Robert Gordon

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pages: 72 words: 21,361

Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy by Erik Brynjolfsson

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Amazon Mechanical Turk, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, business process, call centre, combinatorial explosion, corporate governance, crowdsourcing, David Ricardo: comparative advantage, easy for humans, difficult for computers, Erik Brynjolfsson, factory automation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, hiring and firing, income inequality, job automation, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, Kickstarter, knowledge worker, labour mobility, Loebner Prize, low skilled workers, minimum wage unemployment, patent troll, pattern recognition, Ray Kurzweil, rising living standards, Robert Gordon, self-driving car, shareholder value, Skype, too big to fail, Turing test, Tyler Cowen: Great Stagnation, Watson beat the top human players on Jeopardy!, winner-take-all economy

Davis, Jason Faberman, and John Haltiwanger found that recruiting intensity per job opening has plummeted during the past decade as well. Employers just don’t seem to have the same demand for labor that they once did. This reflects a pattern that was noticeable in the “jobless recovery” of the early 1990s, but that has worsened after each of the two recessions since then. Economists Menzie Chinn and Robert Gordon, in separate analyses, find that the venerable relationship between output and employment known as Okun’s Law has been amended. Historically, increased output meant increased employment, but the recent recovery created much less employment than predicted; GDP rebounded but jobs didn't. The historically strong relationship between changes in GDP and changes in employment appears to have weakened as digital technology has become more pervasive and powerful.

In addition, Mona Masghati and Maya Bustan helped Andy a great deal with his research, and Heekyung Kim and Jonathan Sidi did the same for Erik. We are grateful for conversations on technology and employment with our MIT colleagues, including Daron Acemoglu, David Autor, Frank Levy, Tod Loofbourrow, Thomas Malone, Stuart Madnick, Wanda Orlikowski, Michael Schrage, Peter Weill, and Irving Wladawsky-Berger. In addition, Rob Atkinson, Yannis Bakos, Susanto Basu, Menzie Chinn, Robert Gordon, Lorin Hitt, Rob Huckman, Michael Mandel, Dan Snow, Zeynep Ton and Marshall van Alstyne were very generous with their insights. We also benefited greatly from talking with people in industry who are making and using incredible technologies, including Rod Brooks, Paul Hofmann Ray Kurzweil, Ike Nassi, and Hal Varian. We presented some of the ideas contained here to seminar audiences at MIT, Harvard Business School, Northwestern, NYU, UC/Irvine, USC’s Annenberg School, SAP, McKinsey, and the Information Technology and Innovation Foundation.

 

pages: 429 words: 114,726

The Computer Boys Take Over: Computers, Programmers, and the Politics of Technical Expertise by Nathan L. Ensmenger

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barriers to entry, business process, Claude Shannon: information theory, computer age, deskilling, Firefox, Frederick Winslow Taylor, future of work, Grace Hopper, informal economy, information retrieval, interchangeable parts, Isaac Newton, Jacquard loom, Jacquard loom, job satisfaction, John von Neumann, knowledge worker, loose coupling, new economy, Norbert Wiener, pattern recognition, performance metric, post-industrial society, Productivity paradox, RAND corporation, Robert Gordon, sorting algorithm, Steve Jobs, Steven Levy, the market place, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Turing machine, Von Neumann architecture, Y2K

David, cited in Randall and Buxton, Software Engineering, 33. 50. Robert Gordon, “Personnel Selection,” in Data Processing, Practically Speaking, ed. Stanley Naftaly and Fred Gruenberger (Los Angeles: Data Processing Digest, 1967), 88. 51. Joseph O’Shields, “Selection of EDP Personnel,” Personnel Journal 44, no. 9 (1965): 472. 52. Perry and Cannon, “Vocational Interests of Computer Programmers.” 53. Richard Brandon, “The Problem in Perspective,” in Proceedings of the 1968 23rd ACM National Conference (New York: ACM Press, 1968), 332–334. 54. “Office Robots,” Fortune 45, January 1952, 114. 55. See, for example, Gerald Weinberger, The Psychology of Computer Programming (New York: Von Nostrand Rheinhold, 1971). 56. Bylinsky, “Help Wanted: 50,000 Programmers,” 141. 57. Lecht, The Management of Computer Programming Projects, 9. 58. Robert Gordon, “Review of Charles Lecht, The Management of Computer Programmers,” Datamation 14, no. 4 (1968): 200. 59.

They are still being held at bay by the computer people’s major weapon—the snow job.”100 Computer department staffs, although “they may be superbly equipped, technically speaking, to respond to management’s expectations,” are “seldom strategically placed (or managerially trained)—to fully assess the economics of operations or to judge operational feasibility.”101 Only the restorations of the proper balance between computer personnel and managers could save the software projects from a descent into “unprogrammed and devastating chaos.”102 The Road to Garmisch In the late 1960s, new perspectives on the problem of programmer management began to appear in the industry literature. “There is a vast amount of evidence to indicate that writing—a large part of programming is writing after all, albeit in a special language for a very restricted audience—can be planned, scheduled and controlled, nearly all of which has been flagrantly ignored by both programmers and their managers,” argued Robert Gordon in 1968 in a review of contemporary software development practices.103 Although it was admittedly true “that programming a computer is more an art than a science, that in some of its aspects it is a creative process,” this new perspective on software management suggested that “as a matter of fact, a modicum of intelligent effort can provide a very satisfactory degree of control.”104 It was the NATO Conference on Software Engineering in 1968 that irrevocably established software management as one of the central rhetorical cornerstones of all future debates about the nature and causes of the software crisis.

Allan Tucker, Programming Languages (Reading, MA: Addison-Wesley, 1977). 42. Ben Shneiderman, “The Relationship between COBOL and Computer Science,” Annals of the History of Computing 7, no. 4 (1985): 350. 43. Ibid., 351. 44. John Golda, “The Effects of Computer Technology on the Traditional Role of Management” (master’s thesis, Wharton School of Business, University of Pennsylvania, 1965), 34, 85; Robert Gordon, “Personnel Selection,” in Data Processing, Practically Speaking (1967), 34, 85. 45. Alan Perlis, cited in Wexelblat, History of Programming Languages, 60. 46. Alan Perlis, cited in ibid., 82. 47. “Angels, Pins, and Language Standards,” Datamation 9, no. 4 (1963): 23–25. 48. Jack Little, cited in RAND Symposium, “On Programming Languages, Part II,” 29–30. 49. Bernard Galler, cited in ibid., 27. 50.

 

pages: 403 words: 105,431

The death and life of the great American school system: how testing and choice are undermining education by Diane Ravitch

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David Brooks, desegregation, hiring and firing, invisible hand, Jane Jacobs, Menlo Park, Ralph Waldo Emerson, RAND corporation, Robert Gordon, Ronald Reagan, school choice, school vouchers, The Death and Life of Great American Cities

If students succeeded, it was the teacher who did it. If students got low scores, it was the teacher’s fault. Teachers were both the cause of low performance and the cure for low performance. The solution was to get rid of bad teachers and recruit only good ones. Of course, it was difficult to know how to recruit good teachers when the determination of their effectiveness required several years of classroom data. A 2006 paper by Robert Gordon, Thomas J. Kane, and Douglas O. Staiger, titled “Identifying Effective Teachers Using Performance on the Job,” took the argument a step further. Like Hanushek and Rivkin, these authors maintained that “paper qualifications,” such as degrees, licenses, and certification, do not predict who will be a good teacher. The differences, they said, between “stronger teachers” and “weaker teachers” become clear only after teachers have been teaching for “a couple of years.”

They agreed that value-added measures of student performance were essential in identifying effective teachers. They recommended that school districts pay bonuses to effective teachers who teach in high-poverty schools. And they recommended that the federal government provide grants to states to build data systems to “link student performance with the effectiveness of individual teachers over time.” These recommendations were of more than academic interest, because one of the authors, Robert Gordon of the Center for American Progress, a Washington-based think tank, was subsequently selected by the Obama administration to serve as deputy director for education in the Office of Management and Budget, where he was able to promote his policy ideas. And sure enough, President Obama’s education program included large sums of money for states to build data systems that would link student test scores to individual teachers, as well as funds for merit pay plans that would reward teachers for increasing their students’ test scores.

Sanders responded in an interview: Debra Viadero, “‘Value-Added’ Pioneer Says Stinging Critique of Method is Off-Base,” Education Week, May 7, 2008. 14 Eric A. Hanushek and Steven G. Rivkin, “How to Improve the Supply of High-Quality Teachers,” Brookings Papers on Education Policy, ed. Diane Ravitch (Washington, D.C.: Brookings Institution Press, 2004), 14, 16, 19, 21-23. 15 Richard Rothstein, “Comment,” Brookings Papers on Education Policy (2004), 26-27. 16 Robert Gordon, Thomas J. Kane, and Douglas O Staiger, “Identifying Effective Teachers Using Performance on the Job,” Discussion Paper 2006- 01, Brookings Institution, Washington, D.C., 5-6. 17 Ibid., 8. 18 Some educators created personality profiles to screen potential teachers, but economists ignored them; www.ed.gov/news/newsletters/innovator/2004/0223.html. 19 Dale Ballou, “Sizing Up Test Scores,” Education Next, Summer 2002, 12-13, 15. 20 Dan Goldhaber and Michael Hansen, Assessing the Potential of Using Value-Added Estimates of Teacher Job Performance for Making Tenure Decisions (Washington, D.C.: CALDER, Urban Institute, 2008), 1, 5-6. 21 Cory Koedel and Julian R.

 

pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, Baxter: Rethink Robotics, British Empire, business intelligence, business process, call centre, clean water, combinatorial explosion, computer age, computer vision, congestion charging, corporate governance, crowdsourcing, David Ricardo: comparative advantage, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, game design, global village, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, inventory management, James Watt: steam engine, Jeff Bezos, jimmy wales, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Mark Zuckerberg, Mars Rover, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, pattern recognition, payday loans, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Rodney Brooks, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen: Great Stagnation, Vernor Vinge, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

In fact, in a list of all the candidates for this classification compiled by the economist Alexander Field, only steam power got more votes than ICT, which was tied with electricity as the second most commonly accepted GPT.9 If we are all in agreement, then why the debate over whether ICTs are ushering in a new golden age of innovation and growth? Because, the argument goes, their economic benefits have already been captured and now most new ‘innovation’ involves entertaining ourselves inexpensively online. According to Robert Gordon: The first industrial robot was introduced by General Motors in 1961. Telephone operators went away in the 1960s. . . . Airline reservations systems came in the 1970s, and by 1980 bar-code scanners and cash machines were spreading through the retail and banking industries. . . . The first personal computers arrived in the early 1980s with their word processing, word wrap, and spreadsheets. . . .

There have even been substantial increases in the number of stock keeping units (SKUs) in most physical stores as computerized inventory management systems, supply chains, and manufacturing have become more efficient and flexible. For the overall economy, the official GDP numbers miss the value of new goods and services added to the tune of about 0.4 percent of additional growth each year, according to economist Robert Gordon.* Remember that productivity growth has been in the neighborhood of 2 percent per year for most of the past century, so contribution of new goods is not a trivial portion. Reputations and Recommendations Digitization also brings a related but subtler benefit to the vast array of goods and services that already exist in the economy. Lower search and transaction costs mean faster and easier access and increased efficiency and convenience.

The general story is about our research to understand the nature of progress with digital technologies, and its economic and societal consequences. As part of this work, we talked to two main types of geek (a label which, to us, is the highest praise): those who study economics and other social sciences, and those who build technologies. In the former group Susan Athey, David Autor, Zoe Baird, Nick Bloom, Tyler Cowen, Charles Fadel, Chrystia Freeland, Robert Gordon, Tom Kalil, Larry Katz, Tom Kochan, Frank Levy, James Manyika, Richard Murnane, Robert Putnam, Paul Romer, Scott Stern, Larry Summers, and Hal Varian have helped our thinking enormously. In the latter category are Chris Anderson, Rod Brooks, Peter Diamandis, Ephraim Heller, Reid Hoffman, Jeremy Howard, Kevin Kelly, Ray Kurzweil, John Leonard, Tod Loofbourrow, Hilary Mason, Tim O’Reilly, Sandy Pentland, Brad Templeton, and Vivek Wadhwa.

