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Have we had enough of experts?

Posted By Robin Jourdan, Tuesday, June 18, 2019

Robin Jourdan examines the issue of expertise in our world today through her sixth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Sage advice; knowledge is power; Plato's Noble Lie; the 10,000 hours’ goal. Such phrases describe experts and expertise since the 1300s. Often citizens reject experts as an objection to power that has become centralized in government or among distant leaders. Over decades there has been an idea that the people in charge, whether they're railroad barons or the government, ignore ordinary folks. Additionally, some further confuse rejecting expertise for showing their independence of thought. Is this a pre-emptive rejection of anything that implies their own opinion may be flawed?

 

Certain societies have romanticized grassroots efforts or the plain nerve to get the job done. Thus, the confidence of the dumb. This aspect of human nature is called Dunning-Kruger. When taken to the extreme, it can show itself through demonizing experts who disagree with our ideological views. Who is the expert? What gives him/her the right to speak on this matter? Is the expert using wiggle-words? These are words that skirt the truth by bending language against the listener. As we hear them, we feel twinges. Learned heuristics can cause even the most open minded to shut down. This lays the foundation of why political discourse is currently so distasteful.

 

This is different from skepticism. Skeptical but level-headed people are why nations achieve great heights in science, diplomacy, the arts and more. They never displace ordinary voters as the deciding voice in affairs of state. Skepticism does not rely on continual assurance that popular views, no matter how nutty, are virtuous and right.

 

These aspects combat today's "Expert Revolution" with economic value correlating to expertise. The democratization of knowledge and broader spheres of open conversations muddle the thinking. Expertise is further complicated by the myth that every opinion is equal. Regardless, it's essential that open discussions continue, as an ingredient for stable governance.

 

What happens when expertise is politicized? Use of leaded gasoline, IQ tests, smoking tobacco, and others show links between experts and political decisions. Such fuel counter-expertise controversies. It's essential in democratic decision making for the people to understand the issues of the day. What's needed is especially deep understanding to address approaching wicked and complex problems. As such, counselors rely on the evidence of expert analysis. Biased experts undermine public confidence in technocratic evidence. When trust in expert advice is damaged, decisions made are less optimal.

 

Experts in any government model must remain servants not masters to the system. Such distinction is needed as non-biological entities are becoming containers for expertise. Machine expertise, AI, and deep learning will increasingly factor in our decision making. Some say the rise of artificial intelligence will make most people better off toward the end of this century. Still, many have concerns about how AI will affect what it means to be human, to be productive and more.

 

Going forward we will struggle with ever more complex wicked problems never seen before needing more intelligence than ever. Today, innovation success tends to come from generalists, not only from specialized experts. What if we look at experts by the relative strength of their expertise? A proposed range of possibilities follows, each critical in light of the world's challenges.

 

First up, "Armchair Experts" can be convincing, but conversational. This jack of all trades is a master of none, but generalists have a role. The ability to cross-boundaries is often an ingredient for economic innovation. Next in the continuum: "Appliers" meet their curiosities by tinkering with new ideas, technologies, and other skills. Shortages of these educated workers result in higher demand. "Authorities" add experience to the equation and carry responsibility for the growth of an idea, technology, or other skill. Inclusion and innovation spur economic growth, including new jobs for this persona. Such people are held responsible for long-term systemic solutions. The final level adds accountability, real subject depth is met by the "Ace."  The Ace is a master of independence, capability, and invention.  They have the longest-view of approaching issues and are the fewest in the population.

 

Have we had enough of experts in the world? The simple answer is no. While the use of experts can be exploited and admonished, there is a role for experts that cannot be denied. Inclusion and diversity often make for successful enterprises throughout human history. What's needed is a greater understanding of the degrees of expertise, accountability, and the value of each. Wicked problems march forward whether experts are available or not. All things considered, the best approach to solve wicked problems is to create equally wicked but wise solutions.

