Automation, the future of work and giraffes

Daniel Susskind’s A World Without Work: Technology, Automation and How We Should Respond is a very nice overview of the issues related to technological unemployment – will it happen, how will it affect people, and what policy responses might make sense. As the book notes, it is impossible to predict the number/proportion of jobs that might be affected, or how quickly, with detailed studies coming up with numbers ranging from about a tenth to about a half. But that there will be disruption, and that past policies have not dealt well with the consequences, is far less uncertain. Even if you believe that the economy will in time adjust the types and amount of work available – and so in that sense this time is *not* different from the past – the transition could be painful.

The book has three sections. The first looks at the history of technological unemployment and why we might expect AI to lead to a new wave. The second sets out the task-based analysis introduced by David Autor and others to sketch how the character of people’s work can change significantly. While dismissing the lump of labour fallacy, it argues that one of the main symptoms will be increased inequality. It predicts, gloomily, that this will get worse and that some people will be left with no capital and redundant human capital,, “leaving them with nothing at all.” I’m not sure that will be politically viable, judging from current events, but the logic is straightforward.

The final section turns to potential policy responses: improved education – heaven knows, we need that; ‘Big State’ – “a new institution to take the labour market’s place” – in effect more tax and a UBI; and tackling Big Tech through competition policy – yep, I’m definitely up for that. Finally, Susskind argues that part of the role for the Big State is to ensure we all have meaning in our working lives, replacing the job as the source of people’s identity, though I wasn’t sure how this should happen.

It’s a clearly-written book, covering concisely ground that will be familiar to economists working on this territory, and providing a useful overview for those not familiar with the debate. Although I’m not a fan of UBI, the other policy prescriptions seem perfectly sensible – perhaps too sensible to be inspiring.

41mVd8pmXCL._SX324_BO1,204,203,200_I must say that my other recent read has made me even more sceptical about the scope for AI to take over from humans. Recently I noted there has been a wave of terrific books on AI. Add to the list Janelle Shane’s You Look Like A Thing and I Love You. You’d be absolutely mad not to read this bok. It had me in hysterics, while making it super-clear what’s hype and what’s realistic about current and near-future AI. And explaining why image recognition AI is so prone to seeing giraffes – many giraffes – where there are none. An absolute must-read.



Calculating the economy

One of the books I’ve read on this trip to the AEA/ASSA meetings in San Diego is The People’s Republic of Walmart by Leigh Phillips and Michael Rosworski. This is a very entertaining projection of the socialist calculation debate onto modern capitalism.

41JGcj2r26L._SX329_BO1,204,203,200_The starting point is the Simon/Coase realisation that big firms are internally planned economies – if it works for Walmart, why wouldn’t it work at larger scale? The authors’ hypothesis is that economic planning might work better now that we have so much more powerful computers and better data.

I’d recommend the book as an introduction to the socialist calculation debate for those unfamiliar with it (ideal for students). It cites some of my favourite books including Francis Spufford’s Red Plenty and Eden Medina’s Cybernetic Revolutionaries. Some chilling lines – about Stalin’s purges, for instance: “Anyone with any expertise was placed under suspicion.” It’s a great read.

Am I persuaded? Not entirely. Technology clearly will change organisational configurations, but it has just as much been decentralisation of firms and extended supply chains as it has been giant Walmart-type firms. I’m also sceptical that the data available is actually the information needed to plan an economy, or that it’s easy to access and join up. Still, it’s the right question, and a reminder that the boundary between market, state and other forms of organistaion is not set in stone but needs constant negotiation – in fact, I know a great book about this about to be published: Markets, State and People.

0FBA95F6-E1DB-4017-A90A-89A2D3C43EB7As seen at ASSA2020 in San Diego




Venture capital is social capital

Happy New Year, blog readers! Soon I’ll do my usual look ahead to 2020 books.

