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The Wall Street Journal Interactive Edition -- February 25, 1998

Economists Decide to Challenge
Facts of the QWERTY Story

By LEE GOMES
Staff Reporter of THE WALL STREET JOURNAL

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.

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