Random notes from a discussion of Tyler Cowen’s Average is Over:
Michael Mandel is optimistic. He thinks that the baby boomers are about to retire in droves (in part because of health reasons), helping to solve the unemployment problem of the young. Tyler, Robin Hanson, Megan McArdle, and I are unpersuaded.
Tyler pictures an economy evolving over the next twenty years to one with a slice of high earners (the 20 percent or so whose skills complement the ever-expanding power of computers) and then a large group that lives comfortably but without a financial cushion to protect against adverse shocks to health or other major risks.
Matt Yglesias wonders how, in a world that requires technical skill and social skills, those of us in the room have survived. It seems that most work for think tanks, newspapers, and other non-profits. Tyler replies that our presence in the room is indicative of marketing skills. Each of us has proven adept at marketing, with wealthy donors as our consumers in most cases. Steve Teles points out that as society’s rich accumulate wealth beyond what they can consume, their philanthropic ideas will, for better or worse, allocate society’s resources. Afterward, it occurs to me that this suggests that there will emerge a toady class, meaning people whose work in one way or another flatters the wealthy.
James Manzi points out that many people work in fields where output is hard to evaluate, such as education and health care, and I would add that entry to these fields is restricted by credentials. Tyler thinks that as we gather more data we will overcome our inability to evaluate performance sooner than people expect. If that is correct, then the credentials cartel would seem to be destined to fall. I believe that a lot of the thesis of his book stands or falls on whether such data-driven evaluation systems pan out. He would agree that we are far away right now, but he would argue that progress is fast.
What most concerns the discussants, including McArdle, William Galston, Jonathan Rauch, and Brink Lindsey, are the social implications of losing the middle class. (Hanson comments on this focus.) Tyler insists that societies will not fracture, nor will redistributionist demagogues take power. Factors favoring stability include aging, surveillance technology, the skill of the rich at controlling the political environment, nativism, NIMBYism, and the basic comfort achieved by the lower class. He points out that Britain and Germany are farther along than the U.S. in the growth of the new lower class, and their societies appear to be stable–Merkel just won re-election by a wide margin.
Tyler says that in the long run mood-altering drugs may be a solution. Teles suggests that Tyler’s next book will be The Great Medication.
So if I want to have toadies in Tyler’s Brave New World, I should learn how to make and sell soma…
So–have the redistributionist demagogues not already taken over, for practical purposes? Seems to me they’ve (in the US version, I mean) been pretty successful. What could consitute taking over, I wonder–no protest from critics? How much does ineffective protest from critics count?
The low savings rate of baby-boomers might counteract the normal retirement schedule. Health issues have to be severe before you’re willing to live in near poverty on Social Security benefits alone. I could be wrong, but there are several trends which work in opposite directions on this matter… many people would like to retire as young as possible, and the boomers are an affluent generation (on average). Longer life spans and the effects of the financial crisis would delay things, though. It will be interesting to see how this plays out.
The young, though, do have to make this way in the world. There are many ways to acquire skills, as you have eloquently pointed out, that don’t involve traditional education. I suspect that there may be an added component to online education that will narrow-cast specific skills to people, not just college courses. This might mitigate the bifurcating levels of income in society.
Tyler needs to read more about the Totenham riots.
Steve Teles points out that as society’s rich accumulate wealth beyond what they can consume, their philanthropic ideas will, for better or worse, allocate society’s resources. Afterward, it occurs to me that this suggests that there will emerge a toady class, meaning people whose work in one way or another flatters the wealthy.
I imagine someone pointed out this is already happening in education, with the various “billionaire philanthropists” starting up charter schools, funding their favorite ideas. If you watch for long enough, you can see think tanks starting to adjust their presentation and adopt new strategies to get in on some of that money. We already have the case in which someone who wants to start a charter school can convince Bill Gates or the like of the awesomeness of the plan, get seed money, and then go to the government for the rest. Those who can’t convince a philanthropist, no seed funding. This is likewise true for someone who, say, wants to do some research on the impact of technology on education and gets a grant from one or more billionaire funds. But not true for someone who, say, wants to evaluate the impact of IQ on educational outcomes in k-8.
So to carry on your speculation, I see the rise of more think tanks that exist to take money from the philanthropists to help push their ideas, and more grants that individuals (toadies) can use to “start a business” (except it will most likely be quasi or entirely public) if they tell the right story to the right rich folks.
I think the focus on inequality is misguided.
The skills that everyone agrees will be the drivers of this inequality, ie the use and immersion into digital technology, are mostly universal among under-25s. The inequality will not be among people in the same generation but rather between generations.
So maybe you will have a lot of unemployed 40 year olds who cannot use a computer and whose skills are not mostly unnecessary. But the society won’t fracture between “programmers” and “non-programmers”, since even the nerdiest of technology startups eventually needs a PR manager and a sales team. These guys need to be “tech-aware” but they don’t need to have programmed for years.
Of course, this is so long as we continue to build the VC capital market which drives these new jobs.
An make no mistake, Obama rises out of the toady class — read his biography.
Obama is the first toady class President.
Gabriel Puliatti sounds like what you’d get if you ate a Thomas Friedman column and then forced yourself to barf.