 

© Robin Jourdan 2019

Tags:  expertise  professionalism  professionalization 

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Is globalization fuelling inequality?

Posted By Felistus Mbole, Friday, June 14, 2019

Felistus Mbole a member of our Emerging Fellows program investigates the impact of globalization on inequality in her fifth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The wind of globalization has been blowing for decades and digital technology is fuelling it. The world is more interconnected today than at any other point in history. There has been a significant increase in free trade and cultural exchange. Cross-border trade deals between both private sector players and national governments form part of everyday news. What are the economic implications of this massive level of interconnectedness? What does globalization mean for inequality?

 

Technology has created a connected world where opportunities are shared. Globalization is the integration of markets. National boundaries have become more porous to goods, services, capital, and people. While some boundaries remain physically closed, this does not hinder flow of capital, services, and data. Social media applications like Twitter has particularly accelerated movement of information. The last couple of decades have especially seen a marked growth in cross-border exchange of human capital. The increasing use of sophisticated technology has generated need for specialised skills which are globally limited. Organisations are able to hire such technical services globally. Supported by internet connectivity, technical service providers do not need permits to work in particular countries. They can permeate national boundaries by providing their services virtually.

 

Who are the winners and losers from globalization? Globalization doesn’t seem to be benefitting everyone. Currently, there are an anti-globalization campaigns and policies in countries that view themselves as benefiting the world at the expense of their national interests. Offshoring of certain aspects of business to developing countries has enabled them to participate in global supply chains, positively contributing to their economic growth. On the other hand, labour has tended to flow from the less developed to developed countries and capital in the opposite direction. Developing countries have therefore benefitted most from globalization compared to the more developed ones. The effect has been decreased inequality between the global north and south.

 

Nevertheless, it is only the economically productive developing countries that benefit from joining global supply chain. The less productive ones that are simply an end market for goods manufactured in other countries. For instance, India and China are big beneficiaries of globalization currently. However, many countries in Sub-Saharan Africa continue to lag. The less skilled segments of the population, both locally and globally, are being left behind economically, widening the inequality divergence. Globalization is clearly a tide that is not lifting all boats.

 

What does this mean? The perceived inability of globalization to create mutual benefits could lead to political tensions between countries as seen currently between the United States of America and China. Trade wars and related conflicts could emerge if these perceived imbalances are sustained.  Trade has been shown to be the greatest driver of economic success and thus the convergence between developing and developed economies. Policies aimed at enhancing human capital through broadened access to quality education and healthcare, and reducing barriers to trade could reduce global inequality.

 

Globalization is a good thing. As the ageing economies such as Japan and parts of Europe start to fall short of the labour that is needed to drive their economies, Africa will be experiencing its demographic dividend. The world’s labour can be developed and effectively harnessed and distributed to benefit everyone. This is only possible if the wind of globalization continues to blow unabatedly.  

 

© Felistus Mbole 2019

Tags:  economics  globalization  inequality 

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What’s Cash?

Posted By E. Alex Floate, Tuesday, June 11, 2019

Alex Floate, a member of our Emerging Fellows program examines the concept of cash in a global digital economy through his fifth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Adam Smith suggested over two-hundred years ago that all money is nothing but a matter of belief. Even with the complexity of today’s economic and monetary systems, it still appears that Smith was right. We believe money has value and that value will be accepted by others. Even commodity-based money systems, such as the gold standard, relied on belief that the commodity is of value and exchangeable for other goods or services. Belief, value and trust is what composes our money.

 

Currently governments serve the function of guaranteeing trust that money is worth the face value printed on it. That as legal tender it is exchangeable for other items of value. This trust and value placed in currencies is based on the belief of the economic and political stability of the country. Some currencies, such as the US Dollar have greater belief entrusted to them and are used more widely than others for both legal and illegal transactions; the USD accounts for more than 85% of currency conversions on any given day. Despite predictions of impending doom of the US Dollar due to quantitative easing during the 2008 recession, those moves by the US Treasury bolster the status of the dollar as it demonstrates the willingness of the government to protect the Dollar based economy.

