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Has the U.S. passed its peak in productivity? Yes, the great innovations of the 20th century...

Has the U.S. passed its peak in productivity? Yes, the great innovations of the 20th century will give way to the "great stagnation." Or: No, the digital revolution will transform the economy again and again.
Comments (62)
  • Neil459
    , contributor
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    Without the value generated by manufacturing, mining, or agriculture there is no way to fund a digital revolution unless we become subservient to other countries that are generating wealth through manufacturing, mining, or agriculture.
    19 May 2011, 06:48 PM Reply Like
  • Fin858
    , contributor
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    You mean the mining, manufacturing and agriculture that will be done by robots now?

     

    No offense by people who get displaced because their jobs get marginalized by robots not much you can do about that. Structurally unemployment is something that needs education to fix so that people have the skills that the current job market requires. Advanced science and math degrees, doctors, lawyers etc.
    19 May 2011, 07:42 PM Reply Like
  • TomasViewPoint
    , contributor
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    Why don't we bring the digital revolution to education so we don't have so many uneducated people? At the same time cut the cost of education. Why does everyone have to buy a car or hitch a ride to sit in a classroom where the teacher drones on and throws out assignments and hopes nobody will ask questions?

     

    Huge opportunity exists to bring education to people rather than people to education.
    19 May 2011, 08:44 PM Reply Like
  • Fin858
    , contributor
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    I don't disagree with that. I think the opportunity does exist and should be exploited.

     

    I was just saying that those who just pound the table on bringing manufacturing back to the US are not thinking about the real issue correctly.
    19 May 2011, 08:46 PM Reply Like
  • Poor Texan
    , contributor
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    Please more doctors but we have enough lawyers. When schools pay more attention to educations and less to sports, we'll produce better skills.
    19 May 2011, 10:12 PM Reply Like
  • spald_fr
    , contributor
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    Genomic development will drive increases in productivity. In food, medicine and energy (three of the costliest household items).
    19 May 2011, 06:51 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    Digital revolution? Nah. That's so 1999.

     

    Energy revolution? Sure.

     

    Political leadership to get us there(or get out of the way)? Yeah, that's a huge problem.
    19 May 2011, 06:55 PM Reply Like
  • bigazul
    , contributor
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    Yes, the ability is there...No, the willingness to do the hard work is not.
    19 May 2011, 09:03 PM Reply Like
  • 867046
    , contributor
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    You must be referring to Bush and the repub's quashing of stem cell research.
    19 May 2011, 11:35 PM Reply Like
  • bigazul
    , contributor
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    Actually, no, I was not. I was referring to the sense of entitlement that most are being raised with in this country. That comment had nothing to do with a Republican or Democrat stance, so you can go throw your childish fits somewhere else.
    20 May 2011, 06:20 AM Reply Like
  • Tricky
    , contributor
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    What was that famous quote at the beginning of the 20th century when the head of the US Patent Office said "everything that can be invented has been invented"?

     

    Have SOME faith, jeez.
    19 May 2011, 07:04 PM Reply Like
  • AnchorMan
    , contributor
    Comments (115) | Send Message
     
    "100 million dollars is way too much to pay for Microsoft!"
    -IBM exec, early 80's

     

    "no one will ever have the need for a personal computer in their home"
    - CEO digital equipment, mid 70's

     

    agreed, have SOME faith!
    19 May 2011, 07:40 PM Reply Like
  • ain't no fortunate son
    , contributor
    Comments (1609) | Send Message
     
    Its incredible that such a brilliant guy as Ken Olsen didn't "get" what the PC's potential was... and then when DEC belatedly got into PC's with the Rainbow they were so late to the party they never had a chance. And being bought out by Compaq must have been the ultimate indignity.
    19 May 2011, 09:05 PM Reply Like
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    I think we're going to shuck off our Euro-sickness and regain our footing. I'm hoping for change. Free people pursuing happiness will do better in the long run than people in countries lined up in one direction fulfilling the 5-year-plan.

     

    We haven't come to the end of history or the end of innovation. We just have to find a way around all the can't-do people who make up our permanent bureaucracy and ruling class. I think we can do it.
    19 May 2011, 07:04 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    I agree, but there needs to be more regular people running for government 'service'. No more lawyers. No more Harvard/Yale jaundiced throwbacks to the 1940's big society. We need pig farmers and other can-do types, a few with callused hand backgrounds to give it a shot.

