By William Tomos Edwards:
There’s a famous story of a Canadian inventor who developed an inexplicably fuel-efficient carburetor. Men from the oil industry reached out to him. The inventor soon disappeared and he and his carburetor were ultimately never seen or heard from again.
The story is of course patently bogus. Countless variations of it have been told since the early 20th century. The only remarkable part of the story is that it is inspired by a real Canadian inventor, Charles Nelson Pogue, who developed some patents that in no way shape or form paved the way for miraculous gains in fuel efficiency.
Still, it’s highly instructive that this has become an enduring urban legend. After all, an erudite lecture from the late Harvard professor Calestous Juma on “innovation and its enemies” is going to demand a lot more cognitive load. In lieu of that lecture, the urban legend of the miracle carburetor gets the same point across just fine; powerful interests do not always profit from technology getting better and faster.
In professor Juma’s 2016 tour de force historical overview of the various factions and socio-economic forces that impede innovation, he exposes the unholy alliance that often forms between “incumbent” firms on the one hand, and governments and reigning legacy institutions on the other. Juma provides a simple and obvious reason for this alliance: Governments, major media outlets, and other leading institutions obtain the lion’s share of their revenue from monopolistic incumbent firms. Hence, those institutions use regulations, propaganda, and other choice strategies to support incumbent firms, and sabotage iconoclastic entrepreneurs.
The illiberal anti-free expression philosophy that has taken hold across major American institutions is almost certainly a manifestation of those institutions underlying incentives to control innovation. Trying to crush innovative efforts on an ad-hoc, case-by-case basis is tiresome stuff. The US government hasn’t had much luck trying to shut down bitcoin. It’s far more effective to foster an environment with salient cultural restrictions on creativity and inquiry. That way, with a bit of luck, tyrants needn’t worry about blockchain coming into existence in the first place.
The authoritarian excesses of cancel culture cannot be divorced from the deep incentives felt by status quo industries and institutions. The idea that American institutions have been taken over by a principled left-wing ideology, championed by a mob of ideologues, is a misread of the actual situation. Indeed, there is rigorous documentation that American universities as prestigious as Yale are sacking professors who’ve voiced opinions (in jest) that raised the ire of conservatives.
A thorough review of the data on professors who were fired and demoted, over things that they said, confirms that many of them strayed too far to the left of the status quo. The reality of cancel culture is that anyone who offends enough people, or powerful enough people, is putting their career in jeopardy. Certainly, public outrage is a key component of cancel culture. With that said, the leaders of contemporary industries and institutions bear no undue burden on account of rank-and-file folks enabling their unforgiving despotism.
Principled ideology does not underlie the illiberal dysfunction in contemporary institutions. The underlying reasons are far crasser. Major institutions, and the oligopolies that fund them, have a vested interest in keeping a lid on free thought and free expression, simply to preserve the status quo. The highest ranking members of these organizations feel insecure in the face of technical and scientific change. Our current leaders don’t want to find themselves departing for anachronism and obscurity like the Catholic Church and European Nobility two centuries ago.
Industries’ Double-Edged Sword
Authorities like Oxford Martin and the International Monetary Fund have raised concerns about the current ability of monopolistic firms to suppress innovation. Top firms have achieved unprecedented market power in recent decades. Such firms can erect barriers to entry and horde assets like intellectual property, in order to thwart their emerging competitors. The Atlantic and The Verge have brought these concerns before a popular audience.
Lobbying for regulations that block disruptive entrepreneurs is an effective strategy favored by incumbent firms. In the late 19th century, American butter manufacturers successfully lobbied for anti-margarine laws. Cell phones would have been rolled out decades earlier if not for the radio spectrum being restricted, thanks to the lobbying efforts of broadcasters and radio common carriers. Tobacco interests have successfully lobbied against e-cigarettes. Academic research shows that top firms have obtained a healthy return on investment from lobbying and regulations, especially since the 2000s.
Another preferred method for fighting innovation is the use of propaganda. American Express has promoted an outlandish claim that cryptocurrencies are particularly bad for the environment. Thomas Edison famously went to extravagant lengths to make alternating current look dangerous and impractical since he was invested in direct current. Edison’s propaganda campaign included such macabre aspects as electrocuting dogs with alternating current and promoting its use for capital punishment.
