Tag Archives: economics

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.

 

The Complacent Class

The Complacent Class: The self-defeating Quest for the American Dream (2017) by Tyler Cowen describes how formerly innovative intellectuals and writers now just use their blogs and media savvy to promote books that aren’t really up to it. Well, not really, it’s actually a continuation of Cowen’s book ‘The Great Stagnation’ which was a really interesting short book about how economic growth had slowed since the boom years of 1945-1975. Cowen, for those who don’t know is a super smart economist who has a great blog and has also recently been doing excellent interviews.

Cowen describes how Americans are moving less, mixing less, being less entrepreneurial and perhaps working less hard than they used to and this is why economic growth isn’t as high as it used to be. The facts that Cowen describes are often fascinating. It’s remarkable to find that California and New York have the most segregated schools in the US due mainly to income segregation. However, the overall thesis is muddled and isn’t really pushed in the end. It seems more like Cowen came up with the title, wrote something and then used his media contacts to push the book.

If the idea of a slowdown in growth is something that interests you and you haven’t read ‘The Great Stagnation’ then that book is very much worth a read. If you have read ‘The Great Stagnation’ this book adds little.

 

 

Why Information Grows:

Why Information Grows: The Evolution of Order, from Atoms to Economies (2015) by Cesar A. Hidalgo is a somewhat interesting book that tries to explain how information explains similarities between statistical physics and economics. Hidalgo is a statistical physicist who now works at MIT’s Media Lab. No doubt he is fantastically clever. Hidalgo has also produced some really interesting visualisations of the complexity of economies.

The book starts by looking at atoms and how complexity and information arises in these circumstances. He points out the interesting idea that we live in a world with incredibly complex organisms despite the fact that entropy always increases. Then Hidalgo suggests that these analogies extend to DNA and then on to economies. He mentions how companies and economies enable people to produce things that are far more complex than one person could possibly manage on their own. He points out the importance of tacit knowledge in firms and how making complex machines requires huge amounts of this. He shows how rich economies usually export a range of items that includes simpler items but that poorer ones rarely export complex items.

The book isn’t bad. It’s worth a read, but the main point it is trying to make isn’t really carried. Analogies between economics and other fields often don’t really work and this is one them. However, the journey provides quite a few rewards.

 

Messy

Messy: The Power of Disorder to Transform our Lives (2016) by Tim Harford praises disorder in getting things done and being creative. Harford is an excellent economics writer and the presenter of More or Less, a number checking radio show and podcast.

First Harford describes how messiness, disorder and surprise help in creativity and talks about how Brian Eno made musicians do things unexpectedly. Teams are next with a foray into the brilliance of Paul Erdos and how diverse teams do better than teams of similar people. Workplaces where serendipitous meetings happen and the futility of tidy desks make the next chapter. Improvisation and Martin Luther King then get a run.

The virtue of holding the initiative with unexpected boldness, personified by Rommel is then added into the mix. Problems with targets for performance and the way people handle then are then described. The perils of automation and the crash of Air France 447 and the problems with relying on ordered systems are also described. Harford finally describes how calendars can be a prison, how there simply isn’t a perfect formula for a perfect match and why we should value a bit of disorder in our conversation and that kids should play in a world with sufficient mess in order to become more resilient and more creative.

It’s well written but as in Adapt the book doesn’t quite hang together with a particularly strong thesis. Then again for a book about mess this is probably fine. It’s a fun read and any ‘loyal listeners’ out there would definitely enjoy it.

 

 

 

 

The Information Diet

The Information Diet: A Case for Conscious Consumption (2012) by Clay Johnson describes how we should view our information consumption somewhat like our diet and be careful what we take in.

The book starts off by describing how Johnson worked on the Howard Dean campaign and how within that campaign the view of what was going on was not realistic. He parlays this into looking at how we live in media bubbles and often wind up browsing the net reading listicles instead of working. There are lots of references to Michael Pollan references. Johnson recommends reading widely and deliberately reading things you disagree with, reading source material like budgets and laws and avoiding junk information. It’s solid but fairly obvious advice.

The book wouldn’t be a bad essay but the thesis is a bit weak and the meandering a bit wide to make it much good as a book.