     

    I mean, has Obama ever run a shovel into a gravel pit? Does he know the sound of that crunch? His wrists don't have the necessary radius to even understand the physics involved on his thin tendons. He is useless.
    19 May 2011, 07:12 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Turn government service into true service. Cut Congressional pay to zero but pay their expenses. Insist they have a real job they work but recuse themselves of conflicting legislation if it comes up.

     

    Reduce the amount of time spent in WDC attending dinners and raising money and grandstanding in front of the microphones.

     

    Have their congressional staff come out of their districts and let them pay for it.

     

    Basically transform government.
    19 May 2011, 08:49 PM Reply Like
  • ain't no fortunate son
    , contributor
    Comments (1609) | Send Message
     
    good ideas... but just who in Congress would vote for that?

     

    and how does that fix the fact that they're all owned by K Street?

     

    K Street needs to be abolished. PERIOD. NO lobbyists... too bad for the ones who actually have good causes, but that's such a minority its not worth taking the risk with the rest. Then prosecute anyone who takes a kickback, bribe, or any soft dollars.

     

    Then tell the DoJ to grow a spine and actually prosecute financial crime.
    19 May 2011, 09:12 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    It is like turkeys voting for Thanksgiving isn't it?

     

    Reform in WDC is them reforming you not themselves.
    19 May 2011, 10:15 PM Reply Like
  • Ken Solonika
    , contributor
    Comments (165) | Send Message
     
    I grew up around pig farmers. I'll take the educated liberal, "useless tendons" and all. Here's hoping Scalia passes after Obama and his useless tendons win again in 2012.
    19 May 2011, 10:27 PM Reply Like
  • Buddy Canuspare
    , contributor
    Comments (398) | Send Message
     
    Are you kidding?
    The punters will never vote for non-lawyers - they "don't understand the product they're creating."
    The last non-Harvard/Yalies in the White House were Ronald Reagan, a once-in-a-lifetime exception, and Jimmy Carter, a complete nonentity. One for two, not much better than the success rate with the Harvard/Yalies.
    I remember a President who knew the feel of the earth between his fingers, whose success or failure depended on the caprice of Mother Nature and his own hard labor - the selfsame Jimmy Carter, the peanut farmer. Not much of a recommendation.
    20 May 2011, 12:38 AM Reply Like
  • Econdoc
    , contributor
    Comments (2944) | Send Message
     
    what garbage.

     

    all of you buy a copy of Ridley - The Rational Optimist. read it.

     

    better yet - take a walk around

     

    do you know that within our 20 years organic meat will be grown in vats cheaply, humanely and it is likely that raising of cattle for hamburger will look like the typewriter does today. think of the effects of that simple switch. boom - farmland just got a of whole lot cheaper.

     

    fuel from algae, unlimited freshwater with cheap filters that can convert seawater, clothes that repel dirt etc. etc. these products are in development.

     

    look up Stratsys - look at waht they have - research Echo therapeutics - look at their tech.

     

    stagnation? are you kidding? who says that has their head up their ass.

     

    The future is our friend.

     

    E
    19 May 2011, 07:17 PM Reply Like
  • Wyatt Junker
    , contributor
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    Temple Grandin in a cow sham press getting squished and learning cows how to walk in circles before the abbaitor mill. Innovation is interesting. It cannot be forced.
    19 May 2011, 07:19 PM Reply Like
  • 867046
    , contributor
    Comments (398) | Send Message
     
    For once I agree with Edoc versus the usual American neighing nabobs of negativism collective.

     

    My list of frontiers which could be the next home runs:

     

    1) Obama's privatized paths into space.

     

    2) Stem cells. Google Mesoblast.

     

    3) Digital interfacing with human biology.

     

    4) Web driven telemedicine.

     

    5) Algae derived petroleum products.

     

    6) Chemistry that extends human life.

     

    7) Large southwest US solar farms.

     

    8) Plants genetically engineered to be as useful as household appliances.

     

    9) Large scale long lifetime OLED based displays.

     

    Further out:

     

    10) A quantum theory of gravity.

     

    11) Higher temperature superconductors. (Would revolutionize many applications.)

