Libertarians don't disagree that the government funds businesses, they disagree that it should do so.
I don't know why you think this would upset libertarians, myself included. Much of the problem we have with public funding* is that it privatizes gain and socializes loss, thus distorting market outcomes.
IP is more controversial among libertarians, and I will grant that many libertarians support it on psuedo-Lockean grounds -- though many oppose it in whole or in part because of the market distortions it can create and because it restricts the peaceful behaviour of others.
*I do not object to all public funding.
The core issue is that while it may be true that the state does have initiatives to fund business innovation there is a false choice being presented. The example of Apple suggests that if the government didn't give them a grant they wouldn't exist. The problem is that we can't say that for certain at all. We don't know the outcomes in a world where the taxes or loans taken to pay for those grants didn't happen. It's not possible to say if the outcomes would be better or worse (for the cause of Apple Computer at least) had that grant not existed.
The state is a mixed bag. They currently take 15% of my income to pay for my "retirement" when if I had been able to save that I'd end up far more secure in my retirement than I will with social security. But that said they are using that money to pay for the life support that a lot of people need. Mix that with the constant wars and you can understand why crediting the state for its' light in a world of darkness is misguided.
There are a lot of other odd statements in here too such as describing the state as a risk taker as if the state is ever punished for its' failures. People don't even remember most of the CIA's failures as they line up for war behind its' current allegations in Syria.
"The economy relies very heavily on the state sector. There is a lot of agony now about socialization of the economy, but that is a bad joke. The advanced economy, high technology and so forth, has always relied extensively on the dynamic state sector of the economy.
"That's true of computers, the internet, aircraft, biotechnology, just about everywhere you look. MIT, where I am speaking to you, is a kind of funnel into which the public pours money and out of it comes the technology of the future which will be handed over to private power for profit. So what you have is a system of socialization of cost and risk and privatization of profit. And that's not just in the financial system. It is the whole advanced economy." (http://www.stwr.org/global-financial-crisis/the-financial-cr...)
That's from Noam Chomsky, an anti-capitalist who favors forms of anarcho-syndicalism. Obviously, it's hard to bring up such opinions in polite company. Much easier to quote Mazzucato, who'll present the truth in a more politically correct way... :)
Libertarians would have a much easier time living with the government if they just thought of it as a corporation, upon whose land they work, live and play.
The 15% income fee is merely the cost of doing business.
Welcome to Disneyland, ahem, I mean, America.
The issue is, what happens if you decide you don't want to do business with that entity anymore?
In case of state, the punishment is prison and, resisting that, death. That is the part that libertarians object to, and it doesn't matter whether that entity calls itself "corporation", "mafia" or "government".
With a government -- or a corporation supported by crony capitalism, which is just more government -- a program doesn't have to convince the payers that it's worth paying for. It just has to convince those with the power to take money from others by force to do so and give them some of it.
Not if you believe that governments derive their power from the consent of the governed.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,
That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
You may be joking, or pushing a theoretical concept, I have no way of knowing. But coming from eastern Europe, I find this world view of your-life-as-leased-from-government disturbing.
Because you know, the next step to "the government owns all lands" is "government owns all babies, and if they don't like how you raise it, they'll 'take it back'". It's all been here before.
And while you may think you have some great solution, wherein you can be sovereign on your land and somehow not have to personally defend it from nation-state level adversaries, those of us acquainted with the real world know this not to be the case. So, we end up with governments, and those governments are generally pretty shit, but they beat the hell out of the alternative.
If you really want sovereignty, then rather than wasting time with the typical libertarian bullshit, whining about how taxes are violence and so on and so forth, you should instead be putting everything you have behind space exploration. The only practical return to individual sovereignty is the return of sufficient unclaimed land, and the only way for that to happen without a lot of people dying is for us to raise our sights to living other places than Earth.
Do you know how USA itself was formed?
You sound like a somewhat uninspiring, jaded person, but that's your problem. I just don't like people spreading FUD. There's a lot that can be done, here on Earth, to improve liberty and individual freedom. Which is, by the way, not mutually exclusive with supporting space exploration (false dilemma).
> The issue is, what happens if you decide you don't want to do business with that entity anymore?
> In case of state, the punishment is prison and, resisting that, death.
My claim is that if you stay on that government's land, you are not in fact choosing not to do business with that entity. Period, nothing more.
Nowhere did I claim that you have to accept the status quo. Nowhere did I claim that nothing can be done to improve liberty or individual freedom. Those are positions that you attributed to me because you aren't arguing against me, you're arguing against a straw man instead of taking the time to understand what I'm telling you.
Space exploration isn't necessary to improve liberty or individual freedom, it's necessary for a return to individual sovereignty without many people dying. You're welcome to improve liberty or individual freedom all you want, either from inside the country or outside of it. What you can't do is live inside of the country but somehow consider yourself above that country's laws because you have an eternal inalienable right to sovereignty. No government recognizes that right, because if they did governments could not function. You can have life, you can have liberty, you can have pursuit of happiness. Sovereignty is not on that list.
No argument there :-)
> They currently take 15% of my income to pay for my "retirement" when if I had been able to save that I'd end up far more secure in my retirement than I will with social security.
You would, but many others wouldn't. The point of collective plans like this is that it spreads the wealth around to people who otherwise wouldn't have any. Whether you think this is fair is another discussion entirely, but that's what it's meant to do and it does it reasonably well.
> Mix that with the constant wars
This is a problem, yes. The state has little incentive not to be wasteful and the US state has been particularly wasteful in this regard.
> There are a lot of other odd statements in here too such as describing the state as a risk taker as if the state is ever punished for its' failures.
Which is the point, I think. The state can afford to take risks precisely because it won't ever be punished for failures. This leads to waste, but it also allows for investments to be made in endeavors that would be far too risky for a party subject to market forces to take on.
This is the crux of the problem and why the OP makes a compelling argument.
We live in a world of "innovation" where the driving force behind it is a conglomerate of VC's whose primary concerns are their multiples and the next fund. They are people without long-term vision.
We also live in a world where political are small men and women proposing small ideas because their primary concern is the next election cycle.
What ever happen to greatness?
"We're putting a man on the moon in 10 years."
"We're building a national highway system."
"We're building a weapon that will end wars."
Where did the will go? Where are the cries of:
"We'll be free of fossil fuels in 10 years."
"We're sending a person to Mars by 2020."
Or if you like wars on abstract combatants that never end:
"The war on ignorance"
Someone needs some vision. And right now, nobody has it.
They didn't have a choice - population growth in an agrarian country was a disaster for the country. They had to do something or see their country plunge into famine and chaos. And therein may be your answer - they did it because they had to. Western societies can coast a long way on the momentum they have picked up earlier.
Necessity is the mother of innovation.
It is, but it is not the driver of it. China was an agrarian country with insane population growth before Deng Xiaoping took office and yet the remedy of the government at that time was to increase population growth even further and spur on the youth in some sort of whack job ideological frenzy.
At some point, some people took some responsibility and turned the ship around. To my mind this is the most important thing to keep in mind about the current Chinese government: it may be staggeringly corrupt and have an absolutely frightening human rights record, but for the past thirty years it has done a surprisingly good job in reducing poverty for hundreds of millions of people. This does not mean they should be forgiven their abuses, but their successes definitely deserve credit.
