John Maynard Keynes: technological unemployment

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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

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.

Evidently, its persuasive power declines in conditions of abundance, when cheapness is no longer the main consideration. Notes INTRODUCTION 1. John Maynard Keynes, Essays in Persuasion, The Collected Writings of John Maynard Keynes, vol. 9 (Cambridge: Cambridge University Press, 1978), p. 293. 2. George Orwell, The Road to Wigan Pier (London: Penguin, 1989), p. 182. 3. W. Stanley Jevons, The Theory of Political Economy (London: Macmillan, 1911), p. 37. 4. Bertrand Russell, In Praise of Idleness and Other Essays (London: Routledge, 2004), p. 11. 5. Charles Baudelaire, Journaux intimes (Paris: Mercure de France, 1938), p. 61. 6. John Maynard Keynes, The General Theory of Employment, Interest, and Money, The Collected Writings of John Maynard Keynes, vol. 7 (Cambridge: Cambridge University Press, 1973), p. 374. 7. IMSciences.net, accessed 09/09/11. 8.

.: Digireads.com, 2009; first publ. 1759), p. 40; Alfred Marshall, Principles of Economics (London: Prometheus Books, 1920), p. 1; Lionel Robbins, An Essay on the Nature and Significance of Economic Science (London: Macmillan, 1932), p. 16. 10. Keynes, Essays in Persuasion, p. 332. CHAPTER 1. KEYNES’S MISTAKE 1. 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.


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

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.

The Grabbing Hand: Government Pathologies and Their Cures. Cambridge, MA: Harvard University Press. Siegel, Jeremy J. 2005. The Future for Investors. New York: Crown/Business. Simon, Julian L., ed. 1995. The State of Humanity. Cambridge, UK: Blackwell. . 1996. The Ultimate Resource 2. Princeton, NJ: Princeton University Press. Skidelsky, Robert. 1992. John Maynard Keynes: The Economist as Saviour, 1920-1937. London: Macmillan. . 2003. John Maynard Keynes: Economist, Philosopher, Statesman. New York: Penguin Books. Skousen, Mark. 1990. The Structure of Production. New York: New York University Press. , ed. 1992. Dissent on Keynes: A Critical Appraisal of Keynesian Economics. New York: Praeger. . 2001. The Making of Modern Economics. Armonk, NY: M.E. Sharpe. . 2005. Vienna and Chicago, Friends or Foes?


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

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. Skidelsky, N. Craig (eds.), Work in the Future, https://doi.org/10.1007/978-3-030-21134-9_2 9 10 R. Skidelsky We are being afflicted with a new disease … 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.

Over the course of the last five decades, he has written about social life in cities, changes in labour and social theory. Among other awards, he has received the Hegel Prize, the Spinoza Prize, an honorary doctorate from the University of Cambridge and the Centennial Medal from Harvard University. He teaches sociology at New York University and at the London School of Economics. Robert Skidelsky is Emeritus Professor of Political Economy at Warwick University. His three-volume biography of John Maynard Keynes (1983, 1992, 2000) won five prizes and his book on the financial crisis—Keynes: The Return of the Master—was published in September 2010. He was made a member of the House of Lords in 1991 (he sits on the cross-­ benches) and elected a fellow of the British Academy in 1994. He is also the co-author of How Much is Enough? The Love of Money and the Case for the Good Life (2012), written with his son Edward, author of Britain in the 20th Century: A Success?

We are living through such a period now with the spread of automation. The headlines tell us that robots are gobbling up human jobs at an unprecedented rate—that up to 30 per cent of today’s work will be automated within 20 or so years. And the jobs themselves are becoming ever more precarious. So the old question is being posed ever more urgently: are machines a threat or a promise? Quoted from Robert Skidelsky ed. John Maynard Keynes: The Essential Keynes, 80. Italics in original. 2 2 The Future of Work 11 Work in History The western concept of work starts with the ‘disdain for work’ of the ancient world. Working for a living was despised. The good life was one devoted to politics in the Greek conception and to self-cultivation in the Roman. This ideal depended on slaves doing what we call work. Slaves, said Aristotle, were tools, and were tools by nature.


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?

This also seems to be precisely where neoliberalism – and Friedman himself – went wrong. 22. Stephanie Mudge, “The Social Bases of Austerity. European Tunnel Vision & the Curious Case of the Missing Left,” SPERI Paper No.9 (February 2014). http://speri.dept.shef.ac.uk/wp-content/up-loads/2013/01/SPERI-Paper-No.9-The-Social-Bases-of-Austerity-PDF-579KB.pdf 23. John Maynard Keynes, The General Theory of Employment, Interest and Money (1936), last paragraph. 24. Quoted in: Burgin, The Great Persuasion, p. 217. 25. John Maynard Keynes, General Theory, last paragraph. Acknowledgments No book is ever written alone, but never before have I had such a wealth of support. My thanks firstly to the members of The Correspondent, who provided input and tips on articles and books, as well as pointing out various errors. Also to my coworkers who read all or parts of the manuscript – Jesse Frederik, Andreas Jonkers, Erica Moore, Travis Mushett, and Rob Wijnberg – I owe a huge debt of gratitude.

In that sense, I’m heartened by our dissatisfaction, because dissatisfaction is a world away from indifference. The widespread nostalgia, the yearning for a past that never really was, suggests that we still have ideals, even if we have buried them alive. True progress begins with something no knowledge economy can produce: wisdom about what it means to live well. We have to do what great thinkers like John Stuart Mill, Bertrand Russell, and John Maynard Keynes were already advocating 100 years ago: to “value ends above means and prefer the good to the useful.”31 We have to direct our minds to the future. To stop consuming our own discontent through polls and the relentlessly bad-news media. To consider alternatives and form new collectives. To transcend this confining zeitgeist and recognize our shared idealism. Maybe then we’ll also be able to again look beyond ourselves and out at the world.


The State and the Stork: The Population Debate and Policy Making in US History by Derek S. Hoff

"Robert Solow", affirmative action, Alfred Russel Wallace, back-to-the-land, British Empire, business cycle, clean water, creative destruction, David Ricardo: comparative advantage, demographic transition, desegregation, Edward Glaeser, feminist movement, full employment, garden city movement, George Gilder, Gunnar Myrdal, immigration reform, income inequality, income per capita, invisible hand, Jane Jacobs, John Maynard Keynes: technological unemployment, Joseph Schumpeter, labor-force participation, manufacturing employment, mass immigration, New Economic Geography, new economy, old age dependency ratio, Paul Samuelson, peak oil, pensions crisis, profit motive, Ralph Waldo Emerson, road to serfdom, Ronald Reagan, Scientific racism, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, trickle-down economics, urban planning, urban sprawl, wage slave, War on Poverty, white flight, zero-sum game

The oscillating Malthusian model of stagnation—higher incomes produce a population surge, but the excess of people drives incomes down, stunting population until incomes rise and the process starts all over—says little about most economies since 1800.11 When examining the American experience, enthusiasts of population growth point to the coincidence of a sluggish birthrate with a sluggish economy in the 1930s and 1970s, and the coincidence of the Baby Boom with a healthy economy in the 1950s. John Maynard Keynes, one of the most important economists of all time and a major focus of this book, articulated perhaps the strongest argument that population growth aids the economy, and his stance was psychological: businesspeople tend to think that a bumper crop of babies is beneficial in the long run, and therefore introduction 5 they may invest accordingly. Yet history provides many counterexamples, in which sluggish population growth combined with vigorous economic expansion.

By the 1920s, however, newly professionalized American demographers, economists, and natural-resource experts had reached a consensus that America’s “optimum population” was lower than its current one. This consensus did not disappear, as the prevailing wisdom suggests, only reemerging briefly in the late 1960s in the form of the Malthusian “zero population growth” movement. Rather, unease about population growth incorporated the innovative liberal economic ideas that prevailed at midcentury, particularly British economist John Maynard Keynes’s stress on government-sponsored mass consumption. During the Great Depression of the 1930s, the birthrate declined meaningfully, and demographers projected an eventual drop in the total population. Historians 12 introduction widely but incorrectly assume that the falling birthrate, given its concurrence with the Great Depression, led to a universal advocacy of population growth as an economic virtue.

Swede Knut Wicksell 68 chapter 2 (whom we last saw in jail) may have been the first to use the term “optimum population.”145 In the 1920s, several well-known British economists centered in London pursued optimum theory, including Edwin Cannan and Lionel Robbins; the latter would emerge as a leading figure in modern, post–World War II economic growth theory.146 A more traditional Malthusianism emanated from economists associated with Cambridge University, led by Harold Wright and John Maynard Keynes. As we will see, Keynes would break away from Malthusianism in the 1930s.147 The leading American theorist of the optimum population was Ohio State’s A. B. Wolfe.148 In scholarly collections such as Louis Dublin’s Population Problems (1926) as well as in more popular forums, Wolfe demanded that public policy seek the optimum population, rather than merely prevent “absolute overpopulation,” through measures “which will secure such adjustment between population and natural resources as will enable us to live as well as possible.”149 Operating from the Malthusian scarcity perspective, Wolfe rejected the assumptions of those he deemed “anti-Malthusian optimists” that migration and invention held the dual keys to avoiding the Malthusian squeeze.150 On the question of migration, Wolfe joined the end-of-frontier chorus and suggested, “Only inferior lands, limited in extent, remain for settlement.”151 Much more original, during a decade of unbridled optimism about the benefits of technology, was Wolfe’s insistence on the limits of technical innovation.


pages: 419 words: 109,241

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

Almost everywhere, machines are becoming increasingly capable, creeping ever further into the realm of tasks once performed only by human beings. To adapt the old saying, nothing in life can be said to be certain, except death, taxes—and this relentless process of task encroachment. 6 Frictional Technological Unemployment When John Maynard Keynes popularized the term “technological unemployment” about ninety years ago, he prophesied that we would “hear a great deal in the years to come” about it.1 Despite his clarity about the threat, however, and his prescience about the anxiety that would accompany it, he did not really explain how technological unemployment would happen. He described it as arising “due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour,” but offered very few specifics. Instead, he merely gestured to the “revolutionary technical changes” taking place to persuade his readers to agree with his argument.

In the UK, the same proportion think it could happen in the next twenty years.14 And in this book, I want to explain why we have to take these sorts of fears seriously—not always their substance, as we shall see, but certainly their spirit. Will there be enough work for everyone to do in the twenty-first century? This is one of the great questions of our time. In the pages that follow, I will argue that the answer is “no” and explain why the threat of “technological unemployment” is now real. I will describe the different problems this will create for us—both now and in the future—and, most important, set out how we might respond. It was John Maynard Keynes, the great British economist, who popularized the term “technological unemployment” almost fifty years before Leontief wrote down his worries, capturing in a pithy pairing of words the idea that new technologies might push people out of work. In what follows, I will draw on many of the economic arguments that have been developed since Keynes to try to gain a better look back at what happened in the past, and a clearer glimpse of what lies ahead.

From Gregory Clark, A Farewell to Alms (Princeton, NJ: Princeton University Press, 2007), p. 1. 19.  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.


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.

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.

The contagion of these theories did not generally take the form of someone sitting down with a pencil and paper and saying, “Let me explain the IS-LM model to you.” In most cases, the communication was probably much more elementary and human. Economic historian Warren Young suspects that the contagion of the IS-LM diagram had something to do with its resemblance to the intersection of supply and demand that is perhaps the most famous image in all of economics.10 In addition, the IS-LM model was a formalization of John Maynard Keynes’s theory. Keynes was a brilliant writer, but as we have seen, many narratives are associated with celebrities. Keynes himself was a colorful figure and a celebrity in his own right: he hobnobbed with the Bloomsbury group of artists and intellectuals, among other celebrities (including the writer Virginia Woolf, who was embarking on her own epidemic of fame, which did not peak at least until near the end of the twentieth century, long after her death in 1941).


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"Robert Solow", 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, plutocrats, Plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, 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 payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

A joint investigation by broadcaster NBC and the Center for Investigative Reporting found that firms abuse the program by bringing in technology graduates when there is no firm job and keeping them like slaves, hostaged until they find work. When working, they cannot change jobs, as employers can levy a punitive fee. China frequently uses workers from home on foreign projects, to take advantage of lower costs and avoid the employment conditions of the host country. Conflicts, sometimes violent, with the local workforce are common. Workers, irrespective of profession and skill, now face what John Maynard Keynes termed technological unemployment. The process was championed as reducing low-skilled monotonous jobs and increasing employment mobility, as well as providing greater employment and lifestyle choices. Economists lauded the new knowledge/bioengineered/clean and green (delete as required) economy. The displaced workers would become highly educated and skilled, finding new, intellectually challenging and highly paid jobs.

Ralph Mannheim, Der Fuehrer: Hitler's Rise to Power, Houghton Mifflin, 1944, excerpted in Fritz Ringer, The German Inflation of 1923, Oxford University Press, 1969, p. 170. 2 See Michael Mackenzie, Dan McCrum, and Stephen Foley, “Bond Markets: A False Sense of Security,” Financial Times, 18 November 2012. 3 See Ralph Atkins and Martin Sandbu, “FT Interview Transcript: Jens Weidmann,” Financial Times, 13 November 2011. 4 See Ben McLannahan, “Japan Bonds Swing Wildly after BoJ Move,” Financial Times, 5 April 2013. 5 John Maynard Keynes, quoted in Robert Sidelsky, John Maynard Keynes: The Economist as Saviour 1920-1937, Macmillan, 1992, p. 62. 6 Greg Smith, “Why I Am Leaving Goldman Sachs,” New York Times, 14 March 2012. 7 Upton Sinclair, I, Candidate for Governor: And How I Got Licked, University of California Press (1935) 1994, p. 109. 8 “Wall Street and the Financial Crisis: The Role of Investment Banks,” Senate Hearing 111-674, vol. 4, 27 April 2010. www.gpo.gov/fdsys/pkg/CHRG-111shrg57322/html/CHRG-111shrg57322.htm. 9 Matt Taibbi, “The Great American Bubble Machine,” Rolling Stone, 5 April 2010. 10 Liam Vaughan and Jesse Westbrook, “Barclays Big-Boy Breaches Mean Libor Fixes Not Enough,” Bloomberg, 29 June 2012. www.bloomberg.com/news/articles/2012-06-29/barclays-big-boy-breaches-mean-libor-fixes-not-enough. 11 Martin Arnold, “HSBC Shares Drop after Full-Year Profits Fall,” Financial Times, 23 February 2015. 12 Ferdinand Pecora, Wall Street under Oath, Simon & Schuster, 1939, p. 130. http://books.google.com.au/books?

Rajan, Fault Lines: How Hidden Fractures Still Threaten the World Economy, Princeton University Press, 2010. David Roche and Bob McKee, New Monetarism: New Edition, An Independent Strategy Publication, 2008. ——, Democrisis: Democracy Caused the Debt Crisis. Will It Survive It? An Independent Strategy Publication, 2012. Robert Skidelsky, John Maynard Keynes 1883–1946: Economist, Philosopher, Statesman, Penguin, 2003. Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order, Princeton University Press, 2013. David Wessel, In Fed We Trust: Ben Bernanke's War on the Great Panic, Scribe Publications, 2010. Martin Wolf, The Shifts and the Shocks: What We've Learned—and Have Still to Learn—from the Financial Crisis, Penguin, 2014. Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle for the World Economy, Touchstone Books, 2002.


