The Wealth of Humans: Work, Power, and Status in the Twenty-first Century

The Wealth of Humans: Work, Power, and Status in the Twenty-first Century

by Ryan Avent
The Wealth of Humans: Work, Power, and Status in the Twenty-first Century

The Wealth of Humans: Work, Power, and Status in the Twenty-first Century

by Ryan Avent



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None of us has ever lived through a genuine industrial revolution. Until now.

Digital technology is transforming every corner of the economy, fundamentally altering the way things are done, who does them, and what they earn for their efforts. In The Wealth of Humans, Economist editor Ryan Avent brings up-to-the-minute research and reporting to bear on the major economic question of our time: can the modern world manage technological changes every bit as disruptive as those that shook the socioeconomic landscape of the 19th century?

Traveling from Shenzhen, to Gothenburg, to Mumbai, to Silicon Valley, Avent investigates the meaning of work in the twenty-first century: how technology is upending time-tested business models and thrusting workers of all kinds into a world wholly unlike that of a generation ago. It's a world in which the relationships between capital and labor and between rich and poor have been overturned.

Past revolutions required rewriting the social contract: this one is unlikely to demand anything less. Avent looks to the history of the Industrial Revolution and the work of numerous experts for lessons in reordering society. The future needn't be bleak, but as The Wealth of Humans explains, we can't expect to restructure the world without a wrenching rethinking of what an economy should be.

Product Details

ISBN-13: 9781466887190
Publisher: St. Martin's Publishing Group
Publication date: 09/20/2016
Sold by: Macmillan
Format: eBook
Pages: 288
File size: 506 KB

About the Author

RYAN AVENT is an economics correspondent for the Economist. He's also the primary contributor to its Free Exchange blog and a contributor to The New York Times, The Washington Post, The New Republic, The Atlantic, and The Guardian, among other publications. He is the author of a Kindle Single: The Gated City, which analyzes migration from American cities. Avent was previously an economic consultant and an industry analyst for the Bureau of Labor Statistics. He lives in London, England.
RYAN AVENT is an economics correspondent for the Economist. He's also the primary contributor to its Free Exchange blog and a contributor to The New York Times, The Washington Post, The New Republic, The Atlantic, and The Guardian, among other publications. He is the author of a Kindle Single: The Gated City, which analyzes migration from American cities. Avent was previously an economic consultant and an industry analyst for the Bureau of Labor Statistics. He lives in London, England.

Read an Excerpt

The Wealth of Humans

Work, Power, and Status in the Twenty-First Century

By Ryan Avent

St. Martin's Press

Copyright © 2016 Ryan Avent
All rights reserved.
ISBN: 978-1-4668-8719-0


The General-Purpose Technology

Technological progress used to be something you could feel in your bones. It was the thing that was all around you, turning your world on its head. It was the sensation a young man might have felt when the arrival of mechanical harvesters made his labour on a farm in the countryside unnecessary, leading him to leave for the city, where giant steel-framed towers stretched upwards in what must have seemed like the very realization of the Tower of Babel, and where a rich man might occasionally zoom by in a wheeled vehicle that, astonishingly, powered itself along without the aid of horses. It was the end of an ancient way of doing things and its replacement with something entirely different and unknown.

The industrializing economies of the nineteenth century staged extravagant World's Fairs to celebrate the world's new wonders. These extraordinary gatherings, such as London's Great Exhibition of 1851 or Chicago's World's Columbian Exposition in 1893, look in hindsight like magnificent compressions of historical time: centuries of pre-industrial life crashing at high velocity into the modern world. And so in London, Queen Victoria, whose relations would sit atop many of Europe's centuries-old monarchies, opened the London exhibition, which featured working textile machinery, early photographic technology and one of the first examples of indoor flushing public toilets. On a visit to the Crystal Palace, where the exhibition was staged, the English novelist Charlotte Brontë gushed, 'It seems as if only magic could have gathered this mass of wealth from all the ends of the earth – as if none but supernatural hands could have arranged it thus, with such a blaze and contrast of colours and marvellous power of effect.'

