Carpe Diem

Looking back at computers in 1984 reveals that the economy and human progress are powered by the energy of ideas

From the 1984 Radio Shack computer catalog:
2012 laptop and flash drive
The top graphic above shows a pretty pathetic (by today’s standards) “transportable” and “completely portable” Model 4P computer from the 1984 Radio Shack computer catalog, which was advertised as the “perfect computer for our mobile society,” with the promise that you “can take it with you – it’s only 26 pounds.”  The 1984 portable computer had only 64K of memory, no hard disk, and sold for $1,800, which would be equivalent to $4,000 in today’s dollars.  Also advertised in the same catalog was an external 11.6 megabyte hard disk for $3,000, which would be about $6,700 in 2012 dollars.  Together, the 1984 “portable” computer and hard disk drive sold for the equivalent of more than $10,000 in today’s dollars. Measured in time worked at the average hourly wage, it would have required almost 1,200 hours of work in 1984 at $8.50 per hour to earn enough income to purchase the two items.

Fast forward to 2012.  The bottom graphic above comparable equipment today – an HP Sleekbook laptop computer and a SanDisk flash drive. The HP Sleekbook laptops sell today starting at $500, and they weigh less than 4 pounds and have 4 gigabytes of memory, which is 62,500 times greater than the 64K of memory in the 1984 model. Adjusting for both price and quality, today’s laptop is 500,000 times cheaper than the 1984 model (62,500 times more memory and 8 times cheaper).

A 32 gigabyte flash drive today sells for only $30, and has almost 3,000 times more storage space than the 1984 external hard drive.  That would be about 670,000 times cheaper adjusting for price and quality – today’s flash drive is 223 times cheaper in price and is 3,000 better in terms of storage space. And of course today’s flash drive fits on a key chain, whereas the 1984 hard disk drive wasn’t portable.

Measured in time worked, the average American in 2012 would only have to work about 27 hours (about 3.5 days) at the average wage today of $19.79 to purchase the HP laptop and the SanDisk flash drive, compared to the five months of work in 1984 to purchase the “cutting edge” portable computer and external disk drive of that era.  And today’s laptop is 6 times lighter with 62,500 times more memory than the 1984 portable computer, while today’s flash drives store thousands of times more data than the external drives in 1984.

Today’s computers, cell phones, and electronic products are mind-blowingly cheap and powerful compared to past decades, and reflect the overall trend throughout the economy towards better and cheaper products over time, especially manufactured goods.  If the dramatic price reductions and quality/speed improvements of computers and other electronic products happened suddenly all at once, it would probably be declared to be a miracle. But when the price reductions and quality improvements happen continually, we become immune and either don’t even pay attention, or tend to take the improvements for granted without appreciating the incredible progress that has happened in our lifetime.

A comparison of today’s computer prices to 1984 also helps us appreciate how technological improvements elevate the standard of living of average and low-income American to levels that previous generations and wealthy households couldn’t have even imagined.  The computers of the 1980s were expensive and generally only available to the upper-income groups, whereas today’s computers are now accessible by even low-income households.

Another lesson here might be that even a Great Recession can’t stop the progress of human ingenuity, technological improvements, and the entrepreneurial spirit that will continue the relentless trend towards better and cheaper products, and a continually rising standard of living. Matt Ridley pointed out recently in the WSJ that even the Great Depression didn’t slow technological progress, and that’s been the case through all of our economic downturns including the most recent one.  There’s an “inevitable, inexorable and incremental march of technological improvement” that continues steadily even during recessions and depressions.

The economy and human progress are fueled and powered by energy, and the physical energy of fossil fuels for example is certainly important; but what ultimately powers and runs the economy are ideas, and there are more ideas swirling around on the planet now than ever before in human history. We should eagerly await the days ahead as the ongoing technological advances make our lives better, and I look forward to blog posts 10-20-30 years from now that look back on today’s “state of the art” $500 HP laptop and $30 SanDisk flash drive with the same amusement that we look back today on the “state of the art” computers in 1984.

