Results for “no great stagnation” 495 found
Is New Zealand busting out of the Great Stagnation?
Or is this a terrifying novelty for a country which doesn’t have very strict liability law?
…a planned launch of a jetpack in New Zealand next year has bureaucrats scratching their heads, particularly as the machine’s makers say the thing can travel up to 7,000 feet in the air at speeds of 50 miles an hour.
“Think of it like a motorcycle in the sky,” says Peter Coker, chief executive of Martin Aircraft Co. Ltd., which has spent 30 years developing the Martin Jetpack here. The Martin jetpack is unique in that it is not rocket powered but has a gasoline engine driving twin-ducted fans. The latest P12 prototype, a far sleeker and shinier model than the earlier versions, will allow a pilot to fly for up to half an hour.
New Zealand is taking the prospect of jetpacks in its airspace seriously, even though the product’s price—more than $150,000—means that just a few dozen have been reserved. Most of those are going to overseas customers.
And yet there is a problem, even in “regulation light” New Zealand:
“If you land in someone’s paddock, you will always land on their prime sheep,” Mr. Kenny says, stressing that liability insurance for pilots is a must.
…Still up in the air is whether they will eventually be allowed to fly over built-up areas. The latest prototype has been certified for manned test flights in New Zealand, but it can’t be flown more than 20 feet above ground or more than 25 feet above water.
The article has other points of interest. Here are related pieces.
Herbert Simon on stagnation and automation
In his review of a prescient work called The Shape of Automation (1966), by Herbert Simon, a manifold genius who would go on to win the Nobel Prize in Economics, Heilbroner scoffed at Simon’s notion that the average family income would reach $28,000 (in 1966 dollars) after the turn of the century: “He has no doubt that these families will have plenty of use for their entire income. . . . But why stop there? On his assumptions of a three percent annual growth rate, average family incomes will be $56,000 by the year 2025; $112,000 by 2045; and $224,000 a century from today. Is it beyond human nature to think that at this point (or a great deal sooner), a ceiling will have been imposed on demand—if not by edict, then tacitly? To my mind, it is hard not to picture such a ceiling unless the economy is to become a collective vomitorium.”
Simon responded drily that he had “great respect for the ability of human beings—given a little advance warning—to think up reasonable ways” of spending that kind of money, and to do so “without vomiting.” He was right about that, of course, even though he was wrong about the particular numbers. Nobody at the time foresaw the coming stagnation of middle-class incomes. His estimate of the average family income in 2006 translates into more than $200,000 in current dollars.
That is from an excellent piece by Daniel Akst on what we can learn from the automation crises of the 1960s.
Who are the new economic optimists?
Here is a very good discussion by Nelson Schwartz, here is one excerpt:
He is not predicting an imminent resurgence. Like most academic economists, Mr. Cowen focuses on the next quarter-century rather than the next quarter. But new technologies like artificial intelligence and online education, increased domestic energy production and slowing growth in the cost of health care have prompted Mr. Cowen to reappraise the country’s prospects.
“It’s better than it looked,” Mr. Cowen said. “Technological progress comes in batches and it’s just a little more rapid than it looked two years ago.” His next book, “Average Is Over: Powering America Beyond the Age of the Great Stagnation,” is due out in September.
The link is added by me, and the article covers other individuals too. There is also this:
“The great stagnation will end for a lot of people but not everyone,” Mr. Cowen said. “I think there will be great breakthroughs but the distribution of those gains will go to owners of capital and intellectual property.”
The innovations issue of *The New York Times*
You will find it here, and clicking through the side show of previous innovations, and their history, is fascinating. I enjoyed this part of the accompanying write-up from Hugo Lindgren:
On his blog, Marginal Revolution, Cowen furthers his point by declaring sarcastically that “there is no great stagnation” and providing links to silly products or applications of technology, like a machine that tosses popcorn into your mouth from up to 15 feet away. It’s called The Popinator. Someone thought this up — first as a marketing stunt, but now they’re trying to make an actual product. Someone also thought up the Ostrich Pillow, a big, comfy thing that you can stick your head into and nap in public places. My favorite of Cowen’s collection is a gun for shooting salt pellets at insects — the Bug-A-Salt! I also like the remote-controlled cockroach, a technology which has not yet been commercialized. But maybe one day.
