Legacy Systems (Opinion)

A few months ago, a Ugandan visitor to Little Rock fascinated his hosts by describing the widespread use in Africa of pre-paid cellphone airtime as currency. In desperately unbanked areas, invention has become the mother of necessity, with cellphone owners paying for goods and services by transferring airtime to sellers who then use it to pay their expenses.

In China, Acxiom Corp. barely bothers with the snail-mail addresses that made it a direct-mail giant in the U.S., and instead concentrates on marketing straight to mobile phones, even more than to email addresses.

Sometimes as we consider the future of the American economy, and America in general, we start to wonder how different things would be if we could start over from scratch. The United States is paying an innovative price for having been so far ahead of most other countries, starting during the industrial revolution of the 18th and 19th centuries and especially during the last half of the 20th century.

We have invested so much – money and land and even national character – in systems that we would approach very differently if we had it to do over again. If gasoline had been as expensive, in real dollars, in the 1960s (or the 1980s or ‘90s) as it is in 2011, how much further along toward cleaner, cheaper types of automobile engines would we be today? Would fuel-efficiency standards have been considered an affront to the American way of life? Would we collectively have invested more in public transportation and less in urban sprawl? Would anyone have ever owned a Hummer?

All development has to be considered in the context of its time. It made perfect sense to plant a school every few miles when roads were dirt and transportation involved literal horsepower. But having made those investments, it becomes almost impossible to stop investing in them. Consider the continuing uproar whenever a school district is consolidated because its population has dropped irretrievably below the 350 minimum that state law requires. Similarly, no military installation once opened can be closed without weeping and gnashing of teeth. No government subsidy ever runs out of champions.

The good-money-after-bad syndrome may be worst among governments, where the mathematics of elections is more influential than the mathematics of budgeting. (Consider, for example, the current debate in Congress over tax incentives for ethanol. Consider the quasi-governmental U.S. Postal Service’s quandary over Saturday mail delivery.) But it also infects companies and can be found even in home economics. How many companies are making do with laughably outdated computer systems simply because they have so much invested in them? How many of us are paying far more to heat and cool our houses than we’d have to if we would invest in newer, more efficient HVAC systems? If you were to build a new house – a radical concept in 2011, but something that used to be quite common – it would undoubtedly have fewer telephone jacks and more TV cables than a house built 20 years ago.

Eventually, old systems break down or become functionally obsolete, and we have the excuse we’ve needed to upgrade. And we wonder why we waited so long and how we ever managed with the old system. Technological progress is like that.

As we consider the future of the American economy, let us keep in mind that we are now competing with countries that are not burdened, financially or emotionally, by legacy systems.