Ramble at the beginning of August 2021: We’re lost, looking for meaning, alas inequality [the Tractatus]

The inequality that sends billionaires into space is not an independent and isolated feature of the contemporary world. But let’s not start there. Let’s start with something ‘easy,’ Wittgenstein’s Tractatus, then we can think about the meaning of life, and then we can take a look at inequality – kith and kin to those billionaires. I end with a somewhat whimsical suggestion for a Twitter tax for the rich.

This is something of a grab bag and a parking lot. I’ve been thinking of these things and put them here so I know where they are. In time I’ll attempt to make sense of them. Maybe.

Wittgenstein’s Tractatus

I recently read a post by Rohit (The Architecture of Knowledge) that reminded me of Wittgenstein’s Tractatus Logico-Philosophicus. I asked him about it and he replied that, yes, he was familiar with it and that it was “an inspiration forever in its scope and ambition.”

I understand where he’s coming from. I read it early in my undergraduate years at Johns Hopkins and it had a strong effect on me. Yes, for its logical structure, but also for its last proposition: “7. Whereof one cannot speak, thereof one must be silent.” I’d almost say its appeal was evenly split by that proposition and by the rest of it.

Looking back, it is a peculiar work. I went on to study computational semantics in my graduate years at SUNY Buffalo where I studied computational semantics with David Hays (while working on a degree in English literature). There I certainly was interested in something one might as well call “the architecture of knowledge,” that is, the structure of human knowledge. For the most part we – members of Hays’s research group – were interested in general principle, on the one hand, and small scale structures on the other. Yet my first major piece of work, an analysis of Shakespeare’s Sonnet 129, certainly implied large scale structure, as did my dissertation, “Cognitive Science and Literary Theory” (1978). That work certainly looks very different from Wittgenstein’s Tractatus.

Wittgenstein was much taken with symbolic logic, which was relatively new at the time. He took its propositions to represent, that is, to be capable of representing, facts about the world. The world itself? Is that what he was chasing? Or did he think of those propositions as representing what Noam Chomsky came to call mentalese, the conceptual language of the human mind? Perhaps he did, but if so, he later came to rather different views on such subjects. In any event it certainly doesn’t look the work I did with David Hays or, for that, matter any of the roughly similar work others were doing at the time (see, e.g., John Sowa’s comprehensive website on knowledge representation).

Of course representing how we think about the world is very different from representing the world as it really is. That’s something fraught with metaphysical difficulties. And yet that’s something I’ve given some attention to in recent years, I’m thinking particularly about my work on pluralism, but also my more recent work, What economic growth and statistical semantics tell us about the structure of the world. This work, however, is quite different from, has a very different texture than, the earlier work on conceptual structures.

That there is a clear difference between these two bodies of work suggests that we’ve learned something in the decades that have passed since Wittgenstein wrote his Tractatus. That work, it seems to me in retrospect, is neither about the world nor about our representations of the world. Or it is indifferently about both. It is an undifferentiated metaphysical ether.

To live a meaningful life

Meanwhile, our visions of the future are vapid, a theme I’ve been exploring in a recent series of posts on billionaires-in-space and in a post on our visions of the future. I think this is linked to various posts I’ve made about living a meaningful life:

• Scott Sumner, Meaning in Life,
  
• Our Rage for Order and Coherence,
  
• Personality, understanding, and anxiety as the driver of cultural evolution [Tech Evol],
  
• Fear of death as a driving force in human (cultural) life

Our visions of the future are not coupled with, do not emerge from, a belief in living a meaningful life. Absent such a belief, billionaires going into space collapses into self-regarding joy-riding. These seem to be people unconnected with the world, holding themselves above and outside the world. They are hollow men.

But how does the human mind, the human spirit, find itself at home in the world? For that’s what’s at stake. In a post about Mark Moffett’s The Human Swarm I made some observations about identity that are relevant to the question of meaning:

The argument that needs to be made is that our nervous system affords us open-ended awareness of the world. I suspect that’s a joint product of the active nature of the nervous system and the emergence of language. On that active nature, the nervous system doesn’t passively take the world in, but rather actively probes the world through continuously projecting expectations – think, for example, of the model William Powers developed almost a half century ago in Behavior: The Control of Perception (1973). Thus perception is a process of verifying those projections (or, to use a more current language, updating Baysian priors).

