Ideas Having Sex

How prosperity and innovation exceeded the expectations of John Stuart Mill and Adam Smith


The phrase diminishing returns is such a cliché that few people give it much thought. Picking out the pecans from a bowl of salted nuts gives diminishing returns: The pieces of pecan in the bowl get rarer and smaller. The fingers keep finding almonds, hazelnuts, cashews, or even—God forbid—Brazil nuts. Gradually the bowl, like a moribund gold mine, ceases to yield decent returns of pecan.

Now imagine a bowl of nuts that has the opposite character. The more pecans you take, the larger and more numerous they grow. That is the human experience for the last 100,000 years. The global nut bowl has yielded ever more pecans.

Nobody predicted this. The pioneers of political economy expected eventual stagnation. Adam Smith, David Ricardo, and Robert Malthus all predicted that diminishing returns would eventually set in, that the improvement in living standards they were seeing would peter out. "The discovery, and useful application of machinery, always leads to the increase of the net produce of the country, although it may not, and will not, after an inconsiderable interval, increase the value of that net produce," said Ricardo, who perceived an inexorable tendency toward what he called a "stationary state." John Stuart Mill, conceding that returns were showing no signs of diminishing in the 1840s, put it down to luck. Innovation, he said, was an external factor, a cause but not an effect of economic growth.

Even Mill's modest optimism was not shared by his successors. They feared that as discovery began to slow, competition would drive profits out of the increasingly perfect market until all that was left was rent and monopoly. With Smith's invisible hand guiding myriad market participants possessing perfect information to profitless equilibria and vanishing returns, neoclassical economics gloomily forecast the end of growth.

To explain the modern global economy's bottomless nut bowl, you must explain where the perpetual innovation machine and its increasing returns came from. They were not planned, directed, or ordered. They emerged, evolved, bottom up, from specialization and exchange. The accelerated exchange of ideas and people made possible by technology fueled the accelerating growth of wealth that has characterized the last century. Politicians, capitalists, and officials are flotsam bobbing upriver on the tide of invention.

Even so, the generation of new useful knowledge is far from uniform, steady, or continuous. Innovation is like a bush fire that burns brightly for a short time, then dies down before flaring up somewhere else. Fifty thousand years ago, the hottest hot spot was west Asia (ovens, bows and arrows); 10,000 years ago, the Fertile Crescent (farming, pottery); 5,000 years ago, Mesopotamia (metal, cities); 2,000 years ago, India (textiles, zero); 1,000 years ago, China (porcelain, printing); 500 years ago, Italy (double-entry bookkeeping, Leonardo); 400 years ago, the Low Countries (the Amsterdam Exchange Bank); 300 years ago, France (Canal du Midi); 200 years ago, England (steam); 100 years ago, Germany (fertilizer); 75 years ago, America (mass production); 50 years ago, California (credit card); 25 years ago, Japan (Walkman). No place remains for long the leader in knowledge creation.

Just as the bush fire breaks out in different parts of the world at different times, so it leaps from technology to technology. Today, as during the printing revolution of 500 years ago, communication is aflame with increasing returns, but transport is spluttering with diminishing returns. A greater and greater amount of effort is needed to squeeze the next few miles per gallon out of vehicles of any kind, whereas each additional tranche of megabits comes more cheaply.

But the greatest impact of an increasing-return wave comes long after the technology is invented. It comes when the technology is democratized. Gutenberg's printing press took decades to generate the Reformation. Today's container ships go not much faster than a 19th-century steamship, and today's Internet sends each pulse little quicker than a 19th-century telegraph—but everybody is using them, not just the rich. Jets travel at the same speeds they did in the 1970s, but budget airlines are new.

So what is the flywheel of the perpetual innovation machine that drives the modern world? Why has innovation become routine? How was it that, in Alfred North Whitehead's words, "The greatest invention of the 19th century was the invention of the method of invention?" 


Francis Bacon was the first to make the case that inventors are applying the work of discoverers and that science is the father of invention. Modern politicians agree. The recipe for making new ideas is easy, they say: Pour public money into science, which is a public good because nobody will pay for the generation of ideas if the taxpayer does not, then watch new technologies emerge from the downstream end of the pipe.

It used to be popular to argue that the European scientific revolution of the 17th century unleashed the rational curiosity of the educated classes, whose theories were then applied in the form of new technologies, which in turn allowed standards of living to rise. But history shows this account is backward. Few of the inventions that made the industrial revolution owed anything to theory.

It is true that England had a scientific revolution in the late 1600s, but the influence of scientists like Isaac Newton and Robert Hooke on what happened in England's manufacturing industry in the following century was negligible. The industry that was transformed first and most, cotton spinning and weaving, was of little interest to scientists. The jennies, gins, frames, mules, and looms that revolutionized the working of cotton were invented by tinkering businessmen, not thinking boffins. It has been said that nothing in their designs would have puzzled Archimedes.

Even the later stages of the industrial revolution are replete with examples of technologies that were developed in remarkable ignorance of why they worked. This was especially true in the biological world. Aspirin was curing headaches for more than a century before anybody had the faintest idea of how. Penicillin's ability to kill bacteria was finally understood around the time bacteria learned to defeat it.

