Why the future will be unfair

An economist argues that the US needs to start looking at inequality (as, indeed, do other developed economies) in a more dispassionate and analytical way.

Of all the many changes to American society since the 1960s, one of the most unexpected is also one of the most overlooked. Between 1969 and 2009 the median income for men in the US fell somewhere between 9 and 28 per cent, depending who you talk to. This is the departure point for Tyler Cowen’s new book, Average Is Over.

Having chronicled the US’s economic vulnerability in The Great Stagnation, Cowen, an economist at George Mason University in Virginia, says we have entered the age of “hypermeritocracy”, in which the top 10 to 15 per cent of Americans are “extremely wealthy” and lead “fantastically comfortable lives” and the rest work in “stupid and frustrating” jobs for falling or stagnant wages.

These trends are clearly evident in the US today. He writes that 60 per cent of the jobs lost during the recession were mid-wage jobs, while 73 per cent of the jobs created were for workers on $13.52 (£8.36) an hour or less. In the longer term, intelligent computers will further dampen demand for mid-wage jobs and only those with the ability to work with intelligent machines, or whose skills are irreplaceable, will benefit.

Free online education – something that Cowen is already pioneering with his online economics courses at the Marginal Revolution University – will offer opportunities to those from deprived backgrounds to join the new elite, and so the future will be both “more meritocratic and more unfair”.

Cowen says that many will struggle to reconcile this tension between meritocracy and fairness. “This juxtaposition is a kind of deliberate confusion,” he says to me when we speak over the telephone. “The point is that this world will be confusing and it will be disorientating . . . The final picture is one with both utopian and dystopian elements.”

He says he doesn’t want to tell his readers what to think, but argues that the US needs to start looking at inequality (as, indeed, do other developed economies) in a more dispassionate and analytical way. “There are many books on inequality but quite quickly they tend to run on the left to preaching some message; and on the right, maybe a kind of denialism or moralising about people who aren’t doing as well,” he says. “I tried to avoid both directions to see if we can get our understanding a bit further.”

Cowen was New Jersey’s youngest-ever chess champion, aged 15 when he won in 1977, and he devotes a whole chapter to the intrigues and wider implications of freestyle chess, in which players are allowed to use computer programs to improve their game. In the future, the “wisest” of us will entrust computers to make decisions for us, not only on chess moves but for affairs of the heart, he believes.

For Cowen, algorithms can hold the key to a happy marriage. He met his wife through the online dating site match.com in 2003. She is a liberal but he describes himself as a “libertarian” and “conservative”, and admits that his wife might have been less keen on a first meeting if she had known his political leanings. The medium of online dating forced her to abandon her usual intuitions – to their mutual benefit.

“I have quite a few friends who are single and I find a lot of them have quite arbitrary standards,” he says. “Over time, programs are going to nudge us out of that. The people who are willing to be nudged will on average marry better and they will make a lot of better choices.” If average is over, so is romance.

Russian chess world champion Vladimir Kramnik plays his sixth and last chess match against chess computer 'Deep Fritz'. Image: Getty

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

This article first appeared in the 07 October 2013 issue of the New Statesman, The last days of Nelson Mandela

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Who is the EU's chief Brexit negotiator Michel Barnier?

The former French foreign minister has shown signs that he will play hardball in negotiations.

The European Commission’s chief Brexit negotiator today set an October 2018 deadline for the terms of Britain’s divorce from the European Union to be agreed. Michel Barnier gave his first press conference since being appointed to head up what will be tough talks between the EU and UK.

Speaking in Brussels, he warned that UK-EU relations had entered “uncharted waters”. He used the conference to effectively shorten the time period for negotiations under Article 50 of the Lisbon Treaty, the legal process to take Britain out of the EU. The article sets out a two year period for a country to leave the bloc.

But Barnier, 65, warned that the period of actual negotiations would be shorter than two years and there would be less than 18 months to agree Brexit.  If the terms were set in October 2018, there would be five months for the European Parliament, European Council and UK Parliament to approve the deal before a March 2019 Brexit.

