Category: Methodology

Why You Want Your Surgeon to Be a Disciple of Lister

The sources of new ideas are diverse. Sometimes, as below, even a newspaper article can provide inspiration.
The passage below also provides another example of the project oriented entrepreneur, who is motivated by a mission to get the job done.

(p. 60) In Lister’s early years, the mid-1800s, half of all amputation patients died from hospital fever; in some hospitals the rate was as high as 80 percent. Lister, like all surgeons, had little idea of how to improve the situation. Then he chanced on a newspaper article that caught his interest. It described how the residents of a local town, tired of the smell of their sewage, had begun treating it by pouring into their system something called German Creosote, a by-product of coal tar. Something in the creosote stopped the smell. Lister had heard about the work of Pasteur, and he made the same mental connection the French chemist had: The stink of sewage came from putrefaction, rotting organic matter; the stink of infected wounds also came from putrefaction; whatever stopped the putrefaction of sewage might also stop the putrefaction of infected wounds. So Lister decided to try coal-tar chemicals on his patients. And he found one that worked exceptionally well: carbolic acid, a solution of what today is called phenol.   . . .
. . .
(p. 61) Lister’s insistence on stopping the transfer of bacteria in the operating room became absolute. Once when a visiting knighted physician from King’s College idly poked a forefinger into a patient’s incision during one of Lister’s operations, Lister flung him bodily from the room.

Source:
Hager, Thomas. The Demon under the Microscope: From Battlefield Hospitals to Nazi Labs, One Doctor’s Heroic Search for the World’s First Miracle Drug. New York: Three Rivers Press, 2007.
(Note: ellipses added.)

Doctors Rejected Pasteur’s Work

Whether in science, or in entrepreneurship, at the initial stages of an important new idea, the majority of experts will reject the idea. So a key for the advance of science, or for innovation in the economy, is to allow scientists and entrepreneurs to accumulate sufficient resources so that they can make informed bets based on their conjectures, and on their tacit knowledge.
A few entries ago, Hager recounted how Leeuwenhoek faced initial skepticism from the experts. In the passage below, Hager recounts how Pasteur also faced initial skepticism from the experts:

(p. 44) If bacteria could rot meat, Pasteur reasoned, they could cause diseases, and he spent years proving the point. Two major problems hindered the acceptance of his work within the medical community: First, Pasteur, regardless of his ingenuity, was a brewing chemist, not a physician, so what could he possibly know about disease? And second, his work was both incomplete and imprecise. He had inferred that bacteria caused disease, but it was impossible for him to definitively prove the point. In order to prove that a type of bacterium could cause a specific disease, precisely and to the satisfaction of the scientific world, it would be necessary to isolate that one type of bacterium for study, to create a pure culture, and then test the disease-causing abilities of this pure culture.

Source:
Hager, Thomas. The Demon under the Microscope: From Battlefield Hospitals to Nazi Labs, One Doctor’s Heroic Search for the World’s First Miracle Drug. New York: Three Rivers Press, 2007.

Amateur Leeuwenhoek Made Huge Contribution to Science

(p. 40) Antoni van Leeuwenhoek was a scientific superstar. The greats of Europe traveled from afar to see him and witness his wonders. It was (p. 41) not just the leading minds of the era—Descartes, Spinoza, Leibnitz, and Christopher Wren—but also royalty, the prince of Liechtenstein and Queen Mary, wife of William III of Orange. Peter the great of Russia took van Leeuwenhoek for an afternoon sail on his yacht. Emperor Charles of Spain planned to visit as well but was prevented by a strong eastern storm.

It was nothing that the Dutch businessman had ever expected. He came from an unknown family, had scant education, earned no university degrees, never traveled far from Delft, and knew no language other than Dutch. At age twelve he had been apprenticed to a linen draper, learned the trade, then started his own business as a fabric merchant when he came of age, making ends meet by taking on additional work as a surveyor, wine assayer, and minor city official. He picked up a skill at lens grinding along the way, a sort of hobby he used to make magnifying glasses so he could better see the quality of fabrics he bought and sold. At some point he got hold of a copy of Micrographia, a curious and very popular book by the British scientist Robert Hooke. Filled with illustrations, Micrographia showed what Hooke had sen through a novel instrument made of two properly ground and arranged lenses, called a “microscope.”  . . .   Micrographia was an international bestseller in its day. Samuel Pepys stayed up until 2:00 A.M. one night poring over it, then told his friends it was “the most ingenious book that I ever read in my life.”

Van Leeuwenhoek, too was fascinated. He tried making his own microscopes and, as it turned out, had talent as a lens grinder. His lens were better than anyone’s in Delft; better than any Hooke had access to; better, it seemed, than any in the world.  . . .  