Cowen’s point is that under the hood of our hallowed free market is a bazaar of nutty, half-cocked ideas which do not advance the greater cause of humanity one tiny bit. But there’s another interpretation, too, which is: The sheer volume and range of these inventions demonstrate a rapidly growing range of problem solvers with the tools to turn their ideas into tangible things.
You can read about the history of the ant farm here.
What technology exists that most people probably don’t know about & would totally blow their minds?
That is the title of a new Reddit thread, reproduced here. Overall I am not blown away by the nominations and I find few of them in my own everyday life. Here is one example:
ALON – transparent aluminium, you can have a window that don’t break!!!
Here is further information, with photos. Cool enough, but not as good as cheap quality education and health care. And it costs 20k per square meter, at least according to that article.
I’m ready to call the great stagnation over when driverless cars are in the hands of the middle class, but that’s still a while away. Steady deflation for education and health care expenditures would do it too, and I can see this will come for education but not for health care. As for Google Glass, I will review it once they sell me one. I’d also claim the end of stagnation if we saw a 2% yearly rise in the median real wage on a sustained basis, say most of the years out of a ten-year period.
In the meantime, here is a robot which pours you a beer.
For the pointer I thank Max Roser.
On the proper interpretation of “The Great Stagnation”
Will Hutton writes:
At least Summers sees some underlying economic dynamism. For techno-pessimists such as economist Professor Tyler Cowen the future is even darker. It is not only that automation and robotisation are coming, but that there are no new worthwhile transformational technologies for them to automate. All the obvious human needs – to move, to have power, to communicate – have been solved through cars, planes, mobile phones and computers. According to Cowen, we have come to the end of the great “general purpose technologies” (technologies that transform an entire economy, such as the steam engine, electricity, the car and so on) that changed the world. There are no new transformative technologies to carry us forward, while the old activities are being robotised and automated. This is the “Great Stagnation”.
Such views make for a convenient target, but that is not close to what I wrote in The Great Stagnation. For instance on p.83 you will find me proclaiming, after several pages of details, “For these reasons, I am optimistic about getting some future low-hanging fruit.” Those are not Straussian passages hidden like the extra Nirvana audio track at the end of Nevermind. The very subtitle of the book announces “How America…(Eventually) Will Feel Better Again.”
I also argue in the book that the internet is the next transformational technology, and that it is already here, though it needs some time to mature and pay off. I devoted an entire separate book to this theme, namely The Age of the Infovore, which suggests that for autistics and other infovores massive progress already has arrived.
It is also odd that Hutton mentions robots and automation. My next book considers those factors in great detail, but you won’t find either term or variants thereof in the index of The Great Stagnation. Nor do I have the dual worry that both everything will be automated and there is nothing left to automate, as stated by Hutton.
The lesson perhaps is that if a book has a pessimistic-sounding title, mentions of optimism will go unheeded, even if they are in the subtitle. Might that be an example of the fallacy of mood affiliation?
A Marxist take on “the great stagnation”
From Will Davies:
Wandering around Stratford Westfield the other day, I had a similar but more pessimistic thought: maybe capitalism is gradually morphing into the ‘actually existing’ state socialism of the old Eastern Bloc. (For international readers, Stratford Westfield is a vast shopping centre that was strategically located between the 2012 Olympic Park and the nearest train station, in the hope of rinsing unfortunate athletics fans for some cashen route to the games.) British capitalism already has many of the hallmarks of Brezhnev-era socialist decline: macroeconomic stagnation, a population as much too bored as scared to protest about very much, a state that performs tongue-in-cheek legitimacy, politicians playing with statistics to try and delay the moment of economic reckoning.
