Technology, the Internet and the End of Work

Here’s an essay I wrote for a course entitled “the political economy of technological change”. It develops my idea of “abstraction” in an economic direction.

It’s quite long, so if you aren’t interested in economics (and even if you are), I recommend reading the introduction (to “The Basic Story: The End of Work) and then skimming down to “Linear Vs. Cyclical View of Progress”. That will give you the interesting big-picture argument. The rest of it is just me engaging with various economists arguments in order to make my quasi-Marxists philosophical claims seem grounded. Still, if you doubt my evidence, or if you’re confused about what exactly the argument is referring to, I spell it out in more detail. And some of the stuff I read for this essay is pretty interesting and accessible in its own right.

Comments very much welcome, either on the big picture claim, or on ways to make the middle bits more compelling. It would be good for me to clean this up a bit.


Information technology, Employment, and the Future of Economic Growth

                In 1930, John Maynard Keynes published a short essay entitled “Economic Possibilities for our Grandchildren”. In it, he argued that the revolutions currently underway in technologically advanced capitalist countries would, in the century or so, bring about “the greatest change which has ever occurred in the material environment of life for the human beings”. That change would be, in short, the resolution of the “economic problem”. The “struggle for subsistence” will be ended. The miracles of capital accumulation and compound interest will provide, for all human beings, enough. And this, Keynes notes, will force us to confront a new problem: what are we to do with ourselves? We will face what Keynes calls man’s “real, his permanent problem”  how to use his freedom and his leisure “to live wisely and agreeably and well”.

It has now been 83 years since Keynes published his essay. I belong to the hypothetical generation of Keynes’ grandchildren. So the question is: are we there yet? Or rather, since we are obviously not entirely there, is this where we are going (in the next twenty years, even)? Is this where the “leading sectors” and “leading economies” have arrived? Is the economic problem solved? In 1995, Jeremy Rifkin suggested that yes, Keynes was right: we have arrived at the “End of Work”. Since 1995, the debate has continued in earnest. While no one seriously argues that the End of Work has been achieved everywhere and for everyone, there are those who assert that the fundamental social transformation which Keynes foresaw is, indeed, coming. Others dismiss this as a profound misunderstanding, either of the facts on the ground, or of the nature of the capitalist enterprise. Today, that debate has to some extent merged with the ongoing attempt to grapple with America’s economic turmoil since 2008. The recession has introduced not only increasing unemployment but also income inequality and economic uncertainty to the American landscape. Some commentators interpret these developments within the normal context of business cycles, but others look for broader answers

One important way of understanding our current economic situation is to look at the role of information technology. Computers and the internet have wrought major changes in the global economy, and in order to understand where the economy is going, you need to understand where ICT is leading us. In this essay, I will examine some contemporary understandings of information technology, its role in the economy, and its relationship to job growth and the labour market. This essay will have three many parts. In the first part, I will consider the effect of ICT on the distribution of value in the modern economy. I will argue that whether we look at individual supply chains, income distribution, or the rise in the financial sector, the same trend emerges; goods which are either physically or digitally replicable are decreasing in value, and abstract, intellectual activities that are increasing in value. This migration of value does of course have negative implications for many sectors.

On the other hand, the arguments of Perez, Bryolfsson and McAfee, among others, suggest that the story is not simply one of the elimination of work. They take a cyclical view of technological development, and insist that the temporary pain we are experiencing is a normal part of a technological upheaval. Periods of unemployment naturally follow the introduction of major new labour-saving technologies – it takes a while for the economy to catch up and find the new jobs. Blacksmiths and farm labourers lose their work, only to become mechanics and assembly-line workers in the new economy. This argument relies on a particular view of technology: they regard it as cyclical, rather than as a tool which progresses linearly to satisfy human needs with ever greater power. Against this cyclical view, authors such as Cowen and Kelly argue that the evolution of technology has reached an unusual place, a turning-point or plateau. I suggest that this is precisely the turning-point that Keynes foresaw, as the economy shifts from a focus on the “economic problem” to the “problem of leisure”. But this turning point does not mean the end of economic growth or of employment. Rather, it heralds an unprecedented change in the nature and purpose of employment in advanced economies.

The Basic Story: Automation and the End of Work          

In The End of Work, Jeremy Rifkin draws out the consequences of the relatively obvious point that, as productivity increases, less and less labour is required to produce more and more goods. At least since Ned Lud, there have been concerns about the consequence of this insight for workers. Rifkin argues that this concern is more valid than ever in the age of computers. He shows how technological unemployment has ravaged not just the agricultural, but also the manufacturing, service and even professional sectors[1]. Automation is working its way up the supply chain, putting more and more jobs at risk. Each decade since the depression, economists have raised their standard for what an “acceptable” level of employment is[2]. And these trends, according to Rifkin, are only going to get worse.

Rifkin offers endless anecdotes to support his key point: that as productivity increases, workers get laid off. This is the basic story about the relationship between technology and work that I would like to add to, qualify, and/or refute for the remainder of this essay. There are a couple of different ways one could object, and one of them is to point out that, in fact, productivity has not been rising as dramatically as Rifkin projects that it will. In fact, we have what is known as the Solow paradox: information technology shows up everywhere except in the productivity statistics.

