‘Tis the season for “The Year In Pictures” – the annual new year pictorial accounting of the events of the outgoing year. Any rational collection for 2011 would include three events; Arab Spring, The Earthquake / Tsunami in Japan, and Occupy Wall Street. These three events eclipsed the Royal Wedding, Steve Jobs, the tenth anniversary of 9/11, the space shuttle retirement and even the end of the war in Iraq.
These three events tell a very interesting story of who we are and where we are going as a civilization.
Classical economists such as David Ricardo and Adam Smith brought us the idea that a merchant class allocates land, labor, and capital in various combinations as “the factors of production” that match supply and demand for all that societies need via the invisible hand of market capitalism.
Yet, in a single hour, land, labor, and billions of units of Capital were wiped off the surface of the Earth by in Japan. While we see the images of total destruction, there are hundreds of square miles that were untouched and where all seems quite normal – except for that invisible hand of radioactive cesium. Land, labor, and capital failed as a an economic cornerstone for all those who had once called this land home.
In the Middle East, with few jobs and even fewer opportunities for youth, the quaint notion of “land and labor allocations” crumbled under the forces of people with mobile access to dynamic data, free information, community knowledge, innovation, and wisdom. Governments, with no relative shortage of money, were unable to challenge the opposing factors. Again, the idea of land, labor, and capital as the economic cornerstone had failed.
Quite appropriately, Occupy Wall Street was executed on borrowed land, with borrowed labor, and borrowed capital. The operation was peaceful so nobody died. The stock market did not even crash. Politicians went largely unscathed and the attorneys stayed in their collective offices. Nothing physical was actually created, and therefore, nothing physical was actually destroyed. However, a great deal was produced.
All three of these events had something in common – they all produced something very tangible. They all produced an idea in the minds of others.
As we review the year we review it is increasingly evident that land, labor, and capital are inadequate to articulate what people actually produce. It will be through these shortcomings of classical economics that a new economy will form. The degree to which society actually produces the things that society actually needs, this new economy should not look much different. The degree to which society does not actually need the things that capitalism produces, great new ideas will emerge.
What was once the land of opportunity can now become a planet of opportunity.
Photo Credit: David Shankbone via Mashable