Health care costs in the U.S. have been rising so steadily for so long that containment barely seems possible. Even optimists don’t dream of cutting the price tag. As its official name — the Patient Protection and Affordable Care Act — suggests, Obamacare aims for affordability, not radical reduction.But at a time when we’re all […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
Picture the scene. It’s 2020. You’re at the checkout in a convenience store with a carton of milk. But you’ve got no cash and you’ve left your cards at home. No problem. You scan your right index finger; the green light flashes. Purchase approved and you leave. Easy.Is this a realistic vision of the future, […]
After a week of reckoning about the American oil and gas boom… I’ve got to get something off my chest.I can’t stand it when a coworker takes credit for something I did.Whether it’s a special report I wrote or just a little investing trick I found on my own — if someone takes it and […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
I want to share some insight and give you a front-row seat to America’s next big shale play.Let’s get to it…Over the past 10 years, the U.S. has turned the ship around, quite literally.We’ve gone from a country that was expecting to import massive amounts of oil and gas — to a country that’s sitting […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
What if I told you that the march of human progress could be traced in a direct line from the Epicureans of Ancient Greece… through the 18th Century’s cure for smallpox… to where Steve Jobs and Bill Gates found inspiration as scrappy teenagers… to the flying car of tomorrow?Stay with me and I’ll show you […]
Real progress happens through real people, ideas, and innovations. Not by legislation argued and debated in Congress. Right now, one of the most influential technologies is changing the way people do business. And reinventing the future in the process.
Innovation can change the world… if the world lets it. Unfortunately, society’s gatekeepers make it a point to constrain, regulate, and control these ideas. But their power is limited, and the power of innovation is too great. Unfortunately for regulators, there are some technologies they can’t control.
What’s the #1 reason a start-up fails?It runs out of money!And why would it run out of money?Because nobody wants the product it’s selling!For early-stage investors, this presents a bit of a conundrum:If a product doesn’t exist yet, how do you figure out if there’s demand for it?And how do you figure it out before […]
A cushy job in Hawaii that pays six figures. A beautiful girlfriend/boyfriend. Job security and professional experience that gives you plenty of future opportunities. Would you throw that all away to do what you think is right? Last year, one government contractor did just that. And now you see the world the government tried to hide from you.
Every time Bitcoin crashes, it winds up at a price greater than it’s previous high. Yet the experts still call it a currency fad that will fade away. But a little over a year since it really took up, the digital currency is still going strong, and is once again seeing its price rise. But is there another reason why people are buying Bitcoins.
According to some estimates, one man - whose name you're probably not familiar with - has saved over a billion lives. Who is he? And how has he influenced the current crop of innovators? Josh Grasmick explains...
Edward Snowden’s one year visa in Russia expires at the end of next month. With only a few weeks left before he finds himself without a safe country to live in, he sat down to give an exclusive interview. Here are the most important things he wants you to remember from his recent sacrifice.
Biotech breakthroughs and other transformative innovations are a few of the brightly shining spots in the U.S. economy. In fact, Paul Mampilly believes this is the golden age of biotech investing, and that you can earn massive returns while investing in companies with drugs that benefit all of humanity. Read on for his latest example...
Harold Hamm isn’t your typical entrepreneur. His life’s story shows you success in America doesn’t always depend on a fat checkbook
Obama recently claimed this was the “Decade of the Brain”. But it not the first time the government made that promise. The last time they did it, they wasted millions of your tax dollars. Now they’re back for round two. But this time, their failure could mean more than squandered money. It could mean making Alzheimer’s even worse for those who suffer from it.
Does owning a gun mean you’re guilty until proven innocent? Considering what happened to one man from Florida, that might be the case. But there’s more to this story than just a case of police overreach. Police departments across the nation could be implementing a new technology that puts the burden of innocence squarely on your shoulders.
