Category Archives: Innovation

Book Review: Thomas Hager – Ten Drugs: How Plants, Powders, and Pills Have Shaped the History of Medicine

Thomas Hager – Ten Drugs: How Plants, Powders, and Pills Have Shaped the History of Medicine (New York: Abrams Press, 2019)

Hager writes as a storyteller, rather than as a chemist. This makes a daunting subject much easier to approach. It also makes clear the significant progress medicine has made over the last several centuries. Though Hager argues that drug companies have already picked most of the low-hanging fruit, the next few decades will still see significant advances.

As he points out early on, he tells the stories of ten-ish drugs, not precisely ten. Each chapter is more about a group of drugs. The first chapter is about opiates and pain relievers, a category that likely includes more than ten notable drugs by itself. The good these drugs have done for surgical patients, women giving birth, and chronic pain patients is coupled with the problems of addiction and the inability of policymakers to deal with the problem with anything other than prohibition and restrictions. These policies, create more problems than they solve, which politicians are naturally proposing to address with more of the same.

Hager also tells the stories of antibiotics, which balance life-saving power versus rapid bacterial evolution; vaccines and inoculations, which have dealt with anti-vaxxer nonsense from the beginning of their thousand-year history; and other fascinating stories of progress and reaction, and innovation and suppression. The final category, of gene-based medicine, is flashing enormous potential right now, much of which is still unrealized. People with cancer, organ damage, birth defects, and genetic diseases such as sickle-cell anemia are all potential beneficiaries. However, they are threatened by a significant anti-science movement from both the right and the left.

This book came out in 2019, right before the COVID-19 pandemic. If Hager writes an afterword or an updated edition on the 2020 pandemic, it would be fascinating to see his thoughts on how the speed of invention has sped up over time.

For comparison, smallpox first appeared in third century, B.C. Egypt. It took more than a thousand years for the first inoculations to be invented in 9th century, A.D. China. It then took another 900 years or so for people like Lady Mary Wortley Montagu to popularize the practice in the 1700s, and then another 200 years to eradicate the disease entirely. In modern times, HIV/AIDS took decades, rather than centuries, to move from a death sentence to a chronic, usually manageable condition. Time will tell if COVID-19 is ever eradicated. But its timeline took a little more than a year from the disease’s first appearance to its vaccine being taken by millions. This is a big deal. For all the pain 2020 has brought, this record speed should be a strong source of optimism for dealing with the next pandemic—and for further progress with existing diseases.

Hager does a good job of staying neutral in his stories, though on several occasions he shows the intellectual’s common distaste for the idea that someone, somewhere, might be making a profit by helping people. Fortunately, he doesn’t go much into public policy in this book. He would likely have little to add that would help patients, speed innovation, or reduce costs—all of which profits incentivize.

Book Review: Ian S. Port – The Birth of Loud: Leo Fender, Les Paul, and the Guitar-Pioneering Rivalry That Shaped Rock ‘n’ Roll

Ian S. Port – The Birth of Loud: Leo Fender, Les Paul, and the Guitar-Pioneering Rivalry That Shaped Rock ‘n’ Roll (New York: Scribner, 2019)

A dual biography of Leo Fender and Les Paul, as well as a history of the instruments that bear their names. Fender, whose full name was Clarence Leonidas Fender, got his start in radio repair. He founded his own company in 1946 and began building his own PA systems and amplifiers for local musicians. By the 1950s, he was building the first mass-produced electric guitars. He was heavily influenced by his love of Hawaiian music, an dsome of Fender’s first electric instruments were Hawaiian-style lap steel guitars with pickups that wrapped around the strings in a circle. Today’s guitar pickups are typically flat slabs underneath the string. Fender’s customers were mainly working musicians who need instruments that were loud, reliable, and easy to repair.

Before Fender, most electric guitars were hollowbodies. They were built similarly to traditional acoustic guitars, but with pickups. Fender’s solidbody designs were almost impossible to destroy. They are also easy to mass produce, since they are essentiallu flat planks of wood carved into a standardized Telecaster or Stratocaster shape. The necks were a bolt-on design, which meant they were interchangeable and easy to replace if they broke—or if the player preferred the feel of a neck from one instrument, but preferred the body of another.

A pre-Fender guitar’s glued-in neck was permanent. One stage mishap could mean the end of the instrument—and a hefty expense for a musician who might not be able to afford it. Fender’s guitars also had a thinner, brighter, treble-heavy sound that belied his Hawaiian influences. In this way, 1930s Hawaiian music had an underappreciated influence on everything from country music to Jimi Hendrix’s searing guitar solos.

