Race Against The Machine

I just finished reading the Kindle book Race Against The Machine, a book I thoroughly recommend. This was the driver of the NPR article I blogged about recently.

The book is mostly oriented towards the US, although the issues they discuss seem to be prevalent across all major economies. The authors make the case that technological improvements are severely impacting every job market except those for highly-skilled individuals.

They argue, as I have argued, that the current employment crisis is caused by structural factors such as increased productivity due to technology, rather than cyclical or stagnation factors. We are simply living in a world where the educated and skilled are able to contribute to the economy in a disproportionate way, and the less educated/skilled are forced to compete for the fewer and fewer jobs that are currently too expensive to automate. This leads to money flowing from the workers to the owners of the business, which is an unsustainable situation for the long term.

The authors point out that to a large extent, we operate in a “winner take all” society. Technology enables the best and fastest-moving in the business to capture the bulk of a market. That in turn provides a strong incentive for those with capital to further invest in technology, creating a self-perpetuating cycle. Not only is this situation self-perpetuating, but increased capital allows winners a disproportionate advantage in the race to take advantage of another business opportunity.

The positive news is that as we use technology to expand the frontiers of innovation, this will in turn create an exponential increase in the possibilities for further innovation.