on October 23, 2011
In "Race Against the Machine", economists Erik Brynjolfsson and Andrew McAfee ask the question: Could technology be destroying jobs? They then expand on that to explore whether advancing information technology might be an important contributor to the current unemployment disaster. The authors argue very convincingly that the answer to both questions is YES.
The book is very readable and includes lots of links to supporting evidence (both statistical and anecdotal). The authors do a good job of focusing on how computer technology is accelerating exponentially and how computers are a "general purpose technology", in other words, a special technology that can affect just about anything else and have much bigger impact than more narrowly focused innovations.
I thought a really good example involved automated driving. In 2005, two other economists suggested that it would be "hard to imagine" computers ever being able to handle driving in traffic. Yet, just 6 years later, Google introduced automated cars that did exactly that. The point is that progress in information technology is very likely to exceed our expectations and surprise us in the coming years.
While the problems are laid out clearly, I think the solutions offered are pretty conventional. The authors' call for reforming and upgrading schools, for example, is something that just about everyone can agree on. However, even if we managed to do that (and we are not making much progress), those kids would not enter the workforce for many years, and who knows what technology will be capable of by then?
Our children will face an entirely new job market and economy. Everyone should really read both "Race Against the Machine and also another important book, "The Lights in the Tunnel".
Erik Brynjolfsson and Andrew McAfee have created a powerful, concise and informative discussion of the impact of technology on employment, income distribution and macro economics. Do not be fooled by the title, Race Against the Machine is not a neo luddite treatise on the evils of automation and technology. The title is more about generating buzz and attention than an accurate label for what is in this book -- nothing short of the best explanation of the economy we face in the future and the role of technology.
This book is highly recommended to anyone who wants to understand why we can have a recession, a jobless recovery and growing income distribution inequities all at the same time. This book does a tremendous job steering its explanation based on facts, insights from other economists and thought leaders.
Brynjolfsson and McAfee's basic argument is that we are just beginning to see the long term impact of technology on the economy. The authors highlight this using the analogy of Chinese story where the emperor agrees to pay a servant a grain of rice and then doubling that amount for each square on the chess board. That doubling is the foundation of technology's driving forces embodied in the laws of Moore, Metcalfe and others.
The authors believe that we are just getting to the back half of the chess board where a doubling of technology creates gigantic leaps in capability at an unprecedented pace. These leaps are beginning to displace human work as technologies like IBM's Watson and others demonstrate the ability to handle complex work.
The book is divided into five chapters;
Chapter 1. Technology's influence on the employment and the economy. The first chapter provides an overview of the book and its chapters. Here the authors do a good job supporting their argument based on the observation and ideas of others. The chapter could have been a dry recitation of prior research, but Brynjolfsson and McAfee have described the issue in ways that are broadly accessible.
Chapter 2. Humanity and technology on the second half of the chess board -- discusses the impact of technology on the economy, productivity and employment. This chapter focuses on things that are emerging as the capability of technology has crossed a threshold. The most interesting part of this discussion concentrated on General Purpose Technology (GPT) and how these technologies drive further investment in technology.
Chapter 3. Creative destruction: the economic of accelerating technology and disappearing jobs. This chapter is the most informative as it explains the impact of technology on employment and income Here the discussion of highly-skilled vs skilled workers, Superstars vs. Everyone else, and Capital vs. Labor all explain different aspects of the economy we all live in.
Chapter 4: What is to be done? Prescriptions and Recommendations -- contains a list of 13 recommendations for fostering organizational innovation and investing in human capital, These are two areas where investments can lead to creating new employment opportunities and growth, I will not go over the recommendations, many are ones that you may have heard of in the past, but the authors put these recommendations into a new context.
5. Conclusion: the Digital Frontier -- provides a discussion of the new economy emerging and the impact of digitalization in terms of creating new sources of value and disruption. It is an apt conclusion to the book.
Each chapter focuses on a different aspect technology, the economy, employment etc. in a concise and informative way. The authors take full advantage of the book's electronic form by providing active links to referenced research and opinion. While not accessible when you are disconnected, the ability to quickly jump into some original source material adds to the value of the book.
The book can be easily read in under 4 hours and would be the best use of your time on a long plane ride where you can read and think through the authors ideas and their implications.
Brynjolfsson and McAfee have created a readily accessible, influential and provocative book that should be reaUd by business executives, policy makers and technologist to give them a better understanding of the deep forces at work in the global economy, Some will disagree with the author's recommendations, particularly given that it would be easy to associate some of their recommendations as moderately to the right. That would be a mistake as I believe Brynjolfsson and McAfee have been able to take a relatively neutral view of an economist to these issues.
