Thwarting creative destruction

Logan Delany reminds us that free markets must both build and destroy, and that thwarting the “creative destruction” of failed businesses does not help the economy. Emphasizing that our economy is going through a transition into a global, “digital” economy, Delany applies the insights of a classic economics text into why a recession can be a good thing:

The economy must reallocate capital and labor from the old economy to the new economy. Joseph Schumpeter best described how recessions contribute to the structural evolution of an economy as “creative destruction” in his classical book “Capitalism, Socialism and Democracy.”

When the economy is strong, marginally productive manufacturing facilities, retail outlets and financial services continue to function because they contribute profits to a business´s bottom line by providing goods and services to consumers. In tougher times, the least productive of these operations become unprofitable and redundant.

The classic textbook example of this phenomenon is the buggy-whip manufacturer at the turn of the 20th century. When automobiles were replacing horses and buggies as the primary means of transportation, who needed buggy whips? At the turn of the 21st century, is there a place for unprofitable automobile companies that are being abandoned by customers who want cars with better fuel efficiency, quality and styling at a lower price than these companies provide? Is there a place for the manufacturer of analog TVs in today’s market? Does the economy really need Circuit City stores when consumers abandoned them for Best Buy? The market will decide.

Most people make hard decisions only when forced to do so. Business people and politicians are no different. In a recession, business people are forced to make tough decisions when they are losing money.

If there are no markets for their products, they must downsize or close their factories that are losing money, or they go out of business. Employers are distraught when faced with the decision to terminate competent and fiercely loyal employees, but the marketplace leaves them no choice if the survival of the business is at stake. The recession always forces these decisions. In the long run, the economy is better off because capital and human resources are no longer wasted on obsolete buggy-whip manufacturing but are allocated to more productive new technology.

The American Idol style vs. others

Adam Mazmanian’s review of Kelly Clarkson’s new album describes well the distinct vocal style that “American Idol” promotes:

“American Idol” judges value raw power and commitment to selling a song as well as vocal talent. Winning performances tend to be intense and powerful, with contestants swinging for the fences on every song. This domineering, melismatic style wasn’t invented by “American Idol” but is a fixture of the system that dominated music before the ascendancy of the singer-songwriter in the 1960s. It tends to produce voices that are dexterous, loud, capable of credibly assaying songs across a range of genres — and also voices that are hard to place in time: neither conspicuously contemporary nor conspicuously retro.

I agree that this is not necessarily a positive influence on popular music, encouraging bombast, excessive coloratura, and overproduction. Of course, the “singer-songwriter” style has cliches of its own: a thin sound, a whiny and angst-ridden tone, minimalism. And am I right in detecting the decline of the band, except as background musicians to a star, the absence of true musical collaborations in which the whole is greater than its parts, as we saw, for example with the Beatles (romantic Paul; cynical John; goofy Ringo; mystical George)?

What we all owe to each other

The last of “The Table of Duties” from Luther’s SMALL CATECHISM:
 

THE YOUNG
You younger people, submit yourselves to your elders. Yes, all of you be submissive to one another, and be clothed with humility, for “God resists the proud, but gives grace to the humble.” Therefore humble yourselves under the mighty hand of God, that He may exalt you in due time. 1 Peter 5:5-6.
 
ALL CHRISTIANS
You shall love your neighbor as yourself….I exhort…that supplications, prayers, intercessions, and giving of thanks be made for all men. Romans 13:9; 1 Timothy 2:1.

Being young is a vocation, though like others it doesn’t last. Here the relationship dyad is within the Bible verse: the young and the old. But already the Apostle Peter generalizes his point to fit all of the vocational relationships that have gone before: “All of you be submissive to one another.” And avoid pride, the bane of all relationships and of all vocations.

The final instruction is also for all Christians, summing up the point of them all and the purpose of all vocations: “You shall love your neighbor as yourself.”

And so endeth our series on the Catechism.

