Better off

Speaker A: 00:00:00

Hello and welcome to the Cognitive Engineering Podcast produced by Tell Me Studios for Aleph Insights. In this series of podcasts we take a look at interesting topics and discuss what we think they tell us about analysis and decision-making. I'm Fraser McGruer and I'm here with Peter Coghill and Nick Hare of Aleph Insights and this week we're discussing whether we're better off than we were 10 years ago. Nick, are we better off than we were 10 years ago?

Speaker B: 00:00:31

we've had recently started in: 2008

Speaker A: 00:01:48

Well, look, let's bat that over to Peter first, then bat it back again to Nick. Peter?

Speaker C: 00:01:54

I think you can make a case that there's a lot more free stuff around than we've ever had before. Entertainment-wise, for example, I mean, we have YouTube and Facebook is huge now, so you can entertain yourself 24 hours a day for free on the internet, assuming you've got some sort of connection. So for a small connection fee, you've got an unlimited amount of entertainment. And I think that an analogue spreads to other parts of social life and it's more easy to find and maintain relationships with people than it ever has been before. There's more opportunity for travel than there ever has been before, it's cheaper than it ever was. The social services and things which are available, albeit recent cuts in the UK, but life is pretty good. There are lots of things on offer out there, which didn't exist 10 years ago, certainly didn't exist 30 or 40 years ago. So I think it's not quite as simple as being better off. I think there are other ways of being better off than just having purchasing power. There's a lot of free stuff. Okay, yeah.

Speaker B: 00:03:05

Yeah, indeed. And I think it's touched on this issue of what we measure when we measure purchasing power, for example. And basically, it all comes down to the same underlying concept of value. So the amount of value you earn in a year, how much stuff you can purchase. And that's measured using the same fundamental principles as GDP, which is essentially trying to look at the total value, add up the prices of everything that's been made, more or less, and work out what that number is, and then control for changes in prices. So if it turns out we're buying the same number of light bulbs, but the light bulbs have doubled in price since last year, even though that nominal GDP, the light bulb component of it would have doubled, we want to say that actually GDP is the same. What we're really trying to do is work out how much stuff there is, and we're trying to cancel out any impact of changing prices. Now this is where the problems come in. And I should say, by the way, this is nothing novel about the idea of criticising GDP. It's very well understood by the people who make GDP that it has these limitations and so on. But you have problems to do with, significant problems about measuring quality changes. So by and large, they will pick, when they're trying to capture inflation for the purposes of working out how much GDP has really grown, they pick representative products that might be a light bulb. And what that doesn't do is tell you about the quality of light bulbs. If light bulbs have become longer lasting, or if they've become brighter, or less hot, or more efficient, those things aren't captured in GDP. But most significantly, to go to what Peter was talking about, is it doesn't capture things that aren't marketed. And that means that if you're not paying for something, it isn't going to appear in GDP. There was a famous remark, I think that Samuelson made, which is when you, you know, if a man marries his maid, GDP falls, even though she's doing the same amount of work, because he's no longer paying her. You know, it doesn't capture things like childcare, where someone isn't getting paid, you know, if a woman stays at home to look after children, or a man, you know, that that isn't appearing in GDP. It doesn't certainly capture things like, you know, we make our own food rather than going to a restaurant, in a sense, the same amount of work has been done, but GDP will be lower. And I think, actually, the information revolution has been so significant, as has such a significant impact on our lives, in myriad small ways, that have taken a lot of value, what would have been considered valuable activity off grid, as it were, you know, is no longer being captured. And I tried to have a, I tried to make a bit of a list of the things that I've sort of benefited from, and they would be things like, you know, always having accurate time on you, you know, always having to not having to waste time changing your clocks or phoning the speaking clock, having an alarm clock going everywhere with you as your mobile phone, so you don't have to, you know, you don't have to buy an alarm clock, things like being able to get an online recipe for free while while you're in a shop, you know, you've not only is there not the time you've got to waste, you know, going, going home to check your recipe books, you don't need a recipe book at all. The fact that you can make video calls, very easily, multi way for free, instead of having to travel to places, that's that must be for even for each person days of effort saved. And then things like, you know, you take Google Maps, complete brilliant service, totally free, at least at the point of use. And, you know, it's all of these things. So I'm not buying maps anymore. I don't need to buy a map. So GDP has fallen. Am I better off? Absolutely. unquestionably. Yes. Right. So what does it

Speaker A: 00:07:02

mean? Hold on. Well, what it means is every single one of your examples with the possible exception of Google Maps pertain to having a mobile phone. So so I think one of these you're saying is your life is better, or people's lives can be better, because now they've got a mobile, they've got a smart mobile phone. Yeah. And, and, and actually, I just wanted to sort of just step back here. I just want to be a grumpy old man for a minute. Right? Because I've spent a lot of time with with teenagers recently. And two things. One, actually, you'd think that they'd know the time, but they don't. Because as soon as as soon as they don't have a mobile phone with them, they don't know what the time is. They just have just they have no idea. That's the first thing. And second, I've just and this is where I do become a sort of grumpy middle aged man is just I'm just so fed up with sort of going around and just seeing just, you know, dozens of teenagers just sitting around, and just staring at a mobile phone and not doing much else from what I can see. So my point is, is that I refute everything that you've just said, because it all went

Speaker C: 00:08:02

back to mobile phones, and mobile phones are the devil's work. I think you're making with your first point, you're kind of making Nick's point that the mobile phone is just a delivery mechanism. You know, 50 years ago, had you had you not had a watch, you wouldn't know what time it was. Yeah, but at least we had the wherewithal to sort of go and get a watch and just put it on and find and he's saying all those teenagers incessantly look staring at their phones would have otherwise not been breaking bus stops or bus stops or, or causing causing a nuisance. And now they're talking to each other. They'd have

Speaker A: 00:08:31

been talking to each other having nice, fruitful conversations. Well, would they? Or are you

Speaker C: 00:08:35

just being pastoralist about it? I just think teenagers find innovative ways of wasting time.

