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The kids aren't alright (continued)
This college graduation season, many commencement speakers are extolling AI, then getting boo'd by the students. Most notably Eric Shmidt, in University of Arizona, after telling students to "deal with it"; also less recognized speakers in smaller universities (like MTSU and UCF).
Glendale Community College received additional boos because it used an AI tool to read students' names, which messed up.
In contrast, Steve Wozniak told students they "all have AI — actual intelligence" to applause.
This reflects multiple overlapping problems:
Tech students are particularly affected: many were told that if they went to college, they'd be practically guaranteed an easy, high-paying job, like their older peers; but today they graduate to a bad job market. Meanwhile, the companies they planned to join are posting record profits. AI has invalidated some of their learned skills, and moreover, has the potential to worsen the job market and wealth gap.
Although it's not just tech. Liberal arts students have worse job prospects (although some of theirs were never good), and seem to be more against AI. Law and accounting are apparently being impacted, because AI automates their entry-level jobs.
In summary, the speakers have a completely different perspective due to their age, AI outlook, and wealth; and students aren't happy to see their college which has failed them do it one last time, by appointing an out-of-touch speaker (or using AI to flub announcing their names).
Where to go from here?
Undergraduate education is deeply flawed. I think (not an uncommon position): students should only go to college if for graduate education (which is also flawed but for different reasons, and has purpose until ASI or a suitable alternative). Otherwise, they can learn degree skills in high school or on-the-job training: probably a free unpaid internship, which (as long as it demands real skills, not cheap labor) would be an improvement over paying for college; or pursue a trade. But first, employers must no longer prioritize (let alone require) college degrees; I believe this is happening in some fields, but slowly. In the meantime, more students should and will attend cheap online degree mills, possibly alongside an internship (to graduate with job experience and a better resume).
As for AI...I don't really know. It has some great use-cases, and the potential to strictly improve standards of living (why do something that AI can automate?); it and/or another revolutionary advancement is probably necessary to mitigate climate change and TFR collapse. But it also causes some problems, and has the potential to create global catastrophe. Regardless, I don't expect I or the graduates can influence its evolution or effects. For those reasons, I'm not really optimistic or pessimistic about it. At least I'm aware enough not to extol it to college graduates.
I think it's worth noting that the idea that selfish old people are hoarding all the goodies and thereby screwing over the young is one that's been around for a while. When I graduated college into a weak job market (30 or 40 years ago) that was a very popular idea. (Allegedly) old people weren't retiring and making room for young people; old people were preventing new housing from being built in order to enhance the value of houses they had bought for a song many years ago; old people insisting on fat social security payouts they didn't really need which would result in an insolvent system; old people pushing the government to take on lots and lots of debt which would have to be paid by future generations. etc. etc.
I kind of believed it at the time, but the fact that it's so persistent makes me a little skeptical.
That being said, assuming AI doesn't destroy us but instead generates a lot of new wealth, it's pretty obvious that the benefits of that wealth won't be distributed equally. And I could easily see a situation where people who happen to own equities, real estate, and other capital goods end up being the big winners while everyone else licks the street. (Ok, that's an exaggeration, but if a utopia emerges where everyone gets UBI and can live the life of their dreams, such people might still be pretty unhappy if there is a sort of permanent aristocracy in place.) And it would make sense that this aristocracy would be disproportionately old people.
I could also see it happening that medical advances allow this aristocracy (and everyone else) to dramatically extend their lifespans, which would arguably exacerbate this problem. From an abstract perspective I would rather be a peasant in a world where everyone gets UBI and a super-long (healthy) lifespan than a fat cat businessman in that world's past. But I can see how people might get upset at being consigned to a permanent lower class.
It’s true that lifespans have risen due to medical technology, but it seems that maximal lifespans have not, you just don’t need as much good luck to reach them.
I'd add that lifespans have indeed risen due to medical technology but healthspans, so to speak - that is, one's longevity as a healthy person capable of working -, have not.
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In the strong sense of maximal, I agree with you - the maximum human lifespan has been 100-105 since time immemorial. But decreasing mortality at older ages means that any given high percentile (95th, 99th, even 99.9th) has been visibly increasing in my lifetime.