 

Exchanging money can be simple when the other person is standing in front of you and can be easily handed the preferred legal tender. Try to transact across distance, or with large sums, and gatekeepers to the money will necessarily become involved. These include the treasury that issued the money and create the rules for the currency, the banks or institutions that will carry out the transaction, and the institution that receives or sends the money depending on whether you are the buyer or the seller. 

 

Each of these institutions, in addition to having the mechanisms and expertise to conduct the transaction, are also part of the trust mechanism that ensure the belief in the currency remains intact. However, all these gatekeepers create friction in the system that increase the costs of transferring value. Technology can be key in removing those frictions, but current financial interests who profit from this friction will do their best to maintain the status quo. Smokescreens that create the illusion of digital currency will become more common, but the call will most likely remain for the US dollar to remain the universal currency.

 

But in a global digital economy who will be the new gatekeepers? Though legal tender is the property of the issuing country, value stored in the money is not the property of the government. Value can be exchanged by other means, such as digital currency or credit in exchange for value. A future where Alibaba or Amazon trade in their own currency, with employees and contractors exchanging their value for credits on account, is not that far outside the realm of possible.  

 

A threat to both traditional means of exchanging value and potential new universal currencies are the rise of nationalist and tribalistic movements across the globe. If these movements win out physical and digital borders will become hardened, networks will be splintered, and markets fragmented. In this situation where will innovation come from, and how will value be held and exchanged? Those organizations and individuals with technical knowledge and savvy will be in the best position to navigate and profit from this situation. Those outside of this group may find themselves with either diminished ability to easily transact with the new digital currency or be at the mercy of a new set of gatekeepers, who have ‘digital collars’ instead of white ones.      

 

© 2019 E Alex Floate

Tags:  cash  digital economy  economics 

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In a digital economy will the abundance of data fuel a golden age of wisdom?

Posted By Paul Tero, Thursday, June 6, 2019

Paul Tero a member of our Emerging Fellows program examines the possibility of building an age of wisdom in the digital economy. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Knowledge in action. Sagacity. Percipience. Having experience, knowledge and good judgement. These words and phrases all describe and define wisdom. But will an abundance of data lead us to a golden age of wisdom? Will a richness of facts and figures, statistics and evidence lead us to a never-ending harvest of good judgement?

 

If we give credence to the DIKW (data, information, knowledge, wisdom) information science hierarchy, the answer leans to the affirmative. For with this framework, the following is the pattern: firstly, an abundance of data certainly leads to a wealth of information, or descriptions, about a plethora of matters. Which should, in turn, facilitate a breadth and depth of knowledge that is available for teaching and mentoring at a level unsurpassed in human history. Where the fruits of expertise, of mastery and of prowess collectively form this knowledge. And where this teaching and mentoring is an enabler to all people across the world regardless of the strata of society in which they sit. Where all of this upward flow of data, information and knowledge leads, finally, to a culmination in a golden age of wisdom. A time of good judgement and wise action.

 

But is the preceding flow true if we use a different time horizon? This piece you are reading is written for a timeframe of several decades into the future. What if you and I were to wind the clock back several decades to a time where “today was that tomorrow of several decades into the future”? Comparing this “back-in-time today” to the “current-time today”, is the latter enriched with an abundance of data? Do we, in the “current-time today” have a wealth of information about a plethora of matters compared with the times past. And thirdly, with respect to the current times, do we not have the ability, through information and communications technology, to teach and to share the fruits of expertise globally?

 

The argument can be made that we are better off today than yesterday. That we are wiser, that we have made sound judgements. While there is so much more to do, we can point to improvements in economic and physical health across the globe. We can make mention of the reduced rates of nation-state armed conflict and of improvements in education. But as we cast our eyes forward, will the teenage grandchildren of today’s teenagers be enveloped in, and benefit from, a milieu of experience, knowledge and good judgement? Consider the following two scenarios.

