Caveats aside, we do have some ideas about how to proceed, and how not to. We do not think the right policy would be to try to halt the march of technology, or to somehow disable the mix of exponential, digital, combinatorial innovation taking place at present. Doing so would be about as bad an idea as locking all the schools and burning all the scientific journals. At best, such moves would ensure the status quo at the expense of betterment or progress. As the technologist Tim O’Reilly puts it, they’d be efforts to protect the past against the future.1 So would attempts to protect today’s jobs by short-circuiting tomorrow’s technologies. We need to let the technologies of the second machine age do their work and find ways to deal with the challenges they will bring with them.

We are also skeptical of efforts to come up with fundamental alternatives to capitalism. By ‘capitalism’ here, we mean a decentralized economic system of production and exchange in which most of the means of production are in private hands (as opposed to belonging to the government), where most exchange is voluntary (no one can force you to sign a contract against your will), and where most goods have prices that vary based on relative supply and demand instead of being fixed by a central authority. All of these features exist in most economies around the world today. Many are even in place in today’s China, which is still officially communist.

These features are so widespread because they work so well. Capitalism allocates resources, generates innovation, rewards effort, and builds affluence with high efficiency, and these are extraordinarily important things to do well in a society. As a system capitalism is not perfect, but it’s far better than the alternatives. Winston Churchill said that, “Democracy is the worst form of government except for all those others that have been tried.”2 We believe the same about capitalism.