10 internautes sur 13 ont trouvé ce commentaire utile
Loyd E. Eskildson
- Publié sur Amazon.com
Mass flourishing, per Phelps, derives from broad involvement of people in the conception, development, and spread of new methods and products. Governments must reverse losses of prosperity through legislative and regulatory initiatives that boost innovation. His rationale is derived from the prosperity that arose in the 19th century Industrial Revolution, aided by the emancipation of women. Phelps also contends his interpretation is not the classic Schumpeterian focus on entrepreneurs jumping to obvious innovations suggested by scientists, rather driven by broader-based ideas from entrepreneurs and financiers. Traditional values - putting community and state over the individual, along with protection against unemployment, were so powerful that few modern economies made much headway in that manner.
Ancient Greece and Rome made some innovations - water mills, paved roads, bronze castings, and aqueducts, yet eight centuries after Aristotle brought only a dearth of innovation. The Renaissance then brought important discoveries in science and art, and brought riches to royalty. Yet, gains in overall economic knowledge was too meager to elevate the productivity and living standards of ordinary people. Those economies had not acquired institutions and attitudes that would enable and encourage attempts at innovation. Commerce did spread within each country and foreign trade also spread. By the 18th century, especially in Britain and Scotland, most people were producing goods for 'the market' rather than for their families. The heroic spirit, however, sought outlets in military ventures rather than big leaps in business.
Output/worker in England did not increase between 1500 and 1800, though population did increase enormously. Real wages in 1800 were higher than in 1300, but lower than 1200 - thus, it is safe to simply conclude England saw little wage progress from the Middle Ages through the Enlightenment. Output/person then began a sustained climb in 1815, tripling, along with real wages, in less than a century. Phelps, however, contends that advances in science could not have been the driving force, given that some nations advanced much faster than others.
Nearly all the inventors were not trained scientists, nor were they even particularly well educated - Arkwright (water-powered spinning frame) was a wig-maker, Hargreaves (water-powered spinning frame) was a humble weaver, Stephenson (steam-powered locomotive) was virtually illiterate. Watt (steam engine), an engineer, was the exception. These inventions were born out of perceptions of business needs or a sense of what businesses and consumers would like to have - even in the instance of the steam engine, Boulton, Watts' partner, demanded that it be widely useful. Thus, those economies brought ordinary people to flourish.
While the growth rate of productivity in an economy is no indicator of its own level of innovation (copy-cats can do quite well), with few exceptions, economies with productivity levels at or near the top owe that position to a high level of innovation. There also needs to be sufficient agricultural prosperity to allow savings, population linkages and trade to provide markets justifying large-scale production.
Socialism and corporatism (a hybrid approach combining private ownership with heavy labor representation and some management by the public sector) are seen as enemies of the modern economy. Today, CEOs emphasizing the short run, a 'congressional-banking complex,' and mutual funds also with short-term focus and lacking specialized knowledge about individual corporations have brought our deterioration in productivity growth, job creation, and business births. An explosion of regulations (eg. U.S. government suit against Boeing for opening a plant in a 'right-to-work state), grants (the Human Genome project?), loans, guarantees, taxes, deductions, carve-outs, and patent extensions now mainly serve vested interests and political clients.
This is all interesting, but ignores six major conflicting facts: 1)'Socialism with Chinese characteristics' has been beating American enterprises to a pulp for the last two decades. 2)It is hard for American innovation to widely benefit the economy when so many of its fruits are simply given to Mexico, China, and other nations to mass produce and refine - think Apple, flat-screen TVs, mobile phones, etc. 3)A further problem with outsourcing production from the U.S. is that the reduced involvement of skilled Americans makes innovation less likely. 4)U.S. government has played an important contributory role in further innovation - eg. funding the human genome project, development of the Internet, advances in military hardware, our interstate highways, drug company research, etc. 5)Inept and insufficient regulation was the primary factor that brought us the recent Great Recession, as well as allowing health care providers to create the world's most expensive health care system, by far, while largely ignoring about 15% of the population and providing often poor care to everyone. 6)Tax reductions in the Bush administration brought massive deficits, further boosted by Great Recession - also during that administration.