 

While matters of family are a common thread, that young woman in Asia, on the cusp of adulthood, may well have a personalised AI avatar to guide her through career and social choices. Offering her advice that could be heeded. And what-about that young man? A product of his Western heritage, looking to develop a career in the physical trades, finding his options don’t include the routine work he desires. Just like he was told throughout his schooling years.

 

In both cases, wisdom is offered but not infused. The prospects are that tomorrow will be just like today. Today we have that abundance of knowledge and the capacity for wise outcomes. And tomorrow? Our knowledge will have grown, we’ll have intelligence on hand and our capacity for delivering wise outcomes will be enhanced, but whether or not our results reflect these well-developed inputs is surely debatable.

 

These same arguments can be made regarding the generation of these teenager’s parents. Regardless of whether they live in Africa, the Sub-continent or in the Global North, one can imagine these parental pillars of society having responsibility in business or in policy making. Where the leaders in business are bound to a then long-established fiduciary duty to consult digital oracles. Where the policy makers can freely receive a finely curated harvest of good judgement.

 

Again it plays out in these two cases, decisions not quite fully imbued with the wisdom on offer. For across all four of these vignettes witness a surfeit of data, of information and of knowledge ripe with judicious potential. But where the consumption of this particular fruit is not universal. And the common denominator? What stands in front of this golden age of wisdom is surely our inherent human nature.

 

© Paul Tero 2019

Tags:  data  economics  wisdom 

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Can a Company with No Assets Attract Investment?

Posted By Charlotte Aguilar-Millan, Monday, June 3, 2019

Charlotte Aguilar-Millan checks the possibility of attracting investment in the Information Age through her sixth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The 21st Century has long been coined The Information Age. There has been a dramatic growth in the use of information technologies. A benefit of the new technologies is that there is a lesser need for tangible assets. Companies can now be successful with only the use of a laptop and an innovative idea. However, for most companies, whether they have assets or not, funding is required at some point within their lifecycle. How has funding changed with the rise of companies with no assets? Take Facebook, Alibaba, Uber and Airbnb as an example. They each do not hold on their balance sheets the assets from which they generate revenue.

 

A small to medium company (SME) can see many routes to growth through funding, but how many of these are open to companies that do not hold assets? The quest for funding of a company with no assets is likely to contain many refusals. The most obvious route for an SME is to take out a bank loan. This, however, requires collateral which a company with no assets does not have. A bank manager cannot reclaim the loan if the SME defaults as there are no assets to sell off. This provides a risky investment for banks. In the US, for example, only 1 in 4 small business loans applied for were accepted in 2018.

 

The two ways in which a company can raise cash is through debt or equity. Therefore, the next option is to look at listing, be this on the main stock exchanges, FTSE 100 for example, or exchanges designed for smaller companies such as AIM.

 

However, in order for a company to list on an exchange, they will likely need an appointed Nominated Advisor, financial and legal assistance. All of this requires cash which is what the company with no assets is seeking to find; not what is already has.

 

An alternative to the company with no assets attracting investment is for their owners to take out personal debt to put into the company. This could be in the form of taking out a mortgage against their personal home. Not only is this route extremely risky; if the company fails then they might end up homeless. This also is only an option when the owner has a home without an existing mortgage. Within the UK, the average age of first-time buyers were 31 years old in 2017 nearly 10 years older than a generation ago. 

 

A final way in which a company with no assets can attract investment is to speaking to that long lost rich Aunt. This itself speaks of rising inequality within the economy. The Information Age has enabled entrepreneurs to discover their vision without the high purchasing costs of tangible assets. However, finance has not kept pace.

 

Finance is restricting the mobilisation of companies with no assets. If the SME owner is not already established with a pot of savings or a house which the banks are willing to re-mortgage, growth can be limited. To the question, can a company with no assets attract investment, the answer is dependent upon the Company’s socio-economic background. This inequality is limiting innovation. 

