Transcripts For CSPAN2 Key Capitol Hill Hearings 20140821

Been doing this for a long time and i have been doing this since before there were laws in this space so there were some responsibility but in a regular talk i give to businesses right now is whether your data obligations because everybody has them now trade 47 states have passed certain data loss. Kentucky just past one this last month to come into the rest of the world. But its interesting, you have those in california has done things such as almost having a right to erase your past while on social media if you were a teenager. So god forbid any of us would have said things we were embarrassed about when we were a teenager and or posted them on line. That is where the California Legislature is coming from. Is a coming from the police . A little bit of both but theres a lot coming from the state legislature. Our good friends across the street here have been looking at this issue and have 20 or 30 acts in the statutes and the space up there looking at year after year after year but they have not passed them yet. We actually havent had a broad law in protecting privacy since 1988. We have so had more specific industry specific laws but nothing broader than that and a few things have happened since then. Just like a few like twitter was launched in the new iphone, facebook took on myspace. Google search and google mail. All of that happened since we have enacted these laws so obviously the laws, unless we are incredible fortunetellers didnt really foresee how the internet was going to morph and change. It is changing. Its changing everybodys business because there are things you have to Pay Attention to and another thing we cover in the book is that most of the rest of the civilized world looks at the u. S. As a Banana Republic when it comes to privacy, because a lot of plac places, canada, japan most and most of europe and others have an objective right to privacy. We dont have that at all. We deal on a sector specific method would its very different and if you are doing business were living in some of the rest of the world of privacy laws are much much different. We learned that from the first book. We had a few people that werent usbased read the first book and say not enough for me, for my country and this book so we actually spent quite a bit of time researching iran syria russia turkey israel, lot of different other countries, u. K. And canada and really trying to understand their views on privacy. Whats interesting is they do draw the line theres a little different than how we think about it. So for example in the u. K. They see privacy is a right as it relates to businesses collecting your data. But they have no problem snapping your picture everywhere you go in the u. K. They are some of the most photographed citizens in the world so its interesting to see that. If you are getting ready to live or your children are getting way are getting ready to look another country or do business in another country youll definitely want to go to the book and look for some of the different differences between america from our point of view and those countries and their point of view on privacy. We thought it made it richer to explore what the whole world is doing and this and that in contrast and compare it to what we have. Is a possible globally to wipe out all your social media or anything that has been on mine . Is a possible . Probably not. For years the french, seriously the french have talked about a right to be forgotten and they passed into law at one point but have been unable to enact it. But if you go back to the first there are some things you can do to help clean up some of what you have on line and the social Media Companies will help you to a certain extent with that and other companies that are putting information out that you may or may not help with that. To reintroduce it. Now, heres the most important part of and from a practical standpoint i dont remember all the numbers that was Something Like 60 of people dont ever go past the first search page and over 90 or 95 or 98 dont go past the third search page. So if you cant get rid of it you can at least bury it. Not that anyone here has anything to bury that your loved ones might. Someone truly but evaded might find that kind of thing but the truth is most people wouldnt. Including h. R. And academic review boards and things like that. Future potential mothersinlaw. Always then its another thing when i talk to groups about this. I give a lot of social media ethics talks and one of my big slides is simply dont be stup stupid. You know theres a lot of thinking and think before you write because you are publishing. This is a publication. Its going out there and maybe you can pull it back and maybe not but you cant count on that. Just because you pull up that doesnt mean somebody else didnt say and once again across the street the library of congress is keeping all public tweets. Thats it there is and a glitch and they get the private tweets too. Which may well happen. Do you think they are so dependent but not savvy about where it goes . They truly believe in passwords that only their friends see things. They do and they dont realize theres a Data Warehouse behind the scenes. Guess on the front side on the web site thats all you see and when you delete its gone for you but its still back. Its like people learned the hard way with snapchat. The thing expires after so many seconds. Kind of, to you. I always say to people the only time to lead us forever is when your device crashes and you want to recover the data. Thats the only time delete is forever but everything else, no its not forever. [inaudible] one of the nice things about worse and working with theresa on these books if she has a very deep and really thoughtful knowledge of the way children use the internet and how to be careful about that. One of the things she has taught me, and i now steal mercilessly. I cant wait to hear what it is. Its one of the point to a snake which is when a teenager thinks about privacy, their own privacy who do you think they want to be private from . You. And other people they dont think about of it all. Its just they want to be private with regard to their parents. And i dont care if anybody else in the world knows that in many cases. So theres a lot to think about when you have kids and thats one of the things that theresa has been great about. She speaks to childrens groups a lot and thats one of the things about the book is parents should really be looking at it if you have kids in this space and if you are thinking about it and how you might monitor and work with them. One of the things too a lot of you here in the Business Community and one of the things i would love to have you take away and ted and i have talked about this a lot is everything is hackable. Everything so i know you mean well when you are collecting data about your customers but just understand that data is a target and when it gets stolen depending on how you have stored it you can be putting your customers at risk. So there is a recent revelation and i wont name what was that there was an Investment Company in their brokers were developing psychological profiles of their clients. I cannot only imagine what it said and would identify ted is riskaverse and calley is a risktaker and other key elements about their clients, store them in a database. They have since disbanded and americanized in that group no longer exists but the psychological profiles about every single client did and it was breached and stolen. Think about the psychological profiles on your willingness to spend, invest and risk. You dont want to know. [laughter] not me. Its excluded me from russia. When you think about that example of what the group didnt even exist anymore but they didnt go back and clean up the data, think about the responsibility companies have to you and that you have to your customers. That is one thing too we would like everybody to think about about. Case law and ted and i talked about this and he showed me where caselaw is not really there yet. Unless somebody got tipped to sue its not there in the laws are not on the book yet. The thing about caselaw is it takes taking a case all the way through. Theres a phenomenal great plaintiffs thought case that was filed in the state of washington where it was about their mobile phone and the mobile phone came with a weather app. You couldnt get rid of the weather app and of course the weather app has to know where you are because how else can it tell you whether the weather . This weather after sending information every 10 minutes back to somebody who we may know. Plaintiffs counsel came up with a great argument. They said essentially that is a product defect that their client would never have bought the product had they known it was reporting to who knows to every 10 minutes on their location and they couldnt turn it off. It would be nice if we knew whether that case was something that would have worked or not but it was very quickly settled. Other than having to case files we dont know what happened to it. We dont know where the law stance on Something Like that. It will be a long time before that kind of thing plays out in me really know what the law means in this area. So i know people have places to go and things to eat can do. Taconite going to stay around for as long as you would like to answer questions. I questions. He wanted to thank ted and his law firm for generously sponsoring this event and i thank you all for coming tonight. Thanks. Thank you, we appreciate it. [applause] [inaudible conversations] f fir line them up solid. Thank you. Our special booktv programming over the next several hours focuses on Technology Beginning the the second machine age work, progress, and prosperity in a time of brilliant technologies. In a little more than an hour we will talk with craig on the book eye gods how technology shapes our spiritual and social lives