My favorite podcast, Econtalk, is always worth a listen. Here are my takeaways from this week’s interview with Erik Brynjolfsson of MIT and co-author of The Second Machine Age. His book has already been in my queue, and I’ll write more about it later.
[Sorry for the messy notes: I’m just putting the highlights here of some things I learned. This deserves a much longer post]
- Driverless cars may take longer to be adopted in inner cities because they aren't allowed to "bend the rules", which is pretty much required if you're going to survive in those crowded, chaotic conditions.
- Measure the Consumer Surplus, which is about $300B/year. This metric, though difficult to measure, is arguably more relevant than GDP, because it more accurately reflects what really matters to people (how good is the "deal" I'm getting out of engaging in the economy?)
- example: Wikipedia vs. Encyclopedia Britannica
- Voltaire: work addresses (1) boredom, (2) vice, and (3) need
Drivers of change
- skill-biased technical changes
- capital-biased technical changes
- superstar-biased technical change
You must, must, must learn to adapt to new technologies.
That last point, about the importance of adaptation, is easy to ignore for most people because it’s so hard. Technology changes so quickly that even those who think they’re on top of it, you can miss the trends and fall behind.
