Web/Tech

November 25, 2007

The Glamour of Technology: Subnotebook Department

Gordon's Notes sends us to Charlie Stross, who promptly succumbs to the Glamour of Technology:

Charlie's Diary: Commoditizing our future: I've spouted off previously in this blog about my lamentable poor saving throw versus shiny! — not to mention my irritation at the refusal of the consumer electronics industry to render me bankrupt by actually giving me what I want. Trouble is, at long last they've turned around and done it. I have in my possession an Asus Eee subnotebook... £220... right now there's a certain scarcity value attached, and they haven't yet sunk to their real price, somewhere around thruppence ha'penny. But the process is becoming clear.

Back in 1998, I bought a notebook... Hewlett-Packard... 166MHz processor, 80Mb of RAM, a 4Gb hard disk, an external CDROM drive (reader, not writer), and a docking station... full-whack £1900 that bundle was going for a few months earlier.... Compare with the Eee. On processor and memory... 900MHz and 512Mb respectively. The disk space is the same, except the Eee uses solid state memory rather than a spinning mechanical thingy.... For an extra £80, I bought the Eee 8Gb of additional storage media (an SDHC card), an upgrade to 1Gb of RAM, and an external CD/DVD rewriter....

Moore's Law suggests that every component of a PC halves in price on a roughly 18-month cycle. A desktop PC today should be roughly 100 times as powerful as a desktop PC of similar price 10 years ago.... A naive soul with no prior experience of consumer capitalism might ask why, instead of doubling in power, the manufacturers don't concentrate on cutting prices? But that's not how the industry worked. Until now....

A couple of years ago Nicholas Negroponte of the MIT Media Lab launched the idea of a $100 laptop for education in the developing world. Well, the OLPC XO-1 is now out.... Intel's reaction was the Classmate reference design, their own purported rival to the XO-1; the Asus Eee is what you get when a large far eastern OEM thinks "hang on, can we commoditize this and sell it in bulk?" Microsoft... failed to make it onto the Eee bandwagon because they wanted $40 for a Windows XP license — on a machine that starts at $250 for the stripped-down version. Mine runs Linux perfectly well, thank you, and comes with the basic stuff you need to be productive; OpenOffice, Thunderbird for email, Firefox as a web browser, and some other gadgets (like Skype and a webcam).

The Eee... is close to an order of magnitude cheaper than previous ultra-lightweight subnotebooks. And I think I'm going to use it as a pointer to a future trend.... The Eee is about 8 times as powerful as that 1998 Omnibook, at a quarter the price.... The dirty little fact everybody in the consumer computer trade have been trying to ignore... is that the computer biz is overdue for commoditization. There is no intrinsic reason why a kilogram of plastic and metal with a couple of silicon chips in it should sell for more than its weight in silver.... Apple have staked out a boutique territory for themselves, and more power to them for noticing that they needed to do that in order to survive: but that's a small lifeboat, and not everyone can market themselves on being cooler than everyone else.

The Eee isn't quite the disposable computing resource I've been wanting — they'll have to shave a zero off the price tag for that — but it's close enough for now. It does the basics I need, runs portable cross-platform applications and editing open file formats, and if I leave it on a train or sit on it or something my immediate reaction will be to swear, check my backups, and buy another one, rather than to whimper and go talk to my bank manager...

July 21, 2007

Ezra Klein on Video, and Health Care too

He thinks things are looking up for that vast fifty-effective-word-a-minute wasteland of an information channel that is modern TV:

Ezra Klein: Logic, Media, Incentives, And Me: I sort of enjoy the double challenge of being questioned on television: You both need to make your point, but also frame your answer in such a way that it retroactively makes the question sensical. That's the real trick.

Increasingly, though, the incentives are changing. Assume that the incentive for going on television is to raise your profile (which is about 75 percent correct). If I went on television five years ago, a large part of my incentive would be to make the host like me. After all, these appearances pass in an instant, and most of you would never see the program. So if I want to reach the maximum number of people with my arguments and do the most to increase my visibility, I want to keep coming back.

Now, however, with YouTube and GoogleVideo and online archiving, a single, contentious appearance can be seen on the internet a million times. Everyone, after all, has seen Stewart berate Tucker Carlson on Crossfire, but very few of us had actually tuned in that day. Similarly, my segment on the Kudlow show, replayed on the internet a few thousand times, did much more for my reputation among the audience relevant to my success than have my more friendly, but bland, appearances on other shows.

Making sense often requires you to be disruptive, and not long ago, being disruptive was probably a bad idea. Now it's a good one. And since the channels are wising up and putting their videos online with advertising before them, they also want widespread online dissemination of appearances, and so their incentives are increasingly aligned with mine. Does this mean more folks will be making sense? Not necessarily. But it means their might be more room for sense-making.

Here's the video:

Ezra Klein on health care

July 05, 2007

Richard Baldwin Praises the Economists of Italy

He writes, on http://voxEU.org/:

Economic policy discussion on the web | vox - Research-based policy analysis and commentary from Europe's leading economists: Economics is more relevant to policy-making than ever before, but you would never know it from the public discourse. The internet is helping bridge the gap, and http://www.laVoce.info has led the change. But how will the internet’s role in the public discourse on economics change in the future?...

Major advances in theoretical and empirical economics now allow economists to address policy issues with much more realistic tools... economics and psychology... behavioural economics, experimental economics... the new institutional economics... contract theory... enormous new data sets... powerful statistical tools... ‘panel data’.... With all these excellent tools at hand, one might have expected the newspapers and Parliamentary debates to be filled with new insights, new results and new approaches. Alas, with few exceptions, the public debate has not moved much beyond the simplistic pro- vs anti-market exchanges that have dominated Europe since the post-war rise of welfare states. Case in point? The 2007 French Presidential election debate.

In the 1980s, brilliant young economists like Paul Krugman, Larry Summers, Jeff Sachs and Joe Stiglitz felt obliged to write Brookings or Economic Policy articles, to sit on government panels, to write policy reports, and to send Op-Ed pieces to the Financial Times.... Today’s brilliant young economists are much less interested in participating in the public debate in these ways....

Medical journals address the problem in a very different way – each article includes the hard science, but it also includes a less formal discussion of what the results mean for medicine and how they fit into the bigger picture – the “Discussion Section.” The International Committee of Medical Journal Editors has called this the “IMRAD” structure (Introduction, Methods, Results, and Discussion) and state that the structure is “not simply an arbitrary publication format, but rather a direct reflection of the process of scientific discovery.”[3] In the top economic journals, “Policy Implication” sections have fallen out of favour. Including such conjectures in a manuscript is unlikely to raise the probability of publication....

On the bright side, the internet has two features that make it an excellent vehicle for bridging the research-reality gap. Feature No.1: its technology makes publishing very cheap. Feature No.2: its global span makes it possible to find an audience.... One can spend some pleasant hours browsing the various blogs – and even learn a lot from the big blogs, like “Economist’s View”, “New Economist”, ”Marginal Revolution”, and the sites of Brad DeLong, Greg Mankiw, and Nouriel Roubini. But this is not the profession’s response to the Discussion Sections of medical journals. It is more like the collegial coffee-room discussions we used to have when there was time for such things.

What Tito Boeri, the founder of http://www.laVoce.info, discovered 5 years ago, was that there is a large demand for high-level public discussion of economic policy, higher than the level in newspapers or blogs. Something much more like the Discussion Section of the British Journal of Medicine: discussion of real-world, policy-relevant issues by researchers that is screened by researchers. Tito also found that there was a large supply of researchers willing to devote time – for free – to such discussion. We would probably need psychology-and-economics experts to understand the motives, but whatever they are, these economists are doing Italy a pubic service.

July 02, 2007

Apple Blew Out iPhone Estimates

Paul Kedrosky:

Paul Kedrosky: Apple Blew Out iPhone Estimates:The numbers are beginning to come in, and analysts increasingly think that Apple's first-weekend run of iPhone sales whupped their initial pre-release estimates.... Munster /Jaffray [predicted] 200,000 [and estimate] 500,000.... Shope/Morgan [predicted] 180,000 [and estimate] 310,000...

June 28, 2007

Dr. Dow-Jones and Mr. Wall Street Journal and Rupert Murdoch

Rupert Murdoch is about to buy the Wall Street Journal. This is a big deal. But I think that almost everybody is thinking about what this means in the wrong way.

