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June 27 - July 27, 2019
Now comes the second machine age. Computers and other digital advances are doing for mental power—the ability to use our brains to understand and shape our environments—what the steam engine and its descendants did for muscle power.
mental power is at least as important for progress and development—for mastering our physical and intellectual environment to get things done—as physical power.
The Industrial Revolution was accompanied by soot-filled London skies and horrific exploitation of child labor. What will be their modern equivalents?
“Any sufficiently advanced technology is indistinguishable from magic.” —Arthur C. Clarke
Our brains are extraordinarily good at taking in information via our senses and examining it for patterns, but we’re quite bad at describing or figuring out how we’re doing it, especially when a large volume of fast-changing information arrives at a rapid
Self-driving cars went from being the stuff of science fiction to on-the-road reality in a few short years. Cutting-edge research explaining why they were not coming anytime soon was outpaced by cutting-edge science and engineering that brought them into existence, again in the space of a few short years.
while computers’ communication abilities are not as deep as those of the average human being, they’re much broader.
a lot of the things humans find easy and natural to do in the physical world have been remarkably difficult for robots to master.
As the roboticist Hans Moravec has observed, “It is comparatively easy to make computers exhibit adult-level performance on intelligence tests or playing checkers, and difficult or impossible to give them the skills of a one-year-old when it comes to perception and mobility.”27 This situation has come to be known as Moravec’s paradox, nicely summarized by Wikipedia as “the discovery by artificial intelligence and robotics researchers that, contrary to traditional assumptions, high-level reasoning requires very little computation, but low-level sensorimotor skills require enormous computational
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Today’s factories, especially large ones in high-wage countries, are highly automated, but they’re not full of general-purpose robots. They’re full of dedicated, specialized machinery that’s expensive to buy, configure, and reconfigure.
devices. On Star Trek, tricorders and person-to-person communicators were separate devices, but in the real world the two have merged in the smartphone.
do. Moore’s Law, in contrast, is a statement about the work of the computer industry’s engineers and scientists; it’s an observation about how constant and successful their efforts have been. We simply don’t see this kind of sustained success in other domains.
This computer was the Sony PlayStation 3, which matched the ASCI Red in performance, yet cost about five hundred dollars, took up less than a tenth of a square meter, and drew about two hundred watts.11 In less than ten years exponential digital progress brought teraflop calculating power from a single government lab to living rooms and college dorms all around the world.
installed). The iPhone 4S was about as powerful, in fact, as Apple’s top-of-the-line Powerbook G4 laptop had been a decade earlier.
the Cray-2 supercomputer (introduced in 1985) and iPad 2 tablet (introduced in 2011) had almost identical peak calculation speeds.
The Kinect sold more than eight million units in the sixty days after its release (more than either the iPhone or iPad) and currently holds the Guinness World Record for the fastest-selling consumer electronics device of all time.
Sometimes a difference in degree (in other words, more of the same) becomes a difference in kind (in other words, different than anything else).
That Waze gets more useful to all of its members as it gets more members is a classic example of what economists call a network effect—a situation where the value of a resource for each of its users increases with each additional user.
7 In fact, six of the ten most popular content sites throughout the world are primarily user-generated, as are six of the top ten in the United States.
time. According to a July 2012 story in the New York Times, “The combined level of robotic chatter on the world’s wireless networks . . . is likely soon to exceed that generated by the sum of all human voice conversations taking place on wireless grids.”11
A team led by Rumi Chunara of Harvard Medical School found that tweets were just as accurate as official reports when it came to tracking the spread of cholera after the 2010 earthquake in Haiti; they were also at least two weeks faster.
“If you want to have good ideas you must have many ideas.” —Linus Pauling
Artificial intelligence will not just improve lives; it will also save them.
is a remarkable and unmistakable fact that, with the exception of climate change, virtually all environmental, social, and individual indicators of health have improved over time, even as human population has increased.
effect. Things have gotten better because there are more people, who in total have more good ideas that improve our overall lot.
wrote, “It is your mind that matters economically, as much or more than your mouth or hands. In the long run, the most important economic effect of population size and growth is the contribution of additional people to our stock of useful knowledge. And this contribution is large enough in the long run to overcome all the costs of population growth.”7
“Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” —Milton Friedman
If GDP of the United States grows just 1 percent faster each year than currently projected, Americans would be five trillion dollars richer by 2033.2
In fact, it would take the average American only eleven hours of labor per week to produce as much as he or she produced in forty hours in 1950. That rate of improvement is comparable for workers in Europe and Japan, and even higher in some developing nations.*
In fact, for every dollar of investment in computer hardware, companies need to invest up to another nine dollars in software, training, and business process redesign.
Even if Moore’s Law ground to a halt today, we could expect decades of complementary innovations to unfold and continue to boost productivity.
“The Gross National Product does not include the beauty of our poetry or the intelligence of our public debate. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion. It measures everything, in short, except that which makes life worthwhile.” —Robert F. Kennedy
GDP, even if it were perfectly measured, does not quantify our welfare. The
Because they have zero price, these services are virtually invisible in the official statistics. They add value to the economy, but not dollars to GDP. And because our productivity data are, in turn, based on GDP metrics, the burgeoning availability of free goods does not move the productivity dial.
A simple switch to using a free texting service like Apple’s iChat instead of SMS, free classifieds like Craigslist instead of newspaper ads, or free calls like Skype instead of a traditional telephone service can make billions of dollars disappear from companies’ revenues and the GDP statistics.
instance. On average it took about twenty-two minutes to answer a query without Google (not counting travel time to the library!) but only seven minutes to answer the same query with Google.
consider that last year users collectively spent about 200 million hours each day just on Facebook, much of it creating content for other users to consume.13 That’s ten times as many person-hours as were needed to build the entire Panama Canal.
The intangible benefits delivered by the growing sharing economy—better matches, timeliness, customer service, and increased convenience—are exactly the types of benefits identified by the 1996 Boskin Commission as being poorly measured in our official price and GDP statistics.
Production in the second machine age depends less on physical equipment and structures and more on the four categories of intangible assets: intellectual property, organizational capital, user-generated content, and human capital.
models. Effective uses of the new technologies of the second machine age almost invariably require changes in the organization of work.
Our research suggests that a correct accounting for computer-related intangible assets would add over $2 trillion to the official estimates of the capital assets in the United States economy.21
There are 43,200 hours of new YouTube videos created each day,22 as well as 250 million new photos uploaded each day on Facebook.23
According to Dale Jorgenson and Barbara Fraumeni, the value of human capital in the United States is five to ten times larger than the value of all the physical capital in the United States.
In 1776, he noted, “The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding.”
Not everything that counts can be counted, and not everything that can be counted, counts.
GDP and productivity growth are important, but they are means to an end, not ends in and of themselves.
more, the gap between what we measure and what we value grows every time we gain access to a new good or service that never existed before, or when existing goods become free as they so often do when they are digitized.
“An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” —Plutarch
astonishing: it has been estimated that more photos are now taken every two minutes than in all of the nineteenth century.
Advances in technology, especially digital technologies, are driving an unprecedented reallocation of wealth and income.
