An Orgy of Innovation
The economic historian Deirdre McCloskey coined the term “innovationism" to describe the phenomenal rise in innovation over the past couple hundred years. While
The economic historian Deirdre McCloskey coined the term “innovationism" to describe the phenomenal rise in innovation over the past couple hundred years. While there have always been inventors and innovators, that number exploded after the eighteenth century, contributing to what we’ve described in previous videos as the “Hockey Stick of Human Prosperity."
Why has innovation grown so rapidly? Economist Douglass North argued it had to do with institutions such as property rights, non-corrupt courts, and rule of law, which lay the foundation for innovation to take place. Others attribute the rise to factors such as education or access to reliable energy. McCloskey argues that what really kicked innovation into high gear is a change in attitude — ordinary people who once celebrated conquerors and kings began to celebrate merchants and inventors.
In this video, we discuss these ideas further. After all, a better understanding of what drives innovation could help poor countries that still live on the handle of the “Hockey Stick" reach a much greater level of prosperity.
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So why are third world countries still struggling with poverty with regards to comparative advantage, dont they have something to produce and trade?
Speaking of specialization, comparative advantage and then trade as the beacon of improved quality of life and productivity, it got economist and trade strategist in the forthcoming to produce trade-specific economic indicators as Balance of Trade and Balance of Payments. But is it true that BOT and BOP is no wise economic indicator as they say excess import over export is not a bad thing at all until and unless there is trade going on and people are actually getting value of what they are spending? Is it true that trying to enforce favorable BOT and BOP unconditionally is actually true to stifle the genuine purpose of trade of gaining value?