2014 is the last year of British military involvement in Afghanistan and the end of a long phase of ‘nation-building’ efforts since 9/11. While David Cameron has unconvincingly declared ‘mission accomplished’, in reality the next Labour government will wrestle with an agonising set of dilemmas about the UK’s future involvement in stabilising failed and failing states. Iraq and Afghanistan cast a long shadow.
Real terms median wages have been stagnating in developed countries since the mid-1970s, when – as David Schweickart notes in this terrific paper (h/t Casper Ter Kuile) – growth in wages first became uncoupled from growth in productivity. So what caused this shift, which is right at the heart of the issue of the ‘squeezed middle’?
Partly, of course, it’s about the effects of trade, as globalisation meant that developed country workers found themselves competing with workers in the developing world. But, argues economist David Autor, the more significant factor has actually been technology, and the automation of routine work. The effect, he continues, has been what he calls the ‘polarisation’ of the job market, with job opportunities declining in both white and blue collar ‘middle-skill’ occupations.
This week’s Economist has a cover story on technology and jobs, observing that what we’ve seen so far is just the beginning (emphasis added):
From driverless cars to clever household gadgets (see article), innovations that already exist could destroy swathes of jobs that have hitherto been untouched. The public sector is one obvious target: it has proved singularly resistant to tech-driven reinvention. But the step change in what computers can do will have a powerful effect on middle-class jobs in the private sector too.
Until now the jobs most vulnerable to machines were those that involved routine, repetitive tasks. But thanks to the exponential rise in processing power and the ubiquity of digitised information (“big data”), computers are increasingly able to perform complicated tasks more cheaply and effectively than people. Clever industrial robots can quickly “learn” a set of human actions. Services may be even more vulnerable. Computers can already detect intruders in a closed-circuit camera picture more reliably than a human can. By comparing reams of financial or biometric data, they can often diagnose fraud or illness more accurately than any number of accountants or doctors. One recent study by academics at Oxford University suggests that 47% of today’s jobs could be automated in the next two decades.
So what should we do about this? The Economist leader concludes by arguing that the approach favoured by the left (and now George Osborne too) – big hikes in the minimum wage – is dead wrong, in that it will just accelerate the shift from humans to computers. Instead, they argue, “better to top up low wages with public money so that anyone who works has a reasonable income, through a bold expansion of the tax credits that countries such as America and Britain use”.
That’s a fair point, but it doesn’t really engage with the larger issue, of who harvests the benefits of the extraordinary productivity gains we’ll see over the next 20 years. Last week, I quoted Keynes speculating on the world in 2030, and imagining an economy in which
…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 … What work there still remains to be done will be as widely shared as possible – three hour shifts, or a fifteen-hour week …
Might the avalanche of technology coming our way bring that vision within reach? One interesting ‘weak signal’ in the background is the new interest – from both left and right, as the NYT’s Annie Lowrey observed in November last year – in the idea of an unconditional basic income paid to all, as of right (not as a means-tested benefit that depends on being in work or in poverty, therefore).
As the Economist pointed out in a response to her piece, a universal payment along these lines wouldn’t do much to reduce inequality of income (never mind wealth). But it would go a long way towards giving everyone, rather than just capital, a share of the winnings from technology, and the beginnings of a strategy for dealing with a world in which there’s less work to be done.
I have an especially dour article over at World Politics Review about the state of crisis diplomacy today, which kicks off like this:
Since the conflict in South Sudan escalated in December, well-meaning governments and United Nations officials have repeatedly argued that only a political solution can end the fighting. “There is no military solution,” U.S. Ambassador to the U.N. Samantha Power told CNN on Christmas Eve. But the South Sudanese government does not seem entirely convinced. Over the past week it has ratcheted up its offensives against rebel-held areas, recapturing the economically important town of Bentiu. Bor, another major center in rebel hands, has also been under attack. The government is still in peace talks with rebel envoys, but it is evidently intent on negotiating from the strongest possible military position.
South Sudanese President Salva Kiir has been bolstered by air support and ground troops from Uganda, as well as political signals of support from his old enemies in Sudan. If Kiir needs further encouragement, he needs only to think of other governments that have been told to find a “political solution” to internal conflicts. From Sri Lanka to Darfur and Syria, leaders who have ignored this advice have managed to fight on in the face of international revulsion. Western powers and the U.N. appear willing—or obliged—to put aside bargaining with these leaders, tragically affirming the continued political value of brute force.
