July 24, 2008

Shiller: The New Cosmopolitans

A friend recommends economist Robert J. Shiller (who called the housing bubble years ago more energetically than just about any other prominent economist) article from 2006 on "The New Cosmopolitans."

My published articles are archived at iSteve.com -- Steve Sailer

36 comments:

kurt said...

Shiller called the housing bubble years ago when he called it "irrational exuberance part II". He predicted that housing prices would fall 40% in most markets. So far, housing prices in many markets has fallen 30% in the last year alone.

I think the problem of "locals" vs cosmopolitans is overstated. It is actually quite easy to become a "cosmopolitan". Just get a job in international sales and network like crazy whenever you travel to your target markets. Learning additional languages helps as well.

I lived in Japan for 9 years and Taiwan for 1. I am currently establishing sales and distribution in Asian markets for a U.S. optical parts manufacturer. I am also trying to set up a deal between a U.K. solar technology company (dye-sensitized TiO2 solar cells) and Sekisui, through a consulting researcher I know from when I lived in Japan.

International business is clearly the wave of the future. I know guys who source furniture from South Asia and other guys who are setting up medical tourism businesses for Americans looking for cheaper (and non FDA approved) health care in South and South East Asia.

The idea that globalization benefits "giant" multi nationals more than individuals is a liberal-left lie. This is simply rubbish.

It is relatively easy for a lone individual to establish an import/export business and to become a one-man "multi-national". I am essentially a "cosmopolitan" as are most of my friends. I have never worked for a company bigger than 50 employees. All of my "cosmopolitan" friends are either self-employed or work for small companies (less that 50 employees).

Based on my personal experiences as well as those of others I know, I believe that technology and globalization empowers the individual more than it does large corporations. Thats because large corporations are bureaucracies, with all of the organization pathologies that are inherent to bureaucracy. Individuals and well-run small businesses are not bureaucracies and, therefor, can run circles around the giant corporations.

Anonymous said...

Good article. Not sure to what degree it is parasitic on the phenomenon described in The Bell Curve of individuals of high IQ being bunched together and becoming increasingly insulated. But I think it is independent in its own right because of the "locals" it describes. Would be interesting to look more deeply at the locals since they are often characterized as tribalists and racists.

Anonymous said...

Back in the '50s, Brit Michael Young wrote in a similar vein in The Rise of the Meritocracy. But are cosmopolitans really going to get in cahoots with each other against the average Joe? I'm not so sure. I'm a cosmopolitan influential, as it were. I go to grad school in another country and speak several languages. I have a bias against stupid people and lower class people (usually the same thing). All the same, I'm against the NYT, CNN, Obama, illegal immigration, the multi-cult, affirmative action, etc. (if that's what Shiller's getting at.) But as far as I can tell, the average Joe is too busy getting fat and buying crap at Wal-Mart to care about much else (after all, that might get in the way of getting fat), so I'm not so sure whether it's worth my time to care about the average Joe. In fact, as far as I can tell, it's a surfeit of democratic egalitarianism that has got us into the present mess, not any cosmopolitan elitism per se.

KS said...

Yes, Shiller called the housing bubble even before 2006. The problem is with timing: you make money knowing when to sell more than when to buy.

Sure every clear headed analytical person could see the housing numbers were way beyond historical trends well before 2006. Notably absent from Shiller's analysis was ignoring or downplaying the fundamental shifts in the economy that caused this shift from historical norms, even if some of it was unsustainable or anti-free market.

Now if someone told me in 2006 that not only was the government and Wall Street going to do all it could to pump up the housing bubble, but in 2008 they'd do everything to sustain this artifically high housing valuations from heavily debasing the dollar to passing massive taxpayer bailouts primarily for wealthy financiers, speculators and astounding reckless people who had no right to be buying houses that would've been a prophecy of note.

prophetic.



to keep the inflated asset prices high by

c.o. jones said...

