“I will promote freedom at all costs,” is the first line of the Draper University pledge. Draper University of Heroes is a school I created to encourage people with ideas and energy to pursue their visions through entrepreneurship and risktaking. For an entrepreneur, freedom matters most. The ability to try new things without government interference is paramount to the success of an innovative community.
Because freedom is so important to me, I appreciate all the great work the Independent Institute is doing. They understand freedom. Freedom leads to prosperity, to economic growth, and to innovation. While regulation and government control make us feel safer (although at some point they become less safe), they lead to stagnation, fear, and loss of human spirit.
History and studies have shown that a lighter-touch government leads to more innovation, higher economic growth, and a happier, harder working population. A heavy-handed government slows economic growth and stifles creativity. As governments spend more of their people’s wealth, they tend to add more rules and regulations and their innovation and GDP growth decline.
For the past 50 years, Silicon Valley has been perhaps the greatest engine of freedom in the United States, with entrepreneurs and innovators driving great change. It is comforting for innovators to know that Washington, DC, is 3,000 miles away, so they will be relatively unimpeded by the rules and regulations that stymie an innovation economy.
When there is a new innovation, there is almost always a sociological change. That change may affect the customers, competitors, and suppliers of the business, but it also affects the status quo. Fearmongers will spread fear about the new innovation. Once the new innovation starts to spread, these complainers go after the law, the press, and the government to try to keep things the way they were. Lawyers prepare for battle. Competitors fill the press with concerns, and try to make the government take notice and take action. Fortunately, our government generally allows innovation to continue for some time without intervention, but there are some departments that stop innovation in its tracks.
The FDA makes getting a new drug on the market a time-consuming and hugely expensive process, and they often get it wrong. The SEC took a perfectly good law that the JOBS Act provided and plucked it clean of wings so that few entrepreneurs try to raise money that way. The DOD continues to create so many barriers to sell to them that innovators avoid them and we end up with antiquated technologies defending us.