It can and should be stopped

There is an interview of Dr. Arvind Subramanian (AS for convenience), the Chief Economic Advisor to the Government of India in FT. The interviewer is James Crabtree (‘James’). I know James a little better than I know AS. I had met the latter once in 2010 when we both were invited to the preparatory meeting for the Indo-Chinese Strategic Dialogue, by Mr. Shivshankar Menon, the then National Security Advisor to the Government of India. Of course, he had given a nice blurb to my co-authored book, ‘The Economics of Derivatives’ with Dr. Somanathan. He knows Dr. Somanathan well and respects him.

James now lives in Singapore and I have interacted with him in person and exchange emails from time to time. He is an easy-going chap. He was nice enough to tweet my critical analysis of his analysis of the Uttar Pradesh election results in India in March.

When AS was being considered for the post of CEA, I had checked my own blog posts that referenced him. There were quite a few. I had been blogging for little over six years then. Almost all of the posts had only approving references to his works or views or both. So, I mentioned it to some people whom I thought were closer to the powers-that-be in the ruling dispensation in Delhi.

He has done a very decent job so far. He has made very useful contributions to the progress of the Goods & Services Tax legislation in the country. His annual Economic Surveys are thoughtful and useful for the most part, although I disagree with the consensus view on this year’s Economic Survey, especially with respect to the idea of Universal Basic Income for India. India does not need it. India cannot afford it. Even for the West, it is more a romantic than a useful idea and it is a salve for the consciences of the technology billionaires who are facilitating its destruction of life and society, as we know them. Work is much more than about salaries and handouts are poor substitutes for them. I have more to say on technology later because AS had chosen to mention it, in the interview. Indeed, that is the main and  a large portion of this post.

The only time I disagreed with him and sharply too was on the joint column he wrote for ‘Bloomberg Views’ with Dani Rodrik on the ‘whining’ of Emerging economies on the spillover from the Federal Reserve monetary policy. I thought they were completely on the wrong path. Subsequent research, even from sources like the International Monetary Fund, had confirmed that spillovers are a painful and inevitable reality even for well-run and well-managed emerging economies with sound fundamentals.

Now, back to this interview. It has nice pictures of his pad in New Moti Bagh in Delhi. His Pooja shelf features Shri. Ramana Maharishi. Nice. He has cassettes. So, do I. I do not know what to do with them these days. Even CDs have quickly been replaced by other means of listening.

For the most part, in his interview, he hits the right notes on his boss. That is to be expected. He hits the right notes on India too. The interview is a bit thin on substance though.

James refers to Modi as a leader who brooks no dissent. It would be rather useful to know if any political leader brooks or has brooked public dissent. The real issues are about how they dispose of the dissenter rather than if they allowed them to thrive and that too in public view. So, I am not sure as to the point of it. No politician who makes it to the top in competitive democratic politics will be a front-runner in the competition for the ‘Mr. Nice Guy’ award. That includes the former U.S. President Barack Obama.

For the most part, journalists are either naive or take their readers to be so or it is a bit of both. I am disappointed that James is doing that here.

As for AS’ remarks,

“’Hyper-globalisation is dead, long live globalisation,’ is how I like to put it,” he says. “If you look crudely at the post-war period, 80 per cent of globalisation is driven by technology, 20 per cent by policy. And that 80 per cent, you can’t stop.”

I take issues with that. Well, I winced. At a very philosophical level, many things in the world are processes over which humans have very little or no control. We are mere cogs in the wheel. But, modern societies and governments are organised on the principle that humans are in charge. They choose and decide. Blaming technology is a bit like blaming terrorism or saying that the West is at war with terrorism. That is seemingly clever but a bit daft and stupid.

The world cannot be at war with terrorism. It is at war with terrorists. Period. Nothing more. Nothing less. Narrowing it down further to geographical markers or specific religious markers is also necessary to focus efforts. Euphemism is part of denial and it helps to lull people into believing that something is being done while nothing worthwhile is being done. That is why my eyebrows went up when I read an article in Bloomberg that McMaster advised President Trump against using the phrase, ‘radical Islamic terrorism’ in his Presidential address to the Congress.

