Hans Rosling, the Swedish statistician who transformed the way we think about development and data, died this week of pancreatic cancer, at the relatively young age of 68. I haven’t got the time to do a proper tribute to him, but Gap Minder, the research group to which he devoted the last ten years of his life, has assembled a formidable collection of resources which show how wealth and life expectancy have been transformed over the short and the long run.
The youtube video at the top of this post, filmed by the BBC, shows Rosling in action, with his 200 year history of the world, which is worth five minutes of anyone’s time.
The chart he’s using there is on the Gap Minder site, and lets you explore the trajectories of different countries or groups of countries. There’s a host of valuable resources on the site, such as the ethnographic work of Dollar Street, going into the homes of people across the world to see what different incomes mean in different places in terms of everyday living standards.
I’ll also miss Rosling’s Twitter contributions, which often were a reminder of how fast fertility rates were falling across the middle-income and lower-income nations of the world. Typically this is far faster than the comparable rate of change at a similar stage in most European countries, and his tweets were a reminder that the rate of global population growth was slowing down rapidly.
Gillian Tett had a column (may need registration) in this weekend’s Financial Times in which she reflected on trying to find a bar in upstate New York to watch one of the Presidential debates. It turned out the bars weren’t keen, and not just because there was a big football game on at the same time. The barmen observed that showing the debate would cause unnecessar rancour between their customers.
She is a good reporter, and once she’d got over her surprise that others were less interested in the debate than she was, she reflected on the experience using her training as an anthropologist.
[O]ur biases are important. And that, in turn, suggests we could all benefit by looking at a concept that I first learnt about when I was studying anthropology: the “dirty lens” problem.
This “dirty lens” tag refers to the idea that when scientists peer at an object through a microscope, their view can be distorted by a clouded lens. In a laboratory, smudges and smears can usually be wiped away with a cloth. But in the social sciences, the “lens” is our mind, ears and eyes, and it is harder to spot and remove our mental smudges. There is no cloth.
There are, however, some exercises you can do to clean the lens.
In anthropology classes at university, we were urged to do four things. First, to take the obvious (but oft-forgotten) step of recognising that our lenses are dirty. Second, to consciously note our biases. Third, to attempt to offset these biases by trying to see the world from different perspectives; we must listen and look without preconception. Last but not least, to remember that our personal lens will never be perfectly clean, even if we take the first three steps. We must be humble and remember the limits of knowledge.
There are some obvious lessons here for futurists as well.
Although futurists aren’t supposed to make predictions, the notion that our energy system is switching much more quickly than expected from fossil fuels to renewables, and that solar energy will be at the front of that change, suddenly doesn’t seem so controversial. Of course, the speed of the change still matters, certainly in terms of global warming outcomes.
And yet until recently the notion that solar energy would be the leading energy source was a possible future that was, broadly, regarded as impossible.
The International Energy Agency didn’t think that solar power would ever be affordable at any great scale, and didn’t include it in its projections. In 2013, George Monbiot wrote that “solar power is unlikely to make a large contribution to electricity supply in the UK.” Goodall himself admits that he didn’t think it had much to offer until very recently.
Or, as Bloomberg put it:
The best minds in energy keep underestimating what solar and wind can do. Since 2000, the International Energy Agency has raised its long-term solar forecast 14 times and its wind forecast five times.
So what’s happened? The answer, in headline form, is in the chart at the top of this post.
The left case for Brexit, or so called Lexit, has been well articulated during the referendum by Tariq Ali, John Hilary, and others. Paul Mason made it in one column, then rowed back again in another. A number of notable Greens have been leavers: Rupert Read, who changed his mind, and Jenny Jones, who made her case in the Guardian.
In the most recent edition of New Left Review, Susan Watkins summarised this case succinctly:
[A] vote to remain, whatever its motivation, will function in this context as a vote for a British establishment that has long channelled Washington’s demands into the Brussels negotiating chambers, scotching hopes for a ‘social Europe’ since the Single European Act of 1986… A Leave vote… would not bring about a new golden age of national sovereignty… But the knock-on effects of a leave vote could be largely positive: disarray, and probably a split, in the Conservative Party; preparations in Scotland for a new independence ballot.
And God knows, it’s hard to hold progressive views and not have one of Polly Toynbee’s famous clothes pegs over your nose as you approach the EU. [Update: Or to vote Remain through gritted teeth.] Peter Mair’s argument that the EU has the form of a democratic organisation but none of the substance is hard to argue with. The Lisbon Treaty, with all of the shenanigans involved, shifted the centre of gravity of the EU sharply towards neoliberalism and away from the social market; Germany’s imposition of ordoliberalism on the Eurozone and the brutal bullying of Greece was plain ugly.
