by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Any systems-analysis view of a struggling economy, at any given time and under all circumstances, will show the chief problem to be lack of demand. In a closed system this would be true. If capital and inventory were plentiful while consumer income stagnated, then the fix would surely be obvious: Get more money in the hands of consumers! Print more money! Redistribute more income! Whatever it takes.
But in Wealth and Poverty Gilder showed that the problem has always been a lack of supply. And here’s the key: not a lack of the same supply; rather, a lack of a new, inventive and entrepreneurial supply that meets consumers where they live and takes them to new heights. Focus on the supply-side entrepreneurs, who will deliver these goods, not the demand side, said Gilder. (Steve Jobs said the same thing when explaining why he eschewed market research: “People don’t know what they want until you show it to them.”)
Gilder’s supply-side case in Wealth and Poverty expressed itself politically as a return to more laissez-faire economics and socially as a return to the time-tested virtues of family and faith.