Social Security and Productivity

I've been looking at social-security discussions, and more generally at old-age-expense   discussions, and they seem very strange to me because I don't understand the assumptions made about productivity. The GAO assumption is

Total factor productivity growth
  1.4 percent through 2015 (CBO’s August 2005 short-term assumption);
  1.4 percent thereafter (long-term average from 1950-2004)

As it says, this is a projection of an existing long-term average; it's saying that if things go on as they've been going, then this is what we get: 1.4% per year, which means a doubling-time of about ln(2)/1.4% = about 50 years. And if we more than double the old-age-expense per productive worker, then we have an increasing problem. Maybe we run out of money, and the pay-as-you-go Social Security/Medicare framework falls to pieces because there isn't enough coming in to go out.

However, productivity growth is not simply a 1.4% per year long-term trend with no underlying structure; productivity growth is a process of learning how to produce goods and services with less labor. (Well, isn't it?) Any given year's productivity growth or shrinkage may be dominated by some random or cyclical blip, e.g. the economy does better, demand rises, marginally less-skillful workers are employable, so productivity goes downwards. When we're talking about long-run productivity growth, however, it seems to me that we're mainly talking about the technology of increasingly automatic production, beginning with production of desired goods and services themselves, but ending with what I would describe as

increasingly automatic production of the means of (increasingly automatic) production.

The productivity growth trend here is that of Moore's law and Kurzweil's related "laws": they have doubling-times which have been in the range of one to five years, but which are now only a part of the economy. That gives us a different projection: If things go on as they've been going, then the fastest-growing parts will outgrow the rest, become dominant, and keep right on going.

Kurzweil notes reasons for thinking that at some point, perhaps in the 2030s, we reach a "singularity" in which artificial intelligences momentarily match and then surpass the humans who created them (and may become them). Okay, fine, I've actually believed that since before I was a computer science graduate student back in the late 1970s, maybe since I read Asimov's The Last Question in the early 1960s and soon afterwards played with my first "computer", a Minivac 601. Yes, to me it's fascinating, but that's not what I'm talking about here.

You can reject the whole notion of artificial intelligence if you like, but I do not see how you can reject the notion that we have increasingly automatic production of the means of (increasingly automatic) production, and that the doubling-times of this kind of production have little to do with the doubling-times of traditional productivity growth: they are intrinsically faster. Even if Moore's law bottoms out, we will still end up with programmable factories which generate new programmable factories as well as the desired goods and services (or machines to generate them). They won't be nano-factories, but they will be programmable and the only cost of running them will be the cost of providing the data they need. The radical projection is Kurzweil's, of nano-based intelligence, but I don't see how to avoid at least several doublings in productivity, built into what we already have.

What am I missing here?

I look at that CBO average: 1.4%. That long-term average, however, is not exactly trend-free: as Brad Delong puts it (in discussing wages):

First, from 1973-1995 the rate of productivity growth in the American economy was very low--roughly 1% per year... Since 2000 the rate of productivity growth has been 3.5% per year...

Well, that could represent a one-time blip, a cycle, or all kinds of things. Is there a bottom line as regards old-age-expense? I look for discussion: Andrew Samwick says at Vox Baby that

I also believe that the actuaries are projecting too little productivity growth in the long term (which would improve the system's finances), but I don't think we can honestly project that we will grow our way out of this.

He's referring back to a January post in which he worried about the requirements for 75-year balance:

this translates into long-term growth rates of 3.3 percent for productivity and 3.5 percent for real GDP. That productivity growth rate strikes me as too high.

Why? Well, he refers to a Robert Gordon's Brookings paper on productivity, which actually quickly settles down to a discussion of the next two decades, with Exploding Productivity Growth: Context, Causes, and Implications. It presents

... several reasons to believe that productivity growth over the next two decades will be slower than the mid-2003 estimated trend of 3.05 percent a year. Most important is the role of the 2000–01 profit squeeze in motivating an unprecedented wave of cost cuts and reductions in labor input. ... ...

Well, sure, that makes sense, we've had a short-term blip. But then the paper goes on to say

many of the most fruitful applications of the marriage of computer hardware, software, and communications technology have already occurred. The size of human fingers and the ability of human eyes to absorb information from tiny screens set limits to miniaturization. It seems quite likely that diminishing returns will set in, at some point over the next two decades, in the fruitful application of the innovation wave of the late 1990s.

