Donal's picture

    Innovation Trough + update

    With new gizmos, drugs and financial instruments appearing all the time, it certainly seems like technical and scientific innovation continues fast and furious from the 20th century.

    However, in the keynote address I posted, Collapse of Complex Societies, anthropologist Dr Joseph Tainter was doubtful about the effectiveness of our current pace of innovation to keep solving problems. As if everyone should know this, he offhandedly mentioned studies indicating that the pace of innovation had declined mid-20th century. He expanded upon that idea in this interview:

    KV: What about technological innovation? The spread of digital technology, the Internet, and mobile technology contributed to the economic recovery during the last fifteen years. There has been a bit of talk about innovating our way out of this recession too... Is such optimism in technological solutions warranted? ...

    JT: Short answer: It’s complicated. Long answer: Technological-innovation-as-savior is part of our cosmology. It is a fundamental part of our beliefs, so frequently we don’t think about it rationally. Relying on technological innovation to find some solution is what I call a faith-based approach to the future. There are two things about technological innovation that concern me. The first is that, like other endeavors, research grows complex and costly and can reach diminishing returns. This is covered in the Collapse book so I won’t elaborate here. The second problem is what is known as the Jevons Paradox. William Stanley Jevons, a 19th century British economist, pointed out that in the long run technological innovations aimed as at using less of a resource actually lead to even more of the resource being used. His example was coal, but the principle applies across the board. As technological innovation leads to economy in using a resource, people respond to the lower cost by using even more. I conclude from this that technological innovations can offer only short-term advantages. They quickly become outdated, then the next round of innovations may be harder to achieve.

    I don't know what studies Tainter meant, but there appears to be a history of controversial theories of long economic cycles, such as 50 to 60 year Kondratiev waves, which are driven by, "wealth, capital accumulation and innovation," but eventually stagnate. Kondratiev was executed by Stalin for his troubles, but his ideas were championed by the Austrian economist Joseph Schumpeter, who proposed that 'creative destruction' was necessary to get out of the troughs. Schumpeter's American student Robert M Solow, won a Nobel Prize in Economics for his model of economic growth, which is still used, though modified. Solow wrote the forward for the second of the papers below by economist Robert J. Gordon, which concerns a long wave in the American economy. Gordon is the author of Macroeconomics (a textbook that seems to baffle students), a fellow at the National Bureau of Economic Research and was a member of the Boskin commission. The first paper supports Tainter's assertion that innovation is less pervasive now. I've added paragraph breaks to the abstracts:

    Does the "New Economy" Measure up to the Great Inventions of the Past?
    Journal of Economic Perspectives, 2000, v14(4,Fall), 49-74.

    During the four years 1995-99 U. S. productivity growth experienced a strong revival and achieved growth rates exceeding that of the 'golden age' of 1913-72. Accordingly many observers have declared the 'New Economy' (the Internet and the accompanying acceleration of technical change in computers and telecommunications) to be an Industrial Revolution equal in importance, or even more important, than the Second Industrial Revolution of 1860-1900 which gave us electricity, motor and air transport, motion pictures, radio, indoor plumbing, and made the golden age of productivity growth possible.

    This paper raises doubts about the validity of this comparison with the Great Inventions of the past. It dissects the recent productivity revival and separates the revival of 1.35 percentage points (comparing 1995-99 with 1972-95) into 0.54 of an unsustainable cyclical effect and 0.81 points of acceleration in trend growth. The entire trend acceleration is attributed to faster multi-factor productivity (MFP) growth in the durable manufacturing sector, consisting of computers, peripherals, telecommunications, and other types of durables. There is no revival of productivity growth in the 88 percent of the private economy lying outside of durables; in fact when the contribution of massive investment in computers in the nondurable economy is subtracted, MFP growth outside of durables has actually decelerated.

    The paper combines the Great Inventions of 1860-1900 into five clusters and shows how their development and diffusion in the first half of the 20th century created a fundamental transformation in the American standard of living from the bad old days of the late 19th century. In comparison, computers and the Internet fall short. The rapid decline in the cost of computer power means that the marginal utility of computer characteristics like speed and memory has fallen rapidly as well, implying that the greatest contributions of computers lie in the past, not in the future.

