Creating "good jobs" is the holy grail of both politics and economics these days. The problem is that surveys show that most people don’t think they have one. In fact as many as 60 percent of Americans who are currently working say that. So where do we look for good jobs? For three successive presidencies, the answer has been the manufacturing sector, but Harvard economist Dani Rodrick says the evidence now shows that’s wrong. It’s a rethinking for Rodrik, the Ford Foundation Professor of International Political Economy and co-founder of the Reimagining the Economy Program at Harvard Kennedy School, who in the past seen manufacturing as a route to more equitable prosperity. But Rodrik says the evidence has changed his thinking—despite investments and tariffs, factory work is just 8 percent of U.S. employment and falling and even manufacturing powerhouses like China are bleeding millions of jobs in the sector. Now he sees the service industries as the most promising source of good jobs for the future, a position that puts him in the familiar position of outlier, since he was one of the earliest voices predicting the inevitable crash and burn of hyper globalization. Rodrik admits it will be challenging to solve the big problem with service jobs, how to make them productive enough to support good wages and benefits, but he says we urgently need to start asking the right questions and start experimenting with ways to make it happen. He joins Economics for Inclusive Prosperity podcast host Ralph Ranalli to explore those questions and how things like AI and public investment could factor into the answers.
Dani Rodrik is an economist whose research revolves around globalization, economic growth and development, and political economy. His current work focuses on how to create more inclusive economies, in developed and developing societies.Rodrik is the Ford Foundation Professor of International Political Economy at Harvard's John F. Kennedy School of Government. He is co-director of the Reimagining the Economy Program at the Kennedy School and of the Economics for Inclusive Prosperity network. He was President of the Inernational Economic Associationduring 2021-23 and helped found the IEA's Women in Leadership in Economics. His most recent book is "Shared Prosperity in a Fractured World: A New Economics for the Middle Class, the Global Poor, and Our Climate" (2025). His previous books include "Straight Talk on Trade: Ideas for a Sane World Economy," and "The Globalization Paradox: Democracy and the Future of the World Economy."
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Cold Open:
Dani Rodrik: Economics has changed and, in particular, has become much more empirical. It's become less wedded to theoretical preconceptions about, such as, markets will always take care of problems or that the governments cannot ever solve things…
Stefanie Stantcheca: What we do find in our survey work is that fairness matters a lot to people…
Suresh Naidu: …inclusive prosperity meant thinking about democracy and its relationship to economic policy and democratic politics as something that we were committed to…
Atif Mian: …those deeper questions of how we want to organize ourselves as a society, so we deliver not just economic growth, but we also deliver the values that we need to aspire to.
Intro (Ralph Ranalli): Hi, welcome back. I’m Ralph Ranalli, your host for the Economics for Inclusive Prosperity podcast. One of the holy grails of politics and economics these days is a quote-unquote good job. The problem is that surveys show that most people don’t think they have one. In fact as many as 60 percent of Americans who are currently working say that. So where do we look for good jobs? For three successive presidencies, the answer has been the manufacturing sector, but Harvard economist Dani Rodrick says the evidence now shows that’s wrong. It’s a rethinking for Rodrik, the Ford Foundation Professor of International Political Economy and co-founder of the Reimagining the Economy Program at Harvard Kennedy School, who in the past seen manufacturing as a route to more equitable prosperity. But Rodrik says the evidence has changed his thinking—despite investments and tariffs, factory work is just 8 percent of U.S. employment and falling and even manufacturing powerhouses like China are bleeding millions of jobs in the sector. Now he sees the service industries as the most promising source of good jobs for the future, a position that puts him in the familiar position of outlier, since he was one of the earliest voices predicting the inevitable crash and burn of hyper globalization. Rodrik admits it will be challenging to solve the big problem with service jobs, how to make them productive enough to support good wages and benefits, but he says we urgently need to start asking the right questions and start experimenting with ways to make it happen. He joins me to explore those questions and how things like AI and public investment could factor into the answers. Let’s get to it.
Intro: Ralph Ralph Ranalli: Danny, welcome. It's nice to see you.
Dani Rodrik: Nice to meet you with you, Ralph.
