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Thursday, January 9, 2014

Will Smarter Computers Lead To A Better World?

'Jeopardy!' contestants Ken Jennings and Brad Rutter compete against 'Watson,' at the IBM T.J. Watson Research Center on January 13, 2011 in Yorktown Heights, New York. (Ben Hider/Getty Images)

‘Jeopardy!’ contestants Ken Jennings and Brad Rutter compete against ‘Watson,’ at the IBM T.J. Watson Research Center on January 13, 2011 in Yorktown Heights, New York. (Ben Hider/Getty Images)

MIT’s Erik Brynjolfsson says we are living in as significant a moment as the first industrial revolution, but the smart machines won’t lead to utopia without good public policy.

Brynjolfsson and colleague Andrew McAfee say they were confused by what they saw happening — an age in which thinking machines suddenly got much, much better. They asked themselves, how did this happen, and what were the consequences?

For a long time, there had been a notion that computers are good at following instructions and bad at the more cognitive skills, such as recognizing patterns — but that is no longer true. For one thing, there are now computers that can learn.

 There’s no economic law that says that when technology advances, that everybody necessarily benefits: some people, even a majority of people, could be made worse off.

– Erik Brynjolfsson

The difference between machines relationships with humans in the first age was complementary, while machines now are more often can substitute humans.

The say this is as big a development as the industrial revolution. The steam engine and the machines that followed helped humans vastly increase muscle power. Smart computers are now doing the same for brain power.

They authors say it’s hard to decide what is the most important development in human history — domestication of animals, farming, cities, philosophical ideas, religions — all are major developments, but none of those have had as profound and measurable an effect as machines have had.

While that opens up extraordinary possibilities, Brynjolfsson told Here & Now’s Meghna Chakrabarti that he was not a utopian. The reason he was interested in the new technology is because it coincided with rising economic inequality.

“There’s no economic law that says that when technology advances, that everybody necessarily benefits: some people, even a majority of people, could be made worse off.” Brynjolfsson said. “The earlier technologies tended to be complements to humans. They made human decision making, cognitive skills more valuable. But the new technologies, these cognitive technologies, are not necessarily complements for people. In some cases, they are substitutes.”

In order for us to fully harness the good that this new age of machines can do, Brynjolfsson says, we still need good public policy.

“We don’t think the solution is to smash the machines, or slow down technology,” Brynjolfsson said. “The answer is to speed up our adaptation to it: changes in our skills, our organizations, even our institutions. Technology can and should be good news.”

Book Excerpt: ‘The Second Machine Age’

The Second Machine Age book cover

By Erik Brynjolfsson and Andrew McAfee

The Big Stories

“Technology is a gift of God. After the gift of life it is perhaps the greatest of God’s gifts. It is the mother of civilizations, of arts and of sciences.”
—Freeman Dyson

What have been the most important developments in human history?

As anyone investigating this question soon learns, it’s difficult to answer. For one thing, when does ‘human history’ even begin? Anatomically and behaviorally modern Homo sapiens, equipped with language, fanned out from their African homeland some sixty thousand years ago.1 By 25,000 BCE2 they had wiped out the Neanderthals and other hominids, and thereafter faced no competition from other big-brained, upright-walking species.

We might consider 25,000 BCE a reasonable time to start tracking the big stories of humankind, were it not for the development-
retarding ice age earth was experiencing at the time. In his book Why the West Rules—For Now, anthropologist Ian Morris starts tracking human societal progress in 14,000 BCE, when the world clearly started getting warmer.

Another reason it’s a hard question to answer is that it’s not clear what criteria we should use: what constitutes a truly important development? Most of us share a sense that it would be an event or advance that significantly changes the course of things—one that ‘bends the curve’ of human history. Many have argued that the domestication of animals did just this, and is one of our earliest important achievements.

The dog might well have been domesticated before 14,000 BCE, but the horse was not; eight thousand more years would pass before we started breeding them and keeping them in corrals. The ox, too, had been tamed by that time (ca. 6,000 BCE) and hitched to a plow. Domestication of work animals hastened the transition from foraging to farming, an important development already underway by 8,000 BCE.

Agriculture ensures plentiful and reliable food sources, which in turn enable larger human settlements and, eventually, cities. Cities in turn make tempting targets for plunder and conquest. A list of important human developments should therefore include great wars and the empires they yielded. The Mongol, Roman, Arab, and Ottoman empires—to name just four—were transformative; they affected kingdoms, commerce, and customs over immense areas.

