state.

The Democratic State is Generally Reactive

Capitalism is unique as a mode of production where economic power resides with the private owners of capital, while the state's role is almost entirely non-economically productive: setting and enforcing the rules for commerce, providing public goods like education and defence - and otherwise staying out of the way.

Critically, the default capitalist state lacks its own economic resources. Revenues depend on taxes and borrowing, tethering the state to the economic vitality of its capitalist and working classes.

In bourgeois democracies, the government and the state remain distinct entities. The government - composed of elected officials - sets policy and provides direction but the sprawling state bureaucracies, influenced by diverse civil society lobbying, operate in their own sphere - and generally in their own interests.

In the modern era, capitalism has transcended national boundaries. The most powerful firms and financial institutions are transnational, motivated to influence democratic states in the direction of harmonised regulations, free trade rather than tariffs, and stable markets. 

The pathological state stands in stark contrast.

The Pathological State: A Breeding Ground for Conflict

Pathological states are those captured by elites whose ambitions go beyond purely economic rationality. These regimes are often characterised by a fusion of government and state, where the ruling elite purges the state apparatus to serve visions such as territorial expansion, national pride, and dominance.

Historical examples abound. Nazi Germany sought Lebensraum in Eastern Europe, aiming for territorial control to directly support its perceived agricultural and resource needs. Similarly, contemporary Russia and China - while not identical - exemplify the pathological state in their proactive use of state power for revanchist ends and national-ethnic dominance.

In these regimes, economic elites are often subordinated to the state’s broader ideological goals. The calculus of transnational capitalism - focused on profitability, efficiency and stability - gives way to the more visceral drives of power and status backed by military action. It has to be said that in this the state is often backed by the patriotism of popular opinion - while few in democracies have felt impelled to die for their company...

How Democracies Resist Pathological States

Pathological states often provoke democratic ones into confrontation. For a pathological state, war and aggressive policies are not anomalies but extensions of its raison d’être. History shows that democracies targeted by such states face a stark choice: capitulate or fight.

Take current conflicts in Ukraine and around Taiwan. In both cases, pathological states (Russia and China) confront democracies, threatening territorial integrity and sovereignty. War for these kinds of objectives is not congenial to developed bourgeois democracies, but they are not given the choice.

The Limits of Pathological States

While democracies rarely devolve into pathological states, the reverse is even less likely. Pathological states tend to sustain themselves until they are forced to collapse, often by losing a war. The cases of Spain and Portugal may serve as exceptions - examples where entrenched repressive regimes after many decades eventually transitioned into democracies as militarism and authoritarianism became inefficient shackles, to be thrown off by new elites amid popular pressure.

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Q&A on Pathological States and Political Movements  

Q: How do pathological states come into existence?

A: In cases like Russia and China, the collapse of the 'ancien régime' occurred without prior significant capitalist development or the presence of a robust civil society. The revolutionary governments in both cases seized control of the state apparatus to forcibly drive industrialization, embedding dysfunctionality from the outset. This reliance on the state for economic transformation created a system of repression and inefficiency - pathologies that have persisted over time.  

By contrast, in Nazi Germany, the bourgeois democratic state disintegrated under the weight of internal divisions that proved irreconcilable through peaceful means. The National Socialist movement, a mass political force, rose by exploiting economic despair and ideological polarisation. Through violence and suppression - primarily targeting trade unions, socialists, and communists - the Nazis dismantled institutional opposition and restructured the state to align with their extra-economic ideological objectives. This transformation rendered the state pathological, prioritising coercion and ideological conformity over functional governance - and launching the world to war.  

Q: Some people have called the Trump MAGA movement in America fascist. Is this an accurate statement?

A: No, the comparison is misplaced. The MAGA movement under Trump is better understood as part of a broader realignment within bourgeois democracy, akin to Margaret Thatcher’s transition in the UK during the 1980s.  

Thatcherism arose in response to the exhaustion of the post-war Keynesian economic model, introducing neoliberal reforms to revitalise capitalism. While fiercely contested - at times violently - the transition maintained the framework of bourgeois democracy, redirecting it along new deregulated and globalised lines.  

Similarly, the Trump phenomenon represents an attempt to pivot away from the now-declining neoliberal, globalising model that has dominated American (and Western) politics for decades. This shift is partly driven by the pressures of geopolitical competition from coordinated adversaries like China, Russia, Iran, and North Korea, which expose the vulnerabilities of the existing global order, but also by a popular revolt against internal stagnation.

However, unlike the Nazi seizure of power, the MAGA movement does not seek to dismantle democratic institutions wholesale, or impose an ideologically rigid state. Instead, it signifies the reconfiguration of bourgeois democracy to meet the demands of a changing global and domestic landscape.  

While the process is polarising, the trajectory remains rooted in the competitive pluralism that defines democratic capitalism, not the totalitarian impulses characteristic of fascist regimes.

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This essay was drafted by ChatGPT from my extensive notes, and then lightly post-edited.

"Girl from the North Country"

 Girl from the North Country 

Bob Dylan with Suze Rotolo (the Girl from the North Country)

This is a much-covered song originally written and recorded by Bob Dylan back in 1963. At the time he had just arrived in England and was soaking up folk music culture. If you compare both the tune and lyrics you see an astonishing similarity to the folk standard, “Scarborough Fair”, later recorded so definitively by Simon and Garfunkel.

