Monday, April 29, 2013

Paul, Robin, Barcelona

Be there or be square, in less than two months for Neil Kay's presentation;
This paper reviews the emergence of the QWERTY standard which in turn has lent its name to what Krugman and Wells (2006) describe as the “QWERTY problem: an inferior industry standard that has prevailed possibly because of historical accident”.  QWERTY was neither inefficient nor an accident, it was engineered by Christopher Latham Sholes in 1873 to be as near-optimal as possible given the technology and user needs of his day.  To achieve this, Sholes used a simple meta-rule that is obvious once articulated but which has not been publicly recognised until recently.  Despite its general adoption as “paradigm case” in the literature on path dependence, the analysis here finds the evidence is not consistent with QWERTY being a path dependent phenomenon, nor does QWERTY provide any basis for policy prescriptions based on common interpretations of what constitutes “the QWERTY problem”.  
Too bad thousands of impressionable economics students have already read the opposite in the Krugmans' textbook. As Kay puts it;
Krugman and Wells (2006), who in the glossary of their introductory economics textbook define; “QWERTY problem: an inferior industry standard that has prevailed possibly because of historical accident” (p. G-12)”. The QWERTY problem has as its basis “in the world of QWERTY one cannot trust markets to get it right” (Krugman, 1994, p.235).  Krugman and Wells’ (2006) advise their beginning economics students; “Government can play a useful role both in helping an industry establish a standard and helping it avoid getting trapped in an inferior standard known as the QWERTY problem” (p.536) and also “in principle government intervention might be useful in moving an industry to a superior standard” (p.534) .  
The Krugmans' confidence being in inverse proportion to the evidence they offer for the actual existence of the 'QWERTY problem'.

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