The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (37 page)

18. Ralph Turvey, “Review of: Toward a More Accurate Measure of the Cost of Living: Final Report to the Senate Finance Committee from the Advisory Committee to Study the Consumer Price Index. by Michael J. Boskin; Ellen R. Dullberger; Robert J. Gordon,”
Economic Journal
107, no. 445 (1997): 1913–15, doi:10.2307/2957930.

19. Jonathan Rothwell et al., “Patenting Prosperity: Invention and Economic Performance in the United States and Its Metropolitan Areas,” February 2013, http://www.brookings.edu/research/reports/2013/02/patenting-prosperity-rothwell (accessed September 12, 2013).

20. See Carol Corrado, Chuck Hulten, and Dan Sichel, “Intangible Capital and Economic Growth,” NBER Working Paper No. 11948, 2006, http://www.nber.org/papers/w11948.

21. Erik Brynjolfsson, Lorin Hitt, and Shinkyu Yang, “Intangible Assets: Computers and Organizational Capital,” Brookings Papers on Economic Activity, 2002, http://ebusiness.mit.edu/research/papers/138_Erik_Intangible_Assets.pdf (accessed August 18, 2013); Erik Brynjolfsson and Lorin M. Hitt, “Computing Productivity: Firm-Level Evidence,” SSRN Scholarly Paper (Rochester, NY: Social Science Research Network, 2003), http://papers.ssrn.com/abstract=290325.

22. Rick Burgess, “One Minute on the Internet: 640TB Data Transferred, 100k Tweets, 204 Million E-mails Sent,”
TechSpot
, http://www.techspot.com/news/52011-one-minute-on-the-internet-640tb-data-transferred-100k-tweets-204-million-e-mails-sent.html (accessed July 23, 2013).

23. “Facebook Newsroom,” http://newsroom.fb.com/content/default.aspx?NewsAreaId=21 (accessed July 23, 2013).

24. Dale Jorgenson and Barbara Fraumeni, “The Accumulation of Human and Nonhuman Capital, 1948–84,” in
The Measurement of Saving, Investment, and Wealth
(Chicago, IL: University of Chicago Press for National Bureau of Economic Research, 1989), p. 230, http://www.nber.org/chapters/c8121.pdf.

25. Adam Smith,
An Inquiry into the Nature and Causes of the Wealth of Nations
, ed. Edwin Cannan (Library of Economics and Liberty, 1904), http://www.econlib.org/library/Smith/smWN20.html (accessed September 23, 2013).

26. Ana Aizcorbe, Moylan Carol, and Robbins Carol, “Toward Better Measurement of Innovation and Intangibles,” BEA Briefing, January 2009, http://www.bea.gov/scb/pdf/2009/01%20January/0109_innovation.pdf.

27. As quoted in “GDP: One of the Great Inventions of the 20th Century,” January 2000 Survey of Current Business, http://www.bea.gov/scb/account_articles/general/0100od/maintext.htm.

28. Joseph E. Stiglitz, “GDP Fetishism,”
Project Syndicate
, http://www.project-syndicate.org/commentary/gdp-fetishism (accessed July 23, 2013).

29. “Human Development Index (HDI),”
Human Development Reports
, 2012, http://hdr.undp.org/en/statistics/hdi/ (accessed July 23, 2013).

30. “Policy—A Multidimensional Approach,”
Oxford Poverty & Human Development Initiative
, 2013, http://www.ophi.org.uk/policy/multidimensional-poverty-index/.

31. “DHS Overview,”
Measure DHS: Demographic and Health Surveys
, 2013, http://www.measuredhs.com/What-We-Do/Survey-Types/DHS.cfm (accessed September 11, 2013).

32. Joseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi, “Report by the Commission on the Measurement of Economic Performance and Social Progress,”
Council on Foreign Relations
, August 25, 2010, http://www.cfr.org/world/report-commission-measurement-economic-performance-social-progress/p22847 (accessed August 9, 2013).

33. See the Social Progress Index at http://www.socialprogressimperative.org/data/spi.

34. See the Well-Being Index at http://www.well-beingindex.com/.

35. See the MIT Billion Prices Project at http://bpp.mit.edu.

36. See, for example, Hyunyoung Choi and Hal Varian, “Predicting the Present with Google Trends,”
Google Inc.
, April 10, 2009, http://static.googleusercontent.com/external_content/untrusted_dlcp/www.google.com/en/us/googleblogs/pdfs/google_predicting_the_present.pdf (accessed September 11, 2013); Lynn Wu and Erik Brynjolfsson, “The Future of Prediction: How Google Searches Foreshadow Housing Prices and Sales,” SSRN Scholarly Paper (Rochester, NY: Social Science Research Network, 2013), http://papers.ssrn.com/abstract=2022293.

Chapter 9
THE SPREAD

1. Jonathan Good, “How Many Photos Have Ever Been Taken?,”
1000memories
, September 15, 2011, http://blog.1000memories.com/94-number-of-photos-ever-taken-digital-and-analog-in-shoebox (accessed August 10, 2013).