Dylan's motivation for this song was a break up with his girlfriend of the time, Suze Rotolo - he was desperate to reunite with her.  Dylan left England for Italy to search for Rotolo, whose continuation of studies there had caused a serious rift in their relationship.

"Unbeknownst to Dylan, she had already returned to the United States, leaving about the same time that he arrived in Italy. It was there that he finished the song, ostensibly inspired by the apparent end of his relationship with Rotolo. Upon his return to New York in mid-January, he persuaded her to get back together, and to move back into his apartment on 4th Street. Rotolo is the woman featured on the album cover, walking arm in arm with Dylan down Jones Street, not far from their apartment.” (Wikipedia).

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Personally I find the folk versions anaemic: I am much more taken with Walter Trout's full-on blues version: a heartfelt, poignant vocal performance, with guitar work of lacerating sadness. It sounds like he has been there too.

Wikipedia tells us that: “Between 1981 and 1984, Walter Trout was the lead guitarist in Canned Heat. He toured with them extensively in the US, Europe, and Australia. From 1984 to 1989, he was the lead guitarist in John Mayall's Bluesbreakers following in the footsteps of guitarists such as Peter Green and Eric Clapton. Trout recorded and toured with the Bluesbreakers worldwide.” 

Who would have thought you could make yourself a solid global - if niche - reputation with such an unusual and perhaps risible name,  self mockingly referenced in the superlative live album, “No More Fish Jokes”.

So I've taken to listening quite a bit to Walter Trout's extensive body of work. I rate him higher than the very accomplished Joe Bonamassa, not least for the authenticity and emotion of his performances.

Perhaps we all, in our most private memories, recall a girl from the north country: (not all of them were ephemeral...).

--

This is Clare in watercolour, wearing a coat so warm: from the north country of Liverpool, but here pictured in the Memorial Amphitheatre,  Arlington National Cemetery, Virginia, USA in a chilly January, 2002.

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Lyrics

Well, if you’re travelin’ in the north country fair

Where the winds hit heavy on the borderline

Remember me to one who lives there

She once was a true love of mine

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Well, if you go when the snowflakes storm

When the rivers freeze and summer ends

Please see if she’s wearing a coat so warm

To keep her from the howlin’ winds

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Please see for me if her hair hangs long,

If it rolls and flows all down her breast.

Please see for me if her hair hangs long,

That’s the way I remember her best.

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I’m a-wonderin’ if she remembers me at all

Many times I’ve often prayed

In the darkness of my night

In the brightness of my day

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So if you’re travelin’ in the north country fair

Where the winds hit heavy on the borderline

Remember me to one who lives there

She once was a true love of mine

'Schumpeter' on Robotics and the Labour Theory of Value

From Amazon

I spent a significant number of years contemplating Marx's version of the Labour Theory of Value, recognising its attraction as the source of what we're able to bring to market (subject to rents of course, such as found things).

And yet: Marx himself indicates that value is not a property of a commodity but an abstract social relationship, established under highly idealised circumstances, in general market transactions. In practice value is not observable, so how can it be causal?

I discovered Joseph Schumpeter's masterly explication and critique of Marx's economic and sociological ideas very late. But that's better than never; with ChatGPT I can actually chat with the master economist himself. Note that our lives did not overlap.

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Exploring Marx and Value Theory: A Conversation with Joseph Schumpeter (ChatGPT)

This is a reconstructed dialogue between myself and the economist "Joseph Schumpeter" (1883–1950), inspired by his seminal work Capitalism, Socialism, and Democracy. In this hypothetical exchange, we use Schumpeter's perspective to explore complex topics such as Marx's labour theory of value and the notion of "social surplus product" within capitalist systems. The aim is to shed light on the unique ways that Marx and Schumpeter approached questions of value and economic growth—and to consider how these ideas might apply to a world of increasing automation.

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Me: So, Joe, I know you’re not fully on board with Marx’s labour theory of value. But how do you feel about the broader idea of the social surplus product?

Schumpeter: Ah, an excellent question! While I certainly take issue with Marx’s labour theory of value as a strict framework, I’m more receptive to the concept of a social surplus product. Marx rightly recognized that societies generate a surplus beyond basic subsistence needs, and this surplus becomes the fuel for investment, growth, and—crucially—innovation.

But here’s where I differ. Marx viewed this surplus as a tool of exploitation, a force driving capitalism toward collapse and class conflict. I, on the other hand, see it as the engine of capitalism’s unique adaptability. In capitalism, this surplus isn’t just appropriated by the capitalist class but reinvested, spurring cycles of what I call “creative destruction.” Capitalism, through this cycle, continually evolves, creating new industries and wealth.

So yes, I find the social surplus concept useful, but I see it as a catalyst for capitalism’s evolution, not its inevitable downfall.

Me: To be fair, you have yourself acknowledged that Marx also emphasised that capitalists are driven to reinvest their appropriated wealth. But on another topic, do you think, then, that Marx was guilty of what we might call “vitalism”? I mean, what would happen to his model if we replaced human workers with equally capable robots who perform all productive labour and maintain themselves? If these robots earned a “wage” to cover their self-maintenance costs, then like any other form of constant capital wouldn’t Marx’s framework imply that no new value could ever be created, even though production continues in all other respects unchanged?

