John Maynard Keynes: Economic Possibilities for our Grandchildren

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pages: 279 words: 87,910

How Much Is Enough?: Money and the Good Life by Robert Skidelsky, Edward Skidelsky

"Robert Solow", banking crisis, basic income, Bertrand Russell: In Praise of Idleness, Bonfire of the Vanities, call centre, creative destruction, David Ricardo: comparative advantage, death of newspapers, financial innovation, Francis Fukuyama: the end of history, full employment, happiness index / gross national happiness, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, market clearing, market fundamentalism, Paul Samuelson, profit motive, purchasing power parity, Ralph Waldo Emerson, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, union organizing, University of East Anglia, Veblen good, wage slave, wealth creators, World Values Survey, zero-sum game

Quoted in Robert Skidelsky, John Maynard Keynes: The Economist as Saviour 1920–1937 (London: Macmillan, 1992), pp. 72, 235. 2. For the essay as a whole see John Maynard Keynes, Essays in Persuasion, The Collected Writings of John Maynard Keynes, vol. 9 (Cambridge: Cambridge University Press, 1978), pp. 321–32. It is reprinted from Keynes’s 1931 Essays in Persuasion. For the earlier outings, see Skidelsky, Keynes: The Economist as Saviour, p. 634, n. 53. 3. G. E. Moore, Principia Ethica (Cambridge: Cambridge University Press, 1903), pp. 188–9. 4. A. W. Plumptre, quoted in Skidelsky, Keynes: The Economist as Saviour, p. 237. 5. For a discussion of growth rates in the USA, Europe and the rest of the world, see Fabrizio Zilibotti, “Economic Possibilities for our Grandchildren 75 Years After: A Global Perspective,” in Lorenzo Pecchi and Gustavo Piga (eds.)

Questions of distribution, which lie at the center of modern discussions of justice, while vitally important, are only so to us in the context of the requirements of the good life. Imagine a world in which most people worked only fifteen hours a week. They would be paid as much as, or even more than, they now are, because the fruits of their labor would be distributed more evenly across society. Leisure would occupy far more of their waking hours than work. It was exactly this prospect that the economist John Maynard Keynes conjured up in a little essay published in 1930 called “Economic Possibilities for our Grandchildren.” Its thesis was very simple. As technological progress made possible an increase in the output of goods per hour worked, people would have to work less and less to satisfy their needs, until in the end they would have to work hardly at all. Then, Keynes wrote, “for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.”

ALSO BY ROBERT SKIDELSKY Keynes: The Return of the Master (2009) John Maynard Keynes 1883–1946: Economist, Philosopher, Statesman (2004) John Maynard Keynes: Fighting for Britain, 1937–1946 (2000) 2002 Arthur Ross Book Award Gold Medal 2001 Lionel Gelber Prize The World After Communism: A Polemic for our Times (1995) Interests and Obsessions: Historical Essays (1993) John Maynard Keynes: The Economist as Saviour, 1920–1937 (1992) John Maynard Keynes: Hopes Betrayed, 1883–1920 (1983) Oswald Mosley (1975) English Progressive Schools (1969) Politicians and the Slump: The Labour Government of 1929–1931 (1967) ALSO BY EDWARD SKIDELSKY Ernst Cassirer: The Last Philosopher of Culture (2009) Copyright © 2012 Robert Skidelsky and Edward Skidelsky Production Editor: Yvonne E.


pages: 235 words: 62,862

Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek by Rutger Bregman

autonomous vehicles, banking crisis, Bartolomé de las Casas, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, Branko Milanovic, cognitive dissonance, computer age, conceptual framework, credit crunch, David Graeber, Diane Coyle, Erik Brynjolfsson, everywhere but in the productivity statistics, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Gilder, George Santayana, happiness index / gross national happiness, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, income inequality, invention of gunpowder, James Watt: steam engine, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, low skilled workers, means of production, megacity, meta analysis, meta-analysis, microcredit, minimum wage unemployment, Mont Pelerin Society, Nathan Meyer Rothschild: antibiotics, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, post-industrial society, precariat, RAND corporation, randomized controlled trial, Ray Kurzweil, Ronald Reagan, Second Machine Age, Silicon Valley, Simon Kuznets, Skype, stem cell, Steven Pinker, telemarketer, The Future of Employment, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tyler Cowen: Great Stagnation, universal basic income, wage slave, War on Poverty, We wanted flying cars, instead we got 140 characters, wikimedia commons, women in the workforce, working poor, World Values Survey

Antoin Murphy, “Money in an Economy Without Banks – the Case of Ireland,” The Manchester School (March 1978), pp. 44-45. 9. Donal Buckley, “How six-month bank strike rocked the nation,” Independent (December 29, 1999). 10. Umair Haque, op. cit. 11. Roger Bootle, “Why the economy needs to stress creation over distribution,” The Telegraph (October 17, 2009). 12. John Maynard Keynes, “Economic Possibilities for our Grandchildren,” in: John Maynard Keynes, Essays in Persuasion (New York, 1963), pp. 358-373. 13. Alfred Kleinknecht, Ro Naastepad, and Servaas Storm, “Overdaad schaadt: meer management, minder productiviteitsgroei,” ESB (September 8, 2006). 14. See: Tony Schwartz and Christine Poratz, “Why You Hate Work,” The New York Times (May 30, 2014). http://www.nytimes.com/2014/06/01/opinion/sunday/why-you-hate-work.html?

BERTRAND RUSSELL (1872–1970) 2 A 15-Hour Workweek Had you asked the greatest economist of the 20th century what the biggest challenge of the 21st would be, he wouldn’t have had to think twice. Leisure. In the summer of 1930, just as the Great Depression was gathering momentum, the British economist John Maynard Keynes gave a curious lecture in Madrid. He had already bounced some novel ideas off a few of his students at Cambridge and decided to reveal them publicly in a brief talk titled “Economic Possibilities for our Grandchildren.”1 In other words, for us. At the time of his visit, Madrid was a mess. Unemployment was spiraling out of control, fascism was gaining ground, and the Soviet Union was actively recruiting supporters. A few years later, a devastating civil war would break out. How, then, could leisure be the biggest challenge?

A second chance in the second decade’ (June 2014). http://apps.who.int/iris/bitstream/10665/112750/1/WHO_FWC_MCA_14.05_eng.pdf?ua=1 29. Wilkinson and Pickett, p. 36. This specifically concerns young adults in North America, but the same trend is visible in other developed countries. 30. Quoted in: Ashlee Vance, “This Tech Bubble Is Different,” Bloomberg Businessweek (April 14, 2011). http://www.businessweek.com/magazine/content/11_17/b4225060960537.htm 31. John Maynard Keynes, “Economic Possibilities for our Grandchildren” (1930), Essays in Persuasion. http://www.econ.yale.edu/smith/econ116a/keynes1.pdf 32. Russell Jacoby, Picture Imperfect: Utopian Thought for an Anti-Utopian Age (2005). Also see my last (Dutch) book, De geschiedenis van de vooruitgang (2013), in which I discuss Jacoby’s distinction between the two forms of utopian thought. 33. George Kateb, quoted in: Lyman Tower Sargent, Utopianism.


pages: 330 words: 77,729

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen

"Robert Solow", Albert Einstein, banking crisis, Berlin Wall, Bretton Woods, business climate, business cycle, creative destruction, David Ricardo: comparative advantage, delayed gratification, experimental economics, financial independence, Financial Instability Hypothesis, full employment, Hernando de Soto, housing crisis, Hyman Minsky, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, liberation theology, liquidity trap, means of production, microcredit, minimum wage unemployment, money market fund, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, price stability, pushing on a string, rent control, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Shiller, rolodex, Ronald Coase, Ronald Reagan, school choice, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, unorthodox policies, Vilfredo Pareto, zero-sum game

No doubt the bold challenges made by Marx and Keynes and their disciples have had a positive effect. They have caused market economists to respond to their deft criticisms and improve the classical model that Adam Smith created. Today the neoclassical market framework is stronger than ever before, and its applications are ubiquitous. In 1930, at the beginning of the Great Depression, John Maynard Keynes wrote an optimistic essay, "Economic Possibilities for Our Grandchildren." After lambasting his disciples who predicted never-ending depression and permanent stagnation, Keynes foresaw a bright future. Goods and services would become so abundant and cheap that leisure would be the greatest challenge. What productive things can be done in one's spare time? According to Keynes, capital would become so inexpensive that interest rates might fall to zero.

Columbia professor Johr Austrian Eugen Bohm-Bawerk (1851- (1847-1938) countered l\ 1914) was the first economist to critique tation theory of labor with Marxist theory of capitalism. productivity theory. Yale Professor Irving Fi Cambridge professor Alfred Marshall 1947) created the first p (1842-1924) helped transform eco- and developed the qu£ T H E G E N E R A L T H E O R Y OF E M P L O Y M E N T I N T E R E S T A N D M O N E Y JOHN MAYNARD KEYNES MACMILLAN AND CO.. LIMITED ST. MARTIN'S STREET. LONDON 1936 John Maynard Keynes ( 1 8 8 3 - 1 9 4 6 ) , B r i t i s h e c o n o m i s t and s t a t e s m a n , published his influential General Theory in 1936: "I believe myself to be writing a book which will largely revolutionise the way the world thinks about economic problems." Keynes was a financial wizard who made Keynes shocked his Bloom Keynes, meeting Harry Dexter W h i t e MIT Professor Paul Anthony at Bretton Woods, New Hampshire, in ( 1 9 1 5 - ) and his p o p u l a r 1944, helped frame the post-war inter-Economics (1948), made Ke national e c o n o m i c s y s t e m based on the standard theory in the p fixed exchange rates and the creation of riod.

A Tract on Monetary Reform. London: Macmillan. . 1930. A Treatise on Money. 2 vols. London: Macmillan. . 1951 [1931]. Essays in Persuasion. New York: W.W. Norton. . 1963 [1930]. Essays in Biography. New York: W.W. Norton. . 1971. Activities 1906-1914: India and Cambridge. The Collected Works of John Maynard Keynes. Vol. 15. London: Macmillan. . 1973a [1936]. The General Theory of Employment, Interest and Money. London: Macmillan. . 1973b. The General Theory and After, Part I, Preparation. The Collected Works of John Maynard Keynes. Vol. 13, ed. by Donald Moggridge. London: Macmillan. Klamer, Arjo, and David Colander. 1990. The Making of an Economist. Boulder, CO: Westview. Knight, Frank H. 1959. "Review of Ricardian Economics." Southern Journal of Economics 25, 3 (January): 363-65. . 1982 [1947]. Freedom and Reform.


pages: 182 words: 53,802

The Production of Money: How to Break the Power of Banks by Ann Pettifor

Ben Bernanke: helicopter money, Bernie Madoff, Bernie Sanders, bitcoin, blockchain, borderless world, Bretton Woods, capital controls, Carmen Reinhart, central bank independence, clean water, credit crunch, Credit Default Swap, cryptocurrency, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, distributed ledger, Donald Trump, eurozone crisis, fiat currency, financial deregulation, financial innovation, financial intermediation, financial repression, fixed income, Fractional reserve banking, full employment, Hyman Minsky, inflation targeting, interest rate derivative, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, light touch regulation, London Interbank Offered Rate, market fundamentalism, Martin Wolf, mobile money, Naomi Klein, neoliberal agenda, offshore financial centre, Paul Samuelson, Ponzi scheme, pushing on a string, quantitative easing, rent-seeking, Satyajit Das, savings glut, secular stagnation, The Chicago School, the market place, Thomas Malthus, Tobin tax, too big to fail

As evidence of this arrogance, Professor Steve Keen in Debunking Economics cites the words of Ben Bernanke, governor of the US Federal Reserve at the time of the crisis: ‘the recent financial crisis was more a failure of economic engineering and economic management than of what I have called economic science.’7 The ‘economic scientists’ of the profession (and many on the Left) have also systematically ignored or downplayed the monetary theory and policies of the genius that was John Maynard Keynes – theory and policies that could have averted the 2007–09 crisis. Instead ‘Keynesian’ policies are derided as ‘taxing and spending’, even while Keynes’s primary concern was with monetary policy (the management of the currency, the money supply and interest rates). He was concerned with prevention of crises, not cure. His great work was, after all titled The General Theory of Employment, Interest and Money. However, that did not mean that he did not attach importance to the deployment of fiscal policy (spending and taxation) as part of the ‘cure’ of a crisis. He simply wanted monetary policy to be well managed so as to ensure employment and prosperity and prevent crises. Because of the value of his monetary theory this book draws heavily on John Maynard Keynes’s policies – still regarded as taboo by the economics establishment.

Notes Preface 1Mohamed El-Erian in ‘The Lehman Crisis: One Year Later’, Fortune, 28 September 2009. 2Richard Dobbs, Susan Lund, Jonathan Woetzel and Mina Mutafchieva, ‘Debt and (Not Much) Deleveraging’, McKinsey Global Institute, February 2015, mckinsey.com, accessed 5 June 2016. 3New York Times editorial, ‘The Millions Who Are Just Getting By’, New York Times, 2 June 2016, nytimes.com, accessed 5 June 2016. 4Rich Miller, ‘Risky Reprise of Debt Binge Stars US Companies Not Consumers’, Bloomberg, 31 May 2016, bloomberg.com, accessed 5 June 2016. 5Emily Cadman, ‘Osborne Welcomes Right Kind of Deflation as Good News for Families’, Financial Times, 20 May 2015. 6OECD, ‘Policymakers: Act Now to Keep Promises!’, Economic Outlook No. 99, 1 June 2016, oecd.org, accessed 5 June 2016. 7Steve Keen, Debunking Economics, Revised and Expanded Edition: The Naked Emperor Dethroned? London: Zed Books, 2001, p. xiii. 8Darren K. Carlson, Americans Weigh In on Evolution vs. Creationism in Schools, 2005, gallup.com, accessed 8 June 2016. 9John Maynard Keynes, Economic Possibilities for our Grandchildren, 1930, econ.yale.edu. 1. Credit Power 1Michael Hudsen, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy, New York: Nation Books, 2016. 2Geoffrey Ingham, The Nature of Money, Cambridge: Polity Press, 2004. 3Sir Mervyn King in an interview with Martin Wolf, ‘Lunch with the FT’, Financial Times, 14 June 2013, ft.com, accessed 6 June 2016.

Published in John Maynard Keynes, Essays in Persuasion, The Royal Economic Society, 1972, p. 335. 15Eric Platt and Jo Rennison, ‘US Stock Funds Suffer $11bn Outflows – Redemptions Since the Beginning of the Year Top $60bn’, Financial Times, 6 May 2016, ft.com, accessed 6 June 2016. 16Hoisington Investment Management Company, Quarterly Review and Outlook: First Quarter 2016, hoisingtonmgt.com, accessed 6 June 2016. 17Transcript of Eric Holder to the Senate Judiciary Committee, ‘Attorney General Eric Holder on “Too Big to Jail”’, American Banker, 6 March 2013, americanbanker.com, accessed 3 October 2013. 18Wolfgang Münchau, ‘Europe Is Ignoring the Scale of Bank Losses’, Financial Times, 23 June 2013, ft.com, accessed 17 September 2013. 5. Class Interests and the Moulding of Schools of Economic Thought 1This chapter is based on the paper What Are the Economic Possibilities for Our Grandchildren? drafted in collaboration with Dr Geoff Tily. It was delivered in Cambridge on 16 November 2015 by the author as one of the events organised by King’s College’s Politics Society to celebrate the five-hundredth anniversary of the completion of the stonework of King’s College Chapel. 2Mervyn King speech, ‘Twenty Years of Inflation Targeting’, Stamp Memorial Lecture, London School of Economics, 9 October 2012. 3P.


pages: 453 words: 117,893

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low-wage service sector, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Minsky Conference on the State of the US and World Economies – ‘Meeting the Challenges of the Financial Crisis’; www.frbsf.org/our-district/press/presidents-speeches/yellen-speeches/2009/april/yellen-minsky-meltdown-central-bankers/ 23.  Ibid. 24.  Allen, Irving Fisher, p. 9. 6 – John Maynard Keynes: To Invest or Not to Invest? 1.    John Maynard Keynes, 1936, The General Theory of Employment, Interest and Money, London: Palgrave Macmillan, p. 129. 2.    Ibid. 3.    John Maynard Keynes, 1963 [1931], ‘Economic Possibilities for Our Grandchildren’, in Essays in Persuasion, New York: W. W. Norton, p. 373. 4.    John Maynard Keynes, 1971–89, The Collected Writings of John Maynard Keynes, 30 vols., ed. Elizabeth Johnson and Donald Moggridge, vol. XII, Economic Articles and Correspondence: Investment and Editorial, Cambridge: Cambridge University Press, p. 109. 5.    Robert Skidelsky, 2003, John Maynard Keynes 1883–1946: Economist, Philosopher, Statesman, New York: Penguin, p. 53. 6.    

Torsten Persson, Singapore: World Scientific, pp. 61–126 Keynes, John Maynard, 1924, ‘Alfred Marshall, 1842–1924’, Economic Journal, 34(135), pp. 311–72 ________, 1931, ‘The Pure Theory of Money: A Reply to Dr Hayek’, Economica, 34, pp. 387–97 ________, 1936, The General Theory of Employment, Interest and Money, London: Palgrave Macmillan ________, 1937, ‘The General Theory of Employment’, Quarterly Journal of Economics, 51(2), pp. 209–23 ________, 1963 [1931], ‘Economic Possibilities for Our Grandchildren’, in Essays in Persuasion, New York: W. W. Norton ________, 1971–89, The Collected Writings of John Maynard Keynes, 30 vols., ed. Elizabeth Johnson and Donald Moggridge, Cambridge: Cambridge University Press King, John E., 2013, David Ricardo, Basingstoke: Palgrave Macmillan Krugman, Paul, 1998, ‘The Hangover Theory’, Slate, 4 December; www.slate.com/articles/business/the_dismal_science/1998/12/the_hangover_theory.html Lucas, Robert E., Jr., 1988, ‘On the Mechanics of Economic Development’, Journal of Monetary Economics, 22(1), pp. 3–42 Marshall, Alfred, 1890, Principles of Economics, vol.

Fisher was at the vanguard of modern economics, essentially inspiring the leading central bankers who were at the helm when the entire banking system was on the brink of collapse. There is no doubt his thinking continues to remain relevant today. 6 John Maynard Keynes: To Invest or Not to Invest? Few questions have been as prominent since the banking crash: should the British and European governments have cut public spending and adopted austere policies in the aftermath of the 2008 financial crisis? In another parallel to the 1929 crash, this was also the question debated in Britain in the 1930s, which launched the Keynesian revolution in economics. John Maynard Keynes advocated government spending in a sharp break with neoclassical economics that eschewed the active use of fiscal policy in response to a downturn. Keynes gave an illustration: If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again … there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is.1 Recognizing it’s not ideal, but necessary, he adds: ‘It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.’2 Today the debate is again over the role of government spending while policymakers contend with high levels of public debt amidst a sluggish recovery in the aftermath of the worst financial crisis since the 1930s.


pages: 374 words: 113,126

The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Minsky Conference on the State of the US and World Economies – ‘Meeting the Challenges of the Financial Crisis’; www.frbsf.org/our-district/press/presidents-speeches/yellen-speeches/2009/april/yellen-minsky-meltdown-central-bankers/ 23. Ibid. 24. Allen, Irving Fisher, p. 9. Chapter 6 – John Maynard Keynes: To Invest or Not to Invest? 1. John Maynard Keynes, 1936, The General Theory of Employment, Interest and Money, London: Palgrave Macmillan, p. 129. 2. Ibid. 3. John Maynard Keynes, 1963 [1931], ‘Economic Possibilities for Our Grandchildren’, in Essays in Persuasion, New York: W. W. Norton, p. 373. 4. John Maynard Keynes, 1971–89, The Collected Writings of John Maynard Keynes, 30 vols., ed. Elizabeth Johnson and Donald Moggridge, vol. XII, Economic Articles and Correspondence: Investment and Editorial, Cambridge: Cambridge University Press, p. 109. 5. Robert Skidelsky, 2003, John Maynard Keynes 1883–1946: Economist, Philosopher, Statesman, New York: Penguin, p. 53. 6. Ibid., p. 53. 7.

Torsten Persson, Singapore: World Scientific, pp. 61–126 Keynes, John Maynard, 1924, ‘Alfred Marshall, 1842–1924’, Economic Journal, 34(135), pp. 311–72 ———, 1931, ‘The Pure Theory of Money: A Reply to Dr Hayek’, Economica, 34, pp. 387–97 ———, 1936, The General Theory of Employment, Interest and Money, London: Palgrave Macmillan ———, 1937, ‘The General Theory of Employment’, Quarterly Journal of Economics, 51(2), pp. 209–23 ———, 1963 [1931], ‘Economic Possibilities for Our Grandchildren’, in Essays in Persuasion, New York: W. W. Norton ———, 1971–89, The Collected Writings of John Maynard Keynes, 30 vols., ed. Elizabeth Johnson and Donald Moggridge, Cambridge: Cambridge University Press King, John E., 2013, David Ricardo, Basingstoke: Palgrave Macmillan Krugman, Paul, 1998, ‘The Hangover Theory’, Slate, 4 December; www.slate.com/articles/business/the_dismal_science/1998/12/the_hangover_theory.html Lucas, Robert E., Jr., 1988, ‘On the Mechanics of Economic Development’, Journal of Monetary Economics, 22(1), pp. 3–42 Marshall, Alfred, 1890, Principles of Economics, vol.

Fisher was at the vanguard of modern economics, essentially inspiring the leading central bankers who were at the helm when the entire banking system was on the brink of collapse. There is no doubt his thinking continues to remain relevant today. CHAPTER 6 John Maynard Keynes: To Invest or Not to Invest? Few questions have been as prominent since the banking crash: should the British and European governments have cut public spending and adopted austere policies in the aftermath of the 2008 financial crisis? In another parallel to the 1929 crash, this was also the question debated in Britain in the 1930s, which launched the Keynesian revolution in economics. John Maynard Keynes advocated government spending in a sharp break with neoclassical economics that eschewed the active use of fiscal policy in response to a downturn. Keynes gave an illustration: If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again … there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is.1 Recognizing it’s not ideal, but necessary, he adds: ‘It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.’2 Today the debate is again over the role of government spending while policymakers contend with high levels of public debt amidst a sluggish recovery in the aftermath of the worst financial crisis since the 1930s.


Money and Government: The Past and Future of Economics by Robert Skidelsky

anti-globalists, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, Basel III, basic income, Ben Bernanke: helicopter money, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, constrained optimization, Corn Laws, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Graeber, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, Donald Trump, Eugene Fama: efficient market hypothesis, eurozone crisis, financial deregulation, financial innovation, Financial Instability Hypothesis, forward guidance, Fractional reserve banking, full employment, Gini coefficient, Growth in a Time of Debt, Hyman Minsky, income inequality, incomplete markets, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, law of one price, liberal capitalism, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, market clearing, market friction, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, mobile money, Mont Pelerin Society, moral hazard, mortgage debt, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, placebo effect, price stability, profit maximization, quantitative easing, random walk, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, rising living standards, risk/return, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, shareholder value, short selling, Simon Kuznets, structural adjustment programs, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, trade liberalization, value at risk, Washington Consensus, yield curve, zero-sum game

M. (1945), Letter to S. G. Macfarlane, 5 June 1945, reproduced in the Collected Writings of John Maynard Keynes, Vol. XXV II, 1980. Cambridge: Cambridge University Press for the Royal Economic Society. Keynes, J. M. (1971 (1923)), The Collected Writings of John Maynard Keynes (IV) Tract on Monetary Reform. London: Macmillan. Keynes, J. M. (1971 (1930a)), The Collected Writings of John Maynard Keynes (V) A Treatise on Money: The Pure Theory of Money. London: Macmillan. 442 Bi bl io g r a p h y Keynes, J. M. (1971 (1930b)), The Collected Writings of John Maynard Keynes (VI) A Treatise on Money: The Applied Theory of Money. London: Macmillan. Keynes, J. M. (1973a (1936)), The Collected Writings of John Maynard Keynes (VII) The General Theory of Employment, Interest and Money. Cambridge: Cambridge University Press for the Royal Economic Society.

M. (1973b), The Collected Writings of John Maynard Keynes (XIII) The General Theory and After, Part I: Preparation. Cambridge: Cambridge University Press for the Royal Economic Society. Keynes, J. M. (1973c), The Collected Writings of John Maynard Keynes (XIV) The General Theory and After, Part II: Defence and Development. Cambridge: Cambridge University Press for the Royal Economic Society. Keynes, J. M. (1978), The Collected Writings of John Maynard Keynes (IX) Essays in Persuasion. Cambridge: Cambridge University Press for the Royal Economic Society. Keynes, J. M. (1979), The Collected Writings of John Maynard Keynes (XXIX) The General Theory and After: A Supplement. Cambridge: Cambridge University Press for the Royal Economic Society. Keynes, J. M. (1980a), The Collected Writings of John Maynard Keynes (XXV) Activities 1940–1944: Shaping the Post-War World, The Clearing Union.

Cambridge: Cambridge University Press for the Royal Economic Society. Keynes, J. M. (1980b), The Collected Writings of John Maynard Keynes (XXVII) Activities 1940–1946, Shaping the Post-War World: Employment and Commodities. Cambridge: Cambridge University Press for the Royal Economic Society. Keynes, J. M. (1981), The Collected Writings of John Maynard Keynes (XIX) Activities 1922–1929: The Return to Gold and Industrial Policy. Cambridge: Cambridge University Press for the Royal Economic Society. Keynes, J. M. (1982), The Collected Writings of John Maynard Keynes (XXI) Activities 1931–1939: World Crises and Policies in Britain and America. Cambridge: Cambridge University Press for the Royal Economic Society . Keynes, J. M. (1983), The Collected Writings of John Maynard Keynes (XI) Economic Articles and Correspondence: Academic. Cambridge: Cambridge University Press for the Royal Economic Society.


pages: 290 words: 76,216

What's Wrong with Economics? by Robert Skidelsky

"Robert Solow", additive manufacturing, agricultural Revolution, Black Swan, Bretton Woods, business cycle, Cass Sunstein, central bank independence, cognitive bias, conceptual framework, Corn Laws, corporate social responsibility, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, disruptive innovation, Donald Trump, full employment, George Akerlof, George Santayana, global supply chain, global village, Gunnar Myrdal, happiness index / gross national happiness, hindsight bias, Hyman Minsky, income inequality, index fund, inflation targeting, information asymmetry, Internet Archive, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labour market flexibility, loss aversion, Mark Zuckerberg, market clearing, market friction, market fundamentalism, Martin Wolf, means of production, moral hazard, paradox of thrift, Pareto efficiency, Paul Samuelson, Philip Mirowski, precariat, price anchoring, principal–agent problem, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, shareholder value, Silicon Valley, Simon Kuznets, survivorship bias, technoutopianism, The Chicago School, The Market for Lemons, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, transaction costs, transfer pricing, Vilfredo Pareto, Washington Consensus, Wolfgang Streeck, zero-sum game

Georgescu-Roegen, Nicholas (1971). The Entropy Law and the Economic Process, Princeton: Princeton University Press. Harrod, Roy (1958). ‘The Possibility of Economic Satiety’, in Problems of US Economic Development, Vol. 1, New York: Washington Committee for Economic Development. Hirsch, Fred (1976). Social Limits to Growth, Cambridge, MA: Harvard University Press. Keynes, John Maynard (2015 [1930]). ‘Economic Possibilities for our Grandchildren’, in Robert Skidelsky (ed.), The Essential Keynes, Penguin Classics. Marshall, Alfred (1890). Principles of Economics, London: Macmillan. McConnell, Campbell, Brue, Stanley and Flynn, Sean (2009). Macroeconomics, New York: McGraw-Hill. Menger, Carl (2007 [1871]). Principles of Economics, Online: Mises Institute. Packard, Vance (1957). The Hidden Persuaders, New York: D. McKay Co.

A History of Economics: The Past as Present, London: Penguin. Hayek, Friedrich (1937). ‘Economics and Knowledge’, Economica, New Series, Vol. 4 (13): 33–54. Jevons, W. Stanley (1987 [1871]). The Theory of Political Economy, London: Macmillan. Kaldor, Nicholas (1939). ‘Welfare Proposition of Economics and Interpersonal Comparisons of Utility’, The Economic Journal, Vol. 49 (195): 549–52. Keynes, John Maynard (2015 [1930]). ‘Economic Possibilities for Our Grandchildren’, in Robert Skidelsky (ed.), The Essential Keynes, Penguin Classics. Layard, Richard (2005). Happiness: Lessons from a New Science, London: Penguin. Locke, John (1764 [1689]). Two Treatises of Government, London: A. Millar et al. Marx, Karl (1887 [1867]). Capital, Vol. 1, Moscow: Progress Publishers. Marx, Karl and Engels, Friedrich (2004 [1848]). Manifesto of the Communist Party.

I have taken advantage of writing the book to repair omissions from the much shorter lectures, and also to reconsider some of the things I said, following comments and criticisms the lectures received. In what way am I qualified to talk about these matters? My first degree was in history; my Ph.D was in politics. I was always interested in the economic aspects of history and politics, but when I decided to write about the great economist John Maynard Keynes, I quickly realised that it was not enough to have a nodding acquaintance with economics. So I studied the subject seriously, wrote three volumes on Keynes, and ended up with a chair in political economy in the economics department of Warwick University. These personal facts have a bearing on what follows, in two related ways. First, I come to economics with a strong historical bias – the bias, that is, to see economic doctrines in context.


pages: 322 words: 77,341

I.O.U.: Why Everyone Owes Everyone and No One Can Pay by John Lanchester

asset-backed security, bank run, banking crisis, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black-Scholes formula, Blythe Masters, Celtic Tiger, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, diversified portfolio, double entry bookkeeping, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, George Akerlof, greed is good, hedonic treadmill, hindsight bias, housing crisis, Hyman Minsky, intangible asset, interest rate swap, invisible hand, Jane Jacobs, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, Kickstarter, laissez-faire capitalism, light touch regulation, liquidity trap, Long Term Capital Management, loss aversion, Martin Wolf, money market fund, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, negative equity, new economy, Nick Leeson, Norman Mailer, Northern Rock, Own Your Own Home, Ponzi scheme, quantitative easing, reserve currency, Right to Buy, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, South Sea Bubble, statistical model, The Great Moderation, the payments system, too big to fail, tulip mania, value at risk

Morris, The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash. 3 There’s a chilling account of it in his book The Ascent of Money, chap. 6. 4 www.fsa.gov.uk/pubs/other/turner_review.pdf. 5 Posner, A Failure of Capitalism, xii. 6 Quoted by Gillian Tett in Fool’s Gold, p. 97. 7 Simon Johnson, “The Quiet Coup,” op cit. 8 Paul Krugman, “Out of the Shadows,” The New York Times, June 18, 2009 9 Financial Times, June 12, 2009 10 You can, amazingly, listen to this meeting in its entirety at The New York Times’s website. 11 “The Reckoning,” The New York Times, October 3, 2008. 12 Michael Lewis and David Einhorn, “The End of the Financial World as We Know It,” The New York Times, January 4, 2009. 13 Testimony to the House financial services committee. 4 February 2009. 14 Richard Posner, A Failure of Capitalism, p. 268. 15 “AIG Trail Leads to London Casino,” The Daily Telegraph, October 18, 2008. 16 Quoted by Richard Bitner in Confessions of a Subprime Lender: An Insider’s Tale of Greed, Fraud, and Ignorance, p. 117. 17 Ibid., p. 112. 18 Charles R. Morris, Trillion Dollar Meltdown, p. 77. CHAPTER SEVEN: THE BILL 1 John Maynard Keynes, “Economic Possibilities for Our Grandchildren.” From Essays in Persuasion. Volume IX of the Collected Writings of John Maynard Keynes, pp. 324 et seq. 2 Meena Thiruvengadam, U.S. Bailouts So Far Total $2.98 Trillion, Official Says The Wall Street Journal, March 31, 2009. 3 www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks. 4 Interview with Bloomberg Television, 20 January 2009. INDEX accounting, 26, 28, 106, 231 Against the Gods (Bernstein), 149 AIG: bailout of, 39, 76–78 in CDS market, 75–78, 201 aircraft industry, 227 Alternative Mortgage Transaction Parity Act (AMPTA), 100 Animal Spirits (Akerlof and Shiller), 145n Annie Hall, 1–2 Apple, 34 appraisals, 128 arbitrage, 54–55 arms manufacturing, 200 Arthur Andersen, 106 Asano, Yukio, 18 asset price bubble, 176–77 assets, 10, 25–42, 106, 176 in balance sheets, 25–34, 37–38, 70, 120 banks and, 25, 32–42, 70, 74, 120, 194 of businesses, 29–30, 34 derivatives and, 38, 48–50, 52, 57–58, 120, 205–6 housing and, 96, 126, 130, 176–77 intangible, 30 leverage and, 35–36, 41 liquidity and, 28–29 risk and, 37, 146, 165 toxic, 37–38, 42, 75, 165, 189 ATMs, 7–9, 176 Austen Riggs Center, 140–41 automobiles, automobile industry, 1–2, 24, 40, 134, 197, 222 in balance sheets, 27–28 stocks in, 148–49 balance sheets, 25–35 banks and, 25–34, 37–39, 41–42, 70, 120, 205–7 of businesses, 29–34, 37, 106 of individuals, 27–29, 35 Baltimore, Md., 83–86, 127, 129, 163 Bankers Trust, 150 banking, bankers, banks, 19–22, 24–43, 169, 171–78, 216–20, 222–30 assets and, 25, 32–42, 70, 74, 120, 194 ATMs of, 7–9, 176 bailouts of, 32, 39–41, 77, 120, 204, 212, 219–20, 225–26 balance sheets and, 25–34, 37–39, 41–42, 70, 120, 205–7 of Canada, 116, 211–12 central, 36, 40, 52, 92, 102, 142, 167, 172–78, 180–81, 183, 189, 194–95, 206 check-clearing system of, 33 collapses of, 5, 39, 75, 78, 94, 180, 194, 204, 206, 225 credit and, 37, 41, 43, 209, 211 customer deposits of, 25, 27, 31–34, 74, 187, 224 derivatives and, 20, 51–54, 57–58, 63–71, 74–75, 77, 79, 115–17, 120–21, 132, 183–84, 200, 205–6, 211 economic centrality of, 24–26, 41 of Europe, 8, 35–36, 40, 51, 77, 83, 92, 120, 227 financial industry’s ascent and, 20–21 Glass-Steagall Act on, 64–65, 187–88, 200 holding, 40 housing and, 83–84, 86, 89, 91–95, 102, 126–27, 129–31, 174, 177, 194, 216–17 Iceland’s economic crisis and, 9–12, 24, 40 incentives and bonuses of, 19, 37, 76–78, 206–8, 224, 228 interest rates and, 24, 172–78 investment, 19, 39–40, 65, 77–78, 186–87, 163, 190, 200, 224–25, 227–28 lending of, 22, 24, 27, 33–36, 41–42, 58–60, 67, 69–70, 74, 83–84, 91–94, 102, 117, 127, 129–30, 143, 146, 165, 187, 216–17, 229 leverage of, 35–36, 41–42, 70, 190 mathematicization of, 53–54 narrow, 224–25 nationalization of, 39–40, 228–30 nonbank, 22, 201, 205, 224 paying the bill and, 219–20, 223 regulation and, 21, 33, 180–91, 194–96, 199–200, 202, 204–5, 208, 211, 223–27 risk and, 19, 34–37, 41, 133, 135–36, 143, 150–54, 156–57, 160, 165–66, 174, 187–88, 191–95, 202, 204–7, 216, 224, 226, 228, 230 of U.K., 5, 11, 32–36, 38–40, 51–54, 76–77, 89, 94, 120, 146, 180, 194–96, 199, 202, 204–6, 211–12, 217, 227–28 of U.S., 36–37, 39–40, 43, 63–71, 73, 75, 77–78, 84, 116, 120–21, 127, 150, 152, 163, 183, 185, 190, 195, 204, 211–12, 219–20, 225, 227–28 wish list of, 186–87, 195 zombie, 43, 229 banking-and-credit crisis, 192–96, 215–21, 225–28, 231 aftermath of, 215–17 bases of, 201–2 causes of, 182–83, 186, 196, 205–7, 217 economists on, 192–94 failure in forecasting of, 193–94, 211 journalists on, 192–93 profits in, 78, 227–28 and regulation, 182–83, 194–96, 202, 205, 211, 225–26 and risk, 192–95, 202, 205–7, 216 Bank of America, 39 Bank of England, 36, 52, 102, 167, 177–78, 206 and banking-and-credit crisis, 194–95 and interest rates, 178, 180 and regulation, 180–81, 195 Barclays, Barclays Bank, 11, 35–36, 77, 146, 227 Baring, Peter, 52 Barings Bank, 51–52, 54, 180 Barofsky, Neil, 219 Basel rules, 154, 208 derivatives and, 67–68, 120, 183 Bear Stearns, 39, 190 Belair-Edison Community Association, 127 Belgium, 40 Bell, Madison Smartt, 89 bell curve, 154–56, 160 Berlin Wall, fall of, 12, 16, 18, 23 Bernstein, Peter, 149 “Big Bang,” 22, 195–96, 200–201 Bitner, Richard, 124–27, 131 Black, Conrad, 59 Black, Fischer, 45, 47–48, 147 Black-Scholes formula, 48, 54, 116–17, 151 Blank, Victor, 40 BNP Paribas, 36, 77 bond market, bonds, 20, 22–23, 58–59, 73, 107–12 Broad Index Secured Trust Offering (BISTRO), 70–71, 121 corporate, 154, 210 derivatives and, 58, 63–67, 112, 114, 118–19, 210–11 of governments, 29–30, 61–62, 103, 109, 118, 144, 176–77, 208 incentives and, 209–11 investing and, 62–63, 102–3, 107–8, 111, 208–9 investment grade, 62 junk, 42, 62, 208 prices and, 61, 63, 102–3, 108–10, 144 in raising capital, 59, 61–63, 102–3 ratings of, 61–63, 114, 118–19, 208–11 risk and, 61–63, 103, 118, 144, 154, 208 Russia’s default and, 55–56, 162, 164–65 bonuses, 19, 37, 76–78, 207, 218, 224, 228 Bradford & Bingley, 40 Bragason, Valgarður, 10–11 British Airways, 199 Brown, Gordon, 12, 33, 88, 178 Buffett, Warren, 150 credit rating of, 123, 125 derivatives and, 56–57, 78 Bush, George W., 2, 78, 99, 142, 203, 219 regulation and, 19–20, 191, 195 businesses, 15, 58–63, 105–6, 187, 198–99, 221 balance sheets of, 29–34, 37, 106 banks and, 195, 229 bonds and, 59, 61–63, 102–3, 154, 208, 210 derivatives and, 112, 114, 153 lending to, 41–42, 60, 108 offshore, 70, 72 regulation and, 183, 195 risk and, 37, 145, 150–51, 153–54, 195 Canada, banks of, 116, 211–12 capitalism, 12–19, 116 banks and, 19, 25, 182–83, 202, 218, 228, 231 communism vs., 12, 16–17 failure of, 228, 230 free-market, 13–19, 21, 23–24, 96, 105n, 143, 173–75, 184, 192, 196, 202–4, 230–32 in Hong Kong, 13–14 laissez-faire, 142–43, 173, 182–83, 189, 191, 195–96, 202, 211–12 Marxist analysis of, 15–16 regulation and, 182, 192 as secular religion, 202–4 success and spread of, 14–15, 18–19, 21, 23–24 Carville, James, 22–23 cash ratios, 25 Cassano, Joseph, 201 check-clearing systems, 33 Chicago Board Options Exchange, 48 Chicago Mercantile Exchange, 47 China, People’s Republic of, 115, 124 economic boom in, 3–4, 14, 108–9 Hong Kong and, 13–14 U.S. investment of, 109, 176–77 Cisneros, Henry, 99 Citigroup, 120, 163, 219–20, 227 Citron, Robert, 51 City of London, 32, 195–97, 199–202, 217–18 and banking-and-credit crisis, 205–6 and Big Bang, 195–96, 200–201 derivatives and, 56–57, 79, 201 and financial vs. industrial interests, 197, 199 ideological hegemony of, 21–23 Wimbledonization of, 195–96 Civil Justice Network, 85, 128–29, 131 Cleveland, Ohio, 83 Clinton, Bill, 22, 43, 107 housing and, 99–100 regulation and, 19–20 Coggan, Philip, 25 cognitive illusions, 141–42 Cold War, 201–2 end of, 16, 18, 21, 164 collateralized debt obligations (CDOs), 183, 201, 210–12 bonds and, 112, 114, 118–19, 210–11 of CDOs, 119, 206 Gaussian copula function and, 116–17, 157–60, 163 mathematics and, 115–16 mortgages and, 75–76, 112–22, 132, 157, 159–60, 172, 210 risk and, 114–15, 117–22, 158–60, 163, 167, 212 securitization and, 113–14, 11719, 122 shortage of borrowers for, 121–22 tranching and, 117–18, 122 commodities, 227 derivatives and, 47, 49n, 51–52, 184 prices of, 3–4, 107–8, 148–49 Commodity Futures Modernization Act, 184 communism, 12, 16–18, 23 competition, 58, 96, 105n, 203, 226–27 regulation and, 187–88, 226 Confessions of a Subprime Lender (Bitner), 124, 127 Congress, U.S., 77, 100, 204 regulation and, 184–86 risk and, 142–43, 164–66 conservatism, housing and, 98 correlation, correlations: CDOs and, 115–16, 158, 167 risk and, 74, 148–49, 158–59, 165, 167 credit, 8, 169–73 banks and, 24–26, 37, 41, 43, 209, 211 bubbles in, 42, 60, 109, 170, 176, 216–17, 221, 223 CDOs and, 114–15, 119–20, 172 crunch in, 37, 41, 43, 54n, 77, 84–86, 92–93, 94n, 136, 163–64, 169, 171–73, 182, 193, 201–2, 215–16, 218–19 histories and ratings on, 85, 100, 123–26, 158, 163, 165, 208–11 housing and, 84–86, 92–93, 94n, 100, 109, 112, 125, 129–30, 132, 163–64 Iceland’s economic crisis and, 10–12 interest rates and, 172–73, 175, 209 risk and, 136, 158, 165 see also banking-and-credit crisis Crédit Agricole, 36 credit cards, 27, 217 credit ratings and, 123–24 Iceland’s economic crisis and, 9, 11–12 risk and, 158–59, 163 credit default swaps (CDSs), 20, 63, 65–80, 117, 158–59, 183–86 AIG and, 75–78, 201 attractive aspects of, 72–74 examples of, 57–58 Exxon deal and, 67–70, 121 over-the-counter trading of, 184–85, 201 regulation and, 68, 70, 73, 184–86 risk and, 58, 66–70, 72–75, 78–80, 212 securitized bundles of, 69–70, 74 streamlining and industrializing of, 68–69 unfortunate side effect of, 74–75 Credit Suisse, 36, 227 Cuomo, Andrew, 99 Cutter family, 126–27 Darling, Alistair, 172, 220 debt, debts, 27–29, 34, 59–63, 118, 172n, 179, 216, 229 in balance sheets, 27–28, 30–31 benefits of, 59–61 bonds and, 59, 61–63, 208, 210 credit and, 123–26, 221 derivatives and, 52, 67, 69–72 housing and, 93, 100, 132, 176 paying the bill and, 220–22 personal, 221–22 regulation and, 181, 190 Russian default on, 55–56, 162, 164–65 see also collateralized debt obligations default, defaults, default rates, 162–65 CDOs and, 114–15 on mortgages, 159–60, 163, 165, 229 risk and, 154, 159–60, 163 of Russia, 55–56, 162, 164–65 see also credit default swaps Demchak, William, 69 democracy, democracies, 15–18, 108–9, 179, 213 free-market capitalism and, 15, 17, 23 housing and, 87, 98 DePastina, Anthony, 85 Depository Institutions Deregulation and Monetary Control Act (DIDMCA), 100 deregulation, see regulation, deregulation derivatives, 45–58, 63–80, 86, 210–12 in balance sheets, 30–31, 70 banks and, 20, 51–54, 57–58, 63–71, 74–75, 77, 79, 115–17, 120–21, 132, 183–84, 200, 205–6, 211 Black-Scholes formula and, 48, 54, 116–17, 151 bonds and, 58, 63–67, 112, 114, 118–19, 210–11 Buffett and, 56–57, 78 and City of London, 56–57, 79, 201 complexity of, 52–54, 56–57 Enron and, 56, 105–6, 185 futures and, 46–47, 49n, 51–52, 54, 184 Greenspan on, 166, 183–84 in history, 45–48, 147 mathematics and, 47–48, 52–54, 115–17, 166 offshore companies and, 70, 72 options and, 46–47, 50–52, 151, 174, 184 over-the-counter trading of, 184–85, 201, 205–6 prices and, 38, 46–52, 54, 56, 75, 158–59, 166 regulation and, 68, 70, 73, 153, 183–86, 200–201 risk and, 46–47, 49–52, 54–55, 57–58, 66–75, 78–80, 114–15, 117–22, 151, 153, 158–60, 163, 166–67, 184–85, 205, 212 size of market in, 48, 56, 80, 117, 201 see also collateralized debt obligations; credit default swaps Detroit, Mich., 81–82 Deutsche Bank, 36, 77, 83, 227 diversification, 146–48, 177 dividends, 101, 147–48 Doctorow, E.

Almost everyone in the West lives a quality and length of life which would have been the envy of a pharaoh or a Roman emperor and which most of our ancestors, and most of the populations of the rest of the world, would swap for their own prospects in an eye blink. It’s an amazing state of affairs—and one which, broadly speaking, was predicted by the greatest economist who ever lived, John Maynard Keynes, in an essay he wrote in 1930, “Economic Possibilities for our Grandchildren.” He was writing in the immediate aftermath of the great Crash (which incidentally, in his capacity as an investor, cost him a packet), but he wasn’t pessimistic; indeed, he thought the general contemporary climate of pessimism was overdone. Britain had got steadily richer for decades and was going to continue to do so. Keynes, entertainingly, pinpointed the initial cause of British prosperity as Sir Francis Drake’s theft of gold from the Spanish in 1580.