Can you clarify? Wikipedia does not seem to support your statement:
Increase population growth: One of Mao's slogans was "The more people we are, the stronger we are". Some graphs here: http://www.slideshare.net/isc/china-population-policies
Having a few billion dollars in your pocket is great, but it's no substitute for controlling the wealthiest and most powerful nation on Earth.
It terrifies me that the entire murdoch empire is pushing for the latter. ( http://www.macrobusiness.com.au/2013/08/rudd-sticks-it-to-bi... )
Edit: More examples - http://i.imgur.com/MyU1MDV.jpg
HN discussion at https://news.ycombinator.com/item?id=6194175.
I'm surprised at how controversial it is. The facts aren't in dispute. Are they?
I grew up in a small state in Australia. Business there keeps close with state government: there is a stench of cronyism about much of what goes on. The standard business model there is to wait for a state government grant structure, and then weasel up to it with the right paperwork and hand-shaking to get what you want. Within the bureaucracy you have people lining themselves up to bounce out into firms.
The government maintains high taxes, and then spends those taxes either tying itself to emerging business like this, or propping up failing business like car companies. And it needs a large, skilled public service to keep it all moving. The result is that labour that could be used doing something people want is wasted, and it's harder to operate free business due to the high taxation and bureaucracy. It's not a stalled situation: many good people do still find good, rewarding local jobs creating real value despite this. But a lot of talent drains away, and there's not much innovation despite a healthy university culture.
The way things work in world cities is different and better. For the most part, the more government stays out of business, the more success there is.
Perhaps Apple did receive some benefits in the early years. Where benefits are there for the taking, it is rational to take them. But it is not evidence that such benefits were critical to the success.
Governments don't pick winners - only their mates. For progress, look elsewhere.
As an example of a paragraph that just doesn't work, "Other ways include giving the state bank or agency that invested a stake in the company. A good example is Finland, where the government-backed innovation fund SITRA retained equity when it invested in Nokia. There is also the possibility of keeping a share of the intellectual property rights, which are almost totally given away in the current system."
* Repeatedly we see state investments in companies pursuing political objectives with their shareholding at the expense of development or the company's interest. Look at the way Lower Saxony hampers Volkswagen's development. Or oil companies anywhere they have been nationalised (Venezuela, Mexico, Russia).
* Picking Nokia as an example of innovation?
* Intellectual property is an idea created entirely by government for the purpose of picking winners. It has no philosophical underpinning - it's just arbitrary regulation.
* "which are almost totally given away in the current system" - what does this even mean?
She used Apple as an example too, which around here is uncontroversial. If you want to learn more, she wrote an entire book explaining the article's statement: "And every technology that makes the iPhone a smartphone owes its vision and funding to the state: the Internet, GPS, touch-screen displays, and even the voice-activated smartphone assistant Siri all received state cash. The U.S. Defense Advanced Research Projects Agency bankrolled the Internet, and the CIA and the military funded GPS."
Furthermore, she clarifies in her TEDx talk , that Nokia's problems are its own executives' misjudgements, as is clear. (Just as the US isn't responsible for every failed US tech firm.) Nokia obviously did quite well from state subsidies, just as US firms do. (I recommend this TEDx talk, which goes deeper into the context than the brief Slate article.)
I find Mazzucato quite reserved in her critique of religious economic ideology, despite people willfully reading "madness" into a brief Slate essay, rather than carefully investigating her work. Not only did she explain in a book, but she even made a Youtube channel investigating this theme with other economic/political figures.  Her work came from an INET grant , not an insignificant institution. 
Because a government offers funding at a low rate and an entrepreneur takes advantage of such a rate doesn't mean the government "innovated".
I think NASA and the moon are a good example of innovation in the relm of war. The space race was about international posturing and displays of technological capability as a deterrent to engaging in nuclear war. Of course we lost most of the "events" of the space race save putting someone on the Moon.
It seems plausible governments could be innovative as they are comprise of humans and humans can create things regardless of context.
Long scale planning certainly is a strength of a government, because in theory in means funding can be coerced from citizens and invested into projects that they wouldn't normally choose of their free will via the marketplace -- but they often simply don't invest in good long term projects.
Perhaps I'm wrong.. the promise of wealth seems to be a primary motivator, and since governments amass large sums of money through coercive taxation, I suppose they can be a motivational source for inventors and entrepreneurs, but I'm just not comfortable with saying governments are more innovative than individuals.
* More accurate to say "governments are more innovative than corporations."
* Governments employ workers for wages, like corporations. For example, innovative mathematician Terence Tao is employed at UCLA, a public university. (Which paid him $433,599.99 in 2012. http://www.sacbee.com/statepay/)
* Corporations are artificial creations of the state. Feel free to look at their history. Government and corporate interests are the same, to a first approximation. They're both part of the same (state-capitalist) system.
BTW, the point is obviously her book contains relevant evidence.
Nonsense. If that were true, then government wouldn't contract so much of their "innovation" out to corporations. I used to work for a corporation that did a lot of this "government innovation", and the primary role of government was to figure out which corporation would do the innovating, make sure it got done, and then to pay them.
Our biggest competitors were other corporations. Yes, we had some competition from government labs, but not much. We and our corporate competitors could create whole new staffed divisions in a half-dozen promising areas in the time it took a government lab to argue over whether to use this year's budget on a new framatron or a pizza oven.
We also had some competition from research universities, but even there, the public universities were hardly more "innovative" than MIT, Caltech, Stanford...the private corporations.
Some of the things we came up with at taxpayer expense were worthless. What could taxpayers have come up with if their money hadn't been confiscated and given to us? Some of the things were valuable (I think), but nothing that we couldn't have produced if paid by companies (as we often were) instead of a government agency.
And all this stuff about how we owe the Internet to government is hooey. It's as if packet switching could only have been invented by someone paid with confiscated tax dollars. People who were paid by non-coerced customer revenues could never have thought of it, and if the government hadn't invented it, it wouldn't exist today.
Just because the government had its fingers in something doesn't mean it played a necessary role. It tends to stick its fingers into nearly everything, but that doesn't mean it plays a useful role in more than a few of them. Most of those innovations where the government was first to do something would have been done just as well not long after by someone else if the demand for it were real (people voluntarily spending their own money) and not just political.
Way to read your own ideologies into my simple statement. It's unnecessarily arrogant to think you can glean so much from a two-sentence remark on your attempt to belittle state-based innovation and oversimplification of reasons behind contracting corporations for state needs. Nothing in my simple statement precluded recognition of economic complexities or suggested the state was in charge.
We can disagree all day long, and you can go about your business suggesting the state is a monstrous oaf stealing money from people with jack-booted thugs, giving it away to get votes, and the persons from whom they stole the cash got absolutely nothing out of the 'theft'--but piss off with this patronizing bullshit of calling a different view that of a child.
You've heavily laden a ridiculously partisan view of economy with a ridiculously partisan view of the state, and ultimately say nothing helpful or enlightening.
For someone who allegedly sits so high above, fathoming complex adaptive systems, you sure relegate the state to a role of simplicity and hand-waving, touting garbage as incontrovertible truths.
