Here's a possible scenario that I think address at least a decent chunk of the idea production part:
- Research is not embarrassingly parallel. Adding researchers doesn't lead to more different things being researched (see also, Amdahl's Law), but to multiple groups racing to research the same things.For the most part, useful research directions can be identified with far less effort that it would take to actually explore them. (It's not that ideas are harder to find, it's that researchers can't be allocated efficiently.)
- The "publish or perish" constraint that's famous from academia applies to patents. Researchers prefer to split up their results into as many separate patents as possible. (patents count is not a consistent measure)
- Research is not embarrassingly parallel. These split-up ideas are not independent, but form a chain where each builds on the last. Each small patent still gets referenced in all the following split-up small patents. (the "breakthrough patent" measure doesn't work)
---
Unrelated to the above... haven't there been articles in recent years complaining that it's harder for young people to get jobs because old people are staying working longer? Assuming that's actually true, could the constant-ish growth rate and recent decline in that rate be similar to the "science advances one funeral at a time" effect?
- It has gotten easier to file patents, so more are filed.
- Companies increasingly use patents like weapons/deterrents, so there’s more incentive to file an idea you weren’t planning to use to build your war chest.
I suspect regulatory capture is a big part of the explanation though.
I think that's all true, plus, from my experience:
- it's now more difficult to identify a truly unexplored area of work within a relatively short amount of time (e.g., the first 2 explorative years of a PhD lasting 4-6 years).
- even if you find a niche where you could make a completely original contribution, you're disincentivized by how hard it is to convince your supervisor and peer reviewers - unless it's painfully obvious or you invest a lot of upfront effort to prove its worth.
- media promotes a fetishized version of original contributions (e.g., theory of relativity that led to a paradigm shift), whereas scientists are taught to always justify their contribution with respect to the existing work; this inevitably prunes many paths and ideas.
- although interdisciplinarity is promoted in opinion pieces, interdisciplinary contributions are often discouraged by the discipline-related communities.
None of this is an excuse, but they're certainly filters and pressure chambers.
In general, I find it not convincing to use patent-based metrics as the only argument. The parent writing culture might have changed in various ways that are not related to the quality of the ideas. This undermines the entire argument...
Indeed, the researchers undermined their own argument, even:
> ... it is notable that contrary to their main results, Fort et al. find that the stock market value of the average patent has actually fallen over time.
Their methodologies are very indirect and yield contradictory results.
Trying to decide if a patent is important by looking at the evolution of word use doesn't sound robust, nor does looking at the stock market. When Google invented the transformer algorithm, I don't think there was a sudden jump in their stock price. There are lots of papers and people can't evaluate their value immediately like that. Stock prices move in response to earnings, not patents or papers. I don't remember ever hearing about a sudden stock price jump because a patent was filed.
There's lots of other questionable stuff in this argument. How are they defining researcher, for one? For US tax purposes it's common to define all software development as R&D. If they're using similar data then the huge growth of the software industry would make it appear like research productivity has fallen.
The Tech Labs initiative recently announced may help address some of these issues. Hopefully it goes well; everything else this admin has done to American science has been complete and utter garbage.
They figuratively tried to burn the NIH to the ground and have been routinely and illegally canceling grants and holding research funds hostage to bully universities into going along with their moronic cultural program.
My apologies for being off-topic, but it's been a long time since a website made my jaw drop with its design. So simple, nothing extra, beautiful. The images and illustrations carry it so well. Also, there are multiple cover images per issue and a random one is shown on each page visit. And the typography-- I love everything about it. Makes me miss web dev.
edit: the typography combo is different for every article whaaat
So if you scroll past the header it is just text with good typography and contrast. But also there is the left side “scroll bar” on mobile. It shows you how far along in the article you are but doesn’t let you drag-scroll using it. Which is hilarious because essentially this is exactly like HTML/the browser as it was envisioned originally. It’s almost like thought went into the original design.
It's flair but I like it in this case. It would be nice if the scrollbar were styleable cross-browser with CSS but until that becomes possible, custom ones like this can also show anchor points, and in this case your own highlights (which is also a neat feature, given that it save to local content and doesn't need an account)
> So simple, nothing extra, beautiful. The images and illustrations carry it so well.
The image I was shown under the introduction was a 4.1 MB PNG despite appearing to be more or less black-and-white and being scaled down considerably. To my mind this sort of thing is very much "extra" for a think piece; I have no idea how that image is supposed to relate to the topic of the article.
