Episode #156: Free-rider Friday - August 2017

Ron’s Topics

The Myth of Technological Unemployment,” Deirdre N. McCloskey, July 11, 2017, Reason

Lot’s of economists think we’ll lose jobs due to technology:

  • Robert Gordon, The Rise and Fall of American Growth
  • Tyler Cowan, Average Is Over
  • John Maynard Keynes and David Ricardo believed it, too

They were all wrong.

Walter Reuther, long-ago president of the United Auto Workers, touring a factory with newly installed robots with Ford:

  • How are you going to get them to pay union dues, Walter?
  • How are you going to get them to buy your cars, Henry?

This is a fallacious argument according to McCloskey because employees of car companies are a trivial share of the car buying public.

The point of an economy is production for consumption, not protection of jobs.

McCloskey writes, “If the nightmare of technological unemployment were true, it would already have happened.”

Each month in the USA, out of 160 million jobs, roughly 1.7 million vanish! That’s over 1%, each month.

In just a few years, at such rate, one-third of the labor force would be standing on street corners. We need flexibility in labor force mobility, not government programs, according to McCloskey.

“Hot Stuff,” The Economist, August 12, 2017

Flying at Mach 5 burns hot—3,000° C, which could take you from Britain to Australia in about two hours. This is above the melting point of most materials.

Two researchers, one at the University of Manchester, England, and one at the Central South University in Changsha, China, have created a novel substance: a ceramic, that contains strong bonds between their atoms: a carbon-carbon composite.

Infused in the composite with a liquid mixture of zirconium, titanium, carbon and boron.

The world’s Air Forces would love it, and so would commercial passengers.

1843, Aug & Sept, 2017, “Turn On, Tune In, Drop By the Office”

LSD.jpg

Remember Timothy Leary’s “Turn on, tune in and drop out”?

Well, Nathan, age 27, a venture capitalist in San Francisco, ingests 15 micrograms of LSD, every three days. A normal dose to get high is 100 micrograms.

He does it because it makes him feel more productive and creative, calling it “my secret vitamin.”

Americans age 30-34 are the most likely group to have tried LSD, even though drug use has dropped across board; LSD risen a little.

Researchers have traced the development of the personal computer industry through the 1960s counter culture.

One research center in Menlo Park (Xerox PARC?), observed 350+ scientists, engineers and architects, in experiments with psychedelics—how it affected their work.

Tim Ferris, an angel investor, says “billionaires I know, almost without exception, use hallucinogens on a regular basis.”

Steve Jobs: “Taking LSD was a profound experience, one of the most important things in my life.” He use to joke that Microsoft would be a more original company if Bill Gates had dropped acid.

Today, groups of friends rent a place in the countryside, take LSD or Mushrooms and go for a hike: a “hike-a-delic.”

Popular among technologically aware individuals because they are interested in science, nutrition, and their own brain chemistry.

It can also reduce social awkwardness!

Data on the number of people doing this is non-existent, but a group on Reddit has 16,000 members, up from 2,000 a year ago (most use 10 micrograms every 3 days).

LSD is not thought to be addictive.

Since there is a lack of medical research on microdosing, it’s touted as a panacea for depression, menstrual pain, migraines, impotence, etc.

Yet compared to America’s opioid epidemic, and 3.5 million children prescribed drugs for attention disorders, LSD doesn’t seem as threatening as it once was.

“The New Old,” The Economist, Special Report, July 8, 2017

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During the 1940s, society coined the label “teenagers,” which was recognized to be a big market for goods and services.

Today, we need a new name for those 65 and older, but who are not yet elderly (by 2100, the 65+ group compared to working age folks ratio will triple).

In 1950, 65+ were 5% of the world’s population; in 2015 it’s 8%; and by 2050 it’s projected to be 16%. The share in OECD countries, is 16% in 2015 to 25% by 2050.

Today, in the rich world, 90%  of people will celebrate their 65th birthday!

The UN estimates between 2010-2050, the 85+ group will grow two times as fast as the 65+ group, and sixteen times everyone else labeling it a silver time bomb, or grey tsunami.

Doomsayers predict economic stagnation, asset-market meltdown, dearth of innovation, public spending increases, etc.

The Economist Report argues the opposite: this can be a boon if societies turn them into more active participants.

The financial industry needs to update its life-cycle models.

The so-called gig (or sharing) economy seems to help the 65+ group participate in the economy:

  • ¼ of Uber drivers are 50+
  • ¼ of those who work in the sharing economy are over 55 (according to PWC)
  • Wahve (Work at Home Vintage Experts)
  • Airbnb, the 60+ are the fastest growing group and have the highest ratings
  • The 65+ group does a lot of unpaid work, volunteering 3.3 billion hours in 2016
  • They may be slower at jobs, but they make fewer mistakes

According to the Kauffman Foundation, the  55-65 age group are 65% more likely to startup new companies than are 20-34 olds.

The 50+ age group have 70% of the disposable income in America. Global spending by the 60+ is projected to be $15 trillion by 2020, two times the 2010 amount, much of it on leisure.

So-called “Silver splits” are soaring: the 60+ are divorcing at twice the rate from 1990, and in Briton it’s three times the rate. 25% of Match.com users are between 53-72, growing faster than any other group.

Long-term care: 47 million people worldwide suffer from dementia, which could grow to 132 million by 2050 without a medical breakthrough.

Proposed new labels fro the 65+ group:

  • Geriactives
  • Pre-tired
  • Sunsetters
  • Nightcappers
  • Nyppies (Not Yet Past It)
  • Owls (Older, Working Less, Still earning)
  • Hopskis (Healthy Old People Spending Kids’ Inheritance)
  • Indy: I’m Not Dead Yet?

Life stages are social constructs, triggering deep changes in attitudes.

Rock stars used to rely on royalties but due to the digital revolution they are back on tour.

Lloyd’s has “Non-appearance products.” For example, Disney had it on Carrie Fisher, who died at 60 before completing Star Wars, resulting in a $50 million claim.

Keith Richards of the Rolling Stones, 73, has his hands insured for $1.6 milliion.

Underwriters are ready to accept their clients’ lifestyle and work hazards, arguing that where there’s risk, there is reward—if the price is right.”

They do have exclusions for pre-existing conditions, alcohol abuse, failing livers, etc.

Ed’s Topics

The Brave Browser

brave_icon_shadow_300px.png

Ron asked Ed to take a look at this browser based on blockchain technology. It is okay, but not ready for primetime. Plug ins do not work. 

Nine words or phrases that predict where you grew up

Ed ran through them with Ron and predicted eight of nine correctly. 

EconTalk episode with linguist John McWhorter

Fascinating conversation about how language is never static. Give it a listen and see if you change your mind about some of your pet peeves. 

The Confusing Way Mexicans Tell Time

Understanding this word takes not a fluency in the language but rather a fluency in Mexican culture.

Reminder

The VeraSage Symposium and Art of Value Conference are coming up in November. For more information visit - http://thesoulofenterprise.com/verasage 

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Ed Kless

Ed Kless joined Sage in July of 2003 and is currently the senior director of partner development and strategy. He develops and delivers curriculum for Sage business partners on the art and practice of small business consulting. Courses include: Sage Consulting Academy, Business Strategy and Customer Experience Workshops. Ed is the author of The Soul of Enterprise: Dialogues on Business in the Knowledge Economy, a compendium of a few of the episodes of his VoiceAmerica talk-show The Soul of Enterprise: Business in the Knowledge Economy with Ron Baker, founder of the VeraSage Institute where Ed is also a senior fellow.