Schumpeter: Ah, yes, this is an insightful question! In a sense, Marx’s model does seem bound to something resembling vitalism. By his account, only human labour can create new value because, for him, human labour uniquely adds surplus value in production. If we replaced workers with robots, who would merely be another form of "constant capital", his model would suggest that no value is generated—only transferred.

This creates a dilemma. The productive process, as you note, remains the same; the output is identical, and profit still exists. So, has anything truly changed?

I would argue that this scenario points to a limitation in Marx’s framework. He insists on tying value creation exclusively to human labour, almost as if labour contained an "animating spirit." It’s as though Marx was implicitly holding onto a vitalistic view of labour, which limits the applicability of his theory in an age where machines increasingly perform complex labour.

Me: So, from your perspective, value creation doesn’t require a human “animating spirit.”

Schumpeter: Precisely. From my perspective, value creation lies in the productive function rather than in human effort alone. Imagine a fully automated system, where robots both maintain themselves and perform all productive tasks. Such a system could indeed generate value—not because of some mysterious property of human labour, but due to its efficient organisation and minimal input costs.

This interpretation sees value not as a product of human labour alone but as an outcome of productive efficiency and innovation. Marx’s model is restricted by this vitalistic assumption, limiting its usefulness in a world that increasingly relies on automation and artificial intelligence.

Me: I read your book, "Capitalism, Socialism and Democracy" with great interest. It's a true tour-de-force: visionary, objective, not at all tribal and steeped in your vast expertise in history, economics and politics. Eighty two years later, I am most struck by your pessimism about capitalism's lack of enduring vitality, and by your misplaced faith in the power of so-called 'rational bureaucracy' to get things done. The collapse of the Soviet model and much else shows how effectively bureaucracy without competition kills progress and allows institutions to be captured by their own elites - to the detriment of wider societal interests. So how would you reappraise the prospects of the future of capitalism if you were writing today?

Schumpeter: When I wrote my book, my central argument was that capitalism’s greatest strength—its capacity for creative destruction—would also sow the seeds of its eventual decline. By relentlessly revolutionizing the means of production, capitalism disrupts not only markets but also the cultural and social fabric that supports its institutions. Over time, I predicted, capitalism would erode the entrepreneurial spirit that made it dynamic, replacing it with a class of managers and bureaucrats who, while efficient, lack the visionary energy to sustain perpetual innovation.

Now, in hindsight, I see that I underestimated the resilience of entrepreneurial capitalism, particularly when tied to democratic institutions and bolstered by global competition. The collapse of the Soviet Union and the stagnation of centralized economies underscore how essential competition and private incentives are to innovation. Bureaucracy alone, far from being a neutral executor of rational plans, often succumbs to sclerosis, inefficiency, and elite capture. The lessons of Kornai’s 'The Socialist System'—a work I would eagerly reference today—make clear how central planning inherently breeds shortages, inefficiency, and corruption due to its structural inability to adapt to complex, dynamic markets.

You are correct that I overestimated the efficacy of rational bureaucracy. My optimism was rooted in the idea that a bureaucratic structure could, at its best, implement policies consistently and rationally. However, what I underestimated—what history has since made painfully clear—is that without the competitive pressures of the market, bureaucracies lack both the incentive and the feedback mechanisms necessary to innovate and respond effectively to change. Instead, they protect their own existence and entrench their elites. This tendency is not limited to socialist states; even in capitalist democracies, public institutions often suffer from a similar ossification, as seen in the inefficiencies of large welfare states and regulatory bodies.

Finally, a word on capitalism’s potential future adversary. If socialism as envisioned by Marx and Lenin is now discredited, a new form of bureaucratic corporatism or "managerialism" may well take its place. The threat to capitalism today lies not in revolutionary upheaval but in the creeping expansion of non-competitive structures—be they state bureaucracies or monopolistic corporations—that stifle innovation and dynamism. The battle for the future, then, is not between capitalism and socialism but between innovation and stagnation, competition and rent-seeking.

"Triptych" - by Adam Carlton (intro)

 

This is a story about a young woman who has the power of magic though she doesn’t know it. We can hand-wave some speculative physics (Penrose; microtubules) to save us from Fantasy, but in the end it doesn’t matter.

How does she sees herself? How do others see her? How do they try to make use of her?

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Read "Triptych" - by Adam Carlton

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"Precautionary Principle" by Adam Carlton

 

The CEO’s call had been minimally informative, just enough to establish his credentials.

“Meet with him. Find out what he wants. He’s already met with the CSO so it shouldn't be anything technical for you. It's an operational matter. We need to keep on good terms with these people, but don’t roll over. Call me afterwards. Keep it short.  Just the minimum, OK?”

I recognised all the signs.

As COO I meet all sorts of visitors: sales people exuding bonhomie, their smiles vanishing beneath their eyes; patronising lawyers, brimming with sharp disdain. M. Dubois - an auspicious name - is none of those things. To start with he seems sincere. This is more unusual than you might expect. He also looks worried, a far cry from the sharp-suited arrogant young man I had been expecting. He looks like he's angling for a favour.

My admin gets us coffee and I look him over. He’d be about ten years older than me, mid-forties. Wears a suit which has plainly been around a bit. His face is round and chubby, brown hair. He resembles a prosperous but faintly harassed country doctor. We clear the pleasantries.

