“The Second Machine Age” probes the economic and social dislocations associated with technology, globalization

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Authors: Erik Brunjolfsson, Andrew McAfee
Title, Subtitle: “The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies”
Publication date 2014
ISBN 978-0-393-35064-7 paper
Publication details: WW Norton, 306 pages, indexed, endnotes, 15 chapters
Link: Amazon


The Second Machine Age”, recommended by Fareed Zakaria on his Global Public Square program on CNN two months ago, looks at the transformation of technology since the 1980s through now, as it continues, and at the long term social and economic effects on how people actually live.

One could talk about the industrial revolution and all the advances (from steam engines to electricity, to factory automation, to cars, air travel, modern appliances, space travel beginnings and personal mobility) from about the 1850s until about 1980, and then realize that during the time of Reagan (maybe with the help of Ronnie’s somewhat libertarian streak, and the development of solid state) miniaturization exploded with a revolution in communication, both peer-peer and in self-publication.  A major sub-inflection occurred around 1992 with the release of the public Internet, even though precursors had been in use for a long time.  The rapid changes followed the expansion of computing power stated by Moore’s Law enabling the digitalizing of almost all information.

In the 1990s, one of the most revolutionary changes was the nosediving cost in (digital) reproduction of published materials.  Not only did this drive down the cost of traditional desktop self-publishing but, in conjunction with search engines,  it also enabled speakers to reach a very wide audience through the web with almost no incremental cost.  This opportunity benefited me, as I embarked on self-publishing when taking on the issue of gays in the military (and “don’t ask don’t tell”).  I have gotten flak for not doing enough to sell “instances” of my books (physical copies and perhaps Kindle) rather than let people read it online, because my doing so can disrupt other people’s way to make a living.

The authors point out that the digital revolution benefited consumers, who did not have to pay much for new access to convenience.  Even though people might earn less in wages or other compensation, in terms of real wealth people were often better off.  But this is true whenever there is a rise in the standard of living through technology. The authors ask, are you better off with 2016 goods and services at 2016 prices and incomes, or with 1986 goods, prices and incomes.  For many people, earning relatively less, the answer is the former.  So my own “self-publishing” was arguably adding real wealth, even if it could exacerbate hidden social conflicts regarding inherited privilege or shielding from the risks that others (less fortunate on the economic ladder) must take to earn a living at all. Modern social media (most of all Facebook) replaced the earlier chaotic “dot-com” bubble by expanding mere publication and broadcast and embedding it into the process of social networking, representing online. While social media represented new opportunities for abuse, it probably settled the question that social media was here to stay along with user-generated content, despite the conflicts that “amateurism” with UGC could cause.

But technology also seemed to increase income inequality, largely through globalization, and through replacing some kinds of jobs with computers and automation. Indirect effects made weaker competitors in many businesses drop out, and tended to result in consolidation, with relatively fewer jobs at the top and more concentration of high earnings among the few. The “winner take all” economy developed, with stars earning orders of magnitude more than ordinary people.  Income averages tended to exceed medians, which tended to mean that “ordinary people” had less chance to advance out of mediocrity. While the standard of living for the poor and less well off improved in some areas, like ownership of smartphones and mobile devices, in the big items like housing, health care and education, the poor usually got worse off.

Actually, this seems to be a cyclical process.  Middle class incomes did rise after WWII as old patterns of “extraction” of wealth from labor (from the class societies of the past, so much the target of communist ideology of the past) broke down to democratization (labor unions and civil rights), but this improvement in middle class lives, as experienced in the 50s and 60s, started to reverse with the hyperindividualism associated with the growth of digital technology.

To deal with inequality, the authors recommend a mixture of measures for both individuals and policy makers.  The authors start out by using a great analogy of human conflict – the game of chess. Although super computers can normally beat grandmasters now, in team chess, where both sides have access to computing and database, human grasp of positional strategy still trumps.  The experiments of Garry Kasparov are discussed.  I’d mention that it would seem possible for computers to generate paths of optimal opening preparation strategy for tournaments.  For example, any chess computer system would know that White’s prospects are far better with “1. D4 d5 2. C4” than with the mirror image of “1. E4 e5 2. F4”.  (But, given 1. D4 Nf6 2. C4 e6 it is much harder to say if 3 Nc3 or 3 Nf3 is stronger.)

