Tuesday, June 11, 2013

Robert J. Gordon (The End of Growth) vs. Erik Brynjolfsson (The Key to Growth)

Whose argument for what the future has in store is compelling?
Granted, TED conferences at best are champions of style over substance and reek of corporatism rather than thoughtful academic rigour to those critically inclined.
Notwithstanding these glaring gaps, the talks do provide a means to encapsulate a view; the view in question here is one of growth.
Sorting through the entrails of the global financial crisis, much of the developed world is afflicted with sub par growth --particularly in the case of a region like the Eurozone where that result has been self inflicted and prolonged.
First up, Robert J. Gordon, lays out four reasons US growth in particular may be slowing: declining innovation, unfavourable demographics, burgeoning debt and growing inequality, all of which, Gordon argues, could move the US into a period of suspended animation from which there is no way to innovate out of.

Click above or link here to Gordon's talk:
The counterpoint comes from Erik Brynjolfsson who argues that we are suffering from the growing pains of a radically reorganized economy. Interestingly, despite Brynjolfsson's positive spin of the modern computer as a general purpose technology producing cascades of complementary innovation, he concedes that the increase in productivity has not resulted in a concomitant increase in wages (he frames it as a decoupling of productivity from employment).
There is also the unmentioned issue of what happens to those who work in jobs that are: (i) tradeable so that one's labour must compete against a global pool; and (ii) in the process of being codified as a piece of software so that the skills are no longer priced competitively in the marketplace. Brynjolfsson provides the puff pastry palliative of "racing with the machine rather than racing against it" and that "we shape our destiny". This is little comfort to those who will be downsized, off shored and cannot (re)train fast enough to keep up with what is deemed valuable in the marketplace.

Click above or link here to Brynjolfsson's talk