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I was thinking about this recently, and came to the conclusion that the generations from WW2 to Gen-X constructed a very tightly-optimized society - with no roo

I was thinking about this recently, and came to the conclusion that the generations from WW2 to Gen-X constructed a very tightly-optimized society - with no room for their grandchildren in it. Basically the economy today is a complex system that is overconstrained: there is no way to change it without the whole thing coming down, and yet it was also built for a population level that was less than half what we have now. As a result, all of the excess 1987+ births literally have nowhere to go in the society we have now, and they just float around as disaffected youth or never leave their parents' basement. Think of all the problems facing young people today, and envision the logical solution for them. Housing: why don't young underhoused people simply pick up a hammer, saw, and some wood and build themselves a house? If you do this in any major metropolitan area today, you will get a stop-work order and a zillion zoning and building code violations. Health care: if somebody is sick, go read a few textbooks and do what they say you should do. If you do this, you'll be arrested for practicing medicine without a license, and the number of residencies (and hence new licenses granted) is strictly capped to keep wages high. Aviation: with how dysfunctional Boeing is, why haven't competitors arisen? Because building a plane is so tightly regulated that a startup that can satisfy the regulations would basically look like Boeing, have roughly the same cost structure, and move as slowly. The one exception that lucky Millennials got into was tech, which was notoriously unregulated until about 5 years ago. That unregulation meant there was space for new people to enter the industry, and for new firms to take over other parts of the economy. Everybody else has had to fight for the limited new positions that open up in industries whose structure has already been decided.

