Thinking about the new Kevin
Thinking about the new Kevin Kelly book (see the previous entry) and the new economy got me ruminating over my thinking on it evolved. One turning point in my very limited cogitations on economics was a New Yorker article I read a few years ago. Thank God for Google. It only took me a few moments to figure out that it was a John Cassidy article, “The Force of an Idea,” from the Jan 12 1998 issue. (Unfortunately, it’s not online, so no link.)
The New Yorker article was about economist Brian Arthur and his idea of increasing returns aka network externalities. Brief layman’s summary: If I use ACME Soap the returns on my use of ACME Soap don’t increase if everyone else uses ACME Soap also — the soap isn’t any more effective or any more valuable for me if 10,000 or 10,000,000 people use it. In an information economy, though, that’s not true. My return may increase if more people use the same information product. So if I use AcmeOS, the returns on my use of AcmeOS increase if everyone else uses AcmeOS also — the OS is much more valuable if 10,000,000 people use the same OS. Which explains a lot of how Microsoft become a monopoly.
(One other thing I picked up in my Googling: apparently Cassidy’s article was way off the mark & Brian Arthur was not the economics wunderkind he was made out to be. Still, the concept of increasing returns of a network economy is really interesting.)
Prior to googling around, I suspected the article might have been written by Malcolm Gladwell, who is a terrific staff writer at the New Yorker. His articles are archived on Gladwell’s web site, and most are worth a read. But the Gladwell piece I was the essay “Clicks and Morter” about why a turn of the century (19th century, that is) tool with the ultra-hip name of the King Road Drag is actually the piece of technology that enabled e-commerce. Fascinating read. Gladwell is also author of another great book The Tipping Point based on a New Yorker article of the same name.
It’s also cool that Gladwell has his entire oeuvre online.