I love the singularity video at #22 http://www.jwz.org/blog/2012/05/welcome-to-life-the-singularity-ruined-by-lawyers/, and it highlights one of the major differences between the next round of technologies and previous ones, which is that the new ones will be pervasively governed by license agreements. The ways in which they benefit and harm us will depend more on the terms of those agreements than on the engineering aspects of the technology.
Paul Krugman post… raised the possibility that changes in technology were causing a redistribution from labor to capital…. My point was to note that this sort of redistribution cannot just be a matter of technology, it also involves a very big role for the laws and norms that make such a redistribution possible…. [T}here is no measure of capital that is independent of its price…. What is the physical presence of a software or pharmaceutical patent? Yet these items are hugely important in the modern return to capital story since a very large chunk of profits is earned by software companies, drug companies or other corporations that profit primarily based on their ownership of intellectual property.
Intellectual property serves a social purpose. It is a way to provide an incentive for innovation and creative work. However it is certainly not the only way…. It is far from clear that patents and copyrights are the most efficient mechanisms for supporting innovation and creative work. If our current intellectual property regime also has distributional consequences that we consider bad, then that would be a serious strike against it.
But the basic point is that if we are concerned that the economy is leading to a situation where an ever large share of the gains from growth are going to capital, we should not imagine that this is just the result of technological change. It was the result of conscious policy choices. As we say here at CEPR, money does not fall up.