., 77, 100, 204 regulation and, 184–86 risk and, 142–43, 164–66 conservatism, housing and, 98 correlation, correlations: CDOs and, 115–16, 158, 167 risk and, 74, 148–49, 158–59, 165, 167 credit, 8, 169–73 banks and, 24–26, 37, 41, 43, 209, 211 bubbles in, 42, 60, 109, 170, 176, 216–17, 221, 223 CDOs and, 114–15, 119–20, 172 crunch in, 37, 41, 43, 54n, 77, 84–86, 92–93, 94n, 136, 163–64, 169, 171–73, 182, 193, 201–2, 215–16, 218–19 histories and ratings on, 85, 100, 123–26, 158, 163, 165, 208–11 housing and, 84–86, 92–93, 94n, 100, 109, 112, 125, 129–30, 132, 163–64 Iceland’s economic crisis and, 10–12 interest rates and, 172–73, 175, 209 risk and, 136, 158, 165 see also banking-and-credit crisis Crédit Agricole, 36 credit cards, 27, 217 credit ratings and, 123–24 Iceland’s economic crisis and, 9, 11–12 risk and, 158–59, 163 credit default swaps (CDSs), 20, 63, 65–80, 117, 158–59, 183–86 AIG and, 75–78, 201 attractive aspects of, 72–74 examples of, 57–58 Exxon deal and, 67–70, 121 over-the-counter trading of, 184–85, 201 regulation and, 68, 70, 73, 184–86 risk and, 58, 66–70, 72–75, 78–80, 212 securitized bundles of, 69–70, 74 streamlining and industrializing of, 68–69 unfortunate side effect of, 74–75 Credit Suisse, 36, 227 Cuomo, Andrew, 99 Cutter family, 126–27 Darling, Alistair, 172, 220 debt, debts, 27–29, 34, 59–63, 118, 172n, 179, 216, 229 in balance sheets, 27–28, 30–31 benefits of, 59–61 bonds and, 59, 61–63, 208, 210 credit and, 123–26, 221 derivatives and, 52, 67, 69–72 housing and, 93, 100, 132, 176 paying the bill and, 220–22 personal, 221–22 regulation and, 181, 190 Russian default on, 55–56, 162, 164–65 see also collateralized debt obligations default, defaults, default rates, 162–65 CDOs and, 114–15 on mortgages, 159–60, 163, 165, 229 risk and, 154, 159–60, 163 of Russia, 55–56, 162, 164–65 see also credit default swaps Demchak, William, 69 democracy, democracies, 15–18, 108–9, 179, 213 free-market capitalism and, 15, 17, 23 housing and, 87, 98 DePastina, Anthony, 85 Depository Institutions Deregulation and Monetary Control Act (DIDMCA), 100 deregulation, see regulation, deregulation derivatives, 45–58, 63–80, 86, 210–12 in balance sheets, 30–31, 70 banks and, 20, 51–54, 57–58, 63–71, 74–75, 77, 79, 115–17, 120–21, 132, 183–84, 200, 205–6, 211 Black-Scholes formula and, 48, 54, 116–17, 151 bonds and, 58, 63–67, 112, 114, 118–19, 210–11 Buffett and, 56–57, 78 and City of London, 56–57, 79, 201 complexity of, 52–54, 56–57 Enron and, 56, 105–6, 185 futures and, 46–47, 49n, 51–52, 54, 184 Greenspan on, 166, 183–84 in history, 45–48, 147 mathematics and, 47–48, 52–54, 115–17, 166 offshore companies and, 70, 72 options and, 46–47, 50–52, 151, 174, 184 over-the-counter trading of, 184–85, 201, 205–6 prices and, 38, 46–52, 54, 56, 75, 158–59, 166 regulation and, 68, 70, 73, 153, 183–86, 200–201 risk and, 46–47, 49–52, 54–55, 57–58, 66–75, 78–80, 114–15, 117–22, 151, 153, 158–60, 163, 166–67, 184–85, 205, 212 size of market in, 48, 56, 80, 117, 201 see also collateralized debt obligations; credit default swaps Detroit, Mich., 81–82 Deutsche Bank, 36, 77, 83, 227 diversification, 146–48, 177 dividends, 101, 147–48 Doctorow, E. L., 64 Dorgan, Byron, 188 dot-com bust, 3, 104–7, 109, 142, 175 Dow Jones Industrial Average, 152 Drake, Sir Francis, 214 Dunfermline Building Society, 40 Dutch tulip bubble, 47, 104, 136 Ebbers, Bernie, 105 “Economic Possibilities for Our Grandchildren” (Keynes), 213–15 economics, economy, economists: booms in, 2–4, 14, 16, 23, 81, 108–9, 214, 216 contractions in, 170–71, 222–23 crises in, 4–6, 9–12, 16, 23–24, 39–40, 57, 73, 76–79, 142, 150–52, 160–62, 164–67, 170–72, 175–76, 182–83, 185–87, 189, 191–96, 199, 201–2, 205–7, 211, 213, 215–21, 223, 225–28, 230–31 ignorance of, 5–6, 23 liberalism in, 136 rationalism in, 136–38 Economist, The, 3, 170, 193, 202–3 education, 4–5, 9, 13, 17, 21, 198, 200, 217, 222 efficient portfolio, 149 Elizabeth I, Queen of Great Britain, 214 Ellis, William Webb, 201 employment, employees, 8, 28, 40, 51, 171, 179, 203–4, 217 banks and, 206, 229 economic contractions and, 222–23 Enron and, 106, 226 and financial vs. industrial interests, 197–98 free-market capitalism and, 15–17, 19 housing and, 86, 88–89, 94, 96–97, 99–100, 126–27, 131, 163 interest rates and, 102, 172–73, 221 Marxist analysis of, 15–16 paying the bill and, 221–23 Enron: collapse of, 105–7, 175, 226, 231 derivatives and, 56, 105–6, 185 equality, inequality, 15–17, 21, 164 in free-market capitalism, 15–16, 23 in mortgage market, 99–101 equity, 27–31, 34–37, 41–42, 55, 190 leverage and, 35, 41, 60 negative, 28–29, 42 return on (ROE), 36–37 selling of, 58–59 Europe, European Union, 177, 180, 191 banks of, 8, 35–36, 40, 51, 77, 83, 92, 120, 227 comparisons between U.S. and, 17 contracting economies in, 222–23 housing in, 40, 83–84, 91–95, 110 European Bank for Reconstruction and Development (EBRD), 68–70 Exxon, 67–70, 121 Failure of Capitalism, A (Posner), 174 fair value theory, 147–48 Fannie Mae, 39, 95, 99–100, 113, 124 Federal Reserve (Fed), 40, 102, 142, 173–74, 183, 189 Ferguson, Niall, 177 FICO scores, 123–24 films, film industry, 1–2, 198–99 finance, financial industry: favored treatment of, 19–21 gap between world of general public and, 5–6 industrial interests vs., 196–99 power of, 164 Financial Services Authority (FSA), 180–82, 194–95, 201 Financial Times, 193, 227 Flanders, Stephanie, 37 Florida, 10, 59, 83, 115 Fooled by Randomness (Taleb), 53 Fool’s Gold (Tett), 121 foreclosure rescue, 129–31 Fortis, 36, 40 Fortune, 105 4:15 report, 152 France, French, 36, 156, 229 housing in, 92–94 Nazi occupation of, 138–39 Freddie Mac, 39, 95, 99–100, 113, 124 Friedman, Thomas, 208 front running, 192 Fuld, Richard, 204, 206 funny smells, 169–73, 208, 211 and banking-and-credit crisis, 194, 201 credit crunch and, 169, 171–72 Galway’s water and, 169–71 Greenspan and, 173, 176 regulation and, 169, 192, 201, 211 futures, 46–47, 49n, 184 how they work, 47, 51–52 losing money on, 51–52, 54 Galway, 169–71 Garn–St.


pages: 573 words: 115,489

Prosperity Without Growth: Foundations for the Economy of Tomorrow by Tim Jackson

"Robert Solow", bank run, banking crisis, banks create money, Basel III, basic income, bonus culture, Boris Johnson, business cycle, carbon footprint, Carmen Reinhart, Cass Sunstein, choice architecture, collapse of Lehman Brothers, creative destruction, credit crunch, Credit Default Swap, David Graeber, decarbonisation, dematerialisation, en.wikipedia.org, energy security, financial deregulation, Financial Instability Hypothesis, financial intermediation, full employment, Growth in a Time of Debt, Hans Rosling, Hyman Minsky, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, liberal capitalism, Mahatma Gandhi, mass immigration, means of production, meta analysis, meta-analysis, moral hazard, mortgage debt, Naomi Klein, new economy, offshore financial centre, oil shale / tar sands, open economy, paradox of thrift, peak oil, peer-to-peer lending, Philip Mirowski, profit motive, purchasing power parity, quantitative easing, Richard Thaler, road to serfdom, Robert Gordon, Ronald Reagan, science of happiness, secular stagnation, short selling, Simon Kuznets, Skype, smart grid, sovereign wealth fund, Steve Jobs, The Chicago School, The Great Moderation, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, universal basic income, Works Progress Administration, World Values Survey, zero-sum game

‘Finance and economic breakdown: modelling Minsky’s “financial instability hypothesis”’. Journal of Post Keynesian Economics 17(4): 607–635. Keynes, John Maynard 1978. Collected Writings of John Maynard Keynes, vol. 17. Cambridge: Cambridge University Press. Keynes, John Maynard 1937. The Collected Writings of John Maynard Keynes, vol. 21, World Crises and Policies in Britain and America, reprinted 2012. Cambridge: Cambridge University Press. Keynes, John Maynard 1936. The General Theory of Employment, Interest and Money, reprinted 2007. London: Macmillan. Keynes, John Maynard 1930. ‘Economic possibilities for our grandchildren’. Essays in Persuasion. New York: W. W. Norton & Co. Keynes, John Maynard 1926. The End of Laissez Faire: The Economic Consequences of the Peace. London: Hogarth Press. Kierkegaard, Søren 1844.

With labour productivity continually rising, there is only one escape from this ‘productivity trap’, namely to reap the rewards in terms of reduced hours worked per employee – or in other words to share the available work amongst the workforce. So it’s perhaps not surprising to find that proposals to shorten the working week are enjoying something of a revival in recent years. In fact, the idea has a strong pedigree. In an essay entitled ‘Economic possibilities for our grandchildren’, published in the 1930s, John Maynard Keynes foresaw a time when productivity gains would allow us all to work less and spend more time with our family, our friends and our community.13 Since the time Keynes was writing, societies have indeed taken some of the labour productivity gains achieved through technology in the form of increased leisure time. Working hours across the OECD have declined by 12 per cent since 1970.

Joan Robinson, 19551 There’s something distinctly odd about our contemporary refusal to question economic growth. As early as 1848, John Stuart Mill, one of the founders of classical economics, reflected on the advantages of a ‘stationary state of population and capital’. He insisted that there would be ‘as much scope as ever for all kinds of mental culture, and moral and social progress’ within such a state.2 Keynes’ essay ‘Economic possibilities for our grandchildren’ also foresaw a time when the ‘economic problem’ would be solved and we would ‘prefer to devote our further energies to non-economic purposes’. Like Mill, Keynes saw this change as broadly positive in the sense that we would ‘once more value ends above means and prefer the good to the useful’.3 In the language of this book, Keynes and Mill were both essentially saying that prosperity without growth is not just possible but desirable.


pages: 632 words: 159,454

War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt by Kwasi Kwarteng

accounting loophole / creative accounting, anti-communist, Asian financial crisis, asset-backed security, Atahualpa, balance sheet recession, bank run, banking crisis, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, California gold rush, capital controls, Carmen Reinhart, central bank independence, centre right, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, Deng Xiaoping, discovery of the americas, Etonian, eurozone crisis, fiat currency, financial innovation, fixed income, floating exchange rates, Francisco Pizarro, full employment, German hyperinflation, hiring and firing, income inequality, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, liberal capitalism, market bubble, money: store of value / unit of account / medium of exchange, moral hazard, new economy, oil shock, plutocrats, Plutocrats, Ponzi scheme, price mechanism, quantitative easing, rolodex, Ronald Reagan, South Sea Bubble, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, The Wealth of Nations by Adam Smith, too big to fail, War on Poverty, Yom Kippur War

Chapter 10: Bretton Woods 1Peter Clarke, Keynes: The Twentieth Century’s Most Influential Economist, London, 2009, p. 81. 2Lionel Robbins quoted in Roy Harrod, The Life of John Maynard Keynes, London, 1951, p. 576. 3Sir Frederick Leith-Ross, Money Talks: Fifty Years of International Finance, London, 1968, p. 316. 4Harrod, John Maynard Keynes, p. 536. 5Stanley W. Black, A Levite among the Priests: Edward M. Bernstein and the Origins of the Bretton Woods System, Boulder, CO, 1991, pp. 39, 44. Bernstein’s comments were derived from a series of interviews he gave in Washington in November 1983. 6David Rees, Henry Dexter White: A Study in Paradox, London, 1973, p. 137. 7Barry Eichengreen, Globalizing Capital: A History of the International Monetary System, Princeton, 1996, p. 93. 8Clarke, Keynes, pp. 88–9. 9Paul Davidson, John Maynard Keynes, Basingstoke, 2007, p. 149. 10Philip Coggan, Paper Promises: Money, Debt and the New World Order, London, 2011, p. 100. 11Clarke, Keynes, p. 88. 12Barry Eichengreen, Exorbitant Privilege: The Rise and Fall of the Dollar, Oxford, 2011, p. 47. 13DNB, ‘Robert Boothby’. 14Robert Boothby, Goods or Gold?

., p. 26. 28Camplin, The Rise of the Plutocrats, p. 60. 29Saemy Japhet, Recollections from my Business Life, London, 1931, p. 114. 30DNB, ‘Ernest Cassel’. 31Cassis, City Bankers, p. 7. 32Niall Ferguson, ‘Political Risk and the International Bond Market between the 1848 Revolution and the Outbreak of the First World War’, Economic History Review, vol. 59, no. 1 (2006), pp. 70–112, at pp. 72, 91, 98. 33Alexander D. Noyes, The War Period of American Finance, 1908–1925, New York, 1926, p. 51. 34Ibid., p. 54. 35W. R. Lawson, British War Finance, 1914–1915, London, 1915, p. 6. 36Skidelsky, John Maynard Keynes: Hopes Betrayed, p. 284. 37Hartley Withers, War and Lombard Street, London, 1915, p. 1. 38Noyes, The War Period, p. 57. 39Ronald Knox, Patrick Shaw Stewart, London, 1920, pp. 99–100. 40Skidelsky, John Maynard Keynes: Hopes Betrayed, p. 290. 41Ibid. 42Knox, Shaw Stewart, p. 100. 43B. R. Mitchell, British Historical Statistics, Cambridge, 1988, pp. 601–3. 44Bernard Mallet, British Budgets, 1887–88 to 1912–13, London, 1913, p. vii. Chapter 7: Guns and Shells 1John Maynard Keynes, Collected Writings, 30 vols, London and Cambridge, 1971–89, vol. 16, p. 3. 2Ibid., p. 20, from the Morning Post, 11 August 1914. 3Ibid., p. 37, from the Morning Post, 16 October 1914. 4Ibid., p. 46, notes on French Finance, finished 6 January 1915. 5Ibid. 6Hartley Withers, War and Lombard Street, London, 1915, p. 100. 7Winston Churchill, The Speeches of Winston Churchill, ed.

Jonathan Bate, London, 1995. Shaw, George Bernard, The Intelligent Woman’s Guide to Socialism and Capitalism, London, 1929 (1st edn 1928). Shelley, Percy Bysshe, Poetical Works, ed. Thomas Hutchinson, London, 1905. Simon, William E., A Time for Truth, New York, 1978. Sisson, C. H., The Case of Walter Bagehot, London, 1972. Skidelsky, Robert, John Maynard Keynes: Fighting for Britain, 1937–1946, London, 2000. Skidelsky, Robert, John Maynard Keynes: Hopes Betrayed, 1883–1920, London, 1983. Slivinski, Stephen, Buck Wild: How Republicans Broke the Bank and Became the Party of Big Government, Nashville, 2006. Sloan, Alfred, My Life with General Motors, London, 1986 (1st edn 1963). Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, London, 2007 (1st edn 1776). Smith, Vera C., The Rationale of Central Banking, London, 1936.


Work in the Future The Automation Revolution-Palgrave MacMillan (2019) by Robert Skidelsky Nan Craig

3D printing, Airbnb, algorithmic trading, Amazon Web Services, anti-work, artificial general intelligence, autonomous vehicles, basic income, business cycle, cloud computing, collective bargaining, correlation does not imply causation, creative destruction, data is the new oil, David Graeber, David Ricardo: comparative advantage, deindustrialization, deskilling, disintermediation, Donald Trump, Erik Brynjolfsson, feminist movement, Frederick Winslow Taylor, future of work, gig economy, global supply chain, income inequality, informal economy, Internet of things, Jarndyce and Jarndyce, Jarndyce and Jarndyce, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, knowledge economy, Loebner Prize, low skilled workers, Lyft, Mark Zuckerberg, means of production, moral panic, Network effects, new economy, off grid, pattern recognition, post-work, Ronald Coase, Second Machine Age, self-driving car, sharing economy, Steve Jobs, strong AI, technoutopianism, The Chicago School, The Future of Employment, the market place, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, Turing test, Uber for X, uber lyft, universal basic income, wealth creators, working poor

We hope this book will contribute to that debate. 2 The Future of Work Robert Skidelsky A society, wrote Jan Patočka, is decadent if it encourages a decadent life, ‘a life addicted to what is inhuman by its very nature’.1 It is in this spirit that I want to explore the impact of technology on the human condition, and especially on work. Is technology making the human race redundant materially and spiritually—both as producers of wealth and producers of meaning? For an optimistic answer to this question, let me turn to John Maynard Keynes. In his 1930 essay, ‘Economic Possibilities for our Grandchildren’, Keynes thought that technological progress would produce so much extra wealth that in about 100 years or even less, we would be able to reduce working hours to just 15 a week, or 3 a day. This process, he warned, was unlikely be smooth. 1 Heretical Essays in the Philosophy of History, 97. R. Skidelsky (*) Centre for Global Studies, London, UK e-mail: skidelskyr@parliament.uk © The Author(s) 2020 R.

Economic Journal, 104(424), 648–659. Ford, M. (2015). The Rise of the Robots. Technology and the Threat of Mass Unemployment. London: Oneworld. Gorz, A. (1985). Paths to Paradise: On the Liberation from Work. London: Pluto Press. Jensen, C., & Meckling, W. (1976). Theory of the Firm: Managerial Behavior, Agency Costs, and Capital Structure. Journal of Financial Economics, 3, 305–360. Keynes, J. (1930). Economic Possibilities for Our Grandchildren. In J. Keynes (Ed.), Essays in Persuasion (pp. 358–373). London: Norton. Layton, E. (1962). Veblen and the Engineers. American Quarterly, 14(1), 64–72. Marx, K. (1977). Economic and Philosophic Manuscripts. London: Lawrence & Wishart. Mokyr, J., Vickers, C., & Zierbarth, N. (2015). The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?

Retrieved August 2, 2019, from https://yougov.co.uk/topics/lifestyle/articles-reports/2015/08/12/british-jobs-meaningless Graeber, D. (2004). Fragments of an Anarchist Anthropology. Chicago: Prickly Paradigm Press. Graeber, D. (2013). On the Phenomenon of Bullshit Jobs: A Work Rant. Strike! Magazine. Retrieved August 2, 2019, from https://strikemag.org/ bullshit-jobs/ Graeber, D. (2018). Bullshit Jobs. London: Allen Lane. Keynes, J. M. (1930). Economic Possibilities for Our Grandchildren (1930). In Essays in Persuasion. New York: Harcourt Brace. Sahlins, M. (1972/2017). Stone Age Economics. Reprint. Abingdon, Oxon and New York: Routledge Classics. Sirota, D. (2006, June 26). Mr Obama Goes to Washington. Nation. Toffler, A. (1970). Future Shock. New York: Random House. Vonnegut, K. (1952). Player Piano. New York: Delacorte Press. 17 Automation and Working Time in the UK Rachel Kay Why Discuss Working Time?


When the Money Runs Out: The End of Western Affluence by Stephen D. King

Albert Einstein, Asian financial crisis, asset-backed security, banking crisis, Basel III, Berlin Wall, Bernie Madoff, British Empire, business cycle, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, fixed income, floating exchange rates, full employment, George Akerlof, German hyperinflation, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, market clearing, mass immigration, moral hazard, mortgage debt, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

, John F. Kennedy School of Government, Harvard University, Cambridge, MA, Feb. 2001 Keynes, J. M. ‘The Economic Consequences of Mr Churchill’, in Essays in Persuasion, Norton, New York, 1963 275 4099.indd 275 29/03/13 2:23 PM When the Money Runs Out Keynes, J. M. ‘Economic Possibilities for Our Grandchildren’, in Essays in Persuasion, Norton, New York, 1963 Keynes, J. M. ‘The Economy Bill (Sept. 19, 1931)’, in Essays in Persuasion, Norton, New York, 1963 Keynes, J. M. ‘Einstein’, in The Collected Works of John Maynard Keynes, vol. 28: Social, Political and Literary Writings, Macmillan, London, 1982 Keynes, J. M. Essays in Persuasion, Norton, New York, 1963 Keynes, J. M. The General Theory of Employment, Interest and Money, Macmillan, London, 1936 Keynes, J. M. How to Pay for the War: A Radical Plan for the Chancellor of the Exchequer, Macmillan, London, 1940 King, M.

And that history should cover not just the obvious episodes – the Great Depression, the inflation of the 1970s – but also those many occasions during which nations tried to live beyond their means, pretending that it would all turn out all right on the night when, in reality, both economic and political disaster threatened. Only by studying these events can economists really claim to have anything useful to say about the challenges we face today and, doubtless, will face tomorrow. ECONOMIC CHALLENGES FOR OUR GRANDCHILDREN In 1930, Keynes published a short essay titled ‘Economic Possibilities for our Grandchildren’.11 Even as the world economy was heading into depression, Keynes was confident that, in decades to come, incomes would rise rapidly: It is common to hear people say how the epoch of enormous economic progress . . . is over; that the rapid improvement in the standard of life is now going to slow down . . .; that a decline in prosperity is more likely than an improvement . . .

‘Forecasting Recessions under the Gramm-­Rudman-­Hollings Law’, NBER Working Paper No. 2066, Nov. 1986 278 4099.indd 278 29/03/13 2:23 PM INDEX Africa 19 ageing populations 78, 88, 250 age-related expenditure 48 generational divide 171–4, 241, 243–5 Germany 136 Japan 23, 25 AIG 30 Akerlof, George 123–4 American War of Independence 154 ancien régime and the French Revolution 151–7 Angola 19, 82 Anwar Ibrahim 200 Arab Spring 160 Argentina 13–19, 24–6, 39, 42, 161 Arizona Support Our Law Enforcement and Safe Neighbourhoods Act (SB 1070) 192 Armstrong, Neil 9–10, 35 Arrow, Kenneth J. 132–3 Asian crisis 192–6 recovery from 204–5, 206, 208–9 asset prices 62–3 asset-backed securities 73 Audit Commission 173–4 austerity 67–8, 111, 205, 226, 242 and political extremism 227 Statute of Labourers 211 versus stimulus 4 wartime 114, 143 see also Snowden’s budget Australia 15, 16, 117, 187 Austria 225 baby boomers 1, 7, 243 bailouts 61–2, 241 Balls, Ed 101 Bank Negara 199 Bank of England 33, 61, 90–2 economic growth forecasts 74 interest rates 71, 102 and Libor 126 Bank of Japan 21 banking free 255, 257 and protectionism 215 union (eurozone) 256 banks 125–31, 252–7 bankers’ rewards 48–9 failure 30–1, 255 liquidity buffers 84, 90 mortgage loan-to-value ratios 51–2 regulatory uncertainty 251–2 and savers 136 see also central banks Barclays Bank plc 126, 127–8 279 4099.indd 279 29/03/13 2:23 PM When the Money Runs Out Basel III regulations 83 Bean, Charlie 63–5, 75 Bear Stearns 30 Belgium 184 Ben Ali, Zine al-Abidine 160 Benedetti, Count 182 benefits 47, 203–4 see also social spending Bernanke, Ben 4, 21–2 Beveridge, William 44–5 bimetallism 184–5 Bismarck, Otto von 182 Black Death 209–10, 213 blame culture 108, 161, 189, 200–1, 226–7 Blenheim Palace 222–3 bonds 73, 77, 80, 86, 221 borrowers 97, 133–4, 137 borrowing, government borrower of last resort 86–7 heavy 143–4 international 142 and low interest rates 71, 245 and the New Deal 109 to offset private saving 217–18 relative to national income 198, 247 rising 32 see also credit: queues Botswana 19 Brazil 19, 89, 163 Britain see UK (United Kingdom) British Empire 14, 15, 16 Bryan, William Jennings 187 budget deficits 58, 69, 79, 110, 117 France 54 Germany 54 Spain 54 UK 52, 54, 66–7 US 53–4, 66–7, 118 Buenos Aires 15 Business Week 29–30 Buxton, Thomas Fowell 128 California 173 Calonne, Charles-Alexandre de 154–5 Canada 15, 16 capital adequacy ratios 256 controls 16, 199–200, 201, 234 flight and the euro 191 foreign 198, 202 immobile 250–2 markets 31, 133 and the rise of living standards 180 Carr, Jimmy 148 Case-Shiller house price index 63 Catalonia 153 Central African Republic 163 central banks and bailouts 241 expansion of remit 86 and government debt 80–1 and illusory wealth 64–5 interest rates 71 and a new monetary framework 245–6 nominal GDP targeting 247–50 and politics 78, 89–90, 91–5 and redistribution 121 see also quantitative easing (QE) Chicago 15 China and commodity prices 77 financial systems 135 and globalization 167 income inequality 160, 163 living standards 27 per capita incomes 251 and regional tensions 228 renminbi currency 177 silver standard 183, 185 trading partners 82 and the US 12, 139 Chinese Exclusion Act 188–9 Chrysi Avgi 227 Churchill, Winston 103 circuit breakers 242, 256 Coinage Act 184–5 Committee on National Expenditure 98–9 commodity prices 77, 109, 116–17 conduits 129–30 Connecticut 163 consumer credit 11–12, 52, 135 contingent redistribution 236 credit consumer 11–12, 52, 135 derivation of word 125 expansion 56–7 and the property boom 61 and protectionism 215 queues 80–1, 83–4, 85–9, 217 Creditanstalt 225 creditors creditor nations 224–5, 232 and debtors 139–43, 174–7, 188, 191, 232–4 280 4099.indd 280 29/03/13 2:23 PM Index foreign 193, 221, 223 home grown 138 Japan 22 cross-subsidization, of banking services 256–7 currencies 177, 221 ‘currency wars’ 82, 190 see also eurozone; renminbi; ringgit; sterling Darling, Alistair 92–3 debt and asset prices 63 and central banks 241–2 eurozone crisis 145, 235–9 excessive 67, 213–14 France 154 household 12, 63–4, 85 and inflation 220 Japan 23 and national incomes 52, 118, 141–2 and quantitative easing (QE) 79–80 repaying 34 debt deflation 115 debtors and creditors 139–43, 174–7, 188, 191, 232–4 eurozone 224–5 home grown 138 deficient demand 57, 59 deficit expansion 119 deficit reduction 242 deficits 58, 69, 79, 110, 117 France 54 Germany 54 Korea 202 pension funds 75, 172 Spain 54 and surpluses 134–7, 232–4 UK 52, 54, 66–7 US 53–4, 66–7, 118 deflation 21–2, 185 democratic deficit 143, 221 Deng Xiaoping 12, 160 Denmark 158 the Depression 55–7, 59, 70, 106–10, 131 and the UK 98, 101 Dexia 30 Diamond, Bob 126 Dickens, Charles 43 disaster-avoidance 7 District of Columbia 163 dollar standard 190 dotcom bubble 169 Draghi, Mario 94 economics profession 3–4, 5–6, 258–9 Edelman Trust Barometer 148 education 12 financial 257–9 literacy 15 training 254 Edward III 211 Egana, Amaia 153 emerging nations 28, 116 employment 115–16 see also labour; unemployment enfranchisement 222, 242–4 the Enlightenment 6, 11, 154 entitlement culture 45, 48, 137, 143, 209, 218 absent from Asia 204, 209 need to reduce 178, 205 equities 79, 172 ethics 254 Ethiopia 19 European Central Bank (ECB) 92, 93–5, 119–20, 144–5, 146 eurozone banking union 256 crisis 224–6, 235–9 and the European Central Bank 93–5 northern creditors and southern debtors 67, 139, 145, 157, 191, 232–3 and trust 145–6 and the UK 111, 214 variations in borrowing costs 215–16 exchange rates 81–2, 111–12, 175, 239–42 executive pay 48 exports 11, 112 extremism, political 226–9 Fannie Mae 190 Federal Reserve 74, 92, 105, 241 and the Great Depression 59, 106–7 Ferguson, Niall 26 Ferguson, Roger 194 feudalism 213 financial services 168–70 innovations 11–12, 38, 133–4 Financial Services Authority (FSA) 171 Finland 158 First World War 103, 114 ‘fiscal club’ concept 237–9 fiscal policy 58, 66–7, 69–70, 77–8, 246–7 fiscal trap 79–81 281 4099.indd 281 29/03/13 2:23 PM When the Money Runs Out fiscal unions 236–7 Fisher, Irving 108, 115 football 165 forecasting 52–3, 63, 71–2, 74, 108 Fortis 30 France age-related expenditure 48 ancien régime and the Revolution 151–7 and Austria 225–6 benefits 204 budget deficit 54 exports 82 Latin monetary union 184 per capita incomes 101, 105 and political extremism 192 and public spending 49 Franco-Prussian War 182 Frank, Barney 65 fraudulent acts 35–6 Freame, John 127–8 Freddie Mac 190 free banking 255, 257 French Revolution, and the ancien régime 151–7 Freud, Sigmund 51 Friedman, Milton 59, 60, 86, 106, 188 Fuld, Dick 253 GDP forecasts 48, 52–4 targeting 247–50 General Strike 104 generational divide 171–4, 241, 243–5 see also ageing populations Germany ageing population 48, 136, 171 benefits 204 budget deficit 54 and the eurozone crisis 34, 191, 225, 232–3, 235 exports 82 Franco-Prussian War reparations 184, 186 government borrowing 71, 144 interest rates 146 late 19th-century economy 186, 189–90 living standards 13–14 national income 32 per capita incomes 101, 105 and the Protestant work ethic 26 and public spending 50 surplus 135–7 Treaty of Versailles 103 unification 182–3 Weimar Republic 55–6, 89 GfK/NOP Inflation Attitudes Survey 92 globalization 166–7, 169, 214–16, 224–6, 250–1 Gold Standard 186 and Germany 184 and the UK 57, 98–9, 102, 103, 105 and the US 107, 109, 187–8 gold standards 183–4, 185 Golden Dawn Party 227 Goodwin, Fred 253 Gordon, Robert J. 4 government bonds 73, 77, 80, 86, 221 government borrowing borrower of last resort 86–7 heavy 143–4 international 142 and low interest rates 71, 245 and the New Deal 109 to offset private saving 217–18 relative to national income 198, 247 rising 32 see also credit: queues government debt and central banks 241–2 eurozone crisis 145 excessive 67, 213–14 France 154 and inflation 220 and national incomes 52, 118, 141–2 and quantitative easing (QE) 79–80 governments and central bank bailouts 241 and credit queues 83–92 mistrust 140, 147–8, 217–18 social spending 45–7 spending 58, 109, 119, 142, 203 spending increases 49–50, 66 Gramm-Rudman-Hollings Act 242 Great Depression 55–7, 59, 70, 106–10, 131 and the UK 98, 101 Great Railroad Strike 187 Greece 82, 134, 140–1, 144–6, 234 and the euro 191 and political extremism 192, 227 Greenback Party 187 Greenspan, Alan 61–2 growth forecasting 74 global 28 start of the 21st century 169–70 targeting 247–50 282 4099.indd 282 29/03/13 2:23 PM Index Hamada Marine Bridge 23 Hayek, Friedrich 56, 207 HBOS 30 health spending 45–6 Helmsley, Leona 148 high-quality liquid assets (HQLA) 83–4 home bias 215–16, 251–2 Hong Kong 163, 204 Hoover administration 118 housing markets 30–1, 61, 63–5, 115–16, 130 foreign buyers 177, 223 see also mortgage-backed securities; subprime HSBC 126, 254 Hundred Years War 209–10 Hungary 89 hyperinflation 78, 89 Iceland 32 Illinois 173, 174 illusions and asset prices 62–3 illusory prosperity 49–51, 56–7, 64–5, 68 and investment philosophy 137–8 public sector 52–3 IMF 200, 202 import tariffs 16 income inequalities 25, 34, 48, 158–70 income, national 32, 49–50, 141–2, 247 Germany 33 Japan 32 UK 110–11, 112 US 117–18 incomes, per capita 27, 49, 159–60, 163 Argentina 14 China 251 France 101, 105 Germany 14, 101, 105 India 27, 251 Indonesia 197 Japan 21 Korea 202 Malaysia 198 UK 1, 44, 101, 105 US 14, 101 India 27, 183, 185, 251 Indonesia 193, 195, 196–7 industrial relations 103–4 Industrial Revolution 38 IndyMac 30 inflation and ageing populations 250 Argentina 18 and commodity prices 116–17 deflation 21–2, 185 excessive 77–8, 89 housing market 64 and the New Deal 109 and stagnation 219–20 targeting 59–61, 87–8, 246, 247 UK 114 US 115 infrastructure projects 236 innovations, financial 11–12, 38, 133–4 interest rates and asset prices 63 credit queue jumping 83–92, 217 expected future 87–8 falls 32, 69, 137, 146–7 inflation versus GDP targeting 248–9 Libor 126 and monetary and fiscal policies 245–6 persistently low 72, 75, 76, 89–91, 239 and stimulus 58 subsidizing 190 UK 61, 71, 102 US 57, 61, 105, 135, 193 intergenerational divide 171–4, 241, 243–5 see also ageing populations International Monetary Fund (IMF) 144–5, 200, 201, 202 international/domestic conflict 232–5 investment demand for financial services 168 and income inequality 162–3 international 134, 136, 176–7, 193, 232 private investors 144–5 Ireland 49, 134 Israeli–Palestinian conflict 122–3 Italy 49–50, 82, 146, 184, 191 ageing populations 171 Japan 20–6 ageing populations 171 attempted reforms 42 debt repayment 135 exports 11 government borrowing 144 government debt 52 liquidity trap 72 living standards 14 national income 32–3 and quantitative easing (QE) 85 stockpile of assets 240 and trust 161 unreliable estimates 113 283 4099.indd 283 29/03/13 2:23 PM When the Money Runs Out Jay Cooke and Company 186 Jerusalem trip 122–3 Jews, attitudes towards 189, 200–1, 213 jobs 115–16 see also labour; unemployment Kahneman, D. 41 Kalecki, Michael 59 Das Kapital(Marx) 179 Keynes, John Maynard 38, 57–9, 72, 86, 108 ‘Economic Possibilities for our Grandchildren’ 259–60 Essays in Persuasion 100 The General Theory of Employment, Interest and Money 58–9, 89 on the Gold Standard 104 How to Pay for the War 114 Keynes Plan 233 Keynesian policies 60 on the Snowden budget 99 King, Mervyn 73, 90–1, 92–3, 180 Knetsch, J. L. 41 Knickerbocker Trust Company 131 Korea 14, 193, 195, 202–4, 205 Krugman, Paul 112–15, 117, 118–19 labour market 115–16, 252 productivity 53 Landes, David 26 Latin American debt crisis 216 Layard, Richard 114, 117 Lehman Brothers 30, 255 Leveson inquiry 148 Libor 126 life expectancy 47 liquidity 84, 90 liquidity trap 72 Liquidity Coverage Ratio (LCR) 83 Little Dorrit (Dickens) 138–9 living standards 11, 27, 158, 169, 180–1 belief in ever rising 13, 34 China 27 Indonesia 197 Japan 23 Korea 195 late 19th century 185, 186 Malaysia 198 post-Second World War 139 US 11, 163 loan-to-value ratios, mortgage 51–2 Long Depression 189–90 loss aversion 40–1 lotteries 164–5 Macroeconomic Imbalance Procedure (MIP) 233 macroeconomic policies 32, 60, 121, 181, 253 Japan 21 macroprudential rules 256 Madoff, Bernie 35 Mahathir Mohamad 198–201, 205 Malaysia 193, 198–201, 205 Malthus, Thomas 37–9 Manchester United 165–6 Marr, Wilhelm 189 Marx, Karl 57, 179–80 Mary Poppins 131–2 May Report 98 Megawati Sukarnoputri 197 Mellon, Andrew 106, 108 Mexico 158 Mieno, Yasushi 21 miners 103–4 Mississippi 163 mistrust creditors and debtors 141 cross-border 176 endemic 147–9 governments 140, 217–18 of money 219–21 and political extremism 227 monetarism 59 monetary policy 58, 68–74, 77–9, 87–9, 97, 111–12 a new monetary framework 245–50 see also Gold Standard; interest rates; quantitative easing (QE) Monetary Policy Committee 90–1 monetary unions 236–7 see also eurozone moral hazard 62 mortgage-backed securities 30, 65, 136–7 mortgages 51–2, 63–5 Napoleon Bonaparte 156 Napoleon III 182 National Bank of North America 131 national incomes 32, 49–50, 141–2, 247 Germany 33 Japan 32 UK 33, 110–11, 112 US 33, 70, 109, 115, 117–18 284 4099.indd 284 29/03/13 2:23 PM Index National Lottery 164–5 nationalism 228 the Netherlands 48 New Deal 108–9 ‘new economy’ of the 1990s 29–30 New Order (Indonesia) 197 New Zealand 187 Nicholson, Viv 50 Nigeria 19 Northern Rock 30, 51–2, 129, 255 Norway 158 Occupy movement 162, 170–1 Office for Budget Responsibility 33 Oliver Twist (Dickens) 43 Osborne, George 231 Overend, Gurney and Co. 131 painkillers 70–1, 89 ‘The Panic of 1873’ 186 Paul, Ron 93 Peasants’ Revolt 213 Pension Protection Fund (PPF) 172 pensioners’ voting patterns 88 pensions 47, 51, 75, 171–3, 174 per capita incomes 27, 49, 159–60, 163 Argentina and Germany 14 China 251 France 101, 105 Germany 101, 105 India 27, 251 Indonesia 197 Japan 21 Korea 202 Malaysia 198 UK 1, 44, 101, 105 US 14, 101, 105 Perón, Eva 16 Perón, Juan 16–17 Pew Center report 173 Pickett, Kate 159 Pigou, Arthur 59 policies and central bankers 65 fiscal 58, 66–7, 69–70, 77–8, 246–7 macroeconomic 21, 32, 60, 121, 181, 253 monetary 58, 68–74, 77–9, 87–9, 97, 111–12 new monetary framework 245–50 political extremism 226–9 politics and central bankers 78, 89–90, 91–5 and economics 24–6, 34, 102, 191–2, 217 and the eurozone 224–5, 237 and expectations 152–3 and income inequality 160–1 and lack of trust 147–8, 149 and monetary regimes 119–20 voters 50, 78, 88, 222, 242–4 poll tax 211 populations, ageing 78, 88, 250 age-related expenditure 48 generational divide 171–4, 241, 243–5 Germany 136 Japan 23, 25 Portugal 50, 146, 158, 191 precious metal standards 183–4 see also Gold Standard prices asset 73 commodity 77, 109, 116–17 rising 157 see also deflation; inflation property sector see housing markets protectionism 214–15 capital controls 16, 199–200, 201, 234 tariffs 16 Protestant work ethic 26, 28 public sector see governments public spending 49–50, 66, 142, 147–8, 203 government spending 58, 109, 119 social spending 45–7 quantitative easing (QE) 72–82, 84–6, 91, 97, 176–7 ratings agencies 234–5 rationing 114–15, 142–3 recessions 2 recovery from the Asian crisis 195–6, 204–5, 206, 208–9 UK in the 1930s 101–2 redistribution by stealth 90 Reform Acts 222, 242–3 regulation 125, 256 dangers of further 214, 251 dollar transactions 177 reduction 168 the regulatory trap 83–4 Statute of Labourers 213 renminbi (currency) 177 Réveillon, Jean-Baptiste 155–6 Ricardo, David 183–4 Richard II 211–12 ringgit (currency) 198 285 4099.indd 285 29/03/13 2:23 PM When the Money Runs Out risk and banks 255–6 creditors and debtors imbalance 234 and financial services 168 and rapid economic change 170 risk aversion 216 Roosevelt, Franklin Delano 107–9, 117–18, 119, 219 Royal Bank of Scotland 30 Royal Navy 99 Russia 117, 135 Rwanda 19 Samuel, Herbert 104 Saudi Arabia 117, 135 savers and banks 136 confidence 65 and illusions 137 and income inequality 162–3 and interest rates 90, 91, 97 and the subprime boom 133–4 schisms between debtors and creditors 174–7, 191 generational 170–4 income inequality 158–70 Schwartz, Anna 59, 106, 188 second-hand car market 123–4 Sierra Leone 163 silver standard 183 SIVs (structured investment vehicles) 129–30 Skidelsky, R. and E. 37 Smith, Adam 39–40, 207 melancholy state 42, 124–5, 159–60 Snowden’s budget 99–102, 105 soccer 165 social contract, between generations 244–5 social insurance 44–8 social security systems 12 social spending 45–7 Soros, George 200 South Korea 14, 193, 195, 202–4, 205 South Sea Bubble 29 space exploration 9–10, 35 Spain deficit 54, 134 and the eurozone 191, 235–6 exports 82 fiscal position 85 government borrowing 144 interest rates 146 political disenfranchisement 95 property bubble 140 suicide of Amaia Egana 153 spending government 58, 109, 119 public sector 49–50, 66, 142, 147–8, 203 social 45–7 stagnation 37–43, 50, 52–3, 158, 219 and political extremism 227–8 Standard & Poor’s 80 ‘stately home’ effect 221–3 Statute of Labourers 211, 213 sterling 98–106, 110 Stern Review 38–9 stimulus 3–4 and jobs 116 monetary and fiscal 30, 57–8, 181 Paul Krugman 112–15, 118–19 policy 32, 69–70, 82 political debate 205 prior to the financial crisis 67 stock markets 20–1, 30, 193 stock-market crashes 18, 61–2, 66, 99, 186 Straw, Jack 212 structured investment vehicles (SIVs) 129–30 subprime boom 130, 133–4 crisis 190 Suharto 196–7, 205 surpluses 66, 135–7, 204, 232–4 Sweden 158, 204 Switzerland 158, 184 Taiwan 14 Takeshita, Noburo 24 Tanzania 19 tariffs 16 tax avoidance 49, 211, 214 taxation ancien régime and the French Revolution 154–5 death duties 139 medieval poll tax 211 taxpayers 145, 170, 174, 215, 254 technological progress 2–3, 10–11 dotcom bubble 169 and financial industry wages 167 Industrial Revolution 38 Thailand 193, 195 Thaler, R.


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A World Without Work: Technology, Automation, and How We Should Respond by Daniel Susskind

3D printing, agricultural Revolution, AI winter, Airbnb, Albert Einstein, algorithmic trading, artificial general intelligence, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, blue-collar work, British Empire, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, computer age, computer vision, computerized trading, creative destruction, David Graeber, David Ricardo: comparative advantage, demographic transition, deskilling, disruptive innovation, Donald Trump, Douglas Hofstadter, drone strike, Edward Glaeser, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, financial innovation, future of work, gig economy, Gini coefficient, Google Glasses, Gödel, Escher, Bach, income inequality, income per capita, industrial robot, interchangeable parts, invisible hand, Isaac Newton, Jacques de Vaucanson, James Hargreaves, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joi Ito, Joseph Schumpeter, Kenneth Arrow, Khan Academy, Kickstarter, low skilled workers, lump of labour, Marc Andreessen, Mark Zuckerberg, means of production, Metcalfe’s law, natural language processing, Network effects, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, pink-collar, precariat, purchasing power parity, Ray Kurzweil, ride hailing / ride sharing, road to serfdom, Robert Gordon, Sam Altman, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, social intelligence, software is eating the world, sovereign wealth fund, spinning jenny, Stephen Hawking, Steve Jobs, strong AI, telemarketer, The Future of Employment, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, Travis Kalanick, Turing test, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, Watson beat the top human players on Jeopardy!, We are the 99%, wealth creators, working poor, working-age population, Y Combinator

The “$80.7 trillion pie” is the $80.738 trillion global GDP in current US dollars for 2017, from the World Bank, https://data.worldbank.org/indicator/NY.GDP.MKTP.CD. The “7.53 billion people” is the global population in 2017, also from the World Bank, https://data.worldbank.org/indicator/SP.POP.TOTL?page=2. Joseph Stiglitz does this calculation as well, when thinking about John Maynard Keynes and his prophecies. See Joseph Stiglitz, “Toward a General Theory of Consumerism: Reflections on Keynes’s Economic Possibilities for Our Grandchildren” in Lorenzo Pecchi and Gustavo Piga, eds., Revisiting Keynes: Economics Possibilities for Our Grandchildren (Cambridge, MA: MIT Press, 2008). 20.  John Kenneth Galbraith, The Affluent Society (London: Penguin Books, 1999), p. 4. 21.  Charlotte Curtis, “Machines vs. Workers,” New York Times, 8 February 1983. 22.  See the Introduction to Karl Popper, The Open Society and Its Enemies, vol. 1: The Age of Plato (London: Routledge, 1945). 1.

This chart is also in “Forget the 1%,” Economist, 6 November 2014. 51.  Facundo Alvaredo, Lucas Chancel, Thomas Piketty, et al., World Inequality Report (Creative Commons, 2018), p. 9. 52.  Keynes, Essays in Persuasion, p. 360. 53.  Ibid., p. 373. 54.  Ibid., p. 367. 55.  Joseph Stiglitz, “Towards a General Theory of Consumerism: Reflections on Keynes’s Economic Possibilities for Our Grandchildren” in Lorenzo Pecchi and Gustavo Piga, eds., Revisiting Keynes: Economics Possibilities for Our Grandchildren (Cambridge, MA: MIT Press, 2008). 56.  In my view, the economic problem is already shifting away from the traditional growth problem of making the pie bigger for everyone, and toward the distribution problem of making sure that everyone gets a decent slice. Other economists have made similar distinctions, though not always to the same end.

Spencer, David. The Political Economy of Work. Digital edition. New York: Routledge, 2010. Standage, Tom. The Turk. New York: Berkley Publishing Group, 2002. Stiglitz, Joseph. “Inequality and Economic Growth.” Political Quarterly 86, no. 1 (2016): 134–55. ________. “Towards a General Theory of Consumerism: Reflections on Keynes’s Economic Possibilities for Our Grandchildren.” In Lorenzo Pecchi and Gustavo Piga, eds., Revisiting Keynes: Economics Possibilities for Our Grandchildren. Cambridge, MA: MIT Press, 2008. Summers, Lawrence. “The 2013 Martin Feldstein Lecture: Economic Possibilities for Our Children.” NBER Reporter 4 (2013). Susskind, Daniel. “Automation and Demand.” Oxford University Department of Economics Discussion Paper Series No. 845 (2018). ________. “A Model of Technological Unemployment.”


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With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don't Pay Enough by Peter Barnes

Alfred Russel Wallace, banks create money, basic income, Buckminster Fuller, collective bargaining, computerized trading, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, diversified portfolio, en.wikipedia.org, Fractional reserve banking, full employment, hydraulic fracturing, income inequality, Jaron Lanier, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, land reform, Mark Zuckerberg, Network effects, oil shale / tar sands, Paul Samuelson, profit maximization, quantitative easing, rent-seeking, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, the map is not the territory, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Tyler Cowen: Great Stagnation, Upton Sinclair, Vilfredo Pareto, wealth creators, winner-take-all economy

On the upside, everyone will enjoy free Wi-Fi and limitless entertainment.23 Other plausible futures are even grimmer: climate mayhem, financial collapse, a surveillance state. A strong case can be made that any of these futures is likelier than a middle-class renaissance. Yet it’s too soon to throw in the towel. In the darkest days of the Great Depression, with Hitler rising in Germany, John Maynard Keynes wrote an essay called Economic Possibilities for Our Grandchildren. Reading it now, in the lifetime of those grandchildren, I’m surprised not only by how hopeful Keynes was but also by how prescient. Keynes predicted that, barring all-out war, “the standard of life in progressive countries … will be between four and eight times as high as it is today,” and he was right, even with an all-out war. He foresaw that “there will be ever larger … groups of people from whom problems of economic necessity have been practically removed,” and he was right about that as well.

See also Alaska model cap-and-dividend system, 105–107 carbon taxing and, 115 from co-owned wealth, 3–4, 86 from electromagnetic spectrum, 145 Europe, plans in, 129–130 from intellectual property rights, 144 offshoots and, 75 perceptual advantage of, 77 potential dividends and co-owned wealth, 139–146 practical application of, 87–89 sources of money for, 93–94 for sustaining middle class, 75–76 universal dividend systems, 73–74 wind energy dividends in Oregon, 128 Dobbs, Lou, 86–87, 125 Dole, Bob, 79 E Earned Income Tax Credit (EITC), 81 Earth Day, 134 “The Economic Equivalent of War” (Barnes), 34–35 Economic Possibilities for Our Grandchildren (Keynes), 135–136 Economic stimulus package, 37 The Economist on robots, 26 Education, 21, 24–25 80/20 rule, 30–31 Eldredge, Niles, 120 El Paso Natural Gas, 102 Employee stock ownership plans (ESOPs), 81–82 Employment. See Jobs; Unemployment Energy and Commerce Committee, 109 England, textile machinery in, 18 Environmental Defense Fund, 99 Environmental movement, 134–135 Epstein, Joshua, 31–33 Equity leverage, 47–48 European carbon trading system, 99, 104–105 European Union (EU) universal guaranteed income ideas in, 129–130 value added taxes (VATs) and, 140–141 Euthanasia of the rentier, 56 Everyone-gets-a-share capitalism, 3–4, 42, 126 Externalities, 63–64, 98–99 Extracted rent, 43, 45–57 recycled rent compared, 60 Extreme inequality, 33–34 ExxonMobil, 102 F Facebook, 48 Fair market value, 52 Fallacy of composition, 24–25 Family Assistance Plan, 80–81 Federal Reserve on new money creation, 144 quantitative easing, 22 shared market economy and, 83 FedEx, 26 Fee and dividend program, 115 Financial derivatives, global value of, 57 Financial infrastructure.

Further, it not only adds no value to the economy but “distorts resource allocation and makes the economy weaker.”14 And finally: “There’s no begrudging the wealth accrued by those who have transformed our economy—the inventors of the computer, the pioneers of biotechnology. But, for the most part, these are not the people at the top of our economic pyramid. Rather, to a too large extent, it’s people who have excelled at rent seeking in one form or another.” EIGHTY YEARS AGO, JOHN MAYNARD KEYNES looked forward to what he called “the euthanasia of the rentier.” That day would come when the supply of capital was so large, relative to the demand for it, that the return to capital “would have to cover little more than [its] exhaustion by wastage and obsolescence together with some margin to cover risk and the exercise of skill and judgment.” At that point, Keynes opined, “the intelligence and determination and executive skill of the financier will be harnessed to the service of the community on reasonable terms of reward.”15 Alas, it was not to be.


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Four Futures: Life After Capitalism by Peter Frase

Airbnb, basic income, bitcoin, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, cryptocurrency, deindustrialization, Edward Snowden, Erik Brynjolfsson, Ferguson, Missouri, fixed income, full employment, future of work, high net worth, income inequality, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), iterative process, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, litecoin, mass incarceration, means of production, Occupy movement, pattern recognition, peak oil, plutocrats, Plutocrats, post-work, postindustrial economy, price mechanism, private military company, Ray Kurzweil, Robert Gordon, Second Machine Age, self-driving car, sharing economy, Silicon Valley, smart meter, TaskRabbit, technoutopianism, The Future of Employment, Thomas Malthus, Tyler Cowen: Great Stagnation, universal basic income, Wall-E, Watson beat the top human players on Jeopardy!, We are the 99%, Wolfgang Streeck

The demise of wage labor may seem like a faraway dream today, but it was once the dream of the Left. The labor movement used to demand shorter hours rather than higher wages. People expected the future to look like the cartoon The Jetsons, whose protagonist works two hours per week, and they actually worried about what people would do after being liberated from work. In the essay “Economic Possibilities for Our Grandchildren,” John Maynard Keynes predicted that within a few generations, man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.8 And In a discussion from 1956, the Marxist philosopher Max Horkheimer begins by casually remarking to his comrade Theodor Adorno that “nowadays we have enough by way of productive forces; it is obvious that we could supply the entire world with goods and could then attempt to abolish work as a necessity for human beings.”9 Work and Meaning Getting past wage labor economically also means getting past it socially, and this entails deep changes in our priorities and our way of life.

