This module will answer the following questions:

What have been the most important leaps forward in the history of humanity?

There are some major evolutions that have nothing to do with animals, plants or  warriors.

Some are simple ideas. The philosopher Karl Jaspers underlines that Buddha (563-483 BC), Confucius (551-479 BC) and Socrates (469-399 BC) lived more or less in the same period, but in very distant places. In his analysis, they are the central thinkers of the Axial Period, which goes back from the 19th Century to 200 BC.

Jaspers defines it as «a deep breath that favors Consciousness» and adds that these philosophers gave fertile schools of thought to three major civilizations: Indian, Chinese and European.

In Why the West Rules - For Now Morris addresses an even more fundamental question: whether it is sensible or legitimate to try to classify or compare the facts and progress of humanity.

Many anthropologists and many other human sciences specialists argue that it is not.

How do we decide which is the most important of these leaps forward?

Morris disagrees and his essay is an attempt to quantify human development.

As he himself writes:

“Reducing the ocean of facts to simple numerical results has its drawbacks, but it also has the great merit of forcing everyone to face the same fact, with surprising results”.

In other words, if we want to understand what progress has changed the curve of human history, it is quite logical to try to trace it in the meantime.

For many thousands of years humanity has followed a very slow and gradual

trajectory. Progress was painfully slow, almost invisible.

Animals and farms, wars and empires, philosophies and religions, nothing could have a great influence.

But a little more than two centuries ago a sudden and profound phenomenon arrived: it deflected the curve of human history by almost 90°, looking for example at the total population and at social development.

And now comes the second age of machines.

Computers and other digital innovations are doing for our mental strength, for the ability to use our brain in order to understand and influence our environment, what the steam engine and its followers did for the muscle strength in the 19th century.

They allow us to overcome the previous limits and take us to an unexplored territory.

For progress and development, to  control the physical and intellectual environment, mental strength is indeed as important as physical strength.

Such a powerful and unprecedented impulse to mental power means a great stimulus for the whole of humanity, as happened with the impulse to physical potency.

The last few years have been amazing.

Computers have begun to diagnose diseases, listening and talking to us, and writing high quality prose, while the robots started zipping around warehouses and to drive without any help or with minimal help.

For many years digital technologies had proved ridiculously incapable in so many of these activities, then they suddenly became very good.

How did it happen?

And what are the implications of this progress, astonishing yet now considered ordinary?

We live in an era of incredible advances in digital technologies, those that they have hardware, software and computer networks at their core. 

These are not new technologies, companies have been equipping themselves with computers for over half a century and as early as 1982, Time magazine defined the computer as “Machine of the year".

However, just as it took multiple generations to improve the steam engine to the point of being able to supply energy to the Industrial Revolution, it took just as much to properly tune our digital machines.

Computers will continue to improve and do unprecedented new things.

By "full expression of power" we can simply mean that the bricks are already in place for digital technologies to prove themselves important and capable of transforming society and the economy as much as the steam engine.

Long story short, we are at a turning point, at the point where the curve rears up, thanks to computers. We are entering in the second age of machines.

Our second conclusion is that the transformations brought by technology will be profoundly beneficial for us.

We are moving towards an era that will not only be different, but will also be better because we will be able to increase both the variety and the volume of our consume.

Expressed in this way, that is, using the arid vocabulary of economics, it almost seems like one unfortunate scenario.

Who is it that wants to consume more and more?

But we don't just consume calories and gasoline. We consume information from books and friends, entertainment provided by big stars and even amateurs, experience from teachers and doctors and countless other things which are not made of atoms.

Technology can offer us more choice and even more freedom.

When these assets are digitized, when they are converted into many bits and archived on a computer and sent over the network, they acquire some strange and wonderful qualities.

They are subject to a different economy, where abundance, not scarcity, is the norm.

As we will demonstrate, digital goods are not like physical ones, and these differences are what truly matter.

Physical goods remain essential, and almost everyone would like to have them to a greater quality and variety.

It doesn't matter if we want to eat more: we all want to eat in a better or in amore differentiated way.

It doesn't matter if we want to burn more fossil hydrocarbons: we would like to be able to visit more places with more ease.

Computers are helping us achieve these goals and many more.

Digitization is improving the physical world, and these improvements can only become more important.

Economic historians broadly agree that, as Martin Weitzman puts it, “the long-term growth of an advanced economy is dominated by technical progress”.

As we will demonstrate in this module, technical progress is improving exponentially.

In its run, technological progress will leave someone behind, perhaps a lot of people. As we will prove, there has never been a better time to be a skilled or educated worker in the right sense of the word, because this is the kind of person who can use technology to create and capture value.

But there has never been a worse time to be a worker who has to offer only  "ordinary" capabilities because computers, robots and other digital technologies are acquiring the same skills and competences at great speed.

Almost all of the innovations described in this module have arrived in the last few years. We have seen them in areas where progress had been slow for a long time and in which scrupulous studies had come to the conclusion more than once that there would never be an acceleration.

Then, after so much gradualness, digital progress suddenly came. It has come in multiple industries, from artificial intelligence to self-driving cars and robotic.

How did it happen? It was a stroke of luck, the confluence of various improvements, happy yet temporary?

Gordon and Cowen consider the invention of powerful technologies essential toeconomic progress.

Indeed the historians of the economy altogether agree that certain technologies are significant enough to accelerate the normal march of the economic advancement.

To do this, they must spread in many sectors, if not in every sector: they cannot remain relegated to just one.

The steam engine and electricity, on the other hand, spread quickly almost everywhere.

The steam engine has not only massively increased the amount of energy available to factories, but also has revolutionized travel on land and sea

allowing the birth of railways and of the steamers.

Electricity has given the factories a further boost by allowing the machines to be powered individually.

He also illuminated factories, offices and warehouses and led to further innovations such as air conditioning, which made jobs pleasant.

Economists define innovations as steam power and electricity general purpose technologies (GPT).

Economic historian Gavin Wright offers us a concise definition: “periodically new techniques that have a potentially important impact in many sectors of the economy”.

Here by “impact” we mean a significant boost in output due to substantial gains in productivity.

GPTs are important because they are economically significant, because they discontinue and accelerate the normal advance of any economic progress.

Cowen says: “the advantages of the Internet are very concrete and I am here topraise them, not to criticize them [...]. The big picture is this: we have more fun thanks to the Internet. And we have fun spending less. [But] we are a bit scarce on the revenue side, so it's hard to pay our debts, whether it's individuals, business or government”.

The 21st century ICT, in short, failed the main exam, the one that asks it to prove itself as economically significant.

The most notable aspects of the second age of machines were presented:

These three forces are guaranteeing us achievements that turn science fiction into everyday reality.

Just as free goods instead of physical products constitute an increasingly important slice of consumption, intangibles are also a growing capital asset of the economy.

Production in the second age of machines relies less on machinery and physical structures (capital assets) and more on the four categories of intangible assets:

The second, and even broader, category of intangibles is organizational capital such as new management procedures, production techniques, forms of organization and business models.

The effective use of new technologies of the second age of machines almost invariably requires changes in the organization of work.

User-generated content is the third, smaller but rapidly growing category of intangible assets.

Users of Facebook, YouTube, Twitter, Instagram, Pinterest and other forms of online content don't just consume the content, taking up the consumer surplus discussed earlier, but they also produce content by themselves.