Mass flourishing: How it was won, and then lost

By Edmund Phelps
August 16, 2013

This essay is adapted from Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change, published this month by Princeton University Press.

The epic story of the West is the development in the 19th century of a mass prosperity the world had never seen and its near-disappearance in one nation after another in the 20th. Mass Flourishing is a history linking this story to the rise and fall of homegrown innovation. It is also a text on the nature and sources of prosperity. It has two components. The material part is growth of productivity and wages. The non-material part is flourishing – successful exercise of creativity and talents. To flourish, people have to engage a world of challenges and opportunities. The economy’s dynamism and the resulting experience of business life are central to our well-being.

Mass prosperity came with the mass innovation that sprung up in 1815 in Britain, soon after in America and later in Germany and France: It brought sustained growth to these nations — also to nations with entrepreneurs willing and able to copy the innovations. It also brought flourishing to large and increasing numbers of people — mass flourishing. There were experiential benefits: Routine work, dull and lonely, gave way to careers that took twists and turns and jobs that were rewarding. There were also developmental benefits: As people used their imagination to create new things and their ingenuity to meet challenges, they found self-expression, self-realization and personal growth in the process.

What brought mass innovation to a nation was not scientific advances, its own or others’, but economic dynamism: the desire and the space to innovate. The nation had to cultivate the right drives, build the needed institutions and not throw up barriers. High dynamism brought a high rate of innovation under decent market conditions, and, barring a string of bad luck, with the ideas it conceived and tried out. America enjoyed the richest flow of innovations in part because working people in all kinds of jobs were conceiving and pursuing new ideas – grassroots dynamism. From the 1830s to the early 1960s Americans were in a frenzy of creating, tinkering, exploring and testing – gripped by a “rage for the new” in Lincoln’s phrase.

The impetus for high dynamism, I argue, was the modern values arising in Jacques Barzun’s Modern Era — roughly from 1490 to 1940 — particularly the values we associate with individualism and vitalism. They include thinking for oneself, working for oneself, competing with others, overcoming obstacles, experimenting and making a mark. The courage to express one’s self by creating or exploring the unknown and the gumption to stand apart from community, family and friends are also modern values. These values stirred a desire to flourish; they shaped a modern conception of the life to aim for — the good life. A prevalence of these values in a nation tends to generate an economy that offers work gratifying those desires — an economy that delivers flourishing.

The thesis can be tested. A measure of a nation’s flourishing is the reported job satisfaction in household surveys. Interviewee responses to questions about what they look for in a job suggest a measure of the prevalence of modern values. If the thesis is right, we should expect that a people embracing modern values will forge careers and seek jobs that are interesting, involve initiative, offer change and present challenges such as competition. And indeed, nations scoring high in these modern attitudes do tend to score high in job satisfaction: They build economies with the dynamism to deliver the jobs that satisfy them.

This finding suggests that people get the institutions that enable the careers and jobs they want — to a degree, at any rate, and getting them may take a long time. Institutions and government have a role, even if they explain little when attitudes are taken into account. Modern values, if strong, ensure there will be a popular demand for the individual rights that make it possible to innovate and to earn a living in innovative ventures.

In the high noon of the Modern Era, some nations where values were prevailingly modern went from mercantile economies to modern economies – the first economies of dynamism. They helped large and growing numbers pursue the good life.

***

The once-dynamic nations lost half or more of their dynamism in the 20th century: Britain and Germany in the ‘40s, France in the early ‘60s and America around 1970.  A great loss of jobs and job satisfaction ensued. Innovation was largely narrowed to the impressive “tech” industries.

The resulting dearth of indigenous innovation — unremitting save for the Internet build-out — is widely blamed on pathologies in policymaking and institutions. Historians have laid Britain’s decline to rationalization, cartelization and the closed shop — policies sustaining old products and impeding new ones. In France and Italy, entrepreneurs lay the decline to fiscal and regulatory practices — policies discouraging small firms from innovating by imposing tougher employment rules and heavier tax rates if they become medium-size. In America, the success of firms and whole industries hinges on intensive lobbying rather than intensive innovation. In America and Europe, much of a legislature’s focus is on sparing politically favored corporations and cities from the impact of its own legislation and singling them out for pork barrel projects, assistance and loans.

