The Occupiers Of Tomorrow's Economy

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When we refer to Don Quixote, the image that comes to mind is that of a weird, self-proclaimed knight eager to do battle with windmills. Such representation encapsulates the essential trait that Cervantes intended to give to his creature, namely: someone mesmerized by an outdated chivalrous culture and in conflict with a finishing Medieval Age that - as explained by historian Jean Gimpel in his book The Medieval Machine - had undergone major technological transformations. At the end of the novel, Don Quixote returns home worn out, while the windmills, the symbol of those transformations, continue to proliferate.

A not too different combat was fought in the 19th century against the Industrial Revolution and its social consequences. This time, the battle was epitomized, not by a fictional character, but by a political philosopher.

That thinker was Karl Marx, who asserted that capitalism had exhausted its potential to bring about economic and technological progress and was condemned to succumb in a cataclysmic crisis in a not too distant future.

Marx's stance against capitalism proved no more successful than Don Quixote's struggle against windmills. Economic crises, numerous and profound as they have been, have not thrown capitalism anywhere near the dustbin of history. What is more, the path trodden from Henry Ford's automated mass production up to Silicon Valley invalidates Marx's assertion that capitalism had, already at his time, exhausted its creative potential.

New, market-led technological transformations are currently in the offing. They revolve around three major axes.

The diversification of energy sources, notably with the emergence of shale gas and oil. Gone are the days when the Club of Rome and catastrophist pundits used to forecast that fuel reserves were about to be depleted. Contrary to these nightmarish expectations, oil and gas reserves keep expanding at a sustained pace.

The development of computational manufacturing (3D printing). Traditional manufacturing chains will to a large extent give way to robotic technology, in particular three dimensional (3D) printing. The impact will be overwhelming. Economies of scale will lose much of their relevance, and so will the comparative advantages of low-wage countries. Some production lines may then return to high-wage industrial centers, a development which would show - if that was still necessary - that the market can be more effective in recuperating jobs than any dirigiste anti-delocalization policy will ever have been.

The upcoming explosion of online education (massive open online courses, or MOOCs). Universities can hardly leave unnoticed the emergence of online courses offered by top academic centers and accessible to students from all over the world.

Not all the existing universities will withstand the shock. Academic concentration (reminiscent of the industrial concentration) will inevitably take place, which explains why Sebastian Thrun, founder of online university Udacity, predicts that in fifty years, there will remain only 10 universities in the world.[1]

All this sounds terrific. But does it mean that the new technological shake-ups will arouse plaudits - and plaudits only? Don't bet on it. These developments will spawn a crop of discontents. We can already anticipate where they may come from.

Environmental catastrophists will oppose the exploitation of shale gas and oil. As a matter of fact, they have already managed to block, not only the exploitation, but also the mere exploration of that resource in France. Never mind that cheap gas has enabled the U.S. to reduce carbon emissions by 450m tons in the past five years, whereas the European Union, with all its pro-environment rhetoric, has seen such emissions increase during that same period[2].

Vested interests are likely to offer a staunch resistance to the digitization (3D printing) revolution. For sure, industrial digitization will vastly create new types of jobs. The problem is that new competences will be required, and as a result, traditional jobs are likely to disappear in significant numbers. And it so happens that vested interests tend to be more reactive to layoffs in their workplaces than to the creation of posts in promising sectors.

The less dynamic universities are bound to suffer from, and therefore oppose, the increase in academic competition arising from MOOCs. If account is taken of the fact that renowned universities (Harvard and Princeton) are intent on entering the domain of online education, one can easily understand that, for bureaucratized, cushy faculties, the danger of disappearing is real.

Greens, Anti-globalizers and Occupiers of all sorts will thus have plenty of material to protest, and streets and campuses to take to. They undoubtedly will lack both the panache of Cervantes' offshoot and the coherence of Marx's dogma. But like these illustrious predecessors, they will be fighting losing battles, while technological breakthroughs continue to transform for the better - as did windmills and the Industrial Revolution - the way we live.

Fabio Rafael Fiallo is a Dominican-born economist, author, and retired official of the United Nations Conference on Trade and Development (UNCTAD).

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