To understand what Rupert Murdoch's forthcoming purchase of the Wall Street Journal means, you need to start with the fact that there is a good Wall Street Journal and a bad Wall Street Journal. The good Wall Street Journal is the news pages as built up by Norman Pearlstine, with past and present stars like Al Hunt, Davie Wessel, Alan Murray, Ron Suskind, Walt Mossberg, Greg Ip, and a galaxy of others: the finest, smartest, hardest-working, and most professional group of star news reporters in the world. The bad Wall Street Journal is the editorial page of ethics-free right-wing--no, not right-wing, Republican wingnut--partisan hacks. As Ken Auletta put it in an excellent New Yorker article a couple of years ago, describing the bad Wall Street Journal:

Annals of Communications: Family Business: The New Yorker: the opinion page... Robert Bartley.... From 1972 to 2002... ran the editorial page... as if Bartley owned and operated his own private newspaper... a non-stop campaign on behalf of supply-side economics, a return to the gold standard... and prosecuting the Cold War.... The predominantly Democratic Bancroft family... would have preferred “a less acerbic editorial voice.... There is a lot that I think is beyond the pale.”... [T]he editorial page... omitted facts that contradicted its assertions.... crossed a line in advancing its ideology...

Henry Kissinger once famously said of a statement that "it had the added advantage of being true." For the bad Wall Street Journal of the editorial page--at least when I have dealt with them--truth is simply irrelevant: to show them person-to-person that they are factually wrong makes no impact at all. Few like the bad Wall Street Journal, not even those who usually find it useful. Here's one view:

On the Wall Street Journal Editorial Page: ...smug rich-guy arrogance... blithe indifference to actual human nature... "arrogant elites"... out in the open, brazen and unashamed... dubious factual assertions... mischaracterize... our views... hostile and insulting... [we need] to correct the record because [of] you and... [your] friends...

That's the perspective from National Review.

The contempt for the bad Wall Street Journal is returned. Here's Auletta from the New Yorker again, quoting Bartley on Norman Pearlstine, the head of the good Wall Street Journal:

When I asked Robert Bartley, the Journal’s former editorial-page editor, to describe Pearlstine’s legacy, Bartley... carved up his former colleague.... “[C]irculation was down. Advertising was down.... [R]eporters won prizes for writing books beating up on our subscribers and advertisers.... Norm’s a very creative guy--the three-section newspaper was his.... I don’t think he’s good at sustained effort”...

Bartley's criticism of Pearlstine's Wall Street Journal, in a nutshell, is that Pearlstine had forgotten what he was paid to do: Pearlstine thought he was paid to report the news and inform the subscribers, but in Bartley's view that was wrong--what Pearlstine was paid to do was to deliver eyeballs to advertisers by printing stuff that made subscribers and advertisers feel good and righteous.

Dr. Jekyll, meet Mr. Hyde.

Some Journal insiders--even some on the news side--say that this Jekyll-and-Hyde relationship is all to the advantage of the good Dr. Jekyll. Nobody serious believes the editorial page, they say; it serves as a comics page for the older and more-wingnutty subscribers, a source of daily comfort food for those who still denounce, "that Communist, Franklin Roosevelt," and who have always thought that the depth and duration of the Great Depression were the fault of the New Deal--that if the free-marekt tidal wave of falling wages and massive bankruptcies had been allowed to purge the economy for 1933 and 1934, by 1935 and 1936 all would have been well. But, this faction says, the editorial page delivers up perhaps half a million extra subscribers a year, and that money flow pays for the finest news-reporting operation in the world.

Other Journal insiders say that it is the bad Mr. Hyde that is sucking the blood of Dr. Jekyll. Nobody would pay attention to the wingnuts of the editorial page, they say, were it not for the fact that they come at the back of a very, very good newspaper. 50,000 people a month read the American Spectator, where Bartley's crew belongs. 1,000,000 people a day at least glance at the Wall Street Journal editorial page. The reporters in the news division are thus in a morally ambiguous position as journalists: the stories they write inform the public, and the public they attract then turns to page A16--and is there misinformed.

We outsiders speculate and argue about which of these perspectives is closer to the truth. We do not know. But we do know that this is the shape of the organization that Murdoch wants to capture.

Now Rupert Murdoch of the News Corporation has pulled a chair up to this poker table, and wants to buy the Wall Street Journal. Figure that he can sell off other parts of Dow Jones, Inc. for enough money that the long-term net investment by News Corp. will be on the order of $2 billion. Why might Murdoch want to spend so much money to do such a thing?

One possibility is that Rupert Murdoch likes to keep what he has and that he has sons: the thirty-something Lachlan and James (and a daughter, Elizabeth). His sons will already be rich beyond the wildest dreams of avarice. Giving his sons roles at News Corp. has proven difficult: he still wants to run the show, and people whom he has hired and had long-term relationships with want to go around him if they don't like what his sons are doing. But there is nobody at the Journal with strong personal ties to Murchoch. If Murdoch buys the Wall Street Journal and spins it off, then at least one of his sons can become an independent global power broker in his own right without Murdoch having to loosen the reins at News Corp. It's like a medieval German emperor creating his son Duke of Swabia: it's a real job, an important job, a very powerful job, and a job that keeps the son occupied without forcing the father to begin the surrender of his own power before he is ready. That might be what is going on. But if it is Murdoch is playing his cards very close to his vest.

A second possibility is that Rupert Murdoch thinks that in the age of new-media convergence the Wall Street Journal has the brand and the authority and the staff to make it an excellent launching pad, worth a $2 billion bet. Can Murdoch synergize the Journal's brand on TV and via new media in a way to further boost his fortune? Perhaps. Many fortunes will be made in financial news when the technological shift that has replaced the Mergenthaler and wood pulp with the microchip and the fiber-optic cable finally shakes itself out. Why, Murdoch may be asking himself, should the biggest fortune be made by Michael Bloomberg and not by him? That might be what is going on. But if it were, and if Murdoch had a real chance at the synergies, there would be other bidders by now.

A third possibility--by far the most likely, IMHO--is that Rupert Murdoch is one of the boys who just wanna have fun. It would be more fun shaping the opinions of the world through both News Corp.'s current properties and the world's preeminent global financial newspaper than through just News Corp.'s current properties alone--plus it would be more fun receiving the bowing and scraping that the world's powerful would engage in to placate the owner of News Corp. plus the Wall Street Journal than just the bowing and scraping that accrues to the owner of News Corp. alone. That is probably what is going on.

Which of these three possibilities is truest has implications for what is likely to happen to a Journal under Murdoch ownership, and whether the Murdoch purchase is a good thing.

If the first possibility is true--if the best analogy to what is going on is that this is the equivalent of a medieval German emperor creating a son Duke of Swabia--then it is surely good news for the world. A relatively young, energetic proprietor with deep knowledge of the news business--and Murdoch's children fit that bill--would in all likelihood be as good a steward of the excellent social asset that is the Wall Street Journal's news section. And it can't be bad for the editorial pages. Whatever happens to them has to be an improvement.

If the second possibility is true--that Murdoch wants to keep the Journal's strengths as he uses the brand as a new-media synergy launching pad--then the Murdoch purchase is probably good news for the world. Murdoch will then leave the news pages--the Journal's major strength--intact. And although Murdoch is as right-wing as Bartley and company, there is a key difference: Murdoch can be bought, or at least rented. A Journal editorial page run by Murdoch might well wind up supporting a Tony Blair or a Hillary Rodham Clinton: it would be wignutty when that was in Murdoch's interest; sane right-wing when that was in Murdoch's interest; centrist when that was in Murdoch's interest. A Journal editorial page run by the current regime would be wingnutty 24/7, as it is today. Neither would be a source of news or information--both would bear a completely random relationship to the truth--but the Murdoch version would be less destructive.

But by far the most likely is the third possibility. And if the third possibility is true, then Murdoch's purchase is probably bad news. It is true that the Wall Street Journal's editorial page will improve, as its positions are aligned less with winguttery and more with the interests of whoever has rented Murdoch for that particular afternoon. But the news pages will deteriorate. Murdoch will tell China's State Council and other political interests with whom he seeks to deal that the situation is delicate, that he cannot interfere openly with the news process, that it will take time, and so forth, but that if they make it worth his while he will do what he can do--and in the long run if they give him rope they will not be disappointed. Murdoch will tell his employees on the Journal news desks that he is under enormous pressure, that he understands the importance and delicacy of the situation, that it will take time, and so forth, but that they need to be patient and give him rope and they will not be disappointed. In reality, Murdoch will use the rope they give him to hang one or both of these groups--but which we will not discover for a while: Murdoch is a professional at this, after all.

So: as the Murdoch acquisition of the Journal moves forward, watch carefully. If Murdoch's children wind up being the effective proprietors of an organization run separately from News Corp., be happy. If Murdoch spends his time and energy leveraging the brand in new media space, reshaping things into the editorial pages to please his political contacts, and leaving the news pages alone to run themselves, then be happy.

But if Murdoch starts running the Journal the way he runs his other properties, be alarmed. Be very alarmed.

June 21, 2007

Mark Thoma Is Irate This Morning: Modelling the Social Value of Microsoft

Mark Thoma's ire is roused by Robert Barro, in the Wall Street Journal. Mark sends us to an article in which Barro attributes the entire consumer plus producer surplus of the personal computer industry to Bill Gates:

Economist's View: Robert Barro: Bill Gates' Charitable Vistas: Mr. Gates delivered a commencement address that focused... on his own personal philanthropy. His implicit theme was that so far what he has accomplished may have been good for him and Microsoft shareholders, but it has been no great contribution to society. He suggested that with a personal fortune of about $90 billion... it is time for him to give something back.

