Convergences

Speaking of Innovation . . .

The OSTP Strategy for Innovation is one approach: grand plans; deadlines; quotas; let no trough go unfilled; government micromanagement.

In a fascinating article in City Journal, George Gilder describes a different route: how Israel's tech industry was in a decade transformed from a stagnant socialist backwater into a leader in invention:

Israel ha[s] achieved an economic miracle . . . . As late as the mid-1980s, Israel was a basket case, with inflation rates spiking from 400 percent to nearly 1,000 percent by early 1985. As recently as 1990, Israel was a relatively insignificant technology force, aside from a few military and agricultural initiatives. Yet in little more than a decade, the country has become an engine of global technology progress.

How?  Read the article, or the longer version in Gilder's new book The Israel Test. Government policies were important, but not in the sense that the transition was micromanaged. It could occur only because policies that were blocking the creative genius of the society were reversed, largely through the efforts of Netanyahu abetted by U.S. Treasury Secretary John Snow.

It is a great story, and it has profound political implications. Who knew that:

Between 1967, when Israel took over the West Bank and Gaza Strip, and 1987, when the first intifada erupted, those two territories were one of the fastest-growing economies on earth. GDP surged 30 percent a year for a decade, the Arab population nearly tripled, six new universities were launched, and Arab longevity jumped from 43 years to 74.

The article concludes:

[T]rue peace—and the promise of a decent life—lies waiting to be picked up by those Palestinians and Israelis who are willing, and now increasingly able, to invest in creation over destruction.

On Order: George Gilder

Or, rather, already bought via Kindle: The Israel Test.  For 20 years, ever since Microcosm (and some would go back earlier, to Wealth & Poverty) Gilder has been a provocative and prescient commenter on the tech scene. For a preview of this new work, see his piece in The American last Monday: "Capitalism, Jewish Achievement, and the Israel Test."

Sample:

In a dangerous world, faced with an array of perils, the Israel test asks whether the world can suppress envy and recognize its dependence on the outstanding performance of relatively few men and women. The world does not subsist on zero-sum legal niceties. It subsists on hard and possibly reversible accomplishments in technology, pharmacology, science, engineering, and enterprise. It thrives not on reallocating land and resources but on releasing human creativity in a way that exploits land and resources most productively. The survival of humanity depends on recognizing excellence wherever it appears and nurturing it until it prevails. It relies on a vanguard of visionary creators on the frontiers of knowledge and truth. It depends on passing the Israel test.

Israel is the pivot, the axis, the litmus, the trial. Are you for civilization or barbarism, life or death, wealth or envy? Are you an exponent of excellence and accomplishment or of a leveling creed of frenzy and hatred?

Accord, as the legal profs say, from V. D. Hanson, writing from Venice:

Venice . . . was malarial, without natural harbors or any readily identifiable deep ports or surrounding cliffs. It is instead a conglomeration of over 100 islands in the swamps of an Adriatic lagoon. Yet between 1200 and 1600, Venice was in many ways the preeminent city of the world. People—not oil, coal, timber, or farmland—matter most.

European Tour

Last January, the EC reiterated its “preliminary view that Microsoft’s tying of its web browser Internet Explorer to its dominant client PC operating system Windows infringes the EC Treaty rules on abuse of a dominant position (Article 82).”

Microsoft responded by suggesting that it could ship Windows 7 with no browser at all, a move which produced another frown from the EC in June: “In terms of potential remedies if the Commission were to find that Microsoft had committed an abuse, the Commission has suggested that consumers should be offered a choice of browser, not that Windows should be supplied without a browser at all.”

Since it is a foregone conclusion that “an abuse” will be found, the import of this response was that Microsoft’s proposal was not acceptable. Now, the EC has announced that it has received additional proposals from Microsoft along lines suggested by the EC – that Windows 7 purchasers get a menu of browser options, not a blank screen. “This followed extensive discussions with the Commission which centred on a remedy outlined in the January 2009 Statement of Objections (see MEMO/09/15) whereby consumers would be shown a "ballot screen" from which they could – if they wished - easily install competing web browsers, set one of those browsers as a default, and disable Internet Explorer.”