7 ms·

The Experience Economy

88 points by boh 16y ago

amitraman1 16y ago
I watch a lot of moves from the early 80s, Back To The Future I is my favorite. What we (Americans) had then and now has not really changed much. Items are either faster, larger or cleaner looking, but they essentially do the same thing they did in 1981. The materialistic items sold today, don't add any marginal value to our lives. The iPad doesn't improve your life by much or at all. I think its good that people are realizing this and focusing in on enjoying life spiritually.
bfe 16y ago
I think asking "how many jobs does X create" isn't as useful an analytical framework as its inverse, "how productively does X allow its workers to create new things of value".
petercooper 16y ago
and slower rates of technological change. Slower? The typical office of 2011 might as well be an alien planet to someone looking from 1981, in comparison to 1951-1981. Computers, fax machines, the Internet, cellphones, social networks, viral marketing, hiring people you've never met in foreign countries and who directly report to you.. several areas of worklife (heck, life in general) have been totally redefined in the past 30 years at a speed never seen before.
bfe 16y ago
Actually in a more relevant parallel to Brooks's comparison, Larry Page's grandfather worked on a Michigan auto assembly line. I don't think the grandson's economic contributions are that much less tangible or clearly valuable than the grandfather's.
keiferski 16y ago
Worth a read: The Experience Economy http://www.amazon.com/Experience-Economy-Theater-Every-Business/dp/0875848192 http://www.amazon.com/Experience-Economy-Theater-Every-Busin... Read online: http://books.google.com/books?hl=en&lr=&id=5hs-tyRrSXMC&oi=fnd&pg=PR9&dq=the+experience+economy&ots=IIr6ZCfMih&sig=xdAGfFjBGCGcRP6_sD3mjv2_igM#v=onepage&q&f=false http://books.google.com/books?hl=en&lr=&id=5hs-tyRrS... Skip the last few chapters. The author's personal (religious) beliefs start to show, and his line of thought weakens (experience economy leads to "transformation" economy, in which people seek to be "transformed.") The majority of the book is an excellent read, though.
ChuckMcM 16y ago
I feel like this should be titled "I don't understand the new economics". The economics of a material world are different than the economics of an information world. Rob Gingell used to point out to me that people living during the revolutionary war didn't have a good feel for what the final rules were going to be either. So I buy the insight that it takes fewer people to create Facebook today then it did to produce Chevy Malibu's in the 70's, however Facebook is creating opportunities for people like Zynga so you really have to ask yourself what is the set of all the people working on Facebook, or applications for Facebook, or applications that let you visit Facebook, or derive demographic data from the information pool of Facebook? This is what will distinguish the information economy from the material economy. In the material economy the product (our example is the Chevy Malibu) is a dead end, it gets created, used, and discarded. In the information economy people build products which turn out to be pre-cursor materials to other products, or combined into still other products. Information products, even those that are nominally not 'tools', by their nature can be composited into new products, just like a DJ might create a techno trance mix of three or four of her favorite tunes. Google, employs 24,000 people (approximately), and how many people have careers that exist only because Google (or I guess more properly search engines) exist? So I read articles like this one and I feel like the author (in this case the meta author because the NYT is talking about Cowen's book) are struggling to understand something their brain wasn't prepared to understand, which is that information, like a Chevy, can have intrinsic value. Further its value persists as its "re-manufactured" into new information by people skilled in the art of doing so. So without the tools to understand the economics of information they see money like Google's billions but can't see the mechanism that creates it.
- pnathan 16y ago
  Unfortunately, we live in a material world. So we have to regard the material as important as well. Hence the problems.
- keiferski 16y ago
  Information =/= experience. Two different things. The author is referring to the experiential aspects of Facebook, i.e. keeping in touch with friends, etc. Not the actual information on the site. That's why he brings up college dorms being nicer - since it's difficult for universities to provide a better education, they focus on providing a better experience.
Tycho 16y ago
So US growth started stagnating in 1974 (allegedly). There's something familiar about that number. Something to do with the gold standard? Coincidence?
- tastybites 16y ago
