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Innovation and Letting a Thousand Nations Bloom

May 8, 2009

We welcome back Michael Strong as a guest blogger for a series of posts. He is the CEO and Chief Visionary Officer of FLOW, Inc., and the author of Be The Solution: How Entrepreneurs and Conscious Capitalists Can Solve All The World’s Problems.–Editor

The primary reason that I was converted from left-liberalism to libertarianism was due to the unambiguous superiority of, in Hayek’s terms, “the creative powers of a free civilization” as compared to the public choice process. Once I learned to see how the cumulative effects of countless innovations takes place by means of a massive selection process, and that the necessarily cumbersome public choice process couldn’t possibly create the fantastic cumulative innovations that we see taking place through free enterprise, then “libertarianism” became a no-brainer, a necessary moral cause.

My favorite example of the comparison is the fact that by the mid-1980s a University of Chicago computer scientist could point out that any decent university in the U.S. had more computing power than did the entire Soviet Union, despite the fact that the Soviet Union had some of the best mathematicians on earth and had dedicated significant government resources towards developing a supercomputer to compete with the Cray. When one thinks of the thousands and thousands of incremental innovations that resulted in the U.S. IT industry, each of which not only required a scientific and engineering innovation, but also an entrepreneurial innovation to create low-cost, high quality components at scale, one realizes that it is absurd to expect teams of smart, frightened mathematicians in Soviet labs to compete with the U.S. entrepreneurial innovation machine. They didn’t stand a chance, and their obvious failure was not because they weren’t smart enough, but it was because there is no way that one deliberate government-mandated initiative (or four, or five, or twenty, or fifty government-mandated initiatives) can compete over time with a rich, diverse, open entrepreneurial ecosystem.

It is from this perspective that I am most excited by this blog’s concept of “Letting a Thousand Nations Bloom” and, even more so, by the concept of “Towards a Cambrian Explosion in Government.” To date, most critics of this blog seem to be missing this key conceptual frame. The point is not so much whether or not libertarians should give up entirely on electoral politics, or whether or not a “libertarian” state will remain “libertarian,” both of which have been debated here. The real point is more along the lines of “What kinds of legal system innovation will we see once we have a Cambrian explosion in government?” And based on the analogy with the IT industry given above, my bet is the over time, if we truly had a “Cambrian explosion,” we would see truly extraordinary innovations in legal system creation that would result in something analogous to Moore’s law in human happiness and well-being. Moreover, I predict that we will be as poor at predicting these outcomes as an intelligent observer in 1900 could have predicted the technological achievements of the 20th century.

Once entrepreneurial forces are released, we will see improvements in legal system innovation that compare in significance to improvements in technological innovation. Not all of these innovations will be in the direction of greater freedom; in many cases we may find that groups of people choose to have combinations of “freedom” and “constraint” that are completely unlike the combinations that we see in the world today. Even the terms “freedom” and “constraint” may come to seem as obsolete as “phlogiston” and “calx” today; we don’t even know if our existing categories will be useful once we see a massive explosion in legal system innovation.

I often describe myself as a “communitarian libertarian” because, unlike most “libertarians,” I’m all for social constraints, as long as people choose them voluntarily. As an educator, I used to believe that there was one right kind of education that everyone ought to have, but over the years I’ve seen individual students who were happiest (and got the best education for them) in military schools, religious schools, Sudbury Valley schools, Montessori schools, Waldorf schools, all male schools, all female schools, regular public schools, and more. Imelda Marcos had 4000 pairs of shoes; why shouldn’t we have more than 4000 different kinds of schools? Some of these schools tightly constrain behavior, and would in no sense be described as “libertarian” with respect to their internal functioning. But as long as the family (in elementary school) or the student (in secondary school) chose the school, and the school seemed to be a good fit, why should any of us criticize the choice any more than we should criticize what beverage someone drinks or what music someone listens to?

There is a booming industry in private communities in the U.S., and in many cases those private communities are highly prescriptive, providing less freedom of choice with respect to how one’s lawn looks, how one paints one’s house, etc. than is the case in non-private communities. It turns out that many people have preferences for community which include some type of uniform norms with respect to the appearance of the community. Again, if we believe that people should be allowed to choose their own intoxicants, why can’t we allow people to pick their restrictive covenants?

Likewise, if we allow a Cambrian explosion in government, we are likely to find many highly restrictive “non-libertarian” communities coming into being – AND THAT IS EXACTLY WHAT WE SHOULD BE HOPING FOR. As long as people are free to enter and exit a community, as long as they are not prisoners, then we should support the creation of radical diversity in legal system creation.

Compare a world in which all the world’s people had access to a significant market in government services with the world in which we live today. At present, the vast majority of the world’s population are, in essence, prisoners of their nation-state. If they are fortunate, they are born into a nation-state that has enough economic freedom to allow them access to a comfortable standard of living. But most of the world’s population are born in nations in which they may expect to be poor (though the booms in India and China are beginning to change that). Only a tiny percentage of the world’s population is really free to reside in the nation-state of their choice; that option is, in some ways, one of the ultimate luxury goods, but even there, the available set of options is remarkably limited.

Moreover, because the barriers to entry are extraordinary, at present the entrepreneurial creation of government is almost impossible (most of the interesting partial exceptions having been noted already at this blog). But just as the great IT innovations did not take place with the first developments in the 20s, 30s, and 40s, so too we will not see the order-of-magnitude improvements in human well-being until we have had a Cambrian explosion in government over several decades.

Hayek famously noted that the Left won because they dared to be utopian. Robert Nozick famously envisioned a libertarian Utopia of Utopias, a vision that libertarians have rarely developed. This blog is the first systematic context in which we have an opportunity to develop such a vision.

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