Obama and McCain are two of the "cosmopolitans," and Bush for all his faux-folksy ways is one too. To these guys, it matters more what Felipe Calderon and the assorted princes of the House of Saud think than what us poor dumb yahoos think. That explains their barely concealed antagonism to the average American and also goes a long way toward explaining why all 3 of these men want to flood our country with foreigners.

Anonymous said...

Interesting. I can't place myself in either camp.

I'm an in-house attorney who relies on his knowledge base rather than networking for income, yet I also made a conscious effort after my schooling to relocate to my hometown and put down roots. I don't do overseas travel. I don't even go on cruises.

Now here's where my story differs from most provincials: my hometown is Atlanta, so I get to stay put, and other knowledge-working cosmopolitans come here. And this is where my story differs from most cosmopolitans: my knowledge base is (without revealing much from RL) strictly local stuff, but stuff that's still bread and butter work for a large, publicly-traded company.

Wow. Looks like there's a niche for "locally-oriented cosmopolitans" to act as interfaces between globalist companies and the local entities they have to deal with when they come here to do business.

--Senor Doug

Anonymous said...

People of European ancestry are the only people who loose group loyalty when they become "cosmopolitan."

Anonymous said...

The time of the New Cosmopolitan (or Rootless Cosmopolitan as Stalin stigmatised them for round-up) has definitely come. And gone.

It's ironic this two year old article ran on a website in Pakistan, a country now disintegrating under the impact of centrifugal "local" forces.

At that time most people subscribing to Schiller's outlook would have deemed Benazir Bhutto a queen or princess of New Cosmopolitans. Now she's a cold corpse, done in by some ill-disposed "local".

New Rootless Cosmopolitans everywhere can profit from her example, and the prior example of the "Shanghailanders" of the Treaty Port Era in China.

Google up "Tales of Old Shanghai" for fun and moral profit. Watch "The Sand Pebbles" with Steve McQueen.

New Cosmopolitans are only fooling themselves if they think the locals can't rapidly identify, locate and purge them.

Anonymous said...

Steve - i think you hit on a really important issue here -

where do the loyalties of the talented and productive top 1% of society rest - do they rest with the other 99% of the members of their society or do they rest only with others in the top 1%

Steve, i think that to some extent the loyalty of the top 1% is influenced by the behavior of the other 99%.

When we in the 1% see many of the masses doing inherently self destrutive things, we tend to want to cut loose from them and cast our lot with the top 1% of other nations.

For example, when i go to certain parts of the US, the common folk, the folks in the middle of the iq distribution make an effort to live moral lives - they stay in shape, they drive reasonably, they are polite, they are just generally take care of themselves and their communities. When i am with people like this i certainly have feelings of patriotism and i want to protect America from external threats - i feel connected to the common folk of my country.


However, i go other places and i see folks with the same mid level of IQ doing crazy and self destructive things. For example, in some parts of the US the common people get sloshed and drive drunk frequently. Or they eat so much that they balloon up to 400 pounds. i am most disgusted by the ones that weigh huge ammts get drunk and then ride a motorcycle without a helmet

Look, if you want the high iq elite to feel a sense of connection and loyalty to the common man, the common man has to hold up their end of the bargain.

Just to give an example, Steve you said that one of the best things we in the high iq category can do to help our low iq bretheren is to institute universal health care

how the heck do you expect a high iq taxpayer to feel about paying for healthcare of people that are constantly in the hospital due to their own self destructive behavior like riding motorcycle without a helmet, driving drunk, participating in dangerous stupid sports and etc

This phenom is even further developed in the UK where the mass of common people spend their time getting drunk in "vertical drinking establishments" and beating each other up. The productive members of society pay to clean up the mess created by the common folks. How do you expect the elites to have any loyalty or sense of connection to the pathetic and self destructive common average iq folks

(see any of the recent writing by theodore dalrymple)

Anonymous said...