Maybe it's just me, but this seems totally off the wall -- and this is as serious as Professor Gordon seems to get about technological growth. It would have sounded a little bit better around 1980 when I first saw a calculator-watch with buttons too small for fingers -- well, it still sounds a bit like the mythical "let's close the patent office, everything that can be invented has been invented". I find it very hard to believe that Professor Gordon is serious. I'm expecting the innovation wave to keep right on building, because it seems to me to be more and more self-sustaining. Communications go between software components spread across hardware networks, and they decreasingly require human fingers to manage them or human eyes to absorb information from tiny screens. In the end, we are talking about factories which can "print" consumer goods and which can also "print" copies of themselves as sets of components and assemblers. Kurzweil (following Drexler) thinks these will be nano-scale, and he could be right, but even if they are aircraft-carrier size and print out submarines to go do the mining/fishing/farming, they will involve less and less human labor as time goes on -- until we get to a singularity-point which may or may not resemble Kurzweil's, but which will bring human labor for duplication down to zero. At that point, only creation costs.

Or then again, maybe not. But why not? I'm just projecting trends, where I think I know something about why those trends should continue for a long ways to come...but as I said when I started this blog, I'm generally wrong even about stuff that I ought to know something about.

Chrismukkwanzah

Last night I went to the elementary school Christmas concert to hear my third-grader sing. Well, there were a few-score others out there, but I went there to hear my third-grader sing. It was strange; as my wife pointed out, this was the first time in twenty years that we'd gone to a school performance without bringing along a small sibling of a performer. (Last year, with our youngest as a non-performer and our second-youngest off to college, we didn't go at all.)

The youngest strings started it, and they haven't really learned to use their bows but they pluck enough notes to generate a couple of short carols and the dreidel song. Then there were more and more performances of greater and lesser development, and finally my kid's group. They sang Pie Jesu and a non-Christmas Old Dan Tucker, and closed with a very energetic rendition of the "secular Christmas" tune Rockin' Down the Chimney by Kirby Shaw: "He'll be soulin', he'll be strollin', rock and rollin' down the chimney tonight!" A good time was had by all, I believe, and I felt sufficiently Christmassy that I cleared the snow off Mrs. Rainsford's car (she was piano teacher for some of my older kids, and she stayed in the school longer than I did) before driving home.

The snow kept coming, and today schools were closed through most of upstate NY. So my kid sat on a sled with her new doll and I pulled her over sidewalks and roads to the coffee shop, and we sat by the Christmas tree, and she commented that the star on top was missing. So I asked. This coffee shop is a Colgate University project, and I was told the star has been banned. It's a religious symbol. (And it's a solstice tree, maybe?) The menorah that sat beside it is gone too.

I feel sad. Writing as one whose religious views would perhaps be better expressed by a Darwin fish than a star, I feel sad. My sympathies are not entirely with Henninger's Opinion Journal article:

Any Jew, Muslim, Buddhist, atheist or Wiccan who gets a card this week with Santa Claus on the front and "Merry Christmas" inside and who recoils in the belief that the sender is "pushing" Christianity at them should, very simply, lighten up.

But I'm not too far from that -- and personally I thought the menorah beside the Christmas tree was a good idea. And I was glad when one of my kid's classmates this year turned out to be an Egyptian who wanted his classmates to participate in an end-of-Ramadan feast, or candy festival as the case might be. (The educational aspects here were perhaps under-emphasized; my kid said it was some other religion, and they'd just had a long fast, and maybe he was Buddhist? So I explained a little bit about Ramadan, not that I know much.)

I think I can understand the point of view of the North Carolina school in The Education Wonks: Merry Kwanzikamas From North Carolina!:

With students hailing from 29 countries and speaking 28 languages, Durham's Forest View Elementary School could be a miniature United Nations.
So, when holiday time comes around, teachers and administrators are careful not to offend anyone.
That means no Christmas celebrations at Forest View. Or Kwanzaa. Or Hanukkah for that matter.

But really, I disagree. It's better to have those second-grade strings plucking away at the dreidel song. It's better to learn about each other.

And by the way: I wish you a very merry Christmas. I really do.

But okay, you can have a rotten Christmas if you really want one. It's a free country, in some respects.

Notes on Torture

Max Boot, in Hate torture? Consider boot camp , says

thousands of men and women who have not committed any crime are held for prolonged periods while subjected to physical and psychological coercion that violates every tenet of the Geneva Convention.

John Cole describes this as "shockingly stupid", and indeed when I first read it I thought that comparing coercion of prisoners with coercion-for-which-you-volunteered was unhelpful. But...

Imagine the country of MaxBootia, in which you can't use a coercive interrogation technique unless you can show that a lot of apparently-sane men and women volunteer for that coercion and are apparently okay with it afterwards. That doesn't strike me as a "shockingly stupid" rule; it would certainly be better than what we've been doing, and I think in fact it would rule out most of what Cole firmly describes as "torture".