And in Chicago, William Cody's Wild West show was denied permission to operate within the fair itself and so set up, profitably, just outside. 'Buffalo Bill', as he was more commonly known, entertained visitors with visions of a rapidly vanishing frontier, itself a recent imposition on societies thousands of years old. At the nearby White City, among the many grand buildings built especially for the fair, the public was dazzled by electrical displays, from the lighting of the exposition itself to the wizardry of Nikola Tesla, an inventor and engineer who helped tame electrical current and develop electric motors (among other things).

People came to these fairs to see wonders – and the nineteenth and early twentieth centuries had plenty of them. But people hardly needed to go to one of these expositions to know that great and powerful change was afoot. In 1840 Chicago was a speck on the map, with a population of less than 5,000. By the time of the Columbia Exposition fifty years later, it was America's second largest city, with more than a million people, and skyscrapers beginning to reach into the air above Lake Michigan. Chicago's extraordinary rise was bound up with the arrival of the railroad, which transformed travel across the continent. Before the construction of the railroad, the stagecoach journey from New York might have taken a full month; in addition to the bumps, passengers faced the risk of breakdowns, accidents and general isolation along the long and lonely route. The arrival of the railways shrank the time needed to travel to about a day, changing the journey from a once-in-a-lifetime adventure to a commonplace.

And thanks to telegraphy, news, which had previously travelled at the same plodding pace as people and freight, now flew along at the speed of electricity: Chicagoans learned that they had been awarded the World's Fair at roughly the same time New Yorkers did. In the space of a lifetime, the world shrank from a place in which those living on the other side of the earth might just as well have been on the moon to one in which vast distances could be travelled in days, and people around the world lived and experienced the same news at more or less the same time. There was a dizzying, tangible acceleration in life that altered the world and the way people thought about it.

Life over the last sixty years has been quite placid, by contrast. The changes we have experienced are overwhelmingly of the incremental sort: televisions have become bigger, better and cheaper; automobiles are safer and more environmentally friendly, and have added bells and whistles, such as power locks and rear-window defrost. Lifespans have risen, but humanity didn't reinvent germ theory. Air travel became more ubiquitous, but we didn't reinvent powered flight. Dramatic, wrenching technological transformations occurred in a handful of economies: South Korea and Singapore, for example, and more recently China. But these were merely examples of the delayed arrival of the whirlwind that had upended rich countries in the nineteenth and early twentieth centuries.

After so long a period of modest economic evolution, many of us have forgotten that economic advance ever occurs at any other speed. Some techno-pessimists, such as Robert Gordon, an economist at Northwestern University, argue that the slowdown is irreversible. Technological progress, he argues, gathered momentum over a long period of time thanks to a series of fundamental intellectual insights. The development of a deep understanding of what electricity is and how it might be used is not something that can easily – or perhaps ever – be duplicated. The inventions that followed on from advances in the science of electricity, and in other areas, are not like water drawn from a river but like coal mined from the earth: society couldn't help but exploit the most accessible, most abundant veins first, leaving only the marginal, difficult things for later generations (like ours).

Worse, the pessimistic view runs, the deceleration in intellectual progress is itself evidence that there are few, if any, fundamental insights such as that into the science of electricity still remaining out there, waiting to be discovered. Humanity is far cleverer now than it was in the nineteenth century, they argue, and there are many more highly trained scientists and engineers working with vastly greater research and development resources. If there were an electricity-like breakthrough lurking out there in the shadows, humanity would have uncovered it already.

