Friday, June 25. 2010
New York federal judge Louis Stanton ruled that Google's YouTube did not violate Viacom's copyrights. It was a technical decision based on the Digital Millenium Copyright Act's safe harbor provision for service providers. To wit, service providers such as YouTube are not liable for the actions of their users as long as they follow certain rules, such as promptly removing copyright-infringing material in response to complaints filed by the copyright holders.
I'm not a legal expert, so I don't claim to know whether the problem is with the Digital Millenium Copyright Act or the judge's interpretation. But there is a problem here, because the ruling clearly favors those who provide a platform for displaying copyrighted videos without permission over those who produce video content for compensation.
I strongly suspect that Google's ultimate goal is to profit from others' copyrighted material by selling more advertising, and the way they are pursuing that goal is extremely clever. By slowly enlarging the scope of permissible copyright violations, Google is putting tremendous pressure on content publishers to cut a deal. It's revealing that judge Stanton said in his decision that YouTube and Google "not only were generally aware of, but welcomed, copyright-infringing material being placed on their website."
Here is the dilemma: digital technology and the Web make it easy to copy and redistribute content. Some activists argue that traditional copyright rules are obsolete and threaten the Web's ongoing success. Copyright holders fear that they will not receive fair compensation for their creative works because they will no longer be able to maintain exclusive control over those works.
The problem with the ruling is that it places too much of the enforcement burden on copyright holders in a game they can't possibly win over the long term. Should everyone who produces videos and films be forced to hire full-time people to monitor the Web and file complaints every time one of their copyright-protected videos is posted? Even if the service provider promptly removes the material, considerable damage can be done in a short period, and the material can always be reposted. And if it's OK to host copyrighted material without permission for 2 days, on what principle would it be wrong to extend that to 2 weeks?
The other extreme would be to place too great of a burden on service providers. For example, asking Internet service providers (ISPs) to inspect all of their traffic and block uploads before they are completed is clearly unworkable. It also wouldn't make sense to treat a Website that hosts user-uploaded videos the same as a site that knowingly distributes pirated material--as long as the user-uploaded video Website takes reasonable precautions to block and remove pirated material.
My understanding is that Viacom wants YouTube to make a reasonable effort to detect and block copyrighted material before it is posted. That makes sense to me, because it says that a Website that hosts user-uploaded videos should at least share the burden of identifying copyright-infringing videos. To say YouTube only has to remove copyright infringing material after it has been posted is tantamount to saying that it's perfectly OK to ignore copyrights until the owner complains.
Gazing into my crystal ball, I see weekends filled with stolen content uploaded on Fridays.
UPDATE: Scott Cleland explains why Judge Stanton's ruling is likely to be overturned.
Wednesday, June 16. 2010
Yesterday President Obama said we need to reduce our dependence on fossil fuels and produce more "clean energy." That may be so, but what are the chances that the federal government can cause a major shift to renewable energy by the end of the President’s second term—assuming he is reelected?
Consider these facts. The federal government has been pushing energy conservation and a shift to renewable energy since the OPEC oil embargo in 1973. There has been some progress, but it doesn’t amount to much. According to Wikipedia, renewable sources account for just 3.4% of electricity generated worldwide.
It gets worse. The vast majority of today’s renewable energy comes from hydroelectric plants—a technology that wreaks havoc with the environment—and biomass—a scientific euphemism for wood-burning stoves. Solar, wind, and geothermal energy barely register a blip on the global energy radar screen.
Having done some work in the solar energy field in the early 1990s, I am baffled by those who think we can switch to solar energy by decree. Today, solar energy is simply too inefficient, unreliable and expensive to meet our energy needs. People have been working on solutions to these problems for decades with only meager results. And contrary to reports in some science magazines, there’s little evidence that we are on the verge of a breakthrough. Today’s research could bear fruit in five years or fifty years. Or something unexpected might intervene, causing us to change course entirely.
I did some consulting work for a solar energy company called Midway Labs. The company’s founder, the late Paul Collard, wisely focused on developing a solution for small villages in Africa and Asia. Collard’s unique solution employed light concentrating optics and solar cells designed to withstand high temperatures. The system could generate enough electricity to meet a small village’s basic requirements, but it required a mechanical system for tracking the sun as it traveled across the sky. It also required a large bank of storage batteries to take over at night and on cloudy days. The cold, hard fact is that a gasoline-fueled generator is more efficient, more reliable, and less expensive.
