Inequality will get worse

The bad news is that although the Occupy Movement has come and gone, high inequality in US income, wealth, and political power remain. The worse news is that there are strong reasons to expect things to get worse.

There are still 2.4 billion people in the world employed in agriculture. For example, 40% of China’s work force is still agricultural,  compared to <3% of the US. Although the global shift away from agricultural employment has slowed with the global recession, there is little reason to doubt that the rapid migration from the country to the city will resume when the economy revives (the image is of Sao Paulo). These people will be competing in a global market for low-skilled jobs.

There is little reason to expect this market to grow. Industrial production is already highly automated in the developed world and will offer few work opportunities in the future. Services industries are on the brink of an automation revolution. The Google driverless car is about to eliminate millions of driving jobs. Robots will soon be cooking, cleaning floors, stocking shelves, and filling orders in retail settings. And, fellow professors, are we about to discover that the world needs just a handful of lecturers on calculus or Kant?

Leontief wrote that

The general theoretical proposition that the worker who loses his job in one industry will necessarily be able to find employment, possibly after appropriate retraining, in some other industry is as invalid as would be the assertion that horses that lost their job in transportation and agriculture can necessarily have been put to another economically productive use.

Surely, Leontief’s analogy is false? Certainly, humans are far more adaptable than horses and will find new niches as older trades vanish? Maybe, but the capabilities of autonomous machines appear to be evolving more quickly than human capabilities.

Marx imagined that we would use the productivity of the modern world to free ourselves to labor on whatever we wished.

in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.

A good idea, perhaps, but as things have transpired it can only evoke bitter laughter and the “gnawing criticism of mice.”

Many of our species may soon be as economically irrelevant as horses. Inequality in ownership of physical capital matters, but the key inequality may prove to be inequality in human capital, broadly understood. A serious commitment to human equality requires we find ways to raise everyone’s level of human development.

About Bill Gardner

A health care researcher and a child and quantitative psychologist by training. I am an American living in Canada and am Professor of Paediatrics, Obstetrics & Gynaecology, and Community Health & Epidemiology at Dalhousie University; and Professor of Pediatrics, Psychology, and Psychiatry at The Ohio State University. I also blog at The Incidental Economist (theincidentaleconomist.com) and you can follow me @Bill_Gardner on Twitter.
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