Shiny Dark Ages, Part 2 (Or, Ray Dalio Hates Money)

Or maybe it’s a tax write-off, I dunno…

So Ray is donating $100 million to education.[1] In Connecticut, no less. Gold medalist in the Shrinking Economy Olympics (enjoy your silver, Illinois). Lifetime achievement award for Generational Education Gap (congrats). Favorite of moving companies. Endurance race-to-the-bottom champion.[2] The answer to any parent who asks what they can do to improve their child’s education in Connecticut: move. And if you’re a low-income minority: move pretty much anywhere. That’s systemic failure borne from systemic incompetence.

So, $100 million for education and training programs? I’m sorry, but did I miss the empirical longitudinal study that demonstrates such a thing will produce positive results? Weird if I did because it would probably make headlines, being a first and all. I see headlines about a Florida-man attempting to rob a bank with a loaded burrito, but nothing about the great success of additional education funding. Huh.[3]

Ray also recently said “Widening income/wealth/opportunity gaps pose existential threats to the United States because these gaps are bringing about damaging domestic and international conflicts and weakening America’s condition.”[4]

To let’s suppose these two news items are related (education and income gap — not the burrito stick-up). So there’s “income/wealth/opportunity gaps” and the solution is education.

Peter Thiel takes a slightly different approach. The problem is a lack of technical innovation (e.g. STEM), though the solution isn’t purely education. (Peter would likely not entirely disagree with education reductionism but harbors skepticism about the education system, given that it’s the system that got us into this problem.)

Now Ray has about 7x more billions than Peter, so the Robin Leach Calculation makes Ray 7x more correct.

Caviar dreams aside, the view from history is a little different. The idea that the problem is education or STEM is an early modern analysis. When the appropriate institutions are established, then the issue may be labor supply, funding, standards, access, etc. But when the appropriate institutions are less than established, then the issue is the progenitive institutions, not the generated institutions.[5]

The observation is simple: technological innovation isn’t conjured out of the ether. Effective K12 education isn’t either. Both rely on other — progenitive — institutions, without which, committing resources to either is something akin to:

Rome, 3rd century

And after all those resources are committed, you have something like:

Rome, 4th century

Take a look at any large-scale education effort over the last twenty years. Now consider the reasons it failed. (No, it doesn’t matter which one you thought of — I know it failed.) The actual problem is far worse and more systemic than you imagined, and duct tape won’t fix it.

As a civilization, we are just getting over the Victorian fetish with labels and precision and getting to the point at which we can grasp the reality of these problems. One of my favorite examples of a quant-fetish reality-check is an EconTalk episode on infant mortality.[6] EconTalk is hosted by Dr. Roberts, a Research Fellow at Stanford University’s Hoover Institution, and the guest on the episode is Dr. Oster, a Brown professor with a Harvard PhD who specializes in infant mortality and related medical statistics (she’s an economist by training).

Here’s what’s fascinating about the episode. In pre-natal to first-month infant mortality, the U.S. is as good or better than anyone else. In months 2–12 after birth, the U.S. falls behind. (“Infant mortality” refers to deaths occurring pre-natal, typically 22 weeks or later, through month-12 after birth.) And yet, the mortality in months 2–12 during which the U.S. falls behind aren’t equally distributed; rather, they are demographically specific such that if you compare similar demographics (in Oster’s case, she was comparing the U.S. to Austria and Finland), the U.S. is still the same or ahead.

Finally, the host and guest conclude that the demographics that have unusually high infant mortality aren’t experiencing medical issues but rather cultural issues. Of course, culture develops from the institutions that support a community. In the end, the medical statistics that Oster worked with didn’t all represent medical problems but rather cultural/institutional problems. The same is true with education and technological innovation; not all education or technology statistics represent education or technology problems. Sometimes, the problem is much deeper.[7]

Consider the Dark Ages.[8] Despite what the Renaissance propagandists have told you, the Dark Ages were not a period of barbaric chaos but were rather a period of institutional transition. Core Europe was coasting on the Greek and Roman institutions that had come before while revising, reforming and creating new institutions.[9] The Catholic Church, systems of law and basic economics would take form by the 10th century, but the transition from ancient to modern institutions took time. Of course, technical innovation and education followed the establishment of these progenitive institutions. It would have been something between impossible and absurd to attempt to establish generated institutions (e.g. K12) prior to establishing the progenitive institutions. You can argue whether the chicken or the egg came first, but both came after the ecosystem.

