Brilliant technologies
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Brilliant technologies

Summary
Brynjolfsson and McAfee explore the effects of Moore's law on the economy.  They argue it has generated exponential growth.  This has been due to innovation.  It has created a huge bounty of additional wealth is schematically useful information and its equivalent, schematically useful energy, to paraphrase Beinhocker.  It is useful because an agent has schematic strategies that can utilize the information or energy to extend or leverage control of the cognitive niche.  
.  But the wealth is spread unevenly across society.  They look at the short and long term implications of the innovation is the economic realization of invention and combinatorial exaptation. 
bounty and spread and the possible future of technology

Following our summary of their arguments RSS is Rob's Strategy Studio comments from the perspective of CAS theory. 

The Second Machine Age
In Erik Brynjolfsson and Andrew McAfee's book 'The Second Machine Age' they argue we are experiencing:
  1. The full force of digital technology
  2. Highly beneficial changes.  An exponential increase in variety and volume that is the main force of economic growth. 
  3. Changes that bring difficult challenges including technology replacing humans in current job roles.  
Initially they ask the question what are the most important developments in human history?  They argue that James Watt's steam engine underlies the sudden, sharp and sustained jump in human progress. 

They conclude that the full force of digital technologies has recently been achieved launching a second machine age.  Further the transformations will be profoundly beneficial as long as the challenges are managed proactively.  The variety and volume of intellectual and physical consumption will expand.  Interventions can maximize the bounty generated while limiting the negative effects of the increasing spread between the most and least successful

Brynjolfsson and McAfee use recent high technology product examples to make the point.  They list: digital diagnosis with IBM's Watson is IBM's computer augmented human intelligence service. 
, Apple's Siri is Apple's voice responsive computer augmented human intelligence service.   listening and talking to us, 3D is 'n' dimensional, where n is the number of dimensions.   printing, Google's driverless car and computers writing high quality prose. 

They note that analysts had developed the view that people are far superior at pattern recognition and coping with complexity, M. Mitchell Waldrop describes a vision of complexity via:
  • Rich interactions that allow a system to undergo spontaneous self-organization
  • Systems that are adaptive
  • More predictability than chaotic systems by bringing order and chaos into
  • Balance at the edge of chaos 
while machines were effective at rote tasks.  This set expectations that machines would not be driving, talking, participating in typical human tasks in the general environment or diagnosing what is happening around them today or in the near future.   But the predictions based on this view have proven hopelessly wrong. 

Siri is Apple's voice responsive computer augmented human intelligence service.   allows a broad range of voice based interactions with cloud based services.  While not perfect it seems likely that it will get better and better over the next ten years.  IBM's Watson is IBM's computer augmented human intelligence service. 
was far superior to the best humans at Jeopardy is a television quiz game where contestants compete to solve cryptic questions.   coping with the cryptic clues.  It seems likely that it will be able to handle diagnosis in other domains. 

Robots have begun to broaden out from their initial niche of repetitive operations within well-defined environments.  Brynjolfsson and McAfee illustrate the shift with a variety of new robots including Rodney Brooks' Baxter.  Baxter has no legs being wheeled into position by people.  It is programmed by shop floor workers who move its arms to teach it the new role.  Baxter can sense and manipulate lots of different objects with its grips and suction cups.  Baxter competes with humans by being tireless and cheap.  It doesn't need
The complexity and problems of the US Health network is described in terms of complex adaptive system (CAS) theory. 

The network:
  • Is deeply embedded in the US nation state. It reflects the conflict between two opposing visions for the US.  The emergence of a parasitic elite further constrains the choices available to improve the efficiency and effectiveness of the network. 
  • Is incented to focus on localized competition generating massive & costly duplication of services within physician based health care operations instead of proven public health strategies.  This process drives increasing research & treatment complexity and promotes hope for each new technological breakthrough. 
  • Is amplified by the legislatively structured separation and indirection of service development, provision, reimbursement and payment. 
  • Is impacted by the different political strategies for managing the increasing cost of health care for the demographic bulge of retirees.  
  • Is presented with acute and chronic problems to respond to.  As currently setup the network is tuned to handle acute problems.  The interactions with patients tend to be transactional. 
  • Includes a legislated health insurance infrastructure which is:
    • Costly and inefficient
    • Structured around yearly contracts which undermine long-term health goals and strategies.  
  • Is supported by increasingly regulated HCIT which offers to improve data sharing and quality but has entrenched commercial EHR products deep within the hospital systems. 
healthcare
or a pay check.  Brynjolfsson and McAfee are convinced that the robotics' market is on the cusp of explosive growth.  DARPA is defense advanced research projects agency of the US department of defense.  's robotics' challenge is focusing innovation is the economic realization of invention and combinatorial exaptation. 
on the area. 

