The End of Normal by James K. Galbraith

Author:James K. Galbraith
Language: eng
Format: mobi, epub
Publisher: Simon & Schuster
Published: 0101-01-01T00:00:00+00:00

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I. In common use, the word technology now refers mainly to computers, telecommunications, the new media, and the new social networks. This is evidence of the plasticity of the word, and plasticity is a polite word for “formless.” In a broader sense, technology has been around since the Neolithic; as it relates to machinery and industry, the word dates from 1859. The term high technology—what we now think of when “technology” is mentioned—came into use a century later, according to a new-media source, the Online Etymology Dictionary at www.etymonline.com/index.php?term=technology.

II. Solow’s approach to measuring the contribution of technology to growth ran into another difficulty already back in the 1950s, when some economists realized that the capital stock was also unmeasurable. If there could be no clear measure of how much capital there was, there could also be no clear distinction between what was “capital” and what was “technology.” Beyond that, as perhaps should have been obvious all along, technology is embodied in equipment (Salter 1964, 14–15). One cannot add together machines of different types and vintages in any rigorously meaningful way, because as designs change, the thing you are measuring changes. Technology and capital are inseparable in principle, and neither has any standard physical unit of measure. The effect of this is to obviate growth accounting; if the elements of growth cannot be counted, then measuring their contributions to growth is not a meaningful procedure.

III. An economist working for Federal Express tells me that the small size of smartphones has a measurable effect on the Asian-US airfreight business, since many more units can be packed onto a single plane, and so the demand for pilots and crews has fallen.

IV. The references are to Andrew Grove, former CEO of Intel Corporation, and to Bill Gates of Microsoft.

V. I have documented this point in Inequality and Instability, based on calculations by Travis Hale.

VI. In an important essay, “Time for a New New Deal,” Marshall Auerback (2008) has pointed out that historians of the New Deal have generally failed to count as employed those working for New Deal agencies—a fact that causes them to exaggerate greatly the extent of unemployment from 1933 to 1936. See further discussion in chapter 11.

VII. Existing capital was both heavily used and not maintained, so it wore out more rapidly than in peacetime.

VIII. The only imaginable parallel, in terms of scale, would be a mass mobilization to transform the economy away from fossil fuels and greenhouse gas emissions and toward some (so far vaguely defined) alternatives. But no one has yet developed the concrete program that would be necessary.

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