The end of the dinosaurs

An interesting essay by Glen Reynolds (Instapundit) over at MSNBC/Slate/Glennreynolds.com:

The old industrial state
I've written here before about GM's problems, and Thomas Bray notes that it's a case of the bankruptcy of the industrial welfare state. He's right, and the problem isn't limited to GM. Enterprises based on similar models -- bloated pension costs, lots of perks for managers, little concern with competition or delivering value to the alleged customer -- are failing all over. In fact, the serious structural problems facing the Western European nations, as their huge pension and healthcare liabilities, and their political inability to do much about those, sap budgets and lead to crushing levels of taxation, are just another example of the same problem, as are the problems of the other two Big Three automakers.

Glenn then quotes from this excellent article by Michael Barone and then continues with a few interesting observations (including the fact that eBay vendors, if treated as a whole, are beginning to overtake WalMart as America's Largest Retailer and eBay is starting to offer health benefits to people who sell more than $1K/month through their website. He closes with this observation:

Which suggests that we should be modeling our policies around dynamic approaches rather than trying to save Old Economy behemoths that were never very good at competing. (Indeed, the notion that we could help the "working man" at GM do well by making sure that other workers paid too much for inadequate cars was always a bit iffy, wasn't it? That's not expanding the pie, just taking a bigger share for some at the expense of others.)

I certainly don't mean to suggest that there's no role for government -- things like more health-insurance portability, for example, would go a long way toward facilitating the growth of small businesses -- but I do think that we should be looking at things differently. In a dynamic economy, we should probably be trying to embrace dynamism, rather than -- as the UAW and auto executives did with notable lack of success -- trying to stop change.

Some interesting thoughts.