American "individualism" as romanticism?

David Brooks writes that the unique liberty, equality and democracy that old-school American historians celebrated was properly critiqued as ignoring slavery, genocide and imperialism.

But both the leftist critique and the old guard overlooked something.

Geographically, the USA was outlandishly lucky.

Isolated from enemies and gifted with abundant natural riches and endowed with a political and economic system that it inherited from Britain, the USA grew like a hothouse flower.

Brooks's critique is identical to the 1960s' critique of Australia's great good fortune (although Australians never caught on that this was meant as a criticism of Australia).

https://en.wikipedia.org/wiki/The_Lucky_Country

The Lucky Country is a 1964 book by Donald Horne. The title has become a nickname for Australia^[1] and is generally used favourably, although the origin of the phrase was negative in the context of the book. Among other things, it has been used in reference to Australia's natural resources, weather, history, its early dependency of the British system, distance from problems elsewhere in the world, and other sorts of supposed prosperity.

Horne's intent in writing the book was to portray Australia's climb to power and wealth based almost entirely on luck rather than the strength of its political or economic system, which Horne believed was "second rate". In addition to political and economic weaknesses, he also lamented on the lack of innovation and ambition, as well as a philistinism in the absence of art, among the Australian population, viewed by Horne as being complacent and indifferent to intellectual matters. He also commented on matters relating to Australian puritanism, as well as conservatism, particularly in relation to censorship and politics.

Brooks contends that American individualism could flourish only in such a sheltered environment.

https://www.nytimes.com/2020/05/21/opinion/us-coronavirus-history.html

But here’s what has struck me forcefully, especially during the pandemic: That whole version of the American creed was all based on an assumption of existential security. Americans had the luxury of thinking and living the way they did because they had two whopping great oceans on either side. The United States was immune to foreign invasion, the corruptions of the old world. It was often spared the plagues that swept over so many other parts of the globe.

We could be individualistic, anti-authority, daring and self-sufficient because on an elemental level we felt so damn safe.

First, just how individualistic are Americans?

To understand American individualism, one must first study diversity in the USA.

IIRC, Madison wrote about the three main types of diversity:

• ethnic and racial diversity
• diversity of wealth
• diversity of opinion

There is a lot of talk today about "diversity".

What we mean by that is ethnic diversity.

The USA might seem ethnically diverse, but one actually finds rampant assimilation -- especially among discontent, over-educated left-wing academics from racial minorities.

In terms of wealth, no society in the world is more tolerant of diversity of income than the USA.

Arguably, income inequality in itself does not bother most Americans.

What Americans want is equality of opportunity and high rates of social mobility.

What might be eroding social cohesion in the USA today is not absolute inequality, but relative inequality and a sense that social mobility has stalled.

Socially and culturally, Alexis de Tocqueville wrote that democracies like the USA are the most conformist and homogeneous places that suffer from the tyranny of the majority.

Regardless of their social class and ethnicity, Americans tend to dress the same (t-shirt, jeans, sneakers) and adhere to the same basic ideology.

According to Tocqueville, no society has less diversity of opinion than the USA.

Ideologically, Americans adhere to a variation of a theme -- namely, liberal democracy -- along a very narrow political spectrum (this includes pseudo-socialists and pseudo-fascists).

Americans who do depart from the majority in their beliefs (e.g., in religion) simply withdraw into a private realm along with like-minded believers.

So Americans tend to behave like teenagers, with an ostentatious display of rebellion towards authority coupled with a slavish conformity to their peers.

The point is that American "individualism" is highly qualified.

In fact, it is a form of essentialism to identify the USA as unchangingly individualistic.

Historically, adherence to individualism varies over long periods in the USA.

The 20th century really began in the 1920s in the aftermath of WW1 and its destruction of the old order and amid a giddy new prosperity.

A historian once pointed out that in the first page of a google search of "American photographs 1920s", two-thirds of the photographs have only one or two individuals.

This changed in the Great Depression.

A google search of "American photographs 1930s" was two-thirds comprised of photographs of three or more people.

The photos are of poor families or people protesting.

The photographs from the 1940s were also group oriented, only the photos were militarized.

Likewise, 1950s photos were two-thirds of groups (three or more people), but these were conservative, domesticated, conformist photos.

