A new gilded age?

Thomas Piketty, Capital in the 21st Century (Harvard University Press, 2014)

A recurring theme in these blog posts has been the effect of technological change on employment, income distribution and return on capital in the coming decades and the implications of these changes for public policy. To summarise the story so far:

  • We are currently entering a period of rapid technological change. According to Moore’s law, which predicts that computing power doubles roughly every 18 months, we are approaching a period where the exponential effects of this doubling will suddenly become noticeable. We can already start to see science-fiction becoming reality in a number of ways, from ubiquitous video conferencing and tablet computers to self-parking and even self-driving cars and computer programs that can perform tasks that previously required skilled human labour (such as legal document discovery).
  • This technological change will reshape ... Read More

Cutting Red Tape

Following on from my post about the importance of entrepreneurship a couple of weeks ago is a new report from the Institute for Justice on the burdens of occupational licensing. It finds that, in the US, the top 10 worst ranked jobs in terms of average licensing burden are:

  1. Preschool teacher
  2. Athletic trainer
  3. Earth driller
  4. Cosmetologist
  5. Barber
  6. School bus driver
  7. HVAC Contractor
  8. Skin Care Specialist
  9. Pest Control Applicator
  10. Bus Driver

Who knew earth drilling was so heavily regulated? We’ve had some personal experience with excessive licensing requirements: m0y wife briefly considered looking after one of our friends’ children as a way to make a bit of extra money until we discovered that to ‘child mind’ you not only need to be licensed but have an educational qualification in childminding! Because the burden was too high, we lost out on extra income, our friends weren’t able to have a person they already knew look after their child, and ... Read More

A Dented Universe

We’re here to put a dent in the universe. Otherwise why else even be here?
(Steve Jobs)

George Gilder, Knowledge and Power
Tyler Cowen, Average is Over: Powering America Beyond the Age of the Great Stagnation

In 1981, George Gilder published Wealth and Poverty, the book that developed the idea of supply-side economics that dominated economics during the Reagan-Thatcher years. You can tell that he’s been living off this fame for the past 30 years: Knowledge and Power is not a very well-crafted book, and reads more like a series of book reviews than an extended essay. Despite being indisciplined, however, it does contain a compelling thesis: that standard accounts of capitalism fail to adequately appreciate the importance of individual creativity and entrepreneurship.

From Adam Smith and his invisible hand of the market to the present day, economists have modelled the economy on the assumption that it is, at root, a random, mindless process that nevertheless ... Read More