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Comment by guestbest | Hacker News Reader

I think the difference from fax was that the machines sending electronically increased in scope and storage whereas fax didn’t advance much in the eyes of the user. No one could have predicted computers would be so small nor so light on power usage for their relative processing power. If we were still using c64’s the I could see a relative argument, but by 1998 we had vga/saga and cdroms in mainstream use

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I don’t understand this.

> No one could have predicted computers would be so small nor so light on power usage for their relative processing power.

He’s predicting the future but assured that technical progress won’t occur in an 8 year timeframe, after watching us go from mainframes to PCs over the previous 30 years.

This is a case of abject stupidity on the part of Krugman.

There’s a reason Krugman sells his advice to the NYT rather than trying to capitalize on it.

I’m not defending Krugman, but in my own defense, no one would have predicted flat screens computers and 4lbs laptops would be available to the general public much less for so cheap. If prices remained steady from 1998, were talking about a computer that costs roughly 2k and there is no online banking. Municipal taxes and courts are also mostly not online as well, but they tend to have fax numbers. Day to day budgeting and bill paying was not online except for larger businesses who also set up meetings and emailed spreadsheets to handle expenses

I’m not trying to be dense here, but exactly all of that was predicted. What about the environment in 1998 caused you to believe that we would stagnate?

Just 3 years later, online banking was ubiquitous in 2001 - such that I stood at a conference for retail banking and personally pitched dozens of banking executives on frameworks and white label software they could use to build their own. Meaning that it wasn’t just one-off banks who were doing it, and surely some were doing this in 1998 as well.

Cable modems were becoming common. ADSL was next best thing.

1998 was a year things really exploded. It was part of the tech bubble upswing. I’m confused what would cause someone to think that was the end of history.

I never said it was the end of history. I was just remarking on non portable, multi thousand dollar devices needed from the consumer side. But you are right, it was a bubble.

But was it really? The GDP of the internet and related industries was many times the size in 2005 as it was in 1998.

But why were the industries so much larger?

> This is a case of abject stupidity on the part of Krugman.

He mad a specific statement:

> By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's.

Which if you look at the numbers, isn't really wrong:

> As Skanda Amarnath, head of research at Employ America, wrote to me, what people see as a major economic impact is really the social impact. From a true data impact, Krugman wasn’t wrong. “Productivity growth has been substantially weaker during the age of the internet,” Amarnath wrote. “The same deceleration is visible in terms of both nominal and real investment in software and even the broadest definition of hardware (information processing equipment). There has been some shifting and cannibalization of activity as a result of retail moving to e-commerce channels, and new media dominating advertising services at the expense of old media, but if we’re talking about macro impact beyond substitution, the burden of proof is with those eager to mock Krugman on this point.”

* https://www.bloomberg.com/news/articles/2021-05-24/paul-krug...

* https://archive.ph/FD6GR

Where he did get it wrong:

> […] -becomes apparent: most people have nothing to say to each other!

As Krugman himself stated a few years ago:

> I must have tossed it off quickly (at the time I was mainly focused on the Asian financial crisis!), then later conflated it in my memory with the NYT piece. Anyway, I was clearly trying to be provocative, and got it wrong, which happens to all of us sometimes.

* https://www.snopes.com/fact-check/paul-krugman-internets-eff...

It's been over two decades since Krugman wrote that article: get over it.

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