By the way, I don't think Cole's definition of torture by examples is a good one; he firmly states that waterboarding is torture, but he does not say, for example, that boot camp is or isn't. He does say he has no problem with "a little sleep deprivation". Well, that leaves a whole lot of fuzz. Boot says that current rules--the ones Cole presumably wants to abolish--do restrict sleep deprivation tactics to

"sleep adjustment" (changing sleeping hours, not denying sleep altogether)

and that's only allowed for supposed high-value targets. Is that torture? Boot doesn't think so. I guess Cole maybe doesn't either? But I'm not sure what Cole thinks torture is.

The MaxBootian rule is morally relevant, and I think it's defensible, and I'd be moderately pleased to have President Bush announce it as a basis for US policy, but it has problems. First, there are problems that most of us would think pseudo-problems, e.g.

Q:Oh, I see. Lots of men and women volunteer for sex and are okay afterwards, so I guess you don't think coerced sex is torture. Right?
A:Rape? Please be serious. When you find a lot of men and women volunteering to be raped and being okay afterwards, then we'll have something to talk about. Meanwhile, I think you're playing games.
Q:Well, umm...oh, bondage! See? Sexual coercion, and people volunteer for it!
A:Oh, please. I don't think there's anything for us to talk about. Bye.

More important, I'm not happy with bootcamp or fraternity hazing as models because the level of coercion (e.g., when you hit somebody with a pugil stick) is subjective. I would say that even slapping goes from non-torture to torture on a morally hazardous slippery slope, and enforcing any subjective rule about severity like the legal definition we have now is morally hazardous too.

A Personal-MaxBootian rule would include an interrogation-certification, sort of like CPR but switching roles with Resusci-Annie: you cannot apply a technique unless you have had it applied to you with the same parameter values within the last year. For example, you can be certified to push somebody into 36 degree water for ten minutes as long as you lasted that long at that temperature yourself within the past 12 months. If you lasted 14 seconds at waterboarding, then that's how long you can apply it for. If you volunteered to be put in manacles and hood on a 4mph treadmill carrying you back towards a "rest" point with air temperature at 105 degrees F for 14 hours, well, then you're a living demonstration of the fact that a personal-MaxBootian rule has problems too. Nonetheless, if Bush announced a personal-MaxBootian rule, I'd be moderately pleased:

I believe torture is something that you wouldn't be willing to undergo yourself. To ensure that we don't torture, I propose that no interrogation procedure can be carried out except by someone who has undergone that specific procedure within a year. Every such procedure must be on a specific list which will be accessible at whitehouse.gov.

I think that would go a long way to defuse a lot of people's worries, including mine. It would leave some worries un-defused.

I don't expect perfection. I'm a geek, so I might add that no "extreme interrogation" session is allowed that isn't done in front of a webcam, to be published in ten years but immediately available to appropriately sworn-in Senators and Congresscritters; they can also view the interrogator's certification session to make sure that the interrogator really did do that -- in fact the certification session video must be public, linked from whitehouse.gov. That's still not perfect, and I could add more constraints, but the point I am trying to make is that there are morally relevant degrees -- both Fahrenheit and other kinds -- which make a real difference. It's not just yes-or-no, and since it's not just yes-or-no I tend to regard the "do you approve of torture? Yes or No?" question as ill-posed to begin with.

I also think it's an unserious cop-out to say that torture can't work because the person being interrogated will say anything to make it stop. Historically speaking, torture works, but that is not a moral justification. We shouldn't be arguing about that at all. Torture does produce information. Why does it work? If you'll say anything to make it stop, then the interrogator gets information which has to be checked, or which can be used to check the information from some other source. That puts limits on the value of the information; it doesn't mean that the information has no value.

When I turned 18 in Buenos Aires in 1970, my family lived across the bay in Montevideo, and I was told that the Uruguayan tupamaros were being defeated, and were in the end defeated, largely by the use of torture, by which one set of arrests would lead to another with a lot of cold showers and other treatments in between. I wasn't happy then. I'm not happy now. JunkYardBlog points to a contemporary example in Iraq:

West tired of the terrorist’s intransigence and fired his gun near the terrorist’s head. Not at him, or even in his direction, but beside him. The terrorist quickly divulged his knowledge of the positions fellow terrorists had staked out to ambush American troops. West’s actions saved lives. Is what West did torture? Should it have been done? How should West have been treated after the fact?

The argument that torture (or any particular interrogation technique) is wrong cannot, I believe, stand securely on "it can't work." It can, which means that it can save lives -- so any particular rule against torture, whether MaxBootian or personal-MaxBootian or Ramada Inn (do nothing that a hotel wouldn't do to its guests), will have costs measured in dead civilians or dead soldiers or defeats.