The notion that the EU “needs to be taught a lesson”, put to me last week in a bar in France by a woman who said she’d vote Leave if she was British, has an obvious attraction.
But there’s something deeper going on, and that’s why I think that progressives have to vote Remain despite the EU’s evident problems.
One of the purposes of good futures work should be “to make the future strange,” to push people out of their assumption that what is normal now will go on being normal in the future. One of my favourite exercise for this is Douglas Coupland’s “Reverse Time Capsule“, published in Wired magazine in the 1990s, that listed things in the present that would have seemed unlikely, or worse, 20 years previously. One favourite example from his list: the Japanese luxury car.
When I run workshops, I sometimes get people to bring objects that would have seemed unlikely in the mid-1990s, while discouraging the obvious consumer-techno choices. Having re-read some of the early history of the AIDS epidemic recently, and the way in which it wasn’t taken that seriously at first because the main victims were gay men and drugs users, in 2016 gay marriage seems a strong candidate for the current reverse time capsule.
The past is strange
But it’s also useful to remind people that the past is also strange, and there were two good examples of this in Bill Bryson’s book on Shakespeare, which I cantered through recently, both on the colour black.
The first is that black clothes, as seen in this portrait (probably) of Shakespeare, were a sign of wealth and status. The reason for this was that black dyes were much more expensive than other dyes. This was at a time when–according to James Wallman’s book *Stuffocation*–it took two months’ work to make a shirt, which would cost the equivalent of arounf £2,000 ($3,000) at current prices.
The second is more surprising. Sugar arrived in Britain in the Elizabethan period, but again it was expensive, and therefore only the well-off could afford it. The result: they ended up with blackened teeth (dentistry didn’t catch up until a few hundred years later). So the less affluent would blacken their teeth to pretend that they too could afford sugar, and were therefore wealthier than they were.
The image of Shakespeare is from Wikimedia. It was painted sometime between 1600 and 1610, perhaps by John Taylor.
Long, considered account from the Economist, looking at the long-term history (back to 1770) as well as the trends and prospects.
I’ll highlight some extracts when I’ve had time to digest.
Meade’s book, Efficiency, Equality and the Ownership of Property, “was motivated immediately by a concern about future technological and economic development. The scenario he contemplated was one in which automation of production reduces the demand for labour”, writes White.
‘This could happen if, in spite of the net accumulation of capital equipment, the new labour required with the new automated machines was actually less than the growth of the labour force plus the labour made redundant by the scrapping of physically worn-out old machinery’ (Meade 1964, pp.25-26).
So, notes White: “Even if wage rates are not depressed in absolute terms, the automation process could lead at least to a shift in labour’s and capital’s shares of output, a higher share going to capital.”
Of course this view is all but mainstream now, at least in some places – and hence this blog. What’s interesting about Meade’s book is that it has scenarios in it about how a society could respond if this happened.
White’s article describes it like this:
Meade’s 1964 book considers four possible responses: ‘the trade union state’; ‘the welfare state’; ‘property-owning democracy’; and ‘the socialist state’.
Under the first heading, Meade means any action, whether through collective bargaining or legislation, to maintain a ‘minimum real wage’. He is sceptical of this approach on the grounds that it will come at the expense of jobs.
Under the second heading, Meade has in mind tax-transfers which shift resources from the capital-holding rich to the wage-earning poor. Again, he is sceptical that this approach can go far by itself. The tax rates necessary, he thinks, could undermine economic incentives.
It is the latter two responses that Meade advocates. If the return to capital is rising relative to labour, then the way to prevent this leading to growing inequality of income is to democratise claims over wealth – over returns to capital. [My emphasis] This can be done in two ways.
First, the state can enact policies to encourage a wider dispersion of privately-held wealth. This is what Meade means by ‘property-owning democracy’. Meade himself puts a lot of emphasis on designing an inheritance or accessions tax in a way that will break down large concentrations of wealth and encourage people to give wealth to those who have yet to receive much from this source. One can readily imagine other, complementary policies to help with this goal. In one interesting response to Paul Krugman’s article on the ‘rise of the robots’, Noah Smith argues along Meade-type lines, suggesting the idea of a universal capital endowment as a right of citizenship. (Back to the Child Trust Fund?)
Second, the state can itself build up a stake in national wealth and distribute this as income to citizens. For much of his career Meade was an advocate of what he termed ‘Topsy Turvy Nationalization’. He was not supportive, in general, of the state buying up private sector firms and then trying to manage them. But he did strongly support the creation of a state investment fund. The state would own a portfolio of assets across the economy. The return on these assets could then be returned to the citizenry, e.g., as a uniform social dividend or basic income. One might call this a Citizens’ Trust. …
In his ideal scenario, he envisaged the community owning 50% of national assets as a Citizens’ Trust and using the return to provide a social dividend for all. In Meade’s utopia – or what he himself called his ‘agathatopia’ (a good, if not perfect, place) – a downward shift in the return to labour, e.g., due to automation, has a more limited impact on the overall distribution of incomes. If there is a change in the relative reward of labour and capital, then while one source of an individual’s income (wages) falls in relative terms, other sources of their income (the returns on more widely held private and shared public assets) will correspondingly rise.
