Tag Archives: technology

Re: Kids can’t use computers

From 2013: Kids can’t use computers… and this is why it should worry you

Blogger and teacher Marc Scott laments the growing epidemic of ‘computer illiteracy’, with some anecdotal examples.

The truth is, kids can’t use general purpose computers, and neither can most of the adults I know. There’s a narrow range of individuals whom, at school, I consider technically savvy. These are roughly the thirty to fifty year-olds that have owned a computer for much of their adult lives. There are, of course, exceptions amongst the staff and students. There are always one or two kids in every cohort that have already picked up programming or web development or can strip a computer down to the bare bones, replace a motherboard, and reinstall an operating system.

Not really knowing how to use a computer is deemed acceptable if you’re twenty-five or over. It’s something that some people are even perversely proud of, but the prevailing wisdom is that all under eighteens are technical wizards, and this is simply not true. They can use some software, particularly web-apps. They know how to use Facebook and Twitter. They can use YouTube and Pinterest. They even know how to use Word and PowerPoint and Excel. Ask them to reinstall an operating system and they’re lost. Ask them to upgrade their hard-drive or their RAM and they break out in a cold sweat. Ask them what https means and why it is important and they’ll look at you as if you’re speaking Klingon.

Marc is from the UK, which ranks about the same as the US in technological literacy, which below South Korea and the Nordic countries:

Surprisingly, in spite of its reputation as being technologically advanced, Japan has the largest percentage of ‘illiterates’ of all countries.

He’s maybe being too hard though. ‘Computer literacy’ and ‘knowing how to use technology’ are very broad concepts, and understanding how a computer or a website works vs. using a computer or a website are, of course, very distinct. Computers and software are very complicated; there’re thousands of components involved with either, which is a lot for a young person to learn. The problem may have more to do with and inability to debug hardware and software, than an inability to use a computer. Because computers and software are so complicated, with thousands of things that can go wrong, debugging is an invaluable skill. Instead of requiring young people anticipate and fix every conceivable problem (which is impossible), instead teach them how to find solutions to problems, such as by teaching them how to perform effective Google searches, how to read a tutorial, and how to to perform a search of driver components, etc. Learning how to find solutions will provide them with the means to fix most problems.

Just a couple weeks ago I had a problem with the laptop battery: it would not charge despite plugging it in. After much Googling, I learned that I had to ‘recalibrate’ the battery, and to do this I had to follow a precise set of instructions which included deleting some files and removing the battery. Without the tutorial and understanding how to read it, I would have never solved the problem on my own, despite my many years using computers.

But also, it’s not that kids can’t use computers well…they also can’t do many other things well…after all, they are kids. They probably need to spend many more years using computers before they will get better.

The Moral Decay Conundrum

A commenter writes

Yeah, but the rapid fall here bugs me. We went from a moon shot to mass rape in the town square within 50 years. I thought we should have had at least a couple hundred years of coasting.

Hmmm…the weird thing is that while America has evidence of social decay, economic and technological progress has not stagnated. Computers keep getting smaller and faster. Important discoveries in physics have been made in recent years. After many decades research, chronic myelogenous leukemia, like Lymphoma, has effectively been cured. Recent inventions also include: flat screen HD TV , the world wide web, active matter, apps, smart phones that have as much computing power as supercomputers decades ago, drones, 3-D printing, image recognition, MRI, genome sequencing, Elon Musk’s Tesla and space-x program, and so on. Technological progress has gotten smaller, but it’s still there. Instead ring worlds, flying cars, and ecology skyscrapers, it’s nanotechnology, computing, and biotechnology. The moon landing is sometimes seen as the ‘pinnacle’ of human achievement or the high water mark of American ingenuity, but it was very expensive, not really needed, and unprofitable. Maybe the debt it created helped the private sector of the economy via Modern Monetary Theory. But the private sector is better at innovating.

One reason why moral decay and technological progress can coexist is because the private sector, which is the source of most innovation, still has a lot of autonomy, although welfare liberals like Sanders want to impose more regulation and taxes. As president, Bill Clinton, to his credit, understood the importance of the private sector, whereas Sanders doesn’t. Same for STEM in the research universities, another major source of innovation, which seems to be immune to moral decay.

This is why the concept of ‘exit‘ or ‘secession‘ is so appealing to Silicon Valley, as I write:

But it’s not that I want the government completely out of the picture – I’m not a libertarian anarchist – but resource optimization is needed. In much the same way that a company restructures to become more efficient and productive, America needs a similar restructuring. Silicon Valley has proven again and again adept at weathering all macroeconomic storms – from recessions, to financial crisis, emerging markets busts, to oil crashes – while other regions struggle with chronic stagnation. Maybe this is a testament to the efficacy of high-IQ and ingenuity of Silicon Valley, combined with a free market and meritocracy, and if the ethos of this technology subculture is applied to broader governance, maybe America will reach its full potential.

If not exit, put the geeks in charge. If the private sector is what’s holding America together, why not let them run it, instead of wealth spreaders like Obama and Sanders that will hold America back? But that won’t solve the moral decay problem, and some companies profit from decay. Heavily restricting the private sector may result in technological stagnation, economic weakness & job loss, and lower standards of living. So something to consider.

Post-2008 Capitalism: A Guide

From n+1 magazine, After Capitalism:

HOW WILL IT END? For centuries even the most sanguine of capitalism’s theorists have thought it not long for this world. Smith, Ricardo, and Mill pointed to a “falling rate of profit” linked to inevitable declines in agricultural productivity. Marx applied the same concept to industrial production, suggesting that the tendency to replace workers with machines would lead to a chronic and insurmountable lack of demand.

The only thing that has as good of track record as capitalism are predictions of capitalism’s demise.

Fiscal austerity is general, taxes remain low, and debt levels continue to rise—which means that Western countries, by selling treasury bonds to the rich through capital markets, are actually paying their elites in bond yields to avoid having to go through the politically impossible process of taxing them. Absent any political recourse to countercyclical fiscal policy, central banks in the US, the Eurozone, and Japan have kept interest rates low and pumped trillions of dollars of fiat money into the financial system, keeping banks and dot-com companies liquid and driving the rich to put their money into the condos now flooding Manhattan, all while leaving median wages pleasantly low.

That is similar to the process I describe in an earlier article, Post-Labor Capitalism. But instead of post-capitalism, it’s more like post-labor capitalism; capitalism remains intact. As well as other factors like the petrodollar, the ‘flight to safety‘ is keeping yields low and the dollar high. The author seems cynical about how money is flowing into tech companies, but tech companies offer among the best growth prospects of all sectors. * Amazon stock, up 200% in the past few years, has been a great place to put your money; Diamond Offshore, a drilling company whose stock is down 50% this year, has not, because of weakness in emerging markets, depressing commodity prices. In a post-2008 era of slow growth, Web 2.0 is where the growth is.