     

    Etc etc lots of stuff. Just barely scratched the surface.
    19 May 2011, 11:56 PM Reply Like
  • inthemoney
    , contributor
    Comments (981) | Send Message
     
    > For once I agree with Edoc versus the usual American neighing nabobs of negativism collective.
    My list of frontiers which could be the next home runs:

     

    But who says it will happen in the US and will employ americans ? The world is getting very small and flat and the american privileged lifestyle is being washed away in the great equalization. The rest of the world continues on and actually is happier than 20 years ago.
    20 May 2011, 12:02 AM Reply Like
  • Bouchart
    , contributor
    Comments (755) | Send Message
     
    Business aren't hiring because we're so incredibly productive.
    19 May 2011, 07:18 PM Reply Like
  • Tack
    , contributor
    Comments (12734) | Send Message
     
    Hey, who has to worry about the future? Isn't the world ending, beginning the day after tomorrow?

     

    www.msnbc.msn.com/id/4.../
    19 May 2011, 07:20 PM Reply Like
  • spald_fr
    , contributor
    Comments (2705) | Send Message
     
    Yes, but you have 9 lives.
    19 May 2011, 07:24 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    Yeah, the Mayans and crap.
    19 May 2011, 07:46 PM Reply Like
  • Neil459
    , contributor
    Comments (2644) | Send Message
     
    Work can be broken down into two types; that that consumes economic wealth and that that produces economic wealth. When you take something out of the ground and sell it that is producing wealth (mining). When you take something of lower value and reconfigure it (manufacturing) that produces wealth. When take something and grow it (agriculture) it produces wealth.

     

    Everything else consumes wealth. In order to do the three activities above you need a lot of consuming activities. But if you or your government has (like our government has) restricted manufacturing and mining then the engine to produce wealth is simply not driving the economy anymore.

     

    Look at countries that do not have raw materials, or good lands for agriculture, or stable governments. In every case they are poor. Our government in its misguided policies are restricting the use of raw materials, so it does not matter that we have them. They are restricting our manufacturing through regulations that make it too expensive and too complicated. So thats out. They are making it unreliable to believe in a consistent and law abiding government. The only thing we have going for us today that provides our economic wealth is agriculture. At some point we either become subservient to another nation or we change these ignorant policies.

     

    We have been an innovator for many years, but we have implemented policies that are destroying that innovation in return for a socialist, we want to feel good about ourselves ideology. An ideology where its better to reward the non-working and other saps on life than to understand that it takes wealth and power to have a stable government and opportunities for all.

     

    A company that is making good profits tends to give better raises to its employees and hires more people. A company that is not generating profits does not give raises and does not hire people. Yet, we as a country attack profits and evil corporations for political gain. Without profitable corporations we are nothing as a country.

     

    Innovation in the long run does not generate economic wealth for us when confronted with restrictions in mining, manufacturing and agriculture and corruption of government. It will certainly help those countries that do not have these restrictions or corruptions. But eventually innovation will move to be closer to its use. Look at integrated circuits. Most of that innovation now occurs in China. That is the future if we keep up the idiotic policies that our current government is pursuing. And thats why what happens in Washington is important for you and your family.
    19 May 2011, 07:53 PM Reply Like
  • Econdoc
    , contributor
    Comments (2944) | Send Message
     
    what a load of nonsense - way too narrow

     

    biotech? software? design? engineering? medicine? anyone in science and R&D? transportation? construction? does not add value? does not produce a good?

     

    the person who designed the Nike swoosh created more value than anyone on this thread.

     

    wealth, prosperity value is generated in a variety of ways. put that swoosh on a pair of shoes and boom - value.

     

    imagination and education, the rule of law, strong institutions (yes good governance is key), property rights, these are some of the things that drive prosperity.

     

    if you want no government go to Somalia and set your buisness up there.

     

    very few activities are a dead weight and destroy value - I will give you two exapmples - tax preparation - it is a dead weight cost - it has no utility. complying with Sarbanes Oxley - the same. these activities hurt rather than help. Everything else is good.

     

    E
    19 May 2011, 08:21 PM Reply Like
  • Fin858
    , contributor
    Comments (462) | Send Message
     
    couldn't have said it better. A lot of fools on this board who mentioned economic ideas without any rooted knowledge on the subject.
    19 May 2011, 08:40 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    The Nike Swoosh created ZERO value unless we're discussing perceived value. I suppose we can talk about public perception, but public perception is often misguided, dumb and wrong. Look at Linkdin's IPO today. Was that value? No. It was a Nike Swoosh.

