Of course he is right about the "information economy." I think the money quote is this:
But even in 1996 it should have been obvious that this was silly. First, for all the talk of an information economy, ultimately an economy must serve consumers -- and consumers don't want information, they want tangible goods.
Real stuff matters. The ability to manufacture the windmills that power your computer is more important than what goes on on the computer screen.
And the particular version of the "information economy" that he is critiquing was being pushed in no small part in order to justify a) a speculative bubble in the tech sector, and b) ever greater remuneration for professional speculators (symbol manipulators... ticker symbol manipulators would be been more appropriate).
But Krugman is probably wrong on the declining importance of education. Modern industrial production requires a reasonably educated (or, at the very least, a trained) work force. And production will still be industrial: There is nothing inherent in industrial production that prevents it from being accommodated to a full (or even over-full) world.
In this respect, it is worthwhile to note that the industrial revolution did not replace agriculture as the source of food. The industrial revolution expanded upon agriculture, and merged it to some extent with the industrial mode of production. But the result remains dependent on the availability of fertile soil, fresh water and domesticable plants and animals.
Similarly, it seems probable that any future changes in the manner of production will expand upon the industrial construct, rather than replace it wholesale. And any such descendant of the modern industrial production model will need skilled workers.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
As I see it, education serves two purposes today. One is to train the workforce, the other is a gate-keeper function to many higher paid positions in society. In an expanding economy it makes sense to combine these two as an organisational entity can expand more rapidly with competent staff, and there is still room for children of bosses to follow their parents (with some preferential treatment to make sure they do not fail to get into Harvard).
In a shrinking economy you will hardly have a chance at the plush positions if you do not have the right parents. Even those with the right parents will have to fight not to fall. And what is then the point of keeping some academic structure for training. What you need to know is who to know. Sure, the academic structure will still be used for soem training, but more with an eye to who studies where. One year at Harvard, one year in Beijing perhaps. Meet some people, polish of the worst ignorance.
Training is still needed for those that take orders, but I would guess that it will in general be shorter and more specific then todays college education. And more focused on subjects like engineering and medicine, less on literature and philosophy. A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
That's why we need economic growth, so that the haves and the have mores will not feel too threatened by a system with social mobility (whether it is meritocratic or by other means). The peak-to-trough part of the business cycle is an outlier. Carnot would have died laughing.
That's why we need economic growth, so that the haves and the have mores will not feel too threatened by a system with social mobility (whether it is meritocratic or by other means).
isn't that pandering?
growth may be great, but slow and steady, paying externality bills as we go, instead of hocking the next decade's earnings due to gamblers wresting the wheel from traditional bankers.
happier to have a hundred years of 3-4% p.a. instead of the carousel of boom, bubble, bust, gunning for guaranteed 10% and betting the farm and the kids on the lottery of subprimes, ending up with homeless in tent cities, and thousands of bank-owned slimy-green-pooled residences rotting away empty. ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
To maintain an advanced society you need technical people, but in a materially shrinking society you can not afford them. So decay is built in, and once started, builds on itself. The Fates are kind.
First, if the greedy bastards were not in control, you could preserve a meritocratic, socially mobile structure in the face of declining real incomes.
Second, given how "growth" is defined (in terms of the money value of the goods and services exchanged) it is clear that just by shifting more and more people to providing newfangled intangible services you can continue "growth" without increasing material consumption. In fact, if we did not count the service sector as part of GDP, what would the historical GDP series look like? When did the economy stop growing?
For the second point, considering how a boom-bust cycle can lead to a GDP loss even if the initial and final states are the same in terms of activity (volume transacted and nominal prices) it is clear that you can have "growth" in a "steady state". En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
When real GDP declines, 'growth' means that the Takers must continue to increase their slice of the pie with increasingly creative economic fictions, democratic subversion, and outright semi-legal robbery.
The only way to run the economy as a steady state - which is surely not that difficult in practice, although it might take some turbulence and adjustment before it becomes possible - is to strictly limit the influence of the Takers in politics, finance and business.
