back to article Hm, nice idea that. But somebody's already doing it less well

We know there's massive amounts of invention going on. Innovations are popping up all over the place. And while this should be increasing economic growth, none of this invention and innovation is being reflected in our economies. My own diagnosis: when it comes to the "creative destruction" that capitalism is supposed to be good …


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  1. John G Imrie Silver badge

    Must be christmas ...

    I'm in total agreement with a Capitalist bastard :-)

    Merry Christmas and a Happy new Year to all.

  2. Anonymous Coward
    Anonymous Coward

    "A brief divergence into economics: we're not talking about macroeconomics here. That's the interest rates, unemployment, exchange rates stuff, all the things we see economists getting wildly wrong on the news. Rather, when we're talking about decades we have to be talking about microeconomics: prices, institutions, incentives, these sorts of things. Macro is the short term (thus Keynes' “In the long run we're all dead”) and micro is the underlying structure: if you've a long term problem then it will lie in micro."

    Your criminal misunderstanding of micro vs macro should have your economics tutors spinning in their proverbial graves. What you're trying to say is you're talking about supply-side economics, not microeconomics. Microeconomics is effectively finance and market research.

    1. Tim Worstal


      "Microeconomics (from Greek prefix micro- "μικρό" meaning "small" + "economics"- "οικονομια") is a branch of economics that studies the behavior of individual households and firms in making decisions on the allocation of limited resources.[1] Typically, it applies to markets where goods or services are bought and sold. Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the quantity supplied and quantity demanded of goods and services.[2][3]

      This is in contrast to macroeconomics, which involves the "sum total of economic activity, dealing with the issues of growth, inflation, and unemployment."[2] Microeconomics also deals with the effects of national economic policies (such as changing taxation levels) on the aforementioned aspects of the economy"

      1. Swarthy Silver badge

        Re: Ahem

        I dunno.. all these reflected sounds of under-ground spirits give me an earache anyway.

        1. Graham Dawson

          Re: Ahem

          You should have got in sewer ants against that.

    2. Chet Mannly

      "Your criminal misunderstanding of micro vs macro should have your economics tutors spinning in their proverbial graves"

      I highly doubt the author has ever crossed paths with an economics tutor...

    3. Gannon (J.) Dick

      AC's need love too

      I gave you a badly needed upvote on the all too fleeting mention of Economists and graves in the same sentance. Where were you when the Champagne Bottle was empty day before yesterday ?

  3. David Evans

    Yeah but...

    I hadn't heard the phrase "regulatory capture" before, but its very well coined, and yes, there are tons of examples of it in action (the largest in potential value terms affected by this is probably online gambling in the US), and its probably having an impact. However...there are lots of examples where "creative destruction" IS busily doing its thing, but is actually creating genuine growth? The transformation of all the media industries for example, seems to be creating a new landscape, but not necessarily an economically more buoyant one. Yes there are individual winners (Google, Apple, Amazon etc.) but in what looks like a much less diverse economic landscape. Maybe the old economic certainties on growth simply don't apply anymore.

    1. Anonymous Coward
    2. cortland

      Re: Yeah but...

      There's a parallel in biology.

      " Disturbances act to disrupt stable ecosystems and clear species' habitat. As a result, disturbances lead to species movement into the newly cleared area[1]. Once an area is cleared there is a progressive increase in species richness and competition takes place again. "

  4. Brewster's Angle Grinder Silver badge

    It strikes me that one of the problems with Taxi Cab regulation is decentralisation - another of the things the right likes to bang on about. If there was a single, central regulator then these companies would only have to fight the battle once per country. The balance might lie there, presuming fighting one federal regulator is cheaper than fighting 50 state-level regulators.

    1. Mike Street

      Maybe Not

      "If there was a single, central regulator then these companies would only have to fight the battle once per country."

      Nice idea, but then the central body would spend years 'seeking the views of all parties affected', and the decision would be much delayed, perhaps permanently, certainly until the upstart had run out of cash.

      What we see in the West is State Corporatism, major companies and government 'working' together to protect their common vested interests, and keep newcomers out of the market. The worst example being the EU, where money is applied much more to large corporates and charities than small ones, since the application for funding process is so bureaucratic. No doubt the US Federal government operates the same way.

      Its a shame - a single market is a boon, a single, powerful bureaucracy is a nightmare.

      1. Vordicae

        Re: Maybe Not

        the Central body vs various state bodies is a typically difficult subject to argue.

        if you take your new idea to a central body and it is denied then you have ZERO business,

        or you get ALL the business ... risky concept unless you are 100% sure of winning.

        taking it to 50 separate bodies can be mroe expensive but you only need to set the precedent once and then your business model grows.

