[ExI] Why Cities Keep Growing, Corporations and People Always Die, and Life Gets Faster

Damien Sullivan phoenix at ugcs.caltech.edu
Sat Jun 4 17:20:47 UTC 2011

On Sat, Jun 04, 2011 at 09:58:22AM -0600, Kelly Anderson wrote:
> On Sat, Jun 4, 2011 at 5:49 AM, Anders Sandberg <anders at aleph.se> wrote:
> > Kelly Anderson wrote:
> >>
> >> I think that's just basic math. Whether a singularity is reached in
> >> real cities, who knows? Is this what happened to Mohenjo Daro, or in
> >> the American Southwest, or Easter Island?
> >>
> >
> > Easter Island ended up in an ecological overshoot leading to a limited
> > carrying capacity, but I think most declining cities decline for far less
> > interesting reasons. Brugge and many cities lost access to the sea due
> > silting and declined into obscurity. The rust belt got outcompeted by
> > foreign industry and new industrial demands.
> The rust belt, Detroit for a very good example, also has suffered the
> effects of bad politicians and internal unionization parasitism. In
> other words, the external competition was inevitable. The horrid reply
> to this competition was not.

I'd call it self-inflicted wounds by the corporations.  Back in the day,
the unions wanted regional pensions and health care plans, that all
employers would pay into -- or government plans, those would work too.
After all, this way workers wouldn't be tied to a single employer.  The
corporations countered with generous employer-tied benefits.  Which was
fine when they started, but now they labor under their own miniature
demographic transitions, one worker per retiree or whatever, when their
overseas competitors benefit from socialized medicine and more generous
public pensions that spread the cost over a society.  (And lower cost
too, since socialized medicine is cheaper)

Of course, then there's still the problem of the cars:

> >> How about something related to the tax rate? Seems that is running
> >> into a singularity. :-)
> >>
> >
> > It just feels like that.
> > https://secure.wikimedia.org/wikipedia/en/wiki/File:MarginalIncomeTax.svg
> I wonder if we are seeing a series of singularities here. That graph
> goes up and down a lot, it's very frightening actually. Growth and
> collapse, growth and collapse.

Uh, it spikes up sharply twice.  The rest is minor wobbles over secular
decline.  Ironically, the tax rate usually goes up *before* prosperour
periods, like the mid-century and Clinton booms.

> I guess they direct production of roads, military equipment and so
> forth. But ALL the production is actually accomplished by government
> contractors, which are mostly in the private sector (in the US). We do

Being private doesn't magically make you better.  If you have a business
that lives in a competitive market and occasionally gets government
contracts, that's one thing.  If you have a business that exists on
government contracts, I don't really see how it differs from a
government owned industry with less oversight.

> have GM now... sigh. It is very hard to determine government
> efficiency, but it is easy to look at it and see that it is low,
> however you would assign numbers.

Herbert Simon thought government contribution to the economy was such as
to justify a 90% tax rate; this might have been off the cuff.  A World
Bank analysis was more in the 80% range, with something like 56% of US
GDP attributed to law-and-order alone.

Herbert Simon on social capital and 90% tax
summary of the mentioned World Bank study
note: the 56-57% may be % of intangible capital, not of the whole income
the study

"When we compare the poorest with the richest nations, it is hard to
conclude that social capital can produce less than about 90 percent of
income in wealthy societies like those of the United States or
Northwestern Europe. On moral grounds, then, we could argue for a flat
income tax of 90 percent to return that wealth to its real owners."

-xx- Damien X-) 

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