Category: Entrepreneurship

Regulators Do Not Understand the Sense of Urgency of Some Who Are Dying

Many know that the first gift of Prometheus to humanity was fire. Fewer know that his second gift was blind hope. International value surveyor Ronald Inglehart concluded that happiness depends less on current status than on hope for the future.

Many who are facing death without any standard therapy to save them, are anxious to try a Hail Mary experiment–a potential therapy with many risks, but with a possible path forward, with hope.

A libertarian or classical liberal says that they have the right to choose hope.

In the concluding passages quoted below it is easy to sense the hope that the pig kidney transplant gave Tawana Looney.

(p. A18) A 53-year-old Alabama woman with kidney failure who waited eight years for an organ transplant has received a kidney harvested from a genetically modified pig, NYU Langone Health surgeons announced on Tuesday [Dec. 17, 2024].

The patient, Towana Looney, went into surgery just before Thanksgiving. She was in better health than others who have received porcine organs to date and left the hospital 11 days after the procedure.

. . .

Dr. Robert Montgomery, director of the NYU Langone Transplant Institute, co-led the surgery with Dr. Jayme Locke, a transplant surgeon who applied two years ago for approval from the Food and Drug Administration to perform the operation for Ms. Looney.

. . .

The experimental procedure was approved by the Food and Drug Administration under its expanded access or compassionate use program, which allows unapproved products to be used when patients have life threatening conditions.

. . .

About two years ago, Dr. Locke contacted Ms. Looney. Dr. Locke was intent on finding better solutions for patients with kidney failure, which is rampant in Alabama and disproportionately affects the state’s Black residents.

It was the beginning of a conversation that spanned nearly two years while the physician sought special F.D.A. permission to do the xenotransplant on Ms. Looney, who was eager to get started.

“I said, ‘OK, where do I sign?’” Ms. Looney recalled.

“But she said, ‘This is new territory. This is new ground. I don’t know what might happen, and a lot of things could go wrong here.’ I said, ‘OK, when are we going to do it?’ And she went through all the if’s and and’s and what might happen again.”

The dialogue continued on and off for months. “We talked every day, and every day we talked she said, ‘Are you sure?’ And I said, ‘I’m positive. My mind is made up,’” Ms. Looney said.

Last month, while Ms. Looney was sitting in her dialysis chair during her morning treatment, her phone rang. It was Dr. Locke, who asked, “How do you feel about flying up to New York?”

Dr. Locke explained that she would do the surgery with Dr. Montgomery, the mentor who trained her.

“I said, ‘But what about Christmas? What about Thanksgiving?’ ” Ms. Looney said.

“She said, ‘It is going to be the best Christmas present you ever got.’ I said, ‘Yes, ma’am, it is.’”

For the full story see:

Roni Caryn Rabin. “Alabama Woman Gets Nation’s 3rd Pig Kidney Transplant.” The New York Times (Wednesday, December 18, 2024): A18.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date Dec. 17, 2024, and has the title “Alabama Woman Receives Nation’s Third Pig Kidney Transplant.”)

Chinese Communist Regulators Will Want to Deep-Six DeepSeek

Many policy experts have worried than China’s economy will surpass the economy of the United States. If we lived in a world of totally free trade, I would not care if this happened. Economics is not a competitive sport where one team can win only if another team loses. A free economy is not a zero-sum game. If you are OK with me mixing metaphors: a rising tide really does lift all boats. (Amar Bhidé (quoting Paul Krugman, if memory serves) does a good job of making this point in The Venturesome Economy.)

But even though it wouldn’t bother me, China’s economy will not surpass that of the United States if China continues to oppressively regulate its economy and we continue to exuberantly unregulate our economy. An economy thrives when entrepreneurs thrive and entrepreneurs thrive when unregulated.