What’s almost completely missing from the public debate about renewable energy is informed discussion about the manufacturing, distribution and maintenance challenges. We can build wind farms all across the U.S., but what’s the cost to build and maintain enough of them? How much energy will be lost transporting electricity from rural areas to population centers? What's the environmental impact of large-scale deployment? Similarly tough questions apply to solar electricity and rechargeable batteries.
As one skeptic observed, renewable energy sources must be subsidized to create demand, while the fossil fuel industry is profitable despite being heavily taxed.
Like the fiber-to-the-home technology in telecom, expect several impressive showcase deployments. But the mass market evolves according to its own timetable and logic.
UPDATE June 17, 2010: Today's IEEE Spectrum Tech Alert was dominated by bad news about renewable energy and CO2 emissions reduction. Both stories (California's Geothermal Plans in Trouble and Why Carbon Capture Won't Work) concern projects that depend on access to scarce water supplies.
Friday, June 4. 2010
All politicians believe they know what to do about the high cost of health care. There's just one problem: most of them are not qualified to solve the problem.
During the 1990s, we had the failed Health Security Act. The key elements of this plan were to increase government regulation and decrease the number of doctors--particularly specialists.
Now we have the Patient Protection and Affordable Care Act. The crux of this plan is to increase both government regulation and the number of doctors. However, there's strong evidence that the Obama Administration believes we should shift the emphasis of health care from aggressive, high-tech treatment to lifestyle management and hospice.
I admit that these plans have the potential to reduce costs. But I fear it will be by returning medicine (as experienced by the average consumer) to the 19th century.
Saturday, February 13. 2010
Steve Jobs expressed something that many of us have felt for a long time when he proclaimed that Google’s “Don’t be evil” mantra is BS. Google’s corporate motto makes us uneasy, but it’s hard to say exactly why. Even Jobs only managed to lash out—missing an opportunity to clarify an important issue.
“Don’t be evil” sets the bar way too low. Some deeply religious individuals may consider all unethical behavior evil, but most people reserve the word “evil” for extreme acts—the kind that inflict pain or involve violence. “Don’t be evil” leaves the door open to things you know are wrong but somehow manage to rationalize.
“Don’t be evil” is way too vague. People have debated what types of behavior are and are not ethical since the beginning of recorded history. Most organizations that care about what’s right go to much greater pains to stipulate what’s wrong. Often that means establishing and promulgating a code of ethics. Life, including business life, presents us with many ethical dilemmas and it helps to have guidelines to remind us of what’s expected in different situations.
“Don’t be evil” is way too subjective. People may disagree about whether a specific act is evil or just in bad taste—particularly if one happens to be the offender and the other happens to be the offended. It also leaves it entirely up to individuals to decide whether it’s OK to do something bad as a means of accomplishing something good.
They say the road to Hell is paved with good intentions. Socrates taught that doing the right thing is not a matter of intention but a matter of knowledge. With its “Don’t be evil” motto, Google does more to sidestep ethical issues than to set a worthy standard.
Saturday, January 2. 2010
Science Daily reports that a new study by Wolfgang Knorr of the Department of Earth Sciences at the University of Bristol "reanalyzed available atmospheric carbon dioxide and emissions data since 1850 and considers the uncertainties in the data" and finds that there has been no increase in the fraction of airborne carbon dioxide in the past 160 years.
Knorr's research was published November 7, 2009 in Geophysical Research Letters.
I have no reason to conclude that Knorr is trying to debunk global warming. But it's nice to know that there are still scientists who revisit the data and challenge aspects of prevailing theories. (I suspect more and more that it's journalists and politicians who are pushing the notion that these issues are settled.)
A couple of interesting resources readers may want to check out: World Climate Report and Roger Pielke Jr.'s Blog.
