Race against the machines

Over the Christmas holidays I read Erik Brynjolfsson and Andrew McAfee's "The Second Machine Age," an ultimately optimistic view of where IT is taking us.  I say ultimately because as the machines get smarter and more productive, there is going to be significant displacement of labor.

Traditionally economists have viewed technological change as an essential element of economic growth.  Although there are plenty of examples of workers being displaced (ask John Henry the steel-driving man), the economy has historically been able to absorb and reallocate them fast enough to avoid mass unemployment.

Now Brynjolfsson is not so sure that mass unemployment can be avoided, as reported in a recent WSJ piece.  Although self-driving cars are years away from U.S. interstates, an Australian mining company is already using self-driving trucks and automated trains.  Some experts think that between a third and a half of today's jobs will become obsolete by mid-century.  MIT economist David Autor fears that those that will be left will be either very high skill or very low skill.

The good news -- breakthroughs in health care and education, new jobs that we cannot yet imagine, opportunities for more free time as machines do more work for us.  Maybe even folding laundry?