Tuesday, July 8, 2014

The Second Machine Age

The authors, Erik Brynjolfsson and Andrew McAfee offer frightening concepts, but hopeful suggestions.  The second machine age is doing what the first machine age did--changing job structure.  Only with the second machine age we are finding machinery that can do more including displacing human labour and even thinking.

One of their basic beliefs is that innovation creates wealth.  The first machine age really got going with the invention of the steam engine by James Watt.
It not only was used for transportation, but also in factories and was adapted in countless ways leading to more innovations.  It is true that new technologies displaced workers, but also true that over time more jobs were created to take advantage of the new technologies.   It is also true that life became more comfortable for more people.

The first machine age mostly reduced physical labour from work.  The second machine age could be said to affect mental labour.  New machines could take over much mental drudgery and figure out many things faster and more reliably.  It has also been economical to transfer many clerical and communication tasks overseas displacing lawyers, office workers and others.

The Second Machine age has speeded up innovations and is forging ahead at exponential speed meaning adjustments are falling behind and machines are taking up a higher percentage of formerly paid for labour.  New opportunities are being developed, but unskilled work is disappearing and wages diminishing.

The authors were stunned by driverless cars offering greater safety now (with a few exceptions that will probably be covered in near future). They had read of all the difficulties surrounding the idea, and concluded that driverless cars would be in the far distant future if ever.  However recently they agreed that driverless cars are already here and will improve.  GPS is only one innovation that made that speeded up their possibility.

Another innovation, 3-D printing has only recently been announced and applications are increasing daily.  The authors expect this one innovation will lead to many more manufacturing shortcuts squeezing out more jobs.

Free internet actually helps the GDP to decline, but in fact people get value out of the internet.  Free access to information/entertainment.  Many people who made their living organizing and selling information will continue to lose their jobs while others leverage free information to make more money or at least to enjoy life more.

We are already at the stage where we don't need as many workers working as many hours to provide all the manufactured goods we expect.  Medium wages have stopped tracking productivity and life expectancy of poorer people in the US is falling.  As a global society we have a problem.  The authors quote Voltaire, "Work saves us from three evils., boredom, vice and need."  Inequality could escalate, we could have have a violent revolution or civilization could crumble.

Education is considered basic.   They noted that Montessori schools have been a foundation for Larry Page, Sergey Brin, Jeff Bazar, key innovators.  The self organizing skills that they encourage are likely sources of innovative success.

Other ideas explored include negative income tax, building infrastructure, encouraging immigration (where entrepreneurship seems to spark) and emphasizing more scientific research.  Their thoughts all have merit, but I am a little disappointed in that the problem they painted seems overwhelming.

Innovations add not only to our wealth, but potentially to our enjoyment of life. There is actually a tremendous opportunity for the future of man, but I fear greed will have to be overcome if the majority of our descendents will be better off than we are.

One last redeeming thought.  Machines don't ask questions, only provide answers, meaning you still need humans to figure out innovations.  So far.

To learn more and take part in discussions visit:  http://www.secondmachineage.com/

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