Jed Rothwell wrote:
I wrote:
Of course some disruption is inevitable, and jobs will be lost, but
that can easily be balanced by social improvements and new jobs. But
we have to decide that is how things will be. We have to make
decisions, set policies and allocate money.
I realize that such decisions and policies sometimes interfere with the
mechanisms of pure free-market capitalism, and this reduces efficiency.
If economic theory is correct, cold fusion technology would be
propagated at the fastest possible rate if we allow Ayn Rand style
capitalism a free hand to destroy jobs and disrupt society.
I disagree with this assessment.
Monopolies are a natural consequence of unbridled capitalism and they
can have every bit as strong a restraining influence on progress and
dissemination of new ideas as any government.
Economic theory of monopolies also includes cartels and everybody's
favorite, the Trade Unions. Neither of these tends to push for rapid
progress on all fronts, and yet neither is the result of government
intervention, either. They're both just the result of "natural"
economic forces. And when businesses band together to resist the trade
unions, they're attempting to exercise monopsony power, which, depending
on how it's used, can also cause problems with economic development.
Everybody knows that Ayn Rand's notions fail to provide a sensible plan
for providing lighthouses (the classic example of a public good for
which one can't easily charge a toll). However, there are a number of
far less obvious issues which are left out of libertarianism, too.
Healthy competition and rapid propagation of new ideas both seem to
require a little input from an Uberorganization ... i.e., a government
... which doesn't have a big vested interest in continuing to do things
the Way We Already Do. Monopolies, which can happen naturally, can't
fill that roll.
This might
also bring in the most monetary profit. Capitalism is essential, after
all. But it is not the only essential institution, and society is not
one-dimensional. If we must slow down the commercialization of cold
fusion slightly, and reduce profit somewhat in order to preserve a
measure of social stability and happiness, we should. It is worth the
trade-off.
Anyway, at this stage, capitalism has done nothing to develop cold
fusion, so it is not the be-all end-all solution to all problems. So
far, all progress in cold fusion has been made by academic professors
who are is far removed from capitalist competitive pressure as anyone
can be. Many other essential breakthroughs have come from outside the
economic system. The Wrights, for example, gave no thought to profit
when they invented the airplane. They thought it would never pay. They
acted purely out of curiosity and the love of learning.
The people have developed the Internet had no thought of profit, and
they never made one extra dollar from their work. They were all
government employed programmers, doing their job at published government
salary levels. These salaries are generous but they include no extra
incentive payment, even though the Internet is one of the most important
technologies in history.
The laws of economics are constraints, similar to the laws that govern
structural engineering. If you ignore the laws of structural
engineering, your buildings will collapse. But within the constraints
these laws define, you can create an enormous variety of different
structures. Some structures, such as an airplane hangar, will make
extraordinarily efficient use of the materials to cover the largest
possible area. Other structures, such as a Victorian house, will waste a
lot of materials to produce a charming effect. Some economic structures
produce fantastic profits in a short time, such as WallMart superstores.
Others are inefficient and wasteful, such as Japanese mom-and-pop retail
stores. But these small stores take care of many people and they enliven
neighborhoods and make life more pleasant.
- Jed
