Its worse than that. I've seen Exxon blow $600M on a competing technology that had far less to offer under anything resembling due diligence. The US government has blown billions on the Tokamak over a period of decades despite the founders of the program denouncing it. Then there is the Space Shuttle.
No, its not being "risk averse" alone that defines "dumb" money. The capital structures are constructed by rent seeking: Public sector rent seeking: Groups figuring out how to extract money from the taxpayer and/or Federal Reserve that they they, in fact, use to engage in more activities targeting the same public sector extraction. Private sector rent seeking: Investors looking for natural monopolies aka network effects aka network externalities while avoiding paying for the government services that protect their de facto monopoly properties. This results in a general capital structure in the economy that is incapable of doing risk assessment and management in technology development -- regardless of whether it is risk averse or not. On Sat, Aug 16, 2014 at 5:16 PM, <[email protected]> wrote: > In reply to James Bowery's message of Sat, 16 Aug 2014 14:34:24 -0500: > Hi, > > Indeed. Humans are very risk averse. They are willing to invest large sums > in > things they are tried and true, even if the promised return is only low, > but > very unwilling to invest in something completely new, even if the promised > return is very high. > This attitude could well be the downfall of civilization. > > >As far as I can see there is nothing _but_ dumb money out there. Let me > >define what I mean: > > > >I know of at least one technology that has, since 2009, been waiting on > >nothing more than about $10M dollars to reduce civilization's ecological > >footprint by at least a factor of 2 while increasing protein production to > >the point that, even passing through multiple trophic layers in the > >agricultural foodchain to high value meat and fish, would provide a diet > so > >rich the problem wouldn't be malnutrition but gout. > > > >When I say "waiting on" I mean it is demonstrated and the production line > >to manufacture it is already specified. > > > >Oh, I guess I failed to point out that what I mean by "demonstrated" is > >that its economics are not just profitable, they are _enormously_ > >profitable. > [snip] > Regards, > > Robin van Spaandonk > > http://rvanspaa.freehostia.com/project.html > >