Engineers now view 3D is 'n' dimensional, where n is the number of dimensions.   printing as an enabling technology offering them the opportunity to deploy plastics, metals, and biological cells under fine grained computer control. 

Brynjolfsson and McAfee ask why the predictions were so wrong.  They conclude it is due to the nature of technological progress which is:
Moore's law and exponential growth
Moore's law, Gordon Moore characterized the two yearly doubling of the number of transistors in each new generation of integrated circuit. 
has held true for 50 years and seems likely to continue in the near future (except: May 2016, Oct 2016).  This doubling in the number of semiconductor devices that can be purchased for a dollar each year expands the flexibility and reach of the technology platform.  Brynjolfsson and McAfee site the example of advanced research technologies such as supercomputing facilities from 1985 that have been deployed into broadly available personal computing technologies by 2011. 

The continued exponential increase in:

Brynjolfsson and McAfee note that as the exponential doubling passes the 32 time without constraint on the rate (every 12 to 18 months) the effects become more and more powerful.  They note that the good ideas of the computer industry's engineers and scientists are maintaining the constant doubling.  So far they have found ways to overcome any physical constraint that started to inhibit the growth rate.  As long as they continue to do this the further doublings will have even more impact.  Digital technologies are in the post 32 doubling situation.  The later years of Moore's law have exponential significance.  2**64 is a huge number.  Humans have had limited experience of such situations.  We can't easily comprehend numbers of this size and doublings occurring this fast.  And so we find it hard to extrapolate effectively.  But we can observe science fiction being made reality. 

Not just computers -- Moore's law spreads
That allows the combination of more and more innovations.  Innovations that were initially isolated to costly and specialized computers due to cost and power limitations.  These combinations of innovations are subsequently deployed on cheaper, more powerful and more connected infrastructure.  Moore's law thus spreads to game consoles, tablets, Wi-Fi is a wireless local area network technology based on IEEE 802.11 standards.   networks, GPS is global positioning system, a satellite based navigation system.  It uses relativity's influence on distant clocks and Doppler shifts to construct an accurate 3D positioning grid, generated from space and allowing objects on earth to determine their position within the grid. 
receivers, accelerometers, gyroscopes, light sensors, cameras. 

They also note that we are very poor at identifying or comprehending exponential growth.  But that once a phenomenon has been identified as exponential it is easy to model via a log n/n plot.  They site notable examples of exponential progress making science fiction become reality. 

The $150 Microsoft Kinect video-game accessory, released in 2010 and currently the fastest selling device ever, includes various digital sensors, a video camera, an infra-red depth perception system, onboard processors and control software provided the computing and sensing resources needed to perform SLAM, simultaneous localization and mapping is the process of building up a map of an unfamiliar building as one moves through it.   operations allowing the representation of both an object such as a person and its surroundings.  Animals have evolved extensive parallel sensory and processing facilities to maintain SLAM representations of themselves and other aspects of their proximate environment.  Kinect offered equivalent capabilities for MIT is Massachusetts Institute of Technology.   modeling software Kintinuous to use, just two years after a 2008 review of SLAM had concluded it was not possible to perform due to its computational costs. 

The Velodyne Cyclopean LIDAR is a portmanteau of 'light' and 'RADAR' associated with a distance measuring remote sensing technology where a target is illuminated by a laser and the reflected light is analyzed. 
includes 64 laser beams and detectors which generate huge amounts of sensing data used by Google's autonomous car computers to model a 3D is 'n' dimensional, where n is the number of dimensions.   picture extending 100 meters in all directions around it. 

