Free 15 min read

A Conversation With Felix Salmon

This is the edited transcript of an open Zoom conversation conducted on Sunday 3rd January.

Topics include: Cities, Covid, work, television, Trump, media, China, philanthropy.

I've known Felix for such a long time that we were chatting away before the Zoom session opened, and then segued into the planned Q&A without breaking for a formal introduction, for which error of protocol I apologise.

Felix is columnist and chief financial correspondent for Axios; author of that piece in Wired about algorithms and distributions which explained the 2008 financial crisis; a patron of the arts (in partnership with Michelle Vaughan, @black_von); an effective altruist; a bicycle rider; and an Englishman in New York.

The label "Question" in this transcript indicates a question from the Zoom room; if you were the asker of the question, and you would like to be identified, please email me. Likewise, if you spot an error, please point it out.

Robert Cottrell  []  


FELIX: ... a bicycle is something comprehensible. The diamond frame bicycle is one of the greatest pieces of design that has ever been created, up there with the suspension bridge. I have started using electric bikes now. I moved from having my own bike to navigating New York on a Citi Bike because Citi Bikes are much better for one-way journeys, and now Citi Bikes have an electric option. I love it. Lazy people can stop worrying about how hard it will be to get over this or that bridge. We'll just zoom around on beautiful bikes. Electric bikes have the potential to really transform cities.

There's quite a literature on how cities get to be the size that they are, and that has a lot to do with ease of getting around – the radius that you can travel from a given point in a given time. So we are measuring in minutes, not in miles, and the key number for an acceptable commute is something like 40 minutes. You want to be able to get from where you live to where you work within 40 minutes, whether you are walking or taking high-speed rail. Bicycles work so well because you can have lots of them on the street without causing traffic jams, and with an electric bike you can get pretty much anywhere in New York City in 40 minutes.

ROBERT: The clock strikes 17, we're into Zoom time and I feel that I should be asking you a first structured question about the year ahead. So I'm going to ask you the biggest one first: Do you think like this year is going to be better than last year?

FELIX: 2020 was garbage. A shit show. Terrible. So the bar is incredibly low. In terms of public debate, the low point of 2020 was in March and April when we were seeing exponential growth in Covid cases, everyone was shifting to log-scale charts, no-one knew when the exponential growth would stop or how it would stop. Every kind of extrapolation seemed reasonable, there was this great unknown in front of us, and it was terrifying. There is no way that we are going to find ourselves in that kind of situation in 2021, just because we know so much more now than we did then.

We know how the disease works. We know how it doesn't work. We even have a vaccine that can prevent it from killing people. Obviously some other terrible exogenous event may come along and make this year worse than last year in a different way, but in the absence of any such event we are not going to revisit those terrible weeks in March and April.

ROBERT: What do you think you've learned from 2020? In my case — it's something that came up when I was talking to Anatole Kaletsky last week — I've learned that Keynes was right when he said that in the future we could live very well while working very little. That's pretty much what we've been doing for the past year, except that we've been doing it involuntarily.

FELIX: I don't quite agree. One of the things that has been interesting and slightly counterintuitive about 2020 is that so many people did not lose their jobs entirely. They went on working. Lots of jobs disappeared in tourism, bars, live entertainment, the sections of the economy that were being vapourised outright, but most people don't work in those sections of the economy, and most people did not lose their jobs. They kept on doing their jobs and they found themselves working at least as much in 2020 as in a normal year. They were at home, but they were not leaning back in the La-Z-Boy living a life of Keynesian leisure. More typically they were taking the hours they saved by not commuting to the office, and adding those on to their working day.

So we can certainly go back to Keynes to refresh our ideas about fiscal policy, but I don't think his prophesy of a new leisured society has come any closer. Bear in mind, too, that many people had a lot more childcare to factor into their day, which had previously been outsourced to schools. You might push back here and say that spending time with your kids ought to be a pleasure, and a lot of parents, when they look back on their lives, will wish that they had done more of it, but even so, it can feel like work at the time.

ROBERT: In terms of what we might call billable hours of work, did you put in more hours last year than you would have done in an ordinary year?

FELIX: Because of the lockdowns? Yes, definitely. Because the way people stop working, the way I stop working in normal times, is that I physically remove myself from my computer and I go off to bars and restaurants and theaters and movies and beaches and mountains. I go places and meet people and do things that are physically somewhere else. And when you are stuck at home within a very small radius of your computer, you naturally just wind up spending more time on your computer, and spending time on the computer is basically what I do for work.

ROBERT: I think of your passions in life as being finance, fine art, and philanthropy. Let me ask you now about the arts, culture. Culture is supposed to thrive in adversity — starving artists cutting their ears off in garrets, dissident poets producing works of genius in the gulag. I appreciate that the Trump administration was more offensive to liberals than it was truly oppressive, but it seemed to produce a lot of outrage in a lot of artists, and I wonder if that led to better art.

FELIX: One of the things I used to do quite a lot when I wasn't working, or in order to not work, was go to the theatre. And I remember telling everyone who would listen in 2018 and 2019 that we were in a golden age of theatre, the productions on Broadway were astonishingly good. Things you might be lucky to see once in a decade were coming round twice a year. Theatre is a collaborative enterprise, it just ground to a halt in 2020, but yes, whatever the reasons, in the years immediately before 2020 it was spectacularly good.