Most technological change comes from attempts to improve existing technology. It happens on the shop floor among apprentices and mechanics or in the workplace among the users of computer programs, and only rarely as a result of the application and transfer of knowledge from the ivory tower.


Perhaps money drives the innovation engine. The way to incentivize innovation, any Silicon Valley venture capitalist will tell you, is to bring capital and talent together. For most of history, people have been adept at keeping them apart.

In imperial Rome, scores of unknown slaves no doubt knew how to make better olive presses, better watermills, and better wool looms, while scores of plutocrats knew how to save, invest, and consume. But the two lived miles apart, separated by venal middlemen who had no desire to bring them together. An anecdote repeated by several Roman authors drives home the point. A man demonstrates to Emperor Tiberius his invention of an unbreakable, malleable form of glass, hoping for a reward. Tiberius asks if anybody else knows his secret and is assured nobody does. So Tiberius beheads the man to prevent the new material from reducing the relative value of gold to that of mud. The moral of the tale—whether it is true or not—is not just that Roman inventors received negative reward for their pains but that venture capital was so scarce that the only way to get a new idea funded was to go to the emperor.

The flowering of innovation in 18th-century Britain and late-20th-century California was powered by immigrants attracted to vast accumulations of wealth and efficient capital markets. The financing of innovation gradually moved inside firms as the 20th century progressed, baked into the budgets of companies haunted by the Schumpeterian fear that innovation could pull their whole market from them and dazzled by dreams that they could pull the whole market from under their rivals. But companies are perpetually discovering that their R&D budgets get captured by defensive and complacent corporate bureaucrats. The history of the computer industry is littered with examples of big opportunities missed by dominant players, which thereby find themselves challenged by fast-growing new rivals. IBM and Digital Equipment suffered this fate, and so will Apple, Microsoft, and Google. The great innovators are still usually outsiders.

Money is certainly important in driving innovation, but it is by no means paramount. Even in the most entrepreneurial economies, very little saving finds its way to innovators. Victorian British inventors lived under a regime that spent a large proportion of its outgoings on interest payments, sending a signal that the safest thing for rich folk to do with their money was to collect rent on it from taxes on trade. Today plenty of money is wasted on research that does not develop, and plenty of discoveries are made without the application of much money. When Mark Zuckerberg invented Facebook in 2004 as a Harvard student, he needed very little R&D funding. Even when he expanded it into a business, his first investment of $500,000 from PayPal founder Peter Thiel was tiny compared with what entrepreneurs needed in the age of steam or railways.

Intellectual Property?

Perhaps property is the answer. Somebody will not invest time and effort in planting a crop in his field if he cannot expect to profit from it, a fact that Stalin, Mao, and Robert Mugabe learned the hard way. Surely nobody will invest time and effort in developing a new tool or building a new kind of organization if he cannot keep at least some of the rewards.

Yet intellectual property is very different from real property, because it is useless if you keep it to yourself, and an abstract concept can be infinitely shared. These features create an apparent dilemma for those who would encourage inventors. People get rich by selling each other things (and services), not ideas. Manufacture the best bicycles, and you profit handsomely; come up with the idea of the bicycle, and you get nothing because it is soon copied. If innovators are people who make ideas, rather than things, how can they profit from them? Does society need to invent a special mechanism to surround new ideas with fences, to make them more like houses and fields? 

There is little evidence that patents really drive inventors to invent. In the second half of the 19th century, neither Holland nor Switzerland had a patent system, yet both countries flourished and attracted inventors. The list of significant 20th-century inventions that were never patented includes the automatic transmission, Bakelite, ballpoint pens, cellophane, cyclotrons, gyrocompasses, jet engines, magnetic recording, power steering, safety razors, and zippers. By contrast, the Wright brothers effectively grounded the nascent aircraft industry in the United States by enthusiastically defending their 1906 patent on powered flying machines.

Intellectual property can help. A patent can be a godsend to a small firm trying to break into the market of an established giant. In the pharmaceutical industry, where government insists on a massively expensive regime of testing for safety and efficacy before a product launch, innovation without some form of patent would be impossible. But modern patent systems are too often a gauntlet of phantom tollbooths, raising fees from passing inventors and thus damaging enterprise. And intellectual property does very little to explain why some times and places are more innovative than others.


Governments can take credit for a list of big inventions, from nuclear weapons to the Internet, from radar to satellite navigation. Yet government is also notorious for its ability to misread technical change. In America a truly breathtaking outburst of government-led idiocy appeared in the 1980s under the name of Sematech. Based on the premise that the future lay in big companies manufacturing memory chips (which increasingly were being made in Asia), it poured $100 million into chip manufacturers on the condition that they stop competing with each other and pool their efforts to stay in what was fast becoming a commodity business. As late as 1988, industrial planners were still criticizing the fragmented companies of Silicon Valley as "chronically entrepreneurial" and incapable of long-term investing.

