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stego-tech

History paints a pretty clear picture of the tradeoff:

* Profits now and violence later

* Little bit of taxes now and accelerate easier

Unfortunately we’ve developed such a myopic, “FYGM” society that it’s explicitly the former option for the time being.

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Do you have a historical example of "Little bit of taxes now and accelerate easier"? I can't think of any.

If you replace "taxes" with more general "investment", it's everywhere. A good example is Amazon that has reworked itself from an online bookstore into a global supplier of everything by ruthlessly reinvesting the profits.

Taxes don't usually work as efficiently because the state is usually a much more sloppy investor. But it's far from hopeless, see DARPA.

If you're looking for periods of high taxes and growing prosperity, 1950s in the US is a popular example. It's not a great example though, because the US was the principal winner of WWII, the only large industrial country relatively unscathed by it.

With the odd story that we paid the price for it in the long term.

This book

https://www.amazon.com/Zero-Sum-Society-Distribution-Possibi...

tells the compelling story that the Mellon family teamed up with the steelworker's union to use protectionism to protect the American steel industry's investments in obsolete open hearth steel furnaces that couldn't compete on a fair market with the basic oxygen furnace process adopted by countries that had their obsolete furnaces blown up. The rest of US industry, such as our car industry, were dragged down by this because they were using expensive and inferior materials. I think this book had a huge impact in terms of convincing policymakers everywhere that tariffs are bad.

Funny the Mellon family went on to further political mischief

https://en.wikipedia.org/wiki/Richard_Mellon_Scaife#Oppositi...

Ha, we gutted our manufacturing base, so if we bring it back it will now be state of the art! Not sure if that will work out for us, but hey their is some precedence.

This is the silver lining in many bad stories: the pendulum will always keep on swinging because at the extremes the advantage flips.

The dollar became the world's reserve currency because the idea of Bancor lost to it. Thus subjecting the US to the Triffin dilemma which made the US capital markets benefit at the expense of a hugely underappreciated incentive to offshore manufacturing.

You can't onshore manufacturing and have a dollar reserve currency. The only question then is, Are you willing to de-dollarize to bring back manufacturing jobs?

This isn't a rhetorical question if the answer is yes, great, let's get moving. But if the answer is no, sorry, dollarization and its effects will continue to persist.

I'll take a look at that story later. I'm curious though, why is US metallurgy consistently top-notch if the processes are inferior? When I use wrenches, bicycle frames, etc from most other countries I have no end of troubles with weld delamination, stress fractures compounding into catastrophic failures, and whatnot, even including enormous wrenches just snapping in half with forces far below what something a tenth the size with American steel could handle.

Which are these other countries? Have you tried something actually made in Japan, or in Germany, for instance?

What you describe seems like very cheap Chinese imports fraudulently imitating something else.

> I'm curious though, why is US metallurgy consistently top-notch if the processes are inferior?

I really wonder what you're comparing with.

Try some quality surgical steel from Sweden, Japan or Germany and you'll come away impressed. China is still not quite there but they are improving rapidly, Korea is already there and poised to improve further.

Metal buyers all over the globe are turning away from the US because of the effects of the silly tariffs but they were not going there because the quality, but because of the price.

The US could easily catch up if they wanted to but the domestic market just isn't large enough.

And as for actual metallurgy knowledge I think russia still has an edge, they always were good when it came down to materials science, though they're sacrificing all of that now for very little gain.

Also those old open hearth furnaces are long gone, see

https://www.youtube.com/watch?v=BHnJp0oyOxs

There are people making top quality steel in the US today by modern methods but it wasn't like the new replaced the old, the old mostly disappeared and we got a little bit of the new.

Yes, I should have been more clear there: they could catch up in volume but it will require a different mindset if they want to become a net exporter of such items.

To add a meta contribution to yours using anecdotes:

US pipeline for metallurgical R&D broken (by financial/cultural incentives)

This guy studied metallurgy in Carleton U, Canada, switched to CS, founded YC, emotionalized the decision

https://news.ycombinator.com/item?id=39600555

Who knows, he might have become John Carmack's John Carmack, building rockets better than Carmack or Elon

And yet, it could be done, I'm pretty sure of that.