Friday, December 18. 2009
A popular argument for supporting climate change legislation is that the risk of doing nothing is too high. According to Greg Craven, a high school science teacher who produced the wildly popular "The Most Terrifying Video You’ll Ever See,” the global climate is a non-linear system “capable of sudden, unexpected lurches set off by seemingly small bumps.”
So Craven asks: What’s the worst that can happen if we don’t do something about global warming right away? Answer: A worldwide economic, political, social, environmental, and health catastrophe.
OK, I’ll bite. I agree the risk of doing nothing is greater than the risk of acting unnecessarily.
Now, in the same spirit of open mindedness, I’d like to ask climate change activists to consider an alternative solution. According to conventional climate change thinking, the proper response is to reduce industrial greenhouse gas emissions; convert to cleaner cars; and encourage citizens to rely more on mass transportation, bicycles, and walking.
I propose, instead, that we use biotechnology to reabsorb atmospheric carbon dioxide. According to Freeman Dyson, the United States alone could accumulate enough CO2 absorbing topsoil to more than compensate for the growth of CO2 emissions (which is largely due to the burning of coal by China). This approach has several major advantages over conventional proposals.
The conventional proposals bet the future of the planet on our ability to reduce greenhouse gas emissions fast enough. But what if we can’t? It may be easier to scale up the biotechnology to compensate for CO2 emissions than to scale down industry.
The conventional proposals rely on compliance by all major industrial countries. There will probably be some cheating. China may not even go along. If we use biotech to compensate for CO2 emissions, then it may not matter who cheats or doesn't go along.
The conventional proposals risk a reversal in worldwide development. After all, that may be the price of reducing CO2 emissions. A decline in living standards is possible, and that could lead to food shortages, disease epidemics, and other problems.
The conventional proposals put the main burden on developed countries. Given that most of the world sees economics as a zero-sum game, the real motivation may be redistribution of wealth. Using biotech to compensate for CO2 emissions subverts demands to redistribute wealth. (In fact, if the U.S. undertakes the bulk of the effort, then we should demand reimbursement from the United Nations.)
The conventional proposals call for switching from proven fossil fuels to unproven "green" technologies. For example, we don’t even know the cost (whether in dollars or environmental impact) of converting tens of millions of automobiles from gasoline to electric batteries. Using biotech to compensate for CO2 emissions delays the need to switch to alternative energy sources.
The conventional proposals call for research in a set of favored technologies, but ignore other routes to the same destination. For example, why not pour research funds into making nuclear energy production and waste disposal safer and developing new ways to scrub automobile exhaust? If that works, then we should invest in developing more cost-effective ways of extracting oil from shale.
In contrast, the development of biotechnology to compensate for greenhouse gasses could empower us to better control our environment over the long-haul. We could dial up when we need more compensation and dial down when we need less. By keeping existing pollution controls in place, we might be able to compensate for any increase in greenhouse gasses without further damping industrial activity.
Biotechnology is already delivering benefits in other areas and promises much more. Developing biotechnology for absorbing CO2 will surely lead to other discoveries and inventions. We may even learn along the way how to use biotech to produce clean fuel.
If we really need to act on climate change, then it would be much wiser to focus on proactive solutions like growing more topsoil than reactive solutions like scaling down industrial activity and switching back to more primitive sources of energy such as wind.
UPDATE December 21, 2009:
Nathan Myhrvold, former Chief Technology Officer for Microsoft, has proposed another alternative that may not require downsizing industry and marching backwards. (Though his company presents it as a "backup plan" in case reducing emissions doesn't work fast enough.) Myhrvold's scheme is to pump sulfur particles into the stratosphere, increasing the percentage of sulfur particles by just 1%. Doing so would reduce the amount of the sun's heat that reaches the ground and lower atmosphere. Because volcanoes do the same thing naturally, we know that it's safe.
Thursday, December 10. 2009
We are inundated with doublespeak. "The Fairness Doctrine," "The Campaign to Put Patients First," and "Net Neutrality" are just three examples. The people interested in reviving the "The Fairness Doctrine" are trying to curb free speech--not protect it. The goal of "The Campaign to Put Patients First" (by an advocacy group that calls itself "The National Health Council"--yet another example of doublespeak) is to further empower politicians and government bureaucrats--not patients. Likewise, "Net Neutrality" is a government power grab based on false accusations and scare tactics.