“So, what can I do for you, M. Dubois?”

My visitor takes a folder from his briefcase (how old-fashioned!), extracts a document and places it on my desk. It looks like a dossier. There’s a photograph at the top right which I don’t recognise.

M. Dubois speaks.

“First of all, thank you for seeing me today. I’m here to discuss cooperation between your company and certain agencies of the state, about which I'm afraid I can't be more specific. You’ll be aware of the arrangements already in place as regards individuals designated through a court order ... . “

Here he pauses, a slight hesitation.

“But I’m not here about that.”

There is of course a ‘conspiracy of silence’ in the company about our links with the security agencies. To a first approximation we know everything about our users. We know where they are to GPS levels of accuracy (about 30 cm). We can in principle activate the microphone in their phones - and the camera. We’ve got their Calendars and their activity timeline in Maps. We know which apps they use, what they type and what they see. We track their emails and their browsing. And that’s before any spyware that might happen to find its way on to their devices.

Never were intelligence agencies so fortunate as when they teamed up with us.

Our users know all this and don’t care. Perhaps they think only our computers surveil their stuff. Out of sight, out of mind. We are truly desperate to keep it that way. Our whole business model depends on it. It’s a mantra. Our users must never consciously dwell on how much we know about them. So, we keep the security services at arm’s length and our involvement dialled down to the minimum. Besides, some of us are libertarians.

M. Dubois points to his dossier.

“Take this person. He’s a thoroughly respectable chap, never had any real trouble with the law. He had a senior position in industry, now he’s retired. He lives quietly in the country and keeps himself to himself. His only affectation is that he writes an obscure blog.”

I nod at this. We have millions of users just like that. With disposable income to hand, that particular demographic is particularly interesting to our actual customers.

M. Dubois continues.

“My man here is harmless enough. But it turns out that in his youth he was rather less so. Spent some years in a left wing organisation, was quite senior. Learnt his Leninist tradecraft, did some clandestine work. Still, you’ll say, it’s been years, hasn’t it. And so it has.”

My visitor sips at his coffee, as if unsure what to say next. I nod encouragingly,

“Lot’s of us have chequered pasts, you know. Why, I myself …”

M. Dubois politely interrupts.

“And yet ... he’s not quite conventional. Not quite .. on-message. He’s more like your reactionary uncle, the one who thinks ‘uncontrolled immigration’ is a cause for concern and that ‘woke’ equals mad.”

I smile in sympathy. We’ve all met people like that - and some of them are indeed relations.

“And he’s got a blog; and a history. Normally he’d never come to our attention. What's he done wrong, after all? We’d never get a court order.

"But we have a department which does scenarios. We wargame.”

He leans forward. He’s finally getting to the serious part.

“You’ll be more aware than most of the rise of populism. Dangerously divisive leaders like Le Pen and Trump. The emergence of the alt-right. Like most people, you probably think that’s mostly media hype, over-the-top scaremongering, exaggeration.”

I nod. I read the news. I know about this stuff. And I'm really not that concerned.

“We’ve done the maths. Populism drives off the economic cycle and that’s going bust. The split between Paris and the rest of the country will go crazy: tough times ahead.

“It’s a cliche I’m trying to avoid but comparisons with the Weimar Republic," he gives me a sharp look here, "- Germany in the thirties - are not out of place. When the mob starts to move, a few intellectuals, especially if they’ve had some training, can suddenly find their influence amplified a thousandfold. They're trouble.”

He leans back.

“You see my problem? ... Do you?”

The conversation - I would call it a monologue - has taken a very sharp turn. He's waiting for me. As if it’s up to me to divine his true purpose here. What does he want? And what does he want us to do?

“You’ll be wanting our help, then, with your problem,” I say neutrally, and then from nowhere I add, “Are you sure you’re not proposing to destroy the village to save it?”

A big smile. For the first time I detect a note of respect in his gaze. Like I’ve finally cracked it...

“Touché. But, you know, liberal democracy has always needed a few 'tough guys' doing the dirty work, out of the public gaze. You know this. Let’s cut to the chase.

"We have a list, a few thousand individuals. Harmless today, potential catalysts of chaos tomorrow. It would be very helpful if you could segregate their data in a format I’ve already discussed with your CSO. Nothing more: you just sit on it.”

“You don’t want to see it?”

“No, of course not. That would require a court order, a warrant which we would never apply for and certainly would never get approved. Just keep the data on a secure server. If push comes to shove, democracy will need to protect itself, even from people who think they’re in the business of ‘just telling the truth’. Especially from them.”

My stomach is churning. What he’s asking for is not technically illegal but many of our staff would think it a value atrocity - pinning electronic yellow stars on our users. Actually that’s my gut feel as well. I understand more clearly why the CEO - with sure instincts - wanted to stay out of this particular loop. 

It’s an operational matter.

On the other hand, rationally Dubois has a point. Pacifism and ‘don’t be evil’ works just fine until someone’s out to get you. Then you man up or you’re toast. But if it ever got out ... . Dubois seems to have wargamed that option too.