Back to technology from terrorism, even though both could be terrorising humans and societies. Technology is deployed and advanced by leaders – political, commercial and scientific – making choices. It does not advance by itself. Some technologies have been shelved and some have been abandoned because their negative externalities were judged to exceed vastly their private benefits or even public benefits.

Several examples would help. The decision by President Nixon to open up to China was a choice. The decision to admit China into WTO even before it became a ‘market economy’ was a choice. The decision to sign the NAFTA was a choice. The decision to repeal Glass-Steagall Act was a choice and so was the decision to legislate the Commodities Futures Modernisation Act in the United States. All of them had consequences. Financial and technological innovations amplified the consequences greatly. Some of the decisions were made without awareness of their fallout on communities, on families and on society. Only economic and commercial considerations, at the aggregate level, were the decisive actors.

That is why Bill Gates was right to propose taxing robots. Obviously, robots do not pay taxes but the companies that are behind them do. The tax may and could even be punitive enough to stop some of the research and advance in the technology. That is not being Luddite. That is being careful about consequences. That is about being honest and humble about forces that one is about to unleash, about which one has no ideas and over which one has no control. That is about recognition of human limitations.

“High-tech hubs were among the five metropolitan statistical areas where the gap between the highest- and lowest-income households expanded the most: two in California, San Francisco and San Jose, as well as Austin and Seattle.” [Link]. The article’s header is a tell-all tale: ‘America’s rich get richer while the poor get replaced by robots’.

Predictably, Larry Summers has objected to Bill Gates’ proposal. Mr. Summers is a very useful weathervane for the direction in which conventional wisdom is blowing. It is usually wrong. Summers’ views are useful for many of us to make up our minds – usually in the other direction. Here is another example. But, that is a different topic.

Political correctness prevents many from admitting to their inability to comprehend the present and the future, especially with respect to such obviously disruptive developments. There is more disruption than progress about them. Tyler Cowen’s article in Bloomberg in February is an example of this unfortunate political correctness. He concludes on that note despite advancing all useful and important arguments against precisely such a stance.

Perhaps, Tyler Cowen, AS and Summers should read an article that appeared in ‘Quartz’ last month. The article is headlined, ‘No one is prepared to stop the robot onslaught. So what will we do when it arrives?’.

The article notes, “In February, the European Union did consider rules that, while not stopping the robots, would have the force of discouraging automation by compelling companies to pay compensating taxes and social security payments for jobs that their robots wipe out. But, EU parliamentary members balked even at this, adopting much milder language that exacts no retribution on the robots or the companies that use them. A pivotal dynamic in the vote seemed to be a reluctance on the part of the deputies to expose themselves to possible ridicule as Luddites.”

That is the problem. Andrew Feenberg, who teaches the philosophy of technology at Simon Fraser University in Vancouver, says, “Doing trade deals and robotics without consideration of the people displaced is insane. The backlash is understandable.”

Feenberg notes, “Societies do have choices with respect to technology.” He is very right.

In sum, this long post is a message to AS that it can be stopped and we, humans, would do well to make choices because we can make them. It is both fashionable and wrong to say that technology cannot be stopped.

Micro sense and macro no sense

Infosys uses its artificial intelligence to eliminate the need for lawyer. Hardly the right remedy for India.

This is like the paradox of thrift. What makes micro sense makes no macro sense. What is the answer? How to bridge incentives or simply prepare for CMAD – Collective Mutually Assured Destruction?

“For now, we have AI  at  a  unique situation, where on the one hand it is eating the jobs of the past but on the other hand it is creating far greater opportunities for jobs of the future,” Sikka added. [Link]

That is baloney. He surely does not know. Not his fault. He cannot. None of us know. We unleash things without knowing the consequences. We are limited. IF we recognise that much, we would do fine. But, we don’t.

