I Heard Ol' Neal Put Her Down

A few weeks ago everyone was linking to this Neal Stephenson essay on innovation, mostly approvingly (I didn't see any disapproving commentary, anyway).

My own thought when I read it was Nehru's infamous (and possibly apocryphal) remark that "dams are the temples of modern India." By which I mean, Stephenson's examples of innovation are projects carried out on an epic scale, with little emphasis placed on their effect on human welfare. One gets the sense that space travel looms far larger to Stephenson than an innovation like oral rehydration therapy.

Stephenson cites the legal system as an impediment to innovation (even making the bizarre claim that minority shareholders would take legal action against a corporation investing in long-term innovation). That makes it all the more puzzling that Stephenson doesn't discuss legal or social innovation. After all, there are innovative ideas for reform of the patent system, and a legal innovation called the business judgment rule shields corporate directors from liability when their decisions turn out to be unprofitable, as long as those decisions met certain requirements.

Admittedly, there's a sense in which an innovation like flexicurity is less impressive than sending a man to the moon, but in many ways social innovations are more complicated and more difficult than massive engineering projects. They are also more crucial to continuing advances in human welfare. If you go to India today, it probably won't even occur to you to visit a dam, but you won't be able to avoid signs of the market and social innovations that have transformed the country.