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  • The writer George Eliot cautioned us that,

  • among all forms of mistake,

  • prophecy is the most gratuitous.

  • The person that we would all acknowledge

  • as her 20th-century counterpart, Yogi Berra, agreed.

  • He said, "It's tough to make predictions,

  • especially about the future."

  • I'm going to ignore their cautions

  • and make one very specific forecast.

  • In the world that we are creating very quickly,

  • we're going to see more and more things

  • that look like science fiction,

  • and fewer and fewer things that look like jobs.

  • Our cars are very quickly going to start driving themselves,

  • which means we're going to need fewer truck drivers.

  • We're going to hook Siri up to Watson

  • and use that to automate a lot of the work

  • that's currently done by customer service reps

  • and troubleshooters and diagnosers,

  • and we're already taking R2D2,

  • painting him orange, and putting him to work

  • carrying shelves around warehouses,

  • which means we need a lot fewer people

  • to be walking up and down those aisles.

  • Now, for about 200 years,

  • people have been saying exactly what I'm telling you --

  • the age of technological unemployment is at hand

  • starting with the Luddites smashing looms in Britain

  • just about two centuries ago,

  • and they have been wrong.

  • Our economies in the developed world have coasted along

  • on something pretty close to full employment.

  • Which brings up a critical question:

  • Why is this time different, if it really is?

  • The reason it's different is that, just in the past few years,

  • our machines have started demonstrating skills

  • they have never, ever had before:

  • understanding, speaking, hearing, seeing,

  • answering, writing, and they're still acquiring new skills.

  • For example, mobile humanoid robots

  • are still incredibly primitive,

  • but the research arm of the Defense Department

  • just launched a competition

  • to have them do things like this,

  • and if the track record is any guide,

  • this competition is going to be successful.

  • So when I look around, I think the day is not too far off at all

  • when we're going to have androids

  • doing a lot of the work that we are doing right now.

  • And we're creating a world where there is going to be

  • more and more technology and fewer and fewer jobs.

  • It's a world that Erik Brynjolfsson and I are calling

  • "the new machine age."

  • The thing to keep in mind is that

  • this is absolutely great news.

  • This is the best economic news on the planet these days.

  • Not that there's a lot of competition, right?

  • This is the best economic news we have these days

  • for two main reasons.

  • The first is, technological progress is what allows us

  • to continue this amazing recent run that we're on

  • where output goes up over time,

  • while at the same time, prices go down,

  • and volume and quality just continue to explode.

  • Now, some people look at this and talk about

  • shallow materialism,

  • but that's absolutely the wrong way to look at it.

  • This is abundance, which is exactly

  • what we want our economic system to provide.

  • The second reason that the new machine age

  • is such great news is that, once the androids

  • start doing jobs, we don't have to do them anymore,

  • and we get freed up from drudgery and toil.

  • Now, when I talk about this with my friends

  • in Cambridge and Silicon Valley, they say,

  • "Fantastic. No more drudgery, no more toil.

  • This gives us the chance to imagine

  • an entirely different kind of society,

  • a society where the creators and the discoverers

  • and the performers and the innovators

  • come together with their patrons and their financiers

  • to talk about issues, entertain, enlighten,

  • provoke each other."

  • It's a society really, that looks a lot like the TED Conference.

  • And there's actually a huge amount of truth here.

  • We are seeing an amazing flourishing taking place.

  • In a world where it is just about as easy

  • to generate an object as it is to print a document,

  • we have amazing new possibilities.

  • The people who used to be craftsmen and hobbyists

  • are now makers, and they're responsible

  • for massive amounts of innovation.

  • And artists who were formerly constrained

  • can now do things that were never, ever possible

  • for them before.

  • So this is a time of great flourishing,

  • and the more I look around, the more convinced I become

  • that this quote, from the physicist Freeman Dyson,

  • is not hyperbolic at all.

  • This is just a plain statement of the facts.

  • We are in the middle of an astonishing period.

  • ["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]

  • Which brings up another great question:

  • What could possibly go wrong in this new machine age?

  • Right? Great, hang up, flourish, go home.

  • We're going to face two really thorny sets of challenges

  • as we head deeper into the future that we're creating.

  • The first are economic, and they're really nicely summarized

  • in an apocryphal story about a back-and-forth

  • between Henry Ford II and Walter Reuther,

  • who was the head of the auto workers union.

  • They were touring one of the new modern factories,

  • and Ford playfully turns to Reuther and says,

  • "Hey Walter, how are you going to get these robots

  • to pay union dues?"

  • And Reuther shoots back, "Hey Henry,

  • how are you going to get them to buy cars?"

  • Reuther's problem in that anecdote

  • is that it is tough to offer your labor to an economy

  • that's full of machines,

  • and we see this very clearly in the statistics.

  • If you look over the past couple decades

  • at the returns to capital -- in other words, corporate profits --

  • we see them going up,

  • and we see that they're now at an all-time high.

  • If we look at the returns to labor, in other words

  • total wages paid out in the economy,

  • we see them at an all-time low

  • and heading very quickly in the opposite direction.

  • So this is clearly bad news for Reuther.

