The Speculist: Shadows of What May Be


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Shadows of What May Be

J. Storrs Hall of the Foresight Institute shares an unusually bleak scenario with the Foresight Senior Associates in his most recent e-mail:

The coming collapse

We don't have a decision market -- what Robin Hanson called "idea futures" when he invented them -- in the efficacy of our government's fiscal and monetary policies. But we have something close: the price of gold. As I write, gold is nearing $1050 an ounce, an unprecedented high. The logic of the market translates this into confidence at an unprecedented low.

Part of this caution is due to recent revelations of plans among the Arabian Gulf states, China, Russia, Japan, and others, to move out of the dollar as the oil reserve currency. Part is due to the fact that our policies of bailing out failing businesses are like of the Japanese in the 90s, which led to a "lost decade" of severely stunted economic growth. And part is because we've been living high by borrowing, and the rest of the world is beginning to wonder whether we'll ever pay it back.

The problem is, that world-straddling empires don't just have a lost decade. When the British Empire collapsed in the decade following World War II, standards of living in England went from the highest in the world -- London was essentially the world's capital as late as 1910 -- to those of a third-world country. The top empire has a lot of advantages that it loses when it drops back into the pack, such as having its currency be the reserve and thus being able to print its way out of tight spots. Losing those advantages has a multiplier effect on what would otherwise be a mild, or at least not precipitous, decline.

One of the reasons the British collapsed as far as they did should give us pause. The Empire had accumulated a host of structural inefficiencies which they could get away with before, but were a huge drag on an economy trying to be competitive. We have these in spades, along with the fact that our science and engineering education, and levels of interest among young people, is dismal.

You may be surprised to hear this kind of thing from Foresight, because we usually have an optimistic take on the future. In fact, the technical outlook has never been brighter: nanotechnology, artificial intelligence, and molecular biotech are increasingly in our grasp and have, more clearly than ever, the potential to change our future drastically for the better. Matter printers, personal robot servants, and a cure for aging would give us a fantastic standard of living no matter what the rest of the world might do.

But these things will not happen by themselves. They have to be invented and built. And that means they have to be invested in. And that means people have to understand that they are possible, and in the not-too-distant future.

And that's where Foresight comes in.

Yours sincerely,


J. Storrs Hall, Ph.D. President Foresight Institute

I think Josh has thrown down the gauntlet, not just for Foresight but for everyone who believes that a vastly better future is in our grasp, that it's something we can achieve sooner rather than later. Is the coming collapse inevitable? I believe it is no more inevitable than the Malthusian end-state of humanity laid out by Robin Hanson that we discussed on last night's show.

I am reminded of this passage from A Christmas Carol:

``Before I draw nearer to that stone to which you point,'' said Scrooge, ``answer me one question. Are these the shadows of the things that Will be, or are they shadows of things that May be, only?''

Still the Ghost pointed downward to the grave by which it stood.

``Men's courses will foreshadow certain ends, to which, if persevered in, they must lead,'' said Scrooge. ``But if the courses be departed from, the ends will change. Say it is thus with what you show me!''

The Spirit was immovable as ever.

Scrooge crept towards it, trembling as he went; and following the finger, read upon the stone of the neglected grave his own name, Ebenezer Scrooge.

``Am I that man who lay upon the bed?'' he cried, upon his knees.

The finger pointed from the grave to him, and back again.

``No, Spirit! Oh no, no!''

The finger still was there.

``Spirit!'' he cried, tight clutching at its robe, ``hear me! I am not the man I was. I will not be the man I must have been but for this intercourse. Why show me this, if I am past all hope?''

For the first time the hand appeared to shake.

``Good Spirit,'' he pursued, as down upon the ground he fell before it: ``Your nature intercedes for me, and pities me. Assure me that I yet may change these shadows you have shown me, by an altered life!''

A change of direction is possible, requiring first a change of heart. What will happen over the next 10, 20, 30 years depends a little on what we imagine to be possible, a little more on what we expect to happen, and a whole lot on what we insist must happen.

The choices are:

1. We experience a gradual, or even rapid, decline over that period, orchestrated and carried out by a political class composed of two parties each of which ceaselessly insists it is fighting against such a collapse, while doing little or nothing to help us realize the truly game-changing technologies that Josh described above, the ones that can turn everything around. We ultimately land in an end-state somewhat north of sheer misery (we hope), but far less than what we knew was possible.

2. We take charge of the process ourselves, either replacing the aforementioned political class with people who really get it, or bypassing them altogether. We work to bring about truly meaningful economic change by way of highly achievable technological progress. And over the next 30 years, we launch the biggest economic boom in human history, making a tiny blip out of every period of growth that has come before.