There are some things, like large hadron colliders and moon missions, that probably no private company would be allowed by its shareholders to provide, but are we so sure that even these would not catch the fancy of a Buffett, Gates, or Mittal if they were not already being funded by taxpayers? Can you be sure that if NASA had not existed, some rich man would not by now have spent his fortune on a man-on-the-moon program for the prestige alone? Public funding crowds out the possibility of knowing an answer to that question.

A large 2003 study by the Organization for Economic Cooperation and Development concluded that government spending on R&D has no observable effect on economic growth. Indeed, it "crowds out resources that could be alternatively used by the private sector, including private R&D." Governments have almost completely ignored this rather astonishing conclusion.


It is the ever-increasing exchange of ideas that causes the ever-increasing rate of innovation in the modern world.

Innovators are in the business of sharing. It is the most important thing they do, for unless they share their innovation it can have no benefit for them or for anybody else. And the one activity that got much easier to do after about 1800, and has gotten dramatically easier recently, is sharing. Travel and communication disseminated information much faster and further. Newspapers, technical journals, and telegraphs spread ideas as fast as they spread gossip. In a recent survey by the economists Rajshree Agarwal and Michael Gort of 46 major inventions, the time it took for the first competing copy to appear fell steadily from 33 years in 1895 to three years in 1975. And the speed has increased ever since.

When Hero of Alexandria invented a steam engine in the first century A.D. and employed it in opening temple doors, news of his invention spread so slowly and to so few people that it may never have reached the ears of cart designers. Ptolemaic astronomy was ingenious and precise, if not quite accurate, but it was never used for navigation because astronomers and sailors did not meet. The secret of the modern world is its gigantic interconnectedness. Ideas are having sex with other ideas from all over the planet with ever-increasing promiscuity. The telephone had sex with the computer and spawned the Internet. 

Technologies emerge from the coming together of existing technologies into wholes that are greater than the sum of their parts. Henry Ford once candidly admitted that he had invented nothing new: He had "simply assembled into a car the discoveries of other men behind whom were centuries of work." Inventors like to deny their ancestors, exaggerating the unfathered nature of their breakthroughs, the better to claim the full glory (and sometimes the patents) for themselves. Thus Americans learn that Edison invented the incandescent light bulb out of thin air, when his less commercially slick forerunners, Joseph Swan in Britain and Alexander Lodygin in Russia, deserve at least to share the credit.

End users, too, have joined in the mating frenzy. Adam Smith recounted the tale of a boy whose job was to open and close the valve on a steam engine and who, to save time, rigged up a device to do it for him. He no doubt went to his grave without imparting the idea to others, or would have had it not been immortalized by the Scottish sage. Today he would have shared his "patch" with like-minded others on a chat site and eventually gotten credit for the innovation in his own Wikipedia entry.

We may soon be living in a post-capitalist, post-corporate world where individuals are free to come together in temporary aggregations to share, collaborate, and innovate, and where websites enable people to find employers, employees, customers, and clients anywhere in the world. This is also, as the evolutionary psychologist Geoffrey Miller reminds us, a world that will put "infinite production ability in the service of infinite human lust, gluttony, sloth, wrath, greed, envy, and pride." But that is roughly what the elite said about cars, cotton factories, and (I'm guessing) wheat and hand axes too.

Were it not for this inexhaustible river of invention and discovery irrigating the fragile crop of human welfare, living standards would stagnate. Even with population tamed, fossil energy tapped, and trade free, the human race could quickly discover the limits to growth without new knowledge. Trade would sort out who was best at making what; exchange could spread the division of labor to best effect, and fuel could amplify the efforts of every factory hand, but eventually there would be a slowing of growth. A menacing equilibrium would loom.

In that sense, Ricardo and Mill were right. But so long as it can hop from country to country and from industry to industry, discovery is a fast-breeder chain reaction; innovation is a feedback loop; invention is a self-fulfilling prophecy. Equilibrium and stagnation are not only avoidable in a free-exchanging world. They are impossible. 

Matt Ridley ( is the author of The Rational Optimist, from which this article is adapted. Copyright © 2010 by Matt Ridley. Reprinted by arrangement with Harper, an imprint of HarperCollins Publishers.

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  1. "The telephone had sex with the computer and spawned the Internet." An interesting image. And the jet engine was never patented because the British government stole it from Frank Whittle and forced him to give away all his ideas for free.

    1. I like that idea. Maybe I should implement it. You know, to save the economy. Because I really want to do stuff like that.

    2. Not enforcing somebody's patent with violence doesn't count as forcing somebody to give their ideas away for free. Giving somebody a patent forces others to pay extra for a product. People don't buy ideas, they buy products.

      1. how many drugs do you think would be created without patents?

        1. Because of the unnecessary government regulations surrounding the production of drugs, I'd say not many. However, that's a different situation all together.

        2. Sans the endless and usually meritless regulations and testing required by the FDA that cost billions - Lots. I don't disagree with patents per se, but the need for them would be decreased greatly without the "foot" of GovCO on the neck of companies willing to take the risk to develop them. Also, the patent process itself is often a joke, especially when it comes to biotech - I know firsthand. You may not even need to prove your design works to patent something and could eventually put the kibosh on some reserach or development that is actually closer to achieving what you patented.

