Sunday, June 22, 2014



In past generations, most people took whatever work was available and, crucially, learned the necessary skills on the job. From 1945 to around 1978, amid the postwar boom, work life in America was especially benign and predictable. The wage gap between rich and poor shrank to its lowest level on record, and economic growth was widely shared.

But we now know that, during the '70s, this system was becoming unhinged. Computer technology and global trade forced manual laborers to compete with machines at home and with low-wage workers in other countries. The changes first affected blue-collar workers, but many white-collar workers performing routine tasks, like office support or drafting or bookkeeping, were also seeing their job prospects truncated.

At the same time, these developments were hugely beneficial to elite earners, who now had access to a larger, global market and productivity-enhancing technology.


Will robots and software eat all the jobs? No. Will robots and software eat your job? Yes, probably. Eventually. Rejoice!  [.. But] tomorrow's jobs will increasingly exist in Extremistan, not Mediocristan.

[For those who arent] familiar with those terms [h]ere's a primer. Briefly [..] Mediocristan activities is fixed by boundary constraints - the number of hours worked, the number of clients aided, the number of widgets manufactured [.. like a hairdresser, cannot cut two people's hair at the same time]. By contrast, the remuneration for Extremistan activities - basketball player, musician, messaging-app co-founder - can scale to an arbitrary amount.

[..B]ut most would-be pro athletes never make it. Most artists never get to quit their day job. Most startups fail. Few people engaged in Extremistan activities ever become successful enough to start referring to what they're doing as a job.

[Then] if more and more people become unemployed - by which I really mean, fighting to get by in Extremistan - then only one safety-net option will work: a universal basic income. Marc Andreessen is exactly right when he says technology can kindle the kind of economic growth we need; from my perspective, we need it to make a basic income a viable option. I just hope that happens before too many lives are ruined because our politics evolve orders of magnitude slower than our economies, much less our technologies.


Markets are effective for allocating resources, but markets cannot "discover and fund talent as they are created". No market can tell some grad student hacking away in Finland will create the most influential operating system known to mankind, and fund him the moment he starts writing this new OS. This is why a safety net is needed, it will give us both inventions, and money in people's pockets which they can use to buy necessities on the marketplace. The solution is both social and capitalist.

Q&A - 19/6

Bank of England The vast majority of money held by the public takes the form of bank deposits. But where the stock of bank deposits com...