Sunday, August 02, 2009

Do You Believe in Magic?

Andrew Sullivan is just one of the myriad free marketers who does:

$20 a gallon is about the only thing that could unleash the genius of the market in energy innovation. And nothing else will really do anything to abate climate change. Bring it on!


Well a lot of technology will be economically feasible if gasoline reaches $20, but I don't believe that markets create innovation. What they can do is offer an arena in which known ideas can attract the resources that permit implementation.

The notion that markets innovate or foster innovation is almost entirely an ignorant superstition. This doesn't diminish the importance of free markets. Without free markets Steve Jobs' brilliant ideas would have been strangled at birth by the dead hand of Microsoft.