I draw attention to the blog post dated March 6, 2017.

Confronted with confounding complexity

Ever since I read Martin Ford’ ‘The rise of the robots’, I have been following his Twitter handle, from time to time. I am not on Twitter. Over the last two days, I had a rich harvest of articles to read. Just finished reading them. I am yet to comprehend the full import of all that I had read. Perhaps, it is not just possible.

The article about driverless trucks and the consequences of automation on the rise of extreme sentiments is of a garden-variety nature compared to the other articles that I read.

Prof. Tyler Cowen has a piece in which he expresses considerable disquiet about what the robotics/AI revolution holds. He presents evidence on what the Industrial Revolution wrought in terms of real wages. He is right that it has caused real pain to many, many people. Time has airbrushed them out of our collective conscience. More importantly, some of us never really experienced the fallout. So, it is easy to sound academically rational about it or as a techno-optimist.

Yet, he contrives to conclude on a note of ‘full steam ahead’. I am not able to understand that one. His choice. Useful to know the name of an economic historian, Gregory Clark, at UC Davis.

Then came the MIT Technology Review article. That too invoked an economic historian: Joel Mokyr at Northwestern University. His understanding of the problem seems very reasonable:

has spent his career studying how people and societies have experienced the radical transitions spurred by advances in technology, such as the Industrial Revolution that began in the late 18th century. The current disruptions are faster and “more intensive,” Mokyr says. “It is nothing like what we have seen in the past, and the issue is whether the system can adapt as it did in the past.”

But, his answer?

Mokyr describes himself as “less pessimistic” than others about whether AI will create plenty of jobs and opportunities to make up for the ones that are lost. And even if it does not, the alternative—technological stagnation—is far worse.

But, again, a good description of what a loss of a job means in the modern society:

There is no question that in the modern capitalist system your occupation is your identity,” he says. And the pain and humiliation felt by those whose jobs have been replaced by automation is “clearly a major issue,” he adds. “I don’t see an easy way of solving it. It’s an inevitable consequence of technological progress.”

Past is no guide to the future but is our recollection of even the past accurate?

Sample this:

Personal computers, the Internet, and other technologies of the last several decades did replace some bank tellers, cashiers, and others whose jobs involved routine tasks.

The full impact of the computing and internet revolution is being felt now. They enabled outsourcing and offshoring. Those who lost their jobs or income or both now want to shrink the world back to the familiarity of the past, in their own ways. Can we say that thse technologies simply replaced routine jobs and did nothing more in terms of damages?

Again, the same facile conclusion:

if we fail to use the technology in a way that benefits as many people as possible (see “Who Will Own the Robots?”), we risk fueling public resentment of automation and its creators. The danger is not so much a direct political backlash—though the history of the Luddites suggests it could happen—but, rather, a failure to embrace and invest in the technology’s abundant possibilities.

This is a short one but more of an introduction/summary of the BankUnderground blog post. BankUnderground is maintained by the Bank of England staffers. The header makes sense. To me, that is.

The Bank Underground article is a very important read because it shows – a bit like Tyler Cowen’s article above – how ‘this time it might be different’ – in terms of the time the latest wave of technology affords humans and societies to adapt – it could be far less. Telescoping of the pace of change – ask Alvin Toffler. Well, we cannot. He died last year but, who knows, technology might enable us to do so sometime in the future.

This is a series of articles in ‘Scientific American’. The lead article is a MUST READ. It touches upon all aspects such as personal liberty, our abilities to think, our freedom to make choices, etc., all those that will become playthings of technology. The page is not well formatted because headers of the subsequent sections merge into previous paragraphs.

Interestingly, the word, ‘complexity’ occurs eight times in these articles. Some of the sentences that bear them are interesting.

