Articles from Syndicated Column "Against the Current" (for Project Syndicate)
The rise of the robots
| Wednesday, February 20, 2013
What impact will automation – the so-called “rise of the robots” – have on wages and employment over the coming decades? Nowadays, this question crops up whenever unemployment rises.
In the early nineteenth century, David Ricardo considered the possibility that machines would replace labor; Karl Marx followed him. Around the same time, the Luddites smashed the textile machinery that they saw as taking their jobs.
Then the fear of machines died away. New jobs – at higher wages, in easier conditions, and for more people – were soon created and readily found. But that does not mean that the initial fear was wrong. On the contrary, it must be right in the very long run: sooner or later, we will run out of jobs.
For some countries, thisContinue reading...
| Tuesday, January 22, 2013
The editor of The Guardian, Alan Rusbridger, has written a book about how he decided to practice the piano 20 minutes a day. Eighteen months later, he played Chopin’s fearsomely difficult Ballade No. 1 in G Minor to an admiring audience of friends. Could anyone have done this? Or did it require special talent?
The nature-versus-nurture debate has been around a long time. It is unresolved because the scientific question has always been entangled with politics. Broadly speaking, those stressing inborn capacity have been political conservatives; those emphasizing nurture have been political radicals.
The nineteenth-century philosopher John Stuart Mill was of the “anyone can do it” school. He was convinced that his achievements were in noContinue reading...
Models Behaving Badly
| Wednesday, December 19, 2012
“Why did no one see the crisis coming?” Queen Elizabeth II asked economists during a visit to the London School of Economics at the end of 2008. Four years later, the repeated failure of economic forecasters to predict the depth and duration of the slump would have elicited a similar question from the queen: Why the overestimate of recovery?
Consider the facts. In its 2011 forecast, the International Monetary Fund predicted that the European economy would grow by 2.1% in 2012. In fact, it looks certain to shrink this year by 0.2%. In the United Kingdom, the 2010 forecast of the Office for Budget Responsibility (OBR) projected 2.6% growth in 2011 and 2.8% growth in 2012; in fact, the UK economy grew by 0.9% in 2011 and will flat-line inContinue reading...
Inequality is killing capitalism
| Wednesday, November 21, 2012
It is generally agreed that the crisis of 2008-2009 was caused by excessive bank lending, and that the failure to recover adequately from it stems from banks’ refusal to lend, owing to their “broken” balance sheets.
A typical story, much favored by followers of Friedrich von Hayek and the Austrian School of economics, goes like this: In the run up to the crisis, banks lent more money to borrowers than savers would have been prepared to lend otherwise, thanks to excessively cheap money provided by central banks, particularly the United States Federal Reserve. Commercial banks, flush with central banks’ money, advanced credit for many unsound investment projects, with the explosion of financial innovation (particularly of derivativeContinue reading...
Happiness is Equality
| Wednesday, October 24, 2012
The king of Bhutan wants to make us all happier. Governments, he says, should aim to maximize their people’s Gross National Happiness rather than their Gross National Product. Does this new emphasis on happiness represent a shift or just a passing fad?
It is easy to see why governments should de-emphasize economic growth when it is proving so elusive. The eurozone is not expected to grow at all this year. The British economy is contracting. Greece’s economy has been shrinking for years. Even China is expected to slow down. Why not give up growth and enjoy what we have?
No doubt this mood will pass when growth revives, as it is bound to. Nevertheless, a deeper shift in attitude toward growth has occurred, which is likely to make it aContinue reading...