1 big thing: The new threat to capitalism

2. When Chinese tourism dwindles

3. Surprising stat: U.K.'s charging surge

4. Worthy of your time

5. 1 college thing: Legal beer in the stadium

Welcome to Future. Have your neighbors signed up?

A year ago, we expanded from a 2-day-a-week publication to 5 days a week. On Sept. 9, Future will shift back to 2 days a week, responding to readers who told us overwhelmingly that, when it comes to the future, less is more.

This is my last week at Axios. Through Friday, we will be doubling down on our big themes, writing what we hope are especially definitive accounts of the biggest trends roiling this extraordinarily turbulent period of history. 

To get in touch, hit reply to this email or message me at steve@axios.com, Kaveh Waddell at kaveh@axios.com and Erica Pandey at erica@axios.com.

Today's Smart Brevity count: 996 words, <4-minutes

Future

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Axios Future

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1 big thing: Social media and the truth

2. The attack on the Cavendish banana

3. D.C.'s Amazonian housing squeeze

5. 1 passé thing: The U.K.'s unwanted pianos 

Today's Smart Brevity count: 1,012 words, <4 minutes

To comment on this or other topics, hit reply to this email or message me at steve@axios.com, Kaveh Waddell at kaveh@axios.com and Erica Pandey at erica@axios.com.

1 big thing: Humans and machines

2. End-of-summer reading: Risk and the Fed

3. What you may have missed

5. 1 crawling thing: Robots and cockroaches 

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Situational awareness: We are going dark for vacation. Starting Sept. 9, Future will shift back to 2 days a week — where we were in 2018, a response to readers who told us overwhelmingly that, when it comes to the future, less is more. 

This is my last day at Axios and my last edition of Future. I've received a humbling flood of email from you saying gratifyingly nice things about what Kaveh, Erica and I have done over the last couple of years. 

Unhesitatingly, the most satisfying part of writing this newsletter has been interacting with you — the vigorous but always congenial deliberation and debate about where the future is taking us. 

From here, Kaveh and Erica take over. To get in touch, message Kaveh at kaveh@axios.com and Erica at erica@axios.com. At least through the end of the day, I will be at steve@axios.com.

Today's Smart Brevity count: 1,275 words, about 5 minutes.

Thanks for reading, and have a great weekend!

1 big thing: AI hubris

2. The disinformation industry

3. Surprising stat: The 40-year pay gap

5. 1 senior thing: The gray entrepreneur

Today's Smart Brevity count: 924 words, <4-minute read.

To reach us, hit reply to this email or message me at steve@axios.com, Kaveh Waddell at kaveh@axios.com and Erica Pandey at erica@axios.com.

1 big thing: Russian interference, 2020

2. Numbers along the world's coastlines

3. For retired Americans, a life abroad

5. 1 mascot thing: The Yankees' winning secret

Today's Smart Brevity count: 840 words, a 3-minute read.

What else should we write about this summer? Hit reply to this email or message me at steve@axios.com, Kaveh Waddell at kaveh@axios.com and Erica Pandey at erica@axios.com.

National

After years of double-digit growth, the number of Chinese visitors to the U.S. and the amount they spend are shrinking, inflicting a hit on the $1.6 trillion travel industry.

The big picture: The inflection point was 2017, coinciding with President Trump's assumption of power and the intensification of U.S.-Chinese brinkmanship, according to data from the National Travel and Tourism Office, an industry association.

In 2012, the number of Chinese tourists rose 31.8%, and in 2016 by 16%, among an unbroken string of double-digit increases.

Their overall spending went from double digits to a 4% increase in 2017, and a 2% drop last year.

Why it matters: Chinese tourists and students are perhaps the biggest spenders of all visitors to the U.S. Last year, for instance, they spent $34.6 billion, compared with $16 billion by British tourists and $9 billion by South Koreans.

Last week, Macy's blamed an overall plunge in tourism for its first quarterly profit miss in 2 years.

Chinese tourism to U.S. has dwindled in the wake of Trump's trade war

Chinese tourists and students are perhaps the biggest spenders of all visitors to the U.S.

