The Great Digital Divide: Were the Machine-Smashers Right?

By Shlomo Maital       

 Luddites

In the early days of the British Industrial Revolution, the “Luddites” went around smashing machines that they thought were replacing workers and impoverishing them.

   Turns out, they were wrong.  For the past two centuries, note two MIT scholars, “productivity, median income and employment all tracked each other nicely.”  Machines and technology created jobs, rather than destroyed them.

   However, Erik Brynjolfsson and Andrew McAfee note in their new book “Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity and Irreversibly Transforming Employment and the Economy”,  this may no longer be true.  

   The digital revolution, they note (summarized in a Tom Friedman NYT column), has three effects:  * those with more education earn a whole lot more than those without it,  * those with money to buy and operate digital machines earn far more than those who sell just their labor, and * those with global superstar skills, who can reach global markets, earn far more than those with slightly less, local talent.

   So what is going on?  In America, perhaps it is not JUST the business cycle that is at work, but a deep structural shift – “we Americans have record productivity, wealth and innovation, yet median incomes are falling, inequality is rising and unemployment remains persistent.”

   Should America emerge from its recession and begin to grow, there is no guarantee that the bulk of Americans will share in the gains and be better off.  This is true of other modern Western nations as well. 

    For individuals, and for students, the implications are clear.  It’s going to be a tougher world out there.  It already is.  Make sure you have, or acquire, a special talent that is needed, and above all, make sure you have the ability to quickly acquire NEW skills and talents when the ones you have are appropriated by a digital device and make you obsolete.    We don’t need to smash the machines, like the Luddites.  But if Ray Kurzweil is right, if they take over the world in 2045,  we need to be smart enough to fight back.