Advocates of Net Neutrality say that government regulation is desperately needed in order to preserve the Internet. Never mind that the commercial Internet has been evolving without the benefit of such regulations for over 20 years. Never mind that the Internet is a classic example of a self-organizing system. If Net Neutrality advocates were truly committed to preserving the Internet, they would seek first and foremost to preserve its unregulated and self-organizing nature.
An excellent White Paper by Barbara Esbin of the Progress & Freedom Foundation was brought to our attention by Scott Cleland's Precursor Blog.
As Esbin details, the arguments for Net Neutrality depend heavily on assertions about what broadband ISPs will supposedly do in the future. There's no evidence that broadband ISPs are slowing or blocking content today in the ways alleged, and there's no viable business model for them to start doing it tomorrow.
Why would some companies support Net Neutrality? Because lobbying government officials is competition by other means. Companies tend to look at government regulations purely in terms of how the regulations affect their business model. If you look closely, you'll see that companies supporting government regulations often have reservations. To wit, they want the regulations applied to competitors, while they claim special exemptions.
Monday, November 23. 2009
In late 1961, Ayn Rand gave a speech entitled “America’s Persecuted Minority: Big Business.” Her speech began with these words:
“If a small group of men were always regarded as guilty, in any clash with any other group, regardless of the issues or circumstances involved, would you call it persecution? If this group were always made to pay for the sins, errors, or failures of any other group, would you call that persecution? If this group had to live under a silent reign of terror, under special laws, from which all other groups were immune, laws which the accused could not grasp or define in advance and which the accuser could interpret in any way he pleased—would you call that persecution? If this group were penalized, not for its faults, but for its virtues, not for its incompetence, but for its ability, not for its failure, but for its achievements—would you call that persecution?
However true those words were in 1961, they could not be more spot on than today. The persecution of big business has been institutionalized in our media, schools, and public discourse. And the charges Rand enunciated—making businesspeople pay for others’ sins, treating their guilt as a foregone conclusion, applying vaguely defined laws to them alone, and punishing them for their achievements—are more applicable today than ever.
Let me recount some of the ways. We vilify the captains of the oil, coal, and nuclear power industries. Never mind that they provide abundant energy for transportation, manufacturing, and our homes, schools, and hospitals. The party line is that they are destroying the earth. Only by relying on inefficient and unreliable forms of energy such as windmills, solar cells, and geothermal power can we avert disaster. Oxcarts, anyone?
We promote “green” technology—a strange mix of primitive technologies (that, ironically, only the wealthy can afford on a practical scale) and nature worship. We mandate a transition to electric cars that only the ideologically motivated want. We build windmills and solar panels that put our power requirements at the mercy of the weather. The essence of the green movement is that our great industrialists have done more harm than good, and we would all be better off if we returned to the natural state from which we came. Ah, the good old days—when the average lifespan was 30 years.
No industry is spared our wrath. The banking industry is required to provide mortgages to people who can’t afford them. When banks that make bad loans inevitably fail, it’s the bankers’ fault. But not to worry: the government will take over the banks and cover their losses so that the practice of giving out bad loans can continue.
Then there is the target du jour, the health insurance industry. When I hear people discussing health insurance I often find myself wondering if they have the slightest inkling of how the insurance business is supposed to work. It’s a very simple concept. Customers pay low recurring fees for insurance against unlikely but very expensive catastrophes. We have strayed so far from the original model, however, that it’s hard to see what it has to do with today’s health insurance business. Health insurance executives are now expected to insure everyone against everything. When there is no buyer-seller dynamic, prices become terribly distorted. To wit, many people feel that it would be perfectly reasonable for health insurance companies to pay out more than they take in.
You know it is persecution when businesspeople are thrown in prison for crimes that few people would consider more than misdemeanors. Michael Milken was indicted on 98 counts of racketeering and fraud. It sounds like Milken—who donated huge sums to medical and education causes—is a very bad man. But consider this: he was sent to prison based on a plea bargain in which he admitted to six felonies that are about as nefarious as turning in your homework a day late. For example, Milken pleaded guilty to sending confirmation slips through the mail that failed to disclose that a commission was included in the price. And the sixth charge was conspiracy to commit the other five.