At $2.99 on Amazon, this book is more than well worth the cost and most importantly your time and attention.
on October 26, 2011
Is the book clear? Yes.
Is the book concise? Yes.
Is the book engaging? Yes.
Is the book onto something? Yes.
Is the book well researched? Yes.
Is the book worth reading? Absolutely!
Why on earth did I rate it three stars then? Stick with me here. Because the book tantalizes with its subtitle that accelerating change is "Irreversibly Transforming Employment and the Economy" but just when the book gets going, Chapter Four falls flat and feels like an economic recipe for a by-gone era rather than a roadmap to the economy of "the digital frontier". As humanity moved from an agrarian society to the pre-industrial and then industrial era, modern economic models took hold that allowed diverse suppliers to rationalize their efforts in a common way and leverage that effort through a common currency. In short, barter gave way to the abstract concept of a general currency that could be exchanged for goods.
In that process, the machinery of "GDP" (consumption) and the corporation became all encompassing. With comparatively archaic tools (in comparison to the machines of 2011), human beings were the primary way of creating products for those same humans to then consume. As we began to enter the "information age" in the 80s, 90s and aughts, we created the early incarnations of "the digital frontier" in the model of the industrial era (i.e. we remade the factory). Two examples: Software titans copyrighted their work and big think tanks erected barriers to their information to maintain artificial scarcity that aids in keeping prices up and revenue flowing. This is regardless of the fact that information, once created, can be shared and distributed in an essentially frictionless way. Bits and bytes are not bound by the same physical rules as traditional raw material like wood or rare earth elements. As we decode the machinery of life (DNA, molecular bonds, nanotechnology, etc), the same will be true for physical things...we'll be able to simply reorder material into a form we want. Early generation 3D printers and tissue regeneration are examples of this trend. Yet we continue to bind these information-era processes to economic models of scarcity.
What we need, and what I was hoping this book would help describe, is a different economic model. An economic model in which the concept of abundance, rather than scarcity, is the central driving force. We have an abundance of people willing to work. We have an abundance of information. We have an abundance of things that need to be done. We have an abudance of ability to connect it all together. We have an increasingly abundant ability to create stuff for virtually free. We have 7 Billion people on the planet for whom our moral and social compact drive us to provide them with shelter, food, and health care yet we have an economic model that rewards hoarding and selfishness and creating products that produce huge profit margins when equally good, or better, and cheaper solutions exist. The successful economic model of "the digital frontier" will decouple supply and demand. Profit on the supply side will be driven by those who can create the most social value at the lowest cost (housing for free for example). "Pay" on the demand side will be driven by rewarding human beings to remain active, productive, engaged, and learning rather than trying to "race [the] machine". And, no, I don't mean Communism, I mean a capitalistic system with different measures and rewards.
There are numerous alternatives to a GDP-based economic model that have been put forth. Examples include "Gross national happiness", "Continuum Development Index", and the "Sharing economy" to name just three. Search for alternatives to GDP for others. Yet "Race Against the Machine" did not explore any of these as possible roadmaps to a world where humans' "requirement" to "work" becomes obsolete. With that said, the book serves as an excellent reference for why these trends are happening and why they are irreversible. Everyone should read this book and then help create an economy of abundance!
on April 15, 2012
Automation is a complicated problem that has been subtly advancing toward a kind of critical mass for a very long time. The authors here are correct in noting its acceleration over the last few decades, but perhaps I should say I believe the people the authors quote to be correct, since this book does very little of it's own heavy lifting, and little heavy lifting at that. Don't get me wrong, I'd welcome a synthesis of current thought on this predicament even if it didn't have an original bone in it's body. In fact, that might even be better than one more true believer economist with another prediction of the future. However, at 70 pages this "book" is not prepared to deal with anything comprehensively. 75% of it is reference to other people's work, borrowing from better books, quoting statistics or just stating the obvious. I can't think of anything to recommend it over other books on the subject. Like some other reviewers, I read Martin Ford's "Lights In The Tunnel"(which this book references) and thought it dealt with this subject matter far more realistically and with enough depth to add something to the discussion.
