John Galt and the Billion Tweaks

My colleague Jason Kuznicki nails this:

Ayn Rand hated F. A. Hayek, but in a weird way, the Hayekian idea of the entrepreneur — a little guy who happens to stumble onto a tiny, useful bit of knowledge, and who finds himself free to employ it — is a better fit to the relatively more sophisticated view of Rand’s work, which holds that Atlas is just a metaphor, not a blueprint for world takeover. Schumpeter’s heroic entrepreneur is, I think, empirically wrong, but better suited to a literal reading ofAtlas.

Who is John Galt? An ephemeral process. And if you could follow that, well, you get the libertarian gold star for today.

I get the gold star! Saltative, game-changing, lone-genius invention does happen, but not very much. Sustained growth is driven primarily by an accumulation of tiny productivity-enhancing innovations. Part of the problem with Obama's Ecomagination Industrial Policy is that it's looking to finance a quantum leap. Like the dominoes-of-democracy best-case scenario for Iraq, the dreamy upside could be huge, sure. But the smart money is on lower than average returns to investment. The problem isn't that we're going to get some wasteful Project X instead of Galt's motor, because all our Galts went MIA. The problem is that we're going to get Projects A-Z, most of which will be a bust, instead of some significant number of the billions of tweaks that make innovation and growth happen. 

A couple sentences from Robin Hanson for your consideration:

Small differences in growth rates eventually overwhelm most other considerations, so the clustering and innovation externalities that create growth differences deserve far more public attention. Unfortunately most people yawn at growth theory; they prefer stories about conflict, status, moral fiber, heroes, and epic changes.

That is, people prefer romance. Here's one way to understand the “going Galt” dramatics. Obama is causing a lot of Rand fans to completely flip their lids in part because Obama and his devotees are Bizarro World Randian romantics in the grip of an adolescent faith in the generative powers of the state.