Don’t get me wrong. I’m not saying that there aren’t any crooked businesspeople. There’s no doubt that Bernard Madoff committed fraud.
But it’s also wrong to falsely accuse people just because they are successful. They might have done something right.
Tuesday, September 29. 2009
Perhaps the most important question confronting the civilized world today is whether it is possible to stop belligerent, totalitarian regimes from acquiring weapons of mass destruction.
As technology advances it becomes more accessible and affordable. A few decades ago, only large corporations and government agencies had computers. Now just about everyone has them.
I don’t think it’s possible to stop Iran’s Islamic supremacist leaders from acquiring nuclear weapons. But it may be possible to delay them long enough to bring down the regime.
The urgent question is: what is Iran’s strategy? The regime has been leading chants of “Death to America!” and “Death to Israel!” at mass rallies for 30 years. Iran has displayed missiles carrying banners threatening Israel’s destruction at military parades. Mahmoud Ahmadinejad has conducted a long and public campaign of Holocaust denial coupled with predictions that Israel will soon disappear. And it is no coincidence that Iran tested a missile capable of reaching Israel on Yom Kippur.
I believe Iran’s current strategy is to provoke an Israeli attack. This would accomplish two things for Iran. It would give credence to the claim that Israel is the aggressor. And it would provide Iran the pretext for developing nuclear weapons and using them. In coordination with this strategy, Iran may only be developing the technology they need for nuclear weapons but not yet the actual weapons.
Some Israelis take comfort in the knowledge that most of the Arab world is equally afraid of a nuclear-armed Iran. I’m not sure about that. A few Arab states may privately welcome a preemptive Israeli strike, but publicly they will all use it against Israel.
So what is to be done? It’s very unlikely that sanctions will stop Iran from developing nuclear weapons. It’s even less likely that Iran’s leaders can be dissuaded through “engagement.”
That leaves three major options: (1) buy time by knocking out Iran’s nuclear and missile programs; (2) arm, train, and support pro-Western Iranians for the purpose of overthrowing the current Iranian regime; or (3) establish a credible deterrence.
The best option would be to assist Iranians in overthrowing the regime. There is clearly broad support within Iran for regime change. However, President Obama has apologized for the U.S.’s role in overthrowing a previous Iranian government, so it’s unlikely he would turn around and support overthrowing the current government. And it’s even less likely that President Obama would start a military conflict.
A preemptive military strike by Israel is problematic. There would have to be a good chance of setting back both Iran’s missile and nuclear programs for several years. And Israel would need, at a minimum, a public declaration by leading Western powers (the U.S., Germany, France, and the UK) that the threat posed by Iran is unacceptable, that further sanctions are unlikely to succeed, and that the situation calls for urgent action.
In dealing with these types of problems it’s important to consider all of the possibilities. In order to justify its invasion of Poland, Nazi Germany staged a fake attack by Poland on itself. What if Iran staged a fake attack by Israel on itself in order to justify launching a nuclear attack?
Israel’s current policy of “nuclear ambiguity” is apparently not working. Therefore, Israel needs to take further steps to establish a credible deterrence. One approach would be for Israel to take its nuclear capability public and indicate that if attacked with WMDs she will retaliate against all of her enemies (to remain nameless). Or it may only be necessary for Israel to convince her enemies that they cannot merely absorb a counterattack as they fantasize.
The counterargument is that mutually-assured destruction doesn’t intimidate Islamic supremacists because they are willing and perhaps even eager to die for their cause. Don’t believe it. Though they exhort others to carry out suicide attacks, the leaders want to stick around to enjoy their palaces and concubines.
Tuesday, September 15. 2009
Precursor LLC analyst Scott Cleland has released a white paper Googleopoly IV: Monopsony Control over Digital Info Competition. It's as alarming as it is fascinating.
The white paper concludes with these recommendations:
The DOJ/FTC should establish and publicize a hotline phone number and web address where those who believe they have been harmed by Google's monopoly/monopsony market power can confidentially report evidence.
