Tuesday, August 18, 2015

The Entrepreneurial State, or, Getting Famous for Restating the Obvious

British economist Mariana Mazzucato has become a pretty big deal lately, with a best-selling book, testimony before the U.S. Senate, etc. Here's a review of her big book:
Apple is generally regarded as an embodiment of everything that is best about innovative businesses. It was started in a garage. For years it played a cool David to Microsoft’s lumbering Goliath. Then it disrupted itself, and the entire entertainment industry, by shifting its focus from computers to mobile devices. But there is something missing from this story, argues Mariana Mazzucato of Sussex University in England, in her book, The Entrepreneurial State. Steve Jobs was undoubtedly a genius who understood both engineering and design. Apple was undoubtedly a nimble innovator. But Apple’s success would have been impossible without the active role of the state, the unacknowledged enabler of today’s consumer-electronics revolution.

Consider the technologies that put the smart into Apple’s smartphones. The armed forces pioneered the internet, GPS positioning and voice-activated “virtual assistants”. They also provided much of the early funding for Silicon Valley. Academic scientists in publicly funded universities and labs developed the touchscreen and the HTML language. An obscure government body even lent Apple $500,000 before it went public. Ms Mazzucato considers it a travesty of justice that a company that owes so much to public investment devotes so much energy to reducing its tax burden by shifting its money offshore and assigning its intellectual property to low-tax jurisdictions such as Ireland.
I am happy to see that someone is getting a lot of attention for pointing this out, but I am also baffled that anyone who cares about such things didn't already know all of this. Government has been thoroughly enmeshed in just about all the technological developments of the 20th and 21st centuries, from jet engines to microchips. In some industries, such as aerospace and telecommunications, public and private research have been so intertwined that it hardly makes any sense to call an invention public or private.

Libertarians who like to argue that governments never create anything, and also liberals who like to say that corporations never do anything good because they only care about profits, are misunderstanding the modern world. Things are not created by governments or corporations, but by people. In our world a lot of the most creative people move easily back and forth between government and business, doing pretty much the same things regardless of who is paying their salaries.

1 comment:

Shadow Flutter said...

Math and Science!
Math and Science!
Math and Science!

Perhaps we should add History to the mantra.