Thank you for posting this, I find it very interesting and useful to have discussions of this kind publicly available!
For now just one point, even though I don’t think it matters much for the high-level disagreement (in particular, I probably still disagree with Ben’s view on the impact of Google, Wikipedia etc.):
I don’t think current IT has had much of an effect by standard metrics of labour productivity, for example.
The context makes me think that maybe by “current IT” you specifically mean things like Facebook or Twitter that became big in the last 10 years. In that case, for all I know the quoted claim may well be correct. I’m not so sure if “current IT” includes e.g. the internet: I believe a prominent view in economics is that IT was a major cause of the US productivity growth resurgence in the 1990s to mid-2000s. For example:
David Romer’s popular textbook Advanced Macroeconomics (4th ed., p. 32) says:
Until the mid-1990s, the rapid technological progress in computers and their introduction in many sectors of the economy appear to have had little impact on aggregate productivity. In part, this was simply because computers, although spreading rapidly, were still only a small fraction of the overall capital stock. And in part, it was because the adoption of the new technologies involved substantial adjustment costs. The growth-accounting studies find, however, that since the mid-1990s, computers and other forms of information technology have had a large impact on aggregate productivity.
Gordon (2014, p. 6), who in general argues against techno-optimists and predicts a growth slowdown, describes 1996-2004 as “the productivity revival associated with the invention of e-mail, the internet, the web, and e-commerce”.
More broadly, the sense I got from the literature is that many people would be comfortable endorsing claims like (i) innovation has been and still is a major driver of productivity growth (say responsible for >10% of productivity growth), and (ii) within the last 10 years a significant share (weighted by impact on productivity, say again >10% of the effect) of innovation has happened in IT. (Admittedly, the arguments behind similar claims often seemed a bit handwavy to me and not as data-drived as I’d like.) So even if productivity growth has slowed down considerably and will remain low, IT would be responsible for a significant part of what little growth we have, and the absolute effect wouldn’t be less than one order of magnitude of typical effects of technology on productivity.
I think this all of this is consistent with e.g. the views that IT has increased productivity less than past innovations such as the steam engine, or that most people overestimate the effect of IT. I’d also guess it’s consistent with Cowen’s and Thiel’s views, but I haven’t read the books by them that you mentioned.
(I said “a prominent view” because I don’t have a good sense of whether it’s a majority view. In particular, I wasn’t able to find a relevant IGM Forum survey of economists. My overall impression is based on having engaged on the order of 10 hours with the relevant literature, albeit in an only moderately systematic way, and I don’t have a background in economics. I think there’s a good chance you’re aware of the above points, and I’m partly writing this comments to see if you or someone else can spot a flaw in my current impression.)
Your points seem plausible to me. While I don’t remember exactly what I intended by the claim above, I think that one influence was some material I’d read referencing the original “productivity paradox” of the 70s and 80s. I wasn’t aware that there was a significant uptick in the 90s, so I’ll retract my claim (which, in any case, wasn’t a great way to make the overall point I was trying to convey).
Thank you for posting this, I find it very interesting and useful to have discussions of this kind publicly available!
For now just one point, even though I don’t think it matters much for the high-level disagreement (in particular, I probably still disagree with Ben’s view on the impact of Google, Wikipedia etc.):
The context makes me think that maybe by “current IT” you specifically mean things like Facebook or Twitter that became big in the last 10 years. In that case, for all I know the quoted claim may well be correct. I’m not so sure if “current IT” includes e.g. the internet: I believe a prominent view in economics is that IT was a major cause of the US productivity growth resurgence in the 1990s to mid-2000s. For example:
David Romer’s popular textbook Advanced Macroeconomics (4th ed., p. 32) says:
Gordon (2014, p. 6), who in general argues against techno-optimists and predicts a growth slowdown, describes 1996-2004 as “the productivity revival associated with the invention of e-mail, the internet, the web, and e-commerce”.
More broadly, the sense I got from the literature is that many people would be comfortable endorsing claims like (i) innovation has been and still is a major driver of productivity growth (say responsible for >10% of productivity growth), and (ii) within the last 10 years a significant share (weighted by impact on productivity, say again >10% of the effect) of innovation has happened in IT. (Admittedly, the arguments behind similar claims often seemed a bit handwavy to me and not as data-drived as I’d like.) So even if productivity growth has slowed down considerably and will remain low, IT would be responsible for a significant part of what little growth we have, and the absolute effect wouldn’t be less than one order of magnitude of typical effects of technology on productivity.
I think this all of this is consistent with e.g. the views that IT has increased productivity less than past innovations such as the steam engine, or that most people overestimate the effect of IT. I’d also guess it’s consistent with Cowen’s and Thiel’s views, but I haven’t read the books by them that you mentioned.
(I said “a prominent view” because I don’t have a good sense of whether it’s a majority view. In particular, I wasn’t able to find a relevant IGM Forum survey of economists. My overall impression is based on having engaged on the order of 10 hours with the relevant literature, albeit in an only moderately systematic way, and I don’t have a background in economics. I think there’s a good chance you’re aware of the above points, and I’m partly writing this comments to see if you or someone else can spot a flaw in my current impression.)
Your points seem plausible to me. While I don’t remember exactly what I intended by the claim above, I think that one influence was some material I’d read referencing the original “productivity paradox” of the 70s and 80s. I wasn’t aware that there was a significant uptick in the 90s, so I’ll retract my claim (which, in any case, wasn’t a great way to make the overall point I was trying to convey).