Consider the recent hand-wringing over the recently announced DeepSeek Chinese A.I. program. The Chinese Communists will be especially energetic in regulating entrepreneurs in the A.I. sector because the Communists cannot afford to have Chinese A.I. programs giving true answers to questions in any way related to the Chinese economy, or to the corruption and authoritarianism of the Chinese Communist regime. A.I. policy expert Barath Harithas understates the situation when he says: “Overregulation and the need to adhere to ‘core socialist values’ could risk neutering A.I.’s potential” (as quoted in Pierson and Wang 2025, p. A4).

Barath Haritas’s statement on overregulation of A.I. in China can be found in:

David Pierson and Berry Wang. “Success of DeepSeek Lifts China, but Party May Halt Its Progress.” The New York Times (Tues., February 4, 2025): A4.

(Note: the online version of the article has the date February 2, 2025, and has the title “DeepSeek Is a Win for China in the A.I. Race. Will the Party Stifle It?”)

The book by Amar Bhidé that I praise in my initial comments is:

Bhidé, Amar. The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. Princeton, NJ: Princeton University Press, 2008.

Dow Chemical CEO Oreffice Candidly Called Environmentalists “Professional Merchants of Doom”

I have the impression that few C.E.O.s today display the open candor that Ralph Nader admired in Paul Oreffice. Is that because cancel culture has been efficient at weeding out any rising executives who might be tempted to be candid? Or do I have a mistaken impression due to the press not reporting as often on the candid comments still being made by some C.E.O.s?

[I was happy to see that Oreffice had learned public speaking in a Toastmasters Club. I heard a lot about Toastmasters as a child–my father was very active in Toastmasters and was eventually elected President of the whole international self-help organization.]

(p. C6) In a 1977 speech at Central Michigan University, Jane Fonda accused Dow Chemical of exposing workers to dangerous substances and not paying its fair share of taxes. Paul Oreffice, who was then president of Dow’s U.S. operations, sent a letter to the university denouncing Fonda as “an avowed communist sympathizer” who was spreading “venom against free enterprise.”

He also cut off Dow’s donations to the university.

. . .

Addressing a business conference in 1979, Oreffice described environmentalists as “professional merchants of doom” and enemies who were destroying free enterprise, according to a Washington Post report.

. . .

Ralph Nader, the consumer-protection crusader, often was at odds with Oreffice but saw merit in his candor. “He is comparatively open to interviews, to questions from audiences, to debates,” Nader wrote in “The Big Boys,” a 1986 book written with William Taylor. “Despite his position as chief executive of a major corporation embroiled in ongoing controversies, he chooses not to hide behind company spokesmen and other bureaucratic shields.”

. . .

Oreffice resisted organization charts because he believed they “put people in boxes.”

. . .

. . ., Oreffice . . . learned public speaking at a Toastmasters club, . . .

As a CEO, he reduced costs and bureaucracy through attrition rather than mass layoffs. “How can you expect allegiance from your employees when you don’t show them any yourself?” he wrote in his memoir.

For the full obituary see:

James R. Hagerty. “An Outspoken Former CEO Of Dow Chemical.” The Wall Street Journal (Saturday, February 1, 2025): C6.

(Note: ellipses added.)

(Note: the online version of the obituary has the date January 29, 2025, and has the title “Paul Oreffice, Outspoken Former CEO of Dow Chemical, Dies at 97.” Where the wording is different between the two versions, the passages quoted above follow the online version.)

Oreffice’s memoir mentioned above is:

Oreffice, Paul. Only in America: From Immigrant to CEO. Macon, GA: Stroud & Hall Publishers, 2006.

Curing Cellular Senescence Could Extend Healthy Lifespan

Senolytics are chemicals that kill senescent cells, cells that do function properly but do not die. The cells are believed to cause aging and eventual death. They also are believed to cause illnesses such as coronary artery disease and Alzheimer’s. If senescent cells can be expelled, then we can hope to extend, not just lifespan, but what really matters–healthy lifespan.

(p. A10) The same underlying factors that contribute to aging also play a role in the development of diseases, says Richard Faragher, a professor of biogerontology at the University of Brighton and board member of the American Federation for Aging Research. He cites the example of a biological process called cellular senescence, which is when cells that stop dividing but don’t die build up as people age. The process is linked to various age-related diseases.