Indeed, if you show me a rule I'm happy with, I suspect that my happiness will only last until I've thought about it a little more...

Or then again, maybe not.

[Update: Perhaps I should mention that I think rule-design needs to take inevitable rule-breaking into account. Suppose that torture, real torture, were made a capital crime. Suppose that you personally find yourself in a ticking-bomb scenario -- Bob the bad guy has just killed a few FBI agents and miscellaneous civilians, but was wounded and you have just wrapped him up with duct tape. His blow-torch (which you watched him using on a little girl as a way to keep the FBI away) is handy and you believe that you can save 10,000 lives by using it on Bob. I think that some readers will say "yes, of course I will save 10,000 by torturing this evil man." And I know that others will say "absolutely no way will I become Bob; it's better for us all to die." Yes, both those points of view are real. I just find it hard to imagine someone who would say "Well, I believe I can save 10,000 lives and I'd like to do that, but not if it's breaking the law." Maybe I'm just insufficiently imaginative. ]

Update, a few months later: Powerline reports

A former Navy pilot writes to confirm that waterboarding is indeed used in training our pilots...

Does that mean it isn't "torture"? Maybe so; it certainly pushes me in the direction of allowing it within interrogation, as long as the person doing it (in front of a webcam) has undergone it (in front of a webcam) and real comparability is documented. (That's obviously hard to do.)

Median Household Income

I'm puzzled (I often am.) The Daily Howler says at http://www.dailyhowler.com/dh120605.shtml that

Real median income fell, for the fifth straight year. Why are voters negative on the economy? Simple. Even though the GDP grew at a healthy clip, the benefits of that growth only accrued to upper-end earners. In simple terms, the rich are getting richer—and the non-rich, who aren’t getting richer, say the economy stinks.

Well, maybe. But as of August, the Census Bureau at http://www.census.gov/hhes/www/income/income04/prs05asc.html seems to have said that wasn't true:

Income, Poverty, and Health Insurance 2004 - Press Briefing As already noted, the 2004 median money income for all households was unchanged from the year before, at $44,400. This is the second consecutive year that households did not experience an annual change in real median income, after declining in real terms for two years (in 2001 and 2002).

Their supporting figure is http://www.census.gov/hhes/www/img/incpov04/fig05.jpg which goes back to 1967; you could argue it makes Reagan and Clinton look good and Bush look bad, or not, but it does not seem to support the DailyHowler echo or Prof Krugman's statement. If they've changed their report, or if he explains why their report should not be believed (e.g., households are larger, so that for each household size median money income is smaller but the average has not changed? Or money income is not the only income, and doesn't count employee benefits which have fallen? [But I thought they'd risen] Or other factors like household wealth, mainly values of housing, have fallen? [But I thought they'd mostly risen. Clarification here would really help.]) then I'd like to know.

As a separate issue, the DailyHowler explains negative views as due to the fact that

the rich are getting richer—and the non-rich ... aren’t getting richer

But the Census Bureau also said that

According to the most widely used measure, the Gini index, household money income inequality did not change from 2003 to 2004. Another measure is based on the share of total income that each 20 percent of households received. None of the shares changed between 2003 and 2004.

That's not to say that the problem isn't real: the Bureau continues, saying that

Over the last decade, however, the Gini index has increased, indicating a higher level of income inequality than in 1995.

In fact http://www.census.gov/hhes/www/income/histinc/h04.html seems to indicate that the Gini rose pretty steadily through the 80s and 90s, peaked in 2001, fell (presumably from bubble-popping, but maybe GWB did some invisible-to-me actions against inequality--that's what the numbers say, right?) and is now back up to its 2001 value.

Now, I'm suspicious of all these figures. If people are spending more on Christmas, as suggested by the December 7th Chicago Tribune's rather depressed "slower sales growth" report that

Retail sales rose 3.5 percent for the week compared with a year earlier

then I suspect that in fact they're feeling better off. Moderately.

That doesn't mean I want to support our President on economic policy: I don't; my economic policies would have been totally different. (Free Trade! Fiscal Responsibility! ... and so on.) But I think that the Daily Howler needs to cite sources, or at least I wish Bob Somerby would explain why I'm misreading these.

[Update: I see Angry Bear on earnings, giving graphs showing that wage income is stagnant but compensation (including benefits) rising startlingly, and saying

nearly all of our real compensation gains today (and I do think we're seeing them) are being eaten up by the monster that we call a health care system.

That looks plausible to me. It doesn't much support the Howler's take, but it is not reason for great rejoicing. I think people don't feel much better off when their health care costs rise, even if it's because they're getting expensively better health care.]