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Friday, July 02, 2004

More on Knowledge

Jim writes:
Precisely because knowledge is so readily accessible (through the Web, etc.), I think the primary issue, as suggested in your subsequent post quoting Huntington, is the institutional infrastructure, i.e., rule of law, evolved regulatory environment (where regulations, e.g., for starting a business, are not bureaucratic), efficient financial mechanisms (stock exchanges, banking system, etc.).
I have a few comments.

Knowledge is required to build the institutional infrastructure to create economic growth and wealth. Though he probably didn't realize it, Jim's quote is actually further evidence to support my thesis on the primary importance of knowledge (relative to other economic factors).

Now for a couple of thought experiments. Let's take our regulatory environment and financial mechanisms today and replace them with those from 100 years ago. Would our productivity and wealth rapidly revert to the much poorer level of 100 years ago? I think not. I think our rate of growth might slow for a bit while we rediscovered the infrastructure knowledge, but I think the institutional infrastructure of the time would have been adequate to support our current level of productivity. After all, there were stock exchanges, futures markets, banks, and a democratic government, and growth did occur 100 years ago.

What if we took today's institutional infrastructure and transplanted it back 100 years? Would the wealth of 100 years ago rapidly converge on what we have today? I think not. They would still have to invent radio, airports, movies, television, computers, cell phones, jets, antibiotics, rockets, satellites, MRI, ICU, IUD, EEG, HTML, internet, interferon, instant replay, remote sensing, remote control, speed dialing, gene therapy, gene splicing, genes, spot welding, heat-seeking, bipolar, prozac, leotards, lap dancing, email, tape recorders, CDs, airbags, plastic, robots, cars, liposuction, transduction, superconduction, dish antennas, step aerobics, smoothies, twelve-step, ultrasound, nylon, rayon, teflon, fiber optics, laser surgery, laparoscopy, corneal transplant, and kidney transplants, to a name a few*. These inventions (knowledge creation) would still have taken many decades.

However, I do agree with Jim that in addition to knowledge, there has to be the will to actually utilize that knowledge. Because knowledge is so freely available, there's only one thing that's keeping every country on the face of the planet from being quite well off within a generation: the will of the people in those countries to utilize that knowledge.

Indeed, that (in my opinion) is the root cause of the extreme Islamic agenda and violence. The knowledge is clear. Using western style institutional infrastructure and technology leads to more economic growth and power than institutional infrastructures compatible with extreme Islam. The jihadis know this. But they want to maintain their current religious beliefs, have an institutional infrastructure that is compatible with those beliefs, yet still be the most powerful culture on earth. There's only one way to achieve that: exterminate everybody in the West. They know that and that's what we're up against.

*The list of technologies copied from a lecture by Michael Crichton.

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