A Creative Class of Machines

June 9, 2006

Richard Florida and his books' "creative class" -- graphics designers, dot.com engineers, the young, the fashionable, the cutting-edge -- have convinced cities to adopt policies that will engage that class; the rest of the citizenry can like it or not. Austin, in its whipsawing between "urban density" and "anti-gentrification" moves, its "make 'em vote in light rail," is a fair example.

But Robin Hanson, a GMU economist, is not convinced, and neither are we, that the analysis is accurate, suspecting that the embedded agenda is a "cause" that skews the application of the ideas -- "telling people the kind of stories they want to hear, ...that one side in today’s culture wars is very right, while the other side is very wrong; our wealth, as well as our morality, is at stake in the culture wars." 

You see, growth comes from changing processes, and such changes can be called “creative.” So since bohemians -- with diverse and unusual dress, speech, hygiene, work hours, and sexual practices -- are the most “creative” folks around, Florida concludes bohemians must drive economic growth.

It is just as likely that a scattering of the Moving Edge makes life more attractive for the more-conventionally productive, balances things out, contributing on the yes, edges, to the total product we all generate.

The truth is that the artistic creations or intellectual insights we most admire for their striking “creativity” matter little for economic growth. Instead, most of the innovations that matter are the tiny changes we constantly make to the millions of procedures and methods we use. And changing these procedures does not require free-spirited self-expression. Instead, it is quite natural for people to constantly think about tiny changes to their procedures as they follow those procedures.

Hanson thinks the next big point of growth, bigger than the industrial revolution, will be truly smart machines that can take over many of the mental tasks that humans routinely are employed to do. Employed to the tune of the  70% of income we now spend for human labor.  The social dislocations will be lightning-fast, and immense. More wealth for some, much, much less income for those not plugged in -- by investment and production -- to the manic rage of the Big Brain Machine.

Brain simulations should appear in time to cause the next big growth mode, and simple economic models suggest they are capable of producing such a mode. Within a few years human wages could begin falling dramatically, while economic growth rates skyrocket....

This is disturbing because human wages should fall quickly with the falling price of machines. So while humans who owned shares in the firms that made machines would get very rich, those whose only source of income was their labor could die of starvation. And if people wait to see the transition happen before they believe it is real, they might not have time to arrange for other sources of income. 

Regrettably unrealistic on our part, but this is reason enough right away to bring in everyone to what the wiser Social Justice thinkers call "the circle of exchange."  Think there's a [process-of-your-choice]-gap now...? The implications of doing so are, of course, not just "job creation." Real community is required, because productivity is a way of thinking, and ways of thinking are only contagious in positive human contact of some kind of another. Among other things, the unproductive are isolated.

Of course, in the scenario Hanson envisons, forced and active income redistribution is likely, which, compared to each being able to contribute, is not good for the soul of anyone, creating resentment on both sides. The "charity" of handouts is never as good as the charity, and clarity, of exchange.

We'll leave it to the psychobloggers to address the differences in developmental and moral outlook between those who expect to be taken care of, and those who engage, on whatever small scale, a means of contributing. Some people will design machines, others will raise their children with care and discipline or water a geranium at the front stoop. Everyone can contribute, and heaven knows we all have room to modify the crudity and "whatever..."s in our own improveable lives.

Via Marginal Revolution

Update:
She's
on
it.

Unfortunately, many adults seem to think that their own bad choices should be buffered, and that this is the proper role of government. One of the ways the government does this is to regulate prices and other aspects of the free market, and thus, artificially separate the consumer from the consequences of his or her behavior. Like a bad parent, the government is always there to bail you out, no matter what kind of trouble you get yourself into. To them you will always be the five-year-old child who makes bad decisions and needs their help.

Some people seem to feel this is a good thing.

The free market provides people with what they want -- and are willing to spend money on. It is each individual's responsibility to decide what they need--and can afford -- and act accordingly. 

For some strange reason, the free market doesn't automatically adapt to everyone's wishful thinking, childish fantasies, or grandiose sense of entitlement; it tends to respond to actual human behavior in the real world.