Sean D. Francis

Can Geeks and Artists Save the Economy?

Posted on 24 April 2009

The descent of the U.S. economy into the gutter has slowed.  If the U.S. economy was an airplane racing towards the ground, all that has happened is the angle of descent has changed, but it is still headed for the ground.  We are hoping that the rate of decline changes again and again until it levels and starts to climb again.

During this time, we sit breathlessly as the government, or in the airplane metaphor, the flight crew and ground support, do everything to prevent the crash.  We are the passengers in the metaphor and have at our disposal the stuff in our carryon bags and prayer.  We are doing a great job in keeping our panic under control but just barely.  We’ve seen the flight crew do some pretty crazy things, like putting parachutes on pallets of stuff and shoving them out the door.  Wouldn’t those parachutes save the passengers?

Okay, I’ve lost my taste for the metaphor.  We know we are in a bad situation and we know the government really is trying to fix it.  We see them propping up old industries and telling us that these manufacturing and banking institutions are too big to fail.

We are a capitalist country.  Failure is a necessary part of capitalism.  The minute something can’t fail is when the capitalist model breaks down.  Now there is no moral hazard since it has become insulated to risk.  Uncle Sam is there to catch it if it falls. All of this has been covered by others in a much better way and I am only talking about it to lead into the core question about whether the government is on the right path.

The United States is a country built on frontiers.  It was part of the New World.  It was the Wild West.  It sought to conquer Space.  And the Cyberspace.  We as a country are driven by innovation and invention.  Yes, I agree with those who say we can’t invent ourselves out of each and every crisis such as climate change, but crisis of the economy I think are exactly what we can invent ourselves out of.  I talk of Geeks and Artists but what I’m referring to are people driven to design, create, build and develop.  Our economy won’t become a great engine of wealth again until we step away from maintaining and return to creating.  Maintenance allows economies to limp along languidly.  Creation sets the economy on fire.

The government should be doing everything to knock down the obstacles that stand in the way of innovation, invention, and creativity.  It should be shredding stupid patents, crossing out bad taxes, and removing legislation that protects industries from failing.  Capitalism’s invisible hand is graceful.  It allows for industries to fade away.  When governments step in and try to prop up an industry it unnaturally extends the life of the industry until a point that it can no longer support that industry and needs to drop it which is a horrifying tragedy.

The US auto industry has spent the last twenty years actively paying attention to what people want today but not thinking about the future.  It is paying the price for that lack of forethought now.   Did we really need to cater to them as they fought against greater fuel efficiency?  Sure, at the time they said the market should decide, yet when the market turned on a dime demanding extreme fuel efficiency, the lumbering machine that is the auto industry was unable to adapt.

There are dozens of small car companies trying to get started, trying to address the concerns of small sections of consumers left behind by the big car companies.  Don’t these small car companies have the right to try to become the next big thing? Or are we so invested in the standard American auto manufacturers that we can’t nurture these small companies?

Somewhere along the line we got something crossed up and believe it is consumers that drive our economy, that it is about consumption.  Holding this belief meant companies started producing whatever crap they thought people would buy.  I firmly believe that we aren’t a consumer economy; the cause and effect are wrong.  Consumption does not create great products and innovation.  Innovation and great products causes people to want to have it.

When the dot com bust occurred, we lost Pets.com but in the meantime have gained Twitter.  I miss having snacks and movies I ordered online delivered to me by folks on scooters but I enjoy Netflix.  Failure is not a destructive force in a capitalist economy, it is a necessary event that encourages adaptation.  The job losses due to this downturn are awful.  Yet, if the government would help clear the way, how many new small companies will get started by out of work Americans who have a need to build, create, invent and innovate.  In the book and movie Jurassic Park, we are told that ‘life finds a way’.  In America, innovators find a way.  Whether they are building computers in their garages or finding a new way to provide an essential service, there are people who are eager to do something.   They aren’t doing it out of hopes of being a millionare, they are doing it because they can’t not do it.  They are geeks and artists.  Turn them loose in the marketplaces and let them create and explore the frontiers they find.