Arnold Kling  

Shorter Diamond Age

My First Austrian Moment?... PSST vs. the First Law of Wing...

That is how I would describe Tyler Cowen's latest column.

higher income inequality will increase the appeal of traditional mores -- of discipline and hard work -- because they bolster one's chances of advancing economically

Reading that, I could not help thinking of the Vickies in Neal Stephenson's novel. You may recall that I attempted to dance around this theme at the Kauffman Foundation earlier this year.

A lot of people are noticing that the kids in Stanford's computer science program are highly upwardly mobile, and kids who are acquiring anti-business values are downwardly mobile. I could give you lots of links, but you can start with Jon Evans.

most of the developed world is struggling with debilitating levels of unemployment; but at the same time, the tech world is booming like it's 1999. Doesn't that seem kind of weird?

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CATEGORIES: Income Distribution

COMMENTS (13 to date)
Rick Hull writes:

Stephenson is probably my favorite fiction author at the moment, and this has nothing to do with economics. *Anathem* was jaw-droppingly elegant and deep (say monyafeek!) I also cannot say enough good things about *The Baroque Cycle*. I would put *Diamond Age* in a very solid 3rd place, also with the most focus on speculative economics. What I am most puzzled by in Stephenson's career is his recent (ongoing?) involvement with Intellectual Ventures, Myhrvold's patent accumulation machine that most have concluded to be an uber-patent-troll.

Jack writes:

It's either funny or disheartening to read and listen to complaints re: income mobility and OWS, because the disgruntled are really protesting a tautology, which is that if you want to make money (i.e., become upwardly mobile), you need to choose a job/career that earns money. As the kids might say, duh!

It is puzzling to me what protesters find so mysterious about this process: "You mean if I want to make money I have to *earn* money? What?"

Somehow the newest generation of students and workers is convinced that all college degrees are equal and that marketable skills don't matter.

ajb writes:

But Jack misses the point: Modern elite leftism has always had undercurrents of royalism -- the belief that a just welfare state should create bureaucracies that reward correct thinking and virtuous careers, regardless of productivity.

John David Galt writes:

"The Diamond Age" highlights some of the potential problems we'd have if technology were to put most people out of work, but it ignores others.

In his fictional world, nanotechnology has made it so cheap to produce simple goods such as food that the welfare problem disappears -- and the Vickys also try to use the tech for defense (but it fails to work). The big problem they ignore, however, is that once you have all those unemployed people on the dole, "the devil finds work for idle hands": most of them "work" anyway, in many cases on projects that destroy the Vickys' way of life. And that is not an accident, as Dr. X eventually explains to Hackworth.

The lesson to be learned, IMO, is that acceptance of multiculturalism must not extend to groups or beliefs which will not reciprocate it. Because if it does, it leads to its own destruction.

PrometheeFeu writes:

I absolutely must help Rick Hull in using this as an opportunity to lavish praise onto Stephenson despite his entanglement with Intellectual Ventures. Any good Hayekian would love the entrepreneur as a hero in Cryptonomicon and Reamde. Anybody interested in economics must read the Baroque Cycle for the awe-inspiring description of the founding of capitalism. Any good classical liberal who has toyed with the ideas of radical federalism must read the Diamond Age and Snow Crash. And anybody who even only remotely considers academia absolutely must read Anatheme.

Rick Hull writes:

ajb, interesting point. Does modern include the Victorian age? The British imperial administration abroad and concerned response to the ills of industrialization at home may have been the pinnacle of the correct thinking, virtuous bureaucracy.

Pandaemoni writes:

I agree that higher income inequality has an upside to the extent it fosters a sense that hard work and discipline are virtues. I do worry, however, that the link between hard work and those higher incomes (real or perceived) won't be as robust as we might hope and damp the effect.

In my own career, I've seen more people get jobs, promotions and opportunities based not entirely on merit, but on "connections" (though these people usually had to have some baseline level of skills, to sustain the position once their foot was in the door, others who worked harder and were more skilled didn't fare as well). I've also seen more than a few earn fortunes based on chance. Relatively less risk averse people take relatively greater risks. Most lose big, but some, by chance, do incredibly well. These people become relatively prominent (as compared to those who lose their shirts) and disproportionately attribute their success to skill and insight (but many never repeat that initial success and remain wealthy because great wealth makes it easy to remain wealthy).

I don't thing there is a fix for those two factors, or at least no fixes that I'd be willing to live with. Returns to "knowing the right people" and that chance will reward a certain number of risk takers are likely to be with us forever. That might create a sense that discipline and hard work are not the paths to wealth, especially in the face of a shrinking middle class, but rather people might be convinced, rightly or wrongly, that the system is rigged against them.

That people systematically choose the wrong fields and have a sense that they are entitled to success likely will feed this. They will, incorrectly, see their own lack of success not as the result of entering the wrong profession, but as "the system" working against them and failing to reward their hard work. It's of course true that, if you enter the wrong profession, hard work and discipline will not translate into material success and won't be rewarded by the market, even if genuine.

Rick Hull writes:

John David Galt, interesting point:

> acceptance of multiculturalism must not extend to groups or beliefs which will not reciprocate it.

I am reminded of "we must not tolerate intolerance", and also the GNU GPL (license for using computer software), in which certain freedoms must be restricted (that of redistribution without source code, among others) in order to preserve overall freedom. Godel's Incompleteness even comes to mind, with the power of self-reference.

It sounds like doublespeak to say that freedom must be restricted in order to preserve it, but clearly your freedom to position your fist is constrained by the location of my jaw.

Steve Sailer writes:

How do things work out for the Neo-Victorians at the end of "The Diamond Age" anyway?

Miguel Madeira writes:

An empirical evidence against these theory - in Portugal and Spain there are regions where the rural areas are divided in many small farms; and other regions where land ownership in (or was) in the hands of a small number of traditional families, being the majority of peasants wage-labourers.

In both Portugal and Spain, the "unequal" regions are the regions where, in popular folklore, the inhabitants have the reputation of being lazy.

[However, they are also the regions with a more hot wether; perhaps thisis the reason of the lazyness?]

Miguel Madeira writes:

More generally - I have the impression that societies with a reputation of "low work ethics" are also societies with big inequality, while "hard-work", "self-discipline", etc. are more typical of middle-class societies.

twv writes:

A booming high tech industry doesn't really surprise me. The Internet and computing tech are absolutely essential to my daily life now. Facing diminished income, I'd not forsake my iPad or my computers. I'd probably cut back on a car trip, a restaurant meal.

If this is a general feeling, consumer preferences have changed.

This is a good sign. It shows that civilization in the virtual dimension, at least, is on the ascendancy. We won't give up our virtual lives unless you pry them from our cold, deaf fingers.

Lord writes:

If you actually look at unemployment in science and tech industries, it is higher than average for those with bachelor's degrees. See Angry Bear for example. Tech may be doing better but those with tech degrees must have chosen the wrong degrees!

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