This Strange Machine: The One Percent and the Zero-Sum Economy

I know Kung Fu.

So the last will be first and the first last, for the called are many and the chosen ones are few.

~Matthew 20:16

I still remember a lot of my test scores.

I did pretty well, especially considering that I never really prepared for any of them. I always did well at standardized test, so why was there a need to prep for anything.

They reported those test in raw numbers, but also in terms of percentiles. Look, you did better than 99% of people who took this test or that test. It really didn’t mean much to me because I didn’t really feel like I worked for it.

For me learning was just looking at things that interested you and finding out what more about them. I learned a lot about airplanes after I was done with dinosaurs. Then it was sports and then girls and then everything was some sort of way to learn more about girls.

Those percentiles were huge for the educators whose work was judged on how well we did on those test. I never understood that. If it is based on percentiles, if everyone learns at the same rate, then there is no movement. If you increase your percentile over time, it means that there has to be someone who did less well relative to you. It’s a zero-sum game.

But it was still celebrated. I remember once my high school having a party, and the only people who could go to the party were those who had raised their percentiles. I was mad because as part of the one percent, I could not by definition raise my percentile. I ended up being able to go to the party when I pointed this out.

I was aware of my status, and that it was more or less unearned. I would be lying if I said that it was not part of my self-definition. My two best friends were also part of that elite club at our school. That meant with 700 kids at our school, there were only four others as smart as us (yes, yes, those tests are national or state-wide, so there could have been an uneven distribution of the top scores at some schools, but that’s neither here nor there. In fact, I used to be smug about it until I was shown what that really meant. In a country the size of America, you could take all the top one percent, and you would be able to create a city the size of Chicago. It was a humbling though, but it didn’t make me angry or feel any less special. In fact, It was a bit inspiring. I felt a bit lost growing up, but to think that there were scores of people just like me created  sense of community. Heck, I’d even talk to people just in the 2% and not feel bad about it.

I think that machine intelligence may be on the way, so that eliminates some of my perceived advantage. If you could download all the books and learn skills, it eliminates part of the specialness of being at the top, but it doesn’t diminish me in any way. One of the most interesting things about me is that I was on the quiz show “Jeopardy!”. I lost, but I blame the buzzer more than my faculties. I have always had a weird memory, more able to recall disconnected facts than the faces of someone I just met. I did well to get on the show, but I joke that being good at trivia is worthless in the age of Google. I will always be less accurate than web search for the rest of my life.

I don’t feel a loss from the rise of Google because I don’t feel like others having access to information is bad for me. I think there’s still emancipatory potential for humanity through technology and having all that knowledge at the tips of our fingers. We just have to get through the early adoption of cat pictures and listicles first. I don’t feel a loss because my mind, no matter how proud of it I am, is not something that I worked for. My aptitudes were set genetically, and fostered through having parents who guided my development and teachers who saw things in me and sought to teach me what they could, going out of their way oftentimes to challenge me more than the standard curriculum. I did work to fill it, and continue to do so, but that stuff in there is for sharing; this strange machine that weaves ideas and thoughts and can never come to a finite or concrete conclusion.

I have been thinking of my conceptualization of my mind and tried to turn it around economically to how people think about money. there have been several issues that have come up and made me wonder about people’s perceived diminishing when others are brought forth to some sort of power economically. The widest spread of these issues is the fight for 15, where there has been agitation amongst service workers for an increased minimum wage to fifteen dollars a hour. My reading is that the minimum wage was once enough to get someone to near the poverty line, which is in itself a flawed measure. Currently, a minimum wage job leaves you below the poverty line unless you are supporting only yourself, and again that leaves you highly in want.

So there have been two arguments against raising the minimum wage that are almost ad hominem attacks. First is the argument that they don’t deserve it because there are other, more deserving workers in which a raise to fifteen an hour would mean that those other workers would now labor at with a parity to the fast food service workers. This is a weird argument because it is not as if anyone is asking the paramedic to dig out of their pockets and directly subsidize the wage raises. No, “Sorry, Joe, but now you only get $8.50 an hour because of those folks at Arbys”. If anything there would be modest menu increases because labor is a significant portion of the expenses of your average restaurant.

