Creating a Learning Society: A New Approach to Growth, Development, and Social Progress

657 Pages·2014·6.94 MB·English

by  Joseph E. Stiglitz

Creating a Learning Society
KENNETH J. ARROW LECTURE SERIES
KENNETH J. ARROW LECTURE SERIES
Kenneth J. Arrow’s work has shaped the course of economics for the
past sixty years so deeply that, in a sense, every modern economist is
his student. His ideas, style of research, and breadth of vision have been
a model for generations of the boldest, most creative, and most
innovative economists. His work has yielded such seminal theorems as
general equilibrium, social choice, and endogenous growth, proving that
simple ideas have profound effects. The Kenneth J. Arrow Lecture Series
highlights economists, from Nobel laureates to groundbreaking younger
scholars, whose work builds on Arrow’s scholarship as well as his
innovative spirit. The books in the series are an expansion of the lectures
that are held in Arrow’s honor at Columbia University.
JOSEPH E. STIGLITZ AND BRUCE C.
GREENWALD
CREATING
A LEARNING
SOCIETY
A New Approach to Growth, Development,
and Social Progress
Columbia University Press
New York
Columbia University Press Publishers Since 1893
New York Chichester, West Sussex cup.columbia.edu
Copyright © 2014 Columbia University Press All rights reserved EISBN: 978-0-231-52554-1
Library of Congress Cataloging-in-Publication Data Stiglitz, Joseph E. Creating a learning society
: a new approach to growth, development, and social progress/Joseph E. Stiglitz and Bruce C.
Greenwald; with commentary and contributions from Philippe Aghion, Kenneth J. Arrow, Robert
M. Solow, and Michael Wood Ford.
pages cm. — (Kenneth Arrow Lecture) Includes bibliographical references and index.
ISBN 978-0-231-15214-3 (cloth : alk. paper) — ISBN 978-0-231-52554-1 (ebook) 1. Social
learning. 2. Information society. 3. Progress. I. Greenwald, Bruce C. II. Title. III. Series.
HQ783.S694 2014
303.3’2—dc23
2013047698
A Columbia University Press E-book.
CUP would be pleased to hear about your reading experience with this e-book at cup-
[email protected].
Cover design: Noah Arlow References to websites (URLs) were accurate at the time of writing.
Neither the author nor Columbia University Press is responsible for URLs that may have expired
or changed since the manuscript was prepared.
Contents
Preface
Acknowledgments
Introduction
PART ONE
Creating a Learning Society: A New Approach to Growth,
Development, and Social Progress: Basic Concepts
CHAPTER ONE
The Learning Revolution
CHAPTER TWO
On the Importance of Learning
CHAPTER THREE
A Learning Economy
CHAPTER FOUR
Creating a Learning Firm and a Learning Environment
CHAPTER FIVE
Market Structure, Welfare, and Learning
CHAPTER SIX
The Welfare Economics of Schumpeterian Competition
PART TWO
Analytics
CHAPTER SEVEN
Learning in a Closed Economy—the Basic Model
CHAPTER EIGHT
A Two-Period, N-Good Model with Endogenous Labor Supply
CHAPTER NINE
Learning with Monopolistic Competition
CHAPTER TEN
Long-Term Growth and Innovation
CHAPTER ELEVEN
The Infant-Economy Argument for Protection: Trade Policy in a Learning
Environment
PART THREE
Policies for a Learning Society
CHAPTER TWELVE
The Role of Industrial and Trade Policy in Creating a Learning Society
CHAPTER THIRTEEN
Financial Policy and Creating a Learning Society
CHAPTER FOURTEEN
Macroeconomic and Investment Policies for a Learning Society
CHAPTER FIFTEEN
Intellectual Property
CHAPTER SIXTEEN
Social Transformation and the Creation of a Learning Society
CHAPTER SEVENTEEN
Concluding Remarks
PART FOUR
Commentary and Afterword
CHAPTER EIGHTEEN
Introductory Remarks for the First Annual Arrow Lecture, Michael
Woodford
CHAPTER NINETEEN
Further Considerations, Joseph E. Stiglitz and Bruce C. Greenwald
CHAPTER TWENTY
Commentary: The Case for Industrial Policy, Philippe Aghion
CHAPTER TWENTY-ONE
Commentary—Robert Solow
CHAPTER TWENTY-TWO
Commentary, Kenneth J. Arrow
Afterword: Rethinking Industrial Policy, Philippe Aghion
Notes
References
Notes on Contributors
Index
Preface
THIS VOLUME is the result of the first in a series of lectures to honor one
of Columbia University’s most outstanding graduates, Kenneth J. Arrow,
who received his Ph.D. from Columbia in 1951. His thesis, later published
as Individual Choice and Social Values, was a landmark in economics,
philosophy, and political science. In the more than sixty years that
followed, Ken went on to become a giant in economics, political science,
organization theory, and operations research.
Columbia University has had a long line of distinguished graduates
and faculty—including six Nobel Prizes in the past thirteen years. The
faculty list for economics includes Milton Friedman, who taught at
Columbia for ten years; Arthur Burns, who served on President
Eisenhower’s Council of Economic Advisers from 1953 to 1956 and as
chair of the Federal Reserve Board from 1970 to 1978; and Wesley
Mitchell, who along with Burns played a central role in founding the
National Bureau of Economic Research, one of the nation’s most
important think tanks, which focused in its earlier years on enhancing
understanding of economic fluctuations. There are a host of other greats,
known more to those within the economics profession than those outside,
including Harold Hotelling, Albert Hart, and John Bates Clark (whose
namesake medal is awarded every year to the economist under forty who
has made the most significant contribution to economics; Arrow was the
fifth recipient of the honor.)
With all of these potential luminaries, our decision to honor Kenneth
Arrow was easy: No individual has done more to change how we think
about economics—and about society beyond economics—during the
past six decades. In a sense, virtually all theorists—and most
policymakers—of our generation are students of Arrow (and, it might be
added, our students can be considered their “grandstudents”). Ideas that