… and better jobs for everybody just around the corner. Yeah, right.

“Despite the relentless advances of digital technologies… The world seems to be stuck in a period of slow growth and no one is quite sure what’s causing this apparent contradiction."

The quote above is the incipit of an article at Wall Street Journal that speculates about the “Productivity Paradox”, and a recent paper, titled Digital Abundance and Scarce Genius, that may explain slow growth better than existing alternatives.

The argument introduced in the new paper is that “slow economic growth and stagnating wages are inexorably linked to the rise of our global superstar economy”:

[D]igital labor and capital are becoming more abundant because they can be reproduced much more cheaply than their traditional, physical forms. Why then is productivity growth so lukewarm? What is constraining growth?

To address this paradox… In addition to capital and labor, [a novel production] model adds a third factor, a bottleneck which prevents economies from taking advantage of the abundance of digital capital and labor. They dub this third factor genius (G).

The G factor is primarily associated with exceptional talent which,unlike labor and capital, isn’t subject to digitization. Its relative scarcity thus becomes a production bottleneck. “Many have the sense that intangible assets and superstar workers are more abundant than ever. Perhaps the most surprising thing then about our result is that these factors are increasingly scarce."

Gee, who would have thought?

Surprising? “Apparent” contradiction?

Genius is scarce by definition. The great majority of people who are not geniuses (=99%, again by definition) and will be left jobless by automation are NOT going to find one of those “better job that cannot be digitized”, even if (IF!!!!) there were enough of those jobs, simply because they are NOT qualified for them. Period.

The fact that such a factor is considered “surprising” is really hilarious. But that model (which, in my humble opinion, is right) has a great merit, besides explaining things better than others: it gives one more kick in the groin to the illusion that this wave of (digital) automation will create more jobs than it destroys.

Industry 4.0? Yeah, right. This model makes even more difficult to give any variation of condescending lectures like this with a straight face:

“Robots took your job at the assembly line, or in the bank? Good, so now you and all your other 1000 ex-coworkers are all free to apply for that one PhD position at CalTech that cannot be automatized, and for which you are surely qualified”. Puah. I really cannot stand this anymore. can you?

Image Source: Reddit thread about “Joe Hockey telling aspiring first home buyers: ‘Get a job that pays good money’"