Communism: Equality and Abundance 1Kurt Vonnegut, Player Piano, New York: Charles Scribner’s Sons, 1952, p. 302. 2Ibid., p. 61. 3Karl Marx, “Afterword to the Second German Edition” in Capital, Volume I, Marxists.org, 1873. 4Karl Marx, “The Trinity Formula” in Capital Volume III, Marxists. org, 1894. 5Ibid. 6Ibid. 7Karl Marx, “Part 1” in Critique of the Gotha Programme, Marxists.org, 1875. 8John Maynard Keynes, “Economic Possibilities for Our Grandchildren (1930),” Essays in Persuasion, Whitefish, MT: Kessinger Publishing, 2010, pp. 358–73. 9Theodor Adorno and Max Horkheimer, Towards a New Manifesto, New York and London: Verso Books, 2011, pp. 30–31. 10Clemens Hetschko, Andreas Knabe, and Ronnie Schöb, “Changing Identity: Retiring from Unemployment,” Economic Journal 124: 575, 2014, pp. 149–66. 11Clemens Hetschko, Andreas Knabe, and Ronnie Schöb, “Identity and Wellbeing: How Retiring Makes the Unemployed Happier,” VoxEU.org, 2012. 12Ibid. 13Zeynep Tufekci, “Failing the Third Machine Age: When Robots Come for Grandma,” Medium.com, 2014. 14Gøsta Esping-Andersen, The Three Worlds of Welfare Capitalism, Cambridge, UK: Polity, 1990. 15André Gorz, Strategy for Labor, Boston, MA: Beacon Press, 1967. 16Ibid., p. 6. 17Ibid., pp. 7–8. 18Robert J. van der Veen and Philippe van Parijs, “A Capitalist Road to Communism,” Theory and Society 15: 5, 1986, pp. 635–55. 19Ibid., p. 637. 20Ibid., p. 645. 21Ibid., p. 646. 22André Gorz, Critique of Economic Reason, New York and London: Verso Books, 1989, p. 169. 23Van der Veen and Van Parijs, “A Capitalist Road to Communism,” p. 646. 24Corey Robin, “Socialism: Converting Hysterical Misery into Ordinary Unhappiness for a Hundred Years,” CoreyRobin.com, 2013. 25Pamela Chelin, “Rebecca Black Fighting Ark Music Factory over ‘Friday,’” Cnn.com, 2011. 26Cory Doctorow, Down and Out in the Magic Kingdom, New York: Tor Books, 2003. 27Ibid., p. 10. 28Aaron Halfaker et al., “The Rise and Decline of an Open Collaboration System: How Wikipedia’s Reaction to Sudden Popularity Is Causing Its Decline,” American Behavioral Scientist 57: 5, May 2013, p. 683. 29Tom McKay, “Bitcoin vs.

In the nineteenth century, the ten-hour-day movement gave way to the eight-hour-day movement. Even in the 1930s, the American Federation of Labor supported a law to reduce the work week to thirty hours. But after World War II, for a variety of reasons, work reduction gradually disappeared from labor’s agenda. The forty-hour (or more) week was taken for granted, and the question became merely how well it would be compensated. This would have surprised the economist John Maynard Keynes, who speculated in the 1930s that people in our time would work as little as fifteen hours per week. That would mean working less than a third of the forty-hour work week that is still widely considered to be the standard. And yet productivity since Keynes’s time has more than tripled, so it would have been possible to take that growth in the form of free time for the masses. This didn’t happen, not because it isn’t technically possible, but because of the outcomes of the political choices and social struggles of the twentieth century.


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Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth

"Robert Solow", 3D printing, Asian financial crisis, bank run, basic income, battle of ideas, Berlin Wall, bitcoin, blockchain, Branko Milanovic, Bretton Woods, Buckminster Fuller, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, clean water, cognitive bias, collapse of Lehman Brothers, complexity theory, creative destruction, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, dematerialisation, disruptive innovation, Douglas Engelbart, Douglas Engelbart, en.wikipedia.org, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, Eugene Fama: efficient market hypothesis, experimental economics, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, Financial Instability Hypothesis, full employment, global supply chain, global village, Henri Poincaré, hiring and firing, Howard Zinn, Hyman Minsky, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, land reform, land value tax, Landlord’s Game, loss aversion, low skilled workers, M-Pesa, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, megacity, mobile money, Mont Pelerin Society, Myron Scholes, neoliberal agenda, Network effects, Occupy movement, off grid, offshore financial centre, oil shale / tar sands, out of africa, Paul Samuelson, peer-to-peer, planetary scale, price mechanism, quantitative easing, randomized controlled trial, Richard Thaler, Ronald Reagan, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, smart cities, smart meter, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, statistical model, Steve Ballmer, The Chicago School, The Great Moderation, the map is not the territory, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, Torches of Freedom, trickle-down economics, ultimatum game, universal basic income, Upton Sinclair, Vilfredo Pareto, wikimedia commons

Kennedy, P. (1989) The Rise and Fall of World Powers. New York: Vintage Books. Kerr, J. et al. (2012) ‘Prosocial behavior and incentives: evidence from field experiments in rural Mexico and Tanzania’, Ecological Economics 73, pp. 220–227. Keynes, J. M. (1923) ‘A Tract on Monetary Reform’, in The Collected Writings of John Maynard Keynes, Vol. 4, 1977 edn. London: Palgrave Macmillan. Keynes, J. M. (1924) ‘Alfred Marshall, 1842–1924’, The Economic Journal, 34: 135, pp. 311–372. Keynes, J. M. (1931) ‘Economic possibilities for our grandchildren’, in Essays in Persuasion. London: Rupert Hart-Davis. Keynes, J. M. (1936) The General Theory of Employment, Interest and Money. London: Macmillan. Keynes, J. M. (1945) First Annual Report of the Arts Council (1945–46), London: Arts Council. Klein, N. (2007) The Shock Doctrine. London: Penguin.

Oxfam (2013), ‘Tax on the “private” billions now stashed away in havens enough to end extreme world poverty twice over’, 22 May 2013. https://www.oxfam.org/en/pressroom/pressreleases/2013-05-22/tax-private-billions-now-stashed-away-havens-enough-end-extreme 59. Tax Justice Network (2015) ‘The scale of Base Erosion and Profit Shifting’ (BEPS). http://www.taxjustice.net/scaleBEPS/ 60. Global Alliance for Tax Justice, http://www.globaltaxjustice.org 61. Keynes, J.M. (1931) ‘Economic possibilities for our grandchildren’ in Essays in Persuasion, London: Rupert Hart-Davis, p. 5, available at: http://www.econ.yale.edu/smith/econ116a/keynes1.pdf 62. Coote, A., Franklin, J. and Simms, A. (2010) ‘21 hours: why a shorter working week can help us all flourish in the 21st century’ London: New Economics Foundation. 63. Coote, A. (2012) ‘The 21 Hour Work Week’, TEDxGhent. https://www.youtube.com/watch?

In 1968, the prestige of Nobel Prizes awarded for scientific advances in physics, chemistry and medicine was controversially extended: Sweden’s central bank successfully lobbied and paid for a Nobel-Memorial prize to be awarded annually in ‘Economic Sciences’ too, and its laureates have become academic celebrities ever since. Not all economists have been comfortable with this apparent authority. Back in the 1930s, John Maynard Keynes – the Englishman whose ideas would transform post-war economics – was already worrying about the role played by his profession. ‘The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else,’ he famously wrote. ‘Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.’19 The Austrian economist Friedrich von Hayek, best known as the 1940s father of neoliberalism, disagreed violently with Keynes on almost all questions of theory and policy, but on this matter they concurred.


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Capitalism: Money, Morals and Markets by John Plender

activist fund / activist shareholder / activist investor, Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, bonus culture, Bretton Woods, business climate, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, Fractional reserve banking, full employment, God and Mammon, Gordon Gekko, greed is good, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, labour market flexibility, liberal capitalism, light touch regulation, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, mass immigration, means of production, Menlo Park, money market fund, moral hazard, moveable type in China, Myron Scholes, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Paul Samuelson, plutocrats, Plutocrats, price stability, principal–agent problem, profit motive, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, Veblen good, We are the 99%, Wolfgang Streeck, zero-sum game

So the dysfunctionality of a corporate sector that under-invests in plant and machinery is a reflection of dysfunctional corporate governance. Consider, now, the ethical concern that most exercised John Maynard Keynes, namely the central role of the money motive in capitalism – or, to put it more bluntly, greed. One of the sayings attributed to the great economist is that capitalism amounts to ‘the astonishing belief that the nastiest motives of the nastiest men somehow or other work for the best results in the best of all possible worlds’.220 And that certainly is consonant with the view he expressed – only slightly tongue in cheek, according to his biographer Robert Skidelsky – in his essay ‘Economic Possibilities for Our Grandchildren’: When the accumulation of wealth is no longer of high social importance, there will be great change in the code of morals. We shall be able to rid ourselves of many of the pseudomoral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues.

Shaw even went so far as to say that the lack of money was the root of all evil. Shaw’s fellow Irishman Oscar Wilde was less of a windbag, but of much the same conviction: ‘There is only one class in the community that thinks more about money than the rich, and that is the poor. The poor can think of nothing else. That is the misery of being poor.’ A further dimension to the argument is provided by the great economist John Maynard Keynes. Like Dr Johnson, who declared that ‘there are few ways in which a man can be more innocently employed than in getting money’, Keynes thought that moneymaking was a socially productive way of channelling the basest instincts: Dangerous human proclivities can be canalised into comparatively harmless channels by the existence of opportunities for money making and private wealth, which, if they cannot be satisfied in this way, may find their outlet in cruelty, the reckless pursuit of personal power and authority, and other forms of self-aggrandisement.

How far society’s waning tolerance of these excesses will lead to a much more heavily regulated, lower growth form of capitalism turns heavily on these difficult issues about the moral character of money. Certainly money and business have suffered a major setback on the path towards respectability as a result of the great financial crisis that struck in 2008. CHAPTER TWO ANIMAL SPIRITS Few understood better than John Maynard Keynes the importance of enterprise for the workings of the capitalist system. Yet the great economist had a poor view of entrepreneurs. His celebrated reference to their so-called animal spirits in the General Theory of Employment, Interest and Money is a lofty implicit put-down and he regarded the money motive as a form of morbidity. That view may well have been influenced by Karl Marx, who saw the urge to accumulate capital as the sole motivation of the entrepreneurial capitalist.


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The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order by Benn Steil

activist fund / activist shareholder / activist investor, Albert Einstein, Asian financial crisis, banks create money, Bretton Woods, British Empire, business cycle, capital controls, Charles Lindbergh, currency manipulation / currency intervention, currency peg, deindustrialization, European colonialism, facts on the ground, fiat currency, financial independence, floating exchange rates, full employment, global reserve currency, imperial preference, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, lateral thinking, margin call, means of production, money: store of value / unit of account / medium of exchange, Monroe Doctrine, New Journalism, open economy, Paul Samuelson, Potemkin village, price mechanism, price stability, psychological pricing, reserve currency, road to serfdom, seigniorage, South China Sea, special drawing rights, The Great Moderation, the market place, trade liberalization, Works Progress Administration

The Collected Writings of John Maynard Keynes: Volume I, Indian Currency and Finance. Cambridge: Cambridge University Press. ———. 1919 [1971]. The Collected Writings of John Maynard Keynes: Volume II, The Economic Consequences of the Peace. Cambridge: Cambridge University Press. ———. 1923 [1971]. The Collected Writings of John Maynard Keynes: Volume IV, A Tract on Monetary Reform. Cambridge: Cambridge University Press. ———. 1925–1926. Unpublished fragment. Keynes Papers, PS/6. King’s College Archive Centre, University of Cambridge. ———. 1930 [1971]. The Collected Writings of John Maynard Keynes: Volume V, A Treatise on Money in Two Volumes: 1 The Pure Theory of Money. Cambridge: Cambridge University Press. ———. 1930 [1971]. The Collected Writings of John Maynard Keynes: Volume VI, A Treatise on Money in Two Volumes: 2 The Applied Theory of Money.

Economic Journal LVI, No. 222: 172–187. ———. 1978. The Collected Writings of John Maynard Keynes: Volume XIV, The General Theory and After: Defence and Development. Cambridge: Cambridge University Press. ———. 1978. The Collected Writings of John Maynard Keynes: Volume XVI, Activities 1914–19: The Treasury and Versailles. Cambridge: Cambridge University Press. ———. 1978. The Collected Writings of John Maynard Keynes: Volume XXII, Activities 1939–45: Internal War Finance. Cambridge: Cambridge University Press. ———. 1979. The Collected Writings of John Maynard Keynes: Volume XXIII, Activities 1940–43: External War Finance. Cambridge: Cambridge University Press. ———. 1979. The Collected Writings of John Maynard Keynes: Volume XXIV, Activities 1944–46: The Transition to Peace. Cambridge: Cambridge University Press. ———. 1980.

The Collected Writings of John Maynard Keynes: Volume XXV, Activities 1940–44: Shaping the Post-war World: The Clearing Union. Cambridge: Cambridge University Press. ———. 1980. The Collected Writings of John Maynard Keynes: Volume XXVI, Activities 1943–46: Shaping the Post-war World: Bretton Woods and Reparation. Cambridge: Cambridge University Press. ———. 1980. The Collected Writings of John Maynard Keynes: Volume XXVII, Activities 1940–46: Shaping the Post-war World: Employment and Commodities. Cambridge: Cambridge University Press. ———. 1981. The Collected Writings of John Maynard Keynes: Volume XIX, Activities 1924–29: The Return to Gold and Industrial Policy: Part I and II. Cambridge: Cambridge University Press. ———. 1981. The Collected Writings of John Maynard Keynes: Volume XX, Activities 1929–31: Rethinking Employment and Unemployment Policies.


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Hard Times: The Divisive Toll of the Economic Slump by Tom Clark, Anthony Heath

Affordable Care Act / Obamacare, British Empire, business cycle, Carmen Reinhart, credit crunch, Daniel Kahneman / Amos Tversky, debt deflation, deindustrialization, Etonian, eurozone crisis, falling living standards, full employment, Gini coefficient, hedonic treadmill, hiring and firing, income inequality, interest rate swap, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, low skilled workers, MITM: man-in-the-middle, mortgage debt, new economy, Northern Rock, obamacare, oil shock, plutocrats, Plutocrats, price stability, quantitative easing, Right to Buy, Ronald Reagan, science of happiness, statistical model, The Wealth of Nations by Adam Smith, unconventional monetary instruments, War on Poverty, We are the 99%, women in the workforce, working poor

The history of light suggests not’, in Robert J. Gordon and Timothy F. Bresnahan, The Economics of New Goods, University of Chicago Press for National Bureau of Economic Research, Chicago, 1997, at: http://papers.nber.org/books/bres96–1/ Page 31 gives a wax candle's emission as 13 lumens; Table 1.4 gives hours of labour at prevailing US wages required to buy 1,000 lumens in different years. 21. John Maynard Keynes, Essays in Persuasion: The collected writings of John Maynard Keynes, vol. 9, Cambridge University Press, Cambridge, 1978. The relevant essay is available online: at: www.econ.yale.edu/smith/econ116a/keynes1.pdf 22. In the first ‘lost decade’, 1991–2000, real growth averaged just 0.5%; over the second, 2000–10, the average was 0.8%. See W.R. Garside, Japan's Great Stagnation: Forging ahead, falling behind, Edward Elgar, Cheltenham, 2012, p. 83; Masaaki Shirakawa, ‘Deleveraging and growth: Japan's long and winding road’, lecture at the London School of Economics, 10 January 2012, at: www.lse.ac.uk/asiaResearchCentre/_files/Shirak­awaLectureTranscript.pdf 23.

At that time, Thomas De Quincey was admittedly guessing when he ventured that a quarter of all human misery was toothache; but thanks to progress in dentistry – and our ability to afford it – no one would make the same guess today. All this growth, then, is real money; it should be able to offer society real protection against hard times. As the world slid towards the abyss in 1930, Keynes took a brief break from peering over the edge and looked forward instead, to the ‘Economic Possibilities for Our Grandchildren’.21 He correctly predicted how much magic technology would work, and then suggested that there might come a point when getting richer would ‘no longer [be] of high social importance’. It has always been said that the most valuable things are those that money can't buy. Keynes’ essentially accurate long-range forecast prompts the thought that we might already have reached a pass where we can afford to protect the things that really matter – things like mental health, family and community – from the vicissitudes of the business cycle.

, BBC News, 24 July 2012, at: www.bbc.co.uk/news/uk–18973923; on anti-depressants see Mark Easton, ‘The north/south divide on antidepressants’, BBC News, 2 August 2012, at: www.bbc.co.uk/news/uk–19076219 8. On Gallup's 0–10 scale the overall average score fell from 6.9 to 6.4 between February and November 2008. By January 2009, however, the overall average score was back at 6.9. 9. Layard, Happiness, pp. 49–50. 10. Keynes, ‘Economic possibilities for our grandchildren’, in Essays in Persuasion, available online at: www.econ.yale.edu/smith/econ116a/keynes1.pdf 11. Rather than a 1–10 life satisfaction score, Eurobarometer asks respondents whether they are satisfied with their lives on a four-point scale. In the text we concentrate on the total proportion satisfied, i.e. the proportion ‘very’ or ‘fairly’, as against those who are ‘fairly’ or ‘very’ dissatisfied.


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The End of Alchemy: Money, Banking and the Future of the Global Economy by Mervyn King

"Robert Solow", Andrei Shleifer, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Doha Development Round, Edmond Halley, Fall of the Berlin Wall, falling living standards, fiat currency, financial innovation, financial intermediation, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, German hyperinflation, Hyman Minsky, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labour market flexibility, large denomination, lateral thinking, liquidity trap, Long Term Capital Management, manufacturing employment, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Nick Leeson, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open economy, paradox of thrift, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, quantitative easing, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Satoshi Nakamoto, savings glut, secular stagnation, seigniorage, stem cell, Steve Jobs, The Great Moderation, the payments system, The Rise and Fall of American Growth, Thomas Malthus, too big to fail, transaction costs, Tyler Cowen: Great Stagnation, yield curve, Yom Kippur War, zero-sum game

Keynes (1914a), The Collected Writings of John Maynard Keynes, Volume 18, Activities: 1914–1919, Macmillan, London, 1971, p. 4. —— (1914b), ‘War and the Financial System’, Economic Journal, 24, 1971, p. 473. —— (1919), The Economic Consequences of the Peace, Macmillan & Co., London. —— (1922), The Collected Writings of John Maynard Keynes, Volume 17, Activities: 1920–1922: Treaty Revision and Reconstruction, ed. Elizabeth Johnson, Macmillan, London, 1977. —— (1923a), A Tract on Monetary Reform, Macmillan, London. —— (1923b), The Collected Writings of John Maynard Keynes, Volume 18, Activities: 1922–1932: The End of Reparations, ed. Elizabeth Johnson, Macmillan, London, 1978. —— (1930), A Treatise on Money, Macmillan, London. —— (1931), ‘Economic Possibilities for our Grandchildren’, in Essays in Persuasion, Macmillan, London. —— (1936), The General Theory of Employment, Interest and Money, Macmillan, London. —— (1937a), ‘The General Theory of Employment’, Quarterly Journal of Economics, Vol. 51, pp. 209–23. —— (1937b), ‘Some Economic Consequences of a Declining Population’, The Galton Lecture published in Eugenics Review, XXIX, pp. 13–17.

I experienced at first hand the evolution of macroeconomics from literary exposition – where propositions seemed plausible but never completely convincing – into a mathematical discipline – where propositions were logically convincing but never completely plausible. Only during the crisis of 2007–9 did I look back and understand the nature of the tensions between the surviving disciples of John Maynard Keynes who taught me in the 1960s, primarily Richard Kahn and Joan Robinson, and the influx of mathematicians and scientists into the subject that fuelled the rapid expansion of university economics departments in the same period. The old school ‘Keynesians’ were mistaken in their view that all wisdom was to be found in the work of one great man, and as a result their influence waned. The new arrivals brought mathematical discipline to a subject that prided itself on its rigour.

As Sydney Carton sacrifices himself to the guillotine in the place of another, he reflects: ‘It is a far, far better thing that I do, than I have ever done …’ If we can find a way to end the alchemy of the system of money and banking we have inherited then, at least in the sphere of economics, it will indeed be a far, far better thing than we have ever done. 1 THE GOOD, THE BAD AND THE UGLY ‘I think that Capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight.’ John Maynard Keynes, The End of Laissez-faire (1926) ‘The experience of being disastrously wrong is salutary; no economist should be spared it, and few are.’ John Kenneth Galbraith, A Life in Our Times (1982) History is what happened before you were born. That is why it is so hard to learn lessons from history: the mistakes were made by the previous generation. As a student in the 1960s, I knew why the 1930s were such a bad time.


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Give People Money by Annie Lowrey

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Airbnb, airport security, autonomous vehicles, barriers to entry, basic income, Bernie Sanders, bitcoin, clean water, collective bargaining, computer age, crowdsourcing, cryptocurrency, deindustrialization, desegregation, Donald Trump, Edward Glaeser, Elon Musk, ending welfare as we know it, everywhere but in the productivity statistics, full employment, gender pay gap, gig economy, Google Earth, Home mortgage interest deduction, income inequality, indoor plumbing, information asymmetry, Jaron Lanier, jitney, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, Kodak vs Instagram, labor-force participation, late capitalism, Lyft, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, mass incarceration, McMansion, Menlo Park, mobile money, mortgage tax deduction, new economy, obamacare, Peter Thiel, post scarcity, post-work, Potemkin village, precariat, randomized controlled trial, ride hailing / ride sharing, Robert Bork, Ronald Reagan, Sam Altman, self-driving car, Silicon Valley, single-payer health, Steve Jobs, TaskRabbit, The Future of Employment, theory of mind, total factor productivity, Turing test, two tier labour market, Uber and Lyft, uber lyft, universal basic income, uranium enrichment, War on Poverty, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, women in the workforce, working poor, World Values Survey, Y Combinator

In that paradise, nobody really works for a living, he notes. The Starship Enterprise exists not to fight or colonize or extract, but to explore. Esteem and respectability become social proxies for wealth. The universe is one of artisans, scholars, religious thinkers, and philosophers. Economists have long pondered such worlds of abundance. Indeed, John Maynard Keynes wrote a famed 1930 essay called “Economic Possibilities for Our Grandchildren,” predicting that such economies would be in reach by the year 2030: Now it is true that the needs of human beings may seem to be insatiable. But they fall into two classes—those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows.

Rust Belt: A Macroeconomic Analysis” (working paper series, Center for Quantitative Economic Research, Federal Reserve Bank of Atlanta, Aug. 2014). agriculture went from employing 40 percent: David Rotman, “How Technology Is Destroying Jobs,” MIT Technology Review, June 12, 2013. textile workers destroyed their looms: Richard Conniff, “What the Luddites Really Fought Against,” Smithsonian Magazine, Mar. 2011. an end to long hours: John Maynard Keynes, “Economic Possibilities for Our Grandchildren (1930),” in Essays in Persuasion (New York: Harcourt Brace, 1932), 358–73. “the combination of the computer”: Linus Pauling et al., “The Triple Revolution” (Santa Barbara, CA, The Ad Hoc Committee on the Triple Revolution, 1964), http://scarc.library.oregonstate.edu/​coll/​pauling/​peace/​papers/1964p.7-01.html. “If the Luddite fallacy”: Alex Tabarrok, “Productivity and Unemployment,” Marginal Revolution, Dec. 31, 2013, http://marginalrevolution.com/​marginalrevolution/​2003/​12/​productivity_an.html.

a quarter of the hours the average American puts in: Chris Isidore and Tami Luhby, “Turns Out Americans Work Really Hard…but Some Want to Work Harder,” CNN, July 9, 2015. a man with a white-collar job: Peter Kuhn and Fernando Lozano, “The Expanding Workweek? Understanding Trends in Long Work Hours Among U.S. Men, 1979–2004” (NBER Working Paper no. 11895, Dec. 2005). “Labor cannot be distinguished from leisure”: Manu Saadia, Trekonomics: The Economics of “Star Trek” (New York: Inkshares, 2016). “Economic Possibilities for Our Grandchildren”: Keynes, “Economic Possibilities for Our Grandchildren (1930).” help smooth transactions: Matthew Yglesias, “The Star Trek Economy: (Mostly) Post-Scarcity, (Mostly) Socialism,” Slate, Nov. 18, 2013. dystopian visions: Yglesias, “The Economics of The Hunger Games,” Slate, Nov. 22, 2013. “The future is already here”: Pagan Kennedy, “William Gibson’s Future Is Now,” New York Times, Jan. 13, 2012.


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The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

"Robert Solow", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, basic income, Baxter: Rethink Robotics, British Empire, business cycle, business intelligence, business process, call centre, Charles Lindbergh, Chuck Templeton: OpenTable:, clean water, combinatorial explosion, computer age, computer vision, congestion charging, corporate governance, creative destruction, crowdsourcing, David Ricardo: comparative advantage, digital map, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, G4S, game design, global village, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, intangible asset, inventory management, James Watt: steam engine, Jeff Bezos, jimmy wales, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mars Rover, mass immigration, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, pattern recognition, Paul Samuelson, payday loans, post-work, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Rodney Brooks, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen: Great Stagnation, Vernor Vinge, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

He described unemployment as something close to a mirage: “the army of the unemployed is no more unemployed than are firemen who wait in fire-houses for the alarm to sound, or the reserve police force ready to meet the next call.”14 The creative forces of capitalism, in short, required a supply of ready labor, which came from people displaced by previous instances of technological progress. John Maynard Keynes was less confident that things would always work out so well for workers. His 1930 essay “Economic Possibilities for our Grandchildren,” while mostly optimistic, nicely articulated the position of the second camp—that automation could in fact put people out of work permanently, especially if more and more things kept getting automated. His essay looked past the immediate hard times of the Great Depression and offered a prediction: “We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come—namely, technological unemployment.

In one paper, Erik estimated that the elasticity of demand for computer hardware was about 1.1, implying that each 1 percent increase in price led to a 1.1 percent increase in demand, so as a result total spending increased as technology made computers more efficient. See Erik Brynjolfsson, “The Contribution of Information Technology to Consumer Welfare,” Information Systems Research 7, no. 3 (1996): 281–300. 22. This is an example of Say’s Law, which states that demand and supply are always kept in balance. 23. John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” Keynes on Possibilities, 1930, http://www.econ.yale.edu/smith/econ116a/keynes1.pdf. 24. Tim Kreider, “The ‘Busy’ Trap,” Opinionator, June 30, 2012, http://opinionator.blogs.nytimes.com/2012/06/30/the-busy-trap/. 25. Nobel Prize winner Joe Stiglitz has argued that rapid automation of agriculture, such as via gasoline-engine tractors, is part of the explanation for the high unemployment of the 1930s.

Because of these and other factors, we often hear from business leaders something very close to what Eric Spiegel, the CEO of Siemens USA, said in an interview: “The U.S. is a great place for manufacturing these days. We’re making things here in the U.S. that we’re shipping over to China. . . . We just need to make sure that we’ve . . . got the infrastructure in place to be able to handle the increased work.”25 There’s an interesting historical wrinkle in discussions about infrastructure investment. The legendary economist John Maynard Keynes, whose name is attached to a school of thought that advocates stimulus spending, famously suggested in 1936 that during recessions the government should put money in bottles, bury the bottles deep in old coal mines, then sell the rights to dig them up.26 Doing so, he argued only partly in jest, would “be better than nothing” because it would create demand during periods when labor and capital would otherwise go unused.


Capitalism, Alone: The Future of the System That Rules the World by Branko Milanovic

"Robert Solow", affirmative action, Asian financial crisis, assortative mating, barriers to entry, basic income, Berlin Wall, bilateral investment treaty, Black Swan, Branko Milanovic, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, colonial rule, corporate governance, creative destruction, crony capitalism, deindustrialization, dematerialisation, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, ghettoisation, gig economy, Gini coefficient, global supply chain, global value chain, high net worth, income inequality, income per capita, invention of the wheel, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, low skilled workers, Lyft, means of production, new economy, offshore financial centre, Paul Samuelson, plutocrats, Plutocrats, post-materialism, purchasing power parity, remote working, rent-seeking, ride hailing / ride sharing, Silicon Valley, single-payer health, special economic zone, The Wealth of Nations by Adam Smith, Thorstein Veblen, uber lyft, universal basic income, Vilfredo Pareto, Washington Consensus, women in the workforce, working-age population, Xiaogang Anhui farmers

Let us imagine that those who argue for a gentler alternative somehow succeed in convincing an entire nation to change its ways. For example, residents of a rich country in Europe might decide that the level of welfare they enjoy now is exactly sufficient and that it can be maintained thanks to technological progress with a much smaller labor input. They might decide to work only fifteen hours per week, the number of hours that John Maynard Keynes, in “The Economic Possibilities for Our Grandchildren” (1930), believed would be sufficient to “satisfy old Adam in most of us.” But very soon such a country and its population would discover that they had been overtaken by others. Perhaps, happy in their comfortable lifestyle, they would not worry too much about global economic rankings at first. But people from more successful and increasingly rich countries would start buying properties in that country, moving to the most attractive locations, eating in the best restaurants, and gradually displacing the local population.

Some hundred years ago, we could not imagine the need for a personal motor car, and thus we could not imagine Detroit and Ford and GM and Toyota and even things like the Michelin restaurant guide. Some two hundred years ago, Jean-Baptiste Say, one of the most renowned early economists, claimed that “no machine will ever be able to perform what even the worst horses can—the service of carrying people and goods through the bustle and throng of a great city.”27 Other famous economists, like David Ricardo and John Maynard Keynes (in “The Economic Possibilities for Our Grandchildren”), thought that human needs were limited. We should know better today: our needs are unlimited, and because we cannot forecast exact movements in technology, we cannot forecast what particular form such new needs will take. The third “lump” fallacy is the “lump of raw materials and energy” fallacy, the idea of the so-called carrying capacity of the earth. There are of course ultimate geological limits to the supply of raw materials, simply because the earth is finite.

National Bureau of Economic Research, Cambridge, MA, June (rev. October). Published 2014 in Quarterly Journal of Economics 129(1): 61–103. Kennan, John. 2014. “Freedom of Movement for Workers.” IZA World of Labor 2014: 86, September. https://wol.iza.org/uploads/articles/86/pdfs/freedom-of-movement-for-workers.pdf. Keynes, John Maynard. 1919. The Economic Consequences of the Peace. London: Macmillan. Keynes, John Maynard. 1930. “The Economic Possibilities for Our Grandchildren,” parts 1 and 2. The Nation and Athenaeum 48, October 11 and 18. Keynes, John Maynard. 1972. Essays in Biography. London: Macmillan. Kissinger, Henry. 2011. On China. New York: Penguin. Kristov, Lorenzo, Peter Lindert, and Robert McClelland. 1992. “Pressure Groups and Redistribution.” Journal of Public Economics 48(2): 135–163. Krouse, Richard W. 1982. “Polyarchy and Participation: The Changing Democratic Theory of Robert Dahl.”


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Humans as a Service: The Promise and Perils of Work in the Gig Economy by Jeremias Prassl

3D printing, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, Andrei Shleifer, autonomous vehicles, barriers to entry, call centre, cashless society, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, disruptive innovation, Donald Trump, Erik Brynjolfsson, full employment, future of work, George Akerlof, gig economy, global supply chain, hiring and firing, income inequality, information asymmetry, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, low skilled workers, Lyft, Mahatma Gandhi, Mark Zuckerberg, market friction, means of production, moral hazard, Network effects, new economy, obamacare, pattern recognition, platform as a service, Productivity paradox, race to the bottom, regulatory arbitrage, remote working, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Rosa Parks, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley ideology, Simon Singh, software as a service, Steve Jobs, TaskRabbit, The Future of Employment, The Market for Lemons, The Nature of the Firm, The Rise and Fall of American Growth, transaction costs, transportation-network company, Travis Kalanick, two tier labour market, two-sided market, Uber and Lyft, Uber for X, uber lyft, union organizing, working-age population

Roosevelt consistently argued in favour of basic labour standards: see Teresa Tritch, ‘FDR makes the case for the minimum wage’, The New York Times (7 March 2014), http://takingnote.blogs.nytimes.com/2014/ 03/07/f-d-r-makes-the-case-for-the-minimum-wage/, archived at https:// perma.cc/6WPQ-DYWU 51. Simon Deakin and Frank Wilkinson, The Law of the Labour Market: Industrialization, Employment, and Legal Evolution (Oxford University Press 2005), 109. epilogue 1. John Maynard Keynes, ‘Economic possibilities for our grandchildren’, in Essays in Persuasion (Palgrave Macmillan 2010), 21. 2. Ibid., 325. 3. President John F. Kennedy, News Conference 24 (14 February 1962), https://www. jfklibrary.org/Research/Research-Aids/Ready-Reference/Press-Conferences/ News-Conference-24.aspx, archived at https://perma.cc/LDS6-Y8X7 4. John Maynard Keynes, ‘Economic possibilities for our grandchildren’, in Essays in Persuasion (Palgrave Macmillan 2010), 325. 5. Carl Frey and Michael Osborne, The Future of Employment: How Susceptible Are Jobs to Computerisation? (Oxford Martin School 2013). 6.

For the industry to operate to everyone’s benefit, however, we need to ensure that platforms can no longer arbitrage around existing rules and have to bear the cost of their operations. Employment law is the key to equitable conditions for all workers, and equal competition amongst businesses new and old. * * * * * * Epilogue Amidst the economic depression of the 1930s, Cambridge economist John Maynard Keynes penned a note about the Economic Possibilities for our Grandchildren. Where others saw stagnation and decline, he predicted prosperity and development. Unprecedented technological improvements in manufacture and transport were key to this vision. In the long term, the resulting productivity gains would bring manifold improvements in living standards for all. In the short term, however, ‘the very rapidity of these changes is hurting us and bringing difficult problems to solve’:1 We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come—namely, technological unemployment.


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No More Work: Why Full Employment Is a Bad Idea by James Livingston

Affordable Care Act / Obamacare, business cycle, collective bargaining, delayed gratification, full employment, future of work, Internet of things, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, late capitalism, liberal capitalism, obamacare, post-work, Project for a New American Century, Ralph Waldo Emerson, Robert Gordon, Ronald Reagan, Silicon Valley, surplus humans, The Future of Employment, union organizing, working poor

And, for that matter, when Faludi was writing her book in the mid-1990s, the depiction of a downsized Dad, the manly breadwinner, was a growth industry, as anybody who has seen Toy Story or Terminator II can attest. In fact, it’s been almost a century since we started hearing this lament, this warning, about the end of men as a result of the end of work. By now we’re all familiar with what John Maynard Keynes wrote in 1930, in “Economic Possibilities for Our Grandchildren”—dozens of writers, including Rosin, have recently cited the piece as introduction to their own studies of the endings impending in the crash of the labor market. All of them wonder how he went so wrong, predicting increased leisure, less labor time, more pleasure. They all ask, what was he thinking? But the great irony is not that that he predicted less socially necessary labor time—he turns out to have been right about that, regardless of what we’ve done with the time left over—but that he wrote in the throes of the Great Depression, when the sheer brutality of economic necessity was reasserting its social and psychological hold on working people.

Consequently, speculative bubbles and financial crises become the normal, predictable pattern of economic development, not surprising deviations from market equilibrium. If growth no longer requires net additions to the labor force, work itself can’t be justified by the invocation of economic necessity, and income must be decoupled from work—full employment becomes a fool’s errand. And if growth requires neither more capital nor more labor, less work and more leisure become the key not just to the good life, as John Maynard Keynes insisted, but to life as such. So if we want to save the planet, and with it, ourselves, we need to work less, not more. That’s what I mean when I say Fuck Work! No More Work Introduction I Work means everything to us. For centuries—since, say, 1650—we’ve believed that it builds character (punctuality, initiative, honesty, self-discipline, and so forth). We’ve also believed that the market in labor, where we go to find work, has been relatively efficient in allocating opportunities and incomes.


pages: 293 words: 91,412

World Economy Since the Wars: A Personal View by John Kenneth Galbraith

business cycle, central bank independence, full employment, income inequality, James Hargreaves, James Watt: steam engine, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, means of production, price discrimination, price stability, road to serfdom, Ronald Reagan, spinning jenny, The Wealth of Nations by Adam Smith, Thorstein Veblen, union organizing, War on Poverty

Thus a line of thought which once might seem to throw doubt on the importance of marginal increments to the stock of goods ends by affirming it. In practice, the analytical apparatus excludes from consideration the possibility that the movement to higher and higher indifference curves is of declining urgency. [back] *** 7 J. M. Keynes, Essays in Persuasion, "Economic Possibilities for Our Grandchildren" (London: Macmillan, 1931), pp. 365–66. Notice that Keynes, as always little bound by the conventional rules, did not hesitate to commit the unpardonable sin of distinguishing between categories of desire. [back] *** 1 J. M. Keynes, Essays in Persuasion, "Economic Possibilities for Our Grandchildren" (London: Macmillan, 1931), p. 365. [back] *** 2 James'S. Duesenberry, Income, Saving and the Theory of Consumer Behavior (Cambridge, Mass.: Harvard University Press, 1949), p. 28. [back] *** 3 A more recent and definitive study of consumer demand has added even more support.

As an early supporter of the women's movement, this I would now change if I were beginning anew. [back] *** 1 Clarence B. Randall, A Creed for Free Enterprise (Boston: Atlantic-Little, Brown, 1952), pp. 3, 5. [back] *** 2 "Tenth Philosophical Letter." Quoted by Henri See, Modern Capitalism (New York: Adelphi, 1928), p. 87. [back] *** 3 Arthur M. Schlesinger, Jr., The Crisis of the Old Order (Boston: Houghton Mifflin, 1956), p. 232. [back] *** 1 J. M. Keynes, "Economic Possibilities for Our Grandchildren," Essays in Persuasion (London: Macmillan, 1931), p. 360. [back] *** 2 E. H. Phelps Brown and Sheila V. Hopkins, "Seven Centuries of the Prices of Consumables, Compared with Builders' Wage Rates." Economica, New Series; Vol. XXIII, No. 92 (November 1956). [back] *** 3 have used the phrase "central tradition" to denote the main current of ideas in descent from Smith. The more common reference to the "classical tradition" is ruled out by a difference of opinion, in my view, a rather futile one, as to whether classical economics should or should not be considered to have ended with John Stuart Mill and J.

In fact, circumstances had already triumphed over the conventional wisdom. By the second year of the Hoover administration, the budget was irretrievably out of balance. In the fiscal year ending in 1932, receipts were much less than half of spending. The budget was never balanced during the depression. But not until 1936 did both the necessities and advantages of this course begin to triumph in the field of ideas. In that year, John Maynard Keynes launched his formal assault in The General Theory of Employment Interest and Money. Thereafter, the conventional insistence on the balanced budget under all circumstances and at all levels of economic activity was in retreat. Keynes, as we shall see presently, was on his way to being the new fountainhead of conventional wisdom. By the late sixties a Republican President would proclaim himself a Keynesian.


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The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

"Robert Solow", 3D printing, Airbnb, American energy revolution, assortative mating, autonomous vehicles, Bakken shale, barriers to entry, basic income, Bernie Sanders, BRICs, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, creative destruction, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, disruptive innovation, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, gig economy, global supply chain, global value chain, hydraulic fracturing, income inequality, indoor plumbing, industrial robot, intangible asset, interchangeable parts, Internet of things, inventory management, invisible hand, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low skilled workers, lump of labour, Lyft, manufacturing employment, Marc Andreessen, mass immigration, means of production, new economy, performance metric, pets.com, post-work, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, TaskRabbit, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, uber lyft, very high income, working-age population

If you believe the copy of this e-book you are reading infringes on the author’s copyright, please notify the publisher at: us.macmillanusa.com/piracy. A man must always live by his work, and his wages must at least be sufficient to maintain him. Adam Smith, The Wealth of Nations1 Don’t mourn for me, friends, don’t weep for me never, For I’m going to do nothing for ever and ever. Epitaph for a charwoman, traditional, quoted in ‘Economic Possibilities for our Grandchildren’, John Maynard Keynes, 19302 Introduction In January of 2014, The Economist, my employer, published a piece I had written on the future of work in an age of rapid automation. A sample: Ten years ago technologically minded economists pointed to driving cars in traffic as the sort of human accomplishment that computers were highly unlikely to master. Now Google cars are rolling round California driver-free no one doubts such mastery is possible … A taxi driver will be a rarity in many places by the 2030s or 2040s … bad news for journalists who rely on that most reliable source of local knowledge and prejudice.1 Not long after, a minor earthquake rattled the city of Los Angeles early in the morning.

Utopia might, then, seem to be waiting just over the horizon (as a number of recent books, such as Postcapitalism by Paul Mason,13 argue); all that must be managed is the slow reduction of hours devoted to menial work, combined with the distribution across society of the common wealth generated by productive technologies. But is this better world of work achievable? Scholars have been imagining it for generations. In 1930, the British economist John Maynard Keynes wrote an essay describing his view of how the economic future would unfold.14 At the time, the world was caught in a deepening depression. ‘We are suffering just now from a bad attack of economic pessimism,’ Keynes noted in the opening to his essay, ‘Economic Possibilities for our Grandchildren’. Yet in the piece he invited readers to look past short-term troubles to the remarkable long-run process of growth and progress in which humanity was engaged. After long millennia of labour in which living standards grew imperceptibly slowly, the societies of northwest Europe had, in the two or three centuries leading up to the depression, made a clear and extraordinary break with the economic past.

Abbreviations BEA US Bureau of Economic Analysis BLS US Bureau of Labor Statistics EIA US Energy Information Administration IMF International Monetary Fund NBER National Bureau of Economic Research OECD Organization for Economic Co-operation and Development EPIGRAPH   1.  Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776).   2.  Keynes, John Maynard, ‘Economic Possibilities for our Grandchildren’, Essays in Persuasion (London: Macmillan, 1931). INTRODUCTION   1. ‘The Onrushing Wave’, The Economist, 18 January 2014.   2. ‘Is 4.4 jolt an end to Los Angeles’ “earthquake drought”?’, Los Angeles Times, 17 March 2014.   3. http://www.statista.com/chart/612/newspaper-advertising-revenue-from-1950-to-2012/   4. OECD, Average Annual Wages, in national currency units, constant (https://stats.oecd.org/Index.aspx?


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Servant Economy: Where America's Elite Is Sending the Middle Class by Jeff Faux

back-to-the-land, Bernie Sanders, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, call centre, centre right, cognitive dissonance, collateralized debt obligation, collective bargaining, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, David Brooks, David Ricardo: comparative advantage, disruptive innovation, falling living standards, financial deregulation, financial innovation, full employment, hiring and firing, Howard Zinn, Hyman Minsky, illegal immigration, indoor plumbing, informal economy, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kickstarter, lake wobegon effect, Long Term Capital Management, market fundamentalism, Martin Wolf, McMansion, medical malpractice, mortgage debt, Myron Scholes, Naomi Klein, new economy, oil shock, old-boy network, Paul Samuelson, plutocrats, Plutocrats, price mechanism, price stability, private military company, Ralph Nader, reserve currency, rising living standards, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, school vouchers, Silicon Valley, single-payer health, South China Sea, statistical model, Steve Jobs, Thomas L Friedman, Thorstein Veblen, too big to fail, trade route, Triangle Shirtwaist Factory, union organizing, upwardly mobile, urban renewal, War on Poverty, We are the 99%, working poor, Yogi Berra, Yom Kippur War

Meritt Roe Smith, Military Enterprise and Technological Change: Perspectives on the American Experience (Cambridge, MA: MIT Press, 1985), 4; John Gertner, “True Innovation,” Washington Post, February 20, 2012; Fred Block, “Innovation and the Invisible Hand of Government,” in State of Information: The U.S. Government’s Role in Technology Development, ed. Fred Black and Matthew R. Keller (Boulder, CO: Paradigm Publishers, 2011), 5–10. 21. Robert Whaples, “Hours of Work in U.S. History,” Economic History Association, February 1, 2010, http://eh.net/encyclopedia/article/whaples.cork.hours.us. 22. John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” Essays in Persuasion (New York: W. W. Norton, 1963). 3 The Cushion Deflates For the three decades immediately after World War II, U.S. wages and incomes rose three times as fast as they had in the previous seven decades. Then suddenly the paycheck prosperity came to a halt. After 1973, the average real wages for non-managers (adjusted for price changes) fell for several years, inched back up in 1979, and virtually stagnated for the next three decades.

Although not quite as secure, the largest concentrations of wealth held by Americans also have a sort of immortality that is the special privilege bestowed on the corporation by the state. Individual corporations can die from bad luck and incompetence or a reorganization of investors’ portfolios. But adequately managed, the wealth moves from one protected corporate nest to another—deathless as long as its special status is indulged by society. “In the long run,” John Maynard Keynes famously said, “we are all dead.” But living off large privileged stores of capital, most members of the governing classes are protected on the downside from the natural capitalist cycles of boom and bust. Recessions, even depressions and other economic calamities, are not typically life-threatening. As the crash of 2008 taught us once more, money may be lost, CEOs may be forced to retire early, and some assets might have to be sold, but those who drove the economy off the cliff did not end up sleeping on park benches.

In response, employers cut wages, and therefore consumer spending, making things worse. Even Herbert Hoover—who, somewhat unfairly, was blamed for the Depression—understood that there was something fundamentally wrong in this response. In 1931, he signed the Davis-Bacon Act, which established the eight-hour workday in construction and required employers to maintain prevailing wage levels in government-financed projects. British economist John Maynard Keynes provided the economic theory for what almost all businesspeople understood in practice: that they expanded their businesses not when workers received lower wages but when they saw customers coming in the door with money in their pockets. In 1914, Henry Ford, otherwise a brutal and repressive employer, doubled the basic wage he paid to his auto workers. When his horrified fellow capitalists complained, he reminded them that their workers had to earn enough to become customers for the products that they made.


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This Could Be Our Future: A Manifesto for a More Generous World by Yancey Strickler

basic income, big-box store, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cognitive dissonance, corporate governance, Daniel Kahneman / Amos Tversky, David Graeber, Donald Trump, Doomsday Clock, effective altruism, Elon Musk, financial independence, gender pay gap, global supply chain, housing crisis, Ignaz Semmelweis: hand washing, invention of the printing press, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Nash: game theory, Joi Ito, Joseph Schumpeter, Kickstarter, Louis Pasteur, Mark Zuckerberg, medical bankruptcy, new economy, Oculus Rift, off grid, offshore financial centre, Ralph Nader, RAND corporation, Richard Thaler, Ronald Reagan, self-driving car, shareholder value, Silicon Valley, Simon Kuznets, Snapchat, Social Responsibility of Business Is to Increase Its Profits, stem cell, Steve Jobs, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Travis Kalanick, universal basic income, white flight

This would be the moment, Asimov predicted, that everything could change. CHAPTER TEN VALUES MAXIMIZING CLASS Few people in history can take credit for creating as much economic growth as John Maynard Keynes. The British economist was the founder of macroeconomics and a key architect of the global economy. During the Great Depression he successfully convinced world governments to spend public funds to create jobs and other forms of social support. Maybe you’ve heard someone say “Keynesian economics” on a podcast before. They meant this guy. Keynes was a great champion of capitalism. In a 1930 essay called “Economic Possibilities for Our Grandchildren,” he points out that from 2000 BCE until 1700 CE (aka the bloodletting era) there was little economic growth or technological development in the world. During those thousands of years, he estimates, life got 1 percent better—at most.

This is not the kind of change we need. this was thirty-five years away: Isaac Asimov’s predictions of the future were published in the Canadian newspaper the Star (“35 Years Ago, Isaac Asimov Was Asked by the Star to Predict the World of 2019. Here Is What He Wrote,” December 27, 2018). CHAPTER TEN: VALUES MAXIMIZING CLASS “economic necessity into daylight”: John Maynard Keynes’s words about the nature of capitalism come from the 1930 essay “Economic Possibilities for Our Grandchildren,” collected in a book of Keynes’s writings called Essays in Persuasion. 271 times more than the average worker: From Fortune (“CEO Pay: Top Execs Make 271 Times More Than Workers,” July 20, 2017). seventeenth in 2018: From U.S. News & World Report (“Quality of Life” 2018 ratings). Chile’s Atacama Desert: Background on the Chilean miner story came from NPR (“The Incredible Story of Chilean Miners Rescued from the ‘Deep Down Dark,’” October 29, 2014); the book Deep Down Dark by Héctor Tobar; and a Harvard Business School case study (“The 2010 Chilean Mining Rescue,” October 2014 by Amy C.

