As an enthusiastic photog who grew up exactly on the film/digital divide, I can tell you exactly where all of that value that was "destroyed" at Kodak went. Straight to me. When I had my own darkroom and I saved the money I made cutting lawns for film and chemicals, I knew exactly, viscerally, how much it cost me to press that shutter release. Flubbing a shot made me feel physically ill.
When I pull 300 high quality pictures off my freaking phone and casually discard 275 of them that I'm not happy with, I still feel as rich as a sultan.
Well... the guy should read Schumpeter. Every "industrial" revolution wipes off industries. In the same time, a whole new industry appears, a whole new class of jobs and a whole new lifestyle and culture. The middle class is not destroyed at all. On a world scale, it is rising. Rising in China and South East Asia.
We can't reduce a world wide phenomenon without taking into account hundreds of other factors ( populations in western countries growing old, the globalization, sacrificed generations in Europe and exodus of its skilled youth ) to Kodak vs Instagram.
Capitalism, Socialism, and Democracy reads like a play by play of what is happening. Read it, then look at what people like Graham, Thiel, and Andreesen say.
Keep in mind, Schumpeter was not a libertarian in the vein of the Austrian school of Mises, Hayek or Rothbard, which seems to underpin modern libertarian thought such as Thiel's.
He was more properly a conservative or classical liberal in the tradition of J.S. Mill: supportive of business and the free market, but supportive of "intelligent monopolies" themselves at times, like the early Bell Telephone system... He also met his intellectual opponents (eg. Marxists) with respect (a rare thing these days), and didn't place market economics at the centre of all human activity as is common with libertarian thought which reduces all acts to market transaction.
The English translations have been around a long time and are fine.
His most known and discussed work is "Capitalism, Socialism and Democracy".
IMO the core of his relevance to Startups and economic growth is his early book "The Theory of Economic Development", which he wrote in his mid-20's at the turn of the century... but wasn't translated until 1934.
Whenever I see the name Jaron Lanier I get an image of a being not unlike the Caterpillar from Alice in Wonderland: happily smoking his bong, taking great pride in being difficult and obstreperous and in saying things that sound profound, but don't really mean anything.
To be fair to him, I believe he's quite an able programmer. His team won a facial recognition competition some years back. Their algorithm was (ironically considering his mysterianism) heavily inspired by the human brain.
Normally, I'm fairly (unconsciously) biased against such 'longhairs,' but in the case of Lanier, my impression is that he is, in fact, extremely intelligent.
I'd highly encourage you to read this (very long) interview with him from 2011 in Edge:
I'm not doubting his intelligence. But I think he is not the first intelligent person to engage in a sort of long-form trolling of his profession (consider what Derrida did to philosophy). His intelligence serves to make the trolling more subtle and difficult to catch. He makes pronouncements like "The fundamental problem with software is that it is still based on the outdated notion of a signal travelling down a wire", and then proceeds to draw comparisons with evolution, where small changes in DNA only make small changes to an organism, whereas in software flipping a single bit might cause a crash.
Except no, it doesn't work like that. Small changes in DNA can cause disastrous effects in evolution; we only got here because of the small changes that didn't. Each of us has billions of unsung relatives that died in the womb/egg or just outside it, as evolution tried to figure out a way to make us.
And then he proceeds to make up a word -- "phenotropics" -- and state that this is a better way to do software. Of course he doesn't get into what phenotropics actually means specifically because it doesn't mean anything specific. The point is that we in software should stop whatever we're doing and invent it. Because Jaron Lanier said so. It's a half-finished idea, like Louis Savain's Project COSA.
And there's just something subtly wrong like this about a lot of what he says. Even if you can't put your finger on it right away -- you feel it. A collection of Jaron Lanier essays might make a good middle chapter for "The Book" (from Anathem).
Even more on point, the smartphone makers are the ones that have really taken over Kodak's former space (i.e, basic snapshots). Canon sells high-end equipment - they were never really in direct competition with Kodak.
To name just one, Apple employs almost 400,000 workers directly, plus god knows how many contract factory workers.
> "... Kodak's former space (i.e, basic snapshots)."
