“Technological revolutions happen in two main phases: the installation phase and the deployment phase,” observes Angel of the Year and new Andreessen Horowitz GP Chris Dixon, who says that the turning point between those phases for the Age of Information is…now.
Meanwhile, “profits have surged as a share of national income, while wages and other labor compensation are down,” notes Paul Krugman. Walter Russell Mead agrees: “The old industrial middle class…has been hollowed out, and no comparable source of stable high income employment has emerged.” Recent data supports that: “Incomes rose more than 11 percent for the top 1 percent of (American) earners during the economic recovery, but barely at all for everybody else … Median household income is about 9 percent lower than it was in 1999.”
Coincidence? Nope. The great tech revolution of the last 30 years is finally beginning to metastasize into every other human domain–in other words, software is eating the world, endangering almost every job there is. I argued a few weeks ago that this means America has now hit peak jobs. Let me now unpack that a bit.
For 50 years now Moore’s Law has been (to oversimplify) doubling computing power every two years. People like Ray Kurzweil and Vernor Vinge look at that astonishing history of nonstop exponential growth and predict a technological singularity within our lifetimes.
Me, I’m pretty skeptical. Kurzweil claims that whenever technology hits a limit, “a paradigm shift (i.e., a fundamental change in the approach) occurs, which enables exponential growth to continue.” That’s not much more than a convenient article of faith. As Peter Thiel points out, “technological progress has fallen short in many domains. Consider the most literal instance of non-acceleration: We are no longer moving faster. The centuries-long acceleration of travel speeds … reversed with the decommissioning of the Concorde in 2003.”
On the other end of the spectrum from Kurzweil and Vinge, there are people who think that nothing new is going on: witness Megan McCardle’s dismissal of the economic troubles faced by America’s middle class as “a slight expected income downshift during the Great Recession” in an otherwise bizarre and statistically nonsensical piece.
The reality seems to be somewhere in between. Moore’s Law has finally escaped the confines of the tech sector; as a result, our world is no longer changing linearly, and what’s more its rate of change is increasing; but Kurzweil’s would-be exponential growth is still damped down by the enormous technological barriers outside of the relatively simple world of semiconductors, by regulatory restrictions, and by simple human unwillingness to change that fast.