Pub Date : 2019-08-01DOI: 10.1093/OSO/9780190263669.003.0001
A. Diamond
Economies have grown where innovative dynamism has flourished, especially in the United States from roughly 1830 to 1930. Innovations are not inevitable, but occur when inventors can invent and entrepreneurs can innovate. Individual inventors matter and are scarce. Thomas Edison was not the only one to invent a light bulb but was the first to invent a bulb that would stay lit at a price that ordinary people could afford. Leapfrog competition occurs when an innovation improves on, and at least partly replaces, an older technology. The best size for a firm varies with technology, industry, and business model. With John D. Rockefeller’s process innovations, Standard Oil succeeded as a big firm. But horizontal mergers failed in many other industries during the same period. Big incumbent firms can implement innovations, but are disadvantaged at starting breakthrough innovations. Baldwin Locomotive and Netscape illustrate that firms can contribute and then exit with honor.
{"title":"An Economy of Innovative Dynamism","authors":"A. Diamond","doi":"10.1093/OSO/9780190263669.003.0001","DOIUrl":"https://doi.org/10.1093/OSO/9780190263669.003.0001","url":null,"abstract":"Economies have grown where innovative dynamism has flourished, especially in the United States from roughly 1830 to 1930. Innovations are not inevitable, but occur when inventors can invent and entrepreneurs can innovate. Individual inventors matter and are scarce. Thomas Edison was not the only one to invent a light bulb but was the first to invent a bulb that would stay lit at a price that ordinary people could afford. Leapfrog competition occurs when an innovation improves on, and at least partly replaces, an older technology. The best size for a firm varies with technology, industry, and business model. With John D. Rockefeller’s process innovations, Standard Oil succeeded as a big firm. But horizontal mergers failed in many other industries during the same period. Big incumbent firms can implement innovations, but are disadvantaged at starting breakthrough innovations. Baldwin Locomotive and Netscape illustrate that firms can contribute and then exit with honor.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"76 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115758730","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.1093/OSO/9780190263669.003.0006
A. Diamond
The worst labor-market fears about innovative dynamism are either unjustified or can be allayed by better policies. Except during the depths of recessions, more jobs are created than destroyed. Job loss is usually gradually and often can be foreseen. The pains of labor can be reduced through policies that avoid repeating the Great Depression or the Crisis of 2008. The pains can be further reduced by fostering more robustly redundant job markets, such as in Silicon Valley, where most workers can quickly and easily find new jobs. Some innovative entrepreneurs succeed at turning their startups into the fast-growing gazelles that create most of the new jobs in the economy. Redundant job markets can be fostered by minimizing regulations on the gazelles, and by reducing the credentialism exemplified by occupational licensing. Robots and artificial intelligence are not to be feared because they are more complements than substitute for human labor.
{"title":"Easing the Pains of Labor","authors":"A. Diamond","doi":"10.1093/OSO/9780190263669.003.0006","DOIUrl":"https://doi.org/10.1093/OSO/9780190263669.003.0006","url":null,"abstract":"The worst labor-market fears about innovative dynamism are either unjustified or can be allayed by better policies. Except during the depths of recessions, more jobs are created than destroyed. Job loss is usually gradually and often can be foreseen. The pains of labor can be reduced through policies that avoid repeating the Great Depression or the Crisis of 2008. The pains can be further reduced by fostering more robustly redundant job markets, such as in Silicon Valley, where most workers can quickly and easily find new jobs. Some innovative entrepreneurs succeed at turning their startups into the fast-growing gazelles that create most of the new jobs in the economy. Redundant job markets can be fostered by minimizing regulations on the gazelles, and by reducing the credentialism exemplified by occupational licensing. Robots and artificial intelligence are not to be feared because they are more complements than substitute for human labor.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127134872","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.1093/OSO/9780190263669.003.0007
A. Diamond
New jobs created by innovative dynamism tend to be better jobs than old jobs destroyed. The new jobs are usually safer, cleaner, less routine, more creative, and more satisfying. Most factory jobs in the Industrial Revolution were steps up for those who had been scraping by in rural poverty. The replacement of the steam engine by the electric engine in factories made factories safer, cleaner, and better lit. From the late 1800s through the early 2000s, new jobs tended to involve less manual labor, less routine, more creativity, and more analysis. The trend accelerated with the flourishing of computers and the Internet in the 1990s and early 2000s. Innovative dynamism allows workers to choose jobs pursuing big, hairy, audacious goals (BHAGs) and the control, challenge, and satisfaction of being their own boss as free-agent entrepreneurs. We all benefit from allowing the choice of intense jobs, rather than mandating work–life balance.
