Hackers and Painters

[Amazon Link] Subtitled "Big Ideas from the Computer Age," this book is a collection of essays from Paul Graham. They are designed to appeal to computer types who at least have pretensions to thinking about other things than computers. They are well-written and provocative.

I'm personally indebted to Graham, since one of the essays included here ("A Plan for Spam") was the springboard for Bogofilter, which has helped reduce the time I spend on dealing with unwanted mail by at least an order of magnitude. (That's a decimal order of magnitude, in case geeks are reading.)

Other topics Graham ruminates on: the ecology of startup tech companies; how to have heretical thoughts and survive; why nerds are unpopular; the superiority of Lisp over other computer languages; the superiority of web-based over host-based applications. And more. Like all good essayists, Graham makes these interesting even to people who might not be directly involved. If you want to sample, many (maybe most, maybe all, I haven't checked) of the essays are available on his website.

He's convinced me that I should learn Lisp. Or, more precisely, that I should have learned Lisp before my brain calcified and made me impervious to such radical rewiring.

He also argues about inequality, a topic much covered on this blog of late. I'll probably devote a separate post to this later.

Last Modified 2012-10-25 8:25 AM EDT

Devil Citing Scripture

A number of the recent comments on inequality have pointed to last year's testimony by Alan Greenspan before a Senate committee. For example, Heather Boushey in her WSJ debate with Russell Roberts:

Even Alan Greenspan agrees that growing inequality poses significant problems for the U.S. economy.

And Paul Krugman in his NYT op-ed:

And I'm with Alan Greenspan, who - surprisingly, given his libertarian roots - has repeatedly warned that growing inequality poses a threat to "democratic society."

If you're like me, you're asking: "OK, what did Greenspan really say?" Here is a link to his testimony. This allows us (unlike Boushey and Krugman) to put the comments about inequality in context.

Greenspan is famous for delphic utterances that leave people arguing about their import for months afterward. But here he is utterly clear about what he thinks is the underlying problem:

Another critical long-run economic challenge facing the United States is the need to ensure that our workforce is equipped with the requisite skills to compete effectively in an environment of rapid technological progress and global competition. … At the risk of some oversimplification, if the skill composition of our workforce meshed fully with the needs of our increasingly complex capital stock, wage-skill differentials would be stable, and percentage changes in wage rates would be the same for all job grades. But for the past twenty years, the supply of skilled, particularly highly skilled, workers has failed to keep up with a persistent rise in the demand for such skills. Conversely, the demand for lesser-skilled workers has declined, especially in response to growing international competition. The failure of our society to enhance the skills of a significant segment of our workforce has left a disproportionate share with lesser skills. The effect, of course, is to widen the wage gap between the skilled and the lesser skilled.

Cliff's Notes summary (of what Greenspan says he's already oversimplifying): changes in demand for skilled vs. unskilled labor drive wage trends in opposite directions.

Then comes the part that all the lefties quote:

In a democratic society, such a stark bifurcation of wealth and income trends among large segments of the population can fuel resentment and political polarization. These social developments can lead to political clashes and misguided economic policies that work to the detriment of the economy and society as a whole.

Greenspan then provides his obvious solution:

As I have noted on previous occasions, strengthening elementary and secondary schooling in the United States--especially in the core disciplines of math, science, and written and verbal communications--is one crucial element in avoiding such outcomes. We need to reduce the relative excess of lesser-skilled workers and enhance the number of skilled workers by expediting the acquisition of skills by all students, both through formal education and on-the-job training.

I may (probably will) comment further on Greenspan's testimony, but for now, it's worth pointing out that Krugman is particularly shameless about "quoting" Greenspan while actually in fervent disagreement with his underlying thesis. His column was spurred by new Fed Chairman Bernanke's comments essentially saying the same thing as Greenspan:

Responding to a question from Representative Barney Frank about income inequality, [Bernanke] declared that "the most important factor" in rising inequality "is the rising skill premium, the increased return to education."

Krugman is indignant:

That's a fundamental misreading of what's happening to American society. What we're seeing isn't the rise of a fairly broad class of knowledge workers. Instead, we're seeing the rise of a narrow oligarchy: income and wealth are becoming increasingly concentrated in the hands of a small, privileged elite.

So, really, Krugman (et. al.) and Greenspan/Bernanke are really talking about different things, both called "inequality." Confusing, no?

But it's intentionally confusing when Krugman and his ilk dishonestly quote Greenspan in support of their thesis. Greenspan's view of the "inequality problem" is "solved" by broad training initiatives to put the skill distribution of the American workforce more in line with demand. Roughly speaking: work on inequality by shoring up the bottom side of the distribution.

Krugman's "inequality problem" (on the other hand) can't be solved that way. Because even then, we'll still have that "small, privileged elite" that so chaps his hide. (We will swallow, for now, the cognitive dissonance involved in reading a NYT columnist railing against a "small, privileged elite.") Clearly the solution must involve taking those other folks down a peg or two, or nineteen.

What do we do, specifically? Krugman is typically coy, but ominous, writing: "It may take some time before we muster the political will to counter that threat."

Krugman probably doesn't advocate countering the "threat" of inequality by putting the Forbes 400 into concentration camps or anything. I would guess, if you pressed him, he'd simply argue for confiscatory high levels of taxation on income and wealth, with appropriate "regulation" to insure that victims of this legalized theft high-income taxpayers can't escape avoid it.

Or perhaps the lack of a plan simply indicates that all the "eat the rich" rhetoric about inequality is just a cynically-designed issue to inflame the populace, which they desperately hope will help the Democrats win back political power. When and if that happens, the issue will be safely consigned to the memory hole.

Update: Welcome, AmSpecBlog readers, and humble thanks to Shawn Macomber for the link.

Last Modified 2012-10-25 8:24 AM EDT