I’ve previously noted that it seems to me that the Enlightenment ended in 1789 with the French revolution. That revolution produced The Rights of Man, a work of hypothetical fiction (reads like a pitch for a fantasy movie), which was inspired by but deeply contrasts with the Declaration of Independent (an empirical work). By the early 1800s, the West established two competing models: one was empirical that continued the work of the 18th century and the other was fantastical and drained the coffers of the 18th century. They competed through the cold war (governments made from the models) but by the 1960s, the empirical model began to eat its own. Humans are, by nature, memetic fantasists.[10]

Since the early 1800s, we’ve been coasting on the 18th century (good name for a book), more often getting it right than wrong but spending lavishly on nonsense (such was our inheritance) … but eventually the sclerosis of laziness and luxury metastasizes into petrification.[11] Of course, coasting on a trust fund isn’t the same as a concerted race to zero (another good name for a book; perhaps 1 to 0, a Thiel rejoinder). The Soviets employed a materialistic race to zero (and witness that it doesn’t take long for a great nation to hit zero), but the West simply went full Prodigal Son — not callous but rather destructively impulsive in its scholastic consumerism.[12]

The necessity of growth beyond inflation is the result of ravenous consumerism and public markets.[13] This unholy duopoly was embedded into capitalism and democracy and thus mutated the stability of free markets into an increasingly unstable race for net growth. Add to this the scorched-earth attack (rather than mere neglect) on those 18th century institutions and the result is exhaustion.[14]

We’re all trust fund kids, spoiled rotten by our cultural inheritance and spending freely until the funds run dry. It’s Prodigal Son time. Fund’s done. Time to go home.

Institutions took generations and centuries to gestate and establish; like building a cathedral, no one who begins the project witnesses the result. But now institutions can be established in years instead of centuries; it’s time to leverage Moore’s Law and establish new institutions. It can be done if we muster the cultural fortitude to admit the problem: we’re living in a dark age.

Imagine Ray’s quote via the 4th century: “Widening income/wealth/ opportunity gaps pose existential threats to Rome because these gaps are bringing about damaging domestic and international conflicts and weakening Rome’s condition.” He would have been right. Or imagine Ray’s quote via the 3rd century. Still would have been right. Rome’s sclerosis set in over centuries, which informs us that the most likely near-term outcome of our observations and angst is nothing. Rome took centuries to petrify into extinction; we will too unless we recognize that the problem is our institutions, not our standardized test scores.

[1] https://www.ctpost.com/politics/article/Bridgewater-mogul-offers-100-donation-to-CT-13744296.php

[2] Connecticut once had their RTTT application returned because they didn’t fill it out correctly. They weren’t permitted to refile it because it was after the deadline at that point. Believe it was for something like $100M. The compendium of incompetence reads like Monty Python fan fiction. Connecticut would have a Ministry of Silly Walks if not for the fact that a ministry so named would be truth in advertising and thus a glimmer of competence. If there were a Ministry of Silly Walks, Connecticut would name it the Department of Daft Penguins after substantial (yet productive!) consultations with the penguin union. Quick question: how many S&P 500 companies has Connecticut lost over the last few years?

[3] Soon I’ll post something about the Kansas City experiment — everyone contributing funding to education should be thoroughly aware of that disaster.

[4] https://summit.news/2019/04/06/billionaire-hedge-fund-manager-says-theres-about-to-be-an-uprising-in-america/

[5] A list/order of operations for institutions is included in this article: https://medium.com/@nathan.a.allen/bill-gates-bamboozled-out-of-10b-6c80e4a505ab

[6] https://www.econtalk.org/emily-oster-on-infant-mortality/

[7] Another fantastic example is the WIC program, which also demonstrates that infant mortality data often reflects cultural challenges more than funding or medical challenges. A review very much worth reading: http://www.welfareacademy.org/pubs/foodassist/wic.shtml

[8] We were just there: https://medium.com/@nathan.a.allen/shiny-dark-ages-part-1-58d7c4823ed3

[9] “Core Europe” is used because much of the area — Byzantium, North Africa, eventually Spain — was doing quite fine. The so-called Dark Ages did not establish itself in these areas the same way is was established in, say, the Piedmont.

[10] Cf. Instagram, youth culture, and the ridiculously fantastic https://medium.com/@nathan.a.allen/jake-paul-obnoxious-teenagers-a8044c524d9d

[11] Side note: theory of corporations — they start as companies with some dynamism — how else do they survive? — but if they grow beyond a certain point (revenue/time) they devolve into signifiers (see https://medium.com/@nathan.a.allen/institution-as-signifier-1db9da011107).

Exhibit A: the mess that is 2019 Google. https://www.wsj.com/articles/googles-advisory-board-crash-and-burn-11554506676?mod=hp_opin_pos2

[12] Scholastic … obsessive compulsions, echo chambers, heightened sense of unearned importance, dithering on minutia. cf. Consumer Reports.

[13] Discussed further here: https://medium.com/@nathan.a.allen/shiny-dark-ages-part-1-58d7c4823ed3

[14] Attack on institutions: https://medium.com/@nathan.a.allen/false-spirits-jacobin-jackals-43c2be64fb73

Think this description is too much? Here’s a wikipedia entry for you: https://en.wikipedia.org/wiki/Normalcy_bias

About Nathan Allen

Formerly of Xio Research, an A.I. appliance company. Previously a strategy and development leader at IBM Watson Education. His views do not necessarily reflect anyone’s, including his own. (What.) Nathan’s academic training is in intellectual history; his next book, Weapon of Choice, examines the creation of American identity and modern Western power. Don’t get too excited, Weapon of Choice isn’t about wars but rather more about the seeming ex nihilo development of individual agency … which doesn’t really seem sexy until you consider that individual agency covers everything from voting rights to the cash in your wallet to the reason mass communication even makes sense….

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