I see it as a system (when it works) where innovation and excellence is motivated by the promise of rewards.
Don, it all depends. When we review some of the greatest innovations in history, jet travel, computers, technology offshoots from the space program, etc.., they've all derived from government funded research. The national highway system would never have been what it was without every interstate being a private toll road.
But I like to agree with you. Out of that government funded research on the broader technologies, we've seen tremendous private innovation.
But when we look at private market successes like the oil industry, once it becomes so permeated within our economy, it's difficult to make the transition to private innovations. So suddenly we find ourselves, like last summer, in the midst of a major price increase in energy (real or manipulated) and suddenly everyone's talking about alternative energy. But now in the midst of the bubble bursting in commodities, we're back to square one.
And take corporate farming. It creates synergies that drastically reduce prices, but when those corporate farms become too large, it stifles competition and innovation, resulting in nearly monopolistic control over prices and bankruptcy for family farmers. But I guess, like the disappearance of the general stores to shopping malls, and now the advent of online shopping, creative destruction is cruel.
But when that creative destruction occurs in widescale fashion as we're currently seeing, it's just inane (as a certain person would recommend) to think that government shouldn't intervene to defend those whom it supposedly represents, the people.
It's all very complex, I'll grant you that. And where the balance between private and public markets should be is always unclear (and probably should be in order to advance innovation). But what is clear to me is that government has an obligation, and a vested interest, in safeguarding its population from the ravages of these corporate battles, while training that human capital to meet future needs. And that very same government has a responsibility to provide an environment where innovation is rewarded.
Hawk |
