Saturday, December 31, 2011

Otherwise known as encoding the surplus

James Hamilton writes,

My suggestion is that America should try to return to what some scholars maintain was the original source of America's success, which came from using North America's abundant natural resources as a basis for a competitive advantage in manufacturing.

He notes that shale gas and rare earth elements are resources that we could exploit. It seems to me that these offer opportunities for patterns of sustainable specialization and trade.Kling

In and around the mine, piles of rare earths appear, round off error from the mining network. Little miners say, "hey, I think I can do a second stage processing of this little pile." The new second stage processing industry increases the rank of the total economic network and we get a NLogN increase in economic activity, at equilibrium.

Think of a web bot cruising a database.  The web bot notices piles of data and says:  "Hey, I can put a schema around this data and make faster access"

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