Archive for the ‘Development’ Category

Security versus Abundance

January 9, 2017

Economics is a discipline often introduced by focussing on scarcity, the scarcity of resources to satisfy human and animal wants, although the latter are usually ignored. An alternative approach is to focus on underutilized resources as illustrated by Uber and Airbnb. Both illustrate the absence of scarcity. Cars spend much of their lives parked and not providing transportation services, except as an option good for people to use when it suits them. Uber arose as owners decided that they could use their cars to make money when they were not needed to provide the owners transportation. The cars were underutilized resources and a way was found to make use of them. Scarcity was not the issue underutilization was.

The same could be argued for Airbnb where owners had space in their homes for others to use. Scarcity of living space could be reduced if not overcome in many societies if a process of sharing was organized. Bed and breakfast arrangements have been around for years and Airbnb is just a way of extending these hotel-like activities.

Anything which is a public good tends to be underutilized such as the text of a book, an empty park, road or beach. At home, wardrobes and chests of drawers hold clothing which is not being used. A surplus rather than scarcity is the issue because people want choice and are prepared to use their incomes to create options, but these require creating access to a surplus of clothing on hand.

Other examples illustrate not-scarcity, a surplus or underutilized resources include:

Cars being driven with no passengers, only the driver.

Truck owners try to avoid dead-heading by arranging full loads for their lorries travelling in both directions between two points.

Shops with unsold goods, especially when expensive and held for a long time. Annual sales are one way of disposing of surplus goods.

Buildings such as schools and universities which are only used for part of each day, and part of each year. Accommodation and lecture rooms are often hired out for other uses.

Empty warehouses and buildings of all kinds.

Trained workers unable to find paid work. OK, scarcity of jobs is the flip side to unemployment.

Underutilized resources occur with the sun in terms of both heat, light and energy as well as with wind, tides and waterfalls.

Recycling is a way of reducing scarcity by making more intensive use of resources.

This is not to suggest that scarcity is unimportant in examining economic issues, but to note that especially in high income societies, the issues are also often those of coping with underutilization not scarcity. If the focus is switched to developing countries, then there is obvious scarcity related to items like health, education, housing, safety, food, and water. And in developed countries examples of scarcity can be found. It just seems misleading to initiate the study of economics without noting that scarcity is not the only issue to address. Where scarcity is paramount is in the finite number of hours in the day, but these too can be underutilized.

Student debt – how much of a burden?

November 2, 2015

Student costs for postsecondary education are primarily a combination of fees and living costs plus the cost of loss of income from employment while studying. Universities have also learned how to charge for services in addition to basic fees. Overall costs are met from student income from savings, part-time work, borrowing from parents, friends and institutions. The burden of any debt incurred depends on the borrowing costs and the terms of repayment.

 

Those readily employed after graduation will be able to plan their repayment. Those unemployed will carry the burden of debt longer. One interesting scheme is for universities to require no payment at the time of study, but for the student to incur a debt which is paid for after graduation and dependent on the amount of earnings. Collection can be tied to a person’s annual income tax filing.

 

Many universities have created a country club atmosphere of indoor and outdoor sports, clubs, restaurants, coffee shops, bars and shops. These are used to attract students, but at the same time divert student time from academic study. One way to reduce costs and maintain a focus on studying is to register for online courses, which can be taken at lower cost to the student who does not have to travel to and live on a campus.

 

Of course this is not a direct substitute for an on campus experience, but it is a way to reduce the costs of post-secondary education. Correspondence courses have provided this means of study for years. Today technology makes distance learning that much easier. In fact, many classroom lectures are made available as power point presentations which allows a student to either access the material in the classroom and online or just online. This means of delivery is more suitable for some disciplines (history, english) than for others where lab time is required (engineering, chemistry).

 

Discourse on student debt is usually engaged in by those experiencing it. My observation here is that while debt cannot be eliminated, its effects can be mitigated by a variety of means. Some of these require the student (and parents) taking action before payment for post-secondary education is required.

Lee Kwan Yew and post colonial nations

March 26, 2015

“Lee (Kwan Yew) would surely regret not having survived just a few more months to witness Singapore’s 50th anniversary celebrations this August. But he can rest in peace knowing that the country he led from 1959 to 1990 is the world’s most successful post-colonial nation. Gulf monarchies are laden with bling but vulnerable to wars, coups, and falling oil prices. Africa needs another half-century to heal its colonial scars. India is only beginning to get its act together. Meanwhile, Singapore has grown from having a per capita GDP of $516 in 1965 to about $55,000 today.” (Foreign Policy, March 22, 2015)

 

In many ways Singapore is a gem, but rating it in contrast to countries like China, India and the US is an apples and grapes situation. There are just too many differences (Singapore 4.6 mil v. China 1.4 bn population) to make comparisons interesting except in a few ways. Singapore is politically stable, if not wholly democratic, efficiently managed, has experienced continuous economic growth, is safe and willing to try policies such as road pricing, and prepared to drop whatever does not work. Its civil servants and politicians are well paid and severely punished if they engage in corruption. The statement that it is “….the world’s most successful post-colonial nation…,” and that “Africa needs another half-century to heal its colonial scars. India is only beginning to get its act together,” which caught my attention.

Much is written about the impact of the British and other European Empires, and it will always be possible to provide both glowing as well as highly critical assessments. Mine takes countries in today’s world and looks at some of them in the light of their former imperial connections. To what extent can the good and naughty parts be assigned to previous colonizations? How are these countries working today?

  1. Australia, Canada, New Zealand and the United States all rank highly in various political, economic and social country league tables. There is plenty to criticize in each but they rank way above countries which are obvious dictatorships like Russia, China, North Korea and those in the Middle East. Areas of today’s Middle East, such as Egypt, Palestine, Jordan, Lebanon, Syria and Iraq were parts of the Ottoman, British and French Empires, but it was the Ottomans who had the longest sway over these areas until 1918.

 

  1. The Indian subcontinent with today’s India, Pakistan, Sri Lanka, Myanmar and merging into Malaysia, Singapore and Borneo have all been part of the of the British Empire and now Commonwealth; all have experienced economic and political progress with improved human rights, some obviously more so than others. Each has had to combine different racial and religious groups.

 

  1. Africa is a more difficult region to assess. It is a land area with enormous physical differences from the northern Mediterranean coast to the desert region to the south, and then to South Africa. Dutch, British, French, Portuguese, Belgian, Spanish, German and briefly Italian colonization took place. Only in a few of these areas such as South Africa and parts of East Africa, did political and economic progress occur. Bechuanaland and Mauritius are often held up as examples of successful development but these have relatively small populations, 1.8 mil and 1.4 mil respectively – the Singapores of Africa.

 

  1. Those who travel from East to South Africa today tell of the poverty in urban and rural areas, and mainly subsistence farming which is labour intensive with little mechanization. In many places, especially in rural areas, nothing much seems to have improved in centuries, either where there has or has not been an imperial presence. My overall impression is that, while not much improved with colonization, without it these regions would be living in the tribal type circumstances which prevailed before the colonists arrived. These people would not be living where a contemporary version of the universal human rights is recognized as it is in many parts of the world. Foreign aid has attempted to promote development but it may be that it is a deterrent and countries should devise their own path to development.