2 internautes sur 2 ont trouvé ce commentaire utile
- Publié sur Amazon.com
Harry Truman notoriously complained that "All my economists say, 'on the one hand ... on the other'" and demanded: "Give me a one-handed economist!". Well, here he is. The author presents a very passionate summation of views he has been developing over several decades as a prominent professor or economics at Columbia University, in the course of which career he was awarded the Nobel Prize for Economics in 2006. In two sentences, his thesis is that 1) differences in economic values between societies largely account for differences in productivity and growth; and 2) societies need to cultivate and perpetuate attitudes of dynamism and innovation for the great mass of their society to flourish, hence the title "Mass Flourishing".
The book is a blend of economic analysis and lessons found in certain of the great books of Western civilization. The economic analysis appears more in the first part of the book, although not exclusively. He then develops a three-part taxonomy of present-day economic perspectives: a modern, dynamic, innovative one that he is passionate about, and two that have grown up in reaction to the uncertainty posed by the modern approach: the failed Marxist-socialist one; and what he calls the "corporatist" one, by which he means economies in which large organizations of labor, capital and government all have developed over time to stultify innovation and dynamism. The author demonstrates how Western European societies in particular have stagnated economically due to a lack of dynamism and innovation, and contrasts that, of course with the US's relatively greater successes in those respects.
After laying out the failings of the alternative models, he seeks to develop an intellectual defense of the "modern" economy as "good and just" (I note he conspicuously tries to avoid using the word "capitalism" to define such an economy; I am not sure why). Columbia University where the author has taught most of his career is famous for its "core curriculum" in which undergraduates spend several semesters reading from the canon of Western civilization, in both the humanities, in political and social philosophy, and art and music. I can imagine Professor Phelps must have taught some of those courses at times as the book is steeped in references to many of those works. Just in the A-C portion of the index, I see references to Aristotle, Austen, Bach, Balanchine, Balzac, Leonard Bernstein, Lord Byron, William Blake, the Brontes, Cellini, Cervantes, Cezanne and Voltaire's Candide. Historians of political thought like Toynbee, Polanyi, Popper and Spengler are referenced. From the realm of economics, the thought of Adam Smith, of course, Hayek, Schumpeter and Marx are discussed, as are more modern figures like Gary Becker, Jared Diamond, Robert Gordon, Walt Rostow, Amartaya Sen and Luigi Zingales. For some reason, he does not mention Douglas North, although his focus on institutions and values is very much in the same camp as North.
But the greatest intellectual link Phelps establishes is to the work of John Rawls, with whom he apparently shared an appointment or grant at Berkeley back in the late 60's when Rawls was writing "A Theory of Justice". The last third of the book is an attempt to place the author's vision of the market economy in the context of Rawls' philosophy of "justice as fairness". I have always been a skeptic of "A Theory of Justice" which, in my view, depends for its foundation on a series of "make-believe" propositions that I reject as a proud member of the "reality-based community". Phelps focuses more on the later restatement of Rawls' philosophy, Justice as Fairness, which is meaningfully different from the earlier work.
Phelps is a proponent of some kind of wage subsidy being extended to employers of lower-paid workers and argues this is consistent with Rawls' redistributive principles. He draws out of Rawls an under-recognized endorsement of the market economy and of economic growth and efficiency. As well, he emphasizes Rawls' very insightful and timely dictum that people who want "to surf at Malibu all day", and thereby drop out of the collective effort to make the economy as large as possible have no just claim to receive any redistribution of the fruits of the economy.
