Don't Solve For The Equilibrium

One of the classic catch phrases of both economics and physics is "solve for the equilibrium". It is easier, mathematically and simpler, in  principle, to solve a problem with formulas in which everything has to balance out, than it is to solve a problem and predict a result where everything is out of equilibrium.

But, in the 21st century, we are in a context in which most questions worth asking in the social sciences involves circumstances that are further from an equilibrium state than at almost any other time in human history.

Technology, the fundamentals and system self-interactions that drive economics, the climate, the ecological balance of nature, parenting, dating, marriage, gender, racial identities, the way the political system works, military realities, and more are in intense flux.

Only a handful of political regimes anywhere in the world are more than five generations old. The first powered fixed wing aircraft flew four generations ago in 1903, commercial aircraft entered wide use about a generation later, and two generations later a man had walked on the Moon. Internal combustion engine vehicles fueled with refined petroleum became predominant by 1908 and will probably be a minority of vehicles on the road by 130 years later - the vast majority of non-transportation uses of petroleum have already largely been phased out (except heavy heating oil in a few regions, electricity generation in Hawaii and Alaska, lubricants, plastics, and fertilizers). General Relativity and quantum mechanics are less than four generations old, and when they were invented, Armies still had horse cavalry. Most of the national boundaries in the Middle East were drawn shortly after World War II. 

Jews started to return to Israel in the 1920s, after by tradition, about 1850 years in the diaspora, and the State of Israel came into being in 1948. Hebrew was an exclusively a liturgical language and a language used by religious scholars from about 200 CE to 1880 CE, was spoken by a community of about 34,000 people during World War I, and did not start to become a widespread living first language until the 1920s in the British Mandate in Palestine and first became a national language in 1948, about two generations after it started to be revived, when Israel became an independent state (at which point about 80% of Jews spoke it as a first language, and 15% spoke it as a second language).

The home that I live in was built less than a hundred years ago, in 1925 with coal fired steam heat boiler made popular by then recent global Spanish flu pandemic, had a door in the kitchen wall to receive ice deliveries, had a garage sized for a Model T, had galvanized steel pipes, didn't have electricity until it was added in later renovations, and was in a neighborhood that got its start as a streetcar suburb of Denver called "South Denver" before it was annexed by the City of Denver. Coal is now used predominantly to generate electricity in large power plants, in which it has a rapidly decreasing market share, and for "coke" in the steel production process.

Soviet style communism lasted less than 75 years in Europe, where it no longer exists. Many countries in East Asia and Southeast Asia still have nominally communist political systems (none of which are yet 75 years old), but their economies have adopted so many market economy reforms that their economies aren't really communist anymore. These nominally communist regimes are still authoritarian one-party states, but collective ownership of the means of production, and distribution of the fruits of production according to need, is a Marxist pipe dream that Asian regimes that are nominally communist have largely abandoned.

Around the time that my parents were born, the Great Depression wasn't over yet, the airship industry was collapsing, most of Africa and Asia was governed by European colonial powers, the Communists were just an upstart political party in China, and the Soviet Union was alive and well. My in-laws were born during World War II and experienced the Korean War in ways that put their lives at risk. The farm my father grew up on used a horse for farm labor when he was a child. The entire nuclear dimension of military affairs came into being at a time when my parents could read about it in the newspaper, as did the political regimes in Europe, Asia, and Africa. 

When my parents started high school, Latin was a mandatory subject for every college bound high school student and public schools in the South were still segregated by race as a matter of law. All Roman Catholics in the world conducted their church services in Latin at a time when my parents had both finished their undergraduate educations. My parents were first generation college students who earned PhDs. Co-ed dorms didn't exist when my parents were in college. At the time my father served in the Army, it was just in the process of desegregating. 

Long term mortgages and employment based health insurance were first widely used in my parent's lifetimes. My father-in-law was one of the first doctors to use radiology machines more sophisticated than X-Rays and his parents were first generation Christians. 

Over the course of my parents lives, the Republican party went from being a liberal leaning Northern party to a conservative party of the South and rural America. At my father's first job as a professor in Atlanta, Georgia, many of his students had spent at least some of their school years in segregated schools, and some of their African-American friends had first been able to vote in a Presidential election just four years before they arrived in Georgia as a consequence of the Voting Rights Act of 1965. 

