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  • Walter Russell Mead: Channeling America 3.0???

    Posted by Lexington Green on February 23rd, 2013 (All posts by )

    3D printers, driverless cars, nanotech: the 21st century looks to be even more different from the 20th century than the 20th was from the 19th. American politics and institutions are going to change much more rapidly than most pundits and politicos can yet understand.

    Walter Russell Mead

    This quote is uncannily congruent the argument of the forthcoming book, America 3.0: Rebooting American Prosperity in the 21st Century – Why America’s Greatest Days Are Yet to Come by Jim Bennett and me.

    Walter Russell Mead’s wicked good blog Via Meadia has many posts which track closely with the arguments Jim and I are making. I am sure all this great material will end up in a forthcoming book by him about the demise of the Blue Model (a term he invented) and what is coming next.

    I am going to shamelessly recycle this: “the 21st century looks to be even more different from the 20th century than the 20th was from the 19th.” This is a very pithy observation which captures our vision of America 3.0, which of course we cannot really predict with a lot of detail. As Bruce Sterling wisely said:

    Nothing obsolesces like “the future.” Nothing burns out quite so quickly as a high tech avant-garde. Technology doesn’t glide into the streamlined world of tomorrow. It jolts and limps, all crutches and stilts, just like its ancient patron, the god Hephaestos.

    Tomorrow Now: Envisioning the Next Fifty Years.

    Still, we have to imagine the future, not so we will be correct then, but so we can plan, think, and act now. We also have to imagine the future so we don’t think today’s setbacks, as serious as they may be, are the apocalypse. Everyone reading this will be dead in 100 years, but our descendants will be alive, and they will have in part what we passed on to them. They will see us as living in a patch of history with a label and summed up in a few paragraphs. This is a phase, as is every other period in history.

    I will confidently predict, as Mead does, that the pace of change will be faster than ever before. Moore’s Law will be in force for a long time to come, I hope.

    What is particularly cool about the Mead quote, almost suggesting some kind of brain-meld via the astral plane between Mead and Bennett-Lotus, is the reference to “3D printers, driverless cars, nanotech” — each of these figure prominently in our first Chapter, America in 2040. One muse, three authors?

    If you have not read Mead’s two excellent books Special Providence: American Foreign Policy and How It Changed the World and God and Gold: Britain, America, and the Making of the Modern World you must do so. Get them soon, so you are done before our book comes out May 28, 2013.

    Cross-posted on America 3.0.

     

    30 Responses to “Walter Russell Mead: Channeling America 3.0???”

    1. Cris Says:

      Dreading the future one day at a time, one asks: Are the best predictions based on anticipating what might go wrong, or on some utopian wish-list? Flying cars or high-speed rail?

    2. Bill Brandt Says:

      Just yesterday I had an epiphany.

      I am trying to set up my system for streaming video – apparently my Blue Ray machine can do it – set up a router and after some hiccups (including having to update the Blu Ray firmware to the latest version) – it was talking to the router. And the router was talking back.

      And then I realized that it is just as much a computer as the old desktop I am using at the moment –

      Think what common, everyday items in the near future will start to do things not anticipated but – in retrospect – will seem perfectly good with technology.

      As far as the blue model the trend is towards distributed processing – not some centralized model where the powers-that-be “know best”.

    3. Lexington Green Says:

      Bill, agreed. It is amazing and it will get more so.

    4. VSSC Says:

      An administrative government turned from paternal to predatory with powerful collectivist tools will no doubt vanish in a nano-pfiffle.

      They’ll just walk away, they’re like that…

      God Bless these United States.

    5. grey eagle Says:

      In the US businesses based on new technologies have had explosive growth until the regulators take over. This was true of trapping, railroads, automobiles, factories, oil, radio, movies, television, and mainframe computers. It may be true of the technologies you mention.

      The regulators get more powerful every day. They are ever quicker to stamp out innovation in order to protect existing jobs and spaceship earth. We are getting closer every year to re-establishing the economic model that gave us fuedalism and the middle ages.

