The Free Thinker

What Would a Universal Altruist Look Like?

Someone expressed amusement with my economistic definition of love as a mathematical function.  Let me expand on it, for it's an interesting idea.

Suppose there are n persons in the world.  Define C1, C2, ..., Cn as the consumption, or if you prefer, condition (+ = good, - = bad) of persons 1 through n.  Utility is a function of consumption/condition: U1=U(C1), U2=U(C2), etc.  (A small deviation from standard utility theory must be noted: persons have the same U function, implying that utility is interpersonally comparable.  This is a strong assumption and not well-grounded.)

Let each person i possess an objective or "value" function Vi(U1,U2,...Un)=a1U1+a2U2+...+anUn.  The "1" and "2" in this expression are meant to be subscripts (the blog font doesn't have that feature) and there should really be another subscript i; the coefficients indicate altruism, and the subscripts indicate who feels altruism towards whom. 

Now let us imagine the ramifications of different values of the altruism coefficients.  First, imagine a person for whom all the coefficients are zero.  This person is absolutely indifferent to the welfare of any other human being in itself.  Though that sounds bad, it is not obvious that this person would be a moral monster in any ordinary sense.  He might do favors for friends and family members, calculating that the odds of the favor being returned would make the short-run sacrifice a worthwhile risk.  He might be honest and obey the law, to avoid getting caught in a lie or a crime.  He might, if he is an explorer in darkest Africa, kill the natives at will like Henry Morton Stanley, but also, he might not.  There's no accounting for tastes.  Possibly he would see benefits in being thought to care for others, and if he is a good enough mimic of altruism, who is to know?  He might also be a serial killer if he finds the pastime sufficiently amusing to compensate for the risks involved.

A normal person probably feels genuine altruism towards a few people.  Normalizing self-love to 1 (only the relative values of the coefficients matter so this is just a mathematical convenience), a person might have a1=0.5, a2=0.5, a3=0.2, a4=0.1, a5=0.1, a6=0.01, a7=0.01, a8=a9=...=an=0, where persons 1 and 2 are family members of i, persons 3, 4, and 5 are friends, persons 6 and 7 acquaintances, and everyone else is a stranger.  In addition to altruism, a person might have moral side-constraints.  A person might feel constrained by prohibitions against murder and cruelty, even towards people who mean nothing to him.

But here's where the question gets interesting.  Using the functional form described above, we can define a universal altruist as someone for whom a1=a2=...=an.  That is, a universal altruist values the welfare of every single person exactly equally with his own.  At any given time, he does whatever will benefit someone the most, regardless of whom.  If he can save a stranger's life with 50% probability by risking his own by 40% he will do it.  If he has a piece of food he will give it to the hungriest person in the room, and will eat it only if that person happens to be him.  (These are crude illustrations: actually, he would compare the expected future value of lives, the prospects of others' liking his lunch, and other factors.  But you get the point.)

If we understand what a universal altruist is, three questions follow.  First, how would the universal altruist, if we start him out as, say, a typical bourgeois suburbanite in modern America, behave?  Second, how far do "ordinary" people differ (if at all!) from the universal altruist?  Third, is universal altruism satisfactory as an ethical ideal, or is it part of an ethical ideal but not enough, or is it an ethical error?

One reason universal altruism might seem to be an ethical error is that favoritism towards those physically or biologically close to oneself might seem like a good thing which universal altruism excludes.  But I think it does not.  I know that millions in Ethiopia are far worse off than any of my friends, family, and neighbors, but I don't know how to help them, whereas opportunities to help my friends, family, and neighbors sometimes do come along.  Also, even in a world of universal altruists a certain division of labor might be called for, which would justify telling, say, person 1 to worry about persons 2, 3, and 4, and never mind about person 157.  Person 1 might value person 157's well-being equally with his own and everyone else's, but, knowing nothing nothing of person 157's needs, he makes no effort to act on that altruism.  I think it's plausible that universal altruism could be consistent with a certain degree of preferential treatment for one's friends and family.  At the same time, it would put a sensible limit on it.  A rich man who spoils his children in an economic environment of prevailing poverty and squalor would definitely be in the wrong by this standard.

I guess I think universal altruism isn't enough, because one needs many other virtues in order actually to be of any use to one's fellow man, or to experience joy for oneself.  But it's a good place to start.