  1. But one look at the relevant scientific literature shows that attempts to control opinions, in the sense of their “optimization”, are doomed to fail because of the complexity of the problem. The dynamics of the formation of opinions are full of surprises.
  2. In a rapidly changing world a super-intelligence can never make perfect decisions (see Fig. 1): systemic complexity is increasing faster than data volumes, which are growing faster than the ability to process them, and data transfer rates are limited.
  3. Centralized, top-down control is a solution of the past, which is only suitable for systems of low complexity. Therefore, federal systems and majority decisions are the solutions of the present. With economic and cultural evolution, social complexity will continue to rise. Therefore, the solution for the future is collective intelligence.

This is an important point:

Collective intelligence requires a high degree of diversity. This is, however, being reduced by today’s personalized information systems, which reinforce trends…. Reducing sociodiversity often also reduces the functionality and performance of an economy and society. This is the reason why totalitarian regimes often end up in conflict with their neighbors. Typical long-term consequences are political instability and war, as have occurred time and again throughout history. Pluralism and participation are therefore not to be seen primarily as concessions to citizens, but as functional prerequisites for thriving, complex, modern societies.

If technology is tailored to reinforce and exploit what we like, then…. we lose the ability even to tolerat the ‘other’, let alone have an understanding of and accept them.

Thanks to Big Data, we can now take better, evidence-based decisions. However, the principle of top-down control increasingly fails, since the complexity of society grows in an explosive way as we go on networking our world. Distributed control approaches will become ever more important. Only by means of collective intelligence will it be possible to find appropriate solutions to the complexity challenges of our world.

There is a long NYT article on how Universal Basic Income is being experimented with, in a  village in Kenya. The idea of cash transfers is very appealing in such situations. But, it might prove to be wholly inadequate to the problems that AI/Robotics would be throwing up. For now, it is gaining traction because of the conscience salve that it is, for the technology industry. When Bill Gates said that one should tax robots, clearly, the technology companies that are unleashing them should pay for the externalities they are going to create. Taxation is the best instrument for it.

Just as banks have to create living wells and take up insurance to guard against economic consequences of their failures lest taxpayers are on the hook for collectivisation of losses while gains were kept private, technology companies have to do the same.

However, one good thing with UBI or Cash transfer is that the aid industry, as we know it, would be dead and that is a good thing.

Another NYT article says that with the recovery in oil prices, oil production is back on track in the United States but not the jobs. Nearly one third to one half of the jobs lost won’t come back. Why? Automation.

This may sound like a somewhat relatively lighter article about robots delivering sharing space with pedestrians but it would put delivery workers, drivers out of their jobs.

So, in the end, are we wiser? Yes. Are we confused? Yes. Are we worried? Yes. Do we have answers? No, except ‘tax the hell out of the companies that develop these’. For now, that is my only answser. One blogger is not going to stop the relentless march of humans to extinction in whichever manner it is achieved – hand to hand combat, animals, spears, arrows, swords, guns, bullets, missiles, bombs and technology.

It is time to remind the readers of the man who tried to redeem the world with logic. That is what these companies are trying to do with their technology. If you had not read that article, you should. If nothing else, it should make us humble, at least for a while.

Inflation and interest rates – a BIS primer

I have been wanting to write this for quite some time ever since I read the chapters of the BIS Annual Report, 2015-16 recently (in January). BIS question the judgement that bond markets are efficient and that low inflation of the last quarter century was a product of central bank policies and their independence. First, on inflation:

Inflation is a highly imperfect gauge of sustainable economic expansions, as became evident pre-crisis. This would especially be expected in a highly globalised world in which competitive forces and technology have eroded the pricing power of both producers and labour and have made the wage-price spirals of the past much less likely…. international supply chains can be a powerful mechanism through which global factors impinge on domestic inflation, regardless of domestic capacity constraints.

In the highlighted portion above (my emphasis), BIS economists have spelt out their model of inflation determination. In other words, low inflation does not meant that the prevailing economic and financial market performance is a sustainable one.

