I understand your sentiment, and don't really disagree, but keep in mind that it's basically impossible to innovate or build wealth under unfavorable institutions. So... some value probably "should" accrue to nations.
This might be a good time to take a look at history. Lots of examples of institutions destroying innovation. By contrast, not as many examples of them creating it.
Or, to put another way, we did just fine innovating and inventing and such on our own -- in caves, on the Savannah, on trade routes, as part of tribes or guilds. Innovation and entrepreneurship is as natural a part of life as breathing. If this weren't true, we'd still be hanging around in trees waiting for the big cats to leave their prey.
Of course, you can argue that institutions accelerate this natural ability, but there's a lot of room for doubt over exactly what magic sauce makes people super productive. At the very least we can agree that different folks have different answers to that question. (If there were some "proven" answer, we'd just all copy that and the world would be full of Thomas Edisons) I understand there are a lot of works of fiction and nonfiction that claim to explain why so much innovation happened in such and such a place, but it's easy to say or write something like that. In reality, lots of really smart folks have went at this problem and haven't gotten very far in terms of reproducible results.
I find this line repeated over and over again -- that somehow if there is a lot of innovation in situation X that it naturally follows that we know all about X and why all this innovation happened. I think that's stretching logic a bit too much for my tastes.
You're missing the definition of a good institution.
A "good institution" is one that does not interfere, but also stops others from taking over and interfering.
Innovation is as natural as breathing, but so is conquest. After innovation, the winners often use their power to conquer and close the door behind them. This is history too. It is the innovators who tend to shut down the environment that was open enough to enable them to innovate.
Winners close the door behind them because they underestimate how much luck went into their success. As everyone knows, the first $20 million is the hardest.
I mean that: I can't. It is logically impossible for me to disagree. My thesis is that there is no repeatable definition of a good institution. Your definition is just as good as any. Personally I like it.
I would simply point out that a lot of folks have written a lot of books and essays about what makes a good institution. We've yet to see something reproducible. We've seen a lot of things that sound and feel good, and I completely believe that your points are valid, but that and 5 bucks will get you a cup of coffee at Starbucks.
I can line up a dozen other folks that will tell you that a good institution fosters creativity, or puts the individual above the group, or is one with a spiritual center, or is one in which open communication is everywhere, or any one of a thousand other things that also sound pretty good.
If the answer to this question involved pleasing the most people with your reasoning, there's no doubt in my mind that you would do very well. But it doesn't.
While it is hard to somehow "prove" what is the best strategy for an institution, I would say there is indeed hard science that has been done that gives us a fuzzy picture.
It's not a perfect science, but then again even quantum physics is incomplete and suffers from anomalies.
The entire purpose of social science is to move these questions away from just personal judgement and get SOME level, no matter how small, of objective fact.
Organizational psychologists have studied this issue and I think there are some good guidelines. My definition is, admittedly, biased by my own personal judgement.
But still, there is real genuine scientific evidence that indicates institutions which empower individuals and allow for a lot of freedom are objectively better than ones that are more authoritarian and brutal.
You can operationally define "better" as "the group of choice of a 4/5th majority of randomly selected humans" if you want.
I'm not saying nothing is provable. I'm not even saying that nothing is useful.
What I'm saying is that if I had a zillion dollars, a magic wand, a dumptruck of pixie dust, and a flying unicorn? I still wouldn't be able to create an institution that I would feel comfortable with as being a steady generator of innovation. In addition, I can observe that, as you point out, these things are sociological in nature, not mathematical. I can further observe that lots of people make lots of money selling books and giving speeches and such claiming to be able to make the perfect institution. Since these people continue to generate new ideas and continue to write books and charge for speeches and seminars and such, I believe it is reasonable to assume they have no fully satisfactory answers. I can further observe that many institutions have spent tremendous amounts of money and effort into creating environments that spawn invention and innovation -- to very mixed results.
All of these observations lead me to a great deal of skepticism in regards to your statement. That doesn't mean that what you say has no value. I'm sure we could all agree on general attributes that most of the time provide more return than others. But that's a long way from the certainty I was hearing. People talk about fostering innovation and entrepreneurship like it was turning on a light, and that kind of certainty is ludicrous. It's nothing at all like that. All I was trying to do was provide context.
I'm done here. No desire to get into an infinite argument stream. Good thoughts. Thank you for sharing them.
I think it is an insight just in your statement that there is no such thing as an institution for innovation. That means I should foster innovation where I find it, no matter how unlikely, instead of looking to build utopia.
I try to avoid sarcasm in comments. It seems like one is packing more meaning into a short comment, but without knowing a person or body language the comment is often unclear.
Here I think you meant your comment as a final unavoidable contradiction to the GPs post, but I recall reading some lore on a father of the internet steering the RFC process while a government branch was working on another standard meant to be primary. (I'd look it up but I'm on my mobile.) So I doubt we can say it was more the government institution rather than the will of the builders which led to the internet which is more in line with the GP and doesn't take away from the idea that their positions made their work possible.
I agree with you that in the end, it comes back to individuals and their decisions. However, many of those individuals were working in an environment afforded them by a government institution, either directly (working for DARPA) or indirectly (working for educational institutions supported by the government).
But, really, I was responding to the parent's 'By contrast, not as many examples of [institutions] creating it.' The environment provided by institutions (whether it's a small company or a large facility) have created a great many things throughout history.
We all want to think individuals are what it's all about, but individuals don't exist outside their surroundings and influences.
That's like saying the government is responsible for all business because they printed the money.
The "internet" that the government created would be nothing without the private organizations that actually built it. When did the government start Cisco? Google? USR? Even the early iterations of the internet were built by private companies. It's more that the government was the first buyer of this type of technology.
