Creative Destruction and Congress

December 22nd, 2008 · No Comments · Political Science & Economics

A company invents a lotion that absorbs and neutralizes chemical weapons “seven times better” than the current solution. The military wants to buy it to help save lives, instead of continuing to buy the inferior product. Makes sense, right?

Well, in the real world, what really happens after the military decides that it wants to buy the better product?

Companies who make the inferior solution make campaign contributions to Senators who represent the states that produce the inferior product and tell them to issue earmarks forcing the military to buy the inferior product, of course.

That’s what really happened over the last two years when Senators Clinton D(NY), Schumer D(NY)and Spector R(PA) sought out $7.6 million in earmarks, forcing the military to buy the inferior product. They also received a total of just under 100k in campaign contributions.

This type of government intervention is not only sleazy because it risks American lives, but also prevents the creative destruction that is vital to US competitiveness and creating an entrepreneurial culture.

HT: Seattle Times