From a case study at uni I learned that Kodak was never in the 'basic snapshots' business. Kodak was in the 'making memories' business and they marketed to mothers as the chroniclers of the 'family history' (those who would carefully curate and treasure family photo albums).
It was the advent of the casual snapshots that marked the beginning of the demise for Kodak since that was a completely different demographic with different drivers. Kodak failed to see the underlying shift and then couldn't adapt fast enough.
Wasn't it Kodak's focus to sell film? And, by extension, enabling its customers to share their pictures? In a sense Instagram would be a modern day analogue of such a company -- just that it doesn't need a hardware division anymore.
But I still see your point. It isn't the best comparison, and using it as a quotation does not bode well for his book, IMO.
Eh... I'd break it down more finely. Kodak produced the image storage mechanism, not the sharing mechanism. The sharing analogue to Instagram would be something like a post card, or a group of sharers using the postal service.
The analogue to film would be the hard drive or memory device in the camera on which digital images are stored. So whoever makes those is the new Kodak.
They'd still be selling them if Kodak management hadn't thrown away the chance to move to digital. Kodak research was THE pioneer in digital photography. It got killed because it posed a threat to the film, paper, and chemistry divisions.
Film, paper, and chemistry, yes. The "Kodak" model probably still taught in Marketing 101 is "Give away the camera and sell the film" (sometimes also known as the "Gillette" model, give away the razor and sell the blades).
It all fell apart when nobody needed film and everyone (for the most part) stopped printing pictures.
I don't really see instagram as a factor one way or the other. Kodak was dead anyway, at least the "film, paper and chemistry" part.
This is a commonly told version of the tale, but I don't think it's accurate. Kodak didn't get blindsided by the advent of digital, in fact they were the first ones there (literally the first commercial DSLR was a Kodak).
Their main problem appeared to be both technological and competitive. In the very early stages of digital SLRs Kodak provided sensors to all of the big players, establishing themselves as the go-to OEM for sensor tech.
And then Canon decided to not put the most important component of their camera in someone else's hands, and folded sensor tech into their own company as a core component. This was also the age where Canon was eating Nikon for lunch through superior design and marketing, so Kodak lost not only a large customer, but their remaining ones were being pummeled in the market.
Nikon followed soon afterward, though in the long run they were unable to sustain their own semiconductor R&D and now run primarily Sony sensors.
Kodak went from the go-to OEM for sensor technology to nibbling at the extremely niche sector of scientific equipment photo sensors and rich-surgeon-toy cameras like the Leica M9. It's a sad tale really, and while I'm sure Kodak had many opportunities to avoid their demise, the whole story isn't quite a textbook tale of ridiculously bad management.
Nowadays there are few companies actually building digital sensors. Canon is the big one, Sony is the next big one (which also power Panasonic, Olympus, Nikon, Pentax, and Sony's own cameras). Samsung is the straggler - their OEM business has gone kaput in recent years, but they are still building sensors for their own cameras (which are largely failing in the market). Fuji is the standout in the pack, still making their own sensors despite being comparatively a tiny fish in the pond.
Have you read The Innovator's Dilemma and its followup The Innovator's Solution?
I'm pretty sure that Kodak was one of the cases discussed. If not, it deserved to be because it was a classic example of the perverse incentives that destroy incumbents.
Kodak realized the future. Kodak invented it. But their film business dominated from a revenue perspective. At every point where they had to make a resource allocation decision, the fact that film was the cash cow gave people from that division weight, and nobody in other departments really wanted to kill that sacred cow.
When Canon decided to not depend on Kodak, they were not just doing that because they wanted to be independent, but also because they recognized that Kodak's priorities didn't match theirs. I wouldn't be surprised if the design advantages that Canon had were not there in part because they didn't have any internal politics around protecting a legacy cash cow.
Kodak made the first digital camera in 1975. It's pretty amazing to compare it to current cameras, since it's about the size of a bowling ball and took 23 seconds to record a 0.01 megapixel picture onto a cassette tape. http://www.retrothing.com/2008/05/kodaks-first-di.html
> If you look at something like Facebook, Facebook is adding the tiniest little rind of value over the basic structure that’s there anyway. In fact, it’s even worse than that. The original designs for networking, going back to Ted Nelson, kept track of everything everybody was pointing at so that you would know who was pointing at your website. In a way Facebook is just recovering information that was deliberately lost because of the fetish for being anonymous. That’s also true of Google.
