“Destruction is the Genesis of Creation”
The Universe was formed from the ultimate symbol of destruction – The Big Bang. The birth of stars and planets are intricately linked to the Super Nova, even the benevolent Sun that is the source of all energy known to mankind provides it through the destruction of mass.
Countries and people are freed through destruction, violence and revolution, Governments and religion destroy individual freedom to ensure harmony, and even the birth of a child requires the physical destruction of the bond between a mother and a child. You have to destroy to create
Destruction is seemingly at odds with the idea of Value Creation….but I think Value creation also entails destruction…You have to destroy something and reconfigure it to create value.
A company that makes explosives…
Will take discrete components that are of no monetary value, destroy their individual identity through chemical re-composition to create something useful. The same company employs people whose free-time is economically meaningless and destroys it to convert it into productive man-hours. Even the destruction of the environment is an outcome of value creation.
If economics can address the question of what creates value, which science answers the question of what can be destroyed to create this value? Is it permissible for privacy to be destroyed for security? Can a few species be sacrificed for industrial growth? Can the drive for productive achievement be destroyed to create equality? These questions and many more are dealt separately and disconnectedly in the realm of politics, philosophy and casual debates. I believe that Destruction and creation are inextricably linked and what to destroy is not separate from what to create.
“Economics has to expand to account for both sides of this equation.”
As a very macro-example… let us analyze the activity of running an explosive factory. We are creating Economic value that is the sum of
· Organizational profits
· Employment generated
· Final use of explosives (building tunnels, roads, mining etc..).
The externalities would be the
· Destruction of raw materials,
· Destruction of the environment
· Opportunity cost of capital
· Opportunity cost of labor
A rigorous and objective analysis of both sides can give the true Economic Value Added by any activity. This is a true incontrovertible measure free from politics and vested interests
Even the measure of a man is what he can destroy and recreate.
For example a man who creates value of 4 lakhs in the economy is now entitled to use that as he may please…destroy plants/animals for food, destroy metals/ chemicals for items of his personal use etc.. On the other hand a man creating value of 4 Crores will have 4 Crores of value at his disposal to destroy and recreate as he may please. In other words the greater your value creation the greater your influence on what can be destroyed and recreated (recast for your benefit). I want to call this motive power (due credits to Ayn Rand).
This cycle of destruction and creation will go-on forever…. Unlike the doomsday-sayers we as a speck of civilization are not disturbing anything in the universe…we are merely recasting (destroying and recreating) existing mass and energy to better our lives TODAY. The men who help us do that are the value-creators – The men who drive the world forward. To incentivize these men of action you have to provide motive power (no free lunches!)
This re-enforces the need for economics to be able to accurately assess the Economic Value Added by professions. In a skewed world where value-creators are disconnected from the power to destroy and re-create, they will lose their drive to serve this never-ending continuum.