What is Courage?

The virtue of love can be represented in a utility function by the inclusion of the "primary" utility of several individuals into a "secondary" utility function which represents what the loving individual seeks to maximize.  If X loves Y, A maximizes V = U(CX) + aU(CY), where CX=consumption by X, CY=consumption by Y (consumption can be as broadly defined as necessary); "a" represents the degree of love.  It's a bit makeshift but captures a substantial part of the reality in a crisp, logical way.

Some virtues, such as honesty, can be represented as alphabetic preferences for some rule-consistent behavior.  An honest man (by this account) prefers all states of the world in which he tells the truth to any state of the world in which he tells a lie.

Can the virtue of courage, in similar fashion, be represented as risk-loving utility?  Risk-loving/risk-averse preferences can be represented in the functional form of utility.  If my utility function is U(x)=x, where x is consumption (broadly defined), I am not risk-averse; if my utility function is U(x)=log(x), I am quite risk-averse.  If my utility function is U(x)=x^2, I am highly risk-loving.  Is the brave man simply tolerant of a high degree of danger for the sake of what he desires?  For the sake of concreteness, which if either of the following two men is brave:

(a)    A man who is willing to run an extremely dangerous obstacle course, where he has a near-certainty of getting killed, in return for $1 billion if he succeeds. 

(b)    A man who jumps on a grenade to save his comrades, certain that his own death will result.

If both (a) and (b) are brave, what do they have in common?  While (a) has a risk-loving utility function, we know nothing about (b)'s risk-aversion, since he does not (by assumption) face uncertainty.  Some instances of what we intuitively call courage have to do with attitudes to risk, but others do not.

The guess I wanted to hazard when I started this post is that courage is the ability to act in the face of radical uncertainty.  This is distinct from the concept of risk, which suggests that the range of possible outcomes and the probability distribution of various outcomes is roughly known.  But the world consists of both the known and the unknown.  Courage is the willingness to push into the unknown; its opposite is to let one's world be restricted to the known.  Willingness to risk death is the paradigm case of courage because death is the ultimate unknown country.  Courage is a virtue because in braving the unknown we discover new goods and expand our spirits.

Who Lost Russia?

"Slippery Slope to Autocracy" (Moscow Times):

Authoritarianism is like a rock. Once it is dropped, it can only go in one direction -- down. Russia's path toward democracy was paved during former President Boris Yeltsin's presidency, but it has been steadily destroyed since Vladimir Putin became president in 2000.

Over the past eight years, the state has been gradually taking away the constitutional rights of Russians. First, the state crushed freedom of speech on television. Then, it deprived citizens of their elected representatives in the Federation Council. Next, it installed seven federal presidential envoys around the country to control governors because at that time they were still elected by the people. But in September 2004, after the Beslan terrorist attack, Putin used the tragedy as a pretext to cancel the elections of governors. From that point on, the notion of Russian federalism became fiction.

In 2007, the Kremlin then turned its sights on the parliament. Using the "fight against terrorism" as its justification, the state deprived voters of the right to elect individual deputies to the State Duma in single-seat electoral districts, replacing them with proportional representation for all Duma seats.

In addition, the Kremlin created United Russia, its own pocket political party. United Russia has established a monopoly over the country's political and legislative machine, creating a modern-day version of the Soviet Communist Party in Moscow and in the regions.

The Constitution also became a target for attack...

[The Kremlin] also thrust its way into Russians' minds, forcing a pro-Kremlin and anti-Western ideology on them. This was necessary because the authoritarianism and the dismantling of the Constitution required a compelling ideological foundation. This was most vividly articulated during Putin's speech immediately after the Beslan siege ended, when he referred to "enemies" who have encircled Russia and who are craving to seize parts of its territory and rich resources.

One of the first attacks in this new ideological campaign was the revision of teaching manuals to correct passages in textbooks that had tarnished the country's "glorious past." Schoolchildren were told that Soviet leader Josef Stalin was an "effective manager" whose mass murders, forced hunger and state terror were "justified."

Medvedev's latest move, on May 19, was the creation of a presidential commission "for counteracting attempts to falsify history to the detriment of Russia's interests." This opens the door to deprive Russians the freedom to know the truth about their own history. Now, state bureaucrats will decide which interpretation of history should be considered "falsified" and which is "true."