  • It looks like it might be great news for Ford,

  • but it's actually not. If you want to sell

  • huge volumes of somewhat expensive goods to people,

  • you really want a large, stable, prosperous middle class.

  • We have had one of those in America

  • for just about the entire postwar period.

  • But the middle class is clearly under huge threat right now.

  • We all know a lot of the statistics,

  • but just to repeat one of them,

  • median income in America has actually gone down

  • over the past 15 years,

  • and we're in danger of getting trapped

  • in some vicious cycle where inequality and polarization

  • continue to go up over time.

  • The societal challenges that come along

  • with that kind of inequality deserve some attention.

  • There are a set of societal challenges

  • that I'm actually not that worried about,

  • and they're captured by images like this.

  • This is not the kind of societal problem

  • that I am concerned about.

  • There is no shortage of dystopian visions

  • about what happens when our machines become self-aware,

  • and they decide to rise up and coordinate attacks against us.

  • I'm going to start worrying about those

  • the day my computer becomes aware of my printer.

  • (Laughter) (Applause)

  • So this is not the set of challenges we really need to worry about.

  • To tell you the kinds of societal challenges

  • that are going to come up in the new machine age,

  • I want to tell a story about two stereotypical American workers.

  • And to make them really stereotypical,

  • let's make them both white guys.

  • And the first one is a college-educated

  • professional, creative type, manager,

  • engineer, doctor, lawyer, that kind of worker.

  • We're going to call him "Ted."

  • He's at the top of the American middle class.

  • His counterpart is not college-educated

  • and works as a laborer, works as a clerk,

  • does low-level white collar or blue collar work in the economy.

  • We're going to call that guy "Bill."

  • And if you go back about 50 years,

  • Bill and Ted were leading remarkably similar lives.

  • For example, in 1960 they were both very likely

  • to have full-time jobs, working at least 40 hours a week.

  • But as the social researcher Charles Murray has documented,

  • as we started to automate the economy,

  • and 1960 is just about when computers started to be used by businesses,

  • as we started to progressively inject technology

  • and automation and digital stuff into the economy,

  • the fortunes of Bill and Ted diverged a lot.

  • Over this time frame, Ted has continued

  • to hold a full-time job. Bill hasn't.

  • In many cases, Bill has left the economy entirely,

  • and Ted very rarely has.

  • Over time, Ted's marriage has stayed quite happy.

  • Bill's hasn't.

  • And Ted's kids have grown up in a two-parent home,

  • while Bill's absolutely have not over time.

  • Other ways that Bill is dropping out of society?

  • He's decreased his voting in presidential elections,

  • and he's started to go to prison a lot more often.

  • So I cannot tell a happy story about these social trends,

  • and they don't show any signs of reversing themselves.

  • They're also true no matter which ethnic group

  • or demographic group we look at,

  • and they're actually getting so severe

  • that they're in danger of overwhelming

  • even the amazing progress we made with the Civil Rights Movement.

  • And what my friends in Silicon Valley

  • and Cambridge are overlooking is that they're Ted.

  • They're living these amazingly busy, productive lives,

  • and they've got all the benefits to show from that,

  • while Bill is leading a very different life.

  • They're actually both proof of how right Voltaire was

  • when he talked about the benefits of work,

  • and the fact that it saves us from not one but three great evils.

  • ["Work saves a man from three great evils: boredom, vice and need." — Voltaire]

  • So with these challenges, what do we do about them?

  • The economic playbook is surprisingly clear,

  • surprisingly straightforward, in the short term especially.

  • The robots are not going to take all of our jobs in the next year or two,

  • so the classic Econ 101 playbook is going to work just fine:

  • Encourage entrepreneurship,

  • double down on infrastructure,

  • and make sure we're turning out people

  • from our educational system with the appropriate skills.

  • But over the longer term, if we are moving into an economy

  • that's heavy on technology and light on labor,

  • and we are, then we have to consider

  • some more radical interventions,

  • for example, something like a guaranteed minimum income.

  • Now, that's probably making some folk in this room uncomfortable,

  • because that idea is associated with the extreme left wing

  • and with fairly radical schemes for redistributing wealth.

  • I did a little bit of research on this notion,

  • and it might calm some folk down to know that

  • the idea of a net guaranteed minimum income

  • has been championed by those frothing-at-the-mouth socialists

  • Friedrich Hayek, Richard Nixon and Milton Friedman.

  • And if you find yourself worried

  • that something like a guaranteed income

  • is going to stifle our drive to succeed

  • and make us kind of complacent,

  • you might be interested to know that social mobility,

  • one of the things we really pride ourselves on in the United States,

  • is now lower than it is in the northern European countries

  • that have these very generous social safety nets.

  • So the economic playbook is actually pretty straightforward.

  • The societal one is a lot more challenging.

  • I don't know what the playbook is

  • for getting Bill to engage and stay engaged throughout life.

  • I do know that education is a huge part of it.

  • I witnessed this firsthand.

  • I was a Montessori kid for the first few years of my education,

  • and what that education taught me

  • is that the world is an interesting place

  • and my job is to go explore it.

  • The school stopped in third grade,

  • so then I entered the public school system,

  • and it felt like I had been sent to the Gulag.