Of course, some important developments have nothing to do with animals, plants, or fighting men; some are simply ideas. Philosopher Karl Jaspers notes that Buddha (563–483 BCE), Confucius (551–479 BCE), and Socrates (469–399 BCE) all lived quite close to one another in time (but not in place). In his analysis these men are the central thinkers of an ‘Axial Age’ spanning 800–200 BCE. Jaspers calls this age “a deep breath bringing the most lucid consciousness” and holds that its philosophers brought transformative schools of thought to three major civilizations: Indian, Chinese, and European.

The Buddha also founded one of the world’s major religions, and common sense demands that any list of major human developments include the establishment of other major faiths like Hinduism, Judaism, Christianity, and Islam. Each has influenced the lives and ideals of hundreds of millions of people.

Many of these religions’ ideas and revelations were spread by the written word, itself a fundamental innovation in human history. Debate rages about precisely when, where, and how writing was invented, but a safe estimate puts it in Mesopotamia around 3,200 BCE. Written symbols to facilitate counting also existed then, but they did not include the concept of zero, as basic as that seems to us now. The modern numbering system, which we call Arabic, arrived around 830 CE.

The list of important developments goes on and on. The Athenians began to practice democracy around 500 BCE. The Black Death reduced Europe’s population by at least 30 percent during the latter half of the 1300s. Columbus sailed the ocean blue in 1492, beginning interactions between the New World and the Old that would transform both.

The History of Humanity in One Graph

How can we ever get clarity about which of these developments is the most important? All of the candidates listed above have passionate advocates—people who argue forcefully and persuasively for one development’s sovereignty over all the others. And in Why the West Rules—For Now Morris confronts a more fundamental debate: whether any attempt to rank or compare human events and developments is meaningful or legitimate. Many anthropologists and other social scientists say it is not. Morris disagrees, and his book boldly attempts to quantify human development. As he writes, “reducing the ocean of facts to simple numerical scores has drawbacks but it also has the one great merit of forcing everyone to confront the same evidence—with surprising results.” In other words, if we want to know which developments bent the curve of human history, it makes sense to try to draw that curve.

Morris has done thoughtful and careful work to quantify what he terms social development (“a group’s ability to master its physical and intellectual environment to get things done”) over time. As Morris suggests, the results are surprising. In fact, they’re astonishing. They show that none of the developments discussed so far has mattered very much, at least in comparison to something else—something that bent the curve of human history like nothing before or since. Here’s the graph, with total worldwide human population graphed over time along with social development; as you can see, the two lines are nearly identical:

For many thousands of years, humanity was a very gradual upward trajectory. Progress was achingly slow, almost invisible. Animals and farms, wars and empires, philosophies and religions all failed to exert much influence. But just over two hundred years ago, something sudden and profound arrived and bent the curve of human history—of population and social development—almost ninety degrees.

Engines of Progress

By now you’ve probably guessed what it was. This is a book about the impact of technology, after all, so it’s a safe bet that we’re opening it this way in order to demonstrate how important technology has been. And the sudden change in the graph in the late eighteenth century corresponds to a development we’ve heard a lot about: the Industrial Revolution, which was the sum of several nearly simultaneous developments in mechanical engineering, chemistry, metallurgy, and other disciplines. So you’ve most likely figured out that these technological developments underlie the sudden, sharp, and sustained jump in human progress.

If so, your guess is exactly right. And we can be even more precise about which technology was most important. It was the steam engine or, to be more precise, one developed and improved by James Watt and his colleagues in the second half of the eighteenth century.

Prior to Watt, steam engines were highly inefficient, harnessing only about one percent of the energy released by burning coal. Watt’s brilliant tinkering between 1765 and 1776 increasedthismore than threefold. As Morris writes, this made all the difference: “Even though [the steam] revolution took several decades to unfold . . . it was nonetheless the biggest and fastest transformation in the entire history of the world.”

The Industrial Revolution, of course, is not only the story of steam power, but steam started it all. More than anything else, it allowed us to overcome the limitations of muscle power, human and animal, and generate massive amounts of useful energy at will. This led to factories and mass production, to railways and mass transportation. It led, in other words, to modern life. The Industrial Revolution ushered in humanity’s first machine age—the first time our progress was driven primarily by technological innovation—and it was the most profound time of transformation our world has ever seen. The ability to generate massive amounts of mechanical power was so important that, in Morris’s words, it “made mockery of all the drama of the world’s earlier history.”