But much of those declines of dynamism are an effect of other forces, not the rise of rent-seeking and patronage. There are many institutions and policies that block innovation — short-termism in big business and finance, for example, under-taxation that has given working-age people inflated perceptions of their wealth and, of course, the minefield of patents and regulatory risks. These are important.

A change in values may be no less important, however. Possibly modern values have waned, reducing the desire to innovate. Or other values have arisen that inhibit or block modern desires. Even rent-seeking and patronage is not simply an effect of self-interest in government and the economy: What is in people’s self-interest depends on what people are interested in doing with their lives — on their various values.

The heavy loss of dynamism in the West can be laid to two destructive tendencies that have crept into value systems. The first of these is the attitudes hostile to the methods of the modern economy. In continental Europe, of course, there was opposition to capitalism long before modern times. And since the economies of dynamism were built on capitalist institutions created in the course of mercantile capitalism, the attacks on capitalist institutions had the unintended and perhaps unanticipated effect of weakening dynamism. The Continent’s once-dynamic nations, then, had only a tenuous hold on dynamism from the start.

Socialists’ attitudes were influential on the Continent by the 1910s. They had a horror of company profits and sought to nationalize some companies or curb their profits or redistribute them from shareowners to stakeholders. In the interwar years the belief arose that it was wrong for a company to downsize its workforce if it was making a profit. Schoolbooks in postwar France and Germany disparaged capitalists and reviled bosses as stooges. Such hostility scared off innovators and tarnished the idea of innovating.

Corporatist attitudes against capitalism came to the fore in the 1920s. Corporatists, with their conservative values, hated the invasion of towns and regions by new businesses, upsetting traditional ways, wealth and status. They hated new money with a particular vehemence. Their objective in Italy, Germany and eventually France was control of private enterprise — not private ownership. An axiom of capitalism — that capital should go where entrepreneurs and financiers expect it to be profitable — was replaced by the corporatist tenet that the state would know better.

Corporatists also hated the individualism present in modern values. For them, the good was the good of the nation. People who would have tried to be innovators for the thrill, fame, fortune or fun of it did not fit in. That dynamism would suffer from these conservative values did not occur to the corporatists, who thought their system would increase dynamism.

Europe in the 1960s and America soon after became devoted to a kindred set of traditional values: solidarity, social protection and security. These values gave rise to a vast canvas of entitlements. No disincentive to work would have resulted had they been fully funded, but they were generally under-funded. The reductions in labor force and output at home and abroad shrank the available market for innovations. These values also gave rise to thickets of regulation impeding or barring innovation.

Is there any hard evidence that these values harm dynamism, making jobs less satisfying? My statistical research finds that a prevalence of modern values is conducive to job satisfaction. What of a prevalence of the conservative and traditional values? A basic level of these values may be a safety net, encouraging some innovation. However, nations scoring high in traditional values tended to score low on job satisfaction. (Israel provides an interesting potential counterexample: dynamism despite deep traditions; it may be the case that most Israelis are not tightly confined by the latter.)

The second destructive tendency is a movement away from the modern notion of the good life — the notion glimpsed by Aristotle and given shape in the Modern Era – and toward a reversion to materialism, however well-intended. Increasingly American attitudes exhibit the same drift away from the creation and discovery of the new, which Lincoln exclaimed over in the 1860s. Students go into banking, not business. A fixation on making money was widely noted in the 1920s. Now it has become a widespread sickness. Under-saving has become self-destructive. Materialism has turned into greed. A survey of the financial community by a New York law firm found that 38 percent of respondents said they would commit insider trading for 10 million dollars if it could not be detected.

It is thought by many Americans and Europeans that the modernist conception of the good life is specific to America. After I spoke of people’s need for that sort of life at a 2003 conference, Ralph Gomory, a mathematician, ex-executive and current President of the Sloan Foundation, said: “that view is very American.” I replied that my understanding of the good life came from Europeans: Cellini, Cervantes and Bergson.

Serious thinkers in both Europe and America, though not exactly materialist, have drawn away from the modern conception of the good life, hence the good economy. In the 1920s John Dewey saw a good job as a mental workout offering problem-solving – not a springboard for exercising creativity and voyaging into the unknown. In 1943 Abraham Maslow wrote of self-actualization by which he meant the realization of a person’s predetermined potential — not Bergsonian “becoming.” Amartya Sen’s capabilities is in this spirit.

