Obama and Jobs

One of our young century’s most visionary and charismatic leaders gave a speech Wednesday that outlined significant changes in the way we go about our daily routines. His presentation was rich with the promise of a brighter tomorrow: a world in which we are healthier, wealthier, wiser and more closely connected in the bonds of our common humanity.

I’m not talking about Barack Obama. I’m talking about Steve Jobs.

On the West Coast, Steve Jobs unveiled the newest addition to Apple’s product line: the iPad. On the East Coast, President Obama gave his State of the Union Address. The two were notable for their fundamentally different visions. Years ago sociologist Franz Oppenheimer distinguished between the “economic means” to wealth and the “political means” to wealth.

It is important to realize the market and the state have very different natures.

Market power over the individual is voluntary, whereas political power over citizens is backed by force (“the Invisible Gun” ;-).
Market exchange create wealth, whereas political action takes and re-distributes it (at best).
The market strives because of the competitive and rivalrous process, whereas politics get stuck with disagreement.
Markets coordinate people and bring them together, whereas politics drive them apart and opposes groups.
Resource allocation in the market is supported by rational economic calculation (prices) and feedback (profit & loss), but the political allocation is about popularity, privileges, lobby pressure and passing the blame.
Market results are verifiable, as opposed to political promises of jobs created and economic recovery.

Note that political fights still happen in the context of the market, for example within the firm. But the scope is smaller, as private dispute involve only stakeholders, rather than every citizen (since they all have a stake in government decisions). Also, it is the best interest for management to provide mechanisms for resolving disputes. It is not perfect, but management is pressured by competitive forces (from stockholders and the job market) to create a productive workplace which minimizes such situations (as much as humanly possible).

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