The state takes everyone's money by force without trading anything for it? What a useless view that shows no comprehension of political theory and the complex adaptive systems we establish in social and political institutions as actors who engage and transact.
The ability to make a book in service of own's argument is evidence of a great deal many things: at the very least, dedication and conviction to one's argument.
The space race was about international posturing and displays of technological capability as a deterrent to engaging in nuclear war.
This is 100% valid, and yet it resulted in us putting a man on the moon, so you haven't really detracted from the argument.
Or confidence in one's ability to fool the market.
As we human beings live in a complex system such as country. The old fashioned "long term planning and executing accordingly" in the long run actually does way more harm. Misallocating resources, killing the possibilities each individual could bring to the system, killing the necessary environment for more diversified individuals to grow up from infants... If taking the similarity to animals' as a spectrum (no offense). A low level trait means things like food needs, shelter to live. A high level trait means the things people created such as art, tech... What I believe may be wrong, but I think as humans, the high level traits are the ultimate things we are looking for. Bringing in more possibilities and catalyze some of them might be a good way.
As a side effect we got positioning, communications and earth observing satellites, all the sciences have had massive benefits and the extra research into stuff like photovoltaics hasn't hurt either.
You're right about funding being coerced from citizens. There is also nothing theoretical about it, as anyone who has dealt with the IRS can probably tell you.
As to long scale planning certainly being a strength of a government, I offer you the national debt of the United States of America as evidence. The long scale planning done by politicians has the national debt, including unfunded liabilities, at something like 80 trillion dollars or more.
Funny you should say that, because the Communists used to make pretty much the same case (but obviously in reverse). Yes, the world has functioned for a long time with private property, and some social benefits may even have accrued from it. But that doesn't mean capitalism is good at all; let's abolish it, we can build a much better economic system from scratch. The extremist position that everything good can and should come from the market system alone is about as nasty as its reverse, my friend.
You need to realize that voluntary exchanges are the basis of all economic activity ever. There is no economic system to be "built" - there are only exchanges to be made.
Every single one of us is out to benefit from voluntary exchanges, but that's alright because so is whoever you're trading with. If you don't think you'd benefit from a particular exchange, you just won't go through with it. If an exchange happens, it means both parties perceive it to be aligned with their personal interests. In other words, voluntary exchanges are a good thing, and it makes no sense to curtail them.
Sure, so-called "crony-capitalism" is a problem, but that doesn't mean Capitalism itself is problematic.
I think you've misread my comment: I was condemning the Communist position, not defending it. Capitalism has historically functioned as an economic system only. There are important human activities, with heavy economic impact, that have nowhere been successfully conducted through financial, market-based "voluntary exchanges". Politics would be one (I sure hope the market for Congressional votes is inefficient), and basic scientific research another.
>> But that doesn't mean capitalism is good at all; let's abolish it, we can build a much better economic system from scratch.
You suggested "building" a "much better" "economic system".
I'm suggesting Capitalism is not much of an "economic system", assuming I'm right about it consisting of voluntary exchanges, and that the idea of building an economic system is flawed. There's Freedom, and then there's Coercion. The latter doesn't result in desired outcomes.
> Politics would be one (I sure hope the market for Congressional votes is inefficient), and basic scientific research another.
Well, political power is clearly up for sale, and eagerly bought all the time, all over the world. That's not really relevant to the economy though, nor is "basic scientific research". Research happens when scientists do what they love doing - some kind of economic incentive for doing that can be arranged somehow, when necessary.
I'd suggest you revisit your history, specifically David Ricardo's Political Economy, a theory for which he purchased a seat in England's Parliament in order to spread its precepts (Arnold Toynbee describes this in his Lectures on the Industrial Revolution). Later championed by the banker who purchased his personal papers, as well as The Economist Newspaper, whose founding prospectus declared that "free-trade principles will be most rigidly applied to all the important questions of the day."
Some imaginary capitalism in books, maybe. In the same way that socialism was perfect in books but not so good in actual the USSR, say. If we are to judge a thing, we should judge it by how it manifests and what it does in real life, not what it's theoritically about.
For one, in real life, very few activities are voluntary, because people have to feed themselves, and some have money and jovs to offer, others lack it. We don't all start from the same starting point. Voluntary doesn't mean the same thing for the afluent and the needy guy. One can actually do what he pleases, the other just has the option to weight his limited options and pick one.
As for "wealth being accumulated" it sure does. Mostly to a handful of people that take a horribly disproportionate share of the pie.
You wrote "voluntary exchanges are the basis of all economic activity ever", but I think we really must restrict ourselves to say only that "exchanges are the basis of all economic activity ever". The degree to which any exchange can be considered voluntary varies widely, as far as I can tell, and also seems very much to be in the eye of the beholder.
For example, if I walk into the local corner shop for a bottle of water, and can only find one brand, not the one I want, is that a voluntary exchange? How about if I am in a desert dying of thirst and a man offers to sell me a bottle of water? Or if under some bizarre regime I am ordered to buy a particular bottle of water to prevent my family being shot?
It seems hard to deny that the latter case is coercive, but I think some people might contest the other two. But is the desert water seller coercive if he fails to tell me that he bottles his water from an oasis just over the next dune? And is the shop owner coercive if he doesn't point out the much cheaper bottles tucked away on a shelf in the back of the shop?
In pretty much every exchange we make there is an asymmetry of information, and that asymmetry can and is exploited to make 'unnatural' gains. This is most obviously so if you reduce it to the absurd and imagine an entity that controls all information - there is clearly the possibility of coercion, in the sense of convincing you to make exchanges that you wouldn't otherwise. Given the profit-seeking nature of our system, the possibility in the absurd case becomes a near certainty even in the limited case, as people are incentivised to manipulate each other to induce favourable exchanges.
I find it very difficult to separate manipulation and coercion, and to see a person under the influence of either as acting voluntarily. Can anyone offer some reasoning to clear it up? I can only see shades of grey.
"For example, if I walk into the local corner shop for a bottle of water, and can only find one brand, not the one I want, is that a voluntary exchange?"
Yes, it's voluntary, you can either buy it or not. The shop owner has no obligation to stock any particular brands.
"How about if I am in a desert dying of thirst and a man offers to sell me a bottle of water?"
If you are actively dying of thirst, then the shop owner should do what he reasonably can to save your life, on the principle that, absent other considerations, it's rational to extend basic good will to others.
If your life is at risk and you cannot pay his price, then you should do whatever you have to do to get the water. At that point, it's either you or him and in such a situation, the concept of rights goes out the window.
"Or if under some bizarre regime I am ordered to buy a particular bottle of water to prevent my family being shot?"
Again, you do what you have to do to protect yourself and your significant values. So you buy the water. This is obviously coerced, not voluntary. Coercion implies a disregard for your rights, and so there is no obligation for you to extend rights to him.
For the other two cases I agree with your assessment, though I'm not sure that it is strictly "rational to extend basic good will to others". I do think that is the right course of action, I just don't think it is rational. That kind of behaviour is rational in situations where it might be reciprocated, but when no-one is going to know either way, I think that good will is only extended as a cultural artifact (which is a very good thing!)
