As promised, here is the book report I wrote recently on the Tyler Cowan book I reviewed for my Comparative Economic Systems class. It was a great book, it didn’t provide the insight my lecturer & I had hoped but it was still a fascinating read. Enjoy.
Average is Over
Tyler Cowan presents in this book a realistic hypothetical prediction of the future of the US economy and society for the coming decades; a world where there are two distinct classes: those who benefit from the mechanisation of the workforce and those who have the skills to support these machines as they increasingly take the jobs of human workers.
He breaks his book into three parts to segment the analysis and theory. Beginning with ‘Welcome to the Hyper-Meritocracy’ he outlines his argument: “Average is Over” and his reasons “stem from some fairly basic and hard to reverse forces”. These include the shift to the use of Intelligent Machines; Economic Globalisation; and a split of modern economics into both very stagnant and very dynamic sectors. There will be a focus on those who can complement or compete with Machine Intelligence (MI) and this will lead to more emphasis on education and self‑motivation for our future success.
Section two asks ‘what Games are teaching us’ and looks at the rise of machine intelligence over the years using chess and other games as an analogy. MI goes beyond the coming age of Web3.0 and speaks to the evolution of MI, its understanding of human language and cognition beyond that which is programmed. Cowan illustrates how we are well on our way to this future with his argument exceptionally strong citing multiple sources of evidence.
Throughout this section of the book he breaks down the technological advances that have been made and the ways in which humans and machines are already collaborating, and the at times disjointed way they move towards the future together.
The crux of his argument is that since the recession the US lost many jobs, “60% of which were mid-wage jobs. Of the jobs added back since the recession ended 73% have been low-wage”. Real income though had been falling before the recession where “median household income peaked in 1999”. Cowan reassures us though, that even with the displacement by MI in manufacturing, workers will move to all forms of direct personal services… “it’s not all bad news”.
He outlines the Labour Force Participation problems that are facing the US economy as well as the change that has occurred in the attitudes and abilities of its quickly diminishing skilled workforce.
One of my favourite lines from Battlestar Galactica is “This has happened before and it will happen again” and in its way this book says this: we are seeing a revolution of the processes we use, as we’ve seen in the past, only now it’s technology and demand on MI.
The new world of work makes up section three and in its way presents the most lugubrious message of the book. What are the lessons? What will the future look like in 20-40 years? Wither Economics? and what he recommends.
Cowan purports that “This is not a world where everyone is going to feel comfortable” but that it is a liveable process because ultimately we have grown and evolved alongside the technology. It often features dire predictions of slums and an increasing number of poor Americans and a greater restriction of services available to them. This is where the argument stops using evidence and starts using hypothesis and where I feel that those it speaks of have the greatest ability to change this outcome.
His hope is that by transitioning to new education models incorporating a mix between online learning and face to face instruction, society can make MI education more accessible to future workers enabling them a greater chance in the new economy; that “When it comes to the new paradigm a lot of people are expecting the next Marx, Keynes or Hayek. The changes to come will be more radical than that and they will challenge the very relationship that the scientist has to his or her craft of study. The real change will be the subordination of the individual scientist”; and that in the future MI will make their own adjustments and ‘think for themselves’.
There is great political change that needs to be made and far greater attention paid to the coming age of MI. Stronger regulations, preventative measures to stop corruption and misuse of information along with a broad understanding of the requirements of the new technology need to be a key part of the political discussion on MI. That is, if we are to govern the industry and attempt to control the change that it brings.
To conclude, my thinking was that this book would focus more on the economics of stagnation and the impact this has both to America and the global economy, especially over the past 10 years. It was however nothing of the sort, though was still a fascinating read on a world that appears to be very much in the making.