Friday, November 25, 2011

Economic Eras are Rough During the Transition

Fundamental economic transitions always are times of social stress. The transition from agriculture to manufacturing was hugely disruptive. We might be in the midst of another great transformation from manufacturing to "information" as the basis of the economy. If history is any guide, the disruptions we are seeing are a byproduct.

The good news about information technology, according to Erik Brynjolfsson and Andrew McAfee, the authors of  Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy  is that it’s making America more innovative, productive and richer.

But the bad news, the two MIT professors add, is that this new wealth, innovation and productivity is being spread unequally, so that only a minority of Americans are reaping the benefits from it. The Internet Is Making Us Both Richer and More Unequal

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