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Did the FED create wokeness?
I graduated with a CS degree ten years ago, and I still regularly meet my old class-mates. Some are right-wing, often libertarian types, while some have gone full woke including some unexpected ones. The main factor separating the two seems to be what industries they are in. Those who write software for the electrical grid, defence contractors, or industrial machines seem to have moved rightwards over the past decade. Those who work in industries propped up by low interest rates have all gone radically left. Spotify's headquarters are close to my office, and I am good friends with several of their employees. Their business-model is essentially dependent on an extreme individualist philosophy. If music is an integral part of culture, something that is typically experienced live and locally, the business of making cents per thousand listens is infeasible. Spotify is built on billions of people listening to the same pool of music. No nations, no borders, just atomized consumers is a suitable ideology for such a company. Grubhub, uber, twitter and Netflix make small sums of money off vast quantities of people. In a more nationalistic world, they wouldn't be nearly as valuable. My woke friends nearly all went for a company that has millions of clients all over the world, generating tiny profits off each client. The art stemming from these companies tends to be bland and placeless. Strong collective identities such as nationalities, ethnic groups, traditions and gender roles doesn't flow well with a world consisting of users.
These companies had another pillar holding them up besides global homogenization, low interest rates. Spotify, Netflix, Uber, and Twitter have lived for over a decade without any real profits. They have consumed monstrous amounts of cash without generating much revenue. This has only been possible because of low interest rates. If bonds were yielding 8% a year, borrowing money for fifteen years and dumping it into spotify wouldn't have been an attractive investment. These companies have lived on cheap credit and a globalized world pooling wealth into a few major cities. A global financial hub is going to be multicultural, it won't be able to have a strong culture or strong norms, and it will be inherently individualistic. NYC needs rich arabs buying expensive apartments. Those working in finance insurance and real estate benefit from Saudis buying lavish apartments which are empty 95% of the time. A janitor trying to buy a house is less amused by Saudi oil flooding the NYC housing market.
Those coding for the electrical company are more interested in people who are committed long term to their society. They don't need a global market, as their market doesn't extend further than the grid. Their interest is people with high skin in the game in terms of the society they live in and who are willing to make long term investments in the grid.
Those on the left seem to still view the elite as those managing local businesses. They see the elite as conservative, and having the values of my friends working at industrial companies. They seem to have missed the growth of a new elite that is international by nature. This elite builds its wealth on taking a 0.1% fee for managing the investments of millions of people, or charges a few cents per payment on their fintech app. My suspicion is that they don't want to see the nature of the new elite, since so many of them make their living serving it. Universities need foreign students, journalists need international readers. The blue tribe is urban because they make their living teaching, entertaining and managing with funding coming from tech/finance. The bookmakers at the coliseum in Rome were more dependent on Rome as a vast empire than the farmers were. Thousands of people betting on gladiator fights required an empire to sustain it. Farmers on the other hand didn't like competing with slaves.
Interest-rates are rising and tech lay-offs are in the news. Spotify, twitter and Facebook are slashing employees. Meanwhile, new nuclear power is in the news and thousands of coders will be required. Defence contractors are trying to hire all the people they can find. Reindustrializing has lead to a surge in jobs in manufacturing, and the machines require code. Government, health care and other sectors are in dire need of developers and there is no shortage of jobs. We are seeing a shift away from 10 cent per thousand adds to agricultural machines.
With higher interest rates San Fransisco, LA, NYC, and London will decline as portions of GDP and manufacturing hubs will increase their portions of GDP. We are seeing a shift away from a global woke class to manufacturing, both in rust belts in the west, but also in China and various developing countries. The end of occupy Wall street is often viewed as the start of the great awokening, the end of the global financial crisis was the FED printing money. The great awokening occurred roughly at the same time as zero interest rates started to have a tangible effect on the economy.
I'll attach my related post on this. I think that's my most popular post on this website: https://www.themotte.org/post/238/what-if-your-entire-worldview-was/43892?context=8#context
Is there any evidence that manufacturing is increasing in the West? According to the Fed, US Industrial Output has been basically stagnant since the GFC and has barely grown since 2000. https://fred.stlouisfed.org/series/INDPRO/
I believe the problem is that there are excessive regulations on building things in the real world. There are endless permits and permissions and approvals that you need to build a house, pipeline, factory, power plant. But in finance and services, you can just get going. It's a totally free market in crypto, you just set up the project, do your airdrops and trade on a decentralized exchange and nobody can or will do anything about you. Maybe Gensler's goon squad will come for them some day soon. It's slightly less laissez faire in ads or Spotify or Uber but it's still a pretty free market, all things considered. If you want to build a gas project in Australia, you run the risk of having to pay 1.5 billion AUD in regulatory/legal fees, wait six years and not even be sure it'll be approved (this is according to Santos, the company involved so the figures might be blown up a bit): https://www.afr.com/companies/energy/santos-ceo-frustrated-as-narrabri-process-drags-on-20210830-p58n2f
Australia is not the US but I think the same principle applies. The US is not welcoming to development. There are many expensive environmental approvals and more coming soon with the Green New Deal, I believe. Money and talent is thus being funnelled out of industrial production and pumped into finance, tech or services. Agriculture is similarly suppressed. If anyone's seen Clarkson's Farm Season 2, it shows the great lengths that local councils will go to prevent development or people starting businesses. Or in the Netherlands, farmers were very angry about environmental regulations that prohibit them from producing due to nitrogen emissions. In San Francisco restaurants have to pay about $22,000 USD in legal fees to start: https://ij.org/press-release/new-report-shows-how-san-francisco-stifles-entrepreneurship-with-expensive-time-consuming-rules-and-regulations/
And just look at California's experience with High Speed Rail! They're less functional than dodgy North African countries like Morocco, according to a French rail company: https://www.businessinsider.com/french-california-high-speed-rail-north-africa-biden-trump-2022-10
On the other hand, China does well at manufacturing because they like efficiency and development, they mechanize their ports, encourage development, support industry, keep energy prices low and build HSR (as opposed to spending money and not building it). I predict that higher interest rates will constrain the frothy tech and finance sector in the West somewhat but that they'll remain the leading sector of the economy simply by being sabotaged the least.
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