Shiller's absolutely right about the emergence of this class. Harvard and other elite institutions are not representative of the masses.

Whites are 48% of Harvard's 6649 undergrads

http://college.sparknotes.com/school/index.epl?inun_id=6573

Of these, 1700 are Jewish:

http://www.hillel.org/HillelApps/JLOC/Campus.aspx?AgencyId=17431

1700/(.48 * 6649) = 53% of whites at Harvard are Jewish.

So only 47% of whites at Harvard are gentiles, which is 22.6% of the total population.

This means white gentiles are underrepresented by 2-3X on campus. Similar numbers obtain for other elite campuses. By comparison, blacks are 8% and their population numbers are 13%. So blacks are actually less underrepresented than white gentiles at Harvard.

Moreover, demography is destiny. This is why the elite institutions are so hostile to Middle America -- because they are not drawn from Middle America.

anony-mouse said...

Steve's blog is read (apparently) internationally. He has written articles for United Press International. He runs a discussion group for public intellectuals.

So is he a local or a cosmopolitan?

And why doesn't anyone make a drink called the 'local'?

David Davenport said...

How do you expect the elites to have any loyalty or sense of connection to the pathetic and self destructive common average iq folks

Why should the peasants have any fondness or loyalty to you, Mr. Soi-disant BigBrain?

participating in dangerous stupid sports and etc ...

I.e., things that frighten you and at which you are incompetent.

Anonymous said...

David,

i am sorry but i fail to see your point.

Steve makes it clear that those of us born with a high IQ who go on to make lots of money are not really morally superior to the masses - our high iq just makes it easier for us.

So reading Steve gives us a desire to help the masses - the large group of people with average IQ's

Steve has pointed out that we should voluntarily pay higher taxes in order to pay for universal health care. If this is not clear to you, just look at his article on what the high iq people should to to help their brothers with lower iq.

I simply raise the issue -- if I drive around the usa and see that people with average IQ's are getting really really fat, getting really drunk, smoking and riding a motorcycle while drunk and smoking, how can i be motivated to want to pay for the health care of these folks of average iq?

i mean, people of average iq seem to be doing reckless things - things that land them in the hospital.

Steve encourages those of us with high iq's to feel a kinship with those with average iq's but how can we when those with average iq's seem to bring health problems on to themselves ?

Anonymous said...

This phenom is not limited to the USA by any means

note the following quote from a blog about the uk

Like many towns where a major public school is located, Shrewsbury has its fair share of filthy chavs for its ranks of decent young chaps to abuse/fight with etc. From the great plateau on which the school is located, it is possible to view the entire town in all its chavesque splendour. The first chav point of call is just underneath the plateau on the banks of the winding river severn (a popular place for small chavlings to throw bricks, breeze blocks and broken stolen goods at swans and the occasional unfortunate rower), and it is called the Quarry. The Quarry is a large park of great beauty, the sort of place you'd like to take your girlfriend for a stroll/picnic/sex. Or at least it would be if it wasn't populated by the sort of people that make you vomit a small amount of bile into your mouth. The quarry is home to filth from all walks of chavdom, from the 45 degree-angled cap-wearing 14-24 year old males to your standard young chavettes with tightly slicked back hair who are still touting for a quick shag despite being pregnant to an unknown father with little "terry-ann", a future chav to take the mantle of disgrace from her mother when she dies of obesity aged 33

Anonymous said...

Note that in the Sep 6, 2000 blog post Steve pointed out the following
_______________
Woodhill argues, among many other interesting ideas, that the average citizen's nagging fear of losing his health insurance is the prime reason so many vote for politicians allied with the social service bureaucracies that have so damaged the morals of the poor. He says government-funded health insurance imposes none of the moral risks associated with welfare. Men quit their jobs because they can sponge off welfare mom girlfriends for food, shelter and cable TV. But no-one would tell his boss to take this job and shove it just because he knew that the government would give him a $150,000 bone marrow transplant - if, God forbid, he ever needed one.