and after that our afterwards program with jeremy riff on his book the zero marginal cost to society and then the authorizing data recognizing your rights and protecting your family next we talk about the technological advances that have taken over our lives and ways to harness them to benefit society. The conversation is about an hour. Ready to go . Good evening. Welcome to todays meeting at the Commonwealth Club of california. The place where your in the know. You can find the Commonwealth Club of california on the internet at commonwealthclub. Org. I am your moderator for the evenings program. Erik brynjolfsson is to my left and Andrew Mcafee who are business researchers at the mit school of management and erik is the director at the school of business and andrew is the Principle Research scientist. They made a name for themselves a couple years ago with their selfpublished book. It brought up emerging nervousness about the fact that automation is beginning to replace jobs at higher and higher levels. They followed this up with a bigger book the second machine age work, progress, and prosperity in a time of brilliant technologies and it is really, i think, everybody in the room will say how timely this is in the San Francisco and the greater bay area there is a lot of tension about both how the tech economy is changing everybodys lives and where we are headed from there. The book directly tackles the promise of technology and some potential challenges it poses. I think both would like to start with questions before giving a brief summary of their views and that is what the second machine age is all about. Why dont i start and say the book got started from confusion that both andy and i had about what was going on in the world. Innovation has never been faster on one hand but people have gotten more and more pessimistic about their future and their childrens future. We have technologist that are creating wonderous new things with selfdriving cars and machines you can talk to and other amazing technologies and they are optimistic about the potential of the technologies to transform the world. We also spent a lot of time interacting with economist and there is a reason it is the abyssmal science. I came from a meeting in philadelphia and i was on a panel with three other economist and they pointed out abys statistics. Employment has been struggling with the employment to population ratio plummeted. And the numbers are better but it is mostly reflecting people dropping out of the workforce not new jobs created. We were puzzles puzzled and wanted to see how the facts could appear at the same time. If you look deeper there is impressive numbers that match up with the optimistic view. Overall wealth is 77 trillion with record levels. Record levels of productivity and the numbers are growing. But Median Income and unemployment are also accurate. As we worked on the book, we came into the conclusion it is possible for both of these things to be happening at the same type. It reflects the Fact Technology does grow the economic pie and create more wealth but there is a secret of economics that says there is no economic law that everyone benefits evenly from the technological advances. It is possible some might be relatively worse off and worse off in absolute terms. It used to be buggy workers were hurt by the auto mobile. Today it could be millions of people and the majority of people having a harder time making a living than before and understanding the technology and the bounty and spreading out of outcomes is what we wrote this book about and trying to under the implications for individuals and society is what we are hoping to refocus the conversation on. Erik and i spent our whole careers working at the intersection of technology and economics and we wrote it because we were confused about the economics and the technology. Erik describes the economic paradox and let me talk about the technology confusion that is going on. It is Digital Technologies have started doing things they are not supposed to be able to do. The books genesis started in the fall of 2010 when over breakfast i hope opened my computer and came across the fact that google developed cars that driven thousands of miles on american roads in traffic with no mishaps. I spit out my coffee because they were not supposed to be able to do that. There is a wonderful book written six year earlier in 204o that made a strong argument for why computers would never be able to drive cars. It was basically because the sensing, pattern matching, processing and all of the stuff you have to do that well is easy for us in the brains but difficult for computers. Erik and i read that book in 2004 and nodded our heads at each other and six years later they are already cars on the road. You can see the problems that confuse them. We will do a pop quiz. Everyone point to a door in this room. This is a smart crowd. Here is an even weirder question. Point to where you are in this room. They are both correct answers. We will accept both of the answers. You have just solved one of the thorniest challenges in robotics. It is called slam. What does this room look like, where are the doors, and where am i in this room. We are good at that. That problem has prohibited progress in a robot. You put a robot in a room and ask where he or she is where the door is and watch the shenanigans that take place. Last year a colleague named john leonard signed the problem by waving a microsoft connect in it. This is a 150 piece of consumer electronics. We saw enough examples and said what on earth is going on and we went out and talked to the nerds on the economic and Technology Side and it led to this book. I think the first question one would want answered then is how and why this happened. We have been hearing promises, we are working north of where all of these things get made, of things that will change the world. Artificial intelligence is going to solve the problems and the promises are not delivered on regularly. Now in the last 34 years something has changed. What . Can i give you a threepart answer to that question. That is what sent us into the field. Our answer takes up about the first third of the book. Which you will only have to do in a couple minutes. It is a fair question. The first part is the Computing Power and it is easy to underestimate what happens when this improvement has been going on and sometimes a difference in degree is a difference in kind. We think we are at that point when the smart phone that most of us, probably all of us have in our pocket, is literally the super computer of a generation ago. You just have enough horsepower to do difficult things. Part two of the answer is we are probably all tired of the phrase but big data. This ocean of Digital Information we are swimming in. It isnt orderers of magnitude bigger than it was 510. It is thousands and millions and billions greater than it was 510 years ago. Data is had life blood of ski science. If you want to get smarter about a real world problem you need scads of data and we have that. And the third part is real innovation, coming up with something new, isnt the process of a lone eureka. The car is a great example. Google combined the Building Blocks that were already there. And our world has many more Building Blocks there now. So the shorthand answer to the question of why now exponential, digital and compliment. I have one question that touches a little on that. What do the stagnation and end of innovation folks not recognize when they are faced with that . Tyler cohen who coined the term the great stagnation and his argument is growth has reached this plateau. You are painting quite a different picture. Tyler is a super smart guy and we discussed this with him. We owe him because he inspired us to work on race against the machine because he was arguing we ran out of innovation and there was no more good things or few good things left to invent. And hanging around the mit lab and silicone valley we thought this cant be true. Is this guy looking at the same economy we are. But he had compelling data on the stagnation of medium income and that forceded us to see how it happening. If innovation speeds up, paradoxically that can lead to people falling behind if they are not keeping up with their skills or the organizations are not keeping up and this dramatic reorganization of the economy can be a symptom of Great Innovation and Wealth Creation and lead to stagnating medium income. It leads to a world view that we had is innovation isnt thought of as low hanging fruit. That is the metaphor he used saying we plucked most of the low hanging fruit. Innovations dont get used up that way. Each innovation creates Building Blocks for additional innovation whether it is the google self driving car. I had a student, undergraduate student, and he wrote an app and a few weeks later 1. 