See also specific companies cultural heritage, 180–81 Curtis, Adam, 270–71 data/data science, xv, 97, 123, 150, 159–62, 215 decision making, 28, 96–97 affects other people, 127–28, 144 and Bentoism, 130, 134, 138–40, 206–11 best-case outcome for, 126, 152, 243 guided by defaults, 22–23, 34–35 and making money, x–xi, 23, 135 of Maximizing Class, 62–63 rational, xiii, 134–35, 137, 139 values-driven, xiii, 132, 138–39, 152–53, 174–76, 209–10, 223 See also autonomy defaults (hidden) and bento box, 129–30 explanation of, 19–23 and financial maximization, x, 22–26, 64, 83 and game theory, 32, 34–35 and maximizing here/now, 136–37 set what’s normal, 34–35 and values, 214–15, 223 defaults (visible), 22 Defense Advanced Research Projects Agency (DARPA), 78–79 deregulation, 77–78, 83, 257 disrupting, in business, 87–88, 95–99, 103 downtown, demise of, 48, 51–52, 54 Drive (Pink), 117–19 drugs, xii, 23, 81, 249 Dublin, Ireland, 9–10 e-commerce, 47, 162 “Economic Possibilities for Our Grandchildren” (Keynes), 193–94 economy, 261 downturn in, 61–62, 71, 120 and financial maximization, x, xiii, 70, 72, 116 growth of, 120, 151, 193–95, 267 “Mullet,” 66–74, 77, 84, 110, 163 shareholder-centric, 60–61, 67–73, 82–85 See also gross domestic product (GDP); stock buybacks education, 24–26, 74–75, 110, 170–71, 197, 216, 259 electric cars, 173–75, 183 Ellison, Larry, 109–10 emotions, 22–23, 103, 113–15, 195, 260 Enron, 78, 210 Entrepreneurial State, The (Mazzucato), 78 entrepreneurship, 52–54, 75, 78–81, 196, 241 environmental issues, 14–15, 77, 172–74, 201, 212 Etsy, 212 “evergreen” model, 217 exercise, xiv, 177–78, 184–87, 189–90, 265, 267 Facebook, 53–54, 98, 109 fairness, xii–xiii, xv, 102, 142, 145, 158, 163, 195, 202, 216 family, the, xiii, xv, 26–27, 90–91, 111, 127, 138, 142, 222 Federal Reserve, 49 Federal Reserve Bank of Dallas, 72–73 financial crises, 77–78 debt, 65–66, 74–75 growth, xv–xvi instability, 110, 112 security, xi, 109–14, 116, 141, 201, 205 Financial Independence Retire Early (FIRE), 166–69 financial maximization, 236 becomes mainstream, 59–61, 63–65, 91, 180 case against, 110–11, 115–16, 119 dominance of, x–xiii, xvi, 23–25, 27, 37, 73, 97, 104–5, 133–35 downsides to, xi–xiii, 45, 196–97, 199, 243 ending its reign, xiii, 13–14, 225 four phases of, 83–85 growth of, xi, 92, 123, 196, 265 moving beyond it, 163, 168–69, 206, 209, 212 normalization of, 91, 183 not the goal, 9–10, 43–44 origins of, x, xvi, 26–32, 255 prioritizing it, 14, 63, 82–83 Financial Times, 70–71 First Amendment, 39 Fonda, Jane, 187 Food and Drug Administration, 188 Fortune, 68 Fox News, xii Friedman, Milton, 59–61, 63, 82, 90–91, 105, 180, 255, 261 Future Me examples of, 138, 167–69, 202–6, 211 explanation of, 132, 143, 206 and values helix, 218–23 Future Us, 196 examples of, 138, 169, 171–75, 201–6, 211 explanation of, 132, 144–45, 206 and values helix, 218–19 game theory, 237, 250 and collaboration, 32–34 and Community Game, 33–35, 98 its notion of rationality, 29–35, 97 and Prisoner’s Dilemma, 28–34, 130–33, 198–99 and Stag Hunt, 32–34 and Wall Street Game, 33–35, 98 Garfield, James, 146–47, 149, 179 Gates, Bill, 109–10 generational change, xiv, 180–84, 187, 191–92, 266–67 influence, xi, 152, 218–24, 271 generosity, xii, 7, 118, 134, 175 Gomory, Ralph, 82 Google, 53–54, 110, 123 Great Depression, 71, 77, 120, 193 Greatest Generation, 192 grit, 135, 143–45 gross domestic product (GDP), xii, 23, 83, 120–24, 196, 235 gross domestic value (GDV), 217–18 Groupon, 96–97, 100 gyms, xiv, 20, 186–87 Hanchett, Thomas, 49 happiness.


Affluence Without Abundance: The Disappearing World of the Bushmen by James Suzman

access to a mobile phone, agricultural Revolution, back-to-the-land, clean water, discovery of the americas, equal pay for equal work, European colonialism, full employment, invention of agriculture, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, means of production, Occupy movement, open borders, out of africa, post-work, quantitative easing, The Chicago School, The Future of Employment, The Wealth of Nations by Adam Smith, trade route, trickle-down economics, unemployed young men, We are the 99%

Instead I saw in their behavior a trace of how their parents and grandparents had lived before the white settlers came, a way of life that shines a new light on an ever more urgent and perplexing problem that was first raised by the economist John Maynard Keynes at the height of the Great Depression, a time when in this part of the Kalahari manketti nuts still fell from the trees and kudu bearing their giant spiral horns walked gamely into hunters’ paths. In the winter of 1930, Keynes was understandably preoccupied with the depression that was strangling the life out of European and American economies and the collapse of his personal fortune in the stock market crash the preceding year. Perhaps to persuade himself of the ephemeral nature of the crisis, he published an optimistic essay titled “The Economic Possibilities for our Grandchildren.”1 “My purpose in this essay … is not to examine the present or the near future, but to disembarrass myself of short views and take wings into the future,” explained Keynes in its introductory paragraphs.

“True happiness is to enjoy the present, without anxious dependence upon the future, not to amuse ourselves with either hopes or fears but to rest satisfied with what we have, which is sufficient, for he that is so wants nothing.” —Seneca AFFLUENCE WITHOUT ABUNDANCE Southern Africa and the Kalahari Basin Khoisan Peoples and Language Groups of Southern Africa Key Archaeological Sites in Khoisan History Eastern and Central Namibia The Bantu Expansion Notes Chapter 1: The Rewards of Hard Work 1   All quotes by Keynes in this chapter are from his essay “The Economic Possibilities for Our Grandchildren” published in J. M. Keynes, Essays in Persuasion (New York: W. W. Norton, 1963), 358–73. 2   Richard B. Lee and Irven DeVore, Man the Hunter (Chicago: Aldine, 1968). 3   Richard B. Lee, The !Kung San: Men, Women and Work in a Foraging Society (Cambridge, UK: Cambridge University Press, 1979). 4   Sherwood Washburn, foreword to Richard B. Lee and Irven DeVore, eds., Kalahari Hunter-Gatherers: Studies of the !

In advanced economies, the airwaves are packed with the rhetoric of politicians and ordinary people alike invoking the virtues of “strivers” and “working families” and decrying the laziness of “shirkers” and “freeloaders.” And in most less-developed economies, consultants and experts of all kinds spend their energy developing policy briefs and grand plans to create jobs. Almost everywhere full employment remains an ideal for politicians of all shades, among whom fears of rising unemployment invoke the specter of electoral defeat. It is no wonder, then, that John Maynard Keynes believed that our desire to solve the “economic problem” was not only “expressly evolved by nature” but was the sum of “all our impulses and deepest instincts.” He just failed to recognize that economics became a problem only with the transition to agriculture and that our preoccupation with solving this problem was a consequence of our ancestors’ having created it in the first place. If the agrarian equation between hard work and prosperity is an enduring legacy of the Neolithic Revolution, it is not the only one.


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Willful: How We Choose What We Do by Richard Robb

activist fund / activist shareholder / activist investor, Alvin Roth, Asian financial crisis, asset-backed security, Bernie Madoff, capital asset pricing model, cognitive bias, collapse of Lehman Brothers, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, delayed gratification, diversification, diversified portfolio, effective altruism, endowment effect, Eratosthenes, experimental subject, family office, George Akerlof, index fund, information asymmetry, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, lake wobegon effect, loss aversion, market bubble, market clearing, money market fund, Pareto efficiency, Paul Samuelson, Peter Singer: altruism, principal–agent problem, profit maximization, profit motive, Richard Thaler, Silicon Valley, sovereign wealth fund, survivorship bias, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, ultimatum game

“The Labor Wedge: MRS vs. MPN.” Review of Economic Dynamics 17, no. 2 (2014): 206–223. Kestenbaum, David. “Keynes Predicted We Would Be Working 15-Hour Weeks. Why Was He So Wrong?” NPR Planet Money. Podcast audio, August 13, 2015. http://www.npr.org/2015/08/13/432122637/keynes-predicted-we-would-be-working-15-hour-weeks-why-was-he-so-wrong (accessed February 2, 2019). Keynes, John Maynard. “Economic Possibilities for our Grandchildren.” In Keynes, Essays in Persuasion, 358–373. New York: W.W. Norton, 1963. ———. The General Theory of Employment, Interest, and Money. New York: Harcourt, 1964. ———. “My Early Beliefs.” In The Bloomsbury Group: A Collection of Memoirs and Commentary, edited by S. P. Rosenbaum, 82–97. Toronto: University of Toronto Press, Inc., 1995. Kierkegaard, Søren. Either/Or: Part II. Translated by Howard V.

Why, for example, would I give this person a break today but not tomorrow, and why not someone else equally close to me or equally worthy? A cost-­benefit calculation didn’t always apply. Finally, I began to wonder what effect seeing the world in terms of rational choice has on our inner lives. Does removing everything from its context to determine the rate of exchange at which we would trade this for that—even if subconsciously—impoverish our experience? I wondered whether John Maynard Keynes might have been right when he warned, the “pseudorational view of human nature [leads] to a thinness, a superficiality, not only of judgment, but also of feeling.”4 Theory Collides with Evidence In 1992, I moved to New York City to become the head options trader for the derivatives subsidiary of the Dai-Ichi Kangyo Bank (DKB), Japan’s largest bank at the time. I came to love DKB. My job was a sport that I could play every day.

It shot up to 90 percent in 1970 and higher math became commonplace. 2. As Jacob Viner wrote in 1925, “There are many who would place greater stress on the importance of the process of desire-fulfillment itself than on the gratifications or other states of consciousness which result from such fulfillment” (“Utility Concept in Value Theory,” 641). 3. Veblen, “Limitations of Marginal Utility,” 620. 4. Skidelsky, John Maynard Keynes, 224. 5. Huizinga, Homo Ludens, 13. 6. Keynes, General Theory of Employment, Interest, and Money, 160. 7. See Dow and Dow, “Animal Spirits Revisited.” 8. Sen, “Maximization,” 747. 9. An experimental literature stretching back to 1956 (Brehm, “Postdecision Changes”) finds that subjects who choose between two equally valuable options will reevaluate the options after they choose. Subjects tend to increase their assessment of the value of the option they select and decrease their assessment of the value of the one they reject.


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Seventeen Contradictions and the End of Capitalism by David Harvey

accounting loophole / creative accounting, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business climate, California gold rush, call centre, central bank independence, clean water, cloud computing, collapse of Lehman Brothers, colonial rule, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, deskilling, drone strike, end world poverty, falling living standards, fiat currency, first square of the chessboard, first square of the chessboard / second half of the chessboard, Food sovereignty, Frank Gehry, future of work, global reserve currency, Guggenheim Bilbao, Gunnar Myrdal, income inequality, informal economy, invention of the steam engine, invisible hand, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Just-in-time delivery, knowledge worker, low skilled workers, Mahatma Gandhi, market clearing, Martin Wolf, means of production, microcredit, new economy, New Urbanism, Occupy movement, peak oil, phenotype, plutocrats, Plutocrats, Ponzi scheme, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Gordon, Ronald Reagan, short selling, Silicon Valley, special economic zone, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, Tyler Cowen: Great Stagnation, wages for housework, Wall-E, women in the workforce, working poor, working-age population

But what is certain is that the rise of the money form and the capacity for its private appropriation has created a space for the proliferation of human behaviours that are anything but virtuous and noble. Accumulations of wealth and power (accumulations that were ritually disposed of in the famous potlatch system of pre-capitalist societies) have not only been tolerated but welcomed and treated as something to be admired. This led the British economist John Maynard Keynes, writing on ‘Economic Possibilities for our Grandchildren’ in 1930, to hope that: When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues.

Contradiction 2: The Social Value of Labour and Its Representation by Money 1. This fascinating story is told in Paul Seabright (ed.), The Vanishing Rouble: Barter Networks and Non-Monetary Transactions in Post-Soviet Societies, London, Cambridge University Press, 2000. 2. John Maynard Keynes, Essays in Persuasion, New York, Classic House Books, 2009, p. 199. 3. Silvio Gesell, (1916); http:www.archive.org/details/TheNaturalEconomicOrder, p. 121. For some further discussion of Gesell’s ideas see John Maynard Keynes, The General Theory of Employment, Interest, and Money, New York, Harcourt Brace, 1964, p. 363, and Charles Eisenstein, Sacred Economics: Money, Gift and Society in the Age of Transition, Berkeley, CA, Evolver Editions, 2011. Contradiction 3: Private Property and the Capitalist State 1.

., Disposable Women and Other Myths of Global Capitalism, New York, Routledge, 2006 Index Numbers in italics indicate Figures. 2001: A Space Odyssey (film) 271 A Abu Ghraib, Iraq 202 acid deposition 255, 256 advertising 50, 121, 140, 141, 187, 197, 236, 237, 275, 276 Aeschylus 291 Afghanistan 202, 290 Africa and global financial crisis 170 growth 232 indigenous population and property rights 39 labour 107, 108, 174 ‘land grabs’ 39, 58, 77, 252 population growth 230 Agamben, Giorgio 283–4 agglomeration 149, 150 economies 149 aggregate demand 20, 80, 81, 104, 173 aggregate effective demand 235 agribusiness 95, 133, 136, 206, 247, 258 agriculture ix, 39, 61, 104, 113, 117, 148, 229, 239, 257–8, 261 Alabama 148 Algerian War (1954–62) 288, 290 alienation 57, 69, 125, 126, 128, 129, 130, 198, 213, 214, 215, 263, 266–70, 272, 275–6, 279–80, 281, 286, 287 Allende, Salvador 201 Althusser, Louis 286 Amazon 131, 132 Americas colonisation of 229 indigenous populations 283 Amnesty International 202 anti-capitalist movements 11, 14, 65, 110, 111, 162 anti-capitalist struggle 14, 110, 145, 193, 269, 294 anti-globalisation 125 anti-terrorism xiii apartheid 169, 202, 203 Apple 84, 123, 131 apprenticeships 117 Arab Spring movement 280 Arbenz, Jacobo 201 Argentina 59, 107, 152, 160, 232 Aristotelianism 283, 289 Aristotle 1, 4, 200, 215 arms races 93 arms traffickers 54 Arrighi, Giovanni 136 Adam Smith in Beijing 142 Arthur, Brian: The Nature of Technology 89, 95–9, 101–4, 110 artificial intelligence xii, 104, 108, 120, 139, 188, 208, 295 Asia ‘land grabs’ 58 urbanisation 254 assembly lines 119 asset values and the credit system 83 defined 240 devalued 257 housing market 19, 20, 21, 58, 133 and predatory lending 133 property 76 recovery of 234 speculation 83, 101, 179 associationism 281 AT&T 131 austerity xi, 84, 177, 191, 223 Australia 152 autodidacts 183 automation xii, 103, 105, 106, 108, 138, 208, 215, 295 B Babbage, Charles 119 Bangkok riots, Thailand (1968) x Bangladesh dismantlement of old ships 250 factories 129, 174, 292 industrialisation 123 labour 108, 123, 129 protests against unsafe labour conditions 280 textile mill tragedies 249 Bank of England 45, 46 banking bonuses 164 electronic 92, 100, 277 excessive charges 84 interbank lending 233 and monopoly power 143 national banks supplant local banking in Britain and France 158 net transfers between banks 28 power of bankers 75 private banks 233 profits 54 regional banks 158 shell games 54–5 systematic banking malfeasance 54, 61 Baran, Paul and Sweezy, Paul: Monopoly Capitalism 136 Barcelona 141, 160 barrios pobres ix barter 24, 25, 29 Battersea Power Station, London 255 Battle of Algiers, The (film) 288 Bavaria, Germany 143, 150 Becker, Gary 186 Bernanke, Ben 47 Bhutan 171 billionaires xi, 165, 169, 170 biodiversity 246, 254, 255, 260 biofuels 3 biomedical engineering xii Birmingham 149 Bitcoin 36, 109 Black Panthers 291 Blade Runner (film) 271 Blankfein, Lloyd 239–40 Bohr, Niels 70 Bolivia 257, 260, 284 bondholders xii, 32, 51, 152, 158, 223, 240, 244, 245 bonuses 54, 77, 164, 178 Bourdieu, Pierre 186, 187 bourgeois morality 195 bourgeois reformism 167, 211 ‘Brady Bonds’ 240 Braudel, Fernand 193 Braverman, Harry: Labor and Monopoly Capital 119 Brazil a BRIC country 170, 228 coffee growers 257 poverty grants 107 unrest in (2013) 171, 243, 293 Brecht, Bertolt 265, 293 Bretton Woods (1944) 46 brewing trade 138 BRIC countries 10, 170, 174, 228 Britain alliance between state and London merchant capitalists 44–5 banking 158 enclosure movement 58 lends to United States (nineteenth century) 153 suppression of Mau Mau 291 surpluses of capital and labour sent to colonies 152–3 welfare state 165 see also United Kingdom British Empire 115, 174 British Museum Library, London 4 British Petroleum (BP) 61, 128 Buffett, Peter 211–12, 245, 283, 285 Buffett, Warren 211 bureaucracy 121–2, 165, 203, 251 Bush, George, Jr 201, 202 C Cabet, Étienne 183 Cabral, Amilcar 291 cadastral mapping 41 Cadbury 18 Cairo uprising (2011) 99 Calhoun, Craig 178 California 29, 196, 254 Canada 152 Cape Canaveral, Florida 196 capital abolition of monopolisable skills 119–20 aim of 92, 96–7, 232 alternatives to 36, 69, 89, 162 annihilation of space through time 138, 147, 178 capital-labour contradiction 65, 66, 68–9 and capitalism 7, 57, 68, 115, 166, 218 centralisation of 135, 142 circulation of 5, 7, 8, 53, 63, 67, 73, 74, 75, 79, 88, 99, 147, 168, 172, 177, 234, 247, 251, 276 commodity 74, 81 control over labour 102–3, 116–17, 166, 171–2, 274, 291–2 creation of 57 cultural 186 destruction of 154, 196, 233–4 and division of labour 112 economic engine of 8, 10, 97, 168, 172, 200, 253, 265, 268 evolution of 54, 151, 171, 270 exploitation by 156, 195 fictitious 32–3, 34, 76, 101, 110–11, 239–42 fixed 75–8, 155, 234 importance of uneven geographical development to 161 inequality foundational for 171–2 investment in fixed capital 75 innovations 4 legal-illegal duality 72 limitless growth of 37 new form of 4, 14 parasitic forms of 245 power of xii, 36, 47 private capital accumulation 23 privatisation of 61 process-thing duality 70–78 profitability of 184, 191–2 purpose of 92 realisation of 88, 173, 192, 212, 231, 235, 242, 268, 273 relation to nature 246–63 reproduction of 4, 47, 55, 63, 64, 88, 97, 108, 130, 146, 161, 168, 171, 172, 180, 181, 182, 189, 194, 219, 233, 252 spatiality of 99 and surplus value 63 surpluses of 151, 152, 153 temporality of 99 tension between fixed and circulating capital 75–8, 88, 89 turnover time of 73, 99, 147 and wage rates 173 capital accumulation, exponential growth of 229 capital gains 85, 179 capital accumulation 7, 8, 75, 76, 78, 102, 149, 151–5, 159, 172, 173, 179, 192, 209, 223, 228–32, 238, 241, 243, 244, 247, 273, 274, 276 basic architecture for 88 and capital’s aim 92, 96 collapse of 106 compound rate of 228–9 and the credit system 83 and democratisation 43 and demographic growth 231 and household consumerism 192 and lack of aggregate effective demand in the market 81 and the land market 59 and Marx 5 maximising 98 models of 53 in a new territories 152–3 perpetual 92, 110, 146, 162, 233, 265 private 23 promotion of 34 and the property market 50 recent problems of 10 and the state 48 capitalism ailing 58 an alternative to 36 and capital 7, 57, 68, 115, 166, 218 city landscape of 160 consumerist 197 contagious predatory lawlessness within 109 crises essential to its reproduction ix; defined 7 and demand-side management 85 and democracy 43 disaster 254–5, 255 economic engine of xiii, 7–8, 11, 110, 220, 221, 252, 279 evolution of 218 geographical landscape of 146, 159 global xi–xii, 108, 124 history of 7 ‘knowledge-based’ xii, 238 and money power 33 and a moneyless economy 36 neoliberal 266 political economy of xiv; and private property rights 41 and racialisation 8 reproduction of ix; revivified xi; vulture 162 capitalist markets 33, 53 capitalo-centric studies 10 car industry 121, 138, 148, 158, 188 carbon trading 235, 250 Caribbean migrants 115 Cartesian thinking 247 Cato Institute 143 Central America 136 central banks/bankers xi–xii, 37, 45, 46, 48, 51, 109, 142, 156, 161, 173, 233, 245 centralisation 135, 142, 144, 145, 146, 149, 150, 219 Césaire, Aimé 291 CFCs (chloro-fluorocarbons) 248, 254, 256, 259 chambers of commerce 168 Chandler, Alfred 141 Chaplin, Charlie 103 Charles I, King 199 Chartism 184 Chávez, Hugo 123, 201 cheating 57, 61, 63 Cheney, Dick 289 Chicago riots (1968) x chicanery 60, 72 children 174 exploitation of 195 raising 188, 190 trading of 26 violence and abuse of 193 Chile 136, 194, 280 coup of 1973 165, 201 China air quality 250, 258 becomes dynamic centre of a global capitalism 124 a BRIC country 170, 228 capital in (after 2000) 154 class struggles 233 and competition 150, 161 consumerism 194–5, 236 decentralisation 49 dirigiste governmentality 48 dismantlement of old ships 250 dispossessions in 58 education 184, 187 factories 123, 129, 174, 182 famine in 124–5 ‘great leap forward’ 125 growth of 170, 227, 232 income inequalities 169 industrialisation 232 Keynesian demand-side and debt-financed expansion xi; labour 80, 82, 107, 108, 123, 174, 230 life expectancy 259 personal debt 194 remittances 175 special economic zones 41, 144 speculative booms and bubbles in housing markets 21 suburbanisation 253 and technology 101 toxic batteries 249–50 unstable lurches forward 10 urban and infrastructural projects 151 urbanisation 232 Chinese Communist Party 108, 142 Church, the 185, 189, 199 circular cumulative causation 150 CitiBank 61 citizenship rights 168 civil rights 202, 205 class affluent classes 205 alliances 143, 149 class analysis xiii; conflict 85, 159 domination 91, 110 plutocratic capitalist xiii; power 55, 61, 88, 89, 92, 97, 99, 110, 134, 135, 221, 279 and race 166, 291 rule 91 structure 91 class struggle 34, 54, 67, 68, 85, 99, 103, 110, 116, 120, 135, 159, 172, 175, 183, 214, 233 climate change 4, 253–6, 259 Clinton, President Bill 176 Cloud Atlas (film) 271 CNN 285 coal 3, 255 coercion x, 41–4, 53, 60–63, 79, 95, 201, 286 Cold War 153, 165 collateralised debt obligations (CDOs) 78 Collins, Suzanne: The Hunger Games 264 Colombia 280 colonialism 257 the colonised 289–90 indigenous populations 39, 40 liberation from colonial rule 202 philanthropic 208, 285 colonisation 229, 262 ‘combinatorial evolution’ 96, 102, 104, 146, 147, 248 commercialisation 262, 263, 266 commodification 24, 55, 57, 59–63, 88, 115, 140, 141, 192, 193, 235, 243, 251, 253, 260, 262, 263, 273 commodities advertising 275 asking price 31 and barter 24 commodity exchange 39, 64 compared with products 25–6 defective or dangerous 72 definition 39 devaluation of 234 exchange value 15, 25 falling costs of 117 importance of workers as buyers 80–81 international trade in 256 labour power as a commodity 62 low-value 29 mobility of 147–8 obsolescence 236 single metric of value 24 unique 140–41 use value 15, 26, 35 commodity markets 49 ‘common capital of the class’ 142, 143 common wealth created by social labour 53 private appropriation of 53, 54, 55, 61, 88, 89 reproduction of 61 use values 53 commons collective management of 50 crucial 295 enclosure of 41, 235 natural 250 privatised 250 communications 99, 147, 148, 177 communism 196 collapse of (1989) xii, 165 communist parties 136 during Cold War 165 scientific 269 socialism/communism 91, 269 comparative advantage 122 competition and alienated workers 125 avoiding 31 between capitals 172 between energy and food production 3 decentralised 145 and deflationary crisis (1930s) 136 foreign 148, 155 geopolitical 219 inter-capitalist 110 international 154, 175 interstate 110 interterritorial 219 in labour market 116 and monopoly 131–45, 146, 218 and technology 92–3 and turnover time of capital 73, 99 and wages 135 competitive advantage 73, 93, 96, 112, 161 competitive market 131, 132 competitiveness 184 complementarity principle of 70 compounding growth 37, 49, 222, 227, 228, 233, 234, 235, 243, 244 perpetual 222–45, 296 computerisation 100, 120, 222 computers 92, 100, 105, 119 hardware 92, 101 organisational forms 92, 93, 99, 101 programming 120 software 92, 99, 101, 115, 116 conscience laundering 211, 245, 284, 286 Conscious Capitalism 284 constitutional rights 58 constitutionality 60, 61 constitutions progressive 284 and social bond between human rights and private property 40 US Constitution 284 and usurpation of power 45 consumerism 89, 106, 160, 192–5, 197, 198, 236, 274–7 containerisation 138, 148, 158 contracts 71, 72, 93, 207 contradictions Aristotelian conception of 4 between money and the social labour money represents 83 between reality and appearance 4–6 between use and exchange value 83 of capital and capitalism 68 contagious intensification of 14 creative use of 3 dialectical conception of 4 differing reactions to 2–3 and general crises 14 and innovation 3 moved around rather than resolved 3–4 multiple 33, 42 resolution of 3, 4 two modes of usage 1–2 unstable 89 Controller of the Currency 120 corporations and common wealth 54 corporate management 98–9 power of 57–8, 136 and private property 39–40 ‘visible hand’ 141–2 corruption 53, 197, 266 cosmopolitanism 285 cost of living 164, 175 credit cards 67, 133, 277 credit card companies 54, 84, 278 credit financing 152 credit system 83, 92, 101, 111, 239 crises changes in mental conceptions of the world ix-x; crisis of capital 4 defined 4 essential to the reproduction of capitalism ix; general crisis ensuing from contagions 14 housing markets crisis (2007–9) 18, 20, 22 reconfiguration of physical landscapes ix; slow resolution of x; sovereign debt crisis (after 2012) 37 currency markets, turbulence of (late 1960s) x customary rights 41, 59, 198 D Davos conferences 169 DDT 259 Debord, Guy: The Society of the Spectacle 236 debt creation 236 debt encumbrancy 212 debt peonage 62, 212 decentralisation 49, 142, 143, 144, 146, 148, 219, 281, 295 Declaration of Independence (US) 284 decolonisation 282, 288, 290 decommodification 85 deindustrialisation xii, 77–8, 98, 110, 148, 153, 159, 234 DeLong, Bradford 228 demand management 81, 82, 106, 176 demand-side management 85 democracy 47, 215 bourgeois 43, 49 governance within capitalism 43 social 190 totalitarian 220, 292 democratic governance 220, 266 democratisation 43 Deng Xiaoping x depressions 49, 227 1930s x, 108, 136, 169, 227, 232, 234 Descartes, René 247 Detroit 77, 136, 138, 148, 150, 152, 155, 159, 160 devaluation 153, 155, 162 of capital 233 of commodities 234 crises 150–51, 152, 154 localised 154 regional 154 developing countries 16, 240 Dhaka, Bangladesh 77 dialectics 70 Dickens, Charles 126, 169 Bleak House 226 Dombey and Son 184 digital revolution 144 disabled, the 202 see also handicapped discrimination 7, 8, 68, 116, 297 diseases 10, 211, 246, 254, 260 disempowerment 81, 103, 116, 119, 198, 270 disinvestment 78 Disneyfication 276 dispossession accumulation by 60, 67, 68, 84, 101, 111, 133, 141, 212 and capital 54, 55, 57 economies of 162 of indigenous populations 40, 59, 207 ‘land grabs’ 58 of land rights of the Irish 40 of the marginalised 198 political economy of 58 distributional equality 172 distributional shares 164–5, 166 division of labour 24, 71, 112–30, 154, 184, 268, 270 and Adam Smith 98, 118 defined 112 ‘the detail division of labour’ 118, 121 distinctions and oppositions 113–14 evolution of 112, 120, 121, 126 and gender 114–15 increasing complexity of 124, 125, 126 industrial proletariat 114 and innovation 96 ‘new international division of labour’ 122–3 organisation of 98 proliferating 121 relation between the parts and the whole 112 social 113, 118, 121, 125 technical 113, 295 uneven geographical developments in 130 dot-com bubble (1990s) 222–3, 241 ‘double coincidence of wants and needs’ 24 drugs 32, 193, 248 cartels 54 Durkheim, Emile 122, 125 Dust Bowl (United States, 1930s) 257 dynamism 92, 104, 146, 219 dystopia 229, 232, 264 E Eagleton , Terry: Why Marx Was Right 1, 21, 200, 214–15 East Asia crisis of 1997–98 154 dirigiste governmentality 48 education 184 rise of 170 Eastern Europe 115, 230 ecological offsets 250 economic rationality 211, 250, 252, 273, 274, 275, 277, 278, 279 economies 48 advanced capitalist 228, 236 agglomeration 149 of dispossession 162 domination of industrial cartels and finance capital 135 household 192 informal 175 knowledge-based 188 mature 227–8 regional 149 reoriented to demand-side management 85 of scale 75 solidarity 66, 180 stagnant xii ecosystems 207, 247, 248, 251–6, 258, 261, 263, 296 Ecuador 46, 152, 284 education 23, 58, 60, 67–8, 84, 110, 127–8, 129, 134, 150, 156, 168, 183, 184, 185, 187, 188, 189, 223, 235, 296 efficiency 71, 92, 93, 98, 103, 117, 118, 119, 122, 126, 272, 273, 284 efficient market hypothesis 118 Egypt 107, 280, 293 Ehrlich, Paul 246 electronics 120, 121, 129, 236, 292 emerging markets 170–71, 242 employment 37 capital in command of job creation 172, 174 conditions of 128 full-time 274 opportunities for xii, 108, 168 regional crises of 151 of women 108, 114, 115, 127 see also labour enclosure movement 58 Engels, Friedrich 70 The Condition of the English Working Class in England 292 English Civil War (1642–9) 199 Enlightenment 247 Enron 133, 241 environmental damage 49, 61, 110, 111, 113, 232, 249–50, 255, 257, 258, 259, 265, 286, 293 environmental movement 249, 252 environmentalism 249, 252–3 Epicurus 283 equal rights 64 Erasmus, Desiderius 283 ethnic hatreds and discriminations 8, 165 ethnic minorities 168 ethnicisation 62 ethnicity 7, 68, 116 euro, the 15, 37, 46 Europe deindustrialisation in 234 economic development in 10 fascist parties 280 low population growth rate 230 social democratic era 18 unemployment 108 women in labour force 230 European Central Bank 37, 46, 51 European Commission 51 European Union (EU) 95, 159 exchange values commodities 15, 25, 64 dominance of 266 and housing 14–23, 43 and money 28, 35, 38 uniform and qualitatively identical 15 and use values 15, 35, 42, 44, 50, 60, 65, 88 exclusionary permanent ownership rights 39 experts 122 exploitation 49, 54, 57, 62, 68, 75, 83, 107, 108, 124, 126, 128, 129, 150, 156, 159, 166, 175, 176, 182, 185, 193, 195, 208, 246, 257 exponential growth 224, 240, 254 capacity for 230 of capital 246 of capital accumulation 223, 229 of capitalist activity 253 and capital’s ecosystem 255 in computer power 105 and environmental resources 260 in human affairs 229 and innovations in finance and banking 100 potential dangers of 222, 223 of sophisticated technologies 100 expropriation 207 externality effects 43–4 Exxon 128 F Facebook 236, 278, 279 factories ix, 123, 129, 160, 174, 182, 247, 292 Factory Act (1864) 127, 183 famine 124–5, 229, 246 Fannie Mae 50 Fanon, Frantz 287 The Wretched of the Earth 288–90, 293 fascist parties 280 favelas ix, 16, 84, 175 feminisation 115 feminists 189, 192, 283 fertilisers 255 fetishes, fetishism 4–7, 31, 36–7, 61, 103, 111, 179, 198, 243, 245, 269, 278 feudalism 41 financial markets 60, 133 financialisation 238 FIRE (finance, insurance and real estate) sections 113 fishing 59, 113, 148, 249, 250 fixity and motion 75–8, 88, 89, 146, 155 Food and Drug Administration 120 food production/supply 3, 229, 246, 248, 252 security 253, 294, 296 stamp aid 206, 292 Ford, Martin 104–8, 111, 273 foreclosure 21, 22, 24, 54, 58, 241, 268 forestry 113, 148, 257 fossil fuels 3–4 Foucault, Michel xiii, 204, 209, 280–81 Fourier, François Marie Charles 183 Fourierists 18 Fourteen Points 201 France banking 158 dirigiste governmentality under de Gaulle 48 and European Central Bank 46 fascist parties 280 Francis, Pope 293 Apostolic Exhortation 275–6 Frankfurt School 261 Freddie Mac 50 free trade 138, 157 freedom 47, 48, 142, 143, 218, 219, 220, 265, 267–270, 276, 279–82, 285, 288, 296 and centralised power 142 cultural 168 freedom and domination 199–215, 219, 268, 285 and the good life 215 and money creation 51 popular desire for 43 religious 168 and state finances 48 under the rule of capital 64 see also liberty and freedom freedom of movement 47, 296 freedom of thought 200 freedom of the press 213 French Revolution 203, 213, 284 G G7 159 G20 159 Gallup survey of work 271–2 Gandhi, Mahatma 284, 291 Gaulle, Charles de 48 gay rights 166 GDP 194, 195, 223 Gehry, Frank 141 gender discriminations 7, 8, 68, 165 gene sequences 60 General Motors xii genetic engineering xii, 101, 247 genetic materials 235, 241, 251, 261 genetically modified foods 101 genocide 8 gentrification 19, 84, 141, 276 geocentric model 5 geographical landscape building a new 151, 155 of capitalism 159 evolution of 146–7 instability of 146 soulless, rationalised 157 geopolitical struggles 8, 154 Germany and austerity 223 autobahns built 151 and European Central Bank 46 inflation during 1920s 30 wage repression 158–9 Gesell, Silvio 35 Ghana 291 global economic crisis (2007–9) 22, 23, 47, 118, 124, 132, 151, 170, 228, 232, 234, 235, 241 global financialisation x, 177–8 global warming 260 globalisation 136, 174, 176, 179, 223, 293 gold 27–31, 33, 37, 57, 227, 233, 238, 240 Golden Dawn 280 Goldman Sachs 75, 239 Google 131, 136, 195, 279 Gordon, Robert 222, 223, 230, 239, 304n2 Gore, Al 249 Gorz, André 104–5, 107, 242, 270–77, 279 government 60 democratic 48 planning 48 and social bond between human rights and private property 40 spending power 48 governmentality 43, 48, 157, 209, 280–81, 285 Gramsci, Antonio 286, 293 Greco, Thomas 48–9 Greece 160, 161, 162, 171, 235 austerity 223 degradation of the well-being of the masses xi; fascist parties 280 the power of the bondholders 51, 152 greenwashing 249 Guantanamo Bay, Cuba 202, 284 Guatemala 201 Guevara, Che 291 Guggenheim Museum, Bilbao 141 guild system 117 Guinea-Bissau 291 Gulf Oil Spill (2010) 61 H Habermas, Jürgen 192 habitat 246, 249, 252, 253, 255 handicapped, the 218 see also disabled Harvey, David The Enigma of Capital 265 Rebel Cities 282 Hayek, Friedrich 42 Road to Serfdom 206 health care 23, 58, 60, 67–8, 84, 110, 134, 156, 167, 189, 190, 235, 296 hedge funds 101, 162, 239, 241, 249 managers 164, 178 Heidegger, Martin 59, 250 Heritage Foundation 143 heterotopic spaces 219 Hill, Christopher 199 Ho Chi Minh 291 holocausts 8 homelessness 58 Hong Kong 150, 160 housing 156, 296 asset values 19, 20, 21, 58 ‘built to order’ 17 construction 67 controlling externalities 19–20 exchange values 14–23, 43 gated communities ix, 160, 208, 264 high costs 84 home ownership 49–50 investing in improvements 20, 43 mortgages 19, 21, 28, 50, 67, 82 predatory practices 67, 133 production costs 17 rental markets 22 renting or leasing 18–19, 67 self-built 84 self-help 16, 160 slum ix, 16, 175 social 18, 235 speculating in exchange value 20–22 speculative builds 17, 28, 78, 82 tenement 17, 160 terraced 17 tract ix, 17, 82 use values 14–19, 21–2, 23, 67 housing markets 18, 19, 21, 22, 28, 32, 49, 58, 60, 67, 68, 77, 83, 133, 192 crisis (2007–9) 18, 20, 22, 82–3 HSBC 61 Hudson, Michael 222 human capital theory 185, 186 human evolution 229–30 human nature 97, 198, 213, 261, 262, 263 revolt of 263, 264–81 human rights 40, 200, 202 humanism 269 capitalist 212 defined 283 education 128 excesses and dark side 283 and freedom 200, 208, 210 liberal 210, 287, 289 Marxist 284, 286 religious 283 Renaissance 283 revolutionary 212, 221, 282–93 secular 283, 285–6 types of 284 Hungary: fascist parties 280 Husserl, Edmund 192 Huygens, Christiaan 70 I IBM 128 Iceland: banking 55 identity politics xiii illegal aliens (‘sans-papiers’) 156 illegality 61, 72 immigrants, housing 160 imperialism 135, 136, 143, 201, 257, 258 income bourgeois disposable 235 disparities of 164–81 levelling up of 171 redistribution to the lower classes xi; see also wages indebtedness 152, 194, 222 India billionaires in 170 a BRIC country 170, 228 call centres 139 consumerism 236 dismantlement of old ships 250 labour 107, 230 ‘land grabs’ 77 moneylenders 210 social reproduction in 194 software engineers 196 special economic zones 144 unstable lurches forward 10 indigenous populations 193, 202, 257, 283 dispossession of 40, 59, 207 and exclusionary ownership rights 39 individualism 42, 197, 214, 281 Indonesia 129, 160 industrial cartels 135 Industrial Revolution 127 industrialisation 123, 189, 229, 232 inflation 30, 36, 37, 40, 49, 136, 228, 233 inheritance 40 Inner Asia, labour in 108 innovation 132 centres of 96 and the class struggle 103 competitive 219 as a double-edged sword xii; improving the qualities of daily life 4 labour-saving 104, 106, 107, 108 logistical 147 organisational 147 political 219 product 93 technological 94–5, 105, 147, 219 as a way out of a contradiction 3 insurance companies 278 intellectual property rights xii, 41, 123, 133, 139, 187, 207, 235, 241–2, 251 interest compound 5, 222, 224, 225, 226–7 interest-rate manipulations 54 interest rates 54, 186 living off 179, 186 on loans 17 money capital 28, 32 and mortgages 19, 67 on repayment of loans to the state 32 simple 225, 227 usury 49 Internal Revenue Service income tax returns 164 International Monetary Fund (IMF) 49, 51, 100, 143, 161, 169, 186, 234, 240 internet 158, 220, 278 investment: in fixed capital 75 investment pension funds 35–6 IOUs 30 Iran 232, 289 Iranian Revolution 289 Iraq war 201, 290 Ireland dispossession of land rights 40 housing market crash (2007–9) 82–3 Istanbul 141 uprising (2013) 99, 129, 171, 243 Italy 51,161, 223, 235 ITT 136 J Jacobs, Jane 96 James, C.L.R. 291 Japan 1980s economic boom 18 capital in (1980s) 154 economic development in 10 factories 123 growth rate 227 land market crash (1990) 18 low population growth rate 230 and Marshall Plan 153 post-war recovery 161 Jewish Question 213 JPMorgan 61 Judaeo-Christian tradition 283 K Kant, Immanuel 285 Katz, Cindi 189, 195, 197 Kenya 291 Kerala, India 171 Keynes, John Maynard xi, 46, 76, 244, 266 ‘Economic Possibilities for our Grandchildren’ 33–4 General Theory of Employment, Interest, and Money 35 Keynesianism demand management 82, 105, 176 demand-side and debt-financed expansion xi King, Martin Luther 284, 291 knowledge xii, 26, 41, 95, 96, 100, 105, 113, 122, 123, 127, 144, 184, 188, 196, 238, 242, 295 Koch brothers 292 Kohl, Helmut x L labour agitating and fighting for more 64 alienated workers 125, 126, 128, 129, 130 artisan 117, 182–3 and automation 105 capital/labour contradiction 65, 66, 68–9, 146 collective 117 commodification of 57 contracts 71, 72 control over 74, 102–11, 119, 166, 171–2, 274, 291–2 deskilling 111, 119 discipline 65, 79 disempowering workers 81, 103, 116, 119, 270 division of see division of labour; domestic 196 education 127–8, 129, 183, 187 exploitation of 54, 57, 62, 68, 75, 83, 107, 108, 126, 128, 129, 150, 156, 166, 175, 176, 182, 185, 195 factory 122, 123, 237 fair market value 63, 64 Gallup survey 271–2 house building 17 housework 114–15, 192 huge increase in the global wage labour force 107–8 importance of workers as buyers of commodities 80–81 ‘industrial reserve army’ 79–80, 173–4 migrations of 118 non-unionised xii; power of 61–4, 71, 73, 74, 79, 81, 88, 99, 108, 118–19, 127, 173, 175, 183, 189, 207, 233, 267 privatisation of 61 in service 117 skills 116, 118–19, 123, 149, 182–3, 185, 231 social see social labour; surplus 151, 152, 173–4, 175, 195, 233 symbolic 123 and trade unions 116 trading in labour services 62–3 unalienated 66, 89 unionised xii; unpaid 189 unskilled 114, 185 women in workforce see under women; worked to exhaustion or death 61, 182 see also employment labour markets 47, 62, 64, 66–9, 71, 102, 114, 116, 118, 166 labour-saving devices 104, 106, 107, 173, 174, 277 labour power commodification of 61, 88 exploitation of 62, 175 generation of surplus value 63 mobility of 99 monetisation of 61 private property character of 64 privatisation of 61 reserves of 108 Lagos, Nigeria, social reproduction in 195 laissez-faire 118, 205, 207, 281 land commodification 260–61 concept of 76–7 division of 59 and enclosure movement 58 establishing as private property 41 exhausting its fertility 61 privatisation 59, 61 scarcity 77 urban 251 ‘land grabs’ 39, 58, 77, 252 land market 18, 59 land price 17 land registry 41 land rents 78, 85 land rights 40, 93 land-use zoning 43 landlords 54, 67, 83, 140, 179, 251, 261 Latin America ’1and grabs’ 58, 77 labour 107 reductions in social inequality 171 two ‘lost decades’ of development 234 lawyers 22, 26, 67, 82, 245 leasing 16, 17, 18 Lebed, Jonathan 195 Lee Kuan-Yew 48 Leeds 149 Lefebvre, Henri 157, 192 Critique of Everyday Life 197–8 left, the defence of jobs and skills under threat 110 and the factory worker 68 incapable of mounting opposition to the power of capital xii; remains of the radical left xii–xiii Lehman Brothers investment bank, fall of (2008) x–xi, 47, 241 ‘leisure’ industries 115 Lenin, Vladimir 135 Leninism 91 Lewis, Michael: The Big Short 20–21 LGBT groups 168, 202, 218 liberation struggle 288, 290 liberty, liberties 44, 48–51, 142, 143, 212, 276, 284, 289 and bourgeois democracy 49 and centralised power 142 and money creation 51 non-coercive individual liberty 42 popular desire for 43 and state finances 48 liberty and freedom 199–215 coercion and violence in pursuit of 201 government surveillance and cracking of encrypted codes 201–2 human rights abuses 202 popular desire for 203 rhetoric on 200–201, 202 life expectancy 250, 258, 259 light, corpuscular theory of 70 living standards xii, 63, 64, 84, 89, 134, 175, 230 loans fictitious capital 32 housing 19 interest on 17 Locke, John 40, 201, 204 logos 31 London smog of 1952 255 unrest in (2011) 243 Los Angeles 150, 292 Louis XIV, King of France 245 Lovelace, Richard 199, 200, 203 Luddites 101 M McCarthyite scourge 56 MacKinnon, Catherine: Are Women Human?


pages: 179 words: 43,441

The Fourth Industrial Revolution by Klaus Schwab

3D printing, additive manufacturing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, barriers to entry, Baxter: Rethink Robotics, bitcoin, blockchain, Buckminster Fuller, call centre, clean water, collaborative consumption, commoditize, conceptual framework, continuous integration, crowdsourcing, digital twin, disintermediation, disruptive innovation, distributed ledger, Edward Snowden, Elon Musk, epigenetics, Erik Brynjolfsson, future of work, global value chain, Google Glasses, income inequality, Internet Archive, Internet of things, invention of the steam engine, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, life extension, Lyft, mass immigration, megacity, meta analysis, meta-analysis, more computing power than Apollo, mutually assured destruction, Narrative Science, Network effects, Nicholas Carr, personalized medicine, precariat, precision agriculture, Productivity paradox, race to the bottom, randomized controlled trial, reshoring, RFID, rising living standards, Sam Altman, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, smart cities, smart contracts, software as a service, Stephen Hawking, Steve Jobs, Steven Levy, Stuxnet, supercomputer in your pocket, TaskRabbit, The Future of Employment, The Spirit Level, total factor productivity, transaction costs, Uber and Lyft, uber lyft, Watson beat the top human players on Jeopardy!, WikiLeaks, winner-take-all economy, women in the workforce, working-age population, Y Combinator, Zipcar

http://www.frbsf.org/economic-research/publications/economic-letter/2015/february/economic-growth-information-technology-factor-productivity/ 21 The economist Brad DeLong makes this point in: J. Bradford DeLong, “Making Do With More”, Project Syndicate, 26 February 2015. http://www.project-syndicate.org/commentary/abundance-without-living-standards-growth-by-j--bradford-delong-2015-02 22 John Maynard Keynes, “Economic Possibilities for our Grandchildren” in Essays in Persuasion, Harcourt Brace, 1931. 23 Carl Benedikt Frey and Michael Osborne, “The Future of Employment: How Susceptible Are Jobs to Computerisation?”, Oxford Martin School, Programme on the Impacts of Future Technology, University of Oxford, 17 September 2013. http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf 24 Shelley Podolny, “If an Algorithm Wrote This, How Would You Even Know?”

We need, however, to also recognize and manage the negative impacts it can have, particularly with regard to inequality, employment and labour markets. 3.1.2 Employment Despite the potential positive impact of technology on economic growth, it is nonetheless essential to address its possible negative impact, at least in the short term, on the labour market. Fears about the impact of technology on jobs are not new. In 1931, the economist John Maynard Keynes famously warned about widespread technological unemployment “due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour”.22 This proved to be wrong but what if this time it were true? Over the past few years, the debate has been reignited by evidence of computers substituting for a number of jobs, most notably bookkeepers, cashiers and telephone operators.


pages: 261 words: 10,785

The Lights in the Tunnel by Martin Ford

"Robert Solow", Albert Einstein, Bill Joy: nanobots, Black-Scholes formula, business cycle, call centre, cloud computing, collateralized debt obligation, commoditize, creative destruction, credit crunch, double helix, en.wikipedia.org, factory automation, full employment, income inequality, index card, industrial robot, inventory management, invisible hand, Isaac Newton, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, knowledge worker, low skilled workers, mass immigration, Mitch Kapor, moral hazard, pattern recognition, prediction markets, Productivity paradox, Ray Kurzweil, Search for Extraterrestrial Intelligence, Silicon Valley, Stephen Hawking, strong AI, technological singularity, Thomas L Friedman, Turing test, Vernor Vinge, War on Poverty

As incentive-based income became more important relative to traditional wages, individuals would see increasingly potent incentives to act in environmentally conscious ways, and that would potentially have a significant, favorable impact on climate change and other environmental challenges in the coming decades. Keynesian Grandchildren While few contemporary economists seem particularly concerned about the seemingly inevitable transition to an automated economy, one legendary economist did have remarkable insight into the future. In 1930, as the world plunged into the Great Depression, John Maynard Keynes wrote an essay entitled “Economic Possibilities for our Grandchildren.”52 In his essay, Keynes coined the term “technological unemployment,” writing: We are being inflicted with a new disease of which some readers many not yet have heard the name, but of which they will hear a great deal in the years to come—namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.* *[ Today, when economists discuss the causes of the Great Depression, they tend to focus almost exclusively on the monetary policy of the Federal Reserve.

Web: http://www.foreignaffairs.org/19971101faessay3815/alan-s-blinder/is-government-too-political.html 49 Jeremy Rifkin, The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era, New York, Penguin Group, 1995. 50 Chapter 4: Transition Cornelia Dean, “Scientific Savvy? In U.S. Not Much”, New York Times, August 30, 2005, web: http://www.nytimes.com/2005/08/30/science/30profile.html 51 See Chris Anderson’s The Long Tail: Why the Future of Business is Selling Less of More, a book based on an article in Wired Magazine, October 2004. Web: http://www.wired.com/wired/archive/12.10/tail.html 52 John Maynard Keynes, “Economic Possibilities for our Grandchildren,” (written in 1930), Essays in Persuasion, New York, W.W. Norton, 1963. Web: http://www.econ.yale.edu/smith/econ116a/keynes1.pdf p. 195 footnote, Einstein’s view on technological unemployment, see: Walter Isaacson, Einstein: His Life and Universe, New York, Simon & Schuster, 2007, p.403. Chapter 5: The Green Light 53 For more on the challenges of addressing poverty, see: William Easterly, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics, Cambridge, MA, MIT Press, 2002.


