WELCOME
The Visible Hand
As I write this, there is panic on Wall Street
despite Washington’s $700 billion rescue
attempt. The crisis is not contained by U.S.
borders, but extends to Europe and Asia. Like many
people, I’m incredulous. How could this happen?
Wall Street hired the best and the brightest,
paid them handsomely, and gave them unlimited
resources and technology. It turns out they were
building enormously complicated castles made of
sand. A great wave washed them away, astounding
all the smart people who devoted their lives to
speculation, not production. Their models based on
historical data predicted future profits, not collapse.
Few people saw this coming until it hit.
“It was the triumph of data over common sense,”
said reporter Adam Davidson on the excellent episode
of This American Life called “The Giant Pool of Money.”
Economist Michael Lehmann in the San Francisco
Chronicle called it “the triumph of ideology over
common sense.” It’s obvious both common sense
and the common man have taken a beating.
It’s hard to stomach that our government must
bail out Wall Street. It really means we’ve bet our
future on the same people who created the pres-
ent situation. To paraphrase a joke I’ve heard: It’s
like going to a casino in Vegas and rooting for the
house. One New York Times reader expressed the
frustration that many feel: “Why can’t we take half
of the $700 billion and just build something?”
These events shake our belief that free markets
work to the benefit of all. The fundamental tenet
of capitalism is the “invisible hand”: Adam Smith
wrote that “by pursuing his own interest [each
person] frequently promotes that of the society.”
This year, Nobel Prize-winning economist Joseph
Stiglitz said: “In this sense, the fall of Wall Street
is for market fundamentalism what the fall of the
Berlin Wall was for communism — it tells the world
that this way of economic organization turns out
not to be sustainable.”
A headline in the Christian Science Monitor
says: “With finance crisis, hands-off era over.”
Government will need to be more assertive in regu-
lating Wall Street. But I think it goes beyond that.
I wonder if we, as individuals, have been living in
BY DALE DOUGHERTY
our own era of hands-off. Have Americans become
so disengaged that we’ve become dependent on
some invisible force to provide what we need? Have
we gotten used to leaving important matters to
experts, until they turn out to be wrong?
Isn’t it time for us to become hands-on again?
We, the people, face enormous challenges. Apart
from the economic mess, we know fundamental
changes are coming because of global warming.
Our dependence on fossil fuels is not sustainable.
Change is coming, whether we want it or not.
Better we meet the challenges head-on rather than
hide. New York Times columnist Thomas Friedman
The DIY mindset must again
become an essential life skill.
summed it up: “We need to get back to making stuff,
based on real engineering not just financial engineering. We need to get back to a world where people are
able to realize the American Dream — a house with
a yard — because they have built something with
their hands, not because they got a ‘liar loan.’ ... The
American Dream is an aspiration, not an entitlement.”
We have to believe it starts with each of us — not
some faceless government or corporate bureaucracy. It’s time for us, individually and working
together in business, to reconsider what it means to
be productive, not just profitable. It’s time for us to
reengage in how our government sets priorities for
education, health care, housing, and transportation.
The DIY mindset celebrated in this magazine
must again become an essential life skill, rooted
once again in necessity and practicality. Our future
security lies in knowing what we’re capable of
creating, and how we can adapt to change by being
resourceful.
A challenge this great can bring out the best in us.
We need everyone, because every person has something to contribute. We need a showing of all hands.
Dale Dougherty is the editor and publisher of MAKE and
CRAFT magazines.
Make: 13
