Random reading

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I polished off a couple of paperbacks in a batch Princeton University Press kindly sent me for doing some reviewing: Lost in Thought: The Hidden Pleasures of an Intellectual Life by Zena Hitz, and Why Size Matters: From Bacteria to Blue Whales by John Tyler Bonner. The latter was more my cup of tea – the former is more about spirituality than about reading and writing, and the author’s journey out of academia to a religious community and back again. Why Size Matters (first published in 2006 although this paperback is new) is very similar to Geoffrey West’s (2018) Scale, although shorter and focused on biology and ecology rather than society at large – although it does note the link in Adam Smith between the division of labour and the size of the market.

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The soul of Silicon Valley

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Silicon Valley is a fascinating place. This is partly personal: I almost always have warm, sunny weather there, a treat for visitors from London. There are loads of interesting people to meet. Once you get away from the freeways and undistinguished shed architecture, the countryside is beautiful. I’ve been getting there twice a year, learn a lot, and always enjoy the trips.

It is also of course one of the cultural epicentres of the modern world, and not necessarily for the good. Fairly recently I read The Philosopher of Palo Alto, by John Tinnell, which was a glimpse into how different it might have been. My latest read is Work, Pray, Code: When work becomes religion in Silicon Valley by Carolyn Chen. It’s a really interesting ethnography of tech workers, partly – as the subtitle suggests – looking at how their work has become the nurturing community places of worship used to be; but also at the way versions of Eastern religions have been co-opted by tech firms to make their workforces as productive as can be through effectively mind-altering processes.

The first part of this looks at the wrap-around ‘maternal’ employers, whose HR functions in large part are about ordering in healthy food, providing concierge services, making sure the workplace has a gym and a dentist and yoga classes. Many tech workers hardly ever leave the embrace of their campus or HQ. All their life and their effective family is there. If works is life, no need to worry about their ‘balance’. The HR justification is that this wraparound care prevents burnout and makes life less stressful – although of course expecting fewer hours of work would be less stressful too. Chen points out though that the separation of ‘life’ and ‘work’ has been a phenomenon of the industrial age.

The second part is the use of meditation and mindfulness as a deliberate company technique to ensure employees are focused and always at peak productivity. Executive coaching is part of this; senior or high potential employees are taught how to be their ‘authentic’ selves and discover their purpose and passion (which coincides with raising investment funds or shipping new products). I don’t think I have it in me to be mindful, not that I want to completely mock the whole phenomenon; but there is something deeply creepy and late-capitalism about it being your employer who is concerned with your spiritual well-being and authentic self so that you are passionate about your life/work.

Work, pray, code is a very interesting insight into aspects of Silicon Valley work and life. There are lots of individual stories, which is of course fascinating. I found it cast a thought-provoking light on this strange place that has shaped the modern world.

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An economist’s righteous anger

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I really enjoyed reading Angus Deaton’s Economics in America: an immigrant economist explores the land of inequality. It’s a collection of essays regarding different aspects of the economy, centred on issues of inequality, and also concerning the discipline of economics itself. Many of the essays originated in his ‘Letters from America’ for the Royal Economic Society newsletter, now updated and reorganised. But they are models of clarity and accessibility, and the book would be an ideal read for students, or just people who want to understand better the economic mess we’re in – we, and particularly the US.

For the author’s righteous anger about the deep seated inequalities in America, from historic racial inequalities to the stitch up of citizens by the monopolistic health and pharma industries, or by the successful lobbying of politicians by business, shines out from every page. Many of the chapters cover some aspect of this, and quite a few on the Affordable Care Act and the opioid crisis – one of the factors behind Case and Deaton’s now-classic work on ‘Deaths of Despair’.

