Schumpeter Springs A Leak
The Tea Party and Occupy Wall Street and climate change, normally not forces likely to zig together, have creatively destroyed the theory of creative destruction.
Joseph Schumpeter, law professor and dandy, posited around a hundred years ago that capitalism and democracy would feed each other forever so long as policy – mainly a lush source of money to borrow- encouraged kooky ideas. These ideas would feed a response of “creative destruction,” in which lots of cobblers suddenly faced empty cupboards because nobody wants any more horseshoes, then lots of cathode-ray assemblers stay home all day because everyone wants plasma TVs, and so forth. It’s an elegant thesis because it implies a value in venture capital that spreads across all zones in an economy. But.
What if part of the public no longer accepts the premise that people share resources and thus share the cost of those resources, another part of the public asks for and gets a bye on paying for all the perks it gets from everyone else- and then big changes in air and water expose the cost of the overall public’s failure to invest in fitness, freedom of movement, and scientific knowledge?
Well, then you get big shifts in power. Extremists bore into the two-party system on the right. Scattered protests on the left gather into a force that makes the hyper-rational mayor of New York City decide to stay on the sidelines. And dictatorships up their productivity, new technology and purchasing power while American employment flails. You can’t assume that destruction is creative if the cost of living with storm surges, weather disruption and filthy air will be dramatically higher in whatever new normal you happen to seek.
In that context, you might consider creative repair. You might find ways to train hard-to-employ people in mending bridges or creating carbon-capturing green space on contaminated sites. You might reward developers who give permanent jobs to neighbors, who help connect residents and workers to training and education and wellness, and who make their buildings conducive to human health.
The Tea Party’s mouthpieces would call all this incidental to their quest for free money…er, low taxes. The Occupy Wall Street movement would call it incremental. Nobody would call it a killer app that wipes out a prior arrangement. Venture capital can do well in landscape restoration, site cleanup and employment, I’m sure- as soon as somebody works out the metrics for capturing these activities’ value.
That somebody would have to be both creative and collegial, because there’s a lot of destruction to clear.
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