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If governments are such good bodies of innovation, then why are countries with relatively more powerful governmental sectors less innovative? Why do deregulatio

by nkmnz 5y ago

If governments are such good bodies of innovation, then why are countries with relatively more powerful governmental sectors less innovative? Why do deregulation and privatization almost always lead to more innovation? Not saying there are no downsides to weak governments, but Chomsky’s “cum hoc, ergo propter hoc” is not backed by any kind of thorough investigations of things that move - if the “cum” changes it’s nature over time from state-like to private entities, success grows. As always, interdependent systems are much more complicated - especially if you knew how little government actually did for Sicilian valley and MIT except for putting shit loads of money on the table. Incentives, ideas, Innovations - none of them came from parliaments, ministries or other governmental bodies, if they were not heavily emulating private structures.

tehjoker 5y ago
I would posit that Chomsky has performed far more research on this question than you have. Your assertions require citations, but even if true, they ignore the role of wealth and power in the world that allows highly advanced rich countries to dominate science and technology. Furthermore, the obvious counterexample of the USSR showed that state finance of science allowed it to compete toe to toe with the US for quite some time.
- nkmnz 5y ago
  Maybe the burden of proof is on you/Chomsky to show that governmental bodies - parliaments, ministries and alike - did provide more than just money.
  - tehjoker 5y ago
    In fairness, I have difficulty finding a book where he discusses this but he has a good interview: https://www.youtube.com/watch?v=Av96iIRa0f8 https://www.youtube.com/watch?v=Av96iIRa0f8
actually_a_dog 5y ago
You realize you're using the descendant of a computer network created by the US government so that military command and control could survive a nuclear attack, right? I could give lots more examples of things you use every day that were developed or funded by the US government, if you like.
- tored 5y ago
  That is all true, but the government is incapable of commercialization, so there isn't an alternative reality where we would have consumer wide spread state network if it wasn't privatized. And I think it is there Chomsky is wrong when calling it parasitic, when it is actually a symbiosis.
  - actually_a_dog 5y ago
    The government is only incapable of commercialization because we put artificial limits on it doing so. While we're spinning up hypotheticals, isn't there an alternative reality where we have an even better, free to access (because it's funded by everyone's taxes), ubiquitous internet? Wouldn't that be better than the status quo?
    - tored 5y ago
      What is status quo? Why is it bad? Why would it be free just because it is funded by taxes? It is true that it does exist some limitations on what kind of commercial interest the government can execute. Some by law (in Sweden for what a Kommun (city) can do, can't own property abroad), and some by agreement with other states (e.g. EU). Some of these limitations are necessary because there is a huge risk that politicians start gambling with tax payer money on high risk enterprises, we have many examples of that is Sweden, especially on the Kommun (city) level. That is usually why subsidies are preferred, because you transfer a large part of the risk to the private sector, the drawback is of course the the government doesn't share the earnings of that private company if successful, however because the government has the right to tax it does but indirectly. In Sweden the government subsidies broadband expansion but it is private companies that does the actual digging and then other private companies runs the broadband connection. The private consumer still needs to pay some sum to connect to the house, but heavily subsidized, that way you avoid unnecessary connections. There does exist a risk that state subsidies can create corruption, tax payers buys unwanted things from private companies, that is why it is important with a structured and transparent process regarding subsidies. However there is limitation on subsidies by agreement, with the membership in EU Sweden can no loger subsidy sectors to the same extent it could do previously and that is bad. I don't think Sweden's large broadband expansion would be possible if it was state run only. It would be like the old Televerket (the previously state run telecommunication company), slow, sleepy and not interested in solving problems for the consumer. But with the government injecting capital to the private sector the broadband expansion is mostly succesful.
diordiderot 5y ago
> why do deregulation and privatization always lead to more innovation This is called shiny object capitalism. Look at who produces novel therapies and drugs. The success of the 21st was built on piles and piles of cold war government handouts https://podcasts.google.com/feed/aHR0cHM6Ly9jaXRhdGlvbnNuZWVkZWQubGlic3luLmNvbS9yc3M/episode/ZjM2ZGYyYTctMDQwNy00MzJkLTk3Y2YtYTI5ODlhZmZkZjAw?ep=14 https://podcasts.google.com/feed/aHR0cHM6Ly9jaXRhdGlvbnNuZWV...
- turbinerneiter 5y ago
  This. Innivation is fueled by money. Innovation is risky. Private investors need a return on their investment. Public doesn't need a direct financial return. Hence innovation thrives wherever there is money with little strings attached. For smaller sums, private investors can do that (think about an accelerator that gives 1 million to 10 startups). For bigger sums, you need a space race against a foreign power funded by the gov.
cycomanic 5y ago
If you look at who innovates in the "hardware" space, it's often not US companies. I mean worldwide manufacturing is build around machines build and designed in Germany for example. I think what SC is particularly good at is growing very quickly to immense scale, because there is so much money floating around. That is also the reason why they put this into software, because the risks and timescales are much shorter. In hardware you likely have to put in years of R&D before you might see a RoI. In software that goes much quicker and because evaluation is based on "reach" you don't really need to make a profit, you just need to develop enough reach that someone else will pay you back your investment. Often much of the startup scene especially in software seems like a giant ponzi scheme, i.e. you never actually need to make a profitable business, it's always just about selling to the next investor at a higher price (see Uber for example).
- nkmnz 5y ago
  Germany is a relatively free country, especially if you compare the last 50 years of economic policy to it’s neighbors such as France or the GDR. While the latter example is self evident, the former has a long history of governmental mandated innovation as well - did not ensure a lot of competitiveness...
  - cycomanic 5y ago
    If you think France is not a free country and does not have a lot of innovation, you need to do some serious reading. France is the 3rd largest economy in Europe, has essentially the same GDP per capita as Canada (slightly below Germany).
    - nkmnz 5y ago
      The issue seems to be in the term “relatively”. I never said France was an unfree or poor country. I just said that Frances policies _in the past_ were heavily in favor of huge national corporations. Even though Germany had to adopt the GDR, it’s GDP per capita is >18% higher than Frances. Edit: sorry, the ussr commented was someone else.