The emergence of language leads to an endless curiosity about everything: What’s that? How does it work? Where’d it come from? Living becomes thus becomes a dialog with the world. And the question, Where did WE come from? will arise in that process. The answer initially takes the form of myth, of stories about origins. And those stories, in effect, establish the link between a society and world. That too is a matter of identity.

Those same myths and stories direct our search for meaning in life. Where do stories of billionaires joy-riding in space direct that search for meaning?

Inequality, executive pay, and stagnation

Back in 2019 Tyler Cowen published a short article in Time, Why CEOs Actually Deserve Their Gazillion-Dollar Salaries, which was excerpted from his recent book, Big Business: A Love Letter to an American Anti-Hero. After acknowledging that that top CEOs make 300 times as much as the average worker, Cowen argues:

While individual cases of overpayment definitely exist, in general, the determinants of CEO pay are not so mysterious and not so mired in corruption. In fact, overall CEO compensation for the top companies rises pretty much in lockstep with the value of those companies on the stock market.

The best model for understanding the growth of CEO pay, though, is that of limited CEO talent in a world where business opportunities for the top firms are growing rapidly. The efforts of America’s highest-earning 1% have been one of the more dynamic elements of the global economy. It’s not popular to say, but one reason their pay has gone up so much is that CEOs really have upped their game relative to many other workers in the U.S. economy.

Today’s CEO, at least for major American firms, must have many more skills than simply being able to “run the company.” CEOs must have a good sense of financial markets and maybe even how the company should trade in them. They also need better public relations skills than their predecessors, as the costs of even a minor slipup can be significant.

And so forth and so on, “yada yada,” to quote various characters from Seinfeld. I’m willing to grant that these highly compensated executives get their jobs through honest labor, rather than some form of corruption, and that, on the whole, they are more competent than the next lower tier of executive talent.

What I question is that ratio between CEO pay and the pay of the average worker, 300-to-1. Is that necessary? Wouldn’t a 30-to-1 compensation ratio leave plenty of room for these (mostly) guys to play “mine is bigger than yours”? Where did that ratio come from?

We know roughly when it arose, after the 1960s. In August of 2020 the Economic Policy Institute reported:

In 2019, a CEO at one of the top 350 firms in the U.S. was paid $21.3 million on average (using a “realized” measure of CEO pay that counts stock awards when vested and stock options when cashed in rather than when granted). This 14% increase from 2018 occurred because of rapid growth in vested stock awards and exercised stock options tied to stock market growth. Using a different “granted” measure of CEO pay, average top CEO compensation was $14.5 million in 2019. In 2019, the ratio of CEO-to-typical-worker compensation was 320-to-1 under the realized measure of CEO pay; that is up from 293-to-1 in 2018 and a big increase from 21-to-1 in 1965 and 61-to-1 in 1989. CEOs are even making a lot more—about six times as much—as other very high earners (wage earners in the top 0.1%). From 1978 to 2019, CEO pay based on realized compensation grew by 1,167%, far outstripping S&P stock market growth (741%) and top 0.1% earnings growth (which was 337% between 1978 and 2018, the latest data year available). In contrast, compensation of the typical worker grew by just 13.7% from 1978 to 2019.

Cowen has also written about something he calls The Great Stagnation (2011), when America’s productivity started slumping. As I recall he sees stagnation as beginning in the 1970s. So CEO pay starting galloping upward at roughly the same time economic productivity started slowing down. Is there a connection there?

I’m not suggesting that one caused the other, though I must admit the correlation is tempting. However, the CEO compensation system is not a system that is isolated from and thus independent of the overall economy. They are two aspects of the same economic system.

* * * * *

Cowen ends the article with these paragraphs:

In fact, the main driver has been the blossoming of superstar firms that sell an innovative product and have global reach, as well as productivity shifts that benefit those companies especially. These firms include Google, Facebook, Boeing and Verizon. Typically, everyone in these companies—from senior managers to personal assistants—is paid more than workers at their more traditional counterparts. But that reality makes for a less juicy narrative than stories of CEOs taking money from their workers.

