

White Collars Turn Blue (1996) - juliusdavies
http://mit.edu/krugman/www/BACKWRD2.html

======
mnemonicsloth
This really gives you an idea of how long 100 years has gotten.

Krugman was asked to predict the state of the world in 2096, and and most of
his vision is happening right now.

And then there are things he didn't mention, but which have (or will shortly)
become technically feasible. I think any of these are potentially more world-
shifting than, say, the decline of the American suburb:

\- Real-time neuron-level simulation of human brains (~10 years to go)

\- Design of artificial proteins

\- Machine vision good enough to drive cars/trucks

Personally, 2096 looks further away the closer we get to it.

~~~
StrawberryFrog
A lot of what you mention was raised in a recent discussion between Paul
Krugman and cutting-edge Sci-fi author Charlie Stross.

Here's a copy of the transcript, which is also well worth a read
<http://sites.google.com/site/strosskrugmantranscript/>

_Sample Charlie Stross: It’s going to be one of these things where there is
going to be a sudden step change. ... When the automatic self-driving vehicles
get sufficiently good that they are less likely to be in a collision than a
human driver, your premium will go up if you insist on driving manually. Yeah,
that’s going to go up steeply a few years later. I think we may be seeing the
end of human beings allowed to drive the public highways within 30 years_

~~~
Retric
Insurgence companies are profitable with the current level of risk, so some of
them would be happy and profitable to keep selling inshurance at the current
rate. The only driver for machine drivers is going to be cheaper premiums and
boredom. Once machines drivers become really popular we might end up with
specific high speed lanes which only they can enter etc. But, it's going to
take at least 20 years to really go from mostly human to hardly any human
drivers.

~~~
barrkel
Insurance is profitable because the risk is spread across a wide base,
including risk-averse people. If the default is high-safety automatic
vehicles, only the reckless and adrenaline-junkies are likely to drive,
forcing up rates disproportionately.

~~~
nradov
There isn't a whole lot of risk spreading in car insurance. They adjust rates
heavily based on age and driving record. Most of the reckless adrenaline
junkies are young, and have a history of collisions and moving violations, so
it's fairly easy to identify them.

~~~
barrkel
Without actually being an actuary, and having access to the raw data, it's
rather hard to tell IMHO whether the rate adjustments are really sufficient to
cover the risk. Since risky customers are "pay big now, maybe payout big
later" - and young customers get older and more experienced - it seems to me
that there may be a human tendency to slightly underprice the risk of
customers who pay large premia.

The analogous situation with health insurance, of course, is even more deeply
skewed. Insurance companies love having healthy young people on their plans
because they almost never have to pay out - young healthy people overpay by
quite a bit on health insurance.

------
biohacker42
Astonishing?

 _Soaring resource prices_ \- he makes no mention of the currency explosion
that led to inflated prices. Or that right now oil demand is back to 2005
levels. But in the long term his is obviously right because finite resources
are finite. How's that an amazing prediction?

 _The environment as property._ Is he talking about plain old private
property? Or pollution regulations, or cap and trade? Those things were all on
the table in 1996. And today Obama is still having a lot of trouble with even
symbolic cap and trade.

 _The rebirth of the big city_ \- Urbanization is not a new trend, and despite
what happened to Detroit, it was never in recess, certainly not outside of
America.

 _The devaluation of higher education_ \- This simply has not come true at
all. I hope the ivy league bubble bursts at someone point, but I think we're
still decades away from that.

 _The celebrity economy._ \- Andy Warhol said it better.

~~~
run4yourlives
_The devaluation of higher education_

This is going to happen sooner rather than later. University education at this
point is simply a trend - something that everyone does. You can see this not
in the sciences as much as in the standard arts programs that 70% of the
graduate population possess. The cost of these programs keep climbing, and the
average wage does not.

Eventually, the tipping point will be reached and there will be more people in
the middle class that cannot afford university without the promise of the high
paying job that it gives - which it doesn't if a degree is commonplace.

Even better, European countries often fund their universities to almost 100%.
When tax revenue drops off, these funds will eventually be cut. You can see
this happening in Canada today.