 

pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

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accounting loophole / creative accounting, affirmative action, Asian financial crisis, barriers to entry, borderless world, Branko Milanovic, Bretton Woods, capital controls, corporate governance, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, ending welfare as we know it, feminist movement, full employment, gender pay gap, George Gilder, glass ceiling, Gordon Gekko, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, manufacturing employment, means of production, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, pets.com, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, structural adjustment programs, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, women in the workforce, working poor, Y2K

The contribution of 2003-vintage computers must be reconciled with the contribution of the 2000-vintage. Not easy in practice, but conceivable in principle. What might shock civiHans, though, is that the labor input must also be adjusted for quality, so that the contributions of the experienced engineer and the green janitor can be expressed in the same metric. To the more softhearted among us, that seems a bit callous—and it even gets ugly. For example, Robert Gordon (2000) attributes the slowdown in productivity growth in the 1970s to deterioration in average workforce quality, specifically, the "shift toward less experienced teenagers and the rapid inflow of females into the labor force." Yes, teens are inexperienced and even moody, but why should the flow of women into paid work be so corrupting? In an email, Gordon helpfully explained that wages reflect productivity, so if women earn 60% of what men do (which is roughly what they did in thirty years ago, compared with 73% today), then clearly they constituted only 60% as much "effective labor."

With so much of real growth 62 After the New Economy now concentrated in computers and other high-tech areas—dependent on the quirks of price indexes and quaHty adjustments—reported growth may have less relevance to the average person in the street than ever. One in five children in poverty, 41 miUion people without health insurance—but processor speed is doubHng every year and a halfl Cordon's critique Prestige economics' most prominent critic of these productivity revo arguments is Robert Gordon of Northwestern. Initially, he argued that after correcting for the unsustainably strong economy of the late 1990s, the acceleration in productivity was almost entirely concentrated in computers and other high-tech. Normal benchmark revisions of the GDP data forced him to retreat from the claim a bit. More recendy, Gordon (2000) argues that most of it is still concentrated there, with some in other branches of durable-goods manufacturing, but almost invisible in the other 88% of the private economy—services and nondurable manufacturing.

 

pages: 240 words: 75,304

Time Lord: Sir Sandford Fleming and the Creation of Standard Time by Clark Blaise

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British Empire, Dava Sobel, James Watt: steam engine, John Harrison: Longitude, Khartoum Gordon, Robert Gordon, Silicon Valley, transcontinental railway, traveling salesman, Upton Sinclair

He obviously knew how to compute the time, although his method was, as might be expected, a curious mixture of the natural and rational. He was computing the nautical day, “natural” time at sea, yet not making the “rational” leap into mean (averaged) time. Standardization simply had not yet become an urgent matter, except with regard to the floating lunch hour. When he landed in Glasgow, he ran into a bootblack, “wee Robert Gordon,” whose pert, aggressive ways sold him on a shine. He also hired the boy to take him on a walking tour of Glasgow. I invited the little boot-black to breakfast with me which he gladly accepted. He sat opposite me and we had a long chat. He supports a widowed mother and earns from 8/- to 12/- per week. He had two boiled eggs, one cup of good coffee, two thick slices of bread and butter for the sum of tenpence or fivepence each.

He had two boiled eggs, one cup of good coffee, two thick slices of bread and butter for the sum of tenpence or fivepence each. Robert then took me from Jamaica Street where we breakfasted along Buchanan and Argyle Streets to see the shops and I left him at the Exchange to pursue his vocation. I found Robert an intelligent boy and one who is bound to succeed in life. No, there followed no promise of sponsorship to Canada, a job, or a college scholarship for wee Robert Gordon. There is simple (“manly,” as Thoreau might have put it) recognition of a lad, much like himself, whose pride and genius for hard work, for responsibility, for individualism, recommended him to the future, another spiritual son of the patron saint of all self-made entrepreneurs, all young men of pluck, industry, native intelligence, and cultivated good luck, Benjamin Franklin. FOR THE FIRST TIME in his adult life he was back in Britain, and for the very first time in London.

 

pages: 239 words: 70,206

Data-Ism: The Revolution Transforming Decision Making, Consumer Behavior, and Almost Everything Else by Steve Lohr

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23andMe, Affordable Care Act / Obamacare, Albert Einstein, big data - Walmart - Pop Tarts, bioinformatics, business intelligence, call centre, cloud computing, computer age, conceptual framework, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, Danny Hillis, data is the new oil, David Brooks, East Village, Edward Snowden, Emanuel Derman, Erik Brynjolfsson, everywhere but in the productivity statistics, Frederick Winslow Taylor, Google Glasses, impulse control, income inequality, indoor plumbing, industrial robot, informal economy, Internet of things, invention of writing, John von Neumann, Mark Zuckerberg, market bubble, meta analysis, meta-analysis, natural language processing, obamacare, pattern recognition, payday loans, personalized medicine, precision agriculture, pre–internet, Productivity paradox, RAND corporation, rising living standards, Robert Gordon, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, speech recognition, statistical model, Steve Jobs, Steven Levy, The Design of Experiments, the scientific method, Thomas Kuhn: the structure of scientific revolutions, unbanked and underbanked, underbanked, Von Neumann architecture, Watson beat the top human players on Jeopardy!

Most of the maintenance today is done data-blind, using rule-of-thumb standard schedules and in reaction to breakdowns. Huge savings, the authors declare, will result from individualized, predictive servicing of industrial equipment, made possible by sensors and data analysis. The result, they write, will be to move close to the ideal of “zero unplanned downtime.” But data doubters are not persuaded. And the most prominent pessimist is Robert Gordon, a leading economic historian and a professor at Northwestern University, who made his case in a research paper published in August 2012, “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds.” In his paper, Gordon asserts that the gains from computing and the Internet have petered out in the past decade. Linking modern communications to computing, he observes, brought the Internet uptick in productivity from 1996 to 2004, a relatively brief historical period.

“When the machines can learn”: Anil Varma’s descriptions and quotes come from an interview on Oct. 30, 2012. “an exciting place for data and analytics right now”: From an e-mail he sent on June 16, 2014. a report coauthored by its chief economist Marco Annunziata and Peter Evans: The report, titled The Industrial Internet@Work, was published on Oct. 28, 2013. https://www.ge.com/sites/default/files/GE_IndustrialInternetatWork_WhitePaper_20131028.pdf. “Is U.S. Economic Growth Over?”: Robert Gordon’s critique was a National Bureau of Economic Research working paper, published in August 2012. http://www.nber.org/papers/w18315.pdf. Gordon responded to his detractors: His piece in the Wall Street Journal, titled “Why Innovation Won’t Save Us,” was published in a weekend edition, Dec. 22–23, 2013, p. C3. http://faculty-web.at.northwestern.edu/economics/gordon/WSJ_121222.pdf. 8: The Yin and Yang of Behavior and Data Yoky Matsuoka was known as a robot wizard: Matsuoka’s descriptions and quotes come mainly from an interview on Nov. 18, 2011.

 

pages: 464 words: 116,945

Seventeen Contradictions and the End of Capitalism by David Harvey

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accounting loophole / creative accounting, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business climate, California gold rush, call centre, central bank independence, clean water, cloud computing, collapse of Lehman Brothers, colonial rule, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, deskilling, falling living standards, fiat currency, first square of the chessboard, first square of the chessboard / second half of the chessboard, Food sovereignty, Frank Gehry, future of work, global reserve currency, Guggenheim Bilbao, income inequality, informal economy, invention of the steam engine, invisible hand, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Just-in-time delivery, knowledge worker, low skilled workers, Mahatma Gandhi, market clearing, Martin Wolf, means of production, microcredit, new economy, New Urbanism, Occupy movement, peak oil, phenotype, Plutocrats, plutocrats, Ponzi scheme, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Gordon, Ronald Reagan, short selling, Silicon Valley, special economic zone, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, Tyler Cowen: Great Stagnation, wages for housework, Wall-E, women in the workforce, working poor, working-age population

Even the dismal science of conventional economics, as Michael Hudson shows in a recent trenchant commentary, has failed to recognise the significance of compounding interest on rising indebtedness.1 The result has been to obscure a key part of the explanation for the financial disruptions that shook the world in 2008. So is perpetual compounding growth possible? In recent times there has been a flurry of worry among some economists that faith in the long-held supposition of perpetual growth might be misplaced. Robert Gordon, for example, has suggested in a recent paper that the economic growth experienced over the last 250 years ‘could well be a unique episode in human history rather than a guarantee of endless future advance at the same rate’. His case rests largely on an overview of the path and effects of innovations in the productivity of labour which have underpinned the growth of per capita incomes. Gordon joins with several other economists in thinking that the innovation waves of the past have been much stronger than the most recent wave, resting on electronics and computerisation, that began around the 1960s.

Even in the case of the long-term financing of infrastructures (such as roads, public works, urbanisation) there was a reasonable presumption that the debt would ultimately be paid off out of the increasing productivity of the social labour engaged in production. It could also be reasonably assumed that all of this would generate increasing per capita incomes. The interstate highway system built in the United States during the three decades after 1960 had a huge impact upon aggregate labour productivity and paid off handsomely. This was, in Robert Gordon’s account, the strongest innovation wave in capital’s history.13 There have always been significant circuits of what can be called ‘fictitious capital’ – investments in mortgages, public debt, urban and national infrastructures and the like. From time to time these flows of fictitious capital got out of hand to form speculative bubbles that ultimately burst to form serious financial and commercial crises.

This is one of the only economics texts I know that takes the issue of compound growth seriously. I have used some of his materials in what follows. When I raised the question of compound growth in 2011 with two senior economics editors of a major global newspaper, one of them shrugged off the question as trivial if not laughable, while the other said there were still plenty of new technological frontiers to explore so why worry. 2. Robert Gordon, ‘Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds’, Working Paper 18315, Cambridge, MA, National Bureau of Economic Research, 2012. The public reaction to Gordon’s arguments are covered in Thomas Edsall, ‘No More Industrial Revolutions’, New York Times, 15 October 2012. The general public reaction was that Gordon probably had a point but that he was too pessimistic on the future impact of innovations.

 

pages: 1,205 words: 308,891

Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey

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Admiral Zheng, agricultural Revolution, Albert Einstein, BRICs, British Empire, butterfly effect, Carmen Reinhart, clockwork universe, computer age, Corn Laws, dark matter, David Ricardo: comparative advantage, Donald Trump, Edward Lorenz: Chaos theory, European colonialism, experimental economics, financial innovation, Fractional reserve banking, full employment, George Akerlof, germ theory of disease, Gini coefficient, greed is good, Howard Zinn, income per capita, interchangeable parts, invention of agriculture, invention of air conditioning, invention of writing, invisible hand, Isaac Newton, James Watt: steam engine, John Maynard Keynes: technological unemployment, John Snow's cholera map, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, means of production, Naomi Klein, New Economic Geography, New Urbanism, purchasing power parity, rent-seeking, road to serfdom, Robert Gordon, Ronald Coase, Ronald Reagan, Scientific racism, Scramble for Africa, Shenzhen was a fishing village, Simon Kuznets, Slavoj Žižek, spinning jenny, Steven Pinker, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, tulip mania, union organizing, Upton Sinclair, urban renewal, V2 rocket, very high income, working poor, World Values Survey, Yogi Berra

The economist Benjamin Friedman has shown how politics deteriorates as rates of growth decline towards zero.10 One percent is perilously close to zero, and sure enough the politics of the United States and other countries such as Britain in the period became correspondingly nasty. But neither was the growth among ordinary people literally zero, as the left so confidently and indignantly claims. Capitalism wasn’t in crisis 1970-1992. During and after those years it raised the standard of living of poor people worldwide at the fastest rate in history (and by the way, according to the economist Robert Gordon, after the dot-com boom the American economy stopped rewarding the very rich disproportionately). The real welfare of workers in the United States 1970-1992 did not in fact stagnate—as you can see in the statistics of housing space per person or automobiles per person or restaurant meals per person. It modestly rose, from continuing innovation. Anyone who lived through the period knows that it did, though the official and uncorrected statistics can overcome her common sense.

Berg notes that “producers of small tools as well as complex lathes and engines” that made for faster production of a given product “were often the same individuals producing ornamental stamped brassware, medallions and mechanical toys.”22 Products for consumers led to producers’ goods for factories. And the correct measurement of producers’ goods has the same problem of better and better quality that the measurement of consumers’ goods has. With an ingenious use of Sears, Roebuck catalogues as historical sources, and with the econometrics of hedonic price indices, Robert Gordon found that the rate of rise of the prices of producers’ goods (lathes, motors, and so forth) have like consumer goods been substantially overstated by not including their improving 61 quality.23 In short, we’re much better off now compared to 1800 than the conventional measures of national product suggest. Notes 1. For the international comparisons Maddison 2006, and in particular pp. 437, 443 for the factor of sixteen from 1700 to 2001 in international Geary-Khamis dollars of 1990.