Playing with history is frightfully familiar. Under Stalin, the regime's mistakes and crimes were whitewashed or completely expunged from the public record...

Now, it seems that the Kremlin is determined to distort global affairs and rewrite history to fit the Kremlin's paranoid worldview. It will be filled with enemies and Russophobes, plots and secret operations against Russia requiring that the new dictator mobilize all of his forces in the fight against internal and external enemies.

To turn Russia from the deadly wrong trajectory it has embarked on under Putin, it is essential that the cost of Russian aggression against Georgia be made far higher than it has been so far.  This is for Russia's own benefit as well as the world's, since their post-imperial complexes have nothing to do with the well-being of the Russian people.

The Deficit

Irwin Stelzer notes that Obama has turned his back on his protectionist stance from the campaign trail:

Nothing the President will do on the trade issue, either to free up the international flow of goods and services, or to tip the scales in favor of American firms, will in the end matter as much as his reckless fiscal policy. His budgets project deficits totaling close to $10 trillion by 2019 -- and that assumes that his health care plan will cost only the $635 billion "down-payment" he has put into his budget, rather than the $1.2 trillion experts are predicting. And that he will succeed in a close-to-freeze on defense spending.

That means the U.S. Treasury will be peddling billions of IOUs to investors such as China which already have trillions of that paper in their vaults and whose "appetite for American debt may be shrinking", according to The Economist. So far, so good: the recession-induced flight from risk has led overseas investors to seek a haven in dollar assets. But as the printing presses keep running overtime, and the recession eases, investors will find the mounting risk of being paid in dollars that have shriveled in value too much to bear.

Which is why the dollar hit its lowest level of the year this week, and why for a while it cost less to buy insurance against a default by hamburger-seller MacDonald's than against a default by the world's only superpower. More important, it is why China and Brazil are trying to cobble a trade deal that will allow them to bypass the dollar completely, and pay in their own currencies. This might well be the first step in China's announced intention to develop a currency to compete with the dollar as the world's reserve currency. If it pursues that goal it might bring to reality the prediction of professors Menzie Chinn and Jeffrey Frankel, of the University of Wisconsin and Harvard University, respectively.

"We find that the euro could overtake the dollar as early as 2015 . When combined with other political developments, it might even spell the end of economic and political hegemony . If the euro were to overtake the dollar in a few decades, it would be a once-in-a-century event. But it happened to the pound in the last century, so who is to say it could not happen to the dollar in this?"

Would it be a bad thing if the dollar hegemony collapsed?  Probably, because it tends to create a lot of financial chaos and impede trade.  How would it affect the US economy if a loss of trust in the federal dollar led to a flight to a private currency, say, Visabucks?  It would probably increase transactions costs and hurt the economy.  A decline of the dollar could do the same thing to the global economy.

On the other hand, I'm starting to think that it's a curse that the US can borrow in its own currency, which just encourages more and more profligate spending.  A compulsive shopaholic might have reason to rejoice if his credit card is cancelled.

UPDATE: Paul Krugman writes:

Last week Bill Gross of Pimco, the giant bond fund, warned that the U.S. government may lose its AAA debt rating in a few years, thanks to the trillions it’s spending to rescue the economy and the banks. Is that a real possibility?

Well, in a rational world Mr. Gross’s warning would make no sense. America’s projected deficits may sound large, yet it would take only a modest tax increase to cover the expected rise in interest payments — and right now American taxes are well below those in most other wealthy countries. The fiscal consequences of the current crisis, in other words, should be manageable.

Those "other wealthy countries" are Western Europe and Japan, which, however, are mostly a good deal (20-30%) poorer than the US, in substantial part because of higher taxes and more anti-competitive regulations, and which free-ride on some global public goods, such as defense and medical innovation, provided by America.  So American voters tend sensibly not to elect politicians who want to hike taxes to European levels.  Barack Obama ran, please note, on tax cuts; indeed, it seems likely that the modal voter knew nothing about Obama's platform except tax cuts, since he said little of substance in his famously eloquent (though the term "vapid" is more apt) speeches, which voters had little incentive to read since they probably suspected, as events have since shown, that the content of the website was mostly either insincere or naive, and was a poor predictor of the policies that would be passed under the new administration.  Obama not only ran on tax cuts, he accused McCain of planning to raise taxes.

