Ed Driscoll

Shaking Out The Second Wave

In his MSNBC column the other day, Glenn Reynolds wrote:

I’ve written here before about GM’s problems, and Thomas Bray notes that it’s a case of the bankruptcy of the industrial welfare state. He’s right, and the problem isn’t limited to GM. Enterprises based on similar models — bloated pension costs, lots of perks for managers, little concern with competition or delivering value to the alleged customer — are failing all over. In fact, the serious structural problems facing the Western European nations, as their huge pension and healthcare liabilities, and their political inability to do much about those, sap budgets and lead to crushing levels of taxation, are just another example of the same problem, as are the problems of the other two Big Three automakers.

I’ve mentioned Alvin Toffler’s Waves Theory from his 1980 book, The Third Wave a few times–and it’s fascinating to watch how long it takes for a wave to complete its cycle. Toffler’s theory was that the Third Wave–the information, or post-industrial age–began with little notice in the mid-1950s when white collar workers first began to outnumber their blue collared counterparts. Given the then-recent contractions America’s steel industry was suffering in the 1970s, he also used them as an example of a second wave (or industrial) institution forced to change or die by the coming of the Third Wave–which began gathering steam in the 1970s, and arrived in spades during the following decade, when computers, cable and satellite TV and the Internet began to gather steam, which the coming of the World Wide Web in the 1990s only accelerated.

The challenge is for the remaining sclerotic Second Wave institutions to try and survive in this era–along with governments whose men know only Second Wave-style solutions to problems. There’s an alternative, of course, which Glenn suggests later in his post:

we should be modeling our policies around dynamic approaches rather than trying to save Old Economy behemoths that were never very good at competing. (Indeed, the notion that we could help the “working man” at GM do well by making sure that other workers paid too much for inadequate cars was always a bit iffy, wasn’t it? That’s not expanding the pie, just taking a bigger share for some at the expense of others.)

I certainly don’t mean to suggest that there’s no role for government — things like more health-insurance portability, for example, would go a long way toward facilitating the growth of small businesses — but I do think that we should be looking at things differently. In a dynamic economy, we should probably be trying to embrace dynamism, rather than — as the UAW and auto executives did with notable lack of success — trying to stop change.

That’s far easier said than done of course. Both conservatives and the left have taken turns “standing athwart history yelling stop”; currently, it’s the left, as Radly Balko noted a couple of years ago:

You know, you sometimes get the feeling the day after the polio vaccine was invented, today’s left would have run editorials lamenting the good ol’ days, when we were a little more cautious about what swimming pools we jumped into, and expressing sadness that we’d now have no new stories about the afflicted overcoming their disability to inspire the rest of us.

I’m not kidding. They’re that resistant to change. Every mill that shuts down is a “sign of our sad times.” No matter that the new mill will do things better, faster and cheaper than the old one. New farming techniques grow more food on less land. But dammit, if there wasn’t something romantic about the old-stye “family farm” that’s deserving of government protection. Innovation isn’t celebrated, it’s excoriated for displacing some idealized vision of the way things once were. In matters of progress and dynamism, the left is far more conservative than the conservatives are.

And unions, who provide much of their funding don’t have much incentive to see the Second Wave fully roll into history, either.