Ralph Ranalli: So we're talking about how you see service sector jobs really as the future of the economy in terms of rebuilding the middle class, reestablishing more equity. As opposed to manufacturing jobs, we've really seen successive administrations pushing manufacturing as the panacea for the sort of job malaise we're going through, which makes you a bit of an outlier, which I think is a kind of a position you're somewhat used to. You were ahead of the curve on globalization. And I think that's why I enjoy working with you is I see you as a early adopter of empirical reality, I guess that might be how I put it. Does this feel sort of like deja vu all over again for you? Because this is a significant shift in your thinking.
Dani Rodrik: Yeah, I did. For a significant part of my career, I worked on the importance of manufacturing, how promoting industrialization and manufacturing was critical for economic growth, development, strengthening the middle class. And so in the last five, six years, my ideas on the centrality of manufacturing have changed significantly. So as the saying goes, when the facts change, I change my views. What do you do, sir? I mean, I think we're at an interesting point where policymakers are very reluctant to confront this reality. It's not that they're not aware of it because if you push them on this, I think they're ... I mean, we have the experience in the United States now of three administrations. Trump won, Biden, and then Trump two, the first year or so of Trump two, where there was a very concerted effort at trying to push a manufacturing revival in very different ways.
Trump one was a kind of a baby version of Trump two with some tariffs. Biden, primarily not through tariffs, but through industrial policies that focused on advanced semiconductors…
Ralph Ranalli: …the CHIPS Act…
Dani Rodrik: …CHIPS and the IRA and Build Back Better programs. And then Trump with this sort of pushing tariffs through the roofs in the second coming, you look at what has happened to manufacturing jobs throughout all those three administrations, and you can't tell, just have been continued to drift down. You look at the countries we're trying to emulate, mostly China, which of course is the manufacturing powerhouse. China, of course, continues to increase its footprint in manufacturing on global markets, but employment is just plummeting and manufacturing by tens of millions in China. So there's a big disconnect that even if you're able to engage some kind of a construction boom in manufacturing, reshore some parts of the manufacturing supply chains, that is not going to show up in jobs. And that creates a conundrum. I mean, you don't want manufacturing to be an island in the economy in the same way that oil is in the natural resource exporting countries, a kind of a very high value, but an island.
And the rest of the economy is caught up in jobs that have been traditionally very poor. And for the United States and other advanced countries, those are jobs in retail, in care, in food services. That's where a lot of the jobs of the future are. And so we need to confront that. I think policymakers, when you push them, they're aware that manufacturing is not going to be a source of jobs. And then the conversation then becomes of ... But manufacturing is still important for national security, for the reliability of supply chains, for innovation in certain sectors. And I think all of that is right. But in terms of creating an inclusive economy and incohesive society and restoring our middle class, we can't do it without focusing on where the jobs are going to be and that's in services.
Ralph Ranalli: Right. I mean, you agree that we can't just forget about manufacturing. It has certain benefits that are important.
Dani Rodrik: Let me just say this though. I mean, I think the downside, the cost of not making these distinctions about why is it that we care about manufacturing is that then we overload the agenda for our industrial policies with manufacturing with a lot of goals and objectives that are simply not going to be met. We also open the door to a lot of very self-interested lobbying and rent seeking by manufacturing firms because if they can latch onto this argument that, look, furniture production in the United States is very important or garment production is very important or autos and steel are very important because that's where we are going to test the foundation of our middle class and good jobs. You're giving them a voice, a salience, and influence in the political sphere that they do not deserve. So I think what's extremely important making this distinction is that policymakers understand, yes, manufacturing is important for certain reasons, but we need to focus on what those reasons are and first, therefore, keep our aims and goals well-targeted and selective when we're focusing on manufacturing.
And second, let's keep a part of our mind and our focus on the objectives of good jobs and the middle class, and that requires a distinct set of industrial policies. And when we conflate those objectives, I think we're failing on both fronts.
Ralph Ranalli: Right. I think certain people have a tendency to see manufacturing as almost an end to itself, whereas the end really is good jobs. But the definition, you've said this, that the definition of what is a good job is not necessarily easy to pin down. It's almost like the classic, "Well, I know one when I see one” kind of situation. But insofar as you can, can you tell me what your vision of a good job is?
