Video Of The Week: Albert Wenger at DLD NYC

My partner Albert gave a talk at DLD NYC last week that covered some interesting topics regarding the future of our economy and our society. It’s a short talk (only 12mins) and well worth watching.


Comments (Archived):

  1. awaldstein

    ‘marginal cost to interrupt is zero’ is a telling and grabbing thought that really speaks to his idea of the global smearing of attention.What a smart guy he truly is.

    1. fredwilson

      yup. he makes us all better by making us think about things that we might not have thought of

      1. Ronan Perceval

        And we might not want to think about:)

    2. LE

      Rorschach.When I read your comment earlier, before viewing the video, I thought I saw that as “marginal cost to disrupt is zero”. (Not interrupt).After watching though, I see that Albert actually said “marginal cost to send and interrupt is zero”.But it’s interesting that the marginal cost to disrupt is actually approaching zero as well.

  2. Richard

    Brave for trying to squeeze this subject into a 10 minute talk.On one hand GDP numbers are overstated. GDP could be much worse if we factored renting into inflation (which we should).On the other hand, GDP numbers are somewhat misleading. The percentage changes in GDP are for a 16 trillion dollar economy with an agei go population that has shifted production to lower cost developing countries.

  3. Henry Yates

    Great talk, really thought provoking.I love the idea that GDP is the wrong measure. GDP/GDP growth is so fundamental to the way we think about so many things.In the UK we are seeing a big rise in the number of self employed – see graph below. There is a mixed opinion on whether this is a good thing – average earnings of self employed are considerably lower than employed. The labour market economist David Blanchflower says: “Particularly after a prolonged downturn, there is a well-documented pattern of people failing as jobseekers and then moving into self-employment status, often out of desperation rather than anything more positive.”I am not sure I entirely agree. In many cases the transition to self employed may have been forced, however, even with lower earnings I would guess many self employed will be more satisfied with their new position due to the benefits of flexibility, fewer hours work/more holiday and and the general sense of fulfilment from being your own boss. Economists find it hard to include these factors as none of them show up in the GDP figures.

    1. pointsnfigures

      I think GDP is the right measure.

  4. Matt A. Myers

    Related: Albert made a blog post yesterday entitled “What is Progress?” It can be found at…I made a really long comment there, though didn’t know he had made a related talk. I’ll have to watch it and re-read what Albert said to see if the context influences my thoughts different. I’ll be making my comment into a blog post, hopefully it won’t get much longer than it already is!

  5. Glen

    In a world with guaranteed income and lots of time, I think an important thing to consider here is how humans create a sense of meaning. I think that will become much more important as we make this transition.

  6. pointsnfigures

    I think most of the growth disappearing can be chalked up to really bad government policy. Bad regulatory policy, bad tax policy. Only worse since Obama took over. On jobs, we are changing our workforce from an “attached” to an “unattached independent worker”. We are paying people not to work, and we are expanding bad policy which causes them to choose not to work.Agree the political discourse is bad. It’s why government should be smaller and let the entrepreneurs figure it out.Interesting point on information. Agree that entrepreneurs are our future-but I don’t see our educational institutions training them. Big disconnect-which leads to his points on education (and Immigration!)His points on attention are dead on.

    1. LE

      I think most of the growth disappearing can be chalked up to really bad government policy.Government policy? Explain this in context to the fact that people in foreign countries have a lower standard of living, get paid less (or peanuts), can copy our manufacturing methods [1], don’t have unions or nimby stuff, and can wipe our ass on cost of goods till the cows come home. And sweatshops. Not to mention that they aren’t as spoiled and do work harder. It’s why government should be smaller and let the entrepreneurs figure it out.There was a time right before the crash in 00’s when the going theme was that people should be able to take the money that they had in social security and invest it in the stock market which clearly had better returns and only went up not down (same as housing)![1] Japanese with cameras who learned from us. I’m old enough to remember when things made in Japan were actually poorly made (was the 60’s) and the pattern duplicated to the next country with peasants that was able to make what we make cheaper and eventually better in many respects. I remember how shitty boxes of products made overseas looked (the cardboard and printing) before they became the well oiled machine they are today. I remember my dad making fun of Japan and then many years later when he would buy a Sony he wanted to make sure that it was a Sony actually made in Japan and not in Korea or some other country they started to make Sony’s in. (Really he would check the carton at the store..)

