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Race Against The Machine: How The Digital Revolution Is Accelerating Innovation, Driving Productivity, And Irreversibly Transforming Employment And The Economy (2000)

by Erik Brynjolfsson(Favorite Author)

3.88 of 5 Votes: 3

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review 1: As the authors note, this isn't a handbook for how to reorganize companies and the economy. Rather, it's a description of existing trends, some explanations of those trends, and notes towards a larger conversation that needs to happen. Some proposed measures are too glib and vague (replace STEM with STEAM!) while others seem duplicates of existing efforts ("Create clearinghouses and databases to facilitate the creation and dissemination of templates for new businesses" - isn't this already being done by the SBA and SCORE?), but others do seem fascinating, such as introducing entrepreneurship into education generally.It's a quick read, though I want to dig into some of the economics aspects on a re-read.
review 2: I love short, data- and graph-heavy books like t... morehese, that tackle important subjects in greater depth than the blog format allows but at greater brevity than a 400 page tome. Even when I have big problems with them, like I do with this one, they're usually very brisk yet well-written and thought-provoking. The book's central subject is an important one - the effects of automation on the economy of the future (mostly the US, but the results are probably more broadly applicable). It's broken up into 4 quick chapters, of which the first 3 are descriptive and the final one proscriptive. I'll bullet-point the logic of the first 3 chapters:- Unemployment is extremely high by historical standards and doesn't show signs of falling swiftly- This could be due to three broad causes: mismanagement of aggregate demand (e.g. Paul Krugman's view), a general stagnation in technological progress (cf. Tyler Cowen), or a fundamental shift in the kind of jobs available- While not exactly ruling out the first two causes (though Cowen believes that modern technological progress is nowhere near as transformative as the steam, electricity, etc that we got during the Industrial Revolution), the authors think that progress in automation deserves a closer look- We're getting into "the second half of the chessboard", where accelerating technological progress in automation can be seen in things like IBM's Watson or Google's self-driving cars- This progress will make an increasing percentage of traditional jobs either obsolete or so low-paying as to make no difference- It's not obvious that new jobs which will be created will be either as numerous or as remunerative, especially since technological progress is sort of "outside" the business cycle- Even then, those new jobs which are remunerative will require lots of skills that will be hard for much of the population to acquire- Even worse, we live in a superstar/plutocrat economy where most gains flow to a small number of people, leaving declining real living standards for everyone else- This means that the future for most people looks grim, in fact so grim that the authors quote Gregory Clark thus:"There was a type of employee at the beginning of the Industrial Revolution whose job and livelihood largely vanished in the early twentieth century. This was the horse. The population of working horses actually peaked in England long after the Industrial Revolution, in 1901, when 3.25 million were at work. Though they had been replaced by rail for long-distance haulage and by steam engines for driving machinery, they still plowed fields, hauled wagons and carriages short distances, pulled boats on the canals, toiled in the pits, and carried armies into battle. But the arrival of the internal combustion engine in the late nineteenth century rapidly displaced these workers, so that by 1924 there were fewer than two million. There was always a wage at which all these horses could have remained employed. But that wage was so low that it did not pay for their feed."Yikes. So, what is to be done? This last chapter is a predictably mixed bag. The note that in theory, long tail-type economies of scale give small producers an edge, as does the app economy and things like home 3D printing, though I'm not sure if it's feasible to have an economy of people making new Twitter apps and Etsy products for each other. For education, they recommend paying teachers more (good), instituting dubious reform measures like eliminating tenure (???), keeping kids in school for longer (probably good), importing more skilled immigrants (good), and embracing MOOCs (possibly good). For entrepreneurship, make it easier to start businesses (good) and streamline burdensome regulations (sounds great, but these sorts of bullet points are always too vague). For investment, they like more infrastructure spending (good) and R&D spending (good). For laws, they like extremely "flexible" hiring/firing (hmm...), cutting employer payroll taxes (maybe good, but what happens to social programs funded by those taxes?), decoupling employment from benefits like health insurance (good), not regulating new network businesses (unlikely), ending the home mortgage subsidy (good), ending too big to fail (good), fixing the patent system to end patent trolling (good), and shortening copyright periods (good).Though many of these suggestions are good, this seems like the kind of techno-nerd perspective that plays well to other thinkers but doesn't engage much with the people who are actually being downsized and automated. It's possible to think that the gains from technological progress will tend to only accrue to a few, but that this is really a policy choice driven by plain old class politics rather than something inherent to the iEconomy. Mark Zuckerberg can get really rich off of Facebook, but the means by which he did so (essentially private ownership of a large corporation via control of most voting shares) are centuries old. I'm willing to grant that their "third way" thesis that the current age of technological progress might be driving part of unemployment, but even though I don't think the solution to the challenges of modern technological progress should be exactly the same as New Deal policies to spread wealth and opportunity after the Depression, one looks in vain in this book for alternative suggestions that would help give workers more control over their own destiny. It's definitely a good thing that smartphones are becoming more powerful and more widely available, but it's not really a mystery why unemployment is going up if the only means by which people can react to modern changes in their lives is the same limited means they had during the Gilded Age. Man might be, as they quote from a NASA report, "the lowest-cost, 150-pound, nonlinear, all-purpose computer system which can be mass-produced by unskilled labor," but we can still vote, right?Perhaps their upcoming book will expand further. less

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