Digital jobs – or not?

As always, John Naughton’s weekend column was very interesting – this week’s theme was Digital capitalism produces few winners. It contrasts the profit of the digital titans – Apple, Amazon, Google – with the relatively few jobs and poor working conditions they offer. Amazon in the UK (where the digital companies are already in the public stocks over their tax practices) was the subject of an eye-opening FT feature recently, Amazon unpacked.

John Naughton’s column starts: “Need a crash course in digital capitalism? Easy: you just need to understand four concepts – margins, volume, inequality and employment. And if you need more detail, just add the following adjectives: thin, vast, huge and poor.” This is in the same vein as Brynjolfsson and McAfee’s [amazon_link id=”0984725113″ target=”_blank” ]Race Against the Machine[/amazon_link] which argues that the new technologies are economising on human labour, and Paul Krugman’s recent Rise of the robots column, noting that manufacturers are investing in capital-intensive facilities, so productivity is high and the need for labour low.

[amazon_image id=”0984725113″ link=”true” target=”_blank” size=”medium” ]Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy[/amazon_image]

I would sound some notes of caution about this ‘the robots are eating all the jobs’ trope. One, this is the stage of the business cycle when jobs gloom is at its most intense – remember the New York Times special book, [amazon_link id=”0812928504″ target=”_blank” ]The Downsizing of America[/amazon_link], published in 1992 just ahead of the long upturn and employment boom? Two, the only way to assess the impact of new technologies is to look at aggregate data, not just a few firms – the distribution of income data suggest there is indeed something in the story about capital intensity and productivity, but the US employment ratio has been rising gently, albeit well below pre-crisis levels still. Three, there is a question about how informative existing data are – Mike Mandel’s work on the data-driven economy is suggestive of significant gaps in our knowledge.

[amazon_image id=”0812928504″ link=”true” target=”_blank” size=”medium” ]The Downsizing of America[/amazon_image]

Finally, the most productive sectors of the economy are always making jobs disappear, and there is a period of uncomfortable adjustment, including in the wage distribution, until jobs reappear in less productive sectors of the economy. Nobody has yet convinced me there’s anything different about the digital economy in this regard, although Krugman’s second ‘robots’ column on oligopoly power, Robots and Robber Barons, certainly flags up a serious issue. For me, the best book on the impact of digital on jobs remains Levy and Murnane’s [amazon_link id=”0691124027″ target=”_blank” ]The New Division of Labour: How Computers Are Creating the Next Job Market[/amazon_link], although it’s a few years old now.

[amazon_image id=”0691124027″ link=”true” target=”_blank” size=”medium” ]The New Division of Labor: How Computers Are Creating the Next Job Market[/amazon_image]

Economists as heroes, continued…

I’m very much enjoying reading Jim Lacy’s [amazon_link id=”1591144914″ target=”_blank” ]Keep From All Thoughtful Men: How US Economists Won World War II[/amazon_link]. Although it’s a book written by an obsessive, it appeals to my magpie-like delight in trivia. The first chapter starts with a moan about military historians’ lack of interest in logistics and statistics rather than blood and machines. “After all,” the author writes, “Who really wants to read about how many trains it took to move ammunition to the front in 1916, or about the hay consumption rate of one of Murat’s cavalry divisions?” Me! I do! That’s exactly the kind of thing I want to know!

[amazon_image id=”1591144914″ link=”true” target=”_blank” size=”medium” ]Keep From All Thoughtful Men[/amazon_image]

It’s also possible to divine the plot of a stylish drama set in the Washington and London of 1941 as the Americans debated their strategy toward the European conflict and the potential Pacific threat. There is American statistician Stacy May travelling from London via Dublin back across the Atlantic with a huge 35lb volume containing a comprehensive set of accounts of the US and UK productive capacity at the time: “It was a German spy’s ultimate fantasy: a plump, fortyish, dignified, preoccupied American statistician, all alone and carrying what everyone who knew of its existence considered the most important document in the world.”

There is the debonair Frenchman Jean Monnet, later celebrated (or otherwise, according to taste) as the founding architect of the European Community, arriving in Washington in late 1940, urging the American administration to throw US resources into the war effort. While there he mingled with Washington society, including Phil and Katherine Graham of the Washington Post. He had an affair with Katherine Graham, or so she heavily hints in her superb memoir [amazon_link id=”1842126202″ target=”_blank” ]Personal History[/amazon_link]. She writes of Monnet: “The thrill for me of being with him never disappeared as long as he lived. He was energetic and interesting, and I can testify to his virility.”