Dani Rodrik: Yeah, I think a lot of it is the best way to gauge what is a good job is actually asking people. So we have surveys from Pew and from other sources. When you ask people what do they value in a job, what goes into determining the quality? A good part, of course, is obviously salaries, is the wages, is how much they pay, but there's a lot more than that. There's a question about whether they're in control. They have a sense of agency and autonomy, do they control their schedules? Do they feel like what they say is being taken seriously? Are they being simply treated as clogs in a machine? Are they part of just an intensified division of labor where they have no sense of what the picture is and everything is determined from headquarters? So a sense of control, agency autonomy, contribution to the work, I think that's how well they're treated by their superiors.
That's another big part of it. Another is a sense of career progression. That is, is there a possibility of advancement that you can stay on the job and improve, become better at it, and then you will be rewarded at it, and that there is a sense that you can move up the ladder. And then finally, there's certain sense of job protections and job security and those aspects as well.
Ralph Ranalli: Yeah. I think you mentioned in your book that there was one survey which sort of asked 10 questions based on those criteria that you were just mentioning and asked for responses. And I think the survey found that 60% of the respondents said they did not have a good job. So it seems like we're really starting in a position where we're fairly far behind.
Dani Rodrik: Yeah. Today, basically, these kinds of surveys suggest that about between 60% of the respondents tend to not think that they have a good job. If you ask them, "If you lost your job today, what's the chance that you will find a good job?" That likelihood is even lower. So there's a sense of foreboding, a sense of anxiety and worry about the future. And finally, I think just reinforcing that is that the incidents of bad jobs or low quality jobs is much higher precisely in the largest occupations of the future, care, retail, warehousing, food services, and other personal services. And that's really my main concern is that we're just not preparing for that world.
Ralph Ranalli: What's the fallout that we've already seen from the fact that so many people don't feel like they have a good job, they don't have the dignity of work? What's spillovers into other areas like the political sphere are a result of that?
Dani Rodrik: I think the consequences go beyond simply just economic inequality over high rates of joblessness. I mean, economists look at what's happening to unemployment race, or if you think that a lot of people are getting discouraged, what's happening to rates of joblessness among prime age workers, but those are sort of economic indicators. You can look at ... There's work by sociologists. And my former colleague here, Bill Wilson, was one of the pioneers in this work when he was looked at what was happening in inner cities as a result of the disappearance of manufacturing jobs. And there are lots of social consequences in terms of family structure, family breakdown, increases in mortality, addiction and increased use of opioids, increasing rates of crime. So there's all these features of social enemy that pervade society when good jobs tend to disappear. And then there are the political consequences. I think localities and communities, regions where economic opportunities are becoming thinner on the ground are much more likely to be manipulated by demagogues, by extremists who are pointing to outsiders, whether they're immigrants or ethnic or religious minorities or foreign countries pointing them as the culprit.
And I think it's very easy when in communities they face economic anxiety to turn it into a kind of a us versus them, zero sum understanding of how the world works. And that of course leads to xenophobia, it leads to racism, it leads to political support for populists and ultimately leads to a decline in support for democracy and increase in support for authoritarianism. And all of these things have been documented when in the recent economic literature, when you look at, for example, what are the consequences of the China trade shock in communities that have been most scarred by import competition, but of course with automation and now with the AI revolution, it's just the China trade show could easily be dwarfed by these other changes that are going to hit our markets. If we don't take preemptive action, are proactive about how we're developing and deploying technology.
Ralph Ranalli: Yeah. I think you've said that you view economists maybe contributing to this issue in some way in that they've sort of had a, I guess maybe smug would be the wrong word, but at least in a different attitude towards the societal effects of job displacement. Why do you think that is?
Dani Rodrik: I don't think that economists are the instigators, but they're sort of like the reinforcers or the magnifiers of existing trends. Economists are only too willing to, in general, to lend their authority to whatever existing trend is in the policy world. So I don't think actually economists are leaders in terms of ... So when you go back, for example, historically, it wasn't the fact that we got the social democratic settlement or the New Deal earlier in the United States, it wasn't really economists. It was just pragmatic policymakers reaching new arrangements. And then you have economists who are justifying these things and working within that paradigm. Then we have the neoliberalism after the 1990s. Yeah, I mean, economists were writing about maybe the balance has gone too much in favor of the state and we need to deregulate and we need to let markets work. But fundamentally, it wasn't them that were responsible for the transformation.