In his careful treatment of the impact of IT on productivity, Alexander Field finds that the impact of IT was largely concentrated to a narrow range of sectors[3]. In other words, contrary to the complete overhaul and automation across the board that Rifkin observes and predicts, the effect of IT on non-technology-intensive industries is relatively minimal. While it is undeniable that computers have found their way into many different sectors, Fields argues that in many cases they represent only a marginally improvement the next best option for capital investment[4].The IT revolution created economic growth many by stimulating growth in the “distribution, securities trading, and a narrow range of industries within the manufacturing sector”[5].

That is not to say that productivity did not increase in other areas in the nineties and aughts. Nor is it to refute Rifkin’s basic claim that “technological unemployment” is growing. As another commentator notes, in 2013 we have seen three consecutive “jobless recoveries,” in 91, 2000, and 2008[6]. But it is to suggest that the relationship between technology and employment is more complicated than Rifkin’s narrative makes it out to be. ICT is doing more than increasing productivity (indeed, it might not be doing that all that much); it is restructuring the business world. The restructuring is shifting value around. Value is moving geographically; it is concentrating in certain places along the supply chain; and it is growing in specific sectors and jobs. None of these trends is adequately captured by a narrative which treats ICT as basically similar to previous innovative technologies.

The Relocation of Value in the Information Age

Global Competitiveness

Perhaps the most obvious effect of the spread of information technology has been the overcoming of the “tyranny of space.” Manuel Castells summarizes the transformation by saying that we now live in a ‘global’ rather than a ‘world’ economy. A global economy “is an economy with the capacity to work as a unit in real time on a planetary scale”[7]. The instantaneous communications enabled by ICT have, to varying degrees, globalized financial, labour, and consumer markets[8].  But perhaps more significantly, production itself has become a global endeavour. “The dominant segments of most economic sectors (either for goods or services) are organized worldwide in their actual operating procedures.”[9] Castells shows how the functioning of these global “webs” depends at every level on advanced ICT technology. Laser precision is required to ensure that parts made half a world away fit together; advanced inventory management techniques are required to make sure parts arrive where and when they are needed; and global communication networks are required to oversee and coordinate the whole process[10].

In other words, ICT has enabled the geographical fragmentation of value chains. Before ICT, companies invested abroad, but they were reluctant to invest in activities which had to be integrated with other parts of the supply chain. This was reluctance was due to both political and technological barriers to the flow of goods. The combination of neo-liberalism and ICT has gone a long way toward eliminating these barriers, and value chains have been correspondingly transformed.

One much-noted feature of this form of globalization is that it gives firms access to a much broader labour market. The idea of a “race to the bottom” oversimplifies things, but it points to a real phenomenon. This is sometimes presented as an alternative explanation for unemployment and growing inequality in advanced economies, but I would point out that there is a sense in which this too is “technological unemployment”. It is ICT that enables these global supply chains. In this sense we might say that ICT, by increasing the level of competition in the labour market, puts a downward pressure on the value of certain kinds of labour.

Value in Supply Chains

This is by no means the only transformation in value chains that ICT has wrought. Jason Dedrick, Kenneth Kramer and Greg Linden have conducted a series of studies in which they broke down advanced consumer electronics like iPhones into its component parts, and then estimated the value of each of those individual parts[11]. This procedure provides insight into how value is distributed across the globe in these globalized “webs”. And it also tells us something about which sorts of activities hold value in the contemporary economy.

What they found was that the companies that are able to capture the largest profit are companies like Intel, Microsoft, and Apple, which “set and control a standard”. This is striking. It means that it is not, really, the quality of the physical product which is the key source of the value for these companies. Firms which produce state-of-the-art outputs fill the entire supply chain of an iPhone. It is rather control over the idea or standard that differentiates firms.

Why is this? To a large extent, it is precisely the existence of a highly competitive global economy. Because production can be so seamlessly distributed around the world, margins on production are eaten away. That is not to say that you can’t make money, or even a lot of money, simply producing quality goods. But the truly spectacular profits lie in innovation and control, in harvesting the Schumpeterian rents that come from developing a new product. Tassey, among many others, argues that it is only by relentlessly innovating that the American economy can hope to maintain its edge[12].

Value in Labour

A somewhat analogous transformation has taken place in the labour market. There too, it is control of a unique, often intangible product that lends a decisive edge. Eric Brynolfsson and Andrew McAfee identify three trends in the way wealth is being distributed to workers. Each of these trends represents a threat to the “median worker,” whose job is almost by definition vulnerable to either international or technological competition[13]. The first and perhaps most obvious of these trends is the growing gap between high skill and low skill workers. Education, as a means of defense against technological unemployment, is becomes increasingly important for determining employment outcomes[14]. Factory automation is the classic example of how this happens; technological change destroys many low-skill jobs, while at the same time creating some highly skilled jobs for those who maintain and oversee the new machine.

