Tag Archives: economics


Depopulation: An Investor’s Guide to Value in the Twenty-First Century (2015) by Phillip Auerswald and Joon Yun is a semi-interesting book about a really important topic that gets far less attention than it should.

There are many books that deal with AI and how it could possibly end all our jobs. However, there is zero data that this is actually happening. AI has made ads marginally better and can recognize snapshots on Facebook. Which is amazing, but the real impact has been fairly small. However, Japan is shrinking by about the population of Canberra every year and this is the only book I’ve seen on this trend.

Almost every single developed country has a birth rate below replacement. The only large group of countries with high birth rates are really poor countries in Africa and once they too become richer, say approaching 10K GDP at PPP per year which they are on track to do by mid-century it’s highly likely birth rates will fall there too.

This book looks at how birth rates are falling and then makes some suggestions as to where investment will be good. The author’s suggest companies with good returns rather than high growth prospects.

The book has some interesting statistics and is not terrible, but it does far less than can be done with a really interesting subject. Looking at Japan and the many places where populations are declining now, such as East Germany, deserves better treatment and should be more interesting.



In Our Hands: A Plan to Replace the Welfare State

In Our Hands: A Plan to Replace the Welfare State (2006) by Charles Murray describes an actual, costed out Universal Basic Income (UBI).Murray is a controversial scholar but this book does actually have figures and describes how a UBI could work.

UBI has currently had a resurgence of popularity due mainly to the fear the robots and automation are believed by some to be about to dramatically reduce employment. It has supporters on both the left and right. However, people appear to be talking about very different things in terms of levels of a UBI and also tend to be very vague at best about costing such a proposal out.

In the book Murray costs out a UBI for every adult over 21 at 10K that also has a supplement of 3K paid toward a catastrophic emergency medical fund. That is, the UBI would be under the current US poverty threshold. It’s not a lot. Murray goes on to suggest that people on this kind of level of money could then save 2K a year that could be used for old age. It’s worth noting that working beyond the UBI would result in none of it being taken back and the effective marginal tax rate would be zero.

At 60K of income the UBI would start to decrease and reduce eventually to zero. So it’s not quite a UBI but it is reasonable.

Murry then goes on to describe various scenarios for various people on the UBI.

The book did make me realise that the US has various odd programs like food stamps that many other countries, like Australia, do not and that may be part of the appeal of simplifying social payments.

The book didn’t convince me that a UBI is a good idea but it did have a serious attempt at costing and describing how a UBI could work. It isn’t the UBI of some people’s dreams of, say 25K a year, but it is costed out. The book is very short and is worth reading for anyone interested in a serious proposal for a UBI.

Fifty Things that Made the Modern Economy

Fifty Things that Made the Modern Economy (2017) by Tim Harford is a history of fifty very important technologies that have had a huge impact on the modern economy. It’s a bit like James Burke’s superb TV shows Connections and the Day the Universe changed but for the loyal listener set. Chapters from the book were first put into a podcast series that is also very interesting and well done.

Harford was a professional economist before becoming a writer for the Financial Times and then a presenter on BBC radio. He’s written a number of books on economics and has now written this one looking at a range of technologies. He hasn’t tried to pick the most important items, like the wheel, or light, because so many other people have looked at them. Instead it’s an inspired list of varying items and the tales behind them.

The items include : The Plough, Barbed Wire, Robots, The Welfare State, Infant Formula, TV Dinners, The Pill, Video Games, Market Research, Air Conditioning, Department Stores, The Dynamo, The Shipping Container, The Barcode, Tradable Debt and the Tally Stick, The Billy Bookcase, The Elevator, Cuneiform, Public Key Cryptography, Double-Entry Bookkeeping and the Light Bulb. They vary considerably.

Each chapter is very interesting on its own and the whole is even greater than the sum of the parts. The chapters are also quite short and so the book can be read in nice short chunks if desired. Each chapter has extensive references as well so anyone who wants to go into more depth can easily go off and read books about the inventions.

It’s really a great read and something that is really informative. Even if you have listened to the podcasts you’ll also find more in the book. It’s definitely one of Harford’s best books and for anybody at all interested in technology or the impacts of technology it’s highly recommended.


The Entrepreneurial State

The Entrepreneurial State (2013) by Marianna Mazzucato looks at how the state is, according to Mazzucato, entrepreneurial in its development of science and technology.

The first thing about the book is that it abuses the word ‘Entrepreneur’. Mazzucato tries to put forward the idea that the state, by financing research is being ‘Entrepreneurial’. But it’s not really. The financial risk for the state itself isn’t that great. The financial risk for the people who allocate the funding is also small.

The book does make the case well that a lot of technology had much of the initial development paid for by the state. The book looks at the IPhone extensively and points out that microprocessors, the internet, touchscreens and the GPS in the device were all built for the US government. She then implies that Apple and other technology companies and VC firms just took the money and should pay more of it in tax. The book downplays the difficulty of performing this kind of integration and ignores the many companies who tried and failed to build a successful smartphone prior to the IPhone.

There is a very interesting review of the book in The Guardian that points out the problems with her general thesis.

The book then puts forward the idea that the government is the key entity that needs to shape clean energy by being entrepreneurial, but also in taking the upside and more of the profit. She jumps from pointing out that the state created various technologies used by Google and Apple and pharmaceutical companies to saying that it can just shape the market to prefer her favored energy choices. It’s not a strong argument. The US government did invest in IT, but there was no design of a market for computers, software and smartphones. That simply evolved.

