The Indigo Economy

There is a thought-provoking and, I think, highly optimistic post at RealClearPolitics from Mikhail Fridman, “As Global Instability Spreads, the ‘Indigo’ Economy Rises” which I would like to commend to your attention. Here’s a snippet from it to give you the flavor:

We are entering a disruptive era driven by extraordinary levels of human creativity. A new generation of curious, strong-willed and talented individuals is unhindered by convention or the past. This new “Indigo” generation is now shaping tomorrow’s economy and creating national wealth. I use the term Indigo because it has been used to refer to children with special or unusual abilities. This is an era where abnormally talented individuals and entities are now able to realize new levels of human potential and economic achievement.

and here’s what I think is the meat of the post:

The main source of national wealth is not the resource rent but the social infrastructure that allows every person to realize his or her intellectual and creative potential. It is for this reason that Exxon, once the world’s largest company, has been overtaken by Apple and Google. This represents a paradigm shift in which creative, non-linear thinking and random ideas are turned into new scalable services in a short space of time.

Yesterday in comments we had a substantial discussion about infrastructure. Too often the role of roads and bridges in America’s vital infrastructure have been over-emphasized. Other important areas of infrastructure like sewers or the power grid don’t encompass the totality of our infrastructure.

I might argue that our most important infrastructure includes institutions like a sound currency and banking system and the rule of law. Let’s not ignore those in a slapdash run to put additional lanes on a highway or build the 153rd bridge across the Mississippi. They’re among our most valuable infrastructure and their lack is retarding the growth of many of the world’s countries.

10 comments… add one
  • jan

    This is a particularly interesting topic for me. I became immersed in the indigo children phenomena years ago, mainly because my son Jake was such an unusual child — extremely intelligent, intuitive and yet out-of-step in conforming to his peers’ stages of growth and development — the irony being he also appeared nonchalant by these differences. Although his life has certainly not been easy, largely due to his rebellious “uniqueness,” he is a most interesting person to be around, especially being an audience to his ideas and perspective of society and the world.

    I just sent him the following links — here and here — dealing with the Hyperloop currently on the conceptual table of traveling at hyper speed in a tube. This is the kind of stuff he loves to digest. Steve Jobs, Elon Musk types are certainly Indigo-like personalities — the latter being the “idea man” behind the hyperloop, which was then open-sourced to students and others to fill in the details and eventually build.

    Another person who has weighed in on the aspect of Indigo Chilldren is Neale Walsch, author of the popular Conversations With God book series. He even created a fantasy film highlighting his beliefs in the reality of Indigo Children.

  • jan

    Dave, the first post didn’t go through, so I posted a second one. Now there are two. Please delete one, if you can.

  • michael reynolds

    I stumbled a bit on reading this:

    The United States of America, which was built on the principles of free markets and openness…

    Wow. Really? Because I seem to recall reading somewhere that our founding economic system relied quite heavily on slavery and the use of force to steal vast tracts of land that could be exploited for their natural resources. And “openness?” What does that even mean? Economic openness as expressed in protective tariffs? Political openness expressed in a system that disenfranchised the vast majority of its citizens – black, Indian and female?

    But, okay, whatever. The rest of the piece basically boils down to, people with high IQ’s are doing well, other people not so much.

    No kidding. A million years ago when we were tramping around the savannah eating beetles and being eaten by lions, people with high IQs were already outperforming in the job category of shaman or medicine man. A thousand years ago they were scribes or priests. Yes, IQ is swell. Very useful stuff.

    But having been one of those “indigo children” I am skeptical of us as a class. Very useful as social enzymes, catalyzing reactions. But you do not want a society dominated entirely by people north of IQ 130 or whatever. Society needs the stickers, the people who stay and endure and do all those things people like me tend to reject. They’re the glue, we’re the solvent. We are necessary and useful at times but horribly destructive at other times.

