NEW ECONOMY? WHAT NEW ECONOMY?
SYNOPSIS: Article interviewing Krugman. Doubtful on New Economy claims
By Kevin Kelly
You've studied the dynamics of cities. I wonder if you see nation-states
becoming more like cities.
I have mixed feelings about all that. The one thing that remains true in
the modern world, despite all of the increases in communication and so
on, is that the movement of people is very far from free. When you get
to an international level, it means that more often the jobs have to move
where the people are, as opposed to the people moving where the jobs are,
which
is what happens within countries. It means that governments retain large
power to collect taxes, despite all of the things that people do to avoid
them, because ultimately most people are stuck in the country where they
are. Until or unless that changes - and it's not clear that anything about
modern technology is going to change it - the nation-state remains a very
relevant unit. I think the point where computers get smarter than we are
may come before nation-states are meaningless. In that case, it's their
problem.
What myths about the new economy should people relinquish?
Everybody, when they first start to realize that economics can be nonlinear,
that you can have large effects from small causes, that things can be dynamic
and explosive rather than always tending toward equilibrium - everybody
gets really excited. This can be terribly important. But the world is not
always as much fun as I'd like it to be; it's always important to pause,
take a cold shower, and ask yourself, "OK, that's a really exciting
possibility. Is it what's really happening in practice?"
A few years ago, you predicted the coming age of inequality will give way
to a golden age of equality. How so?
Right now, the kind of technologies we have are still in their infancy,
which means that they are still fairly hard to use, so a lot of people
are engaged in the business of actually putting the technologies to work.
But if you ask what sorts of jobs are computers and networks going to be
able to take over as they become more mature, and what sorts of jobs are
they not able to take over, you realize that the answer is: They won't
be able to do the kind of things that involve basic human abilities, things
like plumbing and gardening and anything that involves contact with the
physical world. If you look some distance ahead, you can argue that the
long-term impact of information technology is going to devalue abstract
symbolic work.
So the wages of a plumber will rise to the level of today's knowledge worker?
That's right. The premium people get for a lot of extra education will
decline sharply. It will be a much more egalitarian society.