Search This Blog

Monday 1 July 2024

Social immobility and GDP and some predictions on the possible effect of AI

Something a little bit different today, but with a twist at the end. Let’s talk about social mobility — in a country with high social mobility, you might be born into the lowest level of society but still become wealthy in your life (and vice versa); in a country with low social mobility, you will live your life in the same level of society that you were born in.

Social mobility is a key measure of how “fair” your society is: if by accident of birth you are guaranteed a privileged life regardless of your life decisions (or guaranteed a life of suffering), that’s a problem.

How does social mobility change with GDP? If a country is terribly poor, then there may be very few opportunities to move out of the lowest social classes. If a country is extremely wealthy, then the chances of someone stumbling upon an opportunity may be much greater. Let's see if that's true.

Wikipedia has the data we need… when I was younger this would have been a project in itself to collate it:

I didn’t even write any code to make this chart — I just asked ChatGPT to plot it based on the data in those two pages.

There’s a trend there, but it isn’t easy to see. Let’s ask ChatGPT to make the x-axis logarithmic and plot “immobility” (100 - mobility). And draw a line of best fit through it.

Just to make that picture make sense:
  • The x-axis is how wealthy the country is. Doubling the country’s wealth per capita moves you along one unit across.
  • The y-axis is how “stuck” you are. High on the y axis means that your social status always the same as your parents. Low on the y axis means that your life isn’t dictated by your parents.
For the stats nerds, that’s an R^2 of 0.771 — that’s a very strong effect. Wealthier countries are fairer (in this sense) and give more opportunities across all levels of society. Nice!

I couldn’t label every point without it being a mess, so I extracted the residuals out as numbers.

If you are below the line (negative residuals), that means your country has more social mobility than you would expect. Looking at the numbers… most below the line:

  • Denmark -0.48
  • Finland -0.47
  • Sweden -0.42
  • Iceland -0.35
  • Netherlands -0.33
  • Ukraine -0.24
  • Belgium -0.23
  • Austria -0.21
Yay for Nordic social policy. If your ancestors were Vikings who conquered and pillaged and enslaved other people, then you live society that’s fairer than you would expect from your wealth. Ukraine surprises me. Austria doesn’t. But #10 on the list is Senegal — not a wealthy country, but doing much better for social mobility than you would expect.

If you are above the line (positive residuals), that means that your country has less social mobility than you would expect from its wealth:

  • Saudi Arabia 0.49
  • Panama 0.45
  • Turkey 0.43
  • Singapore 0.29
  • Ireland 0.27
  • South Africa 0.26
  • Greece 0.23
  • USA 0.23
I think that breaks down into two or three groups:

  • Countries that have by accident of geography natural resources far in excess of what would be expected makes them wealthier than they really “should” be. Saudi Arabia and Panama seem obvious candidates here; maybe htis applies to Turkey and Singapore?
  • Countries with inflated GDP figures from tax-haven status (Ireland). Maybe this is also part of the Singapore story?
  • Political failure to share wealth equitably (South Africa, Greece, USA).
Australia, New Zealand, India and China are pretty much exactly on trend. That’s a bit surprising, you would expect Australia to have the Saudi Arabian curse.

Further for the stats nerds: the residuals look pretty much normally-distributed, so that suggests that the remaining effects are a bunch of independent factors (probably politics, culture, things like that). Normal distributions don’t happen very often unless it’s a mixture of factors. No one factor is likely to stand out, so there’s probably more to it than what I put in the previous section.

Lastly, but not leastly…

The evidence is clear that AI delivers at least a 25% productivity improvement for white collar workers. That is surely an underestimate of the long term gains. Katja Grace’s survey shows a lot of potential productivity gains from AI taking over jobs:

That would definitely boost GDP per capita, because the AI’s don’t count as people. (For some of my silly poetry on this topic… )

What happens then?
  • Do we see social mobility improve everywhere? People who can identify ways that AI can do something useful are likely to move up in society very rapidly over the next few years; those that can’t (or choose to ignore AI’s impact on their businesses) may well see their wealth eroded very significantly. That’s a very plausible mechanism for a significant jump in social mobility.
  • Or will we see the relationship between GDP and social mobility weaken? If having access to AI models is like having an unexpected natural resource (e.g. like Saudi Arabia or Panama) then ossification might happen in those countries: AI owners would have stratospheric wealth.
Either way, it’s a receipe for political upheaval. In the first case, the elites change; in the second case, the elites end up with vastly more power.

No comments:

Post a Comment