Will Europe thrive in the Digital Revolution?

Attentive readers will have noticed that in my "Ten Years On" piece for The Mint I concluded by saying that "I'm not an economist any more".

This was always something of a rhetorical claim, of course.  I first thought about economics sometime in the late 1970s and have been having at least one thought about 'economics' every day since.  (This is something north of 14,000 days.  No wonder I'm confused.)  Whether this means I am still qualified to call myself 'an economist' is moot.

Anyway, possibly aware of my premature exaggeration, my dear friend J - who is doing something important for someone powerful - asked if I had any thoughts in response to an essay question he's been set.

The essay question is:

"Will Europe Thrive in the Digital Revolution?"

And since he responded positively to my thoughts, I thought I'd share with you, too.  They are, roughly:

At first I thought about 'thrive', and the contrast/collision between a market-oriented interpretation and more ecological/environmental interpretation - the former generally concerned with the idea of 'growth' and the latter with things like 'limits' and 'well being' and sustainability and so forth.

And given the extraordinary threat of climate change, there's an essay that could be written about that.

But then I went back to the 'Digital Revolution' bit of the question because I'm really not sure I know what it is.  I think it may comprise the following (partially overlapping) components:

• ICT (the actual infrastructure)
• Social media (the means by which more or less everyone on the planet is now 'plugged in')
• Big Data (corollary, in part, of the first two, but more than that)
• AI (as the next step in the process of algorithmic life)
• Machine learning (as distinct from AI and associated with, amongst other things, a loss of understanding by the humans as to what the fuck is going on)

And I thought back to the Industrial Revolution, about which I learned a little back in the day, and I reflected further on current discussions in economic circles about 'productivity'.  As I understand it, the main thrust of argument as to why productivity in the western economies hasn't done what it usually does after recessions (i.e. since 2008 etc.) is that there's a lot of process re-engineering that needs to be done to capitalize on the productivity benefits afforded by the - and this is key - multiple elements of the Digital Revolution.

This is indeed what happened in the Industrial Revolution - there were, in effect, two bursts of productivity improvement, the first when the machines and the factories first started appearing; and the second, much bigger and more profound, when businesses and other institutions adapted so as to make best use of the new tech.

BUT it is even more profound than that.  The Industrial Revolution didn't just re-configure production and supply-side processes (institutions); it spilled out through the entire of culture.  Economics itself (think Adam Smith) is a product of the Industrial Revolution; so too many of our most cherished institutions - stock markets, political parties, the class system, trade unions etc etc.  The idea of a 'consumer' may have become preposterous and swollen in the second half of the 20th century (and accelerated and broadened especially over the past thirty years) but it was born in the Industrial Revolution.  (A revolution affects both supply and demand!)

Which suggests to me that the Digital Revolution heralds not just transformation of markets; but transformation of (potentially) all the processes and institutions the support and surround and co-mingle with those markets.  One might think that Trump and Brexit and populism are as much part of the revolution as tailored production, the 'prosumer', platform life and so on.

How far will it go?  I don't know.  Actually, I do: the answer is "All the way".  The thing I don't know - indeed can't know, and neither can anyone else - is what it will look like.  All is flux.  Formally complex and inherently unpredictable.

Timeframes matter - are we looking ahead three, five ten, twenty years?  Key to the essay, methinks.

But my answer to the essay question: "Will Europe thrive in the Digital  Revolution?" is:

As a market, yes; as an idea, no.

I think individual citizen consumers and innumerable businesses will come up with all sorts of lovely things to do and buy and sell in the Digital Revolution; but the institutions of the Enlightenment (upon which post-Industrial Revolution capitalism built) and of which 'Europe' is a key example, are falling apart.

(I thought all this and then saw, in the weekend's Guardian, a review of 'Future Politics' by Jamie Susskind, who seems to be thinking along similar lines...) 

OK, that's it.  Back to the poetry.