Let's Reason

This is the holiday season that calls for acts of giving and philanthropy.  Both are commendable but to build fair and good societies we need more than reliance on individual generosity.  We need to turn our attention to those areas we perform below our true capacities and where we leave many of our fellow citizens behind and adopt policies that minimize pain and unfairness. This call to action is all the more imperative because we live in a country with no short supply of riches or creativity. 

Our lack of attention to the weak spots in our society is all the more glaring when compared to our enthusiasm for anything that relates to new frontiers of discoveries and opportunities for profits.  Our indifference may be explained by the belief that if there is general progress then everybody will be better.  Or by the attitude that in a free economy all those who wish to improve their lot can do so without the support of any public policies.

However, the persistence of certain social ills signifies that we need better collective action and better policies.  Here, I will focus on four areas of underperformance and unfair treatment that deserve our attention and action.

Poverty and homelessness.  We brag that we live in the richest country history has ever known.  However, in 2024 the official poverty measure showed that 10.6% or 36 million Americans lived in poverty.  And by the supplemental poverty measure 12.9% or 44 million of Americans were classified poor.  Poverty among children was even higher standing at 14.3%.  In a past blogpost, I had explained how poverty in childhood sets up children for adult lives with less educational attainment, poorer health, and higher crime rates.

A byproduct of poverty is homelessness.  A record 770,000 Americans are now homeless with 36% of them being unsheltered, meaning they live out in the streets.  And regrettably this number is 18% higher than in the previous year.

Our dismal record in poverty and homelessness is not due to the fact that America has too many people failing to do better but because, as Matthew Desmomd explains in Poverty by America, our policies are conducive to it.  Similarly, many homeless people are denied the conditions and breaks that would enable them to escape homelessness.  A recent book And Housing for All by Maria Foscarinis, a veteran advocate of homeless people, presents the causes and the blight of homelessness in America in full relief.

Health care.  It is well established that Americans live shorter and less healthy lives than people in peer countries.  Although costlier than in any other country, our health care system fails to deliver equal health care to all Americans.  Individuals and families without employer-financed health insurance face prohibitively expensive policies that force many to opt out or receive inferior coverage.  The current debate about extending the subsidies to buy health insurance under the Affordable Care Act and the failure of Congress to offer a solution highlights our collective failure to secure the right of health care for all Americans.

Education.  Despite the importance of education as a pillar of economic success and social mobility, we continue to perform unevenly across states as well as in comparison to foreign peers.  In recent years we have experienced declines in math and reading scores and our K to 12 educational system ill-prepares students for higher level studies.   

Poverty, homelessness, wanting health care, and subpar education are all connected in creating the conditions that lead to drug and alcohol abuse, suicides, and crime, all of which contribute to a lower level of collective wellbeing and safety.  Sadly, all three ills affect Americans unevenly with Black and Latino people bearing the brunt of our inadequate performance.

Care givers.  These are the Good Samaritans of our society that our economic and public policies fail to appreciate in tangible terms.  I am talking about the people who take care of our elderly, people with disabilities, and the infirm.  Care giving among humans is part of our biological evolution.  We are born unable to survive alone for several years without care from parents, grandparents, and even alloparents.  When we moved into organized societies, care giving was often delegated to slaves and servants.  Even in the modern era, we perceive care giving as done by those without better choices or out of altruism.  These convenient motives have led to underpaying some of the most vulnerable workers in our society.

If the value we place on receivers of care is reflected in the wages we pay their care givers, then America falls behind other countries.  I checked the wages of care givers in several countries and our very wealthy country ranks 9^th, behind Germany, Austria, Australia, Finland, Canada, and several other countries.  What is common in the countries that remunerate care giving better than we is that they have stronger welfare systems.

The interesting thing is that although care givers often receive subpar wages, the direct and indirect cost of care giving is quite high.  One thing we miss is that because of the malfunction of the care giving labor market, the families with elderly members or individuals with disabilities bear the brunt of a very high turnover and lapses in care giving itself.  Even when individuals in need of care are placed with professional agencies, families have to step in and fill in the gaps in care giving at an immense cost of direct expenses, lost work, and stress.  A recent estimate by the AARP placed the annual out of pocket expenses of family caregivers at $7200 with the value of their unpaid work estimated at $873.5 billion in 2024.

Another important aspect of care giving as a paid-for service is the asymmetry between the care giver and the cared for.  The elderly, the infirm, and individuals with disabilities are not in a position to transact with the care giver as independent decision makers to obtain the best care possible.  Nor can the families of the cared-for effectively monitor the quality of the care given.  And yet despite these asymmetries, the care giving labor market lacks the conditions in terms of incentives, professionalization, and social status to ensure that care giving matches the expectations of those who need it or those who pay for it.  The introduction of AI personal assistants interacting with human care givers will further complicate the conditions for proper delivery and compensation of care giving services.

Our capacity to create wealth, new science, and innovations are not enough to define what kind of society we are.  How effectively we reduce the blight of poverty, homelessness, sickness, and subpar education and how much we value care giving can tell a lot more about the character of our society.

May 2026 be a better year for all of us.

As good as we are in discovering, inventing, and innovating we may be worse in making sure we use our achievements wisely.  There may be an evolutionary explanation that prioritizes acting before thinking about what comes next.  Or we may trust that certain mechanisms in place will take care of any adverse effects.  And yet, it seems that humans have been aware of this flaw all along and have tried to forewarn us.  

Take for example the punishment Zeus inflicted on Prometheus for giving mortals the gift of fire.  Was Prometheus punished for defiance and disobedience or because Zeus (in the minds of humans) feared that they would not be able to harness the power of this new force?  Similarly, in Genesis, God punished Adam and Eve for disloyalty and defiance when they ate from the Tree of Knowledge.  What if, however, again the message here is that God wanted to protect humans from getting on a path of sinful acts that would take them out of Paradise?