That's thirty years of collectivism, albeit under three rather different ideological regimes.

Photos from the 1960s were two-thirds made up of just one or two people -- a return to the individualism of the 1920s.

Sociologically, "individualism" is a social role that children are socialized into.

To suggest that only in a protected environment individualism can arise might be to engage in a kind of romanticism.

Romanticism asserts that there is a natural and real self that is suppressed by society.

In fact, the feeling of being oppressed was an aspect of the experience of Baby Boomers who grew up in affluence.

Some of them did rebel, to the dismay of the older generation.

But this was also a society in which creativity was being promoted as a driver of consumer capitalism, and rebellion and individualism were becoming valued.

That is, the Baby Boomers were socialized into an individualism which was at the time a functional requirement of the system.

Brooks writes that the SARS2 pandemic is the first time that the USA has been "invaded" and represents a radical new threat to American individualism.

Yet the USA, like all societies, has periodically been subject to pandemics, such as the one that struck in 1968.

https://www.cdc.gov/flu/pandemic-resources/1968-pandemic.html

The 1968 pandemic was caused by an influenza A (H3N2) virus comprised of two genes from an avian influenza A virus, including a new H3 hemagglutinin, but also contained the N2 neuraminidase from the 1957 H2N2 virus. It was first noted in the United States in September 1968. The estimated number of deaths was 1 million worldwide and about 100,000 in the United States. Most excess deaths were in people 65 years and older. The H3N2 virus continues to circulate worldwide as a seasonal influenza A virus. Seasonal H3N2 viruses, which are associated with severe illness in older people, undergo regular antigenic drift.

https://en.wikipedia.org/wiki/Hong_Kong_flu#Mortality

For this pandemic, there were two geographically distinct mortality patterns. In North America (the United States and Canada), the first pandemic season (1968/69) was more severe than the second (1969/70). In the "smoldering" pattern seen in Europe and Asia (England, France, Japan, and Australia), the second pandemic season was two to five times more severe than the first.

Brooks writes about the new American reality.

In this atmosphere, economic resilience will be more valued than maximized efficiency. We’ll spend more time minimizing downside risks than maximizing upside gains. The local and the rooted will be valued more than the distantly networked. We’ll value community over individualism, embeddedness over autonomy.

To some extent, this seems like a retread of what was said about the post-9-11 new American reality.

The sober, grounded post-9-11 worldview did not last.

Just like in the post-Vietnam war films from 1970s and the film noir of the 1950s and Dennis Leary's "Rescue Me" of the 2000s, the survivors will be forgotten.

It was always like this in the USA.

After the 1906 San Francisco earthquake and fire, Americans went about rebuilding the city.

Unlike other societies, there was no grieving for the dead or any commemoration of the dead in music or literature or the arts.

Rebuilding was simply treated like a business.

That's also how Americans approached WW2, like a job that has to be done and then is to be forgotten as soon as possible.

The American orientation is toward the future and is unsentimental and impersonal.

This ruthless, matter-of-fact orientation is consistent.

Whether the USA must take individualistic or collectivist form in order to complete the task is secondary.

Getting the job done is a cold, utilitarian imperative.

That's the message in "The Godfather, part 2", where Michael laments that for his father, everything was personal, but for himself, everything becomes business.

One sees this in comparing American and European newspapers in the time of SARS2.

European newspapers display the daily death counts at the top of their front page.

There is none of that in the USA.

One must search through an American newspaper to find the daily death rate, or go online.

Instead, American newspapers display the Dow Jones up by the banner.

In sum, American individualism is not the product of a society sheltered from a harsh outside world.

Rather, American individualism is a product of the harshness of American society.

As Tocqueville wrote, life in America resembles life at war, where everything is in a constant state of change and flux and obsolescence, and all is expendable.

The ruthless nature of American society is not a capitalist conspiracy, despite what romantics say.

It come from deep within the hearts of the American people.

It is the ultimate expression of DEMOCRACY.


https://www.poetryfoundation.org/poems/53087/out-out

Ideology & attitudes toward uncertainty (& coronavirus)

The following graph compares the mortality rates by age group of patients from two groups.
It compares:

1. victims of the Spanish flu of 1918 with
2. deaths throughout the 1911 to 1917 period from normal epidemics like the seasonal flu (the control group).

https://en.wikipedia.org/wiki/Spanish_flu#Mortality

The dotted line is a 'bathtub' curve which describes the usual high death rate among infants and the elderly who are afflicted by disease.

