This ties in neatly with William Nordhaus' paper on the profits to innovation: only some 2.2% is kept by the innovator, the rest goes to consumers. Clark then goes on: "But the efficiency growth from innovation is actually the true source of all growth,..."But the efficiency growth from innovation is actually the true source of all growth,..." Which really leads us to a rather interesting thought. We're told that in this modern world we need an ever more educated workforce: indeed, it is Government policy that 50% should go to university. That is, that more human capital will lead to growth. But if Clark is right, that isn't so. Rather, attention should be paid to the barriers in the way of innovation, for that is the true source of growth.Rather then innovation coming from some crazy things like innovative idea's innovation comes from.
Or to put it more directly, if innovation is the source of wealth then mightn't we want a little more of that capitalism, red in tooth and claw, the system that best promotes said innovationYes capitalism promotes innovation and drives it but what creates it Elves? No it is human's and the best way to get them to innovate on average is to give them a university education or at least access to learning. Very little innovation is built on ether most is improvements on the past technologies etc on learning. Thinking that if you simply drop off regulations all these new inventions will suddenly appear is silly. Google was not made by regulations it was made by too guys in Uni with an idea.