In Which Paul Krugman Is 5583 Miles Away, Eating a Moveable Feast: Geographic, Architectural, and Intellectual…
Paul Krugman: How Are These Times Different?:
Ah, Paris! You walk for miles and miles — it’s still, after all these years, a spectacularly beautiful city. Then you have as traditional a meal as possible at an old-fashioned bistro, washed down with lots of wine. And you feel like hell the next morning….
[W]hen it comes to macro issues I am pretty much a curmudgeon, someone who thinks that the similarities between our time and the 90s in Japan or the 30s everywhere are a lot more important than the differences…
Yes, definitely. That is the principal lesson right now!
But our Uncle Paul is curious and thoughtful, and also wants to think not just about us but about the long run: about economic possibilities for our great-great-grandchildren:
But obviously things do change over the decades. And this morning I find myself wondering, how are these times different?… [T]here is at least one important respect in which the 21st-century economy is different… the much larger role of rents on intangible assets. This isn’t an original insight, but I haven’t been finding systematic analyses…. Consider the changing identity of the most valuable company in America. For a long time, it was GM, then Exxon, then IBM… companies with huge visible production activities…. IBM was an information technology company, but it still had many of the attributes of an old-style manufacturing giant, with many factories and a large, well-paid work force. But now it’s Apple, which has hardly any employees and does hardly any manufacturing….
[P]rofits are no longer anything remotely resembling a “natural” aspect of the economy; they’re very much an artifact of antitrust policy or the lack thereof, intellectual property policy, etc. Another is that a lot of what we consider output is “produced” at low or zero marginal cost…. How does this change things for economic policy?
I’m thinking, I’m thinking.
First, more coffee.