For the Spanish flu, the bathtub curve also applies.

However, there is also a big spike in the middle, with people around 35 dying in disproportionate numbers.

That is what one sees with an autoimmune response, where the body's immune system is revved into high drive and attacks the body along with the disease.

Ironically, it is the healthiest people who can suffer from the strongest autoimmune response.

An autoimmune response might be afflicting 15 children in New York City who are infected with the novel coronavirus.

https://www.cbsnews.com/news/kawasaki-disease-nyc-children-hospitalized-coronavirus-link-covid19-rare-disease/

Up until now, this has not been common among children during this pandemic, so it is of some concern.

It has been seen in some adult victims of COVID-19.

https://www.webmd.com/lung/news/20200417/cytokine-storms-may-be-fueling-some-covid-deaths

There is the danger that the more people who are infected, the more chance the virus has to mutate to cause autoimmune responses in otherwise healthy young patients.

Of course, this is not yet a reality, but merely a potentiality.

However, not taking potentialities seriously is precisely why the coronavirus was not taken seriously by many people -- perhaps most people -- when it first emerged.

Everyone was overlooking potentialities in favor of looking at evidence which had not yet come in.

Because little was known about it, it came to be assumed that the standard operating procedure that applied to the seasonal flu should also apply to the coronavirus.

Perhaps from that dubious assumption there emerged the assumption that the coronavirus was no more dangerous than the flu.

These two assumptions seemed to have been widespread.

The Chinese government and, later, Europeans and Americans seemed to adopt this position that the coronavirus was just a new flu.

In fact, much of the liberal media adopted the position that because little is known about the virus, there was no reason to panic.

https://www.foxnews.com/media/kayleigh-mcenany-media-downplaying-coronavirus

"Does Vox want to take back that they proclaim that the coronavirus would not be a deadly pandemic? Does The Washington Post want to take back that they told Americans to 'get a grip,' the flu is bigger than the coronavirus? Does The Washington Post, likewise, want to take back that our brains are causing us to exaggerate the threat of the coronavirus?

"Does The New York Times want to take back that fear of the virus may be spreading faster than the virus itself? Does NPR want to take back that the flu was a much bigger threat than the coronavirus? And finally, once again, The Washington Post, would they like to take back that the government should not respond aggressively to the coronavirus?"

Along those lines, it is said to be Jared Kushner who advised Trump to ignore the coronavirus threat because it was probably unjustified.

Kushner is reported to have advised Trump that if the Dow Jones industrial average reached 35,000, then Trump would be reelected.

Therefore, it was best not to spook the stock market with talk of a pandemic.

This advice did not reflect some extreme right-wing belief that the coronavirus was a hoax.

Historically, Jared Kushner has been a Democrat.

It was simply widely assumed that the coronavirus was not something to get worked up about.

There seem to be several lines of reasoning in the denial of the pandemic.

For some conservatives, there is no reason to get excited and carried away from our usual routine.

For populists, any kind of imposition by the federal government is a form of tyranny.

For progressives, if there is no clear evidence of a threat, then there is no threat.

One finds this progressive line of thinking in Carl Sagan's 1997 movie "Contact".

The military urges public officials to not build a structure presumably for space travel that seemed to have been designed by advanced extraterrestrial beings.

In the movie, the military was cast as as a stubbornly close-minded adversary, if not an outright enemy (a role played by populist religious fanatics).

And yet the physicist Stephen Hawking agreed with the military's cautious appraisal toward alien life forms.

Humans should not advertise their existence in the universe by trying to contact alien civilizations.

Extraterrestrials are like a box of chocolate.

You never know what you're going to get.

https://www.theguardian.com/commentisfree/2016/sep/27/stephen-hawking-light-years-dangerous-aliens

Actually, Hawking seemed to support the SEARCH for intelligent life in the universe, but was cautious about trying to contact them.

Hawking also warned of the potential dangers of artificial intelligence.

https://www.cnbc.com/2017/11/06/stephen-hawking-ai-could-be-worst-event-in-civilization.html

Again, the problem is not AI, but what is not yet known about AI.