One place where such a Citizen’s Trust has been created is Alaska, oddly, where a community fund was created which channels a modest citizens’ income from oil royalties. (Karl Widerquist, Open Democracy, 24 April 2013). Arguably (my note, not White’s) is that Norway’s Sovereign Wealth Fund works in a similar way, although disburses public benefits and public assets rather than a citizens’ income. Scottish politicians have been talking about a similar model, post-independence. (Angela Cumminem Open Democracy, 6 November 2013).
This post is extracted from one by Izabella Kaminska, written in December 2013, who was one of the first people to dive into this area – and took quite a lot of flak for doing so. The links are all hers.
There’s an important theoretical point buried implicitly in here, one that David Harvey makes in his readings of Capital, that only human labour can create value. It’s quite technical, though, and I need to spend time on it to understand it better
One of her theories – that we have a crisis in the value of work because we are being too productive with our leisure time is interesting – and a bit Clay Shirky, though I’m not completely persuaded. But the point of a research blog is to catch all this stuff.
It took almost a year for me to be taken seriously on the “technology is undermining capital” front, so it was extremely exciting to see the debate blast off in serious economic circles during the last quarter of 2012. I thought it might be useful, as a result, to provide some links to the most recent developments — since the debate really is moving quickly now. …
One of the criticisms I face all the time, meanwhile, is that all this tech innovation has been going on for centuries. Why should there be a crisis of capital now? What makes this time any different? And what makes my sudden focus on tech relevant?
For starters, what I feel is new is the idea that the financial crisis was born out of the tech crash. If not for the dotcom bubble, we would not have had the conditions to create the subprime crisis. The China outsourcing phenomenon and imbalance situation may also have been born out of a need to replace mechanised labour — which compromised capital — with human labour, which still ensured profit and the preservation of capital. It was in a sense, an artificial scarcity response… designed to spread spending power to secure return on capital, rather than extinguish it.
I wrote a “Man in the high castle” type piece on FT Alphaville earlier this year, imagining what might have happened had the West not outsourced labour as extensively back in the 1990s. The conclusion was that the West may have been Japan-ified much earlier on.
But what really makes this time different, I would argue, is that a lot of the competition is now coming from a) the voluntary and crowd sourcing/open source arena and b) it’s only artificial scarcities (patents, monopoly interests) which are preventing complete democratisation of technologically-fueled abundance across the world. It is thus because monopoly power is slipping, challenged as it is by free alternatives rather than cheaper ones… that the crisis is beginning to manifest.
In a nutshell there is too much leisure time being devoted to productivity. We are too productive at ever cheaper (or free) rates, and as a consequence the pool of salaried jobs (those which must offer a good salary to attract specific skills) is diminishing quickly. … That, at least, is my entirely non-substantiated theory.
Anyway, enough drifting. Here are the links as promised:
Rise of the Robots – Paul Krugman (Dec 8)
Technology or Monopoly Power? – Paul Krugman (Dec 9)
Robots and Robber Barons – Paul Krugman (Dec 10)
Technology and Wages, the Analytics (Wonkish) – Paul Krugman (Dec 10)
Human vs Physical Capital (Krugman’s “mea culpa” moment) (Dec 11)
Is growth over? – Paul Krugman (Dec 26)
Capital-biased Technological Progress: An Example (Wonkish) – Paul Krugman (Dec 26)
Futurism and Policy – Paul Krugman (Dec 27)
Policy Implications of Capital-Biased Technology: Opening Remarks – Paul Krugman (Dec 28)
Innovation Crisis or Financial Crisis? – Ken Rogoff (Project Syndicate) (Dec 4)
Marginal Revoluion (Tyler Cowen)
Peter Thiel and Gary Kasaparov (FT)
Noahpinion (Noah Smith)
Rise of the cyborgs (Dec 26)
Pragmatic Capitalism (Cullen Roche)
Reformed Broker (Josh Brown)
Own the Robots, Bro, Trust Me. (Dec 27)
Laurence Kotlikoff and Jeffrey Sachs
Smart Machines and Long-Term Misery (pdf) – NBER (Dec 2012)
Of Flying Cars and the Declining Rate of Profit – The Baffler (June 4)
IS U.S. ECONOMIC GROWTH OVER? FALTERING INNOVATION CONFRONTS THE SIX HEADWINDS (pdf) NBER (August 2012)
The Patent Problem (13 November)
