Welcome to the new version of European Tribune. It's just a new layout, so everything should work as before - please report bugs here.

Metatone Jumps the Shark - Tom Friedman on economic equilbiria

by Metatone Mon Feb 18th, 2013 at 02:29:58 AM EST

[Moustache of Understanding Alert]

I've been banging on for years (as have others here, but I do it in a slightly more tortured style)  about the fact that economics has assumed linkages and beneficial equilbria in analysis. And now I know I've jumped the shark, because Tom Friedman is quoting people saying similar things in his latest column...

front-paged by afew


It's the P.Q. and C.Q. as Much as the I.Q. - NYTimes.com

In their terrific book, "Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy," Erik Brynjolfsson and Andrew McAfee of the Massachusetts Institute of Technology note that for the last two centuries it happened that productivity, median income and employment all tracked each other nicely. "So most economists have had this feeling that if you just boost productivity, the pie grows, and, in the long run, everything else takes care of itself," explained Brynjolfsson in an interview. "But there is no economic law that says technological progress has to benefit everyone. It's entirely possible for the pie to get bigger and some people to get a smaller slice." Indeed, when the digital revolution gets so cheap, fast, connected and ubiquitous you see this in three ways, Brynjolfsson added: those with more education start to earn much more than those without it, those with the capital to buy and operate machines earn much more than those who can just offer their labor, and those with superstar skills, who can reach global markets, earn much more than those with just slightly less talent.

Of course, being the Moustache of Understanding, TF comes up with a typically wrong analysis and proposal for solutions. I'll let you go read it if you care.

However, I wonder if progress is being made - maybe once we can admit that particular proxy variables in economics (in this case "productivity") are not in fact magically connected to general wellbeing, maybe we're getting somewhere with the Overton Window. And maybe if TF is posting on my topics, I need some new obsessions?

Display:
It's the P.Q. and C.Q. as Much as the I.Q. - NYTimes.com
How to adapt? It will require more individual initiative.

Aaaarrgghh! <runs away>

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 03:50:01 PM EST
"Yo, landless peasants and urban poor! You need to take initiative and own some robots!"


-----
sapere aude
by Number 6 on Mon Feb 18th, 2013 at 10:46:53 AM EST
[ Parent ]

Today, not only do all these things exist, but, in combination, they've taken us from connected to hyperconnected. Now, notes Craig Mundie, one of Microsoft's top technologists, not just elites, but virtually everyone everywhere has, or will have soon, access to a hand-held computer/cellphone, which can be activated by voice or touch, connected via the cloud to infinite applications and storage, so they can work, invent, entertain, collaborate and learn for less money than ever before. Alas, though, every boss now also has cheaper, easier, faster access to more above-average software, automation, robotics, cheap labor and cheap genius than ever before. That means the old average is over. Everyone who wants a job now must demonstrate how they can add value better than the new alternatives.

Our dear Moustache is so enamored that he predicted such connectivity nearly a decade ago (in the preceeding paragraph to the one copied here), though he ignores those writing about the phenomena three and even more decades ago. Did he forget a key part of this hyperconnectivity?

the demand for electricity will grow as devices and data proliferate, and the production of electricity comes from rotating hardware of major scale. It will be quite some months before 3D printers can make high quality, 20 yr life 3 MW wind turbines. /snark

Plus, there's a whole lot of movement of physical things like food and water and people. And buildings have to be built.

So his Randian call for people to innovate (there's a difference between real innovation and Randian innovation) leaves out the entire dynamic of the physical world. Perhaps he should reread his gushing discovery of Yurpeen two speed toilets.

But then, he's The Moustache of Understanding, and you're not.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Sun Feb 17th, 2013 at 04:25:10 PM EST
infinite applications and storage

Golly.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Feb 18th, 2013 at 07:10:01 AM EST
[ Parent ]
"Everybody will need to be above average (or die)"

Channeling the collective wisdom of the overlords, as usual.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 18th, 2013 at 09:44:58 AM EST
[ Parent ]
I'm moving to Lake Wobegon.

-----
sapere aude
by Number 6 on Mon Feb 25th, 2013 at 09:49:53 AM EST
[ Parent ]
Did Krugman not post something about 'big data' being the next wave of innovation that will bring in new wealth? Sometimes I think they're grasping at straws. In the end wealth is physical and if physics doesn't play along...
by epochepoque on Mon Feb 18th, 2013 at 03:14:17 PM EST
[ Parent ]
Big Data is the latest brain wave in the Information Biz.  The idea is to uncover latent value in the gazillions of petrabytes companies have been keeping in massive data storage centers because they can.  Gartner estimates by 2020 Big Data will be a $15 billion a year business, employing 1.5 million people.

And, by the way, nobody knows how to do it.

BUT!

It's going to be big.  Massive.  More than massive it's going to be biggity Big BIG!

Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Mon Feb 18th, 2013 at 03:20:31 PM EST
[ Parent ]
"From small data, big data grows."

You can't be me, I'm taken
by Sven Triloqvist on Mon Feb 18th, 2013 at 03:45:56 PM EST
[ Parent ]
As Galbraith notes in The Affluent Society the notion of growth benefitting the masses was a relatively new one. Ricardo and Malthus explanations for eternal poverty  ruled for a long time and what finally lifted the masses was action not technology. In the same way it is not the technology that is causing the new poverty, it is meerely a convenient excuse for the ongoing pauperisation of growing parts of the population.

Legal theft requires narratives to explain why it is the natural order of things. And the narrators will be handsomely payed.

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!

by A swedish kind of death on Mon Feb 18th, 2013 at 07:24:12 AM EST
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Feb 18th, 2013 at 10:27:38 AM EST
[ Parent ]
Friedman's problem is much like Obama's - how to appear vigorously and effectively concerned about disturbing social trends without upsetting those who own the system. After all, we can't expect him to risk his own position in the pursuit of 'truth'. It would appear that he has found at least one pole star by which to steer his ship: NEVER ASSOCIATE AGENCY WITH THOSE WHO ACTUALLY HAVE IT. Then he can tilt vigorously yet harmlessly against windmills. The harmless part being from the POV of those WITH agency. Combine that pole star with the emotional imperative to feel good about hemself, which he so obviously does, and one can see how appealing it must be to assimilate a Randian POV so dear to so many IMPORTANT DECISION MAKERS.


As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 18th, 2013 at 11:53:09 AM EST


Display:
Go to: [ European Tribune Homepage : Top of page : Top of comments ]