        1. Brewster's Angle Grinder Silver badge


          I think that argument has merit. (As a side question, why isn't there competition between regulators? It appears to have happened with UK exam boards so why not with Taxi regulators?)

          But if you're right, then we have to accept the inefficiency as a cost of having 50 opportunities. Business, regulators, etc.. can span the spectrum from efficient (NHS) to abysmal (many endeavours in Soviet Russia). Plurality solves that by having lots of options. And, yes, some examples can become very efficient. But you have to accept that many won't be; the nature of plurality is to try all the ideas, many of which will be awful failures, so the average efficiency ends up poor. And in this case, we may be whining about the inefficient regulators when we should be accepting them as the cost of plurality.

    2. Cameron Colley

      The Right?

      I'm afraid I, for one, have no idea what you mean by that in this context. Are you suggesting that "The Right" wants decentralisation because they're Capitalist Pigdogs and believe in the small-state or that The Right are against decentralisations because they're Fascist Pigdogs and believe in a united Riech?

      Perhaps you mean The Right like Stalin, or The Right like his friend Hitler? Or do you mean The Right like Bush with his fascistic anti-terror measures, or The Right like Obama with his fascistic policies forcing everyone to pay their money to health care or he'll send his jackbooted thugs to them?

      1. Anonymous Coward
        Anonymous Coward

        Re: The Right?

        I call Godwin's!

        1. Cameron Colley

          Re: "I call Godwin's!"

          The you perhaps missed the point of my post -- somewhat making my point even stronger.

          Please stop with this left/right bollocks as it has no meaning outside of a specifically defined context which takes longer to explain than the point you're trying to make saying "Left" or "Right".

          If you mean "Socialist" then say it, or if you mean "Capitalist" or "Liberal" then say them. Enough with the meaningless "Left" or "Right".

      2. Brewster's Angle Grinder Silver badge

        @Cameron Colley

        ROTFL. I think you have an obsession with "Pigdogs". I don't what they are, but I infer they come in "Capitalist" and "Fascist" flavours. I hope you enjoy them.

        For the record, I am suggesting that some people (whom we might call trolls) like to criticise The Left (whom trolls sometimes call socialists or communists) for wanting to micromanage everything from the centre. And In my experience, there is truth in that criticism: the Left don't know when to stop.

        Those same trolls - who are presumably "not on The Left" (for convenience we might call that The Right) then offer decentralisation as a solution.

        And for the same record, I think we need a balance between centralisation and decentralisation. I don't mind paying taxes to avoid being killed in or by a taxi.

    3. David Dawson

      This echoes one of the major differences between Common and Roman law.

      In Common law, everything is assumed to be legal, unless a law is made to curtail it. In Roman law, the opposite is true. This is a gross generalisation, but it points to an alternate solution.

      Instead of the (politically 'left wing') response of centralizing control to fix a perceived issue, the solution could be framed by asking the question, why is there even a law about this in the first place?

      This is what I take from the article, instead of tweaking the edges of the taxi (or whatever) monopoly, shouldn't we periodically question whether it should even exist at all?

      1. Brewster's Angle Grinder Silver badge

        @David Dawson

        Like every hacker, I default to an anti-authority, anti-regulation stance. But I don't want to have open the bonnet of a taxi, inspect the driver's licence and run a background check on them before I take a ride. I'm putting my life in someone else's hands; I want to make damn sure they and their vehicle are up to the job. This is exactly why I pay taxes: to ensure my safety. So taxi regulation stays. :-)

      2. Gannon (J.) Dick

        Rule of Law for Dummies (and Economists)

        It seems to me that MBA's and stray dogs are quite incapable of comprehending the Ten Commandments when they are presented in the reverse order.

        Capitalist Bastards, milkshakes for everyone* !

        * Stray dogs know a PR Problem when they see one; there will be extras.

    4. Colin Millar

      Or -

      How about not regulating cars and drivers to give lifts to people.

      Yes - I know - won't someone think of the children etc etc ad nauseam but

      It seems to me that this is exactly the kind of market that could easily become self-regulating in a C21 western economy and would actually be a good use of crowd wisdom and other internet abilities.

    5. J.G.Harston Silver badge

      I'm surprised that New York hail-and-ride taxis aren't allowed to take pre-bookings. They are in non-London English taxi authorites (London has different laws, don't ask!).