Newlyweds from Beijing, on Hollywood Boulevard. Photo: Mark Ralston/AFP/Getty

World

China

After years of double-digit growth, the number of Chinese visitors to the U.S. and the amount they spend are shrinking, inflicting a hit on the $1.6 trillion travel industry.The big picture: The inflection point was 2017, coinciding with President Trump&#x27;s assumption of power and the intensification of U.S.-Chinese brinkmanship, <a class="gtmContentClick" data-vars-link-text="according to data" data-vars-click-url="https://travel.trade.gov/view/m-2017-I-001/index.asp" data-vars-content-id="30f1101a-612a-4879-9dd2-e5157a83247c" data-vars-headline="Chinese tourism to U.S. has dwindled in the wake of Trump&#x27;s trade war" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://travel.trade.gov/view/m-2017-I-001/index.asp" target="_blank">according to data</a> from the National Travel and Tourism Office, an industry association.

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The hottest months on record have been the backdrop for what, on the surface, has seemed to be an equally red-hot U.S. labor market, with the lowest joblessness in a half century, rising wages, and bettering prospects for the least advantaged people.

Quick take: But, at odds with classic textbook lessons, experts now cite evidence that the economy may actually only be warm, with millions of people still wishing to get hired, to turn part-time or gig work into full-time employment, and to earn more money.

What's happening: In its latest report, the U.S. Bureau of Labor Statistics said the economy produced a great surplus of work above and beyond the number required to absorb new job entrants. Just 80,000-100,000 jobs are needed to soak up fresh graduates and other new entrants to the work force each month, and the economy produced 164,000 in July.

That left the July jobless rate at 3.7%, the lowest since 1969. Wages rose by 3.2%, double the 1.6% inflation rate.

Moreover, unemployment for black men remained at a record low of 5.8% and for black teens at 17.7%.

All kosher, right? Not if one is guided by history:

If you smooth out for monthly gyrations and take a 3-month average, the number of jobs increased by 140,000, well below the 211,000 during the same months in 2018, and the least in two years.

And wages are not rising as they should if you believe in the law of supply and demand, along with historical trends, which say they should be increasing at a fast clip since employers should be robustly competing to grab workers.

Instead, the year-over-year real average annual wage increase of 1.6% is far below the rates of 4% and more marked month after month just prior to the Great Recession.

Nominally, writes Dean Baker, senior economist at the Center for Economic and Policy Research, manufacturing wages rose an average of 2.5% over the year. But when you factor in lower weekly hours, the increase was just 1%, below inflation.

What economists now suspect: We are not in a tight jobs market.

"There are a lot of indicators that we are not really running out of workers," Guy Berger, chief economist at LinkedIn, tells Axios.

In a tweet thread today, Berger called the jobs report "eh," noting that employment for prime-age workers 25-54 is at a 10-month low (at 79.5% in July versus 79.7% in October 2018, according to the St. Louis Fed.).

This aligns with remarks July 10 by Fed Chairman Jerome Powell: “We don’t have any basis or any evidence for calling this a hot labor market,” he said. “To call something hot, you need to see some heat."

In a recent piece, the WSJ's David Harrison cites work by David Bell, an economist at the University of Stirling, and Dartmouth's David Blanchflower, who blame the sluggish wages on an outgrowth of people working part-time.

This critical mass of people who actually want full-time work has created an in-built flaccidity in the job market, and been "the main influence on wages in the years since the Great Recession," Bell and Blanchflower write in a 2018 paper.     

Thought bubble from Axios markets reporter Courtenay Brown: "There's sort of this chicken-or-egg dynamic here. Wages aren't growing because workers aren't coming off the sidelines, so there's not enough competition for talent for companies to raise pay. Meanwhile, workers may not be coming off the sidelines because wages aren't spectacular enough to make them jump back in."

Jobs only seem hot, and that's why wages are sluggish

Millions of people still want to get hired or earn more money

Jobs

Business

The hottest months on record have been the backdrop for what, on the surface, has seemed to be an equally red-hot U.S. labor market, with the lowest joblessness in a half century, rising wages, and bettering prospects for the least advantaged people.Quick take: But, at odds with classic textbook lessons, experts now cite evidence that the economy may actually only be warm, with millions of people still wishing to get hired, to turn part-time or gig work into full-time employment, and to earn more money.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

In what would have been widely dismissed as absurd even a year ago, a mainstream consensus has suddenly swept the world that the core of the global economic system has gone terribly awry, requiring a basic shakeup of capitalism. 