    The Internet fails the hurdle test as a Great Invention on several counts. First, the invention of the Internet has not boosted the growth in the demand for computers; all of that growth can be interpreted simply as the same unit-elastic response to the decline in computer prices as was prevalent prior to 1995. Second, the Internet provides information and entertainment more cheaply and conveniently than before, but much of its use involves substitution of existing activities from one medium to another. Third, much internet investment involves defense of market share by existing companies like Borders Books faced with the rise of Amazon; social returns are less than private returns. Fourth, much Internet activity duplicates existing activity like mail order catalogues, but the latter have not faded away; the usage of paper is rising, not falling. Finally, much Internet activity, like daytime e-trading, involves an increase in the fraction of work time involving consumption on the job.

    In these three papers, the term MFP comes from the Solow growth model, in contrast with LP which is labor productivity.

    Multifactor productivity (MFP) is output divided by a weighted average of capital and labor inputs. The weights used are usually based on the aggregate input shares either factor earns. This ratio is often quoted as: 33% return to capital and 66% return to labor (in Western nations), but Robert J. Gordon says the weight to labor is more commonly assumed to be 75%.

    Interpreting the "One Big Wave" in U.S. Long-Term Productivity Growth

    Productivity growth, inflation, and unemployment: The collected essays of Robert J. Gordon, With a foreword by Robert M. Solow. Cambridge; New York and Melbourne: Cambridge University Press, 2004.

    This paper assesses the standard data on output, labor input, and capital input, which imply one big wave' in multi-factor productivity (MFP) growth for the United States since 1870. The wave-like pattern starts with slow MFP growth in the late 19th century, then an acceleration peaking in 1928-50, and then a deceleration to a slow rate after 1972 that returns to the poor performance of 1870-1891. A counterpart of the standard data is a mysterious doubling in the ratio of output to capital input when the postwar era is compared with 1870-1929.

    Three types of measurement adjustments are applied to the standard input data. Following the lead of Denison and Jorgenson-Griliches, adjustments for the changing composition (or quality') of labor and capital, currently published by the BLS back to 1948, are estimated for 1870-1948. These composition adjustments take into account the shifting mix of the labor force along the dimensions of education and age-sex composition, and of the capital stock between equipment and structures. Further adjustments are made to capital input data to allow retirement to vary with gross investment rather than to follow a fixed pattern depending only on age, and to add types of capital owned by the government that are particularly productive in the private sector. A new MFP series taking account of all these adjustments grows more slowly throughout, and the big wave' phenomenon is both flatter and extends back further in time to 1891.

    However, there is no solution to the post-1972 productivity slowdown, and in the new data MFP growth during 1972-96 proceeds at a pathetic 0.1 percent per year. A byproduct of the measurement adjustments is to solve completely the previous puzzle of the jump in the output-capital ratio; in the new data this ratio is actually lower in 1996 than in 1870. The primary substantive explanation for the big wave lies in the timing of inventions. MFP growth during the big wave' period benefited from the diffusion of four great clusters of inventions that dwarf today's information technology revolution in their combined importance.

    A complementary hypothesis is that the partial closing of American labor markets to immigration and of American goods markets to imports during the big wave period gave an artificial and temporary boost to real wages which fed back into boosting productivity growth, followed by a reopening that contributed to the post-1972 productivity slowdown.

    Revisiting U. S. Productivity Growth over the Past Century with a View of the Future


    The statistical trend for growth in total economy LP ranged from 2.75 percent in early 1962 down to 1.25 percent in late 1979 and recovered to 2.45 percent in 2002. Our results on productivity trends identify a problem in the interpretation of the 2008-09 recession and conclude that at present statistical trends cannot be extended past 2007. For the longer stretch of history back to 1891, the paper provides numerous corrections to the growth of labor quality and to capital quantity and quality, leading to significant rearrangements of the growth pattern of MFP, generally lowering the unadjusted MFP growth rates during 1928-50 and raising them after 1950. Nevertheless, by far the most rapid MFP growth in U. S. history occurred in 1928-50, a phenomenon that I have previously dubbed the “one big wave.”

