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It’s a Myth That Entrepreneurs Drive New Technology (slate.com)
143 points by tchalla on Sept 1, 2013 | hide | past | favorite | 141 comments



Chomsky has been making this case for years. It's no fallacy. Every grant application I have submitted has a provision for transferring research products to business. Just fill out the appropriate entry. It is understood that you don't talk about how the government takes the risk out of business by funding R&D efforts through taxpayer-funded grant allocations to research institutions, subsidies to business, generous patent monopoly grants and other measures. The taxpayer funds business innovation but receives no equity. Downvote me libertarians: I will have a mathematical treat for you non-mathematical political pundits, in good time.


What exactly do you believe libertarians would disagree with in your post? I'm not a libertarian, but that the government privatizes gains and socializes losses, that they grant subsidies and monopolies to businesses, taking the risk out of them, seems perfectly aligned with what I read from libertarian sources.

Libertarians don't disagree that the government funds businesses, they disagree that it should do so.


> It is understood that you don't talk about how the government takes the risk out of business by funding R&D efforts through taxpayer-funded grant allocations to research institutions, subsidies to business, generous patent monopoly grants and other measures.

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.


I'm not a libertarian, but may I please see your treat anyway? I'm curious.


This article is an example of the worst political commentary. It presents the context for this "observation" as being a decrease in both public debt and the size of the government. No such thing has happened or is likely to happen any time soon. The US federal government is the largest and most powerful state in the history of the world. There is no "cut" that could make that less true coming in the next few years at least.

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.


Well, if you'd like the anti-statist take on state innovation, how about this?

"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... :)


This comment is an example of the worst political commentary. It doesn't even try to make sense, and is more a form of paranoid, libertarian verbal diarrhoea than an actual reasoned argument.

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.


Oh, but the issue is not whether we think of something as a "corporation" or not. After all, that's just playing with words.

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".


And if it wasn't a government but instead a corporation, the only thing that would change is that you don't even get to vote!


What nonsense. In a free market economy, you vote every time you voluntarily accept an offer. Not voting for a corporation, a vote that costs you your own money, is a vote against it, because corporations die by default. If ever people stop accepting new offers, the corporation will die. They can't force you to accept an offer or to pay for an offer accepted by someone else.

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.


Incorrect. The libertarian government ideal is that the government's main purpose (and some would say sole purpose) should be to protect people against such occurrences. So there is most definitely a mechanism to protect people against aggression from those with more power; in fact, libertarianism is built on the principle which underlies it.


No, if you decide you don't want to do business with that entity anymore then you have to get off that entity's land. Just like if you decide that you don't want to do business with a parking lot company anymore, you have to move your car out of their parking lot. The punishment isn't for deciding not to do business with the government, it's for taking government services without paying for them. You won't go to prison or be killed for leaving the country.


"No, if you decide you don't want to do business with that entity anymore then you have to get off that entity's land."

Not if you believe that governments derive their power from the consent of the governed.


Even if governments do derive their power from the consent of the governed, the governed have consented to government sovereignty. That being the case, I don't follow your argument.


My argument is that of the American colonists seeking to throw off the shackles of their British masters.

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.


So governments own everything by default, and if you don't like it, just piss off (assuming they let you)? Leave your home country, give up, adieu?

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.


Your life isn't leased from government, your land is, and while you choose to live on their land you must follow their rules or deal with the consequences of not doing so. You can make all the slippery slope arguments you want, but they won't change that reality.

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 have any idea where humanity would be if we followed your advise? "Accept the status quo, or piss off to Mars"? Seriously?

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).


You need to read what I'm actually saying instead of assuming that I fit your archetype for ‘opponent in a dialog’. You still completely misunderstand my stance despite my having belabored the point extensively. Your claim was as follows:

> 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.


> The state is a mixed bag.

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.


>Whether an innovation will be a success is uncertain, and it can take longer than traditional banks or venture capitalists are willing to wait. In countries such as the United States, China, Singapore, and Denmark, the state has provided the kind of patient and long-term finance new technologies need to get off the ground.

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.


The Chinese Governemnt does. They had a plan to industrialize a country of a billion people, and they are half way through as the plan continues apace.

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.


> 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.


> 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.

Can you clarify? Wikipedia does not seem to support your statement: http://en.wikipedia.org/wiki/Deng_Xiaoping#Re-emergence_post...

Thanks.


Wack job ideological frenzy: the cultural revolution

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


But wait, this happened before Deng came to power. Deng oversaw dismantling of he cultural revolution, per above Wikipedia link.


