A historical collection of our writing.
In my post on Computers and the Return on Capital I made the point that cheaper and more ubiquitous flows of information will drive the risk free return on capital towards the time preference (assuming that capital can also flow freely). But I didn’t really explain what that meant or how it was […] Read more (opens Continuations in a new tab)
Yesterday’s post on the impact of computers on the return of capital didn’t mention the shift from producer to consumer surplus. Tren Griffin rightly called this out on Twitter. I have written a lot about the rising importance of consumer surplus and should have mentioned it in this context as […] Read more (opens Continuations in a new tab)
Having examined the impact of computers on wages the logical next question to ask is what this means for the returns on capital. Here is the TL;DR version: higher returns in the short run and lower returns in the long run. We are already well into this short run period and we are beginning to […] Read more (opens Continuations in a new tab)
As I argued in my last post, there is good reason to believe that computers are substitutes for labor in general. Their apparent complementarity with skilled labor was the result of substituting skilled labor for unskilled labor rather than being based on a fundamental technological […] Read more (opens Continuations in a new tab)
Earlier this week I posted about production functions which must have felt very dry but I promise there is a payoff (terms defined in the previous post are linked). Let’s consider a production function with three factors: computers, skilled labor and unskilled labor. What we are interested in […] Read more (opens Continuations in a new tab)
So I have been meaning to write more about what is happening to labor and capital as we transition from industrial society to information society. To do that well I need lay some groundwork first though by talking about the idea of a production function. A function as you may recall from math is […] Read more (opens Continuations in a new tab)
