

Why Peter Theil is Half-Wrong - nicoslepicos
http://nicolaerusan.tumblr.com/post/23778081914/why-peter-theil-is-half-wrong

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warmfuzzykitten
It would be more interesting to read why Peter Theil is All Wrong. He had
absolutely no data to back his assertion that, except for computing,
technological progress has stalled. He referred to data in his National Review
piece, "The End of the Future", but, gosh, he didn't have any and didn't have
any idea how to get it. So he decided to use economic growth as a surrogate
for technological progress, based on the theory that progress implies growth.

There is no proof that progress in technology inevitably results in economic
growth. That's a belief system arising from the post-war glory years that were
the last half of the 20th century, when advertising campaigns by the likes of
GE and Dow Chemical tried to convince us that our well-being was due to their
efforts. "Better living through chemistry." "Progress is our most important
product."

It might as easily be that economic growth results in technological progress.
The more profitable companies are more they have to spend on research that
isn't aimed at next year's bottom line. It might even be that both growth and
progress are caused by wars, and the problem is we haven't had a big one
lately.

In order to buy Theil's inverted implication, we first have to buy the
premise. Progress implies growth. Where's the evidence for that? What we saw
was a correlation, not a causal relationship.

Even if it were true, progress in one place, say China, doesn't necessarily
mean growth in another, say the US. There is a reason why virtually all
consumer electronic products are made in China, and it isn't cheap labor, but
superior technology. It's not that we don't want to make the stuff here. We no
longer can.

Likewise, progress in robotics does not imply economic growth in places where
robots displace workers, especially if those places don't make the robots (and
probably even if they do). Western economies are built on consumerism. To the
extent that technologies reinforce consumerism, by giving us jobs making
things to buy, they grow the economy. When technology moves to another place
or "increases productivity" by building the same amount with fewer workers, we
lose our jobs and can't buy anything.

Rather than thumping technological progress - there's been plenty of it -
Theil might have taken a peek at the balance of trade.