The mode degree of Central Party members is in Engineering. The mode degree of Congress is Law.

http://en.wikipedia.org/wiki/Mode_(statistics)


That would probably be related to the fact that Congress is s purely legislative body.


Well, it isn't that nobody has it. Larry Page wants to get us off fossil fuels as fast as possible given that he's basically an advertising executive. Similarly, Elon Musk would like to get us off oil and get us to Mars, but again, he's just a CEO.

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.


The problem is that a large portion of the country thinks that we shouldn't actually leverage that wealth and power to achieve transformative accomplishments anymore. We just don't have a paradigm for this in today's America. We're stuck in a monkey-patched late-18th century system of governance, and we've proven ourselves thoroughly unable to plan for the future and adapt.


In less than 7 days Australia will essentially be deciding if it gets a National Fibre-to-premesis Broadband Network.. or if it will continue pushing copper and outdated tech for the next 4 years.

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


Martin Wolf reviewed Mazzucato's book in the Financial Times a couple weeks ago:

http://www.ft.com/intl/cms/s/2/32ba9b92-efd4-11e2-a237-00144...

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?


This essay makes a fallacy case, "it is this way, therefore it must be this way". It takes a lot of liberties with evidence to come to a crazy conclusion.

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?

Awful article.


> Picking Nokia as an example of innovation?

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 [1], 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. [2] Her work came from an INET grant [3], not an insignificant institution. [4]

[1] http://www.youtube.com/watch?v=jyp3Bw5H0VA

[2] http://www.youtube.com/user/RethinkingTheState

[3] http://ineteconomics.org/blog/institute/ha-joon-chang-and-ma...

[4] http://en.wikipedia.org/wiki/Institute_for_New_Economic_Thin...


Having written a book and created a YouTube channel isn't any sort of evidence for the validity of much more than the creators ability to create a book and YouTube channel.

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.


It's not about "governments are more innovative than individuals." False dichotomy on many levels:

* 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.


More accurate to say "governments are more innovative than corporations."

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.


You seem to ignore the extremely important point that the government contracts its innovation out to corporations as a means to keep the economy going. That's what keeps the machine turning, friend.


The Wizard of Oz keeps a big machine turning, but that machine isn't really running the kingdom, despite all that smoke and noise and imperial pomp. The imperial palace is merely the largest and possibly least productive participant. The real economy is the unfathomably complex interaction of billions of parties deciding what to make for whom, what to spend on what, what to study, where to live.... The big, clumsy oaf that often takes their money by force without trading anything for it, offers them others' money in exchange for votes, sometimes creates useful infrastructure that helps the real economy be more productive then comes up with new ways to impede their productivity (hiring people who are unfit to produce, telling them to regulate producers, and pointing at the newly hired regulators as a "jobs creation success story")..., that oaf is not keeping the economy going. It's just a big, clumsy participant, but people who can't fathom complex adaptive systems assume the biggest node must be in charge. Yours is a child's view of an economy, friend.


What nonsense. You've way overcooked your metaphor.

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.


Having written a book and created a YouTube channel isn't any sort of evidence for the validity of much more than the creators ability to create a book and YouTube channel.

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.


>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.

Or confidence in one's ability to fool the market.


"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."

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.


The space race was about international posturing and displays of technological capability as a deterrent to engaging in nuclear war.

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.


"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."

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.


>This essay makes a fallacy case, "it is this way, therefore it must be this way". It takes a lot of liberties with evidence to come to a crazy conclusion.

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.


Capitalism has been given a bad reputation, but fundamentally it just means people engaging in voluntary exchanges - wealth is accumulated, and invested. That's about it.

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.


>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.


Not really, I was mostly just addressing this:

>> 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.


Capitalism has historically functioned as an economic system only.

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."

http://www.economist.com/node/1873493


>Capitalism has been given a bad reputation, but fundamentally it just means people engaging in voluntary exchanges - wealth is accumulated, and invested. That's about it.

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.


I think what you're trying to say is that there's a huge disparity in individual agency that needs to be recognized when invoking the "voluntary" ideal.


The "voluntary" in "voluntary exchange" has always struck me as a bit of a weasel word (I think that's the right terminology?).

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.


Just my thoughts....

"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.


In the first case, is it voluntary if the shop owner fails to point out that the brand I do want is there, but is hidden? How about if I explicitly ask him for it? Or if I am clearly an uninformed water customer, and don't know that the brand of water I am buying is nowhere near as good quality as the other brand he hasn't told me about?

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!)


> In the first case, is it voluntary if the shop owner fails to point out that the brand I do want is there, but is hidden?

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[1], but at the same time, you value your gain higher than the loss of your money. Both parties benefit.

[1] 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.


Capitalism has been given a bad reputation

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.