Of course, that brings up, or ought to, the role of the welfare state in relation to the loss of dynamism / stagnation of modern Western economies . Most unfortunately, Phelps's passion seems to abandon him and he dodges the topic altogether, which is a glaring flaw in his theorizing. What does he believe about, for example, Social Security which draws people out of the labor force, albeit people who may be less likely to innovate and take risks than new entrants? When President Obama asserts that such programs "make us free" to pursue economic growth, as he did in his second inaugural, that kind of claim deserves to be examined, but is not. When CBO estimates that the subsidies under the Affordable Care Act will induce the equivalent of 2.5 million full-time equivalents to drop out of the workforce, although it came after the book was published, what would an advocate of greater dynamism say? Phelps should have spoken to the welfare state directly. I guess that is how he avoids being a two-handed economist.
Additionally, his prescriptions for increasing dynamism are extremely vague and ivory tower-y and in the case of his call for states to fund venture capital banks, absurdly at odds with his prior criticism of government - business "corporatism" and apparently blind to the soft corruption and value dissipation that such a politiciz-able honeypot would be prone to engender (see Solyndra, for instance).
Ultimately, it is an intellectually impressive summation of many strands of thought in Western civilization, and a fair critique of the shortcomings of the present-day bureaucratic Western state, but as I see so often in books on public policy, it is much weaker when it comes to the specifics of the implied solutions.
17 internautes sur 24 ont trouvé ce commentaire utile
Ira E. Stoll
- Publié sur Amazon.com
Professor Phelps divides economies into three categories -- modern capitalist, socialist, and corporatist. He argues that the modern capitalist variety is superior to both the socialist and corporatist variety, both by the measure of promoting labor force participation and by the measure of reported job satisfaction and life satisfaction.
So far, so good. Even if, as Professor Phelps writes, "over the years, more and more in the general public came to be persuaded by the arguments of Mises and Hayek against the socialist economy," it can only help to have the arguments restated anew, and supplemented, by an economist with the stature of Professor Phelps, a Nobel laureate who teaches at Columbia.
Things get even more interesting when Professor Phelps tries to trace what he sees as a decline in modern capitalism beginning as early as the mid-1960s and continuing through the present day. One suspect is what the author calls the "new corporatism": "Regulations of industries are instituted, aimed at shielding companies or workforces from competition. ...Shakedowns of companies by communities, nonprofits, or governments extract donations or other accommodations....The new corporatist economy, then, is pervaded by fears of holdups by the government, by stakeholders, by organized labor, and by an ocean of persons and companies ready to litigate."
Professor Phelps decries the influence of what he calls a culture of entitlement. "Many academics, once researchers endlessly testing ideas, now rate themselves so highly that they pontificate with no research at all," he writes (take that, Professor Krugman). "The growing sense of entitlement helps explain the ever-rising outlays for the safety net, which, in artificially raising economic independence beyond what people's private wealth would provide, makes it harder to obtain employee loyalty and employee engagement. The attitude of entitlement can only make it harder for a start-up firm to obtain employees who take the initiative, give a hand to others, and lend the concentration and judgment on which success importantly depends."
The author is on thinner ice, in my view, when he asserts that "wealth competes with innovation seeking." He writes that, "given the monetary rewards, more and more able and talented young people chose to go into the financial sector, rather than into the business sector." He writes, "few would deny that lives or earning and wealth accumulation do not offer the gratification and pride that lives of creation and innovation offer." But that is a false dichotomy. Which sector, "financial" or "business," is Warren Buffett in? Which sector is a partner in a Silicon Valley venture capital firm in? At the very very top, anyway, the monetary rewards are richer for technology entrepreneurs than for investment bankers.
Also unconvincing, in my view, is Professor Phelps's claim that "the resurgence of family values" has "drained companies of some of their innovative spirit." And his claim that "more and more people accept the positions taken by their political party or religion or friends rather than working out their own positions. It would be surprising if this conformity did not weigh on innovation in the business economy." If anything data show that since the 1960s in the United States political party affiliations have eroded, and independent thinking and individual choice in both politics and religion is on the rise.
As for the author's claim that "family values" are somehow at odds with commercial success or economic growth, the best counterargument is his own acknowledgements section, the first sentence of which counts among his "many advantages" in his career his "parents" and "a happy marriage with my wife Viviana."