[nostrademons]

There's a broader historical perspective that's missing in this article.

The Second Industrial Revolution (1870-1914) was much like today. You had extremely rapid growth of new industries fueled by widespread availability of capital; a pervasive bubble economy punctuated by massive stock market panics & depressions; rapid development of new technologies; widespread fraud & corruption; a feeling that the common man was missing out on these developments (hence the term "The Gilded Age", a reference to it being shiny on the surface but dull & black inside); a widespread populist movement; political discontent; and globalization. And these technologies proceeded in overlapping waves: ironclads were replaced by steel ships; steel made steam engines possible; steam paddleboats replaced sailing clipper ships; propellers replaced paddles; steam turbines replaced triple-expansion engines; oil replaced coal in boilers. It was not uncommon for a ship to become obsolete before she entered service in the early 1900s.

The effect of the mass availability of capital during this time period (other than in destabilizing society) was to dramatically increase the rate of adoption of these new technologies. Without the massive capital influx into railroads, it's doubtful that there'd be enough of a market to drive widespread adoption of the Bessemer process, which made steel cheap enough to use in ships & skyscrapers. Without the mass capital investment in shipping, it's doubtful that there'd be an impetus to develop & perfect the steam turbine or switch from coal to oil as a fuel. Without demand first from the kerosene lighting industry and then from the shipping industry, it's doubtful that there would be gasoline (then a waste byproduct of petroleum refining) to fuel the automobile industry.

Similarly, O'Reilly's looking at Uber and Lyft at this snapshot in time and lamenting that their market power is preventing new ridesharing companies from entering. But the point is not to perfect ridesharing; it's to replace it. Uber and Lyft are arguably already obsolete, with Waymo in active testing in Arizona and California, and will be replaced shortly by self-driving cars. It's doubtful that self-driving cars are the endgame either; I suspect that we'll see intermodal transportation pods that move people & cargo through and between cities automatically.

The point of massive capital investment is to get us to the future faster. It'll be wrenching and cause massive societal dislocation - the first industrial revolution gave us wars of nationalism for the US/Italy/Germany, and the second gave us 2 world wars, the fall of centuries-old dynasties, Communist revolutions, and eventually the Holocaust. But we don't really have a choice.

[Erazal]

I agree with you on the effect of massive capital investment : bringing us the future faster ; at the cost of social turmoils. However the necessity of going through those turmoils is false : why don't we really have a choice ?

[nostrademons]

Because somebody else is will get there first and then inflict those turmoils first, on their terms.

This looks different at different scales. On an individual level, it's being passed over for promotion because the blowhard in the next cube has this great idea for how to apply deep learning, or losing out on a job to the college kid who's up-to-date in Solidity and React while you still work in VB.NET and SQL Server. On a company level, it's going bankrupt because some new startup offers critical new features at 1/10th the price. On a societal level, it's being conquered by other societies that have adopted the new technologies at the cost of the social turmoil and then choose to inflict it upon you. Each attempt to stop the turmoil by fiat just escalates it up a level: if you declare you're never laying people off, your company goes bankrupt, while if you declare that nobody is allowed to innovate your society collapses. (Either from within, where your people look at the technologies other societies enjoy and say "We want that", or from outside, where an invading army lands on your shores and kills you all.)

Americans are particularly blind to this dynamic on the societal level because we're usually the ones inflicting it upon others. "Manifest destiny" was all about inflicting progress upon the Native Americans who didn't want it, while the Cold War & fight against Communism was about a richer, more powerful empire inflicting the way of life that made us richer & more powerful at the expense of social stability on stagnant, poorer, but in-theory more egalitarian and stable societies.

[johnvanatta]

Some of that is happening in the US right now. Dense (mostly coastal) cities; built on clustering effects, immigration, and highly skilled workers; are thriving. That model is working, but it brings with it high pay disparities and disruption of outdated social structures and values. Whereas the older model of geographically disbursed industrialism, which peaked in the 60's or 70's, is faltering.

How does that manifest politically? Look no further than Trump:

https://hbr.org/2016/11/what-so-many-people-dont-get-about-t...

His entire candidacy was about "owning the libs" and their globalist, diverse, cosmopolitan world. A backlash against socioeconomic change, with very real consequences.

[nostrademons]

Yup. The "two economies; two moneys" divide between urban coastal America & the Rust Belt / Deep South is probably one of the greatest silent threats to American security. Historically nation-states do not survive divides in regional inequality that are this big or this entrenched; the temptation grows for the rich region to secede and engage more with the global economy, while the resentment from the poor region builds and can lead to outright violence. And America's biggest defensive weapon, historically, has been two oceans: this doesn't apply when the potential enemies share a continent.

[johnvanatta]

And the modern side will also be the losing side if violence breaks out. The urban prosperity machine requires trade and highly specialized work, which is vulnerable to political turmoil. Whereas the guns and food are overwhelmingly in the rural parts of the country.

I don't think it's all doom and gloom though. There are some promising signs that cities don't have to be coastal to embrace the new model and prosper. Austin, Pittsburgh, Denver; to name a few.

And even though the Trump administration is doing damage, it could also act as an inoculation. Their complete lack of competence is a limiting reagent. And in response, a lot of people who took benign, stable political institutions for granted (their relative rarity could easily be missed from a typical education) no longer do.

[anongraddebt]

Happening in other developed countries as well. Mega-cities and urban coastal corridors are globalizing faster than the nation-states to which they are legally subsumed under. Cities are beginning to test the boundaries of their prescribed sovereignty in trade and other matters.

[johnvanatta]

London and Brexit immediately come to mind!

[chubot]

That's a good point, but shouldn't we have learned from history?

I don't think "we don't really have a choice" is true. Societies DO learn from their mistakes, albeit slowly. "Culture" exists for a reason -- it's how groups of people change their behavior.

For example, I think the memory of World War II absolutely did make decision makers behave differently. Nobody wants total war again -- they know how bad it is. We learned from our mistakes. (This doesn't stop stronger countries from picking on weak ones, but that's not total war.)

As an aside, I do think there is a form of "group selection" that happens in nature. Societies that are unable to collectively change their behavior -- learning big lessons on long time scales -- don't survive. "Sapiens" is largely about these "mass delusions" and I think he's onto something (although many would argue its unscientific, and many have argued against group selection as a mechanism of evolution).

In the past we had mass delusion to start religious wars, but that same mechanism can perhaps be used to put value on measured growth rather than winner-take-all outcomes.