Phelpsian Dynamism: A New Perspective

Abstract

The essence of Edmund Phelps’s theory of dynamism is a deliberation on how an economy can invigorate rather than hamper the human drive to create and to explore. The theory perceives societal values associated with modernism and modern economies as the premise for such dynamism. This essay considers a more general relationship of societal values and the human drive to create and explore in (economic) life. I discuss how no particular societal values (even of exploration itself) foster exploration and creation, but how those values come to leave a sense of space in between them. Specifically, I suggest that such a space should be seen as accompanying an opening of societal values toward some new kind of plurality rather than being a feature of any certain set of values, even if plural per se. I conclude by discussing how this perspective reframes Phelps’s theory of dynamism.

Keywords: economic thought, well-being, innovation, capitalism, performance of capitalist system

JEL Classification: B22, B31, I3, O3, P1, P17