It was the changing balance of power in society with financial interest, large corporations, multinational enterprises becoming much more ... And I think it's the same now. I mean, now that the tide has changed, I think the general tenor of economic research has changed as well. But so I think if there's something to be said about economics in general is that we tend to amplify existing fads rather than necessarily instigate those feds. We are not that important in terms of what determines policy and general orientations and general policy paradigms. There are, of course, exceptions. I think somebody like Kains was critical, claims like Adam Smith. I mean, the ideas do make a difference, or you look at the influence of ideas about compensation of managers and how linking them to stop prices and how that changed the ideas of how management compensation should change. And that was very important, but it provides an intellectual scholarly foundation for, I think, something that was also already reflected in the balance of political power in society between corporations and the rest of us.
So on the one hand, I don't think we've been as damaging as many people claim the neoliberalism isn't economist fault. On the other hand, I think we fall too easily into the conventional wisdom of the time and start becoming a scholarly legitimizer.
Ralph Ranalli: Right. Yeah. That sort of leads me to a question I wanted to ask about societal perceptions and their role in this because it was interesting because I was talking to ... On the last episode, I was talking to Iliana Kuziemko from Princeton and Suresh Naidu of Columbia. And we were talking about the Great Compression, but one of the things that they brought up was how COVID, there was sort of a mini compression during COVID and how it was this upheaval that sort of exposed something. And to me, it exposed just how much the perception that service jobs were unimportant was the societal convention and not based in really reality. Because we went from ignoring the person who made us the sandwich to putting lawn signs on our lawn, thanking them and thanking the other service workers for their vital work.
How much do you think it's really just societal perception? And does that give you hope that those things can change if they're not really that deep?
Dani Rodrik: I think there's a lot to that. We were talking earlier about manufacturing. And in people's mind, manufacturing is still thought of as the epitome of a good job, but it's actually not.
Ralph Ranalli: Right. If I'm making somebody a sandwich and I'm feeding them and in the healthcare sector, I'm helping someone be well and get better, how is that less satisfying than installing the same cylinder head over and over in a car engine, right?
Dani Rodrik: Right. So a lot of it is in the public's mind and our social convention. So I think part of this transformation I think will have to be in that narrative and overall views of how important these service or care sector jobs are. So you need many things. You need the changes in our societal narratives and our sense of values, but you need also changes in ... We need innovations in both organizational setups and in the technologies that are used because ultimately what made manufacturing something that lived up to its promise was that it could pay a lot. It could pay more than a service sector job because it entailed more productivity. And I think that's the other part of how we think about service jobs is not simply not deciding as a society as we did during COVID that we should value service sector workers more.
They're doing incredible service for society, but that we need to create the ability as a society to pay them more. And that cannot happen simply by taxing the rest of the society so that we can pay them more. It will have to happen as it did with manufacturing with finding ways in which we can combine simultaneously increasing the quality of the work that is being done, increasing the autonomy agency earning of these workers, but also doing it through means that means that the quality of the service they're providing, the productivity with which they're working is also enhanced. So that becomes then reinforcing and you're not shifting the cost to consumers or you're not shifting the cost of taxpayers because otherwise it becomes a purely distributive struggle between who's getting what. And the only way out of that is finding ways of deploying new types of organizations, new type of technologies that increases job quality, service quality, and service productivity simultaneously.
Ralph Ranalli: So is productivity the big challenge? And I actually like the way that you've approached this because you're not saying, oh, I have all the answers. You're really more saying, I'm asking maybe the right questions because we don't have all the answers yet about really how to solve this puzzle of making service sector jobs into what we need them to be societally.
Dani Rodrik: So I think that's right. I think the first step is to start asking the questions in the first place. I do think we have some examples, and maybe I can talk about that a little bit, but starting to pose the questions is very important. For example, you earlier mentioned what does good job mean? Well, actually, when we worry about GDP or we worry about the economy, we come up with a measure called GDP and then we actually measure it. When we worry about economic inequality, we come up with measures to measure it. So I think if we worry enough about good jobs, we'll come up with measures to have a sense of what it is. So that's at getting your mind around it as asking the question is the first step. And without that, you're really swimming in abstractions or without enough focus. The other part is that yes, we don't know this is going to be difficult, but there are lots of experiments and glimmers of evidence that should give us hope.
