• The book explains how technology is not a neutral force that automatically leads to progress, but rather a product of human choices that reflect the interests and power of different groups in society.
• The book shows how technological innovations have often been used to enrich and empower elites, while leaving the majority of people behind or even worse off, and how ordinary people have sometimes challenged the dominant technological paradigms and demanded more equitable and participatory ways of organizing production and communication.
• The book offers a set of principles and policies that could help us reclaim control over technology and use it for the common good, and challenges us to rethink our assumptions about technology and progress, and to imagine alternative possibilities for the future.

Recommendation

In this deep dive into the history of innovation, MIT economists Daron Acemoglu and Simon Johnson adeptly illustrate that humans have been responsible for some remarkable technological advancements, even during seemingly fallow periods like the Middle Ages. But, they argue, the benefits of technical Progress tend to accrue almost entirely to those in power; today, Big Tech concentrates greater wealth into fewer hands. Acemoglu and Johnson call for interventions that can help guide progress, including in AI development, while ensuring that its gains go to more people.

Take-Aways

• “Techno-optimism” has paid dividends but also exacted tolls.
• The Panama Canal remains a cautionary tale in the overarching story of progress.
• Even during the Middle Ages, humans created many technical advances.
• Eli Whitney’s cotton gin was a technological breakthrough that spawned a massive and unexpected human cost.
• The Industrial Revolution ushered in unprecedented economic growth.
• The early decades of the Industrial Age were ruthlessly Darwinian.
• The 1950s and 1960s were a golden age of shared prosperity.
• Society should deploy technology that helps people and the planet.

Summary

“Techno-optimism” has paid dividends but also exacted tolls.

Throughout history, technological progress and economic growth have been powered by a potent mix of ingredients. One driver is optimism about technology: the belief that human ingenuity can overcome natural hurdles to progress. Another is faith in markets: the idea that the private sector will find a way to fund and profit from innovation. And a third is a willful ignorance of the costs of progress, whether they exact a human toll – such as the thousands of people who died in a failed first attempt at building the Panama Canal – or an environmental cost, as in the climate change created by the widespread use of fossil fuels.

“Visionaries derive their power partly from the blinders they have on – including the suffering that they ignore.”

French diplomat and entrepreneur Ferdinand de Lesseps illustrated the extremes of this approach in the 19th century. He led the development of the Suez Canal, starting in 1861. De Lesseps commandeered an army of Egyptian workers who were all but slaves – they slept on the ground in the desert, and they were fed meager rations and paid subpar wages. After de Lesseps lost his access to cheap labor in 1863, his project seemed dead. But technology came to the rescue, in the form of excavation and dredging equipment that replaced the poorly paid laborers. De Lesseps’s canal finished behind schedule, but it was built, and the ambitious infrastructure project reshaped global shipping.

The Panama Canal remains a cautionary tale in the overarching story of progress.

The Suez Canal made de Lesseps famous, and he tried to recapture the magic by constructing a canal through Panama. The Suez Canal was completed in 10 years; De Lesseps figured that the Panama Canal would take less time. He ignored such obvious barriers as a mountain range in the path of the canal, not to mention a flood-prone river. De Lesseps believed that he could hire plenty of cheap workers from the West Indies, and that inventors would create new devices to speed progress. Perhaps most damningly, de Lesseps ignored the risk of malaria and yellow fever. During the 1880s, some 22,000 workers died while toiling on the Panama Canal construction site.

“What you do with technology depends on the direction of progress you are trying to chart and what you regard as an acceptable cost.”

A typical visionary, de Lesseps was a dyed-in-the-wool optimist. Even as thousands of workers perished of tropical diseases, de Lesseps insisted that epidemics didn’t exist in Panama. After an earthquake shook the construction site in 1882, de Lesseps publicly promised that no more earthquakes would occur. De Lesseps was the classic cheerleader – he persuaded investors and workers to imagine a rosy future and to not fret about any of the looming downsides. But massive financial losses forced de Lesseps to abandon the project. American engineers later completed the Panama Canal, and history remembers de Lesseps for his hubris.

Even during the Middle Ages, humans created many technical advances.

The popular view of human history holds that the Dark Ages were a long period of intellectual stagnation before the Renaissance exploded in the 1300s. In truth, many innovations emerged from Europe during the Middle Ages. A partial list includes a refinement of crop rotations, the more sophisticated use of manure as fertilizer, the invention of the heavy-wheeled plow, and improvements in barges and ships. The advent of chimneys led to better indoor air quality. Mirrors, mechanical clocks, spinning wheels and eyeglasses all came out of this period. Perhaps most important was the development of water- and wind-powered mills in 12th-century England.

“Progress has a way of leaving many people behind unless its direction is charted in a more inclusive way.”