      1. pointsnfigures

        Bad govt policy-Obamacare. Over 50 workers, you change how you can insure them-work too many hours, changes insurance. Obamacare created a part time work force that didn’t exist before.Bad govt policy-hiking all kinds of taxes. reduces the incentive to workBad Govt policy-unlimited extension of unemployment benefits creating disincentives to find workBad govt policy-hiking the cost to employ people via regulation–> creates incentives not to hire and use independent 1099 workersWe could go on and on about the EPA, IRS and OSHA as well using the govt to influence political agendas too.BTW, if people invested in a passive no load mutual fund over their lifetime instead of social security, they would be better off. They’d have more money. Even if they invested in 30yr Treasuries and kept rolling the investment they’d be better off. Social Security is incredibly inefficient and poorly designed.

        1. Matt Zagaja

          Many workers are salaried and therefore taxes do not impact how many real hours they work because they are paid the same regardless. I doubt there are a whole lot of hourly workers making $150K that decide not to work the extra 10 hours a week to make the $200K or something similar. Hourly workers tend to be middle class and will take whatever hours they can get.

          1. pointsnfigures

            Yes and no. Salaried workers will only work 9-5 depending. Most workers in the US make under 100k. Hourly workers are usually starter jobs-fill in jobs, or union/manufacturing type jobs.… is an economic paper that explains it.

    2. Matt A. Myers

      And profits being held onto instead of directing people to do things, to be productive.

  7. btrautsc

    and now my phase 2 of life dreams of becoming a mystery gumshoe novelist have been dashed. Thanks Al.

  8. William Mougayar

    Did Albert hint he was writing a book? That doesn’t surprise me, and it would be great to see it come out.1. Great observation about “Information as a substitute for capital”. Are there are other examples outside of Kickstarter and crowdfunding scenarios?2. Are jobs, capital, growth, attention disappearing or just shifting?

    1. jason wright

      i think it’s what we recognise as being of value that is shifting. info is a currency, and it’s now being more widely used as a unit of exchange than ever before. QE and 0% rates for savers makes traditional money unattractive, promoting alternatives (e.g. bitcoin).”growth” as hitherto defined is unsustainable.

      1. awaldstein

        I agree with both you and William in principal but this thinking is so far above and beyond 50-80% of the US population that it pays to realize it.Traditional money is what people spend.Unattractive is is just not reality to most everyone on the planet.

        1. LE

          Agree. To me saying “makes traditional money unattractive,” is like saying “there is this thing called Yoga that makes the need for sex, masturbation and porn unattractive”.

      2. Jim Peterson

        Traditional money works very well in my area.

        1. awaldstein

          It works well for everyone Jim.

    2. LE

      Albert said he was writing a book as an irony after mentioning that Publishers Weekly said the average book only sells 250 copies.However I’m guessing that there are many reasons to write a book that go way beyond the obvious [1] of a) money (most likely not Albert’s concern) b) reach of message (probably not the goal either as even if you sell a limited amount of copies you can still use a book as a platform) c) fame (almost certainly not Albert’s goal) and so on. [2][1] Just like making commentary on a blog or answering questions on stack exchange has benefits that go way beyond what appears obvious on the surface.[2] My ex wife’s new husband wrote a book and was published by O’Reilly on a subject that he is an expert on. I found that really impressive. I had bought a ton of O’Reilly books when I was first involved in the internet. And while I always had respect for new husband before the book, the fact that O’Reilly punched his ticket definitely bumped him up several notches in my “ranking” system.