And then, there is a historical fact that may again betray human disillusionment with new achievements.  That’s the case of Gobekli Tepe in southeastern Turkey.  Some 9000 years BCE, at the dawn of the neolithic age, a community of people erected the first monumental buildings we know of.  And yet, 2000 years later, the inhabitants of that area filled the buildings with sad and rubble and abandoned them.  Nobody knows for sure why.  Some say it was because of a cultural shift or because religious beliefs changed.  Or it could be that this new achievement fell short of the expectations of the people.  It took several thousands of years before the first cities with temples and palaces appeared in Mesopotamia and Egypt.  Was this long gap because people had learned something from their earlier exploits they did not want to repeat?

I came to these thoughts after reading a seemingly unrelated article about how some Asian countries (especially, Vietnam and Singapore) managed to deal with globalization in ways that posed less of a threat to their workers and their national identity.  They turned their openness to the world to an opportunity to upgrade their economies and competitiveness.  They invested in education and social programs and above all suppressed inequality by distributing the gains from economic growth more fairly.  In other words, they saw the potential risks and put in place policies to mitigate their adverse consequences on their national fabric.

Contrast this approach to our own here in the US.  In the 1980’s and 1990’s we deregulated our economy, primarily the financial system, and we moved full thrust into the globalization model.  We did this believing that the economy and the market mechanism would work as the textbooks teach.  The result was deindustrialization, the gutting of factory towns and the decay of the social fabric.  Should we blame globalization or our lack of forethought in planning for its adverse effects?  We now pay the price as we live through toxic politics that pit globalization against nationalism.    

Now we stand before another challenge, that of the digital revolution spearheaded by the development of AI.  By now a lot has been written about the potential risks, some of them characterized as apocalyptic.  Should we pause further development of AI or think seriously about the consequences and plan so that we reap the good and avoid the bad?  I fear that before we lose control to Superintelligence, we run the risk of ceding all consideration of the risks to a cadre of technocrats who feel entitled to decide for all of us. 

Putting guardrails around applications of new technologies and inventions is nothing new in the modern era.  We have done it with nuclear weapons, with numerous chemicals that go into our food or the environment, and very notably with biomedicine.  When gene editing was invented in the early 1970s scientists came together in the Asilomar (CA) Conference and set rules of self-regulation as to what was permissible research and applications.  When the Genome Project was developed in the 1990s, the US government set aside considerable funds from the budgets of the NIH (National Institute of Health) and the US Department of Energy to fund research and scrutiny of the ethical, legal, and social implications of gene editing.  Presently, there are restrictions on the editing of hereditary (germline) genes for the purpose of reproduction.

Therefore, we have the right to ask “Why can’t we apply the same forethought and, if necessary, restrictions to the development and applications of AI?” Of course, we know the answer.  Unlike those other areas of grave interest mentioned above, today’s research in AI and its applications has been captured by a few mega companies which by monetary and political means have managed to leave concerned politicians and the rest of us out of any meaningful planning and discussion.

This inaction is not for lack of the legal or institutional framework.  First, we can use regulation under the principle “Do no harm.”  Just like we restrict the use of medications or chemicals if they pose risks, we can also restrict and even prohibit digital technologies, including AI, if they are likely to be dangerous to human lives, health, and the social fabric.  If we have laws that prohibit driving without an official inspection, shouldn’t we prohibit the sale of a robot or virtual assistant that can harm its user?  Numerous experts have called for a careful examination of AI-related risks.  Many of them have called for a pause until we know the full consequences of advanced models of AI.

We also have the tools to curtail the power of technocrats in shaping our future.  Consider first the role of corporate governance epitomized by the powers vested in corporate boards.  As they operate now, they are staffed with directors who practically serve at the pleasure of the chairman and CEO or a dominant shareholder.  We need to seriously consider revamping corporate governance so that the public interest is represented where firm size or the type of a firm’s business raises the stakes for all of us.   

Next, the market for corporate control, that is, the mechanisms under which firms are allowed to take over other firms must be strengthened and be applied as the laws originally intended.  Unfortunately, recent litigation of anti-trust cases has foundered under a permissible stand by courts that has allowed mega-firms like Meta and Google to continue their predatory tactics of either eliminating their competitors by absorption or locking customers into their product ecosystem.

The reality is that despite the messages from myths or religious texts humans will continue to discover, invent, and innovate.  However, our successful coexistence with our achievements will be possible only if we exercise wisdom in how to use the products of our intelligence.

In my last blogpost, I referred to the gap that exists between our progress in material prosperity and technological progress on the one hand and human work on the other.  That is, despite our many achievements, we still live in a world in which a healthy balance of work and leisure is unattainable, jobs leave many people unfulfilled and worse yet unable to meet their needs. 

Back in the 1930’s, John Maynard Keynes had speculated that technological innovations would usher in a life of leisure and prosperity for workers.  And yet, despite countless innovations since then, this remains an elusive dream.  But now, if the optimists about the potential of AI are correct, human work will face new uncertainties when robots and virtual assistants replace human workers.  Which raises the question “What jobs and how many of them will be left for humans?”  This could be the latest in a long series of transformations of human work.  Each major transformation has been followed by significant civilizational changes.  Now we stand before one more such possibility.  So why don’t we give it some serious consideration?  After some reading and reflection, this is what I would like to share on this subject.

The move away from direct production.  Farming was the first major innovation that removed humans from direct production (hunting and gathering) to bureaucratic jobs for record keeping, storage, organizing and planning.  All that was possible because farming generated enough food surplus, that is, energy, to feed and sustain the bureaucratic or administrative class.  Then came mechanization and fertilizers that raised farming productivity, producing a surplus of farm workers who moved on to the factories as capitalism emerged as the new economic organizing order.  And then all the way to us, more technological progress (automation and robotics) released increasing numbers of manufacturing workers who had no choice but to become part of the service sector of the economy. 