For one thing, in many service sectors in the last decades or so, productivity has actually increased more rapidly than in manufacturing, manufacturing productivity that has stagnated in the United States and productivity in jobs as in retail in food services has actually increased a lot. Now, the problem is that it doesn't necessarily show up in good jobs because the manner in which productivity has been enhanced is by deploying technologies that intensify the division of labor, treat workers in a worse way, even if wages are somewhat higher at the lower end. So I think because we have not as a society focused on how to deploy technology to help workers as opposed to simply employers. And then in all of these sectors, there are examples like in care, in the Dutch have a care sector where about 20% of care is provided by self-managed teams of about dozen care workers that organize themselves.
They've cut out the middle manager, they use technology to do their own, the billing, the organization, the management on their own, but they've cut out a lot of the fat on the management end that allows them to engage in a much more direct way with the people they're caring for. They have a lot of autonomy in deciding what they do. And it's a system that actually works very well that delivers higher quality care, significantly reduces the cost of turnover, which was one of the biggest sources of low quality and low productivity in care is the very high rate of turnover, which is reinforced by the low quality of work. And then you can break that cycle, and you can do much better. And there are examples like such the Dutch example I'm talking about is called the Boots Org. And the difficulty is that it's very difficult necessarily to transplant those.
And I think every locality, every country has to start experimenting in its own way, find the kind of organizational models that will work well. And so that's where you have to choose a policy direction to begin with not presume that we already know the answers before you're going to move in that way.
Ralph Ranalli: Yeah. And I think you said that sort of cucked into all that Biden manufacturing stimulation was actually a pretty decent beginning in terms of experimenting with models of this sort of innovation. Can you talk a little bit about that?
Dani Rodrik: Yeah, I think one of the Biden programs that I'm the biggest fan of was the regional challenges. So they set up, I think, a billion or a couple of billion dollars under the Build Back Better program to essentially incentivize different localities to compete for these fronts. And the basic message was, look, there is a pot of money. You can get some federal grants. If you're able to develop a local cross-sectoral alliance that might involve business leaders, workforce development leaders, the Chamber of Commerce, maybe your local community college or local university, develop a plan for how you're going to move on in this world and a new vision of economics for yourself and tell us where you will need to spend the money. And so the idea was to, the money was the carrot, the incentive to get localities to develop and to coalesce around a set of goals and a vision for the type of economy that you want to be.
So I think that's a good model for the federal government to try to spur experimentation at the local level. It's an important beginning, but again, it falls short in many ways as well because first, the amount of money was very low compared to, we're talking about a couple of billion dollars compared to 50 plus billion dollars on semiconductor manufacturing or literally hundreds of billions of dollars in tax credits for IRA. And the second is we still have to work to do to understand what this term local capacity really means because what you want to do is essentially the communities that are lagging behind with lots of joblessness to be able to coalesce around these goals and develop the coalitions that can generate a vision and coordinate. And often the problem is not the lack of money, but the problem of that kind of local capacity. And so we don't know enough about what determines that capacity and how to develop it.
Ralph Ranalli: Yeah. But you did say one of the advantages of this service-based model is that it's a bottom-up strategy. Yes. And it might not be highly productive, but it's at least more productive, but it's also more inclusive. Can you just walk me through how that works?
Dani Rodrik: Yeah. So I was saying earlier that having a kind of a manufacturing focus, ultimately like having a vision of your economy that would turn it into a petro state. So what's the defining feature of a petro state is you have a very capital intensive technologically advanced sector that produces a lot of value that's a natural resource or oil, but which is really absorbing a tiny, tiny percentage of your labor force. And the hope that that can provide prosperity for the rest for the 95% of the workforce that is not directly working in your oil sector is that you find mechanism of trickle down. Maybe you take taxes and provide transfers or you provide public sector jobs, you create makework, and that's neither economically very attractive nor politically and socially very, very attractive model. It's a trickle down is kind of an extreme form of a trickle down model.
Today in the United States, 8% of the workforce is in manufacturing and it's falling. So we're not so far. So if our focus is going to be on manufacturing, essentially it's going to be developing our own version of a petro state, a very tiny sliver of very productive, very capital intensive, technologically very advanced sector, and then we rely on that sector to generate the resources to trickle down to the rest of ... So that's not a good model. So that's why I say that services, certainly you cannot get as rapid economic growth in services as you can with a manufacturing focused strategy, the same way that an oil sector, an oil-based economy can get rich overall, much more rapidly by selling on world markets, but the question becomes, what about the rest of society? So the trade-off is that you can create a more inclusive, more bottom-up, spread the benefits of productivity across a broader spectrum of workers, even if your overall GDP is not growing as rapidly.