 

  1. There are other parts of the world which were touched by the British Empire, such as the Caribbean and parts of South America with investment and trade. The empire also traded with China (opium), Japan, and Russia amongst others. And western Europe was drawn into economic relationships as well as wars involving the British Empire. While the outcome reveals a mixed record which does not lend itself to accurate measurement as there is no agrred upon metric, it is probably a better one than would have existed without the British presence.

The History of England by Peter Ackroyd, that is excluding Scotland, Wales and Ireland which later combined with England to become the United Kingdom, concludes that England was itself a colonized country with invasions mainly from folk in Scandinavia and north-west Europe. These were assimilated with those who were native to England to morph eventually into England and later the United Kingdom. Whatever the ingredients were which allowed this small piece of real estate to create such an empire was itself the product of colonizers. Maybe geography had something to do with it. Centuries earlier England was joined to the French mainland, and the 26 mile stretch of water between England and western Europe did not exist. If it had, perhaps the history and geography of western Europe would have been different and Britain’s empire never existed.

Technology comes to post secondary education

March 10, 2015

 

Introduction

The plight of sessional lecturers is a lesser issue, compared with the probable plight of all lecturers and the universities where they work. Online degrees at a fraction of the cost of on campus degrees pose real competition. So far online has not eaten into the on campus experience, but it will as soon as these course are seen as providing an official credential. And that will begin to happen soon – or another of my predictions will be proved wrong.

You can stop here and read Kevin Carey’s New York Times article of March 5, 2015, “Here’s What Will Truly Change Higher Education: Online Degrees That are Seen as Official.”

 

The potential of online

Higher education has become ridiculously expensive with the combination of fees, away from home living costs and lost income from not working. The on campus experience has features not available from online learning, but there are other ways of gaining this experience. Many students today are on campus and on their cell phones and pads anyway, interacting with other people and web material electronically rather than face to face. Universities, in order to compete for students, have turned the on campus experience into a country club-type ambiance with athletic facilities, social clubs, sports medicine clinics, restaurants, shops and services not directly related to traditional delivery of disciplinary learning.

 

Those who want this full monty educational experience will have to pay for it, and the Ivy League and Oxbridge experience will be less affected. Those more concerned with an education in a narrower sense will now be able to afford it with a credential which employers recognize. I know, the narrower experience is not what education is all about, but there are now more efficient ways to get a sound education in a cost efficient manner, plus the time and means to buy the other aspects (the country club trimmings) as well. At least, that is what Kevin Carey argues and it seems to make sense.

 

The tsunami-like technological changes which have hit the banking, movie, music, television, telecommunications, publishing (books, newspapers and less so magazines), retail and manufacturing industries is coming to education. Many instructors in schools and colleges are already embracing the technology in their teaching in traditional institutions. Classroom lectures are often available as power-point presentations, sometimes online before the live lecture. A student has the option of attending the live lecture but need not, and online discussion groups may also exist.

 

Off-campus learning started way back with correspondence courses, and in the 1960s with televised courses, the Open University in the UK, and today online courses. (Carleton University was one of the early providers of televised courses with tapes available for student use, but it never experimented with the technology to develop other options. I once attended a lecture where the course was given on a screen in a lecture room, darkened like a movie theatre. A student next to me watched for a few minutes, and unimpressed said she was going to the do her laundry. I have no idea whether she watched the tape later, but it forever reminded me to try to be interesting when lecturing, or as L.A.G.Strong, a literary critic wrote “Think of the reader not yourself. Make everything interesting. Write about everything – even linoleum.”)

 

This raises the current dispute involving part time or sessional lecturers who argue that their work load has increased without a commensurate increase in remuneration. If their contractual terms have been broken, or if they want to strike for better terms, the procedures are available to do so. Here I want to take note of the market for university instruction.

 

Teaching as a type of outsourcing

Outsourcing abroad and temporary foreign workers are two sides of the same coin. If the price is right, work will be sent from Canada a high wage country to a low wage country. If the work has to be performed in Canada, then foreign workers are brought to Canada. The latter occurs for agricultural workers especially at harvest time, for home helpers and in areas like Northern Alberta where there is or has been a resource boom. All use some temporary or part time workers. A form of this takes place in universities.

Opportunities occur for part-time workers in higher education where two types of teaching labour are employed. Tenure track employees receive detailed screening and are evaluated in their first years of employment before being granted tenure, a contract which provides a high degree of income security. Some may not receive tenure. A second type of worker are part-timers, sessional lecturers hired to teach a particular course or series of courses at a much lower salary. These are not expected to undertake administrative chores or research, and so they perform a different type of job.

 

Since at least the 1960s, classes in Canadian universities, especially at the first year level in the arts and social sciences, have been taught by sessional lecturers. Over time, their use has increased as student enrollment has risen in total and as a proportion of the 18 to 24 age group.

 

The economics of this process is straightforward. More students require more resources, teaching and other. This is paid for either by raising student fees or through taxation. There is no free ride and “water bed” economics applies – change in one area inevitably causes changes elsewhere. When a change occurs in one part of the educational market, say more students, increased resources are required to supply the demand. Full time faculty is the desired path but teaching can be provided at a lower cost with sessionals. The quality may not be the same but as Quebec students have shown, many are not prepared to pay higher fees. The quality of their education will suffer but this seems to be acceptable, at least at the moment.

 

Over time the number and share of courses given by part-time teachers has risen. What are the consequences? For the university, teaching cost increases are reduced. Flexibility is maintained by the nature of the sessional contract. Quality control of teaching can be managed for sessionals who are evaluated after each course by the students. Poor ratings result in teachers not being rehired. It is far more difficult to dismiss a tenured employee even with poor student course evaluations.

 

There are issues which arise with the use of student evaluations with students and their parents lobbying and expecting to get high grades, and faculty catering to these expectations. Research on this topic shows that there has been grade inflation not only in schools but in universities. Both full and part time university teachers are subject to these pressures. With online courses, the pressure for grade inflation should be reduced. Firms will want to show that the credentials they issue are seen as valuable and informative to employers.

 

At the high school level in Ontario, the proportion of graduates who are Ontario scholars has steadily increased since the late 1960s when province wide exams were abolished and now each school grades its own Grade 12 students. Those with an 80% graduating average has risen from 20% in the 1960s to 60% today. (I have discussed this in a Aug. 12, 2014 posting.) The Ontario government is reluctant to provide the time series data for this conclusion, but teachers and former students will confirm this.

 

Another aspect of the teaching market is that while university courses may be taught by teachers who may not have a tenure track position, some are taught by those who have a full-time job in another area, but want to do some teaching and are willing to accept the terms and lower university payments.

 

As suggested above, the future will likely see an increased delivery of online courses which will affect both the demand for regular university courses at particular institutions, and a reduced demand for faculty both full and part-time. Today’s dispute over sessional lecturers relates to conditions prevailing in the past not the future.

