Race Against the Machine

Cowen, Phelps, and other “stagnationists” hold that only higher rates of innovation and technical progress will lift the economy out of its current doldrums.

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

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.

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

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’ll start with skill-biased technical change, which is perhaps the most carefully studied of the three phenomena. This is technical change that increases the relative demand for high-skill labor while reducing or eliminating the demand for low-skill labor.

and focus on working-age households, real median income has actually fallen from $60,746 to $55,821. This is the first decade to see declining median income since the figures were first compiled. Median net worth also declined this past decade when adjusted for inflation, another first.

advanced pattern recognition and complex communication, for now humans still hold the high ground in each of these areas. Experienced doctors, for example, make diagnoses by comparing the body of medical knowledge they’ve accumulated against patients’ lab results and descriptions of symptoms, and also by employing the advanced subconscious pattern

And for all their power and speed, today’s digital machines have shown little creative ability. They can’t compose very good songs, write great novels, or generate good ideas for new businesses.