Wednesday, December 17, 2008

The importance of innovation

Bret Swanson has a wonderful article that reminds us of the huge technological advances that have been made in recent years thanks to innovation of all sorts. He makes a compelling case for not allowing a significant expansion of government into the areas of energy, finance, auto and healthcare. Some excerpts:

Today, an average consumer can buy a terabyte hard drive (1 million megabytes), on which she might store her family photos, videos and other digital documents for as little as $109.99. In 1992, a terabyte drive, if such a thing had existed, would have cost $5 million.

Apart from research scientists and a few early adopters of Compuserve and AOL, the Internet essentially didn't exist in 1992. Monthly Internet traffic was four terabytes. All the data traversing the global net in 1992 totaled 48 terabytes. Today, YouTube alone streams 48 terabytes of data every 21 seconds.

When the Human Genome Project began in the early 1990s, sequencing one DNA base pair cost about $10. Today sequencing one base pair costs a tenth of a cent, and by 2024 we'll sequence an entire human genome for $100.

In 1992 a tiny percentage of Chinese citizens had ever made a phone call, but today there are twice as many mobile-phone subscribers in China as there are people in the U.S. The entirety of U.S.-China trade in 1992 was $33 billion. This year it will approach $400 billion.

But innovation is by definition unexpected. We can't force it or compel it. Certainly not from Washington. If Washington had planned our future in 1992, we wouldn't be here.

When things look bleak, look back. You will see how bright tomorrow can be.

HT: Russell Redenbaugh


Vinnie Brascia said...


I saw the Swanson piece a few days ago. I'm glad you saw it as well.

I think it provides an outstanding dose of perspective.

As I said previously, there is very little perspective with respect to the current economic environment. There's just no context for the data.

The recent unemployment numbers were a prime example. How much "handwringing" did we see in the media on how this was 6th worst decline in history and the worst number since 1945.

However, when you put the data in a proper context, you realized that there are nearly 140 million people in the workforce today.

Back then, there were only 39 million folks in the workforce.

Now a 533,000 person job loss is nothing to sneeze at...but when compared to a total workforce of 140 million versus 39 million - well, these two numbers aren't even in the same class.

(For the record, on a percentage basis, I believe the job decline ranked as the 41st most significant decline in history. As I said, nothing to sneeze at, but not the end of the world either)

Anyway - keep up the good work.

The sun will come out again.

It always does.

Scott Grannis said...

Thanks, it's good to know I'm not the only optimist!

IceCold said...

Of course furious and determined disregard of historic trends or other data that would provide perspective afflicts all topics, not just economics (nothing beats the press conference back in early '91, where then-SecDef Cheney held up a newspaper with the headline "War Drags On" a few days into Desert Storm - even the journos laughed).

But I've enjoyed the recent media reports referring to the "worst" something-or-other in 26 years. Meaning - the last real recession we had was TWENTY SIX YEARS ago. I don't recall the average frequency of recessions since WWII - something like 4-6 years?

Not so enjoyable has been watching the "adults" in power going insane to prevent or cut short a recession - we just can't have them anymore, they've been outlawed, dontcha know. Of course they claim to have been trying to avoid Armageddon. But my skepticism at the outset has only been reinforced by subsequent events.

The near-total lack of perspective on technological advance is sorta-kinda human nature at work - what is normal for 10 years is "normal". But ignorance of basic economic concepts and dynamics is an avoidable, and far more pernicious, failing. For illustration, see our "health care" system, its costs, and obvious disastrous lack of market dynamics therein. I've also noticed the jarring absence of calls for investigations into the precipitous decline in retail gasoline prices. Ignorance, envy, and prejudice still seem to have the whip hand. If anything, that hand just got much stronger.

Scott Grannis said...

Unfortunately you are right. One way you can fight the stupidity and disregard for liberty and free markets out there is to support Cato Institute, which I do.