“Can we do anything to impact the fundamental biology of human aging? I think the answer is an emphatic yes,” says Faragher.

Longevity drugs, if proven to work, could slow or prevent the onset of age-related conditions rather than treating them after they develop, and eventually save millions on chronic disease spending in later life, advocates say. In 2021, the costliest 1% of traditional Medicare beneficiaries accounted for 19% of spending, according to the nonpartisan watchdog agency the Medicare Payment Advisory Commission. Beneficiaries in their last year of life tend to generate more spending than others.

For the full story see:

Alex Janin. “The Scientific Fight Over Whether Aging Is a Disease.” The Wall Street Journal (Wednesday, Feb. 5, 2025): A10.

(Note: the online version of the story has the date January 27, 2025, and has the same title as the print version.)

Land Use Regulations Slow Home Building

Productivity in manufacturing in the U.S. between 1930 and 2020 has increased, with stagnation for the last 10 years. In contrast, residential construction productivity increased, with more variability, from 1930 until the 1970s, and then stagnated or decreased. Starting in the 1970s an increase in land use and environmental regulations caused the stagnation.

So if we want more and better and cheaper housing, the key is less government regulation.

The study I summarize above is:

D’Amico, Leonardo, Edward L. Glaeser, Joseph Gyourko, William R. Kerr, and Giacomo A.M. Ponzetto. “Why Has Construction Productivity Stagnated? The Role of Land-Use Regulation.” National Bureau of Economic Research Working Paper No. 33188, Nov. 2024.

Davos Worries Innovative European Firms Will Relocate to U.S. for Fewer Regs and “Kinder” Trump

Many of those with the passion to persevere in overcoming the necessary and unnecessary (regulatory) obstacles to medical innovation, do so because they have a sense of urgency due to skin in the game–they or a relative is directly affected by the disease they are passionate to cure. Dr. Edward Scolnick whose story I quote below, is a great example. In the story, we find another example, Ted Stanley, who donated $100 million to Scolnick because Stanley’s son is also suffering mental illness. And perhaps an indirect example? Rienhoff does not directly have skin in the game, but he is playing a key role because of Scolnick’s passion, and Scolnick’s passion is due to his skin in the game.

If we want more cures we will reduce the unnecessary (regulatory) obstacles so that those with less skin in the game (and so less passion to persevere) will also innovate.

[“Skin in the game” has been emphasized by Taleb in his book with that title.]

(p. A2) The U.S. was outperforming much of the world before Trump was elected.

His agenda could extend that outperformance by making the U.S. the preferred destination for foreign investment via lower taxes and regulation and even cheaper energy, while his promised tariffs hurt others’ exports.

. . .

Many at Davos blamed Europe’s dismal outlook on the failures of its own leaders, not on Trump.

European scientists are making progress on technologies that use genetically engineered microbes to solve any number of problems, said Kasim Kutay, the chief executive of Novo Holdings, which manages the assets and wealth of the foundation that controls Danish pharmaceutical company Novo Nordisk.

It takes seven to eight years, however, to get such a product approved by European regulators, compared with two to three in the U.S., he said: “A lot of that innovation is happening in Europe, but the companies ultimately seek funding in the U.S.”

One particular source of anxiety in Europe is that its top companies will move to the U.S. in search of higher stock valuations, less regulation and kinder treatment by Trump.

Rich Nuzum, global chief investment strategist for investment consultants Mercer, said Trump’s deregulatory drive might jolt Europe into action.

“If the U.S. economy continues to power ahead, if every company wants to be headquartered in the U.S. and traded in the U.S. because of a lighter regulatory burden…European C-suites will say to European policymakers, ‘Do something, or we’re going to move overseas.’”

The U.S. accounted for 44% of Swedish telecom equipment giant Ericsson’s net sales in the third quarter of 2024, up from 31% a year earlier. Chief Executive Börje Ekholm has criticized excessive regulation for discouraging the upgrading of Europe’s networks. Asked if Ericsson would move its head office to the U.S., Ekholm said: “We are Swedish based. But I think every company in Europe will need to think about this going forward.”