The authors talk about “ideation” as a needed skill, getting beyond the obvious.  But superior ideation is still likely to reward the few best ideas with billions (Mark Zuckerberg – whether or not he really did invent Facebook one night in his dorm room after a fight with a girl friend, as in “The Social Network”,)

The authors talk about improving education, but with a mash of ideas.  They praise Salman Kahn and his online academy.  They would probably like AOPS and the problem solving videos by robust young math grad students like Deven Ware.  They’re all for improvement of teaching as a profession, but would they go as far as Finland?  What about the homework controversy?

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Their most important ideas seem to be in recognizing the value of various kinds of work.  Many kinds of labor, many of them trade skills involving complex tools, or involving taking care of other human beings, a skill that gets more important as more people live longer with some disability.  The authors talk about libertarian Charles Murray’s 2012 book “Coming Apart”, which sounds like a surprising call for eusociality.  The authors mention Murray’s comparison of “Belmont” with “Fishtown” (Philadelphia working class area), but disagree that it is just about social norms, the problem is that not as many people in Fishtown have jobs, or good jobs, as in the past.  The authors also get into tax policy, and seem to concur with Thomas Piketty (“Capital in the Twenty-First Century”) somewhat that the lazy rentier class tends to be abusive. There may something to my own father’s past moral opprobrium about “learning to work.”

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The authors seem, in fact, to think that structured work is a key to dealing with the social disruptions of globalization.  I don’t see that they have taken up the low wage (like the minimum) much, or Barbara Ehrenreich’s setting an example by paying her dues (“Nickel and Dimed”, 2001). Arguably, it could be important somehow to make what I do in retirement really pay (without cheesy ads or pimping copies of books), because “It’s Free” (Reid Ewing’s little 2012 short film about the public library that sets up this whole issue) can become socially disruptive to the businesses models that provide income for others.  One idea could be that more steady volunteer positions could be funded or paid.  A progressive idea is connecting volunteer projects to retiring student loans, as in this Huffington piece or this Take Part article.

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The authors, however, examine some other progressive ideas, like guaranteed income, or the negative income tax, that can also help (Vox Media has supported these repeatedly).

The authors do discuss the evolution of the sharing economy (ride hailing services like Uber and Lyft;  renting out your house, like Airnbn), as something concomitant with sustainability, and moving away from the idea of personal identity by “collecting things” (in my case, classical records and CD’s earlier in my life). Shared housing is coming to for, as in the New Yorker article by Lizzie Widdiecombie, “Happy Together” (the antethis of “Alone Together“, Sherry Turkle. 2011) by or “dorm life forever”, May 16, 2016.

Finally, the ask whether we could really approach a singularity someday, where robots become conscious of themselves and reproduce.  That may be only way to travel the galaxy.

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It would be well to compare this book to the new “Makers and Takers: The Rise of Finance and the Fall of American Business” , by Rana Faroohar, summarized in her article “Saving Capitalism” on p. 26 of the May 23, 2016 issue of Time Magazine  (paywall link). The villain is “finanicialization”, where Wall Street designs financial products for short term gain rather than infrastructure or “real wealth” investment, because of perverse personal incentives (mentioned criticially by the authors of the main book in this review, above, relating to extracting wealth by debt instruments and derivatives).  But these incentives are somewhat tied to way globalization and digitization affects the value of labors and commodities, while at the same time, as Charles Murray points out, social fabric unstrings itself. Edmunk Contoski had self-pubbed a libertarian, Ayn Rand-like book with the “Makers and Takers: How Wealth and Progress Are Made and How They Are Taken away or Prevented” title (American Liberty Publishers) back in 1997 (also the sci-fi novel “The Trojan Project” filled with constitutional amendment proposals like mine, and a pre-malware telephone virus that is more like a telepathy manipulation and a Windows executable.

(Published: Saturday, May 14, 2016 at 1 PM EDT)