It's become something of a cliché to talk about the golden age of television, at least since The Sopranos, but it's still true. The entry of Amazon Prime and Netflix and Disney Plus and Apple TV and streaming in general has created a a whole new universe of great TV shows. One of the highlights for me was Watchmen. I thought that was just an incredibly great show, and there have been many, many others.

TV, like theatre, is an incredibly complex, expensive, collaborative form of art, which for obvious reasons had to hit pause for much of 2020. But the time-frame of your question was the Trump Administration, and the answer is that it has indeed been an exceptional time for the big collaborative art-forms — theatre, TV, film. Sorry To Bother You, for example, was an amazing feat of creativity. I have every hope and expectation that we'll get back there post-Covid.

As for 2020 and Covid, well, by definition, it's much harder to do great collaborative things during a pandemic. So we're going to have to wait and see if that was a year for individual genius. If someone wrote a great novel in 2020 it will get published in 2022 and we will discover it in 2023. As to whether it will be a novel about Covid or foregrounding Covid is another question. King Lear was written in a plague year, 1606, but it doesn't have much to do with plague, explicitly at least. On the other hand, the last great plague in New York was AIDS, and that led to the creation of great art-works about AIDS and around AIDS: Angels In America, for example.

It also led to a fallow period for the performing arts in general because AIDS wiped out an entire generation of creative geniuses. It took a long time, decades, to recover from that. We have recovered, and the new generation of baby geniuses is here, and that's awesome. One of the few good things you can say for Covid is that it did not wipe out an entire generation of creatives in the way that AIDS did, or the double-header of the First World War and the 1918 flu pandemic did.

QUESTION: You have been talking almost entirely in terms of Manhattan, the City. What about the suburbs, and the wave of migration there?

FELIX: Really good question. Absolutely. During the panic months of Spring there was a very visible movement of people out of the city and into the suburbs and beyond — doubtless including people who were going to move anyway, and just did it faster, plus people who decided that Covid had changed the perceived utility of cities, it was nowhere near as much fun being in a city during a pandemic as during normal times. Inevitably you're going to see a mean reversion there. People are going to siphon back, out of the suburbs and into the city again, once Covid is suppressed on a long-term basis, and probably that's a good thing on an environmental level; the model of having cars and driving everywhere and low density planning is a bad mixture for the planet. It's also worth remembering that the suburbs are not always an escape to safety. The opioid epidemic was largely based in suburbs.

I still think I am long cities and short suburbs and maybe long exurbs. We talk now about a permanent shift towards more remote working, but the remote work trend will actually help cities and exurbs more than it will suburbs. If you want to maximise distancing, or you are indifferent to distancing, you can move to the middle of nowhere. The point of the suburb is to put you within that 40 minute radius for being able to commute to work. But if you don't need to live within 40 minutes, if you don't need to live in the centre of town, you also don't need to live in the suburbs of the town.

QUESTION: If 2020 was the year of Covid, 2021 will be the year of the vaccine. What do you expect there?

FELIX: If developing countries get the vaccine much later, or otherwise find it difficult to adjust and emerge from the Covid crisis, then inequalities of wealth between richer and poorer countries are going to increase. We've got liberalism pushing one way and altruism the other way and we need both.

The area of the world that I'm most concerned about right now, Sub-Saharan Africa, has been managing really quite well through Covid. The Covid hit was milder in virtually all of Africa — with the exception of South Africa — than it was in most of the rest of the world, partly because the population is so much younger. But if there is a long period of reduced growth to follow, say five slow years, then the compounding effects of that that are going to be incredibly bad in terms of persistent poverty.

As for access to the vaccine, it is a real problem but a fixable problem. Even under this US administration we saw an extra $4 billion going to GAVI, the global vaccination alliance. We do have supply constraints in terms of how quickly we can produce vaccines, but we also have more and more vaccines being approved in more and more countries. What we don't seem to have is any real IP constraints on the vaccines. If there is a way to produce these vaccines in Brazil, say, people will do that and no one will really object. Certainly China will be doing that, India will be doing that.

Right now we have two main vaccines being produced in large numbers and going into people's arms. Those are definitely going into rich people's arms, maybe into some poor people's arms too. That's going to give the rich world a head start of maybe nine months to a year in terms of vaccines. Even so, I'm hopeful — taking into account the number of vaccines that will ultimately be proven effective, the number of countries that are technologically capable of producing them, and the general global consensus that, in order for the world to get back on track, we need everyone to be vaccinated, not just the rich.

We are not going to vaccinate the entire world. We haven't been able to eradicate polio after all these years. There are still pockets of polio in Nigeria and Pakistan. By this time next year Covid will doubtless still be with us in some parts of the world, but we will have a clear picture of who has been vaccinated, who will be getting vaccinated soon, and who for whatever reason is not getting vaccinated, and we can act on that.

ROBERT: Change of topic. Do you think that the media has emerged stronger or weaker from the Trump presidency?

FELIX: When you say the media, you mean the news media, right? That's natural enough. When journalists think about the media, they think of journalism. Whereas, of course, journalism is a pimple on the face of most media organizations. Netflix is a media organization that has no journalism. Amazon Prime and Disney too. Technically, Disney does run a news organization, it's called ABC news, but ABC news is just an annoyance really to Disney and probably if they could get rid of it, they would because it's unhelpful to relations with China.