          1. I actually like those onerous Government regulations on new drugs. We're starting to find all sorts of neat things happening to our ecological systems because of all the drugs flushed down the toilet, etc. Undescended testes, disproportionate rates of man-boobage, cancer, etc. Now, I don't imagine some FDA test is going to catch everything, but running an ongoing experiment on the ecosphere seems like a way to destroy our "natural capital".

            My principal problem with this article is that this guy thinks good can only come from, well, "goods". He can't posit a good held in common, free, owned by no one--like a clean environment-- as an advance. If it's not a product, birthed by the lofty rhetoric of creative destruction, it doesn't receive his benediction. Frankly, we're enslaved by innovation--it's an unending treadmill. But the big screen TVs, smart phones, virtual worlds, exciting pills and new financial instruments don't really seem worth it anymore. Maybe it would be better if the rate of innovation would let up. Can't we just let the Chinese get their economic rocks off and drop out of this breathtaking race to bionic oblivion? Or at least invent/found an island where some of us can refugees from nonsense can relocate? Not all of us want to become cyborgs in order to compete for a list of futile plastic prizes.

            1. "Now, I don't imagine some FDA test is going to catch everything, but running an ongoing experiment on the ecosphere seems like a way to destroy our "natural capital""

              This is really a discussion for another thread, but I think that society is more than willing to make the trade off.

              1. Plus you are getting outside of the discussion of intellectual property. You are talking about environmental regulations. Like I said, we could get into a long fight over whether or not the government should regulate and control anything that might have a small statistical effect on anything, but I don't feel like getting into it now.

      2. Ideas are products. Ideas are created by the application of mental effort to the task of fulfilling any purpose a human being ever has. And in the same way that I have a right to the exclusive control of a tangible object that I create, I have a right to the exclusive control of the ideas I create. Patents are a recognition of that right, in the same way that a deed is recognition of my right to tangible property.

  2. The pooh-poohing of the impact of the scientific revolution of the 17th century on the industrial revolution of the late 18th and early 19th century is over-emphasized. The radical improvements in the early steam engines, which originally were simply water pumps, was due to deliberate application of Newtonian physics.

    The improvement in textiles (principally cotton) had a less direct link. The basic trick is to turn one crank that turns lots of others, so that one person works twenty spindles instead of one spindle. For that you need lots of cheap, high-quality gears. Where do you get them? From clock and watch makers, who did a booming business, thanks in no small part to Christian Huygens, "the Dutch Newton," who invented, among other things, the pendulum clock, an improved pocket watch, etc., etc.

    I read a great book on the Industrial Revolution, whose title I naturally can't remember, which argued that, in addition to the scientific revolution and increased prosperity based on increasing productivity in agriculture, the industrial revolution occurred in England, and could have occurred nowhere else, because fuel costs in England, in the coal fields at least, were very low, and wages very high. Labor-saving devices are useless when wages are low.

    1. "The radical improvements in the early steam engines, which originally were simply water pumps, was due to deliberate application of Newtonian physics."

      Except scientists weren't creating those things. It was largely uneducated, sometimes illiterate, people who hammered those great innovations together.

      1. Actually it was a combination of skilled craftsmen and mechanics (including James Watt and Stephenson) who created these innovations in combination with scientific theorists. Hardly illiterate gumbys (see Monty Python), these were smart guys who rose from a variety of backgrounds before the age of specialization. There were exposed to ideas (of Faraday. Humphrey Davey, Black's law) through popular demonstrations often funded by -- wait for it -- the UK government. It's true that the post-Enlightenment explosion of innovation (in steam, electricity, chemistry) coincided with the market- driven rise of the middle class at time (in the UK) that encouraged and rewarded the exchange of ideas and practical experimentation. Not a nanny state that enables (if not celebrates ignorance) and lack of accountability. See Paul Johnson's 'Birth of the Modern' for the inspiring story of the former. See Theodore Dalrymple's writing at the City Journal for a sad description of the latter -- which seems to apply as much to the U.S. as the U.K.

    2. I read a book entitled "A Farewell to Alms," which basically explodes almost every theory of why the Industrial Revolution occurred including the one that you mentioned. I don't remember exactly what was said about energy prices, but real incomes for laborers were actually higher in England in centuries previous to the industrial revolution. The author of AFTA believes that the industrial revolution occurred for largely cultural reasons. It is really a great read.

      1. RE: A Farewall to Alms - the book forces an elaborate argument: the Industrial Revolution was genetically induced after centuries of the rich outbreeding the poor in England.

        It's been thoroughly derided by economists, not because of its thesis, but because of the dubious support for it, although it is practically impossible to defend such an argument which proposes a sufficiently biological cause when there exist enumerable factors involved. See a good example of the criticism:

    3. England led the industrial revolution because only a generation or two before the Printing Press Information Revolution brought literacy to the crafts producing classes in England and other Protestant countries.

      This is not the same as Max Weber's thesis that Protestantism itself is responsible for capitalism. That argument initially looked good because the Protestant countries did were more competitive than the Catholic countries.