{"title":"The Benefits: Labor Gains","authors":"A. Diamond","doi":"10.1093/OSO/9780190263669.003.0007","DOIUrl":"https://doi.org/10.1093/OSO/9780190263669.003.0007","url":null,"abstract":"New jobs created by innovative dynamism tend to be better jobs than old jobs destroyed. The new jobs are usually safer, cleaner, less routine, more creative, and more satisfying. Most factory jobs in the Industrial Revolution were steps up for those who had been scraping by in rural poverty. The replacement of the steam engine by the electric engine in factories made factories safer, cleaner, and better lit. From the late 1800s through the early 2000s, new jobs tended to involve less manual labor, less routine, more creativity, and more analysis. The trend accelerated with the flourishing of computers and the Internet in the 1990s and early 2000s. Innovative dynamism allows workers to choose jobs pursuing big, hairy, audacious goals (BHAGs) and the control, challenge, and satisfaction of being their own boss as free-agent entrepreneurs. We all benefit from allowing the choice of intense jobs, rather than mandating work–life balance.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114296943","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.1093/OSO/9780190263669.003.0008
A. Diamond
The wealth received by some innovative entrepreneurs is fair because of the large benefits of their innovations. Widespread flourishing under innovative dynamism encourages tolerance of diversity, respect for the rights of others, more effective sympathy, and cultural diversity. The equality that matters most is that everyone has roughly an equal chance to improve their lives. The quantity of resources expands, because inventors and entrepreneurs create new uses for old materials. For example, process innovations in agriculture, such as the Haber-Bosch process for creating fertilizer from nitrogen in the air, mean that an abundance of food can be grown with less land, encouraging the greening of the planet. Innovations can allow us to adapt to modest and slow global warming. If global warming becomes greater and faster, other innovations can produce energy with less carbon, can increase the sequestration of carbon, and can counter the increase in temperature through geoengineering.
{"title":"The Benefits: Morality, Equality, Mobility, Culture, and the Environment","authors":"A. Diamond","doi":"10.1093/OSO/9780190263669.003.0008","DOIUrl":"https://doi.org/10.1093/OSO/9780190263669.003.0008","url":null,"abstract":"The wealth received by some innovative entrepreneurs is fair because of the large benefits of their innovations. Widespread flourishing under innovative dynamism encourages tolerance of diversity, respect for the rights of others, more effective sympathy, and cultural diversity. The equality that matters most is that everyone has roughly an equal chance to improve their lives. The quantity of resources expands, because inventors and entrepreneurs create new uses for old materials. For example, process innovations in agriculture, such as the Haber-Bosch process for creating fertilizer from nitrogen in the air, mean that an abundance of food can be grown with less land, encouraging the greening of the planet. Innovations can allow us to adapt to modest and slow global warming. If global warming becomes greater and faster, other innovations can produce energy with less carbon, can increase the sequestration of carbon, and can counter the increase in temperature through geoengineering.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123408390","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.1093/OSO/9780190263669.003.0009
A. Diamond
The right culture, institutions, and policies all can encourage innovative dynamism. Heroes inspire cultural values of courage, perseverance, hard work, and tolerance. Religion enables innovative dynamism when it reduces violence and encourages respect for property. Religion constrains innovative dynamism when it limits questioning, as often occurs in hierarchical religions that emphasize faith. The Founding Fathers owed more to the tolerance of the Dutch of New Amsterdam, and to the trial-and-error experimentation of Galilean science, than they did to the religious fervor of the Pilgrims. Innovative dynamism often flourishes where institutions such as the rule of law, property rights, and the city enable diversity, collaboration, and a robustly redundant labor market. North and South Korea shared a culture, but through different institutions and policies, have diverged in innovation. Because policies matter, and we know best how to change them, policy reforms should be the focus of efforts to enhance innovative dynamism.
