The other day, I came across this video on YouTube:
A guy walks over to a homemade wooden machine and starts cranking it, and as it moves, metal ball bearings start falling on different percussion instruments to make music. The time it must have taken to design, build, and practice using this machine must have been extraordinary, and yet, somebody took the time to do it for no more guaranteed benefit than that some guy procrastinating in his office in Rhode Island would be impressed. I love that we live in a society that is prosperous enough to allow such a potential waste of effort.
But if you think about it, the economics are a lot like the machine. Just as there were enough ball bearings to ensure that they’d randomly sort into all the needed columns, if enough people are impressed by the machine, some number will investigate the band who used it for their music. And if enough people do that, some number will buy the album, see the show, and buy the t-shirt.
The entire series of transactions is an amazing balance. Somebody along the way can be disappointed, of course, but as much as possible everybody has as much investment as he or she wants — of time, money, or any other value they have — and every individual factors in an amount of risk, from the folks who built the machine and paid for the materials to the people who buy an album not knowing whether they’ll actually get their money’s worth of enjoyment.
In Rhode Island, of course, the artists would probably find it pretty easy to get some subsidy or other from the government for this project. With that being the case, he or she has less incentive to design the machine in a way that other people will like. And the people who fund the project have no real say in whether it’s worth the expense, when balanced against other things toward which the money might go.
When all is said and done, the only measure of value by that route is whether a few politician-appointed officials feel good about having funded “art.”
And here’s the biggest problem of all: That measure of value isn’t even isolated. The officials handing out the checks for esoteric art are appointed by people with far broader political agendas, who were elected based on who-knows-what political promises. So, instead of transactions that represent the cumulative interests, values, and biases of the entire community, you get the specific interests and biases of a select few. You get the Governor’s Workforce Board giving money to the organization of a board member’s daughter. Sticking with art, you get a big granite table shaped like a star with interchangeable pro-labor-union messages that almost nobody in the state ever sees behind some state offices.
When we apply this approach to economic development across industries and throughout the state, the consequences filter down to the most vulnerable — the people who don’t have the leverage to push market distortions onto somebody else.