It’s ironic because years earlier Edison had to jump through untold political hoops to introduce electric lighting to New York City and overthrow the incumbent—and less efficient—gas lighting industry. However, Edison’s hypocritical actions later in life are consistent with a rational decision-maker following the profit motive. The truth is that innovation is an industry’s double-edged sword; it’s good when it helps your bottom line and bad when it replaces your product line.
Thomas Edison’s meta-strategy is still being employed by Sir James Dyson. Dyson fought a five year legal battle against the EU because Europe’s mandatory energy efficiency tests were set up to make Dyson vacuums look less efficient than the competition. The competition—established German vacuum manufacturers—had lobbied for tests that were essentially rigged in their favor. Aside from those heroics, Dyson has funded credulous research that suited his company’s interests. This was in the context of an ongoing cutthroat PR war between Dyson and the respective manufacturers of paper towels and standard hot-air dryers.
Naturally, Dyson has promoted the company’s patented jet air dryer as the most hygienic and environmentally friendly way for a person to clean their hands. The other two factions responded in kind by promoting their own self-serving narratives. All three factions have funded scientific studies with a suspicious tendency to return results that suit the best interest of the funder. One major study with bona fide independent funding determined that paper towel was the most hygienic hand drying method. Of course, Dyson has funded research that promoted its jet air dryer.
Incumbent firms may not even be especially keen to test the limits of their own innovative prowess. Bell Labs suppressed the recording technology that they developed in the early 1930s. Senior management correctly assumed that such technology would have profound ramifications for society. However, they were being quite paranoid in thinking that people would stop using telephones because of it. These days, firms purposely design technology so that it stops working or at least loses some functionality by a predetermined date. This practice of planned obsolescence is considered a best practice.
The upshot is that monopolistic firms have a vested interest in controlling the wild world of pure research. There’s literally no telling what curiosity-driven research will produce next; it could just as easily bless or smite a given corporation. Industries are compelled to exercise control over the double-edged sword that is innovation.
Unholy Alliance vs. Double-Edged Sword
Innovation is the raison d’être for universities. But not unlike Bell Labs—the birthplace of C++, the transistor, and Unix—universities can’t be expected to be entirely gung-ho about innovation. The university’s shift to authoritarianism stems from fear of a world turned upside down by tech start-ups that don’t care about traditional higher education, and enumerable manifestations of open source. This existential uncertainty strengthens the natural partnership between universities and incumbent oligopolies.
It’s very important to note that the oligarch-institutions alliance will not benefit from a zero growth, zero innovation regime. Unlike ancient kings and priests, their power isn’t predicated upon simply maintaining peace and order. Their success hinges on innovation and growth, and yet, they need growth that they can control.
That’s not to say that the struggling masses would benefit from uncontrolled innovation. The atomic bomb, climate change, mass surveillance, and unclean air all came out of innovation. Innovation is a double-edged sword no matter who wields it, and so whoever takes up that blade must do so with a sense of control and skill. Does this mean that the oligarch-institutions alliance is simply serving its purpose in a functionalist sense?
The age of COVID-19 rips that pretense apart. Humanity cannot afford the sort of antics Dyson engaged in, commissioning research that purposely distracts from the public health risk of blasting aerosolized pathogens all over a washroom. Humanity cannot afford health organizations that dodge important questions, nor ones that give incorrect advice only to retract it after the damage is done. It’s important to note, the symbiotic relationship between powerful corporations that may have a conflict of interest with the facts, and institutions that do a poor job of finding and conveying the facts.
Miraculously, there is hope for innovation. The internet has allowed for the creation of a new intellectual ecosystem that champions innovation. The internet provides a perfect space to leverage the wisdom of the crowd and hash out a solution. What is certain is that we need to fight for a free and open internet, and keep pushing for revolutionary technologies—like blockchain—that empower people.
William Tomos Edwards is a writer, philosopher, and the founder of Bright Tapestry Data. You can follow him on Twitter.
This article is republished with permission from Fundation for Economic Education.