Economic Innovation

I don’t really like the Democratic wholesalers idea.  Who gets to decide what’s best?  Does everyone in the country vote?  If it does, what if I don’t like the outcome?  Woodhouse gives the example of only buying polyester rather than cotton.  But what if I do my own research, and decide that I like cotton better than polyester?  I can vote, but if I lose, I can’t buy cotton.  And what about people who don’t just have a preference, but a need for a specific thing?  For instance, what about someone who is allergic to polyester?

I’m also not sure how it would work.  Not all commerce is done through wholesalers.  Would it become illegal to sell things without going through Democratic Wholesalers?  That idea makes me uncomfortable.  What if Democratic Wholesalers were to become corrupt?  I don’t like giving one group that much power.  Though it’s true that there are many entities in our current world that have a lot of power.

It’s interesting to consider what would happen were this system implemented.  I think people would become much more informed about the products they buy, since they need to vote on them.  Though maybe not, since people aren’t terribly informed about the political issues on which the currently vote.  I think a black market might emerge for the products that Democratic Wholesalers won’t buy.  It would be interesting to see what that would look like.  Because it would be illegal, advertising might be difficult (though maybe not, given the internet).

That said, I understand why it’s important to rethink our economic system.  I don’t think the heavy-handed Democratic Wholesalers idea is a good one, but maybe there could be another way.  The market system does not seem to be very effective at creating outcomes that are good for society, health, and the environment, since decisions are mostly made at the top, rather than coming from the bottom up.  Maybe there could be a modified Democratic Wholesalers system, wherein Democratic Wholesalers makes most of the decisions, but consumers still have freedom to deviate.  Maybe Democratic Wholesalers could choose what products were featured most prominently on store shelves, or gives discounts to certain products, while still allowing other products to be in the store.

Trial and Error

I’m wondering how trial and error might be done.  Professor Woodhouse mentions nuclear reactors, saying “The industry was inflexible, in part because billions of dollars had to be expended before a reactor generated a single kilowatt of electricity.”  Given that, how could more trial and error have been done?

My instinct here is to say that it could not, but I realize that that is legacy thinking and that people instinctively defend the way things already are.  So, how could the industry be more flexible and allow for trial and error?

I’m not sure.  Maybe smaller reactors?  Woodhouse mentions this.  Or what about making one reactor, and testing it?  Perhaps there should have been tests done to see what happens when there is no electricity, with many people on hand to deal with the damage.  The issue with that is that the test itself would have been very dangerous, but I think that only betrays how dangerous the reactors are.  Maybe there could have been simulations.  But honestly, I’m not sure that the problem with the Fukoshima reactors was that there hadn’t been effective trial and error.  I think the problems could have been predicted, but people didn’t think through things well enough.  It seems to me that people rarely do.

I think Woodhouse makes a good point about flexibility.  When a technology is inflexible, it’s difficult to change things when we discover that things are going badly.

A concern I have about the idea of trial-and-error is that I don’t think we necessarily know how something is going to go until we do it.  How can we fix this?  Instead of going to something large-scale right away, we can increase the scale little by little, testing to see whether it’s working.

I suppose that Woodhouse would say that if we can’t effectively use trial and error for something, we should err on the side of caution and not do it.  I do agree with the precautionary principle, but I don’t know if it should apply here.  Are there situations in which it makes sense to do something even when we can’t effectively try it out (or we can’t try it out enough to get a lot of information)?  I think there might, but I think those situations should be the exception, not the rule.  In general, I think there should be more trial and error done.  However, I think a lot of problems are caused not by a lack of knowledge about the harmful effects of something, but about people not caring (or not caring enough to fix them).  Would trial and error have made a difference in the case of the Ford Pinto?  Ford already knew what the problems were, and did not care.  Of course, if they had cared, trial and error would still have saved lives.