I have watched what is now the history of the second half of the Twentieth Century unwind, searching for the reality behind the facade of bluster and bullshit that was the ‘official’ reason for things.
As a teenager I was trying to understand the world around me. I found that, particularly where money and power are involved, things are rarely what they seemed. I am still trying to make sense out of the world and this blog is my attempt to pass on what I see. I hope that you will find something useful whether you agree with my conclusions or not.
My area of interest revolves around technology and its impact on economics and the role of government and free markets in technology. My ideas are not from being an economist but someone on the inside, living and working as an engineer in the chaos of electronics development between the 1950’s and 2000. It was a ring side seat as technology created the new world we now inhabit.
Today’s world is so different from the world of post WWII! So indulge me now as I make some observations on how it happened and what we need to learn from that post WWII time of great dreams.
One of my primary themes is the impact that technology has had. Most people acknowledge that technology has had an impact but economists still tend to minimize or ignore the impact of technology. Economists seem to be ideologues, their ideology drives them to think economic gimmicks are most important. They focus on various details while mostly ignoring the elephant in the room, technology. Currently the role of government is in focus. The ‘free market’ economists seem to think that minimizing government is the answer to all questions. Supposedly the free market will solve all problems and the government just gets in the way. That may work in an Ann Rand novel but in the real world there are few really free markets and if you want a market economy then there are many issues that must be addressed that are outside the ‘market’. While there is a long list of these issues that lie outside the market I would like to look at one that is critical to our future, technology development. The common view is that the free market is the technology developer and that all the tech leadership the US has enjoyed is because of the free market.
I tested those ideas against the reality that I had lived with for 50 years as an engineer doing advanced technology. The evidence showed that it was the government, not ‘free enterprise’ had delivered the technology that accelerated the GDP of the US. I know that sounds blasphemous but the evidence supports it. If we look at the major technologies of the 20th Century the fingerprints of the government are all over them. The more critical the technologies the more government involvement. To understand why this is true it is necessary to look at how technology is developed.
Modern technology is a multilevel effort that typically starts with basic science. This work is done at universities, and to a limited extent in government laboratories. The science gets translated into a technology or technologies which then are matured to provide workable solutions to needs. If the technology is an improvement or is less expensive then it will likely become a product we use or that helps the infrastructure that supports us. The problem with this evolution from science to applied science to advanced technology to mature technology is, who is going to pay for it? The free market is focused on the current quarter profit, if it doesn’t help the bottom line then there is little support. When you consider that maturing a technology can take a decade it is easy to see the mismatch.
So how do we get all these fabulous new technologies? It turns out the government funds development. From the time the technology is just a gleam in a scientists eye to the time that the technology is mature the government funds much if not all the work through government laboratories, university laboratories or company development. The more basic the technology the more likely the government support. When the technology is mature then the free market starts making products. In the second half of the 20th Century many of the super products were converted military items.
A classic example is GPS. This was military technology that morphed slowly into an indispensable commercial/consumer item. The GPS receiver you have in your car is dependent on a constellation of satellites designed, built, flown and maintained by the US military. The government gets no compensation but was responsible for the development of all GPS technology. In addition to the satellites the government funded all the design of the electronics up to the final consumer packaging. Without constant government involvement there could have been no GPS. GPS not only gets you to your destination but is critical to integrated logistics transportation, just in time delivery systems and a many other free market enterprises. GPS adds more than $10 billion/year to the economy yet I have never heard the free enterprise proponents mention a word about it.
In future posts I plan to prove my case with a number of other examples of government leadership in technology and why government, far from being the problem, is critical to the solution and our leadership in technology.