I figured that the lecture would be standing room only so I got there early and it was wonderful to even see Bowles' long-time collaborator, and also a former UMass Amherst Professor, Herb Gintis. I have had the pleasure of seeing Herb at a workshop in Hawaii, at which we were both invited speakers (and all our expenses were paid) and also at a conference at the University of Maryland. And, as I mentioned to him today, when I arrived in Gothenburg, Sweden in my apartment there as a Visiting Professor last Spring, I turned on the television and there was Herb being interviewed! No wonder I always feel so at home in Sweden!
Professor Bowles was introduced by Professor Michael Ash of the UMass Amherst Economics Department. We had hosted Professor Bowles back in 2009 in our UMass Amherst INFORMS Speaker Series. He was mesmerizing then and today as well.
He is fascinated (and who is not) by such questions as why inequality may persist and intensify and on what does a more egalitarian future depend.
He described mobile hunter gatherers for whom cooperation was an essential part of their livelihood and brought out the kudu (featured below).
Fascinatingly, Bowles noted that the wealth of hunters gatherers was knowledge and networks! Public speaking was important because you had to convince others. Some would walk for miles to interact with others as an "insurance network," a phrase that resonated with me.
The inheritance of material wealth was becoming much greater than the inheritance of human capacity and hunters gatherers took many years to acquire their skills and knowledge.
He spoke of the Gini coefficient with a value of 0 signifying perfect equality and a value of 1 corresponding to ownership of 1. He also presented graphs of Gini coefficients for different countries and, of course, some of my favorite ones - the Nordic countries - were singled out as having low Gini coefficients, so this shows a redistribution of wealth. He also showed Lorenz curves for measuring inequality.
He emphasized that knowledge and human capacity now are more important than material wealth. We are past the industrial society and in the knowledge and information-based economy.. How important is material wealth in producing what we need?
He presented a math model from a published paper with 4 terms and noted that the cost of redistributing in a society of knowledge, networks, and human capacity may be lower.
Of course, he mentioned Thomas Piketty's book, "Capital in the Twenty-First Century." Piketty delivered the Gamble lecture last year at UMass and I blogged about it. Bowles said that he was interested in Human Capital.
In the information-based economy, he said that "the winner takes all." No longer is it just the local singer that you may care about but the best singer and songs and the same for apps. He said something quite controversial - that intellectual property should be abolished. He also mentioned that because of the World Wide Web we have a "weightless economy," which I found quite interesting.
He also stated that the US because of its great inequality has a huge amount of "guard labor," which is a drain on the economy.
I very much appreciated hearing him talk about knowledge, creativity, and networks and educational institutions, such as, of course, the university at which I teach.
The Q&A session that followed was great with issues of politics and poverty highlighted.
It was definitely a day of intellectual rigor and delights and, interestingly, the material that I covered in my afternoon seminar was an introduction to variational inequalities - a mathematical formulation that contains optimization problems as special cases. So, inequality was definitely the dominant theme for today.
Bowles in his summary and conclusions also noted that the politics of redistribution of wealth is extremely important.