Paul Wallbank – Brilliant Communications

Category: politics

  • Economics for the ordinary person

    Economics for the ordinary person

    “95% of economics is common sense” says economist Ha-Joon Chang in his book The Little Blue Book — Five Things They Don’t Tell You About Economics.

    In a presentation at this year’s RSA conference Chang explains some of the underlying themes of his book, particularly the point that the various schools of economics theory are based on their own sets of cultural assumptions and that every group struggles to explain the world, especially when asked to fit Singapore into their models.

    Chang’s five points are a call for the average person to understand economics and be prepared to challenge the orthodoxies being trundled out by business and political leaders.

    You should be willing to challenge professional economists (and, yes, that includes me). They do not have a monopoly over the truth, even when it comes to economic matters.

    As economists have been allowed to become the high priests of modern society — or possibly the court jesters of the corporatist world — it may well be time to challenge them.

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  • Competing in the global tech race

    Competing in the global tech race

    Last week I wrote a piece for Business Spectator on the contrast between countries competing for tech investment and skills.

    Irish Taoiseach Enda Kenny was in Silicon Valley promoting Ireland as an investment and operating location while in London the Queen hosted 350 British tech companies at Buckingham Palace.

    Earlier this week President Obama hosted the first White House Makers’ Faire with over thirty inventors showing their ideas.

    All of this contrasts with the Australian Prime Minister Tony Abbott’s recent North America where he touted the country was ‘open for business’ by offering mines and toll roads to Canadian pension funds.

    It’s clear some countries’ leaders recognise they live in the Twentieth First Century while others are struggling with Twentieth Century.

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  • Saving retirement

    Saving retirement

    Retirement age is vexed problem in the developed world; while life expectancy has increased over the last Century, the age where one becomes eligible for the pension has barely changed.

    Harvard University professor Martin Feldstein illustrates this in a post on Project Syndicate, Saving Retirement, where he has a number of suggestions of moving the pension age to ease the pressures on public finances.

    Obviously, retirees deserve advance notice before benefits are reduced. That is why it is important for the US – and for many countries around the world – to act now to make the changes needed to stabilize future pension finances.
    Those pressures are going to become more real in the decade as the baby boomers join the ranks of the retired, the cry “I’ve paid my taxes, where’s my benefits?” is going to get louder.
    Unfortunately for them, the kitty’s going to turn out to be bare – there simply aren’t enough Generation X and Y workers in the developed economies to pay for millions of boomers collecting pensions for the next thirty years.
    Governments around the world have ignored this obvious, and predictable, problem for fifty years and now it’s time to address it. Unfortunately few leaders have the courage to tell their electorates the truth of the challenge ahead.

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  • Technology’s Ayn Rand fallacy

    Technology’s Ayn Rand fallacy

    Adam Curtis in his wonderful BBC series All Watched Over By Machines of Loving Grace discusses how Ayn Rand influenced many in the tech industry.

    Having been accused of being a ‘techno-utopist’ Curtis’ story is a good reminder of the limits of technology and how the future doesn’t usually turn out how we imagine.

    The Ayn Rand influence is worth reflecting on as Rand’s libertarian outloook is shared by many in the technology industry – from the lowest PC technician to the highest flying software mogul.

    Rand’s beliefs are best portrayed in her own words, in a 1958 interview with Mike Wallace she tells of how she believes in “challenging the moral code of altruism.”

    In Rand’s world view it was the duty of each man to achieve their own happiness, self sacrifice and caring for other is weakness.

    That technologists should have those views is curious in that the entire computer industry, the internet and Silicon Valley itself is the result of massive US government spending during World War II and the Cold War.

    An more delicious irony is the centre of Silicon Valley, Stanford University, is itself the result of a bequest by railroad tycoon and former Californian governor Leland Stanford.

    So self-sacrifice, altruism and government spending forms the basis of the entire modern tech industry – something that computer industry’s libertarians ignore, if they are conscious of history at all.

    An even bigger contradiction is the belief that the internet dismantles government and corporate power – one of the lessons of Edward Snowden’s revelations is how comprehensively intelligence agencies monitor online communications.

    When the history of Silicon Valley and the 21st Century tech boom is written, one of the compelling themes will be the contrast between the industry’s beliefs and reality.

    The final chapters of that history will describe how that contrast between reality and beliefs is resolved.

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  • Peak employment and the political challenge

    Peak employment and the political challenge

    This week’s edition of The Economist asks about the Future of Employment and where the jobs are in a society where work is increasingly done by machines.

    For the Economist the conclusion is that the future of employment is ‘complex’ and observes economists and politicians haven’t given enough thought to the effects of the changing workplace and the dislocation of many workers.

    Much of the Economist’s story is based around the ideas of professors at MIT Erik Brynjolfsson and Andrew McAfee in their upcoming book “The Second Machine Age”.

    The race with the machines

    Professor Brynjolfsson gives his view at TED 2013 in the key to growth? Race with the machines, a presentation countered by Robert Gordon in the ‘death of innovation, the end of growth’ and followed by an excellent debate between the two.

    Brynjolfsson cites the dilemma of bookkeepers being displaced by software applications such as Intuit Turbotax as an example of where service sector staff are being displaced.

    “How can a skilled worker compete with a $39 piece of software?” Brynjolfsson asks.

    “She can’t. Today millions of Americans do have cheaper, faster, more accurate tax preparations and the founders of Intuit have done very well for themselves. But 17% of tax preparers no longer have jobs.

    “That is a microcosm of what’s happening not just in software and services, but in media and music, in finance, manufacturing, in retailing and trade. In short, in every industry.”

    The great decoupling

    Brynjolfsson’s key point is that workers’ wages have been decoupled from productivity and that the workforce isn’t sharing the rewards of improved practices and increased wealth.

    That is certainly true over the last forty years, however that may not be a technological effect, but the business consequences of liberalising the financial sector which has seen massive pay increases to the banking industry and managerial classes that has been way out of kilter with the rest of the workforce.

    It may well be the current golden era of high executive salaries is a transition effect of an evolving economy, albeit one where our grandchildren will puzzle over an era where a failed executive can receive a $100 million payout on being fired.

    As The Economist points out technological change itself tends to create new jobs that make up for those displaced in old industries, this is a view supported by GE’s Chief Economist Marco Annunziata.

    The main problem that Brynjolfsson identifies is the medium term issue of dislocated workers finding themselves out of work with superseded skills and, as The Economist point out, it’s clear the developed world’s political leaders haven’t though through the consequences of that transition.

    In almost every sense, the current crisis of confidence about employment prospects is more a political and social problem rather than technological.

    Helping displaced workers is going to be the greatest challenge for today’s generation of business and political leaders, the real question is are they up to that task?

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