Mokyr vs. Phelps

Joel Mokyr’s review of Mass Flourishing (ungated version, anyone?), and it is not glowing.

Mokyr refers to Mariana Mazzucato’s The Entrepreneurial State, which argues contra Phelps (and contra nearly everyone on the libertarian side of things) that the state has been the font of much innovation.

Mazzucato’s bullishness on government as a source of entrepreneurial flourishing is a strong antidote to Phelps’s dismissive view of corporatism as the source of all evil, although her enthusiasm for state-led innovation is at times overblown; the truth is somewhere in between. Like a bad marriage, innovation and the State cannot live with or without one another. It is a standard dilemma for all capitalist societies.

There must be something about Phelps–style, substance, or both–that puts people off. Recall that he received a lot of pushback when he spoke at a dinner last month. My own review was more on the positive side.

Mokyr locates Phelps’ antipathy toward Schumpeter:

I argued at length in Mokyr (2002) [that] It was not either science or business, but the realization that there are huge complementarities between them that led to success. Phelps notes that Schumpeter made this very point, but then dismisses him as a “pied piper” who misled historians and the general public (p. 10).

3 thoughts on “Mokyr vs. Phelps

  1. Like a bad marriage, innovation and the State cannot live with or without one another. It is a standard dilemma for all capitalist societies.

    What does this even mean? This statement is hopelessly removed from a useful truth value.

    In other news, the sky is a color.

  2. Schumpeter may have been pessimistic but to an extent he and later authors saw waves in innovation alternating between corporatism and pioneering where corporatism fills in the gaps left by the last pioneering to be succeeded by the next pioneering. One can view these as offering differing returns. During pioneering there are so many possibilities only the most promising can be pursued but as these disappear, less and less profitable opportunities that require the higher levels of investment that corporatism offers until momentous new opportunities open up.

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