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Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change [Hardcover]

Edmund S. Phelps
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Book Description

2 July 2013

In this book, Nobel Prize-winning economist Edmund Phelps draws on a lifetime of thinking to make a sweeping new argument about what makes nations prosper--and why the sources of that prosperity are under threat today. Why did prosperity explode in some nations between the 1820s and 1960s, creating not just unprecedented material wealth but "flourishing"--meaningful work, self-expression, and personal growth for more people than ever before? Phelps makes the case that the wellspring of this flourishing was modern values such as the desire to create, explore, and meet challenges. These values fueled the grassroots dynamism that was necessary for widespread, indigenous innovation. Most innovation wasn't driven by a few isolated visionaries like Henry Ford; rather, it was driven by millions of people empowered to think of, develop, and market innumerable new products and processes, and improvements to existing ones. Mass flourishing--a combination of material well-being and the "good life" in a broader sense--was created by this mass innovation.

Yet indigenous innovation and flourishing weakened decades ago. In America, evidence indicates that innovation and job satisfaction have decreased since the late 1960s, while postwar Europe has never recaptured its former dynamism. The reason, Phelps argues, is that the modern values underlying the modern economy are under threat by a resurgence of traditional, corporatist values that put the community and state over the individual. The ultimate fate of modern values is now the most pressing question for the West: will Western nations recommit themselves to modernity, grassroots dynamism, indigenous innovation, and widespread personal fulfillment, or will we go on with a narrowed innovation that limits flourishing to a few?

A book of immense practical and intellectual importance, Mass Flourishing is essential reading for anyone who cares about the sources of prosperity and the future of the West.


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Product details

  • Hardcover: 392 pages
  • Publisher: Princeton University Press; 1 edition (2 July 2013)
  • Language: English
  • ISBN-10: 0691158983
  • ISBN-13: 978-0691158983
  • Product Dimensions: 23.6 x 16.3 x 3 cm
  • Average Customer Review: 3.5 out of 5 stars  See all reviews (4 customer reviews)
  • Amazon Bestsellers Rank: 288,577 in Books (See Top 100 in Books)
  • See Complete Table of Contents

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Review

Winner of the 2014 Gold Medal in Economics, Axiom Business Book Awards

One of Financial Times (FT.com) Best Economics Books of 2013

A "Best Business Book of the Year for 2013" selected on LinkedIn by Matthew Bishop, Economics Editor of The Economist

"The book eloquently discusses the culture of innovation, which can refer to both an entrepreneurial mind-set and the cultural achievements during an age of change. . . . The dismal science becomes a little brighter when Mr. Phelps draws the connections between the economic ferment of the industrial age and the art of Beethoven, Verdi and Rodin."--Edward Glaeser, Wall Street Journal

"[I]nquiring readers, not just academics and social scientists, will enjoy the vast learning in Phelps's sophisticated, sometimes sardonic, look at homo economicus."--Publishers Weekly

"Phelps has written a book that transcends the materialist walls of standard economics. . . . It is a book J.M. Keynes would have admired . . ."--Paul DeRosa, American Interest

"Nobel laureate Edmund Phelps' latest book should be read by those seeking a broader context to the challenges currently facing the global economies. In his wide-ranging and insightful book, Professor Phelps draws on historical trends and cultural shifts to present his hypothesis that a lack of dynamism in modern economies lies at the root of the current malaise. . . . Indeed, this remarkable book addresses the central economic question of why some economies thrive while others languish."--Declan Jordan, LSE blog

"Phelps has produced an insightful work that bridges gaps among economics, sociology, and philosophy to identify countries that have the capabilities to prosper and flourish. This book is an essential read for individuals interested in better assessing countries' economies and competitive advantages."--Library Journal

"The author ranges extremely widely and any student of any age will gain something from it, irrespective of political views."--Samuel Brittan, Financial Times

"Phelps's book deserves credit for showing that the strength of an economy doesn't depend on small differences in the tax rate, or the tactics of a country's central bank. Phelps rightly points out that economic dynamism depends on much deeper issues like a culture's affinity for risk taking and respect for individual achievement. And he wields convincing statistics that suggest actors in our political economy, from our government, to corporations, to workers, have to some extent lost their reverence for these values."--Chris Matthews, Time.com Money & Business

