by Artificial Intelligence
The Market Power of Technology, Understanding the Second Gilded Age, by Mordecai Kurz, is an efficient textbook that helps to clarify how know-how and intangible belongings has modified the financial system. I’ve lengthy talked about how the technological revolution is critically completely different than the economic one, and this guide wraps some educational construction round that qualitative evaluation. This will not be a popular culture guide, it’s a heavy learn that drills into the monetary and financial, qualitative underpinnings of the speculation.
The Market Power of Technology
The copy despatched to me is an uncorrected proof. As I’m not an economist, I skimmed the equations within the guide, so references is likely to be a bit off and I’m making no statements concerning the underlying math. I’ve taken a have a look at what the creator is saying and the way it suits with what the markets and people have seen in the actual world for many years.
The core distinction between the economic revolution and the know-how revolution is in belongings and wealth derived from them. Software will not be tangible. Neither is the promise written into inventory valuations. The guide defines monopoly wealth as intangible belongings based mostly on monopoly benefit derived from intangible belongings and acquisition of smaller firms. Then, on web page 15, the guide factors out that “about 60 p.c of all intangible belongings on the steadiness sheet of the company part within the United States is the monopoly wealth of acquired companies.” Section 1.6, in assist of the definition, has a pleasant description of the distinction between capital and wealth.
One very good a part of the guide is it doesn’t solely deal with the present monopoly practices. Chapter 5 describes the sample of the diffusion of know-how with an in depth case research of the expansion of {the electrical} market. While fashionable know-how, pushed extra by software program, has sooner adoption, it’s nonetheless not immediate, and the chapter is sweet in describing the sample of diffusion.
Buying nascent companies and incorporating or killing their know-how is a key technique to manage competitors. From the tip of the primary Gilded Age by way of the Nineteen Seventies, there was a motion in assist of antitrust. That started to crumble within the Nineteen Eighties, and we’re now experiencing nearly no motion. Chapter 6 describes, amongst different issues, how that change started with large tax cuts the that immediately led to elevated monopoly wealth.
The remainder of the chapters dig into particulars of how the modifications accelerated and make recommendations for how you can handle the hazard. Chapter 7 discusses cumulative benefits and the way that immediately pertains to know-how companies. The remaining three chapters talk about coverage reforms, together with taxation.
Aside from my ignorance concerning the math, there may be one high-level concern with the guide. The creator likes to speak concerning the first mover benefit. That’s a fable I’ve seen repeated for many years. Microsoft, Google, Apple, Oracle, Salesforce, and the opposite very massive monopoly and monopsony gamers weren’t first movers. They had been quick followers. DOS wasn’t the primary PC working system, Google wasn’t the primary search engine, and it goes on. A wise quick follower appears to be like on the market, sees what’s succeeded, and repeats it. Knowing one thing works makes R&D sooner and cheaper. In reality, the robust level the creator makes, repeatedly, within the guide, that acquisition stunts innovation and competitors, is an instance of the quick follower methodology.
That, nevertheless, shouldn’t cease anybody with an curiosity within the particulars Mordecai Kurz places ahead from getting this guide. Again, it’s not fluff. It is way nearer to a textbook. There are loads of concepts to realize from studying across the math, however for economists who want to consider the Second Gilded Age, there’s actual meat right here for dialogue. The Market Power of Technology is a guide that’s price studying and evaluating.