…My feeling is (and I discuss this in a book I’m just finishing) that neoliberalism has entered a post-critical, repetitive phase, in which certain things have to be spoken – delivery, efficiency, security, competitiveness – but in order to hold the edifice together, rather than to reveal anything as objectively ‘delivered’, ‘efficient’, ‘secure’ or ‘competitive. Political systems which do not create space for critique encounter this need for mandatory repetition immediately, as occurred to state socialism.
Eastern bloc socialism had to keep going through the 1970s and 80s, in spite of lagging growth and failed ideological hegemony, because nobody knew what else to do. This is the stage neoliberal policy-making has now reached. The difference is that there is still one area of our economy that is still moving and changing, namely the money economy, with corporate profits high and financial innovation ongoing. What seems to have changed, post-2008, is that the price paid for this monetary dynamism is that the rest of us all have to stand completely still. In order that ‘they’ in the banks can cling on to their modernity of liquidity and ultra-fast turnover, ‘we’ outside have to relinquish our modernity, of a future that is any different from the present. Finance is to our stagnant societies what the space race and the Cold War were to the Eastern Bloc countries of the 1970s and 80s – a huge cost that the state imposes on its public, with the result that cities and economies start to become tedious processions of the same.
The link is here (good photos), and the underlying Potlatch blog is here. The blog has plenty of interest, and this is an amusing post about advertising.
Acemoglu and Robinson on the great stagnation
Two things are absent in this debate, however.
First, much evidence shows that what determines technological innovations isn’t some sort of “exogenous innovation capacity,” but incentives…
Schmookler illustrated these ideas vividly with the example of the horseshoe. He documented that there was a very high rate of innovation leading to improvements in the horseshoe throughout the late 19th and early 20th centuries because the increased demand for transport meant increased demand for better and cheaper horseshoes. It didn’t look like there was any sort of limit to the improvements or any evidence of an “exogenous innovation capacity” in this ancient technology, which had been around since 2nd century BC. Then suddenly, innovations came to an end, but this had nothing to do with running out of low hanging fruit. Instead, as Schmookler put it (p. 93), it was because the incentives to innovate in this technology disappeared because “the steam traction engine and, later, internal combustion engine began to displace the horse… “
Their full post is here.
I have changed my mind on this issue quite a bit over the last four to five years. Yes incentives matter, but outside of extreme environments are changes in incentives explaining the changes in what we observe? I now think it is of critical importance where a sector or economy is on “the innovation curve.” It was easier to innovate in game theory in the 1980s than it is today, even though the salaries of top economists have risen significantly. The pharmaceuticals market is larger than ever before, and yet the pipeline is largely dry. We are simply at a point where further breakthroughs are hard (and it is not obvious that FDA innovation taxes are getting worse over this period of change.) Weren’t so many inventors of the 19th century largely “yahoos,” with no fancy degrees, relatively low pay, little or no peer review, not at the peak of the Flynn effect, and so on, and yet they were on a fruitful part of the innovation curve and performed wonders.
I think in terms of general purpose technologies and platform-like breakthroughs. Once you get them, innovation runs wild, otherwise it is tough sledding, with incentives still accounting for some of the variation within a particular place on the innovation curve.
Is there a great stagnation in action movies?
Chris MacDonald asks me:
Should we expect stagnation, or continued improvement, in the action film genre? The new Bond flick, Skyfall, is getting rave reviews, with some calling it the best Bond film ever. Hyperbole aside, it is indeed very good. Should we expect the next Bond film to be less good (regression to the mean) or is this one of the fields — like baseball management — where mechanisms exist to facilitate further improvement on a fairly reliable basis?
I was less crazy about Skyfall (“M, pull out your cell phone and call for aid!”) but that’s neither here nor there.
As for the stagnation issue, there are two main developments. The first is a resurrection of sorts, namely 3-D, which is a very real gain, but in my view it is a significant plus for fewer than ten movies, most notably Avatar.
CGI is a gain for some movies (e.g, Troy, Life of Pi, Lord of the Rings), though it often makes action scenes less visceral and more distant.
