Micael: Don't know if you are checking your Chico State e-mail So I'll send a further comment here. Thank you for a very enjoyable talk.
Re the declining price of technology. There was a time in the mid to late 80's when I was bum-fuzzled by the conventional wisdom that talked about how the price of computers was plummeting with innovation. This seemed cock-eyed to me when I observed that no matter what the newest chip was called, your basic pc cost $1800. That was true of the 8088 Kaypro, and its successor, the Peanut. I recall The Dak bundle which put an incredible amount of software into a 286 with monitor, modem, printer and extra memory (was it 256Kb? -- a large number then!) I bought one. It was flawed so I returned it. Dak replaced it with a 386 with the same hardware and software and twice the memory but for the same amount of money. Point (finally) Yes the price of a 286 had declined -- but the improved 386 appeared at the same price point. Marketing. You cited Marx wondering if capital equipment costs ever were recovered. I once owned a miniscule heavy industry -- a nail factory making copper fastenings for wooden boat builders. The principle capital equipment was an Atlas #2 Nail maker built in Connecticut probably in the thirties or forties. It was a ton of cast iron wheels, cams and levers which spat out something like 60 pieces a minute. By 1976 when I bought it that machine was too old and slow for the trade which had moved to Brazil and Taiwan. I paid basically scrap iron prices for it. The original working parts had all been replaced by sturdy --and expensive-- machined and hardened steel. For the original parts to wear to the point of needing replacement meant a lot of production. The marginal cost of producing a 6d box nail has always been smaller than the thickness of a gnat's eye lash with this machine. But if USS Steel (or whoever the original owner was) felt it was worth repairing rather than scraping and replacing, I wonder if they considered their original investment recovered? or was it merely the banker patching and extracting rather than innovating?
Micael: Continued because I was too voluble for Google. You cited Marx wondering if capital equipment costs ever were recovered. I once owned a miniscule heavy industry -- a nail factory making copper fastenings for wooden boat builders. The principle capital equipment was an Atlas #2 Nail maker built in Connecticut probably in the thirties or forties. It was a ton of cast iron wheels, cams and levers which spat out something like 60 pieces a minute. By 1976 when I bought it that machine was too old and slow for the trade which had moved to Brazil and Taiwan. I paid basically scrap iron prices for it. The original working parts had all been replaced by sturdy --and expensive-- machined and hardened steel. For the original parts to wear to the point of needing replacement meant a lot of production. The marginal cost of producing a 6d box nail has always been smaller than the thickness of a gnat's eye lash with this machine. But if USS Steel (or whoever the original owner was) felt it was worth repairing rather than scraping and replacing, I wonder if they considered their original investment recovered? or was it merely the banker patching and extracting rather than innovating?
The text of the link was right, but the url behind it is wrong. Just cut and paste the URL above in your browser, don't click on it. Or click the one below.
Michael....
ReplyDeleteI tried to view the video but could not get to it. I don't know why, but I kept getting a broken link message.
Dan
Micael:
ReplyDeleteDon't know if you are checking your Chico State e-mail So I'll send a further comment here.
Thank you for a very enjoyable talk.
Re the declining price of technology. There was a time in the mid to late 80's when I was bum-fuzzled by the conventional wisdom that talked about how the price of computers was plummeting with innovation. This seemed cock-eyed to me when I observed that no matter what the newest chip was called, your basic pc cost $1800. That was true of the 8088 Kaypro, and its successor, the Peanut. I recall The Dak bundle which put an incredible amount of software into a 286 with monitor, modem, printer and extra memory (was it 256Kb? -- a large number then!) I bought one. It was flawed so I returned it. Dak replaced it with a 386 with the same hardware and software and twice the memory but for the same amount of money.
Point (finally) Yes the price of a 286 had declined -- but the improved 386 appeared at the same price point. Marketing.
You cited Marx wondering if capital equipment costs ever were recovered. I once owned a miniscule heavy industry -- a nail factory making copper fastenings for wooden boat builders. The principle capital equipment was an Atlas #2 Nail maker built in Connecticut probably in the thirties or forties. It was a ton of cast iron wheels, cams and levers which spat out something like 60 pieces a minute. By 1976 when I bought it that machine was too old and slow for the trade which had moved to Brazil and Taiwan. I paid basically scrap iron prices for it. The original working parts had all been replaced by sturdy --and expensive-- machined and hardened steel. For the original parts to wear to the point of needing replacement meant a lot of production. The marginal cost of producing a 6d box nail has always been smaller than the thickness of a gnat's eye lash with this machine. But if USS Steel (or whoever the original owner was) felt it was worth repairing rather than scraping and replacing, I wonder if they considered their original investment recovered? or was it merely the banker patching and extracting rather than innovating?
For more on the making of nails see my Tales from the Nailery"
--ml
Micael:
ReplyDeleteContinued because I was too voluble for Google.
You cited Marx wondering if capital equipment costs ever were recovered. I once owned a miniscule heavy industry -- a nail factory making copper fastenings for wooden boat builders. The principle capital equipment was an Atlas #2 Nail maker built in Connecticut probably in the thirties or forties. It was a ton of cast iron wheels, cams and levers which spat out something like 60 pieces a minute. By 1976 when I bought it that machine was too old and slow for the trade which had moved to Brazil and Taiwan. I paid basically scrap iron prices for it. The original working parts had all been replaced by sturdy --and expensive-- machined and hardened steel. For the original parts to wear to the point of needing replacement meant a lot of production. The marginal cost of producing a 6d box nail has always been smaller than the thickness of a gnat's eye lash with this machine. But if USS Steel (or whoever the original owner was) felt it was worth repairing rather than scraping and replacing, I wonder if they considered their original investment recovered? or was it merely the banker patching and extracting rather than innovating?
For more on the making of nails see my Tales from the Nailery"
--ml
The text of the link was right, but the url behind it is wrong. Just cut and paste the URL above in your browser, don't click on it. Or click the one below.
ReplyDeleteOr this:
http://www.ustream.tv/channel/unsettling-economics
Here is an easier link
ReplyDeletehttp://www.ustream.tv/recorded/8702391
Also, thank you Martin.