 Okay, so, so shifting now. So the reason, the main reason I wanted to talk is that, you know, I generally described myself as a proponent of free markets, I believe that capitalist culture and institutions are responsible for the incredible advancements and quality of life over the last one to 200 years. So that is my view, I consider myself a proponent of limited government, but when people ask me, do I think that the state should play a role in the economy under certain circumstances? I do tend to make the following argument, and I'm pretty sure you disagree with it, and I'm open minded on this subject, I'm certainly not doctrinaire about it. But, you know, my current view I think is different from yours and I want to understand what you would say in response to this point of view. So let me just lay it out in like three to four minutes and then you can respond. So, for the last few years, I've been saying to people in conversations about this that even though states rarely succeed in fostering innovation and in turbo charging complex industrialization, states can be extremely useful and may even be critical for achieving these objectives, particularly if the goal is to achieve them quickly. And the basic argument here is that private firms have fewer resources than states, and they have to be profitable, unlike states. Having fewer resources than states and needing to be profitable unlike states means that private firms are less likely to have enough resources or enough appetite for risk to make the investments necessary to develop highly expensive technologies that may take decades to become marketable like aircraft, rockets, the internet. States also don't have enough resources to make the initial investments necessary to get really complex industries going steel, cars, ships, electronics, computers, and to protect them and nurture them in their infant, in their infancy. So, for these reasons, I've heard it said that the state is necessary for the development of technologies, but that the, or let me say that again, I've heard it said that the state is necessary for developing technologies and that the private sector is really good at commercializing them. One other point that I'll make in this regard is that states also at times have really powerful incentives to develop technologies and industries, unlike any and unlike any incentives that companies might have and I'm talking about total war I'm talking about existential conflict. Total wars provide states with an unparalleled incentive and existential incentive to develop and improve technologies because if they don't they're going to get destroyed. And it's remarkable in this connection to think about how many major technologies in the 20th century in the United States originated or rapidly advanced during World War two, whether it's aircrafts or semiconductors. And to immediately qualify this by saying admittedly in many countries, it might be impossible for the state to drive innovation, or to nurture successful industries of the future the state might be too corrupt. The society may not have sufficient human capital so that state investment is relevant. But if the state is not too corrupt. And if there is sufficient human capital state action maybe the only way to innovate and to become competitive and complex sectors is relatively quickly. And the two main examples that I have in mind when I think about these arguments are the US in the 20th century I think that's a good example of state investments, particularly Pentagon funding being necessary for hugely important innovations in the 40s 50s 60s and then the East Asian Tigers, South Korea and Taiwan, and to some extent China are good examples I think of state investments being necessary for the creation of really successful competitive companies in complex sectors of the economy like steel shipbuilding cars electronics computers, where these countries that they had just done what they had comparative advantage in, they may never have developed these sectors and they certainly wouldn't have done so as quickly as they did. So, yeah, I'll stop there but so again, I'm generally a proponent of free markets but it does seem to me that the state has played a really important role in developing innovative technologies particularly for example in the United States in the 20th century, and in turbo charging a complex industrialization process, as has been seen in the case of East Asian Tigers in the last 50 to 75 years. So what do you say to that. Yeah, so this is a, this is a pretty common argument among economists and, and among proponents of, you know, the, I'd say the better proponents of a limited government who think government should intervene in basic science and certain issues around technology. I, you know, I think it's, I think it's wrong. I think it's, again, I'll start with a moral point with a philosophical point. And that is, even if everything you said was true, which I don't think it is. But, and we'll get to that but even if that were true, then I'd still be against it because so progress will be slower. So technology will take longer. I don't I certainly don't think you use the word necessary a number of times. I don't think any of that is necessary. Right. There's no proof of that and I'll give some counter examples. The much more fundamental point is the state has to take money from some people to give to others that I think is morally offensive and morally wrong. It then allocates it based on priorities that have nothing to do long term I think with human well being even in the best run states. We can focus on the, I don't know the exact percentage and nobody's done the research that I know of the exact percentage on the success stories. And we ignore the failures, probably 90% of the investments. All the research grants that went to nothing because and we don't know because we don't know them right. So some you can see the white elephant, petrochemical and drug industry investment to Japanese government tried to steer the economy towards and you can travel through Japan and see the massive plants that sit empty today. Because, because what we know is the industries were successful we forget about the stuff that wasn't. And we don't have a counterfactual. Right, we don't have the alternative. So, so, you know, we now have philosopher kings deciding what technology is going to be good and what isn't who among scientists should be invested in who shouldn't. I think they, while again we see the successes, what we don't see are the things