Fender also created the first mass-produced electric bass, the Precision Bass. As with Teles and Strats, these were designed for gigging musicians. Electric basses are far, far smaller than a traditional stand-up bass. They were also far louder, which meant they could keep up with modern rock bands—especially when played through a Fender Bassman amp. They had frets, which inspired the “Precision” name. A few years later Fender introduced the Jazz Bass, which has a slightly offset body shape and a brighter, more articulate sound. The two designs remain the standard choices for genres ranging from Motown blues to metal.

While Fender’s company had a rough going in its early days, the success of the Telecaster, introduced in 1952, and the Stratocaster, introduced in 1954, and its basses, allowed Fender to sell his company to CBS in 1965 for $13 million, or about $100 million in today’s dollars.

CBS was a negligent owner and allowed the quality of Fender’s guitars to decline, to the point where the company was at risk of going by the 1980s. Once the company regained its independence, it upped its quality control and embraced overseas manufacturing, established a custom shop, and began a renaissance that continues to this day. Fender is now the largest instrument maker in the world, and is a studious caretaker for other famous guitar brands such as Jackson and Gretsch that had also fallen on hard times.

Les Paul, born in Waukesha, Wisconsin, was one of the first people to make a solidbody guitar. Though he was not the first, as he liked to claim. He built his famous “log” guitar similar to Fender’s. he was the tinkering type, and after moving to New York he convinced the Epiphone guitar to give him the run of their workshop after-hours. He gave his log guitar a more conventional appearance by attaching the sides of an Epiphone hollowbody guitar to the log’s center block. Today’s semi-hollowbody designs, such as Gretsches and the Gibson ES-335, use this center-block approach to reduce feedback and give a different tone.

By 1952, the Gibson guitar company saw Fender’s success, and approached Les Paul about being the endorsee for its first entry into the solidbody market. That guitar, the Gibson Les Paul, remains in production today and has been favored by guitarists such as Eric Clapton, Slash, and Carcass’ Bill Steer.

Les Paul was also one of the first people to use overdubs and multi-tracking, which are now staples of modern recording. When he and his then-wife Mary Ford were at the peak of their popularity, Paul’s production techniques made their sound instantly recognizable.

Paul and Fender knew each other, though their careers were centered on opposite coasts, with Fender in California and Paul usually in New York when he wasn’t on the road. They were usually on good terms, although Fender and Gibson remain the two largest competitors in the instrument business.

Port is a gifted storyteller. While he usually treats Fender and Paul separately, he deftly points out common themes in their careers and their instruments. It helps that both men were a bit quirky. Fender was a bit of the nutty professor type, happier in his shop than working on the business side of his business. Paul was not the best husband to Ford, and he didn’t handle his decline in popularity very well. In his later years he became a gregarious elder statesman, and his talent for spinning a yarn made him particularly endearing, even when he was clearly exaggerating. While musicians will obviously get the most out of this book, it also makes a good case study in invention. As with most other ideas, including calculus and the steam engine, the modern electric guitar had multiple near-simultaneous inventors. There was trial, plenty of error, and the whole process was messy and unplanned. As befits the rock music Fender and Paul helped to make possible—even though neither of them even liked it.

Book Review: Ashlee Vance – Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future

Ashlee Vance – Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (New York: HarperCollins, 2015)

This is an authorized biography, so take it with a grain of salt. Musk is an interesting person whose flaws and accomplishments are both outsized. I was also unaware that Musk is an immigrant, born and raised in South Africa—yet another data point in favor of loosening restrictions against immigrants, who tend to be more entrepreneurial than us native-born Americans.

Musk’s reliance on government subsidies and tax breaks do not get nearly enough attention, and dull some of his sheen. On the positive side of the ledger, Musk is easily one of the highest-profile practitioners of what the Mercatus Center’s Adam Thierer calls “permissionless innovation.” Vance’s stories of Musk telling off innovators and proving stodgy competitors wrong are satisfying; though not so much the stories of how he treats many of his engineers and other employees. His often-humorous trolling also adds some irreverence to a business culture that could use a little more of it; innovation itself is a tacit rebuke of past generations.

The ethos of permissionless innovation is good not just for business, but for politics and culture. Widespread delegitimization of regulators and their rules would do more to limit their power than just about any reform bill Congress could pass. This is an important point many reformers overlook. Individual rules matter, but the institutions that generate those rules matter more. But in the long run, what generates those institutions? Cultural norms. One of the reasons Musk left South Africa is because its culture, barely a generation removed from apartheid, is not exactly innovation-friendly or market-friendly—and its political institutions reflect that. America turned out be a much better fit.

Unlike many green entrepreneurs, Musk believes in what he is selling. He has put almost all of his own money at risk over the years, and has very nearly lost everything more than once. His frenemy and fellow PayPal alum Peter Thiel has had a longtime policy of not investing in green startups because they don’t pan out. Musk, though still subsidy-reliant, has so far proven an exception to the rule with Tesla. While its ultimate fate is still unclear, its recent listing on the S&P 500 bodes well.

