All Commentary
Tuesday, December 2, 2014

Creative Destruction Is Not Zero-Sum

A letter to the Wall Street Journal

To the Editor:

I regret to see your columnist Christopher Mims deprecating economic liberty (“KEYWORDS | Uber and a Fraught New Era for Tech,” November 25).

“The emphasis of the tech companies being built now is much more zero-sum,” he writes.

Zero-sum? In reference to Uber? The Uber riders and drivers who exchange money for rides both expect to be made better off by doing so; their doing so repeatedly makes clear that both sides gain.

[Tech companies now ask,] “Whom do we need to destroy in an effort to enrich ourselves and our investors…?” “Whom” in that sentence suggests that market competition destroys people. That’s false.

Survival of the fittest in free market competition applies not to people but to ideas and enterprises; when enterprises are destroyed in Schumpeterian “creative destruction,” people benefit from the creation of enterprises more suited to their wants and needs. Mims should have asked, “What do we need to create” instead of “Whom do we need to destroy”; and he should have added “our customers” to “ourselves” and “our investors.” Creative enterprise enriches all of them.

[Tech companies now ask,] “what is the best vehicle for creating a consumer need[?]”

“Creating a need” suggests artificiality, inauthenticity, as if the clever capitalists fool consumers into thinking they need what they don’t. That notion is tired. And it’s irrelevant to us fortunate souls in a society advanced beyond just satisfying our needs for staying alive. We benefit from lots of things we just want, like quick and reliable city rides.

Here’s what it takes to make Uber a success, apparently: Enter new markets without asking regulators for permission, then build enough of a customer base to make classifying the service as a traditional taxi company politically expensive for regulators. (emphasis added)

It’s clear from the context that Mr. Mims means this critically. Doesn’t he see that Uber has improved the quality of city ride services so much as to make taxi regulators superfluous? Why does he care about expense to the regulators when the public has so clearly benefitted by having them out of the picture?

Unlike Mr. Mims, in preferring liberty to authority I think one of the coolest things about Uber is that they didn’t ask permission. Bravo, Uber! That’s the kind of subversion of impertinent abusive government regulation we need more of. Why should Americans, or anybody, have to ask permission to engage in voluntary, peaceful exchange?


Howard Baetjer Jr.
Lecturer, Department of Economics
Towson University