Lesson time 7:29 min
Learn the impact of technological expansion on the job market, the economy as a whole, and on the individual citizen.
Around 2012 or so, it somehow rather became orthodoxy among a lot of important people. You had op-eds by Jamie Dimon or whatever, saying, structural modern technology, we have a workforce that's not suited for it, and there's no way we're going to get unemployment back down to the levels we used to have. And aside from the fact that I could give you very good economic analysis about why that was wrong, you could also say, gosh, there were a lot of people making exactly the same argument in the 1930s. Then, along came a big fiscal stimulus, otherwise known as World War II. And all of a sudden, not only did we need all of the workers that we had, but we needed Rosie the Riveter too, right? [MUSIC PLAYING] - At any given time there is a something that people think is what is the real economy and that the other stuff is fluff. And that view is usually pretty far behind the times. Takes a long time for people to catch up with reality. So if you go back, actually, before Adam Smith, there were the physiocrats in France. And what physiocrats believed was that agriculture was the real thing. These days, there are almost no farmers. And the reason is not because we don't grow lots of stuff, but because we're so productive at farming that we can feed the population with just a handful of people actually working the land. Somewhere I saw the claim that in America right now there are significantly more people playing World of Warcraft than there are farmers. Right? Farming is still important, obviously. We need to eat, but it takes very few people because we've become so productive. What came after farming was manufacturing. And manufacturing became more and more what the economy was about. So even in 1860 the majority of Americans were still on the farm, but by 1960 we were a manufacturing nation, where a third of the workforce was in manufacturing. And that was where wealth was generated, General Motors was the biggest company in the world, all of that. Mostly, we have less manufacturing for the same reason we have fewer farmers. We've gotten so good at it. We're still consuming lots of manufactured goods. And despite all of this globalization, most of them are made here. But it doesn't take very many people to make them because manufacturing has had a lot of technological progress. And so we've shifted our labor force into the parts of the economy where we haven't made that much progress, we haven't managed yet to replace nurses with robots, so we have lots and lots of nurses, but we have managed to replace assembly line workers with robots so we don't have very many assembly line workers. And, also, to a certain extent, as we get richer, what people want is services rather than stuff. We want health care, we want entertainment. Until recently, we had a lot of growth in retail. You need the people to sell us stuff. Now, that actually is in decline because of online shopping. But this is economic evolution. Like anyt...
For Nobel Prize-winner Paul Krugman, economics is not a set of answers—it’s a way of understanding the world. In his economics MasterClass, Paul teaches you the principles that shape political and social issues, including access to health care, the tax debate, globalization, and political polarization. Heighten your ability to read between the lines and decipher the underlying economics at play.
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Information was conveyed in a way that I understood and remembered, the animated stories helped a lot. Great overview for a complete noob.
The class gives a jargon free helicopter view of economics (and PPE), neatly mixing stories of economic history with fact, and dismissing fallacies. It's maybe a bit long, but very interesting. Thank you.
Really interesting and useful lesson by the life.
If I can achieve one thing that I've learned in this master class, I hope I can live up to the last 3 minutes of Paul's commentary!