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The Wall Street Journal
Interactive Edition -- February 25, 1998 |
Economists Decide to Challenge By LEE GOMES Is the standard typewriter
keyboard, the one used every day by tens of millions of people, a cruelly
inferior design that we're stuck with only because its popularity prevents
people from switching to something better? The question isn't
as prosaic as it sounds. For economists, it bears on some of the critical
issues of the day, such as whether free markets always make the best choices,
or how readily the government should intervene in business, as the U.S.
Justice Department is now trying to do with Microsoft Corp. Indeed, the
keyboard question has now surfaced at the heart of a scholarly debate. Two
economists have challenged conventional thinking about it in a new paper that
is stirring up a tempest in academia and beyond. At issue is the standard
"QWERTY" keyboard, so named for the first six letters on the second
row of keys. The story of its origin has some trappings of an urban legend,
and goes something like this: The
keyboard was designed in the 19th century to deliberately slow down typists,
because the earliest manual typewriters tended to jam. QWERTY solved this by
placing frequently used letter pairs far apart. Then, during the 1930s, a
university professor named August Dvorak devised an alternative keyboard that
placed the most frequently used letter pairs in a single row. Though Dvorak
insisted his keyboard was much easier to learn and faster to type on, nobody
switched to it because QWERTY had such a huge head start. A
version of this story made its way into scholarly discourse via a short but
influential 1985 essay by Paul David, a Stanford University economist. In his
paper, Prof. David cited a U.S. Navy study from the 1940s showing that the
Dvorak keyboard was so superior that the cost of retraining typists from
QWERTY to Dvorak could be recouped in just 10 days. Such retraining never
occurred because, in effect, the market had already settled on "the
wrong system," wrote Prof. David, adding: "There are many more
QWERTY worlds out there." For
Prof. David and his Stanford colleague, W. Brian Arthur, the QWERTY case was
the launching point for a new theory of economic behavior that challenged
certain long-held verities. "In the early 1980s, standard neoclassical
theory held that markets always chose the right technology," explains
David A. Kirsch, of the UCLA business school. "It should have been
impossible to have the persistence of an inferior technology." But
rather than the slugfest of vigorous free markets, a different kind of
economic behavior was displayed in the QWERTY story, Prof. David argued, one
where people can get "locked into" inferior products because of
distant and long-forgotten events. The idea was called
"path dependence," after the notion that once you start down a certain
path, it is hard to get off. Another example often cited by proponents was
videocassette recorders, where the VHS standard won out over the supposedly
superior Beta because of early marketplace maneuvering. Path dependence has
since become linked to a cluster of theories said to describe the tendency of
high-tech markets to encourage monopolies that may not necessarily offer the
best technology. Some of Microsoft's legal opponents have cited the work of
Profs. David and Arthur in urging federal action against the company. One of
their arguments: Microsoft's head start and market penetration allowed its
MS-DOS operating system to become the personal-computer standard despite
widespread agreement about the superiority of Apple Computer Inc.'s Macintosh
system. Meanwhile, the QWERTY story
gained wide circulation among other economists, including Paul Krugman of
Massachusetts Institute of Technology. In a 1994 book, Prof. Krugman
predicted that "a generation from now, the economics of QWERTY will
still be a vital part of the intellectual tradition." Now,
though, the facts of the QWERTY story -- and some of the larger thinking
about path dependence -- have been challenged by two economists, Stan
Liebowitz at the University of Texas at Dallas and Stephen E. Margolis of
North Carolina State University. They
debunk the QWERTY tale, calling it largely a myth perpetuated by none other
than Prof. Dvorak, who they say held a patent on his keyboard and stood to
gain if it triumphed over QWERTY. The oft-cited Navy study was badly flawed,
the professors say, and was probably conducted under the supervision of Prof.
Dvorak himself, who died in 1975 bitter that the world had spurned his
invention. Other
more recent studies, including one by the General Services Administration,
have shown there is little or no difference between the keyboards in such
areas as learning ease, speed and comfort. The
two critics also argue that if the Dvorak keyboard was indeed superior, then
big corporations -- especially back in the days of huge typing pools -- would
have grasped the long-term economic benefits of paying to switch over to the
"better" design. What's more, while today's personal computers can
easily be reprogrammed to the Dvorak layout, few people do. For
Profs. Liebowitz and Margolis, both observations cast doubt on the Dvorak
keyboard's superiority. And once that example crumbles, they suggest, some of
the larger conclusions of path dependence also must be called into question. The
pair also take aim at the VHS-Beta story. VHS won that battle, they say,
because it could tape for twice as long, something consumers clearly wanted.
Similarly, they note that DOS computers caught on because they were markedly
less expensive than Apple's. Prof.
David, who is currently doing research at Oxford University, says he
"stands by" his original paper. He does note, however, that he
hadn't even read the disputed Navy keyboard study before writing his article. But
many other economists say they've been persuaded by Profs. Liebowitz and
Margolis and their detective work. Among them is Prof. Krugman. "QWERTY
is a great metaphor," the MIT economist says. But he concedes that
evidence of being locked into a bad technology "turns out to be fairly
weak." Prof.
Arthur, now affiliated with the Santa Fe Institute, a think tank, says the
Liebowitz-Margolis critique of the QWERTY story doesn't demolish the
path-dependence theory. Both he and Prof. David say their real point was not
to flog the merits of one keyboard over another, but rather to show that
historical events have a large and unacknowledged role in shaping economic
choices. "The issue was that these markets worked differently than I had
been taught they did," Prof. Arthur says. Yet
Prof. Liebowitz points out that the claim of path dependence that major,
QWERTY-like inefficiencies are common "was clearly the hook that got
everyone into the theory. If they lose that hook, they lose a lot." In
fact, there is an emerging consensus among economists that the path-dependence
school has yet to come up with the smoking gun it needs to show the
marketplace locked into a manifestly inferior technology. Douglas Puffert, an
economic historian who was Prof. David's research assistant on the QWERTY
paper, says he knows of no such case that has been "unambiguously
proven." That
failure is important, because the real debate between the path-dependence theorists and their critics involves
how well markets work. And on that issue, economists like Prof. Krugman are
starting to sound like Profs. Liebowitz and Margolis in defending the vigor
of free markets. "Really large
mistakes offer profit opportunities," Prof. Krugman says. "If there
is a really crummy technology out there that we have locked into, then it
will be worth it for someone to pay the cost" involved in getting people
to switch. |
Copyright © 1998 Dow Jones
& Company, Inc. All Rights Reserved.
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