Home » Opinion » Foreign Views
Unfair division between alpha programmers, drones
By Raghuram Rajan |
March 1, 2013, Friday
|
Print Edition
Print Edition
MARC Andreessen made his first fortune writing the code that became Netscape Navigator, the Internet browser. He is now a venture capitalist who evangelizes about the growing importance of software in business today.
Indeed, he proclaims that software is taking over the world - that it will be the primary source of added value - and offers the following prediction: the global economy will one day be divided between people who tell computers what to do and people who are told by computers what to do.
Andreessen's aim is to shock his listeners - not just for effect, but to get them to do something about it.
To stop the world from being divided between a few alpha programmers and many drones, he wants the potential drones to stop taking easy liberal arts courses in college. Instead, he wants them to focus on courses in science, technology, engineering, and math, where the good jobs will be. But will this solve the problem that he poses?
Perhaps not. Two attributes of software creation allow a few talented programmers to corner the market and take all the associated profits. First, software with a slight edge tends to get a significantly greater share of the available market; and, second, the available market is global, because it costs so little to make an extra copy and send it anywhere in the world.
Winners take all
In this winner-take-all environment, only a small number of those who have taken programming courses will reap a majority of the rents. Completing the right preparatory courses is no guarantee of receiving a share of the software jackpot.
Differences in luck and talent among those equally prepared will ensure that the quality of software firms' products lies on a bell curve, with only a few Googles and Facebooks and many more bored, moderately paid computer technicians helping the average confused person deal with malware.
Put differently, in a winner-take-all world, raising the average level of skills or education does nothing to alter the skewed distribution of income. So, will anything prevent inequality from widening?
The obvious answer is yes. But how society responds will mean the difference between a prosperous world and a world torn apart by slow growth and resentment.
Will the resentful workers who must follow a computer's instructions - say, in assembling an order in Amazon's fulfillment centers - vote to tax the programmers who put them there until the software creators lose the incentive to innovate, leaving society poorer?
Or will the rich programmers all migrate to Monaco or Switzerland, taking the brains and rents with them, as society falls apart into barricaded and mutually resentful enclaves and ghettoes?
In reality, many intermediate possibilities exist. One is that cultural norms may develop that encourage billionaires to share their wealth, even if they are spared taxation. For example, the Giving Pledge is a commitment by some of the world's richest people, Warren Buffett and Bill Gates among them, to devote the majority of their wealth to philanthropy.
And values also adjust. While a quartz watch keeps time more accurately than the most finely crafted handmade mechanical Swiss watch, the value of a quartz watch has plummeted, while Swiss watches' value has climbed into the stratosphere. So it may well be that the demand for discussing, say, medieval French church music in small classes at a university will grow. Not everyone should heed Andreessen's exhortation to quit liberal arts programs!
That is not to say that his basic concerns are unwarranted. Better access for all to fundamental needs like quality education is necessary to make the winner-take-all character of markets more tolerable. But societies may also have to change. If we are lucky, the changes will take place spontaneously.
Raghuram Rajan is professor of finance at the University of Chicago Booth School of Business and the chief economic adviser in India's finance ministry. Copyright: Project Syndicate, 2013.www.project-syndicate.org. Shanghai Daily condensed the article.
Indeed, he proclaims that software is taking over the world - that it will be the primary source of added value - and offers the following prediction: the global economy will one day be divided between people who tell computers what to do and people who are told by computers what to do.
Andreessen's aim is to shock his listeners - not just for effect, but to get them to do something about it.
To stop the world from being divided between a few alpha programmers and many drones, he wants the potential drones to stop taking easy liberal arts courses in college. Instead, he wants them to focus on courses in science, technology, engineering, and math, where the good jobs will be. But will this solve the problem that he poses?
Perhaps not. Two attributes of software creation allow a few talented programmers to corner the market and take all the associated profits. First, software with a slight edge tends to get a significantly greater share of the available market; and, second, the available market is global, because it costs so little to make an extra copy and send it anywhere in the world.
Winners take all
In this winner-take-all environment, only a small number of those who have taken programming courses will reap a majority of the rents. Completing the right preparatory courses is no guarantee of receiving a share of the software jackpot.
Differences in luck and talent among those equally prepared will ensure that the quality of software firms' products lies on a bell curve, with only a few Googles and Facebooks and many more bored, moderately paid computer technicians helping the average confused person deal with malware.
Put differently, in a winner-take-all world, raising the average level of skills or education does nothing to alter the skewed distribution of income. So, will anything prevent inequality from widening?
The obvious answer is yes. But how society responds will mean the difference between a prosperous world and a world torn apart by slow growth and resentment.
Will the resentful workers who must follow a computer's instructions - say, in assembling an order in Amazon's fulfillment centers - vote to tax the programmers who put them there until the software creators lose the incentive to innovate, leaving society poorer?
Or will the rich programmers all migrate to Monaco or Switzerland, taking the brains and rents with them, as society falls apart into barricaded and mutually resentful enclaves and ghettoes?
In reality, many intermediate possibilities exist. One is that cultural norms may develop that encourage billionaires to share their wealth, even if they are spared taxation. For example, the Giving Pledge is a commitment by some of the world's richest people, Warren Buffett and Bill Gates among them, to devote the majority of their wealth to philanthropy.
And values also adjust. While a quartz watch keeps time more accurately than the most finely crafted handmade mechanical Swiss watch, the value of a quartz watch has plummeted, while Swiss watches' value has climbed into the stratosphere. So it may well be that the demand for discussing, say, medieval French church music in small classes at a university will grow. Not everyone should heed Andreessen's exhortation to quit liberal arts programs!
That is not to say that his basic concerns are unwarranted. Better access for all to fundamental needs like quality education is necessary to make the winner-take-all character of markets more tolerable. But societies may also have to change. If we are lucky, the changes will take place spontaneously.
Raghuram Rajan is professor of finance at the University of Chicago Booth School of Business and the chief economic adviser in India's finance ministry. Copyright: Project Syndicate, 2013.www.project-syndicate.org. Shanghai Daily condensed the article.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
