Tech Ideas Stemming from Crisis
While I finish writing the May monthly issue of The George Gilder Report, I thought we’d look at a previous prophecy…
We’ve all been hearing from politicians about the so–called “ventilator crisis.” It’s the viral new mania.
Governor Andrew Cuomo gets $80 million worth of the contraptions and suggests he needs $800 million worth.
But that’s how governments think. More money is always the answer. More of the same. We need entrepreneurial thinking.
Gale Pooley of BYU in Honolulu and Discovery Institute alerts me to the development in India of a new $200 smartphone–based ventilator system that fits in the palm of your hand. Bypassing healthcare professionals, it uses machine learning to adapt to the rhythms of breathing and to adjust air flow to the lung conditions of patients.
It replaces the $2 million manually managed lummoxes that have been widely deployed to fight acute cases of lung failure from the coronavirus. According to urgent testimony from the front, these costly kluges may have actually been killing patients as much as saving them.
Other advances include new pharmaceuticals, such as successful applications of cheap and much tested antimalarial drug chloroquine and complements. In China, SenseTime has introduced facial recognition technologies that can function even with largely masked faces, thus greatly increasing efficiency and reducing intrusiveness.
In addition, the increasing recognition of herd immunity as the key to overcoming viral epidemics obviates the costly and vexatious lockup constabularies. Conferred by the largely asymptomatic spread of the disease, the natural process of immunization represents a huge advance over closing down businesses, schools, and economies.
Time–Prices and Emergency Ventilation
With his Cato colleague Marian Tupy, Pooley is the champion of time–prices. This measure captures the advance of innovation in one number, signifying the hours and minutes it takes to earn the money to buy a good or service. Rather than using two subjective numbers — the rise of wages and the drop of costs, both adjusted by murky inflation indices — time–prices measure innovation by the unitary gauge of time in hours and minutes: the nominal price of the item (or even GDP), over the nominal wage per hour.
By that measure, in the grip of the crisis, the time–price of emergency ventilation may have improved some five–thousand–fold. That measure holds even if the availability of a cheap and mobile device does not signify a major qualitative improvement in the product, thus drastically lowering the cost further as measured by the time expended to acquire ventilator services.
With this kind of inventive efflorescence, is it possible that the economy, and your investments, will ultimately be enhanced by this crisis?
The Daily Prophecy has upheld the theme of anti–fragility, Nassim Taleb’s proposition that crisis does not break free economies. It strengthens them, spurring invention and inspiring entrepreneurs.
Wealth is knowledge and growth is learning. Learning accelerates in exigencies and is enhanced by falsification. Creativity always comes as a surprise to us. It is filtered by free enterprise, which responds more quickly in the face of urgent needs.
Government guarantees tend to thwart the surprises of learning and growth. If the government guarantees $2 million ventilators, there is no push to develop $200 devices. The kluge makers get rich. Stultifying may be most of the so–called “stimuli” that blanket the economy with dumb money and fail to provide a filter of functionality and profit. If the money comes regardless of work or learning, it deters innovation rather than spurs it.
From these points of view, the epoch of coronavirus can well emerge as a time of new learning and economic growth rather than depression and paralysis.
The key is to leave open as many paths of learning as possible. Shutdowns and closures may inhibit the surprises of creativity and experiment that have saved humanity over the centuries of the capitalist miracle.
Editor, Gilder’s Daily Prophecy