Thank You for Being Late (part 3)

November 26, 2018

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A “moral fork in the road”

Another thing I liked about Friedman’s book was his willingness to talk about morality. Many liberals seem to shy away from the subject, perhaps because they don’t want to be confused with moral traditionalists. Personally, I think that liberals are in a good position to seize the moral high ground on many issues. After all, they are committed to such worthy values as social justice, equal opportunity, freedom of expression, scientific inquiry, nonviolent conflict resolution, and oh yes, democracy.

Friedman says that in the age of accelerations he describes, “leadership is going to require the ability to come to grips with values and ethics.” In particular, new technologies have empowered people to contribute more than ever to the solution of social problems, but also to disrupt social order on a more destructive scale. “As a species, we have never stood at this moral fork in the road–where one of us could kill all of us and all of us could fix everything if we really decided to do so.”

Friedman describes cyberspace as a lawless, amoral sphere badly in need of normative guidance. We are turning over too many decisions to impersonal algorithms that lack any moral compass. We thought that we could just connect everybody through social media and good things would happen. Now we realize that communities of users need some way of establishing moral norms, so that technically-empowered bad actors don’t destroy cyberspace for everyone.

Character and community

Friedman agrees with David Brooks that “most of the time character is not an individual accomplishment. It emerges through joined hearts and souls, and in groups.”

But what groups? The federal government is too big, too bureaucratic, and too slow to respond to emerging needs. On the other hand, families are too small and fragile to provide their members with the necessary supports. (He doesn’t elaborate on the second point, which would get into the debate over whether it “takes a village” or just a family to develop a good citizen.) Friedman looks to the local level beyond the family, asserting that “the healthy city, town or community is going to be the most important governing building block in the twenty-first century.” He quotes Gidi Grinstein as saying that such a model community would be “focused on supporting the employability, productivity, inclusion, and quality of life of its members.”

Here Friedman draws on his own experience of St. Louis Park, the suburb of Minneapolis where he grew up. There in the 1950s, American Jews escaped their urban ghetto and coexisted primarily with “a bunch of progressive Scandinavians.” Social harmony was helped along by what the White House Council of Advisers called the “Age of Shared Growth” (1948-1973) characterized by high productivity, economic expansion and broad distribution of the benefits. The result was an “imbedded habit of inclusion,” a tradition carried on today in efforts to assimilate today’s minorities. Friedman says that the jury is still out on whether the community can truly overcome today’s social divisions, but at least it is trying.

I think his point is well taken that pluralism and inclusion are keys to moral as well as economic progress.

How optimistic?

The subtitle of the book is “An Optimist’s Guide to Thriving in the Age of Accelerations.” To a degree, I share the author’s optimism. New technologies eliminate some jobs, but they can also increase productivity, lower costs for consumers, and create new jobs in expanding industries for those who acquire the appropriate skills. Globalization can expand the pool of human knowledge and generate more solutions to human problems. Even climate change has an upside, in that it should lead us to develop clean energy industries on a grand scale.

At times, however, I thought that Friedman underestimated the obstacles to be overcome, especially because of today’s economic inequality. I agree that technological change and rising productivity could be helpful in raising wages, as they were in the “Age of Shared Growth.” But even then, workers didn’t get their share of the benefits without a power struggle between business and labor, one in which government also weighed in. I agree that globalization expands the pool of human knowledge, but it can also result in a race to the bottom, where countries compete by cutting wages and skimping on environmental protection.

Friedman’s book helps convince me that massive investments in human capital are needed to qualify people for the jobs and lifestyles of the future. But his eighteen specific recommendations seem to fall a bit short, especially in the area of education. He wants to make postsecondary education tax deductible, but the people who find college least affordable are in such low tax brackets that the deduction has little value for them. He wants to eliminate corporate taxes, which would produce a windfall primarily for the richest tenth of the population who own over 80% of the stock.

The general premise of the book remains sound, however. It is that we shouldn’t panic or withdraw from the emerging world, but embrace the future with serious reflection and a positive attitude.

The Rise of the Creative Class (part 2)

November 28, 2012

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Richard Florida’s theory of the creative class is also a theory of urban development. He insists that “place matters”; it has, in fact, “replaced the industrial corporation as the key economic and social organizing unit of our time.” This view is in sharp contrast to the familiar argument that place matters less because of electronic communications, that “you can innovate without having to emigrate,” as Thomas Friedman has put it. Florida argues that globalization has two sides: on the one hand, the “geographic dispersion of routine economic functions such as straightforward manufacturing or service work,” and on the other hand, the “tendency for higher-level economic activities such as innovation, design, finance, and media to cluster in a relatively small number of locations.” So globalization produces both customer service centers in India and centers of hi-tech innovation in Silicon Valley and Research Triangle.

