Bryan Caplan  

Great Out the Gate?

Morning WaPo... Corporate Profits...
At the Kauffman Foundation econ bloggers' conference, Tyler Cowen repeated his novel argument about CPI bias.  As he puts it in The Great Stagnation:
In fact, income measures are most likely to understate growth during times when a lot of new goods are introduced into the marketplace or made more widely available, such as during 1870-1973.  Thinking carefully about measurement biases probably means that earlier decades had even stronger growth, relative to what the diagram shows, compared to the post-1973 period.  It means that our recent relative performance is in reality even worse.
He did not, however, answer my critique of his novel argument: When products are first introduced, they have little economic benefit; it's the subsequent enhancement that really counts:
Merely bringing new inventions into existence typically has little economic benefit; the subsequent enhancement is where most of the value lies.  This is obviously true for the computer; I had a VIC20 in the early eighties that wasn't even a workable word processor.  But the same holds for older inventions.

Take the car.  The earliest internal combustion cars, introduced in the late 19th century, were just toys for millionaires.  It took decades of gradual improvements to make them a viable form of transportation, and decades more to make them reasonably reliable and safe.  The same goes for airplanes.  Thirty years after the Wright brothers, trains and ships dominated long-distance travel.  Planes were still too bumpy and dangerous for the general public to stomach.
But why on earth would people switch to new technologies while they remain inferior to old technologies?  Part of the answer is selection: If a new technology beats old technologies for any purpose, a few people will switch.  But the main reason is probably just early adopter syndrome - the desire to start using the technology of the future long before it's ready.  We've all seen it.

My rule that product enhancement dominates mere product existence works well for a long list of standard inventions: cars, airplanes, phones, movies, television, and computers for starters.  So now I'm looking for counter-examples.  Name inventions that were "great out the gate" - that were immediately clear improvements over preceding technologies. 

P.S. The original iPhone and iPad seem like plausible counter-examples.  But I'm too old to judge.  Do they qualify?

Comments and Sharing

COMMENTS (23 to date)
Doug writes:

Antibiotics. In fact the longer in use, the worse they get.

JA writes:

iPhone and iPad definitely do not count as great out of the gate. The iphone was just an improvement on the Palm, and the iPad is just a big iphone.

The printing press might be a candidate. The wagon, freezer, and cell phone might also be candidates.

OneEyedMan writes:

The iPhone built on decades of PDA and cellular phone technology. Even the integration of the two was at least 5 years old at the time.

It really depends on what you count. Is movable type a "out of the gate" useful innovation or do you consider a minor advancement on the fixed type printing process?

aretae writes:

Not even close.

Oneeyedman nailed it. I used a touchscreen on a computer in '94, a blackberry in the early '00s, and even smartphones with touchscreens well before the iphone. The iphone was the kind of improvement you're talking about...slow, gradual, incremental.

Bjorn writes:

Also any computer big or small is only as good as the software in it and there iOS4.3 is standing on the shulders of giants.

Tracy W writes:

Does printing count? At least from the point of view of people who think the more books the better, as opposed to the point of view of people who thought that only the elite should get to read books. This is a genuine question, I don't know.

I have been told that people bought computers so as to be able to have spreadsheets.

How about Gore-tex raincoats? Hiking books from the 1980s talk about a raincoat as something you only wear when it's better to be warm and damp (from condensation inside the coat) than cold and damp. Nowadays I use my Gore-tex raincoat as a wind breaker as well.

Following Doug's medical choice - asprin? And the smallpox vaccine?

Timothy writes:

The nuclear bomb.

Jody writes:

Ironside frigates

Shane writes:

Would inflatable tyres count? John Boyd Dunlop invented the first inflatable tyres in 1887 and two years later a cyclist called Willie Hume used them to win a cycling race.

Wayne writes:

Invention: The garbage disposal.

Prior Tech: People had to manually separate solid food scraps from meal waste sent down drains. In the 1930's and 1940's most of US waste management infrastructure couldn't support solid food.

Subsequent Tech: As far as I can tell, the garbage disposal has stayed the same for the last 80 years.

*The wiki article is a good read.