A quality=90 jpeg exported from GIMP is ~1.4 million bytes and not obviously visually different. (Test process was loading original image into one Firefox tab, and quality=90 jpeg image into another, holding Ctrl+PgDn to flip between them quickly, and looking at the screen with my eyes to see if any obvious differences leapt out.)
quality=20 (~0.32 million bytes) wasn't obviously different either.
quality=10 (~0.21 million bytes) was noticeably different. And, on second glance, the obviously different areas were actually slightly different in quality=20 too.
I didn't do any more tests. So, they could have made the image less than 10% the size, I guess - but, they can probably afford the bandwidth, and the thing needs to end up fully uncompressed at some point anyway just so that it can be displayed on screen. It's not even like 4 MBytes is a lot of memory nowadays.
I thought this article was engaging. I think it taps into something many of us can feel at times, that collective sense that truly breakthrough ideas are significantly more difficult to come by. It piqued that sense of curiosity, even if I have some questions about the methodology.
The comments section here is also quite a study. Many of the responses are so quick to dismiss the article with basically a "Well of course, this is all obvious, it's clearly due to [insert dubious reasons]." Thankfully not all of them: Some of the top comments show some genuine curiosity and deeper reflection, rather than just a pithy shoulder-shrugging dismissal. But it's definitely a pattern.
It's a little funny to read this and then immediately see comments in other posts lamenting how LLMs are always "confidently incorrect." I suppose LLMs really are just mimicking what they've been trained on.
It seems possible that both capital and resources are more widely distributed than ever before in human history. The number of investors, including accredited investors, may also be higher than ever before. (though its lower than before accreditation existed, by definition)
And yet a larger percentage of the capital is concentrated in a smaller percentage of the population. I think about life in the arts—in the first half of the century it used to be that a talented writer or musician could make a living with their art. Not necessarily a huge amount of money, but something that could provide at least a middle-class level of living. Now a smaller number of writers or musicians make mind-numbing amounts of money while the vast majority of writers and musicians cannot make a living from art. We’re seeing a concentration of the rewards in everything into fewer and fewer hands while most get very little.
It's not mutually exclusive to have more wealthy people while also having capital concentrating in a way that means most people have less access to it.
In addition to VC funds spend at random things not necessarily all of which are good innovations (and many exploit it), also VCs probably have harder and less flexible requirements for ROI than many non-VC investors. That kills some (probably significant) number of innovations with a good potential of adding value to society in favour of those with greater potential of quick ROI and increase of capital concentration in one hands.
Benefits for society (which could have been behind many great inventions) is now almost totally nonsense, despite being proclaimed by many money behemots like OpenAI.
> This is a puzzle! Why would the market fail to reward innovative firms, or, conversely, why does it continue rewarding less innovative firms? Unfortunately, here we don’t have clear answers.
Puzzle no more, the answers are obvious! There are two interlinked mechanisms leading to this phenomenon. The rise of inequality (centralisation of power and wealth) and the rise in private debt. Both require coordinated governmental intervention to address, which won’t happen until the next economic crisis and dramatic drop in standards of living. Wish it was different, but economic theory (mainstream anyway) doesn’t account for our present situation and the control system is cycling into instability.
The upside is that we might learn the lessons this time around.
> The rise of inequality (centralisation of power and wealth) and the rise in private debt. [...] present situation and the control system is cycling into instability. [...] this time around.
Your explanation assumes the article is trying to explain a recent phenomenon.
The article actually discusses a puzzling pattern spanning a huge time interval.
You probably point at the right problem (inequality, centralisation of power and wealth), but this article actually indicates this problem has been going since before any of us were even born.
You still misread the article: they observe the nearly constant 2% growth across the long timespan, regardless of the relative increases in researchers, regardless of all the policy changes, regardless of ...
The article is NOT about some recent change. Please cite the article if you believe it is trying to solve a puzzle concerning a recent change.
The whole point is that this 2% seems to be robust, regardless of investing or getting more ideas, invalidating the idea that the growth is a simple result of the production of ideas (say making blueprints for a new kind of factory, which can then be copied without having to make more blueprints).
I am not asking you for a random citation of the article, but one that demonstrates the article discusses a puzzle concerning a recent trend, as opposed to a longtime ongoing one.