Now comes the second machine age. Computers and other digital advances are doing for mental power—the ability to use our brains to understand and shape our environments—what the steam engine and its descendants did for muscle power. They’re allowing us to blow past previous limitations and taking us into new territory. How exactly this transition will play out remains unknown, but whether or not the new machine age bends the curve as dramatically as Watt’s steam engine, it is a very big deal indeed. This book explains how and why.

For now, a very short and simple answer: mental power is at least as important for progress and development—for mastering our physical and intellectual environment to get things done—as physical power. So a vast and unprecedented boost to mental power should be a great boost to humanity, just as the ealier boost to physical power so clearly was.

Playing Catch-Up

We wrote this book because we got confused. For years we have studied the impact of digital technologies like computers, software, and communications networks, and we thought we had a decent understanding of their capabilities and limitations. But over the past few years, they started surprising us. Computers started diagnosing diseases, listening and speaking to us, and writing high-quality prose, while robots started scurrying around warehouses and driving cars with minimal or no guidance. Digital technologies had been laughably bad at a lot of these things for a long time—then they suddenly got very good. How did this happen? And what were the implications of this progress, which was astonishing and yet came to be considered a matter of course?

We decided to team up and see if we could answer these questions. We did the normal things business academics do: read lots of papers and books, looked at many different kinds of data, and batted around ideas and hypotheses with each other. This was necessary and valuable, but the real learning, and the real fun, started when we went out into the world. We spoke with inventors, investors, entrepreneurs, engineers, scientists, and many others who make technology and put it to work.

Thanks to their openness and generosity, we had some futuristic experiences in today’s incredible environment of digital innovation. We’ve ridden in a driverless car, watched a computer beat teams of Harvard and MIT students in a game of Jeopardy!, trained an industrial robot by grabbing its wrist and guiding it through a series of steps, handled a beautiful metal bowl that was made in a 3D printer, and had countless other mind-melting encounters with technology.

Where We Are

This work led us to three broad conclusions.

The first is that we’re living in a time of astonishing progress with digital technologies—those that have computer hardware, software, and networks at their core. These technologies are not brand-new; businesses have been buying computers for more than half a century, and Time magazine declared the personal computer its “Machine of the Year” in 1982. But just as it took generations to improve the steam engine to the point that it could power the Industrial Revolution, it’s also taken time to refine our digital engines.

We’ll show why and how the full force of these technologies has recently been achieved and give examples of its power. “Full,” though, doesn’t mean “mature.” Computers are going to continue to improve and to do new and unprecedented things. By “full force,” we mean simply that the key building blocks are already in place for digital technologies to be as important and transformational to society and the economy as the steam engine. In short, we’re at an inflection point—a point where the curve starts to bend a lot—because of computers. We are entering a second machine age.

Our second conclusion is that the transformations brought about by digital technology will be profoundly beneficial ones. We’re heading into an era that won’t just be different; it will be better, because we’ll be able to increase both the variety and the volume of our consumption. When we phrase it that way—in the dry vocabulary of economics—it almost sounds unappealing. Who wants to consume more and more all the time? But we don’t just consume calories and gasoline. We also consume information from books and friends, entertainment from superstars and amateurs, expertise from teachers and doctors, and countless other things that are not made of atoms. Technology can bring us more choice and even freedom.

When these things are digitized—when they’re converted into bits that can be stored on a computer and sent over a network—they acquire some weird and wonderful properties. They’re subject to different economics, where abundance is the norm rather than scarcity. As we’ll show, digital goods are not like physical ones, and these differences matter.

Of course, physical goods are still essential, and most of us would like them to have greater volume, variety, and quality. Whether or not we want to eat more, we’d like to eat better or different meals. Whether or not we want to burn more fossil fuels, we’d like to visit more places with less hassle. Computers are helping accomplish these goals, and many others. Digitization is improving the physical world, and these improvements are only going to become more important. Among economic historians there’s wide agreement that, as Martin Weitzman puts it, “the long-term growth of an advanced economy is dominated by the behavior of technical progress.”12 As we’ll show, technical progress is improving exponentially.

