Information technology's impact

To the Editor:

The June 22 and 29 columns on the impact of computers were very stimulating,
and I agree with everything Gene Epstein says. In particular, he makes an
excellent point that "profits aren't a proxy for productivity at all, but
usually just a small piece of the action."

I remember a conversation with a former college classmate of mine about 15 
years ago. He was then working for Citibank and had just come from a meeting 
where an outside consultant had disparaged computers' role in banking on the 
ground they had not led to a rise in profits. My response was that profits 
are a function of competition, and the relevant measure was to check what 
happened to banks that didn't invest in modern information technologies.

Andrew Odlyzko
Berkeley Heights, New Jersey