3 million users were using it. He didnt do brilliant breakthroughs but he was able to skill it because it was built on top of facebook and facebook is built on top of the web and the web is built on the internet which is built on intricity. But each innovation didnt make it harded to make a sub innovation. I rippled through a bunch of questions that look past this toward the second part of your book. Before we break into the specifics i think we need to make grapple with that more generally which is the pie is growing but it doesnt appear to be distributed equally and if we can get to the root cause of that a lot of people want to know what to do it about it. I will touch on that one as well. I think a good example of what is going on is something and a conversation i overheard about the same time andy spit out the coffee over the google driving ca car. And i overheard a guy saying he uses turbo tax and it is very accurate. He is right. It took a process that used to be done by humans and codified and digitized it and then you can make a copy of that or ten million or a hundred million. And each copy is identical to the original. It is a perfect copy and it could be reproduced at virtually zero cost and transmitted anywhere in the world through the internet almost instantly. This is free, perfect and instant. Those are three characteristics we havent had for a lot of goods and services. They lead to particular interesting economics. Winner takeall or most markets. Each neighborhood or town might have a human tax preparer that can service this, with a Tax Preparation Program you dont want the 1,000th best or the 2nd best you want the best one available. So the markets focus on one or maybe a handful of programs or winners in those markets. As a consequence, the revenue for that industry end up being more concentrated and it doesnt require a lot of people to make copies of turbo tax once the basic algorrhythms are written. There are winners and losersh rs. The losers and there is another large group that is consumers. People have access to cheap Accurate Software in this category they didnt have before and can solve problems more efficiently. But there is people made absolutely worse off and people that invest a lot of time and effort in learning how to do that profession or skill. Some went to college to do that. And now in an economy where we are competing against a 39 piece of software a humantack human tax preparer doesnt provide much more value. What i described of turbo tax is a microcosm of what is happening in other organizations. We are seeing it in financial and technology and as software eats of the world we will see the same economics affect society more. I love the example of erik because it illustrates the two main economic consequences that we spend the middle third of teo book on. The first is good news bounty. More, better stuff. And erik said there were two flavors. And one is the rewards for the innovators, the people coming up with turbo tax. And the other, the bigger category is all of us who have access to higher quality, cheaper tax preparation. That is really good news and important not to lose sight of. The bad news is the spread. Whenever i talk about the book, i invented a dorky move because i go like this. Instead of having an economy where the income and wealth is clustered, thanks to this we are going like this where the middle is being hollowed out. We have a small group of people who know how to harness Digital Power and innovate with it and their wealth and income goes way up. Middle of getting hollowed out and the bottom is Holding Steady or gripping behind. That is the spread or the challenge we face in the second machine age and our skoal goal is keeping the bounty going and minimizing the thread. What about the standard economic thread we have of this automation is occurring in some sectors and it will increase produ productivity and others pick up slack. Why is that broken now . For 200 years People Like Us have been saying the age of technological unemployment is not. It started about 200 years ago with the ludites and during the Industrial Revolution and in 1930 it was said get ready the era of tech unemployment is at hand. Knowing that pattern should calm us down. Is the era finally here . We dont know. It is too early to tell. But the data isnt encouraging and i think there is good reason to think this time is different. If you wanted a report written in Human History you had to involve people in the work. If you wanted to listen to a person, understand what they wanted and spit it back to human speech you had to involve a human being in that work. You can diagnose a disease and answer a telephone and any of these things we needed people for them. We dont anymore. So the digital encroachment into human territory is broad, deep, fast and irreversible to me. It feels different this time. The economical statistics also suggest Something Else is going on. Technology has been destroying jobs and creating jobs always. There has been a Creative Destruction and flow and turnover that went from one industry to another. For most of the last couple hundred years, since the machine age, the Industrial Revolution, they have been unbalanced. If you look at productivity, employment, salary they rose in sync but they started divergeing. Media income has stagnated and isnt keeping up the way it has and employment has stagnated as well. There is something knew going on in term of technology and Economic Statistics and we think the nature of the second machine age is at the core of the distance. We dont think those two things are unrelated at all. What is going to happen to the working class . What are your views on organized lab labor . Technological advances seem to weaken the power of the working class. Is the working class doomed . We dont think they are doomed but the Bargaining Power has been weakened. If a company can make do with robots or machines it is harder for a working person to say give us the revenue and share of the company and higher wages or we will go on strike. If terry at fox con says go on strike and well replace you with robots. He is the guy who producers our iphones over there and says he is going to hire a million robots. That is a pretty Severe Threat and it turns out increasingly realistic. So the bargain power of a working goes down. Is there a credible alternative . In america there are two. Workers in other countries thanks to globalization and there is a digital alternative. These alternatives are appearing in the lowest wage parts of the world even. It is way too early and way too defeats to say that the working class in america is doomed. We want to walk away and say nothing to be done here and move on. The last third of the book is about the kind of interventions we think make sense in the era of astonishing progress. You can jump in that or i can give you a couple what knowledge skills and or dispositi dispositions do young people need to succeed in the machine economy . What can we do to increase the education and skill level to lead to more jobs well this is much more specific question so lets start with the first one. A little bit about that. What the data says is that routine Information Processing tasks have been especially hard hit over the past ten years. It means following instructions and you carry out information tasks and a big chunk of the economy is devoted to those tasks. But research by my colleague david otter and others at mit has found that if you look at the skill content of all of the occupations in the United States, the more routine processing is involved, the more demand and the more the wages are under pressure. If you are looking for a job to stay away from it would be routine Information Processing chatty a job that requires the three rs we all still get caught so much of in primary education. A lot of schools are structured and setup to get people to sit quitely in rows and learn how to follow instructions carefully and that was a valuable skill in henry fords era where people had to follow instructions. But going forward, those are the skills and tasks that robots and machines are good at. What they are not good at is creativity and inventing things or interpersonal relations relating to other people. And we probably need to spend more time or we do need to spend more time reinventing education to focus on that set of skills and creativity and motivating people and caring for other people rather than the skills that were dominant in the second machine age of following instructions. I have one question pushing back a little bit on the emphasis on education. How does increasing the education and skill level lead to more jobs when jobs are driven by demand in the economy . Two good questions. Even if we get the educational system right is the question and would that be futile . Absolutely not. The most common complaint from businesses leaders is i cannot find people with the skills i need up and down the ladder from the front line to the top of the company. It indicates to us our Education System is turning out people that are mismatched to job community. If we could wave our magic wand and fix education we would do a lot to help the unemployment and the wage crisis. The second part is the agregrate demand. It is captured in a good story about henry ford the 2nd and the head of the auto union touring an auto factor. Ford is in a playful mood and jabs walter and says how are you going to get the robots to play union dues . And without a doubt he says how are you going to get them to buy cars . This was a phenomenal engine of demand in the past and they kept a lot growing. If the middle is hollowed out more does the demand dip . That is the definition of a recession and a recession is a spiral that is nasty. It is both from from what i can tell. There are not bigger advocates for trying to boost economy like we are. That is a business issue. We are talking about the longterm structural issues. They are not unrelated. The structural issues can lead to the drop in demand we are seeing so you need to address both of them. You can run an economy with a very small group of the elite at the top and a whole mass of fairly miserable people at the bottom. It is feasible. Just a lousy society. Smaller economy and not where we want to go at all. And it will have political implications. They tend to be unquite places as well. Circling back at a the robots. One is given what we are seeing from Android Development and should the workers be required to pay a partial amount of Social Security taxes and relatedly henry ford knew the lower classes needed to use his products. Do you think the modern people see things similarly . There has been great work done that looked at what happened during the great depression. An even worse downpour than the one we are suffering through. As agriculture was mechanized and tractors were introduces there were tens of millions of fewer farmer workers than needed before. That kind of structural change in employment led to a drop in demand and that