How can “entrepreneurial spirit” and "creative destruction" flourish without nourishment?
Friday, 14 October, 2011 Leave a comment
Joseph Schumpeter reinterpreted (from Marx economic theory) and popularised the expression “creative destruction” to describe the process by which established ways of doing things are destroyed from within (by new thinking, tools and processes) – at this point the scientific community may draw attention to the 2nd Law of Thermodynamics: that a system tends toward entropy (chaos or disorganisation) and consider the state of our global economy.
Hugely expensive and experimental life support for “clinically dead” institutions, markets, currencies and flawed philosophies equates to – at best – stagnation and at worst starves innovators of the means to accelerate a new evolutionary phase: instead of “creative destruction” we have “destructive creation” in the form of more regulation!
Let me share this, from George Washington’s Writings, (1793):
“A Scotch [we know what he meant] adage, than which nothing in nature is more true ‘that many mickles make a muckle”.
Another version is, “if you look after the pennies the pounds will take care of themselves”.
The point is that, if these sayings have any credibility at all, the manner in which our leaders should have set about resolving our (delete as appropriate): current; ongoing; worsening, global financial crisis/recession, was by building from the bottom up (entrepreneurial spirit) or inside out (creative destruction)!? It is an approach that works pretty well in just about every other field.
Instead they determined to socialise bank bailouts (to replace our savings and pensions that they lost on the strength of Rating Agency opinions), injecting trillions to sustain, patently false inflated, markets. In economic terms this is “at macro level” and hope that these broken and morally bankrupt institutions would honour their commitments to cascade funds into the economy at a local (or micro) level!!!
Needless to say, 3 years later, this still hasn’t happened. To make matters worse, the rating agencies whose “opinions” saw junk rated as AAA, are still wielding such influence as to determine the cost of sovereign debt and Corporate borrowing. Meanwhile, millions of small businesses (too small to merit a rating) – who weren’t a significant part of the problem but are expected to be THE major contributors to the solution – cannot access the funds, or do so at significantly higher rates so struggle to find the means to innovate and grow.
…if hollow promises and political rhetoric weren’t assumed to be AAA rated we wouldn’t be in the hole we are in!
Let’s face it we’re broke…and I don’t just mean financially. We don’t actually make much any more and even if we did the smart Entrepreneurs wouldn’t still be here to fund a Public Sector paralysed by its own complexity. A “dumbed down” nation that has grown useless, fat and lazy in the image of the Welfare State that sustains it. “Clinically obese” was how one expert described the UK Public Sector. We are told that the choices were Quantitative … Read More