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Does technology drive economic growth?

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Sniglet posted on Tue, Feb 3 2009 1:36 PM

There seems to be a pervasive belief that technological advances are the key to economic growth. Moreover, many people even believe that the creation of some new wondrous technology might be all that is needed to "save" the economy from the current downturn, and set the world back on a path of perpetual growth.

On the face of it, I find it hard to think this blind faith in the ability of technology to drive economic growth is well placed. There have been massive technological leaps in the past (e.g. railroads, telegraph, telephone, automobiles), yet they didn't stop the business cycle or prevent depressions, so why should some new-fangled internet, or computer, technologies prove to be a wonder cure for all that ails the economy?

Does anyone know of any thinking that has been done on this subject?

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nirgrahamUK:

all capital is technology.

Not all technology is capital.

 

discuss.

That's sort of exactly my point.

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GilesStratton:

Spideynw:
But, Robinson Crusoe figured out how to use the stick to gather more berries because he had enough money to have the leisure time to figure it out.

Yes, he put his technological ideas to use. So what?

Spideynw:
Technological advancements require funding.  The more funding you have, the more technological advancements you have.  It is a chicken/egg thing.

It's not a chicken/ egg thing. Without the necessary capital, technology is useless.

Spideynw:
Are you saying poor countries can advance technologically just as fast as wealthy countries?
s.

No, but this proves my point, not your

Spideynw:
If so, reality refutes it.

Now, now, what did Ludwig von Mises, amongst others, teach us about "reality" "refuting" things?

What don't you understand about the fact that "the necessary capital" may very well be technology? That this goes in both directions is so obvious. Even if you're using the term "capital" to refer to investment and whatnot, that cannot be done without prior technology. On the other hand, the technology cannot be aquired without prior investment. It works both ways. The machinery of a factory, for example, is both a capital good and technology.

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Brainpolice:

GilesStratton:

I'm referring to technological ideas. Which are not capital.

And I'm refering to technological devices, which are often (although not always) capital.

In which case any device is technological, so your use of the term is not needed. The technological in "technological devices" is redundant.

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

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Wow, your desire to continually play semantics is astounding.

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Brainpolice:

GilesStratton:

Spideynw:
But, Robinson Crusoe figured out how to use the stick to gather more berries because he had enough money to have the leisure time to figure it out.

Yes, he put his technological ideas to use. So what?

Spideynw:
Technological advancements require funding.  The more funding you have, the more technological advancements you have.  It is a chicken/egg thing.

It's not a chicken/ egg thing. Without the necessary capital, technology is useless.

Spideynw:
Are you saying poor countries can advance technologically just as fast as wealthy countries?
s.

No, but this proves my point, not your

Spideynw:
If so, reality refutes it.

Now, now, what did Ludwig von Mises, amongst others, teach us about "reality" "refuting" things?

What don't you understand about the fact that "the necessary capital" may very well be technology? That this goes in both directions is so obvious. Even if you're using the term "capital" to refer to investment and whatnot, that cannot be done without prior technology. On the other hand, the technology cannot be aquired without prior investment. It works both ways.

But technology, in the sense I'm using it, isn't capital. It's that simple. My idea to use a stick to push berries out of tree isn't capital. Not according to any Austrian economist anyway...

 

 

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

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GilesStratton:

Brainpolice:

GilesStratton:

Spideynw:
But, Robinson Crusoe figured out how to use the stick to gather more berries because he had enough money to have the leisure time to figure it out.

Yes, he put his technological ideas to use. So what?

Spideynw:
Technological advancements require funding.  The more funding you have, the more technological advancements you have.  It is a chicken/egg thing.

It's not a chicken/ egg thing. Without the necessary capital, technology is useless.

Spideynw:
Are you saying poor countries can advance technologically just as fast as wealthy countries?
s.

No, but this proves my point, not your

Spideynw:
If so, reality refutes it.

Now, now, what did Ludwig von Mises, amongst others, teach us about "reality" "refuting" things?

What don't you understand about the fact that "the necessary capital" may very well be technology? That this goes in both directions is so obvious. Even if you're using the term "capital" to refer to investment and whatnot, that cannot be done without prior technology. On the other hand, the technology cannot be aquired without prior investment. It works both ways.

But technology, in the sense I'm using it, isn't capital. It's that simple. My idea to use a stick to push berries out of tree isn't capital. Not according to any Austrian economist anyway

 

 

Again, you're playing semantics. I'm not talking about your idea to use a stick to push berries out of a tree. I'm talking about the stick itself - which is a capital good precisely because of its function of pushing berries out of the tree, according to Rothbard himself from the stick example you are drawing from him. Part of Rothbard's entire point in the example you are drawing from is that the stick is a capital good. And the stick is also being used as "technology".

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Brainpolice:
Again, you're playing semantics. I'm not talking about your idea to use a stick to push berries out of a tree. I'm talking about the stick itself - which is a capital good precisely because of its function of pushing berries out of the tree, according to Rothbard himself from the stick example you are drawing from him. Part of Rothbard's entire point in the example you are drawing from is that the stick is a capital good. And the stick is also being used as "technology".

Ok, well it seems you're intent on equating "technology" and "good". So I'll let you be. My point remains, in my sense of the term (and as you mentioned, Rothbard's), technology refers to ideas, and as such are not capital goods.

