In a recent post on the Rise of Robots, Krugman argues that growing capital-biased technical change undermines the need for better education:
If this is the wave of the future, it makes nonsense of just about all the conventional wisdom on reducing inequality. Better education won’t do much to reduce inequality if the big rewards simply go to those with the most assets.
I’m far from convinced by his argument on the role education can and should play. Larry Summers has a thought experiment that is helpful for thinking about these issues:
Suppose that a new technology called “the Doer” will be created tomorrow. Doers can do anything flawlessly. They can build a house, give a massage, or make a guitar. What would the world of Doers look like?
1) Cheaper, high quality goods would proliferate.
2) The price of raw materials would increase as raw inputs for doers would become more scarce and thus more valuable.
3) People who can think of new things for Doers to do or of new ways for Doers to do things will make a lot of money.
4) For everyone else, the value of working for an hour will be nearly zero (since Doers can do everything already, no extra value is created). Therefore, hourly wages will go to zero.
Number 3 is why I don’t think Krugman is quite right. Education can help workers develop, enhance, and optimize what doers can do. For example, knowing statistics will likely become more valuable since helping businesses make sense and use of reams of data will be increasingly hard and time-consuming without a statistics background. Similarly, coming up with new things for doers to do will be even better rewarded as the global customer pool expands. Helping doers do things better and coming up with new things for doers to do amplifies rather than undermines the need to provide high quality and broadly available education.