Getting less work seems unlikely to come about without the fight for solidarity, the chief intellectual achievement of the workers’ movement, and one that none of the accelerationists see fit to mention as an ideal worth preserving or even renovating. This is despite the fact that automation—or, more broadly, the increasing precariousness of labor through technologically assisted means—has always been dialectically connected with it.

The Luddite Fallacy will likely remain a fallacy, but the composition of the labor force is changing to one of more lower-paying service sector jobs, as well as the rise of gig, freelancer, and temp jobs. The result is a bifurcated workforce: lots of low-paying jobs and a handful of good-paying jobs occupied by the cognitive elite and creative class. This is an example of how technology and automation provides a deflationary force through lower wages.

But overall, when pundits proclaim ‘capitalism is dead/dying’, they may be referring to an antiquated meaning or idealization of capitalism that does not take into account how capitalism is changing, but this does not mean capitalism is dead -hardly by any stretch of the imagination – instead, it’s evolving to a more efficient, technological, network-driven, ad-based, winner-take-all version of capitalism that we have now. Capitalism, like much of the post-2008 economy, has become bifurcated, with winners being high-IQ capitalists and ‘high-IQ’ capitalist endeavors, and less intelligent people and ‘low-IQ’ businesses are struggling.

Perhaps post-2008 capitalism is characterized by the following ‘themes’:

1. high-IQ favoritism – both in the business/investing world and individually, with smarter people and smarter businesses succeeding over their less intelligent peers

2. winner-take-all/bigger-is-better (small business failure at record highs, expensive real estate regions keep getting more expensive, web 2.0 valuations at record highs for a handful of companies, etc)

3. flight to quality (similar to #2) – observed in the investing world, venture capitalism, Bay Area real estate, and strength of the treasury bond market & US dollar vs. weakness of foreign peers

4. capitalism is getting smarter, choosier and pickier (** *) Lending standards are more stringent than ever, despite profits & earnings for multinationals at record highs, whereas in the pre-2008 era it was much easier to obtain financing for home or business. This is good because it reduces the likelihood of a crisis like in 2008, but perhaps frustrating for many who are unable to get financing at competitive rates. But this should not be confused for total risk aversion. Valuations for Silicon Valley tech firms keep going up, so money is flowing into the sectors and regions where the quality is perceived to be the highest, resulting in a bifurcation of very high valuations for quality and very low valuations for everything else.

5. capitalism is confusing, partly due to the new rules and trends that many don’t understand. That’s why I wrote this guide to help readers better understand how the landscape of capitalism has changed.

This high-IQ favoritism is also evident in the stock market since 2008, with the best performing sectors being information technolgy, pharma/bio/healthcare, payment processing, investment banking, and consumer discretionary. The biggest losers, have been ‘blue collar’ sectors like mining, shipping, commodities, energy, etc. The only ‘blue collar’ sector that has thrived since 2008 is …auto parts, because consumers, squeezed by a weak labor market and other lingering effects of the recession, are not replacing their cars as often. Maybe also housing, catering, daycare, and landscaping in the Bay Area to cater to the new tech rich.

Besides IQ, the ‘bigger is better‘ theme also dominates in our post-2008 world. The failure rate for small business is higher than ever, party due to low interest rates and plunging treasury yields, making it easier for large companies with access to cheap capital to expand, thus crowding out small businesses. The most valuable web 2.0 companies keep going up in value. In late 2013 Uber and Snapchat were worth $30 billion combined. Now it’s over $100 billion or so, depending on the source.

This bigger is better/IQ favoritism trend is also observed in Bay Area real estate, which keeps going up long after other regions have stagnated. Bay Area home prices are well-above the 2006-2007 highs, yet the national average still well-below the old highs. Expensive homes in high-IQ regions keep getting more expensive, year after year, with calamitous events such as the 2006 housing bubble resembling merely speedbumps in an otherwise uninterrupted trajectory of higher prices.

San Jose home prices, which were already expensive, are higher than their 2006 highs, while the less-expensive national average is still 10% below the old highs.

This is all part of America’s meritocracy, which while intact, is harder to understand. A lot of people are finding themselves left behind, either because they are not smart enough or because they don’t understand how the post-2008 economy works, they don’t understand how to get rich in our new era:

That’s the way you get rich in the smartist era – with stocks, Bay Area real estate, web 2.0…stuff like that. Overpaid, low-IQ, redundant salaried jobs are becoming obsolete, replaced by automation, temp-workers, outsourcing, or eliminated altogether. Due to the supply of labor vastly exceeding demand, employers not only have the luxury of choosing the cream of the crop out of a huge pool of applicants, but to save money and avoid bad PR, employers are becoming increasingly trigger-happy, thus no one’s job is safe.

The rug has been pulled…but all too many people are stuck in a pre-2008 mindset, thinking that the old rules of business and life still apply. They don’t.

The fact 20 and 30-somethings are becoming millionaires or even billionaires in Silicon Valley, with apps and other technologies, while coders strait out of college are making six-figure salaries – is evidence capitalism is thriving, or at least thriving in high-IQ sectors and regions. Anyone with some coding and a good idea can become rich, almost overnight, and if that is not the epitome of capitalism, what is? Some call it a bubble, but assuming it is one (I don’t think it is), technologies are borne out of boom bust cycles, examples being the 90′s dotcom boom and the 80′s personal computer & video game console boom. After the dust settles, what was considered speculative becomes commonplace.

Since 2008, trillions of dollars of wealth has been created in stocks, real estate, and tech. The mobile and video advertising market, linking advertisers with social media platforms, is projected to be worth $100 billion by 2016. The new Star Wars movie is projected to earn over $2 billion, setting a box office record. That is capitalism. You can’t tell me capitalism is dead when you have all this activity going on – but – Capitalism may seem dead if you’re doing it wrong ** or if you’re looking at it through an old lens.

* Capitalism is getting smarter, as part of the post-2008 ‘flight to quality’ trend. In the pre-2008 world, money flow was careless (such as to subprime borrowers, energy companies with poor prospects, emerging markets, etc), but now it’s much more focused, and that’s why the most successful and valuable web 2.0 companies like Snapchat, Air BNB, Uber, and Dropbox keep getting more valuable with every passing year. The same ‘flight to quality’ trend observed in the stock market, which is why only a handful of companies (Microsoft, Google, Facebook, Amazon) accounted for all of the gains of the S&P 500 in 2015. As explained earlier in the article, a similar flight to quality/’winner take all’ pattern is observed in the real estate market. After many decades of trial and error, boom and busts, capitalism may have reached the pinnacle of refinement.