My father was on the committee that organized the first Earth Day. My parents were peers of Elvis Presley and disliked the Beatles and pretty much all other kinds of rock musics, well into their 30s, when rock music started to become predominant. Big band music, more than one sub-genres of jazz music, rock music, and the music of "crooners", like Frank Sinatra featured on the Lawrence Welk show on TV, all came into being during their lifetimes before I was born.

Most of the hydroelectric, geothermal, and nuclear power plants in the world were built during my parents lifetimes before I was born, or when I was a child. The vast majority of the wind, solar, tidal power and natural gas fueled power plants powering the electrical grid in the world has come online in my lifetime, and a majority of the wind, solar and tidal power powering the electrical grid in the world has been added during my children's lifetimes.

Polio afflicted tens of thousands of people a year in the United States until after my parents were finished with college; there were ten cases of polio that originated in the United States in the first decade of my life, and there has only been one case of polio from any source in the United States in the last twenty-nine years, which was this year. The concept of autoimmune diseases as a coherently class of ailments was developed after my parents had graduated from college (and after my aunt was first diagnosed with M.S. an autoimmune disease whose true cause has only been ascertained in the last few years).

When I was born, most cars ran on leaded gasoline, most physics and engineering calculations were still done with slide rules, computers took up whole rooms, the primary method of putting information into a computer was a punchcard, formulas in physics journal articles were written by hand, and many rural areas were still served by "party line" telephone service. Early computers (in my lifetime) with the power of my cell phone would have taken the same amount of electricity to operate as a skyscraper. Computer processor power and memory has increased exponentially, and has seen power consumption decrease exponentially, for my entire life. The core components of the Standard Model of Particle Physics were invented in my lifetime. "No fault" divorce, legal recognition for LGBT rights, females making up more than low single digit percentages of lawyers and doctors and professors, the modern concept of attention deficit disorder, the generalized concept of post-traumatic stress disorder, widespread use of statins to control cholesterol, widespread use of student loans for higher education, and the modern environmental movement all came into existence, for all practical purposes, in my lifetime. Obesity rates for both children and adults in the U.S. have roughly tripled from their long term historical norms to current levels during my lifetime. 

The first time I met someone who was openly gay was in college, which is also the first time that I used the Internet, and the first time I'd encountered Muslims face to face, and the first time I'd eaten tofu. The Soviet Union ceased to exist when I was in college. Crime rates hit all time highs around the time that I was in college and have since declined to half century lows. Divorce rates which were once low across the board soared to record highs during my lifetime, then experienced a class divide with divorce rates for college educated couples plummeting and divorce rates for couples without any college educations reaching levels never before seen that continue to rise checked only by couples not bothering to get married when living together and having children at all.

MTV came and went in my lifetime, as did disco, New Wave, eight track tapes, cassette tapes, videodisks, compact disks (CDs), DVDs, and analog broadcast television. Broadcast satellite TV and radio came into wide commercial use in my lifetime and I doubt that either will still be in wide commercial use when I die. Rap and Hip hop were invented in my lifetime and remain vibrant. The proportion of Americans who identify as non-religious has increased by a factor of ten in my lifetime. 

Commercial supersonic aircraft came into being and then ceased to exist in my lifetime, and will renter the market again in a few years.

"Smart bombs", guided missiles, stealth aircraft, and unmanned military drones all entered regular military use in my lifetime.  Amphibious assaults, air to air combat between fighter aircraft in "dog fights", ship to ship battles, submarine to ship battles, ship to submarine battles, and the use of nuclear weapons in war, have become vanishingly rare or non-existent in my lifetime.

The death penalty in the United States was abolished nationally, and then reinstated on a much more restricted basis, in my lifetime. Abortion was first constitutionally protected after my brother and I were born, and has now been denied constitutional protection in my lifetime. Marital rape was criminalized, and domestic violence  and acquaintance rape first began to be taken very seriously by the criminal law in my lifetime, and gay sex between consenting adults was legalized by becoming constitutionally protected in the United States in my lifetime. Serious drunk driving penalties and major reductions in tobacco use both arose in my lifetime.

