How Innovation Works (with Matt Ridley)

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00:07 Aaron Ross Powell: Welcome to Free Thoughts. I’m Aaron Ross Powell.

00:09 Trevor Burrus: I’m Trevor Burrus.

00:10 Paul Matzko: And I’m Paul Matzko.

00:12 Aaron Ross Powell: Joining us today is Matt Ridley. He’s the best-selling author of many books, including The Rational Optimist, and The Evolution of Everything. His newest is How Innovation Works: And Why It Flourishes in Freedom. Welcome to the show.

00:25 Matt Ridley: Thank you for having me on the show today.

00:27 Aaron Ross Powell: You released The Rational Optimist in the immediate aftermath of the Great Recession. And now you’re releasing How Innovation Works in the middle of a global pandemic. Have you thought about asking your publisher to maybe improve your sense of timing?

[laughter]

00:44 Aaron Ross Powell: Or just stop putting out books so the world can have fewer disasters?

00:50 Matt Ridley: Exactly. Well, it was quite brave 10 years ago to come out with a book saying the world’s being getting better, and it’s gonna go on getting better, when a lot of people were saying that we were doomed but actually, we had a great decade. Despite all the terrible things that happened, the wars in Syria and Ukraine, the financial crises, all the other things that went wrong in the 2010s, it was a very good decade as far as the world was concerned. In particular, poverty, child mortality, all these kind of things continued to dramatically decline, especially in the developing world. And now we face, as you say, an enormous global crisis that we have no idea how big or how long it will be. And here am I saying how innovation works. But I think it’s quite an important message at this point, because what this coronavirus pandemic shows us quite clearly is that we haven’t had enough innovation. We haven’t improved vaccine development, we haven’t improved diagnostic tests, we haven’t improved the application of digital technologies to tracking and tracing people to nearly enough extent and although we’ve got fantastic genomic tools at our beck and call for sequencing the virus and all these kind of things, we haven’t got enough of it. So if ever we needed a book to remind us of the importance of innovation, this is a good moment to do it, I think. [chuckle]

02:14 Paul Matzko: How did writing these stories in particular, I mean, a lot of them are very technology-focused. We’ll talk about some of that here in a bit. How did it prepare you to think about COVID-19?

02:27 Matt Ridley: Well, I include a number of stories about viruses and vaccines in the book. I have a whole chapter on public health in which I discuss how the idea of small pox inoculation came out of the Ottoman Empire to Britain and America in the early 18th century. And then I discussed the development of polio vaccines and the risks attached to them and the things that went wrong in that program. And then I talk about a lovely story of two women in the American Midwest, Grace Eldering and Pearl Kendrick, who developed the whooping cough vaccine in the 1930s in a very short space of time, around four years. The kind of time it takes us to develop a vaccine today and how they never put a foot wrong, they did everything right, and they never made any money out of it, etcetera and they saved a lot of lives. So there are some very nice stories about how innovative technologies and ideas come along to help with health problems.

03:29 Matt Ridley: There’s also relevant to what we’re doing with social distancing and physical distancing today stories about the chlorination of water to prevent the typhoid epidemic. And one of my favorite stories in my book, actually, I track down the details of why it is that insecticide-impregnated bed nets are a very powerful tool against malaria, which is, it’s probably the technology that saved most lives in the last 20 years really since 2003, when the roll-out of this technology began. It’s responsible for about 70% of avoided malaria deaths, and it’s the main reason malaria deaths are going down now, whether they were going up before 2003. So a really important technology, and just tracking down the experiments that were done in Burkina Faso that made us realize what a good technology this was even though it’s very simple and very cheap. And I call it, it’s a good example of what I call an innovation rather than an invention, because there’s nothing new about the mosquito net. There’s nothing new about insecticides, but bringing them together and making us realize they work even if they’ve got holes in them, that was a crucial insight, was part of the innovation process.

04:44 Trevor Burrus: You make a lot of discussion of… At least we talk about the public health, but there’s been a lot of discussion of the barriers to public health or to the research right now, that maybe are not the same they… As you talked about what the whooping cough and you also discussed penicillin. And it’s also that a lot of the people who innovated in public health and also in so many things you discussed, we’re not exactly scientists, I mean, they weren’t theoreticians. Many of them were very practical, they were people seeing problems like whooping cough or mosquito problems, and just sort of getting their hands dirty as opposed to hitting 15 regulatory barriers before they could even approach the problem.