2. Ibid.

3. Tomi Ahonen, “Celebrating 30 Years of Mobile Phones, Thank You NTT of Japan,”
Communities Dominate Brands
, November 13, 2009, http://communities-dominate.blogs.com/brands/2009/11/celebrating-30-years-of-mobile-phones-thank-you-ntt-of-japan.html (accessed September 11, 2013).

4. Good, “How Many Photos Have Ever Been Taken?”

5. Craig Smith, “By the Numbers: 12 Interesting Instagram Stats,”
Digital Marketing Ramblings . . .
, June 23, 2013, http://expandedramblings.com/index.php/important-instagram-stats/ (accessed August 10, 2013).

6. Leena Rao, “Facebook Will Grow Headcount Quickly In 2013 To Develop Money-Making Products, Total Expenses Will Jump By 50 Percent,”
TechCrunch
, January 30, 2013, http://techcrunch.com/2013/01/30/zuck-facebook-will-grow-headcount-quickly-in-2013-to-develop-future-money-making-products/ (accessed August 10, 2013).

7. Brad Stone and Ashlee Vance, “Facebook’s ‘Next Billion’: A Q&A With Mark Zuckerberg,”
Bloomberg Businessweek
, October 4, 2012, http://www.businessweek.com/articles/2012-10-04/facebooks-next-billion-a-q-and-a-with-mark-zuckerberg (accessed September 11, 2013).

8. “Kodak’s Growth and Decline: A Timeline,”
Rochester Business Journal
, January 19, 2012, http://www.rbj.net/print_article.asp?aID=190078.

9. According to an analysis of 2006 tax returns in the United States by Emmanuel Saez of University of California, Berkeley.

10. In contrast, life expectancy for men and women with more than a high school education increased during this period.

11. Sylvia Allegretto, “The State of Working America’s Wealth, 2011,” Briefing Paper No. 292, Economic Policy Institute, Washington, D.C.

12. See for example, Josh Bivens, “Inequality, Exhibit A: Walmart and the Wealth of American Families,”
Working Economics
, Economic Policy Institute blog, http://www.epi.org/blog/inequality-exhibit-wal-mart-wealth-american/ (accessed September 17, 2013).

13. Luisa Kroll, “Inside the 2013 Forbes 400: Facts and Figures On America’s Richest,”
Forbes
, September 16, 2013, http://www.forbes.com/sites/luisakroll/2013/09/16/inside-the-2013-forbes-400-facts-and-figures-on-americas-richest/ (accessed September 16, 2013).

14. About one-third of the difference reflected technical differences in the way output prices are calculated when used in productivity calculations versus the consumer prices used in calculating income. In addition, about 12 percent was due to the growth of nonwage benefits such as health care. See Lawrence Mishel, “The Wedges between Productivity and Median Compensation Growth,” Economic Policy Institute, April 26, 2012, http://www.epi.org/publication/ib330-productivity-vs-compensation/. When looking at household income, about 20 percent of the decline reflects the fact that households are somewhat smaller than they were thirty years ago.

15. Data from the Organization for Economic Cooperation and Development (OECD) show that income inequality increased in seventeen of twenty-two nations including Mexico, the United States, Israel, United Kingdom, Italy, Australia, New Zealand, Japan, Canada, Germany, Netherlands, Luxembourg, Finland, Sweden, Czech Republic, Norway, and Denmark. See “An Overview of Growing Income Inequalities in the OECD Countries: Main Findings,” from the OECD, 2011, http://www.oecd.org/social/soc/49499779.pdf.

16. See, for instance, Robert M. Solow, “Technical Change and the Aggregate Production Function,”
Review of Economics and Statistics
39, no. 3 (1957): 312–20, doi:10.2307/1926047.

17. See David H. Autor, Lawrence F. Katz, and Alan B. Krueger, “Computing Inequality: Have Computers Changed the Labor Market?,” Working Paper (National Bureau of Economic Research, March 1997), http://www.nber.org/papers/w5956; F. Levy and R. J. Murnane,
The New Division of Labor: How Computers Are Creating the Next Job Market
(Princeton, NJ: Princeton University Press, 2012); D. Autor, “The Polarization of Job Opportunities in the U.S. Labor Market,” The Brookings Institution, http://www.brookings.edu/research/papers/2010/04/jobs-autor (accessed August 10, 2013); and Daron Acemoglu and David Autor, “Skills, Tasks and Technologies: Implications for Employment and Earnings,” Working Paper (National Bureau of Economic Research, June 2010), http://www.nber.org/papers/w16082.

18. Daron Acemoglu and David Autor, “Skills, Tasks and Technologies: Implications for Employment and Earnings,”
Handbook of Labor Economics
4 (2011): 1043–1171.

19. See “Digest of Education Statistics, 1999,” National Center for Education Statistics, http://nces.ed.gov/programs/digest/d99/d99t187.asp (accessed August 10, 2013).