The second trend that Brynolfsson and McAfee identify is a growing gap between the performance of ‘superstars’ and everyone else[15]. To some extent, this could be seen as an extension of the first trend, in the sense that ‘superstars’ are presumably the most skilled among the highly skilled workers. But the difference is that superstars are uniquely positioned to take advantage of the effects of globalization and long, complex supply chains. On the one hand, there is an elite group of performers and artists (for example) who are able to reach larger consumer markets than ever before. The gap between the very best musician and merely very good musicians has thus increased, because the best musicians are able to compete in virtually every market. On the other hand, there is another group of ‘superstars’ who reap the advantages of enormous globalized supply chains, which magnify the consequences of key strategic decisions.  The leaders of these enormous, globalized companies hold more power in their hands than the CEO of a merely national corporation did 50 years ago, and they are compensated accordingly.

These superstars doubly benefit from the ways that value has been re-distributed by technology. First, they are clear winners in the technology-driven process of globalization. Second, they are almost by definition holders of a set of highly specialized skills and talents that cannot be reproduced. They are thus the least at risk of technological unemployment, and the best positioned to use technology to their own advantage.

The third trend which Brynolfsson and McAfee identify is the growing imbalance between capital and labor. Capital is earning a larger and larger slice of the profits from production; corporate profits are at a 50 year high, while labor compensation is at a 50-year low. Brynolfsson and McAfee explain this by suggesting that the value of capital’s contribution, in the form of ever-improving technologies, is increasing, and that it is therefore able to bargain for a larger portion of profits relative to labor. To this I would add that technology has also transformed the nature of capital – specifically, by changing the meaning of firm ownership. Lazonick describes this process in terms of a shift from the “Old Economy Business Model” (OEBM) to the “New Economy Business Model” (NEBM).

Value in ownership

Both globalization and the ‘abstraction’ of value away from concrete things and into ideas and innovations have contributed to the rise of what Lazonick calls the “New Economy Business Model”. As opposed to the “Old Economy Business Model,” the NEBM is notable for the absence of lifetime employment or large organizational hierarchies. But it is also, as Lazonick demonstrates, intimately tied up with a novel use of stock to finance its growth and compensate its employees. This focus on stock has given rise to the “ideology of shareholder value” which Lazonick sees as a major problem with the current US economy. But let’s take a step back, and consider what this shift to stock actually means.

In the OEBM, stock-holders received dividend payments, and this was understood to be the main source of value from holding stocks. Lazonick shows how, through a process of de-regulation, the development of the NASDAQ, and the peculiar history of venture capital growth in Silicon Valley, the focus shifted to capital gains. New businesses, and the venture capitalists that backed them, made their fortune on the capital gains from an IPO or a buyout by a larger company[16]. Employees in turn were compensated partially in stock options, rather than traditional salaries and benefits[17].

Lazonick is deeply critical of what he characterizes as the “ideology of shareholder value” which has emerged in this new system. According to that ideology, the over-ridding objective of a manager should be to maximize shareholder value, even at the expense of other possible objectives like retaining loyal employees or creating jobs to support the American economy[18]. For Lazonick, this ideology is a disaster. But again, I would point out that to a certain extent this ideology has grown hand-in-hand with technological changes which both make it possible and enable it further. The peculiar liquidity of high-tech start-ups is a source of their strength: the possibility for a successful IPO allowed many new ideas to get off of the ground. But the system that supported it – notably, the NASDAQ, was profoundly dependent on ICT to facilitate its day-to-day operations. In light of the technological possibilities that ICT opened up in the world of finance, it was almost inevitable that company ownership would undergo some sort of revolution.

Indeed, the rise of “shareholder value” was one of the less extraordinary of the financial developments that emerged in response to the new-found ease of trading stocks and computing algorithms. And this, too, has had anti-egalitarian economic implications: the financial sector has been one of the fastest growing and most profitable in the American economy. In 2005, it accounted for 8 percent of US GDP[19]. But it is at least a matter for debate, especially since 2008, to what degree this sector actually contributed to the real economy[20]. That this paradox can exist, that there can be an enormously profitable sector that does not obviously contribute much to the real economy, is perhaps the clearest illustration of my basic argument that value has been relocated into increasingly abstract and intangible activities and products.

The Role of Technology

In Race Against the Machine, Brynolfsson and McAfee offer a simple explanation for the retreat of value into the realm of ideas, growing income inequality, and the rise in unemployment. It is technology’s fault, but not in the way Rifkin suggested. Their key claim is that it is not inevitable that new technologies and increasing productivity create jobs; they are more optimistic than Rifkin that new jobs will be created in new fields. The problem right now is that technology is simply advancing too quickly. They take Moore’s law, which says that the speed of processors doubles approximately every 18 months, and draw out its historical implications. Over time, they point out, the effects of cumulative doubling become more and more dramatic. If you double your way across a chess board, the first 32 steps are not all that impressive. It’s only when you reach the second half of the chessboard that things start to get really out of control. And if you do the math, it turns out that in the history of the microprocessor, we should be hitting the second half of the chessboard right about now.

