Visions of the Coming Future — John Robb’s New Project

As Lexington Green says, if you are not reading John Robb‘s new website, then you should be.

Mr. Robb has a unique biography. Titles like USAFA cadet, SERE school grad, Yalie, astronautical engineer, counter-terrorism operator, military theorist, tech analyst, software executive, and best selling author have been given to Mr. Robb at one point or another. While working as an analyst for Forrester Research in the early 1990s he predicted that search engines and social networks would rule the internet, a decade later he was CEO of the company that developed the first RSS feeds, and soon after that Mr. Robb coined the term ‘open source warfare‘ (a concept expanded in his influential book, Brave New War) long before the Bush administration had begun to admit the U.S. military was facing a kind of insurgency in Iraq no one in the military was prepared for. His most famous work over the last decade has centered on the changing nature of war and terrorism n the 21st century.

 His new website is devoted to a different theme, focusing on political economy and the “future of the American Dream.”

Long term readers of the Stage know I that I am quite skeptical of–if not downright hostile towards–all futurists and thinkers pretentious enough to think they can accurately forecast our future. With John Robb I make an exception. When he talks about the America soon to be, I shut up and listen.

Here are a few excerpt from some of his most recent posts:
John Robb. HomeFree America. 4 February 2014

…Technological change is rapidly killing entire industries and job categories without replacing them. Across the board, incremental productivity improvements are making it possible for employers to get by without hiring new people (even the head of the biggest employer in the World has plans to replace most of his workers with robots). However, that won’t be where we see the greatest losses. Those losses will occur in the industries that are completely gutted from the arrival of products and services that make them obsolete.

As this trend strengthens, we may see results similar to what we saw with the agrarian economy. If that occurs, the extreme endpoint of this decline may be a world where most of the commercial activity in goods and services we see today — from education to health care to manufacturing to transportation to retail to legal services — is accomplished by less than 1% of the people it used to require.

That means only 1 of the hundred jobs being done currently will be left. More strikingly, it’s very likely this won’t take the 200 years it took agriculture to go from 95% of the population to less than 1%. It’s going to be much, much faster this time due to the speed at which improvements can be distributed (software/data). Given this catalyst, we may find ourselves more than half of the way there within twenty years….

John Robb. Home Free America. 6 February 2013.

IN New York, the hotel industry is a big business. Beyond the taxes it pays to the city, both real estate taxes and by occupancy/sales taxes (~15%), it employs 30,000 unionized workers.

Airbnb arrives and gets a “toe-hold” of 1% in the hotel market and already enables 4,850 people that live in the city to host guests that provide that provide them with $7,530 a year in income. 62% of these hosts use that money to pay their rent or mortgage (much of which flows back to the city in real estate taxes). Further, over the long term it generates much, much more income to self-sufficient home owners than it does workers doing it as a full time job in the industry…..

Like most of the tech change going on in this wave, it’s going global from the start, creating It’s an ongoing reworking of the massive hotel industry on a global level.

Despite the obvious socioeconomic benefits it offers and a growing demand, it faces stiff opposition. Entrenched companies, employees and governments see it as a threat, with good reason.

It’s particularly threatening to government. All layers of government — city, state, and federal — want the old, bureaucratic economy to continue, unchanged. They can’t imagine a world without plentiful flows of taxes levied on corporate profits and withholding from personal incomes.

Without this flow of tax income, the entire edifice of the current economy falls. It is the source of the financial life-support to the increasingly obsolete bureaucracies – from the civil bureaucracy to education to national security to banking to health care — that still offer traditional jobs. The rest is spent providing services, from health care to retirement income, in an attempt to keep the existing economic system alive….

John Robb. Free Home America. 28 January 2013.

…The wealth of the West, particularly the US, is being spent on the wrong things year after year, decade after decade. We are now as fragile as the Soviet Union in the late 80′s.

What happened?

Central planning took over the decision making process in the US. This process started with an increase in government sprawl. It accelerated under the management of clueless central bankers. But it became disastrous when wealth concentration became so extreme, at the expense of the majority of citizens, that it reduced economic decision making to an elite few.

This extreme concentration of wealth at the center of our market economy has led to Capitalist politburo — a group that is out to lunch ideologically, protected from the real world by layers of privileged, and loyal only to their peers.

With a Capitalist politburo in place, it’s easy to see why the economy is doing so badly. It’s impossible to make good decisions when there are only a few thousand extremely wealthy people making all of the decisions over the allocation of our collective wealth….

I strongly recommend Mr. Robb’s work to everyone who wants to understand how today’s economic and technological trends are shaping the future, but are tired of the superficial discussions that pass for serious analysis on most editorial pages. His analysis will not dissapoint.

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That point about the centralization of wealth meaning the centralization of decision making is incredibly interesting.

But in the absence of significant barriers to entry, such as regulation and TBTF-style subventions for established players, I would expect that bad decisions on the part of the big players would open up room for other players to enter. So economic centralization would be a self-limiting problem.

The real difficulty seems to be political centralization cozily occurring at the same time (which, admittedly, may be a non-exogenous development).

Thanks for the link, I'm certainly going to be following it.

"The real difficulty seems to be political centralization cozily occurring at the same time (which, admittedly, may be a non-exogenous development)."

This is the heart of the problem.

When I wrote about this issue last summer I was tempted to head my essay with the following quotation:

"A state which lays its foundation is rare and heroic virtues will be sure to have its superstructure in the basest profligacy and corruption… For as wealth is power, so all power will infallibly draw wealth to itself by some means of other."

Edmund Burke, The Works on Edmund Burke, Vol II p. 105

I ended up going with a quote from Tacitus instead.

There is enormous incentive for those with concentrated wealth to transform it into concentrated power, just as their is enormous incentive for those with concentrated power to transform it into concentrated wealth.

One goes with the other. In my mind it makes little sense to separate them.

But I have been saying these things for a long time now. In addition to the the "Economies of Scale Killed the American Dream" post linked to above, those concerned with this topic will find another post from last year of interest:

"Far Right and Far left? Two Peas in a Pod?"

T. Greer. The Scholar's Stage. 10 April 2013.