    The paper approaches the task of forecasting 20 years into the future by extracting relevant precedents from the growth in labor productivity and in MFP over the last seven years, the last 20 years, and the last 116 years. Its conclusion is that over the next 20 years (2007-2027) growth in real potential GDP will be 2.4 percent (the same as in 2000-07), growth in total economy labor productivity will be 1.7 percent, and growth in the more familiar concept of NFPB sector labor productivity will be 2.05 percent. The implied forecast 1.50 percent growth rate of per-capita real GDP falls far short of the historical achievement of 2.17 percent between 1929 and 2007 and represents the slowest growth of the measured American standard of living over any two-decade interval recorded since the inauguration of George Washington.

    This is way too much economics before lunch, but I think it explains where Tainter gets his assertions that our feeling that there is still a lot of innovation may be more a result of marketing than new invention. Econ is not my field, so I welcome constructive comments from those of you with more of an economics background.

    Here's an update with another take on waves from the Economist in 1999. Things haven't turned out as they expected:

    Catch the wave
    The long cycles of industrial innovation are becoming shorter

    By the time Schumpeter died in 1950, the third cycle of his “successive industrial revolutions” had already run its course. The fourth, powered by oil, electronics, aviation and mass production, is now rapidly winding down, if it has not gone already. All the evidence suggests that a fifth industrial revolution—based on semiconductors, fibre optics, genetics and software—is not not only well under way but even approaching maturity. This may explain why America shrugged off its lethargy in the early 1990s and started bounding ahead again, leaving behind countries too preoccupied with preserving their fourth-wave industries. If so, then Schumpeter’s long economic waves are shortening, from 50-60 years to around 30-40 years.

    There is good reason why they should. It was only during the third wave, in the early part of the 20th century, that governments and companies began to search for new technologies in a systematic manner. One of the oldest, Bell Laboratories at Murray Hill in New Jersey, was founded in 1925. Rather than leave the emergence of “new-wave” technologies to chance, all the major industrial countries nowadays have armies of skilled R&D workers sifting the data in pursuit of blockbuster technologies capable of carving out wholly new markets. The tools they use—computer analysers, gene sequencers, text parsers, patent searchers, citation mappers—are getting better all the time, speeding up the process. The productivity of industrial laboratories today is twice what it was a couple of decades ago.

    So the fifth industrial revolution that started in America in the late 1980s may last no more than 25-30 years. If, as seems likely, we are already a decade into this new industrial cycle, it may now be almost too late for the dilatory to catch up. The rapid-upswing part of the cycle—in which successful participants enjoy fat margins, set standards, kill off weaker rivals and establish themselves as main players—looks as though it has already run two-thirds of its course, with only another five or six years left to go. Catching the wave at this late stage will depend on governments’ willingness to free up their technical and financial resources, invest in the infrastructure required and let their fourth-wave relics go. Failing that, latecomers can expect only crumbs from the table before the party comes to an end—and a new wave of technologies begins, once again, to wash everything aside.


    Thank you for this Donal. I am not into the economics part but it seems to ne, a baby boomer, that the tech advances I have lived through and those my mother has lived trough are unprecedented.

    In the 90 years she has been alive humanity has gone from spark and cat's whisker communication to video/audio you can hold in your hand. From ICE boxes to complete environmental control systems. From mechanical adding machines to hand held multi-processing computers.

    But I agree with Tainter though. The next technological leaps will be much more difficult to achieve and take much longer to be implemented than the last.

    Nearly every new product that has come out in the last 10 years or so has simply been a repackaging of an existing technology.

    Well, let's start with questioning the premise, shall we? Where's the fall-off in production that is to be explained in terms of lost productivity...?

    It's a fall off in multi-factor productivity, not production. There's a chart in this PDF that shows mild MFP growth since 1987, and divides it into labor and capital components. Labor is increasingly positive, capital is increasingly negative. So the old saying, it takes money to make money, is becoming ever more true.

