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Created: 2000-02-21
Last Modified: 2000-02-26
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Looking in the Encyclopedia

J. Bradford DeLong
http://www.j-bradford-delong.net/
delong@econ.berkeley.edu

February 2000


A Fire Upon the Deep

Many years ago I was reading A Fire Upon the Deep, a science fiction novel by Vernor Vinge, and I was curious about where Vinge had gotten the name "Qeng Ho"--which in the novel was the name of a group to which the protagonist had belonged in the distant past. So I went downstairs to my then newly-acquired copy of the Encyclopedia Britannica and looked up "Qeng Ho."

I found nothing.

But were I looking not eight years ago but today, instead of going downstairs I would lean to my left, type http://www.britannica.com/ into my web browser, type "Qeng Ho" into the search box, press "RETURN", and thus immediately search not just the full text of the Encyclopedia Britannica but also the internet, a collection of 70 magazines, and also Barnes and Noble's database of books.

I would find a lot.

Smack at the top center of the results page would be what I was looking for: the Encyclopedia Britannica's article on the fifteenth-century Chinese admiral Cheng Ho [or Zheng He, depending on how you like your Chinese characters Romanized].

The first thing I would discover was that Vernor Vinge had committed an error: he had tried to update the name Cheng Ho from the Wade-Giles to the Pinyin Romanization using the rule "ch goes to q," but he had been wrong--in this case the rules are "ch goes to zh" (as from Chou En-Lai to Zhou Enlai) and "o goes to e." No wonder my first long-ago search--flipping open the Britannica and looking under "Qeng"--had gotten nowhere. And I was impressed that britannica.com's search engine software was sophisticated enough to deal with this problem.


The Eunuch Admiral Cheng Ho

The second thing that I would learn (or would have learned, had I not learned about Cheng Ho from other channels in the intervening years) is that Cheng Ho was a eunuch, a close confidant of the Yung-lo Emperor of China, the third emperor of the Ming Dynasty, and a famous admiral who with 30,000 men and seventy ships explored the coasts of Asia and Africa a century before the Portuguese were to "discover" the Indian Ocean. (Compare these numbers to the twenty ships and 3,000 men of Vasco da Gama's second voyage).

In seven voyages over twenty-eight years Cheng Ho's ships explored Africa as far south as the Mozambique channel, the Red Sea as far north as Egypt, Arabia, the Persian Gulf, Persia, India, Ceylon, Java, Sumatra, and Southeast Asia. He brought back giraffes, envoys from more than thirty kingdoms, other presents, and the occasional king--King Alagonakkara of Ceylon was brought back to China to apologize to the Yung-lo Emperor.

These missions extended China's political sway over maritime Asia. But they did not lead to the establishment of trading empires: Cheng Ho was an admiral and an official, not a merchant. Think of his expeditions as the equivalent of the Apollo project for Ming Dynasty China: they flattered the Yung-lo Emperor's vanity, were impressive demonstrations of organizational capability and technological might (to sail a round trip of 10,000 miles at a moment when the Portuguese had not even reached the Senegal River or the Cape Verde Islands), and might eventually have led to more things had politics not intervened.

In 1424 the Yung-lo Emperor died. His successor, the Hung-hsi Emperor, decided to curb eunuch faction influence. One tool in this was the suspension of naval expeditions. Cheng Ho made one more voyage under the Hung-hsi Emperor. And Chinese naval exploration was never resumed.

All this I would have found out in less than eight minutes after typing in my query, had I had today's internet rather than yesterday's Encyclopedia Britannica when I went voyaging for information.


Voyages of Intellectual Exploration

I was thrilled to get my paper Encyclopedia Britannica. It cost me $1500--that is, the Britannica company wanted to pay me and asked if I wanted an encyclopedia or some cash. It seemed worth every penny. For a while I would go down and look at it every day, running down a reference or flipping through random pages. It was still the resources that I went to when I ran across something unfamiliar until last year--until the coming of http://www.britannica.com/ to the internet.

Yet now my paper copy is gathering dust. It has been replaced. Reading on a screen is hard, but so is reading small print. On my computer I can make britannica.com's print as large as I want, so it is actually easier to read on the screen than in the book.

And the search engines! You need a flat place to open at least five volumes if you are going to do a comprehensive job of searching the paper encyclopedia. By contrast, the first search brings up all the references in the whole encyclopedia text on the very first screen. Plus there are the references to magazine articles and websites (though truth to tell, I haven't found much in the magazine references yet, and http://www.google.com/ seems a better internet search engine).

All in all, there is no doubt in my mind that http://www.britannica.com/ is a superior intellectual product. And one thing more: it's free.


