Technology is not an Externality

The two industrial revolutions also bred new theories and new ideologies. The Communist Manifesto was a response to the first industrial revolution; the political theories that together shaped the twentieth-century democracies—Bismarck’s welfare state, Britain’s Christian Socialism and Fabians, America ’s regulation of business— were all responses to the second one. So was Frederick Winslow Taylor ’s scientific management (starting in 1881), with its productivity explosion. And so was the invention of professional management a few years later [..].

[Now] there is the upsurge in interest in Joseph Schumpeter’s postulates of “dynamic disequilibrium” as the economy’s only stable state; of the innovator’s “creative destruction” as the economy ’s driving force; and of new technology as the main, if not the only, economic change agent. They are the very antithesis of all earlier and still prevailing economic theories based on the idea of equilibrium as a healthy economy’s norm, monetary and fiscal policies as the drivers of a modern economy, and technology as an “externality.”

All this suggests that the greatest changes are almost certainly still ahead of us. We can also be sure that the society of 2030 will be very different from that of today [..] The central feature of the next society, as of its predecessors, will be new institutions and new theories, ideologies, and problems.