    Donal, my point was that the Solow growth model was a THEORY that total factor productivity (TFP), rather than labor productivity, was supposed to be a better indication of future growth in output. And my chart was a debunking of that idea: 50 years after the fall-off of TFP, growth hasn't slowed at all - apart from the blip after 2008. So, sorry Solow, but TFP is obviously not a good indication of growth potential.

    A very simple and obvious point.

    So there is no falloff in productivity that needs to be explained by any innovation trough. You're positing that trough as a cause for a non-existent effect. THERE IS NOTHING THAT NEEDS TO BE EXPLAINED.

    An equally simple point is that only Solow had the half-baked idea that the only third relevant factor - beyond labor capital and physical capital - could be ... 'innovation', so that a theoretical change in TFP with labor and physical capital constant would have to be the said innovation.

    But no one else thinks that anymore. TFP may rise due to sectoral shifts in labor - from ag to industry, say - or improvements in education - more college grads and/or better technical training - or cultural factors like shopping habits, and it may fall due to union restrictions, environmental regs, work-safety measures. And since it is unclear what innovation's contribution to TFP is relative to all these other factors, even if you do subscribe to the idea that TFP is a good indication of growth prospects, then it is another huge blind leap of faith to ascribe the changes in TFP all and only to changes in the rate of innovation.

    If no one thinks that anymore, can you explain why someone who was on the Boskin commission, hardly a wild-eyed group, is still writing papers referencing MFP?

    There is no problem referencing MFP. But there is a reason that it is usually labelled as the measure of our ignorance. That isn't a disparagement. It just says its a measure of how much increased output is not coming from an increase in inputs. So its a measure of the impact of innovation, along with a few dozen other factors, on productivity. So if you see a fall in MFP, you can't just infer that innovation is falling off. It could be improvements in education have plateaued (that's the most common thesis). It could be economies of scale have plateaued. It could be erosion of market regulation causing frictions. It could be a lot of things or, more likely, a combination of many things. Innovation could be going up for all we know. Its impact is so damn hard to measure. And MFP isn't remotely a decent proxy for measures of productivity-enhancing innovation.

    I don't mean to be ornery here, Donal. It's just that this whole end of innovation meme the right is plugging is not something the left should be playing along on. They want to push the idea that, hey, this whole stagnation thing? We can't do anything about it, because it comes from long sweeping trends in innovation that we have no control over. Cowen suggests that stagnating median incomes, for instance, are stagnating not because all the wealth is going to the top 1%, but because someone took away our innovation mojo. Sorry, but its blatant bullshit. And you're just happily playing along here, with no empirical basis for it. Sure, maybe you 'can say what you like'. It's your blog. But you're getting upwards of 2000 hits pushing this crap. It's not right. 

    Just my opinion. peace.

    Did you happen to read this? Did anyone?

    This is way too much economics before lunch, but I think it explains where Tainter gets his assertions that our feeling that there is still a lot of innovation may be more a result of marketing than new invention. Econ is not my field, so I welcome constructive comments from those of you with more of an economics background.

    I'm really, really tired of asking simple questions, or even complicated questions and immediately being accused of playing along with this crowd or that crowd. I'm fairly skeptical about everything, truth be told, so the likelihood that I'm playing along with anyone is nil. If you all want politically correct posts, I'll just write about tennis and let the world go to hell.

    Hey Donal, there is a lot of overlap here with The Great Stagnation, which I reviewed a few weeks ago. I'm not going to address all the points but just raise a similar critique that I leveled at Cowen, which is to vastly underestimate the information revolution You've got an economist arguing in 2000 that the internet does not qualify as a "Great Invention" because it didn't boost demand for the computers, books, or entertainment? Seriously? The author treats the web like some kind of toy, maybe good for day trading. Meanwhile, the guy probably did his research using online databases and submitted the article and subsequent drafts to his editor over email, who then published it online, enabling you to stumble on it and broadcast it to the rest of it. I'll cut the auhor a little slack because the article was published in 2000, but you're the one who quoted in 2011.

