Sentences to ponder

From Nemo:

As the economy moves to cheap, scalable hardware production and the only things that are scarce are good ideas (technology, design) and human attention (clicks, impressions, brands) the whole mindset of growth driven capitalism in Asia is going to be in for a profoundly rude awakening. All those rentier assets will not be worth much anymore and the ability of the state or a couple of tycoons to control the commanding heights of an economy will be profoundly impaired by the lack of commanding heights more than anything else. Even more terrifyingly the prevailing model of intermediated financial markets with commercial banks front and centre will create incredible risks as banks do what they did previously and lend to capital intensive “stuff” businesses that do not generate much value. We may at some point develop wants and desires that are capital and credit intensive – the colonization of space perhaps – but it is a long way off just yet.

Overall the post is about “the decline of stuff,” and the source was retweeted by Izabella Kaminska.

Comments

Wow. Somebody on the Internet dares contradict Seth Godin's "ideas are worthless" stance?

With cheap, scalable hardware production, it is indeed the case that the bureaucracies that manage this hardware will no longer be scarce.

It might be worth worrying about land, rare earth metals, and energy, though.

No, it's wireless spectrum. Wireless spectrum is like gold, except it pays a return.

And there's a mountain of it being wasted by broadcast TV. Broadcast TV is like print media and physical telephone books -- it's a doomed artifact of the 20th century. Somehow, somebody is going to figure out how to liberate all that spectrum from those squatters.

You are probably correct that the market value of the spectrum that broadcast TV is sitting on is probably larger than the total value of broadcast TV.

It might be worth worrying about land, rare earth metals, and energy...

Land and and rare earth metals are only scarce if we are limited to this planet. Energy is not scarce. Sources of (relatively) easy-to-obtain, readily-stored energy (fuel) are becoming scarce.

Only Asia?

Far from heralding a bright new future of an idea-centered economy, this simply describes the consequences of the over-regulation of "stuff" in the frontier economies.

Nemo nonsense.

"Scarcity" always extends across the spectrum of human existence. Human wants & needs are unlimited, but the resources to fulfill them are always severely limited.
That's fundamental to economics.

Also, economies-of-scale have not & will not disappear. Large enterprises must be managed (commanded ?) by someone.

The socialized banking system is already terrifying -- because it lends heavily to governments (not businesses)-- "that do not generate much value".

Colonization of Space is total looney tunes.

Resources always severely limited and human needs are unlimited? I can afford more food than I can possibly ever eat, and that's true of everyone I know. What are you on about?

And the large enterprises are for what, exactly? Don't say economies of scale when the typical large multinational is an expensive and unproductive exercise in egotism and attention-deficit disorder. A combination of information technology and open marketplaces can provide economies of scale to even the smallest of players, and will do so.

And I dearly hope you won't be too disappointed by the enormous contribution private space exploration will be making to the global economy in the future.

Some reasonable points, but there's also more than a bit of "unrepresentative young urbanite over-extrapolating from personal experience" in the piece. There's no doubt that electronics have 'de-materialized' certain select categories of stuff (books, newspapers, magazines, CDs, DVDs, film, maps), but that process has been over for a few years, and there are no obvious additional categories that are likely to be similarly de-materialized in the near future. I'm sure it is true that we consume considerably less steel, aluminum, glass. etc than our parents (though not fewer clothes and shoes), but that's not because we're doing without categories of stuff that they had (with the exception of books, etc) but because our new stuff is a lot lighter, durable, and more efficient than their equivalent old stuff (here I'm thinking of cars and appliances particularly). But, again, that process is already quite far along--additional huge gains don't seem very likely.

Greenspan once remarked that the actual weight of the economy had not changed much over the long run (I don't recall the definition of long term in this context--but many decades at least). I wonder if this is changing.

From Greenspan himself:
http://online.wsj.com/article/SB927152422854765260.html

Ideas are scarce because I sell ideas. What others do is plentiful and has no value and future.

Hapless young boy. Where does he think his fancy LTE data throughput comes from? They spend billions on these towers and data centers.

I love it when the comments save me having to read the article.

Some reasonable points, but there’s also more than a bit of “unrepresentative young urbanite over-extrapolating from personal experience” in the piece.

Actually he's a finance guy. So he's not even representative of contemporary young urbanites.

Young urbanites who enter their 30s and decide they finally want to grow up and do something real like have kids and raise a family find that they have to leave the city and get "real jobs" rather than be graphic designers or something to afford families.

Most young urbanites are not financiers who are among the few service workers in urban areas that can afford things like urban real estate and forming and raising families in urban areas.

Like I said, he's in finance, and people in finance are among the few service workers in urban areas that can afford significant "stuff" like urban real estate and families. Relative to most urban service workers, he has plenty of "stuff", so the idea of the "End of Stuff" seems perfectly reasonable to him.

Of course all this "stuff" is in short supply for most young urbanites in the service sector, and they have to leave cities if they want to afford "stuff" like families.

Maybe what he's saying is that young urbanites shouldn't consume "stuff". They should just be urban homosexuals, cat ladies, sterile/low fertility couples, etc. and leave the "stuff" for the few service sector workers that can afford it, like financiers.

But in that case it's not the "End of Stuff". It's the end of young urbanites, or the demographics that supply the young urbanites, who won't reproduce themselves.

Agree on spectrum - its a tight market and why Clearwire was so valuable. Rare earths are a mixed bag - some have strong substitutes others do not. Viz energy don't look at Tesla, look at pricing of the Nissan Leaf or Chevy Volt. Coming down and jvs like GM/Envia look promising. That combined with silly cheap solar closes most of the transport/utility loop.

As for whether I am gay and subsist on iTunes and gawker alone and therefore irrelevant let me ask you this: what will be more representative of human experience in the next 50 years: the Asia / EM megacity or suburban Texas?

Nobody said you were gay or that you "subsist on iTunes and gawker alone".

I said precisely the opposite: that you're in finance, and that people in finance are among the few service workers in urban areas that can afford significant “stuff” like urban real estate and families. Relative to most urban service workers, you have “stuff”, so the idea of the “End of Stuff” seems perfectly reasonable to you.

But it’s not the “End of Stuff”. It’s the end of young urbanites, and the demographics that supply the young urbanites, who won’t be able to reproduce themselves.

The options are quite simple for most young urbanites: either escape the cities to try to obtain real "stuff" like families, or be urban homosexuals, cat ladies, sterile/low fertility couples, etc. and leave the “stuff” for the few service sector workers that can afford it, like financiers.

This is bizarre: neither families nor real estate are manufactured goods ("stuff"). Manufactured stuff is incredibly cheap compared to desirable living space and the rising costs of food and fuel.

Viz families and big cities there are plenty of families in big cities in Asia. Eventually the US may get to the point where workers choose proximity to labor markets over white picket fences, who knows? Its a possibility explored in Tyler's new book which I enjoyed. Plenty of high income people in HK do fine with 1500 square feet. As for food and fuel, I'll blog about that shortly. I'm not convinced this is as self evident an inflationary spiral as some would believe.

Hong Kong has the lowest fertility rate in the world. The other big cities in Asia have among the lowest.

Families and real estate require "stuff". "Living space" and food and energy require "stuff".

It'd be nice if a Perl script could produce more "living space" but unfortunately that just isn't the case.

Gents, lets get down to brass tacks...

To save Atomic Capitalism, conservatives should preach and practice Digital Socialism:

http://www.morganwarstler.com/post/35224055375/digital-socialism-atomic-capitalism

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