Robert Gordon and Erik Brynolfsson debated their opposing views of where the economy is headed at TED2013. Last week, they brought the debate to a TED Conversation. Photos: James Duncan Davidson

Last week, TED speakers Robert Gordon and Erik Brynjolfsson joined us for a live, one-hour debate on the future of the US economy.  It was a furious hour of typing, with both speakers contributing just over 1,500 words in response to a wide variety of user questions.  A few highlights:

Ryan Zeigler asks:

Mr. Brynjolfsson, you stated in your talk that you feel that we need to “race with machines” rather than against them. In what manner do you feel that this effects the future of education?

Erik Brynjolfsson responds:

We really need to reinvent education. My industry has lagged other industries in digitizing. Far behind music and other media, finance, manufacturing, retailing, etc.  But that’s good news: lots of room to improve.  Digitization of education will do two things:

1. Much higher quality and lower cost as very best teachers and methods reach larger audiences. Examples: superstars like Sal Khan of Khan Academy or physics lessons from best MIT profs at EdX.
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2. More importantly, gather enormous data about what’s working and not working. Apply big data techniques to improve teaching methods and to personalize how things are taught. Adapt pace and methods, based on students unique situation. Continuous learning by the educators, not just students. My students are already doing this to optimize ad clicks – can soon do it for education.

Michael Noyes asks:

Capitalism has created more wealth by far for more people than any other system. However, have we reached a point in our technological history when the pendulum must swing back toward more socialist economics to achieve more prosperity for more people?

Robert J. Gordon responds:

You have to distinguish between “socialism” and the capitalist welfare state as exemplified by Sweden, the Netherlands, etc. Socialism involves government ownership of the means of production and was practiced by the postwar UK Labour government which nationalized steel, transport, etc. It was Thatcher’s achievement to reverse all that, and Britain went from being a laggard to one of Europe’s most dynamic economies.

Yes, we need more of a welfare state, particularly to prepare children in poverty to compete in our educational system. Now they are dropping out of high school and condemning themselves to lives of manual labor and unemployment.

Theresa Sanker asks:

When are America’s economic priorities going to shift toward education, saving, and long-term investment, and away from excessive reliance on military power and cheap energy?

Erik Brynjolfsson responds:

When more people like you demand it. Simple as that.

Robert Gordon adds:

Heckman has shown that the problem is not that we don’t spend enough resources on education. Reducing class sizes has no effect. The problem is that educational resources are not distributed evenly. In an ideal world we would get rid of property taxation as the basis for educational finance, since that gives an advantage to communities with wealthy residents. We should have education funded by a nationwide value-added tax.

The problem with our military, besides the needless wars in Iraq and Afghanistan, is the endless buckets of cash poured into ridiculous projects like the F-35 fighter which has no known enemy to justify its cost. We built the B-17 in WWII for $250,000 per plane!

Finally, what’s wrong with cheap energy? Are you in favor of expensive energy?

With 113 excellent questions and answers, this was a fascinating and informative debate. Don’t miss the rest of the responses, available on TED Conversations »

Robert Gordon: The death of innovation, the end of growthEconomists Robert Gordon and Erik Brynjolffson see very different things when they look at the stagnation of the U.S. economy in recent years. It’s almost as if they’re looking at an optical illusion image – one seeing a candlestick while the other sees two faces just inches apart. In today’s talks, they both outlined their thoughts.

Gordon sees the candlestick — he believes that the growth could be tapering off for good and that our best innovations may be behind us. As he points out, between 1900 and 1960, we went from traveling by a horse and buggy to taking Boeing 707s. But in the sixty years since, we haven’t learned to go any faster at a mass commercial level. What’s wrong? In his talk, he outlines four headwinds which are keeping us from continued growth at the pace of the past two centuries: demographics, education, debt and inequality.

Erik Brynjolfsson: The key to growth? Race with the machinesMeanwhile, Brynjolfsson sees the faces. He says that the stagnation may simply be growing pains as we move from an economy based on production to one based on ideas. He also looks to the past for an example, taking us back 120 years to the Second Industrial Revolution. While all the tools were in place for mass production, it took three decades for productivity to skyrocket. The first generation of managers — who had old ideas about systems and workflows – had to age out of the system for growth to start. This is where Brynjolfsson thinks we are now. He sees another wave of innovation in our future — if humans can learn to work alongside computers and robots in more symbiotic ways.

Click the links above to watch these two fascinating talks. And then watch this 12-minute debate between the Gordon and Brynjolfsson on what it means to work today … and what it will mean in the future.

Do you think we are witnessing the end of innovation? Is growth over? Did either speaker here change your opinion? Explain in the comments.

TED Curator Chris Anderson opened this morning’s first session, Progress Enigma, with a provocative question: What is the future of work? He asked the audience: According to your worldview, is the growth of innovation accelerating? Not surprisingly, the overwhelming majority of the audience answered yes. But is the answer so simple? Economist Robert J. Gordon followed Chris’ question with an argument that economic growth is slowing down for the majority of the population, and may even start reversing. Erik Brynjolfsson then gave a talk arguing that income may be falling, but creative productivity and innovation are as strong as ever, it’s just that people are providing free services (like TED Talks!). Chris then invited both speakers on stage to debate growth and progress.

Gordon began the debate by asking Brynjolfsson about the value of some of the innovations he mentioned in his talk, like Deep Blue and Baxter the Robot, which are single-purpose machines. Would one individual computer, asked Gordon, ever be able to replace humans in totality? The purpose isn’t to just produce more stuff, answered Brynjolfsson, but for humans to compliment new technology. Indeed, this is still true innovation. But as Gordon pointed out, the real problem that this technology poses is putting people out of employment.

