Thursday, August 19, 2010

Petraeus interview with Danger Room

A must read

Israel: entrepreneurial powerhouse in the high tech sector

Why is that?

That is the basic question explored in this episode of "Ideas in Action"



The title of the episode does not do the discussion's range justice. One thing that very clearly comes out from Mr. Senor's discussion, is that there are positive business consequences of Israel's policy of requiring young people to do stints in the IDF.

The IDF serves as a proving ground of "outside the box" creative problem solving thinking, forces maturation and leadership development. It also is an institution that does not punish failure, and encourages risk. The same can be said for the Israeli attitude toward business. It allows the market to reward, and to winnow, creating an environment that encourages innovation, this with minimal governmental control of that innovation (even if the government does provide money).

But, considering the first point: This is apropos of the on again off again debate concerning the value of the service academies, something I've commented on before. Even granting that the Israeli model is not quite like ours, the discussion of the IDF is well taken as empirically relevant to the discussion of the utility of the service academies.

Experience in creative problem solving and leadership, and learning ones craft in an institution that, within reasonable limits, allows for learning from risk and allows failure for that very purpose, is great prep for entrepreneurial life. More generally, it is great prep for courage in leadership. The private and public sectors benefit from such institutions, even admitting their warts.

Some of the questions surrounding the discussion of the value of the service academies center on questions as to how much risk and failure should be allowed within the academies, in the interests of developing leadership and problem solving abilities. In a sense the debate is over the appropriate ratio of paternalism to freedom. That is a complex question. The Israeli model would suggest that the ratio should favor freedom. Freedom to take risks, and learn from them.

Exit question: what proportion of successful entrepreneurs and heads of successful business are academy grads? Military background? Both?

Milton Friedman on "golden ages" of freedom, how they appear and disappear

Very interesting speculations: Golden ages appear when there are major erasures of governmental control, regulation and wealth redistribution, and gradually fade over a time period of two centuries or so, as well intentioned people reintroduce governmental control regulation and redistribution. Obviously Friedman had contemporary times in mind, but also historical periods. Does the thesis hold for the rise and fall of Classical Greece? How about the Roman Empire, or the British Empire? Do they fit the paradigm?