Another Nice Thing about a Recession

Mark J. Perry, whose day job is making lemonade out of lemons, argues that another nice thing about recession is that it is a wide open opportunity for entrepreneurship. He's actually onto something here if you don't overdo it, but he picks a couple of funny examples to make his point.

One is Bill Gates who got his start (as Perry says, picking his words carefully) "after the 1975 recession," (my emphasis) although it is hard to identify any one thing that Gates might have done differently had he come of age in a healthier economy. One might just as plausibly say that he got started just in time to run into the firewall of Paul Volcker interest rates. Perry also mentions Gates' highly equivocal role as in "inventor"--more bluntly, the fact that he never "invented" anything, unless you count the means and technique of capturing and exploiting economic rents (this is too strong: in the very early days, he did write some code. But his fortune relies almost entirely on stuff done by others--or by suppressing competition)

The other is the game of Monopoly which Perry says (with carefully crafted nuance) "was patented during the Great Depression."

Hm. In the narrowest sense of the term, that appears to be true; Monopoly was patented in the middle of the Depression. One could go further and say that the "inventor," Charles Darrow, had time to pursue his project because he was otherwise un- (or under-) employed. You could say that Darrow (unlike Gates) actually did some of the "creation" that went into the final product.

The trouble is, as even the most superficial observers now knows, Darrow was only the lucky latest in a long line of "creators," extending at least back to the turn of the century. Parker Brothers spent most of a generation warding (or paying) off competing claims.

So both Microsoft and Monopoly are stories about the capturing and enjoying economic rents. They have little or nothing to do with creativity in general. If that is what a recession facilitates, we can well do without.