I find this perspective hard to understand.... Microsoft has been a boon for society and the value of its software greatly exceeds the likely value of Mr. Gates's philanthropic efforts. Here is a sketch of a simple model of Microsoft's social value....

In 2006, its revenue was $44 billion, with earnings of $13 billion. This money was generated by creating something consumers value.... [T]he social value... comes from the increase in productivity created when businesses and households use [Microsoft] software. The social benefit equals the value of the extra product, less the total paid for the software..... A conservative estimate... is that the social benefit of Microsoft's software is at least the $44 billion Microsoft pulls in each year... capitalized... a valuation of $970 billion.... Mr. Gates is creating a benefit to the rest of society of about one trillion dollars -- or more than 10 times his planned donations. And this counts only the likely future benefits, giving no weight to the past....

Mr. Gates's plan is ... to use the Bill and Melinda Gates Foundation to reduce world poverty, with an emphasis on advances in health. This is a noble goal. But it will likely just supplement the much larger existing programs... that have been carried out for many years by international organizations and governments... a checkered record. Although Mr. Gates is probably smarter and more motivated than the typical World Bank bureaucrat, he likely won't do much better....

[T]he key question for poverty alleviation is how to get Africa to grow like China and India... opening up to markets and capitalism.... [F]oreign aid had nothing to do with the successes [at reducing poverty] and did not prevent the African tragedy.... Perhaps the Gates Foundation will run more efficient aid programs than we've seen in the past, but I wonder.... [Gates] is kidding himself if he believes that the efforts of the Gates Foundation are likely to provide society anything like the past and future accomplishments of Microsoft...

The problem, of course, is that although Barro's model is a simple model, it is the wrong model.

In the absence of Microsoft, people would not sit in front of dark screens and do all calculations and sorts by hand. In the absence of Microsoft, its programmers would work for other computer companies--IBM, Sun, ATT, Digital Research, Apple, Go, et cetera. In the absence of Microsoft, its customers would buy operating systems and office suites from other computer companies as well. In the absence of Microsoft, production would in all likelihood be somewhat less efficient--in the absence of a single dominant software near-monopolist like Microsoft, more programmers would spend more time essentially duplicating one another's work as competitors went head-to-head with directly competing products. In the absence of Microsoft, margins would be lower because of lower market power--and so distribution would be somewhat more efficient. In the absence of Microsoft, invention and innovation in software might be faster (because a dominant, innovative monopolist can break the lockin effect created by obsolete standards) and might be slower (because a dominant, non-innovative monopolist that has a reputation for predatory pricing like Microsoft can create a "death zone" around it in which no profit-seeking firm dares innovate).

Whether the net social value of Bill Gates is positive or negative depends on his impact in creating and shaping Microsoft: relative to its competitors and to its alternative paths of development, did he make it more of a lockin-breaking innovator or a death zone-creating predator? Did he do more to make Microsoft a company that takes advantage o economies of scale or more to make Microsoft a company that raises profit margins? I'm on the side that thinks that Microsoft has been a considerable net plus. But others I respect see it is a net minus. And my judgment that the net social value of Bill Gates is large and positive is not because I attribute the total producer plus consumer surplus in the industry to him and him alone: I am not that naive, and not that slow-witted.

June 14, 2007

Tim Lee (Not Tim Berners-Lee!) on Software Patents

Matthew Yglesias sends us to:

A Patent Lie: Last month, the technology world was abuzz over an interview in Fortune magazine in which Bradford Smith, Microsoft’s general counsel, accused users and developers of various free software products of patent infringement and demanded royalties. Indeed, in recent years, Mr. Smith has argued that patents are essential to technological breakthroughs in software.

Microsoft sang a very different tune in 1991. In a memo to his senior executives, Bill Gates wrote, “If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today.” Mr. Gates worried that “some large company will patent some obvious thing” and use the patent to “take as much of our profits as they want.”

Mr. Gates wrote his 1991 memo shortly after the courts began allowing patents on software in the 1980s. At the time Microsoft was a growing company challenging entrenched incumbents like I.B.M. and Novell. It had only eight patents to its name. Recognizing the threat to his company, Mr. Gates initiated an aggressive patenting program. Today Microsoft holds more than 6,000 patents.

It’s not surprising that Microsoft — now an entrenched incumbent — has had a change of heart. But Mr. Gates was right in 1991: patents are bad for the software industry. Nothing illustrates that better than the conflict between Verizon and Vonage.... The Gates memo predicted that a large company would “patent some obvious thing,” and that’s exactly what Verizon has done. Two of its patents cover the concept of translating phone numbers into Internet addresses. It is virtually impossible to create a consumer-friendly Internet telephone product without doing that. So if Verizon prevails on appeal, it will probably be able to drive Vonage out of business. Consumers will suffer from fewer choices and higher prices, and future competitors will be reluctant to enter markets dominated by patents.

But don’t software companies need patent protection? In fact, companies, especially those that are focused on innovation, don’t: software is already protected by copyright law, and there’s no reason any industry needs both types of protection. The rules of copyright are simpler and protection is available to everyone at very low cost. In contrast, the patent system is cumbersome and expensive. Applying for patents and conducting patent searches can cost tens of thousands of dollars. That is not a huge burden for large companies like Microsoft, but it can be a serious burden for the small start-up firms that produce some of the most important software innovations.

Yet, as the Vonage case demonstrates, participating in the patent system is not optional. Independent invention is not a defense to patent infringement, and large software companies now hold so many patents that it is almost impossible to create useful software without infringing some of them. Therefore, the only means of self-defense is the one Mr. Gates identified 16 years ago: stockpile patents to use as bargaining chips in litigation. Vonage didn’t do that, and it’s now paying a very high price.

Only patent lawyers benefit from this kind of arms race. And Microsoft’s own history contradicts Mr. Smith’s claim that patents are essential for technological breakthroughs: Microsoft produced lots of innovative software before it received its first software patent in 1988. As more and more lawsuits rock the industry, we should ask if software patents are stifling innovation. Bill Gates certainly thought so in 1991, even if he won’t admit it today.

June 01, 2007

Historical Scholarship and the New Media UC Davis British and English History

Courtesy of Eric Rauchway and the U.C. Davis History Department:

Historical Scholarship and the New Media: A History Colloquium event sponsored by the UC Davis Department of History, the Institute of Governmental Affairs, and the Center for History, Society and Culture, with Brad DeLong, Scott Eric Kaufman, Tedra Osell, and Ari Kelman, held May 23, 2007, at 12:10 in the Andrews Room of the Social Sciences and Humanities Building.

Downloadable .mp4 podcast (82.2M, slightly over 50 minutes of video): http://history.ucdavis.edu/podd.php

May 18, 2007

The Web Ouroboros...

So there I was surfing along, reading:

The Net Ecology

and I was thinking, "this makes a lot of sense." And then I come across the line:

Bruce Sterling doesn't get it, but Brad DeLong does.

Ah. No wonder.

Here's how Jim ends his very nice piece, a superior quality anti-Bruce Sterling rant:

The end of scarcity?

Commerce and technology are creating a world of abundance. Is there a chance that somewhere along the way, we eliminate scarcity?

Nanotechnology might do for matter what the Internet has done for information. This world is coming, and it is a vastly different world. Bruce Sterling could have written about that, he is a science fiction writer after all. I'm just a businessman.

But here is my take: limits are a surprisingly resilient thing. The state of things on the margin tends to shape the rest of the landscape.The Internet seems like it makes information free, but it doesn't quite. Information won't be free because its creation has costs. At the root, these costs derive from the fact that the production of information takes time and effort, and time and effort are scarce. We can only do one thing at a time, and only so many things in a lifetime. There are opportunity costs, and so there will have to be priorities, choices, things foregone. That means, I will bet, that there will be commerce.

Nano-tech won't make material things free either. Scarcity will find new corners to pop out of. There is a finite supply of matter with which it make things out of, a finite supply of energy. There is friction, entropy.

But what wonderful limits to come up against! How much richer we will be by the time we face these issues as pressing problems and not interesting concepts for speculation. I'd give my right arm to live to see those problems solved (why not? by then it will be trivial to get me a new one). And even if they are not solved -- even if limits and asymptotes and life-on-the-margin all prevail -- well, what of it?

It won't be so bad to have to meet in the marketplace every once in a while.

May 15, 2007

Charlie Stross: Tomorrow's Future Today!

A science fiction writer as technological forecaster. I think his clients got much more than their money's worth. Whether they know what to do with it is another matter:

Charlie's Diary: Shaping the future: Good afternoon, and thank you for inviting me here today. I understand that you're expecting a talk about where the next 20 years are taking us, how far technology will go, how people will use the net, and whether big shoulder pads and food pills will be fashionable. Personally, I'm still waiting for my personal jet car — I've been waiting about fifty years now — and I mention this as a note of caution: while personal jet cars aren't obviously impossible, their non-appearance should give us some insights into how attempts to predict the future go wrong.

