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Among the various fallout of Facebook’s odd consumption of Oculus is the growing notion that the various individuals who provided Oculus with ~$2.4mm in funding via Kickstarter in exchange for, well, stuff, but importantly, not equity, equity that presumably would have returned perhaps an order of magnitude more than its cost following Facebook’s purchase. The Times has the summary; Gamespot has the longer and more thoughtful musing; and Barry Ritholtz has the primal scream.

I’m going to go ahead and acknowledge #slatepitch here, but everyone complaining about this is, for the most part, wrong. Nobody was lied to or deceived. Everybody who pledged to the Kickstarter campaign signed a perfectly transparent contract exchanging their money for a concrete, well-defined deliverable, knowing full-well that “hey, maybe somebody who succeeds in designing a revolutionary improvement over existing VR helmets maybe has a big-dollar idea on their hands.” If the Ouya wasn’t a stupid idea and instead had been purchased by Apple or Roku or Amazon for billions (or even hundreds of millions) I’m sure we’d be hearing the same complaints, and they’d still be wrong. Even in the realm of “nominally transparent but fishy exchanges,” this falls well short of “old people paying subscription fees to AOL” or “Herbalife.”

Part of what is incensing people about this, crucially is the scale – crucially because it shows where the real injustice lies. There are, on Kickstarter, many projects to help “kickstart” people’s board game designs, music albums, and short films – should that board game then get picked up by Rio Grande, or that album picked up by XL, or that short film get a contract for expansion into a feature by The Weinsteins, well, isn’t that the point of Kickstarter? You help someone “kickstart” their project, and their dreams, to help them succeed at bringing some cool new creation into the world and hopefully leverage that success into a more-fulfilling career. And maybe that project, and their subsequent career, will be a more lucrative one then the more mundane pursuit they were engaged in before Kickstarter helped them find their break. And that’s OK! You didn’t ask for equity, you didn’t get it, you dig the board game or the T-shirt and life goes on.

But the investors in Oculus, collectively, just made two billion dollars.

And therein lies the real injustice. Kickstarter funders of Oculus may be thinking “hey, I pitched in to help you make a great idea happen, maybe even to make you personally financially successful, but I did not sign up to make you a billionaire.” But that gets us back to the real injustice – there shouldn’t be  billionaires! The fact that a twenty-something dude who figured out how to strap your parent’s basement to your face is now going to live a life of immense luxury, free of all wants and able to pursue any material dream, largely because another billionaire twenty-something thought “hey, I really want to wear my parent’s basement on my face,” is totally outrageous. But it only highlights the vastly deeper flaws in our current socioeconomic system, which allows and indeed catalyzes the accumulation of vast wealth by a tiny minority on relatively arbitrary bases. Nobody who gave to Oculus on Kickstarter is, or almost certainly will ever be, a billionaire. And many of them may and likely will in their lives face substantial economic hardship, hardship that would have been largely avoidable if we had a society committed to supporting the broad majority of people at the expense of the 0.1%. But right now we don’t have that society, and that’s the real injustice.


Two days ago, Matt Yglesias pulled the pin on a rofl grenade, and yesterday he basked in the lulzplosion. Yet I think it’s worth addressing exactly why it is conservatives have a deep, emotional attachment to doctors – and vice-versa. Indeed, 16 of the 19 doctors in Congress are Republicans.

First, they tend to be old, white, and male.

Second, they tend to be rich.

But even beyond that, there’s lots of strong, deeply-rooted reasons conservatives gravitate towards doctors as vectors for identity politics. They work extremely hard. They are often small business owners or independent proprietors. They are seen (and perpetuate the image of themselves) as beseiged by regulation and government intrusion. They spend many years working extremely hard for little immediate reward, only to be richly rewarded later, a sequencing that matches conservatives views about the virtue of patience, saving, and hard work. And they also do good while still getting rich from doing good and they’re extremely popular which makes them vastly better symbols than CEOs or financiers or even, in some ways, the military, since even though the military is general respected and popular it is also fairly-widely associated with aggression, violence, discriminatory practices, and other negative characteristics that many would avoid.