The big picture: But the problem may be far more fundamental than an excess of human ruthlessness, as many believe. Instead, experts say, capitalism is under another, more intractable assault — by inexorable long-term population trends that may kill the ability of economies to grow.

As we have reported, a reckoning has emerged for capitalism as practiced — people across the U.S., Europe and elsewhere say something is fundamentally wrong with their living standards and the size of companies, and CEOs and politicians suddenly believe that they must act. 

In an announcement yesterday, 181 of the top U.S. CEOs said they are changing their business objective — rather than solely seeking to satisfy shareholders, they will consider the desires of other constituencies such as communities and employees. 

And in a report, the WSJ writes that U.S. state attorneys general plan to proceed with a probe of big tech companies for alleged anti-competitive behavior.  

But experts suggest that such do-gooderism and investigations will be insufficient to turn the tide against an underlying, almost-unnoticed threat to the economic system that has fueled the entire industrial age.   

The new threat: Most of us know that global wealth surged starting in the 19th century. What is less publicized is that the explosion was accompanied by similar breakout in population, and economists connect the two — when population grows, GDP has tended to rise with it. (see chart)

Data: Statistics on World Population, GDP and Per Capita GDP, 1-2008 AD, Angus Maddison; Chart: Axios Visuals

Shrinking, aging: But now, population growth across numerous countries — especially in the West — has stalled. By 2040, demographers say, the number of countries with shrinking populations will rise almost 50% — to 67, from about 46 now. At the same time, by 2050 about a quarter of the world population will be 60 or older.  

Why that hurts capitalism: Fewer people mean less buying; older people also buy less than younger people. Hence, economies are likely to stagnate, then shrink — a challenge to capitalism, which is predicated on growth in GDP, profits, and wages.

"No capitalist economic system operates on the presumption that there will be zero or negative growth. No one deploys investment capital or loans expecting less tomorrow than today," writes Zachary Karabell, president of River Twice Research, in an essay at Foreign Affairs.

What's next: Richard Jackson, president of the Global Aging Institute, tells Axios that, as long as countries do not shut down markets with protectionism, companies will get around the problem for decades by exporting to still-growing populations. Experts note, for instance, that the populations of sub-Saharan Africa and the the Middle East will continue to rise through the century, according to current trends. (Yet eventually, he says, "we will run out of room and have to trade with Mars or something.") 

Darrell Bricker, author of  "Empty Planet" and global CEO of Ipsos, the polling company, said companies could also do better at marketing to the elderly. "When was the last time you saw an ad for a 70-year-old woman?" 

The bottom line: Capitalism is unlikely to vanish. But it could end up looking a lot different.  

Aiming for happiness: Ruchir Sharma, chief global strategist for Morgan Stanley Investment Management, said that, rather than growth, a better measure of public well-being amid population decline is per-capita income.  

"Per-capita income correlates very highly with measures such as the happiness index. The happiest countries in the world are also the nations with the highest per capita income, from Switzerland to Norway."

"It's only a problem because people can't imagine a capitalism that does anything else [but grow]," said Richard Cincotta, former lead demographer with the National Intelligence Council, and currently a senior fellow at the Stimson Center. 

The new threat to capitalism

Capitalism is under assault by inexorable population trends

Capitalism

In what would have been widely dismissed as absurd even a year ago, a mainstream consensus has suddenly swept the world that the core of the global economic system has gone terribly awry, requiring a basic shakeup of capitalism. The big picture: But the problem may be far more fundamental than an excess of human ruthlessness, as many believe. Instead, experts say, capitalism is under another, more intractable assault — by inexorable long-term population trends that may kill the ability of economies to grow.

Americans are at each other's throats. Politically, socially and culturally, we suspect each other's motives and plain sanity. So certain are we of the other's intent to do the nation harm, some of us have joined political gangs and assaulted one another, resulting in at least 1 death.

Which is to say: Americans have played into Russian President Vladimir Putin's hands — again. It is assumed he can attack next year's elections if he so chooses, but since no outsider knows exactly how, what comes next is one of the great underlying mystery-dramas of the 2020 election campaign.