is because the workers couldnt instantly find new work. Many had to move. We head about the okies going to california and else where. And they had to be reskilled for new activities and that could take years or a decade or more. One of our concerns is as people become reskilled and discover new things and entrepreneurs discover new things by then the technology will evolve again so there is a constant catch up required that could lead to ongoing problems with not just structural employment but demand. Erik and i talked to a lot of the tech bearings and they are aware of the situation and the fact that technology is racing ahead and leaving a lot of people behind. One of the most Prominent Technology executives in the world today told us just last week that he thinks this is the single most pressing issue that he and his industry will confront in our lifetimes. They are not turning a blind eye to what is going on and i find that good news. Lets go broad and get more specific. We have a good question. Which policy would you prescribe to mitigate an inquality and increase growth. We have a chapter on short term recommendations and then we have further out chapter. Lets say the robots really take over and the digital encroa encroachment is broad, fast and irreversible, then what kind of economy do we want to create . There are a couple parts to the answer. I want to focus on tax policy. One question was about tax. Economist have a straight forward answer about what if the pie is big but not being distributed in a fair way. Their answers is lets give people money. Guaranteed income is what it goes by. It sounds like a frothing socialist here. It might not be a problem in california but you cannot have that in a lot of america because you sound like you are on the far left fringe. That was a cornerstone of nixons first presidency and freedman and others have talked about it. The weird bipartisan history to this idea and if this continues to play out along the trajectory we might need to look at that. There is a negative income tax and that is lets encourage work and make sure people are working and for every dollar they earn instead of taking 20 cents why dont we give them 20 cents and that will encourage people to keep working. These are heavy ideas and we think we should shift the conversation on what we are taxing and how and if we need to shift it in this direction. We are at the halfway point. Still with us . This is the Commonwealth Club of California Program and we are talking with Erik Brynjolfsson and Andrew Mcafee about their new book the second machine age work, progress, and prosperity in a time of brilliant technologies and i am your moderator drew leonard. You can hear this on the radio or see videos online on our youtube channel. A couple questions about what you think of basic guaranteed income as a response to the issue which seems to be the opposite of a negative tax. They are very closely related. Let me build on what andrew was saying. We think you can reallocate the way income is divided. But andy and i focus on an expanded earned income tax credit. They are both ways of getting income to the hands of people and some who havent benefited as much from the technology. We have been convinced, first a quote we came across from a company that says work solves three great evils, work and it is about a sense of other val values. And bob putnam a great socialogist provide evidence that when work leaves a community it doesnt just take out money but it leads to increase drug use, increase in teen pregnancy, dissolution of the family and increasing crime rates. It is damaging when people lose their livelihood and we think the tax credit will help by making it more economical for businesses to hire people and people to continue to have ga gainful employment and a way to c c contribitute to society and not having a handout about having support from different perspecti perspectives. Erik and i became convinced that of the three great evils need is the easiest ones to solve. Boredom and vice are difficult challenges. Murray is another guy with a different political background but looking at communities and what happens when work goes away. The stories they tell and the data shared are absolutely chilling. Like erik says divorce rates go up, children in singlefamily homes goes way up, voting in elections go down and prison population increases. Almost all of the work says the cause is when work goes away the bad stuff follows. So we are interested in Solutions Like the negative income tax and expansion of the earned income tax credit that preserve work. It is too bad the president is otherwise occupied with his state of union. Someone needs to give him a copy of his book. This is a question of what would you include in the president s state of the union. What do you think of the political will to act upon what we witnessed for the last definitely the last six years is a lot of dysfunction in moving forward and addressing any pressing issue. By your description they will be come more pressing. It starts with the right diagnose and understanding the issues. There are a lot of people angry and they have a right to be angry. We see them in san fran and the tea party. They are pointing fingers. And i think they are not left, right or republican or democratic or political arguments. The policy and ideas put forward in the book we think should and could have widespread support from lots of different groups. They are things most people agree government has a role in from education to infrastructure and let me point you to another category we thing brings support and that is we can encourage more innovation in building new products and services through entrepreneurship. And that is not because we think everyone is going to be an entrepreneur or everyone who loses their job should be an entrepreneur. But it is because entrepreneurs are the people in charge of inventing industries and products that employ people. The Industrial Revolution showing people moving out of agriculture. 90 of people were in agriculture at one point and now it is 2 . They didnt become unemployed but people invented entirely new industries and found new things for people to do. We need to speed up that process despite the entrepreneur, the data suggests there is less new business creation than in the 90s or 80s. We are not creating the new industries fast enough and government have a role to speed it up, or gum it up and slow it down. We need it make advances on e e education, tax policy and entrepreneurship. We have a chapter devoted to shortterm recommendations in your book. Five really important areas in that chapkter are education, infrastructu infrastructure, immigration, basic research and technology. Government has a clear role to play in those five areas. The optimism i can give you and this isnt a great time of optimism about getting things done is we are close to an Immigration Reform bill. It came close in 2013 and might happen. That would be a great boost and there is broad agreement on both sides of the aisle on entrepreneurships and we agree it is important. Are we batting. 400 there if you add it up . To be fair, there is a real problem in washington and one of the reasons we wrote the book is to change the conversation. The technologist are doing a great job but politicians for that matter or Business Leaders are not keeping up with what the technology is demanding. That really sets up the sides of the challenge because our ability to come up with policy responses to these kinds of problems is nowhere near as fast as the technology is accelerating. You spend the first third of your book and you quote an earlier book about the rise of western civilization at the industri industri Industrial Revolution. If we are only at the cusp of this and it is going to go faster the playbook of solutions is something we have a hard time getting through in times where change is slow. Well, i know, and that is why we think it is urgent to have this conversation and to change it. One time we were bemoaning some of the slowness of the response in washington. A friend of mine said the thing you have to remember, erik, is that washington doesnt lead on these issues. Washington are followers and respond when the people demand it. It is only once that all of us start understanding the issues and demanding change that people in congress and the whitehouse are going to want to respond to it. So, you know, for better or worse, it sarts with changing the conversation and understanding the issues and then we can expect action in washington. You got the central challenge right. It isnt a technological challenge. The technologist are doing great work and technology is going to race ahead. That is one prediction i make about the future with hundred percent confidence. The central challenge is the other elements of society are not changing as quickly. Our organizations, Education System, political process and other important parts of society are not geared up to change as quickly as technology does. We have to address de. We have to speed up the clock speed of our other institutions. And let me emphasize we are vore more problems as they align and the answer is to speed up the response to it. If we dont do that there is more pressure and ludites that want to stop the technology and we think that is a terrible outcome. Why are we writing question on paper and collecting them versus an app . You dont have to answer that. We have a group of questions and wondering where this ends. Do Quantum Computers get consciousness . Are there areas humans will hold off the machine . I see we are just about time. One person said computers cant initute something so that should be save. Well, isnt that what they said before money ball came to baseball that they could not intuit a good player . We learned to never say never. We would point to a job or application and say there is an example a machine cant do and low and behold we