Can The US Continue To Innovate At A Necessary Rate Without Causing Complete Social Upheaval?

from the the-question-of-the-upcoming-decade? dept

Chris Tolles points us to what I have to say is an absolute must read piece by Jim Manzi (who I haven't always agreed with in the past), exploring the biggest challenge the US faces in going forward. It's difficult to express how important and worthwhile analysis this is. I don't agree with everything, but it frames the issues in ways that are incredibly helpful. There's very little I disagree with in the first half, which highlights the basic struggle that the US faces in really clear terms: innovation is necessary for economic growth, and less government interference is key for the type of innovation we need. However, with such innovation comes social upheaval and disruption that creates a different set of problems that could be just as bad for the US:
Our strategic situation is shaped by three inescapable realities. First is the inherent conflict between the creative destruction involved in free-market capitalism and the innate human propensity to avoid risk and change. Second is ever-increasing international competition. And third is the growing disparity in behavioral norms and social conditions between the upper and lower income strata of American society.

These realities combine to form a daunting problem. And the task of resolving it turns out not, by and large, to be a matter of foreign policy. Rather, it compels us to consider how we balance economic dynamism and growth against the unity and stability of our society. After all, we must have continuous, rapid technological and business-model innovation to grow our economy fast enough to avoid losing power to those who do not share America's values -- and this innovation requires increasingly deregulated markets and fewer restrictions on behavior. But such deregulation would cause significant displacement and disruption that could seriously undermine America's social cohesion -- which is not only essential to a decent and just society, but also to producing the kind of skilled and responsible citizens that free markets ultimately require. Moreover, preserving the integrity of our social fabric by minimizing the divisions that can rend society often requires government policies -- to reduce inequality or ensure access to jobs, education, housing, or health care -- that can in turn undercut growth and prosperity. Neither innovation nor cohesion can do without the other, but neither, it seems, can avoid undermining the other.
There's a lot in the piece that I wanted to quote, but you should just go read the whole thing yourself. Manzi basically points out the difficulty in pulling any of the levers: if you increase the pace of innovation, you also increase social upheaval at the lower end of the pyramid. But if you work to protect social upheaval, you decrease the pace of innovation, and in a global economy, that can actually lead to another set of problems that, in turn, also could result in serious problems for the economy.

It's a really sobering picture that is inherently non-partisan, and highlights how the views and plans of both major political parties, when implemented by people who don't understand these countervailing forces, is likely to make the overall situation worse, not better.

The only thing that leaves me wondering is the claims of stratification between the haves and the have-nots is as extreme as Manzi points out, and as big a problem. I don't deny that there is a massive divide between the haves and the have-nots, and the situation for many in the lower strata of society is bleak with little chance for many to improve (there are, of course, exceptions, but the probability of those exceptions is low). My question is really about whether or not Manzi is only presenting the worst of the have nots and implying it runs across a much larger group. He uses out-of-wedlock birth rates as a proxy, but makes no clear indication of why that's the proper measure. It may be, but he doesn't present the evidence.

In fact, I'm wondering if Manzi conflates a few separate items in this part of the analysis -- suggesting that it is the upheaval and creative destruction brought about by innovation that is creating this social upheaval. I'm sure it's true in some cases, but it's not clear that it's the case across the board. In fact, in many cases, you could argue that the economic upheaval brought about by creative destruction has, in fact, created many new opportunities for those who were greatly limited before. This was certainly the case in the two historical shifts Manzi discusses: from a farming to industrial society, and from an industrial to service economy.

That said, I do think the larger issue that he raises is probably correct, and worth understanding. Increasing innovation and economic growth is absolutely key -- but such things do displace people and jobs, and those people will fight like hell to have the government protect those jobs, and will become angry when the government fails to do so, and that can create social unrest and populist political movements that do more harm than good. But those movements aren't necessarily driven by the same people that Manzi was discussing earlier as "have nots." In fact, many of those movements are often engineered by the "haves" who are seeking to just have the government prop up their existing markets in the face of competition driven by innovation.

That doesn't mean that we should ignore the displacement, or the resulting anger, but we should be careful to understand who is really impacted and how -- and also where the anger is truly coming from.

He worries -- correctly, in my opinion -- about the overall impact of many of the policies put in place by the current administration as well as those put forth in the end of the previous administration. He feels -- and again, I agree -- that the efforts to "rescue" Wall Street and Detroit go way too far towards trying to limit social disruption, and in the process likely harm our ability to innovate and grow. He's also worried that the same is true of health care reform.

From there, Manzi goes into a list of four broad proposals, though I honestly felt that they didn't measure up to the broader thesis. Of his four broad proposals, I don't necessarily disagree with any of them. They include (1) getting out of owning/controlling Wall Street and Detroit as quickly as possible (2) not going too far in over-regulating Wall Street, but focusing on ways to limit fallout from failed investments by trying to prevent systemic risk in the nature of too much interconnectedness (3) reforming the public education system to make it more competitive and less process oriented and (4) reforming immigration completely to focus on targeting getting highly skilled workforces to immigrate to the US, no matter in what numbers or where they come from.

Perhaps all four need to be fleshed out much more, but given how compelling the opening of the article was, those suggestions seemed to lack the overall oomph to actually make a difference. They do little to actually impact the sectors in the US where innovation is most important. The thing that seems most absent in all of this is the transparency aspect. The biggest problem wasn't necessarily the interconnectedness of the financial sector (as Manzi states), but the lack of transparency over that interconnectedness and what it meant. The issue was that people didn't realize how a single event (or a small group of events) might funnel through the rest of the system. The interconnectedness of it all was a symptom, but the real problem was that there was no way anyone could back out the pieces to figure it out. It was the fact that the whole system relied on obscuring what was really going on by playing a weird game of hot potato.

Still, while I think there are some issues on the margins, I have to say that Manzi's piece puts a really fascinating perspective on the position the US is in today, and certainly got me thinking about the state of the economy from a different perspective. The battle between innovation/creative destruction and social cohesion is a really good point that deserves a lot more studying and thought -- though, I doubt we'll get that from those in power positions in either of the two major political parties.


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    strawberry banana, Jan 8th, 2010 @ 7:42pm

    excellent

     

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    The Anti Mike, Jan 8th, 2010 @ 8:52pm

    This post is too short! Or long! Or something.

     

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    Tom (profile), Jan 8th, 2010 @ 10:11pm

    Nonsense

    The only people that are hurt by a fast rate of innovation are the parasites, the looters, the bureaucrats in washington who have to work hard to figure out how to stick their evil greedy fingers into the new technology and use their political power to rake in the cash at our expense.

    In the real world, innovation helps everyone, ESPECIALLY the poor.

     

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    Chargone (profile), Jan 8th, 2010 @ 10:30pm

    Re: Nonsense

    go tell that to the working class of England in the industrial revolution, to name one example off the top of my head.

    innovation, in general, helps everyone, to a degree, eventually.

    specific innovations, however, will often also cause various types of harm to various people. typically speaking, the poorer folk have a much harder time of avoiding the resulting fall out.

    not that i quite disagree with you here, Tom, just think you're making grand generalisations without a whole lot of obvious logic or thought to 'em.

    (i, personally, happen to find the US government annoying at best, and i don't even live there :P )

     

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    TW Burger (profile), Jan 8th, 2010 @ 10:36pm

    Another Part of the Problem

    Any problems with the relationship between technology and the economy is the fault of social mismanagement - not the technology or its rate. Humans have mostly stopped evolving on a genetic level (most of us live long and have children that we pass our genes to - its not just the very fittest). We now evolve through technology and unlike the classical Darwinian theory that has evolution as a gradual change, it is accepted and observable that evolution is more often drastic and can be chaotic. Since we ourselves can now govern what we become it up to us to create a system that allows us to be and have the best. And that does not mean the richest.

