Krugman: Internet’s Economic Impact No Greater Than Fax Machine (1998) • Hacker News Board

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

#31

Post by mempko » Mon, Dec 19, 2016, 5:03 PM UTC

snrplfth wrote: post #24

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, bu…

I think this is definitely something easily forgotten. And it's still a huge problem for both the data center and the computer in your pocket. Makes you wonder if we got off fossil fuels like two decades ago what the progress here would look like here.

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

#32

Post by ZeroGravitas » Mon, Dec 19, 2016, 5:04 PM UTC

This is similar to the Robert Solow's 1987 quip, "You can see the computer age everywhere but in the productivity statistics."

Is a big part of this what exactly economists are measuring, and either they're right and we're just too close to see it, or they're missing important stuff when they measure.

And to be fair, I think the fax was pretty big in it's day for business to business communication.

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

#33

Post by cema » Mon, Dec 19, 2016, 5:05 PM UTC

jokoon wrote: post #29

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…

  This article was written before the net bubble.

I think it was in fact written during the big bubble, although my memory may be a bit off. I do remember distinctly having read (and chuckled at) an article by a supposedly serious economist who said something along these lines, but I absolutely do not remember if it was the same article. And the same economist. Krugman's name did not ring a bell for me then.

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

#34

Post by Jtsummers » Mon, Dec 19, 2016, 5:07 PM UTC

otaviokz wrote: post #26

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.

> "a fun, let's make some provocative predictions type article" sounds like something very unprofessional to me.

Knuth was published in the very unprofessional Mad Magazine. What's your point?

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

#35

Post by forgetsusername » Mon, Dec 19, 2016, 5:11 PM UTC

colordrops wrote: post #30

Despite his impressive pedigree, Paul Krugman is more of a political mouthpiece than an economist. His regular opinion pieces in the New York times or frequently abrasive and wrong.

>Despite his impressive pedigree, Paul Krugman is more of a political mouthpiece than an economist.

That's easy to say if all you read are his opinion pieces rather than his academic work.

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

#36

Post by ZeroGravitas » Mon, Dec 19, 2016, 5:12 PM UTC

drzaiusapelord wrote: post #18

adamnemecek wrote: post #6

Also "Why the web won't be a nirvana" http://www.newsweek.com/clifford-stoll-why-web-wont-be-nirva...

>What the Internet hucksters won't tell you is that the Internet is one big ocean of unedited data, without any pretense of completeness. Lacking editors, reviewers or critics, the Internet has become a wasteland of unfiltered data. You don't know what to ignore and what's worth reading. Except he's correct. The web has become a disinformation, fake news, and conspiracy theory bonanza. Finding good information still…

> The web has become a disinformation, fake news, and conspiracy theory bonanza.

By analogy to "net-negative producers" at what point do the conspiracy theories incubated by the internet detract from it's good points enough that it is overall negative, or perhaps only as positive as say, the fax machine?

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

#37

Post by lucozade » Mon, Dec 19, 2016, 5:14 PM UTC

richieb wrote: post #7

forgingahead wrote: post #5

While this is highly embarrassing for Krugman (even if he will never admit it!), he is far from the only person who has fallen for this: Expertise in one area does NOT make you an expert in all. This year especially should drive that point home. It's best to only make bold statements when you are sure, and when you do so, put your money where your mouth is ("Skin in the game", as Nassim Taleb says). And most definite…

I think he does admit his mistakes: http://krugman.blogs.nytimes.com/2010/09/01/mistakes/

He doesn't consider that he made a mistake re fax machines. Essentially, he says he was taken out of context [0].

[0] http://www.businessinsider.com/paul-krugman-responds-to-inte...

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

#38

Post by hyperpape » Mon, Dec 19, 2016, 5:14 PM UTC

While this article is probably wrong (I don't know what the economic impact of the fax machine was, but I suspect a lot smaller than the Internet), we should probably all be asking ourselves whether the economic impact of our industry is really all that big.

Looking at the profit of companies like Google and Facebook overstates the impact for them. They are making tons of money, but a lot of that is just a shift in the location of advertising dollars. Amazon has lowered prices, and there's real economic impact there, but what is the actual percentage?

In my current line of work, transportation management software, we're giving companies tools to be more efficient and reduce their freight expenditure, but the reductions are really very modest--good enough to keep customers happy, but nothing revolutionary. That seems to be the pattern for an awful lot of software: if you can beat an established industry by a little bit, that's enough for a business, but that's not the kind of revolution that you'd think there is listening to people hyping startups.

And if you think I'm wrong, ask yourself why GDP growth has been so anemic in the age of the Internet.

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

#39

Post by forgetsusername » Mon, Dec 19, 2016, 5:15 PM UTC

rm_-rf_slash wrote: post #21

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…

>It's kind of unfair to point and laugh at the person who didn't predict the future correctly.

If you're going to put your predictions out there in the public sphere as an influencer, then I think it's fair (in fact necessary) to judge people on those predictions and their record.

However, I doubt many of us would do better if held to the same level of scrutiny. Two examples from these boards: Dropbox ("it sucks!") and Theranos ("game-changing!") would embarass at least a few of us.

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

#40

Post by Jtsummers » Mon, Dec 19, 2016, 5:16 PM UTC

cema wrote: post #33

jokoon wrote: post #29

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…

This article was written before the net bubble. I think it was in fact written during the big bubble, although my memory may be a bit off. I do remember distinctly having read (and chuckled at) an article by a supposedly serious economist who said something along these lines, but I absolutely do not remember if it was the same article. And the same economist. Krugman's name did not ring a bell for me then.

You are correct. 1998 is the year of Pets.com and many other internet bubble ventures. Which led to a surge in CS enrollment from ~1999-2005 which really, really sucked for those of us that actually wanted to study CS and weren't in it "for the money". The professional/academic feedback loop also managed to catch me when I tried going to graduate school (again, actually interested in it) and found myself surrounded by people who were in grad school to ride out the (then) downturn in the internet-based business sector (circa 2006). Enrollment numbers were sky high in grad programs so competition for advisors and TA positions was much harder than normal. Very frustrating times.