De Long on network economy

[Brad De Long]

>Rob Schaap wrote:
>
>>Information is demonstrably unlike other commodities - in terms of
>>implications for degrees of exploitation, market power, internal cleavages
>>in the working class, uneven development, cultural imperialism,
>>difficulties to do with externalities/artificial scarcity, distortions of
>>investment to do with difficulties in stock valuations, and generally
>>further blurring the liberal distinction between the public and the
>>private, and blurring some leftish ('workerist') distinctions between
>>'real' work and white-collar wankers.  I hold 'information economy' means
>>enough to warrant some investigation, anyway.
>
>How big is this info economy, anyway? There's a guy at the Philly 
>Fed, Leonard Nakamura, who fills their review with New Paradigm 
>stuff. He has a piece in the current issue 
><http://www.phil.frb.org/econ/br/brja99in.html> arguing that if you 
>add R&D to investment then the stock market isn't so overvalued and 
>investment performance looks a lot better....
>
>Doug

Yeah. But where are the profits going to come from? Profits from R&D 
arise only if the R&D allows you to set up some very strong barriers 
to entry behind which you can shelter. And I can't figure out what 
those are going to be...

Now Cisco and its ilk--maybe on up to the runners of server farms 
like Exodus and Inktomi--I don't think that they're overvalued. 
Selling cornmeal and pickaxes to the gold miners is good business...

Brad DeLong