RE: Krugman critiques Dow 36K

From: Eugene Leitl (
Date: Fri May 05 2000 - 16:57:46 MDT

Bostrom,N (pg) writes:

> * The growth of the Internet will slow drastically, as the
> flaw in "Metcalfe's law"--which states that the number of potential
> connections in a network is proportional to the square of the number of
> participants--becomes apparent: most people have nothing to say to each
> other! By 2005 or so, it will become clear that the Internet's impact on the
> economy has been no greater than the fax machine's."

Fortunately, machines have a lot to say to each other, and can
replicate much faster than human agents.

heralds interesting times to come.

Also, he seems to assume that communication bandwidth is fixed. The
opposite is the case. Voice over IP is still not saturated yet, and
streaming multimedia have not yet even started. We don't have even the
beginnings of distributed VR. Search engines are notoriously starved
for bandwidth.

> This last statement seem extraordinary to me. I would have thought the
> market cap of Cisco alone is greater than the sum total of the world's fax
> machine industry (and already was in '98?). What am I missing?

I think that Krugman simply does not understand global networks.

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