You can either buy it or leave it. The decision to buy any brand is voluntary.
As for the guy selling you a water bottle when you're dying of thirst, it depends. What's he asking for it? $1.00 for a bottle of water when you're dying of thirst? -Seems reasonable. But demanding $1 million for the water would not be. Is the exchange voluntary?
If you've got two options: A) Buy water, or B) Die, it kind of works both ways. Theoretically it's voluntary, because you can just choose to die instead, but in practice, you would do whatever it takes to get that water.
But what does it matter if that particular exchange is voluntary or not? Basically, you just started picking apart my original statement that "voluntary exchanges are the basis of all economic activity ever", but to what end?
>> In pretty much every exchange we make there is an asymmetry of information, and that asymmetry can and is exploited to make 'unnatural' gains. This is most obviously so if you reduce it to the absurd and imagine an entity that controls all information - there is clearly the possibility of coercion, in the sense of convincing you to make exchanges that you wouldn't otherwise. Given the profit-seeking nature of our system, the possibility in the absurd case becomes a near certainty even in the limited case, as people are incentivised to manipulate each other to induce favourable exchanges.
We're all actively pursuing our personal gain through whatever (voluntary) exchanges we decide to participate in, but it's important to note that there's no absolute value to be assigned on each side of some specific trade that's about to occur. The value an exchange offers you is partially subjective, and therefore varies case by case.
It's enough that both parties in an exchange consider it acceptable. In other words, both parties perceive enough benefit in the exchange to actually go through with it. Otherwise they'd just move on to find something else.
This works out beautifully, because a business will always sell its product to you at a price higher than what it cost to produce, but at the same time, you value your gain higher than the loss of your money. Both parties benefit.
 Otherwise the business would go out of business.
>> Given the profit-seeking nature of our system
It's not the "system's" nature to be profit-seeking - it's human beings'. The pursuit of personal gain applies to each and every one of us, and happens to be the reason why there are any businesses (& jobs!) at all.
I'd argue that what's generally called (and self-describes itself as) capitalism has largely earned that reputation.
fundamentally it just means people engaging in voluntary exchanges
Well, that's the free-market aspect of free-market capitalism. Which, as Adam Smith notes, isn't particularly easy to attain. And as many observers since Smith have noted, especially as amended, focuses on efficiency to the sacrifice of equity or sustainability. Markets also, it's become very increasingly apparent, have very substantial externalities, both positive and negative, which lead to increasing distortions of underallocation to behaviors in which positive externalities are prevalent (e.g., free software, public education, universal healthcare) and overallocation to behaviors in which negative externalities are prevalent (e.g., acute pollution, tobacco, addictive drugs, processed foods, greenhouse gas emissions).
wealth is accumulated, and invested
That is the heart of capitalism: capitalism itself concerns itself with the accumulation and investment of accumulated real wealth. That last is often shaded to include financial wealth accumulation and investment, which need not itself be net productive (see "rent-seeking" and "catabolic collapse"). A problem of capitalism is that the same self-interested motives which can be harnessed for productive activity can equally be harnessed for activities which provide private benefit but social costs (see negative externalities above).
voluntary exchanges are the basis of all economic activity ever
Written by someone who's either never heard of, or is unable to admit, slavery, coercion, blackmail, forced options, and other circumstances in which decisions are made under duress or lack of any feasible alternative.
Every single one of us is out to benefit from voluntary exchanges, but that's alright because so is whoever you're trading with.
Not if the game is structured to explicitly benefit one side or the other. E.g., "contracts of adhesion", monopoly provision of communications or broadband services, toll authorities, agribusiness conglomerates structuring "intellectual property" laws to forbid saving and planting of seed grain, eternal copyright extension, etc., etc.
that doesn't mean Capitalism itself is problematic
Identified problems in one area of a practice doesn't mean a freedom from problems and conflicts elsewhere. So your conclusion is largely moot and void.
Are "slavery, coercion, blackmail, forced options" economic activity?
Not if the game is structured to explicitly benefit one side or the other.
That's not a voluntary exchange, now is it?
There are ways of modifying transactions to increase the total social gain. And you'll note that Adam Smith's title was On the Wealth of Nations. Not, say, On the Ever Increasing Wealth of High Net Worth Individuals. His awareness of social issues and concerns in economic activity was much higher than many modern writers who claim to follow him give credit for (though those who've actually read him know better).
How would you construe slave trade, coerced financial transactions, and strong-handed bargaining if not "economic activity"?
anoncowherd had stated "voluntary exchanges are the basis of all economic activity ever." (Emphasis in original).
So, you're either tautologically defining "economic activity" as only being purely voluntary transactions, which begs the question of what all this non-economic commerce that's going on should be called, or anoncowherd's statemens was, as I said, flatly false.
If you're going to base your defense of free-market capitalism on the presumption of purely voluntary exchanges, you've got some 'splainin' to do.
Suggest you read John Perkins, Confessions of an Economic Hit Man while you're at it.
Coercive institutions can take money (or labor) from one person and give that money (or the product) to another in exchange for something (e.g. taxes for roads and a peaceful, secure society and harvested crops for money in the case of slavery), and some would consider that economic activity, but I don't think OP was lumping that in, nor was I.
In other words: "Because there are externalities, the negative ones will outweigh the positives"?
Why would that be? You say public education and public healthcare would be good things, but won't you please think of the "externalities"!?!?
Here's a simple question with profound implications: How prudently do people use other people's money? Here's another: If people can't be fired, will they strive to do a good job anyway?
Why does education need to be public? Is there something you couldn't be taught by a private school?
> A problem of capitalism is that the same self-interested motives which can be harnessed for productive activity can equally be harnessed for activities which provide private benefit but social costs (see negative externalities above).
So they can, but that won't change. No matter how much Coercion you throw around, there will always be some people who don't give a fuck about other people, or nature, or whatever.
On the other hand, self-interest can also guide people towards minimizing externalities. For example, Apple knows its customers don't want nature to get raped, so they go through a lot of trouble to produce computers in a "greener" way.
> Written by someone who's either never heard of, or is unable to admit, slavery, coercion, blackmail, forced options, and other circumstances in which decisions are made under duress or lack of any feasible alternative.
Well, I didn't say that voluntary exchanges constitute all economic activity ever. On top of that basis, there's room for non-voluntary exchanges too. The point was that an economy is a massive "network" of voluntary exchanges. But I don't think coercion is relevant here. For example, it's safe to assume that slavery or blackmail have nothing to do with any of the exchanges you've made in your life.
> Not if the game is structured to explicitly benefit one side or the other. E.g., "contracts of adhesion", monopoly provision of communications or broadband services, toll authorities, agribusiness conglomerates structuring "intellectual property" laws to forbid saving and planting of seed grain, eternal copyright extension, etc., etc.
What do you think the source of these particular problems might be? Hint: It's not Capitalism. What might it be that "structures" "the game"?
> Identified problems in one area of a practice doesn't mean a freedom from problems and conflicts elsewhere. So your conclusion is largely moot and void.
I can't tell what you mean by that. But here's a mysterious statement right back at you: Humanity involves intractable problems.
In a rational market, the skew will be toward increasing negative externalities and away from positive externalities. That is: the market exacerbates the problem.
