I usually like the Adam Smith Institute Blog but this has to be one of the
silliest things I have ever read.
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 innovation
Yes 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.
5 comments:
It's definitely a bit naive of you to think that innovation doesn't come from capitalism. Yes, education and access to learning are vital, but the VAST majority of innovation over the last 200 years has come from companies who see a gap in a market, and then create a product to fill that gap. There are certainly plenty of examples of innovation among academia, but most innovation is done by the private sector. You'll certainly not find that much innovation among the left, unless you preferred mode of transport is a Trabant.
And where does the product come from that fills the gap? Mid-air? Off a balance sheet? No it comes from people. And by and large in this era people who have come from University.
Do you think the likes of Intel and google and microsoft hire people with university degrees because they like the prestige?
No! They know that is the way they increase their profits.
Without access to education we would be at the technological level of the 1900s. without capitalism we would probably be in the 60s.
Business is not longer manufacturing based in the first world it is idea based. Thinking that we have limit people going to university so they can drive trains is very nieve (as alluded to in the article linked too) The train driving positions are getting few and few all the time. 50% in uni is a very small
I absolutely agree that we need education to promote innovation. But answer this question: without Capitalism, would there be ANY innovation?
Of course. Soviet Russia did quiet alot of innovation. Especially in the aerospace industry. Capitalism drives innovation it does not make it.
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