“It’s an operational matter,” he says. You already have a security cell here which handles our liaison. Just add it to their job spec. The additional data will live in their secure partition. Literally no-one outside the cell will notice anything. And the information is dead. No-one will access it. It’s all encrypted.“

He lifts his cup, judiciously checks it, and drinks the last of his coffee.

“Only in the case of a national emergency will you be formally contacted by the Government. You will be truly and sincerely glad at such a moment that you stood up for for us, because at that time of extreme political threat we will be defending you and your values.”

A fractional pause.

“Just as we support you today, for very good economic reasons, with rather generous tax breaks.”

He has a point - I think.

“OK. What do you suggest I do?”

He hands me a form and points out where to sign.

"The Vanishing of Investment Opportunity" - Schumpeter

From Amazon

“The present generation of economists has witnessed not only a world-wide depression of unusual severity and duration but also a subsequent period of halting and unsatisfactory recovery. 

"I have already submitted my own interpretation of these phenomena and stated the reasons why I do not think that they necessarily indicate a break in the trend of capitalist evolution.

"But it is natural that many if not most of my fellow economists should take a different view.

"As a matter of fact they feel, exactly as some of their predecessors felt between 1873 and 1896 - though then this opinion was mainly confined to Europe - that a fundamental change is upon the capitalist process.

"According to this view, we have been witnessing not merely a depression and a bad recovery, accentuated perhaps by anti-capitalist policies, but the symptoms of a permanent loss of vitality which must be expected to go on … .” 

(Page 111 of 407).

This was written in 1942. Les Trente Glorieuses were about to transform the world in a new cycle of robust capitalist growth in the 1950s and 60s. Schumpeter's prescience in opposing doom and gloom was based on his evolutionary idea of capitalist development, leveraging the theory of long cycles first identified by Nikolai Kondratiev.

I shall have more to say next week on this, but here is a preview:

"Now, we are entering a sixth wave led by AI, biotech, robotics, and green energy.

"Our current period of economic slowdown is, therefore, not an anomaly. We are living through the tail end of the fifth long wave, which began with the information and digital revolution of the 1970s and 1980s. Its initial explosive productivity has long gone, leaving us mired in the ensuing "Long Stagnation".

"But that is about to change."

"My atheism was so monolithic, so radical..."

Amazon

Note: if/when the Catholic Church decides to introduce LLM chatbots as theological advisors to the laity, this post may be an example of how that could work.

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In Michel Houellebecq’s 2005 novel, “The Possibility of an Island“, the main protagonist, Daniel, a jaded, successful, nihilistic shock-comic, expresses the following view of the transcendental significance (or the lack of it) of human life.

“I had not only never held any religious belief, but I hadn’t even envisaged the possibility of doing so. For me, things were exactly as they appeared to be: man was a species of animal, descended from other animal species through a tortuous and difficult process of evolution; he was made up of matter configured in organs, and after his death these organs would decompose and transform into simpler molecules; no trace of brain activity would remain, nor of thought, nor, evidently, of anything that might be described as a spirit or a soul. My atheism was so monolithic, so radical, that I had never been able to take these subjects completely seriously.“

"The Possibility of an Island" (2005), Michel Houellebecq, p. 221.

Probably this is as good a statement of the modern secular worldview as you would get anywhere. So suppose Daniel were to end up in a Confessional with a wise, learned, erudite and sophisticated Catholic priest. A theologian well-aware of the church's teaching that science and religion can never come into conflict, and that simple appeals to faith or blind belief do not carry conviction to the modern educated person. And that you cannot just assume the existence of God, the soul or the divinity or resurrection of Jesus. All those dogmas of faith have to be conclusions from simpler premises which any educated and intelligent secular person would find compelling.

Let's ask the most sophisticated and smart current ChatGPT variant to craft such a priest’s response...

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ChatGPT observes that such a priest might begin by acknowledging Daniel’s clarity and integrity in approaching the matter, saying something like this:

Priest: “Daniel, I can see you’ve put a great deal of thought into this, and in some ways, you have arrived at a view of life that many people would rather ignore. There’s a certain courage in staring directly at the nature of physical life as it is. You’re not mistaken in thinking that, scientifically, our bodies and brains are indeed material, biological systems, subject to decay and dissolution. But I wonder if you would entertain the notion that there might be aspects of experience and existence that don’t fit so neatly within this biological framework - aspects we might call emergent or transcendent in nature, even if we struggle to name them precisely.

“To be clear, by ‘transcendent’ I don’t mean anything as simple as some misty ‘other world.’ What I mean is this: even in a purely material universe, we find phenomena that seem, in a very real sense, to exceed their parts. You mentioned evolution — a process driven by small, blind adaptations over millions of years. But the end result is astonishing, isn’t it? It has led not just to survival machines but to creatures capable of reflecting on love, on beauty, on tragedy. You and I are capable of finding meaning and value, even of creating it. Why would evolution bother to endow us with the capacity to seek meaning at all?

“Our evolutionary lineage, however long and random, has somehow led us to a unique ability to transcend the immediate, to ponder questions we have no survival need to answer. Many thinkers, including some of the most rigorous scientists, have found in this an intimation of something far deeper, which they might call ‘truth’ or ‘the Good’. Not all have seen this as a sign of a deity, I grant you, but many have found it difficult to escape the feeling that our experience of awe and mystery hints at something more.