I'm a science fiction writer by trade, and people often think that means I spend a lot of time trying to predict possible futures. Actually, that's not the job of the SF writer at all — we're not professional futurologists, and we probably get things wrong as often as anybody else. But because we're not tied to a specific technical field we are at least supposed to keep our eyes open for surprises....

The big surprise in the 20th century — remember that personal jet car? — was the redefinition of progress that took place some time between 1950 and 1970. Before 1800, human beings didn't travel faster than a horse could gallop. The experience of travel was that it was unpleasant, slow, and usually involved a lot of exercise.... Then something odd happened; a constant that had held for all of human history — the upper limit on travel speed — turned into a variable. By 1980, the upper limit on travel speed had risen (for some lucky people on some routes) to just over Mach Two, and to just under Mach One on many other shorter routes. But from 1970 onwards, the change in the rate at which human beings travel ceased — to all intents and purposes, we aren't any faster today than we were when the Comet and Boeing 707 airliners first flew. We can plot this increase in travel speed on a graph — better still, plot the increase in maximum possible speed — and it looks quite pretty; it's a classic sigmoid curve, initially rising slowly, then with the rate of change peaking between 1920 and 1950, before tapering off again after 1970....

One side-effect of faster travel was that people traveled more. A brief google told me that in 1900, the average American traveled 210 miles per year by steam-traction railroad, and 130 miles by electric railways. Today, comparable travel figures are 16,000 miles by road and air — a fifty-fold increase in distance traveled.... We probably don't spend significantly more hours per year aboard aircraft that our 1900-period ancestors spent aboard steam trains, but at twenty times the velocity — or more — we travel much further and consume energy faster while we're doing so.

Around 1950, everyone tended to look at what the future held in terms of improvements in transportation speed. But as we know now, that wasn't where the big improvements were going to come from. The automation of information systems just weren't on the map, other than in the crudest sense — punched card sorting and collating machines and desktop calculators.

We can plot a graph of computing power against time that, prior to 1900, looks remarkably similar to the graph of maximum speed against time. Basically it's a flat line from prehistory up to the invention, in the seventeenth or eighteenth century, of the first mechanical calculating machines. It gradually rises as mechanical calculators become more sophisticated, then in the late 1930s and 1940s it starts to rise steeply. From 1960 onwards, with the transition to solid state digital electronics, it's been necessary to switch to a logarithmic scale to even keep sight of this graph. It's worth noting that the complexity of the problems we can solve with computers has not risen as rapidly as their performance would suggest to a naive bystander. This is largely because interesting problems tend to be complex, and computational complexity rarely scales linearly with the number of inputs; we haven't seen the same breakthroughs in the theory of algorithmics that we've seen in the engineering practicalities of building incrementally faster machines....

We know that Moore's Law has some way to run.... However, it looks unlikely that we'll ever be able to build circuits where the component count exceeds the number of component atoms, so I'm going to draw a line in the sand and suggest that this exponential increase in component count isn't going to go on forever.... The cultural picture in computing today therefore looks much as it did in transportation technology in the 1930s — everything tomorrow is going to be wildly faster than it is today, let alone yesterday. And this progress has been running for long enough that it's seeped into the public consciousness.... All of this is irrelevant. Because computers and microprocessors aren't the future. They're yesterday's future, and tomorrow will be about something else.

I don't expect I need to lecture you about bandwidth.... Improvements in bandwidth are something we get from improvements in travel speed or information processing; you should never underestimate the bandwidth of a pickup truck full of magnetic tapes.... Now, with little or no bandwidth, when it was expensive and scarce and modems were boxes the size of filing cabinets that could pump out a few hundred bits per second, computers weren't that interesting; they tended to be big, centralized sorting machines.... With lots of bandwidth, the picture is very different... a world where there are nearly as many mobile phones in the EU as there are people, where each mobile phone is a small computer, and where the fast 3G, UMTS phones are moving up to a megabit or so of data per second over the air — and the next-generation 4G standards are looking to move 100 mbps of data. So that's where we are now. And this picture differs from the past in a very interesting way: because lots of people are interacting with them.... It's like the difference between having an experimental test plane that can fly at 1000 km/h, and having thousands of Boeings and Airbuses that can fly at 1000 km/h and are used by millions of people every month. There will be social consequences, and you can't easily predict the consequences of the mass uptake of a technology by observing the leading-edge consequences when it first arrives.

It typically takes at least a generation before the social impact of a ubiquitous new technology becomes obvious. We are currently aware of the consequences of the switch to personal high-speed transportation — the car — and road freight distribution. It shapes our cities and towns, dictates where we live and work, and turns out to have disadvantages our ancestors were not aware of, from particulate air pollution to suburban sprawl and the decay of city centers in some countries. We tend to be less aware of the social consequences.... It is no longer rare to live a long way from relatives, workplaces, and educational institutions. Countries look much more homogeneous... because community has become delocalized from geography.... This is the effect of cheap, convenient high speed transport.

Now, we're still in the early stages of the uptake of mobile telephony, but some lessons are already becoming clear.... Mobile phones in contrast connect people, not places.... This has interesting social effects. Sometimes it's benign; you never have to wonder if someone you're meeting is lost or unable to find the venue, you never lose track of people. On the other hand, it has bad effects... bullying via mobile phone is rife in British schools.... It's even harder to predict the second-order consequences of new technologies when they start merging at the edges, and hybridizing. A modern cellphone is nothing like a late-1980s cellphone....

Putting it all together: Let's look at our notional end-point where the bandwidth and information processing revolutions are taking us — as far ahead as we can see... about 25-50 years away. Firstly, storage. I like to look at the trailing edge; how much non-volatile solid-state storage can you buy for, say, ten euros?... Today, I can pick up about 1Gb of FLASH memory in a postage stamp sized card for that much money. fast-forward a decade and that'll be 100Gb. Two decades and we'll be up to 10Tb.

10Tb is an interesting number. That's a megabit for every second in a year... enough to store a live DivX video stream... of everything I look at for a year.... It's a life log; replay it and you've got a journal file for my life.... Why would anyone want to do this?... Initially, it'll be edge cases. Police officers on duty: it'd be great to record everything they see, as evidence. Folks with early stage neurodegenerative conditions like Alzheimers: with voice tagging and some sophisticated searching, it's a memory prosthesis. Add optical character recognition on the fly for any text you look at, speech-to-text for anything you say, and it's all indexed and searchable. "What was the title of the book I looked at and wanted to remember last Thursday at 3pm?" Think of it as google for real life.

We may even end up being required to do this, by our employers or insurers.... (There are also a whole bunch of very nasty drawbacks to this technology — I'll talk about some of them later, but right now I'd just like to note that it would fundamentally change our understanding of privacy, redefine the boundary between memory and public record, and be subject to new and excitingly unpleasant forms of abuse....)

Now, this might seem as if it's generating mountains of data — but really, it isn't. There are roughly 80 million people in Germany. Let's assume they all have lifelogs. They're generating something like 10Tb of data each, 10^13 bits, per year, or 10^21 bits for the entire nation every year. 10^23 bits per century.... My model of a long term high volume data storage medium is a synthetic diamond. Carbon occurs in a variety of isotopes, and the commonest stable ones are carbon-12 and carbon-13, occurring in roughly equal abundance... a device that will create a diamond, one layer at a time, atom by atom, by stacking individual atoms — and with enough discrimination to stack carbon-12 and carbon-13, we've got a tool for writing memory diamond. Memory diamond is quite simple: at any given position in the rigid carbon lattice, a carbon-12 followed by a carbon-13 means zero, and a carbon-13 followed by a carbon-12 means one.... Sixty kilograms can store a lifelog for the entire human species for a century.... The Google cluster, as of mid-2006, was estimated to have 4 petabytes of RAM. In memory diamond, you'd need a microscope to see it. So, it's reasonable to conclude that we're not going to run out of storage any time soon.

Now, capturing the data, indexing and searching the storage, and identifying relevance — that's another matter entirely, and it's going to be one that imprint the shape of our current century on those ahead, much as the great 19th century infrastructure projects (that gave our cities paved roads and sewers and railways) define that era for us. I'd like to suggest that really fine-grained distributed processing is going to help; small processors embedded with every few hundred terabytes of storage. You want to know something, you broadcast a query: the local processors handle the problem of searching their respective chunks of the 128-bit address space, and when one of them finds something, it reports back. But this is actually boring. It's an implementation detail. What I'd like to look at is the effect this sort of project is going to have on human civilization....

[W]e're going to end up with — at the least — lifelogs, ubiquitous positioning and communication services, a civilization where every artifact more complicated than a spoon is on the internet and attentive to our moods and desires, cars that drive themselves, and a whole lot of other mind-bending consequences. All within the next two or three decades. So what can we expect of this collision between transportation, information processing, and bandwidth?