> It's not a great example though, because the US was the principal winner of WWII, the only large industrial country relatively unscathed by it.

The US is also shaping up to be the principal winner in Artificial Intelligence.

If, like everyone is postulating, this has the same transformative impact to Robotics as it does to software, we're probably looking at prosperity that will make the 1950s look like table stakes.

Early on in the AI boom NVidia was highly valued as it was seen as the shovel-maker for research and development. It certainly was instrumental early on but now there are a few viable options for training hardware - and, to me at least, it's unclear whether training hardware is actually the critical infrastructure or if it will be something like power capacity (which the US is lagging behind significantly in), education, or even cooling efficiency.

I think it's extremely early to try and call who the principal winner will be especially with all the global shifts happening.

> The US is also shaping up to be the principal winner in Artificial Intelligence.

There is no early mover advantage in AI in the same way that there was in all the other industries. That's the one thing that AI proponents in general seem not to have clued in to.

What will happen is that it eventually drags everything down because it takes the value out of the bulk of the service and knowledge economies. So you'll get places that are 'ahead' in the disruption. But the bottom will fall out of the revenue streams, which is one of the reasons these companies are all completely panicked and are wrecking the products that they had to stuff AI in there in every way possible hoping that one of them will take.

Model training is only an edge in a world where free models do not exist, once those are 'good enough' good luck with your AI and your rapidly outdated hardware.

The typical investors horizon is short, but not that short.

Are you sure that in today's reality the fruits of the AI race will be harvested by "the people"?

"The 3 wealthy people"

> Taxes don't usually work as efficiently because the state is usually a much more sloppy investor. But it's far from hopeless, see DARPA.

Be careful. The data does not confirm that narrative. You mentioned the 1950s, which is a poignant example of reality conflicting with sponsored narrative. Pre WOII, the wealthy class orbiting the monopolists, and by extension their installed politicians, had no other ideas than to keep lowering taxes for the rich on and on, even if it only deepened the endless economic crisis. Many of them had fallen in the trap of believing their own narratives, something we know as the Cult of Wealth.

Meanwhile, average Americans lived on food stamps. Politically deadlocked in quasi-religious ideas of "bad governments versus wise business men", America kept falling deeper. Meanwhile, with just 175,000 serving on active duty, the U.S. Army was the 18th biggest in the world[1], poorly equipped, poorly trained. Right wing isolationism had brought the country in a precarious position. Then two things happened. Roosevelt and WOII.

In a unique moment, the state took matters in their own hands. The sheer excellence in planning, efficiency, speed and execution of the state baffled the republicans, putting the oligarchic model of the economy to shame. The economy grew tremendously as well, something the oligarchy could not pull of. It is not well-known that WOII depended largely on state-operated industries, because the former class quickly understood how much the state's performance threatened their narratives. So they invested in disinformation campaigns, claiming the efforts and achievements of the government as their own.

1. https://www.politico.com/magazine/story/2019/06/06/how-world...

BTW the New Deal tried central planning and quickly rejected it. I'd say that the intense application of the antitrust law in the late 1930s was a key factor that helped end the Great Depression. The war, and wartime government powers, were also key: the amount of federal government overreach and and reforms do not compare to what e.g. the second Trump administration has attempted. It was mostly done by people who got their positions in the administration more due to merit and care about the country than loyalty, and it showed.

The post-war era, under Truman and Eisenhower administrations, reaped the benefits of the US being the wealthiest and most intact winner of WWII. At that time, the highest income tax rate bracket was 91%, but the effective rate was below 50%.

What does WOII mean?

I assume you are talking about WW2 and at first thought it was a typo.

WOII is how dutch speaking/writing people would refer to WW2, it is literally 'wereld oorlog 2'.

> the state is usually a much more sloppy investor

I don’t find this to be true

The state invests in important things that have 2nd and 3rd order positive benefit but aren’t immediately profitable. Money in a food bank is a “lost” investment.