To a certain extent, this is just Rifkin’s argument re-hashed 18 years later. Whereas Rifkin thought that the changes wrought by computers and robots in the late nineties would be all-pervasive and job-destroying, Brynolfsson and McAfee think that it’s the changes that are coming in the next twenty years that will be the most dramatic. But there is a key difference as well, in that it is not the nature but rather the rate of technological change that is causing the problem. That suggests that any unemployment or hardship is temporary and reversible. Brynolfsson and McAfee retain a basic faith that progress will continue, and that sooner or later new jobs will emerge to take the place of these old ones. Technological challenge is a force that must be mastered, rather than surrendered to.

The Long Wave Approach

At the core of this faith in eventual renewal is a firm belief in the power of technology to produce new opportunities and avenues for growth. Brynolfsson and McAfee do not say a lot about why they believe this, nor about how exactly this renewal is supposed to take place. To understand this, it is useful to turn to the work of “long-wave” economic theorists like Carlotta Perez and Chris Freeman, who devote a great deal of energy to understanding precisely the question of how technological change generates cycles of creative destruction and renewal.

Perez, Freeman, Louca and others argue that at the core of the rise and fall of ‘leading’ economies is the emergence of key new technologies [21]. Examples of key technologies include steam power and internal combustion. Over time, these technologies affect virtually every aspect of the economy. At first, the effects are limited to a few key sectors, but over time they are integrated into all areas of production and economic activity[22]. This overhaul requires not only a change in technologies, but also a change in processes and the institutions to support and exploit the new technologies. In this way, these key technologies create a new ‘common sense,’ a set of best practices that guides not only current but also future economic activity. To capture this, they are sometimes referred to as “paradigms”[23].

Paradigms have life cycles. As a new technology emerges and makes its effects felt throughout the economy, the old paradigm must go through a period of crisis and decline. This is “creative destruction” in Schumpeter’s sense – the kind of destruction that opens up new opportunities. This suggests a slightly different reading of our current economic turmoil than the one proposed by Brynolfsson and McAfee. While they are right to point to our stage in the development of ICT, they are wrong to suggest that the problem is that we are in the “second half of the chessboard”. Or perhaps they are even right about that, but they fail to grasp the significance of this development as a necessary structural feature of economic growth. As Perez explains, bubbles and crashes play a crucial, endogenous role in the economy by driving the negative side of a paradigm shift – the creative destruction of the old economy[24]. Perez argues that the two recessions of 2001 and 2008 can both be understood as part of the same structural phenomenon – the transition from an old paradigm to a new one[25].

The ‘Long Hanging Fruit” Thesis

Tyler Cowen takes a rather different view of things. For him, we are in the era of “The Great Stagnation”. He points to various signs – especially the extremely slow growth in median income in the last forty years – as evidence that the economy has not been growing for quite some time. He sides with Castells in arguing that the effects of the ICT revolution have been relatively narrow. For the most part, he argues, American’s lives have not improved significantly in the last forty years.

One of the most interesting things about Cowen’s argument is that he explicitly connects this to problem to the problem of technological innovation and change. He argues that recent innovations have simply failed to produce the kinds of large-scale rewards that past innovations have done. We have eaten all of the “low-hanging fruit”. Much of this fruit, he acknowledges, was circumstantial – ‘free’ (stolen) land, immigrant labour, etc. But some of it was technological, as we reaped the benefits of electricity, lighting, automobiles, etc. Now, we have reached a technological plateau. He even has a somewhat dubious graph which shows “innovations” since the Middle Ages. The curve starts to drop in the late 1800s, and drops sharply in the last forty years. I’m curious to know how exactly “innovation” is being measured here, but it does illustrate Cowen’s point nicely.

It’s not enough, however, for Cowen to argue that we are innovating less. He also must show that recent inventions – especially the internet – have not actually done a whole lot to increase our economic well-being; that they represent marginal, rather than paradigm-shifting, improvements. And that is what he does. In fact, it turns out that he is quite a bit more impressed by the internet than his initial argument might suggest – he acknowledges that it yields considerable gains in human happiness.  But the problem is that these are not economic gains, and so “you can be an optimist when it comes to our happiness and personal growth yet still be a pessimist when it comes to generating economic revenue or paying back our financial debts”. He goes on to argue that “most Web activities do not generate jobs and revenue at the rate of past technological breakthroughs”.

For Cowen, this is a fundamentally problematic development. He highlights the negative consequence that would come if this trend continues. The fact is that our system is built to grow, and in the absence of growth it will fall apart. Stop-gap strategies like large-scale borrowing are just that, stop gaps.

Cowen and Brynolfsson and McAfee are analyzing basically the same trends, and they mostly agree in their assessment of our present situation. They differ sharply, however, in their understanding of the current state of technology. For Cowen, we don’t have jobs or growth because we are not innovating enough. For Brynolfsson and McAfee, we are in innovating too fast, and the workforce can’t keep up. To a certain extent, it comes down to the question: just how useful do you think the internet, or ICT more broadly, is?