Our third conclusion is less optimistic: digitization is going to bring with it some thorny challenges. This in itself should not be too surprising or alarming; even the most beneficial developments have unpleasant consequences that must be managed. The Industrial Revolution was accompanied by soot-filled London skies and horrific exploitation of child labor. What will be their modern equivalents? Rapid and accelerating digitization is likely to bring economic rather than environmental disruption, stemming from the fact that as computers get more powerful, companies have less need for some kinds of workers. Technological progress is going to leave behind some people, perhaps even a lot of people, as it races ahead. As we’ll demonstrate, there’s never been a better time to be a worker with special skills or the right education, because these people can use technology to create and capture value. However, there’s never been a worse time to be a worker with only ‘ordinary’ skills and abilities to offer, because computers, robots, and other digital technologies are acquiring these skills and abilities at an extraordinary rate.

Over time, the people of England and other countries concluded that some aspects of the Industrial Revolution were unacceptable and took steps to end them (democratic government and technological progress both helped with this). Child labor no longer exists in the UK, and London air contains less smoke and sulfur dioxide now than at any time since at least the late 1500s.13 The challenges of the digital revolution can also be met, but first we have to be clear on what they are. It’s important to discuss the likely negative consequences of the second machine age and start a dialogue about how to mitigate them—we are confident that they’re not insurmountable. But they won’t fix themselves, either. We’ll offer our thoughts on this important topic in the chapters to come.

So this is a book about the second machine age unfolding right now—an inflection point in the history of our economies and societies because of digitization. It’s an inflection point in the right direction—bounty instead of scarcity, freedom instead of constraint—but one that will bring with it some difficult challenges and choices.

This book is divided into three sections. The first, composed of chapters 1 through 6, describes the fundamental characteristics of the second machine age. These chapters give many examples of recent technological progress that seem like the stuff of science fiction, explain why they’re happening now (after all, we’ve had computers for decades), and reveal why we should be confident that the scale and pace of innovation in computers, robots, and other digital gear is only going to accelerate in the future.

The second part, consisting of chapters 7 through 11, explores bounty and spread, the two economic consequences of this progress. Bounty is the increase in volume, variety, and quality and the decrease in cost of the many offerings brought on by modern technological progress. It’s the best economic news in the world today. Spread, however, is not so great; it’s ever-bigger differences among people in economic success—in wealth, income, mobility, and other important measures. Spread has been increasing in recent years. This is a troubling development for many reasons, and one that will accelerate in the second machine age unless we intervene.

The final section—chapters 12 through 15—discusses what interventions will be appropriate and effective for this age. Our economic goals should be to maximize the bounty while mitigating the negative effects of the spread. We’ll offer our ideas about how to best accomplish these aims, both in the short term and in the more distant future, when progress really has brought us into a world so technologically advanced that it seems to be the stuff of science fiction. As we stress in our concluding chapter, the choices we make from now on will determine what kind of world that is.

1. Morris defines human social development as consisting of four attributes: energy capture (per-person calories obtained from the environment for food, home and commerce, industry and agriculture, and transportation), organization (the size of the largest city), war-making capacity (number of troops, power and speed of weapons, logistical capabilities, and other similar factors), and information technology (the sophistication of available tools for sharing and processing information, and the extent of their use). Each of these is converted into a number that varies over time from zero to 250. Overall social development is simply the sum of these four numbers. Because he was interested in comparisons between the West (Europe, Mesopotamia, and North America at various times, depending on which was most advanced) and the East (China and Japan), he calculated social development separately for each area from 14,000 BCE to 2000 CE. In 2000, the East was higher only in organization (since Tokyo was the world’s largest city) and had a social development score of 564.83. The West’s score in 2000 was 906.37. We average the two scores.

2. We refer to the Industrial Revolution as the first machine age. However, “the machine age” is also a label used by some economic historians to refer to a period of rapid technological progress spanning the late nineteenth and early twentieth centuries. This same period is called by others the Second Industrial Revolution, which is how we’ll refer to it in later chapters.

Excerpted from THE SECOND MACHINE AGE by Erik Brynjolfsson and Andrew McAfee. Copyright © 2014 by Erik Brynjolfsson and Andrew McAfee. With permission of the publisher, W. W. Norton & Company, Inc.




