[Editor’s Note: This edition of the Economic Prism has been published in years past to coincide with the Independence Day holiday. The themes explored within grow more relevant with each passing year. Thus we are republishing it with several light updates. Enjoy!]
Merry Mobs
As the warm days of summer stretch long in the Northern Hemisphere, true American patriots gather to embrace the spirit of independence. On July 4th, these brave souls stand tall, proudly waving the stars and stripes, even while accepting federal holiday pay. Their character is defined by rugged individualism and unwavering independence.
With determination and joyful intent, they come together as festive mobs along the coast to honor American Independence. Descendants of Andrew Jackson, these freedom lovers indulge in hotdogs, horseshoes, and a few drinks made from corn syrup and fermented grains. As the sun dips below the horizon, bright stars emerge, inspiring cheers and awe in response to dazzling fireworks displays.
These annual celebrations affirm that, even amidst the challenges of extensive government oversight, there are moments to revel in the principles of self-governance. Everyone is welcome, provided they’ve registered their vehicles, paid their taxes, and possess the necessary documentation, including proof of vaccination for COVID-19.
Freedom, liberty, independence, limited government, sound money, property rights, rule of law, a respectful populace, and a reluctance to engage in foreign affairs have become virtues that many feel have faded over the last century—much like the horse-drawn plow. The essence of the republic diminished long ago, long before Elvis left the stage. The global influence of Washington’s policies has ensnared many, making it difficult for anyone to escape its reach.
But why tarnish such a magical celebration with harsh realities?
Instead, let’s take a nostalgic look back to a simpler time—a time before the Department of Homeland Security, Facebook, Google, and relentless tracking systems. A time when freedom felt a little less restricted, and currency debasement was less pronounced.
Creative Destruction
Pivotal moments in politics, commerce, and culture often culminate unexpectedly. A revolution can upend established norms seemingly overnight, although the underlying tensions may have simmered for years or even decades.
In the early 1990s, Steve Rocco, an aspiring freestyle skater from Hermosa Beach, launched a significant challenge to the corporate skateboard industry. Operating on a shoestring budget fueled by high-risk loans from an investor named Kirby, Rocco swiftly disrupted the established skate companies, which had grown complacent and out of touch. Through a classic episode of Joseph Schumpeter’s “gale of creative destruction,” he transformed the industry and its culture.
The major skate brands, having thrived on vertical ramp skating in the late ’80s, had outgrown the next generation of skaters. To safeguard their investments in sponsored athletes—many of whom had fallen behind—they acted as gatekeepers, hindering new talent from entering the professional scene. Rocco’s innovative designs, tireless effort, and clever satire exposed the elitism that had crept into the industry. In time, the previous generation’s products became outdated, and their brands lost appeal, leading to a rapid decline in sales for the establishment.
Street skating, which became accessible to any kid with a skateboard, emerged as the leading edge of the sport, and Rocco’s company, World Industries, capitalized on this shift like no other.
By late 1998, Rocco and his five partners sold a 70 percent stake in World Industries to the private equity firm SPC for a valuation of $29 million. Rocco retired to Malibu before reaching the age of 40, while still holding a financial interest in the company.
The documentary, The Man Who Souled the World, explores his journey to success. In less than 90 minutes, it offers valuable entrepreneurship lessons that far surpass what any prestigious business school could impart.
But there’s more…
Independence Day in America Circa 2021
Rocco’s innovative overhaul of the skateboard industry paved the way for a broader array of passionate young skaters. Through partnerships and distribution agreements, World Industries opened the floodgates for new skater-owned companies, unleashing a tidal wave of energy, creativity, and youthful enthusiasm that transformed the industry in unpredictable ways.
Taking shape under a distribution agreement with World Industries, Plan B was founded by the late Mike Ternasky in 1991. His vision was to assemble a team of top talent dedicated to pushing the boundaries of skating. Skaters like Matt Hensley, Rodney Mullen, Danny Way, Colin McKay, Rick Howard, Mike Carroll, and Pat Duffy quickly elevated the sport beyond imagination.
Plan B skaters executed a series of mind-boggling tricks, exemplifying creativity and a daring, ‘go big or go home’ mentality. This ethos culminated on July 9, 2005, when Danny Way, after a harrowing fall the day prior, successfully completed a massive 360 air over the Great Wall of China.
It had been nearly 800 years since anyone had successfully breached the Great Wall.
But you might wonder, what does Steve Rocco, World Industries, or even this extraordinary skating history have to do with Independence Day?
In truth, it relates far more to the essence of American independence than merely consuming hot dogs and sipping beers at the beach.
Today, the U.S. economy, along with the global economy, is approaching a breaking point. You can sense it in the air; it’s palpable. Government officials are poised with their exhausted plans, waiting for the moment of maximum crisis to be implemented—economic patriotism, universal basic income, modern monetary theory, trade wars, curtailing currency value, travel restrictions, and increased governmental control threatening freedom and liberty.
Such plans will not rectify the looming challenges; instead, they will only amplify the existing tensions shaping our society.
Therefore, in the spirit of American freedom and independence, emulate Rocco. Create something new on your own terms.
A centralized authority might attempt to seize every dollar you earn, but with some luck, you could contribute to a “gale of creative destruction” that sweeps through the status quo like a powerful Midwestern tornado.
It may seem overly optimistic, but on Independence Day in America, circa 2021, it’s certainly worth pursuing.
Sincerely,
MN Gordon
for Economic Prism
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