There is, of course, growing evidence of a difficult period ahead for the U. S. economy, compounding the new administration’s already challenging task of developing a consensus on tax and budget issues. In this environment, it is important to consider the longer-term implications of policy in the light of the new realities of the post-industrial global economy. Our economic policy gurus continue to lapse into the misguided thinking that government “runs” the economy, that it can guide and regulate its direction, pull it out of decline, or dampen “irrational exuberance”. This is antiquated Great Depression-era thinking, but it persists even among many entrepreneurs who should know better, and it often leads to bad policy. Even now, the specter of protectionism that often raises its ugly head during a slow economy may be holding back several important new free trade initiatives in Congress.
There continues to be an element of opinion leadership that is fighting the old economic wars. These people evidently fail to see, or prefer not to see, the “de-massification” of the economy so well described by Alvin Toffler in The Third Wave, the flattening of hierarchical command-and-control organizational structures, the collapsing of intermediaries that don’t add value, and the explosion of productivity brought about by Moore’s Law. Understandably, this revolution is a source of fear for those who can’t cope or don’t know how, or if, they have a place in the new scheme of things. If we’re honest, we all feel some of this anxiety.
In her The Future And Its Enemies, Virginia Postrel identifies the opposing forces in this and related conflicts as the “stasists” and the “dynamists”. In this view, the stasists are the tradition-bound reactionaries and the dynamists favor processes that lead to an open-ended future. She extols the superiority of the dynamist position across the board, in economic as well as cultural matters. From an economic standpoint, it is difficult to deny the ultimate logic of the dynamist worldview, but I struggle with the cultural damage that often results from the “creative destruction” of markets. This trade-off is characterized by Daniel Yankelovich as the conflict between the vision of the free market vs. the vision of the civil society. I believe that, at bottom, we are now deeply immersed in this conflict in our policy choices. Where are you in this debate? Are you a stasist or a dynamist?