Tim Harford on Catastrophe and Innovation

Tim Harford has an excellent piece in the Financial Times that covers my work with the Kremer team on accelerating vaccines but weaves it into a larger panorama on the innovation slowdown and how barriers to innovation can sometimes break down with catastrophes.

There is no guarantee that a crisis always brings fresh ideas; sometimes a catastrophe is just a catastrophe. Still, there is no shortage of examples for when necessity proved the mother of invention, sometimes many times over.

The Economist points to the case of Karl von Drais, who invented an early model of the bicycle in the shadow of “the year without a summer” — when in 1816 European harvests were devastated by the after-effects of the gargantuan eruption of Mount Tambora in Indonesia. Horses were starved of oats; von Drais’s “mechanical horse” needed no food. It is a good example. But one might equally point to infant formula and beef extract, both developed by Justus von Liebig in response to the horrifying hunger he had witnessed in Germany as a teenager in 1816.

Read the whole thing. I also highly recommend, Tim’s new book, The Next Fifty on how seemingly simple things like the brick changed the world.


No crisis should go to waste. In the Trump administration, that means rescinding regulations relating to air and water pollution, auto emissions, auto gas mileage, and so on; the list is long, the damage irreparable. https://www.brookings.edu/interactives/tracking-deregulation-in-the-trump-era/ I suppose that's "innovation". Yesterday Tabarrok suggested an innovation: extend the government's sovereign immunity to the makers of coronavirus vaccines. And I thought government was a barrier to innovation.

I look forward to the day where anyone can point to a single little bit of damage that has been done by the repeal of these regulations. They are bad faith law in the sense that they are not aimed at pollution or the environment but rather forcing social change that most people do not want. They add nothing to the well being of most people.

The only down side is that they throw a bunch of useless Arts Graduates out of their cushy NGO and government jobs. Which is not much of a down side.

A very smart man once said that men are the greatest resource. It does not surprise me that they have always responded to challenges by innovation. Government should get out of the way.

Have you already forgotten the air quality and IQ/education studies cited in these pages?

Ah, yes. The one Alex tried to link to toll booths. One of the funniest days in MR history.

>gargantuan eruption of Mount Tambora in Indonesia

Nice to hear about actual climate change for once around here.


How much does at MIT pay ?

I remember reading that post and thinking that there had to be some pretty fancy statistical shenanigans deployed to get that result.

I'm all for clean air, but I hate it when so called smart people lie to manipulate the political process.

And please justify a regime of regulation whose net result is moving production into less rigorous regimes, where the pollution is not visible, with the added benefit of cheaper consumer goods.

I call it systemic racism, since the consequences are borne by those closest to the edge. Why do you hate black people so much?

"Why do you hate black people so much?"

At this point, is the idiocy just, like, the point?

In your view, two States with two centuries of very little regulation are the best States to live, work, do business: West Virginia and Louisiana, far better than two States with the most regulation, California and Massachusetts.

Massachusetts is the reason the EPA must regulate greenhouse gases, and California is the biggest reason the EPA exists by providing the local regulation in the largest by far economy in the US which threatened to divide the US into two markets, one which sold to the entire US, California and its allies, and the other which sold mostly to itself while importing lots from California, et al, Trumpland.

If those opposed to the EPA think the lack or regulation is so great, why haven't they moved to places like West Virginia and Louisiana instead of moving to places like California?

Half the population of California are immigrants, most from other parts of the US. West Virginia has one of the lowest share of immigrants from anywhere of any State. Why do so many shun the places with the longest record of little to no environmental regulation?

Louisiana is a shrinking State thanks to lack of environmental regulation. Have you not noticed the loss of property in Louisiana? Do you think the people who have lost their land and property, lost their livelihood harvesting from the waters of Louisiana haven't noticed their losses?

I think it is called ideology destroying the workers in favor of political elites and priests in the temple.

