China's lack of innovativeness

China's success is remarkable and where it has genuinely been innovative, those successes need to be celebrated and have been across the web.

However, where the change is less than good then that needs to be pointed out as well. The planet simply has too few resoucres to waste where that be in Canada with the consumer or highway culture or in China with empty real estate.

http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities

The technology of economics

In my recent previous posts I have begun to work through the idea that economics as we currently have it is a technology. Curiously, I had to laugh when a recent TED talk featured Niall Ferguson talking about "The 6 killer apps of prosperity". The means of communicating the idea of the institutions critical to a modern economy was to call then apps - ie a technology. It is worth watching.
http://www.ted.com/talks/niall_ferguson_the_6_killer_apps_of_prosperity.html


But the one for me that is real eye opener was this TED talk on algorithms. This is absolutely worth watching.

There is no economy just technology II

Yesterday, I wrote that there is no economy just technology. Now this is obviously an exaggeration but I think I have hit on a point worth making.

From early in our lives we hear people talking about 'the economy'. We can start studying economics at high school and at university we can choose between an economics faculty, political economy or business - but there is no faculty for the study of technology.

It is natural for us to think in that the domain structure of social life is the economy and technology is a piece of machinery within that. However, let us revisit that assumption. The classical economists did not not even include technology. Their production function was land, labour and capital. More recently we have added technology but this is not technically true.

The expression should be: Labour (expressed through a particular techno system) * Land (the environment utilised for and with a particular techno system) * Capital (this itself is a techno system of its own). Now economic rules still have a role in our lives. Some industries grow and some decline etc.

But which comes first the 'economy' of a particular industry or is it the technological system.

Take an example - we now have an 'oil economy' but 150 years ago we didn't. We had a need for transport - humans have always looked for ways of moving more easily. Then multiple technologies came together: the ability to process oil, the internal combustion engine, the construction of a frame around the internal engine and the new forms of organisation that enabled the capturing of enough capital to mine the oil, transform the oil, ship the oil, build the vehicles, build the roads, build millions of oil distribution centres.

There is structure and an element of self organisation but it is all technology. And it doesn't matter whether you want to discuss the modern 'economy' or the salt based economies of ancient civilisations.

Keith Smith in his paper on knowledge based economies makes the following point:

Paleolithic and Neolithic was by any standards knowledge-based, and paleoanthropologists have demonstrated the existence of apparently well-formed bodies of knowledge with respect to animal behaviour, pyrotechnology, material, mining, symbolic communication, the aerodynamic properties of weapons, cosmology and even medicine in these societies. 

In which case what comes first the ability to modify our environment or the economy around those modifications.

Maybe it is time to get serious about the study of technology and stop seeing it as engineering or science or economics or business. It is the defining feature of human society. As humans we create technologies and those technologies shape us.

There is no economy just technology

I have finally got around to beginning to read Brian Arthur's "The Nature of Technology". This has been on my to do list for awhile but I am finally getting there and I have to say it looks quite promising at this stage. I like the style and the layout of the ideas.

But there was a sentence on page 1 - in the preface that really got me thinking. I have been pondering the nature of technology for awhile now myself. It is a fun topic and one that I need to work on for a particular project but I can't say it has been terribly fruitful so far. anyway this sentence got me thinking...

Anyay here is the first sentence....
"It was clear to me that the economy was in no small part generated from its technologies"

Well that wasn't a big insight - anybody who studies the economics of technology can figure that one out. It is the essence of the neo-Schumpeterian school which Keith Pavitt and Chris Freeman started in the early 1970s at SPRU. But it is the next sentence that really caught my eye...

"After all, in a sense an economy was nothing more than the clever organization of technologies to provide what we need". 

Now this caught my eye. It got me thinking if this were true then we sould actually invert the concepts.

In classical economics, an economy consisted of only land, labour and capital as technology was exogenous. Later work by Brian Arthur himself with others has help to make technology endogenous to the economy. But given the sentence above actually the economy is actually only a subsystem of technology.

It is possible to argue there are three integrated systems on earth. There is the environment which could tick along without us. There is us - humans - what is very recently been called the Anthropocene and then there is our technology.

Land (as opposed to the environment) and labour or human capital (as opposed to society/humanity) only exist in relation to particular technologies. Capital is actually a form of technology in itself.
And the economy - well it changes and morfs with technology.

So logically there is no economy - there is technological development and within that land, labour, capital, and the human organsation of those activities - which we call the economy). Well ok to say there is no economy is pushing it - but the economy becomes a subset of technology not the other way around.

The point is technology can not be reduced to mere hard objects and tools. As Lipsey reveals that quickly runs into problems so he includes organisational systems and  process technologies.

So just to make the point...

Land - rare earth minerals are dirt with a use (a thing they can be used in), a way of processing them and a way of transporting them.

Okay so you might argue that that is a modern example. Here is one from the first nations people of British Columbia who used to trade along the east coast of North America. They could use cedar trees (requiring a device to carve the timber), to form boxes by bending a single piece of timber. Pretty smart technology. They would trade their wares travelling by canoe at least the entire cast of what is now Bitish Columbia.

Labour - clearly labour only has meaning in relation to set of interdependent technology systems that it is performed within.

So perhaps instead of using the word economy to discuss the dynamics of a particular period of history including our own we should start using a word like hmmm techno....