The main drawback for Hollywood action movies has been globalization, which leads to too many explosions and not enough subtle dialogue and characterization. The other main drawback has been high marketing costs, which encourages tent pole franchises with prior name recognition with a core audience. That often means too much clunky plot exposition, too many comic book characters, too great a need to heed the wishes of the hard core audience base, and too few surprises about the characters. There is one very good Spiderman movie but overall I call this trend a negative.
Still, there has been major progress in action movies, at least if we are willing to accept a particular semantic switch. I much prefer Goldfinger to the newer Bond movies, but I also don’t think of it as an action movie. It doesn’t have much action, although I don’t think people at the time felt that way. By my possibly distorted standards, the Bond movies start being action movies only with Diamonds are Forever.
King Solomon’s Mines is a very good movie, under-watched these days, as is Thief of Baghdad. Nonetheless prior to the 1970s I think of the action genre as virtually non-existent. I was stunned when I first (1981) saw the opening scene of Raiders of the Lost Ark, though these days it isn’t especially impressive, just well-executed.
One possibility is that each generation thinks it is the first to have had action movies.
To sum up, for all of the contemporary excess, we have been living in a Golden Age of Action Movies. Even a scorned movie such as Lara Croft is pretty awesome on the big screen. And Asian action movies have reached their peaks only in the last twenty years, including early John Woo. Call that the plus side of the globalization equation.
That said, a few impressive 3-D movies aside, the last five years have brought more negatives than positives, a’la “Transformers” and various overinflated, noisy, character-stuffed, and self-important Hollywood monstrosities. We’ll get over it, but in reality stagnation is something we might have wished for instead.
Here is one list of the greatest action movies of all time. Not many pre-70s movies can stand up to these for action.
The next trend will be RCT-like audience studies to find out exactly which action tricks, with which timings, thrill us and which do not. Great directors have an intuitive sense for this but it could be made much more scientific.
The North Korean productivity miracle
…brewing remains just about the only useful activity at which North Korea beats the South. The North’s Taedonggang Beer, made with equipment imported from Britain, tastes surprisingly good.
That is from The Economist, I cannot confirm this judgment. Furthermore there is no North Korean great stagnation:
Talking to CNN, a South Korea government official showed the apparently innocent objects that the killer was planning to use to kill Park Sang-hak on the streets of Seoul. Two of them were pens, which apparently are standard issue among North Korean secret agents. The first kills on contact, injecting quickly a poison that paralyzes the victim and kills it within seconds. The second one fires one single bullet, a tiny projectile which is also filled with a killing venom.
But those two were well known by the South Korean’s intelligence agency. The third weapon, however, is completely new to them: a flashlight that has three holes. Each hole is actually gun barrel, which gets activated with the push of a button. One click and boom, you are dead.
The article, with photos, is here. And North Korea may soon be launching long-range missiles.
For the pointer on the first item I thank Nick Slepko.
The Great Stagnation in the UK seems to start at around 2000
Here are other indicators of ongoing economic stagnation in the UK, and you can download the full report here. Wages for much of the developed world perform quite poorly after 2000 or so.
For the pointer I thank Alex.
There is a great stagnation
Singapore Airlines Ltd. (SIA) will end non-stop services to Newark, the world’s longest commercial flight, next year as it phases out the aging planes used on the route.
The all-business-class flights will end in the fourth- quarter of next year, along with similar services to Los Angeles, the airline said in a statement yesterday, as it announced an order for 25 Airbus SAS aircraft. The Toulouse- based planemaker will acquire the five four-engine A340-500s used on the non-stop routes as part of the deal.
The end of the almost 19-hour service to Newark will lengthen Singapore travelers’ trip by more than three hours as they will have to change planes in London.
Here is more, and note that the new aircraft are designed to serve the budget market in the future.
Is the Great Mirror Stagnation over?
“There hasn’t been much innovation with the mirror,” said Ming-Zher Poh, who, as a graduate student at the Massachusetts Institute of Technology, developed a bio-sensing system called the Medical Mirror.