 

© Charlotte Aguilar-Millan 2019

Tags:  economics  finance  investment 

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Will governments lead or follow finance’s future?

Posted By Alex Floate, Tuesday, May 28, 2019

Alex Floate, a member of our Emerging Fellows program examines the governments’ potency in leading finance futures through his fourth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

           

Solving big problems has never evaded the human spirit. Ferocious tigers and bears led to spears and group tactics. Episodes of famine led to granaries for storing against future hunger. Following that came the domestication of the cat to protect against rodents feasting on the stockpiled bounty. In just the last century we have overcome distance with advances in communications, heavier than air flight, and even leaving earth’s atmosphere. As problems have become bigger in scale and cost, we look to our governments to take the lead on solving them. That we can solve big problems and overcome the constraints of our environment is not in doubt; that we have the will to do so is.

 

Continued financialization may create a dystopian-tinged future of financial feudalistic lords, while nationalistic oriented systems may reverse global gains and destroy the value of national currencies. Fortunately, neither future is set in stone and the opportunity to create a different one is possible, but dependent on current governments choosing a different direction and using the tools at their disposal. The mechanisms available include monetary policy for expanding and contracting money supply, fiscal policy to set taxing and spending priorities, and regulations on financial investment and exchange.

           

How should they deploy these mechanisms, and for what end? Should the government pursue a policy of continued economic growth, or one that favors renewing the social contract to favor all citizens? Should we create rewards for sustainability and disincentivize consumption? What system best emphasizes personal initiative and innovation, while caring for the least of us? Although this is a political exercise more than a financial one, the answer will determine which mechanisms are put forward as solutions.

           

If we decide that economic growth and consumption is not as important as sustainability of resources, then systems that favor labor and saving over those that promote investment churn and profit will be needed. However, just as this will call for increased taxes on investment and capital, higher taxes on consumption, which disproportionally affect the poorest, will also be required.  Should we decide that social programs, especially in a possible future of large-scale human obsolescence, to ensure an economic floor for all citizens is vitally important, then investment and tax mechanisms will need to be balanced to provide revenue while maintaining risk incentives for growth of capital.     

           

Before we can fully and rationally answer those questions as a society, the greater challenge is confronting the myths of both capitalism and socialism. Believing that free markets and privatization are always the best method for delivery of goods and services ignores that many needs are basic for life, and costs are not always inherent in the price. Conversely, believing that governments are always honest managers that efficiently gauge the needs and wants of their citizens and deliver accordingly is also not supported by history. The answer lies somewhere in between with a need for a new folklore and heroes to provide a basis for a future that tempers the worst of these extremes while balancing the best of them. The question to be answered is whether governments will work to balance these needs and forge a new story for the future, or abjectly acquiesce to the myths of the money changers.

 

© E Alex Floate 2019

Tags:  finance  future  government 

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Will technology enable more socially beneficial patterns of consumption and production?

Posted By Esmee Wilcox, Friday, May 24, 2019

Esmee Wilcox publishes her fifth blog post in our Emerging Fellows program. She investigates the possibility of applying technology to socially beneficial production and consumption. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

I have a stack of letters beautifully written and illustrated in a box at home, that represent a different world of communicating through my teenage years. With the technologies I have to hand today, the breadth of my network is vast. I can easily access individuals to work with, to share ideas, to tackle problems together. But the polarisation of views from vast echo-chambers is undeniable. These are the issues of trust we face by connecting more virtually. By 2050 we’ll have entered another paradigm shift from now in how and who we connect with and what technologies we use for this. So what can we do now to ensure that the technologies we design help us connect and organise in socially beneficial ways? What patterns of consumption and production would start to emerge if we did this? Why is this important?

