American Madness

Intelligent Criticism in the Service of a Better Nation

Technology unfulfilled: the lack of progress

Posted by Josh Friedlander | 1 Comment

we still haven't 'met' the JetsonsI’m listening to a fascinating speaker right now. He’s considering how the serious and fantastical expectations of technological progress have been substantially unfulfilled. We enjoyed enormous progress through the 60s and seem to have stalled, replacing real productivity gains with theoretical improvements. He raises some fascinating points:

Biotech, Genomics, Alternative Energy, Artificial Intelligence? Progress has been too slow.

The common rejoinder is that computers have massively increased productivity. That’s a dubious argument. They create a tremendous amount of noise with which knowledge workers now must contend and an entire sub industry has arisen to cater to this problem without solving it. Computers also create an illusion that we have a better understanding of just about everything.

More information does not equal better decisions or more efficiency. Where computers have added efficiency, I’m not convinced they have been overly helpful. You can buy useless material items much more quickly than ever before, but have you visited a doctor’s office lately? People with an agenda to push can compute any kinds of statistics they like, but information is a poor replacement for reasoned thinking, of which there is far too little.

The ability to connect people has begun destroying what I’ll call “knowledge brokers,” such as journalists and lawyers, who relied on their ability to parse and apply rare information to provide value. In many cases, they hoarded information or distorted it, but was that such a high price for their value in other instances? As the volume of information they controlled dried we also lost the benefit of their pattern recognition. Is it good that journalism is dying? Perhaps, but there was some value to having the real estate listings and daily coverage support in-depth coverage. Lawyers who are no longer needed to handle the paperwork for simple divorces and contracts (now available online), are also unable to take less profitable cases. Free information does NOT support the long tail in all instances or even in most.

The speaker was addressing a room full of investors, so his point in talking about the slowdown in technological progress was to point out that without increasing productivity, there can not be a concurrent increase in the prices of one’s investments. What supports a rising stock market is rising corporate productivity.

Try to imagine the thoughts of academics in the 70s who grew up witnessing the proliferation of cars and planes and electricity and roads across the U.S., taking us from a nation that was, for a time, poorly clothed and poorly fed to one of incredible prosperity. That 40-50 year cycle is not repeating. We’re still driving the same oil-guzzling cars. We’re still wearing the same fiber-based clothes. We’re still watching the same TVs, and the picture quality of the new flat screens is actually worse in many instances than for CRTs. How do you heat your house? How’s the quality of the food you eat?

It would have been astounding if we’d continued to substantially improve the human condition in our country at the prior rate, but, from the point of view of investment, thinking that the stock market could continue to grow at some high rate basically requires you to think that such productivity gains will continue.

There are huge bottlenecks, starting with energy costs. What has made all industrial progress possible has been the exploitation of carbon fuel. As that energy becomes more expensive, “labor” returns back towards what humans can push, pull or lift. Of course, carbon can sustain us for a long time, even when oil becomes more expensive (coal, natural gas), but oil was a great fuel in terms of the ease with which it can be transported and the energy it produces relative to its weight and mass. We have a long way to go in capturing solar energy and, more importantly, in storing it. We need battery technology that has either been hidden away or does not yet exist.

This is simplistic-seeming, but it’s really an issue: to meet the kind of productivity gains that investors expect requires cheap energy. We must solve the problem, but governments and people continue to hesitate to invest in the solutions. Why is the stock market back to it’s pre-1997 levels? Because the market gains outpaced productivity.


One Response to “Technology unfulfilled: the lack of progress”

  1. Jason Ihle
    November 20th, 2008 @

    Progress tends to be the result of need, doesn’t it?

    Computers get smaller and faster with greater storage capacity as the need for those things increases.

    Since we’re talking about energy alternatives, aren’t you the one, Josh, who used to argue our freshman year that we should waste as much oil as possible because oil running out will be the greatest thing to happen to the world since it’s discovery as an abundant source of energy. I disagreed with you vehemently at the time, but I’m on board. No, I don’t think we should do our best to waste oil, but I do agree with the principle of the argument – that alternative energy sources will be perfected faster (through monetary investment) when it becomes cost beneficial.

    I don’t believe there’s this conspiracy by the oil companies to prevent new technologies from being developed (as I’ve heard argued before) or that the oil companies own the patents on gadgets that harness energy in more efficient ways. The people who believe that fail to understand that business is all about the bottom line. Oil men aren’t attached to oil for ideological reasons. It’s money. If it were worth their while to invest in alternative energy they would. Why would they want to get out of the energy business?

    This is why the recent drops in oil prices are…whatever the opposite of ‘a blessing in disguise’ is. The more expensive goes the oil, the faster comes the new technology. End basic supply and demand tells us that the less oil there is, (assuming demand remains constant or increases) the more expensive it gets.

    Don’t worry, solar energy is coming eventually. But first I think we’re going to have to grow up about nuclear power.

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