American ingenuity. It’s the stuff of lore and legend, and it’s what drives the global economy. We literally bank on the next disruptive entrepreneur — and innovative new technology — to completely redefine or create new industries. It’s what America does really well, our goose that continues to lay golden eggs.And yet, maybe not.The truth […]
When Michael Lewis’ new book Flash Boys came out, the author caused a stir while making the media rounds to promote it. “The stock market is rigged,” he told 60 Minutes flatly. His comments set off a firestorm of debate as to whether sharp techies and their fast computers are screwing small investors.As titillating as […]
Last November, when the Environment Protection Agency (EPA) proposed moderating years of escalating mandates by reducing the amount of ethanol that must be mixed into gasoline, a top ethanol lobbyist seemed perplexed. “We’re all just sort of scratching our heads here today and wondering why this administration is telling us to burn less of a […]
Why Is U.S. Health Care So Much More Expensive?After years of research and many conversations with health policy experts, I see three key culprits of expensive health care in the U.S.In no particular order, they are the third-party payer system (i.e., employer-provided health care), malpractice suits, and administrative support costs/paperwork.The unintended consequence of institutionalized employer-provided […]
At the recently concluded Winter Olympics in Sochi, Russian security officials used state of the art facial recognition software to identify potential terrorists. Today, Byron King takes a closer look at this sophisticated new technology and what it means for the future of national security. Read on...
Back in the 1980s, John Nestor became infamous for single-handedly causing massive traffic jams on the Capital Beltway. But in his professional life, he created a completely different kind of traffic jam... one that may have contributed to the deaths of thousands of innocent people. Juan Enriquez has the full story. Read on...
Entrepreneurs innovate. Bureaucrats regulate. It’s the eternal struggle that exists in our modern economy/government. The people in power try to make the playing field as even and fair as possible. While innovators buck the rules and push the world toward a better tomorrow.
Technological progress moves the world forward. It finds ways to do things better, for less money, while using fewer resources. And if you ask any politician, they’ll tell you that’s the way to grow the economy and get America back on track. But if that progress threatens one of the government’s sacred programs, then that’s a different story. One that results in a crackdown on progress, and protection of the status quo.
Google’s new Motorola unit had great ambitions to serve customers and keep dazzling us with ever more spectacular things that enhance our lives. After all, the smartphone is easily the greatest consumer innovation of our time, and maybe of all time. It accomplishes amazing feats in a tiny package and represents a greater achievement of the human mind than anything accomplished by government, ever.
The smartphone is really misnamed in so many ways. Depending on apps and extensions, it provides maps and global positioning, checks your blood pressure, becomes a musical instrument, allows you to buy and sell stocks from the middle of nowhere, to enjoy video chats with people from all over the world, to assemble friends and networks, and to keep up with and send messages to anyone.
It allows me to make my own movie on the fly and broadcast it out to billions in a matter of minutes. I can record a song. I can immediately make anything happening in front of me become a live stream to the whole world, and do this without paying any expensive fees. I can conduct an interview and archive it on my own channel, which I can create in a few seconds. Or of course, I can play one of thousands of games.
It’s a calculator, an email checker, a weather updater, a camera, a Web browser, a news reader, a complete stereo system, a book reader, a translator, a scanner, and a miniature everything all in a thing the size of a deck of cards that is half as thick. The innovations pour into this tiny miracle by the day, by the hour ,even. And it’s only begun: The app economy holds out the promise of astonishing innovation down the road.
I recall many times suggesting to people that they replace their old cell phone (which itself is a great gizmo, given that only the richest of the rich could afford such a thing in the 1980s) with a smartphone. They demure and refuse and finally give in, and only then do they realize what they’ve been missing. It’s a revelation, a childhood dream come true.
So what does Google plan to do with its new Motorola acquisition? Serve up some more wonderfulness to a public ready to be amazed again? Not yet. It’s first step was to file a massive lawsuit against iPhone. And why? You guessed it: patent infringement. Google claims that Apple has stolen some of Motorola’s technology.
Apple has systematically refused to enter into any reasonable licensing deals, which is exactly the same behavior that Samsung faced before. And Google is not stupid. The whole world was watching that lawsuit that Apple filed against Samsung, and saw how a tired, confused, and technologically dumbfounded jury, in a courtroom 10 miles from Apple’s headquarters, agreed to a $1 billion-plus judgement against Samsung.