    I think there is an age issue as far as perception here. From the time I was 6 to the time I was 11, I saw technology go from big vacuum tubes for everything to small, hold in you hand transistor radios.

    From the age of 11 to the age of 20 I saw transistors go to integrated circuits. And from the age of 20 to the age of 40 I saw us going from big expensive mainframe computers that were very slow to sit on you desk PCs that were much faster than the mainframes.

    And in the last 20 years the same stuff just smaller and faster. The leaps in technology getting smaller and taking more time to achieve.

    The underlying technology that powers the Internet has not changed much since it's inception in the early 1970s.  It has simply become smaller and faster but even that has hit a plateau.

    Yet there is also how the devices have become integrated into how we do business.  Just from a non-profit perspective, television and radio had almost no impact on the day to day business.  They were used for strictly marketing purposes.  But right now there is huge pressure to get webinar technology and other web based communication platforms in order to conduct meetings, share documentation and plan events and projects.  There are a whole new set of opportunities and challenges (ie problems) about incorporating individuals and groups in the processes of decision making and evaluation that could never have been considered possible.  Much of this has to do with handheld devices now are rapidly becoming a must-have for someone who is doing business.

    And right now one of the projects we are dealing with is addressing the technology gap in the local schools.  Again, tv and radio didn't much change how class was conducted.  The big shift was the teacher who went from the old fashioned education film to showing the newest educational vcr tape.  If a kid didn't have a tv at home, it didn't impact their success at school (just on the playground because they couldn't talk about that show that was on last night).  Now, however, if a student doesn't have not only a computer but internet access at home they are at a disadvantage in the classroom. 


    Oh you simply cannot get away from the damn things any more. They don't have microprocessors in hammers or screw drivers yet, but give it time.

    Everything's better with bluetooth!

    What the hell is a screw driver?

    The thing you throw at the wall after you discover you've stripped the screw.

    Hate to ask what a pile driver or backseat driver might be. Or even Red River.

    Your piles acting up again, dear?  Quelle dommage!

    Pire - quelle damage.

    Doctor Mom says: stay away from thrown screwdrivers and sit on a cushion.

    But not the one in the reading room.

    But the telephone and fax were integrated into business, too. The best thing about the internet, to me, is that I don't have to talk on the phone and send faxes anymore. I can email stuff. The second best thing is that I can get up-to-date product data on almost anything out there. So to me, the internet is a serious improvement of those networks.

    The computer and internet technology is much like the phone and faxes in that they have become part of doing business.  And there are definite benefits from it, for sure.  My point is that is this technology is changing how business (and school) is conducted in some very fundamental ways that other technologies did not.  For better or for worse.  It is like video conferencing on sales and other things (Up in the Air with George Clooney I thought did a pretty good job addressing just one way this new technology is impacting the nature of our social interactions). 

    Webinar types of communications has a lot of people rethinking who should be participating in meetings, and the nature of that participation, in a way that telephone conferencing didn't. For better or for worse.  The reason for this I believe is that webinar technology allows for information to be shared at the same time of the conversation.  People can be more easily brought up to speed or informed on situations that would be nearly impossible when it was simply voices over the line.

    One thing about that "up-to-date" info - what this had led to is an expectation of real time information.  For better or for worse.   I produced some reports on demographics that came from the previous year.  And also immediately a number of people wanted the "latest" data. "Can't you search the web for that?" one asked.  Well, first off, that is where I got the data, and secondly the only data available is what is posted by someone out there.  So just maybe, as was the case here, the most recent data was from the previous year.  And sometimes that information one wants isn't "out there" at all.

    One little sidenote on "emailing stuff"  - now everyone wants something emailed to them (when in the days of old it "fax it to me").  So I spend a nice chunk of my time scanning documentation into a pdf then going to the email and attaching the pdf to the email so they can get their documentation.  Of course now the quality is much better than what came through a fax machine and the person has a file for later use (and to send to others).  But definitely not a time saver for me.   

    Come on, first you should have your documentation digital, so you just "save as PDF" or even "save as PDF and send".