Alternatively the state plays power games and gets a little too attached to its military toys.

State agencies are often good at choosing right long-term targets. State agencies are often bad at the actual procurement, because of the pork-barrelling and red tape. E.g. both private companies and NASA agree that spaceflight is a worthy target, but NASA ends up with the Space Shuttle (a nice design ruined by various committees) and SLS, while private companies come up with Falcon-9.

Sounds like a false dichotomy. NASA got all these different subcontractors to feed, in all these different states and they explicitly gutted MOL and dynasoar and all the air force projects that needed weird orbits and reentry trajectories so the space shuttle became a huge compromise. Perverse incentives and all that. It's not state organizations per se but rather non-profits that need to have a clear goal that creates capabilities, tools and utilities that act as multipliers for everyone. A pretty big cooperative. Like, I dunno , what societies are supposed to exist for.

But DoD with its weird requirements, and the Congress with its power to finance the project and the desire to bring jobs from it to every state, and the rules of contracting that NASA must follow, are all also part of the state, the way the state ultimately works.

Development contracts for early SpaceX is also an example of NASA contracting rules in action though.

VC has failure as well as successes. State funding is no different.

The space shuttle was a symbol of hope for a future while I was growing up, and now it’s a symbol of our political and societal cowardice.

That we had to give up societal control over our space program to billionaires is deeply shameful. We’re quickly reaching the end of the end of history.

Yeah, our use of our military force provides some of the most obvious cases of "bad investment". Vietnam, Iraq, etc

And there are many others that might've been a positive investment from a strictly financial perspective, but not from a moral one: see Banana Republics and all those times the CIA backed military juntas.

I would argue that those bad investments (such an understatement!) were clearly lobbied for by the military-industrial complex. So yes, the state dropped the ball, big, on those. But that was because the private sector pushed for it, probably also in a big way. I would say that, even though the politicians were ultimately responsible for those calamities, the CEOs who greatly enritched themselves from them are absolutely to be blamed, too.

Miracle of Wörgl [0]

[0] https://unterguggenberger.org/the-free-economy-experiment-of...

Post World War II USA.

If that is not an example of how taxing rich people and investing in infrastructure can accelerate progress, then I don't what could be (with of course the caveat that those investments were focused in a specific group of people and not society as a whole).

Violence was a moderating factor when people on each side were equally armed, and number was a deciding factor.

Nowadays you could squash an uprising with a few operators piloting drones remotely.

Flying a drone around is easy. Identifying who is on the in group and out group and then moving them is the hard part.

I’m not sure you have really thought out what the drone part is meant to do. Militaries gave outgunned populaces for decades at this point. You don’t need drones to kill civilians.

It's actually quite easy. Whoever isn't in the bunker is the outgroup. You only needed to tell people apart when you needed some meatware to man the factories and work the fields.

Militaries can side with the crowd, or more likely decide to keep the power for themselves.

Yeah ruling juntas do need to "man the fields & factories" (1st order meatware), in order to produce and maintain those drones. Or nukes, or whatever "deciding factor beyond numbers" put them in power.

But they also need 2nd order meatware to support that 1st order: teachers, doctors, merchants… You need scientists to advance your technology against other militaries… You need leaders (3rd order) to keep the first two populations quiet and productive since that turns out to be more cost-effective than fear control through extermination…

Hell you need a certain level of genetic diversity so your own kids don't come out weird.

Give evolution a little more credit. The required number of humans for the in-group to be self-sustainable is definitely not billions, plus it's been shrinking with automation. But we are where we are for a reason – lots of alternative arrangements have been tried over millenia and found wanting.

"Keep my bunker + my drone factory and some farmers, kill the rest" leaves rulers with terrible quality of life (bad) and the next-door-junta taking over pretty quickly (also bad). It is a self-defeating, poor long-term strategy.

Automation tips the power balance further: fewer humans needed, more local autonomy. Which is, I suspect, why the ruling class are so terribly excited about AI, more so than some market valuations. Fewer pesky humans across all levels. Genetic diversity of bloodline remains the primary concern (unless you manage to live forever, which happens to be another evergreen of power ghouls).

