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

Social Immobility

Gregory Clark, The Son Also Rises (Princeton University Press, 2014)

When I first came to Britain ten years ago, one of the things that struck me about British society was the extent to which social class is physically manifested. As the classic sketch with John Cleese, Ronnie Barker and Ronnie Corbett suggests, you literally do look up to the upper classes. Princes William and Harry are both 6’3″, and that’s not unusual: go to any an upper- or “upper middle”- (i.e., rich but not titled) class gathering, and you will be hard-pressed to find anyone of below average height. Similarly, for someone of average height, it is striking to walk around some of the more deprived neighbourhoods in the UK and find that the average height is noticeably shorter. Lamarckian inheritance notwithstanding, the correlation between height and class in Britain suggests that there could be a significant genetic component ... 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