Exploring the Post-War Economic Stability and Its Breakdown

Technological progress drives productivity improvements and increases wealth, but the distribution of those gains depends on both technological and political factors. The debates we see now over the impact of AI on social welfare are not new: similar debates surrounded previous waves of innovation. One thing we have learned from those previous waves is that society and politics can dramatically impact the trajectory of technological change. 

Simon Johnson is the Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management, where he is head of the Global Economics and Management group. He has also co-authored several books, his latest being Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity with Daron Acemoglu.

Simon and Greg discuss how technological advances had disrupted industries in the past, ranging from the industrial revolution in the English midlands to the mass production of Henry Ford in America. They discuss how some innovations can bring about catastrophe, as in the 2008 financial crisis, and the current landscape of disruptive technology and Artificial Intelligence (AI) in particular. Simon talks about how it may be deployed in business but how, in education, there will be an adjustment period before being incorporated.

Listen in for insights on the past, present, and anticipated future of technology and prosperity with Simon Johnson.

*unSILOed Podcast is produced by University FM.*

Episode Quotes:

When workers became a cost, not a resource

37:55: Managerial thinking, including what was taught at business school, shifted in the 1970s and 1980s, and the concept of shareholder capitalism, which I would contend has been around for a long time. In the 1970s and 1980s, there's a different concept that comes to the fore, and it's one which treats the workers much more as a cost to be minimized rather than a resource to be developed. And I think that wasn't just business schools; business economics played a role in that broader social discussion. That corporate thinking and corporate logic are very powerful, and that is part of what's propelled us in this particular direction that's led to a lot of job market polarization.

The future of tech is too important to leave to a few

42:07: We should be very careful about placing our technological future in the hands of a few individuals, even if those individuals have previously had great success in something that seems like it might be quite relevant for what comes next.

How prepared ideas shapes history

55:43: I don't think that books, ideas, or, I'm afraid, podcasts, change history. I think what changes history is events, but when you have an event, when you have a scandal, when you have a big problem, when you have something that is really in people's faces, it matters whether or not you have prepared ideas, whether or not you understand what the problem could be, and whether or not you are ready with solutions, not just solutions as something that I wrote a paper about; you should do what I say, but solutions that have been kicked around, debated, and hammered out.

What’s the key point of the industrial revolution?

04:23: The key point from the Industrial Revolution is that it did increase productivity. It did increase the surplus. That could be shared in some fashion, but it also increased the power of a certain set of people—the people who owned the mills, the cotton mills in particular, in the north of England, for example. And that change in the balance of power is part of what, of course, encouraged them to invest, as part of what gave them a good return on investment. But it also meant they didn't really care that much about the workers.

Show Links:

Recommended Resources:

• Jeremy Bentham
• Henry Ford
• Ferdinand de Lesseps
• Edwin Chandwick

Guest Profile:

• Faculty Profile at MIT Sloan Management School
• Faculty Profile at Peterson Institute for International Economics
• Simon Johnson on LinkedIn
• Simon Johnson on X
• Professional Profile at IMF

His Work:

• Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity
• Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream
• White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You
• 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown
• NBER Papers
• Reuters Articles
• Google Scholar Page

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