September 16, 2011

Solyndra, solyndra....

I suppose there's no point commenting on the faux-outrage about this story, but it is interesting (at least to me) that there seem to be people who are under the impression that it is a horrible, beastly thing for the government to have lost money on this sort of investment. Solyndra was involved a business that is typically high-risk, so any sort of investment was going to be iffy; the fact that it (and other businesses like it) went under isn't a surprise. The free market is inefficient when it comes to picking and choosing the sorts of new technologies that have a socially useful benefit in the future, since it's all about maximizing profits, right this minute. If the government was basing every decision on what to subsidy as a guaranteed profit center, it wouldn't be serving the public.

For emerging technologies, that's always the case: fifty years ago, similar investments by Big Gub'mint were made on new-fangled devices known as "computers," which were necessary because the free market hadn't really figured out a way to make a profit out of the gadgets. Later, the internet emerged out of similar risk-taking, unprofitable investments by the government. Society as a whole benefits when there is a tension between the free market and government, with the latter making the former more creative and less destructive.

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