Ever since I published what was the definitive book on the
permanent jobs crisis almost five years ago, I have been possessive about that
topic. I think of it as mine. That may seem imperious and probably is, but
if you have written an award-winning volume based on a clear-cut but truly
neglected thesis, you are likely to share that feeling.
Last month, Ryan Avent, senior editor and columnist at The Economist, released about the third American
book since the fall of 2011 on that subject, though he didn’t quite call it a
permanent crisis, opting for “labour abundance” instead. The
Wealth of Humans attempted a broader scope, as shown by its subtitle Work, Power, and Status in the Twenty-First
Century. How good a descendant is
it?
First, Avent did not cite Work’s New Age, but recapped, and had slightly different views, on the
core issues I presented there. He
settled on the phrase “the labour glut” for what I called excess capacity,
which he also called “the sheer abundance of labour,” and said that workers’ numbers
“hold down wages.” Indeed, he spent an
entire chapter explaining the simple supply and demand truth that “higher wages
are so economically elusive.” He
described why we are not going back to “the bygone age of mass employment,” which
as I showed was due to new products never needing large amounts of employee time
per item to produce. He explained the
breaking of the connection between pay and output through Baumol’s Cost
Disease, an American economist’s principle, instead of by invoking scalability,
or the production of iterations of goods and services at tiny additional cost,
as I did. He referred to the “digitally
disappointing era,” which I specified as the lack of widespread computer-driven
productivity improvement before the late 1990s.
He was also skeptical of the ability of further schooling as a solution
to economic weakness, being in all fairness more eloquent than I by saying that
“the low-hanging educational fruit has been picked.”
Since The Wealth of
Humans was published in 2016 instead of 2012, Avent had access to much
newer information, and he covered it well.
He touched on writings by Thomas Piketty and others. He discussed what he called
“hyperglobalization,” and noted that many countries, the “never-developing
world,” are not only still not contributing intellectual resources but have
bleak prospects to do so soon. He acknowledged
the pooling of masses of money in a small set of companies and individuals by
calling it “reserve accumulation,” correctly noted that that phenomenon
explains why less of it has trickled down than it would if it were in more
needy hands, and said that has led to “secular stagnation.” He summarized progress up to press time in
robotics and driverless cars, and showed its importance to the future of
American employment. He named and
interpreted many other news items, including previous Republican presidential
nominee Mitt Romney’s infamous comment about 47% of Americans being “victims,
who believe the government has a responsibility to care for them” (referring
mostly to those collecting Social Security at retirement age after decades of
work). He said, as I have implied but
not put as pithily, that “in a way, it would be much easier if the robots were
simply taking all the jobs,” meaning that our relatively good times have unduly
blunted our awareness of the historical transition we are living through.
On one subject, though, the author fell into traps. He stated that “car ownership could be
obsolete,” which has no chance to happen soon among rural residents. He cited Uber drivers averaging $19 net per
hour as opposed to traditional taxi operators earning $13, which can only be
due to poor cost accounting, but followed it up with descriptions of how cab
driving is becoming more automated, and thus, according to his other examples,
will allow them to be less skilled and in turn to be paid less. These slip-ups, though, look suspiciously old
in this fast-moving field, and may reflect his collecting information a year or
more before the book’s publication date, when these issues were not as well
understood.
As opposed to these two errors, I flagged four places where
I thought Avent’s analysis was especially insightful. One of his subtheses was that the ways of
managing technological growth socially are lagging behind the progress
itself. He advocated more government
spending, without which we are most unlikely to adequately deal with the jobs
crisis. He proposed an immigration
policy similar to those I saw in Australia, New Zealand, and the European
Union, that of allowing people in who can do jobs where there are not enough
workers, and, additionally, those who can perform tasks especially valuable to
an aging population. Last, I’m still
working out what he meant by saying “software is eating everything,” but I suspect
something about which we all should be aware.
On conclusions, I found his vague. He said we should be “generous,” but did not define
that clearly enough for me to understand.
I did not see any mention of guaranteed basic income, still the most
obvious possible jobs-crisis solution and about which there has been a lot of post-2011
commentary and developments. He stopped
short of evaluating or even mentioning other ways out.
Overall, Ryan Avent would have benefited by reading Work’s New Age. That he works for a major publication is no
excuse. Information is available from a
variety of sources, and this time it was personally clear, to me, that some were
not considered. The Wealth of Humans has a lot to offer, but it missed too
much.
Who will be next on this topic?
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