Digitization of everything
Brynjolfsson and McAfee note that digital information supports new kinds of science: 

Innovation: declining or recombining
Brynjolfsson and McAfee third driver of progress is innovation is the economic realization of invention and combinatorial exaptation. 
.  Again there is contention about what is happening and evidence of predictive failure of some current models of how innovation occurs.  While there is agreement on Schumpeter's view of cycles of creative destruction they contrast:
  • Robert Gordon's assessment that each GPT is general purpose technology which economic historian Gavin Wright defines as deep new ideas or techniques that have the potential for important impacts on many sectors of the economy.  They are pervasive, improve over time, and spawn new innovations.   hub node and its associated cluster generate a one-time only benefit.  Once the economic benefits are captured other innovation within the cluster is secondary in its effects on growth.   He views the 'innovative process as a series of discrete inventions followed by incremental improvements which ultimately tap the full potential of the initial invention.'  Gordon also judges information technologies as failing the prime test of being economically significant due to little discernible additional revenue generation. 
  • Alternatively the inventions are viewed as mainly recombinations of what is currently present.  In this model the utilization of an innovation does not use up its potential to contribute.  Paul Romer argues that the most important ideas are meta-ideas which support the production and transmission of other ideas.  Brynjolfsson and McAfee assert that the new communities of minds and machines made possible by networked digital devices and software reflects a new meta-idea.  This global digital network fosters recombinant innovation as did language, printing, libraries and universal education.  Brynjolfsson and McAfee argue that the key constraint on this process is in knowing which combinations of ideas and technologies will be valuable.  As such they note the importance of crowdsourcing clearinghouses such as innocentive, Kaggle and Quirky which apply more eye balls, and more diverse eye balls, and more computer power to undermine the constraint.  They also note how access to eye balls can support iterative improvement of models of value as demonstrated for example by Affinnova.  

Artificial and human intelligence
Brynjolfsson and McAfee assert that the full force of digital technology will become more significant.  They argue that exponential, digital and recombinant forces have allowed the creation of the most significant and fundamental change in our growth prospects through:
  • The emergence of real, useful artificial intelligence (AI). 
  • The connection of most people on the planet via a common digital network. 
They see AI as having huge life-changing potential.  They cite OrCam, a combination of sensors, computers and algorithms that allows the visually impaired to have text they are looking at read to them as an illustrative example.  Similar enhancements are available for the hearing impaired.  And the capabilities can be used to enhance regular intellectual capabilities.  IBM's Watson is IBM's computer augmented human intelligence service. 
is being focused on providing diagnosis support to medical doctors

And Brynjolfsson and McAfee consider the 7.1 billion people in the world as a key factor in the exponential growth that has occurred.  So they are confident that connecting them together digitally will increase the stock of useful knowledge.  They cite Julian Simon's arguments that this will provide a contribution large enough in the long run to overcome all the costs of population growth.  They note recombinant innovation is the economic realization of invention and combinatorial exaptation. 
needs the eye balls.  And they view the data on growth showing improvement over time.  They see the integration of the entire world's population onto the network as improving the potential for success. 

Computing bounty
Brynjolfsson and McAfee view GDP is:
  • Gross domestic product which measures the total of goods and services produced in a given year within the borders of a given country according to Piketty.  GDP has many problems:
    • GDP is a poor measure of:
      • Value & wealth
      • Who gets what
    • GDP excludes:
      • Services by house makers
      • Leisure
    • GDP includes items that should be excluded:
      • Cost of waste - cleaning up pollution, building prisons, commuting to work;
  • Guanine-di-phosphate is a nucleotide base. 
growth as ensuring the flexibility to execute new initiatives and control costs.  This growth reflects the ability to improve the amount of output generated from a given level of inputs via improved productivity.  They note that GDP growth has been similar in Europe and Japan.  Productivity improvement was particularly rapid in the 1940s, 50s and 60s as the technologies of the first machine age operated optimally.  However in 1973 productivity growth slowed down.  They consider the coincidence of the slow down with the early days of the computer revolution.  By the mid-1990s productivity growth improved again. 