Therefore, a sustainable renewable economy must be compatible with a steady state, and if we have core interlocking systems of institutions that depend for their reproduction on incessant growth, those are systems of institutions that cannot survive a transition to a sustainable renewable economy unscathed. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
The asteroid belt: the new frontier! En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
gibbering twit, i can't believe the soap he's selling ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
...no, wait.... "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
beddington is a prize A stooge.
after this hair-raising insanity, he segued smoothly into endorsing GM.
bought and sold...
renewables got barely a nod, unless they're nukies.
no i couldn't make that up, lol! reality outstripped fiction since 9-11 onwards. ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
Technical improvements that do not increase resourse extraction are real improvements, but they are transitions, not growth. Once the transition is over, there is no further improvement for that technology. No return per year can be calculated, presumed, or utilized.
Can improvements feed on each other, and thus continue? Maybe, but it is doubtful. The only examples we know about--such as the West in the 19th century, were precisely cases of increasing resource use--and thus unsustainable. The Fates are kind.
The growth will not be predictable, which plays all kinds of havoc with planning (industrial or otherwise) that presumes predictable growth, but it is most assuredly still growth.
But we're going to have to give up worshipping growth for the sake of growth anyway. A number of renewable resources can be exploited beyond the point of sustainability for a moderately long time - and as long as we worship growth for the sake of growth, this will always be a temptation.
And when growth is considered "nice to have" rather than "need to have," the need for planning in a way that relies on it will greatly diminish.
But technical improvements that decrease resource extraction can continue indefinitely at a constant rate.
However, maybe insisting on defining r measuring a rate for these things is nonsense. Once you convince yourself that, say, a constant rate of return on investment makes sense, then you start insisting on getting one. This way of having conceptual constructs influence the way business or speculative investment are carried out has a long, unillustrious history. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Provided that you can come up with them!
I have never found that the creative process can be rationalized or linearized in this way. Imitating and analogizing is almost that rational, but when you have finished with that, the transition started by the new technology is complete and stops.
Your second paragraph is much to the point. The Fates are kind.
Economic evolution proceeds through boom/bust cycles, that seems to be the case. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
And social unrest is damaging to modern industrial societies in a way it never was to feudal subsistence societies. You cannot simply gun down striking mechanics or rioting plumbers, the way a nobleman of old could order a cavalry charge on uppity peasants: Peasants were easily and swiftly replaceable, qualified plumbers are not.
The scions of the oligarchs will almost certainly segregate into Oxbridge ghettos. But while that may be socially undesirable in a number of ways, I don't see any direct threat to the educational and scientific estate. Except, of course, from semi-literate billionaires who decide to attempt to kill off the educational and scientific estate without understanding that this would also crater much of industrial society in the process.
I wouldn't put it past them to try - we have had 30 years of semiliterate politicians attempting to kill off one natural monopoly after another without understanding that this would crater much of the infrastructure supporting industrial society in the process. The peak-to-trough part of the business cycle is an outlier. Carnot would have died laughing.
There is nothing inherent in industrial production that prevents it from being accommodated to a full (or even over-full) world.
Of course, the flip side of infill clusters at 4x to 8x suburban sprawl density is is reversion of 3/4 to 7/8 of land from housing to truck gardening and other resource extraction (including local energy resources).
And its not necessarily the case that any of this has to actually be planned. Assume a series of waves of fuel price shocks, and fierce political fights for establishment of electric rail transport. The locations around the stations on the corridors that get finished, or near enough, will be in very high demand, and first floor / basement "garden townhouses with second/third floor "patio" townhouses stacked on top are a fairly obvious way of selling the vicinity to the transport stop to more households.
Outside the walkable zone is a "mini-suburb" of detached homes with living victory gardens ... and eventually you get to the suburban terrain that lost the fight and ended up too far from the corridor when the tipping to infill clusters hit and the market price for residence "to far away" drops below its replacement cost.
When suburban housing unsupported by transit has a market value less than its replacement cost, it becomes slum ... as when housing anywhere drops below its replacement cost ... to be converted into multiple unit housing until it falls apart and becomes a vacant. However, built as they have been in the past few decades in the US, they won't spend nearly as long in the "slumlord rent extraction" phase, since they simply aren't as sturdy as the old brownstone townhouses. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
....so the nearer the station, the more you pay. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Actually, another important policy tool for making it legal in more places would be to make the Federal capital gains tax property sale roll-over provisions apply on a value per-acre basis. This would shift the current tax bias in favour of greenfield development into a bias in favour of infill development. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Since zoning power are part of the residual powers that vest at the state level, a state could provide for a blanket easement within a certain radius of a dedicated transport corridor stop that receives state funding for multi-use development with a height envelope no lower than three stories.