     

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    Chris in Utah (profile), Jan 9th, 2010 @ 1:07am

    I think he had his own solution

    (2) not going too far in over-regulating Wall Street, but focusing on ways to limit fallout from failed investments by trying to prevent systemic risk in the nature of too much interconnectedness (3) reforming the public education system to make it more competitive and less process oriented

    Ya do #3 you solve #2

    When people "learn" or discover they can prosper among there competitors solves monopoly "interconnectedness" doublespeak.

    Yeah politico nowadays isn't any way to actually innovate solutions. Too old. Still remembering the 2009 picket signs "You don't listen you don't hold your seat" from the Kick them out movement this country is currently seeing.

    People actually waking up to what a representative actually is and getting out dead weight in the way of the innovative solutions this country so desperately needs.

    Though the top voices have been ridiculed to the point of obscurity. If you cant beat them shoot at there stature. There is a list that I adhere to for the voices for myself and of Rage Against the Machine generation. Though i seldom give them out, reason being; You don't learn anything if your handed the answers.

     

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    Anonymous Coward, Jan 9th, 2010 @ 2:47am

    "In fact, many of those movements are often engineered by the "haves" who are seeking to just have the government prop up their existing markets in the face of competition driven by innovation. "

    I would argue that this is true the overwhelming majority of the time. The "have" usually only "have" because they regard morality less than the rest of the population and so they won't let morality get in the way of their wealth. They think that lacking morality somehow makes them special and more deserving of wealth. and yes, they would and do absolutely fight for government intervention that unfairly favors them being they don't care about morality.

     

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    Anonymous Coward, Jan 9th, 2010 @ 2:52am

    "Can The US Continue To Innovate"

    Our current intellectual property laws are not conducive to innovation (ie: the terms last way too long and the laws almost always only apply to poor people and not rich people or rich corporations).

     

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    Anonymous Coward, Jan 9th, 2010 @ 3:07am

    The way it works is that poor people want to become rich and acquire wealth. Of course they don't have the resources to lobby the government so their only choice is to innovate. Immoral rich people, on the other hand, are happy with the way things are (well, they're not happy because they want even more wealth) and see innovation as something they should unfairly benefit from and they see it as a potential threat to their current status as well. Since many rich people disregard morality and they have the resources to successfully lobby the government they lobby for intellectual property laws and other laws that will allow them to unfairly exploit any innovation even if at the cost of innovation. Hence the ridiculous intellectual property laws that exist today. Hence cableco companies get a monopoly on who can use the existing infrastructure and who can build new infrastructure. Hence the monopolies that taxi cab drivers get. Hence the fact that taxi cab drivers stole the innovation of putting ads on a transportation vehicle from someone who did innovate because the current taxi cab industry does not innovate, it only steals innovations from others. The government intervenes in such a way as to give the non innovative rich people complete control over innovations in a way that optimally benefits them at the cost of society and at the cost of those who do/would actually innovate without such ridiculous laws.

    and another purpose (not function, but INTENDED function) of intellectual property is that it can hinder innovation by allowing a corporation to patent something it never plans to develop. The purpose of this is to prevent others from innovating and creating a product that could disrupt the existing status of immoral rich people.

     

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    Anonymous Coward, Jan 9th, 2010 @ 3:20am

    Re:

    That is, we should see innovation as an attempt to acquire more. Those who innovate are attempting to acquire more. However, innovating takes time and effort and resources the incentive for the rich to innovate is limited by the backwards bending labor supply curve. That is, as you become more wealthy you work less because each additional dollar becomes marginally less valuable compared to its opportunity cost (at the marginal level). Innovation = work. So rich people innovate less. However, they don't want to lose a lot of their wealth because they value the sum of their wealth a lot. But they make so much money that the last couple of dollars that they do make isn't that marginally valuable to them and so they are willing to spend it on lobbyists and on efforts to either ensure that they unfairly benefit from the innovations of others or to ensure that the government restricts innovation by either regulating it in a way that unfairly benefits them and prevents the innovation from disrupting their wealth or by preventing innovation.

    On the other hand, the "middle class" probably has the most incentive to innovate. They're at about the stage where they have incentive to work more to make more money and since innovation is work and reaps more money and that additional money is marginally valuable enough to them to justify more work they are more likely to innovate (that is, they are not at the stage of the backwards bending labor supply curve that motivates them to work less).

     

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    Anonymous Coward, Jan 9th, 2010 @ 3:30am

    Re: Re:

    and of course poor people are unlikely to innovate because they lack resources and innovation often requires resources. Also, innovation tends to require an education and poor people tend to lack an education as well.

     

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    BBT, Jan 9th, 2010 @ 4:00am

    "less government interference is key for the type of innovation we need."

    Faith-based statement.

     

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    BBT, Jan 9th, 2010 @ 4:04am

    Also, the idea that this Reagan-worshipping article is "non-partisan" is a joke.

     

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    Andrew F (profile), Jan 9th, 2010 @ 4:15am

    A safety net helps limit social upheaval -- or more accurately, worrying about food leads to all sorts of chaos.

     

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    :), Jan 9th, 2010 @ 4:21am

    paralyses

    The U.S. government no more is capable of doing anything. It is paralyzed by the market.

    It can't respond to changes fast enough and don't even have the capabilities to respond to old problems.

    The answer will not come from the government. The solution will come from society that must change and adapt and it will be painful.

     

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    Griff (profile), Jan 9th, 2010 @ 4:50am

    Parallels with sport

    If you look at what happens when a country (eg Australia) sets out to boost sport in pursuit of a better gold medal tally at the Olympics, it makes a good parallel with innovation and tech business success.

    Should we encourage grass roots sport (analogous to better education for the whole populace) or should we fund elite sporting institutes (analogous to assisting the VC funded startup with tax breaks or whatever).

    I would contend that in a rapidly globalising world, USA cannot afford to sit back while their schools deteriorate and rely on the quality of privately funded higher education institutions. (Not least because these private institutions are also educating the stars of the other countries USA competes with. It's like having a US Sports institute that also trains the Russian Olympic team then wondering why there is no competitive advantage.)

    For a competitive advantage, USA needs to give it's innovators an edge over their opposite numbers in other countries, that is more than just lower state taxes.

    I favour pulling the grass roots lever because
    - you won't find the gold medallists if they never take up the sport in the first place
    - the "have nots" won't get left behind so badly if they are all educated better.


    Of course, there is the argument that the US Govt doesn't care if the next google is created by an American as long as they choose to pay taxes (and employ staff) in the USA. But they'd only stay if there was a well educated employee pool.

    They need to get the H1B visa numbers back up too !

     

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    notthe600, Jan 9th, 2010 @ 5:57am

    problem

    The problem? Elegantly put, and largely accurate. The solutions? Still unknown. The age of robots approaches.

     

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    Anonymous Coward, Jan 9th, 2010 @ 6:08am

    Nationalism is a shabby artifact of tribalism

    Isn't it time we got over ridiculously primitive ideas like nationalism? I hear a lot of people talking about the United States being "competitive", as though it's some kind of imperative for one particular bunch on people inside an arbitrary line in the sand to compete with those who are outside that line in the sand.

    This "us versus them" worldview is evolutionary baggage. It's tribalism in a cheap tuxedo. In-group altruism and out-group hostility is something chimpanzees do. We can be, should be, must be better than that. Let's get with the program.

