Innovation, freedom, and prosperity: My long-read Q&A with Matt Ridley – American Enterprise Institute

How does innovation happen, andhow can we encourage more of it? Has China figured out a better way to do this?And why does innovation in the US seem to be slowing? On this weeks episode ofPolitical Economy, Matt Ridley joined me to discuss these questions, and manymore.

Matt the award-winning and bestselling author of numerous books including The Evolution of Everything and The Rational Optimist. His new book is How Innovation Works: And Why It Flourishes in Freedom.

What follows is a lightly edited transcript of our conversation, including brief portions that were cut from the original podcast. You can download the episodehere, and dont forget to subscribe to my podcast oniTunesorStitcher. Tell your friends, leave a review.

Pethokoukis: You write in the book:

Innovation is the most important fact about the modern world, but one of the least well understood. It is the reason that most people today live lives of prosperity and wisdom compared with their ancestors. The main ingredient and the secret sauce that leads innovation is freedom. Freedom to exchange, experiment, imagine, invest, and fail. Liberals have argued since at least the 18th century that freedom leads to prosperity, but I would argue that they have never persuasively found the mechanism, the drive chain, by which one causes the other. Innovation is that drive chain, that missing link. Innovation is the child of freedom and the parent of prosperity.

Do you think youve written acontrarian book here in 2020? Because there seems to be a growing belief that wehavent innovated since the Apollo Space program, living standards have beenstagnant for decades, growth only helps the elite, growth kills the climate,and innovation comes from smart central planners implementing industrial policyin carefully chosen sectors. So is this a contrarian book?

Well, it is if those are yourviews. I say that innovation is the product of free people exchanging ideasfreely and that, yes, we are experiencing innovation. Although I do arguetowards the end of the book that we are experiencing something of an innovationfamine, particularly here in the Western world. There are areas where we havenot been able to get enough innovation going recently, and the pandemic has remindedus of that. You know, we havent been able to innovate in diagnostic devices orvaccines as much as we would have liked.

When people think of innovation,they think of disruption, job loss, and maybe AI run wild. And Im not sure howmany people who favor innovation would say, Well, we just need more freedom.I think they would say, Well, we need more government. We need a more powerfulinnovation-geared state to work its magic on the private sector and onscience. That seems to be where the energy is right now.

I think youre right. This ispartly because people always have a sort of top-down view of the world theythink that the world is run by people. They dont think of it as being anorganic and spontaneous effect of everybody reacting with each other. Theyassume that if something happens, its because someone ordered it to happen.

I very much argue in my book thatinnovation is something that bubbles up inexorably and inevitably if you allowpeople the freedom to experiment and try new ideas. You cant direct it, andyou cant plan it.

But there is definitely a tendencythese days to say that we must decide which innovations we want and that weregoing to subsidize them with public funds. And I think that is a dangeroustendency because the history of innovation shows that you cant do that. Youcant suddenly make supersonic flights cheap. There are physical limits tothings, and you cant suddenly make a low-carbon economy easily. It might bepossible over the long run, but it wont come about instantly.

And, yes, we have been innovatingas a society somewhere in the world at any one time. And for goodness sake, ifwe dont keep doing so, we will find that prosperity dries up pretty fast.

Back in the 1980s there was aconcern, at least in the United States, about whether Japan was going to be theleading economy of the future. People looked at how we thought Japan innovated through very smart bureaucrats at key agencies and said, We need to do whatthey do. Maybe free enterprise was the way to innovate in the past, but nowwere much smarter and we need to have very smart people making decisions ingovernment. That didnt work out so well.

Today we have a similar situationwhere people see Chinas very fast growth rates. They hear about its hugeadvances in AI, and they hear it has big ideas for the future. Do you think thatsone reason people have been sort of skeptical about the freedom argument?

And do they have a point? HasChina figured out a better way to do innovation?

No. I think youre exactly right I think people misread Japan in the 1980s. They said, This has come aboutbecause the Ministry of International Trade and Industry, MITI, hasspecifically singled out sectors which are going to be the future and hasinvested in them and thats why Japan is such an innovative country. And thatwas always nonsense. It wasnt because clever bureaucrats were telling peoplewhat to invest in and what to invent. It was because firms were just going outthere and trying new things and were developing new technologies at anextraordinary rate.

