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M A R C H  1 9 9 8

  • The Computer and the Economy
  • Classical Appeal
  • Advice & Consent

    The Computer and the Economy

    I appreciate that Alan S. Blinder and Richard E. Quandt ("The Computer and the Economy," December Atlantic) are not trying to uncover all the ways in which government productivity figures miss or misrepresent actual productivity. Nonetheless, one characteristic of such statistics is that they will always overstate productivity gains, and will do so increasingly as more of the gross domestic product is produced through electronic means.

    Product and productivity are typically overstated because they are confined to monetized accounting within businesses. Surely it is well understood by now that businesses externalize costs not by accident but by strategy. Send waste into public water or public air, get the government to build the transportation infrastructure required to move employees from home to work, and so forth. The real net product (value added) is the company's apparent product less all real costs, but to the extent that the company succeeds in passing such costs on to others, its net product appears artificially large.

    Two examples of work being performed outside the company -- and thus of "productivity" appearing larger than it is because of the failure to measure all the work done in producing a product -- are self-service gasoline stations and boxed, build-it-at-home furniture. It is not an argument against either of these innovations, both of which I admire, to point out that some of the production has been passed out of the firm, to the customer. As long as the customer is not another business, his work is not recorded. Productivity (the output per unit of input) is exaggerated by undercounting the inputs.

    The automated teller machine is another example. Customers now do the key entry formerly done by bank employees. It always pays the firm to externalize its costs, even if it does so to another firm. So now parcel-delivery companies have convinced shippers that it is to their advantage to track parcels by computer, thus sending the labor cost of that tracking from the delivery company to the shipping company. The productivity gain to the delivery company may not have shown up in the data yet, because of the cost of establishing the system. There may ultimately be some overall productivity gain (why have two employees involved, one of them waiting on the telephone, when one can do it?), but it will not be as large as the calculation correctly made by the delivery company concerning its productivity. Firms computerize, despite little sign of productivity increases in overall statistics, because they are driven by different data, internal data, showing that their productivity is increased.

    These are small examples, but as we spend more time online transferring funds from savings to checking accounts, buying financial or tangible goods, or just being entertained, two statistical phenomena are occurring: consumer time is uncounted, thus making overall productivity appear greater than it is; and time is being taken by employees of customer companies that was formerly taken by employees of producing companies. Thus individual firms get to make decisions that are not as good as their accounting suggests, because they pass costs on to others; and some of these others, not counted as producers, are lost to productivity statistics. Blinder and Quandt's statement that "labor input is measured accurately" misses the impact of computerization, which is often to pass labor input out of the firm. In the future there will be fewer bookkeepers and fewer data-entry clerks, as data entry becomes the customer's task.

    Stephan Michelson
    LongBranch Research Associates
    Takoma Park, Md.

    Classical Appeal

    I read with interest David Schiff's article "Classical Appeal" (August Atlantic) and the letters and author's response in the December issue. As someone whose musical taste was defined by rock-and-roll (and who would presumably therefore be part of the vast untapped audience that orchestras wish to attract), I have to say I think that orchestra programmers are way off base when they assume that the way to draw more devoted listeners is to offer pops programs or to trot out again the same handful of "proven" crowd pleasers. Instead, they could seek out fans of other musical genres who have, as one writer put it, "the same aesthetic expectations as the concert audience."

    With few exceptions, the most satisfying concert experiences for me have been performances of twentieth-century works: Bartók, Lutoslawski, Martinu, Paulus, Shostakovich, Varese -- music that to me is close in spirit to iconoclastic, uncompromising rock-and-roll along the lines of, say, Sonic Youth or Hüsker Dü, or maybe jazz by Thelonious Monk; music that demands and rewards a fair amount of effort on the part of the listener. Maybe this is a more promising "crossover" path: from challenging music to challenging music. Get them hooked on Hindemith and eventually they'll learn to appreciate Brahms and Mozart.