Your citation of the article:
> This is a puzzle! Why would the market fail to reward innovative firms, or, conversely, why does it continue rewarding less innovative firms? Unfortunately, here we don’t have clear answers.
does not refer to any recent change, indeed, it uses the word "continue" invalidating your claim that the puzzle is about some recent change.
You don't explain the connection at all. You're just injecting your political world-view into the cause so you can hawk your preferred political solution.
It’s nothing to do with politics, it’s just maths. And if you think I’m a leftist, you would also be wrong!
Unfortunately, educating yourself on this topic is not easy and involves differential equations. The economic models that fail to predict our current situation are simplifications. I’d link you, but I don’t think I’ll be getting a very receptive audience!
> Unfortunately, educating yourself on this topic is not easy and involves differential equations.
Which is it? Obvious but... only if you're "educated"?
> The economic models that fail to predict our current situation are simplifications.
Are there economic models that are not simplifications?
If being simplifications makes the models trivial to dismiss, but also all models are simplifications, then how do you successfully "predict our current situation"? I guess not with models. Just from first principles or something, but like, which? And then you need to provide the full chain of reasoning, and don't let that become a model. Or maybe it's simulations, but those are also invariably simplifications.
It's hard to take this seriously. Some links would be appreciated.
> And if you think I’m a leftist, you would also be wrong!
I didn't refer to specific politics, just your politics whatever they happen to be. Now you tell me I'm an ignoramus while you're educated and that's why this stuff is obvious to you but not to me -- and also not to [some? many? most??] economists. Plus:
> I’d link you, but I don’t think I’ll be getting a very receptive audience!
Certainly no link -> non-receptive audience. Links might or might not improve the situation, but we can't tell till you furnish some.
> Through two world wars, the Great Depression, the global financial crisis, and the Cold War, US real GDP per capita has grown steadily at 2% per year.
I can't help but note that while the graph is adjusted for inflation, it is not adjusted per capita.
>Bloom et al. looked across many sectors, from agriculture to medicine to computing. In each field, productivity measures have grown at the same rate as before. This sounds like good news, except that the number of researchers in each of these fields has exploded. In other words, each researcher produces much less than they used to — something you might expect if ideas really are getting harder to find.
Each researcher produces less on average, but that is just restating the statistic in different terms.
I suspect the answer is just that increasing the number of people in a research field does not mean it produces more innovations. Almost all the big innovations are produced by a tiny number of people. Let's call them the geniuses. The geniuses of a field adore the field, were never going to study anything else, and would contribute to innovation no matter what. Everyone else just fiddles around the edges. That's why making PhD-level research much more accessible hasn't increased the amount of innovation even close to commensurately.
We now have tidier, cleaner theories. They cover more edge cases. They're neater. All the little side branches are investigated and filled in. But we aren't getting more big leaps.
It's an OK article, but it's basically an economist doing a survey article of what other economists have written. No reliable metric for "ideas" is proposed.
This may be related to Baumol's cost disease, which was on HN yesterday. Most of the areas where innovation is effective involve manufacturing or other technologies that are not labor intensive. So, while they can push costs down in some areas, they do so in areas that are already highly efficient. If you could cut the price of basic steel by 30%, few would notice, because the raw steel cost of most products is tiny.
There's a fad problem in US finance. Right now, so much investment is going into AI data centers that anything else is hard to fund. US electric cars, US copper mining, and US rare earth separation, and solar farms are all under-funded, despite known good ROI. They're all boring.
What passes for capitalism in the US isn't really that good at capital allocation any more. It's too detached from physical reality.
Maybe one way to think about the efficiency of markets is that an efficient market is honest. So then the analysis here is essentially saying that the markets are getting more inefficient and corrupt, or at least not getting better. And this is borne out by things like the surveys of Americans' trust in government. But this corruption is more systematic than individualized. It is reflected in things like the lack of options if your Google account is banned. It is essentially the lack of human intervention and instead the use of AI systems. The failure modes of these systems are not obvious, and these "corruptions" essentially do not show up in typical statistics, only in super macro statistics like these productivity things.