(p. 42) Then, in the summer of 1675, he looked deep within a drop of water from a barrel outside and became the first human to see an entirely new world. In that drop he could make out a living menagerie of heretofore invisible animals darting, squirming, and spinning.

Source:
Hager, Thomas. The Demon under the Microscope: From Battlefield Hospitals to Nazi Labs, One Doctor’s Heroic Search for the World’s First Miracle Drug. New York: Three Rivers Press, 2007.
(Note: ellipses added.)

The example above is consistent with Baumol’s hypotheses about formal education mattering less, in the initial stages of great discoveries. (And maybe even being a hindrance).
See:
Baumol, William J. “Education for Innovation: Entrepreneurial Breakthroughs Versus Corporate Incremental Improvements.” In Innovation Policy and the Economy, edited by Adam B. Jaffe, Josh Lerner and Scott Stern, 33-56. Cambridge, Mass.: MIT Press, 2005.

The example is also consistent with Terence Kealey’s claim that important science can often arise as a side-effect of the pursuit of business activity.
See:
Kealey, Terence. The Economic Laws of Scientific Research. New York: St. Martin’s Press, 1996.

Based on Past Experience, the Renaissance Was Impossible

(p. 26) Even the wisest of them were at a hopeless disadvantage, for their only guide in sorting it all out—the only guide anyone ever has—was the past, and precedents are worse than useless when facing something entirely new. They suffered another handicap. As medieval men, crippled by ten centuries of immobility, they viewed the world through distorted prisms peculiar to their age.

In all that time nothing of real consequence had either improved or declined. Except for the introduction of waterwheels in the 800s and windmills in the late 1100s, there had been no inventions of significance. No startling new ideas had appeared, no new terri-(p. 27)tories outside Europe had been explored. Everything was as it had been for as long as the oldest European could remember. The center of the Ptolemaic universe was the known world—Europe, with the Holy Land and North Africa on its fringes. The sun moved round it every day. Heaven was above the immovable earth, somewhere in the overarching sky; hell seethed far beneath their feet. Kings ruled at the pleasure of the Almighty; all others did what they were told to do. Jesus, the son of God, had been crucified and resurrected, and his reappearance was imminent, or at any rate inevitable. Every human being adored him (the Jews and the Muslims being invisible). The Church was indivisible, the afterlife a certainty; all knowledge was already known. And nothing would ever change.

The mighty storm was swiftly approaching, but Europeans were not only unaware of it; they were convinced that such a phenomenon could not exist. Shackled in ignorance, disciplined by fear, and sheathed in superstition, they trudged into the sixteenth century in the clumsy, hunched, pigeon-toed gait of rickets victims, their vacant faces, pocked by smallpox, turned blindly toward the future they thought they knew—gullible, pitiful innocents who were about to be swept up in the most powerful, incomprehensible, irresistible vortex since Alaric had led his Visigoths and Huns across the Alps, fallen on Rome, and extinguished the lamps of learning a thousand years before.

Source:
Manchester, William. A World Lit Only by Fire: The Medieval Mind and the Renaissance, Portrait of an Age. New York: Little, Brown & Co., 1993.
(Note: italics in original.)

The Current Financial Crisis Reveals a Need for Reform

As I think about the current financial crisis, I have been struck by the uncertainty among economists about what should be done. Many economists are silent. Those who speak, have offered very diverse opinions. And even among those who express opinions, there is a lack of confidence in their opinions.
Milton Friedman used to say that economists will be listened to when there is a crisis, and that economists need to be ready, as Friedman himself was with his floating exchange rate proposal. (Milton, we need you again.)
I believe that one lesson from the current crisis is that we need reform—reform of economists’ research priorities and methods. We should become more interested in policy relevance, history and institutions; and less interested in mathematical rigor.
We should avoid what Schumpeter called “the Ricardian Vice.” (Highly stylized, aggregated models, based on unrealistic simplifying assumptions, that are then blindly applied to policy decisions in the actual, richly “thick” world—see McCloskey’s essay on thick and thin methods in economics.)
We also should spend less time in studying cute, counter-intuitive results (“freakonomics”), and spend more time on the big issues.
We should be willing to suggest institutional reforms and experiments, and participate in experiments (natural and artificial) to see how they work. (Spontaneous order is nice when it happens, but entrepreneurial vision and initiative can improve the world too.)
Capitalism has produced huge gains in longevity and standards of living. Yet capitalism is in danger of being hobbled or destroyed.
Schumpeter warned of “the crumbling of the protecting walls.” We should have been better prepared to rebuild and defend them.