Termites of the State: Why Complexity Leads to Inequality by Vito Tanzi

"Robert Solow", accounting loophole / creative accounting, Affordable Care Act / Obamacare, Andrei Shleifer, Andrew Keen, Asian financial crisis, asset allocation, barriers to entry, basic income, bitcoin, Black Swan, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, clean water, crony capitalism, David Graeber, David Ricardo: comparative advantage, deindustrialization, Donald Trump, Double Irish / Dutch Sandwich, experimental economics, financial repression, full employment, George Akerlof, Gini coefficient, Gunnar Myrdal, high net worth, hiring and firing, illegal immigration, income inequality, indoor plumbing, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labor-force participation, libertarian paternalism, Long Term Capital Management, market fundamentalism, means of production, moral hazard, Naomi Klein, New Urbanism, obamacare, offshore financial centre, open economy, Pareto efficiency, Paul Samuelson, price stability, principal–agent problem, profit maximization, pushing on a string, quantitative easing, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, The Chicago School, The Great Moderation, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, Tyler Cowen: Great Stagnation, universal basic income, unorthodox policies, urban planning, very high income, Vilfredo Pareto, War on Poverty, Washington Consensus, women in the workforce

In the views of these modern critics and of those who had taken part in the “Occupy Wall Street” movements a few years earlier, modern capitalism is clearly not “leading to a destination far better than our present place” for many people and workers. In the United States and in some other countries workers’ wages have stagnated for decades, the income distribution has become less even, and, in the views of these critics, our grandchildren will not live in a world as good as the present one. In another famous essay, “Economic Possibilities for Our Grandchildren,” written in 1930, Kenyes may not have offered as good a forecast of the future as some have interpreted those “possibilities” to offer. In that essay, Keynes worried about the fact that “technical efficiency [has] been taking place faster than we can deal with the problem of labor absorption” (Keynes, 1933, p. 358). He worried that “the love of money as a possession … [is] … a somewhat disgusting morbidity.”

The question to be asked is: What effects do these incomes and these consumption standards have on the psychology of less lucky persons and, importantly, on citizens who, in spite of their lower incomes, continue to have the power to vote in democratic countries? Can it be assumed that the poor and the average middle class voter will be grateful to the rich individuals, because the rich individuals are not allowing their absolute incomes to fall? This question merits being addressed, especially in countries that have market economies and continue to have democratic governments. In a classic article titled “Economic possibilities for our grandchildren”, first written in 1930, Keynes wrote that “the needs of human beings … fall into two classes – those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to our fellows”; he added that “needs of the second class … may … be insatiable” (in Keynes, 1933, p. 365).

., 3, 319 Du Pont, Pierre, 307 Dutch Republic, welfare policies in, 50 Dynamic scoring, 76 Eastern Europe Gini coefficient in, 317 laissez faire in, 35 taxation in, 381–82 Easy credit, 107–9 Eckstein, Otto, 2–5 Economic aristocracy, 117–18 Economic freedom deregulation and, 86 economic planning and, 159 income redistribution and, 159–60 regulations, effect of, 130–31 Economic growth. See Growth Economic planning. See also specific country overview, 25–28 economic freedom and, 159 Hayek on, 159 “Economic Possibilities for our Grandchildren” (Keynes), 29 Economics. See also specific topic constitutions and, 270–72 legal rules and, 252–53 supply-side economics, 33, 74–78, 395, 397 Economics of Our Patent System (Vaughan), 359 The Economist, 77, 203, 343, 355–56, 361, 366 Education entrepreneurs and, 309 income redistribution and, 193 as public good, 180–81 in US, 208 Efficient market hypothesis, 86–87 Einaudi, Luigi, 269, 342 Eisenhower, Dwight, 4, 40, 178 Elizabeth I (England), 215 Elmore, Bartow, 325 Employment entrepreneurs and, 309 quotas, 145–46 role of government, 189–90 stabilization policies and, 237 unemployment compensation, 237–38 “The End of Laissez Faire” (Keynes), 31–32 Energy industry, 17, 167, 283–84 Enron, 127–28, 172–73 Entertainment industry, 345, 348, 353 Entitlements, 50–51 The Entrepreneurial State (Mazzucato), 196 Entrepreneurs corporations and, 308 desires of, 308–9 education and, 309 employment and, 309 government, relationship with, 309–10 historical background, 306–7 income tax and, 308 infrastructure and, 309 laissez faire and, 307–8 obstacles to, 307–8 public resources and, 310 referee, government as, 310 Smith on, 307 taxation and, 309 in UK, 307 in US, 307 Environmental regulations, 147, 182, 183 Index Envy income inequality and, 319–21 poverty and, 216–18 Equitable growth, 310, 312 Esping-Anderson, Costa, 47 Ethical values of market, 398 European Central Bank, 244 European Commission, 113 European Monetary Union, 5, 69, 72, 260, 273 European Union Constitution (proposed), 271 “fake goods” in, 149 intellectual property in, 347 mislabeling of fish in, 149–50 occupational licensing in, 125–26 regulations in, 276 Exchanges, 91–94 asymmetry in, 94 complexity of, 92–94 contracts in, 92–94 Friedman on, 114–15 Hayek on, 93, 112–15 individuals, role of, 112–13 information in, 93, 112–13 Executive compensation in Australia, 364 in Austria, 364 bonuses, 82–83, 85–86 in Denmark, 364 directors, role of, 364–65 in financial institutions, 168–69 income inequality in, 82–83, 85–86, 105–6 increase in, 387, 398 intellectual property and, 348, 363–64 in Japan, 364 in Norway, 364 performance-based compensation, 363–64 in Sweden, 364 in UK, 364 in US, 169, 363, 364 Ex post income distribution, 118, 119 Expropriation, 136 Externalities balancing of, 164 Coase Theorem and, 183–85 correcting or reducing through regulations, 147, 281–82 cross-border externalities, 185–86 drones as, 165 environmental regulations and, 182, 183 federalism and, 183–84 global government and, 120–21 guns as, 165 income inequality and, 321 inter-institutional externalities, 290 431 legal rules and, 255 poverty and, 216–17 public goods and, 181–82 regulations and, 164 smoking as, 164 urbanization and, 91, 163–64 Facebook, 347 “Fake goods,” 149 Fascism, 23, 231, 266–67 Fashion industry, 345 Federalism in Australia, 284 in Brazil, 284 in Canada, 284 externalities and, 183–84 legal rules and, 260 regulations and, 125, 126, 173, 284–85 in US, 260, 284 The Federalist Papers (Madison), 249 Fees, 142 Financial crises complexity and, 156 government intervention and, 156 Great Depression, 22, 26, 31, 253 Great Recession, 76, 109, 318 moral hazard and, 156–57 Southeast Asian financial crisis (1997-1998), 109, 243–44 2007-2008 Financial Crisis.


pages: 733 words: 179,391

Adaptive Markets: Financial Evolution at the Speed of Thought by Andrew W. Lo

"Robert Solow", Albert Einstein, Alfred Russel Wallace, algorithmic trading, Andrei Shleifer, Arthur Eddington, Asian financial crisis, asset allocation, asset-backed security, backtesting, bank run, barriers to entry, Berlin Wall, Bernie Madoff, bitcoin, Bonfire of the Vanities, bonus culture, break the buck, Brownian motion, business cycle, business process, butterfly effect, buy and hold, capital asset pricing model, Captain Sullenberger Hudson, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computerized trading, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, Daniel Kahneman / Amos Tversky, delayed gratification, Diane Coyle, diversification, diversified portfolio, double helix, easy for humans, difficult for computers, Ernest Rutherford, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, Fractional reserve banking, framing effect, Gordon Gekko, greed is good, Hans Rosling, Henri Poincaré, high net worth, housing crisis, incomplete markets, index fund, interest rate derivative, invention of the telegraph, Isaac Newton, James Watt: steam engine, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, Louis Pasteur, mandelbrot fractal, margin call, Mark Zuckerberg, market fundamentalism, martingale, merger arbitrage, meta analysis, meta-analysis, Milgram experiment, money market fund, moral hazard, Myron Scholes, Nick Leeson, old-boy network, out of africa, p-value, paper trading, passive investing, Paul Lévy, Paul Samuelson, Ponzi scheme, predatory finance, prediction markets, price discovery process, profit maximization, profit motive, quantitative hedge fund, quantitative trading / quantitative finance, RAND corporation, random walk, randomized controlled trial, Renaissance Technologies, Richard Feynman, Richard Feynman: Challenger O-ring, risk tolerance, Robert Shiller, Robert Shiller, Sam Peltzman, Shai Danziger, short selling, sovereign wealth fund, Stanford marshmallow experiment, Stanford prison experiment, statistical arbitrage, Steven Pinker, stochastic process, stocks for the long run, survivorship bias, Thales and the olive presses, The Great Moderation, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Malthus, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Triangle Shirtwaist Factory, ultimatum game, Upton Sinclair, US Airways Flight 1549, Walter Mischel, Watson beat the top human players on Jeopardy!, WikiLeaks, Yogi Berra, zero-sum game

Star Trek taught me that sometimes things need to be believed in before they can be seen. We need optimistic speculation and vision to go where no one has gone before. This includes reimagining the financial system. So in that spirit, I’d like to do some reimagining in this concluding chapter and speculate about the future of finance and the finance of the future. “COMPUTER, MANAGE MY PORTFOLIO!” In his important essay, “Economic Possibilities for Our Grandchildren,” John Maynard Keynes wrote that “there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed.”2 Keynes believed, as do I, that a Star Trek–like “age of leisure and of abundance” for everyone is within human reach. Keynes was writing in 1930, during the depths of the Great Depression, a catastrophic time in economic history, but he could see beyond the global financial catastrophe to a much better time ahead.

New York: Bloomsbury USA. 450 • References Keasar, Tamar, Ella Rashkovich, Dan Cohen, and Avi Shmida. 2002. “Bees in TwoArmed Bandit Situations: Foraging Choices and Possible Decision Mechanisms.” Behavioral Ecology 13: 757–765. Kendall, Maurice G. 1953. “The Analysis of Economic Time-Series, Part I: Prices.” Journal of the Royal Statistical Society, Ser. A. 96: 11–25. Keynes, John Maynard. 1936. The General Theory of Employment, Interest and Money. London: Macmillan. –––. 1963. “Economic Possibilities for our Grandchildren.” In Essays in Persuasion, 358–373. New York: W. W. Norton. Khandani, Amir, and Andrew W. Lo. 2007. “What Happened to the Quants in August 2007?” Journal of Investment Management 5: 5–54. –––. 2011. “What Happened to the Quants in August 2007? Evidence from Factors and Transactions Data.” Journal of Financial Markets 14: 1– 46. Khandani, Amir E., Andrew W. Lo, and Robert C. Merton. 2013.

., 121–122 deterministic strategy, 190, 191, 192, 197, 200 de Waal, Frans, 337 Diagnostic and Statistical Manual of Mental Disorders (DSM), 125–126 Dictator Game, 337 differential reproduction, 146, 152, 187 Digital Age, 163 discount rate, 98, 416 DNA, 187; database of, 402–403; discovery of, 137, 144, 401; evolutionary theory confirmed by, 137–138; of identical twins, 159, 161; mutations of, 418–419; of related species, 136, 146, 150, 151–152 Dobzhansky, Theodosius, 140 Dodd, David, 234 Dodd-Frank Wall Street Reform and Consumer Protection Act (2010), 228, 329, 375 dodo, 149 dopamine, 87–88, 89, 91, 97, 99, 409 dopamine dysregulation syndrome, 186 dorsal anterior cingulate cortex, 86 dorsolateral prefrontal cortex, 337, 339 double blind tests, 123 Double Eagle Fund, 234 doubling down, 60–61, 62, 84, 189 Douglas, Michael, 345, 346 Dow Jones Industrial Average, 22, 358 Down syndrome, 111 Duchenne muscular dystrophy, 409 Dunedin Multidisciplinary Health and Development Study, 160 Dyck, I. J. Alexander, 353–354 dynamic index funds, 267–269, 271, 273, 398–399 dyscalculia, 125 dyslexia, 125 East India Company, 412 ECM1 gene, 144 e-commerce, 405 “Economic Possibilities for Our Grandchildren” (Keynes), 397 Eddington, Arthur, 141 Edison, Thomas, 356 Education of a Speculator, The (Niederhoffer), 277 Efficient Markets Hypothesis, 5, 14, 16, 35, 92, 112–113, 122, 213; Adaptive Markets Hypothesis vs., 2, 198, 207–208, 214, 225; counterintuitive quality of, 21, 25, 26–27; experimental validation of, 40–43; Fama’s formulation of, 21–25, 209; index funds inspired by, 27–28, 263; irrationality explained away by, 108–109; limitations of, Index 3, 175, 176–177, 206; as orthodoxy, 38, 70, 72–74, 182, 185, 234; physics in lineage of, 211; Samuelson’s formulation of, 20–21, 25.


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Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence by Jerry Kaplan

Affordable Care Act / Obamacare, Amazon Web Services, asset allocation, autonomous vehicles, bank run, bitcoin, Bob Noyce, Brian Krebs, business cycle, buy low sell high, Capital in the Twenty-First Century by Thomas Piketty, combinatorial explosion, computer vision, corporate governance, crowdsourcing, en.wikipedia.org, Erik Brynjolfsson, estate planning, Flash crash, Gini coefficient, Goldman Sachs: Vampire Squid, haute couture, hiring and firing, income inequality, index card, industrial robot, information asymmetry, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Loebner Prize, Mark Zuckerberg, mortgage debt, natural language processing, Own Your Own Home, pattern recognition, Satoshi Nakamoto, school choice, Schrödinger's Cat, Second Machine Age, self-driving car, sentiment analysis, Silicon Valley, Silicon Valley startup, Skype, software as a service, The Chicago School, The Future of Employment, Turing test, Watson beat the top human players on Jeopardy!, winner-take-all economy, women in the workforce, working poor, Works Progress Administration

It’s to rebalance the supply of economically motivated workers with the available pool of paid jobs. We can do this by adjusting the incentives for people to do other productive things with their time. I’m by no means the first one to consider what the world will be like when our basic needs can be met without our own labor. None other than John Maynard Keynes, the legendary economist, wrote a fascinating meditation on this question in 1930 entitled “Economic Possibilities for Our Grandchildren.” In this thoughtful essay, he projects that within a century (which is nearly up, of course), continued economic growth would permit us to meet the basic needs of all humans with little to no effort. As he puts it, “All this means in the long run that mankind is solving its economic problem” (his italics). He goes on to distinguish between absolute needs and relative needs, suggesting that once the former are met, many people will “devote their energies to non-economic purposes.”44 His economic analysis was spot on but, to our disgrace, his expectations for wealth distribution have yet to be realized.

See assets ownership stock markets IP addresses, 28 iPhone, 46, 198 IRAs (individual retirement accounts), 169 Jain, Kapil, 213n7 Jennings, Ken, 30, 150 Jeopardy! (TV quiz show), 30, 36, 150, 198–99 job mortgage loans proposal, 13–15, 153–57 jobs. See labor market John, George, 70, 72 Johnson, Lyndon B., 167 Kaiser Permanente, 214n8 Kennedy, John F., ix Keynes, John Maynard, “Economic Possibilities for Our Grandchildren,” 186 kitchen equipment, multipurpose, 46–47 Kiva Systems, 135 Kleiner, Perkins, Caufield and Byers, 95 knowledge engineers, 23 Komisar, Randy, 218n15 Labor Department, 157 labor market, 119–27 advanced technology and, 191 alternatives to paid work and, 185–86 autonomous systems as threat to, 10–12, 20, 126–27, 131–58 average salary and, 116 competition for jobs and, 121–25 conventional economics and, 12 education-work sequence and, 13, 153, 157–58 excess workers and, 158 exclusions from, 170–71 federal measures and, 170, 171–72 historical comparisons and, 115–16, 164, 222n3 job skills and (see skills) letters of intent to hire and, 14, 154, 155 predictions about, 138–39, 140 reasons for working and, 184–85 salaries and, 116, 120, 145 tectonic shifts in, 133–35 turnover (2013) in, 137 workday standardization and, 171 work incentives and, 184–85 working adult statistics and, 172–74, 176.

For instance, you may have shares in a retirement fund that holds a particular stock in its name, as opposed to yours—but you are the entity we are trying to measure. As a first approximation, I would suggest that the closure has to be computed until it reaches a natural person. 43. William McBride, “New Study Ponders Elimination of the Corporate Income Tax,” Tax Foundation, April 11, 2014, http://taxfoundation.org/blog/new-study-ponders-elimination-corporate-income-tax. 44. John Maynard Keynes, Essays in Persuasion (New York: Classic House Books, 2009). OUTRODUCTION 1. These are called “portmanteaus,” ironically itself a mash-up of the French words porter (carry) and manteau (coat). 2. John Philip Sousa, “The Menace of Mechanical Music,” Appleton’s 8 (1906), http://explorepahistory.com/odocument.php?docId=1-4-1A1. 3. Harry Pearson is quoted at http://en.wikipedia.org/wiki/Comparison_of_analog_and_digital_recording, last modified December 11, 2014; Michael Fremer is quoted by Eric Drosin, “Vinyl Rises from the Dead as Music Lovers Fuel Revival,” Wall Street Journal, May 20, 1997, http://www.wsj.com/articles/SB864065981213541500. 4.


pages: 807 words: 154,435

Radical Uncertainty: Decision-Making for an Unknowable Future by Mervyn King, John Kay

"Robert Solow", Airbus A320, Albert Einstein, Albert Michelson, algorithmic trading, Antoine Gombaud: Chevalier de Méré, Arthur Eddington, autonomous vehicles, availability heuristic, banking crisis, Barry Marshall: ulcers, battle of ideas, Benoit Mandelbrot, bitcoin, Black Swan, Bonfire of the Vanities, Brownian motion, business cycle, business process, capital asset pricing model, central bank independence, collapse of Lehman Brothers, correlation does not imply causation, credit crunch, cryptocurrency, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, demographic transition, discounted cash flows, disruptive innovation, diversification, diversified portfolio, Donald Trump, easy for humans, difficult for computers, Edmond Halley, Edward Lloyd's coffeehouse, Edward Thorp, Elon Musk, Ethereum, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, fear of failure, feminist movement, financial deregulation, George Akerlof, germ theory of disease, Hans Rosling, Ignaz Semmelweis: hand washing, income per capita, incomplete markets, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Jeff Bezos, Johannes Kepler, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Snow's cholera map, John von Neumann, Kenneth Arrow, Long Term Capital Management, loss aversion, Louis Pasteur, mandelbrot fractal, market bubble, market fundamentalism, Moneyball by Michael Lewis explains big data, Nash equilibrium, Nate Silver, new economy, Nick Leeson, Northern Rock, oil shock, Paul Samuelson, peak oil, Peter Thiel, Philip Mirowski, Pierre-Simon Laplace, popular electronics, price mechanism, probability theory / Blaise Pascal / Pierre de Fermat, quantitative trading / quantitative finance, railway mania, RAND corporation, rent-seeking, Richard Feynman, Richard Thaler, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Coase, sealed-bid auction, shareholder value, Silicon Valley, Simon Kuznets, Socratic dialogue, South Sea Bubble, spectrum auction, Steve Ballmer, Steve Jobs, Steve Wozniak, Tacoma Narrows Bridge, Thales and the olive presses, Thales of Miletus, The Chicago School, the map is not the territory, The Market for Lemons, The Nature of the Firm, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Davenport, Thomas Malthus, Toyota Production System, transaction costs, ultimatum game, urban planning, value at risk, World Values Survey, Yom Kippur War, zero-sum game

Commentary on Evans and Stanovich (2013)’, Perspectives on Psychological Science , Vol. 8, No. 3 (2013), 257–62 Keren, G. and Schul, Y., ‘Two Is Not Always Better than One: A Critical Evaluation of Two-System Theories’, Perspectives on Psychological Science , Vol. 4, No. 6 (2009), 533–50 Keynes, G. and Keynes, J. M., Essays in Biography (London: Macmillan and Co., 1933) Keynes, J. M., ‘Economic Possibilities for Our Grandchildren’ (1930) in Keynes, J. M., Essays in Persuasion (London: Macmillan and Co., 1931) Keynes, J. M., ‘The General Theory of Employment’, Quarterly Journal of Economics , Vol. 51, No. 2 (1937), 209–23 Keynes, J. M., The General Theory of Employment, Interest and Money (London: Macmillan and Co., 1936) Keynes, J. M., ‘Professor Tinbergen’s Method’, Economic Journal , Vol. 49, No. 195 (1939), 558–77 Keynes, J.

In this book we will describe the considerable confusion and economic damage which has arisen as a result of the failure to recognise that the terms ‘risk’, ‘uncertainty’ and ‘rationality’ have acquired technical meanings in economics which do not correspond to the everyday use of these words. And over the last century economists have attempted to elide that historic distinction between risk and uncertainty, and to apply probabilities to every instance of our imperfect knowledge of the future. The difference between risk and uncertainty was the subject of lively debate in the inter-war period. Two great economists – Frank Knight in Chicago and John Maynard Keynes in Cambridge, England – argued forcefully for the continued importance of the distinction. Knight observed that ‘a measurable uncertainty, or “risk” proper, as we shall use the term, is so far different from an unmeasurable one that it is not in effect an uncertainty at all’. 17 Keynes made a similar distinction. In an article summarising his magnum opus, The General Theory of Employment, Interest and Money , he wrote: By ‘uncertain’ knowledge, let me explain, I do not mean merely to distinguish what is known for certain from what is only probable.

The Indifference Principle The solutions to the problem of points and the Monty Hall game rely on what has become known as the Indifference Principle – that if we have no reason to think one thing more likely than another, we can attach equal probabilities to each. We assumed that the Duke and Marquis were equally likely to win each of the remaining games, and perhaps there was a frequency distribution of past results of similar games to guide our conjecture. In the Monty Hall problem, we judged that if there were three identical boxes the probability that the keys were in any one of them was one third. 17 John Maynard Keynes is known to everyone for his many contributions to public policy in Britain and internationally during the inter-war period and the Second World War. Before the Great War, however, Keynes had completed a fellowship dissertation – in effect, his doctoral thesis – at King’s College, Cambridge. That work became the basis of A Treatise on Probability , published in 1921. It contains a chapter on the Indifference Principle.


pages: 611 words: 130,419

Narrative Economics: How Stories Go Viral and Drive Major Economic Events by Robert J. Shiller

agricultural Revolution, Albert Einstein, algorithmic trading, Andrei Shleifer, autonomous vehicles, bank run, banking crisis, basic income, bitcoin, blockchain, business cycle, butterfly effect, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, central bank independence, collective bargaining, computerized trading, corporate raider, correlation does not imply causation, cryptocurrency, Daniel Kahneman / Amos Tversky, debt deflation, disintermediation, Donald Trump, Edmond Halley, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, full employment, George Akerlof, germ theory of disease, German hyperinflation, Gunnar Myrdal, Gödel, Escher, Bach, Hacker Ethic, implied volatility, income inequality, inflation targeting, invention of radio, invention of the telegraph, Jean Tirole, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, litecoin, market bubble, money market fund, moral hazard, Northern Rock, nudge unit, Own Your Own Home, Paul Samuelson, Philip Mirowski, plutocrats, Plutocrats, Ponzi scheme, publish or perish, random walk, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, Rubik’s Cube, Satoshi Nakamoto, secular stagnation, shareholder value, Silicon Valley, speech recognition, Steve Jobs, Steven Pinker, stochastic process, stocks for the long run, superstar cities, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, theory of mind, Thorstein Veblen, traveling salesman, trickle-down economics, tulip mania, universal basic income, Watson beat the top human players on Jeopardy!, We are the 99%, yellow journalism, yield curve, Yom Kippur War

Many economists have learned that it pays to flatter businesspeople, whose support is useful to economists’ careers. Describing the economy as driven only by abstract economic forces suggests that the economy operates in a moral vacuum, that there is no criticism of their leadership. John Maynard Keynes: Narrative Economist Kristol’s dismissal of opinion polls notwithstanding, some of the most famous economic forecasts in world history appear to be based substantially on observations of narratives and worries about their human consequences. In his 1919 book Economic Consequences of the Peace, Cambridge economist John Maynard Keynes predicted that Germany would become deeply embittered by the heavy reparations imposed by the Versailles treaty ending World War I. Keynes was not the only person to make such a prediction at the end of the war; for example, the pacifist Jane Addams led a campaign for compassion for the defeated Germans.11 But Keynes tied his argument to evidence about economic reality.

Kent, Richard J. 2007. “A 1929 Application of Multiplier Analysis by Keynes.” History of Political Economy 39(3):529–43. Kermack, William Ogilvy, and Anderson Gray McKendrick. 1927. “A Contribution to the Mathematical Theory of Epidemics.” Proceedings of the Royal Society 115(772):701–21. Keynes, John Maynard. 1920 [1919]. Economic Consequences of the Peace. London: Macmillan. ________. 1932. “Economic Possibilities for Our Grandchildren (1930).” In Essays in Persuasion, 358–373. New York: Harcourt Brace. ________. 1936. The General Theory of Employment, Interest, and Money. London: Palgrave Macmillan. Kirnarskaya, Dina. 2009. The Natural Musician: On Abilities, Giftedness, and Talent. Oxford: Oxford University Press. Klages, Mary. 2006. Literary Theory: A Guide for the Perplexed. London: Bloomsbury Academic.

Irving Kristol, writing in 1977, expresses the typical economist’s view succinctly, dismissing public opinion polls purporting to measure business confidence: It is all supremely silly. Business confidence—as represented by the willingness to invest in new plant and equipment—is not a psychological phenomenon but an economic one. It is what Mr. Carter and what Mr. Burns do that counts, not what they say. John Maynard Keynes may have believed—and some of his disciples obviously still believe—that the propensity to invest is governed by the high or low “animal spirits” that prevail among businessmen. But then, Keynesian economists have always had a poor opinion of the intelligence of businessmen, whom they represent as temperamental children, to be paternalistically “managed.” … What governs business confidence are the prospects for profitable investment.


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The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines by William Davidow, Michael Malone

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, agricultural Revolution, Airbnb, American Society of Civil Engineers: Report Card, Automated Insights, autonomous vehicles, basic income, bitcoin, blockchain, blue-collar work, Bob Noyce, business process, call centre, cashless society, citizen journalism, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, cryptocurrency, disintermediation, disruptive innovation, distributed ledger, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Francis Fukuyama: the end of history, Geoffrey West, Santa Fe Institute, gig economy, Gini coefficient, Hyperloop, income inequality, industrial robot, Internet of things, invention of agriculture, invention of movable type, invention of the printing press, invisible hand, Jane Jacobs, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, license plate recognition, Lyft, Mark Zuckerberg, mass immigration, Network effects, new economy, peer-to-peer lending, QWERTY keyboard, ransomware, Richard Florida, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Simon Kuznets, Snapchat, speech recognition, Stuxnet, TaskRabbit, The Death and Life of Great American Cities, The Rise and Fall of American Growth, the scientific method, trade route, Turing test, Uber and Lyft, uber lyft, universal basic income, uranium enrichment, urban planning, zero day, zero-sum game, Zipcar

The other correlated parts that have to change to reduce cultural lag are our systems of governance, beliefs, habits, cultural norms, and values. Almost a century ago John Maynard Keynes foresaw many of the economic and cultural challenges we are now facing. Keynes was deeply worried about a new societal dysfunction—technological unemployment (what he called job loss due to automation).6 He knew then, just as we know now, how difficult it would be for people who were threatened by change to adapt to it, and he accurately foresaw the stresses that rapid increases in productivity would exert on our value system. In 1930, in his now-classic article, “Economic Possibilities for Our Grandchildren,” Keynes postulated the end of the Protestant work ethic—one of our most basic values—and imagined a time when the accumulation of wealth would no longer be of high social importance: [T]echnical improvements in manufacture and transport have been proceeding at a greater rate in the last ten years than ever before in history.

“Gilgamesh and Civilization,” Chamelionfire1, December 17, 2013, https://chameleonfire1.wordpress.com/2013/12/17/gilgamesh-and-civilization/ (accessed June 28, 2019). 5. “Fintech, the Incredible Growth of P2P (Peer to Peer) in China,” Marketing to China, September 22, 2017, https://www.marketingtochina.com/fintech-incredible-growth-p2p-peer-peer-china/ (accessed June 28, 2019). 6. John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” Marxists.org, 1930, https://www.marxists.org/reference/subject/economics/keynes/1930/our-grandchildren.htm (accessed June 28, 2019). 7. Ibid. 8. “What Does Voluntary Compliance Mean, in Regard to Taxes?,” Optima Tax Relief, July 29, 2014, https://www.optimataxrelief.com/voluntary-compliance-mean-regards-taxes/ (accessed June 28, 2019). 9. “Study Shows That 6 Percent of Americans Cheat on Their Taxes,” Mockensturm Ltd., March 2, 2018, https://www.mockltd.com/blog/2018/03/study-shows-that-6-percent-of-americans-cheat-on-their-taxes.shtml (accessed June 28, 2019). 10.

See also retail sector cybercrime and security, 132, 153–154 credit card, 74–76 cyber currencies, 78–80, 177–178 evolution of, 172–173 fake news classification as, 169–170 financial, 39–40, 75–76, 78–80, 171–172, 177–178 global effort needed for, 179 government response to, 172–176, 179 public utilities threat with, 173, 174 response rate relation to rate of, 171–172 Russia-based, 174 cyber currencies, 10, 83 blockchain technology of, 79, 80 electricity and miners involved with, 176 governance rules and systems, 176–178 government regulation needed for, 176–177 security with, 78–80, 177–178 as spatial equivalence, 16 cyber weapons, 16, 172–173, 174, 176 Daimler, Gottlieb, 53 Data and Goliath (Schneier), 127 Data Protection Directive, 129 data tracking/collection: advertising revenues’ role in, 89, 90, 120–123 algorithmic prisons with, 13, 114, 123–128 behavior manipulation in, 117, 121, 123 consumer protections against, 127–128 cookies’ role in, 89, 116, 117–118, 128 of credit rating agencies, 118–119 evolution and factors behind abuses of, 116–118 freemium business model role in, 121–123, 129–130 government agencies purchasing, 119, 131 information fiduciaries as protection for, 129–131 laws and regulations on, 128–130 liberty threats to and factors with, 13, 116–117, 123–128 privacy threat evolution with, 116–119 from social networking sites, 116, 118 transparency of, 127 Death and Life of Great American Cities, The (Jacobs), 109 Deep Blue, 46–47 delivery services, 102 democracy: authoritarianism threat to, 158–159 collective identity of citizens key to, 163, 166, 168 income inequality in relation to, 163–164 social media/networking threats to, 7, 18, 168–169 depression, 147–148, 166 Dichter, Ernest, 135 discrimination, 162–163, 165–166 displacement: business, 71, 72–73, 99 job, with job creation historically, 51–54, 106 job, without new job creation, 43, 51, 60–64, 98–99, 105–106 Distracted Minds (Gazzaley), 155 Echo, 119 economic policy and metrics: Depression-era, 67, 160 on monetizable productivity, 58–59 non-monetizable productivity in relation to, 52, 58–59, 66, 67, 68 unemployment rates in relation to, 106–107 “Economic Possibilities for Our Grandchildren” (Keynes), 187–189 economy: automation impacts on, 12–13 Autonomous, 60–61, 96–98 entrepreneurship, 110 gig, 7, 34, 63, 84, 85, 94 Second Economy contrasted with traditional, 97–98, 103 sharing, 70, 83–87, 100, 101–102 social empathy decline with decline of, 164–165 traditional compared to Autonomous, 96 elder care, 111 election tampering, 89, 167, 180, 186 electricity: cyber currency mining use of, 176 invention of, 29, 182 ELIZA, 46 Elsevier, Reed, 119 email, 60–61, 150 emotion detection technology, 115–116 empires, rise and fall of, 6–7, 24–25 End of History and the Last Man, The (Fukuyama), 158 Enlightenment, xii, 2, 22, 152 entrepreneurship, rates of, 110 Epic of Gilgamesh, The, 24, 183–184, 185 Equifax, 75–76, 118, 126, 130 Estonia, 174 ethnicity.


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WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

4chan, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, Amazon Mechanical Turk, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, blockchain, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, corporate governance, corporate raider, creative destruction, crowdsourcing, Danny Hillis, data acquisition, deskilling, DevOps, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Firefox, Flash crash, full employment, future of work, George Akerlof, gig economy, glass ceiling, Google Glasses, Gordon Gekko, gravity well, greed is good, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Khan Academy, Kickstarter, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, move fast and break things, Network effects, new economy, Nicholas Carr, obamacare, Oculus Rift, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, strong AI, TaskRabbit, telepresence, the built environment, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

Nordhaus, “Schumpeterian Profits in the American Economy: Theory and Measurement,” National Bureau of Economic Research, NBER Working Paper No. 10433, issued April 2004, doi:10.3386/w10433. 297 had to change its policies: Sam Shead, “Apple Is Finally Going to Start Publishing Its AI Research,” Business Insider, December 6, 2016, http://www.businessinsider.com/apple-is-finally-going-to-start-publishing-its-artificial-intelligence-research-2016-12. CHAPTER 14: WE DON’T HAVE TO RUN OUT OF JOBS 298 “live wisely and agreeably and well”: John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” in Essays in Persuasion (New York: Harcourt Brace, 1932), 358–73, available online from http://www.econ.yale.edu/smith/econ 116a/keynes1.pdf. 298 the world has been getting better: Max Roser and Esteban Ortiz-Ospina, “Global Extreme Poverty,” OurWorldIn Data.org, first published in 2013; substantive revision March 27, 2017, retrieved April 4, 2017, https://ourworldindata.org/extreme-poverty/. 299 once destroyed factory jobs: Carl Benedikt Frey and Michael A.

As Max Roser, creator of Our World in Data, a remarkable collection of visualizations about how the world has been getting better over the last five hundred years, notes: “Even in 1981 more than 50% of the world population lived in absolute poverty—this is now down to about 14%. This is still a large number of people, but the change is happening incredibly fast. For our present world, the data tells us that poverty is now falling more quickly than ever before in world history.” Much of Keynes’s essay, titled “Economic Possibilities for Our Grandchildren,” concerns the issue of what people might do with their time when productivity has increased to the point where the machines do all the work. Is there really not enough work left for humans to do? Keynes didn’t think so in 1930, and I don’t think so now. “We are suffering just now from a bad attack of economic pessimism,” he wrote. “It is common to hear people say that the epoch of enormous economic progress which characterised the nineteenth century is over; that the rapid improvement in the standard of life is now going to slow down; that a decline in prosperity is more likely than an improvement in the decade which lies ahead of us.

See fake news disruptive forces, xxiii disruptive technology, 351–52 Dobbs, Richard, xxiii “Dog and the Frisbee, The” (Haldane), 175 Doing Capitalism in the Innovation Economy (Janeway), 104–5, 274 DonorsChoose, 183 dot-com boom, 29 Dougherty, Dale, 28–29, 81, 99–100, 337 Drucker, Peter F., 250 Dvorak, John, 41 Dyson, George, 45 eBay, 39, 182–83, 294 “Economic Mechanism Design for Computerized Agents” (Varian), 261 “Economic Possibilities for Our Grandchildren” (Keynes), 298–99 economics, 271–73 assigning a value to caregiving, 310–11 efficiency wages, 197 employers’ 29-hour loophole, 194–95, 196 fundamental law of capitalism, 268 invisible hand of competition, 262–70 the “laws” of economics, 257–62 and leisure time, 308–11 machine money and people money, 306–7, 308, 309 minimum wage, 197–98, 264–68 secular stagnation, 271 Stiglitz exposes the 1%, 255 trickle down, 244, 265, 273 universal basic income, 305–6, 307–11 wealth inequality, 263–65 welfare economics, 263, 266, 307 economy, xxii and adaptations to change, xxiv–xxv creativity-based, 312–19 financial crisis of 2008, 172–73, 175, 238, 265, 275, 359 as government’s thick marketplace, 133 of Korea, 134 technology and the future of the economy scenario plan, 364–67 See also financial markets economy and Silicon Valley, 274–75 the Clothesline Paradox, 295–97 digital platforms and the real economy, 288–89 market capitalization/supermoney, 276–79, 280–84, 289 measuring value creation, 289–95 pool of qualified workers, 347–50 venture capital-backed startups, 275, 282–84 Y Combinator program for VC-funded companies, 286–87 education/training creating, sharing, and embedding into tools, 323–32, 334–36 as investment in other’s children, 320–21 for jobs, 303, 304, 321 lagging behind technology, 335–36 learning by doing, 337–41, 345–50 on-demand education, 341–45 Open Cloud Academy at Rackspace, 350 play element, 340–41 and social capital, 345–50 efficiency wages, 197 efficient market hypothesis, 259–61 “Eight Principles of Open Government Data” (Malamud, Lessig, and O’Reilly), 130–31 electric cars, safety-related load of, 66–67 Eliot, T.


pages: 476 words: 125,219

Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy by Robert W. McChesney

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, Albert Einstein, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, Automated Insights, barriers to entry, Berlin Wall, business cycle, Cass Sunstein, citizen journalism, cloud computing, collaborative consumption, collective bargaining, creative destruction, crony capitalism, David Brooks, death of newspapers, declining real wages, Double Irish / Dutch Sandwich, Erik Brynjolfsson, failed state, Filter Bubble, full employment, future of journalism, George Gilder, Gini coefficient, Google Earth, income inequality, informal economy, intangible asset, invention of agriculture, invisible hand, Jaron Lanier, Jeff Bezos, jimmy wales, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Julian Assange, Kickstarter, Mark Zuckerberg, Marshall McLuhan, means of production, Metcalfe’s law, mutually assured destruction, national security letter, Nelson Mandela, Network effects, new economy, New Journalism, Nicholas Carr, Occupy movement, offshore financial centre, patent troll, Peter Thiel, plutocrats, Plutocrats, post scarcity, price mechanism, profit maximization, profit motive, QWERTY keyboard, Ralph Nader, Richard Stallman, road to serfdom, Robert Metcalfe, Saturday Night Live, sentiment analysis, Silicon Valley, single-payer health, Skype, spectrum auction, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, Stewart Brand, Telecommunications Act of 1996, the medium is the message, The Spirit Level, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, Upton Sinclair, WikiLeaks, winner-take-all economy, yellow journalism

Jerry Mander, The Capitalist Papers: Fatal Flaws of an Obsolete System (Berkeley, CA: Counterpoint, 2012), 3, 4. 42. Ibid., 11. 43. James Robbin, “Free Market Flawed, Says Survey,” BBC News, Nov. 9, 2009, news.bbc.co.uk/2/hi/8347409.stm. 44. “New Poll: Socialism Is Gaining Popularity in America,” Cleveland Leader, Apr. 9, 2009, clevelandleader.com/node/9655. 45. See John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” in Essays in Persuasion (New York: W.W. Norton, 1963), 358–73. The essay was first published in 1930. 46. John Maynard Keynes, “National Self-Sufficiency,” Yale Review 22 (1933): 761. 47. Christopher Hayes, Twilight of the Elites: America After Meritocracy (New York: Crown, 2012), 239. 48. Schor, Plenitude; Wolff, Democracy at Work; Gar Alperovitz, America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy, 2d ed.

If a number of capitalists withdraw, they undermine demand for all products, and soon more capitalists suspend investment. This is a recession, and it is a part of a business cycle that has always existed under capitalism. Of course, recessions end when conditions change—inventories run down, wages fall, bad debt is cleared off the books—and generally turn into booms. Even at the business cycle’s peak, as contemporary Americans know well, it will not necessarily gravitate to full employment. Instead, as John Maynard Keynes posited in his General Theory, the logical resting spot for an advanced capitalist economy may be with significant unemployment and unused capacity. The business cycle may “peak” with millions unemployed and incomes in decline.75 A major conclusion of Keynesian economics was the need for an increased role of the government in the economy. If private investment was not forthcoming, the government could borrow (or use taxation to get) capital lying fallow, spend it, stimulate the economy, and thereby provide markets to stimulate private investment.

It is only recently, as capitalism has floundered, that it has become almost mandatory to regard capitalism as permanent, irreplaceable, and benevolent. As recently as the 1960s and 1970s, when it produced golden-age results in America by today’s standards, it was more common to have frank, no-holds-barred discussions of the system’s merits and demerits. Going back further, many of the great economists, including John Stuart Mill and John Maynard Keynes, understood capitalism as a historically specific system, not as the eternal state of nature for humanity. Mill and Keynes saw capitalism as solving the “economic problem” and eventually making a world without scarcity—and therefore without capitalism—possible. Granted, Mill and Keynes saw that outcome as generations away and championed capitalism in their own times, but their historical perspective sharpened their critique and gave it tremendous lasting significance.45 During the depths of the Great Depression, Keynes wrote an extraordinary essay acknowledging that economists, as well as business and political leaders, had been woefully wrong about the economy and how to make it work for the bulk of the population.


pages: 565 words: 151,129

The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism by Jeremy Rifkin

"Robert Solow", 3D printing, active measures, additive manufacturing, Airbnb, autonomous vehicles, back-to-the-land, big-box store, bioinformatics, bitcoin, business process, Chris Urmson, clean water, cleantech, cloud computing, collaborative consumption, collaborative economy, Community Supported Agriculture, Computer Numeric Control, computer vision, crowdsourcing, demographic transition, distributed generation, en.wikipedia.org, Frederick Winslow Taylor, global supply chain, global village, Hacker Ethic, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), intermodal, Internet of things, invisible hand, Isaac Newton, James Watt: steam engine, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Julian Assange, Kickstarter, knowledge worker, longitudinal study, Mahatma Gandhi, manufacturing employment, Mark Zuckerberg, market design, mass immigration, means of production, meta analysis, meta-analysis, natural language processing, new economy, New Urbanism, nuclear winter, Occupy movement, off grid, oil shale / tar sands, pattern recognition, peer-to-peer, peer-to-peer lending, personalized medicine, phenotype, planetary scale, price discrimination, profit motive, QR code, RAND corporation, randomized controlled trial, Ray Kurzweil, RFID, Richard Stallman, risk/return, Ronald Coase, search inside the book, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, smart cities, smart grid, smart meter, social web, software as a service, spectrum auction, Steve Jobs, Stewart Brand, the built environment, The Nature of the Firm, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, transaction costs, urban planning, Watson beat the top human players on Jeopardy!, web application, Whole Earth Catalog, Whole Earth Review, WikiLeaks, working poor, zero-sum game, Zipcar

The race Lange outlines is relentless over the long run, with productivity continually pushing costs and prices down, forcing profit margins to shrink. While most economists today would look at an era of nearly free goods and services with a sense of foreboding, a few earlier economists expressed a guarded enthusiasm over the prospect. Keynes, the venerable twentieth-century economist whose economic theories still hold considerable weight, penned a small essay in 1930 entitled “Economic Possibilities for Our Grandchildren,” which appeared as millions of Americans were beginning to sense that the sudden economic downturn of 1929 was in fact the beginning of a long plunge to the bottom. Keynes observed that new technologies were advancing productivity and reducing the cost of goods and services at an unprecedented rate. They were also dramatically reducing the amount of human labor needed to produce goods and services.

George, 242 The Descent of Man (Darwin), 63 Deutsche Telekom, 54, 101, 198 Dini, Erico, 97 DIY culture, 90, 94–95, 99–100 Dobb, Maurice, 40 Doctorow, Cory, 95 dominance of social media, 201 see also Facebook; Friendster; Myspace; Twitter driverless vehicle(s), 126, 230–231 Drucker, Peter, 264 Duffy, John, 137 eBay becoming an online monopoly, 201–205 cuts out the middlemen, 232 and free currency, 262 as a profit-seeking enterprise, 252 ecological footprint, 107, 274–276, 284, 286, 302 Econofly, 145 economic need for greener/cleaner energy, 10 “Economic Policy for the Information Economy” (Summers and DeLong), 7–9 “Economic Possibilities for Our Grandchildren” (Keynes), 6–7 The Economist, 5, 77–78, 121–122, 251, 259, 265 economy of abundance, 297–303 and a biosphere lifestyle, 297–303 circular, idea of a, 236–237 and the sustainable cornucopia, 273–296 education, higher. see massive open online courses (MOOCs) edX, 115–116 Eisenstein, Elizabeth, 179 electricity importance of, 51–53 liberates women, 285 Electric Power Research Institute (EPRI), 142, 293–294 electromagnetic spectrum, 148, 165, 167, 185, 189–190 electronic healthcare records, 13, 130, 244 Elkington, John, 264 The Empathetic Civilization (Hegel), 301 employment, new kinds of, 266–269 Enclosure Movement, 17, 31, 169 The End of Work (Rifkin), 121–122 energy adaptive computing, 85 Commons, 205–206 cooperatives, 215–217 costs at data centers, 84–86 and economics, 10–11 and fossil fuel(s). see fossil fuel(s) free, 81–84 and Germany. see Germany infrastructure is vulnerable to climate change, 290 IT. see Cleanweb Movement use, proactive rather than reactive, 143 Energy Watch Group, 83–84 entrepreneurialism, strengthened by Protestant theologians, 59 entropy, definition of, 10 Entropy: A New World View (Rifkin), 100 environmentalist(s), 170–172, 187–188 Environmental Movement, 173, 182, 185 era of transparency, 75–77 Etsy, 91, 262 European Bioinformatics Institute, 86 European Commission, 11, 76–77 European enclosures, and birth of the market economy, 29–38 exponential curves, 79– 81 “extreme productivity,” 3, 70–73 ExxonMobil, 49, 54 the Fab Lab, 70, 94–95, 310 Facebook becoming an online monopoly, 201–205 changes the concept of privacy, 76 as communication, 151, 234, 248, 250, 302 exploiting the Commons for commercial ends, 199–200, 310 and freedom, 226 and GM’s decision to yank ads from, 251 as a podium for activism, 189 revenue and market share, 201 and the “Social Energy App,” 147 and Spotify, 145 and Yerdle, 237 and Zuckerberg, 145 Farber, Amy, 241–242 Federal Communications Commission (FCC), 147–151, 194, 198–199 Ferris, Cameron, 246 fertility rate, falling, 285 Filabot, 96 “fit-lifters,” 127 Flickr, 180, 234, 250 forager/hunter society(ies), 298–302 Ford, Henry, 52–54, 71, 98, 105, 123, 308 Fortune 500 companies, 22, 114, 175, 310 fossil fuel(s) costs of, 69, 87, 91, 140, 142 and cyberattacks, 294 location of, 22–23 reliance on, 54, 194–195 stalwart supporters of, 86–87 versus renewables, 69–72, 81–87, 216–217, 267, 283 see also oil “free” energy, 81–84 as a marketing device, 5 in price and free from scarcity, 273 Free Culture Movement, 173–188, 202 Freecycle Network (TFN), 236 “free-riders dilemma,” 156, 258 Free Software Foundation, 174–175 Free Software Movement, 100, 170, 174–179 free wi-fi, 147–149 feudal commons, 16–17, 29–32, 36–37, 58–61, 132, 155–156, 167, 269 Foundation on Economic Trends (FOET), 165–167, 182 Friendster, 200, 204 Frischmann, Brett M., 193–194 Frydman, Gilles, 242 Gaia hypothesis, 184 Gandhi, Mahatma, 104–108 Gates, Bill, 171, 174 GDP, 17, 20–22, 54, 74, 123, 129, 240, 266 General Electric (GE), 13, 14, 54, 73–74, 165, 210, 234 General Motors, 53, 54, 228–230 General Public Licenses (GPL), 94, 175–176 Germany and cooperatives, 213–216 flood in, 287 and Google, 201 and renewable energy, 82–83, 101, 141, 253, 257 and 3D printing, 101–102 Gershenfeld, Neil, 94 Gillespie, Tarleton, 203 Girsky, Stephen, 228–229 globalization versus reopening the global commons, 187–192 GM, teams up with RelayRides, 228–229 GNU operating system, 174–176 God of oil. see Hall, Andy Google cashes in on selling Big Data, 199–200 and control of the U.S. media market, 54 and driverless vehicles, 230 energy usage, 85 favors free Wi-Fi connection, 148 market share and revenue generated by, 201 as natural monopoly, 202–205 Ngram Viewer, 18 primary revenue stream is weakening, 251 as tracking tool, 245 Gore, Al, 219 Gorenflo, Neal, 238 Gou, Terry, 124 “The Governing of the Commons” (Ostrom), 158–162 Gram Power, 103–104 Green Button initiative, 146 Great Chain of Being, 30, 58–59, 61 Great Recession, 20, 122–129, 233, 255–262, 281–282 green feed-in tariff(s), 139, 206 Guardian, 104, 116 guilds by trade, 36–37 Gutenberg, Johannes, 35–37 hacker(s) connotations of the term, 93 and cyberterrorists, 291–292 and environmentalist(s), 170–172, 187–188 and the Free Culture Movement, 173–174 and the Makers Movement, 99–104 and 3D printing, 95 Hall, Andy, 87 Hansen, James, 287 Happiness: Lessons from a New Science (Layard), 277 Haque, Umair, 253 Hardin, Garrett, 155–159 Hazen, Paul, 213 healthcare, 13, 74, 130, 240–247 hedonistic treadmill, 276 Hegel, Georg Friedrich, 279, 301 Heilbroner, Robert, 5, 105 Herr, Bill, 129 higher education. see massive open online courses (MOOCs) The High Price of Materialism (Kasser), 277 high-tech Armageddon. see cyber attacks/cyberterrorism Hoch, Dan, 243–244 Hotelling, Harold, 136–137, 150, 206–211 how best to judge economic success, 20–21 Hoyt, Robert, 58 human race empathetic sensibility of, 278–286, 301 and Enlightenment, 60–65 and human nature through a capitalist lens, 57–65 liberating the, 7, 70 and ostracism, 163 rethinking salvation, 58–59 what makes us happy, 276–285 Hume, David, 62, 308 hybrid economy. see capitalism; Collaborative Commons IBM, 13, 14, 80, 130, 234, 250 infofacture vs. manufacture, 90 Infrastructure: The Social Value of Shared Resources (Frischmann), 193–194 Integrated Transportation Provider Services (ITPS), 228 Intel, 79, 148 Internet Corporation for Assigned Names and Numbers (ICANN), 195–196 the Internet of Everything, 14, 73 the Internet generation, 132, 145, 179, 226, 230 the Internet of Things (IoT), 11–16, 65 and Big Data. see Big Data and the chief productivity officer (CPO), 15 as a double-edged sword, 78, 267 and healthcare. see healthcare made up of, 11, 14–15 and near zero marginal cost society, 73–78 negatives associated with, 14 obstacles that slowed the deployment of, 74 and smart cities. see smart cities as source of employment, 267–268 and use of sensors, 11–13, 73–74, 143, 219, 230 Internet of Things European Research Cluster, 11 infrastructure, requirements of, 14 Izz ad-Din al-Qassam Cyber Fighters, 292 Jakubowski, Marcin, 102–103 James, William, 279–280 Jennings, Ken, 130 Jobs, Steve, 305, 308 Jumpstart Our Business Start Ups Act, 257 Kaku, Michio, 79 Kasser, Tim, 277 Keynes, John Maynard, 5–7, 105, 268 Khoshnevis, Dr.