IBM announced today that it's moving Watson, the famous supercomputer, to New York as part of a $1 billion investment in the commercialization of Watson technology. You might remember that Watson beat its human opponents on "Jeopardy!" in 2011.

Well, Watson's sales didn't match that first flush of quiz show victory, but IBM executives still believe that it may be among the biggest innovations in the company's 103-year history. And on its new website for the supercomputer, IBM declares together we'll do things generations before couldn't dream of.

MIT's Erik Brynjolfsson agrees. He says Watson is just one machine that's changing our world more profoundly than the steam engine did centuries ago. In fact he says we're in a second machine age. It's the title of Brynjolfsson's new book, written along with Andrew McAfee, called "The Second Machine Age: Work, Progress and Prosperity in a Time of Brilliant Technologies." Erik, welcome back to our studio.

ERIK BRYNJOLFSSON: It's a pleasure to be here, Meghna.

CHAKRABARTI: So you're calling this the second machine age. We are surrounded by technology and machines. So tell me more specifically what you're referring to.

BRYNJOLFSSON: Well, if you look over the broad, broad sweep of human history, nothing really changed the human condition in terms of living standards until the late 1700s. Living standards just shot up, and the event that occurred then was the beginning of the first machine age, specifically the introduction of the steam engine. Nothing has been the same ever since.

Subsequent innovations continued to enhance our ability to change the world, mostly by really substituting for muscle power, physical movement of atoms around, whether it's the internal combustion engine or electricity.

The second machine age is about a new kind of technology, technologies that enhance our cognitive abilities, that are able to make decisions, that use information. And we think - Andy and I think this had the potential to have as big an impact on the world as the first machine age to once again be an inflection point that changes not just our living standards but also our whole economic system.

CHAKRABARTI: But forgive me for injecting a little bit of skepticism here because, I mean, even in the timeline that you just drew, the idea that technology is changing the way we live isn't necessarily new. So what's prompting you to write this book now?

BRYNJOLFSSON: Well, skepticism is appropriate because we wrote this book out of some confusion of our own, trying to make sense of two seemingly paradoxical, disparate sets of facts and statistics. On one hand there are these wondrous technologies, and if you're at MIT, or you go visit Silicon Valley, you can't help but be amazed by whether it's Watson or the self-driving car, or now you can talk to your machines, and they understand what you're saying and carry out your instructions.

On the other hand there's some really disturbing numbers that are also very important. For instance median income is lower now than it was in the 1990s. so these two sets of stats are really at odds with each other. When Andy and I talked to the technologists, a lot of them are sort of utopian about hey, things have never been better, and innovation is racing ahead, and that's all great.

But when I talk to economists, they tend to be, you know, true to their moniker that someone's called the dismal science. They tend to be much more depressed. They focus on those more negative numbers I mentioned. And Andy and I needed to reconcile those two sets of numbers. And it turns out that both of them, I think, have a common cause, and that is the way technology is racing ahead, yes, but a lot of us aren't keeping up, and our organizations, our skills are falling behind.

CHAKRABARTI: Right. So let's talk a little bit more about the nature of this second machine age, as you call it.

BRYNJOLFSSON: Right, sure. For example take the area of language. This was something that computer scientists, the AI researchers, struggled with for literally decades, trying to get machines to understand spoken language or written language. In just the past five, 10 years, there have been rapid breakthroughs. So really for the first time in history, we're able to talk to our machines, and they understand what we're saying, they'll carry out our instructions. That's something that just didn't happen a few years ago.

And not only that, many of them are beginning to write stories. So I've seen news stories, business stories about earnings reports, sports stories, or problem-solving. I had the guys from IBM's Watson team come to my class at MIT, and as you may know, Watson is a supercomputer that they taught to play the game Jeopardy. That's really hard for people to play.

Watson beat the world champion Jeopardy player, Ken Jennings, who was so good. I mean, I watched him. It almost seems like he's genetically engineered from birth to play Jeopardy. And we brought them in, and we had a team of our best MIT students compete against Watson, not just one player but a whole team of them, and I'm disappointed to report that the MIT students did even worse.

CHAKRABARTI: Than Ken Jennings. Well, so even in just hearing your descriptions, you know, one can immediately think of imagine a future, as you mentioned before, of a utopian one, where these super-smart, highly adaptive machines are transforming our lives for the better. I mean, you know, we were freed from physical labor, or mostly freed from physical labor, by the Industrial Revolution.