The initial chapters of the book attempt to lay out the problem, but only in the most general way. You won't be coming away with a wide knowledge of the specific fields under the direst threat from automation. There are some specific examples but few are likely to be news. Watson the computer plays Jeopardy and wins, Google cars drive around without people, Moore's Law of accelerating growth is explained, etc. Then on come the statistics to show us how job growth has diminished, how GDP has detached itself from household income and how all but the most extensive, specialized education is declining in value. All of this information is quite disturbing, so what is to be done?
I was amused to see that most of the prescriptions at the end of this forward thinking little book had such a familiar ring to them. How fortunate that this is merely one more modern problem that can be solved by market deregulation, lowering taxes, worshiping entrepreneurs and an all systems grow approach. Perhaps this is where a deeper and more expansive survey of the situation might have been useful. This book seems to carry on within a topical vacuum, but in reality the subject matter certainly does not. Some of their suggestions are so nonsensical that I might've stopped reading if I weren't so close to the end. The idea that a significant portion of the population could become software entrepreneurs in order to procure a stable income is ridiculous. Were this to happen as prescribed, then supposedly even more people would begin to participate in the fabulous "superstar" style wealth available with a global market at the touch of a button. That this is possible for a very few is obvious, just as it's obvious that it's not possible for most. Ok, Ok, wait, hear them out - It wouldn't be ridiculous if we fixed the broken educational system, enabling all students to get the equal and intensive high tech training they need to compete with their parents inventions...by inventing their own things to sell...for their kids to compete with. Of course, this suggestion is unhampered by the fact that we've been trying to fix the USA's lousy educational system for, what? Decades? Centuries? And never mind the archaic, enfeebled plea that their may be some possible goal for education beyond success in the market. Then again, maybe there isn't when a poor fellow's got to be out there 24/7 selling Apps just to survive.
A few suggestions seemed reasonable, such as offering green cards to foreign students when they complete advanced degrees. I'd also have to agree that heavily reforming the patent system and copyright law will be crucial if there is to be any hope of our economy coping with the digital world. These prescriptions were only allowable in that they fit with the authors' general answer of utilizing technology to compete with technology, which is fighting growth with growth.
The elephant in the room here that, like all good "digital optimists", the authors refuse to even acknowledge, is that the race against the machine is really the race against ourselves. Like so many these days, they have long since acquiesced to treat technology as essentially a force of nature, autonomous and beyond control. Maybe that IS the most realistic perspective now; maybe I'm the one being overly optimistic to imagine that we could still exert some decelerating or critical influence over it. However, it seems to me that as long as there is an economic imperative to undercut the cost of human labor, automation will only continue it's advance, ever broader and faster. I'm not making an argument here for keeping humanity's nose to the grindstone for all time, but let us be honest about who's benefiting from these "advances". Unless you are the owner/shareholder, you're looking at layoffs or hyperemployment here, not more vacation days.
The authors admit that there are limits to entrepreneurial innovation, and even if there weren't, the exponential growth of technological power will eventually exceed a speed at which humans could stay a step ahead by innovation alone. Indeed, short of a complete reorganization of our global economic system (hardly conceivable without some enormous catastrophe setting a new precedent) any great strides made by our remaining uniquely human faculties are only likely to spur more concentrated attempts to automate in that particular area. Given that machines have already conquered so many realms once thought categorically human, it seems very naive to assume that any of those remaining with be off limits indefinitely. This should all make for excellent political fodder in the coming years; I'm sure we can all look forward to myriad impotent, partisan psuedo-debates as income and opportunities continue to mysteriously vanish.
Despite this book, this is an extremely important subject, especially for anyone entering college or the job market. Legal aids, radiologists, journalists, truck drivers, research assistants, retail workers and many more are all going to have diminishing prospects in the coming years, some sooner than others. For your own security, it's best to start becoming familiar with this problem now.
on October 23, 2011
Brynjolfsson and McAfee crisply present a hypothesis on America's jobless recovery, declining median income, and growing income disparity - and point their finger at structural changes induced by the Moore's Law growth and application of computer technology to core economic activities including finance, manufacturing, and sales. This is an important book that should be read by interested citizens as well as economists, business executives and politicians who aim to keep their jobs.
Their hypothesis isn't based on a cheerleading hurrah for technology, but thoughtful observation on how computer based capabilities - doubling at Moore's law rates for decades - have enabled changes to the operational models of business, and the economic effect of these changes.
Examples (some of are mine) include: efficient and systematically optimized offshore production combined with low cost and high volume sales (think Walmart, Home Depot); disintermediation or destruction of local business (add bookstores and specialty merchants versus Amazon); Securities trading and hedge funds dominated by millisecond response trading programs; Creation, packaging and sale of financial instruments that are intentionally too complex and systematically risky to understand, but far too easy to sell in a deregulated environment (from Enron to Credit Default Swaps, to Occupy Wall Street).