    6. VSSC Says:

      There is much hope.

      And here it is…

      https://www.facebook.com/VeteranEmpire?group_id=0

    7. Mrs. Davis Says:

      As players in maturing technology markets become dominant, they enlist regulators to construct artificial barriers to preserve their dominance in exchange to submission to the political objectives of the regulator. It’s not a one way street. While the trend may be to “distributed processing”, that trend is in the interest of neither big business nor big government. They will do what ever they can to forestall loss of power implicit in decentralization. Even make people eat bark.

      There is an America 3.0 waiting around the corner. But inertia keeps us going in a straight line. What will make us turn? As I look at our buffoons on the Potomac wrestle with our simple spending problem, I am reminded of nothing so much as the decade of the 1850s. Sure there’s a great future just around the corner, but we are going to be subjected to some high G forces when we make the turn. And those G forces will do much to shape what is around the corner.

    8. Lexington Green Says:

      “While the trend may be to “distributed processing”, that trend is in the interest of neither big business nor big government. They will do what ever they can to forestall loss of power implicit in decentralization.”

      This is part of why we want to raise consciousness now.

      But, yes, the G forces will be intense.

    9. PenGun Says:

      In both those book links the Kindle digital copy is more expensive than any hard copy. Kind of the opposite direction to … what was that … “3D printers, driverless cars, nanotech” etc.

    10. Michael Kennedy Says:

      “In both those book links the Kindle digital copy is more expensive than any hard copy.”

      That’s how markets work. If you are worried about price, buy the cheapest. If convenience matters, and it does to me, the electronic version is often better, especially for travel, etc.

      There are thousands of cheap Kindle books available.

    11. Charles Cameron (hipbone) Says:

      Looking forward to your forthcoming book with keen anticipation…

    12. PenGun Says:

      “That’s how markets work. If you are worried about price, buy the cheapest. If convenience matters, and it does to me, the electronic version is often better, especially for travel, etc.”

      That is not at all how markets work. That’s how the Amazon monopoly works. The cost for a kindle book are minimal and there is no comparison to a real book in cost to the seller. An actual market reflects that in the price.

    13. Mrs. Davis Says:

      Excellent demonstration of economic illiteracy by PenGun.

      Price has nothing to do with cost. Price has to do, as Michael Kennedy clearly demonstrates, with value to the customer. If price (value to the customer) exceeds cost, the provider gets to stay in business. If price (value to the customer) is less than cost, the provider goes out of business. That’s how markets work. Consumers decide. This is true even for government entities, little as they may understand, as the USPS has demonstrated.

      Another aspect of cost our Keynesian may have neglected to consider is the cost of physical warehouse space. Maybe Amazon needs it for other faster moving books so they dropped the price to free the space. As they say in the grocery business, sell it or smell it.

    14. PenGun Says:

      If there was competition to Amazon you might have a point. They, as they have a monopoly, get to price stuff at the ‘whatever we can get away with’ point.

      Only a fool would pay more for a Kindle copy than a real book, but that is just my opinion.

    15. Lexington Green Says:

      PenGun, the Amazon “monopoly” likely won’t last long. Agreed that the cost of the second and all subsequent ebooks is close to zero. We will eventually see price competition. And price competition will drive price to fixed cost, per basic microeconomics, while sellers try to add features and new benefits to justify higher prices.

      As to any larger lesson about the future, all the Amazon case tells us is that there is money to be made by being the first big mover with a new type of product, even if a monopoly is not sustainable in the longer run. This is a familiar pattern. Over time as major new technology becomes commonplace the legal and political order adapt to them. We expect comparatively large, rapid changes in the years ahead. It will be disruptive, but we are optimistic about the longer term outcome.

    16. Mrs. Davis Says:

      No monopoly at Amazon. You have a choice. I that wasn’t the book you were referencing, browse the site. They have a lot. They’re called the competition.

    17. Mrs. Davis Says:

      Only a fool would pay more for a Kindle copy than a real book, but that is just my opinion.