    Gregory M. Donley
    Cleveland Heights, Ohio

    My old friend Henry Martin makes a cogent response in your December Letters column to David Schiff's dismay over orchestras' selling their classical souls to the popular devil. Martin somewhat overstates his case, however, in three ways.

    1. Even granted that the masterpieces of Western concert music have been overperformed and overrecorded, it does not follow that "there is no point" in continuing to play them. After all, they are masterpieces, which suggests an inexhaustibility of sorts, even if they can be trivialized in the hands of a mediocre interpreter. Modern theaters still perform Shakespeare, Molière, and Sophocles. Why is it so unthinkable that orchestras would do the same -- play the older musical monuments with attention, insight, and passion, within a context that includes many more-recent masterpieces?

    2. I'm not sure the stylistic divide is as simple as the one Martin presents -- namely, that the public rejected contemporary music exactly when that music embraced atonality. After all, Schoenberg's 5 Orchestra Pieces (Op. 16), Berg's 3 Orchestra Pieces (Op. 6), Bartók's Miraculous Mandarin, and Stravinsky's Le Sacre du printemps all tend to be received well in concerts by orchestras that can afford to play them. (One could, of course, make a strong case that several of these pieces are not really atonal -- which underscores the problem of using that term as an absolute criterion, since few will agree on which piece it applies to.) Surely the blame can be more persuasively ascribed to arrogance -- to some recent composers' indifference to the preferences and opinions of their audiences, a direct descendant of the nineteenth-century Romantic delusion of the superior but unappreciated artist.

    3. Martin (a distinguished scholar of jazz) naturally identifies popular non- electric styles as providing a way of revitalizing the orchestral concert repertoire. I would simply reply that they're not the only way. The language of tonality is far from used up, even within non-popular idioms. Pieces such as Rachmaninoff's Symphonic Dances, Prokofiev's Romeo and Juliet, and Britten's Variations on a Theme of Frank Bridge (all written within a few years of 1940) display unique and sophisticated tonal languages that are all pregnant with developmental possibilities. Unfortunately, in training young composers we don't often show them the fruitfulness of this music, because we have such a poor grasp of twentieth-century tonal harmony -- and lots of remarkable music is dismissed as "conservative," "sentimental," or "recidivist," to the detriment of composers, audience, and orchestras alike.

    Charles J. Smith
    Associate Professor of Music Theory
    University of Buffalo
    Buffalo, N.Y.

    Advice & Consent

    In their reply to my essay Do We Consume Too Much? Paul Ehrlich and his co-authors ("No Middle Way on the Environment," December Atlantic) cite the economist James Meade's assessment that "pollution and the exhaustion of natural resources depend and will depend in the future on the absolute level of total economic activity" in the world. The principle that economic growth or prosperity must lead to resource depletion and ecological degradation, an article of faith for Ehrlich, is simply false. The evidence overwhelmingly shows that people in poor societies who hunt and gather for resources can denude the landscape, while wealthy nations can deploy technologies that produce food sustainably, control pollution, and preserve nature. The "World Scientists' Warning to Humanity," which my critics invoke, does not say that the world must produce and consume less overall, only that it must produce and consume differently. It declares, "We must, for example, move away from fossil fuels to more benign, inexhaustible energy sources to cut greenhouse gas emissions and the pollution of our air and water."

    I did not argue, as my critics charge, that "concern over the depletion of natural resources and the impact of their current levels of use is misplaced." Rather, like the "World Scientists," I proposed that society should respond to this concern by adopting technologies now available or plainly in view that can sustain greater global economic activity without imperiling natural systems or depleting natural resources.

    Ehrlich and his colleagues argue that a series of misconceptions underlies my thesis. First, they say, I fail to understand that since natural resources are finite, the expansion of the global economy must inevitably lead to depletion and scarcity. In their view, pollution and depletion vary directly with the absolute level of global economic activity. In other writings Ehrlich expresses this assumption in a formula that measures adverse environmental impact as a function of population, affluence, and technology. Because technology appears in the numerator of Ehrlich's equation, it can only increase the bad impacts of population and affluence. Yet smart and environment-friendly technology should appear in the denominator, since it diminishes these impacts. If the world adopts cleaner and smarter technologies (for example, more-efficient cars), it does not have to use more resources to produce more of the things people want. The enormous gains in economic activity associated with the software industry, to take another example, did not create a lot of pollution or exhaust resources.