They present the argument that GPT is general purpose technology which economic historian Gavin Wright defines as deep new ideas or techniques that have the potential for important impacts on many sectors of the economy.  They are pervasive, improve over time, and spawn new innovations.   complement development and process restructuring to leverage the computers, introduced the lag between computer introduction and resumed growth.  This growth lasted until 2005.  Since then the great recession has impacted US growth rates.  But Brynjolfsson and McAfee suggest that due to the second machine age growth will restart just as it did in the 1940s following the great depression. 

Beyond GDP
GDP is:
  • Gross domestic product which measures the total of goods and services produced in a given year within the borders of a given country according to Piketty.  GDP has many problems:
    • GDP is a poor measure of:
      • Value & wealth
      • Who gets what
    • GDP excludes:
      • Services by house makers
      • Leisure
    • GDP includes items that should be excluded:
      • Cost of waste - cleaning up pollution, building prisons, commuting to work;
  • Guanine-di-phosphate is a nucleotide base. 
is a poor estimator of value.  It only reflects value captured in dollar terms.  Because it is tangible it is a current focus of economists.  Ideas, free services and open source are not directly represented.  New organizational structures are not directly reflected.  Digital copies are not visible.  As major aspects of the economy have shifted from analog businesses to digital the representation in GDP is poor. 

GDP underestimates economic progress in the digital economy.  Zero price apps including Wikipedia are invisible in GDP.  This distorts economists' models.  So Brynjolfsson and McAfee explain experiments have been performed to evaluate the distortion.  One way is to see how much time is saved and then allocate a dollar value to that time.  New goods and services can increase visibility, make use faster or easier, lower transaction costs, or increase access. 

Intangibles such as patents, copyrights, business processes and techniques of production, organizational structures and business models are necessary complements of the GPT is general purpose technology which economic historian Gavin Wright defines as deep new ideas or techniques that have the potential for important impacts on many sectors of the economy.  They are pervasive, improve over time, and spawn new innovations.  s of the second machine age.  But they are not represented in the GDP either.  Brynjolfsson and McAfee's research suggests computer-related intangible assets would add $2 trillion to the official estimates of US capital is the sum total nonhuman assets that can be owned and exchanged on some market according to Piketty.  Capital includes: real property, financial capital and professional capital.  It is not immutable instead depending on the state of the society within which it exists.  It can be owned by governments (public capital) and private individuals (private capital). 
assets.  User-generated content is important to companies like Facebook and Twitter.  Brynjolfsson and McAfee view human capital investment, such as
Salman Khan argues that the evolved global education system is inefficient and organized around constraining and corralling students into accepting dubious ratings that lead to mundane roles.  He highlights a radical and already proven alternative which offers effective self-paced deep learning processes supported by technology and freed up attention of teams of teachers.  Building on his personal experience of helping overcome the unjustified failing grade of a relative Khan:
  • Iteratively learns how to teach: Starting with Nadia, Leveraging short videos focused on content, Converging on mastery, With the help of neuroscience, and filling in dependent gaps; resulting in a different approach to the mainstream method. 
  • Assesses the broken US education system: Set in its ways, Designed for the 1800s, Inducing holes that are hidden by tests, Tests which ignore creativity.  The resulting teaching process is so inefficient it needs to be supplemented with homework.  Instead teachers were encouraging their pupils to use his tools at home so they could mentor them while they attended school, an inversion that significantly improves the economics. 
  • Enters the real world: Builds a scalable service, Working with a real classroom, Trying stealth learning, At Khan Academy full time,  In the curriculum at Los Altos, Supporting life-long learning. 
  • Develops The One World Schoolhouse: Back to the future with a one room school, a robust teaching team, and creativity enabled; so with some catalysis even the poorest can become educated and earn credentials for current jobs. 
  • Wishes he could also correct: Summer holidays, Transcript based assessments, College education;
  • Concludes it is now possible to provide the infrastructure for creativity to emerge and to support risk taking. 

Following our summary of his arguments RSS frames them from the perspective of complex adaptive system (CAS) theory.  Disruption is a powerful force for change but if its force is used to support the current teachers to adopt new processes can it overcome the extended phenotypic alignment and evolutionary amplifiers sustaining the current educational network? 

education
, as even more important as human creativity will become more valuable while routine tasks become automated away. 