     

    A pair of 18th century moccasins, no swoosh, stitching worn, better value. Made of buffalo hide. Tough.

     

    Instead, the Nike Swoosh creates the very opposite of value, but rather waste as people are wasting(redistributing) their capital on peer pressure, marketing and the nonsense of reputation.

     

    Does marketing create value? Or is the value what lies beneath the marketing, or the 'why' people respond to the marketing? Say, the substance; ingredients, handcraftmanship, etc.

     

    Or is 'value' like art, what a 3rd grade teacher asks her students; what does this poem mean to you?

     

    I don't think so. Value is measurable, quantitative.
    19 May 2011, 08:46 PM Reply Like
  • Fin858
    , contributor
    Comments (462) | Send Message
     
    Are you telling me a computer program designed to improve mail sorting efficiency isn't valuable? A test to detect cancer early isn't valuable?

     

    All value is perceived as its based on the opportunity cost the other party is willing to give up in order to gain the value they perceive in what you are giving them.

     

    Your thesis on Nike just seems like someone who is not in touch with the brand or what it symbolizes. Just because YOU personally think it has no value, doesn't mean it doesn't.

     

    Nike Swoosh, Google's search engine, Microsoft's office software, they all have substantial economic value, sorry to burst your bubble.
    19 May 2011, 09:09 PM Reply Like
  • Neil459
    , contributor
    Comments (2644) | Send Message
     
    "the person who designed the Nike swoosh created more value than anyone on this thread. "

     

    Yes I agree. They created money and value, but not economic wealth. Its economic wealth that builds nations. Who is going to buy the Nike swoosh if no one has a job? Its not like its required to survive. Who is going to buy the Nike swoosh if everyone works for the government? There will be no money to buy it. Now of course if wealth is generated in another country then they will also buy the Nike swoosh and we will ultimately become subservient.

     

    "imagination and education, the rule of law, strong institutions (yes good governance is key), property rights, these are some of the things that drive prosperity."

     

    Excellent, you said this better than I. But strong institutions won't work without mining, manufacturing, and agriculture.

     

    "very few activities are a dead weight and destroy value - I will give you two exapmples - tax preparation - it is a dead weight cost - it has no utility. complying with Sarbanes Oxley - the same. these activities hurt rather than help. Everything else is good."

     

    I did not say destroy value, I said consume wealth. Consuming wealth includes insurance, fast food, luxury cars, musical and musical equipment, movies, professional sports, fashion dress, liquor, high end restaurants, etc. These are all associated with a wealthy country, but do not create wealth, they consume wealth. They do provide profits, but these profits come from the economic wealth generated by other activities.

     

    How many Nike swoosh's are sold in Bangladesh. Not very many and then only to the elite and rich. We have fooled ourselves into thinking that we can live off of the spoils of economic wealth instead of the real economic wealth. We need to change this now if we want to continue to prosper.
    19 May 2011, 09:20 PM Reply Like
  • Econdoc
    , contributor
    Comments (2944) | Send Message
     
    what are you talking about?

     

    everyone works for the government? becoming subservient? what world do you live in?

     

    I have another book for you - read Red Plenty by Spufford - it is terrific - you will recognize yourself and your ideas.

     

    Prosperity and wealth are measured by the fact that life is getting better at an accelerating rate - in the world generally and specifically in the US. Yes it is accelerating faster in say China and Bangladesh - but that is to be expected since it is off a lower base

     

    let's talk about stuff - since you obsessed by that

     

    First of all - the US makes more stuff today than at any other time in its history - yes - look it up. Take 10 seconds to Google this.

     

    Second - the US makes more stuff than any other nation on the planet

     

    Third - the US exports more stuff than any other nation on the planet.

     

    Fourth It does all this with much less people than it has at any time in its history. Which is great news since it means that we are super productive and the capital is being put to work very efficiently = (ahem) wealth.

     

    But stuff isn't the whole story - a big part of the US economy is services - do you know that the US exported about $500 billion of commercial services in the latest year. How is that possible?