 

Kevin Carey notes that full time enrollment is increasing, as universities are still seen as the places where credentials are recognized by employers. It will take time for universities to incorporate online teaching and for other institutions to establish the value of their credentials. My guess is that the changes will come from the demand side as students (and their parents) discover ways to reduce educational costs and still get recognized credentials.

 

Yesterday’s Tomorrow

November 27, 2014

 

“Scarcely anyone in England now believes in the Treaty of Versailles or in the pre-war Gold Standard or in the Policy of Deflation. These battles have been won – mainly by the irresistible pressure of events….But most of us have, as yet, only a vague idea of what we are going to do next…” John Maynard Keynes, 1931.

“Events, my dear boy, events.” Harold Macmillan, 1950s

In 2013, I began thinking about what the world might look like for my grandchildren and what type of educational and other skills would be useful in their adult lives and even, heaven forbid, their sunset years, an euphemism for old age. I canvassed a number of former students whom I had taught at Carleton University asking for their views. Each has gone on to have a successful career in a variety of fields, and all had something useful and often unexpected to contribute to this topic.

I posted an initial summary of their views at cmaule.wordpress.com on June 24th, 2014, with some of my own observations. Much of this content deals with the type of topics to consider studying at university and college and the future characteristics of the labour force. Elsewhere, I came across some excellent studies on these issues written by experts such as those for the Oxford Martin Commission For Future Generations Report available online.

As a next step, I try to examine the future in light of the recent past, recent in this context being from 1800. Over 200 years may seem like a long time to establish context, but tracing actual events since then provides some understanding of how we got from then to now, how quickly circumstances change, and how relatively unpredictable these changes were and still are. The difficulty of saying anything useful about the future is contained in the quote by Keynes namely that, at any time, supposedly informed people have “only a vague idea of what we are going to do next.” Harold Macmillan, when asked what might blow a government off course, is quoted to have said “Events, my dear boy, events.” Though some claim he never said it, it remains a useful reminder.

Historians record what did take place and do not claim to throw a bright light on the future.  The Long Shadow, The Great War and the Twentieth Century, (Simon and Schuster, 2013) by David Reynolds shines the spotlight on how events leading up to and subsequent to WW1 accounted for what has happened since 1900 up to the present. The previous century from 1800 also contains events which shape the world we live in. What is notable, perhaps remarkable, is how during those years (1800-1900) few supposedly informed observers saw what was coming in 1914, and when it did come what would happen next. Most saw this century as a reasonably peaceful world which would carry on with Queen Victoria’s relatives, the King of England, Tsar of Russia and German Kaiser living harmoniously together, although America did have a nasty civil war in the 1860s. How a family spat had such disastrous consequences is today’s history.

The same occurred after WW1, thus the Keynes quote. Many thought that the warring countries had learned their lessons and peace would prevail. Instead the twenty interwar years (1919-1939) turned out to be time-out, while the players rearmed to different degrees before play started again in earnest for WW2. There have not been two world wars since 1914, but one, a thirty year one with a longish half-time.

The exercise I am pursuing in will certainly lead to erroneous forecasts but may suggest ways to think about the future.  I do this by addressing three topics, religious terrorism, current day empires or spheres of influence, and the weakening of democratic institutions. The last two will be discussed in future postings.

Personal context

My frame of reference is conditioned by my own experiences, those of my father who served and survived as a junior infantry officer in WW1 including at the 1916 Battle of the Somme, which lasted five months and resulted in over 400,000 casualties, and my paternal grandfather (1824-1899) who was a vicar. The latter was born shortly after the Battle of Waterloo (1812) which ended a lengthy period of English-French hostilities. It was followed by two world wars, when this time the French and English fought on the same side. Italy switched sides. From a distance, my grandfather would have watched the American Civil War of 1861-65, and probably felt they deserved it after behaving as an ungrateful rebellious colony, which then adopted a modified form of Westminster-type governmental institutions.

While there were a few steam locomotives in the early 1800s, the first gasoline powered  automobile did not appear until 1886, the telephone in 1876 and airplanes in 1903. Ships were powered by wind, then wind and steam, then steam alone fired first by coal and then oil.  My childhood books had pictures of sailing ships with steam funnels. Wireless, telephones, television, computers and many medicinal drugs did not exist in 1824, but 100 years or so later were shaping daily lives. Opium was used liberally for medicinal and other reasons.

Political and economic change driven by technology comes fast and often in unpredictable ways. Looking forward, God knows what will happen, and maybe she does, but we do know that what will take place on planet earth is constrained by the existing area of land and sea and the people residing there. These are fairly fixed parameters at least for our grandchildren’s lifetime. Geography, demography and technology affecting economy are viewpoints to keep in mind. How does religion play into this scene?

 

Religious terrorism

How can the current turmoil in the North Africa and the Middle East be viewed today and for the future in the light of past experience? Religious conflict has a long and messy history and the world has never been free of it. I suspect people often turn to religion because they have no other way to account for the nature and workings of the universe, how it came about, how it operates, and what is happening to it. Most find it difficult to comprehend our position in what physicists tell us is an ever expanding universe with black holes. We are uncomfortable in recognising that earth is a planet with ourselves specks on it. The ten year Rosetta journey by satellite to a meteorite is a 2014 reminder of our place in the universe. In this context, we really don’t matter and that’s hard to accept. See our place in the universe at https://www.youtube.com/watch?v=17jymDn0W6U

Like a drug, religion becomes a handle to grasp for security, but unsettling when there is more than one religion. Each has organizations and followers offering competing explanations and forms of comfort, and in the process engage in conflicts to achieve supremacy. These occur not just between but within religions. Christians compete against Jews, Muslims, Hindus and Sikhs, but Catholic and Protestant Christians have had murderous fights with each other. They litter battlefields and the pages of history and, for example, account for many of the sea and land battles between England and France.

Today, another such battle rages for Muslims  between Sunni and Shia brands of Islam as well as within each of these brands, with some being more violent than others. Terrorist acts are performed not just on non-Muslims but on other Muslims. Non-Muslims get involved because they reside in places where Muslims predominate such as in Turkey, Egypt, Libya, Iraq, Syria, Iran, Saudi Arabia and the Gulf States. Up to 1918, these areas were part of the Muslim dominated Ottoman Empire, which became subject to British and French influence and rule at the end of WW1.

As minorities, Muslims live in other parts of the world such as Western Europe and the North America. Travel, migration and communications make it possible to involve these parts of the world in a way which was not possible in former times, or at least not to the same extent. Immigrants and those born in these countries travel to fight in the Middle East, in the same way British, Canadians and others fought in the 1930s Spanish Civil War. Persons have both volunteered to serve in foreign wars, and to avoid fighting in them. Thus some British left the UK to avoid national service after WW2, and some Americans left the US to avoid serving in Vietnam in the 1960s.