The fear is dangerous needling of already-fraught U.S. social turmoil.

The big picture: Espionage and trickery between the West and Russia is not new — it goes back to Peter the Great, 3 centuries ago. But scholars say they are pressed to identify any episode of direct political mischief-making in this long history comparable to the breadth, scale and intensity of the Russian hacking, leaking and social media campaign in the 2016 U.S. election.

When it comes to its rivals and enemies, Moscow's objective often is to create chaos, and thus incapacitate the other power as a threat to Russian aims.

To get there, the weapon of choice is usually the exploitation of existing divisions in the other society.

That is where, in 2016, the U.S. made itself a sitting duck — and where polarized, ultra-bellicose Americans remain perhaps even more exposed to emotional manipulation in the coming election.

Russia hands in Washington and elsewhere are worried. No one can say with absolute certainty that Putin will attack this time, nor if he does, what means he will use. But what no one disputes is that the country — despite mountains of descriptions of Russia's actions last time — is little-better prepared now to defend itself than it was 3 years ago.

In 2016, the GRU — Russia's military intelligence arm — carried out the hacking of Clinton adviser John Podesta's emails and documents at the Democratic National Committee, according to the investigative report by special counsel Robert Mueller. At the same time, the Kremlin-backed Internet Research Agency was behind the massive social media campaign to provoke discord.

President Trump and Republican leaders at the federal and state levels have stifled efforts to form a national political strategy to combat a redux of the Russian campaign. One reason: Trump seems to view such efforts as challenges to the legitimacy of his 2016 victory.

While the defenses remain down, Trump appears especially prepared to stoke rawpolitical, societal and social emotions, often amplified by political commentators and talk show hosts at Fox and other media outlets.

"If Putin is going to throw the match of chaos, he needs kindling here. Our political system provides far too much of it right now," says Richard Fontaine, CEO at the Center for a New American Security.

Aric Toler, lead researcher at Bellingcat, a European investigative organization, says that if he had to choose one possible Putin plan for the U.S., it would be more of the same — "a lot of ad hoc actors within and from outside the Russian government/security services with similar targets as in 2016."

Mark Galeotti, a leading scholar on Russian intelligence and author of "We need to talk about Putin," foresees an effort "to escalate and magnify the inevitable divisions that become exacerbated in election times. With Trump running, and many Democrat voices prone to castigate his supporters as racists and morons, these opportunities are likely to be plentiful."

The bottom line: "I see no reason to expect that U.S./Western actions since 2016 have changed Moscow’s appetite for risk. Buckle up," said Andrew Weiss, a Russia expert at the Carnegie Endowment.

A wild card: A Russia expert contact of mine formerly with Britain's MI-6 said that, if Putin's strategy is what's expected — to do whatever will best polarize the U.S. — he may choose to do nothing. "Trump seems to be doing a pretty good job all by himself, depending on where you sit, so it might be easier to leave well alone."

Russian interference, 2020

Polarized Americans are even more exposed to emotional manipulation in 2020.

Russia interference

Technology

Russia

Americans are at each other&#x27;s throats. Politically, socially and culturally, we suspect each other&#x27;s motives and plain sanity. So certain are we of the other&#x27;s intent to do the nation harm, some of us have joined political gangs and assaulted one another, resulting in at least <a class="gtmContentClick" data-vars-link-text="1 death" data-vars-click-url="https://www.cbsnews.com/news/heather-heyer-charlottesville-virginia-car-attack/" data-vars-content-id="8991481f-bbdf-4f0a-9e49-5d59faa6a760" data-vars-headline="Russian interference, 2020" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.cbsnews.com/news/heather-heyer-charlottesville-virginia-car-attack/" target="_blank">1 death</a>.Which is to say: Americans have played into Russian President Vladimir Putin&#x27;s hands — again. It is assumed he can attack next year&#x27;s elections if he so chooses, but since no outsider knows exactly how, what comes next is one of the great underlying mystery-dramas of the 2020 election campaign.

