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2020 | OriginalPaper | Chapter

1. Civilizations’ Economic Drivers: Babylon to Bitstream

Author : Gerald R. Faulhaber

Published in: Applied Economics in the Digital Era

Publisher: Springer International Publishing

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Abstract

Economic drivers, or scarce resources, determine the social, political, and economic structure of civilizations and when they change, the civilization changes and its entire power structure changes. These changes are wrenching and give rise to extreme social tensions and often violence. The economy is now in the middle of such a transformation, to an information economy: cyber-civilization. We can learn lessons from the past changes, as social, political, and economic strains are now emerging. Suggestions for coping with these stresses focus, inter alia, on educating the workforce for a new economy. Today’s policymakers need to address these issues.

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next chapter A Different Approach to Deriving Price and Income Elasticities: Applications to Telecommunications and Gasoline & Motor Oil

Some experts argue that the evidence supports some form of civilization emerging 20,000 years earlier, in a cave in South Africa (Pappas 2012). Our use of the term “civilization” is more in accord with the later date of origin of 3500 BCE.

“Property rights” is meant to be broadly construed. These need not be private property rights; they could well be communal property with individual farmers’ access to property guaranteed by law, or some other form of property management that ensured farmers’ output would be controlled by the farmer, and any investment in the property would redound to the benefit of the farmer-investor.

For example, Andrew Carnegie, who amassed a fortune in the steel industry, funded the building of over 2500 community libraries worldwide. Almost half the total community libraries in the US by 1919 were funded by Carnegie.

The Teamsters was an effective union for US truckers which stayed independent of the AFL-CIO.

Some have argued that the benefits of the information economy are exaggerated compared to the innovations of the nineteenth century (e.g., Gordon 2012).

The EU has adopted a measure that gives rights to customers concerning the use of their data; this measure “General Data Protection Regulation” was adopted by the EU in 2016 and was operational in 2018 (Wikipedia 2019d).

The EU antitrust authorities appear to believe that such action is mandated (Satariano et al.).

An interesting note is that none of these individuals inherited their wealth; all of it was generated from the firms they founded and ran. It is reasonable to conclude that these individuals created their wealth through their own efforts and talent, rather than the good fortune of relatives.

A popular work on the history of inequality is Piketty (2014).

In recent decades, the strength of unions has declined substantially.

Matoo and Meltzer (2018) contains a discussion of the components of GDPR and the difficulties concerning trade with other countries with different privacy rules.

In fact, some have argued Facebook and Instagram should be broken up now (Wu 2018).

Most information firms serve “two-sided” markets, in which both retail customers and, e.g., advertisers access each other through the firms’ platform. This suggests that antitrust authorities should not only look at the impact of these firms on retail customers but also the impact on advertisers. Traditionally, there has been no antitrust actions based on harms to advertisers, so we do not consider it here. (See Alleman et al. 2020, this volume, for an alternative view.)

It is difficult to characterize Amazon as “dominant”; Amazon’s 2017 US retail sales was $102 B, while Walmart’s was $374 B.

The history of antitrust in the US includes actions against firms based on their size or based on impacts on competitors. During the 1980s, the “Chicago School” of antitrust revised implementation of antitrust law based solely on potential customer harm or harms to competitive markets, eschewing antitrust actions base on size or on competitor impact. The defining paper is Bork (1979).

Clearly, the converse is true for high-school or less-educated workers.

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Title: Civilizations’ Economic Drivers: Babylon to Bitstream
Author: Gerald R. Faulhaber
Publisher: Springer International Publishing
Book: Applied Economics in the Digital Era
Print ISBN: 978-3-030-40600-4

Electronic ISBN: 978-3-030-40601-1

Copyright Year: 2020
DOI: https://doi.org/10.1007/978-3-030-40601-1_1

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