[amazon_image id=”0375701044″ link=”true” target=”_blank” size=”medium” ]Personal History: Katharine Graham[/amazon_image]

Surely there’s the equivalent of an Alan Furst novel in these scenes, not [amazon_link id=”0753828987″ target=”_blank” ]Mission to Paris [/amazon_link]but Mission to Washington? All this, and I haven’t yet got to the section about Simon Kuznets and the national accounts. Fabulous.

[amazon_image id=”0753828987″ link=”true” target=”_blank” size=”medium” ]Mission to Paris[/amazon_image]

Did economics win the war?

World War II literature isn’t my cup of tea normally, but there are some outstanding books. I loved Richard Overy’s [amazon_link id=”0140284540″ target=”_blank” ]Interrogations: Inside the Mind of the Nazi Elite[/amazon_link], about the period before the Nuremberg Trials when victors and prisoners had their first encounters about the cataclysm that had just ended. Overy’s powerful point is that people can switch between different moral universes astonishingly – scarily – quickly and thoroughly. Some of the prisoners had made that switch since their arrest. Another one of my favourite books is [amazon_link id=”0141042826″ target=”_blank” ]Most Secret War: British Scientific Intelligence 1939-45[/amazon_link] by R.V.Jones, about the huge espionage and intelligence effort, including the decoding of German communications by Bletchley Park – it covers the Whitehall and military hinterland as well, and the organisation of the enormous and wholly secret effort to deploy work at the frontiers of science and technology.

[amazon_image id=”0141042826″ link=”true” target=”_blank” size=”medium” ]Most Secret War (Penguin World War II Collection)[/amazon_image]

[amazon_image id=”0140284540″ link=”true” target=”_blank” size=”medium” ]Interrogations: Inside the Minds of the Nazi Elite[/amazon_image]

I’ve just started [amazon_link id=”1591144914″ target=”_blank” ]Keep From All Thoughtful Men: How US Economists Won World War II [/amazon_link]by Jim Lacey, and it already promises to join this distinguished company. Of course, it’s gratifying to see economists as heroes for once. Still, what I like about all these books is the reminder they bring that events are never, ever simple. Things turn out the way they do because of a lot of different contributory factors, few of them high profile. Or, as I like to put it in economist-speak, history is over-determined.

[amazon_image id=”1591144914″ link=”true” target=”_blank” size=”medium” ]Keep From All Thoughtful Men[/amazon_image]

The current pile

It’s time to choose my next book to read, and the pile is quite high at the moment (albeit including my incoming fiction as well as serious books).

The current pile

I think I’m going to go for the one at the top, [amazon_link id=”1591144914″ target=”_blank” ]Keep From All Thoughtful Men: How US Economists Won World War II[/amazon_link] by Jim Lacey, as it might be relevant for my new book, sitting with my publisher in draft at the moment.

[amazon_image id=”1591144914″ link=”true” target=”_blank” size=”medium” ]Keep From All Thoughtful Men[/amazon_image]

The English intelligentsia – a contradiction in terms

One of the interesting aspects of Tony Judt’s [amazon_link id=”009956355X” target=”_blank” ]Thinking the 20th Century[/amazon_link] (which I’ve nearly finished) is the insider-outsider perspective he has on England. He grew up in London, the son of an immigrant father and second generation immigrant mother, and emigrated to the US in his late 20s. So he has a nice combination of familiarity and objectivity about his birthplace (and I mean England, not the UK, as he has a very London-centric view).

Given that I spent my teenage years in a small Lancashire mill town pining to be a philosopher sitting in a French cafe, I was particularly taken with Judt’s comments about the way the English dismiss intellectuals – ‘English intellegentsia’ is not a meaningful social concept. His hypothesis is “that the intellectual agenda which drove ideologically configured political movements in continental Europe was quite absent in London.” This lack of ideology was a blessing for most of the 20th century. As Judt points out, the penalty Eric Hobsbawm paid for being a lifelong Communist was no more serious than having to be a professor at the University of London rather than Cambridge. That tolerance would surely not have played out in the same way on the Continent.

There is also a nice passage describing the way the furthest reaches of Empire – George Orwell’s Burma, India, the Caribbean – seem comfortable and familiar to the English thanks to language and cultural references, whereas the Continent seems wildly exotic. Even for Shakespeare the “coast of Bohemia” was a mysterious distant land, and as for Slovenia or Bulgaria, or even the longingly imagined Paris of my adolescence….

[amazon_image id=”009956355X” link=”true” target=”_blank” size=”medium” ]Thinking the Twentieth Century[/amazon_image]

[amazon_image id=”0140004564″ link=”true” target=”_blank” size=”medium” ]Burmese Days[/amazon_image]