Old states, new technologies

I agree with Adam Lent. There is no fundamental reason why the accelerating capacity of new technology to undertake tasks previously the domain of skilled humans should lead us to be pessimistic about the prospects for social progress. All things being equal, rising productivity driven by technological advance provides the basis for sustained economic growth and sustained economic growth (especially if that growth is focussed on the quality not the quantity of production) should mean more people being able to pay each other to have their needs met and desires fulfilled.

But, of course, all things are not equal. As Andrew McAfee and Erik Brynjolfsson recognise in ‘The Second Machine Age’ the impact of technological change both reflects and reinforces aspects of the social arrangements in which it appears. Neither economic nor technological determinists are right, as Evgeny Morozov has argued, different technologies interact with social reality in ways which reflect specific aspects of each. For example, email is functional for bureaucracies while social media tends to be disruptive and Twitter can be effective both as a way of mobilising protest and as a means to monitor dissent.

Thus the biggest danger of the coming third industrial revolution/second machine age (or whatever we choose to call it) is that it has the potential to map onto and further widen inequality in an era when national Governments seem particularly powerless to intervene on behalf of the greater good. Imagine if Google had been invented in the 1950s (yes, I know that was before the internet but stick with me): It would have been assumed that such a ubiquitous and essential service which makes its money largely out of expropriating other people’s labour (content) would have been at the very least highly regulated and taxed and more likely brought into public ownership.

Among the characteristics which lead McAfee and Brynjolfsson to believe that intelligent computing power will further widen inequality are these: it is only the most creative and ‘special’ people who will still have something to offer than robots don’t; and digitally based innovations can spread very quickly making huge monopoly profits for inventors and investors until another innovation comes along to make another killing for another group of super clever or super rich individuals.

Another related factor concentrating power and wealth are network effects which mean that the bigger the market share achieved by a platform, the more effective it is and the more able it is to withstand and buy out competition (think of the respective dominance and scope for rent-seeking profits of Google, Facebook, Amazon, Twitter and Kickstarter).

Without action technological change will reinforce already wide inequality. Compare this with the middle of the last century: the inventions of the first machine age – domestic electricity, motor cars and white goods - achieved ubiquity among Western consumers at a time when a much higher proportion of economic growth was recycled into the income of ordinary workers. Now – as Thomas Piketty eloquently argues – the proceeds of growth are being grabbed and hoarded by the already wealthy.

So, whilst Adam is right that we should reform education and pursue other policies to prepare our populations for the challenges and opportunities of the second machine age, these challenges will be much harder, and opportunities much fewer, unless Governments (working at home and internationally) can develop the legitimacy, confidence and know-how to ensure the benefits of the next technological revolution are fairly and wisely distributed.

Which reminds me of another of Adam’s blogs, this one on Moses Naim’s analysis of the decline of big power, particularly that of the state. The American sociologist Daniel Bell once argued that in the modern world the nation state would come to be seen as ‘too big for the small things in life and too small for the big things’. I have tended to think of this as being about the spatial dimension of governance; the need for greater devolution to localities, on the one hand, and greater international collaboration, on the other, but it is more deeply a point about power.

I have repeatedly argued that central Government and its traditional policy tools are becoming ever more blunt and dysfunctional when it comes to social policy. Yet we desperately need the unique democratic authority of Government to tackle some of the biggest problems we face; on climate, inequality, infrastructure, regulating finance, and global security. When Piketty argues for a global wealth tax or McAfee and Brynjolfsson join the ranks of those who support a minimum income guarantee, it is not so much that people object to the proposals as that they have little faith in Government to be able to enact them successfully.

All of which leads to me to conclude that part of the RSA’s pursuit of what we call the ‘Power to Create’ (releasing the creativity inherent in all of us) must be about 21st century statecraft. Technology is the most powerful single force in the modern world but its impact depends to a large degree on the choices we have made and the choices we will make. Democracy is the way we make those choices at a collective level. Unless democracy works better in twenty-first century conditions then there is no guarantee that technological progress will beget human progress.