    The problems faced by the world are global problems. The human species is a global community. Welcome to the third millenium guys. Now lift your gaze up from the lines in the sand, and try thinking about how we can make things better for *everyone*.

     

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    kambui (profile), Jan 9th, 2010 @ 6:18am

    TWO PROBLEMS...

    Interesting article. I agree with how the issues were framed for the most part, but I disagree with several other parts of the article. I'll focus on two areas.

    First, carefully aimed government intervention can create enormous leaps in innovation and economic growth. Many examples of this exist in American economic history, but let me present you with just one: NASA’s space program in the 1960’s. Government sponsorship of the program allowed for rapid advances to be made in agriculture, digital technology (huge), synthetic materials (think artificial heart), semiconductors, water purification systems, solar energy and much more. Perhaps these new innovations could have been achieved without NASA, but it’s very clear that NASA accelerated the pace of innovation. We need more NASA-like programs and the government can make this happen.

    Second, it seems countries that focus on becoming consumption-based economies largely at the expense of being producers experience problems down the road. Japan’s economy, for all the things that are wrong with it, seems to be another example of this phenomenon. They allowed the sector that was responsible for securitizing speculative bets on condos and golf courses (sounds familiar) become large enough to hurt the country and the region. It seems to me we need a healthy balance here. Longer story…

    The author briefly touched on this point but I want to make the point more clear – deregulation is the major cause of the recent collapse in the financial system. Sure, we can blame the crisis on those sub-prime borrowers (not that the author did so) but we were willing to create additional debt and equity products from these “bad borrowers” so that we can make more money from folks who were clearly living above their means. Revisiting the rules of leverage, derivatives, and the kinds of businesses financial institutions can play in will be needed to prevent another collapse.

    One more thing – politicians and think-tanks make me laugh when they keep presenting policy options that are binary. Any organization – public or private – that lacks a focused mission and lacks employees who are disconnected from that mission are bound to be ineffective. Deregulating schools is not the magic bullet. The solution, as usual, likely sits somewhere in the middle…

    song currently stuck in my head: “from the beginning” – emerson lake & palmer

     

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    Anonymous Coward, Jan 9th, 2010 @ 6:46am

    Re:

    "Faith-based statement."

    No, it's actually an evidenced based statement and it's intuitively true.

     

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    BBT, Jan 9th, 2010 @ 6:50am

    Re: Re:

    Oh, I see. You've renamed faith as "intuition" and it counts as evidence now.

    Strangely enough, though, the single biggest innovation in recent history, the internet, began as a government project.

     

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    Anonymous Coward, Jan 9th, 2010 @ 7:06am

    Re: Nationalism is a shabby artifact of tribalism

    "The problems faced by the world are global problems. The human species is a global community. Welcome to the third millenium guys. Now lift your gaze up from the lines in the sand, and try thinking about how we can make things better for *everyone*."

    While this maybe true, this problem is better solved at a local level. Local governments and communities are more interested in themselves and they're more able to act in their own best interest than federal and international governments. and lets face it, humans tend to be self interested and I don't see that going away any time soon. This whole idea of global governments being capable of acting non self interested has failed, just look at our federal government. As its power grows, the served interests of the people diminish. People were much better off when states had much more control than they do now and the federal government was much more limited in scope. The constitution calls for a limited federal government for good reason (because the governments that those who immigrated to America came from had large federal governments and that was a disaster for the people. because history shows that large federal governments is a disaster for the people, even today. Look at China, Russia, and most other countries that have large federal governments. What makes you think a large international government will be better, it will be WORSE). Lets not assume that big federal governments are more capable at solving our problems.

     

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    BBT, Jan 9th, 2010 @ 7:24am

    Re: Re: Nationalism is a shabby artifact of tribalism

    Which countries do you think have big federal governments, and which don't? Are you sure you're not defining "big" as "government I don't like"?

    Don't countries like Sweden and Denmark have expansive national government power? So why would you talk about China/Russia instead? Could it be that you are ideologically opposed to a big federal government (nothing wrong with that) and you're just cherry-picking data that supports your ideology?

     

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    Pencil_Nebula, Jan 9th, 2010 @ 7:24am

    Very good on the domestic side but totally out of kilter on the international side which in an interconnected international world has a nasty habit of totally trashing domestic issues.

    The following article is an example of issues.

    For the West, 'Game Over' in Central Asia
    Andrea Bonzanni | 08 Jan 2010
    World Politics Review
    http://www.nationalaffairs.com/publications/detail/keeping-americas-edge

    Last month, the West officially lost the new "Great Game." The 20-year competition for natural resources and influence in Central Asia between the United States (supported by the European Union), Russia and China has, for now, come to an end, with the outcome in favor of the latter two. Western defeat was already becoming clear with the slow progress of the Nabucco pipeline and the strategic reorientation of some Central Asian republics toward Russia and China. Two recent events, however, confirmed it.

    For the rest see the article and then google China vs India vs Korea vs Russia vs Burma vs Iran for issues concerning natural resources in Central Asia and Africa plus WMD.

     

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    Anonymous Coward, Jan 9th, 2010 @ 7:31am

    Re: Re: Re:

    "Oh, I see. You've renamed faith as "intuition" and it counts as evidence now."

    No, what counts as evidence is the fact that innovation occurred more where patents were less, for one thing (ie: the tech sector has traditionally stayed away from patents and that's where the most innovation has occurred whereas the medical sector had many innovations (ie: vaccines (ie: smallpox)) until patents took over and now there really isn't that much innovation and in fact the FDA often bans perfectly good natural solutions just to help promote more dangerous and less effective patented synthetics. Swedens Chem industry was among the most innovative until patents got involved. Israel is one of the most innovative nations and they're one of the most lenient when it comes to intellectual property. Hollywood was founded on piracy. Study after study shows that intellectual property harms innovation). Also note, the Internet is privately controlled, imagine if the government intervened and got or granted broad patents on the Internet or various aspects of it. And it's the government's intervention that slows down broadband rates and increases price in the U.S. and increases cable prices while lowering the quality of cable (ie: more commercials) for one thing, the fact that they grant unearned monopolies on who can use existing and who can build new infrastructure. Yes, the government can be good for some innovation but the point is that when they "interfere" with others who innovate (ie: via patents and monopolies, etc...) they harm innovation. There is nothing wrong if the government itself innovates to some extent, but the article discusses their interference with others who innovate.

     

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    Anonymous Coward, Jan 9th, 2010 @ 7:44am

    Re: Re: Re: Nationalism is a shabby artifact of tribalism

    but how big is Sweden and how big is Denmark? They're relatively small countries so their governments are, consequently, more local. It's not as practical for a small country the size of a state that has only 100 people to have 10 governments. The point is that when you have a single government that serves a LOT of people over a large area then it's bad.

    Not saying that all small countries serve their people well. Of course the size of the federal government isn't the only factor, there are many other factors (ie: the extent that authority and laws are elected by the people vs a totalitarian government). Just that there is a tendency for big national governments to be less receptive to the specific needs of each individual.

    First of all you need an elected government (or people who elect the laws or representatives). Elections are what help encourage governments to serve those it governs. Otherwise you have a government that poorly serves its people.

    However, as the amount of people that an elected government serves increases the ability of elections to encourage a government to serve its people decreases and the governments ability to serve its people approaches the ability of an unelected government. The power of elections to encourage a government to serve its people decreases as the number of people governed by a government increases.

     

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    Anonymous Coward, Jan 9th, 2010 @ 7:46am

    Re: Re: Re: Nationalism is a shabby artifact of tribalism

    "Which countries do you think have big federal governments, and which don't? Are you sure you're not defining "big" as "government I don't like"?"