The apparent maximum lifespan has dropped because there are fewer places where you can credibly claim to be 110+ based on dodgy records.
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It's pretty hard to avoid the elderly stickiness effect when the vast majority of jobs are stuff you can just sit at from 60 onwards as a soft sinecure if your industry isn't particularly proactive in running the purge.
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Except for not retiring, these all seem true both now and when you (and I) were young, but not true 100 years ago. I'd argue that the alienation of youth could easily be responding to a real change.
The alienation has persisted for over a half century, because the complaints have been true over that period.
Exactly. Most Elderly welfare programs were designed under fundamentally different conditions. 65 as a retirement age made more sense when a considerably-smaller chunk of the population made it there with way less years in the tank after working a lot more physically arduous jobs and their end of life care options were a lot less numerous and expensive. By the time that today's youth get to that age the programs will likely be drastically reshaped and cut to accommodate for this new reality and/or luxury robot communism for all since human labor is no longer useful. Since the elderly have enormous voting clout in democracies there's also no particularly good way around this, and any changes will likely involve large degrees of grandfathering.
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What's your basis for believing this? In 1926, roughly a third of Americans worked in agriculture. I can easily imagine young people complaining at that time that old people owned and controlled all the best land in the United States.
Of course, I don't know one way or another. But I do know that in a free market economy, there are always capital goods and other resources in short supply. And that, logically, older people frequently have had a better chance than young people to acquire and accumulate those resources.
Indeed, the historical norm for settled, agricultural societies is that the elderly have everything and the young work for them. We do not see youth complaints much from before 1900, but there is evidence in the sources indicating that the Greeks and Romans were very concerned about managing it.
Wasn't this part of why the Romans were always on campaign? War redirects the energies of restless young man with little stake in the existing order.
These campaigns also involved a whole lot of stealing the foreigners' land and giving it to said young men. Nobody with a 40 acre land grant, slaves and loot taken as spoils, and a new wife is particularly interested in causing civil unrest. And now your newly conquered territory has a nice, healthy population of loyal veterans with a very personal stake in maintaining the new order.
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In 1926 the median American was around 26 years old. Thanks to the baby boom, the median wasn't much older in 1970, 28, and was 30 in 1980. Today, it's 39, and will likely be over 40 by 2030. The old have never been so proportionately numerous.
This is aggravated by the fact that economic growth has been declining since the 1980s, and especially since the end of the 90s. Barring 2021, all but the oldest Millennials never experienced 4% GDP growth as a member of the labor force. All but the youngest of Gen Z have never experienced 3% GDP growth in the workforce, again barring 2021.
I agree, but why does this matter? I mean, there were certainly a lot of rich and powerful old people in 1926 in the United States. Enough for young people to form a belief that old people were hoarding the goodies.
I did a random search, and the graph I found indicated that in the 1970s and 1980s, there were a lot of years with GDP growth well under 4% and sometimes under 0%.
There really weren't a lot of old people around in 1926 period, let alone a government subsidized upper-middle class of retirees. In 1920 less than 1/20 Americans were over the age of 65. Now it's 1/6.
That there were bad years in the 70s and early 80s doesn't change the fact that no one under the age of 40 has experienced anything like the sustained economic growth we had from 1985-2005. The 1970s sucked compared to the 50s and 60s but still had faster growth than the 2000s, 2010s, or 2020s so far.
In my view, 1/20 is more than enough to form the basis for class resentment. And note that the line doesn't necessarily need to be drawn at 65. For example, I myself am in my 50s and I could envision a lot of young people resenting the fact that I bought a house many years ago which, if I were to sell it today, would provide me with a huge windfall on the back of some young couple who desperately needs a residence near a major city.
FWIW, when I graduated college (after 1985) there was a recession on; I couldn't find a job; I ended up pursuing post-graduate studies instead; and I very much resented old people for much the same reasons young people do today. It felt like the ladder had been pulled up.
To trigger class resentment, the elderly would need to be a privileged class. There are two institutions that allow this in the modern west: pensions, and mass homeownership. America doesn't really have pensions until the New Deal, and the only non-rich Americans who own their own homes in that period are farmers. The (middle-class and below - class resentment of the rich elderly is obviously real, but is about class and not age) urban elderly were seen as pitiable before these institutions came into their own.