 

Communities have always self-organised around the problems they notice. Whether child-rearing, food distribution, flooding or fracking. The intractable social and environmental problems of our time are also forcing state hierarchies to look more to community networks as better routes to tackling them. Social media ‘influencers’ are ahead in capitalising on technology enabled networks to commodify their personal social capital. Their skill is in making you feel personally connected whilst accessing vast networks. State actors are starting to look to their community equivalents, individuals who use social media to connect younger, apolitical audiences. Access to community grants is no longer dependent on institutionally biased, lagging processes, but the social capital that these influencers have accrued persuading funders of the local impact.

 

By 2050 we may be much more dependent on our ability to consume and produce locally with the environmental economics of long supply chains having long been unviable. We can imagine having to produce technology that we can degrade locally without poisoning the land we rely on for food. We can imagine the expansion of communities that are designed to enable consumption and production of food to connect people in socially beneficial ways.

 

But how might our ‘socially beneficial influencers’ design and make use of new technologies that make these patterns of consumption and production all pervasive? Influencers can readily participate in thematic and place-based communities, keeping the boundaries porous to access and welcome in new ideas. It’s not exclusively the proviso of the elites to have access to a range of networks. It’s not just the cities where the scale and movement of people brings in new ideas. Our influencers might look to technologies that can track and display the impact of communities’ collective behaviour to make it easier and more rewarding to see progress towards different social norms. That also make it easy for everyone to participate, countering the social gradient.

 

The more expansive social networks of local technology-enabled influencers should make it easier to readily connect our needs to produce with our needs to consume.

Co-housing developments and intergenerational living schemes are already in existence. These provide connectivity in place of privacy that help us produce and consume efficiently. We might not want to live that closely with each other but influencers can open up our private networks and build trust by proxy to put in and take out without high transaction costs. So the network that we utilise in creating closed-loop systems is expansive. We’re re-imagining closed-loop systems with technology that enables us to splice together as specialised units of consumption and production.

 

This is, of course, dependent on access to technologies that are being created by corporations and governments. To what extent will it remain in the interests of corporations to encourage over-consumption, and trust in our fellow citizens to be eroded by trust in the ‘brand’?

 

This is where social entrepreneurs have an interesting locus. They already successfully harness the technology of our day to create policy changes as well as changes in consumer behaviour. In what ways might social entrepreneurs persuade corporations that create technologies to move production and consumption into the hands of communities? Can our ‘socially beneficial influencers’ trade their social capital with corporations? Why would corporations be interested?

 

The potential is there for technologies to enable communities to self-organise systems of consumption and production that are no longer dependent on the arbitrary assets that they find within their local boundaries. We can imagine a shift in motivation to do so as we look ahead to 2050. We can imagine social entrepreneurs having a role in helping communities align their assets. We need to think further about the relationship between those who create the technologies and the communities themselves.

 

© Esmee Wilcox 2019

Tags:  corporation  society  technology 

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Will automation do away with markets?

Posted By Tim Morgan, Tuesday, May 21, 2019

Tim Morgan devotes his fifth blog post in our Emerging Fellows program to the role of automation in new dynamic systems of social self-governance. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Markets are social systems which facilitate transactional exchanges of property, goods, services, and information. Markets reallocate resources and enable distribution. Exchanges within and between markets broadly establish the expected value of subsequent transactions. Markets can span the globe or a single neighborhood. Markets have created widespread material wealth by spurring economic growth via productivity. Markets are the social structures which define the modern industrial era.

 

Markets in toto form the social system known as the Private Sector. The Private Sector defines a sphere of control over a vast section of human affairs, one that frequently jousts with the older Public Sector of government institutions.

 

Markets benefit society by creating more prosperity for more people than is possible by the Public Sector alone.  However, the Private Sector’s flaws are now obvious. Markets have no inherent systemic mechanism for mitigating the problems they cause, such as environmental harm or social divisiveness. Markets cannot price or own non-market externalities, so they try to ignore them. Markets simply want to do Market things and consider anything else to be a distraction or interference.

