An interesting take on the Chilean miners

Outside of the U.S., one of the biggest news stories this week surrounded the rescue of the Chilean miners, who had been trapped underground for more than two months. It was a welcome bit of good news for everyone, and it seems destined to be the subject of feel-good books and made-for-TV movies a la Captain Sully.

But of course, I'm the guy who insists on playing the schoolteacher role, and dragging every great story back to a life lesson. Or, in this case, a business lesson. In a Wall Street Journal editorial, Daniel Henninger writes,

It needs to be said. The rescue of the Chilean miners is a smashing victory for free-market capitalism.

Amid the boundless human joy of the miners' liberation, it may seem churlish to make such a claim. It is churlish. These are churlish times, and the stakes are high.

In the United States, with 9.6% unemployment, a notably angry electorate will go to the polls shortly and dump one political party in favor of the other, on which no love is lost. The president of the U.S. is campaigning across the country making this statement at nearly every stop:

"The basic idea is that if we put our blind faith in the market and we let corporations do whatever they want and we leave everybody else to fend for themselves, then America somehow automatically is going to grow and prosper."

Uh, yeah. That's a caricature of the basic idea, but basically that's right. Ask the miners.

If those miners had been trapped a half-mile down like this 25 years ago anywhere on earth, they would be dead. What happened over the past 25 years that meant the difference between life and death for those men?

Short answer: the Center Rock drill bit.

Henninger also refers to this previous Journal piece, which raises similar points. His argument is a little overwrought, and it is also clearly heavily partisan toward the right. I don't agree with a lot of his assertions, but it's an interesting take nonetheless. Innovation=profit=societal progress, and therefore any economic policy must, at its core, continue to encourage innovation in the business world.

I, unlike many, don't think that the Obama administration is somehow inherently "anti-business". In fact, I've argued here before that the Democratic party ironically may be turning into the party of big business. I do, however, think that many recent policies--from health care to financial regulation--threaten to disproportionately do harm to small to mid-sized businesses rather than large corporations. This perverts the traditional competitive dynamic that enables small businesses to grow--and provides them with incentives to innovate.

Indeed, most large corporations become conservative once they reach their mature state, and most transformational innovations thus come from the realm of smaller business. If you harm these businesses (even on a relative basis), and give them less incentive to innovate, we all suffer. I see this as the power of Henninger's argument. If you can get past his overt partisan views, there is some opportunity to learn from his insights.


[Wall Street Journal]