** The types of business endeavors that seem to be succeeding in the post-2008 era harness network effects or act as a middlemen, are scalable, have market dominance, and have low operating costs. Some examples include Uber and AirBNB, neither of which cost much to operate, are readily scalable, and act as middlemen by linking people with rooms or people with cars. There are millions of rooms and millions of routes for Air BNB and Uber, respectively. Facebook and Snapchat are scalable and harness network effects to generate billions of impressions for advertisers, making these companies very valuable even if they don’t produce any content. Facebook, LinkedIn, and Google’s profit margins are among the highest on Wall St. All these companies do is host a social media platform and an ad platform, and just sit back and watch the money flow in. None of these companies have viable competitors; over a decade later, despite many efforts, no one has been unable to unseat the dominance of Facebook and Google, and I predict nothing will.

Post-Labor Capitalism

In my post about conservatives being smarter than liberals, I ended on cliffhanger, leaving the solution open:

Solutions are hard to come by. Simply getting rid of democracy won’t change the fact there are already millions of people dependent on govt. aid.

I also discuss the ‘un-participatory’ underclass here (why collapse can wait) :

Entitlement spending could be problematic. Immigration control won’t stop the millions who are already citizens and producing negative economic value. That leads to the e-word, eugenics, which few have the bravery to endorse, but I see it as possibly the only long-term viable solution to the entitlement spending problem, in addition to restricting low-IQ immigration. Boosting the national IQ by just a handful of points can help remedy a multitude of problems.

We now have life, liberty, free emergency room treatment, ebt, education, section 8 housing, and the purist of happiness…for all. The government won’t allow sick people die in the streets, nor will it deny certain services. Or maybe there will be enough abundance created by technology and the productive class to take care of everyone…hard to know.

And here (hive mind, immigration, and IQ):

Booting the nation’s IQ will likely boost exports, GPD, profits, and technological innovation – but not necessarily real median wages. But that may be OK, though, because new technologies lead to more utility, as in the example I give of TV sets or movie tickets. Technology may improve living standards, so much so that wealth inequality and stagnant wages may not matter. The result, however, may be an ‘un-participatory’ economy where a lot of people are not contributing much to economic growth, nor are participating in the gains such as measured by real wages, in accordance with the Pareto Principle.

As I explain in collapse can wait and other posts, I am optimistic about the US economy and stock market – both in the long-term and short-term – in spite of this large (and growing) underclass. But I don’t sufficiently explain the mechanism for how the economy and stock market is supposed to thrive even when a lot of people are a net-negative as indicated by negative effective tax rate:

The result may be a post-labor capitalist society, and we’re already headed in that direction. This is similar to the Marxist post-labor utopia, but with capitalism, too, as I explain here:

…while Marxists may support technology to bring about a post-labor society, not everyone who supports technology and post-labor is a Marxist. There will always be capitalism, scarcity, and markets, even if the labor force shrinks and or a lot of job become automated (which is assuming the Luddite Fallacy stops being a fallacy). Rapid gains in technology hasn’t made healthcare or tuition more affordable. Same for insurance, day care, and other services. There will always be demand for positional goods to signal status. There may even be a form of capitalism that exists between apps and robots, excluding almost all people.

As the labor force participation rate sinks and the ‘number of hours worked’ falls, we’re also seeing the rise of unconventional labor such as gig and freelancer jobs. At the same time, information technology companies, apps, biotechnology, and multinationals will continue to thrive. Just because we become a post-labor or post-salary society doesn’t mean that capitalism will fail or become obsoleted.

Some characteristics of America’s post-labor society:

1. fewer hours worked
2. falling labor force participation rate
3. rise of gig and temp jobs , neither of which may be counted in official labor statistics
4. ‘hollowing out‘ of middle/bifurcation of economy
5. less job security
6. fewer job openings, but also fewer job seekers as able-bodied individuals choose to dropout of labor force

The doom and gloomers argue that this large underclass will drain the economy and cause a debt crisis due to runaway entitlement spending, but another possibility is that an equilibrium will be attained due to factors such as technology, US reserve currency status, huge demand for low-yielding US debt, and surging taxable profits from multinationals that helps pay for the entitlement spending programs. This way, income taxes need not have to rise in order to fund these programs. In fact, taxes are historically low, only rising in 1993 and in 2013 due to partisan pressure, not out of economic necessity.

The interest paid on debt relative to GDP is historically low:

Part of what makes America exceptional is not just its superior economy or superior military, but the insatiable demand for its debt, especially compared to other countries.

America also has the petrodollar. This is a huge deal, and partly explains why the dollar is so strong in spite of the debt. Whenever oil exporters sell oil, they get dollars. This boosts the dollar.

So what about those net-negative people? As it turns out, while they may be a drain on the treasury, they are boon for large corporations that derive revenue from consumer spending and population growth – companies like Disney, Nike, Facebook, Netflix, and Google. That’s why stock prices, profits, and earnings keep going up, and why they will continue to do so. * And also why the US economy, contrary to the doom and gloom, is doing alright. Because the US government can finance these net-negative people at virtually no cost due to reserve currency status, corporations can reap all of the top-line profits from consumer spending.

The result is that many economic metrics can remain strong even with a low labor force participation rate and a high level of debt.

Economies of scale and rapid gains in technology also helps by increasing utility, meaning that even if real wages remain stagnant and the labor force participation continues to decline, technology will provide enough utility to keep people satiated. Technological progress provides a deflationary force by making things cheaper, better (more utility), and more abundant. Cheap food, electricity, and clean water are available to everyone of all income levels, whereas generations ago there was more scarcity. But this is not the same as post-scarcity economy, because there will always be some scarcity such as for status-signaling goods, as well as costs for services like insurance, daycare, gas, cable, and internet. This is also why a basic income is unnecessary, because of existing entitlement spending programs and abundance due to technology and mass production.

However – through the creation of industries, technologies, and research – smart people tend to produce more economic value than everyone else, so as to not let cognitive capital go to waste, I support a high-IQ basic income. It’s like a government Mensa that pays its members. Very un-egalitarian, but seems only fair given that the fate of the economy hinges on the ability of these smart, productive people to support the millions of net-negative people.

Can the equilibrium be disrupted? Technically, anything is possible, but I don’t see it happening. Globalization and reserve currency status changes the rules of macroeconomics, allowing the US government to perpetually fund deficits without the usual side effect of bond-based inflation. This is because America is able to export its inflation.

The US economy is a sweet spot where growth can help inflate the debt away, but a slowdown will cause yields to plunge. Thus in either scenario, debt interest as a percentage of GDP is unchanged. A recession would probably cause medium and long-term treasury bonds to fall as much as 30% such as in 2001, 2008, and 2011.

Despite steady GDP growth, debt forecasts are already being lowered:

Still, the nonpartisan Congressional Budget Office, in its annual long-term budget outlook, projected that by the fiscal year 2040 the government’s debt would be equal to 107 percent of the country’s annual economic activity — up from the current 74 percent of gross domestic product. Last year the budget office projected the 2040 debt level would reach 111 percent of G.D.P.