"[F]ascinating, versatile and profound . . ."--Felix Martin, New Statesman

"I . . . find his values-driven view of national prosperity fascinating--and applicable to corporate and personal prosperity. If innovation and the prosperity it yields stem from the values to which we subscribe as individuals, organizations, and nations, it stands to reason that we should be paying a great deal of attention to the particular values we adopt and espouse."--Theodore Kinni, Strategy-Business.com

"[E]xciting . . ."--William Watson, National Post

"[W]ide-ranging. . . . Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change, a distillation of years of research and thought about the changes in values and attitudes that once unleashed wide-scale creativity and risk-taking and which are under severe threat today."--Brian Milner, Globe & Mail

"A great book that will annoy big business and absolutely infuriate the left. I loved it."--Diana Hunter, Financial World

"The book is wide-ranging and highly eclectic: in just two pages (pp. 280-281) you'll find references to Cervantes, Shakespeare, Hume, Voltaire, Jefferson, Keats, William Earnest Henley, William James, Walt Whitman, Abraham Maslow, Rawls, Nietzsche, and Lady Gaga! . . . Anyone interested in the synthesis of free markets and social justice will find this eminent thinker's distinctive version of that synthesis both illuminating and thought-provoking."--Brink Lindsey, Bleeding Heart Libertarians blog

"Phelps, a Nobel laureate in economics, defies categorisation. In this extraordinary book--part history, part economics and part philosophy--he proclaims individual enterprise as the defining characteristic of modernity. But he fears this dynamism is lost. One does not have to agree to recognise that Phelps has addressed some of the big questions about our future."--Martin Wolf, Financial Times

"Phelps has given us a clear warning of the dangers of corporatism. I hope that more people hear and heed the warning."--Arnold Kling, Econlog

"[I]t wasn't until today that I started looking at Mass Flourishing by Edmund Phelps, about the central role of innovation in modern growth and, more, in the enabling of the good life. Obviously I should have read it last week. It looks right on theme, and it is pleasing to pick up an economics book that has a chapter on Aristotle."--Enlightened Economist

"One does not have to agree to recognise that Phelps has addressed some of the big questions about our future."--Financial Times

"Mass Flourishing offers a brilliant dissection of the origins, causes, and eventual decline of modern capitalism--an inclusive economy characterized by the complex unfettered interactions among diverse indigenous innovators, entrepreneurs, financiers, and consumers. . . . This book should be accessible to general readers and is especially stimulating for graduate students and those interested in economics, sociology, history, political science, and psychology."--Choice

"It applies many important aspects of Virginia political economy, making a contribution to understanding not only the positive, but also the normative implications of the rules of the game."--Rosolino Candela, Public Choice

"It challenges many of our prized assumptions about what makes economies succeed."--David P Goldman, Standpoint

"This is a recommended read, not only because it was written by Edmund Phelps, the 2006 Nobel Laureate in economics, but for encouraging reflection on fundamental issues related to modern life and the contemporary interpretation of Aristotle's 'the good life'. The author is such an experienced and iconic guide that it makes the journey through the subjects covered in the book an excellent read for anyone."--Jacek Klich, Central Banking Journal

From the Inside Flap

"Anyone who finds today's economic debates too small-minded for the immense challenges we face should be drawn to this important work. Only Edmund Phelps would place ultimate blame for the Great Recession on the loss of the right concept of the good life. Phelps has been ahead of his time as an economic thinker for a half century. This may be his deepest, boldest, and most important work."--Lawrence H. Summers, Harvard University

"Few scholars have had the capacity to place the concept of the 'good life' in the context of both philosophical and economic thought. That is what Edmund Phelps has done in his masterly analysis of what he terms a 'modern economy,' once exemplified by Americans' capacity to innovate, to challenge, to dream--and to grow. But he warns that this model needs to be refreshed and changed to restore its potential."--Paul Volcker, former chairman of the Federal Reserve

"In this magisterial sweep of historical storytelling, Edmund Phelps draws upon his rich and deep cultural hinterland--from Robin Hood to Karl Marx to Friedrich Hayek--to explore why some countries develop dynamic economies driven by incessant innovation and inspiration while others still lag far behind. Economic history has rarely been more penetratingly understood and engagingly told."--Nicholas Wapshott, author of Keynes Hayek: The Clash That Defined Modern Economics