CHAKRABARTI: Who knows what freedoms may come with the advent of these super-smart machines. But that's sort of the Star Trek utopian version of the future, but it may not go that way at all.

BRYNJOLFSSON: Well that's exactly right. There's no economic law that says that when technology advances that everybody necessarily benefits: some people, even a majority of people, could be made worse off. For a few hundred years, it was a rising tide that lifted all boats.

But starting about 15, 20 years ago, around the time we date the beginning of the second machine age, wealth and productivity have continued to grow, even accelerated, but median income, employment have stagnated or even fallen. And that is in large part because of the nature of the technology.

You see, the earlier technologies tended to be complements to humans. That is that as the technology advances, they made human decision making, cognitive skills more valuable. But the new technologies, these cognitive technologies, are not necessarily complements for people. In some cases, they are substitutes.

CHAKRABARTI: Erik Brynjolfsson, co-author of the new book "The Second Machine Age," talking there about how the effect of today's technological revolution may be greater than the Industrial Revolution. You're listening to HERE AND NOW.


CHAKRABARTI: It's HERE AND NOW, and we're picking up now with our conversation with MIT Professor Erik Brynjolfsson. He is co-author with Andrew McAfee of the new book "The Second Machine Age: Work, Progress and Prosperity in a Time of Brilliant Technologies."

Brynjolfsson's been visiting labs and businesses which are changing every industry, and he compares it to what happened to society after James Watt's steam engine in the 18th century set off the Industrial Revolution. That, of course, transformed society by enhancing muscle power.

But today's technology is really enhancing brain power. So what are the lessons from that first machine age, the Industrial Revolution? And Erik, you say that today, 60 percent of Americans are engaged in some sort of information processing work, and a lot of those jobs are on the line because of these new technologies. I mean, that is a vast swath of Americans.

And we know that the Industrial Revolution also brought about a massive disruption in the 19th century, even a great deal of suffering, and there was wild inequality. I mean, really, where would Charles Dickens be if there hadn't even been one?

BRYNJOLFSSON: Yeah, exactly. I mean, there were some people who were - in "Dismal Time," you read Dickens or look at the economic statistics, which is not as exciting...

CHAKRABARTI: "Hard Times."

BRYNJOLFSSON: ...but you see that there were a lot of people in wrenching poverty during those times. And people were upset at the technology. It was almost exactly 200 years ago today that the Luddites were smashing machines, spinning looms in Manchester, England, because they saw them as taking away jobs.

And today, you also see people who are fearful of the technology. And Andy and I are certainly not in that group. We don't think the solution is to try to smash the machines or slow down technology. The answer is to speed up our adaptation to it, our - changes in our skills, our organizations, even our institutions, so that we can keep up with this technology.

Technology and should be a good news. Economists often say that technology is the only free lunch that we have.

CHAKRABARTI: But let me interrupt here, if I may.

BRYNJOLFSSON: Yeah, go ahead. Sure.

CHAKRABARTI: Because can we keep up with the technology, as a society? Because, you know, the most basic measure of the rate of increase of technological advancement, Moore's Law, right.

BRYNJOLFSSON: Right, yeah.

CHAKRABARTI: It basically says that it gets more sophisticated by orders of magnitude every year. Societies, however, move very slowly.

BRYNJOLFSSON: Yes. You know, the brutally honest answer is I don't know, because it's - there are some similarities to what we were just talking about in the 1800s in terms of the massive disruption, but Moore's Law doubles about every two years. The steam engine doubled in power about every 70 years, OK.

And when muscle work got automated, there was a lot of demand for cognitive skills. If more and more cognitive work not just augmented, but even automated, it's not quite as obvious what humans do then. So I'm hopeful that we can address these changes, and there is a set of policy recommendations that maybe will help, but I also have to be honest that it could be a bumpy ride going forward.

In fact, if you look at the next 10 years, Andy and I see even bigger disruptions than what we saw in the past 10 years, and those weren't exactly smooth sailing.

CHAKRABARTI: Can you describe what one of those disruptions might look like?

BRYNJOLFSSON: Well, what we see is digital technologies are - in the words of Marc Andreessen in "Eating the World" - not just changing, you know, the software and music industry, but manufacturing, finance, retailing, maybe even education - my industry - and globally, as well.

