You both miss the crux of the argument, i think. It would be more precise to say that physical machines raise the standard of living that we measure, but abstract machines reduce that which we don't measure. (Viz, finance.)

Compared to a generation ago, we can stuff more crap in our pockets and wardrobes, but housing is precarious and public institutions are weaker. Good luck supporting a family on a bottom-quartile wage.

GDP, measures of inflation: Goodhart's law.