The same mistake is being madeabout China today, I believe. It is an innovative country. You cant deny thatit has not just caught up with the United States, but in some areas, hasovertaken it in terms of consumer electronics, consumer digital behavior, andso on. But to say that thats because its a Communist regime with a centrally-directedplan to innovate is simply wrong.

China has a very strongmonopolistic and authoritarian political regime. But as long as you dont defythe Communist Party, there is a huge amount of freedom. China is not directingwhat entrepreneurs do. And, in fact, an ordinary entrepreneur in China whodecides to build a factory to do something new can do the whole thing in amatter of weeks, whereas it would take years in the West to get permission fromall the various bureaucracies and regulations. In that sense, a Chineseentrepreneur is freer.

That said, China is getting worsein terms of authoritarianism. It is becoming much more of a dirigiste state.For a while, it was drifting towards democracy. That has been reversed. And Ithink Chinese bureaucrats think they can direct and control exactly whathappens in innovation. And if they do try that, they will kill the goose thatlays the golden eggs. And just like Japan, it will no longer be at the front ofthe pack. So, I wouldnt bet on China being the lead innovative country in theworld for a very long time, unless it can democratize and liberate its regime.

Do you think China can, over thelong term, be an innovative entrepreneurial state without being much freer? Itlooks like theyve managed to be an authoritarian country with one politicalparty and also be highly innovative. So you think that is not sustainable that either theyre going to stay authoritarian and become less innovative or theyregoing to have to move slowly toward being a freer, more open democratic nation ifthey want to innovative?

In the long run, I think thatsright. China may pull the trick off for a while yet, but I think it is simplynot possible. Freedom grants the ability of the entrepreneur to change hismind, to change direction, to suddenly try one thing and then another, to do alot of trial and error, to make a lot of mistakes, and in the end to come upwith something new and impressive that will change the world. Given theimportance of that, I feel that, in the long run, innovation is not compatiblewith a regime that tries to control things from above.

In the Song dynasty, around 1,000years ago, China was the most innovative place in the world. It was responsiblefor a series of extraordinary innovations printing and all those kinds ofthings. And these came about because the Song dynasty was not a verycentralized regime. It was a fragmented regime in which there was a lot oflocal autonomy and there was a lot of freedom.

Then the Mongols invaded, andafter that came the Ming empire. And the Ming were quite the opposite of theSong. They wanted tight, centralized control of everything. They literallycontrolled where you could travel, and they needed a report from every merchanton how much stock he held in his warehouse at regular intervals. This was arecipe for killing innovation. And, sure enough, China sank into lack ofinnovation and eventually extreme poverty over the next few centuries.

The lesson is that if you run anauthoritarian regime and it gets more and more intrusive into the lives ofordinary small businessmen, then you will stop innovation. Its quite easy todo.

I wonder if we worry too much about China being a leadingtechnological power, and that our worry pushes us toward industrial policy.Iworry that were so worried about it that we conclude, Well, maybe theyfigured out a different model, and thats we have to follow.

Already, at least the United States, theres more and more talkabout industrial policy. Theres just not a lot of confidence in the UnitedStates right now that freedom and free enterprise are ultimately the best pathsto pushing forward that technological frontier.

Government has a very poor trackrecord of picking winners, and losers are often picking the government to helpthem. If you go back to the 1980s when the worry was about Japan, all theemphasis was on having a policy for semiconductor manufacturing. But thiscompletely missed the fact that memory chips were turning into a commodity, andthe action was moving to microprocessors and eventually to software.

And if you go back to 1903, the USgovernment poured an enormous amount of money into a project to develop thefirst aeroplane. Samuel Langley, who was head of the Smithsonian and a verydistinguished astronomer, went off in secret to build an enormous machine thatwas going to leap into the air at first attempt. He didnt test the parts ofthe machine, and he didnt talk to other people. It flopped straight into thePotomac when it was launched, and there was humiliation for the US government.

Ten days later on an island offNorth Carolina, two bicycle mechanics from Dayton, Ohio did what Langleycouldnt. They had tested all the components separately, again and again andagain in gliders and kites and other devices. They had talked to as many peopleas they could around the world. They had drawn on what birds do and used windtunnel experiments, and theyd shared their ideas with as many people aspossible. But in front of no crowd at all, they got an aeroplane into the air.

