Subject: Re: How accurate is Metcalfe's law? (Was: Ximian software)
From: "Stephen J. Turnbull" <stephen@xemacs.org>
Date: 04 Jan 2002 11:05:39 +0900

>>>>> "Ben" == Ben Tilly <Ben_Tilly@trepp.com> writes:

    Ben> (Of course energy spent only indicates that it was worth at
    Ben> least that much.  It may have been worth far more.  Find me a
    Ben> way to estimate that gap though. :-)

It's called "econometrics," and it's the bread and butter of high-tech
marketing and the bottom quartile of economics graduate students.

    Ben> While it is possible for individual connections to be worth a
    Ben> thousand dollars per hour to the recipient, I think most will
    Ben> agree that, barring inflation, it will never happen that the
    Ben> average person will exceed $1000/hour of derived value from
    Ben> time spent connecting.

This is quite possibly wrong.  It is certainly arguable that real
productivity growth will run into a barrier at some point.  However,
it seems quite plausible to me that someday the average GDP per person
in some economies will reach $2,000,000/year.  (Assuming that the US
is currently $40,000, at 1%/year real growth rate that takes less than
400 years.  In the New Economy (5%/annum), only 80 years.  :-)

Now, I ask you: with productivity increasing at that rate, how much of
that $2,000,000 is likely to come from tangibles like cars?  The great
bulk has to be intangibles, ie, Internet-connectivity-based.  And a
couple years later, your $1000/hour figure is ancient history.

(Note, the above argument uses the following Lemma: "Necessity is the
Mother of Invention."  Corollary: Anything necessary to make me right
will be invented.  ;-)


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