The media in general has done well out of COVID. People have been stuck at home streaming stuff on television. The news media has done well out of Trump: People have been reading more news than they normally do, not only because they are stuck at home but also because they've been feeling outraged about Trump or Trump's critics or outraged about police behaviour or outraged about protesters. In short, an uptick in disposable income, thanks to Covid-driven fiscal policy, has gone partly into subscriptions to news organisations, which have found themselves able to build up a bigger paying subscriber base.

So that's been good. In a subscription economy the lifetime value of a subscription can be enormous. Once you start subscribing to something, you generally stay subscribing to it. There will be a drop-off, but I doubt that the size of the drop-off will be smaller than the size of the uptick.

More subscribers means that news organizations have been able to beef up their coverage. We have learned how to do journalism remotely. We have great journalists doing great work and now they can get paid properly for it.

QUESTION: How did you position yourself vis-a-vis the Trump administration? Did you feel that you were an opponent, professionally, or a neutral commentator?

FELIX: Depends which hat I'm wearing. When I do my podcast, Slate Money, I am more open about — like, Trump just makes no sense and it's bad for the world and for the country. When I have my Axios hats on, I play it slightly straighter, more impartially. Both are fine.

ROBERT: What frustrated me early on about Trump was that we soon found we had nothing of value to learn from him. We just watched him bumping into things, and sometimes they broke.

FELIX: Even so, I have learned a lot about America and Americans in the past four years, especially in the past year. If you look at the 70 million Americans who voted for Trump with great enthusiasm in 2020, after it was abundantly clear to everyone exactly what he was about and what he stood for — that in itself has been an education, and not only for me.

Imagine the effect on the Biden administration, with John Kerry leading on climate change and Tony Blinken as secretary of state. How can these people hope to engage the world, and say, in effect: "We represent a trustworthy country that really cares about the world". The world is going to turn back to them and say, "You are not a one-party state. There will be another Republican administration eventually and we have seen what the Republican base believes in. We believe that you will be able to make promises that you can keep for the next four years, but what comes after that? You have just had four years of chaos in the White House, and a large part of your population seems to want another four years of chaos".

This is a really profound change for America's international relations. It is going to be very, very hard to undo the damage that Trump has done to international confidence in America, and all the more so while so much support for Trumpism is on show at the polls and in the Senate.

ROBERT: So Trump may have broken things in a way that can't be repaired?

FELIX: Let's say it will be really hard to repair the damage that has been done to American democracy, especially in this current post-election period; American democracy now looks intrinsically fragile. It was never perfect: The electoral college makes no sense, there's a huge amount of gerrymandering, Republicans and whites have much more power than they should do in proportion to their numbers, especially in state legislatures. Democracy was already weak in those ways, but now it is much weaker. Its mechanics still depend on 18th-century ideas of how long it takes for vote tallies to get across the country, that kind of thing. It needs to be made more robust.

ROBERT: What will be the job of the media during the Biden presidency? Does the media have a duty to help Biden rebuild confidence in the government of America?

FELIX: It took a while for the media to understand and accept just how much about Trump and his behaviour was objectively crazy.

ROBERT: At first they tried to dignify him, or at least to maintain the dignity of his office.

FELIX: And then they came to see that they had to report the news in an objective way, and the objective facts with Trump were that he and his people were doing crazy things. So if the media maintains the same objectivity with respect to Biden, they will find themselves reporting on a normal presidency which is dignified and not crazy. The news cycle will simply move away from the White House.

It's hard to remember anything before 2020, I understand this, but before Trump the news didn't used to all about the president all the time, you could go weeks without the president being on the front page. Biden will be off the front page for weeks at a time and that's going to be normal and that's going to be fine. We will be able to concentrate on everything else that has been going on in the world.

Biden has a lot of rebuilding to do inside government. The institutional capabilities of the permanent civil service have suffered badly under Trump. Many good people have left, and they have not been replaced. It will take years to get things back to where they were. When Obama took over from Bush, there was lots of goodwill on both sides, and even then it took the best part of a year to get the Obama team into place and working effectively. This transition is so full of bad will that it is scarcely a transition at all. So it could be that President Biden's ability to get much done will be constrained by Trump's legacy. There's lots of ways things might go horribly wrong. But I'm getting more hopeful.

QUESTION: What has Covid taught us about the relative effectiveness of democratic and authoritarian government?

FELIX: Interesting. When Covid hit China, the executive powers were initially too slow to act. But when did act, they acted with decisiveness, and they really got Covid under control very quickly in a country of a billion people. I think this experience made a big impression on the Chinese leaders themselves. They saw just how much power they had, and they saw the value of acting quickly and decisively. They are now applying those lessons in other areas — notably in reining in some business tycoons. They're basically saying: "Hey, if we can use this power in public health effectively, we can use this power in other places too".

It's possible that some effect of that kind will play out even in liberal democracies. New Zealand is a liberal democracy, but they've had an election which seemed to show that the population accepted and applauded the expanded form of executive power that the prime minister took upon herself when Covid hit. They were like, "thank you for doing that". Is that a mandate for acting similarly in areas beyond public health? You could see it that way.

ROBERT: It's been painful to watch America's handling of Covid, but if we see this as a trade-off between personal liberty and public health, is it possible that history might judge America more kindly?

FELIX: Tensions between American individualism and public health go back a long way. I've been saying for years that if an American government today tried to put fluoride in water or iodine in salt there would be an absolute uproar, they would never be able to do it, yet these are clearly effective and good public health interventions. The appetite of the American public for any kind of public health intervention has decreased enormously. That is a problem. We have seen with Covid how big a problem. We are seeing more of it in Britain too. And it's not a problem in which I see any silver lining.

