Posts Tagged ‘innovation’
“It’s easier to imagine the end of the world than the end of capitalism”*…
… so it’s useful to contemplate its beginning. David Rooney, in an excerpt from his book About Time…
Ömer Aga stood in the middle of Amsterdam’s Dam Square surrounded by his nineteen-strong party of advisers, interpreters and hosts, and gazed toward the huge new trading exchange that straddled the mighty Rokin canal, just to the south of the square. The year was 1614, and Aga was on a fact-finding mission to the Dutch Republic as the Ottoman Empire’s newest diplomatic emissary. Top of his list of must-see sights was this bold new building, completed just three years earlier. It was hard to miss, as it was the size of a soccer field and could accommodate thousands of traders in its 200-by-115-foot enclosed inner courtyard, but what Aga really noticed was the four-sided clock tower that loomed over the vast structure and the streets and canals all around, as well as the booming sound of its bell when they rang out the hours and then, at noon, tolled repeatedly for a few minutes before falling silent. Little did they realize it, but Omar Aga and his retinue were listening to one of the most significant clocks ever made. It was fitted to the world’s first stock exchange and sounded the birth of modern capitalism.
From the moment the Amsterdam exchange building first opened its doors in August 1611, traders were forbidden from trading anywhere else in the city. But the exchange did not just put spatial boundaries on trade. It concentrated traders in time, too. A few days before the new facility opened, the city council had issued a bylaw proclaiming that trading could only take place between the hours of 11 a.m. and noon, Monday to Saturday. At noon, the clock installed in the tower high above the exchange building would toll a bell for seven and a half minutes. If any traders were still in the exchange, or in the streets nearby, they would be fined. Additionally, trading was allowed between 6:30 p.m. and 7:30 p.m. during the summer months between May and August, and in winter evening trading took place for a thirty-minute period marked by a tolling bell at the city’s gates. At the end of evening trading, the exchange clock would again sound for seven and a half minutes and fines were issued for anyone caught trading after the bells fell silent.
Why were such strict limits placed on trading at the Amsterdam exchange? There were several reasons. One was a practical problem familiar to anybody involved with trade in a busy city center: time limits reduced congestion and disruption in the streets nearby. Another was that clocks made trading more efficient. Short, fixed trading hours concentrated buyers and sellers together, making it easier for each to find enough of the other. This increased the volume of trade, which was good for traders and for the city council collecting taxes on transactions. But clocks also helped prices to remain fair, as they could be used to regulate the people who occupied intermediate roles in the functioning of a market.
Some of the earliest references to mechanical clocks being used in towns and cities, in the Middle Ages and soon after, related to market restrictions. The first urban markets brought producers of food, cloth and so on into direct contact with the consumers of their wares. But as towns and cities grew, this model started to break down. It stopped making sense for every producer in the countryside to make the journey all the way to the center of towns. So, ‘intermediate trading’ emerged, whereby third parties might buy up the goods from several small producers somewhere on the edge of town, before bringing them in and selling them themselves at the market. Soon, a whole range of intermediate roles sprang up. Wholesalers, merchants, shopkeepers and peddlers were some, but intermediates also included financiers who advanced funds, and those speculating on the future in the hope of offsetting risk (whether because of bad harvests or other unpredictable events) and making more money. Some people occupied more than one role.
As populations grew and moved in increasing numbers to towns and cities, and markets began to sell more and more products, the rise of intermediate roles in market-based trade was inexorable, creating a new stratum of people who neither produced goods nor consumed them, but traded, speculated, brokered, hoarded, flipped and financed. Some market authorities feared intermediates would drive up prices or limit supplies and turned to clocks to control their involvement. Clocks meant that different groups could be treated differently at the market. In a sixteenth-century grain market, for instance, the first hours of trade could be restricted to residents, before bakers of bread could get in, and then the pastry bakers could enter. Only after several hours were wholesalers and other intermediate traders allowed in. But as societies and their market trading became ever more complex, the role of intermediates like brokers and financiers became increasingly important in keeping the flow of trading running smoothly. And, before long, finance became something that could be traded in its own right, and clocks took on a new regulatory role.
