This link has been bookmarked by 5 people . It was first bookmarked on 09 Mar 2012, by nikerym.
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08 May 12
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09 Apr 12
Todd Suomela"Interchangeability of parts breaks the coupling between scaling and manufacturing capacity by substituting supply-chain limits for manufacturing limits. For a rifle, you can build up a stockpile of spare parts in peace time, and deliver an uninterrupted supply of parts to match the breakdown rate. There is no need to predict which part might break down in order to meaningfully anticipate and prepare. You can also distribute production optimally (close to raw material sources or low-cost talent for instance), since there is no need to locate craftsmen near the point-of-use.
So when interchangeability was finally achieved and had diffused through the economy as standard practice (a process that took about 65 years), demand-management complexity moved to the supply chain, and most problems could be solved by distributing inventories appropriately."history economic technology innovation manufacturing interchangeable industrial 18c 19c country(UnitedStates) country(GreatBritain) military growth revolution capitalism capital design
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Both Moore’s Law and Hall’s Law in the speculative form that I have proposed, are exponential trajectories. These trajectories generally emerge when some sort of runaway positive-feedback process is unleashed, through the breaking of some boundary constraint (the term break boundary is due to Marshall McLuhan).
The positive-feedback part is critical (if you know some math, you can guess why: a “doubling” law in a difference/differential equation form has to be at least a first-order process; something like compound interest, if you don’t know what the math terms mean).
Loosely speaking, this implies a technological process that can be applied to itself, improving it. Better machines with interchangeable parts also means better machine tools that are themselves made with interchangeable parts and therefore can run continuously at higher speeds, with low downtime. Computers can be used to design more complex computers. This is not true of all technological processes. Better plastics do not improve your ability to make new plastics, for instance, since they do not play much of a role in their own manufacturing processes.
This is the inner, technological positive-feedback loop (think of an entire technology sector engaging in a sort of 10,000 hours of deliberate practice; a major sign is that the most talented people turn to tool-building: Blanchard and Hall for Hall’s Law, people like the late Dennis Ritchie and Linus Torvalds for Moore’s Law).
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But the technological positive-feedback loop requires an outer financial positive-feedback loop around it to fuel it. You need conditions where the second million is easier to make than the first million.
This means tycoons who spot some vast new opportunity and play land-grabbing games on a massive scale.
Both Hall’s Law and Moore’s Law led to wholesale management and financial innovation by precisely such new tycoons.
For Hall’s Law, the process started with Cornelius Vanderbilt, the hero of A. J. Stiles’ excellent The First Tycoon, who figured out how to tame the strange new beast, the post-East-India-Company corporation and in the process sidelined old money.
It is revealing that Vanderbilt was blooded in business through a major legal battle for steamboat water rights: Gibbons vs. Ogden (1824) that helped define the relationship of corporations to the rest of society. From there, he went from strength to strength, inventing new business and financial thinking along the way. Only in his old age did he finally meet his match: Jay Gould, who would go on to become the archetypal Robber Baron, taking over most of Vanderbilt’s empire from his not-so-talented children.
Vanderbilt was something of a transition figure. He straddled both management and finance, and old and new economies: he was a cross between an old-economy merchant-pirate in the Robert Clive mold (he ran a small war in Nicaragua for instance) and a new-economy corporate tycoon. He transcended the categories that he helped solidify, which helped define the next generation of tycoons.
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We are clearly living through a New Gilded Age today, and Bruce Sterling’s term “Favela Chic” (rather unfortunately cryptic ; perhaps we should call it “Painted Slum”) is effectively analogous to “Gilded Age.”
We put on brave faces as we live through our rerun of the 1870s. We celebrate the economic precariousness of free agency as though it were a no-strings-attached good thing. We read our own Horatio Alger stories, fawn over new Silicon Valley millionaires and conveniently forget the ones who don’t make it.
New Media tycoons like Arrington and Huffington fight wars that would have made the Hearsts and Pulitzers of the Gilded Age proud, while us lesser bloggers go divining for smaller pockets of attention with dowsing rods, driven by the same romantic hope that drove the tragicomic heroes of P. G. Wodehouse novels to pitch their plays to Broadway producers a century ago.
History is repeating itself. And the rerun episode we are living right now is not a pleasant one.
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14 Mar 12
Justin MaresEarly on we get rapidly improving computers and IT infrastructure. This stuff is nice to have but has a relatively small impact on the overall economy. We would probably call this the cheap trick (I am shifting your double Freitag to reflect economic impact which would lag pure technological development). The cheap trick provides some nice bonus stuff for everyone to play with and boosts gdp by a couple points but is only disruptive to a small portion of the economy.
We then enter the middle portion of the cycle…digital technology eats increasing portions of the industrial economy, accelerating as it goes. Eventually we reach a point (basically today +/- a few years) wherein the cycle has gained too much momentum to be slowed. It has already eaten major chunks of the economy, leaving unemployment, bankruptcy and the like in its wake, but the disrupted portion of the population still faces significant expenses from the yet-to-be-disrupted portions of the economy. In our case that would include healthcare, education, defense and major portions of the energy industry…industries that have paradoxically gotten more expensive even in absolute terms.
The big lift (in economic terms) consists of the push to bring these holdout industries in line with the leading industries. In the mean time we get bizarre inconsistencies like people who can access vast repositories of medical information for free but who can’t afford branded antibiotics, or people who pay $0 for the majority of their (mostly digital) entertainment and leisure but who could easily spend $50+ just for a cab ride to go out on the town for a night. -
10 Mar 12
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09 Mar 12
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