If you had been around for a longer period of time like say the 1950s you would know that natural gas is the single greatest cause of the reduction in air and water pollution. No more mining and burning of coal.

And all done without regulatory behemoths, just science. Of course, California and Massachusetts are the most anti-scientific communities in the world. Give us that old science of Marxism.

Yeah, 'cause CalTech, Stanford, Harvard and MIT are all a bunch a Luddites

Rayward - so how far back do these regulation repeals take us?

To the blighted days of 2010, or perhaps 2007, when obviously our water was undrinkable and air of our cities so befouled that we could barely breathe? /s

I'll be patient this time. In 2007-2010 we had plenty of particulates in our air.

Are you putting those levels forward as ideal? Calculated as such?

Show your math.

Wonderful link - to a few boilerplate paragraphs about particulate matter. *Not*, as a passerby might expect, to any sort of statistic on "levels".

I do not, in fact, many any specific claim that those levels were ideal from a cost-benefit standpoint. Perhaps we'd have a net benefit to society from allowing less - or *more* - pollution than we did at the time.

My point about rayward stands, however. He notes *irreparable* damage. At least one of these regs - the Waters of the U.S. Rule - has never gone into effect.

Somehow, I think that society and the Republic will survive without these rescinded regulations.

Background first. My mood today is bitter ex-Republican. About the time I was leaving (gosh now almost 20 years ago for Iraq II), Republicans were saying "don't call us the crazy party," and "don't call us the stupid party." Like that was an answer in itself. Some people (claiming not to be stupid) said "don't argue with them, or they won't be able to learn from their mistakes." Twenty years later, this is the President of the United States. Put a different face on it, cut through our dulled senses, and it is pure crazy and pure stupid at the same time.


Now, what should we do with your claim that "My point about rayward stands" without data? Without environmental accounting? Without cost/benefit analysis? Without opportunity costs?

Should we treat it with undue respect? So that you can learn from your mistakes?

Rayward claims "irreparable damage" with zero cites as to why that's the case. The burden is on him to provide at least some evidence for that claim.

He links to nothing more than a simple list that does nothing of the sort.

Supplemental reading:

The Cost-Benefit Boomerang

"The right devised cost-benefit analysis to discredit regulation. Now this technique is showing massive net benefits, and the foes of environmental regulation are in a panic."

Written from a perspective, obviously. But grounded:

It's an idea that traces back to the Cold War–era writings of Ronald Coase, a conservative economist with a penchant for free markets and a deep distrust of government. Cost-benefit analysis was quickly adopted by industry lawyers and lobbyists bridling in response to the wave of environmental health and safety legislation that swept through Congress in the 1970s. They banked on the assumption that imposing a rigid system of cost-benefit analysis would weaken regulatory safeguards, because the benefits of public-health protections—preventing disease, saving lives, preserving ecosystems—would be hard to quantify and so inevitably undercounted in relation to the more easily quantifiable compliance costs to polluters, manufacturers of unsafe products, and so on. But what made cost-benefit so attractive politically was its pedigree in neoliberal economic theory. That lent an air of academic legitimacy to the project and was a perfect fit with the right's larger political strategy of selling the American public on laissez-faire economics.

Trump had so many crises. He wasted all of them.

Had nothing to do with crisis. This was Trump's explicit platform in 2016 and precisely what his supporters voted for.

Tim's excellent podcast, "Cautionary Tale" has a new episode up: http://timharford.com/articles/cautionarytales/

