Abstract
This chapter discusses the character of the new technology and identifies the decisive drivers of the particular dynamics of change in the economy and society. It outlines why the digital transformation is a process that is at least as far-reaching as the industrial revolution, and possibly even more so. It shows how it challenges economic considerations and how this book aims to address this. The chapter introduces a normative element, namely that the economy, although it should not be centrally steered or planned, should serve people and society and clarifies the connection between values, economic order and the task of economic policy.
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Notes
- 1.
Of course, this understanding has always been controversial per se. And the opposite view is undoubtedly the one that dominates the academic course of thought. The list of its proponents would be long and famous; the claim to be able to treat simply everything with instruments of mainstream economics, i.e. the neoclassical strand, has become known as “economic imperialism” (a term coined by Ralph William Souter in 1933), of which Gary Becker is a good example: “I am saying that the economic approach provides a valuable unified framework for understanding ‘all’ human behaviour” (Becker 1990, 14). Hirshleifer (1985, 53) even speaks of “the universal grammar of social science”. Now, one should not belittle the intellectual achievement of economic imperialists, but one should by no means share their confidence. From a serious scientific-theoretical point of view, the situation is unfortunately less clear (the fact that the no less “successful” and no less high-sounding linguistic universal grammar—to stay with the image Hirshleifer chose—is considered obsolete should give pause for thought). I have discussed this problem in detail in another contribution with regard to a specific methodological question (Dötsch 2022). This book takes a different standpoint: namely that the problem determines the method, not vice versa. This should—in order to avoid a detailed discussion of methodology, which would take up a book of its own for a comprehensive presentation—become plausible in the course of this chapter.
- 2.
Not only is physics well acknowledged, but the attitude of some of its representatives is similar to that of certain economists, e.g. well expressed in Rutherford’s famous quote: “All science is either physics or stamp collecting” (quoted after Ratcliffe 2016).
- 3.
For the sake of completeness, it must be mentioned here that the problem mentioned in the first footnote also applies to this statement. For it could be critically objected that no one describes any “facts”, but rather interprets something on the basis of certain methods—no “facts” without a method! This problem of scientific theory will not be solved here. But it is part of every science and every discipline that with every further step in the specification of its abstractions it must at some point arrive at a level of general comprehensibility. The facts about which one can speak in two languages (to use Hirshleifer’s metaphor again)—or not—remain unaffected by this, however. Those who deny this get bogged down in an endless constructivist regress that is not particularly fruitful.
- 4.
I owe Dietmar Meyer the hint that this is perhaps not to be taken entirely seriously, because even the Latin number system represented different digits with differently inclined strokes. Either way, it is certainly not the case that the more precisely one describes the origin of the way of coding, the better one would understand today’s digitalisation or the “digital transformation”.
- 5.
Admittedly, the discussion about the cyclicality of economic and social developments is extremely broad and cannot be reproduced here. The scope and duration of such patterns of change, which are perceived as cycles, are assessed differently. A general purpose technology is not a necessary prerequisite for such cycles and they are not always associated with the name of the pioneer Kondratieff, whose name is used to describe long-term patterns of great significance. Shorter cycles are discussed, for example, under the name of the Juglar cycles, which can again be treated in the context of longer-term developments. See, for example, Grinin/Korotayev (2014).
- 6.
This is a problem area that will be touched on several times. With regard to the possibility of substituting human labour, see above all Chapter 8.3.1 and the footnotes there.
- 7.
Even if this is probably less relevant in practice than one might like. The author of this book posed the following question to the artificial intelligence CHATGPT on 18.05.2023: “Can you help lonely people overcome their problems, because these people believe that you can empathise with them?” One sentence of the answer read: “I can certainly empathize with people and provide guidance based on the information and knowledge I have been trained on”. The reaction on the human side doesn’t seem to make much difference either, at least this is what CHATGPT has registered as follows: “People often express their gratitude to the developers and creators who have designed and built AI systems like me. (…) It’s heartening to know that people find the interactions with AI helpful and meaningful in their own ways”. It depends from one’s point of view whether this is rather disheartening or not.
- 8.
Of course, the extent to which digital technology can imitate human intelligence and thus absorb the economic factor of human intelligence will be discussed in more detail later. This problem will be encountered several times, but in the chosen perspective of this contribution it is particularly virulent in the area of labour markets and will therefore be focussed on in Chap. 8, especially in its third sub-chapter.
- 9.
The calls for this in the public sphere in the Western world seem to be getting louder at times, and the state quotas in the developed countries also seem to offer an indication that the public sector already steers considerable parts of the economy. A discussion of how much central steering and planning is still justifiable would go beyond the scope and is also not the subject of this contribution. We assume here that no better form of social coordination than markets has been found so far to solve the problem of scarcity. The extent to which digitalisation influences the forms of coordination in detail is the subject of this examination. On the fact that digitalisation sometimes leads to very optimistic assessments with regard to the central possibilities for central planning, see Sect. 4.3.
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Dötsch, J.J. (2024). The Digital Transformation as a Starting Point. In: Economic Policy in the Digital Age. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-031-53047-0_2
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