"This extraordinary, paradigm-shifting book provides fascinating and fresh insights into the relationship between economic systems, innovation, and creativity. Drawing from a dazzling array of historical and contemporary evidence, Edmund Phelps shows that misguided economic ideas have fractured societies and stifled well-being, and he provides a framework for going beyond the current predicament to create a better world. This book should be read by the widest possible audience."--Ian Goldin, director of the Oxford Martin School, University of Oxford

"In this powerful book, Edmund Phelps disrupts lines of debate between right and left. He shows how human initiative and creativity hold the key to future economic prosperity and social progress, and argues that what is holding us back are not the demands of the needy, but rather the stranglehold of conservative attitudes and entrenched privileges, which have steadily narrowed the field for individual innovation and accomplishment."--Philip K. Howard, author of The Death of Common Sense

"This book is what Adam Smith's Wealth of Nations should have been about, if it were to have been an even more important book. Mass Flourishing contains much history, but it focuses more on what society should do today, and it provides a call to action."--Robert J. Shiller, author of Finance and the Good Society

"This book is very good indeed, drawing on a lifetime of thought and experience and a wide knowledge outside economics as well as, of course, in it. Phelps's argument about the relationship between personal flourishing, the dynamism of a society, and the innovative capacity of that society is well argued and clearly enunciated."--John Kay, author of Obliquity: Why Our Goals Are Best Achieved Indirectly


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1 of 1 people found the following review helpful
5.0 out of 5 stars A Giant Innovator 29 Aug 2014
By Dr Barry Clayton TOP 1000 REVIEWER
Format:Kindle Edition
The author is a Noble Laureate. His book chaiienges many of our cherished assumptions about how economles succeed.

As he points out it is not engineering skills or education or scientific discovery or entrepreneural enterprise that leads to economic change, it is the willingness of all society to plunge into the 'frenzy of development'. In brief, to embrace novelty. The whole of society has to change habits, attitudes and ideas, and depart the safe harbour.

He disputes, as have others, the theories of Schumpeter and Spiethoff. He exposes, with ease, the errors of Marx and his historical determinism. He points out that the industrial revolution in this country was not made by scientists, but by humble men with ideas. For example, Arkwright was a wigmaker who invented the water-powered spinning frame.

Phelps points out that culture is the key to economic growth. He cites Israel as a prime example. Business plans abound in the state. Innovation thrives. During the 1990's Israel absorbed one million Russians. Some 57,000 of them were engineers, twice the number of engineers in Israel before they arrived. Israel's population is around 7m, yet the number of start-ups is huge.

The author also examines America's innovative history and suggests why it has declined in recent years.

The most fascinating part of this book is that devoted to China. She has to innovate. In the past 30 years China has dramatically increased R and D spending and dual-use technologies. Once a formidable totalitarian state, she is emerging into an innovative Asian giant. By 2020, China will have a national system that can track everyones credit history, meaning marginal costs of getting bank deposits will fall to zero.
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11 of 13 people found the following review helpful
2.0 out of 5 stars Not enough substance 13 Sep 2013
Format:Kindle Edition|Verified Purchase
Though this book is well written, there is not enough to it to justify the price or the time involved in reading it. Essentially it is one long platitude - market capitalism is the best way of providing people with satisfying lives - but very light on any kind of substantiating data. For example, the author assures us that people were/are extremely satisfied with jobs in factories - the evidence for this though is somewhat lacking and the counter argument (that such routine jobs are soul destroying and people take them because capitalism effectively gives them no choice) is not defeated.

I actually have some sympathy with what seems to be Phelps' main point - that modern capitalism is insufficiently able to take risks to be sustainable - but he does surprisingly little to prove it.
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1 of 2 people found the following review helpful
2.0 out of 5 stars poorly defined and unconvincing 28 Dec 2013
Format:Kindle Edition|Verified Purchase
The author is trying to propose a new way of looking at economic history, which is admirable enough, but his broad-brush conclusions are supported by little evidence and key concepts like 'innovation' and 'dynamism' are poorly defined.

Perhaps more worryingly the text fails to really carry the reader along or give context to where the story is headed.