05:24 Matt Ridley: Well, I do think this is a very important lesson and I think we’re only just beginning to understand just how badly the barriers that we’ve erected to innovation in recent years have left us unprepared for this pandemic in particular. Because it’s just very, very difficult to develop a vaccine or indeed a medical device. I give some numbers in the book about how long it takes to get a medical device approved. It’s on average, 20 months in America and 70 months in Europe. That’s a long time. And the point is not that it takes a long time for the ones that you try, it’s… The point is the number of devices that haven’t been submitted for approval because of the cost and delay involved in these processes. And so, in the US, the CDC has been rather insisting that its own diagnostic tests should be used rather than letting the free market supply them. Towards the end of the book, I do lament the growth of barriers, not just regulatory ones, but intellectual property ones, occupational licensing ones, all of these barriers that have made it much harder to do innovation today than it was in the past. And as you say, you need amateurs playing around, experimenting, doing trial and error.

06:49 Matt Ridley: All the evidence suggests that most innovation comes from trial and error from people being free to throw ideas around and stumble into great discoveries and inventions, and then put them together with other ones and make them into something that’s affordable and workable and practical. And we’ve made that harder. And I think we live in a time when we haven’t got enough innovation, rather than too much. That’s not true in the digital area where innovation has been largely permissionless. That’s why so much innovation happens in online digital things, because actually, you don’t have to get anyone’s permission before you start a new online business on the whole. This is a point Peter Teal has made, he is very insistent that we’ve diverted innovation into digital, into bits, not atoms, because we’ve made it so hard to develop drugs and vaccines and things like that.

07:45 Aaron Ross Powell: How do we balance, though, that innovation versus… I mean, you can imagine there being some need for barriers, especially in, if we’re talking about medical research, like, medical research could go very wrong, the amateur guy could come up with something in his home lab that on the worst case scenario, wipes out humanity, or the medical devices, if you get a bad one, can be worse for you than the underlying disease you were trying to treat. And so it does seem like there’s an argument for at least some barriers in this area.

08:19 Matt Ridley: Yeah. No, you’re quite right. And I discussed this with respect to the polio vaccine development, where there was this great urgency to get a polio vaccine, there was a lot of ambitious people who were after both the fame and the rewards of getting there first, and some corners were cut. And the first Salk vaccine was tried despite warnings that it might not yet be safe, and it might actually give people polio, ‘cause it was a full virus vaccine, and the vaccine had been killed, had been inactivated, but inactivating it without giving… Without making it no good as a vaccine was very difficult. And so the process had to be just right, and Cutter Laboratories in California was one of the firms licensed to produce this vaccine. And it produced what was effectively live polio and injected that into hundreds of thousands of people, many of whom were paralyzed and some of whom died. So that was a cautionary tale.

09:24 Matt Ridley: And then shortly after that, I write about a rather heroic woman called Bernice Eddy who rang alarm bells about the process of vaccine development and said, “Some of the way we’re producing polio vaccines is contaminated with viruses from monkeys.” In particular, SV40, which was a cancer-causing virus that was found to contaminate enormous numbers of polio vaccines. It looks like we dodged a bullet there, and we didn’t cause a cancer epidemic in human beings as a result of that mistake. But those are two very good examples of why medical innovation has to be rule-based and careful and so on. It’s not so much the existence of rules, it’s the speed with which decisions are taken, and it’s the allowing of different experiments to happen. So nuclear is another example where you can’t have errors, and therefore you cut off the technology from the very process that allows it to discover how to do things better. And what nuclear has lost in the last 30, 40 years is the ability to do trial and error, because we’re just too intolerant of any error in that area, and as a result, it hasn’t found a way to drive down costs while remaining very safe. So it’s a very difficult balancing act to get right, you’re absolutely right, but the question is, “Have we got it a little bit wrong in recent years?”

11:00 Paul Matzko: I was struck reading your description of the history of smallpox vaccination at just how bold inoculation must have seemed in the early 17th… 18th century. I guess Lady Mary comes back from the Ottoman court and you can imagine someone hearing about it for the first time, and shaking their head, “You scratch what, and stick it where?” I mean, it’s a really remarkable headspace to put yourself in. Do you think risk-taking of that sort, the kind of thing Lady Mary is doing, is something anyone can learn to do, or is it a matter of that some people just have the temperament or kind of penchant for it?

11:39 Matt Ridley: The courage of these people is extraordinary, because not only are they taking something which they know is very dangerous. Lady Mary Wortley Montagu in the UK, and a chap called Zabdiel Boylston in New England, they’re deliberately giving kids a vicious disease, but they’re giving it in such a way that they think it’s more likely to give them immunity than kill them. And they are denounced as pseudo-scientists and nutters and people who are gonna cause more harm than they’re trying to prevent. And in the US, the guy has to lock himself in his house for sort of two weeks incognito ‘cause the mob is out to kill him for his dangerous creed. So [chuckle] yes, extraordinary courage here to do that kind of thing. And so we forget just how sort of bloody-minded you almost have to be to be a good innovator in some areas. And thank goodness they did, because remember, we didn’t understand how vaccination or inoculation worked for hundreds of years after these people were trying this. It’s… The discovery of the immune system and how it works comes a long time… The science comes a long time after the technology is used. And so I think it is… It’s worth remembering just how difficult it is to change society with some of these wholly counterintuitive technologies.