ROBERT: Felix, a last question. I know you think a lot about effective altruism. We've all had a rotten year in 2020. So if we all want to do something good, if we all want to make our world better, what do we do?

FELIX: It depends who you are. High-end philanthropy is very strategic. It is Bono lobbying George W. Bush and world finance ministers; it is building institutions that change the world. I'm at the charity end of the spectrum. I like to find people who need help, and help them. There is no wrong answer here. The main thing is to do something rather than nothing. If you are thinking about giving your time or money to a good cause some time in the future, then do it sooner, do it now, front-load your effort. Give right now and give as much as you can afford to give. Think about it, but don't overthink it. If you need a starting point, go to


Free 9 min read

Anatole Kaletsky On 2020

Commentator and consultant Anatole Kaletsky talks with Browser editor Robert Cottrell about lessons learned from 2020, in a Zoom conversation for Browser subscribers and friends which took place on Sunday 20th December 2020, introduced by Uri Bram. This is a lightly edited transcript. Errors and omissions are those of the editor.

ROBERT: Anatole, you and I have known one another for a very long time, and I don't think we've seen a year like this past one. Do you think it's a year to remember or a year to forget?

ANATOLE: The answer depends on who you are. For some people it has been quite a profitable year; very profitable for Jeff Bezos; and a surprisingly prosperous year for many people in the financial sector in Europe, people who've managed to carry on doing their jobs, or, at least, receiving their salaries. But for most people it has been an absolutely terrible year.

Historically, it's definitely going to be a year to remember. A number of things have fundamentally changed course. The world is moving on to a new trajectory for years and even decades to come.

ROBERT: Are we talking here about changes in our systems or changes in ourselves? Are we seeing the world in a new way after the adversities of the past year?

ANATOLE: We have learned some things about human nature, the role of government, relationships between individuals and societies; but I don't think the pandemic has actually taught us that much about the ability of people to cope with extreme adversity, because actually, by the standards of the history, and by the standards of parts of the world today, the so-called suffering that we're all going through in Europe and America is very, very minor. Statistically, for most people the pandemic means the inconvenience of not being able to see one's friends or family, of not being able to go out shopping and so on. I don't think that even registers on a scale of human adversity.

Also, in Western societies, we've been offered the most amazingly comfortable safety mats by our governments. People in Britain have been comparing this year with the Blitz, but we haven't got bombs falling on us. Covid hasn't taught us much new about coping with adversity.

What the past year has taught me is that people in Western societies are now willing to accept more and more restrictions on their lives, which reverses or contradicts the conventional economic wisdom of the last 30 or 40 years.

People are showing themselves willing — even eager — to accept leadership and control from governments and other institutions. In this respect the past year really has marked a turning point. This is the end of an era of neo-liberalism during which the prevailing doctrine in Western societies was that people were individualistic, that they were determined to shake off the shackles of government, that they wanted to make their own way in the world.

What we're finding instead is that people can easily and quickly be tipped into great anxiety and great uncertainty. We keep hearing this word "herd", as in "herd immunity". People are desperate to find this "herd immunity", to find their "herd". They are showing themselves willing to accept instructions from governments which, in my view, do not always make sense.

To the extent that there is any kind of controversy in any of the major Western nations about the extent of government controls, all the opinion polls suggest that people want more control from government rather than less. This refutes the neo-liberal concepts drummed into us since the days of Margaret Thatcher and Ronald Reagan. Whatever people wanted in the 1980s, it isn't what people are really looking for now. What they want now is comfort, and control, and constraints, rather than freedom. That's how it strikes me. I've been really surprised at the degree of public support for lockdowns all over the world.

ROBERT: American individualism seems to have been largely counter-productive in the face of Covid; while in China, we've seen the upside of dictatorship — the forceful use of administrative resources has been very helpful in suppressing the pandemic. Is this a significant moment for the balance of soft power between America and China?

ANATOLE: It is. People are beginning to think: "Well, maybe it is better to live in a more controlled and regulated society than in some sort of free-for-all". The personality of Donald Trump has also been a major factor. So yes, alongside a psychological and sociological turning point, we can also see a geopolitical turning point. Much of the world is starting to accept the inevitability of China's rise to become a full and equal counterpart of the United States, not just economically, but also in terms of influence on the world, shaping the world's future, including the political future.

The rise of China has been under way for decades. But this is this year when the full consequences of that process become clear — equalisation between America and China, between the Atlantic and the Pacific, between the Western European liberal way of looking at things and the Asia Confucian way. It is very unlikely that either side is going to completely overwhelm or somehow sweep away the other.

ROBERT: Donald Trump's presidency has changed most people's ideas of America. Has it changed them irreversibly?

ANATOLE: The belief in American supremacy, in American dominance, has gone. So has the belief among a lot of people that American hegemony is a benign force in the world. You could say that these things have been breaking down throughout our lifetimes — since Vietnam, and then Iraq, and then the Arab spring — and that this is the culmination of a of a long process, it was going to happen anyway, sooner or later. But Trump accelerated things, and I don't think the effects will be reversible.

