The Economics of Ideas
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- เผยแพร่เมื่อ 24 ก.ย. 2024
- At the end of our last video, we asked, “What spurs the growth of new ideas?”
To answer that, we’ll tell you two stories.
The first is about a man named John Kay.
He created the flying shuttle, one of the key inventions of the Industrial Revolution. His shuttle improved looms, and made it possible to produce clothes quicker and more cheaply. This allowed larger numbers of people to have new, clean clothes, and it made fashion something that was no longer just for the rich. But what did he get for his efforts?
Well, the weavers who were threatened by his invention broke the improved looms and his house was burned down. He eventually fled to France, fearing for his life, and eventually died there, a poor man.
Our second story paints a completely different picture.
It’s about a man almost everyone knows: Steve Jobs.
Like Kay, Steve Jobs was also an innovator, pioneering products like the iPod, iTunes, iPhone, and the iPad. For his efforts, he earned not only money but recognition as well. Unlike John Kay, Steve Jobs became an icon, celebrated for his achievements in the world.
Why such a stark difference between these two men?
When we examine the differences between John Kay and Steve Jobs, we’re also looking at the thing that either dooms an idea or allows it to prosper. This vital factor is institutions, which serve as the soil where ideas are planted.
Depending on the quality of said soil, the ideas either take root, or they shrivel into nothingness.
To understand how this is, think of the institutions in the United States today.
The US has institutions that encourage the germination and growth of ideas. If you’re an entrepreneur, America has incubators and investors, ready to fund your idea if it’s a good one. In the US, you also have recourse to laws that protect your idea, not to mention a culture that celebrates innovators. And, if your idea’s a good one, the market will handsomely reward you.
To tell you the truth, John Kay could only have dreamed of institutions like the ones we have today.
As you can see, good institutions can mean the difference between an idea withering and an idea thriving.
While it may seem like ideas grow at random, the truth is you need a set of key ingredients, or what we call “institutions.”
In the next video, we’ll see how patents affect the growth of ideas, and we’ll examine the trade-offs between protecting and sharing ideas. Last, we’ll also look at the role the government can play, in providing a stable environment where ideas can flourish.
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The production of new ideas also needs the almost invisible infrastructure of enabling firms; firms that are the first to go in a socialist environment. The entrepreneur needs venture capitalists and salesmen. College age socialists love and admire those "visible" entrepreneurs who brought them things they enjoy but hate those that seem only to profit from activities they don't understand other than the fact that they get rich along with the Jobs and Zukerbergs.
kay was a hero.
really like the logic of those videos! those videos really helped a lot ! Thank u ! :):)
That's why the majority of research are done by the private sector
That's Capitalist nonsense.
The majority of research is done by government institutions, like DARPA, NASA and those under the WW2 NAZI regime.
The Iphone is just a collection of goverment funded science projects clubbed together into one device, as it isn't the goverments job to sell us tat.
GPS and even the internet started as DARPA projects and were both fully functioning military systems before they were allowed into public commercial use.
It is true that Governments have been involved in many modern technologies, but it's false to say that the majority of it is done by governments. Usually the private sector will build upon a technology that was developed by the government and make it better and more economically viable. The Private sector and public sector are not mutually exclusive of one another and both still have to operate within a market paradigm (i.e. capitalism).
"capitalist nonsense" is a silly ad hoc argument against the free market. All advancement of society is based on individuals and groups working to achieve their own ends, even the government operates this way, which is what capitalism boils down to, to over simplify it.
@@therealpapsy That's because the government taxed the money (either directly or through inflation) out of the private sector. How else could a government possible spend money? Keep in mind money is just a medium of exchange. It's the goods and services you exchange it for that matters.
@@YashArya01
err, that was my point.
Are you agreeing with me, or not?
Re: How else could a government possible spend money?
The government produces the money for us to spend, so I'm now guessing you were disagreeing with me; which isn't smart.
@@jordanswaim4586
The majority of important things are produced by the government and government backed institutions/ like universities.
Love this video
i for ideas💡
i for institutions 🎓
I for inventions 🔭
Pushing too far, those ideas lead to society in which people with sociopath like behaviours thrives…
@MaitreJedi19 You say that, yet use a computer or cellphone and the Internet. On sociopathy, it's rare, should be diagnosed professionally, and not something the afflicted chose.
John kay should've produce that machine to sell.....what happened to him was very sad.
You Sir claim "American institutions creates good incentives to pursue that idea" unfortunately like with the example of John Key they don't if it's not in their interest, examples? bitcoin and blockchain tech....
Because those are not good ideas!
@@sirturnables This hasn't aged well has it : )
Blockchain can reduce corruption in country like India
This is a bit too cheery. The reality is that while the private sector is great at innovation, it's not as good at basic research and invention. This is because incumbent firms have an incentive to only gradually and slowly improve their products and processes to save costs or remain relevant, but they lack incentive to completely destroy their own market by investing valuable time and money into research that, 1. may lead to nothing at all or 2. might lead to the complete replacement of their core business model.
This is where governments come in, or at least where they should. Most of the "amazing" tech we take for granted today in our daily lives is fundamentally dependent on basic and individually unprofitable research that governments funded, and private sector firms or people later came in and combined or innovated upon to put together mass-producible goods and services.
The last few decades of increased levels of patent trolling and the likes is a good example of how market concentration in the hands of a few firms ultimately leads to less research and improvement if left unchecked.
The next video covers this aspect :)
So you were just flexing your ego, right??
Musk for
president!!!