33 thoughts on “Looking back at computers in 1984 reveals that the economy and human progress are powered by the energy of ideas

  1. Another data point in 1993 I bought a computer with a monitor for 5k that had 16m of memory and a 500 mb hard drive. Am looking at a new desktop (there have been upgrades inbetween) of 1 tb of disk and 8 gb of memory, thuse 2000x the disk space, and 500x the memory, for about $600 plus about 130 for a 22 in flat screen monitor (that in 1993 was 17 inch and used a crt).
    Of course if you really want to take a good data point compare the cost of a slide made in 1993 which was about .27 per slide or more (I don’t recall the cost of slide film and processing back then) to todays .00 cost for a digital exposure at 18 mp per slide. Digital photography has been a total revolution and has lead to the demise of the primary photography company of the first 100 years of photography Kodak. I just checked using Fuji film and mailers it is now about $20 per roll or about .50 per slide. Of course the percent saving of digital can’t be expressed as the computer will get an error trying to divide by zero.

  2. The Smartphone is a computer. And the technology is powerful blend of components that “computers” did not originally have – at any price.

    In the Smartphone case.. it has wireless radio communications, the internet, GPS, and solid-state hard drives.

    Even now – the true unsubsidized smart phone is as much or more than those computers of old but the price is plummeting.

    Smartphones are IMHO part of what is behind the jobless recovery.

    One person with a Smartphone can do the work of several people and companies know this.

    we’ve been renovating a kitchen and we have an Ad Hoc team of carpenters, electricians, plumbers, concrete guys, etc. and every single one of them has a SmartPhone and they are using it all day long to coordinate and plan logistics for their jobs.

    they are much, much more efficient and productive than they ever would have been – without the ability to communicate in real time with each other – no matter where they are.

    Remember when the bigger companies would boast that they had “Radio Dispatched” trucks.

    Now.. everybody and their dog is “radio dispatched”.


    • “Smartphones are IMHO part of what is behind the jobless recovery”


      You really think that if the government were to ban smartphones that the unemployment rate would be lower?

          • Juandos, you’re a lost cause boy. The Prez said absolutely nothing in that video about banning technology. He explicitly said that technology was replacing jobs and we need to be looking to the future to see what jobs would be available to people and how to get trained for those jobs.

            I swear guy.. you are so hard over to the right – you’re worthless.

          • The Prez said absolutely nothing in that video about banning technology“…

            Idiots never learn…

    • Larry: “Smartphones are IMHO part of what is behind the jobless recovery.”

      How is that possible, Larry. I’d love to hear the logic which leads you to this conclusion.

      Larry: “One person with a Smartphone can do the work of several people and companies know this.”

      Please give an example of how a Smartphone – as opposed to a personal computer – has reduced labor requirements. If you are arguing that a person with a PC is more productive than a person without a PC, of course that is true. But PC’s have been around for three decades, and the number of jobs in the U.S. has soared.

      So, Larry, how is a Smartphone enabling today’s worker to do something that a PC couldn’t enable him to do? Please be specific in your explanation.

      • re: ” If you are arguing that a person with a PC is more productive than a person without a PC, of course that is true. But PC’s have been around for three decades, and the number of jobs in the U.S. has soared. So, Larry, how is a Smartphone enabling today’s worker to do something that a PC couldn’t enable him to do? ”

        did you read upthread? I gave an example. Contractors who move from one site to another based on their cell phone – which enables not only voice communication but text and email – and attachments – a true “portable” computer.

        Our contractor, for instance, forwards documents to us from his Iphone as he is on another site – rather than mailing them to us or bringing them over to us.

        He then goes to another site to work rather than coming physically to us… he dispatches his people form one site to our site via cell phone and he provides them with a material list of things to pick up from the building supplier on the way without every seeing them in person or giving them a list…

        Other contractors show up here and then get notified via cell phone of their next job – and then they use the GPS mapping to navigate to that site.

        have I convinced you yet? I have many more examples.

        • OK. You argued that Smartphones were responsible for the current jobless recovery. Then you offerred as an example a contractor who forwards documents from an Iphone.

          Here’s what the BLS reports on Construction and Extraction Occupations:

          2007 – 6,708,200
          2012 – 4.956,770

          You’re arguing that the Smartphones are responsible for the 1.8 million decline in Constuction and Extraction jobs since 2007?

