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Competitive Market is a discovery process
Posted by Tim (more from Tim) on Tue, 24 Apr 2012 06:29:41
In Reply to: Then there's those pesky laws of physics..., Noel , Sun, 22 Apr 2012 16:39:23
"Human technology" is not a static phenomenon. It progresses, and sometimes regresses. The idea of steam engine came to ancient Greeks, but it was not until 2000 years later, the idea met the competitive market process that rapidly refined it during a span of about 100 years (or roughly 5% of the period of dormancy) and turned it into the engine for Industrial Revolution.

The Industrial Revolution itself took place on its own accord in only one civilization, out of more than half a dozen civilizations in world history. Everyone else only copied. So how and why did that come about? A sustained period of competitive free market exchange process that was not heavily taxed and controlled by territorial overlords (in northwest Europe; American colonies at the time being the frontiers of English/Scottish capital investment) like it was usually the case in most of human history. That is, the classical liberal social revolution examplified by Adam Smith's "Wealth of Nations" and the American Independence (both taking place in 1776, shortly before the start of the Industrial Revolution).

Today we may laugh at Saudi Arabia's 75% college graduates majoring in Theology. That was exactly how Europe's premier universities were like when the governments and the churches provided the bulk of employment opportunities before the "Industrious Revolution" (people turning to work harder and longer hours as they were allowed to keep more for themselves of what they could produce, even before the technology advance took place) preceding "Industrial Revolution." In small steps, we are reverting back to the pre-modern government/church-centric social template as politically correct majors and fields that enjoy governmental support attract more and more young minds. When the government officials control the merit-template for promotion and resource allocation, instead of letting the consumers take charge through the competitive market discovery process, the natural bureaucratic preference is stagnation instead of creative destruction. That's why for thousands of years brilliant minds were wasted on debating how many angels could dance on the tip of a pin.

Re Concorde, it was less than twice as fast as Boeing jets yet costing many times more. The short service distance made its speed insignificant, as a flight from NYC to London taking 6hrs vs. 4hrs mattered little when one consider the hours spent on taxi and going through customs. Reducing the 20 hour flight to Australia to 2hrs however would make a huge difference.

Re Computer, here's a classic example of how government sponsorship in high tech doesn't work. Japanese at their economic peak in the late 80's and early 90's thought that was the field where they could surpass Americans. So they poured billions into it. The result? They missed the next big developments in the computer industry altogether: micro revolution, internet, and biochip application. The Japanese government poured their resources into mainframe super computers trying to beat IBM and Cray! Every investment, especially high tech investment, is speculative. Government bureaucracy simply doesn't know where to make bets (at least when they can not copy from someone else, like the alleged rapid development of Japan in the 70's and 80's, and China in the 80's and 90's).

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