New ideas is way to prosper


RALEIGH — In 1653, an Anglican clergyman named William Lee had an idea. Watching his family members work constantly with their knitting needles, Lee wondered if it might be possible to automate the process of knitting wool into cloth. “My duties to Church and family I began to neglect,” Lee later said. “The idea of my machine and the creating of it ate into my heart and brain.”

Six years later, in 1659, his idea had finally taken shape. Lee took his “stocking frame” knitting machine to London to show to Queen Elizabeth. He sought to secure a patent and begin production of the device, which he hoped would not only reduce the drudgery of home-based wool production but also make himself a tidy sum.

It was not to be, at least not at first. Queen Elizabeth was impressed with his ingenuity. But she refused to grant him a patent. “Consider thou what the invention could do to my poor subjects,” she said. “It would assuredly bring to them ruin by depriving them of employment, thus making them beggars.”

Of course, we now know the queen was dead wrong about how the automation of textile and apparel production would affect average people. While mechanizing the knitting of woolens, and later the spinning of threads and the weaving of cloth, did eliminate some opportunities for piece work, it vastly expanded the opportunities to work in new industries at much higher pay. It also vastly expanded the availability and reduced the price of clothing — with disproportionate benefits for the very low-income subjects Elizabeth professed to protect.

This is an old, old story. Established interests often oppose innovations that would confer net benefits on society. Some elites do it because they know the new technologies, products, firms, and industries will weaken their own power. Others do it because they are capable of conceiving of only the very obvious costs — piecework weavers no longer able to compete with automated factories — and not of the potential benefits.

It’s an old story that has become very relevant in today’s politics. Here in North Carolina, I’ve heard both liberal Democrats and conservative Republicans complain about expanding trade and increasing automation, both of which allow more production and exchange of goods and services at a lower cost. Their complaint? That North Carolinians will no longer have anything productive to do.

Queen Elizabeth was wrong then and her modern successors are wrong now. If advanced technologies such as robotics displace the need for human labor in some jobs, that will both create new industries (to produce and service the machines) and, by reducing prices, put more money in people’s hands to buy other goods and services — some of which may scarcely be dreamed of today.

Unless you were a science-fiction nerd, it’s unlikely 30 years ago that you thought it would be possible to purchase, at a reasonable price, a device small enough to put in your pocket that could place a telephone call across town or across the globe, manage your retirement portfolio, display up-to-the-minute news, play movies, and instantaneously summon reliable information on topics ranging from particle physics to Ethiopian history.

The smart phone represents a great deal of change — including a great many “lost jobs” (think of how all those services were previously delivered). But it has created a tremendous amount of real value and real jobs for real people. You can’t get one without the other.

Obstructing the free flow of ideas, capital, labor, and products across our country and around our world — that is, obstructing free enterprise itself — is foolish, counterproductive, and doomed to fail. Whether it is Hillary Clinton or Donald Trump, politicians who promise to make your life better by suppressing competition and innovation are misleading you.

North Carolina’s manifest economic and social challenges can be met only by making North Carolinians more productive, through innovation and investment. Continuing to reform our tax code, regulatory process, education system, and infrastructure programs will help. Emulating Queen Elizabeth’s economic illiteracy will not.

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John Hood is chairman of the John Locke Foundation and appears on the talk show “NC SPIN.”

John Hood is chairman of the John Locke Foundation and appears on the talk show “NC SPIN.”

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