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

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GilesStratton:

Spideynw:

Brainpolice:

Technology IS capital. The stick IS technology (albiet primitive). So this is a chicken/egg thing that works in both directions.

I would say the stick is both capital and technology.

And I would say that you're equivocating.

How is that?

At most, 5% of the population would need to stop complying to bring down the government.

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Brainpolice:

 

Again, you're playing semantics. I'm not talking about your idea to use a stick to push berries out of a tree. I'm talking about the stick itself - which is a capital good precisely because of its function of pushing berries out of the tree, according to Rothbard himself from the stick example you are drawing from him. Part of Rothbard's entire point in the example you are drawing from is that the stick is a capital good. And the stick is also being used as "technology".

For you, and for Spidey, please review some of the selections in the "Literature" section of this site.  It is you who are playing semantic games by stating what your opinions are.  "Well from my perspective..."  "What I am talking about..."

This is the ECONOMIC QUESTIONS forum.  If you can find an author who, without equivocating, states that technology itself is a form of capital or that any capital good is "technology" (because they all, to some extent, incorporate technology), then post it and we can discuss.

As to the question of whether one or the other are required for advancement, both are required, but the supply of capital (GOODS/MONEY, NOT RECIPES) has been the limiting factor through out all of history, i.e. our recipes have always outpaced our supply of capital.  We can examine what would happen if we have fully exploited all known recipes, but then we would not be examining reality in relation to the present, or any human past.

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dsimo04:

Brainpolice:

 

Again, you're playing semantics. I'm not talking about your idea to use a stick to push berries out of a tree. I'm talking about the stick itself - which is a capital good precisely because of its function of pushing berries out of the tree, according to Rothbard himself from the stick example you are drawing from him. Part of Rothbard's entire point in the example you are drawing from is that the stick is a capital good. And the stick is also being used as "technology".

For you, and for Spidey, please review some of the selections in the "Literature" section of this site.  It is you who are playing semantic games by stating what your opinions are.  "Well from my perspective..."  "What I am talking about..."

This is the ECONOMIC QUESTIONS forum.  If you can find an author who, without equivocating, states that technology itself is a form of capital or that any capital good is "technology" (because they all, to some extent, incorporate technology), then post it and we can discuss.

As to the question of whether one or the other are required for advancement, both are required, but the supply of capital (GOODS/MONEY, NOT RECIPES) has been the limiting factor through out all of history, i.e. our recipes have always outpaced our supply of capital.  We can examine what would happen if we have fully exploited all known recipes, but then we would not be examining reality in relation to the present, or any human past.

This, thank you.

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

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Spideynw:
How is that?

Because this is an economics discussion, hence the correct terminology should be used. Not every day terminology.

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

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GilesStratton:

Spideynw:
But, Robinson Crusoe figured out how to use the stick to gather more berries because he had enough money to have the leisure time to figure it out.

Yes, he put his technological ideas to use. So what?

My point is, it takes time to come up with new technology and it takes wealth to have time.

GilesStratton:

Spideynw:
Technological advancements require funding.  The more funding you have, the more technological advancements you have.  It is a chicken/egg thing.

It's not a chicken/ egg thing. Without the necessary capital, technology is useless.

And without the necessary capital, there is no new technology.

GilesStratton:

Spideynw:
Are you saying poor countries can advance technologically just as fast as wealthy countries?
s.

No, but this proves my point, not your

How is that?  If technology increases wealth and wealth does not advance technology, then the poor countries technology should advance just as quickly as that of the wealthy country.

 

At most, 5% of the population would need to stop complying to bring down the government.

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GilesStratton:

Spideynw:
How is that?

Because this is an economics discussion, hence the correct terminology should be used. Not every day terminology.

And you have yet to explain how it was equivocation.  How was I using the terms innapropriately?  I just think you do not understand what equivocation is.

[edit] I just saw your other post.

At most, 5% of the population would need to stop complying to bring down the government.

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Spideynw:

GilesStratton:

Spideynw:
But, Robinson Crusoe figured out how to use the stick to gather more berries because he had enough money to have the leisure time to figure it out.

Yes, he put his technological ideas to use. So what?

My point is, it takes time to come up with new technology and it takes wealth to have time.

GilesStratton:

Spideynw:
Technological advancements require funding.  The more funding you have, the more technological advancements you have.  It is a chicken/egg thing.

It's not a chicken/ egg thing. Without the necessary capital, technology is useless.

And without the necessary capital, there is no new technology.

GilesStratton:

Spideynw:
Are you saying poor countries can advance technologically just as fast as wealthy countries?
s.

No, but this proves my point, not your

How is that?  If technology increases wealth and wealth does not advance technology, then the poor countries technology should advance just as quickly as that of the wealthy country.

 

You don't understand my position, go back and read. To summarize: capital is scarce in relation to technology. Draw your own conclusions, I've got better things to do.

 

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

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GilesStratton:
To summarize: capital is scarce in relation to technology.

Really?  So we know how to make hyper-space drives, or to create food out of energy, or how to build a transporter, or any other number of technologies?  Seems to me all that technology is pretty scarce.

At most, 5% of the population would need to stop complying to bring down the government.

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