The Post-Productive Economy

This debate recurs in a recent exchange between Robert Gordon and Kevin Kelly[26]. In the course of a broader debate about whether US economic growth is ‘over,’ at least for now, Gordon makes an argument that is broadly similar to Cowen’s. He asks, to paraphrase, would you rather have an iPhone or a toilet? The answer seems obvious, and this leads one to Cowen’s conclusion that the previous industrial revolutions were ultimately more important than this one.

Kevin Kelly offers a couple of arguments in response. Most interestingly, he claims that talking about the productivity from these new innovations fundamentally gets the question wrong. The wealth that ICT will bring us “will not be found merely in greater productivity, but in greater degrees of playing, creating, and exploring”[27]. We are entering an era when human beings will make economic ‘progress’ in entirely new directions. Kelly draws an analogy to an evolving life form[28]. A life form could improve its metabolism and become larger or more efficient. But it could also advance in other ways; leaving its metabolism at the same level of “productivity” it might grow more perceptive, more complex, and more fertile. All of these changes would still represent an advancement. But none would be an increase in productivity.

Cowen suggested something like this about the internet. He acknowledged that it was more fun, that it represented a certain kind of progress. But he remained concerned about the economic implications. Kelly is more hopeful about the economic implications. And Kelly’s optimism makes clear what Cowen’s pessimism obscures: that in some very real way, we have reached the stage the Keynes predicted we would. The internet is, to a substantial degree, a solution not to economic problem but to the problem of leisure. Kelly predicts that it will be these developments, the emergence of new things to do, rather than better ways of doing old things, that will characterize the economy of the future.

Linear vs. Cyclical View of Progress

The economists I have considered can, I think, be divided into two very broad camps on the question of the relation of technology to human need. Keynes, Cowen and Kelly all, to some degree and perhaps implicitly, suggest that the role of technology is to aid human beings in satisfying their needs. This means, in turn, that human needs are in some sense satisfy-able. They implicitly subscribe to something like Maslow’s hierarchy of needs – and also thereby to the idea that if you can satisfy all of most of those needs, technology has pretty much accomplished its purpose. The whole idea behind “low hanging fruit” expresses this notion. The low-hanging fruit was man’s obvious human needs. There was a lot of money to be made in feeding and sheltering people better. Now, people are already fed and sheltered, and the trick is to make a lot of money selling them stuff that they don’t, technically, need. Rifkin makes it clear that this dynamic has been around since at least the 1920s, and drove the rise of advertising in America.

In contrast to this, you have the view of technology as a self-perpetuating system. This idea is implicit in the notion of technological paradigms, but it is more clearly developed in Brian Arthur’s The Nature of Technology. The key to his argument is the idea that innovations are produced by combining pre-existing innovations[29]. This insight is almost tautological – what else could innovations be produced by? But it has far-reaching implications, because it means that every innovation, at least potentially, creates the possibility for all sorts of new combinations. And once you’ve been running the system for a while, and you’ve advanced beyond combinations of stone and wood, the possibilities start to become endless.

This is the view of technology which lies behind the idea of a paradigm. The idea of a revolutionary technology is one that permits an enormous range of new, useful combinations. Many, many aspects of life can be improved by combining existing practices and technologies with electricity, for example. What’s clear about this view is that there can be no end to the cycle. At least as long as human beings remain remotely curious or industrious creatures, there will always be novel combinations worth trying.

A more human, more creative world

These two perspectives on technology have very different implications. But they are both, I would argue, basically correct. We cannot let the important fact that economic growth and technological change is cyclical blind us to the equally important fact that things really are different this time. The basic humans needs have been, for a privileged segment of the world, met. Our economic system and our economic behaviour will inevitably reflect this fact.

I think we can see this change if we examine the shifts in value that I outlined in my discussion of technology. Globalized production chains, New Economy Business strategies, and contemporary employment trends all point to intangible, intellectual products as the real sources of value in today’s economy. While it is certainly to some extent true that innovative new ideas have always been tremendously valuable, in the past these ideas had a more concrete, determinate nature. The best design for a ship, or the best way to organize a supply line, has to be put into practice in order for it to have value. But because of the considerable premium now placed on flexibility and change, it is not the definite idea so much as the capacity to come up with ideas that is valuable. This is a kind of meta-value; the value is not in producing a thing, nor is it in the technique for building a thing, but rather in the process by which techniques are generated. This continual abstraction away from physical and into intangible intellectual goods is itself a kind of “low-hanging fruit” conundrum. Automation makes it not just possible but (relatively) easy to produce high-quality products. Software makes it easy to design efficient processes. What is still difficult – and therefore still valuable – is the application of efficient process in optimal ways. When we think of it in terms of manufacturing, this challenge seems to belong on a continuum of value-generating activities. But from a broader social stand-point, this is really the challenge of, as Kelly says, “finding new things to do”. Innovators, unlike labourers or managers, have a lot in common with artists and other “creators”. They belong to the group that Richard Florida has termed the “creative class”.

