The End of a Gilded Age

Waves of globalization are characterized by intense innovation, along with increased wealth, productivity and consumption, notes Princeton professor Harold James in an opinion essay for the Baltimore Examiner. Agriculture gave way to manufacturing, manufacturing gave way to services, and services gave way to online interactions, and James notes that “In each case, a dramatic crisis created the conditions for change to a new model of development.” Societies can adjust to crisis by regulated attempts to preserve the old ways and jobs – or with technological innovation which inevitably reduces human involvement and human error. Such innovation could straighten out the financial industry, too, James predicts, with algorithms organizing transactions alerting to conflicts of interest. “As in previous economic transitions, those who work in the financial industry will try to produce convincing arguments that their business depends on the human touch,” he writes. “As the financial sector continues to shed labor in 2009, we may well find that slimmed-down finance turns out to be better finance.” Efficiency can fall by the wayside with too many chiefs. – YaleGlobal