Many, though not all, of the old guard in the commercial arena can’t imagine how economic life would proceed in a world where most goods and services are nearly free, profit is defunct, property is meaningless, and the market is superfluous. What then? Some are just beginning to ask that question. They might find some solace in the fact that several of the great architects of modern economic thinking glimpsed the problem long ago. John Maynard Keynes, Robert Heilbroner, and Wassily Leontief, to name a few, pondered the critical contradiction that drove capitalism forward. They wondered whether, in the distant future, new technologies might so boost productivity and lower prices as to create the coming state of affairs. Oskar Lange, a University of Chicago professor of the early twentieth century, captured a sense of the conundrum underlying a mature capitalism in which the search for new technological innovations to advance productivity and cheapen prices put the system at war with itself.


pages: 463 words: 115,103

Head, Hand, Heart: Why Intelligence Is Over-Rewarded, Manual Workers Matter, and Caregivers Deserve More Respect by David Goodhart

active measures, Airbnb, Albert Einstein, assortative mating, basic income, Berlin Wall, Bernie Sanders, big-box store, Boris Johnson, Branko Milanovic, British Empire, call centre, Cass Sunstein, central bank independence, centre right, computer age, corporate social responsibility, COVID-19, Covid-19, David Attenborough, David Brooks, deglobalization, deindustrialization, delayed gratification, desegregation, deskilling, different worldview, Donald Trump, Elon Musk, Etonian, Fall of the Berlin Wall, Flynn Effect, Frederick Winslow Taylor, future of work, gender pay gap, gig economy, glass ceiling, illegal immigration, income inequality, James Hargreaves, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labour market flexibility, longitudinal study, low skilled workers, Mark Zuckerberg, mass immigration, new economy, Nicholas Carr, oil shock, pattern recognition, Peter Thiel, pink-collar, post-industrial society, post-materialism, postindustrial economy, precariat, reshoring, Richard Florida, Scientific racism, Skype, social intelligence, spinning jenny, Steven Pinker, superintelligent machines, The Bell Curve by Richard Herrnstein and Charles Murray, The Rise and Fall of American Growth, Thorstein Veblen, twin studies, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, wages for housework, winner-take-all economy, women in the workforce, young professional

The Head world is generally a secular one, with little feel for the mysteries of life, which is why so many of us today seek a substitute for it in everything from yoga and meditation to the green movement. Yet it is striking what a disappointing failure humanism has been. It has been an effective critic of religion but has provided no convincing alternative set of ideas on how to live well. John Maynard Keynes, writing about a world in which economic necessity has been largely overcome in his essay “Economic Possibilities for Our Grandchildren,” sees a return to religious principles. “I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue… We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin.”19 I recently visited St Edmundsbury Cathedral in Bury St Edmunds, where the tour guide told us about the carved angels looking down, wings spread, upholding the roof.

Nonetheless, the exam principle was now firmly established in the lives of the upper and middle classes, and professional associations now monitored entry into both the higher and lower professions with tests of cognitive competence of various kinds alongside straightforward know-how. By the 1930s the proportion of the adult male population in professional occupations remained below 10 percent in all rich countries. The cognitive class was too small to have significant political or cultural influence. The world was still largely ruled by tradition, religious belief, and the “practical men” who, according to John Maynard Keynes, writing in 1936, “believe themselves to be exempt from any intellectual influences, but are usually slaves of some defunct economist.” Keynes was a member of the loose grouping of English intellectuals and artists known as the Bloomsbury Group whose avant-garde ideas and ways of life—“they lived in squares, painted in circles, and loved in triangles,” as Dorothy Parker is said to have put it—had almost no impact on British society in the 1930s.

But before considering that history, we need to pause to consider in greater depth what we actually mean by “cognitive aptitude.” I. My American grandfather eagerly signed up for one of the new economics courses at Cambridge, England, just before the First World War, only to be told that his proposed tutor at Trinity College was away for the year. Trinity suggested an alternative young economist at King’s but warned that he was not “sound”; his name was John Maynard Keynes. My grandfather decided to study law instead. Chapter Three Cognitive Ability and the Meritocracy Puzzle To equate IQ with human virtue or wisdom or character or a whole variety of other of the most important measures of a value of a person is ridiculous. IQ is equivalent to chip speed, and superior chip speed will enable things that inferior chip speed will not enable. The same is true about just about any human attribute you can think of… Charles Murray Human intelligence and ingenuity are at the core of modern civilization and will remain so.


pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

"Robert Solow", Airbnb, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Clayton Christensen, Colonization of Mars, commoditize, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Elon Musk, Erik Brynjolfsson, fear of failure, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, high net worth, hiring and firing, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, technological singularity, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, Yogi Berra

At http://www.forbes.com/sites/gordonkelly/2014/03/21/the-majority-of-iphone-users-admit-to-blind-loyalty-why-this-a-problem-for-apple/#5a0731afdf62. Kelly, Kevin, “The New Socialism: Global Collectivist Society Is Coming Online.” Wired, May 22, 2009. At http://archive.wired.com/culture/culturereviews/magazine/17-06/nep_newsocialism?currentPage=all. Kelly, Thomas, “Sunk Costs, Rationality, and Acting for the Sake of the Past.” Noûs, 38.1 (2004): 60–85. Keynes, John Maynard, “Economic Possibilities for Our Grandchildren” (1930). In John Maynard Keynes, Essays in Persuasion. Norton, 1963. Kim, W. Chan, and Renée Mauborgne, Blue Ocean Strategy. Harvard Business School Press, 2005. Klein, Naomi, No Logo. Fourth Estate, 2010. Kleiner, Morris M., “Reforming Occupational Licensing Policies.” Hamilton Project Discussion Paper 2015-1. Brookings, Mar. 2015. At http://www.brookings.edu/~/media/research/files/papers/2015/03/11-hamilton-project-expanding-jobs/thp_kleinerdiscpaper_final.pdf.

., “The New Normal.” 33.Acemoglu, Aghion, and Zilibotti, “Distance to Frontier, Selection, and Economic Growth.” 34.Ranasinghe, “Impact of Policy Distortions”; Gabler and Poschke, “Experimentation by Firms, Distortions, and Aggregate Productivity”; Da-Rocha, Mendes Tavares, and Restuccia, “Policy Distortions and Aggregate Productivity with Endogenous Establishment-Level Productivity”; Bhattacharya, Guner, and Ventura, “Distortions, Endogenous Managerial Skills and Productivity Differences”; Bartelsman, Haltiwanger, and Scarpetta, “Cross-Country Differences in Productivity”; Restuccia and Rogerson, “Policy Distortions and Aggregate Productivity.” 35.Gabler and Poschke, “Experimentation by Firms, Distortions, and Aggregate Productivity.” 36.See for example Bhattacharya, Guner, and Ventura, “Distortions, Endogenous Managerial Skills and Productivity Differences.” 8 Capitalism and Robots 1.The Economist, “Coming to an Office Near You.” 2.Gapper and Waters, “Google Chief Warns of IT Threat.” 3.Matulka, “Timeline: The History of the Electric Car.” 4.Deffree, “Karl Benz Drives the First Automobile.” 5.Krugman, “The Big Meh.” 6.ATA, “New ATA Report Shows Growing Shortage of Qualified Truck Drivers.” 7.Akst, “What Can We Learn from Past Anxiety over Automation?” 8.Keynes, “Economic Possibilities for Our Grandchildren.” 9.Life Magazine, “Parking Consultants and Surfboarding Instructors May Keep the Economy Going.” 10.Kahn and Wiener, The Year 2000. 11.Akst, “What Can We Learn from Past Anxiety over Automation?” 12.Ad Hoc Committee on the Triple Revolution, “The Triple Revolution: Cybernation, Weaponry, Human Rights.” 13.Tracy, “Why Some of Google’s Coolest Projects Flop Badly.” 14.Tracy, “Why Some of Google’s Coolest Projects Flop Badly.” 15.Polymath Consulting, “A Brief History of Payments.” 16.Byrnes, “Technology Repaints the Payment Landscape.” 17.Mainelli and Milne, “The Impact and Potential of Blockchain,” 4. 18.Mainelli and Milne, “The Impact and Potential of Blockchain,” 5. 19.Simmons, “George Foster: Are Startups Really Job Engines?”

And the same conclusion largely holds for knowledge. The basic plot, if you will allow a simplification, in much of the intellectual history of the world centers around the battle between new discoveries and old dogma, and the former tends to win over the latter – not immediately, not in the short run, perhaps not even in the medium term, but in the long run new discoveries often do win. However, in the long run, as John Maynard Keynes noted, we are all dead. Political romanticism better suits a historian of ideas than a scholar of contemporary politics and economics. The judgment about the Danes in 1066 and All That, the humorous version of English history, does not apply to economic policy: you cannot be both “right and very romantic.”14 Innovation delayed is innovation denied. When opportunities to change markets with the help of a particular innovation are barred, they may not return as new opportunities in the future.


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Only Humans Need Apply: Winners and Losers in the Age of Smart Machines by Thomas H. Davenport, Julia Kirby

AI winter, Andy Kessler, artificial general intelligence, asset allocation, Automated Insights, autonomous vehicles, basic income, Baxter: Rethink Robotics, business intelligence, business process, call centre, carbon-based life, Clayton Christensen, clockwork universe, commoditize, conceptual framework, dark matter, David Brooks, deliberate practice, deskilling, digital map, disruptive innovation, Douglas Engelbart, Edward Lloyd's coffeehouse, Elon Musk, Erik Brynjolfsson, estate planning, fixed income, follow your passion, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, game design, general-purpose programming language, global pandemic, Google Glasses, Hans Lippershey, haute cuisine, income inequality, index fund, industrial robot, information retrieval, intermodal, Internet of things, inventory management, Isaac Newton, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joi Ito, Khan Academy, knowledge worker, labor-force participation, lifelogging, longitudinal study, loss aversion, Mark Zuckerberg, Narrative Science, natural language processing, Norbert Wiener, nuclear winter, pattern recognition, performance metric, Peter Thiel, precariat, quantitative trading / quantitative finance, Ray Kurzweil, Richard Feynman, risk tolerance, Robert Shiller, Robert Shiller, Rodney Brooks, Second Machine Age, self-driving car, Silicon Valley, six sigma, Skype, social intelligence, speech recognition, spinning jenny, statistical model, Stephen Hawking, Steve Jobs, Steve Wozniak, strong AI, superintelligent machines, supply-chain management, transaction costs, Tyler Cowen: Great Stagnation, Watson beat the top human players on Jeopardy!, Works Progress Administration, Zipcar

Other Depression-era job creation programs included the Civilian Conservation Corps, a program for young men focused on planting trees and building parks. It’s important to be clear that the Depression was the result of a massive failure of the financial system and not due to the automation of work that was proceeding apace in the nation’s factories. Still, the potential threat to jobs that automation also posed had certainly been noted. John Maynard Keynes, most famously, diagnosed in his 1930 essay “Economic Possibilities for Our Grandchildren” what he called a “new disease” in the world’s largest economies. He called it “technological unemployment” and explained that it was “due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor.” And a clever YouTube video, “No Humans Need Apply,” points out that it wouldn’t be that difficult for automation to lead to the same levels of unemployment—about 25 percent in the United States—found in the Depression.

But when the intent is to augment human capabilities, any kind of digital intelligence can be put to the task. Working in partnership with a machine can let you be you, only better. And it can let you keep your job, while making it a better one. Whatever Happened to the Fifteen-Hour Workweek? If you were reading this book half a century ago, you might be very surprised to find us referring to augmentation as something that would help you retain your work, not be rid of it. In 1928, John Maynard Keynes penned an essay he titled “Economic Prospects for Our Grandchildren,” which argued that decades of productivity and technology improvements would leave those progeny with a new kind of problem: figuring out what to do with their vast leisure time. He wrote: “For the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won.”9 Keynes expected that by now we’d all be working about fifteen hours per week.

Maddy Myers, “Google Glass: Inspired by Terminator,” Slice of MIT, May 30, 2013, https://slice.mit.edu/2013/05/30/google-glass-inspired-by-terminator/. 7. David Scott, remarks at the opening of the Computer Museum, June 10, 1982, transcript accessed October 29, 2015, http://klabs.org/history/history_docs/ech/agc_scott.pdf. 8. David A. Mindell, Digital Apollo: Human and Machine in Spaceflight (Cambridge, MA: MIT Press, 2008). 9. John Maynard Keynes, Essays in Persuasion (New York: Norton, 1963), 358–73. 10. David H. Autor, “Polanyi’s Paradox and the Shape of Employment Growth,” prepared for the Federal Reserve Bank of Kansas City’s economic policy symposium on “Reevaluating Labor Market Dynamics,” September 3, 2014, http://economics.mit.edu/files/9835. 11. Tyler Cowen, Average Is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013). 12.


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The Uninhabitable Earth: Life After Warming by David Wallace-Wells

"Robert Solow", agricultural Revolution, Albert Einstein, anthropic principle, Asian financial crisis, augmented reality, basic income, Berlin Wall, bitcoin, British Empire, Buckminster Fuller, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon-based life, cognitive bias, computer age, correlation does not imply causation, cryptocurrency, cuban missile crisis, decarbonisation, Donald Trump, effective altruism, Elon Musk, endowment effect, energy transition, everywhere but in the productivity statistics, failed state, fiat currency, global pandemic, global supply chain, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, Joan Didion, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, life extension, longitudinal study, Mark Zuckerberg, mass immigration, megacity, megastructure, mutually assured destruction, Naomi Klein, nuclear winter, Pearl River Delta, Peter Thiel, plutocrats, Plutocrats, postindustrial economy, quantitative easing, Ray Kurzweil, rent-seeking, ride hailing / ride sharing, Sam Altman, Silicon Valley, Skype, South China Sea, South Sea Bubble, Steven Pinker, Stewart Brand, the built environment, the scientific method, Thomas Malthus, too big to fail, universal basic income, University of East Anglia, Whole Earth Catalog, William Langewiesche, Y Combinator

Seven hundred years later, Basil Bunting, the Northumberland poet, wrote his own rendition of Chōmei’s story: Oh! There’s nothing to complain about. Buddha says: “None of the world is good.” I am fond of my hut… But even if I wanted to renounce the world, I wouldn’t be able to afford a hut in California. as old as John Maynard Keynes: Keynes extended the prediction—much, much talked about ever since—in an essay notably published in 1930, just after the stock market crash of 1929: John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” Nation and Athenaeum, October 11 and 18, 1930. “You can see the computer age”: This line first appeared in Robert M. Solow, “We’d Better Watch Out,” review of Manufacturing Matters by Stephen S. Cohen and John Zysman, The New York Times Book Review, July 12, 1987. a million transatlantic flights: Alex Hern, “Bitcoin’s Energy Usage Is Huge—We Can’t Afford to Ignore It,” The Guardian, January 17, 2018.

Elon Musk—it’s not the name of a man but a species-scale survival strategy. Nichol answers, “But I don’t want to live in a spaceship.” He looked genuinely surprised. In his line of work, he’d never met anyone who didn’t want to live in a spaceship. * * * — That technology might liberate us, collectively, from the strain of labor and material privation is a dream at least as old as John Maynard Keynes, who predicted his grandchildren would work only fifteen-hour weeks, and yet never ultimately fulfilled. In 1987, the year he won the Nobel Prize, economist Robert Solow famously commented, “You can see the computer age everywhere but in the productivity statistics.” This has been, even more so, the experience of most of those living in the developed world in the decades since—rapid technological change transforming nearly every aspect of everyday life, and yet yielding little or no tangible improvement in any conventional measures of economic well-being.


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Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, back-to-the-land, banking crisis, basic income, battle of ideas, blockchain, Boris Johnson, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, Cass Sunstein, centre right, collective bargaining, crowdsourcing, cryptocurrency, David Graeber, decarbonisation, deindustrialization, deskilling, Doha Development Round, Elon Musk, Erik Brynjolfsson, Ferguson, Missouri, financial independence, food miles, Francis Fukuyama: the end of history, full employment, future of work, gender pay gap, housing crisis, income inequality, industrial robot, informal economy, intermodal, Internet Archive, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, late capitalism, liberation theology, Live Aid, low skilled workers, manufacturing employment, market design, Martin Wolf, mass immigration, mass incarceration, means of production, minimum wage unemployment, Mont Pelerin Society, neoliberal agenda, New Urbanism, Occupy movement, oil shale / tar sands, oil shock, patent troll, pattern recognition, Paul Samuelson, Philip Mirowski, post scarcity, post-work, postnationalism / post nation state, precariat, price stability, profit motive, quantitative easing, reshoring, Richard Florida, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Slavoj Žižek, social web, stakhanovite, Steve Jobs, surplus humans, the built environment, The Chicago School, The Future of Employment, Tyler Cowen: Great Stagnation, universal basic income, wages for housework, We are the 99%, women in the workforce, working poor, working-age population

Rather than settling for marginal improvements in battery life and computer power, the left should mobilise dreams of decarbonising the economy, space travel, robot economies – all the traditional touchstones of science fiction – in order to prepare for a day beyond capitalism. Neoliberalism, as secure as it may seem today, contains no guarantee of future survival. Like every social system we have ever known, it will not last forever. Our task now is to invent what happens next. Notes INTRODUCTION 1.John Maynard Keynes, ‘Economic Possibilities for Our Grandchildren’, in Essays in Persuasion (New York: W. W. Norton & Co., 1963); George Young, The Russian Cosmists: The Esoteric Futurism of Nikolai Fedorov and His Followers (Oxford: Oxford University Press, 2012); Mark Dery, ‘Black to the Future: Interviews with Samuel R. Delany, Greg Tate, and Tricia Rose’, in Mark Dery, ed., Flame Wars: The Discourse of Cyberculture (Durham, NC: Duke University Press, 1994); Shulamith Firestone, The Dialectic of Sex: The Case for Feminist Revolution (New York: Morrow, 1970). 2.For exemplars of this stance, see Franco Berardi, After the Future (Edinburgh: AK Press, 2011); T.

, Organization, 2013, at sagepub.com. 58.Witold Rybczynski, Waiting for the Weekend (New York: Penguin, 1991), pp. 115–17; Thompson, ‘Time, Work-Discipline, and Industrial Capitalism’, p. 76. 59.Rybczynski, Waiting for the Weekend, p. 133. 60.Hunnicutt, Work Without End, p. 1. 61.Ibid., p. 155. 62.Ibid., pp. 147–9. 63.Paul Lafargue, ‘The Right to Be Lazy’, in Bernard Marszalek, ed., The Right to Be Lazy: Essays by Paul Lafargue (Oakland: AK Press, 2011), p. 34. 64.John Maynard Keynes, ‘Economic Possibilities for Our Grandchildren’, in Essays in Persuasion (New York: W. W. Norton, 1963); Hunnicutt, Work Without End, p. 155. 65.Marx, Capital, Volume III, p. 820. 66.Hunnicutt, Work Without End, Chapter 7. 67.A handful of EU countries – most notably France – have reduced the working week to as little as thirty-five hours, but the overall trend has been to maintain a forty-hour working week. The 1970s also saw some sectors strike explicitly in support of a shorter working week.


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The AI Economy: Work, Wealth and Welfare in the Robot Age by Roger Bootle

"Robert Solow", 3D printing, agricultural Revolution, AI winter, Albert Einstein, anti-work, autonomous vehicles, basic income, Ben Bernanke: helicopter money, Bernie Sanders, blockchain, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, computer age, conceptual framework, corporate governance, correlation does not imply causation, creative destruction, David Ricardo: comparative advantage, deindustrialization, deskilling, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, facts on the ground, financial intermediation, full employment, future of work, income inequality, income per capita, industrial robot, Internet of things, invention of the wheel, Isaac Newton, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, license plate recognition, Marc Andreessen, Mark Zuckerberg, market bubble, mega-rich, natural language processing, Network effects, new economy, Nicholas Carr, Paul Samuelson, Peter Thiel, positional goods, quantitative easing, RAND corporation, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, Skype, social intelligence, spinning jenny, Stanislav Petrov, Stephen Hawking, Steven Pinker, technological singularity, The Future of Employment, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, universal basic income, US Airways Flight 1549, Vernor Vinge, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, wealth creators, winner-take-all economy, Y2K, Yogi Berra

But it highlights a key question relevant to the future of work in the Robot Age, namely why do people currently work as much as they do? And whatever the reasons, are they bound to continue in this way in the future? Interestingly, although he envisaged a rather different route to this end state, Keynes had a similar vision to Marx. In an essay entitled “The Economic Possibilities for Our Grandchildren,” published in 1931, Keynes suggested that in a hundred years’ time the standard of living would be between four and eight times as high as it was then.6 This, he claimed, would be enough to end the economic problem, that is to say, shortage, and to replace it with abundance. Hence the question of what to do with our time. In some respects, this essay of Keynes’s is a bit of an embarrassment. It wreaks of the prejudices of the comfortable upper-middle-class intellectual, and its vision of the good life comes straight out of the way of life of Keynes and his friends, particularly the members of the Bloomsbury Group.

Maslow, A. (1968) Toward a Psychology of Being, New York: John Wiley & Sons. Minsky, M. (1967) Finite and Infinite Machines, New Jersey: Prentice Hall. Mokyr, J. (1990) The Lever of Riches, New York: Oxford University Press. Morris, I. (2010) Why the West Rules – for Now: The Patterns of History, and What They Reveal about the Future, New York: Farrar, Straus and Giroux. Pecchi, L. and Piga, G. (2008) Revisiting Keynes: Economic Possibilities for Our Grandchildren, Cambridge, MA: MIT Press. Penrose, R. (1989) The Emperor’s New Mind, Oxford: Oxford University Press. Penrose, R. (1994) Shadows of the Mind, Oxford: Oxford University Press. Piketty, T. (2014) Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press. Pinker, S. (2018) Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, London: Allen Lane.

M. (1931) Essays in Persuasion, London: Macmillan. 7 There is an interesting collection of essays on Keynes edited by Pecchi, L. and Piga, G. (2008) Grandchildren: Revisiting Keynes, Cambridge, MA: MIT Press. 8 See Freeman, R. B. (2008) “Why Do We Work More than Keynes Expected?” in Pecchi and Piga, pp. 135–42. 9 J. E. Stiglitz (2010) “Toward a General Theory of Consumerism: Reflections on Keynes’s Economic Possibilities for our Grandchildren,” in L. Pecchi and G. Piga (2008), pp. 41–85. 10 Mokyr, J., Vickers, C. and Ziebarth, N. L. (2015) The History of Technological Anxiety and the Future of Economic Growth: Is this Time Different?, Journal of Economic Perspectives, Vol. 29 (Summer 2015). pp. 31–50. 11 Stiglitz (2010), op. cit. 12 Keynes (1931). 13 See Clark, A. and Oswald, A. J. (1994) Unhappiness and Unemployment, Economic Journal, Vol. 104, No. 424 (May), pp. 648–59. 14 Quoted by Freeman, R.


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Human Compatible: Artificial Intelligence and the Problem of Control by Stuart Russell

3D printing, Ada Lovelace, AI winter, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Alfred Russel Wallace, Andrew Wiles, artificial general intelligence, Asilomar, Asilomar Conference on Recombinant DNA, augmented reality, autonomous vehicles, basic income, blockchain, brain emulation, Cass Sunstein, Claude Shannon: information theory, complexity theory, computer vision, connected car, crowdsourcing, Daniel Kahneman / Amos Tversky, delayed gratification, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Ernest Rutherford, Flash crash, full employment, future of work, Gerolamo Cardano, ImageNet competition, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the wheel, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John Nash: game theory, John von Neumann, Kenneth Arrow, Kevin Kelly, Law of Accelerating Returns, Mark Zuckerberg, Nash equilibrium, Norbert Wiener, NP-complete, openstreetmap, P = NP, Pareto efficiency, Paul Samuelson, Pierre-Simon Laplace, positional goods, probability theory / Blaise Pascal / Pierre de Fermat, profit maximization, RAND corporation, random walk, Ray Kurzweil, recommendation engine, RFID, Richard Thaler, ride hailing / ride sharing, Robert Shiller, Robert Shiller, Rodney Brooks, Second Machine Age, self-driving car, Shoshana Zuboff, Silicon Valley, smart cities, smart contracts, social intelligence, speech recognition, Stephen Hawking, Steven Pinker, superintelligent machines, Thales of Miletus, The Future of Employment, Thomas Bayes, Thorstein Veblen, transport as a service, Turing machine, Turing test, universal basic income, uranium enrichment, Von Neumann architecture, Wall-E, Watson beat the top human players on Jeopardy!, web application, zero-sum game

Research centers are springing up all over the world to understand what is likely to happen.16 The titles of Martin Ford’s Rise of the Robots: Technology and the Threat of a Jobless Future17 and Calum Chace’s The Economic Singularity: Artificial Intelligence and the Death of Capitalism18 do a pretty good job of summarizing the concern. Although, as will soon become evident, I am by no means qualified to opine on what is essentially a matter for economists,19 I suspect that the issue is too important to leave entirely to them. The issue of technological unemployment was brought to the fore in a famous article, “Economic Possibilities for Our Grandchildren,” by John Maynard Keynes. He wrote the article in 1930, when the Great Depression had created mass unemployment in Britain, but the topic has a much longer history. Aristotle, in Book I of his Politics, presents the main point quite clearly: For if every instrument could accomplish its own work, obeying or anticipating the will of others . . . if, in like manner, the shuttle would weave and the plectrum touch the lyre without a hand to guide them, chief workmen would not want servants, nor masters slaves.

Data science is a very tiny lifeboat for a giant cruise ship.27 Some are working on “transition plans”—but transition to what? We need a plausible destination in order to plan a transition—that is, we need a plausible picture of a desirable future economy where most of what we currently call work is done by machines. One rapidly emerging picture is that of an economy where far fewer people work because work is unnecessary. Keynes envisaged just such a future in his essay “Economic Possibilities for Our Grandchildren.” He described the high unemployment afflicting Great Britain in 1930 as a “temporary phase of maladjustment” caused by an “increase of technical efficiency” that took place “faster than we can deal with the problem of labour absorption.” He did not, however, imagine that in the long run—after a century of further technological advances—there would be a return to full employment: Thus for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.

See intelligent agent agent program, 48 “AI Researchers on AI Risk” (Alexander), 153 Alciné, Jacky, 60 Alexander, Scott, 146, 153, 169–70 algorithms, 33–34 Bayesian networks and, 275–77 Bayesian updating, 283, 284 bias and, 128–30 chess-playing, 62–63 coding of, 34 completeness theorem and, 51–52 computer hardware and, 34–35 content selection, 8–9, 105 deep learning, 58–59, 288–93 dynamic programming, 54–55 examples of common, 33–34 exponential complexity of problems and, 38–39 halting problem and, 37–38 lookahead search, 47, 49–50, 260–61 propositional logic and, 268–70 reinforcement learning, 55–57, 105 subroutines within, 34 supervised learning, 58–59, 285–93 Alibaba, 250 AlphaGo, 6, 46–48, 49–50, 55, 91, 92, 206–7, 209–10, 261, 265, 285 AlphaZero, 47, 48 altruism, 24, 227–29 altruistic AI, 173–75 Amazon, 106, 119, 250 Echo, 64–65 “Picking Challenge” to accelerate robot development, 73–74 Analytical Engine, 40 ants, 25 Aoun, Joseph, 123 Apple HomePod, 64–65 “Architecture of Complexity, The” (Simon), 265 Aristotle, 20–21, 39–40, 50, 52, 53, 114, 245 Armstrong, Stuart, 221 Arnauld, Antoine, 21–22 Arrow, Kenneth, 223 artificial intelligence (AI), 1–12 agent (See intelligent agent) agent programs, 48–59 beneficial, principles for (See beneficial AI) benefits to humans of, 98–102 as biggest event in human history, 1–4 conceptual breakthroughs required for (See conceptual breakthroughs required for superintelligent AI) decision making on global scale, capability for, 75–76 deep learning and, 6 domestic robots and, 73–74 general-purpose, 46–48, 100, 136 global scale, capability to sense and make decisions on, 74–76 goals and, 41–42, 48–53, 136–42, 165–69 governance of, 249–53 health advances and, 101 history of, 4–6, 40–42 human preferences and (See human preferences) imagining what superintelligent machines could do, 93–96 intelligence, defining, 39–61 intelligent personal assistants and, 67–71 limits of superintelligence, 96–98 living standard increases and, 98–100 logic and, 39–40 media and public perception of advances in, 62–64 misuses of (See misuses of AI) mobile phones and, 64–65 multiplier effect of, 99 objectives and, 11–12, 43, 48–61, 136–42, 165–69 overly intelligent AI, 132–44 pace of scientific progress in creating, 6–9 predicting arrival of superintelligent AI, 76–78 reading capabilities and, 74–75 risk posed by (See risk posed by AI) scale and, 94–96 scaling up sensory inputs and capacity for action, 94–95 self-driving cars and, 65–67, 181–82, 247 sensing on global scale, capability to, 75 smart homes and, 71–72 softbots and, 64 speech recognition capabilities and, 74–75 standard model of, 9–11, 13, 48–61, 247 Turing test and, 40–41 tutoring by, 100–101 virtual reality authoring by, 101 World Wide Web and, 64 “Artificial Intelligence and Life in 2030” (One Hundred Year Study on Artificial Intelligence), 149, 150 Asimov, Isaac, 141 assistance games, 192–203 learning preferences exactly in long run, 200–202 off-switch game, 196–200 paperclip game, 194–96 prohibitions and, 202–3 uncertainty about human objectives, 200–202 Association for the Advancement of Artificial Intelligence (AAAI), 250 assumption failure, 186–87 Atkinson, Robert, 158 Atlas humanoid robot, 73 autonomous weapons systems (LAWS), 110–13 autonomy loss problem, 255–56 Autor, David, 116 Avengers: Infinity War (film), 224 “avoid putting in human goals” argument, 165–69 axiomatic basis for utility theory, 23–24 axioms, 185 Babbage, Charles, 40, 132–33 backgammon, 55 Baidu, 250 Baldwin, James, 18 Baldwin effect, 18–20 Banks, Iain, 164 bank tellers, 117–18 Bayes, Thomas, 54 Bayesian logic, 54 Bayesian networks, 54, 275–77 Bayesian rationality, 54 Bayesian updating, 283, 284 Bayes theorem, 54 behavior, learning preferences from, 190–92 behavior modification, 104–7 belief state, 282–83 beneficial AI, 171–210, 247–49 caution regarding development of, reasons for, 179 data available for learning about human preferences, 180–81 economic incentives for, 179–80 evil behavior and, 179 learning to predict human preferences, 176–77 moral dilemmas and, 178 objective of AI is to maximize realization of human preferences, 173–75 principles for, 172–79 proofs for (See proofs for beneficial AI) uncertainty as to what human preferences are, 175–76 values, defining, 177–78 Bentham, Jeremy, 24, 219 Berg, Paul, 182 Berkeley Robot for the Elimination of Tedious Tasks (BRETT), 73 Bernoulli, Daniel, 22–23 “Bill Gates Fears AI, but AI Researchers Know Better” (Popular Science), 152 blackmail, 104–5 blinking reflex, 57 blockchain, 161 board games, 45 Boole, George, 268 Boolean (propositional) logic, 51, 268–70 bootstrapping process, 81–82 Boston Dynamics, 73 Bostrom, Nick, 102, 144, 145, 150, 166, 167, 183, 253 brains, 16, 17–18 reward system and, 17–18 Summit machine, compared, 34 BRETT (Berkeley Robot for the Elimination of Tedious Tasks), 73 Brin, Sergey, 81 Brooks, Rodney, 168 Brynjolfsson, Erik, 117 Budapest Convention on Cybercrime, 253–54 Butler, Samuel, 133–34, 159 “can’t we just . . .” responses to risks posed by AI, 160–69 “. . . avoid putting in human goals,” 165–69 “. . . merge with machines,” 163–65 “. . . put it in a box,” 161–63 “. . . switch it off,” 160–61 “. . . work in human-machine teams,” 163 Cardano, Gerolamo, 21 caring professions, 122 Chace, Calum, 113 changes in human preferences over time, 240–45 Changing Places (Lodge), 121 checkers program, 55, 261 chess programs, 62–63 Chollet, François, 293 chunking, 295 circuits, 291–92 CNN, 108 CODE (Collaborative Operations in Denied Environments), 112 combinatorial complexity, 258 common operational picture, 69 compensation effects, 114–17 completeness theorem (Gödel’s), 51–52 complexity of problems, 38–39 Comprehensive Nuclear-Test-Ban Treaty (CTBT) seismic monitoring, 279–80 computer programming, 119 computers, 32–61 algorithms and (See algorithms) complexity of problems and, 38–39 halting problem and, 37–38 hardware, 34–35 intelligent (See artificial intelligence) limits of computation, 36–39 software limitations, 37 special-purpose devices, building, 35–36 universality and, 32 computer science, 33 “Computing Machinery and Intelligence” (Turing), 40–41, 149 conceptual breakthroughs required for superintelligent AI, 78–93 actions, discovering, 87–90 cumulative learning of concepts and theories, 82–87 language/common sense problem, 79–82 mental activity, managing, 90–92 consciousness, 16–17 consequentialism, 217–19 content selection algorithms, 8–9, 105 content shortcomings, of intelligent personal assistants, 67–68 control theory, 10, 44–45, 54, 176 convolutional neural networks, 47 cost function to evaluate solutions, and goals, 48 Credibility Coalition, 109 CRISPR-Cas9, 156 cumulative learning of concepts and theories, 82–87 cybersecurity, 186–87 Daily Telegraph, 77 decision making on global scale, 75–76 decoherence, 36 Deep Blue, 62, 261 deep convolutional network, 288–90 deep dreaming images, 291 deepfakes, 105–6 deep learning, 6, 58–59, 86–87, 288–93 DeepMind, 90 AlphaGo, 6, 46–48, 49–50, 55, 91, 92, 206–7, 209–10, 261, 265, 285 AlphaZero, 47, 48 DQN system, 55–56 deflection arguments, 154–59 “research can’t be controlled” arguments, 154–56 silence regarding risks of AI, 158–59 tribalism, 150, 159–60 whataboutery, 156–57 Delilah (blackmail bot), 105 denial of risk posed by AI, 146–54 “it’s complicated” argument, 147–48 “it’s impossible” argument, 149–50 “it’s too soon to worry about it” argument, 150–52 Luddism accusation and, 153–54 “we’re the experts” argument, 152–54 deontological ethics, 217 dexterity problem, robots, 73–74 Dickinson, Michael, 190 Dickmanns, Ernst, 65 DigitalGlobe, 75 domestic robots, 73–74 dopamine, 17, 205–6 Dota 2, 56 DQN system, 55–56 Dune (Herbert), 135 dynamic programming algorithms, 54–55 E. coli, 14–15 eBay, 106 ECHO (first smart home), 71 “Economic Possibilities for Our Grandchildren” (Keynes), 113–14, 120–21 The Economic Singularity: Artificial Intelligence and the Death of Capitalism (Chace), 113 Economist, The, 145 Edgeworth, Francis, 238 Eisenhower, Dwight, 249 electrical action potentials, 15 Eliza (first chatbot), 67 Elmo (shogi program), 47 Elster, Jon, 242 Elysium (film), 127 emergency braking, 57 enfeeblement of humans problem, 254–55 envy, 229–31 Epicurus, 219 equilibrium solutions, 30–31, 195–96 Erewhon (Butler), 133–34, 159 Etzioni, Oren, 152, 157 eugenics movement, 155–56 expected value rule, 22–23 experience, learning from, 285–95 experiencing self, and preferences, 238–40 explanation-based learning, 294–95 Facebook, 108, 250 Fact, Fiction and Forecast (Goodman), 85 fact-checking, 108–9, 110 factcheck.org, 108 fear of death (as an instrumental goal), 140–42 feature engineering, 84–85 Fermat, Pierre de, 185 Fermat’s Last Theorem, 185 Ferranti Mark I, 34 Fifth Generation project, 271 firewalling AI systems, 161–63 first-order logic, 51, 270–72 probabilistic languages and, 277–80 propositional logic distinguished, 270 Ford, Martin, 113 Forster, E.


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The Future of the Professions: How Technology Will Transform the Work of Human Experts by Richard Susskind, Daniel Susskind

23andMe, 3D printing, additive manufacturing, AI winter, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, Andrew Keen, Atul Gawande, Automated Insights, autonomous vehicles, Big bang: deregulation of the City of London, big data - Walmart - Pop Tarts, Bill Joy: nanobots, business process, business process outsourcing, Cass Sunstein, Checklist Manifesto, Clapham omnibus, Clayton Christensen, clean water, cloud computing, commoditize, computer age, Computer Numeric Control, computer vision, conceptual framework, corporate governance, creative destruction, crowdsourcing, Daniel Kahneman / Amos Tversky, death of newspapers, disintermediation, Douglas Hofstadter, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, full employment, future of work, Google Glasses, Google X / Alphabet X, Hacker Ethic, industrial robot, informal economy, information retrieval, interchangeable parts, Internet of things, Isaac Newton, James Hargreaves, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, knowledge economy, lifelogging, lump of labour, Marshall McLuhan, Metcalfe’s law, Narrative Science, natural language processing, Network effects, optical character recognition, Paul Samuelson, personalized medicine, pre–internet, Ray Kurzweil, Richard Feynman, Second Machine Age, self-driving car, semantic web, Shoshana Zuboff, Skype, social web, speech recognition, spinning jenny, strong AI, supply-chain management, telepresence, The Future of Employment, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, transaction costs, Turing test, Watson beat the top human players on Jeopardy!, WikiLeaks, young professional

Precisely because it was crafted by a human being, we may prefer to buy a sculpture by a person, even though a robot could do a better and cheaper job. In the professions, though, our general view is that this (often nostalgic) preference for the old ways of working will be too high a price to pay, especially if the quality of service is demonstrably lower than that provided by a machine. 7.3. Technological unemployment? In 1930, speculating about ‘the economic possibilities for our grandchildren’, John Maynard Keynes introduced the concept of ‘technological unemployment’.23 The basic idea is simple—that new technologies might put people out of work. The question to which we now turn is whether there will be technological unemployment in the professions in the very long term. The short answer is, ‘there will’. We can find no economic law that will somehow secure employment for professionals in the face of increasingly capable machines.24 However, it is uncertain how extensive the job-loss will be.

A very big thank-you also to Darcy Hill for helping us so diligently with the bibliography, and to Patricia Cato and Suzanne Richmond for their assistance with early drafts of the book. Our friends at Oxford University Press have been notably patient. David Musson has been an ongoing source of encouragement and of wise counsel; and we are grateful also at OUP to Kim Behrens, Kate Farquhar-Thomson, Phil Henderson, and Clare Kennedy for their enthusiasm and professionalism. Thank you also to Jeff New for his superb copy-editing. The epigraph by John Maynard Keynes, The General Theory of Employment, Interest and Money (1936), © The Royal Economic Society, published by Cambridge University Press, is reproduced with permission. Alan Susskind reviewed the entire manuscript. His observations and his ongoing support were very much appreciated. At the same time, Werner Susskind merits special mention for keeping us fully supplied with relevant articles from the BMJ.

Only when, in addition to just institutions, the increase of mankind shall be under the deliberate guidance of judicious foresight, can the conquests made from the powers of nature by the intellect and energy of scientific discoverers become the common property of the species, and the means of improving and elevating the universal lot. John Stuart Mill The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds. John Maynard Keynes Contents List of Boxes and Figure Introduction PART I. CHANGE 1. The Grand Bargain 1.1 Everyday conceptions 1.2 The scope of the professions 1.3 Historical context 1.4 The bargain explained 1.5 Theories of the professions 1.6 Four central questions 1.7 Disconcerting problems 1.8 A new mindset 1.9 Some common biases 2. From the Vanguard 2.1 Health 2.2 Education 2.3 Divinity 2.4 Law 2.5 Journalism 2.6 Management consulting 2.7 Tax and audit 2.8 Architecture 3.


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The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, airline deregulation, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collapse of Lehman Brothers, collective bargaining, colonial rule, corporate governance, Credit Default Swap, Daniel Kahneman / Amos Tversky, Dava Sobel, declining real wages, deskilling, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, income inequality, income per capita, indoor plumbing, inflation targeting, information asymmetry, invisible hand, jobless men, John Harrison: Longitude, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, London Interbank Offered Rate, lone genius, low skilled workers, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, mass incarceration, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, negative equity, obamacare, offshore financial centre, paper trading, Pareto efficiency, patent troll, Paul Samuelson, payday loans, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, technology bubble, The Chicago School, The Fortune at the Bottom of the Pyramid, The Myth of the Rational Market, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, wealth creators, women in the workforce, zero-sum game

A survey of the evidence for both developed and developing countries is in Andrew E. Clark and Claudia Senik, “Will GDP Growth Increase Happinenss in Developing Countries?,” Paris School of Economics, Working Paper no. 2010-43, March 2011. 50. John Maynard Keynes, Economic Possibilities for Our Grandchildren: Essays in Persuasion (originally published 1930) (New York: Norton, 1963), pp. 358–73. The discussion here draws upon my reflections on that essay: “Toward a General Theory of Consumerism: Reflections on Keynes’ Economic Possibilities for Our Grandchildren,” in Revisiting Keynes: Economic Possibilities for Our Grandchildren, ed. G. Piga and L. Pecchi (Cambridge: MIT Press, 2008), pp. 41–87. See also the other essays in that volume. 51. Adam Smith, Lectures on Jurisprudence, ed. Ronald L. Meek, D. D. Raphael, and Peter Stein (New York: Clarendon Press, 1978), (A) vi.54.

In the last chapter, we observed the enormous decline in the wage share in this recession; the decline amounted to more than a half trillion dollars a year.5 That’s an amount much greater than the value of the stimulus package passed by Congress. That stimulus package was estimated to reduce unemployment by 2 to 2½ percentage points. Taking money away from workers has, of course, just the opposite effect. Since the time of the great British economist John Maynard Keynes, governments have understood that when there is a shortfall of demand—when unemployment is high—they need to take action to increase either public or private spending. The 1 percent has worked hard to restrain government spending. Private consumption is encouraged through tax cuts, and that was the strategy undertaken by President Bush, with three large tax cuts in eight years. It didn’t work.

David Kessler, the former head of the Food and Drug Administration who led the U.S. government charge against the cigarette companies, points out that producers of fast foods, snacks, and other products do quite similar things (even if it isn’t precisely addiction), through their fine understanding of how smells and tastes stimulate the brain and create cravings. See Kessler, The End of Overeating: Taking Control of the Insatiable American Appetite (New York: Rodale Books, 2009). 17. John Maynard Keynes, The General Theory of Employment, Interest, and Money (New York: Harcourt, Brace & World, 1936), p. 383. 18. See George Soros, The Soros Lectures: At the Central European University (New York: Public Affairs, 2010). 19. See in particular the report The Financial Crisis Inquiry Report of the bipartisan National Commission on the Causes of the Financial and Economic Crisis in the United States, which concluded that Fannie Mae and Freddie Mac “contributed to the crisis, but were not a primary cause” (p. xxvi).


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The Skeptical Economist: Revealing the Ethics Inside Economics by Jonathan Aldred

airport security, Berlin Wall, carbon footprint, citizen journalism, clean water, cognitive dissonance, congestion charging, correlation does not imply causation, Diane Coyle, endogenous growth, experimental subject, Fall of the Berlin Wall, first-past-the-post, framing effect, greed is good, happiness index / gross national happiness, hedonic treadmill, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, labour market flexibility, laissez-faire capitalism, libertarian paternalism, longitudinal study, new economy, Pareto efficiency, pension reform, positional goods, Ralph Waldo Emerson, RAND corporation, risk tolerance, school choice, spectrum auction, Thomas Bayes, trade liberalization, ultimatum game

The great economists of the past saw economics and ethics as inextricably entwined; one example of this is their emphasis on the limits of economic prosperity in bringing about broader improvements in the human condition, and hence the relative insignificance they attached to economic prosperity alone. Adam Smith was dismissive of economic success as an end in itself: ‘if the trappings of wealth are viewed philosophically, they will always appear in the highest degree contemptible and trifling’.6 John Maynard Keynes, the most influential economist of the 20th century, shared similar concerns. In ‘Economic possibilities for our grandchildren’, Keynes described the ‘love of money as a possession’ as ‘one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease’.7 Keynes accurately predicted British average income per head in the early 21st century, and went on to anticipate the problems of affluenza, and the renewed importance of an ethical framework once society ceases to be focused solely on economic growth.8 In all this, he was remarkably prescient: the essay was written in 1930.

For many outcomes, impacts or considerations, a true numerical measurement does not exist, so the numbers we produce cannot be good estimates of it. Since there is no true number to be found, the search for one often becomes desperate, searching in ways which will definitely lead to numbers, regardless of their relevance. It is reminiscent of the drunkard who searched for his wallet under the street light, not because he lost it there, but because that was the only place he could see. Or as John Maynard Keynes possibly commented: ‘I would rather be vaguely right than precisely wrong.’58 Second, the values that emerge from economic theory provide too flimsy a platform for policy advice. The idea that value-free economic advice is possible is another myth, but chasing it has left economics with minimalist values which are too denuded of ethical content to support practical conclusions. As we have seen, the gap is filled with ad hoc assumptions which are often left unstated.

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are usually distilling their frenzy from some academic scribbler of a few years back. (John Maynard Keynes, The General Theory) What economists don’t admit Economics shapes our lives in countless ways. Each chapter of this book has illustrated this in a practical context. In the process we have uncovered some common themes in the way orthodox economists think. Considered in isolation they might seem only of academic interest, but as previous chapters and Keynes’ remarks suggest, they should interest all of us.


pages: 378 words: 110,518

Postcapitalism: A Guide to Our Future by Paul Mason

Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, basic income, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, business process, butterfly effect, call centre, capital controls, Cesare Marchetti: Marchetti’s constant, Claude Shannon: information theory, collaborative economy, collective bargaining, Corn Laws, corporate social responsibility, creative destruction, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, Downton Abbey, drone strike, en.wikipedia.org, energy security, eurozone crisis, factory automation, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, full employment, future of work, game design, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, late capitalism, low skilled workers, market clearing, means of production, Metcalfe's law, microservices, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, Paul Samuelson, payday loans, Pearl River Delta, post-industrial society, precariat, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, Robert Metcalfe, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, The Future of Employment, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, union organizing, universal basic income, urban decay, urban planning, Vilfredo Pareto, wages for housework, WikiLeaks, women in the workforce

Cottrell, ‘Economic Planning, Computers and Labor Values’, Working Paper, January 1999, http://ricardo.ecn.wfu.edu/~cottrell/socialism_book/index.html 24. O. Yun, Improvement of Soviet Economic Planning (Moscow, 1988) 25. Cockshott and Cottrell, ‘Economic Planning, Computers and Labor Values,’ p. 7 26. P. Cockshott, A. Cottrell and H. Dieterich, Transition to 21st Century Socialism in the European Union, Lulu.com, 2010, pp. 1–20 27. A. Gorz, Capitalism, Socialism, Ecology (London, 1994), p. 1 28. J. M. Keynes, ‘The Economic Possibilities for our Grandchildren’, in J. M. Keynes, Essays in Persuasion (New York, 1963), pp. 358–73 29. D. Thompson, ‘The Economic History of the Last 2000 Years: Part II’, The Atlantic, 20 June 2012 30. http://www.plospathogens.org/article/info%3Adoi%2F10.1371%2Fjournal.ppat.1001134 31. D. Herlihy, The Black Death and the Transformation of the West (Cambridge, 1997), p. 48 32. E. L. Eisenstein, The Printing Revolution in Early Modern Europe (2nd edn, Cambridge, 2005) 33. http://intersci.ss.uci.edu/wiki/eBooks/BOOKS/Bacon/Novum%20Organum%20Bacon.pdf 34.

‘Done, for you big boy,’ writes one Barclays employee to another as they manipulate LIBOR, the rate at which banks lend to each other, the most important interest rate on the planet.10 We should listen carefully to the tone in these emails – the irony, the dishonesty, the repeated use of smileys, slang and manic punctuation. It is evidence of systemic self-deception. At the heart of the finance system, which is itself the heart of the neoliberal world, they knew it didn’t work. John Maynard Keynes once called money ‘a link between the present and the future’.11 He meant that what we do with money today is a signal of how we think things are going to change in years to come. What we did with money in the run-up to 2008 was to massively expand its volume: the global money supply rose from $25 trillion to $70 trillion in the seven years before the crash – incomparably faster than growth in the real economy.

From Varga’s recalcitrant works committees in Budapest to the Russian workers who insisted on self-control, or the Fiat workers in Milan who even tried to produce cars without the help of managers, this problem – workers control vs planning – would hit the socialist leaders as a total surprise. If these early attempts at socialism failed, it is worth remembering that capitalist attempts at stabilization also failed. The peace deal of 1919 condemned Germany’s recovery to stall under the stranglehold of reparations. ‘In continental Europe,’ wrote a distraught John Maynard Keynes, shortly after storming out of the British delegation at Versailles, ‘the earth heaves and no one but is aware of the rumblings. There it is not just a matter of extravagance or “labour troubles”; but of life and death, of starvation and existence, and of the fearful convulsions of a dying civilization.’24 With hindsight, we can see 1917–21 as a near-terminal social crisis, but as an economic crisis it was not inevitable; it was the result of poor policy decisions.


