Wednesday, February 6, 2019
Monday, March 27, 2017
RE NYT TRUMP ADMIN WAR ON SCIENCE RISK TAKING AND INNOVATION CHIMERAS
There are so many ways to comment on this article, one hardly knows how to begin...
One point is that they want government to step up to big spending on basic research, to promote innovation.
What has been the history of big government investment in basic research? It has usually gone to big corporations which then take advantage of the average American at government expense, while claiming that they don't like government, and it should get out of their way, while on the other hand claiming to benefit a national economy and work force.
Also, there are entrepreneurial free riders on government programs, subsidies, tax breaks, deregulation, trade advantages, as a predicate for their private investment in this or that technology, which they then usually license and or manufacture in some other country, in order to reap huge profits worldwide, while American workers languish in burger jobs, etc.
The critical point here is that, contrary to the American gospel of entrepreneurship and risk taking, these folks normally only like to bet on sure things, first subsidized in different ways by government, such as government funded research at taxpayer expense, things like that.
The underlying problem is that we as a nation are not set up to pursue a coherent national industrial commercial and economic policy, so one ends up with ad hoc advantages for predators who feed on government programs while at the same time claiming that government cannot do anything right, without systematic progress aimed at the general welfare of average American citizens.
The pattern has repeated itself for the last several centuries, back to when government bonds were the main investment banking tool. Governments were the least risky investments, although they were sometimes spoilers for even savvy investment bankers. For a long time, only the bankers made the money on government obligations. Finally the bond market went public, but it is still very much a game for specialists, as stocks also are.
The critical point here is that, contrary to the American gospel of entrepreneurship and risk taking, these folks normally only like to bet on sure things, first subsidized in different ways by government, such as government funded research at taxpayer expense, things like that.
The underlying problem is that we as a nation are not set up to pursue a coherent national industrial commercial and economic policy, so one ends up with ad hoc advantages for predators who feed on government programs while at the same time claiming that government cannot do anything right, without systematic progress aimed at the general welfare of average American citizens.
The pattern has repeated itself for the last several centuries, back to when government bonds were the main investment banking tool. Governments were the least risky investments, although they were sometimes spoilers for even savvy investment bankers. For a long time, only the bankers made the money on government obligations. Finally the bond market went public, but it is still very much a game for specialists, as stocks also are.
The NYT trots out Peter Thiel, who plugs for more government spending on basic research. Where do you think the profits from such taxpayer investments have gone under our system? They have often gone mostly elsewhere, at least since WWII. There are a lot of books explaining this, but Americans seldom crack such books.
How do success stories actually happen? It is almost always a combination of luck, family connections, and money, often the money comes with the family connections, trial and error, a lot of error, not risk, just error, risk avoidance, and on predations of various kinds, predations on weaker competitors, on customers or suppliers at a disadvantage, predations on government funded research programs, especially subsidies, specialized tax breaks, and guarantees, that reduce risk, etc. They especially love guarantees.
The other fascinating aspect of the picture that very few people seem to know is that the concept of innovating to success is a complete fabrication.
Almost all success stories are in fact based on predation first. Only later, when already in a commanding or at least fairly secure successful position, do companies then elect cautiously to spend money on innovation both to boost profit and to ward off possible competitive pressure based on competitive innovation.
So, entrepreneurial risk taking and up front innovation, total chimeras.
No doubt, some think I pulled these conclusions and others in what is set out above and elsewhere on this blog, out of my derriere. Here is a book I looked at recently, re the chimeras, found it from a fn in one of Randall Collins' posts, great case studies of the most prominent recent success stories: From Predators To Icons. One could multiply such stories back into the history of the most famous success stories of Western capitalism. Various names spring to mind.
I have discussed industrial policy in a number of prior posts. Terms search: industrial policy, and also see terms searches in those posts for further related posts.
Here are some other related terms to search: trading places, trading american interests, Opening America's Market, developmental state, Steingart, attacker state, Faux, Manufacturing Matters, Chalmers Johnson, MITI, van Wolferen, Steingart, bashing, competitiveness, Friedman LeBard, Michael Porter, Huntington, war for survival, rail to rail, Rodrik, Thurston
How do success stories actually happen? It is almost always a combination of luck, family connections, and money, often the money comes with the family connections, trial and error, a lot of error, not risk, just error, risk avoidance, and on predations of various kinds, predations on weaker competitors, on customers or suppliers at a disadvantage, predations on government funded research programs, especially subsidies, specialized tax breaks, and guarantees, that reduce risk, etc. They especially love guarantees.
The other fascinating aspect of the picture that very few people seem to know is that the concept of innovating to success is a complete fabrication.
Almost all success stories are in fact based on predation first. Only later, when already in a commanding or at least fairly secure successful position, do companies then elect cautiously to spend money on innovation both to boost profit and to ward off possible competitive pressure based on competitive innovation.
So, entrepreneurial risk taking and up front innovation, total chimeras.
No doubt, some think I pulled these conclusions and others in what is set out above and elsewhere on this blog, out of my derriere. Here is a book I looked at recently, re the chimeras, found it from a fn in one of Randall Collins' posts, great case studies of the most prominent recent success stories: From Predators To Icons. One could multiply such stories back into the history of the most famous success stories of Western capitalism. Various names spring to mind.
I have discussed industrial policy in a number of prior posts. Terms search: industrial policy, and also see terms searches in those posts for further related posts.
Here are some other related terms to search: trading places, trading american interests, Opening America's Market, developmental state, Steingart, attacker state, Faux, Manufacturing Matters, Chalmers Johnson, MITI, van Wolferen, Steingart, bashing, competitiveness, Friedman LeBard, Michael Porter, Huntington, war for survival, rail to rail, Rodrik, Thurston
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