Wednesday, March 14, 2012

The Horse’s Race Against the Tractor

 Or, “How the Tractor (Yes, the Tractor) Explains the Middle Class Crisis”, an article by Derek Thompson in The Atlantic here.

It is based on the recent book by Brynjolfsson and McAfee, Race Against the Machine which explains how machines (the computer and telecommunication equipment) have been destroying middle class jobs. Their analysis is complementary to mine in “The Second XXth Century” here in which I show that the new abundance of information (post 1975) in the IT era contributed to a general downsizing of hierarchical organizations, and thus a shrinking of middle management positions and clerical jobs.

What is needed now, to re-create jobs, is a much expanded number of small, entrepreneurial firms and much more human capital allowing individual workers to occupy highly qualified jobs in which they can handle more efficiently the machines.

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