    My second "misconception" is to believe that aesthetic and moral arguments, such as those associated with the preservationist John Muir, provide the most persuasive reasons for protecting old-growth forests, wetlands, and endangered species. Of course, no one believes that we conserve raw materials, such as copper ore, for aesthetic reasons. I argued that many of nature's most beautiful and expressive objects -- an ancient stand of redwoods, for instance, or a rare and magnificent species of bird -- possess far greater intrinsic value than economic or instrumental value. We are more likely to protect these objects if we value them for their own sake rather than for the ways we use them.

    Ehrlich and colleagues, while acknowledging aesthetic, religious, and moral concerns, believe that I misconceive how nature works. Referring to Biosphere 2 -- a failed attempt to replicate natural cycles artificially -- these scientists point out how much better-designed are the "conditions and processes through which natural ecosystems, and the species that are a part of them, sustain and fulfill human life." Apparently my critics would rule out virtually everything human beings have done to feed, clothe, and shelter themselves -- not just farming but even hunting and gathering -- since any change may alter nature's delicate and unknown "conditions and processes" and therefore may rend its "intricate and little-explored" design. Ehrlich and colleagues analogize the extinction of a rare gopher, butterfly, or lousewort, no matter how little it affects surroundings, to "popping the rivets out of the airplane your children must fly in." They caution, "Until science can say which species are essential in the long term, we exterminate any at our peril." We need more than vague references to nature's equilibrious and beneficent design, however, to argue against particular proposals that make apparent economic sense -- for example, to convert the habitat of an endangered beetle or badger to a university, day-care center, or hospital.

    Third, Ehrlich and his co-authors call to my attention political and social obstacles to a quick transition to efficient technologies and renewable resources. But like my critics, I deplored what my essay calls "lemon socialism." "A vast array of subsidies and barriers to trade," I wrote, "protects politically favored technologies, however inefficient, dangerous, filthy, or obsolete." I also quoted the environmental consultant Michael Brower: "At heart, the major obstacles standing in the way are not technical in nature, but concern the laws, regulations, incentives, public attitudes, and other factors that make up the energy market." Rather than overlooking such factors, my essay tried to show that it is precisely these obstacles -- and not the purported existence of absolute limits to the earth's "carrying capacity" -- that ought to be the focus of environmental policy.

    Fourth, to refute my "misconception" that the North doesn't exploit the resources of the South, Ehrlich and colleagues note that "the rich-poor gap" is increasing. I wrote, "What is worsening is the discrepancy in income between the wealthy and the poor." The income gap between Silicon Valley billionaires and starving Hutu warriors, however, did not arise because one group exploited the natural resources of the other. I intended to refute the persistent idea that the world works on the colonial system in which rich countries import raw materials from poor ones and ship back finished goods. Today rich nations exclude and displace from world trade the commodities that poor countries offer for sale.

    How does Ehrlich propose to rectify the "rich-poor" gap? He rules out "the hope that development can greatly increase the size of the economic pie and pull many more people out of poverty." This "basically ... humane idea," he has written, is "made insane by the constraints nature places on human activity." If the global economy has reached its limit -- if nature shuts the door on economic growth -- then any gain the poor make must come at the expense of the rich. In this zero-sum game we must lop off the peaks to fill in the valleys. It may be a hard political sell to get the rich countries to adopt the policy I favor, which is to transfer to poor countries efficient and nonpolluting technologies. It would be an even harder sell, however, to get the rich nations to divide their wealth equally with poorer ones.

    Mark Sagoff
    University of Maryland
    College Park, Md.

    Copyright © 1998 by The Atlantic Monthly Company. All rights reserved.
    The Atlantic Monthly; March 1998; Letters; Volume 281, No. 3; pages 6-12.

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