Google won’t just take this lying down. It decided to act first rather than risk that kind of aggressive attack. It is asking the International Trade Commission to start blocking all imports of iPhones, iPads, and iPod Touch. Crazy, right? Does Google hate our guts that it would seek such a result? After all these years of desperately serving the Web-surfing world, giving us amazing tools for free and revolutionizing the world of advertising, has it now decided to spread misery to the American public?
Nope, it’s all about defending itself against aggressive attack. What the jury did in the case of Apple v. Samsung has set off a deadly arms race. An industry that became thrilling and gigantic, and has brought unprecedented progress, is now entering into a dangerous period in which dogs really do eat dogs, where one company’s win is another’s loss, and where the welfare of the consumer has to be put on hold for the battle of the titans.
The problem comes down to one word: patent. In the 1980s, patents were extended to cover software. This was the beginning of what would become a catastrophic regulatory thicket that would ensnare every producer and where the lawyers would make out like bandits no matter who won.
When patents first came along in history, they were monopoly privilege granted by the crown in exchange for political subservience. This was the age of mercantilism, and it gradually led to the age of capitalism, in which trade barriers, taxes, and regulations fell. The slogan was laissez faire, or, leave commerce alone to manage itself. Government can’t improve on the results of the market process.
The patent today is a holdover from the pre-capitalistic age. It was not very controversial before the digital age, because economic progress was relatively slow and patents expire and because the patents didn’t apply to most of the important consumer products we use every day. But the problem with them has always been the same: By granting a right of exclusive production to one firm, patents attack the competitive process as its very root.
The competitive process takes place over several phases, which constantly overlap. There is innovation (always an extension of what came before). Then with innovation can come a period of profitability. This profitability attracts other producers to the industry who innovate further and try to improve the good or service. The initial producer then has to scramble to maintain market share, and it does so through innovation and price cuts.
Note that the whole system is based on the ability to learn from others. Good companies emulate the successes of others, avoid their mistakes, and improve what exists at the margin. That’s the essence of economic progress. This is how competition results in the biggest conceivable boon for consumers.
As Steve Jobs said in 1994, “We have always been shameless about stealing great ideas.” So it has been for every great painter, poet, and entrepreneur. They build on what came before. I take issue only with the use of his word “steal.” When you copy an idea, there is not a thief and a victim, but two ideas. This idea-copying process extends to infinity.
Who in the business world likes the idea of competition? The startups like it. The innovators like it. Young companies seeking to change the world like it. Competition gives them an opportunity to make a difference and build wonderful things. But older companies do not like it. Once they get on top, they would much rather rest on their laurels.
In a market, they cannot rest. But with patents, they can sue. They can use the tools of government to clobber their competition. If it works, they can receive what amounts to a bailout. To win a patent suit against the competition is no different from getting a tariff erected against imports, having your insurance company get a huge cash infusion from the Department of the Treasury, or for a labor union to block low-price workers from entering the market.
The real story of Apple’s attack on Sumsung is told in the numbers. Apple has been dramatically losing market share to the competition. That’s no surprise: The first to market experiences a period of profitability above the average rate of return. But then others emulate and improve at the margin. Prices fall, service improves, and great things happen for everyone except the former industry leader.
Patents are an occasion of sin. They tempt business to go to government to smash their competition, instead of turning to more-innovative strategies to attract consumers. This is why industries without patents are so vibrant. Patents don’t apply to fashion, recipes of all your favorite meals, to plays in sports, and to most things we use and love.
I can hold up my Wal-Mart navy blazer and one from Burberrys and, from a distance of three feet, you couldn’t tell much difference. But both manage to exist side by side in peace, and everyone wins. But the jury in the Apple v. Sumsung case looked at the two phones and said: oh this are really too similar, so one has to go!
Patents established government-protected monopolies. Ironically, other divisions of government claim to intervene in markets to bust up monopolies and divide up market share. Either way, the government is doing central planning by picking winners and losers in the marketplace rather than let the competitive process play itself out.
What happened to Apple really amounts to a government-sponsored bailout, no different from that won by AGI in 2008. But do we recognize it as such? Probably not, because the whole racket is couched in the language of a law that few people understand or question.