It took almost a year for me to be taken seriously on the “technology is undermining capital” front, so it was extremely exciting to see the debate blast off in serious economic circles during the last quarter of 2012.
I thought it might be useful, as a result, to provide some links to the most recent developments — since the debate really is moving quickly now.
But before doing so I would like to stress that I appreciate that the debate itself is not new. Ricardo, the Luddites, Keynes, Marx and many more have all considered the impact of technology on labour and capital.
But, as I’ve written previously, it’s almost as if the entire economic and financial community decided to collectively forget about how tech influences capital following the dotcom crash. Like the bubble and bust proved once and for all that the “new economy” theory was flawed, and that bringing it up again could turn out to be embarrassing — thus better left ignored.
One of the criticisms I face all the time, meanwhile, is that all this tech innovation has been going on for centuries. Why should there be a crisis of capital now? What makes this time any different? And what makes my sudden focus on tech relevant?
For starters, what I feel is new is the idea that the financial crisis was born out of the tech crash. If not for the dotcom bubble, we would not have had the conditions to create the subprime crisis. The China outsourcing phenomenon and imbalance situation may also have been born out of a need to replace mechanised labour — which compromised capital — with human labour, which still ensured profit and the preservation of capital. It was in a sense, an artificial scarcity response… designed to spread spending power to secure return on capital, rather than extinguish it.
I wrote a “Man in the high castle" type piece on FT Alphaville earlier this year, imagining what might have happened had the West not outsourced labour as extensively back in the 1990s. The conclusion was that the West may have been Japan-ified much earlier on.
But what really makes this time different, I would argue, is that a lot of the competition is now coming from a) the voluntary and crowd sourcing/open source arena and b) it’s only artificial scarcities (patents, monopoly interests) which are preventing complete democratisation of technologically-fueled abundance across the world. It is thus because monopoly power is slipping, challenged as it is by free alternatives rather than cheaper ones… that the crisis is beginning to manifest.
In a nutshell there is too much leisure time being devoted to productivity. We are too productive at ever cheaper (or free) rates, and as a consequence the pool of salaried jobs (those which must offer a good salary to attract specific skills) is diminishing quickly.
The system provides a comfortable level of life very easily indeed.
That, at least, is my entirely non-substantiated theory.
Anyway.. enough drifting. Here are the links as promised:
Rise of the Robots - Paul Krugman (Dec 8)
Technology or Monopoly Power? - Paul Krugman (Dec 9)
Robots and Robber Barons - Paul Krugman (Dec 10)
Technology and Wages, the Analytics (Wonkish) - Paul Krugman (Dec 10)
Human vs Physical Capital (Krugman’s “mea culpa” moment) (Dec 11)
Is growth over? - Paul Krugman (Dec 26)
Capital-biased Technological Progress: An Example (Wonkish) - Paul Krugman (Dec 26)
Futurism and Policy - Paul Krugman (Dec 27)
Policy Implications of Capital-Biased Technology: Opening Remarks - Paul Krugman (Dec 28)
Innovation Crisis or Financial Crisis? - Ken Rogoff (Project Syndicate) (Dec 4)
Marginal Revoluion (Tyler Cowen)
What is the potential for 3-D printing? - Marginal Revolution (Dec 23)
Are robots and aging demographics self-cancelling problems? - Marginal Revolution (Dec 28)
Peter Thiel and Gary Kasaparov (FT)
Our dangerous illusion of tech progress - FT (Nov 8)
Noahpinion (Noah Smith)
Rise of the cyborgs - Noahpinion (Dec 26)
Pragmatic Capitalism (Cullen Roche)
Robots Suck, No Robots Rule – What Say Ye? - Pragmatic Capitalism (Dec 10)
Reformed Broker (Josh Brown)
Own the Robots, Bro, Trust Me. - Reformed Broker (Dec 27)
Laurence Kotlikoff and Jeffrey Sachs
Smart Machines and Long-Term Misery - NBER (Dec 2012)
Of Flying Cars and the Declining Rate of Profit - The Baffler (June 4)
Climateer Investing (links to various)
Artificial Intelligence is the Key to Future Growth — Or Stagnation - Climateer Investing (Dec 27)
A Roundup on Robots, Capital-biased Technological Change and Inequality (plus how to tell if a person is a fiduciary)- Climateer Investing (Dec 18)
"The Next Time You Bitch and Moan About the Lack of Jetpacks, Remember Disposable Diapers!" - Climateer Investing (Dec 17)
The Paradox of Profit Margins and Another Look at the Theory of Everything - Climateer Investing (Sept 24)
The Road to Serfdom: Where the Robots Are Taking Us - Climateer Investing (Dec 11)
The theory of everything - Climateer Investing
Enough is enough of the age of consumption - FT (July 4)
And my tech-related stuff (includes refs or features work of others):
In an economy not so far, far away - FT (Dec 28)
The FT Alphaville podcast, with Dylan Grice - FT Alphaville (Dec 21)
The personalised pricing revolution - FT Alphaville (Nov 21)
Whose idea is it anyway – Towards a Leisure Society (Nov 16)
Money as a passion, not a standard - FT Alphaville (Oct 10)
Welcome to the ‘Desert of the Real’ — a postmodern economy – FT Alphaville (Oct 09)
Rubik’s Revolutions - FT Alphaville (Oct 03)
A time of hoarding and inflation fears, 1930s edition – FT Alphaville (Sept 24)
Are UK companies hoarding labour? – FT Alphaville (Sept 12)
How technology is killing the Asian growth miracle – FT Alphaville (Sept 10)
3D Printing: Rise of the machines – FT Alphaville (Aug 10)
Negative rates as a precursor to the death of banking - FT Alphaville (Jul 31)
China flash PMIs — the employment factor – FT Alphaville (July 24)
China as a post capital economy - FT Alphaville (July 12)
On abundance, post-scarcity and leisure - FT Alphaville (Jun 20)
On price stability during an ‘abundance shock’ – FT Alphaville (June 26)
Shopping in the future - FT Alphaville (Jun 14)
Redefining labour – FT Alphaville (Jun 12)
The end of artificial scarcity - FT Alphaville (Jun 03)
Space opera, beyond finance edition - FT Alphaville (Feb 29)
Economics, a space opera – FT Alphaville (Feb 03)
Robots! No Robots! – FT Alphaville
Ahhhh! No robots! – FT Alphaville
The Patent Problem – Wired
Beyond Scarcity – FT Alphaville (series)
On price stability during an ‘abundance shock’ – FT Alphaville
Is that robot going to steal your job? - FT Alphaville (Sept 14)