    If you have the right kind of scanner tray, you put in a stack of paper and it scans directly to PDF, which you can then email without having to go through a busy signal and worry about page 17 getting crumpled on the receiving end.

    And yes, I do this on a dirt cheap 4-year-old Samsung.

    This just highlights that we have solutions even for SOHOs, but they're just not fully adopted even in the US. So somewhere in 10 years, when all the cassette players are mostly history, we'll have a bump in efficiency.

    Agreed. Gordon appears to have aged. I linked before to Carlota Perez, who writes on long waves of technological and economic change, but who is also very strong on the associated financial bubbles, as well as offering ideas on what the state can do to build on the positive halves of these cycles. She's also very engaged with the electronics and green revolutions, and how they're changing all sectors. People might want to start with her power points or presentations, many of which are online. I'm not saying she's got the 100% right answer, only that I think she's thrown a lot of the right pieces on the table.

    Even if it is a Great Invention, and it's on the list, it was invented in 1969, which isn't much after the 1942 date that Gordon cites as the end of the golden age.

    It has been a series of inventions that is still continuing. The first internal combustion engines were developed in the early 1800s, but the automobile and the airplane are inventions in their own right, just as the web is a distinct invention powered by internet (which is in turn powered by the computer).

    The web was invented twenty-one years ago.

    Correction. Nearly 30+ years ago.

    The TCP/IP model is a description framework for computer network protocols created in the 1970s by DARPA

    Orignally called DARPA NET. Or sometimes ARPA NET.

    Oh and the first transistor was patened in 1925, though do to WWII was never built.

    The first patent[1] for the field-effect transistor principle was filed in Canada by Austrian-Hungarian physicist Julius Edgar Lilienfeld on October 22, 1925, but Lilienfeld published no research articles about his devices, and they were ignored by industry. In 1934 German physicist Dr. Oskar Heil patented another field-effect transistor.[2] There is no direct evidence that these devices were built, but later work in the 1990s show that one of Lilienfeld's designs worked as described and gave substantial gain. Legal papers from the Bell Labs patent show that William Shockley and a co-worker at Bell Labs, Gerald Pearson, had built operational versions from Lilienfeld's patents, yet they never referenced this work in any of their later research papers or historical articles.[3]

    I think that you're looking at it the wrong way. It's not the date of the invention that matters but the sweep of the effect. Going back to the internal combustion engine example, it was invented almost a century before anyone built a functional automobile that made use of it. Its last hurrahs were the tank, the airplane, and the motor vessel; since then we've just been tinkering for efficiency.

    The web didn't matter until Mosaic was released in 1993, and it has spawned series of significant innovations ever since. The final judgment of its impact rides on whether the frequency and impact of those aftershock innovations slow to a drip or continue to proliferate.

    To me, the idea that we're anywhere near the end of what ""The Internet" becomes is a giggle.

    I mean, I don't even have voice recognition yet. Can you imagine how this thing works when it's driven by voice? Nor do we have millions of books online yet. And we're just beginning to make the web accessible to us as we move about the world. 

    I'm reminded of the printing press, with Gutenberg and others making the majority of their money, in the early years, printing... papal indulgences. Seems a pretty good parallel to an era when we have to rely on these appalling ads. Lord, hear our prayer!

    Of course we have to take into consideration such things as this when considering the printing press:

    Well, I guess you mean Gordon is looking at it the wrong way. As I read his theory, the longer the sweep, the slower the MFP which seems to mean a greater the divergence between capital and labor components of the MFP. I think that means that it requires more capital investment to do anything that might actually make money.

    Regarding Gordon's idea that the internet is not a Great Invention, I disagree, but I wonder if the net and all that goes with it is a significant enough innovation to punch up the rest of the economy. Also, the internet relies on infrastructure and our leaders don't seem at all interested in infrastructure.

    The Chinese just put up a 15-story hotel in less than a week.

    In general, it's pretty hard to predict what will make a difference. Personally I think the EU is more important than most inventions as a real determinant of efficient social and political and economic organization.

