richard florida article

[Gary Schiltz-3]

I started to write this message several weeks ago, but decided to think about
it for a while first. Pardon the rambling nature of the message. I'm amazed at
how ubiquitous the left-right split in our society is these days. While I
think many of us are somewhere in the middle, there also seems to be a lot of
firm belief in the "market as gospel" side of the equation in this group.
Strangely, I don't seem to see any "capitalism is inherently evil" or
"socialism as gospel" advocates, which could be explained by our entrepenurial
nature, or by my own leanings toward the left, making everyone else appear to
be further to the right than they actually are. (I expect to get a visit from
the Ashcroft goons any minute now :-)

While I appreciate the energy that comes with a startup mentality, I don't
think I'm the only one who feels a little bloody from having lived through the
bleeding edge business model. The laize-fairre mentality of the 1980s and
1990s let a lot of people make a lot of ridiculous promises, and a lot of
people got burned - shareholders, Wall Street, employees. A lucky few managed
to cash out before the crash, but a lot more just crashed. The unfulfilled,
unrealistic promises, with the associated losses, have in my opinion been
largely responsible for giving business the green light to ship high tech jobs
overseas.

I'm not sure where I'm going with this, but it seems that economists always
start from a perspective of a totally free market model, which bugs the hell
out of me. For one thing, a totally free market would amount to survival of
the fittest and the "race to the bottom" that we seem to be in with the
current loosening of trade restrictions. For another thing, we don't actually
live in a system dominated by the free market. Due to lack of enforcement of
existing antitrust laws, businesses seem to have the incentive to do all they
can to move toward a monopoly position, which does much to actually stifle
competition. I think this is predicted by Brian Arthur's ideas of increasing
returns.

So, what's the answer? (What was the question? :-) I guess the question would
be what government policies or economic systems would make for a less
polarized economy (a rising tide lifts all yachts). Personally, I'd love to
see the gross revenue of a corporation be limited - if it gets any bigger, it
would be forceably split into smaller corporations like Bell/AT&T was. Hell,
I'd even be happy if existing antitrust laws were more vigorously enforced.
Ditto for the media, which is increasingly being consolidated into large
conglomerates that have a vested interest in filtering out more populist
perspectives that would tend to be critical of the interests of the owners.
More lock-in, BLECH!

Regards,
Gary "economic curmudgeon" Schiltz

[Joe Spinden]

This is more of a (short) response to Gary's email, especially the last two
paragraphs, rather than a commentary on the Richard Florida article.  

Perhaps many economists do start from a free market model (since everybody
starts somewhere), but few end up there.  The people who do end up there
tend to be ideologues, such as we have in the White House now -- not
professional economists capable of credible analyses.  
For a point of view contrary to the "free markets are unequivocally good"
stance, you could read some of the books by Joseph Stiglitz or Paul Krugman.
Both are world-class economists (Stiglitz even won a Nobel prize), & both of
them clearly recognize the limitations of the markets.

I don't think the "answers" offered in the last paragraph make a great deal
of sense.  Without attempting to summarize the writings of Stiglitz or
Krugman, I would suggest that they are worth reading to see how some very
credible economists pose the questions & propose solutions.

IMHO

-- Joe


-----Original Message-----
From: [hidden email] [mailto:[hidden email]] On Behalf
Of [hidden email]
Sent: Monday, March 01, 2004 4:46 PM
To: [hidden email]
Subject: RE: [FRIAM] richard florida article

I started to write this message several weeks ago, but decided to think
about
it for a while first. Pardon the rambling nature of the message. I'm amazed
at
how ubiquitous the left-right split in our society is these days. While I
think many of us are somewhere in the middle, there also seems to be a lot
of
firm belief in the "market as gospel" side of the equation in this group.
Strangely, I don't seem to see any "capitalism is inherently evil" or
"socialism as gospel" advocates, which could be explained by our
entrepenurial
nature, or by my own leanings toward the left, making everyone else appear
to
be further to the right than they actually are. (I expect to get a visit
from
the Ashcroft goons any minute now :-)

While I appreciate the energy that comes with a startup mentality, I don't
think I'm the only one who feels a little bloody from having lived through
the
bleeding edge business model. The laize-fairre mentality of the 1980s and
1990s let a lot of people make a lot of ridiculous promises, and a lot of
people got burned - shareholders, Wall Street, employees. A lucky few
managed
to cash out before the crash, but a lot more just crashed. The unfulfilled,
unrealistic promises, with the associated losses, have in my opinion been
largely responsible for giving business the green light to ship high tech
jobs
overseas.

I'm not sure where I'm going with this, but it seems that economists always
start from a perspective of a totally free market model, which bugs the hell
out of me. For one thing, a totally free market would amount to survival of
the fittest and the "race to the bottom" that we seem to be in with the
current loosening of trade restrictions. For another thing, we don't
actually
live in a system dominated by the free market. Due to lack of enforcement of
existing antitrust laws, businesses seem to have the incentive to do all
they
can to move toward a monopoly position, which does much to actually stifle
competition. I think this is predicted by Brian Arthur's ideas of increasing
returns.

So, what's the answer? (What was the question? :-) I guess the question
would
be what government policies or economic systems would make for a less
polarized economy (a rising tide lifts all yachts). Personally, I'd love to
see the gross revenue of a corporation be limited - if it gets any bigger,
it
would be forceably split into smaller corporations like Bell/AT&T was. Hell,
I'd even be happy if existing antitrust laws were more vigorously enforced.
Ditto for the media, which is increasingly being consolidated into large
conglomerates that have a vested interest in filtering out more populist
perspectives that would tend to be critical of the interests of the owners.
More lock-in, BLECH!

Regards,
Gary "economic curmudgeon" Schiltz

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