Mazzucato makes the point that Apple doesn’t pay their ‘fair share’ of tax by pointing out that they use tax shelters to minimize the tax they pay. She doesn’t mention the raw figure of how much tax big US IT companies pay. Even with various tricks to reduce their tax they still pay billions and their employees, in jobs created by these companies also pay a great deal of tax.

The Entrepreneurial State makes the case that well that state spending on R&D has paid off in many instances. The claims it makes that the state should obtain more of the profits and benefits and shape markets is not well made.



Utopia for Realists

Utopia for Realists (2017) by Rutger Bregman is a book that suggests that in the near future we can all have a Utopia where people only work 15 hours a week, there are open borders and there is a basic income. Machines will provide more and more of the things we want and we’ll all be able to have much more leisure according to Bregman.

Bregman starts his book by pointing out that the leisure standard we all enjoy today is something that previous generations would only have dreamed about. We work shorter hours doing less physically damaging work, half our children don’t die before age five and we can engage in sex that doesn’t cause pregnancy often and outside marriage should we choose to do so.

From here Bregman goes on to suggest that the future and the near future will be much better. He suggests that a universal basic income can be created and can be afforded because giving homeless people money is cheaper than paying for their emergency and other care and because a group of Native Americans had their life outcomes improved when a casino opened. Using this reasoning the welfare state should also have happily paid for itself and shouldn’t be expanding and leading to ever bigger deficits in developed countries. Bregman does go into the interesting story about how basic income was introduced by Richard Nixon but failed to get up in Congress. But it is disappointing that the book doesn’t start to describe how basic income is affordable.

Bregman also thinks that most jobs will disappear due to robotics and automation. Here he’s on stronger ground. Many other people think this is also the case. Remarkably Bregman thinks that Rosie, the robot maid in The Jetsons, is pretty much here with the Roomba. Bregman thinks we can all do less work and things will work out. He says that the drastically shorter week worked during the oil crisis in the 1970s in England and the modest drop in output shows that we could all work less.

He then goes on to suggest that international borders should be open so that people can make more money. Again quite a few on the left and the right support this view.

Somewhat surprisingly toward the end of the book Bregman describes what a fan he is of Milton Friedman and Fredrich Hayek.

The book isn’t terrible, but it certainly doesn’t justify the positions Bregman takes with anything solid. I have no doubt the future will be better, but how much better and what will improve is very hard to tell. Flying cars were predicted, instead we got mobile phones.


The Wealth of Humans

The Wealth of Humans: Work, Power, and Status in the Twenty-first Century (2016) by Ryan Avent looks at how the author, who works for The Economist, thinks how work will change in the twenty first century. Avent, who works at for The Economist, thinks that many manual jobs may well be replaced by AI.

Avent, while recounting how he works at The Economist, thinks about how other people work when working at jobs that are not at The Economist. Avent got a powerful lesson as a young man, before working at The Economist, when his father made him do chores in the yard. Possibly it was at this point that he realised he wanted to work at The Economist.

The book ponders automation and income distribution. It is actually a bit surprising that someone who does work The Economist, thinks that redistributing income is something that can be wisely and easily done and should definitely be done. The Economist used to be the magazine of classical Liberalism, Avent seems more of an American style Liberal.

Have I mentioned that Avent works at The Economist?

The question of how work is going to change in the twenty first century is important, difficult and interesting. The reduction of jobs in manufacturing, the possible automation of many or even most jobs is really something that is worth pondering. However, the first place to start would be by looking at how work changed in the twentieth century. There are useful numbers looking at how manufacturing and farming employment changed in particular. Also the huge changes in family size and women working are really important. These sorts of shifts and the somewhat surprising fact that unemployment hasn’t already shot up is something that a book that looks at twenty first century employment should be carefully considering.

The lack of ‘Rosie the robot’ type robots that have been imagined for over 50 years is also something to ponder. Avent amusingly suggests that iRobot is looking at making robot lawn mowers, he is unaware that Husqvarna have been making them for twenty years but that most people don’t have one because of their high costs. Most people don’t have a Roomba either. The lack of rapid improvement in Robotics (Kuka’s law?) should be mentioned as much as the massive improvements in semi-conductors and communications.

The book isn’t bad. Avent writes very well as would be expected for someone who works at The Economist. But his view is myopic, The Economist is a very unusual workplace and it provides a poor lens with which to look at how work might evolve. He makes some good points that low wage growth might be in part be driven by pressure to find any job due to automation already cutting into work’s role. Also his analysis of how business culture is incredibly important and hard to transplant is insightful. However, the book lacks more of a numeric and historic base to look at how work may evolve and is let down by this.


Men Without Work

Men Without Work:America’s Invisible Crisis (2016) by Nicholas Eberstadt looks at the dramatic decline in the US male labour force participation rate over the past 50 years. Nearly one in six men had no paid work at all and one in eight was completely out of the labour force. The US generally has lots of people who work lots of hours, but in terms of the male participation rate the US is dramatically lower than other countries.

The book goes through how the rate has steadily decline and Eberstadt looks at why those men might be out of the labour force. Interestingly, men who have children are much more likely to be in the labour force than those who don’t, but it’s hard to say which way this relationship goes. Eberstadt discusses the idea that ex-convicts, of which the US has dramatically more than any other developed country are one of the major drivers of this problem. It seems likely that they are.

The book presents a lot of statistics and also has some people who disagree with some Eberstadt’s views who also put forward their ideas about the issue.

The book is an interesting read about a surprising and alarming aspect of the US.