On Tuesday 27th September, The Henry Jackson Society welcomed Ryan Avent to discuss his new book The Wealth of Humans: Work, Power, and Status in the Twenty-first Century. The talk focused on the development of technology, how it impacts the labour market and the effect this will have upon our society.
Avent began by examining the trends of the past thirty years. Technological development, he argued, has caused a downturn in productivity and wage growth, a decline in the share of income going to labourers and a rise in inequality. This has resulted in a number of disenchanting political results. Support for nativist and isolationist policies has increased, accompanied by a disdain for ‘the elites’. Most worrying of all, according to Avent, is the emergence of political figures willing to tap into the feelings of frustration that underlie these developments.
Elaborating on the reasons behind a stagnation in wage growth, Avent argued that technology has made obsolete some occupations, resulting in a glut of labour. This has been exacerbated by the opening up of huge labour markets in countries such as China and India. As a result firms are able to pay very low wages to labourers. Such a situation, Avent claimed, is akin to the upheaval that occurred as a result of the Industrial Revolution. He argued, however, that educating workers and moving them to cities, as was done in the 19th Century, will not solve the problems that technological advancement presents today.
Although wage growth has declined for labourers, Avent noted that specific workers, such as computer programmers, have experienced a surge in demand for their labour. Moreover, he claimed that the value of their social capital has also increased dramatically. Social capital, as defined by Avent, is contextually dependant know-how. This might, for example, be Apple employees understanding how the firm operates and functions. Avent argued that these factors will lead to a situation in which inequality rises as wealth increasingly flows to those with social capital and particular skill sets.
The talk ended with a focus on potential solutions to problems that technological advancement, surplus labour and a rise in inequality may cause. Governments could, Avent said, attempt to better prepare workers by investing more in education and infrastructure. More interestingly, Avent proposed a transformation of the welfare state, with subsidised wages, limited working hours, greater common ownership and, potentially, a universal basic income. In his summing up, Avent noted that, though he does not propose concrete solutions in it, his book is aimed primarily at sparking debate aimed at determining the best way to address the problems that he believes will arise in the future.
After the talk, Avent took a number of questions that mostly focused on what a future welfare state could look like. The most salient points related to the difficulties that may arise as a result of an expanded welfare state. It was pointed out, for example, that large welfare programs could lead to greater levels of tribalism in society as native populations may be opposed to immigrants receiving welfare. Avent also said that, though basic income may give people the financial means to survive, it cannot replace the sense of purpose, identity and social currency that working provides. This ending, which evolved into a discussion of sorts, was fitting seeing as Avent believes his book’s purpose is to start a public conversation.
For a full transcript of this event click here