Academics are looking for better measures of growth.   Brynjolfsson and McAfee introduce various examples including Michael Porter's research on a social progress index. 

The spread
Brynjolfsson and McAfee warn that advances in technology, especially digital technologies, are driving an unprecedented reallocation of wealth is schematically useful information and its equivalent, schematically useful energy, to paraphrase Beinhocker.  It is useful because an agent has schematic strategies that can utilize the information or energy to extend or leverage control of the cognitive niche.  
and income.  By replicating valuable ideas, insights and innovation is the economic realization of invention and combinatorial exaptation. 
s at very low cost they generate wealth for innovators but diminish demand for previously important job roles.  Two hundred years of wages increasing with productivity has stopped. 

The distribution of income and life expectancy is a measure of the average life time of a new born baby.  Without public health assistance many children die in the first five years of life significantly lowering the life expectancy of the whole group.  There are representational and data capture problems with the model:
  • Not knowing the risk of dying in the newborn's future, demographers use the risks present at that time to predict impacts in the future of the person.  No adjustment can be made for increased wellbeing. 
  • Saving the lives of children has a far larger effect on increasing life expectancy than extending the lives of the elderly
  • Impacts that occur in a particular year, such as a epidemic or pandemic, are treated as permanent effects for that years life expectancy even though they may be handled by public health strategies and hence be transients.  For life expectancy calculations in subsequent years the impact is ignored.  
  • Programs that reduced the impacts of infectious diseases, such as antibiotics and vaccine deployment, have reduced the variability of life expectancy following their introduction.  
  • Vital registration systems gather accurate data for life expectancy.  But most countries do not have the infrastructure and instead estimates are generated from demographic and health surveys. 
now follows a power law distribution rather than a normal one.  Brynjolfsson and McAfee argue that the Tea Party movement and the Occupy movement were responses of millions of Americans who felt the economy was not working for them.  The Tea Party blamed government mismanagement.  The Occupy movement blamed abuses by the financial services sector.  Brynjolfsson and McAfee state that it is the result of the diffusion of second machine age technologies that are increasingly driving the economy.  They argue that workers such as tax accountants have been replaced by software packages which allow the owners of the software companies and relatively small number of designers of the software packages to capture the wealth is schematically useful information and its equivalent, schematically useful energy, to paraphrase Beinhocker.  It is useful because an agent has schematic strategies that can utilize the information or energy to extend or leverage control of the cognitive niche.  
previously paid to the workers.  The bottom 80 percent of the income distribution saw a net decrease in their wealth even as the US economy overall grew. 

Brynjolfsson and McAfee suggest there are three sets of winners: 
  1. Owners of highly competitive nonhuman capital is the sum total nonhuman assets that can be owned and exchanged on some market according to Piketty.  Capital includes: real property, financial capital and professional capital.  It is not immutable instead depending on the state of the society within which it exists.  It can be owned by governments (public capital) and private individuals (private capital). 
    .  These people allow the new technologies to become value generating innovation is the economic realization of invention and combinatorial exaptation. 
    s by restructuring the organizations and business processes so they effectively support and leverage the use of the technologies.  They note that this will mean that some capital owners will benefit significantly but others may lose out. 
  2. People who possess highly valued human capital.  In particular they see value in engineering, creative and design skills that are augmented by the new technologies.   But they note this skill set is evolving.  The payoffs will depend on which inputs to production are scarcest. 
  3. Superstars. The top 0.01 percent saw their share of national income double from 3 percent to 6 percent between 1995 and 2007.  Technology has supercharged the ability of superstars to leverage their talents.  The network allows them to connect with more people.  Digital information, goods and services can better leverage the network.  The network is now global.  The distribution of returns over the population follows a power law in these new digital markets.  They see the extra leverage of the superstars adding increased risk to any decision they must make.  Hence the best will be needed to ensure success.  But they also note that the power law economic distributions will show cascades of Schumpeterian creative destruction.  And they note that power laws are hard for us to comprehend. 

