On November 27, 2013,
Deirdre Mc. Closkey, Professor at the University of Illinois, held
the 2013 John Bonython lecture at the Centre for Independent Studies.
She explained how our societies got rich and what they can do to
ensure future economic growth.
“This
argument that I am making can be called humanomics – economics with
the humans left in.”
I retain three key points
that she identified:
1. Capitalism is good
for societies.
“A
life in business is not the worst life, ethically, that one can
imagine.”
“Capitalism
is an altruistic way of organizing society.”
“I
have seen worse behavior in the church than in most businesses.”
2. Innovation is
paramount for the development of states.
“Innovation
made the modern world, not investment.”
“It's
discovery that made it all. So it's got to be non-routine. And the
problem with most economics is that it's routine.”
In Deidre's view,
innovation can sometimes lead to economic downturns. A recent example
is the role that played securitization techniques (a financial
innovation) in the 2008/09 financial crisis. However, this does not
speak against innovation as such. It is simply a proof that people
tend to overdo new things.
“That
[securitization of mortgage loans, causing the financial crisis in
2008/09] was a financial innovation. That was a good thing done too
much. We are humans. We got a new toy, we are gonna play with it! And
then we get depressed.”
3. Societies need to
defeat the heritage of patrimonial rights to embrace innovation.
Deirdre cites the example
of nobility that disappeared in Europe in the 19th and
20th century, leaving space for the constructive
destruction of innovation.
“I
accept that there are political situations and social formations and
cultural habits that might, for a while, prevent an economy from
sharing this amazing engine of creativity.”
“We
can see the future in China and India. […] Both of them had an
ideological change. The change is, instead of shooting entrepreneurs,
to encourage them.”
Resource:
The lecture was organized
by the Centre for Independent Studies.