Today, about 75% of workers are employed in the service sector of advanced economies.  Although many of them are engaged in the direct production of services (nurses, teachers, firefighters, hospitality workers) perhaps half of them hold desk jobs.  For example, it is estimated that only 30% of workers in the health care industry are involved in direct service work.  And in higher education in the US, the ranks of administrators have mushroomed at a much higher rate than that of faculty lines.

Now after the gradual removal of humans from hunting and gathering, farming, and industrial work, the service sector itself is faced with the replacement of humans by AI innovations.   To remain oblivious to the civilizational changes such work transformations caused in the past would be inexplicable as the impact of AI will certainly be equally consequential.   

The growth of work and jobs.  If historically the amount of work grows and leisure remains elusive it is because of the unending growth of needs and the impact of innovations.  Keynes, again, had grouped needs into absolute (for food, health, and shelter) which are quite finite and relative needs which tend to grow with no end.  Therefore, it seems that the amount of work grows mostly out of the growth of relative needs.  Not only they create new work but they also compel people to work more to meet them.  Innovations also create more work because not only they inspire or enable new relative needs to be met but also because they create negative externalities (financial crime, cybercrime, pollution) as well as complexities (unforeseen changes and shocks) that must be managed.  For example, we had no idea how social media would reshape social relationships and affect the psychological health of young people.  The more complex our ecosystem becomes the more work and especially energy we need to use to avert catastrophic outcomes.

The value and pay of work.  Living in market economies has conditioned us to believe that the value of work and its price or remuneration are determined by market forces.  Normally that would mean that the price (wages) of labor is close to its value.  But how is this value set? By market or social standards?  Shouldn’t the work of those directly involved in the production of basic products and services be valued more than those who stand behind filling all those administrative jobs?  Why do we become aware of the social value of a farmer or a nurse or a medical emergency worker during periods of crises when our basic (absolute) needs for food, health or life, are threatened but we forget their value as soon as the crisis goes away?   

It seems to me that the value of work has less to do with its social value and more with the values of power centers.  Or put in a different way, the social value of work becomes what power centers want it to be.  In the old days these were the monarch, the nobility, or the Church.  But in the modern economy we have seen the emergence of a new power center, that of the industrial-tech-financial complex.  It is served by cadres of executives and managers looking out for economic efficiencies and profit maximization.  They are now those who sit at the apex of the hierarchy of power and privilege.  Modern societies, even communist China, have entrusted them to manage and innovate, introduce new needs and products, create and cancel jobs, and dictate how work is done. 

The value of the managerial and executive class saw a dramatic appreciation when in the 1980’s the concept of wealth was linked to the value of the firm, and more narrowly, the value of the firm that belongs to shareholders as equity.  There is a direct line that explains how one thing begets another.  This line starts with emphasis on wealth (shareholder value) creation and continues with the search for economic efficiencies, the need for technological and managerial innovations, and ends with the indispensable executives and managers as the safeguards and creators of wealth.  Accepted in this narrow sense, wealth creation is the source of the inordinate social value bestowed upon the executive class.  No wonder it commands pay packages many times higher than the wages of workers.  Direct-production workers who form the bulk of the working class have been especially left behind in this arrangement.  Their jobs have been downsized, consolidated, outsourced, and blocked from having a voice through unions.  The social outcome of this neglect has been the loss of work dignity and social cohesion.  The political outcome is the current wave of populism and discontent though out the Western economies.

Unless we take a fresh look at what economic goals societies ought to pursue, what determines the social value of work, and what the role of work is in relation to our human nature, we risk walking into a future shaped exclusively by the vision of those few who control the technologies and not by the many who will bear the consequences.

In May 2024 Nicholas Kristof wrote an opinion piece in the NYT that included the statement “The truth is that if you had to pick a time to be alive in the past few hundred thousand years of human history, it would probably be now.”  Kristof is well known for his journalism in the service of humanitarian causes around the world that has helped raise our awareness for all the good and bad of human behavior and experience.  So, if I choose to offer a critique of his statement is only because it raises interesting questions about how we make judgments about our human achievements and failures.  By what criteria, to what end, and by whose perspective.

The first thought that comes to mind and one I have floated in a past blogpost is this: If we have not lived in past times how can we tell whether our times are the best ever?  To answer a question like this, we first need to have some benchmark against which we make comparisons; and, second, we need to set the criteria by which we decide how close we are in meeting the benchmark.  Neither of these – benchmark and criteria – offer themselves to easy answers.   

So how can we tell humanity is at its best state?  Should we set a benchmark relevant to the human species or to the whole natural world?  Are we going to apply an individual or a collective benchmark?  Since ancient times philosophers and religious thinkers have dealt with such questions.  One answer is that humans attain happiness when they live the “good life.”  But what is the definition of the good life?  Is it enough to define it as a set of virtuous behaviors without accounting for the subjective experience of humans?  Even the normative definition of the good life differs across cultures in the same era.  It has also varied within cultures over time.  In the Western tradition the good life has been understood differently during the Greco-Roman times than during the medieval times under the influence of Christianity.  And it changed under the influence of the Enlightenment as it has in our times.   And if we push the historic horizon further, we need to reckon with what the good life was for our hunter-gatherer ancestors.  

Until the industrial revolution the good life was primarily defined by moral markers.  Then gradually the good life came to be mainly identified by indicators of material wellbeing.  As a writer put it the task of defining the good life moved from the philosophers to the marketers.  Thus, GDP per capital, educational attainment, health, life expectancy, literacy rates, new discoveries are among the most popular criteria we use to judge the quality of human life.  And it is true that in all these measures we are doing better now than in previous periods of human history.  Does, however, progress in all the above measures result in experiencing the good life? Aren’t we confusing means for ends?

Even setting apart the above difficulties, when we proclaim our times as the best ever for humanity, we run the risk of ignoring the price we pay for our modernity.  We also run the risk of glorifying our present economic and social arrangements and losing interest in seeking better ones. 

