By Servaas Storm – The U.S. economy is suffering from two interrelated diseases: the secular stagnation of its potential growth, and the polarization of jobs and incomes. The two disorders have a common root in the demand shortfall, originating from the ‘unbalanced’ growth between technologically ‘dynamic’ and ‘stagnant’ sectors, which—crucially—is bringing down potential growth.
The key mechanism is just this: rising real wages, as during the period 1948-1972, provide an incentive for firms to invest in labor-saving machinery and productivity growth will surge as a result; but when labor is cheap, as during most of the period 1972-2015, businesses have little incentive to invest in the modernization of their capital stock and productivity growth falters as a consequence.
Financial globalization, in addition, enabled the rich to have their cake (profits) and eat it (by channeling them to offshore tax havens or into derivative financial instruments). In this way, trade and financial globalization have been essential building blocks of the dual economy. more> https://goo.gl/5EFndw
Posted in Banking, Book review, Business, Economy, History, Leadership, Media, Net
Tagged Financial crisis, Gig Economy, Globalization, Productivity, Stagnation
In Our Own Image: Savior or Destroyer? The History and Future of Artificial Intelligence, Author: George Zarkadakis.
By George Zarkadakis – Mainstream economics is built on the premise that the economy is a machine-like system operating at equilibrium. According to this idea, individual actors – such as companies, government departments and consumers – behave in a rational way.
Ever since the invention of the assembly line, corporations have been like medieval cities: building walls around themselves and then trading with other ‘cities’ and consumers.
The so-called ‘gig economy’ is only the beginning of a profound economic, social and political transformation. For the moment, these new ways of working are still controlled by old-style businesses models – platforms that essentially sell ‘trust’ via reviews and verification, or by plugging into existing financial and legal systems.
Blockchain technologies promise to replace these trusted third parties with a huge digital record book, spreading out organically across a network of computers that grows and changes but can’t be meddled with.
By getting rid of middlemen, they’re likely to radically reduce transaction costs, and accelerate the mixing of many different actors in the new economy who have been freed from the grip of leaders or institutions. more> https://goo.gl/Gs6f4B
Posted in Banking, Book review, Broadband, Business, Economic development, Economy, Education, History, Leadership, Media, Net, Product, Regulations, Technology
Tagged Automation, Blockchain, Economics, Gig Economy, Inequality
By Vanessa Bates Ramirez – “Our assumptions about how economies function no longer seem to hold true entirely because of exponential technology.”
This claim came from entrepreneur and Singularity University faculty member, Amin Toufani.
In what he calls exponential economics or “exonomics,” Toufani breaks the tech-driven changes happening in the modern economy into seven pillars: people, property, production, price, power, policy, and prosperity.
Toufani pointed out that exonomics’ ultimate goal is to connect people and prosperity.
“Technology is empowering all of us, and people seem to be doing what companies used to do and companies seem to be doing what governments used to do,” Toufani said.
The democratizing effect of information technology is enabling small teams to have an outsized impact. He showed a graph of collaboration app Slack’s user growth, and it’s practically a vertical line. A few years old, Slack reaches millions of users, many of whom pay for the service, and was recently valued upwards of $9 billion.
The kicker? Slack was created by a team of 12 software developers. And it’s far from the only such example. more> https://goo.gl/wpBRPz
Posted in Banking, Business, Economic development, Economy, Education, Energy, Net, Technology
Tagged Exonomics, Gig Economy, Inequality, Price, Production, Productivity, Prosperity