Meanwhile, this is from Trick Mirror, essays by Jia Tolentino, which I just finished. It’s an excellent, thought-provoking series of extended reflections on what life online is doing to us, and particularly how it interacts with the social constraints on women. As she says here, venture capital is social capital. In fact, capital is social capital.

This is why our Wealth Economy project started with what some people thought was the quixotic aim of measurement of social capital. But if economists think it’s so important – and we do, we just call it ‘goodwill’ or ‘institutions’ or some other term – we’d better be able to give it empirical life. So far, so good, in our work – the UK’s Industrial Strategy Council has taken up the social capital metrics produced by my Bennett Institute colleagues Matthew Agarwala and Marco Felici. But much left to be understood.




Enlightened Economist Prize 2019

I’m very late this year, so no time to longlist then shortlist. My top reads among the economics titles I’ve read during 2019 (for reasons of sanity I’ve excluded the non-economics ones including the terrific crop on AI) were:

Palaces for the People Eric Klinenberg (review)

The Globotics Revolution Richard Baldwin (review)

The Economics of AI edited by Agarwal, Gans and Goldfarb

The Technology Trap Carl Frey (review)

Globalists Quinn Slobodian (review)

Extreme Economies Richard Davies (review)

Growth Vaclav Smil (review)

Good Economics for Hard Times Abhijit Banerjee and Esther Duflo (review)

The Great Reversal Thomas Philippon (review)

As always, the rules are that this is an entirely personal and arbitrary choice from among the books I’ve read during the year, no matter when they were published. The prize is that I offer to take the author out for a meal. As always, it’s a really difficult final choice – but I’m going to go for Extreme Economies by Richard Davies.

51-otaNMNtL._SX323_BO1,204,203,200_This is the 8th Enlightened Economist prize by the way. Previous winners were:

2018: Republic of Beliefs by Kaushik Basu

2017: Economics for the Common Good Jean Tirole

2016: Stuff and Money in the Time of the French Revolution Rebecca Spang

2015: Mastering Metrics Joshua Angrist and Steffen Pischke

2014: Complexity and the Art of Public Policy by David Colander and Roland Kupers

2013: The Worldly Philosopher Jeremy Adelman

2012: Economic Fables Ariel Rubinstein


Measuring progress….

It’s the Christmas holiday; I’ve been doing some random reading. I’m part way through the new John Le Carre novel, Agent Running in the Field, which is ok though far from his best. Also half way through Matthew Adler’s Measuring Social Welfare. Meanwhile, I polished off Pandaemonium, a book I’ve had lying around since 2012, when it inspired Danny Boyle’s marvellous Olympic opening ceremony.

The book’s subtitle is ‘The Coming of the Machine Age as Seen by Contemporary Observers’. It’s a collection of extracts from writings between 1660 and 1886 gathered by Humphrey Jennings, one of the founders of Mass Observation. He is obviously in sympathy with the Ruskinite anti-machine age tendency but the extracts speak for themselves & I found it fascinating. To take one snippet, in an 1847 Autobiography of a Working Man, Alexander Somerville writes, “There is a time coming when realities shall go beyond any dreams … Nation exchanging with nation their products freely; thoughts exchanging themselves for thoughts, and never taking note of the geogrphical space they have to pass over, except to give the battery a little more of the elecric spirit; … man holding free fellowship with man, without taking note of the social distance which used to separate them…”

And I was moved by one breathless extract about a family journey to calculate the equivalent in today’s prices of 1839 fares from Liverpool to London on the railway: £2 11s and 3d for the master and £1 8s and 0d for the servant: about £350 and £150 respectively. The most expensive prices today for 1st and standard class would be £242 and £162.50, cheaper (£126 and £88.60) off-peak. And then it took the whole day at a maximum speed of 36mph, compared to 2.5 hours now. There is such a thing as progress…. though the 9d glass of wine taken as refreshment at Birmingham was probably a bit more of a bargain than today’s equivalent.

Santa as ever brought me lots of books and I have the trip to ASSA 2020 in San Diego next week followed by the Digital Economics conference in Toulouse coming up, so plenty of reading time.