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No. 1264:
The Economics of a Revolution

Today, we trace a revolution in the money we spend. The University of Houston's College of Engineering presents this series about the machines that make our civilization run, and the people whose ingenuity created them.

The 80th-birthday edition of Forbes magazine shows how the 20th-century technological revolution is written in our changing economy. It tracks the way we've spent money from 1917 to 1997.

Perhaps the most telling graph in this thick magazine is one that compares energy consumption with our use of RAM computer memory. Our per-capita energy consumption is about two-and-a-half times as high as it was 80 years ago. That's a lot, but the good news is: it leveled off twenty years ago.

RAM memory is another matter. It's been almost doubling every year, starting 30 years ago, and it shows no sign of slowing down. Today, the average person in America owns ten megabytes of RAM. Next year that average will go to 17 megs.

Another article, titled Steel Versus Silicon, shows the assets of America's top 100 corporations. Our top three companies in 1917 were US Steel, Standard Oil, and Bethlehem Steel.

Today the top companies begin with General Electric. Coca-Cola is second. US Steel is still there, but now it's number three. While half the net worth of top companies was in oil and steel in 1917, only a twelfth of it is there today.

Microsoft is now number four and Intel is fifth. One seventh of the top companies have made electronics, office equipment and software during the last 30 years. But those companies have changed. Most of the big computer makers from the '60s are off the list now, and newcomers Microsoft and Intel are far ahead.

Beverages and tobacco have risen from two percent of the top companies in 1917 to almost nine percent today. Coca-Cola and Phillip Morris now rank second and sixth. We spend less on cars or aerospace than we once did. As for that huge growth in RAM memory: it represents neither big bucks nor American manufacture. What those foreign-made chips do is accommodate fancier software and faster Web access. They make us hunger for fancier microprocessors.

Another article tells how the Web is replacing travel agents, stockbrokers, and bank tellers. The Web will be our new medium of business commerce. Like commercial radio, we'll probably end up paying for Web use by reading all the new commercial advertising.

So to see where technology and society are going we follow the money. America's heart is no longer being made of steel. It's being reshaped by information access, and that leaves us nervous.

We're left wondering if we're letting our world slip into some kind of immateriality. A Compaq Company ad faces the "Steel Versus Silicon" article. The text, written over a dreamy sunlit forest, says, "They say computers make the world a better place. We kind of like the world the way it is." It's a computer-maker who feels obliged to remind us there's still a real world out there -- made not just of steel but of sky and trees as well.

I'm John Lienhard, at the University of Houston, where we're interested in the way inventive minds work.

(Theme music)

See the many articles in the July 1997 issue of Forbes.