      But looking at the information revolution of the day - the printing press ? shows that initially presses were spread across Europe but with the Reformation and the Inquisition that changed. In Catholic countries everything that was printed was reviewed by the Catholic Church and only printers who conformed to Catholic Doctrine were permitted to stay in business.

      As a consequence of these two positions, printers moved to the Protestant countries - notably the Spanish Netherlands (Holland) and from there to England - there was, therefore a greater number of printers per capita than in Protestant countries. This resulted in a competitive economic environment so that printers printed everything they could to gain market (pornography, music, playing cards, broadsides, children's books, business manuals etc) the Protestant countries became print intensive in the same way as the US is TV intensive.

      Ordinary people began to learn to read and these were the people who synergistically combined their knowledge of their craft (weaving, shoe making, felt making etc) with their ability to read and keep books. They invented the first "putting out systems" and the first pre-mass production systems because they knew how to track without having to live with their workers.

      Thus, it is not the religion per se but access to literacy and numeracy by the commons that leads to capitalism in Protestant countries. The commons in the Catholic countries were not encouraged to learn to read and keep books and their culture was not print intensive.

      So, it stands to reason if you have a population of 1000 people and in one country 30% are literate and similar country where only 10% are literate. The country with a 30% literacy rate will do better ? be more innovative, and better able to create new ways of doing things. This is especially true when the country with low literacy that literacy is limited to the upper classes and the country with high literacy ordinary people learn to read.

      Much of the above is from my book in progress: "Information Revolutions: Hunter/Gatherers to Internet 2.0" being previewed on my website.

  3. Even with population tamed

    By a baffling coincidence, the whole above-described wave of scientific and technological innovations coincided with unprecedented geographical expansion of and population growth within the then most scientific and technological societies.

    If we didn't know better, we might think people did all that shit, and that it's a good idea, probability-wise, to have a whole lot of them around, doing things.

    But you mean darkies, right? Yeah, "tame" those.

  4. "The global nut bowl has yielded ever more..."

    Don't have to look far to know that.

  5. Anyone who passes up cashews in favor of pecans cannot be taken seriously.

    1. get off the drugs hippie!

  6. Their pessimism is coming due. However, the diminishing return are due to the ever-expanding state, which is like a giant tapeworm. It feeds and breeds, hidden, while its effects continue to malnourish once great economies. Economic quacks then pass the blame on to bad blood, and prescribe leeches, or to the healthy diet the patient had been eating, and prescribe a fare of pure sugar.

  7. What's wrong with Brazil nuts? Okay, a pain in the ass to crack but still quite tasty. And what's with the pejorative??? My dad taught me that one.....

    1. Full of selenium too, bitches

      1. Great for killing aliens!

  8. Why has innovation become routine?

    I think there's no one answer. A lot depends on what kind of innovation you look at. Someone probably used trial-and-error to invent the horse collar, which revolutionized world trade. Once cans were invented, someone had to invent a gizmo to open them. On the other end of the scale, Borlaug's green revolution couldn't have happened in someone's garage.

    Left out of the article is serendipity, where a useless discovery gets out of the box in unintended ways. (The not-very-sticky glue that ended up on post-it-notes.)

    Going along with the "Ideas having sex" theme, there's also the concatenation effect. Innovation usually requires several different factors to converge. The most significant innovations occurred when a need, an idea, the necessary technology, funding, production, and communication coincide. An example is John Browning's revolution of the firearm c 1890-1910.

  9. Just a fun fact I'd like to throw in.

    The series of experiments that led to the discovery of the electron, in today's dollars, would have cost about $100,000.

    The Large Hadron Collider, which we are building in the hope of catching the faintest whiff of a Higgs Boson, will cost us more than $10 billion.

    Science may or may not be moving faster, but we sure as hell are throwing enormously more resources at it. "Diminishing returns" has clearly set in; the only question is whether we can accelerate investments even faster.

    1. According to "Sex, Science, and Profit," R&D spending might top out at about 6% of GDP, at which point each additional percent of GDP dedicated to R&D will provide less benefit than it costs. Of course that is a purely mathematical analysis, and since GDP is ever increasing, innovation would still continue to expand.

      1. I find your faith that GDP will continue to grow endlessly rather amusing. We live in a finite world, and have depleted a lot of our resources. Fifty years from now, population will be peaking and working-age population will start to decline. The natural resource base which underlies our wealth will also be under severe stress. Almost all nations will have will be "advanced" economies, which even now only show slow growth.

        From the inside of the R&D scene, it is pretty obvious thta the ROI on R&D is decreasing and that corporations are losing interest in it. I have a hard time seeing how it is going to increase as a share of GDP.

        1. Have there ever been times in the past where ROI stagnated for years before, suddenly, some genius discovers a way of turning a bunch of useless stuff into a resource? That's kind of the story of human history Chaddy-poo!

        2. There are all sorts of different kinds of R&D. It's not just scientists sitting in a laboratory discovering things and doing research. A lot of big innovations happen on the factory floor during the day to day activities of less educated workers.

          A huge percentage of the global workforce is working far below their output potential at the moment, and there is still a lot that can be automated. Humanity has been depleting resources for thousands of years and it hasn't stopped us yet. I find your pessimism to be the most illogical.