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Phishing for Phools: The Economics of Manipulation and Deception by George A. Akerlof, Robert J. Shiller, Stanley B Resor Professor Of Economics Robert J Shiller

"Robert Solow", Andrei Shleifer, asset-backed security, Bernie Madoff, business cycle, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, corporate raider, Credit Default Swap, Daniel Kahneman / Amos Tversky, dark matter, David Brooks, desegregation, en.wikipedia.org, endowment effect, equity premium, financial intermediation, financial thriller, fixed income, full employment, George Akerlof, greed is good, income per capita, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, late fees, loss aversion, market bubble, Menlo Park, mental accounting, Milgram experiment, money market fund, moral hazard, new economy, Pareto efficiency, Paul Samuelson, payday loans, Ponzi scheme, profit motive, publication bias, Ralph Nader, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, short selling, Silicon Valley, the new new thing, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, theory of mind, Thorstein Veblen, too big to fail, transaction costs, Unsafe at Any Speed, Upton Sinclair, Vanguard fund, Vilfredo Pareto, wage slave

The eviction rate for occupied rental housing in all neighborhoods was 3.5 percent; and 7.2 percent in high-poverty neighborhoods (p. 97). Desmond describes the difficulties of those who get evicted, with a court record that makes it difficult to rent again. Even if these numbers are too high for some unknown reason, they still make the point: many families get thrown out of their homes and it will be difficult for them to find another. 12. John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” in Essays in Persuasion (London: Macmillan, 1931), pp. 358–73. 13. Eight times: ibid., p. 365. For the growth of US per capita income we used Angus Maddison’s calculations for 1930 to 2000 (“US Real Per Capita GDP from 1870–2001,” September 24, 2012, accessed December 1, 2014, http://socialdemocracy21stcentury.blogspot.com/2012/09/us-real-per-capita-gdp-from-18702001.html).

Chicago: Illinois Labor History Society, 1986. Kelly, Kate. Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street. New York: Penguin, 2009. Kessler, Glen. “Revisiting the Cost of the Bush Tax Cuts.” Washington Post, May 10, 2011. http://www.washingtonpost.com/blogs/fact-checker/post/revisiting-the-cost-of-the-bush-tax-cuts/2011/05/09/AFxTFtbG_blog.html. Keynes, John Maynard. “Economic Possibilities for Our Grandchildren.” In Essays in Persuasion, pp. 358–73. London: Macmillan, 1931. —. The General Theory of Employment, Interest and Money. New York: Harcourt Brace Jovanovich, 1964. Knowledge@Wharton. “Goldman Sachs and Abacus 2007-AC1: A Look beyond the Numbers.” April 28, 2010. Accessed March 15, 2015. http://knowledge.wharton.upenn.edu/article/goldman-sachs-and-abacus-2007-ac1-a-look-beyond-the-numbers/.

Even in the current United States, where the vast majority of the population has a level of consumption unparalleled in human history, most people worry about how to make the ends meet. Some even go over the edge: into bankruptcy; or eviction. Another Perspective Another assay poses for us the Suze Orman puzzle in a different perspective. Most of us think that if our income went up more than fivefold we would be on easy street. Our financial problems would be over. Indeed, that is exactly what John Maynard Keynes, one of the most astute economists of all time, thought would be the case when he looked forward from 1930. In an essay, which was little noticed when published, Keynes projected what life would be like “for our grandchildren,” in 2030: one hundred years thence.12 In one respect he almost hit a bull’s-eye. He “supposed” that the standard of living would be eight times higher. For the United States, as of 2010, real income per capita was 5.6 times higher.13 With another twenty years to go on Keynes’s stopwatch, and with annual growth in per capita income at its historic average between 1.5 percent and 2 percent, his supposition will be remarkably close to target.


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The Glass Cage: Automation and Us by Nicholas Carr

Airbnb, Airbus A320, Andy Kessler, Atul Gawande, autonomous vehicles, Bernard Ziegler, business process, call centre, Captain Sullenberger Hudson, Charles Lindbergh, Checklist Manifesto, cloud computing, computerized trading, David Brooks, deliberate practice, deskilling, digital map, Douglas Engelbart, drone strike, Elon Musk, Erik Brynjolfsson, Flash crash, Frank Gehry, Frank Levy and Richard Murnane: The New Division of Labor, Frederick Winslow Taylor, future of work, global supply chain, Google Glasses, Google Hangouts, High speed trading, indoor plumbing, industrial robot, Internet of things, Jacquard loom, James Watt: steam engine, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, knowledge worker, Lyft, Marc Andreessen, Mark Zuckerberg, means of production, natural language processing, new economy, Nicholas Carr, Norbert Wiener, Oculus Rift, pattern recognition, Peter Thiel, place-making, plutocrats, Plutocrats, profit motive, Ralph Waldo Emerson, RAND corporation, randomized controlled trial, Ray Kurzweil, recommendation engine, robot derives from the Czech word robota Czech, meaning slave, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley ideology, software is eating the world, Stephen Hawking, Steve Jobs, TaskRabbit, technoutopianism, The Wealth of Nations by Adam Smith, turn-by-turn navigation, US Airways Flight 1549, Watson beat the top human players on Jeopardy!, William Langewiesche

Levasseur, “The Concentration of Industry, and Machinery in the United States,” Publications of the American Academy of Political and Social Science, no. 193 (1897): 178–197. 16.Oscar Wilde, “The Soul of Man under Socialism,” in The Collected Works of Oscar Wilde (Ware, U.K.: Wordsworth Editions, 2007), 1051. 17.Quoted in Amy Sue Bix, Inventing Ourselves out of Jobs? America’s Debate over Technological Unemployment, 1929–1981 (Baltimore: Johns Hopkins University Press, 2000), 117–118. 18.Ibid., 50. 19.Ibid., 55. 20.John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” in Essays in Persuasion (New York: W. W. Norton, 1963), 358–373. 21.John F. Kennedy, “Remarks at the Wheeling Stadium,” in John F. Kennedy: Containing the Public Messages, Speeches, and Statements of the President (Washington, D.C.: U.S. Government Printing Office, 1962), 721. 22.Stanley Aronowitz and William DiFazio, The Jobless Future: Sci-Tech and the Dogma of Work (Minneapolis: University of Minnesota Press, 1994), 14.

The uncontrolled acceleration of progress, its author wrote, had left society chronically unprepared to deal with the consequences.19 But the Depression did not entirely extinguish the Wildean dream of a machine paradise. In some ways, it rendered the utopian vision of progress more vivid, more necessary. The more we saw machines as our foes, the more we yearned for them to be our friends. “We are being afflicted,” wrote the great British economist John Maynard Keynes in 1930, “with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come—namely, technological unemployment.” The ability of machines to take over jobs had outpaced the economy’s ability to create valuable new work for people to do. But the problem, Keynes assured his readers, was merely a symptom of “a temporary phase of maladjustment.”


The Economics Anti-Textbook: A Critical Thinker's Guide to Microeconomics by Rod Hill, Anthony Myatt

American ideology, Andrei Shleifer, Asian financial crisis, bank run, barriers to entry, Bernie Madoff, business cycle, cognitive dissonance, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, different worldview, endogenous growth, equal pay for equal work, Eugene Fama: efficient market hypothesis, experimental economics, failed state, financial innovation, full employment, gender pay gap, Gini coefficient, Gunnar Myrdal, happiness index / gross national happiness, Home mortgage interest deduction, Howard Zinn, income inequality, indoor plumbing, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, liberal capitalism, low skilled workers, market bubble, market clearing, market fundamentalism, Martin Wolf, medical malpractice, minimum wage unemployment, moral hazard, Pareto efficiency, Paul Samuelson, Peter Singer: altruism, positional goods, prediction markets, price discrimination, principal–agent problem, profit maximization, profit motive, publication bias, purchasing power parity, race to the bottom, Ralph Nader, random walk, rent control, rent-seeking, Richard Thaler, Ronald Reagan, shareholder value, The Myth of the Rational Market, the payments system, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, ultimatum game, union organizing, working-age population, World Values Survey, Yogi Berra

Whimmer (1979) ‘A confusion of economists’, American Economic Review, Papers and Proceedings, 69: 28–37. Keen, S. (2001) Debunking Economics: The naked emperor of the social sciences, London: Zed Books. — (2009) ‘A pluralist approach to microeconomics’, in J. Reardon (ed.), The Handbook of Pluralist Economics Education, London: Routledge, pp. 120–49. Keynes, J. M. (1936) The General Theory of Employment, Interest and Money, London: Macmillan. — (1963 [1931]) ‘Economic possibilities for our grandchildren’, in Essays in Persuasion, New York: W. W. Norton. Klamer, A., D. McCloskey and R. M. Solow (1988) The Consequences of Economic Rhetoric, Cambridge: Cambridge University Press. Klamer, A., D. McCloskey and S. Ziliak (2010) The Economic Conversation, London: Palgrave Macmillan. Klein, N. (2007) The Shock Doctrine: The rise of disaster capitalism, Toronto: Knopf Canada. Knack, S. and P.

Economics cannot say how much fairness (or equity) there ought to be. Such moral questions are ultimately resolved by political decisions. All economists can do is give advice on how to achieve society’s goals as efficiently as possible. The science of economics is value free. 14 2.1 The inherent tension with macroeconomics As we mentioned the first seminal book in economics, Adam Smith’s The Wealth of Nations, it behoves us to mention another, John Maynard Keynes’s The General Theory of Employment, Interest and Money. Published in 1936 during the Great Depression, it attempted to explain how unemployment could persist, and what ameliorating actions governments could take. In the process of ­doing this, Keynes became the founding father of macroeconomics. This is the study of large aggregates, and explains such things as unemployment, inflation, exchange rates and interest rates; whereas microeconomics deals with smaller chunks of reality, such as individual markets.2 Keynes’s message is the opposite of Smith’s.

It was mob psychology, not the working of an efficient market. This illustrates a key point ignored by the efficient market hypothesis – that what something is worth depends not just on its fundamental value, but also on what everyone expects everyone else will be willing to pay for it. The inherent uncertainty over the future of the economy interacts with uncertainty about other people’s expectations about the likely actions of other investors! John Maynard Keynes summarized this famously using a beauty contest analogy. He compared the difficulty of predicting asset prices to the difficulty of winning a newspaper competition asking contestants to pick (from a list of 100 female photographs), not the prettiest faces, but the six faces that would be the most chosen by other entrants as the prettiest. Keynes said: 7  |  Externalities and the ubiquity of market failure ‘The growth fetish, while on balance quite useful in a world with empty land, shoals of undisturbed fish, vast forests, and a­ robust ozone shield, helped create a more crowded and stressed one. … Economic thought did not adjust to the changed con­ ditions it helped to create; thereby it continued to legitimate, and indeed indirectly to cause, massive and rapid ecological change.’


pages: 462 words: 129,022

People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph E. Stiglitz

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, barriers to entry, basic income, battle of ideas, Berlin Wall, Bernie Madoff, Bernie Sanders, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, central bank independence, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crony capitalism, deglobalization, deindustrialization, disintermediation, diversified portfolio, Donald Trump, Edward Snowden, Elon Musk, Erik Brynjolfsson, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, Firefox, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, gig economy, global supply chain, greed is good, income inequality, information asymmetry, invisible hand, Isaac Newton, Jean Tirole, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, labor-force participation, late fees, low skilled workers, Mark Zuckerberg, market fundamentalism, mass incarceration, meta analysis, meta-analysis, minimum wage unemployment, moral hazard, new economy, New Urbanism, obamacare, patent troll, Paul Samuelson, pension reform, Peter Thiel, postindustrial economy, price discrimination, principal–agent problem, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, Richard Thaler, Robert Bork, Robert Gordon, Robert Mercer, Robert Shiller, Robert Shiller, Ronald Reagan, secular stagnation, self-driving car, shareholder value, Shoshana Zuboff, Silicon Valley, Simon Kuznets, South China Sea, sovereign wealth fund, speech recognition, Steve Jobs, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, two-sided market, universal basic income, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, War on Poverty, working-age population

What distinguished the eighteenth-century advances was not only the increase in the extent of the market (emphasized by Allen), but also the development of science, which enabled sustained increases. 25.Keynes, in his famous essay, “Economic Possibilities for Our Grandchildren” (in Essays in Persuasion [London: MacMillan, 1931], 321–2) explored the implications of the enormous increases in productivity. See also Joseph E. Stiglitz, “Toward a General Theory of Consumerism: Reflections on Keynes’ Economic Possibilities for Our Grandchildren,” in Revisiting Keynes: Economic Possibilities for Our Grandchildren, eds. Lorenzo Pecchi and Gustavo Piga (Cambridge, MA: MIT Press, 1987), 41–87. 26.As we’ll explain in greater detail below, because of exclusionary labor market practices and discrimination, especially against women and people of color, large groups within society did not share in this progress. 27.Thomas Hobbes, Leviathan, 1651. 28.There were similar responses in Europe, in some cases earlier than in the US, in some cases later.

Before embarking on the journey, it might be useful to summarize the modern understanding of economics upon which much of this agenda depends.10 First, markets on their own will fail to achieve shared and sustainable prosperity. Markets play an invaluable role in any well-functioning economy and yet they often fail to produce fair and efficient outcomes, producing too much of some things (pollution) and too little of others (basic research). And as the 2008 financial crisis showed, markets on their own are not stable. More than 80 years ago, John Maynard Keynes explained why market economies often have persistent unemployment and taught us how government could maintain the economy at or near full employment. If there are large discrepancies between the social returns of an activity—the benefit to society—and the private returns to the same activity—the benefit to an individual or company—markets alone will not do the job. Climate change represents the example par excellence: the global social costs of carbon emissions are enormous—excessive emissions of greenhouse gases present an existential threat to the planet—and far exceed the costs borne by any firm, or even any country.

Net neutrality’s detractors like to claim that the market will sort out this kind of issue: if consumers aren’t getting what they want, they’ll switch to another internet provider that streams Netflix reliably at fast speeds. But with only three major national internet providers, customers have limited choice; indeed, in many parts of the country, consumers who want broadband internet have only one choice.18 Even if in the long run there would be entrants offering more reliable internet service, as John Maynard Keynes said in another context, in the long run, we’re all dead: Netflix wouldn’t be able to wait. The knowledge that the internet providers have such market power puts a damper on innovation in the entire industry. The result is more inequality, less innovation, and slower growth.19 Government Failure We’ve explained why collective action is needed. But that doesn’t mean that it’s easy or always successful.


pages: 126 words: 37,081

Men Without Work by Nicholas Eberstadt

business cycle, Carmen Reinhart, centre right, deindustrialization, financial innovation, full employment, illegal immigration, jobless men, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labor-force participation, low skilled workers, mass immigration, moral hazard, post-work, Ronald Reagan, secular stagnation, Simon Kuznets, The Rise and Fall of American Growth, War on Poverty, women in the workforce, working-age population

It has been over twenty years since Juliet Schor, Boston College professor, coined the phrase “the overworked American,”11 underscoring our unusual proclivity for long hours and short to nonexistent vacations in relation to our affluent peers abroad. Not generally appreciated, however, is that the land of “the overworked American” is also home to an unusually large and rapidly growing contingent of “underworked Americans”: relatively young men who spend absolutely no time at a job and are not acting to alter that situation. In 1930, John Maynard Keynes famously speculated about life in the future in his “Economic Possibilities for Our Grandchildren.”12 Those grandchildren would most likely be living right about now. In that essay, he dared to predict that the workweek would be much shorter and income levels would be much higher for these future generations. Keynes was correct in the gist of his prophecies: throughout Europe and the rest of the West, income levels are far higher today than when his argument was first published, and the workweek is appreciably shorter (abeit not yet as short as he boldly suggested it might come to be).


pages: 700 words: 201,953

The Social Life of Money by Nigel Dodd

accounting loophole / creative accounting, bank run, banking crisis, banks create money, Bernie Madoff, bitcoin, blockchain, borderless world, Bretton Woods, BRICs, business cycle, capital controls, cashless society, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computer age, conceptual framework, credit crunch, cross-subsidies, David Graeber, debt deflation, dematerialisation, disintermediation, eurozone crisis, fiat currency, financial exclusion, financial innovation, Financial Instability Hypothesis, financial repression, floating exchange rates, Fractional reserve banking, German hyperinflation, Goldman Sachs: Vampire Squid, Hyman Minsky, illegal immigration, informal economy, interest rate swap, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, Kickstarter, Kula ring, laissez-faire capitalism, land reform, late capitalism, liberal capitalism, liquidity trap, litecoin, London Interbank Offered Rate, M-Pesa, Marshall McLuhan, means of production, mental accounting, microcredit, mobile money, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, negative equity, new economy, Nixon shock, Occupy movement, offshore financial centre, paradox of thrift, payday loans, Peace of Westphalia, peer-to-peer, peer-to-peer lending, Ponzi scheme, post scarcity, postnationalism / post nation state, predatory finance, price mechanism, price stability, quantitative easing, quantitative trading / quantitative finance, remote working, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Satoshi Nakamoto, Scientific racism, seigniorage, Skype, Slavoj Žižek, South Sea Bubble, sovereign wealth fund, special drawing rights, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, Veblen good, Wave and Pay, Westphalian system, WikiLeaks, Wolfgang Streeck, yield curve, zero-coupon bond

Citing Zarathustra’s “intoxicated song,” Brown is drawn to Nietzsche’s suggestion that the desire for an heir is a refusal of one’s own life (Brown 1959: 107): But everything unripe wants to live: alas! Woe says: “Fade! Be gone, woe!” But everything that suffers wants to live, that it may grow ripe and merry and passionate, passionate for remoter, higher, brighter things. “I want heirs,” thus speaks everything that suffers, “I want children, I do not want myself.” (Nietzsche 2003b: 331) Brown finds similar sentiments in Keynes’s “Economic Possibilities for Our Grandchildren,” which describes the “purposive” man who seeks a “spurious and delusive immortality for his acts by pushing his interest in them forward into time … For him, jam is not jam unless it is a case of jam tomorrow and never jam to-day” (Keynes 1972: 370). There are shades of Benjamin in Keynes’s observation—which Brown cites (Brown 1959: 286)—that the financial corollary of the promise of immortality is the principle of compound interest (Keynes 1972: 371).

Brown finds a Dionysian “witches’ brew” in the eroticism of de Sade and the politics of Hitler, but he also discerns it in the Romantic reaction to both; indeed, he finds here “the entry of Dionysus into consciousness” (Brown 1959: 176). So where might its entry into economy be? Brown attributes to Keynes the correct diagnosis of the “crisis of our time.” The text he uses is Keynes’s “Economic Possibilities for Our Grandchildren,” published in the same year (1930) as “Auri Sacra Fames.” Keynes deplores the fact that “we have been expressly evolved by nature” for the sole purpose of solving the economic problem, that is to say, with tackling scarcity. He asks rhetorically what would happen to us were that problem to be solved: “There is no country and no people who can look forward to the age of leisure and abundance without a dread” (Keynes 1972).

See also true prices just wage, 343 Kant, Immanuel, 27, 34, 81, 83, 86, 227; and the transcendental apperception X, 82 Karatani, Kojin, 8, 12, 80–87, 245; on association, 84; on the base and superstructure, 84; on capital, state and nation, 84; on Kant, 81; on LETS, 84–87, 345; on the parallax view, 80–81, 205; on phenomenon versus noumenon, 82; and Simmel, 27–8, 320; Transcritique, 80; on the transcendental apperception X, 82; on the transcendental illusion, 82 Kaufmann, Walter, 140 Kay, John, 366, 369 Keynes, John Maynard, 8, 12, 20n, 22, 45, 50, 66, 108n24, 178–79, 296; “Auri Sacra Fames,” 155; on austerity, 130; on compound interest, 153; on convention, 119, 120; on deflation, 318; on demand management, 68, 75, 178; “Economic Possibilities for Our Grandchildren,” 153, 155; The General Theory of Employment, Interest and Money, 178, 229; on Gesell, 349; on inflation, 318; on Knapp, 103, 104; on the liquidity premium, 125, 347, 349; on Marx, 59; in Minsky, 117, 119; on money, 125; on money of account, 8, 109–10, 297; on the paradox of thrift, 347; “Social Consequences of Changes in the Value of Money,” 318; A Treatise on Money, 104, 112 Keynesianism, 74–75, 117, 125, 192, 208, 265; privatized, 76 Kierkegaard, Søren, 228n20 Kiva, 316, 358, 380 Kiyotaki, Nobuhiro, 92n Klossowski, Pierre, 172n; on living coin (la monnaie vivante), 194, 203–4, 388 Knapp, Georg Friedrich, 12, 20n, 102–4, 105–6, 108, 121, 255; definition of money, 103 Knorr Cetina, Karin, 230, 233n, 293 Kocherlakota, Narayana, R, 309n Kojève, Alexandre, 172n Krämer, Jörg, 206 Krippner, Greta, 10–11, 280, 285, 289 Krugman, Paul, 127, 129, 198–99, 347; on Bitcoin, 367; on Minsky, 119–20 Kula ring, 31 La Rochelle, Drieu, 172n labor, 74, 78, 98, 129, 139, 144. 176, 192, 195, 228, 229, 239, 240, 298, 353; abstract, 248; and capital, 70, 71, 72, 232, 238, 337; and consumption, 85; crises of, 67; depersonalization of, 340; exploitation of, 67; as a fictitious commodity, 57n16, 280, 311; and money, 56, 245, 343; ownership of, 63; productivity of, 70, and value, 69, 156, 189, 191, 328, 344; vitality of, 343.


pages: 294 words: 96,661

The Fourth Age: Smart Robots, Conscious Computers, and the Future of Humanity by Byron Reese

agricultural Revolution, AI winter, artificial general intelligence, basic income, Buckminster Fuller, business cycle, business process, Claude Shannon: information theory, clean water, cognitive bias, computer age, crowdsourcing, dark matter, Elon Musk, Eratosthenes, estate planning, financial independence, first square of the chessboard, first square of the chessboard / second half of the chessboard, full employment, Hans Rosling, income inequality, invention of agriculture, invention of movable type, invention of the printing press, invention of writing, Isaac Newton, Islamic Golden Age, James Hargreaves, job automation, Johannes Kepler, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, lateral thinking, life extension, Louis Pasteur, low skilled workers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Mary Lou Jepsen, Moravec's paradox, On the Revolutions of the Heavenly Spheres, pattern recognition, profit motive, Ray Kurzweil, recommendation engine, Rodney Brooks, Sam Altman, self-driving car, Silicon Valley, Skype, spinning jenny, Stephen Hawking, Steve Wozniak, Steven Pinker, strong AI, technological singularity, telepresence, telepresence robot, The Future of Employment, the scientific method, Turing machine, Turing test, universal basic income, Von Neumann architecture, Wall-E, Watson beat the top human players on Jeopardy!, women in the workforce, working poor, Works Progress Administration, Y Combinator

Then we invented word processors and the back button. With the Internet, research tasks that used to take days now just take minutes, or even seconds. In a thousand different ways, we have made our workplaces vastly more efficient. So the question is, Why do we still work forty hours a week. Why not fifteen?” I offer up fifteen hours in particular because of a famous prediction made by the economist John Maynard Keynes in a 1930 essay called “Economic Possibilities for Our Grandchildren.” In the essay, Keynes points out that for thousands of years, up until 1700, there was no real change in humans’ standard of living. He attributed this to the lack of technical advance and the failure of capital to accumulate. He then makes the case that at the beginning of the eighteenth century, a spate of technological progress and an infusion of cash came together and created the modern economy, bringing with it the magic of compounding interest and compounding economic growth.

But our long-term goal as a species should be to build machines to do those jobs so that people can do jobs that only people can do. So the idea that technology is eliminating the need for workers seems a hard one to make. To get there, the “this time is different” assumption will need to be ironclad. We will get to that in a moment. ASSUMPTION 2: Too many jobs will be destroyed too quickly. The “jobs will be destroyed too quickly” argument is an old one as well. In 1930, the economist John Maynard Keynes voiced it by saying, “We are being afflicted with a new disease . . . technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.” In 1978, New Scientist repeated the concern: The relationship between technology and employment opportunities most commonly considered and discussed is, of course the tendency for technology to be labour-saving and thus eliminate employment opportunities—if not actual jobs.


pages: 144 words: 43,356

Surviving AI: The Promise and Peril of Artificial Intelligence by Calum Chace

"Robert Solow", 3D printing, Ada Lovelace, AI winter, Airbnb, artificial general intelligence, augmented reality, barriers to entry, basic income, bitcoin, blockchain, brain emulation, Buckminster Fuller, cloud computing, computer age, computer vision, correlation does not imply causation, credit crunch, cryptocurrency, cuban missile crisis, dematerialisation, discovery of the americas, disintermediation, don't be evil, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, everywhere but in the productivity statistics, Flash crash, friendly AI, Google Glasses, hedonic treadmill, industrial robot, Internet of things, invention of agriculture, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, life extension, low skilled workers, Mahatma Gandhi, means of production, mutually assured destruction, Nicholas Carr, pattern recognition, peer-to-peer, peer-to-peer model, Peter Thiel, Ray Kurzweil, Rodney Brooks, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley ideology, Skype, South Sea Bubble, speech recognition, Stanislav Petrov, Stephen Hawking, Steve Jobs, strong AI, technological singularity, The Future of Employment, theory of mind, Turing machine, Turing test, universal basic income, Vernor Vinge, wage slave, Wall-E, zero-sum game

ENDNOTES (1) The term economic singularity was first used (as far as I can tell) by the economist Robin Hanson: http://mason.gmu.edu/~rhanson/fastgrow.html (2) http://arxiv.org/pdf/0712.3329v1.pdf (3) http://skyview.vansd.org/lschmidt/Projects/The%20Nine%20Types%20of%20Intelligence.html (4) The term AGI has been popularised by AI researcher Ben Goertzel, although he gives credit for its invention to Shane Legg and others: http://wp.goertzel.org/who-coined-the-term-agi/ (5) The Shape of Automation for Men and Management by Herbert Simon, 1965 (6) Computation: Finite and Infinite Machines by Marvin Minsky, 1967 (7) http://www.internetlivestats.com/google-search-statistics/ (8) http://en.wikipedia.org/wiki/High-frequency_trading (9) The Big Switch by Nicholas Carr (p 212) (10) https://en.wikipedia.org/wiki/People%27s_Liberation_Army#Third_Department (11) The Big Switch by Nicholas Carr (p 212) (12) https://www.youtube.com/watch?v=Skfw282fJak (13) The Economist, December 4, 2003 (14) Douglas Adams, The Salmon of Doubt (15) http://www.wired.com/2014/10/future-of-artificial-intelligence/ (16) http://lazooz.org/ (17) https://www.hrw.org/reports/2012/11/19/losing-humanity (18) http://www.ifr.org/industrial-robots/statistics/ (19) “Economic possibilities for our grandchildren”: http://www.econ.yale.edu/smith/econ116a/keynes1.pdf (20) https://www.youtube.com/watch?v=HW5Fvk8FNOQ (21) http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf (22) http://www.dailymail.co.uk/sciencetech/article-2981946/Self-driving-cars-30-cities-2017-Pilot-projects-aims-mass-roll-driverless-vehicles-safe-they.html (23) http://www.alltrucking.com/faq/truck-drivers-in-the-usa/ (24) http://www.bls.gov/ooh/transportation-and-material-moving/bus-drivers.htm (25) http://www.bls.gov/ooh/transportation-and-material-moving/taxi-drivers-and-chauffeurs.htm (26) http://www.cristo-barrios.com/discografia/iamus-2/?

It has also rendered obsolete large numbers of clerical jobs. As we saw in chapter 1, the word “computer” originally meant a person who does calculations, but the days when offices were filled with battalions of young (usually male) human computers are long gone. The humble PC has also removed the need for legions of (usually female) secretaries. The fear that automation would lead to mass unemployment is not new. In 1930, the British economist John Maynard Keynes wrote “We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.” (19) Decades later, in the late 1970s, a powerful BBC Horizon documentary called Now the Chips are Down alerted a new generation to the idea (and showcased some truly appalling ties.) (20) Up to now the replacement of humans by machines has been a gradual process.


pages: 402 words: 126,835

The Job: The Future of Work in the Modern Era by Ellen Ruppel Shell

3D printing, affirmative action, Affordable Care Act / Obamacare, Airbnb, airport security, Albert Einstein, Amazon Mechanical Turk, basic income, Baxter: Rethink Robotics, big-box store, blue-collar work, Buckminster Fuller, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer vision, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, deskilling, disruptive innovation, Donald Trump, Downton Abbey, Elon Musk, Erik Brynjolfsson, factory automation, follow your passion, Frederick Winslow Taylor, future of work, game design, glass ceiling, hiring and firing, immigration reform, income inequality, industrial robot, invisible hand, Jeff Bezos, job automation, job satisfaction, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, low skilled workers, Lyft, manufacturing employment, Marc Andreessen, Mark Zuckerberg, means of production, move fast and break things, move fast and break things, new economy, Norbert Wiener, obamacare, offshore financial centre, Paul Samuelson, precariat, Ralph Waldo Emerson, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, Steve Jobs, The Chicago School, Thomas L Friedman, Thorstein Veblen, Tim Cook: Apple, Uber and Lyft, uber lyft, universal basic income, urban renewal, white picket fence, working poor, Y Combinator, young professional, zero-sum game

to make a contribution, to make them feel worthwhile Many thanks to David Nordfors, PhD, founder of the International Institute of Innovation Journalism and Communication (IIIJ) and organizer of a series of top-level conferences focused on innovation and the future of work. David, who was kind enough to invite me to the meeting in Lund, Sweden, was also kind enough to share his thoughts on the future of work in a private conversation. nobody “can look forward to the age of leisure” John Maynard Keynes, “Economic Possibilities for Our Grandchildren” [1930], in Revisiting Keynes: Economic Possibilities for Our Grandchildren, ed. Lorenzo Pecchi and Gustavo Piga (Cambridge, MA: MIT Press, 2008), 23. What’s next on your reading list? Discover your next great read! * * * Get personalized book picks and up-to-date news about this author. Sign up now.

It’s not enough to train people to try to stay one step ahead of the machines. A better approach is to reverse-engineer our thinking—that is, to find new ways to use technology to leverage the power of people to create real value from work. And rather than credit employers with giving us the “gift” of “meaningful” work, let’s agree that the meaning we gain from our work is no gift, but very much a product of our own efforts. British economist John Maynard Keynes once wrote that nobody “can look forward to the age of leisure and of abundance without a dread.” We more or less live in that age, at least when it comes to abundance. Let’s shake off the dread and recalibrate our priorities. The Enlightenment ideal of human advance lifting us from a life of toil into a life of purpose and meaning is at our doorstep. We need only muster the political will—and the trust—to answer the bell.


Rockonomics: A Backstage Tour of What the Music Industry Can Teach Us About Economics and Life by Alan B. Krueger

accounting loophole / creative accounting, Affordable Care Act / Obamacare, Airbnb, autonomous vehicles, bank run, Berlin Wall, bitcoin, Bob Geldof, butterfly effect, buy and hold, creative destruction, crowdsourcing, disintermediation, diversified portfolio, Donald Trump, endogenous growth, George Akerlof, gig economy, income inequality, index fund, invisible hand, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kickstarter, Live Aid, Mark Zuckerberg, Moneyball by Michael Lewis explains big data, moral hazard, Network effects, obamacare, offshore financial centre, Paul Samuelson, personalized medicine, pre–internet, price discrimination, profit maximization, random walk, recommendation engine, rent-seeking, Richard Thaler, ride hailing / ride sharing, Saturday Night Live, Skype, Steve Jobs, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, ultimatum game, winner-take-all economy, women in the workforce, Y Combinator, zero-sum game

But I explained that a lesson of this book is that consumers demand quick and convenient service, which is why streaming platforms such as Apple, Amazon, and Spotify have been able to attract users from sites offering free pirated music, and that music is a social activity that spreads through networks. As the music industry evolves and new apps emerge, the lessons of rockonomics will help us to understand these exciting yet disruptive developments and place them in a broader context. Closing Time In his 1930 essay “Economic Possibilities for Our Grandchildren,” John Maynard Keynes posited that a hundred years hence, the main economic problem confronting people will be what to do with our leisure time: Thus for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.17 Most people are not nearly as free of pressing economic concerns as Keynes had envisioned, partly because of the rise in inequality in our increasingly winner-take-all economy, and that situation is unlikely to change in the next decade when we reach Keynes’s one-hundred-year marker.

Gabard-Durnam, Takao Hensch, and Nim Tottenham, “Music Reveals Medial Prefrontal Cortex Sensitive Period in Childhood,” bioRxiv (2018), https://doi.org/​10.1101/ 412007; Steve M. Janssen, Antonio G. Chessa, and Jaap M. Murre, “Temporal Distribution of Favourite Books, Movies, and Records: Differential Encoding and Re-Sampling,” Memory 15, no. 7 (2007): 755–67. 15. Seth Stephen-Davidowitz, “The Songs That Bind,” New York Times, Feb. 10, 2018. 16. From an interview with Cliff Burnstein and Peter Mensch on Mar. 1, 2018, in New York City. 17. See John Maynard Keynes, Essays in Persuasion (New York: W. W. Norton, 1963), 358–73. 18. Daniel Hamermesh, Spending Time: The Most Valuable Resource (London: Oxford University Press, 2018), 4. 19. Daniel Kahneman and Angus Deaton, “High Income Improves Evaluation of Life but Not Emotional Well-Being,” Proceedings of the National Academy of Sciences 107, no. 38 (2010): 16489–93. Also see, for example, Richard Layard, Happiness: Lessons from a New Science, 2nd ed.


The Limits of the Market: The Pendulum Between Government and Market by Paul de Grauwe, Anna Asbury

"Robert Solow", banking crisis, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, conceptual framework, crony capitalism, Erik Brynjolfsson, eurozone crisis, Honoré de Balzac, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kitchen Debate, means of production, moral hazard, Paul Samuelson, price discrimination, price mechanism, profit motive, Robert Gordon, Ronald Coase, Simon Kuznets, The Nature of the Firm, The Rise and Fall of American Growth, too big to fail, transaction costs, trickle-down economics, ultimatum game, very high income

Finally it also takes a great deal of time to find applications for a new technology. True as all that is, it remains remarkable that after the outbreak of the digital revolution productivity growth is lower than in the previous fifty years. It is not so obvious that the digital revolution will provide us with the means to stop pollution. Growth and Saturation In  John Maynard Keynes wrote a remarkable essay entitled ‘Economic possibilities for our grandchildren’, in which he argued that capitalism would be able to meet all of people’s material needs by around  (i.e. by now) due to development of productivity.  T HE U TO PIA OF SE LF - RE GUL ATIO N People would arrive at the insight that non-material needs were more important than material needs and would work only five to ten hours per week, leaving them able to fully enjoy leisure, art, and culture.


pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

accounting loophole / creative accounting, Airbnb, basic income, Ben Bernanke: helicopter money, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, disruptive innovation, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, market bubble, means of production, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, The Future of Employment, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

More specifically, a rational capitalistic establishment is one with capital accounting, that is, an establishment which determines its income yielding power by calculation according to the methods of modern bookkeeping and the striking of a balance’ (Max Weber, General Economic History, New Brunswick, NJ: Transaction Publishers 2003 [1927], p. 275); Schumpeter: ‘Capitalism is that form of private property economy in which innovations are carried out by means of borrowed money, which in general, though not by logical necessity, implies credit creation’ (Joseph A. Schumpeter, Business Cycles, Vol. 1, Philadelphia, PA: Porcupine Press 1982 [1939], p. 223); Keynes: ‘… the essential characteristic of capitalism [seems to me] the dependence upon an intense appeal to the money-making and money-loving instincts of individuals as the main motive force of the economic machine’ (John Maynard Keynes, The End of Laissez-Faire: The Collected Writings of John Maynard Keynes, Vol. 9, London: Macmillan Press Ltd 1972 [1931], p. 293). As to Marx, Chiapello, in a penetrating article, claims that he never used the concept (Eve Chiapello, ‘Accounting and the Birth of the Notion of Capitalism’, Critical Perspectives on Accounting, vol. 18, no. 3, pp. 263–96; see also Ivan Tibor Berend, ‘Capitalism’. In: Smelser, Neil and Paul Baltes, eds, International Encyclopedia of the Social and Behavioral Sciences, Vol. 3, Amsterdam: Elsevier 2001, pp. 1454–9; Jürgen Kocka, Geschichte des Kapitalismus, München: Verlag C.

, Oxford: Oxford University Press 2013, pp. 1–2. 13What Marx calls entgegenwirkende Ursachen in Capital, Vol. 3, in the context of the ‘law of the tendency of the profit rate to fall’ (Chs. 13ff. in the German original, Karl Marx, Das Kapital. Kritik der Politischen Ökonomie, Dritter Band, Berlin: Dietz Verlag 1966 [1894]). In fact, Collins does deal with countervailing factors, which he calls ‘escapes’, but to show that they are not or no longer effective. See below. 14John Maynard Keynes, ‘Economic Possibilities for our Grandchildren’. In: Keynes, John Maynard, Essays in Persuasion, New York: W. W. Norton & Co. 1963 [1930]. 15For a different, more ‘optimistic’ view of indeterminacy see Wallerstein et al. (Does Capitalism Have a Future?, p. 4): ‘We find hope … exactly in the degree to which our future is politically underdetermined. Systemic crisis loosens and shatters the structural constraints that are themselves the inheritance of past dilemmas … Deep capitalist crisis may be an opportunity to reorganize the planetary affairs of humanity in a way that promotes more social justice and a more livable planet.’


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Thinking Machines: The Inside Story of Artificial Intelligence and Our Race to Build the Future by Luke Dormehl

Ada Lovelace, agricultural Revolution, AI winter, Albert Einstein, Alexey Pajitnov wrote Tetris, algorithmic trading, Amazon Mechanical Turk, Apple II, artificial general intelligence, Automated Insights, autonomous vehicles, book scanning, borderless world, call centre, cellular automata, Claude Shannon: information theory, cloud computing, computer vision, correlation does not imply causation, crowdsourcing, drone strike, Elon Musk, Flash crash, friendly AI, game design, global village, Google X / Alphabet X, hive mind, industrial robot, information retrieval, Internet of things, iterative process, Jaron Lanier, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kickstarter, Kodak vs Instagram, Law of Accelerating Returns, life extension, Loebner Prize, Marc Andreessen, Mark Zuckerberg, Menlo Park, natural language processing, Norbert Wiener, out of africa, PageRank, pattern recognition, Ray Kurzweil, recommendation engine, remote working, RFID, self-driving car, Silicon Valley, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, social intelligence, speech recognition, Stephen Hawking, Steve Jobs, Steve Wozniak, Steven Pinker, strong AI, superintelligent machines, technological singularity, The Coming Technological Singularity, The Future of Employment, Tim Cook: Apple, too big to fail, Turing machine, Turing test, Vernor Vinge, Watson beat the top human players on Jeopardy!

A World of Technological Unemployment Ken Jennings’ crack was as neat a summary as you could hope for when it comes to dealing with one of the perceived dark sides of Artificial Intelligence. Forget leather jacket-wearing Austrian robots trying to take over the world, the real imminent threat AI systems pose relate to our jobs. The phrase ‘technological unemployment’ was first coined by a British economist named John Maynard Keynes in 1930. In a speculative essay entitled ‘Economic Possibilities for our Grandchildren’, Keynes predicted that the world was on the brink of a revolution regarding the speed, efficiency and ‘human effort’ involved with a wide variety of industries. ‘We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come,’ Keynes wrote about the rise of labour-saving machines.

_r=1 30 Levy, David, Love + Sex with Robots: The Evolution of Human-Robot Relations (New York: HarperCollins, 2007). 31 Hempel, Jessi, ‘Computers that Know How You Feel Will Soon Be Everywhere’, Wired, 22 April 2015: wired.com/2015/04/computers-can-now-tell-feel-face/ Chapter 5: How AI Put Our Jobs in Jeopardy 1 Baker, Stephen, Final Jeopardy: Man vs. Machine and the Quest to Know Everything (Boston: Houghton Mifflin Harcourt, 2011). 2 Keynes, John Maynard, ‘Economic Possibilities for Our Grandchildren’, 1930: econ.yale.edu/smith/econ116a/keynes1.pdf 3 Clark, Gregory, A Farewell to Alms: A Brief Economic History of the World (Princeton: Princeton University Press, 2007). 4 Wong, Tessa, ‘Drone Waiters to Plug Singapore’s Service Staff Gap’, BBC News, 8 February 2015: bbc.co.uk/news/world-asia-31148450 5 Ford, Martin, Rise of the Robots: Technology and the Threat of a Jobless Future (New York: Basic Books, 2015): salon.com/2015/05/10/robots_are_coming_for_your_job_amazon_mcdonalds_and_the_next_wave_of_dangerous_capitalist_disruption/ 6 Manyika, James et al.


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Machines of Loving Grace: The Quest for Common Ground Between Humans and Robots by John Markoff

"Robert Solow", A Declaration of the Independence of Cyberspace, AI winter, airport security, Apple II, artificial general intelligence, Asilomar, augmented reality, autonomous vehicles, basic income, Baxter: Rethink Robotics, Bill Duvall, bioinformatics, Brewster Kahle, Burning Man, call centre, cellular automata, Chris Urmson, Claude Shannon: information theory, Clayton Christensen, clean water, cloud computing, collective bargaining, computer age, computer vision, crowdsourcing, Danny Hillis, DARPA: Urban Challenge, data acquisition, Dean Kamen, deskilling, don't be evil, Douglas Engelbart, Douglas Engelbart, Douglas Hofstadter, Dynabook, Edward Snowden, Elon Musk, Erik Brynjolfsson, factory automation, From Mathematics to the Technologies of Life and Death, future of work, Galaxy Zoo, Google Glasses, Google X / Alphabet X, Grace Hopper, Gunnar Myrdal, Gödel, Escher, Bach, Hacker Ethic, haute couture, hive mind, hypertext link, indoor plumbing, industrial robot, information retrieval, Internet Archive, Internet of things, invention of the wheel, Jacques de Vaucanson, Jaron Lanier, Jeff Bezos, job automation, John Conway, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, knowledge worker, Kodak vs Instagram, labor-force participation, loose coupling, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, medical residency, Menlo Park, Mitch Kapor, Mother of all demos, natural language processing, new economy, Norbert Wiener, PageRank, pattern recognition, pre–internet, RAND corporation, Ray Kurzweil, Richard Stallman, Robert Gordon, Rodney Brooks, Sand Hill Road, Second Machine Age, self-driving car, semantic web, shareholder value, side project, Silicon Valley, Silicon Valley startup, Singularitarianism, skunkworks, Skype, social software, speech recognition, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, strong AI, superintelligent machines, technological singularity, Ted Nelson, telemarketer, telepresence, telepresence robot, Tenerife airport disaster, The Coming Technological Singularity, the medium is the message, Thorstein Veblen, Turing test, Vannevar Bush, Vernor Vinge, Watson beat the top human players on Jeopardy!, Whole Earth Catalog, William Shockley: the traitorous eight, zero-sum game

Interview with Dr. Norbert Wiener, Noted Scientist,” U.S. News & World Report, February 24, 1964, http://21stcenturywiener.org/wp-content/uploads/2013/11/Machines-Smarter-Than-Man-Interview-with-Norbert-Wiener.pdf. 20.Defense Science Board, “The Role of Autonomy in DoD Systems,” U.S. Department of Defense, July 2012, http://www.acq.osd.mil/dsb/reports/AutonomyReport.pdf. 21.John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” in Essays in Persuasion (New York: W.W. Norton & Co, 1963), 358–373. 22.Jeremy Rifkin, The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era (New York: Putnam, 1995), xvii. 23.John Markoff, “Armies of Expensive Lawyers, Replaced by Cheaper Software,” New York Times, March 4, 2011, http://www.nytimes.com/2011/03/05/science/05legal.html?

Over the next decade the consequences of creating autonomous machines will appear more frequently as manufacturing, logistics, transportation, education, health care, and communications are increasingly directed and controlled by learning algorithms rather than humans. Despite Wiener’s early efforts to play a technological Paul Revere, after the automation debates of the 1950s and 1960s tailed off, fears of unemployment caused by technology would vanish from the public consciousness until sometime around 2011. Mainstream economists generally agreed on what they described as the “Luddite fallacy.” As early as 1930, John Maynard Keynes had articulated the general view on the broad impact of new technology: “We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come—namely, technological unemployment. This means unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor.


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Warnings by Richard A. Clarke

active measures, Albert Einstein, algorithmic trading, anti-communist, artificial general intelligence, Asilomar, Asilomar Conference on Recombinant DNA, Bernie Madoff, cognitive bias, collateralized debt obligation, complexity theory, corporate governance, cuban missile crisis, data acquisition, discovery of penicillin, double helix, Elon Musk, failed state, financial thriller, fixed income, Flash crash, forensic accounting, friendly AI, Intergovernmental Panel on Climate Change (IPCC), Internet of things, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge worker, Maui Hawaii, megacity, Mikhail Gorbachev, money market fund, mouse model, Nate Silver, new economy, Nicholas Carr, nuclear winter, pattern recognition, personalized medicine, phenotype, Ponzi scheme, Ray Kurzweil, Richard Feynman, Richard Feynman: Challenger O-ring, risk tolerance, Ronald Reagan, Sam Altman, Search for Extraterrestrial Intelligence, self-driving car, Silicon Valley, smart grid, statistical model, Stephen Hawking, Stuxnet, technological singularity, The Future of Employment, the scientific method, The Signal and the Noise by Nate Silver, Tunguska event, uranium enrichment, Vernor Vinge, Watson beat the top human players on Jeopardy!, women in the workforce, Y2K

Nicholas Carr, The Glass Cage: Automation and Us (New York: Norton, 2014), reviewed in Sean Braswell, “All Rise for Chief Justice Robot!” Ozy.com, www.ozy.com/immodest-proposal/all-rise-for-chief-justice-robot/41131 (accessed Oct. 8, 2016). 26. McKinsey Global Institute, referenced in Lakshmi Sandhana, “47% of U.S. Jobs under Threat from Computerization According to Oxford Study,” New Atlas, http://newatlas.com/half-of-us-jobs-computerized/29142 (accessed Oct. 8, 2016). 27. John Maynard Keynes, “Economic Possibilities for Our Grandchildren” (1933) in Essays in Persuasion (New York: Norton, 1963) referenced in Frey and Osbourne, “Future of Employment,” 3. 28. Studebaker was a leading buggy manufacturer that shifted to cars and became one of the four largest auto manufacturers in the United States. 29. Martin Ford, Rise of the Robots: Technology and the Threat of a Jobless Future (New York: Basic Books, 2015). 30.

It suggests that even lawyers, doctors, and investment managers will soon find themselves competing and losing to weak-AI software that can more rapidly assess the relevant data and make decisions with “deep, specialized, and often tacit knowledge.”25 A 2013 McKinsey Global Institute study predicts that weak AI will depose 140 million full-time knowledge workers worldwide.26 The idea is certainly not new. In 1933, John Maynard Keynes predicted widespread unemployment “due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.”27 Technological evolution is part and parcel of the history of humanity; the introduction of the wheel, gunpowder, the steam engine, the car, the adding machine, have all led to systemic societal transformation. Most would contend that the world is better for it.


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Radical Technologies: The Design of Everyday Life by Adam Greenfield

3D printing, Airbnb, augmented reality, autonomous vehicles, bank run, barriers to entry, basic income, bitcoin, blockchain, business intelligence, business process, call centre, cellular automata, centralized clearinghouse, centre right, Chuck Templeton: OpenTable:, cloud computing, collective bargaining, combinatorial explosion, Computer Numeric Control, computer vision, Conway's Game of Life, cryptocurrency, David Graeber, dematerialisation, digital map, disruptive innovation, distributed ledger, drone strike, Elon Musk, Ethereum, ethereum blockchain, facts on the ground, fiat currency, global supply chain, global village, Google Glasses, IBM and the Holocaust, industrial robot, informal economy, information retrieval, Internet of things, James Watt: steam engine, Jane Jacobs, Jeff Bezos, job automation, John Conway, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, joint-stock company, Kevin Kelly, Kickstarter, late capitalism, license plate recognition, lifelogging, M-Pesa, Mark Zuckerberg, means of production, megacity, megastructure, minimum viable product, money: store of value / unit of account / medium of exchange, natural language processing, Network effects, New Urbanism, Occupy movement, Oculus Rift, Pareto efficiency, pattern recognition, Pearl River Delta, performance metric, Peter Eisenman, Peter Thiel, planetary scale, Ponzi scheme, post scarcity, post-work, RAND corporation, recommendation engine, RFID, rolodex, Satoshi Nakamoto, self-driving car, sentiment analysis, shareholder value, sharing economy, Silicon Valley, smart cities, smart contracts, social intelligence, sorting algorithm, special economic zone, speech recognition, stakhanovite, statistical model, stem cell, technoutopianism, Tesla Model S, the built environment, The Death and Life of Great American Cities, The Future of Employment, transaction costs, Uber for X, undersea cable, universal basic income, urban planning, urban sprawl, Whole Earth Review, WikiLeaks, women in the workforce

“An Open Letter to The DAO and the Ethereum Community,” June 18, 2016, steemit.com/ethereum/@chris4210/an-open-letter-to-the-dao-and-the-ethereum-community. 36.Emin Gün Sirer, “Thoughts on The DAO Hack,” Hacking, Distributed, June 17, 2016. 37.Mike Hearn, “The Future of Money (and Everything Else),” Turing Festival 2013, August 23, 2013. 38.Anne Amnesia, “Unnecessariat,” More Crows Than Eagles, May 10, 2016, morecrows.wordpress.com/2016/05/10/unnecessariat/. 7Automation 1.John Maynard Keynes, “Economic Possibilities for our Grandchildren,” Nation and Athenaeum, Vol. 48, Issues 2–3, October 11 and 18, 1930. 2.Economic Report of the President, February 2016. Washington DC: Government Printing Office, 2016. 3.Tim O’Reilly, “Managing the Bots That Are Managing the Business,” MIT Sloan Management Review, May 31, 2016; Charlotte McEleny, “McCann Japan hires first artificially intelligent creative director,” The Drum, March 29, 2016. 4.Jason Mick, “Foxconn Billionaire Hints at Robotic Apple Factory, Criticizes Dead Employees,” DailyTech, June 30, 2014. 5.An advertisement for Columbia/Okura palletizing robots touts, even ahead of their “surprising affordability,” the fact that they “eliminate costly stacking-related injuries.” 6.International Labor Organization.

