The discussion at the core of
[amazon_image id=”0393239357″ link=”true” target=”_blank” size=”medium” ]The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies[/amazon_image]
The book has three parts. The first describes digital technology, explains why it is only now that its consequences are becoming dramatic, and describes some of the impending technological advances. There is a useful survey of (mainly) robotics and AI advances, and a very clear explanation of ‘why now’ when computers and the Internet and even the web have now been around quite a while. The timing is partly due to the nature of exponential doubling. Moore’s law says computing power roughly doubles roughly every two years. If you start with one grain of rice on one square of a chess board and double it for every successive square, it isn’t until the second half of the chess board that the number of grains soars to an incomprehensible degree. It is also due to the need for organisational and infrastructure investments alongside technology investment. This section draws on the work of economic historian Paul David as well as Brynjolfsson’s own excellent work on how firms use the technology to increase productivity, by reshaping processes and work. In short, human institutions move far more slowly than technology progresses.
The second part of the book divides the consequences of technology into two types, which the authors call bounty and spread. Bounty is the potential for human progress, the almost science-fiction fruits of technology that are just starting to emerge in fields from medicine to driverless cars. By ‘spread’ they mean inequality or dispersion of outcomes. (I found this a counter-productive term as ‘spread’ to me carries the automatic word association of ‘evenly’, as in a million recipes I’ve used over the years: ‘Spread the icing evenly over the top of the cake.’) This section of the book has attracted much attention in reviews and articles. It discusses the well-known underlying economics – skill-biased technical change, Sherwin Rosen’s ‘superstar’ effect, and winner-take-all dynamics when there are high fixed costs and increasing returns.
There is an inevitable tension between progress for many humans and costs for a few humans. For example, IBM is getting its Watson computer to absorb all the world’s published medical information and use it to diagnose and recommend treatments. It would apparently take a human 160 hours of reading time every week just to keep up with the literature. The computer will produce far, far better patient outcomes. But what will happen to doctors’ careers? This is just one of many examples underlining the current angst about the ‘race’ between humans and robots. This is of course also the theme of Tyler Cowen’s excellent recent book,
The Second Machine Age has a chapter on measurement about which I want to get a bit picky, having just published my own book
The third section of the book turns to policies that might minimise the costs of ‘spread’ while retaining the ‘bounty’. The recommendations could be summed up as more and better education, to ensure that humans and robots are complements rather than substitutes, and a minimum income or – better in their view – a negative income tax.
These are obviously valid and interesting suggestions. Do they really address the massive technology-driven structural change described in the first two thirds of the book? As so often, my mind turned to the Star Trek Kobayashi Maru example – a Star Fleet training exercise designed to test the character of a trainee captain in a situation where failure and death are inevitable. But Kirk reprograms the test in order to save the crew. This is where we’re at. We need to reprogram society’s institutions. To use a more topical metaphor, if it rains torrentially for two months, there’s going to be flood water – but the damage it does will depend on the landscape it washes over, the kinds of structures that have been built, river-management institutions.
As
Anybody interested in these questions will want to read
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Diane – Excellent GDP piece.
With apologies to others – seem to have lost your email/contact details. Weren’t we all supposed to be getting together for dinner a while ago? I have an event coming up next week that might interest you and R. Please ping me. Martin
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