Like Europe, China faces headwinds; tariffs would be just one more.

China’s problem “is not Trump,” said Keyu Jin, a British-based economist specializing in the Chinese economy. “It’s the unemployment numbers. So many companies going under. So much debt the government owes to the private sector. The problems with young people. The ‘lying flat’ problem.”

For the full story see:

Greg Ip. “Davos Dissects Risks, Rewards of Trump.” The Wall Street Journal (Thursday, Jan. 23, 2025): A2.

(Note: ellipsis between paragraphs, added; ellipsis internal to a paragraph, in original.)

(Note: the online version of the story has the date January 22, 2025, and has the title “Trump’s Arrival Brightens U.S. Outlook, Darkens Everyone Else’s.”)

Musk’s Defense of Free Speech Leads an E.V. Hater to Become a Tesla Cybertruck Lover

I admire Elon Musk’s energy, his ability to focus his mind in spite of distractions, and his ambitious entrepreneurship. The kid in me who got up early to watch Apollo space launches admires his ambition to take us to Mars. But what I admire most is his willingness to put that ambition at risk by spending $44 billion to buy Twitter (now X) in order to defend free speech. Too often entrepreneurs will put their dream above everything else. Musk put free speech above his dream.

And it’s not just the $44 billion. Many of his actual and potential Tesla customers are left-wing environmentalists who criticize his purchase of Twitter, and later his leading D.O.G.E. If that dislike leads to lower sales and profits at Tesla, then Musk will have even fewer funds to take us to Mars.

But the outcome is not certain. Maybe a society with free speech is one that is more likely to allow Musk the freedom to take trial-and-error risks to get us to Mars. And there is a small chance that Tesla will sell more cars because of his principled stand.

Tesla owners who supported Harris for President are buying bumper stickers to slap on their Teslas that read “I Bought This Before We Knew Elon Was Crazy” (Peyser 2024, p. D4).

But consider Berkeley Professor Morgan Ames who bought a Tesla in 2013. Even though she did not like Elon Musk’s views she later bought a second Tesla “because she couldn’t find other electric cars that matched Tesla’s capabilities” (Peyser 2024, p. D4).

And there is Oklahoman Sean Ziese who said to his wife: “If Elon is going to start supporting conservatives and free speech, I’m going to start supporting Elon, even though I hate E.V.s” (Ziese as quoted in Peyser 2024, p. D4). Then Ziese went out and bought himself a Tesla Cybertruck.

Ziese now concludes that his driving a Tesla Cybertruck is “a really neat experience. It never would have happened if Elon never would have bought X, and, you know, got free speech going again” (Ziese as quoted in Peyser 2024, p. D4).

The source article quoted above is:

Eve Peyser. “Tesla Owners Don’t Drive Away Quietly.” The New York Times (Thurs., December 19, 2024): D4.

(Note: the online version of the Eve Peyser article has the date Dec. 11, 2024, and has the title “For Tesla Owners, a Referendum Through Bumper Stickers.”)

Once You Experience Entrepreneurship “Everything Else Is Boring”

(p. B12) C. Richard Kramlich, an early investor in Silicon Valley who co-founded the investment giant New Enterprise Associates, helping to fuel the booming tech industry, died on Saturday [Feb. 1, 2025] at his home in Oakville, Calif., in the Napa Valley. He was 89.

. . .

He co-founded his own firm, New Enterprise Associates, or NEA, building it from an initial $16 million fund in the 1970s to one that now oversees investments of nearly $26 billion.

But he stood out among Silicon Valley’s sea of swashbuckling financiers because of his grace and kindness, said Scott Sandell, the chief investment officer and executive chairman of NEA.

. . .

When he was 13, Dick followed in his father’s entrepreneurial footsteps, starting his own “little lightbulb company,” he said in a 2015 interview with the Computer History Museum. “My father encouraged me to do it if I used my own money, and so I bought half a train car worth of lightbulbs from Sylvania Corporation” and resold them from his bedroom.