A little more than a century into the industrial revolution, at the turn of the 20^th century, the eminent sociologist Emile Durkheim developed the concept of anomie, a state of weakened social bonds and individual alienation, as the consequence of rapid social change under the influence of material and scientific progress.  If anything, social cohesion and individual interconnectedness have declined since Durkheim’s days.  A World Health Organization report shows that in a world of eight billion people, one billion suffers from some mental disease and only a fraction lives in countries where professional help is available.  Loneliness, in particular, is fast becoming a social illness, especially in the US, contributing to diminished lives. 

Material abundance also comes at a significant cost to its producers and our planet.  Technology was supposed to ease the burden of labor and free time for nobler occupations.  On the contrary, work remains a source of stress and unfulfillment.  Global survey data show wide-spread job dissatisfaction and falling worker engagement with their jobs.  A recent opinion piece in the NYT, had the sobering heading “Young Workers Are Miserable for Good Reason.”  Among other evidence, it referenced a study by the National Bureau of Economic Research which found that despair among young workers has reached dangerous levels.  The rapid growth of wants and the relentless pursuit of economic efficiencies translate into more work and less fulfilling and enjoyable conditions.

And while we try to meet the demand for greater consumption, much of it often excessive, the more we degrade the natural environment and contribute to the demise of our ecosystem.  Ten years ago, the world set the maximum rise of global temperature at 1.5 degrees Celsius by the end of the century.  Recent measurements show we have already warmed the planet by 1.3 degrees.

Since the end of the paleolithic period about twelve thousand years ago, our remarkable achievements have moved us from a state of being threatened by the forces of nature to a state where we are a threat to nature.  Ironically, though, we now stand at the cusp of being threatened by our own scientific prowess.  This is due in big part to our failure to match our cognitive and scientific progress with the necessary moral courage to harness our extraordinary discoveries for the good of all humanity.  Even now, too many of our fellow men and women are oppressed, too many die in wars and violence, and too many live in poverty. 

Finding happiness in the good life as a species will continue to be elusive and will hardly mean the same thing for each one of us.  As a writer put it, it requires space for individual fulfillment while holding us all together.  To accomplish that we need the courage to change course when necessary.  Against all the mental numbness created by our present predicament of material and technological abundance we should resist being trapped into thinking we have no other alternative. 

History shows that diverse democracies are not easy to build or endure.  Many of them devolve into majoritarian rule, or domination by a powerful minority, or break down.  The survival of a diverse democracy becomes even more perilous at times when economic and technological developments further heighten insecurity and erode social solidarity.

This is the state in which many Western democracies find themselves right now.  Existing diversity or the prospect of diversity in the wake of mass migration, along with the failure to produce shared prosperity, amidst transformational technological advances, are at the center of radical political shifts that favor polarization and threaten the future of liberal democracy.  Diversity (ethnic, religious, racial) and insecurity driven by economic and technological dislocation are conditions that in fact normalize polarization.  To overcome it we need to develop a mutual understanding as to what these conditions mean for everyone and then find and promote more inclusive solutions.

This seems to be the message in Yascha Mounk’s valuable book “The Great Experiment: Why Diverse Democracies Fall Apart and How They Can Endure.”  Diversity is challenging because it triggers the human tendency for groupthink that separates people into Us and Them.  Ethnic origin, religion, and race are the usual drivers of such separation into groups.  Mounk suggests that to give primacy to the authority of groups over the rights of the individual is dangerous for democracy and its underlying liberalism.  This is so because the respect for rights shifts from the individual to the group so that in the end a democratic state is less an association of citizens and more an association of associations, which can lead to fragmentation.

The challenge of diversity originates when a dominant group in a democratic state (like the Western European White Protestants in the case of America) start feeling that their cultural, religious, and political power is threatened by new incoming groups.  In other words, the dominant group puts more stock in the prospect of ending up with a state of competing interest groups than in the prospect of coming together under a common set of civic values and national aspirations.  The fear of the consequences of diversity has been part of America’s history since the emancipation of Black people and has continued as waves of immigrants have added to the diversity of the country. 

In recent decades feelings toward diversity have created a great deal of tension for American democracy as the specter of a soon to materialize majority-minority demographic reality is supposed to put an end to the power of White America.  Against this oft-repeated prediction, Mounk argues (and the evidence supports him) that the promotion of the majority-minority demographic inevitability is the most dangerous idea in the current context of American politics.  It is dangerous, first, because it incentivizes those who value the present White majority to resort to measures that thwart the voting rights of those who are assumed to be part of the majority-minority.  And, second, because it engenders strident opposition to immigrants who are projected to become members of the majority-minority.

Both Republicans and Democrats are to blame for promoting the inevitability of the majority-minority prospect.  Republicans use it to galvanize a base of citizens who by their socio-economic status are most vulnerable to any competition from new comers.  The Democrats have relied on the same prospect (that presumably favors them) at the expense of paying attention to the real issues faced by working-class Americans.  The interesting thing though is that reality is proving both Republicans and Democrats wrong.  Growing numbers of voters who are part of the majority-minority are showing to be a much more fluid political force, thus, undercutting the belief that a future majority-minority will advantage the Democrats.  Since 2016 greater, than previously, percentages of minority voters have shifted to the Republicans than the Democrats and especially when it comes to the presidential ticket.  This fluidity in political choices is good for the American democracy and good for the country.  Nothing can kill a democracy faster than the fear of a group of citizens that they will for ever be excluded from power.

The reality on the ground, Mounk argues, should give us optimism that diversity does not undermine social cohesion and patriotism.  Within a few generations new immigrants integrate themselves in their new country whether it is in a linguistic and educational sense or social mobility.  And they do not lag other Americans in their trust of national institutions.  Mounk argues that neither the “melting pot” (implying full assimilation) is realistic nor the “salad bowl” (remaining distinct of each other) is desirable.  Instead, he proposes that we all meet in the public square of civic engagement in pursuit of the common core values of American democracy of justice, liberty, and dignity for all.

