What is the self-driving craze in mobility really about? Improving road safety (something not yet proven or quantified) or creating a framework where control can finally and fully be ceded from users and transferred for all perpetuity to an increasingly concentrated and faceless capital and intellectual property-owning elite?
Despite ample reports suggesting the opposite, there is no hard proof self driving cars will necessarily be any cheaper, safer or economical than human-driven cars, let alone capable of displacing public transport systems on a mass level.
The first batch of reviews for Robert Gordon’s new book The rise and fall of American Growth: the US standard of living since the civil war, are feeding through the blogosphere. Here, for example is Diane Coyle’s take. She’s mostly appreciative of the work but not entirely convinced Gordon’s central thesis that innovation today is slower and less important than it was in the 20th century has been entirely proven. She is more sympathetic, however, about the issue of headwinds slowing down whatever innovation-driven growth there might otherwise be. We haven’t read the book ourselves yet, but reading Coyle’s review it’s clear Gordon uses the book to expand in more detail on some of the ideas presented in his October 2015 paper Secular Stagnation on the Supply Side: U.S. Productivity Growth in the Long Run. That paper, itself, expands on his core thesis that the days of miracle growth are long gone and that slower growth lies ahead.
To conclude FT Alphaville’s contribution to the self-driving car debate, here’s a bullet-point summary of why we don’t think it would ever be economically efficient or publicly useful for a private enterprise to fund the roll-out of a driverless taxi fleet.
We argued earlier that the economics of self-driving taxis don’t necessarily make sense. Which is to say, we’re not entirely convinced (at this stage) that self-driving taxis will be any more or less affordable than those driven by humans. At least if deployed by a private enterprise. But there’s a bigger point to be made about the economics of the self-driving car market. It’s about society’s general treatment of so-called idle assets. But also, how the rhetoric from Silicon Valley regarding the need to diminish the number of idle assets in society and up capacity utilisation everywhere contradicts the standing mantra that distributed, decentralised systems are stronger and more resilient. Or for that matter that gold or bitcoin are a better form of money than evil centralised rehypothecated fiat. So here’s a post about why private cars have a lot in common with gold, and more specifically how Uber is to cars what fractional-reserve bankers were to gold.
Financial blogger Frances Coppola runs through how and why the “sharing economy” is grossly mis-representing itself to consumers by daring to suggest it’s anything but a traditional for-profit — or more pertinently rentier — enterprise. From Coppola: Indeed the whole idea of the “sharing economy” seems to be based not on the idea of working together to produce something for mutual benefit (the cooperative principle) but on millions of people scraping a living by selling services and renting assets to each other. How does this add value to the economy over the longer term? There is no production. It is entirely consumption. Recycling is all very well – and we do need secondary markets – but we cannot build an economy solely on sweating existing assets. An economy that exists solely on consumption has no long-term future.
Welcome to Bank Underground, the official (and slightly subversive sounding?) Bank of England staff blog. It’s gone live this Friday, with not one but two inaugural posts touching on topics as far ranging as the impact of driverless cars on the insurance industry to the somewhat wonkish debate over how the ELB (effective lower bound) might one day constrain monetary policy and inflation. While the BoE isn’t the first central bank to publish staff analysis in blog form– the New York Fed’s staff have been blogging on Liberty Street Economics since 2012 — it is the first that intends to use the medium as a mechanism for self-scrutiny and internal challenge. As Andy Haldane, the Bank’s chief economist and executive director of monetary analysis and statistics told FT Alphaville this fits with the Bank’s push to make itself more open and transparent.
David Autor chooses a surprising quote for the start of his latest paper on automation and jobs: In 1966, the philosopher Michael Polanyi observed, “We can know more than we can tell… The skill of a driver cannot be replaced by a thorough schooling in the theory of the motorcar; the knowledge I have of my own body differs altogether from the knowledge of its physiology.” Polanyi’s observation largely predates the computer era, but the paradox he identified—that our tacit knowledge of how the world works often exceeds our explicit understanding—foretells much of the history of computerization over the past five decades.