{"title":"Innovation Bound or Unbound by Culture and Institutions","authors":"A. Diamond","doi":"10.1093/OSO/9780190263669.003.0009","DOIUrl":"https://doi.org/10.1093/OSO/9780190263669.003.0009","url":null,"abstract":"The right culture, institutions, and policies all can encourage innovative dynamism. Heroes inspire cultural values of courage, perseverance, hard work, and tolerance. Religion enables innovative dynamism when it reduces violence and encourages respect for property. Religion constrains innovative dynamism when it limits questioning, as often occurs in hierarchical religions that emphasize faith. The Founding Fathers owed more to the tolerance of the Dutch of New Amsterdam, and to the trial-and-error experimentation of Galilean science, than they did to the religious fervor of the Pilgrims. Innovative dynamism often flourishes where institutions such as the rule of law, property rights, and the city enable diversity, collaboration, and a robustly redundant labor market. North and South Korea shared a culture, but through different institutions and policies, have diverged in innovation. Because policies matter, and we know best how to change them, policy reforms should be the focus of efforts to enhance innovative dynamism.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130769783","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.1093/OSO/9780190263669.003.0004
A. Diamond
The value of innovative new goods is hard to measure, but can be seen in how people vote with their feet to live where there are innovative new goods. Among the most important new goods are cures for diseases, electric light, cars, washing machines, air conditioning, television, and computers. Cures for disease are especially important because they are primary goods that are needed for pursuing almost any life plan. The grandson of John D. Rockefeller, the richest person ever to live, died of scarlet fever because medical invention and entrepreneurship had not yet created Prontosil. Washing machines reduce time spent in routine drudgery. Air conditioning aids health, and allows the mental sharpness needed for pursuing creative and challenging life plans. Cars increase safety and control of travel times and companions. Some goods, such as Ray Kurzweil’s optical character recognition (OCR) machine, enables the blind to read regular books.
创新新商品的价值很难衡量，但可以从人们如何用脚投票选择住在有创新新商品的地方看出。最重要的新产品包括治疗疾病的药物、电灯、汽车、洗衣机、空调、电视和电脑。治疗疾病尤其重要，因为它们是实现几乎任何人生计划所必需的基本物资。他是有史以来最富有的人约翰·d·洛克菲勒(John D. Rockefeller)的孙子，死于猩红热，因为当时医学发明和企业家精神还没有创造出百浪多思(Prontosil)。洗衣机减少了花在日常杂活上的时间。空调有助于健康，并允许追求创造性和具有挑战性的生活计划所需的精神敏锐度。汽车增加了安全性，并控制了旅行时间和同伴。有些产品，如雷·库兹韦尔的光学字符识别(OCR)机器，使盲人能够阅读普通书籍。
{"title":"The Benefits: New Goods","authors":"A. Diamond","doi":"10.1093/OSO/9780190263669.003.0004","DOIUrl":"https://doi.org/10.1093/OSO/9780190263669.003.0004","url":null,"abstract":"The value of innovative new goods is hard to measure, but can be seen in how people vote with their feet to live where there are innovative new goods. Among the most important new goods are cures for diseases, electric light, cars, washing machines, air conditioning, television, and computers. Cures for disease are especially important because they are primary goods that are needed for pursuing almost any life plan. The grandson of John D. Rockefeller, the richest person ever to live, died of scarlet fever because medical invention and entrepreneurship had not yet created Prontosil. Washing machines reduce time spent in routine drudgery. Air conditioning aids health, and allows the mental sharpness needed for pursuing creative and challenging life plans. Cars increase safety and control of travel times and companions. Some goods, such as Ray Kurzweil’s optical character recognition (OCR) machine, enables the blind to read regular books.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131946253","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.1093/OSO/9780190263669.003.0003
A. Diamond
Deirdre McCloskey’s Great Fact of economic history is the enrichment in the West that started during the Industrial Revolution, following millennia of life being, as Hobbes says, “poor, nasty, brutish, and short.” Hunter-gatherers lived violent, uncertain, often repetitive lives, far from the Golden Age that some imagine. Goods can be good if they provide John Rawls’s primary goods that are needed for achieving almost any life plan. They can be even better if they help us to achieve the higher goods related to the creativity, challenge, and fulfillment that Abraham Maslow discussed in his hierarchy of needs. Many who seem to oppose new goods are accidental Luddites, only opposing the particular new goods that they fear will harm them. After digesting its brain and backbone, a sea squirt spends the rest of its life vegetating. A human retains her brain and backbone, and so must act to thrive.
