Dr. Mead: Beyond Blue

by w3woody

Beyond Blue Part One: The Crisis of the American Dream

Today the 20th century model of the American dream faces the same kind of crisis the 19th century version experienced 100 years ago. International competition and technological advances mean that the American factory worker’s earnings and opportunities are depressed in the way farmers were going to the wall 100 years ago. In the last twenty years, well-intentioned government efforts to put more people in owner-occupied housing led to a housing bubble and mass bankruptcies in the face of a financial panic and the ensuing recession, the worst in eighty years.

Our political battles today reflect the same kinds of frustrations we saw in the old populist era. Many cannot fathom another and “higher” form of the American Dream beyond the old crabgrass utopia. They want to turn back the clock and restore the old system because they don’t know of anything else that will work.

Note this clinging to past systems even as they crumble below us is not just a feature of the Left but also a feature of the Right as well.

Beyond Blue Part Two: Recasting The Dream

Already we are seeing the decline of the establishment’s ability to dominate discourse about ideas. The rise of a conservative counter-establishment and the proliferation of cable and internet news sources reflects a public demand for a more diverse and pluralistic national discourse. There is less respect for the social sciences and the privileged position of the “expert” on everything from medicine to financial and foreign policy; the privileged, above-the-fray pose of the progressive social engineers will come under intensifying assault. In this sense, the next phase of American life is likely to be more small “d” democratic and less big “p” Progressive than was the 20th century.

My own take: the Internet age is rewriting society, culture and economics as we speak.

From an economic perspective, the cost of a single item or good (or service or product) is expressed by the following equation:


The price of a single item Pi is the cost to make a single item Mi plus the setup charge S divided by the total number of units N that are made.

The Industrial Revolution came about, quite simply, because new inventions and techniques drove down Mi and S, which allowed Pi to reach a tipping point to where people could finally afford those products. Once we reached that tipping point, the Industrial Revolution exploded because as people became richer and richer, the number of units demanded (N) increased, thus driving the price down further. The number of units that needed to be made at a given price point made it possible to pay off a factory (part of the cost of S) faster, allowing material improvements, and so forth–accelerating the production of goods until we are in the world where we are today–where fresh bread can be mass produced for a price that would seem nothing short of miraculous just two centuries ago.

This equation, by the way, governs all modern Progressive thinking, and has guided all Progressive era programs over the past 100 years, from the modern school system (cost to educate a student is calculated as the cost of the buildings + the per-teacher effort per student), modern centralized planning (with the setup cost born by a small cadre of “experts”, whose per-project cost is spread across multiple projects), and the modern Blue State model of workers working together in a coordinated fashion.

The Internet Revolution is now accelerating downward the setup charge for goods and services, in part by distributing the setup charge S across multiple products (which, in essence, allows the per-item setup charge to be subject to the same equation above), and reducing the setup charge to a matter of specifying the right CAD files or software files and e-mailing them to a manufacturing plant or factory that accepts those files.

Further, as hardware and software gets cheaper, the per-item manufacturing cost is also dropping: the making of things requires less human capital, which has become the most expensive thing in the making of things.

Already we see this massive decline in prices in areas such as television sets and computers; today for a week’s worth of pay I can buy a computer so powerful that, twenty five years ago, exporting it to certain countries would have been considered treason. And I can stick it in a satchel and surf the web on this power supercomputer while riding the bus, rather than worrying if the cooling tower has enough water to keep my roomed-sized supercomputer from overheating.

So what happens when the setup charge for mass produced items drops to the point where the per-product charge to set the assembly line up becomes noise in the cost of the product after we’ve only sold a hundred of them? What happens when more intelligent robotics means I can, over the ‘net, submit a CAD drawing, a schematic, and assembly instructions–and some robot somewhere cranks out twenty or thirty for a price barely above the cost of materials? Or better, what if I can just print them out on my desktop? (Update: or carve them out of plastic on my desktop?)

What happens when N no longer needs to be millions, but can be hundreds of thousands, or thousands, or dozens?

And what happens when this same logic gets applied to the progressive state? What happens when the per-student setup charge of a school (the cost of a building and the cost of textbooks and educational materials) is replaced by the cost of an iPad and a couple of hundred dollars worth of books? What happens when teaching is supplanted with guided learning, where the human cost of a teacher is replaced with the cost of software?

What happens to the Blue Model when S is noise and Mi can be as small as we like as well, because behind Mi there is another Pi (in the form of robots, for example) that drove the price of Mi to the floor?

What happens to the Blue Model when N no longer has to be a big number?