According to Ruttan in his book Is War Necessary for Economic Growth? (find a lecture about the subject using the link provided http://www.csbsju.edu/clemens/images/HistoricallySpeaking-Issues%20merged%201%2016%2007_2_.pdf he argues that large scale and long term government investment, not war, is necessary for the development of general purpose technologies.

However, I thought, there must be a reason why economists and politicians want us to believe that market driven technology development could develop and perfect the technologies we need for energy transformation. Maybe this is because the Internet and related technologies seem to have been developed out of the blue by market forces? (If you know the reason, post a comment!)

I thought about this and realized that the implementation of the Internet and broad band landline communication seems to have been driven by the market. Except for all the technologies involved, that have mostly been developed in different military, space and other government financed research projects, largely in the US, the less costly implementation of these technologies, has been financed by the market to a large extent.

I looked up fibre optics, to find out if this has a history from government projects. From the entry at Wikipedia, the origin of the different technolgies is not entirely clear. Laser, a military technology, plays a central role. A central role is also played by large public customers for transatlantic and probably also transcontinental cables. Maybe fibre optics was first applied in the ARPA net or other government programmes? Well, a large share of the technology development behind the Internet, fibre optics and related developments has been funded by government projects and driven by large government customers. Here’s the fibre optics posting where I tried to find out about the possible government history of this technology: http://en.wikipedia.org/wiki/Fiber-optic_communication. The issue of fibre optical cables is referred to, but not deeply covered in Ruttan’s book.

How about mobile telecommunications?

Sunday, June 14, 2009 by Mats Larsson

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The market works small wonders, at best.

In order to facilitate large scale transformation of energy systems with precision, we need plans.

We may take the example of wave power. There are now several types of wave power generators in development http://home.clara.net/darvill/altenerg/wave.htm that compete with each other. There are probably hundreds of companies that invest in this development. We may be impressed by the activity and the inventiveness that these efforts show. Without a free market we would never have had this degree of inventiveness. Correct!

However, if we look at the time line from here until such time that wave power will generate 1% of the electricity of any large country, or 10%, which is even further into the future, we cannot rely on the market forces alone. If we do we may have to wait 15-20 years until wave power supplies 1% of the electricity of any large country. With planned projects, in which we (a number of countries together or one country, maybe a large region in case investment need is moderate) focus on one or a small number of alternative technologies and companies, we will most probably be able to halve the time to large scale implementation. We will know how much time we can save if we care to analyze the issue.

We know that in the cases such as the present too many inventors and small companies try their luck in a new and promising field. We also know that this is likely to create a bubble, sometimes easily observed, sometimes not so easy to observe, because it may be related to a smaller industry or a few industries.

Regardless of the size of the bubble, society will more rapidly enjoy the fruits of the best ideas and the best efforts to build strong companies. We could evaluate them now, based on a number of criteria that we could agree upon.

In the case of the Apollo project, NASA had a blueprint for the key parts of the space craft and other necessary aspects of the program a year after the famous speech by President Kennedy in May 1961 http://www.youtube.com/watch?v=L8Q4g-iINWU. We can do the same in the case of wave power, biofuels for transportation and other necessary developments for the future. We could, in a planned and managed project, make blueprints for the development of a number of key technologies and run focused development and implementation projects to realize their full potential.

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Mr. President, European Commissioner, Prime Minister, Herr Bundeskanzler, Statsminister etc,

We no longer need to debate whether we should have a market economy or whether we need planned development. Following the conclusions of the late Professor Vernon W. Ruttan http://en.wikipedia.org/wiki/Vernon_Wesley_Ruttan we need large scale government investments for the long term in order to develop new general purpose technologies http://en.wikipedia.org/wiki/General_purpose_technology . These technologies are necessary for our long term economic development and for the renewal of society.

We need to invest “big time” http://en.wikipedia.org/wiki/Big_Time in order to rapidly develop the ones we need to transform global energy systems on a large scale. We need to run this development as efficiently planned and managed large scale programs, like the Apollo program, which we may remember.

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