Amsterdam’s was not the first trading exchange. Antwerp and London had had exchanges since the sixteenth century where goods and money were traded, but Amsterdam was the first of a new kind of exchange: what became the modern securities exchange. As well as being a place to trade in commodities like salt or hides, people could also buy and sell financial assets. It started out as a place to buy and sell shares in the Dutch East India Company, an early joint-stock company and the first with freely tradable shares, but soon was used to trade other company shares, futures contracts and insurance policies as well as becoming the place to go for information about the state of the markets. The financial market had arrived, but its products, and the prices paid for them, which were time-dependent. The time at which each securities transaction was made, or would be enacted in the future, was central to this new type of trading to work fairly, everybody had to agree what time this was. In other words, trading needed time stamps, which is where the exchange clock came into its own. Clocks were no longer about excluding intermediates from the market. In the new exchanges, intermediates were the market — with the clock watching carefully over the whole thing…
The birth of modern capitalism and the role that timekeeping played in its nascence: The Amsterdam Stock Exchange, from @rooneyvision, via the invaluable @delanceyplace.
* Fredric Jameson (also sometimes attributed to Slavoj Žižek)
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As we examine enterprise, we might recall that it was on this date in 1937 that Sylvan Goldman introduced the first shopping cart in his Humpty Dumpty grocery store in Oklahoma City.
“If the world’s 223 international undersea cable systems were to suddenly disappear, only a minuscule amount of this traffic would be backed up by satellite, and the Internet would effectively be split between continents”*…
Your correspondent is hitting the road, so (Roughly) Daily will be a good bit more roughly than daily for a bit. Regular service should resume on or around May 6. Meantime, a fascinating– and meaty– piece to hold you…
Josh Dzieza goes deep on an undersung technology and the folks who keep it functioning…
The world’s emails, TikToks, classified memos, bank transfers, satellite surveillance, and FaceTime calls travel on cables that are about as thin as a garden hose. There are about 800,000 miles of these skinny tubes crisscrossing the Earth’s oceans, representing nearly 600 different systems, according to the industry tracking organization TeleGeography. The cables are buried near shore, but for the vast majority of their length, they just sit amid the gray ooze and alien creatures of the ocean floor, the hair-thin strands of glass at their center glowing with lasers encoding the world’s data.
If, hypothetically, all these cables were to simultaneously break, modern civilization would cease to function. The financial system would immediately freeze. Currency trading would stop; stock exchanges would close. Banks and governments would be unable to move funds between countries because the Swift and US interbank systems both rely on submarine cables to settle over $10 trillion in transactions each day. In large swaths of the world, people would discover their credit cards no longer worked and ATMs would dispense no cash. As US Federal Reserve staff director Steve Malphrus said at a 2009 cable security conference, “When communications networks go down, the financial services sector does not grind to a halt. It snaps to a halt.”
Corporations would lose the ability to coordinate overseas manufacturing and logistics. Seemingly local institutions would be paralyzed as outsourced accounting, personnel, and customer service departments went dark. Governments, which rely on the same cables as everyone else for the vast majority of their communications, would be largely cut off from their overseas outposts and each other. Satellites would not be able to pick up even half a percent of the traffic. Contemplating the prospect of a mass cable cut to the UK, then-MP Rishi Sunak concluded, “Short of nuclear or biological warfare, it is difficult to think of a threat that could be more justifiably described as existential.”
Fortunately, there is enough redundancy in the world’s cables to make it nearly impossible for a well-connected country to be cut off, but cable breaks do happen. On average, they happen every other day, about 200 times a year. The reason websites continue to load, bank transfers go through, and civilization persists is because of the thousand or so people living aboard 20-some ships stationed around the world, who race to fix each cable as soon as it breaks…
The internet cables that knit the world together and the people that keep them working: “The Cloud Under the Sea,” from @joshdzieza in @verge. Eminently worth reading in full.
* Nicole Starosielski, The Undersea Network
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As we dive deep, we might send effectively-transmitted birthday greetings to a pioneer of telecommunications, Granville Woods; he was born on this date in 1856. An inventor, he held more than 50 patents, for innovations that ranged from a locomotive steam boiler to an egg incubator. But he is probably best remembered for his Synchronous Multiplex Railway Telegraph, a variation of the induction telegraph that relied on ambient static electricity from existing telegraph lines, allowing railroads to send messages between train stations and moving trains.
He is often referred to as the first African American mechanical and electrical engineer after the Civil War and as “the Black Edison” (sic).
