February 5, 2023

IT'S WHY DESTRUCTION IS SO CREATIVE:

Economist Paul A. David Looked Back to See Forward (James R. Hagerty, Feb. 2, 2023, WSJ)

One of his most celebrated papers, "The Dynamo and the Computer," examined the slow spread of electrical machinery in manufacturing in the late 19th and early 20th centuries to explain something that was puzzling economists in the early 1990s: Why the widespread adoption of computers wasn't igniting a surge in the productivity of U.S. workers.

In the case of both electrification and computerization, Dr. David concluded, it could take decades for some businesses to adopt better tools and reorganize their operations to take full advantage of them. Within a few years of the publication of his paper in 1990, U.S. productivity finally did start to show a growth spurt.

Dr. David attracted even more notice with a short reflection on the dominance of the QWERTY keyboard design despite claims that different configurations would allow for much faster typing. After typists and typewriter manufacturers in the 19th century had embraced the QWERTY standard, he found, buyers of typewriters were reluctant to junk equipment and deeply entrenched habits. Though critics attacked some of his assertions about the disadvantages of QWERTY, Dr. David maintained that the paper showed how random events and the advantages of following the herd could lead people to settle for suboptimal technology. [...]

Through his studies of history, he found that the widespread use of new technology could be delayed for many reasons. Farmers in England were slow to adopt mechanized harvesting equipment, for instance, because the slopes of their fields made it difficult to use. For textile companies, old multilevel factories with narrow spaces between pillars could make it impossible to install the latest equipment.

In 1882, Thomas Edison set up an electric power plant to light up parts of New York. Four decades later, only slightly more than half of factory mechanical drive capacity had been electrified, Dr. David wrote. Many factory owners clung to leather pulleys and steam power.

In his 1985 paper "Clio and the Economics of QWERTY," Dr. David wrote that the keys were first arranged in that format partly as a way of reducing the risk of jamming typewriters in "typebar clashes." Long after improved technology eliminated such clashes, QWERTY remained dominant. It was the firmly established basis of typing courses, and bosses were hesitant to invest in retraining people.

Some economists objected that QWERTY wouldn't have survived if there were major gains in efficiency to be had from switching to a different keyboard. Some of their more vehement objections may have reflected an incorrect belief that Dr. David was calling for more government intervention in the economy. Instead, he was trying to explain why people wouldn't necessarily flock to the most efficient technology in the short term.



Posted by at February 5, 2023 12:00 AM

  

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