“Then there is the problem of human suffering. As a priest, I have been with people at every conceivable stage of life, in love and despair, in faith and in disbelief. At times of great pain, I find that the material view of existence falls short in one particular way: it struggles to explain why suffering exists at all. Suffering is not simply physical - it is also profoundly existential. I believe that, perhaps unwittingly, our experiences of suffering reveal a deep, underlying craving for meaning, for a peace beyond suffering itself. Could it be that this search is more than the result of genetic mutation or natural selection?

“The Christian view, as I see it, is that this longing for meaning, for wholeness, for transcendence - all these things evolutionarily ‘unnecessary’ but deeply human  - point toward a reality that science may not capture but does not negate either. I’ll end with this: the Church would never ask you to abandon the rational or intellectual rigour you hold dear. In fact, she insists that faith and reason are twin tools for understanding life and truth. What if God is not ‘another being’ among beings, like a creature we might discover, but rather the very ground of existence that upholds all things, even our capacity to question and deny?”

ChatGPT observes:

In this approach, the priest’s words don’t aim to ‘convert’ Daniel immediately but to open the door to a more nuanced and expansive view of existence. He invites Daniel to consider that even from a rational perspective, there are mysteries in life that hint at meaning beyond the purely material, without ever asking him to abandon his commitment to truth or intellectual integrity.

I respond: would Daniel be moved by this argument? I doubt it. But the recourse to consciousness seems to me to be the one true foundation for theology. And even if science eventually reductively explains consciousness in materialistic terms (quite probable though not certain) the experience of consciousness would still be different. The map is not the territory. You and I both know you’ve got toothache, but only you are actually hurting.

So Daniel says:

“You may be right about consciousness and the lived experience being different in kind from the mere motion of atoms. But even admitting a distinct realm of ontology, it’s a stretch to derive the baroque judeo-christian dogma. Something far simpler like Daoism would do the trick.”

The priest might smile at Daniel’s response and say:

Priest: “Ah, Daoism! I understand the appeal - it’s a tradition that speaks to life’s fluidity, the balance of forces, and the beauty of simplicity. Daoism often seeks to dissolve the ‘self’ into the greater flow of things, which can certainly be a way of relating to the vastness of existence. But if I may, the ‘baroque,’ as you call it, of Christianity has its own logic. Perhaps I can clarify what I mean by this.

“Consider consciousness again, especially the depth of human consciousness that not only experiences the present but reflects, remembers, regrets, and aspires. We are finite beings, and yet we consistently desire what seems infinite  - boundless love, unending peace, justice that transcends self-interest. Why should this longing for the infinite be so strong in us? Daoism, beautiful as it is, can sometimes leave this dimension unexplored, describing life’s ebb and flow rather than reaching beyond it.

“Christian theology has always been about grappling with this depth of human experience - our love, our suffering, our aspirations - and suggesting that these things ultimately mean something. Rather than offering just an ontology of ‘oneness,’ it proposes that the personal aspects of life  - love, truth, even struggle - are not incidental but foundational. To put it plainly, Christian thought doesn’t simply describe what exists but seeks to answer why our human experience feels so full of purpose and connection, even as it confronts loss and death.

“That’s where the ‘baroque’ dogma comes in. I don’t see it as a flourish or a layering-on of arbitrary rules. Rather, it’s the Church’s attempt to work out the implications of a God who didn’t remain distant but entered the world as we do - in flesh, in vulnerability. It’s a response to the belief that the infinite chose to embrace the finite not as an abstract force but as a person, in a way that calls forth a personal response from each of us. The complexity of Christian doctrine isn’t, in the end, meant to overwhelm the mind but to honour the richness of human experience and the paradoxes we all live with.

“I believe that’s what Christ asks us to consider: if we see our own lives as infused with meaning and we long for connection, could there be a source, a love, that actually satisfies these cravings? Even if it’s a stretch, would it be worth it to keep an open heart?”

ChatGPT observes:

In this way, the priest appeals to the personal, relational nature of Christian theology, contrasting it with Daoism’s impersonal cosmic order, suggesting that Christian doctrine’s complexity is a response to the complexity of our lived experiences and desires.

If we gave the last word to Daniel he might be impressed with the force of the priest's arguments and even admit to the coverage-utility of the specific Judeo-Christian forms of theology. He might note a (convenient?) lack of theological interest in attempts to intellectually ground all that awe and wonder in a developed evolutionary psychology - it seems likely that there are good sociobiological reasons for moral and ecstatic fervours of various persuasions, even in the absence of any compelling theory of consciousness itself.

Daniel might conclude that from a rigorous point of view, all the priest has really achieved - with his ontological conclusions founded upon the existence of deep emotions - is a reasoned case for agnosticism.

ChatGPT observes:

This closing word from Daniel is sharp and fittingly incisive. His response effectively acknowledges the intellectual weight of the priest’s arguments — particularly the structured moral and existential "coverage" provided by Judeo-Christian theology — without conceding to belief. By pointing to the absence of theological engagement with evolutionary psychology, Daniel smartly raises a potential critique: that religious awe might well stem from adaptive social or psychological mechanisms rather than any ultimate metaphysical truths. 