You can read the rest of my argument here. But perhaps I am just being a curmudgeon, because it seems that peacemakers everywhere are having a whale of a time. The Russian and U.S. delegations meeting to discuss Syria have been up to high jinks:
For some watchers of international diplomacy, the somber road to Syrian peace was overrun Monday by potatoes and furry pink hats.
A swapping of delegation gifts between U.S. Secretary of State John Kerry and Russian Foreign Minister Sergey Lavrov served as a distraction from predictions of elusive success in Syria. The usually stern-faced Lavrov came to the meeting armed with at least two ushankas, a traditional Russian fur hat with earflaps that tie to the top of the hat. Both hats went to women on Kerry’s press staff — including a bubblegum-pink one for State Department spokeswoman Jen Psaki.
The more bizarre bout of diplomacy came over a pair of Idaho potatoes. After pictures of Kerry handing Lavrov the tubers during talks Monday morning surfaced on the Web, reporters pressed both leaders for an explanation hours later. Kerry quickly sought to disavow any deep diplomatic meaning from the spuds, explaining that he was in Idaho over the holidays when he and Lavrov spoke by phone. The Russian, it seemed, associated Idaho with potatoes. “He told me he’s not going to make vodka. He’s going to eat them,” Kerry said of Lavrov, who was next to him at an otherwise grim news conference on militant threats to humanitarian aid for Syria.
How could anyone feel grim after such hilarities? Still, some people just can’t take a joke, like the South Sudanese negotiators who are miffed about holding talks… in a nightclub.
A shift in the venue for talks aimed at brokering a ceasefire in South Sudan has left some delegates bemused. The government and rebel teams have moved to the dance floor of a top nightclub in an Addis Ababa hotel.
The Gaslight club was selected after the room in the Sheraton hotel the teams had been using was booked by a Japanese delegation. Sources close to the talks said some delegates were unhappy with the poor lighting and excess noise.
Maybe, just maybe, these things could be handled without spuds and disco balls?
Shot by Nicholas Buer in the Atacama region of Chile. Via Boing Boing & David Hodgson. Headphones and full screen recommended.
In the same spirit of hopeful ideas for a new year as Ben’s excellent post on inequality, herewith some musing of JM Keynes’s about “economic possibilities for our grandchildren“, penned amid the economic Armageddon of 1930.
Keynes took as his timeframe a 100 year period from when he was writing – in other words, what the world might look like 2030. As it happens, this is exactly the same question that governments and others are now looking at in the post-2015 development agenda – so it seems like an apposite moment for a reprise from a man who’s lately been vindicated on a number of other fronts…
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 … What work there still remains to be done will be as widely shared as possible – three hour shifts, or a fifteen-hour week …
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 semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease. All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital, we shall then be free, at last, to discard …
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 …
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. The course of affairs will simply be that there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed.
There are three types of campaigns: the lost causes, the just a little bits, and the transformational.
The lost causes can be great to begin with – the nobility of defeat, the pride in being proved right that things would get worse, the Butch-Cassidy-and-the-Sundance-Kid-final-scene moments. But that can get draining. Which can lead campaigners to the second type.
The just a little bits are calls for changes that don’t really challenge the powerful, but do measurably lessen the suffering of the poorest. The just a little bits bring “quick wins” a-plenty (so good for people who can’t deal with defeat), and bring praise from the establishment (so good for people who need affirmation). And they do help improve lives. But they don’t tackle the causes of poverty and suffering.
The transformational campaigns are those for fundamental shifts which change power relations: the end of slavery; the beginning of democracy; women’s rights; anti-colonialism; anti-Apartheid; drop the debt. Unlike the lost causes, they are winnable – not quickly, not easily, but winnable. And unlike the just a little bits, when they are won they really do change the world.
The struggle against inequality is a transformational campaign we can win. Those worried that no global leader would ever champion the cause can now be reassured to see as our champions President Obama (and Bill Clinton), along with the Pope (and the Archbishop of Canterbury), and the new leaders of New York (and New Delhi). (We’ve also got as champions the really clever economists; the moderately clever ones not yet, but they’ll catch up.) Those worried it was too much for the public can see opinion polls by Pew and others that show overwhelming majorities agreeing that the gap between the richest and the rest has become too wide.