On long-term interest rates set in and by the financial markets (Emphasis mine):

All estimates of long-run equilibrium interest rates, be they short or long rates, are inevitably based on some implicit view about how the economy works. Simple historical averages assume that over the relevant period the prevailing interest rate is the “right” one. Those based on inflation assume that it is inflation that provides the key signal; those based on financial cycle indicators – as ours largely are – posit that it is financial variables that matter. The methodologies may differ in terms of the balance between allowing the data to drive the results and using a priori restrictions – weaker restrictions may provide more confidence. But invariably the resulting uncertainty is very high.

This uncertainty suggests that it might be imprudent to rely heavily on market signals as the basis for judgments about equilibrium and sustainability. There is no guarantee that over any period of time the joint behaviour of central banks, governments and market participants will result in market interest rates that are set at the right level, ie that are consistent with sustainable good economic performance. After all, given the huge uncertainty involved, how confident can we be that the long-term outcome will be the desirable one? Might not interest rates, just like any other asset price, be misaligned for very long periods?

It is hard to visualise such (well justified) scepticism of markets coming from any advanced country central bank head.

Taxation for Universal Basic Income

In his regular column for ‘Project Syndicate’, Yanis Varoufakis writes about funding Universal Basic Income for workers likely rendered unemployed by the increasing spread, reach and impact of automation (Artificial Intelligence and robotics). Read this story on Amazon’s unmanned convenience stores.

I am more inclined to accept this method of funding than raising taxes on all. But, I am not convinced of such a free-rider rich solution in the first place. That is a topic for another occasion. Perhaps, when I write about Martin Ford’s ‘The rise of the robots’.

The best thing is to raise a socially disruptive tax on the companies that bring out these robotics and AI advances such that they stop these mindless extension of technology for its own sake.

Who is the worst danger to humanity? A plain Liberal or a tech.billionaire+liberal who is also developing robotics/AI?

The ‘Knowhow’ gap

A long article (courtesy twitter handle of Martin Ford) from the MIT Technology Review on the technological changes that have shaped Greenville, a  town in South Carolina. The article, for the most part, strikes an optimistic note, as though it is a win-win for businesses, for workers and for the community. If only it were that simple. Tucked inside are these uneasy observations:

Some workers will be displaced. Some people will have to be retrained, even in the best of cases,” says Marco Annunziata, chief economist for General Electric, which has both a large gas-turbine factory and a new advanced-manufacturing research center in Greenville. The changes are inevitable, says Annunziata, because “the [business] incentives are just overwhelming” to take better advantage of digital technologies. Asked how communities like Greenville will manage this evolution, he says, “I am worried and optimistic at the same time.” [Link]

Are the changes really inevitable? In other words, do businesses have a choice or not? Viewed from a purely commercial perspective, perhaps, they think they do not. But, are all decisions and choices only commercial? Do trade-offs exist that cannot be measured in commercial terms in the short-term but impinge on the very viability of the economic model in the long-term? If workers feel more insecure, will it not affect the social compact that is much needed for commercial enterprises to thrive?

There are many quotable lines and passages from this long article, possibly excerpted from his book, ‘The wealth of humans’ by Ryan Avent. But, the abiding message is that it is hard to craft solutions. Many so-called experts and thinkers are struggling to come up with answers for this problem. The truth is that humans cannot cope with the complexity they create.

It is far too easy for humans to make technological progress than it is to make society a better place. The latter is more complex and humans are ill-equipped to deal with complexity. At another level, one can say that the issue is not complex but a simple question of being fair and decent. But, if only things were that simple for most of us. We tend to complicate things and call that progress – material and intellectual.

So, the gap between this technical vs. social knowhow is paradoxically not narrowed but widened by further technological progress which, humans have concluded, is inevitable. Why? I do not get it.

I think humans have a choice to make the kind of technological progress that they want to have. Some technical changes have more benefits than costs and some have it the other way around. It is up to humans to direct their attention and resources to the former while starving the latter off them.