The second argument is that they’re not really poor. Some workers are living as part of well-off households. But also look at how much money they have relative to poor people elsewhere. I’ve heard this argument and it befuddles me. The research seems to indicate that relative poverty is worse in terms of life outcomes and mental states than absolute poverty is. Now, I don’t wish absolute poverty on anyone and I am not volunteering to move to any of those countries that are victims of imperialist extraction without the occupier's leaving in place strong institutions. The bottom line is that not paying people survival wages in no way is good for the people who are not suffering from want - I recommend everyone read “The Spirit Level” - and is bad for society as a whole.

I think both sorts of arguments go back to an idea of some zero-sum game. If you pay someone else more, it diminishes me, especially if I am near the new level of pay that is being proposed. I think you see an analogue of this with the proposed drug testing of “welfare recipients,” where it the people most forcefully advocating this on a personal level have low-level jobs and are suffering from. if not conscious of, their own gross exploitation at their workplaces.  

But it’s not a right / left divide issue. There have been a couple of analogous things that have popped up in recent news that makes me think that people see success as some sort of zero-sum game where it is not. We can all succeed, and thrive, but there is a socialization that speaks against that idea at a young age. The first I’ve seen is with Zappos. I’ve been following them because they are at least trying to do some new things with the organization and how service is delivered. They recently reorganized how the entire company is run, where each employee is involved with self-management and management of the company as a whole in an idea called “Holacracy”. Employees were given the option to walk away with some buyout money. A significant portion did, and even more of the former managers, because it meant that they were no longer special.  

Another example was in the New York Times recently. This company's owners made everyone’s base salary $70,000, which is pretty awesome if you were a receptionist. But there was some backlash were a couple of employees quit even though they got raises. They were just mad that their raise wasn’t enough. I don’t understand either response. At Zappos or this other company or if you’re a paramedic, you lose nothing as others gain. People are angry at this because they can see the front-line workers and feel disdain for them and create a category and put them in that category and then compare themselves to that category. I don’t do that. I have been down on my luck, including two years unemployed after the great catastrophe of 2008, but since then I have worked at my education and at my workplace and not gotten sick or had other life disruptions. It means that they keep giving me more stuff to do with the commensurate salary increases. But here’s the thing - I want my coworkers to make more money. We are all underpaid.

Which comes back to the one percent, but this time it is not the one percent in terms of test-taking, but in terms of income and wealth. Like at my party, the one percent can’t get any more one-percentier. The difference between those tests and wealth is that there is no to bound. In the test, you can get all the answers correct. In terms of wealth, you can just keep adding questions. And add the one percent have. There are charts and graphs that you can look at, but the anger has been misdirected. If you can perceived of the economy as a zero-sum game, it is not the fast food workers that are the cause of low and stagnating wages. It is the higher corporate incomes and the lower return to labor compared to ever raising productivity. Where have those returns gone to? The CEOs and the large shareholders who have expropriated the surplus from all our labor. They are the ones who control the resources and the governments. They are the ones who make your median household income look like peanuts. Compared to them, we are all poor. The problem is that we just don’t see them.

Scrooge McDuck and Conceptions of Money: A Page-Turning Attempt at an Synthetic Understanding

It's the Pits.

I think that people’s conceptions of money are very important. I say this not as some groundbreaking understanding, but it seems to have some sort of play on the political visions you have of what is good and moral and proper. I can’t argue for causation here, but I think it matters.

To think about how it matters, I go back to the first time I knew a rich person. He was on my cartoons, and spoke in a Scottish accent and literally swam in money. Now, knowing what I know now, that was an incredibly inefficient store of wealth for Mr. McDuck, but I thought that was how all rich people stored their money. The gold in the money pit was strictly valuable as gold, and McDuck measured his wealth by tic-marks on the side of the money pit, right by the ladder.

In a way, when I was a kid, I knew we weren’t rich in part because my parents didn’t have a money pit. There was the shopping at Walmart thing and wearing non-name-branded shoes (the horror), but the lack of a money pit was a big.