We're already living in a future nobody anticipated. We don't have personal jet cars, but we have ridiculously cheap intercontinental airline travel.... [W]e do, in fact, require more than four computers for the entire planet.... An increasing number of people don't have telephone lines any more — they rely on a radio network instead.... Hands up, anyone in the audience, who owns a slide rule? Or a set of trigonometric tables? Who's actually used them, for work, in the past year? Or decade?... [T]he pocket calculator and the computer algebra program have effectively driven those tools into obsolescence. This happened some time between the early 1970s and the late 1980s. Now we're about to see a whole bunch of similar and much weirder types of obsolescence....

[W]e'll be raising a generation of kids who don't know what it is to be lost, to not know where you are and how to get to some desired destination from wherever that is. Think about that. "Being lost" has been part of the human experience ever since our hominid ancestors were knuckle-walking around the plains of Africa. And we're going to lose it — at least, we're going to make it as unusual an experience as finding yourself out in public without your underpants. We're also in some danger of losing the concept of privacy.... [W]e're already seeing some interesting tendencies in the area of attitudes to privacy on the internet among young people, under about 25; if they've grown up with the internet they have no expectation of being able to conceal information about themselves. They seem to work on the assumption that anything that is known about them will turn up on the net sooner or later, at which point it is trivially searchable....

It'd be nice to tie your lifelog into your blog and the rest of your net presence, for your personal convenience. And at first, it'll just be the kids who do this.... Well, it'll be the kids and the folks on the Sex Offenders Register who're forced to lifelog as part of their probation terms.... Okay, it'll also be people in businesses with directors who want to exercise total control over what their employees are doing, but they don't have to work there ... yet.... The political hazards of lifelogging are, or should be, semi-obvious.... If you dig hard enough, everyone is a criminal....

And then there's history.... Barring a catastrophic universal collapse of human civilization — which I should note was widely predicted from August 1945 onward, and hasn't happened yet — we're going to be laying down memories in diamond that will outlast our bones, and our civilizations, and our languages. Sixty kilograms will handily sum up the total history of the human species, up to the year 2000. From then on... we still don't need much storage, in bulk or mass terms. There's no reason not to massively replicate it and ensure that it survives into the deep future.... [W]e're going to give future historians a chance to build an annotated, comprehensive history of the entire human race. Charting the relationships and interactions between everyone who's ever lived since the dawn of history — or at least, the dawn of the new kind of history that is about to be born this century.... I expect to live long enough to be lifelogging, but my first forty or fifty years are going to be very poorly documented, mere gigabytes of text and audio to document decades of experience. What I can be fairly sure of is that our descendants' relationship with their history is going to be very different from our own, because they will be able to see it with a level of depth and clarity that nobody has ever experienced before.

Meet your descendants. They don't know what it's like to be involuntarily lost, don't understand what we mean by the word "privacy", and will have access (sooner or later) to a historical representation of our species that defies understanding. They live in a world where history has a sharply-drawn start line, and everything they individually do or say will sooner or later be visible to everyone who comes after them, forever. They are incredibly alien to us. And, yet, these trends are emergent from the current direction of the telecommunications industry, and are likely to become visible as major cultural changes within the next ten to thirty years.

None of them require anything but a linear progression from where we are now, in a direction we're already going in. None of them take into account external technological synergies, stuff that's not obviously predictable like brain/computer interfaces, artificial intelligences, or magic wands. I've purposefully ignored discussion of nanotechnology, tissue engineering, stem cells, genomics, proteomics, the future of nuclear power, the future of environmentalism and religion, demographics, our environment, peak oil and our future energy economy, space exploration, and a host of other topics.

As projections of a near future go, the one I've presented in this talk is pretty poor. In my defense, I'd like to say that the only thing I can be sure of is that I'm probably wrong, or at least missing something as big as the internet, or antibiotics.

(I know: driverless cars. They're going to redefine our whole concept of personal autonomy. Once autonomous vehicle technology becomes sufficiently reliable, it's fairly likely that human drivers will be forbidden, except under very limited conditions. After all, human drivers are the cause of about 90% of traffic accidents: recent research shows that in about 80% of vehicle collisions the driver was distracted in the 3 seconds leading up to the incident. There's an inescapable logic to taking the most common point of failure out of the control loop — my freedom to drive should not come at the risk of life and limb to other road users, after all. But because cars have until now been marketed to us by appealing to our personal autonomy, there are going to be big social changes when we switch over to driverless vehicles.

(Once all on-road cars are driverless, the current restrictions on driving age and status of intoxication will cease to make sense. Why require a human driver to take an eight year old to school, when the eight year old can travel by themselves? Why not let drunks go home, if they're not controlling the vehicle? So the rules over who can direct a car will change. And shortly thereafter, the whole point of owning your own car — that you can drive it yourself, wherever you want — is going to be subtly undermined by the redefinition of car from an expression of independence to a glorified taxi. If I was malicious, I'd suggest that the move to autonomous vehicles will kill the personal automobile market; but instead I'll assume that people will still want to own their own four-wheeled living room, even though their relationship with it will change fundamentally. But I digress ...)

Anyway, this is the future that some of you are building. It's not the future you thought you were building, any more than the rocket designers of the 1940s would have recognized a future in which GPS-equipped hobbyists go geocaching at weekends. But it's a future that's taking shape right now, and I'd like to urge you to think hard about what kind of future you'd like your descendants — or yourselves — to live in. Engineers and programmers are the often-anonymous architects of society, and what you do now could make a huge difference to the lives of millions, even billions, of people in decades to come...

May 10, 2007

What Does Rupert Murdoch Think that He Is Doing?

Felix Salmon thinks that Rupert Murdoch is crazy like a fox--like Fox News, that is. Salmon contends that Rupert Murdoch must intend to grow and enlarge rather than cut back the Wall Street Journal:

Finance Blog - Market Movers by Felix Salmon: In Defense of Rupert Murdoch - Portfolio.com: over at Salon, Gary Weiss has an anti-Murdoch screed which seems borderline unhinged, but is worth reading to try and understand what Rupert is up against. His main problem seems to be with cutbacks:

If and when Murdoch gets Dow Jones he is going to make money on it, and that will require drastic cutbacks -- entire "inefficient" divisions shuttered, employees thrown into the streets. Employee union negotiators, who had thought current management was hardheaded, are likely to look back on the pre-Murdoch days with nostalgia. "He's paying 40 to 50 times earnings, and he is going to get a return on that. He is going to crank down on costs," said one longtime Dow Jones journo who knows his way around a balance sheet.

This simply doesn't make sense. No one has ever paid 45 times earnings for a company and then got a healthy return by cutting costs. That kind of multiple can be justified only by future growth – and Murdoch has made it very clear that he wants to invest in the Wall Street Journal and turn it into a strong international brand. Cutting back is what current management has tried, with zero success. Weiss sees Murdoch not as the lifelong newspaperman he is, but rather as someone who sees the Journal as a wasting asset:

[James] Cramer nailed down the shareholder value view of the newspaper biz a few weeks ago, when he said, "These are diminishing assets. They don't need to exist. Younger people rarely read them."... Remember that newspapers don't need to exist from an investor standpoint... My Dow Jones journo friend recognizes the inevitable: Newspapers, he says, are in a "contracting industry, and in a contracting industry you want a rat bastard who will restructure the costs." That is likely to mean integrating the company's far-flung operations with the rest of the News Corp. empire. Or it could mean "restructuring" in the traditional Rust Belt slash-and-burn sense of the word.

Have Dow Jones journalists really been so beaten down by mismanagement and underinvestment that they can't recognize an optimist when they see one? Murdoch understands that in a world with an increasing appetite for financial information, the Wall Street Journal could be one of the strongest brands in the media universe, and hugely valuable for it. But Dow Jones management – and, it would seem, some of its employees, too – are so caught up in diminishing profitability that they can't even understand that vision when it's spelled out to them...

It seems pretty clear to me that Murdoch would like to take the Wall Street Journal as a brand and expand it--new-media-ize it (and, perhaps, old-media-ize it through broadcast and cable TV as well). But it seems very likely to me that that is perfectly consistent with cutting back large parts of the current journal--cutting back the news reporters who write the long articles that bore Rupert Murdoch, and expanding the red-meat-to-those-who-hate-that-communist-Roosevelt audience. Worldwide the next generation is going to see a lot of rich people who will be willing to pay to be told that they deserve their money and that anybody who wants to tax or regulate them is an enemy of human freedom. And, as Murdoch has said before, that is a market opportunity--the opportunity he has tried to seize with Fox news, and may well try to seize further with a more propagandistic and less reality-based Wall Street Journal.

Can Murdoch make the financials work to make the Journal a good way for News Corp. to spend $6 billion? I doubt it. Can he find enough synergies to make the financials not be a total disaster? I think so. And in the meantime will it give him a platform on which he can play global statesman for a decade? Yes.