AI can and should be pursued, but carefully, with sobriety.

Hawking talked up the potential of AI to help undo damage done to the natural world, or eradicate poverty and disease, with every aspect of society being “transformed.” 

But he admitted the future was uncertain. 

“Success in creating effective AI, could be the biggest event in the history of our civilization. Or the worst. We just don’t know. So we cannot know if we will be infinitely helped by AI, or ignored by it and side-lined, or conceivably destroyed by it,” Hawking said during the speech.

“Unless we learn how to prepare for, and avoid, the potential risks, AI could be the worst event in the history of our civilization. It brings dangers, like powerful autonomous weapons, or new ways for the few to oppress the many. It could bring great disruption to our economy.”

It could be that political progressives typically have generally optimistic attitude change (neophilia) and outsiders (xenophilia).

The optimistic mentality of the progressive is likeable and understandable.

We are exposed to it in every episode of Star Trek.

What is really problematic is not the irrational optimism of the rationalistic progressive, but the adolescent mind-frame of the romantic.

Whereas the progressive merely overlooks or explains away uncertainty, the romantic is downright enchanted and intoxicated by the very prospect of uncertainty.

For the romantic, uncertainty has an air of infinity possibilities.

The romantic is attracted to gambling when the stakes are unknown and the potential seems vast (e.g., the neoconservative attitude toward the potential invasion of Iraq).

In the 1998 movie "Croupier", the narrator explains that the appeal of gambling is not money, but rather "not facing reality, ignoring the odds."

https://en.wikiquote.org/wiki/Croupier_(film)

That is a very different attitude from the world weariness of the professional gambler who knows the odds and all the angles.

["Rounders", 1998, "I play for money"]

https://youtu.be/z7NxEj4A1Cg

The appeal of games is that the system is closed and regulated, there are explicit and transparent rules, and that competitors are known and played against discretely.

Moreover, a game is a closed environment in which the consequences to winning or losing do not outlast the game, yet the game can simulate in safe form the excitement of competition.

The casino is a closed system, so the odds can be known.

Yet most people who gamble don't even want to know the odds because they are intoxicated by the false promise of uncertainty.

When people walk into a casino, they become romantic dreamers and they disregard the odds.

So a casino is doubly seductive.

First, the casino offers a false sense of safety.

The reality is that you can actually lose everything you have in that casino.

Second, the casino provides a false sense of infinite possibilities.

In reality, the casino has very precisely stacked the odds against you.

The real world is not a safe closed environment, the real world is open and ambiguous.

Along these lines, the odds keep changing with the coronavirus.

But a lot of people are not pivoting with the constantly changing flood of new information.

In the initial period of the virus emerging in China, the virus was widely dismissed as being no more dangerous than the flu.

After this initial period of low information, more information started to appear in the media.

In this secondary period, as more information became available, certain basic assumptions began to take form:

• It was estimated that two-thirds of humanity would be infected, and that the death rate would be two percent.
• That would mean four million dead Americans if no measures were taken.
• The South Koreans, with their extensive testing, claimed that the death rate among the infected was more like 0.6%.
• That would still be 1.2 million dead Americans.
• Of course, that is nothing like the bubonic plague, which killed somewhere between one-third and two-thirds of the European population in the 1300s, yet the coronavirus death rate is enough to overwhelm the healthcare system, and this was the reason initially given to justify the lockdowns.
• Not taking measures against the pandemic would also demoralize society, and not just in the sense of emotional depression.
• A certain cynicism and a loss of social cohesion would permanently creep into a society that shrugged off the deaths of so many people.

Much of the American population seems stuck in the first period and its assumption that the coronavirus is inconsequential.

In fact, that might also be true of Sweden, where government policy urged Swedes to take voluntary precautions against coronavirus without enforcement.

Swedish authorities now acknowledge that they thought that their death rate would be much lower than it turned out.

That is, Swedish coronavirus policy has been a failure.

Nevertheless, the policy remains popular in Sweden.

https://www.businessinsider.com/coronavirus-sweden-lockdown-chief-says-high-death-toll-was-surprise-2020-5

The world seems to be entering a third stage of understanding regarding the coronavirus.

Comparative public policy responses to the coronavirus have altered public perceptions.

