The Joys of Innovation: For Profit Only

Philippe Petit/Paris Match/Getty Images
Edmund Phelps, Amartya Sen, and Joseph Stiglitz at a conference on the future of capitalism, Paris, January 2009

In his inaugural address on March 4, 1933, Franklin D. Roosevelt sought to reassure his fellow citizens that he would devote full effort to putting them back to work and lifting them out of the widespread poverty and destitution into which the Depression of the past three years had sunk so many. But the new president also struck a different tone, departing from the stricken nation’s natural focus on restoring employment and material living standards. “Happiness lies not in the mere possession of money,” Roosevelt declared; “it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits.”

In highlighting the importance of creativity and achievement, and therefore the moral value of work, Roosevelt—the US president who, more than any other, quoted from the Bible and appealed to biblical themes—was harking back to a traditional religious interpretation of humanity.1 In the account given in Genesis, God created man “in our image, after our likeness.” But what image was that? As of the sixth day of creation, when the story has God making Adam and then Eve, all that God had done was create: first the light and the darkness, then the sky and the earth and the oceans, then plants, then the sun and moon and stars, then birds and fish, and finally—until man, that is—land animals. The essential trait to be imparted when God created man “in his own image,” therefore, was creativity. Although the creation story as we have it is from the Hebrew Bible, the identification of creativity as the intrinsic essence of the human character, on just these grounds, is familiar among Christian thinkers as well.2

Secular thinkers have often expressed the same idea. David Hume, the quintessential Enlightenment philosopher, departed from the traditional Western view, dating to Aristotle, that the distinguishing characteristic of man is reason. Hume argued that it is the human imagination. His protégé Adam Smith followed his lead in this respect. The main theme of Smith’s first book, The Theory of Moral Sentiments, was the paramount role in human relations of what he called “sympathy”; but sympathy of the kind he envisioned—a “fellow-feeling” that requires “placing ourselves in [another person’s] situation”—is possible “by the imagination only.”

Not surprisingly, Smith also wrote about the importance of imagination in his economic analysis. He did not have in mind the modern idea that creative people continuously devise inventions that enhance productivity and therefore enable ongoing economic growth of the kind the West has enjoyed for the past two centuries; he lived too early to understand this process, nor did he envision it. Instead, as he highlighted at the beginning of…

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