Or, to give it a more un-pithy title, the importance of the technology that allows us to access information.
I’m reading Jacob Bronowski’s “The Ascent of Man”, and am thoroughly enjoying it so far (I’m about halfway through). Here’s an excerpt:
A large system of irrigation extending over an empire requires a strong central authority. It was so in Mesopotamia. It was so in Egypt. It was so in the empire of the Incas. And that means that this city and all the cities here rested on invisible base of communication by which authority was able to be present and audible everywhere, directing orders from the centre and information towards it. Three inventions sustained the network of authority, the roads, the bridges (in a wild country like this), and the messages. They came to the centre here when the Inca was here, and from him they went out of here. They are the three links by which every city is held to every other, and which we suddenly realise are different in this city.The Ascent of Man, by Jacob Bronowski, pp. 80, Ch. 3, BBC Books
This is true, of course, for all human agglomerations (except for that last bit re: “different in this city”). Bridges, in this context, are roads of a special type, and so really the point that is being made is this: flows of people and information matter for a human settlement to work.
The easier it is to make both of these flows happen as efficiently as possible, the more likely it is that humanity will flourish. You may want to be ever-so-slightly cynical given today’s times and ask if there is such a thing as too much information, but that’s a story for another day.
And that allows us to segue into a recent series of tweets I came across. First, Ethan Mollick:
Even more impressive is the abstract from the paper that Ethan speaks about in his tweet:
The printing press was the great innovation in early modern information technology, but economists have found no macroeconomic evidence of its impact. This article exploits city-level data. Between1500 and1600, European cities where printing presses were established in the 1400s grew 60% faster than otherwise similar cities. Cities that adopted printing in the 1400s had no prior advantage,http://www.ralfmeisenzahl.com/uploads/7/6/8/1/76818505/dittmar_printing_press.pdf
and the association between adoption and subsequent growth was not due to printers choosing auspicious locations. These findings are supported by regressions that exploit distance from Mainz, Germany—the birthplace of printing—as an instrument for adoption
I haven’t read the whole paper, I should mention, but will get to it soon. Equally impressive is a tweet in response to this, by Cesar Hidalgo (link to paper here), and this fascinating chart:
This chart makes use of the Pantheon 2.0 dataset, and tells us about biographies published in the periods shown in the four sections of this chart. There is a lot to take away from this analysis, and I imagine the presentation at an economics conference would have gone on for hours (how did you take into account changing technologies? How much of this was supply drive and how much by demand, and how did you model for it?… and on and on and on). But I hope you’ll agree – this is fantastic to look at and ponder over.
Bottomline: information flows matter for any grouping of humans. They could be in South America six hundred years ago, they could be in Europe at around the same time, or we could be talking about a firm or a political entity today. Information must flow, and as efficiently as possible. And when, for whatever reason, information doesn’t flow, trouble ensues.
And as students of economics, remember: one of the most efficient way to convey information in a society is a well-functioning price system!
3 thoughts on “The Importance of Information Technology”
One important concept that I realized a little late (but which is common knowledge among economists) is how many things in life are information. Money is information. Your bank balance is a piece of information on a bank server (and used to be information in a physical ledger earlier). My paying you is a message from me to my bank, then a message from my bank to your bank. Prices are information. And many of the problems in the world are because of lack of information (also known as “information asymmetry”).
And information technology is changing all of that.
My classes on information asymmetry include a section on why LinkedIn was worth 26 billion USD for just this reason, and I also say that mandatory attendance of at least 75% in colleges is counterproductive, because us profs don’t get information about just how bad we are.
Yup, lots of things in life are information, if only we learn how to look 🙂
Moonlighting, under the scanner…..https://chapter18.wordpress.com/2022/09/24/spotlight-on-moonlight/