The other thing which is happening right now, in the last few weeks and even as we speak, is a crisis of of American democracy, of the idea that America is a model democracy. A third of the Congress and something like 50 or 60 million Americans seem to believe that the result of the election should be overturned in order to keep President Trump in office. That's not going to happen, but the very fact that there is this movement to keep Trump in office, a widely popular movement, must raise questions about whether America is still a genuine democracy. I'm not sure that genie can be put in back into the bottle. If much of America has given up on democracy, can we be confident that any democracy anywhere in the world is any more durable? Can we believe in German democracy, or French democracy, without American democracy?

ROBERT: You have been outlining here a fundamental shift in the way that people think about political ideals and political institutions; and a rebalancing of power between America and China. This feels like a prescription for immense uncertainty and for catastrophic mistakes along the way. To say nothing of the further effects of Covid. Why are so many financial markets doing so well, at least as we speak?

ANATOLE: There are two extreme viewpoints, both of which I have believed at various points during the year. One is that markets have just gone mad and that this is a bubble, a speculative bubble. You can point to Tesla, which is worth more than all the auto companies in the world put together, even though it hardly makes any profits. And have you ever heard of a company called Nikola? It is essentially a Tesla clone, which plans to make electric trucks as opposed to electric cars, and the name Nikola associates the company with Tesla in investors' minds. Nikola went public in March with no revenues and no profits and by the end of June its shares were up six-fold, valuing the company at more than $20 billion. They are down again now. So certainly we've had some market madness, and things do overshoot.

On the other hand, given that so many people were expecting that the shock of Covid would be catastrophic and would lead to a complete market meltdown, when that didn't happen, you got, not panic, but the opposite of panic, you got people saying: "Oh my God, I've been out of this market. I've sold everything. Buy, buy, buy". People were willing to buy everything. So you could say it's been speculative overshooting in both directions.

But I think there is another way of seeing things. The prospects for the world economy have actually improved tremendously as a result of what's been happening. What has happened is that governments have responded in ways going far beyond monetary policy. Central banks have been printing money like it was wallpaper since the 2008-2009 crisis, that's nothing new. The really big thing that has happened this year is enormous budget deficits — unlimited spending by governments, in effect, governments all over the world directly pumping trillions of dollars and euros into the private sector, giving and lending directly to companies, paying and subsidising wages, deferring or waiving taxes, on a scale that was not merely way beyond anything ever predicted or experienced, but way beyond anything that anybody even imagined possible.

ROBERT: Except for the modern monetary theorists.

ANATOLE: Even they didn't really believe it was possible. They believed it would work, theoretically, but they didn't believe it could actually happen. And it did. Let me tell you an anecdote.

Just after the lockdowns were announced in Britain and America, I wrote an article for my consultancy clients. I published a version of it on Project Syndicate saying: "Look, people are being prevented from going the workplace, from earning, from spending. In principle, this situation could be stabilised and resolved quite easily by having governments pump the equivalent amount of money into their economies, into their private sectors".

I did a back-of-the-envelope calculation and said that the world economy could be stabilized if every country spent between 15 and 20 percent of GDP, which they would have to borrow in the coming months and pump into their economies, preferably by providing wage subsidies of 80 or 90 percent of lost wages. I said it wouldn't end up costing very much at all because the central banks could print the money; it would be perfectly feasible; but we all know that governments are not going to do this. Anywhere. And, therefore the outlook for the world economy was frightening.

A week after I published that article, the British finance minister, Rishi Sunak, announced a policy of borrowing 15 percent of GDP, which would be £200 billion, and using the money to pay 80 percent of the wages of anybody unable to work because of  Covid. Things that had seemed completely impossible to me and even to the finance ministers themselves were being done. Another week later the American government came along and said: "Well, 80 percent, no, that's not good enough. We're going to pay 110 percent of the lost wages to everybody who's rendered unemployed by Covid". So, as a result of that, it became likely, or at least possible, that there would be a rapid bounce back the moment the public health situation recovered, which of course it hasn't yet.

What I think the business community and the financial markets are beginning to sniff out is that this is not just a temporary reversal of policies. It is a longer-term change in the philosophy of how the world economy should be managed. I think we are going back to a post-war — 1950s and early 1960s — philosophy about the role of government and the management of economic activity, which may lead to economic conditions more like those of the post-war period ... Somewhat higher inflation, but also much higher growth targets, with the object of maximising growth while minimising unemployment, and accepting the higher inflation that might result. Those conditions are actually pretty good ones for the stock markets and the property markets.

We can trace this change in philosophy back to the 2008-2009 financial crisis and the disillusionment that followed. There was a global disillusionment with neo-liberalism, Thatcherism, Reaganomics, whatever you want to call it. There was a sense of impending breakdown, but it wasn't clear what was going to come after this collapse of the market-fundamentalist view of the world.

Ten years ago I wrote Capitalism 4.0, in which I pointed out that capitalism had survived crises in the past by reforming in response to social pressures. It would emerge in some new version, although it was never obvious to anybody at the time what the new version was going to be. It would take ten or fifteen years for something new to emerge, and I think a period like this may be what we are going through now.

ROBERT: So Keynes may yet be proved right in his prediction that people in this century will need to work far less in order to live well? That's pretty much what we have been doing for the past year, albeit involuntarily.

ANATOLE: Or, it may also end in tears, very quickly. This image I've presented of a return to the post-war golden age of economic growth is not shared, I think, by the majority of economic commentators, who believe that the long-term consequences of printing and spending money will be more stagflation and social unrest, as in mid-1970s Britain. But if you look at the way that the financial markets are behaving, I'd say that mine may be the majority view among investors, even if few people consciously share it.

