Vint Cerf is a serious guy or so I thought I was entitled to believe – he’s one of the early architects of the internet. Anyway, with David Nordfors he’s disrupting unemployment. How? He’s got this amazing idea for an internet platform to match people who want to work with people who want work done for them. Capiche?
Today there is a product or service being developed for every possible need and desire. Can the economy develop valuable jobs for every person, letting them do something that fits them like a tailored suit, creating the highest possible value and satisfaction for everyone involved? Then there will be an infinite number of job possibilities for a limited amount of people. People will be the scarce resource, not jobs. Imagine instead of getting a job because you can do something that other people (or machines) can do, you get a job because you are special in a way that creates real value for other people.
Sounds so simple it makes you kick yourself for not seeing it. Demand? Supply? Skills? Their relation? The disutility of labour for those at the bottom of the heap? The utility of labour for those at the top? Centuries of worry about inadequate demand for lower skilled workers just melts away before the power of Digital Disruption. If only we had platforms for matching job seekers with employers right now, why we’d be pretty much over the problem. Oh wait . . .
Anyway, perhaps you can see more in this extraordinary essay than I can. If so please sing out in comments below. We are expanding the fleet of prizes from the Merc Sports and Rooter the PV to Bronwyn the helicopter, so we’ve certainly thrown the switch for this one.
But that’s not all.
Why all this disruption is whisking away capitalism itself. Yes Siree. As Paul Mason explains:
Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism.
Now you can read the article in detail if you like. Again, I’d be pleased if you did, but being sent to this article by several people who asked what I thought I applied a rule I’ve applied for some time – and which Noah Smith appears to apply too – which is that when you get to the point that you think an author is seriously wasting your time without adding much – just move on. So I only got to the first two major non-sequiturs in the article on which much of the author’s case is built. But if you think I’ve been too hasty, again, read on and set me straight in comments. It’s quite a lengthy article by the standards of such things. But the fact is that these foundational non-sequiturs are not just the foundation of a longish Guardian article. They’re the foundation for a whole book.
The author tells us that “information is corroding the market’s ability to form prices correctly”. I think the claim is that information itself is non-rival – costless to reproduce. It was certainly part of Hayek’s case for capitalism that the information in prices (which is not sold but distributed freely) enables the market to price better than otherwise. But apparently not.
Saying that economics is built on scarcity is not true either. Economics focuses its gaze on the scarce and some of the slogans for defining economics say that economics is the study of the use of scarce resources to achieve given ends. But at the very outset of economics Smith’s discussion of the value of water versus diamonds (one is useful and free, the other useless and expensive) captures an understanding that things that are not scarce have low (including possibly zero) price. I could go on, but I leave that to you dear reader.
Just because someone did some pretty serious reasoning, or had a flash of inspiration once, does not mean their future thinking will be of the same value. Even Einstein lost the plot in his later years.
Peoples perspective can change the value of most things, the example given of diamonds a perfect example. A pretty bauble to some, diamond is an indispensable tool to others.
I have always valued highly those who think for a living. However the older I get the more I value the physically productive. Humanity would be no worse off if we had never seen a nuclear physicist, but we would all be much poorer if there had never been a blacksmith.
In both of these, of course, the combination of amusement and annoyance the reader feels is not because the writer is, through ignorance, not saying anything new, but the breathless tone that indicates that he thinks it is new.
On that score, I particularly like the Paul Mason one – there’s a certain 19th century bearded economist whose scribblings are still in print that he might care to read.
The Paul Mason piece has a lot of good stuff in it that rang true with my experiences, as the left flails around for meaning in a world where organised labour is demoralised and disorganised.
His formulation of “the network and the hierarchy” reminded me strongly of Eric S. Raymond’s The Cathedral And The Bazaar – this is a good thing, even if Mason didn’t give ESR a shout-out, since there is a lot of excellent meat in ESR’s essay/book which it is valid to extend to economics.
His reasoning, however, is rather incomplete, which I suppose is to be expected in what is a teaser for the book that he wants you to buy. Without having read the book, I suspect that there will be at least one major flaw in it: how to describe the final transition between the non-economic economy and the actual economy that currently subsidises all this free time that privileged Westerners use to update Wikipedia and do all these “postcapitalist” things Mason identifies. The easy criticism is that postcapitalism is not post capitalism at all, it’s just the petty bourgeoisie getting richer and enjoying themselves making up jobs for themselves that they don’t get paid for. Rich white people play-acting at being historians, journalists, or even economists who are able to do these things for free because their lives are subsidised by jobs performed by relatives in the “real” economy is all very well, but you can’t base an economy on that no matter how many beautiful words you use to describe it.
If Mason’s ultimate vision is of the state providing the Feed, which is a word science fiction authors use for the raw materials that the state in a future society will pump out through pipes to every home for use in their 3D printers to make whatever they like to furnish their lifestyle, and the “real” economy being 100% automated so no one actually has a real job… then he might be believable. He hints at this at parts in his screed. Nonetheless, it’s not particularly novel.
If he’s expecting us to believe that once the robots take over from the proletariat, there will be any economy left… count me out. If the economy is built on reputation and prestige, because material goods are infinitely abundant and scarcity has been abolished, I would argue that it’s not economics any more. Facebook is not an economy.
I read some of the Mason article, and thought it had about the same hand-waving to substance ratio as The Cathedral and the Bazaar. Life’s too short, especially at my age.
I was going to respond to this post when I read the before-the-fold bit, Nicholas, only to find that Derrida Derider has said all that needs to be said (and very ‘economically’, too).
But I would like to pursue my ‘grail’ and ask you whether either, or both, of Cerf and/or Mason is “the Left”. Is that (to import a different post) what the ‘profound changes in being on the left’ have brought us to ?
No idea GB.
Hmmm. You expect he would present his most convincing killer evidence at the beginning. “The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.” NGO’s have been doing stuff for free for a long time. So have the Salvo’s.
Wiki is a problematic example though (of what btw?). I like Wiki and the fact that it grew from nothing. Just like the VFL before men in suits completely fucked it up (http://clubtroppo.lateraleconomics.com.au/2006/09/24/they-built-a-macdonald%E2%80%99s-on-uluru/). Lots of stuff if produced for free. Most music for a start. Always was. But another pertinent point is that none of the information on Wiki is reliable (unless you are the environment minister). I know that many of the basic definitions of mathematical statistics are plain wrong (students have asked me about the confusing posts). Don’t ask me to point to an example because it will have changed from last week. It is nothing like an encyclopedia.
“Almost unnoticed, in the niches and hollows of the market system, whole swaths of economic life are beginning to move to a different rhythm. Parallel currencies, time banks, cooperatives and self-managed spaces have proliferated, barely noticed by the economics profession (?http://economics.com.au/?p=9864) and often as a direct result of the shattering of the old structures in the post-2008 crisis.”
Post 2008 has nothing to do with it. Where is the direct connection?
“You only find this new economy if you look hard for it.” People do look REALLY hard for evidence to support their own biases. OK. I am convinced Nick. I will stop reading.