Originally Posted: August 6, 2018
As these five books illustrate, insights into economic growth sometimes show up in surprising places.
Bruce Springsteen’s iconic song “Born to Run” topped the music charts and his book of the same title made the bestseller list, but most people don’t think of him as contributing to discussions of economic policy. Consider, though, that the story of economic growth is not just about numbers. It’s actually a story of people, creativity, near-misses, and improbable breakthroughs. And it teaches us that we can’t take growth for granted.
Springsteen’s memoir Born to Run provides music fans with a highly readable account of the enormous commitment and sustained hard work at the heart of human creativity. “The Boss” arrives at his band’s one-of-a-kind sound only after a decade of non-stop experimentation and live performing, only after building a unique and remarkably diverse organization, and only after tapping into a vast array of influences in the hot-house creative environment of New York. The takeaway for economic policy: growth is a function of creativity, and the best way to promote growth is to foster an environment in which creativity flourishes.
To economists, long-term economic growth is a straightforward process. It’s the steady rise in economic output and living standards that arises from technological progress, increasing human capital in the form of education and practical know-how, and a growing stock of physical capital.
Over the last generation, economists have added immeasurably to our understanding of the conditions that give rise to healthy long-term growth. The most popular explanations for successful growth have focused on the role of good public-sector institutions and growth-friendly cultural environments. A particularly important strand in literature shows how devastating bad policies can be for growth – especially policies that promote “crony capitalism,” weaken property rights, or diminish the incentives for people to invest in their own human capital.
But history also has a great deal to teach us about economic growth. An indispensable history of growth in our country is The Rise and Fall of American Growth by economist Robert J. Gordon. Gordon’s magisterial history makes two compelling points. READ MORE