Back in time to the eleventh century, Muslims and Christians fought each other in the Crusades, seen by Muslims as Christians encroaching on Muslim territory, and by Christians as Muslims invading Christian lands. Over centuries the situation stabilized and up until WW1 (1914-1918), the Muslim religion prevailed in the Middle East and the Ottoman Empire. Meanwhile, the rest of Europe was predominantly Christian with its protestant and catholic brands, which, as noted, like the warring Muslims had their own internal conflicts.

At the end of WW1, the Middle East was carved up as a result of an agreement developed by a British and a French diplomat, Sykes and Picot, to allow the United Kingdom to administer Iraq and some other parts of the Middle East, and for France to be responsible for lands including Syria and Lebanon. The borders drawn in the region left different nationalities within each of the newly designated countries. Turkey became a separate country where before it had been part of the Ottoman Empire. At the time, the British interest in the region included the Suez Canal which provided a sea route to the Indian subcontinent, the prevention of Russia from having a southern outlet which could disrupt trade with India, and access to the petroleum resources of the region when the British navy had converted from coal to oil. All these factors play some role today, but to a lesser extent because the context has changed. Battles can be fought in the air with unmanned planes, rockets and drones. Naval vessels can be resupplied at sea and boots on the ground may have less of a role to play.

Today the news focuses on ISIS/ISIL and the attempt by certain Muslims to form a Caliphate in lands that are part of Syria and Iraq. Later, no doubt, they would want to extend their territory into Lebanon, Jordan, Saudi Arabia, Israel and elsewhere.

“A caliphate is the Islamic form of government representing the political unity and leadership of the Muslim world. The political authority of a Caliph as head of state of a Caliphate comes from the fact that he is seen as a successor to the Islamic prophet Muhammad. (Wikipedia).”

Agreement among Muslims ends there. Sunni and Shia have different ways of appointing a successor; unsurprisingly each tends to favour one of its own.

An ISIS claimant to the Caliphate is Abu Bakr Al-Baghdadi, known by other names but referred to here as Caliph Ibrahim.

“…a spokesman for Islamic State, announced to Muslims worldwide in a commentary titled “The Promise of God” that other organizations would have to acknowledge the supremacy of Caliph Ibrahim or face the wrath of the IS. Caliph Ibrahim declared that the Islamic State would encompass in five years the lands from India to Southern Europe. That would include Mullah Omar’s caliphate in Afghanistan, which has links to Al-Qaeda.

Caliph Ibrahim offers believers a journey back eight centuries to the time of the Abbasids Caliphate when Islam was spreading far afield. It is that lost glory that he is trying to resurrect and impose upon the world. In keeping with the principles of that distant time, Christians and Jews are to be given the opportunity to convert, flee, or to pay a tax and live as second class citizens. All others are to be put to the sword, their property seized, and their wives and daughters violated and forced into slavery.” (Geopolitical Monitor Nov. 26, 2014).

At present this appears to be mainly an intra-religious conflict but one which spills out geographically from the Middle East because of a combination of the following:

  • Muslims born either in the Middle East or outside who sympathise with those living there and choose to support one side or the other.
  • The ability of these outsiders to travel to, supply weapons and money and communicate with those in the Middle East.
  • Backers of the Caliphate eager to engage in a crusade to foreign lands.
  • Acts by Russia and the West to use the Middle East in their rivalry for world influence. At present this looks from the west like Putin versus the rest. He has strong allies within Russia but fewer abroad.

 

Conclusion

The current Middle East conflict, including certain North African countries, is primarily a conflict between Muslims in these areas. In the past, it could be ignored by countries in other parts of the world. This is no longer the case. Like other issues, there are fewer problems which are local. They are increasingly international and are ignored by any country at its peril. Interdependence and globalization are omnibus terms used to describe the current and future state of the world. It requires several disciplines to understand the context of the near future. Four I suggest are geography, demography, politics and economics. All are influenced by evolving technologies.

In trying to understand how the recent past influences the present and may affect the future, I suggest a reading of David Reynolds’ The Long Shadow. While it does not predict the future, it shows how our previous understanding (the conventional wisdom) of the past 100 years has to be re-evaluated with the passage of time. A clearer appreciation of the recent past is a launching pad for looking forward to the world our grandchildren will live in. Two topics for discussion in future postings are 1. Empires and spheres of influence, and 2. The decline of democracy.

The state of the world – is the glass half empty or half full?

August 27, 2014

“NOW is the best time in history to be alive. Our world has experienced a sustained period of positive change. The average person is about eight times richer than a century ago. Nearly one billion people have been lifted out of extreme poverty over the past two decades, living standards have soared, life expectancy has risen, the threat of war between great powers has declined, and our genetic code and universe have been unlocked in previously inconceivable ways. Many of today’s goods are unimaginable without collective contributions from different parts of the world, through which more of us can move freely with a passport or visa, provided we have the means to do so. Our world is functionally smaller, and its possibilities are bigger and brighter than ever before. Never before have so many people been optimistic about their future.”

 

This is the opening paragraph of the Oxford Martin Commission For Future Generation’s Report (2013, available online). It continues by listing the challenges facing future generations. These are read about and viewed daily. The details sell newspapers by attracting audiences for advertisers. But is Armageddon approaching, or is there a more hopeful story to be told? It depends on how the issue is framed. On population/overpopulation, is it where people live, what they have to eat, what illnesses they have, the environment they live in, the conflicts they face? Pick an issue and depending on geography (one of the frames), the future seems ultra bleak or extremely hopeful.

 

The statement about the threat of “war between the great powers” was written about 365 days before a Malaysian airliner was shot down over the Ukraine, increasing the probability of serious conflict between powerful countries either directly or through their sidekicks. Unexpected, if not unknown, events can change the landscape overnight. The 1914 assassination in Sarajevo was followed by a world war. What are the known unknowns which will occur in the next twelve let alone sixty months? Nobody knows but we can make more and less informed guesses.

 

One difference today from 50 years ago, that’s 1964, is globalization, an omnibus term which, through overuse, has become almost meaningless. But if the focus is on the shrinkage effect of technology and how it has connected all parts of the world, then the implications of how things have changed become clearer. Examples abound. At the firm level, production and distribution involve supply chains so that many final goods involve activities in several countries with intermediate goods and services being traded internationally and domestically. It applies to services as well, such as newspaper publishing where content is collected from around the world with much greater ease than in the past. Haircuts and burials may still remain unaffected by globalization, except that the fashions and practices of one country are imported into another.

 

A second example of increasing interdependence is social media undertaken via a myriad of means, many of which confuse me, from email to text messaging, SnapChat, Instagram, Twitter, Facebook, Facetime, Skype and many others. People interact with each other much more so than in the past. Is this beneficial or harmful? A bit of both. It can be used to further corruption and criminal activities like child abuse, but it can be used to catch child-abusers who were there long before the internet. (The New York Times August 24, 2014, has an article about the Vatican’s representative in the Dominican Republic who has been engaged in child abuse for a number of years. It was detected by a Dominican reporter without the use of the internet, but the internet quickly spread it.)