xeromal 3y ago
I really appreciate this point and I've had similar thoughts. A lot of people nowadays point back to the peak of American civilization post world war II and think or expect that that will continue but like you said it was tightly optimized and I think a flash in the pan mostly from Europe being completely destroyed while the United States remained unscathed causing a massive boon. What I haven't considered are your points about everything being overly regulated to the point that no one can run a business or build their own home without so much BS and red tape that they are guaranteed failure. College was the entry point into success but even that is slowly collapsing. I don't know much about medieval Europe but my basic understanding makes me think that we live in a similar space where you don't really pick your job, you just work for the local Lord who happens to be a corporation that pays you enough to survive. I don't think it's as big as it used to be, but I think a lot of people bet their hopes and dreams on moonshots such as becoming streamers or athletes but that's just another way to keep everyone placated. I appreciate your comment
sublinear 3y ago
> generations from WW2 to Gen-X constructed a very tightly-optimized society - with no room for their grandchildren in it Not sure if I agree or disagree. Maybe you can elaborate on this specifically. The rest of your comment seems to agree with my opinion that a ton of red tape killed opportunities previous generations had. This is fundamentally a political issue, not an economic one.
- nostrademons 3y ago
  I pick on regulation because it's the most universal example, but the fundamental problem is overconstraint. When a system gets too complex, you can't change any of it without giving up other desirable properties, even if the new properties you're trying to attain are more important than the properties you give up. In terms of how we build our cities, for example, many of them are designed for a set number of people and then try to optimize quality of life for all those people. You can perhaps accommodate a 10% increase in citizens by building in marginal areas, upzoning parts, crowding, etc. But accommodating a 2x+ increase requires a radical revision of fundamental infrastructure. Your sewer system needs to be dug up and replaced with larger pipes. Your transit system needs to move from single-lane roads to either boulevards or mass public transit. Your educational system needs new schools, which generate new drop-offs, which further increases the strain on the transit system. Some people's property needs to be eminent domained. Some people's views will be blocked. Certainly the character of the city is going to change. All of this generates political opposition, so it definitely is a political issue in addition to an economic one. Democratic (in the political-system sense, not the political-party sense) voters pass regulations so that it doesn't happen, looking out for their own interests. But the consequence of those regulations is that growth, renewal, and innovation becomes impossible. The system is overconstrained, and cannot adapt to either large growth in population or large environmental changes. Any attempt to re-adapt it to the new realities of the world require that you throw away large portions, because all of the systems are interconnected and tightly optimized.
remarkEon 3y ago
Agree on basically all accounts. To elaborate a bit on this point: >Because building a plane is so tightly regulated that a startup that can satisfy the regulations would basically look like Boeing, have roughly the same cost structure, and move as slowly. Highly capital intensive industries like aerospace are extremely difficult to innovate in. The timeline for return is measured in decades, so you need full commitment from all involved. So it's not just that the regulatory environment is extremely onerous, it's that the aerospace industry itself, like other industries that index extremely high on complex engineering, is already so difficult that no one really wants to try (except Anduril, I guess). This is where everyone brings up Skunkworks and all the innovation that happened back in the 60s and 70s and so on, but I think we can agree that that time period really was different and we were much earlier in the curve, so to speak.
- nostrademons 3y ago
  Yes. I pick on regulation because it's the most general instance of this, but the actual problem is overconstraint. When you have too many requirements - when things are too optimized in certain directions - it becomes impossible to add new constraints. Gall's Law kicks in: "A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system." In aviation, the issue is that we've very tightly optimized along the dimensions of safety, pilot training, and ground operations - to the extent that nearly every detail of the plane is specified, and starting over is cost prohibitive on a systems-level because it requires changes at the airline level - and so when airlines introduce the new constraint of "optimize fuel economy", the only way to satisfy it is to take a 737, bolt on better engines, and compensate for the aerodynamic changes with software. This actually makes the plane less safe (though in unknown ways), because of potential bugs in the software and aerodynamic instability, but the alternative of going back to the drawing board and optimizing for all of these constraints in actual priority order is untenable. Things like pilot training and ground operations are externally imposed by the airlines, safety by regulators, and there is no room to go backward on these dimensions. If you go to an aviation museum and look at fighter jets from the 1950s, sometimes very high-performing jets, you'll notice that they are much simpler than 4th generation fighters from the 1970s onward. Simple cylindrical airframes, turbojets that are mechanically simple but guzzle fuel, analog avionics, usually straight lines. They also perform worse in several dimensions - they have shit fuel economy, range was short, pilots lack the situational awareness that modern-day ones do, they lack the maneuverability that today's jets have. But the simplicity allowed aerospace engineers to radically optimize in certain dimensions (eg. the SR-71 or U-2) and to try new things, something that doesn't really happen now.
reducesuffering 3y ago
It's even worse than that. Are you a decent chef, bartender, or barista? Good luck starting something small. That'll be $10k/mth overhead. Hope the conservative bank approves you.
charlie0 3y ago
I've realized this as well and the best solution I can think of is to take capital from the US and deploy it in less "efficient" parts somewhere else in the world. Housing: We're never going be able to change zoning laws to fix the problems. Healthcare: all the boomers and aging gen Z are going to need it and the younger generations are going to pay for it. Either though inflation or taxation. The only way out is to search for new grounds.

xeromal 3y ago

I really appreciate this point and I've had similar thoughts. A lot of people nowadays point back to the peak of American civilization post world war II and think or expect that that will continue but like you said it was tightly optimized and I think a flash in the pan mostly from Europe being completely destroyed while the United States remained unscathed causing a massive boon. What I haven't considered are your points about everything being overly regulated to the point that no one can run a business or build their own home without so much BS and red tape that they are guaranteed failure. College was the entry point into success but even that is slowly collapsing. I don't know much about medieval Europe but my basic understanding makes me think that we live in a similar space where you don't really pick your job, you just work for the local Lord who happens to be a corporation that pays you enough to survive. I don't think it's as big as it used to be, but I think a lot of people bet their hopes and dreams on moonshots such as becoming streamers or athletes but that's just another way to keep everyone placated. I appreciate your comment

sublinear 3y ago

> generations from WW2 to Gen-X constructed a very tightly-optimized society - with no room for their grandchildren in it Not sure if I agree or disagree. Maybe you can elaborate on this specifically. The rest of your comment seems to agree with my opinion that a ton of red tape killed opportunities previous generations had. This is fundamentally a political issue, not an economic one.

