Sunday, July 21, 2013

The Future

I just finished reading The Future: Six Drivers of Global Change by Al Gore. I think everyone should read this book1. It reminds me of when I first read The World is Flat2 and, while I don't think it will have the popularity or impact that Friedman's book did, I think it should.

As you might expect, the book covers six major areas of change and there's no way a blog post can do it justice (which is why you should read it). Let me preface this by acknowledging that I do not claim to have any great understanding of economics3, so this is very much just a lay-person's perspective on this, but there were two issues he talked about that have been troubling me for a while (in addition to climate change), and I wanted to think out loud a bit about them here.

The idea of creative destruction, while initially a criticism of capitalism, has in recent years been looked on more favorably as a way to move forward, getting rid of older, obsolete industries, products or practices and replacing them with newer, more successful ones. Ever since the Luddites (and perhaps before), some folks have complained about new technological innovations replacing workers, and others have argued that overall it's a good thing and frees up workers to take on more interesting, meaningful and productive jobs. Certainly Friedman's work and Daniel Pink's A Whole New Mind, to name just two of many popular works, have touched on that second interpretation, and I've generally felt the same way (let automation take care of the grunt work and free us up to do more interesting, creative things).

But lately I've been wondering about that premise. It seems to me, and Gore talks about this in his book, that in some ways we are running out jobs. Given the increasing ability of various technologies to automate processes, including many we didn't think were possible to automate, and the ability of software and the Internet to remove the need for many intermediaries, where exactly are the new jobs going to come from to replace the ones that have been eliminated? What are people going to do (in terms of employment and earning a living)?

And this leads to the second thing I've been wondering about, and that Gore also talks about in his book: the idea of a growth economy. (Again, repeating the disclaimer about my lack of economic knowledge.) Partially because of my lack of knowledge, but also based in general on what I have been reading, I've wondered more and more if our notions of the economy are really just one big Ponzi scheme. As long as their are new people on the planet, and untapped markets, we can grow and prosper: the pie gets bigger. But what if we can't; and what if it doesn't?

Everything I read about recovering from The Great Recession talks about the need for growth. Every politician and economist - of just about every political persuasion - talks about growth as the holy grail, and cheers any signs of renewed growth and despairs when that growth is too small. But what if "growth" - at least as we've always defined it in economic terms - isn't sustainable? What if the second half of the twentieth century, and particularly The Great Moderation, were simply an anomaly4?

Is there a path forward for a sustainable economy and society that involves little or no growth? Again, I'm not knowledgeable enough about economics to speak to this, but that's certainly not a theory I've ever been introduced to, yet it seems to be a theory - and a practice - that we perhaps need. And, to tie this at least nominally back to education, if (and that's a big if) this has any merit, how should we be preparing our students for a future that isn't based on the classical economic definition of growth?

Update 7-23-13: See this video on how the Tesla is made as an example of the progress automation has made. Again, I think this is a good thing, but I'm just not sure how it works in terms of traditional employment economics.

1 I know some folks reading this blog may be tempted to not read it simply because of the politics of the author. I think that would be a mistake.

2 I know it's currently fashionable to make fun of anything Thomas Friedman says, but I still think The World is Flat was more right than wrong, and it certainly brought many issues to the forefront of the public's consciousness in a way that no one else had.

3 Feel free to tutor me on economics (nicely) in the comments. But as far as I can tell, professional economists really don't have any idea of how economics works either. How else can you have what appears to be very intelligent, thoughtful folks argue for the exact opposite policies, or people so badly miss economic predictions?

4 I can't do this justice, but lots of reasons that might be so, including: the unique position of the U.S. coming out of WWII, technological and social innovation in the U.S. and the world as a whole, healthcare and quality of life issues, population, productivity, and market growth, etc.

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