Derek Thompson writes:

How should we tell the story of the digital century, now two decades old? We could focus, as journalists tend to do, on the depredations of the connected life. As Facebook, Twitter, and YouTube have devoured the online world, they have undermined traditional media, empowered propagandists, and widened America’s political divides. The smartphone, for all its wonder and utility, has also proved to be a narcotizing agent.

But what if, instead of focusing on Big Tech’s sins of commission, we paid equal attention to its sins of omission—the failures, the busts, the promises unfulfilled? The past year has offered several lurid examples. WeWork, the office-sharing company that claimed it would reinvent the workplace, imploded on the brink of a public offering. Uber, once seen as an unstoppable force that would transform urban transit as radically as the subway had, has likewise seen its public valuation plummet. From January to October, the two firms together lost $10 billion.

While these companies might seem like outliers, their struggles hold a message, not just for investors but for all of us. Big Tech continues to find new and profitable ways to sell ads and cloud space, but it has failed, often spectacularly, to remake the world of flesh and steel.

For decades, we’ve turned to Silicon Valley to show us the future of American endeavor. Optimism flowed from the Bay Area’s evangelists but also from Washington. “In the new economy, human invention increasingly makes physical resources obsolete,” President Ronald Reagan said in a 1988 speech that heralded the promise of the computer chip. In the ’80s and ’90s, Democrats such as Al Gore made up a new generation of liberals—named “Atari Democrats,” after the early video-game company—who believed computer technology would provide opportunity on the scale of the New Deal. The internet age was hailed as a third industrial revolution—a spur for individual ingenuity and an engine of employment.

On these counts, it has not delivered. To the contrary, the digital age has coincided with a slump in America’s economic dynamism. The tech sector’s innovations have made a handful of people quite rich, but it has failed to create enough middle-class jobs to offset the decline of the country’s manufacturing base, or to help solve the country’s most pressing problems: deteriorating infrastructure, climate change, low growth, rising economic inequality. Tech companies that operate in the physical world, such as Lyft and DoorDash, offer greater convenience, but they hardly represent the kind of transformation that Reagan and Gore had in mind. These failures—perhaps more than the toxicity of the web—underlie the meanness and radicalism of our era.

Decades from now, historians will likely look back on the beginning of the 21st century as a period when the smartest minds in the world’s richest country sank their talent, time, and capital into a narrow band of human endeavor—digital technology. Their efforts have given us frictionless access to media, information, consumer goods, and chauffeurs. But software has hardly remade the physical world. We were promised an industrial revolution. What we got was a revolution in consumer convenience. [Continue reading…]