Wednesday Wisdom

WHO?

Robert C. Allen was born in 1947, in Salem Massachusetts. He received his Bachelor of Arts in Economics from the Carelton College in Minnesota in 1968 and later earned a Ph.D. in Economics from the Havard University, in 1975.

Throughout his academic career, Allen has been associated with various institutions, including positions at Hamilton College, the University of British Columbia, the University of Exeter, the University of Oxford and currently a distinguished professor in economic history at NYU Abu Dhabi. He is particularly known for his contributions to the understanding of economic changes during the Industrial Revolution, which is often considered early 18th century into the early 19th century. This was a period that saw the inventions of coal use to produce steel and motor steam engines and brought innovations to production and transportation.

What he produced

Friedrich Engels (1820–1895) was a German philosopher, social scientist, and political theorist who authored a book The working class in England in 1845. The book reflects on the Industrial Revolution, which witnessed a surge in productivity through technological innovation, but was accompanied by a paradoxical situation where worker wages remained stagnant. Engel argues that the capital allocation for increasing production efficiency, brought a discrepancy between the lack of proportional wage growth and improvement of working conditions. Studying the industrial cities of Liverpool and Manchester, England, Engels concluded that society was worse off as people moved to urban environments for work and lived and worked in poor and unhealthy conditions. Engel’s book had a large influence over Karl Marx and together, they co-authored some of the most influential works in the history of political and economic thought, including "The Communist Manifesto" (1848) and "Das Kapital" (Capital).

Robert Allen was educated on the themes of the Industrial Revolution, and he produced a paper in 2007 titled Engels Pause: A Pessimist`s Guide to the British Industrial Revolution, publish by the University of Oxford economics department. In the paper, Allen introduces the concept of "Engels' Pause" to describe a period of slow real wage growth during the early stages of industrialization while GDP soared. He followed up in 2009 a more comprehensive book called "The British Industrial Revolution in Global Perspective", where he analyzes the Industrial Revolution's impact on living standards and global economic effects. Allen was obviously more sanguine on the Industrial Revolution than Engels, especially given his perspective over time, and he cites a rise in wages and living conditions through the second half of the Industrial Revolution. However, Allen leaves us with the insight and the phrase “Engel’s Pause” to consider when we think of disruptive technology and its economic effects.

2024 why do we care?

The advancement of artificial intelligence, like most technologies, provides the possibility of economic growth and increased efficiency. However, history provides an important lesson of caution of the societal consequences in the short term. Should we consider and explore the ethical implications to society when a disruptive technology takes hold?

Might be entering an “Engels’ Pause”? — a phase where economic and technological advancements precede improvements in living standards or more importantly the technology even replaces jobs all together. Sam Altman of the artificial intelligence platform Open AI has cited the need for 7 trillion dollars (yes, with a T) investment into to chips to support advancement of artificial intelligence. Capital allocation of this magnitude can only make one wonder what the implications would be. Could this mirror the early Industrial Revolution, where initial industrial expansion did not immediately enhance workers’ conditions and lives, highlighting a disparity between technological advancement and societal progress?

I would wager as artificial intelligence and robotics becomes more mainstream; the phrase “Engels Pause” is also likely to become a common buzzword as we contemplate the future.

And now you know...

Thanks, Dad, for the gift of curiosity!

Philosophy is the art of thinking, the building block of progress that shapes critical thinking across economics, ethics, religion, and science. 

METAPHYSICS: Literally, the term metaphysics means ‘beyond the physical.’ Typically, this is the branch that most people think of when they picture philosophy. In metaphysics, the goal is to answer the what and how questions in life. Who are we, and what are time and space?

LOGIC: The study of reasoning. Much like metaphysics, understanding logic helps to understand and appreciate how we perceive the rest of our world. More than that, it provides a foundation for which to build and interpret arguments and analyses. 

ETHICS: The study of morality, right and wrong, good and evil. Ethics tackles difficult conversations by adding weight to actions and decisions. Politics takes ethics to a larger scale, applying it to a group (or groups) of people. Political philosophers study political governments, laws, justice, authority, rights, liberty, ethics, and much more.

AESTHETICS: What is beautiful? Philosophers try to understand, qualify, and quantify what makes art what it is. Aesthetics also takes a deeper look at the artwork itself, trying to understand the meaning behind it, both art as a whole and art on an individual level. A question an aesthetics philosopher would seek to address is whether or not beauty truly is in the eye of the beholder.

EPISTEMOLOGY: This is the study and understanding of knowledge. The main question is how do we know? We can question the limitations of logic, how comprehension works, and the ability (or perception) to be certain.2