  http://en.wikipedia.org/wiki/1972_Nixon_visit_to_China http://en.wikipedia.org/wiki/1972_Nixon_visit_to_China
- groby_b 16y ago
  Unless you can back up that statement with anything else but speculation, yes. 1974 is also the year I got my first chemistry kit. That's about as relevant to the discussion.
  - Tycho 16y ago
    It wasn't a statement, it was a question. So now questions about monetary policies in threads about economic stagnation are being down voted on HN, good to know.
calvinfroedge 16y ago
Intensely interesting. This is the most poignant section in the article: "For example, imagine a man we’ll call Sam, who was born in 1900 and died in 1974. Sam entered a world of iceboxes, horse-drawn buggies and, commonly, outhouses. He died in a world of air-conditioning, Chevy Camaros and Moon landings. His life was defined by dramatic material changes, and Sam worked feverishly hard to build a company that sold brake systems. Sam wasn’t the most refined person, but he understood that if he wanted to create a secure life for his family he had to create wealth." I would add to this that between 1950, when Sam was an adult member of the working class, though nearing retirement, the world's population was 2 billion, and today, the world's population is 8 billion. That in itself is going to manifest incredible levels of change. I think the trend we're going to see over the NEXT century is going to be a return to production, away from SOLELY consumption of goods, simply because, as the article stated, there are fewer low hanging fruits. Couple that with many more mouths to feed, and you have a recipe for a very different world in 100 years. I believe just for the human race to survive, people will need to start growing food, en masse, at a local level. Even people in cities. Energy consumption continues to rise, but the means to produce it become more and more expensive. We will need to produce alternative methods of energy gathering - which are renewable. So what does the future hold, in my opinion? 1. Rapid population decline after continued population growth because of lack of ability to support growth (ie Malthusian theory) 2. A "return to the farm" - a resurgence in small farms. Energy costs WILL bring down big agrabusiness - just wait. 3. People using more LOCALIZED means to generate energy. In the Philippines, for example (I was there in July 2009), there were a lot of geothermal plants being built near volcanos. Hawaii has been investing a lot in harnessing wave power (and generating a lot of controversy from the surfer community). I attended a "Blue Planet" presentation in Honoulu in May 2009 and talked to many of the leaders of this initiative. Germany is the world's LEADER in solar energy now. People will take what they can get, where they can get it, to meet their power needs. Even in rural Kentucky, people are starting to put solar panels on their houses. 4. Thank god, less of an obsession with money and stuff. Basic survival will once again trump all other needs until we can again reach a level of production where people can go through another lazy cycle.
- stjohn 16y ago
  Your second and third predictions are predicated on economies of scale breaking down. What makes you think that's going to happen?
presidentender 16y ago
Technological progress has always been inherently deflationary. Remember, the vast majority of the world's people used to work directly in food production as a matter of necessity. Technology has allowed most of us to get off the farm, and pursue other activities. Whereas a day's work once bought a day's food and not much more, a human worker (using the machines that serve him) is now able to produce a huge surplus of wealth. This means that there's time for leisure, and that our leisure can be much more enjoyable than our grandparents'. The tragedy of this seems to be that we're running out of stuff for people to do. A dystopian version of the future this could lead to is recounted in 'Manna,' by Marshall Brain: http://www.marshallbrain.com/manna1.htm http://www.marshallbrain.com/manna1.htm For my part, I'm hopeful. I believe that our current plight is the same sort of growing pains we've experienced in the past. The invention of the automobile made it tough to find work shoeing horses, for instance, or manufacturing buggy whips. Just because we don't need to spend our time making stuff any more doesn't mean we won't be able to find other ways to occupy our time.
- zohebv 16y ago