    Of course I'm sure.

    "Could it be that you are ideologically opposed to a big federal government (nothing wrong with that) and you're just cherry-picking data that supports your ideology?"

    Nope.

     

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    Anonymous Coward, Jan 9th, 2010 @ 7:50am

    Re: Re: Re: Re: Nationalism is a shabby artifact of tribalism

    So basically an unelected government serves its people about as well as an elected government that serves an infinite amount of people over an infinite regional area.

     

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    Anonymous Coward, Jan 9th, 2010 @ 7:59am

    Re: Re: Re: Re: Re: Nationalism is a shabby artifact of tribalism

    and the reason why bigger elected governments are less adapt at serving specific individual needs is because as the number of voters increases the ability of your vote to encourage the government to serve your specific need decreases. Pretty soon you reach a point where your vote doesn't really matter and the government might as well be unelected since anything it does has little to do with your interests anyways.

     

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    BBT, Jan 9th, 2010 @ 7:59am

    Re: Re: Re: Re:

    Oh, I see. You've decided that patents are the only thing a government can do. That explains your mistake. Here I thought that governments were capable of doing all sorts of things, but it turns out that patent laws are the only thing they can do. Whoops.

     

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    BBT, Jan 9th, 2010 @ 8:03am

    Re: Re: Re: Re: Nationalism is a shabby artifact of tribalism

    Oh good, then you must have some data that you're about to post to back up your conclusions.Looking forward to it.

     

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    Anonymous Coward, Jan 9th, 2010 @ 8:06am

    Re: Re: Re: Re: Re:

    "You've decided that patents are the only thing a government can do."

    No, I've decided to focus specifically on things that governments do to interfere with others who innovate and patents are one of those things.

    A lot of innovation comes from universities and such at taxpayer money and that's fine too (to some extent).

     

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    The Anti-Mike (profile), Jan 9th, 2010 @ 8:40am

    In the end, we just have to look back over the last few years and ask ourselves "What would happen if we just let them fail"?

    Chrysler gone. GM gone. Half of Wall Street gone. Major banks gone. FDIC broke. You can imagine all the fall out.

    One only has to look at Japan, who's forward progress was essentially stopped when their bubble economy burst. Even today, they are still paying the price of a system that is effectively stopped cold by the weight of unpaid loans and overvalued real estate.

    Effectively, what has happened in the last couple of years would have been disruptive on the same level as the great depression, which isn't beneficial to anyone. It would be all but fatal.

    So the guys main points (as Mike highlighted)?

    Number 1 had to happen, the choices were less than desirable. That doesn't mean it is something that is going to exist for long, and in fact many of the companies that received funds are working hard to pay them back (in part because until they pay back TARP money, they can't over pay their executives). Much of this kept the US from becomes a second world nation overnight.

    Number 2? Well, there has to be some regulation to make the system work. The lack of regulation in a very narrow area (repackaging and reselling slices of loans) is one of the key reasons that the US is in it's current situation. Back off regulation would in the end just create more of these sorts of situations, which aren't just toxic for the companies involved, but for all of us.

    Number 3? The education system in itself isn't the problem, the problem lies in the people using it. When a student's day is more about not getting shot on the way to school, not getting forced into a street gang to survive, and not going home to an uncaring home environment, perhaps the school experience would be better. The system has been corrupted to go from one of education to one of group survival, and the end result is uneducated students who do know how to hotwire a car, how to make a crack pipe, and how to avoid getting the "5-0" up their asses. Otherwise, they learn little. But that goes back to the issues of home life and social situation, not of the education system itself.

    Number 4? Well, it seems a little in contradiction to number 3, doesn't it? If Americans have to spend their time competing with people from outside the country, who absorb the better paying jobs (and tend to lower the pay for those jobs), then there is little to aspire to for the people having trouble in number 3.

    Immigration is the US's biggest problem, the large latino population is making this a political football that nobody wants to carry. Quite simply, a hard push needs to be made to move illegal aliens out of the US. California is going bankrupt trying to provide services to people who work under the table and send their money out of the country. They are educating children who have no right to be here. until that issue is resolved, number 3 isn't going to get any better, and there will be little support for number 4.

    My feeling is while the writer is very well intentioned, he looking at trying to "flip this house" without addressing the real structural issues of the US. Paint and a nice green lawn seem nice, but if the building is still falling over, you have fixed nothing, just passed the problem to the next sucker. That isn't helping.

     

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  34.  
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    Gene Cavanaugh, Jan 9th, 2010 @ 9:15am

    Innovation and Regulation

    "innovation is necessary for economic growth, and less government interference is key for the type of innovation we need."

    Pegging on an extreme again - doesn't anyone understand that extremist attitudes are negative? Innovation is encouraged by policies that build a strong middle class - witness the boom of innovation and progress after World War Twice. That requires a "middle of the road" mentality.

    As to unrestricted, uncontrolled immigration; that is the dumbest of all the proposals! Destroy our social fabric in the naive hope of encouraging innovation! DUMB! We should encourage immigration, but we need to control it, or we will have so much social disruption that chaos could result!

     

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  35.  
    identicon
    Anonymous Coward, Jan 9th, 2010 @ 9:39am

    Re: Innovation and Regulation

    "Pegging on an extreme again - doesn't anyone understand that extremist attitudes are negative?"

    If the sentence read

    "innovation is necessary for economic growth, and NO government interference is key for the type of innovation we need."

    then I would agree with you. However, that's not what the sentence says.

     

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  36.  
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    Anonymous Coward, Jan 9th, 2010 @ 9:41am

    Re:

    "In the end, we just have to look back over the last few years and ask ourselves "What would happen if we just let them fail"?"

    We would be better off because the free market would replace them.

     

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  37.  
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    The Anti Anti Mike, Jan 9th, 2010 @ 10:58am

    Re:

    Your dick is too short! Or long! Or something...

    ...No, I got it...it's too short.

     

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  38.  
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    Brian (profile), Jan 9th, 2010 @ 11:11am

    Re: Re: Re:

    The internet began as a government project, so what? The statement about less government interference referred to propped up old businesses by extending copyright, patent, and trademark laws far beyond their original intent thus interfering with the flow of innovation, slowing it down by granting monopolies to companies who use that power to destroy those who seek to innovate and evolve technology for a better tomorrow.

     

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  39.  
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    Brian (profile), Jan 9th, 2010 @ 11:15am

    Re:

    "Number 3? The education system in itself isn't the problem, the problem lies in the people using it. When a student's day is more about not getting shot on the way to school, not getting forced into a street gang to survive, and not going home to an uncaring home environment, perhaps the school experience would be better. The system has been corrupted to go from one of education to one of group survival, and the end result is uneducated students who do know how to hotwire a car, how to make a crack pipe, and how to avoid getting the "5-0" up their asses. Otherwise, they learn little. But that goes back to the issues of home life and social situation, not of the education system itself."

    You mean when teacher unions have a good 12 page long process of trying to get a teacher fired? Where sex offending teachers sit in rooms away from students still getting paid? Where teachers care more about churning out A's and B's than how much a student really knows? Where unions seek to stop any sort of competition because they claim its bad when it has been shown over and over to be good? Where the system is more about how much information can be crammed into your head than how much you can understand and use. That appears to be a SLIGHT problem with the system itself.

     

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  40.  
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    group hug, Jan 9th, 2010 @ 12:19pm

    Re: Nationalism is a shabby artifact of tribalism

    That is crap. There are global problems, but these are not solved by dragging the successful, clean, productive, wealthy economies down to one lower global common denominator. That may make you feel better, but never has worked as well as taking care of your own family, tribe or community. Maybe you think it "should be", but human nature will never change to where a person will care more about the "global community" than his own tribe. Thinking there is one "global community" is just silliness- there are thousands upon thousands.

