Flourishing in a sea of information

November 5, 2009

Life is getting much better in an important respect. That’s the message of Tyler Cowen’s Create Your Own Economy. The gain is in personal enjoyment, and the driver is new information and communication technology.

At the center of this is the internet, which gives us access to much more information, and more quickly and cheaply. What about information overload? Doesn’t the resulting sense of bewilderment and paralysis offset, and for some even outweigh, the benefit?

Cowen says no, because we have new ways to control the flow of information. Internet search engines let us target the particular information we want. RSS feeds allow us to focus on the websites that most interest us.

The same holds for music, books, movies, television shows, sporting events, and other types of entertainment. From iTunes you can purchase individual songs rather than entire albums. With an iPod you can then listen to those songs in a sequence of your choosing at whatever time and place you like. Kindle-type devices allow virtually instant purchasing of books and the ease of reading them whenever and wherever you please. DVRs, online rental services, and on-demand television make it possible to borrow or record movies and TV shows and watch them when it’s convenient.

Technological advances also enhance our control over communication. A telephone conversation occurs at the convenience of the caller, whereas email and texting allow you to receive inputs when it suits you. They also permit you to reflect a bit before you respond. With Facebook, chat rooms, blogs, and Twitter you can move in and out of ongoing conversations at will.

Imposing order on information is psychologically satisfying. The increase in our ability to control the amount, the content, and the timing of information and entertainment we consume may be just as valuable, in terms of our well-being, as the increase in the amount of information to which we have access.

The benefit varies across individuals. Enhanced ability to organize information is particularly valuable to people with a cognitive style that prizes order. For some of us more than for others, exerting control over the flow of information is pleasing. Greater access to information and culture is especially valuable to those with narrow and atypical interests. If you want to know a little about current political debates and what celebrities are up to, you may be able to get your fill by reading a daily newspaper or Time magazine or by watching a half-hour network news program. But if your interests are less mainstream — say, soccer in Argentina or west African music or Asian architecture — the internet makes a huge difference.

Autistics tend to be on the extreme end of both of these continuums; they often find the organization of information highly satisfying, and they tend to have narrow and unusual interests. Advances in information and communication technology are therefore likely to enhance the enjoyment of autistics to an even greater degree than of others. This, according to Cowen, suggests heightened potential for autistics, and people with similar if less extreme cognitive traits, to have a rich life experience.

Create Your Own Economy is well worth reading. Cowen’s case for optimism about the contribution of new technologies to individual well-being is stimulating and fairly compelling. The writing is engaging, and the book is more coherent than a few of the reviews I’ve seen led me to expect (and which I half-expected anyway based on the style of Cowen’s blog).

I wish Cowen had pushed further on two issues.

First, his assessment of the prospects for autistics focuses on consumption. But there’s also the matter of how to make a living.

Cowen rightly notes that autistics tend to have cognitive strengths in matters that interest them: keen perception of details and patterns, an ability to focus clearly, and a capacity to effectively store and organize information. For autistic individuals this cognitive profile may serve as a comparative advantage in a world in which production and analysis of information dominates the production of things. Cowen spends some time discussing the successes and contributions of famous innovators and thinkers and writers who may have been autistic, from Thomas Jefferson to Immanuel Kant to Arthur Conan Doyle.

But what about the earning prospects of less extraordinary autistics? Autistics tend to have a range of impediments to effective social functioning: they may read social queues poorly, lack interest in non-instrumental conversation, get easily distracted, react to imperfection or irregularity with extreme frustration, have strong sensory aversions, engage in odd repetitive motions, and some don’t develop the ability to speak. Cowen is certainly aware of the barriers these impose, and at one points he says “if you take [autistic] abilities and disabilities and stick them into a rapidly evolving market economy, you will get some people who achieve relatively high social status and other people — many others — who end up with much lower status” (p. 21). But he says little more about this.

In the book’s final chapter Cowen writes:

You may know that the division of labor is a key idea in Adam Smith’s Wealth of Nations. Smith’s notion of the division of labor referred to increasing specialization in economic production. He gives the example, from a pin factory, of how each worker performs a very specific and repetitive task in the interests of greater productivity for the factory as a whole.

It’s not what Smith intended, but I read this discussion of the pin factory as a parable of autism and the rising returns to autistic cognitive strengths. If you can perform a repetitive task with the proper skills, you can earn a decent income because you are no longer expected to be a jack-of-all-trades or to master a wide variety of skills. It increases the chance that you can have a “dysfunction” and still do well in life and in your career…. Today it’s often enough to be very good at one specific professional task. In other words, the division of labor provides disproportionate benefits to people with specialized cognitive talents and that includes many people along the autism spectrum. (pp. 215-16)

I think there may be something to this, but it strikes me as a pretty thin reed on which to hang an optimistic conclusion. I want to hear more.