Chris then posed the question to Brynjolfsson: Are you under an illusion that the curve of growth is moving upward, while Gordon is seeing a more realistic S-curve? Brynjolfsson countered: Gordon is under an illusion that occurs often from sitting atop the S-curve, that you can’t see the rest of it. In other words, we can’t foresee the things we haven’t made yet. Brynjolfsson said, “Two hundred years ago, Gordon’s grandfather might have said we’ve reached the pinnacle of horseshoe making, we can’t make it any better,” and that would have been the end of that innovation. But of course innovation wasn’t over with that invention’s progress; we simply can’t foresee the things we haven’t made yet. Gordon asked again about the purpose of all this progress, asking: “What good is a world in which we can listening to a bunch of free music, but no one has any jobs?” The crowd went wild.

Indeed, the two agreed that the main issue we face is that growth isn’t happening for the bottom 99 percent. Brynjolfsson argued that we are innovating at an insane rate, while Gordon’s consistent response was, What’s the point, if people don’t have jobs? Chris posed the question to the audience: Would you rather live for a year without the Internet, but without plumbing, or with plumbing and without Internet? Yet after an undoubtedly exciting debate, at the close the audience’s vote remained 6-1 in favor of accelerated growth.

Erik Brynjolfsson says growth is not dead. To make his case in session 1 of TED2013, he points out two moments in the past — one that took place 120 years ago and the other that took place about 15 years ago.

One hundred and twenty years ago, the Second Industrial Revolution began. But while the tools had been invented for mass production to go into effect, productivity didn’t increase for another three decades. Why? Because while the first waves managers replaced steam engines with electric motors, they didn’t radically redesign their systems and workflows. It took a generation for the old ways to be abandoned and new norms to be established. Then, productivity soared.

Brynjolfsson, the director of the MIT Center for Digital Business, wonders if we might be in the transition period when it comes to our industrial revolution, computers and the digital age. Interested in the way IT affects organizations, markets and the economy, Brynjolfsson notes that productivity is becoming decoupled from income and employment. But this isn’t a doomsday scenario.

“These troubles are sometimes misdiagnosed as the end of innovation,” says Brynjolfsson. “But they are actually growing pains of what I and Andrew McAfee call the new machine age.”

This new machine age is about idea production, rather than physical production. This new machine age is also unique because it is measurable (hello, big data), combinatorial (meaning that innovations can be remixed) and exponential, meaning that it advances at an incredibly rapid pace.

“Computers get better fast than anything ever before,” says Brynjolfsson. ”A child’s PlayStation today is more powerful than a military supercomputer from 1996.”

Machines are even starting to be able to learn. Brynjolfsson points to IBM’s Watson who was not so good at the game Jeopardy, but improved very quickly, soon beating the world Jeopardy champion. Watson is just 7-years-old now and is learning skills all the time. He’s even applying for some jobs.

“The full implications of the new machine age are going to take at least a century to play out,” says Brynjolfsson. But he admits that, for now, the growing pains are very real. People in a wide slew of industries are being replaced by digital labor and losing their jobs — not to mention their ability to find a new one.

Speaking of a human tax consultant versus TurboTax, Brynjolfsson says, ”How can a skilled worker compete with a $39 piece of software? She can’t … People are racing against the machine, and many of them are losing that race.”

So what can we do to make sure that our prosperity continues? ”The answer is not to try to slow down technology,” says Brynjolfsson. “We need to race with the machine.”

This brings us to the moment Brynjolfsson wants us to remember from 15 years ago — when grandmaster Garry Kasparov played IBM supercomputer Deep Blue in a game of chess. Kasparov won. But in a rematch a year later, Deep Blue came out the victor. Soon, however, a new kind of chess game was played. In this match, humans and computers could collaborate if they wanted. In this game, it wasn’t a grandmaster or a computer who won — the winner was a human-computer collaboration. Team of  humans and computers could not be beat.

The answer, says Brynjolfsson, is doing the thing that humans do best — thinking — while working with machines, doing what they do best.

Brynjolfsson ends his talk with the bold words: ”Racing with the machine beats racing the machine.” 

Here are the speakers in this session. Click on their name to read a full recap of their talk:

A former two-term governor of Michigan, Jennifer Granholm makes the case for empowering states to create jobs through a Clean Energy Jobs Race to the Top.

Robert J. Gordon is among the most influential macroeconomists in the world. And the big picture he sees is not altogether rosy.

Erik Brynjolfsson examines the effects of information technologies on business strategy, productivity and employment.

What happens when Robert J. Gordon and Erk Brynjolfsson debate? Read here.

Born in Havana, Cuba, Pedrito Martinez spent his youth steeped in rumba and the music of the Santería religion. His music had become an intoxicating blend of Cuban tradition and African-American styles.

Rodney Brooks builds robots based on biological principles of movement and reasoning. The goal: a robot who can figure things out. Get ready to meet Baxter.

The founder and CEO of Romotive, Keller Rinaudo creates robots that use smart phones and are designed for interaction.

Nilofer Merchant thinks deeply about the frameworks, strategies and cultural values of great businesses new and old, large and small.

Bono, the lead singer of U2, uses his celebrity to fight for social justice worldwide: to end hunger, poverty and disease, especially in Africa. His nonprofit ONE raises awareness via media, policy and calls to action.