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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. 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.”15 The extended joblessness of the Great Depression seemed to confirm Keynes’s ideas, but it eventually eased.

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.

Inequality,” Huffington Post, March 11, 2012, http://www.huffingtonpost.com/daron-acemoglu/us-inequality_b_1338118.html (accessed August 13, 2013). 13. John Bates Clark, Essentials of Economic Theory as Applied to Modern Problem of Industry and Public Policy, (London: Macmillan, 1907), p. 45. 14. W. M. Leiserson, The Problem of Unemployment Today 31, Political Science Quarterly (1916), http://archive.org/details/jstor-2141701, p. 12. 15. John Maynard Keynes, Essays in Persuasion (New York: W. W. Norton & Company, 1963), p. 358. 16. Linus Pauling, The Triple Revolution (Santa Barbara, CA: Ad Hoc Committee on the Triple Revolution, 1964), http://osulibrary.oregonstate.edu/specialcollections/coll/pauling/peace/papers/1964p.7-02.html. 17. Wassily Leontief, “National Perspective: The Definition of Problems and Opportunities,” The Long-Term Impact of Technology on Employment and Unemployment (National Academy of Engeneering, 1983): 3–7. 18.


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.


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Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy by Erik Brynjolfsson

"Robert Solow", Amazon Mechanical Turk, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, business cycle, business process, call centre, combinatorial explosion, corporate governance, creative destruction, crowdsourcing, David Ricardo: comparative advantage, easy for humans, difficult for computers, Erik Brynjolfsson, factory automation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, hiring and firing, income inequality, intangible asset, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, Kickstarter, knowledge worker, Loebner Prize, low skilled workers, minimum wage unemployment, patent troll, pattern recognition, Paul Samuelson, Ray Kurzweil, rising living standards, Robert Gordon, self-driving car, shareholder value, Skype, too big to fail, Turing test, Tyler Cowen: Great Stagnation, Watson beat the top human players on Jeopardy!, wealth creators, winner-take-all economy, zero-sum game

contestants are shown answers and must ask questions that would yield these answers. Chapter 3. Creative Destruction: The Economics of Accelerating Technology and Disappearing Jobs 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. —John Maynard Keynes, 1930 The individual technologies and the broader technological acceleration discussed in Chapter 2 are creating enormous value. There is no question that they increase productivity, and thus our collective wealth. But at the same time, the computer, like all general purpose technologies, requires parallel innovation in business models, organizational processes structures, institutions, and skills.

“In the years ahead,” Rifkin wrote, “more sophisticated software technologies are going to bring civilization ever closer to a near-workerless world. … Today, all … sectors of the economy … are experiencing technological displacement, forcing millions onto the unemployment roles.” Coping with this displacement, he wrote, was “likely to be the single most pressing social issue of the coming century.” The end-of-work argument has been made by, among many others, economist John Maynard Keynes, management theorist Peter Drucker, and Nobel Prize winner Wassily Leontief, who stated in 1983 that “the role of humans as the most important factor of production is bound to diminish in the same way that the role of horses in agricultural production was first diminished and then eliminated by the introduction of tractors.” In his 2009 book The Lights in the Tunnel, software executive Martin Ford agreed, stating that “at some point in the future—it might be many years or decades from now—machines will be able to do the jobs of a large percentage of the ‘average’ people in our population, and these people will not be able to find new jobs.”

If wages can freely adjust, then the losers keep their jobs in exchange for accepting ever-lower compensation as technology continues to improve. But there’s a limit to this adjustment. Shortly after the Luddites began smashing the machinery that they thought threatened their jobs, the economist David Ricardo, who initially thought that advances in technology would benefit all, developed an abstract model that showed the possibility of technological unemployment. The basic idea was that at some point, the equilibrium wages for workers might fall below the level needed for subsistence. A rational human would see no point in taking a job at a wage that low, so the worker would go unemployed and the work would be done by a machine instead. Of course, this was only an abstract model. But in his book A Farewell to Alms, A Farewell to Alms, economist Gregory Clark gives an eerie real-world example of this phenomenon in action: There was a type of employee at the beginning of the Industrial Revolution whose job and livelihood largely vanished in the early twentieth century.


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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

The idea that machines are about to eliminate the need for human work has been around for a long time, and it has been proven wrong again and again—enough times to earn the nickname the “Luddite fallacy” or “lump-of-labor fallacy.” In the early nineteenth century, Nottingham textile workers destroyed their looms to demand better work and better wages. (No need.) During the Great Depression, John Maynard Keynes surmised that technological advances would put an end to long hours spent in the office, in the field, or at the plant by 2030. (Alas, no.) In 1964, a group of public-intellectual activists, among them three Nobel laureates, warned the White House that “the combination of the computer and the automated self-regulating machine” would foster “a separate nation of the poor, the unskilled, the jobless.”

For all intents and purposes, the [world] is a paradise.” 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.


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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

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. In this and the following section we explain why there is uncertainty here, and we provide a new framework for thinking in a systematic way about technological unemployment in the professions.

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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Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

"Robert Solow", 3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, debt deflation, deskilling, disruptive innovation, diversified portfolio, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Fractional reserve banking, Freestyle chess, full employment, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, knowledge worker, labor-force participation, liquidity trap, low skilled workers, low-wage service sector, Lyft, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, plutocrats, Plutocrats, post scarcity, precision agriculture, price mechanism, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Rodney Brooks, Sam Peltzman, secular stagnation, self-driving car, Silicon Valley, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, Thomas L Friedman, too big to fail, Tyler Cowen: Great Stagnation, uber lyft, union organizing, Vernor Vinge, very high income, Watson beat the top human players on Jeopardy!, women in the workforce

Productivity Growth Versus Compensation Growth SOURCE: US Bureau of Labor Statistics.14 A Bear Market for Labor’s Share, and a Raging Bull for Corporations Early in the twentieth century, the British economist and statistician Arthur Bowley delved into decades of national income data for the United Kingdom and showed that the fraction of national income going to labor and capital respectively remained relatively constant, at least over long periods. This apparently fixed relationship ultimately became an accepted economic principle known as “Bowley’s Law.” John Maynard Keynes, perhaps the most famous economist of all time, would later say that Bowley’s Law was “one of the most surprising, yet best established facts in the whole range of economic statistics.”17 As Figure 2.3 shows, during the postwar period, the share of US national income going to labor moved in a fairly tight range, just as Bowley’s Law would have predicted. From the mid-1970s on, however, Bowley’s Law began to fall apart as labor’s share went first into a gradual decline and then into a seeming free fall just after the turn of the century.

More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy.”15 I think there are good reasons to be concerned about a similar failure of the economists’ mathematical models as the exponential advance of information technology increasingly disrupts the economy. Adding to the problem is that many of these models employ simplistic—and in some cases seemingly absurd—assumptions about the way consumers, workers, and businesses behave and interact. John Maynard Keynes may have said it best, writing nearly eighty years ago in The General Theory of Employment, Interest and Money, the book that arguably founded economics as a modern field of study: “Too large a proportion of recent ‘mathematical’ economics are merely concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.”16 Complexity, Feedback Effects, Consumer Behavior, and “Where Is That Soaring Productivity?”

Taylor and Akila Weerapana, Principles of Economics (Mason, OH: Cengage Learning, 2012), p. 344. In particular, see the bar chart and commentary in the left margin. Taylor is a very highly regarded economist, known especially for the “Taylor Rule,” a monetary policy guideline used by central banks (including the Federal Reserve) to set interest rates. 16. Robert H. Frank and Ben S. Bernanke, Principles of Economics, 3rd ed. (New York: McGraw Hill/Irwin, 2007), pp. 596–597. 17. John Maynard Keynes, as quoted in David Hackett Fischer, The Great Wave: Price Revolutions and the Rhythm of History (New York: Oxford University Press, 1996), p. 294. 18. Labor Share Graph, Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Nonfarm Business Sector: Labor Share, Index 2009=100, Seasonally Adjusted [PRS85006173]; US Department of Labor: Bureau of Labor Statistics; https://research.stlouisfed.org/fred2/series/PRS85006173; accessed April 29, 2014.


pages: 491 words: 77,650

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

* * * * * * 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. 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.2 Similar fears have been voiced throughout the past century.

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?

Today’s economists point to a number of factors, income or capitalization effects central amongst them. Technology makes us more productive, reducing prices and raising real income. As we become better off, our appetite for more products and services creates new job opportunities in emerging industries: think of the miner retrained as a computer engineer. Over the past few years, the spectre of technological unemployment has nonetheless returned to haunt us: whether it’s the rise of artificial intelli- gence or the advent of self-driving cars, the robots are said to be coming for Humans as a Service: The Promise and Perils of Work in the Gig Economy. First Edition. Jeremias Prassl. © Jeremias Prassl 2018. Published 2018 by Oxford University Press. * * * 136 Epilogue our jobs once more. What does this mean for the gig economy?


pages: 850 words: 254,117

Basic Economics by Thomas Sowell

affirmative action, air freight, airline deregulation, American Legislative Exchange Council, bank run, barriers to entry, big-box store, British Empire, business cycle, clean water, collective bargaining, colonial rule, corporate governance, correlation does not imply causation, cross-subsidies, David Brooks, David Ricardo: comparative advantage, declining real wages, Dissolution of the Soviet Union, diversified portfolio, European colonialism, fixed income, Fractional reserve banking, full employment, global village, Gunnar Myrdal, Hernando de Soto, hiring and firing, housing crisis, income inequality, income per capita, index fund, informal economy, inventory management, invisible hand, John Maynard Keynes: technological unemployment, joint-stock company, Just-in-time delivery, Kenneth Arrow, knowledge economy, labor-force participation, land reform, late fees, low cost airline, low cost carrier, low skilled workers, means of production, Mikhail Gorbachev, minimum wage unemployment, moral hazard, offshore financial centre, oil shale / tar sands, payday loans, price discrimination, price stability, profit motive, quantitative easing, Ralph Nader, rent control, road to serfdom, Ronald Reagan, Silicon Valley, surplus humans, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, transcontinental railway, Vanguard fund, War on Poverty

When Professor Milton Friedman of the University of Chicago won a Nobel Prize in economics in 1976, it marked a growing recognition of non-Keynesian and anti-Keynesian economists, such as those of the Chicago School. By the last decade of the twentieth century, a disproportionate share of the Nobel Prizes in economics were going to economists of the Chicago School, whether located on the University of Chicago campus or at other institutions. The Keynesian contribution did not vanish, however, for many of the concepts and insights of John Maynard Keynes had now become part of the stock in trade of economists in all schools of thought. When John Maynard Keynes’ picture appeared on the cover of the December 31, 1965 issue of Time magazine, it was the first time that someone no longer living was honored in this way. There was also an accompanying story inside the magazine: Time quoted Milton Friedman, our leading non-Keynesian economist, as saying, “We are all Keynesians now.” What Friedman had actually said was: “We are all Keynesians now and nobody is any longer a Keynesian,” meaning that while everyone had absorbed some substantial part of what Keynes taught no one any longer believed it all.{1013} While it is tempting to think of the history of economics as the history of a succession of great thinkers who advanced the quantity and quality of analysis in this field, seldom did these pioneers create perfected analyses.

Even those economists who are Marxists typically use other economic concepts in their professional work. {xlii} Marshall’s Principles of Economics was still being used as a textbook in economics when I was a graduate student at Columbia University in academic year 1958–59. {xliii} As discussed in Chapter 13 of Basic Economics. {xliv} John Maynard Keynes wrote in 1930: “The world has been slow to realise that we are living this year in the shadow of one of the greatest economic catastrophes of modern history.” John Maynard Keynes, Essays in Persuasion, 1952 edition, p. 135. {xlv} This theme is explored in my book A Conflict of Visions. {xlvi} As we have seen in Chapter 17, during the Great Depression of the 1930s successive American administrations of both political parties sought to maintain high wage rates per unit of time as a way of maintaining labor’s “purchasing power”—which depends on the aggregate earnings of workers.

Despite all the problems with comparisons of national output between very different countries or between time periods far removed from one another, Gross Domestic Product statistics provide a reasonable, though rough, basis for comparing similar countries at the same time—especially when population size differences are taken into account by comparing Gross Domestic Product per capita. Thus, when the data show that the Gross Domestic Product per capita in Norway in 2009 was more than double what it was in Italy that same year,{550} we can reasonably conclude that the Norwegians had a significantly higher standard of living. But we need not pretend to precision. As John Maynard Keynes said, “It is better to be roughly right than precisely wrong.”{551} Ideally, we would like to be able to measure people’s personal sense of well-being but that is impossible. The old saying that money cannot buy happiness is no doubt true. However, opinion polls around the world indicate some rough correlation between national prosperity and personal satisfaction.{552} Nevertheless, correlation is not causation, as statisticians often warn, and it is possible that some of the same factors which promote happiness—security and freedom, for example—also promote economic prosperity.


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

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.

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?”

But the key here is the timing and extent to which the capitalization effect supersedes the destruction effect, and how quickly the substitution will take. There are roughly two opposing camps when it comes to the impact of emerging technologies on the labour market: those who believe in a happy ending – in which workers displaced by technology will find new jobs, and where technology will unleash a new era of prosperity; and those who believe it will lead to a progressive social and political Armageddon by creating technological unemployment on a massive scale. History shows that the outcome is likely to be somewhere in the middle. The question is: What should we do to foster more positive outcomes and help those caught in the transition? It has always been the case that technological innovation destroys some jobs, which it replaces in turn with new ones in a different activity and possibly in another place. Take agriculture as an example.


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

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.

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.

While there is little double that the overly restrictive policies of the Fed prolonged the Depression and perhaps turned a run of the mill recession into a disaster, it should not be forgotten that there was a widespread belief at the time that the technological unemployment (and the resulting plunge in consumer demand) that Keynes spoke of played an important role. Even Albert Einstein expressed this opinion when asked for his take on the causes of the Depression during a visit to the United States in 1933. ] Keynes recognized that, in 1930, technological unemployment would be a temporary phenomenon and that the economy would eventually absorb the excess workers. The main thrust of his essay was to attempt to look much further into the future. Keynes argued that over the next hundred years (in other words, by the year 2030), the economies of developed nations would grow dramatically.


pages: 280 words: 74,559

Fully Automated Luxury Communism by Aaron Bastani

"Robert Solow", autonomous vehicles, banking crisis, basic income, Berlin Wall, Bernie Sanders, Bretton Woods, capital controls, cashless society, central bank independence, collapse of Lehman Brothers, computer age, computer vision, David Ricardo: comparative advantage, decarbonisation, dematerialisation, Donald Trump, double helix, Elon Musk, energy transition, Erik Brynjolfsson, financial independence, Francis Fukuyama: the end of history, future of work, G4S, housing crisis, income inequality, industrial robot, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, James Watt: steam engine, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Kuiper Belt, land reform, liberal capitalism, low earth orbit, low skilled workers, M-Pesa, market fundamentalism, means of production, mobile money, more computing power than Apollo, new economy, off grid, pattern recognition, Peter H. Diamandis: Planetary Resources, post scarcity, post-work, price mechanism, price stability, private space industry, Productivity paradox, profit motive, race to the bottom, RFID, rising living standards, Second Machine Age, self-driving car, sensor fusion, shareholder value, Silicon Valley, Simon Kuznets, Slavoj Žižek, stem cell, Stewart Brand, technoutopianism, the built environment, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, transatlantic slave trade, Travis Kalanick, universal basic income, V2 rocket, Watson beat the top human players on Jeopardy!, Whole Earth Catalog, working-age population

Future Shock 1858 However people respond to the word ‘communism’, the word is associated with one person in particular – Karl Marx. It was he who claimed to see the contours of a new world at the precise moment industrial capitalism burned at its brightest. That is not to say Marx was unique in thinking capitalism would end, nor that it would transition to something else. Indeed in this respect he was joined by, among others, two thinkers of the twentieth century, John Maynard Keynes and Peter Drucker, who despite being critics of his held similar views on how capitalism might lead to a system beyond it. By placing Marx alongside both thinkers, examining how each viewed the relationship of scarcity to capitalism and utopia, we can begin to create a clearer picture of what he meant by communism. An aspect of Marx’s thinking which remains underemphasised is how he recognised capitalism’s tendency to progressively replace labour – animal and human, physical and cognitive – with machines.