  9. JLM

    .There is a tendency when one does not like the current status of a particular measurement to find an alternative that may be different but is more palatable. Why companies are talking up EBITDA rather than GAAP earnings.In some ways this is simple human nature at work and in others it is self-delusional.We need not a single measurement but rather a dashboard of gauges which provides a more comprehensive view.Do not abandon. Keep the old traditional standards and add what new ones can provide similar utility.Anything related to a body of people is also screaming out for a per capita measuring spoon. Per capita should include the labor force and the population.I would not abandon GDP — which let me say is a goofy idea even if GDP is declining. We should follow the trend line but make it more focused by looking at per capital GDP using both the labor force and the population.If nothing else, we should know the magnitude of the decline. Huge swings have been visited upon us in the past in the person of — women entering the workforce wholesale, recessions and other socially driven phenomenon. You don’t abandon the measurement protocol, you explain the impacts.The labor force is the big missing variable in almost every discussion about the US economy.1. Real unemployment is about 50% higher when we look at labor force participation rate. Don’t get me started on U-3 v U-6/7.2. The number of Americans who are no longer looking for employment, the big variable in the calculation of most unemployment rates, is increasing at an astronomical rate. I simply do not believe these numbers. I think they are lies.3. If someone has “stopped looking for work”, how do they become magically not “unemployed”? Huh, how is that even possible? And yet that is the way the BLS (Bureau of Labor Statistics) looks at things. If you do not have a job and either enough time has transpired or you announce you are not looking for work, you are NO LONGER UNEMPLOYED.This lowers the unemployment rate like you were actually employed because it changes the number of folks being counted. Bad reality becomes good fiction.A lot of this falls into the classification of old wine, new bottles. We need old wine, old bottles. New wine, old bottles.JLM.

    1. sigmaalgebra

      > I think they are lies.How indelicate, indiscreet, maybe even pejorative!

      1. Vasudev Ram

        Also overheard:A statistician is a person who can have his head in the freezer and his feet in the oven, and say: “On the average, I’m feeling perfectly comfortable.”

  10. AliciaLStacey

    I’ll have to watch it and re-read what Albert said to see if the context influences my thoughts different. I’ll be making my comment into a blog post, hopefully it won’t get much longer than it already is!

  11. Jim Peterson

    Education is important, of course. Yet scary what Albert says about education not being able to save a shrinking ship.

    1. JLM

      .From a macro perspective maybe there is traction on that subject. I doubt it.On a micro basis, decide whether you want to major in English or Computer Science and I promise you YOUR outcome will be saved.The cumulative impact of individual decisions is always where the macro trend comes from. We just tend to ignore it.This is where bad public policy — like the legalization of marijuana — becomes disastrous public policy.I don’t care if one person smokes a bit of pot. If a lot of folks are walking around stoned the aggregated costs of a generation of pot heads requiring a newly emerging set of social services can drown the productive members of society.Taken individually almost no public policy decision seems bad. Taken together with a bit of real world experience and just a half inch deeper thought — and maybe a side of inaction — and the cumulative, aggregate impact is a disaster.A perfect example was Reagan’s immigration amnesty. It was sold on the basis of securing the borders, not letting anyone else in and this amnesty being the last such political policy decision.Where are we today?Borders still unsecured, huge immigrant population and contemplating another amnesty. Worse we’re saying — Hey, Reagan did it. We don’t remember the history.I do think education is still the most important decision we all make and the number of under and unemployed poets is the first exhibit for the prosecution.We should be producing BMW mechanics, HVAC workers, phone/tablet/laptop/computer repair guys. They would all have instant jobs. Not so much English majors — want fries with that? Sorry.JLM.

      1. awaldstein

        Nicely said but this strikes a chord with me and I need to quibble.I respect Reagan as a politician and I agree that the policy decision you mention faded in the face of history.But Reagan, since you hold him up (and Koch as well), own one of the most disastrous public policy decisions to not support aids research and prevention till over 2000 were dead, and genocide guaranteed.Great example of capable and otherwise effective leaders who out of personal and political cowardice need to take responsibility for what came after.