A gain of 33% over a quarter century doesn’t seem too scary. The fact that Japan, which has a weaker economy than America, is stable despite a much higher debt to GDP ratio ratio than America, is reason enough to not be too concerned about America’s debt. Like America, Japan’s labor force participation is a multi-decade lows, falling from 73% in 1955 to around 60% today.

Furthermore, according to a data compiled by Joe Wiesenthal of Business Insider, America has substantially more assets than debt:

Total assets are around 1300% of GDP. Some of these assets are non-performing and should be sold.

…the budget office shaved a half-percentage point from its forecast of last year, putting the cost of interest on the debt at 4.2 percent of G.D.P., down from a projected 4.7 percent last year.

By comparison, interest costs in this fiscal year are 1.3 percent of G.D.P.

It’s worth reminding that interest payments are still ridiculously low. Should medium and long term interest rates remain as low as they are now, debt forecasts will continue to fall. A lot of these scary debt forecasts were made in 2012 & 2013, when it was predicted that interest rates would quickly rise, but with the fed forever dovish, and due to deflationary forces from falling oil and weakness in Europe, China, and emerging markets – treasury yields keep falling. It seems like every time the ‘experts’ predict inflation, deflation strikes instead. Everyone is expecting things to return to how they were in a pre-2008 world, where 4-6% interest rates were the norm, but those days are most likely gone forever. There’s just too much deflation, too much fear and flight to safety. Due to globalization, we’re in an era of currency wars and the ‘race to the bottom’ as countries depress their currencies to boost growth, with the US dollar the winner. China is trying to depress the Yuan, so dumping their holdings of dollars would be counterproductive, helping to keep interest rates and inflation low in America.

The slight reduction in the economy’s predicted growth is “primarily because of the slowdown that C.B.O. anticipates in the growth of the labor force,” the office said, as “the fraction of the population that is of working age shrinks.”

Fewer people working means less inflation , hence lower interest payments. But consumer spending and economic activity doesn’t fall even though fewer people are working. **

But that does not mean I condone wasteful entitlement spending – I don’t – but I don’t see a crisis anytime soon. I’m guessing what will happen instead is that the economic contributions from the most productive will be able to compensate for the least. The future is one where a decreasingly small percentage of individuals and corporations contribute to the bulk of economic output and activity – the Pareto Principle again, in which 20% contributes 80%, as shown below:

In the future, the curve will become steeper – possibly until a singularity is attained – one company to rule all- the Matrix? This could be the ‘other’ singularity, but instead of AI and computing power, it’s a company or economic entity.

* A more detailed explanation involving Modern Monetary Theory can be found here. To sum it up, when the government runs a deficit, it helps corporations. When it runs a surplus, it hurts them.

** This is due to the US govt. running a deficit, which helps corporations; various entitlement spending programs; private sector spending even if it adds to the deficit; and rich consumers both domestic and foreign compensating for weakness in America’s middle and lower class. The Pareto Principle also applies to consumer spending, with the richest 20% contributing 80% to consumption. Also, rise of the BRIC ‘middle class’, with billions of new consumers to supplant America’s middle class.

Thoughts on Kaczynski’s Manifesto

Roosh V peruses the Kaczynski manifesto.

From the manifesto:

Leftism is collectivist; it seeks to bind together the entire world (both nature and the human race) into a unified whole. But this implies management of nature and of human life by organized society, and it requires advanced technology. You can’t have a united world without rapid transportation and communication, you can’t make all people love one another without sophisticated psychological techniques, you can’t have a “planned society” without the necessary technological base.

The Industrial Revolution was supposed to eliminate poverty, make everybody happy, etc. The actual result has been quite different. The technophiles are hopelessly naive (or self-deceiving) in their understanding of social problems. They are unaware of (or choose to ignore) the fact that when large changes, even seemingly beneficial ones, are introduced into a society, they lead to a long sequence of other changes, most of which are impossible to predict. The result is disruption of the society. So it is very probable that in their attempts to end poverty and disease, engineer docile, happy personalities and so forth, the technophiles will create social systems that are terribly troubled, even more so than the present once.

Kaczynski has become something of an oracle or prophet in recent years, with far-left liberals and far-rightists finding common ground in his scathing critique of technology and industrialization.

The problem is Kaczynski is conflating three things; technology, unfulfillment, and liberalism, when the argument for such a convergence is tenuous at best. The mechanism for how technology leads to liberalism is unclear. Anomie and ennui and the clinical depression that may arise from it could be seen as more pathological than environmental. Depression dates back to antiquity. Was Lincoln’s depression attributed to technology? I think not, as he lived a minimalist lifestyle.

Assuming suicides are a proxy for depression, the suicide rate has been stable for decades, despite technological innovation:

If Kaczynski’s thesis were true, we would probably expect suicide rates to keep rising, but they haven’t.

Similar flat trends are observed for clinical depression.

Technological progress has been uninterrupted since the advent of agriculture ten thousand years ago, yet political correctness and other symptoms of liberalism, historically speaking, is a relatively new development. Creeping liberalism is not stopped by ending technology, but by addressing the underlying affliction (bad policy, democracy, for example). The ancient Greeks and Romans, for example, embraced technology and thrived as a culture and civilization for over a millennia. Same for the Ottoman empire and Holy Roman Empire, both which lasted a long time and neither were done-in by technology.

Efforts to suppress technology have also had disastrous results, an example being Pol Pot whose vision of an agrarian dystopia claimed 1.5 million lives or about 25% of the Cambodian population. Although Kaczynski is anti-communist, in a 1977 journal entry proclaiming he would “… like to kill a Communist,” reverting society to a pre-industrialized state would probably cost millions of lives due to famine, making the end result indistinguishable from a typical 20th-century communist regime, but on a global scale. So essentially, Kaczynski is proposing a solution that is worse than the problem.

There is also a tendency among people to read into Kaczynski what they want to believe; for the welfare left, they agree with his criticism of technology, of how technology has created wealth inequality and unemployment, ignoring that Kaczynski didn’t like liberals. Conservatives agree with Kaczynski’s criticism political correctness, as do I, but that doesn’t mean the rest of his manifesto is correct.

Against the Ubermensch

In the past year or so, we’re seeing a re-branding or transformation of NRx…less Nietzsche’s ubermensch as embodied by John Galt (and the Californian ideology) and more like Oswald Spengler or Pat Buchanan. Maybe the old, pre-2014 NRx may have put too much emphasis on capitalism, individualism, and technology and not enough on culture and identity politics, as man lives not within his mind but as part of a social order and culture. Maybe this is a step in the right direction to broadening the appeal of NRx…idk, I kinda like the ubermensch version of NRx more.

Brett Stevens of Amerika.org writes:

Libertarianism tends to collapse under this contradiction. They know liberalism is bad, but want to follow its same method: “Everyone is free and equal, and stuff magically works out through Social Darwinism even though most people are idiots!”

