There will someday no longer be a great stagnation
Farhad Manjoo has me convinced: Square is a really exciting company.
There are one of two ways to look at the digital revolution of the last few years. The first way is that it hasn't done much for the real economy. The major players like Apple and Google and Twitter and Facebook simply don't employ that many people. They've made a smaller number of people very, very, very rich. But the Internet hasn't been like the automobile, where the new industries meant jobs for millions upon millions of American workers.
The second way is that it hasn't done much for the real economy yet. But there are signs that that's changing. If you look at the much-hyped digital start-ups of the past few years, you're seeing more and more companies knitting the physical, brick-and-mortar economy into the digital revolution.
Groupon, for all its recent troubles, is a good example: They're using e-mail and social networks to get more people into local businesses. Uber, the app-based, on-demand limo service, is another fit: They're using iPhones to get people into physical cars driven by real drivers, leading to transactions that wouldn't have happened in their absence.
But none of these have been gamechangers. Square, a company led by Twitter co-founder Jack Dorsey, has the potential to be a gamechanger. It wants to do nothing less than change how we pay for everything. In doing so, it has the potential to vastly lower transaction costs for businesses that accept credit, and to significantly increase the number of transactions that happen, period. If it works, that could be a transformative advance.
Of course, that leaves open the question, will it work? Perhaps not. But something will. Eventually.