Friday, September 7, 2012

Technological Pessimism and Too-Good-To-Check Quotations

One of the most infamous statements of technological pessimism is often attributed to Charles Duell, head of the U.S. Patent Office back in 1898, who allegedly proposed closing up the patent office because "everything that can be invented has been invented."

But the quotation is apocryphal, as has been known for decades. Indeed, Duell gave a speech to Congress in 1899 about how America's economic future depended on innovation. However, there was apparently also an article in 1899 in the the comedy magazine Punch which was imagining a conversation where, at some point in the future, a genius asks about the patent office and a boy responds: "Everything that can be invented has been invented."

The story came to mind because the Robert J. Gordon has a working paper out called "Is U.S. Economic Growth Over? Faltering Innovation Confronts Six Headwinds?" (It's National Bureau of Economic Research working paper #18315. NBER working papers aren't freely available on-line, but many academics will have access through their library systems.) Like all of Gordon's work, the main theses are genuinely thoughtful and provocative. But my eye was drawn to a paragraph about classic predictions of technological pessimism. Gordon writes:

"There are four classic examples in the past of innovation pessimism that turned out to be wildly wrong. In 1876, an internal memo at Western Union, the telegraph monopolists, said, “The telephone has too many shortcomings to be considered as a serious means of communication.” In 1927, a year before The Jazz Singer, the head of Warner Brothers said, “Who the hell wants to hear actors talk?” In 1943, Thomas Watson, then president of IBM, said, “I think there is a world market for maybe five computers.” And in 1981, in the most famous of these ill-fated quotes, Bill Gates himself said in defense of the capacity of the first floppy disks, “640 kilobytes ought to be enough for anyone.”

The paragraph has no footnotes or citations, and in fact, technology writer Kevin Maney wrote an article in USA Today back in 2005 that debunked all four of these quotations: some didn't happen, some are taken at least partially out of context.

For example, that memo from Western Union about how the telephone would never work? The quotation was real enough, but it occurred when Bell was trying to sell his telephone patents to Western Union. Instead of buying the patents, Western Union tried to start its own telephone company, and its handset actually worked fairly well. But then Bell sued for patent infringement, and drove Western Union out of the market. In short, Western Union believed in the telephone and tried to become a phone company, and statements to the contrary were positioning for a patent battle.

And that statement about "who the hell wants to hear actors talk?" Turns out that Warner Bros. was investing heavily in music, thinking that musical scores would be more important than dialog. And indeed, "The Jazz Singer" was about to be a huge hit. Even today, one can argue that for a lot of movie hits, the background of sound is more important than any specific dialog spoken by the actors.

Watson's statement about how the world needs only five computers? There is no primary source or secondary source from that time frame which reports any such comment. And if you think about it, how plausible is it that the head of a computer company would announce that his world market was a total of five sales?

Bill Gates on how 640 kilobytes ought to be enough for anyone? Gates has always denied saying this, and there's no independent source which says he did. And again, how plausible is it that the visionary  head of a company selling operating systems for computers  would state that people have near-term limits on how much computer power or memory they would need?

In the journalism business, an ultra-convenient quotation is sometimes referred to as "too good to check." I remember a Peggy Noonan column from a few years back in the Wall Street Journal that explained the concept by telling a classic Margaret Thatcher story. Noonan wrote:

"The story as I was told it is that in the early years of her prime ministership, Margaret Thatcher held a meeting with her aides and staff, all of whom were dominated by her, even awed. When it was over she invited her cabinet chiefs to join her at dinner in a nearby restaurant. They went, arrayed themselves around the table, jockeyed for her attention. A young waiter came and asked if they'd like to hear the specials. Mrs. Thatcher said, "I will have beef."

Yes, said the waiter. "And the vegetables?"

"They will have beef too."

Too good to check, as they say. It is certainly apocryphal, but I don't want it to be."

Of course, not all statements of technological pessimism are wrong. The great scientist Lord Kelvin did give a speech in 1895 declaring that "heavier-than-air flying machines are impossible."

 I've always been struck that John Stuart Mill, one of the great economists of his time, wrote in his Principles of Political Economy in 1848 that the richer countries of the world already have plenty of material wealth, and there is little reason to desire or expect much more. Instead, the focus should be on a better distribution of income and on reducing the amount of work that is necessary. Here's Mill from Book IV, Chapter VI. I boldfaced one line in particular: 

“[T]he best state for human nature is that in which, while no one is poor, no one desires to be richer, nor has any reason to fear being thrust back by the efforts of others to push themselves forward. ... ”
“I know not why it should be a matter of congratulation that persons who are already richer than any one needs to be, should have doubled their means of consuming things which give little or no pleasure except as representative of wealth; or that numbers of individuals should pass over, every year, from the middle classes into a richer class, or from the class of occupied rich to that of the unoccupied. It is only in the backward countries of the world that increased production is still an important object; in those most advanced, what is economically needed is a better distribution ... “
“It is scarcely necessary to remark that a stationary condition of capital and population implies no stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the Art of Living, and much more likelihood of its being improved, when minds ceased to be engrossed by the art of getting on. Even the industrial arts might be as earnestly and as successfully cultivated, with this sole difference, that instead of serving no purpose but the increase of wealth, industrial improvements would produce their legitimate effect, that of abridging labor.”
If Mill, one of the truly towering minds of his time (or any time), could fall into the error of thinking there was no particular need to increase production from the levels in 1848--when per capita GDP in the U.S. was something like 1/20 of its current level--then anyone can fall into such an error. I am no expert in predicting future growth rates, and surely there are plenty of reasons to be pessimistic about the long-term growth trajectory for the U.S. economy. But I suspect that those who are alive 150 years from now will look back at the current standard of living for an average person and view it as extraordinarily and unbelievably low--much the same way that today we look back at the standard of living in 1848.