How prudently do people use other people's money?
That generalizes to "how well do people make decisions affecting others". Free-market capitalism optimizes for the "spending your own money" part of this, but as we've already discussed, not the "taking into consideration others' costs". Money is simply a subset of this.
Traditionally, in cultures with a stable economic base (that is, not radically growing or shrinking, and with a relatively stable technological level), much of this is determined by custom, taboo, and institution, where the overall goal is stability. Much of the response of Smith, Ricardo, and the Age Enlightenment generally, was to a world in which the underlying resource base had substantially expanded (first from coal, then with the addition of oil and natural gas), with resulting massive shifts in technology, the economy, customs, and institutions. Free market capitalism was, in many ways, a response to be able to make more effective (and rapid) use of this resource base. Countries which resisted were "backwards" (though stable). Japan would be a case in point, characterized as indolent and lazy at the beginning of the 20th century (already over 40 years after the end of Sakoku). Ultimately, however, most countries found they had to accept the game, at least in part, merely to stay even and/or sovereign.
For more on management through bottom-up or top-down methods for long-term survival, see Jared Diamond's _Collapse_, in particular chapter 9. Effectively they address your question, optimized for social survival, not individual wealth.
No matter how much Coercion you throw around, there will always be some people who don't give a fuck about other people, or nature, or whatever.
You can avoid giving them legal sanction, which is a damned good first step.
Well, I didn't say that voluntary exchanges constitute all economic activity ever.
ORLY? "voluntary exchanges are the basis of all economic activity ever".
I mean, you're more than welcome to admit you were wrong. I prefer to make a practice of not insisting on being wrong myself, but that's just me.
For example, it's safe to assume that slavery or blackmail have nothing to do with any of the exchanges you've made in your life.
You'd be wrong. Slavery indirectly, blackmail directly.
Regarding the former, one of many citations: http://www.washingtonpost.com/wp-srv/inatl/longterm/china/st...
What do you think the source of these particular problems might be?
(Referring to "the game is structured to explicitly benefit one side or the other."). My point is that these effects are endemic to the modern capitalist system, and are often championed by it. I'll note that Adam Smith himself argued for significant involvement on the one hand by governments to prevent such abuses, as well as a propensity for governments to be engaged by commercial interests in exacerbating them. Later pretenders to capitalism and in particular laissez-faire principles (which Smith never discusses and didn't endorse) make the problem rather markedly worse.
I'd chalk the problem up generally to the tendency of power to accumulate and consolidate, regardless of whether you're discussing political, corporate, military, communications, or social power. It's that old Iron Law of Oligarchy. The problem as exemplified in the present market-capitalist-financial system is that it fails to acknowledge or address the problem.
It's less a specific fault of capitalism than a general fault which it doesn't resolve. And it's a fault which can well destroy it (as Marx noted -- his diagnoses were insightful, I disagree with his prescriptions, however).
I can't tell what you mean by that.
Noting that one fault of capitalism (crony capitalism) doesn't mean it's fatally flawed, doesn't mean it isn't fatally flawed.
Humanity involves intractable problems.
Oh, they're tractable. You just may not care for the tracks. Or as GE CEO Jeffrey Immelt said: "We know what the solution is. We don't like it."
> In a rational market
Rational, huh? People make exchanges in pursuit of their personal gain. That is constant.
Some exchanges are better than others, but every single one has at least a perceived benefit to both parties. What's rational got to do with it? Sure, some people are better at pursuing their personal gain than others, but that kind of fluctuation just blends into the massive web of exchanges that contitutes an economy.
> the skew will be toward increasing negative externalities and away from positive externalities. That is: the market exacerbates the problem
That's quite a vague claim. Care to elaborate? What does that mean and why does it happen?
> That generalizes to "how well do people make decisions affecting others". Free-market capitalism optimizes for the "spending your own money" part of this, but as we've already discussed, not the "taking into consideration others' costs". Money is simply a subset of this.
It's blindingly obvious that people are much more careless when using other people's money. That was my point. The end result of that fact is that whatever someone using other people's money is ostensibly trying to achieve, he just won't be very efficient about it. In fact, the guy using someone else's money doesn't even care about efficiency. He just cares about his personal gain, just like every other human being on the planet, regardless of how free a market he's operating in.
To re-cap: Suppose Person A is a politician in charge of a budget, and Person B is an individual using his own money. Both of them only give a fuck about their own personal gain, but Person A will just blow away as much of other people's money as he sees fit, whereas Person B will be careful in how he uses his money.
> Free-market capitalism optimizes for the "spending your own money" part of this
What does it mean to "optimize" for the "part" of spending your own money? That's what us little folks do in any case.
> but as we've already discussed, not the "taking into consideration others' costs"
Again, the politician doesn't give a flying fuck about others' costs - he's using others' money, for fuck's sake. By definition, every single expenditure he decides on is a cost to others.
> For more on management through bottom-up or top-down methods for long-term survival, see Jared Diamond's _Collapse_, in particular chapter 9. Effectively they address your question, optimized for social survival, not individual wealth.
The fuck? It seems I asked a question, and for an answer, you're sending me off to read a chapter of a book? How about answering in your own words, or even paraphrasing what this wise old sage said in his book?
>> No matter how much Coercion you throw around, there will always be some people who don't give a fuck about other people, or nature, or whatever.
> You can avoid giving them legal sanction, which is a damned good first step.
Legal sanction? For not giving a fuck about other people? Can you guess what the ultimate "legal sanction" for someone who doesn't care about others is? -It's political power. In other words, sociopaths all over the world are rushing into their local governments.
My point was that these people do exist, and they'll do harm to others, and there's no way to legislate them out of existence no matter how hard you try.
>> Well, I didn't say that voluntary exchanges constitute all economic activity ever.
> ORLY? "voluntary exchanges are the basis of all economic activity ever".
Both of us want to be right, of course. But you started the nitpicking, even though you probably got the idea, especially after my previous response.
Tell me, can you see a difference between these two statements:
- Voluntary exchanges *constitute* all economic activity ever.
- Voluntary exchanges *are the basis* of all economic activity ever.
You brought slavery up as an example of a non-voluntary "exchange", though it's unclear if it can be called one, but buying that cotton from the farm is certainly a voluntary exchange without which there would be no need for anyone to pick the cotton. In other words, in this example, voluntary exchanges are the basis for the non-voluntary "exchanges".
But this is all beside the point. When I wrote that, I was thinking of how nothing would ever happen without voluntary exchanges, all the way from bartering with meat and tools back in the stone age or whatever, to clicking on a button to charge your credit card today. The point is that Capitalism is just voluntary exchanges. Money is accumulated through exchanges (selling goods/services to your customers), and money is invested in exchange for equity etc. It's all exchanges.
Again, voluntary exchanges are the basis for all economic activity ever, and thus, it makes no sense to consider "Capitalism" a bad thing. What does the word even mean anymore, after getting hi-jacked by "Liberal"/Marxist clowns?
> You'd be wrong. Slavery indirectly, blackmail directly.
Oh alright then. Well, actually, I'm a slave, and so are you. So yay. Non-voluntary "exchanges" affect both of our lives! Now what?