The puzzle amounts to asking ourselves what is so special about 2%? And given the inevitable large swings in market theory fads, policy fads, generational changes, etc. why is the 2% so robust?
thinking in terms of half-lives or mean lifetimes may give a better hint than the annual percentage change.
log(1/2)/log(0.98)=> ~34 years half-life
Observe that calculating in the other direction, a half-life of 30 or 40 years results in very similar 98%:
exp(ln(1/2)/30) = 0.977
exp(ln(1/2)/40) = 0.983
the constancy is just the relative insensitivity to the exact half-life, suppose the half-life models how long a horse will run after a carrot dangling from a stick mounted to its head. Some will give up earlier, some will give up later and it can easily fluctuate by 33% (30 years or 40 years), yet the annual drop-off percentage would be a similar 2%
Perhaps we should think of things that could be universal, like approximate age a person starts working, approximate age a person simply can no longer work, or how many times one can fundamentally fool a person before totally demotivating them.
suppose we assume 15 till 65 years, a ~50 year career maximum (and some effective career length in between, ended either by age related problems or disillusionment):
lets take one of many "scams" or "white lies" or whatever one wishes to call them, like pension funds, when you start working and you place money in the fund, but that money devalues, and by the time you are on your pension, the money has halved in value so to speak, suppose a rough inflation rate of 2% (whenever the nation as a whole was more productive, that productivity was printed away by the central bank issuing more money, devaluating everyone's savings). After 50 years 0.98^50 = ~0.36
At some point (and it turns out this has been going on since time immemorial) people just chug along satisfying themselves with minimum wage, because the effort for a marginal increase is not commensurate to the gains, regardless of how fast you invent new trinkets for life that do not fundamentally change our (un)happiness with the status quo.
At some point its just a constant measuring how long you can fool the population before they are too old to revolt.
How much effect has the regulatory environment had on overall productivity? How much of a company's (or individual's) resources are wasted trying to jump through hoops that do nothing to increase output?
Tax compliance. Defending against frivolous lawsuits. Chasing permits. Settling labor disputes. Sensitivity training. Wading through government red tape.
Each of these and dozens of others drain resources (time and money), but contribute little to productivity.
I guess that depends on what you define productivity as. It seems that you have a preconceived narrow definition. If I pay millions of dollars in taxes that fund a war, who is to say that was more productive than planting a tree and taking a nap.
If you re-read my comment, you will notice that I said nothing about how much taxes are paid, or what those tax dollars are used for. I was talking about how much time, energy, and capital is needed just to figure out how much you owe.
> The decline in allocative efficiency should be more of a main focus — we need to throw more of our intellectual capital at understanding how to increase competitiveness and the market potential for innovative firms and technologies, in the same way that we've focused on understanding how to make better technologies.
Shouldn't the chart that shows effective number of researchers show them as a factor of the population? Not a factor based on how many there were when we had a much smaller population?
Why doesn't anyone pay attention to the elephant in the room: median age?
It has increased by 10 years in those 50 years. And, money is now overwhelmingly concentrated in the older cohorts just simply because there were no significant "reset" events for a long time such as massive wealth expropriations, wars, destruction - last time government robbed people of their property on a massive scale, was in 1865.
It means that people who consume things, are now risk averse and unlikely to break with their habits.
See how different is the trajectory of electric cars in the US, EU, and China. In the US, average new car buyer is 50, in EU, 53, in China, it is 36. Plus, in China old people are dirt poor - peak income age is 35, in EU too, crushing taxes prevent wealth accumulation so old people are poorer than young who work more and are nimble enough to avoid taxes.
This cannot be fixed, because it requires either a Lebensborn-style forced reproduction program, or mass confiscations/redistributions, or both. We better accept situation the way it is.
Go to the army for five minutes and you’ll find 10 different ideas of products to create. Your failure is based on your limited and narrow perception, not the lack of ideas of things to create
TLDR; monopolism or quasi monopolism is holding back innovation at a country scale notable enough to begin changing the two century long GDP trend of 2%?
Here's a possible scenario that I think address at least a decent chunk of the idea production part:
- Research is not embarrassingly parallel. Adding researchers doesn't lead to more different things being researched (see also, Amdahl's Law), but to multiple groups racing to research the same things.For the most part, useful research directions can be identified with far less effort that it would take to actually explore them. (It's not that ideas are harder to find, it's that researchers can't be allocated efficiently.)
- The "publish or perish" constraint that's famous from academia applies to patents. Researchers prefer to split up their results into as many separate patents as possible. (patents count is not a consistent measure)
- Research is not embarrassingly parallel. These split-up ideas are not independent, but form a chain where each builds on the last. Each small patent still gets referenced in all the following split-up small patents. (the "breakthrough patent" measure doesn't work)
---
Unrelated to the above... haven't there been articles in recent years complaining that it's harder for young people to get jobs because old people are staying working longer? Assuming that's actually true, could the constant-ish growth rate and recent decline in that rate be similar to the "science advances one funeral at a time" effect?