          But you didn’t argue that Smartphones were responsible for just Construction jobs but for the U.S. jobless recovery as a whole. What about other jobs, Larry? Consider the decline in a few occupations:

          Automotive body repair specialists
          2007 – 152,790
          2012 – 131,040

          Laborers and freight/materials movers
          2007 – 2,363,440
          2012 – 2,063,580

          We need 14% fewer laborers because of Smartphones?

          Welders, cutters, solderers
          2007 – 385,740
          2012 – 316,290

          Welders became 18% more productive by using Smartphones, Larry?

          2007 – 410,900
          2012 – 368,510

          Smartphones account for this decline as well?

          • re: ” You’re arguing that the Smartphones are responsible for the 1.8 million decline in Constuction and Extraction jobs since 2007? But you didn’t argue that Smartphones were responsible for just Construction jobs but for the U.S. jobless recovery as a whole.”

            I gave that as an EXAMPLE. If you look at the areas that smartphones saved time for Contractors, it’s not that hard to see if would save time in similar situations in other occupations.

            If you buy the idea that desktop computers have had a role in consolidating jobs… the mobile phone as a computer is just an extension..

            I had a stove repaired recently. The guy had a tablet that talked to his van which had a cellular internet connection.

            He called up the schematic for my stove.. then diagnosed the problem, fixed it and then I gave him a credit card that he swiped in his van.. then printed out a receipt and left.

            there was no separate billing person involved.

            no snail mail invoice.. no writing a check and sending back to some office with a room full of people processing bills… the transaction was done and complete but one person when the repairman headed up my driveway.

            this is the kind of thing that is reducing the need for employees. The only person they need now is that repair person – no clerks.

          • Larry G: “If you buy the idea that desktop computers have had a role in consolidating jobs… the mobile phone as a computer is just an extension..”

            But neither desktop nor laptop computers caused the total number of jobs to decline. After the introduction of each, total jobs in the U.S. increased. Why would a Smartphone have a different impact?

            Larry, technological improvements have never resulted in a decline in total number of jobs in the U.S. For over 200 years in this nation productivity increases through technology have not caused a reduction in demand for workers. Certainly, some jobs have been eliminated. but other jobs have emerged. What is so special about today that would cause Smartphones to impact the total demand for workers?

            Just consider that, Larry. Steam engines, internal combustion engines, vacuum tubes, transistors, robots, computers, personal computers – none of those technological developments reduced the overall demand for workers. But you now argue that Smartphones are different?

          • re: technology and jobs

            if the economy was not ALSO growing what would technology do to jobs?

            If I spoke in absolutes, I misspoke but technology does increase productivity without requiring additional workers – sometimes – and when companies are not confident in the economy, they will hold off on hiring and work more overtime, part-time AND new technology to reduce the number of employees they need to do the same amount of work.


          • No. The cause for the jobless recovery may be the uncertainty of the economy, the uncertainty about government taxes, and the now-certainty about Obamacare mandates and other regulations. But technology advances is certainly not the cause for lack of hiring in this recovery and has never been the cause in any economic recovery.

  3. Back in the day, before the IBM PC hit the infant personal computer marketplace, I opened a retail computer store attempting to serve the entertainment market with Atari 400 and 800 computers and the small business market with Vector Graphic S-100 bus computers. The centerpiece of my store was a Vector 1 with a 5 megabyte Winchester drive. Power on board was a something like an 8 or 10 meg memory chip. The operating systems was CP/M. The selling price was just under 5 grand.

    BTW – the store stayed in business only about a year.

  4. The productivity of what gets done with all that power hasn’t advanced all that much. We went to the moon with the equivalent of a couple of commodore 64s.

    Advanced wird processing and collaborative writing tools means that a memo that might have been through three drafts on a typewriter now enjoys dozens or even hundreds of “revisions”
    to promulgate basically the same idea.

    Some stuff may be 500,000 times cheaper but many people are little better off as a result.

    Sure, we have drones fighting our wars and robots on mars, and talking cars, but at the end of the day, an awful lot of what gets done involves picking something up and putting it someplace else.

    This requires labor, and energy. In specialized niches like Amazon distribution centers, even this is automated, but in the larger more generalized world it is not, yet.

    Carl Rove had plenty of cheap computer power available to him. What good did it do?

