01
Oct
12

We cannot rely upon the acumen of billionaires

Witness, dear friends and gentle lurkers, the triumphant return to blogging of Megan McArdle:

I refer, of course, to a random selection of the comments from said post, which show that if we judge ourselves from the quality — lol, dear readers, I kid; if we judge ourselves by the vociferousness and ignorance of our critics, Ms. McArdle has you and me both beaten by a millenium’s worth of utterly undeserved prejudicial approbation.  Take a moment to read through that blog post, and another moment to skim through the shallow haterade of the comment thread.  I find the term “haterade” a bit robust for some of those comments; perhaps I should say hate-Vitamin Water.  It doesn’t have the same ring to it.

In any case, the post itself is a classic of the genre.  It contains paragraphs like this one:

The increasingly mandarin elite, hygienically removed from the grubby business of scrounging for customers, frequently seems to have no idea at all what goes on in companies.  Stop grinning, Republicans; I mean you too.  Yes, too many liberals seem to believe that all infelicitous market outcomes can be cured by appointing a commission composed of really top-notch academics–during the debate over health care reform, the words “peer reviewed study” were invoked by supporters with no less touching a faith than an Italian grandmother performing a rosary for the salvation of the godless Communists.  On the other hand, here comes the GOP claiming that entrepreneurship can be started or stopped with small changes in marginal tax rates, as if one were turning on and off a light.  This is no less of a technocratic fallacy, even if, as with many technocratic fallacies, there is a grain of sound theory buried somewhere under that towering mountain of unwarranted assumptions.

And this one:

Take advertising.  Some of it aims to increase consumption of a product; the “Got Milk?” campaign is a famous example.  But that doesn’t mean it works–the Got Milk? campaign,which went nationwide in 1995, doesn’t look to me like it had much lasting impact on milk sales. Yet that doesn’t mean it was unsuccessful, because the trade association that paid for it probably did achieve its primary goal: showing members that they were actively promoting the interests of dairy farmers.  The members, not milk-buyers, may have been the real “audience” for that campaign.

And these:

The flip side of this is the people who think that companies don’t do anything at all that couldn’t be done better by government or academia . . . except sit back and rake the money in.  This is particularly prevalent in discussions of health care, but it frequently pops up elsewhere.  My favorite in this genre is Jerry Avorn, the professor of pharmacoeconomics who told Ezra Klein that we didn’t really need drug companies because now academics with good drug prospects could simply go straight to the capital markets and raise money to fund their own projects.

This is simply breathtakingly wrong.  For one thing, venture capitalists want an exit strategy before they will put money in, and in biotech, exit is often a sale to a big pharmaceutical firm; no Big Pharma, no VC funds.  And second, few newly hatched biotech firms have the complementary capacities to bring a drug to market by themselves.  Forget the sales force; I’m talking about the expertise to get the thing through the FDA approval process and produce it in massive quantities.  How do they acquire those capacities? They partner with Big Pharma, or license to them.

This particular post is (as I’ve claimed) Vintage McArdle in three ways.  First of all, it presents the basic fact that private industry (a) must grapple with impossibly difficult and horrendously poorly-understood problems of logistics and consumer preference on a routine basis utterly unknown to the intellegentsia and (b) gets those problems wrong on a drearily consistent basis.  Second, it points out that both the statist warmachine Democrats and the statist warmachine Republicans (or did I get those backwards?) are equally complicit in the “nonono, just wait, I can fix that for you” sweepstakes, although they’re turning the gain knob in opposite directions.  And finally, it provokes the usual collection of HURR DURR KOCH BROTHERS SELLOUT WHARRGARBL trolls from the why do you even bother? corners of the internet that I’ve missed since the last time some evangelical fuckhead decided that because (a) I support gay rights and (b) I say “sucks dead donkey dick” every once in a while that I must therefore support necrobestiality as a lifestyle choice.  TROLOLOLOLO-LOLO-LO-LO.

Problem, commentariat?

So, teaching points from that post I linked to at the top of this ‘un:

  1. Running a business is hard, and
  2. You’ll fuck up a lot.

Does that strike me as a great basis for politico-philosophical extrapolation?  Nope.

Funny, that.

(Subject line reference.)

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