>> Horror stories are surfacing anew about the Chinese prison labor system and the sale of its products in the United States.
Oh wow. What about all those American prisoners making license plates? Prison labor system, anyone?
> (Referring to "the game is structured to explicitly benefit one side or the other."). My point is that these effects are endemic to the modern capitalist system, and are often championed by it. I'll note that Adam Smith himself argued for significant involvement on the one hand by governments to prevent such abuses, as well as a propensity for governments to be engaged by commercial interests in exacerbating them. Later pretenders to capitalism and in particular laissez-faire principles (which Smith never discusses and didn't endorse) make the problem rather markedly worse.
You seem to be talking about the so-called "crony-capitalism" I already mentioned earlier. Yes, that sucks, but again:
>> What do you think the source of these particular problems might be?
What exactly are the "abuses" of the "modern capitalist system"? What is the "modern capitalist system"? Does it make sense to have the government try to prevent the abuses when the government itself enables them? Anyone from Wall Street gone to jail yet for, you know, obvious crimes?
> I'd chalk the problem up generally to the tendency of power to accumulate and consolidate, regardless of whether you're discussing political, corporate, military, communications, or social power. It's that old Iron Law of Oligarchy. The problem as exemplified in the present market-capitalist-financial system is that it fails to acknowledge or address the problem.
Dude. When there's a small group of people exercising absolute authority over everything that happens in some specific geographical area, what could possibly go wrong? Do you think the people in power like being in power? Do you think they might enjoy accumulating wealth (at others' expense)? Do you think they might dish out special favors to their buddies?
> It's less a specific fault of capitalism than a general fault which it doesn't resolve.
None of that has anything to do with an economy as such. An economy is just a massive web of exchanges, where each exchange represents two or more people pursuing their personal gain. People are perfectly capable of buying iPhones, food, clothing, and whatever the hell they happen to want or need without any central authority existing. There's no need to try and force any "economic system" on this web of exchanges, the best thing to do is just to let people pursue their personal gain because no amount of legislation will change the fact that people will. It's not an economy's job to "resolve" any political problems - it's enough for it to function.
Everything will sort itself out. You see, sometimes one person's personal gain involves, say, another person being able to trust that the water coming out of his brand new apartment's tap won't contain toxic chemicals from a nearby plant, or that the flight he's about to take will actually reach its destination.
This is vastly overstated. The ascendancy of the US over the past century is generally considered as proof of the supremacy of capitalism over all manner of controlled economies. Belief in capitalism is the default among people who are considered educated and reasonable. The anti-capitalism consensus often conjured by libertarians is an imaginary straw man.
Capitalism has no claim here.
Capitalism is, put most basically, a system under which trade and industry are controlled by private owners for profit.
That must be the case that some other article is making. This article is making the case that "it is this way", or more clearly that "it's a myth that entrepreneurs drive new technology; for real innovation, thank the state". Hint: it's in the title.
"In this era of obsession with reducing public debt—and the size of the state more generally—it is vital to dispel the myth that the public sector will be less innovative than the private sector."
where the implication is that we should continue to let the state fund innovation via procurement and internal research
I personally think a mixed economy is great, as long as there is a balance.
I think that historical evidence has shown that a mixed economy, with some of the taxes going to fund safety nets, nationalized health insurance (eg medicare) and education (eg vouchers), long term infrastructure projects (eg interstate highways), and subsidies for research projects (eg non fossil fuel based energy sources) does very well, and has been more stable than extremes of ideology, whether socialist or anarcho capitalist. So why not maintain what's been working well, and instead constantly advocate some ideologically pure utopian vision?
"A trend doesn't make a law" is a better argument when the trend under discussion isn't many decades or centuries old, and it's even better when your counter-hypothesis isn't an anecdotally grounded commonsense expectation.
As for the rest of your post, I don't think the claim is that every facet of government or everything that government does is innovative, or even that the innovative things are all-around good. Yeah, local government and state owned oil companies are usually going to be the pits. That doesn't mean a lot of next-level technology isn't coming out of spy agencies and military aerospace.
> Perhaps Apple did receive some benefits in the early years. Where benefits are there for the taking, it is rational to take them. But it is not evidence that such benefits were critical to the success.
The government paid for the development of computers. I doubt Steve Jobs could build an Apple I without the development of computers. Existence is a pretty critical foundation.
> The way things work in world cities is different and better. For the most part, the more government stays out of business, the more success there is.
Global financial crisis agrees with you. Like totally.
> Governments don't pick winners - only their mates. For progress, look elsewhere.
Innovation is angry birds, of course! If you want progress, instagram!
However australia is not an especially high taxing country by any means. And though a lot of government spending all over the country reeks of cronyism (mining infrastructure, road projects, desal plants etc etc), fed grants and research spending have been incredibly useful over the years. The main issue here is funding after the fact.
Lest you fall into the same fallacy you rightly pointed out, gov can and has picked winners, and has been responsible for much innovation, through funding or research, or just by raising living standards. Big business comes with the same issues of cronyism and bureaucracy.
The internet is an excellent example. Nobody would have predicted it would have taken off as it did, and so anyone who wanted to make an "internet" would have difficulty accumulating the capital for it. But since the military was able to build it without worrying about future profits, a large-scale and risky project was able to become a success.
The same is true of any long-term research, or any type of project that is primarily a public good. Most scientific research is not done with the explicit intention of "we want to make X", because what "X" is can't be known until you understand what is possible! But since nobody knows what is possible beforehand, investors aren't willing to invest in most research, because the simple advancement of scientific knowledge is something of public value and not private value.
I have no idea what point you're trying to make.
That's kind of a weird example to pick, given Volkswagen's origins.
Second, Russia is doing better now than it was at the tail end of the Soviet Union, but technologically it progressed far more during Soviet rule than it has since. Before the Soviet Union Russia was a total, agrarian, rural backwater. Chronically a hundred years behind the rest of Europe. The Soviets built all the technology and infrastructure that is keeping the country going to this day.
Really the issue is that Australia is a long way from consumer markets of any particular size. Australia has plenty of innovation, but it's not visible in general because it's not glitzy consumer-oriented hand-held stuff. In academia, we punch above our weight in medical research. Politically we've always been innovative - first place to legislate the 8-hour day, second to permanently bring the vote to women... and in the modern day, we're still trying new things, like the Minerals Rent Resource Tax. I myself have worked at one company that was at the bleeding edge of sleep medicine equipment, and at another company that was involved in high-tech agribusiness.
At the end of it all, it's easy to see Australia as not having the giants of the US in consumer products, but we don't have anywhere near the market size. We also don't have vast swathes of our shitty work being done by undocumented immigrants - the US economy requires this pool of labour to perform so well. To suggest it's just a matter of taxes and paperwork is misleading.
The financial controller at the sleep medicine place (mentioned above) found the differences between the systems quite phenomenal - the cost of compliance to the US tax system is much higher because it's so crazily complex.
The idea that the state is God is a rabbit-hole leading towards totalitarianism and the government being the one to pick the winners and the losers.
Crony capitalism thrives in a system in which the government is fully in control over a society and a society's economy.