      In England there are two licenses: Hackney where you can prowl for custom or take pre-bookings, and private hire, where you can only take pre-bookings. The problem we have is the opposite of NY: private hire drivers taking flag-down customers. The Uber system would be useful here as it would legally be a pre-booking system. Some private hire already do the equivalent of this by getting potential fares to contact them by phone to pre-book them a few seconds before they pick them up. The opposition would likely come from the taxi firms that operate a group phone booking system, as it would bypass them and go direct to the driver.

      I used to be a member of a taxi licensing board, and we would try to persuade taxi representatives to come to us to discuss innovations so we could strighten things out and make sure things would work legally and safely. Unfortunately, they would still tend to ignore any pre-discussion and strike out alone and come a cropper.

      "We're only going to take female passengers!" - that's illegal discrimination, come to us to discuss how to do it legally. "No, don't wanna!"

      "It's a bicycle rickshaw, I'm not going to apply for a license!" - it's illegal to carry passengers without a license, come to us to discuss how to do it legally. "Argh! Anti-green interference, don't wanna!"

  5. Anonymous Coward
    Anonymous Coward

    I dunno, I think the fashion for organisational change is a problem too

    I'm sure that if the management where I work but as much effort into providing a better service for the customer and more effective business processes as they do on reorganisations, building changes and management innovations then things would be a damn sight more efficient...

    1. Marvin the Martian

      Another factor that springs to mind...

      "Low hanging fruit". If there really is a "several-decades old slowing down of growth".

  6. Tom 35 Silver badge

    Nothing about patents?

    Come out with a wizzy new cell phone, but get hit with slide to unlock?

    If you are doing something in a new way there is a good chance some of the old patents still apply.

    And there are trolls with patents that in effect science fiction. Once you make it work they show up.

  7. Anonymous Coward
    Anonymous Coward

    We're at such an advanced stage there isn't really much left to do.

    We're still coding proper software in C++. The main competition in IT is still Unix vs Windows.

    In effect people in IT have decided that it is better to just copy, reuse and repackage than innovate. The prime example being Android which is just a re-hash of Linux, Java and the same old icon grid that's been with us since Apple Newton, Amstrad PenPad and Palm Pilot.

    1. cortland

      A firm I once worked for invented a phase-change re-recordable CD technology. As I heard later, JUST before rollout, the celebratory meeting imploded when they realized that the first disk ever written was.... blank.

      Inventing is risky business. Several other innovations while I was there also failed, and in the end, they got completely out of designing, and even making, their own products.

      FWIW: had they been more creative, they could have marketed the self erasing CD as copyright protection.


      1. John Smith 19 Gold badge

        "Several other innovations while I was there also failed, and in the end, they got completely out of designing, and even making, their own products."

        Should we link your working for them as cause or effect?

        Probably not something you want to include on the resume.

  8. Armando 123

    One thing to remember

    Government bureaucracies are like lawns, cancers, and fetuses: they grow because they are designed to do nothing else, and any challenge to that growth is resisted vigorously.

    I was 'fortunate" enough to work for a US government contractor in the winter of 95-96 when the US government shut down. My project was sufficiently funded and important enough to keep going, and in one month, we got eight months of work done because without bureaucrats to slow things down and avoid decisions, we just got things done.

    A lot of things never got out to the real world (ie outside of the beltway) about that time. For one thing, 99% of HUD (Housing and Urban Development) was declared "not necessary for day-to-day operations" during the shutdown. Now, I know that not every job in a company, even the leanest and meanest company, is necessary for day-to-day operations. But 99%?!?!

  9. Nifty

    Wallowing in it here

    Innovations all over the place, and older relatives benefiting from science-fiction medical treatments.

    Stats can't measure quality of life.

    And everyone seems to be more concerned about whether they are moving up or down the pecking order, so they cannot see the real improvements in life in front of their noses. Neither can the economists it seems.

    1. John Smith 19 Gold badge

      Re: Wallowing in it here

      "Stats can't measure quality of life."

      Actually health economists (yes there are such things) can and do.

      The term is something like "Qualies" IIRC the question is roughly will they get at least 5 years more reasonable life with this new treatment (as opposed to 5 years more being doublly incontinent in a bed).

      But you're right. Not just the diagnosis and treatment but the underlying understanding of what's going on and why and what to avoid.

      Humans appear to have a high pass filter. The process has been very gradual. It's only when someone observes 1/4 of everyone alive now in developed countries will live to 100 that something pretty amazing has happened (and can happen everywhere else).

      The question is how to improve on that in 2013.

    2. Joe Cooper

      Re: Wallowing in it here

      I'm with both of y'all. There's a lot of really amazing stuff technologically, but only a smaller fraction of the world has access to it. There is much cause to rejoice. Also a metric @#$%-load of work to do. Let's rock!

