It's buckets of crabs all the way down
Posted by aogMonday, 16 February 2004 at 09:09 TrackBack Ping URL

The Brothers Judd have a post about the “creative population” theory of economics that made me think of a previous post of mine about self destructive tendencies.

The theory in question claims that the key determinant of economic success is how attractive a region is to the “creative class”. This means that local government aiming to promote economic growth shouldn’t consider gimmicks like low regulations, low taxes, or effecient government but instead coffee shops and theater groups. Sadly for the theory, it turns out that the places most attractive to the “creative class” have had lousy economies over the last few decades compared to boring, straight laced places that are family and business friendly that have done well.

I don’t find this very surprising. The cultural elements that (according the the theory) attract the right people also tend to destroy the local cultural environment. The problem for the theory is while the “creative class” many be better at conceiving and starting businesses, long term economic success requires sustaining businesses. That tends to be done better by the same type of people who have families and a more staid outlook on life. It’s the tortoise and the hare again, where the slow plodding of the staid eventually overwhelms the fast footwork of the “creative class”.

The implication of that is if the cultural features required to attract the leading edge types prevents the solid types from moving there as well, all of the new businesses and ideas will wither on the vine. Moreover, you just don’t need all that many creative types to keep things moving. It’s far more important to not get in the way of those already there than to try and attract more of them (at least in the USA). And the final problem is that the “creative class” described by the theory aren’t innovators in business nor business related activities, but culturally “creative” (I’ve kept “creative” in quotes because frankly, my observations is that most modern cultural innovations, such as showing breasts at the Superbowl half-time, take very little actual creativity).

With the rise of the connected society, it gets worse. It becomes quite feasible to virtually import what creativity is needed, a kind of “virtual brain drain”. Interestingly, this would lead to a stronger class structure in the “creative” areas, as those who can export their symbolic efforts are well remunerated while the rest of the population has to cater to the whims of the exporters. We’ve seen some hints of this already during the dot com boom where local types complained about the invading dot com millionares. But I suppose the theory backers are correct in the strategic sense - if they can ruin everyone’s environment as they ruined theirs, it will wipe out any comparative advantage. Hey, if you can’t cure your pathology, export it! The motto of the modern day New Class.