Another way to say this would be to make the simple point that computers can do many things that have previously been the exclusive domain of human beings. This has pushed the realm of distinctively human activity “up,” if you will, into those things which computers still cannot do. These things are usually intellectual, social, and/or creative. To the degree that these have always been distinctively human characteristics (Aristotle does define man as both a rational and a social creature), we might say that we are now living in a more “humanized” world. The challenges which we face are, more than even, human challenges. They are the problems leisure, of how to live a humanly good life, rather than the problems of economics, how to satisfy the needs of life.

But none of this eliminates the fact that technology and the economy will go on. We are not at the end of work. This is true not only in the obvious and important sense that it is only an elite few who enjoy the benefits of our advanced society, but also in the sense that new technologies will create new opportunities, and people will continue to investigate and to exploit these opportunities. What has changed is the nature of these opportunities, and the nature of this work. Already, the most obvious jobs being created by the internet are things like blogger and youtube videographer or singer which heavily rely on creative and intellectual skills.


In this paper, I have considered our present economic situation in light of Keynes’s 1930 prediction that in 100 years, the economic problem would be solved. I have argued that, to a considerable extent, Keynes was right. This is not to say that human beings no longer need to work, but rather that work, for a large and ever-growing portion of the population, takes the form of activities that involve intellect, problem solving, and creativity. This is not to understate the challenges the modern workforce faces, and in this sense Keynes’ “problem of leisure” is perhaps a misleading formulation. At least, we must take it very seriously as a genuine problem – what are all these humans beings to do? What is left for them to do? I have argued the Information technology has played a decisive role in forcing this question, by redistributing value in radical ways, that have not yet been adequately dealt with. But by placing ICT at the center of the analysis, I have also raised a central ambiguity: what is the relationship between technology and human needs. Implicit in the idea that technology will “solve” the “economic problem” is a notion that the economic problem is solvable – that human needs are finite. But if one approaches the problem instead from the perspective of technology itself, it is clear that this problem cannot be simply solved; new possibilities and opportunities will always exist.

To clarify this, I find it helpful to move from Keynes language of leisure to Marx’s dialectical analysis as it is presented, not in his economic reflections, but rather in his philosophical musings on the nature of communism. In his 1844 manuscripts, Marx explains that communism represents the overcoming of the basic opposition between man and nature. The conflict between man and nature parallels Keynes’ economic problem. But for Marx, the subsequent state is not characterized by leisure, but rather by free, creative activity. Central to Marx’s analysis is the claim that only with the aid of technology are we able to become fully human, because only technology enables us to live in a fully humanized world[30]. Our senses are transformed; taste, a “natural” sense is humanized when we eat, no longer because we are hungry, but because the chef has prepared an exquisite meal. As more and more of our needs are distinctively human needs, we are less and less bound in conflict with nature. The internet, I have argued in this essay, has transformed the economy such that only those ‘distinctively human’ needs and activities continue to have considerable value. This is what I was trying to get at with my language of “intellectual,” “abstract,” “creative,” “innovative” – a sense that the modern economy is importantly detached from nature, that we live in a watershed moment in the transition from a “fully natural” to a “fully human” world. To live in an “innovative” economy, as so many of the authors considered insist that we do and we must, is to live in a humanized world of free creation.

Works Cited

Arthur, W. Brian, The Nature of Technology: What It is and How It Evolves. (Simon and Schuster: New York 2009)

Brynjolfsson, Erik and Andrew McAfee, Race Against the Machine: How the Digital Revolution

is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming

Employment and the Economy.  (Digital Frontier Press: Massachussets, 2011) E-Book.


Cowen, Tyler. The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern

History, Got Sick, and Will(Eventually) Feel Better. (New York: Penguin, 2010) E-Book

Dedrick, Jason, Kenneth Kramer and Greg Linden, “Who Profits from Innovation in Global

Value Chains? A Study of the iPod and Notebook PCs,” Industry Studies Association

Working Paper WP-2008-15

Freeman, Chris and Francisco Louca, “Introduction: Technological Change and Long Waves in Economic Development,” in As Time Goes By: From the Industrial Revolutions to the Information Revolution, (Oxford University Press: Oxford, 2001) pp. 139-151.


Gordon, Robert. “Is U.S. Economic Growth Over? Faltering Innovation Confronts The Six

Headwinds,” CEPR Policy Insight No. 63, September. 2012.

Kelly, Kevin. (2013), “The Post-Productive Economy,”

Keynes, John Meynard. “The Economic Possibilities of our Grandchildren” (1930)

Marx, Karl. Economic and Philosophical Manuscripts of 1844. trans. Martin Milligan (New York: Dover Publications, 2007).

Perez, Carlota, Technological Revolutions and Financial Capital, (Edward Elgar Publishing: New York, 2002) pp. 36-59.

Perez Carlota, “The double buble at the turn of the century: technological roots and structural

implications,” Cambridge Journal of Economics 33 (2009): 779-805

Perez, Carlota, Technological revolutions and techno-economic paradigms,” Cambridge

Journal of Economics 34 (2010): 185-202.

Tassey, Gregory “Globalization of technology-based growth: the policy imperative,” Journal of

Technology Transfer 33 (2008):560–578

The Economist “Economist Debates: Financial Innovation” 23 February 2010.

