Michael Perelman michael at
Wed Aug 16 16:37:33 PDT 2000

As you know, I am not an expert, but what I have seen is that, because of the enormous progress in hardware, software writers do not have to worry much about efficiency. For ordinary word processing work, Word is not an enormous advance over Wordstar, which ran on 64k (k not meg) machines. To compress a complex application into such a low capacity environment was a work of genius. So each generation of software contains more and more bloat.

What you do have are entirely new applications -- multimedia stuff, voice recognition, .... Of course, you cannot calculate efficiency gains when you more to a whole new category.

Doug Henwood wrote:

> I'm reading a lot of stuff on the alleged productivity boom for the
> New Economy book, and the enthusiasts are saying that official price
> indexes are greatly understating the improvement in software quality
> (i.e., the price indexes should be falling faster than they are). The
> hardware price indexes are falling at a 20-30% annual rate, and it's
> argued that software indexes should be more like that, and less like
> the 2-5% annual average drop the official numbers report.
> Since there are quite a few hardware and software experts on this
> list, I'm wondering what you all think. Is software quality improving
> vastly? And is the actual performance of computers - their output,
> whatever that is - really increasing at the kind of speed suggested
> by the price indexes (or, even more extravagantly, by Moore's law)?
> Or is a lot of the speed and power increase just taken up by bells
> and whistles?
> Doug

-- Michael Perelman Economics Department California State University Chico, CA 95929

Tel. 530-898-5321 E-Mail michael at

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