Happy Holidays from Information Age 2.0
The graphs above show what have to be historically unprecedented price decreases for any major innovation, technology, or a major consumer item (personal computers) over such a short period of time ever before in human history. Advances like this in the great Information Age 2.0 happen so consistently but gradually month by month, year by year, that we hardly even ever appreciate, recognize or acknowledge how amazing the last 20 years have been in terms of information technology. If the 90% reductions took place instantly, it would probably be declared to be a miracle, but when it happens gradually over a decade or more, we take it for granted and even complain and whine about how things could be so much better?
From laptop computers, to high speed Internet access, to email, to LCD TVs, to GPS systems, to iPhones and Blackberrys, to digital cameras, to iPods and hundreds of other technology-related innovations, our lives are immeasurably better than any time in history, and these graphs tell part of the story - the cost of information and information technology have never been cheaper and directly because of that, our standard of living has never been higher.
Merry Christmas and Carpe Diem!
20 Comments:
Best Buy had a home technology makeover kit this week. It included a new desktop pc w/monitor, a notebook, a netbook and wireless router for $1200. Was not that long ago that $1200 got you a decent desktop pc.
What an incredible gift technology has been in helping us to get more from our day. For example, where would we be without the cell phone?
IMHO, technology is worth much more than they are charging for it. Period.
Mr. Perry:
Ops! Posted comment on wrong blog post. Will try again.
The portable stereos, VCR’s, and Info Age 2.0, etc. may have missed an important comparison between the past and present: man hours needed to assemble Christmas Gifts.
In the past the instructions were insane and many parts were missing. Sometimes you could not even finish the assembly.
Today the instructions are written by Technical Writers and the parts are quality check to be sure the parts are included (in some case extra parts). A Christmas Miracle!
Mark Perry...blogging on Christmas...tish, tish...but hey, the rest of us were here too!
...and for the economist, there is also a fun little book on the economics of Christmas: Scroogenomics: Why you shouldn't buy presents for Christmas. Very funny & insightful.
Thanks for another great year of interesting posts, enlivened with the occasional intellectual jousting.
Why does military hardware and software just cost more and more and more?
Completely OT:
"If markets were efficient, I would be selling pencils on a street corner." - Warren Buffet
I think an under appreciated aspect of cell phones and internet access is the energy saved. I can remember running around a lot more in a vehicle before. Now I simply check in by cell phone or check availability on-line.
Mulitply my lessened physical wonderings in a vehicle by milllions of others and your talking real money (dollars, pounds, yuan scheckles etc.).
gettingrational,
excellent point
My life is much better since the introduction of the Internet and social networking sites.
I used to spend money for gasoline and drinks at the bars trying to find a lady.
Now I can meet many ladies from the comfort of my home, I meet more ladies without wasting money and resources.
Thank god for cheap computers and the Internet.
It sure is a great thing that technology gets smaller, faster, more capable while getting cheaper - absolutely great for the consumer.
But at the same time, I've watched my employer, a large multinational IT equipment manufacturer and IT services company go from 300,000 US employees to 100,000 first by moving manufacturing offshore, then by moving everything else offshore. They're still cutting 4-5,000 US employees a quarter.
I have been able to survive thus far (over 10 years) by having vastly better productivity/quality and far more advanced skills than the offshore resources have. I work hard to stay that way.
I believe if given a fair shot, Americans can out produce anyone anywhere. But businesses in the US have a huge burden due to federal government policy and laws that most of our competitors in the Far East and in Asia don't have.
I just thought I'd point out that there's another side to the joy of cheap IT equipment.
I used to spend time and money for gasoline to find ladies in bars but now -- I use Babes in Barland. This is a google droid phone app that finds ratios of women:men in neighborhood bars at minimum of 2:1.
Guys like anon. are trying to hook up with avatars but real men use Babes in Barland.
Abide
"If markets were efficient, I would be selling pencils on a street corner."...
Well apparently Buffett was wrong again...