[1] Rifkin (1995)

[2] ibid

[3] Field (2012)

[4] ibid p. 140

[5] ibid p. 122

[6] Brynolfsson and McAfee

[7] Castells pp. 92

[8] ibid 93-95

[9] ibid 96

[10] ibid 97

[11] Jason Dedrick, Kenneth Kramer and Greg Linden (2008, 2009)

[12] Tassey (2008)

[13] Brynolfsson and McAfee (2012) ch. 3

[14] ibid

[15] ibid

[16] Lazonick (2009) pp. 3

[17] ibid

[18] ibid 48

[19] Cowen ch. 2

[20] See the Economist 23 February 2010 debate

[21] Freeman and Louca (2001), Perez  (2002, 2010)

[22] Perez (2002) pp. 36-28

[23] Perez (2010)

[24] Perez (2009)

[25] Ibid

[26] Gordon (2012), Kelly (2012)

[27] ibid

[28] ibid

[29] Arthur (2010) p. 34

[30] Marx (1844) “Private Property and Communism”




The Myth of the Independent Subject. featuring Charles Taylor and Alasdair MacIntyre

One of the dominant myths of our time is that of the ‘independent subject’ (also known as the “transcendental ego,” the “Cartesian Subject” or the “true self”) . In short, this myth states that there is some “I” that exists, separate from ‘incidental’ features like my height, skin color, or family background, who makes choices about my life. This independent subject is the essence of my “identity;” it is “who I am” at the most basic level. It is usually what we are referring to when we say that “deep down we are all the same”. Politically, this motivates the “personal responsibility” right and the “free to choose your own way” left. And while I think that personal responsibility and freedom of choice are pretty good things, I also think that this way of thinking about human beings is confused.

I find it interesting that both “radical” leftist forces and extremely conservative right wing forces agree that this is a central mistake of modernity. For the left, the mistake is in believing that there is a universal experience of being human – that we can sensibly talk about human beings in the abstract, leaving aside questions of gender, race, and physical ability. Feminist and critical race scholars, for example, have argued that the supposedly universal “independent subject” is in fact the “white male subject”. For the right, the mistake has to do with the way that the emphasis on the uniqueness of the individual breaks down community, religion, and family ties. I’m sympathetic to both of these positions, and so quite sceptical to the idea that we are basically independent thinking subjects.

A big part of this scepticism comes from the importance that “communitarian” philosophers like Charles Taylor and Alasdair MacIntyre play in my thinking. These philosophers are critical of the myth of the independent subject, and they also go a long way towards developing a more useful way to think about human identity and subjectivity.

What follows is an excerpt from an essay I wrote about Taylor and MacIntyre. It includes a sort of fun bit about cowboys, which is meant to illustrate what I think is wrong with the idea that we are really just independent actors. The main thrust of the argument is that human beings always exist in a variety of contexts, and you have to understand these various contexts in order to understand their “individual” identities.


Taylor’s Framework

In the opening sections of Sources of the Self, Taylor outlines three major features of the human condition. In each case, his characterization pulls against a major impulse in modern culture. And yet, according to Taylor, it is impossible to understand our human situation without recourse to these three features. This will form the basis for Taylor’s argument that modernity is “inarticulate”, which I will return to below.

The three features of the human condition that Taylor emphasizes are its embedddedness in society, its orientation toward the good, and its narrative structure. Taylor talks about each of these as fundamental attributes of the “self” or of “identity”. I know who I am only by recourse to these three features.

Taylor argues that a human self is inescapably situated within a socio-linguistic context (Sources, chapter 2.2). This argument receives the most attention in the liberal communitarian debate. Taylor is explicitly distancing himself from the modern idea of the subject as an a priori chooser, capable of a fundamentally dis-interested relationship to his social context.  Taylor argues that human identity, our sense of self, is formed dialogically, in conversations with “other selves” (35). This means that human identity is formed a) with others and b) in language. And this is not simply a fact about the genesis of human identity; it remains an inescapable feature of it throughout one’s life (36).

Taylor’s second point is that human beings are inescapably oriented toward a conception of the good (chapter 2.3). Again, Taylor sees this as a fundamental feature of “having an identity”. One of the most important ways I understand “who I am” is by understanding what I value – what motivates me and what I aspire to: “in order to understand, make minimal sense of our lives, in order to have an identity, we need an orientation to the good, which means some sense of qualitative distinction, of the incomparably higher” (47). This link between an idea of the good and our sense of self is embodied in our everyday language: when someone loses a sense of what is good (a Catholic who suddenly stops believing in God, or a life-long capitalist who realizes that his money cannot bring him happiness), we say that they are having an “identity crisis”. Here Taylor is differentiating himself from a common modern position, which claims to do without an overarching sense of “the good”. For Taylor, to reject constitutive goods is to reject the self.