And from Collectivism vs. Capitalism:

By the same token, I find the reliance on absolute capitalism as a motivator to be unworkable, which is why I am not a libertarian. Libertarianism always shifts leftward because it is based in the egalitarian idea of “Everyone do what they want, and the best will magically rise to the top.” This is far from true, as any look at the most popular movies, music, art and novels will show us. Instead, pure capitalist societies are a race to the lowest common denominator and, like socialism, they replace the idea of a purpose to the civilization with the idea of it facilitating individuals. This is also bad

A common criticism of Hollywood is it produces mass-consumption dreck, and maybe there is some truth to that, but these movies are also very profitable, allowing studios to fund potentially unprofitable movies for a more sophisticated palate.

Capitalism is the opposite of egalitarianism, if we go by the Wikipedia definition of egalitarianism:

….is a trend of thought that favors equality for all people. Egalitarian doctrines maintain that all humans are equal in fundamental worth or social status, according to the Stanford Encyclopedia of Philosophy.

Is Bill Gates or Elon Musk of the same worth or social status as a laborer? I think not, as the former produces more economic output indirectly than the latter and thus is rewarded with more money and prestige. Maybe culturally we’re seeing regression, but the arrow of technology always points forward, thanks in part to capitalism, which creates economic incentives to innovate.

Maybe there is confusion over libtertarianism and, related, classical liberalism. Classical liberalism is
not the same as welfare liberalism, although they are often merged the umbrella of ‘liberalism’ or ‘progressivism’.

Although the founding fathers may be in the same vein as Lockean ‘progressives’ – but, as I explain, today’s welfare/SJW liberals bear no resemblance to the Lockean progressives of yesteryear, and the founding fathers were were critical of democracy, too. The point is, I’m seeking a middle ground between the House of Stuart, The Constitutional Convention, and the Pre-WW2 America – but we keep the technology and rollback the liberalism.

Attacks on libertarians may amount to a strawman, mainly because there are few true anarcho-capitalists (David D. Friedman is one of the few); instead, partial libertarianism tends to dominate, which combines free market capitalism with some sort of watchman/guardian state. ‘Free and equal’ means equal opportunity within the rule of law, where each man can compete to the best of his abilities. It doesn’t have to mean equal outcomes or that all men are created equal.

And It’s true most people are ill-informed of the issues and will vote to enlarge the welfare state for personal gain at the expense of the productive, which is why democracy is so harmful.

This is why a theology-based approach generally focuses, as Plato did, on the difference between good and bad. His moral statement — “good to the good, and bad to the bad” — is roughly paralleled in Christ and anticipated in the Hindu scriptures.

America was conceived through Christian doctrine – that all men are created equal, that they are endowed by their Creator with certain unalienable Rights. I, and maybe some other libertarians and reactionaries, reject the idea that all men are created equal; genes make some better than others upon conception, and this is manifested in real life through the differences of socioeconomic outcomes between individuals and groups – Social Darwinism.

I don’t see how a ‘theology-based’ approach is congruent with the HBD and economic positions of NRx. That doesn’t mean Christianity can’t exist in an NRx-state, but it should probably not be the guiding principle. The delineation between ‘good’ and ‘bad’ may be genetic. With recent advances in biotechnology, scientists are finding genetic correlations for virtually all behaviors and attributes, whether it’s criminality, obesity, alcoholism, or intelligence.

From Citadel Foundations, Is Technological Responsibility Possible?

I’d propose the answer is not as easy. It seems self-evident that the death of entropic Liberalism will end in catastrophe rather than transition. There are ethnic, religious, military, and economic factors which ensure this on a global scale, which both enhance dangers and spread them over wide areas.

Some on the ‘alt right’ associate technology with liberalism, arguing that the convergence of technology and capitalism may be disrupting the old social order, making society more liberal, godless, and materialistic (Materialism).. But, on the same token, liberals often blame technology for displacing jobs and creating wealth inequality.

According to the Catholic Encyclopedia of 1907-1912, materialism, defined as “a philosophical system which regards matter as the only reality in the world [...] denies the existence of God and the soul”.[19] Materialism, in this view, therefore becomes incompatible with most world religions, including Christianity, Judaism, and Islam. In such a context one can conflate materialism with atheism.[

You can see how this would conflict with with the more theocratic variants of The Right, who tend to be critical of laissez faire capitalism…

But I believe optimism over technology is compatible with NRx.

Reactionary modernism is an example of how reactionary ideals and modernity can coexist:

Reactionary modernism is a term first coined by Jeffrey Herf in his 1984 book, Reactionary Modernism: Technology, Culture and Politics in Weimar and the Third Reich, to describe the mixture of “great enthusiasm for modern technology with a rejection of the Enlightenment and the values and institutions of liberal democracy” which was characteristic of the German Conservative Revolutionary movement and National Socialism.[1] In turn, this ideology of reactionary modernism was closely linked to the original, positive view of the Sonderweg, which saw Germany as the great Central European power neither of the West nor of the East.

From Wikipedia on Luddites:

The movement can be seen as part of a rising tide of English working-class discontent in the late 18th and early 19th century. An agricultural variant of Luddism, centering on the breaking of threshing machines, occurred during the widespread Swing Riots of 1830 in southern and eastern England.[7] [b] The Luddites’ goal was to gain a better bargaining position with their employers. They were not afraid of technology per se, but were “labour strategists”.[11]

The origin of the left-right divide dates back to King Louis XVI :

In the 1790s, King Louis XVI was fighting with the Legislative Assembly. Like our modern-day House of Representatives, seating in the French Legislative Assembly was arranged based on political affiliation. The King sat in front of the assembly. To his right sat the conservative Feuillants who backed the king and believed in a constitutional monarchy. To his left sat the liberal Girondists and radical Jacobins who wanted to install a completely democratic government.

The left has always been about the tyranny of the proletariat, whether it’s the October Revolution, the French Revolution, or anti-industrialization. The attack on technology is part and parcel revolutionary of nature, generally motivated by leftist redistributionist/collectivist ideals of the worker or proletarian rising against some sort of oppressive masterclass. And maybe some of this populist revolutionist thought may have bled into NRx.

But modern liberalism – as characterized by the misandry bubble, the SJW movement, and leftist indoctrination in the schools and colleges – is a better target than technology and capitalism. There are enough enemies on the left already.

Some also argue that technology and capitalism is the antecedent of radical liberalism or that the two are always linked, but as I show in the article about reactionary modernism – as well historical examples such as the Flavian dynasty of the Roman Empire, and 20th century America (specifically, before the ratification of the Fifteenth Amendment) – it doesn’t have to be that way. The Flavian dynasty, which was slightly more ‘moderate’ than Julio-Claudian dynasty that preceded it, helped restore stability Rome after turmoil following the suicide of Nero. Even the Roman Republic forbade women from voting.