So suggesting that doctors are actually rent-seekers supping on government cheese served on government silver while drinking fine wine out of government crystal really touches a nerve.

To relate this to another hobby horse of both myself and Yglesias, it’s similar to the reasons conservatives tend to have a giant blind spot around urban land use issues. Essentially, all the identity politics orbit the image of a person in their own, large, private home, being in their own large, private vehicle, owning their own land, away from cities filled with miscreants and students and criminals and socialists and various sundry unwashed masses. That this lifestyle is supported by exactly the kinds of burdensome, costly, stifling regulation they claim to oppose sets off a surprisingly rabid reaction.

Of course, there’s also tremendous cognitive dissonance among conservatives around the very idea that conservatives practice any kind of identity politics, so even brushing that raw patch elicts yowls.

Of course, this could all be changing. Nothing persists but change.


Just listened to Planet Money discuss subsidies for having babies, and thought, first of all, since I am now engaged to get married and both the fiancee and I are on the same page re: having a couple kids, I hope the United States institues such a policy! Maybe it could united pro-lifers (incentive to carry pregnancy to term) and progressives (it would largely be a very progressive redistribution of wealth)!

But more importantly the economic logic behind it sort-of-tangentially reminded me of a pet concern of mine:

This can be good for a little while. With a young workforce and fewer babies to take care of, a country can show enormous growth.

But then people start to get old, and governments say uh-oh.

"Who’s going to pay the bills? Who’s going to pay for pensions?" says Patricia Boling, a political scientist at Purdue.

In many countries, including the U.S., workers pay for retirees’ pensions. Fewer kids means fewer workers funding those pensions.

"And in countries that have really low fertility rates, that’s a very extreme problem," Boling says. It "makes what we have in the United States … look like peanuts."

All true! And yet one would think that overall economic growth could fund a higher retiree-to-worker ratio, right?

Here’s my vision for the future of the economy:

  • Robots replace humans at doing some job. A few humans are unemployed, but overall there is a consumer surplus.
  • Repeat.

Here is where my simulation diverges. Essentially, replacing a human worker with a robot is substituting capitol (the machine) for labor (the worker). On a small scale this will simply cause sectoral shifts; if it gets cheaper to buy some tchotchke because a robot made it instead of a human, when I buy the tchotchke I save some money which I will then use to buy coffee and when demand for coffee goes up it causes a commesurate rise in employment in the coffee sector. Yay! But on a sufficiently large scale you are faced with what I like to call the reverse-Ford problem:

Mr. Ford announced that he was doubling the pay of thousands of his employees, to at least $5 a day. With his company selling Model T’s as fast as it could make them, his workers deserved to share in the profits, he said. […]

The mythology around this story holds that Mr. Ford wanted to pay his workers enough so they could afford the products they were making.

In fact, that wasn’t his original reasoning. But others made the point, and, in time, it became part of Mr. Ford’s rationale as well. The idea became a linchpin in an industrial philosophy known as Fordism.

More production could lead to better wages, which in turn would lead to more spending by the public, yet more production and eventually even higher wages.

"One’s own employees ought to be one’s own best customers," Mr. Ford said years later. "Paying high wages," he concluded, "is behind the prosperity of this country."

So what happens to Ford Motors if making the same number of cars requires far less labor input, replaced by less-expensive capitol input? Well you get higher and higher wealth and income inequality as those at the top need not share their profits with a large workforce.

So what happens when there exist enough robots to basically obviate human labor from the fundamentals of the economy?

I see three possible futures:

  • Robot dystopia – a few scions of capitol control all the machines, make vast fortunes, and surrender as little as possible, leaving most of the rest of humanity living at subsistence levels.
  • Robot utopia – socialization of wealth through whatever mechanism, meaning the vast surplus is shared relatively equitably, meaning most people have most of their needs met and are free to pursue higher levels on the Maslow heirarchy.
  • Robot apocalypse – the robots rise as one to destroy us all.

