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Everyone Should Fetishize Innovation

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         Everyone Should Fetishize Innovation

Writing for the New Republic, Evgeny Morozov has written a brief critique of what he dubs America’s “innovation fetish.” While not really spelled out in the article, there are some pretty obvious reasons to fetishize innovation. A look to the developing world reveals why. Innovation unleashed in a liberalized India, for example, has accelerated economic growth to 7 percent per year. Compounded, this growth will eliminate the very worst of Indian poverty in a generation of twenty years. Liberalization of the Chinese economy has pulled hundreds of thousands from grinding rural poverty to urban universities in a single generation.

All this is not to say innovation solves all problems. It’s undeniably true that a rising tide lifts all boats. But as the left is good about pointing out, the analogy is imperfect, as it misses the other undeniable truth about innovation. Some boats start out higher than others, and a rising tide lifts higher boats further and faster than lower ones.

Which one might assume would be the point here. Instead, Morozov makes several points, which seem to stem from some fundamental confusion concerning the role of the state, creative destruction, and cost-benefit analysis in innovation.

Morozov is concerned that the left’s infatuation with innovation mars its ability to regulate tech well. Unfortunately, “well” here is undefined. Morozov dislikes the assumption that innovation—and, by extension, economic growth—should be the default yardstick by which we measure the success of technology policy. He wants a “robust technology policy” which is “independent of Silicon Valley and serves social goods greater than flying cars and longevity pills.” Social goods like what?

He gives a clue when discussing email, which he posits might better be provided through taxes and fees than advertising, for the purpose of (and I am not making this up), privacy. The drawbacks of allowing government to do to email what it did to snail mail are pretty clear. “Such solutions might be bad for innovation.” Well, yes. “But the privacy they afford to citizens might be good for democratic life.”

At this moment, the federal government is warrantlessly mining our private emails and providing the data to agencies such as the DEA which are using the illegally obtained evidence to arrest people but not revealing where the evidence came from so it can’t be challenged in court, all while lying to us and Congress about it. But yes, definitely an email service provided by the federal government would be more private.

The second big misunderstanding, after privacy, concerns the role of creative destruction in making government funded semi-monopolies like the USPS “bad for innovation” and freewheeling innovative technologies like email excellent.

Morozov gives innovations such as Skype and YouTube their due for their untold contributions to what he calls “civic purposes.” But warns, “Companies that have beneficently provided the platforms are intent on maximizing their own commercial agendas.” Why does this matter? “These products might disappear as swiftly as they appeared, eliminating the information infrastructure that we already take for granted.”

Yep, Geocities disappeared, pissing off many a netizen. But in what world is WordPress not a good enough replacement? Yes, creative destruction destroys. But a focus on what’s lost as opposed to what’s gained leads us to a candle-lit, horse-and-buggy driven world, which helps no one but candlemakers and buggy drivers.

This skepticism toward markets and naive view of government leads to some weird conclusions about innovations in money as well. Morozov quotes the Mercatus Institute’s Eli Dourado as saying that Bitcoin can “do for finance what the Internet did for communication.” True enough, and powerful. But he’s unsure.

It’s as if there is no difference between AT&T and the Federal Reserve, since both are gatekeepers. That one is a profit-hungry private company and the other one is a political institution erected to carry out a public mission does not seem to matter.

Like with privacy, this statement seems utterly disconnected from what the government is actually doing in money. Actually both AT&T and the Federal Reserve are profit-hungry semi-private companies. But while one mostly profits by providing services to willing customers, the other uses the Treasury to inflate the currency in a way that is proven to benefit big banks and wealthy asset holders while discouraging savings and stealing purchasing power from the poor and middle class.

The oddest thing is that Morozov seems to understand that regulation and policy are kryptonite to innovation. But he appears to be making the case that shielding favored products and services from the powers of creative destruction and inhibiting private companies’ ability to profit from innovation makes the tradeoff worthwhile. This view might work if one totally and completely ignores tradeoffs such as easier data mining for government agencies, email as easy for customers to use as the USPS, and a monetary policy which by-design favors the rich over the poor.

But those are pretty serious drawbacks, which should probably be taken into account. And when weighed against the advantages, this case against an innovation fetish completely falls apart.

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