Actually at first it makes the case that it has been this way up to now. And I say interesting because it's both true and based on history, and yet there are people that act as if it isn't.
The rest of your rant is about business and government intervention in them. The article wasn't about business or what happens to small cities in Australia etc -- it was about research and technological innovation.
Now, that's not to say that we don't need dipshit innovation. Dipshit innovation does in fact serve a very useful purpose: it helps to reduce costs by forcing a diverse group of small agents to survive by maximizing short term profits, whilst simultaneously minimizing short term costs. Some of these profits can then be pushed back into creating the next wave of things that nation states help develop. This next wave can then be fed right back into the free market where once again a diverse group of capitalistic agents can copy, scale up and reduce the costs of the next generation of tech.
Problems seem to occur when there is too much of a focus on long term investment (Communist China's/Russia's fascination with producing iron), or when there is too much of a focus on short term investments (The world's fascination with short term leveraged trades before the global financial crisis).
You really want something of a 40-60 split of resources, with 40 being pushed back into government/public institutes for long term societal level investments, and the remaining 60 going back to the free market as an incentive for further cost reductions.
We need both types, in the right amounts, to keep the economy chugging along. We also need competent people working on both sides of the split for us to move forward. What we don't need is to deify one to the exclusion of the other.
Addendum: This talk is an amazing discussion of the ideas listed in my above hypothesis: http://www.youtube.com/watch?v=jyp3Bw5H0VA which was tipped to me from here: https://news.ycombinator.com/item?id=6310207.
It's always nice when others back up what you say. But it seems that I'm always a year late with said ideas (talk is from 2012, and I hadn't previously seen it).
I blame the state for funding such radical research. I blame YouTube for not showing me it earlier.
I know a company that just completed the development of a new ultrasound system. The system, when deployed, will benefit hundreds of thousands of people around the world. And it was built by a for-profit corporation.
Building that system took about four years. That's four years of 150+ individuals working directly on its design and realization. That means writing code, doing industrial design, laying out PCBs with 20+ layers and thousands of components, working out soldering processes via electron microscopy, ensuring regulatory requirements such as IEC 60601 3rd Edition are met, managing complex schedules, debugging extremely difficult problems, etc.
Now, go even one level deeper and think about the tens or hundreds of thousands of people involved in developing the components and systems used to build this new ultrasound system. How about the software used to design ASICs? Systems on a chip, like the TI DaVinci series? And what of the businessman that starts a reliability lab so customers can get dye and pry services to analyze BGA soldering problems?
Is this the kind of innovation that you choose to label so derisively?
They helped reduce the cost and increase the performance of a well understood system with a variety of incremental innovations. Well done. I hope that company goes on to make a lot of money from the spread of their reduced costs, and those of the costs borne by the grateful public.
But they didn't develop ultrasound. Governments funding massive universities and militaries did.
See what I did there?
It's not a question of "who's better, public or private industry?" We need to recognize that our system is built on a symbiosis of both.
You are also simply wrong about the financial crisis - that was a crisis caused by long term investments, specifically 30 year mortgages.
No. That crisis was caused by private companies collateralizing debt fraudulently loaned out for short term profit to people who couldn't afford it against governmental regulations. Other private companies/individuals then bought what looked like a quick return for little risk and got burnt to a crisp.
It was in essence a short term investment failure brought upon by private corporations.
> supply chain + infrastructure
They didn't build the infrastructure they use (roads/water/electricity etc.). Governments did. Furthermore, their supply chain isn't as complex as you make it out to be.
Also, modern supply chain management is an out growth of operations research that was created thanks to government funded development during WWII. Only later was it applied by private corporations for far more prosaic, some would say more dipshit, reasons than the original one of keeping nation states secure in times of war. Moving potatoes to fryers to help give people heart attacks just doesn't have the same level of importance in comparison, quite frankly.
> AWS as "dipshit innovation"
Yep. It's virtualized servers and data storage (government funded ideas) scaled up.
"They didn't build the infrastructure they use (roads/water/electricity etc.). Governments did."
This is just ignorance I'm assuming. In America and the rest of the developed world, governments submit RFPs to solicit bids from private corporations. Private sector companies build the infrastructure, not the government. If your argument is that the government funds those projects, I simply ask you to think where the government gets that money.
Furthermore, had the dollars that have been spent on government innovations been instead allowed to remain in circulation in the economy, how many more innovations would private industry had come up with? Put more succinctly, what is the opportunity cost of government innovation?
But (and yes, I'm cherry-picking just a bit here). . .was there a "need" for the internet and GPS? Had anyone in the private sector identified those needs AND found deep-pocketed investors willing to wait patiently for their return on investment? Maybe not. If that had been the case, surely they would beat the government to the punch, since the government has notoriously long product lifecycles.
As for GPS, why not? As electronics shrank and the cost to send satellites plummeted, surely someone would have come up with the idea to combine radio and triangulation to determine position. Though the concept is more novel than linking computers together, it isn't so complex or costly that a reasonable person can say with any degree of certainty that it would never have been done. But my point isn't that the government should invent nothing, it is that the government, despite all of its spending, actually invents very little relative to the private sector.
I agree. But this would not be possible without government investment at a loss to develop the very things the private sector incrementally innovates upon.
> Of course government innovations played a role in this process, but if necessity is the mother of all invention, then it seems obvious that had government not funded the creation of technology A, B, or C, and if there was truly a need for it
Now here is where we diverge. Companies will not seek these type of innovations because those that do die before they can reap any profit.
> Furthermore, had the dollars that have been spent on government innovations been instead allowed to remain in circulation in the economy, how many more innovations would private industry had come up with? Put more succinctly, what is the opportunity cost of government innovation?
Conversely, what is the opportunity cost of dipshit innovation? The answer is clear: lack of break through innovation. Hence why I advocate a split (40 long term government - 60 short term free market) in my above hypothesis. It's the best of both worlds; you don't short sell the future, whilst neither ignoring the present.
How did you arrive to that conclusion? That's not clear to me at all. In fact, it's not clear to me that break through innovation would even be possible without incremental innovation, and vice-versa.
And besides, that you need the two types of innovations doesn't mean you need the state to produce one of them. I mean, maybe we do, but it's an orthogonal issue.
My distinction between government and non-government is basically pocket book size and investment timeline.
Complete and utter politicized bullshit.
Both IBM and Xerox had developed their own internal protocols for network communications; they adopted TCP/IP because the government was already using it.
History is replete with examples of non-governmental entities making ground-breaking advancements in technology. The most obvious ones off the top of my head are the automobile/assembly line, the television (both black and white and color), the integrated circuit, radio, the list goes on and on.
Yeah in the 1970s, after the 1960s government-created ARPANET had already been developed. Way to not dipshit innovate.
> History is replete with examples of non-governmental entities making ground-breaking advancements in technology
All your examples were government funded. Even the damn assembly line:
> The Terracotta Army commissioned by the first Chinese Emperor Qin Shi Huangdi is a collection of about 8000 life-sized ceramic soldiers and horses buried with the emperor, who died in 210 BCE. The figures had their separate body-parts manufactured by different workshops that were later assembled to completion. Notably, each workshop inscribed its name on the part they manufactured to add traceability for quality construction.