13:23 Trevor Burrus: As part of the broader theme, not only of what we’re talking about here, but your work especially in the evolutionary world, I think it’s interesting, I… So I think it was… I saw you retweet someone, although I can’t find the tweet that made the comment that it’s we’re gonna have all these smart people working on a vaccine for this virus over the course of two years, maybe, and but for most people their immune system figures it out pretty quickly for 99% of people, which is an incredible thing about the nature of evolution but this… And this, it also ties to your last book, the refinement of information in the most abstract sense is kind of what we’re talking about, whether it’s biological information or market-based information or information transferred between minds, that’s fundamentally the kind of… The mechanism that’s going on here.

14:13 Matt Ridley: Absolutely, yeah, no, the tweet was from Rory Sutherland earlier today, and he’s a very, very smart advertising executive who’s very passionate about evolution like I am, and Rory made the point, he said, “Look, you know, the brightest brains in the world are gonna spend two years trying to come up with a vaccine that works against this virus. Most people’s immune system is gonna achieve the same thing in five days.” [chuckle] In other words, if you get infected with this, your immune system is gonna calculate how to formulate an antibody that will latch on to the antigen in the virus and smother it. Now how does it do that? How come it’s so clever? How much so much more clever than us in achieving that?

14:54 Matt Ridley: And of course, the answer is evolution. The answer is natural selection, the way your immune system works is that it basically does a massive amount of trial and error ‘til it hits on the right antibody and it then multiplies. Once it’s found an antibody that sticks to the virus, it then ramps up production really fast in a plant in… The equivalent of North Carolina in your bodies as it were somewhere. And that process is of course exactly the same as the way in which the virus itself came to be so good at infecting us, that is to say natural selection. Somewhere in the horseshoe bats and the pangolins of wet markets in China, lots of different versions of the virus were tried.

15:39 Matt Ridley: And if you like… If you think of those markets as being places where the experiment has been going on for decades… And we should have been warned by what happened with SARS there and taken precautions, but eventually, mother nature hits upon a brilliant design, a virus that can be so contagious because it’s transmitted before you even feel sick. I mean, there’s a four-day gap we now reckon between people getting sick and the person they pass it to getting sick, which is a lot shorter than flu and most people are therefore passing it on when they’re feeling fine, which is a brilliant way to make sure that you spread around the world, but at the same time, this virus is powerful enough to subvert large parts of your respiratory system into producing more copies of the virus to the point where it can actually kill you if you’re frail in some way particularly.

16:31 Matt Ridley: So, we’ve got evolution at both ends of this process and of course the gist of my book, The Evolution of Everything is that to understand anything and everything we need to use evolutionary ideas, we need to understand how these things emerge from the bottom up. They’re not ordained from the top down. And it’s a bit like a market system. And that was very much the argument I made in The Evolution of Everything that 10 million people eat lunch in London every day, they decide at the last minute what they’re going to eat, how come all the ingredients are in the right place, at the right time to achieve that process? It’s mindbogglingly complex and yet, it happens not because there’s a very, very clever London lunch commissioner, but because there’s a process of supply and demand, trial and error, that evolves an unconscious solution to the problem as it were.

17:31 Matt Ridley: And I feel this is an incredibly important insight and therefore to defeat this virus, we have to employ trial and error to beat it too. We can’t just say, “Let’s find the cleverest person and ask him what his answer is.” Let’s try lots of different teams, trying lots of different ways of tackling this virus and reinforce the ones that work, rather than the ones that don’t.

17:54 Trevor Burrus: I’d like to go back to some of the… We can… Kinda built up here, we’ve talked about the virus so we can get back to that, but in your book you talk about of course many things other than public health, but it’s interesting you kinda break it down in ways that I… The way I think about it with… So you have fire into work is one of the ones where you can just sort of ask these basic questions of how many… I kinda think of, what is the physics unit of work, what is work that it’s a unit? How much can you pull out of… It’s been a long time since I took physics. How much can you get… Your body converts food into energy and you can get so much out of it and then your machine converts heat into energy and then you can actually pump water out of a mine. And that’s one of the first… You call it, maybe the most important innovation.