And for about five years, no onebelieved them. They went to the US government and said, We can give you afantastic technology to use in the military. And the US government said, Uh-uh.Weve burnt our fingers with Mr. Langley. So the governments record in thisarea is not great.

People cite the internet comingout of DARPA, and there is some truth in that. But actually, the internetrelied on a lot of private-sector input. Even when it came out of DARPA, itneeded to go through a huge amount of innovational development to turn intowhat we have now. So giving DARPA the credit for the internet is a bit likegiving a beaver the credit for the Hoover Dam.

Toward the end of the book, you talkabout this innovation famine since the early 1970s. If you look at officialgovernment statistics, there is a downshift in productivity growth, which youthink is related to innovation in the early 1970s. It never really rebounded inthe United States other than the late 1990s and early 2000s.

What do you think happened? Why do you think advanced economies saw this downshift in productivity, which perhaps Robert Gordon has written about most famously in his book, The End of American Growth? What do you think happened there? The productivity downshifted and never really came back?

Well, I dont think its quitethat bad. When you take into account the sizes of households and all thesekinds of things, there is still productivity improvement there. But youreright, there isnt as much as one would expect.

Now, weve had a period ofenormous innovation since the 1970s. Weve gone from paper to computers andfrom telephones to mobile phones. Theres been an extraordinary amount of innovationduring that period.

But as Peter Thiel put it once, wewanted flying cars, and we got 140 characters. In other words, most of theinnovation has ended up being digital bits rather than atoms. And Thiel arguesthat this is because its permissionless to go out and start a new business onthe internet. You dont need to ask anyones permission; you just get out thereand start doing it.

For comparison, if you want todevise a new drug or medical device or a new way of building a bridge, theresgoing to be an enormous amount of regulatory progress that you have to makebefore youre allowed to even start. As a result, we have diverted the energyof entrepreneurs and innovators into digital innovation rather than innovationin atoms and real structures. The Clinton administration passed a series ofmeasures in the late 1990s that deliberately cleared the undergrowth away tomake it possible for companies to start building online retail andcommunications platforms. And that worked really well.

So weve diverted our energy, Ithink, online in the last few decades. Im not sure innovation is going to looklike that in the next few decades. We might get back to transport innovation orwe might turn to biotechnology innovation next.

But I dont agree that the Americaof 2020 is no better than the America of 1970. I just cant see that argument.The quality of life is extraordinarily better, and people are working shorterhours and living longer lives and eating better food and all these kinds ofthings. I think we are seeing the fruits of innovation, but theyre not showingup in the productivity statistics like they are elsewhere in the world. Poorercountries are seeing spectacular increases in productivity and in prosperityover the last 10 and 20 years.

That explanation that weve madeit harder to do that sort of real-world, you know, working with atoms kind ofinnovation, you know, due to the regulation not as someone who loves freeenterprise, I love that explanation. In fact, I worry that I love thatexplanation too much. Its such a comfortable explanation for me. Its sototally conformed to my inherent belief system and my biases. Could we bemissing something else? Might it be that governments spending less oninvestment or somethings happened with schools some explanation other thanregulation?

Yes, of course. I often make thepoint that we saw incredible changes in transport in the first half of the 20thcentury, but almost no changes in communication and computing. Then in thesecond half of the 20th century, we saw the opposite.

I like this cartoon published in1958 of what life would be like in the 21st century. Its a shot of a veryold-fashioned mailman delivering perfectly ordinary letters, but hes doing sowith a rocket on his back. And thats exactly the wrong prediction. Were notusing letters much; were using emails. But we dont have rockets on the backsof individuals.

Was that because governmentregulation and interference made it hard to innovate in transport? No. I think wehit some kind of physical limits that were hard to breach in terms of theefficiency of moving people and goods around on devices. A supersonic airlineris possible, but it burns too much fuel and isnt very efficient. So some ofthe reasons why innovation shifts from one sector to another are not about theobstruction of bureaucrats or things like that, but some of them definitelyare.