    • Hydra: “The productivity of what gets done with all that power hasn’t advanced all that much.”

      I’ve been programming computers for the past 40 years, Hydra. I have not just seen but experienced in detail the changes. “What gets done with all that power” has advanced by orders of magnitude.

  5. Some stuff may be 500,000 times cheaper but many people are little better off as a result“…

    That’s because those losers deserve not to be better off…

    Carl Rove had plenty of cheap computer power available to him. What good did it do?“…

    What do computers and running a political campaign for a RINO have in common?

    Where do you come up with these goofy comparisons hydra?

  6. “Carl Rove had plenty of cheap computer power available to him. What good did it do?”

    It’s not the computer’s fault he didn’t learn what he needed to learn.

    At this point, there should be a compromise.

    For example, instead of raising taxes on the 2% who earn over $250,000, taxes can be raised on those earning over $1 million.

    Even with improved tax and regulation reforms, it seems, tax hikes and spending cuts are inevitable, which will negatively impact economic growth.

    • In over 75 years, there are few, if any, instances of federal politicians (especially Democrats) actually cutting spending, so I am skeptical of seeing such cuts any time soon. Heck, it’s hard to find a Democrat who will even talk of cutting spending, other than for defense.

      It’s Charlie Brown and Lucy every time. Democrat Lucys promise that this time they’ll really cut spending if Republican Charlie Browns will raise taxes. Expect the football to be snatched away again. The Republicans will never learn.

      • It seems, California won a supermajority, like Illinois, which makes the Republicans irrelevant.

        Marginal Federal and State income taxes (which include an uncapped Medicare tax and Social Security tax) on upper income workers will rise to around 60% in California, which doesn’t include other taxes, e.g. property taxes, sales taxes, etc.

        Prop 30 and 39 passed:

        “Prop 30 is a combination of two major tax-raising initiatives. The first part raises the sales tax in California “by one-quarter cent for every dollar of goods purchased.” The other portion was originally called the “Millionaires Tax”; it sets up a series of progressives tax increases starting with those earning $250,000 but less than $300,000. Their taxes will go up 1% to a total of 10.3% of their personal income.

        Earners who make $300,000 or more but less than $500,000 a year will have their personal income tax rate increased to 11.3%. On the high end, those earning $500,000 or more or $1 million or more jointly will see their tax rate increase to 12.3%; they will also be soaked with an additional 1% tax on earnings, bringing their state personal income tax rate to 13.3%.

        All of the increases will be retroactively applied to tax year 2012; higher earners will owe much more to the state than they’ve already paid into throughout this year come tax time next year.

        Proposition 39 changes an existing tax law which allows out-of-state businesses to calculate their taxes based on where their workers and facilities are located, not based on where they sell their products.

        In addition to raising taxes on businesses operating out of state, Prop 39 directs half of the anticipated billion dollars in yearly additional revenue into a new “green” energy fund.”

        • There is a rather stupid pediatrician living in the Bay Area who will be pleased to know that those eeeevil millionaires making $250,000- a-year are finally going to pay their fair share.

          • In California, taxes and tax rates keep increasing, along with much higher fees, fines, fares, tolls, etc., and although there are already lots of regulations, there are more regulations in the pipeline (including cap and trade for carbon emmisions) to drive-up prices even further.

  7. Something to keep in mind when throwing around enormous numbers to indicate improvements in hardware speed and capacity since 1984 is that software bloat and the waste of those hardware resources by sloppy coding have kept pace, so even though today’s personal computer is much smaller, lighter, and cheaper, it’s not really 62,500 times more productive than the 1984 models.

    Computers today are widely used and accepted tools, not something incredibly exciting as they were in 1984.

    • Elegant code is non existent these days. I suspect bit mapping had a lot to do with it’s demise.

      I thoroughly enjoyed BASIC as a simple way to program in 1979.

  8. It would be interesting to compare the start-up times of the typical computer over the years. From my personal experience, they seem to take as long or longer to boot up than they did 20 years ago, even though they are thousands of times “faster”.