Not many people are going to pay $70K for a four year program to become a
career receptionist. Even less when it's perfectly clear that a high school
educated trades apprentice can make a lot more.

~~~
biohacker42
_University education at this point is simply a trend - something that
everyone does._

I think this makes it _less_ likely to burst. Sure a prestigious university
might lose its prestige if it lets in too many commoners. But a persistent
trend is more likely to make a required universal ritual.

 _The cost of these programs keep climbing, and the average wage does not._

The cost keeps climbing because people are willing to pay it. When the costs
stop climbing that's not the same as a collapse or even a change in the
general trend of needing to have a college degree.

 _Even better, European countries often fund their universities to almost
100%. When tax revenue drops off, these funds will eventually be cut. You can
see this happening in Canada today._

Tax revenues drop in every recession, government programs are cut, rarely
eliminated and I doubt universities will be the first to go anyway.

Look at California, it's probably going to cut the funding to it's public
university system, but it won't eliminate it, far from it.

The bottom line is college is already in many ways more like a land cruise
then a serious and challenging endeavor. And the non-academic activities which
happen in college often have a greater impact on your lifetime earnings then
the classes you take. Plus society loves universal rituals and traditions.

While ever rising tuition rates have to stop at some point, college education
is not going away any time soon.

------
sipior
One potential problem with the scenario outlined here by Krugman is the
assumption that an economy organised principally around information will
precipitate the devaluing of that knowledge. What's true for oil and steel is
not necessarily true for information (a generic categorisation if there ever
was one), and Krugman draws this analogy far too glibly. If anything,
possessing information makes it easier to acquire more and more valuable
information; the technological exponentiation we are living through today
makes that point clearly. If information does not obey the basic rule of
scarcity that physical goods do, it seems unreasonable to assume automatically
that the effect of "information abundance" on the economy will be analogous to
a glut of oil or grain.

A lot is also made of the outsourcing of "knowledge workers"; hardly a new
phenomenon, even in 1996. And it will almost certainly still exist in 2096.
But the inequities in living standards and expectations that makes outsourcing
practical currently is steadily being eradicated by the gradual improvement in
economic conditions which outsourcing itself helps to make possible. In some
sense, the condition is probably self-throttling. The presumptive end of all
this is a high-entropy state, where there is no strong "potential difference"
between economies to make outsourcing worthwhile: it would eventually become
pointless for everyone. I don't imagine we'll reach that point by 2096, though
:-)

~~~
jimbokun
"But the inequities in living standards and expectations that makes
outsourcing practical currently is steadily being eradicated by the gradual
improvement in economic conditions which outsourcing itself helps to make
possible."

In effect, it is an arbitrage opportunity where you have a large number of
well educated people with a low standard of living, combined with cost of
living differences compared to western countries.

Certainly, over the next 100 years such arbitrage opportunities should abate,
as people around the world with valued skills have similar standards and costs
of living, and thus demand similar wages. We seem to be seeing the beginnings
of that process already.

------
sachinag
I love that Esther Dyson beat Chris Anderson to "free" by a good 13 years.

------
brandnewlow
The implications for journalists from this piece are fun. According to this,
the jobs will be shifting more and more back to old-school, face-to-face shoe
leather reporting.

Suburban-based newspapers will shrink but stick around and remain profitable
once they hit the right size due to having a monopoly. In cities, however,
there will be a dozen outlets each going after different tribes of
metropolitans with some overlap, similar to how a place like Chicago once had
dozens of papers each serving different immigrant communities.

------
jcdreads
Interesting that he completely failed to predict the possibility of political
punditry as an economist's day job. (Or, in the closing sentence, did he...?)

~~~
sethg
I think you have it backwards. Being a tenured economics professor is
Krugman's day job. Nobody _makes a living_ writing New York Times op-ed
pieces, even though Krugman may be more famous now for his op-eds than for his
academic work.

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jimbokun
I'm glad I did not see the author's name until I got to the bottom. It totally
would have changed how I considered the content.

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StrawberryFrog
Seems to be by Paul Krugman. He's always worth reading.

------
erlanger
There's nothing particularly astonishing about predicting that history will
repeat itself...

------
TweedHeads
"Free copies of content are going to be what you use to establish your fame.
Then you go out and milk it"

Piracy is your friend.

------
nico
Spot on! Seems like things are happening a little faster though.