“We all live in each other’s shadow”*…
Further, in a fashion, to yesterday’s post, Nathan Gardels, editor of Noema Magazine, on a new book by Children of a Modest Star, “A clear-eyed and urgent vision for a new system of political governance to manage planetary issues and their local consequences” by Jonathan Blake and Nils Gilman…
Globalization was about markets, information flows and technology crossing borders. The planetary is about borders crossing us, embedding and entangling human civilization in its habitat. That, in a nutshell, is the core thesis of a new paradigm-shifting book by Jonathan Blake and Nils Gilman titled “Children of a Modest Star: Planetary Thinking for the Age of Crises.”
The concept of planetarity describes a new condition in which humans recognize not only that we are not above and apart from “nature,” but that we are only beginning to understand the complexities of our interdependencies with planetary systems.
“If Copernicus’s heliocentrism represented the First Great Decentering, displacing the Earth from the center of the heavens, and Darwin’s theory of evolution by natural selection the Second Great Decentering, then the emergence of the concept of the Planetary represents the Third Great Decentering, and the one that hits closest to home, supplanting the figure of the human as the measure and master of all things,” Blake and Gilman write.
As further argued by the authors in a forthcoming Berggruen Press volume, “the Planetary as a scientific concept focuses on the Earth as an intricate web of ecosystems, with myriad layers of integration between various biogeochemical systems and living beings — both human and non-human. Drawing on earth system science and systems biology, this holistic understanding is being enabled by new planetary-scale technologies of perception – a rapidly maturing technosphere of sensors, networks, and supercomputers that collectively are rendering the planetary system increasingly visible, comprehensible and foreseeable. This recently-evolved smart exoskeleton — in essence a distributed sensory organ and cognitive layer — is fostering an unprecedented form of planetary sapience.”
The open question is how, and if, human governance in the late-stage Anthropocene can align with the knowledge we are now attaining.
Paradoxically, planetary-scale connectivity is also what divides us. Convergence entails divergence because the universalizing and rationalizing logic of technology and economics that ties the world together operates in a wholly different dimension than the ethos of politics and culture, rooted in emotion and ways of life cultivated among one’s own kind.
While the emergent world-spanning cognitive apparatus may be sprouting the synapses of a synchronized planetary intelligence, it clashes with the tribal ingathering of nations and civilizations that remain anchored in their historical and spatial identity.
Consequently, this new domain of encompassing awareness is — so far — as much the terrain of contestation as of common ground…
[ Gardel unpacks Blake’s and Gilman’s proposition, which would devolve some decision-making on some issues, even as it globalized others. By way of addressing the Herculean challenge of creating the equitable, workable global system for addressing global challenges they [propose– a task made the more difficult by the divergence in values discussed yesterday— he invokes an episode from American history…]
… At the turn from the 19th to the 20th century, America was morphing from an agricultural, largely rural society into an urban and industrial one. Cultural norms and familiar ways of living were in upheaval. Political institutions that had become dysfunctional were challenged — not so unlike the disruptive transition to digital society and planetarity we are experiencing at present.
The turmoil of transition in those days gave birth to what became known as the Progressive Era. Its progenitors sought to address the new social concerns of a more complex society — working hours and safety conditions in newfangled factories, women’s suffrage, public health exposure from mass food processing, poor urban infrastructure from housing to water and electricity, the concentration of power in the railroad and banking trusts as well as exploitative private utility companies.
The Progressive Era response in the American states was to move in two directions at once. The movement promoted direct democracy whereby citizens could make laws and enforce accountability directly, skirting the corrupt and bought-off legislators of the patronage machines, through the citizens’ ballot initiative, the referendum and the recall of elected officials. At the same time, elected Progressive governors delegated authority to nonpartisan experts for commissions that regulated commerce, banking, railroads and electric utilities on behalf of the public interest. Professional city managers, unelected but accountable to direct democracy and the elected officials who appointed them, came into being for the first time to competently administer ever more complex urban environments.
In time, the reforms that resulted from this pairing of citizen engagement and technocracy percolated up to the national level into institutions such as the Interstate Commerce Commission or the Food and Drug Administration and led to the abolition of child labor, the eight-hour working day and women’s right to vote.