  9. Thanks for this great post. I find it fascinating that you picked 1984 to discuss the future from the perspective of the past. And Larry’s and Lyle’s comments to kick off the response are perfect.
    When we think 1984, the first thing that comes to our mind are the fears of government intervention and total control in the Orwellian 1984 (written 30 years earlier in 1955). However there’s another amazingly prescient reference for 1984, and that’s the now cult classic but almost unwatchable film “The Terminator”. Looking at the Terminator with a critical eye in the context of our hopes and fears of the future, it wasn’t far off as an analogy. It wasn’t humanity that was terminated, but entire industries and lines of employment. (floor traders on the NYSE are maybe the rebel group “the resistance’? Nasdaq or Bats is “Skynet”?
    The Radio Shack advertisements above instilled in us a great sense of hope for the future, but also brought along a nagging fear that the line between human and machine would someday be blurred; a fear that someday our actions would be governed by machines. The Terminator movie is an amazing analogy for this. Is it not incredible that the writers of the Terminator could look at that 4P portable above (Even my beloved Commodore 64 with its consumer friendly interface was still a year or two away) and dream the following scenario-
    when Kyle Reese explains the future to Sarah Connor he says “networked computers, New and powerful, hooked into everything, trusted to run it all. They say it got smart, a new order of intelligence. Then it saw all people as a threat, not just the ones on the other side. Decided our fate in a microsecond: extermination. ”
    It’s amazing that someone could look at that advertisement from Radioshack in 1984 and predict that in 30 years we would all be networked and “controlled” by computers, our dark fear and our propensity, however (as noted by LarryG and Lyle and others post above) is that computers will remain in the great debate of termination (the old ways) vs creation (new ideas and methods). It is incredible to think about the 1955 idea of 1984, and the 1984 view of today and the role of the networked computer in both.

  10. Technical point, RAM is not speed. It is a measure more of the complexity of programs. More RAM more program functions can be stored in the operational memory, it also allows the CPU to store temporary data in the RAM instead of using the local hard disk which is much slower from an input/output.

    The actual speed of computers, comparing something similarly sized today woud have 12 cores, 2 Intel Core i7 (hexcore), with a combined number of million instructions per second, MIPS, of 355,500 MIPS @ 3.3 GHz. Compare this to the venerable Intel 286 which was 2.66 MIPS @ 12.5 MHz. From a computational perspective a good tower today is 133,630 times faster than the box of yore.

    Please note this does not include the graphics processor. AMD/ATI Radeon 7970 (released 2011) clocks in at 2,176,000 MFLOPS (Million FLoating Operations Per Second) to the ATI Rage 3D (released 1995) which clocks at 40 MFLOPS. Here today’s graphics cards are 54,400 times faster than in 1995. You can add an order of magnitude for the 1984 comparison, I just don’t have the data.

    With code standards line OpenGL the computer can use the GPU processors for simple repetitive computations, when not being used to render 3D graphics for the Retina display’s at screen refresh rates that are insane.

    Computers today are about 200,000 times faster than the ones we had in 1984. Someone complained about the loss of jobs in traditional industries, but ignores the jobs that were created in new industries. How many software engineers were there in 1984? How many CPU foundries were there, employing how many people? Do not lament the change in structure of a society. If we were to hold everything constant I would not have my 8-core computer that I am typing this on with 8ft^2 of display surface, an iPhone 5 on my hip that would best my old Mac G3 tower (1994 vintage). While reading the WSJ on my iPad 3. I would not have the computational power to perform the coding that I do in my home for research and invention (I’m an engineer). I have the ability to do 4D modeling in my house of physical structures including harmonic and stress analysis, something not even possible on the fastest super computers in 1984. Computers revolutionized my ability to create and for our ability to communicate. Do you remember the old BBS back in the early 1990′s or when you got your first email account, AOL instant message, text message, tweet, facebook tag? In 1984 we had one phone line in our house that had a 600 baud modem, my mom used them for her work. I have a 12MB/s line in my house today. I can watch any HD movie instantly listen to any song, watch you-tube what ever and not even notice the connection. How many people are employed in creating this digital media, in running and administering the data centers that consume more power than small cities. What about the increase in electricity demand? The jobs employed there. The engineering services and maintenance services to those plants, the people employed in fuel production?

    To the person who laments the “loss” of jobs due to the digital age, you can take your statism and shove it.

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