Giles Wilkes

Midway through Ryan Avent’s “The Wealth of Humans”, I found myself marking “H” in the margin, to stand for heresy, so thick and fast do the counterintuitive insights arrive. Here are some. Money is not what motivates work; the best workers care little for a share of profits. State-led redistribution would do little harm, and has barely been attempted. My favourite: a sensible route to a secure living in the future is to aim not for high productivity, but for some extravagantly unproductive niche such as making artisanal cheese, where low productivity is a selling point.

This entry was posted in change. Bookmark the permalink.

One Response to Giles Wilkes

  1. shinichi says:

    Blessed are the cheesemakers

    The Economist’s “Free Exchange” columnist ponders our professional future

    https://www.economist.com/news/books/21707385-blessed-are-cheesemakers


    The Wealth of Humans: Work and its Absence in the Twenty-first Century

    by Ryan Avent

    None of us has ever lived through a genuine industrial revolution. Until now.

    Digital technology is transforming every corner of the economy, fundamentally altering the way things are done, who does them, and what they earn for their efforts. In The Wealth of Humans, Economist editor Ryan Avent brings up-to-the-minute research and reporting to bear on the major economic question of our time: can the modern world manage technological changes every bit as disruptive as those that shook the socioeconomic landscape of the 19th century?

    Traveling from Shenzhen, to Gothenburg, to Mumbai, to Silicon Valley, Avent investigates the meaning of work in the twenty-first century: how technology is upending time-tested business models and thrusting workers of all kinds into a world wholly unlike that of a generation ago. It’s a world in which the relationships between capital and labor and between rich and poor have been overturned.

    Past revolutions required rewriting the social contract: this one is unlikely to demand anything less. Avent looks to the history of the Industrial Revolution and the work of numerous experts for lessons in reordering society. The future needn’t be bleak, but as The Wealth of Humans explains, we can’t expect to restructure the world without a wrenching rethinking of what an economy should be.


    MIDWAY through Ryan Avent’s “The Wealth of Humans”, I found myself marking “H” in the margin, to stand for heresy, so thick and fast do the counterintuitive insights arrive. Here are some. Money is not what motivates work; the best workers care little for a share of profits. State-led redistribution would do little harm, and has barely been attempted. My favourite: a sensible route to a secure living in the future is to aim not for high productivity, but for some extravagantly unproductive niche such as making artisanal cheese, where low productivity is a selling point.

    These heresies have a point beyond provocation. The usual pattern through history is for enlightened politics and the grinding of the economic gears to combine, eventually, to spread the gains from technological progress. There will be pain during transitions, but all will be better in the end. But Mr Avent, a senior editor and economics columnist at The Economist, now sees a spiralling abundance of human labour overwhelming economics as an equilibrating force. Too much will be automated, including many jobs hitherto the preserve of the well-educated, and too many new workers will become available from the developing world. Labour may indeed be a lump, metastasising so fast that politics will prove unable to handle it.

    The argument requires a work as ambitious as implied in the Smithian echoes of the title Mr Avent has given his book. The author leaps from his own childhood experience of work (mowing the lawn, raking up leaves) to the century-long, global labour trends just starting. In building his thesis he dares to pronounce on topics as various as the course of technology, secular stagnation, spatial economics and the rage against globalisation—each of which might command a large volume of its own.

    What saves this work from overreach is the insistent return to the problem of abundant human labour. The thesis is rather different from the conventional, Malthusian miserabilism about burgeoning humanity doomed to near-starvation, with demand always outpacing supply. Instead, humanity’s growing technical capabilities will render the supply of what workers produce, be that physical products or useful services, ever more abundant and with less and less labour input needed. At first glance, worrying about such abundance seems odd; how typical that an economist should find something dismal in plenty.

    But while this may be right when it is a glut of land, clean water, or anything else that is useful, there is a real problem when it is human labour. For the role work plays in the economy is two-sided, responsible both for what we produce, and providing the rights to what is made. Those rights rely on power, and power in the economic system depends on scarcity. Rob human labour of its scarcity, and its position in the economic hierarchy becomes fragile.

    A good deal of the “Wealth of Humans” is a discussion on what is increasingly responsible for creating value in the modern economy, which Mr Avent correctly identifies as “social capital”: that intangible matrix of values, capabilities and cultures that makes a company or nation great. Superlative businesses and nation states with strong institutions provide a secure means of getting well-paid, satisfying work. But access to the fruits of this social capital is limited, often through the political system. Occupational licensing, for example, prevents too great a supply of workers taking certain protected jobs, and border controls achieve the same at a national level. Exceptional companies learn how to erect barriers around their market. The way landholders limit further development provides a telling illustration: during the San Fransisco tech boom, it was the owners of scarce housing who benefited from all that feverish innovation. Forget inventing the next Facebook, be a landlord instead.

    Not everyone can, of course, which is the core problem the book grapples with. Only a few can work at Google, or gain a Singaporean passport, inherit property in London’s Mayfair or sell $20 cheese to Manhattanites. For the rest, there is a downward spiral: in a sentence, technological progress drives labour abundance, this abundance pushes down wages, and every attempt to fight it will encourage further substitution towards alternatives.

    At this stage, I found the virtuosity with which Mr Avent knocked down possible solutions disquieting. Take better skills, for example, the mantra of every aspirational politician. More education is a good thing in itself, perhaps, but no solution to labour abundance; it just adds to the heap of effective labour, and drives down its bargaining power more. How about restoring organisation and rights to the labour force? No, capital is too versatile and slithery to tolerate this for long: “troublesome labour tends to encourage the deployment of robots, whether the setting is a factory in Shenzhen or a car on California streets”.

    It is possible to imagine a suite of ameliorative policies—some combination of a high welfare floor, more open borders, enlightened unions in the German mode, a basic income or a share in the nation’s capital stock—but any flicker of optimism a reader might feel runs straight into politics, where Mr Avent’s pessimism is at its most profound. Voters, despite wallowing in technological abundance, are rattled by globalisation and have seldom felt less generous. Redistribution is unpopular outside determinedly homogenous societies. What remains that is scarce and economically valuable will be fought over, particularly that most precious of rights, the citizenship of somewhere rich. Exclusion wins over openness.

    I do not know how to respond to such pessimism. Surveying the state of politics today, Mr Avent writes: “We can but hope this era will prove a fleeting one”. By then he has provided too many iron mechanisms that crush such a hope. Haphazard obstacles to the workings of the market can preserve some advantage for the few, but logically cannot for the many. Technology will steadily wear away the remaining opportunities for meaningful work, and politics will forestall the change in social mindset needed to help those who lose out.

    The last chapter assays some brave, liberal cheer, calling for an upsurge in human empathy. Humans have an urge to help others like themselves, and that should mean all other humans. Those of us doing well from this world of abundance should recognise our good fortune and be generous with it. A wonderful thought, but not easy to hold for long in the year of Brexit and Donald Trump.

Leave a Reply

Your email address will not be published.