    2. I find most quantum physics to be poppycock. Wait, I think I mispoke, is a poppycock a subatomic particle?

      1. it's what poppies use to procreate...

  10. Just on a tiny point of fact, and much as I hate pedantry, the steam engine was invented by a Scotsman, not in "England". Matt Ridley should know this!

    1. Sorry, every American considers the UK "England."

      1. Our bad. lol.

    2. James Watt was a Scot, but he developed his engine in Soho, England.

  11. Ridley says "No place remains for long the leader in knowledge creation."

    He's wrong. What happened on July 4, 1776 did more to accelerate innovation than anything else in world history, by far.

  12. "Patents and copyrights are the legal implementation of the base of all property right; A man's right to the product of his mind." Ayn Rand
    Without the mental effort of inventors the products of their minds will never be enjoyed by consumers. Sufficient patent laws are imperative to protect the products of the inventor, otherwise the inventor has no reason pour effort into an idea that anyone can leech off of. The destruction of patent laws would mean intellectual communism with the effort of the inventor being sacrificed for the "public good."

    Ridley clearly has zero understanding of US patent laws because his main argument against them is that patents "surround new idea's with fences," which is a, at best, severely misguided argument. Once a patent is approved anyone can improve upon it, patent the improvement and then manufacture the product, etc. He also ignores that patents have a life of only 20 years after which they enter the public domain. Without patents individuals and companies have no incentive to develop investment intensive products such as pharmaceuticals, chemicals, electronics, etc. The most important defense of patents is the protection of individual property rights. If an idea is not the property of the individual who originated it, then whose property is it? The collective? If someone buys land on which there are a billion barrels of oil, but does not drill for it, does the government or another person or company have the right to steal this individual's property. No, of course not. Patents must be granted and enforced to protect individual property rights for property rights are the essence of capitalism.
    I wish would have more reason and less altruism.

    1. Beat me to it Joe. Great post.

    2. I disagree, Joe. Most patents are absolute crap, and consist of nothing more than someone claiming the universe after having combined two components in a manner obvious to anyone who knows anything about the topic. Unfortunately, this does not include the vast majority of patent reviewers.

      I once found four patents that claimed the same molecule, despite it having appeared in the literature years before any were filed. None of the patents, in my opinion, were non-obvious. Rather, someone merely took an X and a Y and combined them in ways established decades ago. They then claimed every possible combination of X and Y variants, for any application, of course. And never mind that some of the XY combos they made already appeared in the literature or other patents, because they happened to be made by different hundred-year-old chemistry, so its ok, right?

      1. What you need to keep in mind with chemical syntheses is that the steps taken to produce a chemical, including purification, are the entire battle of chemistry. Although the four patents produced the same chemical the steps taken to synthesize that chemical were probably distinctly different. Each probably used different reagents which would undoubtedly effect the cost efficiency which is why 4 distinct patents were awarded. Trust me, I'm a chemical engineer.
        As far as a patent being "obvious to anyone who knows anything about the topic," then if it is so obvious then why hasn't anyone already patented it?

    3. Wow, so if you disagree with patent protections, than you're a collectivist? Ideas are an infinite resource that cannot be depleted by overuse. By utilizing your idea, I don't negate your ability to utilize it as you always had, so it is hard to argue that utilizing an idea can be considered theft.

      You say that anybody can take somebody else's idea and improve upon it and then patent the new idea, but there is plenty of anecdotal evidence, such as with Watt's steam engine, that individuals with patents are able to use litigation against individuals who improve upon their ideas and attempt to patent it as their own. A substantial body of literature has been written on the subject of patents, and I don't think that the issue is as simple as you try to make it. Sorry.

    4. Thus spake the patron goddess, Ayn Rand, she who illuminated the masses with the gospel of supply and demand...

    5. "The most important defense of patents is the protection of individual property rights. If an idea is not the property of the individual who originated it, then whose property is it?"

      To me, it's not really property if somebody can't deprive you of its use by utilizing it themselves.

      " If someone buys land on which there are a billion barrels of oil, but does not drill for it, does the government or another person or company have the right to steal this individual's property. No, of course not. "

      If somebody else came along and drilled that oil, they would be trespassing. Also, their use of the oil would be depriving you of use of something on your physical property. If I copy your invention, I am in no way depriving you of use of your own invention. How is the example you've given analogous to the patent issue?

      1. "To me, it's not really property if somebody can't deprive you of its use by utilizing it themselves."

        "If I copy your invention, I am in no way depriving you of use of your own invention."

        Ahh, but you are neglecting the motive for duplication, which is generally profit, and thus the logic of IP law pertaining exclusively to commercialization. Duplicating an invention and entering it as a competitor in the marketplace IS depriving the inventor of his earnings. Think of it as a wage garnish.

    6. "The destruction of patent laws would mean intellectual communism with the effort of the inventor being sacrificed for the "public good.""