In one essay there is a nice tribute to the late Tony Atkinson. I didn’t know him, but it is hard to think of an economist spoken of with more affection by those who did, and his work on inequality and economic welfare was foundational. (Our recent symposium on welfare economics was inspired by him.) Deaton points out that in his Inequality: What Can Be Done (an excellent book too) Atkinson argued that innovations ssuch as self-driving cars or wearables should be vetted for social desirability before being licensed for sale: “As with much else that Tony wrote, I predict this idea will become widely discussed in the near future.”

The book concludes with reflections on economics itself. Deaton writes: “The discipline has becom unmoored from its proper basis, which is the study of human welfare. Lionel Robbins famous definition of economics – the allocation of scarce resources among competing ends – was a wrong turn, a terrible narrowing of scope.” Citing Hilary Putnam, he argues that economics should be a ‘reasoned and humane evaluation of social wellbeing’. The final line: economists need to spend more time with philosophers. I agree.

This is a great read. Highly recommended.

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The future of the factory

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I read my colleague Jostein Hauge’sThe Future of the Factory in proof and never got round to the finished book until now. It’s a very nice synthesis of the impact of four ‘megatrends’ on manufacturing. These four are the rise of the service sector as a share of output, digital automation, globalization and ecological crisis.

After an introductory chapter introducing industrial policy in historical perspective – opening with Alexander Hamilton in life as well as on stage – each trend gets a chapter on how it is shaping industrial activity. One conclusion is that the phenomenon of ‘servitisation’ in manufacturing –  including outsourcing associated high value services – is significant and can lead people to underestimate the importance of manufacturing. The book also argues that the impact of digital automation is exaggerated – it will displace some activities and tasks but there is a lot of hype. It also argues that the retreat from globalisation is similarly over-stated, and the debate disguises power asymmetries between western multinationals and firms in their low or middle income supply chain countries. And the environmental crisis is a further source of this economic and political asymmetry.

The conclusion is that, “in a world of technological change and disruptions, industrialization and factory-based production remains a cornerstone of economic prgoress. Jostein welcomes the recent revival of industrial policies but calls for a focus now on the global South and the place these countries have in the network of production. The book ends with a call for a fairer kind of capitalism than the current model.

All of this is packed into a compact and very readable book. And I’m glad I’m not the only person who saw Hamilton The Musical and wished there had been more economic policy in the show…Screenshot 2024-01-23 at 16.03.49

Perspectives on China

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The New China Playbook: Beyond Socialism and Capitalism by Keyu Jin is quite an interesting read. As I’m not at all a China expert it’s hard for me to evaluate its claims, but the framing is persuasive. This is that the combination of political centralization and economic decentralization is not widely understood and makes China unique. Local officials have strong incentives to encourage local entrepreneurship or ‘inward’ investment from other parts of China. “The link between local growth and political promotion is what makes China’s case unique.” (I like the joke the book recounts: ‘GDP figures roduce officials and officials produce the GDP figures’.) This close public-private relationship is also cemented by the weak public but non-party institutions, meaning businesses have to overcome many barriers through such relationships. She writes: “China has strong state capacity and weak institutions,” which she contrasts to the strong formal instituions but weakening capacity in the US.

The book has some fascinating early chapters on the new phase of state mobilization and also the political/cultural/economic implications of so many Chinese people being only children. On the latter, she argues that it is a psychological burden being ‘only’ because of the expectation that they are the only people able to look after elderly parents. Later chapters go into more familiar territory such as the economy’s debt levels, and the financial system – the book is far more sanguine about the implications for stability than are other commentators. And the final chapter looks at innovation, the country’s impressive ability to adopt, manufacture and diffuse new technologies (“the Chinese are particularly good at making existing technology both better and cheaper”), and its focus on attaining the technology frontier in some areas.

All in all, the book is an optimistic take on China’s economic (and political) model, albeit expressing some reservations. For what it’s worth, the book has stellar back cover praise from Tony Blair, Ken Rogoff and Kai-Fu Lee. It’s well worth a read as a counterbalance to more pessimistic takes, even if one emerges as more sceptical than the author about the strengths or otherwise of the Chinese model.

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