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Private Innovation Versus Government Centralization, Part 1

Transformative technological advances usually occur by private initiative and investment. Occasionally government trying to centrally micromanage them stumbles onto something, but that’s more by accident than anything else.

Think 5G wireless, where the private-sector-initiated open radio access network, or O-RAN, represents the former, and Communist Chinese-controlled national champions’ hawking commoditized, heavy infrastructure equipment at predatory, government-subsidized prices for the latter.

A market-based, private-initiative approach better serves individuals, society, industrial competitiveness and humanity in the long run than does centralized command and control. It’s far more prudent than politically trying to pick winners and losers.

Real innovation drives progress. Invention and the property rights to commercialize a discovery and reap the fruits of the inventor’s labor displace old technologies in a positive, constructive way. These advances spur the creation of new industries, new jobs and new wealth.

Such steady technological innovation grows the economy and increases the standard of living. The Founders got this, providing in the Constitution for securing private property rights in intellectual property. Other property rights are secured in the Bill of Rights.

At a time when communism and socialism threatened the world, President Ronald Reagan doubled down on free-enterprise innovation as the best solution. His Young Commission on Industrial Competitiveness said industrial competitiveness is “the degree to which a nation can, under free and fair market conditions, produce goods and services that meet the test of international markets while simultaneously maintaining or expanding the real incomes of its citizens.”

To achieve industrial competitiveness, innovation was our competitive edge. As Reagan observed, “Innovation spurs new industries and revives mature ones.” Reagan and the Young Commission had faith in the private sector to invent our way to flourishing, prosperity and competitiveness. Government command and control has an awful track record on innovation and wealth creation.

There’s a great example involving the Wright Brothers. In 1898, the U.S. War Department funded Samuel Langley’s failure to invent a working airplane. Meanwhile, the Wright Brothers succeeded at solving human flight with their own investment and ingenuity. The War Department wasted an initial $50,000 (equal to $1.54 million now) and ultimately a total of $73,000 (today, $2.13 million) on Langley, Secretary of the Smithsonian Institution, while the Wright Brothers spent less than $1,000 ($29,136 in today’s dollars) to succeed at human flight in 1903. And Langley’s taxpayer-funded failures included a very public, embarrassing crash in the Potomac River at Washington, D.C. So much for government central planning, command-and-control cronyism.

The American secret of success is to foster private initiative. It democratizes innovation, as our patent system traditionally did. It secures private property rights. It protects individual rights through due process and equal justice under law. It respects ordered liberty. It operates according to the rule of law. It runs best with limited government, moderate taxation and by federalism.

My Christmas wish this year for our United States is for a wholesale rejection of socialism in any and all of its ugly forms and a resurgence of and a recommitment to these vital components. They’re the underpinnings of the shining city on a hill where private property rights prevail and private initiative rewards risk with freedom to own securely and to enjoy the fruits of our respective labors.

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