A subscriber posted this last week.
I do not speak English. I use google translate for reading and communication. In the books and articles of Dr. G. North, I find the answers to the questions that interest me. I am very encouraged and taking forward-looking actions. I believe my work is an inheritance for my children.
This brief paragraph is easily understood by someone who speaks English. It opens the world to speakers of multiple languages. This is going to increase the intellectual division of labor on a scale never before imagined.
I don't know how long it is going to take, but there will come a time when we have real-time communications with each other, despite the fact we do not speak each other's languages. This will be a tremendous benefit to intellectual productivity.
We already know that most of the value delivered online has to do with knowledge. Knowledge is the primary economic good that is available online. The great barrier today is the fact that we do not understand each other's languages. But I think it is easy to predict that sometime over the next two decades, this barrier is going to be reduced to the point where only about 5% of the information is lost as a result of inefficient translation software. That last 5% will be difficult to overcome, but the 95% that will have been translated accurately will contain the most significant information.
We know that there is going to be a breakthrough in low-orbit satellite communications. Three companies are innovating in this area: Facebook, Amazon, and Google. One or more of these approaches is likely to work. Facebook recently ran a test of a high-flying drone that will be used to enable people in the Third World and Second World to hook up to Facebook free of charge. The story is here.
Because the most valuable asset as information, and because this cannot be blocked except by tyrannical governments, and it can be taxed by no one, we're going to see an increase in international trade. There is no way to place a tariff or quota on a piece of information that is sent digitally. We know the rule: when the price falls, more is demanded. That is a fundamental law of economics. We are going to see this demonstrated across the world from this time on.
We already live in a world of low tariffs and low quotas. It is not a strictly free trade world. It is a managed trade world. But there is essentially zero probability that the world is going to go back to the tariff structure that prevailed in 1960. There is lots of talk about looming trade wars, but I don't think there is much of substance to this talk. Legislatures don't want higher tariffs. They know it will reduce people's wealth. There is not that a significant amount of money that is collected from these tariffs. They apply only to physically shipped goods, and these constitute a declining percentage of the value of international trade. What is really valuable is information, and information cannot be taxed at any nation's border.
The only national politician of significance who has been elected on the basis of higher tariffs is Donald Trump, and he has yet to introduce legislation regarding tariff structures. When he does, it is unlikely that Congress is going to go along with him on this. He should have introduced such legislation already. I think he lacks any kind of coherent program for raising tariffs.
So, we can expect increased world trade, and the value of that trade will be dominated by information and digital services that can be outsourced to India and other low-wage nations.
We will mostly be richer because of this. It will decrease the cost of information, and more and more our wealth is measured in terms of information. My world is almost entirely dominated by digits. I spend most of my time in front of a computer screen. When I'm not doing this, I am reading a book, and these days I either ordered the book from Amazon or I downloaded it and then printed it out.
The cost of doing basic research has plummeted because of the World Wide Web and Google. This is not going to be reversed. It is probably going to accelerate. Google is working hard to get it to accelerate.
F. A. Hayek's 1945 article, "The Use of Knowledge in Society," set forth the case of decentralized knowledge. He argued that no central planning committee could possibly possess the information that individuals possess. The free market offers opportunities for people to profit from the specialized information they possess. Hayek was arguing that central planning could never compete with free market individual planning. This is an extension of Mises's argument in 1920 in the article that converted Hayek and dozens of his intellectual peers in the 1920's from central planning to free market planning. The article was this: "Economic Calculation in the Socialist Commonwealth."
The extension of translation software is going to undermine governments around the world. It will be more and more difficult for governments to present their interpretations of world events to a public that has no access to rival interpretations. There will always be governments that attempt to spin information, but translation software is going to enable people to understand the government's official position. This will be good for liberty.
© 2022 GaryNorth.com, Inc., 2005-2021 All Rights Reserved. Reproduction without permission prohibited.