Implications of the bounty and the spread
Brynjolfsson and McAfee conclude productivity and employment are decoupled.  But they add that if the bounty is more influential than the spread it may not matter.  They review arguments that suggest the average worker today is in important ways better off than his or her counterpart in earlier generations precisely because of the bounty brought by innovation is the economic realization of invention and combinatorial exaptation. 
and technology.  But they note:
  • Critical items such as the cost of housing, health care and college are rising much faster than median income. 
  • Many American households have no financial cushion. 
  • Other data - poverty rates, access to health care, job statistics; confirm the impression that the bounty is not sufficient to compensate for the effects of the spread. 
They cite Acemoglu and Robinson's argument in Why Nations Fail that institutions like democracy, property rights, and the rule of law are foundations of power and prosperity, since they typically make the economy inclusive.  However, Acemoglu and Robinson then note that 'economic inequality [Brynjolfsson and McAfee spread] will lead to greater political inequality, will use this to gain greater economic advantage, stacking the cards in their favor and increasing economic inequality still further...'  From this Brynjolfsson and McAfee conclude that the spread could actually reduce the bounty in years to come. 

They continue with a critique of technological unemployment - Keynes name for unemployment due to the discovery of means of economizing the use of labor outrunning the pace at which the economy can find new uses for labor.  Although there was evidence of technology displacing human labor other economists judged the expansion in total output as providing opportunities for reemployment.  They note that the Luddite Fallacy has been accepted by the main stream of economists.  It was assumed that lower cost and higher value products would generate more demand.  Keynes disagreed with this conclusion judging that in the long run, demand would not be perfectly inelastic and hence there would be technological unemployment.  But he judged it likely that labors' skills, organizations, and institutions would not keep pace with technical change and would keep outpacing labors attempts to retrain.  Brynjolfsson and McAfee add the argument that skill-based technical change will reduce the demand for some types of work and skills.  Superstars will lock out other competitors. 

Brynjolfsson and McAfee note that you don't want to compete against close substitutes, especially if they have a cost advantage.  But since machines and humans have different strengths and weaknesses and engineers can focus on building on machines strengths machines can become powerful complements.  That allows the value of human inputs to grow too.  It's great to be a complement of something that's increasingly plentiful.  They recommend inventing technologies and business models that augment and amplify the unique capabilities of humans. 

Brynjolfsson and McAfee also review the contribution of globalization to the stagnation of US median wages.  Businesses can hire worldwide to obtain the skills they need.  They accept that US companies have shifted jobs overseas.  However they argue that since 1996 manufacturing employment in China itself has fallen by about 25% as output soared 70% concluding Chinese jobs are being automated away.  They limit the impact of globalization. 

Learning to race with machines
Brynjolfsson and McAfee explore a discovery about competitive chess between humans augmented with chess computers.  The discovery is that the most successful 'teams' were those enabled by a better process which allowed the humans with experience of chess to coach the machines about selecting strategies where the machines can apply superior tactical acuity. 

Humans and machines don't approach problems the same way and so there is opportunity for synergy.  They argue that humans excel at strategic guidance.  They have the flexibility to think outside of the box.  They can cope with many situations based on powerful human senses.  In particular ideation is just not done by computers yet. 

They raise one significant issue:  Schools focus on building rote skills.  This made sense when the British Empire needed ubiquitous, replaceable, civil servants to be available to perform a role at short notice but not anymore.  Now it builds skills that machines can outperform. 

Policy recommendations
Brynjolfsson and McAfee suggest the role of government should be to grow the economy.  That will allow businesses to hire. 

They note that the policy levers are not straight forward.  How big should the money supply be? 
Johnson & Kwak argue that expanding the national debt provides a hedge against unforeseen future problems, as long as creditors are willing to continue lending.  They illustrate different approaches to managing the debt within the US over its history and of the eighteenth century administrations of England and France. 

The US embodies two different political and economic systems which approach the national debt differently:
  • Taxes to support a sinking fund to ensure credit to leverage fiscal power in: Wars, Pandemics, Trade disputes, Hurricanes, Social programs; Starting with Hamilton, Lincoln & Chase, Wilson, FDR;
  • Low taxes, limited infrastructure, with risk assumed by individuals: Advocated by President's Jefferson & Madison, Reagan, George W. Bush (Gingrich); 
Johnson & Kwak develop a model of what the US government does.  They argue that the conflicting sinking fund and low tax approaches leaves the nation 'stuck in the middle' with a future problem.  And they offer their list of 'first principles' to help assess the best approach for moving from 2012 into the future.  

