The Nobel Prize-winning economist explains his view on the values which have helped modern economies thriveby Prospect Team / October 16, 2013 / Leave a comment
In 2006, when the American economist Edmund Phelps was awarded the Nobel Prize in Economics, the Nobel committee declared that he had helped to “deepen our understanding of the relation between short-run and long-run effects of economic policy”. Not long after that award, Phelps’s fellow Nobel laureate Amartya Sen paid tribute to his interest, rarer among academic macroeconomists than one might think, in the question of why economics is “such an important subject for the lives of human beings”. Phelps, Sen said, had always kept in view the “human interests” that lie behind “macro investigations”.
That concern with fundamental human interests is very much to the fore in Phelps’s latest book, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change (Princeton University Press, £19.95). In it he examines the birth of modern capitalist economies in Britain, the United States and elsewhere in the early 19th century and asks: “What happened … that caused people in some countries to have—for the first time in human history—unboundead growth of their wages, expansion of employment in the market economy, and widespread with their work?”