So as not to give the impression that Tabarrok and I are on different teams, here's a combination innovation and deregulation that will likely result from the pandemic catastrophe: telemedicine. Sure, telemedicine has been around for awhile, but its use has been restricted due to regulation, in particular the regulation of the practice of medicine. The practice of medicine is regulated by the states, each state with its own requirements including licensure. That has meant physicians licensed in Boston can't "practice medicine" on patients located in Florida unless the physician is licensed in Florida. Florida licensed physicians aren't keen on having physicians licensed in Massachusetts practicing medicine on patients located in Florida, Florida being the location of millions of insured patients who need lots of health care. At the federal level, reimbursement for physician services provided via telemedicine by Medicare has been restricted to prevent fraud. In March, the Trump administration relaxed rules relating to reimbursement under Medicare for services provided via telemedicine, and some states followed suit by relaxing the strict requirement that physicians must be licensed in the state even if the services are provided via telemedicine from another state. For example, Florida waived licensure requirements for out-of-state healthcare providers who render services in Florida related to COVID-19, as long as they do so for the American Red Cross or the Florida Department of Health (DOH). Both the federal government waivers and the state waivers are temporary, and only apply during the pandemic emergency. But now that telemedicine has its foot in the door, I would expect the waivers will be made permanent, and over time the waivers will be broadened. Innovation and deregulation coming together for the common good. Tabarrok and I are on the same team for that.

Having gone to a telemedicine visit ... I'm not sure how useful it was. It was just to check a form and took about 5 minutes, but no useful information was shared.

Now if you are able to share useful information, then it would be good. But sometimes it is ... not even a waste of time, it saved a lot of time, but completely unnecessary and not helpful.

Government got billed a lot for very little labor to generate corporate profit.

Remember, obamacare is a TOTAL GOVERNMENT TAKEOVER OF THE ENTIRE HEALTHCARE INDUSTRY and industry has blocked Trump and the GOP from ending the government (ordered) payments (even if less profitable than industry wants). Where the GOP has managed to stop Obamacare, the industry is neither cutting and running or going bankrupt, mostly in areas that were most in favor of Trump and the GOP.

Telemedicine does not turn houses into hospitals or deliver drugs at prices equal to the cost of paying workers in China, India, et al where workers produce most of the drugs industry imports and sells at high profit, in the name of innovation.

Trump has made it clear that vaccines will be imported and sold at high prices to generate industry profits, with government paying the higher prices.

Why don't don't you start your own hospital or drug company and report back to us on how well you navigate the mine field of regulation?

Why call it the 'world' - deworm yourself first - bad nomenclature !

I observed a recent pediatric telemedicine visit. Took about 6 minutes, no transportation or wait time, no office infection risk, easy on the parent and child. Definitely a win.

I had an office visit the week. Med check, no issues. Interrupted my activity for the day to go in, and ended up waiting in the exam room for 50 minutes for a 5 minute session with the doc, half of which was the doc typing information into the computer. Great doc, but the logistics are painful. A tele-visit would have been better all around.

There is definitely a place for tele-medicine, although it won't handle everything, or every visit. Standards of care definitions might also need to be updated, i.e. how long can prescriptions be renewed with an eyes on visit.

There's an opportunity here for at home blood pressure measurement, oximeter, etc. that can be plugged into the tele-visit. Camera's today are so good that I expect they are adequate for visual inspection of the patient (e.g. the pediatric visit above involved inspection of a small wound).

Innovators have long viewed telemedicine as a way to share specialty (cardiology, cancer, etc.) "centers of excellence", with the very best physicians within a specialty working collaboratively in one or a few places while their services are shared across the country via telemedicine. Let Mao be Mao: don't try to duplicate Mao everywhere; there aren't enough superstar specialists to have a Mao Clinic in every city. But what's developed before the pandemic is the use of telemedicine to bring routine physician services to rural areas. High tech for low tech services. Duh. The problem with health care in America, the problem in America, is too many special interests promoting their own interests not the country's. Tabarrok and Cowen believe the solution is the wild west, as if the actual wild west promoted the common good rather than those with the most money. A gilded age is a gilded age, whether it's in the 19th century or the 21st. Does it take a catastrophe to make progress? That's depressing.

Congrats !

As a Jewish-American lawyer, I do not get why we, the richest country in the world, can not manage the coronavirus issue. Brazil has succeeded to reopen its economy while we, Americans, seem to not be able to get things right.

Hey, everyone! Thiago's spam farm is back!

