The Lever of Technology
Will technology increase the gap between rich and poor? It will
certainly increase the gap between the productive and the
unproductive. That's the whole point of technology. With a tractor an
energetic farmer could plow six times as much land in a day as he
could with a team of horses. But only if he mastered a new kind of
farming.
I've seen the lever of technology grow visibly in my own time. In
high school I made money by mowing lawns and scooping ice cream at
Baskin-Robbins. This was the only kind of work available at the time.
Now high school kids could write software or design web sites. But
only some of them will; the rest will still be scooping ice cream.
I remember very vividly when in 1985 improved technology made it
possible for me to buy a computer of my own. Within months I was
using it to make money as a freelance programmer. A few years before,
I couldn't have done this. A few years before, there was no such thing
as a freelance programmer. But Apple painters created wealth, in the
form of powerful, inexpensive computers, and programmers
immediately set to work using it to create more.
As this example suggests, the rate at which technology increases
our productive capacity is probably polynomial, rather than linear. So
we should expect to see ever-increasing variation in individual
productivity as time goes on. Will that increase the gap between rich
and the poor? Depends which gap you mean.
Technology should increase the gap in income, but it seems to
decrease other gaps. A hundred years ago, the rich led a different kind
of life from ordinary people. They lived in houses full of servants, wore
elaborately uncomfortable clothes, and travelled about in carriages
drawn by teams of horses which themselves required their own
houses and servants. Now, thanks to technology, the rich live more
like the average person.
Cars are a good example of why. It's possible to buy expensive,
handmade cars that cost hundreds of thousands of dollars. But there
is not much point. Companies make more money by building a large
number of ordinary cars than a small number of expensive ones. So a
company making a mass-produced car can afford to spend a lot more
on its design. If you buy a custom-made car, something will always be
breaking. The only point of buying one now is to advertise that you
can.
Or consider watches. Fifty years ago, by spending a lot of money on
a watch you could get better performance. When watches had
mechanical movements, expensive watches kept better time. Not any
more. Since the invention of the quartz movement, an ordinary Timex
is more accurate than a Patek Philippe costing hundreds of thousands
of dollars.13 Indeed, as with expensive cars, if you're determined to
spend a lot of money on a watch, you have to put up with some
inconvenience to do it: as well as keeping worse time, mechanical
watches have to be wound.
The only thing technology can't cheapen is brand. Which is
precisely why we hear ever more about it. Brand is the residue left as
the substantive differences between rich and poor evaporate. But what
label you have on your stuff is a much smaller matter than having it
versus not having it. In 1900, if you kept a carriage, no one asked
what year or brand it was. If you had one, you were rich. And if you
weren't rich, you took the omnibus or walked. Now even the poorest
Americans drive cars, and it is only because we're so well trained by
advertising that we can even recognize the especially expensive ones.14
The same pattern has played out in industry after industry. If there
is enough demand for something, technology will make it cheap
enough to sell in large volumes,15 and the mass-produced versions
will be, if not better, at least more convenient. And there is nothing
the rich like more than convenience. The rich people I know drive the
same cars, wear the same clothes, have the same kind of furniture,
and eat the same foods as my other friends. Their houses are in
different neighborhoods, or if in the same neighborhood are different
sizes, but within them life is similar. The houses are made using the
same construction techniques and contain much the same objects. It's
inconvenient to do something expensive and custom.
The rich spend their time more like everyone else too. Bertie
Wooster seems long gone. Now, most people who are rich enough not
to work do anyway. It's not just social pressure that makes them;
idleness is lonely and demoralizing.
Nor do we have the social distinctions there were a hundred years
ago. The novels and etiquette manuals of that period read now like
descriptions of some strange tribal society. "With respect to the
continuance of friendships. . . " hints Mrs. Beeton's Book of
Household Management (1880), "it may be found necessary, in some
cases, for a mistress to relinquish, on assuming the responsibility of a
household, many of those commenced in the earlier part of her life." A
woman who married a rich man was expected to drop friends who
didn't. You'd seem a barbarian if you behaved that way today. You'd
also have a very boring life. People still tend to segregate themselves
somewhat, but much more on the basis of education than wealth.16
Materially and socially, technology seems to be decreasing the gap
between the rich and the poor, not increasing it. If Lenin walked
around the offices of a company like Yahoo or Intel or Cisco, he'd
think communism had won. Everyone would be wearing the same
clothes, have the same kind of office (or rather, cubicle) with the same
furnishings, and address one another by their first names instead of
by honorifics. Everything would seem exactly as he'd predicted, until
he looked at their bank accounts. Oops.
Is it a problem if technology increases that gap? It doesn't seem to
be so far. As it increases the gap in income, it seems to decrease most
other gaps.