18:43 Matt Ridley: Yes, I’m particularly fascinated by this moment in human history when for the first time, we harnessed heat to do work. Because before that, there was a lot of energy in society consisting of heat. You burnt wood and you burnt coal to keep warm. There was a lot of energy that consisted of work. That is to say, you either pushed a cart up a hill yourself, or you got a horse to do it or you got the wind to blow your ship across the ocean. So, water, wind… And the food that you give to both yourself and your animals is supplying all the work and the heat of coal and wood is supplying your heat. But they’re completely separate worlds, there’s no connection between them. They’re both energy, but there’s no link between the two. And then some time around 1700, and it’s fairly mysterious how it happens, two or three people start playing with the idea that you could actually use the heat to make work. And of course, what they’re inventing is the steam engine.

19:52 Matt Ridley: Denis Papin in France seems to be the brilliant thinker here. A strange chap called Thomas Avery in Britain is sort of echoing what he’s doing but doesn’t get very far, a little bit further than Papin. But then out of nowhere, an obscure engineer called Thomas Newcomen comes up with a device that actually works as a pump. You burn coal and that… It’s complicated. The way it works, you turn water to steam, the steam is then pumped into a chamber where you cool it, whereupon the steam turns back to water, which means that it collapses creating a vacuum, and that creates great suction power which you can then suck water out of a mine. And from then on, we start getting more and more of our energy, more and more of our work done by heat.

20:46 Matt Ridley: And it’s true today that the electric light that is lighting this room is basically coming mostly from heat, which is boiling steam, which is turning turbines, which is creating electric current. And the same is true in your car, in your aeroplane and everything. So harnessing heat to do work was an incredibly important breakthrough in human history because basically it gave us this almost unlimited supply of energy to play with, which we could then use to make things which things we could then use to make further innovations and so on.

21:21 Matt Ridley: So the whole thing became autocatalytic, it paid for itself. The more you did this, the more you were likely to do this. And for me, that’s what the Industrial Revolution is all about. Calling it a revolution is very mistaken. It’s more of an evolution, it’s a gradual process that gathers pace. But over the 200, 300 years since 1700, we have seen these remarkable improvements in the number of different ways in which we can reorder the world to be useful to us, create these improbable structures like cars or conferences, which are how we make life sort of useful to ourselves. And that all came from this breakthrough in the early 18th century.

22:13 Paul Matzko: Both with the evolution and you actually… You open the book talking about ducts and the second law thermodynamics but with the second law of thermodynamics, it’s about entropy. How with energy transfer, there are inefficiencies, heat waste. And in both cases, we’re dealing with biological reality or fundamental structural reality. So human beings have a biological imperative to… Our bodies are built to evolve in response to the virus today. They’re built… We are prone to trying to find ways of reducing entropy in our lives by finding new and better ways of minimizing heat loss. Rather than just the biological imperative though, do you think there’s an ethical imperative for us to attempt to resist entropy?

23:07 Matt Ridley: [chuckle] Well, of course, the second law of thermodynamics says that you never can resist entropy, that you’re always creating more entropy net in the world, and that’s true. When you burn fuel to make your car move, you get as it were, a little reversal of entropy in terms of the achievement of your non random goal, which is getting from A to B, which is an improbable thing to achieve and that improbability is paid for by burning the energy, and burning the energy, burning the fuel, creates more entropy, makes the world more disordered.

23:47 Matt Ridley: So we’re in this strange way where we have to sort of export disorder from the places where we want order in order to create order. It’s a fascinating way, I think, of thinking about what’s going on in the world. ‘Cause if you think about it, what modern economy does is it creates improbable things. Everything that we… Our bodies are improbable things but so are our artifacts and our structures. So, is there a moral imperative there?

24:20 Matt Ridley: Well, yes, in the sense that if I go back to what I wrote about in The Rational Optimist, is it a good thing that we have made the world richer? That we have made human beings less likely to die of diseases, [24:36] ____ what’s happening at the moment. Even at it’s worse, this pandemic will be nothing like the devastation caused by pandemics in the past. And on the whole, infectious diseases, now incredibly rare as a cause of death in the Western world and increasingly so in the rest of the world, is that a good thing? Of course it is. It will be mad to deny it.

25:04 Matt Ridley: And yet we have a lot of people in the world going around saying, “It’s a bad thing. We should have stayed as hunter-gatherers when we died aged 35 of diseases or wounds caused by the animals we were chasing or starvation because there’s something morally degenerate about what we’ve done.” I don’t see it like that. I see that what we’ve created through civilization is huge interdependence, we work for each other, we produce what we’re good at and give it to other people and they produce what they’re good at and give it back to us. So a huge sort of reliance on each other and a great deal of sort of general good has come out of all this. So I think it is in that sense a moral imperative, but I wouldn’t want to say that every time you mess with energy and entropy, you’re being morally brave and right. I think that would be reading too much into nature.