When I go to China or India, when I visit those factories, they seem to be in the bull's-eye of a lot of this automation, even more than American factories.

CHAKRABARTI: A little earlier, you mentioned how technology may exacerbate things like inequality.


CHAKRABARTI: But a lot of folks who are perhaps not even utopian about technology, but just more optimistic about it, would say that all of this information and this new capacity could actually be a tool to help reduce inequality.

BRYNJOLFSSON: You know, there are the utopians. There are the stagnationists. Andy and I like to call ourselves mindful optimists, because we are optimistic, but only if we work to make the technology in our service. It's not going to unfold automatically.

I mean, to give you one example, almost all economists agree that we need to do a much better job with education. And that needs to be done not simply by throwing more money at education - although more investment wouldn't hurt - but also by reinventing that industry the way other industries have been reinvented.

CHAKRABARTI: So I'm hearing you say that one of the public policy prescriptions that you have with dealing with this second machine age, as you call it, is reinventing education. What are one or two others?

BRYNJOLFSSON: So, another area is actually boosting entrepreneurship. You may be surprised to know that the number of new ventures being created in the past decade is actually less than the '90s, or the '80s.

CHAKRABARTI: I mean, were the '90s outliers, though? And, I mean, did 2008 - OK.

BRYNJOLFSSON: No, no. It's actually been falling. I mean, as far as we can tell, work by John Haltiwanger and others have shown that it seems like we've kind of had, like, a decrease. Some of that may be demographics and other things. Some of it may be public policy. We'd like to encourage more entrepreneurship, not because we think everyone can or should be an entrepreneur - although some people, many people will. But the reason is because entrepreneurs in our society are the ones who are in charge of coming up with new industries.

Ninety percent of Americans worked on the farm in 1800. Now it's less than 2 percent. And, as you know, they make more than enough food for all of us. What happened to all those other people? They didn't become unemployed, but entrepreneurs like Henry Ford and Steve Jobs and Bill Gates and others invented entirely new things for them to do, and we all became wealthier as a result.

I don't think MIT professors have all the answers of what the new industries are going to be, or government officials. We have to have thousands or hundreds of thousands of entrepreneurs try different ideas. Some will work, and some won't. And in the book, we talk about a bunch of things that, you know, can maybe foster more entrepreneurship to help create a more dynamic economy that will create jobs, not just destroy them.

CHAKRABARTI: Now, what about the people who might say this is all well and good, you know, changing the way we educate, fostering entrepreneurship - I know you've even got some thoughts about tax policy, as well.


CHAKRABARTI: But the thing that disturbs them the most about this second machine age has nothing to do with how we live, but rather who we are. Because when you're talking about machines that rival us in terms of cognition and ability - I mean, that's fundamentally different than the steam-driven engines of the 18th and 19th centuries.

I mean, the thing that really makes people stop and think is: What about our basic humanity in a world of such smart machines?

BRYNJOLFSSON: I think it is fundamentally different, and we try to grapple a bit with that. It's really a new frontier that we you know, we're all going to be exploring together. The hopeful part of me sees this as a big opportunity, that as we take care of some of our economic needs, if we do it right, we will have more freedom and flexibility than ever before.

Going forward, I think we'll have less technological determinism and more ability to shape our individual lives and our society than we ever had before, and that's going to put even more weight on our values. What kinds of lives and what kind of society do we want? We need to change the conversation and start thinking about how we want to use the technology in service of those values.

There's no inevitable future here. Some of them are really dismal and disastrous, and they have tremendous inequality of opportunity and of income. They even have potentially cataclysmic results. Others are, you know, like you said, the "Star Trek" kind of economy, where a lot of our needs are taken care of, and hopefully people will be happy in that kind of world.

But unless we understand the - you know, diagnose the underlying causes of the disruption we're going through and the nature of these technologies, we're not going to get the prescriptions right.

CHAKRABARTI: Well, Erik Brynjolfsson is director of the MIT Center for Digital Business and co-author with Andrew McAfee of the new book "The Second Machine Age: Work, Progress and Prosperity in a Time of Brilliant Technologies." Erik, thank you so much.

BRYNJOLFSSON: My pleasure, Meghna.

CHAKRABARTI: You heard Erik say he's mindfully optimistic about our future with machines. We're wondering if you feel the same way. Let us know at This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.

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