Week 14 We can't focus on blue

July 19th, 2021

Matthew Yglesias writes about the case for banning non-competes. This may be just a very specific US labor market dysfunction. And Matthew goes a great length to explain something that any person who has read Marx knows: that labor markets are not real markets. That said, there are some interesting bits there about innovation:

The question here is roughly something like “is innovation difficult, or is innovation expensive?” If innovation is expensive then you'll support all kinds of policies that enrich the owners of the most innovative enterprises, because maximizing the financial returns of innovation is critical to maximizing the quantity of innovation-facilitating financial inputs.

But suppose instead that innovation is difficult. Lukas Walton has a net worth of $22 billion because his grandfather founded Walmart. If he decided he really only needs $5 billion in life and is going to plow the other $17 billion into a massive R&D effort, how much innovation will he really generate? I think likely not that much, because (no offense) he's just some guy who happens to be rich, not a visionary inventor or a brilliant investor. I don't think you can just turn on the spigot and innovate. And if the primary impediment to innovation is that it's objectively difficult, then you'll be interested not in maximizing the financial rewards but in maximizing the diffusion of ideas.

and

Apple itself generated its most successful innovation at a time when its financial resources were meager compared to what it has available today. The new, richer company isn't rolling out innovations at two times the pace of Jobs-era Apple because that's just really hard. You can't will innovations into existence with resources and incentives; you need ideas and vision, and they are just objectively in short supply.

This argument also applies to patents (and to the awful response the Open Source community had to Github's Copilot, but hey, job security). But there's a more generic point here:

While letting companies better defend their business methods might let them capture a larger share of the upside of innovation, it seems unlikely to me that it would meaningfully increase the amount of innovation. On the contrary, the diffusion of ideas out from innovative firms could have significant social benefits.

There are real coordination and financial needs for every project. Capitalism addresses the latter (i.e. capital plus a time buffer for people surviving), and it does an okey-ish job at the former, up to a certain scale (i.e., it can set-up an aircraft factory, but it can't address global warming). And to be fair, coordination at any scale is probably the hardest problem.

But beyond that, capitalism goes in the direction of accumulation, not innovation.


This week from the I can't believe my eyes department: blue blur doesn't matter to your brain. Because apparently we can't focus on blue, so we don't, so what is seeing anyway...


masters in poverty: "College is the path to upward mobility jk".


I'm late with my June recommendations, so here they are: Sweet Tooth, Mr. Inbetween S03, Mare of Easttown, Lupin S02.

Most of those are pretty well known, so I'll give a shout-out to Mr. Inbetween. It was one of my favorite shows lately, and this was the final season.


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