26:13 Aaron Ross Powell: I wanna go back to something you said briefly in your prior answer when you mentioned the gradual process of innovation because one of the striking things that you say early on in the book is that there aren’t a lot of eureka moments and that that story that we have of kind of the brilliant inventor sitting in his lab, no one else has thought of this, and then he has the flash of insight and this innovation comes into the world is just simply not true. And if it’s not true, why does it feel so much like it is? Why do we have so many stories that seem to point to eureka moments?

27:00 Matt Ridley: [chuckle] Yeah, exactly. And… I look at story after story of eureka moments, great moments when inventors suddenly… The penny dropped, and they saw what was happening, James Watt watching the kettle boil, Isaac Newton sitting under a tree and an apple falls on his head, Archimedes jumping out of the bath and running down the street. I can’t check out that latter one, ‘cause nobody really was there in ancient Greece to record the event, but every modern version of that that you come across turns out to be nonsense. It was a very gradual realization of what was happening. It was a series of small incremental steps along the way.

27:44 Matt Ridley: There’s a very nice example actually in the case of Malcolm McLean. He’s the guy who introduced containerization to shipping, a terribly important innovation that transformed trade in the 20th century. And he was a trucker and supposedly he was getting bored waiting for the dockers to be ready to unload his truck into a ship one day and he had a sort of blinding insight that there was a better way of doing this, so that you just take the whole container off the truck and put it in the ship intact without unpacking it. And he said, “No, it didn’t happen that way,” but the myth persists and his biographer Marc Levin who write a book called The Box about this whole story has this very interesting paragraph where he says, “It doesn’t matter how many times I tell people, this story is just not true, it didn’t happen, they want to go on believing it.”

28:44 Matt Ridley: We want to impose a much more heroic version on history than actually happened. We want to single individuals out, and of course they want to single themselves out, even though they always end up in patent disputes and rivalries with others who say, “Hang on, I contributed half of the ideas in that invention,” which shows you just how much more collaborative it is than in real life, they want the Nobel Prize, they want the rewards of the patent and so on, and we want to put them on a pedestal and we want to make them seem like demigods. And it’s a great mistake because actually many of these great innovators are quite ordinary people and they just happen to work a bit harder or try one more thing. People like Jeff Bezos goes on and on about how failure is the secret of his success. That is to say, he tries bold things a lot and encourages others in his organizations to do this, to do that, in order that one of them will work out, will turn out to be a good thing.

29:49 Matt Ridley: So there’s a natural human tendency, it’s a bit like why we worship gods, to put someone on a pedestal and pull them out. And I don’t have a dog in the race in American politics, but the idea that out of New Hampshire every four years a messiah will emerge is kind of weird when you think about it. These are ordinary people.

[chuckle]

30:20 Trevor Burrus: On that point about the government messiahs or at least leadership, I believe we have a mutual friend, Terrence Keeley who has written about this a bunch too.

30:29 Matt Ridley: He is a great man. Yeah.

30:30 Trevor Burrus: Yes, a good friend of mine. And he’s written about how much government should be involved in these processes of innovation. We have these stories of DARPA and things like this. You talk about mistakes like the compact halogen lightbulb that we all were subjected to for a period of time, but in some sense, I mean, maybe they… Government fails sometimes, but there could be a role for some of these people to maybe direct some of the innovation or am I wrong?

31:01 Matt Ridley: Well, I think it’s a matter of balance. I mean, yes, of course, government is gonna have an influence on innovation and government can decide where innovation happens to some degree. Government takes 40% of our income so it’d be shame if it didn’t spend some of it on innovation. If it spent the whole of it on other things that would be a waste. But Terrence Keeley’s point which he makes very well is that as far as one can make out, public research on R&D is not very effective at producing innovation, not as effective as private research because it tends to end up being spent on things that people aren’t necessarily very interested in and because it tends to pick winners which aren’t really the right ones, and because it tends to be spent too high up the chain in the sort of esoteric discovery end rather than the practical downstream hard work of turning an invention into an innovation that people can actually use. And this is gonna sound flippant and it’s wrong, ideas are to a penny, ideas that can be practically used are rare as hen’s teeth. And so it’s a matter of… The real geniuses are the people like Edison and Bezos who take a simple idea and turn it into something that actually works, that actually produces a reward, and government really isn’t very good at directing that process.

31:50 Matt Ridley: And just the sort of emblematic example for me is what happened in December 1903 on the east coast of the United States where you had two rival projects to produce a powered flight. One was supported by the government to an enormous degree. I mean, a lot of money spent on Samuel Langley’s project. He was head of the Smithsonian. He was very grand. He was terrific. He was a scientist. He was an astronomer. He was very well-connected. The government money was poured into his project. He was very secretive. He said, “I’ve got the solution to how to build an airplane and I’m going to unveil it on this particular day.” And he put his pilot inside this thing on top of a houseboat on the Potomac and everybody watched and it shot up into the air, stalled, crashed and fell into the ice-flecked river. And his reputation never recovered. The government was allergic to flight from then onwards. It was a total disaster.

