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This essay makes a fallacy case, "it is this way, therefore it must be this way". It takes a lot of liberties with evidence to come to a crazy conclusion. I gr
by cturner 13y ago
This essay makes a fallacy case, "it is this way, therefore it must be this way". It takes a lot of liberties with evidence to come to a crazy conclusion.
I grew up in a small state in Australia. Business there keeps close with state government: there is a stench of cronyism about much of what goes on. The standard business model there is to wait for a state government grant structure, and then weasel up to it with the right paperwork and hand-shaking to get what you want. Within the bureaucracy you have people lining themselves up to bounce out into firms.
The government maintains high taxes, and then spends those taxes either tying itself to emerging business like this, or propping up failing business like car companies. And it needs a large, skilled public service to keep it all moving. The result is that labour that could be used doing something people want is wasted, and it's harder to operate free business due to the high taxation and bureaucracy. It's not a stalled situation: many good people do still find good, rewarding local jobs creating real value despite this. But a lot of talent drains away, and there's not much innovation despite a healthy university culture.
The way things work in world cities is different and better. For the most part, the more government stays out of business, the more success there is.
Perhaps Apple did receive some benefits in the early years. Where benefits are there for the taking, it is rational to take them. But it is not evidence that such benefits were critical to the success.
Governments don't pick winners - only their mates. For progress, look elsewhere.
As an example of a paragraph that just doesn't work, "Other ways include giving the state bank or agency that invested a stake in the company. A good example is Finland, where the government-backed innovation fund SITRA retained equity when it invested in Nokia. There is also the possibility of keeping a share of the intellectual property rights, which are almost totally given away in the current system."
* Repeatedly we see state investments in companies pursuing political objectives with their shareholding at the expense of development or the company's interest. Look at the way Lower Saxony hampers Volkswagen's development. Or oil companies anywhere they have been nationalised (Venezuela, Mexico, Russia).
* Picking Nokia as an example of innovation?
* Intellectual property is an idea created entirely by government for the purpose of picking winners. It has no philosophical underpinning - it's just arbitrary regulation.
* "which are almost totally given away in the current system" - what does this even mean?
Awful article.
- calibraxis 13y ago> Picking Nokia as an example of innovation? She used Apple as an example too, which around here is uncontroversial. If you want to learn more, she wrote an entire book explaining the article's statement: "And every technology that makes the iPhone a smartphone owes its vision and funding to the state: the Internet, GPS, touch-screen displays, and even the voice-activated smartphone assistant Siri all received state cash. The U.S. Defense Advanced Research Projects Agency bankrolled the Internet, and the CIA and the military funded GPS." Furthermore, she clarifies in her TEDx talk [1], that Nokia's problems are its own executives' misjudgements, as is clear. (Just as the US isn't responsible for every failed US tech firm.) Nokia obviously did quite well from state subsidies, just as US firms do. (I recommend this TEDx talk, which goes deeper into the context than the brief Slate article.) I find Mazzucato quite reserved in her critique of religious economic ideology, despite people willfully reading "madness" into a brief Slate essay, rather than carefully investigating her work. Not only did she explain in a book, but she even made a Youtube channel investigating this theme with other economic/political figures. [2] Her work came from an INET grant [3], not an insignificant institution. [4] [1] http://www.youtube.com/watch?v=jyp3Bw5H0VA http://www.youtube.com/watch?v=jyp3Bw5H0VA [2] http://www.youtube.com/user/RethinkingTheState http://www.youtube.com/user/RethinkingTheState [3] http://ineteconomics.org/blog/institute/ha-joon-chang-and-mariana-mazzucato-rethinking-state http://ineteconomics.org/blog/institute/ha-joon-chang-and-ma... [4] http://en.wikipedia.org/wiki/Institute_for_New_Economic_Thinking http://en.wikipedia.org/wiki/Institute_for_New_Economic_Thin...
- ada1981 13y agoHaving written a book and created a YouTube channel isn't any sort of evidence for the validity of much more than the creators ability to create a book and YouTube channel. Because a government offers funding at a low rate and an entrepreneur takes advantage of such a rate doesn't mean the government "innovated". I think NASA and the moon are a good example of innovation in the relm of war. The space race was about international posturing and displays of technological capability as a deterrent to engaging in nuclear war. Of course we lost most of the "events" of the space race save putting someone on the Moon. It seems plausible governments could be innovative as they are comprise of humans and humans can create things regardless of context. Long scale planning certainly is a strength of a government, because in theory in means funding can be coerced from citizens and invested into projects that they wouldn't normally choose of their free will via the marketplace -- but they often simply don't invest in good long term projects. Perhaps I'm wrong.. the promise of wealth seems to be a primary motivator, and since governments amass large sums of money through coercive taxation, I suppose they can be a motivational source for inventors and entrepreneurs, but I'm just not comfortable with saying governments are more innovative than individuals.