Good Capitalism, Bad Capitalism

Dynamic change is a basic feature of a healthy economy. If new industries appear, and old ones disappear, the system is working the way it should

Arnold Kling, at Econlib, quotes an interesting fact from a new book "Good Capitalism, Bad Capitalism:"

Of the twenty-five largest firms in the United States in 1998, eight did not exist or were very small in 1960. In Europe, all twenty-five of the companies that were the largest in 1998 were already large in 1960.

Rather than spending precious time and money propping up big, old companies, we should be building an entrepreneurial economic system that encourages innovation and improvements. When business loses its entrepreneurial spark, it becomes a bureaucracy. And the safest thing to do at a bureaucracy is exactly what has always been done.