Citadel continues,

What does the aftermath look like? Unknown. It seems that technology could fall prey to the survival instinct. Can factories be maintained when civil order unravels?

But, as Steven Pinker showed in his book The Better Angels of Our Nature the historical trend has been towards less violence, possibly due to technology and trade acting as an economic incentive against violence.

A recent paper The Industrial Peace: Schumpeter, Conflict, and the Investment-War Tradeoff agrees:

Citadel continues,

Can companies justify continuing the production of goods to populations in no position to buy them?

This argument comes up a lot. Capitalism makes things cheaper and better, examples being TVs and computers. Because inflation is so low in America, it’s easy for people to afford stuff, even if real wages are stagnant. If corporations observe consumption is falling, they may respond by lowering prices, which lowers profits, and eventually GDP falls and the result is a recession. But corporate profits are at record highs. Consumer spending is at record highs in spite of record high wealth inequality:

Even if the growth rate of US consumer spending is declining, foreign consumption is enough to compensate.

Somehow capitalism keeps working, despite the critics.

4) All technologies should be passed through a moral lens. Just because we can do something, does not mean we should, and rather than viewing morality as the Modernist views it, a series of values judgments based on our subjective feelings, we should see it as a rigid guide with profound consequences for violation, not just for individuals, but societies at large.

Capitalism may be the best ‘moral lens’. Technologies that are unpopular die in the marketplace. And who should make these decisions as to which technology is moral or not? Consequentialist applications of technology can indirectly save and improve lives. For example, such as the atomic bombings of Hiroshima and Nagasaki, which in the long-run indirectly created peace and saved US lives by abruptly forcing the surrender of Japan.

Pro-Technology = Marxist?

From Esoteric Trad: Neoreaction’s elephant in the room

Techno-Commercialists make up a portion of NRx and their position is quite popular.

Maybe he means it’s popular outside of NRx, but from my observation it’s no longer popular inside of NRx, in which the trichotomy has become a dichotomy of traditionalists and ethno-nationalists, with the techno-commercialists on the periphery. This ideological friction is understandable because capitalism can sometimes conflict with ethno-nationalist interests. But where we agree is in our rejection of egalitarianism and democracy. And there are some possible valid criticisms of capitalism: how commercialism and the breakdown of the family structure can cause anxiety and anomie. Free market capitalism demands a lot from people to ‘keep up with the joneses’, and many people cannot keep up – due to biology and other reasons. The stock market making new highs, but many people are left out. But the problem isn’t capitalism or greedy people, it’s low IQs and bad life choices – majoring in worthless subjects, bad work ethic and poor manners (Charles Murray offers some advice), and, for better or worse, some people just aren’t smart enough (which is the thesis of The Bell Curve and other Charles Murray books). Immigration and outsourcing may also play a role, which is where the friction between ethno-nationalists and commercialists lies. In an earlier post, I present evidence H-1B visas don’t depress wages or employment.

The NRx ‘trichotomy‘:

So, yeah he doesn’t have to lose sleep over technologists taking over NRx. But I think some technologists who may agree with parts of NRx be may be hesitant to bear the NRx/Dark Enlightenment label for fear of bad press. Just talking about ‘exit’ is enough to stir a frenzy.

Marxism is another belief system that inherently is striving for more and more efficient technology, to liberate man from the conditions of work.

Not so sure about this…while Marxists may support technology to bring about a post-labor society, not everyone who supports technology and post-labor is a Marxist. There will always be capitalism, scarcity, and markets, even if the labor force shrinks and or a lot of job become automated (which is assuming the Luddite Fallacy stops being a fallacy). Rapid gains in technology hasn’t made healthcare or tuition more affordable. Same for insurance, day care, and other services. There will always be demand for positional goods to signal status. There may even be a form of capitalism that exists between apps and robots, excluding almost all people. And also, many on the left criticize technology for creating wealth inequality and separating workers from their ‘means of production’. Technological determinism – a reductionist theory that presumes that a society’s technology drives the development of its social structure and cultural values – does not have to lead to Marxism (abolition of private ownership of production), despite originating from Karl Marx. It’s liberals who are, in fact, ‘pro-work’, not conservatives. It was the welfare left in 2008 & 2009 who wanted to put everyone to work, against market forces, the result being a useless stimulus that created few jobs relative to its cost due to market forces working against it. Liberals want to put everyone to work, provided the jobs are overpaid, have excessive benefits, and employers don’t make too much profits. This ‘pro-work’ sentiment was taken to extreme by Communist regimes where millions of people were worked to death – hardly in agreement with the post-labor utopia Marx wrote about.

Nick B also counters:

I don’t think “faith […] in technological advancement” is the right way to frame Neoreaction’s position. Man is a tool builder. As Man advances, so will his tools, so helping Man advance, and so on. This pattern is nothing other than the development of civilization. A priori, it is a difficult achievement. Few peoples find it. But they’re mostly extinct. The “faith” you speak of, so much as it exists, is more in Man’s nature as a builder of technologies that help him master the physical world as well as the social.

Agree. Tools are how man controls his environment instead of being enslaved by the whims of it. It’s this desire to create, partly motivated by our understanding of our mortality, is what separates man from less evolved animals.

Then you have the whole Red Pill movement, which is ideologically similar to NRx and also pro-STEM. STEM not only pays well and brings respect, but is an island of sanity and rationalism in a sea of leftist higher education indoctrination. We need to stand behind the technologists who are also under assault by the SJWs, not turn our backs on them:

Tim Cook, who is gay and has social justice tendencies, doesn’t speak for all technologists. Just as a pedophile priest isn’t representative of all Catholics.

Embracing Modernity, Part 2

From the infamous Nov. 2013 Tech Crunch article Geeks for Monarchy: The Rise of the Neoreactionaries that introduced thousands of people to NRx:

Neoreactionaries believe that while technology and capitalism have advanced humanity over the past couple centuries, …

The veracity of this statement is questioned among many reactionaries who argue that technology and free market capitalism has made things worse by disrupting the ‘social order’, a view held by many paleo conservatives. Based on my own readings and my involvement, it definitely seems like NRx is rejecting the ‘Silicon Valley/technology’ subculture and putting much more emphasis on tradition and ethnocentrism, and this is especially evident in 2015 with ‘black lives matter’, the Confederate Flag, Donald Trump and immigration, and other social/culture issues that are on the forefront of the National Debate, pushing ‘technology culture’ to the periphery.