There seems to be a sense that responding to the coronavirus with strong measures does not involve a trade-off between economic growth and public safety.

Economically, there seem to be several scenarios that the coronavirus presents to societies:

• Test aggressively and avoid both deaths and a lockdown, and economically thrive thereafter (South Korea)
• Fail to test and then enter a strict lockdown, followed by testing and by a recession (China)
• Enter a semi-lockdown, with a relatively high death rate, and have a severe recession, with the population losing confidence (United States)
• Don't do anything (Brazil)

It should be noted that only very recently have these several distinct scenarios been observed.

Again, the issue here is uncertainty.

Perceptions keep changing because the realities on the ground continue to evolve.

Recently, more ambiguities have emerged.
There are comorbidities such as organ failure that later afflict coronavirus survivors.

There is the possibility that there will never be a vaccine because there is the possibility that humans cannot develop lasting immunity to the coronavirus.

There are reports that the virus has mutated into a more contagious new strain, which some observers disclaim.

There is the possibility that the pandemic will never go away, that it will become seasonal.

There is the the possibility that with greater contagiousness and a permanent presence, the virus will have greater opportunity to mutate.

If it mutated into an autoimmune disease, the disease would reinfect and kill young adults who were earlier so confident of their indestructibility.

If fact, in NYC, there is limited evidence of this with 15 very young victims.


On the other hand, who knows?

Estonia's e-government as "trifecta innovation"? (cryptocurrency & blockchain)

In terms of public safety, one of the best things that a government could do would be to put all of its bureaucratic functions online.

This is the policy position of the Estonian government.

Estonia has put all of its bureaucratic government functions online.

https://en.wikipedia.org/wiki/E-Estonia

e-Estonia refers to a movement by the government of Estonia to facilitate citizen interactions with the state through the use of electronic solutions. E-services created under this initiative include:

• i-Voting,
• e-Tax Board,
• e-Business,
• e-Banking,
• e-Ticket,
• e-School,
• University via internet,
• the e-Governance Academy , as well as
• the release of several mobile applications.

It saves Estonia 2% of its GDP.

It is also a highly secure system.

In fact, security was one of the objectives of the system, because Russia was always a problem for Estonia.

The data for e-Estonia is not stored centrally, but instead uses a data platform run by the government called X-Road to link information from local hosts.^[2] The system is backed up on servers in Luxembourg, which is governed with the same protections afforded for a diplomatic mission.^[2] The system is designed to allow the government of Estonia to function even in the event of an invasion by Russia.

It is both rigorous and transparent, a model of preparedness.

Individuals are able to access all e-Estonia data about themselves, and all queries to the system are logged.

https://www.techrepublic.com/article/how-estonia-became-an-e-government-powerhouse/

Today, 99% of the public services are available online 24/7, 30% of Estonians use i-Voting, and the country estimates the reduced bureaucracy has saved 800 years of working time.

There were three foundational projects.

• Digitizing registers held by public bodies to provide the necessary information to support e-services;
• building the X-Road platform that connects the wealth of different systems used in the public and private sector and allows them to share information; and
• giving citizens the means to securely access online services by providing digital ID cards and making digital signatures equivalent to handwritten signatures.

While Estonia's e-government can serve as an inspiration, countries must tailor such a project to their own unique circumstances and learn from setbacks in Estonia's experience.

With public safety in mind, much of the criminal justice system has been virtualized.

https://www.newyorker.com/magazine/2017/12/18/estonia-the-digital-republic

In Tallinn’s courtrooms, judges’ benches are fitted with two monitors, for consulting information during the proceedings, and case files are assembled according to the once-only principle. The police make reports directly into the system; forensic specialists at the scene or in the lab do likewise. Lawyers log on—as do judges, prison wardens, plaintiffs, and defendants, each through his or her portal. The Estonian courts used to be notoriously backlogged, but that is no longer the case.

“No one was able to say whether we should increase the number of courts or increase the number of judges,” Timo Mitt, a manager at Netgroup, which the government hired to build the architecture, told me. Digitizing both streamlined the process and helped identify points of delay. Instead of setting up prisoner transport to trial—fraught with security risks—Estonian courts can teleconference defendants into the courtroom from prison.

Estonia votes online.

