THE WASHINGTON POST
Over the past year, there’s been a lot of talk in economic circles about the prospect of stagnation. Because of demographics, globalization, long-term global imbalances and a slowdown in technological innovation, the argument goes, advanced economies are trapped in an extended period of slow growth in productivity, income and job creation. Recent proponents of this hypothesis include economists Robert Gordon of Northwestern University and Michael Spence of New York University; former Treasury secretary Lawrence Summers; and Tyler Cowen, my colleague at George Mason University, in his latest book, “Average Is Over.”
Now come two professors from MIT with a more optimistic and intriguing hypothesis — namely, that the global economy is on the cusp of a dramatic growth spurt driven by smart machines that finally take full advantage of advances in computer processing, artificial intelligence, networked communication and the digitization of just about everything.
“The Second Machine Age” is largely a reprise of an e-book, “Race Against the Machine,” that Erik Brynjolfsson and Andrew McAfee self-published two years ago. It builds on their work at MIT’s Center for Digital Business, along with that of “new growth” theorists such as Paul Romer, Brian Arthur and Martin Weitzman. And while Brynjolfsson and McAfee’s policy prescriptions reflect the somewhat self-referential outlook that you run across in technology enclaves such as Silicon Valley and Cambridge, their book offers a timely antidote to the economic pessimism that has taken root in the aftermath of the financial crisis… MORE