He added: “I come from three generations of entrepreneurs, and once you get it in your DNA, everything else is boring.”

. . .

. . . Mr. Kramlich met a pair of entrepreneurs who were both named Steve (Jobs and Wozniak). Their company, Apple Computer, was not as good as two other personal computer companies in the market, Mr. Kramlich said in 2015. But their sense of design and entrepreneurial spark were impressive. “They had pizazz,” he said, “where the other two companies were more engineering oriented.”

. . .

Venture capital investing is designed to absorb many losses in pursuit of one home-run deal, leaving a graveyard of failed start-ups along the way. But Mr. Kramlich was known for sticking with struggling investments long after others had abandoned them.

“He used to say, ‘Never say die,’” Mr. Sandell said.

In the early 1980s, Forethought, the start-up behind PowerPoint software, was about to run out of money, and NEA’s partners refused to pony up more. So Mr. Kramlich convinced his wife that they should pause work on the house they were building on Stinson Beach and use the cash to keep the company alive instead. The gamble paid off: In 1987, Microsoft bought Forethought for $14 million, and PowerPoint went on to become one of the world’s best-known software programs.

For the full obituary see:

Erin Griffith. “Richard Kramlich, 89, A Silicon Valley Investor Revered for Humaneness.” The New York Times (Wednesday, February 8, 2025): B12.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the obituary has the date Feb. 6, 2025, and has the title “C. Richard Kramlich, Early Investor in Silicon Valley, Dies at 89.”)

Innovative Research Is More Likely to Come from Small Teams

The incentives and constraints of doing research in medicine make the process very expensive, which leads it increasingly be a large group activity.
The article below suggests that large group research tends to be less innovative. We should reduce the costs by reducing regulations, including the mandate that no drug can be sold without an F.D.A.-approved Phase 3 clinical trial to prove efficacy.

(p. D3) In the largest analysis of the issue thus far, investigators have found that the smaller the research team working on a problem, the more likely it was to generate innovative solutions.  . . .

The new research, published on Wednesday [Feb. 13, 2019] in the journal Nature, is the latest contribution from an emerging branch of work known as the science of science — the study of how, when and through whom knowledge advances.

. . .

In the study, a trio of investigators led by James A. Evans, a sociologist at the University of Chicago, mined selections from three vast databases: . . .

. . .

When the team correlated this disruption rating to the size of the group responsible for the project or paper, they found a clear pattern: smaller groups were more likely to produce novel findings than larger ones. Those novel contributions usually took a year or so to catch on, after which larger research teams did the work of consolidating the ideas and solidifying the evidence.

“You might ask what is large, and what is small,” said Dr. Evans. “Well, the answer is that this relationship holds no matter where you cut the number: between one person and two, between ten and twenty, between 25 and 26.”

. . .

Psychologists have found that people working in larger groups tend to generate fewer ideas than when they work in smaller groups, or when working alone, and become less receptive to ideas from outside.

. . .

The new study suggests that a different kind of funding approach may be needed, one that takes more risk and spends the time and money to support promising individuals and small groups, Dr. Evans said.

“Think of it like venture capitalists do,” he said. “They expect a 5 percent success rate, and they try to minimize the correlation between the business they fund. They have a portfolio, one that gives them a higher risk-tolerance level, and also higher payoffs.”

For the full story see:

Benedict Carey. “Is Bigger Better? Not in This Case.” The New York Times (Tuesday, February 19, 2019 [sic]): D3.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date Feb. 13, 2019 [sic], and has the title “Can Big Science Be Too Big?”)

The academic article co-authored by Evans is:

Wu, Lingfei, Dashun Wang, and James A. Evans. “Large Teams Develop and Small Teams Disrupt Science and Technology.” Nature 566, no. 7744 (Feb. 2019): 378-82.