The technologists, while rejecting economic liberalism and some elements of social justice, aren’t really culture warriors. With the exception of the anti-feminist traditionalist George Gilder and others, the ‘culture wars’ are not their domain and they tend not to get too involved with those issues. But even George Gilder, who is a free market capitalist and anti-SJW, would disagree with the dovish ‘alt right’ over Israel and foreign interventionism, as well as issues such as immigration, since Gilder is notably pro-immigration. There is some acrimony by the right towards Silicon Valley over the later’s push for more immigration. Pro-immigration conservatives have faith in the rule of law to keep the state cohesive, despite the influx of new people, and see the free market has having precedence over ethnic interests. This divide between techno-capitalists and traditionalists on the rights just goes to show how diverse right-wing politics can be, even within the broader ideology conservatism. Among the the left, a similar divide exists among neo liberals, who support policy to create equal equal opportunities within a meritocracy, and welfare liberals, who want equal outcomes and for the system to be changed completely to achieve this goal.

Throughout this blog, I’ve argued against stagnation and in support of modernity, a version of NRx which puts me among a very small minority of the fledgling movement, which now seems to have become a dichotomy. There is even a Wikipedia entry for this – Reactionary Modernism – which embraces technology and modernity but rejects liberal ideals, so to some extent that’s what I am, but with more emphasis on personal freedoms and free markets.

Technology is how civilization advances, and if society fails the biggest losers will be the most productive and competent, who have the most invested intellectually and financially in Western civilization succeeding. Modernity, whether it’s the invention of fire in ancient times, to quantum computers today, is how people control their environments instead of merely being subjected to the whims of them, and it’s our ability to not only understand abstract concepts like mortality and finiteness but also take active steps to control it, is what makes modern humans unique from any other animal. Dinosaurs could not control their fate, and they had no such concept of mortality. We, as humans, do. And perhaps the onus is on the best and the brightest among us to create the technologies to save future generations from the unknown, future disasters that loom.

Charles Hugh Smith in an article, One Word Defines This Era: Stagnation laments how progress has stagnated, writing:

How many of you can honestly claim that the services you get from government or global corporations are better now than they were in 2000, or 1985? Get real, people; more often than not, the service has declined or stagnated rather than improved.

But there are improvements, it’s just they they don’t get as much media coverage as doom and gloom.

One examples is that Chronic lymphocytic leukemia (CLL) can be cured or put into long term remission, whereas in 1985 the mortality was much higher.

For example, the M.D. Anderson Cancer Center recently analyzed 1148 CP-CML patients and showed that the 8-year survival was ≤ 15% before 1983, 42%-65% from 1983-2000, and 87% since 2001.6 Therefore, the projections for the next decade, taking into account the recent progress with second-generation TKIs, are for the life expectancy of CML patients to be close to that observed in the general population.

http://asheducationbook.hematologylibrary.org/content/2012/1/122.full

Thanks to the drug Gleevec, Chronic myeloid leukemia (CML), which was one nearly 100% fatal, is now a chronic, manageable disease like AIDS:

Gleevec, marketed by Novartis, kicks chemotherapy in the ass, and is an example of how the free market improves lives.

Wages may seem stagnant but you also have to take into account new technologies and increased entitlement spending, although I do concede that the later is problematic and needs to be addressed, but solutions will be hard to come by. A problem that is decades in the making isn’t going to go away overnight. But when the left complains about paychecks not rising, they have to realize that everything from education to healthcare is being increasingly subsidized by taxpayers and employers, with out of pocket costs historically low. New technologies means you get more utility for your dollar. With Netflix, for $20 a month and the cost of internet, you can stream unlimited entertainment, whereas a generation ago entertainment options were much more limited. Americans are so well-fed there’s an obesity crisis.

That’s why I’m a little more hesitant to dismiss modernity and join the everything is doomed/sucks chorus. There is bad, but there is also good.

If you read Moldbug’s April 2007 essay, A Formalist Manifesto, while he rejects progressivism (and it’s modern liberal and conservative offshoots), moderation, libertarianism, as do I, his solutions are incrementalist – making small adjustments instead of creating a whole new system – which, is somewhat similar to my approach of optimizing cognitive and financial capital through better policy with our existing mixed economy.

But three, which is the real killer – so to speak – is that we are not, in fact, designing an abstract utopia here. We are trying to fix the real world, which in case you hadn’t noticed, is extremely screwed up.

So he says he’s not trying to make a Utopia, only fix our existing system from the perspective of how an engineer would do so so.

The goal of formalism is to avoid this unpleasant little detour. Formalism says: let’s figure out exactly who has what, now, and give them a little fancy certificate. Let’s not get into who should have what.
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To a formalist, the way to fix the US is to dispense with the ancient mystical horseradish, the corporate prayers and war chants, figure out who owns this monstrosity, and let them decide what in the heck they are going to do with it. I don’t think it’s too crazy to say that all options – including restructuring and liquidation – should be on the table.

Essentially, this is propertarianism, which is kinda similar to the minarchist or ‘night watchman’ state approach. He’s not rejecting technology, but rather the liberal/democratic values of ‘the Enlightenment’, which I agree with. This is also the view shared by Michael Anissimov, a NRx blogger who is pro-technology and anti-egalitarianism.

Technology may actually be a tailwind for the NRx cause, hastening the decline of democracy and egalitarianism, with IQ as the new caste system in our hyper-competitive post-2008 economy.

Liberalism is the Problem, Not Technology

A major part where the ideologies of far-left and the traditional right converge is in their mutual skepticism and distrust of technology and free markets, another is foreign policy. Liberals worry that technology will destroy jobs, create wealth inequality, and harm the environment. Conservatives worry that technology will disrupt the family structure and traditions, as well emasculate society. The libertarian/pragmatic right, in contrast to the palo/traditional right, is optimistic about technology and free markets. This schism in the right between these two ideological variants seems irreconcilable, as exemplified by a recent discussion on Return of Kings about the automation of jobs, in which some traditional conservatives seem to be agreeing with the paranoid Luddites on the left.

Anyone who has read this blog for any length of time should already know my stance on this issue. Conservative technologists such as George Gilder and Matt Ridley have shown that modernity and liberalism need not be mutually inclusive. I believe HBD and optimism can coexist and that America (and possibly China) is a unique HBD success story in that America’s free market system, for all its flaws, rewards talent and high-IQ better than any other nation. Look at Facebook, Snapchat, Google, Pinterest, Air BNB, Tesla, Uber..and many other American tech success stories. How many prominent tech companies came out of Europe or the Middle East in the past decade? Spotify?

This alliance by the far-right and the far-left against technology may be motivated by a changing economic environment that seems dispiriting for anyone who isn’t in the rarefied cognitive and or financial elite.

Sometimes it’s easy to feel resentment towards nerds, because whether it’s through web 2.0, stocks or real estate, they are the ones reaping most of the gains in this strong economic recovery while everyone else sits on the sidelines and watches. It’s like a revenge of the nerds in overdrive that will continue forever. Usually it’s the ‘old left’ that attacks technology, intellectualism and STEM culture, not republicans. From Star Wars to the space race to NASA and supply side economics, it has typically been the republicans as embodied by individuals such as George Gilder that have championed technology and free markets. Just like the libs like Peter Schiff and Nicolas Nassim Taleb believe that the bank bailouts didn’t work, this lib from National Review believes that the usefulness of technology has an asymptotic limit. The left lives in a world where exceptionalism – at both the individual and national level – is not only impossible, but undesirable.

