But government is forever. The state has the unique ability to protect existing “stakeholders” from the threats posed by innovation and competition, whether those stakeholders are businesses or unions, fat cats or philanthropies. That’s where the votes are and where the checks comes from.
But progress — material, medical, economic — comes from innovation. Economist Deirdre McCloskey notes that until the 19th century, innovation was a negative word because innovators upset the established order and the powers that be.
In her wonderful book “Bourgeois Dignity: Why Economics Can’t Explain the Modern World,” McCloskey describes how for all of human history, humans lived on about $3 a day, using today’s dollars. For 200,000 years, the line was essentially flat until around 1800, when a culture that valued innovation spread from England to Europe and the New World. Since then, wealth has skyrocketed, all thanks to a culture willing to let innovators pull up the stakes of the existing stakeholders.
In Silicon Valley, where government’s touch is light, we can see the rapidity of innovation at work. In health care, education and other areas where the government’s hand is heavy, we see stakeholders holding on for dear life.