Email of the day (1)
Comment of the Day

April 18 2012

Commentary by David Fuller

Email of the day (1)

On "Wrenching Structural Change":
"I thought this was an excellent summary of what is happening today as a result of the impact of technology and globalisation. Trying to understand and benefit from these changes (or at least, not become "road-kill") has been a life-long interest of mine. I do sense - along with the views expressed - that we are at a point of significant transition in terms of how wealth will be created in future. It perhaps means that autonomies, along with every other incumbent business entity, will have to be nimble not to become casualties. Google appears at least to be alert to these threats. I thought the article may be of interest to the collective."

David Fuller's view Thanks for your email and the article by Clive Cook for Bloomberg. I think many of us will agree and identify with your comments, and particularly the second sentence at a personal level. We do live in a time of accelerated change due to globalisation and technology in particular. For the most part I feel that these are very positive changes, making the world much more efficient and lifting hundreds of millions of people out of poverty, but they are also very threatening for those who find themselves marginalised by the processes.

Here is Clive Cook's conclusion:

What's new is the rate of change. The IT revolution won't take 200 years to work through. And telling an unemployable American middle manager in 2012 that change is good is not going to be any less wrenching, or any more adequate, than saying the same thing was to a British handloom operator at the turn of the 19th century. Conservatives mistakenly assume that they can tell capitalism's losers that "creative destruction is how capitalism works" and leave it at that. It's not sufficient, and it's not good politics, either. If structural change is accelerating and income inequality is only in midsurge, as seems likely, it's more wrong now than ever before. The winners do owe something to the losers -- and the more abrupt the transformation, the more they owe.

The equal and opposite mistake of the left, of course, is to see the whole idea of creative destruction as a scam. Structural unemployment and growing inequality are not byproducts of a hugely beneficial process of economic change, but evidence of a crime. The vocabulary is telling. The nefarious 1 percent are somehow "capturing" more of the value that the rest of us create. The Instagram people get a pass, I see. What they did was cool. But it's different when the market gives magnificent rewards to men in suits. That's stealing, and it has to stop.

Left and right will never come together on what winners owe losers. Let's hope not, anyway. There's no right answer and plenty of room for disagreement. But disagreement should be intelligent. Small-government conservatives and big-government liberals need to update their thinking, see what's different about this new industrial revolution, understand what's good and what's bad, and thoroughly re-examine their traditional policy prescriptions.

I've got some things to suggest. I'll offer conservatives some specific ideas next week and the left, the week after that.

I think Clive Cook's article, and I hope to see the follow-ups, may have been inspired by a column published a week ago, which follows. I will address Email 1's point about the Autonomies' need "to be nimble not to become casualties."

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