Isaac Chotiner has a short interview with Paul Romer in the New Yorker (May 3, 2020, \”Paul Romer on How to Survive the Chaos of the Coronavirus\”). Lots of interesting comments, but I was especially struck by Paul\’s comment about how the pandemic poses a challenge for economists when thinking about the benefits of specialization and the division of labor. The usual concerns raised about division of labor, by economists since Adam Smith and Karl Marx, is that workers can be trapped for life in mindless repetitive labor. However, Romer raises a different concern about the tradeoff between specialization and resiliency:
The gains from specialization go all the way back to Adam Smith. He talked about the advantage of a bigger market being that we could have a finer division of labor and be more specialized. There’s this great story about the pin factory where people do various different pieces of the job of making pins. So, we’ve been very attuned to the efficiency gains that come from finer and finer division of labor and specialization. What we’ve underestimated is the systemic risk that that very finely tuned system of specialization exposes us to. And so I think we will start to ask whether there are ways that we could build some more robustness into our whole system.
If I can use an analogy, Netflix used this thing they called the Chaos Monkey, which would go in and just break servers, break routers, just take them offline and then make sure that the Netflix infrastructure system could still keep working. I think, from a public-policy perspective, it’d be good if we started having some drills where we just break things, like, “O.K., you can’t import that input into your pharmaceutical process for six months,” or, “You can’t rely on this mechanism.” We may need a little bit of a Chaos Monkey to help make sure that we’re all building a little bit more resiliency into the things that we do.