THE SECOND MACHINE AGE

Erik Brynjolfsson and Andrew McAfee, W.W. Norton, 320 pages, $26.95

The effects of information technology are turning explosive.

In "The Second Machine Age," Erik Brynjolfsson and Andrew McAfee describe how machines can forecast home prices, design beer bottles and do countless other things better and more cheaply than humans. Formerly complex tasks can be mastered, then reproduced and distributed at almost no cost.

This will have one principal good consequence, they argue, and one bad. Households will spend less on groceries, utilities and clothing; the deaf will be able to hear, the blind to see. But meanwhile, the gap is growing between the few whose skills are enhanced by technology, and the far more numerous people competing for the remaining jobs that machines cannot do, such as folding towels and waiting tables.

Economists believe innovation is always good for society because displaced workers will find jobs supplying new goods and services. The authors, both from the Massachusetts Institute of Technology's Center for Digital Business, acknowledge this but ask, "What if this process takes a decade? What if, by then, the technology has changed again?"

In case they turn out to be right, they offer prescriptions. People should develop skills that complement computers, such as idea generation and complex communication. Policymakers should improve basic education; pour money into infrastructure and basic research; and admit more skilled immigrants.

This is sensible, but unsatisfying. It may expand the circle of winners, but it seems unlikely to fundamentally alter the gap. The authors may not have the solution to growing inequality, but their book is one of the most effective explanations yet for the origins of the problem.

THE ECONOMIST