There are also owner compacts in some suburbs that provide restrictions on owners over and above the legal restrictions. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
nd finally, a series of laws that helps explain the lack of mass transit in edge cities and why this will never change. Note that "FAR" stands for "Floor-to-Area Ratio," the ratio of the total floorspace of a building to the area of the land the building is on. It's basically a measure of population density. The level of density at which automobile congestion starts becoming noticeable in edge city: 0.25 FAR. The level of density at which it is necessary to construct parking garages instead of parking lots because you have run out of land: 0.4 FAR. The level of density at which traffic jams become a major political issue in edge city: 1.0 FAR. The level of density beyond which few edge cities ever get: 1.5 FAR. The level of density at which light rail transit starts making economic sense: 2.0 FAR. The level of density of a typical old downtown: 5.0 FAR. The density-gap corollary to the laws of density: Edge cities always develop to the point where they become dense enough to make people crazy with the traffic, but rarely, if ever, do they get dense enough to support the rail alternative to automobile traffic.
With the exceptions of places that manage to elect more far-sighted politicians, the definition of "economic sense" is the one we don't like but have to live with. In the long run, we're all dead. John Maynard Keynes
This also comes with a long-term decline in the market value of auto-only suburban housing. When that declines to the point that auto-only suburban housing is valued below replacement cost, and transport-supplemented suburban housing is valued above replacement cost, that is a setting that is similar to the suburban transformation itself, when the market value of the urban density brownstone townhouses dropped below replacement cost and the processes of slum development and white flight to the suburbs began.
When developer profits hinge upon provision of a transport line, and when mixed used multiple lot occupancy is the most cost-effective way to leverage that access to a transport line, then zoning regulations in large numbers of suburban areas in the US will change. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
There's still a lot of truck grdening in the first ring of suburbs (which is almost as dense as central Paris), but I'm not sure this is really required. The logistics (food and other good supply) of a dense big city with lots of local smallish supermarkets and retailers are actually the most efficient you can have - remember that the hardest bit is always the wholesale-to-retail bit; with local supermarkets that can be supplied by medium sized trucks and that people can walk to, you solve the biggest issue. In the long run, we're all dead. John Maynard Keynes
The less energy intensive system for providing the produce that is sold in city groceries that preceded the current oil-fed agricultural system involved a range of cities, towns, and hamlets ... and one thing that you found in the hamlets that had efficient transport access to cities and towns was a ring of truck gardening.
Europe also lives beyond its biocapacity ... indeed, in the rough estimates of the Global Footprint Network, the US, Germany and Japan each live beyond our biocapacity by similar acreages. France roughly breaks even on its biocapacity, but unless nations like the US and France with above-average biocapacity per capita are able to live within our means, that is not a technological regime that is a candidate for global sustainability. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
However, the point of my previous comment is that my comment before that was not saying that big cities would necessarily be unsustainable.
However, that food does have to come from somewhere, and we can not just wave a magic wand and exempt agriculture from the need to be sustainable, so that we can just feed the cities with massive factory farms employing some minute share of the population.
The most energy efficient source of fresh produce for the cities on a whole life cycle analysis will be truck gardens with very little trucking involved, shipped in from surrounding ex-suburbs along the same transport corridors that provide the energy efficient passenger transport. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
The point that you don't need high-rises for density still stands, of course.
Paris Region GDP: $731bn.
I'm a bit surprised by how low London in. Only about $669bn. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
Of course he is right about the "information economy." I think the money quote is this: But even in 1996 it should have been obvious that this was silly. First, for all the talk of an information economy, ultimately an economy must serve consumers -- and consumers don't want information, they want tangible goods. Real stuff matters. The ability to manufacture the windmills that power your computer is more important than what goes on on the computer screen.
No. People (who the the fuck is a consumer, exactly?) want status and the markers of status. If those could be acquired electronically then they won't give a damn about tangible goods beyond what they need for their physical needs. In fact, they'll neglect their physical needs to acquire status on-line.