> At the peak of its efficiency in the early 16th century, the Venetian Arsenal employed some 16,000 people who could apparently produce nearly one ship each day, and could fit out, arm, and provision a newly built galley with standardized parts on an assembly-line basis not seen again until the Industrial Revolution.
Way to prove my point. Lack of knowledge tends to do that.
Wrong about the IC.
Wrong about the television, both black/white and color.
Wrong about radio.
And you're just being disingenuous about the assembly line. it's widely known that Henry Ford modernized the assembly line for manufacturing purposes. And while we're talking about inventions, let's not forget to mention the automobile, which, like most other inventions (including all of the ones in this post), was incrementally invented by many people with very little or no help or influence from the government.
Finally, for being disingenuous and outright lying as well as for insulting me unprovoked, I declare you to be a first-class asshole.
Yes you can, in the same way that you can build a telescope without understanding quantum mechanics. And you think we understand quasiparticles?
I do see your point though, however spurious it may be. His claim was that companies never come up with major innovations. My response was that they do, and that they do it so often that his claim was laughable on its face. "Knowledge genesis" occurs at the confluence of motivated individuals and funding, which can happen anywhere.
2. He says that government has a DUTY to fund defense research, so clearly his whole argument excludes innovations and contributions to GDP from defense research funded by the state.
In short, his argument is bollocks.
"...the contract should have said: If and when the beneficiaries of the grant make $X billion, a contribution will be made back to the NSF."
This by definition would not be a grant. If you want to eliminate grants then by all means say so... Sometimes I look at the State as just another modern deity, and it demands worship and tribute. Especially for things it claims to have done in the past.
Even more importantly, I think it's an incredible analysis of the actual nature of our economy. We've never actually been any sort of ideologically pure system, and Janeway argues that there's actually something very important about how our system historically has been, as opposed to what purist capitalists and socialists might have it be.
The biggest flaw of the book is that it really needed a gifted editor. There's a lot to the book, and it could have benefited from much more careful organization. Janeway seems to presume a great deal of familiarity with economics and the financial industry, and it made the book challenging for me to fully comprehend without taking notes and looking up unknown terms myself. But it was well worth the effort.
In college I came across "The Economic Laws of Scientific Research" by Terence Kealey. It's a great read for anyone interested.
The reason why a lot of shit is invented by the "state" is because they can very easily justify doing whatever they want either via big budgets or big guns. Various "states" have chosen various justification routes in history.
When you look at the "state" as the largest and most powerful business in the land you will realize why they try to hog up "innovation" or at least control it.
But in real life, wealth isn't simply owned in a vacuum. It's accumulated, possessed, and taxed within the bounds of a system of governance.
Innovation can be done by the private sector. Just avoid going public so that your company can make long term investments without Wall Street pressuring your short-term results.
People who think this way and write these kinds of articles are beyond ignorant. They are dangerously ignorant. They probably lived their entire lives inside a reality distortion field and actually believe this shit.
Here's what I find very interesting: None of these people will ever write an article pointing out how badly government/the state has fucked us over. They go out of their way to attribute visionary status to the government but never bring them to task for what they've done to society.
They'll never say this: The government created the internet with the goal of creating the perfect surveillance tool to actively violate everyone's privacy across the globe by monitoring your every move.
Not this: The military created the GPS system to be able to kill people with more efficiency and develop ever more deadly weapons. They did not create it for you to be able to go hiking or find directions to your friends house. In fact, they didn't even envision the possibility of something like an iPhone ever even existing.
Not this: DARPA is a military organization throwing money at efforts that will help create a more powerful military and, in turn, kill people with greater efficiency. The ultimately business of the military is to kill people when they are asked to do so and to do it as efficiently as possible. Their business isn't to create technology for us to enjoy while we go fishing.
Not this: The US government seriously fucked up nearly all urban planning in the US by not focusing the effort on long-term efficient mass transit. They created abominations such as Los Angeles, where it is nearly impossible to exist without a car. Their actions have created untold amounts of environmental pollution, health problems and inefficiencies because we have to live with millions of unnecessary cars and trucks on the road. This failing has cost us for generations and will likely continue to cost us for generations to come.
Through this horrible failure in planning they have enslaved us to our vehicles. Nearly every working person in the US has to own a car. Families spend tens of thousands of dollars purchasing and maintaining them as well as thousands of dollars a year in fuel. Massive numbers of trucks on the road are added for good measure. The environmental pollution is of monumental proportions. The human loss is also hard to measure. With efficient and ubiquitous mass transit people would have the opportunity to make use of their commute time for purposes other than being a control system. Perhaps read a book and learn something.
Not this: Our government has caused us to lose standing and respect in the world by irresponsibly throwing money around to buy friendships and, often-times, support brutal regimes. Some of these actions have led to increased anger towards the US and have turned the focus of terrorists towards our shores.
Not this: Governments world wide are responsible for HUNDREDS OF MILLIONS of people killed in military conflicts. Governments start wars, not people, not the local butcher, baker or teacher. Governments. They have killed hundreds of millions of people with almost no consequence to themselves. When did you last see a president or a sentator take their own life for launching us into a bullshit failed war and killing people for no good reason?
No, it's "we the people" who have to live with the consequences of their actions, it isn't "we the ruling party". They've made a mess out of the world. Period. The mess the UK and the US have made out of the Middle East is hard to understand. Go back and read about how some of those countries came to be.
Not this: The US government is absolutely responsible for the economic collapse of 2008. Their rules created the framework that allowed the real-estate market to devolve and ultimately derail. Without their "regulation" it would have been absolutely impossible for the series of events that ultimately took down the world to have taken place.
Furthermore, as things were devolving our all-knowing, all-seeing, wise and learned government never took a step towards fixing the problem and stopping what was coming.
Not this: Government social programs have created generations of people with no drive to succeed, educate themselves and contribute to society in any meaningful manner. It is, in many ways, economic slavery of the worst possible kind.
Not this: https://news.ycombinator.com/item?id=6309618
Never this: Hitler. The treatment of women in the Arab world. Genocide. The Soviet Union. Cuba. Dictators. Kings. Gay rights. Abortion. Never being able to truly own your home because you owe them taxes. The IRS. NSA.
"With great power comes great responsibility" often derails into "With great power come greater abuses to humanity".
People that champion the idea that we owe almost everything to the State seldom take the time to bring the State to task for what maladies they've inflicted upon the people. If they do it at all it is very rare and lacking intensity and longevity.
They truly think that the State is great. Lots of us see that the emperor has no clothes and that the State needs to have as small a part in our lives as possible. Not sure what it will take for others to see this short of a total collapse, which is in our future if things don't change. Get ready to learn a painful lesson.
They applaud the government for creating the GPS system but recoil when someone points out it was created to aid in the military mission of killing people and not for Apple to use on their iPhone. That someone offends their sensibilities and they refuse to look at reality. The State is always perfect in intentions, foresight and results. Anything else is blasphemy.
And that's part of the reason we have the problems we have.
I hope we spend the 21st century refining governance in the public and private world, rather than fighting over which side of the economy to eviscerate in search of overly simplistic ideological purity.
The only place in this discussion where this exists is in the nearly religious belief that all good things come from and are owed to the State.