Excerpted from: Liberal Attacks on ‘Nerd’ Culture

The reality of the situation is, whether it’s through coding, web 2.0, stocks, and real estate, the cognitive elite have a lot of pathways to quick, easy wealth though ‘self actualizing’ careers, whereas those of lesser intelligence tend to have fewer options, hugging the boundary of just ‘getting by’. True, not all high-IQ people become rich and some average IQ people do become very wealthy, but ignoring the anecdotal outliers the evidence shows wealth and IQ are positively corrected. That’s how you have all these college dropouts who become wealthy in the technology industry.

But back to the Return of Kings article, is technological advancement intrinsically good or bad? I argue it’s something to be desired, despite loss of jobs. Structural unemployment is a byproduct of technological innovation, the later of which results in rising living standards. So there is a short-term pain (job loss) for long-term gains (new technologies), as I explain the the example of the rock smashing industry. Second, there will always be new jobs, as the Luddite fallacy has a long track record of being a fallacy. They may not pay great or provide existential fulfillment, but they will be borne out by these new technologies.

Also some of this skepticism arises out of ignorance (willful and unintentional) of economics and empirical evidence, as the left imparts their own frustrations, fears and misconceptions unto the creation of these economic conspiracies and boogeymen that are responsible for their benighted state. Why does Justin Bieber make more money than a doctor? Supply and demand. There’s huge demand for his music but only one Justin Bieber; that’s econ 101, not a conspiracy. It’s easier to believe myths than to accept reality, especially if reality is holding a mirror. The left wants to believe America is in decline because they fail at life. They, the left, want to believe that the invisible hand of oppression, racism, corruption, the fed, favoritism, nepotism, crony capitalism, and feudalism is keeping them down, not factors like low-IQ and poor work ethic. But what if the aforementioned factors really exist, isn’t that a major impediment? It could be, but on the other hand, there there are all these instances of teen and 20-something college dropouts and immigrants who have become wildly successful in the past few years in the tech scene, all despite the left’s insistence that the US economy is in ruin/a scam/a bubble,…etc. So I can believe the left’s conspiracies or I can defer to the actual empirical evidence. The choice is obvious.

Snapchat’s Huge Windfall : The State of Web 2.0

Looks like my 2014 prediction of Snapchat, originally valued at $4 billion, being worth $30 billion by 2016 is coming true.

This talk of bubbles reminds me of 2007 when everyone, including all the experts, was certain Facebook was a bubble at a valuation of $15 billion after Microsoft invested; now it’s worth $200+ billion. Then in 2012 after Facebook’s hugely publicized botched IPO and Nasdaq error, all the experts again said the web 2.0 bubble had burst; the stock price and earnings have since doubled. Unlike the big blowups of Friendster, Myspace, Digg, etc..these post-2008 web 2.0 valuations have proven to be extremely sticky. Pinterest, Twitter, Dropbox, Air B&B, Tinder, Snapchat, Whatsapp, Uber, Instagram…all keep going up with no end in sight, year after year until either IPO (which finally creates volatility) or buyout. One mistake a lot of forecasters make is assuming that a steep ascent in an asset price must terminate with an equally steep crash (); anther overlooked but quite common outcome is things stay flat, which is what we’ve seen with many of these large web 2.0 valuations one they have reached maturity. An example is Twitter, which plateaued at a valuation of around $8-11 billion from 2008 all the way until its IPO in late 2013. And then Faebook, which hit a plateau of around $100 billion from 2011 until its IPO in 2013. There’s hardly any big failures or blowups, except perhaps Zynga and Groupon (although it’s still worth $5 billion).

My prediction is these web 2.0 valuations will keep rising for many years to come because that is the path of least resistance, and the investor demand and user growth for these companies is seemingly unquenchable. The unending web 2.0 boom and unending wrong predictions about its demise show how these ‘obvious’ parallels to the old tech bubble of 1995-2000 are just so wrong. There’s more at play here, such as the investor flight to quality (more money chasing fewer companies), huge user growth, huge monetization potential from smartphone engagement, the very large millennial population that use these services, and ability of these web 2.0 companies to carve out niche dominance and then keep it.

To understand the fight to quality, which we also are observing in the post-2011 US stock market, think about it like this: A VC firm has $x in assets. The historic market return is 7%. The firm can plow this money in to a guaranteed winner like Snapchat or Uber and make 100-300% within a couple years – up to 20x times the typical market return. Or they can divvy the money into dozens of smaller companies, of which one of them may become the net Uber, but the expected value of later allocation is actually less than the former strategy. Why gamble on scratchers when you can play an all-black roulette wheel. Because of risk-averse VC firms, many start-ups are turning to crowd-sourcing sites like kick-starter.

In 2012 when the left was certain Facebook’s mobile usage would cannibalize its highly profitable desktop-based advertising revenue, I correctly predicted that mobile usage would supplement desktop usage, not supplant it, because people would simply spend more total time online, switching between the desktop when at home and the mobile device when on the go. Total internet time has nearly doubled between 2010 and 2013 and desktop usage has remained constant.

As recent earning reports from Facebook have shown, making money from mobile users is not a problem:

An overused argument by the left is that successful web 2.0 companies like Facebook and Snapchat can be undone by a shrewd competitor, but this is easier said than done, especially in a market that is as saturated as social networking. A ‘this time is different’ argument can be made in that when Myspace was popular , social networking was an emerging industry and any company had the opportunity to seize and solidify market share. Facebook sized upon Myspace’s weaknesses and gained permanent dominance when social networking as an industry matured. The left predicted Ello would give Facebook a run for its money, but it faded – like all Facebook competitors past and present – as quickly as it emerged, and all that VC money spent on ill-fated AstroTurf PR campaigns about how Ello was the ‘not new thing’ – wasted. You saw similar ‘winner take all’ coalescence in the 80′s with personal computers and operating systems, and again in 90′s with search engines. Lycos, Yahoo, Alta Vista, Web Crawler, and Ask Jeeves were all supplanted by Google, which has remained on top ever since. Same for Microsoft; decades later Windows is still the uncontested market leader, with alternatives far behind. Another analogy is the formation of the solar system where initially you had a lot of chaos and dust, but after a few hundred millions years everything solidified into planets and has remained the same for billions of years.

Within the next year or two, we’re probably going to see Uber being worth $100 billion before IPO, Snaphat $50 billion, Tinder $10 billion, Air B&B $50 billion, etc. Take every present valuation and quadruple it. Back in the 90′s, $100 million was a big deal; now that’s just a rounding error or the equity of just a single early employee. Insane, but very prosperous times we’re living in. And it’s got a long way to go.