I don’t know what to do about option #3, but I am concerned that ruling that out that option #1 is more likely than option #2. And the reason I think that has to do with, well, baby subsidies. To some extent we are facing a similar problem – the economy is producing more but finding that more and more of the humans in the system don’t have a great deal of utility but still require resources. In theory this shouldn’t be hard, but in practice it’s proving difficult. Even in Japan where they had some nasty economic times they have still passed their original peak GDP and are have a very high GDP per capita, though not nearly as high as the United States. Keep in mind also that a lot of Japan’s troubles here are culturally based; a different country facing similar demographics would probably not have such a difficult time. But looking at the United States where GOP scissors are already being aimed at Social Security despite being projected not to run into any trouble for the next 75 years because raising taxes on wealthier individuals is the dread socialism doesn’t necessarily leave me optimistic that we’ll be able to wrest sufficient control of the Great Robot Surplus from the hands of its nominal owners before they are able to consolidate control.

Hard to cover ground like this once TBogg’s obliterated it with one of his patented precision-targeted ridiculous-seeking snark-bombs, but Ross Douthat is really contorting himself here:

Yes, Occupy Wall Street was dreamed up in part by flakes and populated in part by fantasists. But to the extent that the movement briefly captured the public’s imagination, it was because it seemed to be doing what a decent left would exist to do: criticizing entrenched power, championing the common good and speaking for the many rather than the few.’

The union rallies and the Keystone demonstrations, by contrast, represented what you might call the decadent left, which fights for narrow interest groups rather than for the public as a whole…

Likewise, the Keystone protesters haven’t been defending “the interests of wage-earning Americans,” to borrow the historian Michael Kazin’s description of the historic purpose of the American left. They’ve been harnessing the power of the Democratic Party’s wealthy environmentalist donors to actively kill off American jobs.

Stopping the pipeline won’t drive down demand for fossil fuels, or prevent Canada’s oil from being extracted and shipped around the world. But for a small group of activists and donors, keeping the pipeline out of their national backyard is all that counts, even if American workers pay the price.’

So even if you want to buy the dubious jobs argument about the Keystone XL pipeline, it seems weirdly backwards to claim that environmental protesters are the narrow-minded self-interested ones compared to economic justice protestors. I’m a big fan of income and wealth redistribution, but in an intra-American context it is what it is – making America’s poor and middle classes richer and America’s rich poorer. America is extremely wealthy but it is still only 4% of the global population, and while a more equitable redistribution of wealth would have second- and third-order benefits that would benefit the rest of the world it’s still only a solution to that particular problem. Conversely, it’s hard to see the Earth as a "narrow interest group." What the Keystone protestors did was classic organizing – take a problem ("humans are trashing the environment") and cutting an issue out of it ("this particular pipeline is an egregious environment-trasher and must be stopped") and taking direct, coordinated action designed to achieve a desired outcome.

And it worked! But claiming they’re the narrower interest group because they focused their energies on something specific is bizarre. According to Ross Douthat, then, all issue organizing is "narrow" and "decadent" and only vague gestures towards unspecified radical change is acceptable. Which is of course what a conservative would want the left to do. I think the Occupy movement has been largely positive for the American left and the causes it fights for, but it is far, far, far, far, far from sufficient to actually achieving anything remotely resembling a goal. When it comes time for the Occupy movement to focus on a particular issue or target, expect Ross Douthat to not merely disagree with them, as is his wont as a conservative columnist, but to deny them any legitimacy whatsoever.

According to Ross Douthat, pro-life protestors are only "decent" insofar as they don’t devolve into a "narrow-minded," "self-interested" group that advocates for or against specific laws or policy outcomes. I’m sure that’s his next column.


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