From what I've seen, Cleland is generally skeptical of government initiatives to ensure telecomm competition and guide the industry in serving the common good. So it's a bit shocking to see him calling on government agencies to move aggressively against Google. I'd like to know more about why, in this case, he believes competition and copyright law offer insufficient protection. I'm concerned about Google's alleged abuses. However, based on history and experience, I'm also concerned that the DOJ/FTC could end up striking a deal with Google that would make some abuses permanent in exchange for support for specific government initiatives.
Monday, September 14. 2009
I wrote previously that contemplated health care reforms could discourage health care technology innovation. I didn't know how right I was.
The proposed health care reform legislation being considered by the Senate would impose a $40 billion tax on medical devices and diagnostics. According to AdvaMed (the Advanced Medical Technology Association), an industry group that otherwise supports health care reform, the tax will raise health care costs and amounts to a double tax hit on the industry.
From AdvaMed's September 8, 2009 press release:
“While AdvaMed supports broad-based health care reform and has been working to achieve that important goal, we cannot support a proposal that unfairly singles out the medical technology industry for a tax on innovation on top of the billions in cuts that the industry would already have to absorb within the health care reform proposal. We will continue to work with Congressional leaders and the White House to further real health reform and to eliminate this counterproductive proposal from any reform package considered by the Congress.”
UPDATE Sept. 15, 2009 12:00pm:
According to an article in the Wall Street Journal, earlier this year AdvaMed lobbied to have taxes imposed on hospital purchasing groups. Therefore, according to the article, they are only getting what they deserve.
On the contrary, what this proves is that when government meddles in markets such as health care, it's only natural that the participants respond by jockeying for position. To wit, "Give me the stimulus funds and make my adversaries and competitors pay." The top priority of most businesses is to play ball with whoever controls the White House and Congress.
Monday, August 31. 2009
The FCC has announced plans to investigate the wireless industry ("Fostering Innovation and Investment in the Wireless Communications Market").
The Competitive Enterprise Institute responds:
"The wireless industry is the last place regulators should be looking for alleged anti-competitive behavior. The wireless market is intensely competitive, and consumers enjoy a dizzying array of competing mobile platforms and service arrangements," said Ryan Radia, Information Policy Analyst. "Consumers looking for a mobile handset can select from the open source HTC G1 to the walled-off iPhone, and everything in between. In addition, practically every big wireless provider offers both long-term and month-to-month service options. Where is the anti-competitive behavior?"
Friday, July 24. 2009
Most scientists and science enthusiasts were delighted when Barack Obama was elected President. Many felt that the Bush administration was anti-science and that the younger Obama crowd is more in tune with modern science and advanced technology.
I don't claim that the Bush administration was particularly pro-science. But in the short time that President Obama has been in office, he has exhibited feelings bordering on contempt for several technologies and technology-based industries.
Most recently, the President has weighed in on modern medical practices, suggesting that many expensive medical procedures are unnecessary (e.g., tonsillectomies) or wasteful (operating on grandmothers who, according to him, should instead be given pain killers).
Is this the same President who assures us that his proposed health care reforms will not limit our choices? It sounds like he is preparing us for greater oversight--if not outright rationing--of health care services.
The Obama administration has also taken sides on a number of scientific controversies. It's one thing to be concerned that human activity is causing global warming which, in turn, may be damaging the environment. But it's another to wholeheartedly embrace a chain of disputed theories. A genuinely pro-science administration would understand the importance of skepticism in science. The President should not be seen as discouraging critical thinking, debate, and synthesis of new ideas.
President Obama's choice for Surgeon General, Dr. Regina Benjamin, is also troubling. Dr. Benjamin practices family medicine in a rural health clinic. She is about as removed from leading centers of medical research, high-tech hospitals, and the full panoply of medical specialists as one can get. I don't mind that family medicine emphasizes prevention. But the notion of family doctor-centered health care seems to hearken back to a simpler time.
President Obama has expressed hostility towards proven sources of energy such as oil, coal, and nuclear fuel. Instead, he wants us to invest in less concentrated and less reliable sources of energy such as wind, sunlight, and batteries. We don't know whether these sources can even meet our present energy needs, nor do we know the real costs (dollars, impact on the environment, etc.) of their large scale adoption.
