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PEDDLING_PROPERITY
February 5, 2010
Paul Krugman, in
"Peddling Prosperity" (1994)
He titled Chapter 9 "The Economics of QWERTY".
Here, he discusses the work of Paul David and
Brian Arthur from 1982, using the supposed
industry lock-in on the Qwerty keyboards as
an example of "path dependence".
These days, the supposed efficiency of the
Dvorak keyboard over the Qwerty is regarded
as something of a myth (or at least, as Hm... actually, I *was*
something that's not that well established... convinced it was myth.
apparently the studies showing the advantages Now that Posner is
were not exactly *independant* studies). telling me it's a myth,
I feel the need to
"What Paul David, Brian Arthur, double-check that.
and a growing number of other
economists began to recognize in I wasn't aware that
the late seventies and early there were ideological
eighties was that stories like that axes grinding on the
of the typewriter keyboard are, edges of this subject.
in fact, pervasive in the economy.
Some of these stories involve KEY_ISSUE
technology choices that bear an obvious
resemblence to the QWERTY tale."
Krugman goes on to cite VHS (yawn),
software choices, etc.
The point to take away here, is that
Paul Krugman does not place "enormous
weight" on the QWERTY example, he's
just using it as a colorful,
convienient name for the phenomena, We tend to talk about the
which right or wrong happened to "first mover advantage" in
be standard in the field. the software business. This
is hardly controversial.
There are reasons *some* people might The whole idea
be inclined to take exception to discussion... that "history
matters" is
"What conservatives believe in, above all, stunningly obvious
is the effectiveness of free markets as ways to anyone who
to organize economic activity. Leave people isn't a market
free to make their own, individual choices, fundamentalist:
say conservatives, and they will be far more
productive and efficient than if you try to No, Virginia,
plan or direct their activities. ... efficiency does
But what if the collective result of those not always win
free choices is to lock in a bad result? out.
... the story of the QWERTY keyboard is not
just a cute piece of trivia ... it is a The invisible
parable that opens our eyes to a whole hand is not
different way of thinking about an omnipotent
economics ... that rejects the idea that hand.
markets invariably lead the economy to a
unique best solution; instead, it asserts
that the outcome of market competition often
depends crucially on historical accident."
"Silicon Valley is where it is
because of the vision of Frederick
Terman, vice-president of Stanford,
in supporting a few high-tech
entrepreneurs in the 1940s, forming At a guess, you can go still
the seed around which the famous farther than that... my
high-tech concentration crystalized." impression is other things
were involved, like the
importance of radar in World
War II. Without that,
Stanford might not have
mattered so much.
Posner's grand accusation on this point,
even if it's correct, is that Krugman
missed a *single* paper published in
1990 (a few years before Krugman could
have been working on this book, which
came out in 1994):
S.J. Liebowitz and Steven E. Margolis,
"The Fable of the Keys," Note that
33 Journal of Law and Economics 1 (1990) "Law and Economics"
[ref] is Posner's beat,
not Krugman's.
Why would Krugman
KEY_ISSUE follow this
particular journal?
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