The Corporate Law Group

Tyranny of the Status Quo

Uncle Milt (Milton Friedman) frequently used a good phrase, “The Tyranny of the Status Quo.” By that he meant that getting things to change in our society is very hard. Another friend has pointed out that we are all stuck in a paradigm that we have built over many years. That makes stories like that of Uber and Airbnb even more amazing. Our entire society changed its way of doing things because of a couple of great ideas, implemented well.

And changing the status quo takes embracing innovation. For innovation to flourish it usually has to sneak up on society. If we see it coming we squash it. Or if we can’t see anything but lack of innovation is bringing down one of our societal pillars we prop it up, thus squashing innovation. As we’ve said before here, who knows what innovation would have sprung from the failures of Chrysler, United, GM, AIG, Goldman Sachs, etc. We’ll never know because we propped up the status quo, thus squashing the new.

How to embrace innovation? It’s messy. We need to let the market weed out the inefficient. The non-optimal. It’s disruption. We need to allow it. The blacksmiths need to make room for the auto companies. The bank tellers need to adjust to ATM’s. The word processors need to decrease so computers can increase. The cab ecosystem needs to adjust to Lyft. AT&T needs to make way for the iPhone. Borders for Amazon.

Unless we want less innovation; unless we want to yield the competitive edge to a country willing to make way and embrace disruption, we need to kill the tyranny of the status quo. We have to stop protecting the old and inefficient and allow the market to lead us to the new and better.