Now we find a full embrace of materialist thinking even at a high level. The 2009 Report of the Commission on the Measurement of Economic Performance and Social Progress, while devaluing one materialist measure, namely production, upholds other measures of material well-being — household wealth and income, time away from work, and longevity. They include nothing on non-material experience.

These formulations overlook the world of creation, exploration and personal growth. Gone is the conception of the good life as a wild ride through an economy with an open future, an economy offering challenges with unimagined rewards. In this climate, young people are not likely to grow up conceiving the good life as a life of Kierkegaardian mystery, Nietzschean challenge and Bergsonian becoming. My research in the past 10 years leads me to believe that regaining mass flourishing will require a new and major public effort. While the government will have to be smaller in some respects, it will have to be bigger in others. The effort will necessitate large subsidies aimed at employing low wage labor. But mechanical corrections and repairs will not be remotely sufficient. The effort will succeed only with a broad restoration of grassroots dynamism. That will require clearing away the barriers to innovation that have grown up in recent decades. Above all, it will require Europe and America to reconquer the medieval demons that regained influence over the past century and to reaffirm the individualist and vitalist values that were fundamental to the dynamism of the West’s brilliant past.

18 comments

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“Corporatists also hated the individualism present in modern values. For them, the good was the good of the nation. People who would have tried to be innovators for the thrill, fame, fortune or fun of it did not fit in. That dynamism would suffer from these conservative values did not occur to the corporatists, who thought their system would increase dynamism.”

A perfect LIVING example of this today is HOLLYWOOD.

Consumers are being “treated” to the same old story lines, ACTION and general tried and true PISHWA.

just think soon you’ll have to pay $25 -$75 for a DIGITAL movie theatre TICKET only to be bombarded with ad’s before the show, talking viewers during the show and Cell phones going off while “watching a POORLY developed story lines acted out by Actors being UPSTAGED by EFFECTS and Loud Noises on screen and off !!!

Hollywood’s NEXT move is probably implosion. !!!

Excellent article Edmund.

People/industries ONLY change when their FORCED to change ( by some event like a war for example or other mass event).

America May someday WAKE up, but until then all bets are OFF.

oh!… and don’t go off INVENTING some new GREAT widget or product. the R&D Dept. of you local CORP will not even let you open your mouth about it. their attitude is: “Unless WE invented it” it’s no good !!!

Posted by Pangaea7 | Report as abusive

Mr. Phelps,

At last, someone with academic credentials that “gets it”!

Back before 1950 in the fourth grade I had a teacher, a Mrs. Brombeau. The single thing that stuck in my mind about her, after showing us a short “current events” movie of the eruption of a volcano in Mexico was her description of students in that country demonstrating and protesting as a good thing and the almost universal passivity of students in the U.S. as a bad thing.

It was much later I would perceive with the clarity of hindsight she was placing the maggots of socialism or communism whenever and wherever possible. The Nazis early on successfully seduced and indoctrinated young Germans in their “Hitler Youth” programs.

I am thus not surprised that many Americans today of sufficient age and experience to know better genuinely believe “the enemy of the American middle class” to be corporations. Perhaps even a majority honestly believe “profit” to be suspect if not inherently an anti-social concept.

They seem utterly ignorant that a corporation is but one of many forms of doing business. If we substitute the word “commerce” for “doing business”, most could then understand commerce to the single engine of prosperity and distribution throughout the world’s significant societies regardless of how leaders are chosen.

To bring us back to what you have said here, I would define Capitalism as the “engine of prosperity”. Why? Because of all the economic systems man has thus far experimented with that merely divide an economic pie of fixed size, only Capitalism provides the incentive and means by which individual efforts “grow the pie”.

But if our “engine” is our horse, like a horse there must be a harness with which it’s energy can be most productively directed, and that role must be filled by our government. Unfortunately, our government has created a harness that turns the horse the wrong way and covers it’s eyes.

As our society has matured and become more prosperous, there has emerged four classes of Americans whose interests are hopelessly in fundamental conflict. First, there are your “greedy materialists”, which the Occupy Wall Street mind set term the “1%”. Second, there are the “ordinary Americans” who go about their business as students, workers, employers, parents, purchasers of stock, cars, houses, etc., each doing their best to achieve the best measure of success possible.

