Arnold Kling  

Discovery Procedure in Wireless Technology

Becker-Posner on Drug Patents... Social Security Privatization...

John Yunker writes,

While Japan and Korea will retain their lead for some time, the US is poised to surpass Europe in network speeds, bandwidth consumption and, more important, network variety...

Remember when the US was criticized by Europe for its chaotic mix of wireless technologies? Ironically, this chaos appears to be doing more good than harm as it creates a more dynamic technology horse race.

Ironically, students of Hayek are not surprised when central planning does worse than competition as a discovery procedure. Government can choose an advanced technology successfully. But this effectively freezes technology, creating disadvantages when the next generation comes along. See Minitel.

For Discussion. How are Hayek and Schumpeter more tolerant of imperfect markets than classical textbook microeconomics?

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CATEGORIES: Austrian Economics

COMMENTS (3 to date)
David Thomson writes:

The so-called “classical textbook microeconomics” is merely an attempt to evade reality. Economic growth intrinsically demand victims. Each and every time when economic productivity is improved, however minutely,---someone’s job is jeopardized. This is the harsh dogmatic truth which is admittedly disquieting. Liberals constantly point to this as a justification to protect workers. Alas, there are no easy answers to this dilemma. Some people are going to be hurt. The main thing, however, is that we must remember that in the long run the overall economic improvement lifts all boats. But in the long run aren’t we all dead? Hey, my duty is to tell you the truth. There are tradeoffs which cannot be ignored. Did somebody promise you a rose garden? Well, it wasn’t me.

Lawrance George Lux writes:

Hayek and Schumpeter recognize Markets are in constant flux, where the Cost of a Product Part will have already changed before the Product is even sold. Traditional Classicalists insist some snapshot of the Economy can be taken, and Pricing must meet that snapshot of expectations. lgl

Brad Hutchings writes:

Look at the mainstream focus on "market failure". More often than not, it is an excuse for regulation. For example, Virginia Postrel has been noticing (perhaps from reading this blog, lol) an academic trend denouncing the plethora of choices we have today and how debilitating such choice supposedly becomes. She notes that many of today's choices are stylistic rather than substantive -- for example, the original iMac or iPod Mini colors. To the critics, these are signs of the apocalypse. Yet to Hayekians, the multitude of conflicting options, even at the surface level, serve as fertile ground for improvement, recombination, and invention. The overwhelming array of choices is not a bug, but a feature, and moreso an opportunity, as Postrel points out.

This gets me thinking about the "face" of economics in our culture. Perhaps the best prominent mainstream media spokespeople for the Hayekian approach who have economic pedigrees are the likes of Larry Kudlow and Ben Stein. On the anti-choice, pro-regulation side, we have the likes of Lou Dobbs and Paul Krugman. Clearly, Stein (and even Kudlow) has a sense of humor despite his involvement with the economics profession. But they could both really use a week the Fab 5.

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