Monday, June 30, 2014

Automation, Labor and Capital

Here is a new thesis on the old relationship between Labor and Capital:  technology is causing them to fuse.  Do you buy it?

Erik Brynjolfsson et. al. have written in Foreign Affairs:
Machines are substituting for more types of human labor than ever before. As they replicate themselves, they are also creating more capital. This means that the real winners of the future will not be the providers of cheap labor or the owners of ordinary capital, both of whom will be increasingly squeezed by automation. Fortune will instead favor a third group: those who can innovate and create new products, services, and business models.