that might have gotten funded under different system that didn't for political reasons. What is stem cell stuff that could have happened if not for Republicans under Bush and others stopping it. What about all the nuclear technology that would have evolved if not for the state stopping it, you know, if the state is going to fund science the state's going to regulate science. What about the fact that it's probably likely that if I do a, if I get a government grant and my results of my study are, you know what, the world is doing great. Things are fantastic. Don't do anything. People will never get another grant. But if my results of my study are the world's going to end in 20 years unless we do XYZ. I need another grant to study how to do XYZ effectively. I guarantee myself a lifetime of funding. Right. And I take, I take climate change as an example and maybe COVID, you know, maybe you could argue some of the stuff in COVID is related to government funding of science and the incentive that is associated with that. So I am very skeptical about government funded science. It's true that if you give hundreds of scientists money, thousands of scientists money, which is what the government does grants the thousands of scientists, a few of them will do major things that will have an impact on the world and we will all identify. Yes. You know the woman who single handedly basically drove MRNA technology. Right. Yes, she was a bulldog she's a she's a Romanian immigrant to the United States that worked at the University of Pennsylvania for a while. And she just will grant application after most of them will turn down, but she was just a bulldog she just stuck with it and she got it. Now you could say the government did it because they funded her. Yeah, but what about all the grants she didn't get maybe we could, you know, save 20 years on this. I mean, who knows. But the point is, yes, if you if you diversify now, which is what government does. Some of it will succeed the MRNA technology will succeed. What about the the the thousands of scientific grants that were given to people who found no results. Oh, here's one other one other example just came to me. What about all the research into that the government funded government promoted and then the government supported into for example, health. So for example, we should eat you know the government food pyramid. There's major major evidence. It's wrong. Right. It's just wrong. It's not good for you and it maybe it's it's the cause of the obesity crisis, right because it emphasizes simple carbs and sugar and things like that. And fat, you know for a variety of reasons fat might not be that bad for you, particularly in comparison to things like sugar. All government side government driven science, all a disaster, maybe have caused massive obesity in this country, massive amounts of diabetes and heart disease and so on. Do we weigh the costs of that versus the benefit that we attribute all those stuff I'm not, I'm not convinced that if you weighed that properly, you would get a positive outcome. Okay, now to some of the specifics. So, with regard to government development of technology and its role in developed technology. I'm going to give you a website that I think, you know, it's just it's just an amazing resource and provide a lot of, and it's not necessarily just agreeing with you. But it for those arguing for the extreme, just all government driven and everything. This guy really presents some great arguments and he goes through the books and he. So this is called his name is, it's Nintel, N-I-N-T-I-L dot com, N-I-N-T-I-L dot com. He's Spanish so you have to put on translate but the translations are really good for his articles but this guy is just brilliant in my view I mean he went through the state that that book by I forget her name, and he goes section he goes pretty much paragraph by paragraph, and questions, and he goes to the original reason so he goes to sources, right to shield site something, he'll go to the citation and show what's really going on anyway. This is the conclusion he came to about war because he has a whole thing about the Air Force about about the idea of here two things that he says. First he says, most economic historians, including for example, an economist by the name of Joe McCoy, M-O-K-Y-R, assessed the effects of war on technological innovation is largely negative with a few exceptions. Exceptions of economists but most economists right. The reason of the above is that war encourages a conservative approach to technology, inducing demand for existing technology. Thus, most war technology was developed prior to the war. Third point, the more developed the technology is the heart of a spin ups, spin ups of military technology to be successful. This is required understanding the effects of military R&D, but that whole research is plagued with difficulties, there's real difficulties in assessing that. So, it seems like most economic historians and I haven't studied the literature thoroughly, actually think technology innovation and for example, World War II. One of the things the World War II did very well is leverage Bell Labs and what it went to Bell and it leveraged some British scientists. But what they did is they basically went to Bell Labs and basically accelerated the development of existing technologies or technologies that were being speculated on and now there was funding to go full throttle. And there's no question that happened and that accelerated it. I don't think that's true of the, of ultimately the semiconductor but certainly some of the other technologies semiconductor really did come out of Bell Labs. And you could argue about Bell Labs is it a pure, is it a lab that was really private because it was protected in a sense by AT&T's monopoly power that was granted by government so a real monopoly in the sense of government granted it. But there are other corporate labs and other private research labs. He also makes the point about aircraft because there's a lot, there's a book about right and he, he reviews the book that says aircraft development could have happened if not fall. So this is what he writes about this which I thought, what would account a factual look like, he says to the whole question. Imagine no world wars, no email subsidies, no NACA which I guess was a was a was an entity that that the government ran. Scientists working for NACA would be elsewhere. Without military pressure for NACA, GALCET and other Guggenheim funded or other Guggenheim funded colleges