You may own 18 time more chairs than your ancestors in 1700, but you don’t enjoy 18 times more chair-sitting pleasures. In other words, all this radical, 100-fold increase is an increase in possibilities, and is not measured on the same scale as happiness viewed as cat-like pleasures of the day, or even as the deeper goal of human fulfillment. In discussing Nordhaus’ results the (equally useful) economists Timothy Bresnahan and Robert Gordon note that the utility from the last unit of increase of lighting, from 99 to 100 fold (which after all is only 1 percent), is surely a great deal less than that from the first few, from 2 to 3 to 4 fold.24 The 100th ball point is less pleasure-producing than the second or third. “Diminishing returns,” or more exactly in this case diminishing “marginal utility,” is one of the pieces of economic jargon that have slipped into the common tongue (like “GDP” or “the balance of payments”).

 

pages: 338 words: 106,936

The Physics of Wall Street: A Brief History of Predicting the Unpredictable by James Owen Weatherall

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Albert Einstein, algorithmic trading, Antoine Gombaud: Chevalier de Méré, Asian financial crisis, bank run, Benoit Mandelbrot, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, Brownian motion, butterfly effect, capital asset pricing model, Carmen Reinhart, Claude Shannon: information theory, collateralized debt obligation, collective bargaining, dark matter, Edward Lorenz: Chaos theory, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial innovation, George Akerlof, Gerolamo Cardano, Henri Poincaré, invisible hand, Isaac Newton, iterative process, John Nash: game theory, Kenneth Rogoff, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, martingale, new economy, Paul Lévy, prediction markets, probability theory / Blaise Pascal / Pierre de Fermat, quantitative trading / quantitative finance, random walk, Renaissance Technologies, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, statistical arbitrage, statistical model, stochastic process, The Chicago School, The Myth of the Rational Market, tulip mania, V2 rocket, volatility smile

The challenge was to find an argument for why inflation calculations should be modified. This is where the Boskin Commission came in. It was a masterful sleight of hand. Working backward from the figure of $1 trillion, which Moynihan believed would be necessary to keep Social Security solvent, he and Packwood determined that inflation would need to be reduced by 1.1%. According to notes written by Robert Gordon, an economist at Northwestern University and one of the five members of the commission, Dale Jorgenson — the Harvard economist who had thrown Malaney out of his office — reported to the commission early on that they were aiming for $1 trillion in Social Security savings over ten years, and that this meant they needed to come up with the requisite reduction in inflation. Then the committee broke up into two teams to work on different ways in which the problems of changing preferences and changing quality could affect CPI.

”: For a history of the politics surrounding Social Security, see Beland (2005), Altman (2005), or Baker and Weisbrot (1999). “. . . until Daniel Patrick Moynihan and Bob Packwood . . . shared a moment of inspiration . . .”: See Sheehan (2010), Moynihan (1996), and Katzmann (2008) for various perspectives on the origins of the Boskin Commission. “According to notes written by Robert Gordon . . .”: The notes I am alluding to are Gordon (2002). Gordon also tells the story of the Boskin Commission and its critics in Gordon (2006), though this narrative version does not include Moynihan’s role. “The Boskin Commission’s findings were criticized from all corners”: See especially Sheehan (2010), as well as Triplett (2006) and Bosworth (1997). “Ultimately, the Boskin Commission’s recommendations were squashed . . .”: For an account of how the Bureau of Labor Statistics incorporated some of the Boskin Commission’s recommendations, see Greenlees (2006).

 

pages: 357 words: 95,986

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

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3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, back-to-the-land, banking crisis, battle of ideas, blockchain, Bretton Woods, call centre, capital controls, carbon footprint, Cass Sunstein, centre right, collective bargaining, crowdsourcing, cryptocurrency, David Graeber, decarbonisation, deindustrialization, deskilling, Doha Development Round, Elon Musk, Erik Brynjolfsson, Ferguson, Missouri, financial independence, food miles, Francis Fukuyama: the end of history, full employment, future of work, gender pay gap, housing crisis, income inequality, industrial robot, informal economy, intermodal, Internet Archive, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, late capitalism, low skilled workers, manufacturing employment, market design, Martin Wolf, means of production, minimum wage unemployment, Mont Pelerin Society, neoliberal agenda, New Urbanism, Occupy movement, oil shale / tar sands, oil shock, patent troll, pattern recognition, post scarcity, postnationalism / post nation state, precariat, price stability, profit motive, quantitative easing, reshoring, Richard Florida, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Slavoj Žižek, social web, stakhanovite, Steve Jobs, surplus humans, the built environment, The Chicago School, Tyler Cowen: Great Stagnation, universal basic income, wages for housework, We are the 99%, women in the workforce, working poor, working-age population

World Economic Outlook 2015: Uneven Growth: Short- and Long-Term Factors (Washington, DC: International Monetary Fund, 2015), pp. 69–71, pdf available at imf.org. 133.We do not pretend to adjudicate between the competing explanations here, but merely point to the growing consensus about a new era of lower growth: Andrew Kliman, ‘What Lies Ahead: Accelerating Growth or Secular Stagnation?’ E-International Relations, 24 January 2014, at e-ir.info; Robert Gordon, Is US Economic Growth Over? Faltering Innovation Confronts the Six Headwinds, Working Paper, National Bureau of Economic Research, August 2012, at nber.org; Lawrence Summers, ‘US Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound’, Business Economics 49: 2 (2014); Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011); Coen Teulings and Richard Baldwin, eds, Secular Stagnation: Facts, Causes and Cures (London: CEPR, 2014). 134.Cowen, Great Stagnation, pp. 47–8. 135.Thor Berger and Carl Benedikt Frey, Industrial Renewal in the 21st Century: Evidence from US Cities?

The ILO also argues that today’s sluggish global job growth is related largely to sluggish economic growth, but they also note that productivity growth has recovered quicker than employment growth. ILO, World Employment and Social Outlook: The Changing Nature of Jobs (Geneva: International Labour Organization, 2015), pp. 19, 23. 40.Bank of International Settlements, Annual Report, 2013/2014 (Basel: Bank for International Settlements, 2014), at bis.org, pp. 58–60; Robert Gordon, ‘US Productivity Growth: The Slowdown Has Returned After a Temporary Revival’, International Productivity Monitor 25 (2013); David Autor, ‘Roundtable: The Future of Jobs’, presented at the The Future of Work in the Age of the Machine, Hamilton Project, Washington, DC, 19 February 2015, at hamiltonproject.org. 41.Susantu Basu and John Fernald, Information and Communications Technology as a General-Purpose Technology: Evidence from U.S.

 

pages: 323 words: 90,868

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

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3D printing, Airbnb, American energy revolution, autonomous vehicles, Bakken shale, barriers to entry, Bernie Sanders, BRICs, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, gig economy, global supply chain, global value chain, hydraulic fracturing, income inequality, indoor plumbing, industrial robot, interchangeable parts, Internet of things, inventory management, invisible hand, Jacquard loom, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low skilled workers, lump of labour, Lyft, manufacturing employment, means of production, new economy, performance metric, pets.com, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, TaskRabbit, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, transaction costs, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, very high income, working-age population

Dramatic, wrenching technological transformations occurred in a handful of economies: South Korea and Singapore, for example, and more recently China. But these were merely examples of the delayed arrival of the whirlwind that had upended rich countries in the nineteenth and early twentieth centuries. After so long a period of modest economic evolution, many of us have forgotten that economic advance ever occurs at any other speed. Some techno-pessimists, such as Robert Gordon, an economist at Northwestern University, argue that the slowdown is irreversible. Technological progress, he argues, gathered momentum over a long period of time thanks to a series of fundamental intellectual insights. The development of a deep understanding of what electricity is and how it might be used is not something that can easily – or perhaps ever – be duplicated. The inventions that followed on from advances in the science of electricity, and in other areas, are not like water drawn from a river but like coal mined from the earth: society couldn’t help but exploit the most accessible, most abundant veins first, leaving only the marginal, difficult things for later generations (like ours).4 Worse, the pessimistic view runs, the deceleration in intellectual progress is itself evidence that there are few, if any, fundamental insights such as that into the science of electricity still remaining out there, waiting to be discovered.

In 1987 the Nobel Prize-winning economist Robert Solow mused, in a piece pooh-poohing the prospect of a looming technological transformation, that the evidence for the revolutionary power of computers simply wasn’t there. ‘You can see the computer age everywhere but in the productivity statistics’, he reckoned, and he had a point.9 Productivity perked up in the 1990s but wheezed out again in the 2000s. And that, some seemed to conclude, was all there was. In the 2000s Robert Gordon began posing a thought experiment to his audiences: would they, he wondered, prefer a world with all the available technology up to 2000, or one with all available technology up to the present day except for indoor plumbing? His little test effectively made the point that what occurred in the second industrial revolution was powerfully transformative, in a way the advances of the internet age simply weren’t.

 

pages: 375 words: 88,306

The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism by Arun Sundararajan

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3D printing, additive manufacturing, Airbnb, Amazon Mechanical Turk, autonomous vehicles, barriers to entry, bitcoin, blockchain, Burning Man, call centre, collaborative consumption, collaborative economy, collective bargaining, corporate social responsibility, cryptocurrency, David Graeber, distributed ledger, employer provided health coverage, Erik Brynjolfsson, ethereum blockchain, Frank Levy and Richard Murnane: The New Division of Labor, future of work, George Akerlof, gig economy, housing crisis, Howard Rheingold, Internet of things, inventory management, invisible hand, job automation, job-hopping, Kickstarter, knowledge worker, Kula ring, Lyft, megacity, minimum wage unemployment, moral hazard, Network effects, new economy, Oculus Rift, pattern recognition, peer-to-peer lending, profit motive, purchasing power parity, race to the bottom, recommendation engine, regulatory arbitrage, rent control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Second Machine Age, self-driving car, sharing economy, Silicon Valley, smart contracts, Snapchat, social software, supply-chain management, TaskRabbit, The Nature of the Firm, total factor productivity, transaction costs, transportation-network company, two-sided market, Uber and Lyft, Uber for X, universal basic income, Zipcar

It is possible, as Bhavish Aggarwal, the youthful co-founder and CEO of Ola suggested to me in 2015, that of the hundreds of millions of the newly minted Indian middle class who attain an income level that allows them to consider buying a car over the coming decade, many will “leapfrog” the inefficient ownership phase entirely, instead entering the automobile usage market directly as on-demand consumers. In a series of recent talks, the economist Robert Gordon from Northwestern University has lamented the slowdown in US productivity growth and, in particular, the absence of clear evidence that the digital revolution of the last two decades has had a significant impact on the growth rates of total factor productivity. A now-famous slide from one of his recent articles is replicated in figure 5.2.21 Figure 5.2 Growth rate of total factor productivity for each ten-year period (i.e., for the decades ending 1900 to 2010).

Hitt, “Job Hopping, Information Technology Spillovers, and Productivity Growth,” Management Science 60, 2 (2013): 338–355. 19. One might instead consider using the term “efficiency” of capital or “productivity” of capital. However, these words have specific (and somewhat distinct) meanings in economics that don’t fully capture what I’m trying to communicate. 20. Clay Shirky, from a talk at the Collaborative-Peer-Sharing Economy Summit, New York University, May 30, 2014. 21. Robert Gordon, “US Economic Growth Is Over: The Short Run Meets the Long Run,” in Think Tank 20: Growth, Convergence and Income Distribution: The Road from the Brisbane G-2- Summit (Washington DC: Brookings Institute, 2015), 188. http://www.brookings.edu/~/media/Research/Files/Interactives/2014/thinktank20/chapters/tt20-united-states-economic-growth-gordon.pdf?la=en. 22. Hal R. Varian and Carl Shapiro call this the “demand-side economies of scale” in their book Information Rules: A Strategic Guide to the Network Economy (Cambridge: Harvard Business Books, 1999). 23.

 

pages: 133 words: 36,528

Peak Car: The Future of Travel by David Metz

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autonomous vehicles, bike sharing scheme, Clayton Christensen, congestion charging, crowdsourcing, David Attenborough, decarbonisation, edge city, Edward Glaeser, Just-in-time delivery, Network effects, Richard Florida, Robert Gordon, Silicon Valley, Skype, urban sprawl, yield management, young professional

I have proposed that it is this high level of access, choice and opportunities that accounts for the cessation of growth of personal daily travel that is observed in developed countries. A complementary influence is the difficulty of devising technologies that would allow us to travel even faster at acceptable cost, safety and environmental impact. We seem to have reached the end of an era of technological advance. This is not unique to transport. Robert Gordon, a US economist, argues that there have been three industrial revolutions: the first created steam engines, cotton spinning and the railways; the second, electricity, the internal combustion engine and modern water supply. Both these required about one hundred years to percolate through the economy. The third, the computer and Internet revolution, began around 1960 and may have already had its main impact on productivity through displacing repetitive clerical work.

