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A few rants (mixed in with a few half-baked ideas): 1) Economic progress from the industrial revolution is about quantity. We learned to make a lot more stuff

A few rants (mixed in with a few half-baked ideas): 1) Economic progress from the industrial revolution is about quantity. We learned to make a lot more stuff. The industrial revolution is not quite done, but the impact is less and less every decade. We may never match that quantity growth of stuff because we don't even want more stuff, we only want better stuff. And we're getting better stuff and more variety. 2) Info. tech. IS being mismeasured and it's huge. We're not all imagining it. The economics of info tech are REALLY good except in the official GDP numbers. And arguing that it's not counted in economic measurements doesn't debunk the mismeasurement claim, it supports/explains it. What's more, info tech decimates a lot of industries - music, GPS, newspapers, travel agents, etc. And self-driving cars are probably going to decimate the auto industry and wipe out a lot of logistics related jobs. Everyone(A) will be better off but official GDP will fall. 3) Wages aren't growing largely because the economy needs more skilled and more managerial workers, but we don't seem to be producing a lot of them(B). It's an awesome time to be a skilled worker. Good and growing pay and billboard signs desperately seeking talent. There's no end to work that needs to be done with the right skills. Meanwhile, unskilled workers aren't so useful anymore. They were well off when anybody could sit in an assembly line and produce a lot of stuff. But now unskilled workers don't really produce, they mostly trade their time for other people's time (e.g. by cooking their food) and they do so from a weak negotiating position. I don't see any of this changing anytime soon. (A) Everyone = the vast majority of people (B) Anecdotal, I could be wrong

AnimalMuppet 10y ago
> The economics of info tech are REALLY good except in the official GDP numbers. Take Google, for example. The (economic) value that Google provides to me is far more than I pay for, which is zero. It's even far more than what Google makes from the ads it serves me. Google is capturing as revenue only a small fraction of the value it creates. That (and similar cases) are why much of the info tech economic/productivity gain doesn't show up in the official GDP numbers.
- nostromo 10y ago
  Well, the official GDP numbers also don't count the value of sunshine and rainbows -- because that's not what they're created to measure. If you get a lot of value from something you pay nothing for, and it doesn't increase your job output in dollars and cents, then there's no reason it should increase GDP.
  - HillaryBriss 10y ago
    and to that extent we should reduce the importance we place on policies that increase GDP. GDP increases are nice, but they are by no means the only important thing to consider. many other considerations must be made when creating or changing public policy.
  - AnimalMuppet 10y ago
    By that logic, stuff I buy that doesn't increase my job output (like movies, music, and ice cream) also shouldn't be in GDP. Stuff I consume belongs in GDP, even if it doesn't turn into stuff I produce.
    - nostromo 10y ago
      You missed where I said: > something you pay nothing for So, obviously, yes, if you buy ice cream GDP will go up.
      - AnimalMuppet 10y ago
        OK, now I see how to parse what you said. If I pay nothing, and I produce nothing, than it doesn't add to GDP. True, as GDP is constituted. But what if it is free and still makes me better off? Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free. But are they only economically valuable when they cost money? If I used Windows to create my business instead, that would contribute to GDP, even if my business failed. Two (not perfectly) equivalent products, but one counts as GDP, and the other doesn't. Once you see that "economics" can contain more than dollars, then you see that GDP isn't the correct measure of economic activity.
Spooky23 10y ago
You're wrong about one thing... The low skill jobs didn't vanish. They moved to places where wages and regulation (safety, environmental, etc) are less. The people who made Fisher Price toys in East Aurora, NY were made redundant by equally low/moderate skill workers in Mexico and later China. Your undershirt was made in North Carolina until the late 80s, and shifted to a variety of places until it hit the bottom -- Bangladesh. The IBM people who assembled Power servers in Minnesota were replaced by Mexicans. The Dell folks in North Carolina and Texas were replaced by Mexicans, Taiwanese and Chinese. What you characterize as low skill work and workers still exists and isn't being automated away to the extent that the average HN commenter would suggest. I question the value to the consumer as well. The shoes on my feet are made in some mega-factory in Guangdong. They cost more than the shoes I bought a decade ago that were made in Maine, and are of similar quality. IMO there's a lot of middlemen or some sort of self dealing going on -- producing shoes in massive bulk should push prices down, not up.
- Qworg 10y ago
  Are they the same price in 2006's dollars?
- ThomPete 10y ago
  Outsourcing is the last step before automation. You have to follow your own rationale here trough. What happens when mexicans become richer and also concerned about safety at workplace because now they can afford to worry about it? This is why even china is outsourcing to even cheaper places, robotics or why when production sometimes comes back it's in fully automated factories.
  - Spooky23 10y ago
    > What happens when mexicans become richer and also concerned about safety at workplace because now they can afford to worry about it? They get canned and the work gets shipped out to China.
- adrianN 10y ago
  People are only winning over robots because machines are currently more expensive. Labor tends to get more expensive as economies mature, whereas robots keep getting cheaper.
sien 10y ago
In Robert Gordon's book he points out that GDP growth was not well measured in the industrial revolution either until things had stabilized and after a lot of the big improvements in life had happened. Look at infant mortality and mortality to 5 years old in 1800 vs 1850 vs 1900 vs 1950 or so. How much is it worth not watching your children die? The addition of water and sewage into housing had a huge impact. Dramatically reducing the labor required to live and dramatically reducing disease. Look at life in 1800 vs 1900 and the percentage working on a farm. It was probably an improvement to live in a town or city and not have to get up at dawn and work in a low productivity farm. Look at how life expectancy shot up. How much is it worth looking at your grandchildren grow up? Sure, since 2000 we have vastly better internet connected phones and social networks and it isn't well measured. But what wasn't well measured in the past was probably worth more and was more important for people's lives.
taneq 10y ago
> We may never match that quantity growth of stuff because we don't even want more stuff, we only want better stuff. This was my thought. This kind of measurement of the economy conflates maximum potential productivity with market demand, in essence assuming a supply-limited scenario. We've reached the point now where most people in first-world countries have as much as they want of most things that aren't super new, super expensive or super high tech. Production is now demand-limited.

