On redistribution, if the past repeats itself Mark Twain-style, the gap between skilled and unskilled workers could further widen as hollowing-out intensifies. This could bring pressures to reallocate income from rich to poor, from owners to workers (Brynjolfsson and McAfee (2014)). It could also mean the gap between capital (those who own the robots) and labour (those who work for them) shares could widen further. If so, that may require a rethink of the relative roles of capital and labour, not least when it comes to running public companies. At present, owners of capital have the whip hand – no longer literally, but legally – when it comes to running public companies. That is why shareholders are often called, quite misleadingly, the “owners” of a company. This model of corporate governance has served the world well for over a century. But, today, it may not always make for the best outcomes, either for companies themselves or for wider society (Haldane (2015)). And a further tilt in the balance of power in favour of capital could make that situation worse. There are already corporate governance models which strike a somewhat different balance. Interestingly, many of today’s largest and most successful technology companies are in private hands. Even for those technology companies which have gone public, ownership and control has often been separated from financing through dual-class share listings which retain voting rights for the founders and workers.
As it emerges from its most severe set-back since the 1930s the economy remains, to quote Churchill from the 1930s, a riddle wrapped inside a mystery inside an enigma.2 Let me give examples of each. First, the riddle. Data on the economy is riddled with uncertainties and beset by revisions. A few weeks ago, we awoke to discover that we as a nation were £ billion better off than we had thought, courtesy of the Office for National Statistics. Alas, my excitement soon gave way to mixed emotions: this windfall was in part the fruits of charitable, drugs and prostitution-related activities, previously under-recorded. What a party that must have been. A further set of systematic revisions to existing estimates of the National Accounts data is planned later this year. It is well-known, and entirely understandable, that these data are subject to revisions which are to some extent predictable. That is why, before the Bank even starts forecasting the future of the economy, we begin by backcasting and nowcasting the past and the present. To give a current example, although the estimate of first quarter GDP growth is 0.8%, the Bank expects the final estimate to be 0.9% given the strength of business surveys. The 90% confidence interval around this estimate is 0.4% to 1.4%. Put differently, we can be 90% confident that annual growth in the UK economy lies somewhere between 5.4% (a raging boom) and 1.4% (an anaemic recovery). Hence the riddle.