Friday, July 22, 2011
You've Got Creative Destruction
It was a wonder: both the Tallahassee Democrat and the Wall Street Journal writing similar articles on the same day: people getting teary-eyed over the closing of Borders. Wait, I thought, wasn't it just a few years ago that most of America cheered plucky Meg Ryan as she fought to stop the collapse of American (e.g. Upper West Side Manhattan) civilization as she knew it by fighting the arrival of a chain bookstore?* I had visions of finally fulfilling my ambition of combining my work as an economist with my long abandoned dream of becoming a comedy writer by writing a sequel in which a now much older (sorry Meg, but aren't we all) Meg Ryan can't understand as her plucky daughter (who is appropriately plucky today?) tries to stop the collapse of American (e.g. Upper West Side Manhattan) civilization by fighting to preserve a Borders from the encroachment of e-books, embodied by a young techie played by Colin Hanks. The economist in me would feature history's only second sexy lead economist character (this was the first) explaining that this is all a lesson in Joseph Schumpeter's idea of creative destruction: the essence of the competitive market is not static competition among existing firms with static product lines. Instead, it is the ability of entrepreneurs to create value by innovations in products, services, delivery systems, etc.
Alas, my Hollywood visions were once again crushed under the heartless weight of the City of A Thousand Broken Dreams as Rich Lowry today published essentially the same article.
* Disclosure: at the time of You've Got Mail my favorite bookstore was "The Haunted Bookshop" in Tucson.