Searching For A New Doctrine

The election is tonight and many of us will be watching the outcome with baited breath. I, for one, don’t care all that much who wins. It’s not because I’m not political and could care less about the process. It’s that, with minor differences, we will get a president that is in the mold of the past 9 or so presidents and I feel what we desperately need is a new framework to think about the country.

The current frameworks were put in place in the 1960s. The way we think about economic issues and social issues were almost all formed in that time period. But that was 50 years ago and nothing about this world has stood still. Yet we keep spitting out politicians who look an awful lot like Lyndon Johnson and Barry Goldwater.

So I spent the last months listening to President Obama and Governor Romney, hoping to hear a hint of breaking with the past. I haven’t heard it. So for four more years we will fight the same fights again with the usual cast of characters.

And that’s why Clayton Christensen’s article in the New York Times from Sunday jumped out at me. In it he outlines a way of looking at the economy, rethinking the tired approaches that are no longer working, outlining a plan to invest in the areas of the economy that will fuel growth for the next generation of Americans.

The Doctrine of New Finance helped create this situation. The Republican intellectual George F. Gilder taught us that we should husband resources that are scarce and costly, but can waste resources that are abundant and cheap. When the doctrine emerged in stages between the 1930s and the ‘50s, capital was relatively scarce in our economy. So we taught our students how to magnify every dollar put into a company, to get the most revenue and profit per dollar of capital deployed.

But we’ve never taught our apprentices that when capital is abundant and certain new skills are scarce, the same rules are the wrong rules. Continuing to measure the efficiency of capital prevents investment in empowering innovations that would create the new growth we need.

It’s as if our leaders in Washington, all highly credentialed, are standing on a beach holding their fire hoses full open, pouring more capital into an ocean of capital. We are trying to solve the wrong problem.

I’m not pessimistic about it. It is what it is. But it’s going to take a new generation of thinkers to unstick us. I’ll continue looking for those people to emerge.