The reluctance or failure to do so reflects a tempting ‘winner take all’ attitude – a belief that they will be better off somehow by these changes while the costs are borne by the others.

Ryan Avent may be truthful and honest but he may be speaking for a very small minority, if it exists:

Writers and thinkers, like me, try to imagine post-work utopias, in which, for example, sensibly structured social safety nets could free people of the constraints of the typical job. These people could then offer their services by the hour or the job on newfangled market-making apps, among other things, or they could even abandon labour markets altogether, as new forms of social institution encouraged them to volunteer their time to the community or otherwise engage in pro-social behaviour – while also living alongside people from vastly different backgrounds and perhaps nationalities, if some of us get our way. [Link]

Elites may be willing to live alongside people from vastly different backgrounds and perhaps nationalities but perhaps not from vastly different economic backgrounds. Second, it is not about social safety nets alone. It is about a sense of purpose, identity and belonging to a cohesive group.

Elites and the so-called writers and thinkers who think of themselves as having been freed from narrow identities and hence being in a position and willing to volunteer their time to the community or otherwise engage in pro-social behaviour might either be too naive or may be simply dishonest, cloaking their self-interest in lofty sentiments. If one does not belong to any group, may be, one just belongs to oneself and not to the world. Very few transcend identities to the higher plane. Such realised souls, by the sheer hard and stupendous nature of the passage, are rare in history.

Except for the concept of ‘Universal Basic Income’, there are no answers that Ryan Avent offers in this article. Even ‘Universal Basic Income’ is not that realistic either. We do not know how feasible it is. From where the State will find the resources to offer UBI to the affected workers, unless it chooses to take it out of those who benefit and may be, out of even those that create these technologies that cause so much social and economic anguish and uncertainty?

Even if that happens -a big IF considering that capitalists have shown no willingness to grasp the nuances of the argument – as Ryan Avent admits elsewhere in the article that it is not just about compensation for the loss of work. It is about loss of self-respect and identity that comes from work.

…. people of all backgrounds also seem to value narratives of personal ambition and responsibility. People wish to have control over their economic lives and to be seen as contributing both to society and to the wellbeing of their families. People desire agency. They do not wish to be forced into unpleasant work by the need to feed their families, but neither do they want to be written off – or assigned meaningless work as the price of a generous welfare cheque. It isn’t clear that the digital economy can provide the working conditions needed to extend the possibility of bourgeois comfort and status to a broader class of people. That will not stop them desiring it. [Link]

It is clear that we do not have answers. Then, it makes sense to stop pursuing things that give rise to the questions.

On robotic conclusions on robots

Following up on my earlier post on Branko Milanvoic’ blog post, I ran into the blog site called ‘Bank Underground’. It is a platform for Bank of England economists, analysts, et al, to post their comments on various issues that may or may not agree with the official policy of the Bank of England. Very good platform, in that sense.

I came across this somewhat optimistic post on the impact of robotisation. This one line, of course, does not do justice to the post which is, on the whole, quite thoughtful. It has many links. I clicked on one of them that took me to a FT Alphaville post of November 2015. In turn, it led me to a speech (‘Labour’s share) by Andrew Haldane in November 2015 and a piece by Martin Wolf in Feb. 2014. I read the latter and have downloaded the former.

Martin Wolf’s piece itself has many links. His final point is well made:

Above all, technology itself does not dictate the outcomes. Economic and political institutions do. If the ones we have do not give the results we want, we must change them. [Link]

But, that is true of a lot of things. Most prominent is money, for example. Or, may be, fast cars. They cannot kill or destroy character or whatever, on their own. It is supposedly up to us. But, that also assumes a lot of things about human abilities at self-control that years of research have shown us to be incapable of.

In his famous TED talk, Dan Ariely reminds us that we do not know our own priorities and that, when the decision becomes a trifle complex, we fall back on the default options chosen for us. That is what gave rise to the whole concept of ‘nudge’. But, ‘nudge’ can be both argued for and against.