      Actually patents award monopoly profits to innovators as an incentive for innovation making patent driven innovation a "public good." I repeat, the whole idea of patents makes innovation into a public good. However, innovation occurs unpatented all of the time. It seems to me that business will still have plenty of incentive to innovate to keep a leg up on the competition.

      The only cases where patents make economic sense is in the situation in which the government places a heavy, long term regulatory burden on innovation making monopoly profits necessary to incentivize innovation. Structural changes could have the same effect. There is so much literature on this subject, I could go on and on and on.

      1. "Actually patents award monopoly profits to innovators as an incentive for innovation making patent driven innovation a 'public good.' I repeat, the whole idea of patents makes innovation into a public good."

        "Government has no other end, but the preservation of property." -John Locke

        By induction, does government make all commerce a public good then?

        1. I think Locke is a bit outdated, don't you? Property to him was African slaves. Patents create monopolies, and if I am not mistaken, that contradicts the operation of a free market.

    7. It has been argued by North and Thomas in their book, "The Rise of the Western World," that intellectual property was invented after the rationalization of land ownership. Where land was able to be alienated (sold away from the owning family) people got the idea that things that were intrinsic to the individual could be sold. Before that it was assumed that family land (or for that matter land tenancy, or peasant holding, or serfdom on a given estate) was part of belonging to that particular family.

      So, if you can have the notion that things that are intrinsic can be sold then intellectual property can also be sold.

      I would offer, however, that intellectual property was invented by printers. With the invention of the press it was possible to produce books so easily and they tended to look similar. It wasn't as easy to know one book from another. So, printers began to put title pages on books and to put the author's name on that page. This was probably for their own convenience so they would know where to get more books to print.

      Much of the above is from my book in progress: "Information Revolutions: Hunter/Gatherers to Internet 2.0" being previewed on my website.

  13. Yeah Ridley Yeah!

  14. How does becoming chairman of Northern Rock because your grandfather and father did the same job fit into his views on innovation?

  15. I don't understand why the Author finds Newton's ideas sexually unattractive. If Newton's ideas hadn't gotten out there and bred we would not have had two hundred years of little mechanical, civil, and structural engineers running around designing things.

    I suspect the author's ideas have been having sex with ideas from humanities departments and not from the Sciences. If he got a group thing going with the Physics and Math departments then he might reach the point where he fully realizes that Einstein's ideas got together with Leo Szil?rd's ideas and Robert Oppenhiemer's ideas and produced the cluster **** known as the atomic bomb.

  16. Many of the ideas discussed in this article seem rather similar to those discussed in David Warsh's book Knowledge and the Wealth of Nations, which explored Paul Romer's work on increasing returns.

    1. because they are talking about the same economic theories.

  17. Get real...

    The planet is over-

    Innovation, prosperity,
    (technology, progress)
    will not save the day...

    What worked in the past
    doesn't guarantee success
    in the future...

  18. I think it is sad that the author of this article concluded that the exchange of ideas was the most important aspect of innovation, instead of the creation of ideas. How can you exchange something you do not have? The workshop tinkerers and non-academic businessmen who have been changing the world over the last few centuries did so by THINKING UP new/better ways to do things. The source of continued innovation and increases in human prosperity is the creation of ideas, and more fundamentally reason and the mind.

  19. This article is just showing up on what was all his ideas regarding this kind of topic. I see that everyone got confused with his main point in making this article or blog.

  20. Yawn. Not even a mention of Robert Solow who discovered the offsetting impact of technology on diminishing returns in the '50s.

  21. Matt Ridley is a brilliant "idea" guy, who now seems to be infatuated with the divine nature of the market place. As much as I admire Ridley, and agree with his inference that in the end, everything human is ultimately tied to economics, his statement that "We may soon be living in a post-capitalist, post-corporate world" makes me cringe. Huge corporations and their massive wealth and influence in modern America has allowed them to rig every aspect of the system in their favor. They have become super organisms that will devour anything in their path, including people, ideas, and democracy itself, to perpetuate their growth and survival. I am happy that Ridley has a new set of ideas to play with, but his view of economics is naive at best, free market fundamentalism at it's worst.

  22. This was a nice condensation of ideas. I'm not sure, though, that placing such emphasis on exchange is wise. There are lull periods even in this "chain reaction" system Mr. Ridley describes, during which reactionary elites form and try to impose an equilibrium advantageous to themselves. Abstracting too much from politics and power can lead to serious oversights and mistakes, such as took hold in the neo-conservative movement when it adopted an "End of History" faith in the inevitability of the progress of democracy.

    And if we are to take the analogy (for it is no more than that) to evolution seriously, then we must acknowledge that exchange not only creates a limitless expanse of improvement in human welfare, it also creates losers who probably wish the world would stop spinning for a while. The tension between the Going Forward and the Left Behind is a political problem of the first order -- not to mention the urge of played-out plutocrats to create a world in which their descendants can remain on top; preventing them from seeing their common cause with the 'peasantry' is a fundamental goal of a democratic culture.

    The transformation from being of the class of Going Forwarders to that of Left Behinders is built into human existence: we get old. This is the microcosm from which our political problem springs. The old and left behind require certain kinds of compensation: for example, a culture into which they can pour feelings of gratitude and which ratifies the meaning they've attached to their life story.