 

pages: 497 words: 143,175

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies by Judith Stein

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1960s counterculture, affirmative action, airline deregulation, anti-communist, Ayatollah Khomeini, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, capital controls, centre right, collective bargaining, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, desegregation, energy security, Fall of the Berlin Wall, falling living standards, feminist movement, financial deregulation, floating exchange rates, full employment, income inequality, income per capita, intermodal, invisible hand, knowledge worker, laissez-faire capitalism, Long Term Capital Management, manufacturing employment, market bubble, Martin Wolf, new economy, oil shale / tar sands, oil shock, open economy, payday loans, post-industrial society, post-oil, price mechanism, price stability, Ralph Nader, RAND corporation, reserve currency, Robert Gordon, Ronald Reagan, Simon Kuznets, strikebreaker, trade liberalization, union organizing, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor, Yom Kippur War

State planning had a history in the infrastructure industries—communications, transportation, and energy. Most others—steel, auto, computers, food processing—functioned without government direction or mandate. Because Keynesians lacked answers to the ailing food, oil, and manufacturing sectors, the planners earned a hearing. In his presidential address to the American Economic Association in 1976, Robert Gordon, one of Keynes’s high priests, acknowledged that “we economists pay too little attention to the changing institutional environment that conditions economic behavior…. We shy away from the big questions about how and why the institutional structure is changing—and where it is taking us.”80The Humphrey-Javits bill proposed to examine environments and create an Office of National Economic Planning to oversee the traditionally regulated and the unregulated parts of the economy—both infrastructure and production.

This pattern continued up to the present, except for the years from 1995–2000, when the lowest fifth outpaced the top fifth. Still, even in the second half of the Clinton presidency, the top 5 percent did better than everyone else. Lawrence Mishel, Jared Bernstein, and Sylvia Allegretto, The State of Working America, 2006–2007 (Ithaca, N.Y.: Cornell University Press, 2006), 58; Ian Dew-Becker and Robert Gordon, “Where Did the Productivity Growth Go?” paper presented at the Eighty-First Meeting of the Brookings Panel on Economic Activity, Washington D.C., Sept. 8–9, 2005, 72. 14. Economist (Oct. 4–11, 2008), 11. 15. Robert W. Stevenson, “Capitalism After the Fall,” Week in Review, New York Times, Apr. 19, 2009. CHAPTER 1. “THE GREAT COMPRESSION” 1. Lawrence Mishel, Jared Bernstein, and Sylvia Allegretto, The State of Working America, 2006–2007 (Ithaca, N.Y.: Cornell University Press, 2006), 55. 2.

 

pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

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3D printing, Airbnb, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, cleantech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, credit crunch, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, first-past-the-post, forward guidance, full employment, Gini coefficient, global supply chain, Growth in a Time of Debt, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, liquidity trap, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, working-age population, Zipcar

Now he wants to build a Hyperloop – basically a solar-powered maglev train in a vacuum tube that would whisk passengers along at 760 miles (1,220 kilometres) an hour, three times faster than a high-speed train, and cost ten times less to build.705 Gloomsters argue that technological progress is grinding to a halt. The low-hanging fruit have all been picked, argues Tyler Cowen in The Great Stagnation.706 Nothing can ever compare to the great leap forward ushered in by electricity and other advances during the second wave of the Industrial Revolution between 1870 and 1900, such as cars, running water, petroleum and chemicals, claims Robert Gordon of Northwestern University.707 “Many of the original and spin-off inventions of IR #2 could happen only once – urbanisation, transportation speed, the freedom of females from the drudgery of carrying tons of water per year, and the role of central heating and air conditioning in achieving a year-round constant temperature.” Yet he is wrong to dismiss the importance of exponentially increasing computing power, communications (through both the wired and the mobile internet) and data gathering (“big data”) – and many previous advances since 1900.

Just think how much faster and further humanity could progress if Africa emulated China’s success, if women were liberated in the Arab world, if people were set free to live and work wherever they want, if Silicon Valley’s entrepreneurial magic cast its spell on Europe, and if every young person got a fair start in life. Knowledge is cumulative: by standing on the shoulders of giants we can reach ever-higher branches. Each invention also creates new demands, argues Jan Mokyr, an optimistic counterpoint to Robert Gordon at Northwestern University.709 Antibiotics have given us a new lease of life, but as bacteria become resistant, we need to develop new ones. Using nitrates as fertilisers helped us feed billions but their overuse pollutes the water; perhaps the solution will be genetic engineering to enable plants to fix more of their own nitrates or bacteria that convert nitrates into nitrogen at more efficient rates.

 

pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

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affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, capital controls, Cass Sunstein, central bank independence, clean water, collapse of Lehman Brothers, congestion charging, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, Joseph Schumpeter, Kenneth Rogoff, libertarian paternalism, low skilled workers, lump of labour, Malacca Straits, market bubble, microcredit, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional

(Or we could make the same amount of stuff with 2 percent fewer inputs.) One of the most interesting debates in economics is whether or not the American economy has undergone a sharp increase in the rate of productivity growth. Some economists, including Alan Greenspan during his tenure as Fed chairman, have argued that investments in information technology have led to permanently higher rates of productivity growth. Others, such as Robert Gordon at Northwestern University, believe that productivity growth has not changed significantly when one interprets the data properly. The answer to that debate matters enormously. From 1947 to 1975, productivity grew at an annual rate of 2.7 percent a year. From 1975 until the mid-1990s, for reasons that are still not fully understood, productivity growth slowed to 1.4 percent a year. Then it got better again; from 2000 to 2008, productivity growth returned to a much healthier 2.5 percent annually.

Jason Hill, Erik Nelson, David Tilman, Stephen Polasky, and Douglas Tiffany, “Environmental, Economic, and Energetic Costs and Benefits of Biodiesel and Ethanol Biofuels,” Proceedings of the National Academy of Sciences, vol. 103, no. 30 (July 25, 2006). 3. Nicholas Kristof, “Ethanol, for All Its Critics, Fuels Farmer Support and Iowa’s Role in Presidential Races,” New York Times, January 21, 2000. 4. Robert Gordon, Thomas Kane, and Douglas O. Staiger, “Identifying Effective Teachers Using Performance on the Job,” The Hamilton Project Policy Brief No. 2006–01, April 2006. 5. Roger Ferguson, Jr., “Economic Policy for Our Era: The Ohio Experience,” Economic Commentary, Federal Reserve Bank of Cleveland, May 15, 2000. 6. Joe Klein, “Eight Years: Bill Clinton Looks Back on His Presidency,” The New Yorker, October 16, 2000, p. 201. 7.

 

pages: 524 words: 143,993

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis by Martin Wolf

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air freight, anti-communist, Asian financial crisis, asset allocation, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, Ben Bernanke: helicopter money, Berlin Wall, Black Swan, bonus culture, Bretton Woods, call centre, capital asset pricing model, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, debt deflation, deglobalization, Deng Xiaoping, diversification, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, floating exchange rates, forward guidance, Fractional reserve banking, full employment, global rebalancing, global reserve currency, Growth in a Time of Debt, Hyman Minsky, income inequality, inflation targeting, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, margin call, market bubble, market clearing, market fragmentation, Martin Wolf, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, new economy, North Sea oil, Northern Rock, open economy, paradox of thrift, price stability, private sector deleveraging, purchasing power parity, pushing on a string, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Richard Feynman, Richard Feynman, risk-adjusted returns, risk/return, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, shareholder value, short selling, sovereign wealth fund, special drawing rights, The Chicago School, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, too big to fail, Tyler Cowen: Great Stagnation, very high income, winner-take-all economy

Moreover, age-related public spending on health and pensions also seems bound to rise in most high-income economies over the next few decades unless there are extraordinary medical innovations or the rest of the population refuses to pay.33 With the labour force growing more slowly than previously, or even shrinking, growth is bound to slow, other things being equal. But the other component of economic growth – rising productivity – is even more important than demography in determining the rate of growth over the long run. It is also the principal determinant of incomes per head. Nobody knows what will happen to productivity over the coming decades, but some well-informed people have put forward reasonable arguments that it must slow. Among these are Robert Gordon of Northwestern University and Tyler Cowen of George Mason University.34 An important reason why the pace of innovation might be slowing is that many opportunities have already been exploited: the population of the high-income countries is already highly educated and highly urbanized; the economy has already exploited the most readily available natural resources; people have already enjoyed the fruit of many life- and economy-transforming innovations, such as running water and sanitation, inoculation, electricity, chemicals, pharmaceuticals, the internal combustion engine, civil aviation, telephony, the computer and the internet.

Stephen King, chief economist of HSBC, has written a book with these characteristics: When the Money Runs Out: The End of Western Affluence (New Haven and London: Yale University Press, 2013). 32. See Robert Arnott and Denis Chaves, ‘A New “New Normal” in Demography and Economic Growth’, 27 August 2013, http://www.indexuniverse.com/docs/magazine/2/2013_229.pdf. 33. See International Monetary Fund, Fiscal Adjustment in an Uncertain World, Fiscal Monitor, April 2013, Fig. 2, p. 6. 34. See Robert Gordon, ‘Is U. S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds’, National Bureau of Economic Research Working Paper No. 18315, August 2012, www.nber.org; TylerCowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (London: Dutton/Penguin, 2011). 35. Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress and Prosperity in a Time of Brilliant Technologies (New York and London: W.

 

pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

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accounting loophole / creative accounting, Airbnb, Ben Bernanke: helicopter money, Bretton Woods, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, market bubble, means of production, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, winner-take-all economy, Wolfgang Streeck

For illustration I will point to five systemic disorders of today’s advanced capitalism; all of them result in various ways from the weakening of traditional institutional and political restraints on capitalist advance. I call them stagnation, oligarchic redistribution, the plundering of the public domain, corruption and global anarchy. Six years after Lehman, predictions of long-lasting economic stagnation are en vogue. A prominent example is a much-discussed paper by Robert Gordon, who argues that the main innovations that have driven productivity and economic growth since the 1800s could happen only once, like the increase in the speed of transportation or the installation of running water in cities.29 Compared to them, the recent spread of information technology has produced only minor productivity effects, if any. While Gordon’s argument may seem somewhat technologically deterministic, it appears plausible that capitalism can hope to attain the level of growth needed to compensate a non-capitalist working class for helping others accumulate capital only if technology opens up ever new opportunities for increasing productivity.

By hunting for the best bargain, consumers defeat themselves as producers, driving their own jobs abroad; as they take up consumer credit to replenish their reduced purchasing power, they supplement consumerist incentives with legal obligations to work, entered into as debtors and enforced by lenders. See Lendol Calder, Financing the American Dream: A Cultural History of Consumer Credit, Princeton, NJ: Princeton University Press 1999. 29Robert Gordon, Is US Economic Growth Over? Faltering Innovation Confronts the Six Headwinds, NBER Working Paper no. 18315, August 2012. 30According to Gordon, that rate amounted to 1.8 per cent per annum. Under the impact of the six adverse forces, it would, in the future, fall to 0.2 per cent per annum for the bottom 99 per cent of the American population: Gordon, Is US Economic Growth Over?, pp. 18ff. (Growth for the top 1 per cent is of course a different matter.)

 

pages: 437 words: 115,594

The Great Surge: The Ascent of the Developing World by Steven Radelet

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Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global supply chain, income inequality, income per capita, invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, land reform, low skilled workers, M-Pesa, megacity, Mikhail Gorbachev, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Second Machine Age, secular stagnation, Simon Kuznets, South China Sea, special economic zone, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, women in the workforce, working poor

Global investment and aggregate demand have remained tepid despite low interest rates. Summers does not argue that secular stagnation in the advanced economies is inevitable but that it could become the reality if policy makers do not take steps to heighten demand such as increasing public investment in infrastructure and changing regulations to spur private investment in alternative energy sources.2 Northwestern University economist Robert Gordon sees other forces working to slow long-term growth in the United States. One is simple demographics: the baby boomers are retiring, so the labor force is growing more slowly than the number of retirees, a dynamic that is not going to change anytime soon. He also points to the plateauing of mass education (and therefore less growth in skills), rising inequality, and soaring public debt as forces slowing growth.

Joshua Kurlantzick gives an excellent account of political changes in Thailand in Democracy in Retreat: The Revolt of the Middle Class and the Worldwide Decline of Representative Government (New Haven, CT: Yale University Press, 2013), and my narrative follows his. The quote from James Kelly comes from his speech “U.S.-Thai Relations After September 11, 2001,” to the Asia Foundation in Bangkok on March 13, 2002, http://avalon.law.yale.edu/sept11/kelly_002.asp. 2. For a series of articles in which Summers lays out his views on secular stagnation, see his webpage: http://larrysummers.com/secular-stagnation. 3. See also Robert Gordon, “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds,” working paper 18315, National Bureau of Economic Research, Cambridge, MA, August 2012, www.nber.org/papers/w18315.pdf. 4. Press Information Bureau, Government of India, Prime Minister’s Office, “Sixth BRICS Summit—Fortaleza Declaration,” July 16, 2014, paragraphs 5 and 18, http://pib.nic.in/newsite/PrintRelease.aspx?

