The USA has always been a vibrant and successful nation because it has been a place where an inventor in a garage can build something new, start a company, and become wealthy.  Henry Ford, Steve Jobs, Bill Gates, and many others are all variations on this theme.  Unlike many places in the world, it is not necessary to pay bribes or get government permission to start a business.  Commerce is freely conducted, and the gains are yours to keep.  This is the American Dream, and is the “brass ring” of our economy.  It is a powerful force for good.

No longer.

Today, we have a different attitude toward the entrepreneur, and it is stifling the very innovation that has made us great.  The innovator is now considered a threat.

For every one of these revolutionary entrepreneurs, an industry died.  For Henry Ford, it was the industry that supported horses and carriages.  For Bill Gates, it was mainframe computer companies.  Every revolution has winners and losers.  We no longer need buggy whips, whale oil or blocks of ice delivered to our houses.  We don’t miss these things, and don’t want them back.  Those who used to be in these obsolete industries have had to find new occupations.  Such is life.  Revolutions are messy and disruptive, but we are all better off in the end.

Enter the politician.

Politics by nature protects the status quo.  Existing market participants hate revolutions.  Their reflex is to appeal to politicians to stop the revolution.  If the horse and buggy companies had been better organized and been able to, they would have shut down Henry Ford.  Bet on it.

One of these revolutions in technology and commerce is under way.  It is one of the many revolutions being made possible by “the internet”.  This one could make our current techniques – cash and plastic cards – obsolete, and improve the convenience and efficiency of our lives.  Everyone would win.

Click: Payments Innovation Strangled by Licensing

The mechanism of this revolution is the same as all other economic revolutions – the advantages of the new are so great that they out-compete existing vendors, attracting customers and driving the incumbents out of business.

That’s where the politicians come in.

Even before these entrepreneurs have gotten off the ground, the existing banks and payment processing businesses are appealing to the government to construct hurdles to discourage and stop their progress.  One excuse for this is undoubtedly “national security”, but you can be sure that those pushing hardest to erect barriers to these revolutionaries are those big banks who are making their money on transaction fees.

Note that the solution is not to give even more power to the federal government to regulate payments nationally.  The solution is to free the innovators of the nation from the tangle of red tape and regulation that has hobbled them in recent years.

There was a day when Henry Ford was the “most admired man in America”.  Today, we don’t admire the successful.  We tax them.  We wag our fingers at them for not giving away enough of their money, and we pass laws to ensure that no one else can do what they did.

If we are to be successful, to compete in a world economy, and survive as a nation, we must change this attitude.  The talented, driven, successful entrepreneur must be admired and supported again.  These people are, after all, one of our rarest and most precious resources.