Fine-Graining Technological Progress, &

BRIEFLY NOTED: For 2022-05-30 Mo

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FIRST: Fine-Graining Technological Progress:

The highly estimable Fred Block puts his finger here on a big flaw in my Slouching Towards Utopia <https://bit.ly/3pP3Krk>:

Fred Block: Technology & Productivity: A Critique of Aggregate Indicators: ‘Economic analysts have used trends in total factor productivity (TFP) to evaluate the effectiveness with which economies are utilizing advances in technology. However, this measure is problematic on several different dimensions. First, the idea that it is possible to separate out the relative contribution to economic output of labor, capital, and technology requires ignoring their complex interdependence…

LINK: <https://www.levyinstitute.org/publications/technology-and-productivity-a-critique-of-aggregate-indicators>

In Slouching Towards Utopia, I start by asserting that we can create a rough guide to the level of “technology”—to the value of the stock of useful ideas about productively manipulating nature and organizing humans that have been discovered, developed, deployed, and diffused throughout the world economy—by simply taking our estimate of the average level of real income per person, and multiplying it by the square-root of population. (Why the square-root? Well, if we took “technology” to be average income times the population, we would be assuming that labor was not productive at all; if we took “technology” to be just average income, we would be assuming that resource scarcity was unimportant; both of those have to be wrong.)

I then note a global historical discontinuity around 1870:

• Before 1870, the proportional rate of growth of “technology” so measured was 0.45%/year worldwide (and 0.9%/year in the charmed “Dover Circle” economies), and was hostage to two processes—the non-exhaustion of extremely cheap coal and to the centrality of the concentration of industry into the Dover Circle—which were both reaching their limits.

• After 1870, the proportional growth rate of “technology” so measured was 2.1%/year worldwide (and 2.3%/year in the charmed “Dover Circle” economies).

Before 1870, given human fecundity, growth was not rapid enough to push incomes high enough to trigger a global fertility decline and the demographic transition: it was doubtful that even a continuation of growth at the pre-1870 pace would be enough to move humanity out of its desperately poor Malthusian equilibrium, and a continuation of that growth might well not have been in the cards.

After 1870, humanity was no longer ensorcelled by the demon of Malthus. Instead, we were on the road to economic El Dorado: a truly rich and, if only we could manage the process of becoming and being rich, utopian world was in our grasp as the level of technology rose from 1 in 1870 to 21 in 2010, giving humanity godlike and individuals the potential for near-godlike powers by the standards of previous eras.

And the book is about managing this upward leap from 1 to 21 in technology: using technology to bake a large-enough economic pie, building social institutions to fairly and equitably slice the pie, and then the psychological issues of properly tasting—enjoying—the pie so that people could be healthy, and feel safe, secure, and happy.

But there is no gigantic machine buried in the earth which emanates technology all over the world so that everyone everywhere becomes better at making and doing things; there is no single dial which rotates clockwise from the ‘1’ to the ‘21’ marker between 1870 and 2010. To even claim that there is a meaningful aggregate numerical measure of anything that we can call "technology" is to commit a major logical and conceptual error. “Technology” is more like “anger” or “happiness than it is like “temperature” or “mass”: not quantifiable in any reasonable and consistent way. Back in 1936 John Maynard Keynes strongly warned precisely against doing this kind of thing:

proposition[s] of a similar character to the statement that Queen Victoria was a better queen but not a happier woman than Queen Elizabeth… not without meaning and not without interest, but unsuitable as material for the differential calculus. Our precision will be a mock precision if we try to use such partly vague and non-quantitative concepts as the basis of a quantitative analysis…¹

Yet I do use the differential calculus, and do use “mock precision” in stating that the worldwide-diffused level of technology grew from 0.27 in the year 150 to 0.43 in 1500 to 0.64 in 1770 to 1 in 1870 to 21 in 2010 (and 25 today). There is a sense in which 1 worker today in 2022 can on average do the work it took 25 to do back in 1870, and that it took 92 to do back in 150 and 150 workers to do back in the year -1000.

