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Quotation of the Day…

Tweet [1]

… is from page 93 of Matt Ridley’s marvelous new (2020) book, How Innovation Works: And Why It Flourishes in Freedom [2]:

Innovation is not an individual phenomenon, but a collective, incremental and messy network phenomenon.

DBx: Ridley, in his book, thoroughly documents this reality. He also makes clear that the “messy network” that fosters innovation is an emergent order. It is not the product of government planning. And this network is “messy” only in that it involves, necessarily, a great deal of trial and error – of false starts – of projects abandoned before completion as knowledge grows from this experimentation. But the trial-and-error experimentation and the consequent learning-by-doing with a promise of reward when successes are achieved is an emergent-order way of both inspiring individuals to contribute their creative energies to the process of innovation and to guide these efforts toward results that are socially beneficial.

Deirdre McCloskey frequently points out this: The same correct intuition that would prompt laughter from people who encounter proposals for the government to have, say, a “music policy” for “guiding” the kinds of music produced in the nation – with the goal of ensuring that music is superior to the music that emerges in freedom – seems absent when people encounter proposals for government to have an “industrial policy.” Yet government officials are no more to be trusted to “plan” and “guide” the course of industry than they are to be trusted to “plan” and “guide” the course of music, of literature, of movie-making, or of any other species of art.

Because economic entrepreneurship and economic innovation, big and small, are creative acts, economic entrepreneurship and economic innovation are very much akin to the entrepreneurship and creativity that generate music and literature. Art thrives and is ever-evolving in commercial society [3]. So too is industry and business. Advocates of industrial policy are ignorant of this reality and, hence, of its vital importance.