Quotation of the Day…

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… is from page 815 of Richard Nelson’s and Richard Langlois’s February 1983 Science paper titled “Industrial Innovation Policy: Lessons from American History”:

A quick reading of the case studies is enough to dash any supposition that technological change is somehow a cleanly plannable activity. In fact, it is an activity characterized as much by false starts, missed opportunities, and lucky breaks as by brilliant insights and clever strategic decisions. Only in hindsight does the right approach seem obvious; before the fact, it is far from clear which of a bewildering array of options will prove most fruitful or even feasible. Strange as it now seems to us, aviation experts were once divided on the relative merits of the turboprop and turbojet engines as power plants for the aircraft of the future; and the computer industry was by no means unanimous that transistors – or, later, integrated circuits – were to be the technology of the future. Policy must recognize uncertainty as a fact of life, and must not try to repress or analyze it away.

DBx: Yep. And, therefore, overwhelming skepticism is in order whenever you hear some pundit, professor, or politician talk about using tariffs or subsidies, or some combination of the two, to nurture the “industries of the future” or otherwise to steer the economy along some path that’s neatly described by that pundit, professor, or politician. Unless you can convince yourself that tarot-card readers and astrologers are sufficiently scientific as to warrant giving their predictions the benefit of the doubt, you should look with disbelief upon those persons who advocate using industrial policy as a means of improving the overall economy.