How We Create the Wealth of Nations
Chapter 24: No Business Monopoly
When I have discussed the ideas in Parts I, II and III with academic colleagues, policy makers and business people, some have asked, ‘so what?’ A typical response is that these ideas may, perhaps, be interesting possibilities, but are, in practice, of minor importance, and the core business of the economics of innovation should carry on as before. My objective in Part IV, therefore, is to address this, ‘so what?’ question, and to spell out the implications of Parts I-III. For I believe that these ideas are highly relevant already, and will become more so in future. Moreover, there are several very important implications for the way we should study the economics of innovation in future. In this chapter, I start by addressing three particular responses to this work which I can paraphrase as follows: a) Surely, only business creates wealth? b) Surely, only business innovates? c) Surely, M-wealth is a greater priority than R-wealth? In brief, my answer to (a) and (b) is that business has no such monopoly, and my answer to (c) is that we should make no such generalisation. Only Business Creates Wealth? First of all, to say that, ‘only business creates wealth’, simply cannot be accurate when we talk of R-wealth. What of the surgeon working for the National Health Service,1 who saves a life, who restores someone’s sight, or performs other medical miracles? Recall that we defined R-wealth by reference to Ruskin’s maxim: ‘no wealth but life’. From that perspective, surgeons who save lives or materially enhance quality of life must surely rank as some of the greatest wealth creators of all.
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