Can a society work for us all?

As life becomes more and more complex, how can we make sure technology, employment, our pension systems and the environment work for everyone? We asked some of the world’s greatest economic experts to share their opinion with us.

Will we still have jobs when robots take over?

For centuries, technology has significantly improved our way of life. So why are we now suspicious of new technology and afraid of what the future holds?

One of the obvious reasons is the fear of mass unemployment. Various studies say that up to 50% of all people might lose their jobs due to technology, robots and artificial intelligence. Are we creating a self-destructive force?

Nobel Laureate Robert M. Solow believes that even though 80% of the US economy’s growth is driven by technological progress, people will still play a vital role if they have the right skills. So, even if the modern technological revolution is transforming the way we do business, humans can stay in the driving seat.

"We’ve allowed for substantial amounts of our workers to be inadequately educated for modern industrial work. The responsibility is on us to change that, to see we educate our youth."

How do we make sure everyone benefits in the age of technology?

Edmund S. Phelps also sees technology as our ticket to global prosperity. But for him, innovation is the vital ingredient. Like Robert M. Solow, he believes innovation only flourishes when people are included in it at every level of employment. And not just in places like Silicon Valley, but across the country. He argues that if we don’t plug everyone into creative and innovative work, it’ll be bad for the economy and society as a whole.

"Silicon Valley is just a small part of the economy - innovations have stopped in the heartland of the country. It’s the working-class people deeply connected to that heartland who’ve been suffering."

So what skills do we need to survive in the modern world? 

Theodore W. Schultz thought it was the skills of ordinary people that mattered most. In fact, he had little time for the rich urban elite. He believed that since most people in the world are poor, it’s they who should be the focus for economists.

He believed the key is to make sure that the poorest in society are educated to the highest possible level and able to reach their full potential in life.

"What’s the most important thing in economics currently? It’s seeing the increase in returns from schooling and education."

Why is there unemployment when jobs are available? 

Sir Christopher has studied this question extensively and realized that existing models couldn’t explain it. His research shows that the traditional supply and demand model didn’t fit the problem: employment isn’t transactional, it’s more like dating - the chemistry has to be right. His study of the labor market was a big step forward, and it’s been beneficial to governments, the unemployed and society as a whole.

"Unemployment is one of the biggest failures of our economic system."

Laureate Edmund S. Phelps also rocked the boat when he challenged the accepted theory that inflation helped unemployment. He upset traditional economists by wanting to use life-like actors in his economic models, to reflect the fact that people make decisions without having all the right information at their fingertips.

"The focal point of economic attention should be on what leads to a more dynamic economy and society, not just what leads to more efficient markets."

How can we stop old-age poverty?

For those who manage to find employment, the age in which they retire has continued to grow and grow. But when it’s eventually time to throw in the towel, what will future generations do when their pension system, creaking under an aging population, fails? William F. Sharpe believes a growing knowledge-base and an intelligent immigration system could be the answer.

"You need younger people to come into the economy. To be productive and help the economy function. And basically help support all the old people."

Can game theory avoid wars and help create peace?

Technological and scientific breakthroughs are common in the defense industry. So while we develop more and more efficient ways to destroy people and cities, there’s also a new science that works towards preventing war.

Nobel Laureate Robert J. Aumann used game theory to study conflict and cooperation between decision makers, to develop models that might prevent wars from happening in the first place. Studies have already shown that being prepared for war is actually a big part of promoting peace.

"Anybody who talks about any kind of military preparedness should hope that it makes the use of military unnecessary. The goal is to be prepared for war so it doesn’t have to happen."

Can game theory save lives?

We know that game theory can help avoid wars. But what about applying it to markets to save lives outside of the battlefield?

Nobel Laureate, Alvin E. Roth, realized that speed dating, applying to secondary school and even undergoing a potentially life-saving organ transplant can all be seen as markets. As a result, he pioneered a kidney swap program. It helped people wanting to donate a kidney to a loved one with an incompatible blood type to be matched with other incompatible donor pairs.

He also used game theory to solve the challenge of matching students with schools in big cities like New York and Boston, and finding the best way to match couples when speed dating.

So yes, it appears that game theory can change and even save lives.

"As the conditions of the market change, the behavior of people change, and that causes old rules to be discarded and new rules to be created ."

Can we stop terrorism?

Laureate Myerson believes that by learning from past mistakes, we can create a framework to advance humanity and tackle terrorism:

"After World War II, everybody understood that the reparations scheme that was imposed after World War I was a disastrous mistake, so that mistake was not going to be repeated."

He argues that Game Theory can provide this framework, and that by taking into account all of the issues, we can look to the root of threats like ISIS and tackle them, creating a more peaceful world.

Can economics save the planet too?

Nobel Laureate Robert M. Solow was interested in who should pay to keep our environment clean. We often blame modern technology for increasing pollution, but he believes it’s a social and economic issue. Technology, he says, could actually provide many of the answers to mopping up the mess.

Solow reasons that the polluter should pay, once people can agree on who that polluter is. Is it the company who makes the product, the person who uses it, or both? The solution, says Solow, is to add the costs of cleaning to the price of the goods that the consumer buys.

"We know that, at a cost to ourselves, we can control environmental pollution. What we fight about is who will pay for those costs."

How can people manage their own resources?

Elinor C. Ostrom was the first female Nobel Laureate in Economic Sciences. She believed that people are perfectly capable of taking control of important community decisions, without external authorities imposing rules. Her extensive fieldwork focused on how people interact with ecosystems, such as forests, fisheries and irrigation systems, while maintaining their long-term sustainability.

"I think we’ve now gained a much greater respect for human ingenuity and creativity, and our capacity to come up with many kinds of solutions to challenging problems."

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