So as information, labour, energy and resources become permanently cheaper – and work and the limits of the old world are left behind – it turns out we don’t just satisfy all of our needs, but dissolve any boundary between the useful and the beautiful. Communism is luxurious – or it isn’t communism. Post-Capitalism without Communism: J. M. Keynes Marx was far from alone in claiming that capitalism creates the conditions for a society beyond it. Indeed, he was joined by the most influential economist of the twentieth century: John Maynard Keynes. Keynes was by no means a radical, let alone a revolutionary. And yet in 1930, in the aftermath of the Wall Street crash and the start of what would become the Great Depression, he penned the most optimistic tract of his age, Letter on the Economic Possibilities of Our Grandchildren. In this short, self-assured essay Keynes outlined a new society which he viewed as not only desirable, but inevitable.

While in a sense that was true – the USSR had just disintegrated – it failed to grasp how the gravest challenges are more likely to emerge from internal contradiction or external, unanticipated, shock than an absence of consent. For Fukuyama the end of history signalled a world defined by economic calculation and ‘the endless solving of technical problems, environmental concerns, and the satisfaction of sophisticated consumer demands’. And yet the present moment, defined by challenges such as rising temperatures, technological unemployment, income inequality and societal ageing – to name just a few – poses questions which extend beyond mere technical competence. If Fukuyama’s words were naive in 1992, then in the decade that followed the financial crisis of 2008 they became positively ridiculous. Indeed, he admitted as much in a book he published on identity in 2018. But the stakes are greater than simply being right or wrong on an issue of academic detail.


Basic Income And The Left by henningmeyer

basic income, Bernie Sanders, centre right, eurozone crisis, income inequality, John Maynard Keynes: technological unemployment, labour market flexibility, land value tax, means of production, mini-job, moral hazard, precariat, quantitative easing, Silicon Valley, the market place, Tobin tax, universal basic income

Technical skills might become obsolete very quickly Finally, there might be some thorny issues about when immigrants would qualify for the basic but the ability to be creative, adapt and engage in continuous learning will always remain valuable. income and, in the case of Europe, how such a Second, if there is large-scale technological unem‐ system would be compatible with the European ployment, re-allocating the remaining work should Union’s freedom of movement and non-discrimina‐ be a first step. It might not be the 15-hour work tion rules. In many countries, moreover, it would week that John Maynard Keynes envisaged for his not be easy at all to abolish current pension grandchildren but where possible such a policy systems – also an effect of basic income – as these would make sense and be a first re-balancing tool. embrace strict legal entitlements. Third, public policy-makers should be thinking about job guarantee schemes that would comple‐ A Handful Of Alternatives For all these reasons, the basic income does not look like a suitable policy response to the threat of tech‐ nological unemployment.

The quality of employment is not a separate question to the quality and availability of care in 13 society, to take one example. The current use of social policy to control the individual’s contact with the labour market atomises individuals and NO NEED FOR BASIC INCOME: FIVE POLICIES TO DEAL WITH THE THREAT OF TECHNOLOGICAL UNEMPLOYMENT segments society. Basic income has the potential to BY HENNING MEYER (27 MARCH 2017) enable a new set of more direct relationships among citizens, and a more balanced relation of citizens with the state. The potential threat of technological unemployment is one of the most hotly debated economic issues of our times: in boardrooms and trade union offices but also increasingly amongst policy-makers. The catch-all term ‘digital’ may have been added to numerous political concepts in recent years but beyond such branding there has been very little debate of substance about what a comprehensive policy response to this threat should be.

whether the UBI could be a solution for large-scale technological unemployment or temporary labour market dislocations that could result from acceler‐ ated technological change. When examining the issue in detail it becomes clear that a basic income would not solve many of the key issues. There are several reasons for this. This point in turn raises the question of inequality. Paying people a basic income would not remove the fundamental problem that in the digital economy some people will do extraordinarily well and many others find themselves left behind. One oft-heard argument is that if people want more money than basic income provides they can just work a few days. The first is that basic income in effect reduces the If the problem is technological unemployment, value of work to mere income. I know that many however, this option is simply removed as the large- people disagree with this argument but that is how I scale loss of jobs renders it unviable.


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

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.

Political leaders worried that with the seemingly unlimited productive capabilities of the new machines being developed, there would not be the same amount of demand for labor in the future. Richard Bellman, mathematician and father of dynamic programming, concluded in 1964 that technological advances thus far implied that it would take only 2 percent of the working population to produce what was needed for the American population. The British economist John Maynard Keynes had previously expressed a similar sentiment, arguing that technological development would result in an abundance of leisure time as Westerners would only have to work 15 hours a week.8 Bellman went much further and predicted that his 2 percent scenario would happen within 25 years from the time of writing, and would be more likely to occur within 10 years.9 Futurist Herman Kahn – the founder of the Hudson Institute, and famous for inspiring Kubrick’s character of Dr.

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.


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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

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.” Growth and prosperity would return. Per-capita income would rise. And soon, thanks to the ingenuity and efficiency of our mechanical slaves, we wouldn’t have to worry about jobs at all.

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.

Although Brynjolfsson and McAfee were anything but technophobes—they remained “hugely optimistic” about the ability of computers and robots to boost productivity and improve people’s lives over the long run—they made a strong case that technological unemployment was real, that it had become pervasive, and that it would likely get much worse. Human beings, they warned, were losing the race against the machine.24 Their ebook was like a match thrown onto a dry field. It sparked a vigorous and sometimes caustic debate among economists, a debate that soon drew the attention of journalists. The phrase “technological unemployment,” which had faded from use after the Great Depression, took a new grip on the public mind. At the start of 2013, the TV news program 60 Minutes ran a segment, called “March of the Machines,” that examined how businesses were using new technologies in place of workers at warehouses, hospitals, law firms, and manufacturing plants.


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Democracy at Work: A Cure for Capitalism by Richard D. Wolff

asset-backed security, Bernie Madoff, business cycle, collective bargaining, Credit Default Swap, declining real wages, feminist movement, financial intermediation, Howard Zinn, income inequality, John Maynard Keynes: technological unemployment, laissez-faire capitalism, means of production, moral hazard, mortgage debt, Occupy movement, Ponzi scheme, profit maximization, quantitative easing, race to the bottom, Ronald Reagan, too big to fail, trickle-down economics, wage slave, women in the workforce, Works Progress Administration

The political and economic establishment simply repeats its usual mainstream mantra: maintain the post-2007 trickle-down program with maximum hype about the government’s efforts to end the crisis and wait until the crisis depresses wages and the costs of doing business enough that profit opportunities prompt capitalists to resume investing. The establishment prefers to wait rather than to pay the costs of a government intervention sufficient to overcome the crisis. Capitalism, it insists, will eventually produce an economic upturn. An alternative, though predictable and inadequate, program has come from the still-small but growing coterie of Keynesians. They have been reinvigorated by this crisis much as John Maynard Keynes’s intervention, their inspiration, was produced by the 1930s crisis. They want a much bigger government fiscal stimulus paid for by bigger temporary budget deficits. They insist that the rising national debt can easily be offset later, once robust economic growth resumes. They are quite confident that a bigger stimulus will solve what they see as the problem: returning to a “normal” capitalism from a crisis-ridden capitalism.

Its oscillations take many names, from downturns, busts, deflations, contractions, recessions, and depressions to upturns, booms, inflations, expansions, and prosperity. Professional economists have had to admit that capitalism displays endemic “business cycles” but keep hoping that something might be done to prevent them or at least to keep them from undermining the system. Many economists have built on the work of John Maynard Keynes to assert that the proper exercise of monetary and fiscal policies by government can realize that hope. Politicians have taken that assertion another step. In the United States, every president who presided over a cyclical downturn promised that his economic interventions (his mix of monetary and fiscal policies) would not only end that downturn but would ensure that we would not have another in the future.

The extent to which worker-directors are also rotated through management functions would further differentiate a WSDE-based economy from capitalism. To take a final example, consider that an economic system built upon WSDEs might well be generally concerned about slipping back toward a capitalist system. To that end, it would seek to avoid crises or cycles of the sorts caused in capitalism by overproduction, underconsumption, technological unemployment, and so on. It would work to overcome the social problems created under capitalism when an enterprise discovers a new way to produce output with less labor input, encounters a loss of public desire for its products, or finds that it has overestimated the demand for its output. One way to accomplish this would be to create a fund (by surplus distributions from WSDE boards) and a government agency to administer it.


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The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

"Robert Solow", Airbnb, autonomous vehicles, balance sheet recession, bank run, banking crisis, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, centre right, collective bargaining, debt deflation, deindustrialization, deskilling, Diane Coyle, Donald Trump, Edward Glaeser, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, future of work, gig economy, Gini coefficient, hiring and firing, income inequality, income per capita, industrial robot, intangible asset, job automation, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liquidity trap, longitudinal study, low skilled workers, manufacturing employment, Martin Wolf, meta analysis, meta-analysis, mini-job, mortgage debt, new economy, offshore financial centre, oil shock, open economy, pattern recognition, pink-collar, precariat, quantitative easing, race to the bottom, Richard Florida, Robert Shiller, Robert Shiller, Ronald Reagan, secular stagnation, social intelligence, TaskRabbit, total factor productivity, universal basic income, very high income, winner-take-all economy, working poor

Getting these protections right—so that they favour those at risk of precarity or market exclusion, rather than those who dominate them—can also improve productivity and benefit the whole economy. 8 Macroeconomic Policy for the Left Behind The remedy for the boom is not a higher rate of interest but a lower rate of interest! For that may enable the so-called boom to last. The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom. —JOHN MAYNARD KEYNES, 19361 The end of belonging in Western economies started many decades ago. It was the product of deep, slow-moving forces—above all, technological change—and a permanent improvement will require equally long-term policies. But a programme for a new economics of belonging should start by ensuring that misguided short-term policies do not add to the chronic problems—a sort of Hippocratic do-no-harm oath for economic policy makers.

There is a second reason why macroeconomic policy matters to the left behind, besides supporting policies to create better jobs. Poor macroeconomic policy can on its own directly undermine the economic social contract. The costs of mismanaged aggregate demand fall disproportionately on those on the margins of the economy, hurting the already left behind or adding new victims to their ranks. That is what happened after the downturn triggered by the global financial crisis of 2008. As John Maynard Keynes insisted more than eighty years ago, macroeconomic policy must aim to make good economic times last as long as possible and, conversely, to end recessions as fast as can be done. For a short moment in April 2009, world leaders lived up to this standard. Assembled for a summit in London, they committed to a coordinated stimulus of their economies, using both government budgets and central bank policies to reverse the collapse in economic activity and get the global economy back to growth.

David Mardiste, “Embracing Uber, Estonia Shows Tax Needn’t Be an Issue,” Reuters, 9 June 2016, https://www.reuters.com/article/us-estonia-uber/embracing-uber-estonia-shows-tax-neednt-be-an-issue-idUSKCN0YV1PS. 33. “Now You Can Pay Your Taxes in One Click,” e-Estonia, April 2017, https://e-estonia.com/now-you-can-pay-your-taxes-in-one-click/. 34. See “About Entur,” Entur, accessed 6 December 2019, https://www.entur.org/about-entur/. Chapter 8. Macroeconomic Policy for the Left Behind 1. John Maynard Keynes, The General Theory of Employment, Interest and Money, chap. 22. 2. Martin Sandbu, “The Left Behind Have Most to Lose from Timid Macroeconomic Policy,” Financial Times, 7 January 2019, https://www.ft.com/content/5322ec9a-1008-11e9-acdc-4d9976f1533b. For the United Kingdom, see Cara Pacitti and James Smith, A Problem Shared? What Can We Learn from Past Recessions about the Impact of the Next across the Income Distribution?


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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

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.

That, I think, would be terrible.47 Gandhi understood that mass production was designed to use more sophisticated machines to produce more goods with less labor and at a cheaper cost. He saw, however, an inherent contradiction in the organizational logic of mass production that limited its promise. Gandhi reasoned that “if all countries adopted the system of mass production, there would not be a big enough market for their products. Mass production must then come to a stop.”48 Like Karl Marx, John Maynard Keynes, Wassily Leontief, Robert Heilbroner, and other distinguished economists, he argued that the capitalists’ desire for efficiency and productivity would result in an unyielding drive to replace human labor with automation, leaving more and more people unemployed and without sufficient purchasing power to buy the products being produced. Gandhi’s alternative proposal was local production by the masses in their own homes and neighborhoods—what he called Swadeshi.

But this aside, the Johns Hopkins study of 42 countries revealed that contrary to the view of many economists, approximately 50 percent of the aggregate revenue of the nonprofit sector operating on the Commons already comes from fees for services, while government support accounts for only 36 percent of the revenues, and private philanthropy for only 14 percent.43 I expect that by midcentury, if not much sooner, a majority of the employed around the world will be in the nonprofit sector on the Collaborative Commons, busily engaged in advancing the social economy, and purchasing at least some of their goods and services in the conventional marketplace. The traditional capitalist economy will be managed by intelligent technology attended by small professional and technical workforces. John Maynard Keynes’s futurist essay, written more than 80 years ago for his grandchildren and alluded to in chapter 1, envisioned a world where machines have freed up human beings from toil in the marketplace to engage in deep cultural play on the Commons in the pursuit of more lofty and transcendent goals. It might prove to be his most accurate economic forecast. The business at hand will be to provide both retraining for the existing workforce and the appropriate skill development for students coming into the labor market to ease the transition into the new job categories and business opportunities that come with a massive build-out of an Internet of Things infrastructure around the world.


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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.

In a third situation, labour-saving technologies can be of such general use that they diffuse across the entire economy, dampening the overall demand for labour.24 In this circumstance, even if new industries are created, they will require increasingly less labour because these technologies have a wide range of applicability.25 If any of the above conditions hold, then technological change can lead to increased unemployment. As we will see, there are good reasons to believe a number of these conditions do hold. But while technological unemployment is the most prominent reason today for swelling surplus populations, it is not the only one. Another mechanism that actively changes the size of the surplus is one we have already noted: primitive accumulation.26 This is not just an origin story of capitalism, but also an ongoing process that involves the transformation of pre-capitalist subsistence economies into capitalist economies.