Waterwheels and windmills boosted agricultural yields and allowed for the mass production of bread, ale and textiles. While the medieval period was an epoch of overlooked innovation, it’s also true that greater economic output did nothing to improve the lot of the peasantry. The Norman rulers of England didn’t reward subsistence farmers by allowing them to keep more of their production; instead, peasants were compelled to work more and to pay a greater percentage of their crops to their feudal lords. Rather than boosting living standards, England’s productivity surge led to a building boom of churches, cathedrals and monasteries. The technological advances of medieval Europe created an economic expansion, but the spoils went entirely to the ruling class.

Eli Whitney’s cotton gin was a technological breakthrough that spawned a massive and unexpected human cost.

In 1793, the American inventor Eli Whitney developed a device designed to process a crop known as upland cotton, which had sticky green seeds that were difficult to cull. Whitney’s new machine removed the seeds, and the inventor boasted: “One man and a horse will do more than 50 men with the old machines.” Whitney’s breakthrough meant that subsistence farmers from South Carolina to Texas could suddenly grow a lucrative cash crop. From 1790 to 1820, cotton output in the American South soared from just 1.5 million pounds to 167.5 million pounds. The region became the world capital of cotton cultivation.

“Improved productivity most definitely did not mean higher wages or better treatment of Black workers.”

The downside of the South’s cotton boom was staggering. The number of enslaved people in the South exploded during the 1800s. Landowners and other white Southerners prospered as a result of the rapid growth in the cotton trade, but the frontline laborers faced even harsher exploitation. In an echo of the plight of peasants in the Middle Ages, the invention of a better cotton gin goosed productivity but did nothing to spread the wealth or improve living conditions for those at the bottom of the economic ladder.

The Industrial Revolution ushered in unprecedented economic growth.

For much of human history, most people barely subsisted. Even as the global population expanded from 100 million in 400 BC to 610 million in 1700 AD, no more than one-tenth of humans possessed any affluence. By 1800, the global population had increased to 900 million. Still, economic output crept forward at a barely noticeable pace. While England and the Netherlands were prominent exceptions, most of the world experienced economic stagnation. But in 1820, as the Industrial Age kicked into gear, per capita growth rates exploded.

“We live in an age obsessed with technology and the progress it will deliver.”

The 19th century was a time of eye-popping progress. Rail networks expanded, ships grew bigger, electricity became widely available and public health improved. Wealth surged, and life expectancies increased. While such advances seem mundane now, it’s worth remembering that the first trains were a technological marvel. The earliest steam engines didn’t generate enough power to pull a single locomotive, let alone a train full of coal cars. One engine prototype after another failed. The rails themselves were another problem. Early attempts at trains were hampered by a lack of traction, both to get the locomotive started and to bring it to a stop. The very first locomotive, demonstrated in England in the early 19th century, reached a breakneck speed of six miles per hour. At the time, brakes didn’t exist; an engineer stopped a locomotive by adjusting valves to put it in reverse.

The early decades of the Industrial Age were ruthlessly Darwinian.

Once the train problem was solved, the Industrial Revolution was in full swing. That required coal, and coal mining in 1800s England relied on child labor. In 1842, the Royal Commission of Inquiry into Children’s Employment conducted a three-year study that found that boys and girls as young as eight years old worked in coal mines, toiling as long as 12 hours per day in dark, dangerous conditions. One eight-year-old girl reported that she disliked the work because she was afraid of the dark, where she was forced to spend long hours. Employers valued children because they were small enough to squeeze into tight spaces.

“Technology’s bias against working people is always a choice, not an inevitable side effect of ‘progress’.”

Mine operators were unapologetic about employing children. If they had to re-engineer their mines to allow for larger workers, they argued, the mines would become unprofitable and have to close. Parents of the child workers also shrugged, saying they had no other way to feed their families. Even after the Royal Commission’s report, children continued to work underground. Conditions grew harsher as miners dug deeper to find fresh seams. Mechanization also added to workers’ misery – only with waterwheels and steam engines could mines produce coal from as deep as 300 meters underground. While child labor provided a vivid example of the inequities of coal mining, adults fared poorly, too. The wealthy grew wealthier during the Industrial Revolution, but coal miners endured poor pay and high mortality rates.

“A different path for technology and distributing the gains from higher productivity necessarily implied a different vision.”

By 1900, Britain’s chaotic economy had transformed into a much more orderly place. Child labor all but vanished, working hours were limited and corporal punishment disappeared from workplaces. Wages rose 123% from 1840 to 1900. What’s more, new environmental rules brightened London’s notoriously dreary skyline. The worker-friendly improvements spread to the rest of Europe and to other industrializing nations. The advances were hard-fought, but they taught a valuable lesson: Societies and economies don’t exist solely at the whim of markets; rather, innovation can be shaped in ways that share its benefits.

The 1950s and 1960s were a golden age of shared prosperity.