  While technological progress can be deflationary I have to strongly disagree that work is disappearing. I don't think we are ever going to run out of work. In fact, more "primitive" societies had far lesser work to do - "studies show that hunter-gatherers need only work about twenty hours a week in order to survive and may devote the rest of their time to leisure", though there are criticisms about the measurement. http://en.wikipedia.org/wiki/Original_affluent_society http://en.wikipedia.org/wiki/Original_affluent_society Compare this to our modern technology driven society. http://en.wikipedia.org/wiki/Working_time#United_States http://en.wikipedia.org/wiki/Working_time#United_States Also - "The Kapauku people of Papua think it is bad luck to work two consecutive days. The !Kung Bushmen work just two-and-a-half days per week, rarely more than six hours per day.[30] The work week in Samoa is approximately 30 hours,[31] and though average annual Samoan cash income is relatively low, by some measures, the Samoan standard of living is quite good."
  - billswift 16y ago
    If you want to talk about "survival", you can easily survive comfortably, much more comfortably than hunter-gatherers, today on even less work. Buying lots of junk and traveling are not needed for comfortable survival, if you want them, buy them, but don't confuse them with even comfortable survival.
narrator 16y ago
Think about the economy of China since 1974.
jhamburger 16y ago
I'd argue that everything we buy is an experience, some are just longer term than others.
bioh42_2 16y ago
David Brooks almost wrote an interesting article there. The beginning is promising, he writes about the different growth rates in developing vs developed countries. This is a well established economic fact. There's an opportunity to infer something from this... Brooks just never quite gets to it. Another interesting idea he does not clarify but does mention is the productivity improvement we have experienced over the course of this (and last!) century. Technology has greatly reduced the need for labor. Again great potential for a discussion which Brooks is never able to take anywhere meaningful. Instead the article slowly degenerates into some kind of drivel about hypothetical individuals states of mind... I don't even, what? It's kind of sad when someone clearly has the education to start a discussion but just completely lack the personal ambition to write to a much higher standard. Write about hard facts, falsifiable theories based on them. Write something more akin to a readable scientific paper. Instead we get something which resembles a bright high-school student's essay on the human condition in a consumerist world. But that's what the work of an op-ed columnist must be like. If you told me I was doomed to be a ditch digger, I would be quite upset, but I'd get over it. If you told me I was doomed to sit in a cubicle, well I'd be rather upset that I'll never fulfill my dream of working for myself but I would get over it. If you told me I was doomed to create nothing other then op-ed articles like this one, I would shoot myself.
nopinsight 16y ago
A key concern is whether there will be enough good jobs for people with insufficient intelligence or training in post-material world. It is common for anyone who has lived in a developing country to see a big divide between plenty of people who hold unskilled service jobs and a much smaller minority whose jobs require some sort of intellectual abilities or high-level salesmanship. Wage of the latter group is 7-20 times larger than the former. The middle group, whose jobs revolve around routine skills like clerical or secretarial tasks, see their jobs disappear one by one. For example, Google translation and IBM's Watson systems, once a bit more mature, will be better than lower-skilled translators and researchers. If middle-tier jobs are reduced to an insignificant amount, the world of jobs will be divided into two major classes: 1) Jobs that require high-level of intelligence to make decisions/automate tasks/invent new technology or those that require purposeful human relations building and salesmanship. 2) Jobs to service those holding jobs in class 1) The problem, as implied by the article, is that the number of people needed to do jobs in class 1) is much smaller than world population. The excess of labor pool for jobs in class 2) leads to much reduced wages and clear division in standard of living. With increasing wealth in society and distribution program, people holding class-2 jobs can still live fairly comfortably, but the ideal of egalitarian society will be even further from reality than today. (Egalitarian societies did not exist for most of history; they are in fact quite an anomaly to appear in quite a few countries in the world today--even in imperfect form.) Will the class-1 job holders protest ever louder about increasing wealth redistribution to the mass? Will the class-2 job holders be unsatisfied with status quo and seek to confiscate more wealth from the other group? Is there a good way to preserve the egalitarian ideal or at least achieve a harmonious society without violent changes? I invite you to discuss.
korch 16y ago
Nothing David Brooks writes is worth reading nor taking seriously. He's a career pundit.
mkramlich 16y ago
I vote we stop linking to articles behind paywalls/loginwalls, like this one.

