Domo Arigato Mister Roboto!: Cardiff Garcia Asks a Question About Growth, Inequality, Malthus, and History
Yes: the title is stolen from Paul Krugman, and from Styx--it is too good not to steal…
Cardiff Garcia writes:
The history of the robot future’s future history: The graph represents three decades of US middle class employment shrinking…. Frank Levy… and Richard Murnane….
The hollowing-out is… consistent with the idea… [of]computer substitution…. Low wage work--Personal Care, Personal Services, Food Preparation, and Building and Grounds Cleaning--have all grown… involve non-routine physical work that is hard to computerize. Technicians and Professional and Managerial Occupations also have grown… involve abstract, unstructured cognitive work that is hard to computerize…. Machine Operators, Production, Craft and Repair Occupations, Office and Administrative… have declined… [as] routine work… [following] deductive or inductive rules and so were candidates for computer substitution….
And the BLS expects these trends to roughly continue….
Here’s a passage from Robert C Allen’s Global Economic History: A Very Short Introduction….
The rate of economic growth achieved in the century after 1760 (1.5% per year) was very low by the standards of recent growth miracles…. However, Britain was continuously extending the world’s technology frontier…. The great achievement of the British Industrial Revolution was that it led to continuous growth…. Technological change was the motor… famous inventions like the steam engine, the machines to spin and weave cotton, and the new processes to smelt and refine iron and steel… simpler machines that raised labour productivity in unglamorous industries like hats, pins, and nails… new English products, many of which, like Wedgwood porcelain, were inspired by Asian manufacturers…. Engineers extended the 18th-century mechanical inventions across the board. The steam engine was applied to transportation…. Power-driven machinery… was applied to industry generally.
A question for historians of economic thought: If you had asked economists in 1759 whether such a fundamental shift was ever likely to happen, would they have thought the possibility ludicrous? Would they have argued that in the 12,000 years since the dawn of agriculture, humanity had yet to escape the Malthusian Trap--and therefore why believe that such an escape was even possible?
What about in 1780? In 1830? 1850? At what point would it have been clear that the world had changed, permanently? What would have tipped them off? (I’m guessing it wasn’t the Wedgwood porcelain.)
Well, Thomas Robert Malthus himself in 1795 certainly believed--that was the entire point of his Essay on Population--that no such escape was possible: in Malthus's view, what human societies needed was autocracy, patriarchy, orthodoxy: priests who would teach that premarital sex landed you in hell, fathers who would withhold their consent from their daughters' marriages until the prospective son-in-law was well-enough established to guarantee her a middle-class existence , and a strong king to keep the mob from plundering and destroying what wealth there was, and if you had all three there was a chance that you could prevent the growth of the surplus population that would land a nation in misery. Hence, Malthus argued, the entire Enlightenment project that undermined the authority of kings, fathers, and priests was destined to produce nothing but disaster. And Malthus held firmly to that belief his entire life.
And John Stuart Mill, as late as the final 1873 edition of his Principles of Political Economy, did not believe that humanity--even British humanity--had escaped. He did not believe that all the inventions had lightened the toil of a single worker. Why not? Because of an absence of birth control fertility was not yet under the conscious control of the human race and so the Malthusian Devil was still loose. Mill, however, thought that escape was possible: all you needed to do was break the authority of kings, priests, and fathers and let democratically-elected governments encourage the use of artificial means of birth control, and the task would be accomplished.
When we read John Maynard Keynes's Economic Consequences of the Peace, written in 1919, we find Keynes musing about the Malthusian Devil, its perhaps-temporary chaining during the era of the First Globalization 1870-1914, and his fears that the Malthusian Devil will be unchained a failure to properly manage the political-economic task of post-Great War reconstruction to restore the smooth operation of the very delicate global economic mechanism:
Chapter II: Before 1870 different parts of the small continent of Europe had specialized in their own products; but, taken as a whole, it was substantially self-subsistent. And its population was adjusted to this state of affairs. After 1870 there was developed on a large scale an unprecedented situation, and the economic condition of Europe became during the next fifty years unstable and peculiar. The pressure of population on food, which had already been balanced by the accessibility of supplies from America, became for the first time in recorded history definitely reversed. As numbers increased, food was actually easier to secure. Larger proportional returns from an increasing scale of production became true of agriculture as well as industry….