Not that were were poor at all, in hindsight. My parents have been together my whole life and my father is a doctor. But the thing is that he is an ER doctor (I think the term of art now is an ED doctor, but that feels euphemistic about so many other things). So as an ER doc he was always an hourly employee for much of my life - he did a stint in the Army which is what deprived me of Reebok Pumps. As an hourly employee, your pay is dependent on the hour you work. And from what I gather from my father’s stories, it is a stressful job with a lot of responsibility and horrible hours.

So what I got from my father was a very distinct conception of money as part of an exchange mechanism. His labor was worth so much money, ergo anything purchased was a fraction of his time. Not that he was cheap, he has always been very generous with my family, but he didn’t let me forget that the bike or the computer was because of his labor.

This is a conception I took myself as I started in the wage labor force. I got my first job, must have been about 1997 or so, and the minimum wage had just been set at $5.15 an hour (I think it was still that in 2007, the last time I worked straight hourly, but I was making a kingly $8.50).  This meant that as my money was funneled away, I could count the time by the pizza ovens or the wood fire grills that I would need to replenish that money. It also meant that I hated to go to bars with covers. A five dollar cover! That’s an hour on my feet! With such a conception, you would think I wouldn’t have smoked as much as I did. But heck, back then I could my two-pack-a-day ration for about an hour’s work. What a deal.

The difference between working at a hospital (ok, one of the differences) is that there is a menu up above your head or in the diner’s hand that tells the costs of what you’re producing. There’s less direct interaction with regards to pricing at the ER (as of yet). So you have the money you’re paid and you see what you’re making and you see the amount of food you’re putting out, and you go, “Hey, there’s a disparity.” I remember one of my first jobs, as a cook at Burger King. They had a pie chart up to show where the money went and how narrow the profit margin was and this is why you can be fired for eating the trash. But not having an accounting class to learn about variable and fixed costs, it is easy to think to yourself: “If we sell a slice of pepperoni and two of cheese every hour, they cover my salary.” Start thinking like that and you begin to wonder where all the money’s going if you’re the one doing all the sweating. Then they move you up to management and you can see the labor costs are on the floor because what you sell is high margin. So you have self-worth and then what you’re paid, and you get angry at the guy making nine dollars an hour who’s not any better than you at the job but you feel ok because at least you have some ambition for your life. In the end though, no matter what literature you read, you’re still being valued at that rate they pay you and the only way to make more is to work more (or expropriate it for yourself, though that is not recommended).

As I’ve gotten older though, I’ve gotten away from conceptions of money in terms of straight material stuff or even direct labor. I’m not sure this is a good thing or a bad thing, actually. It gives me a level of freedom that all my bills are paid for. They’re all on recurring, and the money comes in and the money comes out and I almost never touch money. I don’t have to be hustling for extra shifts or arguing why I shouldn’t be the one to be cut early today because I was cut early on Sunday and I really need the money. I have a level of material success that means that I can afford to do what I want and buy name brand soda (gone whenever we have kids). But there’s a trade-off. Because I have that success in this country, it means that work is measured differently. It’s not work more to make more money, but work more because you’re a team player and you want the company to succeed. Work more because you want to keep working in the future. It may not be something that is conceptualized on a daily basis as you go about the work, but it is there for many people who have moved from wage labor to salaried labor. I’m not going to hunt the citation but there has been a turn in society recently. It used to be that the higher uo the socioeconomic scale you were, the fewer hours you worked. The working class was putting in the hours at the factory and the upper classes were taking long lunches and meetings on the golf course. This has reversed, and there’s the hint of precariousness that makes the exempt employees put in the time if it's necessary or not.  

I think all three conceptions are about how the social relations of your job and your social role shape your political persuasion. I started thinking about this issue reading the Wall Street Journal’s editorial page like I know I shouldn’t. They were complaining about Clinton’s proposed capital gains taxing plan. They were arguing that capital gains taxes should all go away because corporations that issue dividends are subject to the HIGHEST TAX RATES known to man in the history of ever. Then to tax dividends is unjust because that money was already taxed.

And I hate it when people complain about the double taxation. I mean, most financial transactions are taxed. That’s the reality of our system. It pays for society. It could be a little more simple and fair (more progressive, that is - people don’t seem to realize that money has diminishing value). But I’ve been trying to be fair. So I was thinking about this and trying to figure out how someone making that argument conceives money.

