The prospect of technological leverage will of course raise the specter of unemployment. I'm surprised people still worry about this. After centuries of supposedly job-killing innovations, the number of jobs is within ten percent of the number of people who want them. This can't be a coincidence. There must be some kind of balancing mechanism.
When one looks over these trends, is there any overall theme? There does seem to be: that in the coming century, good ideas will count for more. That 26 year olds with good ideas will increasingly have an edge over 50 year olds with powerful connections. That doing good work will matter more than dressing up-- or advertising, which is the same thing for companies. That people will be rewarded a bit more in proportion to the value of what they create.
If so, this is good news indeed. Good ideas always tend to win eventually. The problem is, it can take a very long time. It took decades for relativity to be accepted, and the greater part of a century to establish that central planning didn't work. So even a small increase in the rate at which good ideas win would be a momentous change-- big enough, probably, to justify a name like the "new economy."
[1] Actually it's hard to say now. As Jeremy Seigel points out, if the value of a stock is its future earnings, you can't tell if it was overvalued till you see what the earnings turn out to be. While certain famous Internet stocks were almost certainly overvalued in 1999, it is still hard to say for sure whether, e.g., the Nasdaq index was.
Seigel, Jeremy J. "What Is an Asset Price Bubble? An Operational Definition." European Financial Management, 9:1, 2003.
[2] The number of users comes from a 6/03 Nielsen study quoted on Google's site. (You'd think they'd have something more recent.) The revenue estimate is based on revenues of $1.35 billion for the first half of 2004, as reported in their IPO filing.
Thanks to Chris Anderson, Trevor Blackwell, Sarah Harlin, Jessica Livingston, and Robert Morris for reading drafts of this.
Bradley's Ghost
A lot of people are writing now about why Kerry lost. Here I want to examine a more specific question: why were the exit polls so wrong?
In Ohio, which Kerry ultimately lost 49-51, exit polls gave him a 52-48 victory. And this wasn't just random error. In every swing state they overestimated the Kerry vote. In Florida, which Bush ultimately won 52-47, exit polls predicted a dead heat.
(These are not early numbers. They're from about midnight eastern time, long after polls closed in Ohio and Florida. And yet by the next afternoon the exit poll numbers online corresponded to the returns. The only way I can imagine this happening is if those in charge of the exit polls cooked the books after seeing the actual returns. But that's another issue.)
What happened? The source of the problem may be a variant of the Bradley Effect. This term was invented after Tom Bradley, the black mayor of Los Angeles, lost an election for governor of California despite a comfortable lead in the polls. Apparently voters were afraid to say they planned to vote against him, lest their motives be (perhaps correctly) suspected.
It seems likely that something similar happened in exit polls this year. In theory, exit polls ought to be very accurate. You're not asking people what they would do. You're asking what they just did.
How can you get errors asking that? Because some people don't respond. To get a truly random sample, pollsters ask, say, every 20th person leaving the polling place who they voted for. But not everyone wants to answer. And the pollsters can't simply ignore those who won't, or their sample isn't random anymore. So what they do, apparently, is note down the age and race and sex of the person, and guess from that who they voted for.
This works so long as there is no correlation between who people vote for and whether they're willing to talk about it. But this year there may have been. It may be that a significant number of those who voted for Bush didn't want to say so.
Why not? Because people in the US are more conservative than they're willing to admit. The values of the elite in this country, at least at the moment, are NPR values. The average person, as I think both Republicans and Democrats would agree, is more socially conservative. But while some openly flaunt the fact that they don't share the opinions of the elite, others feel a little nervous about it, as if they had bad table manners.
For example, according to current NPR values, you can't say anything that might be perceived as disparaging towards homosexuals. To do so is "homophobic." And yet a large number of Americans are deeply religious, and the Bible is quite explicit on the subject of homosexuality. What are they to do? I think what many do is keep their opinions, but keep them to themselves.
They know what they believe, but they also know what they're supposed to believe. And so when a stranger (for example, a pollster) asks them their opinion about something like gay marriage, they will not always say what they really think.
When the values of the elite are liberal, polls will tend to underestimate the conservativeness of ordinary voters. This seems to me the leading theory to explain why the exit polls were so far off this year. NPR values said one ought to vote for Kerry. So all the people who voted for Kerry felt virtuous for doing so, and were eager to tell pollsters they had. No one who voted for Kerry did it as an act of quiet defiance.
Made in USA
(This is a new essay for the Japanese edition of Hackers & Painters. It tries to explain why Americans make some things well and others badly.)
A few years ago an Italian friend of mine travelled by train from Boston to Providence. She had only been in America for a couple weeks and hadn't seen much of the country yet. She arrived looking astonished. "It's so ugly!"
People from other rich countries can scarcely imagine the squalor of the man-made bits of America. In travel books they show you mostly natural environments: the Grand Canyon, whitewater rafting, horses in a field. If you see pictures with man-made things in them, it will be either a view of the New York skyline shot from a discreet distance, or a carefully cropped image of a seacoast town in Maine.
How can it be, visitors must wonder. How can the richest country in the world look like this?
Oddly enough, it may not be a coincidence. Americans are good at some things and bad at others. We're good at making movies and software, and bad at making cars and cities. And I think we may be good at what we're good at for the same reason we're bad at what we're bad at. We're impatient. In America, if you want to do something, you don't worry that it might come out badly, or upset delicate social balances, or that people might think you're getting above yourself. If you want to do something, as Nike says, just do it.
This works well in some fields and badly in others. I suspect it works in movies and software because they're both messy processes. "Systematic" is the last word I'd use to describe the way good programmers write software. Code is not something they assemble painstakingly after careful planning, like the pyramids. It's something they plunge into, working fast and constantly changing their minds, like a charcoal sketch.