One place where Vance’s too-frequent Steve Jobs comparisons make sense is that Musk has something similar to what Jobs’ friends and enemies called his “reality distortion field.” Jobs had a rare charisma and intensity that made people buy into his vision, and work impossibly hard to make moonshot projects happen. Jobs did it with Apple’s computers and phones, and Musk has done it with cars and rockets.

While Musk’s long-term dream of colonizing Mars is unlikely to come to pass during his lifetime, it won’t be because the technology isn’t there. Most of it already exists in his current line of space vehicles. I am not alone in being extremely curious to see what happens next.

Texas Antitrust Case Against Google would Harm Consumers and Small Businesses

This is a press statement originally posted at cei.org.

The State of Texas announced today it is filing an antitrust lawsuit against Google, alleging the company’s online advertising platform harms competition and allows Google to fix prices for advertising.

CEI senior fellow Ryan Young said:

“A company has monopoly power if it can raise prices, restrict supply, and still keep its dominance. Despite Google’s growth, digital ad prices have fallen by half over the last decade. At the same time, print ad prices have been increasing. Some newspapers have doubled their rates. Google and Facebook, which hold similar market shares, have made the ad market more competitive. Their innovation and price-cutting has made advertising more affordable than ever for small businesses who are struggling to find customers at a difficult time. Attorney General Paxton’s lawsuit would harm consumers and small businesses—precisely the opposite of what antitrust regulation is intended to do.”

Director of CEI’s Center for Technology and Innovation Jessica Melugin said:

“It’s hard to take seriously Attorney General Paxton’s claim that Google has, ‘harmed every person in America.’ Consumers have benefited from Google’s products, services and innovations, often for free. This suit is costly solution in search of a problem.”

Read more:

New EU Tech Rules will Chill Innovation and Harm Consumers

This is a press statement originally posted at cei.org.

The European Union today announced new rules it claims will change the way technology companies operate. The EU says the Digital Services Act and the Digital Markets Act “will create a safer digital space for users” and “level the playing field so that digital businesses can grow.”

Vice President for Strategy Iain Murray said:

“The European Union’s proposed new powers allow it to treat American tech firms as cash cows, to be fined whenever it finds them guilty of providing too much discretion to consumers or allowing too much speech. Its proposed veto on acquisitions will also chill innovation in the European tech sector as it will make the prospect of significant rewards for an acquisition-based business strategy less likely. Europe will act as an anchor on tech innovation, slowing progress and reducing consumer welfare worldwide. The incoming Biden administration should avoid making the same mistakes.”

Senior Fellow Ryan Young said:

“The European Union’s two proposed tech regulation bills have two fatal flaws. One is that, on purpose or not, they are trade protectionism under another name. Many of their provisions are aimed at the large U.S. tech companies. Taking them down a notch would give an opening to EU-based tech companies, the thinking goes. As with President Trump’s trade wars, this will harm consumers without actually helping the industry. The two bills also leave in place the EU’s stifling regulatory culture that is the root cause of Europe’s lack of tech sector innovation.

“The second fatal flaw is that the EU’s proposals would actually lock in the existing American firms’ dominance. They are the only companies that can afford the massive content moderation costs the EU is demanding, or the large fines. Startups that might one day dethrone today’s giants cannot afford these costs, and may not even bother trying to compete.”

Read more:

A Big-Picture View of the Antitrust Debate

In this month’s issue of Reason magazine, I have a feature-length article on the bipartisan push to revive antitrust enforcement. If you don’t have the print edition, it is now online. Here is the introduction:

Mark Zuckerberg was having one of 2020’s worst Zoom meetings. It was July 29, and one of the most influential men in the world was sitting, pale and perspiring, in a sparse white room getting attacked by members of Congress from both parties. Rep. Matt Gaetz, a Florida Republican and close ally of President Donald Trump, was scolding the Facebook CEO about the “content moderators that you employ [who] are out there disadvantaging conservative content.”

But before Zuckerberg could offer much in the way of a response, he was attacked from the left, as Rhode Island Democrat Rep. David Cicilline castigated Zuckerberg for not taking down the same content. For Cicilline, “the problem is Facebook is profiting off and amplifying disinformation that harms others because it’s profitable.”

For good measure, Rep. Jim Sensenbrenner, a Wisconsin Republican, asked Zuckerberg why Facebook temporarily took down Donald Trump Jr.’s account over a post promoting hydroxychloroquine as a COVID-19 treatment. Zuckerberg pointed out that the incident happened on Twitter.

After discussing how conservatives’ and progressives’ ideological priors are warping the antitrust debate, I point to a better way: abolish antitrust regulation outright. Or at the very least, require proof of consumer harm before unleashing it.