At my first job as a summer law clerk with a law firm, lawyers were not allowed to use computers or typewriters, we had to dictate everything that we didn't write longhand, leaving typing for a large and almost entirely female corps of secretaries who knew how to use typewriters and early word processors (even though the youngest lawyer in the firm and the law clerks knew how to do so themselves). Legal research, including checking cases to make sure that they had not been overruled or narrowed by subsequent cases, was done almost entirely with dead tree books, because computerized legal research while it existed, was very expensive per minute or per search. At the end of each day, a recent high school graduate would rush to hand deliver all of the firm's court filings to the local court clerk before the office closed at five p.m., and to mail copies of those documents before five p.m. at the local post office that this courier had spent all afternoon photocopying to every party of record in the case and the court with an extra copy to be pinned down with metal clamps in a hard copy paper pleadings file. Lawyers needed to finish their dictations and final handwritten revisions to court documents by three or four o'clock in the afternoon, to allow time for them to be typed by the secretaries, photocopied, delivered to the court clerk, and mailed, before the hard five o'clock deadlines for doing so. All court hearings were held in person.

Now those jobs are gone. All lawyers except men in their sixties or older type their own first drafts of court documents subject to only light editing and proofreading by staff (younger lawyers do their own advanced typesetting as well, while older ones rely on secretaries or paralegals for these formatting tasks), after personally researching cases and statutes online, and then they either personally, or with one paralegal serving several lawyers, e-file the documents to the court and to all other parties in the case by midnight deadlines, often without the final draft ever being printed or manually signed or filed. The client gets an email copy and often there is no paper pleadings file in a case at all. Many non-evidentiary court hearings like status conferences and pre-trial conferences are conducted remotely, as are many mediation sessions (something that also was rare back then, but now is required in almost every case).

Back in the day, many court documents needed to be notarized, in person, with a red ink stamp with a raised embossed seal. Now, the documents that used to be notarized are just signed by the client or witness in pen under penalty of perjury, scanned, and emailed to the lawyer for filing. 

As a result, modern law firms are profoundly more top heavy than they used to be in most kinds of law practices, and lawyers no longer work "banker's hours."

Mass produced electric cars were reinvented in my children's lifetime. I have never owned a car that wasn't made by a Japanese or Korean car company since my children were born. We haven't had broadcast television service at any time in my children's lives. We ended our cable TV service before they started middle school. We discontinued our landline telephone service before my children were in high school. My wife was pregnant with my oldest child when the Euro came into being and about a dozen European national currencies ceased to exist. My children were alive when cryptocurrencies came into being and when same sex marriages were legalized. The Department of Homeland Security, the TSA, the "no fly list", security checkpoints with shoe removal, and limits on carrying liquids arose after my oldest child was born. The U.S. has been a party to low intensity "small" wars for essentially all of my children's lifetimes. The privately enforceable constitutional right to bear arms was first recognized in my children's lifetimes. Lockdown drills at school, in response to numerous mass school shootings, have replaced in my children's generation the duck and cover drills of the Cold War era.

My children don't really remember ever living without the Internet or cell phones. Some of my children's high school textbooks were delivered on electronic tablets and they had homework assignments in high school that included typing mathematical formulas using LaTex computer typesetting. COVID, of course, arose during my children's lifetime. We are still a couple of years away from the U.S. getting its first truly high speed rail line, long after they have become common in Europe and China.

This recitation of historical events reminiscent of Billy Joel's song, "We Didn't Start The Fire" and a few subsequent imitations of its structure, may be a bit excessive and familiar. But, in this post, my real point is that everyone alive today, and our parents, and our grandparents, and even a generation or two beyond them, have never known a time when science, technology, economics, international affairs, culture, and law weren't in periods of breakneck change. 

Austrian-born economist Joseph Schumpeter, who is most famous for his Marxist inspired characterization of dynamic capitalist economies in the long run as a process of "creative destruction", particularly in his 1942 book Capitalism, Socialism and Democracy, was one of my favorite economists in college. This was because he had a realistic description and astute understanding of the essential features of the big picture of the workings of modern capitalism, when other economists so frequently seemed to lose sight of the forest for the trees attempting to devise simple, theory driven mathematical models of the economy.

It is easy to fall into the trap of thinking about the present as if this is the way that the world has always been and always will be, and one of the most important lessons I learned as a history minor in college was just how untrue that assumption was over far shorter time frames than I ever would have guessed otherwise.

But, solving for an equilibrium in the social sciences that can't be reached in the very short term of a fewer minutes to a few decades, at most, is irrelevant and often counterproductive. 

Change, and not equilibrium, has been the long standing norm for all of living history and all of the oral history and recollections of the vast majority of living people alive today. 

Forcing yourself to almost always consider dynamic models in the social sciences and in predicting the future of technology, is far harder and far less certain than trying to solve for an equilibrium predicted by your theories based upon the present. But, at least doing so avoids the near certainty that any attempt to solve for the equilibrium for any significant period of time will be wrong.