    While the paperless office was promised long ago, many offices (such as mine) now run mostly paperless. Computer-assisted multilingual communication is still in its infancy, even though the important inventions all happened long ago - it takes time for technology to be adopted organically.

    And then there's just being smarter. The BP oil blowout didn't have to happen - it was crass greed and human stupidity. It's doubtful that technology will protect us completely from stupidity. At some point mankind has to grow up.

    Sometimes the best innovation is doing more smarter with what we have than inventing something new. Sometimes the best innovation is an incremental improvement rather than coming up with something completely new. 

    Right now, our problem isn't a lack of speed in innovation. It's our exponential growth in stupid that's rivaling Moore's Law. If we survive the next 20 years, we're likel to turn the corner for good. But I'll be damned if the morons aren't making it one tight race.


    it takes time for technology to be adopted organically.

    It takes even longer for scientific discoveries to become hands on technology.

    There are ways to combat the stupid.

    Heard some author on Ratigan this morning talking about speed-building as some huge boon; trouble is, sometimes you get Crap when your aim is speed.  Probalbly more often than sometimes.

    Stardust....IF I  had a dollar for every Boon I have heard of, I would posting this from the Riviera right now.

    {More Champagne,  dear ?}

    Well, it cuts both ways - the spread of easy housing post-WWII was one of the drivers of our boom, and of course the highway system both made transportation easier and those suburbs grow and urban sprawl.

    Still, the ability to grow and distribute food easier helps prevent the massive famines we used to see, but in places also allows even greater population growth to push the boundaries of reasonableness and resources.

    There are interesting looks at metropolitan areas in Brazil, Africa, India where they're actually pushing new limits of efficiency, even though we like to turn things on its "we'd all be better out in the country" head.

    I don't think Einstein's "every solution creates 20 problems" is a constant equation. The better we get at pre-designing our solutions, the fewer problems, the fewer side effects.

    There are also studies showing when you ask a group of students to create something quickly, vs. another group to create it with quality, the quality of the first group isn't necessarily behind the 2nd.

    And of course the people in China who've moved to the city to find new jobs will appreciate that 15-story apt building whether we like it or not.

    And as Quinn notes, we haven't even begun to really use speech-to-text, text-to-speech, all sorts of recognition, auto-translation, etc.

    One of the reasons casualty rates in Iraq were so low was that field medicine and prosthetics and such has improved so much. Eventually will trickle down to general mankind, where greedy insurance agents will make it all unaffordable... the hope is that in 20 years we'll have balanced out this part, since technology and efficiency and knowledge really should be making all these costs drive downward.

    Your reference to the spread of easy housing post WWII and that hotel in China remind me immediately of the Levitt development on long Is., around 1950. They were churning out 30 houses a day, assembly line style.  Ignoring the GI Bill and other socioeconomic factors, and just zeroing in on the technological characteristics of what made "Levitt Town" achievable, I'm struck by your earlier suggestion of incremental improvements to innovation and Genghis's notion that the sweep of the effect is what matters.  

    Trace the tract house phenomenon back about a hundred years before Levitt to the middle of the nineteenth century.  You'll find the advent of the mass produced wire nail, the framing square and dimentional lumber.  These combined to create the balloon frame, which marked a departure from timber framing and fundamentally changed how carpenters made houses.   In the decades that followed this major innovation, incremental improvements were integrated into the new technology such as pre-cut components, plywood, drywall, concrete.  To finally arive back at Levitt's vision, the incremental changes of the platform frame, the slab on grade, the handheld circular saw and the monotony of slight variation were added to the mix.  Presto.  Millions of these two bedroom, one bath, picture window houses got built, and fast.  

    I'd argue we're still on the arc of the Balloon Frame innovation.  It's the horseless carriage if the timber frame is the horse and buggy.  As Genghis puts it, we're just tinkering with efficiency.  

    Actually the platform frame required fewer hands, and supplanted the balloon frame decades ago. And some big builders assembled entire wall panels and shipped them to the site. 

    I agree.  My point is the balloon frame is the major innovation.  The platform frame is a modification of the balloon frame -- an incremental improvement, that tinkers with efficiencies.  It's not game changer.

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