Those worried that it would upset the super-rich … well, they were right. Some of them won’t get it and never will. It’s called Affluenza. It led a rich businessman to threaten to cancel his donations to the church if the Pope didn’t pipe down with all the stuff about social justice. But, encouragingly, even some of the richest get it. As the wonderfully named hedge funder Bill Gross ($2.2bn) puts it in a letter to his peers:
“Admit that you, and I and others in the magnificent “1%” grew up in a gilded age of credit. Yes I know many of you money people worked hard as did I. A fair economic system should always allow for an opportunity to succeed. Congratulations. Smoke that cigar, enjoy that Chateau Lafite 1989. But (mostly you guys) acknowledge your good fortune. You did not create that wave. You rode it. And now it’s time to share some of your good fortune by paying higher taxes or reforming them to favor economic growth and labor, as opposed to corporate profits and individual gazillions.”
Meanwhile our opponents, the defenders of inequality, are all over the place in their response. Some deny that inequality is getting wider. Some admit that it is widening but deny that’s a problem. Some admit it is widening and admit it’s a problem but claim that the way to reduce it is to further roll out all the policies that have made things worse. And then when they have nothing left they call us Communists.
But the struggle against inequality isn’t a claim that it is possible or desirable for every person to earn the exact same income. No, it’s an insistence that every person is precious, that we need each other, and that in a decent society the gap between the richest and the rest is contained. For three decades after the Second World War, that was the global and bipartisan consensus. It can become again.
We’ve got powerful global champions, and public backing, for the strong clear message that inequality has gotten out of hand. There are, of course, powerful and well-resourced forces determined to further increase inequality. But it is not a thing we need the serenity to accept, it’s a thing we need the courage to change.
It was the kindness of strangers. When Aziz fled from the Syrian conflict to Lebanon, he heard about a farmer who allowed Syrian refugees to camp on his land. “How much is the rent to be on his land?”, I ask Aziz. “It’s nothing,” he tells me, “the farmer charges nothing.” The tent, made by Aziz himself from recovered tarpaulin posters from old billboard adverts, is lit by an electric light. “How do you get electricity?” “From the farmer. He let’s us use his electricity supply for free.”
Aziz cannot find work except for occasional daily labour in the nearby town. “What kind of work do you do?” “Anything. I will do anything. I will dig the earth with my bare hands if it will help me take care of my daughters.” Aziz wants desperately to return – “if it was just me, I would have tried to stay and work there.”
But for the safety of his daughters he cannot. And so he stays, reliant on the generosity of a farmer who cannot turn away one who comes in need.
Aziz is one of the lucky ones. In another settlement I meet Hadoud. Since his arrival in Lebanon from Syria he has lived in a building that was originally constructed as a chicken coop. His whole family – from his one year old daughter to his 70 year old mother – live in one room. They have to pay $100 a month rent to the owners, an amount they cannot afford. They have used up all their savings and now, they say, “we buy food with debt.” It’s getting cold in the Bekaa Valley, but they cannot afford a heater and have only blankets to keep them warm.
“Do the kids go to school?”, I ask. “No,” Hadoud tells me,” we took them out. The teachers hit the kids and made them empty the trash instead of doing lessons. The teachers never made the kids from this country do that. Only the Syrian kids …” – at this point the aid worker translating for me, who is Lebanese, pauses; his eyes are wet; he regains his composure; he swallows; he continues – “They selected only the Syrian kids to be sent out of lessons to take out the trash. We could not keep them in that school.”
There are over one million Syrian refugees in Lebanon. The international aid response is chronically underfunded across the region. There is a clear need to do more to help Lebanon cope. The challenges are challenges for the international community as a whole. We might wonder how anyone could reject Hadoud’s kids from school lessons. But it is all of us, collectively, who have done so.
“Hadoud’s mother wants to give you coffee,” says my translator colleague, “but I told them no, that you have to go. They cannot afford to host you. I do not want to embarrass them.”
But then coffee comes. “They have made it anyway. They insist on welcoming us.”
We sit and drink coffee and the conversation turns to “home”. “We will go home, inshallah,” says Hadoud, “we shall go home soon. And then you must visit us there, in Syria, in Syria.”
But for now they must remain. And more arrive each day. How to manage such large scale movements of people in a volatile situation is complex, very complex. And it is one that the international community cannot expect Syria’s neighbours to handle unsupported, but must manage together. It is the humanitarian crisis of our time, a collective responsibility, and requires a collective response to match it.
But as the international community looks at how to upscale its humanitarian response, what seems less complex is the guiding principle of the family with almost nothing who offer coffee, of the farmer who leases his land for free, of the translator who cannot bring himself to say what has been said.
It is the kindness of strangers.