Steve Sailer writes:


mdb writes:

Whole bunch in the vein of antibiotics, pesticides would be another. I would include anything designed to kill in this category (military weapons systems as well). Evolution takes a heavy toll on this technology.

I wouldn't include the iPhone and iPad, there were many not so successful incarnations of the technology before - the iPhone and iPad were the first to be successful.

Sam Wilson writes:

Movable Type
NPN Transistor

Of course, you might still look at these as product improvements. The telegraph was an improvement over horse-carried mail, moveable type over manual illumination, transistors over tubes, etc. But from a certain point of view, everything is a product improvement. We don't do anything fundamentally different than our troglodyte ancestors.

Brian Clendinen writes:

Maybe not the second it was released but after a year or two Spreedsheets. Web Browser. Whiteout.

christopher writes:

I was the first person I knew to own a car cd-mp3 player (@ 1999-2000 timeframe). This car sterio accepted data cds with mp3s. This was a hugh improvement over cd-players with 12 songs per cd (as opposed to mp3 cd's 200 songs).
My latest aquision is a dvd-mp3 car sterio. Neither of these have really caught on in the public though.

John writes:

I's still trying to figure out how to measure the original benefit versus the enhancement as well as how to separate out what's enhancement and what's a complementary good.

Example, the computer is hardware with BIOS and OS. On it's own that doesn't do a whole lot. The software is more what the user values.

Next, is the measurement the marginal change or the total surplus?

Joshua Lyle writes:

Moveable type is a refinement (albeit a significant one) of woodblock printing, which was extant when Gutenberg developed his metal-type technology. It did have immediate benefits, but my understanding is that it required further evolutionary refinements co-occuring with ongoing development of mass-literacy over decades to really kick in a big effect.

michael writes:

Come on, people.

Toilet paper!

I can't be the first to realize that one...

dullgeek writes:

As someone with a fairly long (but shallow) history in open source software, new projects in the OSS world have to have some minimal utility. They can't just be new projects to succeed. They have to draw a balance between having utility out of the gate and the ability to enhance that utility.

Eric Raymond describes this reasonably well in his paper, "The Cathedral and the Bazaar". He calls it "plausible promise". I wonder if there is some analog that applies outside of the OSS world.

If that's the case, I suspect that new products don't have to be "great" out of the gate. But neither can the be complete crap.

Even the original iPhone was considered pretty limited in its functionality compared to today's standards. 3rd Party Applications were *not* originally available. So even the iPhone came out with some significant limitations that were pretty widely recognized, only to be enhanced later. However, it didn't come out with nothing. It introduced the world to capacitive touchscreens and virtual keyboards and autocorrect and a real mobile web browser. It drew a good balance between innovation and enhancement. And it worked.

Pierre writes:

I don't know if the iPhone and iPad count. The iPhone was the iPod touch with telephone services built in, or the iPod touch was the proto-iPhone before Apple got the engineering right to make it into a phone. Either way, the iPhone itself could plausibly be described as an enhancement to existing technology. The iPad is an enhancement of the tablet idea, which has been around for a while. Touchscreen computing has been around a lot longer than the iPhone or the iPad, including in the consumer space. HP had the TouchSmart before the iPad was launched, for instance.


PrometheeFeu writes:

I am not going to bother giving any examples. I think some exist but your point is I think fundamentally true. More importantly, it is a huge argument against patents. Let's say I patent my original invention. Suddenly, nobody has any incentive to work on that progressive improvement you are talking about since I am the only one who could produce the base product anyways.

Cyberike writes:

The music CD. After buying and listening to my first music CD, I stopped buying or even listening to my albums almost instantly.

Later, recordable CD-ROMs replaced the casette tape.

The same thing happened again in the early 2000's with MP3 technology. I literally stopped listening to my CD's almost instantly. I didn't stop buying them, of course.

Flash drives replaced the floppy, DVD replaced the VCR, and now NetFlix is replacing the DVD. These were all better technologies the instant they were created, although you could argue they took a little while to gain critical mass.

Yngvar writes:

The Hall-Héroult process of aluminium production.

Comments for this entry have been closed
Return to top