     

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  41.  
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    The Anti-Mike (profile), Jan 9th, 2010 @ 12:19pm

    Re: Re:

    Yes. I mean places where teachers get attacked, shot, raped, and live in fear every day. The places where teachers have to park their cars in fenced in enclosures, walk to their cars in groups, and never walk down the hallways of the schools alone. Places where 90% of the class time is given over to trying to get the students to behave, rather than actually teaching them anything. The places where the system has no effect punishment system for students who break the rules. Places where teachers no longer worry about spitballs, it's where they worry about getting shanked when the turn around to write on the blackboard.

    yeah, that place.

     

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  42.  
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    I've pointed this out before, Jan 9th, 2010 @ 1:29pm

    Re: Innovation and Regulation

    And - again
    Gene is using a term he is unaware has another meaning.

    http://www.urbandictionary.com/define.php?term=pegging

     

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  43.  
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    Richard (profile), Jan 9th, 2010 @ 1:32pm

    Re: Innovation and Regulation and War

    Innovation is encouraged by policies that build a strong middle class - witness the boom of innovation and progress after World War Twice.

    Actually it was the wars themselves that created the boom in innovation.
    The war forced the allied governments in to practical policies driven by necessity.
    Political and commercial and commercial "horse trading" were suppressed on both sides of the atlantic (and in the Soviet Union for that matter).

    Given a sufficiently large and credible external threat people will pull together and the kind of selfish lobbying we see from the IP industries will be quickly stamped on.

    Most of the innovation that we see today is still running off the legacy of WW1, WW2 and the cold war.

    WW1 produced effective IC engines and aircraft.

    WW2 produced the the jet engine, nuclear technology and the computer.

    The cold war produced microelectronics and the internet.

    All of these were the product of war driven government policies.

    These are the seed innovations - what we see since is simply the working out of these technologies.

    The role of governments is threefold.

    1. Fund the innovations that are too long term or expensive for private capital to afford. (Hopefully we will learn to do this without a war someday.)

    2. Keep the commercial playing fields level. Unfortunately governments seem to believe that you can do this by listening to what successful industrialists say. In reality they all want to be monopolists so really you should do the opposite of what they ask for.

    3. Protect the ordinary people from the fallout of change.

    Maybe someday we can achieve the benefits of competition without the downside. A slogan for that:

    Co-operation between people - competition between ideas.

     

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  44.  
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    Anonymous Coward, Jan 9th, 2010 @ 1:35pm

    Re: Re: Re: Re: Re: Nationalism is a shabby artifact of tribalism

    Evidence has already been presented, you simply choose to ignore it.

     

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  45.  
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    Anonymous Coward, Jan 9th, 2010 @ 1:36pm

    Re: Re: Re: Re: Re: Nationalism is a shabby artifact of tribalism

    Also note, despite the fact that all of the evidence suggests that bigger federal governments are bad and smaller community governments are good, I predict you will present absolutely zero evidence to support your view. You will demand evidence from others, ignore the evidence, and present no evidence for your own viewpoints whatsoever.

     

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  46.  
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    Anonymous Coward, Jan 9th, 2010 @ 1:38pm

    Re: Re: Re: Re: Re: Nationalism is a shabby artifact of tribalism

    and I do notice that despite evidence has been presented to you and you have ignored it, you have yet to produce evidence of your own.

     

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  47.  
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    DMNTD, Jan 9th, 2010 @ 3:09pm

    Rounded out

    My view on 3 is close to "Where the system is more about how much information can be crammed into your head than how much you can understand and use." The problems (like most of them begin) is when all these laws started being placed on kids that had hard times convincing themselves that this so called teaching environment was all they had, their only choice.

    What did they get for testing the boundaries..laws that make you feel like a criminal for acting on their natural given right of choice. Truancy, tardiness and what you can wear HAHAHA what a joke, but I digress. At a stage of a kids life they have to be able to be free and not feel incorporated to something they never bought into other than a jack boot in the back of their mind. An incentive should exists or even multiple to encourage them to trust your "school" instead they get the gray area of the law shoved in their face.

    They need places than can go so they have a choice and hell WHY not have a choice at school!?!? Like the ability to choose what you want to learn at 8th grade you being taught the same crap and irrelevant garbage you did when you left 5th grade. Same subjects same rules nothing changes EVEN after you get into college its a distraction and you even have to pay for it now. Why can't they just choose.."Hey screw algebra I have NO passion for that I'm gonna drop it." or if you are to dictatorial to hear that then don't make it an important stage in their life no grades nothing just attendance and give incentive just like artist have had to learn RTB the music they make well..I think its a source of broader interpretation. Its not enough..never was, things have to change..and they will always change and I guess they will always have to fight and perhaps if they heard a few more aligned words they would not go to such extremes as "Anti-mike" put it, to the great wide world of the hustle. But then again some always want that other world(whatever it might contain) that's human.

     

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  48.  
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    Chris in Utah (profile), Jan 9th, 2010 @ 4:00pm

    Re: Re: Re: Re:

    The government may have "invented" but it was the private sector that distributed it moron.

     

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  49.  
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    Chris in Utah (profile), Jan 9th, 2010 @ 4:09pm

    TO BBT

    "And the government slogan he who controls the past...."

    You forgetting your history on a few aspects on tribalism. The USA is tribal. States rights are supposed to supersede the federal level on all but commerce. Or is your history101 not up to snuff?

    If you care to live by the red book of socialism count me out! And there in lies your falsehood. Nobody lives the same as you do, this group-think of the lets follow our leader over a cliff has got to stop. My grand-kids will thank you to WAKE UP!

     

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  50.  
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    Joe Smith, Jan 9th, 2010 @ 4:29pm

    False premise => false conclusion

    The proposition that to get more innovation the US needs less regulation is unsubstantiated and probably untrue. The US needs comprehensive regulation of derivatives markets and meaningful capital requirements for all major financial players. It needs to stop distorting capital and labor markets by pretending that per capita income is 10% higher than it really is.

    Some of the poor social statistics (unwed mothers) coming from the lower classes is because our society is so much richer. Behavior that would have led to abject poverty or early death 100 years ago is now quite survivable. It is hardly a wonder that irresponsible behavior has increased. More people can "afford" it.

     

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  51.  
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    staff, Jan 9th, 2010 @ 6:01pm

    innovate=steal

    "....and less government interference is key for the type of innovation we need."

    You mean "copying", and when you say "we" I gather you are referring to Microsoft and other such firms who rely on the innovations of others and then steal them.

     

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  52.  
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    staff, Jan 9th, 2010 @ 6:04pm

    innovate=steal

    "....and less government interference is key for the type of innovation we need."

    When you say "innovation" you mean "copying" and when you say "we" you mean Microsoft and other such firms who rely on the innovations of others and then steal them.

     

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  53.  
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    Anonymous Coward, Jan 9th, 2010 @ 6:12pm

    Jan 9th, 2010 @ 4:29pm

    "The proposition that to get more innovation the US needs less regulation is unsubstantiated and probably untrue."

    Yes, because your mere proclamations, and lack of evidence, overturns all the evidence that disagrees with you.

    Jan 9th, 2010 @ 6:01pm

    "You mean "copying", and when you say "we" I gather you are referring to Microsoft and other such firms who rely on the innovations of others and then steal them."

    Yes, because you can read minds and are better able to ascertain what others mean than they are.