88 points by boh 16y ago

I watch a lot of moves from the early 80s, Back To The Future I is my favorite. What we (Americans) had then and now has not really changed much. Items are either faster, larger or cleaner looking, but they essentially do the same thing they did in 1981. The materialistic items sold today, don't add any marginal value to our lives. The iPad doesn't improve your life by much or at all. I think its good that people are realizing this and focusing in on enjoying life spiritually.

bfe 16y ago

I think asking "how many jobs does X create" isn't as useful an analytical framework as its inverse, "how productively does X allow its workers to create new things of value".

petercooper 16y ago

and slower rates of technological change. Slower? The typical office of 2011 might as well be an alien planet to someone looking from 1981, in comparison to 1951-1981. Computers, fax machines, the Internet, cellphones, social networks, viral marketing, hiring people you've never met in foreign countries and who directly report to you.. several areas of worklife (heck, life in general) have been totally redefined in the past 30 years at a speed never seen before.

bfe 16y ago

Actually in a more relevant parallel to Brooks's comparison, Larry Page's grandfather worked on a Michigan auto assembly line. I don't think the grandson's economic contributions are that much less tangible or clearly valuable than the grandfather's.

keiferski 16y ago

Worth a read: The Experience Economy http://www.amazon.com/Experience-Economy-Theater-Every-Business/dp/0875848192 http://www.amazon.com/Experience-Economy-Theater-Every-Busin... Read online: http://books.google.com/books?hl=en&lr=&id=5hs-tyRrSXMC&oi=fnd&pg=PR9&dq=the+experience+economy&ots=IIr6ZCfMih&sig=xdAGfFjBGCGcRP6_sD3mjv2_igM#v=onepage&q&f=false http://books.google.com/books?hl=en&lr=&id=5hs-tyRrS... Skip the last few chapters. The author's personal (religious) beliefs start to show, and his line of thought weakens (experience economy leads to "transformation" economy, in which people seek to be "transformed.") The majority of the book is an excellent read, though.

ChuckMcM 16y ago

I feel like this should be titled "I don't understand the new economics". The economics of a material world are different than the economics of an information world. Rob Gingell used to point out to me that people living during the revolutionary war didn't have a good feel for what the final rules were going to be either. So I buy the insight that it takes fewer people to create Facebook today then it did to produce Chevy Malibu's in the 70's, however Facebook is creating opportunities for people like Zynga so you really have to ask yourself what is the set of all the people working on Facebook, or applications for Facebook, or applications that let you visit Facebook, or derive demographic data from the information pool of Facebook? This is what will distinguish the information economy from the material economy. In the material economy the product (our example is the Chevy Malibu) is a dead end, it gets created, used, and discarded. In the information economy people build products which turn out to be pre-cursor materials to other products, or combined into still other products. Information products, even those that are nominally not 'tools', by their nature can be composited into new products, just like a DJ might create a techno trance mix of three or four of her favorite tunes. Google, employs 24,000 people (approximately), and how many people have careers that exist only because Google (or I guess more properly search engines) exist? So I read articles like this one and I feel like the author (in this case the meta author because the NYT is talking about Cowen's book) are struggling to understand something their brain wasn't prepared to understand, which is that information, like a Chevy, can have intrinsic value. Further its value persists as its "re-manufactured" into new information by people skilled in the art of doing so. So without the tools to understand the economics of information they see money like Google's billions but can't see the mechanism that creates it.

pnathan 16y ago
Unfortunately, we live in a material world. So we have to regard the material as important as well. Hence the problems.
keiferski 16y ago
Information =/= experience. Two different things. The author is referring to the experiential aspects of Facebook, i.e. keeping in touch with friends, etc. Not the actual information on the site. That's why he brings up college dorms being nicer - since it's difficult for universities to provide a better education, they focus on providing a better experience.