would run into someone on at the media lab working on that project. There are areas where the advances are happening faster and lower. Fine motor control, picking up a dime is something most robots cant do. There is a great video by a bunch of researchers from berkeley of towel folding robots. It is like watching paint try if you watch it in realtime. It Takes Minutes to fold the towel but wait a while. I had a chance to review the Lego Mindstorm robotic set with my son and he built a snake that lunged at your hand like a cobra. He is the generation developing the next wave. The area of far out Technology Trajectory we spend most our time going away from is the digital stuff becoming fully intelligence and conscious. It has been poplarized by people who are very smart and prolific. Erik and i go back and forth and i dont see that on the trajectory we are on but i want to eco the mantra of never say never. This ultimately solves or economic problem or what jeffrey sax calls the problem of extreme poverty in the world. You dont have to be that wild eyed to extract the trends. You see poverty can be eliminated within 20 years world wide. Poverty is something we had with us and People Struggle with not for centuries but milinia and we maybe dealing with extrem poverty because the technologies are creating so much bounty and so much wealth. The issues is distribution and managing the disruption associated with that. In terms of material progress, we are doing well. Erik and i were both at ted and i dont want to brag but bono was my warmup act at ted and he gave a presentation, you have to watch it, about the real trajectory of wiping out poverty in subsaharan african and that is not independent from technology research. There is beautiful Research Showing what happens in the poorest parts of the world when people get primitive phones for the first time. Their lives with a better trajectory. And 3d printers, what seemed to be Science Fiction a few years ago, are becoming reality. Do you think they will apply to other pressing problems we have here like our energy issues, reduced Global Carbon emissions and greenhouse gases. If we have the law and the innovation do you see well, as andy and i talked about beforehand. There is a whole set of problems and we can only write one book at a time. We will not take on all of those at once. But i think as the tech Technological Capabilities are bigger and we have more power we can address more needs. In the case of Global Warming i am optimistic this can be a help. A scientist looked at the Energy Consumption of computers and that is improving faster than morris law even. Lets me take eriks optimism up a little. We put a quote in the book and some ideas from an economist name julian simon who never gets enough thinking. In the time the world was doom and gloom he said you dont understand what is going on and what we humans are good at is solving our problems. Over and over again things come up and they seem dire and we find solutions to them. The reason we should be more optimistic these days and in the next few years we will for the First Time Ever bring billions of people fully fledged and access knowledge and huge amounts of power. This is the best news going and i am confidant. It isnt just the access to the worlds knowledge it is being able to contribute to the knowledge. This is innovation on steroids, in a good sense, i guess. What we can say is in the city of barry bonds you know what we are talking about. What you just said about, you know, the issue of global poverty and the impact of the technologies in africa and asia, how much of the problem with growing income inequality in the developed world is u. S. Centric and will it go away once the rest of the world catches up. That is a great question. Let me look at other developed countries. If you look at the countries that are rich and developed, the pattern is very similar in the other countries. In 1822 countries, inequality is growing in sweden, france and japan. One of the exceptions was greece about they have another set of exceptions. Greece is not the model they started with different lefbl levels of inequality. It isnt just politics or local conditions. It is more fundamental than that. Look at what is happening in china and other countries and there i think the stories are more striking because we were looking at some of the issues in terms of say manufacturing employment and people think of globalization and technology as being the two great forces affecting the economy. And the idea of manufacture moving from the United States to china. It turns out that in fact manufacturing employment in china is shrinking. 20 million fewer people are working in manufacturing today than in the 1990s. It is shrinking in the United States and all of the places worldwide. It isnt a matter of jobs moving from one country to another. It is jobs moving from both china and the United States to robots and to automation. The phrase that andy and i use to describe this is offshoring is just another wave and it will be more important in the next decades. I think countries like china that have been relying on low wage labor to compete with more in the bulls eye of the automation su tsunami. And your china example cun k cuneck connects to a question that arrived. If you visit beijing right now without a gas mask you are going to have issues. There is a question if quick innovation can keep up with the human impact on the planet as 7 billion people raise their prosperity levels. This question says do you expect technology to solve the problems associated with the fast growing population and the dwindling of technology and can Technology Keep up with the humans in the long run. Yes, absolutely. With the very big exception of Global Warming, most of the environmental indicators are going into the right direction instead of the wrong direction. Technology is a huge part of the reason why we are optimistic that overall, again with the exception, we will learn with technology to live more lightly on the planet. Democracy is beginning to become irritated at the technology. That is a nice phrase in, isnt it. It has been one of the unique stories of the last 20 years. The birthplace. The modern digital age, and reaction to it. The same thing happening batiste. It is too cold back east. [laughter] and this is why we talk to our techno utopian friends to say dont worry, technology will take care of all these things. You have to grapple with the fact that not everybody is sharing in this county currently. If you just ignore that of people are going to get justifiably angry. And the reaction of many of them is going to be, we have to stop this technology, throw rocks at the buses. 200 years ago it was smashing the runs. As we said earlier, we dont think that is that all the right solution. Destroying the benefits that we could be having. If you ignore the problem, that is a reaction that many people will have to be have to change the conversation to focus on more Realistic Solutions that are more inclusive. Can the companies themselves address this . What do you think about the idea that the means of closing the spread has forced companies to pay for the day they are about to mind. Should facebook, twitter, the New York Times pay their users for using and interacting with their tools. You debated exactly this point. A lot of rhetoric. His ideas actually are. He was to joel r. Roberts of the pictures of his daughter the facebook i applaud his motivation. It makes no sense whatsoever. What can we do to address the challenges. Its a wonderful question working on the grand challenge. Kind of as a substitute for humans. Look, if you give me a different challenge, tommy the robots that will work with people i see that instead. I like working on tough problems. You guys specified that you have a problem. We have these wonderful online competitions in context and tournaments that motivate huge amounts of effort, and the single idea that we have come up with, lets use these things, these motivating tools to point to the technology in that direction, again, close the spread, but labor back into the economy, help but these challenges. We are getting pretty close to the end here. Maybe we can try and figure out a way to a go out looking forward. A lot of parents in here are they have collegeage children. I am myself. A lot of people are wondering what i tell my kids to do, where do i steer them to thrive in this second machine age. A lot of things are out of our power. Getting in the political system, changing the taxation that we do have got things that we can do individually and our panel. What can people do themselves to condition themselves . Three pieces of a glass. First a look at those kind of skills that machines are not we already touched on some, creativity, interpersonal relations cannot motivating people, caring for other humans, and those are areas that we continue to have in demand. The second piece of vices of the two blacks. The nature of technology is constantly evolving. Andrew and i have continued to be surprised about the advancements that are happening. It is unlikely that anyone career, to be able to coast on that. You have to adjust. The third piece of advice is, do what you love and do something you are excited about it, not because it is more fulfilling those kinds of winnertakeall markets, you know, there will be a reward for being the very best in something, and there will be a lot of reward for being average or above average. There are few people that can be the best bet anything unless they really love it and enjoy doing it and in some time on it. Those pieces of advice are probably the best kind of guidance for anyone going forward. The second question is apparent question very often about collegeage kids. Two pieces of advice. The first point is for the kids, it that damn bucks. One thing that we came across as about this the amount of hard work going on on a College Campus these