The future of work and freeconomics Reply

It is autumn break at the University and we thought we should offer some light and interesting reading in the place of a research post this week.

01COWAN-blog427Prof Krugell has been reading and blogging about the book Average is over. The author, Tyler Cowan, argues that the future of work is going to be about working with intelligent machines. This will put pressure on middle-skill, middle-wage jobs and hence, average is over.

Last week Johan Fourie blogged about a seminar at Stellenbosch University where Michael Jordaan talked about revolutionary technological changes and ‘freeconomics’:

the exponential growth in information and, conversely, the exponential decline in the cost of information, necessitates economists to adjust – or perhaps toss and completely rethink – their classic microeconomic models. This new model, he conjectured, is driven by technologies of the digital age, where the marginal costs of services are close to zero, where demand is unconstrained by price and where scarcity has been replaced by the abundance of products and services that are available for free online.

This links up with a Project Syndicate post by Esther Dyson on the rise of the attention economy:

This is not the familiar question of whether our machines will put us all out of work. In fact, the question is whether we will start doing more and more intellectual work for free or for barter, becoming more like our ancestors. Instead of producing food or housing for ourselves or for barter, we will be producing content and amusement for one another, without engaging in explicit (taxable) financial exchange.

The attention economy is one in which people spend their personal time attracting others’ attention, whether by designing creative avatars, posting pithy comments, or accumulating “likes” for their cat photos.

All of this raises any number of interesting questions. How do we think about value and payments for the factors of production? How do we think about employment when you are working with robots and algorithms? Or unemployment, when people are replaced by robots and algorithms? What does it mean for growth, for inequality, for the environment?

In an article in Wired magazine Kevin Kelly wrote:

When robots and automation do our most basic work, making it relatively easy for us to be fed, clothed, and sheltered, then we are free to ask, “What are humans for?” Industrialization did more than just extend the average human lifespan. It led a greater percentage of the population to decide that humans were meant to be ballerinas, full-time musicians, mathematicians, athletes, fashion designers, yoga masters, fan-fiction authors, and folks with one-of-a kind titles on their business cards. With the help of our machines, we could take up these roles; but of course, over time, the machines will do these as well. We’ll then be empowered to dream up yet more answers to the question “What should we do?”

For now we recommend reading a blog, or a book, and enjoying the autumn break.

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