    There were a lot of very smart boys behind the Terror and the Great Leap Forward and the Holocaust. What was in short supply during the Holocaust was not smart guys, it was those people who saw a bright, clear line between good and evil and had the courage to make the right choice. I’ll take a good and brave man over a smart man any day, and if we want a durable society that’s about something more than making money, maybe we should focus on growing more of those. God knows I’m a snob and look down my nose at anyone south of 130, but you don’t build a society out of people like me.

  • michael reynolds

    Jan:

    The Great California High Speed Train from nowhere to nowhere is a good example to me of a bad infrastructure program. By the time the damn thing is built we’ll all be in self-driving cars.

  • jan

    Michael,

    The traits of these supposed Indigo children go far beyond just being intelligent, and having high IQ’s. In fact intelligence is but one variable in a long list of many. And often times said intelligence is more of an obstacle in having an easy ride during the dependency cycle of childhood — as they dislike authority figures and being told to do something they don’t want to do.

    The stand-out traits in fact are their sensitiveness to others, level of empathy in which they seem to “feel” the pain and suffering of others, truthfulness, thinking out of the box of conformity, a different kind of spirituality, and purpose-driven to do something “good” rather than something that’s mainly lucrative, involving monetary gain, or giving them adult security.

    When they’re young, though, their emotions have a hard time to manage or even fully understand some of their far flung thoughts, quirky ideas and/or depth of wisdom (for their age) wondering around in their head. My son, at three, once asked me if he had to be polite to adults even when they acted in stupid ways? It was a difficult question to answer, because I’m a normie who believes in decorum. But, I also totally understood the dilemma of a young toddler who could see through the facade of a grown-up trying to act smart when that wasn’t the case.

    BTW, I agree that the smart train is a good example of a bad idea.

  • Ben Johannson

    This is an era where abnormally talented individuals and entities are now able to realize new levels of human potential and economic achievement.

    And yet this fails to show up in any societal or economic measure of well-being. New era my ass.

  • The doors are twisted on broken hinges.
    Sheets of rain swish through on the wind
    where the golden girls ran and the panels read:
    We are the greatest city,
    the greatest nation,
    nothing like us ever was.

  • CStanley

    Well said, Michael, although like jan I think it’s incorrect to correlate high IQ with out of the box thinking. High intelligence does necessarily involve some creativity and flexibility, but it can also coexist with a conservative temperament that prefers structure, strong institutions, and respect for authority.

  • sam

    “The United States of America, which was built on the principles of free markets and openness”

    That’s why the first act of the first Congress was The Tariff Act of 1789 (1 Stat. 24).

  • Gerpal

    That this article is unrealistically optimistic and paints the United States is Utopian is of secondary importance to the main thrust of its argument, which is that the US has transformed into an information economy creating both opportunity and dislocation.

    On the dislocation side, the manufacturing jobs that left will not come back unless wages become competitive, something American workers will not allow. Our laws and institutions have not kept pace. We look like a country of consumers without jobs. In fact the very nature of work has changed. A third of American workers are now independent contractors with no income security or benefits. That number is projected to increase to 40 percent by 2020.

    The transformation has also created enormous opportunities. “Indigo” might be a misleading term since it implies exceptional talent. Economist Richard Florida has written about the Creative Class, which gets closer to the heart of the change. Information based businesses create huge opportunities in record time. Think Facebook and the social media revolution, or what Uber did to the taxi business or SoFi and The Lending Club are doing to the banks. The American economy would be a shambles today without the likes of Apple, Google (ok, Alphabet), even the venerable old companies like Microsoft and Intel. In an information economy new ideas compete with old ways of doing business. When they work better the resulting disruption creates opportunity and wealth.

    I gave the Fridman article to my son, a liberal arts college undergrad with a major in the arts who is struggling to conceive of a place for himself in a rapidly transforming world. While his stress is troubling, the opportunities that are taking shape outside of traditional institutional structures and career paths are promising. Navigating in these swiftly changing currents is the challenge not only for my son, but for his independent contractor dad.

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