And, by the way, one of the mostspectacular improvements weve seen in recent years is actually in transport.Its just not in speed. Its in safety. If you look at the fatalities incommercial passenger jets, they have gone down by some gigantic amount in thelast 30 or 40 years. And in 2018, we had a year with zero fatalities incommercial passenger jets. Thats extraordinary when you think how many people wereflying around the world.

So we are seeing improvements, butthey arent necessarily showing up in our pocketbook. They are sometimesshowing up in other aspects of our lives, I think, like safety.

Some people think there may be acultural reason maybe were just not a future-oriented society today. Andtheyll ask, How many of our films and books portray an optimistic future?Tell a story that that technology can lead to a better future versus a futureof a ruined planet or AI taking over the earth or some other, you know, thedystopian scenario? I mean, if I had to sit down and quickly write out a bunchof optimistic movies, itd be way easier to write the opposite, where it allis terrible and we should fear the future.

Absolutely. And this is somethingIve been complaining about for years. I just cannot remember a Hollywood filmin which the future is portrayed positively or in which an integral businessmanis portrayed positively. The only kind of businessman who has ever beenportrayed positively in Hollywood, as far as I can make out, is an architectfor some reason. I guess thats because hes not really a businessman; hesmore of an artist.

There are these strange obsessionswith dystopian futures. Fiction has done this ever since Brave New World.Weve always told ourselves that the future is going to be terrible, and thefutures always been fine.

Im quite passionate about this.When I was 12 or 13 years old, the environmental movement was just gettingstarted, and I became extremely pessimistic about the future because thegrownups were telling me that the oil was running out, the population explosionwas unstoppable, pesticides were killing us, our life spans were going toshrink, etc.

And I thought, Well, its beennice to be alive. I better work out what Ill do in the last few years before Idie a poisonous death. And so, when the 1980s came along and my country andothers started prospering quite mightily, I was genuinely shocked. It took meby surprise.

So one of the things I try and dotoday is tell 12-year-old and 14-year-old kids that what they are told inschools You have no future, weve stolen your future, whatever Greta Thunbergsays is just not true. Even the climate change projections show that we aregoing to get richer in this century. We just might not get quite so much richerif we have climate change, compared to if we dont. That is literally what themodels say.

I wonder if the stories we tellourselves matter, and Im sort of worried that they do. Particularly, peopleseem to be really worried that AI is about to take all our jobs, and they thinkwe need a robot tax or that we need to somehow slow down technology. Eventhough weve just spent 10 minutes talking about how theres been thisdownshift in official statistics (at least per activity and innovation), weve neverbeen more worried that there will be three people who own all the robots, andthe rest of us will be living in hovels and on universal basic income orsomething. So I kind of think they matter now maybe in a way that they didntin the past for some reason the stories we tell ourselves about the future.

Well, I think the idea thatautomation and innovation steals jobs is an old idea that has been around formore than 200 years since the Luddites were smashing textile machinery inBritain, and its been wrong all along. Weve said throughout this period thatautomation is going to kill jobs.

In the early 1960s, the US had apresidential commission to look into the inevitable mass unemployment that wasgoing to come about as a result of the introduction of computers intofactories. It didnt happen. And thats because innovation creates new jobs andopportunities, and it creates the prosperity with which consumers buy these newservices from other people.

And there will always be things wewant other people to do for us. But its also worth considering, I think, thatwe are sharing out more leisure. We are working less hard. In the early 20thcentury, life expectancy was less than 60 and there was no such thing asretirement. Most people left school at 14 or 15 and went straight into theworkforce. The average workweek was about 60 hours. You didnt get muchholiday. They were spending 25 percent of their entire life on the planet atwork.

Today, its less than 10 percent.If somebody lives to 85 and theyre in education or retirement for half oftheir life, which is quite probable, and theyre working five days a week foreight hours every day with normal holidays and so on, its less than 10 percentof their life that they will spend at work. So for 10 percent of your life, youcan earn enough to support yourself and to give other people a living.

That is what technology, automation,and innovation have done for us, and weve shared it pretty equitably. Wevenot gone to the point where a few people are working incredibly hard, and a lotof people are not.