Out of this unwillingness, these people have set out to devise technical systems that are more capable than we are ourselves, along any axis or dimension of evaluation you might care to mention: systems that are stronger and faster than we are; that have finer perception and greater endurance; that never, ever succumb to boredom, fatigue or disgust; and that are capable of operating without human oversight or guidance, indefinitely. We are, of course, talking about using robots and automated systems to replace human labor. The great twentieth-century economist John Maynard Keynes had foreseen much of this early on, coining the expression “technological unemployment” sometime around 1928.1 He saw, with almost clairvoyant perspicacity, that societies might eventually automate away the jobs much of their labor force depended on, and his insight is borne out in recent United States government estimates that an American worker making less than $20 an hour now has an 83 percent chance of losing their job to automation.2 But what Keynes concluded—that the eclipse of human labor by technical systems would necessarily compel a turn toward a full-leisure society—has not come to pass, not even remotely.


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Extreme Economies: Survival, Failure, Future – Lessons From the World’s Limits by Richard Davies

agricultural Revolution, air freight, Anton Chekhov, artificial general intelligence, autonomous vehicles, barriers to entry, big-box store, cashless society, clean water, complexity theory, deindustrialization, eurozone crisis, failed state, financial innovation, illegal immigration, income inequality, informal economy, James Hargreaves, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, large denomination, Livingstone, I presume, Malacca Straits, mandatory minimum, manufacturing employment, means of production, megacity, meta analysis, meta-analysis, new economy, off grid, oil shale / tar sands, pension reform, profit motive, randomized controlled trial, school choice, school vouchers, Scramble for Africa, side project, Silicon Valley, Simon Kuznets, Skype, spinning jenny, The Chicago School, the payments system, trade route, Travis Kalanick, uranium enrichment, urban planning, wealth creators, white picket fence, working-age population, Y Combinator, young professional

Jaska, E. (1952), ‘The Results of Collectivization of Estonian Agriculture’, Land Economics, 28 (3), 212–17. Kahk, J., and Tarvel, E. (1997), An Economic History of the Baltic Countries (Stockholm: Almquist & Wiksell International). Kattel, R. and Mergel, I. (2018), Estonia’s Digital Transformation: Mission Mystique and the Hiding Hand, UCL Institute for Innovation and Public Purpose Working Paper Series (IIPP WP 2018-09). Keynes, J. M. (1930), ‘Economic Possibilities for Our Grandchildren’, in Essays in Persuasion (1963) (New York: W. W. Norton & Co.). Koort, K. (2014), ‘The Russians of Estonia: Twenty Years After’, World Affairs, July/August. Korjus, K. (ed.) (2018), E-Residency 2.0, White Paper. Kotka, T., Alvarez del Castillo, C. I. V., and Korjus, K. (2015), ‘Estonian e-Residency: Redefining the Nation-state in the Digital Era’, Cyber Studies Programme Working Paper No. 3, University of Oxford, September.

When a material fails, these latent properties are lost – rubber loses its elasticity, metal loses its strength – and the potential is gone. Kirkaldy’s big idea was that to understand potential fully – its limits, how it can be lost, how it can be protected – we need to collect and examine fragments of failure. The final motivation for studying extremes comes from an idea set out in 1928 by the economist John Maynard Keynes. Concerned that society was in the grip of a bout of pessimism about the economy, Keynes set out a largely optimistic long-term vision. Part of his argument was that we can get a glimpse of the future today, if we know where to look. The trick was to identify a sustained trend – a path most people are following – and look at the lives of those experiencing the extremes of that trend. At the time, Keynes thought the sustained trends would be an increase in material wealth and a reduction in the need to work.

Glasgow once vied with London for the title of Britain’s leading city, with so many breakthroughs in science, engineering and the arts that there was no better place to live at the start of the twentieth century. But Glasgow unravelled, losing everything as it became Britain’s most troubled city, a dubious honour it retains today. In each of these places vast potential – whether natural, human or industrial – has somehow gone to waste, with economics often at the core of the problem. Finally, I visited three places John Maynard Keynes would have looked at if he were alive today and following his own advice on how to take a peek at the economic future. As 2020 approaches, it seems the world is again in the grip of economic pessimism. Across the globe, most countries face three trends: ageing populations, the flux caused by new technology, and a rise of inequality. The trends are generally seen as unavoidable and capable of inflicting serious damage on the economy: they will be tests of resilience and may drive some economies to failure.


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The Refusal of Work: The Theory and Practice of Resistance to Work by David Frayne

anti-work, basic income, Bertrand Russell: In Praise of Idleness, call centre, clockwatching, David Graeber, deindustrialization, deskilling, future of work, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, knowledge economy, knowledge worker, low skilled workers, McJob, means of production, moral panic, new economy, post-work, profit motive, Silicon Valley, Silicon Valley ideology, Skype, unpaid internship, working poor, young professional

However, the elimination of human labour by developments in production technology has also been celebrated by the ‘end of work’ authors, because it opens up the theoretical possibility of a huge expansion of free-time. There have been many versions of this core idea. We find one such version in a famous essay by John Maynard Keynes, for whom the promise of greater freedom from work seemed like a realistic and relatively imminent possibility. In his essay on the ‘Economic Possibilities for Our Grandchildren’, first published in the 1930s, Keynes predicted that advances in production technology might reduce work time and allow the population as a whole to work less – as little as fifteen hours per week by the year 2030 (Keynes, 1932). Keynes discussed this in terms of the ‘economic problem’ (of scarcity, there not being enough goods to go around) having finally been ‘solved’ by society.

., 93 GDP, critiqued as indicator of progress, 3, 223 Generation X, 114 Genesis, Book of, 23 Gerald, a former academic, 151, 177, 178, 180, 193–4 Germany, 35-hour week in, 224 gestural type of rebellion, 214 Goffman, Erving, 192, 200, 204, 212 Goodman, Eleanor, 157 Google, offices of, 59 Gorz, André, 2, 19–20, 35–41, 43, 61, 62, 67, 74, 82, 90–1, 92, 115–16, 149–50, 151, 178, 179, 184–5, 217, 220–1 Gothenburg (Sweden), shorter working day in, 224 graduates, disillusionment of, 146 Graeber, David, 40 Granter, Edward, 112 gratifying work see satisfying work gratitude, culture of, 232 Greece: ancient, work regarded as curse, 23–4; sea turtle rescue project, 181 Green Party (UK): Basic Income policy, 226; policy on reducing working hours, 224 Gregg, Melissa, 72, 218 growth, economic, 43, 44, 236; critique of, 3–4, 6 Guinness beer, marketing of, 87 H Haiven, Max, 231 Hank, a brothel client, 55 ‘hardworking people’, reference to, 99 Harmony, a utopian society, 31 having, mode of being, 79, 166 Hayden, Anders, 39 Health and Safety Executive (UK), 148 hedonism, alternative, 116, 162–3, 168, 187 ‘Hephaestus’ company, 56–7 high-commitment work cultures, 57 hobbies, use of term, 70 Hochschild, Arlie, 52, 137; The Managed Heart, 53–4; The Outsourced Self, 67 Hodgkinson, Tom, How To Be Idle, 206 holidays, entitlement to, 139 homes, atmosphere of, 184–5 Honneth, Axel, 193 honour, 193 Horkheimer, Max, 81 humanisation of working day, 61 Humphery, Kim, 90 Hunnicutt, Benjamin, Work Without End, 82–5, 96–7 hygiene, Gorz’s definition of, 149–50 I identification with job roles, 62 identity, linked to work, 14–15, 27 idleness, morally objectionable, 83 idler: synonyms for, 189; use of term, 120 Idlers’ Alliance, 118–19, 122, 206, 207, 234 idling, concept of, 234 Illich, Ivan, 185–6 illness, 148, 196–7; has a meaning, 149; medical diagnosis of, 197; mental, 152; need for justification of, 202; non-suppression of, 150–1; repoliticisation of, 229 imagination, defending the importance of, 235–7 immaterial labour, 56 immaturity, perceived, 197–8 ‘in between jobs’, 202 inclusion, social, 161 income: alternative sources of, 161; management of, 121; to be decoupled from work, 112 indifference in work, 47–52 inner critic, 203 insecurity, 73–4 interiority, loss of, 81 International Labour Organisation (ILO), 42, 68 internships, unpaid, 81 interviews: limitations of, 121; methodology of, 118–19 intimacy of work, 52–61 Italian Autonomist movement, 1–2 J Jack, a former librarian, 122–4, 170 Jackson, Tim, 43 Jahoda, Marie, 106, 137 James, Selma, 115 Jarrett, Joanna, 199 job application forms, 76 job centres, 201 job competition, globalisation of, 42 job creation, 6 job insecurity, 6 joblessness, voluntary, in USA, 124–5 Jobseeker’s Allowance, 104, 134, 136 July, Miranda, 189 junk commodities, accumulation of, 170 K Kelley, Robin, 115 Kelvin, Peter, 199 Kerouac, Jack, 206 Kerr, Walter, The Decline of Pleasure, 173 Kettering, Charles, 85 Keynes, John Maynard, 33–5, 68, 82, 84; ‘Economic Possibilities for Our Grandchildren’, 33 Khasnabish, Alex, 231 knowledge economy, 49, 61 L labour exchanges, regulate casual labouring, 28 labour habits, new, formation of, 29 labour market, pressure of, 80 Labour Party (UK), 5 ‘labourers without labour’, 39, 41 Lafargue, Paul, The Right To Be Lazy, 21 laptops, 72 Larry, a former social worker, 120, 131–4, 137, 175 Lazarsfeld, Paul, 204 laziness, alleged culture of, 100 Learning to Love You More project, 189 Lefkowitz, Bernard, 124–5 Lego Movie, The, 71–2 leisure: as privilege for all, 95; fear of, 111; promotes consumption, 84 leisure time, shortage of, 68 less work see working less Levitas, Ruth, 235 Lewis, Justin, 85 life plans, 210 Linder, Staffan, 173–4, 177 living in a community, 144 living with intention, 128 living with less, as empowerment, 180 living without work, 21–3, 117, 119, 141 Lodziak, Conrad, 89 looking after pets, 195 ‘looking over one’s shoulder’, 76 loss of income, personal consequences of, 109 low-wage work, 6 lowering levels of spending, 171 Lucy, a former bargain shop worker, 127, 134–8, 151, 153, 159, 167, 174–5, 177, 183, 186, 194, 195, 198, 205–6 Lynx deodorant, marketing of, 87 M Marcuse, Herbert, 8, 35; Eros and Civilisation, 34; One-Dimensional Man, 26 Marienthal, sociological research into, 106–8, 110 Markland, George L., 97 Marx, Karl, 26, 30, 46, 85, 106, 116, 125, 142, 143, 147, 148; Capital, 32, 47, 114; Economic and Philosophical Manuscripts of 1844, 47–8; views on technology, 32, 33; views on work, 17–18, 32 material objects, connection to, 183 material wealth, desire for, 27 Matthew, a former office worker, 13, 58, 134–8, 141, 142–4, 146–7, 159, 169, 174, 177, 183, 186, 194, 201, 202, 205–6 maturity, definition of, 198 McDonald’s, 167, 213 ‘McJobs’, 114 McKenna, S., 109 McShit T-shirt, 213 Mead, George Herbert, 203 mealtimes see eating together meaningfulness in work, 63 meaningless work, 12–13, 22, 40 medication, rejection of, 150–1 Merton, Robert, 146 Mike, an interviewee, 124, 130, 165 Mills, C.


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Elsewhere, U.S.A: How We Got From the Company Man, Family Dinners, and the Affluent Society to the Home Office, BlackBerry Moms,and Economic Anxiety by Dalton Conley

assortative mating, call centre, clean water, commoditize, dematerialisation, demographic transition, Edward Glaeser, extreme commuting, feminist movement, financial independence, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Home mortgage interest deduction, income inequality, informal economy, Jane Jacobs, Joan Didion, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, late capitalism, low skilled workers, manufacturing employment, mass immigration, McMansion, mortgage tax deduction, new economy, off grid, oil shock, PageRank, Ponzi scheme, positional goods, post-industrial society, post-materialism, principal–agent problem, recommendation engine, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Skype, statistical model, The Death and Life of Great American Cities, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, women in the workforce, Yom Kippur War

“Cybernation,” which the authors argued resulted from “the combination of the computer and the automated self-regulating machine,” was “already reorganizing the economic and social system to meet its own needs”—in 1964, no less. Others, who put a more optimistic spin on the work-saving impact of automation (and later computers), worried about what Americans would do with all their new leisure time. John Maynard Keynes famously fretted in a 1930 essay, “Economic Possibilities for Our Grandchildren,” over how humans would spend their time in a meaningful way when work was no longer necessary. And it was true—at least at first: Over the course of the 1950s and 1960s, average work hours decreased as Americans became more productive and the economy grew at a good clip. But, as history actually played out, these worries about how to fill the hours of the day with something more important than spectator sports, bridge, bingo, or backgammon were a tad premature.


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Possible Minds: Twenty-Five Ways of Looking at AI by John Brockman

AI winter, airport security, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, artificial general intelligence, Asilomar, autonomous vehicles, basic income, Benoit Mandelbrot, Bill Joy: nanobots, Buckminster Fuller, cellular automata, Claude Shannon: information theory, Daniel Kahneman / Amos Tversky, Danny Hillis, David Graeber, easy for humans, difficult for computers, Elon Musk, Eratosthenes, Ernest Rutherford, finite state, friendly AI, future of work, Geoffrey West, Santa Fe Institute, gig economy, income inequality, industrial robot, information retrieval, invention of writing, James Watt: steam engine, Johannes Kepler, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, Kickstarter, Laplace demon, Loebner Prize, market fundamentalism, Marshall McLuhan, Menlo Park, Norbert Wiener, optical character recognition, pattern recognition, personalized medicine, Picturephone, profit maximization, profit motive, RAND corporation, random walk, Ray Kurzweil, Richard Feynman, Rodney Brooks, self-driving car, sexual politics, Silicon Valley, Skype, social graph, speech recognition, statistical model, Stephen Hawking, Steven Pinker, Stewart Brand, strong AI, superintelligent machines, supervolcano, technological singularity, technoutopianism, telemarketer, telerobotics, the scientific method, theory of mind, Turing machine, Turing test, universal basic income, Upton Sinclair, Von Neumann architecture, Whole Earth Catalog, Y2K, zero-sum game

Accountants, many legal and medical professionals, financial analysts and stockbrokers, travel agents—in fact, a large fraction of white-collar jobs—will disappear as a result of sophisticated machine-learning programs. We face a future in which factories churn out goods with very few employees and the movement of goods is largely automated, as are many services. What’s left for humans to do? In 1930—long before the advent of computers, let alone AI—John Maynard Keynes wrote, in an essay called “Economic Possibilities for Our Grandchildren,” that as a result of improvements in productivity, society could produce all its needs with a fifteen-hour workweek. He also predicted, along with the growth of creative leisure, the end of money and wealth as a goal: We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession—as distinguished from the love of money as a means to the enjoyments and realities of life—will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.

., xxv, 41–53, 120, 191 AI as “helpless by themselves,” 46–48 AI as tool, not colleagues, 46–48, 51–53 background and overview of work of, 41–42 dependence on new tools and loss of ability to thrive without them, 44–46 gap between today’s AI and public’s imagination of AI, 49 humanoid embellishment of AI, 49–50 intelligent tools versus artificial conscious agents, need for, 51–52 operators of AI systems, responsibilities of, 50–51 on Turing Test, 46–47 on Weizenbaum, 48–50 on Wiener, 43–45 Descartes, René, 191, 223 Desk Set (film), 270 Deutsch, David, 113–24 on AGI risks, 121–22 background and overview of work of, 113–14 creating AGIs, 122–24 developing AI with goals under unknown constraints, 119–21 innovation in prehistoric humans, lack of, 116–19 knowledge imitation of ancestral humans, understanding inherent in, 115–16 reward/punishment of AI, 120–21 Differential Analyzer, 163, 179–80 digital fabrication, 167–69 digital signal encoding, 180 dimensionality, 165–66 distributed Thompson sampling, 198 DNA molecule, 58 “Dollie Clone Series” (Hershman Leeson), 261, 262 Doubt and Certainty in Science (Young), xviii Dragan, Anca, 134–42 adding people to AI problem definition, 137–38 background and overview of work of, 134–35 coordination problem, 137, 138–41 mathematical definition of AI, 136 value-alignment problem, 137–38, 141–42 The Dreams of Reason: The Computer and the Rise of the Science of Complexity (Pagels), xxiii Drexler, Eric, 98 Dyson, Freeman, xxv, xxvi Dyson, George, xviii–xix, 33–40 analog and digital computation, distinguished, 35–37 background and overview of work of, 33–34 control, emergence of, 38–39 electronics, fundamental transitions in, 35 hybrid analog/digital systems, 37–38 on three laws of AI, 39–40 “Economic Possibilities for Our Grandchildren” (Keynes), 187 “Einstein, Gertrude Stein, Wittgenstein and Frankenstein” (Brockman), xxii emergence, 68–69 Emissaries trilogy (Cheng), 216–17 Empty Space, The (Brook), 213 environmental risk, AI risk as, 97–98 Eratosthenes, 19 Evans, Richard, 217 Ex Machina (film), 242 expert systems, 271 extreme wealth, 202–3 fabrication, 167–69 factor analysis, 225 Feigenbaum, Edward, xxiv Feynman, Richard, xxi–xxii Fifth Generation, xxiii–xxiv The Fifth Generation: Artificial Intelligence and Japan’s Computer Challenge to the World (Feigenbaum and McCorduck), xxiv Fodor, Jerry, 102 Ford Foundation, 202 Foresight and Understanding (Toulmin), 18–19 free will of machines, and rights, 250–51 Frege, Gottlob, 275–76 Galison, Peter, 231–39 background and overview of work of, 231–32 clinical versus objective method of prediction, 233–35 scientific objectivity, 235–39 Gates, Bill, 202 generative adversarial networks, 226 generative design, 166–67 Gershenfeld, Neil, 160–69 background and overview of work of, 160–61 boom-bust cycles in evolution of AI, 162–63 declarative design, 166–67 digital fabrication, 167–69 dimensionality problem, overcoming, 165–66 exponentially increasing amounts of date, processing of, 164–65 knowledge in AI systems, 164 scaling, and development of AI, 163–66 Ghahramani, Zoubin, 190 Gibson, William, 253 Go, 10, 150, 184–85 goal alignment.


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Shadow Work: The Unpaid, Unseen Jobs That Fill Your Day by Craig Lambert

airline deregulation, Asperger Syndrome, banking crisis, Barry Marshall: ulcers, big-box store, business cycle, carbon footprint, cashless society, Clayton Christensen, cognitive dissonance, collective bargaining, Community Supported Agriculture, corporate governance, crowdsourcing, disintermediation, disruptive innovation, financial independence, Galaxy Zoo, ghettoisation, gig economy, global village, helicopter parent, IKEA effect, industrial robot, informal economy, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Mark Zuckerberg, new economy, pattern recognition, plutocrats, Plutocrats, recommendation engine, Schrödinger's Cat, Silicon Valley, single-payer health, statistical model, Thorstein Veblen, Turing test, unpaid internship, Vanguard fund, Vilfredo Pareto, zero-sum game, Zipcar

Now, the news flash, which may come as a surprise to some: You can spend leisure time doing things other than consuming goods and services. We are not (yet, anyway) required to devote all our nonworking hours to the essentially economic activity of consumption. At leisure, you may take a walk, play with your child, appreciate the garden, luxuriate in an erotic interlude, meditate, read a library book, marvel at the night sky, take a nap. You can even do nothing. IN 1928 JOHN Maynard Keynes wrote “Economic Possibilities for Our Grandchildren,” an essay in which he predicted that by 2028, technological progress would make economic productivity so efficient that people would work three-hour days and fifteen-hour weeks, releasing vast amounts of leisure. The main problem would be what to do with all those free hours. Solving this dilemma isn’t the cakewalk you might think. Consider the boredom of the idle rich.


pages: 364 words: 104,697

Were You Born on the Wrong Continent? by Thomas Geoghegan

Albert Einstein, American Society of Civil Engineers: Report Card, banking crisis, Berlin Wall, Bob Geldof, collective bargaining, corporate governance, cross-subsidies, dark matter, David Brooks, declining real wages, deindustrialization, ending welfare as we know it, facts on the ground, Gini coefficient, haute cuisine, income inequality, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, laissez-faire capitalism, low skilled workers, Martin Wolf, McJob, minimum wage unemployment, mittelstand, offshore financial centre, Paul Samuelson, payday loans, pensions crisis, plutocrats, Plutocrats, purchasing power parity, Ralph Waldo Emerson, Robert Gordon, Ronald Reagan: Tear down this wall, Saturday Night Live, Silicon Valley, The Wealth of Nations by Adam Smith, Thorstein Veblen, union organizing, Wolfgang Streeck, women in the workforce

When that person has 700 more hours a year, to learn an extra language, to go to Sri Lanka, or just to read, it’s that high achiever who may be best off under the European model. There is a new skepticism about GDP per capita, at least from a few economists. But we still need someone who can show us how to keep the books. Long dead now is the one who might have done it: I mean John Maynard Keynes, who wrote the haunting essay “Economic Possibilities for Our Grandchildren.” In that long-ago essay (1930), he talked of a world in which his grandchildren would not really have to work. Or not in the old way. We’d write. Read. We’d have long afternoons full of cigarettes and novels. “It was Keynes at his silliest,” or so his biographer writes. But was he so silly? I am old enough to be one of Keynes’s grandchildren. And of course, we have to work!

Denmark children in poverty elderly poor GDP per capita hours worked jobs/employment percent of adults holding an associate degree percent of adults self-employed purchasing power ratios/disparities unemployment rates for college graduates Despres, Leon Dewey, John Diamond, Jared Disney The Disposable American (Uchitelle) Le Divorce (Johnson) DIY (Berlin think tank) Dutschke, Rudi Earned Income Tax Credit (EITC) East Asia Economic Policy Institute’s State of Working America[Shouldn’t there be more here? The tables?] “Economic Possibilities for Our Grandchildren” (Keynes) The Economist The Education of Henry Adams education system (Germany) apprenticeships college tuitions college-attendance rates Dual Track system high school graduates/postgrads and reading law students learning mastery and skill political identity/education study of topics over a lifetime education system (U.S.) college tuition costs college-attendance Einstein, Albert Eisenhower, Dwight elderly poor Emerson, Ralph Waldo “The End of Retirement” (Ghilarducci) English language Europe France Germany and global competition Erhard, Ludwig ethnic diversity in Europe European Central Bank European model of social democracy (background) affluence and order and the bourgeois and capitalism and Catholic Church children in poverty civil society (public opinion and unifying “idea”) comparisons/contrasts with U.S.


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The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite by Daniel Markovits

"Robert Solow", 8-hour work day, activist fund / activist shareholder / activist investor, affirmative action, Anton Chekhov, asset-backed security, assortative mating, basic income, Bernie Sanders, big-box store, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, carried interest, collateralized debt obligation, collective bargaining, computer age, corporate governance, corporate raider, crony capitalism, David Brooks, deskilling, Detroit bankruptcy, disruptive innovation, Donald Trump, Edward Glaeser, Emanuel Derman, equity premium, European colonialism, everywhere but in the productivity statistics, fear of failure, financial innovation, financial intermediation, fixed income, Ford paid five dollars a day, Frederick Winslow Taylor, full employment, future of work, gender pay gap, George Akerlof, Gini coefficient, glass ceiling, helicopter parent, high net worth, hiring and firing, income inequality, industrial robot, interchangeable parts, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, longitudinal study, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass incarceration, medical residency, minimum wage unemployment, Myron Scholes, Nate Silver, New Economic Geography, new economy, offshore financial centre, Paul Samuelson, payday loans, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, purchasing power parity, rent-seeking, Richard Florida, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, school choice, shareholder value, Silicon Valley, Simon Kuznets, six sigma, Skype, stakhanovite, stem cell, Steve Jobs, supply-chain management, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, Thomas Davenport, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, traveling salesman, universal basic income, unpaid internship, Vanguard fund, War on Poverty, Winter of Discontent, women in the workforce, working poor, young professional, zero-sum game

See Benjamin Hunnicut, Free Time: The Forgotten American Dream (Philadelphia: Temple University Press, 2013), 117–19. “four-day week, four-hour day”: See Nathan Schneider, “Who Stole the Four-Hour Workday,” Vice News, December 30, 2014, accessed November 18, 2018, www.vice.com/read/who-stole-the-four-hour-workday-0000406-v21n8. See also Jon Bekken, “Arguments for a Four-Hour Day,” Libertarian Labor Review 1 (1986). might be possible within a century: See John Maynard Keynes, “Economic Possibilities for Our Grandchildren” (1930), in Essays in Persuasion (New York: W. W. Norton, 1963). Keynes believed that technological progress, combined with the rapid growth produced by compound interest, entailed that “the economic problem may be solved, or at least within sight of solution, within a hundred years.” It is worth nothing that Keynes’s thought on this question was not simply utopian: he worried that mankind possesses an innate drive to work and that a “dread” would set in among people confronting a surfeit of leisure.

In the first decades of the twentieth century, on the heels of early victories in the fight for a forty-hour workweek, some labor unions began to push to reduce work further. Calls for a thirty-hour week became increasingly prominent, and some of the more radical unions sought still shorter hours (the Industrial Workers of the World even went so far as to print T-shirts calling for a “four-day week, four-hour day”). Disinterested observers took these calls to be expressing a serious proposition. No less than John Maynard Keynes, writing around 1930, predicted that technological innovation would effectively eliminate long (or even moderate) human hours and labor effort for the masses, imagining that a three-hour workday might be possible within a century. Keynes and others hoped that these developments would usher in something approaching a utopia—a new world in which everyone might enjoy a form of life that, in their world, only elites could afford.

the flesh surrounds us with its own decisions: Philip Larkin, “Ignorance,” in The Whitsun Weddings (London: Faber & Faber, 1964). Chapter Eight: Snowball Inequality employment and growth in a consumer economy depend: The rich will never consume sufficiently to sustain demand, no matter how rich they are. As Keynes recognized long ago, the diminishing marginal utility of consumption entails that a person’s propensity to consume her income falls as her income rises. See generally John Maynard Keynes, The General Theory of Employment, Interest, and Money (London: Macmillan, 1936). expanding private borrowing: Economic modeling formalizes these intuitive connections. Models show that inequality increases the demand for credit and that loose credit can substitute for redistribution in stimulating aggregate demand and thus supporting employment and growth. See Christopher Brown, “Does Income Distribution Matter for Effective Demand?


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Less Is More: How Degrowth Will Save the World by Jason Hickel

air freight, Airbnb, basic income, Bernie Sanders, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, British Empire, capital controls, cognitive dissonance, coronavirus, corporate governance, corporate personhood, COVID-19, David Graeber, decarbonisation, declining real wages, deindustrialization, dematerialisation, Elon Musk, energy transition, Fellow of the Royal Society, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, gender pay gap, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, land reform, liberal capitalism, longitudinal study, Mahatma Gandhi, Mark Zuckerberg, McMansion, means of production, meta analysis, meta-analysis, microbiome, moral hazard, mortgage debt, Naomi Klein, new economy, offshore financial centre, oil shale / tar sands, out of africa, passive income, planetary scale, plutocrats, Plutocrats, quantitative easing, rent control, rent-seeking, Ronald Reagan, Scramble for Africa, secular stagnation, shareholder value, sharing economy, Simon Kuznets, structural adjustment programs, the scientific method, The Spirit Level, transatlantic slave trade, trickle-down economics, universal basic income

One group of scientists summed up the evidence like this: ‘Overall, the existing research suggests that working time reduction potentially offers a triple dividend to society: reduced unemployment, increased quality of life, and reduced environmental pressures.’32 Transitioning to a shorter working week is key to building a humane, ecological economy. * There’s nothing new about this idea. In fact, it’s not even particularly radical. In 1930, the British economist John Maynard Keynes wrote an essay titled ‘Economic Possibilities for Our Grandchildren’. He predicted that by the year 2030 technological innovation and improvements in labour productivity would free people to work only fifteen hours a week. Keynes turned out to be correct about productivity gains, but his prophecy about working hours never came true. Why not? Because gains in labour productivity have been appropriated by capital. Instead of shortening the working week and raising wages, companies have pocketed the extra profits and required employees to keep working just as much as before.


pages: 295 words: 90,821

Fully Grown: Why a Stagnant Economy Is a Sign of Success by Dietrich Vollrath

"Robert Solow", active measures, additive manufacturing, American Legislative Exchange Council, barriers to entry, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, creative destruction, Deng Xiaoping, endogenous growth, falling living standards, hiring and firing, income inequality, intangible asset, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, light touch regulation, low skilled workers, manufacturing employment, old age dependency ratio, patent troll, Peter Thiel, profit maximization, rising living standards, Robert Gordon, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, The Rise and Fall of American Growth, total factor productivity, women in the workforce, working-age population

Rupert, 1:165–230. Bingley, UK: Emerald Group. Jorgenson, D. W., F. Gollop, and B. Fraumeni. 1987. Productivity and U.S. Economic Growth. Cambridge, MA: Harvard University Press. Jorgenson, D. W., M. S. Ho, and J. D. Samuels. 2013. Economic Growth in the Information Age. Technical report. Boston: NBER Conference on Research in Income and Wealth, Summer Institute. Keynes, J. M. 1931. “Economic Possibilities for Our Grandchildren.” Essays in Persuasion. London: McMillan. Kimball, M. S., J. G. Fernald, and S. Basu. 2006. “Are Technology Improvements Contractionary?” American Economic Review 96 (5): 1418–48. Klenow, P. J., and A. Rodriguez-Clare. 1997. “The Neo-Classical Revival in Growth Economics: Has It Gone Too Far?” In NBER Macroeconomics Annual, vol. 12, edited by B. Bernanke and J. Rotemberg. Boston: MIT Press.

Demographics just move too slowly to create any surprise in the growth rate. If you recall from the work on human capital, there was also a persistent drag on growth from the decline in hours worked per employee over time. The average workweek, which was around seventy hours during the 1800s, fell to less than forty hours per week in the twentieth century and has continued to drop during the twenty-first. John Maynard Keynes, back in 1930, famously speculated about the possibilities of a fifteen-hour workweek as our demand for material goods reached satiation. This decline would represent another success, coming about as a result of a choice to “buy” ourselves shorter workweeks in response to productivity growth. Nevertheless, fewer hours worked would push down the growth rate of real GDP per capita even further, even as our actual well-being or happiness rose.


Basic Income: A Radical Proposal for a Free Society and a Sane Economy by Philippe van Parijs, Yannick Vanderborght

"Robert Solow", Airbnb, Albert Einstein, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, centre right, collective bargaining, cryptocurrency, David Graeber, declining real wages, diversified portfolio, Edward Snowden, eurozone crisis, Fall of the Berlin Wall, feminist movement, full employment, future of work, George Akerlof, illegal immigration, income per capita, informal economy, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, Marshall McLuhan, means of production, minimum wage unemployment, open borders, Paul Samuelson, pension reform, precariat, price mechanism, profit motive, purchasing power parity, quantitative easing, race to the bottom, road to serfdom, Second Machine Age, secular stagnation, selection bias, sharing economy, sovereign wealth fund, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, universal basic income, urban planning, urban renewal, War on Poverty, working poor

“Do Entitlements Imply That Taxation Is Theft?” Philosophy and Public Affairs 7(1): 74–81. Kelly, Paul J. 1990. Utilitarianism and Distributive Justice: Jeremy Bentham and the Civil Law. Oxford: Clarendon Press. Kershaw, David, and Jerilyn Fair. 1976. The New Jersey Income-Â�Maintenance Experiment, vol. 1: Operations, Surveys, and Administration. New York: Academic Press. Keynes, John Maynard. 1930aâ•›/â•›1972. “Economic Possibilities for Our Grandchildren.” In Essays in Persuasion, The Collected Writings, vol. 9: 321–332. London: Macmillan, for the Royal Economic Society. —Â�—Â�—. 1930bâ•›/â•›1981. “The Question of High Wages.” In Rethinking Employment and Unemployment Policies, The Collected Writings, vol. 20, 2–16. London: Macmillan, for the Royal Economic Society. King, Desmond. 1995. Actively Seeking Work? The Politics of Unemployment and Welfare Policy in the United States and Â�Great Britain.

Growth has routinely been offered as the self-Â� evident remedy for unemployment. But, as mentioned above, strong doubts have emerged as to the possibility and desirability of sustained growth in rich countries and about its ability to provide a solution to unemployment. A basic income offers an alternative solution that does not rely on an insane rush to keep pace with productivity growth. The time Â�will come, John Maynard Keynes wrote, when growth Â�will no longer be the path to follow, when “our discovery of means of economizing the use of Â�labour” Â�will be “outrunning the pace at which we can find new uses for labour.” Â� And then “we Â�shall endeavour to spread the bread thin on the butter—to make what work there Â� 57 is still to be done to be as widely shared as posÂ�siÂ�ble.” A basic income is a smooth and smart way of moving in this direction.

“OrÂ�gaÂ�nized Â�labor feared any likely increase in cheap Â�labor stimulated by the removal of work disincentives,” as Desmond King writes.24 It is also evident in the reservations expressed by Michel Jalmain, a national secretary of the CFDT (the French DemoÂ�cratic Confederation of Â�Labor, one of France’s main labor unions), that a basic income would amount to subsidizing, at the community’s expense, firms that offer precarious and poorly-Â�paid jobs.25 And it is analogous to what John Maynard Keynes saw as the main reason for the British trade Â�unions’ opposition to universal child benefits: “I believe that the trade Â�union movement is actively hostile on the express ground that it fears such allowances would be what I wish them to be, namely, an alternative to higher wages. It would be much better that a man with heavy Â�family burdens to support should receive assistance out of taxation, which is thrown on profits generally, than that an attempt should be made to raise wages paid by his employer to a disproportionate level.”26 This fear is more serious.


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Origin Story: A Big History of Everything by David Christian

Albert Einstein, Arthur Eddington, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, Cepheid variable, colonial rule, Colonization of Mars, Columbian Exchange, complexity theory, cosmic microwave background, cosmological constant, creative destruction, cuban missile crisis, dark matter, demographic transition, double helix, Edward Lorenz: Chaos theory, Ernest Rutherford, European colonialism, Francisco Pizarro, Haber-Bosch Process, Harvard Computers: women astronomers, Isaac Newton, James Watt: steam engine, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kickstarter, Marshall McLuhan, microbiome, nuclear winter, planetary scale, rising living standards, Search for Extraterrestrial Intelligence, Stephen Hawking, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, trade route, Yogi Berra

He warned that the stationary state should be chosen deliberately and on good terms before it was forced on a reluctant humanity on much poorer terms. “I sincerely hope, for the sake of posterity, that they will be content to be stationary, long before necessity compels them to it.” Many others have recognized that economic growth is not the same as a good life. In 1930, in an essay entitled “Economic Possibilities for Our Grandchildren,” the British economist John Maynard Keynes argued that within a century, productivity would be high enough to guarantee the necessities of life to everyone. At that point, he hoped, people would stop working so hard and think more about how they lived. In March 1968, just before he was assassinated, Robert Kennedy described the limitations of an economy devoted to never-ending growth in gross national product: The Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage ….


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The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

"Robert Solow", 3D printing, autonomous vehicles, basic income, Bernie Sanders, Branko Milanovic, British Empire, business cycle, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, collective bargaining, computer age, computer vision, Corn Laws, creative destruction, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, desegregation, deskilling, Donald Trump, easy for humans, difficult for computers, Edward Glaeser, Elon Musk, Erik Brynjolfsson, everywhere but in the productivity statistics, factory automation, falling living standards, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, game design, Gini coefficient, Hyperloop, income inequality, income per capita, industrial cluster, industrial robot, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of movable type, invention of the steam engine, invention of the wheel, Isaac Newton, James Hargreaves, James Watt: steam engine, job automation, job satisfaction, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, labor-force participation, labour mobility, Loebner Prize, low skilled workers, Malcom McLean invented shipping containers, manufacturing employment, mass immigration, means of production, Menlo Park, minimum wage unemployment, natural language processing, new economy, New Urbanism, Norbert Wiener, oil shock, On the Economy of Machinery and Manufactures, Pareto efficiency, pattern recognition, pink-collar, Productivity paradox, profit maximization, Renaissance Technologies, rent-seeking, rising living standards, Robert Gordon, robot derives from the Czech word robota Czech, meaning slave, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, social intelligence, speech recognition, spinning jenny, Stephen Hawking, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade route, Triangle Shirtwaist Factory, Turing test, union organizing, universal basic income, washing machines reduced drudgery, wealth creators, women in the workforce, working poor, zero-sum game

Neither of these beliefs is new. And over the long run, both have so far been proven wrong, or at least vastly exaggerated. Though there have clearly been episodes when workers have suffered hardships as technology has advanced, fears over end-of-work scenarios have always been overblown, as has the idea that we would all give up work and live a life of fulfillment and leisure. In the 1930 “Economic Possibilities for Our Grandchildren,” John Maynard Keynes famously declared that mechanization was progressing at a rate greater than at any other time in history. Our discovery of ways to replace people with machines, he suggested, was outrunning the pace at which new uses for labor could be found—which he held would lead to widespread technological unemployment. Keynes’s essay was a reflection of the productivity boom of the 1920s, which did indeed come with some adjustment problems that sparked a revival of the machinery question (see chapter 7).

I am indebted to Joel Mokyr for pointing me to this reference. 89. Malthus, [1798] 2013, An Essay on the Principle of Population, 179. 90. R. Henderson, 2017, comment on “Artificial Intelligence and the Modern Productivity Paradox: A Clash of Expectations and Statistics, by E. Brynjolfsson, D. Rock and C. Syverson,” National Bureau of Economic Research, http://www.nber.org/chapters/c14020.pdf. 91. J. M. Keynes, [1930] 2010, “Economic Possibilities for Our Grandchildren,” in Essays in Persuasion (London: Palgrave Macmillan), 321–32. 92. V. A. Ramey and N. Francis, 2009, “A Century of Work and Leisure,” American Economic Journal: Macroeconomics 1 (2): 189–224. 93. W. A. Sundstrom, 2006, “Hours and Working Conditions,” in Historical Statistics of the United States, Earliest Times to the Present: Millennial Edition Online, ed. S. B. Carter et al.

Ramey and Francis also classify activities like talking to and playing with children as leisure, but they classify other child care tasks as home production. Given that people report much lower levels of enjoyment associated with such activities, this seems reasonable. See J. Robinson and G. Godbey, 2010, Time for Life: The Surprising Ways Americans Use Their Time (Philadelphia: Penn State University Press.) 97. Keynes, [1930] 2010, “Economic Possibilities for Our Grandchildren,” 322. 98. R. L. Heilbroner, 1966, “Where Do We Go from Here?,” New York Review of Books, March 17, https://www.nybooks.com/articles/1966/03/17/where-do-we-go-from-here/. 99. D. H. Autor, 2015, “Why Are There Still So Many Jobs? The History and Future of Workplace Automation,” Journal of Economic Perspectives 29 (3): 8. 100. Heilbroner, 1966, “Where Do We Go from Here?” 101.


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Overwhelmed: Work, Love, and Play When No One Has the Time by Brigid Schulte

8-hour work day, affirmative action, Bertrand Russell: In Praise of Idleness, blue-collar work, Burning Man, business cycle, call centre, cognitive dissonance, David Brooks, deliberate practice, desegregation, DevOps, East Village, Edward Glaeser, epigenetics, fear of failure, feminist movement, financial independence, game design, gender pay gap, glass ceiling, helicopter parent, hiring and firing, income inequality, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, meta analysis, meta-analysis, new economy, profit maximization, Results Only Work Environment, Richard Feynman, Ronald Reagan, Saturday Night Live, sensible shoes, sexual politics, Silicon Valley, Skype, Steve Jobs, Thorstein Veblen, women in the workforce, working poor, Zipcar, éminence grise

How could they reinvent their commute? “And now, the focus is on what you can do in forty-five minutes over lunch,” she said. “Keen Footwear even pioneered the idea of taking a ten- to fifteen-minute Instant Recess. They want people to go outside and do something they love. Or just move.”30 * * * Life in the early twenty-first century wasn’t supposed to be so busy. The economist John Maynard Keynes, in his 1930 essay “Economic Possibilities for Our Grandchildren,” predicted a fifteen-hour week by 2030, an end to the human struggle to survive, and time to enjoy “the hour and the day virtuously and well.” In the 1950s, some prominent thinkers predicted that the post–World War II boom in productivity and the ever-rising incomes and standards of living for Americans and the industrialized world could only mean that we were entering a new age of unprecedented leisure.

Hammer, Leslie Hanley, Caroline Hansen, Orval Happy Endings (TV show) Harding, Hillary Hartman, David Hartman, Heidi Harvard Business Review Harvard Business School Harvard University Haskins, Greg Hawkes, Kirsten Hays, Sharon: The Cultural Contradictions of Motherhood Hazda women Head Start Health and Human Services, Department of health care; costs; ER heart disease heart rate Heckman, James Heidegger, Martin helicopter parenting Henderson, Karla Heritage Foundation Herr, Jane Leber Hewlett, Sylvia Ann Heyck-Merlin, Maia Hicks, Kathleen Hochschild, Arlie: The Second Shift holidays Holt, Luther Emmett Hölzel, Britta homeschooling homework homosexuality hormones; stress hotels; labor Hot Mommas Project housework; breadwinner-homemaker stereotype; Danish; gay couples and; gender equity issues; men and; women and housing prices Hout, Michael Hrdy, Sarah Blaffer; Mother Nature; Mothers and Others Hsee, Christopher Huizinga, Johan Hunnicutt, Ben hunting-and-gathering societies hurricanes Hypertherm hypothalamus Iacocca, Lee IBM Iceland ideal mother ideal worker; breadwinner-homemaker stereotype; dumping the; evidence against; parental leave and; “separate spheres theory”; staying power of; stereotype; stress; wage gap immigrants immune system; effect of stress on Implicit Association Test India industrialization infertility inflammation information; overload Institute for Social Research, Hague integration intensive mothering; ambivalence and; Danish; fear and; guilt and; mommy wars International Association for Time Use Research; Paris conference Internet iPhone Ireland Issa, Darrell Italy Jacobs, Jerry: The Time Divide Japan Javitz, Jacob Jensen, Elisabeth Møller Johansson, Thomas: New Swedish Father Joly, Hubert Judaism Jump Associates Kaibel, Howard Kappaz, George Keefer, Catherine Kelly, Erin Kennedy, Eden: Let’s PANIC About Babies! Kennedy, Robert F. Keynes, John Maynard, “Economic Possibilities for Our Grandchildren” Kitch, Travis Klingberg, Torkel: The Overflowing Brain Kossek, Ellen Ernst; CEO of Me Kounios, John Koushede, Søren Koushede, Vibeke Kramer, Steven Philip Kuehl, Sheila !Kung women labor: see work Lafkin, Elly Lanham Act Last, Jonathan V.: What to Expect When No One’s Expecting latch-key children laundry lawyers; men as; telework; women as Learning Channel leisure; busyness and; class; Danish; do one thing; industry; lessons; men and; of 1950s; of 1960s; play; rise of; TV and; vacation; women and; see also specific types of leisure Leisure Trends Lerner, Sharon Lessing, Doris Levo League Listservs Little Eagles Day Care London Business School Lopez, P.


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A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

Affordable Care Act / Obamacare, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

The idea that ‘permits to pollute’ can be bought and sold may still sound alien to many non-economists. But the market for these permits is already a thriving one, with an estimated value of trade in 2007 at $64 billion. 17. They are named, ‘Marx the Prophet’, ‘Marx the Economist’, ‘Marx the Sociologist’ and ‘Marx the Teacher’. 18. Over time – in his grandchildren’s generation, as Keynes put in a famous article titled ‘Economic Possibilities for Our Grandchildren’ (though he himself had no children) – living standards in countries like Britain will have risen sufficiently that not much new investment would be needed. At such a point, he envisaged, the focus of policy should be switched to reducing working hours and increasing consumption, mainly by redistributing income to poorer groups, which spend larger proportions of their incomes than the richer ones. 19.

.* Having said that, the (neo-)Schumpeterian school may be criticized for focusing overly on technology and innovation and relatively neglecting other economic issues, such as labour, finance and macroeconomics. To be fair, other schools too focus on particular issues, but the Schumpeterian school exhibits a narrower focus than most. The Keynesian School One-sentence summary: What is good for individuals may not be good for the whole economy. Born in the same year as Schumpeter and sharing the honour of having a whole school named after him is John Maynard Keynes (1883–1946). In terms of intellectual influence, there is no comparison between the two. Keynes was arguably the most important economist of the twentieth century. He redefined the subject by inventing the field of macroeconomics – the branch of economics that analyses the whole economy as an entity that is different from the sum total of its parts. Before Keynes, most people agreed with Adam Smith when he said, ‘What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.’


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Empire of Things: How We Became a World of Consumers, From the Fifteenth Century to the Twenty-First by Frank Trentmann

Airbnb, Anton Chekhov, Ayatollah Khomeini, Berlin Wall, Big bang: deregulation of the City of London, British Empire, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, Cass Sunstein, choice architecture, clean water, collaborative consumption, collective bargaining, colonial exploitation, colonial rule, Community Supported Agriculture, cross-subsidies, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, equity premium, Fall of the Berlin Wall, Fellow of the Royal Society, financial exclusion, fixed income, food miles, full employment, germ theory of disease, global village, haute cuisine, high net worth, income inequality, index card, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, James Watt: steam engine, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kitchen Debate, knowledge economy, labour mobility, libertarian paternalism, Livingstone, I presume, longitudinal study, mass immigration, McMansion, mega-rich, moral panic, mortgage debt, Murano, Venice glass, Naomi Klein, New Urbanism, post-industrial society, post-materialism, postnationalism / post nation state, profit motive, purchasing power parity, Ralph Nader, rent control, Richard Thaler, Right to Buy, Ronald Reagan, school vouchers, Scientific racism, Scramble for Africa, sharing economy, Silicon Valley, Skype, stakhanovite, the built environment, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, trade liberalization, trade route, transatlantic slave trade, union organizing, upwardly mobile, urban planning, urban sprawl, Washington Consensus, women in the workforce, working poor, young professional, zero-sum game

To some degree, this process can be summarized as the triumph of John Maynard Keynes, who justified public spending and condemned an older glorification of thrift. Keynes’s General Theory of 1936 followed a string of more popular pieces that asked contemporaries to turn their morals upside down. In times of recession, he wrote in 1931, saving was evil: ‘Whenever you save five shillings, you put a man out of work for a day.’ He urged ‘patriotic housewives’ instead to ‘go to the wonderful sales’ and indulge themselves.32 Governments, too, needed to spend, not cut. Yet Keynes himself was not an unqualified hedonist. Unlike his teacher Marshall, he did not believe that needs were insatiable. In ‘The Economic Possibilities for our Grandchildren’, published in 1930, he envisaged a future where absolute needs would be fulfilled and everyone devoted their energies to non-material purposes.

See also: Mark Aguiar & Erik Hurst, ‘Measuring Trends in Leisure: The Allocation of Time over Five Decades’, Working Paper no. 06-2: Federal Reserve Bank of Boston, 2006; although their numbers for leisure are inflated by treating childcare as leisure (rather than as unpaid work). 23. For this and other reasons why Keynes was wrong, see Lorenzo Pecchi & Gustavo Piga, eds., Revisiting Keynes: Economic Possibilities for Our Grandchildren (Cambridge, MA, 2008). 24. ‘An Apology for Idlers’, in: Cornhill Magazine, 36 (July 1877), repr. in The Novels and Tales of Robert Louis Stevenson (1895 edn), 73; emphasis in original. 25. This applies to Thorstein Veblen as well, whose theory of the idle rich ignored the hard-working Rockefellers and more thrifty members of the elite. For a more balanced picture, see Frederic Cople Jaher, ‘The Gilded Elite, American Multimillionaires, 1865 to the Present’, in: Wealth and the Wealthy in the Modern World, ed.

In 2005, they had almost the same amount of free time as in 1900. But look a bit closer and an interesting backsliding becomes visible. The middle-aged, too, had their leisure revolution. It simply went into reverse in the 1980s. For them, 1980 was the apex of leisure – five hours extra compared to 1910. This was quite in line with their younger cohorts. What set them apart was that these additional hours were all lost again between 1980 and 2005. John Maynard Keynes in 1930 gazed into a crystal ball and saw a future where, thanks to greater productivity, people would enjoy an extra twenty hours of leisure a week by 2030. Clearly, we are a long way from this utopia. At the same time, it is plainly wrong to think there was no leisure revolution at all or to suggest that workers in the 1930s gave up free time in exchange for goods and higher wages.17 Into the 1970s, Americans across all age groups enjoyed more leisure and did less paid work.


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