Were Obama to raise taxes "modestly" to Western European levels, this would be a diametric reversal of his one salient campaign promise.  The alternative is to cut spending, but since the majority of voters rejected McCain that policy also seems to lack a democratic mandate.  Shamefully enough, I think it would be an undeserved compliment to the voters of 2008 to say they voted for anything other than fiscal recklessness leading to stagflation and, unless we change our minds sometime in the next decade or so, de facto default through inflation and devaluation.

Islam and Democracy

The Boston Globe has published a short summary of my and Charles Rowley's recent Public Choice article, "Islam's democracy paradox: Muslims claim to like democracy, so why do they have so little?":

The Muslim democracy paradox

A key debate in foreign policy revolves around the idea of spreading democracy, especially in the Middle East, as exemplified by our occupation of Iraq and Afghanistan. President George W. Bush famously argued that Muslims deserved, and would accept, democracy as much as anyone else. New research somewhat challenges this proposition. The authors note a "democracy paradox" among Muslim-majority countries: actual democracy is rare, but residents generally indicate as much or more support for democracy than people in non-Muslim countries. The authors find that neither oil nor poverty explains the negative association between Islam and democracy. The authors do find that countries that have spent the most time under Islam exhibit less democracy and freedom. Moreover, despite nominal support for democracy, residents of Muslim-majority countries do not appear as committed to freedom, especially religious freedoms like unrestricted proselytizing and conversion, which may be a harbinger of the development of true democracy.

Rowley, C. & Smith, N., "Islam's Democracy Paradox: Muslims Claim to Like Democracy, So Why Do They Have So Little?" Public Choice (June 2009).

In Iraq, two empirical regularities clashed.  1. No nation liberated from totalitarianism and occupied by American troops had failed to become a democracy.  (Granted there were only two such cases, Germany and Japan.)  2. There were no democracies in the historic heartland of Islam, defined as countries that were part of the Islamic empire before 750 A.D., and are still Muslim.  (The data for the above-cited paper came from 2004, before the results of the Iraq war could be incorporated into public data sets.)  One of those patterns had to be disrupted by the Iraq war: either America would fail, for the first time, to install durable democracy in an occupied post-totalitarian country; or else, democracy would be established for the first time in Islam's historic heartland.

At the moment, it looks like pattern (1) will hold and pattern (2) will be disrupted.  The empirical democracy deficit of Islam until 2003 (slightly weakened today) underlines what a historic achievement this will be for Americans and Iraqis, if it does not prove transient.

Form and Freedom: A Paradox

G. K. Chesterton, somewhere in Orthodoxy, argues that it is easier to fall than to stand, because "there is an infinity of angles at which one falls; only one, at which one stands."  The remark seems to me to contain a profound point.  There is a sense in which the person who stands is less free than the one who lets himself fall.  He who stands must not lean too far forward or back, left or right, and if he leans at all he must compensate for it somehow, repositioning his weight or shifting a limb in the opposite direction to that of his leaning torso.  His movements are confined within quite precise and narrow limits.  But of coure, the one who stands can walk about, or even run, in short can cover distances; the one who does not just lies on the ground, or, at best, rolls.  The one who stands is not free to choose the angle of his body to the ground, but, as a consequence of his relinquishing that freedom, the area of ground to which he has the option of being perpendicular in a given time is far larger.

Form, in general, is in a sense opposed to freedom.  If an agglomeration of points is not constrained to be on a line, every point may be located anywhere in three-dimensional space that it likes; but if the points are to comprise a line, once two are placed the rest are infinitely restricted in where they can be located.  If I want to say a mere series of words, they may be any parts of speech in any order, but if I want to say a sentence I must follow complex rules, and if I want to write a sonnet I am constrained further still-- yet the sentence communicates more meaning than the cluster of words, and the sonnet (if it's a good one) is more beautiful and memorable than the sentence.  In a lazy, chaotic office the employees may, at any given moment, have more freedom to do as they please, but the office accomplishes next to nothing.  A tightly-disciplined office may be execute dozens of quite different tasks.  Form restricts, limits, narrows possibilities from a lower perspective but from a higher perspective it expands and opens up possibilities.

