I would argue they merely replaced the skills of hand-spinning and hand-weaving with the skills of keeping the machines running. I suspect anyone who doesn’t think that’s a real set of skills, hasn’t tried to run those machines.

The biggest innovation in recent times has been the smartphone, in particular the android operating system and all the novel software for that system, and, by and large, what the android innovators are getting is the smell of oil rag and a slap across the face.

If we use shadowstats figures rather than official government figures, growth has collapsed, which is what we would expect if innovators are are getting the smell of oil rag and a slap across the face.

Moreover those “innovators” that have turned innovation into dollars in the recent past have often used the legal system astutely to their advantage (the ratio of legal/business to technical engineering in the tech industry would be interesting to track), collecting rewards way above what the people who drafted the laws in and for an earlier age intended. It’s not obvious that societies will keep on tolerating that a few use the might of the state to collect unearned economic rent for long. And even if they did, it seems quite probable those excluded will find some ways to route around the rent seekers’ fragile edifice.

The capitalists and founders are the same people, and they are capturing more of the gains. Witness, for instance, the large share of Facebook that Zuckerberg has held for himself.

We emulate the wealth that came from the recent past on community wide scales, in which we return to knowledge as the first prior of economic action and measure it through time use, rather than the limited access of human capital to money. To be sure, we continue to encourage the human capital to money link but do so with the realization that it cannot provide for all of our needs. The trickle-down that has really been blocked has been the use of knowledge at the individual level, and the fact that it was blocked is what made our lives unaffordable in the recent present.

Who has the high marginal benefit…? Well, organizations – people with incumbency. It merely so happens that capital is more organized.

Anyway, isn’t the real problem with “When you simply write down the process you want or draw the object you want and the computer translates it for you the seep down will grind to complete halt” not that the innovation is locked in the innovator’s brain but that the computer replaces the low skill workers he would need to translate it into reality?

Labor is in a weak position to bargain. Policy issues include a slow economy, exchange rates, unionization, immigration laws, etc.

Capital is also in a weak position due to a slow economy.

I’m not clear why you label the residual beneficiaries as “innovators,” unless you’re counting as innovators CEOs, those in finance (and other fields) with the political power to extract massive rents (e.g., too big to fail bailouts) and the like.