{"title":"The Great Fact and the Good Life","authors":"A. Diamond","doi":"10.1093/OSO/9780190263669.003.0003","DOIUrl":"https://doi.org/10.1093/OSO/9780190263669.003.0003","url":null,"abstract":"Deirdre McCloskey’s Great Fact of economic history is the enrichment in the West that started during the Industrial Revolution, following millennia of life being, as Hobbes says, “poor, nasty, brutish, and short.” Hunter-gatherers lived violent, uncertain, often repetitive lives, far from the Golden Age that some imagine. Goods can be good if they provide John Rawls’s primary goods that are needed for achieving almost any life plan. They can be even better if they help us to achieve the higher goods related to the creativity, challenge, and fulfillment that Abraham Maslow discussed in his hierarchy of needs. Many who seem to oppose new goods are accidental Luddites, only opposing the particular new goods that they fear will harm them. After digesting its brain and backbone, a sea squirt spends the rest of its life vegetating. A human retains her brain and backbone, and so must act to thrive.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116650977","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.1093/OSO/9780190263669.003.0005
A. Diamond
Process innovations mainly benefit consumers by reducing prices of services and of new and old goods, which benefits aspiring ordinary citizens more than the privileged rich. The interchangeable parts of the American system of manufacturing (famously demonstrated at Britain’s Crystal Palace in Victorian England) reduced the costs of many goods, bringing them within the reach of the working class. Process innovations are often financed by rich venturesome consumers who buy expensive early versions of new goods. Besides lowering costs, process innovations also increase the variety, convenience, and quality of goods. Important process innovations include Fritz Haber’s inventing a way to create fertilizer from air; Henry Ford’s adaptation of the assembly line to reduce the costs of manufacturing cars; Sam Walton’s logistical, information technology and managerial innovations to reduce the costs of retailing; and Jeff Bezos’s Internet process innovations to increase the variety, convenience, and speed of delivery of retail goods.
{"title":"The Benefits: Process Innovations","authors":"A. Diamond","doi":"10.1093/OSO/9780190263669.003.0005","DOIUrl":"https://doi.org/10.1093/OSO/9780190263669.003.0005","url":null,"abstract":"Process innovations mainly benefit consumers by reducing prices of services and of new and old goods, which benefits aspiring ordinary citizens more than the privileged rich. The interchangeable parts of the American system of manufacturing (famously demonstrated at Britain’s Crystal Palace in Victorian England) reduced the costs of many goods, bringing them within the reach of the working class. Process innovations are often financed by rich venturesome consumers who buy expensive early versions of new goods. Besides lowering costs, process innovations also increase the variety, convenience, and quality of goods. Important process innovations include Fritz Haber’s inventing a way to create fertilizer from air; Henry Ford’s adaptation of the assembly line to reduce the costs of manufacturing cars; Sam Walton’s logistical, information technology and managerial innovations to reduce the costs of retailing; and Jeff Bezos’s Internet process innovations to increase the variety, convenience, and speed of delivery of retail goods.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"141 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133292365","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-06-20DOI: 10.1093/OSO/9780190263669.003.0013
A. Diamond
Pessimists predict the end of technological progress, but secular (long-term) stagnation is due to bad policies, not to having picked the low-hanging fruit, as illustrated by innovative medical entrepreneurs who have been constrained from bringing us quicker and better cures for cancer. Funded researchers must stick to their original protocols even in the face of promising serendipitous discoveries. Medical incumbents protect their turf by mandating costly double-blind studies for innovations, and then refusing to enroll their patients in the studies. Trial-and-error experimental tinkering allowed Emil Freireich and his Society of Jabbering Idiots to develop the chemotherapy cocktail that allowed many to be cured of childhood leukemia, and allowed Vincent DeVita to develop the chemotherapy cocktail that allowed many to be cured of Hodgkin’s lymphoma. Yet FDA protocols restrict trial-and-error experimentation, resulting in many needless deaths. In medicine, as elsewhere, our future will be better if we unbind the innovative entrepreneur.
