Can Government Create Economic Value?

Raining CoinsWe live in “interesting times”.  I’ve heard a lot of complaints from friends, acquaintances and the media lately about how moribund our government has become.  It’s true not just in the US, but around most of the world.  Just when we need leaders to drive forward a variety of human, economic and environmental innovations, our elected officials appear to be uninterested in governing.  So who’s in charge when it comes to creating the kind of value that adds to the economy?

Citizens should be able to count on government to step in for intractable problems. We understand that these issues need a big voice and strong leadership to succeed. But structurally, I don’t think that government – at the present time – has the capability, capacity, or confidence to lead on the truly important issues of our day.

  1. Politicians need votes to maintain influence.
  2. Voters want to hear about success, not theories.
  3. Politicians do not understand the science, do not have the labs, and have not formed the exciting theories about how to solve a problem.
  4. Therefore, politicians will seldom go out on a limb without a history of solution success.

Alexis de Tocqueville once said, “The health of a democratic society may be measured by the quality of functions performed by private citizens.”

It’s up to R&D – corporate and academic – to theorize solutions to modern problems.  These solutions include society problems, like affordable housing, a sustainable food supply, energy efficiencies, as well as product and service innovations.

It’s up to “deep pockets” – corporations and philanthropists – to rationalize and prove the efficacy and economics of these solutions. Then it’s up to corporations to move solutions – products and services – to the people through marketplaces that, in some cases, may include governments.

Innovation creates jobs.  Jobs create wealth.  Wealth provides opportunities for taxation, which allows the government to provide infrastructure and basic services.  Let’s stop expecting government to come up with innovations that drive our economy.  The American business community has a much better shot at creating the growth we need.


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