One of the fun things about money is that it is fungible. You might come across this idea, that one dollar is equal to another. A different Journal editorial arguing that Planned Parenthood should be defunded was based on just this - you have to take all their money away because giving them money to support women’s health care frees up funds for more abortions, and you know how much we hate abortions. I think that people that worry about double taxation have a completely different conception of their liquid assets than I do, one where money isn’t fungible. I was imagining a guy who thinks that he went alone to a virgin land, and dug up a bunch of gold. In my imagination, he’s walking around with a ball of hold about the size of a beach ball. Every market exchange he makes, he shaves off a bit for payment but there’s always Old Big Government wanting his slice too. In that framework, then it makes sense to shoo away the second representative of the government wanting another slice. But this only holds true if you conceive as the corporation’s assets and earnings part of your ball of gold. If not, then it was part of their ball, and then added to your ball of gold. (Many, corporations are a weird legal fiction, but we’ll leave that be.)

So there I was thinking about this guy holding this ball of gold, and I realized it was the same conception of money that McDuck has. As the owner of capital, money is just a thing for itself and the exchange mechanism is almost secondary. It is not that the other conceptions are better than the others. I think all three I looked at create an alienation from work and from the system in itself. Basically it comes down to ownership, direct labor, and indirect labor. For the time I’ve been around, the ownership conception has led the economic and political process, and for me that is the problem. I might be over-simplifying things, but I am glad to see direct labor fight for their own perceived value with the fight for 15. What I worry about is the alienation of indirect labor from the political process. In the teachers and social workers and all the office workers, you have a large mass of people who are well-educated but maybe only will have a voice if they’re part of the diminishing labor movement. I hate to be cynical, but how much of this was planned and shaped by the winners of the process?

But it seems that all three classes of labor have their feelings of helplessness.  If all three conceptions of labor create an alienation, maybe there’s something larger going on

Wool by Hugh Howey: Novel Story Well Told

The science fiction community leaves me confused. There are literally thousands of reviews for this book on Amazon. And they’re positive. That means that the word of mouth was good, bordering on great. This book is in fact a publishing phenomenon. The writer self-published this thing, without any gate-keepers, and just through the quality of it, he was able to get people to read it and then a traditional publisher came calling. Then Hollywood came calling. These are all the things that you want to happen when you write a book (unless you are the misanthropic sort that sometimes happens to write books about catching and rye).

I say the community is weird because I would not have come across this book unless I was doing what I was doing. What I was doing was making a concerted effort to read some of the more influential science fiction books in the genre that I had not read for whatever reason. This project of mine triggered the recommendation engine to say to me, “You should have a look at this one.” Were it not for that algorithm, I would have never heard of this book.

And heard of this book is something I should have done. There are a lot of aspects that make a book successful in my eyes. You have to have interesting characters, you have to have an interesting world for those characters to live in, and you have to set them at something novel and interesting. This book works on all counts. The three or four main characters have depth and a good back-story, the dystopia Howey places them in is novel (It’s like a giant cruise ship, but buried underground). Then there is a good payoff at the end.

There are a couple of things that detract from the narrative. First is that there is no real back story at the beginning. I like to have some sort of reasoning in realistic sci fi about how the setting and the characters got from where we are at to where they are at during the course of the novel. That’s a bit hinted at during the course of the book, but it is never really explained. I’m a bit hypocritical here, because if they over-explained things, then I get mad at the author for being heavy-handed. Second, reading the book, I had an issue with trying to figure out the scale of the silo in which the characters live. It seems really big, 150 or so stories, and climbing all the way down is a mult-day process, but it seemed a bit flexible in the narrative. There are no schematics in the book, so it is up the inference from the reader.

Finally, I have to just extol the narrative as a whole. I went to grad school for literature, which means that I over-think narratives. I look at the sentence level and just judge everything I come across. I must give the author high praise here. There was only one point in the whole of the 500 pages where I felt that there was a sentence out of place. It was in the last 20% or so of the book, and the author did that thing where a sentence fragment is used as a point of emphasis and not a whole idea itself. That one sentence didn’t work for me. All the others did.