      2. sigmaalgebra

        > Pot?My dept. Chair and his wife, both mathematicians, had a daughter, 17, after a vacation, returning to Princeton by train. She never made it. The train operator had been smoking pot. The train crashed, and the girl was killed.

      3. Matt Zagaja

        But without English majors how will we have content for content marketing?

      4. geg

        Is this post a joke? Did you listen to what Mr. Wenger said or just decide to start spewing some sort of preprogrammed rant immediately?Firstly, taking something like computer science over english definitely does increase your odds of finding employment; I agree with you wholeheartedly. Unfortunately, that had nothing to do with this talk. This talk was about the transition of education into free, online communities (among other things; primarily the transition from an industrial society to a knowledge-based one). Mr. Wenger is saying that there is coming a time that rather than going out to pay exorbitant amounts of money on an education you could simply go to CodeAcademy and, with the help of the community, learn those very same skills without a price tag. The face of education is changing and unfortunately many post-secondary institutions aren’t moving fast enough to keep up.Secondly, I’d like to look at your comment about marijuana which is completely laughable. Did society collapse when alcohol was legalized after prohibition? Absolutely not. Will you, Mr. JLM, become a raving pothead merely because you have the option to partake? Again, absolutely not. Will some people abuse it? Absolutely. But all that does is bring them down and open the door for others to succeed in their stead. Let’s not confuse your misguided prejudice with reality.While I do agree with many of the final points you make (repair, HVAC, etc) being important and integral parts of society I cannot help but feel the entire message of this talk went completely over your head. Education is changing. The world is changing. And, as Mr. Wenger said, a large part of that is due to automation. Simple jobs will not require humans to do them as we go forward. This will become more and more prevalent. As Mr. Wenger said, nearly half of the jobs currently being worked by humans will be obsolete in 20 years. People need to begin creating and developing because as we go forward simple repair jobs and HVAC will not need human beings to get done. Every single person needs to begin to create new products, services, etc because mowing a lawn for a living will no longer be an option.And as a final point, please don’t bring immigration policy into a discussion that has absolutely nothing to do with immigration. It makes you look silly and bigoted.

        1. JLM

          .Other than an obvious escape from charm school there is not a lot to explain your comment. It is not pertinent to much of what I have said. I was speaking primarily to the implications of policy at the micro v macro level. Let me see if I can assist you.Individual decisions can often trump a wave of change. Don’t resign oneself to the macro wave of change if you can tailor your personal outcome to an individual personal decision. You can be either the trend or the exception to the trend, your decision.It does not challenge the reality of the trend, it just stands for the proposition you don’t have to succumb to the trend.The idea that institutions haven’t picked up on the importance is silly. Of course they have.The marijuana comment has nothing to do with whether you become a “raving pot head” but rather JUST LIKE ALCOHOL there are seemingly simple individual decisions which when aggregated create huge social burdens.Alcohol is no walk in the park. Perfectly legal individually, huge burden on society. Again, nothing to do with marijuana, has to do with micro v macro costs to society. Could be diabetes, obesity or computer usage.As to Albert’s notions on automation, there are industries which will never be automated — like crawling into hot attics to fix air conditioning units in July or August.Don’t want to fall prey to Albert’s fears of automation, pick an industry, a line of work, a job which entails climbing a ladder and doing the work in someone’s attic in July.That is a job which will NOT be automated, no?Immigration policy is an example of having solved the problem at the negotiating table, having sketched out a plan, subsequent leaders failed to adhere to the agreement. It is really about policy not “immigration”.We agreed to secure our borders as part of the Reagan era legislation. Failed to do it. Are arguing about the same thing today.We agreed we could take a chance on amnesty as it would not become either precedent or policy — one time, hold your nose idea. Failed to do right. Are arguing about the same thing today.Has nothing really to with immigration, really doesn’t address my personal views — never said whether I approve, agree or not — just that we are replowing old turf. Has everything to do with ensuring that when we agree to solve a problem it actually gets solved IAW with the agreed solution.Old wine, old bottles.Hope that helps.JLM.

