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Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998)

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Re: Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998)

#21

Post by rm_-rf_slash »

It's kind of unfair to point and laugh at the person who didn't predict the future correctly. I don't think anybody could have foreseen the interactive potential for the internet.

The internet encompasses vast video game experiences, nearly realtime communication from politicians and public figures (without hauling around a C-SPAN 2 camera team), and has even taken on a life of its own with YouTube stars and internet celebrities, completely bypassing the traditional media channels that were usually dominated by the whims of their producers.

Even now I think our impression of the internet is roughly in line with the people of the early 20th century who could not have begun to imagine the vast possibilities provided by mass electrification.

Re: Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998)

#22

Post by wyldfire »

mtgx wrote: post #2

> The growth of the Internet will slow drastically, as the flaw in "Metcalfe's law"--which states that the number of potential connections in a network is proportional to the square of the number of participants--becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's. Every time I read on…

> most people have nothing to say to each other

I think this was more of a confirmation of Metcalfe's Law than anything else. Folks didn't use email (etc) as much in 1998 because it was less likely that your recipient would read it before you might contact them otherwise via phone or other method. No one sent email because no one checked email because the utility of the network wasn't there. As Metcalfe's Law predicts, the utility of the network was climbing steeply but just hadn't hit the inflection point where you could expect ubiquity.

Re: Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998)

#24

Post by snrplfth »

mempko wrote: post #9

While he is wrong about the impact of the internet economically. He isn't wrong that technology progress has been disappointing. When you grow up believing you will be driving flying cars and seeing robots help you around the house, how else are you supposed to feel? It is only now that computing power has started to enable old AI techniques such as neural nets, which were once impractical are now starting to be reas…

One of the big problems with people's expectations was, perhaps, a sense that technological progress would involve ever-greater energies, sizes, velocities. This certainly would have made sense in 1967, but what's been done since then has so much to do with using less energy to do more. There's so much to do in computation, biosciences, materials science, and so on - it doesn't look big and impressive necessarily, but it's still major progress.

Re: Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998)

#25

Post by Torgo »

sgwealti wrote: post #14

Paul Krugman responded to this a few years ago: http://www.businessinsider.com/paul-krugman-responds-to-inte... The article the economic impact of the internet quote came from wasn't a scholarly article or his normal column, it was a fun, let's make some provocative predictions type article.

His normal column hasn't been much better, for years now.

Re: Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998)

#26

Post by otaviokz »

sgwealti wrote: post #14

Paul Krugman responded to this a few years ago: http://www.businessinsider.com/paul-krugman-responds-to-inte... The article the economic impact of the internet quote came from wasn't a scholarly article or his normal column, it was a fun, let's make some provocative predictions type article.

A "a fun, let's make some provocative predictions type article" sounds like something very unprofessional to me. Also there seems to be a suspicious pattern of claiming exactly that after such an embarrassing prediction is made. I doubt the same would be claimed if he had happened to be right about the internet and the information economy.

Re: Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998)

#27

Post by tps5 »

Torgo wrote: post #25
sgwealti wrote: post #14

Paul Krugman responded to this a few years ago: http://www.businessinsider.com/paul-krugman-responds-to-inte... The article the economic impact of the internet quote came from wasn't a scholarly article or his normal column, it was a fun, let's make some provocative predictions type article.

His normal column hasn't been much better, for years now.

It's a mystery to me how he's gotten away with handing in what amounts to the same column every week for the past couple years.

Whether I agree with him or not, I find his haughty, didactic tone very off-putting.

Re: Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998)

#28

Post by [deleted] »

rplst8 wrote: post #19
mempko wrote: post #9

While he is wrong about the impact of the internet economically. He isn't wrong that technology progress has been disappointing. When you grow up believing you will be driving flying cars and seeing robots help you around the house, how else are you supposed to feel? It is only now that computing power has started to enable old AI techniques such as neural nets, which were once impractical are now starting to be reas…

> We have invented the most important tool in the history of humanity and it's being used by billions of people to look at Facebook instead of say, solving real problems like climate change. I think this is a mis-characterization. The Internet is used for all sorts of "good" causes. I think we just take for granted the ease with which it allows teams of scientists and researchers to connect, communicate, and share re…

[deleted]

Re: Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998)

#29

Post by jokoon »

I'm still curious to know what are the "Internet Economic Impact".

This article was written before the net bubble.

So far all I see in the economics of internet is netflix replacing DVDs, twitter/facebook/online presence (which is advertising, which means little to me), and... that's it. Other domains like online gaming are not that great in term of economic impact.

Amazon is closing book and movie stores.

I can see that the internet changed many things, but was it improvement? I don't know. When you account music and movie piracy, credit card fraud, scammers, online security, it doesn't seem so great.

The only improvements I can see is porn (being able to channel your sexuality) and dating websites (more people being able to risk a little more to find somebody).

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