days. And a concurrent slide in which people are actually i guess they should be in class and instead theyre playing pierpont. These things, theyre really appears to have been a slide. So hit the books and spend time on both sides of the campus. By all means, go hang out with the drumming teach in the english peaks. That is awesome, but then walked to the other side of campus and go hang out with applied math geeks or Computer Science geeks or physics geeks. Have both halves of your brain worked out, some of the best possible preparation for the world were heading into. Okay. Very quickly, yes or no, are we going to figure this out . Definitely. I think it all depends upon how we react. There is no inevitable future either positive or negative. One of the reasons we are glad all of you came to this room and are open to change the conversation is, yes, we will figure out. But we want if we just sit back and coast. That is a better answer. [laughter] [applause] our thanks to booktv. Org and Andrew Mcafee 42 we also want to thank our audience is here and on radio, television, and the internet. I am andrew leonard. And now the place where you are in the know is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] youre watching book tv, starting now Craig Detweiler talks about his book igods in which he looks at the impact of technology and social media and our culture today. This interview as part of book tv College Series from Pepperdine University. And. Host and youre watching book tv on cspan2 on location at Pepperdine University in malibu, california as part of our university series. We like to visit universities and colleges and talk to professors who are also authors. Joining us now is Craig Detweiler. His book, igods how technology shapes our spiritual and social lives. Here is the book cover. Professor Craig Detweiler, buffalo begin to that, what do you teacher at pepperdine . Guest i am a School Teacher first. I help the students navigate the Entertainment Industry. Host also the director for the center of entertainment. Is that part of your professorship . Guest it is a bit of the think tank looking at how media and culture impact each other. Al found shapes our public conversation and how maybe, you know, students can figure out how to read contribute to the greater good. Host your book, igods, is listed and classified as christianity and culture. Why is that . Guest well, i am also trained as a theologian. I am a graduate of graduate of the theological seminary. I had always been interested in how religious feelings are transmitted across culture. I am a person who has been moved by moving pictures. So this is a chance for me to consider how the small screen that we carry in our pocket is slowly over taking that big screen. Host the big screen of cinema, but also of religion. Guest well, thats right. What i do in the book is look at these new companies that have essentially overtaken our lives, whether it is apple, google, facebook, amazon, those are sort of the big four held for who at this point we are spending so many hours in a given date either on their devices are in their platform that i wanted to figure out how they have built their software, how does that affect our relationship to each other and even our relationship to god. Host and you have a quotation from kevin kelly, we tend to see got it reflected in nature, but technology is the better mirror of god and next to that is a picture of jesus. [laughter] host with a laptop. Guest he has a whole world in his hands. Kevin kelly is such a fascinating character. He was one of the early editors of wired magazine. And he also comes from a position of faith. And so i think he has looked at technology and how we organize our lives, how engineers structure things as a way of may be talking about the ways in which god might be the original technologist. And when we look at our dna, you know, which that human genome project with sir Francis Collins , to what degree is the affirmation that we have in our bodies sort of fair reflection . Are we sort of wired or encoded in an organized fashion . And what will what role does god, the technologist, play and all of that . Host are you worried about how much sounder spending with technology from a Christian Point of view . Guest as a parent of a 14 and 12yearold, we deal with a lot of technology in our household. The day that my kids said of what a cell phone i had to think, well, what does putting a smart fun with access to all of the worlds information do . What does that do . And what kinds of cancers, might we need is to help them understand how we deal with that onslaught. I think all of us are feeling the effects of too much information. So, you know, how do we sort through all of the props, all of the interruptions, of the things tugging at our attention. Less urgent from what matters. Host you right to my jesus was more than a carpenter. He was at techie. [laughter] guest indeed. It is funny. Everyone knows that jesus was the son of a carpenter. They dont realize that it is the word for tech time. They could be that we will come to think of jesus as more than somebody did with his hands seen as more of a designer, maybe if we understood what he looked like, to the french horse of the back patent always figure out what to trick thanks. And. Host are we idolizing technology . Guest when i allowed it to be the first thing that i interact with in the morning and the last thing that i do 9i have allowed it to order monday. From the monks actually invented the clock as a way of the mechanical clock as a way of ordering our days so that we would understand there is a time for work and prayer and food. So now we are allowing our smart phones to sort of dictate the hours of our day. And i wonder if our relationship is a little too intense, it is our closest companions. Do we need to turn it off occasionally, to take back the power in our lives, perhaps to power down in order to power up. Host do you power down . Guest yes. My family, i think, loves to leave our phones behind. We live here in california. And so its an station might be to take it to the beach. But that is supposed to be time to awaken much time apart. You know, time to think, time to not be interrupted from time to wonder. Theyre is a need for space in our lives to, i guess, make room to be surprised by what is in front of us rather than this device telling us what is next. Host is that tough to do . Guest it is hard to separate ourselves from technology. I have an assignment in class whereas my students to put it away for 24 hours, computers, laptops, even the television set, and it almost drives them crazy. What they discover is, they might begin that activity to dealing harry, but as they turn off and actually make more space and suddenly get a little more clarity and focus they might to one weeks worth of homework in months one afternoon. There suddenly able to concentrate on one thing rather than being fragmented and distracted. Host are there students who cannot . Guest all of them are supposed to. Some of them confess how hard that it is. You know, that they might have sneaked a peek and tried to, you know, pick up, you know, a little bit of an update when they heard that click. But what i find is they in that kind of remarkably relieved, of little bit freed by this device always beckoning them. And i think that they start to wonder if there is the possibility of recovering a little bit of an electronic sabbath, putting on pause. Host Craig Detweiler, is it possible to be a good christian and still very tech techfocused . Guest open eyes steadily hope so. I am. I am on facebook, twitter. No one interacts with social media more than i do. Again, and is trying to help us to refocus, to appreciate the geniuses of the igods, people like steve jobs and the engineer of google and facebook that have redefined our world in amazing ways and help us solve the problems of abundance, too much information, too many songs, too many friends, they of the above address bring order into the chaos of our world. And yet life still feels a little chaotic. And so i guess i am trying to challenge all people, not necessarily just people of faith, but all people to question to what degree we have made technology and idle and perhaps to realize the limits of what it can and cannot do for us. Host you point out, and i want to know the significance, both steve jobs and geoff basss did not know their real fathers. Guest it is an interesting thing. You have such talented and a sense superior and driven people behind these companies. Why is it that apple and amazon and the visionaries behind those companies were so relentless and restless and their pursuit . His, it is interesting that they did not know their fathers. I feel like and a sense they have all become our fathers now in a sense, the fathers of technology. And i just there was this relentless pursuit to be at the top, to be number one. I respect them, but i also wonder at what point there would be satisfied, happy. Host you have a subchapter in here called the problem with life. What is the problem . Guest well, one thing is there is really not a dislike. So all the time even if you have bad moods to it share peoples only option is to like it. Yes, i agree you lost your job. Wait. Im not supposed to like that. What do i do . It forces you to make all of your news positive. Even if it is something bad you have to frame it in a way where people will say, oh, id like that. I think that is a little bit of a problem when you sort of limit Human Emotion and possibility in a certain kind of way. Much like the power that allows us to, you know, a comment on this thing that might be bad and to sort of, you know, play with that a little bit. It is interesting. The software forces you to be positive and share something that deserves a thumbsup, a like. Host as a College Professor here at pepperdine, is technology interfering with teaching . Guest every teacher, i