The current worry about automationand artificial intelligence taking jobs is a surprisingly sort of an upper-middle-classworry. In other words, the reason were hearing so much about it at the momentis because in the past it was just farm laborers or factory workers that werelosing their jobs. Well, now its lawyers and doctors for goodness sake whomight be automated. Thats really scary.

This almost puzzles me this ideathat robots are about to take all the jobs at the same time as, in my view, wehavent had nearly enough innovations. European economies seem to be desperate formore innovation and more technology companies and bigger technology companies. Idont know how many white papers Ive seen about their entrepreneurial deficit,their innovation deficit. Yet in the United States we have these big technologycompanies which seem to be pretty innovative, but we have very mixed viewsabout them.

We havent had all the innovationwe would like, and some people blame Silicon Valley. They say, Silicon Valleyhas failed us because they havent thought big enough. We dont have flyingcars because all they want to do is modify consumer services. So instead of gettinga flying car, we got Uber. Uber is great, but its not the flying car. Isthere a problem with Silicon Valley that it just doesnt dream big enough forwhatever reason?

Well, I think, seen from Europe,Silicon Valley has been a spectacular success. America has Facebook and Amazonand Google in its backyard delivering extraordinary benefits online shopping,whatever it might be. We would kill for a bit of that in Europe. Europe hasfailed to produce a single digital giant to rival Facebook, Amazon, Google, or theirChinese rivals.

China has produced these kinds ofbig companies. We cant do it in Europe. Why? Because we have a very dirigisteand centralized regulatory system that tries to tell tech companies what to do.And we pick fights with big Silicon Valley companies all the time in Europe.Were constantly trying to take Google down a peg or take Facebook down a peg. Itsnot true that were keen on innovation in Europe and youre not in the US. Ithink thats a myth.

We talk about innovation a bit,but then we introduce policies that just dont get it dont get it right. Iwrite in the book about Britains most innovative and successful entrepreneur, JamesDyson, who invented a bagless vacuum cleaner. And he came up against a newregulation in the European Union which said, All vacuum cleaners must betested as to how much power they use, but all vacuum cleaners must be testedwithout dust. And he said, What do you mean? How do you test a vacuum cleanerwithout dust?

It turned out that the big German manufacturerswho made vacuum cleaners didnt want the regulations to favor Dysons product.Their vacuums had been designed to increase their power usage when they gotclogged with dust, so they had lobbied the European Commission to bring in thisregulation, which was quite different from the regulations elsewhere in theworld.

Dyson went to court, but the courtruled against him. He did a Freedom of Information Act request to find out whohad been lobbying the court. Sure enough, he dug up a treasure trove ofappalling corporate lobbying and won his appeal. The regulations were struckdown.

By that time, five years hadpassed, and the Chinese competitors had caught up. Thats the kind ofstraitjacket within which European innovators have to work.

And that, by the way, is one ofthe reasons James Dyson was one of the leaders of the campaign for Brexit. Hewanted to get us out into a world where we could join the world and use worldstandards rather than European standards and have a competitive, openfree-trading system. And thats what were planning to do next year when werefully out of the European Union.

Proponents of industrial policy in the United States assume thatwere going to have very smart, independent, selfless bureaucrats in the newDepartment of Innovation or Department of Technology, whatever they want tocall it, who will, make these decisions about what technologies or companies tofund based purely on science.

But I think the history of politics shows thats not how itsgoing to work. There will be lobbying of the government, and companies that arefriendly with the government might get help. I think it would be hard for bureaucratsto make the right decisions if theyre even trying to make the rightdecisions, much less if these decisions are being influenced by politics.

Brink Lindsay and Steve Teles have a very good book called The Captured Economy, which is about how regulations, intellectual property laws, and occupational licensing have created barriers to entry that help incumbent businesses. This is an increasing problem in the US and in the UK. We need to find ways of encouraging small, insurgent businesses because big businesses are not good at innovation.

I make this point in the book.Look about happened to Kodak: They were mugged by digital photography. They hadactually invented digital photography at one point, but they didnt like thelook of it. It didnt look very efficient, and they didnt really want todisturb their near-monopoly on film.

Likewise, Nokia became the biggestmobile phone company in the world with more R&D than the rest of theindustry put together. It was an enormously successful company, but it didntsee the data revolution coming and didnt want to know about it. And it wasmugged by its competitors and it ended up sold for a pittance some years later.