     

    Let's stick with services -
    Let me take one of your examples - let's look at the recent movie Thor which just opened. Thor cost about $120 million to make and went into release two weeks ago. The $120 million was paid to a bunch of lefties in Hollywood. Presumably that money was used by them to buy art and donate to the Democrats and buy lattes. Maybe some went into stocks and maybe was sued as seed money for a some new ventures. Who knows.

     

    The film has grossed over $100 million in the US and it has also grossed about double that overseas - what do you call the money that Chinese and Indian and other foreigners are spending on Thor and where do you think it goes? Oh and if they crate a Thor world down in Orlando and the foreigners come and spend their money on the Hammer ride - then who will benefit?

     

    Even the much maligned Kardashians - who air in a bunch of places are creating wealth.

     

    Fashion? Not creating wealth? What are you talking about> Have you been to Shanghai or Tokyo. Next time you go check out the Prada store there.

     

    The problem with you and a lot of the others on this site is that you do't understand the way the economy and the world works. Since you don't understand it you make a lot of wild assertions and statements.

     

    I pity you.

     

    Do some research. and do read Red Plenty. The Soviets believed what you believe. Did not work.

     

    E
    20 May 2011, 12:14 AM Reply Like
  • Buddy Canuspare
    , contributor
    Comments (398) | Send Message
     
    Wait a minute.
    "we have implemented policies that are destroying that innovation in return for a socialist"
    So innovation moves to China, a totalitarian, Communist dictatorship?
    Or India, an overbearing socialist state modeled on the worst practices of its former colonial master?
    Or Brazil - Lula's Brazil?
    Or Singapore, still under Lee Kuan Yew's iron fist?
    Or Russia, under Vladimir Putin's likewise?
    Or Canada, our socialistic neighbor to the north, with the hard-left NDP replacing the soft-left Liberals in opposition?
    So, what's your point - that socialism is bad for innovation until it isn't? The economic successes of the above-mentioned states seem contraindicative, no?
    20 May 2011, 12:52 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    Everything you mentioned has value, everything except the Nike Swoosh.

     

    Again, show me the value of the Nike Swoosh. Does it make you jump higher?

     

    Microsoft Office makes me more efficient. Google adwords and their backend analytics make marketing more efficient.

     

    Is the Nike Swoosh like fire coming out of my feet? Does it propel me faster? Does it make my running more efficient? The Mexican shoeless super marathon runner outruns the Nike shoe athlete with less lifetime injuries. Bare feet are more efficient.

     

    Did Air Jordans make inner city kids better ballers? As a ratio, how many of them inked multi-million dollar NBA deals as a result of wearing the shoe? Contrast that with Microsoft which helps millions of businesses make boatloads of money by virtue of its organizational efficiency.

     

    This is the difference between perceived value and real value.
    20 May 2011, 02:50 AM Reply Like
  • Tack
    , contributor
    Comments (12734) | Send Message
     
    Wyatt:

     

    There is no such thing as "real" value versus less-than-real value, from an economic standpoint. Anything that amplifies monetary velocity or, from a competitive view, enhances one's products versus a competitor, has value. There are innumerable designs, trademarks and copyrights which have been created which have enormous commercial value.

     

    Just to cite one example, you think the "golden arches" of McDonalds don't have value? Or, the Ralph Lauren Polo logo? The list goes off over the horizon.

     

    Economic wealth is created by making money change hands. If seeing those arches, driving down the road, causes one to choose that place to stop, then it's done its job. Same with that little polo pony on somebody's shirt. Or, the "swoosh" logo on Nike's tennis shoes.

     

    If a particular individual finds no value in something abstract, like a logo, for him/her, that's fine (that's why generic products exist), but to suggest that none of these things have or influence value is an errant economic conclusion.
    20 May 2011, 04:25 AM Reply Like
  • Fin858
    , contributor
    Comments (462) | Send Message
     
    I agree. Great post.
    20 May 2011, 07:20 AM Reply Like
  • inthemoney
    , contributor
    Comments (981) | Send Message
     
    > So, what's your point - that socialism is bad for innovation until it isn't? The economic successes of the above-mentioned states seem contraindicative, no?

