Maggie's Farm

An expert’s review of “The Internet And The Organization Of Innovation” from the National Bureau of Economic Research (NBER) casts light on the Rasmussen poll that “75% Say Free Markets Better Than Government Management of Economy, Political Class Disagrees.”

The Rasmussen survey, by contrast to the 75% of Likely Voters who say  “more competition and less regulation is better for the economy“ finds “America’s Political Class is far less enamored with the virtues of a free market. In fact, Political Class voters [“the clique that revolves around Washington, DC, and Wall Street”] narrowly prefer a government managed economy over free markets by a 44% to 37% margin.”

Professor Shane Greenstein, Northwestern’s Kellogg School of Management examines the origins and development of the Internet.

From a synopsis provided by NBER, he “uses the example of the creation of the internet to analyze the strengths and weaknesses of two distinct ways of organizing a long-term program for accumulating innovation.”

One approach, which characterized the early development of the internet, relies on autonomous research institutions ("skunk works") to organize and nurture innovators. The other, which has applied more recently, relies on commercial markets to aggregate dispersed initiatives from a wide array of entrepreneurial participants.

The "skunk works" approach runs the risk that innovation will veer into areas where there is no demand, and thus no economic value. The pre-commercial Internet avoided some of those dangers because the participants in that phase of the internet assessed value from their own experiences. Their managers, in turn, nurtured them and permitted experimentation to blossom -- leading to useful and innovative applications, such as e-mail and packet switching. In addition, the Department of Defense and the National Science Foundation (NSF) played a pivotal role as "demanders" for innovation. Their substantial funding of research institutions, and their distributed investments to universities, supported the innovative activity that led to the breakthrough technologies that underlie today's Internet. This "skunk works" approach, however, restricted participation and truncated experimentation by excluding innovation along lines that did not support the "acceptable use" requirements of the government agencies. Such restrictions limited learning to an artificially narrow range of issues, and left a wide array of other applications untouched.

In contrast to the early "skunk works" days, the more recent commercial era of the Internet has played to the strength of market-based innovation. It has permitted decentralized exploration from commercial firms facing a wide array of incentives and a wide variety of circumstances. Once released to commercial interests, the Internet became the springboard for a dizzying array of applications that were not envisioned by the sponsoring government agencies. These applications include the World Wide Web and its associated browsing technology.

In other words, government funding or direction of basic research or new programs may be useful and in some cases critical but further development of useful applications, adaptation, and wider spread acceptance and utility are best the province of free enterprise, or as Greenstein calls it "market-oriented and widely distributed investment and adoption."

Instead, in most government programs, the initial laws enacted that seek to foster or enlarge reform or innovation are too often crafted with further government controls in mind or as ignored unintended consequences due to hidden agendas. Not unintended but usually hidden is the self-serving enrichment and enlarged sway of the political class. If initiatives have any validity, they are still often more dangerous than presented just by not being geared to a hand-off to the private sector to adjust and improve but to enlarge the power of the political class while – by the nature of government programs – hindering transparent review and adaptive innovation.

Even in the case of the Internet, as complex and involved in most aspects of business and individual lives as healthcare, if left in the hands of the centralized “skunk works” we wouldn’t have seen the developments we enjoy today. In the case of other government programs, like ObamaCare as one of the worst instances, the clear objectives and consequences are nationalization of close to 20% of the economy and 100% of our lives, and even more stultifying – indeed deadly - to free market development of improved access, delivery and economics.

Character is what we do in the dark when no one is looking. It is defining.

Today, there's less darkness and more lights.

That may be a hindrance to some, sometimes justifiably and sometimes not, but that's the way it is, and it is preferable to have more character than less, even if forced by fear of exposure. Character is innate as well as a developed habit.

This is particularly so if one ventures into the public arena, as recognized in both our libel laws and common sense. (See here.)

Many of the NAACP meeting attendees openly expressed racism. Many of the Journolist members openly expressed collusion to suppress news via their positions.

That's free speech, and it carries accountability. Furthermore, those among both conclaves, and others, who don't speak up and out are complicit by their silence or non-exit, red-herrings thrown on the path aside and further condemning. And, Journolist founder Ezra Klein similarly misses the point when he says, "If I had thought there was some deep and dark conspiracy to protect, I can guarantee you I would've been a bit more selective." The point is that he founded and ran a selected "progressive" group of many influentials, and their views - although at times differing - were secretly shared to advance their causes. Klein says they should "assume privacy." Nonsense and sophistry, as usual, from Klein's immaturity of age and character.

Conspiracies of silence are as damning as conspiracies of silencing or nefarious abuses.

Congressional intent and judicial interpretation of the first amendment may conflict. Two recent examples:

The US Senate just passed by unanimous consent the Securing the Protection of our Enduring and Established Constitutional Heritage Act, HR 2765 (SPEECH Act). It is expected to pass the House. There’s little reason that the president shouldn’t sign off.

