Saturday, March 24, 2012

Are We The Bad Guys?

America has experienced increasing income inequality for the past few decades, and there is lively debate in the econoblogosphere about the causes. One post by Karl Smith caught my attention:
My longer thesis is that the rising return to unskilled labor is a function of industrialization and that industrialization is unique in this. The wage rate on unskilled labor never benefited before and its not immediately clear that it will ever benefit again.

This is because rents always accrue to the scarce factors of production. Industrialization meant that the only thing we were short on were “control systems” everything else in the production process was effectively cheap.

However, any mentally healthy human being is a decent control system. So, this meant huge returns to being a human.
If this theory is correct, it indicates anybody working in Artificial Intelligence and related fields is contributing to income inequality. Doh!

Karl goes on to say
You need there to be a shortage of something that human beings have a comparative advantage at simply by being human beings.
Mechanical Turk shows that people still have the ability to trade their inherent excellent perceptual capabilities. Identifying obscenity and tagging images for \$2.00 an hour may not sound like your idea of the good life, but those who subsist on landfills in Nicaragua would presumably consider it an improvement. It would be great if it were feasible to connect the world's poorest to Mechanical Turk to improve their welfare.

Any charity with such ambitions needs to hurry, however. Within a decade or two we will have cracked all the problems that are commonly encountered on Mechanical Turk today, closing this window of development opportunity.

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