Every possible example of “progress” have either an individual or a state power purpose behind it

there is only one possible “egalitarian” forward looking investments that paid off for everybody

I think the only exception to this is vaccines…and you saw how all that worked during Covid

Everything else from the semiconductor to the vacuum cleaner the automobile airplanes steam engines I don’t care what it is you pick something it was developed in order to give a small group and advantage over all the other groups it is always been this case it will always be this case because fundamentally at the root nature of humanity they do not care about the externalities- good or bad

COVID has cured me (hah!) of the notion that humanity will be able to pull together when faced with a common enemy. That means global warming or the next pandemic are going to happen and we will not be able to stop it from happening because a solid percentage can't wait to jump off the ledge, and they'll push you off too.

Yeah buddy we agree

If you edit your comment to add punctuation, please let me know: I would like to read that final pile of words.

I did try, I promise.

Ok here: Everything from the semiconductor through the vacuum cleaner, automobile, airplanes and steam engines was developed to give a small group an advantage over all the other groups. It has always been the case, it will always be the case.

Fundamentally, at the root nature of humanity, humans do not care about the externalities, either good or bad.

That's a slightly odd way of looking at it. I'm guessing the people developing airplanes or whatever thought of a number of things including - hey this would be cool to do - and - maybe we can make some money - and - maybe this will help people travel - and - maybe it'll impress the girls - and probably some other things too. At least that's roughly how I've thought when I make stuff, never this will give a small group an advantage.

But the whole point is embedded in the task otherwise you wouldn’t do it

If somebody is using monetary resources to buy NFT‘s instead of handing out food to the homeless then you get less food for the homeless

All of the things listed are competitive task situations and you’re looking for some advantage that makes it easier for you

well if it makes it easier for you then it could make it easier for somebody else which means you’re crowding out other options in that action space

That is to say the pie is fixed for resources on this planet in terms of energy and resource utilization across the lifespan of a human

Vacuum cleaner -> sell appliances -> sell electric motors

But there was a clear advantage in quality of life for a lot of people too.

Automobile -> part of industrialization of transport -> faster transport, faster world

Arguably also a big increase in quality of life but it didn't scale that well and has also reduced the quality of life. If all that money had gone into public transport then that would likely have been a lot better.

Airplanes -> yes, definitely, but they were also clearly seen as an advantage in war, in fact that was always a major driver behind inventions.

Steam engine -> the mother of all prime movers and the beginnings of the fossil fuel debacle (coal).

Definitely a quality of life change but also the cause of the bigger problems we are suffering from today.

The 'coffin corner' (one of my hobby horses) is a real danger, we have, as a society, achieved a certain velocity, if we slow down too much we will crash, if we speed up the plane will come apart. Managing these transitions is extremely delicate work and it does not look as though 'delicate' is in the vocabulary of a lot of people in the driving seats.

This is where the concept of trickle down economics came from though and we know that that’s not actually accurate

I used to hear about this with respect to how fun funding NASA would get us more inventions because they funded Velcro

No it’s simply that there was a positive temporary externality for some subset of groups but the primary long term benefit went to the controller of the capital

The people utilizing them were marginally involved because they were only given the options that capital produced for them

We have taxes now though, how much is enough?

Hint: The answer for the government is, it's never enough. "little bit of taxes" is never what we had.

Seriously though, I wouldn't mind "little bit of taxes" if there were guaranteed ways to stop funding something when it's a failed experiment, which is difficult in government. Because "a little bit more" is always wanted.

Every time I hear an argument like this one, it's always phrased in terms of "the government is greedy and/or incompetent, therefore taxes are bad" and never in terms of "the government is greedy and/or incompetent, therefore our systems of controlling our government are not good enough".

I didn't actually say they are greedy or incompetent.

Government starts a new program and funds it with taxes. First, it is difficult to prove if the program is doing what it set out to do effectively. Second, there is 0 incentive to ever shut it down. The people working there don't want to, the group who started it also don't want to. The people funding it have 0 insight or say if it should continue.

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