May 09, 2007

Dani Rodrik Has a Weblog

Dani Rodrik has a weblog: http://rodrik.typepad.com/

April 08, 2007

Hoisted from the Archives: Information Technology and the Future of Society: My CITRIS Kickoff Speech

My CITRIS kickoff speech: Information Technology and the Future of Society (Hoisted from the Archives)

Information Technology and the Future of Society: For perhaps 9000 years after the beginnings of agriculture the overwhelming proportion of human work lives were spent making things: growing crops, shearing sheep, spinning yarn, weaving cloth, throwing pots, cutting down trees, copying books, and so on, and so forth. Technology did improve enormously over those 9000 years: contrast the clothes-making technology at the disposal of Henry VIII of England with that of Rameses II of Egypt three thousand years before; contrast the triple-crop paddy-irrigated rice- and water-control-based agriculture of the Yangtze Delta in eighteenth-century China with the scratch-the-soil-with-a-hoe agriculture of two thousand years before. But as Thomas Robert Malthus first wrote in the 1790s, rising populations had put enough pressure on scarce natural resources to offset the benefits of better technology and keep living standards nearly constant for the people if not for the elite: American President Thomas Jefferson in 1803 A.D. certainly enjoyed a higher standard of living than Roman Consul Marcus Tullius Cicero in 63 B.C. But did Jefferson's slaves enjoy a higher standard of living than Cicero's? A large amount of archeological evidence has not yet found significant differences.

For the past two hundred and fifty years, since the start of the Industrial Revolution, the productivity of those workers who make things has exploded. Hand-spinners in the eighteenth century took 50,000 hours--20 full work-years--to spin 100 lbs of cotton into thread (Freeman and Louca (2001), and spinning of one sort or another took up perhaps 5% of total labor-time. Today it takes 40 work hours to spin 100 lbs. of cotton: a more than thousand-fold amplification of productivity in this one task.

As our productivity at growing crops and making things has exploded, demand for the things we make has grown too, but not fast enough to keep the crop-growing, food-cooking, mineral-extracting, clothes-making, box-carrying, and other goods-producing share of our economy's labor force from falling. Today those who in any earlier age would be classified as "production workers"--and would have been the overwhelming majority of the labor force--are perhaps 20% of our economy, and the bulk of them are better characterized as machine-watchers and machine-fixers. According to Stanford's Robert Hall, as early as 1980 there were twice as many salesmen in Ford-selling auto dealerships as there were assembly-line workers employed by Ford Motor Company.

So what are the rest of us--the other 80%--doing? In a sense, we all--from U.C. professors to chief technical officers to xerox operators, Ford Salesmen, cashiers, and parking-lot attendants--are and have long been information workers: people whose jobs are, if we examine them closely, largely concerned with determining what exactly the goods-producing sectors should make, how it should be made, where it should go, and to whom it should be distributed--and that is leaving aside the large chunk of our economy that is symbolic communication as an end in itself.

Today we see--not yet sharply, not yet clearly, but no longer dimly--the prospect that the ongoing technological revolutions in data processing and data communications will do for the "information" sectors of the economy something like what the Industrial Revolution did for goods-producing sectors like cotton spinning. As Steve Cohen over in the City Planning department here likes to say, you are now building the equivalent of the industrial-age tools for shaping and handling matter, but you are building tools for thought (Cohen, DeLong, and Zysman (2001)). And if we can figure out how to make these tools for thought fulfill their promise, they should produce a quantum jump in our technological power, economic productivity, and--we hope--quality of life of as many energy levels as the jump of the Industrial Revolution itself.

But there are major problems of social engineering and organizational design that stand in our way. A century or so ago, at the height of the Industrial Revolution, the market economy turned out to have an extraordinarily good fit with the developing industrial technologies of goods-making. It provided a framework of social organization that was extraordinarily effective in providing people with incentives to carry on activities that generated rapid technological development, capital accumulation, and economic growth.

An effective form of social organization faces decision makers with incentives that mirror the impacts of their actions on society as a whole. Because the goods produced by industrial technologies were rival--that is, could only be of use to one person at one time--each person's use of such a good diminished the supply available to the rest of society. Thus it made sense from the viewpoint of efficient distribution to require that users pay a price--diminish their ability to acquire and use other resources--for commodities. And those prices paid then gave producing organizations the resources to carry on and expand their activities. Because the goods produced were excludable--that is, it was by-and-large straightforward to limit control over use to those authorized--it was easy and straightforward to push decision-making outward from the clueless bureaucratic center to the periphery where people on the ground might actually have a good sense of the situation, and of what should be done.

These three advantages--earmarking additional resources for successful and efficient production organizations, providing users with incentives for economically-efficient distribution, and decentralization of decision-making to where the knowledge was likely to be--were delivered by accident by the trade-and-market economic structure of Adam Smith.

But now as we try to realize the technological promise of information technologies, the old forms of economic organization no longer have a natural fit with the requirements of technological development and economic growth. Once an "information good" has been produced, sharing it with another person doesn't reduce the rest of society's resources and opportunities. So there is no efficient-distribution reason to charge a price for it. But where then does the flow of signals to assess which production organizations are efficient come from? In an earlier age we would be more inclined to rely on government funding, but these days we have a keen awareness of the advantages in applied development at least of semi-Darwinian competitive mechanisms, where investigators are responsible to investors seeking profits and not to committees seeking whatever committees seek.

Moreover, it is only with difficulty that information goods are excludable. But if their use can't be restricted to authorized users, then the entire market-as-a-social-calculating-and-signalling mechanism simply breaks down. Unfortunately, attempts to make information goods "excludable" by various forms of use protection waste valuable time and energy: I shudder at the memory of having spent two hours on hold during three phone calls, and having spent another two hours of my time rebooting and reading installation error messages the last time I tried to upgrade one of the Adobe programs--GoLive--on this laptop. I doubt I'll ever be able to face the prospect of buying another Adobe program again.

Two things, however, are clear. First, caught between "government failures" in applied research and the ever-larger "market failures" that will be created as the characteristics of information-age goods clash with the requirements for market efficiency, intermediate forms of organization--like large publicly-funded research universities--need to play an even larger role in research and development in the future than they have in the past. Projects like CITRIS promise the benefits of government research--the wide distribution of knowledge and the acceleration of cumulative research--and the benefits of private entrepreneurship--the willingness to take risks and investigate large numbers of potential development projects rather than just those that have won the stamp of approval of a single central committee. It is the task of chancellors and deans, of course, to make sure that projects like CITRIS don't wind up producing the drawbacks of both forms of organization: the strangulation by bureaucratic red-tape and committee infighting of government, combined with the restrictions on the distribution of information and the use of products that make a large share of private-sector development work duplicative of what has already been done.

Second, realizing the promise of the Societal-Scale Information Systems that are the Holy Grails of this quest will turn out to be a problem of social engineering as well as computer science. I have long wondered just why it was that the first half of the 1980s were the era of the IBM PC rather than of the DEC VAX--when the hardware cost of a VAX was, as best as I can guess, no more than 1/5 that of the equivalent number of 8086 machines, and when thanks largely to Berkeley UNIX there was no comparison at all in software. The answer lies somewhere in social engineering--that somehow paying out five times as much for inferior software was worth not having to wrestle with established MIS bureaucracies. But what the answer is I am not sure.

So let me turn this into a sales pitch for the social scientists at Berkeley interested in information technology--from Manuel Castells in sociology to Pam Samuelson and Mark Lemley at the law school to John Zysman and Steve Weber in political science to Hal Varian and his simians to Suzanne Scotchmer at public policy to the industrial organization and antitrust barons of the business school and the economics department--Glenn Woroch, Rich Gilbert, Dan Rubinfeld, Mike Katz, Carl Shapiro--and a host of others. I do not know of a place with a more vibrant and smarter community of scholars interested in the social engineering aspects of information technology.

And I do not know of a better place than this to assemble the resources to build the Societal-Scale Information Systems that can make information technologies realize their promise.

Potential Reasons for Worrying About Outsourcing/Offshoring

Alan Blinder is very worried about outsourcing and offshoring http://delong.typepad.com/sdj/2007/03/alan_blinder_on.html. And I am not quite sure why.

You see, trade balances. What we buy equals what we sell, in value. What we buy and what we sell can be goods, services, or property, but it balances. If we have a comparative advantage in nothing--and export nothing--then we necessarily have a comparative disadvantage in nothing--and import nothing. Trade is thus an opportunity for us to move workers out of occupations where we are least and into occupations where we are most productive.

This doesn't mean we shouldn't worry about trade. But it does mean that the right reasons to worry about trade are relatively specific and relatively small in number.

