Doyne Farmer

Because if let's suppose you don't take in very many labor inputs and all your inputs are things that already have high trophic levels, then you're going to have an even higher trophic level than your inputs. And you keep going back down until you get back to labor and

Because if let's suppose you don't take in very many labor inputs and all your inputs are things that already have high trophic levels, then you're going to have an even higher trophic level than your inputs. And you keep going back down until you get back to labor and

So, in fact, the trophic level is the average time it takes a dollar that an industry pays to its labor to get into somebody's pocket or get it, in other words, to get all the way back to all the labor that went into making the thing as you go down the chain.

So, in fact, the trophic level is the average time it takes a dollar that an industry pays to its labor to get into somebody's pocket or get it, in other words, to get all the way back to all the labor that went into making the thing as you go down the chain.

So this allows you to compute these trophic levels for industries, which typically, as in biology, organisms eat more than one thing, their trophic levels aren't just integers, they're more complicated. Similarly, here you can compute trophic levels for industries. Now, suppose we assume that every industry is innovating at about the same rate. Bald assumption, but good place to get started.

So this allows you to compute these trophic levels for industries, which typically, as in biology, organisms eat more than one thing, their trophic levels aren't just integers, they're more complicated. Similarly, here you can compute trophic levels for industries. Now, suppose we assume that every industry is innovating at about the same rate. Bald assumption, but good place to get started.

We can let it be different, but let's start out by assuming they all innovate at the same rate. Well then, if you have a deep supply chain, there are many industries that innovate on the way up to your industry. So you experience the product of all those innovations coming up the supply chain. So, you know, if my laptop, if the titanium that

We can let it be different, but let's start out by assuming they all innovate at the same rate. Well then, if you have a deep supply chain, there are many industries that innovate on the way up to your industry. So you experience the product of all those innovations coming up the supply chain. So, you know, if my laptop, if the titanium that

Apple is using, it's cheaper, that helps make my laptop cheaper. If the chips get cheaper, etc. You're inheriting all those improvements in addition to the improvements the laptop designers themselves make. And so then we just compute it that this means things with deep trophic levels, their products should improve faster, meaning they should get better or cheaper or some combination of the two.

Apple is using, it's cheaper, that helps make my laptop cheaper. If the chips get cheaper, etc. You're inheriting all those improvements in addition to the improvements the laptop designers themselves make. And so then we just compute it that this means things with deep trophic levels, their products should improve faster, meaning they should get better or cheaper or some combination of the two.

And Sure enough, we looked at the data, and we took advantage of the fact that trophic levels change slowly through time. So you can, roughly speaking, assume they stay constant. And you can predict 14 years ahead which products are going to be cheaper or not just based on that assumption alone. The prediction is quite good. And amazingly, it gets better as you go further forward into the future.

And Sure enough, we looked at the data, and we took advantage of the fact that trophic levels change slowly through time. So you can, roughly speaking, assume they stay constant. And you can predict 14 years ahead which products are going to be cheaper or not just based on that assumption alone. The prediction is quite good. And amazingly, it gets better as you go further forward into the future.

As someone who does a lot of predicting, that's a pretty unusual prediction.

As someone who does a lot of predicting, that's a pretty unusual prediction.

Yeah. Now, interestingly, in biology, competition is a key part of evolutionary theory. But evolutionary biologists view competition as what leads us to speciation. That's one of Darwin's key insights. Whereas in economics, the mainstream people like Milton Friedman say, no, competition means you quickly come to equilibrium, the state of rest.

Yeah. Now, interestingly, in biology, competition is a key part of evolutionary theory. But evolutionary biologists view competition as what leads us to speciation. That's one of Darwin's key insights. Whereas in economics, the mainstream people like Milton Friedman say, no, competition means you quickly come to equilibrium, the state of rest.

So they arrive at a completely different conclusion, both using competition. Now, it's in part because economists start with rationality, they assume we're all really smart, so we figure everything out, and that gets us to this equilibrium quickly. Whereas in biology, you know, there is random variation that's being amplified as a result of the competition and actually causes species to diverge.

So they arrive at a completely different conclusion, both using competition. Now, it's in part because economists start with rationality, they assume we're all really smart, so we figure everything out, and that gets us to this equilibrium quickly. Whereas in biology, you know, there is random variation that's being amplified as a result of the competition and actually causes species to diverge.

I would argue that's also happening in the economy. Because, well, in some cases, we may behave rationally. I'd say the cases where we behave rationally are the ones where things are really simple so we can figure them out. But most of the time, it's pretty complicated. So that's not such a good approximation. And we, you know, overshoot, undershoot, and differentiate.

I would argue that's also happening in the economy. Because, well, in some cases, we may behave rationally. I'd say the cases where we behave rationally are the ones where things are really simple so we can figure them out. But most of the time, it's pretty complicated. So that's not such a good approximation. And we, you know, overshoot, undershoot, and differentiate.