Almost $2 TRILLION in Compliance Costs for Biden’s 1,213 New Regs over 10 Years

I am queasy about Trump’s tariffs but hopeful about his deregulation. Besides attacks on freedom of speech, regulations are currently the most binding constraint on innovation and flourishing in the U.S. I hope that the tariffs will be a bargaining ploy that in the long run will result in less protectionist policies for both us and our trading partners. But even if my hope is dashed and higher tariffs become a sustained policy, I believe (but cannot prove) that heavy regulations are the greater evil.

(p. A13) By the time Mr. Biden left office, his administration had issued 1,213 new regulations, according to the American Action Forum. The Washington think tank tracks federal regulations, their cost and added paperwork hours on its Regulation Rodeo website. Mr. Biden’s red tape will result in $1.9 trillion in compliance costs over the first 10 years the new rules are in effect, according to AAF.

By comparison, in Mr. Trump’s first term, his administration issued slightly more regulations—roughly 1,340—but many reduced costs to businesses and consumers. In total, they cost only $64.7 billion, less than 4% of Mr. Biden’s total.

Mr. Biden’s regulatory regime was far more expensive than even Barack Obama’s. Over two terms, the Obama administration issued 2,997 regulations, at a price tag of $870.5 billion. That’s less than 46% of the regulatory cost Mr. Biden racked up in four years.

For the full commentary see:

Karl Rove. “Trump Sets Out to Break Burdensome Rules.” The Wall Street Journal (Thursday, Jan. 23, 2025): A13.

(Note: the online version of the commentary has the date January 22, 2025, and has the same title as the print version.)

Tainted Sulfa Drugs Led Feds to Mandate Drug Safety Tests

Note that the impetus for the creation of mandated drug licensing was an episode of tainted sulfa drugs. The motive of the mandate was to assure safety. The later impetus for the strengthening of mandated drug licensing was the thalidomide episode. Again the motive was to assure safety.

Economists annoyingly emphasize trade-offs. If we stuck to regulation for safety, we could vastly reduce the costs of drug development, allowing more and faster drug innovation.

A case can even be made for doing away with safety regulation. Firms have incentives to produce safe drugs, and private certifying organizations provide information, for instance Consumer Reports. And there are many examples of F.D.A.-approved drugs that turned out to be unsafe (e.g., Vioxx). Mandated safety regulations reduce consumer freedom to choose, and slow the amount and speed of new cures. Mandated efficacy regulations reduce them even more.

(p. C6) Between the late 1930s and the late 1940s, every major class of antibiotics was developed, as William Rosen meticulously recounts in “Miracle Cure: The Creation of Antibiotics and the Birth of Modern Medicine.” Rosen’s highly informed retelling captures the drama of scientists’ quest, against long odds, to find and produce bacteria-killing drugs—and the egos, ambitions, brilliance and resolve that drove them.

. . .

It is a strength of “Miracle Cure” that Rosen places its many tales of discovery in their larger contexts, explaining for instance the near-complete lack of drug-safety regulation that prevailed when the Tennessee-based S.E. Massengill Co. began selling Elixir Sulfanilamide in October 1937. To make the drug more palatable, the company’s chief chemist had dissolved it, along with raspberry flavoring, in a toxic chemical also used in brake fluid. At least 73 people died. The Federal Food Drug and Cosmetic Act became law the following year. Companies would no longer be able to market new drugs without government licensing. And the government would have to ensure that they were safe.

This book is not for the casual reader. At some points Rosen gets into weeds so thick that only aficionados will find a way through. Still, it’s an important contribution to a still-germane yet fast-receding history. And it’s all the more impressive that Rosen, formerly a book editor and publisher, wrote it as he was battling his own intractable disease. An aggressive cancer took his life in April 2016. He left behind a history worth reading.

For the full review see:

Meredith Wadman. “Medicine’s Age of Wonders.” The Wall Street Journal (Saturday, May 20, 2017 [sic]): C6.

(Note: ellipsis added.)

(Note: the online version of the review has the date May 19, 2017 [sic], and has the same title as the print version.)

The book under review is:

Rosen, William. Miracle Cure: The Creation of Antibiotics and the Birth of Modern Medicine. New York: Penguin Books, 2018.