Third are American retirees. The “‘1%” never retire, for their “work” is not physical, and they only cease their economic activity when they die. “Ordinary Americans” since the end of the Great Depression “wear out” or otherwise leave the work force around age 65, some involuntarily at an earlier age. An “economic bargain” was struck at the end of the Great Depression that our government would set up and administer a “Social Security” program that would assure most at least a dignified existence between the time they no longer work and when they die.

But our government lacks the brain to prioritize, to bring about consensus as to what must be done (needs) versus what can be done (wants). Union bureaucrats judge their success by the size of each agency and the number employed, without regard to necessity or efficiency of function. Inevitably action and inaction is a matter of their interests versus those of “we, the people”; and most are functionally unaccountable to taxpayers.

Those perhaps thinking with their heart and not their head have since created additional “social entitlements” such as Unemployment compensation, Medicare, Medicare Part D and Social Security Disability. Those on the bottom of our economic society were not forgotten. They got Welfare, Food Stamps (SNAP), Medicaid, the Earned Income Credit. Over the years Social Security Disability has been misused and abused, as have Medicare Pt. D “luxury” options (for the well off). Medicare is riddled with fraud and waste, as is Medicare Pt. D and SNAP.

Fourth is a growing underclass with little or no education, skills, ambition or productive place in our society. This is an entirely new and growing economic cancer that is as sticks in our spokes, or an anchor than saps our ability to move forward aand cannot be lost or hauled up.

These today receive their subsidy without contributing either their presence or sweat. By what magical means do you propose they provide “low wage labor”?. When their numbers reach a certain level “other Americans” will not be able to sustainably support them at a standard of living that will keep them off the streets and our of our homes.

Since these people are already born and wandering around at loose ends, I see no socially acceptable means by which eventual class warfare and anarchy can be avoided. Any question is now merely one of when.

Posted by OneOfTheSheep | Report as abusive

This cannot be done without another revolution in Science.
Despite billions spent on science, the output since the 1960s is very insignificant. Especially, in fundamental sciences.
We have the same binary computing; the same energy production and conservation, etc.
It is a socio-political issue only in part.
Another part is the Crisis of the Contemporary Science.

Posted by OUTPOST2012.NET | Report as abusive

“The once-dynamic nations lost half or more of their dynamism in the 20th century: Britain and Germany in the ’40s, France in the early ’60s and America around 1970. A great loss of jobs and job satisfaction ensued. Innovation was largely narrowed to the impressive “tech” industries.”

In the ’40s, Britain and Germany were locked into what became an existential conflict. In the ’60s, France was fighting a war to keep what used to be the department of Algeria (sort of like the United States in a war to keep Alaska), and it was around 1970s the U.S. was entering the peak of the conflict in Vietnam. Today, the U.S. and many of its allies are involved in what used to be called the war on terror, which, despite the corniness of the name, is increasingly looking like a real war that will not be resolved for a decade or two from today. Maybe what really happens is that war is bad for the middle class.

Posted by Bob9999 | Report as abusive

@OUTPOST2012.NET,

“Despite billions spent on science, the output since the 1960s is very insignificant.” If we define “output” as changes which exit a system and which activate or modify a process, your words suggest an academic gazing at the lint in their navel…utterly isolated from reality and unrepresentative of the relatively knowledgeable discussions on the web site you use for identification.

It is generally accepted that we get roughly 80% of that possible from the first 20% of knowledge, investment, discovery, change, effect. From there on you are chasing ever more expensive, incremental “progress”. All is not known about the “fundamental sciences”, but a great deal is. Today there exist specialties utterly unforeseen in the 1960s.

Society funds “science” to improve life. The U.S. has orbited astronauts, sent them to the moon and back, and sent multiple research probes 154 million miles away to Mars, including the currently active one-ton car-sized rover with a 2-year mission to dig, sample, photograph and analize that environment. We have supplied the lion’s share of funds, hardware, and manpower to orbit, assemble and maintain the international space station.

Spin-offs of these efforts include ultralight yet tough plastics, glass, metals and fabrics. We now have the gamma knife, the heart pump, prostate and breast cancer screening and we have sequenced the human genome.

