From today’s AP wire: “President Bush told Congress on Friday that America’s vibrant free-market system was the key factor in allowing the country to deal with the shocks of a recession, terrorist attacks and corporate scandals.” Bad timing: it turns out that one of the things this vibrant free-market system excelled at was dodgy tax evasion schemes and even dodgier Ponzi-like hard sells by the major accounting firms. (see the NY Times article, as well as Floyd Norris’s piece today).
Beyond that, the economic report repeats the tired mantra that entrepreneurs create wealth. Making money is not the same thing as creating wealth. Wealth, or new wealth at least, is created only when rising productivity occurs by technological insight (broadly speaking) and/or shifts in a labor culture (hard to measure or predict). Entrepreneurs may have a role in fostering new technologies, but often they seek to make money at the expense of someone else’s market niche and profits. Besides, I don’t have hard figures, but I’d venture that a good majority of our productivity gains come in fact from the oligopolistic corporate sector. Of course, corporations never get the credit, because no one romanticizes them - not the left who think corporations are only and simply evil, and not the right, who need the entrepreneur to imagine that we’re still living in Adam Smith’s world of competitive markets, perfect competition and small government.
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