Tycho 16y ago

So US growth started stagnating in 1974 (allegedly). There's something familiar about that number. Something to do with the gold standard? Coincidence?

tastybites 16y ago
http://en.wikipedia.org/wiki/1972_Nixon_visit_to_China http://en.wikipedia.org/wiki/1972_Nixon_visit_to_China
groby_b 16y ago
Unless you can back up that statement with anything else but speculation, yes. 1974 is also the year I got my first chemistry kit. That's about as relevant to the discussion.
- Tycho 16y ago
  It wasn't a statement, it was a question. So now questions about monetary policies in threads about economic stagnation are being down voted on HN, good to know.

calvinfroedge 16y ago

Intensely interesting. This is the most poignant section in the article: "For example, imagine a man we’ll call Sam, who was born in 1900 and died in 1974. Sam entered a world of iceboxes, horse-drawn buggies and, commonly, outhouses. He died in a world of air-conditioning, Chevy Camaros and Moon landings. His life was defined by dramatic material changes, and Sam worked feverishly hard to build a company that sold brake systems. Sam wasn’t the most refined person, but he understood that if he wanted to create a secure life for his family he had to create wealth." I would add to this that between 1950, when Sam was an adult member of the working class, though nearing retirement, the world's population was 2 billion, and today, the world's population is 8 billion. That in itself is going to manifest incredible levels of change. I think the trend we're going to see over the NEXT century is going to be a return to production, away from SOLELY consumption of goods, simply because, as the article stated, there are fewer low hanging fruits. Couple that with many more mouths to feed, and you have a recipe for a very different world in 100 years. I believe just for the human race to survive, people will need to start growing food, en masse, at a local level. Even people in cities. Energy consumption continues to rise, but the means to produce it become more and more expensive. We will need to produce alternative methods of energy gathering - which are renewable. So what does the future hold, in my opinion? 1. Rapid population decline after continued population growth because of lack of ability to support growth (ie Malthusian theory) 2. A "return to the farm" - a resurgence in small farms. Energy costs WILL bring down big agrabusiness - just wait. 3. People using more LOCALIZED means to generate energy. In the Philippines, for example (I was there in July 2009), there were a lot of geothermal plants being built near volcanos. Hawaii has been investing a lot in harnessing wave power (and generating a lot of controversy from the surfer community). I attended a "Blue Planet" presentation in Honoulu in May 2009 and talked to many of the leaders of this initiative. Germany is the world's LEADER in solar energy now. People will take what they can get, where they can get it, to meet their power needs. Even in rural Kentucky, people are starting to put solar panels on their houses. 4. Thank god, less of an obsession with money and stuff. Basic survival will once again trump all other needs until we can again reach a level of production where people can go through another lazy cycle.

stjohn 16y ago
Your second and third predictions are predicated on economies of scale breaking down. What makes you think that's going to happen?

presidentender 16y ago

Technological progress has always been inherently deflationary. Remember, the vast majority of the world's people used to work directly in food production as a matter of necessity. Technology has allowed most of us to get off the farm, and pursue other activities. Whereas a day's work once bought a day's food and not much more, a human worker (using the machines that serve him) is now able to produce a huge surplus of wealth. This means that there's time for leisure, and that our leisure can be much more enjoyable than our grandparents'. The tragedy of this seems to be that we're running out of stuff for people to do. A dystopian version of the future this could lead to is recounted in 'Manna,' by Marshall Brain: http://www.marshallbrain.com/manna1.htm http://www.marshallbrain.com/manna1.htm For my part, I'm hopeful. I believe that our current plight is the same sort of growing pains we've experienced in the past. The invention of the automobile made it tough to find work shoeing horses, for instance, or manufacturing buggy whips. Just because we don't need to spend our time making stuff any more doesn't mean we won't be able to find other ways to occupy our time.