Two more:
- It has gotten easier to file patents, so more are filed.
- Companies increasingly use patents like weapons/deterrents, so there’s more incentive to file an idea you weren’t planning to use to build your war chest.
I suspect regulatory capture is a big part of the explanation though.
I think that's all true, plus, from my experience:
- it's now more difficult to identify a truly unexplored area of work within a relatively short amount of time (e.g., the first 2 explorative years of a PhD lasting 4-6 years).
- even if you find a niche where you could make a completely original contribution, you're disincentivized by how hard it is to convince your supervisor and peer reviewers - unless it's painfully obvious or you invest a lot of upfront effort to prove its worth.
- media promotes a fetishized version of original contributions (e.g., theory of relativity that led to a paradigm shift), whereas scientists are taught to always justify their contribution with respect to the existing work; this inevitably prunes many paths and ideas.
- although interdisciplinarity is promoted in opinion pieces, interdisciplinary contributions are often discouraged by the discipline-related communities.
None of this is an excuse, but they're certainly filters and pressure chambers.
In general, I find it not convincing to use patent-based metrics as the only argument. The parent writing culture might have changed in various ways that are not related to the quality of the ideas. This undermines the entire argument...
Indeed, the researchers undermined their own argument, even:
> ... it is notable that contrary to their main results, Fort et al. find that the stock market value of the average patent has actually fallen over time.
Their methodologies are very indirect and yield contradictory results.
Trying to decide if a patent is important by looking at the evolution of word use doesn't sound robust, nor does looking at the stock market. When Google invented the transformer algorithm, I don't think there was a sudden jump in their stock price. There are lots of papers and people can't evaluate their value immediately like that. Stock prices move in response to earnings, not patents or papers. I don't remember ever hearing about a sudden stock price jump because a patent was filed.
There's lots of other questionable stuff in this argument. How are they defining researcher, for one? For US tax purposes it's common to define all software development as R&D. If they're using similar data then the huge growth of the software industry would make it appear like research productivity has fallen.
The Tech Labs initiative recently announced may help address some of these issues. Hopefully it goes well; everything else this admin has done to American science has been complete and utter garbage.
They figuratively tried to burn the NIH to the ground and have been routinely and illegally canceling grants and holding research funds hostage to bully universities into going along with their moronic cultural program.
My apologies for being off-topic, but it's been a long time since a website made my jaw drop with its design. So simple, nothing extra, beautiful. The images and illustrations carry it so well. Also, there are multiple cover images per issue and a random one is shown on each page visit. And the typography-- I love everything about it. Makes me miss web dev.
edit: the typography combo is different for every article whaaat
So if you scroll past the header it is just text with good typography and contrast. But also there is the left side “scroll bar” on mobile. It shows you how far along in the article you are but doesn’t let you drag-scroll using it. Which is hilarious because essentially this is exactly like HTML/the browser as it was envisioned originally. It’s almost like thought went into the original design.
It's flair but I like it in this case. It would be nice if the scrollbar were styleable cross-browser with CSS but until that becomes possible, custom ones like this can also show anchor points, and in this case your own highlights (which is also a neat feature, given that it save to local content and doesn't need an account)
There's a scrollbar on desktop too.
> So simple, nothing extra, beautiful. The images and illustrations carry it so well.
The image I was shown under the introduction was a 4.1 MB PNG despite appearing to be more or less black-and-white and being scaled down considerably. To my mind this sort of thing is very much "extra" for a think piece; I have no idea how that image is supposed to relate to the topic of the article.
It's got a definite creamy tinge to it, not B&W.
A quality=90 jpeg exported from GIMP is ~1.4 million bytes and not obviously visually different. (Test process was loading original image into one Firefox tab, and quality=90 jpeg image into another, holding Ctrl+PgDn to flip between them quickly, and looking at the screen with my eyes to see if any obvious differences leapt out.)
quality=20 (~0.32 million bytes) wasn't obviously different either.
quality=10 (~0.21 million bytes) was noticeably different. And, on second glance, the obviously different areas were actually slightly different in quality=20 too.