would have taken the throne so other Guggenheim funded colleges would have taken the throne of top aircraft research centers. The aircraft manufacturing would have remained low as research advanced, eventually advances in this technology, perhaps even funded by manufacturers would have enabled the construction of profitable aircraft, following the same row jet engines would have been integrated at some point. So I'm willing to grant that the government support was very important, and that it could have accelerated the pace of development, but the mass manufacturing of aircraft for the war did not. And I include here that war was not necessary for the appearance and growth of an aircraft industry, but that it could have accelerated it could have accelerated. The government isn't an NACA, which is the one entity sites here isn't an example of state entrepreneurship, as apparently the ones pushing for the case for NACA forward with an article society who just wanted to see more progress in things they liked, and the initial reaction of government officials wasn't very appreciative that is it was a lot of resistance from government, as you'd expect. So, on every one of these technologies, what is the counterfactual. So, and here I think he undermines the, I mean, the kind of fact shows much larger right. What happens if we're not taxing people at 50% of their income. What happens if we're not taking, you know, 20 something percent of corporate profits. What happens if private if government is not crowding out and we know the crowding out effect while documented in economics, what happens of government is not crowding out private entrepreneurs private businesses private philanthropists from investing in science and technology. I can guess I don't have the parallel universe in which it's happening, but we know that private that private entrepreneurs are interested in science for example we know the billion is what imagine if a billion if they're more billion is because under capitalism I believe they're more billion is right standard of living would be much higher partially because I think they would be funding science and they would be funding more science more effectively the grant system science grant system in the United States is broken. It is an effectual even people in the, that associate with the state funding of know this, for example one just little observation it used to be that young scientists got the majority of the grants. Today it's old scientists get the majority of the grants, yet innovation is almost not exclusively but almost exclusively young person's game, think of the big breakthroughs of Einstein, almost all of them came when he was very young. It's, you know, it just is it's it's true in it's true in almost every field that that particularly thinking outside of the box and thinking you and breaking out of the box is something a phenomena of younger people. So, you know just fixing that would probably change the pace of innovation and yet one can imagine the private entrepreneurs private businesses would would be much more oriented towards success, much more oriented towards result orientation much more, just like I think charity would be much more effective at helping the poor than welfare, because I think people who gave to charity would be much more interested in results than the welfare state, which I don't think is that interested in results. So the whole incentive the whole motivation, everything about funding of science would be different now with some things that develop slower. Yes, with something is a very faster. I think so. The whole landscape of technology would be different, but would it be different in a negative way I very much doubt it. And let me add one last point. Look, was happen. I don't deny the need for for Defense Department. I don't deny the need for Defense Department to fund certain types of technology that help defend the state. That would orient technologies in a particular way, whether that from an economic perspective is the best way to orient technologies probably not, but it's a necessary way in order to facilitate defense. So Defense Department would would fund certain projects, even if they were not optimal, they would fund them because they need them in order to defend. So, yeah, some developments would happen because of the state some technologies would advance and again it might even be sub optimal. But I would be for it because I think the Defense Department has to stay on top of these things and make sure that it can defend the country. So that that would be my answer. It's actually really helpful for me because I think the main thing that you're offering in this conversation that I haven't really done in my own thinking about this is when someone says the state is necessary for the development of highly innovative technologies or the development of really complex industries from scratch and a generation or two. The move you make in the argument is to say, well, compared to what, like, right and so it so I don't think you dispute that, as a matter of fact, in the last 100 to 150 years, a lot of technologies and industries have been have depended on high levels of state investment. But that's about about 70 years because I don't think that's on 70 years. Okay, fair enough for the last 70 years but but I think, but what you're saying I think is, but let's imagine a world in which the state is radically limited and what it does and all of this has to do with the capitals and private hands. First of all, you're saying there would be more capital, because there'd be more wealth. And, and then a lot of that would be allocated toward the development of innovative technologies and industries and who's to say that that very distant alternative universe would not would not birth a much more innovative, more interesting and advanced society than the one we currently inhabit. What we need today, what I called a new intellectual would be any man or woman who is willing to think, meaning any man or woman who knows that man's life must be guided by reason by the intellect, not by feelings, wishes, by mystic revelations. Any man or woman who values his life and who does not want to give in to today's cult of despair, cynicism and impotence and does not intend to give up the world to the dark ages and to the role of the collectivist. All right, before we go on, reminder, please like the show. We've got 163 live listeners right now. 30 likes. That should be at least 100. 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