{"title":"Hope for a Better Future","authors":"A. Diamond","doi":"10.1093/OSO/9780190263669.003.0013","DOIUrl":"https://doi.org/10.1093/OSO/9780190263669.003.0013","url":null,"abstract":"Pessimists predict the end of technological progress, but secular (long-term) stagnation is due to bad policies, not to having picked the low-hanging fruit, as illustrated by innovative medical entrepreneurs who have been constrained from bringing us quicker and better cures for cancer. Funded researchers must stick to their original protocols even in the face of promising serendipitous discoveries. Medical incumbents protect their turf by mandating costly double-blind studies for innovations, and then refusing to enroll their patients in the studies. Trial-and-error experimental tinkering allowed Emil Freireich and his Society of Jabbering Idiots to develop the chemotherapy cocktail that allowed many to be cured of childhood leukemia, and allowed Vincent DeVita to develop the chemotherapy cocktail that allowed many to be cured of Hodgkin’s lymphoma. Yet FDA protocols restrict trial-and-error experimentation, resulting in many needless deaths. In medicine, as elsewhere, our future will be better if we unbind the innovative entrepreneur.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125830055","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-06-20DOI: 10.1093/oso/9780190263669.003.0012
A. Diamond
The steady growth in imposed regulations, often defended on the basis of the precautionary principle (which forbids innovations until there is proof that they will cause no harm), increases the risks and costs of innovation for the entrepreneur. Many important innovations of the last century would not have occurred if the precautionary principle had been in operation. Organic regulation of the marketplace (including tort actions and private ratings firms) can counter injuries due to irresponsible firm behavior, without stifling innovation. OSHA regulations did not reduce workplace deaths; financial regulations did not stop the Crisis of 2008, and may have made it worse. Occupational licensing regulations protect incumbents, and reduce opportunity for the least well-off. By slowing new life-saving drugs, FDA regulations cause more deaths than they prevent. The Vodnoy paradox suggests that we favor regulations in areas where we are ignorant and oppose them in areas where we are knowledgeable.
{"title":"Unbinding Regulations","authors":"A. Diamond","doi":"10.1093/oso/9780190263669.003.0012","DOIUrl":"https://doi.org/10.1093/oso/9780190263669.003.0012","url":null,"abstract":"The steady growth in imposed regulations, often defended on the basis of the precautionary principle (which forbids innovations until there is proof that they will cause no harm), increases the risks and costs of innovation for the entrepreneur. Many important innovations of the last century would not have occurred if the precautionary principle had been in operation. Organic regulation of the marketplace (including tort actions and private ratings firms) can counter injuries due to irresponsible firm behavior, without stifling innovation. OSHA regulations did not reduce workplace deaths; financial regulations did not stop the Crisis of 2008, and may have made it worse. Occupational licensing regulations protect incumbents, and reduce opportunity for the least well-off. By slowing new life-saving drugs, FDA regulations cause more deaths than they prevent. The Vodnoy paradox suggests that we favor regulations in areas where we are ignorant and oppose them in areas where we are knowledgeable.","PeriodicalId":342770,"journal":{"name":"Openness to Creative Destruction","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131026342","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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