 

Today is different from the past as might be expected but many things are the same, not necessarily worse, such as the “bads” like corruption, conflict, abuse of human rights, treatment of children, women and disadvantaged groups in society. Today, there are means and a greater willingness to address and alleviate if not eradicate these issues. There is a good news side of the story to be told about the “bads” which are the main focus of the media and of public discourse. Most of the Oxford Martin report is given over to discussing the “bads” and what the commissioners feel needs to be done. Fair enough, but context is required in order to understand and evaluate the state of the world. Many things have got better over time.

 

The environment

I have deliberately avoided mentioning the environment because the debate has become toxic, and whatever is said will result in being branded as a supporter of one side or the other. I will back into this by presenting some facts on the basis that “everyone is entitled to his own opinions, but not his own facts.” (Attributed to Daniel Patrick Moynihan, a four time elected US senator who died in 2003).

In 1972, a group of distinguished writers drafted a report entitled The Limits To Growth (LTG). It became a catalyst for the environmental movement, and had dire warnings about the exhaustion of various natural resources which would limit future growth. Forty-one years later in 2013, LTG was found to be wrong in many respects both about pollution and resource use – see http://www.project-syndicate.org/commentary/economic-growth-and-its-critics-by-bj-rn-lomborg, posting by Professor Lomborg in June 2013.

In 1980, Professor Julian Simon, an economist bet Paul Ehrlich, author of The Population Bomb that the inflation adjusted price of any five commodities Ehrlich chose would have declined in ten years time. Ehrlich chose chromium, copper, nickel, tin and tungsten. The world population grew by 800 million in the decade and the price of all five fell – three in nominal terms and all five in inflation-adjusted terms. Ehrlich lost the bet. (More details on other resource bets are discussed in “Simon-Ehrlich wager” in Wikipedia.)

The environment and global warming is a topic with many facets so that selective use of facts and data can lead to a wide range of conclusions which are then used selectively to support a viewpoint. My non-expert view of this topic notes the following:

  1. The earth has experienced periods of cooling and warming with the onset and decline of ice ages. I vacation in a part of Ontario covered by lakes which were gouged out as the ice retreated northwards. Whatever the temperature data records today it has been subject to change in earlier times.
  2. The extent to which warming is taking place is measurable. The extent to which it is due to human activity is open to debate, as is the extent to which this is a disaster for mankind.
  3. Matt Ridley, a columnist for the Times (London) and a member of the British House of Lords has reported on this issue for 25 years. His summary of the 2014 Report of the International Panel on Climate Change is published in The Financial Post, June 19, 2014, p.FP9

“The IPCC commissioned four different models of what might happen to the world economy, society and

technology in the 21stcentury and what each would mean for the climate, given a certain assumption about the atmosphere’s “sensitivity” to carbon dioxide. Three of the models show a moderate, slow and mild warming, the hottest of which leaves the planet just 2 degrees Centigrade warmer than today in 2081-2100. The coolest comes out just 0.8 degrees warmer.

Now two degrees is the threshold at which warming starts to turn dangerous……That is to say, in three of the four scenarios considered by the IPCC, by the time my children’s children are elderly, the Earth will still not have experienced any harmful warming, let alone catastrophe.”

The fourth scenario produces 3.5 degrees of warming by 2081-2100. It is based on the following assumptions:

The global population will increase to 12 billion – this is at least one billion more than the UN expects, and the rate of population growth is presently declining.

The world will burn ten times as much coal as today, producing 50% of primary energy in contrast with 30% today. Assumptions made in the report about nuclear and renewable energy sources mean that fossil fuels will dominate energy production – Ridley considers these assumptions “very, very implausible.”

“That is to say, even if you pile crazy assumption upon crazy assumption till you have an edifice of vanishingly small probability, you cannot even manage to make climate change cause minor damage in the time of our grandchildren, let alone catastrophe. That’s not me (Ridley) saying this – it’s the IPCC itself.”

  1. The rate at which icebergs and ice sheets melt is one measure of global warming. For Greenland, ice sheet data are reported at http://nsidc.org/greenland-today/ I urge anyone concerned with this topic to interpret the results so as to give an unqualified yes or no re global warming. One comment on what summer 2014 data mean so far is that sea levels might rise 2 mm.

 

Conclusion

My partial list of issues of concern for future generations includes the rate of global population growth, urbanization of populations, age structure of populations, old and new forms of criminal activity facilitated by communications technology – cyber-crime and cyber-terrorism, terrorism combined with the use of nuclear and chemical weapons, and the breakdown of the working of democratic institutions including a growing sense of entitlements which the democratic process generates to plant the seeds of its own destruction. If forced to provide an answer, I see the glass as being half full. More appropriate perhaps would be to apply to the future William Goldman’s conclusion about Hollywood, that despite there being smart people involved “nobody knows anything” that is about the future success of a film.

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Some afterthoughts

A related topic for future generations is a recent Pew study of the impact of robotics on future jobs – see  http://www.pewinternet.org/2014/08/06/future-of-jobs/

AI, Robotics, and the Future of Jobs

By Aaron Smith and Janna Anderson

“Key Findings

The vast majority of respondents to the 2014 Future of the Internet canvassing anticipate that robotics and artificial intelligence will permeate wide segments of daily life by 2025, with huge implications for a range of industries such as health care, transport and logistics, customer service, and home maintenance. But even as they are largely consistent in their predictions for the evolution of technology itself, they are deeply divided on how advances in AI and robotics will impact the economic and employment picture over the next decade.

Key themes: reasons to be hopeful:

1) Advances in technology may displace certain types of work, but historically they have been a net creator of jobs.

2) We will adapt to these changes by inventing entirely new types of work, and by taking advantage of uniquely human capabilities.

3) Technology will free us from day-to-day drudgery, and allow us to define our relationship with “work” in a more positive and socially beneficial way.

4) Ultimately, we as a society control our own destiny through the choices we make.

Key themes: reasons to be concerned:

1) Impacts from automation have thus far impacted mostly blue-collar employment; the coming wave of innovation threatens to upend white-collar work as well.

2) Certain highly-skilled workers will succeed wildly in this new environment—but far more may be displaced into lower paying service industry jobs at best, or permanent unemployment at worst.

3) Our educational system is not adequately preparing us for work of the future, and our political and economic institutions are poorly equipped to handle these hard choices.

Some 1,896 experts responded to the following question:

The economic impact of robotic advances and AI—Self-driving cars, intelligent digital agents that can act for you, and robots are advancing rapidly. Will networked, automated, artificial intelligence (AI) applications and robotic devices have displaced more jobs than they have created by 2025?

Half of these experts (48%) envision a future in which robots and digital agents have displaced significant numbers of both blue- and white-collar workers—with many expressing concern that this will lead to vast increases in income inequality, masses of people who are effectively unemployable, and breakdowns in the social order.

The other half of the experts who responded to this survey (52%) expect that technology will not displace more jobs than it creates by 2025. To be sure, this group anticipates that many jobs currently performed by humans will be substantially taken over by robots or digital agents by 2025. But they have faith that human ingenuity will create new jobs, industries, and ways to make a living, just as it has been doing since the dawn of the Industrial Revolution.