 

The coming evangelical collapse #3

More reasons why Michael Spencer thinks <a href="evangelical Christianity is about to collapse in this country:

3. There are three kinds of evangelical churches today: consumer-driven megachurches, dying churches, and new churches whose future is fragile. Denominations will shrink, even vanish, while fewer and fewer evangelical churches will survive and thrive.

4. Despite some very successful developments in the past 25 years, Christian education has not produced a product that can withstand the rising tide of secularism. Evangelicalism has used its educational system primarily to staff its own needs and talk to itself.

5. The confrontation between cultural secularism and the faith at the core of evangelical efforts to “do good” is rapidly approaching. We will soon see that the good Evangelicals want to do will be viewed as bad by so many, and much of that work will not be done. Look for ministries to take on a less and less distinctively Christian face in order to survive.

6. Even in areas where Evangelicals imagine themselves strong (like the Bible Belt), we will find a great inability to pass on to our children a vital evangelical confidence in the Bible and the importance of the faith.

7. The money will dry up.

I would challenge #4, based on my experience with classical Christian schools, homeschoolers, and now Patrick Henry College, all of which are outdoing secularist education in its own terms.

What is the problem with denominations? I can’t think of anyone, from anywhere on the theological spectrum, that is particularly happy with his denomination’s hierarchies and bureaucracies these days.

What do you think of his categories: megachurches, dying churches, and fragile churches? I’d have to challenge that one too. A megachurch that teaches the prosperity gospel rather than the gospel of Christ is already dead, no matter how many people attend. And assertions that a particular church is “dead” or “dying”–usually said of churches that are not growing or whose members are aging or, often, that are not exciting–are deeply offensive to me. To think in these terms is to fall into a theology of glory, as opposed to a theology of the cross.

And yet, does Mr. Spencer have some points?

Snowflake babies

Protesting President Obama’s decision to allow federal funding to destroy human embryos for their stem cells were parents of “snowflake babies.” These are children who were once frozen embryos generated at fertility clinics–the sort of “extra,” unwanted embryos that the stem cell merchants want to get their hands on–but who were implanted into mothers through embryo adoption programs.

President Obama and others who have no moral qualms about where industrialized stem cells come from, look upon the reality of what you want to kill; namely, young Maggie and Will:

Snowflake babies

Masters and Servants

In Luther’s SMALL CATECHISM, the next “holy orders” in “The Table of Duties” are those of employees and employers.

EMPLOYEES
Servants, be obedient to those who are your masters according to the flesh, with fear and trembling, in sincerity of your heart, as to Christ; not with eyeservice, as men-pleasers, but as servants of Christ, doing the will of God from the heart, with good will doing service, as to the Lord, and not to men, knowing that whatever good anyone does, he will receive the same from the Lord, whether he is a slave or free. Ephesians 6:5-8.
 
EMPLOYERS
Masters, do the same things to them, giving up threatening, knowing that your own Master also is in heaven, and there is no partiality with Him. Ephesians 6:9.

One of my complaints about most modern translations of the Bible is that they render what the KJV gives as “servants” as “slaves.” These are generally the very translations that insist on translating ancient concepts into contemporary equivalents. In this case, that would make sense. A “slave” in the Greco-Roman world was not the same thing as race-based slavery, which is what the word connotes in modern English. Yes, Greco-Roman douloi–who did much of the physical labor in that pre-cash economy–were not the kind of paid servants on the order of Jeeves. They were owned by their masters, but they sometimes served for only a time. At any rate, if all Scripture is profitable for our use, as it is, it must speak to our own day and our own economy. If you work for someone, your boss is a kind of “master” and you are a kind of “slave,” or, better, “bondservant,” or just “servant.”

Notice that even in the employee-employer relationship–or, if you like, slave and master–God is hidden in vocation. The servant is to work as a servant of Christ. The employee–or slave–is to pretend that he is serving the Lord, not men. The master is to treat the worker in the awareness that the master too has a Master–the Lord–to whom he will answer, Someone who shows no partiality to social or economic status. Again, the master and servant are to love and serve each other in their particular duties. in light of God’s presence.


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