          1. geg

            This helps clarify a bit of what you were saying, so for that I do thank you.I agree with you that individual decisions are at the core of every bit of change. One does not have to simply become a victim of circumstance or ride a wave of change. But at the same time it needs to be understood that sometimes these “waves of change” can and will trump individual decisions.For example, the auto-mobile has just been invented. You have the choice of joining a horse farm or working at an assembly plant for Ford. If your individual choice is to work at the stables and ignore the new “trend” in regards to auto-mobiles you are going to get swallowed up.And why could things such as crawling around in a vent not be automated one day? It is currently not possibly but the rate that our knowledge and technology increases is at a seemingly exponential rate. Many of these labour jobs will be replaced by machines and that’s a reality we need to face. Perhaps not the example you listed in the near future; but many others will be.And what is your proposed solution to avoiding social burdens which are placed on us via decisions of the individual? Would you have legislation to have every potentially harmful substance/act outlawed or regulated to further society as a whole? Regardless of individual decisions a massive wave of change is coming and refusing to accept this or adapt will be destructive. But, at its core, you are correct. People need to make the right decisions for themselves to best prepare for success.

          2. JLM

            .As to what you say, sure ANYTHING is possible but not in the time frames in which Albert was addressing. All change is incremental.Today there are meaningful automation initiatives in scheduling HVAC work but the idea of attacking the automation of a guy crawling into a hot attic, that is not the low hanging fruit. May never be.The example of the automobile is a very suspect automation exemplar if your point is intended to be in support of the idea jobs will be “eliminated” by automation. In fact, the invention of the automobile created what was at one instance the largest source of jobs and industry in the US.It might be fair to say it was an example of “transference” in that horse handlers and stable tenders became factory workers but the net of it all was a GAIN in employment not an elimination of jobs.The elimination of jobs is not the same as the application of technology. Computers, hardware, software is an application of technology which will increase jobs as a new industry — similar to the auto industry — is created.Once created, its work product may increase efficiency that ultimately eliminates jobs.Textiles, in which jobs were automated and jobs shipped overseas, is a perfect example of automation and bad public policy.The knee jerk idea that society owns the aggregate weight of individual problems is where the problem needs to be pondered.At what point are YOU responsible for YOU and ME solely responsible for ME?This the notion of personal accountability. When governments take different views on these things, you get different outcomes.Compare California (nanny state governance ideas) v Texas (land of individual opportunity and accountability) outcomes.When you have state imposed solutions, you have to fund them and thus a state has no choice but to collect taxes.Eschew them and there is no need to tap into individual incomes and thus no necessity for a state income tax.Exactly what has happened.People are moving to Texas, voting with their feet.People not only “need” to make the right decisions, they must be held accountable for the decisions they make.JLM.

          3. geg

            I think we’re on the same page for a lot of this; we’re just talking about different issues.I completely agree with the individual having to take responsibility for his/her actions. And while I think my stable -> assembly line analogy holds up, it’s going to a much more profound transition this time around. All of those workers who are standing on assembly lines right now putting things together are going to be replaced by machines. In my analogy you simply have them stop feeding horses hay and have them attach piece A to piece B in an assembly line. Going from one to the other did not require much in the way of training or understanding. Unfortunately, in the present day, none of these workers have the skills they’re going to need to survive in a knowledge-based economy. We’re also seeing a massive trend supporting SME with large enterprises having a much tougher time. Why? They’re too large and bloated to adapt quickly. They have too many inefficiencies. The reason jobs are “going away” or will be vanishing is because people have to start making their own opportunities. We need more highly skilled entrepreneurs. We need people who are going to create opportunities.Your HVAC example is not a primary contributor to the economy. It is secondary. The primary contributors are the ones developing new IP. The entrepreneurs who are creating something from nothing. Without them your HVAC worker won’t have a job because no new money is flowing into the economy. So yes, we do need more personal responsibility because the age of the small business is upon us; people are going to need to create their own opportunities, not rely on others for jobs.

