2006-10-10

Dynamic Capitalism

Yesterday, Edmund Phelps was awarded the Nobel Prize in Economics joining all the other Americans who were granted the Nobel Prizes in hard sciences this year. Today, he has an opinion article in the Wall Street Journal contrasting the social market system of continental Europe with the more dynamic free-market capitalist system of North America and UK. He argues that even under a Rawlsian system (social utility function) where consideration is given only to the lowest-earning rung of society, the dynamic system is still preferable i.e. free markets make everyone wealthier.

2 comments:

Tim said...

Hey,
I read that article this morning. Glad to see that we're 'on the same page.'
The fact that Americans have won every Nobel prize thusfar certainly strengthens the author's argument that a system of dynamic capitalism engenders innovation and entrepreneurial activity, which in turn increase the well-being of society as a whole.
I hope we will live to see the confluence of the innovative and entrepreneurial spirit, which in my opinion represents the best of America, with forward-looking domestic and foreign policies. Perhaps then more Americans will win Peace prizes.

Diana Chavlah said...

Well,
AS Tim said an Pace said, countries become wealthier in a free market situation. the Fear of loosing jobs to foreighn labour is so 1900th century!

Europe has alot to learn from America. Just the fact that the service sector is greater than the one in europe says alot. We might have a 40 hour working week but for most people it's more since they have to deal with the domestic work like cutting the grass and cleaning the cars. I think that the americans need to teach us to buy services. it will reduce the stress and make people healthier