Welcoming versus Blocking Innovation

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need not await yet another multimillion-dollar study to learn that
the Internet has improved efficiency in innumerable areas of human
productivity. What is not so widely appreciated, judging by all
the complaints one hears about outsourcing – taking jobs that
have been done in a given location and relocating them someplace
else where labor is less expensive – is the incredible volatility
that exists in the job market as a result of the Internet.

the situation of an author of books who in the past used a typewriter
to produce reams of pages of work which then had to be reworked
by hand, then taken to the post office and sent off to be copy edited
and returned via the snail mail for checking, then sent off again
to the publisher, where it would be set in typeface and the galleys
then would be returned to the author who would proof read them and
once done, send them to the person doing the index – and the story
goes on, with what now seem to be obsolete and tedious steps slowly
moving to the final production of the work.

happens today in most cases? The initial manuscript is created on
a PC where it is easily edited, with sections moved around, sentences
reworked with no need to discard actual pages of text, with no need
for pencils and white-out correction fluid. Most of the editing
can be done by the author, who can also make improvements in the
text as it is being reworked. Then the manuscript is uploaded into
an email as an attachment and sent instantaneously to the editor
at the publishing house, bypassing the mails, thus not utilizing
the driver who would have carted it to some airport where others
would have loaded it into some cargo plane, etc., and so forth – you
get the picture, I hope.

short, all kinds of hands have been laid off as a result of the
widely championed as well as denounced electronic gadgets. Talk
about a labor saving revolution! Talk about down sizing!

of course, that is just a fraction of the picture, as it is with
any kind of outsourcing, domestic or foreign. More closely looked
at, what emerges is that with the speed-up of production more work
can be produced, more books get published, more editorial task can
be accomplished. With the money saved from not having to spend so
much on postage and editing and proofing and with money earned from
more books being produced and sold, savings and earnings can be
spent on different items that will need to be produced. Those who
used to work driving the trucks to the airport, just to focus on
one fragment of the eliminated process, are now able to get jobs
in those industries that are funded from the spending of the new
savings and earnings.

more, the process continues without any end in sight in many other
lines of work across the globe! As with everything new, some old
things will be replaced but even that has to be qualified. Just
as TV didn't displace the movies, just as video cassettes didn't
displace the multiplex cinema, just as CDs didn't quite do away
with LPs, even cassettes, so anything else that's new tends mainly
to add to the array of available goodies human beings love to use
for their various types of benefits. Even the famous "horse
and buggy" didn't quite die out, given the incredible increase
in the human use of horses for athletic and recreational purposes.

old things come back in somewhat revised fashion, even if some do
disappear for good. In the latter case those who specialized in
producing them will either learn another skill, move to where the
change hasn't yet taken place, or, if they have reached a certain
age, retire and make room for the new generation of producers. The
goods that have been replaced will often enter either the used or
the antique market place, often with quite a span of extended duration
there, requiring all the work produced by those caring for them
in repair shops and such.

a relatively free market environment, these matters go on without
a lot of fuss. Common sense tells anyone (who will but consult it)
that this is how things ought to go and people will make preparations
to cope accordingly. Only when various groups go to the government
to get some kind of special favors, by way of subsidies, protectionism,
or price supports, does the situation begin to go seriously awry,
with the whole process becoming politicized and creating, in its
wake, hostilities and feelings of victimization all around.

there will also be the accompanying embarrassment on the part of
those who gain political protection for their specialization that
they themselves often take full advantage of innovation and, yes,
outsourcing in numerous regions of the marketplace as they look
for new and better ways of doing what they want to do in their lives.

9, 2004

Machan [send
him mail
] holds
the Freedom Communications Professorship of Free Enterprise and
Business Ethics at the Argyros School of Business & Economics, Chapman
University, CA. A Research Fellow at the Hoover Institution, Stanford
University, he is author of 20+ books, most recently, Putting
Humans First: Why We Are Nature's Favorite

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