It has been two months since the last post, partly because I’ve been overly busy, and honestly, partly because I got a bit discouraged, after a year of postings and only 58 subscribers. But that doesn’t move the ball forward, so I’m back at it again, hoping no one has given up on me, in despair or boredom.
In this past weekend’s Saturday edition of the Wall Street Journal, there were two very interesting and germane op-ed pieces. One was the weekend interview of Glenn Hubbard, by Tunku Varadarajan. Hubbard, currently Dean of Columbia University’s Business School, had served as President Bush’s Chairman of the Council of Economic Advisers. I will quote a few key (and supportive) snippets from the piece: “you’ll see that the goal for economics isn’t GDP, it’s to deliver a kind of mass prosperity, with people feeling like they’re all part of the system”; “I think it’s more about opportunity than inequality”; and “America’s policy makers need to be in the middle—the debates we’ve seen in Britain and here in the U.S. are centered on people who feel like opportunity has left them, and they may be right—I think that is a government problem”.
The other editorial was by Senator Orrin Hatch, who issued a cry-from-the-heart against Identity Politics, the labelling and stereotyping of individuals, according to their race, religion, party affiliation, ethnicity or other grouping. This “tribalism” as he calls it, creates separating walls and barriers, obstructs or even eliminates debate of ideas, and has the possibility, even probability, of destroying E Pluribus Unum, “out of many, one”. “Identity Politics conditions us to define ourselves and each other by the groups to which we belong. Soon, we lose sight of the myriad values that unite us. We come to see each other only through the distorted prism of our differences”.
Along with these fine points by experienced leaders, I have seen signs of movements everywhere to stand up for centrist approaches, whether they are independent third party attempts, or the Congressional “No Labels” caucus. All we need is a recognized leader who can look well beyond the next election, to build a movement or party that can win back the governance by consensus and compromise, rather than striving to destroy the opposition without ever listening to them.
Enough of that. Now I am going to tell you a (true) story of innovation and incentives on display. In March, with one of my startup clients, I saw, in real, visible, audible and tangible mode, the incredible American machine at work. And it was amazing and energizing!
In my consulting practice, I am helping a couple startups launch exciting businesses. One with great potential based on the entrepreneur’s scientific innovation, needs to raise capital to get underway. We attended a West Coast Venture Summit in Silicon Valley. Several hundred people attended, and I am guessing it was about 70 % entrepreneurs, 15% service providers, and 15% venture capitalists or angel investors.
It started on Tuesday evening with a wine/beer reception in a crowded space, that was essentially speed-dating for dollars. It continued the next day with panels discussing relevant topics and with entrepreneurs making their pitch for financing. Startups got about 3 minutes each, and more mature companies about 7 minutes. The range of projects and companies was very broad, from MD’s who had invented products and processes for weight loss, through complex energy usage sensing, analysis and corrective action, to a commercial website that enabled parents to connect with coaches for their children in music lessons, sports, tutoring, arts, etc.
It was a match-up of entrepreneurs who were risking their career and fortune to meet new needs of society, with investors who were willing to take huge risk with their money (or that of the people who invested in them), to help bring these new products and services to fruition in the marketplace. What enticed them all was the opportunity to make money, which a capitalist and market economy permits. Certainly there were other motivations—to build an organization, to brag about insight, to be the proud parent of a success among others. But what united them, and created the match between source and use of funds, was financial opportunity.
The system works.
8 thoughts on “Catching up; and The Innovation Machine”
Sorry to hear you haven’t gotten more traction. I do enjoy your posts and particularly this one, which was quite optimistic. I will circulate to a couple of other friends.
Many thanks, Ron!
Thank goodness you’re back! I was missing my boost from deepening depression over the “tribal” polarity going on in the country and among some good friends. The message is simple in the sense of using the system “that got us to where we are”. It seems that the approach of “my way or the highway” and eliminating compromise as a possibility has taken root and clogged the machinery of civility and government. I’m hoping that we might be able to detect a seedling of moderates seeking a ray of sunshine in the issue of an immigration policy, but like many things today, it may be an illusion.
Thank you, Stu. Good to hear from you. I think there is a seedling there, and the question is how to nurture it, how to bring it to bloom in full maturity.
I think the term “speed dating for dollars” is brilliant, and quintessentially American. The capitalist system is of course alive and well, but you’re right that when segments of the population feel like opportunity has left them, things break down. Right or wrong, and there is lots of evidence to suggest it’s wrong (read Hillbilly Elegy, if you have time), that’s what led to the rise of Trump, and unfortunately, Trump decided to just turn that populism into a hard right agenda when he didn’t need to.
Thanks, Matt, for your comments. Opportunity has left many Americans behind. But we can’t turn the clock back, so the only solution I know is in retraining, which I have tried to cover in previous posts.
Poor people in the US were 20 times less likely to believe hard work would get them ahead than were the poor in Latin America, even though the latter are significantly worse off in material terms. Guardian Study – 2017.
So, knowing several entrepreneurs whose opportunity generally consisted of taking family connections, wealth and marrying it with energy, intelligence and an understanding of how the system works, have become as wealthy as their forefathers. And, good for them. For them, the system works.
All recent studies of upward mobility, that I have read, for the U.S. clearly indicate that that path to a better future for their children is generally blocked. The white poor are even more despairing than minorities in this country. Hence, Trumpism.
We will have to wait and see how the recent tax bill plays itself out. Since the top few percent own virtually everything, there’s hardly much more room up there for acquisition. I guess next we can sell off more of the Defense Department to follow the recent moves to privatize more Federal land. This is simply capitalism to its logical extension. True Marxian “withering of the State.”
Ah, I love the sainted voices of reconciliation on their retirement. Senator Flake whose book mimicked the Goldwater book of the same name, loudly decrying partisanship and saying he’d never vote for a tax bill that wasn’t worked across the aisle. Deciding vote Flake is his new name. And, Saint Orrin … a proud advocate for Marvin Garland … until he wasn’t.
And supply sider Hubbard … how are those Bush trickle down economics tax cuts working out.
Yep, the system works as designed because there is no logical end to capitalism, it’s an asymptote. Government is simply sand in the gears … turn the sand to oil and the capitalist machine continues its inexorable climb.
So, yes, the system works.
Rene–no system is perfect. Free markets and capitalism have improved the standard of living of everyone in the world today over the Dark Ages. Communism was and is an utter failure. Every country that changes from communism to a free market economy has seen it today–China, Vietnam, etc. I’d be happy to debate the subject with you.