The first “killer application” for the I.D.-card-based system was the one that Martens still works on: i-voting, or casting a secure ballot from your computer. Before the first i-voting period, in 2005, only five thousand people had used their card for anything. More than nine thousand cast an i-vote in that election, however—only two per cent of voters, but proof that online voting was attracting users—and the numbers rose from there. As of 2014, a third of all votes have been cast online.

Estonia's e-government relies on blockchain technology for security.

Records are kept on one long digital ledger comparable to a single, infinitely long knitted scarf.

Beyond X-Road, the backbone of Estonia’s digital security is a blockchain technology called K.S.I. A blockchain is like the digital version of a scarf knitted by your grandmother. She uses one ball of yarn, and the result is continuous. Each stitch depends on the one just before it. It’s impossible to remove part of the fabric, or to substitute a swatch, without leaving some trace: a few telling knots, or a change in the knit.

Because the blockchain records all transactions continuously, no discrete information can be deleted or added.

People understandably worry that this compromises security because personal information is open to public view.

However, because records cannot be altered, the sacrifice of privacy to transparency means that records can never be illicitly altered.

In a blockchain system, too, every line is contingent on what came before it. Any breach of the weave leaves a trace, and trying to cover your tracks leaves a trace, too. “Our No. 1 marketing pitch is Mr. Snowden,” Martin Ruubel, the president of Guardtime, the Estonian company that developed K.S.I., told me. (The company’s biggest customer group is now the U.S. military.) Popular anxiety tends to focus on data security—who can see my information?—but bits of personal information are rarely truly compromising. The larger threat is data integrity: whether what looks secure has been changed. (It doesn’t really matter who knows what your blood type is, but if someone switches it in a confidential record your next trip to the emergency room could be lethal.) The average time until discovery of a data breach is two hundred and five days, which is a huge problem if there’s no stable point of reference. “In the Estonian system, you don’t have paper originals,” Ruubel said. “The question is: Do I know about this problem, and how quickly can I react?”

With blockchain, all data is permanently set in place and open to inspection.

Also, backups of data can established in other places.

The blockchain makes every footprint immediately noticeable, regardless of the source. (Ruubel says that there is no possibility of a back door.) To guard secrets, K.S.I. is also able to protect information without “seeing” the information itself. But, to deal with a full-scale cyberattack, other safeguards now exist. Earlier this year, the Estonian government created a server closet in Luxembourg, with a backup of its systems. A “data embassy” like this one is built on the same body of international law as a physical embassy, so that the servers and their data are Estonian “soil.” If Tallinn is compromised, whether digitally or physically, Estonia’s locus of control will shift to such mirror sites abroad.

In the event of an invasion, Estonia's population would be captured, killed or scattered across the globe.

Even after that hypothetical invasion, the Estonian government would still function because it has been put online.

“If Russia comes—not when—and if our systems shut down, we will have copies,” Piret Hirv, a ministerial adviser, told me. In the event of a sudden invasion, Estonia’s elected leaders might scatter as necessary. Then, from cars leaving the capital, from hotel rooms, from seat 3A at thirty thousand feet, they will open their laptops, log into Luxembourg, and—with digital signatures to execute orders and a suite of tamper-resistant services linking global citizens to their government—continue running their country, with no interruption, from the cloud.

Here is more specific description of blockchain technology.

https://en.wikipedia.org/wiki/Blockchain#Structure

A blockchain is a decentralized, distributed, and oftentimes public, digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks.^[1][17] This allows the participants to verify and audit transactions independently and relatively inexpensively.^[18] A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests.

One question here is whether Estonia's e-government is "disruptive".

In "disruptive innovation", a simple product in a fringe market finds a niche, improves over time, and displaces the mainstream market unexpectedly.

https://en.wikipedia.org/wiki/Disruptive_innovation

In business theory, a disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.

This disruptive innovation is distinct from both:

• sustaining innovation, in which the dominant, mainstream product becomes more sophisticated over time, and
• efficiency innovation, in which a product more efficient and less expensive.

Before examining the innovativeness of e-government, a quick review of the innovativeness of blockchain technology might be useful.

Blockchain technology is the foundation of cryptocurrencies like bitcoin.

That raises another question.

Are cryptocurrencies innovative?

