M.I.T. economist Erik Brynjolfsson explains how technology has affected economic growth and productivity, and how human workers can adapt
Fifteen years ago Deep Blue beat Garry Kasparov in a game of chess, marking the beginning of what Massachusetts Institute of Technology economist Erik Brynjolfsson calls the new machine age—an era driven by exponential growth in computing power. Lately, though, people have been feeling uneasy about the machine age. Pundits and experts seem to agree that the robots aredefinitely taking our jobs. At last week’s TED conference, Brynjolfsson argued that the new machine age is great for economic growth, but we still have to find a way to coexist with the machines. We asked him to expand on a few points.
You’ve written a lot about what you call the new machine age, which you argue is fundamentally different from previous industrial eras. What’s so different about it?
The first and second industrial revolutions were defined by these general-purpose technologies, the steam engine and, later, electricity. The new machine age is defined by digital technologies, and those have a lot of unusual characteristics. First, you can reproduce things at close to zero marginal cost with perfect quality and almost instant delivery—that’s something you can’t do with atoms. Second, computers are getting better faster than anything else—ever. That’s something we’re not used to dealing with, and it’s happening year over year, relentlessly. Third, you can remix or combine technologies in a way that doesn’t use them up, but that instead allows for even more combinations. That means we’re in no danger of running out of ideas. Put those all together, and I’m very optimistic about the future of economic growth and productivity growth. And the data bear that out.
You’ve also said that productivity has become “decoupled” from employment. Can you explain?
Throughout most of modern history, productivity and employment have grown side by side. But starting about 15 years ago they started becoming decoupled. Productivity continued to grow, even accelerate, but employment stagnated and even fell, as did median wages for the people who were still working. This was an important milestone, because most economists, including me, used to be of the mind-set that if you just keep increasing productivity, everything else kind of takes care of itself.
But there’s no economic law that says everyone has to benefit equally from increased productivity. It’s entirely possible that some people benefit a lot more than others or that some people are made worse off. And as it turns out, for the past 10 to 15 years it’s gone that way. The pie has gotten bigger but most of the increase in income has gone to less than 1 percent of the population. Those at the 50th percentile or lower have actually done worse in absolute terms.
There are a lot of causes for this—some of it has to do with offshoring, tax policy and so on—but those are minor players compared with the big story, which is the nature of technology. It’s simultaneously allowing us to grow faster and leading us to a very different allocation of those benefits.
via Scientific American - Seth Fletcher
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