20. See T. F. Bresnahan, E. Brynjolfsson, and L. M. Hitt, “Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-level Evidence,”
Quarterly Journal of Economics
, 117, no. 1 (2002): 339–76. See also E. Brynjolfsson, L. M. Hitt, and S. Yang, “Intangible Assets: Computers and Organizational Capital,” Brookings Papers on Economic Activity, 2002, pp. 137–98.

21. See Brynjolfsson, Hitt, and Yang, “Intangible Assets: Computers and Organizational Capital,” and Erik Brynjolfsson, David Fitoussi, and Lorin Hitt, “The IT Iceberg: Measuring the Tangible and Intangible Computing Assets,” Working Paper (October 2004).

22. E. Brynjolfsson and L. M. Hitt, “Computing Productivity: Firm-level Evidence,”
Review of Economics and Statistics
8, no. 4 (2003): 793–808.

23. Timothy F. Bresnahan, Erik Brynjolfsson, and Lorin M. Hitt, “Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence,”
Quarterly Journal of Economics
117, no. 1 (2002): 339–76, doi:10.1162/003355302753399526.

24. Reengineering consultants like to tell the story of how, in the seventeenth century, cows roamed around Boston Common and the neighboring areas. Over time, these cow paths became well-worn, and as shops and homes were constructed, people used the same paths for their carts and carriages. Eventually cobblestones were installed, and by the twentieth century most of the paths had been paved over with asphalt, with no more cows to be seen. As anyone who’s tried to drive in Boston can appreciate, having traffic flow designed by cows may not be the best way to lay out a modern city.

25. See David Autor, “The Polarization of Job Opportunities in the U.S. Labor Market,” Brookings Institution (April 2010), http://www.brookings.edu/research/papers/2010/04/jobs-autor (accessed August 10, 2013); and Daron Acemoglu and David Autor, “Skills, Tasks and Technologies: Implications for Employment and Earnings,” Working Paper (National Bureau of Economic Research, June 2010), http://www.nber.org/papers/w16082.

26. See N. Jaimovich and H. E. Siu, “The Trend is the Cycle: Job Polarization and Jobless Recoveries (No. w18334),” National Bureau of Economic Research, 2012.

27. As Hans Moravec put it, “it is comparatively easy to make computers exhibit adult level performance on intelligence tests or playing checkers, and difficult or impossible to give them the skills of a one-year-old when it comes to perception and mobility.” Hans Moravec,
Mind Children: The Future of Robot and Human Intelligence
(Cambridge, MA: Harvard University Press, 1988).

28. See chapter 6 in Jonathan Schaeffer,
One Jump Ahead: Computer Perfection at Checkers
(New York: Springer, 2009), http://public.eblib.com/EBLPublic/PublicView.do?ptiID=418209.

29. Quoted in Daniel Crevier,
AI: The Tumultuous History of the Search for Artificial Intelligence
(New York: Basic Books, 1993), p. 108.

30. Jack Copeland, “A Brief History of Computing,” June 2000, http://www.alantur ing.net/turing_archive/pages/Reference%20Articles/BriefHistofComp.html.

31. The mobile phone chess game Pocket Fritz won the Copa Mercosur tournament in Buenos Aires, Argentina, in 2009. “Breakthrough Performance by Pocket Fritz 4 in Buenos Aires,”
Chess News
, http://en.chessbase.com/Home/TabId/211/PostId/4005719/breakthrough-performance-by-pocket-fritz-4-in-buenos-aires.aspx (accessed August 10, 2013).

32. Steve Musil, “Foxconn Reportedly Installing Robots to Replace Workers”
CNET
, November 13, 2012, http://news.cnet.com/8301-1001_3-57549450-92/foxconn-reportedly-installing-robots-to-replace-workers/ (accessed November 13, 2012).

33. Rod Brooks gave four dollars per hour as the approximate cost of Baxter in response to a question at the Techonomy 2012 Conference in Tucson, Arizona, on November 12, 2012, during a panel discussion with Andrew McAfee.

34. Karl Marx,
Capital: A Critique of Political Economy
(New York: Modern Library, 1906), pp. 708–9.

35. See Dale Jorgenson,
A New Architecture for the U.S. National Accounts
(Chicago, IL: University of Chicago Press, 2006).

36. Susan Fleck, John Glaser, and Shawn Sprague, “The Compensation-Productivity Gap: A Visual Essay,”
Monthly Labor Review
(January 2011), http://www.bls.gov/opub/mlr/2011/01/art3full.pdf, p. 57-69.

37. L. Karabarbounis and B. Neiman, “The Global Decline of the Labor Share (No. w19136),” National Bureau of Economic Research, 2013.

38. See http://w3.epi-data.org/temp2011/BriefingPaper324_FINAL %283%29.pdf.

39. See http://blogs.wsj.com/economics/2011/09/28/its-man-vs-machine-and-man-is-losing/.

40. See, e.g., Lucian A. Bebchuk and Yaniv Grinstein, “The Growth of Executive Pay,”
Oxford Review of Economic Policy
21 (2005): 283–303; Harvard Law and Economics Discussion Paper No. 510. Available at SSRN, http://papers.ssrn.com/abstract=648682 (accessed August 10, 2013).