     

    It is because economic system is just one of the drivers. The other drivers are need and hunger, and they are much stronger drivers too. Americans have so many opportunites open to them but how many actually see it and take advantage of them? Not many because they take them for granted, nothing is ever enough. They take soup kitchens for granted, food banks for granted, second hand free clothes for granted, homeless shelters, avialbility of credit, free education which can be good if you apply yourself, best colleges in the world which also can be free if you can apply yourself, opportunites to work in most advanced fields, rule of law, legal protection. So much is taken for granted and that is the crux of the problem. It takes a foreigner to see what americans don't.
    20 May 2011, 08:50 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    Value = catalyst for money velocity. I suppose.

     

    For me personally I'm just not a believer in subjective or qualitative value from the perspective of the product or service sold. It seems this definition makes money velocity itself the only thing of 'value'. Not the product or service sold. Perhaps this is my mistake. It makes sense. I have a difficult time believing the value of Starbucks over a can of Folger's and in the sense that an idiot with their money are soon parted, qualitatively speaking, idiots abound. And yet, the Starbucks brand causes millions of those idiots to ram cash into their registers for little economic value other than brand itself. Nothing of real value when coffee can be had at much, much cheaper cost. The value of the beans are the same except when one grinds them, and drips them into a white and green cup with a mermaid on it, then the value ramps. The coffee has the same, indistinguishable taste, flavor and body as a Dunkin Donuts. Cool then = value. We can never underestimate the power of explotation over an army of idiots.

     

    The same with Nike. Its a damn shoe, Swoosh or not. Qualitatively speaking. Now, QUANTITATIVELY(big difference), it does increase money velocity by virtue of the Swoosh due to the idiots that the Swoosh influences. But the quality of the shoe, the shoe itself, the value of the plastics, the cost of the fabric, the labor, etc. and the actual cost to make the shoe are minimal, as minimal as a generic.

     

    So marketing itself then, the Don Drapers of the world, are the real value in that sense, not the quality of the shoe. Working that into anything, we can see that this is simply a magician's trick or rather the art of the pied piper. For example, at this point an Android phone is basically the same damn phone as an iPhone for all intents and purposes, qualitatively speaking. Perhaps a few apps less than the iCult's. However, the marketing of being first matters and the people who really understand value will merely buy the cheaper phone since they're basically the same.

     

    Of course logos influence consumer behavior, but that has little to do with actual value or what your dollars purchased for that product. The perception is not value since its subjective. Objectively speaking, we can have two identical phones, both with the same exact microprocessors, design elements, battery life, apps, etc. and one we will place a Samsung logo over the top and the other an Apple logo. Same phone, two different logos. Which has more value? From a money velocity perspective, the phone with greater value is the one where the idiots who pay up soley for the logo. I guess I would make a terrible collector of art or cars because such 'value' depends on the subjectivity of a buyer which is whimsical by nature. Sometimes those buyers in the marketplace exist, most times they don't. So the economy itself then ultimately determines value. In good times, value would skyrocket from a monetary perspective since it would flood the market with dollars giving people the perception of more wealth and thus higher associated 'values'. But the object or service would always remain a constant.

     

    I can see your point. I do collect guns. And I place a premium on certain collectibles if there is a historical value associated to them. But in the end, they are all just a long tube with a wood stock. A gun is a gun is a gun. However, from a strictly utilitarian measure, I also buy guns that are cheap like the Savage .308 floating barrrel sniper rifle. Excellent gun but not a premium brand. Great value! Same could be said for the Austrian Glock. Cheap guns, but not a German HK yet the Glock fires just as good if not better. Again, great value, lower money velocity.

     

    We're just using two different definitions for the same word.
    20 May 2011, 11:44 AM Reply Like
  • Tack
    , contributor
    Comments (12734) | Send Message
     
    Wyatt:

     

    I follow all of your posts, and many are full of economic good sense, not to mention a great degree of hilarity, at times. However, I'd suggest, in this case, that you step away from the "bite down on it to see if it's real" approach to economics and take a broad view of money movement.

     

    In modern economies, it's the constant flow of capital that drives wealth and commerce. Many, probably most, things on which money is spent these days are 100% optional, not necessary, and that applies whether we're talking about having your grass mowed, that shiny new iPhone somebody just purchased, or somebody's sexy new duds, complete with Polo logo. In fact, in modern society it really is about (monetary) "motion," as much as it is about "movement."

