Robert J. Gordon, an economist at Northwestern University, has recently published an important new book, The Rise and Fall of American Growth, which argues that the U.S. has entered a new age of stagnation in which our hopes for an ever more prosperous future will largely evaporate. While Gordon’s argument is often characterized as being the opposite of the one I have made in my two books about the impact of advancing automation technology on the job market (most recently, Rise of the Robots), there are many areas in which I think we would agree.

Gordon’s main point is that we no longer have the kind of robust, broad-based innovation that powered economic growth and rising living standards between, roughly, 1870 and 1970. Electricity, cars, planes, indoor plumbing, and all the rest completely changed the quality of our lives during this period, and we haven’t seen anything comparable in the decades since. This is certainly true. However, I think it’s clear that innovation since then has continued (and even accelerated) but has focused largely on information and communication technology. It has not had the same impact on median incomes and living standards, and I think one important reason why is that information technology is increasingly substituting for cognitive human labor.

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There seems to be a fundamental assumption underlying Gordon’s analysis: If only we could once again have that broad-based, robust innovation, then nearly everyone would be better off, and we would again see real incomes for average workers rising (just as we did before 1970). Many economists would probably agree.

I think that assumption is wrong. It’s wrong because information technology (and specifically artificial intelligence) is going to intertwine with any innovations that occur in the future, making them less labor-intensive. Unless we change our economic rules — perhaps with something like a guaranteed income — broad-based prosperity will remain elusive, even if those robust innovations do eventually show up. The innovations may come, but the people at the top of the income distribution will continue to capture nearly all of the gains.

The important insight is that those 1870–1970 innovations were all-powerful job creators, and in the market economy jobs are the only mechanism that distributes income to the bulk of the population. Think of the millions of solid middle-class jobs created by the rise of the automotive industry: manufacturing, driving, repairing, fueling, and insuring cars and trucks (and even washing them, too). The innovations of the future — regardless of how dramatic and broad-based they may be — are very unlikely to create that number of jobs, and the jobs they do create may well require skills and education beyond the capability of the average worker.

To visualize the problem, imagine the realization of a truly disruptive technology: the transporter from Star Trek, or the technology in the movie The Fly. Such a development would surely meet Gordon’s criteria for robust innovation — the impact of the transporter on our society and economy would be staggering. Clearly, it would lead to dramatic efficiency improvements in the way people and materials are moved, and it would improve the quality of our lives in many important ways.

But what about the impact on global employment? The job losses in the existing transportation and distribution industries would be staggering. Would other jobs be created? Perhaps in tourism? What if you could beam over to Paris for dinner, and then travel back home immediately afterward? What would that mean for the hotel industry? Would we all be employed as tour guides? It’s worth noting that IBM is already investigating the possibility of deploying its Watson system in this area. It seems very likely that the day is coming when your mobile device will outperform nearly any human tour guide.

Here is the fundamental question: Once technology becomes sufficiently advanced, is it possible that it becomes inherently, and perhaps dramatically, less labor intensive? If so, in the absence of jobs that pay well and that are accessible to the bulk of the population, what is the mechanism that will translate innovation into broad-based prosperity?

The chart below shows how compensation for average workers and productivity have decoupled since the mid 1970s. Suppose we suddenly had broad innovation in the early 20th century. Would that cause these two lines to converge? I doubt it.

To some extent, Gordon may have missed the real story here. The most important insight is not that we no longer have broad-based innovation. It’s that innovation no longer guarantees broad-based prosperity. To solve that problem, I think we will ultimately have to change our economic rules.