          4. JLM

            .You are engaging in a bit of circular logic.If the IP developers live in houses (Col Obvious here), then they trigger increased demand not decreased demand for services, HVAC services.Where the tech may actually have an impact is the equipment installed will require less maintenance by virtue of the quality of its build and the plan for its maintenance.A computer controlled thermostat may place less “cycle” pressure on the equipment and the fewer number of cycles means it last longer and requires less maintenance.That is clearly possible.The biggest impact on the economy is going to be the economy itself. The government is creating impediments rather than removing impediments to job creation, no?The JOBS Act was supposed to create an “on ramp” until the SEC — who did not want it — wrote the Rules.Get the economy rolling again and much better outcomes will be possible as folks abandon their Mom’s basement and get out there and earn money and pay taxes.Just for the record, you do know Fed tax receipts last year and this year are at an ALL TIME RECORD. All time.The least bit of spending restraint and we would have a balanced budget and a screaming economy in less than 4 years.JLM.

          5. geg

            The point I’m trying to make is that for the HVAC people to have jobs you need to have others making money to afford houses. You need to have people who create something from nothing; people creating IP. When these workers exist now we start having demand for secondary industry like HVAC workers and such. You can’t just crank out an infinite number of secondary workers without first focusing on primary means of boosting the economy.I’m afraid I don’t know as much about the situation in the US as I am Canadian. We are on track to have a balanced budget by 2015. Some of the biggest reasons:Spending control.Emphasis on encouraging SME through tax credits.I don’t know the statistics in the US but over the last 10 years in Canada large corporations have been operating with net losses for job creation. SME has added jobs to the economy every single year; even recession years. If you want a strong economy going forward you need to start with SME incentives (and yes, spending control to achieve a balanced budget). SME creating their own IP are going to bring new money to the economy which will allow the secondary industries to grow alongside them.

          6. JLM

            .Not to beat the HVAC example to death but where we part company is that HVAC work is done on existing stocks of housing — rehab as well as expansion as well as routine life cycle implications.This is why I like the example.Canada is the best managed country in the world as it relates to financial matters. It avoided the S & L crisis and the more recent meltdown because it was run by adults and it did not get sloppy and fall into the derivatives pit.I wish Canada and the US would merge.As to money as a commodity, there is no “new” money only the recirculating of the existing money supply.While creating IP is a good thing, it is no panacea. It is just one of a myriad of good things that should be done.When the painter with a single apprentice adds a second, it helps regardless of whether any IP is involved. When they get a web site, then the paths cross.JLM.

          7. JLM

            .BTW, are you aware of any residence in the US which does NOT have a heater or an AC or some form of HVAC?It is universal. It is huge.JLM.

    2. Matt Zagaja

      My generation is the most educated generation in the history of the world, yet we are far from being the most well employed.

  12. Matt A. Myers

    Albert for President!

  13. Matt A. Myers

    Hey Fred – Do you know what the 5th statement he was going to go over was?Disappearing growth.Disappearing jobs. Disappearing capital. Disappearing attention.Disappearing _________.

  14. sigmaalgebra

    Pretty good.Theme: Progress in economic productivity provides some people with some free time that they, then, can use to invent some valuable new things, yes, including some that will further increase economic productivity.The upside of, say, Craigslist and other recent innovations in ‘information’ is the new opportunity, and in many cases need, to ‘push ahead’, that is, to find things that are new and valuable. Examples? Sure: (1) From luck or whatever, do well enough with food gathering and then try and get some success at agriculture. (2) Agriculture leaves some people with less to do than when food gathering and then they can try and make progress with domestic animals. (3) With agriculture and domestic animals, more people have some free time, living density increases, and want writing, arithmetic, and geometry. (4) Then the increased economic productivity yields more free time and get wheels, horse drawn transportation, working in wood, stone, and metals, more in transportation including open ocean sailing, trade, more in economic specialization and, thus, more in economic productivity.So, as in the talk, in part what we are seeing now is more in economic productivity, some people with more ‘free time’, and, then, for another step along this old path, more invention for things that are valuable and, really, likely still more in economic productivity.So, what the heck to do with all these lost jobs? Sure: Have the people who lost their jobs invent valuable new things including some that increase economic productivity. Or, if want everyone to have a ‘job’, then just return to food gathering!So, since the talk mentioned education, since jobs are not what they used to be, why education? Because to invent valuable new things, one of the biggest advantages is to exploit some prerequisites from education. Or to see farther than others, stand “on the shoulders of giants”.Net, we’re trying to push ahead, break new ground, ‘push the envelope’, etc.