In 2013, two young Oxford University researchers ignited a provocative debate with a landmark forecast that 47% of U.S. jobs are vulnerable to automation. Since then, experts around the world have relentlessly argued whether the new age of robots will wipe out whole classes of jobs, or create a unique time of machine-human partnership.

Driving the news: Though few appear to have taken notice, leading researchers have reached important conclusions.

Robots so far are destroying many more jobs than they are creating.

But it doesn't have to be that way — if humans realize they are in charge, and take control of what the machines are generally aiming to do.

One way to understand is to look at the recent debate over globalization: Rather than scorched-earth trade, open borders could have been optimized to preserve the living standards of affected U.S. communities. Similarly, humans can decide what role machines will play in society.

"It is a matter of choice how much we get to invest in replacing workers and how much in complementing workers," said Daron Acemoglu, an influential scholar on automation at MIT.

"Some people say robots will destroy more jobs, others that it will create more, but the agency we have is de-emphasized," he tells Axios. "When you look at the recent and more distant past, you see how important the choices are that firms, governments and people make." 

The big picture: In a way, we are in a heyday for employment. In the U.S., the jobless rate has been near a half-century low at or below 4% for more than a year. Almost anyone who wants a job — including the stubbornly unemployed, felony convicts and workers with a drug record — can get one. 

Wages, too, have been climbing beyond the rate of inflation: Since 2015, workers have carved out real pay increases every month on average, a change from the prior decade, when they routinely lost money to inflation, according to government data.   

But economists say they are surprised that wages are not rising more robustly, given how very tight government figures say the job market is. That reveals other conclusive facts about current and perhaps future jobs: 

We may not be in a tight job market at all. Instead, the market is tight in some places, but with considerable flab elsewhere.

This includes lots of people who are working part-time or in gig jobs when they want full-time work, and others underemployed in full-time jobs, according to a 2018 paper by the University of Stirling's David Bell and Dartmouth's David Blanchflower. 

If you remember one thing: There is no "future of work." Instead, we are in the midst of a gigantic and painful economic transition that began four decades ago and could go on for years and decades longer, as we have reported.

Work of all types is at risk — low- and higher-paying, from drivers to cashiers,  investment advisers and paralegals, says Al Fitzpayne, executive director of the Future of Work Initiative at the Aspen Institute.

If you want to tell your kids anything, advise them to get some digital training: From 2002 to 2016, the number of U.S. jobs requiring high levels of digital skills more than quadrupled, from 5% to 23% of total employment. And the number of jobs requiring little digital skills fell from 56% to less than 30%, according to the Brookings Institution. 

The bottom line: One of the most wrenching experiences of the current age has been falling out of the middle class. It's what underlies much of the disaffection and anger across the U.S. and Europe. 

So that, while humans are taking charge of robots, they have to make an affirmative decision whether public policy should more or less require a middle-class wage, suggests Benjamin Pring, head of Cognizant's Center for the Future of Work. 

Humans need to take charge of their robots

So far, robots are destroying more jobs than they create.

Future of work

In 2013, two young Oxford University researchers ignited a provocative debate with a <a class="gtmContentClick" data-vars-link-text="landmark forecast" data-vars-click-url="https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf" data-vars-content-id="a8d93661-fde1-489e-8475-d76aa6fd65c6" data-vars-headline="Humans need to take charge of their robots" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf" target="_blank">landmark forecast</a> that 47% of U.S. jobs are vulnerable to automation. Since then, experts around the world have relentlessly argued whether the new age of robots will wipe out whole classes of jobs, or create a unique time of machine-human partnership.Driving the news: Though few appear to have taken notice, leading researchers have reached important conclusions.

Steve LeVine

Stories

Humans need to take charge of their robots

Russian interference, 2020

The new threat to capitalism

Chinese tourism to U.S. has dwindled in the wake of Trump's trade war

Jobs only seem hot, and that's why wages are sluggish

Newsletter editions

Axios Future: Man vs. robot — 1 crawling thing — End-of-summer reads

Axios Future: AI hubris — Legal disinformation — Gray entrepreneurs

Axios Future: Russian meddling, 2020 — Coastline numbers — Parrot in the dugout

Axios Future: Social media and truth — Disappearing banana — Amazonian housing squeeze

Axios Future: New threat to capitalism — Fewer Chinese tourists — Football drinking