(Roughly) Daily

“The most perfect political community is one in which the middle class is in control, and outnumbers both of the other classes”*…

For some, the prospect of further advances in AI and related tech (robotics, connectivity, et al.) conjures a future of existential risk, a Terminator-like dystopian future in which humans fight with “machines” for primacy. For others (among whom your correspondent numbers himself), AI (better understood as “augmented” than “artificial” intelligence) has real promise– but also dangers of a different (and very human) sort. Those technologies, dependent as they are on capital and specific/rare expertise, could fuel further concentration of wealth and power, could usher in an era of even greater inequality. Noah Smith is here to argue that my fears may be misplaced, that augmentation may narrow the skills gap and help reduce economic polarization…

On the app formerly known as Twitter, I’m known for occasionally going on rants about how it’s good to be normal and average and middle-class. To some degree this is because I believe that the only successful society is an egalitarian one where people don’t have to be exceptional in order to live good and comfortable and fulfilling lives. But some of it is also a reaction against the messages I was inundated with growing up. It seemed like every movie and book and TV show was telling me that nerds like me were special — that because we could do physics or program computers or even just play video games, we were destined to be exceptional. In the late 80s and 90s, it felt like we were on the cusp of a great shift, where the back-slapping jocks who had dominated American society in earlier times were on the verge of losing power and status to the bespectacled freaks and geeks. The Revenge of the Nerds was coming.

It wasn’t just fantasy, either. Over the next thirty years, the nerds really did win the economic competition. The U.S. shifted from manufacturing to knowledge industries like IT, finance, bio, and so on, effectively going from the world’s workshop to the world’s research park. This meant that simply being able to cut deals and manage large workforces were no longer the only important skills you needed to succeed at the highest levels of business. Bespectacled programmers and math nerds became our richest men. From the early 80s to the 2000s, the college earnings premium rose relentlessly, and a degree went from optional to almost mandatory for financial success.

The age of human capital was in full swing, and the general consensus was that “Average Is Over”. And with increased earnings came increased social status and personal confidence; by the time I moved out to San Francisco in 2016, tech people were clearly the masters of the Universe.

The widening gap in the performance of the nerds versus everyone else wasn’t the only cause of the rise in inequality in the U.S. — financialization, globalization, tax changes, the decline of unions, and other factors all probably played a role. But the increasing premium on human capital was impossible to ignore.

That trend lasted so long that most Americans can no longer remember anything else. We’ve become used to the idea that technology brings inequality, by delivering outsized benefits to the 20% of society who are smart and educated enough to take full advantage of it. It’s gotten to the point where we tacitly assume that this is just what technology does, period, so that when a new technology like generative AI comes along, people leap to predict that economic inequality will widen as a result of a new digital divide.

And it’s possible that will happen. I can’t rule it out. But I also have a more optimistic take here — I think it’s possible that the wave of new technologies now arriving in our economy will decrease much of the skills gap that opened up in the decades since 1980…

An optimistic take on technology and inequality: “Is it time for the Revenge of the Normies?” from @Noahpinion. Eminently worth reading in full.

* Aristotle


As we contemplate consequences, we might spare a thought for Joseph Glidden; he died on this date in 1906. An Illinois farmer, he developed and patented the design of the first commercially-feasible barbed wire in 1874 (an earlier, less successful patent preceded his)– a product that would transform the West. Before his innovation, settlers on the treeless plains had no easy way to fence livestock away from cropland, and ranchers had no way to prevent their herds from roaming far and wide. Glidden’s barbed wire opened the plains to large-scale farming, and closed the open range, bringing the era of the cowboy and the round-up to an end. With his partner, Isaac L. Ellwood, Glidden formed the Barb Fence Company of De Kalb, Illinois, and quickly became one of the wealthiest men in the nation.


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