ROBERT: It seems we are re-discovering a whole new world of economics which has been more or less undiscussable for half a century if you wanted to be taken seriously as an economist.

ANATOLE: Something of that kind happened when Britain went off the gold standard in the 1930s. Sidney Webb, the Labour politician, said: "Nobody told us we could do that". Nobody imagined that Margaret Thatcher would be able to get away with making 3 million people unemployed in 1980s Britain, closing down industries that were thought to be the absolute foundation of the economy. What we believe we can or cannot do in economics is usually rooted in some arbitrary rules of monetary policy or deficit spending. The Maastricht criteria, for example, are just beliefs, they are not scientific principles, and I think we have now seen through them.

ROBERT: Your reference to Maastricht makes me realise that we have managed to review 2020 without once mentioning Brexit. For that and much else, many thanks.


Free 2 min read

China | Taiwan

involved: china, taiwan, hong kong, united states

The Chinese, despite having a reputation for opacity, are in fact quite meticulous in announcing their big moves well ahead of time, as they did with Hong Kong.

Thanks to Huawei and the trade wars, the retaking of Taiwan has now moved inside the Overton window of PRC policymaking: we're no longer hearing open-ended rhetorical proclamations of "one China" at party conferences; we're deep into think-tank debates and policy papers about cost-benefit analysis for Chinese supply chains (control of Taiwan Semiconductor would spare China from having to attempt a Manhattan-project-sized 2-10 year struggle to reach those levels of precision on their own).

I also sense the loose beginnings of an explicit timeline — "within Xi Jinping's term", which is in theory could mean his lifetime, but I think when people say that sort of thing they tend to mean five years.

I'm persuaded that the Chinese could explain away the Hong Kong debacle to Taiwan's satisfaction: It is a tragic truth that China did stick to its hands-off promises in the Basic Law (well 90% of them at any rate), and that Hong Kong was doing very well after 1997, until Hong Kong itself revolted, provoked largely by the stupidity and incompetence of its own local government. I'm not trying to mitigate the tragedy of Hong Kong here, just to say I think China could successfully rationalise its behaviour in talks with the Taiwanese.

I doubt anybody now thinks America would go nuclear against China on behalf of Taiwan; so, in a sense, the military bit is already over, since China would certainly be the better bluffer. Even in conventional weaponry I doubt the Americans would dare to fight inside the Taiwan Straits; they'd be lobbing stuff in from Okinawa.

We might then have a stand-off akin to a Cuban missile crisis, but nothing the Chinese couldn't escalate by dropping a small nuclear weapon on a US Antarctic base or unpersonned atoll or something, just as proof of concept.

So, all told, I can see the way to a Hong Kong-style autonomy deal for Taiwan which is acceptable to the Taiwanese. The sting in the tail for the Americans would be that their help would not even be wanted. And, after which, America would face a far more formidable China, once Taiwan with all its technology and weaponry had been integrated.

Free 3 min read

The Browser In 2020

involves: paywalls, Granta, Medium, Agnes Callard

My friend and colleague Jacob Silkstone, the Weekend Editor of The Browser, has been compiling our year-in-review issues which go out from Christmas Day to New Year's Eve, and also running some quick numbers on the pieces we have recommended throughout 2020. He reports:

In 2020, the Browser featured writing from 533 different publications.

The remarkable thing here is that almost every day of the year featured at least one publication unique to that day (on Christmas Eve, for example, we featured Bright Wall Dark Room for the first time all year).  

The majority of publications (344) cited were cited only once during the year.

The publications we recomended most often were:

1 New York Review Of Books (49 times)
2 Paris Review (37)
3= Aeon (35)
3= Guardian (35)
5 LitHub (23)
6 MIT Press Reader (21)

Granta was featured heavily in the first half of the year; Less Wrong in the second. Both make the top 10 of the full-year list.

I think the individual writer we've featured most frequently is Agnes Callard (8). Ed Simon has been featured 4 times.

We featured NYRB pieces almost every week until the start of November, and then stopped featuring them for the rest of the year. Similarly, we published 19 pieces from Granta, but barely any later than June. Anything to do with stricter paywalls at certain publications?

I can partially answer Jacob's last question. The New York Review Of Books redesigned its website and paywall in November. Under the old system, a few pieces from each issue of the Review were placed outside the hard paywall online; under the new system, as I understand it, visitors to the Review website have to create a free account to read anything much at all; I am not yet sure how the metering — the number of free-to-read pieces per visitor — works; and, consequently, with great regret, I have been hesitating to recommend Review pieces for fear that Browser subscribers will find it cumbersome or impossible to read them.    

As for Granta — everything they touch is wonderful, so the fact of their high ranking is not a surprise; the distribution across the year, however, is a surprise and a puzzle. I haven't noticed, still less reacted to, any overt changes in Granta's paywall; some pieces are free to read and some are not; I think it may be that free-to-read pieces early in the year were weighted more towards essays and memoirs; whereas free-to-read pieces later in the year were weighted more towards fiction and poetry, genres which in general feature much less frequently on The Browser.

I suspect Less Wrong would be placed even higher if I had attributed every piece I found there to the Less Wrong URL. In practice, where I saw that a Less Wrong post was cross-posted from a writer's own website, I would cite the writer's own URL, to encourage discovery.