  10. It'sa Mea... Mario

    Kind of reads like the polar opposite of one of Andrew's articles (in terms of sentiment), I guess he must be a different breed of 'Capitalist bastard'...

    1. Radbruch1929

      Politely disagree: Andrew is concerned that your idea can remain yours so that you can disrupt markets. Tim doubts the ability to disrupt existing markets. So, it really seems to be on different levels.

      Have an upvote and a happy new year.

  11. Adair

    Let's just...

    ...grow into Spaaaace! Expansion into uninhabited (and already habited) territory has historically kept many an economy ticking over very nicely, and also see that 'technology' stuff come on in leaps and bounds.

    1. The Indomitable Gall

      Re: Let's just...

      On the other hand, several countries nearly bankrupted themselves trying to get in on the "imperial power" gig, and lots of people died in horrible painful ways....

  12. Pete 2 Silver badge

    Push back

    The legal / regulatory aspect is just one side of the non-acceptance issue. The other side is consumer trust (or: lack of it). Until recent years all innovation was tangible - stuff you could touch, put in a drawer and forget about, stuff you could turn off and be safe in the knowledge that it WAS off.

    These days so much innovation happens outside the area of user control. Phones that track you (sure, you can turn them off; but then you can't make calls). Websites that know everything you've clicked on. Companies that "need" your personal information just to sell you a sausage roll.

    The problem is that the ordinary people feel that all this new stuff is

    a) outside their control

    b) likely to steal all their money, publish naked photos of them, sue them, get them arrested and/or keep coming back no matter how hard you try to delete/remove/turn off or bury them.

    And it's not just ordinary people that are having trouble. Even the people supposedly in charge are getting bitten in the bum by their technology: Gordon Brown and the live radio mike (bigot-gate) incident?

    Now whether these problems are real or imaginary is immaterial. We keep hearing about problems: people getting their bank accounts emptied, etc. and the fear of a problem is usually the reason for lack of take-up of new gadgets and innovations - not the problem itself. The reason being the lack of trust and feeling of powerlessness in our relationship with these new-fangled, electronic gizmos.

    Maybe when every new gadget comes with an "Ooops, I didn't mean to do that" button that simply undoes everything and can be TRUSTED to put everything to rights, then we'll start to see ordinary people feeling more positive about innovation - instead of feeling that they need a PhD in CompSci just to understand the manual.

  13. Anonymous Coward
    Anonymous Coward

    But do we actually need all this progress?

    In our wonderful capitalist economy, "progress" tends to be a way of taking money from one group of people and transferring it to a different group. Nothing much has changed since the arrival of railways resulted in a flood of litigation from canal owners, or since the Port of Bristol tried to keep Brunel's big ships out in the interests of their smaller customers. Well, the main change, at least in the US, is more lawyers per head of population, and more rapid new circulation, so the issues are more visible.

    It always used to amuse me that Mrs. Thatcher thought that the US was a place where business freedom flourished. In fact much of it is very tightly regulated and protectionism is rampant. This comes to the fore whenever the US economy is struggling a bit and there is a lot of foreign competition. It has to be remembered, for instance, that in both WW1 and WW2 the US delayed entering the war partly because US business wanted to be on the winning side, and in WW2 because they saw an opportunity to let Germany destroy the British Empire and allow the US to pick up the pieces.

    So my own view is that what is going on here is business as usual. Too much innovation is happening outside the US, so US business employs its lawyers to try to find ways to stop it.

    1. graeme leggett Silver badge

      Re: But do we actually need all this progress?

      My interpretation of the US and world wars is that in neither case was the US ready for the fight. Staying out allowed them time to organize the manpower and industrial resources.

      In both 1914 and 1939, the US did not have either a sizeable body of men in uniform nor the equipment for them to use. The US Navy was smaller than the Royal Navy at the start of the Second piece of unpleasantness, their tanks were useless and there weren't many of them.

      That said US industry (and Canada's) both benefitted from the large amounts of cash that the UK was prepared to hand over for war materiel. Canada's "billion dollar gift" part way through the war can be seen as an attempt to keep British orders with Canadian businesses rather than see them move them south of the border under Lend-Lease

      1. Anonymous Coward
        Anonymous Coward

        Re: But do we actually need all this progress?

        We were not ready to fight because we did not want to fight. I know that is hard to believe at this point in time--post Iraq War, but it was so prior to WWII. Pearl Harbor forced us to change our minds on that topic. That event made us rather paranoid. Just as that paranoia was beginning to die down, Al Quaida inflicted the World Trade Center Atrocity on us.