Making Us All Better Off

There is no doubt about it: intellectual capabilities that were expensive--to the tune of $1500--a decade ago are now free. http://www.britannica.com/ is open for no extra charge to anyone with a computer, an internet connection, and a web browser. For most people access to the Encyclopedia Britannia is not worth the $1500 it used to cost: we know this because most people did not buy the Encyclopedia Britannica. Still, it is worth something. If it is worth an average of $100 per household to Americans, than we all are now $8 billion richer as a result of the decision to put http://www.britannica.com/ online. If it is worth an average of $500 per households (as it may well be) then we all are now $40 billion richer--that is one-half of one percent of a year's GDP.

Suppose that you go to me, or any other economist, and ask: "How is this increase in national wealth from the fact that http://www.britannica.com/ exists measured in the GDP accounts?" What answer do you get? The answer you get is a surprising one: for it doesn't enter the GDP accounts at all. GDP measures the market value (either at today's or at some base year's prices) of all goods and services produced in the U.S. and sold to the government, to investing firms, to foreigners, or to consuming households. When you or I access http://www.britannica.com/ on the internet, nothing is sold. So a big fat zero is added to the GDP accounts.

The most recent estimate of economic growth was that in the fourth quarter of 1999 U.S. real GDP grew at a rate of 6.9% per year. But this number expressly does not include any adjustment for the increase in consumer welfare as more and more households discover britannica.com. Is this example extraordinar? I don't think so. Is it typical? I don't think that it is typical--at least not yet.

I really don't know how much the fact that our system of national accounts has no place to put the value to consumers of things like http://www.britannica.com/ is leading our official statistics to understate the current pace of economic growth...


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Gee. I've been sending mail to:

Council of Economic Advisers
Old Executive Office Building
1700 Pennsylvania Ave., N.W.
Washington, DC 20006

for years. I wonder how much of it got there...
:-)

Contributed by Brad DeLong <delong@econ.berkeley.edu> on January 8, 2001


This is almost absurdly picky, given the gravity of the topic, but in the interest of accuracy....The address of the old State, War, and Navy building is 1602 Penn. Ave. Not 1700.

Contributed by Elizabeth Weber <elizabethweber@alum.swarthmore.edu> on January 5, 2001


There's a lot to think about in your article. How do you measure the worth of intangibles or intellectual property. I've run in to this before. I was stationed in Tokyo with the Air Force in the 1980's and got caught up in negotiations with the Government of Japan (GOJ). One of my acquaintances was an economist and over dinner one evening pointed out that about 25% of the trade with the US wasn't covered in the balance of trade statistics.
For example: The Japanese air force bought US designs for aircraft from US companies and paid licensing and royalities on each unit built. Because the planes were built in Japan by domestic companies but to American blueprints, no trade by law had occurred. The fees, royalities, and profits flowed out of Japan to the US but since nothing tangible was exchanged, no credit was given. Further, Japan contributed up to a third of their defense budget to direct support of the US military establishment in Japan. Again for no credit.

A tough problem. Let know when you figure it out.

Contributed by James Keaton (jkeaton@iwaynet.net) on February 26, 2000.


A corollary is: How and who will pay for future Brittanicas when everyone gets what they need 'for free.'? Are we running down existing stocks and not creating new materia

Contributed by Arthur Cordell (Cordell.Arthur@ic.gc.ca) on March 17, 2000.


Brad, I've been pondering your encyclopedia note and I had a couple of questions

you wrote:

>If it is worth an average of $500 per households (as it may well be) then we all are >now $40 billion richer--that is one-half of one percent of a year's GDP.

After I read this I was doing my periodic checking of the lbotalk archives and I noticed you saying over there that exploitation of the third world accounts for less than 2% of US GDP. I agree with the point you were making which is, correct me if I'm wrong, that saying much of american wealth depends on exploitation of the third world is simply incorrect.

So I'm wondering, if 2% is insignificant in that context, why is one-half of one percent significant when you're talking about free encyclopedias? Are you trying to wish away our balance of payments deficit? :)

Also, how do you gauge how many households want britannica even for free? Is it still worth $500 if you don't want

Contributed by Dennis Claxton (DENNIS_CLAXTON@fragomen.com) on March 17, 2000.


Well, the belief is that free encyclopedias are only a small part of the value of the internet...

Contributed by Brad DeLong (delong@econ.berkeley.edu) on March 17, 2000.


oh ok, now I see what you were getting at. any ideas on what might be the biggest value(s)?

Contributed by Dennis Claxton (DENNIS_CLAXTON@fragomen.com) on March 17, 2000.


If you tell me what the killer app of broadband internet will be, I'll tell you what the biggest value will be..

Contributed by Brad DeLong (delong@econ.berkeley.edu) on March 17, 2000.


Andrew? and don't give us that people are the killer app line, let's make some money here!

Contributed by Dennis Claxton (DENNIS_CLAXTON@fragomen.com) on March 17, 2000.


Professor of Economics J. Bradford DeLong, 601 Evans Hall, #3880
University of California at Berkeley
Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax
delong@econ.berkeley.edu
http://www.j-bradford-delong.net/

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