I didn't do any more tests. So, they could have made the image less than 10% the size, I guess - but, they can probably afford the bandwidth, and the thing needs to end up fully uncompressed at some point anyway just so that it can be displayed on screen. It's not even like 4 MBytes is a lot of memory nowadays.
Edward Tufte strikes again
Edward Tufte is all about presenting complex information in novel and user-friendly visualizations.
It reminds me of A List Apart style from 2008 or so.
I was very taken by the orange bar on the left that very discretely shows you how far you’ve scrolled in the article.
Almost like a, gasp, scroll bar? Who could have imagined those things might have some sort of purpose??
I thought this article was engaging. I think it taps into something many of us can feel at times, that collective sense that truly breakthrough ideas are significantly more difficult to come by. It piqued that sense of curiosity, even if I have some questions about the methodology.
The comments section here is also quite a study. Many of the responses are so quick to dismiss the article with basically a "Well of course, this is all obvious, it's clearly due to [insert dubious reasons]." Thankfully not all of them: Some of the top comments show some genuine curiosity and deeper reflection, rather than just a pithy shoulder-shrugging dismissal. But it's definitely a pattern.
It's a little funny to read this and then immediately see comments in other posts lamenting how LLMs are always "confidently incorrect." I suppose LLMs really are just mimicking what they've been trained on.
Is it possible we have too much capital in too few hands? Ideas become harder to sell because the ratio of investors to ideas is lower.
I don't know what the solution would be. I tend to favor letting the market figure it out but dunno if that can happen here.
It seems possible that both capital and resources are more widely distributed than ever before in human history. The number of investors, including accredited investors, may also be higher than ever before. (though its lower than before accreditation existed, by definition)
for example: https://www.pewresearch.org/short-reads/2022/04/20/how-the-a...
And yet a larger percentage of the capital is concentrated in a smaller percentage of the population. I think about life in the arts—in the first half of the century it used to be that a talented writer or musician could make a living with their art. Not necessarily a huge amount of money, but something that could provide at least a middle-class level of living. Now a smaller number of writers or musicians make mind-numbing amounts of money while the vast majority of writers and musicians cannot make a living from art. We’re seeing a concentration of the rewards in everything into fewer and fewer hands while most get very little.
It's not mutually exclusive to have more wealthy people while also having capital concentrating in a way that means most people have less access to it.
I would expect that dynamic to look like giant VC funds throwing money at random things.
In addition to VC funds spend at random things not necessarily all of which are good innovations (and many exploit it), also VCs probably have harder and less flexible requirements for ROI than many non-VC investors. That kills some (probably significant) number of innovations with a good potential of adding value to society in favour of those with greater potential of quick ROI and increase of capital concentration in one hands.
Benefits for society (which could have been behind many great inventions) is now almost totally nonsense, despite being proclaimed by many money behemots like OpenAI.
> This is a puzzle! Why would the market fail to reward innovative firms, or, conversely, why does it continue rewarding less innovative firms? Unfortunately, here we don’t have clear answers.
Puzzle no more, the answers are obvious! There are two interlinked mechanisms leading to this phenomenon. The rise of inequality (centralisation of power and wealth) and the rise in private debt. Both require coordinated governmental intervention to address, which won’t happen until the next economic crisis and dramatic drop in standards of living. Wish it was different, but economic theory (mainstream anyway) doesn’t account for our present situation and the control system is cycling into instability.
The upside is that we might learn the lessons this time around.
> The rise of inequality (centralisation of power and wealth) and the rise in private debt. [...] present situation and the control system is cycling into instability. [...] this time around.
Your explanation assumes the article is trying to explain a recent phenomenon.
The article actually discusses a puzzling pattern spanning a huge time interval.
You probably point at the right problem (inequality, centralisation of power and wealth), but this article actually indicates this problem has been going since before any of us were even born.
The puzzle referenced is why more innovation is no longer rewarded by the market. That’s relatively recent.
You still misread the article: they observe the nearly constant 2% growth across the long timespan, regardless of the relative increases in researchers, regardless of all the policy changes, regardless of ...
The article is NOT about some recent change. Please cite the article if you believe it is trying to solve a puzzle concerning a recent change.
The whole point is that this 2% seems to be robust, regardless of investing or getting more ideas, invalidating the idea that the growth is a simple result of the production of ideas (say making blueprints for a new kind of factory, which can then be copied without having to make more blueprints).