The greatest benefit of science is that it provides an array of tools and conveniences to empower individuals. Yet most environmentalists believe we should rely more on public transportation, car pooling, bicycles, and walking.
Obama has repeatedly expressed the view that high-tech industries, if left to their own devices, would serve only a privileged few. This is simply not true. High-tech industries have demonstrated over and over that they will drive down prices, expand existing markets, and seek new markets if permitted to do so.
Does the administration's support for embryonic stem cell research and electronic medical records (EMRs) show that it is more supportive of science than the Bush administration? The Bush administration did not oppose stem cell research or even embryonic stem cell research. It opposed, on ethical grounds, federal funding of further harvesting embryonic stem cells. The Obama administration cleverly portrayed this as an "Are you for or against science?" issue as a way of dismissing legitimate ethical concerns.
Electronic medical records (EMRs) are a government bureaucrat's pipe dream. The U.S. health care industry already has the ability to share patients' medical data electronically (fax and email). Many hospital IT departments allow doctors to access patient records, including test results and scans, from any PC on the network. Many in industry believe that EMRs are already obsolete. This isn't about government prodding the health care industry to be more efficient; this is about government inventing excuses to grab more power. (By the way, the Clinton and Bush administrations also supported EMRs.)
There are two ways that the President can support science. First, by ensuring that scientists are free to investigate and promote whatever theories intrigue them. Some theories deserve to be laughed off the stage, but the marketplace and not government officials should decide. The clash of opposing ideas is essential to the progress of science.
Second, the President can demonstrate, in words and deeds, appreciation for a wide range of scientific achievements.
Sadly, President Obama seems to think he can support science by choosing winners in theoretical disputes and in the marketplace. That's not being pro-science, that's simply imposing his political views on science.
Wednesday, June 3. 2009
The current debate about how to reform the U.S. health care system revolves around two issues: access and affordability. We are reminded almost daily that approximately 46 million Americans are uninsured. And we are warned that at the rate costs are rising health care will consume one-third of our GDP within a few decades.
Missing from the debate is how to ensure the flow of innovation that made the U.S. health care system the envy of the world. Are we so obsessed with financial security that we are willing to risk future medical advances?
I’m sure some will dismiss what I just said as a mixture of false pride and alarmism. But I’ve done my homework. (My book on the history and future of medical technology will be published later this year.) Many of the medical miracles that we now consider a birthright could not have been brought to market under today’s regulatory regime. Read on, and I’ll explain why the proposed reforms could bring medical technology innovation to a screeching halt.
First, we need to get a key fact straight. No one in the U.S. is being denied life-saving treatment. There is not a single emergency room in the U.S. that would turn away someone in urgent need of medical care just because they lack health insurance or are unable to pay. The pundits who keep harping on the 46 million uninsured Americans are the alarmists. Many of the uninsured are young and healthy. Some are between jobs. Others choose to pay for their own health care. Simple math says that there must be over 250 million Americans who do have some form of health insurance—so 46 million uninsured is hardly a national calamity.
That’s not to say everything is hunky-dory. Health care costs in the U.S. have soared. But it’s not because advanced technology has driven costs through the roof. It’s because of the bureaucracy associated with filing and tracking claims. It’s because the third-party payer system prevents prices from guiding supply and demand. It’s because the FDA has made bringing new drugs to market horribly expensive. And it’s because of huge malpractice awards.
So how would proposed health care reform endanger innovation?
A major goal of health care reform is to rein in costs. Unfortunately, new technology is always more expensive than mature technology. It takes time to recoup the cost of developing new technology. It takes time to reduce the cost of manufacturing it. And it takes time and money to build the market; volume production is the ultimate source of low prices. In a nutshell, reforms that curb costs will discourage the introduction of new technologies because new technologies are inherently more expensive.
The Obama administration believes that we can drive down the cost of health care by mandating the use of electronic medical records (EMRs). Going to a paperless system will squeeze out some costs and EMRs offer other benefits. However, forced adoption is often more expensive and time consuming than natural adoption. EMRs could divert resources from other worthy and perhaps more timely technologies. Plus, the government has been pushing EMRs for 15 years without success, and industry giants such as Microsoft and Google now think that Internet-based personal health records (PHRs) are a better bet. Who would want government-mandated EMRs when they can have patient-controlled PHRs?
