It is Not So Bad

A recurring theme of the Nobel laureate in economics, Edmund Phelps, is that ”the good life” cannot be achieved through consumption. On the contrary, he believes that a life filled with meaning – a prosperous life – is mainly achieved when one is both the actor and producer. The actor role must be understood in a broad sense – as a producer of offspring and of valuable goods and services, as a problem solver, as a person who takes on demanding challenges, makes discoveries and creates and exploits opportunities. Phelps also highlights that the fountainhead of economic growth is not more work, investment, education or research. The real source of growth is innovation and the dynamism that follows from innovation. This dynamic process results in investment opportunities and the creation of jobs with higher productivity; the value of human knowledge also increases. Return on human capital provides an incentive to acquire economically valuable skills through formal education and in other ways, not least at work.