Sunday, April 21, 2013


No, not a label on cognac, but maybe one that should be affixed to a glass house from which the first economist without sin is allowed to cast stones.
So how is it that economists look so bad? The answer is that too many prominent economists chose, for one reason or another, to reject the existing model. Maybe they were just trying to score points by being different; maybe they were sucked in by the approbation of the VSPs, the rewards that came from telling important people what they wanted to hear. 
But, Very Serious Other People not only make errors telling important people what they wanted to hear (about purported market failures) that have had serious negative consequences, but don't exactly respond graciously when corrected.  In this case, the very same Paul Krugman who has been lecturing (hectoring?) other economists on his blog for several days.  Back to the future;
We  have  all  seen the way that  a good  story  that  happens  not to  be true can  take  on  a  life  of its  own, and I  realize  that they  [Stan Liebowitz and Steve Margolis] are  frustrated with  the  way that  an overstated version  of the  QWERTY  story  has spread  despite their efforts  to  stop it.  That  frustration  does not,  however, justify  the  hectoring  and unprofessional  tone  of their  piece or the  way  it  misrepresents  what those of  us  who  take  path  dependence seriously have said.
Well here's what Krugman did say about it in his best selling Peddling Prosperity;
What  conservatives believe in,  above all, is the effectiveness of  free markets as ways  to  organize economic  activity.... But what if the  collective result of  those  free  choices is  to lock  in  a bad  result?  What if we end  up  stuck with an  inferior technology....And what  if another  country  manages,  with  a little timely  government intervention,  to  "lock  in"  an  advantage  in  some major  industry-and thereby  lock  us out? No,  the  story  of the  QWERTY  keyboard  is  not just  a cute  piece of  trivia ... it is  a parable that opens  our eyes  to a whole different way of thinking  about economics  It  asserts that the  outcome  of  competition  often depends crucially  on  historical  accident....And  this  conclusion  is  fraught  with political  implications,  because  a sophisticated government may  try to make sure that the accidents of history  run  the way  it  wants.
Well, what if the path dependencists favorite example of being stuck with an inferior technology--the QWERTY keyboard--turns out to be a false story?  And what if they also can't provide any other examples, when challenged to do so, for their claims that there are plenty of 'QWERTY worlds' out there?

One thing they don't do is admit error.  We know that because, when QWERTY was shown not to be inferior--i.e. one couldn't retrain on the Dvorak Simplified Keyboard for two weeks and increase one's typing speed by between 20-40%, as asserted by Paul David, Brian Arthur et al--they didn't admit they were wrong.  And they still won't.

Even after almost three decades of evidence has piled up, and continues to do so, as a new paper by the Scotsman Neil Kay, Rerun the tape of history and QWERTY always wins (sorry, but it'll cost $36 to read) shows.  Kay makes innovative uses of probability theory to show just how well designed Christopher Scholes invention actually was.  And, contrary to its critics, not because it slowed typists down.

Addendum:  Neil Kay, in his answer to three comments on his paper shows that this not ancient history, by quoting from Krugman and Wells textbook, which several thousands of economics students read;
 “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 they define this in their glossary as;
QWERTY problem: an inferior industry standard that has prevailed possibly because of historical accident” (p. G-12)” 


  1. Today, each typist on a computer can have any keyboard layout they wish, merely by applying a definition file. No one has to live with an outdated and inefficient standard.

    Yet, I don't know of any rush to reassign keys. The QUERTY layout must be good enough.

  2. Yes, Andrew, that stake has been driven through the path-dependent heart, by Liebowitz and Margolis among others. To absolutely no effect for the true believers.

    Not that they aren't sensitive. My attempt to alert the other commenters at Conscience of a Liberal to Krugman and Wells's inclusion of QWERTY in their textbook wasn't allowed to see the light of day there.

  3. Oops, correction, finally this morning at 5:56 it did make the cut;

    HSIB regrets the error.