Will Hutton in today's Observer has spotted a pertinent analysis revealed in Tyler Cowen's new 'book'; that our post-war wealth is the result of industrialising the production of inventions made between 1910 and 1940. Economies and efficiencies are made continually by lowering factor costs and by micro-technological changes in manufacturing technique. Whilst research and scholarship has expanded our understanding of the tiniest and most complex details, we're in a spiral of diminishing returns. Big Pharma research produces lower and lower returns, the web hasn't created replacement jobs (he cites Google, Apple, Microsoft, eBay and Amazon as between them having created fewer than 100,000 direct jobs in the US). However, Hutton's own commentary on what this all means is flawed - he still favours the State over the markets, wilfully ignoring the essential reality that this period of human stagnation comes at the end of a phenomenal post war period of growth for Statism.
Alvin Toffler (remember him?) covers the same analytical ground in Revolutionary Wealth; the reason Google, Amazon, Apple et al employ so few direct staff is that they've outsourced all the time and labour intensive transactional and commissioning tasks to us, the consumers. I'd add IKEA and MFI as obvious local supplements to the list. As knowledge has grown exponentially, so the technologies have made it more widely and instantly available than ever before - 'trade secrets' are a thing of the past. Toffler terms this 'prosuming', a combination of producing and consuming.
At this point I need to guard against a certain smugness, for I'm a consummate prosumer. I have tools and knowledge and physical ability. I can restore battered sad old furniture to add 1,000% to its value at a cost of less than 100% of its purchase price as long as I don't cost my labour. If I want to use an absolutely specific type of bath salt I can make it. I can transform the cheapest and least popular cuts of meat into exquisite meals. I can cook, sew, decorate, grow, join, plumb, tile, brew, bake, wire, craft and create, make all my own picture frames, fix engines and computers and anything I can't make or adapt I can procure on the best possible terms because I can use the internet effectively. It may not be worth my while - yet - to make my own pins, but the benefits of the Division of Labour established by Adam Smith at the start of the industrial nation is now everywhere in reverse. And Toffler is right in one thing; no government, no State, can capture by economic statistics the 'value added' by prosuming. It's a choice, of course; a trade-off between time spent and value gained. And its impact is grossly underestimated.
Between Hutton and Toffler neither have quite got it, but I can't offer a pathway to the future either. It's not just a renaissance in 'invention' as Hutton would have it, though this may be part of it, nor Tofflers 'new wealth system' that will advantage the US, though this is also part of it. Just as when we could individually no longer afford domestic servants to clean and cook for us and had to learn to do so ourselves, so now collectively with policing, social care and a whole panoply of public services. This on the face of it is the Big Society. But beyond this we're into developing a whole new social system, one in which we will radically re-value time. How we value time, our own and that of others, will be the key.