Yes, there are plenty of scenarios that fall between these two, but these are the bookends -- these are the possibilities we should be looking at as we decide what steps to take next.

I think anyone who has read the book will agree: we don't want the nightmare to become our reality. We want to wake up and have a very merry Christmas. If the courses be departed from, the ends will change.


Of course, today's is not the highest price for gold in inflation-adjusted dollars. In 1979 it went to $750 when the general level of prices was half or less of today's. Why would anyone try to assert such an obvious fallacy?

And to say that Britain in the decade following WWII was at the level of the Third World economically is also false. Has the writer ever been to Cairo or Islamabad or Havana? I lived in England in the '50s and I can assure you this assertion is a laughable fib.

Great post. Glad Glenn linked to you. As a comma Nazi, however, I am wondering who President Foresight is as written in J. Storrs Hall's signature line.

It's pretty much impossible to 'go around' the political class these days.

Everything requires tons of paperwork, licenses, and overhead - it's not going away.

The one big structural problem the Founding Fathers did not address in the Constitution is how to keep government from growing without bound. Even in the - admittedly laughable, these days - case where it would limit itself to what is actually in the Constitution, there is no way to prevent this growth at the Federal level - to say nothing of State and Local governments.

I wonder if the tea-party people would be behind an amendment that required for every word of new law, or regulation, enacted, a word of existing law, or regulation, must be repealed?

We will drown in this quagmire, it's just a matter of when.

I think the foresight institute could use some hindsight. The problems with Britain post-WWII where present many years before. The US over took Britain as the largest economy well before WWII. When US soldiers arrived in Britain there was significant resentment because the soldiers were paid so much more than UK counterparts. After WWII the UK spent many years with heavy handed socialist governments that retarded growth. The decline was not as rapid as the foresight institute would have us believe.


Regarding Alex's comment, I believe British troops' general opinion of their American counterparts was expressed as "overpayed, oversexed, and over here".

Sooo, how to discuss all this with some modicum of utility while still avoiding The Verboten Topic? You set a pretty problem, Phil. :)

I think the most critical step to avoiding the decline you and Josh mention is to acknowledge that resistance to such technologic change will come from those most invested in the status quo. Indeed, that the degree of resistance expressed is a direct corrollary of their individual investment in the established methodologies. It should be self-evident that those who seek funding for campaigns for public office will be most indebted to (and supportive of in return) those who garner the most funds from existing technology to invest in said campaign efforts. Thus, any effort to alter the future outcome (ala the Scrooge example) must needs be directed at encouraging those most invested in historical technology that their individual circumstances are best improved by as rapid a conversion into the potential future model as possible. The recipients of their largess will continue to dutifully follow their lead, I'm certain.

Until those who most benefit from the existing technology can be convinced not to continue investing in that technology, there will continue to exist massive and pervassive resistance to technology development in terms of practical, accessable engineered products for wide-spread consumer applications. Not to tug on Alvis' cape, but I think one of the best techniques to achieving that end will be continued (indeed accelerated) conversion of the consumer into the prosumer and massively expand the level of return to technology investors from the existing standards. If you want to win the revolution, get (and keep) the wealthy on your side.

Yes, Americans created the largest economy in the world long before World War II or WWI or even the Spanish American War. It happened in 1870, a 5 measly years after the end of the most destructive war in American history, the Civil War.

By the World Wars, every European leader understood (even though they didn't care to discuss it much) that having America on their side would not only tilt the balance of power but topple the board.

Historian David McCullough noted during the Battle of New York in his book "1776" that the British were astonished at the wealth displayed in ordinary American farmhouses they ransacked.

Apparently, Americans were relatively wealthy in Colonial days.

Yes, I do believe freedom is very conducive to wealth production, and as we've also seen from American history, conducive to accelerating technology.

Will wrote:

You set a pretty problem, Phil.

Next, I'm going to start a discussion of Star trek, but no one is allowed to mention space flight in any way.

I think the most critical step to avoiding the decline you and Josh mention is to acknowledge that resistance to such technologic change will come from those most invested in the status quo. Indeed, that the degree of resistance expressed is a direct corrollary of their individual investment in the established methodologies.

Imagine a tinker/peddler who ekes out a living selling this and that to the nearby villagers. The village is so destitute that, by their standards, the tinker is actually pretty well off. Little do any of them realize that their town sits atop the mother lode -- the richest vein of gold anyone has ever seen. Every hovel in the village has a fortune beneath it. Right next to the tinker's shack is the mouth of a cave that would open up the fortune both for him and the rest of them.

The tinker spends his days thinking of how he can sell more tin cups and bits of string to the villagers.

He uses the cave mouth as a garbage dump.

I see what you're saying, Will. We need to get this guy's attention.

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