Robotics today automate tedious research, design and construction of increasingly complex computers and software. Robotic surgery allows precision and quicker recovery never before possible. We replace organs, joints and are growing replacement human body parts in the lab.

In the hands of ordinary citizens are extremely capable personal computers, cell and “smart” phones, computing tablets, ink jet and laser printers, ATMs and Global Positioning Systems. The U.S. remittance transfers today sent around the world total between 50 and 100 Billion annually.

Today’s first generation 3D printers have the potential to revolutionize design, production and maintenance of existing and future technology. What part of flourishing and the potential for future flourishing do you not understand?

Posted by OneOfTheSheep | Report as abusive

@outpost2012

And crisis in science is pattern in ying-yang symbol of stagnation – we discovered no new more high-value energy sources to exloit thus all we do is basically optimize usage of existing ones. And optimization brings certain mindset in funding of science.

BTW if one take graphs of british coal production, suddenly they will show GREAT correlation to nation’s influence and wealth.
Ironically, in XVIII-XIX centuries due to coal export UK was energy superpower of the world, title it finally began to lose just after WWI (mostly due to other countries making security arrangements).

Posted by chyron | Report as abusive

@OneOfTheSheep

The state of the contemporary science is a hard issue to discuss. That’s why I didn’t raise it at our forum. Yet. People tend to confuse the achievements of applied sciences with fundamental science.

All “breakthroughs” you mentioned had been stipulated (and limited) by the epoch which ended in the 1960s. Propulsion system; aviation; computing; medical industry, GPS, ATM and cell phones.

I was not saying nothing changed within the last 40-50 years. It’s all about the pace.

I see two aspects here:
1. The scientific exploration is not a linear process; I can stall, resume going. Sometimes it makes a jump. We, as a civilization, can keep trying to influence this pace. And in our trying itself is the whole point.
2. At the same time, I see the corrupted ethics of the modern science. The most talented individuals have been fighting for grants and funds. Competition in the science used to be a normalcy. However, these days something is flawed. Science turned into an industry integrated into the present socio-economic model. It has its own interests, its own PR and other “function” which serve the interests of a comparative wide stratum. As a result, we have Y2K problem, or ozone layer hole problem, and many other “dramas.” No wonder that the credibility of the scientific community is as low as never before. What we perfectly observe in the discussions reg. the global warming.

Posted by OUTPOST2012.NET | Report as abusive

@chyron

Yeah. The energy is a perfect example. Sometimes it makes me simply amazed. The first nuclear station was built in Obninsk, Russia, in 1954. It’s about 80 km from the place I live.
The nuclear energy is used to boil water. And water steam is used to revolve the turbines. Great achievement… for 1954. Anything changed? Nothing. I hope the coefficient of useful action is slightly higher today.
I am not saying about the issues of energy transportation and energy conservation. Today’s’ li-ion batteries make me cry and laugh!

Posted by OUTPOST2012.NET | Report as abusive

@outpost2012.net
You slightly misunderstood – country which finds new common high-EROI energy source suddenly gets two advantages – first is energy source itself, second is spurt of innovations as usage of this energy is terra incognita( due to _both_ newly available resources and incentive to explore ‘em ). For.ex. England – it lacked wood to produce charcoal for metal industry, so they seek alternative and found coal. Basically all Industrial Revolution was search for new uses of coal. Second wave was discovery of liquid fuels, third was nuclear.

BTW, nuclear energy has not exceptionaly high EROI compared to oil, gas and coal. If not for NUKES and industry created for them, i think it would be much less used than currently it is, and it’s share in total energy balance still would mostly belong to coal.

Posted by chyron | Report as abusive

@outpost2012/Nicholai,

Can we define “contemporary science” as “that which is perceived by those in each field as demonstrably true”? That would tempt me to believe that the last three thousand years engineering, mathematics, chemistry, geology, etc. might have revealed to man perhaps 80% of that which our present mental capacity can comprehend.

It was, as has often been the case, the pressure cooker of wartime needs and concerns prompted governments to fund massive collective efforts that yielded atomic energy, radar, the advanced the use of rockets (from mere amusement or a military nuisance) to serious application in opening up the potential of “space, the final frontier”, and the superiority of jet propulsion in practical aviation application.

