"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."

"The Robespierrean social justice terror blowing through Silicon Valley"

La nostalgie de l'Ancien Régime

"The Robespierrean social justice terror blowing through Silicon Valley ...".

Nice phrase (ugly reality). Marginal Revolution has some notes on US tech management.

Here are the top nine (of seventeen).

1. "Most tech leaders aren’t especially personable. Instead, they’re quirky introverts. Or worse.


2. Most tech leaders don’t care much about the usual policy issues. They care about AI, self-driving cars, and space travel, none of which translate into positive political influence.


3. Tech leaders are idealistic and don’t intuitively understand the grubby workings of WDC [Washington DC].


4. People who could be “managers” in tech policy areas (for instance, they understand tech, are good at coalition building, etc.) will probably be pulled into a more lucrative area of tech. Therefore there is an acute talent shortage in tech policy areas.


5. The Robespierrean social justice terror blowing through Silicon Valley occupies most of tech leaders’ “political” mental energy. It is hard to find time to focus on more concrete policy issues.


6. Of the policy issues that people in tech do care about—climate, gay/trans rights, abortion, Trump—they’re misaligned with Republican Party, to say the least. This same Republican party currently rules.


7. While accusations of deliberate bias against Republicans are overstated, the tech rank-and-file is quite anti-Republican, and increasingly so. This limits the political degrees of freedom of tech leaders. (See the responses to Elon Musk’s Republican donation.)


8. Several of the big tech companies are de facto monopolies or semi-monopolies. They must spend a lot of their political capital denying this or otherwise minimizing its import.


9. The media increasingly hates tech. (In part because tech is such a threat, in part because of a deeper C.P. Snow-style cultural mismatch.)

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There's a scenario in which a perfect storm is brewing. The Googles and Facebooks of the world are economically and ideologically aligned with a declining neoliberal project which only gets the more shrill as it loses out to the inchoate populism of the increasingly disaffected masses.

As popular discontent grows, the tech companies - deploying personal data and means of surveillance undreamt of by former elites - are increasingly available for repression (in a just cause of course). We forget how authoritarian regimes always spin out self-justification.

When social cohesion breaks down (and this is a feature of the political-economic period we're living through) left and right are equally tribal and nasty, each in their own way. In the end it's always human beings and their antagonistic group interests, dressed up in fancy ideologies.

Makes you nostalgic for the mid twentieth century, Les Trente Glorieuses.

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And here's an antidote to that.