The point of this brief detour into American history is not to suggest the unworkable proposition of direct democracy at a planetary scale, but simply to say that it is well within the capacity of the political imagination to marry modes of consent with delegated authority in a way that confers legitimacy.
The paradigm shift and governing innovations Blake and Gilman propose in “Children of a Modest Star” are no less realizable over time than what has come before because, now just as then, changing circumstances demand it…
A paradigm shift from globalization to planetary governance? “The Third Great Decentering,” @NoemaMag @JonathanSBlake @nils_gilman.
* Irish proverb (in Gaelic, “Ar scáth a chéile a mhaireann na daoine”), quoted by Irish Prime Minister Michael Martin
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As we think systemically, we might recall that on this date in 1998 The Price Is Right aired its milestone 5,000th episode (the longest-running game show in history, it’s over 10,000 episodes to date, and still chugging along). Every prize given away on that episode was a car.
“Start with something simple and small, then expand over time. If people call it a ‘toy’ you’re definitely onto something.”*…
From the always-illuminating Ernie Smith, a survey of 10 portable electronic toys—some well-known, some obscure—that highlighted how creative toy-makers were when the canvas was completely open.
For a moment, consider the evolutionary space between the original Game Boy and the iPad. Both defined the way kids would experience computers in a portable format, but were so defining that they kind of set the template for everyone else. But it was clear that the Game Boy was a mere plateau of technological advancement, which allowed some technological wiggle room. Meanwhile, the iPad was considered such a technological ideal that many companies just copied its basic design, killing off true evolution until, say, the Nintendo Switch. That leaves a gap of about 22 years in which handheld gadgets for kids were really freaking experimental and interesting…
[Ernie reviews ten toys, each of which pushed the envelope; several of which inspired features/interfaces we use use today…]
… Admittedly, most devices on this list highlight the potential positive effects of technology on how we approach life, while others are clearly designed to work against the tension technology was creating.
Your kid may want a laptop, but a laptop is expensive, so get them a VTech device instead. They want a cell phone, but cell phones come with risks and data plans. So, it’s better to give them a walkie-talkie that carries itself like a cell phone, rather than expose them to the real thing, right?
There’s also something to be said about the fact that many of these devices have practical limits. You’re not talking to the open internet with most of these gadgets, and most are designed to only work with a handful of people around you. That limits the addiction factor of these gadgets for the most part.
But these designs are ultimately designed to be outgrown. If you really get into a Barbie digital camera, eventually you’re going to want a real one. And if a kid gets into a PDA-style device or creativity tool, they’re going to pick up a computer and figure out that they can do way more.
Electronic toys still abound, but one gets the feeling that convergence cost us some of the more fascinating ideas on this list. I mean, there’s only so much an iPad can do, right?…
Looking back at a bunch of toy electronics that may have latently inspired the tech that we use today… take the tour: “Digital Training Wheels,” from @ernie@writing.exchange (on Mastodon).
* Aaron Levie (co-founder and CEO of Box) @levie
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As we hook ’em young, we might recall that it was on this date in 1931 that the state legislature in Nevada legalized casino gambling in the state. In fact, gambling had been legal in Nevada until 1909 (by which time it was the only state with legal gambling), when an earlier instantiation of the legislature outlawed it.
Casino revenues– gambling, hospitality, and entertainment– in the U.S. generated nearly $329 billion in economic activity in 2022.
(Coincidentally, it was on this date in 1942 that Alfred G. Vanderbilt and a number of horse racing luminaries established the Thoroughbred Racing Associations of North America.)