I'll be the first to concede that the arguments over health care are extraordinarily complex. Nonetheless, we should keep in mind Woodhill's point: the "moral hazard" of national health insurance would be far less than of many other government programs.

___________________

So ok - those of us with very high iq's and incomes that come from those IQ's agree to provide health care to those americans with average IQ.

is there a corresponding obligation of those with average IQ to not do self destructive things ?

testing99 said...

Steve, thanks for the link.

This reinforces my own thinking on how the elites have banded together (see Paul Campos's hilarious account of his trip to the Aspen Institute where he openly compares the glitterati to Paris, 1789).

The interests of the elites by definition are going to be hostile to those who are not, and the elites have an interest as well to prevent anyone from joining them so they may pass on their elite status and economic benefits to their descendants.

That's a recipe for disaster, generally.

Obama is nothing but the desire of the elites to lord it over the peasants, note how Obama's Paris speech was full of calls for America's foreign policy to be not guided by America's interests, but "the worlds" and how in Berlin he identified himself as a World Citizen.

Obama in an economic crisis can't even do the middle class pander ("let's drill baby drill!") and instead wants more greenhouse gas curbs.

Well, thank god. He's dangerous, precisely because he is a clueless elite who knows nothing but Harvard and South Side Chicago.

travis said...

Wow. Looks like there's a niche for "locally-oriented cosmopolitans" to act as interfaces between globalist companies and the local entities they have to deal with when they come here to do business.

So scalawags are calling themselves "locally-oriented cosmopolitians" now.

Anonymous said...

Steve's blog is read (apparently) internationally. He has written articles for United Press International. He runs a discussion group for public intellectuals.

So is he a local or a cosmopolitan?


Local. How many prominent bloggers, or even syndicated columnists for that matter, are from Los Angeles? I have no idea, because an Angeleno would have to write about either the movie business or immigration/IQ for readers to associate him with LA, and it seems like Steve has a monopoly on the latter subject.

Anonymous said...

Should those of us with very high IQ's and earnings feel like the Americans with average IQ's are our brothers - should we feel a loyalty to them

or should we feel a loyalty to the citizens of other nations that have similar high iq's to us?

doesn't it depend on how much we have in common with the us citizens of average iq?

Anonymous said...

Several of the self-appointed high IQ Cosmopolitans in this thread clearly suffer from dyslexia or ADHD.

Shiller mainly cited a 1950s study by Merton of one small town in New Jersey. I didn't notice any correlation between "IQ" and the attitudinal differences of the "Cosmopolitans" and the local leadership elites.

One contrast provided was the difference between a medical specialist and a general practitioner. This is no argument for an overall IQ superiority for "Cosmopolitans". It better supports the idea of "Cosmopolitans" having larger average emotional and moral dysfunctions than local leadership elites with "understanding".

"I think the problem of "locals" vs cosmopolitans is overstated."

It depends on who you are. I suspect Shiller hears a distant tumult in the provinces approaching ever closer, similar to the one the Shanghailanders heard in the early 1920s.

"It is actually quite easy to become a "cosmopolitan"."

It's a lot less easy to become so rooted locally that other locals will risk death in your defense.

H. said...

Another guy who predicted the housing bubble is Peter Schiff, who offers great insights and overseas investments at www.europac.net. As for the new cosmopolitans, a rather more sensible way to go about being international can be found at www.escapeartist.com. Having visited over a dozen foreign countries and US states and realized what's going on, I find both sites invaluable.

MQ said...

Whites are 48% of Harvard's 6649 undergrads

http://college.sparknotes.com/school/index.epl?inun_id=6573


That's not true -- I think whites are still a majority at Harvard by a considerable amount. The source you give has the various ethnic percentages only adding up to a total of 83%, so there is clearly something wrong with it.

kurt said...