Certainly our collective awareness and knowledge has advanced sufficiently far that only the rare “Einstein” individual is likely to achieve the “next great leap” in, say, energy storage, or new discoveries which will have the effect of making our consumption of more and more energy both cheap and sustainable. If you bemoan the indisputable fact that neither of these most important “goals” are being furthered as “government priorities”, few would argue. There is the age old question…”What’s in it for them”?

There is considerable effort being expended in these areas by private enterprise. It has thus far proven much like drilling “wildcat” oil wells. Solar is essentially free and renewable, but the cost, efficiency, maintenance and longevity of necessary panels has yet to come together so as to make economic sense. The same is thus far true of “new” battery technology and “new” energy sources from fusion (hot or cold), hydrogen, etc.

I think that governments are going to influence the redundancy, reliability and flexibility of electrical grids and pipeline installations via regulation with consumers, as usual, paying the costs of same. The “scientific community” is increasingly separating into two groups. There are the academics paid to ponder abstract ideas and “publish” them for wider consideration and there are the “hands on” people working in private enterprise and on their own who strive to translate such abstractions into additional knowledge with practical and commercial application.

The use of “nuclear energy to boil water to create steam” was not, as you say, not a great intellectual leap. But related advances in metallurgy and system fabrication and safety redundancies necessary to harness nuclear energy to safe and practical use have proven worthy technological challenges. They have made the true submarine possible and modern nuclear powered aircraft carriers have changed geopolitical realities. The untapped potential will remain an area of research and experimentation for the foreseeable future.

I don’t think it intellectually honest to chronologically separate, as you suggest, revolutions in the “fundamental sciences” and the inevitable and ongoing practical applications of same. In western society this is not “corrupted ethics” but an entirely natural and normal process. Man would have more than enough to do for the next two centuries in pursuing the possibilities of just that of which are presently aware if there were NO further “revolution in science. But there will be, though we know not when, where, what or by whom.

Yes, “We have the same binary computing…”; but today that potential is in active use by every individual or relatively modest means. As a result an ever-expanding internet offers everyone, without charge, more and better information on every subject imaginable that could the fabled oricles of classic antiquity.

Medical knowledge is expanding at a rate so fast as to be unmeasurable. As a result the first person to live to a thousand may already have been born.

If man’s body ultimately prove unable to withstand the lack of gravity and radiation of space travel, then it will be our individual immortal consciousness that is sent forth to explore the universe.

Ironically it is man himself that is his own “wild card”. There will remain for the foreseeable future the undeniable possibility that one idiot with far, far too much power will throw a hissy fit and destroy all life on this planet simply because others will not submit to political blackmail or intimidation and accede to his unilateral rule. The boundless ego with which man is fundamentally afflicted may yet bring about his own utter and complete destruction.

Posted by OneOfTheSheep | Report as abusive

@ OneOfTheSheep:

I find your opinion very reasonable. So we can agree that scientific and technological progress can exist in various phases: revolutionary breakthroughs; steady and evolutionary progress; some sort of a stall.

If we accept this assumption, we should also agree that the scientific/technological progress has many similarities with the social/political progress.

Basically, that is what the author says. He is trying to connect various kinds of progress; to support his cause by history references (this appears to be the weakest part); and to make some suggestions.

The essay published here is somewhat inconsistent, in my view. However, one should read the book for making any conclusions.

Posted by OUTPOST2012.NET | Report as abusive

@OneOfTheSheep & chyron

And you are welcome to visit or join our international forum, gentlemen. I got completely exhausted by never-ending Middle East discussions. There are five or seven of them running at the same time.

Well, the economy and inequality threads are also exhausting, to be honest with you.

Posted by OUTPOST2012.NET | Report as abusive

Interestingly, this discussion treats innovation and innovators as being dependent on grassroots culture independent of controlling institutions. This seems rather different from the usual history concerning the role of government and quasi-governmental institutions and their conflicts with one another. This is thought provoking.

Unfortunately, innovation has never been associated with a strong central government of any sort. Government is, as the very term implies, about control. And control is very seldom compatible with the new, the different, the non-conforming. In short, it is not compatible with controlling institutions, and has never been, anywhere at any time. So there is indeed value in study of the interaction of innovation and controlling institutions.

