The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies

Cloud Computing, Networks, the Internet, and Cloud Computing, Innovation and Economic Growth and Artificial Intelligence

Article Snapshot


Erik Brynjolfsson and Andrew McAfee


W.W. Norton & Co., 2014


Digital technologies such as robots and self-driving cars are advancing rapidly. These new technologies will bring profound benefits. However, companies will have less need for some kinds of workers, resulting in unemployment.

Policy Relevance

Policymakers should improve education and welcome skilled immigrants. A negative income tax is the best way to help the unemployed.

Main Points

  • Digital technologies related to computers are still advancing rapidly and will usher in a Second Machine Age.
    • Computers are learning to write prose.
    • 3D printers can make new structures from plastic, metal, or concrete.
  • Moore’s Law holds that the amount of computer power you can buy for one dollar doubles every 18 months; the observation still applies to many digital technologies.
  • The benefits of digital technologies include reduced costs of goods and services, more free goods (such as digital music), and better decision-making (such as medical diagnostics).
  • Machines can do many routine or repetitive tasks, and employers will have less need for some kinds of workers; persistent unemployment is growing among low-skilled workers.
  • Gains in productivity no longer generate higher wages across the board; the spread between the richest and the poorest is growing.
    • Median wage income has fallen since 1999 and has increased little since 1979.
    • Sweden, Finland and Germany note similar trends.
    • The main driver of inequality is digital technology.
  • The new economic trend is for winner-take-all markets; stars and superstars will enjoy a growing proportion of the wealth generated by digital technologies.
  • Policymakers should address economic disruption caused by digital technologies; desirable changes include:
    • Making schools more similar to Montessori schools.
    • Elimination of unnecessary and overly burdensome regulation, to encourage startups.
    • Immigration reform, to increase the number of skilled immigrants.
    • Tax law changes, including an increase on taxes on star and superstar earners.
  • A negative income tax would help low-income populations without discouraging them from seeking employment.


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