The relationship between moral virtue and freedom is like that.  From the lower perspective, the form of a virtue is "Thou shalt not."  The virtues seem to limit possibilities.  The dishonest man may tell the truth or lie; the honest man can only tell the truth.  The promiscuous woman may sleep with any man she likes; the chaste woman, with one at most.  The coward may run in any direction; the brave man must stand firm and face the danger.  Yet from a higher perspective virtue actually gives rise to new and more important freedoms.  The honest man can speak the truth in a thousand different ways, and he has less trouble keeping his story straight; moreover, he will be believed.  The chaste woman can marry any man she likes and become the crown of her husband's honor, whereas the promiscuous woman can be a true wife to no one and cannot escape the mire of suspicions and jealousies and contempt.  The brave man may undertake dangerous quests; the coward knows it is in vain to do so for he will turn back at the first sign of danger.

From this I think one may glimpse the following, which I take to be a truth: That God's infinite mercy and justice and wisdom do not make Him less free, and that is why we err to think of Him as some impersonal extreme of goodness, an ethical postulate akin to the mathematical postulate of infinity; but, on the contrary, God is the freest Being of all, free, in particular, to create without limit.

Narcissist Nation

"But Enough About Me..." (William Kristol)

Barack Obama spoke at the National Archives last Thursday on the war on terror (not that he used that term). After paying tribute to the Declaration of Independence, the Constitution, and the Bill of Rights, and before turning to a defense of his policies, the President of the United States said:

I stand here today as someone whose own life was made possible by these documents. My father came to our shores in search of the promise that they offered. My mother made me rise before dawn to learn of their truth when I lived as a child in a foreign land. My own American journey was paved by generations of citizens who gave meaning to those simple words--"to form a more perfect union." I have studied the Constitution as a student; I have taught it as a teacher; I have been bound by it as a lawyer and legislator. I took an oath to preserve, protect and defend the Constitution as Commander-in-Chief, and as a citizen, I know that we must never--ever--turn our back on its enduring principles for expedience sake.

Who cares? Who cares about Barack Obama's father, his mother, or his "own American journey"? Is his journey so noteworthy that it needs to be intruded into a presidential speech on weighty matters of constitutional law and public policy, of civil liberties and national security? After all, tens of millions of other Americans have ancestors who came to these shores in search of the promise of a better life.

And so what? Are those Americans who didn't live abroad as youths any less attached to the principles of the Declaration? Didn't the rest of us study the Constitution as well? Haven't millions of other Americans also been bound by it as lawyers and legislators--to say nothing of tens of millions who have sworn oaths to it when serving in the military and other public and civic roles?

And isn't the point of the Declaration and the Constitution--and of the various oaths we swear, the pledges of allegiance we make--that our individual backgrounds should recede as we assume the duties of public office or when we exercise our rights as citizens? Perhaps not in the eyes of Barack Obama. Even by the standard of political types, he seems strikingly self-preoccupied and self-referential.

Doesn't Obama's self-regard sometimes seem greater than his regard for the position he occupies? Does he understand that the office of the presidency is bigger--much bigger--than he is? Or does Obama think of the presidency primarily as a vessel through which to exercise his political gifts and pursue his personal achievements?...

Barack Obama happens temporarily to occupy the White House. He is entitled to pride in his own achievement and confidence in his own abilities. But it would be good if he showed that he understood that he is now president of the United States first, and Barack Obama, admirer of his own journey, second.

Hey man, we voted against the "cause greater than self" guy.  Bush was always trying to get us to serve a cause greater than self, and where did it get us?  I mean, we liberated tens of millions from totalitarian tyranny, but what was in it for us?  It's #1's turn now.

I listened on NPR the other day to some military guy who'd just returned from Afghanistan.  The report was partly encouraging, partly not.  He said the troops have high morale and are re-enlisting at high rates.  But he also said they're spread very thin along a 1,000-mile, very mountainous region that straddles Afghanistan and Pakistan.  To locals this is not a border; they cross it at will.  He thought it would take not less than four or five years (if I remember his words rightly) to win there, and that we needed still more troops (in addition to Obama's surge of 20,000) to succeed.  It all sounded like a glorious adventure, a brave modern knight-errantry, and I could easily understand why our boys are so eager to re-enlist.  Bravo!