Florida sees a new “geography of class” in which a metropolitan area’s economic success depends on the class of workers it attracts. A large Creative Class is associated with economic development, a large Working Class with economic stagnation, and a large Service Class with low-wage job creation. He has developed a Creativity Index based on the “3Ts” of technology, talent and tolerance. Indicators of technology include hi-tech industry concentration, patents per capita, and average annual patent growth; talent is the proportion of workers in the Creative Class; and tolerance is measured by the share of foreign-born residents, a Gay and Lesbian Index, and an Integration Index (how well racial and ethnic groups are mixed within census tracts). The top ten metropolitan areas on the Creativity Index in 2010 were Boulder CO, San Francisco-Oakland-Fremont CA, Boston-Cambridge-Quincy MA/NH, Seattle-Tacoma-Bellevue WA, San Diago-Carlsbad-San Marcos CA, Ann Arbor MI, Corvallis OR, Durham NC, Washington-Arlington-Alexandria DC/VA/MD/WV, and Trenton-Ewing NJ.

This Creativity Index is strongly correlated with economic growth. Some critics have suggested that using a predictor like average educational level is a simpler way of accounting for an area’s success. But Florida claims that the Creativity Index has explanatory power beyond education, and that the tolerance measures in particular are good predictors of economic vitality. That’s because anyone–gay or straight, native or foreign-born, black or white–can have a good idea, and places that welcome diversity have a creative edge.

The relationship between economy and creativity is a two-way street. The economies of certain places attract the Creative Class by creating more jobs for them. But increasingly, the creative lifestyles of certain places attract creative people, whose talent generates economic innovation and growth. In other words, people don’t just live where their job is; they seek out an area that offers an attractive lifestyle and look for work there. Gallup’s “Soul of the Community Study” found that the main qualities that attach people to a place are not basic services or jobs, but “social offerings, such as entertainment venues and places to meet, openness (how welcoming a place is) and the area’s aesthetics (its physical beauty and green spaces).” Cities that can provide those things will be the ones that thrive.

How does a city enhance its appeal to the Creative Class, build a more creative community, and participate in future economic growth? Florida, who defines himself as politically independent, fiscally conservative and socially liberal, doesn’t recommend either a laissez-faire market approach to development or a top-down centrally planned approach. He wants to see walkable, pedestrian-scale communities encouraging spontaneous interaction, not more skyscrapers and stadiums. He sees a role for government, but one that is more facilitative than controlling:

How do you build a creative community? Certainly not all at once and from the top down—most of what defines and shapes creative communities emerges gradually over time. But that does not mean that strategy and public policy do not matter….Smart strategies that recognize and enhance bottom-up, community-based efforts that are already working can help accelerate the development of creative communities.

Florida has also developed a global version of the Creativity Index in order to make international comparisons. Sweden ranks first on this measure, followed by the United States, Finland, Denmark and Australia. In general, countries that score high on the Creativity Index are also high in national income, proportion of workers in the Creative Class, and social equality. The United States is somewhat exceptional, however, in having an unusually high level of social inequality and a rank of only 27th in Creative Class share. This strongly suggests that this country maintains more of a class barrier to entry into the Creative Class, a barrier that Florida regards as a “great stumbling block” to future prosperity.

The rise of the Creative Class is associated with a new geographic sorting process that in the US at least has aggravated rather than alleviated old social divisions. It is no longer just a matter of successful white people in the suburbs and less-successful minorities in the inner city. In five of our largest metropolitan areas (New York, Washington, Boston, Chicago, and San Francisco), over two-thirds of urban core residents have college degrees. What is happening is that members of the Creative Class are clustering in certain cities, while members of other social classes can no longer afford to live there. Meanwhile, suburban poverty is growing rapidly. This is changing our politics as well as our geography. Increasingly, the declining working class is more conservative, while the growing Creative Class is more liberal. (One wonders what Marx would make of that!)

From Florida’s perspective, the key to a country’s global competitiveness is the development of the creative potential of all its citizens. In the United States, this requires a new social compact:

This Creative Compact would be dedicated to the creatification of everyone. It would expand participation in the Creative Economy to industrial and service workers, leverage new private and public investment in human infrastructure, innovation, education, and our cities, while reaffirming and maintaining America’s long-held commitment to diversity. It would restructure education, moving away from rote learning and overly bureaucratic schools and creativity-squelching standards. It would set in place a new social safety net that invests in people and provides mobile benefits that follow workers from job to job. It would recast urban policy as a cornerstone of economic policy and ensure that America remains a beacon for the best, brightest, most energetic and ambitious people in the world.

Florida doesn’t get into very specific policies here, but he does suggest six principles to guide us:

    • Invest in developing the full human potential and creative capabilities of every single human being [for example, upgrade the quality and skills of service jobs]
    • Make openness and diversity and inclusion a central part of the economic agenda
    • Build an education system that spurs, not squelches, creativity
    • Build a social safety net for the creative economy [for example, make health and retirement benefits more portable rather than tied to a particular employer]
    • Strengthen cities; promote density, clustering, and concentration [as opposed to suburban sprawl]
    • From dumb growth to true prosperity

If these principles seem too much at odds with present conditions to be realistic, it’s worth remembering that many European countries have gone farther in some of these directions than we have.

A high-road path to prosperity–an innovative and competitive economic system that causes far less severe socioeconomic divides than we are experiencing today in the United States–is not only possible, it is already in place in some of the world’s most advanced and competitive nations.