I have just finished Erik Brynjolfsson and Andrew McAfee’s newest book, The Second Machine Age, which comes on the heels of Race Against the Machine, which this blog covered in 2012. The authors began two years ago with their essential argument in the first book, that automation and productivity have unhinged the future wealth of corporations from the individual well-being of the middle class. In their newest book, they more crisply define just what about recent technology innovation is changing the relationship between innovation, productivity and the fate of the working class. They begin with an appreciation for just how much more quickly technology innovation is directly impacting all aspects of the human experience, from manufacturing with very low-cost Baxter robots to the advent of truly useful Artificial Intelligence systems. Their early thesis is that exponential innovation speedups make it hard for us to imagine how rapidly technology will surpass human abilities in both manual and cognitive levels. Indeed, they extrapolate the effects of the first machine age on manual, routine jobs and make a convincing case for how cognitive, routine tasks may be headed for similar forms of extinction, or at least sea change.
They also dive more deeply into the question of income and wealth inequality than in their first book, in one depressing quote pointing out that the benefits of innovation do not even necessarily trickle down in net effect:
Between 1983 and 2009, Americans became vastly wealthier overall as the total value of their assets increased. However, as noted by economists Ed Wolff and Sylvia Allegretto, the bottom 80 percent of the income distribution actually saw a net decrease in their wealth. Taken as a group, the top 20 percent got not 100 percent of the increase, but more than 100 percent. Their gains included not only the trillions of dollars of wealth newly created in the economy but also some additional wealth that was shifted in their direction from the bottom 80 percent.
This is but one of many statistics that drive home a most basic lesson: the dynamics of wealth are changing in lockstep with accelerating technology innovation. Indeed, the networking and crowdsourcing that Brynjolfsson and McAfee describe leads, in their words, to improvements in standards of living without obvious impact on the GNP. But of course, as we see in analyses such as Digital Labor, this is not wholly true. Our efforts are being harnessed by companies who carve value from our behavior, and this resource harvesting leads, inexorably, to real wealth generation for the few.
In closing the authors recognize that, while Capitalism is not easily replaced wholesale, basic changes in the social contract, long-term, are probably inevitable. They discuss the concept of a Basic Income for all as a way of compensating for the fact that ever-growing armies of automated workers will not be owned by those whom they displace. And they point out the other very important problem we face in our robot future: even with income guaranteed for all, we face the challenge of enabling everyone to feel true fulfillment. Without the energy and direction created by work, we face the challenge of making our lives matter, and this is a problem that may be even harder to solve than elephant in the room: inequality.