     

    Think about how stultified and lethargic, not to mention limited, life would be if everybody applied a rigid test of whether something was really "necessary," as the true test of "value." The only folks making a dime would be local farmers, the guy chopping some firewood and, perhaps, a tent-maker or two. Almost everything we do, value and sometimes buy is merely based on wants and likes.

     

    True necessities in today's world have become routine commodities and hold rather low relative values, in fact. It's why inventiveness, newness, cleverness, design, beauty and even usefulness, are free to be so highly rewarded.
    20 May 2011, 11:56 AM Reply Like
  • inthemoney
    , contributor
    Comments (981) | Send Message
     
    > Instead, the Nike Swoosh creates the very opposite of value, but rather waste as people are wasting(redistributing) their capital on peer pressure, marketing and the nonsense of reputation.

     

    I have to agree with that. Those additional $50 paid for the swoosh couldn't been saved and compounded for retirement.
    Of course, we don't know how Nike used these $50. If they used it on R&D then the value is nto lost, just transferred. But if it went towards the higher exec salary who used it to buy BMW who knows what BMW did with it.
    I think where the value is lost is on developing and marketing all these brands. There is no productive value in them other than getting an edge over your competition.
    Would you rather buy a pretty car or a well designed sturdy car? As the experience shows the people will go for a pretty car even though it turns out to be a worse deal in the end. value is lost in catering to the irrationality of humans -)).
    20 May 2011, 12:03 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    buddy

     

    Not a lot of innovation in China yet and they worry about it. Everyone there is used to taking orders which is a bad environment for innovation.

     

    The US is still very innovative in the technology field but in education, the practice of medicine and government they are not doing much.

     

    India is a whole different animal then what they were a few decades ago.

     

    Innovation happens where it is rewarded. If it is stolen or squashed by government then pass the Vodka a la the USSR.
    20 May 2011, 12:07 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    I'm old school. I admit it.

     

    You hand me a coin for payment? I'll bite down on it to verify its authenticity.

     

    Most people still believe in the currency and what their government tells them.

     

    I check under the hood of a car I'm interested in buying. I kick the tires, like your grandpa used to do.

     

    I want to see if things are real or just stupid.

     

    I like craftsman homes for the same reason. You can go buy a McSuburb, 16 on center studded wall with two slices of gypsum on either side. Or you can buy a rock solid 2 by 6 stud monster where a guy with a trowel laid bricks into the side for better insulation.

     

    I like bang for my buck.

     

    My wife wanted a Coach purse. $800. She's a brand hound. I told her I'd get her one. I got her one. Used. Same one she wanted. $75.

     

    I can't run with the crowd, the crowd of idiots. Its like watching the Running of the Bulls. They always get gored.
    20 May 2011, 12:10 PM Reply Like
  • Tack
    , contributor
    Comments (12734) | Send Message
     
    Wyatt:

     

    See, the "Coach" had value (at least to your wife), and you were smart to get a deal (I love deals, too, especially on stocks), leaving more capital available for other discretionary purchases.

     

    A win-win.
    20 May 2011, 12:14 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    And I've always wanted to own a bit of COH myself, the stock not the handbag, but I've felt its always moved away from me. Too rich. Trust me, I recognize the power of the brand, just not for me personally. But I will invest in companies that understand the folly of the consumer, at least for as long as that trend remains viable.
    20 May 2011, 12:21 PM Reply Like
  • Windsun33
    , contributor
    Comments (4254) | Send Message
     
    I suspect that the next giant in innovation and new patents will be India, not China, though China will have it's share. Also a bit surprising is the rise in Australian patents. www.uspto.gov/web/offi...
    20 May 2011, 08:01 PM Reply Like
  • Neil459
    , contributor
    Comments (2644) | Send Message
     
    "In modern economies, it's the constant flow of capital that drives wealth and commerce. "

     

    It drives profits, individual wealth, and commerce, but not national economic wealth. Money flow is a great circular matrix. When profit is made from an activity it is used to buy other things which generates profit again and again. They cycle keeps going. When one takes stuff out off the ground, grows it, or reconfigures it, the circular matrix gets bigger. When you don't the matrix starts to shrink. Now money can be printed to make the circular matrix temporarily bigger but then things start to cost more and the circular matrix gets smaller. Inflation makes the circular matrix smaller.

