How the hippies saved capitalism

My thought of the day: The hippies saved capitalism.

By "hippies" I am referring very loosely to the liberal, idealistic members of America's baby boom generation - the antiwar protesters, civil rights and women's right movements, rock music fans, cultural warriors, free thinkers, counterculturalists, etc. This generation, in its youth, held a fairly large reserve of anti-capitalist, anti-materialist sentiment. And, ironically, this generation saved capitalism - by being the ones to make capitalism finally live up to the idealistic free-market theories espoused in economics textooks. Here's my thoughts as to how (warning: rampant speculation ahead):

1. Emphasis on social equality involved large segments in the economy that were not involved before.
The main driver of economic growth, it is well known, is population. Also, involving more people in the economy allows greater competition from a wider talent pool. Thus, when baby boomers marched to get jobs for women and opportunity for racial minorities, they were moving large segments of the populace from unproductive backwaters - Jim Crow segregation or suburban kitchens - into the talent pool and into the workforce.
In contrast, take Japan, where there has been no real women's rights movement, and the female half of the population is still staggeringly underutilized.

2. Anti-government sentiment made the government more transparent and accountable.
As anyone who watched the recent Enron scandals unfold will know, the accountability and transparency of the government are key to allowing markets to function. Thus, when baby boomers demanded change from the back-room closed-door secrecy of the LBJ and Nixon days - and got it, in the form of campaign contribution limits, special counsels, etc. - they were paving the way for the present era, in which potentially dangerous collusion is often spotted before it can do serious damage.
Note the difference with Japan, where government-business collusion is still rampant, leading to massive inefficiencies that hamstring the economy.

3. "Make love not war" made globalization possible.
Before the mid-70s, war was good for business. The economy was based on manufacturing, which was to be protected by the government if necessary, and war stimulated industrial production. Then the baby boomers came and denounced war, and everything changed. The military-industrial complex remained, but in a shrunken, humbled form. The American people opposed war, so peace had to become good for business - America opened its markets and shifted to a more service- and knowledge-based economy. And it turns out, through globalization, that peace is much better for business than war ever was.
In Japan, which despite its "peace" constitution still thinks it's a wartime nation, this old way of thinking has not yet disappeared, making the Japanese much more reluctant to embrace the gains of globalization. People here still tell me that economic growth is driven by government spending on military industry - too bad Japan spends a ton and doesn't grow.

4. Anti-materialism forced companies to be more efficient.
Who needs a $100 Chanel necktie when a generic one will do? Conspicuous consumption may be lucrative for some companies, but my suspicion is that it's ultimately inefficient - slapping a "Chanel" label on neckties doesn't really give people anything new. If one country spends all its time producing designer goods that other countries don't care about, it will fall behind in real productivity-enhancing competitive sectors like IT. So when the baby boomers railed against materialism and conspicuous consumption, they were pushing American consumers to buy things that really made them happier - like computers.
In Japan, where materialism is a religion, they're still spending all their money on brand-name goods, and there isn't one leading software firm in the whole economy.

5. The emphasis on nonconformity and individualism gave rise to the modern American entrepreneur generation.
Bill Gates is a baby boomer; so are Steve Jobs, Jim Barksdale, Larry Ellison, and most of the other founders of the current IT industry. These people were iconoclasts, pariahs, and pioneers - basically, economic hippies. In the stuffy, buttoned-down atmosphere of the '50s, could such radical innovation be allowed, encouraged, and even revered? Note that it was in the extremely liberal regions of the West Coast, home to the biggest flowerings of the counterculture, that the IT revolution began and flourished - most of all in San Francisco, the heart of hippiedom. Now capitalism isn't run so much by "pigs in suits" as it's run by smart, free-thinking guys with blue jeans and uncombed hair.
In Japan, where nonconformity is a big no-no (especially in business), and wearing blue jeans will get anyone fired, no generation of super-entrepreneurs has yet to rear its head.

So there you go. Hippies --> greater individualism, creativity, peace, openness, transparency, and equality, and less brand-worship --> economic growth and efficiency --> the salvation...or maybe I should say the redemption...of modern capitalism. Who'da thunk.