Capitalism's Creative Juice, the Threat of Failure

Over the last few years I have added a new name to my list of favorite opinion writers, Kevin Williamson of National Review. An article he published today is, in my opinion, a must read. He is an unabashed supporter of Capitalism and seems to me to understand its workings with more clarity than most.

"One of the rarely appreciated aspects of the capitalist model of innovation is that the wealthy subsidize the development of products for everybody else: The mobile phone is a case study in that process, as is the electric car, as indeed were ordinary cars. The firm that developed the first automotive air-conditioning and power windows was a high-end marque that despite its landmark innovations is no longer with us: Packard. The Bonfire of the Vanities–era financiers who carried the first mobile phones paid for much of the research and development that made them ordinary products for non-gazillionaires. My own financial means at the moment do not, alas, afford the purchase of the new plug-in hybrid from Porsche — which is a million-dollar supercar — but the technologies developed for the 918 Spyder will make their way through the marketplace the same way that the automatic transmission (Oldsmobile, 1940), the supercharger (Mercedes, 1921), and the independent suspension (Mercedes, 1933) went from being expensive options on cars for the rich to being standard equipment on your Hyundai."

This, to me, is an excellent insight and might be valuable knowledge for the Occupied crowd to have as they talk to each other on their cell phones castigating the evil rich. But for the evil rich they would have no cell phones or much else for that matter. Anyone remember the Lhada? No? That is because it no longer exists. It was a car built in the USSR. My sister bought one back in the 70's. Predictably the worst car ever manufactured. There is a good reason for its failure and Williamson explains it below.

Williamson's piece is actually a response to a comment made by the US Government's Chief Technology Officer. She said,

“Why can’t the federal government have websites and digital services that are awesome?”

He proceeds to answer her question. In his penultimate paragraph he explains:

"Non-performing federal agencies do not go bankrupt, federal bureaucracies do not see their shares tank when they do poorly, and government entities do not have their assets acquired by more effective competitors. Political bureaucracies are creatures doing violence to the evolutionary equilibrium — dinosaurs running amok in modern technological civilization, and Jurassic Park taught us how that turns out."

Read more at: http://www.nationalreview.com/article/418162/bureaucracies-dinosaurs-run-amok-technological-civilization-kevin-d-williamson

 

Read the whole thing if you have the time and the interest.