     

    Its not about real or not real, its not about flow, and its not about needed or not needed. When you can find something of value for free (mined, grown or converted) that adds to the circular matrix.

     

    When we had a large manufacturing base because of raw material usage and manufacturing we generated a lot of wealth that we are still living on. For some time the government has had to print money to keep the circular matrix from shrinking.

     

    Admittedly, this is old school thinking. The government and everyone else wants everyone to believe we have moved passed the old realities. But nothing else explains what is happening today. Nothing else explains why countries with solid manufacturing, agriculture, and mining are growing and becoming more wealthy. And countries that are reducing in these areas are retracting.

     

    If you are a politician then you would not dare put forward the notion that we are past our prime driven by stupid political decisions. So what better way to explain it than to say, "reality has changed, we live in an information age."
    21 May 2011, 10:29 AM Reply Like
  • Neil459
    , contributor
    Comments (2644) | Send Message
     
    "So innovation moves to China, a totalitarian, Communist dictatorship?"

     

    The've been stealing and buying our innovations for years.
    21 May 2011, 10:34 AM Reply Like
  • Tack
    , contributor
    Comments (12734) | Send Message
     
    Yes, everything has already been discovered and/or invented. And, their effects are bad, too.

     

    Of course.
    19 May 2011, 08:50 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    More innovation to come in all areas. This will also drive transformation of industries and our lifestyle. It should improve standards of living provided we can get energy costs under control and don't drive inflation through the roof.
    19 May 2011, 08:52 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4503) | Send Message
     
    I think the innovation question to drive future growth is solved in the energy sector, one that can exist without government subsidy. It has to stand on its own two legs in the free market. And it has to be able to handle real baseloads and not just hamster wheel Gilligan's Island coconut bicycle stuff. The word 'green' has to die first. Then we can actually become energy independent as the free market will then find the way.
    19 May 2011, 09:01 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    There is a lot of innovation in other areas to come but this is not an either or debate.

     

    I agree on the energy comments......and kill the "green" BS. My brother was/is going to start a T-shirt business showing Obama on the front picking his nose and underneath the words "Green Energy."
    19 May 2011, 09:27 PM Reply Like
  • lecholsjr1
    , contributor
    Comment (1) | Send Message
     
    No, as we have liquid markets, technology center, economic freedoms and etc, we'll continue to pump out productivity. Although, I don't think my peers in Gen y see our nation as competing with other nations as previous generations have. We prefer to work with anyone willing to come to the table with great ideas. Social networking is is simply the seed of what's to come in the following decades. Watch and prepared to be stuck in awe.
    19 May 2011, 10:15 PM Reply Like
  • Glen Bradford
    , contributor
    Comments (487) | Send Message
     
    welling.weedenco.com/h...
    20 May 2011, 12:11 AM Reply Like
  • Windsun33
    , contributor
    Comments (4254) | Send Message
     
    I suspect that the next "big thing" will be something that is not even on the radar right now. Assuming that civilization does not collapse or get mired in some kind of neo-communist scenario, innovation is almost exponential.

     

    So many things are interconnected now that it is very difficult to tell exactly what direction it will come from. Knowledge feeds on itself, and things that are not possible or thought of this week might be headlines next week.
    20 May 2011, 03:03 AM Reply Like
  • Jackson999
    , contributor
    Comments (468) | Send Message
     
    There is plenty more productivity to be gained.

     

    But it isn't going to come from hu-mans working harder. No, the productivity will be coming from the robots working 24 X 7 X 365 w/o complaints.
    20 May 2011, 04:05 AM Reply Like
  • Poor Texan
    , contributor
    Comments (3529) | Send Message
     
    So learn robotics so you can maintain the machines.
    20 May 2011, 10:31 AM Reply Like
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    And it will create new jobs for the companies that make those robots and provide maintenance services for them.
    20 May 2011, 10:40 AM Reply Like
  • Jackson999
    , contributor
    Comments (468) | Send Message
     
    Robots will diagnose their own problems and be self-repairing. Or other robots will do the repairs. You guys need to read more SF!
    20 May 2011, 01:50 PM Reply Like
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    Any true fan of SciFi of course knows that we will eventually be working FOR the robots! ;-)
    20 May 2011, 01:57 PM Reply Like
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