Wealth of Humans — The Introduction

I’ve begun reading The Wealth of Humans by Ryan Avent. The book was recommended to me by a family member who’s brilliant. Not reading the book would be an especially dumb move on my part.

It’s taken me a while to absorb the life lesson of listening to people wiser than I am (as those who know me know well). I’m happy to report that reading this book is a step in the right direction! Ignorant, inconsiderate, and illiterate is no way to go through life, as Dean Wormer might have noted.

I’ve made it through the Introduction so far. That might not sound so impressive on the surface, but I can already feel my critical thinking neurons tingling.

The central thesis of this book is stated on page 5: “…three trends—automation, globalization and the rising productivity of a highly skilled few—are combining to generate an abundance of labour: a wealth of humans.”

The thesis reveals the twist of the title: “wealth” in the sense of surplus, not riches. This abundance creates a problem for the economy: how to provide jobs and a sustaining lifestyle for the masses that might be displaced by the technological revolution.

The book’s thesis and related discussion are important and timely. However, while reading the Introduction, I couldn’t help but notice that the author presents a fair number of points that are hard for me to swallow.

Please indulge me as I list a litany of Festivus-style grievances:

1. Page 10: The author wonders why a fourfold increase in living standards hasn’t resulted in less work (stylized as a “fifteen-hour work week”):
   • It seems to me that the term “work week” is very strict, applying only to “wage-earning” time. However, “work” should include time that would have been previously spent commuting, navigating with paper maps, doing laundry by hand, washing dishes manually, mowing the yard with a push mower, etc. Fewer demands on a person’s time, or any nature, equates to less work.
   • The increase in the standard of living has been achieved with a static standard workweek of 40 hours. A 4x increase in standards compounded by a 63% reduction in work hours (40 to 15) would in reality be an exponentially higher increase.
   • I would think benefits can’t be manifested both ways. Enjoy the fruits of increased production with the same hours worked or enjoy the same production with decreased hours worked. I’m not sure many people would trade iPhones and HD TV for a 15-hour work week and increased free time without the fun toys or disposable income.
2. Page 11: “Communism proved a poor way to organize an economy.”
   • Add to that widespread misery and 100 million murders and you should get an understatement of the century award.
3. Page 11: While discussing U.S. deregulation efforts that began in the 1970s, the author asserts “the tax burden on the rich fell”:
   • This is true in marginal tax rate terms, but not in percentage of taxes paid or tax receipt terms.
   • What is the point of taxation? Is it to secure revenue for government programs or is it to punish people?
4. Page 12: “What does the state owe a middle class whose incomes have not grown for much of the last 2 decades?”
   • How about getting out of the way?
   • It’s amazing how wage stagnation correlates with the growth of the entitlement state.
5. Page 13: “But radicalism will become an increasingly real and powerful force in global politics until governments begin answering the difficult questions posed by the digital revolution.”
   • Why is this the government’s job? What about their past performance suggests expertise in answering complex questions?
   • Why is the government presented as neutral and without an agenda?
   • Both the political Left and the Right have expressed dismay with the performance of government (see the campaigns of Donald Trump and Bernie Sanders). So it seems to me the last answer would be to give more power and authority to government, the entity everyone is dissatisfied with.
   • If the government could somehow manage its current level of responsibility effectively, maybe we can see about adding to its powers.
6. Page 18-19: The author posits that “all wealth is social.” He also expresses the idea that wealth primarily descends from society and culture (at varying levels, from countries down to companies), not individual effort:
   • While I agree that no individual can take credit for all of a particular culture, they can take credit for the parts they contribute. If someone invents a catch phrase, do they have to defer credit to the people who invented English hundreds of years ago?
   • What is society but a collection of individuals?
   • A firm’s culture doesn’t create itself. People create it. How do you think Apple’s culture was created? Steve Jobs created it, an individual. To advance an idea that Apple didn’t need Steve Jobs, or Microsoft didn’t need Bill Gates, because someone else would have filled in for them is silly.
   • Most successful companies were started small by a group of a few individuals and grow large over time, adopting the values of the few individuals who founded the company.
7. Page 20: The author states the following while discussing the wealth of companies: “Culture generates the wealth”:
   • This is just not true. Apple’s culture doesn’t generate wealth, its products and services do. The culture made it possible for people to create those items.
   • Culture doesn’t make anything, but it can facilitate people to use their natural talents to produce value for the company, consumers, and society.
   • I’ll restate, what is a company but a collection of individuals? Companies don’t exist in thin air. Even within a company individuals are compensated at different rates according to their worth to the firm and their level of production.
8. Page 21: The author wonders how society should share social wealth:
   • How are people—society—not already not benefiting from these technologies? People are already enjoying the fruits of this wealth.
   • For instance, Bill Gates is the richest man in the world. But he’s worth a fraction of the value his innovation has provided to billions of people around the world with Windows and Microsoft Office products.
   • Yet it seems this is not enough for some. Gates’s personal wealth must also be “shared,” not just his creations.

It’s clear I have some disagreements with the author. However, one metric on the writing quality is to what degree it engages the reader. On the score, so far, The Wealth of Humans is high quality. We’ll see how future chapters stack up!