The S Word, Part IV: Creative Destuction

Throughout this series, I’ve referred to Kevin Williamson’s year-old classic, The End Is Near And It’s Going To Be Awesome.

In it, Williamson – perhaps the best political-philosophy writer doing business today – notes that politics is the worst possible means to allocate resources among a population, in large part because politics, alone among life’s institutions, is immune to evolution.

Politics never evolves – or does so slowly, and only in response to political, rather than market, pressure.

It’s as if a species of animal governed its genome by committee – changing and evolving and mutating not in answer to nature’s stimuli, but according to decisions made by committee.

The Circle Of Life:    Such a species would be kept alive only by heroic, artificial means.  Imagine if giraffes had seized control of their genome before the whole species evolved long necks, and stopped that weird-looking selection of longer necks, opting instead to implement a program of forced sharing of leaves that the few tall giraffes were able to bring to ground – indeed, creating the first ever entitlement program in the animal kingdom.  The species could not have sustained itself.

No; the short-necked line of giraffes died out, the long-necked variety survived, and the species grew strong and viable.

When non-viable species die out, it leaves more resources for the viable ones.

That’s true in the free market, as well.  The Edsel, Coke Clear, Embers, the Chevy Vega, the McDLT (hot on one side, cold on the other, all of it tasting like styrofoam), the Apple Lisa, the two-pound cell phone, Miller Clear, Britney Spears’ perfume line, the Zune, Circuit City, Microsoft Bob – none of them could get enough consumers to say “yes” to make them viable; people said “no” to each of the products.  Each of them died off.

And yet today there’s no shortage of cars, beverages, family restaurants, fast food, personal computers and other electronic devices (far from it), beer, perfume, retail, or software.

Quite the opposite.

The destruction of the non-viable products and services left resources (and knowledge from bitter experience!) to market

The Most Powerful Word: While consumers said “no” to each of the above (and many similar), they said “yes” to the Mustang, Diet Coke, Red Robin, the Toyota Corolla, the Big Mac, the iMac, the Android, Summit, L’eau D’Issey, the iPod, Amazon and Ubuntu.  And in a few years, some of those will be gone, replaced by something new.

The ability, and right, to reject things that don’t work is the strength of the free market – and all free choice.

And it’s not just products.  Companies, even megacorporations, find themselves being winnowed out by succeeding generations of people choosing to say “no” and finding a smaller, more nimble company with a better idea.  Williamson uses the example of US Steel – which, 100 years ago, was unimaginably huge in modern terms and with inflation-adjusted money.  But it’s still going on – when companies aren’t “too big to fail”, anyway; remember when people thought IBM would dominate the modern world?  Or Microsoft’s bundling of Windows and Internet Explorer was going to let them corner the world’s information market?

No?

Both “monopolies” are historical curios.  The market cut both of them down to size.

As long as the market can say “no” to a product or company or service that doesn’t fit its needs, there will always be something to fill its place, and fill it better.

Size Matters:  In fact, with advances in technology, smaller has become more viable, all other things being equal, than bigger.  Smaller, more nimble companies; smaller communities; niche markets and narrowcasting.

Creative destruction is destroying old and sclerotic enterprises.

It’s also killing lots of small and nimble companies.

But the ones that succeed?

It’s not so much the big organization, as the big network of smaller organizations, that are winning these days.

Too Big To Succeed:  But government has appointed itself “too big to fail”.   And it’s the one single, solitary institution in all of American life (and, pretty much, life anywhere) to which we can’t “say no”, unless we don’t mind having some degree of force – the IRS, the sheriff’s department, the Union Army – prodding your nethers with subpoenas, tasers and bayonets.

Now, Williamson disparages that trait when it comes to government’s ancillary services – health insurance, Social Security and Education, where state monopolies have done The People immense, costly disservices.

But what if we could “say no” to an entire government – and fellow constituents – who weren’t cutting the political mustard for us anymore?

What if we could do for DC what we did with Internet Explorer; switch to Opera or Konqueror?

Find a better, more responsive competitor?

More Tuesday.

6 thoughts on “The S Word, Part IV: Creative Destuction

  1. Very well stated. I think it could also be said that politics mutates. Like a rogue cell that takes off in its own direction, partly in response to outside influences (or at least prompted by them), its growth seems self-directed, unlike evolution, which seems guided by either intelligent design or some logical force directing evolution like gravity guides a river. Pick one.

    Such erratic growth spurts seem to be at the will of the cell, often to the detriment of the host body. Sometimes the host body’s own system is able to shut down the propagating cells at a point where they can go away and do no major harm. Sometimes they can’t and the growth continues until it proves fatal to the host. So, perhaps the “C” word also applies. If so, I hate to imagine our present stage.

  2. Pingback: The S Word, Part V: Realigned | Shot in the Dark

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.