Paul Krugman Slams the iPhone, 'Techno-Revolution' Economy

If the future is already here, then why are so many people struggling in the modern economy that is constantly finding new ways to make our lives easier and cheaper?
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Ben Cohen
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If the future is already here, then why are so many people struggling in the modern economy that is constantly finding new ways to make our lives easier and cheaper?
Nobel Laureate and professor of economi

If you've ever read TechCrunch for a sustained period of time, you'd get the distinct impression that not only are there thousands of 'disruptors' out there revolutionizing the economy to work for the benefit of mankind, but some sort of Silicon Valley inspired tech utopia is just around the corner where anyone can create an app and become a billionaire.

The potential for this techno-fantasy land knows no limits with everyone including politicians buying into the hype. Jeb Bush believes an Apple Watch will save America's health care system, while futurist Ray Kurzweil believes that "all of people’s basic needs can be met through open source forms of information."

If the future is already here, then why are so many people struggling in the modern economy that is constantly finding new ways to make our lives easier and cheaper? Here's Paul Krugman on the myth of the 'techno-revolution':

A funny thing happened on the way to the techno-revolution. We did not, it turned out, get a sustained return to rapid economic progress. Instead, it was more of a one-time spurt, which sputtered out around a decade ago. Since then, we’ve been living in an era of iPhones and iPads and iDontKnows, but even if you adjust for the effects of financial crisis, growth and trends in income have reverted to the sluggishness that characterized the 1970s and 1980s.

In other words, at this point, the whole digital era, spanning more than four decades, is looking like a disappointment. New technologies have yielded great headlines, but modest economic results.

Those modest economic figures are also highly misleading when you take into account the fact that much of that growth was experienced by the wealthy, making income inequality the highest it has ever been since 1928.  And funnily enough, that era saw the exact same rhetoric in regards to technological advancement. As Krugman notes:

In practice, it [the idea of a techno-revolution] acts as a distraction from more mundane issues — and an excuse for handling those issues badly. If you go back to the 1930s, you find many influential people saying the same kinds of things such people say nowadays: This isn’t really about the business cycle, never mind debates about macroeconomic policy; it’s about radical technological change and a work force that lacks the skills to deal with the new era.

Krugman's thesis makes a lot of sense - we have invented some incredibly useful technology, but we have absolutely no idea how to implement it to benefit anyone other than the ultra wealthy. World War II brought a huge boost to the US economy because there was finally somewhere to put that technology and man power to use. In today's climate though, there is little energy for collective action given the extreme polarization of the political system. Global warming could act as a tremendous opportunity to put some of that technology to use, but when the majority of Republicans don't believe it is actually happening, the chances of collaboration are fairly slim.