I can't speak for 160-acre family farms in the early 20th century US, but in the (very long) era of subsistence family farms in the west, gramps is generally perceived as a net positive (but is still allowed to starve before the prime-age family members when food gets short). So I don't think there would be widescale resentment of the elderly among the smallholding class either.
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Elderly didn't have the benefit of the modern medical infrastructure where you have a great chance of toddling around in pretty solid health at 70 compared to where you were. Look at the recent presidential stock.
Inheritances are coming later and increasingly past the ages that facilitate real meaningful innovation from the recipients. The laptop jobification of the economy means there's way more scope to just hold on to roles into dotage years.
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A lot of the paths that made money in the older generation got institutionalized. For sales and trading type roles or even Ibanking you read a lot of old stories of a guy just met someone then is at major bank. (Epstein, Michael Lewis. High profile on this path. Many others). Now it’s institutionalized and still pays well but there are 5-10 highly profitable firms and to get in you need to be “math Olympiad winner” and the competition is against a global population. Plus you have to a great degree lost the ability to get equity in form because the competitive moats have increased a lot.
It does feel like the current career paths offer less stability and your career can end quickly even with fairly strong credentials. The exception is a huge explosion in government work which I would include health care in.
Probably some new routes are emerging and in 25 years we will see a bunch of rich people who just started doing something.
Lot of this is hindsighting the previous generation's wealth accumulation methods. Stuff like Medicine is pretty evergreen but each decade or two the dominant forms of finance earning will shift violently. I used to work with a bunch of old Floor traders and that is a totally different skillset than modern trading.
There's also generally a hindsight effect where people assume the big trades of the past were bleedingly obvious since the people who hit them now have the biggest pulpit
You can still see in that industry the skillset change.
1970’s - some even no college made it. Still some truly smart people 2000’s - Big Ten Schools and above 2020’s - what was your placement on the IMO
Another way to look at it - 1970’s the best local talent in Chicago or NYC who just wandered into trading. 2000’s The best in recruited from the top schools in the region. 2020’s the best recruited Internationally. So yes it’s much harder today. Finance in general has gotten much more selective. PE is likely very similar.
Ownership seats are also basically non-existent now in PE or trading. If you started in PE in the 1980’s you have your name on the door. If you started post 2010 you work for a listed PE firm and only get a split of the fees. Which is a lot of money.
Tell me about it. Biggest BS ever: even very very good people often don't make it beyond being desk head where the partners siphon off their share. Even the places that say "share of the profits if you come to us!" usually don't offer you more than 2-3% of the returns (before tax, mind you) which you generate for them and you still have to deal with a lot of bureaucracy of the stuff above the pod structure (and pay for it of course). Starting up your own place is also now becoming effectively impossible unless you have mid double digit millions lying around because of all the rules and regulations and partnerships you need.
The money is very very good regardless but there's a difference between having real autonomy vs being a cog in the machine, which is what a lot of modern trading is becoming (remember, the models etc. you develop don't belong to you, they're company property so you can't just up and take them to a competitor firm without getting sued, and nobody (other than the aforementioned pod shops above with their own issues) is hiring you unless you agree that ownership of models isn't yours.
Above desk head it was always internal politics. It’s the same in every part of finance, in tech, etc. Some people don’t realize there were plenty of ultra-smart people in the 80s and 90s who also capped out far below the top because they couldn’t play the game. The ones whose names you know today are the survivors. A lot of the real autists with zero social skills who made it to mega billionaire status (Hohn, Rokos, the Two Sigma guys or one of them at least) were helped along because people who had those skills adopted them and essentially exploited them to get rich themselves.
Even in the quant space that means that smart people who seem to have the ability to handle clients, participate in sales (even if only as ‘the smart guy’) and play that role are most likely to make it to the top. It’s the same in every field. If you’re a really smart procedural lawyer who is kind of autistic you will often never make partner because the existing partnership knows you’re (a) unlikely to leave [autists hate change] and (b) probably can’t bullshit your way through the marketing exercise that is every non-technical part of an interview. Outside of the largest partnerships and public corporations where dilution is negligible an equity stake is often far more about being pushy than anything else.
