Picking winners

From the obituary of a successful entrepreneur:

“I’m a serial entrepreneur,” he said. “I started ten companies up and seven went bankrupt.”

Given that Mr. Zockoll was a successful entrepreneur this gives us a good idea of how many truly bad - or perhaps, things that upon experimentation turn out not to be so good - ideas there are out there.

Which should give us pause for thought about these Tutto nello Stato ideas that float around out there. Given that people with a proven track record of getting it right, with all the incentives to do so, still have this dismal a success rate, then what are we to think of bureaucrats trying the same? Without that demonstrated skill, without the incentives, without, dare we say it, detailed knowledge of the markets themselves?

We’d run with the idea that the bureaucrats are going to pick even more losers than those directly involved and incentivised. There are those who disagree of course but it’s very much less than obvious that they’ve the empirical data to back up their pretension.

One of the grand functions of free to enter markets is precisely this - sorting through ideas that work and don’t work. Thinking about it, planning it, studying it, doesn’t in fact, work. For every business plan works until it first confronts the market. As New Coke showed. Given that this is the test it seems logical to use market players to do the testing rather than those not subject to those market forces - with other peoples’ money to boot.