Me Thinking About Others Thinking About Krugman

I know, in this day and age, writing a post about two posts about a column written a week ago is probably a little silly and self-indulgent. But I had a very similar reaction to the two writers who I am about to quote: I read Paul Krugman's piece on higher education, "Degrees and Dollars", and found myself nodding (a rare sensation for me when reading Krugman) right up until the last paragraph. After noting that society and families invest massive sums in higher education with an increasingly small likelihood of a strong return, he concludes:

So if we want a society of broadly shared prosperity, education isn’t the answer — we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.

WHAT? So society continues to count on old models and fading industries as the path to wealth instead of innovating, and the solution is to dig in our heels, unionize, and demand money and healthcare whether we can afford it or not? Take it away, Walter Russell Mead:

This is blindness so brilliant it would dazzle a bat. If, as Krugman posits, demand for US workers will be falling in both manufacturing and the professions, how exactly will labor unions get higher wages for their members? Factories will be closing in Krugman’s world and law firms will be turning more and more work over to computers or shipping it overseas. Perhaps stronger unions could make it harder for companies to do this for a while, but ultimately facts speak. Stronger unions making tougher wage demands will not exactly persuade American (and foreign) investors to create new jobs in this country — or to slow down their efforts to reduce their US workforce by outsourcing and automation.

The scary part of our present is that what the future economy will look like is increasingly unclear. I am reasonably confident that ad agencies like the one I work at will be around 5-10 more years, but I'm not convinced that the model is sustainable with a fragmented audience that is increasingly savvy at dodging 'promotion'. I don't like the prospect that my career might go through the ringer a decade from now, but it could well happen, and all I can do is be prepared to adapt, and try to cultivate skills (like critical thinking and writing, I hope) that are transferable to new lines of work. And what might we all be doing? I will refer to Reihan Salam for a possible answer:

The most successful and productive digital organizations will never employ large numbers of people, but they will throw off large amounts of money that will be spent on personal services, etc. That’s why we shouldn’t squelch innovation in this space through overregulation and overtaxation, and it’s why we should work on improving the quality of public services and other amenities that will help us attract and retain the footloose workers who create the most wealth.

So maybe we have a future where a smaller number of people are in the 'making stuff' (whether content or physical things) business, and more of us are in the 'making life better' business of providing services. It wouldn't be the first time we made that kind of a shift: more productive agriculture moved many off the land and into cities doing more service-oriented work, and so did mass production that allows a few people to make a lot of identical objects (ask the Luddites.)

We can't stop tomorrow from coming, and if tomorrow casts off a lot of the jobs that lead to middle-class respectability in the 20th century, we are going to have to adapt. That process may be painful, but bankrupting society by denying that reality for as long as possible will just make it worse. Krugman is right that we need to build the society we want, but hopefully we can want something better than borrowing more and more money to prop up a social and economic order whose time has past.