Maybe you support the people who made America #1 in coronavirus deaths and want to deligetimate who make tough questions?!

"People die, get over it" isn't exactly the words of someone who had to make tough decisions, now, is it? Isn't that what Bolsanaro said?

Not at all. Brazil's leader just remembered people that everyone dies one day. One must remember Brazilians are a very stoic and Spartan-like people and Brazil's President, Captain Bolsonaro, is a national military hero and former parachutist, black-ops-trained officer. He, however, said he is very sorry for the deaths of many Brazilians and the plight of their families.

Your average Brazilian temperament lying midway between Shaolin Monks and Simeon Stylites.

Good point.

Can we just have blanket ban on anyone mentioning brazil or bolsanaro on posts that have nothing to do with either topics? Not to limit free speech, but this spam is really annoying.

And also, Brazil has the second worst death numbers, and that is just the reported outcomes. The US has done a fairly good job at counting all the deaths. Brazil has not. I would not be surprised if Brazil has already surpassed the United States in number of deaths. And it is very much on the upswing there. And yet. it is reopening so the crisis is set to get much worse.

"And also, Brazil has the second worst death numbers"

Because Brazil's population is huge.

"The US has done a fairly good job at counting all the deaths. Brazil has not. I would not be surprised if Brazil has already surpassed the United States in number of deaths."
False narrative.

"And yet. it is reopening so the crisis is set to get much worse."
No, it is not.

Scarcity of labor creates its own crisis of sorts. It is one of the arguments for the reason why the Industrial Revolution began in Britain and not say, the heavily populated China. There was incentive for people to invent labor saving devices.

Same for Roman Empire, same for Black Death...

Bonus trivia: no mention of patents anywhere in the comments or AlexT's piece. I guess in our post-scarcity age, nobody cares about money?

I don’t think that theory is right. Britain had control of the vastly populated country of India and all the cheap labor there. The industrial revolution is better explained by the cheap resources that were flowing into England, which China did not have, not a labor shortage. Workers in the most developed parts of 1700s China had similar wages compared to England when measured in food, but their wages were much lower when measured in commodities (most importantly coal) owing to fewer natural resources in China. Also during the 19th century, China experienced very serious famines and the Taiping Rebellion that killed tens of millions of people and resulted in vast labor shortages, but no industrialization happened. To the contrary, industrialization in China only happened after 1980, after its population doubled from 1950 and there was a large labor force capable of creating economies of scale.

I believe we are living in a time of high innovation, and "there is no great stagnation." But at the same time I think Alex and Tyler are right that we could innovate in more areas. I say by refactoring.

Why is refactoring not a more common word across US society?

Refactor the police. Refactor the university. Refactor the Executive Branch.

Note, the dictionary definition is a bit off. One never refactors just to re-solve old problems. It's always because you want to get somewhere new. The wiki page touches bases with that when they say "improve extensibility." But I think that's like 80% of the reason you do it. You want to map the old solutions (code or law) to new realities and requirements.

Refactor the university to allow more remote teaching and learning.

Doing some searches, it seems that the word "refactoring" has become more narrow in its meaning over time (relative to my Y2K memory). I do see that Ribbonfarm and Slate Star Codex have tried to apply the term more broadly.

My few-line summary, generalizing from software to systems in general:

1) you block out what you are really doing

2) discard obsolete requirements

3) make sure remaining blocks work well (update to current technology)

4) feather in new requirements to the improved structure

We could refactor the heck out of HHS, for instance. And get Nutrition out of Agriculture.

(There are interesting historical reasons that Nutrition is in Agriculture. They discovered it, basically. But the fact that we keep it there "because that's the way it's been done," as health and disease become even more intertwined with diet is .. stupid. It's a sign that we are not an innovative society. We are a staid one in many aspects. Even if the Department of Agriculture can send Nutrition information to your iPhone: nutrition.gov)

"Refactor the university to allow more remote teaching and learning."