I did cite the article! My response is to that specific section quoted. Did you even read it?
I am not asking you for a random citation of the article, but one that demonstrates the article discusses a puzzle concerning a recent trend, as opposed to a longtime ongoing one.
Your citation of the article:
> This is a puzzle! Why would the market fail to reward innovative firms, or, conversely, why does it continue rewarding less innovative firms? Unfortunately, here we don’t have clear answers.
does not refer to any recent change, indeed, it uses the word "continue" invalidating your claim that the puzzle is about some recent change.
You don't explain the connection at all. You're just injecting your political world-view into the cause so you can hawk your preferred political solution.
It’s nothing to do with politics, it’s just maths. And if you think I’m a leftist, you would also be wrong!
Unfortunately, educating yourself on this topic is not easy and involves differential equations. The economic models that fail to predict our current situation are simplifications. I’d link you, but I don’t think I’ll be getting a very receptive audience!
Earlier you wrote:
> Puzzle no more, the answers are obvious!
and now you write:
> Unfortunately, educating yourself on this topic is not easy and involves differential equations.
Which is it? Obvious but... only if you're "educated"?
> The economic models that fail to predict our current situation are simplifications.
Are there economic models that are not simplifications?
If being simplifications makes the models trivial to dismiss, but also all models are simplifications, then how do you successfully "predict our current situation"? I guess not with models. Just from first principles or something, but like, which? And then you need to provide the full chain of reasoning, and don't let that become a model. Or maybe it's simulations, but those are also invariably simplifications.
It's hard to take this seriously. Some links would be appreciated.
> And if you think I’m a leftist, you would also be wrong!
I didn't refer to specific politics, just your politics whatever they happen to be. Now you tell me I'm an ignoramus while you're educated and that's why this stuff is obvious to you but not to me -- and also not to [some? many? most??] economists. Plus:
> I’d link you, but I don’t think I’ll be getting a very receptive audience!
Certainly no link -> non-receptive audience. Links might or might not improve the situation, but we can't tell till you furnish some.
> Through two world wars, the Great Depression, the global financial crisis, and the Cold War, US real GDP per capita has grown steadily at 2% per year.
I can't help but note that while the graph is adjusted for inflation, it is not adjusted per capita.
It's a linear line on a log graph. Meanwhile, US population has grown linearly since 1950. Dividing through by population is in the noise.
>Bloom et al. looked across many sectors, from agriculture to medicine to computing. In each field, productivity measures have grown at the same rate as before. This sounds like good news, except that the number of researchers in each of these fields has exploded. In other words, each researcher produces much less than they used to — something you might expect if ideas really are getting harder to find.
Each researcher produces less on average, but that is just restating the statistic in different terms.
I suspect the answer is just that increasing the number of people in a research field does not mean it produces more innovations. Almost all the big innovations are produced by a tiny number of people. Let's call them the geniuses. The geniuses of a field adore the field, were never going to study anything else, and would contribute to innovation no matter what. Everyone else just fiddles around the edges. That's why making PhD-level research much more accessible hasn't increased the amount of innovation even close to commensurately.
We now have tidier, cleaner theories. They cover more edge cases. They're neater. All the little side branches are investigated and filled in. But we aren't getting more big leaps.
It's an OK article, but it's basically an economist doing a survey article of what other economists have written. No reliable metric for "ideas" is proposed.
This may be related to Baumol's cost disease, which was on HN yesterday. Most of the areas where innovation is effective involve manufacturing or other technologies that are not labor intensive. So, while they can push costs down in some areas, they do so in areas that are already highly efficient. If you could cut the price of basic steel by 30%, few would notice, because the raw steel cost of most products is tiny.
There's a fad problem in US finance. Right now, so much investment is going into AI data centers that anything else is hard to fund. US electric cars, US copper mining, and US rare earth separation, and solar farms are all under-funded, despite known good ROI. They're all boring.
What passes for capitalism in the US isn't really that good at capital allocation any more. It's too detached from physical reality.
Maybe one way to think about the efficiency of markets is that an efficient market is honest. So then the analysis here is essentially saying that the markets are getting more inefficient and corrupt, or at least not getting better. And this is borne out by things like the surveys of Americans' trust in government. But this corruption is more systematic than individualized. It is reflected in things like the lack of options if your Google account is banned. It is essentially the lack of human intervention and instead the use of AI systems. The failure modes of these systems are not obvious, and these "corruptions" essentially do not show up in typical statistics, only in super macro statistics like these productivity things.