Rani Issac's "The Philanthropist": An Odd Little Text

Isaac’s concern is the concentration of wealth to top earners (and the preservation of generational wealth passed down through families). In this book, she takes on this issue by fictionalizing the future and making a story through the eyes of a member of one of the richest families. In the book, the representative character of the rich has second thoughts about the economic system and her place in it. She secretly attends school and through the teachings of a mentor who knows the past better than she does, she is able to see through the edifice that was built by her family and class for their own self-perpetuation, and see that instead her high status means lower status for so many.

Through some machinations, the main character is able to make some changes and release funds out to the world - basically she dissolves her wealth and the family foundation that was part of how she controlled so much capital.

I’m sympathetic to Isaac’s position. The concentration of wealth at the top is a real issue these days, as explained by both the authors of the “Spirit Level” and more recently by Thomas Piketty in his widely-purchased but little read magnum opus “Capital”. What strikes me as unworkable is that the vision of the future finds that this issue will not be resolved until those who have made the accumulations decide that it is in everyone’s best interest to do what is against their short term self-interest. So despite heroes of capitalism like Gates and Buffett pledging to give away their wealth, there are those who are fighting tooth and nail to eliminate estate and gift taxes. If the problems of capitalism are dependent on the beneficiaries of capitalism to solve them, then the issue will not be solved.

A further issue is the format that Isaac takes. I’m not sure if the fictio format is the best angle for her argument, The book is short and tries to pack a lot in its few pages, but it is lacking in character development. The narrative voice doesn’t help, it’s a close third person past, so it has this weird clinical detachment where we are told and not shown things. The author shows her familiarity with stringing together a proper sentence, but lacks in the verve necessary to tell a compelling story.

Kunkel's "Utopia or Bust": Made Me Want to Read and Write More

When I first heard that Jacobin and Verso were teaming up, I was super-jazzed.

They offered six books for fifty bucks around the Christmas of 2013.

I was like that meme of Fry where he’s saying “Take My Money!”

Basically, I have achieved a level of material success where I still have revolutionary desires and our household income is a bit more than the US household median income. So I have a need and a desire to give the money to the revolutionary presses that I can fulfill. My favorite thing is to sit on my couch and read and drink beer. I often read of revolution, and I can help create a future where the workers of the world, who once united, can lose their chains and drink beer and do their own reading. Verso and Jacobin will help facilitate that.

So I bought the books through the publishers, and ended up with the first batch. I read the other two books right quick, but for some reason I let this one sit. I think I had tried to read it once, but I was sad at the the structure of <add introduction + previous essays = book>. I put it down and on my shelf, even though I had not read any of the essays previously.

But last weekend, I picked it back up. The essays in the book are about writers, for the most part, that I admire or have read. There are a couple of ones about unfamiliar writers to me, so I can’t make a judgement on them, since I only know them through Kunkel’s lense. But the ones that we cross over the things I’ve read and he’s read, show the writers I like in a new light and made me think more and broader and deeper about them. His essay on David Harvey illustrates this - it just helps put my own reading of Harvey in context of other thinkers.

Here’s the best thing about the book. It broadens my horizon, in that I want to read more about the people who he talks about but am only tangentially familiar with. I guess it’s time for me to put Fredric Jameson on my reading list. But the real best thing is that it makes me want to write more just by engaging in the ideas that the author engages with. Kunkel is a clear and exact writer that holds the attention even when writing about  unfamiliar subjects.

The Making of a Manager

I sometimes think of essays I want to write, and bounce them around in my head a bit, but I never actually get down to writing them, because who has the time to write an essay for fun with no possibility of compensation.

One of the prompts I wrote to myself was “manager”.

I’m not sure of the basis for it. I think it was part of my MBA program. We have been taking in various classes about leadership and people that you want to follow and how you become that person. It might boil down to who you want to work for, so this is all subjective. For me, it is hard to look at the good qualities that you want. Like a movie or a book you like, it is hard to say why some people are easier to work with and for, but it is easy to think of bad examples. I had a boss that was petty and capricious and incapable of doing any of the jobs that he nominally supervised without getting in the way. When I think of bad bosses, he fits the bill.

