Globalization (Brad DeLong):

THE HISTORICAL PERSPECTIVE:

Nick Craft on the enclosures movement:

1. A profound change in agricultural institutions

2. Therefore an enabler of the British Industrial Revolution

3. Stimulated the largest sustained increase in human wealth in history

4. Are short-term social dislocations an acceptable trade-off for long-term improvement in material living conditions?

Question: Is the Internet Revolution analogous to the Industrial Revolution? Back-of-the-envelope growth calculations suggest the relatively small size of the Industrial Revolution when compared to more recent changes in terms of scale, size, and total impact on national economic growth (0.06% versus 1.4% compound annual GDP growth). This leads to some interesting questions....

THE QUESTIONS:

If we accept this analogy, we should be curious as to:

1. What are the social and political ramnifications? Industrial revolution as a profound time of political mobilization and reorganization.

2. How long will it last? Conventional wisdom suggests another two decades of continued strong at the minimum. The culprits are Moore's Law, General Purpose Technologies, the emergence of new markets and continued productivity gains.

3. Internet Bubble and Overcapitalization? The Internet story is often told (today) as one about overcapitalization. This implies the existence of a single market and an anticipated, single growth trajectory. Historical analogies suggest this ignores the powerful influence new technologies play in opening unexpected markets however. Railroad development in the 19^th century (Stanford, Hopkings, et. aliae), bankruptcy laws and mutual rate cutting throw open new cross-national markets. Radio and Television development during the 20^th century and the unexpected growth of the mass consumer advertising market.

What is next? Does Eric Schmidt know?

Globalization (John Zysman):

Brad raises the important points: (1) how big an economic impact do recent changes in the socioeconomic organization of production have? (2) is it a Great Transformation, (3) is it sustainable, (4) what kinds of dislocations do we get?

Other issues include how the logic of how political struggles, compromises and bargains play out on a broader scale. For instance, are the “political shocks” of the current changes smaller simply because they seem to be playing out in a much more complex pluralism system rather than quasi-feudal one? If the Industrial Revolution led to political struggle organized around class-conflict (which could play out in unexpected ways, as in Bismark's attempt to preempt the rise of a German labour movement through his support for a nascent social welfare state), should the complexity of contemporary political conflict alter our expectations of how these politics will play out?

The railroad analogy is also particularly interesting. We can understand the railroads of the 19^th century as viscious cycles of price-competition encouraged by strict bankruptcy laws and mutual rate cutting strategies. Applying this same logic to the extension of broadband, we should worry about (1) how the current bankruptcies of telecommunications firms will play out (how will these assets reemerge in the markets?) (2) what kinds of transformations will be needed to “soak up” all the bandwidth.

Finally, is there a logic to the language of political competition in these spaces? What are the emerging political alliances and battlespaces, and what kinds of arguments do we get involving them (1^st Amendment, moral rights, etc).