I also think that like @Opt-out says the field is just too saturated with mathematically / spatially super smart IMO winners, who themselves can do a lot more with AI now than they could a few years ago in terms of speeding up implementation / backtesting / whatever. 40 years ago a lot of the white / Jewish top math grads aspired to a career in academia, the younger generation is more diverse and more financially motivated. The rest go to SpaceX. Meanwhile the dumb as bricks bond salespeople I know who would struggle to precisely define carry and roll or how the post libor forward rates curve is computed in a non wishy washy way, or the commodities guys whose market color consists of calling up their clients whenever some OSINT Twitter with a million followers posts a new satellite picture of a missile attack, somehow seem to continue to make tons of money.
Moving up internally is the same as always. It’s the specific ownership seats that are non-existent. You can still be Lloyd Blankenfien CEO of Goldman Sachs but you can’t be a K, K, or R in KKR. Because things have become institutionalized, scaled, and moated. Pure trading the last time you had a path like that was probably early 2000’s and then when banking got banned from prop trading it opened up a big path to scale as big competitors left the market. That window is likely dead now.
There are tons of ex top pod shop guys who have set up on their own over the last 5 years, often backed by the last place they worked. They usually don’t name the company after themselves, but that’s because this has been in decline since at least the 90s. Functionally they are in charge, they could rename ArcNextGammaWhatever to Miller Patel Sarkisian And Company, what’s the difference?
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Yeah but like I'm sure there's a relatively niche employment spot right now that will turn out to be the big hindsight winner circa 20 years from now. AI researcher was a skilled profession 15 years ago but you weren't paid Lebron James money for the bleeding edge and there's now way more of a glitch of people entering the field.
But yeah there's a reason there's a meme with talking to 50 year olds in elite jobs now and getting 'I started my career at 27 after spending 3 years backpacking and getting turned onto this field by a newspaper ad after junior college' versus the new graduates being the absolute bleeding edge of filtering.
Hell my dad managed to get to a very senior offshore oil platform design electrical engineering position with 2 years before dropping out of a third-tier undergrad and a trade electrician cert. These things happen when you're born in 1949 and get in early on a field that ends up exploding in relevance
Lmao, AI research was an extremely niche profession 15 years ago. AlexNet came out in 2012 and pioneered deep learning which lead to transformers/LLMs. The only people who were AI researchers were college professors and the occasional industry researcher. You had a number of folks doing data science/ML engineering but it was pretty much just a sub-domain of statistics as thats what boosting/SVMs/Random Forests are.
That's the point though. Occasionally the economic fairy will come through and bless something to go from academic curiosity to instant megabucks then inevitably every university in the land will dilute the original credential to nothing
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The only person I can think of who just lucked into their position without heavy filtering today feels like JD Vance. Sure he got into Yale Law, but he sort of just wrote a book that was ok professionally. Then met a billionaire who turned him into the VP. US politics might be the only place I can think of where some of it just feels lucky.
There are still tons of people who get lucky. There are random people in PR or marketing at nvidia worth millions. I know a lot of midwit at best people who coasted around non-technical startup jobs (copywriting, project management, marketing, social) who ended up at companies like Coinbase and Revolut who are either rich or going to be. There are always new businesses blowing up.
Similarly in American politics, the most common route is still elite upper middle class childhood - HYPS undergrad - HYS law - clerkship - DC. There are exceptions in every field. Even in quant finance there are a handful of people every year who get recruited out of nowhere because despite no real credentials they contribute enough useful research. I’ve met one, a Balkan immigrant with little formal education.
I think people just see this through the lens of hindsight. There were tons of people in the 70s who did the ‘smart thing’, went to a top college, got a grad job (‘management trainee position’) at IBM or PanAm, and never made fortunes.
I feel like the 70s equivalent still do fine on the aggregate though even if they don't teleport into billionaires. Just being a solid MBA type and pulling in 85th percentile income for a 30 year career is a perfectly good and stable life
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US Politics you're gonna be way more aware of people who end up in the top jobs. There's still plenty of right time, right place hugely-successful people but the traditional UMC path has become exponentially more arduous as a result of striver optimization.
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