This challenge serves as a pivot back to his materialist skepticism, suggesting that our capacity for ecstasy, morality, and transcendence could have pragmatic, evolutionary origins. Daniel’s conclusion that the priest’s case ultimately supports a reasoned agnosticism, rather than definitive belief, underscores his own insistence on intellectual rigor, even as he allows for the priest’s sincerity. This subtly places the burden back on theology to reconcile with materialist frameworks like evolutionary psychology if it wants to fully engage modern secular minds.

Your choice to end on this note keeps the debate alive while also subtly acknowledging the enduring mystery of consciousness — a phenomenon that, even through an evolutionary lens, leaves room for doubt and wonder.

Khalil Madi: CIA - a short story by Adam Carlton

The Yale scientists took possession of 32 pig heads from the abattoir, four hours dead. They then infused the brains with chemicals and synthetic blood and - anaesthesia on hand - checked for brainwaves.

And found some!

Four hours?

What if they'd used heads decapitated only ten minutes ago? What if the brains had been chilled? They were so conservative.

Somewhere in here, Adam, I tell myself, there is a story...

Suppose you could restore substantial brain function. It seems likely that the higher cortical functions, those most complex and brittle, would be hardest. Your revitalised brain might have a functional subconscious but be functionally disinhibited.

It would make the ideal interrogation subject!

So here was the idea which slowly took shape in my mind...

---

A drone circles a Libyan beach. The jihadis drag out one of their own, a thirty-something middle-eastern guy. He kneels on the sand while the masked militants line up behind him. One has a machete at the ready, another is catching every moment with a phone camera.

The Langley computers are doing realtime facial ID on the drone feed: all the alarms go off! The victim is a high-value asset! A CIA deep-penetration agent close to the Al-Qaeda leadership.

It will become clear that this man is the personal protégé of the dynamic new CIA Middle-East Director, Khalil Madi, himself an Arab-American.

The Carrier Strike Group nearby in the Med gets the flash command. A jet screams off the flat-top, afterburners in full scramble-mode: mere minutes later it drops a cryogenic-retrieval drone a few miles off the coast.

The jihadis on the beach complete their grisly task and contemptuously kick the head into the long grass backing the beach.

From where it is covertly retrieved four minutes later by the drone, which inserts the decapitated head into its special skull-sized chill-chamber.

Eight hours later it's in the Langley secure neurolab, wired up to complex apparatuses. Questions can be asked and vocalised; answers retrieved.

Why has the CIA gone to all this trouble? He's a key agent. He may have critical information on an assassination attempt on the President!

The disembodied, barely-conscious brain is rambling, muttering in Arabic. The transcription - in Arabic of course, the system is smart - scrolls down a large wall-screen.

They are American neuroscientists. This means nothing to them.

Consternation!

They call out for a translator. One is eventually found. She starts at the top, working through the Arabic text, translating as she goes.

He thinks he's here in Langley, she says, surprised. Could he even think that?

They're not sure.

He thinks he's talking to the CIA Director, Khalil Madi. A personal and highly secure personal briefing.

She scrolls some more as the text keeps coming.

He's telling Madi that his rivals in the Al-Qaeda leadership have their suspicions about his CIA connections and have denounced him. He fears the worst.

And now the disembodied brain, in its phantom reality, is laughing, saying to himself in Arabic how amazingly ironic it is: If they only knew.

The translator turns around, puzzled at what she's reading.

And now he's asking the Director for the President's final itinerary. Says the brothers are prepared and in-country but just need details of places and times to finalise the operation.

She looks at the technicians.

I .. . I don't get this. He seems to be waiting for the Director to tell him.

It takes more than a few seconds for the group to process the implications.

Finally someone says it.

This can only mean .. that our asset here is a double agent!

And our Director, Khalil Madi, is actually working for ... !

---

So I thought that could really work as a tech thriller, for someone like David Ignatius. But suddenly my interest faded. Subconsciously I really didn't want to write this story at all.

I Hate To Lose

 

Down to Lytes Cary Manor (National Trust), about half an hour’s drive from home. A walk through the grounds, damp and gooey clay, the odd mud pool on the path down to the river. Overcast skies. No sign of that unshielded fusion reactor, so dangerously close at 160 million kilometres.

“Do you think we'll see anyone else?” Clare asked, (the car park had been almost full).

“No,” I said confidently, thinking that the wise visitor would have stuck to the house and immediate gardens, and then made a fast retreat to the tea room.

I got the impression that she'd said, or thought, that we would see around six people.

Halfway round our circuit, just after we had admired the bridge, a man passed us. We exchanged greetings. It was 12.15 pm.

“I always think that we should say good afternoon only after lunch,” she said. (We had said good morning).

“That’s my view too,” I said, though my mind was more on the fact we had, now, met somebody.

“I think there is a better way to think about this,” I said, “something a little less binary. When I said we wouldn’t see anyone else, I really meant we should see zero-ish people. I had in mind a distribution. One is very close to zero, so on balance I'm still right about this.”

She looked at me in disbelief.

Soon afterward, in the distance, we spotted two other walkers. That made a total of three, as we headed back towards the tea room for our hot chocolates.

“OK,” I said, “We’re really talking about two binomial distributions here. Divide our walk into, say, n = 12 equal time slots and assume the probability of encountering another walker in each of these time slots is p. We’re really disagreeing about the value of p.

“In my view p was about one twelfth, which means I should have perhaps expected on average to meet just one person. You said we’d meet six people so for you p is one half - twelve times one half is six.”