AnimalMuppet 10y ago

> The economics of info tech are REALLY good except in the official GDP numbers. Take Google, for example. The (economic) value that Google provides to me is far more than I pay for, which is zero. It's even far more than what Google makes from the ads it serves me. Google is capturing as revenue only a small fraction of the value it creates. That (and similar cases) are why much of the info tech economic/productivity gain doesn't show up in the official GDP numbers.

nostromo 10y ago
Well, the official GDP numbers also don't count the value of sunshine and rainbows -- because that's not what they're created to measure. If you get a lot of value from something you pay nothing for, and it doesn't increase your job output in dollars and cents, then there's no reason it should increase GDP.
- HillaryBriss 10y ago
  and to that extent we should reduce the importance we place on policies that increase GDP. GDP increases are nice, but they are by no means the only important thing to consider. many other considerations must be made when creating or changing public policy.
- AnimalMuppet 10y ago
  By that logic, stuff I buy that doesn't increase my job output (like movies, music, and ice cream) also shouldn't be in GDP. Stuff I consume belongs in GDP, even if it doesn't turn into stuff I produce.
  - nostromo 10y ago
    You missed where I said: > something you pay nothing for So, obviously, yes, if you buy ice cream GDP will go up.
    - AnimalMuppet 10y ago
      OK, now I see how to parse what you said. If I pay nothing, and I produce nothing, than it doesn't add to GDP. True, as GDP is constituted. But what if it is free and still makes me better off? Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free. But are they only economically valuable when they cost money? If I used Windows to create my business instead, that would contribute to GDP, even if my business failed. Two (not perfectly) equivalent products, but one counts as GDP, and the other doesn't. Once you see that "economics" can contain more than dollars, then you see that GDP isn't the correct measure of economic activity.

Spooky23 10y ago

You're wrong about one thing... The low skill jobs didn't vanish. They moved to places where wages and regulation (safety, environmental, etc) are less. The people who made Fisher Price toys in East Aurora, NY were made redundant by equally low/moderate skill workers in Mexico and later China. Your undershirt was made in North Carolina until the late 80s, and shifted to a variety of places until it hit the bottom -- Bangladesh. The IBM people who assembled Power servers in Minnesota were replaced by Mexicans. The Dell folks in North Carolina and Texas were replaced by Mexicans, Taiwanese and Chinese. What you characterize as low skill work and workers still exists and isn't being automated away to the extent that the average HN commenter would suggest. I question the value to the consumer as well. The shoes on my feet are made in some mega-factory in Guangdong. They cost more than the shoes I bought a decade ago that were made in Maine, and are of similar quality. IMO there's a lot of middlemen or some sort of self dealing going on -- producing shoes in massive bulk should push prices down, not up.

Qworg 10y ago
Are they the same price in 2006's dollars?
ThomPete 10y ago
Outsourcing is the last step before automation. You have to follow your own rationale here trough. What happens when mexicans become richer and also concerned about safety at workplace because now they can afford to worry about it? This is why even china is outsourcing to even cheaper places, robotics or why when production sometimes comes back it's in fully automated factories.
- Spooky23 10y ago
  > What happens when mexicans become richer and also concerned about safety at workplace because now they can afford to worry about it? They get canned and the work gets shipped out to China.
adrianN 10y ago
People are only winning over robots because machines are currently more expensive. Labor tends to get more expensive as economies mature, whereas robots keep getting cheaper.

sien 10y ago

In Robert Gordon's book he points out that GDP growth was not well measured in the industrial revolution either until things had stabilized and after a lot of the big improvements in life had happened. Look at infant mortality and mortality to 5 years old in 1800 vs 1850 vs 1900 vs 1950 or so. How much is it worth not watching your children die? The addition of water and sewage into housing had a huge impact. Dramatically reducing the labor required to live and dramatically reducing disease. Look at life in 1800 vs 1900 and the percentage working on a farm. It was probably an improvement to live in a town or city and not have to get up at dawn and work in a low productivity farm. Look at how life expectancy shot up. How much is it worth looking at your grandchildren grow up? Sure, since 2000 we have vastly better internet connected phones and social networks and it isn't well measured. But what wasn't well measured in the past was probably worth more and was more important for people's lives.

taneq 10y ago

> We may never match that quantity growth of stuff because we don't even want more stuff, we only want better stuff. This was my thought. This kind of measurement of the economy conflates maximum potential productivity with market demand, in essence assuming a supply-limited scenario. We've reached the point now where most people in first-world countries have as much as they want of most things that aren't super new, super expensive or super high tech. Production is now demand-limited.