Brad DeLong has an article in the November issue of Wired that puts our rates of technological change in historical perspective. An excerpt:
Past industrial revolutions — steel, for example, or the coming of mass production to the automobile — had seen explosions of technology that drove the prices of key commodities (train rails, the Model T) down by 5 to 10 percent a year for one, two, or three decades. The information age is not your father’s Oldsmobile: The price of computation, according to Yale’s Bill Nordhaus, has dropped 42 percent per year over 60 years — a trillion-fold fall since 1940.
Today’s technological revolution has so far lasted between two and six times as long as previous revolutions. It is between five and ten times as fast, a race between a cheetah and a possum. And it is a larger share of the economy. It changes what people do in their work, where it is done, and even what economic activity is. The problem: We are not sure how. (Spare a thought for Alan Greenspan — negotiating a soft landing is even harder when you don’t know where the statistical ground is.)
We are not sure how. Yet another sense in which the market process is one of discovery, and a very diffuse one at that. Drives the central planners nuts, heh heh.