Ralph Ranalli: So your petro state example sounds suspiciously like what a lot of the tech titans are predicting as the AI future. Exactly. They're very concentrated, nobody's going to have to work anymore, was give people some transfers or…
Dani Rodrik: …exactly…
Ralph Ranalli: ... UBIs and…
Dani Rodrik: That's why those people like UBI so much because it's their answer to, well, what will happen to the vast majority of people who have been displaced by these new technologies and AI and their answer is, "Oh, So they'll just get a transfer, they'll just get a check from the government. And maybe I'm not a hundred percent against UBI. I think in terms of setting a floor, it might have a role to play. I also don't think necessarily that everybody has to have a 35-hour, 40-hour job. I mean, I think we can have a lot of flexibility around that too. But a society in which basically all jobs are being replaced by AI or by machines, I think is a dystopian society.
Ralph Ranalli: How else do you think AI is going to affect the labor force in a way that is going to have economic and political ramifications for what you envision as the transfer to service jobs? I saw one estimate of 20% job loss among white collar, lower level and entry level white collar workers over the next five years. First of all, do you put stock in those kind of estimates or do you think they are sort of overblown, but do you see a major shock pushing this one way or the other?
Dani Rodrik: I mean, it's definitely a major shock, but I think we make the mistake by framing the question as what will AI do to us as opposed to how will we use AI? And I think that's a very different ... I think a lot of these estimates and a lot of discussion around AI is framed around the question of what will be the consequence of AI? What will AI do to workers? What will AI do to us? Well, AI is a tool and can be used in very different ways and how it's used is under our control should be under our control. And unlike robots or automation, for example, there's nothing inherent in AI that makes it labor displacing. With a robot, if you're just putting a robot in a factory, it's just taking lid place or workers. There's no other ways that you can ... Even there, you have a little certain amount of flexibility as many manufacturers have found that it might be more productive to use instead of fully automated robots, use what's called collaborative robots, which are cobots, which are smaller and actually helping workers do their job and complimenting what they're doing rather than simply taking their jobs away.
But that idea applies in a much bigger way with AI because AI in principle is able to provide the knowledge and experience and skills of the most sophisticated and the most experienced workers and make it available for those that are less skilled, less experience. And so the whole idea with AI is actually it can make lower skilled workers typically trapped in low quality jobs, might make them a lot more productive and give them the ability to do tasks and perform things that they weren't able to do before. So for example, in care, which is again, the big, big question mark here, because I always keep coming back to care because it's going to be the single biggest occupation in the United States and advanced countries. One model is you replace care with robots to provide some version of assistance and humans touch with some kind of a robot.
And some countries are actually trying to do that because of this perception of there's a shortage of care workers, and the way to go ahead is just put in robots. But we don't have a shortage of care workers really. We have a shortage of high quality care jobs, and that's why people don't go into care. So with these new technologies like AI, it's possible to do things like point of care diagnostics where care workers are engaging in the type of jobs and the type of work that previously only a registered nurse or a nurse practitioner or even maybe a physician might have been able to do, but now they have on their fingertips the tools of AI to make decisions and to engage in diagnostics that they will not have been able to do, maybe in connection with some kind of a remote operator who might have more education and skills and so forth. But we can reimagine all these jobs in ways using AI that actually turn them into more productive higher quality jobs while increasing the productivity of service. But we will need to invest in thinking along those ways because it's not quite clear that employers or the innovators have the incentive to do so.
Ralph Ranalli: Right. So I think that's the other $64,000 question is, what mechanism is there to assert some public or regulatory control to push these technologies in a way that make them more worker-friendly, more worker enhancing, as opposed to just simply worker displacing and inequality enhancing? Is that the government? Is that ...