So we need to allow smallcompanies and small entrepreneurs to challenge big ones. They need the freedomto go out there and take on these big organizations, which have the ear ofgovernment often. And as you say, if theres a Department of Innovation inWashington, it will be hearing from the big companies and not the smallcompanies if were not careful.

Do you think it is necessary for acountry to have some big external threat like the Soviet Union or China to wakeup a country and convince it to prioritize innovation with research funding andderegulation? Without the threat, do people end up not wanting to spend themoney, because its too long-termthinking or people worry about the disruption of innovation?

For example, the space race obviouslywas greatly driven by the Cold War. And there are some people who sort ofwelcome having China to replace the Soviet Union, because now we have this newexternal threat and now we can focus on innovating again, thanks to China.

But I also worry about war,obviously. So I worry about having that kind of external threat. Do we need it,or is there some other way to persuade people that innovation needs to be atthe heart of government policy, whether its doing more in some areas or inother areas doing a lot less?

Sputnik is the classic example ofa government panicking about its failure to be sufficiently innovative whenconfronted by a rival. The response came with a lot of military spending and soon, but it wasnt really what changed America.

What changed America was what wasbubbling along in Fairchild Semiconductor and small companies like that inCalifornia. Sure, some of them had links to the Defense Department and StanfordUniversity and so on, but it misreads history to think that its becauseKhrushchev put a satellite into orbit that America then took off and became animmensely successful technological leader.

I talked quite a lot in the bookabout the role that World War II played in innovation. With the exception ofnuclear weapons, the technologies that we often think about having beenaccelerated by warfare actually werent. The computer, antibiotics, and the jetengine were developed long before the war.

The ingredient technologies of thecomputer were developed before the war. In the case of the computer, the annusmirabilis when all these ideas come together is 1937. And then the computing projects all go off into secrecybecause of the war and theyre not able to talk to each other and actually, alltheyre doing is calculating the trajectories of artillery shells or trying tocrack enemy codes, and theyre not trying to do anything else. Its not untilthe war ends that computing is able to share ideas again and get going again. Soactually, I think the war retarded the development of that technology, whereaswe often think of it as accelerating it.

Im a bit of a skeptic about theidea that geopolitics plays a part in innovation. The 1930s were a verydesperate time for America, yet it was a time of great innovation. There were allsorts of things developed in that decade. So I dont think that a country needsto feel threatened before it does any innovating.

Do you think that COVID-19 could present an innovation moment forthe United States and other advanced economies? Will the economic shock beginto focus us on making our country more efficient and getting rid of regulationsthat stop people from innovating? Or should I worry about us becoming more riskaverse in the wake of the pandemic retreating and worrying about foreigncompetition, immigrants, and trade?

I can kind of see this going either way. What do you think? ShouldI be an optimist?

On balance, Im an optimist. Ithink this will turn into a moment when we take seriously the need forinnovation. In the last couple of months we have stripped away all sorts ofrules and regulations that were killing entrepreneurship by taking too long. Weveseen just how damaged we were by overregulation of certain things. For example,new medical devices take up to six years to get approval has deterred a lot ofinnovators. That is the reason we havent had instant DNA diagnostic machines readyand waiting for this pandemic.

So I do think that weve had awake-up call about the fact that it is not painless to stifle innovation byover-regulation and by slow bureaucratic decision-making. That said, I do alsoagree with you that we do possibly face the threat of shutting down the worldeconomy and shutting down world trade, for example.

A trade war would be disastrous,because the whole point of trade is so that if somebody produces an innovationsomewhere else in the world, you dont have to say, Oh, bad luck. I dont livein that country. I cant have it. We dont say that about neighboring towns.Why should we say that about neighboring countries? If the first vaccine forthis disease is developed in another country, would you really like to feelthat its just bad luck, Americans are not going to get access to it? Of coursenot. So if its the truth for vaccines, why not for every other innovation?

I hope that we learn the lessonthat we are connected from this. Trade does have to be done equitably, andthere are aspects of trade that we have to be careful about like trading inunhealthy plants, animals, and diseases that we have to be quite careful about.But there are other aspects where we should encourage as much free trade aspossible so that we can get access to the ingenuity of people all over theworld.