Computer technology investments improve productivity - but the workers who are fired or downsized go beyond the good paying and secure manufacturing jobs which built a strong middle class in developed nations through the end of the last century. Displaced workers include local merchants, sales people, bank tellers, clerks and more. They cite John Markoff's March 2011 NYT story where "according to one estimate, moving from human to digital labor during the discovery process could let one lawyer do the work of 500."
The cost savings of increased productivity are real, as are the innovations in core processes - but they can increase rather than decrease middle class employment, increase income disparity, and in the financial sector increase the dominance of institutions too big to fail.
For banking and finance, you only have to listen to Occupy Wall Street - or elements of the Tea Party - to recognize the pain caused by a combination of sorcerer's apprentice financial mechanics and trading in an era when many of the most important regulatory controls have been lifted. The transfer of wealth from mortgage holders, governments, and citizens to financial institutions too big to fail and those who benefited from that bubble beggars the imagination and the economy.
This is a hypothesis, not (yet) presentable as economist's model - but it identifies structural elements that put computer technology squarely in the class of what economists call General Purpose Technologies (GPT) "... a small group of technological innovations so powerful that they interrupt and accelerate the normal march of economic progress. Steam power, electricity, and the internal combustion engine are examples of previous GPTs." Like frogs in the pot of water on the stove, we have been caught unaware by the effects of enabling technology that doubles at a Moore's law rate - and it's uncomfortably hot now.
Brynjolfsson and McAfee end with cautiously optimistic notes on how GPT capabilities eventually lead to increased competition and broadly based economic growth. That's what has happened in the past.
Unfortunately, I believe the economic situation and the US's venal politics are also consistent with a "Snowcrash" future for the United States. In 1992, Neal Stephenson's novel was set in a Los Angeles no longer part of what is left of the United States with "... only four things we do better than anyone else: music, movies, microcode (software), and high-speed pizza delivery."
In my opinion, if Brynjolfsson and McAfee are right, we need to go back to Adam Smith and walk it forward again, looking back to the Standard Oil and railroad trustbusting era of Teddy Roosevelt to get out of our current finance and banking mess which holds us all at its mercy. Read this book.
on July 27, 2012
The first three chapters of this book are great. The fourth and fifth are delusional. Hence three out of five stars.
The diagnosis of the problem of advancing technology, which is covered in the first three chapters, is persuasive. It is welcome wake-up call, even if a belated one. However the problem is not just change; there has always been change. It is the speed of this change.
What is remarkable is that the authors use a striking analogy, the second half of the chessboard, to illustrate the latter point, but then singularly fail to follow up on the implications of their own analysis. Ray Kurzweill refers to a `knee point', a point where change suddenly dramatically alters its trajectory. We are now well past the knee point with ICT and the disruption to existing economics and, one might add, ideas about economics, is coming down the track like an accelerating express train.
Having made their point about the exponential speed of change (and with some force), what do the authors suggest? A catalogue of well worn and highly debatable ideas (not to say hyperbole) about on-line education and a series of sometimes tinkering-at-the-edges policies that, even if you could get them through the political system in a reasonable time-frame, are not going to be anything like enough to solve the problems we already have, never mind those en route.
One hates to invoke Charles Murray at a time like this, but maybe it is time to re-visit The Bell Curve. Only a small fraction of the population are entrepreneurs and a larger, but still fairly modest fraction have the type of aptitudes and skills necessary to exploit ICT and set up a micromultinational in the way envisaged by the authors. This type of windy thinking is worthy of Thomas Friedman at his most pompous.
The almost manic cyber optimism at the end of the book is depressing because one would have expected something more measured not to say more radical. I am as much a technophile as anybody, but I do not kid myself that the problems of income inequality and distribution are going to be solved by changes in the education system, even if that could be done which seems increasingly improbable.
