I’ve not yet read [amazon_link id=”1480577472″ target=”_blank” ]The Second Machine Age[/amazon_link] by Erik Brynjolfsson and Andrew McAfee but am eager to do so. This question of what technology is doing to jobs and living standards is the issue of the moment. It’s obviously tempting for people to reach for the extremes (The robots are eating our jobs! We wealth-creators are being unfairly attacked!), when the truth will be nuanced, as it always is. Of course some comment has been more thoughtful. Gavin Kelly of the Resolution Foundation wrote a measured survey of the debate (its balance belied by the headline The Robots are Coming!). This Wonkblog column (Will Robots Steal Our Jobs?) pushes back against the robo-phobia in a reasonable way by looking at the history of the first Industrial Revolution.

[amazon_image id=”1480577472″ link=”true” target=”_blank” size=”medium” ]The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies[/amazon_image]

What I do know is that Eric Schmidt is wrong. The Google chief presented this at Davos as “a race between computers and people”. On the contrary, it’s a battle between people and people. I see no robots drink champagne and nibbling canapes at the World Economic Forum. The technology creates the potential for great advances in living standards, almost always in the recent (past 250 years) past shared widely. The sharing is done by society, and the institutions that govern it.

One key institution is public education, so the masses have skills that complement technology rather than competing with it. Our education systems are struggling to adapt from the age of mass production to the modern industrial system. Another set of institutions consists of those that redistribute – collective bargaining, the welfare state since the mid-20th century, in need of reinventing. There is also the question of the ownership of the machines. The invention of the joint stock company is often overlooked as an important mechanism not only for raising capital but for sharing ownership among the growing middle class. There’s a very good book about the co-evolution of institutions and technology during the Industrial Revolution, [amazon_link id=”0226014746″ target=”_blank” ]The Institutional Revolution[/amazon_link], by Douglas Allen – well worth a read for those pondering what institutions might stop the triumph of the robots, or rather their gilded owners.

[amazon_image id=”0226014746″ link=”true” target=”_blank” size=”medium” ]Institutional Revolution: Measurement and the Economic Emergence of the Modern World (Markets and Governments in Economic History)[/amazon_image]