I grew up before the internet, or AOL, and read ads all the time for remote teaching and learning.

The locksmith course which for most be equivalent to $250-500 a month sent a binder of lessons and the tools and sample locks needed to do the lessons and demonstrate mastery.

The watch and clock maker courses.

The radio technician courses.

The gun smith courses.

The key point is the courses included the tools of the trade, or involved you making them.

Where can you learn chemistry today mail order to make batteries which are an extremely innovative area these days. Anyone producing such a course and trying to sell it in the US would be "oriental" designated a terrorist by Trump et al teaching bomb making.

Teaching biochemistry by mail would be deemed terrorism, given all the tools and chemicals would be sold by orientals, which are the people from the Persian Gulf to the Pacific.

There is probably some interesting history there. Correspondence courses may have declined with increased mobility, and increased access to conventional universities. But you're right. The sort of course found advertised in the back of magazines held on .. until the web killed it dead. (Perhaps there are some few holdouts. That would be interesting too.)

It's also interesting that you note the "tools" connection. The first best MOOCs were about programming. It's still a big MOOC theme. And obviously if you have a computer to take the MOOC, you have the "tool" to implement the ideas.

Beef extract: that's a cool anecdote about but there was already a thing called "portable soup," I learned from my pandemic reading. I'm on "Treason's Harbour" now.

Great series. One of the things I find interesting about such reading is the contrast with current expectations about what constitutes a hardship. And as hard as that era's naval life was, it was in many cases a step up from the life available on shore.

I'm a molecule flipper and looking for some university research that I can acquire and resell quickly. I need some academics to research this for me for free, and share the results of their efforts with me. There are restrictions on you for disclosing what I tell you, but there are no restrictions on what you tell me. I have a board of wealthy advisors who are not restricted as to what they do with the information you freely provide them.

I am applying for government assistance after I acquire the technology from the University. I have a Trump advisory board member. https://www.washingtonpost.com/business/2020/06/11/coronavirus-drug-ridgeback-biotherapeutics/

If your drug is successful I will announce you as a winner and send you a plaque with my picture on it.

You need Fast Grants from Emergent Ventures to reach your goals, not the government.

Sounds like me - with all my rats !

There's overtimes of the broken-windows fallacy here.

Pretty good piece, although overlong compared to the information it provides, e.g. I'm pretty sure Alex explained the notions of the need for speed, seemingly redundant vaccine plants, and the potential of awards (maybe that was Tyler) in fewer words.

Harford does address additional points, namely the role of crises. He could've mentioned war and military research, which has accelerated all sorts of innovations including operations research and game theory to name just a couple of major fields to say nothing of nuclear physics, although there was plenty of research there going on before the war. (Fun fact: when World War II started, radar's potential as a major force multiplier was well-known but its actual utility was limited and uncertain; all sides busied themselves conducting top-secret research to improve their radar capabilities. MIT was one of the American sites where a lot of research was done, but to hide the fact that they were doing research into radar they called the research lab the "Radiation Lab" instead of the "Radar Lab". Little knowing that an even more top secret and potentially game-changing project was about to start, namely the Manhattan Project. And "radiation" might not've been the most innocuous name in that context.)

I don't much like Harford's use of the velocipede as an example of technological innovation though. Its utility was limited, it was pretty much the skateboard or scooter of its day. Even the invention of pedals to create the boneshaker bicycle didn't make it useful. With the penny-farthing (high wheel bicycle) people could actually move significantly faster, at the cost of riding atop an inherently dangerous contraption.

So the velocipede was a necessary step to the development of the modern bicycle and important in that sense. But by itself it wasn't a useful or game-changing technology. It was like a lemma rather than a theorem.

I do like that he emphasized the role of simplicity and implicitly affordability hence scalability. Steel has been around for centuries. But until it could be mass-produced (thanks to technologies such as the Bessemer converter and open hearth process) it was limited to just the highest-value uses (swords, clocksprings).

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