The issue of "locals" vs. "cosmopolitans" is a farce. Most people I know are both. I can set up sales and distribution in Asia (and Europe) for U.S. tech companies, and still buy my beer and cheese from local brewers and makers.

The labels "cosmopolitan" and "local" are completely arbitrary.

SFG said...

Naaah. I think there really is a globally rooted 'overclass' that fights for its own interests at the expense of the rest of us.

Martin said...

"Anonymous said...

where do the loyalties of the talented and productive top 1% of society rest - do they rest with the other 99% of the members of their society or do they rest only with others in the top 1%?"

I think the political system you favor would be....feudalism.

"Just to give an example, Steve you said that one of the best things we in the high iq category can do to help our low iq bretheren is to institute universal health care

how the heck do you expect a high iq taxpayer to feel about paying for healthcare of people that are constantly in the hospital due to their own self destructive behavior like riding motorcycle without a helmet, driving drunk, participating in dangerous stupid sports and etc"

And what of all those rich, high IQ masters-of-the-universe who lead clean, healthy lives? So rich that they'll retire at 60, and so healthy that they'll live long enough to develop Alzheimers, which taken together will render them an unproductive and expensive burden on society for 30 years or more. Why should I pay for them?

And you got something wrong there, John Galt. The truly dangerous pastimes are the province of the rich and upwardly mobile - flying, kayaking, mountaineering, spelunking, scuba-diving, etc.

I'll tell you why I'm concerned about the well-being of my fellow citizen, even though he may only be a plumber or super-market clerk. Because he's my neighbor, and I have to live somewhere. Because I would rather live with a good neighbor on the other side of a 4' picket fence, than with a bad neighbor on the other side of an 8' concrete wall topped with broken glass and concertina wire. Because I would rather he can provide a decent life for himself and a decent upbringing for his kids, so that they don't grow up to become feral predators who might rob me, beat me, or kill me when I become old and frail.

Reg C├Žsar said...

Anony-mouse said,
And why doesn't anyone make a drink called the 'local'?

They do. But we prefer to call it "the usual".

Black Sea said...

"How do you expect the elites to have any loyalty or sense of connection to the pathetic and self destructive common average iq folks [sic]"

I'd been wondering whatever became of Niles Crane after the cancellation of "Frasier." I see now that he's suffered a brain injury and is commenting on Steve Sailer's blog.

Actually, I think there is a semi-valid point buried in there among all the "top 1%" bullshit, but given the way the guy (anonymous) puts it, I feel a sudden urge to kill a six pack, rev up the Harley, and head out (helmetless, natch) in search of a bucket of fried chicken, a bottle of Jack Daniels, and a carton of Marlboros.

Fortunately for me, I don't actually have a Harley.

ben tillman said...

Steve, i think that to some extent the loyalty of the top 1% is influenced by the behavior of the other 99%.

When we in the 1%....

how the heck do you expect a high iq taxpayer to feel about paying for healthcare of people that are constantly in the hospital due to their own self destructive behavior like riding motorcycle without a helmet, driving drunk, participating in dangerous stupid sports and etc


Top 1%?????

Reading your mangled English, I would guess your IQ is right at 100. Hyphens -- learn to use 'em. "Who" (not "that"). "Because of" (not "due to"). "And" or "et", not both.

Or perhaps you're not a native American, and that's why you feel no kinship to Americans.

In any event, everyone owes duties to the members of his community, and one of these duties is the duty to oppose the centralization of wealth and power. It is in fact your duty to oppose universal healthcare schemes not because they will hurt you personally but because it will hurt the community in general.

Roger Chaillet said...

You also forgot Dr. Gary Shilling, a Forbes magazine columnist. He called the housing bust some time ago. http://www.agaryshilling.com/front.html

As for those of average IQs doing amazingly destructive things, George Bush, with an above average IQ, was blotto most of his adult life.

And Dick Cheney?

