Government's role is to help businesses and entrepreneurs do the innovating they do not seem to be able to do on their own.
Nudge Capitalism
By
Bill Kraus
Let's start with what we know.
Government stimulus money goes to going concerns and welfare and general do-gooding. If we base our recovery on what the government knows how to do we will probably become more like Scandinavia and less like America.
Government doesn’t, can’t, won’t, shouldn’t participate in the risky, uncertain, wholly un-bureaucratic business of creating new businesses, new jobs or a new economy. What government can do is create incentives and rewards for those who will do what the government doesn’t know how to do, can’t, won’t, and shouldn’t do.
The latter-day versions of George Mead, who turned the excess power of the dam he owned into Consolidated Paper, or of the unemployed salesman and the hardware dealer who turned wood into paper and created Kimberly Clark, are unknown and unknowable.
Even Bill Gates, who became a titan of the computer economy, when asked what worries him about the future of Microsoft, says, “It’s two guys in a garage somewhere who are developing an idea that will make what we make obsolete.”
The banks should be finding and funding those guys. The banks are not. They are licking their wounds from recent follies and trying to figure out what they will do when they are well again. Not much help there.
The retreat to safety is hastened by a generation that has now been thoroughly scared and scarred by the great recession. They are not as wary as those of us who went through the great depression and became lifelong members of the “save first, spend later” generation, but they are wary enough to make it pretty evident that the consume everything and anything (cars, houses, salad shooters) economy is not coming back in their lifetimes.
Once we get beyond the service economy, which is fundamentally taking in each other’s wash, we come to the incongruous conclusion that the safest haven for our saved money is in the riskiest places.
What have we got, and what can we make that others need and that we can export?
Manufactured goods. Partially, but never as important as in the 20th century.
Ideas. Yes. We are a creative, educated nation full of innovative people. What many have forgotten is that the entrepreneurial spirit and mindset was a major factor in the winning of WWII.
It still exists. It will find the exportable ideas and products that will add the 21st century to the country’s winning streak.
I wish I knew what those ideas and products might be. I don’t. I don’t think anyone does. What we do know is what Bill Gates knows: There are people in garages all over the country doing what the Meads, the Kimberlys, and the Clarks did about 100 years ago.
Find ‘em, fund ‘em, feed ‘em. They are the future. Quit hoping for a return to normal. That normal is gone. A new normal has not yet emerged. We know mostly that it will not be about cars and houses and wants. Needs and savings are ascendant. Wants and profligacy are not.
February 23, 2010
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Bill Kraus lives in Madison, is the former press secretary for Governor Lee Dreyfus, and serves on the board of Common Cause of Wisconsin.
