Software pioneer Douglas McIlroy stated, "The real hero of programming, is the one who writes negative code," where negative code is understood as line reduction. Continuing to deliver the same functionality with less and less code. That keeps systems agile and sustainable. Government should embrace that same principle: negative code - new laws that eliminate more code than they add themselves.
"Prosperity comes not from wealth or size, but from knowledge, innovation and strong institutions," Duvvuri Subbarao, former governor of the Reserve Bank of India, wrote last week. Yet there is a friction: innovation demands freedom and boldness, while bureaucracy demands order and control. That tension determines whether a country advances - or stalls.
Subbarao's message resonates with the work of Mokyr, Aghion and Howitt, who received this year's Nobel Prize in economics for their theory of creative destruction: growth occurs through constant innovation of technology, ideas and institutions. Their conclusion is clear: Countries that embrace innovation build futures. Countries that distrust change lose momentum.
But without reliable institutions, even the most innovative economy collapses. So growth requires both freedom and structure - a government that protects, structures but does not stifle. In classical liberalism, this is called freedom in bondage: a small, expert government that regulates, but respects and maintains the freedom of citizens and entrepreneurs.
Yet in recent years, governments - sometimes forced by activist appeals - too often choose certainty over innovation. Rules pile up, procedures stiffen, risks are shunned. What was once intended to create order is slowly turning into a brake on progress: a system that is becoming increasingly syrupy, because no one can oversee or even understand the whole.
Subbarao rightly warns: a great economy is not automatically a prosperous one. Growth without innovation does not produce lasting prosperity. Even organizations become civilized within themselves: executives become risk-averse, decision-making revolves around check-offs and hedging, and employees keep their ideas to themselves. This creates a culture of caution in which innovation slowly stagnates.
His warning was meant for India, but can be effortlessly translated to the European Union. From dynamic economic cooperation in the EEC, we have degenerated into a protective union of nation states - countries that stifle rather than encourage each other.
And increasingly get in each other's way. Remember the expression: small is fine, because big (eventually) bleeds to death. We also see this happening with the expanding EU: an inward-looking official organization that enjoys less and less support from its member states and citizens.
Yet government can be the driver of progress. In the Golden Age, enterprising regents, ship owners and engineers worked together to build an infrastructure of trade, shipping and knowledge. After World War II, we repeated that success: in the Benelux, government, industry and science reinforced each other in reconstruction and technological innovation.
All major postwar projects - from tackling the housing shortage to the Delta Works, from building as a powerful NATO partner to our leading role in digitization and the Internet - came about at a time when the government was still pursuing an active industrial policy and Europe was primarily focused on economic cooperation.
Today, that initiative seems to have shifted to Brussels, where uniform regulations increasingly constrain national dynamics. However well-intentioned: no country in Europe is the same, and each will sometimes have to make different choices than its neighbors. Western, Eastern, Northern and Southern Europe are too different to be governed as one average whole. It is like an aquarium full of colorful fish from which one turns a gray fish soup: diversity disappears - and with it vitality. And lawyers guard the status quo.
In contrast, look at Estonia: with a digitale overheid and programs like e-Residency, it attracts entrepreneurs worldwide. Or to Malta, which allows DAOs (decentralized autonomous organizations) to register with the Chamber of Commerce. The lesson is clear: A helpful government invests in knowledge, gives space to doers and understands that prosperity comes from boldness - not file folders.
The same bureaucratic tendency that can stifle countries also applies within companies and knowledge organizations.Managers and directors hide behind procedures, innovation is overtaken by compliance, and creative risk-taking is discouraged. The result? A paradox: The higher the level of knowledge, the lower the audacity.
Can we get ourselves moving again, or is it waiting for an outside "disaster" - a stock market crash, a serious war - to break the deadlock. We have entered a state of paralysis by analysis: so much discussion, we are no longer able to make real decisions.
In addition, the government has split itself into policy and implementation. This has severed the connection between thinking and doing. Policy makers lose sight of the reality in the field, while implementing organizations no longer have a voice in policy development. Brain and hands function separately.
As if that were not enough, the government then outsourced both policy production and implementation to market participants. This created a system of disconnected organizations implementing policy without anyone feeling ownership anymore. Implementation was sent into the woods with often unenforceable policies, while the government itself no longer knew what was happening on the ground.
So the question is not only how we make laws, but whether we dare to break them down. How can we make laws that bring simplicity instead of complexity? In short: "Negative laws - for positive government."
Subbarao's warning rings loud: strong institutions should drive innovation, not inhibit it. The question now is: will Europe dare to become an entrepreneurial government again - or will it remain stuck in regulatory excess?
