Were you to ask me, “Can a university create a market out of nothing?” I would answer: yes, it can. A university can indeed do that. However, intelligent people understand that this does not mean turning a university from an educational institution into a commercial enterprise. Nor do we mean that a university can create a market entirely on its own. We are speaking of something within its proper context, and understanding that context is a necessary condition for understanding what is meant.
After this introduction, it should also be clarified that we are speaking of the university as a symbol of the academic and scientific community in all its branches, not of its legal status or physical location. It is self-evident that our discussion is not about buildings and places, but about education, which is the university’s primary function. Accordingly, the discussion also encompasses every setting in which knowledge is produced or invested. This naturally includes individual innovators and inventors, researchers and developers in private companies, and indeed every person who seeks to turn the products of the mind into a source of wealth.
Also central to the discussion is the incentive-protective role of society and the state. Years ago, I knew a man who aspired to establish a factory specializing in the armoring of vehicles. He succeeded in producing the first prototype of a fully armored vehicle. When he presented it to a high-ranking figure, that person insisted that the manufacture of armored vehicles was not a matter for private individuals and that the project should be handed over to the government. The man accepted the demand reluctantly.
When I met him a decade after the incident, he told me that he had received a great deal of money, yet he felt profound sorrow because the project had died. It had been handed over to people who could not distinguish between acquiring a vehicle and manufacturing one. They believed that purchasing a reliable ready-made vehicle from a well-known company was preferable to spending money on experiments whose outcome was uncertain. This, of course, reveals their failure to grasp the fundamental difference between manufacturing something in your own country and purchasing what others have manufactured. I know of two other examples that resemble this one in most respects, the latest involving the development of an electric car.
In all these cases, everyone agreed on the need to encourage initiative. Yet the short-sightedness of some people made money the sole form of recognition, whereas the innovator wanted to continue working and to overcome the legal and bureaucratic obstacles maintained by people who had never considered the possibility that an innovator might come to them from somewhere, aspiring to create something that had never before crossed their minds.
Now that we have reached this point, it must be said that some innovations and new ideas appear strange to society, or perhaps even objectionable. This is more apparent in ideas than in practical technologies. If a society becomes accustomed to tolerating ideas that differ from its own or are alien to its beliefs and customs, it establishes what we call the “free market of ideas,” which John Stuart Mill regarded as a necessary foundation for innovation and the production of new ideas. But if such ideas are met with neglect, or if those who hold them are harmed, then thinkers and innovators will tend to withdraw, lose interest in producing anything new, or perhaps leave their society for others that they believe are more receptive to novelty.
Society can help innovators, and it can clear the way for them even when it does not actively assist them. In either case, society must adopt a broad outlook that tolerates those who are different, even when their views run counter to society’s convictions and beliefs.
In essence, the incentive-protective role of society and the state lies in helping capable innovators continue their work, undertake the challenges they believe themselves able to meet, and overcome difficulties, rather than exploiting them for publicity or persuading them to rest on their achievements.
Societies that celebrate things that are strange, different, and unfamiliar, or at the very least tolerate those who produce them, deserve to become incubators of creativity. By contrast, societies that seek to control and manage change, or that require a license for every undertaking, are more likely to become refrigerators for creative people, or perhaps even their graveyards.