Pessimists point to a parallel to this intellectual counsel of despair in the economy itself. Technological progress peaked during a period from the late nineteenth century to the mid twentieth century, they assert, an era sometimes called the 'second industrial revolution' (the first having been the initial factory boom in Britain, built on the taming of steam power). This second revolution wrought fundamental changes in the world: fantastic, one-off transformations that can't be repeated. It was during this period that rich economies became electrified. This was the era in which modern sanitation and indoor plumbing were developed, and in which cities grew to truly modern size, in scale and population. It was the period that gave us what are still today the most advanced personal mobility technologies: the automobile and the airplane. It was this period that made the modern world what it is.

It was also the era in which the modern job evolved: shaped by the rise of the factory economy, by unionization and the political mobilization of the working class, and by the construction of a social safety net. By its end, the second industrial revolution handed to society a template for modern life – one or two forty-hour-perweek jobs per household, supporting a consumption-oriented middle-class lifestyle – which has been the social foundation for rich economies for most of the last half-century.

For a new technology to be as powerful as the old ones it would need to create in the world something similarly transformative. It would need to create for humanity a life as different from reality today as the life of the 1960s was from that of the late nineteenth century. Alternatively, the pessimistic view of the arc of technology, up and down the sides of one great wave of advance, implies a pace of social change that is incremental. It implies a continuation of the pattern of the second half of the twentieth century, when the children of baby boomers could expect to do as their parents had done – go to college, get a good job, have a family and buy stuff, before retiring.

The pessimistic view is ever harder to square with the evidence of change all around us. It seems increasingly clear that the decades after the second industrial revolution did not represent a slide towards stasis but a lull in the process of headlong advance. The lull has been long enough to allow us all to forget what headlong advance feels like. The digital revolution will remind us. It has slowly grown in its transformative power over the last few decades, to the point at which it is increasingly capable of inducing the same sort of historical vertigo our ancestors experienced in the 1900s. There is no telling whether, when all is said and done, the digital revolution will prove as dramatic as the technological shifts of the industrial revolutions. But it will be dramatic enough: once again, the kind of change you can feel in your bones.

For the gathering pace of change, we can thank ever-more-clever computers, which are finding uses in ever more corners of the economy. There will soon be thinking machines everywhere.


Computing is not simply another valuable invention, on a par with the washing machine or the photocopier. Digital computers represent something more fundamental: something powerful, which allows us to do things differently and better across all facets of life. Its proper analogues are steam and electricity.

In 1876 the first great exhibition to be held in America opened in Philadelphia: a Centennial Fair, part of the country's celebration of 100 years of independence. Britons were invited; a few showed off their newly developed penny-farthing bicycle – the one with the giant front wheel. But among the most impressive exhibits on display was the Corliss steam engine: a behemoth of a mechanical device, seventy feet high and weighing 650 tonnes. The 1,400 horsepower Corliss engine drove a system of belts that powered the whole of the fair's machinery hall.

George Corliss, an American engineer, patented his engine in 1849, more than eighty years after James Watt made his most critical contributions to steam-engine design. At the time, American manufacturers used a total of less than 2 million horsepower (or roughly the output of a large turbine in a modern power plant), most of which was generated by water. A half-century later, American manufacturers used more than 10 million horsepower in operating their factories, the vast majority of which was generated by steam engines, and the American economy was overtaking Britain as the world's leading industrial and technological power.

Economic historians label things such as steam power as a 'general purpose technology': an advance that can be used to do things more effectively across many different facets of life. A steam engine could be hooked up to any production facility that previously relied on wind or water or animal power. It could be affixed to transport devices – boats, cars, train engines – to make them go farther, faster, with more horsepower. Steam could be used to boost productivity in all sorts of contexts and industries. It is the general-purpose technologies – such as steam and electricity – that generate economic revolutions. And computing is a fantastically powerful general-purpose technology.

Engineers tinkered with computing machines for millennia, but the pace of advance in mechanical computing truly picked up in the nineteenth century. Early computing innovation found its way into a loom invented by a Frenchman called Joseph Marie Jacquard, which used punch cards to 'programme' the loom to produce particular patterns in the fabric. In the early twentieth century, the vacuum tube (a light-bulb-like device in which an electrical current is transmitted from one electrode to another) became the guts of early electronic computers. Early computer scientists learned that the tubes could be used as electrical switches, which meant that they could be used to calculate.

