Edmund Phelps (2008) - The Good Life Needs an Economy of Dynamism - Originality, Novelty, and Challenge - and these depend on Attitudes as much as Institutions

Edmund Phelps (2008)

The Good Life Needs an Economy of Dynamism - Originality, Novelty, and Challenge - and these depend on Attitudes as much as Institutions

Edmund Phelps (2008)

The Good Life Needs an Economy of Dynamism - Originality, Novelty, and Challenge - and these depend on Attitudes as much as Institutions

Abstract

The neoclassical theory running from Arrow, Samuelson, Becker, and the neo-neoclassicals Muth and Lucas to Ramsey, Pigou, Walras and Wicksell abstracts not just from the inessential: it abstracts from the essentials of a good life: In the "classic" traditions of western humanism, the good life consists of problem-solving, discovering one's talents and expanding one's capabilities (the Aristotelian perspective, aka "self-realization"); and it consists of accepting challenge, embarking on uncertain ventures, and the resulting self-discovery and continuous "becoming" (the Homerian-Nietschean-Bergsonian outlook). The good economy of a nation must offer to the largest possible number of citizens the prospect of such a life -- thus an economy of dynamism with inclusion. This requires economic institutions that open doors and offer rewards to new ideas, to entrepreneurial developers, to insightful financiers and to venturesome managers and consumers. Yet the economic dynamism of a country requires suitable attitudes and beliefs - the right economic culture - as much as enabling and facilitating institutional machinery.

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