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] first 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