the news from bush's speech...H-power

[Tyler Durden]

Tim May wrote...

"Ask why the U.S.S.R., which depended essentially solely on "federal 
funding," failed so completely. Hint: it wasn't just because of repression. 
It was largely because "picking winners" doesn't work, and command economies 
only know how to pick winners (they think)."

Well, there's some truth here but a lot of oversimplification as well.
I'd argue that the US patent system (or at least the thoughtof it) had a lot 
to do with the ability of inventors to take risks, gather startup capital, 
and get a product rolling. There is first of all the perception that their 
"secret sauce" is to some extent protected (as are the time & $ 
investments), as well as the actual protection (litigation actually works 
once in a while, and the threat thereof has kept some from copying to soon 
and too closely). This environment has had a major effect on technological 
innovation.

That's not to say it can't happen in other environments, but it seems to 
unfold very differently in, say, China or the USSR (which actually has 
contributed lots of technological and scientific ideas to the world). But 
none of them have benefited $$$-wise (nor has the pace been nearly as fast) 
as in the US.

Meanwhile, regulations and governments can give some industries a head 
start, particularly if a "jungle" already holds a nice warm niche for the 
output of those industries. Thus Sematec helped US semiconductors to roar 
back from the brink of extinction, and the buying up (and subsequent 
dismantling) of lite rail systems in the LA basin in the 30s and 40s 
apparently had a major impact on the rollout of vehicles Might we have seen 
much better public transportation in that area if this capitalist 
coup-d'etat hadn't occurred? The moon shots did apparently accelerate the 
development of semiconductors.

(A side note should be made here about the fact that some technologies have 
a very high activation energy barrier...without a very intensive amount of 
capital, they can't happen. Indeed, aren't we nearly at that point with 
sub-0.13um technology? It is possible that further advances just won't be 
possible without direct or indirect government funding.)

The best technology does not always win. In fact, the concept of "best 
technology" is kinda shakey most of the time. There are sociological, 
political, and other factors than can alter the course of things for a 
while.

That said, the technological "survival of the fittest" notion seems to be a 
fairly constant undercurrent that re-asserts itself periodically as the 
various sociological ephemera come and go. Like Kuhn or Popper, these aren't 
the only drivers, but they are certainly one of the axes.

So the picking of technological winners is possible, but if the technology 
is actually a winner!

-TD








>From: Tim May <tcmay at got.net>
>To: cypherpunks at lne.com
>Subject: Re: the news from bush's speech...H-power
>Date: Wed, 29 Jan 2003 16:08:08 -0800
>
>On Wednesday, January 29, 2003, at 02:24  PM, Eugen Leitl wrote:
>>Feds are sure inefficient, but the random dispersal of funds does tend to
>>hit the far shots now and then. The private sector tends to ruthlessly
>>optimize on the short run (because the long shot doesn't pay if you go
>>broke before you can reap the possible benefits).
>>
>>It's about the single most powerful reason for federally funded research
>>to exist.
>>
>
>I should have mentioned in my first reply that you need to spend some time 
>looking into evolutionary learning and markets. For example, the importance 
>of quick feedback and correction, with profits determining which markets 
>are explored.
>
>I have strong views on this, having studied the electronics/semiconductor 
>market for many years, having studied carefully the role of intermediate 
>products (such as RTL --> DTL --> TTL --> op amps --> MOS RAMs --> 4-bit 
>microprocessors --> etc.).
>
>Products introduced in 1963, say, were generally making the bulk of a 
>company's profits by 1965-66,  paying for the 1965 R & D and the 1966 
>product rollouts, which then paid for the 1967-69 cycle, etc.
>
>I know this was true of the earlier technologies and it matched everything 
>I saw in my years at Intel and thereafter.
>
>The "2-4 year payback cycle" in the electronics industry, from roughly 1955 
>to the present, was terribly important. Each generation of technology paid 
>for the next generation, and costly mistakes resulted in companies ceasing 
>to exist (Shockley Transistor, Rheem, Precision Monolithics, and so 
>on...the list is long).
>
>Successful products led to the "genes" (or memes) propagating. Phenotypes 
>and genotypes.
>
>This same model gave us, basically, the commercial automobile and aviation 
>industries.
>
>"Moon shots," on the other hand, distort markets, suffer from a lack of 
>evolutionary learning, and have almost no breakthroughs ("But what about 
>Tang?").
>
>"I am proud to announce, as your President, the goal of creating our 
>national mechanical brain, a machine which will be built with one million 
>relays and vacuum tubes. I am committing one billion dollars to this noble 
>endeavour. We expect to have the mechanical brain operating by 1970." 
>--President Dwight Eisenhower, 1958.
>
>Really, Eugene, you need to think deeply about this issue. Ask your lab 
>associate, "A. G.," about why learning and success/failure is so important 
>for so many industries. Read some Hayek, some von Mises, some Milton 
>Friedman. And even some David Friedman.
>
>Ask why the U.S.S.R., which depended essentially solely on "federal 
>funding," failed so completely. Hint: it wasn't just because of repression. 
>It was largely because "picking winners" doesn't work, and command 
>economies only know how to pick winners (they think).
>
>Think deeply about why this list is what it is.


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