Flatly false.

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.


Just a couple points: Involuntary exchanges also have externalities, both negative and positive. It turns out people prefer voluntary, so the vast majority of externalities occur under capitalism.

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?


Some involuntary exchanges (taxes, fees, fines, etc.) are structured specifically to address economic externalities. Note that I'm not saying "all", but "some".

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).

Are "slavery, coercion, blackmail, forced options" economic activity?

How would you construe slave trade, coerced financial transactions, and strong-handed bargaining if not "economic activity"?

That's not a voluntary exchange, now is it?

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.


Perhaps I should have tried to establish what was meant by "economic activity" before posing my critique. There are many definitions, but I took it to mean the production of wealth. Governments and other coercive institutions do not typically produce wealth. They help create the conditions under which individuals can take risks and occasionally profit.

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.


> 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)

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 other words: "Because there are externalities, the negative ones will outweigh the positives"?

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."


Well, I shouldn't expend too much effort on this, but let's see..

> 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.
As I already mentioned, the latter statement leaves room for involuntary exchanges too. Here's an example: Slaves were forced to pick cotton, but no one was forced to buy that cotton.

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.


> Capitalism has been given a bad reputation

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.


No, people engaging in voluntary exchanges is a market, the building block of an economy.

Capitalism has no claim here.

Capitalism is, put most basically, a system under which trade and industry are controlled by private owners for profit.


I think Cuba tried that already in the late 50s.


>This essay makes a fallacy case, "it is this way, therefore it must be this way"

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.


I think he was referring to statements like this:

"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.


The examples seem cherry-picked. Where are any examples of the countless investments/grants by the state that have produced absolutely nothing in the way of advanced technology?


Are you saying that free market advocates don't cherry pick their examples, and ignore confounding factors in the examples they pick, to favor their narrative?

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?


When has research ever been a sure-fire thing?


The state may invest in things like DeLorean, but it also invests in things like diamagnetic levitation, with which we are finally able to make flying mice. And who doesn't want flying mice?


> This essay makes a fallacy case, "it is this way, therefore it must be this way". It takes a lot of liberties with evidence to come to a crazy conclusion.

"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.


Good points, thanks.


Your anecdote merely supports the hypothesis that your government is incompetent, not that all governments are incompetent.

> 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!

Awful comment.


I fully agree with your comment on the level of cronyism in oz, and the issues created by it in terms of stalling and stifling otherwise progressive business culture.. through the lure of grants or the entrenched power of the status quo.

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 entire point is that the government can invest in things that it deems valuable but not necessarily likely to make an immediate profit.

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.


The military did not build the internet, and all that follows is thus incorrect.


Although I used the word "build", the entire post is talking about the investment. Regardless of whether you consider the people who "built" it to be government employees, the funding was military funding. Things like ARPANET were Department of Defense projects.

I have no idea what point you're trying to make.


> Look at the way Lower Saxony hampers Volkswagen's development

That's kind of a weird example to pick, given Volkswagen's origins.


China is pretty much a damning counter example to your whole rant, as was the Soviet Union. Two countries that were previously economic backwaters that became world powers because of directed government action.


China and Russia have been capitalist for decades. Russia is doing far better than its communist days, not to mention China.


First, neither China nor Russia are capitalist. They have market-ish economics with strong authoritarian government management of the economy. 43% of China's industrial and business profit results from state owned companies.

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.


Directed government action in China led to 20-40 million people starving to death. Relaxing government control of the economy led China to an amazing economic boom.


Its basically propaganda to claim that the current Chinese government doesn't strongly direct the economy. They've just gotten better at it, not micromanaging, letting pseudo-market means allocate capital at the micro level while focusing on long term objectives.


So you've got some good evidence that Feudalism is worse than socialism.


Given that Australian taxes really aren't as high as you portray them, what's stopping Australian entrepreneurs? If government money isn't the driver, then they should be able to source private money.

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.


Actually, speaking of taxes and paperwork, try talking to an accountant who has worked in both the US and Australia - the US tax system is incredibly baroque. If you sell something above a local shop level, you have to account for several levels of tax, depending on where you sell it. City, county, state taxes, varying all across the nation.

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.


Though the MRRT isn't overly new we already have a similar tax for the petroleum industry.


Could not agree more. Well said!

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.


>This essay makes a fallacy case, "it is this way, therefore it must be this way". It takes a lot of liberties with evidence to come to a crazy conclusion.

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.