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The Price of Everything: And the Hidden Logic of Value by Eduardo Porter

Alvin Roth, Asian financial crisis, Ayatollah Khomeini, banking crisis, barriers to entry, Berlin Wall, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, clean water, Credit Default Swap, Deng Xiaoping, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, Ford paid five dollars a day, full employment, George Akerlof, Gordon Gekko, guest worker program, happiness index / gross national happiness, housing crisis, illegal immigration, immigration reform, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Joshua Gans and Andrew Leigh, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, longitudinal study, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Monkeys Reject Unequal Pay, new economy, New Urbanism, peer-to-peer, pension reform, Peter Singer: altruism, pets.com, placebo effect, price discrimination, price stability, rent-seeking, Richard Thaler, rising living standards, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, superstar cities, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, transatlantic slave trade, ultimatum game, unpaid internship, urban planning, Veblen good, women in the workforce, World Values Survey, Yom Kippur War, young professional, zero-sum game

They were slicing up the mortgages and gluing them back together into structured products called “Residential Mortgage-Backed Securities”—RMBS in the jargon—that they sold to other financial institutions, who often had no idea of what they contained. By 2007 the mortgage-backed securities market was worth $6.9 trillion, from $3 trillion in 2000. This euphoria had little to do with hard-nosed analysis of the “real” value of homes. Some eighty years ago the great British economist John Maynard Keynes provided a subtle explanation of how investors can take prices badly astray. In his book The General Theory of Employment, Interest and Money, Keynes compared picking stocks to a reverse beauty contest in which investors didn’t have to choose the most beautiful face but the face that was most popular among other investors. “It is not a case of choosing those [faces] which, to the best of one’s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest,” Keynes wrote.

“The South-Sea Project” is in The Poems of Jonathan Swift, Vol. 1 (London: William Ernst Browning, 1910), pp. 198-207. The description of new high-tech mortgages and the boom of mortgage-backed securities is in Jane Dokko, Brian Doyle, Michael Kiley, Jinill Kim, Shane Sherlund, Jae Sim, and Skander Van den Heuvel, “Monetary Policy and the Housing Bubble,” Federal Reserve Board, Finance and Economics Discussion Series, December 22, 2009. Keynes’s description of the reverse beauty contest is in John Maynard Keynes, The General Theory of Employment, Interest and Money (New Delhi: Atlantic Publishers, 2006), p. 140. Charles Prince’s view of dancing is reported in Michiyo Nakamoto and David Wighton, “Citigroup Chief Stays Bullish on Buy-outs,” Financial Times, July 9, 2007. 233-236 Should We Pop Them?: Discussion of the potential social, economic, and political fallout from the financial crisis of 2008 draws from Fernando Ferreira, Joseph Gyourko, and Joseph Tracy, “Housing Busts and Household Mobility,” NBER Working Paper, September 2008; Philip Oreopoulos, Till von Wachter, and Andrew Heisz, “The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates,” NBER Working Paper, April 2006; and Markus Brückner and Hans Grüner, “Economic Growth and the Rise of Political Extremism: Theory and Evidence,” CEPR Discussion Paper, March 2010.

Lansing, “Speculative Growth, Overreaction, and the Welfare Cost of Technology-Driven Bubbles,” Federal Reserve Bank of San Francisco Working Paper, August 2009 (www.frbsf.org/publications/economics/papers/2008/wp08-08bk.pdf, accessed 08/08/2010); and James Edward Meeker, The Work of the Stock Exchange (New York: The Ronald Press Company, 1922), p. 419. The tally of countries that have escaped banking crises is by Carmen Reinhart and Kenneth Rogoff, “Banking Crises: An Equal Opportunity Menace,” NBER Working Paper, December 2008. 236-239 What Rationality?: Eugene Fama’s quote is in Douglas Clement, “Interview with Eugene Fama,” The Region, Federal Reserve Bank of Minnesota, December 2007. Keynes’s quote is in John Maynard Keynes, The General Theory of Employment, Interest and Money (New York: Harcourt Brace and World, 1965), p. 161. Robert Shiller’s theory is described in George Akerlof and Robert Shiller, Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism (Princeton: Princeton University Press, 2010). 240-246 Economics for a New World: Limits to the assumption of human rationality and self-regard are discussed in Herbert Gintis, “Five Principles for the Unification of the Behavioral Sciences,” Working Paper, May 13, 2008.


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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 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

Allowing its winners untrammeled access to the tools that shape public opinion, giving them unlimited latitude to find out what is going on in our minds, granting them the power to decide what we can read, giving them great power to influence our actions and what we should know is something that would be unacceptable to many. Of course, making the right rule changes will help to reduce cultural lag. But rule changes will not be enough in and of themselves. 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.

“Cedar Forest,” Wikipedia, https://en.wikipedia.org/wiki/Cedar_Forest (accessed June 28, 2019). 4. “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.

In the United States factory output per head was 40 per cent greater in 1925 than in 1919…. In quite a few years—in our own lifetimes I mean—we may be able to perform all the operations of agriculture, mining, and manufacture with a quarter of the human effort to which we have been accustomed. For the moment the very rapidity of these changes is hurting us and bringing difficult problems to solve…. We are being afflicted with a new disease … namely, technological unemployment…. … I would predict that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day…. … This means that the economic problem is not—if we look into the future—the permanent problem of the human race…. The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance. But it will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes….


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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

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. But this is only a temporary phase of maladjustment.”21 Keynes was early to point out that technology was a powerful generator of new categories of employment.

“Machines Smarter Than Men? 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?

A 2014 working paper released by the National Bureau of Economic Research confirmed the trend, and yet Henry Siu, an associate professor at the University of British Columbia and one of the authors of the report, clung to the conventional Keynesian view on technological unemployment. He explained: “Over the very long run, technological progress is good for everybody, but over shorter time horizons, it’s not that everybody’s a winner.”1 It is probably worth noting that Keynes also pointed out that in the long run, we are all dead. Indeed, Keynes’s actuarial logic is impeccable, but his economic logic is now under assault. There is an emerging perspective among technologists and some economists that Keynesian assumptions about technological unemployment—that individual jobs are lost but the overall amount of work stays constant—no longer hold true. AI systems that can move, see, touch, and reason are fundamentally altering the equation for human job creation.


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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.

For the same year, global per capita GDP was $10,133: National Accounts Main Aggregates Database, UN Statistics Division, unstats.un.org/unsd/snaama. 56. If the GDP growth phases in over ten years or twenty years, it’s worth $9,400 trillion or $6,800 trillion, respectively—still nothing to sneeze at. On an interesting historical note, I. J. Good, who popularized the notion of an intelligence explosion (this page), estimated the value of human-level AI to be at least “one megaKeynes,” referring to the fabled economist John Maynard Keynes. The value of Keynes’s contributions was estimated in 1963 as £100 billion, so a megaKeynes comes out to around $2,200,000 trillion in 2016 dollars. Good pinned the value of AI primarily on its potential to ensure that the human race survives indefinitely. Later, he came to wonder whether he should have added a minus sign. 57. The EU announced plans for $24 billion in research and development spending for the period 2019–20.

They indicate that between 1947 and 1973, wages and productivity increased together, but after 1973, wages stagnated even while productivity roughly doubled. Brynjolfsson and McAfee call this the Great Decoupling. Other leading economists have also sounded the alarm, including Nobel laureates Robert Shiller, Mike Spence, and Paul Krugman; Klaus Schwab, head of the World Economic Forum; and Larry Summers, former chief economist of the World Bank and Treasury secretary under President Bill Clinton. Those arguing against the notion of technological unemployment often point to bank tellers, whose work can be done in part by ATMs, and retail cashiers, whose work is sped up by barcodes and RFID tags on merchandise. It is often claimed that these occupations are growing because of technology. Indeed, the number of tellers in the United States roughly doubled from 1970 to 2010, although it should be noted that the US population grew by 50 percent and the financial sector by over 400 percent in the same period,22 so it is difficult to attribute all, or perhaps any, of the employment growth to ATMs.


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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

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.

Dan Goodman, lecturer, Intelligent Systems and Networks Group, Imperial College In Surviving AI, Calum Chace provides a marvellously accessible guide to the swirls of controversy that surround discussion of what is likely to be the single most important event in human history – the emergence of artificial superintelligence. Throughout, Surviving AI remains clear and jargon-free, enabling newcomers to the subject to understand why many of today’s most prominent thinkers have felt compelled to speak out publicly about it. David Wood, chair, London Futurists Artificial intelligence is the most important technology of our era. Technological unemployment could force us to adopt an entirely new economic structure, and the creation of superintelligence would be the biggest event in human history. Surviving AI is a first-class introduction to all of this. Brad Feld, co-founder Techstars The promises and perils of machine superintelligence are much debated nowadays. But between the complex and sometimes esoteric writings of AI theorists and academics like Nick Bostrom, and the popular-press prognostications of Elon Musk, Bill Gates and Stephen Hawking, there is something of a gap.

It wasn’t and couldn’t have been predicted in advance, but in hindsight what could be more logical than our most powerful technology, AI, becoming available to most of us in the form of a communication device? Thirty years ago we didn’t know how the mobile phone market would develop. Today we don’t know how the digital disruption which is transforming so many industries will evolve over the next thirty years. We don’t know whether technological unemployment will be the result of the automation of jobs by AI, or whether humans will find new jobs in the way we have done since the start of the industrial revolution. What is the equivalent of the smartphone phenomenon for digital disruption and automation? Chances are it will be something different from what most people expect today, but it will look entirely natural and predictable in hindsight.


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Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey

Airbnb, Akira Okazaki, big-box store, Black Swan, book scanning, British Empire, business cycle, buy low sell high, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbian Exchange, conceptual framework, correlation does not imply causation, Costa Concordia, creative destruction, crony capitalism, dark matter, Dava Sobel, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, Deng Xiaoping, Donald Trump, double entry bookkeeping, en.wikipedia.org, epigenetics, Erik Brynjolfsson, experimental economics, Ferguson, Missouri, fundamental attribution error, Georg Cantor, George Akerlof, George Gilder, germ theory of disease, Gini coefficient, God and Mammon, greed is good, Gunnar Myrdal, Hans Rosling, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, immigration reform, income inequality, interchangeable parts, invention of agriculture, invention of writing, invisible hand, Isaac Newton, Islamic Golden Age, James Watt: steam engine, Jane Jacobs, John Harrison: Longitude, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labor-force participation, lake wobegon effect, land reform, liberation theology, lone genius, Lyft, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, means of production, Naomi Klein, new economy, North Sea oil, Occupy movement, open economy, out of africa, Pareto efficiency, Paul Samuelson, Pax Mongolica, Peace of Westphalia, peak oil, Peter Singer: altruism, Philip Mirowski, pink-collar, plutocrats, Plutocrats, positional goods, profit maximization, profit motive, purchasing power parity, race to the bottom, refrigerator car, rent control, rent-seeking, Republic of Letters, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scientific racism, Scramble for Africa, Second Machine Age, secular stagnation, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, spinning jenny, stakhanovite, Steve Jobs, The Chicago School, The Market for Lemons, the rule of 72, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, total factor productivity, Toyota Production System, transaction costs, transatlantic slave trade, Tyler Cowen: Great Stagnation, uber lyft, union organizing, very high income, wage slave, Washington Consensus, working poor, Yogi Berra

Samuelsonian thought describes modern economists of the so-called mainstream—modeling exclusively with “constrained maximization,” in which the only virtue acknowledged is prudence.9 Not every worthy economist is Samuelsonian. An embattled countersquad of economic thinkers, with quite varied politics, has in the twentieth century included Joseph Schumpeter, Ludwig von Mises, Friedrich Hayek, Thorstein Veblen, John R. Commons, John Maynard Keynes, John H. Clapham, Frank Knight, Eli Heckscher, Gunnar Myrdal, Antonio Gramsci, Luigi Einaudi, Joan Robinson, Kenneth Boulding, Ronald Coase, Paul Sweezy, Alexander Gerschenkron, John Kenneth Galbraith, George Shackle, Robert Heilbroner, Theodore Schultz, Albert Hirschman, Bert Hoselitz, Bruno Leoni, Noel Butlin, James Buchanan, Thomas Schelling, Robert Fogel, Amartya Sen, Elinor Ostrom, Israel Kirzner, and Vernon Smith.

In any case, surely, we do not want lofty disdain for the bourgeoisie and their betterments, or ignorant hatred of their liberal defenders, to be preordained by the rhetoric since Marx of the very word “capitalism,” or by the various agreed fables about it and about its defenders. 12 “Accumulate, Accumulate” Is Not What Happened in History The new economy of betterment that started to take hold in seventeenth-century Holland and eighteenth-century England and early nineteenth-century Belgium, northern France, and the United States was not mere accumulation, which as I’ve noted is as ancient as the fashioning of the Acheulean hand axes in bulk by Homo erectus and earlier by Homo habilis (that is, “tool-making human”) from a little after 2 million years BCE. Our ancestors accumulated arrow points and animal-skin clothing, or they starved or froze to death. But their accumulation did not make for a Great Enrichment. Accumulated capital becomes unusually, nonroutinely profitable only if it embodies betterment, innovism. As John Maynard Keynes pointed out, the return on capital could be driven down by investment to zero in a generation if there were no betterment.1 Because he thought that by the 1930s betterments had been exhausted—as some during the 2010s have come to believe again—he thought that savings (which depend on income, he claimed, not on profit) would henceforth exceed profitable investments (which depend on the allegedly exhausted betterments), leading to perpetual unemployment unless the government substituted social investment for private.

Ideas, not institutions, made the modern world. 44 The Rhetorical Change Was Necessary, and Maybe Sufficient We humans live, that is, by words as much as by bread. Such a claim is “weak” in the mathematician’s sense of being very general, like Chebyshev’s inequality, and not the sharpest result one can imagine, yet hard to dispute. The claim that ideas are powerful asserts merely what few would deny, when reminded by common sense. The economist John Maynard Keynes remarked famously at the height of a material catastrophe in 1936 that “madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”1 His scientific opponent the economist Ludwig von Mises made the same point after the Second World War’s material catastrophe: “The history of mankind is the history of ideas. . . . The sensational events which stir the emotions and catch the interest of superficial observers are merely the consummation of ideological changes. . . .


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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

As we’ll see in the next chapter, this great money river is accessible only to a small part of our population, and relentlessly directs capital away from the real economy. Why do productive and nonproductive investments get the same capital gains treatment? Holding a stock for a year is not the same as working for decades to create the company that it represents a share of, or investing in a new company with no certainty of return. John Maynard Keynes recognized this problem eighty years ago during the depths of the Great Depression that followed the speculative excesses of the 1920s, writing in his General Theory of Employment, Interest, and Money: “Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.”