The post-World War II economy in the United States grew rapidly – and inequality declined. In the 1920s, the top 1% of earners collected 22% of total income. By 1960, the top 1% pulled down just 13% of income. In a welcome trend for workers, wage growth outpaced productivity growth. In contrast to developments in the Middle Ages, the cotton boom in the American South, and the start of the Industrial Revolution in England, US employees were capturing their fair share of the economy. What’s more, innovations didn’t devastate displaced workers. When AT&T introduced automated telephone switchboards, for instance, female switchboard operators lost those jobs but quickly found employment elsewhere.

“Any hopes that the decades after the initial phases of the computer revolution would bring more shared prosperity were dashed rather swiftly.”

From 1949 to 1973, American wages outpaced inflation by 2.5% per year. After 1980, however, wage growth slowed. The news was especially bad for those with only high school diplomas – they lost ground, while workers with postgraduate degrees prospered. Wage inequality accelerated after 1980. The bad decades for workers correspond with the rise of computing power. By allowing machines to perform middle-skill tasks in factories and offices, automation intensified income inequality. As a result, blue-collar workers in particular saw their wages and prospects decline.

Society should deploy technology that helps people and the planet.

Coal and petroleum fueled the Industrial Age at a pace that accelerated in 1850, when the British chemist James Young learned how to refine oil. But fossil fuels began to hit the limits of their usefulness in the 1980s, when it became clear that burning oil was warming the planet. Many have begun to view climate change as an existential threat and green energy as an imperative. New advances in renewable energy have switched the balance in favor of green energy. While producing a kilowatt-hour of energy from fossil fuels costs $50 to $150, solar power can be harvested for just $40 to $54, and a kilowatt-hour of wind power costs less than $40.

“Fossil-fuel emissions are first and foremost a technology problem.”

While the technical know-how to create solar power has existed since the late 1800s, only in the early 21st century has solar power become commercially viable. Despite the impressive progress on green energy, major obstacles remain: Energy storage is not yet cost-effective, and industries such as airlines and agriculture remain dependent on fossil fuels. What’s more, China and India produce growing levels of emissions each year. One way to guide innovation in the right way would be for governments to provide additional subsidies for green energy.

The arrival of generative artificial intelligence requires that technology become more people-friendly – creating opportunities for individuals rather than just replacing them. Some relevant ways to “redirect technology” today include:

• Big Tech’s monopoly needs to be broken up – When Standard Oil’s monopoly ended in 1911, the company held a market share of 90%. A century later, tech giants such as Google, Facebook and Amazon have amassed similarly imposing power in their fields. The tech giants must be broken up. For instance, Facebook should be forced to divest itself of WhatsApp and Instagram.
• Tax policy requires reform – In the United States, labor is taxed at a rate of 25%, while an employer buying automation equipment and labor-saving software is taxed at just 5%. In other words, companies gain a huge tax advantage by investing not in workers but in the technology to replace workers.
• Governments should invest more in worker training – A majority of employees learn their most useful skills while on the job. Employers foot the bill for training, with little guarantee that a newly trained staffer will remain with the company. The United States should boost public subsidies for private employers investing in worker training.
• Consumers’ privacy and data must be protected – In the tech age, attempts at protecting consumer privacy have sputtered, largely because the public isn’t aware of how tech companies use people’s personal data. A new model of data ownership could protect consumers and limit Big Tech.

About the Authors

Daron Acemoglu is a professor at MIT and the co-author of The Narrow Corridor and Why Nations Fail. Simon Johnson is a professor at the MIT Sloan School and was formerly chief economist at the International Monetary Fund. He is the co-author of Jump-Starting America and 13 Bankers.

Review

The book is a bold and ambitious attempt to explain how technology has shaped human history and society over the past thousand years, and how we can redirect its path to create a more inclusive and democratic future. The authors, both renowned economists, argue that technology is not a neutral force that automatically leads to progress, but rather a product of human choices that reflect the interests and power of different groups in society.

They show how technological innovations have often been used to enrich and empower elites, while leaving the majority of people behind or even worse off. They also demonstrate how ordinary people have sometimes challenged the dominant technological paradigms and demanded more equitable and participatory ways of organizing production and communication.

The book covers a wide range of topics, from the evolution of agriculture and industry to the rise of digital technologies and artificial intelligence, and offers a rich historical perspective that challenges many conventional narratives about technology and development.

The book is a remarkable achievement that combines rigorous analysis, engaging storytelling, and visionary thinking. The authors draw on their extensive knowledge of economics, history, and politics to provide a comprehensive and nuanced account of how technology has influenced human welfare and social change.

They also offer a compelling critique of the current state of affairs, where a few tech giants dominate the digital landscape and threaten to undermine democracy and human dignity. They propose a set of principles and policies that could help us reclaim control over technology and use it for the common good. The book is not only informative, but also inspiring and provocative. It challenges us to rethink our assumptions about technology and progress, and to imagine alternative possibilities for the future. It is a must-read for anyone who cares about the role of technology in society and the fate of humanity in the 21st century.

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