At Army formations it is customary for an officer to bark: “Sick, Lame, and Lazy, Fall Out!” before drills. This is the origin of “passing muster.”
In civilian life, being lazy can be a virtue. Taking a shortcut or copying can be very lucrative. Economics is built on lazy people finding an easy way to produce or acquire wealth. Sure, hard work and sacrifice have their place in creating wealth, but the real entrepreneur knows how to rearrange the pieces to reach the desired result. Red China is one good example.
China was once the envy of the world – its silk, porcelain, and tea were in constant demand even into the 19th Century when the British hooked the Chinese on opium to get tea. Despite successes like gunpowder, printing, and engineering, China did not have a progressive culture. Italian Jesuit Matteo Ricci (1552- 1610) mesmerized his Chinese hosts with a European clock, a map of the world, and predicting solar eclipses. (He also co-authored the first European-Chinese dictionary.)
Cultural introspection and fear of foreigners were compounded by Mao Zetung. His Great Leaps Forward caused more death and misery than progress. But, all that changed when new Communist leaders discovered the jackpot of “free trade.” Opening its doors to Western manufacturers proved to be a shortcut to a treasure house of technology. Obtaining the plans and machinery for everything from screws to computer chips transformed backward China into what we see today. Lazy paid off! They added industrial espionage and fake designer goods to the mix as another shortcut.
But lazy capitalism isn’t a Chinese monopoly. Bernie Madoff’s pyramid scheme was so lazy that he didn’t even invest the money. And, our glorious Wall Street taught us how to turn mortgages into birdcage liners in 2008 with the help of lazy ratings agencies. The 2016 movie The Big Short, with Christian Bale and Steve Carrell, is a fast-paced lesson in how lazy (and greedy) financial institutions transformed an ingenious boon to homeownership into a poison pill.
That boon was the Mortgage Bond, the brainchild of Lewis Ranieri, an Italian American from Brooklyn. (Ranieri dreamed of becoming an Italian chef until he found that working over a hot stove aggravated his asthma, so he went into bond trading instead.) At Salomon Brothers, he developed an investment bond secured by AAA bank mortgages to market to Wall Street investors. It took a few years for Ranieri’s bond idea to pass legal muster, but when it did the housing market took off. Mortgage money no longer just came from your neighborhood bank, Wall Street bought the bank’s mortgages allowing banks to lend even more money.
Then came the shortcuts. Some wiz kids began mixing risky mortgages – adjustable rates and people with low credit scores – with the good stuff Ranieri was using. When these homeowners defaulted en masse in 2007-8, the global financial market was on the brink of disaster. The U.S. government bailed capitalism out and saved the economy. The lesson: government cannot be lazy.
Mariana Mazzucato, an Italian-born economist, is making waves among liberals who advocate the redistribution of wealth. There are so many burdens on Americans: the need to pay for child care, holding down multiple jobs, and deep debt. But how to relieve the pressure? It’s easy to spout slogans like “tax the rich,” “Medicare for all,” and “free tuition.” But the risk is possibly killing the golden goose – those entrepreneurs who propel the economy in pursuit of wealth.
Mazzucato sees government as the ultimate solution – by government investing in grand new projects and, more importantly, by reaping loyalties from them which could sustain “Medicare for all” (my thought). She cites the invention of the internet and space exploration as examples of government investments that expanded the economy and bettered the lives of billions. These weren’t communist or socialist ventures; they were pump-primers that private enterprise has since taken over – Tesla, Blue Origin (Amazon), and Virgin Orbit (Branson) rockets are already here. Libertarians want lazy governments that step aside for the individual, but history has shown how powerful a combination of state and entrepreneur can be.
Leif Erikson was a loner. Columbus, Cabot, and Verrazzano had government backing. Only the latter three passed muster and changed the world. -JLM