Wow, this is so wrong I am annoyed by it. The Internet is not "anonymous" (it really isn't, for the most part) because someone designed it that way. You can read the design rules set out by DARPA and see that they were concerned about infrastructure above all else [1]. The fundamental goal was the multiplexing of many different networks. The top three secondary goals were:
1. Network resilience
2. Multiple communication types
3. Support for different network types
Anonymity was not part of the design of the Internet--period.
I think a better example would be the travel industry... the corner travel business has virtually been obliterated in part of the easy access to on-line travel booking and planning services. A lot of "middle-person" jobs are now unnecessary as most of their functions are now accomplished with scripts and servers, this goes with booksellers and other specialty shops.
Just look at any business that isn't direct from the company and does not really require direct contact with the customer ; those are the ones to worry about.
And sometimes we push it along, I've seen companies work hard to cut the bottom line by automating things, developing on-line materials, and reducing the accessibility from the public, part to cut costs, other to "be more efficient." Those are the ones what one day have worked themselves into obscurity, because what's the different if local person A helps you over the phone or corporate/outsourced person B?
So what do we get left with - outside (cheapest) labor and local direct services (construction, health, entertainment/dining), and creative.
If you think about it its the creative developments over the past couple hundred years that made many of us redundant. We either should look for new opportunities to grow (space colonization/exploration) or break down the mass production industry to make more communities sustainable.
What's really interesting about all of this is the deflation that results from all this automation. Cellphones and video games are well known examples but it's easy to forget that plenty of free flash games are as good or better than all Atari games and most first gen Nintendo games. Fanfiction + ranking means the classic pulp novel is somewhat obsolete. Now fanfiction and flash games are not actually free but a few banner adds are enough to keep things going.
The downside seems to be the loss of durable goods, but other than my car they represent a tiny fraction of my budget and cars are much better now than a even just 20 years ago.
In the US housing, healthcare, and education seem to be what's killing the middle class without those areas we would just say we are in The middle of a huge deflationary period. And printing money can fix deflation.
I am surprised by the quality of some fanfiction. I've read Sherlock Holmes pastiches that I doubt I could have distinguished from Doyle's work if I were blinded.
"And there is truly nothing wrong with that! I am not saying, “The internet is turning us all into children, isn‟t that awful;” quite the contrary. Cultural neoteny can be wonderful. But it‟s important to understand the dark side." This is from a book from Jaron Lanier called "You are not a gadget".
I think Jaron Lanier is just lost like any of us trying to explain the current present and especially the use of cybernetics in our life. We know that a lot of people were afraid of technology and the changes introduced in our societies (including myself). If you ever read Jacques Ellul, Ivan Illich or even Theodore Kaczynski, you'll see the issues of changing our human societies with the technologies (especially the ones that we cannot control) can be really scary.
It's really difficult to evaluate the positive or negative impact of technologies when you are directly living the change. In the previous book of Jaron Lanier, I think Jaron was still trying to find the balance between the positive and negative side of technologies. Nowadays, he is more into the "sole" negative side...
To go back to the example of Kodak, I'm not sure that's the right example. Especially that Kodak completely overlooked the aspect of film processing for the online market where Fujifilm was ahead with their "minilabs"... even it was a difficult step for Fujifilm, they moved into something profitable on the long-run.
Interesting article but my impression is that you try to compare apples and melons and you want to get some results on oranges, they kinda look alike but they are not the same.
This article is written as some kind of drunken rant, desperately holding on to overly formed opinions and 2 validating points of data.
That's not to say that the author doesn't have a point, it's almost certainly true, but Salon should have really had an editor look over this. For crying out loud, he shifts between 14k and 140k employees for Kodak in the article.
How will readers who do not already agree w/ him become convinced?
> How will readers who do not already agree w/ him become convinced?
Because it's getting blatantly obvious for those who are not lucky enough to be part of us, technologist beneficiaries (so over-represented on this site)?
When Ford made the model T should we have cared about the catastrophic loss of employment facing blacksmiths, horse-breeders, stablehands, and carriage-makers?
