Harare on the Potomac

Books like Why Nations Fail make clear that many a third-world country stays poor not because its government is having difficulty thinking up policies that would help it get richer, but because the government's members or supporters would be inconvenienced if those policies were carried out.  The Harvard Business School asks companies why they prefer not to create jobs in the USA, and finds that the complexity of the tax code is an important factor (see figure 14 on page 19).  So why is the tax code so complex in the USA?  Wouldn't it be convenient for everyone, not just companies, if it were radically simplified?

Well, nearly everyone.  But it's hard to shake companies or people down for campaign contributions by threatening to take away their tax breaks, if they don't have any tax breaks for you to take away.  So now we know who is inconvenienced.

Making Corruption Work FOR The People

[from my Google+ stream]

I was going to write something about money in politics, but thought I'd better give credit to an earlier article that had provided the germ of my idea. Fortunately, I remembered enough words to search for it and find it. Turns out it contains all of what I had fondly thought to be my idea. It's even more relevant today than it was eleven years ago.

Crediting the Voters: A New Beginning for Campaign Finance

Change technology, change society?

Arthur Dobrin had this to say about Mitt Romney, well, ostensibly about him, but more about creative destruction.  The core of Dobrin's argument seems to me to be not very much about economic models, but about innovation. Selected quotes:

> Innovation is the way of capitalism.

> This is all to the good if the extent of the destruction is the replacement of one product with another (the TV for the radio).

> You cannot support both unleashed capitalism and a stable social order. Along with new products come new ways of doing things; along with new ways of doing things come new ideas.

It sounds as if Dobrin is saying that innovations in products can lead to changes in society, more profound than just exchanging one product for another or one employer for another. I suppose one obvious example is the Pill. Thus promoting innovative businesses is at odds with conserving society, and someone like Romney should not, with a straight face, claim to be a social conservative.

The question of what responsibility falls on an innovator as a result of the social changes his/her products bring about, or on the society that benefits from those products, does seem to me to be important. Gov. Romney is not the one on trial here; the whole idea of unrestrained innovation is being examined.