Note: The “Ricardian Vice” phrase is from Schumpeter’s History of Economic Analysis, p. 473; the “protecting walls” phrase is from Capitalism, Socialism and Democracy, p. 143.

The McCloskey essay mentioned is:
McCloskey, Deirdre. “Thick and Thin Methodologies in the History of Economic Thought.” In The Popperian Legacy in Economics, 245-57. Cambridge, UK: Cambridge University Press, 1988.

Schumpeter Saw Keynes’ Work as a “Striking Example” of “the Ricardian Vice”

McCraw on Schumpeter’s History of Economic Analysis:

(p. 460) . . . , Schumpeter compared Keynes to David Ricardo: “His work, is a striking example of what we have called above the Ricardian Vice, namely, the habit of piling a heavy load of practical conclusions upon a tenuous groundwork, which was unequal to it yet seemed in its simplicity not only attractive but also convincing. All this goes a long way though not the whole way toward answering the questions that always interest us, namely the questions what it is in a man’s message that makes people listen to him, and why and how.”

Source:
McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.
(Note: ellipsis added.)
(Note: italics in original.)

McCraw Calls Schumpeter’s History of Economic Analysis “an Epic Analytical Narrative”

McCraw on Schumpeter’s History of Economic Analysis:

(p. 461) History of Economic Analysis succeeds where much economic writing or our own time fails, having sacrificed the messy humanity of its subject on the alter of mathematical rigor. Above all else, Schumpeter’s History is an epic analytical narrative. It is about real human beings, moored in their own time, struggling like characters in a a novel to resolve difficult problems. Sometimes the problems (p. 462) are purely intellectual. Sometimes they are issues of public policy. Often they are both. But what Schumpeter was trying to do—and in fact did—was answer the deceptively simple question he posed in the early pages of his book: to discover “how economists have come to reason as they do.”

Source:
McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

Among Academic Economists Interest in Entrepreneurship is “A Quick Ticket Out of a Job”

From McCraw’s discussion of Schumpeter’s “legacy”:

(p. 500) In the new world of academic economics, neither the Schumpeterian entrepreneur as an individual nor entrepreneurship as a phenomenon attracts much attention. For professors in economics departments at most major universities, particularly in the United States and Britain, a focus on these favorite issues of Schumpeter’s has become a quick ticket out of a job. This development arose from a self-generated isolation of academic economics from history, sociology, and the other social sciences. It represented a trend that Schumpeter himself had glimpsed and lamented but that accelerated rapidly during the two generations after his death.

Source:
McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

Schumpeter’s Final Thoughts on the Importance of the Individual Entrepreneur

Here is McCraw discussing and quoting Schumpeter’s notes for the Walgreen Lectures that he was preparing to deliver just before he died.

(p. 475) In notes he prepared in 1949 for the prestigious Walgreen Lectures, Schumpeter headed one entire section “The Personal Element and the Element of Chance: A Principle of Indeterminateness.” Here, he wrote that the time had come for economists to face a problem they had long tried to dodge:

the problem of the influence that may be exerted by exceptional individuals, a problem that has hardly ever been treated without the most blatant preconceptions. Without committing ourselves either to hero worship or to its hardly less absurd opposite, we have got to realize that, since the emergence of exceptional indi-(p. 476)viduals does not lend itself to scientific generalization, there is here an element that, together with the element of random occurrences with which it may be amalgamated, seriously limits our ability to forecast the future. That is what is meant here by “a principle of indeterminateness.” To put it somewhat differently: social determinism, where it is nonoperational, is a creed like any other and entirely unscientific.

Source:
McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

“Theory” Said Gene Sequencing Technique Was “Impossible”

In the book The Genome War, the story is told about how the leading theorist proved the impossibility of the gene sequencing technique. It was the Venter group that gave it a try and proved it could work. This story is similar to the one about theory saying that what Marconi was trying, was impossible. (See: Larson, 2006.)
Rosenberg and Birdzell (1986) discuss the case that theory had proven how solid objects fall. But Galileo’s experiments proved them wrong. This established the primacy of experiment and evidence, over theory.
When governments decide, they usually do what is safe, which is to follow current theory (or in rare cases, they pick Lysenko).
The entrepreneurial system, takes advantage of the tacit individual knowledge that is out there, but not yet theoretically defensible, and allows it to percolate to success.

References:
Larson, Erik. Thunderstruck. New York: Crown, 2006.
Rosenberg, Nathan, and L.E. Birdzell, Jr. How the West Grew Rich: The Economic Transformation of the Industrial World. New York: Basic Books, 1986.
Shreeve, James. The Genome War: How Craig Venter Tried to Capture the Code of Life and Save the World. 1st ed. New York: Alfred A. Knopf, 2004.