Race Against the Machine

MIT economist Erik Brynjolfsson emails me:

I agree with your recent blog post that "the timing suggests that the two trends--the increasing value of education and the rising share of the top 1 percent--may be related." But how are they related?  I think the biggest single factor is the digital revolution, which is boosting the economy and benefitting you, me and Paul Krugman, while leaving many people behind.  The median worker's skills and our institutions aren't keeping up with accelerating technological change.

I discuss this in my very short new ebook (about 20,000 words) with Andrew McAfee called "Race Against the Machine: How the Digital Revolution Accelerates Innovation, Drives Productivity and Irreversibly Transforms Employment and the Economy".  In it, we seek to reconcile the fact that the 2000s has been the best decade since the 1960s for productivity growth, better than the roaring 1990s even. And yet median wages have largely stagnated and employment actually has fallen since 2000. We attribute this in part to the fact that tech. progress is driving productivity even has it leaves many types of workers behind.  In fact, a large group has been made worse off, even as those with education and talent have gained immensely, and opportunities for entrepreneurs are better than ever.  In my judgment, the underlying trends are on track to accelerating in coming years.