Tag Archives: inequality

Science fiction economics

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Gavin Kelly of the Resolution Foundation has written a very informative and balanced article in today’s Observer about technology and jobs – it’s more balanced than the headline (“The Robots Are Coming!”). He discusses the gloom about the hollowing out of good, ordinary, middle income jobs as featured in Tyler Cowen’s fascinating [amazon_link id=”0525953736″ target=”_blank” ]Average is Over[/amazon_link] and the forthcoming [amazon_link id=”0393239357″ target=”_blank” ]The Second Machine Age[/amazon_link] by Erik Brynjolfsson and Andrew McAfee; but also some of the reasons for not assuming we’re heading straight for the dystopia of a society divided between a minority of highly skilled, high earners and a lumpenproletariat earning minimum wage for service sector jobs the machines can’t quite do yet.

[amazon_image id=”0393239357″ link=”true” target=”_blank” size=”medium” ]The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies[/amazon_image]

I’m in the latter camp, although not at all sanguine about the social and institutional adjustments that will need to be made as we glide into the Age of Robots. These adjustments are everything: technology drives prosperity and progress (old fashioned idea, I know), but society determines how the benefits are shared.

In the article Alan Manning (author of a book with one of the best titles ever, [amazon_link id=”0691123284″ target=”_blank” ]Monopsony in Motion[/amazon_link]) refers to ‘science fiction economics’, a marvellous concept. [amazon_link id=”1857988124″ target=”_blank” ]Blade Runner[/amazon_link] is the obvious reference for the robots-are-coming thesis, but Bruce Sterling’s [amazon_link id=”0441374239″ target=”_blank” ]Islands in the Net[/amazon_link] leapt to my mind as the best example. Some of William Gibson’s recent novels, of course, such as [amazon_link id=”0399149864″ target=”_blank” ]Pattern Recognition[/amazon_link].

Any other suggestions for the best economic analysis through the medium of science fiction?

[amazon_image id=”0441374239″ link=”true” target=”_blank” size=”medium” ]Islands in the Net[/amazon_image]

Those 21st century inequality blues

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Thomas Piketty is well known for having (with Emmanuel Saez and others) assembled long-run (18th century onwards) data on income and wealth in capitalist economies. He has now used the findings in a book forthcoming in English in March from Harvard University Press, [amazon_link id=”067443000X” target=”_blank” ]Capital in the 21st Century[/amazon_link]. It’s recently out in French, [amazon_link id=”2021082288″ target=”_blank” ]Le capital au XXIe siècle[/amazon_link].

There is a set of slides summing up the message (pdf). In short, he predicts that the concentration of wealth could exceed 19th century levels due to the combination of slow growth and high net-of-tax returns as a result in part of tax competition. The charts he presents suggest that the 20th century – fast per capita growth and an expanding middle class – might be an historical aberration.

He warns: “The history of income and wealth inequality is always political, chaotic and unpredictable; it involves national identities and sharp reversals; nobody can predict the reversals of the future.” Still, a global progressive wealth tax would be a good idea, he reckons. I can’t see the globocrats and oligarchs agreeing, however.

[amazon_image id=”067443000X” link=”true” target=”_blank” size=”medium” ]Capital in the Twenty-First Century[/amazon_image]

The publication of the book will be an event – I’m looking forward to it. My thanks to @went1955 for pointing out the slides.

went1955
Inequality & Capitalism in the Long-Run — Slides lecture Thomas Piketty — http://t.co/yMaLyFPnLk (↬ FT Alphaville)
17/12/2013 09:10

Intellectual fuel for modern feminists

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There is one welcome side-effect of the unspeakable online threats made to Caroline Criado-Perez over her successful campaign to get Jane Austen on the next £10 note. It is the realisation that feminists, male and female, still have a lot of work to do.

Over at the Teen Economists blog today Viva Avasthi has reviewed Virginia Woolf’s [amazon_link id=”0141183535″ target=”_blank” ]A Room of One’s Own[/amazon_link], still a timely essay. The classic feminist text that opened my eyes in the 1970s was Simone de Beauvoir’s [amazon_link id=”009974421X” target=”_blank” ]The Second Sex[/amazon_link].

Recently Sheryl Sandberg’s [amazon_link id=”0753541629″ target=”_blank” ]Lean In: Women, work and the will to lead[/amazon_link] has gained a lot of attention. It’s quite good but puts all the onus for improving women’s economic standing on their individual actions; it omits discussion of the institutional barriers women face to progress at work and in society.

Another fairly recent book, startling in its findings, is [amazon_link id=”069108940X” target=”_blank” ]Women Don’t Ask[/amazon_link] by Linda Babcock and Sara Laschever. It reports research showing that part of the reason women’s pay is lower than that of comparable men is that, indeed, individual women need to ask for promotions and raises. The trouble is that when they do, they are disliked – it’s unfeminine, aggressive to put yourself forward, and male colleagues and bosses find other ways to punish women who do ask.