nostrademons 3y ago
I pick on regulation because it's the most universal example, but the fundamental problem is overconstraint. When a system gets too complex, you can't change any of it without giving up other desirable properties, even if the new properties you're trying to attain are more important than the properties you give up. In terms of how we build our cities, for example, many of them are designed for a set number of people and then try to optimize quality of life for all those people. You can perhaps accommodate a 10% increase in citizens by building in marginal areas, upzoning parts, crowding, etc. But accommodating a 2x+ increase requires a radical revision of fundamental infrastructure. Your sewer system needs to be dug up and replaced with larger pipes. Your transit system needs to move from single-lane roads to either boulevards or mass public transit. Your educational system needs new schools, which generate new drop-offs, which further increases the strain on the transit system. Some people's property needs to be eminent domained. Some people's views will be blocked. Certainly the character of the city is going to change. All of this generates political opposition, so it definitely is a political issue in addition to an economic one. Democratic (in the political-system sense, not the political-party sense) voters pass regulations so that it doesn't happen, looking out for their own interests. But the consequence of those regulations is that growth, renewal, and innovation becomes impossible. The system is overconstrained, and cannot adapt to either large growth in population or large environmental changes. Any attempt to re-adapt it to the new realities of the world require that you throw away large portions, because all of the systems are interconnected and tightly optimized.

remarkEon 3y ago

Agree on basically all accounts. To elaborate a bit on this point: >Because building a plane is so tightly regulated that a startup that can satisfy the regulations would basically look like Boeing, have roughly the same cost structure, and move as slowly. Highly capital intensive industries like aerospace are extremely difficult to innovate in. The timeline for return is measured in decades, so you need full commitment from all involved. So it's not just that the regulatory environment is extremely onerous, it's that the aerospace industry itself, like other industries that index extremely high on complex engineering, is already so difficult that no one really wants to try (except Anduril, I guess). This is where everyone brings up Skunkworks and all the innovation that happened back in the 60s and 70s and so on, but I think we can agree that that time period really was different and we were much earlier in the curve, so to speak.

nostrademons 3y ago
Yes. I pick on regulation because it's the most general instance of this, but the actual problem is overconstraint. When you have too many requirements - when things are too optimized in certain directions - it becomes impossible to add new constraints. Gall's Law kicks in: "A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system." In aviation, the issue is that we've very tightly optimized along the dimensions of safety, pilot training, and ground operations - to the extent that nearly every detail of the plane is specified, and starting over is cost prohibitive on a systems-level because it requires changes at the airline level - and so when airlines introduce the new constraint of "optimize fuel economy", the only way to satisfy it is to take a 737, bolt on better engines, and compensate for the aerodynamic changes with software. This actually makes the plane less safe (though in unknown ways), because of potential bugs in the software and aerodynamic instability, but the alternative of going back to the drawing board and optimizing for all of these constraints in actual priority order is untenable. Things like pilot training and ground operations are externally imposed by the airlines, safety by regulators, and there is no room to go backward on these dimensions. If you go to an aviation museum and look at fighter jets from the 1950s, sometimes very high-performing jets, you'll notice that they are much simpler than 4th generation fighters from the 1970s onward. Simple cylindrical airframes, turbojets that are mechanically simple but guzzle fuel, analog avionics, usually straight lines. They also perform worse in several dimensions - they have shit fuel economy, range was short, pilots lack the situational awareness that modern-day ones do, they lack the maneuverability that today's jets have. But the simplicity allowed aerospace engineers to radically optimize in certain dimensions (eg. the SR-71 or U-2) and to try new things, something that doesn't really happen now.

reducesuffering 3y ago

It's even worse than that. Are you a decent chef, bartender, or barista? Good luck starting something small. That'll be $10k/mth overhead. Hope the conservative bank approves you.

charlie0 3y ago

I've realized this as well and the best solution I can think of is to take capital from the US and deploy it in less "efficient" parts somewhere else in the world. Housing: We're never going be able to change zoning laws to fix the problems. Healthcare: all the boomers and aging gen Z are going to need it and the younger generations are going to pay for it. Either though inflation or taxation. The only way out is to search for new grounds.