 

pages: 456 words: 123,534

The Dawn of Innovation: The First American Industrial Revolution by Charles R. Morris

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air freight, British Empire, business process, California gold rush, clean water, colonial exploitation, computer age, Dava Sobel, en.wikipedia.org, glass ceiling, hiring and firing, if you build it, they will come, interchangeable parts, Isaac Newton, Jacquard loom, Jacquard loom, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, lone genius, manufacturing employment, new economy, New Urbanism, On the Economy of Machinery and Manufactures, purchasing power parity, QWERTY keyboard, refrigerator car, Robert Gordon, spinning jenny, Stephen Hawking, The Wealth of Nations by Adam Smith, trade route, transcontinental railway, traveling salesman

The Significance of Armory Practice The achievement of Hall and North in manufacturing rifles with fully interchangeable precision parts was a signal milestone toward the final realization of the Wadsworth-Bomford-Lee program of “Uniformity” laid down twenty years before. By about mid-century, practical interchangeability became a fact for virtually all military muskets produced by the armories and private contractors. But legend to the contrary, machines by themselves were still far from being able to consistently achieve such tolerances. A series of microscopic analyses by Robert Gordon showed that precision fitting of firing action components required improvements in hand-finishing at least as great as those in machining. And until very recent times, it was rarely cost effective to attempt to replace all hand-finishing with machinery. The achievement of armory practice and high-precision interchangeability, therefore, was the creation of an integrated process of specification, measurement, work flow, and the highest-quality standards in both machining and hand work.87 The value of mass production processes was proven in the crucible of the Civil War.

The trip-hammer had been around a long time, so Waters appears to have patented the application to barrel welding, rather than the tool. am The frame arrangement described here was used for gun stocks. The original patent application shows a shoe last, a more compact shape, and is arranged differently. The application identified a variety of possible arrangements for different product types. an As Robert Gordon has pointed out, interpreting such results is uncertain without knowing all the context of the tests, the target audiences, and hidden agendas. Note the wide variance between this report and the one at West Point. ao Hall hypothesized a man cutting a plate exactly square. Normally he would “Square the 2d side by the 1st, and the 3d. by the 2d., and the 4th by the 3rd., but on comparing the 4th side with the 1st, it would still be found that they are not square; the cause is that in squaring each side by the preceding side, there is a slight but imperceptible variation and the comparison of the 4th with the 1st gives the sum of the variations of each side from a true square.

 

pages: 411 words: 114,717

Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma

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3D printing, affirmative action, Albert Einstein, American energy revolution, anti-communist, Asian financial crisis, banking crisis, Berlin Wall, BRICs, British Empire, business climate, business process, business process outsourcing, call centre, capital controls, Carmen Reinhart, central bank independence, centre right, cloud computing, collective bargaining, colonial rule, corporate governance, crony capitalism, deindustrialization, demographic dividend, Deng Xiaoping, eurozone crisis, Gini coefficient, global supply chain, housing crisis, income inequality, indoor plumbing, inflation targeting, informal economy, Kenneth Rogoff, knowledge economy, labor-force participation, labour market flexibility, land reform, M-Pesa, Mahatma Gandhi, market bubble, megacity, Mexican peso crisis / tequila crisis, new economy, oil shale / tar sands, oil shock, open economy, Peter Thiel, planetary scale, quantitative easing, reserve currency, Robert Gordon, Shenzhen was a fishing village, Silicon Valley, software is eating the world, sovereign wealth fund, The Great Moderation, Thomas L Friedman, trade liberalization, Watson beat the top human players on Jeopardy!, working-age population

Fracking technology took off in the United States because it took advantage of the country’s long-standing strengths, including strong property rights and ready financing for promising entrepreneurial ventures. At its core, the American energy revolution is a technology revolution. The Technology Edge Today, an interesting debate is under way over whether the digital technology revolution is really a big deal in terms of improving U.S. productivity. Leading skeptics about America’s productivity boom, such as Northwestern University economist Robert Gordon, say the computer and the Internet, even when rendered mobile in handheld devices, do less to raise productivity than inventions from previous technology revolutions—particularly the emergence in the late nineteenth century of electricity, the combustion engine, and indoor plumbing. The technology bulls say we haven’t seen anything yet. Everyone knows that today’s PCs are faster than machines that three decades ago would fill a warehouse.

The stagnation of middle-class wages in the United States is in part a function of the fact that U.S. companies (and unions too) have been faster than their rivals to accept the need to reduce wages, or to institute two-tier pay scales that start new workers at lower wages. The resulting increase in productivity is driving up the profitably of large companies and the wealth of the richest Americans. Robert Gordon figures that between 1993 and 2008, real incomes in the United States rose by an annual average of 1.3 percent, but more than half of those gains went to the richest 1 percent of households. It’s tough to make an economy more competitive and more fair at the same time. Judged by my rules on how to read the billionaire lists, however, the United States does not rank too badly in terms of the economic impact of inequality.

 

pages: 221 words: 55,901

The Globalization of Inequality by François Bourguignon

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Berlin Wall, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Credit Default Swap, deglobalization, deindustrialization, Doha Development Round, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, financial intermediation, gender pay gap, Gini coefficient, income inequality, income per capita, labor-force participation, minimum wage unemployment, offshore financial centre, open economy, purchasing power parity, race to the bottom, Robert Gordon, Simon Kuznets, structural adjustment programs, The Spirit Level, too big to fail, very high income, Washington Consensus

Even if it were possible to avert a new financial crisis or a new recession in the years to come, which is not certain, growth in these economies will remain constrained by debt reduction and, more important, by structural changes imposed by the continuing slow process of deindustrialization. Some economists also predict a slowing down in the rate of technological progress which they believe may last for some time.2 On the other hand, even if some of them are partially affected by the slowed growth of rich countries, the emerging economies often have large domestic markets that offer Acemoglu et al., “Distance to Frontier, Selection, and Economic Growth.” 2  See, for instance, Robert Gordon, “Is US Economic Growth Over? Faltering Innovation Confronts the Six Headwinds,” Working Paper 18315, National Bureau of Economic Research, Cambridge, MA, 2012. 1  Globalization and Costly Inequality121 substantial and autonomous opportunities for growth. China’s current attempt to reorient its development toward domestic demand is a good example of this. In addition, the rapid development of South-­South trade could, with some adjustments, be a substitute for the role played by demand from developed countries.

 

pages: 267 words: 71,123

End This Depression Now! by Paul Krugman

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airline deregulation, Asian financial crisis, asset-backed security, bank run, banking crisis, Bretton Woods, capital asset pricing model, Carmen Reinhart, centre right, correlation does not imply causation, credit crunch, Credit Default Swap, currency manipulation / currency intervention, debt deflation, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, Financial Instability Hypothesis, full employment, German hyperinflation, Gordon Gekko, Hyman Minsky, income inequality, inflation targeting, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low skilled workers, Mark Zuckerberg, moral hazard, mortgage debt, paradox of thrift, price stability, quantitative easing, rent-seeking, Robert Gordon, Ronald Reagan, Upton Sinclair, We are the 99%, working poor, Works Progress Administration

That seemed to many people like a permanent state: the optimism of the early New Deal years had taken a hard blow in 1937, when the economy suffered a second severe recession. Yet within two years the economy was booming, and unemployment was plunging. What happened? The answer is that finally someone began spending enough to get the economy humming again. That “someone” was, of course, the government. The object of that spending was basically destruction rather than construction; as the economists Robert Gordon and Robert Krenn put it, in the summer of 1940 the U.S. economy went to war. Long before Pearl Harbor, military spending soared as America rushed to replace the ships and other armaments sent to Britain as part of the lend-lease program, and as army camps were quickly built to house the millions of new recruits brought in by the draft. As military spending created jobs and family incomes rose, consumer spending also picked up (it would eventually be restrained by rationing, but that came later).

 

pages: 283 words: 73,093

Social Democratic America by Lane Kenworthy

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affirmative action, Affordable Care Act / Obamacare, barriers to entry, Celtic Tiger, centre right, clean water, collective bargaining, corporate governance, David Brooks, desegregation, Edward Glaeser, full employment, Gini coefficient, hiring and firing, Home mortgage interest deduction, illegal immigration, income inequality, invisible hand, labor-force participation, manufacturing employment, market bubble, minimum wage unemployment, new economy, postindustrial economy, purchasing power parity, race to the bottom, rent-seeking, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, school choice, shareholder value, sharing economy, Skype, Steve Jobs, too big to fail, Tyler Cowen: Great Stagnation, union organizing, universal basic income, War on Poverty, working poor, zero day

Moreover, even if productivity growth is sluggish in low-end services, it may, as Baumol himself points out, be rapid in other parts of the economy.44 Technological advance and improvements in work organization can yield leaps forward. The computer and communications revolutions already have generated considerable advance in manufacturing, finance, and an array of other services. They will soon do so in medicine, education, and elsewhere. In recent years, several analysts, including Robert Gordon and Tyler Cowen, have expressed pessimism about the likelihood of further productivity-enhancing innovations.45 The information technology revolution has largely run its course, they say, and in any case it never boosted productivity to the same degree as earlier innovations such as steam engines, railroads, electricity, the assembly line, indoor heating and air conditioning, running water, sewers, roads, and the internal combustion engine.

 

pages: 257 words: 68,143

Waiting for Superman: How We Can Save America's Failing Public Schools by Participant Media, Karl Weber

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collective bargaining, feminist movement, hiring and firing, index card, knowledge economy, Menlo Park, Robert Gordon, school choice, Silicon Valley, Upton Sinclair

Note: Graduation rates are for first-time, full-time students graduating in 150 percent normal time. 10 Becky Smerdon, Barbara Means, et al., Evaluation of the Bill & Melinda Gates Foundation’s High School Grants Initiative: 2001-2005 Final Report (Washington, DC: American Institutes for Research; Menlo Park, CA: SRI International, 2006). 11 Steven G. Rivkin, Eric A. Hanushek, and John F. Kain, “Teachers, Schools, and Academic Achievement,” Econometrica 73, no. 2 (March 2005): 417-458. 12 Robert Gordon, Thomas J. Kane, and Douglas O. Staiger, Identifying Effective Teachers Using Performance on the Job (Washington, DC: Hamilton Project, Brookings Institution, 2006). 13 Stephen Newton, “Stull Evaluations and Student Performance,” Los Angeles Unified School District, http://notebook.lausd.net/pls/ptl/docs/PAGE/CA_LAUSD/FLDR_ORGANIZATIONS/FLDR_PLCY_RES_DEV/PAR_DIVISION_MAIN/RESEARCH_UNIT/PUBLICATIONS/POLICY_REPORTS/IMPACT_STULL_186.PDF. 14 Kim Marshall, “It’s Time to Rethink Teacher Supervision and Evaluation,” Phi Delta Kappan, June 2005. 15 Scholastic and Bill & Melinda Gates Foundation, Primary Sources: America’s Teachers on America’s Schools (New York: Scholastic Inc., 2010). 16 Marguerite Roza, Frozen Assets: Rethinking Teacher Contracts Could Free Billions for School Reform (Washington, DC: Education Sector, 2007). 17 Valerie Russ, “Teachers, School District Approve Contract,” Philadelphia Daily News, January 23, 2010. 18 Scholastic and Bill & Melinda Gates Foundation, Primary Sources. 19 “Rocketship Education 2009 Academic Results Highest Performing in San Jose and Santa Clara County, Tops Palo Alto Unified,” www.rsed.org/news/RSED%2009%20Results%20Release%209.16%20FINAL.doc. 20 Mike Feinberg, personal communications, 2010.