These two groups also share certain hopes and concerns about the impact of technology on employment. For instance, many are concerned that our existing social structures—and especially our educational institutions—are not adequately preparing people for the skills that will be needed in the job market of the future. Conversely, others have hope that the coming changes will be an opportunity to reassess our society’s relationship to employment itself—by returning to a focus on small-scale or artisanal modes of production, or by giving people more time to spend on leisure, self-improvement, or time with loved ones.

A number of themes ran through the responses to this question: those that are unique to either group, and those that were mentioned by members of both groups.”

In sum, the experts agree that technology will make a difference to employment opportunities in the near future, but are divided on what that impact will be. There is however a broader consensus on the failure of the educational infrastructure to adapt to the swift changes which are taking place.

 

 

The Minerva Project

August 19, 2014

The Minerva Project described in the Atlantic Monthly (August 13th, 2014) signals ways in which higher education is evolving, resulting mainly from developments in communications technology. Institutional structures will change with implications for students, teachers, administrative staff and governments. Minerva is an accredited university in San Francisco and will shortly open six campuses outside the US.

1. The Atlantic article argues that the model of higher education and probably education in general is being hit with a wrecking ball, as the magazine cover depicts.  How the parts will be reassembled and how students of all ages (I include myself but am more interested in those born after 2000) will be affected is a subject for study. Similar changes have occurred in numerous areas including book, newspaper and magazine publishing, film, television, music and video production and distribution, banking and finance and shopping. How often do you now go to your bank, write a cheque or use a broker to make stock transactions? Post secondary education is the next institutional arrangement to be reformed with implications for students, teachers, administrators and governments.

2. Online learning as provided by MOOCs is one model in contrast with in class learning. All current teaching combines some combination of in class and online learning. The latter has a long heritage with correspondence courses and the Open University in the UK (I am sure there were models in other jurisdictions with which I am unfamiliar). These suppliers solved the problems of invigilating, marking exams and creating credentials which employers recognized. A large number of people often register for MOOCs, but a small percentage take the tests which result in some kind of credential. I am one of those who register. I do so out of interest in a subject and it’s free. Others register in order to search the available options before deciding which ones to take. Persons over 30 are more likely to seek a credential, suggesting that online learning is being used as a method of continuing education.

3. What Minerva does is to combine online and in class education in a novel way which creates for-pay education, students selected entirely on the basis of academic ability from around the world – no entitlements for certain groups, awarding of credentials (which will have to prove their worth as is the case with any new brand), and a requirement that faculty teach and conduct seminars and discussion groups in a particular way, not just how they choose. None of us who were in this game before had much if any experience in lecturing and conducting seminars, other than what we had been subject to. We mostly winged it with student evaluations providing some feedback. Today, social media provides often ruthless comments on instructors.

4. Minerva charges a fee of 28k dollars annually with some financial aid provisions. This is about half an Ivy League fee. If fees are considered an annual consumption expenditure then they are high, but if treated as an investment and a capital expenditure then they are similar to taking a mortgage to invest in home ownership or a loan to buy a car. The value of the educational investment will only be known in the future as will the ownership of a house and car. The latter depreciates with time and will become worth less unless it becomes valued as an antique. None of the cars I ever owned fell into the antique category. An education will also depreciate with time and is why the process of continuing education exists either within a firm or by taking external courses. Firms offer training seminars for their employees, while academics are expected to keep abreast of their discipline by reading and undertaking published research and presentations.

5. Would a Minerva type operation grant tenure, a form of long term contract which the institution but not the instructor find it difficult to annul? Not as long as it can hire and retain suitable lecturers. If this is not possible, then it will offer long term contracts and other benefits to retain high quality staff. Note that without a contract a staff member can be fired at any time. And if lecturers with long term contracts wants to leave early, it is probably a good idea to let them go as they may not be delivering the best teaching services thereby reflecting adversely on the institution.

6. My guess is that the Minerva format will be followed by for profit competitors who will try different formats for the delivery of higher education. Change is already evident and only those administrations which experiment and adapt will survive. I am willing to bet $100 that change will be clearly visible within three years – we can negotiate on who should be the judge of the outcome.
Sent from my iPad

What Future for Online Learning?

April 27, 2014

During the past year, I enrolled in a number of online courses including World History from 1300, The History and Future of Mainly Higher Education, Financial Markets and A Beginner’s Guide to Irrational Behaviour. These have helped to shape my views on the future of online learning, which, using current technology, is still in its early stages, although a form has previously existed. It is too early to know how it will turn out. The following are my impressions to-date about its future.

 

  • The beginnings of online learning occurred with correspondence courses, the Open University in the UK, and the publishing of textbooks.
  • Some who have delivered online courses see them as a substitute for text books. Students can watch the course in their own time, and attend classes conducted as discussion groups focused on the lecture content. Many lecturers already provide outlines of their lectures available as Power Point presentations, either before or after a live lecture.
  • Experimentation is taking place with various degrees of in-class and online lectures. Different disciplines and levels (undergraduate and graduate) lend themselves to different blends. The instructor and subject matter will make a difference to what does and does not work. Seminars and lab work require an in class presence.
  • Those who have given online courses say that the upfront (fixed) costs of producing the material are high. The cost of another student accessing the material (marginal cost) is negligible, and make these courses attractive to cash strapped institutions and those not wishing to raise fees. Fixed costs are likely to decline as experience is gained and software improved to facilitate presentations.
  • Those watching videos are used to the production values of first rate television programs such as Downton Abbey, a National Geographic Special or Jeopardy. Online lectures which do little more than put a camera in a classroom will be an ineffective teaching tool, regardless of the reputation of the instructor and the institution.
  • While the foregoing addresses mainly university teaching, online instruction is useful for education at all levels including schools, technical colleges, professional training and any skills which require updating as developments occur.
  • The issue of certification for online courses is always raised. For example, an online course given by a Yale professor may lead to a certificate if the student meets certain conditions. While it will not be equivalent to a Yale course credit (or degree), if the person receiving the credit gets a job, and after a probationary period appears to have the knowledge associated with the course content, the certificate will gain the recognition of having certain value which becomes known to employers. Experimentation is taking place to test different business models.
  • Richard Levin, an economist and President of Yale University for 20 years became the CEO of Coursera, one of the largest commercial companies offering MOOCs  (Massive Open Online Courses). Udacity and edX are two others, while the Kahn Academy offers course material for free. Universities and entrepreneurs are investing in these changes.
  • To-date, information technology (IT) has resulted in significant restructuring of industries, for example, television, film, newspaper, book and magazine publishing, (although less so for periodical publishing), finance, retail shopping, and manufacturing through the use of robots. As outlined above, IT is currently creating changes to the delivery of educational and training services. Quality content is now available worldwide wherever the internet and mobile phones are available. The current world population of 7bn is associated with 6.8bn mobile phones – eg. phones per 100 inhabitants by country, Italy 147, Brazil 137,Morocco 113, China 89, Canada 74, N.Korea 8.
  •  Cost implications for universities depend on the restructuring which occurs. Some universities offer only online courses, and thus save on buildings and salaries of support staff. Others offer a mix of online and on-campus courses, where there will be a mix of additional equipment to distribute online course material but savings on classrooms, offices, support staff and buildings. Ever since the introduction of portable computers, my observation is that faculty has spent less time in campus offices and more time working at home. Other industries no longer provide individual offices for their staff which use shared space. The same could occur in post-secondary institutions.
  •  Cost implications for students include more efficient use of their time, less travel time, easier to work at home and to collaborate with other students and faculty online. They can also mix study with work more easily.
  •  It is the case that taking courses online is not the same as getting the benefits of live interaction with other students and faculty, and use of the other facilities which a traditional university setting offers, such as a library, athletic facilities, clubs and cafeterias. In the same way that restaurants offer different facilities and menus, so post secondary institutions will offer different combinations of onsite and online facilities at different prices to the students and the taxpayers. The latter tend to fund a big chunk of university education in most countries.