Perhaps innovation thrives only when it, and the innovators who attempt it, is not crushed by forces which are simply delighted with the current status quo. After all, one of the forms of innovation is the removal of such obstructing institutions and individuals called “revolution”. This is “the new” writ large. In this sense I think Phelps is absolutely right. Innovation must be “grassroots” or it will not be generally beneficial.

Unfortunately the timeline is simply incorrect. In the USA there has been more innovation since 1960 than before that date. That innovation has to do with the spread of decentralized technology, which has been a severe threat to existing institutions. Such institutions currently are attempting to re-centralize their control over innovations created with technology as well as the technology itself. “The Cloud”. Whether this attempt at control will be successful or not is not yet clear.

Statistics concerning the number of people imprisoned inside the USA are certainly not encouraging. The Government sees a great many of its own people as a threat and behaves in too many ways as if it were the Spanish Catholic Church purifying evil through the Inquisition. This is certainly not conducive to anything new at all other than Police methods and applications of control technology, such as found at the US NSA police center. Control, control, control. This is the lifeblood of every Empire ever to dominate man. Empire is the enemy of constructive innovation, not the friend.

Posted by usagadfly | Report as abusive

@usagadfly,

I think you reach wayyy too far when you try to link “…the number of people imprisoned inside the USA…” with innovation and flourishing. The inconvenient truth is that our exploding underclass is very much a threat…that of the uncivil against the civil, sociopaths who prey upon “polite society” when free to do so.

We need to separate these people from functional society because they are as sticks in our spokes when out among us. Their every effect is adverse. Any innovation that takes place inside our prisons is seldom beneficial to those outside.

Those of us who keep our work and archives on our own private hard disks and media are independent of “the Cloud”. The “bad news” is that the current pervasive monitoring by Big Brother/Big Government of everything anyone does on the web, social sites, email, etc. is fast approaching total access to our very thoughts. The good news is that they don’t dare mess with it much or they may “break it” and there is far, far more chaff than wheat.

Union bureaucrats are terrible at “reading tea leaves”, picking and developing the “next big thing”, etc. That means they are utterly dependent on innovators of the private sector to keep commerce in forward and upward motion because that is the golden goose from which their tax revenue must be plucked, and they know it.

In these United States, innovation has pretty consistently been a matter of “lead, follow or get out of the way!” The real dangers to innovation are inappropriately long copyrights and overly broad patents, each in their own way stifling innovation, the free flow of ideas and the ongoing incremental evolution of concepts and technology.

Posted by OneOfTheSheep | Report as abusive

I think “necessity is the mother of innovation” is quite true. Recently the world’s population exploded and much more innovation has been needed. I don’t think that’s over yet. Societies that feel themselves to be free, or happy tend to innovate with less necessity. I think that also happened in the USCA and Europe over the last hundred years, causing more complexity, adding more necessity. Then there is also the perception of flourishing. Each generation I think tends to believe that they flourished, and that the successive generations are not, or not in the right way. I believe the world and humanity have truly begun a new era. There will be much more “mass flourishing” in the near future. Warfare has finally begun to decline and mass communication is brings all peoples together. By the end of the 21st century the world will be far better than anything dreamed of by the 2oth century. Barring unforeseen catastrophes (pandemics and the like) of course.

Posted by tmc | Report as abusive

oops, bad quote, I meant “necessity is the mother of invention”

Posted by tmc | Report as abusive

I think it’s beneficial to have this conversation, but I think we need to be fair about some of the words that are being used and misused. If we limit our historical analysis to the last 3 decades a few things have happened:

1. the word “entrepreneur” has been diluted to almost meaningless status. 30 years ago an entrepreneur (French for “undertaker”) saw an opportunity because of an existing demand that wasn’t being met. That entrepreneur would then “invent” a solution. It wasn’t innovation, it was invention. Today, any startup is considered entrepreneurial when they are simply innovating (incremental) and generally speaking they don’t create any NEW jobs, they simply replace jobs lost by the losing competitor. It gets worse – buy a franchise and you’re an entrepreneur. Many of the activities we refer to as entrepreneurial are simply small business and they too, will displace jobs, not create any. Competition determines that.