  15. Semil Shah

    After reading his blog closely for a year, it’s almost as if Albert should have a full course on Coursera or something like that. It’s a perfect mix of academic and applied reasoning.

  16. Matt Zagaja

    I am not surprised about books. I still buy them on my Kindle but many of the best articles are published online and I save them into Instapaper. I just read an article explaining that the World Bank did a study that found most of its PDF reports sat unread: http://www.washingtonpost.c….I think the issue of attention can be boiled down to the following parable about choice in economics (thanks to Yoram Bauman (…The cost of something is it’s value minus what you give up to get it. Say I offer you a Snickers bar that you value at $1.00. If you take it then you are up $1.00. However if I offer you a Snickers bar at $1.00 or a bag of M&Ms at $0.70 then you’re only up $0.30. Now imagine a choice between two Snicker’s bars! The Internet has given us a whole lot of Snickers bars to choose from.

  17. iggyfanlo

    AW. Your thinking is so far ahead and so well thought out (therefore simple), it hides it’s revelatory power

  18. JLM

    .My Mother wore combat boots. She looked great in them. Thanks, Mom.I miss her.JLM.

  19. Vasudev Ram

    That’s a good talk.

  20. James Ferguson @kWIQly

    I thought information as a substitute for capital a great insight.Insight can also be a substitute for production…If you fix a gear box before it grinds itself to a halt, you extend the LTV of the vehicle.If you can use information and technology to manage the engine and sense the problems we can do more with lessIf we can do more with less we decouple wealth generation from productivityIf wealth goes to the reward the IP, then we all need more education to support participation (and less power over IP)

  21. Preston Pesek

    Great talk, It’s a fundamental error to use a one-sided measurement tool such as GDP to measure a two sided equation of energy required / goods & services created, which is probably more true to the idea of what economy is… how well you can solve your basic needs with the resources you have to work with. GDP as a measure of goods and services only, completely misses at least half of the equation, and probably much much more.Technological solutions are reducing the overall “real energy expenditure” required to deliver the products and services that GDP measures. From this more balanced perspective, technology improves the economy but doesn’t increase GDP or improve unemployment. We create the same GDP as before, but with less energy & man-hours… or it enables us to solve more economic problems with fewer goods and services.If we were to use a ratio of energy/product instead of just the product, I think we would see incredible advances in human efficiency for solving basic economic problems in recent years. Whether or not the benefits of such efficiency are being equally distributed, is another matter altogether.The point is, the more we can use tiny silicon chips to do the things that human hands or industrial machines used to do, this is a huge net positive. If we could measure it using a two sided ratio, we could see how much good we’re doing.All of the energy and materials that we use to create our economy are contained in a closed, spherical system (the earth) where cause and effect and the law of conservation of energy require that we account for what we take from the biosphere to make for ourselves.Yet GDP completely ignores this fact. Pulling oil out of the ground is only a net positive according to GDP, as is damming rivers, slashing rain forests, and harvesting fish from the sea. Those things don’t appear on the balance sheet, and it’s a huge mistake at a global level.As long as this denial persists in the way that we measure our economic activity, we will continue to crash the greatest gift our economy was ever given, the once abundant, yet finite natural resources of the earth itself. This is very hard to measure, of course, but perhaps big data holds the promise to finally get us to a point where we have an accurate measuring stick for the human economy.