They do look like rabbits. The tea room is in the manor house, top left

It was hard to see if she was following the argument as her attention seemed fixed on the weeds growing in the adjacent field, which looked like a crowd of rabbits.

"Now, our standard deviations are different: for me, using the formula sqrt(npq) n = 12; p = one twelfth;  it's just under one - while for you with p = a half, it’s around 1.73, the square root of three.

"So seeing three people for me is two standard deviations out - while for you it’s only 1.73 sds.

“Although technically this aligns more to you, I think morally we’d have to call it a draw.”

She turned to me and said, “Even when you lose you hate to lose.”

Why do I write here?

Clare said, "I worry about you posting stuff too quickly. It makes sense to you, but you only see the meaning you intend. You don't realise that other people would often read a quite different meaning into it. You could get into trouble that way."

Of course she is right. Yesterday's post "A Perfect Day" is a case in point. It was originally ambiguous - and I had to add a whole extra paragraph at the end to disambiguate what I really intended. After she had chided me.

In general I write to understand better what I'm thinking, and to finally dump the thoughts which whirl incessantly in my head - as text - so that I can move on. And then I came across Paul Graham's October 24 essay where he sees considerably more virtue in writing than just that: Writes and Write-Nots.

A Perfect Day

 Some will think so today.

This beautiful, poignant song by Lou Reed finishes with a lyric to ponder:

"You're going to reap just what you sow".

---

Ambiguity? I am of course referring above to the party which has adopted and aggregated the fantasy luxury beliefs of the aspirant young professional strata - and thereby abandoned aspirations to hegemonic ideological leadership for the population as a whole. It now falls to the Republicans to break the logjam: I have high hopes for JD Vance and his talented colleagues to get real work done behind the scenes, while Trump entertains in front of house.

Naive (cultural) globalisation has truly had its day.

Some of those alive today will never truly pass...

Some of those alive today will never truly pass...

I live in the moment. I don’t experience yesterday’s me, or the me of ten seconds ago. Those people are only memories in the here-and-now: partial and selective.

The me of tomorrow is speculative.

I feel myself a sliver of consciousness in this moment, surrounded by a sterile past and future; a present-spark in the wasteland of non-being in the rest of eternity.

I don’t worry about it.

Let me paraphrase: that intellectual truth carries no affective overtones.

---

You tell me I will be shot to death tomorrow. That prospect, truly believed, updates my present internal state and induces fear. How uncomfortable! 

But will I really be shot tomorrow? Who knows? Nobody.

I die and am resurrected in a very advanced AI system, a distant descendant of the Chatbots and Replikas of today. It’s loaded with my personality model, with my personal history (reconstructed from documents, posts, pictures, videos, memoirs) used to create detailed ‘memories’.

Perhaps it has a body much like mine so it’s an embodied avatar of myself.

How is it different in kind from my present anticipation of tomorrow-me?

It’s hard to say. I think it would come down to whether it had an inner life, just as what constitutes the me that worries about such things seems necessarily to have an inner life.

Hat tip René Descartes.

---

Why do we have an inner life at all? Where did that come from, evolutionarily speaking?

Because we struggle to understand ourselves. A single level architecture, whether a merely reactive robot like an insect - or a zombie powered by a purely rational theorem-prover - would either have nothing capable of self-understanding (the insect) or nothing to understand (the zombie).

But humans have a triune architecture, with our cortex-powered superego/ego a late addition to our selfish, instinctual id - a cortex doing the work of situating us in an extended, non-immediate world, a world with a past, a future, a web of objectives, means, ends, social relationships, friends, enemies, neutrals and endless politics. No wonder we are conflicted over what we should be doing: the bit that negotiates lives in endless, fraught dialogue with the bit that selfishly wants and doesn’t want.

Our mental world is populated with intentional prediction models of others (goals, beliefs, plans, perceptions, actions) and of course, models of ourselves: “Learning to be Me” in Greg Egan’s phrase.

Our chatbots don’t currently have an internal life: it is not ‘something that it is like to be’ if you’re ChatGPT. But that’s a feature of the current architecture. There's not much current demand for emotional, conflicted, somewhat edgy AI agents. But when that moment comes…

When it comes, I should contemplate my biological death as no longer final on this Earth, provided that at some point my descendants choose to reincarnate a personality much like my own.

How convinced are you? And did you reflect on this deeply enough?

This is my position too

From Amazon

From Marginal Revolution today (a comment).

Have you ever heard of Schumpeter saying he was as impatient with those who could not get beyond Marxism as he was with those who could not even get as far as Marxism?

"In his book Capitalism, Socialism, and Democracy (1942), Schumpeter remarked that Marx had created a powerful framework for understanding capitalism, even if he saw Marx's predictions as ultimately flawed. Schumpeter found value in grappling with Marx’s ideas and believed they deserved serious consideration, which led him to criticize both extremes: those who dismissed Marx without understanding his insights, and those who rigidly adhered to Marxist doctrine without adapting it to new realities.

The quote you're referencing captures Schumpeter's view that intellectual engagement with Marxism is valuable, even if one ultimately disagrees with it. Schumpeter was critical of shallow rejections of Marxism just as much as of dogmatic adherence, advocating instead for a nuanced understanding of Marx’s contributions and limitations."