Most companies drive what I like to call dipshit innovation. You know what I'm talking about. The new X sandwich from McDonalds. The new X flavor from Coca Cola. Repackaged servers from Amazon. The new X phone from Apple. A variant of an already existing drug X with a different name by Pfizer. These things are not hard to develop, and that makes sense, since a company's return horizon must be on the order of 7 years or less to stay in business. Things that only take 7 or so years to develop just cannot be that hard to do. To make real impact requires sustained investment at a loss over decade to century level time spans, a space in which only the largest companies in existence, namely nation states, can compete.

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.


"Things that only take 7 or so years to develop just cannot be that hard to do."

Interesting perspective.

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?


Yes.

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.


Also governments funding space programs...


...funded by profits generated from the private sector?


...a private sector built on technological innovations whose initial development was funded by the government.

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.


And where did governments get the funding for those investments?


I think it's what he is saying. Govs take money from the private sector to develop long term things, that the private sector won't have the leverage and the pockets to do, but the aggregate of a whole nation can. What OP is saying is that we need both. States to do basic and fundamental long term research. And applied, short term, cost reducing research, to give what the gov helped discover to the public at large.


Thanks for an interesting comment among what will surely be a pile of modern libertarian disbelief and nonsense about to be poured all over this thread.


The actual innovation is McDonald's supply chain + infrastructure, which allows them to deliver the exact same dipshit sandwich to every town in America. And AWS as "dipshit innovation"? Um, ok.

You are also simply wrong about the financial crisis - that was a crisis caused by long term investments, specifically 30 year mortgages.


> that was a crisis caused by long term investments

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.


Do you have any evidence or probable cause for your claims about "private companies collateralizing debt fraudulently loaned out for short term profit to people who couldn't afford it against governmental regulations"? Admissible evidence only, please.

"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.


You do realize China has had a capitalist economy since the 70s, while Russia has had one since the early 90s, right?


The vast majority of innovation comes from the private sector, but those innovations usually go unnoticed because they aren't ground-breaking or flashy, but are, instead, incremental. The 'dipshit innovations' you're referring to are all related to consumer products, but incremental innovations in private industry are what has driven the massive global increase in economic efficiency over the last half-century, which in turn is what has allowed us the standard of living that we enjoy today. 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, then they would have been invented anyways.

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?


I agree completely re: "the opportunity cost of government innovation?" and partially re: "if there is truly a need for it have been invented anyways".

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.


For the internet? Certainly. Linking electronic computers together via some sort of standardized network protocol is the obvious and natural next step for any physically decentralized entity with many such machines. And as we all know, once you have the standardized network protocol, the network grows and spreads organically. The idea of connecting computers so that they can communicate with each other is not a particularly novel one, and to make the logical leap from the fact that DARPA was the first one to do so to the belief that no one else would have had DARPA not done so takes a rather large set of blinders and a staunch willingness to wear them at all costs.

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.


> incremental innovations in private industry are what has driven the massive global increase in economic efficiency over the last half-century, which in turn is what has allowed us the standard of living that we enjoy today

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.


Conversely, what is the opportunity cost of dipshit innovation? The answer is clear: lack of break through innovation.

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.


Hence why I advocate for a reasonable resource split where both are part of a virtuous positive feedback cycle. You can't have one without the other.


But then how can you claim that one has the other as an opportunity cost?

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.


Think of the state like a massive conglomerate corporation with huge pockets, many sub-divisions, and long investment timelines and you'll understand my point of view.

My distinction between government and non-government is basically pocket book size and investment timeline.


>Companies will not seek these type of innovations because those that do die before they can reap any profit.

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.

http://en.wikipedia.org/wiki/IBM_Systems_Network_Architectur...

http://en.wikipedia.org/wiki/Xerox_Network_Systems

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.


> Both IBM and Xerox had developed their own internal protocols for network communications.

Yeah in the 1970s, after the 1960s government-created ARPANET had already been developed. Way to not dipshit innovate.

/sarcasm

> 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.

Source: http://en.wikipedia.org/wiki/Assembly_line

Way to prove my point. Lack of knowledge tends to do that.


Wrong, wrong, wrong.

Wrong about the IC.

http://en.wikipedia.org/wiki/Invention_of_the_integrated_cir...

Wrong about the television, both black/white and color.

http://en.wikipedia.org/wiki/History_of_television#Electroni...

http://inventors.about.com/library/inventors/blcolortelevisi...

Wrong about radio.

http://en.wikipedia.org/wiki/History_of_radio#Start_of_the_2...

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.


Can you make an IC without understanding quasiparticles? Who created the knowledge that lets you do this? What equations govern EM radiation transmission? Knowledge genesis is the primary domain of knowledge creators, not employees.


>Can you make an IC without understanding quasiparticles?

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.