My biggest frustration has been the Medium paywall, which pops up in all sorts of unexpected places, even on articles which the authors themselves have assured me are free to read. I'm in favour of paid content; good writing is worth good money. I'm delighted that publishers make so much fine writing available freely as a marketing strategy, enabling The Browser to exist in this flux as a sort of critic. But in Medium's case the paywall is operated by Medium, it prioritises the interests of Medium over those of the writers and publishers, and I doubt that it works very well for anybody at all — least of all for writers hoping to find readers, and readers hoping to find writers.  

Finally, I'm thrilled to see Agnes Callard topping our writers' list. I've admired her work since first encountering it via Tyler Cowen, whose conversation with Professor Callard was a marvel. I doubt she has ever said or written a dull word.

Professor Agnes Callard
Free 2 min read

Thinking Fast And Slow

involves: watches, time, predictability, punctuality  

I don't get the point of habitually setting your watch five or ten minutes fast, as some busy people claim to do. If you know that your watch is five minutes fast, you will surely compensate for that (or, worse, have a little argument with yourself about compensating) whenever you need to know the exact time (much more on this at Quora).

With smart watches, on the other hand, I do see a possible point in having a watch that shows the wrong time: I have in mind an app that would make an Apple Watch run fast by a margin that varied randomly within boundaries specified by the user; between zero and ten minutes, say.

The wearer of such a watch would, I think, be logically obliged to behave as though the watch was accurate, even while knowing it to be inaccurate, because the degree of inaccuracy would not be known, and so the margin of minutes which might or might not exist between the real time and the nominal time could not be exploited.

But meh, the more I think about it, the more I wonder if the stated reason for setting a watch fast — to avoid being late for things — can ever be the true reason, because (i) it's a bad method and (ii) there are so many better methods.

I can more easily imagine the habit as one inherited from the times (if there were such times) when hand-wound mechanical watches ran down during the day, so that setting one's watch slightly fast at the start of the day, on the assumption that it would slow down in the course of the day, would be a rational form of averaging (the spandrel theory).

Or, I can imagine the wearing of a wrongly-set watch as a sort of unspoken appeal for understanding, a discreet public signal that the wearer knows that they cannot manage their time, knows that they are habitually late, and is making this weakness generally known, even at the risk of appearing irrational, in the hope of giving less offence to those kept waiting (the mad hatter theory).

Which leaves me with four open questions, the third one of which has legs:

— What are the real reasons that people set their watches slightly fast?
— Would all those real reasons also be better satisfied by a watch that ran unpredictably fast?
— Do some people (power play?) set their watches a few minutes slow?
— Has somebody already made this watch app, in fact?

Free 1 min read

Exit, Voice And Cancel

involves: hirschman, revolution, cancel, hacking

If Albert Hirschman were alive today and working on a new edition of Exit, Voice And Loyalty, I wonder what additional strategies he might think worthy of inclusion for dealing with failing relationships between individuals and institutions.

Revolution is surely an obvious option; it may be seen as an edge-case of Voice, or an inverse of Loyalty, but it deserves a heading of its own, because of its scale and finality, and because modern revolutions are as much interventions from without as they are eruptions from within.

Cancel is the strategy of the moment; we might explain it to Hirschman as a form ostracism, and thus an inversion of Exit. In Herta Muller's words: "If only the right person would leave, everyone else would be able to stay in the country".

And what about Hacking — taking covert action to make an institution work better, or work more in the hacker's interest, or fail entirely? Computing has familiarised us with the idea of Hacking, but there must have been equivalent processes in pre-computing times.

Evasion, or Avoidance, is a strategy reserved for the rich and powerful, who can move their worldly goods to foreign jurisdictions, thereby gaining all the benefits of Exit with none of the inconvenience of actually exiting.

You can imagine Hirschman updating his discussion of Exit by going deeper into the "push" and "pull" components of migration. To what degree do you Exit because you cannot bear to stay where you are, and to what degree because you think you will be better off somewhere else?

Voice strategies will need to be reviewed in the light of social media (cf: Cancel).

As for Loyalty, discussion might best be omitted from this new edition. Loyalty is is no longer encountered in the world, save as a deception, and so may be assumed to have failed as a strategy.

Free 3 min read

To Recognise A Chair

involves: cognition, categories, lists, Borges

"To recognise a chair or a dog, our brain separates objects into their individual properties and then puts them back together. Until recently, it has remained unclear what these properties are. Scientists at the Max Planck Institute for Human Cognitive and Brain Sciences in Leipzig have now identified them, and found that all it takes is 49 properties to recognise almost any object"
News release from the Max Planck Institute
Full paper (paywalled)

The Max Planck Institute does serious science. Two of its directors shared Nobel prizes in 2020, in chemistry and physics. A paper from this source, claiming to have discovered the building-blocks of human perception, demands to be taken seriously.

And yet, at first read, it appears almost ridiculously flimsy, starting with the notion of "49 properties". In real life there is never 49 of anything, though there may be 48 or 50. The only place where you expect to find 49 is in a multiplication table, or on the front of a London bus going to Shepherds Bush.

God prefers to work in single figures. 49 is just too many properties to constitute a fundamental set of anything. The Universe rubs along with three primary colours, three or four dimensions, five basic tastes, five platonic solids.

There again, if we are going to go big, then 49 seems an absurdly small number of properties to contain all the perceptual experiences of the human race. One might just about hope to disambiguate the inventory of IKEA with the Planck variables; but if 49 variables can capture the known Universe, we ought surely to have created artificial intelligence on a pocket calculator fifty years ago.