Speaker B: 00:08:43

Yeah, no, I mean, I think I think there's a key. This sort of brings us on to the second question, really, which is, in an idealised world, we would be able to measure how much we are consuming and what the value is. So if you take the average media consumption of me, so the YouTube videos, watching a film, which is free through an online streaming service, being able to read research papers without going to library or paying for subscriptions, being able to see lectures online, for example, without having to sign up to be and pay university fees. We take all of my meetings, even during the average day, it probably would be valued at hundreds, if not thousands of pounds 30 years ago. Now, an idealised kind of way of capturing value would factor that in. It would factor that I'm hugely rich, that the information revolution has dumped an enormous amount of value for free into my lap. And, you know, so if we met if we were able to measure by consumption of things that are valuable, of things that people would pay for, then I think we'd find that we were consuming an enormous amount of value now. But the question is, does consumption of things, e.g. entertainment, but anything else, does that what connection does that have to our well-being? And I think that's where that's where we've come up with against a quite a tricky term. I think and even though, so I sort of sit between you in that, I think, obviously, it is possible to look back and say, well, people, you know, might have said the same about teenagers reading magazines, or spending time watching the TV in previous generations, or, you know, or reading books, you know, wasting time reading, sitting about reading novels, which we would probably be a jump at the chance of getting our kids to sit about reading novels all day now. You know, people have said that in the past. Having said that, I think, I think that we do need to ask questions about whether or not using mobile phones, particularly social media, entertaining though it is, is actually good for us. And whether or not it actually makes us as concomitantly

Speaker C: 00:10:51

happy as it ought to. Well, I know you don't want to talk about revising GDP, but surely a measure of well being that just takes into account your, your comparative assumption against other previous generations, is perhaps it's one measure, but there's lots of people looking at other measures for well being and there are sort of various people considering happiness indexes, and how much value you get in your life. You know, made up of other things, not just how much you earn and how much you can spend. But, you know, other things like how much freedom you have, and how, how generous is your society and how corrupt is your society and things that have a more general holistic benefit to you. And I think I think generally, the the trend is up. And Western societies, particularly, and more and more other societies are generally more happy than they have ever been because of a combination of lots of different things. Yeah, that's definitely true. I mean,

Speaker B: 00:12:01

e happiness, self reported in: 2012

Speaker A: 00:13:47

now, you know, yeah. So let's sort of we need to wrap up soon. But let's personalise this a little bit. Peter, are you better off than you were 10 years ago? Yeah, I think so. I mean,

Speaker C: 00:13:59

10 years ago, I was working for a large organisation and I you know, trying to climb the greasy pole and having enormous amount of stress and going, being in my own business has taken a huge weight off. And it's I only noticed that that weight was there when I left. So yes, definitely. Nick?

Speaker B: 00:14:23

Yeah, again, I think, you know, when you start your own business, you don't expect to, to, you know, you expect there to be some time where you're earning less. And, you know, while that's not certainly not been as, you know, as bad as I thought it might, that whatever reduction income, you know, I had to put up with after setting the business up has easily been worth it for the same reason that that Peter's talking about. And I wonder if we look ahead, if we look into the future, whether actually we'll, you know, and I think, you know, what's going to happen to the future to the firm, to the idea of the firm in the future is probably a whole podcast, at least in itself. But, but, you know, it's certainly the tools to control your life meaningfully and to be able to, for example, set up a business or to be a freelancer, you know, that where we have very efficient matching technologies now. So which enables things like Uber and Deliveroo and all the other kinds of services where we can find something we want, which is particularly what we want, and not just what's there. We'll do the same for the labour market as well. And increasingly is doing it much easier, I think, to find now, I know, people will tell you, well, it's not, you know, it's not easy to find a job compared to what it was like 30 years ago. But certainly the technology is there to make it easy to get matched to a job that's suitable for you. And, you know, in future, perhaps people will just have more freedom.

Speaker C: 00:15:54

And greater efficiencies in time, which I think translates to a useful measure for one of the measures for general well-being is the amount of free time that you have. I think that's another thing that's hugely on the up, certainly since the 50s and 60s, the amount of the number of hours people work per week is hugely down compared to what they used to. They have much more free time than they ever have. Yeah, in the 19th century, it was fairly standard

Speaker B: 00:16:18

to have half a day off on Sunday. And that was it. Work the rest of the time. I find that unfathomable. Yeah, I mean, so yeah, I suppose the, you know, the only question we haven't discussed is why do people all think it's getting worse? Why is there a perception that things are harder today when it seems to me just very obviously the case that they're not? Well, I think and that in

Speaker A: 00:16:44

itself is quite a complex question involving the human condition. So that aside, we'll leave things on what looks like a positive note. You've been listening to the Cognitive Engineering Podcast. I'm Fraser McGruer. We've been here with Nick Hare and Peter Coghill of Aleph Insights. Thank you for listening. And until next time, bye-bye.