1. He admits that he has no proof that private firms would take up the slack if government stopped funding basic science research - only his bizarre notion that science is NOT a public good.

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.


I don't really have that much to add, this just stood out to me as slimy:

"...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.


I highly, highly recommend Doing Innovation in the Innovation Economy by William Janeway to anyone who wants to truly understand the nature of our economy. It's basically this piece elaborated in exhaustive detail by a Ph.D economist and 40+ year veteran of the finance world. To me, it's at once a thorough investigation of the history of markets and the boom/bust cycle, a defense of Keynesianism and the State as an economic player, and a memoir of a pioneer of the modern venture capital industry.

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.


The premise of this article seems to be that since the government funding of scientific research has bore fruits, then it must be justified. The ole saying "a blind squirrel finds an acorn every once in a while" comes to mind. It's worth entertaining the idea that public funding displaces private funding (at a net loss). Burt Rutan makes this argument in his Ted talk on the space industry (http://www.ted.com/talks/burt_rutan_sees_the_future_of_space...).

In college I came across "The Economic Laws of Scientific Research" by Terence Kealey. It's a great read for anyone interested.


The "state" also has access to FAR more assets than any single company ever will. The "state" can very easily define what IS the economy itself unlike a business which is dependent on whatever the economic architecture of the "state" is.

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.


What about the cooling effect of government spending on private sector innovation. Nobody can compete with the government, since it has unlimited pockets and the ability to legislate, so it would be irrational for any company to try. How do you account for that when you try to measure how much potential the private sector has for major innovations?


Do you have any evidence of this "cooling effect?"


Rubbish some Entrepreneurs are really just me to copy cats but real ones are innovative take Woz's inspired hardware hacking on the original apple or Clive Sinclair even Alan Sugar with the cpc pcw and the pc 1512 - if only he had paid more attention to quality control he could have had a UK equivalent of Dell.


All those microcomputer designs you cited were very important but they depended on decades of military-industrial funding for transistor miniaturization to work.


I was thinking in WOZ's case the innovative design of the disk II which was much more old school analog design


If you define "innovation" narrowly as basic research, then sure, funding for that typically comes from DARPA, NSF, and big corporations. Being science, it doesn't even have to work out, let alone have immediate applications, let alone have a way to make money from it, let alone pursue it.


If you take someone's money by force, you're a thug, not an entrepreneur.


Sure, if that someone owns that money, a priori.

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.


What about Bell Labs?

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.


Bell Labs was a part of a government-approved monopoly (AT&T).


Hey, nobody said funding can't come from the government, it's just that private companies and individuals seem to do more with less...


It's really dependent on what you're talking about. It takes massive amounts of money to do the really long-term research that lays the foundations for much of our private enterprise. We wouldn't have such a fruitful startup scene for private individuals to attempt to innovate with reasonable low upfront costs if not for decades of development in our computing and communications industries, much of which was financed with long-term state investment. How soon we forget.


What's going on at Slate? First the public school article and then this?


What a huge insult to people like Steve Jobs.

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.

Examples:

  ------
They'll print this: The government created the Internet (false, private enterprise took it from a limited use experiment into what it is today), you should all bow and be thankful.

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.

  ------
This: We owe the government for creating the GPS system.

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.

  ------
This: DARPA funds great projects and helps entrepreneurs.

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.

  ------
This: Government built roads, plans cities and infrastructure and we all benefit from this.

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.

  ------
This: Our government wisely spends billions a year in foreign aid.

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.

  ------
This: Governments look after our safety and freedom.

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.

  ------
This: Our government wisely makes economic rules and creates programs that benefit us all.

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.

  ------
This: Government social programs are great. We should be thankful.

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.

  ------
This: Governments promote travel, tourism and business at an international level.

Not this: https://news.ycombinator.com/item?id=6309618

  ------
This: The State looks after it's citizens.

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.

  ------
Don't get me wrong. We need small and limited government. We simply don't need what most have turned into. It is a huge monster that gobbles it all up and, ultimately, does little to make our lives better in the long term.

"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.


I find it very interesting when people down-vote something like this without refuting even one of the examples provided. It can only mean that the down-voting is based on blind ideology rather than facts. Every example I provided is factually supported, yet the indoctrinated can't see past their ideology to even consider the fallacy in their arguments.

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.


could not agree more. thanks for the long post - I actually came back to see whether this particular post got any responses - shared a copy with my friends.


I agree with many of your counterpoints to large government, but at the same time, I could write much the same sort of thing about private industry. But the reality is that public and private enterprise both have their successes and excesses. Honest reflection on our economic history since WWII has to recognize that both have worked together to produce the advancement and prosperity seen in the Western world.

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.


> 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.




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