But who is the urbane Frenchman who was handpicked by Commission President Jean-Claude Juncker to steer the talks?

A centre-right career politician, Barnier is a member of the pan-EU European People’s Party, like Juncker and German Chancellor Angela Merkel.

A committed European and architect of closer eurozone banking integration, Barnier rose to prominence after being elected aged just 27 to the French National Assembly.  He is notorious in Brussels for his repeated references to the 1992 Winter Olympics he organised in Albertville with triple Olympic ski champion Jean-Claude Killy.

He first joined the French cabinet in 1993 as minister of the environment. In 1995, Jacques Chirac made him Secretary of State for European Affairs, teeing up a long and close relationship with Brussels.

Barnier has twice served as France’s European Commissioner, under the administrations of Romano Prodi and José Manuel BarrosoMost recently he was serving as an unpaid special advisor on European Defence Policy to Juncker until the former prime minister of Luxembourg made him Brexit boss.“I wanted an experienced politician for this difficult job,” Juncker said at the time of Barnier, who has supported moves towards an EU army.

 

Barnier and the Brits

Barnier’s appointment was controversial. Under Barroso, he was Internal Market commissioner. Responsible for financial services legislation at the height of the crisis, he clashed with the City of London.

During this period he was memorably described as a man who, in a hall of mirrors, would stop and check his reflection in every one.

Although his battles with London’s bankers were often exaggerated, the choice of Barnier was described as an “act of war” by some British journalists and was greeted with undisguised glee by Brussels europhiles.

Barnier moved to calm those fears today. At the press conference, he said, “I was 20 years old, a very long time ago, when I voted for the first time and it was in the French referendum on the accession of the UK to the EU.

“That time I campaigned for a yes vote. And I still think today that I made right choice.”

But Barnier, seen by some as aloof and arrogant, also showed a mischievous side.  It was reported during Theresa May’s first visit to Brussels as prime minister that he was demanding that all the Brexit talks be conducted in French.

While Barnier does speak English, he is far more comfortable talking in his native French. But the story, since denied, was seen as a snub to the notoriously monolingual Brits.

The long lens photo of a British Brexit strategy note that warned the EU team was “very French” may also have been on his mind as he took the podium in Brussels today.

Barnier asked, “In French or in English?” to laughter from the press.

He switched between English and French in his opening remarks but only answered questions in French, using translation to ensure he understood the questions.

Since his appointment Barnier has posted a series of tweets which could be seen as poking fun at Brexit. On a tour of Croatia to discuss the negotiations, he posed outside Zagreb’s Museum of Broken Relationships asking, “Guess where we are today?”

 

 

He also tweeted a picture of himself drinking prosecco after Boris Johnson sparked ridicule by telling an Italian economics minister his country would have to offer the UK tariff-free trade to sell the drink in Britain.

But Barnier can also be tough. He forced through laws to regulate every financial sector, 40 pieces of legislation in four years, when he was internal market commissioner, in the face of sustained opposition from industry and some governments.

He warned today, "Being a member of the EU comes with rights and benefits. Third countries [the UK] can never have the same rights and benefits since they are not subject to same obligations.”

On the possibility of Britain curbing free movement of EU citizens and keeping access to the single market, he was unequivocal.

“The single market and four freedoms are indivisible. Cherry-picking is not an option,” he said.

He stressed that his priority in the Brexit negotiations would be the interests of the remaining 27 member states of the European Union, not Britain.

“Unity is the strength of the EU and President Juncker and I are determined to preserve the unity and interest of the EU-27 in the Brexit negotiations.”

In a thinly veiled swipe at the British, again greeted with laughter in the press room, he told reporters, “It is much better to show solidarity than stand alone. I repeat, it is much better to show solidarity than stand alone”.

Referring to the iconic British poster that urged Brits to "Keep Calm and Carry On” during World War Two, he today told reporters, “We are ready. Keep calm and negotiate.”

But Barnier’s calm in the face of the unprecedented challenge to the EU posed by Brexit masks a cold determination to defend the European project at any cost.

James Crisp is the news editor at EurActiv, an online EU news service.