 

Why we fail to foresee approaching problems?

April 23, 2014

I am struck by the frequency with which unexpected events occur, some more important than others, and which are widely debated on old and new media when they do strike. For example:

 

  • The US stock market increased by over 25% in 2013. If anyone had predicted this in January 2013, it would have been dismissed derisively. Some analyst did predict a rise of 11%. This was considered as foolishly over-optimistic. While there are thousands of people following stock market conditions, the predictions were worse than weather forecasts.
  • There was little, if any, public coverage about a possible Russian takeover of the Crimea in 2014 before it took place. Events in Tunisia, Libya, Egypt and Syria also emerged with little warning.
  • There is extensive discussion and debate over global warming and its possible effects, but very little discourse about previous ice ages and what happened when warming occurred in the past. (Historians point to at least five previous major ice ages. The last one left the contours of the Canadian Shield and the lakes which I enjoy today in the summer).
  • A failure to recognize in Canada and other developed countries the weakening of the public educational system. Grade inflation has taken place in high schools, especially where there is no province wide exam, as is the case in Ontario since the 1960s. A much higher percentage of young people are entering universities and either being unemployed or employed in occupations which don’t need a university education.

 

The last is like the case of the frogs placed in water who do not notice that it is heating up until they expire. Things are happening around us which we either deliberately ignore or fail to recognise what is happening. Donald Rumsfeld illustrated this.  In 2003, he was awarded the Foot in Mouth Award by the Society for Plain English for the following remark:

 “Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns, there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know.”

Canadian Mark Steyn defended Rumsfeld by calling it “in fact a brilliant distillation of quite a complex matter”, and Australian economist John Quiggin wrote, “Although the language may be tortured, the basic point is both valid and important …”

I have had difficulty in sorting out what is included in each category but will try below. The question concerns how an analyst decides the context for decision making about the future. For example, how do you decide when to go to war, how to treat legal and illegal immigrants, whether to sign a trade or environmental agreement?

Known knowns – these are things that we know we know, for example,

 

  • The distribution of intelligence in the population is normal. There are more and less smart people in the population. Schools and universities have to rank students by grades although these may not be reliable indicators.

 

  • The global population was 1.5 bn in 1900, is 7.2 bn now, and will rise towards 9 billion by 2060. The age structure of a country’s population can be estimated fairly accurately.

 

  • Base metals and rare earths will remain in finite supply.

 

  • Migration from country to city will remain high, and migration of people from poor to rich countries will continue both legally and illegally.

 

Known unknowns – things we know will happen but not when, where or how much.

 

  • The supply of natural resources will increase as a result of discoveries and technological change but by how much is not known.

 

  • A major financial crisis will affect commodity prices, stock prices and interest rates, but the extent and timing is unknown.

 

  • Politics and policies in different countries will affect the natural resource sector re exploitation, and the environment, but how and when is not known.

 

  • Earthquakes and tsunamis will occur in different locations, but where, when and their size are unknown.

 

Unknown knowns – things we don’t know we don’t know

 

  • Asset pricing bubbles will arise and then burst

 

  • Political corruption exists in all countries but the degree is unknown

 

  • Income inequality in a society will change over time.

 

  • There will be further revolutions and wars but their timing and location are uncertain (Middle East, Russia, China, N.Korea for example).

 

Some suggest a fourth category, namely Unknown Unknowns – things that we refuse to acknowledge that we know. For example, those who issue warnings re climate change seldom point to previous periods of climate change, although this attitude is changing.

Another example is the refusal by some to admit that prisoners in Abu Ghraib, Iraq, and in Guantanamo, Cuba were subject to torture during their interrogation. Until Wikileaks and the actions of Edward Snowden, there was the false assertion that US agencies were not spying on their own citizens.

This classification shows the difficulty of making decisions in the face of uncertainty, and that uncertainty is made up of different components, some of which are harder to assess than others. The conditions for a game of tick-tack-toe are clear and the outcome predetermined after playing a few times. Drafts and chess have more possible moves, but the board is fixed, as are the moves which each player can make. A computer can be programmed to play chess and has beaten a chess champion.

In the arena of international affairs, such as the west assessing the next moves by Russia in the Ukraine, for Russia the next moves by the west, and for Japan the next moves by China in the South China Sea, there is more uncertainty and the outcome difficult to analyse and predict.

So what are the areas where the water is warming and that should concern us about the future? The following is an idiosyncratic and partial list.

  • In the South China Sea, China faces off against its neighbours, especially Japan, Korea, Indonesia and the Philippines over claims to resources. The presence of the US navy adds to these tensions.
  • In Eastern Europe, the spheres of influence are being tested by Russia in areas involving the Ukraine, Poland, Finland and the Baltic states with implications for NATO member countries which are not sure how to respond.
  • Chinese economic growth has resulted in part from domestic investment projects, including the building of cities for several million inhabitants. Many are ghost towns with few living there. They will deteriorate if not maintained and become a drain on the domestic economy, which in recent years has promoted global economic growth by the demand for imported natural resources and the supply of cheap labour. The wage advantage is being undermined by the substitution of robotics for persons.
  • In Myanmar, with Chinese assistance a new capital is being built at Naypyidaw. It boasts a 20 lane highway with street lights and virtually no traffic, suggesting poor planning and harm for an already poor economy.
  • Institutions in democratic countries are being weakened by domestic forces as politicians compete for taxpayers’ votes by spending taxpayers’ money. This leads to the establishment of entitlements and interest group politics which Adam Smith recognized in the 18th century as harmful to society. The rise of right wing parties, especially in Europe, and pressure groups like the Tea Party are a reflection of this process. Niall Ferguson describes this as the Great Degeneration.

 

I invite others to list their concerns which if not recognized may cause us to become dead frogs.

 

The Second Machine Age – GDP and Jobs

April 10, 2014

In order to plan for economic and social change, it is useful to know what is happening in an economy. Various economic measures indicate current developments, GDP being a widely used overall measure of how national economies are changing. Employment levels and the skill structure of the economy, and those employed or unemployed are other statistics reported quarterly and annually. Others have proposed a measure of happiness.