think, wrestles with what to do with technology in the classrooms. I mean, the students, if they are taking notes on their laptops they are also getting updates, that twitter feed, you know, so you are constantly competing for their attention. Even in an exam situation, the possibility of students, you know, accessing information via their cell phone underneath a desk is high. And the temptation to cheat his everpresent. So one way i have dealt with it, i am teaching media. Yet i allow no media in the classroom. You know, no laptops, no cell phones. They have to be fully present to the discussion and to each other. I might use media on screen. I might have a laptop bringing up our points and slides and showing videos, but i do not want them out there. When it comes time for exams there are allowed to have all media access possible. Host why . Guest because there will never be a time in their workplace where they are cut off from those resources. Set to test them by saying what can you remember from your head or memorize is not actually a real test. The moment that the kids are in they have access to all information. How can we sort through too many options in a limited time frame, isnt that the challenge of the workplace now . Right, given all the options saudis see through things, read carefully, analyze, make wise decisions given too many options host the you close igods with the question, is technology is leading us. What is the answer . Guest i guess we will come to see Technology Like smartphones as something every day, already moving into glass like google glass. I think we will come to see it like a fork. Its so captivating and magical. He can give ourselves to it a little too boldly and uncritically. Kelli distance. Make sure that the tools designed to serve us are not in slavered and. Host the book is kind of a warning shot across the belt. Guest a deep appreciation for the people who created this technology. I appreciate how they help us manage abundance and too much. Is a chance tsa be careful. You have not place too much faith in technology. Too much magic to something that is really meant to service. Host igods is the name of the book about technology shapes our spiritual and social lives Craig Detweiler of pepperdine is the author. Up next on book tv after words with guest host. This week bestselling author Jeremy Rifkin and his latest book is zero marginal cost society. In it, the European Union adviser argues that capitalism is on its way out. Combined Communications Manager command logistic internet will lead to its demise by increasing production and distribution and effectively eliminating corporate profit. This program is about an hour. Host hello. Jeremy rifkin is with me today. I am Siva Vaidhyanathan from the university of virginia, and were going to discuss his newest book. It is also his 20th book which is quite a feat in an of itself. This book takes the entire worlds has is subject but has a tremendous amount of focus on the current state and immediate future state of the u. S. Economy as well. And so it ranges across so many topics. I am sure we will have a very rich set of discussion that will link together quite nicely. Something that you could explain, the title, that is a good way to start, the zero marginal cost society. What do you mean . Guest let me put it in context. I think what is happening is we are just beginning to glimpse the outline of a new Economic System entering on to the world stage, the collaborative common. This is the first Economic System to immersed in the advent of capitalism and socialism. So it is a remarkable historical event with longterm implications for all of us around the world. Triggering agent for this great Economic Transformation is something called zero marginal cost. Let me explain. Theyre is a paradox that is deeply embedded in the heart of the capitalist market which has actually been responsible for the Great Success of the invisible hand over two centuries. The irony is this paradox is now leading to the ultimate triumph of capitalism, but that will lead to its demise as the primary Economic System in the world. Here is the paradigm. In a capitalist market sellers are continually probing for new technologies that can increase the productivity, reduced the marginal costs to put out cheaper products, whenever consumers and market share and bring back profit to investors. Marginal costs of the costs of producing an additional unit have a Greater Service after year fixed cost is covered. Business people of always wanted to reduce marginal cost for obvious reasons. They simply never anticipated the Technology Revolution his productivity was so extreme that it could actually reduce those marginal costs of producing and distributing goods and services to near zero making goods and services essentially or nearly free, abundant, and no longer subject to market forces. That is beginning to happen in a major way across the global economy. You know because i love what you teach. We saw the zero marginal cost phenomenon. First yen people began to find ways to create software to share music files, bypassing the capitalist market and the Recording Industry. And it brought the Recording Industry to its knees. Then the zero marginal cost phenomenon started to infect the newspaper and Book Publishing industry. Millions of consumers began to produce and share their own knowledge and animation, expedia, knowledge together, news blocks, ms. Together. The newspapers went out of business, the Book Publishing industry has been devastated we now have six or 7 Million Students a better taking these free online courses that operate near zero marginal costs and are receiving credit. This is now forcing the universities to rethink their business model. So over the last ten years this zero marginal cost phenomenon has not been academic. But economists thought there would be a fire wall here. They thought, okay, the zero marginal cost would affect information goods, but it would not move over from the Virtual World to the physical world, the brick and mortar world, synergy in Manufacturing Products and so it would not be breached. It is now being breached because the internet is now expanding into an internet of things. The expansive internet that will not allow us to produce energy and products at zero marginal cost. Host the idea of the internet of things sounds in itself paradoxical to many people. The internet to to our general way of thinking is about the flow of information, data. A distributive not a controlled flow of data that seems to touch everybody in interesting ways every day stretches the world. How would this apply to cars, airplanes, collections of everyday materials that you would buy and walmart . Guest the information internet is just now beginning to converge but the Nations Energy internet in europe and now china. And also beginning to converge with a fledgling an automated logistics the internet. It is expanding into three, information, energy, automated transport or logistics and creating one super internet of the internet of things. And these three internet seven placing sensors across the system to monitor the flow of data. We have sensors now connecting three source close, sensors feeding data in from production lines, warehouses, distribution centers, sensors on smart roads, sensors that are connecting the electricity grid so that we know what the appliances are doing at any moment, since disconnecting vehicles and offices and stores. That big a data coming in across the economy to these three internets, communications, energy, and logistics is providing a wealth of data about what goes on at any given moment across the economy. And what this is we now have 13 billion censors out there. Ibm says in 2020 there will be 50 billion. And by 2013 perhaps 100 trillion sensors connecting everything or anyone. Later on we will talk about the questions of privacy and data security, but it is exhilarating and frightening at the same time. A lot of possibilities and challenges, but what is interesting from the upper edge into perspective, millions can now do what they did that information goods, go up on this expanded internet inline data coming through on their own novels with their own applications taken create analytics and dramatically increase there on productivity, and produce their own energy just like they now have reduced their marginal cost on the information goes on the traditional engine at. It has just begun. It is a tremendous shift in the economy. Host can you explain what a pro sumer is . Host guest it is now really coming into practice. That is consumers. They produce. Let me give you two examples of how this internet of things affect the physical world and turns all of us from consumers to prosumers. Renewable energy, a 3d printed products. We now have millions and millions of early adopters in europe who are actually producing their own greedy electricity would solar panels on the roof, Wind Turbines on their property, and they are producing at near zero marginal cost. The technology is still a little pricey, but it is on an exponential curve. Its just like we saw with computer chips and the computer industry, we have had a 20year exponential curve with solar and wind. A solar block costs 60 to produce in 1970. It is 0. 66 today and has continued to go down. But even before the fixed cost is paid back in the marginal cost of producing a unit of some of electricity or wind is free. You just have to capture it. The wind is free. You just have to capture it. We have millions of people who are now producing their own electricity, sharing it with each other on the emerging Energy Internet in europe. To show you how fast this is moving, china has taken up the plan that i have outlined in my last book. And i visited the chinese leaders last year. And after my visit they announced an 80000000000. 