by nkmnz 5y ago

tehjoker 5y ago

I would posit that Chomsky has performed far more research on this question than you have. Your assertions require citations, but even if true, they ignore the role of wealth and power in the world that allows highly advanced rich countries to dominate science and technology. Furthermore, the obvious counterexample of the USSR showed that state finance of science allowed it to compete toe to toe with the US for quite some time.

nkmnz 5y ago
Maybe the burden of proof is on you/Chomsky to show that governmental bodies - parliaments, ministries and alike - did provide more than just money.
- tehjoker 5y ago
  In fairness, I have difficulty finding a book where he discusses this but he has a good interview: https://www.youtube.com/watch?v=Av96iIRa0f8 https://www.youtube.com/watch?v=Av96iIRa0f8

actually_a_dog 5y ago

You realize you're using the descendant of a computer network created by the US government so that military command and control could survive a nuclear attack, right? I could give lots more examples of things you use every day that were developed or funded by the US government, if you like.

tored 5y ago
That is all true, but the government is incapable of commercialization, so there isn't an alternative reality where we would have consumer wide spread state network if it wasn't privatized. And I think it is there Chomsky is wrong when calling it parasitic, when it is actually a symbiosis.
- actually_a_dog 5y ago
  The government is only incapable of commercialization because we put artificial limits on it doing so. While we're spinning up hypotheticals, isn't there an alternative reality where we have an even better, free to access (because it's funded by everyone's taxes), ubiquitous internet? Wouldn't that be better than the status quo?
  - tored 5y ago
    What is status quo? Why is it bad? Why would it be free just because it is funded by taxes? It is true that it does exist some limitations on what kind of commercial interest the government can execute. Some by law (in Sweden for what a Kommun (city) can do, can't own property abroad), and some by agreement with other states (e.g. EU). Some of these limitations are necessary because there is a huge risk that politicians start gambling with tax payer money on high risk enterprises, we have many examples of that is Sweden, especially on the Kommun (city) level. That is usually why subsidies are preferred, because you transfer a large part of the risk to the private sector, the drawback is of course the the government doesn't share the earnings of that private company if successful, however because the government has the right to tax it does but indirectly. In Sweden the government subsidies broadband expansion but it is private companies that does the actual digging and then other private companies runs the broadband connection. The private consumer still needs to pay some sum to connect to the house, but heavily subsidized, that way you avoid unnecessary connections. There does exist a risk that state subsidies can create corruption, tax payers buys unwanted things from private companies, that is why it is important with a structured and transparent process regarding subsidies. However there is limitation on subsidies by agreement, with the membership in EU Sweden can no loger subsidy sectors to the same extent it could do previously and that is bad. I don't think Sweden's large broadband expansion would be possible if it was state run only. It would be like the old Televerket (the previously state run telecommunication company), slow, sleepy and not interested in solving problems for the consumer. But with the government injecting capital to the private sector the broadband expansion is mostly succesful.

diordiderot 5y ago

> why do deregulation and privatization always lead to more innovation This is called shiny object capitalism. Look at who produces novel therapies and drugs. The success of the 21st was built on piles and piles of cold war government handouts https://podcasts.google.com/feed/aHR0cHM6Ly9jaXRhdGlvbnNuZWVkZWQubGlic3luLmNvbS9yc3M/episode/ZjM2ZGYyYTctMDQwNy00MzJkLTk3Y2YtYTI5ODlhZmZkZjAw?ep=14 https://podcasts.google.com/feed/aHR0cHM6Ly9jaXRhdGlvbnNuZWV...

turbinerneiter 5y ago
This. Innivation is fueled by money. Innovation is risky. Private investors need a return on their investment. Public doesn't need a direct financial return. Hence innovation thrives wherever there is money with little strings attached. For smaller sums, private investors can do that (think about an accelerator that gives 1 million to 10 startups). For bigger sums, you need a space race against a foreign power funded by the gov.

cycomanic 5y ago

If you look at who innovates in the "hardware" space, it's often not US companies. I mean worldwide manufacturing is build around machines build and designed in Germany for example. I think what SC is particularly good at is growing very quickly to immense scale, because there is so much money floating around. That is also the reason why they put this into software, because the risks and timescales are much shorter. In hardware you likely have to put in years of R&D before you might see a RoI. In software that goes much quicker and because evaluation is based on "reach" you don't really need to make a profit, you just need to develop enough reach that someone else will pay you back your investment. Often much of the startup scene especially in software seems like a giant ponzi scheme, i.e. you never actually need to make a profitable business, it's always just about selling to the next investor at a higher price (see Uber for example).

nkmnz 5y ago
Germany is a relatively free country, especially if you compare the last 50 years of economic policy to it’s neighbors such as France or the GDR. While the latter example is self evident, the former has a long history of governmental mandated innovation as well - did not ensure a lot of competitiveness...
- cycomanic 5y ago
  If you think France is not a free country and does not have a lot of innovation, you need to do some serious reading. France is the 3rd largest economy in Europe, has essentially the same GDP per capita as Canada (slightly below Germany).
  - nkmnz 5y ago
    The issue seems to be in the term “relatively”. I never said France was an unfree or poor country. I just said that Frances policies _in the past_ were heavily in favor of huge national corporations. Even though Germany had to adopt the GDR, it’s GDP per capita is >18% higher than Frances. Edit: sorry, the ussr commented was someone else.