    Mr. Ridley's is ultimately an unbalanced view of the world. It places too little emphasis on the political task called up by the global system of exchange he admires.

  23. It looks like things turned around now that knowledge is everywhere inventions and innovation creates and force (or look for) necessity.. we know what you need..

  24. Matt, you're missing something fundamental here: it is precisely declining returns (as understood by Adam Smith) that fosters, indeed forces, innovation.

    Take computers as the obvious example of the last three decades. If you were a manufacturer of computers in any given year, you'd find that the price and profit margins of your product line would go down relentlessly as other manufacturers found ways to make them cheaper, or better. You'd be forced to make better, cheaper, faster computers in order to protect against declining margins -- exactly what happened.

  25. Here is the real answer for the paradox

  26. Big irony Matt every time you mention silicon valley: the computer is a perfect counterexample to any argument that "Few ... inventions ... owed anything to theory.". You should read Engines of Logic (by Martin Davis), a lovely book that traces the development of the computer out of pie-in-the-sky thinking of logicians (e.g. Goedel, Turing) working at the intersection between mathematics and philosophy. Ideas, when they are given the chance, display a motive force of their own, whose outcomes often surprise. No argument that their power arises from democratisation etc. But sometimes some incubation is needed at first.

  27. Oven; Bow and Arrow; Farming; Metal; Zero; Printing Press;...Credit Card; Walkman.
    Do I detect a hint of diminishing returns?

  28. One might ask if the invention of the atomic bomb was a pecan or just nuts.

  29. I'm curious what the basis for the list of "20th-century inventions that were never patented" is, because that list is completely, utterly wrong.

    Cellophane is registered with the USPTO as #1266766 (look it up via pat2pdf), Bakelite is #1233298, zippers are contested because of terminology and structure differences but there's at least two candidates, and the others are covered by dozens if not hundreds of separate patents.

    Did you perhaps mean that in some cases these patents were less than perfectly enforced? This is also generally not the case, but is somewhat more defendable.

    A few other problems with your supporting evidence. I picked these at random, let me know if you want to do point-by-point for the whole article:
    -The structure of penicillin was determined by crystallography in 1945, not long after its discovery around 1928, and certainly not by the "time bacteria learned to defeat it". The exact mechanism was rigorously shown in a 1980 paper (perhaps what you're referring to, though antibiotic resistance was hardly ubiquitous by this time), but the basic active element (beta lactam) was known independently and synthesized successfully two decades before the discovery of the drug. Any appreciable delays are all attributable to an uneven pace of development for synthetic versus analytical chemistry, and the reliance on other fields for equipment, not some mythical power of the marketplace.
    -Hero of Alexandria was widely published for his time, and cited by many influential arabic texts on mechanics. As you might recall, Egypt's Alexandria was an important trading hub, so it wouldn't be a stretch to imagine that some carts were perhaps manufactured in the area. Additionally, it's unknown if the aeolipile was ever used for a practical purpose (opening temple doors): Hero's Pneumatica doesn't show it as such, and it's not clear if the original design could even generate enough torque. The idea of using it in a cart is absurd, and even the earliest modern steam engines were orders of magnitude more complex. I'm not going to praise to the speed of communication in Roman Egypt (though it was pretty quick for the time), but there are other reasons why we didn't see scores of gladiators riding steam locomotives.
    -Archimedes, another near-legendary engineer of antiquity, constructed a number of machines (such as the ship lift) that were not recreated until essentially the present day; to say that the machines of industrializing England would not have surprised him is pretty high praise.
    -and so on

    Apparently "Reason" does not require "Knowledge".

  30. The 'gyroscope' was patented, and as an aside, the expert witness in the case with Sperry for the "north seeking gyroscope" or a method of achieving a north seeking gyroscope as

    Albert Einstein, of the SWISS patent office. (you know that country you said did not have patents).

    There are many patents on navigational gyro's, but to talk about a patent on the 'gyroscope' is wrong.

    What is a 'gryrscope'?

    Its like saying "i have a patent on the megnetic field".

    Gyroscopic effect is the preservation of angular momentum, a wheel is a gyroscope, (if it is spinning) if it is not spinning its NOT a gyroscope, ie, it does not exihibit gyroscopic action.

    You cannot patent 'the gyroscope', you can patent a device that uses that gyroscopic effect to achieve a particular result.

    (ie, point north).

    Thats why we dont patents on "effects", we have patents on applications that use that effect.

    (in this case the gyroscopic effect).

    As for innovating stopping, your joking right !!.

    You must not read much history, or understand that the rate of technical advancment is exponential, there are more engineers and scientists living and working today that the total number throught the last century.

    You say ideas are not use unless you tell people about them, is wrong.

    You can have a great idea, or a great invention, you can create a 'black box' that performs your invention, and you can keep your idea, and profit from it as well.

    Its called proprietary information, and if it cannot be protected by patents, it is protected by copyright, or protected by trademark, or protected by secrecy.

    Or license, or some other means, but it IS protected.

    So I have to disagree with all your conclusions, and wonder why you would make such slaims ?

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