2. Job creation is not something the government of business does, only DEMAND can create a job – A) aggregate demand, B) unmet demand or C) lost demand. Aggregate demand takes care of itself. Unmet demand should be our collective target and lost demand may lost forever (electronics).

3. Innovation is primarily handled by committees or groups. It is generally risk averse and simply seeks an small advantage of another product or service. Certainly corporations lead in this regard. In 30 years we’ve settled for innovation and forgot about invention. Invention allowed America to change industries and capture unmet demand. Generally speaking invention comes from inventors, a group we mock on reality shows and fail miserably at giving them assistance. Their ideas and solutions are “too big” and dismissed without any fair, objective review. Part of this stems from our becoming a society of “experts” carving out our own special area. Gone are the generalists that are unafraid to take on entire industries or propose significant (and valuable) changes.

We have several industries in America that are remarkably inefficient – healthcare, education, agriculture, construction and even charitable giving, yet we don’t seek to change those industries, we tolerate the status quo.

If America is to become productive and economically sustainable we MUST focus on those people believe they can satisfy unmet demand with invention, not incremental innovation.

America is getting smaller because our ambition and thinking is smaller. If our government wanted to make a bigger difference, how about offering prize money to those that create economically viable solutions to our greatest problems? If they weren’t solved we wouldn’t waste our money, but entrepreneurs (as we’ve seen with X Prizes) will embrace the challenge and seek to invent valuable solutions.

Solutioneur@gmail.com

Posted by AndrewWest | Report as abusive

@OneOfTheSheep – For anyone in this day and age to postulate that corporations are not behind a myriad of ills besetting society and employees is balderdash. All

corporations? No, of course not. To also conflate some diluted idea that ‘a majority’ are against profit is pure Bircher speak. Where do you get your ideas?

I would argue that ‘most’ do know the definition of a corporation and that your argument smacks of libertarian theory. In some cases regulation is heavy-handed. On the other hand, in numerous cases it is absolutely required and I would add, if such refereeing were properly funded many corporations, small partnerships and citizens would be better protected against criminal behavior, sometimes life threatening behavior.

Does our form of government make mistakes? Is it messy? Affirmative on both counts. If you can name me a better way I’m all ears. Personally I’ve lately thought the
parliamentary system is superior. At least you can blame an entire party and toss them all at once.

However, I strongly object to your tone regarding unions. You sir, seem to be another pedestrian example of a so-called thinker who paints all unions as evil. That is as ignorant as lumping all corporations together. Or do you genuinely believe, being of sufficient experience, that pro athletes, for example, are better served by standing as individuals against those who would master their careers, their health and their lives? I could give you other examples of unionization as the only safeguard against blatant exploitation…

Agree totally that fraud and waste exist in governmental programs but those are two different things. Show me one governmental program where the same does not exist? No society will ever be without it’s poor, capitalist or otherwise. To equate the growing underclass as a cancer, to be lopped off, is to misunderstand how we arrived at this point.

I could argue, quite successfully, that some governmental largess is a result of decades of hyper-capitalist policies and are perhaps a necessary, countervailing reaction to the profit chasing and bastardization of the political process (many) big corporations have practiced, and will continue to practice. That’s not to say I believe handouts solve the respective problem.

To equate the underclass as a stick in your spoke or a stone in your shoe is to totally miss the realization that the poor are not going away. Mass extermination, as
well as mass deportation I might add, are not on the table. Many receiving subsidy are ‘contributing their presence.’ Corporations don’t have an obligation to create work for these people but ‘society’ certainly needs to solve, if only in part, the dilemma of finding them labor. It comes down to economics: to wages. That issue opens up a whole essay regarding our economy which I highly doubt you can adequately even address, let alone answer.

You are correct that the day is coming when at least in the cities there will be an uprising, if ‘things’ continue without corrections. One of the questions is what will the nation decide to focus on now that we are in such a barrel due to the wars and corporate handouts of late. For instance, will a majority vote for their own pocketbooks or how long can we print money, etc.?

Posted by Mac20nine | Report as abusive

[…] les autres pays pour gĂ©nĂ©rer de la croissance. A cette frontiĂšre, l’innovation est le seul facteur de dĂ©veloppement de l’économie, un contributeur majeur Ă  la crĂ©ation d’emplois et un levier de rĂ©duction […]