MACHINE-MADE ERROR
Have you ever wondered why so many smart folks have screwed up stuff like government and economics for so long? Well-meaning, learned, experienced people like our soon-to-be former Governor Granholm, and the Obama Administration & Congress? Decade after decade? In country after country? Despite clear eras of failure and success, why do so many smart folks consistently reach for failure?
I think the answer is a fundamental error in thinking, a basic mistake in the way things work. It can boil down to a simple observation: a machine is not dynamic. Repeat: A MACHINE IS NOT DYNAMIC.
A Machine is not Dynamic!
A machine is a basic, static, limited thing. It does what it’s built to do. It can break, wear out, and malfunction if misused, but it can never change into something else by itself. A machine can’t grow, develop, learn, or evolve. It’s not dynamic. A V-8 engine will never change by itself into something else. You can calibrate it, tune it, and you can make changes to alter its output, but it will never on its own transform into something different. It’s a machine and a machine is not dynamic.
By contrast, a tree is dynamic. It grows. It can grow in different directions. Over years a tree can shape and evolve to adapt to different conditions. The tree responds to stimulus, and two trees can grow in different ways due to circumstances . The tree has a capacity for growth and development, and it’s never still until its dead, because it has dynamism. A forest is dynamic, an ecosystem is dynamic, an animal is dynamic, and so is a human being. So too are human societies and institutions.
The Machine as Model.
For almost a century and a half, thinkers and leaders have viewed human institutions through the analytic model of the machine. It’s understandable: we live in a machine age, and comparing—say-- economies to machines helps folks get their hands and minds around complex issues. However, thinking of something as a machine leads you to certain assumptions and actions.
A machine is a closed system. It can be fine-tuned and calibrated. Only special trained people like mechanics can run and understand it. If you want to make changes in it, you can just weld on new stuff and it will keep running. A machine has a peak performance level, and equilibrium that it can attain, and once arrived at, can continue to operate. Most importantly, a machine has certain basic laws and rules that govern it which can be mastered, if you have the right owner’s manual—say Karl Marx.
And if Reality Doesn't Match the Model?
But what if reality doesn’t match the model? Answer: you do the wrong things. And an economy is not a machine!!! An economy is dynamic, growing, evolving. It responds to stimulus. Most importantly, it never arrives at a steady equilibrium “purring like a well-tuned motor.” Like the old athletic slogan “success is a direction, not a place,” it’s chaotic, and dependant on changing technology and the preferences of a market of millions of individual choices. An economy is an ecosystem: you can grow it, you can blight it, but you can’t simply operate it.
Barak Obama and his deeply reactionary Democratic Party are nostalgic for the 1930s, when folks thought the “economic engine” just needed a Master Mechanic. They believe they have the right tax ratios, proper percentages of wealth, best formulas of government control and supervision. Governor Granholm believed that if you just welded on a few windmills and a movie camera, the old Michigan V-8 would roar. Both policies are failures, born of a failed view of what an economy is.
If It's Not a Machine, What Is it?
If a machine is not dynamic and an economy is, then the best analytical model isn’t an “engine of prosperity” but a farm. Today, we’re at the equivalent of peasant agriculture. We haven’t cracked its DNA, heck we haven’t even gotten to Mendellian genetics. What we have developed is a rough, basic trial and error, rule-of-thumb knowledge of what works and what doesn’t. Here’s what works:
Free the individual to take risks and make choices. Provide clear certain rules that give those individuals certainty and protection—the rule of law, not the whimsical decrees of judges and irresponsible juries. Take the government’s thumb off the scale for this favored interest or that one.
Above all, allow that free individual to keep what wealth he labors to create. Across the world and down the years, this is what works to grow the dynamic ecosystem called an economy. Dump the failed and misleading model of the machine. Toss out the humbug mechanics while we’re at it. Then watch prosperity and wealth grow, develop, change, and evolve in ways you never thought of.
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