My good friend Rachel Ehrenfeld, doughty immigrant that she is, took our Constitution to heart and waged an at first solitary campaign to restrict “libel tourism” when she was its victim for a book she’d written exposing the enemy-funding financial dealings of a wealthy Arab.  She acquired powerful allies, across the political spectrum, until New York State passed a law that required judgments in foreign courts where our level of free speech protections do not rule to meet US standards in order to be enforced in the US.

Below the fold is Rachel’s press release.  Here are the AP and here the AFP news reports.

In past conversations with Rachel I’ve had some concerns about how US standards of free speech may be interpreted by the courts. Those in positions to know, she says, feel US standards of libel are well-enough defined so there’s confidence in prevailing without undue blockage of the Congressional intent. So be it to see.

According to this, the problem with Israel’s PR is that it focuses on explaining and, when supported by facts, apologizing. For some, it may come off as whining. And, it is less effective than should be.

It fails to impress, convince or, even, penetrate many educated people, whose antagonism or skepticism toward Israel is entrenched.

The problem: Most believe they are well-informed about Israel, even when not, and are poorly informed about Israel’s enemies.  When exposed, however, not to Israel’s side of the story but to the foes’ own words and actions, Eureka!  Most of these Western antagonists or skeptics are shocked, enlightened and wonder how Israel can deal with such rigidly violent anti-Western forces so far from our norms of thinking and conduct except by Israel itself being resolute and willing to take the measures necessary in defense, including preemptively.

There’s much truth in this analysis.

For those (most Americans) who don’t follow the annual Eurovision song contest, won by Israel in 1979 for Hallelujah, it is closely watched in our house (on Internet). We enjoy “world music.” It is becoming a smaller world, sometimes not for the better, as this year’s winner, from Germany, sang a number in English! My Germany-born wife was aghast at this loss of diversity.

The music world is also losing other diverse sense.

Some Western musicians are canceling their scheduled performances in Israel, caving to leftist memes and pro-Palestinian veiled threats.

Then there are the attempts to boycott Israeli performers as well. The Eurovision song contest was held in Norway this year. The Norwegian pro-Palestine Committee demonstrated outside the arena holding the event since Israel had reached the finals. A statement from the organisation said: “We want to close Euro Song for Israel. They are not welcome. We will request the European Euro Song TV-consortium to boycott nations that indulge in occupation and apartheid.”

Oppression, despotism, suicidal hatred, terrorism, that’s OK with them? Far from the Summer of Love, huh!

Here’s the Israeli performance at this year’s Eurovision, a lovely love song.

Yeah, we can’t have love where hate triumphs.

Here's Israel's 1979 winner. (This taping has helpful lyrics.)

Some's idea of Praise God (Hallelujah) doesn't include to "hold each other's hands, and sing from one heart."

That includes some Western musicians.

The US Chamber of Commerce says (more here) that the term capitalism is misunderstood, as just 57% in its poll support capitalism.

“We need to do a better job of explaining the economic system in the United States and how it is working,” Anderson said in an interview. “We have been looking at anecdotal information that there was a misunderstanding of capitalism.”

Au contraire says the survey’s results of the peasants. Seventy percent support free enterprise and free markets.

Americans know the difference between the two as capitalism has increasingly come to be practiced.

Charles Derber, a sociologist at Boston College, says the results show the public’s unhappiness with the ties between “big business and big government,” exemplified by the multi- billion dollar bailout of banks in 2008.

“When people say they are down on capitalism, they mean they are down on corporate capitalism,” Derber, author of books including, “People Before Profit,” said in an interview. “They see capitalism as it exists here as anything but a free market.”

With bigger and bigger Big Government comes those, pardon the expression, capitalizing on getting their way or piece of the pelf, whether business, union, tax-exempts, state and local governments, etc.

Free enterprise and free markets, in contrast, indeed may we remind freedom itself, work best with a more limited government.

Now, that isn’t to say complete laissez faire, as there is sometimes some need for enforcement of rules of play to encourage competition, not stifle it.

In addition to the findings on capitalism, the Chamber’s poll found that 43 percent of those surveyed said the Obama administration’s policies are making the economy worse compared with 23 percent believing it is making it better.

“There is a major trust deficit,” Lombardo [the pollster] said.

The US Chamber knows the difference between free enterprise and capitalism as it has too often come to be practiced. Increasingly, Americans do. It’s the difference between freedom and fascism.

Perhaps some corporate, union, tax-exempts, state and local governments, etc. HQs need visits from a Tea Party, not just the federal government and its minions of bigger. It takes two to tango.

Homework: Michael Barone, Goldberg.