 

Markets only price in externalities when they are forced to via constraints like taxation, regulation, legal liability, or mass social pressure. The strength of the Private Sector lies in its ability to create economic value for individuals via Markets. Its weakness is that it is systemically blind to non-economic value.

 

The Public Sector is failing to moderate the externalised damage created by Markets. Luckily the same information technologies which accelerate Markets are also enabling the emergence of a new sector centered around non-economic value. Digital networks and automation are allowing people to connect in new ways towards common interests. What is emerging is a new Social Commons Sector. Shared information is their resource, automation is their tool, and enhancing common social value is their primary concern.

 

This new Social Commons is forming because networks and automation can connect anyone into new dynamic systems of social self-governance. It has been increasingly disruptive to business-as-usual for years. The Arab Spring, #MeToo, and recent schoolchildren climate change walkouts are just a few examples of its ad-hoc social organizing power. Networked social power is also influencing how Private Sector market entities work. Social enterprises like Benefit corporations measure themselves by both fiscal and social bottom-lines. Publicly held corporations are increasingly being held to diversity and sustainability standards by their shareholders and customers.

 

Other groups are automating acts of public good. Custom smartphone apps schedule free pickup and delivery of excess restaurant food for the homeless, coordinate community composting, report pollution, or alert virtual guardians to watch your GPS-tracked walk home. The Social Commons is an automation-enabled sector which is filling-in the small gaps and beginning to take big swings at big problems. This nascent sector is poised to interpenetrate and rewire the other sectors to solve the wicked problems they have created.

 

Markets are not going away any more than Institutions went away when Markets bloomed into power two centuries ago. Both the Public and Private Sectors are necessary and are here to stay. But both will have to reckon with the rising influence and power of a new networked Social Commons.

 

© Tim Morgan 2019

Tags:  automation  society  technology 

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What is driving inequality?

Posted By Felistus Mbole, Friday, May 17, 2019

Felistus Mbole a member of our Emerging Fellows program investigates the causes of inequality in her fifth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Global inequality has been on the increase for decades. There are fewer people living in poverty today yet global society is probably more economically unequal than at any other time in history. This trend poses obvious threats such as lack of social cohesion and sub-optimal economic performance. What is driving this inequality? What does this mean for the future?

 

There has been a continual shift from agriculture to other sources of livelihoods, accompanied by urbanisation.   The economic opportunities created by this shift require more skilled labour than agriculture. This has made it harder for the less formally educated to engage economically. If they manage to find employment in industry, the disparity between their pay and that of the more skilled is stark. The trend is likely to worsen as urbanisation increases.  

 

The constant today is the rapidly accelerating change in technology. Currently, skill-based technology is a key driver of income and economic growth. Sadly, the poor who have less skill are not benefitting as much from this technologically driven economic growth. The inequality gap thus continues to widen. The situation is likely to be sustained into the future unless remedial action is taken.  The introduction of simpler forms of technology such as use of mobile telephony presents hope.  

 

Closely accompanying this technological change is globalisation. Technology has enabled economic integration at a speed which was unimaginable a couple of decades ago. In pursuit of greater efficiency and effectiveness, organisations can open business offices in faraway countries for both production and distribution of goods and services. Offshoring of production to low-income countries creates employment opportunities, improving incomes and decreasing income disparities across states. This could, however, generate income disparities in the target country as the more skilled get a premium on their labour. A reduction in trade barriers and emergence of regional trade agreements has also played a role in expanding globalisation. Globalisation and technology are self-enforcing. Firms and individuals who have the resources to take advantage of globalisation and technology benefit most from it. This further compounds the inequality gap.

 

Another driver of inequality is government policy. Countries that have reported decreased inequalities have implemented policies that promote redistribution of income through social protection transfers and progressive taxation.  A significant share of national revenues in such states is spent on public services such as education and healthcare, and infrastructure. Sectors which support the livelihoods of the majority such as agriculture in agrarian economies are sufficiently funded. Such policies empower most of the citizens rather than benefiting a small minority. Although an effective driver of equality, government policy is highly subject to political will. Public corruption on the other hand acts as a tax on the poor. 