The third essential feature of human identity is its narrative structure. I understand who I am in terms of a story; a story of where I came from, and a story of where I am going (47-48). The other two features of identity make themselves felt here, since the story of my life a) is told to and about my “significant others” and b) has to do with my values, with my sense what makes my life worth living. It is essential to this conception that we are consistently re-telling the story of our lives– so a break-up or a conversion or some other major event might always cast things in an entirely new light. Indeed, it might demand a whole new story, which would indicate that I have become, in some sense, a new person. But only in some sense, because my “newness” is always relative to the “old”. There is good sense to the statement “I am no longer the person who married that woman,” but only because you can tell a story about how you got from A to B. There is a narrative unity that connects these two “me’s.”

A Counter Example: The Lone Ranger

Each of these three points is controversial. Taylor claims that they are inescapable features of human identity, but it is not difficult for us to imagine an individual who does without them. Indeed (and this is Taylor’s point) a major tendency in the modern world is to understand individual freedom precisely as not being determined by ‘contingent’ circumstances. The truly free individual is the one who is able to make it on his own. This ideal is embodied in various artistic works and archetypes – perhaps most clearly in the type of the “lone ranger” or “cowboy”. For my purposes, I will treat the lone ranger as an embodiment of the modern ideal of individual freedom. He will therefore serve as a test case for Taylor’s arguments; if even the lone ranger turns out to be incomprehensible without recourse to the categories Taylor proposes, we will have good reason for using those categories.

Imagine a self-sufficient pragmatist: a cowboy. This individual has cast off his past. To be sure, he was once a child, but he has moved far from home. He’s taken a new name: the boy John Smith died when he left New York fifteen years ago. And just as he has rejected his past, he has rejected the ideals that came along with it. This man deals with the task in front of him, and has little patience for abstract moralizing about what is “good” or “right”. I suppose you could try to tell the story of his life, but if you asked him he would probably tell you it has been “one damn thing after another”.

This image is useful, not only because it is an apparent counter-example, but because it embodies a typically modern, typically liberal, typically American ideal. The ideals this character embodies inform much of the contemporary liberal philosophy against which Taylor develops his position. So let’s consider Taylor’s hypothetical response, point by point.

Taylor’s argument in essence is that rebellion from one’s past is just another form of relating to one’s past. So the cowboy has not actually rejected his past. Rejecting one’s alcoholic father and pious mother are just ways of continuing the dialogue with one’s significant others. Taylor might point to the common tropes in cowboy films that reinforce this point; the protagonist who hates drunks “‘cause his daddy was one,” or who goes out of his way to help a widow who reminds him of his mother. There is no such thing as simply escaping one’s past.

The cowboy claims not to worry about abstract questions of “good;” he faces the problems in front of him. Taylor acknowledges that this or that particular good can be left aside or abandoned, but this is not the same as doing without a good. At the very least, the cowboy’s insistence on self-sufficiency, his demand that he rely on no one but himself, indicates a certain valuing of freedom. And just like anyone else, he can tell a story about how he became more and less free. He used to think that he was freer in town, where he didn’t have to worry about criminals. But now he sees that he was relying on the sheriff, and that made him weak when the criminals did come around.

This example is not artificially chosen; it is almost exactly Taylor’s diagnosis of the modern condition. Like the cowboy, modernity is inarticulate about what motivates it. It has a certain set of values – most notably freedom understood as self-sufficiency – which resist understanding oneself in relation to a higher good and to a community. But the higher good is precisely freedom, and that ideal of freedom is characteristic of a certain community in a definite time and place. Being a self-sufficient individual is typical of “the American Way”.

Alasdair MacIntyre

In After Virtue, Alasdair Macintyre gives a very similar account of the human subject. Like Taylor, he develops his position in explicit opposition to the naturalist, liberal temper that he thinks dominates modern philosophy. The key to MacIntyre’s account is his notion of a “practice”. A practice is an activity that lends meaning and structure to our actions (a good example is the game of chess). Practices are the basic unit for understanding human action; no action is comprehensible outside of the practice or set of practices to which it belongs. MacIntyre winds up echoing Taylor’s arguments about the basic conditions for human identity. Practices are inescapably social (I can only play chess with someone else, and within the broader community of chess-players who have agreed on the rules of playing chess). They inevitably orient themselves toward some conception of the good (there is a “good” chess game). And they are made sense of by narrative (I was playing poorly until I succeeded in capturing his queen, then things turned around).

There are, however, important differences in how MacIntyre and Taylor would understand the figure of the cowboy. For MacIntyre, the rejections of tradition, of community, and of an ideal of the good have a little more substance. The cowboy really does try to live without these things. Of course, he does not fully succeed, because they are inescapable features of the human tradition. But by placing himself outside of his tradition and community, the cowboy (and the modern individual generally) experiences a real loss. His life is fragmented. He loses the ability to make sense of the various demands put upon him; he no longer has any means by which to resolve conflicts between competing demands. For Taylor, the cowboy has simply moved from one kind of relationship to his tradition to a different one; for MacIntyre, he has placed himself in a paradoxical position of trying to do without a tradition. This parallels their respective diagnoses of modernity. For Taylor, modernity is inarticulate about its (nevertheless fully present) relationship to tradition; for MacIntyre, modernity is incoherent because it has moved away from tradition (and community and a conception of the good).