      An opinion born of a mind centered on itself. I happen to agree that I would not pay more for a Kindle than a physical book. But I would not condemn those who do as fools. They simply have a different set of preferences than I. And theirs are neither better nor worse than my own, simply different. And the beauty of the free market is that it allows us all to resolve those preferences voluntarily.

      Things only start to go bad when some people think they know what is good for everybody else and seek to impose their will opinions on them. Some were called Puritans. They are called other things, too.

    18. Gringo Says:

      Re an Amazon “monopoly:” There are a lot of choices for obtaining books. In the last 6 months I have obtained music or books- both hard copy and digital copy- from the following places.

      1)B&N physical store.
      2)Local used book store where, if you go there a lot you can find some pretty good books for $1-$3, or CD box sets for $1-$2/CD. Not every locale has such a good used book store, so I count myself fortunate.
      3) B&N website.
      4) Amazon website.
      5) Project Gutenberg website and other such “free” sources.

      A lot of it has to do with how fast you want it. I wanted a particular hardbound book ASAP which I knew wasn’t at the used book store, so I purchased it via Amazon- $5 counting mailing cost. Similarly, I looked for and found a given book at the local used book store,to hand over to my sister ASAP.

      Amazon doesn’t yet have a monopoly, though if B&N doesn’t improve its website, it may eventually have one. Browsing is more difficult on the B&N website. Much more difficult.

      In many cases the e-book price is set by the publisher, especially when the price is high. A good way to check that is to see what the e-book price is at both Amazon and B&N. If the price is both high and the same at both places, odds are the price has been set by the publisher.

      I would believe that Amazon would prefer selling four e-books @$5 than one hard copy book for $20. Inventory cost is minimal for an e-book, for example.

    19. Mike K Says:

      The Kindle version is much more convenient for me to read but I use it almost exclusively for fiction or for books like that of Conrad, which I know I will read only once. A couple of years ago, I bought the Kindle version of The Innovator’s Prescription. I found the Kindle version difficult to read as I kept wanting to flip back to earlier sections. I then bought the hardcover copy.

      I’m currently reading a biography of Feynman on Kindle and just finished Coolidge in Hardcover. It depends on the book.

    20. Lexington Green Says:

      There is collusion on pricing of ebooks. There is an oligopoly and if they are not actually price fixing, they are maintaining price discipline, and gaining monopoly profits. This will change. Hard competition will drive price to cost. Eventually.

    21. David Foster Says:

      If I’m going on a long trip and want to take quite a few books along, the Kindle form is more convenient than the physical books, and hence value pricing of the Kindle version could justify a higher price (assuming that there are a lot of people who plan to read that particular book while traveling.) A higher Kindle-format price is unlikely to be sustainable, though, because sooner or later competitors will exploit the lower cost of nonphysical delivery on any of many tablet objects.

      Another reason why a Kindle (or other electronic) format might have a higher value and hence justify a higher price is for books that readers REALLY don’t want people around them to know that they’re reading. I’ve heard that this is the case for some of the steamier romance novels (although I’ve seen plenty of women unabashedly reading hard-copy Fifty Shades of Grey in public places.)

    22. Lexington Green Says:

      David, under perfect competition, price is driven to cost. That is a theoretical minimum. The few vendors of these products have pricing power because they are implicitly agreeing to not aggressively compete on price. (I say implicitly because I cannot accuse anyone of price fixing, which is a crime, unless I had personal knowledge that they were — and I do not.) If that happened, the non-physical nature of the “second-and-all-subsequent” products would push prices down. Drug companies face the same problem, and when their patent monopoly ends the commodity sale of their products is not profitable, or barely profitable. Agreed there are utilitarian factors that add value, as you note, but the tendency under even imperfect competition is for prices to be driven to cost. My guess is we will see ebooks become less expensive, and that efforts to maintain pricing will involve adding special additional features to the ebooks, added price for added features. Hardcopies may become luxury items. Or print-on-demand may improve and make production of nice quality physical books a lot cheaper. Or both. I don’t have a good idea of how that side will play out. I still like hardcopies of books more than electronic ones if I want to actually read it all the way through. But I am not adept with the features that allow you to annotate and highlight and add links and do other things with ebook for research and for later writing. This in effect customizes the ebook to the user, and it is clearly the wave of the future — but I would have to make an effort to learn how to do it, where younger people use these things as normal and “given.”