 

What does this mean for inequality? Not much can be done to slow down globalisation or the rapid change of technology. These trends are not negative in themselves. They present opportunities for realising a more equitable and sustainable society. Technology such as digital infrastructure can be used to effectively deliver public goods such as health and education at scale. In addition, progressive taxation and a clamp on public corruption could create a more equal society.

 

© Felistus Mbole 2019

Tags:  inequality  rights  society 

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Is trust an endangered species?

Posted By Robin Jourdan, Tuesday, May 14, 2019

Robin Jourdan examines the contemporary status of trust in her fifth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Globally, self-serving politicians undermine trust in government. Is trust on the decline today? For a long time, trust has been imparted to CEOs, experts, academics, economists and the like. Now that’s being turned sideways, extending instead to individuals, “friends,” and peers. As children, we’re told to avoid strangers, yet today Uber, Airbnb rentals flourish.

 

By 2012, on average only four out of ten people in OECD member countries expressed confidence in their national government. Populism versus progressivism in any of their flavors is merely insufficient to the anti-politics conversations. Both rely on the fantasy of public interests’ importance. Broadly speaking, trust in government requires both: 1) social cohesion, citizens’ confidence in their communities and 2) political confidence, citizens’ rankings of government and its institutions.

 

The following is a series of mock interviews with representatives of three government systems. The question: “why should we trust you?”

 

Interview with Technocracy: why should we trust you?

Technocracy is essentially when political outsiders, technically skilled, become the leadership for society. It protects the interests of priorities in service of the many. In a true technocracy, the leadership is unelected. Still, it determines the path for the society to take, like a board of directors. Its best quality is competence to decide. Technical expertise becomes essential as our lives become increasingly joined with technology. Technology has nearly always improved the lives of humans throughout history. Why slow that progression?

 

Interview with Autocracy: why should we trust you?

What societies hunger for is security in this volatile and chaotic world. Maintaining order and stability are an efficient means to remain committed to custom and tradition. During the 20th century, autocratic leadership was often the norm in most administrations. Autocracy optimizes efficiency. Here, culture is often homogenous. Changing away from this system can be unpredictable. However, this governance model is very appealing when it builds inner confidence and serves its people. The deeper worry for trust is in countries where autocrats silence opponents, damaging cohesion. When an autocracy reinvents its future and governing persona with trust concerns safeguarded, its long-term success increases as is evidenced by Singapore today.

 

Interview with democracy: why should we trust you?

Accountability and growth are the hallmarks of this system. Here, leadership represents and works for the interests of the many. Society honors the rule of law, unambiguous and impartial. No one, including government, is above the law, where laws protect fundamental rights, and justice is accessible to all. Society can be either homogenous or heterogeneous by culture, creed, religion or other measures. Political leadership and stability are maintained mostly on an appeal to reason and experience. As of the end of 2016, a majority of nations were democracies, a post-World War II record. 

 

Besides freedom of speech, other human rights are no safer in democratic countries than they are in autocratic countries. The rights one enjoys in any country depends on several factors, but most importantly whatever rights a person has is at the mercy of the government in power at the time. There are very few if any pure democracies at this time in the world. As is often the case in our history - perfect democracy is an ideal.  In the cases where a government calls itself representative and simultaneously it does not serve its people, that condition speaks to a failure of the leadership not a breakdown of the governing methodology.

 

Finally, at the local level, trust in any government refers to its impact on people’s daily lives. Is trust an endangered species? It’s a complicated question. Confidence in governance reinforces the social contract between people and the state. As importantly, trust is like energy; it changes form rather than be destroyed. Like energy, it also means people have more influence in the trust pact than they may realize.

 

© Robin Jourdan 2019

Tags:  confidence  rights  trust 

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