[amazon_image id=”069108940X” link=”true” target=”_blank” size=”medium” ]Women Don’t Ask: Negotiation and the Gender Divide[/amazon_image]

Other books include Arlie Hochschild’s [amazon_link id=”0143120336″ target=”_blank” ]The Second Shift [/amazon_link]on the burden of unpaid domestic work, especially childcare, on working women; and Susan Faludi’s [amazon_link id=”009922271X” target=”_blank” ]Backlash: The Undeclared War Against Women[/amazon_link] – old now but the backlash seems fiercer still now; and of course other classics of the 70s and earlier such as [amazon_link id=”0007205015″ target=”_blank” ]The Female Eunuch[/amazon_link], [amazon_link id=”1860492827″ target=”_blank” ]The Women’s Room[/amazon_link], [amazon_link id=”0860680290″ target=”_blank” ]Sexual Politics[/amazon_link] etc.

There is of course also a large scholarly literature in economics on gender discrimination such as Claudia Goldin’s research, Heather Joshi‘s, Betsey Stevenson’s, and much more. Enough to know that it’s time to act again.

Reading about inequality

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In a post on the Oxfam blog, Nick Galasso has suggested three books about income inequality. They are Branko Milanovic’s [amazon_link id=”1459608151″ target=”_blank” ]The Haves and the Have-Nots[/amazon_link], [amazon_link id=”1416588701″ target=”_blank” ]Winner-Take-All Politics[/amazon_link] by Jacob Hacker and Paul Pierson and Chrystia Freedland’s [amazon_link id=”1846142520″ target=”_blank” ]Plutocrats[/amazon_link]. These are billed as summer reading.

[amazon_image id=”1846142520″ link=”true” target=”_blank” size=”medium” ]Plutocrats: The Rise of the New Global Super-Rich[/amazon_image]

For further reading, I’d add an earlier book by Milanovic, [amazon_link id=”0691121109″ target=”_blank” ]Worlds Apart: Measuring International and Global Inequality[/amazon_link]; Thorstein Veblen’s [amazon_link id=”0199552584″ target=”_blank” ]The Theory of the Leisure Class[/amazon_link] (albeit skimming the denser parts – he wasn’t a good writer); the papers by Emmanuel Saez and Thomas Piketty on the historical data; [amazon_link id=”0718197380″ target=”_blank” ]The Price of Inequality[/amazon_link] by Joseph Stiglitz; [amazon_link id=”0805078541″ target=”_blank” ]The Status Syndrome[/amazon_link] by Michael Marmot; and [amazon_link id=”0300089538″ target=”_blank” ]Mind the gap: hierarchies, health and human evolution[/amazon_link] by Richard Wilkinson (but not, for my money, The Spirit Level; I know it has been revised in response to critiques but I was irrevocably put off by the first edition).

A policy no-brainer

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Some years ago it was my privilege to be involved with some work with James Heckman, commissioning him to look at skill policies in Scotland (the paper is published in [amazon_link id=”0691122563″ target=”_blank” ]New Wealth for Old Nations[/amazon_link]). So I’ve been aware of his absolute passion – this is no overstatement – for directing policies to help ensure children have the best possible chances in life. His careful econometric work, for which he won (with Daniel McFadden) the Nobel memorial prize in economics in 2000, identifies the causes of later disadvantage as lying in children’s earliest years, and in the development of non-cognitive skills and emotions as well as cognitive skills, on which so much policy attention is focused.

This work is encapsulated in a new Boston Review book he has written, [amazon_link id=”0262019132″ target=”_blank” ]Giving Kids a Fair Chance (A Strategy That Works)[/amazon_link], which includes as always some responses to Prof Heckman’s essay. The discussion is US-centric, but the analysis certainly applies elsewhere. The strategy promised in the subtitle is: “that predistribution – improving the early lives of disadvantaged children – is far more effective than simple redistribution in promoting social inclusion and, at the same time, at promoting economic efficiency and workforce productivity. Predistributional policies are both fair and economically efficient.” This is a rare and worthwhile combo – although, as he would point out, it does take the state into family life in ways that can feel uncomfortable, even when the families in question are impoverished or chaotic or damaged.

The responses make some good points. Emphasising early interventions should not make policy-makers give up on later interventions. Appreciating non-cognitive skills should not lead to the patronising and damaging assumption that children from poor backgrounds can’t make the grade academically. One contributor takes issue with Heckman’s emphasis on poor mothering rather than poor parenting, noting the damage caused by absent fathers.

Still, I agree with Carol Dweck’s summing up: “His review of the scientific evidence is compelling and makes the case that parental training and educational enrichment in the early years have critical and lasting effects on children.” There are not many areas of public policy where the evidence is so clear and experts from across the disciplines have such a high degree of consensus. Politicians have no excuse for not acting on it.

[amazon_image id=”0262019132″ link=”true” target=”_blank” size=”medium” ]Giving Kids a Fair Chance (Boston Review Books)[/amazon_image]