“Average is Over” by Tyler Cowen

average-is-over

“I would bring a hammer.”

—Chess grandmaster Jan Hein Donner, when asked what strategy he would use against a computer

Average is Over is about where trends education and employment are headed. In brief, the book’s thesis is that people who are good at using computers will thrive while those who don’t will fall behind in just about every way imaginable.

Tyler Cowen is an academic economist at George Mason University with an active web presence. His thinking is nuanced and his politics are tough to pin down. I find his writing to be as lively and accessible as it is intellectually stimulating.

The book discusses many trends going on in the world today. Among them is that women on average tend to be better suited for the workplace in 2014, because conscientiousness is more valuable than ever and they’re more so on average than men. Good managers are in demand like never before because of the coordination required to bring together the virtually miraculous pattern of economic cooperation that everything modern comes from. Video games, rather than being a waste of time, reflect modern trends in cognition, entertainment, education, and rapid information processing. In daily life, certain tasks will be more frustrating as services become more automated (think self-check out lanes at the grocery store and talking on the phone to an automated voice recording) but those savings will ultimately lower the cost of living. There’s more, but I won’t spoil it for you.

Further Links:
Tyler Cowen’s blog: Marginal Revolution
Interview with Tyler Cowen
What the professionals had to say: Economist book review
An interesting extrapolation on the effects of inequality in everything, inspired by the book
TechCrunch YouTube interview: “It’s really going to be about motivation and grabbing people’s attention. That’s one thing that software don’t do very well is understand the human element. So if you look at Mark Zuckerberg and Facebook, of course he is a tech genius, but the real key part is how he understood psychology and how he grabbed people’s attention. Time doesn’t pile up as much as wealth does, there are only 24 hours in each day. So it’s the people who have that skill—grabbing your attention—who will be the economic winners of the future.
Buy on Amazon: Average Is Over: Powering America Beyond the Age of the Great Stagnation

Highlighted Passages

“To put the question in the bluntest possible way, let’s say that machine intelligence helps us make a lot more things more cheaply, as indeed it is doing. Where will most of the benefits go? In accord with economic reasoning, they will go to that which is scarce.

In today’s global economy here is what is scarce:

1. Quality land and natural resources
2. Intellectual property, or good ideas about what should be produced
3. Quality labor with unique skills

Here is what is not scarce these days:

1. Unskilled labor, as more countries join the global economy
2. Money in the bank or held in government securities, which you can think of as simple capital, not attached to any special ownership rights (we know there is a lot of it because it has been earning zero or negative real rates of return).”

“This imbalance of technological growth will have some surprising implications. For instance, workers more and more will come to be classified into two categories. The key questions will be: Are you good at working with intelligent machines or not? Are your skills a compliment to the skills of a computer, or is the computer doing better without you? Worst of all, are you competing against the computer? Are computers helping people in China and India to compete against you?”
“The ability to mix technical knowledge with solving real-world problems is the key, not sheer number-crunching or programming for its own sake.”

“As a general rule, the age structure of achievement is being ratcheted upward due to specialization and the growth of knowledge. Mathematicians used to prove theorems at age twenty, but now it happens at age thirty because there is so much more to learn along the way. If you are a talented twenty-two year old, just out of Harvard, you probably cannot walk into a furniture factory and quickly design a better machine. Young people have made fundamental contributions in some of the internet and social networking sectors, precisely because of the immaturity of those sectors. Mark Zuckerberg needed a good grasp of MySpace, but he didn’t have to master decades of previous efforts on online social networks. He was close to starting from scratch. In those cases, young people tend to dominate the sector, but if course that won’t cover the furniture factory.”

“A lot of people are ‘anti-foreigner’ and this makes them skeptical about both offshoring and immigration, because both phenomena have something to do with foreigners. People get into a broadly ‘anti-foreigner mood’ and then they apply those feelings somewhat indiscriminately. The more subtle reality is that immigration gives us some protection against offshoring and probably help keep jobs in the United States. It also helps protect the long-term position of the United States as the world’s most dominant nation, whether economically or politically or culturally.”
“Sometimes a student may care about doing well with grades but not about mastering the actual material and moving on to the next step. Chess teacher Peter Snow reports that some of his young students love playing against the computer, but they deliberately put the quality settings on the program so low that they can beat it many times in a row. At this point they should raise the skill level of the program to make the challenge tougher, but they don’t always want to do so. Similarly, studies of spelling bees show that the winning spellers are those who not only work hard, but who engage in disciplined forms of study that do not always yield immediate positive feedback.”

“He describes being good at ‘dull, repetitive tasks’ and ‘really wanting to win’ as making him well suited for his Freestyle avocation. Those are qualities that will serve well the workers of the future.”

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