The remainder of this posting deals with two topics, 1. The adequacy of GDP accounting to assess the state of an economy, and 2. How skill requirements are changing as a result of computers and communications technology, and what this may mean for those providing and receiving education.

 

  1. GDP

GDP was never designed as a measure of overall social welfare although, perhaps out of convenience or laziness, it is often used as a proxy for welfare. Its shortcomings are well known, recently discussed by Diane Coyle in GDP: A Brief but Affectionate History, (Princeton, 2014). To paraphrase Coyle’s preliminary comments on the limitations of GDP (p.35):

  • It measures paid for goods and service, excluding many unpaid services such as parents’ care of children, cooking at home and housework.
  • It includes “bads” such as the environmental costs of pollution.
  • It ignores improvements in the quality of new goods, especially when technology changes (for example from manual to electric typewriter to word processor).
  • It excludes many indicators of progress such as health, education, infant mortality and life expectancy.
  • The simple reporting of GDP per capita does not show the distribution of GDP between rich and poor.

Coyle surveys other indicators such as the Human Development Index, Gross National Happiness, and the output of a working group lead by Nobel winning economists Amartya Sen and Joseph Stiglitz examining the Measurement of Economic Performance and Social Progress.

In sum, there is ongoing research both to improve the measurement of GDP and to develop indicators which incorporate other aspects of social, political and economic welfare. Economic activities associated with the second machine age create some urgency for this work, as many information related activities generate free but valuable goods and especially services, and therefore underestimate a country’s GDP.

Downturns, such as followed the recent recession, may not be as bad in aggregate terms as reported. By April 2014, ninety-three percent of the labour forces in Canada and the USA were employed. But the downside is that at the same time the internet and communications have altered the skill structure of the labour force leading to un- and underemployment. We look at this in the next section.

  1. Skill requirements for employment 

Andrew McAfee, coauthor of Race Against Machines and The Second Machine Age predicts that rapid advancements in automation are eliminating more middle class jobs. The skill profile of the workforce will change from looking like a bowl, with lower skills at one end moving bowl-like to higher skills at the other, to a Tuna can with almost entirely low skilled jobs at one end and high skilled jobs at the other, and very little need for medium skilled (perhaps middle class) jobs. The hamburger flippers are at one end and computer scientists at the other. These skill changing forces are reflected in the rhetoric of politicians who try to win votes by pledging to save the middle class. which is adversely affected by the changes. Probably they cannot deliver.

These trends will likely accelerate. While Canada decries the loss of so-called good jobs in manufacturing to low wage countries, the same loss is happening in China. While initially the jobs moved from high to low wage countries, low cost automation is now replacing low wages.

John Carroll, co-author of The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups, states:

  • “Technology has improved so much, and will keep improving for the foreseeable future. Sensors are so cheap that you can build them into anything for almost no cost. Add a motor and you have a robot. Computing power costs essentially nothing, and everything can be controlled wirelessly these days, so it isn’t hard to imagine interesting things that the robots can do.”

If robots are going to substitute for people, then schools and post secondary institutions will have to adjust their course offerings and their means of delivery with more of it online. Students who want a liberal arts education will still be able to find one, but it may not lead to the desired type and level of paid employment. At the same time they will have the opportunity for lifelong learning, due to the availability of various combinations of online and in-class learning with some of the best instructors from around the world.   Indicative of this trend is the appointment of the former President of Princeton University to become the CEO of Coursera, one of the main commercial firms offering online courses.

 

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Three of the current remarkable examples of computer robots are Google’s driverless car, the computer which beat a chess champion, and the one which won at Jeopardy by answering questions.

Following are some further references to the probable changing skill structure of the workforce, from the Conversible Economist posting for April 9, 2014. (http://conversableeconomist.blogspot.ca/).

It reads as follows:

The current discussion is about robots that are mobile, able to receive a variety of commands, and with the capability to carry them out. For example, the March 29 issue of the Economist has a lengthy cover story on the “Rise of the Robots.” But I’ll focus here on Stuart W. Elliott’s article, “Anticipating a Luddite Revival,” which discusses how robots will affect the future of human work. It appears in the Spring 2014 edition of Issues in Science and Technology.  Elliott did a literature review of the robot capabilities that are cutting edge and now becoming feasible as discussed in AI Magazine and IEEE Robotics & Automation Magazine from 2003 to 2012. Here, I’ll refer to his discussion of the more recent capabilities of robots in four areas: language capabilities, reasoning capabilities, vision capabilities, and movement capabilities.

 

Language capabilities. “[T]he tasks included screening medical articles for inclusion in a systematic research review, solving crossword puzzles with Web searches, answering Jeopardy questions with trick language cues across a large range of topics, answering questions from museum visitors, talking with people about directions and the weather, answering written questions with Web searches, following speech commands to locate and retrieve drinks and laundry in a room, and using Web site searches to find information to carry out a novel task.”

 

Reasoning capabilities. “[T]he tasks included screening medical articles for inclusion in a systematic research review, processing government forms related to immigration and marriage, solving crossword puzzles, playing Jeopardy, answering questions from museum visitors, analyzing geological landform data to determine age, talking with people about directions and the weather, answering questions with Web searches, driving a vehicle in traffic and on roads with unexpected obstacles, solving problems with directions that contain missing or erroneous information, and using Web sites to find information for carrying out novel tasks. One of the striking aspects of the reasoning systems was their ability to produce high levels of performance. For example, the systems were able to make insurance underwriting decisions about easy cases and provide guidance to underwriters about more difficult ones, produce novel hypotheses about growing crystals that were sufficiently promising to merit further investigation, substantially improved the ability of call center representatives to diagnose appliance problems, achieved scores on a chemistry exam comparable to the mean score of advanced high-school students, produced initial atomic models for proteins that substantially reduced the time needed for experts to develop refined models, substituted for medical researchers in screening articles for inclusion in a systematic research review, solved crossword puzzles at an expert level, played Jeopardy at an expert level, and analyzed geological landform data at an expert level.”

Vision capabilities. “[T]he tasks included recognizing chess pieces by location, rapidly identifying types of fish, recognizing the presence of nearby people, identifying the movements of other vehicles for an autonomous car, locating and grasping objects in a cluttered environment, moving around a cluttered environment without collisions, learning to play ball-and-cup, playing a game that involved building towers of blocks, navigating public streets and avoiding obstacles to collect trash, identifying people and locating drinks and laundry in an apartment, and using Web sites to find visual information for carrying out novel tasks such as making pancakes from a package mix.”

Movement capabilities. “[T]he tasks included moving chess pieces, driving a car in traffic, grasping objects in a cluttered environment, moving around a cluttered environment without collisions, learning to play ball-and-cup, playing a game that involved building towers of blocks, navigating public streets and avoiding obstacles to collect trash, retrieving and delivering drinks and laundry in an apartment, and using the Web to figure out how to make pancakes from a package mix.”