The always insightful EJ Dionne of the Washington Post has a thought-provoking take on the American economy in his column today. It starts with a great story:
Decades ago, Walter Reuther, the storied head of the United Auto Workers union, was taken on a tour of an automated factory by a Ford Motor Co. executive.
Somewhat gleefully, the Ford honcho told the legendary union leader: "You know, not one of these machines pays dues to the UAW."
To which Reuther snapped: "And not one of them buys new Ford cars, either."
Dionne then goes on to remind readers of the economist Joseph Schumpeter's belief that capitalism is a form of "creative destruction," that it"is by nature a form or method of economic change and not only never is, but never can be, stationary."
There is, of course, more to the story. At the end of the column, Dionne writes "that few would embrace capitalism's innovations if the system's tendency toward creative destruction was not balanced by public innovations to spread the bounty and protect millions from being injured by change."
I think that's right, but it is not enough. The fact is that spreading the bounty of progress and protecting people from disaster is not simply something we should do for the sake of buiding public support for capitalism. We should do these things because they are the ways in which we make capitalism work. By spreading the bounty and opening doors of opportunity, we tap the full potential of our greatest asset -- our human capital -- because we never know from which young person the next great innovation will spring. By creating a safety net for people, we give them the confidence to take big risks that can have a big pay-off for all of us.
Freedom isn't free, we are often told -- and that's true. Free markets aren't free either -- and we all should be willing to pay the price.