Chapter 8 of David Nye's book,
Technology Matters: Questions to Live With
, is titled "Should 'the Market'
Select Technologies". The chapter, like the others discussed so far, is a fairly easy read, referring to scores of items from the literature on technology with references to their sources. As such it can serve as an introduction to the subject.
The chapter mentions American experience with patents and the history of the Office of Technology Assessment. It may have focused a bit too much on poor technology choices by government (suggesting that Congressional support for the Federal Highway system was badly planned and contributed to energy overuse, and suggesting that Swedish and Danish legislative decisions on nuclear energy were better than those of the U.S. Congress.) The Congress funded the first telegraph lines and subsidized the first railroads in the United States, and government bodies supported the development of canals, potable water supplies and sewerage -- all of which seem to have been good decisions.
It might have been useful to point out that decisions on
public goods (rather than private goods) have to be made by governments. The issue for these decisions may not be whether they should be made by the public sector, but rather how they should best be made by the public sector. It makes a big difference if the decision is made by legislative bodies, by executive bodies, or by judicial bodies. (The resolution of tort cases might, I suppose, be in effect a social choice for a country, as for example strongly encouraging auto manufacturers to produce safer autos.) In all there cases, it matters whether the actual decision makers are provided with good advice rendered through a good process. I personally favor peer review at the micro level when choosing which technology development projects to subsidize. Science and technology advisory bodies are found in all three branches of government. While these may be composed entirely of experts in technology, they may also include experts from the social sciences to help predict technology impacts, ethicists to deal with ethical advice, and members of the community to deal with cultural values.
We seem to feel that public safety issues often require government oversight. Thus we have drug licensing laws and building codes. In part this is a recognition that the people affected by the technological choice often do not have the knowledge and skill to make such decisions well, nor would it be efficient to require all members of the public to make these decisions from scratch. Think about each commuter making an individual decision as to whether a bridge was safe enough to traverse that day, or an airplane safe enough to ride. Incidentally, the Federal Aviation Administration seems to be the very model of a government agency which has helped society make technological choices to assure public safety, as the safety record of commercial airlines attests.
In the area of medicine, American culture holds that individual choices of drugs and procedures be informed by consultation with physicians. Physicians are licensed, and bodies such as
The Cochrane Collaboration (in Civil Society) and the FDA seek to assure that physicians have adequate information to provide good advice. The profession is self regulating, with certification involving proof of continuing education, as well as regulated by government. I belong to an HMO, and the HMO also has bodies which review developments in medical technology, defining norms and standards informing the physician members of the organization. Of course, pharmaceutical manufacturing company executives are making technological choices that affect future health care decisions, as are officials in government agencies such as NIH and officials in foundations funding biomedical research. In short, the choice of technology in the health care field is quite complex, and a dichotomy between Market and Government does not do justice to how choices are made. Still, Nye's discussion raises further questions as to how society should make longer range decisions such as how much to spend subsidizing health care or whether to seek drugs to enhance mental performance. The Bush administration's decision process with respect to stem cell research might have been adduced as an example of what not to do in such decision making.
I was surprised that Nye did not address the literature on diffusion of innovations. It focuses on how decisions are made by large numbers of people who are potential users of a technology. The prototypical study in this field is how the spread of new cultivars spreads in farming communities. Each farmer decides which seed he/she will use, but studies indicate that the decision is made communally through a system in which early adopters try out a new variety, and if it is successful, the use spreads to other farmers in the community.
Note, however, that the new varieties once developed through traditional practice, later were developed by governmental agricultural research stations, and more recently are increasingly developed by the private sector. The switch from public to private agricultural research was in part due to the development of hybrid varieties that did not breed true, allowing private sector seed companies to protect their investments in new varieties.
Technological advice to farmers can be provided by government, as in the case of agriculture extension services. It can also be provided by the private sector, as in the case of seed stores and retailers of fertilizers, pesticides and farm machinery. The private sector providers may not only provide advice related directly to the products they sell, but may provide more general information as a sales promotion vehicle.
In India, there are networks of community Internet providers which allow for farmers to ask technical questions of farmers in other connected communities. As I mentioned in a previous posting on this book, decisions on building new irrigation facilities, on the allocation of irrigation water, and even on irrigation schedules are made in the rice fields of Bali by water temple priests.
Again, the ways in which technological decisions are made in agriculture are very complicated. Another example comes to mind. The dust bowl phenomenon in the United States was caused by millions of farmers making individual decisions which left large areas of soil poorly protected. Government intervened with a number of programs, from providing soil conservation advice via agricultural extension to developing a soil bank program.
Nye perhaps did not do justice to technology decision making in industry. In a previous chapter he mentioned the mistakes made by manufactures in failing to respond early and strongly to technological change, as when IBM failed to recognize the shift from main frame to mine and then micro computers. When IBM was making those decisions it held a dominant position in the computer market. Even more to the case were the decisions made by AT&T when it held a monopoly position if telecoms as to handset design. In such cases the dominant technological decision maker is a large bureaucratic organization. As Henry Ford famously said, "let them buy any color car they want, as long as it is black".
I would note that today Intel, Cisco, Boeing and other firms seem to be making very good technological decisions, holding large market shares and advancing the technologies in which they hold major positions. The U.S. military system seems to be making good enough technological decisions that U.S. forces have held a technological advantage in recent engagements. Bureaucratic technological decision making, like that in other sectors, can be effective or ineffective.
I have been reading Robert Ryal Miller's 
. It is another good book, covering the history from pre-Columbian times to the mid 1980's when the first edition was published, with a brief postscript for the 1996 printing. As one might guess from the fact that the book has been in print for 25 years, it is accessible, providing a good synoptic view of Mexican history.
). The Dutch and English colonists of the northern colonies came expecting to work farms and develop industry, the Spanish colonists of New Spain came to extract wealth from the indigenous population. The United States developed around institutions patterned after those of England while Mexico was built around Spanish institutional models. The United States, especially the North and the frontier was based on individual liberty, while Mexico was based on peonage.
. We all agreed it was a good read, the result of great skill by the author in presenting economic ideas accessibly. The book traces the history of the United States through the lens of an economist. It makes the point that technological innovations have been extremely important in American growth. I also found it to provide a very good explanation of how the differences in agricultural resources between the southern and northern colonies of what became the United States led to social and economic patterns in their societies (which later led to the Civil War and the postbellum differences between northern and southern states).
(another good book enjoyed by our book club). I found that paper to be equally remarkable, recommending many policies that were later implemented, and indeed are still relevant today.
, describes how a number of societies advanced through the use of social organization and technological innovation while depleting the resources on which they depended; when a climate shift occurred these societies found that their environment no longer could sustain their civilizations.