zohebv 16y ago
While technological progress can be deflationary I have to strongly disagree that work is disappearing. I don't think we are ever going to run out of work. In fact, more "primitive" societies had far lesser work to do - "studies show that hunter-gatherers need only work about twenty hours a week in order to survive and may devote the rest of their time to leisure", though there are criticisms about the measurement. http://en.wikipedia.org/wiki/Original_affluent_society http://en.wikipedia.org/wiki/Original_affluent_society Compare this to our modern technology driven society. http://en.wikipedia.org/wiki/Working_time#United_States http://en.wikipedia.org/wiki/Working_time#United_States Also - "The Kapauku people of Papua think it is bad luck to work two consecutive days. The !Kung Bushmen work just two-and-a-half days per week, rarely more than six hours per day.[30] The work week in Samoa is approximately 30 hours,[31] and though average annual Samoan cash income is relatively low, by some measures, the Samoan standard of living is quite good."
- billswift 16y ago
  If you want to talk about "survival", you can easily survive comfortably, much more comfortably than hunter-gatherers, today on even less work. Buying lots of junk and traveling are not needed for comfortable survival, if you want them, buy them, but don't confuse them with even comfortable survival.

narrator 16y ago

Think about the economy of China since 1974.

jhamburger 16y ago

I'd argue that everything we buy is an experience, some are just longer term than others.

bioh42_2 16y ago

David Brooks almost wrote an interesting article there. The beginning is promising, he writes about the different growth rates in developing vs developed countries. This is a well established economic fact. There's an opportunity to infer something from this... Brooks just never quite gets to it. Another interesting idea he does not clarify but does mention is the productivity improvement we have experienced over the course of this (and last!) century. Technology has greatly reduced the need for labor. Again great potential for a discussion which Brooks is never able to take anywhere meaningful. Instead the article slowly degenerates into some kind of drivel about hypothetical individuals states of mind... I don't even, what? It's kind of sad when someone clearly has the education to start a discussion but just completely lack the personal ambition to write to a much higher standard. Write about hard facts, falsifiable theories based on them. Write something more akin to a readable scientific paper. Instead we get something which resembles a bright high-school student's essay on the human condition in a consumerist world. But that's what the work of an op-ed columnist must be like. If you told me I was doomed to be a ditch digger, I would be quite upset, but I'd get over it. If you told me I was doomed to sit in a cubicle, well I'd be rather upset that I'll never fulfill my dream of working for myself but I would get over it. If you told me I was doomed to create nothing other then op-ed articles like this one, I would shoot myself.

nopinsight 16y ago

A key concern is whether there will be enough good jobs for people with insufficient intelligence or training in post-material world. It is common for anyone who has lived in a developing country to see a big divide between plenty of people who hold unskilled service jobs and a much smaller minority whose jobs require some sort of intellectual abilities or high-level salesmanship. Wage of the latter group is 7-20 times larger than the former. The middle group, whose jobs revolve around routine skills like clerical or secretarial tasks, see their jobs disappear one by one. For example, Google translation and IBM's Watson systems, once a bit more mature, will be better than lower-skilled translators and researchers. If middle-tier jobs are reduced to an insignificant amount, the world of jobs will be divided into two major classes: 1) Jobs that require high-level of intelligence to make decisions/automate tasks/invent new technology or those that require purposeful human relations building and salesmanship. 2) Jobs to service those holding jobs in class 1) The problem, as implied by the article, is that the number of people needed to do jobs in class 1) is much smaller than world population. The excess of labor pool for jobs in class 2) leads to much reduced wages and clear division in standard of living. With increasing wealth in society and distribution program, people holding class-2 jobs can still live fairly comfortably, but the ideal of egalitarian society will be even further from reality than today. (Egalitarian societies did not exist for most of history; they are in fact quite an anomaly to appear in quite a few countries in the world today--even in imperfect form.) Will the class-1 job holders protest ever louder about increasing wealth redistribution to the mass? Will the class-2 job holders be unsatisfied with status quo and seek to confiscate more wealth from the other group? Is there a good way to preserve the egalitarian ideal or at least achieve a harmonious society without violent changes? I invite you to discuss.

korch 16y ago

Nothing David Brooks writes is worth reading nor taking seriously. He's a career pundit.

mkramlich 16y ago

I vote we stop linking to articles behind paywalls/loginwalls, like this one.