Its amazing how that hopey changey is working out, eh Machiavelli999?
Well maybe Buffett can open his wallet for Obama and cover some of that excessive spending...
Machiavelli999 said...
"If markets were efficient, I would be selling pencils on a street corner." - Warren Buffet
Markets are never perfectly efficient, unless everyone has perfect information, like Warren Buffett. Financial markets are much more imperfect, because of "white noise," and emotions (e.g. greed and fear) overshooting movements.
Juandos, that Buffett quote shows he's good at only one thing, although better than anyone else.
If someone has a choice of either buying an entertainment system or health insurance and chooses the entertainment system, then gets sick or injured, and can't afford the medical bill, then who pays? It may be the people who bought the health insurance instead of the entertainment system. So, it seems, the person without health insurance should pay somehow for making a poor choice.
Few people claim markets are perfectly efficient. The issue is whether technical and fundamental analysts can beat the market, net of taxes and transactions, on a consistent basis. Most finance research demonstrates that they cannot.
Warren Buffet has no informational advantage over anyone. There's no reason to believe he can actually pick stocks better than anyone else. He happens to be in the upper tail of the distribution by chance and claims his luck is skill. I hear the same boasts from gamblers all the time where it can be shown, mathematically, that no system can ever gain them a competitive advantage. Even in poker, where one can supposedly read tells and examine past play of opponents, we observe the best players making more statistically wrong decisions than right ones.
Buffett is a pencil salesman and you are overpaying for his pencils.
Conan, Warren Buffett does beat the market "on a consistent basis" (e.g. over each 10-year period), and by a large margin. His performance contradicts your statement.
However, I agree, predicting the future is (normally) uncertain, and timing can be off. It's all about probabilities. Also, there's more to learn than people think. Consequently, very few people can actually outperform by a large margin consistently.
The difference between the gamblers you cite and investors is you can make your own odds in financial markets, e.g. if you wait for an excellent opportunity, it always shows up (which requires discipline). Of course, the odds need to be properly estimated (e.g. someone may believe there's a 90% chance of making money, when in reality, it's a 55% chance.). Anyway, I wouldn't recommend trying this at home :)
But at the same time, I've watched my employer, a large multinational IT equipment manufacturer and IT services company go from 300,000 US employees to 100,000 first by moving manufacturing offshore, then by moving everything else offshore. They're still cutting 4-5,000 US employees a quarter.
How did they handle the political fallout of them going offshore? That is, were there times for which they 'less than honest' about what they wished to do?
I'd figure that firm is being quite brazen with it now given current economic conditions. They can afford to be truthful given that there isn't much in their way to go Third World.
I believe if given a fair shot, Americans can out produce anyone anywhere.
Well, a fair shot is impossible when there is rampant cheating and penalization of the US citizen.
But businesses in the US have a huge burden due to federal government policy and laws that most of our competitors in the Far East and in Asia don't have.
Well, that makes the folks in those countries easier to buy off and revert to 19th century practices. If you thought company towns were bad here, the Third World makes them worse by far.
As I've said before, focusing too much on transactional efficiency results in this kind of setup every single time. To paraphrase Thatcher: "The problem with offshoring is that you eventually run out of your own nation's sovereignty".
In short: Business isn't without fault in the whole thing; they're the ones who won't stay out of buying our government.
Mark ,
I'd like to see a chart of the cost of education over the same time period. Education is after all the communication of information, with technology cost for communication technology plummeting why is it that education cost continue to sky rocket?
Best regards
Dave
> Completely OT:
"If markets were efficient, I would be selling pencils on a street corner." - Warren Buffet
Not just OT, but stupid.
You don't compare market efficiency to perfect efficiency, you compare market efficiency to THE ALTERNATIVES.
Guess what?
The alternatives SUCK.
It doesn't matter that Buffet gets to make profits from market inefficiencies.
Because the alternative is for Al Gore to make profits from far vaster government misallocations.
Ein Es Klar, Herr Kommissar?
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