 

pages: 843 words: 223,858

The Rise of the Network Society by Manuel Castells

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Apple II, Asian financial crisis, barriers to entry, Big bang: deregulation of the City of London, borderless world, British Empire, capital controls, complexity theory, computer age, Credit Default Swap, declining real wages, deindustrialization, delayed gratification, dematerialisation, deskilling, disintermediation, double helix, Douglas Engelbart, edge city, experimental subject, financial deregulation, financial independence, floating exchange rates, future of work, global village, Hacker Ethic, hiring and firing, Howard Rheingold, illegal immigration, income inequality, industrial robot, informal economy, information retrieval, intermodal, invention of the steam engine, invention of the telephone, inventory management, James Watt: steam engine, job automation, job-hopping, knowledge economy, knowledge worker, labor-force participation, labour market flexibility, labour mobility, laissez-faire capitalism, low skilled workers, manufacturing employment, Marshall McLuhan, means of production, megacity, Menlo Park, new economy, New Urbanism, offshore financial centre, oil shock, open economy, packet switching, planetary scale, popular electronics, post-industrial society, postindustrial economy, prediction markets, Productivity paradox, profit maximization, purchasing power parity, RAND corporation, Robert Gordon, Silicon Valley, Silicon Valley startup, social software, South China Sea, South of Market, San Francisco, special economic zone, spinning jenny, statistical model, Steve Jobs, Steve Wozniak, Ted Nelson, the built environment, the medium is the message, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, transaction costs, urban renewal, urban sprawl

Economic Policy Institute: Fig. 4.8 “Employment in the temporary help industry in the United States, 1982–1997,” analysis of Bureau of Labor Statistics data by Lawrence Mishel, Jared Bernstein and John Schmitt, The State of Working America 1998–99. Copyright © Cornell University Press/Economic Policy Institute, Ithaca and London. The Economist: Fig. 2.2 “Estimate of evolution of productivity in the United States, 1972–1999 (output per hour),” Bureau of Labor Statistics, elaborated by Robert Gordon in “The new economy: work in progress,” in The Economist, pp. 21–4. Copyright © 1999 The Economist, London (24 July). Reprinted by permission of the publisher. The Economist: Fig. 2.9 “Declining dividends payments,” in “Shares without the other bit” in The Economist, p. 135. Copyright © The Economist, London (20 November). Reprinted by permission of the publisher. The Economist: Fig. 5.1 “Media sales in 1998 of major media groups,” company reports; Veronis, Suhler and Associates; Zenith Media; Warburg Dillon Read; elaborated by The Economist, 1, p. 62.

And yet, even the statistical evidence provided to refute the notion of significant productivity increase, associated with information technology, seems to confirm the new trend in upward productivity growth, on the condition that data are interpreted in a dynamic perspective. Thus, the study most often cited to object to an upturn of productivity growth in the late 1990s is the one posted on the Internet in 1999 by a leading productivity economist, Robert Gordon.31 As shown in figure 2.2 and table 2.5, Gordon observed un upswing in productivity growth in the 1995–9 period, at about 2.15 percent per year, almost doubling the performance during 1972–95. However, decomposing productivity growth by sectors, he found that the overwhelming proportion of productivity growth was concentrated in computer manufacturing, which increased its productivity in 1995–9 at the stunning rate of 41.7 percent per year.

 

pages: 743 words: 189,512

The Big Fat Surprise: Why Butter, Meat and Cheese Belong in a Healthy Diet by Nina Teicholz

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Albert Einstein, correlation coefficient, correlation does not imply causation, Gary Taubes, Indoor air pollution, meta analysis, meta-analysis, phenotype, placebo effect, randomized controlled trial, Robert Gordon, the scientific method, Upton Sinclair

Series A, Containing Papers of a Mathematical and Physical Character 122, no. 790 (1929): 552–563. “in no way objectionable”: A. D. Barbour, “The Deposition and Utilization of Hydrogenation Isoleic Acid in the Animal Body,” Journal of Biological Chemistry 10, no. 1 (1933): 71. grew more slowly: A. K. Pickat, “The Nutritive Value of Margarine and Soy Bean-Oil,” Voprosy Pitaniia 2, no. 5 (1933): 34–60. yin-yang of conflicting results: Kenneth P. McConnel and Robert Gordon Sinclair, “Passage of Elaidic Acid through the Placenta and Also into the Milk of the Rat,” Journal of Biological Chemistry 118, no. 1 (1937): 118–129; E. Aaes-Jørgensen et al., “The Role of Fat in the Diet of Rats,” British Journal of Nutrition 10, no. 4 (1956): 292–304. was a 1944 study: H. J. Deuel et al., “Studies of the Comparative Nutritive Value of Fats: I. Growth Rate and Efficiency of Conversion of Various Diets to Tissue,” Journal of Nutrition 27 (1944): 107–121; H.

Nutrition and National Health: The Cantor Lectures. London: Faber and Faber Limited, 1936. McClellan, Walter S., Virgil R. Rupp, and Vincent Toscani. “Prolonged Meat Diets with a Study of the Metabolism of Nitrogen, Calcium, and Phosporus.” Journal of Biological Chemistry 87, no. 3 (July 1930): 669–680. McCollum, Elmer Verner. The Newer Knowledge of Nutrition. New York: MacMillan, 1921. McConnell, Kenneth P. and Robert Gordon Sinclair. “Passage of Elaidic Acid Through the Placenta and Also into the Milk of the Rat.” Journal of Biological Chemistry 118, no. 1 (1937): 123–129. McGill, Henry C., C. Alex McMahan, Edward E. Herderick, Gray T. Malcom, Richard E. Tracy, and Jack P. Strong. “Origin of Atherosclerosis in Childhood and Adolescence.” American Journal of Clinical Nutrition 72, no. 5 suppl. (November 2000): 1307S–1315S.

 

pages: 389 words: 98,487

The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor, and Why You Can Never Buy a Decent Used Car by Tim Harford

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Albert Einstein, barriers to entry, Berlin Wall, collective bargaining, congestion charging, Corn Laws, David Ricardo: comparative advantage, decarbonisation, Deng Xiaoping, Fall of the Berlin Wall, George Akerlof, invention of movable type, John Nash: game theory, John von Neumann, market design, Martin Wolf, moral hazard, new economy, price discrimination, Productivity paradox, race to the bottom, random walk, rent-seeking, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, sealed-bid auction, second-price auction, second-price sealed-bid, Shenzhen was a fishing village, special economic zone, spectrum auction, The Market for Lemons, Thomas Malthus, trade liberalization, Vickrey auction

The most famous bullish book was James Glassman and Kevin Hassett’s Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market (New York: Times Books, 1999); the authors defend it in the Wall Street Journal, August 1, 2002, “Dow 36,000 revisited,” available at http://www.aei.org/news/ filter.,newsID.14128/news_detail.asp) and http://www.techcentralstation.com/ 120504A.html. The prediction that the Dow will hit 36,000 in 3 to 5 years is made • 257 • N O T E S on page 18 of “Dow 36,000,” and economist Brad DeLong is extremely dismissive: http://www.j-bradford-delong.net/movable_type/2005_archives/000025.html. How transformational is the “new economy”? Robert Gordon has given the definitive skeptical statement in “Does the ‘New Economy’ Measure up to the Great Inventions of the Past?” Journal of Economic Perspectives 4, no.14 (Fall 2000): 49–74. Paul David’s argument that new technology takes time to have a real economic impact is most famously expounded in “The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox,” The American Economic Review Papers and Proceedings, May 1990, 355–61.

 

pages: 364 words: 104,697

Were You Born on the Wrong Continent? by Thomas Geoghegan

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Albert Einstein, American Society of Civil Engineers: Report Card, banking crisis, Berlin Wall, collective bargaining, corporate governance, cross-subsidies, dark matter, David Brooks, declining real wages, deindustrialization, ending welfare as we know it, facts on the ground, Gini coefficient, haute cuisine, income inequality, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labour market flexibility, laissez-faire capitalism, low skilled workers, Martin Wolf, McJob, minimum wage unemployment, mittelstand, offshore financial centre, payday loans, pensions crisis, Plutocrats, plutocrats, purchasing power parity, Ralph Waldo Emerson, Robert Gordon, Ronald Reagan: Tear down this wall, Saturday Night Live, Silicon Valley, The Wealth of Nations by Adam Smith, Thorstein Veblen, union organizing, Wolfgang Streeck, women in the workforce

No, I want to focus on whether this extra GDP is making anyone better off, and even whether it might even be making everyone worse off. (Then, after that, we can focus on Barbara and Isabel in their respectively well-off but not superrich lifestyles.) Okay—first let’s start squeezing some of the “fat” out of Barbara’s GDP per capita. We have to put our GDP on a diet, or deflate some of the bloat in it, before we can decide which woman is better off. Let’s take a nonpolitical thing, like the weather. Robert Gordon, one of our leading economists, a professor at Northwestern, makes the point about heat and air-conditioning in the U.S.: the extremes in our weather help pump up our GDP. We spend more on oil, coal, even water. Like Sherman’s army, the whole U.S. population is moving to the South, where it’s ever hotter. Like the Mormons, the population also is heading into the West, deeper into the desert without water to drink.

 

pages: 605 words: 110,673

Drugs Without the Hot Air by David Nutt

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British Empire, double helix, en.wikipedia.org, knowledge economy, meta analysis, meta-analysis, offshore financial centre, randomized controlled trial, risk tolerance, Robert Gordon, War on Poverty

, Peter Bebergal, URL-121, June 9th 2008 13 use in problem solving• LSD – The Problem Solving Psychedelic, PG Stafford and BH Golightly, Award Books, 1967 14 Francis Crick• Nobel Prize Genius Crick was High on LSD when he discovered the secret of life, Alun Rees, the Mail on Sunday, August 8th 2004 15 Kary Mullis• BBC Horizon – Psychedelic Science – DMT, LSD, Ibogaine – Part 5, BBC, 1997 16 polymerase chain reaction (PCR)• The polymerase chain reaction is used to “amplify” a small amount of DNA, to produce a larger quantity that makes testing possible or easier. It is used every day in every aspect of life sciences, including forensic investigation and medical diagnosis. 17 There are many other kinds of psychedelic drugs• High Society, Mike Jay, Thames & Hudson, 2010 18 few recorded incidents of people taking them accidentally• As above. 19 Valeda mushroom ceremony in Mexico• Seeking the magic mushroom, Robert Gordon Wasson, Life Magazine, June 10th 1957 20 a licence once someone has participated in a workshop, or perhaps passed a test, to ensure that they know how to use them safely• Will Harvard drop acid again?, Peter Bebergal, URL-121, June 9th 2008 15 The War on Drugs, and drugs in war 1“Public enemy number one in the United States is drug abuse. In order to fight and defeat this enemy, it is necessary to wage a new, all-out offensive.”

 

pages: 378 words: 110,518

Postcapitalism: A Guide to Our Future by Paul Mason

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Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business process, butterfly effect, call centre, capital controls, Claude Shannon: information theory, collaborative economy, collective bargaining, Corn Laws, corporate social responsibility, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, Downton Abbey, en.wikipedia.org, energy security, eurozone crisis, factory automation, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, full employment, future of work, game design, income inequality, inflation targeting, informal economy, Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kevin Kelly, knowledge economy, knowledge worker, late capitalism, low skilled workers, market clearing, means of production, Metcalfe's law, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, payday loans, post-industrial society, precariat, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, union organizing, universal basic income, urban decay, urban planning, wages for housework, women in the workforce

Yet the persistence of low growth has now driven even mainstream economists beyond such complacency. Larry Summers, Treasury Secretary under Bill Clinton and an architect of bank deregulation, shook the economics world in 2013 by warning that the West faced ‘secular stagnation’ – that is, low growth for the foreseeable future. ‘Unfortunately,’ he admitted, low growth ‘has been present for a long time, but has been masked by unsustainable finances’.15 Veteran US economist Robert Gordon went further, predicting persistent low growth in the USA for the next twenty-five years, as a result of lower productivity, an ageing population, high debts and growing inequality.16 Remorselessly, capitalism’s failure to revive has moved concerns away from the scenario of a ten-year stagnation caused by overhanging debts, towards one where the system never regains its dynamism. Ever. To understand what is rational about these premonitions of doom, we need critically to examine four things that at first allowed neoliberalism to flourish but which have begun to destroy it.

 

pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

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Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, bonus culture, Bretton Woods, business climate, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, corporate governance, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, Fractional reserve banking, full employment, Gordon Gekko, greed is good, Hyman Minsky, income inequality, inflation targeting, invention of the wheel, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, labour market flexibility, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, means of production, Menlo Park, moral hazard, moveable type in China, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Plutocrats, plutocrats, price stability, principal–agent problem, profit motive, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, We are the 99%, Wolfgang Streeck

Or they can treat the crisis as a wake-up call to fix what debt has papered over in the last few decades. For better or worse, the narrative that persuades these countries’ governments and publics will determine their future – and that of the global economy.205 Whether the advanced countries would be able anyway to revive innovation and productivity growth is an open question. Northwestern University’s Robert Gordon has forecast a slower rate of productivity improvement in the US than in the past because there is nothing in prospect that matches the huge changes wrought by such advances as steam power, railways, electrification, the internal combustion engine, or even such simple things as running water and home sanitation. He argues that the transformative power of the internet is less potent than these earlier innovations.

