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Affluent Christian Investor | January 21, 2020

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Let Walt Disney And DisneyWorld Curb Your China Paranoia

To walk through DisneyWorld’s Magic Kingdom is to see posted throughout the park various quotes from the great Walt Disney himself. Politicians would be wise to heed them. Indeed, a taxpayer boondoggle that would actually serve to enhance governance from the national political class would be a visit to the Magic Kingdom by Congressmen, Senators and the President himself.

Disney once said “I can never stand still, I must explore and experiment.” Entrepreneurs are different from you and me. They want to do things that are roundly rejected precisely because they see the world differently. And so they experiment. Crucial here is that experiments of the business, healthcare and transportation variety (among others) are very expensive. And they routinely fail.

All of the above matters in consideration of the wealth taxes and government spending proposals so aggressively promoted by politicians on the left. These shrink the amount of capital that can potentially be matched to modern day tinkerers who aim to emulate Disney. Worse, they make intrepid experimentation less likely. Let’s never forget that Disney’s ideas weren’t obvious to very many beforehand, which explains why wealth taxes in particular are so harmful. The superrich, and that’s whom Senator Warren promises to tax, uniquely have the excess funds that they can lose on what’s only obvious after being initially seen as incredibly outlandish.

About government spending, supply siders on the right would be wise to consider Disney too. One doubts he thought much about individual tax rates, while thinking a great deal about how a lack of capital might hinder his creativity.  This rates mention because some supply siders fancy themselves uniquely wise, and routinely unsheathe with great rhetorical flourish the late, great Jude Wanniski’s “Santa Claus” theory of politics. Wanniski’s point was that Republicans focused too much on deficits, and spending cuts, but not enough on tax cuts. As a consequence, some in the electorate saw them as Scrooge as opposed to Santa. Wanniski was right about tax cuts, right that deficit focus was a waste of time, but incorrect about government spending. The latter is a tax that yet again limits how much in the way of resources that the innovative can be matched with. It’s the definition of austerity. Unless supply siders on the right and wealth taxers/spenders on the left can say with a straight face that precious resources are better left in the hands of politicians, as opposed to future Disneys of commerce, healthcare and transportation, they would be wise to focus on shrinking the tax on experimentation that is government.

Another prominent quote from Disney goes like this: “You can dream, create design and build the most wonderful place in the world, but it requires people to make the dream a reality.” Politicians and pundits who’ve out of nowhere become vocal China critics for, among other things, their “theft of our intellectual property,” would be wise to internalize Disney’s comment. Implicit in the political and pundit class’s feverish hatred of the Chinese is that U.S.-based innovation is so basic that it can be stolen and easily mimicked. In short, those cracking up about China are insulting U.S. entrepreneurs and businesses by presuming that their genius can be easily reproduced after being stolen.

Back to reality, it’s incredibly difficult to copy what’s truly innovative. For one, what’s truly innovative is broadly rejected as outlandish to begin with. After which what’s brilliant is hard to recreate without great people. If readers doubt this, consider how well Patriots’ coach Bill Belichick’s former assistants have done on their own in the NFL; this despite seeing how he runs the best team in football up close. Based on that, does anyone seriously think “stealing” genius in the non-sports realm is somehow easier? Useful here is that we have an answer from Disney-owned film company Pixar. As founder Ed Catmull observed in his autobiography, all Pixar movies “suck at first.” Catmull’s secret to turning what sucks into a box office juggernaut is people. So was Disney’s. Even if the Chinese are congential thieves as the pundits and politicians so obnoxiously presume, executing on genius stolen is a staggeringly difficult challenge.

To the previous paragraph some will respond that the Chinese have good people, plus they’re thieves. Combine the two and oh dear? Not really. Disney had an answer. As he put it, “Times and conditions change so rapidly that we must keep our aim constantly focused on the future.” Disney’s point was that the present rarely predicts the future. Translated, what appeals to consumers now, and what works for consumers and clients now, will not be sufficient down the line. Which means the successful businesses are constantly evolving given the simple truth that the stationary state is the path toward obsolescence. Translating this for those convinced the Chinese are “stealing our secrets,” anything they could take is almost immediately dated.

At which point some will no doubt respond that the Chinese aren’t just stealing the present; they’re stealing the future too. To which the easy response is that if it’s incredibly difficult to mimic innovation, it’s near impossibly difficult to know what’s going to be popular in the future. Lest readers forget, Disney’s ideas for theme parks weren’t exactly cheered when initially introduced. Neither was Steve Jobs’s iPhone. And while Pixar is the world’s most successful movie studio today, its owner after George Lucas (yes, the Star Wars visionary) was less than enthused about it before it began producing wildly successful films. That owner was visionary technologist Steve Jobs. The future is hard to predict. Deal with it.

And hopefully profit from the insights that came from the brilliant mind that created DisneyWorld. This remarkable commercial achievement rejects much of what all-too-many believe today about public policy today, along with the intense paranoia that informs the policy.

This article originally appeared on RealClearMarkets.

 

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