I see four reasons:

  • First, we can worry about trade because we can worry about what trade does to our income distribution: perhaps we would be happier with our income distribution and assess ourselves as having a higher level of social welfare if we made some of the things we import at home and didn't make some of the things we export--even though each of our imports and exports makes narrow profit-and-loss getting-and-spending sense.
  • Second, we can worry about trade because we worry about what trade does to external benefits from productive activity that boost growth: perhaps we would grow faster and become richer if we made some of the things we import at home and didn't make some of the things we export--because making some things produces increased worker skills and technological knowledge through unpriced, un-accounted for channels.
  • Third, we can worry about trade to the extent that it amplifies the ability of our dysfunctional government to dysfunction: the ability to borrow from abroad to cover deficits may diminish the pressure on feckless politicians and their supporters to deal responsibly with fiscal policy.
  • Fourth, we can agree that increased trade is good for the nation, yet believe that government has to play an active and aggressive role in providing social insurance and a measure of compensation to those ground exceedingly fine by the mills of globalization--and outsourcing/offshoring are likely to cause bigger changes and more disruption than anything we have seen to date.

It is not clear which of these reasons is behind Alan Blinder's current worries on outsourcing and offshoring. My worries about outsourcing are mostly (4). I worry somewhat about (2). But (1) and (3) are, I think, not on the agenda. Global outsourcing seems to me at least as likely to improve as to worsen the distribution of income. And the marginal amount of governmental fecklessness produced by access to global capital markets seems to me to be small.

But I don't know what worries Alan most. I should ask him for clarification...

UPDATE: Alan writes: of course it's number 4!

March 20, 2007

What Does the Internet Think Is Worth Reading by Brad DeLong?

What does the global distributed hive-mind consciousness of the internet think is worth reading by and about Brad DeLong? Let me peek and see...

Top for "Brad DeLong" at Google Blogsearch:

Google Blog Search: Brad DeLong: http://delong.typepad.com/sdj/2007/02/special_super_j.html: Special Super Journamalism Barack-Atah-Adonai-Elohenu-Melech-Ha ...9 Feb 2007 by Brad DeLong: Friday at sundown is a fitting moment to take note of a particularly pathetic piece of Journamalism from Mike Allen at the Politico. You see, Mike Allen begins his trashing of Barack Obama. Understand: Mike Allen isn't doing the trashing--oh no no no. Mike Allen is just saying what the critics of Obama will say. Let's give Mike the mike, and watch him take his dive...

Top for "Brad DeLong" at Google News:

Brad DeLong - Google News : http://blog.risk.net/2007/03/speech_material.html Speech materialRisk.net (subscription), UK - Mar 8, 2007: Given the time [1924] he [John Maynard Keynes] wrote it [the Tract on Monetary Reform], that's understandable; as Brad DeLong explains, his concern was to argue against a return to the gold standard, abandoned during...

Top substantive result for "Brad DeLong" at Google:

Brad DeLong - Google Search: http://chronicle.com/free/v52/i47/47b00801.htm: The Chronicle: 7/28/2006: The Invisible College: J. Bradford DeLong is a professor of economics at the University of California at... His blog can be found at http://j-bradford-delong.net/movable_type...


The next ten substantive results from Google:

Time to Pound My Head Against the Wall Once Again: June 07, 2003: The Economist's Lexington correpondent devotes a full page to Hillary Rodham Clinton (with a time out for slams at Sidney Blumenthal for being a "brown-noser" and Paul Krugman for being "shrill")....

Read the column--it's a long column. Reflect upon several facts. First, almost all of the column is "inside political baseball" of little use to anyone who is not a serious political junkie. Second, "Lexington" doesn't like Hillary Rodham Clinton or Bill Clinton or Paul Krugman or Sid Blumenthal--but doesn't bother to say why. Third, there is nothing in the column to give the reader any information about whether Hillary Rodham Clinton would make a good president, or about whether "Lexington" thinks Hillary Rodham Clinton would make a good president.

Is there anything else that readers--most of whom are Americans, most of whom vote--more need to learn than whether Hillary Rodham Clinton would make a good president? No, there isn't. So why does "Lexington" spend so much time on insider political baseball and trying to settel scores? Why doesn't he do something useful with his space--like tell us whether he thinks Hillary Rodham Clinton would make a better president than George W. Bush (almost surely [Lexington must think]) or would make a good president (almost surely not [Lexington must think])?...

J. Bradford DeLong - Wikipedia, the free encyclopedia: J. Bradford DeLong (b. June 24, 1960, Boston) is a professor of economics at the University of California, Berkeley and a former Deputy Assistant Secretary of the U.S. Treasury in the Clinton Administration. He writes a popular blog, ([1]) Brad DeLong's Semi-Daily Journal, which covers political, technical, and economic issues as well as criticism of their coverage in the media. He is also the author of a textbook, Macroeconomics, the second edition of which he coauthored with Marty Olney. DeLong is an editor of ([2]) The Economists' Voice, and has in the past been co-editor of the widely-read Journal of Economic Perspectives. He is a research associate of the National Bureau of Economic Research and a visiting scholar at the Federal Reserve Bank of San Francisco.

As part of the Treasury Department in the Clinton administration, he worked on the 1993 budget, on the Uruguay Round of the General Agreement on Tariffs and Trade, on the North American Free Trade Agreement, on the unsuccessful health care reform effort, and on other policies. DeLong is both a liberal in the modern American political sense and a free trade neo-liberal. He is part of an increasingly influential group of center-left bloggers who include Kevin Drum (formerly "CalPundit") and Matt Yglesias of The American Prospect...

Brad DeLong's Website: Dogs vs. Cats, Treasury vs. State, Economists vs. Diplomats: February 28, 2005: Once again today I had my nose rubbed in a fact of life...

When economists talk about international trade and finance, they talk--first and most importantly--about building institutions to allow for mutually-beneficial acts of economic exchange. They talk about diminishing barriers and increasing confidence. They talk about playing positive-sum games with people in other countries that increase wealth, trust, and confidence and that ultimately align interests: the larger is the surplus from international trade and finance, the bigger is that stake that everyone has in continuing the free-trade-and-finance game.

When diplomats talk about international trade and finance, they talk about them as carrots and sticks: we give people we want to reward access to our markets; we punish people who we want to punish by slapping on trade embargos. "Economic diplomacy" is like bombing, only less so. And arguments that it is much more important to build large and profitable positive-sum games that align interests than to win zero- (or negative!) sum games that lead to the domination of one government's conception of its momentary interest over another's? They blow right past the diplomats, the State Department people as if they were just gentle breezes...

Torture and Rumors of Torture: June 10, 2004: Torture and rumors of torture. In my email inbox this morning...

If what it reports is true, then once again it looks like the Bush administration is worse than I had imagined--even though I thought I had taken account of the fact that the Bush administration is always worse than one imagines. Either Seymour Hersh is insane, or we have an administration that needs to be removed from office not later than the close of business today. The scariest part: "[Hersh] said he had seen all the Abu Ghraib pictures. He said, 'You haven't begun to see evil...' then trailed off. He said, 'horrible things done to children of women prisoners, as the cameras run.' He looked frightened." UPDATED: I failed to note that the taker of these notes is the excellent Rick Pearlstein, whose book about Goldwater is in my to-read pile...

A man who hated government | Salon News: Nov. 17, 2006: "Lord, enlighten thou our enemies," prayed 19th century British economist and moral philosopher John Stuart Mill in his "Essay on Coleridge." "Sharpen their wits, give acuteness to their perceptions, and consecutiveness and clearness to their reasoning powers. We are in danger from their folly, not from their wisdom: their weakness is what fills us with apprehension, not their strength."

For every left-of-center American economist in the second half of the 20th century, Milton Friedman (1912-2006), Nobel Prize winner, founder of the conservative "Chicago School" of economics and advisor to Republicans from Goldwater to Reagan, was the incarnate answer to John Stuart Mill's prayer. His wits were sharp, his perceptions acute, his arguments strong, his reasoning powers clear, coherent and terrifyingly quick. You tangled with him at your peril. And you left not necessarily convinced, but well aware of the weak points in your own argument...

The odds of economic meltdown | Salon.com : Aug. 3, 2006: Forecasting recessions is a fool's game. If there is enough solid economic information to make it appear highly likely that a recession is coming -- that production, employment and consumer demand will actually fall -- then it is highly likely that there already is a recession. Businesses are not stupid, and they don't have to wait for economists to tell them what they already know. By the time a gloomy forecast has been issued they've probably already noticed a drop in consumer demand and responded by firing workers and reducing production.

So: Never say that a recession is coming. Say only that a recession is here, or that there might be a recession on the way. Which, in fact, is what I'm saying today. As of the beginning of August 2006, a recession is not here, and I'm not going to violate my own rule by saying one is coming. But there is a good chance -- for the first time since 2003 -- that there might be a recession in progress six months from now...

Friedman completed Keynes: Nov. 29, 2006: The most famous and influential American economist of the past century died in November. Milton Friedman was not the most famous and influential economist in the world — that honour belongs to John Maynard Keynes. But Milton Friedman ran a close second.

