Friday, February 04, 2005

Generation Next

Why do politicians think they are the legitimate architects of everything? Shortly after the State of the Union, minority leader Senator Harry Reid went on NBC challenging Republicans that the government isn’t doing enough to create the “next economy.” Reid cited past examples of when central planning supposedly succeeded in creating the next economy—the interstate in the 50s and the internet’s initial stages in the 60s.

Reid needs to learn some history, and some economics. Eisenhower’s highway plan was riddled with corruption and waste—typical of any government program. Saying it’s responsible for economic growth is deceiving for it suggests that such an important industry tool could not have been born from private property. Just because the government created the highways and the people used them does not mean these interstates were the best solution to solve the private sector’s transportation problem. Firms have proven they are far better at providing goods to the people. There’s no reason this principle can’t be extended to roads.

For the Internet, note that Reid cited programs in the 1960s, though that part of the Information Age didn’t spawn until 30 years later. Why? Because creating the Internet to point of being profitable requires lots of computers, which means computers have to be widely available. It’s the personal computer—not the Internet—that’s the main thrust behind the Information Age. This wonder that started the “new” economy was a private development.

Reid assumes that if the government didn’t connect these two machines, no one else would, the result of either arrogance or stupidity. While the Internet got its start in government, its main advances—such as the browser and most languages computers use to work the Internet—were private developments.

No one knows what will be the next big thing. While we can point to advances that might play an important everyday role in our lives, we don’t know when they will do so. We don’t know all the ways the “next economy” will affect us and what will be important. That knowledge rests in the minds and expectations of millions of people. Thus governments can’t effectively construct economies; economies have to be grown.

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