But that doesn't mean the fight is actually worth it.  The budgetary cost of the war is a big deal right now, at a time when it's getting hard to sell US Treasury bonds.  There is a sense in which every dollar we spend on the war increases bin Laden's return on his 9/11 investment: he can't beat us, but he can waste our strength by drawing us into quagmires.  I'm not saying he necessarily thinks of it that way, though it wouldn't surprise me in the least if he thinks of it exactly that way.  But worse than the budgetary cost is that having the US military tied up there reduces our global credible threat.  If it looks like we're not in a position to respond to aggression, other countries may follow Putin's example and start snacking on their neighbors.

The military guy on the radio thought Afghanistan will be a test of our national will, and emphasized that the guys we're fighting there killed 3,000 Americans on 9/11.  He's making it a debt of honor to win.  But our real debt of honor is to Georgia, which fought at our side and then ended up at the losing end of the first act of naked aggression on the territory of Europe since the deaths of Hitler and Stalin.  We can't fight the Russians because they have nukes, but we ought to be exploring new forms of "smart soft power," or nonviolent hard power.  Maybe we should be building a cyber-war capacity so that we can deliver deadly viruses to Russia's IT systems.  Maybe we should be tracking the movements of Russians as best we can and excluding from US territory permanently (and that of any allies we can persuade to join us) all Russians who set foot in South Ossetia and Abkhazia, as accomplices in aggression.  Certainly we should exclude Russia from the WTO for as long as their occupation of Georgia persists, that is, indefinitely.  Certainly we should boycott the 2014 Olympics.  Certainly we should be doing everything we can diplomatically to split the CIS.  Maybe we should be drawing closer to China.  And it might be worthwhile to push for peace between Azerbaijan and Armenia (though that is difficult) to cement the Caucasus against Russian incursions.  We need to make it clear to the world that aggression does not pay.  Right now we're teaching the world the opposite lesson.

Our foreign policy principles have gone all haywire.  We're selling out the principle that really matters while wasting our strength on a vendetta.  That the borders of sovereign democracies are sacred is the sine qua non of the kind of law-based international order in which the United States and its values can prosper.  By contrast, it is OK if our upper limit on the acceptable costs incurred hunting down some terrorist who got lucky is something less than infinite.

Good Job, God, Keep Up the Good Work!

As I was rapturously admiring the beautiful day here in northern Virginia, with birds singing and bright sunshine and green grass and leafy multitudes of foliage towering majestically all around, I thought to myself: Good job, God, keep up the good work!  Is it impious to put thanks to and praise of the Almighty in so sporty a fashion, in words a baseball coach may say to his team in a huddle?  Perhaps the expression is of some use if it summarizes a little of the meaning that is better expressed in the prayers of great saints like St. John Chysostom, St. Macarius and St. Basil, for the weak-minded, such as myself, to whom their far loftier and more beautiful words can seem, when the mind is too lazy to rise to meet them, opaque.

This is an interesting hypothesis ("Why Productivity Boost is Needed to End the Recession")...

What's it going to take to get the economy out of its rut? Tax cuts, says the right. Public investments, says the left. Some of both, says the center. But after listening to a recent discussion about the recent and distant history of innovation and growth between White House economic adviser Lawrence Summers, former Fed chief Alan Greenspan, and Harold Evans, author of They Made America: From the Steam Engine to the Search Engine, I began to think that tax cuts and stimulus spending may be secondary. If history is any guide, in order to get the economy back to the level of growth that we'd all like to see, we're going to need a substantial boost in productivity. And prolonged periods of high growth have always been spurred by a game-changing megatrend that ultimately touched every segment of the economy: the steam engine, electricity, railroads, the availability of credit, the microchip, and most recently, the Internet, globalization, and cheap money. Finally, when you're dealing with an economy the size of the United States, you need a pretty powerful lever to create meaningful growth. Having a boom in a few sectors likely won't be enough.

So it looks like we're in trouble. Right now, it's difficult to sense the Next Big Thing. (Of course, that's usually how it goes. Back in 1992, when the economy seemed mired in the mud, President-elect Clinton summoned the nation's best economic minds to a summit in Little Rock, Ark. In the voluminous briefing papers prepared for the event, the words the Internet likely appeared rarely, if at all.)

