Race Against the Machine

We’ll call this the “end of work” argument, after Jeremy Rifkin’s 1995 book of the same title. In it, Rifkin laid out a bold and disturbing hypothesis: that “we are entering a new phase in world history—one in which fewer and fewer workers will be needed to produce the goods and services for the global population.”

At least since the followers of Ned Ludd smashed mechanized looms in 1811, workers have worried about automation destroying jobs. Economists have reassured them that new jobs would be created even as old ones were eliminated. For over 200 years, the economists were right.

We don’t believe in the coming obsolescence of all human workers. In fact, some human skills are more valuable than ever, even in an age of incredibly powerful and capable digital technologies. But other skills have become worthless, and people who hold the wrong ones now find that they have little to offer employers. They’re losing the race agains

Digitization, in other words, is not a single project providing one-time benefits. Instead, it's an ongoing process of creative destruction;

Digital technologies change rapidly, but organizations and skills aren’t keeping pace. As a result, millions of people are being left behind.

Why has the scourge of unemployment been so persistent? Analysts offer three alternative explanations: cyclicality, stagnation, and the “end of work.”

Because the process of innovation often relies heavily on the combining and recombining of previous innovations, the broader and deeper the pool of accessible ideas and individuals, the more opportunities there are for innovation. We are in no danger of running out of new combinations to try. Even if technology froze today, we have more possible wa

If 50 construction workers are drinking at a bar and Bill Gates walks in as the poorest customer walks out, the mean wealth of the customers would

soar to $1 billion. However, the wealth of the median customer, the one exactly in the middle of the distribution, wouldn’t change at all.

The threat of technological unemployment is real. To understand this threat, we'll define three overlapping sets of winners and losers that technical change creates: (1) high-skilled vs. low-skilled workers, (2) superstars vs. everyone else, and (3) capital vs. labor.