“The clustering of technological innovation in time and space helps explain both the uneven growth among nations and the rise and decline of hegemonic powers”*…
As scholars like Robert Gordon and Tyler Cowan have begun to call out a slowing of progress and growth in the U.S., others are beginning to wonder if “innovation clusters” like Silicon Valley are still advantageous. For example, Brian J. Asquith…
In 2011, the economist Tyler Cowen published The Great Stagnation, a short treatise with a provocative hypothesis. Cowen challenged his audience to look beyond the gleam of the internet and personal computing, arguing that these innovations masked a more troubling reality. Cowen contended that, since the 1970s, there has been a marked stagnation in critical economic indicators: median family income, total factor productivity growth, and average annual GDP growth have all plateaued…
In the years since the publication of the Great Stagnation hypothesis, others have stepped forward to offer support for this theory. Robert Gordon’s 2017 The Rise and Fall of American Growth chronicles in engrossing detail the beginnings of the Second Industrial Revolution in the United States, starting around 1870, the acceleration of growth spanning the 1920–70 period, and then a general slowdown and stagnation since about 1970. Gordon’s key finding is that, while the growth rate of average total factor productivity from 1920 to 1970 was 1.9 percent, it was just 0.6 percent from 1970 to 2014, where 1970 represents a secular trend break for reasons still not entirely understood. Cowen’s and Gordon’s insights have since been further corroborated by numerous research papers. Research productivity across a variety of measures (researchers per paper, R&D spending needed to maintain existing growth rates, etc.) has been on the decline across the developed world. Languishing productivity growth extends beyond research-intensive industries. In sectors such as construction, the value added per worker was 40 percent lower in 2020 than it was in 1970. The trend is mirrored in firm productivity growth, where a small number of superstar firms see exceptionally strong growth and the rest of the distribution increasingly lags behind.
A 2020 article by Nicholas Bloom and three coauthors in the American Economic Review cut right to the chase by asking, “Are Ideas Getting Harder to Find?,” and answered its own question in the affirmative.6 Depending on the data source, the authors find that while the number of researchers has grown sharply, output per researcher has declined sharply, leading aggregate research productivity to decline by 5 percent per year.
This stagnation should elicit greater surprise and concern because it persists despite advanced economies adhering to the established economics prescription intended to boost growth and innovation rates: (1) promote mass higher education, (2) identify particularly bright young people via standardized testing and direct them to research‑intensive universities, and (3) pipe basic research grants through the university system to foster locally-driven research and development networks that supercharge productivity…
…
… the tech cluster phenomenon stands out because there is a fundamental discrepancy between how the clusters function in practice versus their theoretical contributions to greater growth rates. The emergence of tech clusters has been celebrated by many leading economists because of a range of findings that innovative people become more productive (by various metrics) when they work in the same location as other talented people in the same field. In this telling, the essence of innovation can be boiled down to three things: co-location, co-location, co-location. No other urban form seems to facilitate innovation like a cluster of interconnected researchers and firms.
This line of reasoning yields a straightforward syllogism: technology clusters enhance individual innovation and productivity. The local nature of innovation notwithstanding, technologies developed within these clusters can be adopted and enjoyed globally. Thus, while not everyone can live in a tech cluster, individuals worldwide benefit from new advances and innovations generated there, and some of the outsized economic gains the clusters produce can then be redistributed to people outside of the clusters to smooth over any lingering inequalities. Therefore, any policy that weakens these tech clusters leads to a diminished rate of innovation and leaves humanity as a whole poorer.
Yet the fact that the emergence of the tech clusters has also coincided with Cowen’s Great Stagnation raises certain questions. Are there shortcomings in the empirical evidence on the effects of the tech clusters? Does technology really diffuse across the rest of the economy as many economists assume? Do the tech clusters inherently prioritize welfare-enhancing technologies? Is there some role for federal or state action to improve the situation? Clusters are not unique to the postwar period: Detroit famously achieved a large agglomeration economy based on automobiles in the early twentieth century, and several authors have drawn parallels between the ascents of Detroit and Silicon Valley. What makes today’s tech clusters distinct from past ones? The fact that the tech clusters have not yielded the same society-enhancing benefits that they once promised should invite further scrutiny…
How could this be? What can we do about it? Eminently worth reading in full: “Superstars or Black Holes: Are Tech Clusters Causing Stagnation?” (possible soft paywall), from @basquith827.
See also: Brad DeLong, on comments from Eric Schmidt: “That an externality market failure is partly counterbalanced and offset by a behavioral-irrationality-herd-mania cognitive failure is a fact about the world. But it does not mean that we should not be thinking and working very hard to build a better system—or that those who profit mightily from herd mania on the part of others should feel good about themselves.”
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As we contemplate co-location, we might recall that it was on this date in 1956 that a denizen of one of America’s leading tech/innovation hubs, Jay Forrester at MIT [see here and here], was awarded a patent for his coincident current magnetic core memory (Patent No. 2,736,880). Forrester’s invention, a “multicoordinate digital information storage device,” became the standard memory device for digital computers until supplanted by solid state (semiconductor) RAM in the mid-1970s.
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