Understanding where value is created versus where it is captured is equally important when considering the future of work. As we will see in the next chapter, the question of whether the next wave of automation will leave enough jobs for humans is deeply rooted in outdated maps of what counts as paid work, and what we take for granted and expect to be provided for free. 14 WE DON’T HAVE TO RUN OUT OF JOBS AT THE OUTSET OF THE GREAT DEPRESSION, JOHN MAYNARD Keynes penned a remarkable economic prognostication: that despite the ominous storm that was then enfolding the world, mankind was in fact on the brink of solving “the economic problem”—that is, the quest for daily subsistence. The world of his grandchildren—the world of those of us living today—would, “for the first time . . . be faced with [mankind’s] 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.”

v=F7vJDtwidWU. 269 including knowledge work: Martin Ford, The Rise of the Robots (New York: Basic Books, 2015). 271 lack of aggregate consumer demand: Bill Gross, “America’s Debt Is Not Its Biggest Problem,” Washington Post, August 10, 2011, https://www.washingtonpost.com/opinions/americas-debt-is-not-its-biggest-problem/2011/08/10/gIQAgYvE7I _story.html. 271 “on the demand, rather than the supply, side”: Robert Summers, “The Age of Secular Stagnation: What It Is and What to Do About It,” Foreign Affairs, February 15, 2016, retrieved from http://larrysummers.com/2016/02/17/the-age-of-secular-stagnation/. 271 “Only around 15%”: Rana Foroohar, “The Economy’s Hidden Illness—One Even Trump Failed to Address,” LinkedIn Pulse, November 12, 2016, https://www.linkedin.com/pulse/economys-hidden-illness-one-even-trump-failed-address-rana-foroohar. 272 “the job is likely to be ill-done”: John Maynard Keynes, The General Theory of Employment, Interest, and Money (New York: Harcourt Brace, 1964), 159. 272 “long-term prospects and to those only”: Ibid., 160. 272 each additional year that an asset is held: Fink, “I write on behalf of our clients . . .” 272 such as that proposed by Thomas Piketty: Michelle Fox, “Why We Need a Global Wealth Tax: Piketty,” CNBC, March 10, 2015, http://www.cnbc.com/2015/03/10/why-we-need-a-global-wealth-tax-piketty.html. 273 “it’s good for business”: Stiglitz, “Of the 1%, by the 1%, for the 1%.”


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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

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.

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.


pages: 477 words: 75,408

The Economic Singularity: Artificial Intelligence and the Death of Capitalism by Calum Chace

3D printing, additive manufacturing, agricultural Revolution, AI winter, Airbnb, artificial general intelligence, augmented reality, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Berlin Wall, Bernie Sanders, bitcoin, blockchain, call centre, Chris Urmson, congestion charging, credit crunch, David Ricardo: comparative advantage, Douglas Engelbart, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Flynn Effect, full employment, future of work, gender pay gap, gig economy, Google Glasses, Google X / Alphabet X, ImageNet competition, income inequality, industrial robot, Internet of things, invention of the telephone, invisible hand, James Watt: steam engine, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, knowledge worker, lifelogging, lump of labour, Lyft, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Milgram experiment, Narrative Science, natural language processing, new economy, Occupy movement, Oculus Rift, PageRank, pattern recognition, post scarcity, post-industrial society, post-work, precariat, prediction markets, QWERTY keyboard, railway mania, RAND corporation, Ray Kurzweil, RFID, Rodney Brooks, Sam Altman, Satoshi Nakamoto, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Skype, software is eating the world, speech recognition, Stephen Hawking, Steve Jobs, TaskRabbit, technological singularity, The Future of Employment, Thomas Malthus, transaction costs, Tyler Cowen: Great Stagnation, Uber for X, uber lyft, universal basic income, Vernor Vinge, working-age population, Y Combinator, young professional

Say's Law, named after French economist Jean-Baptiste Say, holds that supply creates its own demand, and Say argued that there could not be a “general glut” of any particular goods. Of course we do see gluts in sectors of the economy, but an adherent of Say's Law would argue these are the unintended consequences of interventions in free markets, usually by governments. This law became a major tenet of classical economics, but it was rejected emphatically by British economist John Maynard Keynes, and is not widely accepted today. But many economists would accept a broader interpretation of the law which states that reducing the cost of a significant product or service will free up money which was previously allocated to it. This money can then be spent to buy more of the item, or other items, thereby raising demand generally, and creating jobs. This assumes, however, that the money freed up is not spent on expensive assets that generate no employment, or invested in companies that employ very few people.

For time-starved journalists, “good news is no news” and “if it bleeds it leads”, so the comments of Hawking and the others were widely mis-represented as pure doom-saying, and almost every article about AI carried a picture of the Terminator. AI researchers and others hastened to warn us (rightly) not to throw the baby of AI out with the bathwater of unfriendly superintelligence, and the debate is now more nuanced. Technological unemployment and the economic singularity So for me at least, the term “singularity” no longer seems so awkward. And it seems reasonable to apply it to another event which is likely to take place well before the technological singularity. I call this event “the economic singularity”. There is a lot of talk in the media at the moment about technological unemployment – the process of people becoming unemployed because machines can do any job that they could do, and do it cheaper, faster and better. There is widespread disagreement about whether this is happening already, whether it will happen in the future, and whether it is a good or a bad thing.

This disagreement is natural and inevitable: one of the main features of a singularity is that what lies beyond its event horizon is hard to see[v]. Nevertheless we must try to peer into the hazy future if we are to prepare ourselves for it. In this book I will argue that technological unemployment is not happening yet (or at least, not much), that it will happen in the next few decades, and that it can be a very good thing indeed – if we prepare for it, and manage the transition successfully. Naturally, there are challenges. As we will see, a lot of people believe that Universal Basic Income (UBI) is a silver bullet that will solve the problem of technological unemployment. UBI is a guaranteed income paid to all citizens simply because they are citizens. It may take some time for the idea of UBI to be accepted, especially in the USA, where resistance to anything that smacks of socialism is often fierce – almost visceral.


Ellul, Jacques-The Technological Society-Vintage Books (1964) by Unknown

Bretton Woods, conceptual framework, do-ocracy, double entry bookkeeping, Frederick Winslow Taylor, full employment, James Hargreaves, James Watt: steam engine, John Maynard Keynes: technological unemployment, liberal capitalism, means of production, Norbert Wiener, price mechanism, profit motive, rising living standards, road to serfdom, spinning jenny, Thorstein Veblen, urban planning, Vilfredo Pareto

Henri Guitton returns to this idea when he notes that the adap­ tive mechanisms which were active during the nineteenth century have become more and more hampered. This disturbance seems to be attributable to the loss of structural elasticity. A structure suita­ ble to simplified mechanisms, lighter, so to speak ( the old world had not accumulated as many innovations as the new), is no longer adapted to the exigencies of growth of a world no longer young. In an altogether different field, John Maynard Keynes has also shown in his work, General Theory, that technical progress is an The Technological Society ( 151 indispensable factor in the economy. The economic world cannot remain stationary. It is unceasingly called on to evolve. In particu­ lar, the importance of technical progress is central to the theory of investment. All the possibilities of labor must be utilized at any price. It is necessary constantly to uncover new possibilities of in­ vestment.

Certain semipublic corporations finance the operations, but it is clear that the state demands its quid pro quo. If the state is to pay for statistical research, it must get something in return; assistance in directing national affairs. The state requires the economist, on the basis of statistics, to seek out methods of intervention either directly or by subtle means such as those advocated by John Maynard Keynes. When the great private corporations or the state ask the economist for a method to influence reality, they are addressing the economist’s own invincible longing, which in the beginning engendered the improvement of these scientific means. Suppose that we have ac­ cumulated enormous quantities of facts, have encompassed the whole of reality, and possess the means to follow the mechanism of economic phenomena and even to a certain degree to predict them.

One need not yield to the puerile enthusiasm that considers plan­ ning a panacea, a polyvalent remedy like penicillin. But it is nec­ essary to put the plan into a different perspective. Whatever the remedies or proposed reforms for resolving injustice and incoher­ ence in the modern economy, everything occurs through the agency of the plan. The plan in itself is no solution. But it is the indispensa­ ble instrument of all solutions. Even if one starts with Knut Wicksell or John Maynard Keynes, one meets again and again the urgency of planning. In Mumford’s proposals to release man from the clutches of tech­ nique, there is an interesting project for an economic regionalism on a world-wide plane. But this regionalism can, in fact, only be based on the exceedingly complete and rigid planning of produc­ tion and distribution. Planning and Liberty. Everybody, or almost everybody, is con­ vinced today of the effectiveness of the two techniques of interven­ tion, norm and plan.


pages: 585 words: 151,239

Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Robert Solow", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Berlin Wall, Bonfire of the Vanities, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, corporate governance, corporate raider, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, fixed income, full employment, George Gilder, germ theory of disease, global supply chain, hiring and firing, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, Louis Pasteur, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, means of production, Menlo Park, Mexican peso crisis / tequila crisis, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, plutocrats, Plutocrats, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Sand Hill Road, savings glut, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

The burden of deflation didn’t just fall on the little men: industries with high fixed costs such as railroads had to pay a premium for their plant and machinery. Employers had to reduce their workers’ nominal wages in order to keep themselves competitive and support the interest on their debts. And employees received declining nominal wages. Again this was a recipe for conflict: workers focused on the fact that their wages were being cut rather than on the fact that their money would go further (John Maynard Keynes later called this “the stickiness of nominal wages”), and employers had yet more incentive to replace uppity workers with obedient machines. PRICES AND WAGES 1860 – 1905 The protests were also driven by something more nebulous than deflation: anxiety about the sheer scale of change. In Drift and Mastery (1914), Walter Lippmann argued that William Jennings Bryan’s presidential campaign was animated by the desire to defend the traditional American way of life against “the great organizations that had come into the world.”

The American growth machine was humming, America’s potential rivals were tearing themselves apart, and in 1928, America elected a new president who looked eminently qualified to act as a national snake charmer. Herbert Hoover had spent his life amassing perhaps the best résumé of any new president to date, as a mining engineer, international businessman, and star member of America’s great and good. John Maynard Keynes commended his “knowledge, magnanimity, and distinterestedness.” Sherwood Anderson noted that he had “never known failure.” As head of food relief during and after the Great War, he had saved as many as 2 million people from starvation; as secretary of commerce under Harding and Coolidge, he had been a powerful force in both administrations—“secretary of everything,” as one newspaper called him; “secretary of commerce and undersecretary of all the other departments,” as a Washington wag put it.28 He did invaluable work improving the operation of America’s internal market by standardizing the sizes for the parts of all machines.

“The Plan presupposes that we desire to restore a Europe which can and will compete with us in the world markets,” Allen Dulles, the CIA director, wrote, referring to the Marshall Plan, “and for that very reason will be able to buy substantial amounts of our products.”8 The U.S. share of world trade in manufactured goods increased from 10 percent in 1933 to 29 percent in 1953, providing millions of jobs for American workers. There was no doubt as to who was in charge of the new world. John Maynard Keynes was the moving spirit behind the Bretton Woods meeting, and by far the most intellectually distinguished figure there, but America’s treasury secretary, Henry Morgenthau, and his deputy, Harry Dexter White, made the key decisions: the conference attendees bowed to Keynes but listened to Morgenthau and White. Keynes was so appalled by America’s ruthless determination to replace, rather than supplement, Britain as the world’s superpower that he complained that it wanted to “pick out the eyes of the British Empire.”9 America quickly moved from the hot war against the Axis powers to the cold war against the Warsaw Pact.


pages: 410 words: 119,823

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

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.

“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.

“Guaranteed Income’s Moment in the Sun,” Remapping Debate, April 24, 2013, remappingdebate.org; Rutger Bregman, “Nixon’s Basic Income Plan,” Jacobin, May 5, 2016. 51.Will Grice, “Finland Plans to Give Every Citizen 800 Euros a Month and Scrap Benefits,” Independent, December 6, 2015; Tracy Brown Hamilton, “The Netherlands’ Upcoming Money-for-Nothing Experiment,” Atlantic, June 21, 2016. 52.John Danaher, “Will Life Be Worth Living in a World Without Work? Technological Unemployment and the Meaning of Life,” Science and Engineering Ethics, forthcoming, philpapers.org/archive/DANWLB.pdf 53.Hannah Arendt, The Human Condition, Chicago: University of Chicago Press, 1958. 54.Amos Zeeberg, “Alienation Is Killing Americans and Japanese,” Nautilus, June 1, 2016. 8Machine learning 1.Rob Kitchin, The Data Revolution: Big Data, Open Data, Data Infrastructures and their Consequences, London: Sage Publications, 2014. 2.Daniel Rosenberg, “Data Before the Fact,” in Lisa Gitelman, ed., “Raw Data” Is an Oxymoron, Cambridge, MA: MIT Press, 2013. 3.These questions are explored in greater depth in the excellent Critical Algorithm Studies reading list maintained by Tarleton Gillespie and Nick Seaver of Microsoft Research’s Social Media Collective: socialmediacollective.org/reading-lists/critical-algorithm-studies. 4.Nick Bostrom, Superintelligence: Paths, Dangers, Strategies, Oxford, UK: Oxford University Press, 2014. 5.For those inclined to dig deeper into such subjects, Andrey Kurenkov’s history of neural networks is fantastic: andreykurenkov.com/writing/a-brief-history-of-neural-nets-and-deep-learning. 6.Alistair Barr, “Google Mistakenly Tags Black People as ‘Gorillas,’ Showing Limits of Algorithms,” Wall Street Journal, July 1, 2015. 7.Aditya Khosla et al., “Novel dataset for Fine-Grained Image Categorization,” First Workshop on Fine-Grained Visual Categorization, IEEE Conference on Computer Vision and Pattern Recognition, 2011, vision.stanford.edu/aditya86/ImageNetDogs; ImageNet, “Large Scale Visual Recognition Challenge 2012,” image-net.org/challenges/LSVRC/2012. 8.David M.


pages: 252 words: 74,167

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!

At the end of the game, the dejected Jennings scribbled a phrase on his answer board and held it up for the cameras. It was a line from The Simpsons, although it seemed strangely appropriate given what had happened. It read: ‘I for one welcome our new robot overlords.’ 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.

A knocker-up was a class of professional whose job involved waking up sleeping people so that they could get to work on time. To do this, he or she used a long stick (usually a bamboo) to tap on the bedroom window of clients; not moving on to the next house until they were positive that the occupant was awake. Needless to say, knocker-ups were permanently disadvantaged when the French inventor Antoine Redier patented an adjustable mechanical alarm clock in 1847. Not all technological unemployment has been quite so obscure as the lonely death of the knocker-up. The economist Gregory Clark has convincingly argued that the working horse was one of the biggest victims of the invention of the internal combustion engine. According to Clark, there were 3.25 million working horses in England in 1901. By 1924, less than a quarter of a century later, that number had been reduced to fewer than 2 million: a steep drop of 38 per cent.

Speaking at an event called the Hixon Symposium on Cerebral Mechanisms in Behavior, at the California Institute of Technology, McCulloch told the assembled audience: As the Industrial Revolution concludes in bigger and better bombs, an intellectual revolution opens with bigger and better robots. The former revolution replaced muscles by energy, and was limited by the law of the conservation of energy, or of mass-energy. The new revolution threatens us, the thinkers, with technological unemployment, for it will replace brains with machines limited by the law that entropy never decreases. These machines, whose evolution competition will compel us to foster, raise the appropriate question: ‘Why is the mind in the head?’ McCulloch’s last point is the most pertinent one. The Industrial Age leaders of industry assumed it was their intelligence that would protect them from technological replacement.


pages: 374 words: 111,284

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

Economic downturns do not need to happen because the income is there to be spent. But they can happen because income will not necessarily always be fully spent. In practice, in a money economy there are always fluctuations of this sort.7 In normal conditions, such ups and downs are minor and temporary. In really serious economic conditions, however, demand can stay depressed for a considerable period of time. John Maynard Keynes explained how this could happen, and he laid out what could be done to overcome such depressions if and when they occurred. In these conditions, Keynes advocated government and central bank action to restore aggregate demand to normal. Until the depression in Japan in the 1990s, and more recently the Global Financial Crisis of 2007/9 and the subsequent Great Recession that enveloped most of the developed world, these depressionary conditions and Keynes’s advice about how to deal with them were widely regarded as quaint, a sort of historical curiosum of concern only for those interested in economic history, and particularly in the Great Depression of the 1930s.