They conclude the question is still political.  They hope it can be resolved with an awareness of their detailed explanations.  They ask who is willing to push all the coming risk onto individuals. 

Following our summary of their arguments RSS frames them from the perspective of complex adaptive system (CAS) theory.  Historically developing within the global cotton value delivery system, key CAS features are highlighted. 

How much debt to carry?  How much tax to levy on the population?  How should tax revenue be spent? 
They suggest there are some areas where investment will help promote the desired form of growth:
Long term recommendations
Generate growth and then trust capitalism to perform.  It will allocate resources, generate innovation is the economic realization of invention and combinatorial exaptation. 
, reward efforts and is efficient at building affluence. 

To ensure growth Brynjolfsson and McAfee review past proposals for allocating cash to people who have lost jobs because of weak demand.  Basic income and negative income taxes all have issues but they prefer -ve income tax and earned income tax credits. 

They note that health care coverage and Social Security is the social securities act of 1935 was part of the second New Deal.  It attempted to limit risks of old age, poverty and unemployment.  It is funded through payroll taxes via FICA and SECA into the social security trust funds.  Title IV of the original SSA created what became the AFDC.  The Social Security Administration controls the OASI and DI trust funds.  The funds are administered by the trustees.  The SSA was amended in 1965 to include:
  • Title V is Maternal and child health services. 
  • Title XVIII is Medicare.  
will make workers less competitive than competing technologies. 

They hope that crowd sourced capabilities will provide a useful model for partnering humans and machines. 

In general they suggest encouraging policy experimentation and seeking opportunities to systematically test ideas and learn from both successes and failures. 

Technology and the future
The increasing dependency on the second machine age will present economic and non-economic risks and opportunities.  Networks will be able to monitor our actions more pervasively.  New technologies may introduce huge social stresses.  Key network node failures must be protected against. 

Brynjolfsson and McAfee reflect on the possibility of fully conscious human machine combinations: 
  • Terminator and Matrix scenarios are always popular science fiction.  But Brynjolfsson and McAfee note airplanes don't flap their wings.  While IBM's Watson is IBM's computer augmented human intelligence service. 
    sounds like it thinks they note Stephen Baker's comment "IBM's team paid little attention to the human brain while programming Watson.  Any parallels to the brain are superficial, and only the result of chance."  
  • Humans with augmented cyber brains may be able to leverage Moore's law to increase speed and storage of the human brain. 
They conclude "We need to think much more deeply about what it is we really want and what we value, both as individuals and as a society.  Our generation has inherited more opportunities to transform the work than any other.  That's a cause for optimism, but only if we're mindful of our choices. 
Technology is not destiny.  We shape our destiny." 


Brynjolfsson and McAfee argue that the key building blocks are in place for digital technologies to be as important and transformational to society and the economy as the steam engine was to the industrial revolution. 
This page introduces the complex adaptive system (CAS) theory frame.  The theory is positioned relative to the natural sciences.  It catalogs the laws and strategies which underpin the operation of systems that are based on the interaction of emergent agents. 
John Holland's framework for representing complexity is outlined.  Links to other key aspects of CAS theory discussed at the site are presented. 
CAS theory
suggests:
Brynjolfsson and McAfee's book highlights the characteristics of the coming transformation and the economic effects.  Their ideas about how to mitigate the problems adds to the strategies for supporting the world. 




























































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This page looks at schematic structures and their uses.  It discusses a number of examples:
  • Schematic ideas are recombined in creativity. 
  • Similarly designers take ideas and rules about materials and components and combine them. 
  • Schematic Recipes help to standardize operations. 
  • Modular components are combined into strategies for use in business plans and business models. 

As a working example it presents part of the contents and schematic details from the Adaptive Web Framework (AWF)'s operational plan. 

Finally it includes a section presenting our formal representation of schematic goals. 
Each goal has a series of associated complex adaptive system (CAS) strategy strings. 
These goals plus strings are detailed for various chess and business examples. 
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