Nonetheless, we need to understand that diversity at a time of economic insecurity and transformational technologies are valid factors in explaining the concerns and fears of those who are the most vulnerable to them.  It is also understandable why free trade, mobility of jobs, and technological innovations are less threatening to those who by education and skills or family privilege can navigate a fast moving and complex world.  But if these “privileged” classes are to preserve a democratic and liberal order, they ought to recognize the predicament of those who feel threatened and work together to realize win-win solutions.

Democracy is a difficult political system because it demands of its citizens to have a high degree of trust that their fellow citizens will respect their rights and that the power to govern is a possibility open to all.  This trust is not easy to maintain when waves of demographic, cultural, economic, and technological changes recast the relative power of different groups of citizens.  The faster these changes happen, as the case is in advanced countries, the more the loyalty of citizens to democracy is tested. 

To avoid a rapture, we need to try to understand each other’s fears and aspirations.  This has a greater chance to happen in societies where civic engagement brings together people from many and diverse walks of life.

Depending how one approaches the current evolution of economic and political power, we are told that we are moving toward a new era which has been variously called feudal or oligarchic capitalism, technocracy, and techno-polarity.

The terms feudal and oligarchic are used to signify that a limited number of individuals and companies have amassed such inordinate economic power that their relationships with the state resemble the feudal structure of economic and political power in medieval times.  The terms technocracy and techno-polarity more narrowly locate the center of the emergent powers in the circle of Big Tech companies that dominate the digital economy and are spearheading the research and development of AI. 

The main factor that has contributed to the new unfolding order is the undisputed concentration of economic power.  Such power can accumulate in the hands of businesses in the form of market power and/or in the hands of individuals in the form of personal wealth or control over corporations.  An article in the NYT times published two years ago reported that concentration of market power in the top 1% of firms in all sectors of the US economy had climbed to 97%.  The respective percentages were 96% in finance and 95% in manufacturing.  These numbers were at least 20 percentage points above their 1940 levels.

Concentration in financial assets is particularly important for the direction of the economy since those who control funding decisions serve as gatekeepers of new investments.  Equally important is their ability to influence the composition of corporate boards and through them corporate policies in relation to workers, the climate, and social responsibility.  As of this year, 2025, three finance firms, BlackRock, Vanguard, and State Street, had amassed $28 trillion under their management.  For perspective, the total US market capitalization stands at about $62 trillion and the global market capitalization is around $127 trillion.

The concentration of power is also extreme at the personal level.  Currently, 10% of Americans own 90% of stock value with just 1% owning 50%.  Furthermore, when it comes to controlling the direction and policies of the most powerful firms in the world, the leaders of the Big Tech firms (Amazon, Apple, Meta, Microsoft, Tesla, Nvidia, Oracle, and OpenAI) operate with what comes very close to unchecked corporate power.  These firms control or support the infrastructure of the digital technology behind social media, internet search engines, the collection of personal data, and the development of AI. 

The consequences of this unprecedent concentration of power are all around us in their multifarious manifestations of extraction of economic and political benefits and influence very aptly described by Joseph Stiglitz in People, Power, and Profits.  But what is more worrisome is the emerging tendency of technocrats to claim for themselves the primary role in setting the future of societies.  Such views are even expressed in manifestos advocating for example that the future of the West depends on building “a technological republic.”  Not content in just developing and profiting from innovations, technocrats have become desirous of running global empires (in the words of a recent NYT opinion piece) beyond the reach of nation-states.  The Big Tech has effectively used its influence to allow a very open field in the US and is pushing back on regulations imposed in the European Union.  According to the author of this article, tech businesses demand the freedom “to seize land, operate their own currencies, reorder the economy, and remake our politics with little consequence.”

It is this emerging power of technocrats that is reflected in Ian Bremmer’s essay “The Techno-polar Paradox: The Frightening Fusion of Tech Power and State Power” (Foreign Affairs, May 13, 2025).  The allure of AI technology to states is that it develops powerful tools for the surveillance of citizens and the control of information that can ultimately lead to the curtailment of basic civil liberties.  Bremmer argues that the US is already headed for a hybrid techno-polar world in which technocracy will claim an increasing share of operations and privileges that traditionally belong to the domain of state powers and responsibilities. 

The enormity of the ambitions of the technocrats is only matched by their hubris as to what they can deliver to humanity.  However, experts on the tech as well as the economic side have expressed serious doubts and warnings about these promises.  First, despite the fast inroads in digital and other technologies, the past few decades have failed to deliver broad economic benefits for Americans.  Labor productivity has been growing more slowly in the post 20^th-century decades, the middle class has shrunk, and economic gains and wealth creation are not fairly shared.  Technological progress alone cannot deliver societal benefits without shared objectives.    

Also, despite the undisputed great contributions of technology and science to medicine, biotechnology and other important fields, the Big Tech business model continues to be focused on the development of algorithms that control our attention, confine us in echo chambers of biased news and opinions, and promote an insatiable consumerism as the core of human prosperity.  We already see that leading AI firms are investing heavily in this retail type of business of personal assistants, virtual therapists and friends, and curiosity-satisfying platforms where the big ad revenue lies.

Even after we set aside the worst fears about the potential consequences of AI for humanity, the public faces the prospect that a few firms and individuals will call the shots about our future.  In democracies the role of the state, which governs for the people, is to align as best as it can the private interest with the public interest.  If, however, the new Robber Barons of the economy and technology capture the levers of power from the state or do so in collaboration with the state the rest of us will become mere spectators or, should we say, passengers on a ship or train whose direction is not in our hands as it should be.

In a recent article in the NYT, David Brooks called class-based segregation a scourge.  To be precise he used the phrase class self-segregation by which I suppose he meant classes have willingly chosen to live apart from each other.  The truth, however, is that the upper classes of America have pulled themselves away from the lower class of less educated and blue-collar Americans.