The work/life balance And yet, as we shall see in a moment, a good deal of modern work does not fit into the drudgery model at all. Indeed, many people seem actively to like their jobs. As we move into the AI economy, these two strands of opinion about work are very much in evidence. Accordingly, if we are on the brink of an age of abundance without the need for work, this is variously seen as liberating and terrifying. You will already have noticed the high regard in which I hold John Maynard Keynes on the subject of macroeconomics, which he more or less invented. You may be surprised, though, to find him playing a major role here in the discussion about the balance between work and leisure. Mind you, as will soon become clear, his thinking on this subject is very far from being the last word. Indeed, his contribution in this area posed more questions than it provided answers. 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?

The employment of human labor definitely is taxed, not just through the imposition of income taxes on employees but also through employment taxes, such as National Insurance in the UK and social security taxes in other countries, on both employees and employers. Without a corresponding tax on robots and AI, the argument runs, the tax system is being far from neutral. It is actually encouraging the substitution of robots and AI for human labor.11 Accordingly, the tax system could be worsening the problems of technological unemployment, depressed wages, and increased inequality. Even if you do not buy the mass impoverishment case, which I don’t, the implication would still be diminished income for society as a result of a distorted allocation of resources. But what is neutral and not neutral in the tax system depends critically upon whether you regard the robots and AI systems that may replace human workers as “artificial workers” or items of capital investment.


pages: 170 words: 49,193

The People vs Tech: How the Internet Is Killing Democracy (And How We Save It) by Jamie Bartlett

Ada Lovelace, Airbnb, Amazon Mechanical Turk, Andrew Keen, autonomous vehicles, barriers to entry, basic income, Bernie Sanders, bitcoin, blockchain, Boris Johnson, central bank independence, Chelsea Manning, cloud computing, computer vision, creative destruction, cryptocurrency, Daniel Kahneman / Amos Tversky, Dominic Cummings, Donald Trump, Edward Snowden, Elon Musk, Filter Bubble, future of work, gig economy, global village, Google bus, hive mind, Howard Rheingold, information retrieval, Internet of things, Jeff Bezos, job automation, John Maynard Keynes: technological unemployment, Julian Assange, manufacturing employment, Mark Zuckerberg, Marshall McLuhan, Menlo Park, meta analysis, meta-analysis, mittelstand, move fast and break things, move fast and break things, Network effects, Nicholas Carr, off grid, Panopticon Jeremy Bentham, payday loans, Peter Thiel, prediction markets, QR code, ransomware, Ray Kurzweil, recommendation engine, Renaissance Technologies, ride hailing / ride sharing, Robert Mercer, Ross Ulbricht, Sam Altman, Satoshi Nakamoto, Second Machine Age, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, smart cities, smart contracts, smart meter, Snapchat, Stanford prison experiment, Steve Jobs, Steven Levy, strong AI, TaskRabbit, technological singularity, technoutopianism, Ted Kaczynski, the medium is the message, the scientific method, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, too big to fail, ultimatum game, universal basic income, WikiLeaks, World Values Survey, Y Combinator

Similarly, the Bank of England recently suggested that up to 15 million British jobs might be unnecessary within a generation. I don’t take these predictions all that seriously. Many of these applications are still young. Every new technological revolution unleashes similar speculation, and it is often wide of the mark. Even our wisest heads get it wrong – back in the 1930s John Maynard Keynes believed that the UK was witnessing ‘technological unemployment’, as the ability of machines to take over jobs outpaced the economy’s ability to generate new ones. We’ve had tech-led disruption before, and we have usually found new (and often better) jobs. After all, machines tend to drive up productivity, which in turn stimulates more investment and demand.3 A recent analysis of the American workforce between 1982 and 2012 found that employment grew in several areas where computers were used (gaming, graphic design and programming).4 And in many instances, productivity gains driven by technology won’t mean fewer jobs, but rather improvements in current ones.


pages: 222 words: 70,132

Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy by Jonathan Taplin

1960s counterculture, affirmative action, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, American Legislative Exchange Council, Apple's 1984 Super Bowl advert, back-to-the-land, barriers to entry, basic income, battle of ideas, big data - Walmart - Pop Tarts, bitcoin, Brewster Kahle, Buckminster Fuller, Burning Man, Clayton Christensen, commoditize, creative destruction, crony capitalism, crowdsourcing, data is the new oil, David Brooks, David Graeber, don't be evil, Donald Trump, Douglas Engelbart, Douglas Engelbart, Dynabook, Edward Snowden, Elon Musk, equal pay for equal work, Erik Brynjolfsson, future of journalism, future of work, George Akerlof, George Gilder, Google bus, Hacker Ethic, Howard Rheingold, income inequality, informal economy, information asymmetry, information retrieval, Internet Archive, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kickstarter, labor-force participation, life extension, Marc Andreessen, Mark Zuckerberg, Menlo Park, Metcalfe’s law, Mother of all demos, move fast and break things, move fast and break things, natural language processing, Network effects, new economy, Norbert Wiener, offshore financial centre, packet switching, Paul Graham, paypal mafia, Peter Thiel, plutocrats, Plutocrats, pre–internet, Ray Kurzweil, recommendation engine, rent-seeking, revision control, Robert Bork, Robert Gordon, Robert Metcalfe, Ronald Reagan, Ross Ulbricht, Sam Altman, Sand Hill Road, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, smart grid, Snapchat, software is eating the world, Steve Jobs, Stewart Brand, technoutopianism, The Chicago School, The Market for Lemons, The Rise and Fall of American Growth, Tim Cook: Apple, trade route, transfer pricing, Travis Kalanick, trickle-down economics, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, We wanted flying cars, instead we got 140 characters, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator

Tay had been hijacked by Internet trolls engaged in a long-standing video-game ritual called griefing, in which the trolls compete for attention, as blogger Anil Dash has explained to the New York Times: “Once a target is identified, it becomes a competition to see who can be the most ruthless, and the ones who feel the most powerless will do the most extreme thing just to get noticed and voted up.” Peter Lee, who led the artificial intelligence group at Microsoft Research, vowed to “work toward contributing to an internet that represents the best, not the worst, of humanity.” That might be harder than he thinks. In 1930 the British economist John Maynard Keynes wrote that in the future we would have to worry about “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.” It could be that in the next ten years we will have arrived at the point where Keynes’s prophecy comes true. A 2013 paper by Carl Benedikt Frey and Michael Osborne of Oxford University suggested that 47 percent of US jobs are at high risk of being automated.

But the New Yorker writer Tad Friend confronted Andreessen with our present reality: “When I brought up the raft of data suggesting that intra-country inequality is in fact increasing, even as it decreases when averaged across the globe—America’s wealth gap is the widest it’s been since the government began measuring it—Andreessen rerouted the conversation, saying that such gaps were ‘a skills problem,’ and that as robots ate the old, boring jobs humanity should simply retool.” Characterizing Keynes’s “technological unemployment” as just a “skills problem” seems shortsighted. The notion that a fifty-year-old autoworker replaced by a robot is going to retrain himself as a software coder and apply for work at Google seems to be a pipe dream that only someone as rich and insulated as Marc Andreessen could conceive. But that is not to say that we shouldn’t think about Keynes’s and Andreessen’s vision of a world in which most of us have a lot of leisure time.


pages: 412 words: 128,042

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

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.

Zoli, E. (2017), Korea’s Challenges Ahead – Lessons from Japan Experience, IMF Working Paper WP/17/2, January. CHAPTER 8: TALLINN NOTES Wassily Leontief The quote at the start of the chapter on p. 263 is from an essay, ‘Machines and Man’, written by Harvard economist Wassily Leontief for an issue of Scientific American devoted to automatic control of machines – see Leontief (1952). The two fears from technology: unemployment and division On the risk that technological progress will lead to mass unemployment, see Keynes (1930) and Leontief (1952), and for a survey of the history of these kinds of concerns, see Mokyr et al. (2015). The prediction of 30 per cent automation – 44 per cent for the low skilled – is from PwC (2018); see also Muro et al. (2019) for a Brookings Institution report on the US. For recent discussion of a ‘digital divide’ or a new ‘digital underclass’, see World Bank (2016) and OECD (2018).


pages: 300 words: 76,638

The War on Normal People: The Truth About America's Disappearing Jobs and Why Universal Basic Income Is Our Future by Andrew Yang

3D printing, Airbnb, assortative mating, augmented reality, autonomous vehicles, basic income, Ben Horowitz, Bernie Sanders, call centre, corporate governance, cryptocurrency, David Brooks, Donald Trump, Elon Musk, falling living standards, financial deregulation, full employment, future of work, global reserve currency, income inequality, Internet of things, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: technological unemployment, Khan Academy, labor-force participation, longitudinal study, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, megacity, Narrative Science, new economy, passive income, performance metric, post-work, quantitative easing, reserve currency, Richard Florida, ride hailing / ride sharing, risk tolerance, Ronald Reagan, Sam Altman, self-driving car, shareholder value, Silicon Valley, Simon Kuznets, single-payer health, Stephen Hawking, Steve Ballmer, supercomputer in your pocket, technoutopianism, telemarketer, The Wealth of Nations by Adam Smith, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, unemployed young men, universal basic income, urban renewal, white flight, winner-take-all economy, Y Combinator

Part of this understanding in America is a high level of commitment to work—educated Americans are working longer hours than they did 30 years ago, and many are expected to be available via email on nights and weekends, even as working hours have dropped in other developed countries. Four in 10 Americans reported working more than 50 hours per week in a recent Gallup survey. This wasn’t always the case; Americans workweeks were actually getting shorter up until 1980. John Maynard Keynes, the British economist, famously predicted in 1930 that, given the continued growth in productivity and progress, by 2030 the Western standard of living would be four times higher and we would be working only 15 hours per week. He was right on the standard of living and very wrong on our work hours. Meanwhile, numerous studies have shown that a lot of the work we’re doing isn’t really adding value, and that we could cut our hours and maintain most of our productivity.

Many men have within us the man-child who’s still in that basement. The fortunate among us have left him behind, but we understand his appeal all too well. He’s still there waiting—ready to take over in case our lives fall apart. FIFTEEN THE SHAPE WE’RE IN/DISINTEGRATION The progress of a few fortunate decades can too easily be swept away by a few years of trouble. —RYAN AVENT The challenges of job loss and technological unemployment are among the most significant faced by our society in history. They are even more daunting than any external enemy because both the enemy and the victims are hard to identify. When a few hundred workers get replaced or a plant closes, the people around them notice and the community suffers. But to the rest of us, each closing is seen as part of economic progress. The challenges are magnified because American society is not in great shape right now.

That hasn’t been us for quite a while. Membership in organizations like the PTA, the Red Cross, labor unions, and recreational leagues has declined by between 25 and 50 percent since the 1960s. Even time spent on informal socializing and visiting is down by a similar level. Our social capital has been declining for a long time, and there is no sign of a reversal. All of these things make addressing technological unemployment harder. We no longer believe we’re capable of turning things around without something dramatic changing. Among the things being questioned is our capitalist system. Among young people, polls show a very high degree of sympathy for other types of economies, in part because they’ve witnessed capitalism’s failures and excesses these past years. I love capitalism—anyone who has a smartphone in their pocket has to appreciate the power of markets to drive value and innovation.


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The End of Work by Jeremy Rifkin

banking crisis, Bertrand Russell: In Praise of Idleness, blue-collar work, cashless society, collective bargaining, computer age, deskilling, Dissolution of the Soviet Union, employer provided health coverage, Erik Brynjolfsson, full employment, future of work, general-purpose programming language, George Gilder, global village, hiring and firing, informal economy, interchangeable parts, invention of the telegraph, Jacques de Vaucanson, job automation, John Maynard Keynes: technological unemployment, knowledge economy, knowledge worker, land reform, low skilled workers, means of production, new economy, New Urbanism, Paul Samuelson, pink-collar, post-industrial society, Productivity paradox, Richard Florida, Ronald Reagan, Silicon Valley, speech recognition, strikebreaker, technoutopianism, Thorstein Veblen, Toyota Production System, trade route, trickle-down economics, women in the workforce, working poor, working-age population, Works Progress Administration

Trapped by an ever-worsening depression, many companies continued to cut costs by substituting machines for workers, hoping to boost productivity-only to add fuel to the fire. At the depth of the depression, the British economist John Maynard Keynes published The General Theory of Employment, Interest and Money, which was to fundamentally alter the way governments regulate economic policy. In a prescient passage, he warned his readers of a new and dangerous phenomenon whose impact in the years ahead was likely to be profound: "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."27 Trickle-dnwn Technology and Market Realities 25 By the 1930s, many mainstream economists were suggesting that increased efficiency and rising productivity, brought on by laborsaving technology, was only exacerbating the economic plight of every industrial nation.

Nearly $46 out of every $100 of new capital went to the military economy.55 Even with the addition of a permanent military-industrial complex, the postwar boom was threatened by continued technological unemployment in the 1950S and 1960s resulting from breakthroughs in automation. New products-especially television and consumer electronics-helped cushion the blow and provide jobs for workers displaced by machines in other industries. The service sector also grew significantly, in part to fill the vacuum left by millions of women leaving the home to work in the economy. Government spending continued to provide jobs as well, dampening the effect of technological unemployment. In 1929 government spending was only 12 percent of the gross national product. By 1975 total government spending was more than 33.2 percent of the nation's GNP.56 The National Defense Highway Act of the 1950S, the most costly public-works project in history, spawned a new highway and suburban culture and opened up new employment opportunities in every region of the country.

