Enlightenment Now: The Case for Reason, Science, Humanism, and Progress

The innovations in the pipeline are not just a list of cool ideas. They fall out of an overarching historical development that has been called the New Renaissance and the Second Machine Age.²⁰ Whereas the First Machine Age that emerged out of the Industrial Revolution was driven by energy, the second is driven by the other anti-entropic resource, information. Its revolutionary promise comes from the supercharged use of information to guide every other technology, and from exponential improvement in the technologies of information themselves, like computer power and genomics.

The promise of the new machine age also comes from innovations in the process of innovation itself. One is the democratization of platforms for invention, such as application program interfaces and 3-D printers, which can make anyone a high-tech do-it-yourselfer. Another is the rise of technophilanthropists. Instead of just writing checks for the naming rights to concert halls, they apply their ingenuity, connections, and demand for results to the solution of global problems. A third is the economic empowerment of billions of people through smartphones, online education, and microfinancing. Among the world’s bottom billion are a million people with a genius-level IQ. Just think what the world would look like if their brainpower were put to full use!

Will the Second Machine Age kick economies out of their stagnation? It’s not certain, because economic growth depends not just on the available technology but on how well a nation’s financial and human capital are deployed to use it. Even if the technologies are put to full use, their benefits may not be registered in standard economic measures. The comedian Pat Paulsen once observed, “We live in a country where even the national product is gross.” Most economists agree that GNP (or its close relative, GDP) is a crude index of economic thriving. It has the virtue of being easy to measure, but because it’s just a tally of the money that changes hands in the production of goods and services, it’s not the same as the bounty that people enjoy. The problem of consumer surplus or the paradox of value has always bedeviled the quantification of prosperity (chapters 8 and 9), and modern economies are making it more acute.

Joel Mokyr notes that “aggregate statistics like GDP per capita and its derivatives such as factor productivity . . . were designed for a steel-and-wheat economy, not one in which information and data are the most dynamic sector. Many of the new goods and services are expensive to design, but once they work, they can be copied at very low or zero costs. That means they tend to contribute little to measured output even if their impact on consumer welfare is very large.”²¹ The dematerialization of life that we examined in chapter 10, for example, undermines the observation that a 2015 home does not look much different from a 1965 home. The big difference lies in what we don’t see because it’s been made obsolete by tablets and smartphones, together with new wonders like streaming video and Skype. In addition to dematerialization, information technology has launched a process of demonetization.²² Many things that people used to pay for are now essentially free, including classified ads, news, encyclopedias, maps, cameras, long-distance calls, and the overhead of brick-and-mortar retailers. People are enjoying these goods more than ever, but they have vanished from GDP.

Human welfare has parted company from GDP in a second way. As modern societies become more humanistic, they devote more of their wealth to forms of human betterment that are not priced in the marketplace. A recent Wall Street Journal article on economic stagnation noted that a growing share of innovative effort has been directed toward cleaner air, safer cars, and drugs for “orphan diseases” that each affect fewer than 200,000 people nationwide.²³ For that matter, health care in general has risen from 7 percent of research and development in 1960 to 25 percent in 2007. The financial journalist who wrote the piece noted, almost in sadness, that “drugs are symptomatic of the rising value affluent societies place on human life. . . . Health research is displacing R&D that could have gone toward more mundane consumer products. Indeed, . . . the rising value of human life virtually dictates slower growth in regular consumer goods and services—and they constitute the bulk of measured GDP.” A natural interpretation is that this tradeoff is evidence for the acceleration of progress, not the stagnation of progress. Modern societies, unlike the miserly comedian Jack Benny, have a quick reply to the mugger’s demand, “Your money or your life.”