In my last post, I complained Robert Kuttner didn’t really capture the government’s role in the market. Ironically, he also didn’t capture what I love about the market.
Kuttner, Dean Baker, Jamie Galbraith, they’ll all write that “markets accomplishments much superbly,” “the market is an incredibly powerful force,” etc. But they sound like a little kid who’s been forced to say thank you for the socks she got for Christmas.
Here’s what’s missing: the feeling I got when I bought my iPhone.
I’m not going to irritate/bore you to death with a ten-page rave about my iPhone. I’m sure you already got enough of that from your friends when it first came out — or maybe you are one of those cruel people who splattered friends with iPhone-love drive-by’s. Let’s just say the iPhone was the shiny red bike I’ve been waiting for. And that it feels like Round 2 of the Net, where the Net is no longer deskbound and instead it & all the people on it are with you wherever you go.
But as an economy geek and a one-time small-business owner, it wasn’t just the iPhone itself that blew me away. It was the business model behind it (once Steven Jobs came to his senses and opened up the iPhone a little).
Many a bright software idea has crashed and burned because its inventors couldn’t hack the business side. With the iPhone’s App Store, getting credit cards to work, providing tech support if someone had trouble downloading your app, and a dozen other business problems that could sink a software company — these daunting problems mostly disappeared in exchange for 30% of sales. And since apps could be sold for as little as ninety-nine cents, buying an app wasn’t a big risk for a customer who didn’t know you. The idea of this business model been kicked around for a long time. But Apple was the first to figure out how to execute it flawlessly.
If you’re writing about economy, I think you’ve got to be able to capture this feeling — the delight in the creation of a new product as well as the brilliance of a new way producing and marketing a product to turn it into a profitable success. It’s a feeling Wired captures better than just about anybody else.
Maybe I’m being a bit unfair. If you’re reading a book called The Squandering of America, do you really expect to find a love song to entrepreneurship? But I think the fact that you find almost no trace of the exhilaration of the market in books like this points to a weakness in our side. We do outrage really well. But owning up to more complex feelings? Not so much.
An economic model that captures the excitement of entrepreneurship and the power of solidarity — that’s not an easy thing to pull off. But if the model’s going to succeed, I think it’s got to do it.
UPDATE: between this and the last entry on Kuttner’s book, it might sound like I didn’t think much of it. That’s not the case. I’m just using my reaction to a few elements in the book as a springboard to figuring out the RTE model. Squandering America is smart and nuanced, and Kuttner’s managed to pack an amazing amount of interesting economic history details into a very readable story. It’s definitely worth checking out.