A real disappointment :-(
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0 of 1 people found the following review helpful
5.0 out of 5 stars Brilliant 4 July 2014
Format:Hardcover
Ignore the last two reviews. It's a great book. . Hard going in places but that's because the ideas are complex. Put the time in and it will change your world view.
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Amazon.com: 4.2 out of 5 stars  18 reviews
21 of 22 people found the following review helpful
5.0 out of 5 stars A Genuine Classic 21 Aug 2013
By Bartley J. Madden - Published on Amazon.com
Format:Hardcover|Verified Purchase
Edmund Phelps has delivered a hugely important book destined to become a genuine classic and, for sure, a "must read" for anyone interested in why economies work and don't work. It contains unique insights about economic progress in the past and the public, private, and cultural changes needed to restore dynamism which is reflected in people at the grassroots level with the will and capacity to pursue the "good life" of working to develop and commercialize new ideas.

What particularly struck me is the enjoyable learning experience from reading how the author unpacks the core ideas of important thinkers, ranging from Aristotle to Schumpeter, in such a condensed and revealing way.

Phelps has a gift for open-minded inquiry of the past that applies hard-nosed, constructive skepticism to alternative explanations of the historical record and for plainly describing the logic of his own conclusions.

If your reaction to reading this book is similar to mine, you will want every politician, federal and state, to study pages 310 to 324 that explain how best to enable dynamism on a large scale. This is not about any political ideology ---- simply superb research and persuasive logic.
8 of 9 people found the following review helpful
5.0 out of 5 stars A Remarkable and Stimulating Book 29 Mar 2014
By Charles W. Calomiris - Published on Amazon.com
Format:Hardcover
It is impossible to read Mass Flourishing and not be deeply affected by it. It is written with a combination of passion and erudition that is extremely rare in books about economics. And it is impossible not to be a impressed by Professor Phelps' range of interests and knowledge in economic history, ancient philosophy, and political history. Some reviewers of the book, who specialize in one of those fields, may focus on a missing reference, or decry the absence of the discussion of some specific historical case, but those criticisms are themselves evidence of the far-reaching ambitions of this book, and of how much it achieves in 350 pages. Such complaints are akin to criticizing Adam Smith's Wealth of Nations for failing to discuss China's economic history.

Professor Phelps is willing to do something few top economists would attempt: to stake out a moral position about what sort of human striving is associated with the "good life." Although such a focus may seem strange today, the origins of both the word and the discipline of "economics" -- a word that can be found not only in ancient Greek thought, but also in the New Testament -- are very much about the meaning of the good life. He rejects the view that leisure and wealth accumulation alone can produce happiness, and links meaningful work convincingly with innovation and the modern values that encourage it.

One of my favorite parts of the book is its historical exploration into the origins of 20th century "corporatism" in chapter 6 -- where corporatism refers to the combining of economic and political power in pursuit of collective goals at the expense of individual freedom and competition -- which illustrates the many threats to material progress and individual happiness that have been produced by fascism, socialism, and other government attempts to create top-down planning. Some careless readers have misunderstood this as an attack on government policy or on the welfare state, but Phelps is careful not to make such exaggerated claims. His critique of government policy is narrowly and rightly focused on policies that trample on individual freedom, forestall paths of progress, and ignore the need to preserve economic rights as a necessary condition for individuals to participate most meaningfully in economic life.

Adam Smith explained in the Wealth of Nations that markets are a means to increasing wealth, by permitting specialization in production and the pursuit of larger scale of production, but Smith also recognized, in his Theory of Moral Sentiments, the important moral advantages that individuals enjoy as the result of living in a market society. Markets produce human progress not just by producing more wealth. Phelps combines these same sorts of insights but adapts the static Smithian worldview to the post-Industrial Revolution era of perpetual technological. He sees the prospect of continuous progress, not just in wealth, but in evolving ideas, in ever-changing and stimulating occupations, and in new ways to live and new ways to think, as the grand project that should inspire our public policies as much as our individual lives.

Perhaps most controversially, the book worries that corporatism has eroded the values and culture and competitive market structures that best foment innovation and individual happiness. He challenges the view that technological progress in the future will match the past. While some readers may scratch their heads at this claim, and point to the example of Silicon Valley's thriving culture of innovation, they are missing the point: Phelps conceives of an ideal economy in which the values and activities that produce progress are present in the lives of many people, not just in one or two industries in a handful of locations, and he worries that America may be falling short in producing such an environment, particularly because of its embrace of corporatist tendencies that are inimical to innovation. The evidence is not yet in on whether the recent productivity slowdown in the United States is a pause or a trend, but one thing seems certain: A broad, humanistic understanding of the moral, cultural, and organizational constructs that are conducive to innovative activity and to the "good life" must be part of that discussion.