It was the Second World War, however, which transformed the computing world. Governments poured massive resources into the development of new machines that could be used to break codes or to model nuclear explosions, in the process laying the groundwork for the post-war computing industry. In the post-war years, engineers enjoyed great success developing critical new components (such as the transistors that replaced vacuum tubes), making them ever more powerful and shrinking them down. Smaller, cheaper and more powerful components gave rise to an enormous new personal electronics industry, producing stereos, televisions, calculators, video gaming systems – and then personal computers and mobile phones.

Progress in computing owes much to 'Moore's Law'. In 1965 Gordon Moore, a co-founder of Intel, reckoned his industry could double the number of transistors in an integrated circuit roughly once every two years, and that this doubling would likely continue. This astonishing pace of progress has been maintained for most of the last half-century, changing computing from something done at great expense by house-sized machines to something done all the time in tiny devices which now rest in the pockets of about 30 per cent of the world's population.

This slice of history played out during a period that economist Tyler Cowen, of George Mason University, has labelled the 'Great Stagnation'. A half-century of extraordinary gains in computing power somehow did not return humanity to the days of dizzying economic and social change of the nineteenth century. In 1987 the Nobel Prize-winning economist Robert Solow mused, in a piece pooh-poohing the prospect of a looming technological transformation, that the evidence for the revolutionary power of computers simply wasn't there. 'You can see the computer age everywhere but in the productivity statistics', he reckoned, and he had a point. Productivity perked up in the 1990s but wheezed out again in the 2000s.

And that, some seemed to conclude, was all there was. In the 2000s Robert Gordon began posing a thought experiment to his audiences: would they, he wondered, prefer a world with all the available technology up to 2000, or one with all available technology up to the present day except for indoor plumbing? His little test effectively made the point that what occurred in the second industrial revolution was powerfully transformative, in a way the advances of the internet age simply weren't. Google is grand, but it's not as transformative as running hot water.

What I like about this thought experiment, however, is that it unintentionally also makes the contrary argument. When Gordon began posing this question in his papers, the answer was so clearly the option with indoor plumbing as to make the question something of a joke – which is what Gordon intended. But with each year that passes, the choice becomes less clear. For many people in developing economies, a smartphone is obviously more important than indoor plumbing: the latter is nice, but the former provides an invaluable economic and social link to the global economy. Meanwhile, in rich countries, smartphone culture is now so deeply entrenched that people might (might!), if forced to make the choice, give up their toilet in order to keep hold of their phone. Nor are smartphones the beginning and end to the contributions of the digital revolution; amputees in possession of thought-controlled prosthetic arms could explain to Gordon that recent advances go well beyond social networks and dating apps.

The transformative capacity of the digital revolution has grown, steadily and surely, over the last half-century. Machines can now drive cars and carry on a basic customer-service conversation. They can spot faces in a crowd and provide instant, serviceable foreign-language translation. They can write reports and edit genomes. And machines that are powerful enough to do those things can do much more besides. Computing is beginning to make good on its promise as a general-purpose technology.


Excerpted from The Wealth of Humans by Ryan Avent. Copyright © 2016 Ryan Avent. Excerpted by permission of St. Martin's Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

1. The General-Purpose Technology
2. Managing the Labor Glut
3. In Search of a Better Sponge
4. The Virtues of Scarcity
5. The Firm as an Information-Processing Organism
6. Social Capital in the Twenty-First Century
7. Playgrounds of the 1 Percent
8. Hyperglobalization and the Never-Developing world
9. The Scourge of Secular Stagnation
10. Why Higher Wages are so Economically Elusive
11. The Politics of Labor Abundance
12. Human Wealth

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