He attended Yale but flunked out. He was smart enough to get into the doctoral program at UW Madison. And he got convicted for a DWI. http://en.wikipedia.org/wiki/Dick_Cheney Rumor has it that he was drunk when he shot his hunting pal on the Armstrong Ranch in South Texas. http://www.capitolhillblue.com/artman/publish/article_8140.shtml

Those on the right side of the Bell Curve shouldn't be so snotty.

Anonymous said...

Uh - Ben - i hate to break the news to you but Steve Sailer approvingly published quotes that were in favor of universal government paid health care.

Steve also published data that shows that on average people with higher IQ tend to do fewer stupid self destructive things than people with lower iq.

so if you take a random sample of people with an iq over 140 and a random sample of people with iq of 100, a greater percentage of the people with iq of 100 are fat, are driving a motorcycle recklessly, are driving drunk, are letting their 5 year old drive the ATV in to a tree, and etc.

The fact is that folks with an iq over 140 take better care of themselves and earn higher incomes and pay much more in taxes than people with iq of 100.

So many of the posters on this site are requesting that those with 140 iqs in america show some solidarity with their brothers who have an iq of 100 in america - ok - but if the brother with an iq of 100 is doing stupid and self destructive things like driving their motorcycle drunk and getting fat, perhaps they bring some of their own problems on themselves.

Again, do american citizens with an iq of 140 have more in common with other people around the world at that IQ level or do they have more in common with the american citizens of iq 100?

how does citizenism work if the brightest and wealthiest just don't respect the decisions that many of the folks with average iq's have made

Randall Parker said...

anonymouses,

You can click on Name/URL and then type on some pseudonym that would allow the rest of us to tell you all apart. Your anonymity will still be protected.

Randall Parker said...

We are better off if we live in a community where people feel obligations and bonds to their neighbors. We are safer in such communities. Governments will be less corrupt if people want to pay attention and hold them accountable. We will be better off if people will report crimes when they see them and be willing to testify in court as witnesses. We will be better off if people help other people who break down along the side of the road or who grab a dog running loose and call the owner's number on the dog tag. All these things and more come from people who think local.

Elites who would undermine our communities in order to boost their short term profits are not our friends.

Anonymous said...

Related

"The underlying social change that led to the Obama victory is the unprecedented extent to which the narrative of popular consumer culture, and the media that drives it, has become the dominant influence on how Americans think, formulate their ideas and understand the world around them.

The most important result of this process has been the steady and consistent depoliticization of American society, to an extent that we can make the case that we are living at the dawn of the post political age."

"In the post political world the candidates who can best thrive in it have tremendous appeal to the economic elites; these candidates thrive in a system that does not dwell on issues and will never ask the question, "who has power and why", but simultaneously creates a social and media environment of stupefying distractions while destroying traditional social mores (under-credited as a source of much social solidarity). This can only benefit their continued rule of that society.

In such a setting our political choices like our consumer choices, regardless of the product, are primarily about what makes us more fulfilled and feel better about ourselves.
"

David Davenport said...

how does citizenism work if the brightest and wealthiest just don't respect the decisions that many of the folks with average iq's have made

Your thinking seems to be based on some Libertarian notion that the proles must be left to do as they wilt.

Earlier America had a different and better attitude, which was that the lesser members of the congregation needed guidance and discipline.

...

"... The most important result of this process has been the steady and consistent depoliticization of American society, to an extent that we can make the case that we are living at the dawn of the post political age. .."



That is 110 percent horsh**T.

jmr said...

I wonder if this phenomenon is really anything new. My impression is that people who are rich and powerful have always been primarily concerned with preserving their own wealth and power, usually at the expense of everyone else. Was it ever any different?

David Davenport said...

Was it ever any different?

Nazi Germany scared Jewish plutocrats, and the former USSR was off-putting to many gentiles with money.

... One reason why the American upper crust used to be more patriotic and nationalistic.

Rich Muslims, on the other hand, don't threaten American socio-economic stratification.