     

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  54.  
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    Mark, Jan 9th, 2010 @ 8:19pm

    Wow you have some insane commenters

    Now I know why are country is struggling... One commenter said States rights supercede the Feds in all but commerce, also suggesting that some one learn history 101. Had you been there for history 102, Mr Commenter, you would know Abraham Lincoln abolished that in the 19th century.
    As for many commenters that say reduction of government intervention is necessary for regulation, you've obviously never had a decent economics or business course on the college level. Quick fact, complying with government regulation costs American businesses $46 for every $1 spent on regulation. So, if the US Gov would reduce regulation by just $10billion dollars (a number made minute by recent administrations), then private business would have an additional $460,000,000,000 to invest in employment of engineers, spurring innovation (and reducing unemployment). I was originally writing regarding the stance on immigration that was quoted, but there were even juicier no-facts to deal with lower on the page. I could comment all day just on the comments - GO BACK TO SCHOOL PEOPLE!

     

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  55.  
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    Ronald J Riley (profile), Jan 9th, 2010 @ 8:28pm

    Microsoft's Sticky Fingers

    Microsoft keeps whining about how often they get sued and they whine even more over the fact that they are losing cases based on their conduct.

    That is why they demanded Patent Deform five years ago and helped form the Piracy Coalition.

    It is interesting how many members of the Piracy Coalition are associated with TechDIRT.

    Inventors innovate while Piracy Coalition members claim that they innovate. The only area they innovate in is propaganda and the types of vehicles they use to propagate their propaganda. Now the question is TechDIRT one of those vehicles?

    Ronald J. Riley,


    I am speaking only on my own behalf.
    Affiliations:
    President - www.PIAUSA.org - RJR at PIAUSA.org
    Executive Director - www.InventorEd.org - RJR at InvEd.org
    Senior Fellow - www.PatentPolicy.org
    President - Alliance for American Innovation
    Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
    Washington, DC
    Direct (810) 597-0194 / (202) 318-1595 - 9 am to 8 pm EST.

     

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  56.  
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    Bruce, Jan 9th, 2010 @ 9:18pm

    US Society

    As a Canadian (middle class more socialist than US) I found this article rather shocking.

    http://www.nytimes.com/2010/01/05/opinion/05herbert.html?em

    Could it be true?

    I can't imagine not having Health care in place as a fundamental public function. It is as foundation of a moderns society similar in necessity to literacy.
    The US leads in technologyinnovation however in social progress the investment seems unprincipled. The free market capitalist system is a means to an end not an end in itself.

    US leadership in the last 50 years has been a net benefit to the world lets hope the current trends corrects. continues.

     

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  57.  
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    Anonymous Coward, Jan 9th, 2010 @ 10:33pm

    Re: Re: Re:

    Wow, we really like to focus on the dark 1%, don't we? You do realize that vision is NOT representative of even the bulk of the US?

     

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  58.  
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    BBT, Jan 10th, 2010 @ 5:14am

    Re: Re: Re: Re: Re: Re:

    So if some government interference helps innovation, and some government interference (patents) hurts it, is it accurate to say "and less government interference is key for the type of innovation we need" or should you instead say "and less restrictive patent law is key for the type of innovation we need"?

     

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  59.  
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    BBT, Jan 10th, 2010 @ 5:17am

    Re: Re: Re: Re: Re: Re: Nationalism is a shabby artifact of tribalism

    I'm not making any claims. Do you know what the burden of proof is? You made an unfounded claim, I challenged it. I make no claim of my own except that you're a blind ideologue, which you've provided ample evidence for.

     

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  60.  
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    BBT, Jan 10th, 2010 @ 5:27am

    Re: TO BBT

    I'm not really sure where you got this idea of what I believe or don't believe based entirely on me challenging a single unfounded assertion and pointing out a clear bias in the article.

    I am aware of my history, and aware that the federal government has slowly become more powerful over time since the country was founded. So what? Does it surprise you that things change over 200 years?

     

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  61.  
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    Anonymous Coward, Jan 10th, 2010 @ 6:43am

    Re: Re: TO BBT

    "So what? Does it surprise you that things change over 200 years?"

    I think the point is that we don't want them to change for the worse and that's what they're doing.

     

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  62.  
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    Anonymous Coward, Jan 10th, 2010 @ 6:50am

    Re: Re: Nationalism is a shabby artifact of tribalism

    This is not to say that the federal government doesn't have a role. Federal governments role should be to ensure that local governments don't pass laws that infringe on our rights (ie: the constitution does that and the constitution is a federal document). and sometimes local governments aren't perfect (ie: it's often local governments that are putting all these red light cameras out and they're starting to put speed detectors on intersections and it's often local governments that grant cableco/telco companies a monopoly on the infrastructure as well and on who can build new infrastructure. Now I think that there is a good chance that if I get a ticket in my city/county, cities/counties are more likely to dismiss them. However, if I get one in another city/county they will be less likely to dismiss them. To that extent perhaps a government setup with a more global reach should be employed to enforce the laws, one that is influenced by the votes of both parties involved. and this is exactly why the founding fathers put the federal government in charge of interstate commerce, the idea is that the federal government will be less bias when it comes to issues regarding parties from different states. But when it comes to intrastate issues that should be absolutely none of the federal governments business. The FDA, FCC, USPTO, et al have completely overstepped their bounds, IMO).

     

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  63.  
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    Anonymous Coward, Jan 10th, 2010 @ 6:52am

    Re: Re: Re: Re: Re: Re: Re: Nationalism is a shabby artifact of tribalism

    Again, I have provided evidence and you ignored it.

     

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  64.  
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    Anonymous Coward, Jan 10th, 2010 @ 6:54am

    Re: Re: Re: Re: Re: Re: Re:

    You are making the mistake of thinking that "less" government intervention means "no" government intervention. They are not the same thing. less =! no. Sure, SOME government intervention may help innovation, but LESS government intervention than what we currently have is needed.

     

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  65.  
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    Anonymous Coward, Jan 10th, 2010 @ 6:58am

    Re: Microsoft's Sticky Fingers

    Oh please, let me see you write an operating system like Microsoft Windows. Sure it's not perfect but the fact is that you're not half as innovative as Microsoft and Google.

     

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  66.  
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    Anonymous Coward, Jan 10th, 2010 @ 7:03am

    Re: Wow you have some insane commenters

    The constitution says, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

    http://en.wikipedia.org/wiki/Tenth_Amendment_to_the_United_States_Constitution

    So unless the powers are specifically granted to the federal government or prohibited to state governments by the constitution itself then those powers are granted to the state.

     

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  67.  
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    Anonymous Coward, Jan 10th, 2010 @ 7:05am

    Re: Microsoft's Sticky Fingers

    and as has been pointed out before here on Techdirt, Microsoft is pro intellectual property when it suits them, they're only anti intellectual property when it doesn't. Just like just about every other intellectual property maximist that ever existed.

     

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  68.  
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    BobinBaltimore (profile), Jan 10th, 2010 @ 7:53am

    Re: Parallels with sport

    I like your analogy. Interestingly, in the USA, Olympic endeavors are privately funded. It's one of the oddities of USOC that the US is one of the few countries out there where government funding does not make up a significant part of training budgets. Look at the NFL, MLB, NHL, etc...all private (minus MLB's stupid anti-trust exemption). Perhaps this, too, is instructive in the above context as well...get government out of the middle of innovation. This is not to say that government (especially military) can't fund innovation. But regulation and manipulation, not so much.

