Megan McArdle on the Domestic Auto Industry's Failure
I've been hard on Megan "Jane Galt" McArdle in the past. She's bad on negative externalities, was wildly off regarding the $1 trillion Iraq war, and misidentified the ethics around the CEO pay debate.
However, this is too good for me to ignore:
But whatever your feeling about government intervention in the economy, or the correct level of income inequality, I think there's one thing we can all agree on: for the world to get better, things that don't work have to fail.
She is wrong regarding a consensus agreement (and in some of her suggestions at the end of her post), but she's very much right that failures must be allowed to fail. Hopefully, the people involved with those failures will learn something from their failures and apply it in the future. Workers might not simply assume they will always have a job with a company presumed to be immortal. Management might not design products people don't want. Stockholders might pay more attention to investment fundamentals. Suppliers might do a better job forecasting future demand for their contractors' products.
Screwing up opens the door to improvement. The more you protect people from experiencing the fruits of their mistakes, the less likely they'll learn from them.