It is harder to think of the opposite. I want to work for someone who is not those things I listed. I have been fortunate to work for some good supervisors in my career, so to really say there is one best is hard. Luckily, my first boss was someone who I was glad I worked for, even though the job itself was something that is often denigrated. My first real job was at Burger King, Well, I’m sure it was technically for some franchise, but I forget the name on my checks and told people the name on my uniform.

My first boss was Mike Devericks. He was young and enthusiastic. There were open interviews for the new Burger King that was opening up at what was then a blank space on the map but turned into a busy shopping area once the new Walmart went in. As I remember, the interviews started at 8:30 on a Saturday, and I had nothing to do and family that was strongly encouraging me to get a job. I made it a point to be there as early as possible, and I think I was the first one interviewed.  What I am certain of is that Mike was the first person to offer me a job where he stood up and shook my hand.

In the scheme of things, it was a summer job, but I tried to have pride in what I did, making those Chicken Sandwiches and BK Big Fishes, and making sure the fries were always on supply, and that the chicken tenders were not to old to be served to the customers. I liked the people I worked with, and I learned to smoke at least three cigarettes in the thirty minute lunch break while eating food. They key was remembering which hand was for drinks and which for the smokes.

But the thing is that though I could work by myself or with the other fry cooks, there were times when there was no way we could keep up. The orders would go up on the screen with a timer on it to tell you how long they had been on the screen and they would start blinking if they were too old. I have a memory where Mike stepped in right as panic began, and looked at the screen and knew how many buns to drop and how many fries and just took over. I had thought I was good at the position, but he rocked it.

And that is what I want in a manager. I want the person above me to allow me to have the autonomy to learn my job and work it to the best of my abilities, but be able to jump in and help me (and my team) when I need help. Additionally a key trait is to know when that is, because sometimes people don’t realize how far they are in over their head. It may have been a summer job, but on reflection, it was an important lesson on leadership.

Goldbugs: Occam's Razor and Value

So, it looks like gold is trending down. Even the Journal published an article calling gold a pet rock.

This makes me think about my father, who over Christmas made me feel his ingots of silver, and who listens to a lot of Fox News in his free time. I have to tell you, holding that silver gave me some very strange feelings. It was shiny, yes, but the thing is that it was very heavy – much more than I would have guessed just by looking at it. There’s a very atavistic feeling satiated by holding that density that is hard to replicate.

But that doesn’t really speak to value. It is shiny and heavy, but what is it worth? There’s no future cash flows to discount. There’s the well-known issue that there are no dividends and a carrying cost. Basically it is a hedge for when the world crashes. Right now, what is it worth? Whatever the next guy will pay you, since it at least has some use value. Looking at the CME, what the next guy will pay is around twelve hundred bucks an ounce. That’s off from what it was at the height of the last time everyone was buying in gold by like a third. That’s a lot.

Hold on. That’s a lot if you’re buying and selling it, hoping holding it as part of your portfolio.

What’s gold worth now is assuming that its continued use value and the speculative part will hold forever, with no major changes in demand or supply. But what if demand changes? That means the gold held will increase in value if it goes up. What can make demand change? A change in the financial climate. It can be held as a hedge against what the preppers et al call “When the shit hits the fan”. Now, I am skeptical of all the collapse scenarios that I have seen on “Doomsday Preppers,” but here’s the thing – what do we know of the chances of total societal collapse and ultimate valuelessness of the dollar? There’s not much to go on. I would say it’s a one in whatever chance, where the goldbugs and the preppers and etc would say that I was off by a factor of ten or a hundred. The problem is that neither of us have much to go on. The sample size of societal collapse is small, and not very good for making predictions.

So here’s the thing. No matter who’s right, they still have something that they can trade for things as itself or if converted to the coin of the realm first. But there’s a huge payoff if they are right. (This ignores the whole weird fantasy thing where it seems some people want society to collapse just for their vindication.) I’m not willing to make the bet, but I shouldn’t judge others who are. Heck, I still play the lottery when the jackpots get big – someone’s gotta win it. It just goes to show that consistent rationality is hard to enact, especially when it comes to long odds and big numbers.