Segregation is nothing new in American society.  Its most persistent form has been built on racial differences.  Even after a series of laws brought down the legality of race-based segregation, it continues to persist by other means.  Race-based segregation in housing is one of the most enduring forms.  Even the New Deal did not correct this.  Between 1934 and 1962 White families were allocated 98% of the government-backed loans.  And after the passage of the Fair Housing Act in 1968, red lining continued to impede the integration of Black and White Americans.

Brooks is correct though to point out that over the past three decades we have seen segregation to also grow across social classes.  It has grown in multiple fronts.  In home location; in health conditions; in educational achievement; in incomes and wealth; and in social mobility.

Housing is a major factor in the divergent lives lower- and upper-class Americans experience. Zoning laws are the most common method used to leave lower-income people out of prized city neighborhoods or suburbs.  By preventing construction of multi-family units, zoning laws limit home supply and reduce home affordability.  In their book Abundance Ezra Klein and Derek Thompson write that compared to its European peers America is a home poor country with much fewer dwellings per 1000 residents than, say, France or Italy.  The inconvenient truth is that some of the most restrictive zoning laws that limit home supply can be found in liberal cities.

So, the lucky ones who happen to live in privileged places enjoy better schools and higher quality public amenities from parks to public safety.  Better schools from pre-K to high school give children of these families a leg up in landing in highly ranked colleges.  That then becomes the ticket to better networking, better-paying jobs, and higher social status. 

Studies have shown the negative effects of growing up in communities with uneven means and opportunities for educational, cultural, and social growth and development.  For example, the college premium in income is 70% in the US versus 40% in European countries.  This is so because less educated Americans end up in jobs that by the working of our economy pay considerably less than jobs requiring a college degree.  In other studies, children coming out of poor places are much more likely to get stuck in a lower income class than children out of better-off communities.  Thus, a kid’s place of residence becomes destiny.  Another study has shown that children that move to a better location achieve a lot more in their adult life relative to children that remain behind.  What has been found to matter the most for social mobility is to live in places along-side successful people that can serve as role models and more importantly as mentors.  If zoning laws or poverty separate you location-wise from these opportunities, you end up behind.

As others have pointed out, Brooks agrees that the interaction of Americans across different classes has declined in various areas, like civic organizations, places of worship, recreation (“bowling alone” is a famous phrase in this relation) and I would add serving in the military after the end of the draft in 1973.  To overcome these realities, Brooks suggest that better-off Americans make an effort to interact more with their less fortunate fellow citizens.  Others have proposed a more radical solution.  A one-year national service in the spirit of Americorps for high school graduates, so that they can become better informed about those who live on the other side of the tracks.

As sensible as these suggestions may sound, I am very skeptical they are likely to come to pass in present-day America.  And I don’t believe the reason is the political polarization we live through now.  Our polarization is rather the symptom if not the result of our segregated living experiences.  At the core of our problem, I see a social ethos which emerged in the 1980s and prioritizes individual financial success over social cohesion and building a common sense of belonging.  This makes the opportunity cost of social integration rather high to those with the ambition to climb the economic and social ladder or maintain their upper class status.

This argument suggests that when a home, beyond being a shelter, becomes an investment asset, creating scarcity is one way to raise its value.  The inadvertent result is the clustering of families by affordability which limits class interaction.  Rich families send their children to private schools and elite colleges not necessarily to keep them away from the children of poor families but because that’s where networking with similarly well-placed families increases social exposure and future professional opportunities.  For a similar reason, interacting and socializing with lower income and status people in civic organizations and places of worship is time taken from hobnobbing with influential people that can open-up opportunities for further economic and social gains.  Adopting a national service program or more drastically the return of the draft also represents an unacceptable opportunity cost to upper class families because it would delay the advancement of their children or even worse put them in the line of fire.

So, what I am arguing here is that in present-day America we are incentivized to live and act in ways that increase the advantages that are consistent with the prioritization of individual financial and social success.  What has receded over the past decades is our appreciation of a more egalitarian society in both rights and responsibilities in favor of what the academic Peter Turchin calls the overproduction of elites.

As long as those of us who are successful and more affluent can afford to separate ourselves from the problems faced by those who bear the brunt of governmental policies or economic developments, we will continue to live separate lives.  When consequences and responsibilities are borne more evenly, then we can start developing a more unified sense of the common good.

If we look at political systems, international disputes, or the use of technology, we find that the opportunities and possibilities for people to exercise free choice and free speech and expression have undergone a noticeable decline.  I view this to be the result of moving further away from relying on persuasion and discourse and resorting more to coercive means.

This view is backed up by evidence.  Global violence and war – the main means of hard coercion – are at their worst level since World War II according to Vision of Humanity.  it is a sad and disappointing state for humanity that almost eighty years after the founding of the United Nations neither the inviolability of national borders nor the rules and laws governing the conduct of war and the protection of civilians and human rights seem to carry any sway. 

Conflicts in the Democratic Republic of Kongo, Sudan, Ukraine, and the Middle East have seen disturbing and disastrous patterns of violence against civilians.  But even the core causes of the conflicts themselves betray a lack of willingness to settle country or ethnic grievances through negotiation and dialogue.  In all cases, there is an absence of global cooperation as to how to stop atrocities and bring parties to negotiations.  What we see instead is the opportunistic and most often the selective application of rules as countries coalesce into partisan groups. 

Turning to the global state of the freedom of expression, the Global Expression Report finds that freedom of expression through speech, the press, and the internet, which represent means of persuasion, has experienced a decline in recent years.  As a result, 5.6 billion people live in “crisis” or highly restrictive environments as the Report puts it.  The same Report ranks the US 21^st, whereas a look at One World Data reveals that in freedom of expression the US lags most western democracies. 

The good news is that a majority of people still value the right to free expression.  In a survey of 35 countries (all with democratic systems) by the Pew Research Center 61% of respondents consider freedom of the press, speech, and internet very important.  However, only 35% of the respondents believe these freedoms fully exist in their respective countries.  Thus, there is “a freedom gap” between the aspired and realized freedom of expression.

