This happy-ending story got me thinking about a blog post with the first half of this one’s title. In my professional life, I constantly find myself arguing on behalf of disruptive change. So, I am always looking for examples to help me in what generally devolve into emotional arguments instead of rational discussions. The concept of creative destruction has been part of the discussion of economic theory for over 50 years. But, the human mind (while incredibly able to adapt) is inherently change-averse when it comes to the underlying assumptions of one’s daily life.
This reflexive defense mechanism is probably a good idea in this case, because Schumpeter‘s theory is a macroeconomic phenomenon — it only holds true at the scale of entire industries or economies, and it provides little consolation to those individuals and firms destroyed so that others might be created. Which is where the second act of synchronicity and the second half of this post’s title come in. Last night, I decided to watch one of the two Netflix movies I’ve been holding on to for the last 6 months (you’re welcome, Netflix). Roger & Me is Michael Moore‘s first film, and it just happens to be a documentary of the microeconomic impact of creative destruction in action — specifically, the devestation of Flint, MI in the late ’80’s due to drastic changes in the US auto industry.
While I don’t particularly care for Michael Moore (even though I am a liberal Democrat) and I disagree with his fundamental premise in the film (that the auto-industry “owed” the people of Flint because that’s where it began), I found his account of the personal and social impact of these events to be extremely poignant. The trade-offs between the advancement of the greater good and the cost to individuals are never easy (John Rawls proposed a theoretical means of making these decisions with his difference principle, but no one has figured out yet how to put it into practice systematically).
I really don’t have a point to make with this post, per se. I guess I said what I had to say with the title alone. Progress is generally good, but how good really depends on how one goes about it. There is a human element to value creation, something that won’t show up on any balance sheet. I think good leaders know this and guide their actions to maximize their own concepts of this holistic value (objectively measuring such value is precisely where implementation of Rawlsian principles starts to break-down), and not just the financial bottom-line. As Kant said, a human being “must be treated never as a mere means but as…an end at the same time.”
One potentially happy sign that progress is improving on itself comes from a comparison of these two examples of creative destruction. Only now, more than 28 years after GM started eliminating jobs in Flint, is the city showing evidence of a sustainable social and economic transition from its roots as the birthplace of the world’s largest auto-maker. Yet, those who feared similar economic devastation from the rise of software development outsourcing appear to be thriving just three short years later. While this is hardly an apples-to-apples comparison, it is encouraging to think (right or wrong) that in only two decades change has actually become a little easier.