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Bonus Quotation of the Day…

… is from page 27 of Arthur Diamond, Jr.’s excellent 2019 book, Openness to Creative Destruction: Sustaining Innovative Dynamism:

The innovative entrepreneur often has less theoretical (formal) knowledge than scientists, managers, or “experts.” But the innovative entrepreneur often has more non-theoretical (informal) knowledge. The informal knowledge can be articulable knowledge of local facts; or hard-to-articulate (tacit) knowledge of observed general patterns or of how to do something; or initially inchoate inarticulate “slow hunches” that sometimes can be developed over time into articulate facts or theories. The methods would include serendipitous discovery, the clarification of slow hunches, and trial-and-error experimentation.

DBx: Indeed.

Here are a few questions for those who believe that they know something about the reality of political and legal processes: Can you imagine that politicians and bureaucrats charged with carrying out industrial (or “development”) policy would be able to act, as can private entrepreneurs, on non-expert hunches? How about on hard-to-articulate, or tacit, knowledge? And with “development policy” being directed from the capital, how much use would be made of the local knowledge that would, in the absence of such a policy, be acted upon by entrepreneurs on the spot?

Proponents of industrial (or “development”) policy invariably ignore these straightforward questions. Oren Cass, Brink Lindsey, Sam Hammond, Marco Rubio, Elizabeth Warren, and other enthusiasts for industrial policy seem to think that because they can pronounce or compose grammatically correct sentences describing in general terms the happy outcomes that they fancy, that they have therefore proven the workability of their schemes. But, of course, they’ve done no such thing.

It’s as if I were to write “It’s such a drag that humans cannot yet fly unaided by machines. But don’t despair! If we put our minds to it, we can achieve lift-off and soar gloriously through the air by flapping our arms really, really, really quickly! And pay no attention to the naysayers who deny my claim. These naysayers are tired old fools, their feeble minds stuck in well-worn ruts, and repeating over and over again their shop-worn objections and simplistic absolutisms. The future is with arm-flapping flight and not with the close-minded ideologues who are content to have us humans fail to achieve our eagle-like potential!”