     

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  69.  
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    Hua Fang (profile), Jan 10th, 2010 @ 9:02am

    dynamic definition and solution making in real time

    We can ask the same question but at higher and broader level: What is the limiting factors to innovations of a nation in the modern world? It is about an inherited identity of a nation and a dynamic changing one at same time. Then, the solution is being made according to definitions with nature of this dynamism, which is associated with other nations on the globe clearer and clearer everyday. Those same words (profound ones)that were used not too long ago, are re-defined in real time in its detailed contents, such as "government", "law", "equality", "social injustice", so on and so forth. Because of this fast changing nature in terms of realities and methodologies of modern society worldwide, the grand picture of any social phenomenon such as "social upheaval" vs "innovations" of a nation like America must be constantly fit into the global frame as a newly established habit of any nation including America. In doing so, we shall be feeling confident going forward in real time for the solutions made to the problems as a whole. In this case, it is about adjusting innovations in terms of scales and scopes that should be controlled to the points of weighed global strategic consensus collected fully and in real time.

     

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  70.  
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    The Anti-Mike (profile), Jan 10th, 2010 @ 9:33am

    Re: Re: Re: Re:

    No, that vision is only representative of many major urban areas, where signficant amounts of the population live, and some of the largest school districts happen to be.

    I would love to use corn fed midwestern school kids and teachers as the "average", but they just are not what is really happening for many of the students of today.

    It ain't the dark 1%, that much is for sure. I think we wish it was 1%, but those are only wishes...

     

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  71.  
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    Richard (profile), Jan 10th, 2010 @ 10:52am

    Re: Microsoft's Sticky Fingers

    Ronald, I looked on your site and saw one thing I agreed with - the way that standard TOC's of employment deprive employees of the a rightful share of the benefits of their innovation is disgraceful. As you say on your site companies operate a cartel in employment contracts so you can't find a "better deal" anywhere.

    However I would say that Microsoft are innovative (or at least their employees are. They do employ some very bright people - but maybe - as you say - they don't get their just rewards.

     

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  72.  
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    Anonymous Coward, Jan 10th, 2010 @ 11:55am

    Re: Re: Nationalism is a shabby artifact of tribalism

    There is one global community. It's called the internet and on top of that are also thousands and thousands of global communities that are significantly smaller than the internet.

     

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  73.  
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    Richard (profile), Jan 10th, 2010 @ 1:01pm

    Government Interference

    ""innovation is necessary for economic growth, and less government interference is key for the type of innovation we need.""

    The biggest interference your (US) government seems to make is locking people up. Do you realise you have 5% of the worlds population and 25% of it's prisoners and the numbers are still growing?

    Add that to all the commercial litigation coming out of the IP industry and before long your economy will be dominated by the justice system....

     

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  74.  
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    ddbb (profile), Jan 10th, 2010 @ 1:27pm

    I'm looking forward to reading the article but wanted to make one point about Mike's analysis about transparency vs. interconnectedness as a cause of the recent economic fallout.

    There was no lack of transparency. There were reams of documents and information about any aspect of what people consider to be the problem instruments. The fact that they are complicated does mean the process was less "transparent." In addition, there are volumes of regulations as to what and how this information must be disclosed.

    The fact that only a handful of people were able to accurately foresee the consequence and fewer still were actually willing to put their money where their mouth was and invest accordingly, shows that the issue was not lack of transparency, but lack of ability to predict the future. A few guys saw the warning signs and acted. The fact that what happened was so counter to conventional wisdom at the time shows a problem that is more indicative of cognitive dissonance than transparency.

     

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  75.  
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    Joe Smith, Jan 10th, 2010 @ 2:04pm

    Innovation is not the answer

    The deregulation of the financial industry only led to innovation in how to dress up Ponzi schemes so investors would not recognize them. The financial and human cost to America of that deregulation has been enormous.

    Regulation that imposes dead weight loses on the economy by making it inefficient under the current state of knowledge can be removed. Generally regulations that create artificial monopolies or protect producers from competition are counterproductive but they have little effect on innovation per se.

    Most of our so called cutting edge technology is OLD and comes from a much more regulated era. The transistor was invented 60 years ago by that bad old monopolist AT&T through Bell Labs. The integrated circuit is fifty years old. The microprocessor is 40 years old. The computer was invented under government contract as was the internet. The US is much less regulated now than it was in the 1960s and 1970s - where are the big new inventions?

    New innovation that expands the boundaries of what is possible by creating new knowledge would give the US only fleeting advantages since the knowledge will leak out to the rest of the world in short order.

    To improve the lives of Americans it would be better to try to pick the low hanging fruit and make the economy more efficient in using the knowledge we already have: eliminate farm subsidies and agricultural protection; refocus the criminal justice system on prevention, rehabilitation and re-integration; improve the schooling opportunities for the children of poor Americans rather than relying on third world governments to satisfy America's educational needs.

     

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  76.  
    identicon
    :), Jan 10th, 2010 @ 2:17pm

    Re:

    In the 70's an economist told me that people owned 2 times what they made working and that was not sustainable.

    Now after 30 years no manufacturing industry to speak of, no money a huge debt, inflationary tendencies and more bad things people still believe it was inevitable?

    Are you people serious?

     

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  77.  
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    Anonymous Coward, Jan 10th, 2010 @ 3:32pm

    Re: Innovation is not the answer

    Wouldn't it be easier to declare wars on terror, drugs and poverty? Keep the populace in a constant state of anxiety and then bombard them with advertisements to help the populace consume more in order to alleviate that anxiety.

    Problem solved!

     

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  78.  
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    Anonymous Coward, Jan 10th, 2010 @ 9:15pm

    I agree with Joe Smith. The only real innovation today is coming in the form of new ways to screw people over and fads that create new industries around unsustainable models. Innovation has become synonymous with intellectual masturbation. There will be a progressive series of fall-outs, which will prove only to incite the lower-classes and leave those in charge in complete bewilderment. The real question isn't IF a revolution will occur, but WHEN.

     

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  79.  
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    The Anti-Mike (profile), Jan 10th, 2010 @ 9:49pm

    Re: Innovation is not the answer

    To understand modern innovation, you have to understand "masnick innovation". It doesn't involve creating anything truly new, it involves taking something someone else made, putting it in a new box, painting it a different color, and calling it "innovation".

    Oh, you can add an mp3 player, a digital camera, or a wifi connection to almost anything and you are innovating.

    Actually, where we are right now is the reaping what was sowed 40 years ago. In the same manner that past generation profited from the major changes of the train, the industrial revolution, radio, television, etc... we are currently in the position to reap the benefits of ICs and computer technology. We aren't in an innovation phase as much as a narrow refining stage.

    I afree with you, most of what is innovation right now are unsupportable business models or new ideas that work only if you stop paying all the other participants in the deal.

    IMHO, the next dot bomb with be the folding of much of the dot advertising business, and the unsupportable models that created internet page views but little actual benefit for anyone. Think of it as the dot adbomb. Much of it will happen because the people who create the content are not getting paid enough to keep creating it, leaving many of these sites with no content to work with. If they actually had to pay for content, most of them would be broke.

    We have long since stopped trading dollars for quarters, most of them aren't even getting nickles anymore.

     

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    Richard (profile), Jan 11th, 2010 @ 12:45am

    Re: Re: Innovation is not the answer

    I afree with you, most of what is innovation right now are unsupportable business models or new ideas that work only if you stop paying all the other participants in the deal.

    IMHO, the next dot bomb with be the folding of much of the dot advertising business, and the unsupportable models that created internet page views but little actual benefit for anyone. Think of it as the dot adbomb. Much of it will happen because the people who create the content are not getting paid enough to keep creating it, leaving many of these sites with no content to work with. If they actually had to pay for content, most of them would be broke.

