What kind of events are worth reporting on in real time, with updates every few seconds? Such events have to be pretty dramatic. Well, the release of the iPhone 5 apparently qualifies. The tech blogs were all over it, and so were the wire services and big papers.
A moment to celebrate? Sure! It was the smart phone that changed the whole way people live and access information in our time. The smartphone…is nearly everything you can think of in the size of a deck of cards. It is the greatest consumer product in human history heretofore. Its hype but totally justified.
Maybe you have had this experience. I’ve recommended smartphones to flip phone users, and they never stopped thanking me.
Meanwhile, I’m getting serious upgrade cravings. Suddenly, my iPhone4S has cobwebs on it. I have to blow off the dust to make a call. It is ugly and stupid and slow with a tiny screen, and the battery runs out too fast. Might as well be a telegraph machine or a smoke signal or a note in a bottle. This museum piece must die.
Some cynics think: oh sure, you want me to cough up yet again for a gadget I don’t need. Well, fine. if you don’t like the phone, there is a simple solution. Don’t buy it. That’s the essential glory of a market economy. It has to persuade us to participate. If we don’t want to, we don’t have to.
It’s not so easy in the world of politics. The government rolls out its new reforms and then forces them down our throats. We have no choice but to believe its experts and scientists and bureaucrats, and comply, on penalty of jail time. If you disagree, you are called an outlier, an extremist, even a danger to society.
Mr Market Vs Mr Politician
The first iPhone went to market in 2007. Just look how far the entire smartphone industry has travelled in these years. That same year, the U.S. entered into a recession that the government swore it would fix.
Not only has government not fixed the problem, middle class income continues to shrink under the supposed fix, unemployment still worsens, and there is no end in sight.
In the background, in the world of digits and technology, revolutions were happening. While enterprise working in the digital world has created wonders, government has created disaster and sacrificed untold amounts of unseen potential wealth with its parasitic and backward policies of bailout, spend, regulate and print.
To make matters worse, the G-men have done nothing since 2007 but hector, harass, threaten, and badger makers and innovators of smartphones.
[US] Congress has been holding hearings for five years, there’s always some Justice Department investigation, and the regulators never stop looking for some far-flung imperfections in the way smartphones are marketed, the hardware and firmware, the app economy, the carrier contracts, and every aspect of how these innovations have worked.
Most absurdly, Congress has pretended to protect us from the dangers of how smartphones are tracking our movements and storing private data on our lives. Doctors, heal yourself! There are a thousand government agencies down the street that are doing just that, and they aren’t trying to sell us stuff.
They are spying on us to take our liberty and property without our consent. The supposed violations of our rights pushed by new technologies typically involve selling us stuff we want.
History will record that government did absolutely nothing to create the smartphone and everything possible to hobble its development. The whole thing is quite insulting. If government had its way, we would still be using switchboard operators.
The private sector companies that innovate and sell us these products truly are revolutionaries against a static and decrepit political system.
When was the last time any public sector agency actually created something to enhance our lives? I can’t remember one. But every morning I still see the postal employee driving around a truck and sticking things my mailboxes, and I see yellow school buses from fifty years ago carting kids to their daycare prisons, and I sometimes have to go to government agencies with tellers using technology from the 1930s.
And then we look at the private sector and see miracles unfolding by the day. We not only expect them. We demand them. And then we tolerate no rollback ever. How many people would trade in their iPhone 4 for a flip phone that itself was a dramatic upgrade from anything available even ten years ago? If people were forced to do this, it would be seen as a human rights violation.
And once people get used to the new iPhone or whatever amazing gadget is being pushed by Android or Samsung, the excitement lasts about a day. Then people just figure that this is the way it is: progress is just part of life itself.
We take it all for granted. But we demand no such thing from government. We have the lowest expectations possible for the public sector and impossibly high expectations for the private sector.
What the Airport Tells You About Government and Commerce
My favorite example of this weird confluence comes from airports. We approach the security line with trepidation, careful to remove our shoes, strip down, bag our creams and toothpaste, and say “yes sir” and “yes ma’am” to every demand. We put up with their glares and stares and subject ourselves to every abuse.
We cross through security and enter the glorious marketplace of airport commerce. Here we find merchants reaching out to us, serving us, giving us everything we want, creating ever more amazing things for us. I can get a massage, buy some shoes, have a drink, take a nap, or stock up on chotskies that sample the local culture.
Despite the TSA’s claim that they are there to serve us, the real servants are found only once we pass through the public-sector gauntlet. And yet how do we treat the waitress who brings us that greasy burger?
We complain that it didn’t arrive fast enough, that the tomato is stale, that the fries are cold. We say things to these servants we would never dare to say to the TSA.
And yet, no matter how much abuse we heap on the private sector, it somehow forges ahead. The glaze of the entrepreneur is always toward the future. It is to do what hasn’t yet been done, and always for others.
It is only through doing the exceptional thing in service of society that profits are made. One must leave the crowd, invent and market the new thing, take on the status quo, blow up what exists and make something new that had never been imagined before.
To make new is the great challenge of life. Any society and any system can repeat what has been done in the past, but the result of that is stagnation and eventual death. When economic forces are left to individuals and their creative longings, we experience that most glorious thing call progress.
That’s why the private sector is forever surprising us with things that serve needs we didn’t even know we had. Think of it. No bureaucrat ever thought of the smartphone.
None of us did.
It took a global community of self-interested, market-coordinated producers, thousands and even millions of people wildy interested in making a buck by bringing people cool stuff, to come up with the smartphone.
And despite his vaunted reputation, Steve Jobs didn’t come up with it either. He drew from existing technologies and worked with the best people in the industry to come up with a way to package and market the greatest stuff in existence, rolling out a primitive version and improving it along through way through trial and error, always with a forward and upward glance.
The future is never certain in the world of commerce. As Daniel Cloud shows in his wonderful book The Lily, there is an element of the market economy that is pure play. You never know what is going to work at the outset. It’s always a speculation. The new product or service, the new attempt to try what has not been tried before, always seems a bit crazy.
And it is a bit crazy…not to mention risky. But this is the way toward greatness. As Cloud says, “the real reason the entrepreneur’s profits don’t quickly get arbitraged away is that it takes people who aren’t quite as creative a long time to realize that he is not crazy and begin to imitate him, and by that time, he’s already moved on to some other uncertain project on the basis of some new keen hunch.”
Entrepreneurship, he writes, is about “individual intuitions about objective uncertainties.”
People are said to be gadget weary. Nice problem to have! If the world were ruled entirely by government, we would experience nothing new, just the same old sinking into the mire of the old and worn out. That world is never new and improved.
Whether you buy the new gizmo or not, its creative engine represents a force that is forever renewing the face of the earth and the experience of humanity itself. This is something to celebrate, and never take for granted.
Contributing Writer, Money Morning
Publisher’s Note: This article originally appeared in Laissez-Faire Today
From the Archives…
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