A Roundup on Robots, Capital-biased Technological Change and Inequality (plus how to tell if a person is a fiduciary) – (Dec 18)
Robots Raise a Row(e) in Economics Land – (Dec 16)
The Road to Serfdom: Where the Robots Are Taking Us – Climateer Investing (Dec 11)
The theory of everything – (August 11)
Enough is enough of the age of consumption – FT (July 4)
And my tech-related stuff (includes refs or features work of others)
[Alphaville, free, needs registration]
In an economy not so far, far away – FT (Dec 28)
The FT Alphaville podcast, with Dylan Grice – FT Alphaville (Dec 21)
Defending the Romans – FT Alphaville (Dec 12)
The robot economy and the new rentier class – FT Alphaville (Dec 10)
The personalised pricing revolution – FT Alphaville (Nov 21)
Whose idea is it anyway – Towards a Leisure Society (Nov 16)
Money as a passion, not a standard – FT Alphaville (Oct 10)
Welcome to the ‘Desert of the Real’ — a postmodern economy – FT Alphaville (Oct 09)
Rubik’s Revolutions – FT Alphaville (Oct 03)
The case against idea monopolisation – FT Alphaville (Oct 03)
The decline or the redefinition of labour? – FT Alphaville (Sept 26)
A time of hoarding and inflation fears, 1930s edition – FT Alphaville (Sept 24)
Beyond happiness – FT Alphaville (Sept 20)
The BoE on Britain’s productivity puzzle – FT Alphaville (Sept 19)
Are UK companies hoarding labour? – FT Alphaville (Sept 12)
How technology is killing the Asian growth miracle – FT Alphaville (Sept 10)
Towards a steady-state economy? – FT Alphaville (Sept 04)
Time to resurrect the ‘missing variable’ – FT Alphaville (Aug 31)
3D Printing: Rise of the machines – FT Alphaville (Aug 10)
Negative rates as a precursor to the death of banking – FT Alphaville (Jul 31)
China flash PMIs — the employment factor – FT Alphaville (July 24)
China as a post capital economy – FT Alphaville (July 12)
Pariah profits in an age of ‘negative carry’ – FT Alphaville (Jul 05)
The negative carry universe – FT Alphaville (July 04)
On abundance, post-scarcity and leisure – FT Alphaville (Jun 20)
On price stability during an ‘abundance shock’ – FT Alphaville (June 26)
Shopping in the future – FT Alphaville (Jun 14)
Redefining labour – FT Alphaville (Jun 12)
The end of artificial scarcity – FT Alphaville (Jun 03)
Space opera, beyond finance edition – FT Alphaville (Feb 29)
Economics, a space opera – FT Alphaville (Feb 03)
Others from Alphaville
Robots! No Robots! – FT Alphaville
Ahhhh! No robots! – FT Alphaville
Beyond Scarcity – FT Alphaville (series)
On price stability during an ‘abundance shock’ – FT Alphaville
Is that robot going to steal your job? – FT Alphaville (Sept 14)
We are in the middle of a panic about the future of work. There are fears that the rise of robots – or more exactly, a combination of computing power, algorithms and robotics – will destroy the labour market, even, possibly, the very idea of labour value. On the other hand, the economists’ view, generally, is that we’ve been here before.
Just as the advent of the industrial revolution saw jobs destroyed in agriculture, so new jobs will emerge as a result of our current technological transiiton. And better: those jobs will be higher value, higer productivity jobs, so in the medium term we will all be richer. And let’s face it, the Luddites are still mocked, even if that’s usually by people who didn’t understand their politics. But there’s still something that nags away here.
Back in the 1970s there was a joke about the factory of the future. It would be staffed by a man and a dog. The dog would be there to makes sure that the man didn’t touch the equipment. And the man? He’d be there to feed the dog. The idea that automation would destroy the employment base, in other words, has been swimming around for almost 40 years.[Update: Or 50].
And the other difference between the beginning of the 21st century and the beginning of the 19th century is that then we were about to stumble on a huge amount of the cheapest and most potent energy the human race had found, coal, then oil. Now, we are facing a world of tightening resources, of energy shortage rather than abundance. So; it’s complicated. I’m going to try and untangle it, slowly, on this blog.
With the row over detention of David Miranda at Heathrow still reverberating, together with typically unverifiable and frankly barely plausible national security claims, it’s probably a more interesting question to ask why the Home Office (Britain’s Ministry of the Interior) and its associated agencies have become, well, so feral over the last decade. The best explanation is that the separation 15 years ago of its former legal functions to what is now the Ministry of Justice allowed the Home Office to focus exclusively on enforcement. (more…)