Is cryptocurrency a cheaper, technologically inferior form of money that is improving over time and will displace "normal" forms of money?

Normal forms of money include "paper" money (actually, dyed cloth) as well as electronic transmissions, such as the use of credit cards and online payment systems like PayPal.

It seems clear that cryptocurrency, while a marginal form of currency in a market of its own, is neither technologically inferior to nor cheaper than incumbent forms of currency.

Cryptocurrency is not disruptive innovation, properly speaking.

But neither is cryptocurrency a sustaining innovation because it is not the dominant product in the mainstream market that is becoming more sophisticated.

Cryptocurrency is not a sustaining innovation, in which the mainstream incumbent product grows more sophisticated and moves up market.

Cryptocurrency exists in a separate market than the mainstream because it has two primary uses -- speculation and money laundering.

Today, anyone can go online and dabble in the stock market as a speculator, so even speculation in cryptocurrency is not especially disruptive in the world of speculation.

Likewise, using cryptocurrency for money laundering seems neither the cheaper, inferior disruptive option nor a superior, sophisticated sustaining innovation.

Is cryptocurrency more efficient than regular currency?

The production of bitcoin is energy intensive.

https://www.vox.com/2019/6/18/18642645/bitcoin-energy-price-renewable-china

According to the bitcoin energy consumption tracker at Digiconomist, bitcoin currently consumes 66.7 terawatt-hours per year. That’s comparable to the total energy consumption of the Czech Republic, a country of 10.6 million people.

Credit card companies and banks host a much greater number of financial transactions than do cryptocurrencies, but they do not burn through electricity the way cryptocurrency does.

Cryptocurrency is not an efficiency innovation.

Cryptocurrencies are energy intensive because they rely of blockchain technology, which is not more energy efficient than regular systems of financial transaction.

But neither is blockchain technology a disruptive technology which is cruder and simpler than the what the mainstream market has to offer.

And neither is blockchain a sustaining innovation because it is not a more sophisticated version of the incumbent product.

However, if blockchain is used as the basis of governmental transactions, it does seem to be a form of disruptive innovation.

Blockchain technology in e-government is disruptive innovation.

That is, blockchain records are something simpler that originated from another field entirely on the fringes (cryptocurrency) that has displaced physical government records in Estonia.

Are blockchain-based government records a form of sustaining innovation, that is, a more sophisticated version of the already dominant mainstream product?

Insofar as Estonia might have already put citizens' personal information online, blockchain records would have been an advanced version of that because blockchain is more secure.

Blockchain technology in e-government is sustaining innovation.

Are blockchain-based government records an innovation toward efficiency?

Insofar as the government of Estonia saves 2% of its GDP because it has shifted to e-government, blockchain-based government records do seem to be more efficient.

Blockchain technology in e-government is efficiency innovation.

And here we come to a pet theory.

This is the concept of "trifecta innovation".

In a trifecta innovation, a product has qualities of disruptive, sustaining and efficiency innovation.

Uber is an example of trifecta innovation.

Clayton Christensen pointed out that, contrary to popular perception, Uber was not a classic case of disruptive innovation.

Uber was launched within the world of elite "black car" taxi service as a sustaining innovation by using a smartphone app for ride hailing.

That is, Uber originated as an improvement of a mainstream product, not an inferior product in a fringe market.

However, insofar as Uber got people who would never use a taxi to use ride hailing, Uber created a new fringe market that disrupted taxi companies.

This disruptive innovation on Uber's part is distinct from the initial phase of creating a ride hailing app within the upscale taxi market.

The creation of a new fringe market in the second phase was something distinct that involved the early formation of the gig economy.

Uber was also an efficiency innovation that drove down prices.

In the early, quasi-idealistic phase of Uber adoption, Uber was largely a ride-SHARING service.

A driver who was heading across town anyway could help defer the cost of their trip by taking on a passenger, also thereby broadening their social life.

This was an efficiency innovation in private transportation.

That the passenger was saving money on a taxi was a feature of disruptive innovation, but insofar as the driver was also saving money (on gasoline) was a feature of efficiency innovation.

Recently, Uber has been criticized as a perpetual unprofitable enterprise propped up by its questionable stock market valuation.


But then that's also what they said about Amazon.