4year commitment, 80 billion in four years to begin to lay out the Energy Internet of this continent of thing so that millions of people can produce their own electricity and distributed across china. Putting up three nap billion for its Energy Internet. Far end on this. Host people are making their own stuff, expressions and energy apparently how are they able to find markets, consumers for their products and able to Work Together collaborative lee to forge new works . Wikipedia comes to mind, for instance. As of speech to a good example of the 3d printed products. This has hit us as a storm in the last three years. We now have hundreds of thousands of hobbyists and thousands of small and mediumsize social enterprises that are actually printing out there on physical product just like wed use printers for software and producing information goods. So if you are a small 3d printer you can go up on the expanded internet of things and Download Free software to printer product. And then even can use cheaply recycled material as your feedstock, recycled paper. Even sand and gravel is being melted down. And then the you can power your three the printer with your on Renewable Energy from the merging it Energy Internet, at least in europe. And then you can take your product and transfer it into the future of the logistics internet, the electric and fuel cell vehicles that operate at near zero marginal cost. And soon driverless vehicles that operate at very low marginal cost everyone can become a prosumers and not only consume their own goods but share their surplus with each other over an emerging collaborative common. What has happened here is they are starting to see a debate unfolds. And that is, it is obvious that this near zero margin cost effect is pretty significant damage the question is, what kind of near of what kind of Economic System would we need to envision in an order to have a world where millions and hundreds of millions of people could create their own energy, their own Manufacturing Products which would allow them to bypass the market because he would be beyond profits. Only two ways to organize the economy. Private enterprise or the government or some combination in between what the economists were given, an institution that we rely on, list of millions of people every day in the entire array of goods and services that are not provided by the government and are beyond the profit motive. We call this the social comment on the civil society. Involved in education, health care services, assisted living for the elderly, Day Care Centers and the economists dont pay much attention to this sector, but it is a huge sector 2 trillion in revenue in 40 countries surveyed. It is growing faster than the private marketplace. And then the u. S. , canada, and the u. K. , already over five and a half of the gdp. It is growing while the traditional private Enterprise Market is shriveling. It is quite interesting. What i think we are seeing is the emergence of a collaborative , and in the social economy. The trigger for that is as zero marginal cost infrastructure because it is like a soul mate. This is designed to be distributed to, collaborative, pier production and naturally scaled. Millions of people come together directly and produce and share with each other. You eliminate all of the middlemen of these big, huge Global Companies you mentioned sharing. We are seeing millions of people moving out. There are not just sharing information. Renewable energy, a 3d printed products, cars, homes, closed. We have been hearing about couch surfing. We now have many as a people that are sharing their apartments and homes on this collaborative common. Now, zero marginal costs that has done to the Hotel Industry what file sharing of music to the Recording Industry. Your fixed costs in place. The marginal cost, and additional apartment or home on there. If you have a home or apartment and want to lease it out for short term rental you have already covered your fixed cost. That is your mortgage is being paid, your property taxes are being paid. The marginal cost of running out the travel is near zero. So in new york alone last year responsible for eliminating 1 Million Hotel nights from the hotels. They rented out spaces put up by a small apartment and homeowners. We now have 800,000 people in the United States sharing cars rather than buying cars. They ran out access to the car, not ownership. What is happening is every car that you share takes 15 of the road. Imagine a longterm impact for the auto industry, one of the biggest in the world when the millennial generation comes of age and they are sharing cars. That means reducing 14 out of 15 cars on the road which has an impact. Host are you sure it is zero some . Are you sure that there is a car subtractive or 15 cards subtracted for every car share . Are you sure that that is a Million Hotel rooms that did not get occupied undertaken of the grid rather than merely an expansion of the supply . Eresting point. A small expansion of supply, but that gdp is growing slowly so you can take little bit off the edges because the gdp is growing. In fact, what it is doing is taking the Traditional Exchange economy and moving to their share bubble economy. Interesting enough it throws off the whole measure of economic prosperity. We measure gdp as the amount of output of goods and services, and it does not differentiate between negative or positive. Building prisons are involved in building aircraft for the military or cleaning up toxic waste. That augustas gdp. Hear when people move to a collaborative, and the economic wellbeing of is increasing but it does not count to the gdp. Zero marginal cost, that is a reduction in gdp. So it is a completely different measure of economic wealth. So part of the reason gdp is going down, a small part is the collaborative, and is coming up and people moving beyond the market economy. It is not measured in gdp. Guest you bring us all these get ideas. In a general sense of abundance, an economy driven by an abundance. Is your book, the zero marginal cost society, a prediction for an exercise in advocacy . Guest i think it is looking at the trend line. The Financial Times debt and nice, long review of the book, a thought for review and said the difference between this and future is gross is that what i do is take a look at the existing trend line and what is actually happening now and its trajectory rather than going into the future and coming back. I think that we see this trend line as clear. We see what has happened. We have experienced in the last ten years the devastation of newspapers, magazines, but publishing, the Entertainment Industry from near zero marginal cost not academic. Were now seeing it to the Renewal Energy in europe. It most of the players are consumers and Small Businesses were just beginning to see it in 3d printed products the wild card here is food and water. That price is not going down. Even if we are able to reduce our margin of cost and have the potential sustainable abundant economy Climate Changes the elephant in the room because with Climate Change you have a dramatic effect, more blockbuster winter snow, long spring floods, more dramatic drops in the summer and leon now because of Climate Change seeing a drop in decline of Food Production and water availability so if we cannot tackle Climate Change and the price of food and water becomes prohibited this ship to a near zero marginal cost in society and the collaborative, and will be rather irrelevant. The good news is the internet as things create a third Industrial Revolution and allows us to use less resources more efficiently is to move to Renewable Energy and really mitigate Climate Change if we can get there quick enough. I just dont know if we will. Host this reminds me of three previous predicted moments. You mentioned in the bucket couple of times the prediction made in the 1920s that automation and technological advances would, of course, create fictional job loss and, perhaps, suffering but over the long term we would be celebrated from the drudgery of labor that we would have our Creative Process hes freed and live in a world of at least cultural abundance. You probably have no way of imagining the varieties of abundance. And you seem to say at the end that he was not wrong. He was just early. Guest he wrote that as it to his grandchildren. Everyone was pretty depressed about the depression and that there was a plunge to the bottom happening. He said, look, i know everyone is impressed. You will hear a new term called Technology Displacement. It means that the machines are replacing human beings and they are more efficient and cheaper. This sounds like bad news but in the long run is good news because you say it will liberate the human race. I can imagine my grandchildrens generation, people being able to be liberated from toyo and jobs , bluecollar and whitecollar jobs. The technology will create traditional goods and services, and most of us will be engaged in work on the social common with a more meaningful aspects of life creating community and using the mind in a more explicit way. What is interesting about this is this zero marginal cost phenomenon is really affecting labor. The marginal cost of labor is going towards zero because were introducing now advanced analytics, algorithms, artificial intelligence, robotics across the system, and we are just eliminating. I predicted that would happen in a book called the end of work in 95, controversial at the time but i notice they say he got that spot on in terms of the trend line. So obvious. It just needed to be said. We have now virtual retail eliminating a lot of the sales force. We have whitecollar and Service Industry being wiped out by Technology Displacement is played now than knowledge workers are at risk. We dont need the lawyers, accountants, radiologists. We have analytics that can do the job quicker and cheaper. We are headed toward near zero marginal cost marginal cost labor. Driverless vehicles will be on the road which will replace hundreds of thoan