  22. Steve

    I think your recent talk at Disrupt NY was better. Just saying

  23. tauranga48

    “We need not a single measurement but rather a dashboard of gauges which provides a more comprehensive view.”What are the big problems the economy needs to solve?Housing: Do we care that X thousand have no/wrong/old/unsafe accommodation? If so let us set that as a target and allocate resources both private and public to make fixing it happen. ” The greatest minds in the country are focused on VC not a funding mechanism to pay for building so it won’t happen.”Obesity: Do we care that Y million are unable to function at 100% in a normal workplace? If so, let us set that as a target and allocate resources both private and public to make lower body mass happen. The greatest minds in the country are focussed on selling the products and services that create the problem (devices that cause people to sit still) and selling drugs that address consequent heart and depression problems. The voters are just the pawns that make government shell out on drugs.I am a relative newcomer to this site, but I have read through the last 50 days of posts and 50% of the readers comments. The focus I see is on tech, Net Neutrality, equipment and apps, devices that make people sit still and not make economically useful things like houses. None of these focus points will sort these two critical problems noted above. Fixation on staring at screens instead of creating the things that people need to live a healthy life is at the root of America’s problems, and the reason why “jobs are scarce” per the video are that a generation has been brought up to believe that staring at screens using apps like Zynga is actually economically useful. Sure eyeballs can be measured and fed into algorithms that determine advertising revenues, but that does not of itself do anything to create the necessary actions to fix these 2 problems and start the lines on Albert’s graph to move upwards again.I hope that Fred you don’t think I am being disrespectful by picking on Zynga. You are clearly a world leader at what you do. The point I am making is that the presentation seemed to take as read that the graph lines are in permanent freefall. I believe that the greatest minds could adopt a different paradigm than gdp and make the US a better place.

  24. LE

    B-Corps intrinsically value people, planet, and profit”Struggling to express this” but no match for traditional bad to the bone corporations which will use any means necessary to make a buck. And the gullible public that will accept whatever those companies and their marketing materials or salespeople have to say. [1][2]Let’s take an example. Let’s say Lancaster is one of the best places in the world to start a company. Let’s say that is actually true. But then someone decides to take Rahway NJ (how shitty is that?) and execute some deceptive marketing which, as Hans and Franz would say “pumps it up” and actually makes it look more attractive than Lancaster. Lancaster, which is honest and caring and tells it like it is is at a disadvantage. It’s hard to be a saint when you’re just a boy out on the streets.[1] Always outliers of course. Definitely companies that can break this mold but they are atypical.[2] People (en masse that is) still pick the realtor that tells them that they can get the high price they want while knowing that they actually most likely won’t be able to get that price for them.

  25. JLM

    .If by “health” you mean the real “jobs” economy then I agree more with you than you do with yourself.Not to discuss the labor force, the percentage of the population actually working and the labor force participation rate and the number of illegal and guest workers in the US is to be tone deaf.As a measure of the difference between that single indicator and some other equally significant indicator then I am in favor of it.The SIZE of an economy is useful information particularly when one is in economic times like these — jobs, deficit, government spending, debt levels — when an apt comparison can be made.An apt comparison might be National Debt v GDP and their respective trend lines.People have to remember about the stock market that the entire work force is primarily investing their IRAs, Roth IRAs, Keoghs in the stock market. So while there are vagaries and shocks, every quarter a flood of money comes into the market and investment advisers essentially only invest MORE money in the same stocks or bonds or mutuals, etc.Because of this, the upward mobility of the markets are almost assured. Why the ship always rights itself.Defined benefit is dead. Long live defined contribution which is alive.This is also why the notion of the redistribution of wealth is so offensive. Much of wealth is made the old fashioned way — compound interest. Why should someone be penalized because they worked hard, saved their money, invested wisely and prospered? Their wealth was earned.JLM.

  26. awaldstein

    After forcing myself to read about the implications of political cowardice around aids, and its impact on the world, and looking at the connection between those in power and Monsanto, it is a bright light on how these back room deals impact us all.