 

pages: 376 words: 109,092

Paper Promises by Philip Coggan

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accounting loophole / creative accounting, balance sheet recession, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Madoff, Black Swan, Bretton Woods, British Empire, call centre, capital controls, Carmen Reinhart, carried interest, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, debt deflation, delayed gratification, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, falling living standards, fear of failure, financial innovation, financial repression, fixed income, floating exchange rates, full employment, German hyperinflation, global reserve currency, hiring and firing, Hyman Minsky, income inequality, inflation targeting, Isaac Newton, joint-stock company, Kenneth Rogoff, labour market flexibility, Long Term Capital Management, manufacturing employment, market bubble, market clearing, Martin Wolf, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Nick Leeson, Northern Rock, oil shale / tar sands, paradox of thrift, peak oil, pension reform, Plutocrats, plutocrats, Ponzi scheme, price stability, principal–agent problem, purchasing power parity, quantitative easing, QWERTY keyboard, railway mania, regulatory arbitrage, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, time value of money, too big to fail, trade route, tulip mania, value at risk, Washington Consensus, women in the workforce

Low real rates should be a sign of low expected growth. So to the extent that the discount rate falls, expected future cashflows should fall as well. 20 Grantham, ‘Night of the Living Fed’. 8. RIDING THE GRAVY TRAIN 1 J. K. Galbraith, Money: Whence It Came, Where It Went, 2nd edn, London, 1995. 2 Lawrence Mishel, ‘CEO-to-Worker Pay Imbalance Grows’, Economic Policy Institute, June 2006. 3 Ian Dew-Becker and Robert Gordon, ‘Where Did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income’, National Bureau of Economic Research, Working Paper 11842. 4 Edward N. Wolff, ‘Recent Trends in Household Wealth in the United States: Rising Debt and the Middle Class Squeeze’, an update to 2007 Working Paper no. 589, Levy Economics Institute, March 2010. 5 Raghuram Rajan, Fault Lines: How Hidden Fractures Threaten the World Economy, Princeton, 2010. 6 ‘Finance, Financial Sector Policies and Long-Run Growth’, by Asli Demir-guc-Kunt of the World Bank and Ross Levine of Brown University. 7 Adair Turner, ‘What do banks do?

 

pages: 935 words: 267,358

Capital in the Twenty-First Century by Thomas Piketty

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accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, Branko Milanovic, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, German hyperinflation, Gini coefficient, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, market bubble, means of production, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, pension reform, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, The Nature of the Firm, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, very high income, We are the 99%

If we look at the last few decades, we find even lower growth rates in the wealthiest countries: between 1990 and 2012, per capita output grew at a rate of 1.6 percent in Western Europe, 1.4 percent in North America, and 0.7 percent in Japan.21 It is important to bear this reality in mind as I proceed, because many people think that growth ought to be at least 3 or 4 percent per year. As noted, both history and logic show this to be illusory. With these preliminaries out of the way, what can we say about future growth rates? Some economists, such as Robert Gordon, believe that the rate of growth of per capita output is destined to slow in the most advanced countries, starting with the United States, and may sink below 0.5 percent per year between 2050 and 2100.22 Gordon’s analysis is based on a comparison of the various waves of innovation that have succeeded one another since the invention of the steam engine and introduction of electricity, and on the finding that the most recent waves—including the revolution in information technology—have a much lower growth potential than earlier waves, because they are less disruptive to modes of production and do less to improve productivity across the economy.

The history of the past two centuries makes it highly unlikely that per capita output in the advanced countries will grow at a rate above 1.5 percent per year, but I am unable to predict whether the actual rate will be 0.5 percent, 1 percent, or 1.5 percent. The median scenario I will present here is based on a long-term per capita output growth rate of 1.2 percent in the wealthy countries, which is relatively optimistic compared with Robert Gordon’s predictions (which I think are a little too dark). This level of growth cannot be achieved, however, unless new sources of energy are developed to replace hydrocarbons, which are rapidly being depleted.23 This is only one scenario among many. An Annual Growth of 1 Percent Implies Major Social Change In my view, the most important point—more important than the specific growth rate prediction (since, as I have shown, any attempt to reduce long-term growth to a single figure is largely illusory)—is that a per capita output growth rate on the order of 1 percent is in fact extremely rapid, much more rapid than many people think.

 

pages: 586 words: 159,901

Wall Street: How It Works And for Whom by Doug Henwood

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accounting loophole / creative accounting, affirmative action, Andrei Shleifer, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, capital asset pricing model, capital controls, central bank independence, corporate governance, correlation coefficient, correlation does not imply causation, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, dematerialisation, diversification, diversified portfolio, Donald Trump, equity premium, Eugene Fama: efficient market hypothesis, experimental subject, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, George Gilder, hiring and firing, Hyman Minsky, implied volatility, index arbitrage, index fund, interest rate swap, Internet Archive, invisible hand, Isaac Newton, joint-stock company, Joseph Schumpeter, kremlinology, labor-force participation, late capitalism, law of one price, liquidationism / Banker’s doctrine / the Treasury view, London Interbank Offered Rate, Louis Bachelier, market bubble, Mexican peso crisis / tequila crisis, microcredit, minimum wage unemployment, moral hazard, mortgage debt, mortgage tax deduction, oil shock, payday loans, pension reform, Plutocrats, plutocrats, price mechanism, price stability, prisoner's dilemma, profit maximization, Ralph Nader, random walk, reserve currency, Richard Thaler, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, shareholder value, short selling, Slavoj Žižek, South Sea Bubble, The Market for Lemons, The Nature of the Firm, The Predators' Ball, The Wealth of Nations by Adam Smith, transaction costs, transcontinental railway, women in the workforce, yield curve, zero-coupon bond

While it's not clear whether that U.S. outperformance is a permanent thing or just a shorter-term cyclical affair, it can't be denied that the old Axis powers experienced extraordinary growth in investment and income during the first 45 years after Wodd War II's end. It may be that as capitalist economies mature, and liquid balances swell, they may tend toward a more fluid style of finance and ownership. irrational expectations Information asymmetry theorists generally assume that market participants are the rational self-maximizers of mainstream theory; they can just never be certain of the knowledge and motives of their counterparts. As Robert Gordon said of the closely related New Keynesian school, "any attempt to build a model based on irrational behavior or submaximizing behavior is viewed as cheating" (quoted in Dymski 1994). While it's safe to believe that financial players are self-maximizers, their rationality is another matter. Academic students of finance have increasingly recognized that lots of old-fashioned impressionistic notions about market volatility may be truer than rationalists could imagine.

 

pages: 413 words: 119,587

Machines of Loving Grace: The Quest for Common Ground Between Humans and Robots by John Markoff

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A Declaration of the Independence of Cyberspace, AI winter, airport security, Apple II, artificial general intelligence, augmented reality, autonomous vehicles, Baxter: Rethink Robotics, Bill Duvall, bioinformatics, Brewster Kahle, Burning Man, call centre, cellular automata, Chris Urmson, Claude Shannon: information theory, Clayton Christensen, clean water, cloud computing, collective bargaining, computer age, computer vision, crowdsourcing, Danny Hillis, DARPA: Urban Challenge, data acquisition, Dean Kamen, deskilling, don't be evil, Douglas Engelbart, Douglas Hofstadter, Dynabook, Edward Snowden, Elon Musk, Erik Brynjolfsson, factory automation, From Mathematics to the Technologies of Life and Death, future of work, Galaxy Zoo, Google Glasses, Google X / Alphabet X, Grace Hopper, Gödel, Escher, Bach, Hacker Ethic, haute couture, hive mind, hypertext link, indoor plumbing, industrial robot, information retrieval, Internet Archive, Internet of things, invention of the wheel, Jacques de Vaucanson, Jaron Lanier, Jeff Bezos, job automation, John Conway, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, knowledge worker, Kodak vs Instagram, labor-force participation, loose coupling, Mark Zuckerberg, Marshall McLuhan, medical residency, Menlo Park, Mother of all demos, natural language processing, new economy, Norbert Wiener, PageRank, pattern recognition, pre–internet, RAND corporation, Ray Kurzweil, Richard Stallman, Robert Gordon, Rodney Brooks, Sand Hill Road, Second Machine Age, self-driving car, semantic web, shareholder value, side project, Silicon Valley, Silicon Valley startup, Singularitarianism, skunkworks, Skype, social software, speech recognition, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, strong AI, superintelligent machines, technological singularity, Ted Nelson, telemarketer, telepresence, telepresence robot, Tenerife airport disaster, The Coming Technological Singularity, the medium is the message, Thorstein Veblen, Turing test, Vannevar Bush, Vernor Vinge, Watson beat the top human players on Jeopardy!, Whole Earth Catalog, William Shockley: the traitorous eight

Faltering Innovation Confronts the Six Headwinds,” Policy Insight 63 (September 2012), Centre for Economic Policy Research, http://www.cepr.org/sites/default/files/policy_insights/PolicyInsight63.pdf. 45.Robert J. Gordon, “The Demise of U.S. Economic Growth: Restatement, Rebuttal, and Reflections,” NBER Working Paper No. 19895, February 2014, National Bureau of Economic Research, http://www.nber.org/papers/w19895. 46.“Robert Gordon, Erik Brynjolfsson Debate the Future of Work at TED 2013,” TED Blog video, April 23, 2013, https://www.you tube.com/watch?v=ofWK5WglgiI. 47.Robert J. Gordon, “Why Innovation Won’t Save Us,” Wall Street Journal, December 21, 2012, http://online.wsj.com/news/articles/SB10001424127887324461604578191781756437940. 48.Gordon, “The Demise of U.S. Economic Growth.” 49.Craig Trudell, Yukiko Hagiwara, and Jie Ma, “Humans Replacing Robots Herald Toyota’s Vision of Future,” BloombergBusiness, April 7, 2014, http://www.bloomberg.com/news/2014-04-06/humans-replacing-robots-herald-toyota-s-vision-of-future.html. 50.Stewart Brand, “We Are As Gods,” Whole Earth Catalog, Fall 1968, http://www.wholeearth.com/issue/1010/article/195/we.are.as.gods. 51.Amir Efrati, “Google Beat Facebook for DeepMind, Creates Ethics Board,” Information, January 27, 2014, https://www.theinformation.com/google-beat-facebook-for-deepmind-creates-ethics-board. 52.

 

pages: 590 words: 153,208

Wealth and Poverty: A New Edition for the Twenty-First Century by George Gilder

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affirmative action, Albert Einstein, Bernie Madoff, British Empire, capital controls, cleantech, cloud computing, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, deindustrialization, diversified portfolio, Donald Trump, equal pay for equal work, floating exchange rates, full employment, George Gilder, Home mortgage interest deduction, Howard Zinn, income inequality, invisible hand, Jane Jacobs, Jeff Bezos, job automation, job-hopping, Joseph Schumpeter, knowledge economy, labor-force participation, margin call, Mark Zuckerberg, means of production, medical malpractice, minimum wage unemployment, money: store of value / unit of account / medium of exchange, Mont Pelerin Society, moral hazard, mortgage debt, non-fiction novel, North Sea oil, paradox of thrift, Plutocrats, plutocrats, Ponzi scheme, post-industrial society, price stability, Ralph Nader, rent control, Robert Gordon, Ronald Reagan, Silicon Valley, Simon Kuznets, skunkworks, Steve Jobs, The Wealth of Nations by Adam Smith, Thomas L Friedman, upwardly mobile, urban renewal, volatility arbitrage, War on Poverty, women in the workforce, working poor, working-age population, yield curve

John Hotson of Waterloo University, also in Canada, developed the idea. Walter Eltis of Oxford University broached it in his important book, written with Robert Bacon, Britain’s Economic Problem: Too Few Producers. It first surfaced in the United States, perhaps, at a conference on inflation and income tax at the Brookings Institution in Washington in 1975. Arnold Lovell of the British Treasury, Vito Tanzi of the International Monetary Fund, and Robert Gordon of Northwestern University all suggested that rising income taxes may be inflationary because workers attempt to keep their after tax earnings constant. Gordon cited studies in the United States indicating that wages rise by one-fifth of any income-tax hike. Lovell referred to the English experience that the rise in wages is much greater with higher levels of inflation and inflationary consciousness among workers.6 Orthodox Brookings economist George Perry then stepped in to keep matters under control.