At some level, ‘nudge’ is playing God. It assumes that people do not know their preferences correctly. But, that includes the people and authorities nudging too! Second, it can be, with some justification, deemed elitist and even manipulative. All, supposedly, for good reasons and for good causes. What if they are used for wrong ends?

So, giving us tools that we do not know how to handle is not a good thing. Therefore, some tools are better off being inside the tool box.

That reminded me of the quote attributed to Christopher Hitchens:

Everyone has a book inside them, which is exactly where it should, I think, in most cases, remain. [Link – btw, the link explores how the deceased writer Christopher Hitchens came to be associated with this pithy and witty observation]

I had left a comment on the Bank Underground website under the post on Robot Macroeconomics:

Just three minor points worth thinking about or keeping in mind:

(1) We do not know if jobs would really be lost or not. Assuming they are not, is it also possible to state that robotics would not come in the way of creation of jobs? In other words, what would be the counterfactual in terms of job creation but for robotics? Can we even guess that?

(2) In the developed world, robots could firm up resistance against immigration from developing economies that have a surplus of labour.

(3) It could also lead, through trade, to job losses in the developing world if robots enable developed world to regain competitiveness and they use their muscle to prise open markets for various goods and services in the developing world. The employment hit to developing economies will arise not only from lost export possibilities but also from having to compete with cheap imports, enabled by robots.

Lawrence Mishel’s blog post in the Economics Policy Institute (ht: Martin Wolf’s article) is hard hitting and rigorously argued. He rejects the argument that technology is responsible for inequality and instead points the finger at compensation in the financial sector and executive pay:

…. rising executive pay and the expansion of, and better pay in, the financial sector can account for two-thirds of increased incomes at the top. If superstar actors, musicians, and others were driving growth at the top we wouldn’t see the close association of top incomes with the trajectory of the stock market, especially during the last two crashes….

… On their specific claim about executive pay it is true that such pay grew as firm size grew in the last two decades but it is also true that firm size grew for many decades before that without any escalation of executive pay. [Link]

His detailed work that proves these points can be found here. Regular readers of this blog would know that I am very sympathetic to these points of view. Technological change may not be the direct cause of it but capitalists might find that a handy instrument to beat the workes with, heightening their sense of insecurity and curtailing their own wage demands. Agree that correlation is not causation but an adjunct role for technology may be appropriate.

I was quite tickled to read this observation by Martin Wolf that Lawrence Mishel rejects that technology changes caused wage inequality. I had read this morning an interesting article (ht: TCA Srinivasa Raghavan) as to how Ronald Fisher, the father of modern statistics, could not accept that smoking caused cancer. Randomized experiment was not possible in establishing causation from smoking to cancer. Hence, he could not accept that smoking caused cancer. Establishing causality in many social phenomenon is very hard. Too many other factors at play and very few of them can be controlled or allowed to remain unchanged. More often than not, temporal sequence passes off for causality.

Suffice to say that this topic is going to become very important in the coming years and hence, we need to keep reading and keep expanding of our knowledge of past experiences, patterns, etc., on the introduction of technology and the impact – both general and relative – on workers, wages and on the society. Facile conclusions and generalisations need to be avoided. More than a touch of humility is needed – to avoid arriving at conclusions but to keep minds open for understanding the phenomenon and to abandon one’s policies when evidence and trends change.

If past were the (only) prologue for the future, there would be no need for intelligence.

An interesting postscript to conclude this long blog post:

The legend of how a union leader told an official in a car manufacturing company who was proudly showing off his new robots to the workers’ leader that robots would not buy the cars that his company was making, has been retold many times with everyone adding their own bells and whistles. This link gives the full monty behind that legend. It is authentic but happened more than six decades ago. There was one real character involved – Walter Reuther – leader of the automobile workers’ union. But, his counterpart in the conversation was not Henry Ford II.