The Weird and Wonderful Economics of Digitization – Andrew McAfee – Harvard Business Review

Computer hardware and software prices have moved in exactly the opposite direction, and the trend for hardware is especially striking. To show it, in fact, we have to move away from a linear scale on the Y axis (where each tick mark represents an additional 20 units) and adopt a logarithmic one (where each tick mark represents a factor of 10 increase). Here’s the logarithmic graph with computer hardware added:

This chart shows that since the end of WWII, prices for virtually all other types of corporate equipment have increased by about one order of magnitude (that is, one factor of 10). Over a substantially shorter time, meanwhile, computer hardware prices have decreased by about four orders of magnitude. Nothing else in the history of the industrial US economy has ever behaved like this. I’d wager, in fact, that nothing anywhere ever has.