    We have long since stopped trading dollars for quarters, most of them aren't even getting nickles anymore.


    Except that there is no sign of this happening. More content than ever is being produced.

    What we do see is companies that were failing anyway using "piracy" as an excuse.

     

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    Chris in Utah (profile), Jan 11th, 2010 @ 12:50am

    Re:

    Says a a prole. No offense intended but you draw the conclusion Orwell had in 1984. If there is a force that drives complete bewilderment then that is the solution the inner sect of Bilderburg wants.

    http://www.msxnet.org/orwell/print/1984.pdf

     

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  82.  
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    :), Jan 11th, 2010 @ 5:01am

    401k

    The next bubble to bust will be the 401k that is being commandeered to pay for other things LoL

    Or maybe the medical assistance to people because as it is today is not sustainable it may take 30 years but it will happen eventually.

    Or maybe it will be the internal expending from states that will lead to a total government infra structure of basic services meltdown.

    All of those things are really transparent right now.

    Raising taxes only goes so far, after that they will have to shed services and jobs and that will further fuel economic problems.

    Some say that the U.S. has a leverage in that it produces the worlds currency, well think again countries everywhere are changing that to a basket of currencies and maybe in a decade there will be no people who want to be part of a bad debt financing such an irresponsible country.

    Right now there are people trying to protect themselves from the government using anonymous money and LLCs.

     

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    The Anti-Mike (profile), Jan 11th, 2010 @ 5:35am

    Re: Re: Re: Innovation is not the answer

    More content than ever is being produced.

    If you consider horrible home produced music, crappy home movies, and meaningless blog posts as content, then yes, you are right. We have entered an era of content masturbation, where we do it by ourselves, for ourselves, and pretty much all of it fails to accomplish anything except giving the "creator" a warm feeling.

    On the other sides, magazines are getting thinner, online news sources run the same stories for days, and we are left to get informed by bloggers and muck rakers.

    So if you are looking at it as "how big is the mound of pooh", then you are right, the pooh pile is getting higher. If you are trying to find the gold in the pooh, I would say that it's getting rarer and rarer every day.

     

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  84.  
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    NullOp, Jan 11th, 2010 @ 5:57am

    Currently we are very close to the "FU" threshold. That being the point where new "way cool" products and upgrades come out so quick people stop caring, and buying. The best analogy is the word processor. A great majority of folks just don't need or use all things the program will do now. So why do they need to upgrade to version XVIII?

     

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  85.  
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    BBT, Jan 11th, 2010 @ 5:58am

    Re: Re: Re: Re: Re: Re: Re: Re:

    You have no evidence to back up that conclusion.

    Better government policy is what we need. In some places, that could mean less inteference. In some, it could mean more.

     

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  86.  
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    nasch (profile), Jan 11th, 2010 @ 7:56am

    Re: Another Part of the Problem

    Humans have mostly stopped evolving on a genetic level (most of us live long and have children that we pass our genes to - its not just the very fittest).

    The only way this is true is if everyone has a perfectly equal chance to pass on their genes. Since that is not the case, there are still selective pressures, and therefore evolution. In fact, some research shows we're evolving faster than ever, due in large part simply to our huge population.

    That has nothing to do with the article, I just had to say it. :-)

     

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  87.  
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    Derek Bredensteiner (profile), Jan 11th, 2010 @ 10:46am

    Re: Re: Re: Re: Innovation is not the answer

    Restricting ourselves to just "content" for a second. A small sample of that pooh for thought ...

    XKCD - Penny Arcade - The Daily Show - Adult Swim - Strong Bad - Drudge Report - Banksy

    Some of it's generated by a small group (or even 1 person), some by many. Some self starters, some obviously still tied very closely to old media. But regardless all available for free online with new content on a very regular basis.

    I'm amazed at the depth and variety of our increasingly connected culture, and I'm excited for what the future holds if we encourage this sort of thing. It's disheartening that so many are closed off to even consider the opportunities and beauty that is there. There's too much crap and it's just impossible to find anything good in there is a very defeatist attitude.

     

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  88.  
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    Captain Swagger (profile), Jan 11th, 2010 @ 4:06pm

    Re: Re: Re: Re: Re: Innovation is not the answer

    The point is that quality content is not going to exist, because the advertising revenues for publishers are dwindling. It's no longer going to be economically viable to create quality content. I recently read an article about, I believe, Thomson Reuters, a leading source of business information, who now uses robots to create all of their content. A lot of the content on the web is just scraped from data or other content and mixed around using advanced algorithms to create multiple variations of the same crap.

    Major sites like Facebook and Myspace, etc, even with all of their free, user-generated content, still can't find a way to monetize their sites and make profits...

    Content is becoming worthless and therefore no one is going to take the time to create unique, quality content. At least not with any hope of making a profit from it in the long run.

     

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  89.  
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    Anonymous Coward, Jan 11th, 2010 @ 5:17pm

    Re: Re: Re: Re: Re: Re: Innovation is not the answer

    Because a studio or publisher (aberrations that didn't exist at some points in time) are starting to lose money does not mean that a much larger and vaguer concept of "quality content" is going to suddenly stop existing.

    "Content is becoming worthless and therefore no one is going to take the time to create unique, quality content."

    How "content" is valued, and the best ways to make money with it are changing, but to argue that it's worthless, and that no one is making a profit in new ways? I mean, I'm not sure how else to say it except that they are.

     

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  90.  
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    Derek Bredensteiner (profile), Jan 11th, 2010 @ 5:21pm

    Re: Re: Re: Re: Re: Re: Re: Innovation is not the answer

    Nothing endures but change.

     

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  91.  
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    Captain Swagger (profile), Jan 11th, 2010 @ 10:41pm

    I didn't argue that content was worthless, I argued that it is becoming worthless. I think this whole CwF + RtB crap is a bit myopic in it's approach. You assume that all types of content have the ability to generate a fan base in the first place, or that said fan base will want to buy novelty items. Sure, it may be a viable option for some music artists or creators of some kitschy little animated indian song and dance whateverthef$%$ that whole thing is... But look around you, the vast majority of content doesn't fall under this spectrum. A lot of the content that drives the internet is just boring, yet essential informational resources. If I operate an informational website on acne treatments, am I likely to amass a fan base? As much as I'd love to command an army of pimple faced teens ready to throw down money on novelty tshirts and random zit related fan swag, I doubt it's a likely alternative business model... You apply this fact across the board and you'll forgive me if I don't believe that CwF + RtB = Content Savior.

     

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  92.  
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    Angela Kraus, Feb 15th, 2010 @ 12:48pm

    Cooperation vs. Competition

    Innovation does always harm people. As a student of history, it is all too obvious to me that every level of so-called "progress" harmed a large segment of society and more-often, but not always the poor/the less powerful. Besides, when "the poor" hurt, we are all harmed because the poor are the bottom base of our economic structure--this has so far always been the case in all major cultures around the globe. To suggest that we can alleviate this harm by teaching competition over "process" (whatever that means) makes absolutely no sense to me. As we become more and more of a global economy, interconnected with one another, we can no longer afford to look the other way when people are being destroyed by our quote "innovation." There is nothing "creative" about a technology or a practice or a new invention of business that cannot take into account any kind of ethics in order to survive, especially by capitalistic standards which dictates profit over human or global health. The Coca-Cola Company is a prime example. Each step of the way as it has grown (innovation?), it has harmed more and more people. Today it is harming our children. Some adults have been responsible enough to ban it from schools. Yet, Coke is moving then into less educated territories of the globe to sell their poison and no one is able to stop them in this global economy with no rules except competition. Hitler, after all, was "innovative" and "creative." So what?

     

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