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The Second Machine Age debuted at number nine this month on The New York Times’ hardcover non-fiction bestseller list.

But it should surprise no one that people are reading. The book’s subject—how machines and computers are advancing at an exponential rate and what that means for society and the American economy—is all encompassing. Its findings are relevant not just for business, but also for government, workers, and families.

Andrew McaFee and Erik Brynjolfsson

Photo courtesy Andrew McAfee and Erik Brynjolfsson.

We are in an era of wondrous new inventions, ideas, and achievements, write the authors, MIT Sloan professor Erik Brynjolfsson and research scientist Andrew McAfee. But that comes coupled with a drastic reorganization of work, finance, and society. Self-driving cars are pretty exciting, but where will all the taxi drivers and long-haul truckers work?

Whether this new future is a good one or a bad one is up to us, the pair argues.

“A big part of what’s going on is that technology is racing ahead and our skills, our organizations, our economic institutions aren’t keeping up,” Brynjolfsson said in an interview. “And that’s leading to a bigger and bigger mismatch, a grinding of the gears. Because if those things don’t mesh, you end up with a lot of disruption and dislocation.”

In the book, fully titled The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, the authors guide readers through the forward march of progress and innovation, including mind-blowing accomplishments like the restoration of sight to the blind and affordable, easy-to-program manufacturing robots. And those are just “the warm-up acts.” Unbelievable advances in artificial intelligence and big data will be upon us almost overnight, Brynjolfsson and McAfee write.

Along with these developments comes the messy chaos that accompanies an economic and societal upheaval that will, the authors believe, outstrip even the Industrial Revolution in its impact on global society.

“We call ourselves ‘mindful optimists,’” Brynjolfsson said. “If we understand the problems that we’re facing and the opportunities that we’re facing and take the right actions, I think we could have a really, really good outcome. This could be the best thing that ever happened to humanity.”

“But at the same time, we recognize there’s no automatic good outcome, that it’s going to depend very much on our choices and the kinds of policies that we have in terms of education, fostering entrepreneurship, and tax policy,” Brynjolfsson said.

The pair detail two economic phenomena that have appeared alongside advances in technology. “Bounty” is essentially the idea that there is more wealth. That can be seen in the United States’ steady, long-term GDP growth. “Spread” will be familiar to anyone already acquainted with the idea of the one percent. Wealth is accruing unevenly, with the rich getting steadily—and sometimes fantastically—richer, and the poor and middle class struggling to maintain or improve their standard of living.

So what to do about a spike in unemployment and income inequality? In The Second Machine Age Brynjolfsson and McAfee explore, without necessarily endorsing, Pigouvian taxes, which assign costs to negative externalities such as pollution, and negative income taxes, in which individuals with little or no income receive money from the government. More concrete are their calls for investments in education, entrepreneurial growth, regulatory reform, government-supported scientific research, and immigration reform, among other recommendations.

“We looked at what’s happening and we said ‘How do you close the skills gap?’” Brynjolfsson said. “Well, it’s actually not rocket science. You invest in education and you reinvent education.”

Together with colleagues at MIT Sloan, Brynjolfsson and McAfee are leading the MIT Initiative on the Digital Economy (IDE), an effort to address the very concerns, policies, and ideas discussed in The Second Machine Age. In addition to studying the future of work and employment, researchers at the initiative are also examining new business models and the implications of big data and social networks.

MIT faculty, postdocs, PhD students, and MBA students at the IDE are working to map the changing skillsets that are needed to complement the new economy in the age of machines. The group is also attempting to better understand “the boundary between mind and machine,” Brynjolfsson said. “The kind of tasks that humans can do well and those that machines can do well.”

“We really think that MIT can and should be the epicenter of this discussion,” Brynjolfsson said. “It brings together the best intellectual curiosity and, for that matter, excellence in all these areas. World leaders in robotics and [artificial intelligence]. World leaders in economics and management. And a lot of [students] are creating this new world, both the business models and the technologies.”

“It’s not just interesting times,” he said. “This is an interesting place.”

Source: MIT Sloan School of Management

Hear more from Erik Brynjolfsson at EmTech 2014.

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Tagged: Computing, artificial intelligence, big data, Andrew McAfee, Erik Brynjolfsson

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