... but how can it be right?  How can something new be needed to get us back to the full unemployment we had just a couple of years ago?  One explanation is that we may have been "living off our capital," failing to do the business investment needed to keep our economy at the level we were at, incurring too many debts to foreigners, while doing things we thought were investment-- building homes, getting educations-- but that were really a waste.  But it's hard to quite believe that.

I have my idea for what the Next Big Thing will, or at least could, be: giant cargo airships.  Of course most people who think they know the Next Big Thing are wrong, but I could make the case for it.  I won't do so as well as I could in this space, for lack of time and also because of some lingering proprietariness associated with the work I did on this in the summer of 2007.  But the idea is that giant cargo airships could, among many other functions, carry people and goods long distances, and particularly over oceans, a lot more cheaply than airplanes, and a lot faster than ships.  A "roadless revolution" in transportation could accelerate the international division of labor, while reducing pressure on energy supplies, since airships are fuel-efficient because they use fuel only for propulsion and not for lift.  They could open up a new, cheaper "Greyhound of the Skies" alternative in international travel, too.

To do all this would require mobilizing huge amounts of capital.  Which, in a way, makes it even more timely, considering trends like this:

A Time magazine cover this spring featured a glass jar partially filled with coins labeled "The New Frugality."

Months earlier, BusinessWeek featured a red cover cinched by a black belt. It declared the recession had pushed us into "The New Frugality" age.

A new survey by the Pew Research Center's project on social and demographic trends found that 60 percent of all younger and middle-aged adults say they are doing more shopping at discount stores or avoiding more expensive brands.

Pew said nearly a quarter of younger adults say they plan to plant a "recession garden" to trim their food bills.

Another Pew study released in April found that from the kitchen to the laundry room to home entertainment, consumers are paring down the list of things they can't live without. I loved the title of that report: "Luxury or Necessity? The Public Makes a U-Turn."

Is this dawning age of frugality here to stay?

I'm not so sure. Frugality isn't like your basic black dress that is always in vogue. Frugality is a foul-weather trend quickly replaced by rampant consumerism the moment the economy begins to pick up.

I'll be counting the number of months it will take before people forget this recession and return to their wasteful ways.

I doubt that.  I think people have gotten a deep scare about their economic security, which will alter behavior for a generation.  People thought they could count on the US economy to buoy them up.  Now they want much bigger cushions of what economists call "precautionary saving."  Policymakers, still caught in the errors of Keynes, think saving is the enemy:

Betting on a quick global recovery? Think again. Yes, the Federal Reserve saw recent signs of organic economic growth in the U.S. economy—"tentative signs of improvement," as the Washington Post phrases it this morning—in deciding last month to hold off on dramatic interventionist measures. But the global picture looks much more bleak. As the Wall Street Journal reports, Germany, Japan, and Mexico—three of America's largest trading partners—have reported "steep declines" in economic output in recent days with Mexico reporting yesterday a staggering 21.5 percent first quarter GDP drop. You can add Singapore to that list, too; it reports this morning a whopping 15 percent plunge in GDP in Q1, the Associated Press says. These are some of the worst economic performances in generations. For Japan, a country that's experienced very little growth in the past decade, you have to go back to 1955 to match such a poor performance.

Simply put, America's main trading partners are tanking because Americans are cutting back on purchases of autos, software, and other goods made abroad. "For the first three months of 2009, U.S. merchandise imports declined about 30% to $352.5 billion compared with the same period a year earlier," the WSJ reports. And the boomerang effect will hurt here, too. "The decline in output overseas reduces the market for U.S. exports and opportunities for investment," the newspaper adds. Even the same Fed officials who were making hopeful remarks about "stabilization" at home have reason to think we're a long way from recovery, speaking of the global financial system as being still "vulnerable to further shocks," Bloomberg reports.

But savings need not slow the economy if they are converted into investment.  Investment looks for a payoff in the future, short-run or long-run depending on the nature of the investment.  Short-run investment is unlikely to revive amidst so much volatility.  This would be a good-time for long-run investment, but for political risk.  Suppose you pitch the idea of building giant cargo airships to a multi-billionaire investor right now.  I suspect he'll be thinking, But how do I know all my profits won't just get confiscated, with the US government prospectively so desperate for revenues?