Throughout the book Cowen argues for greater appreciation of neurodiversity. Partly this involves recognition that autistic traits are part of a continuum; they differ in degree rather than in kind. It also means we should pay better attention to the cognitive strengths of autistics.

That would be a good thing, but surely more is needed. Early diagnosis and intervention are now widely agreed to be critical. So too are teachers and aides in K-12 schools who foster social development in autistic children without stifling their interests and skills. Less discussed but potentially very helpful is an ongoing shift toward individualization in the administration of government benefit and service provision. Citizens and policy makers in the United States and many western European nations have increasingly wished to encourage employment by able working-age adults. A key lesson from their efforts to do so is that incentives are useful but often insufficient. If you want people to work, it helps to facilitate that with individualized assistance and monitoring. Individualization gives caseworkers better information about what types of help — at-home support, financial assistance, training, job placement, transportation, and so on — are likely to be of greatest benefit. To maximize opportunities for autistics, and to ensure the best possible utilization of their skills and strengths, we need not only the wider appreciation of neurodiversity that Cowen commendably encourages but also a helping hand from the state.

Second, I wish Cowen had addressed the worry that creating your own prosperity will come at the expense of the greater good. Specifically, the internet and other individualized forms of information sharing and communication might hasten the erosion of social capital. Researchers have found links between social capital and economic and political health (though these associations and their magnitudes are by no means a settled issue). If we spend more and more of our time glued to our RSS feeds, iPods, Kindles, and on-demand movies, will we engage less in human interaction, communication, and participation in social groups and activities? Are we heading toward a future of browsing, listening, reading, and viewing alone, bereft of face-to-face connections and civic engagement?

Maybe. But the new technologies might help to offset any such loss. For one thing, they enable us to identify and interact with a better-targeted set of compatriots. We now have fewer widely shared if shallow experiences, such as attending PTA or Elks Club meetings. They may be replaced by more fulfilling ones shared with smaller groups: interacting in a Facebook friend network or an online chat group, emailing or instant messaging with people who you’ll never meet in person but who share your particular passion.

By allowing us to locate other people with similar interests, new information and communication devices also help us to feel connected in a way that, for some, may not have been possible before. Attending church or a committee meeting can be highly interactive for some people. But others may experience them as boring or even alienating. For the latter, reading Facebook or blog or Twitter posts may create a greater sense of connection, of belonging, of membership, of community.

The internet and new communication technologies also make it easier for some people to actively contribute. A person who sits silently in the back of a PTA meeting might experience more engagement and efficacy by writing a blog post, commenting on someone else’s post, editing a Wikipedia entry, reviewing a book, posting photos, or participating in a chat room dialogue.

Perhaps, then, we’re moving toward not less social capital but simply a different form — more fulfilling to some of us and no less useful for sustaining a healthy society.


Links: October 2009

November 1, 2009

Where did the Bush tax cuts go?

October 29, 2009

Nice graph in today’s NYT.


Exchange on inequality

October 14, 2009

This week and next I’m taking part in an exchange on inequality at Cato Unbound. John Nye, Elizabeth Anderson, and I will be responding to Will Wilkinson’s essay “Economic inequality and the mirage of injustice,” followed by some back-and-forth. My initial comment is titled “Is consumption the grail for inequality skeptics?


Understanding France

October 5, 2009

It’s been a while since I’ve posted anything here. I’ve been busy working on a book, among other things. I’ll try to get back to it soon.

In the meantime, Saturday’s Financial Times had two nice pieces on France:

The myth of Eurabia, by Simon Kuper

Vive la différence, by Donald Morrison


Links: September 2009

September 30, 2009

Links: August 2009

August 31, 2009

Links: July 2009

July 31, 2009

Links: June 2009

June 30, 2009

Did Blair and Brown fail on inequality?

June 1, 2009

In a Financial Times op-ed, Matthew Engel says

This month, it was revealed that the UK’s Gini coefficient, measuring inequality between rich and poor, had reached its highest level on record — after the longest period of Labour government ever. You do not have to be a Labour voter to wonder what, then, has been the point of it all.

I wouldn’t want to offer a full-scale defense of the Labour governments’ strategy (see ch. 11 of this book for my views), but there is a reasonable response to this particular challenge. Inequality of market incomes has been increasing almost everywhere. Arguably, it has risen less, and government has done more to mitigate its impact, under Labour than would have been the case under the Conservatives. It’s impossible to know that for certain, of course, but the following data on inflation-adjusted income growth during the most recent periods of Conservative and Labour rule are consistent with this assertion.


Links: May 2009

May 31, 2009

Economic crisis primer

May 27, 2009

Larry Mishel at the Economic Policy Institute has a helpful primer on the economic downturn and what lies ahead. Well worth a look.


