Despite this I doubt that innovation or the economy can thrive in complete anarchy. Some form of property law, contracts, torts, criminal law, the courts and police to enforce these are going to be necessary.

I hope you are right that innovation can proceed despite regulatory obstacles, but the last decade in the US has not proven to be highly innovative and I think it is because of these regulatory obstacles.

From one of my other posts: Social Media vs Institutions – "Denial, Anger, Bargaining, Depression and Acceptance. You might make the connection to the Kübler-Ross model’s 5 discrete stages of how people come to terms with dying. This is how many institutions and organizations will come to terms with these new, communication, collaboration and coordination platforms."

I think most institutional entities are in the denial, anger and bargaining stages with regard to "capping" the freedom to innovate. I would also contend that "The Genie's Out Of The Bottle" and will mostly be done in vain and at the expense of America's tax payers (what the hell else is new).

Great observations in your post Dale. You definitely gave me new perspective as to how to look at this.

The only concern I have with the exponential growth in innovation thesis is that it makes it sound inevitable. All we have to do is sit back and wait and this amazing innovation will take over. I think the innovation rate in the U.S. has significantly declined in this decade compared to the 90s. In my opinion, little known regulations are killing off innovation in the U.S., see http://hallingblog.com/2009/05/26/innovation-regu...