The decline in the perceived loss of freedom of expression is mirrored in the retreat of civil rights, protection from the state, the conduct of free and fair elections, and civic engagement.  According to One World Data, this reality is reflected even in surveys in Europe, the US, and South America, where most people live under democratic governance.

When people realize that basic freedoms and rights are restricted their faith in democracy starts to crack and weaken.  In surveys of 12 western style democracies, including the US, the Pew Research Center had found that in 2017 equal percentages of people (47%) expressed satisfaction and dissatisfaction, respectively, for democracy.  In 2025 the responses had swung decisively, with only 35% of respondents expressing satisfaction while 64% expressed dissatisfaction.  In the US the percentage of dissatisfied respondents was 62% vs 37% of those satisfied with the state of American democracy. 

Very tellingly, the above survey found a strong correlation between dissatisfaction with democratic governance and negative feelings about the economy.  Very likely, the responses concerning democracy are influenced by the feelings of discontent driven by a lopsided distribution of income and wealth that favors a few at the expense of the many.

Economic woes, cultural issues, and feelings of nativism are mostly responsible for the polarization in many western democracies.  Thus, both soft and hard coercion is on the rise as ideological groups resort to it to dominate and silence their opponents.  Filled with grievances fueled by the perceived dominance of liberal and elite groups, conservatives and religious groups have responded by enlisting the force of the state as a way to redress the imbalance.  This pattern has engulfed even the US where free speech and dissent, academic freedom, as well as evidence-based science and medicine have been encroached at the state and the federal level. 

However, the most dangerous and tragic escalation in the use of coercive means is the resort to physical violence against human life.  Regrettably this country has a sad record of politically-motivated assassinations or attempts against the lives of opponents.  From Lincoln, to John Kennedy and Martin Luther King, all the way to the string of violent and fatal incidents of the past five years – Charlie Kirk being the latest victim – American democracy has paid a huge price in blood.

Our world is getting richer, at least at the aggregate, and more technologically advanced than ever before and yet it seems to me the humanistic urges of our species are in retreat.  As we are tested again and again we seem to choose coercion over persuasion.  Even the brilliance behind AI may end up to become one more tool in the service of coercion than of enlightenment and persuasion.

Unless we reexamine our private and political lives, we are likely to let political, social, economic and technological structures make persuasion and freedom impossible to survive.

Let’s assume we really manage to deport all undocumented immigrants from our country.  Will we have solved this problem once and for all?  The historical record as well as global trends show this will not happen.  Resorting to politics of raw emotions and fear, as we do now, cannot provide sustainable solutions.  I am afraid the means used to curb unlawful immigration are more damaging to our personal and national soul and values than the relief we are promised from ridding this country from its millions of undocumented immigrants. 

First, let me say that a state of open borders and the presence of large numbers of undocumented immigrants are legitimate concerns.  But as in all other cases of law enforcement, undocumented immigrants should be treated with the due process mandated by the Constitution and in the spirit of the origin story of this country as a nation of immigrants.  Neither of this is now happening.  In a democratic country the means of enforcing law and order  count as much as the objectives.

To begin with, the festering immigration problem is the result of timidity and political calculations on part of the Congress which has repeatedly abrogated its responsibility to adjust our immigration laws to contemporary realities.  This failure of the political system has removed the immigration issue from the realm of reasoned deliberation to the realm of raw emotions.  Thus, what should be debated as an opportunity and a resource is debated under the emotional fear of Us versus Them.   We know very well that the distance between considering others as We to considering them as They is littered with hateful and dehumanizing language.  It is only when we debase immigrants as human beings and reduce them to an amorphous threat to the nation that we feel justified to deprive them of the protection of the law and due process. 

History shows this is not new in America.  At various times Americans have turned against their compatriots and potential immigrants out of irrational fears.  Thus, we had the Chinese Exclusion Act in 1885 that banned the immigration of Chinese workers, the National Origins Quota System of 1924 that placed restrictions on the immigration of people from Eastern and Southern Europe, and the Japanese American internment during World War II.  Ironically and irrationally, once a group is safely entrenched in this country it tends to view new comers with the same suspicion they faced upon their own arrival here.  The serial spasms of hostile reaction have been directed against Catholics, Jews, Latinos, Asians, Muslims, and other ethnic and religious groups that over time have made their way to America. 

In all cases, however, and after we have been consumed by ethnic and racial fear and debasing language, we discover that each new wave of immigrants brings revitalization and talents as well as new cultural elements – music, dance, and foods – that become part of our national tapestry. Which shows our loss of faith in new immigrants is unwarranted and, worse, embarrassing in its shortsightedness.

It is out of this mosaic of peoples from around the world that we have woven our national narrative of this country as a new experiment in human coexistence and a multi-cultural democracy.  The central piece of this narrative is that people come to America in the pursuit of three basic freedoms.  The freedom to dissent, the freedom to shape a new future, and the freedom to move.  That’s what motivated the Puritans to sail across the Atlantic and that’s what still brings foreigners to our doorstep.  Which suggests that those who come to America flee from countries where these freedoms are in short supply.  Unfortunately, even now there are lots of places around the globe that fit this description thus generating new waves of immigrants headed our way.  That’s why every time we think we have solved our immigration problem we are soon faced with a new one.

The last successful attempt to address immigration was during the administration of Ronald Reagan in 1986 with the passage of the Immigration Reform and Control Act.  This law legalized 2.6 million undocumented residents living in the U.S.  With no laws enacted since then and no further legalization of immigrants – even those who have proven their contributions to this country – the undocumented immigrants now number over 12 million.  In forty years, this nation moved from being pragmatic about immigrants to treating them like miasma. 