The overall value of superstar firms is yet another reason a first-rate CEO can be so very, very valuable. Building such an operation helps those firms raise wages for just about everyone. So the real question, looking forward, is what we might do to get more of those companies, so that more people’s pay can go up.

Do those superstar really account for most of the increasing spread of the compensation ratio? Judging from the examples Cowen gives these are high-tech firms. Is the high-tech sector moving away from the rest of the economy? Is that what’s driving the increase in inequality we’ve seen in the last half century?

If so, why does Cowen think that creating more of such firms will benefit more people (though he doesn’t specify whether he’s thinking in absolute terms or percentages)? Perhaps all that will happen is that a few more people will brought into this elect sphere, which will continue to pull away from the rest of the economy. I note that much of the impetus for Universal Basic Income (I believe Cowen is skeptical about it) comes from the high-tech sector, as though they are preparing to leave the rest of the economy behind but want to ensure the people have sufficient material goods that they won’t become inconveniently rebellious.

* * * * *

And still we have that curious correlation between stagnation and skyrocketing CEO compensation.

* * * * *

Why does that drastically lopsided ratio bother me? Some years ago Christopher Boehm published Hierarchy in the Forest (1999), which speaks to issues of class and equality. Boehm is interested in accounting for the apparent egalitarian behavior of hunter-gatherer bands, the most basic form of human social organization. While individuals can assume a leadership role for specific occasions, e.g. a hunt, there are no permanent leaders in such bands. Boehm does not argue that such bands are egalitarian utopias; on the contrary, primitive egalitarianism is uneasy and fraught with tension. But it is real.

Boehm finds this puzzling because, in all likelihood, our immediate primate ancestors had well-developed status hierarchies. Boehm ends up adopting the notion that the hierarchical behavioral patterns of our primate heritage are overlain, but not eradicated or replaced, by a more recent egalitarian social regime. Other than suggesting that this more recent regime is genetic Boehm has little to say about it.

Boehm thus seems to be arguing that there is a tension between hierarchy and egalitarianism that is inherent in human nature. If so, isn’t that 300-to-1 compensation ratio stressing that inherent tension? Can a wealthy high-tech economy live successfully and peacefully while geographically intermingled with an impoverished mid-tech and low-tech economy?

How about a Twitter tax for the rich?

The other day some rich person (no, I’m not thinking of Elon Musk) make a boneheaded remark on Twitter and it immediately began attracting ‘likes’. Of course, bone-headed remarks are common on Twitter and I don’t have any reason to believe that rich people are especially prone to them. But I fear that the boneheaded remarks of rich people get more attention and are given more creditability than those of ordinary folks.

Why? Because they’re rich, they must know something, no? They know whatever made them rich, and if they inherited a big chunk of money, that doesn’t signify much.

But wealth is a convenient metric and we ¬¬– by which I mean primarily we in the USA, but others certainly qualify – are all-too inclined to think that wealth is a general measure of capability – just as trumpet players are biased in favor of the ability to hit high notes.

With that I mind, I propose that we impose a Twitter tax on wealthy people. As long as they insist on spouting off and being taken seriously, let them pay for the privilege. It might work something like this. Anyone with a net worth over $10 million – which, I realize, isn’t exactly rich in today’s world, but it’s way more than most of us have – deposits $10,000 in their wealth-tax account when they sign up with Twitter. Whenever they make a tweet, we decrement the account by some suitable amount, say $0.001 per character per view. A 100 character message that reaches 10K people would thus cost $1000; if it reaches 100,000 people it would cost $10K. When the 10K deposit is exhausted, another deposit is required to continue posting.

Maybe that’s too much. And we probably want to set a time-limit on exacting the tax, say a month. Maybe we have several different tiers, with those in higher tiers taxed at a higher rate. We can monkey with it in all sorts of ways.

What would we do with the money thus collected? Childcare support, maybe some physical infrastructure ¬– how about free Korea-class broadband? Let’s increase teacher pay for pre-K, kindergarten, primary and secondary school, and do something about the adjunctification of post-secondary instruction. Who decides these matters?

And how long before the rich folks figure out how to game that system?