The methodology for the Planck study consisted mainly of showing selections of images drawn from a database of 1,854 objects to 5,983 users of the Amazon Mechanical Turk remote-working platform, and asking the users to tag the objects.

The objects shown to the users included the following: "bazooka, bib, crowbar, crumb, flamingo, handbrake, hearse, keyhole, palm tree, scallion, sleeping bag, spider web, splinter, staple gun, suitcase, syringe, tennis ball, woman, workbench, and wreck"

I sense your impatience. What "49 properties" can distinguish a hawk from a handsaw, or a flamingo from a staple gun? According the Planck paper, they are:

— made of metal / artificial / hard
— food-related / eating-related / kitchen-related
— animal-related / organic
— clothing-related / fabric / covering
— furniture-related / household-related / artifact
— plant-related / green
— outdoors-related
— transportation / motorised / dynamic
— wood-related / brown
— body-part-related
— colourful
— valuable / special-occasion-related
— electronic / technology
— sport-related / recreation related
— disc-shaped / round
— tool-related
— many small things / coarse pattern
— paper-related / thin / flat / text-related
— fluid-related / drink-related
— long / thin
— water-related / blue
— powdery / fine-scale pattern
— red
— feminine (stereotypically) / decorative
— bathroom-related / sanitary
— black / noble
— weapon / danger-related / violence
— musical-instrument-related / noise-related
— sky-related / flying-related / floating-related
— spherical / ellipsoid / rounded / voluminous
— repetitive
— flat/patterned
— white
— thin / flat
— disgusting / bugs
— string-related
— arms / legs / skin-related
— shiny / transparent
— construction-related / physical-work-related
— fire-related / heat-related
— head-related / face-related
— beams-related
— eating-related / put things on top
— container-related / hollow
— child-related / toy-related
— medicine-related
— has grating
— handicraft-related
— cylindrical / conical

Scientists are wise to prefer the language of mathematics. Using plain English, as here, exposes their work to non-peer review. Some properties on the list overlap with others, some seem like sub-sets of others, some seem to incorporate category errors. But, even so: Viewed simply as a list, it is a masterpiece. Suggestive, surreal, provocative, enigmatic.  

I can think of only one precedent: The taxonomy of animals supposedly derived from an ancient Chinese encyclopædia called the Celestial Emporium of Benevolent Knowledge that is cited in Jorge Luis Borges's short story, The Analytical Language Of John Wilkins.

Borges's list assigns animals to 14 categories:

— those belonging to the Emperor
— embalmed ones
— trained ones
— suckling pigs
— mermaids
— fabled ones
— stray dogs
— those included in this classification
— those that tremble as if they were mad
— innumerable ones
— those drawn with a very fine camel hair brush
— et cetera
— those that have just broken the vase
— those that from afar look like flies

I prefer Borges's list, even for Planck's purposes. It captures the workings of my mind far better than the Planck list does. I often come across things that resemble "stray dogs" in their demeanour, or which "look from afar like flies"; I have never seen anything about which my first thought is, "it has a grating" or "it is beams-related".

For their next iteration the Planckers could try priming the Turkers by requiring the latter to read Borges's list just before starting to tag their bazookas and bibs and crowbars. Then we might move towards a fusion of the two lists, in which the "many small things" of the Planck list converged with the "innumerable ones" of Borges's list. Art and science would reach agreement on the name of everything, and the world could come to an end.

Free 2 min read

Increases In The Domain Of Openness

involves: psilocybin, liberalism, happiness, morality

"Evidence suggests [that] clinically administered psilocybin actively shifts political values, just as it shifts many other nonclinical characteristics. One study reported that the treatment decreased authoritarian political views in patients. That trial also detected another effect previously reported in healthy participants: Psilocybin use leads to increases in the personality domain of openness, itself a predictor of liberal values"
Scientific American

I am largely a liberal, in both the British and American senses, so this strikes me as excellent news; I want other people to be liberals too, to agree with me on the means and ends of life and government, so we can all be friends. Let us all take this psilocybin.

And yet, if I am a liberal, I want other people to feel free (perhaps even be free) to have their own opinions, their own beliefs. I would not want to beat another person until they professed agreement with my views; so how could I want to drug them into agreement? Is a pill more forgivable than a beating? Or is a pill more like an argument, whereby your opinion is changed without damage to your body?

Try the contrary thought experiment: What if there was a mushroom extract (or similar) which made people more authoritarian, more demagogic? What if I could take a pill which made me happy to see people like Putin and Orban and Xi and Trump running the world? Should I take it, and have the satisfaction of feeling that the arc of history is bending in my favour?

This is a moral question of sorts, and morality, to endure, does need, in some way, however vague and distant, at least to seem capable of producing individual happiness. I want to feel that, even if my moral judgements cause me inconvenience or pain in the short term, they will give me satisfaction in the long term. One way to reconcile those aims is for me to act according to my morality, and hope that my example will change the world in my favour. But what if I could choose my morality by means of a mushroom? Then, surely, I should choose to change my morality to suit the world in which I live.

In the meantime, as a liberal, and in the present state of science, I suggest using crop-dusting aeroplanes to spray fine mists of psilocybin over selected centres of population with a view to seeing how the world evolves with a larger proportion of its population intoxicated by liberalism. If it all goes wrong, at least we can be open about it.

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