Dinosaurs
Posted by Chris Martin at 12/10/2008 1:23 PM 
Categories: Business, Economic Theory, The Crash of 2008
Categories: Business, Economic Theory, The Crash of 2008
Although Wonks Anonymous is unable to provide a precise citation, he is sure that the recent discussions of the auto Industry have been made colorful by numerous references to the dinosaurs. We have probably heard a number of times that the Big Three are dinosaurs, poorly adapted and doomed to extinction. The best thing that we can do is to let economic Darwinism take its course.
Wonks Anonymous, who has loved dinosaurs from childhood, finds this argument deeply offensive. The general consensus among evolutionary biologists is that dinosaurs were superbly adapted creatures who managed to limit our own ancestors to minor ecological roles. Their direct descendants, the birds, provide ample testimony to the efficiency of the dinosaurian model.
Dinosaurs did not die out. They were murdered by the impact of a comet and the subsequent short run changes it created. Our ancestors survived because they were small and accustomed to scavenging. Only after centuries of evolution were they able to fill the niches left by the dinosaurs and repopulate the earth.
Lucky us.
But please to note that this piece has a social and economic moral. The economic collapse that we are now experiencing is not ordinary hard times. These bring some slight sharpening of competition and tend to improve the general quality of surviving businesses. We have just been hit by a meteor and in these circumstances the good and the bad will perish together. When we eventually rebuild, more or less from scratch, a great deal will be lost that we will miss.
We could let nature take its course and lose a generation or we could do something.
Wonks Anonymous, who has loved dinosaurs from childhood, finds this argument deeply offensive. The general consensus among evolutionary biologists is that dinosaurs were superbly adapted creatures who managed to limit our own ancestors to minor ecological roles. Their direct descendants, the birds, provide ample testimony to the efficiency of the dinosaurian model.
Dinosaurs did not die out. They were murdered by the impact of a comet and the subsequent short run changes it created. Our ancestors survived because they were small and accustomed to scavenging. Only after centuries of evolution were they able to fill the niches left by the dinosaurs and repopulate the earth.
Lucky us.
But please to note that this piece has a social and economic moral. The economic collapse that we are now experiencing is not ordinary hard times. These bring some slight sharpening of competition and tend to improve the general quality of surviving businesses. We have just been hit by a meteor and in these circumstances the good and the bad will perish together. When we eventually rebuild, more or less from scratch, a great deal will be lost that we will miss.
We could let nature take its course and lose a generation or we could do something.
But the dinosaurs, however well adapted they were to the conditions under which they thrived, turned out to not be well adapted at all to the conditions that followed a major shock to thier ecosystem. The small rodents and other mammals, however, who cowered in their shadows previously turned out to be robust enough to weather the hard times and in the end take over the world themselves. Tell me, would you rather the world still be ruled by dinosaurs?
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Further, there is no mass extinction occuring today other than the extinction of money. All the material resources and human capital we had before this shock we still have now; we are just now so confused about how we should distribute those resources that we aren't doing so efficiently.
We do not need to save the auto companies to survive. Let them go bankrupt, settle their debts, then have the government (or any willing company) buy their assets and use them to create new energy-efficient car companies. Continuing to make cars that noone is buying is a complete waste of resources. The millions of workers tied to the Big Three can be put to use for some useful purpose, perhaps building more railways, manufacturing mass transit vehicles, improving our energy infrastructure and power sources, teaching math and science in our schools, or going to school for their nursing degree. That is, after President Nincompoop is out of the picture.
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Stiglitz says:
http://www.ft.com/cms/s/0/1a2e2042-c79f-11dd-b611-000077b07658.html?nclick_check=1
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Now who's a supply-sider
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