Despite the overwhelming historical evidence, we no longer believe in the system that has brought prosperity to the greatest number. We continue to harbor the illusion that a centralized, planned system is more efficient and fair. But it’s the self-organized system that is more conducive to innovation.
Health care reform does not have to be the end of medical technology innovation. In order to get what they want, the proponents of a national health system may agree to a compromise that permits an alternative private health care system for those who are willing and able to pay extra. The private system could become a test bed for new technologies. Heck, a dual health care system could end up being more competitive than what we have today.
But a dual system is not a sure bet. It may take several years of rationing and bureaucratic indifference to spur another round of reforms. And that is not a pleasant prospect.
Monday, May 25. 2009
Speaking to the annual gathering of the National Academy of Science, President Obama announced the goal of spending more than 3% of the United States’ gross domestic product on research and development. The President believes that increased R&D spending will spur innovation.
No one can deny that government-funded research has produced some spectacular successes—particularly in national defense and space exploration. But its record in other spheres is not nearly as good. Worse, government tends to politicize everything it touches, and for science that can be the kiss of death.
Most great inventions come from the private sector. This is an indisputable fact. The telegraph, telephone, trains, automobiles, airplanes, radio, and television were all developed by the private sector. And it is no accident. Businesses, if only to survive, must create products people want, in forms they can use, and at prices they can afford.
Proponents of government-funded research counter that while most inventions come from the private sector, most of the fundamental science behind those inventions does not. We need government to ensure enough “pure research” is being conducted now to fuel commercial innovation later.
That sounds reasonable, but it does not comport with the facts. The charge that the private sector eschews basic research isn’t true. In the past, Bell Laboratories and the Rockefeller Institute for Medical Research were leaders in both basic and applied research. Large corporations such as IBM and private universities continue to conduct basic research. Granted, the private sector may be conducting less pure research today, but that’s largely due to high corporate taxes and absurd reporting rules for publicly-traded companies.
I discussed John D. Rockefeller’s contributions to medical research in a previous post. My purpose at the time was to show that Rockefeller—accused of being a 19th century robber baron—has been maligned. But there is another point that needs to be emphasized. As a private philanthropist, Rockefeller was able to apply his business skills and connections to achieve very ambitious goals. He consciously avoided one of the pitfalls of government-funded research: the creation of a class of researchers who exist merely to feed at the public trough. To wit, Rockefeller obtained a bigger bang for his research buck than government has ever achieved or is ever likely to achieve.
But that’s not all. Government funding of scientific research is fraught with danger. Government often favors specific technologies or scientists for political reasons. For example, government has proved highly susceptible to political pressure from environmentalists. (Consequently, a great deal of research these days targets unreliable and uneconomical "alternative energy sources.") Government officials are sometimes tempted to use procurement and regulations to help their friends. The point is not that business people are inherently more ethical than government employees. The point is that business people are ultimately judged according to an external standard (the marketplace), while government employees are mainly judged by other government employees.
The biggest problem with President Obama’s research policy, however, is that it could end up thwarting innovation. Politicians like to manage and control things. Naturally, they are reluctant to admit that innovation often occurs spontaneously and comes from unexpected sources. There’s nothing wrong with a modest amount of government-driven research. But when government dominates the business of research as President Obama intends, there is real danger that genuine innovators will be crowded out.
Is there anything government can do to promote science and technology innovation? The answer is “No and yes.” For starters, politicians must realize that you can’t stimulate innovation as much as they pretend, and you certainly can’t plan it. Above all, innovation requires freedom. It’s all about doing what others think can’t be done or shouldn’t be done or isn’t worth doing.
There is one other thing that politicians can do to promote science and technology innovation. They can reverse Western Civilization’s slide towards mediocrity. I’m talking about the phenomenon that is best exemplified by the popular education slogan “Let no child be left behind.” It is a noble sentiment that in practice translates to “Let no child get too far ahead.” We have to choose: do we want everyone to be equally unsuccessful or are we willing to let a few excel? Innovation requires accepting and even embracing unequal outcomes.
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