In this economic Eldorado, in this economic Utopia, as the earlier economists would have deemed it, most of us were brought up. That happy age lost sight of a view of the world which filled with deep-seated melancholy the founders of our Political Economy. Before the eighteenth century mankind entertained no false hopes. To lay the illusions which grew popular at that age's latter end, Malthus disclosed a Devil. For half a century all serious economical writings held that Devil in clear prospect. For the next half century he was chained up and out of sight. Now perhaps we have loosed him again.
What an extraordinary episode in the economic progress of man that age was which came to an end in August, 1914!… The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep… adventure his wealth in the natural resources and new enterprises of any quarter of the world… secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate…. But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper….
Much else might be said…. The war had so shaken this system as to endanger the life of Europe altogether. A great part of the Continent was sick and dying…. It was the task of the Peace Conference to honor engagements and to satisfy justice; but not less to re-establish life and to heal wounds. These tasks were dictated as much by prudence as by the magnanimity which the wisdom of antiquity approved in victors. We will examine in the following chapters the actual character of the Peace…
By the early 1930s, however--in spite of the gathering Great Depression--Keynes had banished his earlier fears, and was looking forward to the end of the economic problem in fewer than three generations:
Economic Possibilities for Our Grandchildren: The absence of important technical inventions between the prehistoric age and comparatively modern times is truly remarkable. Almost everything which really matters and which the world possessed at the commencement of the modern age was already known to man at the dawn of history. Language, fire, the same domestic animals which we have to-day, wheat, barley, the vine and the olive, the plough, the wheel, the oar, the sail, leather, linen and cloth, bricks and pots, gold and silver, copper, tin, and lead-and iron was added to the list before 1000 B.C.--banking, statecraft, mathematics, astronomy, and religion. There is no record of when we first possessed these things. At some epoch before the dawn of history… there must have been an era of progress and invention comparable to that in which we live to-day. But through the greater part of recorded history there was nothing of the kind….
From the sixteenth century, with a cumulative crescendo after the eighteenth, the great age of science and technical inventions began, which since the beginning of the nineteenth century has been in full flood--coal, steam, electricity, petrol, steel, rubber, cotton, the chemical industries, automatic machinery and the methods of mass production, wireless, printing, Newton, Darwin, and Einstein, and thousands of other things and men too famous and familiar to catalogue. What is the result? In spite of an enormous growth in the population of the world, which it has been necessary to equip with houses and machines, the average standard of life in Europe and the United States has been raised, I think, about fourfold. The growth of capital has been on a scale which is far beyond a hundredfold of what any previous age had known. And from now on we need not expect so great an increase of population…. At the same time technical improvements in manufacture and transport have been proceeding at a greater rate in the last ten years than ever before in history…. There is evidence that the revolutionary technical changes, which have so far chiefly affected industry, may soon be attacking agriculture….
For the moment the very rapidity of these changes is hurting us and bringing difficult problems to solve…. We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come--namely, technological unemployment…. But this is only a temporary phase of maladjustment. All this means in the long run that mankind is solving its economic problem. I would predict that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day….
Now it is true that the needs of human beings may seem to be insatiable. But they fall into two classes--those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows. Needs of the second class, those which satisfy the desire for superiority, may indeed be insatiable…. But this is not so true of the absolute needs--a point may soon be reached, much sooner perhaps than we are all of us aware of, when these needs are satisfied in the sense that we prefer to devote our further energies to non-economic purposes….
The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance. But it will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes…. I feel sure that with a little more experience we shall use the new-found bounty of nature quite differently from the way in which the rich use it to-day, and will map out for ourselves a plan of life quite otherwise than theirs….
When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession--as distinguished from the love of money as a means to the enjoyments and realities of life--will be recognised for what it is, a somewhat ￼￼￼￼￼disgusting morbidity, one of those semicriminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease….
I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue-that avarice is a vice, that the exaction of usury is a misdemeanour, and the love of money is detestable, that those walk most truly in the paths of virtue and sane wisdom who take least thought for the morrow. We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin.
But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.
I look forward, therefore, in days not so very remote, to the greatest change which has ever occurred in the material environment of life for human beings in the aggregate. But, of course, it will all happen gradually, not as a catastrophe. Indeed, it has already begun…
And when we come to the 1950s of Simon Kuznets, Robert Solow, and Walt Whitman Rostow, the Malthusian Devil is ignored as a result of the confluence of the demographic transition, the technological creativity of the industrial research lab, and the political victory of social democracy: output per worker is seen as high and growing indefinitely; moreover, income inequality is under control--a Dickensian (or Marxist) society of great wealth but also great mass poverty is off the table as well.
That is the relevant history of economic thought.