Broken Incentives in Medical Innovation

I recently listened to Mark Zuckerberg interviewing Tyler Cowen and Patrick Collison concerning their thesis that the process of using scientific research to advance major development goals (e.g. extending the average human lifespan) has stagnated. It is a fascinating discussion that fundamentally questions the practice of scientific research as it is currently completed. Their conversation … Continue reading Broken Incentives in Medical Innovation

Three Lessons on Institutions and Incentives (Part 3): Innovation means creative destruction

The concept of creative destruction was popularised by Joseph Schumpeter and assumes that the economy is in a equilibrium. The “entrepreneur,” therefore, is an unbalancing factor that, through innovation, displaces the winners of the prevailing situation until then, generating a new equilibrium. This notion was criticized by other economists such as Friedrich Hayek and Israel … Continue reading Three Lessons on Institutions and Incentives (Part 3): Innovation means creative destruction

Innovation and the Failure of the Great Man Theory

We tend to think about innovation as inventions and particularly about the inventors associated with them: Newton, Edison, Jobs, Archimedes, Watt, Arkwright.  This Great Man Theory of incredible technical innovation is mostly implicitly held by quite a few of us, celebrating these great men and their deeds. Matt Ridley, the author of The Rational Optimist and The … Continue reading Innovation and the Failure of the Great Man Theory

The minimum wage induced spur of technological innovation ought not be praised

In a recent article at Reason.com, Christian Britschgi argues that “Government-mandated price hikes do a lot of things. Spurring technological innovation is not one of them”. This is in response to the self-serve kiosks in fast-food restaurants that seem to have appeared everywhere following increases in the minimum wage. In essence, his argument is that minimum wages … Continue reading The minimum wage induced spur of technological innovation ought not be praised

Political Decentralization and Innovation in early modern Europe

My full review of Joel Mokyr’s A Culture of Growth is forthcoming in the Independent Review. Unfortunately, it won’t be out until the Winter 2017 issue is released so here is a preview. Specifically, I want to discuss one of the main themes of the book and my review: the role of political decentralization in … Continue reading Political Decentralization and Innovation in early modern Europe

Irrationality, Self-indulgence, Childishness, Bizarre Beliefs, and Innovation: From the Belly of the Beast

I have lived for many years the People’s Socialist Green Republic of Santa Cruz in California, right in the Belly of the Beast. That’s not its real name actually, just the name it deserves. It’s a university town of about 50,000. A large campus of the University of California sits on the hills overlooking the … Continue reading Irrationality, Self-indulgence, Childishness, Bizarre Beliefs, and Innovation: From the Belly of the Beast

Criminalizing Innovation

By Fred Foldvary The U.S. government has attacked an entrepreneur and his new product, as another episode of the federal government’s war on enterprise. In this case, the entrepreneur CEO is Craig Zucker, the company was Maxfield & Oberton, and the product was Buckyballs. Buckyballs were small magnetic spheres made of neodymium, a rare-earth element … Continue reading Criminalizing Innovation

Who invented chicken nuggets?

Some dude named Robert C Baker: Baker’s innovation was to mold boneless bite-size morsels from ground, skinless chicken (often from the little-used parts of the bird), and encase them in a breading perfectly engineered to solve two key problems: It stayed put through both frying and freezing, critical for mass production and transportation.  Like all … Continue reading Who invented chicken nuggets?

Second to None in the Creation of Extraordinary Wealth

Like Rockefeller, he used accounting and technological innovations to expand the distribution of a commodity (silver or oil), and he was also one of the OG philanthropists. Like the Rothschilds’ development of the government bond market and reputation-driven trust, Fugger’s balance-sheet inventions and trusted name provided infrastructural improvement to the flow of capital, trust in banks, and the literal tracking of transactions. However, no other capitalist had as central of a role in religious change–both as the driving force behind allowing usury and as an anti-Reformation leader.

Internet villages and algorithmic-speech

We find ourselves in an overlap of classical free-speech abstractions, editorialized-media discourse, and algorithmic-social media diatribe. Each of these is a product that cannot reproduce the stability of the system that produced them. And yet, these platforms—print, electronic and social media—represent disruptions that fill in a vacuum felt in the other system. Besides, we tend … Continue reading Internet villages and algorithmic-speech

Efficient markets as normative systems

Recently, I came across this outstanding interview with Eugene Fama published by The Market / NZZ. Besides the main subject discussed -the inability of central banks to control inflation-, the interview is intertwined with gripping assertions about the limits of knowledge, such as the following ones: Bubbles are things people see in hindsight. They don’t … Continue reading Efficient markets as normative systems

Why snipers have spotters

Imagine two highly skilled snipers choosing and eliminating targets in tandem. Now imagine I take away one of their rifles, but leave him his scope. How much do you expect their abilities to be decreased? Surprisingly, there is a strong case that this will actually increase their combined sniping competence. As an economist would point … Continue reading Why snipers have spotters