How does the U.S. labor market compare now?

May 26, 2009

In a new CEPR report, John Schmitt, Hye Jin Rho, and Shawn Fremstad note that while the U.S. unemployment rate had been lower than those of many rich European countries in the 1980s and 1990s, it now has caught up to and surpassed most of them. In March of this year our unemployment rate was tied for fourth-highest among the major OECD nations. This, they say, “has turned the case for the U.S. model almost entirely on its head.” (Floyd Norris in the New York Times and John Quiggin at Crooked Timber have also picked up this story.)

I’m sympathetic to the conclusion, but I’d prefer it to be based on a different measure of labor market performance.

The unemployment rate is calculated as the number of people looking for work but without a job (unemployed) divided by the number of people either employed or unemployed. Its weakness is that it takes no account of people who aren’t seeking work because they doubt they could find a satisfactory job or have given up trying. The U.S. Bureau of Labor Statistics has broader unemployment measures that try to incorporate this, but there aren’t cross-nationally comparable data for those measures.

If our interest is in an economy’s success in creating jobs, a better indicator for cross-country comparison is the employment rate: the share of working-age people (age 15 to 64 is the standard) that are employed. The following chart shows employment rates for the two most recent business-cycle peak years: 2000 and 2007. The U.S. is one of just a few nations in which the employment rate declined during this period, though it’s in the middle of the pack rather than at the bottom.

What’s happened since then? Employment rates aren’t updated as regularly as unemployment rates, so recent trends are more difficult to judge. The data below are the best I can do at the moment. They show percentage change in the number (not share) of people employed from the fourth quarter of 2007 to the fourth quarter of 2008, and for a few countries to the first quarter of 2009. Our economy has lost more jobs — 4.5%, or about 6.5 million jobs — than most others.

The American labor market hasn’t been the worst at creating and maintaining jobs in the 2000s (though bear in mind that we’re talking here solely about the number of jobs, not their quality). Yet as Schmitt, Rho, and Fremstad rightly suggest, things have changed sharply relative to the 1980s and 1990s when our performance was near the top of the comparative heap.


Allocating talent productively

May 25, 2009

A retiring hedge fund manager, interviewed by the New York Times‘ Joe Nocera, reflects that his business

was part of this huge trend toward the celebration of wealth. Hedge fund managers overearned. It just became too easy. There has been a massive misallocation of human resources. I have so many smart guys here who were making seven figures. And I think it is a fair question to ask: what would they have been doing in 1948 — going into the foreign service? If Obama does anything, the best thing he could do is change a generation’s values.

The point is right on. A significant portion (though not all) of the activity that’s yielded huge incomes in finance over the past several decades has been, in effect, little more than high-stakes gambling — betting on which way asset valuations will move, devising new instruments and techniques for doing so and for collecting fees on the transactions, and convincing investors to pony up more and more money to fund such bets. Even setting aside the danger this can pose to the real economy, it would be good if less of our collective intelligence and effort were dedicated to these sorts of pursuits.

Yet while changing values is a worthwhile aim, I doubt it’ll do the trick. What’s needed is to shift the incentives, via regulation and/or taxes.


Do schools make inequality worse?

May 21, 2009

“Far from leaning against economic inequality, U.S. schools make it worse.” This sentiment, from a recent Clive Crook op-ed, expresses a view that’s commonplace on both the left and the right, and among both proponents and opponents of school reform.

It’s wrong. Americans do leave the schooling system more unequal in cognitive and noncognitive skills than when they enter it. Yet that inequality is less — probably much less — than it would be in the absence of schools. Schools don’t increase inequality; they just don’t do enough to overcome the inequality produced throughout childhood by differences in families, neighborhoods, peers, and other influences.

How do we know that? First, children are vastly unequal in ability when they enter the school system at age five or six. This is due partly to genetics and partly to environmental differences.

Second, we have evidence from the natural experiment that is summer vacation. During those three months out of school, the cognitive skills of children in lower socioeconomic status (SES) households tend to stall or actually regress. Kids in high-SES households fare much better during the summer, as they’re more likely to spend it engaged in stimulating activities. In his book Intelligence and How to Get It, cognitive psychologist Richard Nisbett concludes that “much, if not most, of the gap in academic achievement between lower- and higher-SES children, in fact, is due to the greater summer slump for lower-SES children” (p. 40).

Without schools this pattern would be magnified, and the gap in cognitive and noncognitive abilities at age 18 almost certainly would be much greater than it now is.

This by no means implies our educational system is doing fine. It could and should do much better at helping children from disadvantaged environments. But saying it currently makes things worse suggests the situation is hopeless. Instead of promoting reform, that undercuts it.