Why do innovators innovate? Somesay that Jeff Bezos and Elon Musk didnt need to become multibillionaires: Theywould be just fine if we had big wealth taxes. It really wouldnt affect theamount of innovation in United States.

Do you think thats true ofinnovators based on your experience?And more broadly, why do people startcompanies? Why do they invent? Why do they innovate? To become trillionaires?

Human beings are ambitious, andthe ones who make a small success want to make a big success, and the ones whomake a big success want to make an even bigger success and so on. I thinkthats in the nature of human beings. And if you look at people like ThomasEdison or Jeff Bezos, even you find certain common themes. One of them isrelentless ambition and extremely hard work. But another is a tolerance forfailure. And I think thats a key ingredient because Edison was constantlytrying things that didnt work, and he knew that trial and error was the way hewas going to solve most of his problems. So when he was looking for a material touse for the filament of a light bulb, the 20 other people around the world whohad also invented light bulbs independently all tried one or two materials andthen said, Ive found one thats good enough. Edison kept going. He kepttrying different things. He tried over 5,000 different types of plant materialuntil he settled on a particular kind of Japanese bamboo that made aparticularly good filament so that his light bulb lasted longer than otherpeoples.

Thats what sets the great entrepreneurapart from other people. Ive talked to Jeff Bezos about this, and its veryclear that he regards trial and error as a key ingredient. He wants to makemistakes. And by Jove, he did make mistakes. If you look at the history ofAmazon, its a series of disasters, but a series of successes as well and,eventually, a very big success. You know, hes on record as saying, If yourenot trying lots of different things, then youre not going to succeed.

So the role of trial and error isa crucial ingredient in these peoples lives. Just keep trying things, and youwill eventually succeed. Dont expect to get it right first time, and dont bediscouraged by a failure.

Yet I see, at least today, peoplesort of exalt in the failure of entrepreneurs if theyre already wealthy. Ithink of Elon Musk. Tomorrow, hopefully, his SpaceX will launch two Americansinto orbit for the first time on American soil since 2011. Except if it doesntwork, or when theres a problem with his autonomous cars or one of his space launches,a lot of people just love it.

I mean, youre not an American,but speaking, you know, about the United States, do you see that in the UnitedKingdom as well, where some people just want to see that failure?

Its far worse over here. Anyonewho succeeds in the UK is automatically targeted by the media and everyoneelse. Theyre longing to find the feet of clay in a successful person. InAmerica, the entrepreneurs have it easy. I think its a general problem aroundthe world that we resent success.

Im not pretending we should feelsorry for these guys. They have got billions, so we dont need to waste oursympathy on them. But it would be nice if, occasionally, a country like yoursor mine regarded a good old-fashioned engineer who builds up a business as ahero, instead of someone whos, you know, good at singing a song or good atfighting a war or, you know, all these sort of 14th-century things that weworship instead. You know, the real heroes of the world are people who didinnovations.

And by the way, it isnt alwaysabout money and gain. My favorite story in the whole of my book is about themosquito net impregnated with insecticide, which has changed the face ofmalaria control spectacularly. It reversed an increase in malaria and savedmillions of lives. Its an incredibly simple, low-tech technology.

I tracked down where it came from.I didnt know whod invented it. Turns out the key experiment was in BurkinaFaso in 1983 when a bunch of French and Vietnamese and Burkina Farsenscientists did a lot of very carefully controlled experiments to see whether amosquito net prevented mosquitoes biting you, to see whether adding insecticidemade any difference, and to see whether tearing holes in the net made any difference.And it turned out that an impregnated net is very, very good at deterringmosquitoes, even if its got holes in it.

Eventually, the Gates Foundation picked up onthis and has promulgated this simple, low-tech solution around the world.Billions of nets have been distributed. They have saved millions of lives.Nobodys made a penny out of it. Its a wonderful story. So lets hear it forthe innovators. They do change the world for the better.

You mentioned Edison. I wonder andIm guessing its not very much how much time is spent in the typicalAmerican or British school talking about how we got from most advancedeconomies to people making $2 a day to getting where we are now?

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Innovation, freedom, and prosperity: My long-read Q&A with Matt Ridley - American Enterprise Institute