33:30 Matt Ridley: Whereas several hundred miles away within 10 days the opposite happened, that is to say, two bicycle repairmen from Ohio who had been tinkering away for many years solving problem after problem inch by inch using experiments like wind tunnels, but also a lot of trial and error, a lot of gliders, etcetera, working out exactly what the profile of a wing should be, etcetera etcetera, discovering ways… How do you steer in the air? What do you do? Do you dip one wing? Do you have a aileron? All these kind of things. They’d worked all this out just inch by inch and they, about 10 days after Langley’s disaster, they did the opposite and got the first aeroplane into the air at Kitty Hawk without a penny of public money. And the grandees refused to believe that they’d done it for several years even when they were flying for miles and miles and miles around in circles in Ohio. The local paper said, “I mean, do you think it’s really possible that this could be going on under our noses and we wouldn’t have noticed? Of course, it’s not. No, it’s not going on.” Well, it was. [chuckle]

34:50 Matt Ridley: So, you can’t get a better example of government screwing things up. And just look at the Soviet Union. Soviet Union basically did all its innovation through the public sector and it achieved almost nothing in the way of consumer innovations of any use to people. Quite a lot of military hardware, but that wasn’t of much use to people. So, the idea that we need to do our innovation through the state is a big mistake. That’s not to say that the state shouldn’t contribute ‘cause, of course, it’s got a lot of our money, so as I say, it would be nice to. In the case of shale gas the state did join in and help solve some of the problems but only after the breakthroughs had been made in the private sector.

35:33 Paul Matzko: One of the other crucial state functions when it comes to innovation in both the UK and the US is intellectual property rights. And from the book, I can tell you clearly have mixed feelings about IP. Do you think that either country has struck the right equilibrium for intellectual property? And if not, what would that be?

35:55 Matt Ridley: I’m very influenced by people like Alex Tabarrok in this respect who’ve been digging up the data on whether or not intellectual property works. And it’s a very counterintuitive thing to conclude that it doesn’t work, but that’s where the data shows. But hang on, I’m being a bit glib there. What I mean is, the amount of intellectual property we’ve given ourselves, which is too much. A little bit of intellectual property does help clearly. And to some degree, you need to think about things like the drug industry where you might spend a billion dollars developing a drug and you can’t then have the market pulled out from under you by your competitors who’ve not spent that money. So there are clearly degrees of intellectual defensible property that you need.

36:47 Matt Ridley: But in recent decades, we have hugely increased the amount of patenting, the strictness of patenting, the ease with which you can get a patent, the amount of copyright, the length of copyright, the ease with which you can get a copyright. This book I’ve just written will be automatically copyrighted to me, I don’t have to assert it. I don’t have to go through any hoops to say it’s mine, but not just to me, to whoever is alive and has inherited my literary estate 70 years after I’m dead. Well, what on earth did they do to deserve that? This is just put there by the Disney corporation or someone as a pretty outrageous piece of crony capitalism to capture money from other people. And the evidence of patent thickets, patent trolls, things getting in the way… Intellectual property as a hindrance rather than a help to discovery and innovation is very strong. So we need to roll back the intellectual property system, have shorter patents, which are easy to get and longer ones which are very hard to get and things like that. We need a much more flexible system.

38:08 Trevor Burrus: You have a section when you discuss the components of innovation where you say innovation is inexorable, which you mention things like that, like when you talk about the airplane, you kinda say someone was gonna get in the air at some point. But it seems to be at least require some background situations where people have the ability to innovate some of those are sort of free market type of situations and also some of the regulatory barriers that we would want to overcome. And that’s sort of something we can be thinking about now ‘cause we’re seeing a lot of regulations tied to COVID-19 to the coronavirus being taken away, so we might see some more of this innovation. But is it correct to say it’s inexorable in that way?

38:40 Matt Ridley: Well, this is a bit of a paradox and it’s a paradox that I don’t fully resolve in the book, but I wrestle with. And that is that there’s an inevitability about certain innovations coming along when they do. It’s hard to imagine getting through the 1870s without somebody inventing the light bulb even if Edison isn’t born, because 20 other people did in different countries, Lodygin in Russia and Swan in England and so on. The light bulb was such an obvious thing to invent at that stage, just to combine the technologies of the vacuum, the glass, electricity, lighting, etcetera. So it’s hard to imagine getting through the 1870s without inventing the light bulb, it’s hard to imagine getting through the 1990s without inventing the search engine. We didn’t have to have the two founders of Google meet each other to get that. In that sense, there’s an inevitability and inexorability about innovation. And yet, as you say, clearly in other cases or to some degree even in these cases, you have to create the conditions in which it happens because why do Sergey Brin and Larry Page get together in California? Well, it’s something to do with the tax structure, the share ownership rules, the defense spending at Stanford University, the culture of entrepreneurship.

