Thursday, January 05, 2012

Political economy

The WSJ reports "Kodak Teeters on the Brink".  This was expected.  Everyone I know uses their "phone" to take photos.  Creative destruction is the name of the game.  And that's a very good thing.

The dynamism of the market economy accounts for our material well being but is ignored by most critics of capitalism (who dwell on powerful and impregnable corporations).  The critics includes most "anti-trust" lawyers, judges and politicians.  Have they ever heard of "category busters"?  Is my iPhone a phone, a camera, a computer, a toy, etc.?  The question could usher in long and useless debates.

I tell my students that I teach "political economy".  It's an abused term, so it is useful to stress that keeping "economics" and "political science" in separate bins is not a good idea.  No politics without economics and no economics without politics.

Business that fail in the marketplace will seek help from political friends.  Other businesses know that having political friends cannot hurt.  Can we keep them apart? Creative destruction animates political economy.


Fortune-500 Churn over the years (via Carpe Diem).