On the other hand: to feed the dogs from food scraps, and to make sure that the rapid-eating poodle-lab mix (50 pounds) does not eat her own food, and then drive the dainty-eating boxer-huskie-shepherd-pit bull-great pyrenees mix (75 pounds) off of his, and devour it—that takes as much human time and effort today as it took in -1000.

Yet nobody had to get up before dawn to kindle a fire so that my study would be suitably comfortable when I came down to it this morning (and a “study” in which I can see 700 of my books, and have access to millions instantly through the magic mirror device on which I am typing right now, did not exist as a room possibility back in -1000), and the fully-amortized cost of our furnace plus the natural gas to fuel it is $1/day—4 minutes’ work at the current California minimum wage.

And all the people alive in the world in -1000—or, indeed, in 1870—could not have, working together full-time, produced a single dose of the antibiotics we have stored in our medicine cabinet.

Some prices do not change at all. Some prices change in a calculable way. Some prices drop from +∞ to something expensive; some prices drop from +∞ to somethig cheap; some prices drop from something calculable to effectively zero. What utility is there in reporting some single number and claiming that it is a meaningful average of such a distribution of price changes?

In Slouching Towards Utopia, I do not deal with these issues at all.

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One Video:

Chang-Tai Hsieh: Two Strong Hands: China’s Vision for the Private Sector <https://www. youtube.com/watch?v=YngVgVpclF0>:

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One Image:

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Very Briefly Noted:

• Brad Stone & Lizette Chapman: Meta, Amazon, Tesla: Big Tech’s Stock Selloff Is Long Overdue: ‘The market collapse isn’t just the inevitable result of macroeconomic forces like high interest rates and inflation. It’s also the best opportunity in more than a decade to reckon with the tech industry’s excess… <https://www.bloomberg.com/news/features/2022-05-26/meta-amazon-tesla-big-tech-s-stock-selloff-is-long-overdue>

• Tom Nichols: Only Ukraine Will Decide When the War with Russia Is Over: ‘And if you have to say “this is not appeasement,” it’s probably appeasement… <https://newsletters.theatlantic.com/peacefield/628fecee0a81280021a5877f/kissinger-suggests-ukraine-zelensky-cede-territory/>

• Josh Zumbrun: Why Covid Pandemic’s Daily Case Count Comes Up Short in the U.S.: ‘Estimates of the true number of infections, correcting for undercounting, suggest the U.S. might be experiencing the second-largest wave of Covid–19 infections since the pandemic began…. "The infection-detection rate is way down,” said Christopher Murray, IHME’s director… <https://www.wsj.com/articles/why-covid-pandemics-daily-case-count-comes-up-short-in-the-u-s-11653643802>

• Zeynep Tufekci: The Real Reason Fans Hate the Last Season of Game of Thrones: ‘Bad storytelling… [and] the storytelling style changed from sociological to psychological… <https://blogs.scientificamerican.com/observations/the-real-reason-fans-hate-the-last-season-of-game-of-thrones/>

• Chris Anstey: The Inflation Supertanker Is Finally Turning <https://www.bloomberg.com/news/newsletters/2022-05-27/what-s-happening-in-the-world-economy-inflation-showing-signs-of-peaking?cmpid=BBD052722_NEF>

• Sarah Mosquera: A Bison Range Homecoming: Native Tribes Reclaim a Montana Nature Preserve: ‘The Confederated Salish and Kootenai tribes celebrate the restoration of lands they had stewarded for thousands of years… <https://www.theguardian.com/us-news/2022/may/27/bison-range-native-tribes-reclaim-montana-nature-preserve?CMP=share_btn_tw>

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Twitter & ‘Stack":

• Roy Edroso: When the Levee Breaks: ‘I can still remember/Charlton Heston and his cold dead hands/‘Cause he knew people of the gun/No longer owned them just for fun/‘Cause something in them snapped with Vietnam/And each November they would turn out/And vote for any dunce or burnout… <

When the levee breaks

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