Jeffrey Sachs: prediction

Transcript context

…They’ll predict which days you’re going to come. Yeah, they’ll have a very good idea. They’ll welcome you by name, of course, as you arrive. “Oh, we were expecting you. You’re 10 minutes late. Is everything OK, Mr. Sachs?” [laughter] Because Google will know where you are any moment anyway. That’s coming, and it will transform, fundamentally, the labor market. The interesting conceptual question is, “Is this a good thing or a bad thing?” But there is this, actually, deep conceptual question. There is something right, actually, theoretically about the argument that the demand for labor falls, the wages decline, and that can actually lead to a downward spiral in our economies. I have a paper from last year with Larry Kotlikoff showing how that works. I have another paper coming out in a couple of weeks that I really like showing, in an overlapping generations context, how you can get weird outcomes. But what’s always true is that, with enough government intervention, redistribution of various kinds from old to young, for example, from capital owners to labor owners, of course you can make everybody better off — because pure technological change by definition, if properly handled, can make everybody better off. This question of how we’re going to handle this transition is a really interesting one. I believe it’s happening. I believe it’s a fascinating subject for analysis and research. I believe it’s not been studied in very much depth yet. That leads me to the second question, because it is a good segue. What do we learn in economics? I believe not the right things. I’ll take just this question. In my view, whether it’s the geography questions or the manufacturing question that you asked about or the robotics or whatever it is, what’s fascinating for us in our real lives and in our societal choices is the change that we’re constantly living in during this past 230 years since Watt gave us the steam engine. We’ve been in 230 years of relentless change; technological change, structural change, societal change, cultural change. Yet our economics models are basically static, meant to be timeless. If we really want to understand the world, we need to go deep into understanding what Baxter is doing — Baxter the Robot — or Watson, or what really is changing technologically. Concretely, at the graduate level, what would you do with them?…

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