Right now, we have two problems and we are failing in both.  First, we have failed to take a pragmatic approach and start addressing the immigration issue as a resource for our economy and a way of reversing our demographic decline as our population keeps getting older.  Second, we are walking away from initiatives that can improve economic, health, and public safety conditions in the parts of the world that generate the waves of immigrants.  These areas include our continental neighbors to the south and most importantly Africa.

Africa, in particular, is projected to experience the biggest population growth, doubling its size to about two billion people by the end of the century.  If economic and human development  conditions do not keep pace with population growth where do we think Africa’s poor, unsafe, and destitute people will go?  They will head for Europe and the US.  Which means, it is in the interest of the developed West to assist Africa to create jobs, improve security, and settle into a continent of stable countries.  Regrettably, the Trump administration has chosen to go the opposite way.  The closing of the USAID programs and other helpful engagement with Africa will neither help with its development nor with stanching the flows of outward migration.  The same applies to our southern neighbors.  We should be doing a lot more to help them escape poverty, joblessness, and lack of public safety. 

So, the real costs of how we handle immigration can be summed up like this.  By criminalizing and debasing all undocumented immigrants we scar our humanity and betray our origin story.  By militarizing law enforcement to handle immigrants and their supporters we risk staining our democratic credentials.  By choosing to act with emotion and no reason we lose sight of immigration as part of the solution to important domestic issues, like labor shortages and an aging population.  And finally, by choosing short-term solutions we lose sight of the longer-term prospects and the need to handle the immigration problem at its roots through engagement and a development agenda in the countries most likely to be the origins of new immigrants.

This post marks the end of seven seasons for the blog.  I want to thank everybody for reading my posts or for just opening my emails.  After the customary summer break, I look forward to returning to the blog in September.  Have a nice summer. 

The political battles between right and left often leave out the two elephants in the room: markets and technology and their combined effects.  Two hundred fifty years after their ascendancy in human lives, markets and technology have become too complex and dominant, thus making their management too demanding and confounding for both conservatives and liberals.  What I mean by that is that the respective basic tenets of conservativism and liberalism, preservation of tradition and expanding personal freedom, are challenged and even undermined by the way markets and technology work if left unchecked. 

Consider first the challenges posed by markets.  They move goods around with great efficiency based on trust and reputation developed across buyers and sellers.  At the same time, markets have no loyalty.  A seller is happy to find a buyer anywhere in the world.  But this diminishes the bonds among the members of local communities.  Markets can produce the best combinations of price and quality but they can also be left to degenerate into greedy and wasteful monopolies or monopsonies.  Markets allow capital owners to move their capital with little geographical constraint motivated only by the prospect of profit.  But when the capital moves so must the labor.  If labor does not move it becomes unemployed.  That’s what happened to the deindustrialized American Midwest.  But then, labor mobility also leads to the decline of communities and the erosion of traditions.

So, we can see the conundrum for conservatives and liberals.  To protect traditional and closely-knit societies the market must be somehow restrained; to let the individual and entrepreneurial spirit flourish the local must give way to the cosmopolitan.

Technology makes markets more complex and difficult to manage.  The reason for this is that technology creates products that are more intangible and cognitively more difficult to understand, especially when it comes to their potential risks.  The information, and more specifically the digital, markets are a good example.  As we navigate the digital space we are constantly invited to buy or subscribe to myriads of products with just a click of the keyboard.  Do we really know what we buy into?  Or when governments and private business digitize every piece of information, do we really know how this information about our private lives will be used?  

The speed of technological innovations and their transformation into consumer products also contributes to our difficulty to appreciate the consequences of what we are offered.  Thus, an asymmetrical informational gap concerning the consequences of innovations starts to grow between their creators and the consuming public.  In the markets of the past, we bought a product and that was it.  In the digital economy, every transaction opens up a deeper and more lasting interaction with the vendor, which usually translates into a one-way flow of information from the consumer to the digital seller. 

But if the public is faced with a veil that obscures the consequences of market transactions or how technology works in the hands of the state, then a society can be driven willy-nilly down a path to a new order of things without the informed consent of its members.  That is, an informational gap concerning the products we consume and the means our governments adopt to organize our societies creates a deficit in democracy.  

The growing complexity of markets and technology and the lack of serious democratic input from the public explains, I believe, a great part of the anxiety and the political repercussions we now observe in western societies.  As more and more people feel that they lose agency in shaping the future, they start to mistrust mainstream politicians and the drivers of change, that is, science, research, and experts.  That leads many people to a wholesale rejection of fact-based policies.  We see this in the populist movement in the US.

This broad sentiment of disenfranchisement can also explain the polarization between those who have greater difficulty positioning themselves in the driving seat of the new global digital ecosystem and those who by virtue of knowledge and adaptability feel comfortable in it.  In the context of American politics this usually correlates with differences in educational attainment and geographically describes the chasm between the coastal “elites” and the middle of the country.

Unfortunately, the politicians that represent the American populist movement are not actually honest with their constituencies.  Republicans talk about communal bonds, traditional families, and individual freedoms but they keep adopting policies that favor unregulated markets, keep child rearing unaffordable to less privileged parents, dislocate communities, weaken government support for civic initiatives, silence dissenting voices and let digital behemoths operate with little restraint and accountability. 

Democrats on their part, though historically the party of the common man and woman, they have let their exuberance about the pathbreaking benefits of technology to drive them into an alliance with a bipartisan cadre of technocrats and globalism enthusiasts, often failing to appreciate any negative effects on social and economic structures.

In short, I believe, the forces of the market and technology are left to be mediated by politicians who are unprepared or unwilling to grasp the full extent of the inherent risks and by experts who are not trusted by a large segment of the population.  Meanwhile tech companies continue to expand their accumulation of private data, to grow their monopolistic power, to expand their political influence and, thus, to shape our future guided only by profit seeking and their vision while the rest of us are reduced to passive watchers and consumers.  

The reality faced by democracies is that those who control the markets for the most consequential technologies will shape our future without adequate representation by the people.  Under these circumstances neither the principles of classical conservativism nor those of classical liberalism will survive.