The Great Society programs in the 1960s provided jobs for many of the nation's poor, again mitigating the negative impact of rising productivity and growing technological unemployment. The Cold War and the Vietnam War led to an accelerated flow of government dollars into defense industries, insuring an expanding economy Trickle-down Technology and Market Realities 33 and employment for many who might otherwise have been displaced by new technologies. Finally, by the mid-1970S more than 19 percent of all u.s. workers had jobs in the public sector, making the government the largest employer in the United States. 57 NEW REALITIES The new economic realities of the coming century make it far less likely that either the marketplace or public sector will once again be able to rescue the economy from increasing technological unemployment and weakened consumer demand. Information and telecommunication technologies threaten a loss of tens of millions of jobs in the years ahead and the steady decline of work in many industries and employment categories.


pages: 492 words: 118,882

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory by Kariappa Bheemaiah

accounting loophole / creative accounting, Ada Lovelace, Airbnb, algorithmic trading, asset allocation, autonomous vehicles, balance sheet recession, bank run, banks create money, Basel III, basic income, Ben Bernanke: helicopter money, bitcoin, blockchain, Bretton Woods, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, cashless society, cellular automata, central bank independence, Claude Shannon: information theory, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, complexity theory, constrained optimization, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, cryptocurrency, David Graeber, deskilling, Diane Coyle, discrete time, disruptive innovation, distributed ledger, diversification, double entry bookkeeping, Ethereum, ethereum blockchain, fiat currency, financial innovation, financial intermediation, Flash crash, floating exchange rates, Fractional reserve banking, full employment, George Akerlof, illegal immigration, income inequality, income per capita, inflation targeting, information asymmetry, interest rate derivative, inventory management, invisible hand, John Maynard Keynes: technological unemployment, John von Neumann, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, knowledge economy, large denomination, liquidity trap, London Whale, low skilled workers, M-Pesa, Marc Andreessen, market bubble, market fundamentalism, Mexican peso crisis / tequila crisis, MITM: man-in-the-middle, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, natural language processing, Network effects, new economy, Nikolai Kondratiev, offshore financial centre, packet switching, Pareto efficiency, pattern recognition, peer-to-peer lending, Ponzi scheme, precariat, pre–internet, price mechanism, price stability, private sector deleveraging, profit maximization, QR code, quantitative easing, quantitative trading / quantitative finance, Ray Kurzweil, Real Time Gross Settlement, rent control, rent-seeking, Satoshi Nakamoto, Satyajit Das, savings glut, seigniorage, Silicon Valley, Skype, smart contracts, software as a service, software is eating the world, speech recognition, statistical model, Stephen Hawking, supply-chain management, technology bubble, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Nature of the Firm, the payments system, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, trade liberalization, transaction costs, Turing machine, Turing test, universal basic income, Von Neumann architecture, Washington Consensus

Even more surprising is that in these models the operations of banks are not taken into consideration, although they do look at microeconomic data pertaining to large companies and households in aggregate. This approach to macroeconomic theory is a relatively recent phenomenon and coincidentally began being applied in the late 1970s. Prior to this period, work done by prominent economists such as John Maynard Keynes, Irving Fisher, and Henry Calvert Simons, focused profoundly on the way money was made. While the reasons for this divergence in academic disciplines is the subject for a book in economic history, this approach of using the EMH and the RET while subtracting the role of banking was the primary reason why a number of economists did not see the crisis coming. Although debt is so tied up with the monetary system, these theories and the economists who created models based on them, believed that increased complexity led to better price discovery, and thus considered debt to be vital to economic growth.

Short-term GDP21 growth can no longer be the primary objective of governments. Thus, as the definition of capitalism begins to involve the democratic state to a greater degree, we should also use this opportunity to see how we can address the problems of technological unemployment, education, productivity changes, inequality, and ageism. One solution pathway could lie with helicopter money and universal basic income. Helicopter Drops and Universal Basic Income Refresh your memory and think about the last time you heard these “keywords”: technological unemployment, income inequality, stagnant wages, poverty, regulatory gridlock. If you are a regular follower of the news, then the chances are that you may have heard these terms almost on a weekly basis. But these terms are large-scaling in nature and talk about multiple socioeconomic or political issues.

It also investigates if these changes could offer sovereign states a new way to produce money and looks at alternatives other than inflation and interest rates to govern monetary policy. Finally, it reviews different scenarios of how this new structure can be used to implement innovative policies, such as overt money finance and universal basic income, which could help address issues such as income inequality and technological unemployment that currently threaten most economies. While the purpose of the book it to shed more light on the implications of the widespread use of Blockchain technology, the growing diversity within the currency space cannot be fully excluded from the discussion. As the blockchain gains more traction in formal financial circles, its first manifestation in the form of Bitcoin is increasingly being excluded from the dialogue.


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

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.

Guaranteeing to all the real possibility of access to paid work is an imporÂ�tant objective—Â�indeed, one that is central to our plea for an unconditional basic income. Even so, Â�there are two considerations that make this aveÂ�nue unpromising. One of them is well formulated by labor Â� leader Andy Stern. Â�Because of the importance he attaches to work in giving purpose to our lives, he writes, “it was only natuÂ�ral that my initial thought for a solution to the coming tsunami of technological unemployment would be to guarantee a job for Â�every American who wants one.” However, further reflection made him change his mind: “Inevitably, a handful of Â�people in a government agency would end up deciding the value of a parÂ�ticÂ�uÂ�lar job or category of work for the entire country at the expense of individual differences and choice. Also, a guaranteed jobs program would require a huge government bureaucracy.”


pages: 385 words: 111,807

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

.* 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.’

The trouble is that this process is not instantaneous. It takes time for people to search for new jobs and for companies to find the right people. The result is that some people end up spending some time unemployed in the process. This is known as frictional unemployment. Some skills are not wanted any more: technological unemployment Then there is unemployment due to the mismatch between the types of workers demanded and the available workers. This is usually known as technological unemployment or structural unemployment. This is unemployment that we have seen in movies like Roger and Me, the first movie made by Mike Moore, in which he documents the consequence of the closure of a GM car factory in his town, Flint, Michigan, or in The Full Monty, in which six unemployed steel workers in Sheffield, UK, after a draining period of unemployment, launch themselves as a male stripper group.

According to standard economic theory, these workers could have acquired skills in ‘sunrise’ industries and moved to other areas – the electronics industry in California and investment banking in London would have been, respectively, the obvious alternatives. In reality, smooth transitions almost never happen, if you leave things to the market alone. Even with systematic government subsidies and institutional supports for retraining and relocation (e.g., a bridging loan to buy a house where the new job is before the current one is sold), as used in the Scandinavian countries, it is a struggle to eliminate technological unemployment. Governments and unions create unemployment: political unemployment Believing in the modern version of Say’s Law, many Neoclassical economists have argued that, except in the short run, the law of supply and demand ensures that everyone who wants to work will find a job at the going wage rates. If some people are unemployed, these economists argue, it is because something – the government or trade unions – is preventing them from accepting the wage rates that will clear the market.


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The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

3D printing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, credit crunch, crony capitalism, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, gig economy, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, housing crisis, income inequality, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, James Watt: steam engine, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, mini-job, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

They include the income lenders gain from debt interest; income from ownership of ‘intellectual property’ (such as patents, copyright, brands and trademarks); capital gains on investments; ‘above normal’ company profits (when a firm has a dominant market position that allows it to charge high prices or dictate terms); income from government subsidies; and income of financial and other intermediaries derived from third-party transactions. Classical economists derided rental income as unproductive and undeserved, and poured scorn on rentiers. John Maynard Keynes, the most influential economist of the mid-twentieth century, famously dismissed the rentier as ‘the functionless investor’ who gained income solely from ownership of capital, exploiting its ‘scarcity value’. He concluded in his epochal General Theory that, as capitalism spread, it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital … [W]hilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital … I see, therefore, the rentier aspect of capitalism as a transitional phase which will disappear when it has done its work.2 Eighty years on, the rentier is anything but dead; rentiers have become the main beneficiaries of capitalism’s emerging income distribution system.

Some are utopian, such as the postcapitalism of Paul Mason, imagining an era of free information and information sharing.17 Some are decidedly dystopian, where the robots – or rather their owners – are in control and mass joblessness is coupled with a ‘panopticon’ state subjecting the proles to intrusive surveillance, medicalised therapy and brain control. The pessimists paint a ‘world without work’.18 With every technological revolution there is a scare that machines will cause ‘technological unemployment’. This time, the Jeremiahs seem a majority. Fortunately, we are still in the early stages, when collective action can assert democratic control. Whether or not they will do so in the future, the technologies have not yet produced mass unemployment. Although measured unemployment is higher than a few decades ago, this must be seen in the context of population growth and globalisation, in which the world’s labour supply has more than tripled.

There is no need for threats; it is just part of the system. So, while technology is not necessarily destroying jobs, it is helping to destroy the old income distribution system, creating a rental wedge between profits, which are growing and becoming more concentrated, and wages, which are falling and becoming more volatile and uncertain. The threat is technology-induced inequality, not technological unemployment. THE SECOND GILDED AGE Today, we are living in a Second Gilded Age – with one significant difference. In the first, which ended in the Great Crash of 1929, inequality grew sharply but wages on average rose as well. The Second Gilded Age has also involved growing inequality, but this time real wages on average have stagnated or fallen. Meanwhile, those relying on state benefits have fallen further behind, many pushed into homelessness, penury and dependency on inadequate private charity.


pages: 317 words: 84,400

Automate This: How Algorithms Came to Rule Our World by Christopher Steiner

23andMe, Ada Lovelace, airport security, Al Roth, algorithmic trading, backtesting, big-box store, Black-Scholes formula, call centre, cloud computing, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, delta neutral, Donald Trump, Douglas Hofstadter, dumpster diving, Flash crash, G4S, Gödel, Escher, Bach, High speed trading, Howard Rheingold, index fund, Isaac Newton, John Markoff, John Maynard Keynes: technological unemployment, knowledge economy, late fees, Marc Andreessen, Mark Zuckerberg, market bubble, medical residency, money market fund, Myron Scholes, Narrative Science, PageRank, pattern recognition, Paul Graham, Pierre-Simon Laplace, prediction markets, quantitative hedge fund, Renaissance Technologies, ride hailing / ride sharing, risk tolerance, Robert Mercer, Sergey Aleynikov, side project, Silicon Valley, Skype, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, transaction costs, upwardly mobile, Watson beat the top human players on Jeopardy!, Y Combinator

In a landmark paper, two economists at MIT, Eric Brynjolfsson and Andrew P. McAfee, wrote, “Many workers, in short, are losing the race against the machine.”3 The median worker, the average white-collar accountant, the MIT pair warn, should prepare to be replaced. Academics have made such predictions before. When machines began taking over manufacturing tasks in the 1920s and 1930s, John Maynard Keynes sounded the alarm for a “new disease” he termed “technological unemployment,” which happens when jobs can’t be replaced as fast as they’re eliminated by automation.4 Keynes’s warning was blown off as hyperbolic when it didn’t prove out. But perhaps his theory was simply ninety years early. Since the end of the recession in June 2009, according to Brynjolfsson and McAfee, corporations have spent 26 percent more on technology and software but haven’t raised their payrolls at all.


pages: 336 words: 83,903

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

Within the existing structures of capitalist society, the displacement of workers by mechanisation and productivity growth is obviously a grave cause for concern. It leads to forced unemployment (often called ‘technological unemployment’), spelling poverty and social exclusion for thousands of people. 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).


pages: 626 words: 167,836

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

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). But Keynes was still optimistic about the long run.

Looking back in 1965, Robert Solow noted: “Whenever there is both rapid technological change and high unemployment the two will inevitably be connected in people’s minds. So it is not surprising that technological unemployment was a live subject during the depression of the 1930s, nor that the debate has now revived.”18 As noted above, the technological unemployment debate actually predated the Great Depression. However, machinery angst in the twentieth century was clearly cyclical, and this time it followed an upswing in unemployment after the Korean War. Though it is hard to detect much progression in the nature of the debate, our vocabulary bears witness to the progression of technology: the discussions of the 1950s and 1960s centered on the new popular term “automation.”19 Just like “technological unemployment” in the 1930s, “automation” and its discontents became one of the defining themes of the postwar years.

In the early 1930s, discussions of machines stealing citizens’ jobs were featured in radio talk shows, films, and academic conferences, and the Committee on Labor of the House of Representatives even held several hearings on the subject.3 The return of machinery angst cannot be explained in complete isolation from the Great Depression, which certainly exacerbated and prolonged concerns about technological unemployment. Yet the latter was not the cause of the former. As the economic historian Gregory Woirol has pointed out, “The honor of starting the technological unemployment debates belongs to Secretary of Labor James J. Davis.”4 In a 1927 speech, two years before the outbreak of the Great Depression, Davis was the first to take note of the technological challenges facing labor: For a long time it was thought impossible to turn out machines capable of replacing human skill in the making of glass.


pages: 339 words: 94,769

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.

CALIBRATING THE AI-RISK MESSAGE While uncannily prescient, the AI-risk message from the original dissidents has a giant flaw—as does the version dominating current public discourse: Both considerably understate the magnitude of the problem as well as AI’s potential upside. The message, in other words, does not adequately convey the stakes of the game. Wiener primarily warned of the social risks—risks stemming from careless integration of machine-generated decisions with governance processes and misuse (by humans) of such automated decision making. Likewise, the current “serious” debate about AI risks focuses mostly on things like technological unemployment or biases in machine learning. While such discussions can be valuable and address pressing short-term problems, they are also stunningly parochial. I’m reminded of Yudkowsky’s quip in a blog post: “[A]sking about the effect of machine superintelligence on the conventional human labor market is like asking how US-Chinese trade patterns would be affected by the Moon crashing into the Earth.


pages: 332 words: 89,668

Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America by Jamie Bronstein

Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, basic income, Bernie Sanders, big-box store, blue-collar work, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, collateralized debt obligation, collective bargaining, Community Supported Agriculture, corporate personhood, crony capitalism, deindustrialization, desegregation, Donald Trump, ending welfare as we know it, Frederick Winslow Taylor, full employment, Gini coefficient, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, mass incarceration, minimum wage unemployment, moral hazard, moral panic, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, plutocrats, Plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Sam Peltzman, Scientific racism, Simon Kuznets, single-payer health, strikebreaker, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

Hoover and his cabinet opposed intervention, fearing that government “relief would itself become an instrument of patronage and the means of creating a totalitarian state,” as well as undermining American individualism and creating dependency.6 He at first attempted to stoke the economy by issuing optimistic statements that the economy would right itself. He requested, and was granted by Congress, corporate and personal tax cuts. Hoover also requested that unions hold the line on wage increase requests, that employers not cut their payrolls, and that state governors consider undertaking infrastructure projects.7 But Hoover was neither willing nor able to compel businesses to hire workers, nor states to spend money, and even the economist John Maynard Keynes had not, by Hoover’s term in office, fully developed his theory that government spending could “prime the pump” for economic recovery.8 Although businesses could not be compelled, workers could. Beginning in 1931, Hoover’s Secretary of Labor, William Doak, responded to unemployment by seeking out migrants without a legal immigration status through a series of government-sponsored raids on low-wage industries.