Edit: The idea that the government can take responsibility for the internet is gigantic hubris. In fact it's governments that are continuing to destroy what the internet has become.
BBN is the most well known. Additionally a lot of the early gear was produced by DEC and IBM.
ARPANET didn't resemble anything close to the internet in it's current incarnation. Thank the government that you have a macbook to use, because they built ENIAC!
umm, so subcontractors to the government/academia?
sure there were a lot of those. Still, for more than 20 years during 1970-90s private sector largely discarded ARPANet mutating into Internet as an academic toy. All while TCP/IP was invented by Vint Cerf and Robert Kahn at Stanford and HTML by Tim Berners Lee at CERN. Yup, two largely government-funded organisations again.
Yes, for sure. Some of the benefits should return to the nation that provided the favorable conditions (and do, in the form of that person's taxes and also in the form of opportunity-seekers from around the globe flocking to the places where growth is possible). But I don't like the notion that people owe their successes to their country any more than I believe they are indebted to oxygen or gravity.
You may not like the idea but that doesn't necessarily have any bearing on its truth. None of us does anything on our own - water, power, roads, schools, the list goes on and on (not all directly attributable to the country itself, but certainly national governments are high on the list of contributors to these projects in almost all cases, and I haven't even mentioned things like tax policy yet). I think the days of the nation-state are numbered but we can't ignore what those entities did for human progress. Maybe not in the form of a literal debt, but it's short-sighted and antisocial to pretend that the elites didn't have a hundred million helping hands on their way up.
Perhaps, but the elites have already paid for all of those helping hands many times over. The top 5% paid about 60% of the nation's taxes, for instance, and they almost certainly have not used 60% of the public services.
In spite of this, most of the services they paid for are not the public goods (e.g., roads, power, water, police) you describe. Of the top 5 biggest expenditures in the US, only the 4'th is a public good.
And this completely ignores all the consumer surplus they have created (i.e., the happiness you get from using a macbook rather than having $1000). The elites have paid their debt. Let them leave if they want to.
I think the point is that the elite benefit from the public services even if we do not use them directly. E.g. if we work in an office building we benefit from the services that allowed the worker vacuuming to be there, though we didn't necessarily take the bus there ourselves.
[edit] but this is not to say that anyone should be restricted unduly.
First of all, if the worker is a taxpayer, the employer is already paying for those services in the form of pre-tax wages. I pay for my own police protection, and I raise my wage commensurately [1]. This is all included in the cost of labor.
Secondly, most government spending does not provide those necessary services. Roads, police and water are just not very expensive. Most government spending is just transfers from the wealthy to the less wealthy - see my second link in my previous post.
[1] Actually, my landlord pays for police protection, and has raised my rent commensurately.
Most of the cleaning service people are not really taxpayers[1], which is why including them distorts the equation. They are benefiting w/out contributing, and we do in fact, need them.
Also reinforcing my point, How can you claim that Defense is the only public good in the top 5? What percentage of the population must benefit to qualify?
[1]From other IRS data, we can see that in 2008, around 52 million tax returns were filed with either positive or negative AGI that used exemptions, deductions and tax credits to completely wipe out their federal income tax liability. Not only did they get back every dollar that the federal government withheld from their paychecks during 2008, but some even received more back from the IRS.
and they almost certainly have not used 60% of the public services.
They've probably used more than 60%. Almost all of the money is a means to keep poor people "content" in this country. It's a small price that rich people pay. To put it another way, rich people could certainly cut off pretty much all education, pension, health care expenditures if they wanted to. But there's a reason they don't, and its not because they're nice people. But its in their best interest. It's their public good.
This debt metaphor is really unproductive. Fact is it's easier to make money when you already have money. So the assumption here is a nation would be better off if it subsidized the money making process, same as it subsidizes education.
We ARE indebted to oxygen and gravity. While it's hard for us to destroy gravity we are rapidly destroying oxygen generation capacity on this planet and it's not going to go very well for us if we continue.
Why not? Oxygen and gravity occur naturally. Nations with conditions favorable to technological innovation do not. They have to be built and maintained.
Loyalty or gratitude to an institution makes little sense to me (I'm probably in the minority on this in the general population), simply because an institution is incapable of loyalty or gratitude towards me.
I'm loyal or grateful to people, but rarely to abstract concepts.
So setting aside questions of what occurs "naturally", who should I be loyal/grateful to? The few enlightened bureaucrats who make a system better than average? The taxpayers who fund it, willingly or not? The bureaucrats who, at best, are ineffective at ruining everything? The rebels who make things happen by bending or ignoring the rules?
I wonder if the parent is objecting to the word "loyalty" - Loyalty implies a certain degree of unconditional support; while I think that when talking about countries, we're better off with conditional support.
That said, if by loyalty you mean conditional support, I agree completely. Governments don't exist in a vacuum, and there is constant pressure from the those who directly benefit from a less-efficient government.
I am - and to be fair I don't think anyone else used the word "loyalty", so I could be swinging at strawmen, but that's what some of the discussion sounded like to me.
There is a very telling story in the great book "Bad samaritans" ( http://www.amazon.com/Bad-Samaritans-Secret-History-Capitali... ). Among other things -- the author explains how in the 1850s, American travellers in Japan were surprised by the Japanese laziness and inefficiency, so much to make it almost proverbial. Doesn't it sound funny? In the 1850s, Japan was terribly underdeveloped, and in an underdeveloped environment you simply cannot do much to innovate, undertake new projects. So people everywhere in underdeveloped countries just seems lazy to people from the industrialized world, that was true of Japan in the 1850s, Korea in the 1950s, and many African countries nowadays.
The impetus later came from the central government, and in 1905 Japan was not a negligible country anymore. The moral of the story is that free-market bullshit and Ayn Rand books are just make-believe stories without any solid backing.