Introduced in 2010, the Medical Mirror uses a camera to measure a person’s pulse rate based on slight variations in the brightness of the face as blood flows each time the heart pumps. A two-way mirror creates a reflection while keeping visible the pulse reading on a computer monitor behind the mirror’s surface.
And this:
Japanese electronics conglomerate Panasonic Corp. initially considered targeting household consumers with its digital mirror—a flat-screen display powered by a computer behind a two-way mirror—but the company decided to target business customers instead because of the price.
In July, Panasonic started accepting orders for its mirror—priced at nearly Y3 million ($38,000)—targeting physical rehabilitation centers.
At the Yokohama Rehabilitation Center in Japan, a test site for the device, 77-year-old Takao Yamamura uses the digital mirror to rehabilitate after suffering extensive nerve damage following a spinal cord infarction.
The full article is here. One problem is that consumers do not buy new mirrors very often, plus they are used to prices below $38k.
The Great Rice Stagnation
…the rice yield per hectare in Japan, after climbing for more than a century, has not increased at all over the last 17 years. It is not that Japanese farmers do not want to continue raising their rice yields. They do. With a domestic support price far above the world market price, raising yields in Japan is highly profitable . The problem is that Japan’s farmers are already using all the technologies available to raise land productivity.
Like Japan, South Korea’s rice yield also has plateaued.
…Rice yields in Chin are now very close to those in Japan. Unless Chinese farmers can somehow surpass their Japanese counterparts, which seems unlikely, China’s rice yields appear about to plateau. If China hits the glass ceiling for its rice yields, then one third of the world’s rice would be produced in three countries (Japan, South Korea, and China) that can no longer raise land productivity or expand the area in rice.
That is from the new, excellent and to the point Full Planet, Empty Plates: The New Geopolitics of Food Scarcity, by Lester R. Brown.
*Innovation Economics*
That is the new book by Rob Atkinson and Stephen Ezell. It is far more mercantilist than I feel comfortable with, yet it is full of information and argumentation, and it is a book one can profitably engage with. Here is one excerpt:
The largely consensus view among U.S. economic elites is that the massive U.S. job loss in manufacturing is simply a reflection of manufacturing doing well: using technology to automate work and to become more efficient. It’s the agriculture story they tell us…
There are two big problems with this view. The first is that it is not supported by the official government data. In fact, U.S. manufacturing lost jobs much faster in the 2000s than in the 1990s, even though productivity growth was similar during the two decades. In the 1990s, U.S. manufacturing employment fell 1 percent, while productivity increased 56 percent. Yet, in the 2000s, manufacturing employment fell 32 percent while productivity increased only slightly faster, 61 percent. So, clearly, higher productivity was not the main cause of the manufacturing employment collapse.
As Michael Mandel has pointed out repeatedly, there are also problems with the data, and here are our authors on that point:
…a closer look reveals that every durable goods industry grew more slowly in output than GDP except one: computer/electronics which grew a whopping 720 percent faster than GDP…To put this in perspective, this one sector accounted for 113 percent of U.S. manufacturing output growth in the 2000s, even though, in 1997, it accounted for just 12 percent of manufacturing output.
Note that a lot of this measured growth is quality improvement in computers, rather than growth of the sector in the traditional sense of having a rapidly expanding industry. Employment in that sector fell. The performance of the other manufacturing sectors is not so impressive:
…during 2001-2010, manufacturing minus computers actually lost 6 percent of its value-added. Output of the electrical equipment and wood products industries declined by 7 percent, plastics by 8 percent, fabricated metals by 10 percent, printing by 12 percent, furniture by 19 percent, nonmetallic minerals and primary metals and paper by 31 percent, apparel by 34 percent, and textiles and motor vehicles by 39 percent. In other words, thirteen manufacturing sector that made up 58 percent of U.S. manufacturing employment all produced less in 2010 than in 2001, all at a time when the overall economy grew 15.8 percent.
I suppose you could say that education and health care have in fact seen striking advances in productivity during this period. Or you could recall my portrait in The Great Stagnation of an economy which has only a very small number of dynamic sectors, with computers of course in the lead. Overall it is not a pretty picture.