Dani Rodrik: Yeah. So the details depend very much on the type of sector we're talking about, also the country context, but there's two broad areas where we need to move in. One is clearly enhanced worker voice. So even in manufacturing, you did not get the benefits of higher productivity showing up in higher wages and better work conditions until workers got organized and you got unions and collective bargaining. So that's absolutely a must. Workers have to have a voice in the way that organizations work and the management of work or the organizational work are the type of technologies that are deployed and how they work. So that's number one. The number two is you do need, I think, a kind of a public push, a dedicated push in investment in the types of technologies that are from the get- go, worker-friendly. So I think we have the DARPA/ARPA scheme in the United States where a public sector very effectively invest in frontier technologies with clear dedicated goals in mind.
Of course, it started with defense-related technologies with DARPA, that was the origin, but then we have newer versions in energy efficiency, or we have it in public health. And so I think we need a version of that that's also focusing on worker-friendly technologies in these all very large occupations, and to work with the start from how can we develop and disseminate these kinds of technologies that are going to enable service sector workers to increase quality of service, increase the scope of decision-making autonomy that they have access to, increase the range of tasks that they're able to perform, and work with industry and technology stakeholders to get them to think in those terms. I think that's where the public sector initiative along ARPA lines, I think is extremely important.
Ralph Ranalli: Yeah, I think you called it “ARPA-W.” At what levels do you think of government do you think that's feasible right now? Because I mean, I think what we're seeing is sort of the opposite. We're not seeing government dictate to the tech sector. We're really seeing the tech sector dictating to government. And so does it happen at the state and local level, or do you think there's a political ... Say there is a big AI upheaval, a lot of people lose their jobs to AI. Do you think that could drive some sort of societal movement that would tip the balance back towards public control of these kinds of technologies?
Dani Rodrik: I think a lot can be done at the state or local level. In the care, I think states have a lot of discretion on how they're deploying Medicare, for example, and they can certainly work local providers to promote the kind of organization innovation that would focus on increasing the quality of care work, to reducing turnover within the parameters that are set by the federal rules. But ultimately, I think the federal government and national governments typically in the Europe, the European Union will have to take the lead on this because of scale and their ability to deploy resources. And yes, there I do think that we'll need a kind of ... It's the equivalent of how we got a backlash against hyper-globalization. I think we're going to get a backlash against tech control of our national policy agenda. I don't think it's going to happen under the current administration, but it's possible that it'll happen in a future administration.
Ralph Ranalli: And finally, do you see a role ... Because again, when I was talking to Suresh and Iliana and we were talking about the Great Compression, and particularly it was non-R&D spending on military procurement that played a significant role in the great compressions flattening of inequality and creating sort of a robust middle class. Do you think there is a role for government, not just regulation, but direct government investment, say like a Medicare for All, where the government really did step into the healthcare sector and did things like raise wages and force the implementation of worker enhancing technologies. What do you see as the government's role there?
Dani Rodrik: Certainly in care, the government has a huge role because it's already so deeply entangled in the sector that it has a incredible ability to set the rules in terms of the quality, the level of quality. The problem, again, going back to our earlier discussion, the government cannot simply mandate higher quality jobs without running into problems. And the only way you can mandate higher quality jobs and those conditions is to also enable the conditions under which those higher quality jobs can be provided without pushing costs either onto the taxpayers or to the recipients of these services. And that's where I think that kind of technology push comes into play. And I think with its incredible role in terms of setting the rules, in terms of being procurement, government has the ability to stimulate those new technologies and put them into place. But it does require for us to start thinking about those sectors in productivist terms and not simply in terms of a shortage of care workers, which is still how the problem is framed, unfortunately.
Ralph Ranalli: Well, thank you, Danny. This has been a really interesting conversation and I think an important one, an important conversational thread to open up on a broader level. And I hope we've done a little bit in that regard today and that it grows. And I really look forward to revisiting this with you sometime in the future because it's really an interesting topic.
Dani Rodrik: Thank you very much, Ralph. Thank you.
Outro (Ralph Ranalli) Thanks for listening. This podcast is a production of Economics for Inclusive Prosperity, a network of leading economists looking beyond neoliberalism and economic nationalism to answer the question: How do we build a more inclusive, more sustainable, and more prosperous economy for everyone? Our show is produced in collaboration with the Reimagining the Economy Project at the Kennedy School of Government at Harvard University. The co-producer of this podcast is Tony Ditta.Please join us again in two weeks for another new episode, and if you like our content, please share us on social media and remember to subscribe on Apple Podcasts or your favorite podcasting app.