Silicon Valley has always been obsessed with efficiency. But lately, it is also obsessed with beauty. In a place where engineers have reigned supreme, the new tech talent war is for designers. (more)

In those parts of the economy that are well modeled by the introductory economics textbook treatment of widgets – firms producing a thing with workers with increasing marginal costs in a somewhat competitive industry, such as durables, clothes, and cars – we’ve seen continuing, very substantial growth in real wages as measured by the purchasing power of things that our economy produces. The reason that real wages in aggregate have stagnated is that much of what people buy are things where there are issues of fundamental scarcity: energy, the land under the houses we buy, and goods and services that are produced in complicated, heavily public-sector-inflected ways. Medical care and educational services are examples of the latter category. (more; HT Tyler)

Many long-term trends over the last few centuries can be plausibly attributed to people getting richer, and thus wanting different things than poor people want. One interesting example: the decline of engineering relative to design.

All products and services have to negotiate between the two extremes of the raw physical world and complex human preferences. That is, products must deal with the physical world in order to give humans what they want. Engineers tend to focus on the physical world, trying to minimize the effects of key resource constraints, while designers tend to focus on how a product looks and feels to customers.

Because we have simple powerful general theories of how the world works, engineering can make use of a lot of math and computer modeling, and can often transfer inventions to very different products. In contrast, since humans are very complex and poorly understood, designers must instead develop intuitions by seeing many specific examples of good and bad design.

As we have become richer, we have become less concerned about raw physical constraints. When we have enough calories in our food, enough insulation in our clothes and walls, and enough mass moved fast enough in our transportation, we focus more on how exactly our food, clothes, etc. make us feel. This includes how we feel about how the product is abstractly described to us – marketing also gets more important as design gets more important.

Rich people also care more about product variety. When we can barely make any affordable car that functions, car design focuses on making one working car at sufficient scale to be cheap enough. Such as the Model T. But when we get better at cars, customers are willing to pay extra to get cars in more variety, to better match the self-image they want to project. So design and marketing come to matter more than simple engineering.

These trends have many implications. Since innovations that accumulate and transfer well are more easily found in engineering, our focus on design slows our rate of economic growth. Also, since local tastes vary, our focus on product variety that better adapts to local tastes gives us fewer gains from globalization. Finally, a focus on design weakens the connection between economic and military power. An economy that is better at making more varied products to make more customers feel good about themselves is less obviously better able to make weapons that kill. After all, engineering matters much more than design and marketing when it comes to weapons of war.

In the em future scenario that I’ve been exploring, income per em falls to subsistence levels. This should increase economic growth rates, the importance of engineering relative to design and marketing, and emphasize scale economies relative to product variety. Our descendants would return to focus more on conquering nature, and on acquiring economic power that translates better into military power.

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