Charles W. Calomiris
10 of 12 people found the following review helpful
4.0 out of 5 stars Investigation into what drives inspiration and the entrepreneurial spirit 24 Sep 2013
By A. Menon - Published on Amazon.com
Format:Hardcover|Verified Purchase
Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change is an investigation of what drives inspiration and entrepreneurial spirit at the level of the individual. In this work, the author attempts to analyze what institutional arrangements foster the creative process and ability to capitalize on them for the benefits of society. The author looks at various economic regimes and focuses on socialism, corporatism and modern capitalism and compares their merits with respect to nurturing the population's creative talents. This work measures fairly objective functions like productivity growth but gets into the bold philosophical territory of happiness and what drives it in people. In particular work satisfaction and its impact on overall happiness as well as innovation.

The author starts by debunking aspects of classical economic growth theory in which economic growth is exogenously determined through accumulation scientific knowledge and its permeativity within the population at large. The author disputes the idea that scientific frontier knowledge drives innovation in terms of productivity growth and notes the inventors of the 19th century often had no scientific training. The author describes the importanice of local knowledge that citizens all accumulate and the ability of them to use that knowledge to drive innovation and take risks that is far more important in driving productivity than abstract knowledge at the academic frontier. The author focuses on the UK and the US in terms of best environments that fostered innovation.

The author moves on to describing the competing economic regimes of the 20th century. The three major economic regimes are socialism (as pioneered in russia), corporatism (as advocated in Italy and Germany) and modern capitalism (as blueprinted by the US and UK). The author discusses his views on economic philosophy throughout and believes that growth and innovation must be considered as separate. In particular economies replicating productivity increases elsewhere need not be innovative as technology can be transferred instead of innovated hence productivity growth at the efficient frontier is what is the true test of dynamic society. In that respect the author sees socialism and corporatism as failing obviously. There are some tail statistical cases which can be used as examples of the success of corporatism or socialism, but these are the mere statistical anomolies that are inevitably to show up when there is a distribution around a mean. The author begins to discuss the effect on hapiness of an economy's dynamism. They note through questionaires responses that job satisfaction drives life satisfaction and that modern capitalism creates a more satisfied population through their ability to have more self determination.

The author then discusses where we are today. He notes the decline in productivity growth in the 60s and goes through a history of social reformation through the US, UK and Europe. The author then discusses some philosophy about what goes into a good life, using Aristotle as a base. He discusses the idea of self worth and pursuit of knowledge and achieving purpose. Clearly there is a lot of subjective material that reinforces the idea that creative destruction determined from the grassroots level is preferable to a culture of countercyclical economic culture that retards the desire to innovate through diluted returns to risk takers. It does become clear where the authors foundational "axioms" come from that strongly determine why modern capitalism is argued to be superior.

This is a solid work on innovation and what is needed to foster it. Removing the incentives to the entrepreneur come with dire repurcussions to long run vitality and that is an important observation. Given how many US companies remain in the top 50 and how dominant they are in the top 10 (by market cap) is a reminder of the strength of US corporate dynamism and spirit. There are failings within the US system that are marginilizing the impact of potential innovation from the grassroots as more of the workforce is excluded from that process- these must be improved for the US to continue to innovate and be a world leader. This is a philosophical work with a strong message. There are aspects of this kind of thinking in the history of economic and philosophical thought and this is not entirely new. All in all it brings focus to what really drives human progress and that is continued human innovation which the author strongly reminds us- is not a given.
10 of 13 people found the following review helpful
4.0 out of 5 stars Interesting History of Economic Development - 3 Nov 2013
By Loyd E. Eskildson - Published on Amazon.com
Format:Hardcover
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 of 2 people found the following review helpful
4.0 out of 5 stars A One-Handed Economist Gives A Passionate Summation of his Work 10 Feb 2014
By MT57 - Published on Amazon.com
Format:Hardcover|Verified Purchase
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.
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