 

pages: 464 words: 127,283

Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia by Anthony M. Townsend

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1960s counterculture, 4chan, A Pattern Language, Airbnb, Amazon Web Services, anti-communist, Apple II, Bay Area Rapid Transit, Burning Man, business process, call centre, carbon footprint, charter city, chief data officer, clean water, cleantech, cloud computing, computer age, congestion charging, connected car, crack epidemic, crowdsourcing, DARPA: Urban Challenge, data acquisition, Deng Xiaoping, East Village, Edward Glaeser, game design, garden city movement, Geoffrey West, Santa Fe Institute, George Gilder, ghettoisation, global supply chain, Grace Hopper, Haight Ashbury, Hedy Lamarr / George Antheil, hive mind, Howard Rheingold, interchangeable parts, Internet Archive, Internet of things, Jacquard loom, Jacquard loom, Jane Jacobs, jitney, John Snow's cholera map, Khan Academy, Kibera, knowledge worker, load shedding, M-Pesa, Mark Zuckerberg, megacity, mobile money, mutually assured destruction, new economy, New Urbanism, Norbert Wiener, Occupy movement, openstreetmap, packet switching, patent troll, place-making, planetary scale, popular electronics, RFC: Request For Comment, RFID, ride hailing / ride sharing, Robert Gordon, self-driving car, sharing economy, Silicon Valley, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, smart grid, smart meter, social graph, social software, social web, special economic zone, Steve Jobs, Steve Wozniak, Stuxnet, supply-chain management, technoutopianism, Ted Kaczynski, telepresence, The Death and Life of Great American Cities, too big to fail, trade route, Tyler Cowen: Great Stagnation, Upton Sinclair, uranium enrichment, urban decay, urban planning, urban renewal, Vannevar Bush, working poor, working-age population, X Prize, Y2K, zero day, Zipcar

If the malaise of the developing world is too much growth, for the rich cities of the global north it may be too little. If smart technology doesn’t improve our productivity, we might not be able to pay for further improvements in energy efficiency. Many hope for a return to the “New Economy” of the late 1990s, when the United States experienced a historic period of rapid increases in productivity driven, we thought, by advances in information technology. But recent research has questioned this explanation. Robert Gordon at Northwestern University notes that the greatest productivity gains from information technology during that expansion were in manufacturing of durable goods, and that it was small in historical terms. “Computers and the internet do not measure up to the Great Inventions of the late nineteenth and early twentieth century,” he argued, “and in this sense do not merit the label of ‘Industrial Revolution.”81 Furthermore, these gains soon disappeared and most developed economies saw little productivity growth during the 2000s.

 

pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

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1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, complexity theory, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, labour market flexibility, labour mobility, LNG terminal, low cost carrier, manufacturing employment, mass affluent, megacity, Mercator projection, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Peace of Westphalia, peak oil, Peter Thiel, Plutocrats, plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

Even as China’s fixed asset growth decreases, the gains from efficient mobility are evident for everyday workers, Alibaba shoppers, and millions of internal tourists and migrants taking advantage of affordable transportation all across the country. The lesson from America’s postwar period and China today is that infrastructure is not a one-off investment but a set of connective arteries to be constantly nurtured. Prominent American economists such as Robert Gordon of Northwestern and Tyler Cowen of George Mason argue that the U.S. economy is plagued by falling productivity gains, poor infrastructure, a technological innovation plateau, declining education standards, and rising inequality; its transportation system remains too slow and inefficient to meet its export targets. And yet, deeper capital investment is the largest source of productivity growth in the U.S. economy.

 

pages: 437 words: 113,173

Age of Discovery: Navigating the Risks and Rewards of Our New Renaissance by Ian Goldin, Chris Kutarna

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, Airbnb, Albert Einstein, AltaVista, Asian financial crisis, asset-backed security, autonomous vehicles, banking crisis, barriers to entry, battle of ideas, Berlin Wall, bioinformatics, bitcoin, Bonfire of the Vanities, clean water, collective bargaining, Colonization of Mars, Credit Default Swap, crowdsourcing, cryptocurrency, Dava Sobel, demographic dividend, Deng Xiaoping, Doha Development Round, double helix, Edward Snowden, Elon Musk, en.wikipedia.org, epigenetics, experimental economics, failed state, Fall of the Berlin Wall, financial innovation, full employment, Galaxy Zoo, global supply chain, Hyperloop, immigration reform, income inequality, indoor plumbing, industrial robot, information retrieval, intermodal, Internet of things, invention of the printing press, Isaac Newton, Islamic Golden Age, Khan Academy, Kickstarter, labour market flexibility, low cost carrier, low skilled workers, Lyft, Malacca Straits, megacity, Mikhail Gorbachev, moral hazard, Network effects, New Urbanism, non-tariff barriers, Occupy movement, On the Revolutions of the Heavenly Spheres, open economy, Panamax, personalized medicine, Peter Thiel, post-Panamax, profit motive, rent-seeking, reshoring, Robert Gordon, Search for Extraterrestrial Intelligence, Second Machine Age, self-driving car, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, smart grid, Snapchat, special economic zone, spice trade, statistical model, Stephen Hawking, Steve Jobs, Stuxnet, TaskRabbit, too big to fail, trade liberalization, trade route, transaction costs, transatlantic slave trade, uranium enrichment, We are the 99%, We wanted flying cars, instead we got 140 characters, working poor, working-age population, zero day

Economists figure that this is a good way to track the technological progress of a society. (“Technology” includes more than just machines. It also includes things like laws, regulations and business models.) Depending on whether I harvest my crop with a two-handed scythe or with a GPS-guided combine, the number—the value of one hour’s work—will vary quite a lot. Right now, this number is worrisome. In 2012 Robert Gordon, a guru of US growth economics, pored over a century of US productivity data and concluded that all our recent technological achievements don’t amount to much in real terms. For the first 80 years of his study, from 1891 to 1972, US labor productivity grew about 2.3 percent per year. That’s sizzling-fast in macroeconomic terms (at that rate, productivity doubles with each new generation), and its speed and duration are proof that the technological changes to which those generations bore witness totally transformed their lives for the better.

 

pages: 515 words: 142,354

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

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bank run, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bretton Woods, capital controls, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, investor state dispute settlement, invisible hand, Kenneth Rogoff, knowledge economy, labour market flexibility, labour mobility, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

Fiscal policy, directed at needed investments, needs to be put more in the center of macro-stabilization. The United States and the EU both need large amounts of investment for retrofitting their economies for global warming. Both need large investments in education and technology, if there are going to be continuing increases in standards of living. Reduced investments in basic research (as a percentage of GDP) may well result in a slower pace of innovation in the future. Recently, Robert Gordon18 has suggested that we are moving into an era of a much slower pace of increase in standards of living. But this is at least in part a consequence of decisions being made, on both sides of the Atlantic, to invest less in basic research, technology, and education: it is from these that future increases in standards of living will largely come. This runs counter, of course, to conservative ideology focused on downsizing the government.

 

pages: 1,335 words: 336,772

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance by Ron Chernow

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bank run, banking crisis, Big bang: deregulation of the City of London, Bolshevik threat, Boycotts of Israel, Bretton Woods, British Empire, California gold rush, capital controls, collective bargaining, Etonian, financial deregulation, German hyperinflation, index arbitrage, interest rate swap, margin call, Monroe Doctrine, North Sea oil, oil shale / tar sands, paper trading, Plutocrats, plutocrats, Robert Gordon, Ronald Reagan, short selling, strikebreaker, the market place, the payments system, too big to fail, transcontinental railway, Yom Kippur War, young professional

., letter to Frances Tracy Morgan, March ?, 1889. 50. Paul G. Pennoyer and Frances Tracy Pennoyer, interview with author. 51. Sinclair, Corsair, p. 115. 52. Ibid., p. 22. 53. Smalley, Anglo-American Memories, p. 230. 54. Josephson, Money Lords, p. 15. 55. Sinclair, Corsair, p. 22. 56. Smalley, Anglo-American Memories, p. 230. 57. NYT, February 19, 1964. 58. TWL, Box 110, Folder 3, memorandum to Robert Gordon Wasson, March 27, 1939. 59. Carosso, Morgans, p. 465. 60. Schacht, Confessions of the Old Wizard, pp. 97–98. 61. Carosso, Morgans, p. 366. 62. Ibid., p. 365 63. Winkler, Morgan the Magnificent, p. 116. 64. Moody, Masters of Capital, p. 29. 65. Leffingwell, Memorial of Charles Steele. 66. SEP, March 12, 1927. CHAPTER FIVE: CORNER 1. Sampson, Money Lenders, p. 60. 2.

Sampson, Money Lenders, p. 65. 68. Jackson, J. P. Morgan, p. 249. 69. Sinclair, Corsair, p. 205. 70. JPMJ, Box 32, cable to J. P. Morgan, Sr., June 23, 1911. 71. SEP, August 26, 1922. 72. NYT, December 16, 1956. Sinclair, Corsair, p. 207. 73. JSM, Extracts of Correspondence—Edward C. Grenfell—Count Maurice de Bosdari, p. 88. 74. RCL, Group 1030, Series I, Box 7, Folder 169, memorandum to Robert Gordon Wasson, February 23, 1945. CHAPTER SEVEN: PANIC 1. JPMJ, Box 31, cable to J. P. Morgan, Sr., March 25, 1907. 2. Ibid., cable from J. P. Morgan, Sr., March 25, 1907. 3. Pringle, Theodore Roosevelt, p. 436. 4. Garraty, Right-Hand Man, p. 206. 5. Chandler, Benjamin Strong, p. 28. 6. Sinclair, Corsair, p. 179 7. HLS, Folder 2, notes of Ben Strong about Henry P. Davison. 8.

 

pages: 936 words: 252,313

Good Calories, Bad Calories: Challenging the Conventional Wisdom on Diet, Weight Control, and Disease by Gary Taubes

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Albert Einstein, California gold rush, cognitive dissonance, collaborative editing, Drosophila, experimental subject, Gary Taubes, invention of agriculture, John Snow's cholera map, meta analysis, meta-analysis, phenotype, placebo effect, Ralph Nader, randomized controlled trial, Richard Feynman, Richard Feynman, Robert Gordon, the scientific method, Thomas Kuhn: the structure of scientific revolutions, unbiased observer, Upton Sinclair

Still, because the brain and central nervous system typically burn 120 to 130 grams of glucose a day, nutritionists insisted (as many still do) that carbohydrates must be our primary fuel, and they remained skeptical of the notion that fat plays any role in energy balance other than as a long-term reserve for emergencies. Among physiologists and biochemists, any such skepticism began to evaporate after Wertheimer’s review of fat metabolism appeared in 1948. It vanished after the 1956 publication of papers by Vincent Dole at Rockefeller University, Robert Gordon at NIH, and Sigfrid Laurell of the University of Lund in Sweden that reported the development of a technique for measuring the concentration of fatty acids in the circulation. All three articles suggested that these fatty acids were the form in which fat is burned for fuel in the body. The concentration of fatty acids in the circulation, they reported, is surprisingly low immediately after a meal, when blood-sugar levels are highest, but then increases steadily in the hours that follow, as the blood sugar ebbs.

 

pages: 602 words: 177,874

Thank You for Being Late: An Optimist's Guide to Thriving in the Age of Accelerations by Thomas L. Friedman

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3D printing, additive manufacturing, affirmative action, Airbnb, AltaVista, Amazon Web Services, autonomous vehicles, Ayatollah Khomeini, barriers to entry, Berlin Wall, Bernie Sanders, bitcoin, blockchain, business process, call centre, centre right, Clayton Christensen, clean water, cloud computing, corporate social responsibility, crowdsourcing, David Brooks, demand response, demographic dividend, demographic transition, Deng Xiaoping, Donald Trump, Erik Brynjolfsson, failed state, Fall of the Berlin Wall, Ferguson, Missouri, first square of the chessboard / second half of the chessboard, Flash crash, game design, gig economy, global supply chain, illegal immigration, immigration reform, income inequality, indoor plumbing, Internet of things, invention of the steam engine, inventory management, Jeff Bezos, job automation, John von Neumann, Khan Academy, Kickstarter, knowledge economy, knowledge worker, land tenure, linear programming, low skilled workers, Lyft, Mark Zuckerberg, Maui Hawaii, Menlo Park, Mikhail Gorbachev, mutually assured destruction, pattern recognition, planetary scale, pull request, Ralph Waldo Emerson, ransomware, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, smart cities, South China Sea, Steve Jobs, TaskRabbit, Thomas L Friedman, transaction costs, Transnistria, urban decay, urban planning, Watson beat the top human players on Jeopardy!, WikiLeaks, women in the workforce, Y2K, Yogi Berra

Show Me the Money But if these transformations are real, why is it taking so long for them to show up in the productivity figures, as economists define them—the ratio of the output of goods and services to the labor hours devoted to the production of that output? Since productivity improvements drive growth, that is an important and now a hotly debated subject among economic writers. The economist Robert Gordon has made a compelling case in his book The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War that the days of steadily rising growth are probably behind us. He believes all the big gains were made in the “special century” between 1870 and 1970—with the likes of automobiles, radio, television, indoor plumbing, electrification, vaccines, clean water, air travel, central heating, women’s empowerment, and air-conditioning and antibiotics.