Read the whole thing here. See also CEI’s dedicated antitrust site, antitrust.cei.org.

It’s Good to Think Long-Term

From Kindle location 710 of Adam Thierer’s excellent 2020 book Evasive Entrepreneurs and the Future of Governance: How Innovation Improves Economies and Governments:

If the primary indictment of technological innovation is that it has inundated us with too much information or too many options, those are good problems compared with the more serious problems our ancestors faced.

You can read about some of those problems in Fernand Braudel’s The Structures of Everyday Life or William Manchester’s evocatively titled A World Lit Only by Fire.  Today’s political debates would improve if more people had that larger historical arc in the back of their minds.

Andrew McAfee – More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next

Andrew McAfee – More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next

This would be good for an undergraduate economics course. McAfee’s thesis captures the core insights of economic growth and what causes it. He also makes the true but unpopular case that prosperity results in a cleaner environment. Poverty pollutes. In wealthy countries, people can afford to care about environmental quality, and also develop more efficient production processes that cause less harm in the first place. McAfee never uses the term, but economists call this phenomenon the environmental Kuznets curve. Basically, pollution and other harms increase until a country reaches roughly $4,500-$5,000 of per capital GDP. At that level of wealth, people don’t have to worry as much about their next meal will come from, or basics such as sturdy shelter and tolerable sanitation. Children can go to school instead of working on the farm. With those needs mostly being met, people then become interested in next-level wants, which include a clean environment.

McAfee writes a simple, direct style that reads a little bit like an introductory textbook. He also doesn’t go into the nitty-gritty the way similar works by authors like Hans Rosling, Matt Ridley, and others do. This isn’t a bad thing; he’s serving a different niche than they are.

He is quite direct in stating his belief that free markets are the reason most of the world are now on the right side of the environmental Kuznets curve, and that markets are why he is confident enough that improvements will continue. So confident that he is willing to bet his own money that numerous indicators will improve—see his website for more, and to bet against him if you wish. He is willing to wager up to $100,000 of his own money.

Simon Winchester – The Perfectionists: How Precision Engineers Created the Modern World

Simon Winchester – The Perfectionists: How Precision Engineers Created the Modern World

After a brief appreciation of the notion of precision and how it differs from accuracy, Winchester begins with the story of longitude and John Harrison’s precision clocks. The general organizational theme of the book is chronological, with engineers’ precision capabilities increasing over time.

Winchester is at his best in the lengthier middle chapters. In one, he compares two different kinds of precision—those espoused by Henry Ford and by Rolls Royce. In a Ford assembly line, workers needed almost no skill to fit the precision-made interchangeable parts together in mass quantity on the precisely designed assembly line. The handmade Rolls Royce instead emphasized that every aspect of the car must be hand-made to the most exacting precision by the world’s most skilled craftsmen, to the point that its factory could muster just two cars per day, compared to a new Model T every 40 seconds at Ford’s factory.

His chapter about the birth of the jet engine and the mind-boggling precision needed for its fan blades and other parts is similarly excellent. And the chapter on optics, beginning with how lenses are made and climaxing with the story of the Hubble Space Telescope, its initial blurry pictures due an almost unthinkably small mistake, and its 1993 repair done in space, is also a tour de force.

From there, Winchester goes into the history of the transistor, which nowadays requires atomic precision. Before too long, quantum computers may bring precision requirements down to the quantum realm. The book ends by returning to timekeeping. John Harrison’s famous H-4 clock has since been surpassed by atomic clocks and time-based GPS systems so precise they must take the theory of relativity into account.

Steven Levy – In The Plex: How Google Thinks, Works, and Shapes Our Lives

Steven Levy – In The Plex: How Google Thinks, Works, and Shapes Our Lives

A corporate history of Google from its founding up until 2011 or so. This book was written with the cooperation of Google’s founders, so it is not an objective history, nor should it be treated as such. It is still useful. A sequel may also be in order before too long. Since this book was published, Google has created its own parent company, Alphabet, and diversified into areas from video to maps to driverless cars. It is also undergoing multiple antitrust investigations, and growing ire from right and left populists could have massive consequences for consumer welfare, innovation, and for competition policy going forward.

Google has changed quite a bit since its early days, but anything violating the consumer welfare standard is difficult to find in here—though, again, this book is not an objective history. If anything, fear of regulatory reprisal put a damper on some of Google’s innovative ideas almost as soon as they realized the company would be a success. That, as opposed to market share for searches or advertising, is evidence of consumer harm.

Some of Google’s early mistakes and learning experiences still loom large today, such as its acquiescence to Chinese censorship.

Levy also has a forthcoming book on Facebook out in January 2020.