SO478 - week 18
« Back to SO478These are my notes from February 20 for SO478 at the London School of Economics for the 2017-2018 school year. I took this module as part of the one-year Inequalities and Social Science MSc program.
The usual disclaimer: all notes are my personal impressions and do not necessarily reflect the view of the lecturer.
Capitalism, technology and inequality 1
Featuring David Soskice (part 1 of 2). Readings (for this week and next):
- Goldin & Katz, 2007
- Meltzer & Richard, 1981
- Hall & Soskice, 2001 (VoC intro)
- Iversen & Soskice, 2006
- Kristensen & Lilja, 2012 (Nordic capitalism)
- The Second Machine Age by Erik Brynjolfsson and Andrew McAfee
- Strangers in their own land by Arlie Russell Hochschild
i’m not a big fan of his approach but it’s a useful bellwether for mainstream takes on this topic
Lecture
(no time for seminar)
- knowledge economy, transition from a time (golden ages, fordist) when stats were all good and moving in the right direction
- and then NEOLIBERALISM came shock
- things get better during the 1990s
- quote: chair of federal reserve bank, “age of great moderation”
- which ofc came to an end (or maybe pause) with fin crisis
- focused on advanced world (US, western europe and japan) since it’s driven both the ups and the downs
- switch in regime from mass prod to ICT
- acknowledged the role of politics, all key decisions are ultimately political
- from fordist, period of rel high equality (wage compression etc)
- i get the sense that he wants to go back to the keynesian golden ages
- remember the gender equality issue in the fordist era, women expected to do domestic work etc
- how did this happen?
- high degree of unionisation obvs (esp in manufacturing), biggest factor in income equality (compared to now)
- my thoughts: the ontological question of skilled v unskilled.
- cant separate it from the moral factor
- we think skilled workers are inherently more deserving
- but what does it really mean to be skilled? isnt it just that you’re lucky enough to be able to command higher wages
- circular definition really
- back then, rules were simple, “social contract” of the time that you could drp out of HS but as long as you had physical stamina (and male) could get a job in manufacturing, and do decently well
- semi-skilled workers wages rising rel to skilled workers
- now onto the OPEC crises, which produced two major deflations (i assume he’s talking about 1971, 1973 stagflation?)
- because of union power, the oil price increases translated into wage increase demands
- and ofc volcker coup, birth of neoliberalism (jacked up interest rates) -> some details here
- fed moved from fiscal to monetary policy
- through 1980s, fall in inflation
- and then ofc thatcher reagan
- and ofc around the same time: technological revolution
- my question is: is it a coincidence that it occured during the economic rev (TINA world)
- or was it inevitable for timing reasons
- semiconductor as general purpose technology which gets used in pretty much everything now
- me: must remember what role technology plays in ec dev, from a marxist POV, productive forces, humanity mastery over nature
- now we’re moving toward knowledge economy, information age, computational-based production (capital) so less labour needed
- now onto the soviet union??
- people werent allowed to have computers??
- collapse coincided with huge boom in tech
- we’re in an interesting situation now where education is so common, more so than ever before
- but those who DON’T have access to education do much worse
- education has become more of a stratifier, filter, new cleavage where society is divided into upper class (those who use uber deliveroo etc) and lower (those who work for them)
- incentive changes??
- since you can make a lot more money if you have tech skills?
- physical skills no longer necessary
- now people have huge incentives to raise level of their education (me: i hate thinking about this on an individual incentive level rather than structural collective level)
- also potential for more group work, division of labour? communication/working togheter/social skills more and more important
- i feel like he hasnt met a lot of silicon valley programmers lol
- basically he’s describing the shift from manual to cognitive labour but in many more words than necessary
- during 1980s when manufacturing was doing badly, factories closed (not just up north in Manchester etc but also London)
- worse in the US (rust belt) than it was here
- but since 1990s things have reserved (big cities doing well cus of finance though lol)
- me: is this really reversing (are things really getting better) when they’re not producing anything socially valuable, is it sustainable, obvs not
- him: the question is why this has come about
- me: is it not finance lol
- now going through arguments why this change has come about
- q relating to goldin and katz, immigration important element (think immigration to SV)
- ok now he’s talking about taiwanese immigrants in silicon valley, also bangalore and india?
- success of silicon valley due to immigrants
- he’s saying this aspect (skilled immigration) is neglected on this topic
- me: is he going to mention entrepeneurial state?
- him: we would have thought knowledge economy would have been period of massive innovation and growth
- but growth has actually come right down and the question is really why
- (me: growth is a bad measurement anyway and we should challenge that maybe that’s an unhelpful take lol)
- he admits that growth is higher in emerging economies than advanced
- the q is the exent to which the latter growth is spillover effect of growth in advanced economies
- the role of politics in allowing tech change to happen the way it did
- denationalised
- education policy that resulted in half of population going to higher education (political decision)
- now on urbanisation
- cities have become v important in last 25 years or so
- (me: cus of finance)
- also house prices (me: also finance, he completely didnt talk about the role of big capital in keeping up house prices)
- agglomeration
- there’s a question of why that’s happening
- (me: alec j ross talks about this, cant find quote tho)
- mentioned thomas friedman’s flat earth (big cities will disappear as info tech connects people)
- since he wrote it, things have obvs gone in opposite direction (Smart people like to live/work together)
- (me: remote work trend fighting against that but small in the grand scheme of things)
- (also me: thoughts on trends at upper level of wages vs lower level, similar outcome but diff reasons)
- “it would be slightly alarming if people could move wherever they want to move” because of a complex social norm/contract
- “i’m not sure if i would feel confident making an agreement with you if you could just go off to whatever part of the world you want to”
- how do you enforce trust, bargains etc
- a lot of how the world works with today depends on long-term relationships
- (me: why on earth is geographic proximity required for this)
- he’s very much of the need-to-be-together school (analogy to marriage)
- capital wants people in the same place so they’re easier to monitor and manage
- on the agglomeration point, lots of things that cant be dispersed (care, services work)
- me: it hasnt been automated yet just cus labour has been so cheap
- the obvious management school reason: due to companies setting up offices in places where they know they can poach workers from other companies (skilled clusters)
- q: why not small towns? literally who knows
- now he’s talking about assortative mating (assuming maximising based on lifetime household income)
- highly educated people paired up etc (esp cus people meet in uni, or through social networks, homophily etc)
- now he’s talking about housing prices
- he’s not mentioning the extent to which that’s buoyed by global capital? makes it seems like it’s solely a matter of people wanting to live in the same city …
- geographical segregation develops as people who cant afford to live in london move out NO SHIT
- “low-skilled workers physically needed”
- ugh this conflation of care workers as low-skilled with all the moral judgments of that, should honestly use a new word
- there’s an imbrication with meritocracy