It's true that digital communication has obliterated industries. And that's awesome, because those industries were inefficient, smelly, and slowed us down. Compared to the incredible value we each get by being able to speak to anyone else, anywhere in the world, any time we like - not to mention, the millions of jobs bourne out of the internet - the loss of jobs in these obsolete industries is nothing.
A) It proposes a solution that is already happening on its own. (micropayments for work that enriches the network.)
B) It compares apples to oranges. Instagram is not the Kodak of the Internet.
C) It misidentifies the cause-effect relationship of phenomenon that happened well before the Internet boom. The reason inequality is so high has very much to do with the winner-take-all society that was in place well before the Internet came to prominence. Libertarian fiscal policy and lax government regulation is mostly to blame.
> Libertarian fiscal policy and lax government regulation is mostly to blame.
Not only is this claim entirely unsubstantiated, it's wrong in quite a few ways.
1) In the U.S. we have not had libertarian fiscal policy in the slightest.
2) We have plenty of regulations in most areas.
3) Even if we did lack regulations or have libertarian policy, this couldn't explain the shift that has happened.
A much more compelling and less baseless argument would be one presented by one of my Econ professors Enrico Moretti in his book The New Geography of Jobs. His argument essentially is that the way in which the U.S. economy has shifted away from manufacturing and toward technological innovation has resulted in a declining middle class and an increase in inequality. As globalization has set in, manufacturing has left the U.S. and with it traditional middle class jobs. On the other hand, technology has been booming, creating cities with a huge amount of wealth. So now we're left with poor, has-been cities like Detroit on one hand, and cities like SF on the other.
I suppose you could argue that not imposing huge tariffs and not being incredibly protectionist in order to protect manufacturing jobs is "libertarian". But these sorts of "lax" policies also have support from most economists, and for good reason. So I don't really know what you're arguing for.
If you don't like the Kodak example use a little imagination and you will find a million others.
Take a look at state government employees most of whom are middle class. A major portion of this labor force is involved in managing data. Rough guess ~30000 * 50 states=1500000. Pretty sure its a much bigger number.
Facebook can manage the data of a billion people with 5000 employees.
I agree that there is very much a paradigm shift and that it is very painful for a lot of those whose jobs were contingent on an older, more analog economy. The entire old economy of clerical work, creating, organizing and transmitting documents, scheduling, and manufacturing is being automated. I can't really say this is morally right so much as it is inevitable, and couldn't have been avoided. But it can be mitigated by encouraging equality-promoting fiscal policy and regulation to make sure that even if our economy is less equitable, it isn't unstable, and can't wipe out portions of the middle class's wealth because of the actions of a few.
Bad examples. The worst examples are yet to come. Health!
We talk about health technology to save 100 billions of dollars or more in cost savings, EHR saving so much cost, etc. But what they don't talk about is these costs are coming at the expense of replacing human work. This is why I think we'll see continual increase of unemployment and underemployment. We moved to the service-based industry where machines can do many of the work.
I don't know about that. My model of Taleb has him pointing out the many dangers of entrepreneurship, and the myriad biases which lead people to underestimate the risks of starting a business--survivorship bias et all.
Actually, I'm kind of wrong -- but kind of right. Pg. 80 says "You are the source of our anti-fragility" in regards to entrepreneurs. Basically it's lots of small fragililities which tend to create anti-fragility - hundreds of entrepreneurs trying to create businesses and failing over and over again, causes economic growth.
If you are able to live cheaply, and learn a lot doing something risky, you are being anti-fragile.
Having watched the first few minutes of the above, I think he means his "antifragility" to be an attribute of economic and political systems, not of individual jobs or even whole occupations. E.g., he says that, in order for the restaurant business to be at least robust and maybe even antifragile, individual restaurants must be allowed to be fragile. It gets more interesting when he turns to the banking business ...
Looking at the comments posted here, I'm getting the sense that I'm not alone in thinking that Jaron Lanier is a huge hack. In fact it looks as if I may be in the majority. Why is it, then, that he has this reputation as being a great luminary?
When I pull 300 high quality pictures off my freaking phone and casually discard 275 of them that I'm not happy with, I still feel as rich as a sultan.