        I hate Osama bin Laden as much for causing us to beocme hyper-paranoid again as for the two beautiful buildings full of people he tore down with two of our beautiful airliners full of people. I find myself gritting my teeth every time I think about it. What if they had managed to smuggle in small nuclear weapons? What if they do manage to smuggle in small nuclear weapons? What then? It is not paranoia if they really are out to get you.

        1. Anonymous Coward
          Anonymous Coward

          Re: But do we actually need all this progress?

          What if they had managed to smuggle in small nuclear weapons?

          We wouldn't have had to bail out wall street and people would have felt some sympathy with the poor, overworked and underpaid bankers. Maybe they would have held a raffle for their families?

    2. Adair

      @But do we actually need all this progress?

      At least part of the problem is that Capitalism, despite it's serious flaws when allowed to run rampant, does offer a very good outlet for those people who are very driven by competitiveness, need for adventure/excitement, creative/inventive spirit, and/or the need for recognition. Those needs can be addressed in all sorts of ways, but the capitalist mentality certainly addresses all of them.

      So, we may not 'need' all this [so called] 'progress', but we certainly need constructive outlets for human energy and enterprise.

      1. Robert Helpmann?? Silver badge

        Re: @But do we actually need all this progress?

        So, we may not 'need' all this [so called] 'progress', but we certainly need constructive outlets for human energy and enterprise.

        Well said! Given the reasons the Nobel Peace Prize was given to the EU, it can be argued that economic integration, driven by all this messy capitalism, has proven a much more effective road to peace than previously tried methods. If the alternative to a competitive marketplace is the battlefield, I choose the market.

        1. Graham Dawson

          Re: @But do we actually need all this progress?

          Except, of course, the little problem that is never acknowledged: the European economies had begun making all of the changes necessary to bring about this new peaceful era in the aftermath of world war 2, before even the Coal and Steel union between France and Germany was put into place, never mind the EU, which wouldn't be implemented until the mid 90s. The EU was late to the party, claimed credit for something it had nothing to do with, and in the end spent most of its time fighting over which of its presidents would get to hold the prize certificate and who'd pocket the cash.

          The EU and the EEC before it did nothing to create peace in Europe. They rode on the post-war economic boom that was brought about by rapid (and necessary) cooperation and integration between the nations of Europe, then claimed they were responsible for it, when in reality they've done the most to rein it in and crush it with their constant regulation.

          And the nobel peace prize wasn't meant to be awarded to organisations anyway. It's right there in the charter for the damn thing.

          1. Irony Deficient

            Nobel Peace Prize recipients

            Graham Dawson, the Nobel Peace Prize has been awarded to organizations with some frequency, starting with the Institut de Droit International in 1904, a mere eight years after Nobel’s death. The Red Cross has won it on three different occasions. Other familiar organizational recipients include UNICEF, Amnesty International, the International Campaign to Ban Land Mines, Médecins Sans Frontières, and the IAEA, as well as several others that are not so well known.

        2. Tim Worstal

          Re: @But do we actually need all this progress?

          As Fredierc Bastiat (who died in 1850) said: If goods cannot cross borders then soldiers will.

    3. Chet Mannly

      Re: But do we actually need all this progress?

      "In our wonderful capitalist economy, "progress" tends to be a way of taking money from one group of people and transferring it to a different group."

      That happens in modern economies, but that's not capitalism, redistribution is a socialist concept.

      1. TheOtherHobbes

        Re: But do we actually need all this progress?

        No, that's capitalist lie number one.

        The reality is that capitalism is only ever about the enclosure of resources and political power in ever-decreasing circles of self-interest.

        The post-war technology booms only happened because the US and Europe had aggressive wealth redistribution programs that worked in the opposite direction, creating mass prosperity, widening access to education and promoting innovation. Financialistation was also strictly regulated to keep the banking system stable.

        If you do things the other way you get wannabe aristos with gold-plated toilets in their yachts and a population of unhappy poor people who can't afford Christmas presents without credit card debt and whose talents are mostly wasted. Oh - and the banks implode with a regularity you can se your watch by, taking a decade or two of possible progress with them.

        Empirical history, by the way.

        1. Anonymous Coward
          Anonymous Coward

          Re: But do we actually need all this progress?

          Oh that would be why every country that's tried this redistributionism you seem so keen on turned out to be paradise on earth.

          Oh wait, they're all poverty-ridden shitholes with all the wealth and power concentrated in the hands of a tiny minority, and now we're on our way to that same fate thanks to braindead idiots like yourself who believe the propaganda about redistributing wealth to be "fair".


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