Bruce Charlton poses a rather important question.

Whatever happened to the massive productivity boost which much (surely?) have been the result of the internet?

Because (surely?) the internet must have led to an unequalled, world historical boost in productivity?

A decade ago people all over the place were saying confidently that the economic effect of the internet would outstrip the effects seen by the invention of railways and telecommunications, and that new synergies from fast and universal communication would generate a society of massive capability (a huge step-up like the effect of the population concentration of the first cities, or the nation state).

Science and technology would be accelerated qualitatively by the speed of access to the scholarly literature, rapid and universal sharing of methods, critique and results, international collaborations…

That was the theory.

Yet economic growth since the internet came has been, well – ahem! – very modest…

Indeed, the current ‘credit crunch’ recession revealed that much of what economists had thought was internet-produced growth in productivity, was in fact a progressive increase in borrowing. Continue reading →