It is not that the ideas here are bad; they are not. America (and the world) would be a better place were all 19 of them to be implemented in the morning. But they are not enough, not nearly enough. We need to think a lot more deeply about this problem and well beyond the solutions proposed in this book.
on October 29, 2011
"Race Against the Machine" presents a very cogent picture of both the economically beneficial and disruptive impacts of information and communication technology (ICT). The authors make a great case that, with the ICT revolution, those whose jobs are eliminated as a result of rising technology will not necessarily be so easily able to find employment and to be absorbed into the economy, as it was in earlier major economic transformations like the industrial revolution. It's a dangerous assumption that that will continue to be the case. They also briefly mention that even the economic dislocation (the "race to the bottom") caused by globalization is itself a result of the ICT revolution, because globalization in its current form depends on communication networks and IT-based logistics. Other reviewers have also mentioned "Lights in the Tunnel" as another work pointing out many of the same issues. Both are worth reading, though I think "Race Against the Machine" is better written and documented, and employs much more easily digestible metaphors for understanding these matters.
Like some other reviewers, I was disappointed with the prescriptions for how society can cope with the rise of technology and the displacement of both unskilled and highly skilled human labor. I felt the same way about "Lights in the Tunnel". These prescriptions may generally be good -- I am not so sure about some -- but they seem far too weak to adequately cope with what this book indicates will inevitably be coming. I think the authors have seriously underestimated the extent to which our economy and social institutions are ultimately going to have to be restructured to cope with the emerging realities. They have also seriously underestimated the social disruption that is very likely going to be a part of that.
I think we are starting to see the beginnings of this already, with both the Tea Party and Occupy Wall Street. A full appreciation of "Race Against the Machine" would suggest that these political movements may not be getting to the bottom of what is causing the very real pain that their members are experiencing. With dislocation and increasing economic inequality ultimately caused by the effects of advancing technology and the resultant higher productivity, with increasing returns to capital, higher-skilled workers, and superstars, it should not be a surprise that those who are feeling the pain are looking for explanations and answers. While I also believe that there does need to be increased government and corporate accountability, that money and politics need to be separated somehow (but how?), and that poverty, unemployment, health care, infrastructure, education, and many other urgent issues are not receiving the attention they deserve in the halls of power, I think this book does a much better job than most of explaining the true source of the structural economic problems we are beginning to encounter.
Somehow we are going to have to transform into a society in which everyone is able to participate and feel productive, to be rewarded for their efforts and contributions, and to be able without superhuman capabilities to obtain the purchasing power to meet their families' basic needs. I don't know what that is going to look like but it seems that the current system is reaching some kind of failure point, and it seems to be in no small part because of the trends identified in "Race Against the Machine".
I do have one criticism of the production of the book: I wish that they would have used more end-notes rather than hyperlinks, because as it is, the book is not really self-contained and so can't be fully appreciated unless read while online, and using the Kindle's web browser is not that much fun. It would be fine if the end-notes contained hyperlinks.
on October 30, 2011
This book challenges the idea that rising productivity is the engine of increasing standards of living and wealth. Increases in productivity are said to elevate the standard of living in three ways:
1. Increased productivity causes prices to fall, thereby increasing workers' purchasing power. Because labor is 70% of the purchase price of most products, reducing labor lowers costs.
2. The people who are put out of work by increased productivity in the old industries will be forced to seek employment in new industries. A free market economy will allocate labor and capital to its most efficient uses. Surplus labor and capital that results from improving productivity in one industry will cause labor and capital to migrate to labor-short and capital-short industries in other sectors of the economy, including those based on new technologies. Productivity in old industries spurs development of new industries.
3. Increasing productivity causes wages to increase. For example, in a machine shop several machinists earning $25 an hour might be put out of work by a computerized lathe. However, an engineer earning $70 an hour has to be hired to program the computerized lathe. Other skilled laborers will be hired to construct the computerized lathe. Thus, the workers who lose their jobs to automation are replaced by higher paid workers building and operating productivity enhancing equipment.
But is the theory correct? After all, every major financial collapse has occurred during times of rapidly increasing productivity:
* During the post-Civil War boom of the 1870s through 1890s the country developed an efficient economy based on the railroads' creation of national markets and national economies of scales. The result was the Depression of 1894-1897 when the military had to be called out to suppress anarchy by rioting mobs of unemployed and the country endured a real threat of a civil war between Labor and Capital.
* During the 1920s the productivity of modern mass production churned out millions of autos, radios, consumer appliances, and a new infrastructure based on highways and electric power plants This was followed by the Great Depression.
* During the 1980s and 1990s productivity was increased by advancing information and communications technologies. This has resulted in the massive unemployment that followed the "Y2K" collapse. Today there is more productivity and less employment in the USA than in decades.