On the other hand, she advocated for black state directors of black NYA activities (although she tolerated the payment of disproportionately low salaries).39 Like McLeod Bethune, the New Deal adjusted to the South’s ongoing commitment to white supremacy. BEYOND THE NEW DEAL The New Deal was an experiment in the use of government tools to solve economic problems, but Roosevelt encountered pressure from more radical suggestions for redistribution of income. Some who called for change pointed to technological unemployment; in the modern economy, some lost jobs were just not coming back, as the tractor could do a job faster than the hoe. Others argued that economic growth was hindered by lack of economic distribution.40 For example, the philosopher John Dewey headed the People’s Lobby, one of many groups to argue that the Great Depression had been caused by underconsumption as workers could not afford to purchase consumer goods.


pages: 360 words: 101,038

The Revenge of Analog: Real Things and Why They Matter by David Sax

Airbnb, barriers to entry, big-box store, call centre, cloud computing, creative destruction, death of newspapers, declining real wages, delayed gratification, dematerialisation, deskilling, Detroit bankruptcy, Elon Musk, Erik Brynjolfsson, game design, hypertext link, informal economy, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, Kickstarter, knowledge economy, low cost airline, low skilled workers, mandatory minimum, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Minecraft, new economy, Nicholas Carr, Peter Thiel, Ponzi scheme, quantitative hedge fund, race to the bottom, Rosa Parks, Second Machine Age, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Skype, Snapchat, Steve Jobs, technoutopianism, Travis Kalanick, upwardly mobile, Whole Earth Catalog

In a few years, as you step into your self-driving car, what job will it take you to? If the answer is a job that can either be done by a computer with artificial intelligence or a robot equipped with one, you might want to think about a new career path. Futurists and technology leaders offer a sunnier view: all this displacement could simply be a way station to a period of technological bliss. John Maynard Keynes, the father of modern economics, predicted in 1930 that we would reach the point where machines do all the work we don’t want to do, and man simply spends his time basking in idle thought. We will welcome our Terminators with open arms as they fix us cocktails. Or, for those who don’t want to spend all day philosophizing, disruption will only create more opportunities for employment. Digital technology has already made many new jobs possible, from systems engineers and application designers to Etsy artisans and Uber drivers.

HP has laid off more than fifty thousand employees since 2013, the equivalent of everyone who works for Google. “There is no economic law that says that everyone, or even most people, automatically benefit from technological progress,” wrote economists Erik Brynjolfsson and Andrew McAfee in their groundbreaking 2012 book Race Against the Machine, which highlighted the growing gap between technological progress and job creation. “The threat of technological unemployment is real.” Brynjolfsson and McAfee are not technophobes gripped by a fear of progress. They point to previous disruptions in labor during the technological leaps of the industrial and mechanized ages, and show how these eventually led to greater middle-class wealth and job creation, as productivity increased. The difference now is the speed and scale of digital disruption, which has accelerated exponentially, and the fact that all of that digital progress has not resulted in any real gains in productivity.


pages: 486 words: 150,849

Evil Geniuses: The Unmaking of America: A Recent History by Kurt Andersen

affirmative action, Affordable Care Act / Obamacare, airline deregulation, airport security, always be closing, American ideology, American Legislative Exchange Council, anti-communist, Apple's 1984 Super Bowl advert, artificial general intelligence, autonomous vehicles, basic income, Bernie Sanders, blue-collar work, Bonfire of the Vanities, bonus culture, Burning Man, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, centre right, computer age, coronavirus, corporate governance, corporate raider, COVID-19, Covid-19, creative destruction, Credit Default Swap, cryptocurrency, deindustrialization, Donald Trump, Elon Musk, ending welfare as we know it, Erik Brynjolfsson, feminist movement, financial deregulation, financial innovation, Francis Fukuyama: the end of history, future of work, game design, George Gilder, Gordon Gekko, greed is good, High speed trading, hive mind, income inequality, industrial robot, interchangeable parts, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jeff Bezos, jitney, Joan Didion, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, knowledge worker, low skilled workers, Lyft, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, Menlo Park, Naomi Klein, new economy, Norbert Wiener, Norman Mailer, obamacare, Peter Thiel, Picturephone, plutocrats, Plutocrats, post-industrial society, Powell Memorandum, pre–internet, Ralph Nader, Right to Buy, road to serfdom, Robert Bork, Robert Gordon, Robert Mercer, Ronald Reagan, Saturday Night Live, Seaside, Florida, Second Machine Age, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Stewart Brand, strikebreaker, The Death and Life of Great American Cities, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, union organizing, universal basic income, Unsafe at Any Speed, urban planning, urban renewal, very high income, wage slave, Wall-E, War on Poverty, Whole Earth Catalog, winner-take-all economy, women in the workforce, working poor, young professional, éminence grise

And finally, there’s the best of all plausible worlds—amazing machines, more than enough stuff that our new, optimal social democracy divides fairly, more or less Earth as on Star Trek or in the redemptive finale of WALL-E. In 1930—just after the word robot was invented, just as Aldous Huxley was imagining the dystopia of Brave New World and just before H. G. Wells depicted the utopia of The Shape of Things to Come—their friend John Maynard Keynes saw the economic future.*1 “We are being afflicted with a new disease,” he wrote in a speculative essay called “Economic Possibilities for Our Grandchildren,” a disease of which “readers 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.” It would become a bigger and bigger problem, the founder of macroeconomics warned, and in about a century—that is, around 2030—it would finally require a major rethink of how we organize economies.

Two basic goals will seem contradictory: we want everyone with talent or passion for their work to keep working, and all employees to be treated with fairness and respect now, but for the long term we need to start making self-respect and usefulness more independent of employment, to educate and enable and encourage Americans to be and feel engaged and useful and respected regardless of how they receive their fair share of the national wealth. One of the main challenges will be changing what Harari calls the moral viewpoint. We need to think of his scary wolf, AI and robots, not necessarily as a terrifying predator. Instead, they can be like the gray wolves that we tamed thousands of years ago and turned into humans’ best friend—dogs. Technological unemployment and its approaching endgame are indeed an existential threat, but they’re also a potentially grand existential opportunity. And taking advantage will first require a shift by the United States to some kind of economic democracy, taking the power away from big business and the rich to write all the rules only to serve themselves. There will be political and cultural problems at every step of the way, no question, but we need to keep our eye on the prize: it’s all about solving the one overriding problem—what economists call the economic problem, how people decide how to use the available resources to survive and, beyond mere survival, to enjoy life.


pages: 385 words: 123,168

Bullshit Jobs: A Theory by David Graeber

1960s counterculture, active measures, basic income, Berlin Wall, Bernie Sanders, Bertrand Russell: In Praise of Idleness, Bretton Woods, Buckminster Fuller, call centre, cognitive dissonance, collateralized debt obligation, David Graeber, Donald Trump, equal pay for equal work, full employment, global supply chain, High speed trading, hiring and firing, informal economy, Jarndyce and Jarndyce, Jarndyce and Jarndyce, job automation, John Maynard Keynes: technological unemployment, knowledge worker, moral panic, post-work, precariat, Silicon Valley, Silicon Valley startup, single-payer health, software as a service, telemarketer, The Future of Employment, Thorstein Veblen, too big to fail, Travis Kalanick, universal basic income, unpaid internship, wage slave, wages for housework, women in the workforce, working poor, Works Progress Administration, young professional, éminence grise

Yet at the same time, TV crews managed dutifully to interview city employees—and I wouldn’t be surprised if some of them were the same city employees—commenting on how terribly tragic it would be if they wouldn’t be able to get to work, since they knew that’s what it would take to get them on TV. No one seems to feel free to say what they really feel about such matters—at least in public. It was plausible, but I didn’t really know. In a way, I wrote the piece as a kind of experiment. I was interested to see what sort of response it would elicit. This is what I wrote for the August 2013 issue: On the Phenomenon of Bullshit Jobs In the year 1930, John Maynard Keynes predicted that, by century’s end, technology would have advanced sufficiently that countries like Great Britain or the United States would have achieved a fifteen-hour work week. There’s every reason to believe he was right. In technological terms, we are quite capable of this. And yet it didn’t happen. Instead, technology has been marshaled, if anything, to figure out ways to make us all work more.

Figure 8.1 Creation of Course Profile/Syllabus (Managerial) Figure 8.2 Creation of Course Profile/Syllabus (Non-Managerial) Figure 8.3 Creation of Exam (Managerial) Figure 8.4 Creation of Exam (Non-Managerial) The critical thing about this diagram is that each of those additional lines represents an action that has to be performed, not by a computer, but by an actual human being. on the political ramifications of bullshitization and consequent decline of productivity in the caring sector as it relates to the possibility of a revolt of the caring classes Since at least the Great Depression, we’ve been hearing warnings that automation was or was about to be throwing millions out of work—Keynes at the time coined the term “technological unemployment,” and many assumed the mass unemployment of the 1930s was just a sign of things to come—and while this might make it seem such claims have always been somewhat alarmist, what this book suggests is that the opposite was the case. They were entirely accurate. Automation did, in fact, lead to mass unemployment. We have simply stopped the gap by adding dummy jobs that are effectively made up.


pages: 596 words: 163,682

The Third Pillar: How Markets and the State Leave the Community Behind by Raghuram Rajan

activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, airline deregulation, Albert Einstein, Andrei Shleifer, banking crisis, barriers to entry, basic income, battle of ideas, Bernie Sanders, blockchain, borderless world, Bretton Woods, British Empire, Build a better mousetrap, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, computer vision, conceptual framework, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, currency manipulation / currency intervention, data acquisition, David Brooks, Deng Xiaoping, desegregation, deskilling, disruptive innovation, Donald Trump, Edward Glaeser, facts on the ground, financial innovation, financial repression, full employment, future of work, global supply chain, high net worth, housing crisis, illegal immigration, income inequality, industrial cluster, intangible asset, invention of the steam engine, invisible hand, Jaron Lanier, job automation, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, labor-force participation, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, means of production, moral hazard, Network effects, new economy, Nicholas Carr, obamacare, Productivity paradox, profit maximization, race to the bottom, Richard Thaler, Robert Bork, Robert Gordon, Ronald Reagan, Sam Peltzman, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South China Sea, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, superstar cities, The Future of Employment, The Wealth of Nations by Adam Smith, trade liberalization, trade route, transaction costs, transfer pricing, Travis Kalanick, Tyler Cowen: Great Stagnation, universal basic income, Upton Sinclair, Walter Mischel, War on Poverty, women in the workforce, working-age population, World Values Survey, Yom Kippur War, zero-sum game

Sandel, What Money Can’t Buy: The Moral Limits of Markets (New York: Farrar, Straus and Giroux, 2013). 18. See Michael Walzer, Spheres of Justice: A Defense of Pluralism and Equality (New York: Basic Books, 1983). 19. “Money in Film: Businessmen Are Always the Villains,” The Economist, October 16, 2015, https://www.economist.com/blogs/prospero/2015/10/money-film. EPILOGUE 1. John Maynard Keynes, “Economic Prospects for our Grandchildren” in Essays in Persuasion, (New York: W.W. Norton & Co., 1963): 358–73. ABCDEFGHIJKLMNOPQRSTUVWXYZ INDEX The page numbers in this index refer to the printed version of this book. The link provided will take you to the beginning of that print page. You may need to scroll forward from that location to find the corresponding reference on your e-reader.

Nevertheless, nearly everyone will get all the care they need to be functioning members of society. Before we end this chapter, we need to discuss three issues. First, to what extent should some of the support beyond the Beveridge level of care, for those who have not saved money or paid for insurance, be decided and administered by the community? Second, should we prepare for increasing technological unemployment with schemes like a universal basic income? Third, how do we pay for the entitlements that have already been committed to, as well as the outstanding government debt, even before we embark on creating new entitlements? COMMUNITY-DETERMINED ADDITIONAL SUPPORT The basic level of economic support in case of unemployment, disability, or old age should have no conditions attached.

One proposal has been gaining currency as societies anticipate massive joblessness from technological change. It is to give every adult in the country a universal basic income (UBI), which will be enough to live a decent life, with no questions asked. The difference from the basic support we discussed above is that UBI would be set at much higher levels, and paid to everyone regardless of need. There is an ongoing debate about whether those who fear technological unemployment are too pessimistic, underestimating the ability of markets and human ingenuity to find productive uses for unemployed humans. History suggests the optimists have been right thus far, but this time could be different. UBI, in principle, is extremely simple. Each adult would get a monthly check for themselves and their dependents. If, let us say, it takes $20,000 net of taxes for a single person to live a modest but not difficult life in the United States, then a total of about $6.5 trillion will have to be distributed to the US population of about 328 million persons.


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The Age of Surveillance Capitalism by Shoshana Zuboff

Amazon Web Services, Andrew Keen, augmented reality, autonomous vehicles, barriers to entry, Bartolomé de las Casas, Berlin Wall, bitcoin, blockchain, blue-collar work, book scanning, Broken windows theory, California gold rush, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, citizen journalism, cloud computing, collective bargaining, Computer Numeric Control, computer vision, connected car, corporate governance, corporate personhood, creative destruction, cryptocurrency, dogs of the Dow, don't be evil, Donald Trump, Edward Snowden, en.wikipedia.org, Erik Brynjolfsson, facts on the ground, Ford paid five dollars a day, future of work, game design, Google Earth, Google Glasses, Google X / Alphabet X, hive mind, impulse control, income inequality, Internet of things, invention of the printing press, invisible hand, Jean Tirole, job automation, Johann Wolfgang von Goethe, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, knowledge economy, linked data, longitudinal study, low skilled workers, Mark Zuckerberg, market bubble, means of production, multi-sided market, Naomi Klein, natural language processing, Network effects, new economy, Occupy movement, off grid, PageRank, Panopticon Jeremy Bentham, pattern recognition, Paul Buchheit, performance metric, Philip Mirowski, precision agriculture, price mechanism, profit maximization, profit motive, recommendation engine, refrigerator car, RFID, Richard Thaler, ride hailing / ride sharing, Robert Bork, Robert Mercer, Second Machine Age, self-driving car, sentiment analysis, shareholder value, Shoshana Zuboff, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, slashdot, smart cities, Snapchat, social graph, social web, software as a service, speech recognition, statistical model, Steve Jobs, Steven Levy, structural adjustment programs, The Future of Employment, The Wealth of Nations by Adam Smith, Tim Cook: Apple, two-sided market, union organizing, Watson beat the top human players on Jeopardy!, winner-take-all economy, Wolfgang Streeck

Bradford De Long and Barry Eichengreen, “The Marshall Plan: History’s Most Successful Structural Adjustment Program,” in Post–World War II Economic Reconstruction and Its Lessons for Eastern Europe Today, ed. Rudiger Dornbusch (Cambridge, MA: MIT Press, 1991); Baldwin, The Politics of Social Solidarity; Amenta, “Redefining the New Deal”; Robert H. Wiebe, The Search for Order: 1877–1920 (New York: Hill and Wang, 1967); John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” in Essays in Persuasion (New York: W. W. Norton, 1930). By 2014, a Standard and Poor’s report concluded that income inequality impedes economic growth and destabilizes the social fabric, a fact that Henry Ford had long ago acknowledged with his five-dollar day. See “How Increasing Income Inequality Is Dampening US Economic Growth, and Possible Ways to Change the Tide,” S&P Capital IQ, Global Credit Portal Report, August 5, 2014, https://www.globalcreditportal.com/ratingsdirect/renderArticle.do?

For example, a 2004 white paper from the Kansas City Federal Reserve singles out “voice recognition” as a significant threat to future employment rates: “Advances in voice recognition technology, expert systems, and artificial intelligence may eventually allow computers to handle many customer service jobs and perhaps even routine x-ray screening.” See C. Alan Garner, “Offshoring in the Service Sector: Economic Impact and Policy Issues,” Economic Review 89, no. 3 (2004): 5–37. Frey and Osborne’s much-cited 2013 study of technological unemployment sounded the same theme: “Moreover, a company called SmartAction now provides call computerisation solutions that use ML technology and advanced speech recognition to improve upon conventional interactive voice response systems, realising cost savings of 60 to 80 percent over an outsourced call center consisting of human labour.” See Carl Benedikt Frey and Michael Osborne, “The Future of Employment: How Susceptible Are Jobs to Computerisation?”