How to Sabotage Progress

Michael Munger,

Release Date
December 1, 2016


Lobbying & Special Interests

During the earliest part of the industrial revolution, workers who were upset about losing their jobs to advanced machinery would throw their shoes into the machines in order to sabotage production. We’re seeing recurrence of  sabotage again today, but there’s no more successful saboteur than regulation. Duke University Professor Michael C. Munger explains.

Let’s tax the iPhone to save BlackBerry (blog post): Chris Koopman uses Blackberries to explain the problem with regulating Uber to help taxi drivers.
How Cronyism is Hurting the Economy (video): Jason Brennan explains how we should address the problem of cronyism.
Free Market Economics: Uber, Airbnb, & Feastly vs Government Regulation (video): Chris Koopman explains the benefits of the sharing economy and why we should be careful not overregulate it.
Uber, drills, and why the decline of ownership is a good thing (article): Ryan Bourne explains why the growth of the sharing economy creates more wealth than one based primarily on ownership, drawing on Professor Munger’s insights on the work of economist Ronald Coase. 
“Bosses Don’t Wear Bunny Slippers” (article): If markets are so great, why are there firms? Professor Munger explains why transaction costs sometimes make bureaucratic organizations more efficient than markets. 
“Tomorrow 3.0” (article): The Neolithic and Industrial Revolutions created unprecedented economic expansion. Prof. Munger argues we have entered a third era: the Sharing Revolution.

Prof. Munger: Do you know where the word sabotage comes from? It’s an interesting
story. In the 18th century, during the earliest part of the Industrial Revolution, new
innovations dramatically increased the productivity of factories. Power looms were a 100
times more productive than the traditional hand looms. Consumers were able to afford
clothing and other necessities at lower prices than ever before, but new technologies
often have a downside.
In France and Belgium, the hand loom workers making traditional textiles opposed the
new power looms, which would destroy their jobs. When they recognized the threat, they
took action. They used hammers and clubs to break the power looms. Some of these
workers wore rough wooden clogs called sabots. They would sneak in and throw their
wooden shoes into the new machinery, breaking the fragile gears and shutting down the
production lines. The sabot attacks became known as sabotage, and these vandals?
The first saboteurs.
Of course, in the long run, it didn’t do much good. Power looms didn’t go away, and even
more automated processes, of weaving and making textiles, became standard. The
advantages to consumers were so large, that even widespread sabotage by disgruntled
weavers couldn’t hold back progress forever. We see the same thing happening in
France today. Disgruntled taxi drivers in Paris are rioting against Uber, another
innovation that’s threatening livelihoods. In a way, who can blame them? They’re worried
about losing their jobs and providing for their families.
Nevertheless, the efforts of these taxi drivers will fail, just like the weavers; and for the
same reasons. The innovations they’re protesting are hugely beneficial for the average
person, and bring prosperity to whole communities; but there is one way taxi drivers
could throw a clog into the gears of progress. That’s regulation. Regulations can
sabotage progress more effectively than the hand loom workers ever could. Cities all
over the world are implementing policies that outlaw innovations, like Uber software.
In my hometown of Raleigh, North Carolina, the city government actually made it illegal
for Uber drivers to pick up or drop off passengers at the airport. Now, I’m paying higher
prices and waiting longer whenever I want to travel, and if more cities are successful in
clamping down on Uber, soon you and your friends will have the same problem. It’s not
just Uber. We’re on the brink of revolutionary changes that could drastically improve our
lives, but these advances are constantly threatened by regulation. Maybe it’s the
regulations that need to be sabotaged. I wonder where I could get some of those
wooden shoes?