The puzzle amounts to asking ourselves what is so special about 2%? And given the inevitable large swings in market theory fads, policy fads, generational changes, etc. why is the 2% so robust?
thinking in terms of half-lives or mean lifetimes may give a better hint than the annual percentage change.
log(1/2)/log(0.98)=> ~34 years half-life
Observe that calculating in the other direction, a half-life of 30 or 40 years results in very similar 98%:
exp(ln(1/2)/30) = 0.977
exp(ln(1/2)/40) = 0.983
the constancy is just the relative insensitivity to the exact half-life, suppose the half-life models how long a horse will run after a carrot dangling from a stick mounted to its head. Some will give up earlier, some will give up later and it can easily fluctuate by 33% (30 years or 40 years), yet the annual drop-off percentage would be a similar 2%
Perhaps we should think of things that could be universal, like approximate age a person starts working, approximate age a person simply can no longer work, or how many times one can fundamentally fool a person before totally demotivating them.
suppose we assume 15 till 65 years, a ~50 year career maximum (and some effective career length in between, ended either by age related problems or disillusionment):
lets take one of many "scams" or "white lies" or whatever one wishes to call them, like pension funds, when you start working and you place money in the fund, but that money devalues, and by the time you are on your pension, the money has halved in value so to speak, suppose a rough inflation rate of 2% (whenever the nation as a whole was more productive, that productivity was printed away by the central bank issuing more money, devaluating everyone's savings). After 50 years 0.98^50 = ~0.36
At some point (and it turns out this has been going on since time immemorial) people just chug along satisfying themselves with minimum wage, because the effort for a marginal increase is not commensurate to the gains, regardless of how fast you invent new trinkets for life that do not fundamentally change our (un)happiness with the status quo.
At some point its just a constant measuring how long you can fool the population before they are too old to revolt.
How much effect has the regulatory environment had on overall productivity? How much of a company's (or individual's) resources are wasted trying to jump through hoops that do nothing to increase output?
Tax compliance. Defending against frivolous lawsuits. Chasing permits. Settling labor disputes. Sensitivity training. Wading through government red tape.
Each of these and dozens of others drain resources (time and money), but contribute little to productivity.
I guess that depends on what you define productivity as. It seems that you have a preconceived narrow definition. If I pay millions of dollars in taxes that fund a war, who is to say that was more productive than planting a tree and taking a nap.
If you re-read my comment, you will notice that I said nothing about how much taxes are paid, or what those tax dollars are used for. I was talking about how much time, energy, and capital is needed just to figure out how much you owe.
> The decline in allocative efficiency should be more of a main focus — we need to throw more of our intellectual capital at understanding how to increase competitiveness and the market potential for innovative firms and technologies, in the same way that we've focused on understanding how to make better technologies.
In layman terms, it’s the age of the startup.
In layman's terms, it's the age of monopolies and oligopolies. We don't have enough market competition.
Perhaps large corporations successfully lobby the government the pass laws that boost their profits while stifling smaller competitors.
Shouldn't the chart that shows effective number of researchers show them as a factor of the population? Not a factor based on how many there were when we had a much smaller population?
Why doesn't anyone pay attention to the elephant in the room: median age? It has increased by 10 years in those 50 years. And, money is now overwhelmingly concentrated in the older cohorts just simply because there were no significant "reset" events for a long time such as massive wealth expropriations, wars, destruction - last time government robbed people of their property on a massive scale, was in 1865. It means that people who consume things, are now risk averse and unlikely to break with their habits.
See how different is the trajectory of electric cars in the US, EU, and China. In the US, average new car buyer is 50, in EU, 53, in China, it is 36. Plus, in China old people are dirt poor - peak income age is 35, in EU too, crushing taxes prevent wealth accumulation so old people are poorer than young who work more and are nimble enough to avoid taxes.
This cannot be fixed, because it requires either a Lebensborn-style forced reproduction program, or mass confiscations/redistributions, or both. We better accept situation the way it is.
Go to the army for five minutes and you’ll find 10 different ideas of products to create. Your failure is based on your limited and narrow perception, not the lack of ideas of things to create
I’m working on it.
TLDR; monopolism or quasi monopolism is holding back innovation at a country scale notable enough to begin changing the two century long GDP trend of 2%?