Joe Weisenthal – who just left Dealbreaker – has an excellent essay up about creative destruction, written by an anonymous co-blogger.
I find much of the criticism of the US economic model far overdone during this current economic crisis. Many have passed judgment on the entire US economic model as a failure based on just the most recent events. What’s most surprising is how some can grasp as to how this is the worst crisis since the Great Depression yet in the same thought fail to realize that the US survived the great depression and then leapt forward at an amazing pace afterwards developing world-changing innovation such as semiconductors, software, the internet, etc. Meanwhile a lot of more “stable” countries just kept plodding along with “follow-on” growth, growing mostly via tech transfer of innovations invented outside their borders and/or the simple application of increased labor.
It’s good to read someone else that actually has an intuitive understanding of the principles of the free market. Isn’t it odd that most professional economists – Austrian, Keynsian, Clowns – seem to be completely swamped in a mass of confusing details, the only effect of which seems to be to spread FUD? If you read HNTAF, it makes more sense.
My key point is that in the (relatively) open US economic system, failure is not to be feared, and it might actually be a sign that problems are being corrected and learned from. This isn’t the end of US economic power or system, but rather a reallocation of productive efforts and a process of correction and improvement. Also, I think many misunderstand where economic value comes from. Its not a fixed quantity like gold in the ground. Value in the US comes from the value-generation potential of its system. Thus money and value is currently being lost but more will be created out of sharp minds as long as they have an open playground with which to do so. To think that this current crisis erases all the value generation of the last 20 years is to vastly under appreciate what the world currently has in 2008. You have to be quite ignorant of things in order to criticize the innovative American system as a failure while using your computer over the internet and perhaps listening on your iPod to musicians who blatantly copy the ideas of hip hop music…
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No. The system isn’t broken… as long as the economy isn’t locked down due to near-term fear under the dangerous banner of economic stability.
Head over and check it out.