From one perspective, Friedman was the star pupil of, successor to, and completer of Keynes’s work. Keynes, in his General Theory of Employment, Interest and Money, set out the framework that nearly all macroeconomists use today. That framework is based on spending and demand, the determinants of the components of spending, the liquidity-preference theory of short-run interest rates, and the requirement that government make strategic but powerful interventions in the economy to keep it on an even keel and avoid extremes of depression and manic excess. As Friedman said, “We are all Keynesians now.” But Keynes’s theory was incomplete: his was a theory of employment, interest, and money. It was not a theory of prices. To Keynes’s framework, Friedman added a theory of prices and inflation, based on the idea of the natural rate of unemployment and the limits of government policy in stabilising the economy around its long-run growth trend...

Nieman Watchdog > Ask This > Missing the story of structural change: May 21, 2004: Economics professor and blogger Brad DeLong says reporters aren’t getting to the bottom of the defining economic story of the past four years: a boom in the productive potential of the economy. First of a series.

Q. In what businesses are people working much harder than they did five years ago, and what’s making them work so much harder? Q. In what businesses are people working much smarter than they did five years ago, and what’s letting them work so much smarter? Q. In what businesses are productivity gains due primarily to people figuring out how to use all the computers they bought in the late 1990s, and how are people using computers and related gear to boost worker productivity? Q. As the price of information technology capital continues to fall, are there any signs of another boom in information technology investments that will greatly boost the productivity of IT-using industries yet further? Q. What new jobs or industries are being created because of the falling price of information technology?...

Sailing into Harm's Way versus the Dangerously Eloquent Jeff Faux | TPMCafe: Feb. 27, 2007: I had written: "Is there a way to interpret Jeff other than as a call to keep China a society of poor subsistence rice farmers as long as possible--keep them poor, barefoot, uneducated, and by no means allow them to work at any of the high-value manufacturing occupations we want to keep in the United States?"

Jeff Faux writes back: "Brad missed the point. There are rich people in poor countries and poor people in rich countries. China is not just a society of poor, barefoot, uneducated peasants. At the top, China is a place of immense wealth.... Why is it that it is the responsibility of $40,000 year American working families to sacrifice their future in order to raise up the living standards of poor Chinese, when commissars turned capitalists ride around Shanghai in a different Rolls every day?..."

I think it's time to put myself seriously in harm's way here...I reply: There aren't many commissars-turned-capitalists. Scratching on the back of my envelope, I find that at current exchange rates, China's GDP per worker--and there are 800 million workers--is $3,000 per year. (In 1990 it was $1,100 of today's dollars per year.) According to Piketty and Qian's guesses, the top 0.1% of China's workers get an average of $30,000 per year at current exchange rates. This elite of some 800,000 do live considerably better in their homes in Shanghai than Americans with $30,000 do--unskilled labor and the services it provides are really cheap in Shanghai because China is still really poor (perhaps at a level equivalent to $100,000 per year if you like being waited on and having a household staff; much less if you don't). Redistribute all the income of the 800,000 commissars-turned-capitalists back to the masses, and you boost median standards of living in China by 1% above current levels...

The American Prospect: Robert Rubin's Contested Legacy: Rubin's Remarkable Achievement: Volume 15, Issue 2. February 1, 2004: In an Uncertain World: Tough Choices From Wall Street to Washington By Robert Rubin and Jacob Weisberg, Random House, 448 pages, $35.00.

In 1992 the incoming Clinton administration had, broadly speaking, two strategic options for domestic policy. The first was a double-or-nothing "social democracy" strategy. Federal spending at the time was running at 22 percent of gross domestic product, hardly changed from 1980. Contrary to conservative mythology, the Reagan revolution hadn't shrunk the government, but it had changed its shape: As a share of federal spending, domestic expenditures outside of the entitlement programs were down by one-third, while debt interest and military spending were up. Forecasts showed deficits continuing -- indeed, rising -- as far as the eye could see. If policy had stayed unchanged, the federal debt -- which had already risen from 26 percent of GDP in 1980 to 48 percent in 1992 -- would have continued climbing to 72 percent in 2000.

Bill Clinton could have said: Let the deficit problem be the responsibility of some future Republican administration. We'll pursue Democratic priorities while keeping the deficit constant, or maybe even allowing it to grow a bit in relation to the economy. Spend more to give every American good medical care (instead of using health-care reform for cost containment). Raise public investment in roads, bridges and other crumbling infrastructure. Expand social insurance to provide better benefits and retraining for workers who lose their jobs. Provide incentives -- such as a carbon tax -- for industry to rest lightly on the environment.

Some liberals will not forgive Clinton for failing to pursue this approach, but it was politically infeasible. In Congress, the Democrats had an organizational but not an ideological majority. Many centrist Democrats would not support a social-democratic program, as was evident in the spring of 1993, when Clinton's short-term economic stimulus program (which included money for infrastructure) went down to defeat...

Cory Doctorow: Death of the Novel? Film at 11

"You do too like reading off the computer screen," says Cory Doctorow. You just don't like reading novels when there is other, more interesting fare to be had--just as you don't spend much time sitting around the campfire listening to a blind poet chant all XXIV books of the Iliad any more:

Locus Online Features: Cory Doctorow: You Do Like Reading Off a Computer Screen: "I don't like reading off a computer screen" — it's a cliché of the e-book world. It means "I don't read novels off of computer screens" (or phones, or PDAs, or dedicated e-book readers), and often as not the person who says it is someone who, in fact, spends every hour that Cthulhu sends reading off a computer screen. It's like watching someone shovel Mars Bars into his gob while telling you how much he hates chocolate.

But I know what you mean. You don't like reading long-form works off of a computer screen. I understand perfectly — in the ten minutes since I typed the first word in the paragraph above, I've checked my mail, deleted two spams, checked an image-sharing community I like, downloaded a YouTube clip of Stephen Colbert complaining about the iPhone (pausing my MP3 player first), cleared out my RSS reader, and then returned to write this paragraph.

This is not an ideal environment in which to concentrate on long-form narrative (sorry, one sec, gotta blog this guy who's made cardboard furniture) (wait, the Colbert clip's done, gotta start the music up) (19 more RSS items). But that's not to say that it's not an entertainment medium — indeed, practically everything I do on the computer entertains the hell out of me. It's nearly all text-based, too. Basically, what I do on the computer is pleasure-reading. But it's a fundamentally more scattered, splintered kind of pleasure. Computers have their own cognitive style, and it's not much like the cognitive style invented with the first modern novel (one sec, let me google that and confirm it), Don Quixote, some 400 years ago.

The novel is an invention, one that was engendered by technological changes in information display, reproduction, and distribution. The cognitive style of the novel is different from the cognitive style of the legend. The cognitive style of the computer is different from the cognitive style of the novel.

Computers want you to do lots of things with them. Networked computers doubly so — they (another RSS item) have a million ways of asking for your attention, and just as many ways of rewarding it.

There's a persistent fantasy/nightmare in the publishing world of the advent of very sharp, very portable computer screens. In the fantasy version, this creates an infinite new market for electronic books, and we all get to sell the rights to our work all over again. In the nightmare version, this leads to runaway piracy, and no one ever gets to sell a novel again.

I think they're both wrong....

Take the record album. Everything about it is technologically pre-determined. The technology of the LP demanded artwork to differentiate one package from the next. The length was set by the groove density of the pressing plants and playback apparatus. The dynamic range likewise. These factors gave us the idea of the 40-to-60-minute package, split into two acts, with accompanying artwork. Musicians were encouraged to create works that would be enjoyed as a unitary whole for a protracted period — think of Dark Side of the Moon, or Sgt. Pepper's.

No one thinks about albums today.... The idea of a 60-minute album is as weird in the Internet era as the idea of sitting through 15 hours of Der Ring des Nibelungen was 20 years ago. There are some anachronisms who love their long-form opera, but the real action is in the more fluid stuff that can slither around on hot wax — and now the superfluid droplets of MP3s and samples. Opera survives, but it is a tiny sliver of a much bigger, looser music market. The future composts the past: old operas get mounted for living anachronisms; Andrew Lloyd Webber picks up the rest of the business.

Or look at digital video. We're watching more digital video, sooner, than anyone imagined. But we're watching it in three-minute chunks from YouTube....

The problem, then, isn't that screens aren't sharp enough to read novels off of. The problem is that novels aren't screeny enough to warrant protracted, regular reading on screens.

Electronic books are a wonderful adjunct to print books. It's great to have a couple hundred novels in your pocket when the plane doesn't take off or the line is too long at the post office... cool to be able to search the text... excellent to use a novel socially.... But the numbers tell their own story — people who read off of screens all day long buy lots of print books and read them primarily on paper. There are some who prefer an all-electronic existence (I'd like to be able to get rid of the objects after my first reading, but keep the e-books around for reference), but they're in a tiny minority...

Recent Posts

Pages

Recent Comments

Search Brad DeLong's Website

  •