    23. Jonathan Says:

      Is there collusion or competition? If there’s collusion and yet prices keep declining then the collusion is irrelevant. That said, I doubt there’s collusion. Amazon wants to keep prices up but will probably lower them over time as they face more competition. There are more competitors all the time and they will want to gain business by pricing ebooks lower than Amazon does. For the moment Amazon has an advantage because so many prospective ebook customers already have Amazon accounts, and therefore it’s much easier for them to buy ebooks on Amazon than elsewhere.

    24. Lexington Green Says:

      There aren’t many competitors, so they can maintain price discipline without actually and unlawfully price fixing. Prices aren”t falling much for ebooks. We need a rogue player to tip over the gravy train. Selling something you reproduce for free for fifteen dollars must be extremely lucrative.

    25. Jonathan Says:

      I don’t think your assumptions are correct. You don’t need many competitors to have effective price competition. Indeed the mere threat of competition is often enough to keep a dominant industry incumbent in line.

      Also, increasingly, conventional publishers are competing with burgeoning self-publishing alternatives for authors. If publishers are systematically overpricing books it’s going to be bad for authors, and on the margin popular authors are going to abandon old-line publishers.

    26. Mike K Says:

      ““That’s how markets work. If you are worried about price, buy the cheapest. If convenience matters, and it does to me, the electronic version is often better, especially for travel, etc.”

      “That is not at all how markets work. That’s how the Amazon monopoly works. The cost for a kindle book are minimal and there is no comparison to a real book in cost to the seller. An actual market reflects that in the price.”

      I would like to complement PenGun on his concise description of the Marxist theory of value. The price should reflect the labor involved, not the value the buyer places on the product and is willing to pay.

      I think GM currently operates under that theory. We will see how that works out.

    27. Lexington Green Says:

      It is not an assumption it’s an observation. The second and later books are virtually cost less to the seller, and price is pushed to cost when there is competition. The norm in many markets is implicit collusion by the participants practicing price discipline. The absolute last thing any business wants is price competition. It’s absolutely clear that there is restraint on competition here, most likely implicit collusion, which is normal with so few major sellers. This was type of oligopoly pricing was in second quarter Econ at U of C, undergrad. What we see with Amazon is right out if the textbook.

    28. Jonathan Says:

      There are established authors who have dropped their publishers and now self-publish, and who offer their ebooks at $2.99 or $5.99 or some other price that’s lower than what their publishers would have charged. If you were correct then those authors would be able to clean up by self-publishing and keeping their prices high, but clearly they are unable to do this. Therefore this looks to me to be a competitive market where each participant is trying to maximize his returns and different kinds of participants do better at different price levels.

    29. Michael Kennedy Says:

      When I was doing my own printing and fulfillment of my self published history of medicine, Amazon discounted the price about 20% and paid me about half the list price. That was pretty standard for other wholesalers, so no surprise. About five years ago, after I had sold out my last printing and it was time to order another, I decided to turn the whole thing over to Amazon and their POD branch. Since then, they have stopped discounting and it is sold for the same retail price as before, although it is now softcover. I get about ten dollars a copy from them and the volume hasn’t changed much, around 40 to 50 copies a month. It peaks in December and June, no doubt gift season. Other than checking my bank account, I have nothing to do with it. A big improvement.

    30. Michael Kennedy Says:

      Andy McCarthy, at NRO, found that eBooks did not fill the bill for all who were interested.

      On Tuesday, the dead-tree version of Spring Fever: The Illusion of Islamic Democracy, my book on the subject, finally hit the bookstores after previously being available only as an e-book. Despite the digital age, people still love their paperbacks, so I’ve had the good fortune to spend this week talking about it.

      I don’t the price difference. It’s almost two dollars more for the paperback.