40:26 Matt Ridley: It’s also something to do with acts passed by the Clinton administration… Well, actually this comes a little bit later, but it’s not the search engine, but for e-commerce generally, the Clinton administration passes some extraordinarily libertarian rules in the 1990s basically saying that anything you put online, you’re not responsible for, you’re just a platform for it, and that makes innovation much easier and much more permissionless online. And contrast that with what the Federal Communications Commission did in the 1940s, ’50s, ’60s, ’70s, even ’80s in terms of blocking any attempt to get cellular radio up and going. And we could have had mobile phones an awful lot earlier. And by the way, other countries and continents weren’t much better in that respect, the spectrum was regulated largely by nationalized industries in them. So yes, in one sense, these things happen inevitably once they’re happening, but in another sense, some countries in some places at some time get the recipe right so that it happens. It’s surprising what a small part of the world does innovation at any one time. It was the Italian city states in the 1400s, it’s the Dutch Republic a bit later, it’s Victorian England, it’s California, it’s not happening all over the world all the time.

41:56 Aaron Ross Powell: I’m curious now that you’ve written a large book on the history and processes of innovation, what you think of the kind of hip great stagnation thesis that we saw a couple of years ago, that this, for listeners who don’t know, this is basically the idea that we’ve… We’re approaching a point of… We’ve kind of invented the big things, the big discoveries have been made, the rapid pace of change and therefore technological growth and economic growth is necessarily slowing down because we can tinker around the margins, but we’ve solved the big problems, or as I said, invented the big things. Do you think there’s anything to that thesis? Is innovation slowing down? Can it speed back up again, if it is?

42:44 Matt Ridley: Yes and no. I think Robert Gordon and Tyler Cowen and others have a point when they say that some of the stuff we’ve been inventing in recent decades is a bit trivial compared with stuff we invented before. I think the example they gave is, would you give up your iPhone or your toilet? Probably you’d give up the iPhone and keep the toilet. And I also… I place a lot of emphasis in my book on the fact that I’ve lived through incredible changes in computing and communication, but almost no changes in the speed of transport. I mean, 747s entered service in 1969, that’s more than 50 years ago, they’re still flying across the Atlantic. Imagine using computers of a model that was first entered service in 1969, it’s an unthinkable thought. So things that really could change our life like supersonic air travel, routine space travel, personal jet packs, personal gyrocopters, we were promised all these in the 1950s, that’s what… All the futurology is about transport in that time, it’s not about computers at all. And we didn’t get that as Peter Thiel famously said, “We were promised flying cars and we got 140 characters.” So clearly, innovation has slowed down badly in some sectors. Has it led to the stagnation of wages and so on?

44:14 Matt Ridley: Well, to some degree in the West, yes. We’ve lost the habit of rapid economic growth in most Western economies. That’s probably because we’re too tight on regulations and we put too many barriers in the way of innovation on behalf of incumbent industries and so on. But that isn’t the experience of the rest of the world. If you live in China or India or Brazil, or somewhere like that, you’ve seen spectacular improvements in your living standards in the recent decades. And Africa is just beginning to see some really spectacular improvements in living standards, and that’s all coming about because of innovations. Mostly innovations that happened elsewhere, but increasingly in China, even that’s not the case. I mean, if you go to China and look what they’re doing with how they handle money, how they handle consumer goods and services, I think you’d be hard put to say that they’re in the middle of a great stagnation. So… There’s another question about whether we can trust authoritarian regimes to be in charge of the global innovation we need, but that’s a different issue. So I personally think that what Tyler Cowen and Robert Gordon are writing about is mostly an American or Western European experience of no longer being the source of most innovations. I think we’re gonna have to get used to being the importer rather than the exporter of new ideas unless we change our habits.

45:00 Paul Matzko: I’ve seen there are several technologists suggest that this… The response to COVID-19 has perhaps shaken people away from this kind of techlash moment we’ve been having, the backlash against the presence of big tech in our lives. It does feel like there’s a lesson rooted in human psychology that we just can’t shake, that periodically there are waves of opposition to innovation, whether it’s the Luddites hundreds of years ago or whether it’s the techlash moment right now that perhaps is similar to the psychology for why human beings want to deify individual innovators, place them on pedestals. What is that quirk of human psychology that’s responsible for these cycles of backlash against technology?