During each of these occasions the economy failed as agriculture, trade, and industry shut down and threw tens of millions out of employment. There was a real fear that all institutions of civilization including banking, business, and the government itself would fail. So how can productivity be good if it puts so many people at risk of unemployment starvation? This paradox of stupendously productive economies pauperizing the entire population has been discussed at least since the 1879 when the book PROGRESS AND POVERTY was published. Now 130 years later we're still talking about it.
The hallmark of a depression is a factory of stupendous productivity that stands idle because the people put out of work by productive-enhancing machinery no loner have money to purchase the products that it produces. How do we reconcile between the diametrically opposing theory that productivity creates jobs vs. the historical and anecdotal evidence that productivity destroys them?
The authors answer this question in CHAPTER 4. WHAT IS TO BE DONE? PRESCRIPTIONS AND RECOMMENDATIONS
Their recommendations are:
* Invest more in education. Pay teachers more money. Make teachers more accountable by paying them for performance, not tenure.
* Increase the H1B program. Bring more skilled workers in here from overseas, the idea being that skilled workers create synergies when they work with each other.
* Teach entrepreneurship broadly as a necessary life-skill, not just in elite business schools.
* Invest in more infrastructure, improving highways and communications.
* Increase government spending on basic research in the health and sciences.
* Lower taxes and regulations on business, so as to increase their incentives to hire.
* Make labor cheaper by eliminating social security taxes. Nationalize healthcare so that companies don't have to pay for it.
* Reform the patent system so that it is easier to file patents.
The authors' apolitical agenda that will appeal to both Conservative Republicans and Liberal Democrats. Liberal Democrats will like the idea of paying teachers more money. Conservatives will like the idea of holding them accountable for performance. Liberals will like the idea of spending more money on hiring their unionized friends to upgrade infrastructure. Conservatives will like the idea of lowering taxes on business and allowing them to hire cheap labor.
However, the agenda is contradictory. Spending more government money on education and infrastructure can't happen unless taxes are INCREASED. Social Security and national healthcare can't be maintained if payroll taxes are eliminated. The authors are advocating a low-wage agenda to encourage more hiring. How are employees going to pay taxes if they're working at minimum wage?
the book made me wonder if we should not take the DIRECT approach of mitigating the effects of productivity displacing workers beyond the rate at which the economy can reemploy them?
* Productivity improves the standard of living so long as it is implemented slowly. The normal attrition rate in employment is about 3% a year as employees retire from the workforce. Productivity improvement enhances employment as long as it puts fewer than 3% of people out of work each year. When productivity improvements put more than 3% of the people out of work the economy will falter. To carry this example to an extreme, suppose it were possible for one machine operated by one employee to produce all the goods and services that are currently produced. In that event we'd have one person working and 150 million unemployed. The economy would fail.
* Productivity increases augment the economy when WORKERS SHARE THE VALUE OF THE INCREASE. Workers should receive pay raises when their productivity increases. However, this is not the usual case. Productivity often puts people out of work entirely, lowering their pay to zero. A person with no income can't afford to buy any products, no matter how efficiently they are produced.
The Great Depression of the 1930s educated the country to the dangers of productivity being misused to destroy employment. FDR's New Deal was oriented toward reducing productivity by exempting companies from anti-trust laws if they agreed to recognize labor unions. Companies were allowed to engage in price-fixing cartels whereby prices were inflated in return for allowing unions to subdivide jobs so as to decrease productivity. This anti-productivity program restored profitability to business and improved wages for labor. The minimum wage was also imposed to induce companies to pass on more of the value of their production to their laborers. These measures restored the balance between capital and labor and set us up for the post-World War II economic boom.
Productivity improvements grow the economy when they benefit labor as well as capital. Perhaps our problem now is that productivity disproportionately increases the wealth invested in capital, while labor is experiencing diminishing wealth as employment opportunities decrease and wages fall.
on January 1, 2012
Every year I have a few books which remake my fundental view of the world. This is one of them. I was blown away with the message, but also appreciated how its delivered. The book is short, precise, and engaging. The writing should make sense to anyone with a college degree, regardless of subject. For those who are trying to understand world trends in technology, economy, or education, I suggest reading this book. Its a 2 hour read and will hopefully change your view of the world.
on December 12, 2011
The authors present a compelling case that technology will severely disrupt the labor market, but then completely wimp out on their policy recommendations. The advice they give sounds like the talking points of any moderate politician or New York Times columnist. They fail to show how these policy prescriptions will do anything to really address the problem, aside from delaying it by a few years. The inevitable conclusion that they gloss over is that massive redistribution is necessary, but this is too controversial so they avoid it.