KENNETH ROGOFF: Chess gives clues on narrowing of income gaps
UNTIL now, the relentless march of technology and globalisation has played out hugely in favour of high-skilled labour, helping to fuel record-high levels of income and wealth inequality across the world.
Published: 2011/07/20 07:29:37 AM
UNTIL now, the relentless march of technology and globalisation has played out hugely in favour of high-skilled labour, helping to fuel record-high levels of income and wealth inequality across the world. Will the endgame be renewed class warfare, with populist governments coming to power, stretching the limits of income redistribution, and asserting greater state control over economic life?
Income inequality is the single biggest threat to social stability , whether it is in the US, the European periphery, or China. Yet it is easy to forget that market forces, if allowed to play out, might eventually exert a stabilising role. The greater the premium for highly skilled workers, the greater the incentive to economise on employing their talents.
The world of chess illustrates the way in which innovation in the coming decades may have a very different effect on relative wages than it did over the past three decades.
During the late 18th and early 19th centuries, a brilliantly inventive chess-playing “automaton” toured the world’s capitals. “The Turk” won games against Napoleon and Benjamin Franklin, while challenging many great minds to penetrate its secrets. Concealing a human player in a shifting compartment amid a maze of gadgetry, it took decades for outsiders to correctly guess how the Turk really worked.
Today, the scam has been turned on its head: chess-playing machines pretend to be chess-playing humans. Desktop-based chess programmes have considerably surpassed the best human players over the past decade, and cheating has become a scourge. The French chess federation recently suspended three of its top players for conspiring to obtain computer assistance.
Of course, there are many other examples of activities that were once thought to be exclusively the domain of intuitive humans, but that computers have come to dominate. Many teachers and schools now use computer programmes to scan essays for plagiarism, an ancient transgression made all too easy by the internet. Indeed, computer- grading of essays is a surging science, with some studies showing that computer evaluations are fairer, more consistent, and more informative than those of an average teacher, if not necessarily of an outstanding one.
Expert computer systems are also gaining traction in medicine, law, finance, and entertainment. Given these developments, there is every reason to believe technological innovation will lead to commoditisation of many skills now seen as precious and unique.
My Harvard colleague Kenneth Froot and I once studied the relative price movements of a number of goods over a 700-year period. To our surprise, we found that the relative prices of grains, metals, and many other basic goods tended to revert to a central mean tendency over sufficiently long periods.
We conjectured that even though random discoveries, weather events, and technologies might dramatically shift relative values for certain periods, the resulting price differentials would create incentives for innovators to concentrate more attention on goods whose prices had risen dramatically.
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Chess players make more money.
the fed is what is causing the destruction of the economy and the widening gap betwen the rich and the poor.
the fed lends the us government money and charges the us government interest.. it does this by printing money out of thin air and using that money to purchase treasury bills.. if the us government wants to spend money it has to sell treasury bills to the fed … the fed is making money off the us government without even using its own money.. it can simply print money our of thin air and use that money to buy us treausry bills and charge the us goverment interest on those treausry bills..
the currency we use isnt even us treasury currency…. it is federal reserve notes that state the you can redeem this fed note for lawful money.. what is lawful money.. it is nothing.. the federal reserve notes we use are worthless pieces of paper backed by nothing.. there printed out of thin air by the greedy federal reserve which charges interest to print money and backed by nothing…
we used to have the currency backed by gold.. our money which is called federal reserve notes are backed by these ficticious treasury bill purchases by the fed.. its a complete joke.
if we look back to when the first great depression happened it was right after the fed came into power… in 1913 the fed too control of the money supply and set monetary policy and by the 1930’s we had the great depression.. the fed was printing money and loaning it to greedy wall street banks so that the fed and the wall street banks could make money while the average citizen went bankrupt…
the fed is 12 private banks with shareholders looking for profits by lending money to the the commercial banks such as goldman sachs and jp morgan chase who in turn use that money lended by the fed to make quick and dirty profits while everyone else gets screwed.. its a complete sham and con job that is allowed to be perpetrated on the american citizen. ..
the fed sets monetary policy and tells the us governments what to do.. the fed is in charge of monitering the wall street banks.. yet it allows and even endorses these wall street crooks to trade risky derivitves that increase the food prices, oil prices, house prices and everything else so that they can make a quick profits..
next time you see young kids starving in a third world country because of sharp increase in food prices you can thank the fed and wall street for that… it is the fed that sets montetary policy and allows the trading of risky food derivitives to drive up food prices so that poor people can’t even afford to eat..soon a loaf of bread costs $5 dollars thanks to the fed and wall street driving up the prices of food through the risky trading of food commodity derivitives.. the fed and wall street don’t give a shit if some kid has no food is starving and has malnutrition as long as they continue to increase there profits and make more money..
the wall street crooks are only looking to make quick and dirty profits by huge spikes in derivitive prices or huge down turns in these prices.. if prices for commodities such as food and oil and other commodities stay contant these crooks make no money..there in it to make profits at everyone elses expense..
lets look at all the wars in the world..the world bank which is closly associated with the federal reserve and wall street loaned countries like iraq and afganistan huge amounts of money at interest … it is the the central banks that likes war because it means it loan these countries money at a high interest rate..that equals huge profits for the central banks such as the world bank and federal reserve..
the biggest cause of war is these central banks because these greedy central banks are the ones that make money when there is a war.. they get all the profits by lending out money for military equipment and recontruciton for these wars…
these greedy central banks such as the fed and world bank are the biggest war mongers and crooked back room dealing bastards that exist on the earth.. they make the drug cartels look like morally ethical people.. until we get rid of the fed and all these central banks that control the money supply for there own greedy profits the rich will continue to get richer while the poor continue to get poorer.. it doesnt take a chess grandmaster to figure that out.. my solution would be to get rid of the fed and world bank.. if we want stablize prices and interest rates then abolish the fed and world banks.. they have ruined the world economy..
the worst part of it is the fed isnt even allowed to be audited.. NOBODY EVEN KNOWS THE BACK ROOM DEAL THAT THE FED MAKES WITH THE COMMERCIALS BANKS..who knows what the fed is doing behind the scenes.. the unisted states congress doesn’t even have the authority to audit the fed and look at what its doing.. it can basically do whatever it wants to do..