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June 27 - July 27, 2019
the average American white woman without a high school diploma had a life expectancy of 73.5 years in 2008, compared to 78.5 years in 1990.
This means that the best way to use new technologies is usually not to make a literal substitution of a machine for each human worker, but to restructure the process.
When Jaimovich and Siu compared the 1980s, 1990s, and 2000s, they found that the demand for routine cognitive tasks such as cashiers, mail clerks, and bank tellers and routine manual tasks such as machine operators, cement masons, and dressmakers was not only falling, but falling at an accelerating rate. These jobs fell by 5.6 percent between 1981 and 1991, 6.6 percent between 1991 and 2001, and 11 percent between 2001 and 2011.26 In contrast, both nonroutine cognitive work and nonroutine manual work grew in all three decades.
Over millions of years, evolution has endowed us with billions of neurons devoted to the subtleties of recognizing a friend’s face, distinguishing different types of sounds, and using fine motor control. In contrast, the abstract reasoning that we associate with ‘higher thought’ like arithmetic or logic is a relatively recent skill, developed over only a few thousand years. It often requires simpler software and less computer power to mimic or even exceed human capabilities on these types of tasks.
Today, no human can beat even a mid-tier computer chess program.
“One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man.” —Elbert Hubbard
When ‘winner-take-all’ markets become more important, income inequality will rise because pay at the very top pulls away from pay in the middle.
top 1 percent earned about 19 percent of all income in the United States, the top 1 percent of the 1 percent (or the top 0.01 percent)—saw their share of national income double from 3 percent to 6 percent between 1995 and 2007.
1970s. In other words, the top 0.01 percent now get a bigger share of the top 1 percent of income than the top 1 percent get of the whole economy.
when improvements in digital technologies make it more and more attractive to digitize something, superstars in various markets see a boost in their incomes while second-bests have a harder time competing.
“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have little.” —Franklin D. Roosevelt
Today the employment-to-population ratio is lower than any time in at least 20 years, and the real income of the median worker is lower today than in the 1990s. Meanwhile, like productivity, GDP, corporate investment, and after-tax profits are also at record highs.
When combined with political and economic systems that offer people choices instead of locking them in, technological advance is an awe-inspiring engine of betterment and bounty.
Recent research makes it clear that the American Dream of upward mobility, which was real in earlier generations, is greatly diminished today. To take just one example, a 2013 study of U.S. tax returns from 1987 to 2009 conducted by economists Jason DeBacker, Bradley Heim, and their colleagues found that the thirty-five thousand households they studied tended to stay in roughly the same order of richest to poorest year after year, with little reshuffling, even as the differences in household income grew over time.
Once one concedes that it takes time for workers and organizations to adjust to technical change, then it becomes apparent that accelerating technical change can lead to widening gaps and increasing possibilities for technological unemployment. Faster technological progress may ultimately bring greater wealth and longer lifespans, but it also requires faster adjustments by both people and institutions.
the data also show that, more recently, job growth decoupled from productivity in the late 1990s.
Thus in a very real sense, as long as there are unmet needs and wants in the world, unemployment is a loud warning that we simply aren’t thinking hard enough about what needs doing. We aren’t being creative enough about solving the problems we have using the freed-up time and energy of the people whose old jobs were automated away.
If you look at the types of tasks that have been offshored in the past twenty years, you see that they tend to be relatively routine, well-structured tasks. Interestingly, these are precisely the tasks that are easiest to automate. If you can give precise instructions to someone else on exactly what needs to be done, you can often write a precise computer program to do the same task. In other words, offshoring is often only a way station on the road to automation.
researchers Ernest Pascarella and Patrick Terenzini, who summarized more than twenty years of research in their book How College Affects Students. They write that “the impact of college is largely determined by individual effort and involvement in the academic, interpersonal, and extracurricular offerings on a campus.”
By the end of 2011, in fact, student loan debt in America was greater than either total outstanding car loans or credit card debt.
“A policy is a temporary creed liable to be changed, but while it holds good it has got to be pursued with apostolic zeal.” —Mahatma Gandhi
Since 2007, it appears that net illegal immigration to the United States is approximately zero, or actually negative.
Economy, between 1990 and 2005, 25 percent of America’s highest-growth companies were founded by foreign-born entrepreneurs.
By some estimates, the revenues from optimal congestion pricing would be enough to eliminate all state taxes in California.
research by our MIT colleague and Nobel Prize–winning economist Peter Diamond, in partnership with Clark Medal winner Emmanuel Saez, suggests that optimal tax rates at the very top of the income distribution might be as high as 76 percent.
economist Andrew Oswald, who found that joblessness lasting six months or longer harms feelings of well-being and other measures of mental health about as much as the death of a spouse, and that little of this decline is due to the loss of income; instead, it arises from a loss of self-worth.9
suggests that states with more generous EITC policies also have significantly greater intergenerational mobility.
By 2010, over 80 percent of all revenue collected by the federal government came from individual income taxes and payroll taxes.
The better machines become at substituting for human labor, the bigger negative effect any tax or mandate will have on human employment.
America is the only one of the thirty-four nations in the OECD without one.
A value added tax
As the story of Lyft highlights, there are many legal and regulatory issues that will need to be resolved as the peer economy grows.
• Create a national mutual fund distributing the ownership of capital widely and perhaps inalienably, providing a dividend stream to all citizens and assuring the capital returns do not become highly concentrated. • Use taxes, regulation, contests, grand challenges, or other incentives to try to direct technical change toward machines that augment human ability rather than substitute for it, toward new goods and services and away from labor savings. • Pay people via nonprofits and other organizations to do ‘socially beneficial’ tasks, as determined by a democratic process. • Nurture or
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In the coming decade, we will have the good fortune to witness a wave of astonishing technologies unleashed. They will require changes in our economic institutions and intuitions. By maximizing the flexibility of our systems and mental models, we will be in the best position to identify and implement these changes. A willingness to learn from others’ ideas and adapt our own practices—to have open minds and open systems—will be the hallmarks of success.
flows. Eric Schmidt and Jared Cohen describe some of these technologies, as well as countermeasures, in their book, The New Digital Age.
In a digital world, privacy requires explicitly designed institutions, incentives, laws, technologies, or norms
us. As AI trailblazer Frederick Jelinek put it beautifully, “Airplanes don’t flap their wings.”
all. Current AI, in short, looks intelligent, but it’s an artificial resemblance.
As we have fewer constraints on what we can do, it is then inevitable that our values will matter more than ever.
Technology is not destiny. We shape our destiny.