46:44 Matt Ridley: Yeah, we are instinctively neophobic. I spend quite a lot of one chapter in the book telling the story of the resistance to coffee. Coffee comes into Europe and Asia around 1500 and it’s banned wherever it goes. And rulers are constantly trying to stamp it out. Why? Well, there’s a lot of pseudo-scientific medical reasons. It dries out your kidneys they say or something. Well, that’s all coming from the wine industry usually who don’t like the idea that people are drinking coffee instead of wine. But also the rulers don’t like it because people gather in coffee shops and talk about the flaws of their rulers. [chuckle] So and that Charles II in England is very explicit about this. “We can’t have these coffee shops, they might be talking about me in them.” [chuckle] So there’s nothing new in that sense in neophobia, but in recent decades we have let the neophobics become very powerful and very organized.

47:43 Matt Ridley: And I’m thinking, for example, of the campaign to rubbish genetically modified organisms, which has effectively denied an entire continent a very promising new technology that actually has huge environmental benefits we now know. I’m talking about Europe, but also Africa which even when it was very hungry, was not allowed to try GMOs and which is now suffering from terrible locust plagues and fall armyworm epidemics in its crops which would have not happened if they’d gone down the route of genetically modified organisms.

48:18 Matt Ridley: So there is some cautionary tales from recent years about the success of the Luddites in beating back technology and the techlash you’re talking about today against the big tech industries has resulted in the GDPR regulations in Europe which are a nice barrier to entry that keeps Google and other big companies in a cozy position actually. [chuckle] It prevents smaller competitors coming in and knocking them off their perch. And as we’re seeing, particularly in South Korea, the response to the COVID-19 epidemic is much easier if you do use contact tracing and digital technologies in a way that we’ve become a little bit allergic to doing in the West. So yes, I do think there’s a lesson there that we should combat the technophobia of people.

49:11 Trevor Burrus: So despite the current situation and despite some of the regulatory barriers that we’ve discussed and maybe some little bit of stagnation, I’m pretty optimistic about going forward, but what is coming, do you think, in a realistic assessment of things that will probably be seen that would maybe not be as big of innovation as the automobile, maybe will be. What’s coming down the road?

49:36 Matt Ridley: Well, I’m always a bit wary about forecasting the future because in the book I quote some very, very clever people saying some very, very stupid things about the future. Paul Krugman famously said in 1998 that by 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machines. And he was writing at a moment when it kinda looked like e-commerce was a bit disappointing. Well, that proved to be wrong. As I say in the book, technologies tend to underdeliver in the short run but in the long run, they overdeliver. And that makes them very hard to forecast. So anything I say about what the world will be like in 2050 will be bound to be embarrassingly wrong. And as I say, transport changed dramatically in the first half of the 20th century.

50:23 Matt Ridley: Communications and computers changed dramatically in the second half of the 20th century. What will the first half of the 21st century in retrospect be all about? It might be about neither of those fields. It might be about biotechnology, I suspect in some ways it will. But maybe we’re overemphasizing the significance of artificial intelligence at the moment, which is one of the things we’re talking about. Blockchain is a technology that has a lot of disappointing to do before it starts to be rewarding, I suspect. In other words, there’s a lot of hype that will not prove to be right. But I would think that in 2050 we will have worked what we would now consider miracles in terms of biology, biotechnology and genomics. Now maybe it’s ‘cause I’ll be very, very old in 2050, I’ll be 92 if I’m still alive but I do think that by then we’ll have cracked aging. [chuckle]

51:27 Matt Ridley: I’m not saying we’ll live forever, but I’m saying we will have got rid of this increase in the period between when you’re no longer healthy and when you die. That’s actually quite a nice feature of human beings, which is that they once they get to 110 they drop dead basically. Very few people make it past 115. Despite all the improvements in healthcare that we’ve done in recent years, we haven’t really shifted the maximum human lifespan. But we have shifted the average human lifespan up. But we’ve got a lot of ill-health in old age. Now, if we could invent senolytic drugs that literally prevented the accumulation of senescent cells in our tissues so that we got to 110 in perfectly good health and then dropped dead, wouldn’t that be quite fun? So there’s a prediction for you to… In 2050 when you interview a 92-year-old man, I’ll get very cross if you play that one back to me.

51:52 Trevor Burrus: Yeah. We’ll have you back on. Maybe you’ll be somewhat bionic and have a robot body but we can have you back on quote that back.

51:52 Matt Ridley: Yeah, that’s the other one, the other thing, how much of me will have been transferred to something else by then.

51:52 Aaron Ross Powell: Thank you for listening. Before we go I wanted to thank my colleague Paul Matzko for joining us today. If you wanna hear more from Paul, you should check out his libertarianism.org podcast Building Tomorrow, which explores the ways technology, innovation and entrepreneurship are creating a freer, wealthier and more peaceful world. If you enjoy Free Thoughts, make sure to rate and review us in Apple Podcasts or in your favorite podcast app. Free Thoughts is produced by Landry Ayres. If you’d like to learn more about libertarianism, visit us on the web at www.libertarianism.org.